**Execution
        Copy**


**NEONODE
      INC.**




**NOTE
      PURCHASE AGREEMENT**




NOTE
      PURCHASE AGREEMENT (the “ Agreement ”)
      dated
      as of July 31, 2007 among NEONODE INC., a Delaware corporation (“ Company ”)
      and
      any person who executes this agreement from time to time as a purchaser of
      Notes
      (the “ New
      Investors ”).




Background :
      The
      Company desires to sell to the New Investors, and the New Investors desire
      to
      purchase, up to $3,000,000 in principal amount of Senior Secured Notes, in
      substantially the form attached hereto as Exhibit
      1 .
      (the
“ Notes ”).




The
      Company has entered into an Agreement and Plan of Merger and Reorganization,
      dated January 19, 2007, as amended (the “ Merger
      Agreement ”),
      by
      and among the Company, SBE and Cold Winter Acquisition Corp., a Delaware
      corporation and wholly-owned subsidiary of SBE (“ Merger
      Sub ”),
      which
      provides for a merger (the “ Merger ”)
      of the
      Company with and into Merger Sub.




The
      Company sold 6% senior secured notes, due December 31, 2007, in aggregate
      principal amount of $1,000,000 to SBE (the “ SBE
      Notes ”),
      pursuant to a note purchase agreement, dated as of May 18, 2007, and the SBE
      Notes will be deemed paid in the event the Merger occurs;




On
      February 28, 2006, November 20, 2006, January 22, 2007 and May 22, 2007, the
      Company sold to certain investors (the “ Bridge
      Investors ”)
      senior
      secured notes, all due (after amendment) on December 31, 2007, in aggregate
      principal amount of $13,000,000, as described in the Proxy Statement (the
“ Bridge
      Notes ”),
      and
      in connection therewith (i) the Company entered into the Security Agreement
      with
      the Lenders and AIGH (as agent for the Bridge Investors), (ii) the Bridge
      Investors and certain other creditors of the Company entered into the
      Intercreditor Agreement, and (iii) the Pledgors entered into the Stockholder
      Pledge Agreements with the AIGH (as agent for the Bridge
      Investors).




The
      proceeds from the Notes are necessary for the development and continuance of
      the
      business of the Company and each of its Subsidiaries.




Certain
      Definitions:




“ AIGH ”
means
      AIGH Investment Partners, LLC, a Delaware limited liability
      company.




“ Capitalization
      Table ”
means
      the Capitalization Table attached as Exhibit
      7 to this
      Agreement.




“ Certificate
      of Incorporation ”
has
      the
      meaning set forth in Section 2.2. “ Closing ”
has
      the
      meaning set forth in Section 1.2. “ Closing
      Date ”
has
      the
      meaning set forth in Section 1.2.




“ Collateral ”
has
      the
      meaning set forth in the Security Agreement, as amended, a copy of which is
      included with Exhibit
      2 hereto.




“ Common
      Stock ”
shall
      mean stock of the Company of any class (however designated) whether now or
      hereafter authorized, which generally has the right to participate in the voting
      and in the distribution of earnings and assets of the Company without limit
      as
      to amount or percentage, including the Company’s Common Stock, $.01 par value
      per share.




“ Company ”
      includes the Company and any Person which shall succeed to or assume, directly
      or indirectly, the obligations of the Company hereunder.









“ Governmental
      Body ”
shall
      mean any: (a) nation, state, commonwealth, province, municipality or district;
      (b) federal, state, local, municipal, foreign or other government; or (c)
      governmental or quasi-governmental authority of any nature (including any
      governmental division, department, agency, commission, instrumentality,
      official, organization, unit, body or entity and any court or other
      tribunal).




“ Guaranties ”
means
      the respective guaranties, dated February 28, 2006, as amended, delivered to
      the
      investors identified on Exhibit
      A of the
      Stockholder Pledge Agreements, respectively, copies of which are included with Exhibit
      4 hereto.




“ Guarantors ”
means
      each of Thomas Erickson, Magnus Goertz and Per Bystedt, each as a party to
      his
      respective Guaranty.




“ Intercreditor
      Agreement ”
means
      the Intercreditor Agreement, dated February 28, 2006, as amended, between the
      Bridge Investors and Petrus.




“ Material
      Adverse Change ”
shall
      mean any change in the facts represented by the Company in the Agreement or
      the
      business, financial condition, results of operation, prospects, properties
      or
      operations of the Company and its Subsidiaries taken as a whole which may have
      a
      material adverse effect on the value of the Common Stock of the
      Company.




“ Material
      Adverse Effect ”
shall
      mean a material adverse effect on the operations, assets, liabilities, financial
      condition, prospects or business of the Company.




“ Merger ”
has
      the
      meaning set forth in the recitals.




“ Merger
      Agreement ”
has
      the
      meaning set forth in the recitals. “ Neonode
      AB ”
means
      Neonode AB, a Swedish corporation. “ Notes ”
has
      the
      meaning set forth in the recitals.




“ Own ”
shall
      mean own beneficially, as that term is defined in the rules and regulations
      of
      the SEC.




“ Petrus ”
means
      Petrus Holdings, SA, a corporation organized under the laws of
      Luxembourg.




“ Person ”
means
      any individual, sole proprietorship, partnership, corporation, limited liability
      company, business trust, unincorporated association, joint stock corporation,
      trust, joint venture or other entity, any university or similar institution,
      or
      any government or any agency or instrumentality or political subdivision
      thereof.




“ Pledged
      Collateral ”
has
      the
      meaning set forth in the Stockholder Pledge Agreements, as amended, copies
      of
      which are included with Exhibit
      3 hereto.




“ Pledgors ”
means
      Rector AB (or its successor in interest, Athemis Limited), Iwo Jima Sari and
      Wirelesstoys Sweden AB, each as a party to its respective Stockholder Pledge
      Agreement.




“ Proprietary
      Assets ”
shall
      mean any: (i) patent, patent application, trademark (whether registered or
      unregistered), trademark application, trade name, fictitious business name,
      service mark (whether registered or unregistered), service mark application,
      copyright (whether registered or unregistered), copyright application, maskwork,
      maskwork application, trade secret, know-how, customer list, franchise, system,
      computer software, computer program, invention, design, blueprint, engineering
      drawing, proprietary product, technology, proprietary right or other
      intellectual property right or intangible asset relating to the foregoing;
      or
      (ii) right to use or exploit any of the foregoing.




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“ Proxy
      Statement ”
means
      the SBE Notice of Special Meeting of Stockholders, dated July 3, 2007, as
      amended.




“ Required
      Holders ”
means
      the holders of a majority of the principal amount of the Notes. “ SSE ”
has
      the
      meaning set forth in the recitals.




“ SBE
      Notes ”
has
      the
      meaning set forth in the recitals.




“ SEC ”
means
      the Securities and Exchange Commission.




“ Securities
      Act ”
means
      the Securities Act of 1933, as amended.




“ Security
      Agreement ”
means
      the Security Agreement, dated February 28, 2006, as amended, between the Company
      and AIGH, as agent for the Bridge Investors, a copy of which is included with Exhibit
      2 hereto.




“ Stockholder
      Pledge Agreements ”
means
      the Stockholder Pledge and Security Agreements, dated February 28, 2006, as
      amended, between the Bridge Investors and each of the Pledgors, respectively,
      copies of which are included with Exhibit
      3 hereto.




“ Subsidiary ”
shall
      mean, immediately prior to the Closing, any corporation of which stock
      or
      other interest having ordinary power to elect a majority of the board of
      directors (or other governing body) of such entity (regardless of whether or
      not
      at the time stock or interests of any other class or classes of such corporation
      shall have or may have voting power by reason of the happening of any
      contingency) is, immediately prior to the Closing, directly or indirectly Owned
      by the Company or by one or more of its Subsidiaries.




“ Transaction
      Documents ”
means
      the Agreement, the Notes, the Security Agreement, the Stockholder Pledge
      Agreement, the Guaranties, the Intercreditor Agreement and the other documents
      required in connection with the transactions contemplated in the Agreement
      (in
      each case as amended through the Closing).




“ U.S.
      person ”
shall
      have the meaning set forth in Regulation S of the SEC.




In
      consideration of the mutual covenants contained herein, the parties agree as
      follows:




1.  Purchase
      and Sale of Notes .




1.1  Sale
      and Issuance of Notes .
      The
      Company shall sell to the New Investors and the New Investors shall purchase
      from the Company, an aggregate principal amount of up to $3,000,000 of Notes
      at
      par. The principal amount of Notes to be purchased by each of the New Investors
      from the Company at the Closing (as defined herein) is set forth opposite the
      name of each New Investor on the signature page hereof, subject to acceptance,
      in whole or in part, by the Company.




1.2  Closing .
      The
      closing of the purchase and sale of up to $3,000,000 principal amount of Notes
      hereunder (the “ Closing ”)
      shall
      take place within one business day after the date hereof; provided the Company
      has not suffered any Material Adverse Change since the date hereof The date
      on
      which the Closing occurs is referred to herein as the “ Closing
      Date. ”
The
      Closing shall take place at the offices of Hahn & Hessen LLP, the Company’s
      counsel, in New York, New York, or at such other location as is mutually
      acceptable to the New Investors and the Company.




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1.3  Conditions
      of the Closing .
      The
      obligation of the New Investors to complete the purchase of the Notes at the
      Closing is subject to fulfillment of the following conditions:




(a)  the
      Company shall have executed and delivered all documents, such as financing
      statements and assignments, reasonably requested by counsel for the New
      Investors;




(b)  the
      parties to the Transaction Documents shall have executed and delivered
      amendments thereto substantially in the forms included on the exhibits to this
      Agreement; and




(c)  the
      absence of any Material Adverse Change since the date hereof.




2.  Representations
      and Warranties of the Company .
      The
      Company hereby represents and warrants to each of the New Investors as
      follows:




2.1  Corporate
      Organization; Authority; Due Authorization .




(a)  The
      Company (i) is a corporation duly organized, validly existing and in good
      standing under the laws of the jurisdiction of its incorporation, (ii) has
      the
      corporate power and authority to own or lease its properties as and in the
      places where such business is now conducted and to carry on its business as
      now
      conducted and (iii) is duly qualified and in good standing as a foreign
      corporation authorized to do business in every jurisdiction where the failure
      to
      so qualify, individually or in the aggregate, would have a Material Adverse
      Effect. Each Subsidiary is duly incorporated, and validly existing under the
      laws of its jurisdiction of incorporation and is qualified to do business as
      a
      foreign corporation in each jurisdiction in which qualification is required,
      except where failure to so qualify would not have a Material Adverse
      Effect.




(b)  The
      Company (i) has the requisite corporate power and authority to execute, deliver
      and perform this Agreement and the other Transaction Documents to which it
      is a
      party and to incur the obligations herein and therein and (ii) has been
      authorized by all necessary corporate action to execute, deliver and perform
      this Agreement and the other Transaction Documents to which it is a party and
      to
      consummate the transactions contemplated hereby and thereby (the “ Contemplated
      Transactions ”).
      Each
      of this Agreement and the other Transaction Documents is a valid and binding
      obligation of the Company enforceable in accordance with its terms except as
      limited by applicable bankruptcy, reorganization, insolvency, moratorium or
      similar laws affecting the enforcement of creditors’ rights and the availability
      of equitable remedies (regardless of whether such enforceability is considered
      in a proceeding at law or equity).




2.2  Capitalization .
      The
      authorized capital stock of the Company is 10,000,000 shares of Common Stock,
      $.01 par value per share. Except as contemplated by this Agreement and as set
      forth in the Proxy Statement, there are (i) no outstanding subscriptions,
      warrants, options, conversion privileges or other rights or agreements
      obligating the Company or Neonode AB to purchase or otherwise acquire or issue
      any shares of capital stock of the Company or Neonode AB (or shares reserved
      for
      such purpose), (ii) no preemptive rights contained in the Company’s Certificate
      of Incorporation, as amended (the “ Certificate
      of Incorporation ”),
      By-Laws of the Company or contracts to which the Company is a party (other
      than
      preemptive rights under the Bridge Notes, which have been waived) or rights
      of
      first refusal with respect to the issuance of additional shares of capital
      stock
      of the Company, and (iii) no commitments or understandings (oral or written)
      of
      the Company or Neonode AB to issue any shares, warrants, options or other
      rights. Except as disclosed in the Proxy Statement, (x) all the issued and
      outstanding shares of the Subsidiary’s capital stock have been duly authorized
      and validly issued, are fully paid and nonassessable, have been issued in
      compliance with applicable federal and state securities laws, were not issued
      in
      violation of or subject to any preemptive rights or other rights to subscribe
      for or purchase securities, (y) except as disclosed in the Proxy Statement
      or
      this Agreement, there are no outstanding options to purchase, or any preemptive
      rights or other rights to subscribe for or to purchase, any securities or
      obligations convertible into, or any contracts or commitments to issue or sell,
      shares of the Subsidiary’s capital stock or any such options, rights,
      convertible securities or obligations, and (z) the Company owns 100% of the
      outstanding equity of each Subsidiary. The Proxy Statement sets forth accurately
      and completely the capitalization of the Company as of the date hereof and
      the
      anticipated capitalization of SBE after giving effect to the Merger, but without
      giving effect to the Notes.




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2.3  Validity
      of Notes .
      The
      issuance of the Notes has been duly authorized, and the Notes, when issued,
      will
      be valid and binding obligations of the Company and upon Closing will be in
      full
      force and effect and enforceable in accordance with their respective
      terms.




2.4  Private
      Offering .
      Neither
      the Company nor anyone acting on its behalf has within the last 12 months
      issued, sold or offered any security of the Company (including, without
      limitation, any Notes) to any Person under circumstances that would cause the
      issuance and sale of the Notes, as contemplated by this Agreement, to be subject
      to the registration requirements of the Securities Act.




2.5  Brokers
      and Finders .
      The
      Company has not retained any investment banker, broker or finder in connection
      with the Contemplated Transactions. As set forth in the Proxy Statement, the
      Company has retained and will compensate Griffin Securities, Inc., as an advisor
      in connection with the Merger.




2.6  Financial
      Statements; Absence of Certain Changes .
      Each of
      (a) the unaudited balance sheet of the Company as of March 31, 2007, (b) the
      unaudited statements of income, retained earnings and cash flows of the Company
      for the period ended on March 31, 2007, and (c) the unaudited statements of
      income, retained earnings and cash flows of the Company for the period ended
      on
      March 31, 2007, included in the Proxy Statement (including any related notes
      and
      schedules, if any), (the “ Financial
      Statements ”)
      fairly
      presents, in all material respects, the financial position of the Company,
      or
      the results of operations, retained earnings or cash flows, as the case may
      be,
      of the Company as of the referenced date or for the periods set forth therein
      (subject to normal year-end audit adjustments which would not be material in
      amount or effect), in each case in accordance with generally accepted accounting
      principles consistently applied during the periods involved, except as may
      he
      noted therein and that the unaudited statements may not contain all footnotes
      required by generally accepted accounting principles. Neither the Company nor
      any Subsidiary has any liabilities or obligations of any nature (whether
      accrued, absolute, contingent or otherwise), including for taxes, that would
      be
      required to be reflected on, or reserved against in, Financial Statements,
      except for (i) liabilities or obligations that were so reserved on, or reflected
      in (including the notes to), the Financial Statements; and (ii) liabilities
      or
      obligations which would not, individually or in the aggregate, have a Material
      Adverse Effect. Other than the indebtedness as set forth in the Financial
      Statements or the Proxy Statement, neither the Company nor any Subsidiary has
      any indebtedness other than reasonable accounts payable. Except as specifically
      contemplated by this Agreement or as set forth in the Proxy Statement (including
      without limitation continuing losses of the Company) and the Financial
      Statements, there has not been any Material Adverse Change since March 31,
      2007.




2.7  Company
      Disclosure .
      No
      representation or warranty of the Company herein, no exhibit or schedule hereto,
      and no information about the Company contained or referenced in the Proxy
      Statement, when read together, contains or will contain any untrue statement
      of
      a material fact or omits or will omit to state a material fact necessary in
      order to make the statements contained herein or therein, in light of the
      circumstances under which they were made, not misleading.




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3.  Representations
      and Warranties of the New Investors .
      Each
      New Investor represents and warrants to the Company as follows:




3.1  Authorization .
      Such
      New Investor (i) has full power and authority to execute, deliver and perform
      this Agreement and the other Transaction Documents to which it is a party and
      to
      incur the obligations herein and therein and (ii) if applicable has been
      authorized by all necessary corporate or equivalent action to execute, deliver
      and perform this Agreement and the other Transaction Documents and to consummate
      the Contemplated Transactions. Each of this Agreement and the other Transaction
      Documents to which the New Investors are parties is a valid and binding
      obligation of such New Investor enforceable in accordance with its terms, except
      as limited by applicable bankruptcy, reorganization, insolvency, moratorium
      or
      similar laws affecting the enforcement of creditors’ rights and the availability
      of equitable remedies (regardless of whether such enforceability is considered
      in a proceeding at law or equity).




3.2 Brokers
      and Finders .
      Such
      New Investor has not retained any investment banker, broker or finder in
      connection with the Contemplated Transactions.




3.3 The
      Notes
      to be received by such New Investor will be acquired for investment for such
      New
      Investor’s own account, not as a nominee or agent, and not with a view to the
      resale or distribution of any part thereof such that such New Investors would
      constitute an “underwriter” under the Securities Act.




3.4 Such
      New
      Investor understands and acknowledges that the offering of the Notes pursuant
      to
      this Agreement will not be registered under the Securities Act or qualified
      under any state securities laws on the grounds that the offering and sale of
      the
      Notes are exempt from registration and qualification, respectively, under the
      Securities Act and the Blue Sky Laws.




3.5 Such
      New
      Investor represents that (i) such New Investor is able to fend for itself in
      the
      Contemplated Transactions; (ii) such New Investor has such knowledge and
      experience in financial and business matters as to be capable of evaluating
      the
      merits and risks of such New Investor’s prospective investment in the Notes;
      (iii) such New Investor recognizes that its investment in the Notes involves
      a
      high degree of risk which may result in the loss of the total amount of its
      investment and can afford the complete loss of such investment (iv) such New
      Investor recognizes that the Company has a very limited operating history upon
      which an evaluation of its business and prospects can be based; (v) such New
      Investor recognizes that the Company’s prospects must be considered in light of
      its limited operating history, together with the expenses, difficulties,
      uncertainties and delays frequently encountered in connection with the early
      phases of a new business; and (vi) such New Investor recognizes that there
      can
      be no assurance that the Company will ever achieve any time soon or sustain
      profitability.




3.6 Such
      New
      Investor received a copy of the Proxy Statement prior to the date hereof. Such
      New Investor has read and had the opportunity to discuss with management of
      the
      Company: (i) this Agreement, (ii) the Merger and (iii) the Proxy Statement,
      including without limitation the risk factors set forth therein.




3.7 If
      the
      New Investor is a U.S. person, (i) such New Investor qualifies as an “accredited
      investor” as such term is defined under Rule 501 promulgated under the
      Securities Act, and (ii) such New Investor, if it is a corporation, a
      partnership, a limited liability company, a trust or other business entity,
      has
      not been organized for the purpose of purchasing the Notes.




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3.8 If
      the
      New Investor is a non U.S. person (each, a “ Non-U.S.
      Purchaser ”),
      (i)
      such Non-U.S. Purchaser is not a U.S. person; (ii) such Non-U.S. Purchaser
      was
      outside the United States at the time the offer to sell the Notes was made
      and
      at the time the buy order for the Notes was originated; (iii) such Non-U.S.
      Purchaser will not offer or sell the Notes, or any securities of the Company
      received in respect thereof, to a U.S. person or for the account or benefit
      of a
      U.S. person (other than a distributor), for a period of one year commencing
      on
      the Closing.




3.9 Such
      New
      Investor acknowledges that (i) the SBE Notes maybe paid prior to the Notes
      and
      (ii) the Bridge Notes, which are generally on a par with the Notes, bear
      interest at 4% per annum, will be converted in event the Merger occurs on
      different terms than the Notes may be converted and have different conversion
      rights in the event the Merger is not completed.




4. Securities
      Laws; Certain Covenants of New Investors .




4.1 Each
      New
      Investor agrees that the Notes and any securities of the Company received in
      respect of the foregoing held by it may not be sold by such New Investor without
      registration under the Securities Act or an exemption therefrom, and therefore
      such New Investor may be required to hold such securities for an indeterminate
      period.




4.2 Each
      New
      Investor agrees that the obligations under the Notes shall be subject to the
      Security Agreement, Stockholder Pledge Agreement and the Intercreditor
      Agreement, each as amended as contemplated herein. AIGH shall have no duty
      to
      the New Investor arising out of its actions or failure to act under the Security
      Agreement, Stockholder Pledge Agreement, the Intercreditor Agreement or
      Guaranties, each as amended as contemplated herein, provided that AIGH shall
      apply the same standard of care as it would use in determining whether to act
      under such agreements in its capacity as a Bridge Investor.




4.3 Each
      New
      Investor agrees to indemnify AIGH from and against any and all reasonable
      claims, losses, and liabilities (including, without limitation, reasonable
      attorney fees) arising out of or resulting from the Notes, Security Agreement,
      Stockholder Pledge Agreement, the Intercreditor Agreement or Guaranties, except
      claims, losses, or liabilities resulting from the gross negligence or willful
      misconduct of AIGH.




4.4 Each
      New
      Investor will upon demand pay the amount of any and all reasonable expenses,
      including, without limitation, the reasonable fees and expenses of counsel
      and
      of any experts and agents, which AIGH may incur in connection with (i) the
      preparation and administration of the Security Agreement, Stockholder Pledge
      Agreement, the Intercreditor Agreement or Guaranties, each as amended as
      contemplated herein; (ii) the exercise or enforcement of any of the rights
      of
      AIGH or the New Investor thereunder; or (iii) the failure by the New Investor
      to
      perform or observe any of the provisions hereof or thereof.




4.5 Each
      New
      Investor hereby waives any and all preemptive rights or other rights to acquire
      any securities of the Company or any of its Subsidiaries relating to or in
      connection with the offering or sale of the Notes or the Merger.




4.6 Each
      New
      Investor hereby appoints AIGH as its agent under the Security Agreement with
      respect to the Collateral and the creation, perfection, priority, preservation,
      protection and enforcement of a security interest therein in accordance with
      the
      terms of the Security Agreement. Each New Investor hereby authorizes AIGH to
      take such actions with respect to the Collateral, for the pro-rata benefit
      of
      the New Investors and the Bridge Investors in accordance with Section 9 of
      the
      Security Agreement, as AIGH determines to take in its sole discretion, and
      each
      New Investor agrees to indemnify and hold harmless AIGH for all costs, claims
      or
      expenses (including without limitation attorneys’ fees and expenses) in
      connection with such actions taken or omitted to be taken, except to the extent
      resulting from the gross negligence or willful misconduct of AIGH. AIGH shall
      provide prompt notice of any material action under the Security Agreement to
      the
      New Investors.




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4.7 Each
      New
      Investor hereby appoints AIGH as its agent under the Stockholder Pledge
      Agreements with respect to the Pledged Collateral and the creation, perfection,
      priority, preservation, protection and enforcement of a security interest
      therein in accordance with the terms of the Stockholder Pledge Agreements.
      Each
      New Investor hereby authorizes AIGH to take such actions with respect to the
      Pledged Collateral, for the pro-rata benefit of the New Investors and the Bridge
      Investors in accordance with Section 9 of the Stockholder Pledge Agreements,
      as
      AIGH determines to take in its sole discretion, and each New Investor agrees
      to
      indemnify and hold harmless AIGH for all costs, claims or expenses (including
      without limitation attorneys’ fees and expenses) in connection with such actions
      taken or omitted to be taken, except to the extent resulting from the gross
      negligence or willful misconduct of AIGH. AIGH shall provide prompt notice
      of
      any material action under the Stockholder Pledge Agreements to the New
      Investors.




5. Additional
      Covenants of the Company .




5.1 Form
      D .
      As soon
      as is practicable following the Closing, the Company shall prepare and file
      with
      the SEC a Form D concerning the sale of the Notes.




5.2 Financial
      Reports and Tax Returns .
      Until
      the Company is a public company required to file financial reports with the
      U.S.
      Securities and Exchange Commission, the Company will furnish or will cause
      to be
      furnished to each New Investor:




(a) within
      90
      days after the end of each fiscal quarter and fiscal year of the Company,
      respectively, financial statements (including income statement and balance
      sheet) in accordance with generally accepted accounting standards (except that
      interim financial statements need not contain footnotes or normal year-end
      adjustments); and




(b) within
      90
      days after the end of each fiscal year of the Company, an independent certified
      audit of financial statements for such fiscal year.




6. Miscellaneous .




6.1 Entire
      Agreement; Successors and Assigns .
      This
      Agreement and the other Transaction Documents constitute the entire contract
      between the parties relative to the subject matter hereof and thereof, and
      no
      party shall be liable or bound to the other in any manner by any warranties,
      representations or covenants except as specifically set forth herein or therein.
      This Agreement and the other Transaction Documents supersede any previous
      agreement among the parties with respect to the Notes. The terms and conditions
      of this Agreement shall inure to the benefit of and be binding upon the
      respective executors, administrators, heirs, successors and assigns of the
      parties. Except as expressly provided herein, nothing in this Agreement,
      expressed or implied, is intended to confer upon any party, other than the
      parties hereto, any rights, remedies, obligations or liabilities under or by
      reason of this Agreement.




6.2 Survival
      of Representations and Warranties .
      All
      representations and warranties of the Company shall survive the execution and
      delivery of this Agreement and the Closing hereunder and shall continue in
      full
      force and effect for one year after the Closing. The covenants of the Company
      set forth in Section 5 shall remain in effect as set forth therein.




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6.3 Governing
      Law; Jurisdiction .
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of New York without regard to principles of conflicts of law. Each party
      hereby irrevocably consents and submits to the jurisdiction of any New York
      State or United States Federal Court sitting in the State of New York, County
      of
      New York, over any action or proceeding arising out of or relating to this
      Agreement and irrevocably consents to the service of any and all process in
      any
      such action or proceeding by registered mail addressed to such party at its
      address specified in Section 6.6 (or as otherwise noticed to the other party).
      Each party further waives any objection to venue in New York and any objection
      to an action or proceeding in such state and county on the basis of forum non
      conveniens. Each party also waives any right to trial by jury.




6.4 Counterparts .
      This
      Agreement maybe executed in two or more counterparts, each of which shall be
      deemed an original, but all of which together shall constitute one and the
      same
      instrument.




6.5 Headings .
      The
      headings of the sections of this Agreement are for convenience and shall not
      by
      themselves determine the interpretation of this Agreement.




6.6 Notices .
      Any
      notice required or permitted hereunder shall be given in writing and shall
      be
      deemed effectively given upon (i) personal delivery, (ii) delivery by fax (with
      answer back confirmed) or (iii) delivery by electronic mail (with reception
      confirmed), addressed to a party at its address or sent to the fax number or
      e-mail address shown below or at such other address, fax number or e-mail
      address as such party may designate by three days advance notice to the other
      party.




Any
      notice to New Investors shall be sent to the addresses set forth on the
      signature pages hereof.




Any
      notice to the Company shall be sent to:




Neonode
      Inc.


Biblioteksgatan
      11


S
      111 46
      Stockholm, Sweden


Attention:
      President


Fax
      Number: +46-8-678 1 S 51




with
      a
      copy to:




Hahn
      & Hessen LLP


488
      Madison Avenue


New
      York,
      New York 10022


Attention:
      James Kardon, Esq.


Fax
      Number: (212) 478-7400




6.7 Rights
      of Transferees .
      Any and
      all rights and obligations of the New Investor herein incident to the ownership
      of Notes shall pass successively to all subsequent transferees of such
      securities until extinguished pursuant to the terms hereof.




6.8 Severability .
      Whenever possible, each provision of this Agreement shall be interpreted in
      such
      a manner as to be effective and valid under applicable law, but if any provision
      of this Agreement shall be deemed prohibited or invalid under such applicable
      law, such provision shall be ineffective to the extent of such prohibition
      or
      invalidity, and such prohibition or invalidity shall not invalidate the
      remainder of such provision or any other provision of this
      Agreement.




-
          9
          -




6.9 Expenses .
      Irrespective of whether the Closing is effected, the Company shall pay all
      costs
      and expenses that it incurs with respect to the negotiation, execution, delivery
      and performance of this Agreement. Each New Investor shall he responsible for
      all costs incurred by such New Investor in connection with the negotiation,
      execution, delivery and performance of this Agreement including, but not limited
      to, legal fees and expenses.




6.10 Amendments
      and Waivers .
      Unless
      a particular provision or section of this Agreement requires otherwise
      explicitly in a particular instance, any provision of this Agreement maybe
      amended and the observance of any provision of this Agreement may be waived
      (either generally or in a particular instance and either retroactively or
      prospectively), only with the written consent of the Company and the Required
      Holders. Any amendment or waiver effected in accordance with this Section 6.10
      shall be binding upon each holder of any Notes at the time outstanding
      (including securities into which such Notes are convertible), each future holder
      of all such Notes, and the Company.




6.11 Conflicts .
      The
      Company and each New Investor (i) acknowledge that Hahn & Hessen LLP,
      counsel to the Company in the Contemplated Transactions and the Merger, has
      acted, and from time to time continues to act, as counsel to (A) certain of
      the
      Bridge Investors, or affiliates thereof, in connection with the Notes, and
      (B)
      AIGH in connection with the Notes, the Security Agreement, the Pledge
      Agreements, investments in SBE, and in unrelated matters, (ii) consent to the
      representation of the Company and such other representation of certain of the
      Bridge Investors, or affiliates thereof, by Hahn & Hessen LLP, (iii)
      acknowledge that partners of Hahn & Hessen LLP own securities of SBE
      constituting less than 0.2% of outstanding stock of SBE and $15,000 in principal
      amount of Bridge Notes, and (iv) waive any conflicts of interest claim which
      may
      arise from any or all of the foregoing.




[signature
      page follows]




-
          10
          -


SIGNATURE
      PAGE


TO


NEONODE
      INC.


NOTE
      PURCHASE AGREEMENT


Dated
      July 31, 2007




IF
      the
      PURCHASER is an INDIVIDUAL, please complete the following:




IN
      WITNESS WHEREOF, the undersigned has executed this Agreement as of the ____
      day
      of July, 2007, and execution of this Agreement shall constitute consent to
      joinder as a party to, subject to, or beneficiary of the applicable Stockholder
      Pledge Agreement, Guaranties, and Security Agreement, each as
      amended.




Amount
      of
      Subscription:


$  principal amount of Notes





Print
                NameSignature
                of New InvestorSocial
                Security NumberAddress
                and Fax NumberE-mail
                Address




ACCEPTED
                AND AGREED:NEONODE
                INC.By:Dated:








SIGNATURE
      PAGE


TO


NEONODE
      INC.


NOTE
      PURCHASE AGREEMENT


Dated
      July 31, 2007




IF
      the
      PURCHASER is a PARTNERSHIP, CORPORATION, LIMITED LIABILITY COMPANY, TRUST or
      OTHER ENTITY, please complete the following:




IN
      WITNESS WHEREOF, the undersigned has executed this Agreement as of the _____
      day
      of July, 2007, and execution of this Agreement shall constitute consent to
      joinder as a party to, subject to or beneficiary of the applicable Stockholder
      Pledge Agreement, Guaranties, Intercreditor Agreement and Security Agreement,
      each as amended.




Amount
      of
      Subscription:


$  principal amount of Notes





Print
                Full Legal Name of Partnership, Company,
              Limited
                Liability Company, Trust or Other EntityBy:(Authorized
                Signatory)




Name:


Title:


Address and Fax Number:




Taxpayer Identification Number:




Date and State of Incorporation or Organization:


Date on which Taxable Year Ends:




E-mail Address:




ACCEPTED
      AND AGREED:




NEONODE
      INC.





By:Name:Title:Dated:








EXHIBITS


TO
      THE
      NOTE PURCHASE AGREEMENT




Exhibit
              1:
            Form
                of Notes




Exhibit
              2:
            Form
                of Amendment No. 4 to Security Agreement, Amendment No. 3 to Security
                Agreement, Amendment No. 2 to Security Agreement, Amendment No. 1
                to
                Security Agreement, and Security
                Agreement




Exhibit
              3:
            Form
                of Amendment No. 4 to Stockholder Pledge Agreement, Amendment No.
                3 to
                Stockholder Pledge Agreement, Amendment No. 2 to Stockholder Pledge
                Agreement, Amendment No. 1 to Stockholder Pledge Agreement, and
                Stockholder Pledge Agreement for each
                of:




Iwojima
      Sari


Athemis
      Limited


Wirelesstoys
      Sweden AB




Exhibit
              4:
            Form
                of Amendment No. 4 to Guaranty, Amendment No. 3 to Guaranty, Amendment
                No.
                2 to Guaranty, Amendment No. 1 to Guaranty, and Guaranty for each
                of:





Per
      Bystedt


Thomas
      Eriksson


Magnus
      Goertz