Document:

AMENDMENT
        NO. 1 TO SECURITY AGREEMENT

       

      THIS
        AMENDMENT NO. 1 dated as of November 20, 2006 (this “Amendment”)
        to the
        Security Agreement dates 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 (i) on February 28, 2006, borrowed an aggregate principal amount
        of
        $4,000,000 pursuant to senior secured notes (the “Existing
        Notes”)
        from
        the Secured Party and other investors and (ii) intends to borrow an additional
        aggregate amount of up to $1,800,000 from Investors, including the existing
        Investors, pursuant to notes of similar tenor to the Existing Notes (the
        “Additional
        Notes”);
        and

       

      WHEREAS,
        the parties hereto wish to amend the Security Agreement to add as Obligations
        the obligations of the Grantor under the Additional 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 any Additional Notes as follow:

       

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

       

      (b) The
        parties hereto agree to include the obligations of the Grantor under the
        Additional Notes as Obligations under the Security Agreement; provided that
        the
        aggregate principal amount of the Existing Notes together with the aggregate
        principal amount of the Additional Notes does not exceed
        $5,800,000.

       

      (c) The
        parties hereto agree that the Additional Notes shall be pari passu with the
        Existing 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. 1 TO SECURITY AGREEMENT

      Dated
        November 20, 2006

       

      
        	
                THE
                  GRANTOR:

              	 
	 	
                Neonode,
                  Inc.

              
	 	
                a
                  Delaware corporation

              
	 	 
	 	
                
                  By:_________________________________

                

              
	 	
                Name:

              
	 	
                Title:

              
	 	
                Address
                  for Notices:

              
	 	
                Biblioteksgatan
                  22

              
	 	
                S111
                  46 Stockholm, Sweden

              
	 	
                Attention:
                  President

              
	 	
                Fax:
                  01146-8-678 18 51

              
	 	 
	 	 
	
                SECURED
                  PARTY:

              	 
	 	
                AIGH
                  INVESTMENT PARTNERS, LLC

              
	 	 
	 	
                
                  By:_________________________________

                

              
	 	
                Name:
                  Orin Hirschman

              
	 	
                Title:
                  Manager

              

      

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      SCHEDULE
        I

      INVESTORS

       

      

      
        	 	
                Principal
                  Amount of

              	
                Principal
                  Amount of

              
	
                Name
                  and Address

              	
                Existing
                  Notes

              	
                Additional
                  Notes

              
	 	 	 
	
                AIGH
                  Investment Partners, LLC

              	
                $3,200,000

              	
                $800,000

              
	
                6006
                  Berkeley Avenue

              	 	 
	
                Baltimore,
                  MD 21209

              	 	 
	 	 	 
	
                Hershel
                  P. Berkowitz

              	
                $600,000

              	
                $150,000

              
	
                441
                  Yeshiva Lane

              	 	 
	
                Baltimore,
                  MD 21208

              	 	 
	 	 	 
	
                Joshua
                  A. Hirsch

              	
                $200,000

              	
                $50,000

              
	
                1
                  Longfellow Place, Suite 3407

              	 	 
	
                Boston,
                  MA 12114AMENDMENT
      NO. 1 TO STOCKHOLDER PLEDGE AND SECURITY AGREEMENT

     

    THIS
      AMENDMENT NO. 1 TO STOCKHOLDER PLEDGE AND SECURITY AGREEMENT, dated as of
      November 20, 2006 (this “Amendment”),
      by
      and among Rector AB, a company organized under the laws of Sweden (“Pledgor”)
      and
      AIGH Investment Partners, LLC (“AIGH”)
      as the
      Pledgeholder for an on behalf of the Investors (as defined below) and as the
      Investors’ agent

     

    W
      I T N E
      S S E T H :

     

    WHEREAS,
      the parties hereto wish to amend the Stockholder Pledge and Security Agreement,
      dated as of February 28, 2006 (the “Stock
      Pledge Agreement”),
      by
      and among the Pledgor and AIGH as the Pledgeholder and agent for the investors
      identified on Exhibit
      A
      thereto
      (the “Existing
      Investors”);

     

    WHEREAS,
      capitalized terms not otherwise defined in this Amendment shall have the meaning
      set forth in the Stock Pledge Agreement;

     

    WHEREAS,
      Neonode (i) on February 28, 2006 issued certain senior secured notes in an
      aggregate principal amount of $4,000,000 (the “Existing
      Notes”)
      to the
      Existing Investors and (ii) intends to issue additional notes of similar tenor
      to the Existing Notes in an aggregate principal amount of up to $1,800,000
      (the
“Additional
      Notes”)
      to
      certain of the investors signatory hereto, including Existing Investors
      (collectively, the “Investors”);
      and

     

    WHEREAS,
      the Pledgor, the Pledgeholder and the Existing Investors wish to amend the
      Stock
      Pledge Agreement to grant to the Investors a security interest in the Pledged
      Collateral to secure Neonode’s obligations to the Investors under the Additional
      Notes, which may from time to time, commencing on the date of this Amendment,
      be
      issued by Neonode to certain Investors.

     

    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 Stock Pledge Agreement hereby agree
      as
      follows:

     

    SECTION
      1. Amendments
      to the Stock Pledge Agreement.
      The
      Stock Pledge Agreement is hereby amended as follows:

     

    (a) Exhibit
      A
      to the
      Stock Pledge Agreement is hereby deleted in its entirety and replaced by
Exhibit
      A
      attached
      to this Amendment.

     

    (b) The
      term
“Notes” as used in the Stock Pledge Agreement shall be deemed to include the
      Additional Notes.

     

    (c) The
      signatories hereto shall be deemed to be signatories to the Stock Pledge
      Agreement.

     

    SECTION
      2. Effect
      of Amendment.
      Except
      as expressly provided in this Amendment, each of the terms and provisions of
      the
      Stock Pledge 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.

     

    [balance
      of page intentionally left blank]

     

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SIGNATURE
      PAGE

    TO

    AMENDMENT
      NO. 1 TO STOCKHOLDER PLEDGE AGREEMENT

    November
      20, 2007

     

    IN
      WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
      executed and delivered by a duly authorized representative as of the date first
      above written.

     

    THE
      PLEDGOR:

     

    
      	 	
              RECTOR
                AB

            
	 	 
	 	 
	 	
              
                By:
                  /s/                                                                             
                  

              

            
	 	
              Name:
                Magnus Goertz

            
	 	
              Title:
                Chairman

            

    

     

    THE
      PLEDGEHOLDER:

     

    
      	 	
              AIGH
                INVESTMENT PARTNERS, LLC

            
	 	 
	 	
              
                By:
                  /s/                                                                             
                  

              

            
	 	
              Name:
                Orin Hirschman

            
	 	
              Title:
                Manager

            

    

     

    AGENT
      FOR
      INVESTORS:

     

    
      	 	
              AIGH
                INVESTMENT PARTNERS, LLC

            
	 	 
	 	
              By:
                /s/                                                                             
                

            
	 	
              Name:
                Orin Hirschman

            
	 	
              Title:
                Manager

            

    

     

    
      	 	
              /s/

            
	 	
              Hershel
                P. Berkowitz

            
	 	 
	 	 
	 	
              /s/

            
	 	
              Joshua
                A. Hirsch

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    EXHIBIT
      A

     

    INVESTORS

     

    AIGH
      Investment Partners, LLC

     

    Hershel
      P. Berkowitz

     

    Dr.
      Joshua A. Hirsch

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