Document:

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.

    
      
        
        

      

      
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    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.

    
      
        
        

      

      
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    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.

    
      
        
        

      

      
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    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.

    
      
        
        

      

      
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    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.

    
      
        
        

      

      
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    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.

    
      
        
        

      

      
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    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.

    
      
        
        

      

      
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    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:____________________________________________________________________________________________________________________________________

    

    ____________________________________________________________________________________________________________________________________

     

    
      
        
        

      

      
        11EXHIBIT
        10.25

      

      NEITHER
        THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR
        THE
        SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE 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.

      

      
        	 	
                Right
                  to Purchase ____________ shares of Common Stock of Neonode Inc.
                  (subject
                  to adjustment as provided herein)

              

      

      

      COMMON
        STOCK PURCHASE WARRANT

       

      
        	
                No. 2007-A-001

              	
                Issue
                  Date: September ___, 2007

              

      

      

      NEONODE
        INC., a corporation organized under the laws of the State of Delaware (the
        “Company”), hereby certifies that, for value received,
        __________________________________,
        _____________________________________________________________, or its assigns
        (the “Holder”), is entitled, subject to the terms set forth below, to purchase
        from the Company at any time commencing six months after the Issue Date until
        5:00 p.m., E.S.T on the fifth anniversary of the Issue Date (the “Expiration
        Date”), up to ____________ fully paid and nonassessable shares of Common Stock
        at a per share purchase price of $[______]. The aforedescribed purchase price
        per share, as adjusted from time to time as herein provided, is referred
        to
        herein as the "Purchase Price." The number and character of such shares of
        Common Stock and the Purchase Price are subject to adjustment as provided
        herein. The Company may reduce the Purchase Price for some or all of the
        Warrants, temporarily or permanently. Capitalized terms used and not otherwise
        defined herein shall have the meanings set forth in that certain Subscription
        Agreement (the “Subscription
        Agreement”),
        dated
        as of September ___, 2007, entered into by the Company and the
        Holder.

      

      As
        used
        herein the following terms, unless the context otherwise requires, have the
        following respective meanings: 

       

      (a) The
        term
“Company” shall include Neonode Inc. and any corporation which shall succeed or
        assume the obligations of Neonode Inc. hereunder. 

       

      (b) The
        term
“Common Stock” includes (a) the Company's Common Stock, $0.001 par value
        per share, as authorized on the date of the Subscription Agreement, and (b)
        any
        other securities into which or for which any of the securities described
        in
        (a) may be converted or exchanged pursuant to a plan of recapitalization,
        reorganization, merger, sale of assets or otherwise.

      (c) The
        term
“Other Securities” refers to any stock (other than Common Stock) and other
        securities of the Company or any other person (corporate or otherwise) which
        the
        holder of the Warrant at any time shall be entitled to receive, or shall
        have
        received, on the exercise of the Warrant, in lieu of or in addition to Common
        Stock, or which at any time shall be issuable or shall have been issued in
        exchange for or in replacement of Common Stock or Other Securities pursuant
        to
        Section 4 or otherwise. 

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      (d) The
        term
“Warrant Shares” shall mean the Common Stock issuable upon exercise of this
        Warrant.

       

      1. Exercise
        of Warrant.

       

      1.1. Number
        of Shares Issuable upon Exercise.
        From
        and after the Issue Date through and including the Expiration Date, the Holder
        hereof shall be entitled to receive, upon exercise of this Warrant in whole
        in
        accordance with the terms of subsection 1.2 or upon exercise of this
        Warrant in part in accordance with subsection 1.3, shares of Common Stock
        of the Company, subject to adjustment pursuant to Section 4.

       

      1.2. Full
        Exercise.
        This
        Warrant may be exercised in full by the Holder hereof by delivery of an original
        or facsimile copy of the form of subscription attached as Exhibit A hereto
        (the “Subscription Form”) duly executed by such Holder and delivery within two
        days thereafter of payment, in cash, wire transfer or by certified or official
        bank check payable to the order of the Company, in the amount obtained by
        multiplying the number of shares of Common Stock for which this Warrant is
        then
        exercisable by the Purchase Price then in effect. The original Warrant is
        not
        required to be surrendered to the Company until it has been fully exercised.
        

       

      1.3. Partial
        Exercise.
        This
        Warrant may be exercised in part (but not for a fractional share) by delivery
        of
        a Subscription Form in the manner and at the place provided in
        subsection 1.2 except that the amount payable by the Holder on such partial
        exercise shall be the amount obtained by multiplying (a) the number of
        whole shares of Common Stock designated by the Holder in the Subscription
        Form
        by (b) the Purchase Price then in effect. On any such partial exercise
        provided the Holder has surrendered the original Warrant, the Company, at
        its
        expense, will forthwith issue and deliver to or upon the order of the Holder
        hereof a new Warrant of like tenor, in the name of the Holder hereof or as
        such
        Holder (upon payment by such Holder of any applicable transfer taxes) may
        request, the whole number of shares of Common Stock for which such Warrant
        may
        still be exercised for the balance of.

       

      1.4. Fair
        Market Value.
        Fair
        Market Value of a share of Common Stock as of a particular date (the
        "Determination Date") shall mean: 

       

      (a) If
        the
        Company's Common Stock is traded on an exchange or is quoted on the NASDAQ
        Global Market, Nasdaq Global Select Market, the NASDAQ Capital Market, the
        New
        York Stock Exchange or the American Stock Exchange, LLC, then the average
        of the
        closing or last sale prices, respectively, reported for the ten trading days
        immediately preceding the Determination Date;

       

      (b) If
        the
        Company's Common Stock is not traded on an exchange or on the NASDAQ Global
        Market, Nasdaq Global Select Market, the NASDAQ Capital Market, the New York
        Stock Exchange or the American Stock Exchange, LLC, but is traded in the
        over-the-counter market, then the average of the closing bid and ask prices
        reported for the ten trading days immediately preceding the Determination
        Date;

       

      (c) Except
        as
        provided in clause (d) below and Section 3.1, if the Company's Common Stock
        is not publicly traded, then as the Holder and the Company agree, or in the
        absence of such an agreement, by arbitration in accordance with the rules
        then
        standing of the American Arbitration Association, before a single arbitrator
        to
        be chosen from a panel of persons qualified by education and training to
        pass on
        the matter to be decided; or

       

      (d) If
        the
        Determination Date is the date of a liquidation, dissolution or winding up,
        or
        any event deemed to be a liquidation, dissolution or winding up pursuant
        to the
        Company's charter, then all amounts to be payable per share to holders of
        the
        Common Stock pursuant to the charter in the event of such liquidation,
        dissolution or winding up, plus all other amounts to be payable per share
        in
        respect of the Common Stock in liquidation under the charter, assuming for
        the
        purposes of this clause (d) that all of the shares of Common Stock then
        issuable upon exercise of all of the Warrants are outstanding at the
        Determination Date.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      1.5. Company
        Acknowledgment.
        The
        Company will, at the time of the exercise of the Warrant, upon the request
        of
        the Holder hereof acknowledge in writing its continuing obligation to afford
        to
        such Holder any rights to which such Holder shall continue to be entitled
        after
        such exercise in accordance with the provisions of this Warrant. If the Holder
        shall fail to make any such request, such failure shall not affect the
        continuing obligation of the Company to afford to such Holder any such
        rights.

       

      1.6. Trustee
        for Warrant Holders.
        In the
        event that a bank or trust company shall have been appointed as trustee for
        the
        Holder of the Warrants pursuant to Subsection 3.2, such bank or trust
        company shall have all the powers and duties of a warrant agent (as hereinafter
        described) and shall accept, in its own name for the account of the Company
        or
        such successor person as may be entitled thereto, all amounts otherwise payable
        to the Company or such successor, as the case may be, on exercise of this
        Warrant pursuant to this Section 1. 

       

      1.7 Delivery
        of Stock Certificates, etc. on Exercise.
        The
        Company agrees that the shares of Common Stock purchased upon exercise of
        this
        Warrant shall be deemed to be issued to the Holder hereof as the record owner
        of
        such shares as of the close of business on the date on which delivery of
        a
        Subscription Form shall have occurred and payment made for such shares as
        aforesaid. As soon as practicable after the exercise of this Warrant in full
        or
        in part, and in any event within three (3) business
        days
        thereafter (“Warrant Share Delivery Date”), the Company at its expense
        (including the payment by it of any applicable issue taxes) will cause to
        be
        issued in the name of and delivered to the Holder hereof, or as such Holder
        (upon payment by such Holder of any applicable transfer taxes) may direct
        in
        compliance with applicable securities laws, a certificate or certificates
        for
        the number of duly and validly issued, fully paid and non-assessable shares
        of
        Common Stock (or Other Securities) to which such Holder shall be entitled
        on
        such exercise, plus, in lieu of any fractional share to which such Holder
        would
        otherwise be entitled, cash equal to such fraction multiplied by the then
        Fair
        Market Value of one full share of Common Stock, together with any other stock
        or
        other securities and property (including cash, where applicable) to which
        such
        Holder is entitled upon such exercise pursuant to Section 1 or otherwise.
        The Company understands that a delay in the delivery of the Warrant Shares
        after
        the Warrant Share Delivery Date could result in economic loss to the Holder.
        As
        compensation to the Holder for such loss, the Company agrees to pay (as
        liquidated damages and not as a penalty) to the Holder for late issuance
        of
        Warrant Shares upon exercise of this Warrant the proportionate amount of
        $100
        per business day after the Warrant Share Delivery Date for each $10,000 of
        Purchase Price of Warrant Shares for which this Warrant is exercised which
        are
        not timely delivered. The Company shall pay any payments incurred under this
        Section in immediately available funds upon demand. Furthermore, in addition
        to
        any other remedies which may be available to the Holder, in the event that
        the
        Company fails for any reason to effect delivery of the Warrant Shares by
        the
        Warrant Share Delivery Date, the Holder may revoke all or part of the relevant
        Warrant exercise by delivery of a notice to such effect to the Company,
        whereupon the Company and the Holder shall each be restored to their respective
        positions immediately prior to the exercise of the relevant portion of this
        Warrant, except that the liquidated damages described above shall be payable
        through the date notice of revocation or rescission is given to the Company.
        

       

      1.8 Buy-In.
        In
        addition to any other rights available to the Holder, if the Company fails
        to
        deliver to a Holder the Warrant Shares as required pursuant to this Warrant,
        within seven (7) business days after the Warrant Share Delivery Date and
        the
        Holder or a broker on the Holder’s behalf, purchases (in an open market
        transaction or otherwise) shares of common stock to deliver in satisfaction
        of a
        sale by such Holder of the Warrant Shares which the Holder was entitled to
        receive from the Company (a "Buy-In"),
        then
        the Company shall pay in cash to the Holder (in addition to any remedies
        available to or elected by the Holder) the amount by which (A) the Holder's
        total purchase price (including brokerage commissions, if any) for the shares
        of
        common stock so purchased exceeds (B) the aggregate Purchase Price of the
        Warrant Shares
        required
        to have been delivered together
        with interest thereon at a rate of 15% per annum, accruing until such amount
        and
        any accrued interest thereon is paid in full (which amount shall be paid
        as
        liquidated damages and not as a penalty). For
        example, if a Holder purchases shares of Common Stock having a total purchase
        price of $11,000 to cover a Buy-In with respect to $10,000 of Purchase Price
        of
        Warrant Shares to have been received upon exercise of this Warrant, the Company
        shall be required to pay the Holder $1,000,
        plus interest. The
        Holder shall provide the Company written notice indicating the amounts payable
        to the Holder in respect of the Buy-In.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      2. Cashless
        Exercise.

       

      (a) If
        a
        registration statement (as described in Section 11 of the Subscription
        Agreement) (“Registration Statement”) is effective and the Holder may sell its
        shares of Common Stock upon exercise hereof pursuant to the registration
        statement, this Warrant may be exercisable in whole or in part for cash only
        as
        set forth in Section 1 above. If such registration statement is not available,
        then commencing one year after the Issue Date, payment upon exercise may
        be made
        at the option of the Holder either in (i) cash, wire transfer or by
        certified or official bank check payable to the order of the Company equal
        to
        the applicable aggregate Purchase Price, (ii) by delivery of Common Stock
        issuable upon exercise of the Warrants in accordance with
        Section (b) below or (iii) by a combination of any of the
        foregoing methods, for the number of Common Stock specified in such form
        (as
        such exercise number shall be adjusted to reflect any adjustment in the total
        number of shares of Common Stock issuable to the holder per the terms of
        this
        Warrant) and the holder shall thereupon be entitled to receive the number
        of
        duly authorized, validly issued, fully-paid and non-assessable shares of
        Common
        Stock (or Other Securities) determined as provided herein.

       

      (b) Subject
        to the provisions herein to the contrary, if the Fair Market Value of one
        share
        of Common Stock is greater than the Purchase Price (at the date of calculation
        as set forth below), in lieu of exercising this Warrant for cash, the holder
        may
        elect to receive shares equal to the value (as determined below) of this
        Warrant
        (or the portion thereof being cancelled) by surrender of this Warrant at
        the
        principal office of the Company together with the properly endorsed Subscription
        Form in which event the Company shall issue to the holder a number of shares
        of
        Common Stock computed using the following formula:

       

      
        
          	 	 	
                  X=Y
                    (A-B)

                
	 	 	
                     
                    A

                
	 	 	 
	
                  Where

                	 	
                  X=

                	
                  the
                    number of shares of Common Stock to be issued to the
                    holder

                
	 	 	 	 
	 	 	
                  Y=

                	
                  the
                    number of shares of Common Stock purchasable under the Warrant
                    or, if only
                    a portion of the Warrant is being exercised, the portion of the
                    Warrant
                    being exercised (at the date of such calculation)

                
	 	 	 	 
	 	 	
                  A=

                	
                  the
                    average of the closing sale prices of the Common Stock for the
                    five (5)
                    Trading Days immediately prior to (but not including) the Exercise
                    Date,
                    or Fair Market Value, whichever is less

                
	 	 	 	 
	 	 	
                  B=

                	
                  Purchase
                    Price (as adjusted to the date of such
                    calculation)

                

        

      

       

      For
        purposes of Rule 144 promulgated under the 1933 Act, it is intended, understood
        and acknowledged that the Warrant Shares issued in a cashless exercise
        transaction shall be deemed to have been acquired by the Holder, and the
        holding
        period for the Warrant Shares shall be deemed to have commenced, on the date
        this Warrant was originally issued pursuant to the Subscription
        Agreement.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      3. Adjustment
        for Reorganization, Consolidation, Merger, etc.

       

      3.1. Fundamental Transaction. 
        If, at any time while this Warrant is outstanding, (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"), then, upon
        any subsequent exercise of this Warrant, the Holder shall have the
        right to receive, for each Warrant Share that would have been issuable upon
        such
        exercise immediately prior to the occurrence of such
        Fundamental Transaction, at the option of the Holder, (a) upon
        exercise of this Warrant, the number of shares of Common Stock of
        the successor or acquiring corporation or of the
        Company, if it is the surviving corporation, and any additional
        consideration (the "Alternate Consideration") receivable upon or as
        a result of such reorganization,
        reclassification, merger, consolidation or disposition of assets
        by a Holder of the number of shares of Common Stock for
        which this Warrant is exercisable immediately prior to such
        event or (b) if the Company is acquired in (1) a transaction
        where the consideration paid to the holders of the Common Stock consists
        solely
        of cash, (2) a “Rule 13e-3 transaction” as defined in Rule 13e-3 under the 1934
        Act, or (3) a transaction involving a person or entity not traded on a national
        securities exchange, the Nasdaq Global Select Market, the Nasdaq Global Market
        or the Nasdaq Capital Market, cash equal to the Black-Scholes
        Value.  For purposes of any such exercise, the
        determination of the Purchase Price shall
        be appropriately adjusted to apply to such Alternate
        Consideration based on the amount of
        Alternate Consideration issuable in respect of one share of Common
        Stock in such Fundamental Transaction, and
        the Company shall apportion the Purchase Price
        among the Alternate Consideration in a
        reasonable manner reflecting the relative value of any different
        components of the Alternate Consideration.  If holders of Common Stock
        are given any choice as to the securities, cash or property to be
        received in a Fundamental Transaction, then the Holder shall be given
        the same choice as to the Alternate Consideration it receives upon any exercise
        of this Warrant following such Fundamental Transaction.  To the extent
        necessary to effectuate the foregoing provisions, any
        successor to the Company or surviving entity in such
        Fundamental Transaction shall issue to the Holder a
        new warrant consistent with
        the foregoing provisions and evidencing the
        Holder's right to exercise such warrant into Alternate
        Consideration.  The terms of any agreement pursuant to which a
        Fundamental Transaction is effected shall include terms requiring any such
        successor or surviving entity to comply with the provisions of
        this Section 3.1 and insuring that this Warrant (or any such
        replacement security) will be
        similarly adjusted upon any subsequent transaction analogous to a
        Fundamental Transaction. “Black-Scholes Value” shall be determined in accordance
        with the Black-Scholes Option Pricing Model obtained from the “OV” function on
        Bloomberg L.P. using (i) a price per share of Common Stock equal to the VWAP
        of
        the Common Stock for the Trading Day immediately preceding the date of
        consummation of the applicable Fundamental Transaction, (ii) a risk-free
        interest rate corresponding to the U.S. Treasury rate for a period equal
        to the
        remaining term of this Warrant as of the date of such request and (iii) an
        expected volatility equal to the 100 day volatility obtained from the HVT
        function on Bloomberg L.P. determined as of the Trading Day immediately
        following the public announcement of the applicable Fundamental
        Transaction.

       

      3.2. Dissolution.
        In the
        event of any dissolution of the Company following the transfer of all or
        substantially all of its properties or assets, the Company, prior to such
        dissolution, shall at its expense deliver or cause to be delivered the stock
        and
        other securities and property (including cash, where applicable) receivable
        by
        the Holder of the Warrants after the effective date of such dissolution pursuant
        to this Section 3 to a bank or trust company (a "Trustee") having its
        principal office in New York, NY, as trustee for the Holder of the
        Warrants. Such property shall be delivered only upon payment of the Warrant
        exercise price. 

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      3.3. Continuation
        of Terms.
        Upon
        any reorganization, consolidation, merger or transfer (and any dissolution
        following any transfer) referred to in this Section 3, this Warrant shall
        continue in full force and effect and the terms hereof shall be applicable
        to
        the Other Securities and property receivable on the exercise of this Warrant
        after the consummation of such reorganization, consolidation or merger or
        the
        effective date of dissolution following any such transfer, as the case may
        be,
        and shall be binding upon the issuer of any Other Securities, including,
        in the
        case of any such transfer, the person acquiring all or substantially all
        of the
        properties or assets of the Company, whether or not such person shall have
        expressly assumed the terms of this Warrant as provided in Section 4. In
        the event this Warrant does not continue in full force and effect after the
        consummation of the transaction described in this Section 3, then only in
        such event will the Company's securities and property (including cash, where
        applicable) receivable by the Holder of the Warrants be delivered to the
        Trustee
        as contemplated by Section 3.2.

       

      3.4 Share
        Issuance.
        The
        Holder of this Warrant has been granted anti-dilution protection described
        in
        the Subscription Agreement, which are incorporated herein by this
        reference.

       

      4. Extraordinary
        Events Regarding Common Stock.
        In the
        event that the Company shall (a) issue additional shares of the Common
        Stock as a dividend or other distribution on outstanding Common Stock,
        (b) subdivide its outstanding shares of Common Stock, or (c) combine
        its outstanding shares of the Common Stock into a smaller number of shares
        of
        the Common Stock, then, in each such event, the Purchase Price shall,
        simultaneously with the happening of such event, be adjusted by multiplying
        the
        then Purchase Price by a fraction, the numerator of which shall be the number
        of
        shares of Common Stock outstanding immediately prior to such event and the
        denominator of which shall be the number of shares of Common Stock outstanding
        immediately after such event, and the product so obtained shall thereafter
        be
        the Purchase Price then in effect. The Purchase Price, as so adjusted, shall
        be
        readjusted in the same manner upon the happening of any successive event
        or
        events described herein in this Section 4. The number of shares of Common
        Stock that the Holder of this Warrant shall thereafter, on the exercise hereof,
        be entitled to receive shall be adjusted to a number determined by multiplying
        the number of shares of Common Stock that would otherwise (but for the
        provisions of this Section 4 be issuable on such exercise by a fraction of
        which
        (a) the numerator is the Purchase Price that would otherwise (but for the
        provisions of this Section 4 be in effect, and (b) the denominator is the
        Purchase Price in effect on the date of such exercise.

       

      5. Certificate
        as to Adjustments.
        In each
        case of any adjustment or readjustment in the shares of Common Stock (or
        Other
        Securities) issuable on the exercise of the Warrants, the Company at its
        expense
        will promptly cause its Chief Financial Officer or other appropriate designee
        to
        compute such adjustment or readjustment in accordance with the terms of the
        Warrant and prepare a certificate setting forth such adjustment or readjustment
        and showing in detail the facts upon which such adjustment or readjustment
        is
        based, including a statement of (a) the consideration received or
        receivable by the Company for any additional shares of Common Stock (or Other
        Securities) issued or sold or deemed to have been issued or sold, (b) the
        number of shares of Common Stock (or Other Securities) outstanding or deemed
        to
        be outstanding, and (c) the Purchase Price and the number of shares of
        Common Stock to be received upon exercise of this Warrant, in effect immediately
        prior to such adjustment or readjustment and as adjusted or readjusted as
        provided in this Warrant. The Company will forthwith mail a copy of each
        such
        certificate to the Holder of the Warrant and any Warrant Agent of the Company
        (appointed pursuant to Section 11 hereof).

       

      6. Reservation
        of Stock, etc. Issuable on Exercise of Warrant; Financial
        Statements.
        The
        Company will at all times reserve and keep available, solely for issuance
        and
        delivery on the exercise of the Warrants, all shares of Common Stock (or
        Other
        Securities) from time to time issuable on the exercise of the Warrant. This
        Warrant entitles the Holder hereof to receive copies of all financial and
        other
        information distributed or required to be distributed to the holders of the
        Company's Common Stock. 

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      7. Assignment;
        Exchange of Warrant.
        Subject
        to compliance with applicable securities laws, this Warrant, and the rights
        evidenced hereby, may be transferred by any registered holder hereof (a
        "Transferor"). On the surrender for exchange of this Warrant, with the
        Transferor's endorsement in the form of Exhibit B attached hereto (the
“Transferor Endorsement Form") and together with an opinion of counsel
        reasonably satisfactory to the Company that the transfer of this Warrant
        will be
        in compliance with applicable securities laws, the Company will issue and
        deliver to or on the order of the Transferor thereof a new Warrant or Warrants
        of like tenor, in the name of the Transferor and/or the transferee(s) specified
        in such Transferor Endorsement Form (each a "Transferee"), calling in the
        aggregate on the face or faces thereof for the number of shares of Common
        Stock
        called for on the face or faces of the Warrant so surrendered by the
        Transferor.

       

      8. Replacement
        of Warrant.
        On
        receipt of evidence reasonably satisfactory to the Company of the loss, theft,
        destruction or mutilation of this Warrant and, in the case of any such loss,
        theft or destruction of this Warrant, on delivery of an indemnity agreement
        or
        security reasonably satisfactory in form and amount to the Company or, in
        the
        case of any such mutilation, on surrender and cancellation of this Warrant,
        the
        Company at its expense, twice only, will execute and deliver, in lieu thereof,
        a
        new Warrant of like tenor.

       

      9. Registration
        Rights.
        The
        Holder of this Warrant has been granted certain registration rights by the
        Company. These registration rights are set forth in the Subscription Agreement.
        The terms of the Subscription Agreement are incorporated herein by this
        reference.

       

      10. Maximum
        Exercise.
        The
        Holder shall not be entitled to exercise this Warrant on an exercise
        date, 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 an exercise date, and (ii) the number
        of shares of Common Stock issuable upon the exercise of this Warrant with
        respect to which the determination of this limitation is being made on an
        exercise date, which would result in beneficial ownership by the Holder and
        its
        affiliates of more than 4.99% of the outstanding shares of Common Stock on
        such
        date. For the purposes of the immediately preceding sentence, beneficial
        ownership shall be determined in accordance with Section 13(d) of the
        Securities 1934 Act , and Rule 13d-3 thereunder. Subject to the foregoing,
        the
        Holder shall not be limited to aggregate exercises which would result in
        the
        issuance of more than 4.99%. The
        restriction described in this paragraph may be waived, in whole or in part,
        upon sixty-one (61) days prior notice from the Holder to the Company to increase
        such percentage to up to 9.99%, but not in excess of 9.99%. The Holder may
        decide whether to convert a Convertible Note or exercise this Warrant to
        achieve
        an actual 4.99% or up to 9.99% ownership position as described above, but
        not in
        excess of 9.99%.

       

      11. Warrant
        Agent.
        The
        Company may, by written notice to the Holder of the Warrant, appoint an agent
        (a
“Warrant Agent”) for the purpose of issuing Common Stock (or Other Securities)
        on the exercise of this Warrant pursuant to Section 1, exchanging this
        Warrant pursuant to Section 7, and replacing this Warrant pursuant to
        Section 8, or any of the foregoing, and thereafter any such issuance,
        exchange or replacement, as the case may be, shall be made at such office
        by
        such Warrant Agent. 

       

      12. Transfer
        on the Company's Books.
        Until
        this Warrant is transferred on the books of the Company, the Company may
        treat
        the registered holder hereof as the absolute owner hereof for all purposes,
        notwithstanding any notice to the contrary. 

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      13. 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: if to the Company, to: Neonode
        Inc., 4000 Executive Parkway, Suite 200, San Ramon, CA 94583, Attn: Chief
        Financial Officer, 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 address and telecopier number
        listed
        on the first paragraph of this Warrant, 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.

       

      14. Law
        Governing This Warrant.
        This
        Warrant shall be governed by and construed in accordance with the laws of
        the
        State of New York without regard to principles of conflicts of laws. Any
        action
        brought by either party against the other concerning the transactions
        contemplated by this Warrant shall be brought only in the state courts of
        New
        York or in the federal courts located in the state and county of New York.
        The
        parties to this Warrant hereby irrevocably waive any objection to jurisdiction
        and venue of any action instituted hereunder and shall not assert any defense
        based on lack of jurisdiction or venue or based upon forum
        non conveniens.
        The
        Company and Holder waive trial by jury. 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 Warrant or any other agreement delivered
        in
        connection herewith 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 enforceability
        of
        any other provision of any agreement. Each party hereby irrevocably waives
        personal service of process and consents to process being served in any suit,
        action or proceeding in connection with this Agreement or any other Transaction
        Document by mailing a copy thereof via registered or certified mail or overnight
        delivery (with evidence of delivery) to such party at the address in effect
        for
        notices to it under this Agreement and agrees that such service shall constitute
        good and sufficient service of process and notice thereof. Nothing contained
        herein shall be deemed to limit in any way any right to serve process in
        any
        other manner permitted by law.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, the Company has executed this Warrant as of the date first
        written above. 

       

      
        	 	
                NEONODE
                  INC.

              
	 	 
	 	 
	 	
                By:

              	 
	 	
                 

              	
                Name:

              

      

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      Exhibit A

      

      FORM
        OF
        SUBSCRIPTION

      (to
        be
        signed only on exercise of Warrant)

       

      TO:
        NEONODE INC. 

       

      The
        undersigned, pursuant to the provisions set forth in the attached Warrant
        (No.____), hereby irrevocably elects to purchase (check applicable
        box):

      

      ___ ________
        shares of the Common Stock covered by such Warrant; or

       

      ___ the
        maximum number of shares of Common Stock covered by such Warrant pursuant
        to the
        cashless exercise procedure set forth in Section 2.

      

      The
        undersigned herewith makes payment of the full purchase price for such shares
        at
        the price per share provided for in such Warrant, which is $___________.
        Such
        payment takes the form of (check applicable box or boxes):

      

      ___ $__________
        in lawful money of the United States; and/or

       

      ___ the
        cancellation of such portion of the attached Warrant as is exercisable for
        a
        total of _______ shares of Common Stock (using a Fair Market Value of $_______
        per share for purposes of this calculation); and/or

      

      ___ the
        cancellation of such number of shares of Common Stock as is necessary, in
        accordance with the formula set forth in Section 2, to exercise this
        Warrant with respect to the maximum number of shares of Common Stock purchasable
        pursuant to the cashless exercise procedure set forth in
        Section 2.

      

      The undersigned requests that the certificates for such shares be issued in the name of, and delivered to ____________________________________________________________

      whose address is_______________________________________________________________________________________________________________________________

      __________________________________________________________________________________________________________________________________________
        .

      

      The
        undersigned represents and warrants that all offers and sales by the undersigned
        of the securities issuable upon exercise of the within Warrant shall be made
        pursuant to registration of the Common Stock under the Securities Act of
        1933,
        as amended (the "Securities Act"), or pursuant to an exemption from registration
        under the Securities Act.

      

      
        	
                Dated:

              	 	 	 
	 	 	
                (Signature
                  must conform to name of holder as

              
	 	 	
                specified
                  on the face of the Warrant)

              
	 	 	 
	 	 	 
	 	 	 
	 	 	
                (Address)

              

      

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      Exhibit B

       

      FORM
        OF
        TRANSFEROR ENDORSEMENT

      (To
        be
        signed only on transfer of Warrant)

       

      For
        value
        received, the undersigned hereby sells, assigns, and transfers unto the
        person(s) named below under the heading "Transferees" the right represented
        by
        the within Warrant to purchase the percentage and number of shares of Common
        Stock of NEONODE INC. to which the within Warrant relates specified under
        the
        headings "Percentage Transferred" and "Number Transferred," respectively,
        opposite the name(s) of such person(s) and appoints each such person Attorney
        to
        transfer its respective right on the books of NEONODE INC. with full power
        of
        substitution in the premises.

       

      
        	
                Transferees

              	 	
                Percentage
                  Transferred

              	 	
                Number
                  Transferred

              
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

      

       

      
        	
                Dated:
                  

              	___________,
                _________________	 	
                 

              
	 	 	
                
                  (Signature
                    must conform to name of holder as specified 

                

              
	 	 	
                on
                  the face of the warrant)

              
	 	 	 
	
                Signed
                  in the presence of:

              	 	 
	 	 	 
	
                (Name)

              	 	 
	 	 	
                (address)

              
	 	 	 
	
                ACCEPTED
                  AND AGREED:

              	 	 
	
                [TRANSFEREE]

              	 	 
	 	 	
                (address)

              
	 	 	 
	 	 	 
	
                (Name)

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