Electro Optic : Share Purchase Plan

For personal use only

• July 2022

Dear Shareholder

Electro Optic Systems Holdings Limited - Share Purchase Plan

On 29 June 2022, Electro Optic Systems Holdings Limited ACN 092 708 364 (ASX: EOS) (EOS or Company) announced to the Australian Securities Exchange (ASX) a proposed A$15 million placement of new fully paid ordinary shares in EOS (Shares) to institutional investors (Placement) at an issue price of A$1.20 per Share (Placement Price).

Further details of the Placement are set out in the ASX announcement dated 29 June 2022 and released to ASX on that same date.

The board of directors of EOS (Board) recognises that a number of the Company's loyal Shareholders did not have an opportunity to participate in the Placement. The Board is therefore pleased to offer Eligible Shareholders (as defined below) an opportunity to participate in EOS' share purchase plan (SPP or Offer). The SPP will give all Eligible Shareholders an opportunity to apply for up to A$30,000 worth of new Shares at A$1.20 per Share, being the Placement Price.

The net capital raised under the SPP will be used by EOS for working capital and near-term capital requirements of EOS

The SPP is open to all shareholders recorded as holding Shares on the Company's register of members as at 7.00pm (Sydney, Australia time) on 28, June 2022 and who have a registered address in Australia or New Zealand (and who otherwise meet the eligibility criteria set out in the attached SPP Terms and Conditions) (Eligible Shareholders).

All of the directors of EOS who are Eligible Shareholders have indicated that they will participate in the SPP.

Other conditions of the SPP include:

1. 1. Eligible Shareholders may apply for a parcel of Shares with a dollar value of A$2,500, A$5,000, A$7,500, A$10,000, A$15,000, A$22,500 or A$30,000;
2. applications, certificates (in the case of 'custodians') and full payment for Shares subscribed for under the SPP must be received by 5.00pm (Sydney, Australia time) on 19, July 2022, unless the Offer is extended, in accordance with the instructions set out in the Application Form and the SPP Terms and Conditions;
3. the Offer attracts no brokerage or other transaction costs; and
4. the SPP will initially be capped at A$2 million. However, the Board reserves the right in its absolute discretion to accept applications from Eligible Shareholders in excess of A$2 million or to scale back applications, if necessary. In the event of a scale back occurring, you may not receive the full number of Shares applied for under the SPP and the difference in any application monies will be refunded to you (without interest) following the issue of Shares under the SPP.

Participation in the SPP is completely optional. However, an Eligible Shareholder's entitlement to participate in the SPP is non-renounceable. This means that an Eligible Shareholder's right to participate in the SPP cannot be transferred to anyone else.

To apply for new Shares under the SPP, Eligible Shareholders can either:

• download a copy of the full Terms and Conditions of the SPP and their personalised application form online from the Offer website athttps://eos2022spp.thereachagency.com; or
• contact EOS share registry on [phone] (outside Australia) within 1300 855 080 (within Australia) from 8.30am to 5.30pm (Sydney, Australia time) Monday to Friday to request a copy of the full Terms and Conditions of the SPP and their personalised Application Form.

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The full Terms and Conditions of the SPP are available at https://www.eos-aus.com/investor-centreand, if you are eligible and wish to participate in the SPP, you should complete and return your personalised Application Form together with a cheque, bank draft or money order for the relevant amount of application monies, or submit a BPAY® payment, in accordance with the instructions on your personalised Application Form. If you are a 'custodian', you may be required to submit a custodian certificate to EOS in order to participate on behalf of any beneficiaries. Please consider the SPP Terms and Conditions for further details. Your application and payment must be received by no later than 5.00pm (Sydney, Australia time) on 19, July 2022, unless the Offer is extended.

You should be aware that your own financial institution may implement earlier cut-off times with regard to electronic payment, and you should therefore take this into consideration when making payment. It is your responsibility to ensure that funds submitted through BPAY® are received by 5.00pm (Sydney, Australia time) on 19, July 2022, unless the Offer is extended.

Important information

The offer of new Shares under the SPP is made in accordance with ASIC Corporations (Share and Interest Purchase Plans) Instrument 2019/547 issued by the Australian Securities and Investments Commission which grants relief from the requirement in the Corporations Act 2001 (Cth) to issue a disclosure document for the SPP.

The Board recommends that you read the attached SPP Terms and Conditions carefully and in their entirety before you decide whether to participate in the SPP.

In particular, you should note the future market price of Shares is uncertain and may rise or fall. This means the price you pay for Shares under the SPP may be either higher or lower than the Share price as traded on ASX at the time the Shares are issued to you under the SPP, with the effect that the value of your investment in the Shares could rise or fall.

This letter does not provide financial advice and has been prepared without taking account of any person's investment objectives, financial situation or particular needs. If you are in any doubt about the course of action you should follow, you should seek advice from your financial, taxation or other professional adviser in relation to the SPP before participating in the SPP.

Yours sincerely

Peter Leahy AC

Chairman

IMPORTANT NOTICE AND DISCLAIMER

This document has been prepared for release in Australia and may not be released to US wire services or distributed in the United States. This document does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States, or in any jurisdiction in which such an offer would be illegal. The Shares to be offered and sold under the SPP have not been, and will not be, registered under the U.S. Securities Act of 1933 (U.S. Securities Act) or under the securities laws of any state or other jurisdiction of the United States and may not be offered or sold, directly or indirectly, in the United States unless they have been registered under the U.S. Securities Act (which EOS has no obligation to do or procure) or are offered and sold in a transaction exempt from, or not subject to, the registration requirements of the U.S. Securities Act and any other applicable securities laws of any state or other jurisdiction of the United States. Shareholders resident in the United States are not eligible to participate in the SPP..

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Share Purchase Plan Terms and Conditions July 2022

Part 1 - The Offer

Electro Optic Systems Holdings Limited ACN 092 708 364 (ASX: EOS) (EOS or Company) invites eligible shareholders to apply for up to A$30,000 worth of new fully paid ordinary shares in EOS (Shares) under a share purchase plan (SPP or Offer) at an issue price per Share of A$1.20 per Share, being the price per Share paid by institutional investors under the Placement (the Purchase Price).

If you are eligible to purchase Shares under the SPP and you decide to participate, you must purchase a minimum parcel of Shares with a dollar value of A$2,500 or a maximum parcel of Shares with a dollar value of A$30,000 (Maximum) or any of the other increments set out in your personalised application form (Application Form), namely parcels of Shares having a dollar value of A$2,500, A$5,000, A$7,500, A$10,000, A$15,000, A$22,500 or A$30,000 stated in the Application Form.

To apply for new Shares under the SPP, Eligible Shareholders can either:

• download a copy of the full Terms and Conditions of the SPP and their personalised application form online from the Offer website athttps://eos2022spp.thereachagency.com; or
• contact EOS share registry on [phone] (outside Australia) within 1300 855 080 (within Australia) from 8.30am to 5.30pm (Sydney, Australia time) Monday to Friday to request a copy of the full Terms and Conditions of the SPP and their personalised Application Form.

The SPP will initially be capped at A$2 million. However, the Board reserves the right in its absolute discretion to accept applications from Eligible Shareholders in excess of A$2 million or to scale back applications if necessary. In the event of a scale back occurring, you may not receive the full number of Shares applied for under the SPP and the difference in any application monies will be refunded to you (without interest) following the issue of Shares under the SPP (please see Section 13 of the SPP Terms and Conditions for further information).

Please carefully read these SPP Terms and Conditions relating to the Offer, as you will be bound by them.

Key dates*

Event	Date
Record Date	7.00pm (Sydney, Australia time), Tuesday, 28 June
	2022
Offer opens	9.00am (Sydney, Australia time), Wednesday, 6 July
	2022
Offer closes	5.00pm (Sydney, Australia time), Tuesday, 19 July
	2022
Announcement of the results of the SPP	Friday, 22 July 2022
Issue of Shares under the SPP	Tuesday, 26 July 2022
Expected date for quotation of Shares issued	Tuesday, 26 July 2022
under the SPP on ASX
Despatch of holding statements / confirmation	Wednesday, 27 July 2022
advice

• The timetable is indicative only and subject to change. EOS retains the discretion, subject to the listing rules of ASX and the Corporations Act 2001 (Cth) (Corporations Act), to alter any or all of these key dates at its discretion (generally or in particular cases), without prior notice, including extending the closing date or to withdraw the SPP without prior notice. Applicants are encouraged to submit their Application Forms as soon as possible.

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Part 2 - The terms and conditions of the Offer

1. Important notices

This document has been prepared by EOS and has been authorised for release by the Board.

The Offer of new Shares under the SPP is not a recommendation by EOS to purchase Shares. Nothing in these SPP Terms and Conditions, the Application Form or any other accompanying documentation constitutes investment or financial product advice or is intended to influence your decision whether or not to participate in the SPP. The SPP documentation does not constitute a prospectus or a product disclosure statement and does not (and nor is it required under the Corporations Act to) contain all the information that a prospectus or a product disclosure statement is required to contain under the Corporations Act. Rather, the Corporations Act and Australian Securities and Investments Commission (ASIC) Corporations (Share and Interest Purchase Plans) Instrument 2019/547 (Instrument) allow an offer under share purchase plans to be made by providing certain confirmations to the market on the basis that all information that investors and their professional advisers would reasonably require to make an informed investment decision in relation to the SPP, when read with these SPP Terms and Conditions and the accompanying information, is publicly available. Accordingly, you must rely on your own knowledge of EOS, previous disclosures made by EOS to the ASX and, if necessary, consult with your professional adviser when making your decision whether or not, and the extent to which, you wish to apply for Shares under the SPP (taking into account your own financial situation, needs and objectives).

This document and the accompanying materials do not constitute an offer of securities for sale in the United States and may not, directly or indirectly, be sent or disseminated in the United States. The new Shares to be issued under this Offer have not been and will not be registered under the U.S. Securities Act of 1933 (U.S. Securities Act) or the securities laws of any state of the United States and may not be offered, sold or otherwise transferred in the United States except pursuant to an exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws.

If you apply to participate in the SPP, you are accepting the risk that the market price of EOS' Shares may change between the date on which you receive this document or send in an Application Form and the date on which Shares are issued to you under the SPP (Issue Date). This means that it is possible, that up to or after the Issue Date, you may be able to buy Shares at a lower price than the price you pay under the SPP. EOS encourages you to consider seeking professional, financial and taxation advice before participating in the SPP.

2. Opening and closing date of the Offer

The Offer opens on 9.00am (Sydney, Australia time) on Wednesday, 6 July 2022. The Offer closes at 5.00pm (Sydney, Australia time) on Tuesday, 19 July 2022, unless the Offer is extended, and is being made to each Eligible Shareholder on the SPP Terms and Conditions. No late applications will be accepted (subject to Section 13).

3. Who is an Eligible Shareholder?

You are eligible to apply for Shares in the SPP if you are a shareholder of EOS and:

1. your registered address as recorded in EOS' register of members is in Australia or New Zealand;
2. you were registered as a holder of Shares in EOS as at 7.00pm (Sydney, Australia time) on Tuesday 28 June 2022;
3. you are not in the United States or acting for the account or benefit of a person in the United States; and
4. you do not hold Shares on behalf of another person who resides outside Australia or New Zealand (unless you also hold Shares in another eligible capacity),

(an Eligible Shareholder).

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EOS has determined that it is not practical for holders of Shares with addresses on the Company's register of members in jurisdictions outside Australia and New Zealand to participate in the SPP (see Section 22 for further information).

In applying for Shares, each Eligible Shareholder must comply with the terms of the Instrument to the extent that it applies to them. What is required in order to comply with the Instrument is set out in the section titled 'ASIC Instrument 2019/547' below.

The Offer to each Eligible Shareholder is made on the same terms and conditions. The Offer is non- renounceable (i.e. you may not transfer your right to apply for Shares under the SPP to anyone else).

To the extent that an Eligible Shareholder holds Shares on behalf of another person resident outside Australia or New Zealand, it is their responsibility to ensure that any acceptance complies with all applicable foreign laws.

In order to comply with relevant securities laws, the Shares to be issued under this SPP may not be offered to EOS shareholders located in the United States or to EOS shareholders who are, or who are acting for the account or benefit of, persons in the United States.

Because of these legal restrictions, you must not send copies of the SPP Terms and Conditions or any other material relating to the SPP to any person resident in the United States or elsewhere outside Australia and New Zealand.

ASIC Instrument 2019/547

This invitation to apply for Shares under the SPP is made in accordance with the requirements of the Instrument. The Instrument grants relief from the requirement to prepare a prospectus or other disclosure document for the invitation to apply for Shares under the SPP. As set out above, in applying for Shares, Eligible Shareholders must comply with the Instrument to the extent it applies to them.

If you are a custodian, trustee or nominee within the definition of 'custodian' in the Instrument (Custodian) you must do those things set out in the section titled 'Custodians, Trustees and Nominees' below as well as make an application in accordance with these SPP Terms and Conditions, in order to comply with the Instrument.

If you are not a Custodian, by making an application in accordance with these SPP Terms and Conditions, you will have complied with the requirements of the Instrument.

For the purposes of the Instrument you are a 'custodian' if you are an Eligible Shareholder that:

1. holds an Australian financial services licence covering the provision of a 'custodial or depository service' (as defined in section 766E of the Corporations Act, disregarding subsection (3) of that section);
2. is exempt from the requirement to hold an Australian financial services licence covering the provision of a custodial or depository service;
3. holds an Australian financial services licence covering the operation of an IDPS or is a responsible entity of an IDPS-like scheme;
4. is a trustee of a self-managed superannuation fund or a superannuation master trust; or
5. is a registered holder of Shares and is noted on the register of members of EOS as holding the Shares on account of another person.

Single holders

If you are the only registered holder of a holding of Shares, but you receive more than one Offer under the SPP (e.g. because you have multiple registered holdings), you may only apply for one parcel of Shares up to the Maximum.

Joint holders

If you are registered with one or more other persons as the joint holders of a holding of Shares, that joint holding is taken to be a single registered holding for the purposes of the SPP and the certifications, representations and warranties given by a joint holder when applying to participate in the SPP will be taken to have been given by all joint holders. If the same joint holders receive more

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