Document:

Second Amended and Restated Promissory Note

 Exhibit 10.1 
 THIS SECOND AMENDED AND RESTATED PROMISSORY 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 MARCH 19, 2010, AS AMENDED OR MODIFIED FROM TIME TO TIME, AMONG BFI BUSINESS FINANCE AND THE HOLDER. 

THIS PROMISSORY 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 PROMISSORY 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. 

THIS PROMISSORY 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 PROMISSORY NOTE THE FOLLOWING INFORMATION: (1) THE ISSUE PRICE AND DATE OF THE PROMISSORY NOTE, (2) THE AMOUNT OF ORIGINAL ISSUE
DISCOUNT ON THE PROMISSORY NOTE AND (3) THE YIELD TO MATURITY OF THE PROMISSORY NOTE. TO OBTAIN THIS INFORMATION, A HOLDER SHOULD CONTACT THE CHIEF FINANCIAL OFFICER AT 2070 LAS PALMAS DRIVE, CARLSBAD, CA 92011. 

SECOND AMENDED AND RESTATED PROMISSORY NOTE 
  

			
	$7,000,000	  	June 28, 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 Costa Brava Partnership III, L.P., a Delaware limited partnership, or its registered assigns (“Holder”), the principal sum of Seven Million Dollars
($7,000,000), or such lesser amount as is advanced and outstanding hereunder, on June 21, 2013 (the “Maturity Date”), together with fees and interest thereon as provided in Section 3 of this Second Amended and Restated
Promissory Note (this “Note”). Holder shall disburse the amount of this Note in accordance with the terms hereof. 
 1. Definitions. For purposes of this Note, the following terms shall have the following meanings: 
 “Affiliate” means with respect to any Person, any other Person which directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is under common Control
with, such first Person. 
 “BFI Loan Documents” means the Loan and Security Agreement, dated as of
February 26, 2007, between the Company and BFI Business Finance, and the other Loan 

  
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Documents as defined therein, and, in each case, as further amended, restated, extended, supplemented, or otherwise modified from time to time. 

“Business” means the business of the Company or its Subsidiaries of designing, developing, manufacturing and marketing
products for the action sports, motorsports and youth lifestyle markets, and related activities, as conducted or proposed to be conducted by the Company or its Subsidiaries on the date hereof and reasonable extensions thereof. 

“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. 
 “Control” means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a person, whether through the ownership of voting securities, by contract or otherwise, and the terms “Controlling” and “Controlled” (and the lower-case versions of the same)
shall have meanings correlative thereto. 
 “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. 
 “Designated Equity Issuance”
means the proposed sale of equity by Parent (as defined below) with proceeds to Parent of at least $4,000,000 prior to payment of any transaction expenses, which sale is contemplated to occur no later than August 31, 2012. The equity to be sold
may consist of preferred stock, common stock, warrants to purchase common stock, or any combination thereof. 

“Existing Note” means the Amended and Restated Promissory Note of even date herewith, by the Company in favor of Holder
in the original principal amount of $7,000,000, as may be amended, restated, extended, supplemented, or otherwise modified from time to time. 
 “GAAP” means generally accepted principles of good accounting practice in the United States, consistently applied. 

“Governmental Authority” means any federal, state, local or other governmental department, commission, board, bureau,
agency or other instrumentality or authority, domestic or foreign, exercising executive, legislative, judicial, regulatory or administrative authority or functions of or pertaining to government. 

  
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 “Investment” means, with respect to any Person, any direct or indirect
acquisition or investment by such Person, whether by means of any loan, advance to, guarantee or assumption of Debt of, or purchase or other acquisition or any other debt participation or interest in such Person, any purchase or other acquisition of
any capital stock, debt or other securities of such Person, any capital contribution to such Person in, or any other investment in, or acquisition (in one transaction or a series of transactions) of, any interest or all or substantially all of the
property and assets or business of another Person or assets constituting a business unit, line of business or division of, such Person. 
 “Legal Requirement” means any present or future requirement imposed upon the Company or any of its Subsidiaries by any law, statute, rule, regulation, directive, order, decree or
guideline (or any interpretation thereof by courts or of administrative bodies) of the United States of America, or any state, or other political subdivision thereof, or by any board, governmental or administrative agency, central bank or monetary
authority of the United States of America or any other jurisdiction in which the Company owns property or conducts its business, or any political subdivision of any of the foregoing. 

“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). 

“Material Adverse Effect” means any event, matter, condition or circumstance which (i) has or would reasonably be
expected to have a material adverse effect on the business, properties, operations, condition (financial or otherwise) or prospects of the Company and its Subsidiaries, taken as a whole; (ii) would materially impair the ability of the Company
or any other Person to perform or observe their respective obligations under or in respect of this Note; (iii) would materially impair the rights and remedies of Holder under this Note; or (iv) affects the legality, validity, binding
effect or enforceability of this Note. 
 “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. 
 “Organic Document” means, relative to any Person, its articles or certificate of incorporation, or certificate of limited partnership or formation, its bylaws, partnership or operating
agreement or other organizational documents, and all stockholders agreements, voting trusts and similar arrangements applicable to any of its capital stock, partnership interests or other ownership interests. 

  
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 “Original Promissory Note” means the Amended and Restated Promissory Note
dated as of December 19, 2011, by the Company in favor the Holder in the original principal amount of $6,000,000. 

“Permitted Debt” means (i) Obligations of the Company to Holder hereunder or under any other document related to or
in connection with this Note; (ii) Debt of the Company under the BFI Loan Documents not to exceed a principal amount of $7,000,0000 at any one time outstanding, or amendments, extensions, renewals, refinancings, or replacements of such Debt
with (A) BFI Business Finance or (B) with any other lender, provided that (x) the maximum available principal amount of such Debt being extended, renewed, refinanced, or replaced under this clause (ii) does not increase,
(y) in no case shall the Company be permitted to draw in excess of $7,000,000 of principal at any one time outstanding and (z) any refinancing or replacement of the BFI Loan Documents with loans from any other lender shall be on terms and
in the form reasonably acceptable to Holder; (iii) Debt of the Company under the Existing Note; (iv) Debt of the Company and any Subsidiary of the Company existing on the date hereof and disclosed to Holder on Schedule A hereto
or extensions, renewals and refinancings of such Debt, provided that the principal amount of such Debt being extended, renewed or refinanced does not increase and the terms thereof are not modified to impose more burdensome terms upon Company
or the relevant Subsidiary; (v) Debt of Orange 21 Europe, S.r.l. (formerly known as Spy Optic, S.r.l.) and LEM S.r.l. and extensions, renewals and refinancings of such Debt; (vi) accounts payable to trade creditors for goods and services
and current operating liabilities (not the result of the borrowing of money) incurred in the ordinary course of business of Company or any Subsidiary of the Company in accordance with customary terms; (vii) Debt consisting of guarantees
resulting from endorsement of negotiable instruments for collection by the Company or a Subsidiary of the Company in the ordinary course of business; (viii) interest rate swaps, currency swaps and similar financial products entered into or
obtained in the ordinary course of business; (ix) capital leases or other Debt incurred solely to acquire equipment, computers, software or implement tenant improvements which is secured in accordance with clause (x) of the definition of
“Permitted Liens” and is not in excess of the lesser of the purchase price or the fair market value of such equipment, computers, software or tenant improvements on the date of acquisition; and (x) Debt of the Company under the
Promissory Note, dated as of June 31, 2011, by the Company in favor of Rose Colored Glasses LLC, in the original principal amount of $500,000, as may be amended, restated, extended, supplemented, or otherwise modified from time to time.

 “Permitted Investments” means debt obligations maturing within twelve months of the time of acquisition
thereof which are accorded a rating of AA- or better by S&P (or an equivalent rating by another recognized credit rating agency of similar standing), commercial paper with a maturity of 270 calendar days or less which is accorded a rating of A4
or better by S&P (or an equivalent rating by another recognized credit rating agency of similar standing), certificates of deposit maturing within twelve months of the time of acquisition thereof issued by commercial banks that are accorded a
rating by a recognized rating service then in the business of rating commercial banks which is in the first quartile of the rating categories used by such service, obligations maturing within twelve months of the time of acquisition thereof of any
Governmental Authority which obligations from time to time are accorded a rating of BBB or better by S&P (or an equivalent rating by another recognized credit rating agency of similar standing), and demand deposits, certificates of deposit,
bankers acceptance and time deposits 

  
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(having a tenor of less than one year) of United States banks having total assets in excess of $1,000,000,000. 
 “Permitted Liens” means (i) the existing Liens as of the date hereof disclosed to Holder on Schedule B hereto, or incurred in connection with the extension, renewal or
refinancing of the Debt secured by such existing Liens, provided that any extension, renewal or replacement Lien shall be limited to the property encumbered by the existing Lien and the principal amount of the Debt being extended, renewed or
refinanced does not increase; (ii) Liens on the assets of Orange 21 Europe, S.r.l. (formerly known as Spy Optic, S.r.l.) and LEM S.r.l. securing Debt permitted by clause (iv) of the definition of Permitted Debt; (iii) Liens for taxes,
fees, assessments or other governmental charges or levies, either not delinquent or being contested in good faith by appropriate proceedings and which are adequately reserved for in accordance with GAAP; (iv) Liens of materialmen, mechanics,
warehousemen, carriers or employees or other like Liens arising in the ordinary course of business and securing obligations either not delinquent or being contested in good faith by appropriate proceedings which are adequately reserved for in
accordance with GAAP and which do not in the aggregate materially impair the use or value of the property or risk the loss or forfeiture of title thereto; (v) Liens consisting of deposits or pledges to secure the payment of worker’s
compensation, unemployment insurance or other social security benefits or obligations, or to secure the performance of bids, trade contracts, leases, public or statutory obligations, surety or appeal bonds or other obligations of a like nature
incurred in the ordinary course of business (other than for Debt or any Liens arising under ERISA); (vi) easements, rights of way, servitudes or zoning or building restrictions and other minor encumbrances on real property and irregularities in
the title to such property which do not in the aggregate materially impair the use or value of such property or risk the loss or forfeiture of title thereto; (vii) statutory landlord’s Liens under leases to which Company or any of its
Subsidiaries is a party; and (viii) Liens (A) upon or in any equipment, computers or software acquired or held by Company or any of its Subsidiaries or tenant improvements implemented by Company or any of its Subsidiaries to secure the
purchase price of such equipment, computers or software or Debt incurred solely for the purpose of financing the acquisition of such equipment, computers or software or the implementation of such tenant improvements, or (B) existing on such
equipment, computers or software at the time of its acquisition, provided that the Lien is confined solely to the property so acquired and improvements thereon, or the proceeds of such equipment, computers, software or tenant improvements.

 “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 the Debt under this Note, accrued interest on such Debt to the extent such interest is not paid in cash but is added to the principal balance and due
on the Maturity Date. 
 “SEC Reports” means reports, schedules, forms and registration statements, and any
amendments thereto, filed with the Securities and Exchange Commission (the “Commission”) pursuant to the Securities Act of 1933 or Securities Exchange Act of 1934 and the rules and regulations of the Commission promulgated
thereunder. 

  
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 “Subsidiary” means, with respect to any Person (herein referred to as the
“parent”), any corporation, limited liability company, partnership, association or other business entity (i) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary
voting power or more than 50% of the general partnership interests are, at the time any determination is being made, owned, controlled or held by the parent, or (ii) that is, at any time any determination is made, otherwise Controlled by, the
parent or one or more Subsidiaries of the parent and one or more Subsidiaries of the parent. 
 2. Line of Credit.

 (a) Subject to the terms and conditions of this Note, Holder agrees to make advances to the Company at the Company’s
request in an aggregate principal amount at any one time outstanding not to exceed $7,000,000 (the “Line of Credit”) as such amount may be reduced from time to time pursuant to Section 4(c)(ii). The Company may borrow, repay
and reborrow all or any part of the Line of Credit, subject to the terms of this Note. All advances must be requested not later than the Maturity Date. Holder shall enter each amount borrowed and repaid in Holder’s records. No failure by Holder
to make, and no error by Holder in making, any entry in such records shall affect the Company’s obligation to repay the full principal amount advanced by Holder to or for the account of the Company, or to pay interest or fees thereon at the
agreed-upon rates. Holder’s commitment to make advances hereunder shall be in addition to any amounts advanced under the Existing Note. 
 (b) Each advance request shall be made (i) by telephone or in writing at the number or address, as applicable, provided for Holder in Section 15, (ii) no later than 11:00 a.m. (San Diego,
California time) one Business Day prior to the requested advance date, which date shall be a Business Day, and (iii) in a minimum amount of $500,000 or, if less, the remaining amount of the availability under the Line of Credit. The Company may
not request an advance more than once in each calendar week. Each oral advance request shall be conclusively presumed to have been made by a person authorized by the Company to do so, and any credit by Holder of an advance to or for the account of
the Company shall conclusively establish the Company’s obligation to repay same. Holder shall incur no liability of any kind to any Person by reason of making an advance upon an oral request, except to the extent such liability results from
Holder’s gross negligence or willful misconduct. 
 (c) The proceeds of each advance shall be disbursed in accordance with
the instructions provided by the Company. 
 3. Payment of Interest and Fees. 

(a) 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”). The Company may elect to pay interest in cash on the outstanding principal balance of this Note on any Interest Payment Date by providing
notice to the Holder at least two days prior to such Interest Payment Date. 

  
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 (b) Default Interest. Upon the occurrence and during the continuance of any Event of
Default, all outstanding amounts under 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. 
 (c) Fees. On each June 21 occurring hereafter until, and including, 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 for the 365 day period ending on such date and (ii) $60,000.

 4. Payments. 
 (a) 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. 
 (b) 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. 
 (c)
Prepayment. 
 (i) 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. 
 (ii) Within five (5) Business Days of the
Designated Equity Issuance, the Company shall prepay this Note in an amount equal to $1,000,000, which amount shall be applied to the principal amount outstanding hereunder. Holder’s commitment to make advances under this Note shall be reduced
on a dollar-for-dollar basis by the amount of any prepayments made pursuant to this clause (ii). 
 (d) Required Payment.
If the aggregate principal amount at any one time outstanding hereunder exceeds the lending commitment amount of $7,000,000 (excluding PIK Interest), as such amount may be reduced from time to time pursuant to Section 4(c)(ii), the Company
shall, at the time any such excess shall arise, promptly pay to Holder such amount as may be necessary to eliminate the excess. 

5. Conditions Precedent. Holder shall not be obligated to make any advance under this Note if any Event of Default or event with
which the passing of time or providing of notice or both would constitute an Event of Default shall have occurred and is continuing. 

  
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 6. Representations and Warranties. The Company hereby makes the following
representations and warranties to Holder, which are made and given subject to, and qualified in their entirety by the schedule of exceptions attached hereto as Schedule C: 

(a) Organization, Good Standing and Qualification. The Company is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, and has all requisite power and authority to execute, deliver and perform its obligations under this Note. Each of the Company and its Subsidiaries is qualified to do business and is in good standing in
each jurisdiction in which the failure so to qualify or be in good standing would have a Material Adverse Effect, and has all requisite power and authority to own its assets and carry on its business. 

(b) Corporate Power and Authorization; Consents. The execution, delivery and performance by the Company of this Note have been
duly authorized by all necessary action of the Company and do not and will not (i) contravene the terms of the Company’s Organic Documents; (ii) result in a breach of, or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any lease, instrument, contract or other agreement to which the
Company or any of its Subsidiaries are party or by which they or their properties may be bound or affected; (iii) necessitate the consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing
with, any Governmental Authority or any third party; or (iv) violate any provision of any law, rule, regulation, order, judgment, decree or the like binding on or affecting the Company, except in the case of each of clauses (ii), (iii) and
(iv), such as would not result in a Material Adverse Effect. 
 (c) Enforceability. This Note constitutes the legal,
valid and binding obligation of the Company, enforceable against the Company in accordance with its terms 
 (d) Financial
Statements and Other Information. SPY Inc., a Delaware corporation, formerly known as Orange 21 Inc. and sole owner of the Company (“Parent”), has previously furnished to Holder copies of (i) its audited consolidated
financial statements for the fiscal year ended December 31, 2011, including the balance sheet as of the close of the fiscal year and the income statement for such year, together with a statement of cash flows and (ii) unaudited copies of
its consolidated balance sheet, income statement and statement of cash flows as of and for the nine month period ended March 31, 2012 (the “Financial Statements”). The Financial Statements fairly present, in all material
respects, in conformity with GAAP (except as may be indicated in the notes thereto), the financial position of the Company taken as a whole as of the date thereof for the period specified therein (subject to normal year-end adjustments). There are
no material liabilities required in accordance with GAAP to be set forth in the Financial Statements that are not so set forth. Since December 31, 2011, there has been no event or circumstance, either individually or in the aggregate, that has
had or would reasonably be expected to have a Material Adverse Effect. All forecasts and projections that Parent and/or the Company have provided to Holder have been prepared in good faith on the basis of the assumptions stated therein, which
assumptions were believed to be reasonable at the time made, it being understood that projections as to future events are not to be viewed as facts and actual results may vary materially from such forecasts. 

  
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 (e) Litigation. There is no action, suit, proceeding or investigation pending or, to
the knowledge of Company and its Subsidiaries, currently threatened against the Company and its Subsidiaries which questions the validity of this Note or any related document or the right of the Company and its Subsidiaries to enter into such
agreements, or to consummate the transactions contemplated hereby or thereby, or which would reasonably be expected to result, either individually or in the aggregate, in any Material Adverse Effect, nor, to the knowledge of the Company, is there
any reasonable basis for the foregoing. The Company and its Subsidiaries are not parties or subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality which would reasonably be
expected to have a Material Adverse Effect. There is no material action, suit, proceeding or investigation by Company and its Subsidiaries currently pending or which Company and its Subsidiaries intend to initiate. 

(f) Operations in Conformity With Law, etc. The operations of the Business as conducted by the Company and its Subsidiaries are
not in violation of any Legal Requirement presently in effect, except for such violations and defaults as do not and will not, in the aggregate, result, or create a material risk of resulting, in any Material Adverse Effect. The Company and its
Subsidiaries have not received notice of any such violation or default, and the Company and its Subsidiaries have no knowledge of any reasonable basis on which the operations of the Business as conducted by the Company and its Subsidiaries would
reasonably be expected to violate or to give rise to any such violation or default. 
 (g) Intellectual Property. The
Company and its Subsidiaries have obtained all material patents, trademarks, service marks, trade names, copyrights, licenses and other rights, free from materially burdensome restrictions, that are necessary for the operation of the Business,
except for those for which the failure to obtain is not reasonably likely to have a Material Adverse Effect. The Company and its Subsidiaries have not received or otherwise been made aware of any communications alleging that the Company and its
Subsidiaries have violated or, by conducting the Business, would violate, in any material respect, any patents, trademarks, service marks, trade names, copyrights, trade secrets, information, proprietary rights and processes of any other person or
entity used in the conduct of its Business. 
 (h) Title to Property and Assets. The Company and its Subsidiaries have
good and marketable title to, or valid leasehold interests in or rights to use, all of the material assets and properties used by the Company and its Subsidiaries in the Business (collectively, the “Properties and Facilities”),
subject to no Liens except for the Permitted Liens. Taken as a whole, the Properties and Facilities are in good repair, working order and condition (ordinary wear and tear excepted) and all such assets and properties are owned or leased by the
Company and its Subsidiaries free and clear of all Liens, except for the Permitted Liens, or as otherwise permitted hereunder. The Properties and Facilities constitute all of the material assets, properties and rights of any type used in or
necessary for the conduct of the Business. 
 (i) Tax Returns, Payments and Elections. The Company and its Subsidiaries
have filed all material tax returns and reports (or timely extensions) as required by law relating to any material tax liability of the Company and its Subsidiaries. Such returns and reports are true and correct in all material respects and the
Company and its Subsidiaries have paid all material taxes and other assessments due, except where the validity or amount thereof is being contested 

  
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in good faith by appropriate proceedings and adequate reserves have been set aside on the Financial Statements. There are no pending, or to the knowledge of the Company and its Subsidiaries,
contemplated reviews, audits or proceedings with respect to any tax return, report or other tax liability of the Company or any of its Subsidiaries, which, in either case, relates to any material tax liability of the Company or any such Subsidiary.

 (j) Employment Matters. The Company and its Subsidiaries have complied in all material respects with all applicable
state and federal equal employment opportunity laws and with other laws related to employment, including without limitation all laws relating to withholding of taxes and other sums. All persons classified by the Company and its Subsidiaries as
independent contractors for employee benefit and state and federal tax purposes are appropriately classified, except where the failure to do so would not reasonably be expected to have a Material Adverse Effect. The Company and its Subsidiaries are
not delinquent in material payments to any of its employees, consultants or independent contractors for any wages, salaries, commissions, bonuses or other direct compensation for any services performed for it to the date hereof, except where such a
delinquency would not reasonably be expected to have a Material Adverse Effect. 
 (k) Affiliate Arrangements. There are
no contractual arrangements or obligations owed to or by the Company and its Subsidiaries by or to any Affiliate other than this Note, the Existing Note, and obligations to employees and officers for (i) payment of salary and commissions and
bonuses for services rendered, (ii) reimbursement for reasonable expenses incurred on its behalf and (iii) other standard employee benefits made generally available to all employees. 

(l) Permits and Licenses. The Company and its Subsidiaries have all permits, licenses and any similar authority necessary for the
conduct of their Business, the lack of which could reasonably be expected to have a Material Adverse Effect. The Company and its Subsidiaries are not in default in any material respect under any of such permits, licenses or other similar authority.

 7. Affirmative Covenants. So long as any indebtedness under this Note remains outstanding, the Company shall, and
shall cause each of its Subsidiaries to: 
 (a) Compliance with Laws. Comply in all material respects with applicable
laws, rules, regulations and orders, such compliance to include, without limitations, paying before the same become delinquent all taxes, assessments, and charges imposed upon it or upon its property by any Governmental Authority except for good
faith contests for which adequate reserves are being maintained. 
 (b) Insurance. Carry and maintain in full force and
effect, at its own expense and with financially sound and reputable insurance companies, insurance in such amounts, with such deductibles and covering such risks as is customarily carried by companies engaged in the same or similar businesses and
owning similar properties in the localities where the Company or any such Subsidiary operates. 

  
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 (c) Continuance of Business. Maintain its legal existence, licenses and privileges in
good standing under and in compliance with all applicable laws and continue to operate its business as currently conducted. Without limiting the generality of the foregoing, the Company and its Subsidiaries shall do and cause to be done all things
necessary to apply for, preserve, maintain and keep in full force and effect all of its registrations of trademarks, service marks and other marks, trade names and other trade rights, patents, copyrights and other intellectual property in accordance
with prudent business practices. 
 (d) Maintenance. Conduct its business in a manner consistent with relevant industry
standards, keep its material assets and properties in good working order and condition and make all needful and proper repairs, replacements and improvements thereof so that such business may be properly and prudently conducted at all times.

 (e) Leases. Pay when due all rents and other amounts payable under any leases to which the Company or any Subsidiary
is a party or by which the Company or such Subsidiary’s properties and assets are bound, unless such payments are the subject of a permitted protest. 
 (f) Books and Records. Keep adequate records and books of account, in which complete entries will be made in accordance with GAAP, reflecting all financial transactions of the Company and any such
Subsidiary. 
 (g) Inspection. At any reasonable time and from time to time permit Holder or any of its agents or
representatives to visit and inspect any of the properties of the Company and any such Subsidiary and to examine and make copies of and abstracts from the records and books of account of the Company and such Subsidiary, and to discuss the business
affairs, finances and accounts of the Company and such Subsidiary with any of the officers, employees or accountants of such Loan Party and such Subsidiary. The Company hereby irrevocably authorizes all accountants and third parties to disclose and
deliver to Holder at the Company’s expense all financial information, books and records, work papers, management reports and other information in their possession relating to the Company whether verbally, in writing (by record or authenticated
record) or otherwise. 
 (h) Notice of Litigation. Provide to Holder promptly after the filing or commencement thereof,
notice of all actions, suits, and proceedings before any court or Governmental Authority affecting the Company or any such Subsidiary, and in any event within three (3) days after the occurrence thereof, which could have a Material Adverse
Effect. 
 (i) Notice of Material Adverse Effect, Etc. So long as any amount payable hereunder shall remain unpaid,
furnish to Holder: (i) prompt written notice, and in any event within three (3) days after the occurrence thereof, of any other condition or event, which has resulted, or that could reasonably be expected to result, in a Material Adverse
Effect; and (ii) such other statements, lists of property and accounts, budgets, forecasts, projections, reports, or other information respecting the operations, properties, business or condition (financial or otherwise) of the Company or any
Subsidiary as Holder may from time to time reasonably request; provided that any such information shall be kept confidential and will be subject to the terms and conditions of a non-disclosure agreement between the parties. 

  
 -11-

 (j) Notice of Defaults and Events of Defaults. Provide to Holder, as soon as possible
and in any event within three (3) days after the occurrence thereof, written notice of each event which either (i) is an Event of Default, or (ii) with the giving of notice or lapse of time or both would constitute an Event of
Default, in each case setting forth the details of such event and the action which is proposed to be taken by the Company and any such Subsidiary with respect thereto. 
 (k) Taxes. Pay and discharge (i) all federal and other material taxes, fees, assessments and governmental charges or levies imposed upon it or upon its properties or assets prior to the date
on which penalties attach thereto, and all lawful claims for labor, materials and supplies which, if unpaid, might become a Lien upon any of its properties or assets, except to the extent such taxes, fees, assessments or governmental charges or
levies, or such claims, are being contested in good faith by appropriate proceedings and are adequately reserved against or disclosed in accordance with GAAP; and (ii) all other lawful claims which, if unpaid, would by law become a Lien upon
its property not constituting a Permitted Lien. 
 (l) Governmental Approvals. Promptly obtain and maintain any and all
authorizations, consents, approvals, licenses, franchises, concessions, leases, rulings, permits, certifications, exemptions, filings or registrations by or with any Governmental Authority material and necessary for the Company and any such
Subsidiary to conduct its business and own (or lease) its properties or to execute, deliver and perform this Note. 
 (m)
Preliminary Annual Financial Statements. If Seth Hamot is no longer a member of Parent’s board of directors, provide Holder as soon as possible after the end of each fiscal year of the Company, and in any event within sixty
(60) days of the end of the Company’s fiscal year, preliminary year end financial statements, including but not limited to, the balance sheet and income statement for such year. 

(n) Reviewed Annual Financial Statements. If Seth Hamot is no longer a member of Parent’s board of directors, provide Holder
as soon as possible after the end of each fiscal year of the Company, and in any event within one hundred twenty (120) days of the end of the Company’s fiscal year: 
 (i) a complete copy of the Company’s financial statements, including but not limited to (1) the management letter, if any; (2) the balance sheet as of the close of the fiscal year; and
(3) the income statement for such year, together with a statement of cash flows, reviewed by a firm of independent certified public accountants of recognized standing and acceptable to Holder, or if permitted by Holder in writing, by the
Company. 
 (ii) a statement certified by the chief financial officer of the Company that the Company is in compliance with all
the terms, conditions, covenants, and warranties of this Note; and 
 (iii) a complete copy of all filings required under
securities law. 
 So long as the Company files its Annual Report on Form 10K with the Securities Exchange Commission within the
required timelines, the Company will not be required to additionally provide the items under the above Sections 7(n) (i) through (iii). 

  
 -12-

 (o) Other Financial Statements. No later than thirty (30) days after the close
of each month (each, an “Accounting Period”), if Seth Hamot is no longer a member of Parent’s board of directors, provide Holder with the balance sheet of the Company as of the close of such Accounting Period and its income
statement for that portion of the then current fiscal year through the end of such Accounting Period certified by each of the chief executive officer and the chief financial officer of the Company as being complete, correct, and fairly representing
its financial condition and the results of operations. 
 (p) Tax Returns. If Seth Hamot is no longer a member of
Parent’s board of directors, provide Holder copies of each of the Company’s federal income tax returns, and any amendments thereto, within one hundred twenty (120) days after the end of the Company’s fiscal year or within the
extension periods provided by the Internal Revenue Service. 
 (q) Fees and Expenses. Pay the out-of-pocket fees and
expenses incurred by Holder in connection with the preparation and administration of this Note and any amendments, modifications or waivers of the provisions hereof, including attorneys’ fees. Such fees will be indebtedness under this Note, and
shall be due and payable on the date hereof. 
 8. Negative Covenants. So long as Obligations under this Note remain
outstanding, the Company shall not, and, with respect to paragraphs (a) through (g) below, shall not permit any of its Subsidiaries to: 
 (a) Liens. Create or suffer to exist any Lien on any assets of the Company or any such Subsidiary except Permitted Liens. 
 (b) Debt. Incur any Debt other than Permitted Debt; prepay, redeem, purchase, defease or otherwise satisfy in any manner prior to the scheduled repayment thereof any Permitted Debt (other than
amounts due or permitted to be prepaid in respect of this Note, the Existing Note, and Debt permitted by clauses (vi) and (x) of the definition of Permitted Debt); or amend, modify or otherwise change the terms of any Permitted Debt (other
than this Note, the Existing Note, and Debt permitted by clause (vi) of the definition of Permitted Debt) so as to accelerate the scheduled repayment thereof or increase the principal amount of such Permitted Debt. 

(c) Restrictions on Fundamental Changes. Enter into any acquisition, merger, consolidation, reorganization, or recapitalization,
or reclassify its capital stock, or liquidate, wind up, or dissolve itself (or suffer any liquidation or dissolution), become a partner in a partnership, a member or equityholder of a joint venture, limited liability company or similar entity, or
convey, sell, assign, lease, license, transfer, or otherwise dispose of, in one transaction or a series of transactions, all or any substantial part of its business, property, or assets (including shares of capital stock of the Company or any of its
Subsidiaries), whether now owned or hereafter acquired, or acquire by purchase or otherwise all or substantially all of the properties, assets, stock, or other evidence of beneficial ownership of any Person. 

(d) Extraordinary Transactions and Disposal of Assets. Enter into any transaction not in the ordinary course of the Business,
including the sale, lease, license, moving, relocation, transfer or other disposition, whether by sale or otherwise, of any of the assets of the 

  
 -13-

 
Company or its Subsidiaries except for sales of inventory in the ordinary course of business or except as expressly permitted by this Note. 

(e) Change Name. Change the name of the Company or any of its Subsidiaries, Federal Employer Identification Number, business
structure, or identity, or add any new fictitious name. To that effect, the Company shall not do business under any name other than the correct legal name of the Company and its Subsidiaries, unless the Company has provided to Holder evidence that
Company or such Subsidiary has taken such legal steps required with respect to fictitious or assumed names under the applicable laws of the jurisdictions in which the Company or such Subsidiary is located and/or does business. 

(f) Changes in Business. Enter into or engage in any business other than that carried on (or contemplated to be carried on) as of
the date hereof. 
 (g) Distributions. Declare or pay any dividends or make any distribution of any kind on the
Company’s or any such Subsidiary’s capital stock, or purchase, redeem or otherwise acquire, directly or indirectly, any shares of the Company’s or such Subsidiary’s capital stock, any rights to acquire shares of capital stock of
the Company or such Subsidiary, except for the repurchase of such securities from former employees of or consultants to the Company or such Subsidiary at the original issue price paid therefor pursuant to contractual rights of the Company or such
Subsidiary upon the termination of such employees’ or consultants’ employment by or provision of service to the Company or such Subsidiary. 
 (h) Amendment of Organic Documents. Amend, supplement, or otherwise modify any of the provisions of the Organic Documents of the Company. 

(i) Investments. Make any Investments except Permitted Investments. 

(j) Accounting Changes. Change its fiscal year or make or permit any change in accounting policies or reporting practices, except
as required by GAAP or mandated by the Securities Exchange Commission or other regulatory bodies. 
 (k) Subsidiaries.
Organize, create or acquire any Subsidiary. 
 (l) Transactions with Affiliates. Directly or indirectly enter into or
permit to exist any material transaction with any of its Affiliates except for transactions that are in the ordinary course of the business of the Company or unanimously approved by the Parent’s board of directors, upon fair and reasonable
terms, that are fully disclosed to Holder prior to the entering of such transactions, and that are no less favorable to the Company than would be obtained in arm’s length transaction with a non-Affiliate. 

(m) Management. Make any significant change in its management without a minimum thirty (30) days’ prior written notice
to Holder unless otherwise inpracticable. 
 (n) Suspension. Suspend or cease operations with respect to a substantial
portion of its business except as unanimously approved by the Parent’s board of directors. 

  
 -14-

 9. Use of Proceeds. The Company shall use the proceeds from the amounts loaned to the
Company under this Note for general working capital and other lawful corporate purposes. 
 10. Default. 

(a) 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 (A) any covenant, obligation or agreement of the Company contained in Sections 7 or 8, or (B) any other provision of this Note, and, in the case of this clause (B), such default shall continue
uncured for a period of ten (10) days; 
 (iii) any representation, warranty or certification made herein by or on behalf
of the Company or any of its Subsidiaries shall prove to have been false or incorrect in any material respect on the date or dates as of which made (any such falsity being a “Representation Default”); 

(iv) 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; 
 (v) the Company shall (i) liquidate, wind up or dissolve (or
suffer any liquidation, wind-up or dissolution), except to the extent expressly permitted by Section 8, (ii) suspend its operations other than in the ordinary course of business, or (iii) take any action to authorize any of the
actions or events set forth above in this Section 10(a)(v); 
 (vi) the Company or any Subsidiary (i) fails to make
any payment beyond the applicable grace period, if any, whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise, (a) under the BFI Loan Documents, (b) under the Existing Note or (c) in respect of any
Debt (other than the Debt hereunder, the Debt under the BFI Loan Documents and the Debt under the Existing Note) having an aggregate outstanding principal amount (individually or in the aggregate with all other Debt as to which such a failure shall
exist) of not less than $5,000, (ii) fails to observe or perform any other agreement or condition relating 

  
 -15-

 
to (a) the BFI Loan Documents, (b) the Existing Note or (c) any such Debt described in clause (i)(c) above, or any other event occurs, the effect of which default or other
event is to cause, or to permit the holder or holders of the BFI Loan Documents, Existing Note or any such Debt described in (i)(c) above (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with
the giving of notice if required, the Debt under the BFI Loan Documents, the Debt under the Existing Note or the Debt described in (i)(c) above to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise);

 (vii) any final judgment or judgments for the payment of money shall be rendered against the Company in excess of $5,000
which judgments are not, within thirty (30) days after the entry thereof, bonded, discharged or stayed pending appeal, or are not discharged within thirty (30) days after the expiration of such stay, other than any judgment which is
covered by insurance or an indemnity from a credit worthy party; provided that the Company provides Holder a written statement from such insurer or indemnity provider (which written statement shall be reasonably satisfactory to Holder) to the
effect that such judgment is covered by insurance or an indemnity and the Company will receive the proceeds of such insurance or indemnity within 30 days of the issuance of such judgment; or 

(viii) 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. 
 (b) Consequences of Events of Default. 

(i) If any Event of Default shall occur for any reason, whether voluntary or involuntary, and be continuing, 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 Agreement, 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. 
 11. 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. 

  
 -16-

 12. 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. 

13. 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. 
 14.
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. 
 15. 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

  
 -17-

			
		 	 San Diego, CA 92130-2006

Facsimile No.: (858) 509-3691
 Attention: John
Hentrich, Esq.

		
	If to Holder:	 	 Costa Brava Partnership III, L.P.
 c/o Roark, Rearden & Hamot, LLC
 420 Boylston St, Suite 5-F

Boston, MA 02116
 Facsimile No.: (617)
267-6785
 Telephone No.: (617) 595-4405

Attention: Seth W. Hamot, President

		
	With a copy to:	 	 Ropes & Gray LLP
 Prudential Tower
 800 Boylston Street
 Boston, MA 02199
 Facsimile No.: (617) 951-7050

Attention: David A. Fine, Esq. and Jeffrey R. Katz, Esq.

 16. 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. 
 17. 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. 
 18. 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. 
 19. 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. 

  
 -18-

 20. 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 (except with respect to Section 16) and interest charged hereunder shall be determined by a court of competent jurisdiction to be a “financial benefit” for purposes of 8
§ 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. 

21. 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). 
 22. 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. 
 23. 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. 
 24. 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 

  
 -19-

 
Business Finance and Holder dated as of March 19, 2010, as amended or modified from time to time. 
 25. Effect of this Note. This Note amends and restates in its entirety the Original Promissory Note. 
 [Remainder of Page Intentionally Left Blank] 

  
 -20-

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

			
	THE COMPANY:
	
	SPY OPTIC INC.,
	 FORMERLY KNOWN AS

ORANGE 21 NORTH AMERICA INC.

		
	By:	 	 /s/ Michael Angel

	Name:	 	 Michael Angel

	Title:	 	 CFO

	
	HOLDER:
	
	COSTA BRAVA PARTNERSHIP III, L.P.
		
	By:	 	 /s/ Seth W. Hamot

	Name:	 	 Seth W. Hamot

	Title:	 	 Managing Member of GP of the LP

 Signature Page to 
 Revolver Promissory Note - Costa Brava 

 SCHEDULE A 

Debt 
 See
attached. 
 SCHEDULE A 

Spy Inc and Subsidiaries 
 Schedule A
- Part I 
 Operating Leases 
  

																							
	 Lessor
	  	 Description
	  	Lease
Inception	 	  	Lease End	 	  	Year	 	  	Months	 	  	Monthly
Rent	 
	 Hasler Financial Services, LLC
	  	 Postage Machine
	  	 	05/17/07	  	  	 	month to month	  	  				  				  	$	612	  
	 Hasler Financial Services, LLC
	  	 Postage Machine Sorter
	  	 	10/19/07	  	  	 	10/18/12	  	  	 	5	  	  	 	0	  	  	$	89	  
		  		  				  				  				  				  			
	 Lloyd Wells Gift Trust
	  	 Carlsbad Facility Lease
	  	 	11/01/10	  	  	 	12/31/13	  	  	 	3	  	  	 	1	  	  	$	28,319	  
	 536668 B.C. Ltd
	  	 Canadian Office Lease
	  	 	02/14/12	  	  	 	02/28/13	  	  	 	1	  	  				  	C$	667	  

 Spy Inc and Subsidiaries 
 Schedule A - Part II 
 Capital Leases 

Capital Lease Disclosure: 
 Future
minimum payments required under capital lease: 
  

																													
	 	  	For years ending,	 
	 Description 
	  	2011 	 	 	2012	 	  	2013	 	  	2014	 	  	2015	 	  	Thereafter	 	  	Total	 
	 CISCO Phone System
	  	 	30,289	  	 	 	30,289	  	  	 	10,096	  	  				  				  				  	 	70,674	  
	 GE Capital
	  	 	22,323	  	 	 	38,268	  	  	 	38,268	  	  	 	38,268	  	  	 	38,268	  	  	 	15,945	  	  	 	191,340	  
		  				 				  				  				  				  				  	 	—  	  
		  				 				  				  				  				  				  	 	—  	  
		  				 				  				  				  				  				  	 	—  	  
		  	  
	  
	 	 	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
		  	 	52,612	    x1 	 	 	68,557	  	  	 	48,364	  	  	 	38,268	  	  	 	38,268	  	  	 	15,945	  	  	 	262,014	  
	 less interest
	  	 	9,468	  	 	 	10,240	  	  	 	6,667	  	  	 	4,451	  	  	 	2,244	  	  	 	250	  	  	 	33,319	  
		  	  
	  
	 	 	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Principal payments for capital leases
	  	 	43,144	  	 	 	58,317	  	  	 	41,697	  	  	 	33,817	  	  	 	36,024	  	  	 	15,695	  	  	 	228,695	  

 Spy Inc and Subsidiaries 
 Schedule A - Part III 
 Debt 

 

																					
	 	 	  	 	  	Debt	 
	 	 	  	 Description (lender, interest rate, maturity date, etc.)
	  	Beginning
Balance	 	  	Additions	 	  	Payments	 	 	Ending
Balance
12/31/11	 
						
	 	1.	  	  	 BFI (LOC), PF D8, D8A, Prime+2.5% not less than $2K/month
	  	 	2,069,534	  	  	$	25,741,479.51	  	  	($	25,327,357.82	) 	 	$	2,483,655	  
	 	2.	  	  	 Costa Brava, PF D13 series, 12%, matures 06/30/13
	  	 	7,000,000	  	  	 	—  	  	  	 	—  	  	 	$	7,000,000	  
	 	3.	  	  	 Costa Brava, 9%, matures 06/30/13
	  	 	—  	  	  	 	6,000,000	  	  	 	—  	  	 	$	6,000,000	  
	 	4.	  	  	 Banca Popolare di Bergamo (LOC); 3.504%; guaranteed by Eurofidi
	  	 	164,669	  	  				  	 	(164,669	) 	 	$	—  	  
	 	5.	  	  	 Nissan Titan, PF D14, 4.69%, 12/11/15
	  	 	37,369	  	  	 	—  	  	  	 	(6,779	) 	 	$	30,590	  
	 	6.	  	  	 Nissan Titan, PF D15, 4.69%, 12/11/15
	  	 	37,369	  	  	 	—  	  	  	 	(6,779	) 	 	$	30,590	  
				  		  				  				  				 	$	—  	  
						
	 	Totals	  	  		  	$	9,308,941	  	  	$	31,741,480 	  	  	$	(25,505,585	) 	 	$	15,544,835	  
				  		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	 	  
	  
	 
	 	Balance Per FS	  	  		  	 	9,308,941 	  	  				  				 	 	15,544,835	  
	 	Check	  	  		  	 	0	  	  				  				 	 	0	  

 SCHEDULE B 

Liens 

See attached. 

SCHEDULE B 
 Spy Inc

 Schedule B 
 Permitted
Liens 
  

							
	 Subsidiary
	 	 Lending Institution
	 	 Type of Lien
	 	 Guaranteed/Secured by

	 Spy Optic Inc
	 	Various	 	Capital Leases	 	Leased Assets
	 Spy Optic Inc and Spy Optic Europe, S.r.l. SU
	 	Various	 	Operating Leases	 	Leased Assets
	 Orange 21 Europe, S.r.l.
	 	Banca Popolare di Bergamo	 	Line of Credit	 	Eurofidi
	 Spy Optic Inc
	 	Nissan	 	Note Payable	 	Secured by vehicles
	 Spy Optic Inc
	 	BFI	 	Line of Credit	 	Secured by substantially all of the assets of Orange 21 North America and guaranteed by Orange 21 Inc.
	 Spy Optic Inc
	 	Costa Brava	 	Line of Credit	 	

 SCHEDULE C 

Schedule of Exceptions 
  

	1.	Building is not in good repair. 

  

	2.	The Company is late to certain vendors. 

  

	3.	Maintenance is not in good repair. 

  

	4.	All risks and facts disclosed in the Company’s Form 10-K for the period ending December 31, 2011 (filed March 20, 2012), Form 10-Q for the period ending
March 31, 2012 (filed May 10, 2012), and Forms 8-K filed subsequent to the filing date of the aforementioned Form 10-K. 

 SCHEDULE C<![CDATA[Amended & Restated 2001 Equity Incentive Plan]]>

 Exhibit 4.1 
 JAMES HARDIE INDUSTRIES SE 
 2001 EQUITY INCENTIVE PLAN 

Amended and Restated 
 (as of 16 August 2011) 
 ARTICLE I 

PURPOSE OF PLAN 
 The Company adopted this Plan to promote the interests of the Company and its stockholders by using investment interests in the Company to attract, retain and motivate its and its Affiliated
Entities’ employees and management. Capitalized terms not otherwise defined herein have the meanings ascribed to them in Article VII. 
 ARTICLE II 
 EFFECTIVE DATE AND TERM OF PLAN 

2.1 Term of Plan. This Plan originally became effective on September 26, 2001, the date the Plan was adopted by the Board.
The amended and restated Plan shall become effective if, and at such time as, the stockholders of the Company have approved it in accordance with applicable law and stock exchange requirements and will continue in effect until the Expiration Date,
at which time this Plan will automatically terminate. 
 2.2 Effect on Awards. Awards may be granted only during the Plan
Term, but each Award granted during the Plan Term will remain in effect after the Expiration Date until such Award has been exercised or terminated or expires in accordance with its terms and the terms of this Plan. 

ARTICLE III 

SHARES SUBJECT TO PLAN 
 3.1 Board Authorization. 
 (a) On September 26, 2001, the Joint Board
resolved to: (i) authorize and approve the adoption of the Plan; (ii) establish the Committee to administer the Plan, including granting Awards covering Plan Shares under the Plan to Eligible Persons, (iii) appoint Alan McGregor,
Martin Koffel and Meredith Hellicar as initial members of the Committee, and (iv) reserve 45,077,100 shares of Common Stock for issuance upon exercise of Awards, effective immediately following the submission of the declaration referred to in
article 52.3 of the Company’s articles of association with the chamber of commerce and industries for Amsterdam (the “Plan Shares”). 

  

 (b) On August 9, 2002, the authority to issue shares in the Company and to grant rights
to subscribe for shares (including pursuant to the Plan) was transferred from the Joint Board to the Supervisory Board. 
 (c)
On November 11, 2003, the Board resolved to appoint the Remuneration Committee of the Board to be the Administrator of the Plan and to amend and restate this Plan to (i) provide for the reduction of the exercise price of Stock Options and
other Awards granted under this Plan in the event of a capital return by the Company, and (ii) clarify the intent and terms of this Plan. As a result of the discretion granted to the Administrator in this Plan and the benefits and
considerations provided to Recipients, this Amendment did not require the written consent of Recipients. This amended and restated Plan shall govern the terms of all Awards granted on or after the original effective date of September 26, 2001.

 (d) On February 19, 2010, this Plan was amended (effective as of such transformation) to reflect the changes necessary,
because the Company was transformed into an Societas Europaea (a European company) governed by Dutch law. 
 (e) On
June 15, 2010, this Plan was amended (effective as of such transformation) to reflect the changes necessary, because the Company was transformed from a Societas Europaea governed by Dutch law to a Societas Europaea governed by
Irish law. 
 (f) On August 16, 2011, this Plan was amended to provide for the grant of Restricted Stock Units and best
corporate governance practices, effective upon the re-approval of the Plan by the Company’s stockholders and to extend the term of the Plan to 2021. 
 3.2 Number of Shares. The maximum number of shares of Common Stock that may be issued pursuant to Awards granted under this Plan is 45,077,100, subject to adjustment as set forth in
Section 3.5; provided, however, that the maximum number of shares of Common Stock that may be offered in Australia (whether such offer is made under an option or otherwise) is equal to the maximum number of shares that may be
offered (whether such offer is made under an option or otherwise) in accordance with applicable Australian law without the need to issue an Australian prospectus, subject to adjustment as set forth in Section 3.5. 

3.3 Source of Shares. The Common Stock to be issued under this Plan will be made available, at the discretion of the
Administrator, either from authorized but unissued shares of Common Stock, or from previously issued shares of Common Stock reacquired by the Company in accordance with Irish law and the Company’s articles of association. 

3.4 Availability of Unused Shares. Shares of Common Stock subject to unexercised portions of any Award that expire, terminate or
are canceled, and shares of Common Stock issued pursuant to an Award that are reacquired by the Company pursuant to the terms of the Award under which such shares were issued, shall, upon such expiration, termination, cancellation or reacquisition,
become available for the grant of further Awards under this Plan as part of the shares available under Section 3.2. In addition, shares of Common Stock subject to an Award that are delivered to or retained by the Company upon exercise to
cover cashless exercise or tax withholding, and any shares of Common Stock underlying an Award that are not issued because the Award is settled in cash, shall be available for grant of further Awards under this Plan as part of the shares available
under Section 3.2. 

  
 2 

 3.5 Adjustment Provisions. 

(a) Adjustments. If the Company consummates any Reorganization in which holders of shares of Common Stock are entitled to
receive in respect of such shares any additional shares or new or different shares or securities, cash or other consideration (including, without limitation, a different number of shares of Common Stock), or if the outstanding shares of Common Stock
are increased, decreased or exchanged for a different number or kind of shares or other securities through merger, consolidation, sale or exchange of assets of the Company, reorganization, re-capitalization, reclassification, combination, stock
dividend, stock split, reverse stock split, spin-off, return of capital, or similar transaction, then, subject to Section 5.15, an appropriate and proportionate adjustment shall be made by the Administrator in: (1) the maximum
number and kind of shares subject to this Plan as provided in Section 3.2; (2) the number and kind of shares or other securities subject to then outstanding Awards; and/or (3) the price for each share or other unit of any other
securities subject to, or measurement criteria applicable to, then outstanding Awards. 
 (b) No Fractional
Interests. No fractional interests will be issued under the Plan resulting from any adjustments. 
 (c)
Adjustments Related to Company Stock. To the extent any adjustments relate to stock or securities of the Company, such adjustments will be made by the Administrator, whose determination in that respect will be final, binding and
conclusive. 
 (d) Right to Make Adjustment. The grant of an Award will not affect in any way the right or power
of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure or to merge or to consolidate or to dissolve, liquidate or sell, or transfer all or any part of its business or assets.

 3.6 Reservation of Shares. The Company will at all times reserve and keep available for issuance shares of Common
Stock equaling at least the total number of shares of Common Stock issuable pursuant to all outstanding Awards with due observance of Section 3.2. 
 ARTICLE IV 
 ADMINISTRATION OF PLAN 

4.1 Administrator. 
 (a) Plan Administration. This Plan will be administered by the Board and may also be administered by a Committee of the Board appointed pursuant to Section 4.1(b). 

(b) Administration by Committee. The Board in its sole discretion may from time to time appoint a Committee of not less
than two (2) Board members with authority to administer this Plan in whole or part and, subject to applicable law, to exercise any or all of the powers, authority and discretion of the Board under this Plan. The Board may from time to time
increase or decrease (but not below two (2)) the number of members of the Committee, remove from membership on the Committee all or any portion of its members, and/or appoint such person or persons as it desires to fill any vacancy existing on
the Committee, whether caused by removal, resignation or otherwise. The Board may disband the Committee at any time. 

  
 3 

 4.2 Authority of Administrator. 

(a) Authority to Interpret Plan. Subject to the express provisions of this Plan, the Administrator will have the power to
implement, interpret and construe this Plan and any Awards and Award Documents or other documents defining the rights and obligations of the Company and Recipients hereunder and thereunder, to determine all questions arising hereunder and
thereunder, and to adopt and amend such rules and regulations for the administration hereof and thereof as it may deem desirable. The interpretation and construction by the Administrator of any provisions of this Plan or of any Award or Award
Document, and any action taken by, or inaction of, the Administrator relating to this Plan or any Award or Award Document, will be within the discretion of the Administrator and will be conclusive and binding upon all persons. Subject only to
compliance with the express provisions hereof, the Administrator may act in its discretion in matters related to this Plan and any and all Awards and Award Documents. 
 (b) Authority to Grant Awards. Subject to the express provisions of this Plan, the Administrator may from time to time in its discretion select the Eligible Persons to whom, and the time or times
at which, Awards will be granted or sold, the nature of each Award, the number of shares of Common Stock or the number of rights that make up or underlie each Award, the exercise price and period (if applicable) for the exercise of each Award, and
such other terms and conditions applicable to each individual Award as the Administrator may determine. Any and all terms and conditions of Awards may be established by the Administrator without regard to existing Awards or other grants and without
incurring any obligation of the Company in respect of subsequent Awards. The Administrator may grant or sell, at any time, new Awards to an Eligible Person who has previously received Awards or other grants (including other stock options) regardless
of the status of such other Awards or grants. The Administrator may grant Awards singly or in combination or in tandem with other Awards as it determines in its discretion. 
 (c) Procedures. Subject to the Company’s constitution or any Board resolution conferring authority on the Committee, any action of the Administrator with respect to the administration of this
Plan must be taken pursuant to a majority vote of the authorized number of members of the Administrator or by the unanimous written consent of its members; provided, however, that (i) if the Administrator is the Committee and consists of
two (2) members, then actions of the Administrator must be unanimous, and (ii) actions taken by the Board will be valid if approved in accordance with Irish law. 
 4.3 No Liability. No member of the Board or the Committee or any designee thereof will be liable for any action or inaction with respect to this Plan or any Award or any transaction arising under
this Plan or any Award except in circumstances constituting bad faith of such member. 
 4.4 Amendments. 

(a) Plan Amendments. The Administrator may at any time and from time to time in its discretion, insofar as permitted by applicable
law, rule or regulation and subject to Section 4.4(c), suspend or discontinue this Plan or revise or amend it in any respect whatsoever, and this Plan as so revised or amended will govern all Awards, including those granted before such
revision or amendment. Without limiting the generality of the foregoing, the Administrator is authorized to amend this Plan to comply with or take advantage of amendments to applicable laws, rules, or regulations of any exchange or market system
upon which the shares of Common Stock are listed or traded, or any rules or regulations promulgated thereunder. No stockholder approval of any amendment or revision will be required unless such approval is required by applicable law, rule or
regulation. 

  
 4 

 (b) Award Amendments. The Administrator may at any time and from time to time in its
discretion, subject to Section 4.4(c) and compliance with applicable statutory or administrative requirements, accelerate or extend the vesting or exercise period of any Award as a whole or in part, and make such other modifications in
the terms and conditions of an Award as it deems advisable. 
 (c) Limitation. Except as otherwise provided in this Plan
or in the applicable Award Document, no amendment, revision, suspension or termination of this Plan or an outstanding Award that would alter, impair or diminish in any material respect any rights or obligations under any Award theretofore granted
under this Plan may be effected without the written consent of the Recipient to whom such Award was granted, provided that no such consent shall be required if the Administrator determines in its sole discretion and prior to the date of any Change
in Control that such amendment or revision either is required or advisable in order for the Company, the Plan or the Award to satisfy any law or regulation or to meet the requirements of any accounting standard, or is not reasonably likely to
diminish the Recipient’s benefits thereunder or that any diminution has been adequately compensated for. 
 4.5 Other
Compensation Plans. The adoption of this Plan will not affect any other stock option, incentive or other compensation plans in effect from time to time for the Company or any Affiliated Entity, and this Plan will not preclude the Company or any
Affiliated Entity from establishing any other forms of incentive or other compensation for their employees or their directors, whether or not approved by stockholders. 
 4.6 Plan Binding on Successors. This Plan will be binding upon the successors and assigns of the Company. 
 4.7 References to Successor Statutes, Regulations and Rules. Any reference in this Plan to a particular statute, regulation or rule will also refer to any successor provision of such statute,
regulation or rule. 
 4.8 Invalid Provisions. In the event that any provision of this Plan is found to be invalid or
otherwise unenforceable under any applicable law, such invalidity or unenforceability is not to be construed as rendering any other provisions contained herein invalid or unenforceable, and all such other provisions are to be given full force and
effect to the same extent as though the invalid and unenforceable provision were not contained herein. 
 4.9 Governing
Law. This Plan will be governed by and interpreted in accordance with the internal laws of the Republic of Ireland, without giving effect to the principles of the conflicts of laws thereof. 

4.10 Interpretation. Headings herein are for convenience of reference only, do not constitute a part of this Plan, and will not
affect the meaning or interpretation of this Plan. References herein to Sections or Articles are references to the referenced Section or Article hereof, unless otherwise specified. For purposes of the Plan, references to the “grant” or
“granting” of Awards shall mean the allocation by the Administrator of Awards covering Plan Shares. 

  
 5 

 ARTICLE V 
 GENERAL AWARD PROVISIONS 
 5.1 Participation in Plan. 

(a) Eligibility to Receive Awards. A person is eligible to receive grants of Awards if, at the time of the grant of the Award, such
person is an Eligible Person. Status as an Eligible Person will not be construed as a commitment that any Award will be granted under this Plan to an Eligible Person or to Eligible Persons generally. 

(b) Awards to Foreign Nationals. Notwithstanding anything to the contrary herein, the Administrator may, in order to fulfill the
purposes of this Plan, modify grants of Awards to Recipients who are foreign nationals or employed outside of Australia to recognize differences in applicable law, tax policy or local custom. 

5.2 Award Documents. 
 (a) Generally. Subject to Section 5.2(b), the grant of each Award must be reflected in an agreement duly executed on behalf of the Company and by the Recipient or, in the
Administrator’s discretion, a confirming memorandum issued by the Company to the Recipient, setting forth such terms and conditions applicable to the Award as the Administrator may in its discretion determine. Awards will not be deemed made or
binding upon the Company, and Recipients will have no rights thereto, until such an agreement is entered into between the Company and the Recipient or such a memorandum is delivered by the Company to the Recipient, but an Award may have an effective
date prior to the date of such an agreement or memorandum. Award Documents may be (but need not be) identical and must comply with and be subject to the terms and conditions of this Plan, a copy of which will be provided to each Recipient and
incorporated by reference into each Award Document. Any Award Document may contain such other terms, provisions and conditions not inconsistent with this Plan as may be determined by the Administrator. In case of any conflict between this Plan and
any Award Document, this Plan shall control. 
 (b) Australian Nationals. In addition to the document referred to in
Section 5.2(a), the Company shall comply with any requirements under Australian law and provide such documents as are necessary to avoid the need for a Disclosure Document. 

5.3 Payment For Awards. 
 (a) Payment of Exercise Price. The exercise price or other payment for an Award is payable upon the exercise of a Stock Option or upon other purchase of shares pursuant to an Award granted
hereunder by delivery of legal tender of Australia or payment of such other consideration as the Administrator may from time to time deem acceptable in any particular instance, including but not limited to delivery of legal tender of the United
States, provided, however, that the Administrator may, in the exercise of its discretion, allow exercise of an Award in a broker-assisted or similar transaction in which the exercise price is not received by the Company until promptly after
exercise. 
 (b) Broker-Assisted Exercises. If permitted by the Administrator and if the Company has established such a
procedure, the exercise price for Awards may be paid through a special sale and remittance procedure pursuant to which the Recipient shall concurrently provide irrevocable instruction to (i) a Company-designated brokerage firm to

  
 6 

 
effect the immediate sale of the purchased shares and remit to the Company, out of sale proceeds available on the settlement date, sufficient funds to cover the aggregate exercise price payable
for the purchased shares of Common Stock, plus all applicable income and employment taxes required to be withheld by the Company by reason of such exercise and (ii) the Company to deliver the certificates for the purchased shares of Common
Stock directly to such brokerage firm in order to complete the sale. 
 (c) Company Assistance. The Company may assist
any Recipient in the payment of the purchase price or other amounts payable in connection with the receipt or exercise of an Award, by lending such amounts to such person on such terms and at such rates of interest (if any) and upon such security
(if any) as may be consistent with applicable law, including but not limited to the Sarbanes-Oxley Act of 2002, and Regulation G promulgated by the Federal Reserve Board, and approved by the Administrator. In case of such a loan, the Administrator
may require that the exercise be followed by a prompt sale of some or all of the underlying shares and that a portion of the sale proceeds be dedicated to full payment of the exercise price and amounts required pursuant to Section 5.10.

 (d) Cashless Exercise. If permitted in any case by the Administrator in its discretion, the exercise price for Awards
may be paid by shares of Common Stock delivered in transfer to the Company by or on behalf of the person exercising the Award and duly endorsed in blank or accompanied by stock powers duly endorsed in blank, with signatures guaranteed in accordance
with the applicable legal statutes if required by the Administrator; or retained by the Company from the securities otherwise issuable upon exercise or surrender of vested and/or exercisable Awards or other equity awards previously granted to the
Recipient and being exercised (if applicable) (in either case valued at Fair Market Value as of the exercise date); or such other consideration as the Administrator may from time to time in the exercise of its discretion deem acceptable in any
particular instance. 
 (e) No Precedent. Recipients will have no rights to the broker-assisted procedure described in
Section 5.3(b), the assistance described in Section 5.3(c) or the exercise techniques described in Section 5.3(d), and the Company may offer or permit such assistance or techniques on an ad hoc basis to any
Recipient without incurring any obligation to offer or permit such assistance or techniques on other occasions or to other Recipients. 
 5.4 No Employment Rights. Nothing contained in this Plan (or in Award Documents or in any other documents related to this Plan or to Awards) will confer upon any Eligible Person or Recipient any
right to continue in the employ of or engagement by the Company or any Affiliated Entity or constitute or form part of any contract or agreement of employment or engagement, or interfere in any way with the right of the Company or any Affiliated
Entity to reduce such person’s compensation or other benefits or to terminate the employment or engagement of such Eligible Person or Recipient, with or without cause. Except as expressly provided in this Plan or in any statement evidencing the
grant of an Award, the Company has the right to deal with each Recipient in the same manner as if this Plan and any such statement evidencing the grant of an Award did not exist, including, without limitation, with respect to all matters related to
the hiring, discharge, compensation and conditions of the employment or engagement of the Recipient. Unless otherwise set forth in a written agreement binding upon the Company or an Affiliated Entity or required by applicable law, all employees of
the Company or an Affiliated Entity are “at will” employees whose employment may be terminated by the Company or the Affiliated Entity at any time for any reason or no reason, without payment or penalty of any kind. Any question(s) as to
whether and when there has been a termination of a Recipient’s employment or engagement, 

  
 7 

 
the reason (if any) for such termination, and/or the consequences thereof under the terms of this Plan or any statement evidencing the grant of an Award pursuant to this Plan will be determined
by the Administrator and the Administrator’s determination thereof will be final and binding. 
 5.5 Restrictions Under
Applicable Laws and Regulations. 
 (a) Government and Other Approvals. All Awards will be subject to the requirement
that, if at any time the Company determines, in its discretion, that the listing, registration or qualification of the securities subject to Awards granted under this Plan upon any securities exchange or inter-dealer quotation system or under any
Australian or foreign law, or the consent of the members of the Company or approval of any government or regulatory body (including any stock exchange on which the Company’s securities are listed), is necessary or desirable or required by law
or any listing rules of any relevant stock exchange as a condition of, or in connection with, the granting of such an Award or the issuance, if any, or purchase of securities subject to an Award granted under this Plan, such Award may not be
exercised as a whole or in part unless and until such listing, registration, qualification, consent or approval has been effected or obtained free of any conditions not acceptable to the Company. During the term of this Plan, the Company will use
its reasonable efforts to seek to obtain from the appropriate governmental and regulatory agencies (including any relevant stock exchange) any requisite qualifications, consents, approvals or authorizations in order to issue and sell such number of
shares of its Common Stock as is sufficient to satisfy the requirements of this Plan. The inability of the Company to obtain any such qualifications, consents, approvals or authorizations will relieve the Company of any liability in respect of the
non-issuance or sale of such stock as to which such qualifications, consents, approvals or authorizations pertain. 
 (b) No
Registration Obligation; Recipient Representations. The Company will be under no obligation to register or qualify the issuance of Awards or underlying securities under the applicable securities laws (unless required by such laws). Unless the
issuance of Awards and underlying securities have been registered under applicable securities laws, the Company shall be under no obligation to issue any Awards or underlying securities unless the Awards and underlying securities may be issued
pursuant to applicable exemptions from such registration or qualification requirements. In connection with any such exempt issuance, the Administrator may require the Recipient to provide a written representation and undertaking to the Company,
satisfactory in form and scope to the Company, that such Recipient is acquiring such Awards and underlying securities for such Recipient’s own account as an investment and not with a view to, or for sale in connection with, the distribution of
any such securities, and that such person will make no transfer of the same except in compliance with any rules and regulations in force at the time of such transfer under applicable law, and that if securities are issued without registration, a
legend to this effect (together with any other legends deemed appropriate by the Administrator) may be endorsed upon the securities so issued, and to the effect of any additional representations that are appropriate in light of applicable securities
laws and rules. The Company may also order its transfer agent to stop transfers of such shares. The Administrator may also require the Recipient to provide the Company such information and other documents as the Administrator may request in order to
satisfy the Administrator as to the investment sophistication and experience of the Recipient and as to any other conditions for compliance with any such exemptions from registration or qualification. 

  
 8 

 (c) Compliance with Laws. Any offer of Awards, any announcement thereof and all offer
notices, publications, advertisements and other documents, such as Award Documents, in which an offer of an Award is made or a forthcoming offer is announced, will (i) be in compliance with the applicable laws, rules and regulations of the
jurisdictions in which the persons to whom the offer is directed are established, domiciled or resident and (ii) only be directed to Eligible Persons. In addition, in an Award Document, the Recipient may be required to represent that he or she
is an Eligible Person. Any offer of Awards by the Company shall, or receipt, purchase or exercise of Awards or Plan Shares by a Recipient, or sale or other disposition of Plan Shares by a Recipient should comply with the Company’s insider
trading policy or policies and all applicable insider trading laws, rules and regulations. 
 5.6 Additional Conditions.
Any Award may also be subject to such other provisions (whether or not applicable to any other Award or Recipient) as the Administrator deems appropriate, including without limitation provisions for the forfeiture of or restrictions on resale,
transfer or other disposition of securities of the Company acquired under this Plan, provisions giving the Company the right to repurchase securities of the Company acquired under this Plan in the event the Recipient leaves the Company for any
reason or elects to effect any disposition thereof, and provisions to comply with applicable securities laws. 
 5.7 No
Privileges re Stock Ownership or Specific Assets. Except as otherwise set forth herein, a Recipient or a permitted transferee of an Award will have no rights as a shareholder with respect to any shares issuable or issued in connection with the
Award until the Recipient has delivered to the Company all amounts payable and performed all obligations required to be performed in connection with exercise of the Award and the Company has issued such shares. No person will have any right, title
or interest in any fund or in any specific asset (including shares of Common Stock) of the Company by reason of any Award granted hereunder. Neither this Plan (or any documents related hereto) nor any action taken pursuant hereto is to be construed
to create a trust of any kind or a fiduciary relationship between the Company and any person. To the extent that any person acquires a right to receive an Award hereunder, such right shall be no greater than the right of any unsecured general
creditor of the Company. 
 5.8 Non-assignability. No Award is assignable or transferable except: (a) by will or by
the laws of descent and distribution; or (b) upon dissolution of marriage pursuant to a qualified domestic relations order or similar order by a court of competent jurisdiction or, in the discretion of the Administrator and under circumstances
that would not adversely affect the interests of the Company, transfers for estate planning purposes or pursuant to a nominal transfer that does not result in a change in beneficial ownership. During the lifetime of a Recipient, an Award granted to
such person will be exercisable only by the Recipient (or the Recipient’s permitted transferee) or such person’s guardian or legal representative. 
 5.9 Information To Recipients. 
 (a) Provision of Information. The
Administrator in its sole discretion may determine what, if any, financial and other information is to be provided to Recipients and when such financial and other information is to be provided after giving consideration to applicable laws, rules and
regulations. 

  
 9 

 (b) Confidentiality. The furnishing of financial and other information that is
confidential to the Company is subject to the Recipient’s agreement to maintain the confidentiality of such financial and other information, and not to use the information for any purpose other than evaluating the Recipient’s position
under this Plan. The Administrator may impose other restrictions on the access to and use of such confidential information and may require a Recipient to acknowledge the Recipient’s obligations under this Section 5.9(b) (which
acknowledgment is not to be a condition to the Recipient’s obligations under this Section 5.9(b)). 
 5.10
Withholding Taxes. Whenever the granting, vesting or exercise of any Award, or the issuance of any securities upon exercise of any Award or transfer thereof, gives rise to tax or tax withholding liabilities or obligations, the Administrator will
have the right as a condition thereto to require the Recipient to remit to the Company an amount sufficient to satisfy any applicable statutory withholding tax requirements arising in connection therewith. The Administrator may, in its discretion,
allow satisfaction of tax withholding requirements by accepting delivery of shares of Common Stock of the Company or by withholding a portion of the shares of Common Stock otherwise issuable in connection with an Award, in each case valued at Fair
Market Value as of the date of such delivery or withholding, as the case may be, is determined. 
 5.11 Legends on Awards and
Stock Certificates. Each Award Document and each certificate (if any) representing securities acquired upon vesting or exercise of an Award must be endorsed with all legends, if any, required by applicable securities and other laws to be placed
on the Award Document and/or the certificate (if any). The determination of which legends, if any, will be placed upon Award Documents or the certificates will be made by the Administrator in its discretion and such decision will be final and
binding. 
 5.12 Effect of Termination of Employment on Awards. 

(a) Alteration of Vesting and Exercise Periods. Notwithstanding anything to the contrary herein, the Administrator may in its
discretion (i) designate shorter or longer periods following a Recipient’s termination of employment during which Awards may vest or be exercised; provided, however, that any shorter periods determined by the Administrator will be
effective only if provided for in this Plan or the instrument that evidences the grant to the Recipient of the affected Award or if such shorter period is agreed to in writing by the Recipient, and (ii) accelerate the vesting of all or any
portion of any Awards by increasing the number of shares purchasable at any time. 
 (b) Leave of Absence. In the case of
any employee on an approved leave of absence, the Administrator may make such provision respecting continuance of Awards granted to such employee as the Administrator in its discretion deems appropriate, except that in no event will an Award be
exercisable after the date such Award would expire in accordance with its terms had the Recipient remained continuously employed. 
 (c) General Cessation. Except as otherwise set forth in this Plan or an Award Document or as determined by the Administrator in its discretion, all Awards granted to a Recipient, and all of such
Recipient’s rights thereunder, will terminate upon termination for any reason of such Recipient’s employment with the Company or any Affiliated Entity. 
 5.13 Restrictions on Common Stock and Other Securities. Common Stock or other securities of the Company issued or issuable in connection with any Award will be subject to all of the restrictions
imposed under this Plan upon Common Stock issuable or issued upon exercise of Stock Options, except as otherwise determined by the Administrator. 

  
 10 

 5.14 Cancellation and Rescission of Awards. Unless an Award Document or other
separate written agreement binding upon the Company provides otherwise, the Administrator may cancel any unexpired, unpaid or deferred Award (whether or not vested) at any time if the Recipient thereof fails at any time to comply with all applicable
provisions of the Award Document or this Plan. 
 5.15 Effect of Change in Control. Unless otherwise set forth in an
Award Document or in this Section 5.15, as of the effective time and date of any Change in Control, this Plan and any then outstanding Awards (whether or not vested) will automatically terminate unless: (a) provision is made in
writing in connection with such transaction for the continuance of this Plan and for the assumption of such Awards, or for the substitution for such Awards of new awards covering the securities of a successor entity or an affiliate thereof, on no
less favorable terms and with appropriate adjustments as to the number and kind of securities and exercise prices or other measurement criteria, in which event this Plan and such outstanding Awards will continue or be replaced, as the case may be,
in the manner and under the terms so provided; or (b) the Board otherwise provides in writing for such adjustments as it deems appropriate in the terms and conditions of the then-outstanding Awards (whether or not vested), including, without
limitation, (i) accelerating the vesting of outstanding Awards, and/or (ii) providing for the cancellation of Awards and their automatic conversion into the right to receive the securities, cash or other consideration that a holder of the
shares underlying such Awards would have been entitled to receive upon consummation of such Change in Control had such shares been issued and outstanding immediately prior to the effective date and time of the Change in Control (net of the
appropriate option exercise prices). If, pursuant to the foregoing provisions of this Section 5.15, this Plan and the Awards terminate by reason of the occurrence of a Change in Control without provision for any of the action(s)
described in clause (a) or (b) hereof, then subject to Section 5.12, Section 5.16 and Section 6.1(e), any Recipient holding outstanding Awards will have the right, at such time prior to the consummation
of the Change in Control as the Board designates, to exercise or receive the full benefit of the Recipient’s Awards to the full extent not theretofore exercised, including any installments which have not yet become vested. 

5.16 Termination of Employment in Connection With a Change in Control. 

(a) Acceleration of Awards. Unless otherwise set forth in an Award Document, if a Change in Control occurs and provision for
Awards is made as described in part (a) or (b) of Section 5.15 such that a Recipient continues to own Awards or replacement awards, but in connection with such Change in Control and without any circumstances that would justify
a Just Cause Dismissal of the Recipient, the Recipient’s employment with the Company or an Affiliated Entity is terminated by the Company or an Affiliated Entity as described in Section 5.16(b), then, subject to Sections
5.12, 6.1(e), and 6.3(e) and the terms of any written employment agreement between the Company or any Affiliated Entity and the Recipient, such Recipient will have the right to exercise or receive the full benefit of the
Recipient’s Awards during the applicable time period provided in Sections 5.12, 6.1(e), and 6.3(e) without regard to any vesting or performance requirements or other milestones. 

(b) Employment Termination. For purposes of this Section, and subject to any separate written agreement binding upon the Company,
a Recipient’s employment with the Company or any Affiliated Entity will be deemed to have been terminated in connection with a Change in Control if within two years of the Change in Control: (i) the Recipient is removed from the
Recipient’s employment by, or resigns the Recipient’s employment upon the request of, a Person exercising practical voting control over the Company following the 

  
 11 

 
Change in Control or a person acting upon authority or at the instruction of such Person; or (ii) the Recipient’s position is eliminated as a result of a reduction in force made to
reduce over-capacity or unnecessary duplication of personnel and the Recipient is not offered a replacement position with compensation substantially similar to the compensation in effect immediately before the Change in Control; or (iii) the
Recipient terminates employment because he or she is forced to relocate to a work place more than 50 miles away from his or her work place before the Change in Control. Unless otherwise provided in a written agreement with the Company or any
Affiliated Entity, assignment of a Recipient to different duties or reporting will not be deemed to constitute or justify termination of Recipient’s employment in connection with the Change in Control. 

ARTICLE VI 

AWARDS 

6.1 Stock Options. 
 (a) Nature of Stock Options. Stock Options granted under this plan shall be Nonstatutory Stock Options. 
 (b) Option Exercise Price. The exercise price for each Stock Option will be determined by the Administrator as of the date such Stock Option is granted, provided that, notwithstanding anything
contained herein to the contrary, such exercise price shall be (A) fixed as of the grant date, and (B) not less than the Fair Market Value of a share of Common Stock on the grant date. Notwithstanding the foregoing, any substitute Award
granted in assumption of or in substitution for an outstanding Award granted by a company or business acquired by the Company or a subsidiary or affiliate, or with which the Company or a subsidiary or affiliate combines, may be granted with an
exercise price per share of Common Stock other than as required above. Other than in connection with a change in the Company’s capitalization, without the approval of stockholders, at any time when the exercise price of a Stock Option is above
Fair Market Value of a share of Common Stock, the Administrator will not (A) reduce the exercise price of such Stock Option, (B) exchange such Stock Option for cash, another Award or a new Stock Option with a lower exercise price or
(C) otherwise reprice such Stock Option. 
 (c) Option Period and Vesting. A Stock Option shall become exercisable,
as a whole or in part, on the date or dates specified by the Administrator and thereafter shall remain exercisable until the earlier of (i) the date that such Stock Option expires and becomes unexercisable pursuant to the terms of an Award
Document or the terms of this Plan and (ii) the date that is ten (10) years after the date of grant. 
 (d)
Exercise of Stock Options. The exercise price for Stock Options will be paid as set forth in Section 5.3. No Stock Option will be exercisable except in respect of whole shares, and fractional share interests shall be
disregarded. A Stock Option will be deemed to be exercised when the individual at the Company designated as its “Stock Plan Administrator” (or other designated official of the Company) receives written notice of such exercise from the
Recipient in the form of Exhibit A hereto or such other form as the Company may specify from time to time, together with payment of the exercise price in accordance with Section 5.3 and any amounts required under
Section 5.10 or, with permission of the Administrator, arrangement for such payment. Notwithstanding any other provision of this Plan, the Administrator may impose, by rule and/or in Award Documents, such conditions upon the exercise of
Stock Options (including, without limitation, conditions limiting the time of exercise to specified periods) as may be required to satisfy applicable regulatory requirements. 

  
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 (e) Termination of Employment. 

(i) Termination for Just Cause. Subject to Section 5.12 and except as otherwise provided in the Award Document or any
written agreement between the Company or an Affiliated Entity and the Recipient, which may be entered into at any time before or after termination of employment, in the event of a Just Cause Dismissal of a Recipient all of the Recipient’s
unexercised Stock Options, whether or not vested, will expire and become unexercisable as of the date of such Just Cause Dismissal. 
 (ii) Termination Other Than for Just Cause. Subject to Section 5.12 and except as otherwise provided in the Award Document or any written agreement between the Company or an Affiliated
Entity and the Recipient, which may be entered into at any time before or after termination of employment, if a Recipient’s employment with the Company or any Affiliated Entity is terminated: 

(A) by the Company or an Affiliated Entity on account of a Redundancy Termination, then (1) all Stock Options that would have vested
between the date of such termination and December 31st of the year in which termination occurs shall vest in full and (2) all of the Recipient’s vested Stock Options shall remain exercisable until the earlier of (x) the date such
Stock Options would expire in accordance with their terms and (y) 90 days after the date of termination of employment. All other unvested Stock Options shall immediately expire and become unexercisable as of the date of such termination.

 (B) by the Company or an Affiliated Entity for any reason other than Just Cause Dismissal, Redundancy Termination, death,
Retirement or Permanent Disability, then, except as required by applicable law, (1) all unvested Stock Options shall immediately expire and become unexercisable on the date of such termination and (2) all vested and unexercised options
shall remain exercisable until the earlier of (x) the date such Stock Options would expire in accordance with their terms and (y) 90 days after the date of termination of employment. 

(C) by the Recipient for any reason other than death, Retirement or Permanent Disability, the Recipient’s unexercised Stock Options
that are not vested as of the termination date will expire and become unexercisable as of the date of termination, and the Recipient’s unexercised Stock Options that are vested as of the date of termination will become unexercisable as of the
earlier of: (1) the date such Stock Options would expire in accordance with their terms had the Recipient remained employed; and (2) 90 days after the date of termination of employment. 

(D) due to death, Retirement or Permanent Disability, the Recipient’s unexercised Stock Options will vest in full and will become
unexercisable as of the earlier of: (1) the date such Stock Options would expire in accordance with their terms had the Recipient remained employed; and (2) two years after the date of death, Retirement or Permanent Disability. 

  
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 6.2 Performance Awards. 

(a) Grant of Performance Award. The Administrator will determine in its discretion, subject to applicable law, the performance
criteria (which need not be identical and may be established on an individual or group basis) governing Performance Awards, the terms thereof, and the form and time of payment of Performance Awards. 

(b) Payment of Award. Upon satisfaction of the conditions applicable to a Performance Award, payment will be made to the Recipient
in cash, in shares of Common Stock valued at Fair Market Value as of the date payment is due, or in a combination of shares of Common Stock and cash, as the Administrator in its discretion may determine. 

(c) Right of Recapture. If at any time after the date on which a Recipient has been granted or becomes vested in an Award pursuant
to the achievement of a performance goal the Administrator determines that the earlier determination as to the achievement of the performance goal was based on incorrect data and that in fact the performance goal had not been achieved or had been
achieved to a lesser extent than originally determined and a portion of an Award would not have been granted, vested or paid, given the correct data, then (i) such portion of the Award that was granted shall be forfeited and any related shares
(or if shares were disposed of, the cash equivalent) shall be returned to the Company as provided by the Administrator, (ii) such portion of the Award that became vested shall be deemed to be not vested and any related shares (or if such shares
were disposed of, the cash equivalent) shall be returned to the Company as provided by the Administrator, and (iii) such portion of the Award paid to the Recipient shall be paid by the Recipient to the Company upon notice from the Company as
provided by the Administrator. 
 6.3 Restricted Stock. 

(a) Award of Restricted Stock. The Administrator will determine the Purchase Price (if any), the terms of payment of the
Purchase Price, the restrictions upon the Restricted Stock, and when such restrictions will lapse. 
 (b) Requirements of
Restricted Stock. All shares of Restricted Stock granted or sold pursuant to this Plan will be subject to the following conditions: 
 (i) No Transfer. The shares of Restricted Stock may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of, alienated or encumbered until the restrictions are removed or
expire; 
 (ii) Certificates. The Administrator may require that the certificates representing shares of Restricted
Stock (if any) granted or sold to a Recipient remain in the physical custody of an escrow holder or the Company until all restrictions are removed or expire; 
 (iii) Restrictive Legends. Each certificate (if any) representing shares of Restricted Stock granted or sold to a Recipient pursuant to this Plan will bear such legend or legends making reference
to the restrictions imposed upon such shares of Restricted Stock as the Administrator in its discretion deems necessary or appropriate to enforce such restrictions; and 
 (iv) Other Restrictions. The Administrator may impose such other conditions on shares of Restricted Stock as the Administrator may deem advisable, including, without limitation, trading or other
restrictions under any laws or rules of any applicable stock exchange or clearing house applicable to such securities. 

  
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 (c) Lapse of Restrictions. The restrictions imposed upon Restricted Stock will lapse
in accordance with such terms or other conditions as are determined by the Administrator. 
 (d) Rights of Recipient.
Subject to the provisions of Section 6.3(b) and any restrictions imposed upon the shares of Restricted Stock, the Recipient will have all rights of a stockholder with respect to the shares of Restricted Stock granted or sold to such
Recipient under this Plan, including, without limitation, the right to vote the shares of Restricted Stock and receive all dividends and other distributions paid or made with respect thereto. 

6.4 Restricted Stock Units. 
 (a) Award of Restricted Stock Units. The Administrator may at any time and from time to time approve the grant to Eligible Persons of Restricted Stock Units that will entitled the Recipient to be
issued or transferred a CUFS, or a cash amount of equivalent value, subject to the vesting of the Restricted Stock Unit. Each Restricted Stock Unit shall represent the right to receive one CUFS or a cash amount of equivalent value. The specific
terms and conditions of each award will be set out in the Award Document. 
 (b) Vesting. Restricted Stock Units shall
become vested, as a whole or in part, on the date or dates specified by the Administrator, subject to continuous employment through such date or dates. 
 (c) Termination of Employment. 
 (i) Termination for Just Cause.
Subject to Section 5.12 and except as otherwise provided in the Award Document or any written agreement between the Company or an Affiliated Entity and the Recipient, which may be entered into at any time before or after termination of
employment, in the event of a Just Cause Dismissal of a Recipient all of the Recipient’s Restricted Stock Units, whether or not vested, will expire and be forfeited as of the date of such Just Cause Dismissal. 

(ii) Termination Other Than for Just Cause. Subject to Section 5.12 and except as otherwise provided in the Award
Document or any written agreement between the Company or an Affiliated Entity and the Recipient, which may be entered into at any time before or after termination of employment, if a Recipient’s employment with the Company or any Affiliated
Entity is terminated: 
 (A) by the Company or an Affiliated Entity on account of a Redundancy Termination, then all Restricted
Stock Units that would have vested between the date of such termination and December 31st of the year in which termination occurs shall vest in full. All other unvested Restricted Stock Units shall immediately expire and be forfeited as of the
date of such termination. 

  
 15 

 (B) by the Company or an Affiliated Entity for any reason other than Just Cause Dismissal,
Redundancy Termination, death, Retirement or Permanent Disability, then, except as required by applicable law, all unvested Restricted Stock Units shall immediately expire and be forfeited on the date of such termination. 

(C) by the Recipient for any reason other than death, Retirement or Permanent Disability, the Recipient’s unvested Restricted Stock
Units shall immediately expire and be forfeited on the date of such termination. 
 (D) due to death, Retirement or Permanent
Disability, the Recipient’s unvested Restricted Stock Units shall immediately vest in full. 
 (d) Rights of
Recipient. Holders of Restricted Stock Units will not be entitled to vote or entitled to dividends with respect to the Restricted Stock Units until the Restricted Stock Units vest and an equivalent number of CUFS have been issued. Restricted
Stock Units will not carry any entitlement to participate in new issues of CUFS prior to vesting. 
 6.5 Stock Appreciation
Rights. 
 (a) Granting of Stock Appreciation Rights. The Administrator may at any time and from time to time approve
the grant to Eligible Persons of Stock Appreciation Rights, related or unrelated to Stock Options. 
 (b) Stock Appreciation
Rights Related to Options. 
 (i) A Stock Appreciation Right related to a Stock Option will entitle the holder of the
related Stock Option, upon exercise of the Stock Appreciation Right, to surrender such Stock Option, or any portion thereof to the extent previously vested but unexercised, with respect to the number of shares of Common Stock as to which such Stock
Appreciation Right is exercised, and to receive payment of an amount computed pursuant to Section 6.5(b)(iii). Such Stock Option will, to the extent surrendered, then cease to be exercisable. 

(ii) A Stock Appreciation Right related to a Stock Option hereunder will be exercisable at such time or times, and only to the extent
that, the related Stock Option is exercisable, and will not be transferable except to the extent that such related Stock Option may be transferable (and under the same conditions), will expire no later than the expiration of the related Stock
Option, and may be exercised only when the market price of the Common Stock subject to the related Stock Option exceeds the exercise price of the Stock Option. 
 (iii) Upon the exercise of a Stock Appreciation Right related to a Stock Option, the Recipient will be entitled to receive payment of an amount determined by multiplying: (A) the difference obtained
by subtracting the exercise price of a share of Common Stock specified in the related Stock Option from the Fair Market Value of a share of Common Stock on the date of exercise of such Stock Appreciation Right (or as of such other date or as of the
occurrence of such event as may have been specified in the instrument evidencing the grant of the Stock Appreciation Right), by (B) the number of shares as to which such Stock Appreciation Right is exercised. 

  
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 (c) Stock Appreciation Rights Unrelated to Options. The Administrator may grant Stock
Appreciation Rights unrelated to Stock Options. Section 6.5(b)(iii) will govern the amount payable at exercise under such Stock Appreciation Right, except that in lieu of an option exercise price the initial base amount specified in the
Award shall be used. 
 (d) Limits. Notwithstanding the foregoing, the Administrator, in its discretion, may place a
dollar limitation in such currency as it in its discretion chooses on the maximum amount that will be payable upon the exercise of a Stock Appreciation Right. 
 (e) Payments. Payment of the amount determined under the foregoing provisions may be made solely in whole shares of Common Stock valued at their Fair Market Value on the date of exercise of the
Stock Appreciation Right or, alternatively, at the discretion of the Administrator, in cash (in such currency as the Administrator in its discretion chooses) or in a combination of cash and shares of Common Stock as the Administrator deems
advisable. The Administrator has full discretion to determine the form in which payment of a Stock Appreciation Right will be made and to consent to or disapprove the election of a Recipient to receive cash in full or partial settlement of a Stock
Appreciation Right. If the Administrator decides to make full payment in shares of Common Stock, and the amount payable results in a fractional share, payment for the fractional share will be made in cash. 

(f) No Repricing. Other than in connection with a change in the Company’s capitalization, without the approval of
stockholders, at any time when the exercise price or base price of a Stock Appreciation Right is above Fair Market Value of a share of Common Stock, the Administrator will not (A) reduce the exercise price or base price of such Stock
Appreciation Right, (B) exchange such Stock Appreciation Right for cash, another Award or a new Stock Appreciation Right with a lower exercise price or base price or (C) otherwise reprice such Stock Appreciation Right. 

6.6 Stock Payments. The Administrator may approve Stock Payments to any Eligible Person on such terms and conditions as the
Administrator may determine. Stock Payments will replace cash compensation at the Fair Market Value of the Common Stock on the date payment is due. 
 6.7 Dividend Equivalents. The Administrator may grant Dividend Equivalents to any Recipient who has received a Stock Option, Stock Appreciation Right or other Award denominated in shares of Common
Stock. Dividend Equivalents may be paid in cash, shares of Common Stock or other Awards; the amount of Dividend Equivalents paid other than in cash will be determined by the Administrator by application of such formula as the Administrator may deem
appropriate to translate the cash value of dividends paid to the alternative form of payment of the Dividend Equivalent. Dividend Equivalents will be computed as of each dividend record date and will be payable to recipients thereof at such time as
the Administrator may determine. Notwithstanding anything herein to the contrary, in no event shall dividends or dividend equivalents be currently payable with respect to unvested or unearned Awards subject to performance criteria. 

6.8 Stock Bonuses. The Administrator may issue Stock Bonuses to Eligible Persons on such terms and conditions as the Administrator
may determine. 
 6.9 Stock Sales. The Administrator may sell to Eligible Persons shares of Common Stock on such terms
and conditions as the Administrator may determine. 

  
 17 

 7.0 Other Stock-Based Benefits. The Administrator is authorized to grant Other
Stock-Based Benefits. Other Stock-Based Benefits are any arrangements granted under this Plan not otherwise described above that: (a) by their terms might involve the issuance or sale of shares of Common Stock or other securities of the
Company; or (b) involve a benefit that is measured, as a whole or in part, by the value, appreciation, dividend yield or other features attributable to a specified number of shares of Common Stock or other securities of the Company. 

ARTICLE VII 

DEFINITIONS 
 Capitalized terms used in this Plan and not otherwise defined have the meanings set forth below: 
 “Administrator” means the Board as long as no Committee has been appointed and is in effect and also means the Committee to the extent that the Board has delegated authority
thereto. 
 “Affiliated Entity” means any entity controlled by the Company. 

“Amendment Effective Date” means August 16, 2011, the date that the stockholders re-approved the Plan.

 “Applicable Dividend Period” means (i) the period between the date a Dividend Equivalent is
granted and the date the related Stock Option, Stock Appreciation Right, or other Award is exercised, terminates, or is converted into shares of Common Stock, or (ii) such other time as the Administrator may specify in the written instrument
evidencing the grant of the Dividend Equivalent. 
 “ASX” means the Australian Securities Exchange, or
the stock market conducted by it, as the context requires. 
 “Award” means any Stock Option,
Performance Award, Restricted Stock, Restricted Stock Unit, Stock Appreciation Right, Stock Payment, Stock Bonus, Stock Sale, Dividend Equivalent, or Other Stock-Based Benefit granted or sold to a Recipient under this Plan. 

“Award Document” means the agreement or confirming memorandum setting forth the terms and conditions of an Award.

 “Board” means the Board of the Company. 

“Change in Control” means the following and shall be deemed to occur if any of the following events occurs:

 (i) Any Person becomes the beneficial owner (within the meaning of applicable securities laws) of 30% or more
of either the then outstanding shares of Common Stock or the combined voting power of the Company’s then outstanding securities entitled to vote generally in the election of directors; or 

  
 18 

 (ii) Individuals who, as of the Amendment Effective Date hereof, constitute
the Board (the “Incumbent Board”), cease for any reason to constitute at least a majority of the Board, provided that any individual who becomes a member of the Board after the effective date hereof whose election, or nomination for
election by the Company’s shareholders, is approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered to be a member of the Incumbent Board unless that individual was nominated or elected
by any person, entity or group (as defined above) having the power to exercise, through beneficial ownership, voting agreement and/or proxy, twenty percent (20%) or more of either the outstanding shares of Common Stock or the combined voting
power of the Company’s then outstanding voting securities entitled to vote generally in the election of directors, in which case that individual shall not be considered to be a member of the Incumbent Board unless such individual’s
election or nomination for election by the Company’s shareholders is approved by a vote of at least two-thirds of the directors then comprising the Incumbent Board; or 

(iii) Consummation by the Company of the sale or other disposition by the Company of all or substantially all of the
Company’s assets or a Reorganization of the Company with any other person, corporation or other entity, other than a 
 (A) Reorganization that would result in the voting securities of the Company outstanding immediately prior thereto (or, in the case of a Reorganization that is preceded or accomplished by an acquisition
or series of related acquisitions by any Person, by tender or exchange offer or otherwise, of voting securities representing 5% or more of the combined voting power of all securities of the Company, immediately prior to such acquisition or the first
acquisition in such series of acquisitions) continuing to represent, either by remaining outstanding or by being converted into voting securities of another entity, more than 50% of the combined voting power of the voting securities of the Company
or such other entity outstanding immediately after such Reorganization (or series of related transactions involving such a Reorganization), or 
 (B) Reorganization effected to implement a re-capitalization or re-incorporation of the Company (or similar transaction) that does not result in a material change in beneficial ownership of the voting
securities of the Company or its successor; or 
 (iv) Resolution of the shareholders of the Company or a court
order of the competent Irish court to liquidate the Company or the liquidation of the Company on any other ground for liquidation pursuant to applicable law. 
 “Committee” means any committee appointed by the Board to administer this Plan pursuant to Section 4.1. 

“Common Stock” means the common stock of the Company, as constituted at the moment immediately following the
submission of the declaration referred to in article 52.3 of the Company’s articles of association with the chamber of commerce and industries for Amsterdam, and as thereafter adjusted under Section 3.5. The Administrator, in its
discretion, may treat CUFS or American Depository Shares (“ADSs”) evidenced by American Depository Receipts (“ADRs”) as equivalent to and interchangeable with the Common Stock of the Company for the purposes of this Plan, in the
case of ADRs on a proportionately adjusted basis to account for the ratio of Common Stock in relation to ADRs. 

  
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 “Company” means James Hardie Industries SE, a Societas Europaea
under Irish law and for the avoidance of doubt: 
  

	 	(i)	for the period until conversion to an SE under Dutch law, James Hardie Industries N.V.; and 

 

	 	(ii)	for the period after conversion to an SE under Dutch law but prior to conversion to an SE under Irish law, James Hardie Industries SE, a Societas Europaea under Dutch
law. 

 “CUFS” means CHESS Units of Foreign Securities as defined in the SCH Business
Rules. 
 “Disclosure Document” has the same meaning as set out in the Corporations Law. 

“Dividend Equivalent” means a right granted by the Company under Section 6.7 to a holder of a Stock
Option, Stock Appreciation Right or other Award denominated in shares of Common Stock to receive from the Company during the Applicable Dividend Period payments equivalent to the amount of dividends payable to holders of the number of shares of
Common Stock underlying such Stock Option, Stock Appreciation Right, or other Award. 
 “Eligible
Person” means employees of the Company or of any Affiliated Entity, including officers of the Company or of any Affiliated Entity who are employees of the Company of any Affiliated Entity; provided, however, that any employee who
is also a member of the Board of the Company shall not be an Eligible Person, and provided further, that if any listing rule of any stock exchange where the Company’s securities are listed or the ASX requires the Company to obtain
shareholder approval prior to granting an Award or issuing any securities to any employee, such an employee is not an Eligible Person unless and until any such shareholder approval has been obtained. 

“Expiration Date” means the tenth (10th) anniversary of the Amendment Effective Date. 

“Fair Market Value” as of a particular date means either: 

(i) the market price of a share of the Common Stock determined as follows: (A) if the stock is listed on an
established stock exchange or exchanges (including for this purpose, the Nasdaq National Market), the closing price of a share on that trading day on the primary exchange upon which the stock trades, as measured by volume, as published in The
Australian Financial Review or other reputable newspaper circulating in the country where the Company’s Common Stock is primarily listed, or if no sale price was quoted for such date, then as of the next preceding date on which such a sale
price was quoted, or (B) if the stock is not then listed on an established stock exchange, the fair market value as determined by the Administrator in good faith on such basis as it deems appropriate; 

(ii) the market price of an ADS evidenced by an ADR determined as follows: (A) if the ADR is listed on an established
exchange or exchanges (including for this purpose, the Nasdaq National Market), the closing price of the ADR on that trading day on the primary exchange on which the ADR trades, as measured by volume, as published in The Wall Street Journal
or other reputable newspaper circulating in the country where the Company’s ADRs are primarily listed, or if no sale price was 

  
 20 

 
quoted for such date, then as of the next preceding date on which the sale price was quoted, or (B) if the ADR is not then listed on an established stock exchange, the fair market value as
determined by the Administrator in good faith on such basis as it deems appropriate; or 
 (iii) the market price
of a single CUFS unit determined as follows: (A) if the CUFS are listed on an established exchange or exchanges (including for this purpose, the ASX), the arithmetic mean of the highest and lowest sale prices of the CUFS or the underlying stock
for that trading day on the primary exchange on which the CUFS or underlying stock trade, as measured by volume, as published in The Australian Financial Review or other reputable newspaper circulating in the country where the Company’s
CUFS are primarily listed, or if no sale price was quoted for such date, then as of the next preceding date on which the sale price was quoted, or (B) if the CUFS or underlying stock are not then listed on an established stock exchange, the
fair market value as determined by the Administrator in good faith on such basis as it deems appropriate. 
 “Just
Cause Dismissal” means a termination of a Recipient’s employment for any of the following reasons: (i) the refusal of the Recipient to carry out reasonable directions provided to the Recipient by the Board, the President or
Chief Executive Officer of the Company, or any other person who has authority to so direct the Recipient; (ii) the commission of a grossly negligent act by the Recipient in the performance of his or her duties which injures the Company;
(iii) the commission of theft from the Company by the Recipient; (iv) a material violation of any policy of the Company which injures the Company; (v) the conviction of the Recipient of violating a criminal law that involves the
commission of a felony or other crime that involves moral turpitude; (vi) the performance of services by the Recipient for any other person or entity that, in the judgment of the Chief Executive Officer of the Company or other senior executive
officer designated by the Administrator, competes with the Company or an Affiliated Entity, or is otherwise prejudicial to or in conflict with the business or interests of the Company or its Affiliated Entities, while the Recipient is employed by
the Company and without the prior written approval of the Chief Executive Officer of the Company. 
 “Nonstatutory
Stock Option” means a regular Stock Option that is not covered by special tax or other regulatory provisions. 

“Other Stock-Based Benefits” means an Award granted under Section 7.0. 

“Performance Award” means an Award under Section 6.2, payable in cash, shares of Common Stock or a
combination thereof, that vests and becomes payable over a period of time upon attainment of individual performance criteria or other criteria tied to the performance of the Company, any Affiliated Entity, or any part of the Company or any
Affiliated Entity, established in connection with the grant of the Award, which may include satisfactory completion of a specified period of employment service. 
 “Permanent Disability” means that the Recipient becomes physically or mentally incapacitated or disabled so that the Recipient is unable to perform substantially the same services
as the Recipient performed prior to incurring such incapacity or disability (the Company, at its option and expense, being entitled to retain a physician to confirm the existence of such incapacity or disability, and the determination of such
physician to be binding upon the Company and the Recipient), and such incapacity or disability continues for a period of three consecutive months or six months in any 12-month period or such other period(s) as may be determined by the Administrator
with respect to any Award. 

  
 21 

 “Person” means any person, entity or group, within the meaning
ascribed to by relevant security laws, but excluding (i) the Company and its subsidiaries, (ii) any depositary for the CUFS or ADRs, (iii) any employee stock ownership or other employee benefit plan maintained by the Company and
(iv) an underwriter or underwriting syndicate that has acquired the Company’s securities solely in connection with a public offering thereof. 
 “Plan” means this 2001 Equity Incentive Plan of the Company, as amended from time to time. 
 “Plan Term” means the period during which this Plan remains in effect (commencing on the original effective date and ending on the Expiration Date). 

“Purchase Price” means the purchase price (if any) to be paid by a Recipient for Restricted Stock as determined
by the Administrator (which price shall be at least equal to the minimum price required under applicable laws and regulations for the issuance of shares of Common Stock which is nontransferable and subject to a substantial risk of forfeiture until
specific conditions are met). 
 “Recipient” means an employee, including an officer, who has received
an Award under this Plan. 
 “Redundancy Termination” means termination of a Recipient’s employment
as a result of the elimination of a Recipient’s position or as apart of a reduction of force that is not related to the performance of the Recipient. 
 “Reorganization” means any merger, consolidation or other reorganization. 
 “Restricted Stock” means Common Stock or CUFS issued in respect of such stock that is the subject of an Award made under Section 6.3 and that is nontransferable and
subject to a substantial risk of forfeiture until specific conditions are met, as set forth in this Plan and in any statement evidencing the grant of such Award. 
 “Restricted Stock Unit” means a right granted under Section 6.4 to be issued or transferred a CUFS or a cash amount of equivalent value subject to certain
vesting requirements. 
 “Retirement” of a Recipient means the Recipient’s resignation from the
Company or any Affiliated Entity after reaching age 62 and at least five years of full-time employment by the Company or any Affiliated Entity, without any circumstances that would justify a Just Cause Dismissal of the Recipient. 

“Stock Appreciation Right” means a right granted under Section 6.5 to receive a payment that is
measured with reference to the amount by which the Fair Market Value of a specified number of shares of Common Stock appreciates from a specified date, such as the date of grant of the Stock Appreciation Right, to the date of exercise. 

“Stock Bonus” means an issuance or delivery of unrestricted or restricted shares of Common Stock under
Section 6.8 as a bonus for services rendered or for any other valid consideration under applicable law. 

  
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 “Stock Payment” means a payment in shares of Common Stock under
Section 6.6 to replace all or any portion of the compensation or other payment that would otherwise become payable to the Recipient in cash. 
 “Stock Option” means a right to purchase shares of Common Stock granted under Section 6.1 of this Plan. 

  
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