Document:

Naked Brand Group Inc.: Exhibit 10.2 - Filed by newsfilecorp.com

NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS
SECURITY IS EXCHANGEABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON
CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES. 

6% SENIOR SECURED CONVERTIBLE PROMISSORY NOTE 

	$_________ 	April __, 2014 

FOR VALUE RECEIVED, Naked Brand Group, Inc., a Nevada
corporation (the “Maker” or the “Company”), with its primary
offices located at 2-34346 Manufacturer’s Way, #2, Abbotsford, B.C. U237MI,
promises to pay to the order of _________ (the “Payee”) or his or its
registered assigns (with the Payee, the “Holder”), upon the terms set forth
below, the principal sum of __________________________ and NO/100ths Dollars ($
______ ) plus interest on the unpaid principal sum outstanding at the rate of 6%
per annum (this “Note”). Defined terms not otherwise defined herein shall
have the meanings ascribed to such terms in that certain purchase agreement of
even date herewith among the Maker, the Holder and certain other holders of
Notes substantially identical to this Note (the “Purchase Agreement”).

1.     Payments. 

          (a)     Unless an Event of Default
shall have previously occurred and be continuing or this Note shall be exchanged
by the Holder for securities in connection with the Subsequent Financing (as
defined below) pursuant to Section 4 herein, the full amount of principal and
accrued interest under this Note shall be due and payable on April ___, 2015
(the “Maturity Date”). If exchanged for securities of the Subsequent
Financing, the Notes will be immediately cancelled upon delivery of the
securities. 

          (b)     The Maker shall pay interest
to the Holder on the aggregate and then outstanding principal amount of this
Note at the rate of 6% per annum, payable in arrears on the earlier of (i) the
Maturity Date or (ii) acceleration of this Note following an Event of Default
pursuant to Section 3(b). Interest on this Note shall commence to accrue as of
the date of acceptance by the Company of the Purchase Agreement as executed and
delivered by the Holder (the “Original Issue Date”). 

          (c)     Interest shall be calculated
on the basis of a 360-day year, consisting of twelve 30 calendar day periods,
and shall accrue monthly commencing on the Original Issue Date until payment in
full of the outstanding principal, together with all accrued and unpaid
interest, and other amounts which may become due hereunder, has been made.
Interest hereunder will be paid to the Person in whose name this Note is
registered on the records of the Maker regarding registration and transfers of
this Note. 

          (d)     All overdue accrued and
unpaid principal and interest to be paid hereunder shall entail a late fee at
the rate of 12% per annum (or such lower maximum amount of interest permitted to
be charged under applicable law) which will accrue daily, from the date such
principal and/or interest is due hereunder through and including the date of
payment. Except as otherwise set forth in this Note, the Maker may not prepay
any portion of the principal amount of this Note. 

     2.     Senior Secured
Obligation. The obligations of the Maker under this Note are secured by
certain assets of the Maker pursuant to that certain Security Agreement, dated
as of the date hereof, by and among the Maker and the secured parties signatory
thereto. The Notes shall be senior to all indebtedness of the Company, except
for that certain indebtedness held by Kalamalka Partners, Ltd. as to which it
shall rank pari passu.

     3.     Events of Default. 

          (a)     “Event of Default”,
wherever used herein, means any one of the following events (whatever the reason
and whether it shall be voluntary or involuntary or effected by operation of law
or pursuant to any judgment, decree or order of any court, or any order, rule or
regulation of any administrative or governmental body): 

               (i)     any default in the payment of
the principal of, or the interest on, this Note, as and when the same shall
become due and payable, for which there will be no cure period;

               (ii)     Maker shall fail to observe
or perform any obligation or shall breach any term or provision of this Note and
such failure or breach shall not have been remedied within five (5) business
days after the date on which notice of such failure or breach shall have been
delivered (other than those occurrences described in other provisions of this
Section 3 for which a different grace or cure period is specified, or for which
no cure period is specified and which constitute immediate Events of Default);

               (iii)     Maker shall fail to observe
or perform any of its material obligations owed to the Holder or any other
material covenant, agreement, representation or warranty contained in, or
otherwise commit any material breach hereunder or in any other transaction
document executed in connection herewith, including the Purchase Agreement, and
such failure or breach shall not have been remedied within five (5) business
days after the date on which notice of such failure or breach shall have been
delivered (other than those occurrences described in other provisions of this
Section 3 for which a different grace or cure period is specified, or for which
no cure period is specified and which constitute immediate Events of Default);

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               (iv)     Maker shall commence, or
there shall be commenced against the Maker a case under any applicable
bankruptcy or insolvency laws as now or hereafter in effect or any successor
thereto, or the Maker commences any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction whether now or hereafter in
effect relating to the Maker, or there is commenced against the Maker any such
bankruptcy, insolvency or other proceeding which remains undismissed for a
period of thirty (30) days; or the Maker is adjudicated insolvent or bankrupt;
or any order of relief or other order approving any such case or proceeding is
entered; or the Maker suffers any appointment of any custodian or the like for
it or any substantial part of its property which continues undischarged or
unstayed for a period of thirty (30) days; or the Maker makes a general
assignment for the benefit of creditors; or the Maker shall fail to pay, or
shall state that it is unable to pay, or shall be unable to pay, its debts
generally as they become due; or the Maker shall call a meeting of its creditors
with a view to arranging a composition, adjustment or restructuring of its
debts; or the Maker shall by any act or failure to act expressly indicate its
consent to, approval of or acquiescence in any of the foregoing; or any
corporate or other action is taken by the Maker for the purpose of effecting any
of the foregoing; 

               (v)     Maker shall default in any of
its respective obligations under any other Note or any mortgage, credit
agreement or other facility, indenture agreement, factoring agreement or other
instrument under which there may be issued, or by which there may be secured or
evidenced any indebtedness for borrowed money or money due under any long term
leasing or factoring arrangement of the Maker, whether such indebtedness now
exists or shall hereafter be created and such default shall result in
indebtedness aggregating more than $200,000 becoming or being declared due and
payable prior to the date on which it would otherwise become due and payable;
or

               (vi)     except in connection with
the Subsequent Financing or the proposed debt restructuring, the Maker shall (a)
be a party to any Change of Control Transaction (as defined below), (b) agree to
sell or dispose all or in excess of 50% of its assets in one or more
transactions (whether or not such sale would constitute a Change of Control
Transaction), (c) redeem or repurchase more than a de minimis number of shares
of Common Stock or other equity securities of the Maker, or (d) make any
distribution or declare or pay any dividends (in cash or other property, other
than common stock) on, or purchase, acquire, redeem, or retire any of the
Maker’s capital stock, of any class, whether now or hereafter outstanding.
“Change of Control Transaction” means the occurrence of any of:
(i) an acquisition after the date hereof by an individual or legal entity or
“group” (as described in Rule 13d-5(b)(1) promulgated under the Securities
Exchange Act of 1934, as amended) of effective control (whether through legal or
beneficial ownership of capital stock of the Maker, by contract or otherwise) of
in excess of 51% of the voting securities of the Maker, (ii) a replacement at
one time or over time of more than one-half of the members of the Maker’s board
of directors which is not approved by a majority of those individuals who are
members of the board of directors on the date hereof (or by those individuals
who are serving as members of the board of directors on any date whose
nomination to the board of directors was approved by a majority of the members
of the board of directors who are members on the date hereof), (iii) the merger
of the Maker with or into another entity that is not wholly owned by the Maker,
consolidation or sale of 33% or more of the assets of the Maker in one or a
series of related transactions, or (iv) the execution by the Maker of an agreement to which the Maker is a party or by which it is
bound, providing for any of the events set forth above in (i), (ii) or (iii). 

3 

               (vii)     The occurrence of any
event, whether or not such event could have been known through the exercise of
due diligence or otherwise, which could have a material adverse effect on the
business or prospects of the Maker, shall immediately cause this Note to
accelerate and become immediately due and payable. 

          (b)     If any Event of Default
occurs and shall be continuing, the full principal amount of this Note, together
with all accrued interest thereon, shall become, at the Holder’s election,
immediately due and payable in cash.

          (c)     The Holder need not provide
and the Maker hereby waives any presentment, demand, protest or other notice of
any kind, and the Holder may immediately and without expiration of any grace
period enforce any and all of its rights and remedies hereunder and all other
remedies available to it under applicable law. Such declaration may be rescinded
and annulled by the Holder at any time prior to payment hereunder. No such
rescission or annulment shall affect any subsequent Event of Default or impair
any right consequent thereon.

     4.     Subsequent Financing
Conversion and Exchange. At any time prior to the Maturity Date, this Note
shall be automatically converted into and exchanged, into an amount equal to the
face value of this Note, plus all accrued and unpaid interest hereon, into any
other securities issued by the Company in connection with a Subsequent Financing
at a conversion price equal to ninety percent (90%) of the purchase price paid
by the purchasers of such securities in the Subsequent Financing. (For example
purposes only, a Holder with $100,000 face value Note shall be entitled to
convert into $110,000 of securities in the Subsequent Financing.) Upon such
exchange, this Note will be immediately cancelled upon delivery of the
securities. The holder shall be entitled to the exact same rights and benefits
of any purchaser of securities in the Subsequent Financing. “Subsequent
Financing” means that offering approved by a majority of the Note Holders
which results in gross proceeds to the Maker of at least $4,000,000.

     The Maker shall provide the
Holder with at least five (5) business days prior notice before the consummation
of a Subsequent Financing in order to provide the Holder with an opportunity to
covert and exchange this Note into the securities offered by the Maker to third
parties in a Subsequent Financing. 

     5.     Negative Covenants. So
long as any portion of this Note is outstanding, the Maker will not directly or
indirectly: 

          (a)     other than Permitted
Indebtedness, enter into, create, incur, assume, guarantee or suffer to exist
any indebtedness for borrowed money of any kind debt incurred by the Company in
the ordinary course of business, not to exceed $50,000 in the aggregate; 

          (b)     other than Permitted Liens,
enter into, create, incur, assume or suffer to exist any liens of any kind, on
or with respect to any of its property or assets now owned or hereafter acquired
or any interest therein or any income or profits therefrom; 

4 

          (c)     amend its articles of
incorporation, bylaws or other charter documents so as to adversely affect any
rights of the Holder, unless the sole and exclusive purpose of such amendment of
the Maker’s articles of incorporation, bylaws or other charter documents is to
increase the authorized capitalization of the Maker; 

          (d)     repay, repurchase or offer to
repay, repurchase or otherwise acquire more than a de minimis number of
securities other than the Notes subject to the prepayment provisions herein or
as set forth on Schedule I hereto; 

          (e)     pay cash dividends or
distributions on any equity securities of the Maker; or

          (f)     enter into any agreement with respect to any of the
foregoing. 

     “Permitted Indebtedness”
shall mean either (a) the indebtedness of the Maker existing on the date of
issuance of this Note and set forth on Schedule II hereto and (b) any
indebtedness incurred by the Maker or any successor-in-interest to the Maker in
connection with a Subsequent Financing, (c) any indebtedness the proceeds of
which are used to repay the Notes in full, (d) indebtedness incurred in
connection with discounted bills of exchange or the discounting or factoring of
receivables for credit in each case incurred in the ordinary course of business
consistent with past practice and (e) any indebtedness incurred in the ordinary
course of business consistent with past practice or consented to by holders of a
majority of the outstanding principal and interest on the Notes, which consent
shall be binding upon the Holder. 

     “Permitted Lien” shall
mean the individual and collective reference to the following: (a) liens for
taxes, assessments and other governmental charges or levies not yet due or liens
for taxes, assessments and other governmental charges or levies being contested
in good faith and by appropriate proceedings for which adequate reserves (in the
good faith judgment of the management of the Maker) have been established in
accordance with generally accepted accounting procedures, (b) liens imposed by
law which were incurred in the ordinary course of business, such as carriers’,
warehousemen’s and mechanics’ liens, statutory landlords’ liens, and other
similar liens arising in the ordinary course of business, and (x) which do not
individually or in the aggregate materially detract from the value of such
property or assets or materially impair the use thereof in the operation of the
business of the Maker or (y) which are being contested in good faith by
appropriate proceedings, which proceedings have the effect of preventing the
forfeiture or sale of the property or asset subject to such lien, (c) purchase
money security interests, and (d) liens set forth on Schedule 4(f) of the
Security Agreement. 

     6.     No Waiver of the Holder’s
Rights. All payments of principal and interest shall be made without
setoff, deduction or counterclaim. No delay or failure on the part of the Holder
in exercising any of its options, powers or rights, nor any partial or single
exercise of its options, powers or rights shall constitute a waiver thereof or
of any other option, power or right, and no waiver on the part of the Holder of
any of its options, powers or rights shall constitute a waiver of any other
option, power or right. Maker hereby waives presentment of payment, protest, and
all notices or demands in connection with the delivery, acceptance, performance,
default or endorsement of this Note. Acceptance by the Holder of less than the
full amount due and payable hereunder shall in no way limit the right of the Holder to
require full payment of all sums due and payable hereunder in accordance with
the terms hereof.

5 

     7.     Modifications. No term
or provision contained herein may be modified, amended or waived except by
written agreement or consent signed by the party to be bound thereby. 

     8.     Cumulative Rights and
Remedies; Usury. The rights and remedies of the Holder expressed herein are
cumulative and not exclusive of any rights and remedies otherwise available
under this Note, or applicable law (including at equity). The election of the
Holder to avail itself of any one or more remedies shall not be a bar to any
other available remedies, which the Maker agrees the Holder may take from time
to time. If it shall be found that any interest due hereunder shall violate
applicable laws governing usury, the applicable rate of interest due hereunder
shall be reduced to the maximum permitted rate of interest under such law. 

     9.     Use of Proceeds. Maker
shall use the proceeds from this Note hereunder solely for the purposes
contemplated in Schedule III hereto. 

     10.     Severability. If any
provision of this Note is declared by a court of competent jurisdiction to be in
any way invalid, illegal or unenforceable, the balance of this Note shall remain
in effect, and if any provision is inapplicable to any person or circumstance,
it shall nevertheless remain applicable to all other persons and circumstances.
If it shall be found that any interest or other amount deemed interest due
hereunder shall violate applicable laws governing usury, the applicable rate of
interest due hereunder shall automatically be lowered to equal the maximum
permitted rate of interest. 

     11.     Successors and
Assigns. This Note shall be binding upon the Maker and its successors and
shall inure to the benefit of the Holder and its successors and assigns. The
term 

“Holder” as used herein, shall also include any
endorsee, assignee or other holder of this Note. 

     12.     Lost or Stolen Promissory
Note. If this Note is lost, stolen, mutilated or otherwise destroyed, the
Maker shall execute and deliver to the Holder a new promissory note containing
the same terms, and in the same form, as this Note. In such event, the Maker may
require the Holder to deliver to the Maker an affidavit of lost instrument and
customary indemnity in respect thereof as a condition to the delivery of any
such new promissory note. 

     13.     Governing Law. All
questions concerning the construction, validity, enforcement and interpretation
of this Note shall be governed by and construed and enforced in accordance with
the internal laws of the State of New York, without regard to the principles of
conflicts of law thereof. Each of the Maker and the Holder agree that all legal
proceedings concerning the interpretations, enforcement and defense of this Note
shall be commenced in the state and federal courts sitting in The City of New
York, County of New York (the “New York Courts”). Each of the Maker and
the Holder hereby irrevocably submit to the exclusive jurisdiction of the New
York Courts for the adjudication of any dispute hereunder (including with
respect to the enforcement of this Note), and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is improper. Each of the Maker and the Holder hereby irrevocably
waive personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to the other at the address in effect for notices to it under this Note and
agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law. Each of the Maker and
the Holder hereby irrevocably waive, to the fullest extent permitted by
applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Note or the transactions contemplated hereby. 

6 

     14.     Notice. Whenever
notice is required to be given under this Note, unless otherwise provided
herein, such notice shall be given in accordance with of the Purchase Agreement.

     15.     Required Notice to the
Holder. The Holder is to be notified by the Maker, within five (5) business
days, in accordance with Section 15, of the existence or occurrence, of any
Event of Default. 

[Signature page follows] 

7 

     The undersigned has executed this
Note as a maker and not as a surety or guarantor or in any other capacity. 

	NAKED BRAND GROUP, INC. 
	 	  
	 	  
	By: 	 
	 	Joel Primus, Chief Executive Officer
  

8 

Schedule I 

	1. 	
      Convertible promissory note due to JMJ Financial, or its
      assignees, in the principal amount of $111,111 plus a one-time interest
      charge of 12%, or $13,333 for a total repayment amount of
  $124,444.

	 	 
	2. 	
      Convertible promissory note in the principal amount of
      $25,000 due to LG Capital Funding, LLC, or its assignees, which is bearing
      interest at 8% per annum and is subject to a prepayment premiums of 30%
      applied to the accrued principal and interest if prepaid prior to April
      22, 2014, or 40% at any time thereafter.

	 	 
	3. 	
      Convertible promissory note in the principal amount of
      $25,000 due to GEL Properties, LLC or its assignees, which is bearing
      interest at 8% per annum and is subject to a prepayment premiums of 30%
      applied to the accrued principal and interest if prepaid prior to April
      22, 2014, or 40% at any time thereafter.

	 	 
	4. 	
      Convertible promissory note in the principal amount of
      $83,500 due to Asher Enterprises, Inc or its assignees, which is bearing
      interest at 8% per annum and is subject to a prepayment premiums of 35%
      applied to the accrued principal and interest if prepaid prior to April
      30, 2014, or 40% at any time thereafter.

9 

Schedule II 

	1. 	
      Secured convertible promissory notes in the aggregate
      principal sum of $400,000 to certain lenders in connection with an Agency
      and Interlender Agreement, dated as of August 10, 2012, as amended, among
      the Company, Kalamalka Partners Ltd., as agent, and each of the
      Lenders.

	 	 
	2. 	
      Secured convertible promissory notes in the aggregate
      principal sum of $200,000 to certain lenders in connection with an Agency
      and Interlender Agreement, dated as of November 14, 2013, as amended,
      among the Company, Kalamalka Partners Ltd., as agent, and each of the
      Lenders.

	 	 
	3. 	
      Unsecured convertible promissory note due to JMJ
      Financial, or its assignees, in the principal amount of $111,111 plus a
      one-time interest charge of 12%, or $13,333 for a total repayment amount
      of $124,444.

	 	 
	4. 	
      Unsecured convertible promissory note in the principal
      amount of $25,000 due to LG Capital Funding, LLC, or its assignees, which
      is bearing interest at 8% per annum and is subject to a prepayment
      premiums of 30% applied to the accrued principal and interest if prepaid
      prior to April 22, 2014, or 40% at any time thereafter.

	 	 
	5. 	
      Unsecured convertible promissory note in the principal
      amount of $25,000 due to GEL Properties, LLC or its assignees, which is
      bearing interest at 8% per annum and is subject to a prepayment premiums
      of 30% applied to the accrued principal and interest if prepaid prior to
      April 22, 2014, or 40% at any time thereafter.

	 	 
	6. 	
      Unsecured convertible promissory note in the principal
      amount of $83,500 due to Asher Enterprises, Inc or its assignees, which is
      bearing interest at 8% per annum and is subject to a prepayment premiums
      of 35% applied to the accrued principal and interest if prepaid prior to
      April 30, 2014, or 40% at any time thereafter.

	 	 
	7. 	
      Unsecured promissory note with Alan Aaron, which is
      non-interest bearing and is repayable in five monthly instalments of
      $41,667 and one final payment of $63,229, on July 13, 2014. The one-time
      interest charge of 15% or $37,500 is repayable at maturity, or convertible
      at $0.10 per share at the option of the lender. The outstanding principal
      balance as of the date hereof is $267,395.

	 	 
	8. 	
      Unsecured promissory note with Doug Jeffery which is
      non-interest bearing and is repayable in eight equal installments of
      CDN$3,125 over the term of the note. The final CDN$3,750, representing a
      15% OID is repayable upon the company reporting net income from operations
      in a single month. The outstanding principal balance as of the date hereof
      is $6,875.

	 	 
	9. 	
      Unsecured promissory note with Bruce Gasarch in the
      principal amount of $38,334 which is non-interest bearing and will be
      repaid upon the closing of the Subsequent
Financing.

10 

	10. 	
      Unsecured promissory note with Jianying Luo in the
      principal amount of $51,078 which is non-interest bearing and will be
      repaid upon the closing of the Subsequent
Financing.

11 

Schedule III 

Working capital and repayment of the following debt obligations
as agreed by the parties and as further described in Schedule II; 

	1. 	
      Alan Aaron

	2. 	
      Doug Jeffery

	3. 	
      Bruce Gasarch

	4. 	
      Jianying Luo

12Naked Brand Group Inc.: Exhibit 10.3 - Filed by newsfilecorp.com

SECURITY AGREEMENT 

     This Security Agreement dated as
of April 7, 2014 (the “Agreement”) by and among Naked Brand Group, Inc.,
a Nevada corporation (“Borrower”), with its primary place of business at
2-34346 Manufacturer’s Way, Abbotsford, BC VU2S7MI, and the parties listed on
Schedule A hereto, which parties are also holders of a 6% Senior Secured
Convertible Promissory Notes (the “Notes”) issued by Borrower
(collectively, “Secured Parties”): 

     Borrower and Secured Parties hereby
  agree as follows: 

     1.     Certain Definitions. Unless otherwise defined
  herein or in the Notes, capitalized terms used herein that are defined in the
  Code shall have the meanings assigned to them in the Code. The following terms
  shall have the following meanings: (a) “Code” means the Uniform
  Commercial Code (or any similar or equivalent legislation) as in effect in any
  applicable jurisdiction. 

          (b)     “Collateral” shall
mean the property described on Exhibit A hereto. 

          (c)     “Lien” means any lien
(statutory or other), mortgage, pledge, hypothecation, assignment, deposit
arrangement, security interest, charge, claim or other encumbrance of any kind
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, and any agreement to give any security interest) and any
agreement to give or refrain from giving a lien, mortgage, pledge,
hypothecation, assignment, deposit arrangement, security interest, charge, claim
or other encumbrance of any kind. 

          (d)     “Obligations” shall have the meaning set forth in Section 3 below.

           (e) “Permitted
  Liens” means: such liens as are defined in the Notes. 

          (f) “Required Note
    Holders” shall mean the holders of a majority of the aggregate principal
  amount of the Notes. 

     2.     Security Agreement. 

          (a)     Grant. As collateral
security for the payment and performance in full in cash of the Obligations,
Borrower, for valuable consideration, the receipt of which is acknowledged,
hereby grants to Secured Parties a security interest in and Lien on all of the
Collateral now owned or at any time hereafter acquired by Borrower and wherever
located or in which Borrower now has or at any time in the future may acquire
any right, title or interest. 

          (b)     Borrower Remains
Liable. Anything herein to the contrary notwithstanding, (i) Borrower shall
remain liable under any contracts, agreements and other documents included in the Collateral, to the extent set
forth therein, to perform all of its duties and obligations thereunder to the
same extent as if this Agreement had not been executed, (ii) the exercise by any
Secured Party of any of the rights hereunder shall not release Borrower from any
of its duties or obligations under such contracts, agreements and other
documents included in the Collateral and (iii) no Secured Party shall have any
obligation or liability under any contracts, agreements and other documents
included in the Collateral by reason of this Agreement, nor shall any Secured
Party be obligated to perform any of the obligations or duties of Borrower
thereunder or to take any action to collect or enforce any such contract,
agreement or other document included in the Collateral hereunder.

1 

          (c)     Continuing Security
Interest. Borrower agrees that this Agreement shall create a continuing
security interest in the Collateral which shall remain in effect until
indefeasible payment and performance in full of all of the Obligations. 

     3.     Obligations
Secured. The security interest granted hereby secures payment of all
amounts owed pursuant to the Notes and all other obligations of Borrower to
Secured Parties under the Notes including, without limitation, all principal,
interest (including any interest that accrues after the commencement of a
proceeding by or against Borrower under the federal bankruptcy laws or any other
applicable federal, state or foreign bankruptcy, insolvency or other similar
law, regardless of whether allowed or allowable in whole or in part as a claim
in any such proceeding), obligations (including indemnification obligations),
fees, charges, costs, expenses, guaranties, covenants, and duties of any kind
and description owing by Borrower to Secured Parties pursuant to or evidenced by
the Notes and irrespective of whether for the payment of money, whether direct
or indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, and including all interest not paid when due and all expenses
that Borrower is required to pay or reimburse under the Notes, by law, or
otherwise (collectively, the “Obligations”). 

     4.     Borrower’s
Representations, Warranties And Covenants. Borrower hereby represents,
warrants and covenants to Secured Parties that: 

          (a)    Borrower’s principal place
  of business is the address set forth above and Borrower keeps its records
  concerning accounts, contract rights and other property at that location.
  Borrower is a corporation duly organized, validly existing and in good standing
  under the laws of the State of Nevada and has all requisite power and authority
  to execute, deliver and perform its obligations under this Agreement. 

          (b)     Except for the security
interest granted to Secured Parties pursuant to this Agreement and the Permitted
Liens, Borrower owns and has rights in, and, as to Collateral acquired by it
from time to time after the date hereof, will own and have rights in each item
of Collateral pledged by it hereunder, free and clear of any and all Liens or
claims of others. 

          (c)     The security interest in and
Lien on the Collateral granted to Secured Parties hereunder constitutes (a) a
legal and valid first priority security interest in all the Collateral securing the payment and performance of the
Obligations except for Permitted Liens and (b) a perfected security interest in
all the Collateral to the extent perfection may be achieved by the filings,
possession or Control required hereunder. The security interest and Lien granted
to Secured Parties pursuant to this Agreement in and on the Collateral will at
all times constitute a perfected (to the extent perfection may be achieved by
the filings, possession or Control required hereunder), continuing security
interest therein, prior to all other Liens on the Collateral except for
Permitted Liens.

2 

          (d)     Borrower shall, at its own
cost and expense, defend title to the Collateral pledged by it hereunder and the
security interest therein and Lien thereon granted to Secured Parties and the
priority thereof against all claims and demands of all persons, at any time
claiming any interest therein adverse to Secured Parties, other than Permitted
Liens. There is no agreement, order, judgment or decree, and Borrower shall not
enter into any agreement or take any other action, that would restrict the
transferability of any of the Collateral or otherwise impair or conflict with
Borrower’s obligations or the rights of Secured Parties hereunder. 

          (e)     Borrower will at all times
keep in a manner reasonably satisfactory to Secured Parties accurate and
complete records of the Collateral and will keep such Collateral insured to the
extent similarly situated companies insure their assets. Secured Parties shall
be entitled, at reasonable times during regular business hours and intervals
after reasonable notice to Borrower, to enter Borrower’s premises for purposes
of inspecting the Collateral and Borrower’s books and records relating thereto.

          (f)     Borrower will not create or
permit to be created or suffer to exist any Lien, except Permitted Liens, or
permitted Indebtedness as set forth on Schedule 4(f) of any kind on any of the
Collateral. 

          (g)     Borrower shall not use the
Collateral in violation of any applicable statute, ordinance, law or regulation
or in violation of any insurance policy maintained by Borrower with respect to
the Collateral. 

          (h)     Location of Inventory and
Equipment. Borrower shall not move any Equipment or Inventory to any
location unless it shall have given Secured Parties not less than thirty (30)
days’ prior written notice of its intention so to do, clearly describing such
new location and providing such other information in connection therewith as
Secured Parties may request in the exercise of their good faith credit judgment.

          (i)     Other Financing
Statements. Other than financing statements, security agreements, chattel
mortgages, assignments, copyright security agreements or collateral assignments,
patent or trademark security agreements or collateral assignments, fixture
filings and other agreements or instruments executed, delivered, filed or
recorded for the purpose of granting or perfecting any Lien (collectively,
“Financing Statements”) existing as of the date hereof and disclosed to
Secured Parties or arising after the date hereof in connection with any
Permitted Lien and Financing Statements in favor of Secured Parties, no
effective Financing Statement naming Borrower as debtor, assignor, grantor, mortgagor, pledgor or the like and covering
all or any part of the Collateral is on file in any filing or recording office
in any jurisdiction.

3 

          (j)     Notices, Reports and
Information. Borrower will (i) notify Secured Parties of any material claim
made or asserted against the Collateral by any person or entity and of any
change in the composition of the Collateral or other event which could
materially adversely affect the value of the Collateral or any Secured Party’s
Lien thereon; (ii) furnish to Secured Parties such statements and schedules
further identifying and describing the Collateral and such other reports and
other information in connection with the Collateral as Secured Parties may
reasonably request, all in reasonable detail; and (iii) upon the reasonable
request of Secured Parties make such demands and requests for information and
reports as Borrower is entitled to make in respect of the Collateral. 

          (k)     Insurance. In the
event that the proceeds of any insurance claim with respect to any Collateral
are paid to Borrower, such proceeds shall be held in trust for the benefit of
Secured Parties and shall be paid to Secured Parties upon the occurrence of an
Event of Default under Section 7. 

          (l)     Chief Executive Office;
Change of Name; Jurisdiction of Organization. Borrower shall not
effect any change (i) to its legal name, (ii) in the location of its chief
executive office, (iii) in its identity or organizational structure, (iv) in its
organizational identification number, if any, or (v) in its jurisdiction of
organization (in each case, including by merging with or into any other entity,
reorganizing, dissolving, liquidating, reorganizing or organizing in any other
jurisdiction), unless (A) it shall have given Secured Parties not less than
thirty (30) days’ prior written notice of its intention to do so and clearly
describing such change and providing such other information in connection
therewith as Secured Parties may reasonably request and (B) it shall have taken
all action reasonably necessary to maintain the perfection and priority of the
security interest of Secured Parties in the Collateral. Borrower agrees to
promptly provide Secured Parties with certified organization documents
reflecting any of the changes described in clauses (i), (iii), (iv) or (v) in
the preceding sentence. Borrower also agrees to promptly notify Secured Parties
of any change in the location of any office in which it maintains books or
records relating to Collateral owned by it or any office or facility at which
Collateral is located (including the establishment of any such new office or
facility). 

          (m)     Disposition of
Collateral. Borrower will not (i) surrender or lose possession of (other
than to Secured Parties), sell, assign (by operation of law or otherwise),
lease, rent, or otherwise dispose of or transfer any of the Collateral or any
right or interest therein, except (A) in the ordinary course of its business,
(B) to another wholly-owned subsidiary of Borrower or (C) as otherwise as
permitted in this Agreement, or (ii) to the extent in physical form, remove any
of the Collateral from its present location (other than disposals of Collateral
permitted by subsection (i)) except upon at least thirty (30) days’ prior
written notice to Secured Parties. 

          (n)     Separate Obligations and
Liens. Borrower acknowledges and agrees that (i) the Obligations represent
separate and distinct indebtedness, obligations and liabilities of Borrower to each of Secured Parties, which
Borrower is separately obligated to each Secured Party to pay and perform, in
each case regardless of whether or not any indebtedness, obligation or liability
to any other Secured Party or any other person or entity, or any agreement,
instrument or guaranty that evidences any such other indebtedness, liability or
obligation, or any provision thereof, shall for any reason be or become void,
voidable, unenforceable or discharged, whether by payment, performance,
avoidance or otherwise; (ii) the Lien that secures each of Secured Parties’
respective Obligations (A) is separate and distinct from any and all other Liens
on the Collateral, (B) is enforceable (subject to applicable bankruptcy and
similar laws) without regard to whether or not any other Lien shall be or become
void, voidable or unenforceable or the indebtedness, obligations or liabilities
secured by any such other Lien shall be discharged, whether by payment,
performance, avoidance or otherwise, and (C) shall not merge with or be impaired
by any other Lien (subject to applicable bankruptcy and similar laws).

4 

     5.     Financing Statements.
Borrower shall at its cost execute any Financing Statement (including without
limitation the filing of notices with the United States Copyright Office and the
United States Patent and Trademark Office), in respect of any security interest
created pursuant to this Agreement which may at any time be required or which,
in the opinion of Secured Parties, may at any time be desirable. If any
recording or filing thereof (or the filing of any statements of continuation or
assignment of any financing statement) is required to protect and preserve such
lien or security interest, Borrower shall at its cost execute the same at the
time and in the manner requested by Secured Parties. To the fullest extent
permitted by applicable law, Borrower authorizes each Secured Party, and any
agent acting on behalf of any Secured Party, to file any such Financing
Statements without the signature of Borrower. 

     6.     Borrower’s Rights Until
Default. So long as an Event of Default, as defined in Section 7
below, has not occurred, Borrower shall have the right to possess the
Collateral, manage its property and sell, lease, rent, or license its inventory
and/or intellectual property in the ordinary course of business. 

     7.     Event of Default. As
used in this Agreement “Event of Default” shall have the meaning set
forth in the Notes. 

     8.     Rights and Remedies on Event of Default. 

          (a)     Upon the occurrence of an
Event of Default, Secured Parties, upon the election of the Note Holders, shall
have the right, themselves or through any of their agents, with or without
notice to Borrower (as provided below), as to any or all of the Collateral, by
any available judicial procedure, or without judicial process (provided,
however, that it is in compliance with the UCC), to exercise any and all rights
afforded to a secured party under the UCC or other applicable law. Without
limiting the generality of the foregoing, Secured Parties, upon the election of
the Required Note Holders, shall have the right upon the occurrence of an Event
of Default to sell or otherwise dispose of all or any part of the Collateral,
either at public or private sale, in lots or in bulk, for cash or for credit,
with or without warranties or representations, and upon such terms and conditions, all as the Required Note Holders, in their sole
discretion, may deem advisable, and Secured Parties shall have the right to
purchase at any such sale. Borrower agrees that a notice sent in accordance with
Section 11 at least ten (10) days before the time of any intended public
sale or of the time after which any private sale or other disposition of the
Collateral in accordance with this Section 8 is to be made shall be
reasonable notice of such sale or other disposition. The proceeds of any such
sale, or other Collateral disposition shall be applied, first to the expenses of
retaking, holding, storing, processing and preparing for sale, selling, and the
like, and to Secured Parties’ reasonable attorneys’ fees and legal expenses, and
then to the Obligations and to the payment of any other amounts required by
applicable law, after which Secured Parties shall account to Borrower for any
surplus proceeds. If, upon the sale or other disposition of the Collateral, the
proceeds thereof are insufficient to pay all amounts to which Secured Parties
are legally entitled, Borrower shall be liable for the deficiency, together with
interest thereon at the rate of 10% per annum, and the reasonable fees of any
attorneys Secured Parties employ to collect such deficiency; provided,
however, that the foregoing shall not be deemed to require Secured
Parties to resort to or initiate proceedings against the Collateral prior to the
collection of any such deficiency from Borrower. To the extent permitted by
applicable law, Borrower waives all claims, damages and demands against Secured
Parties arising out of the retention or sale or lease of the Collateral or other
exercise of Secured Parties’ rights and remedies with respect thereto in
accordance with applicable law.

5 

          (b)     To the extent permitted by
applicable law, any sale upon the occurrence of an Event of Default, whether
under any power of sale hereby given or by virtue of judicial proceedings, shall
operate to divest all Borrower’s right, title, interest, claim and demand
whatsoever, either at law or in equity, in and to the Collateral sold, and shall
be a perpetual bar, both at law and in equity, against Borrower, its successors
and assigns, and against all persons and entities claiming the Collateral sold
or any part thereof under, by or through Borrower, its successors or assigns.

          (c)     Borrower appoints each
Secured Party, and any officer, employee or agent of such Secured Party, with
full power of substitution, as Borrower’s true and lawful attorney-in-fact,
effective as of the date hereof, with power, upon the Required Note Holders’
election, in its own name or in the name of Borrower, upon the occurence of an
Event of Default: (i) to receive, collect and endorse any notes, checks, drafts,
money orders, or other instruments of payment in respect of the Collateral that
may come into Secured Parties’ possession, (ii) to sign and endorse any drafts
against Borrower, assignments, verifications and notices in connection with
accounts, and other documents relating to Collateral; (iii) to pay or discharge
taxes or Liens at any time levied or placed on or threatened against the
Collateral; (iv) to demand, collect, issue receipt for, compromise, settle, sue
for and recover monies due in respect of the Collateral; (v) to notify persons
and entities obligated with respect to the Collateral to make payments directly
to Secured Parties; (vi) to receive and open all mail addressed to Borrower and
to notify postal authorities to change the address for the delivery of mail to
Borrower to that of a Secured Party designated by the Required Note Holders;
(vii) to file any claims or take any action or institute any proceedings which
Secured Parties may deem necessary or desirable for the collection of any of the
Collateral of Borrower or otherwise to enforce the rights of Secured Parties with respect to any of the
Collateral; and (viii) generally, to do, at Secured Parties’ option and at
Borrower’s expense, at any time, or from time to time, all acts and things and
to execute any instrument which Secured Parties deems necessary or advisable to
protect, preserve and realize upon the Collateral and Secured Parties’ security
interest therein to effect the intent of this Agreement, all as fully and
effectually as Borrower might or could do; and Borrower hereby ratifies all that
said attorney shall lawfully do or cause to be done by virtue hereof. This power
of attorney shall be irrevocable as long as any of the Obligations are
outstanding.

6 

          (d)     All of Secured Parties’
rights and remedies with respect to the Collateral, whether established hereby
or by any other agreements, instruments or documents or by law shall be
cumulative and may be exercised singly or concurrently. 

     9.     Secured Parties’ Rights; Borrower Waivers. 

          (a)     Secured Parties’ acceptance
of partial or delinquent payment from Borrower under any Note or hereunder, or
Secured Parties’ failure to exercise any right hereunder, shall not constitute a
waiver of any obligation of Borrower hereunder, or any right of Secured Parties
hereunder, and shall not affect in any way the right to require full performance
at any time thereafter. 

          (b)     Borrower waives, to the
fullest extent permitted by law, (i) any right of redemption with respect to the
Collateral, whether before or after sale hereunder, and all rights, if any, of
marshaling of the Collateral or other collateral or security for the
Obligations; (ii) any right to require any Secured Party (A) to proceed against
any person or entity, (B) to exhaust any other collateral or security for any of
the Obligations, (C) to pursue any remedy in Secured Party’s power, or (D) to
make or give any presentments, demands for performance, notices of
nonperformance, protests, notices of protests or notices of dishonor in
connection with any of the Collateral; and (iii) all claims, damages, and
demands against any Secured Party arising out of the repossession, retention,
sale or application of the proceeds of any sale of the Collateral. 

     10.     Collateral Agent. At
any time or times, in order to comply with any legal requirement in any
jurisdiction or in order to effectuate any provision of this Agreement as
determined in the discretion of the Required Note Holders, the Required Note
Holders may, without the consent of or notice to Borrower, appoint any Secured
Party, or any bank or trust company or any other person or entity to act as
collateral agent (the “Collateral Agent”), either jointly with any
Secured Party or separately, on behalf of Secured Parties with such power and
authority as may be necessary for the effectual operation of the provisions
hereof and specified in the instrument of appointment. Borrower acknowledges
that: (i) the rights and responsibilities of the Collateral Agent under this
Agreement or arising out of this Agreement shall, as between the Collateral
Agent and Secured Parties, be governed by the matters as among Secured Parties
and the Collateral Agent to which Borrower shall not be a third party or other
beneficiary; and (ii) as between the Collateral Agent and Borrower, the
Collateral Agent shall be conclusively presumed to be acting as agent for itself
and Secured Parties with full and valid authority so to act or refrain from
acting. 

7 

     11.     Miscellaneous. 

          (a)     Expenses. Borrower
agrees to promptly pay all fees, costs and expenses incurred in connection with
any matters contemplated by or arising out of this Agreement, the Notes or any
other document related thereto, and all such fees, costs and expenses shall be
part of the Obligations, payable on demand, including, but not limited to: (a)
fees, costs and expenses incurred by Secured Parties (including reasonable
attorneys’ fees) in connection with the examination, negotiation, review, and
documentation of this Agreement, the Notes and any other document related
thereto, and any amendments, waivers, consents, forbearances and other
modifications relating hereto, including in connection with any workout or
restructuring involving Borrower or thereto; and (b) fees, costs, expenses
(including attorneys’ fees) of Secured Parties and costs of settlement incurred
in any action to enforce this Agreement, or any other document related thereto
or to collect any payments due from Borrower under this Agreement, or any other
document related thereto. 

          (b)     Indemnity. In addition
to the payment of expenses pursuant to Section 11(a), Borrower agrees to
indemnify, pay and hold each Secured Party, and the officers, directors,
employees, agents, consultants, partners, auditors, accountants, affiliates and
attorneys of each Secured Party (collectively called the “Indemnitees”)
harmless from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, expenses and disbursements
of any kind or nature whatsoever (including the reasonable and documented fees
and disbursements of counsel for such Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened,
whether or not such Indemnitee shall be designated a party thereto) that may be
imposed on, incurred by, or asserted against that Indemnitee, in any manner
relating to or arising out of this Agreement, or any other document related
thereto, the consummation of the transactions contemplated by this Agreement,
the use or intended use of the proceeds of any of the Notes, the existence or
perfection of any Liens, or realization upon any Collateral, or the exercise of
any right or remedy under this Agreement, or any other document related thereto
(the “Indemnified Liabilities”); provided, that (i) Borrower shall
have no obligation to an Indemnitee hereunder with respect to Indemnified
Liabilities arising from the gross negligence or willful misconduct of that
Indemnitee as determined by a final non-appealable judgment by a court of
competent jurisdiction; and (ii) the Indemnitee shall give Borrower prompt
written notice of any claims, actions or suits asserted against the Indemnitee
relating to the Indemnified Liabilities, provided, however, that
failure to provide such notice shall not impair the rights and remedies of the
parties hereunder unless Borrower is materially prejudiced by such failure to
provide prompt written notice. 

          (c)     Amendment and Waiver.
Neither this Agreement nor any part hereof may be changed, waived, or amended
except by an instrument in writing signed by the Required Note Holders and by
Borrower; and waiver on one occasion shall not operate as a waiver on any other
occasion. 

          (d)     Notices. Unless
otherwise provided, any notice required or permitted under this Agreement shall
be given pursuant to the terms of the Notes. 

8 

          (e)     Successors and
Assigns. This Agreement shall be binding upon and inure to the benefit of,
the successors and assigns of the parties hereto, including, without limitation,
all future holders of the Notes. 

          (f)     Governing Law. This
Agreement and any controversy arising out of or relating to this Agreement shall
be governed by, and construed in accordance with, the Uniform Commercial Code of
the State of Nevada as to matters within the scope thereof, and as to all other
matters (including contract law, tort law and matters of fraud) shall be
governed by, and construed in accordance with, the internal laws of the State of
Florida, without regard to conflict of law principles that would result in the
application of any law other than the law of the State of Nevada. 

          (g)     Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument. Execution and delivery of this Agreement by facsimile or electronic
exchange bearing the copies of a party’s signature shall constitute a valid and
binding execution and delivery of this Agreement by such party. Such facsimile
or electronic copies shall constitute enforceable original documents. 

          (h)     Titles and Subtitles.
The titles and subtitles used in this Agreement are used for convenience only
and are not to be considered in construing or interpreting this Agreement. 

          (i)     Severability. If one
or more provisions of this Agreement are held to be unenforceable under
applicable law, such provision shall be excluded from this Agreement and the
balance of the Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms. 

          (j)     Venue. Borrower and
Secured Parties agree that all actions or proceedings arising in connection with
this Agreement shall be tried and litigated only in the courts of the State of
New York located in the City of New York, and the United States District Court
for the Southern District of New York or, at the Required Note Holders’ option,
any court in which the Required Note Holders determine it is necessary or
appropriate to initiate legal or equitable proceedings in order to exercise,
preserve, protect or defend any of Secured Parties’ rights and remedies
hereunder or otherwise or to exercise, preserve, protect or defend Secured
Parties’ Lien, and the priority thereof, against the Collateral, and which has
subject matter jurisdiction over the matter in controversy. Borrower waives any
right it may have to assert the doctrine of forum non conveniens or to object to
such venue, and consents to any court ordered relief. Borrower waives personal
service of process and agrees that a summons and complaint commencing an action
or proceeding in any such court shall be promptly served and shall confer
personal jurisdiction if served by registered or certified mail to Borrower. If
Borrower fails to appear or answer any summons, complaint, process or papers so
served within thirty (30) days after the mailing or other service thereof, it
shall be deemed in default and an order of judgment may be entered against it as
demanded or prayed for in such summons, complaint, process or papers. The choice
of forum set forth herein shall not be deemed to preclude the enforcement of any judgment
obtained in such forum, or the taking of any action hereunder to enforce the
same, in any appropriate jurisdiction.

9 

          (k)     Waiver of Jury Trial.
TO THE EXTENT EACH MAY LEGALLY DO SO, EACH PARTY HERETO HEREBY EXPRESSLY WAIVES
ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR
PROCEEDING ARISING UNDER OR WITH RESPECT TO THIS AGREEMENT, OR IN ANY WAY
CONNECTED WITH, OR RELATED TO, OR INCIDENTAL TO, THE DEALING OF THE PARTIES
HERETO WITH RESPECT TO THIS AGREEMENT, OR THE TRANSACTIONS RELATED THERETO, IN
EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND IRRESPECTIVE OF WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE. TO THE EXTENT EACH MAY LEGALLY DO SO,
EACH PARTY HERETO HEREBY AGREES THAT ANY SUCH CLAIM, DEMAND, ACTION, OR
PROCEEDING SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT EITHER
PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF ANY OTHER PARTY HERETO TO THE
WAIVER OF ITS RIGHT TO TRIAL BY JURY. 

          (l)     Termination of Security Interest. 

               (i)     The security interest granted
herein shall terminate immediately and automatically upon the payment in full of
the Obligations. 

               (ii)     Upon termination of the
security interest, Secured Parties shall promptly execute and deliver to
Borrower such documents and instruments reasonably requested by Borrower, and
shall take all actions necessary or appropriate to effect the release of such
security interest. 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK] 

10 

     IN WITNESS WHEREOF, this
Agreement has been executed by the parties hereto as of the date first above
written. 

	BORROWER 
	 	  
	NAKED BRAND GROUP, INC. 
	 	  
	 	  
	 	  
	By: 	 
	 	Name: 
	 	Title: 

11 

Secured Party Signature Page 

	Signatures 	 	Purchaser Name (Print) 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

Dated:                                                                       
, 2014 

(Each co-owner or joint owner must sign) 

12 

SCHEDULE A 

SECURED PARTIES

13 

EXHIBIT A 

DESCRIPTION OF COLLATERAL 

A.     Collateral. All personal property of Borrower
(“Borrower” or “Debtor”) whether presently existing or hereafter
created, written, produced or acquired, including, but not limited to: 

     (i)     all
  accounts receivable, Accounts, Chattel Paper (including, without limitation,
  tangible Chattel Paper and electronic Chattel Paper), contract rights
  (including, without limitation, royalty agreements, license agreements and
  distribution agreements), documents, instruments, money, deposit accounts and
  general intangibles, including, without limitation, payment intangibles,
  returns, repossessions, books and records (including, without limitation, all
  records indicating, summarizing or evidencing its assets or liabilities, or its
  business operations or financial condition), and equipment containing said books
  and records, all financial assets, all investment property, including securities
  and securities entitlements; 

     (ii)     all software, computer source codes and other
  computer programs and supporting information (collectively, the
  “Software Products”), and all common law and statutory
  copyrights and copyright registrations, applications for registration, now
  existing or hereafter arising, United States of America and foreign, obtained or
  to be obtained on or in connection with the Software Products, or any parts
  thereof or any underlying or component elements of the Software Products
  together with the right to copyright and all rights to renew or extend such
  copyrights and the right (but not the obligation) of any Secured Party to sue in
  its own name and/or the name of the Debtor for past, present and future
  infringements of copyright; 

     (iii)     all goods, including, without limitation,
  equipment, fixtures and inventory (including, without limitation, all export
  inventory) and all computer programs embedded in goods and any supporting
  information; 

     (iv)     all guarantees and other security therefor; 

     (v)     all
  trademarks, service marks, trade names and service names and the goodwill
  associated therewith; 

     (vi)     (a)     all patents and patent applications filed in the
  United States Patent and Trademark Office or any similar office of any foreign
  jurisdiction, and interests under patent license agreements, including, without
  limitation, the inventions and improvements described and claimed therein, (b)
 licenses pertaining to any patent whether Debtor is licensor or licensee, (c)
  all income, royalties, damages, payments, accounts and accounts receivable now
  or hereafter due and/or payable under and with respect thereto, including,
  without limitation, damages and payments for past, present or future
  infringements thereof, (d) the right (but not the obligation) to sue for past,
  present and future infringements thereof, (e) all rights corresponding thereto
  throughout the world in all jurisdictions in which such patents have been issued
  or applied for, and (f) the reissues, divisions, continuations, renewals,
extensions and continuations-in-part with any of the foregoing (all of the
foregoing patents and applications and interests under patent license
agreements, together with the items described in clauses (a) through (f) in this
paragraph are sometimes herein individually and collectively (“Patents”);

14 

     (vii)     all letter-of-credit rights, letters of credit, instruments, promissory
notes, drafts and Documents; 

     (viii)     all rights in respect of Obligations; 

     (ix)      all interest with respect to any Commercial Tort Claims; 

     (x)      all money, cash
  equivalents or other assets that now or hereafter come into the possession,
  custody or control of any Secured Party; and 

     (xi)      all products and proceeds,
  including, without limitation, insurance proceeds, of any of the foregoing. 

15 

SCHEDULE 4(f) 

PERMITTED LIENS 

A.     Those certain secured convertible promissory notes (as such
notes may be amended, amended and restated, supplemented or otherwise modified
from time to time) issued by the Borrower to certain lenders for whom Kalamalka
Partners Ltd. (“Kalamalka”) is acting as agent pursuant to (i) that
certain Agency and Interlender Agreement dated August 10, 2012 (as may be
amended, amended and restated, supplemented or otherwise modified from time to
time), and (ii) that certain Agency and Interlender Agreement dated November 14,
2013 (as may be amended, amended and restated, supplemented or otherwise
modified from time to time), in each case of (i) and (ii), between Kalamalka and
the lenders set forth therein. 

B.     Discounted bills of exchange, discounting or factoring of
receivables or other similar arrangements, in each case incurred in the ordinary
course of business. 

16

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