Document:

Naked Brand Group Inc.: Exhibit 10.7 - Filed by newsfilecorp.com

THESE WARRANTS ARE NON-TRANSFERABLE. 

THESE SECURITIES HAVE BEEN ISSUED IN AN OFFSHORE TRANSACTION
TO PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED HEREIN) PURSUANT TO REGULATION S
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933
ACT”).

NONE OF THESE SECURITIES HAVE BEEN REGISTERED UNDER THE 1933
ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE
OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO U.S. PERSONS
(AS DEFINED HEREIN) EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S
UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING
TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE
WITH THE 1933 ACT. 

THE HOLDER OF THESE SECURITIES MUST NOT TRADE THE SECURITIES
IN OR FROM A JURISDICTION OF CANADA UNLESS THE CONDITIONS IN SECTION 13 OF
MULTILATERAL INSTRUMENT 51-105 ISSUERS QUOTED IN THE U.S. OVER THE COUNTER
MARKETS ARE MET. 

WARRANT CERTIFICATE 

NAKED BRAND GROUP INC. 

THESE WARRANTS WILL EXPIRE AND BECOME NULL AND VOID AT THE TIME
OF EXPIRY (AS DEFINED HEREIN). 

	Warrant Certificate No.: 11-14-13-____ 	Right to Purchase ____________Common
      Shares 
	Number of Warrants: __________________	 

This is to certify that, for value received,
_________________ of ______________________ - (facsimile:
_____________), is the registered holder of SEVENTY-FIVE THOUSAND
(75,000) share purchase warrants (each, a “Warrant”) of NAKED
BRAND GROUP INC. (the “Company”). Each Warrant will entitle the
Holder, upon and subject to the terms and conditions attached to this
certificate or any replacement certificate (in either case the “Warrant
Certificate”) as Appendix “A” (the “Terms and Conditions”), to
acquire from the Company one fully paid and non-assessable share of common stock
of the Company (each, a “Warrant Share”) at a price of $0.10 per Share
(the “Exercise Price”) at any time prior to 4:00 p.m. (Vancouver time) on
November 14, 2016 (the “Time of Expiry”). 

	 	1. 	
      ONE (1) WARRANT AND THE EXERCISE PRICE ARE REQUIRED TO
      PURCHASE ONE WARRANT SHARE. THIS CERTIFICATE REPRESENTS
      _________________ (___________) WARRANTS.

	 	 	 
	 	2. 	
      These Warrants are issued subject to the Terms and
      Conditions, and the Holder may exercise the right to purchase Warrant
      Shares only in accordance with the Terms and Conditions.

	 	 	 
	 	3. 	
      Nothing contained herein or in the Terms and Conditions
      will confer any right upon the Holder or any other person to subscribe for
      or purchase any Warrant Shares at any time subsequent to the Time of
      Expiry and from and after such time, these Warrants and all rights under
      this Warrant Certificate will be void and of no
value.

- 2 - 

IN WITNESS WHEREOF the Company has caused this Warrant
Certificate to be executed. 

DATED at the City of Vancouver, in the Province of British
Columbia, the 14th day of November, 2013. 

NAKED BRAND GROUP INC. 

 

Per:     _________________________________________________
           
Authorized Signatory 

APPENDIX “A” 

TERMS AND CONDITIONS 

TERMS AND CONDITIONS dated November 14, 2013 (the “Terms and
Conditions”), attached to the Warrant Certificate issued by Naked Brand
Group Inc. 

1.         
 INTERPRETATION 

1.1       
 Definitions 

In these Terms and Conditions, unless there is something in the
subject matter or context inconsistent therewith: 

	 	(a) 	
      “Auditors” means an independent firm of
      accountants duly appointed as auditors of the Company;

	 	 	 
	 	(b) 	
      “Business Day” means any day of the year other
      than Saturday, Sunday or any day on which banks are required or authorized
      to close in Vancouver, British Columbia;

	 	 	 
	 	(c) 	
      “Company” means Naked Brand Group Inc. until a
      successor corporation will have become such as a result of consolidation,
      amalgamation or merger of the Company with or into any other corporation
      or corporations, or as a result of the conveyance or transfer of all or
      substantially all of the properties and estates of the Company as an
      entirety to any other corporation, and, thereafter, “Company” will mean
      such successor corporation;

	 	 	 
	 	(d) 	
      “Exercise Price” means $0.10 per Warrant Share,
      subject to adjustment as provided in Section 4.6;

	 	 	 
	 	(e) 	
      “Exercise Date” has the meaning given to such term
      in Section 4.2(a);

	 	 	 
	 	(f) 	
      “Expiry Date” means November 14, 2016;

	 	 	 
	 	(g) 	
      “Fair Market Value” means the average of the
      closing or last reported sale prices of the Shares on the OTCQB (or such
      other exchange or quotation system on which the Shares are primarily
      quoted or traded at such time) over the 30 day period immediately prior to
      the date of the delivery of a Subscription Form to the Company by the
      Holder, or, if closing prices are not then routinely reported, the average
      of the last bid and asked prices of the Shares over the 30 day period
      ending five Business Days prior to such date; provided that, if there is
      no public market for the Shares, then the Fair Market Value shall be
      determined in good faith by the Company’s board of directors;

	 	 	 
	 	(h) 	
      “herein”, “hereby” and similar expressions
      refer to these Terms and Conditions as the same may be amended or modified
      from time to time;

	 	 	 
	 	(i) 	
      “Holder” means the holder of the
  Warrants;

	 	 	 
	 	(j) 	
      “Issuance Date” means the date hereof;

	 	 	 
	 	(k) 	
      “person” means a natural person, corporation,
      limited liability corporation, unlimited liability corporation, joint
      stock corporation, partnership, limited partnership, limited liability
      partnership, trust, trustee, any unincorporated organization, joint
      venture or any other entity;

	 	 	 
	 	(l) 	
      “Reorganization” has the meaning given to such
      term in Section 4.6(a)(ii);

	 	 	 
	 	(m) 	
      “Record Date Notice” has the meaning given to such
      term in Section 4.7(a);

A2 

	 	(n) 	
      “Section” followed by a number refers to the
      specified Section of these Terms and Conditions;

	 	 	 
	 	(o) 	
      “Shares” means shares of common stock of the
      Company as constituted at the date hereof and any Shares resulting from
      any subdivision or consolidation of the Shares;

	 	 	 
	 	(p) 	
      “Subscription Form” has the meaning given to such
      term in Section 4.1(a);

	 	 	 
	 	(q) 	
      “Time of Expiry” means 4:00 pm (Vancouver Time) on
      the Expiry Date;

	 	 	 
	 	(r) 	
      “Warrant Certificate” means the Warrant
      Certificate attached to these Terms and Conditions;

	 	 	 
	 	(s) 	
      “Warrants” means the common share purchase
      warrants of the Company represented by the Warrant Certificate;
  and

	 	 	 
	 	(t) 	
      “Warrant Shares” means the Shares issuable upon
      exercise of the Warrants.

1.2        
Gender 

Words importing the singular number include the plural and vice
versa and words importing the masculine gender include the feminine and neuter
genders. 

1.3         Interpretation
not affected by Headings 

The division of these Terms and Conditions into sections and
the insertion of headings are for convenience of reference only and shall not
affect the construction or interpretation thereof.

1.4        
Applicable Law 

The Warrants will be exclusively construed in accordance with
the laws of the Province of British Columbia. The Warrant Certificate and these
Terms and Conditions are governed by the laws of the Province of British
Columbia and the federal laws of Canada applicable therein. The Holder
irrevocably attorns to the exclusive jurisdiction of the courts of the Province
of British Columbia. 

1.5         Currency

Unless otherwise provided, all dollar amounts referred to in
the Warrant Certificate and these Terms and Conditions are in lawful money of
the United States of America. 

2.          
ISSUE OF WARRANTS 

2.1        
Additional Warrants 

The Company may at any time and from time to time issue
additional warrants or grant options or similar rights to purchase Shares. 

2.2         Warrants
to Rank Pari Passu

All Warrants and additional warrants, options or similar rights
to purchase Shares from time to time issued or granted by the Company will rank
pari passu, whatever may be the actual dates of issue or grant thereof,
or of the dates of the certificates by which they are evidenced. 

2.3        
Replacement of Lost or Damaged Warrant Certificate 

	 	(a) 	
      In case the Warrant Certificate becomes mutilated, lost,
      destroyed or stolen, the Company, at its discretion, may issue and deliver
      a new Warrant Certificate of like date and tenor as the
  one mutilated, lost, destroyed or stolen, in exchange for, in
      place of, and upon cancellation of, such mutilated Warrant Certificate, or
      in lieu of, and in substitution for, such lost, destroyed or stolen
      Warrant Certificate, and the replacement Warrant Certificate will be
      entitled to the benefit hereof and rank equally in accordance with its
      terms with all other warrants issued or to be issued by the
  Company.

A3 

	 	(b) 	
      The applicant for the issue of a new Warrant Certificate
      pursuant hereto will bear the cost of the issue thereof and, in case of
      loss, destruction or theft, will furnish to the Company such evidence of
      ownership and of loss, destruction or theft of the Warrant Certificate so
      lost, destroyed or stolen as will be satisfactory to the Company in its
      discretion. Such applicant may also be required to furnish indemnity in
      amount and form satisfactory to the Company in its discretion, and will
      pay the reasonable charges of the Company in connection
  therewith.

2.4         Holder
Not a Shareholder 

The holding of the Warrant Certificate shall not constitute the
Holder thereof as a shareholder of the Company, nor entitle him to any right or
interest in respect thereof except as expressly provided in the Warrant
Certificate. 

2.5         Company
Covenants 

The Company covenants to the Holder that so long as the
Warrants remain outstanding: 

	 	(a) 	
      it will allot, reserve and keep available a sufficient
      number of Shares for the purpose of enabling it to satisfy its obligations
      to issue the Warrant Shares upon the exercise of the Warrants;

	 	 	 
	 	(b) 	
      all Warrant Shares which shall be issued upon exercise of
      the right to acquire provided for herein shall be fully paid and
      non-assessable; and

	 	 	 
	 	(c) 	
      it will maintain its corporate existence and keep or
      cause to be kept proper books of account in accordance with applicable
      laws.

3.         
 NOTICE 

3.1         Notice
to Holders 

Any notice required or permitted to be given to the Holder will
be in writing and may be given by prepaid registered post, electronic facsimile
transmission or other means of electronic communication capable of producing a
printed copy to the address of the Holder appearing on the Warrant Certificate
or to such other address as the Holder may specify by notice in writing to the
Company to the address set forth in Section 3.2, and any such notice will be
deemed to have been given and received by the Holder: (i) if mailed, on the
third Business Day following the mailing thereof; (ii) if by facsimile or other
electronic communication, on successful transmission; or (iii) if delivered, on
delivery, but if at the time of mailing, or between the time of mailing and the
third Business Day thereafter, there is a strike, lockout or other labour
disturbance affecting postal service, then the notice will not be effectively
given until actually delivered. 

3.2         Notice
to the Company 

Any notice required or permitted to be given to the Company
will be in writing and may be given by prepaid registered post, electronic
facsimile transmission or other means of electronic communication capable of
producing a printed copy to the address of the Company set forth below or such
other address as the Company may specify by notice in writing to the Holder to
the address of the Holder appearing on the Warrant Certificate, and any such
notice will be deemed to have been given and received by the Company: (i) if
mailed, on the third Business Day following the mailing thereof; (ii) if by
facsimile or other electronic communication, on successful transmission; or
(iii) if delivered, on delivery, but if at the time of mailing, or between the
time of mailing and the third Business Day thereafter, there is a strike, lockout or other labour
disturbance affecting postal service, then the notice will not be effectively
given until actually delivered. 

A4 

Notices to the Company shall be
delivered to: 

Naked Brand Group Inc. 
2 – 34346
Manufacturers Way 
Abbotsford, BC V2S 7M1

Attn:         President

Fax:            (877)
366-4767 
Email:        joel@thenakedshop.com

with a copy (which shall not
constitute notice) to: 

Clark Wilson LLP 
Barristers and
Solicitors 
900 – 885 West Georgia Street 
Vancouver, BC V6C 3H1

Attn:         Virgil Hlus

Fax:           
604.687.6314 

Email:        vzh@cwilson.com 

4.         
 EXERCISE OF WARRANTS 

4.1         Method
of Exercise of Warrants 

The Holder may exercise its right to purchase the Warrant
Shares at the Exercise Price at any time until the Time of Expiry by: 

	 	(a) 	
      providing the Company a completed and executed
      subscription form, in the form attached as Appendix B hereto (the
      “Subscription Form”), for the number of Warrant Shares which the
      Holder wishes to purchase, in the manner therein indicated;

	 	 	 	 
	 	(b) 	
      surrendering the Warrant Certificate, together with the
      executed Subscription Form, to the address set forth in Section 3.2;
      and

	 	 	 	 
	 	(c) 	
      in accordance with the Holder’s instructions in the
      Subscription Form, either:

	 	 	 	 
	 		(i) 	
      paying the appropriate Exercise Price, in United States
      funds, for the number of Warrant Shares subscribed for, either by bank
      draft, certified cheque or money order, payable to the Company in
      Vancouver, British Columbia at the address set forth in Section 3.2, or
      wiring the Exercise Price to the Company or its lawyers pursuant to wiring
      instructions that will be provided to the Holder upon request;
or

	 	 	 	 
	 		(ii) 	
      electing to receive, without the payment by the Holder of
      any additional consideration, such number of Warrant Shares as is computed
      using the following formula:

X = Y (A – B) 
A 

	 	where: 	X = 	
      the number of Warrant Shares to be issued to the Holder;
      

	 	  	  	     
			Y = 	
      the number of Warrant Shares covered by the applicable
      Subscription Form; 

A5 

	 	A = 	the Fair Market Value of one
      Share; and 
	 	 	 
	 	B = 	the Exercise Price per Warrant
      Share. 

	4.2 	
      Effect of Exercise of Warrants

	 	 	 
		(a) 	
      On the date the Company receives a duly executed
      Subscription Form and the Exercise Price for the number of Warrant Shares
      specified in the Subscription Form (the “Exercise Date”), the
      Warrant Shares so subscribed for will be deemed to have been issued and
      the persons to whom such Warrant Shares have been deemed to be issued will
      be deemed to have become the holder (or holders) of record of such Warrant
      Shares on such date.

	 	 	 
		(b) 	
      As promptly as practicable after the Exercise Date and,
      in any event, within ten (10) Business Days of the Exercise Date, the
      Company shall forthwith cause to be delivered to the person or persons in
      whose name or names the Warrant Shares so subscribed for are to be
      registered as specified in such Subscription Form, and courier to him or
      them at his or their respective addresses specified in such Subscription
      Form, a certificate or certificates for the appropriate number of fully
      paid and non-assessable Warrant Shares, which will not exceed that number
      which the Holder is entitled to purchase pursuant to the Warrant
      Certificate surrendered.

4.3         Subscription
for Less Than Entitlement 

The Holder of any Warrant may subscribe for and purchase a
number of Warrant Shares less than the number which the Holder is entitled to
purchase pursuant to the surrendered Warrant Certificate. In the event of any
purchase of a number of Warrant Shares less than the number which can be
purchased pursuant to the Warrant Certificate, the Holder, upon exercise
thereof, shall be entitled to receive a new Warrant Certificate in respect of
the balance of the Warrant Shares which the Holder was entitled to purchase
pursuant to the surrendered Warrant Certificate and which were not then
purchased. 

4.4         Warrants
for Fractions of Warrant Shares 

To the extent that the Holder of any Warrant is entitled to
receive on the exercise or partial exercise thereof a fraction of a Warrant
Share, such right may be exercised in respect of such fraction only in
combination with another Warrant or other Warrants which, in the aggregate,
entitle the Holder to receive a whole number of such Warrant Shares. 

4.5         Expiration
of Warrants 

After the Time of Expiry, all rights under the Warrant
Certificate and these Terms and Conditions shall wholly cease and terminate and
the Warrants shall be void and of no further force and effect. 

4.6         Adjustment
of Exercise Price 

	 	(a) 	
      The Exercise Price and the number of Warrant Shares
      deliverable upon the exercise of the Warrants will be subject to
      adjustment in the event of and in the manner following:

	 	 	 	 
	 		(i) 	
      if and whenever the Shares at any time outstanding are
      subdivided into a greater, or consolidated into a lesser, number of
      Shares, the Exercise Price will be decreased or increased proportionately
      as the case may be. Upon any such subdivision, the number of Warrant
      Shares deliverable upon the exercise of the Warrants will be increased
      proportionately. Upon any such consolidation, the number of Warrant Shares
      deliverable remain unchanged; and

A6 

	 	(ii) 	
      in the case of any capital reorganization or of any
      reclassification of the capital of the Company, or in the case of the
      consolidation, merger or amalgamation of the Company with or into any
      other company (hereinafter collectively referred to as a
      “Reorganization”), each Warrant will, after such Reorganization,
      confer the right to purchase the number of Warrant Shares or other
      securities of the Company (or of the company resulting from such
      Reorganization) which the Holder would have been entitled to upon the
      Reorganization if the Holder had been a shareholder of the Company at the
      time of such Reorganization.

	 	(b) 	
      In the case of any Reorganization, if necessary,
      appropriate adjustments will be made in the application of the provisions
      of this Section 4.6 relating to the rights and interest thereafter of the
      Holder so that the provisions of this Section 4.6 will be made applicable
      as nearly as reasonably possible to any Warrant Shares or other securities
      deliverable after the Reorganization on the exercise of the
    Warrants.

	 	 	 
	 	(c) 	
      The subdivision or consolidation of Shares at any time
      outstanding into a greater or lesser number of Shares (whether with or
      without par value) will not be deemed to be a Reorganization for the
      purposes of this Section 4.6.

	 	 	 
	 	(d) 	
      The adjustments provided for in this Section 4.6 are
      cumulative and will become effective immediately after the applicable
      record date or, if no record date is fixed, the effective date of the
      event which results in such adjustments.

	4.7 	
      Notice of Record Date

	 	 	 	 
		(a) 	
      If at any time while this or any replacement Warrant
      Certificate is outstanding:

	 	 	 	 
			(i) 	
      the Company proposes to pay any dividend of any kind upon
      its Shares or make any distribution to the holders of its
Shares;

	 	 	 	 
			(ii) 	
      the Company proposes to offer for subscription pro rata
      to the holders of its Shares any additional shares of stock of any class
      or other rights;

	 	 	 	 
			(iii) 	
      the Company proposes any Reorganization; or

	 	 	 	 
			(iv) 	
      there is a voluntary or involuntary dissolution,
      liquidation or winding-up of the Company,

	 		
      the Company shall give to the Holder at least seven (7)
      days’ prior written notice (the “Record Date Notice”) of the date
      on which the books of the Company are to close or a record is to be taken
      for such dividend, distribution or subscription rights, or for determining
      rights to vote with respect to such Reorganization, dissolution,
      liquidation or winding-up.

	 	 	 
	 	(b) 	
      The Record Date Notice shall specify, in the case of any
      such dividend, distribution or subscription right, or for determining
      rights to vote with respect to such Reorganization, dissolution,
      liquidation or winding-up, as the case may be, the date on which holders
      of Shares will be entitled to exchange their Shares for securities or
      other property deliverable upon any dividend, distribution, subscription
      right, Reorganization, dissolution, liquidation or winding-up, as the case
      may be.

	 	 	 
	 	(c) 	
      Each Record Date Notice shall be delivered to the Holder
      at the address of the Holder set forth on the Warrant Certificate or at
      such other address as the Holder may from time to time specify to the
      Company in writing to the address of the Company set forth in Section
      3.2.

A7 

4.8         Determination
of Adjustments 

If any questions will at any time arise with respect to the
Exercise Price or any adjustment provided for in Section 4.6, such questions
will be conclusively determined by the Company’s Auditors, or, if they decline
to so act, by any other firm of certified public accountants registered with the
Canadian Public Accountability Board that the Company may designate and who will
have access to all appropriate records, and such determination will be binding
upon the Company and the Holder. 

5.         
 MODIFICATION OF TERMS AND CONDITIONS FOR CERTAIN PURPOSES

From time to time, the Company may, subject to the provisions
herein, modify the Terms and Conditions hereof, for the purpose of correction or
rectification of any ambiguities, defective provisions, errors or omissions
herein. 

6.         
 TIME OF ESSENCE 

Time will be of the essence hereof. 

7.         
 SUCCESSORS 

This Warrant Certificate will enure to the benefit of and will
be binding upon the Company and its successors. 

8.         
 WARRANTS NOT TRANSFERABLE

The Warrants are not transferable. 

APPENDIX “B” 

SUBSCRIPTION FORM

	TO: 	Naked Brand Group Inc. 
	  	2 – 34346 Manufacturers Way

	  	Abbotsford, BC V2S 7M1 
	 	Attention:
      President 

The undersigned holder (the “Holder”) of the within
warrant certificate dated November 14, 2013 (the “Warrant Certificate”)
hereby subscribes for ____________ shares of common stock (the “Shares”)
of Naked Brand Group Inc. (the “Company) pursuant to the within
Warrants Certificate at US$0.10 per Share on the Terms and Conditions of the
within Warrant Certificate, and the Holder (select one of the following): 

	 	[   ]	
      has included a certified cheque or bank draft payable to
      or to the order of the Company for the whole amount of the Exercise Price
      (as defined in the Warrant Certificate) of the Shares with this
      Subscription Form; or 

	 	 	     
	 	[   ]	
      elects to receive such number of Shares as is computed
      using the following formula: 

X = Y (A – B) 
A 

	 	where: 	X = 	the number of Shares to be issued
      to the Holder; 
	 	 	 	 
	 	  	Y = 	the number of Shares covered by
      this Subscription Form; 
	 	 	 	 
	 	  	A = 	the Fair Market Value (as defined
      in the Warrant Certificate) of one Share; and 
	 	 	 	 
	 	  	B = 	the Exercise Price per Share.
  

The undersigned Holder represents that, at the time of exercise
of the Warrants, all of the representations and warranties contained in the
Subscription Agreement between the Company and the undersigned Holder pursuant
to which these Warrants were issued are true and accurate.

The undersigned hereby directs that the Shares hereby
subscribed for be issued and delivered as follows: 

	NAME(S) IN FULL 	 	ADDRESS(ES) 	 	NUMBER OF SHARES 
		 		 	
		 		 	
		 		 	
		 		 	
	  	 	TOTAL: 	 	

(Please print full name in which share certificates are to be
issued, stating whether Mr., Mrs. or Miss is applicable). 

DATED this _____ day of ______________________, 20___. 

In the presence of: 

	 	 	 
	Signature of Witness 	 	Signature of Warrant Holder

Please print below your name and address in full. 

 

	 	 
	Name (Mr./Mrs./Miss) 	 
	 	 
	 	 
	Address 	 
	 	 
	 	 
	 	 

LEGENDS 

The certificates representing the Shares acquired on the
exercise of the Warrants will bear the following legends, if and as applicable:

THESE SECURITIES HAVE BEEN ISSUED IN AN OFFSHORE TRANSACTION
TO PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED HEREIN) PURSUANT TO REGULATION S
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933
ACT”).

NONE OF THESE SECURITIES HAVE BEEN REGISTERED UNDER THE 1933
ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE
OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO U.S. PERSONS
(AS DEFINED HEREIN) EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S
UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING
TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE
WITH THE 1933 ACT. 

THE HOLDER OF THESE SECURITIES MUST NOT TRADE THE SECURITIES
IN OR FROM A JURISDICTION OF CANADA UNLESS THE CONDITIONS IN SECTION 13 OF
MULTILATERAL INSTRUMENT 51-105 ISSUERS QUOTED IN THE U.S. OVER THE COUNTER
MARKETS ARE MET. 

INSTRUCTIONS FOR SUBSCRIPTION FORM

The signature to the Subscription Form must correspond in every
particular with the name written upon the face of the Warrant Certificate
without alteration or enlargement or any change whatever. If there is more than
one subscriber, all must sign. 

In the case of persons signing by agent or attorney or by
personal representative(s), the authority of such agent, attorney or
representative(s) to sign must be proven to the satisfaction of the Company.

If the Warrant Certificate and the Subscription Form are being
forwarded by mail, registered mail must be employed.ex10-1.htm

REVOLVING CREDIT GRID NOTE

$500,000

August 8, 2013

San Diego, CA

On the due date for each advance (as recorded on the grid attached hereto as Schedule A or on any additional pages thereof), the undersigned Capstone Financial Group, Inc., (the “Maker”), having an address 2600 Michelson Dr., Suite 700, Irvine, CA 92612; promises to pay to the order of Capstone Affluent Strategies, Inc., (the “Holder”), having an address at 2600 Michelson Dr., Suite 700, Irvine, CA 92612; or such other place as may be designated in writing by the Holder, the principal sum of up to Five Hundred Thousand Dollars ($500,000), or the aggregate amount of all unpaid revolving credit loans (“Advances”) made to the Maker by the Holder from time to time hereinafter, whichever is less, and to accrue interest (computed on the basis of a year of 360 days) from the date of this Note on the unpaid principal amount of this Note, in like money, at said address, at the interest rate set forth below, payable concurrent with the principal. All principal and accrued interest of this Note shall be due and payable on August 8, 2015 to the Holder.

1. INTEREST.                      The principal amount of this Note shall bear interest at the rate of two percent (2%) per annum.

2. ENDORSEMENT.                                All Advances made to the Maker by the Holder under this Note and all payments of principal amounts in respect of such Advances may be endorsed by the Holder on Schedule A attached to this Note, which endorsements shall, in the absence of manifest error, be conclusive as to the outstanding principal amount of all Advances; provided, however, that the failure to make such notation with respect to any Advance or payment shall not limit or otherwise affect the obligations of the Maker under this Note.

3. PAYMENT.                      This Note may be prepaid in whole or in part without the consent of the Holder.

4. DEFAULT.                      If all principal and interest due and owing to the Holder on this Note is not paid within thirty (30) days of demand by the Holder as set forth above, the Maker shall be deemed to be in default, and additional interest shall be deemed to have commenced to accrue from the date hereof at the rate of ten percent (10%) per annum. Upon such default, the Holder shall also be entitled to receive from the Maker all costs of collection of this Note, including without limitation, reasonable attorneys’ fees and disbursements, and costs of suit. All amounts payable pursuant to this Note shall be immediately due and payable, without presentment, demand, protest or notice of any kind, upon the occurrence of any of the following events (each, an “Event of Default”):

(a) Failure of the Maker to pay any installment of principal or interest on the date when it is due hereunder.

  

1

  

 

(b) Failure of the Maker to perform or comply with any of the agreements, conditions, covenants, provisions or stipulations contained in this Note.

(c) Any assignment for the benefit of creditors made by the Maker.

(d) Appointment of a receiver, liquidator or trustee for the Maker; the filing by or against the Maker of any petition for bankruptcy pursuant to the Federal Bankruptcy Code or any similar federal or state statute (and, in the case of any such petition filed against the Maker, such petition is not dismissed within forty-five (45) days); or the institution of any proceeding for the dissolution or liquidation of the Maker.

5. WAIVER OF DEMAND.                                           The undersigned hereby waives presentment, demand, notice of dishonor, protest, and all other demands and notices, in connection with the delivery, acceptance, performance, and enforcement of this Note.

6. NO ORAL MODIFICATIONS.                                                      This Note can only be changed by an agreement in writing signed by both the Maker and the Holder.

7. SEVERABILITY.                                The invalidity or unenforceability of any provision of this Note will not in any manner affect any other provision. If any provision is determined to be invalid or unenforceable, this Note shall be construed as if the invalid or unenforceable provision were omitted.

8. GOVERNING LAW.                                           This Note will be governed by the laws of the State of California without regard to conflicts of laws principals.

9. BINDING EFFECT.                                           This Note shall be binding upon the Maker and any successor to the principal business interests of the Maker, whether by merger or otherwise.

10. NOTICES.                      Any notice, request or other communication pursuant to this Note shall be deemed duly given if hand delivered or mailed by certified or registered mail, in the case of the Holder, to the address specified above, and in the case of the Maker, to the address specified above, or in the case of either party, to such other address as it may have designated as its address for receiving notices hereunder by a notice given to the party hereto in the manner herein provided.

IN WITNESS WHEREOF, the undersigned has caused this Note to be duly executed as of the date first above written.

Attest:

By:  /S/ Darin Pastor                                                                                     

Darin Pastor, CEO                                                                          

Capstone Affluent Strategies, Inc.                                                                                    

 

By: /S/ George Schneider     

George Schneider, President

Capstone Financial Group, Inc. 

 

  

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SCHEDULE A

TO

REVOLVING CREDIT GRID NOTE

	
Date

	
Amount of Loan

	
Amount of Principal Repaid

	
Unpaid Principal Balance of Revolving Credit Grid Note

	
Name of Person Making Notation

	
08/08/13

	
 $        68.72

	  	
 $ 499,931.28

	
Brandon Lane

	
08/10/13

	
 $        53.28

	  	
 $ 499,878.00

	
Brandon Lane

	
08/13/13

	
 $ 95,663.43

	  	
 $ 404,214.57

	
Brandon Lane

	
08/13/13

	
 $ 12,500.00

	  	
 $ 391,714.57

	
Brandon Lane

	
08/19/13

	
 $   5,000.00

	  	
 $ 386,714.57

	
Brandon Lane

	
08/19/13

	
 $ 10,000.00

	  	
 $ 376,714.57

	
Brandon Lane

	
08/19/13

	
 $   2,000.00

	  	
 $ 374,714.57

	
Brandon Lane

	
08/20/13

	
 $   1,520.80

	  	
 $ 373,193.77

	
Brandon Lane

	
08/20/13

	
 $      278.00

	  	
 $ 372,915.77

	
Brandon Lane

	
08/20/13

	
 $   1,250.00

	  	
 $ 371,665.77

	
Brandon Lane

	
08/23/13

	
 $        25.00

	  	
 $ 371,640.77

	
Brandon Lane

	
08/23/13

	
 $      108.00

	  	
 $ 371,532.77

	
Brandon Lane

	
08/26/13

	
 $      475.00

	  	
 $ 371,057.77

	
Brandon Lane

	
08/28/13

	
 $   6,827.00

	  	
 $ 364,230.77

	
Brandon Lane

	
08/29/13

	
 $      158.00

	  	
 $ 364,072.77

	
Brandon Lane

	
09/05/13

	
 $      875.00

	  	
 $ 363,197.77

	
Brandon Lane

	
09/06/13

	
 $ 12,500.00

	  	
 $ 350,697.77

	
Brandon Lane

	
09/11/13

	
 $      377.00

	  	
 $ 350,320.77

	
Brandon Lane

	
09/11/13

	
 $      314.00

	  	
 $ 350,006.77

	
Brandon Lane

	
09/12/13

	
 $        21.01

	  	
 $ 349,985.76

	
Brandon Lane

	
09/13/13

	
 $      200.00

	  	
 $ 349,785.76

	
Brandon Lane

	
09/13/13

	
 $   1,043.20

	  	
 $ 348,742.56

	
Brandon Lane

	
09/16/13

	
 $   1,335.00

	  	
 $ 347,407.56

	
Brandon Lane

	
09/16/13

	
 $        29.66

	  	
 $ 347,377.90

	
Brandon Lane

	
09/17/13

	
 $        46.43

	  	
 $ 347,331.47

	
Brandon Lane

	
09/18/13

	
 $        18.31

	  	
 $ 347,313.16

	
Brandon Lane

	
09/20/13

	
 $      910.17

	  	
 $ 346,402.99

	
Brandon Lane

	
09/22/13

	
 $        16.77

	  	
 $ 346,386.22

	
Brandon Lane

	
09/24/13

	
 $        19.36

	  	
 $ 346,366.86

	
Brandon Lane

	
09/26/13

	
 $      750.00

	  	
 $ 345,616.86

	
Brandon Lane

	
09/26/13

	
 $        59.61

	  	
 $ 345,557.25

	
Brandon Lane

  

3

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