AMENDMENT
        NO. 1 TO SECURITY AGREEMENT
  THIS
        AMENDMENT NO. 1 dated as of November 20, 2006 (this “ Amendment ”)
        to the
        Security Agreement dates as of February 28, 2006, as amended from time to
        time
        (the “ Security
        Agreement ”),
        by
        and between Neonode, Inc. A Delaware corporation (the “ Grantor ”),
        and
        AIGH Investment Partners, LLC, a Delaware limited liability company, or assigns,
        as agent for the Investors (as defined in the Security Agreement) (the
“ Secured
        Party ”).
  WITNESSETH:
  WHEREAS,
        capitalized terms not otherwise defined in this Amendment shall have the
        meaning
        set forth in the Security Agreement;
  WHEREAS,
        the Grantor (i) on February 28, 2006, borrowed an aggregate principal amount
        of
        $4,000,000 pursuant to senior secured notes (the “ Existing
        Notes ”)
        from
        the Secured Party and other investors and (ii) intends to borrow an additional
        aggregate amount of up to $1,800,000 from Investors, including the existing
        Investors, pursuant to notes of similar tenor to the Existing Notes (the
        “ Additional
        Notes ”);
        and
  WHEREAS,
        the parties hereto wish to amend the Security Agreement to add as Obligations
        the obligations of the Grantor under the Additional Notes.
  NOW,
        THEREFORE, in consideration of the mutual covenants contained herein and
        for
        other good and valuable consideration, the receipt and sufficiency of which
        are
        hereby acknowledged, the parties to the Security Agreement hereby agree as
        follows:
  SECTION
        1.  Amendments
        to the Security Agreement .
        The
        Security Agreement is hereby amended, effective upon completion of the purchase
        from time to time of any Additional Notes as follow:
  (a)  Schedule
        I to the
        Security Agreement is hereby amended to be read in its entirety as Schedule
        I attached
        to this Amendment.
  (b)  The
        parties hereto agree to include the obligations of the Grantor under the
        Additional Notes as Obligations under the Security Agreement; provided that
        the
        aggregate principal amount of the Existing Notes together with the aggregate
        principal amount of the Additional Notes does not exceed
        $5,800,000.
  (c)  The
        parties hereto agree that the Additional Notes shall be pari passu with the
        Existing Notes.
  SECTION
        2.  Effect
        of Amendment .
        Except
        as expressly provided in this Amendment, each of the terms and provisions
        of the
        Security Agreement shall remain in full force and effect.
  SECTION
        3.  Counterparts .
        This
        Amendment may be executed in one or more counterparts, each of which shall
        be
        deemed to be an original, but all of which taken together shall constitute
        one
        and the same instrument.
  
 IN
        WITNESS WHEREOF, the Grantor and the Secured Party have caused this Amendment
        to
        be duly executed and delivered by a duly authorized representative as of
        the
        date first above written.
  [Signature
        Page Follows]
      
 SIGNATURE
        PAGE
 TO
 AMENDMENT
        NO. 1 TO SECURITY AGREEMENT
 Dated
        November 20, 2006
  THE
                  GRANTOR:Neonode,
                  Inc.a
                  Delaware corporationBy:_________________________________Name:Title:*Address
                  for Notices:*Biblioteksgatan
                  22S111
                  46 Stockholm, SwedenAttention:
                  PresidentFax:
                  01146-8-678 18 51SECURED
                  PARTY:AIGH
                  INVESTMENT PARTNERS, LLCBy:_________________________________Name:
                  Orin HirschmanTitle:
                  Manager
 
 
 
 SCHEDULE
        I
 INVESTORS
  
 Principal
                  Amount of
              Principal
                  Amount ofName
                  and Address
              Existing
                  Notes
              Additional
                  NotesAIGH
                  Investment Partners, LLC
              $3,200,000
              $800,0006006
                  Berkeley AvenueBaltimore,
                  MD 21209Hershel
                  P. Berkowitz
              $600,000
              $150,000441
                  Yeshiva LaneBaltimore,
                  MD 21208Joshua
                  A. Hirsch
              $200,000
              $50,0001
                  Longfellow Place, Suite 3407Boston,
                  MA 12114