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                                  EXHIBIT 10.12

     THIS  NOTE  is  made  as of this 14th day of December, 2001, by and between
WILLIAM  B.  HEYE,  JR.  ("Borrower"),  an  employee  of  SBE  Inc.,  a Delaware
corporation  ("Company"),  and  SBE  INC.

                                    RECITALS

     WHEREAS,  Company  and  Borrower entered into certain promissory notes, the
Full  Recourse Promissory Note dated as of November 6, 1998, Promissory Note A-1
dated as of December 16, 1998 and Promissory Note A-2 dated as of April 15, 1999
(together  the  "Initial  Notes") with an aggregate original principal amount of
Seven  Hundred  Forty  Three Thousand Nine Hundred and Fifty dollars ($743,950),
and  that  certain  Pledge  Agreement  dated  as  of  November  6,  1998;

     WHEREAS,  Company  has  requested, and the Borrower has agreed to amend the
Initial  Notes to extend the maturity dates of the Initial Notes to December 14,
2003;

     NOW,  THEREFORE,  for good and valuable consideration, the receipt of which
is  hereby  acknowledged,  Company and Borrower hereby agree as follows that the
Initial  Notes shall be amended, restated, and consolidated in their entirety by
the  following  Note:


                       AMENDED, RESTATED AND CONSOLIDATED
                             SECURED PROMISSORY NOTE



$743,950                                                     December  14,  2001
                                                         San  Ramon,  California



     FOR  VALUE  RECEIVED,  William  B.  Heye,  Jr.,  an employee of SBE Inc., a
Delaware  corporation,  hereby  unconditionally  promises to pay to the order of
Company,  in  lawful  money  of  the United States of America and in immediately
available  funds,  the  principal sum of Seven Hundred Forty Three Thousand Nine
Hundred  Fifty Dollars ($743,950) (the "Loan"), together with accrued and unpaid
interest  thereon, each due and payable on the dates and in the manner set forth
below.
     It is the intent of the parties is that the purpose of this Note is not for
consumer,  family  or  household  purposes.

     This  Amended,  Restated  and  Consolidated  Secured  Promissory  Note (the
"Amended  Note")  amends, restates and consolidates the Initial Notes, including
the  Full  Recourse Promissory Note referred to in and executed and delivered in

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connection  with  that certain Pledge Agreement dated as of November 6, 1998 and
executed  and  delivered  by  Borrower in favor of Company (as the same may from
time  to  time  be  amended, modified or supplemented or restated, the "Security
Agreement").  Additional  rights  of  the  Company are set forth in the Security
Agreement.  All  capitalized  terms used herein and not otherwise defined herein
shall  have  the  respective  meanings  given to them in the Security Agreement.

     1.  PRINCIPAL REPAYMENT. The outstanding principal amount of the Loan shall
be  due and payable on December 14, 2003, subject to the mandatory retirement of
principal  repayments  as  described  below.

          A.  MANDATORY  RETIREMENT  OF  PRINCIPAL.  In  addition  to  the above
principal  repayment  and  interest  payments  due  as  described  in Section 2,
Borrower  promises to prepay Twenty Five Thousand Dollars ($25,000) of principal
due  on  the  first anniversary of the date of this Amended Note.  Additionally,
fifty percent (50%) of the Net Amount (as defined below) of any bonuses received
by  the Borrower from the Company shall be applied to principal prepayment up to
a  maximum  payment  of  principal from bonuses of Seventy Five Thousand dollars
($75,000)  annually.  The  "Net  Amount"  of  any  bonus  shall be determined by
subtracting  withheld  income  and employment taxes from the total amount of the
bonus,  and  shall not take into account deductions for Borrower's participation
in  the  Company's  401(k)  plan,  employee  stock  purchase  plan, group health
insurance  plan  and  other  employee  benefit  plans  sponsored  by the Company
(together,  "Company Benefits") in which Borrower participates.  Borrower hereby
authorizes the Company to deduct any payment of principal due hereunder from any
bonus  paid  by  the  Company  to Borrower after the execution date of the Loan.
Borrower  understands  that  income  and  employment taxes will be deducted from
these  bonuses  along  with  deductions  as  elected by Borrower with respect to
Borrower's  participation  in Company Benefits, based upon the amount that would
have  been  paid  Borrower  had  payments  for principal not been deducted.  The
maximum  aggregate  amount of these mandatory retirement of principal provisions
is  One Hundred Thousand Dollars ($100,000) annually, beginning on the execution
date  of  this  Amended Note, subject to the final principal repayment provision
set  forth  above.

     2.  INTEREST  RATE.  Borrower  further  promises  to  pay  interest  on the
outstanding  principal amount hereof from the date hereof until payment in full,
which  interest  shall  be  payable  at  the  rate  of  Two  and Forty Eight One
Hundredths  percent  (2.48%)  per  annum  or the maximum rate permissible by law
(which  under the laws of the State of California shall be deemed to be the laws
relating  to  permissible  rates  of interest on commercial loans), whichever is
less,  compounded  annually.  Interest  shall be due and payable annually on the
anniversary  of the execution date of this Amended Note, and shall be calculated
on  the  basis  of  a  360-day  year  for  the  actual  number  of days elapsed.

     Upon  the  occurrence  and  during  the  continuance of an Event of Default
pursuant  to Section 6 below, all amounts owing hereunder shall bear interest at
Two  and  Forty  Eight  One  Hundredths  percent  (2.48%)  per  annum.

     3.  PLACE OF PAYMENT. All amounts payable hereunder shall be payable at the
office  of Company unless another place of payment shall be specified in writing
by  Company.

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     4.  APPLICATION OF PAYMENTS. Payment on this Note shall be applied first to
accrued  interest,  if  any, and thereafter to the outstanding principal balance
hereof.

     5.  SECURED NOTE. The full amount of this Note is secured by the collateral
identified  and  described  as  security  therefor  in  the  Security Agreement.
Borrower  shall  not, directly or indirectly, create, permit or suffer to exist,
and  shall  defend  the  collateral  against  and  take  such other action as is
necessary to remove, any lien on or in the collateral, or in any portion Thereof

     6.  DEFAULT.  Each  of  the following events shall be an "Event of Default"
hereunder:

          (A) Borrower fails to pay timely any of the principal amount due under
this  Note  on the date the same becomes due and payable or any accrued interest
or  other  amounts  due  under  this  Note  on the date the same becomes due and
payable  or  within  five  (5)  business  days  thereafter;

          (B)  Borrower  files  a  petition  or  action  for  relief  under  any
bankruptcy,  insolvency or moratorium law or any other law for the relief of, or
relating  to,  debtors,  now or hereafter in effect, or makes any assignment for
the  benefit  of  creditors  or  takes  any  action in furtherance of any of the
foregoing;

          (C)  An  involuntary  petition  is filed against Borrower (unless such
petition is dismissed or discharged within sixty (60) days) under any bankruptcy
statute  now or hereafter in effect, or a custodian, receiver, trustee, assignee
for  the  benefit  of creditors (or other similar official) is appointed to take
possession,  custody  or  control  of  any  property  of  Borrower;

          (D)  Borrower  defaults  on  an  obligation  contained in the Security
Agreement;  or

          (E) Borrower's employment by or association with Company is terminated
for  any  reason or no reason, including, without limitation, death of Borrower.

Upon  the  occurrence  of  an  Event of Default hereunder, all unpaid principal,
accrued  interest  and  other  amounts  owing  hereunder shall, at the option of
Company,  and,  in the case of an Event of Default pursuant to (B) or (C) above,
automatically,  be  immediately due, payable and collectible by Company pursuant
to  applicable  law.  Notwithstanding  the foregoing, if an Event of Default has
occurred under (E) above due to, in Company's sole discretion, no malfeasance or
misfeasance  on  the part of Borrower, this Note shall be accelerated only after
30 days' notice to Borrower or any successor.  Company shall have all rights and
may  exercise  any  remedies  available  to  it  under  law,  successively  or
concurrently.  Borrower  expressly  acknowledges  and  agrees that Company shall
have the right to offset any obligations of Borrower hereunder against salaries,
bonuses  or  other  amounts  that  may  be  payable  to  Borrower  by  Company.

     7.  WAIVER.  Borrower  waives presentment and demand for payment, notice of
dishonor, protest and notice of protest of this Note, and shall pay all costs of
collection  when  incurred, including, without limitation, reasonable attorneys'
fees,  costs  and  other  expenses.

     The  right to plead any and all statutes of limitations as a defense to any
demands  hereunder  is  hereby  waived  to  the  full  extent  permitted by law.

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     8.  GOVERNING  LAW.  This  Note  shall  be  governed  by, and construed and
enforced  in  accordance  with,  the  laws of the State of California, excluding
conflict  of  laws  principles  that  would cause the application of laws of any
other  jurisdiction.

     9.  SUCCESSORS  AND ASSIGNS. The provisions of this Note shall inure to the
benefit  of  and be binding on any successor to Borrower and shall extend to any
holder  hereof. Borrower shall not, without the prior written consent of holder,
assign  any  of  its  rights  or  obligations  hereunder.


BORROWER:                              /S/  WILLIAM  B.  HEYE,  JR.

                              Printed  Name:  William  B.  Heye,  Jr.
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