EXHIBIT 10.5

THIS NOTE IS SUBORDINATE TO CERTAIN OBLIGATIONS OF THE COMPANY AS DESCRIBED IN
THE BFI LOAN DOCUMENTS (DEFINED HEREIN) AND SUBJECT TO THAT CERTAIN DEBT
SUBORDINATION AGREEMENT DATED AS OF THE DATE HEREOF, AS AMENDED OR MODIFIED FROM
TIME TO TIME, AMONG BFI BUSINESS FINANCE AND THE HOLDER.

THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT AND HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, OR QUALIFIED UNDER ANY STATE SECURITIES LAWS. THIS NOTE
MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
QUALIFICATION OR AN EXEMPTION THEREFROM UNDER SAID ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.

IF THIS NOTE HAS BEEN ISSUED WITH "ORIGINAL ISSUE DISCOUNT" WITHIN THE MEANING
OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, UPON WRITTEN
REQUEST, THE COMPANY WILL PROMPTLY MAKE AVAILABLE TO ANY HOLDER OF THIS NOTE THE
FOLLOWING INFORMATION: (1) THE ISSUE PRICE AND DATE OF THIS NOTE, (2) THE AMOUNT
OF ORIGINAL ISSUE DISCOUNT ON THIS NOTE AND (3) THE YIELD TO MATURITY OF THIS
NOTE. TO OBTAIN THIS INFORMATION, A HOLDER SHOULD CONTACT THE CHIEF FINANCIAL
OFFICER AT 2070 LAS PALMAS DRIVE, CARLSBAD, CA 92011.

PROMISSORY NOTE

$1,000,000

September 6, 2012
San Diego, California

FOR VALUE RECEIVED

, Spy Optic Inc., a California corporation, formerly known as Orange 21 North
America Inc. (the "Company"), promises to pay to the order of Harlingwood
(Alpha), LLC, a Delaware limited liability company, or its registered assigns
("Holder"), the principal sum of One Million Dollars ($1,000,000) on April 1,
2014 (the "Maturity Date"), together with fees and interest thereon as provided
in Section 2 of this Promissory Note (this "Note").

     1. Definitions
    
        . For purposes of this Note, the following terms shall have the
        following meanings:
    
        "BFI Loan Documents" means the Loan and Security Agreement, dated as of
        February 26, 2007, between the Company and BFI Business Finance, as
        modified by the First Modification to Loan and Security Agreement, dated
        as of December 7, 2007, as further modified by the Second Modification
        to Loan and Security Agreement dated as of February 12, 2008, as further
        modified by the Third Modification to Loan and Security Agreement dated
        as of June 23, 2008, as further modified by the Fourth Modification to
        Loan and Security Agreement dated as of January 28, 2010, as further
        modified by the Fifth Modification to Loan and Security Agreement dated
        as of April 28, 2010, as further modified by the Sixth Modification to
        Loan and Security Agreement dated as of December 19, 2011, and as
        further modified by the Seventh Modification to Loan and Security
        Agreement dated as of March 1, 2012, and the other Loan Documents as
        defined therein, and, in each case, as may be further amended, restated,
        extended, supplemented, or otherwise modified from time to time.
    
        "Business Day" means any day which is not a Saturday or Sunday or a
        legal holiday on which national banks are authorized or required to be
        closed.
    
        "Common Stock" means the common stock of SPY Inc., a Delaware
        corporation ("Parent").
    
        "Common Stock Equivalents" means any securities of Parent which would
        entitle the holder thereof to acquire at any time Common Stock,
        including any debt, preferred stock, rights, options, warrants or other
        instrument that is at any time convertible into or exercisable or
        exchangeable for, or otherwise entitles the holder thereof to receive,
        Common Stock.
    
        "Conversion Shares" means, collectively, the shares of Common Stock
        issuable upon conversion of this Note in accordance with the terms
        hereof.
    
        "Costa Brava" means Costa Brava Partnership, L.P., a Delaware limited
        partnership.
    
        "Costa Brava Line of Credit Note" means the Third Amended and Restated
        Promissory Note, dated as of August 2, 2012, by the Company in favor of
        Costa Brava in the original principal amount of $10,000,000 (without
        giving effect to any accrued PIK Interest), as may be amended, restated,
        extended, supplemented, or otherwise modified from time to time.
    
        "Costa Brava Term Note" means the Second Amended and Restated Promissory
        Note, dated as of August 2, 2012, by the Company in favor of Costa Brava
        in the original principal amount of $7,000,000 (without giving effect to
        any accrued PIK Interest), as may be amended, restated, extended,
        supplemented, or otherwise modified from time to time.
    
        "Debt" means all liabilities, obligations and indebtedness of every kind
        and nature of any Person, including, without limitation: (i) all
        obligations for borrowed money, including, without limitation, all
        obligations of such Person evidenced by bonds, debentures, notes, loan
        agreements or other similar instruments or deferred purchase price of
        property; (ii) obligations as lessee under any leases (including under
        any capital leases); (iii) any reimbursement or other obligations under
        any performance or surety bonds, any letters of credit and similar
        instruments issued for the account of such Person; (iv) all net
        obligations in respect of any derivative products; (v) all guaranties,
        endorsements (other than for collection or deposit in the ordinary
        course of business), and other contingent obligations to purchase, to
        provide funds for payment, to supply funds to invest in any other
        Person, or otherwise to assure a creditor against loss; and (vi)
        obligations secured by any Lien on property owned by such Person,
        whether or not the obligations have been assumed or are limited in
        recourse.
    
        "Lien" means any security interest, mortgage, pledge, hypothecation,
        assignment, deposit arrangement, encumbrance, lien (statutory, judgment
        or other), claim or other priority or preferential arrangement of any
        kind or nature whatsoever, including any conditional sale or other title
        retention agreement, any easement, right of way or other encumbrance on
        title to real property, and any capital lease having substantially the
        same economic effect as any of the foregoing (other than a financing
        statement filed by a lessor in respect of an operating lease not
        intended as security).
    
        "Obligations" means all debts, liabilities, obligations, covenants and
        duties of the Company howsoever created, arising or evidenced, whether
        direct or indirect, joint or several, absolute or contingent, or now or
        hereafter existing, or due or to become due, which arise out of or in
        connection with this Note, including, without limitation, all costs and
        expenses incurred by Holder in connection with the enforcement of this
        Note and any interest and fees that accrue to Holder after the
        commencement by or against the Company of any proceeding under any laws
        naming the Company as a debtor in such proceeding, regardless of whether
        such interest and fees are allowed claims in such proceeding.
    
        "Person" means an individual, a partnership, a corporation, a limited
        liability company, an association, a joint stock company, a trust, a
        joint venture, an unincorporated organization and a governmental entity
        or any department, agency or political subdivision thereof.
    
        "PIK Interest" means, with respect to any Debt, accrued interest on such
        Debt payable in kind which is added to the principal balance and due on
        the Maturity Date. For sake of clarity, no PIK Interest is or may be
        payable in cash until the Maturity Date.
    
        "Securities" means, collectively, this Note and the Conversion Shares.
    
        "Trading Day" means a day on which the principal Trading Market is open
        for trading.
    
        "Trading Market" means any of the following markets or exchanges on
        which the Common Stock is listed or quoted for trading on the date in
        question: the NYSE Amex, the Nasdaq Capital Market, the Nasdaq Global
        Market, the Nasdaq Global Select Market, the New York Stock Exchange or
        the OTC Bulletin Board (or any successors to any of the foregoing);
        provided, however, if on the date in question the Common Stock is not
        listed or quoted for trading on any of the foregoing markets or
        exchanges, "Trading Market" means the New York Stock Exchange.
    
     2. Payment of Interest and Fees
    
        .
    
            Interest Generally
            . Interest shall accrue on the outstanding principal amount of this
            Note (including all previously capitalized PIK Interest thereon) at
            a rate equal to 12% per annum (computed on the basis of actual
            calendar days elapsed and a year of 365 days) payable in kind, as an
            addition to the outstanding principal amount due hereunder, monthly
            in arrears on the last day of each calendar month (each such date,
            an "
            Interest Payment Date
            ").
         a. Default Interest. Upon the occurrence and during the continuance of
            any Event of Default, this Note shall bear interest at a rate per
            annum equal to 2% plus the rate otherwise applicable to this Note.
            Such incremental interest (i.e., the additional 2% added during the
            continuance of an Event of Default) shall be payable in cash.
         b. Fees. On the date that is seven (7) Business Days after the date
            hereof (such date, the "First Payment Date"), the Company shall pay
            in cash to Holder a facility fee of $10,000 (the "First Payment").
            On each anniversary of the First Payment Date prior to the Maturity
            Date, the Company shall pay in cash to Holder a facility fee of the
            lesser of: (i) 1.00% of the average daily outstanding principal
            amount owing under this Note (without giving effect to any accrued
            PIK Interest) for the 365-day period ending on such date; and (ii)
            $10,000. On the Maturity Date, Holder shall reimburse the Company
            for the amount by which the First Payment exceeds 1.00% of the
            average daily outstanding principal amount owing under this Note
            (without giving effect to any accrued PIK Interest) for the period
            starting on the then most recent anniversary of the First Payment
            Date (the "Last Payment Date") and ending on the Maturity Date
            multiplied by a fraction of which the numerator will be the number
            of days elapsed since the Last Payment Date and of which the
            denominator will be 365.
    
     3. Payments
    
        .
    
            Form of Payment
            . All payments of cash interest, principal and fees shall be in
            lawful money of the United States of America by a check drawn on the
            account of the Company and sent via overnight courier service to
            Holder at such address as previously provided to the Company in
            writing (which address, in the case of Holder as of the date of
            issuance hereof, shall initially be the address for Holder as set
            forth in this Note); provided that Holder may elect to receive a
            payment of cash via wire transfer of immediately available funds by
            providing the Company with prior written notice setting out such
            request and Holder's wire transfer instructions. Whenever any
            payment to be made shall otherwise be due on a day which is not a
            Business Day, such payment shall be made on the immediately
            succeeding Business Day and such extension of time shall be included
            in the computation of accrued interest. All payments shall be
            applied first to outstanding fees, then to accrued interest, and
            thereafter to principal.
         a. No Set-Off. The Company agrees to make all payments under this Note
            without set-off or deduction and regardless of any counterclaim or
            defense.
         b. Prepayment. The Company shall have the right to prepay all amounts
            owed under this Note in whole or in part at any time upon five (5)
            Business Days prior written notice to Holder.
    
     4. Conversion
    
        .
    
            Voluntary Conversion
            . Subject to the provisions of this Section 4, at any time after the
            date hereof until this Note is no longer outstanding, the
            outstanding principal amount of this Note (including all previously
            capitalized PIK Interest thereon) shall be convertible, in whole or
            in part, into shares of Common Stock at the option of Holder, at any
            time and from time to time. Holder shall effect conversions by
            delivering to the Company a notice of conversion (each, a "
            Notice of Conversion
            "), specifying therein the principal amount of this Note to be
            converted, which amount shall be no less than $100,000 (unless the
            aggregate principal amount that has not been converted is less than
            $100,000, in which case the amount to be converted shall be no less
            than remaining aggregate principal amount that has not been
            converted), and the date on which such conversion shall be effected,
            which date shall be no earlier than the tenth (10th) Business Day
            after such Notice of Conversion is deemed delivered hereunder (such
            date, the "
            Conversion Date
            "). If no Conversion Date is specified in a Notice of Conversion,
            the Conversion Date shall be the date that is the tenth (10th)
            Business Day after such Notice of Conversion is deemed delivered
            hereunder. Conversions hereunder shall have the effect of lowering
            the outstanding principal amount of this Note in an amount equal to
            the applicable amount being converted. Holder and the Company shall
            maintain records showing the principal amount(s) converted and the
            date of such conversion(s).
            
            Holder, and any assignee by acceptance of this Note, acknowledge and
            agree that, by reason of the provisions of this paragraph, following
            conversion of a portion of the principal amount of this Note, the
            unpaid and unconverted principal amount of this Note may be less
            than the amount stated on the face hereof.
         a. Conversion Price. The conversion price in effect on any Conversion
            Date shall be equal to $1.40, subject to adjustment herein (the
            "Conversion Price").
         b. Mechanics of Conversion.
             i.   Conversion Shares Issuable Upon Conversion. The number of
                  Conversion Shares issuable upon a conversion hereunder shall
                  be determined by the quotient obtained by dividing (x) the
                  outstanding principal amount of this Note (including all
                  previously capitalized PIK Interest thereon) to be converted
                  by (y) the Conversion Price.
             ii.  Delivery of Certificate Upon Conversion. Not later than five
                  (5) Trading Days after each Conversion Date, the Company shall
                  deliver, or cause to be delivered, to Holder a certificate or
                  certificates representing the number of Conversion Shares
                  being acquired upon the conversion of this Note.
             iii. Reservation of Shares Issuable Upon Conversion. The Company
                  covenants that it will at all times reserve and keep available
                  out of its authorized and unissued shares of Common Stock for
                  the sole purpose of issuance upon conversion of this Note as
                  herein provided, free from preemptive rights or any other
                  actual contingent purchase rights of Persons other than
                  Holder, not less than such aggregate number of shares of the
                  Common Stock as shall be issuable upon the conversion of the
                  then outstanding principal amount of this Note (including all
                  previously capitalized PIK Interest thereon). The Company
                  covenants that all shares of Common Stock that shall be so
                  issuable shall, upon issue, be duly authorized, validly
                  issued, fully paid and nonassessable.
             iv.  Fractional Shares. No fractional shares or scrip representing
                  fractional shares shall be issued upon the conversion of this
                  Note. As to any fraction of a share which Holder would
                  otherwise be entitled to acquire upon such conversion, the
                  Company shall at its election, either pay a cash adjustment in
                  respect of such final fraction in an amount equal to such
                  fraction multiplied by the Conversion Price or round up to the
                  next whole share.
             v.   Stock Dividends and Stock Splits. If the Company, at any time
                  while this Note is outstanding: (A) pays a stock dividend or
                  otherwise makes a distribution or distributions payable in
                  shares of Common Stock on shares of Common Stock or any Common
                  Stock Equivalents (which, for avoidance of doubt, shall not
                  include any shares of Common Stock issued by the Company upon
                  conversion of, or payment of interest on, this Note); (B)
                  subdivides outstanding shares of Common Stock into a larger
                  number of shares; (C) combines (including by way of a reverse
                  stock split) outstanding shares of Common Stock into a smaller
                  number of shares; or (D) issues, in the event of a
                  reclassification of shares of the Common Stock, any shares of
                  capital stock of the Company, then the Conversion Price shall
                  be multiplied by a fraction of which the numerator shall be
                  the number of shares of Common Stock (excluding any treasury
                  shares of the Company) outstanding immediately before such
                  event and of which the denominator shall be the number of
                  shares of Common Stock outstanding immediately after such
                  event. Any adjustment made pursuant to this Section shall
                  become effective immediately after the record date for the
                  determination of stockholders entitled to receive such
                  dividend or distribution and shall become effective
                  immediately after the effective date in the case of a
                  subdivision, combination or re-classification.
             vi.  Transfer Taxes. The issuance of certificates for shares of the
                  Common Stock on conversion of this Note shall be made without
                  charge to Holder hereof for any documentary stamp or similar
                  taxes that may be payable in respect of the issue or delivery
                  of such certificates; provided, however, that, the Company
                  shall not be required to pay any tax that may be payable in
                  respect of any transfer involved in the issuance and delivery
                  of any such certificate upon conversion in a name other than
                  that of Holder and the Company shall not be required to issue
                  or deliver such certificates unless or until the Person or
                  Persons requesting the issuance thereof shall have paid to the
                  Company the amount of such tax or shall have established to
                  the satisfaction of the Company that such tax has been paid.
    
     5. Restricted Securities
    
        . By accepting the benefits of the Securities, Holder hereby covenants,
        agrees, represents and warrants the following:
    
            Own Account
            . The Securities are characterized as "restricted securities" under
            the federal securities laws, inasmuch as they are being acquired
            from the Company in a transaction not involving a public offering,
            and that under such laws and applicable regulations such securities
            may be resold without registration under the Securities Act of 1933,
            as amended (the "
            1933 Act
            ") only in certain limited circumstances. In this connection, Holder
            is familiar with Rule 144, as presently in effect, and understands
            the resale limitations imposed thereby and by the 1933 Act. At the
            time of conversion, Holder agrees to execute and deliver to the
            Company a certificate, in such form reasonably acceptable to the
            Company, affirming that Holder is an accredited investor (as such
            term is defined by the 1933 Act), qualified to receive restricted
            securities as of the date of conversion, and has no intent to
            distribute the same in violation of the 1933 Act.
         a. Investment Risks. The Securities will not be, and Holder does not
            have the right to require that the Securities be, registered under
            the 1933 Act. The Securities may bear one or more of the following
            legends:
             i.  The following legend under the 1933 Act:
            
                 "THESE SECURITIES HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER
                 THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS
                 OF ANY STATE, AND MAY BE OFFERED, SOLD, PLEDGED OR HYPOTHECATED
                 ONLY IF REGISTERED AND QUALIFIED PURSUANT TO THE RELEVANT
                 PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS OR IF THE
                 COMPANY IS PROVIDED AN OPINION OF COUNSEL REASONABLY
                 SATISFACTORY TO THE COMPANY THAT REGISTRATION AND QUALIFICATION
                 UNDER FEDERAL AND STATE SECURITIES LAWS IS NOT REQUIRED OR IF
                 THE COMPANY OTHERWISE SATISFIES ITSELF THAT REGISTRATION IS NOT
                 REQUIRED."
            
             ii. Any legend required by state securities laws.
        
            The Company agrees to remove promptly, upon the request of a holder
            of Conversion Shares, said legend from the documents/certificates
            for such shares following the Company's receipt of evidence
            reasonably satisfactory to the Company that such shares have been
            transferred in compliance with the 1933 Act and such removal is also
            in compliance with the 1933 Act. In addition, the Company agrees to
            reissue certificates representing any of such shares, without the
            legend, at such time as the holder of such shares, prior to making
            any transfer of such shares, provides written notice to the Company
            describing the manner and terms of such transfer as the Company
            shall reasonably request to confirm that such transfer will be in
            compliance with the 1933 Act.
        
         b. Purchaser Status. At the time such Holder was offered the
            Securities, it was, and at the date hereof it is, and at the time of
            any conversion of the Note it will be, an "accredited investor" as
            defined in Rule 501(a) under the 1933 Act. Holder is not required to
            be registered as a broker-dealer under Section 15 of the Securities
            Exchange Act of 1934, as amended.
         c. Residency. Holder's principal executive offices are at the location
            set forth in the Section 11 of this Note.
         d. Experience of Holder. Holder, either alone or together with its
            representatives (who are unaffiliated with and who are not
            compensated by the Company or any affiliate of the Company and who
            are not selling agents of the Company), has such knowledge,
            sophistication and experience in business and financial matters so
            as to be capable of evaluating the merits and risks of the
            prospective investment in the Securities, and has so evaluated the
            merits and risks of such investment. Holder is able to bear the
            economic risk of an investment in the Securities and, at the present
            time, is able to afford a complete loss of such investment.
         e. General Solicitation. Holder is not purchasing the Securities as a
            result of any advertisement, article, notice or other communication
            regarding the Securities published in any newspaper, magazine or
            similar media or broadcast over television or radio or presented at
            any seminar or meeting or, to its knowledge, in any other form of
            general solicitation or general advertisement.
    
     6. Default
    
        .
    
            Events of Default
            . For purposes of this Note, any of the following events which shall
            occur shall constitute an "
            Event of Default
            ":
             i.   any indebtedness under this Note is not paid when and as the
                  same shall become due and payable, whether at maturity, by
                  acceleration, five (5) days following notice of prepayment or
                  otherwise;
             ii.  default shall occur in the observance or performance of any
                  provision of Section 4 of this Note, and such default shall
                  continue uncured for a period of ten (10) days after notice of
                  such default by Holder;
             iii. the Company shall (A) apply for or consent to the appointment
                  of a receiver, trustee, custodian or liquidator of itself or
                  any part of its property, (B) become subject to the
                  appointment of a receiver, trustee, custodian or liquidator
                  for itself or any part of its property, (C) make an assignment
                  for the benefit of creditors, (D) fail generally, become
                  unable or admit in writing to its inability to pay its debts
                  as they become due, (E) institute any proceedings under the
                  United States Bankruptcy Code or any other federal or state
                  bankruptcy, reorganization, receivership, insolvency or other
                  similar law affecting the rights of creditors generally, or
                  file a petition or answer seeking reorganization or an
                  arrangement with creditors to take advantage of any insolvency
                  law, or file an answer admitting the material allegations of a
                  bankruptcy, reorganization or insolvency petition filed
                  against it, or (F) become subject to any involuntary
                  proceedings under the United States Bankruptcy Code or any
                  other federal or state bankruptcy, reorganization,
                  receivership, insolvency or other similar law affecting the
                  rights of creditors generally;
             iv.  the Company shall (A) liquidate, wind up or dissolve (or
                  suffer any liquidation, wind-up or dissolution), (B) suspend
                  its operations other than in the ordinary course of business,
                  or (C) take any action to authorize any of the actions or
                  events set forth above in this Section 6(a)(iv);
             v.   this Note shall for any reason cease to be, or shall be
                  asserted by the Company not to be, a legal, valid and binding
                  obligation of the Company.
        
         a. Consequences of Events of Default.
             i.  If (A) any Event of Default shall occur for any reason, whether
                 voluntary or involuntary, and be continuing or (B) Costa Brava
                 declares the outstanding Debt under the Costa Brava Line of
                 Credit Note or the Costa Brava Term Note to be immediately due
                 and payable, Holder may, upon notice or demand, declare the
                 outstanding Obligations under this Note to be due and payable,
                 whereupon the outstanding Obligations under this Note shall be
                 and become immediately due and payable, and the Company shall
                 immediately pay to Holder all such Obligations. Upon the
                 occurrence of an actual or deemed entry of an order for relief
                 with respect to the Company under the United States Bankruptcy
                 Code, then all Obligations under this Note shall automatically
                 be due immediately without notice of any kind. The Company
                 agrees to pay Holder all out-of-pocket costs and expenses
                 incurred by Holder (including attorney's fees) in connection
                 with the enforcement or protection of its rights in relation to
                 this Note, including any suit, action, claim or other activity
                 of Holder to collect or otherwise enforce the Obligations under
                 this Note or any portion thereof, or in connection with the
                 transactions contemplated hereby.
             ii. Holder shall also have any other rights which Holder may have
                 been afforded under any contract or agreement at any time and
                 any other rights which Holder may have pursuant to applicable
                 law.
    
     7. Lost, Stolen, Destroyed or Mutilated Note
    
        . In case this Note shall be mutilated, lost, stolen or destroyed, the
        Company shall issue a new Note of like date, tenor and denomination and
        deliver the same in exchange and substitution for and upon surrender and
        cancellation of such mutilated Note, or in lieu of this Note being lost,
        stolen or destroyed, upon receipt of evidence satisfactory to the
        Company of such loss, theft or destruction.
    
        Waiver of Jury Trial
    
        . TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED,
        THE COMPANY (BY ITS EXECUTION HEREOF) AND HOLDER (BY ITS ACCEPTANCE OF
        THIS NOTE) WAIVES AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS
        PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY
        FORUM IN RESPECT OF ANY ISSUE OR ACTION ARISING OUT OF OR BASED UPON OR
        RELATING TO THIS NOTE OR IN ANY WAY CONNECTED WITH OR RELATED OR
        INCIDENTAL TO THE TRANSACTIONS CONTEMPLATED HEREBY, IN EACH CASE WHETHER
        NOW EXISTING OR HEREAFTER ARISING.
    
        Governing Law
    
        . This Note shall be deemed to be a contract made under the laws of the
        State of New York and for all purposes shall be governed by, construed
        under, and enforced in accordance with the laws of the State of New
        York.
    
        Amendment and Waiver
    
        . Any term of this Note may be amended and the observance of any term of
        this Note may be waived (either generally or in a particular instance
        and either retroactively or prospectively), only with the written
        consent of the Company and Holder.
    
     8. Notices
    
        . Any notice or other communication in connection with this Note may be
        made and is deemed to be given as follows: (i) if in writing and
        delivered in person or by courier, on the date when it is delivered;
        (ii) if by facsimile, when received at the correct number (proof of
        which shall be an original facsimile transmission confirmation slip or
        equivalent); or (iii) if sent by certified or registered mail or the
        equivalent (return receipt requested), on the date such mail is
        delivered, unless the date of that delivery is not a Business Day or
        that communication is delivered on a Business Day but after the close of
        business on such Business Day in which case such communication shall be
        deemed given and effective on the first following Business Day. Any such
        notice or communication given pursuant to this Note shall be addressed
        to the intended recipient at its address or number (which may be changed
        by either party at any time) specified as follows:
    
        

    If to the Company:
    
    Spy Optic Inc.
    
    2070 Las Palmas Drive
    
    Carlsbad, CA 92011
    
    Facsimile No.: (760) 804-8420
    
    Telephone No.: (760) 804-8421
    
    Attention: Chief Executive Officer
    
     
    
    With a copy to:
    
    Spy Optic Inc.
    
    2070 Las Palmas Drive
    
    Carlsbad, CA 92011
    
    Facsimile No.: (760) 804-8420
    
    Telephone No.: (760) 804-8421
    
    Attention: Chief Financial Officer
    
     
    
    With an additional copy to:
    
    Sheppard, Mullin, Richter & Hampton LLP
    
    12275 El Camino Real, Suite 200
    
    San Diego, CA 92130-2006
    
    Facsimile No.: (858) 509-3691
    
    Attention: John Hentrich, Esq.
    
     
    
    If to Holder:
    
    Harlingwood (Alpha), LLC
    
    P.O. Box 7033
    
    Rancho Santa Fe, CA 92067
    
    Attention: Fir Geenen
    
    Email: fmg@harlingwood.com
    
     
    
    With a copy to:
    
    Procopio, Cory, Hargreaves & Savitch LLP
    
    525 B Street, Suite 2200
    
    San Diego, CA 92101
    
    Facsimile No.: (619) 744-5466
    
    Attention: Matthew D. Short, Esq.

 1. Severability

    . If at any time any provision of this Note shall be held by any court of
    competent jurisdiction to be illegal, void or unenforceable, such provision
    shall be of no force and effect, but the illegality or unenforceability of
    such provision shall have no effect upon the legality or enforceability of
    any other provision of this Note.

    Assignment

    . The provisions of this Note shall be binding upon and inure to the benefit
    of each of the Company and Holder and their respective successors and
    assigns, provided that the Company shall not have the right to assign its
    rights and obligations hereunder or any interest herein. This Note may be
    endorsed, assigned and transferred in whole or in part by Holder to any
    other Person, provided, however, that no such endorsement, assignment or
    transfer be permitted that is not in compliance with securities law or other
    applicable law.

    Indemnity

    . The Company agrees to indemnify Holder, and its respective directors,
    officers, employees and agents (each such Person being called an
    "Indemnitee") against, and to hold each Indemnitee harmless from, any and
    all losses, claims, damages, liabilities and related expenses, including
    reasonable counsel fees, charges and disbursements, incurred by or asserted
    against any Indemnitee arising out of in any way connected with, or as a
    result of (i) the execution or delivery of this Note or any agreement or
    instrument contemplated thereby, the performance by the parties thereto of
    their respective obligations thereunder or the consummation of the
    transactions contemplated thereby or (ii) any breach by the Company of its
    obligations under this Note or any agreement or instrument contemplated
    thereby.

    Remedies Cumulative; Failure or Indulgence Not a Waiver

    . The remedies provided in this Note shall be cumulative and in addition to
    all other remedies available under this Note. No failure or delay on the
    part of Holder in the exercise of any power, right or privilege hereunder
    shall operate as a waiver thereof, nor shall any single or partial exercise
    of any such power, right or privilege preclude other or further exercise
    thereof or of any other right, power or privilege.

    Excessive Interest

    . Notwithstanding any other provision herein to the contrary, this Note is
    hereby expressly limited so that the interest rate charged hereunder shall
    at no time exceed the maximum rate permitted by applicable law. If, for any
    circumstance whatsoever, the interest rate charged exceeds the maximum rate
    permitted by applicable law, the interest rate shall be reduced to the
    maximum rate permitted, and if Holder shall have received an amount that
    would cause the interest rate charged to be in excess of the maximum rate
    permitted, such amount that would be excessive interest shall be applied to
    the reduction of the principal amount owing hereunder (without charge for
    prepayment) and not to the payment of interest, or if such excessive
    interest exceeds the unpaid balance of principal, such excess shall be
    refunded to the Company.

    Further, notwithstanding any other provision herein to the contrary, and
    without any further action from the parties to this Note, if the fees and
    interest charged hereunder shall be determined by a court of competent
    jurisdiction to be a "financial benefit" for purposes of 8 section 203(c)(v)
    of the General Corporation Law of the State of Delaware, this Note shall be
    deemed amended to eliminate such fees and reduce such interest rate to 0%.
    If Holder shall have received any such fees or interest, such amounts shall
    be applied to the reduction of the principal amount owing hereunder (without
    charge for prepayment), or if such fees and interest paid to Holder exceed
    the unpaid balance of principal, such excess shall be refunded to the
    Company.

 2. Registered Obligation

    . The Company shall establish and maintain a record of ownership (the
    "Register") in which it will register by book entry the interest of the
    initial Holder and of each subsequent assignee in this Note, and in the
    right to receive any payments of principal and interest or any other
    payments hereunder, and any assignment of any such interest. The Company
    shall make appropriate entries in the Register to reflect any assignment
    promptly following receipt of written notice from the assignor of such
    assignment. Notwithstanding anything herein to the contrary, this Note is
    intended to be treated as a registered obligation for federal income tax
    purposes and the right, title, and interest of Holder and its assignees in
    and to payments under this Note shall be transferable only upon notation of
    such transfer in the Register. This Section shall be construed so that this
    Note is at all times maintained in "registered form" within the meaning of
    Sections 163(f), 871(h)(2) and 881(c)(2) of the Internal Revenue Code and
    any related regulations (or any successor provisions of the Code or such
    regulations).

    Entire Agreement

    . This Note contains the entire understanding of the parties with respect to
    the subject matter hereof and supersedes all prior agreements,
    understandings, discussions and representations, oral or written, with
    respect to such matters, which the parties acknowledge have been merged into
    this Note.

    Waiver of Notice

    . To the extent permitted by law, the Company hereby waives demand, notice,
    protest and all other demands and notices in connection with the delivery,
    acceptance, performance, default or enforcement of this Note.

    Subordination

. This Note and each of Holder's rights and privileges hereunder is expressly
subject to the terms of that certain Debt Subordination Agreement by and between
BFI Business Finance and Holder dated as of the date hereof, as amended or
modified from time to time.

[Remainder of Page Intentionally Left Blank]

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

 

The Company:

 

SPY OPTIC INC.,

FORMERLY KNOWN AS
ORANGE 21 NORTH AMERICA INC

.

 

By: /s/ Michael D. Angel

Name: Michael D. Angel

Title: Chief Financial Officer

     

Holder:

 

HARLINGWOOD (ALPHA), LLC

By: Harlingwood Investment Partners I, LLC,

Manager

 

By: /s/ Fir Geenen

Fir Geenen, Manager