AMENDMENT
      NO. 4 TO SECURITY AGREEMENT




THIS
      AMENDMENT NO. 4 dated as of July 31, 2007 (this “ Amendment ”)
      to the
      Security Agreement dated 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 has entered into that certain Agreement and Plan of Merger and
      Reorganization, dated as of January 19, 2007, as amended (the “ Merger
      Agreement ”),
      by
      and among the Grantor, SBE, Inc. (“ SBE ”),
      a
      Delaware corporation 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
      Grantor with and into Merger Sub;




WHEREAS,
      the Grantor has borrowed an aggregate of $13,000,000 principal amount of senior
      secured notes (the “ Bridge
      Notes ”)
      from
      the Secured Party and other investors (collectively, in this capacity, the
      “ Bridge
      Note Investors ”)
      in
      offerings on February 28, 2006, November 20, 2006, January 22,
      2007 and June 4, 2007;




WHEREAS,
      the Grantor sold additional senior secured notes to SBE, Inc. (the “ SBE
      Note ”)
      in the
      aggregate principal amount of $1,000,000 (the “ Offering ”),
      in
      the substantially the form attached as Exhibit
      1 to that
      certain Note Purchase Agreement, dated May 18, 2007 (the “ Note
      Purchase Agreement ”),
      between the Grantor and SBE, Inc. (“ SBE ”
and
      together with the Investors previously identified in the Security Agreement
      as
      the Old Investors, as “ Investor ”);




WHEREAS,
      the Grantor intends to sell additional Senior Secured Notes, substantially
      similar to the Bridge Notes (except that (i) they are not automatically
      converted in the Merger, (ii) bear interest at 8% and (iii) may be converted
      on
      different terms) (the “July 2007 Notes”) in the principal amount of up to
      $4,000,000; and




WHEREAS,
      the parties hereto wish to amend the Security Agreement to add as Obligations
      the obligations of the Grantor under the July 2007 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 the New Note, as follows:




(a)  Schedule
      I to the
      Security Agreement is hereby amended to be and read in its entirety as Schedule
      I attached
      to this Amendment.







(b)  That
      the
      Obligations under the Security Agreement include the obligations of the Grantor
      under the Amended and Restated Notes, the New Notes, the SBE Note, the May
      2007
      Note, and the July 2007 Notes; provided that the aggregate principal amounts
      of
      the Amended and Restated Notes, the New Notes, the SBE Note, the May 2007 Notes,
      and the July 2007 Notes do not exceed $18,000,000.




(c)  The
      July
      2007 Notes shall be pari passu with the Amended and Restated Notes, the New
      Notes, the SBE Note and the May 2007 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. 4 TO SECURITY AGREEMENT


Dated
      as
      of the date first written above




THE
                GRANTOR:
            Neonode
                Inc.
              a
                Delaware corporation
              
              By:_________________________________
              Name:
                Mikael Halman
              Title:
                President & CEO
              *Address
                for Notices:*
              Biblioteksgatan
                11
              S111
                46 Stockholm, Sweden
              Attention:
                President
              Fax:
                01146-8-678-18 51SECURED
                PARTY:
            AIGH
                INVESTMENT PARTNERS, LLC
              
              By:_________________________________Name:
                Orin Hirschman
              Title:
                Manager












Schedule
      I






[To
      Be
      Updated]