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AMENDMENT
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 Agre
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