EXHIBIT
      10.24

    


    NEITHER
      THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR
      THE
      SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
      LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
      (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL
      (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE
      FORM,
      THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT
      TO
      RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE
      SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
      OTHER
      LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES. 

    


    
      	
              Principal
                Amount: $____________

            	
              Issue
                Date: September ___, 2007

            


    

      


    CONVERTIBLE
      PROMISSORY NOTE

    


    FOR
      VALUE
      RECEIVED, NEONODE INC., a Delaware corporation (hereinafter called “Borrower”),
      hereby promises to pay to ____________________________,
      ___________________________________________________________, (the “Holder”) or
      its registered assigns or successors in interest or order, without demand,
      the
      sum of ____________________________ Dollars ($__________) (“Principal Amount”),
      on August ___, 2010 (the “Maturity Date”), if not sooner paid.

    


    This
      Note
      has been entered into pursuant to the terms of a subscription agreement between
      the Borrower, the Holder and certain other holders (the “Other Holders”) of
      convertible promissory notes (the “Other Notes”), dated of even date herewith
      (the “Subscription Agreement”), and shall be governed by the terms of such
      Subscription Agreement. Unless otherwise separately defined herein, all
      capitalized terms used in this Note shall have the same meaning as is set forth
      in the Subscription Agreement. The following terms shall apply to this
      Note:

     

    ARTICLE
      I

    


    INTEREST;
      AMORTIZATION

    


       1.1.  Interest
      Rate.
      Interest on the outstanding Principal Amount shall accrue from the date of
      this
      Note and shall be payable in arrears on December 31, 2007, and on the last
      business day of each calendar quarter thereafter and on the Maturity Date,
      accelerated or otherwise, when the principal and remaining accrued but unpaid
      interest shall be due and payable. Interest on the outstanding principal balance
      of this Note shall accrue at a rate of LIBOR plus three percent (3.0%) per
      annum
      (the “Interest Rate”). “LIBOR” or LIBO Rate” means the rate per annum equal to
      the LIBOR Rate for a six-month period, as published in the US edition of the
      Wall Street Journal on the business day immediately preceding the day of the
      calculation of applicable interest rate. In this Agreement, LIBOR is a reference
      rate and is not associated with actual US Dollar-denominated deposits or bids
      and no “breakage” costs shall apply to payments in respect of the Notes. The
      Interest Rate shall be calculated on December 15, March 15, June 15, and
      September 15 of each year. The Interest Rate, as calculated from time to time
      shall,
      in
      all events, be not less than eight percent (8%) per annum. Interest on the
      outstanding principal balance of the Note shall be computed on the basis of
      the
      actual number of days elapsed and a year of three hundred and sixty (360)
      days.


    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    


    1.2. Payment
      of Interest Shares.
      Interest will be payable in cash, or at the election of the Holder, by the
      Borrower’s delivery of Common Stock. Provided an Event of Default or an event
      which with the passage of time or the giving of notice could become an Event
      of
      Default has not occurred, whether or not such Event has been cured, the Borrower
      may pay outstanding quarterly interest due on this Note with shares of Common
      Stock (“Interest
      Shares”)
      that
      are included in an effective Registration Statement valued at the lesser of
      the
      Conversion Price as determined pursuant to Section 3.1 or the average of the
      volume weighted average prices of the Common Stock as reported by Bloomberg
      L.P.
      for the Principal Market for the twenty trading days ending on the fifth trading
      day preceding an interest payment date. The Borrower must notify the Holder
      not
      later than the twenty-fifth trading day preceding an interest payment date
      if
      the Borrower will pay interest with cash or Interest Shares. If such notice
      is
      not timely given, then interest must be paid with cash.

    


    1.3. Default
      Interest Rate.
      Following the occurrence and during the continuance of an Event of Default
      (as
      defined in Article IV), which, if susceptible to cure is not cured within twenty
      (20) days, otherwise then from the first date of such occurrence, the annual
      interest rate on this Note shall (subject to Section 6.7) be the greater of
      (i)
      LIBOR plus ten percent (10%), or (ii) twelve and a half percent (12.5%). Such
      interest shall be due and payable together with regular scheduled payments
      of
      interest.

    


    1.4. Conversion
      Privileges.
      The
      Conversion Privileges set forth herein shall remain in full force and effect
      immediately from the date hereof and until the Note is paid in full regardless
      of the occurrence of an Event of Default. The Note shall be payable in full
      on
      the Maturity Date, unless previously converted into Common Stock.

     

    ARTICLE
      II

    


    OPTIONAL
      REDEMPTION AND MANDATORY CONVERSION

    


    2.1. Mandatory
      Conversion.
      Provided an Event of Default or an event which with the passage of time or
      giving of notice could become an Event of Default has not occurred, then,
      commencing one year after the Actual Effective Date (as defined in Section
      11.1(iv) of the Subscription Agreement), the Borrower will have the option
      exercisable by written notice to the Holder (“Notice of Mandatory Conversion”)
      of compelling the Holder to convert all or a portion of the outstanding and
      unpaid Principal Amount and accrued interest, thereon, into Common Stock at
      the
      Conversion Price then in effect (“Mandatory Conversion”). The Notice of
      Mandatory Conversion, which notice must be given on the first day following
      twenty (20) consecutive trading days (“Lookback Period”) during which (i) the
      closing price for the Common Stock as reported by Bloomberg, LP for the
      Principal Market shall be greater than 200% of the Conversion Price each such
      trading day, and (ii) with reported trading volume of not less than 100,000
      shares of Common Stock during each trading day during the Lookback Period.
      The
      date the Notice of Mandatory Conversion is given is the “Mandatory Conversion
      Date.” The Notice of Mandatory Conversion shall specify the aggregate Principal
      Amount of the Note and interest which is subject to Mandatory Conversion.
      Mandatory Conversion Notices must be given proportionately to all Holders of
      Notes and Other Holders of Other Notes. The Borrower shall reduce the amount
      of
      Principal Amount and interest subject to a Notice of Mandatory Conversion by
      the
      amount of Note Principal and interest for which the Holder had delivered a
      Notice of Conversion to the Borrower during the twenty (20) trading days
      preceding the Mandatory Conversion Date. Each Mandatory Conversion Date shall
      be
      a deemed
      Conversion Date and the Borrower will be required to deliver the Common Stock
      issuable pursuant to a Mandatory Conversion Notice in the same manner and time
      period as described in Section 2.1 above and the Subscription Agreement. A
      Notice of Mandatory Conversion may be given only in connection with an amount
      of
      Common Stock which would not cause a Holder to exceed the 4.99% (or if
      increased, 9.99%) beneficial ownership limitation set forth in Section 3.2
      of
      this Note. A Notice of Mandatory Conversion may be given only in connection
      with
      Common Stock that has been included for resale in an effective Registration
      Statement during the entire Lookback Period and through the Mandatory Conversion
      Date.


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    


    2.2. Optional
      Redemption of Principal Amount.
      Provided an Event of Default or an event which with the passage of time on
      the
      giving of notice could become an Event of Default has not occurred, whether
      or
      not such Event of Default has been cured, then commencing one year ater the
      Issue Date of this Note, the Borrower will have the option of prepaying the
      outstanding Principal Amount of this Note ("Optional Redemption"), in whole
      or
      in part, by paying to the Holder a sum of money equal to one hundred and twenty
      percent (120%) of the Principal Amount to be redeemed, together with accrued
      but
      unpaid interest thereon and any and all other sums due, accrued or payable
      to
      the Holder arising under this Note or any Transaction Document through the
      Redemption Payment Date as defined below (the "Redemption Amount"). Borrower’s
      election to exercise its right to prepay must be by notice in writing (“Notice
      of Redemption”). The Notice of Redemption shall specify the date for such
      Optional Redemption (the "Redemption Payment Date"), which date shall be thirty
      (30) business days after the date of the Notice of Redemption (the "Redemption
      Period"). A Notice of Redemption shall not be effective with respect to any
      portion of the Principal Amount for which the Holder has a pending election
      to
      convert pursuant to Section 3.1. A Redemption Notice may be given not more
      than
      two times. On the Redemption Payment Date, the Redemption Amount, less any
      portion of the Redemption Amount against which the Holder has previously
      exercised its rights pursuant to Section 3.1, shall be paid in good funds to
      the
      Holder. In the event the Borrower fails to pay the Redemption Amount on the
      Redemption Payment Date as set forth herein, then (i) at the Holder’s election,
      such Notice of Redemption will be null and void, (ii) Borrower will not have
      the
      right to deliver another Notice of Redemption, and (iii) Borrower’s failure may
      be deemed by Holder to be a non-curable Event of Default. A Notice of Redemption
      may be cancelled at the option of the Holder, if at any time during the
      Redemption Period an Event of Default, or an event which with the passage of
      time or giving of notice could become an Event of Default (whether or not such
      Event of Default has been cured), occurs.

    


    ARTICLE
      III

    


    CONVERSION
      RIGHTS

    


    3.1. Holder’s
      Conversion Rights.
      Subject
      to Section 3.2, the Holder shall have the right, but not the obligation, to
      convert all or any portion of the then aggregate outstanding Principal Amount
      of
      this Note, together with interest, if any, and fees due hereon, and any sum
      arising under the Subscription Agreement, and the Transaction Documents,
      including but not limited to Liquidated Damages, into shares of Common Stock,
      subject to the terms and conditions set forth in this Article III, at the rate
      of $3.50 per
      share
      of Common Stock (“Conversion Price”), as the same may be adjusted pursuant to
      this Note and the Subscription Agreement. The Holder may exercise such right
      by
      delivery to the Borrower of a written Notice of Conversion pursuant to Section
      3.3.


    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    3.2. Conversion
      Limitation.
      Neither
Holder
      nor the Borrower may convert (including a Mandatory Conversion) on any date
      that
      amount of the Note Principal or interest in connection with that number of
      shares of Common Stock which would be in excess of the sum of (i) the number
      of
      shares of Common Stock beneficially owned by the Holder and its affiliates
      on a
      Conversion Date, Repayment Date,
      or
      interest payment date, as the case may be, (ii) any Common Stock issuable in
      connection with the unconverted portion of the Note, and (iii) the number of
      shares of Common Stock issuable upon the conversion of the Note with respect
      to
      which the determination of this provision is being made, which would result
      in
      beneficial ownership by the Holder and its affiliates of more than 4.99% of
      the
      outstanding shares of Common Stock of the Borrower on such Conversion Date.
      For
      the purposes of the provision to the immediately preceding sentence, beneficial
      ownership shall be determined in accordance with Section 13(d) of the Securities
      Exchange Act of 1934, as amended, and Regulation 13d-3 thereunder. Subject
      to
      the foregoing, the Holder shall not be limited to aggregate conversions of
      only
      4.99% and aggregate conversion by the Holder may exceed 4.99%. The Holder shall
      have the authority and obligation to determine whether the restriction contained
      in this Section 3.2 will limit any conversion hereunder and to the extent that
      the Holder determines that the limitation contained in this Section applies,
      the
      determination of which portion of the Notes are convertible shall be the
      responsibility and obligation of the Holder. The Holder may waive the conversion
      limitation described in this Section 3.2, in whole or in part, upon and
      effective after 61 days prior written notice to the Borrower to increase such
      percentage to up to 9.99%.

    


    3.3. Mechanics
      of Holder’s Conversion.
      

    


    (a) In
      the
      event that the Holder elects to convert any amounts outstanding under this
      Note
      into Common Stock, the Holder shall give notice of such election by delivering
      an executed and completed notice of conversion (a “Notice of Conversion”) to the
      Borrower, which Notice of Conversion shall provide a breakdown in reasonable
      detail of the Principal Amount, accrued interest and amounts being converted.
      The original Note is not
      required
      to be surrendered to the Borrower
      until
      all sums due under the Note have been paid. On each Conversion Date (as
      hereinafter defined) and in accordance with its Notice of Conversion, the Holder
      shall make the appropriate reduction to the Principal Amount, accrued interest
      and fees as entered in its records.
      Each
      date
      on which a Notice of Conversion is delivered or telecopied to the Borrower
      in
      accordance with the provisions hereof shall be deemed a “Conversion Date.” A
      form of Notice of Conversion
      to be employed by the Holder is annexed hereto as Exhibit A.

    


    (b) Pursuant
      to the terms of a Notice of Conversion, the Borrower will issue instructions
      to
      the transfer agent accompanied by an opinion of counsel (if so required by
      the
      Borrower’s transfer agent), and, except as otherwise provided below, shall cause
      the transfer agent to transmit the certificates representing the Conversion
      Shares to the Holder by crediting the account of the Holder’s designated broker
      with the Depository Trust Corporation (“DTC”) through its Deposit Withdrawal
      Agent Commission (“DWAC”) system within three (3) business days after receipt by
      the Borrower of the Notice of Conversion (the “Delivery Date”). In the case of
      the exercise of the conversion rights set forth herein, the conversion privilege
      shall be deemed to have been exercised and the Conversion Shares issuable upon
      such conversion shall be deemed to have been issued upon the date of receipt
      by
      the Borrower of the Notice of Conversion. The Holder shall be treated for all
      purposes as the beneficial holder of such shares of Common Stock, or, in the
      case that Borrower delivers physical certificates as set forth below, the record
      holder of such shares of Common Stock, unless the Holder provides the Borrower
      written instructions to the contrary.  Notwithstanding
      the foregoing to the contrary, the Borrower or its transfer agent shall only
      be
      obligated to issue and deliver the shares to the DTC on the Holder’s behalf via
      DWAC (or certificates free of restrictive legends) if the registration statement
      providing for the resale of the shares of Common Stock issuable upon the
      conversion of this Note is effective and the Holder has complied with all
      applicable securities laws in connection with the sale of the Common Stock,
      including, without limitation, the prospectus delivery requirements and has
      provided representations accordingly. In the event that Conversion Shares cannot
      be delivered to the Holder via DWAC, the Borrower shall deliver physical
      certificates representing the Conversion Shares by the Delivery Date to an
      address designated by Holder in the U.S.


    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    


    3.4. Conversion
      Mechanics.

    


    (a) The
      number of shares of Common Stock to be issued upon each conversion of this
      Note
      pursuant to this Article III shall be determined by dividing that portion of
      the
      Principal Amount and interest and fees to be converted, if any, by the then
      applicable Fixed Conversion Price.

    


    (b) The
      Fixed
      Conversion Price and number and kind of shares or other securities to be issued
      upon conversion shall be subject to adjustment from time to time upon the
      happening of certain events while this conversion right remains outstanding,
      as
      follows:

    


    A. Merger,
      Sale of Assets, etc.
      If (A)
      the Company effects any merger or consolidation of the Company with or into
      another entity, (B) the Company effects any sale of all or substantially all
      of
      its assets in one or a series of related transactions, (C) any tender offer
      or
      exchange offer (whether by the Company or another entity) is completed pursuant
      to which holders of Common Stock are permitted to tender or exchange their
      shares for other securities, cash or property, (D) the Company consummates
      a
      stock purchase agreement or other business combination (including, without
      limitation, a reorganization, recapitalization, spin-off or scheme of
      arrangement) with one or more persons or entities whereby such other persons
      or
      entities acquire more than the 50% of the outstanding shares of Common Stock
      (not including any shares of Common Stock held by such other persons or entities
      making or party to, or associated or affiliated with the other persons or
      entities making or party to, such stock purchase agreement or other business
      combination), (E) any "person" or "group" (as these terms are used for purposes
      of Sections 13(d) and 14(d) of the 1934 Act) is or shall become the "beneficial
      owner" (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly,
      of
      50% of the aggregate Common Stock of the Company, or (F) the Company effects
      any
      reclassification of the Common Stock or any compulsory share exchange pursuant
      to which the Common Stock is effectively converted into or exchanged for other
      securities, cash or property (in any such case, a "Fundamental Transaction"),
      this Note, as to the unpaid principal portion thereof and accrued interest
      thereon, shall thereafter be deemed to evidence the right to convert into such
      number and kind of shares or other securities and property as would have been
      issuable or distributable on account of such Fundamental Transaction, upon
      or
      with respect to the securities subject to the conversion right immediately
      prior
      to such Fundamental Transaction. The foregoing provision shall similarly apply
      to successive Fundamental Transactions of a similar nature by any such successor
      or purchaser. Without limiting the generality of the foregoing, the
      anti-dilution provisions of this Section shall apply to such securities of
      such
      successor or purchaser after any such Fundamental Transaction.

    


    B. Reclassification,
      etc.
      If the
      Borrower at any time shall, by reclassification or otherwise, change the Common
      Stock into the same or a different number of securities of any class or classes,
      this Note, as to the unpaid principal portion hereof and accrued interest
      hereon, shall thereafter be deemed to evidence the right to convert into an
      adjusted number of such securities and kind of securities as would have been
      issuable as the result of such change with respect to the Common Stock
      immediately prior to such reclassification or other change.


    C. Stock
      Splits, Combinations and Dividends.
      If the
      shares of Common Stock are subdivided or combined into a greater or smaller
      number of shares of Common Stock, or if a dividend is paid on the Common Stock
      in shares of Common Stock, the Conversion Price shall be proportionately reduced
      in case of subdivision of shares or stock dividend or proportionately increased
      in the case of combination of shares, in each such case by the ratio which
      the
      total number of shares of Common Stock outstanding immediately after such event
      bears to the total number of shares of Common Stock outstanding immediately
      prior to such event.


    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    D. Share
      Issuance.
      The
      Holder has been granted certain rights in connection with issuances and proposed
      issuances of Common Stock by the Company at a price lower than the Conversion
      Price. These rights are described in the Subscription Agreement and incorporated
      herein by this reference.

    


    (c) Whenever
      the Conversion Price is adjusted pursuant to Section 3.4(b) above, the Borrower
      shall promptly mail to the Holder a notice setting forth the Conversion Price
      after such adjustment and setting forth a statement of the facts requiring
      such
      adjustment.

    


    3.5. Reservation.
      During
      the period the conversion right exists, Borrower will reserve from its
      authorized and unissued Common Stock not less than
      one
      hundred
      and
      fifty
      percent (150%)
      of the
      number of shares to provide for the issuance of Common Stock upon the full
      conversion of this Note.
      Borrower represents that upon issuance, such shares will be duly and validly
      issued, fully
      paid and
      non-assessable. Borrower agrees that its issuance of this Note shall constitute
      full authority to its officers, agents, and transfer agents who are charged
      with
      the duty of executing and issuing stock certificates to execute and issue the
      necessary certificates for shares of Common Stock upon the conversion of this
      Note.

    


    3.6 Issuance
      of Replacement Note.
      Upon
      any partial conversion of this Note, a replacement Note containing the same
      date
      and provisions of this Note shall,
      at the
      written request of the Holder, be
      issued
      by the Borrower to the Holder for the outstanding Principal Amount of this
      Note
      and accrued interest which shall not have been converted or paid, provided
      Holder has surrendered an original Note to the Borrower. In the event that
      the
      Holder elects not to surrender a Note for reissuance upon partial payment or
      conversion, the Holder hereby indemnifies the Borrower against any and all
      loss
      or damage attributable to a third-party claim in an amount in excess of the
      actual amount then due under the Note, and the
      Borrower is hereby expressly authorized to offset any such amounts mutually
      agreed upon by Borrower and Holder or pursuant to a judgment in Borrower’s favor
      against amounts then due under the Note.

    


    ARTICLE
      IV

    


    EVENTS
      OF DEFAULT

    


    The
      occurrence of any of the following events of default (“Event of Default”) shall,
      at the option of the Holder hereof, make all sums of principal and interest
      then
      remaining unpaid hereon and all other amounts payable hereunder immediately
      due
      and payable, upon demand, without presentment, or grace period, all of which
      hereby are expressly waived, except as set forth below:

    


    4.1 Failure
      to Pay Principal or Interest.
      The
      Borrower fails to pay any installment of Principal Amount, interest or other
      sum
      due under this Note or any Transaction Document when due and such failure
      continues for a period of five (5) business days after the due
      date.

    


    4.2 Breach
      of Covenant.
      The
      Borrower breaches any material covenant or other term or condition of the
      Subscription Agreement, this Note or Transaction Document in any material
      respect and such breach, if subject to cure, continues for a period of ten
      (10)
      business days after written notice to the Borrower from the
      Holder.


    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    


    4.3 Breach
      of Representations and Warranties.
      Any
      material representation or warranty of the Borrower made herein, in the
      Subscription Agreement, Transaction Document or in any agreement, statement
      or
      certificate given in writing pursuant hereto or in connection herewith or
      therewith shall be false or misleading in any material respect as of the date
      made and the Closing Date.

    


    4.4 Receiver
      or Trustee.
      The
      Borrower or any Subsidiary of Borrower shall make an assignment for the benefit
      of creditors, or apply for or consent to the appointment of a receiver or
      trustee for them or for a substantial part of their property or business; or
      such a receiver or trustee shall otherwise be appointed.

    


    4.5 Judgments.
      Any
      money judgment, writ or similar final process shall be entered or filed against
      Borrower or any subsidiary of Borrower or any of their property or other assets
      for more than $100,000,
      and
      shall remain unvacated, unbonded, unappealed, unsatisfied, or unstayed for
      a
      period of forty-five (45) days.

    


    4.6 Non-Payment.
      A
      default by the Borrower under any one or more obligations in an aggregate
      monetary amount in excess of $100,000 for more than twenty (20) days after
      the
      due date, unless the Borrower is contesting the validity of such obligation
      in
      good faith and has segregated cash funds equal to not less than one-half of
      the
      contested amount.

    


    4.7 Bankruptcy.
      Bankruptcy, insolvency, reorganization, or liquidation proceedings or other
      proceedings or relief under any bankruptcy law or any law, or the issuance
      of
      any notice in relation to such event, for the relief of debtors shall be
      instituted by or against the Borrower or any Subsidiary of Borrower and if
      instituted against them are not dismissed within forty-five (45) days
      of
      initiation.

    


    4.8 Delisting.
      Delisting of the Common Stock from any Principal Market for a period of seven
      consecutive trading days; or notification from a Principal Market that the
      Borrower is not in compliance with the conditions for such continued listing
      on
      such Principal Market.

    


    4.9 Stop
      Trade.
      An SEC
      or judicial stop trade order or Principal Market trading suspension with respect
      to Borrower’s Common Stock that lasts for five or more consecutive trading
      days.

    


    4.10 Failure
      to Deliver Common Stock or Replacement Note.
      Borrower’s failure to timely deliver Common Stock to the Holder pursuant to and
      in the form required by this Note or the Subscription Agreement,
      or if
      required, a replacement Note.

    


    4.11 Non-Registration
      Event.
      The
      occurrence of a Non-Registration Event as described in Section 11.4 of the
      Subscription Agreement.

    


    4.12 Reverse
      Splits.
      The
      Borrower effectuates a reverse split of its Common Stock without twenty days
      prior written notice to the Holder.

     

    4.13 Cross
      Default.
      A
      default by the Borrower of a material term, covenant, warranty or undertaking
      of
      any Transaction Document or other agreement to which the Borrower and Holder
      are
      parties, or the occurrence of a material event of default under any such other
      agreement which is not cured after any required notice and/or cure
      period.


    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    


    4.14 Reservation
      Default.
      Failure
      by the Borrower to have reserved for issuance upon conversion of the Note the
      amount of Common Stock as set forth in this Note and the Subscription
      Agreement.

    


    4.15 Financial
      Statement Restatement.  
      The restatement of any financial statements filed by the Borrower for any date
      or period from two years prior to the Issue Date of this Note and until this
      Note is no longer outstanding, if the result of such restatement would, by
      comparison to the unrestated financial statements, have constituted a Material
      Adverse Effect.

    


    4.16 Other
      Note Default.
      The
      occurrence of any Event of Default under any Other Note.

    


    ARTICLE
      V

    


    MISCELLANEOUS

    


    5.1 Failure
      or Indulgence Not Waiver.
      No
      failure or delay on the part of Holder hereof in the exercise of any power,
      right or privilege hereunder shall operate as a waiver thereof, nor shall any
      single or partial exercise of any such power, right or privilege preclude other
      or further exercise thereof or of any other right, power or privilege. All
      rights and remedies existing hereunder are cumulative to, and not exclusive
      of,
      any rights or remedies otherwise available.

    


    5.2 Notices.
      All
      notices, demands, requests, consents, approvals, and other communications
      required or permitted hereunder shall be in writing and, unless otherwise
      specified herein, shall be (i) personally served, (ii) deposited in the mail,
      registered or certified, return receipt requested, postage prepaid, (iii)
      delivered by reputable air courier service with charges prepaid, or (iv)
      transmitted by hand delivery, telegram, or facsimile, addressed as set forth
      below or to such other address as such party shall have specified most recently
      by written notice. Any notice or other communication required or permitted
      to be
      given hereunder shall be deemed effective (a) upon hand delivery or delivery
      by
      facsimile, with accurate confirmation generated by the transmitting facsimile
      machine, at the address or number designated below (if delivered on a business
      day during normal business hours where such notice is to be received), or the
      first business day following such delivery (if delivered other than on a
      business day during normal business hours where such notice is to be received)
      or (b) on the second business day following the date of mailing by express
      courier service, fully prepaid, addressed to such address, or upon actual
      receipt of such mailing, whichever shall first occur. The addresses for such
      communications shall be: (i) if to the Borrower to: Neonode Inc., 4000 Executive
      Parkway, Suite 200, San Ramon, CA 94583, Attn: ________________, telecopier:
      (925) 355-2020, with a copy by telecopier only to: Hahn & Hessen LLP, 488
      Madison Avenue, New York, NY 10022, Attn: James Kardon, Esq., telecopier: (212)
      478-7400, and (ii) if to the Holder, to the name, address and telecopy number
      set forth on the front page of this Note, with a copy by telecopier
      only to
      Grushko & Mittman, P.C., 551 Fifth Avenue, Suite 1601, New York, New York
      10176, telecopier number: (212) 697-3575.

    


    5.3 Amendment
      Provision.
      The
      term “Note” and all reference thereto, as used throughout this instrument, shall
      mean this instrument as originally executed, or if later amended or
      supplemented, then as so amended or supplemented.

    


    5.4 Assignability.
      This
      Note shall be binding upon the Borrower and its successors and assigns, and
      shall inure to the benefit of the Holder and its successors and
      assigns.

    


    5.5 Cost
      of Collection.
      If
      default is made in the payment of this Note, Borrower shall pay the Holder
      hereof reasonable costs of collection, including reasonable attorneys’
fees.


    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    


    5.6 Governing
      Law.
      This
      Note shall be governed by and construed in accordance with the laws of the
      State
      of New York, including,
      but not limited to, New York statutes of limitations.
      Any
      action brought by either party against the other concerning the transactions
      contemplated by this Agreement shall be brought only in the civil or state
      courts of New York or in the federal courts located in the State and county
      of
      New York. Both parties and the individual signing this Agreement on behalf
      of
      the Borrower agree to submit to the jurisdiction of such courts. The prevailing
      party shall be entitled to recover from the other party its reasonable
      attorney's fees and costs. In
      the
      event that any provision of this Note is invalid or unenforceable under any
      applicable statute or rule of law, then such provision shall be deemed
      inoperative to the extent that it may conflict therewith and shall be deemed
      modified to conform with such statute or rule of law. Any such provision which
      may prove invalid or unenforceable under any law shall not affect the validity
      or unenforceability of any other provision of this Note. Nothing contained
      herein shall be deemed or operate to preclude the Holder from bringing suit
      or
      taking other legal action against the Borrower in any other jurisdiction to
      collect on the Borrower's obligations to Holder, to realize on any collateral
      or
      any other security for such obligations, or to enforce a judgment or other
      decision in favor of the Holder. This
      Note shall be deemed an unconditional obligation of Borrower for the payment
      of
      money and, without limitation to any other remedies of Holder, may be enforced
      against Borrower by summary proceeding pursuant to New York Civil Procedure
      Law
      and Rules Section 3213 or any similar rule or statute in the jurisdiction where
      enforcement is sought. For purposes of such rule or statute, any other document
      or agreement to which Holder and Borrower are parties or which Borrower
      delivered to Holder, which may be convenient or necessary to determine Holder’s
      rights hereunder or Borrower’s obligations to Holder are deemed a part of this
      Note, whether or not such other document or agreement was delivered together
      herewith or was executed apart from this Note.

    


    5.7 Maximum
      Payments.
      Nothing
      contained herein shall be deemed to establish or require the payment of a rate
      of interest or other charges in excess of the maximum permitted by applicable
      law. In the event that the rate of interest required to be paid or other charges
      hereunder exceed the maximum permitted by such law, any payments in excess
      of
      such maximum shall be credited against amounts owed by the Borrower to the
      Holder and thus refunded to the Borrower.

    


    5.8. Construction.
      Each
      party acknowledges that its legal counsel participated in the preparation of
      this Note and, therefore, stipulates that the rule of construction that
      ambiguities are to be resolved against the drafting party shall not be applied
      in the interpretation of this Note to favor any party

    against
      the other.

    


    5.9 Redemption.
      This
      Note may not be redeemed or called without the consent of the Holder except
      as
      described in this Note or the Subscription Agreement.

    


    5.10 Shareholder
      Status.
      The
      Holder shall not have rights as a shareholder of the Borrower with respect
      to
      unconverted portions of this Note. However, the Holder will have the rights
      of a
      shareholder of the Borrower with respect to the Shares of Common Stock to be
      received after delivery by the Holder of a Conversion Notice to the
      Borrower.

    


    5.11 Non-Business
      Days.
      Whenever any payment or any action to be made shall be due on a Saturday, Sunday
      or a public holiday under the laws of the State of New York, such payment may
      be
      due or action shall be required on the next succeeding business day and, for
      such payment, such next succeeding day shall be included in the calculation
      of
      the amount of accrued interest payable on such date.


    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    


    IN
      WITNESS WHEREOF,
      Borrower has caused this Note to be signed in its name by an authorized officer
      as of the ____ day of September, 2007.

    


    
      	
              NEONODE
                INC.

            
	 	 
	
              By:

            	
               

            
	 	
              Name:

            
	 	
              Title:

            


    

     

    
      	
              WITNESS:

            
	
               

            
	 
	 


    


    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    


    NOTICE
      OF CONVERSION

    


    (To
      be
      executed by the Registered Holder in order to convert the Note)

    


    The
      undersigned hereby elects to convert $_________ of the principal and $_________
      of the interest due on the Note issued by Neonode Inc. on September ___, 2007
      into Shares of Common Stock of Neonode Inc. (the “Borrower”) according to the
      conditions set forth in such Note, as of the date written below.

    


    Date of Conversion:___________________________________________________________________________________________________________________________

    


    Conversion Price:_____________________________________________________________________________________________________________________________

    


    Shares To Be Delivered:________________________________________________________________________________________________________________________

    


    Signature:___________________________________________________________________________________________________________________________________

    


    Print Name:__________________________________________________________________________________________________________________________________

    


    Address:____________________________________________________________________________________________________________________________________

    


    ____________________________________________________________________________________________________________________________________

     

    
      
        
        

      

      
        11