INTERCREDITOR
      AGREEMENT




THIS
      INTERCREDITOR AGREEMENT (“ Agreement ”)
      dated
      as of February 28, 2006, is among AIGH INVESTMENT PARTNERS LLC, a Delaware
      limited liability company with offices located at 6006 Berkeley Avenue,
      Baltimore, Maryland 21209 (“ AIGH ”)
      and
      PETRUS HOLDINGS S.A., a corporation organized under the laws of Luxembourg
      (“ Petrus ”).






RECITALS




WHEREAS,
      Neonode Inc, a Delaware corporation, owns all the issued and outstanding shares
      of Neonode AB, a corporation organized under the laws of Sweden, at the date
      hereof.




WHEREAS,
      Neonode Inc may issue under a Note Purchase Agreement, Notes up to an aggregate
      amount of $5,500,000 to AIGH.




WHEREAS,
      Neonode AB has issued certain indebtedness to Petrus in an amount of SEK
      5,353,000.




WHEREAS,
      AIGH and Petrus desire to set forth the status of the respective obligations
      owed to them.




1.  Ranking




1.1  AIGH
      and
      Petrus hereby agree that any indebtedness of either Neonode Inc or Neonode
      AB,
      as the case may be, owing to either one of them will rank, as to both of them,
      equally ( *pari
      passu* ).




1.2  If
      either
      AIGH or Petrus, as the case may be, receives any payment with respect to such
      indebtedness including as a result of any realization on any collateral security
      for such indebtedness, it shall pay one to the other so much of such payment
      so
      that each of AIGH and Petrus shall receive an amount in proportion to the amount
      of such indebtedness held by it compared with the total amount of all such
      indebtedness.




2.  Subordination




AIGH
      and
      Petrus hereby agree that all indebtedness of Neonode Inc and Neonode AB held
      by
      them shall be subordinated in right of payment to all indebtedness of Neonode
      AB
      to Almi Foretagspartner AB, a corporation organized under the laws of
      Sweden.




3.  Severability




In
      case
      any one or more of the provisions contained in this Agreement or in any
      instrument contemplated hereby, or any application thereof, shall be invalid,
      illegal or unenforceable in any respect, the validity, legality and
      enforceability of the remaining provisions contained herein and therein, and
      any
      other application thereof, shall not in any way be affected or impaired
      thereby.







4.  Successor
      and Assigns




This
      Agreement shall be binding upon AIGH and Petrus and their respective successors
      and assigns and shall inure to the benefit of AIGH and Petrus and their
      respective successors and assigns.




5.  Counterparts




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




6.  Amendment;
      Waiver, Etc.




Neither
      this Agreement nor any term hereof may be amended, waived, discharged or
      terminated except in a writing signed by the party against whom enforcement
      of
      such amendment, waiver, discharge or termination is sought.




7.  Headings




The
      headings in this Agreement are for convenience of reference only and shall
      not
      limit or otherwise affect any of the terms hereof.




8.  Notices




All
      notices permitted or required to be given by or among AIGH and Petrus under
      this
      Agreement shall be in writing and shall be deemed to be duly given if given
      personally with receipt acknowledged or sent by registered or certified mail
      or
      by facsimile (which shall be confirmed by a writing sent by registered or
      certified mail on the same day that such facsimile transmission is sent), or
      by
      overnight courier for next day delivery, addressed to the parties at their
      addresses or facsimile numbers set forth below, unless notice in writing is
      given of a change of address or facsimile number in the manner set forth herein,
      in which case notices shall be sent to the new address or facsimile number
      as
      designated. Notice of change of address or facsimile number shall be deemed
      given when actually received or upon refusal to accept delivery thereof; all
      other notices shall be deemed given and received on the earlier of (a) when
      actually received or upon refusal to accept delivery thereof, or (b) one
      business day after being sent by facsimile or overnight courier and four days
      after mailing, as aforesaid.




Petrus:
            Petrus
                Holding S.A.
              Attention:
                Telephone:
                Facsimile:
                Email:









AIGH:
            AIGH
                Investment Partners LLC
              6006
                  Berkeley Avenue
                Baltimore,
                  Maryland 21209
                Attention:Orin
                  Hirschman, Managing member
                Telephone:+1-410-415-6464
                Facsimile:+1-212-751-2892
                Email:orin@adamsmithco.com




9.  Governing
      Law




This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of New York.




10.  Termination




Except
      with respect to any obligations hereunder which are expressly stated to survive
      the termination hereof, this Agreement shall terminate on the date on which
      the
      Neonode Inc and Neonode AB indebtednesses have been fully and indefeasibly
      paid
      in full.




IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
      executed as of the date first written above.


AIGH INVESTMENT PARTNERS LLCBy:Name:Title:


PETRUS HOLDING S.A.By:Name:Title:




Receipt
      Acknowledged




ALMI
      FORETAGSPARTNER AB










By:


Its: