EXHIBIT 10.16

                                RELEASE AGREEMENT
           [TO BE SIGNED ON OR WITHIN 21-DAYS AFTER DECEMBER 31, 2004]


I resigned from my position with SBE,  Inc. (the  "COMPANY"),  and my employment
with the Company in all capacities  will terminate  effective  December 31, 2004
(the  "SEPARATION  DATE").  The Company has agreed that, if I provide  continued
employment  service to the Company through December 31, 2004, train my successor
as necessary or appropriate or as requested by the Company's Board of Directors,
and sign and abide by the terms of this Release  Agreement (the "RELEASE"),  the
Company will pay me severance in the amount of $250,000,  less legally  required
withholdings  and  deductions  and shall grant me an option to  purchase  75,000
shares of the Company's common stock, which option shall vest on a monthly basis
measured from the date of grant through to March 31, 2006. The severance  amount
will be paid in the  form of  continuing  base  salary  payments,  paid in equal
semi-monthly  installments over a twelve month period on the Company's customary
payroll payment dates,  commencing on the first payroll date after the Effective
Date (as hereinafter defined) of this Release and the option grant shall be made
on the  Effective  Date of this Release.  In addition to the severance  benefits
described  above, the Company will pay me all accrued salary and vacation earned
through the Separation Date, to which I am entitled by law.

In consideration for the severance benefits I am receiving under this Release to
which  I am not  otherwise  entitled,  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: (1) all claims
arising  out of or in any way related to my  employment  with the Company or the
termination  of that  employment  (including,  but not limited to, any claims or
rights I may have under any  agreement  or contract  which  provides for payment
upon  termination  of  employment  or in  connection  with a Change  of  Control
(excluding  only this  Release));  (2) all claims related to my  compensation or
benefits from the Company, including salary, bonuses, commissions, vacation pay,
expense reimbursements,  severance pay, fringe benefits, stock, stock options or
any other  ownership  interests  in the  Company;  (3) all  contractual  claims,
including claims for breach of contract,  wrongful termination, or breach of the
covenant of good faith and fair dealing;  (4) all tort claims,  including claims
for  fraud,  discrimination,  defamation  or  emotional  distress;  and  (5) all
federal,  state,  and local  statutory  claims  (including,  but not limited to,
claims for discrimination,  harassment,  attorneys' fees or other claims arising
under the federal  Civil Rights Act of 1964, as amended,  the federal  Americans
with  Disabilities  Act of 1990,  as amended,  the  Employee  Retirement  Income
Security Act of 1974, as amended,  the California Labor Code (as amended) or the
California Fair Employment and Housing Act (as amended)).

I  understand  that the above  release of claims  includes  claims  which may be
unknown to or unsuspected by me. In releasing claims unknown to me at present, I
acknowledge that I have read and understand Section 1542 of the California Civil
Code, which reads as follows: "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 hereby  waive all rights  and  benefits  under
Section  1542 of the  California  Civil Code and any law or legal  principle  of
similar effect in any jurisdiction.


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I further  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 (the "ADEA WAIVER").  I also acknowledge that the consideration
given for this 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 (the "EFFECTIVE  DATE").  Nevertheless,  my
general release of claims, except for the ADEA Waiver, is effective immediately,
and not revocable.

This Release  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  of member of the Board of Directors of
the Company.

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


January 5, 2005                                      /s/ William B. Heye
-----------------                                    -------------------
    Date                                             William B. Heye



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