EXHIBIT NUMBER 10.1

                                    EXECUTIVE
                          SEVERANCE BENEFITS AGREEMENT


      THIS EXECUTIVE SEVERANCE BENEFITS AGREEMENT (the "AGREEMENT") is entered
into as of the 24TH day of MAY, 2006 (the "Effective Date"), between LEO FANG
("EXECUTIVE") and SBE, INC. (the "COMPANY"). This Agreement is intended to
provide Executive with the compensation and benefits described herein upon the
occurrence of specific events. Certain capitalized terms used in this Agreement
are defined in Article 5.

      The Company and Executive hereby agree as follows:

                                    ARTICLE 1

                  SCOPE OF AND CONSIDERATION FOR THIS AGREEMENT

      1.1 Executive is currently employed by the Company.

      1.2 The  Company  and  Executive  wish to set forth the  compensation  and
benefits  that  Executive  shall  be  entitled  to  receive  in the  event  of a
termination  of  Executive's  employment  with the Company in the  circumstances
described in this Agreement.

      1.3 The duties and  obligations  of the  Company to  Executive  under this
Agreement  shall  be in  consideration  for  Executive's  past  services  to the
Company, Executive's continued employment with the Company, and, with respect to
the  benefits  described  in Article 2,  Executive's  execution  of a release in
accordance with Section 3.1.

      1.4 This Agreement shall  supersede any other  agreement  relating to cash
compensation benefits in the event of Executive's severance from employment with
the Company.

                                    ARTICLE 2

                               SEVERANCE BENEFITS

      2.1 CHANGE IN CONTROL TERMINATION.  If Executive's  employment  terminates
due to a Change in Control  Termination,  as defined in Section  5.4,  Executive
will be entitled to receive the benefits set forth in subsections 2.2(a) through
2.2(c).

      2.2 (A) SALARY CONTINUATION. Executive shall continue to receive an amount
equal to six (6) months of Base Salary,  as defined in Section 5.1.  Such amount
shall be paid in equal monthly  installments  over the six (6) months  following
Executive's  Change in Control  Termination and shall be subject to all required
tax withholding.


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      2.3 BONUS PAYMENT.  Within fifteen (15) days following the last day of the
fiscal quarter during which Executive's  Change in Control  Termination  occurs.
Executive shall receive the pro-rata share of any bonus to which Executive would
have been entitled had Executive's  employment with the Company  continued.  The
bonus  amount  paid will be the product of the bonus  percentage  of Base Salary
derived per the  Executive's  bonus plan  multiplied by Executive's  Base Salary
from  the  beginning  of  the  Fiscal  Year  through  the  date  of  Executive's
Involuntary  Termination  Without  Cause.  Such payment  shall be subject to all
required tax withholding.

            (A)  ACCELERATION  OF OPTION  VESTING.  Effective  as of the date of
Executive's Change in Control Termination, Executive shall be credited with full
vesting under all options to purchase the Company's  Common Stock that Executive
holds on such date. By entering into this Agreement, Executive acknowledges that
Executive  understands that such  acceleration may result in some of Executive's
incentive stock options being reclassified as nonqualified stock options,  which
could result in adverse tax consequences to Executive.

      2.4  NON-DUPLICATION OF BENEFITS.  Notwithstanding any of the foregoing to
the  contrary,  to the extent that  Executive  is eligible to receive  severance
benefits  under  Section  2.2  above  due  to  Executive's   Change  in  Control
Termination, Executive shall not be entitled to receive severance benefits under
Section 2.1 above. Executive shall not be eligible to receive severance benefits
pursuant to this Agreement more than one time.

      2.5  MITIGATION.   Except  as  otherwise   specifically  provided  herein,
Executive shall not be required to mitigate damages or the amount of any payment
provided  under this  Agreement by seeking other  employment  or otherwise,  nor
shall the amount of any payment  provided for under this Agreement be reduced by
any  compensation  earned by  Executive  as a result of  employment  by  another
employer or by any retirement  benefits  received by Executive after the date of
Executive's Change in Control Termination.


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      2.6 LIMITATIONS AND CONDITIONS ON BENEFITS

      2.7  RELEASE  PRIOR  TO  PAYMENT  OF  BENEFITS.  Upon  the  occurrence  of
Executive's  Change in Control  Termination  that  occurs at any time other than
during the six (6) months  following the effective  date of a Change in Control,
and prior to the payment of any benefits under this Agreement on account of such
termination,  Executive  shall execute a release (the "Release") in the form (or
in a substantially similar form to that) attached hereto and incorporated herein
as  Exhibit  A,  Exhibit B or  Exhibit  C, as  applicable.  Such  Release  shall
specifically  relate to all of Executive's rights and claims in existence at the
time of such  execution  and shall  confirm  Executive's  obligations  under the
Company's standard form of proprietary  information and inventions agreement. It
is understood  that,  as specified in the  applicable  Release,  Executive has a
certain number of calendar days to consider whether to execute such Release, and
Executive may revoke such Release  within seven (7) calendar days after he signs
it. If Executive does not execute such Release within the applicable  period, or
if Executive revokes such Release within the subsequent seven (7) day period, no
benefits shall be payable under this Agreement, and this Agreement shall be null
and void.

      2.8 PARACHUTE PAYMENTS.  If any payment or benefit Executive would receive
pursuant to a Change in Control from the Company or otherwise  ("Payment") would
(i) constitute a "parachute  payment"  within the meaning of Section 280G of the
Internal  Revenue Code of 1986, as amended (the  "Code"),  and (ii) but for this
sentence,  be subject to the excise tax imposed by Section 4999 of the Code (the
"Excise  Tax"),  then such Payment shall be reduced to the Reduced  Amount.  The
"Reduced  Amount"  shall be either (x) the largest  portion of the Payment  that
would result in no portion of the Payment being subject to the Excise Tax or (y)
the largest  portion,  up to and including the total, of the Payment,  whichever
amount,  after  taking into  account  all  applicable  federal,  state and local
employment taxes,  income taxes, and the Excise Tax (all computed at the highest
applicable  marginal  rate),  results in  Executive's  receipt,  on an after-tax
basis,  of the greater  amount of the Payment  notwithstanding  that all or some
portion of the  Payment  may be subject to the Excise  Tax.  If a  reduction  in
payments or benefits constituting  "parachute payments" is necessary so that the
Payment equals the Reduced Amount,  reduction shall occur in the following order
unless Executive elects in writing a different order  (provided,  however,  that
such election shall be subject to Company  approval if made on or after the date
on which  the  event  that  triggers  the  Payment  occurs):  reduction  of cash
payments;  cancellation  of  accelerated  vesting of stock awards;  reduction of
employee  benefits.  In the event that  acceleration  of vesting of stock  award
compensation is to be reduced,  such  acceleration of vesting shall be cancelled
in the reverse  order of the date of grant of  Executive's  stock awards  unless
Executive elects in writing a different order for cancellation.

      The  accounting  firm engaged by the Company for general audit purposes as
of the day prior to the  effective  date of the Change in Control  shall perform
the foregoing calculations.  If the accounting firm so engaged by the Company is
serving as accountant or auditor for the  individual,  entity or group effecting
the  Change in  Control,  the  Company  shall  appoint a  nationally  recognized
accounting firm to make the determinations required hereunder. The Company shall
bear all expenses with respect to the  determinations  by such  accounting  firm
required to be made hereunder.


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      The accounting  firm engaged to make the  determinations  hereunder  shall
provide its calculations,  together with detailed supporting  documentation,  to
the Company and  Executive  within  fifteen (15) calendar days after the date on
which  Executive's right to a Payment is triggered (if requested at that time by
the  Company or  Executive)  or such other time as  requested  by the Company or
Executive.  If the accounting firm determines that no Excise Tax is payable with
respect to a Payment,  either  before or after the  application  of the  Reduced
Amount,  it shall furnish the Company and Executive  with an opinion  reasonably
acceptable to Executive  that no Excise Tax will be imposed with respect to such
Payment.  Any good faith  determinations  of the accounting  firm made hereunder
shall be final, binding and conclusive upon the Company and Executive.

      2.9 CERTAIN REDUCTIONS AND OFFSETS. Notwithstanding any other provision of
this  Agreement to the contrary,  any benefits  payable to Executive  under this
Agreement shall be reduced by any severance  benefits  payable by the Company to
such individual under any other policy, plan, program or arrangement, including,
without limitation, a contract between Executive and any entity. Furthermore, to
the extent that any federal, state or local laws, including, without limitation,
so-called "plant closing" laws, require the Company to give advance notice, make
a  payment  of any  kind  or  provide  any  benefits  to  Executive  because  of
Executive's involuntary  termination due to a layoff,  reduction in force, plant
or facility closing,  sale of business,  change in control, or any other similar
event or reason,  the payments and other  benefits  payable under this Agreement
shall be reduced by the full  amount and to the extent of such  notice,  payment
and/or  benefits.  The benefits  provided  under this  Agreement are intended to
satisfy  any and all  statutory  obligations  that may arise out of  Executive's
involuntary termination of employment for the foregoing reasons, and the parties
shall so construe and enforce the terms of the Agreement.

                                    ARTICLE 3

                            OTHER RIGHTS AND BENEFITS

Nothing in the Agreement shall prevent or limit Executive's continuing or future
participation  in any  benefit,  bonus,  incentive  or  other  plans,  programs,
policies  or  practices  provided by the  Company  and for which  Executive  may
otherwise  qualify,  nor shall  anything  herein limit or otherwise  affect such
rights as Executive may have under other  agreements  with the Company except as
provided in Section 1.4 above.  Except as otherwise  expressly  provided herein,
amounts which are vested  benefits or which  Executive is otherwise  entitled to
receive  under any plan,  policy,  practice  or  program  of the  Company  at or
subsequent  to the  effective  date of a Change in  Control  shall be payable in
accordance with such plan, policy, practice or program.

                                    ARTICLE 4

                                   DEFINITIONS

      For purposes of the Agreement, the following terms are defined as follows:

      4.1 "BASE SALARY" means Executive's annual base salary as in effect on the
date of his termination.

      4.2 "BOARD" means the Board of Directors of the Company.


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      4.3 "CHANGE IN CONTROL" means:

            (A) the sale of all or substantially  all of the Company's assets to
a single purchaser or a group of related purchasers;

            (B)  the  sale,   exchange  or  other   disposition,   in  a  single
transaction,  of more than  fifty  percent  (50%) of the  Company's  outstanding
capital stock; or

            (C) a  merger  or  consolidation  of the  Company  in a  transaction
following which the Company's stockholders receive less than fifty percent (50%)
of the outstanding voting shares of the surviving entity.

      4.4  "CHANGE  IN CONTROL  TERMINATION"  means an  Involuntary  Termination
Without  Cause or a  Voluntary  Termination  for Good  Reason,  effective  as of
Executive's  termination  date,  either of which  occurs  within  six (6) months
following the effective date of a Change in Control.

      4.5  "COMPANY"  means SBE,  Inc.  or,  following a Change in Control,  the
surviving entity resulting from such transaction.

      4.6 "INVOLUNTARY TERMINATION WITHOUT CAUSE" means Executive's dismissal or
discharge for reasons other than Cause, effective as of Executive's  termination
date. For this purpose,  "Cause" means that, in the reasonable  determination of
the Company, Executive has

            (A) been convicted of or pled guilty or nolo  contendere to a felony
or any crime involving moral turpitude or dishonesty;

            (B)  participated  in a  fraud  or act  of  dishonesty  against  the
Company,

            (C) willfully and materially breached a Company policy;

            (D) intentionally damaged the Company's property;

            (E)  willfully  and  materially  breached  Executive's   Proprietary
Information and Inventions Agreement with the Company;

            (F) engaged in conduct that  demonstrates  gross unfitness to serve;
or

            (G)  failed to  perform  Executive's  job  duties in a  satisfactory
manner,  including,  but not  limited  to, by  engaging  in willful  misconduct,
neglecting Executive's job duties,  refusing to comply with any lawful directive
of the Company, or failing to meet expected performance standards.

Notwithstanding the foregoing,  Cause shall not exist based on conduct described
in clause (c),  (f) or (g) unless the conduct  described  in such clause has not
been cured  within  thirty (30) days  following  Executive's  receipt of written
notice  from the  Company  or the  Board,  as the case  may be,  specifying  the
particulars of the conduct constituting Cause.

      4.7  "VOLUNTARY   TERMINATION   FOR  GOOD  REASON"  means  that  Executive
voluntarily terminates employment with the Company after any of the following is
undertaken by the Company without Executive's written consent:


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      4.8 the  assignment  to Executive of any duties or  responsibilities  that
results   in  a   significant   diminution   in   Executive's   job  duties  and
responsibilities,  taken  as a  whole,  as in  effect  immediately  prior to the
effective date of the Change in Control;

            (A) a reduction in Executive's  title or reporting  relationships as
in effect immediately prior to the effective date of the Change in Control;

            (B) a reduction  by the Company in  Executive's  Base Salary by five
percent  (5%) or more;  provided,  however,  that a reduction  by the Company of
Executive's  Base Salary by up to ten percent  (10%) shall not  constitute  Good
Reason  for  purposes  of this  Agreement  if it is made in  connection  with an
across-the-board  reduction  by the  Company  of  all  executives'  annual  base
salaries by a percentage at least equal to the  percentage by which  Executive's
Base Salary is reduced;

            (C) a relocation of Executive's  business  office to a location that
requires Executive to commute more than seventy-five (75) miles each way, except
for  required  travel  by  Executive  on the  Company's  business  to an  extent
substantially  consistent with Executive's  business travel obligations prior to
the effective date of a Change in Control; provided, however, that no relocation
of Executive's business office shall constitute Good Reason for purposes of this
Agreement if Executive  provides  services to the Company from a remote location
(e.g., through telecommuting) at the time of the relocation;

            (D) a  material  breach  by the  Company  of any  provision  of this
Agreement; or

            (E) any  failure by the  Company to obtain  the  assumption  of this
Agreement by any successor or assign of the Company.

Notwithstanding  the  foregoing,  Good  Reason  shall not exist based on conduct
described in clauses  (a),  (b),  (c),  (d), (e) or (f) above unless the conduct
described in such clause,  if capable of cure,  has not been cured within thirty
(30) days following  receipt by the Company or the Board, as the case may be, of
written  notice  from  Executive  specifying  the  particulars  of  the  conduct
constituting Good Reason.

                                    ARTICLE 5

                               GENERAL PROVISIONS

      5.1  EMPLOYMENT  STATUS.  This Agreement does not constitute a contract of
employment or impose upon Executive any obligation to remain as an employee,  or
impose on the Company any  obligation  (i) to retain  Executive  as an employee,
(ii) to change the status of Executive  as an at-will  employee,  which  at-will
status Executive hereby acknowledges,  or (iii) to change the Company's policies
regarding termination of employment.

      5.2 NOTICES.  Any notices provided hereunder must be in writing,  and such
notices or any other written  communication  shall be deemed  effective upon the
earlier of personal delivery  (including  personal delivery by facsimile) or the
third day after  mailing by first  class  mail,  to the  Company at its  primary
office  location  and to  Executive  at  Executive's  address  as  listed in the
Company's  payroll records.  Any payments made by the Company to Executive under
the terms


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      5.3 of this Agreement shall be delivered to Executive  either in person or
at the address as listed in the Company's payroll records.

      5.4 SEVERABILITY. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
but if any  provision  of  this  Agreement  is held to be  invalid,  illegal  or
unenforceable   in  any  respect  under  any  applicable  law  or  rule  in  any
jurisdiction,  such invalidity,  illegality or unenforceability  will not affect
any  other  provision  or any other  jurisdiction,  but this  Agreement  will be
reformed,  construed  and  enforced  in such  jurisdiction  as if such  invalid,
illegal or unenforceable provisions had never been contained herein.

      5.5 WAIVER.  If either party should waive any breach of any  provisions of
this  Agreement,  he or it shall  not  thereby  be  deemed  to have  waived  any
preceding  or  succeeding  breach  of the same or any  other  provision  of this
Agreement.

      5.6 ARBITRATION.  Unless  otherwise  prohibited by law or specified below,
all  disputes,  claims and causes of action,  in law or equity,  arising from or
relating  to  this  Agreement  or  its  enforcement,   performance,  breach,  or
interpretation  shall be resolved  solely and  exclusively  by final and binding
arbitration,  by a single arbitrator,  held in San Francisco County,  California
through Judicial Arbitration & Mediation  Services/Endispute  ("JAMS") under the
then existing JAMS arbitration rules and as otherwise  required by law. However,
nothing in this  section is  intended  to prevent  either  party from  obtaining
injunctive relief in court to prevent irreparable harm pending the conclusion of
any such  arbitration.  Each party in any such arbitration  shall be responsible
for its own  attorneys'  fees,  costs  and  necessary  disbursements;  provided,
however,  that in the event one party  refuses to arbitrate  and the other party
seeks to compel  arbitration by court order,  if such other party  prevails,  it
shall be entitled to recover  reasonable  attorneys'  fees,  costs and necessary
disbursements.  Pursuant  to  California  Civil Code  Section  1717,  each party
warrants that it was  represented by counsel in the negotiation and execution of
this Agreement, including the attorneys' fees provision herein.

      5.7 COMPLETE AGREEMENT. This Agreement, including Exhibit A, Exhibit B and
Exhibit C,  constitutes the entire agreement  between  Executive and the Company
and is the complete,  final,  and exclusive  embodiment of their  agreement with
regard  to  this  subject  matter,  wholly  superseding  all  written  and  oral
agreements  with  respect to payments  and benefits to Executive in the event of
employment  termination.  It is entered into without  reliance on any promise or
representation other than those expressly contained herein.

      5.8 AMENDMENT OR TERMINATION  OF AGREEMENT.  This Agreement may be changed
or terminated only upon the mutual written consent of the Company and Executive.
The written  consent of the Company to a change or termination of this Agreement
must be signed by an  executive  officer of the  Company  after  such  change or
termination has been approved by the Board.

      5.9 COUNTERPARTS. This Agreement may be executed in separate counterparts,
any one of which need not contain  signatures of more than one party, but all of
which taken together will constitute one and the same Agreement.


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      5.10  HEADINGS.  The  headings of the  Articles  and  Sections  hereof are
inserted  for  convenience  only and shall not be  deemed to  constitute  a part
hereof nor to affect the meaning thereof.

      5.11 SUCCESSORS AND ASSIGNS.  This Agreement is intended to bind and inure
to the benefit of and be  enforceable  by  Executive,  and the Company,  and any
surviving  entity  resulting  from a Change in Control and upon any other person
who is a successor  by merger,  acquisition,  consolidation  or otherwise to the
business  formerly carried on by the Company,  and their respective  successors,
assigns,  heirs, executors and administrators,  without regard to whether or not
such person actively assumes any rights or duties hereunder;  provided, however,
that Executive may not assign any duties hereunder and may not assign any rights
hereunder without the written consent of the Company, which consent shall not be
withheld unreasonably.

      5.12 CHOICE OF LAW. All questions  concerning the  construction,  validity
and interpretation of this Agreement will be governed by the law of the State of
California, without regard to such state's conflict of laws rules.

      5.13 NON-PUBLICATION. The parties mutually agree not to disclose the terms
of this Agreement except to the extent that disclosure is mandated by applicable
law or  corporate  reporting  requirements,  or to  respective  advisors  (e.g.,
attorneys, accountants).

      5.14  CONSTRUCTION  OF AGREEMENT.  In the event of a conflict  between the
text  of the  Agreement  and  any  summary,  description  or  other  information
regarding the Agreement, the text of the Agreement shall control.

      IN WITNESS  WHEREOF,  the parties  have  executed  this  Agreement  on the
Effective Date written above.


SBE, INC.                                    LEO FANG

By: /S/ GREG YAMAMOTO                        /s/ LEO FANG
Name: Greg Yamamoto
Title: President and CEO


Exhibit A:  Release (Termination of Executive under Age 40)
Exhibit B:  Release (Individual Termination of Executive Age 40 or Older)
Exhibit C:  Release (Group Termination of Executive Age 40 or Older)


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                                    EXHIBIT A
                                     RELEASE
                     (TERMINATION OF EXECUTIVE UNDER AGE 40)

I  understand  that my  position  with  SBE,  Inc.  (the  "COMPANY")  terminated
effective  ___________,  200_.  The  Company has agreed that if I choose to sign
this Release,  the Company will provide me with the severance benefits described
in that certain Executive Severance Benefits Agreement (the "AGREEMENT") between
me and the Company dated _____, 2004. The severance benefits will be provided to
me within five (5) business days of the date I return this signed Release to the
Company.  I understand that I am not entitled to any severance benefits unless I
sign this Release. In addition to the severance  benefits,  the Company will pay
me all of my accrued salary and vacation, to which I am entitled by law.

In consideration for the severance  benefits I am receiving under the Agreement,
I acknowledge my obligations  under my  Proprietary  Information  and Inventions
Agreement not to use or disclose any of the Company's  proprietary  information,
and I agree to immediately return all Company property and documents  (including
all  embodiments  of  proprietary  information)  and all  copies  thereof  in my
possession or control. I hereby release the Company and its officers, directors,
agents,  attorneys,  employees,  shareholders,  and affiliates  from any and all
claims,  liabilities,  demands,  causes of action,  attorneys' fees, damages, or
obligations of every kind and nature, whether they are known or unknown, arising
at any time prior to and including  the date I sign this  Release.  This general
release  includes,  but is not limited to: all federal and state  statutory  and
common law claims,  claims  related to my  employment or the  termination  of my
employment  or  related  to  breach of  contract,  tort,  wrongful  termination,
discrimination,  wages or benefits,  or claims for any form of compensation.  In
releasing claims unknown to me at present,  I am waiving all rights and benefits
under Section 1542 of the California  Civil Code, and any law or legal principle
of similar  effect in any  jurisdiction:  "A GENERAL  RELEASE DOES NOT EXTEND TO
CLAIMS WHICH THE CREDITOR  DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE
TIME OF  EXECUTING  THE  RELEASE,  WHICH IF KNOWN  BY HIM MUST  HAVE  MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR."

This Release,  together with the Agreement and my  Proprietary  Information  and
Inventions Agreement,  constitutes the complete,  final and exclusive embodiment
of the entire  agreement  between  the Company and me with regard to the subject
matter hereof. I am not relying on any promise or  representation by the Company
that is not expressly  stated  herein.  This agreement may only be modified by a
writing signed by both me and a duly authorized officer of the Company.

I accept and agree to the terms and conditions stated above:


------------------------                       ---------------------------------
        Date                                                Leo Fang


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                                    EXHIBIT B
                                     RELEASE
              (INDIVIDUAL TERMINATION OF EXECUTIVE AGE 40 OR OLDER)

I  understand  that my  position  with  SBE,  Inc.  (the  "COMPANY")  terminated
effective  ___________,  200_.  The  Company has agreed that if I choose to sign
this Release,  the Company will provide me with the severance benefits described
in that certain Executive Severance Benefits Agreement (the "AGREEMENT") between
me and the Company dated _____, 2004. The severance benefits will be provided to
me within  five (5)  business  days of the  Effective  Date of this  Release.  I
understand  that I am not entitled to any severance  benefits unless I sign this
Release. In addition to the severance  benefits,  the Company will pay me all of
my accrued salary and vacation, to which I am entitled by law.

In consideration for the severance  benefits I am receiving under the Agreement,
I acknowledge my obligations  under my  Proprietary  Information  and Inventions
Agreement not to use or disclose any of the Company's  proprietary  information,
and I agree to immediately return all Company property and documents  (including
all  embodiments  of  proprietary  information)  and all  copies  thereof  in my
possession or control. I hereby release the Company and its officers, directors,
agents,  attorneys,  employees,  shareholders,  and affiliates  from any and all
claims,  liabilities,  demands,  causes of action,  attorneys' fees, damages, or
obligations of every kind and nature, whether they are known or unknown, arising
at any time prior to and including the date I sign this Agreement.  This general
release  includes,  but is not limited to: all federal and state  statutory  and
common law claims,  claims  related to my  employment or the  termination  of my
employment  or  related  to  breach of  contract,  tort,  wrongful  termination,
discrimination,  wages or benefits,  or claims for any form of compensation.  In
releasing claims unknown to me at present,  I am waiving all rights and benefits
under Section 1542 of the California  Civil Code, and any law or legal principle
of similar  effect in any  jurisdiction:  "A GENERAL  RELEASE DOES NOT EXTEND TO
CLAIMS WHICH THE CREDITOR  DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE
TIME OF  EXECUTING  THE  RELEASE,  WHICH IF KNOWN  BY HIM MUST  HAVE  MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR."

I  acknowledge  that I am knowingly  and  voluntarily  waiving and releasing any
rights I may have under the  federal Age  Discrimination  in  Employment  Act of
1967, as amended ("ADEA  WAIVER").  I also  acknowledge  that the  consideration
given for the ADEA  Waiver is in  addition  to  anything of value to which I was
already  entitled.  I  further  acknowledge  that I have  been  advised  by this
writing, as required by the ADEA, that: (i) my ADEA Waiver does not apply to any
rights or claims  that arise after the date I sign this  Release;  (ii) I should
consult with an attorney prior to signing this Release;  (iii) I have twenty-one
(21) days to consider this Release (although I may choose to voluntarily sign it
sooner);  (iv) I have seven (7) days  following  the date I sign this Release to
revoke the ADEA Waiver;  and (v) the ADEA Waiver will not be effective until the
date upon which the revocation period has expired unexercised, which will be the
eighth  day after I sign  this  Release  ("EFFECTIVE  DATE").  Nevertheless,  my
general release of claims, except for the ADEA Waiver, is effective immediately,
and not revocable.

This Release,  together with the Agreement and my  Proprietary  Information  and
Inventions Agreement,  constitutes the complete,  final and exclusive embodiment
of the entire  agreement  between  the Company and me with regard to the subject
matter hereof. I am not relying on any promise or  representation by the Company
that is not expressly stated herein. This agreement


                                       2
<PAGE>

may  only be  modified  by a  writing  signed  by both me and a duly  authorized
officer of the Company.

I accept and agree to the terms and conditions stated above:


------------------------                       ---------------------------------
        Date                                                Leo Fang


                                       3
<PAGE>

                                    EXHIBIT C
                                     RELEASE
                (GROUP TERMINATION OF EXECUTIVE AGE 40 OR OLDER)

I  understand  that my  position  with  SBE,  Inc.  (the  "COMPANY")  terminated
effective  ___________,  200_.  The  Company has agreed that if I choose to sign
this Release,  the Company will provide me with the severance benefits described
in that certain Executive Severance Benefits Agreement (the "AGREEMENT") between
me and the Company dated _____, 2004. The severance benefits will be provided to
me within  five (5)  business  days of the  Effective  Date of this  Release.  I
understand  that I am not entitled to any severance  benefits unless I sign this
Release. In addition to the severance  benefits,  the Company will pay me all of
my accrued salary and vacation, to which I am entitled by law.

In consideration for the severance  benefits I am receiving under the Agreement,
I acknowledge my obligations  under my  Proprietary  Information  and Inventions
Agreement not to use or disclose any of the Company's  proprietary  information,
and I agree to immediately return all Company property and documents  (including
all  embodiments  of  proprietary  information)  and all  copies  thereof  in my
possession or control. I hereby release the Company and its officers, directors,
agents,  attorneys,  employees,  shareholders,  and affiliates  from any and all
claims,  liabilities,  demands,  causes of action,  attorneys' fees, damages, or
obligations of every kind and nature, whether they are known or unknown, arising
at any time prior to and including the date I sign this Agreement.  This general
release  includes,  but is not limited to: all federal and state  statutory  and
common law claims,  claims  related to my  employment or the  termination  of my
employment  or  related  to  breach of  contract,  tort,  wrongful  termination,
discrimination,  wages or benefits,  or claims for any form of compensation.  In
releasing claims unknown to me at present,  I am waiving all rights and benefits
under Section 1542 of the California  Civil Code, and any law or legal principle
of similar  effect in any  jurisdiction:  "A GENERAL  RELEASE DOES NOT EXTEND TO
CLAIMS WHICH THE CREDITOR  DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE
TIME OF  EXECUTING  THE  RELEASE,  WHICH IF KNOWN  BY HIM MUST  HAVE  MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR."

I  acknowledge  that I am knowingly  and  voluntarily  waiving and releasing any
rights I may have under the  federal Age  Discrimination  in  Employment  Act of
1967, as amended ("ADEA  WAIVER").  I also  acknowledge  that the  consideration
given for the ADEA  Waiver is in  addition  to  anything of value to which I was
already  entitled.  I  further  acknowledge  that I have  been  advised  by this
writing, as required by the ADEA, that: (i) my ADEA Waiver does not apply to any
rights or claims  that arise after the date I sign this  Release;  (ii) I should
consult with an attorney prior to signing this Release;  (iii) I have twenty-one
(21) days to consider this Release (although I may choose to voluntarily sign it
sooner);  (iv) I have seven (7) days  following  the date I sign this Release to
revoke the ADEA Waiver;  and (v) the ADEA Waiver will not be effective until the
date upon which the revocation period has expired unexercised, which will be the
eighth day after I sign this Release ("EFFECTIVE DATE"); and (f) I have received
with this  Release a detailed  list of the job titles and ages of all  employees
who were  terminated in this group  termination and the ages of all employees of
the Company in the same job  classification or organizational  unit who were not
terminated. While I have the right to revoke the ADEA Waiver, my general release
of claims  (except  for the ADEA  Waiver),  is  effective  immediately,  and not
revocable.


                                       4
<PAGE>

This Release,  together with the Agreement and my  Proprietary  Information  and
Inventions Agreement,  constitutes the complete,  final and exclusive embodiment
of the entire  agreement  between  the Company and me with regard to the subject
matter hereof. I am not relying on any promise or  representation by the Company
that is not expressly  stated  herein.  This agreement may only be modified by a
writing signed by both me and a duly authorized officer of the Company.
I accept and agree to the terms and conditions stated above:


------------------------                       ---------------------------------
        Date                                                Leo Fang


                                       5