Document:

AMENDMENT
      TO SENIOR SECURED NOTES

     

    Dated
      May 22, 2007

     

    AMENDMENT
      TO SENIOR SECURED NOTE, DATED AS OF May 22, 2007 (the “Amendment”),
      made
      by and between NEONODE INC., a Delaware corporation, with its principal offices
      located at Biblioteksgatan 11, S111 44 Stockholm, Sweden (the “Company”)
      and
      the Bridge Investors (as defined below).

     

    Background:
      On
      February 28, 2006, November 20, 2006 and January 22, 2007, the Company sold
      senior secured notes in aggregate principal amount of $10,000,000 (the
“Senior
      Secured Notes”)
      to
      accredited and non-US investors (collectively in this capacity, the
“Bridge
      Investors”).
      The
      Senior Secured Notes provide for amendment by action of the Required Holders
      (defined in the Senior Secured Notes as “the holders of at least 50.1% of the
      aggregate principal amount of Senior Secured Notes”), and this Amendment effects
      such an amendment.

     

    The
      Company sold senior secured notes, due September 30, 2007, in aggregate
      principal amount of $1,000,000 to SBE, Inc., a Delaware corporation
      (“SBE”),
      pursuant to a note purchase agreement, dated as of May 18, 2007, of which one
      note in the principal amount of $500,000 is outstanding (the “SBE
      Notes”).
      The
      Company does not expect the SBE Notes to be extended, so there is a risk to
      Bridge Investors that the SBE Notes may be paid prior to the Senior Secured
      Notes.

     

    The
      Company plans to sell to new investors (the “New
      Investors”)
      up to
      $3,000,000 in principal amount of Senior Secured Notes, in substantially similar
      form to the Senior Secured Notes as amended by this Amendment (the “New
      Notes”).

     

    The
      Company has entered into an Agreement and Plan of Merger and Reorganization,
      dated January 19, 2007, as amended (the “Merger
      Agreement”),
      by
      and among the Company, SBE and Cold Winter Acquisition Corp., a Delaware
      corporation and wholly-owned subsidiary of SBE (“Merger
      Sub”),
      which
      provides for a merger (the “Merger”)
      of the
      Company with and into Merger Sub. The parties to this Amendment wish to extend
      the maturity date of the Senior Secured Notes and SBE Note in order to provide
      the Company with additional time to complete the 

     

    NOW,
      THEREFORE, in consideration of the foregoing, the mutual covenants contained
      herein, and in accordance with the terms and conditions of the Senior Secured
      Notes, the Company and the Holder hereby approve the amendment of the Existing
      Note as set forth herein the parties agree as follows:

     

    1. By
      their
      respective execution of this Amendment, the Company and the undersigned Bridge
      Investors agree that the Senior Secured Notes shall be extended and shall be
      due
      and payable on December 31, 2007.

     

    2. The
      term
      Required Holders is hereby redefined, effective after the date hereof, to
      include all of New Notes, if any are issued, as Senior Secured Notes;
      accordingly, actions that can be taken by the Required Holders under the Senior
      Secured Notes will, after the effective date hereof, require the action of
      holders of at least 50.1% of the aggregate principal amount of Senior Secured
      Notes and New Notes.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3. The
      Amendment shall be effective to extend the term of all Senior Secured Notes
      and
      shall bind all the Bridge Investors when executed and delivered by the Company
      and the Required Holders.

     

    4. Except
      as
      expressly provided herein, the Senior Secured Notes and SBE Notes shall continue
      in full force and effect.

     

    IN
      WITNESS WHEREOF, the undersigned have executed and delivered this Amendment
      to
      Senior Secured Notes, dated May 22, 2007.

    

      
        	
                Company:

              	
                NEONODE
                  INC.

              
	 	 
	 	
                By:
                  __________________________________

              
	 	
                Name:
                  Mikael Hagman

              
	 	
                Title:
                  CEO & President

              
	 	 
	
                Bridge
                  Investors:

              	 
	
                Date:
                  May 22, 2007

              	
                [____________________________________]

              
	 	 
	 	
                By:__________________________________ 

              
	 	
                Name:
                  AIGH Investment Partners LLC

              
	 	
                Title:
                  Manager, GP

              
	 	 
	
                Date:
                  May 22, 2007

              	
                [____________________________________]

              
	 	 
	 	
                By:__________________________________ 

              
	 	
                Name:
                  Hirshcel Berkowitz

              
	 	
                Title:

              
	 	 
	
                Date:
                  May 22, 2007

              	
                [____________________________________]

              
	 	 
	 	
                By:__________________________________ 

              
	 	
                Name:
                  Joshua Hirsch

              
	 	
                Title:

              
	
                Date:
                  May 25, 2007

              	
                Iwojima
                  Sarl

              
	 	
                [____________________________________]

              
	 	
                By:__________________________________ 

              
	 	
                Name:
                  Oliver Kuchly

              
	 	
                Title:
                  ManagerAMENDMENT
      NO. 4 TO SECURITY AGREEMENT

     

    THIS
      AMENDMENT NO. 4 dated as of July 31, 2007 (this “Amendment”)
      to the
      Security Agreement dated 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 has entered into that certain Agreement and Plan of Merger and
      Reorganization, dated as of January 19, 2007, as amended (the “Merger
      Agreement”),
      by
      and among the Grantor, SBE, Inc. (“SBE”),
      a
      Delaware corporation and Cold Winter Acquisition Corp., a Delaware corporation
      and wholly-owned subsidiary of SBE (“Merger
      Sub”),
      which
      provides for a merger (the “Merger”)
      of the
      Grantor with and into Merger Sub;

     

    WHEREAS,
      the Grantor has borrowed an aggregate of $13,000,000 principal amount of senior
      secured notes (the “Bridge
      Notes”)
      from
      the Secured Party and other investors (collectively, in this capacity, the
      “Bridge
      Note Investors”)
      in
      offerings on February 28, 2006, November 20, 2006, January 22,
      2007 and June 4, 2007;

     

    WHEREAS,
      the Grantor sold additional senior secured notes to SBE, Inc. (the “SBE
      Note”)
      in the
      aggregate principal amount of $1,000,000 (the “Offering”),
      in
      the substantially the form attached as Exhibit
      1
      to that
      certain Note Purchase Agreement, dated May 18, 2007 (the “Note
      Purchase Agreement”),
      between the Grantor and SBE, Inc. (“SBE”
and
      together with the Investors previously identified in the Security Agreement
      as
      the Old Investors, as “Investor”);

     

    WHEREAS,
      the Grantor intends to sell additional Senior Secured Notes, substantially
      similar to the Bridge Notes (except that (i) they are not automatically
      converted in the Merger, (ii) bear interest at 8% and (iii) may be converted
      on
      different terms) (the “July 2007 Notes”) in the principal amount of up to
      $4,000,000; and

     

    WHEREAS,
      the parties hereto wish to amend the Security Agreement to add as Obligations
      the obligations of the Grantor under the July 2007 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 the New Note, as follows:

     

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

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b) That
      the
      Obligations under the Security Agreement include the obligations of the Grantor
      under the Amended and Restated Notes, the New Notes, the SBE Note, the May
      2007
      Note, and the July 2007 Notes; provided that the aggregate principal amounts
      of
      the Amended and Restated Notes, the New Notes, the SBE Note, the May 2007 Notes,
      and the July 2007 Notes do not exceed $18,000,000.

     

    (c) The
      July
      2007 Notes shall be pari passu with the Amended and Restated Notes, the New
      Notes, the SBE Note and the May 2007 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. 4 TO SECURITY AGREEMENT

    Dated
      as
      of the date first written above

     

    
      	
              THE
                GRANTOR:

            	
               

              Neonode
                Inc.

              a
                Delaware corporation

               

              By:_________________________________

              Name:
                Mikael Halman

              Title:
                President & CEO

              Address
                for Notices:

              Biblioteksgatan
                11

              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

     

     

    [To
      Be
      Updated]

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