AMENDMENT NO. 2 TO SECURITY AGREEMENT
AMENDMENT
NO. 2 TO SECURITY AGREEMENT
THIS
AMENDMENT NO. 2 dated as of January ,
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”).
W
I T N E
S S E T H :
WHEREAS,
capitalized terms not otherwise defined in this Amendment shall have the meaning
set forth in the Security Agreement;
WHEREAS,
the Grantor on February 28, 2006, borrowed an aggregate principal amount of
$4,000,000 pursuant to senior secured notes (the “First
Round Notes”)
from
the Secured Party and other Investors (collectively, in this capacity, the
“First
Round Investors”);
WHEREAS,
the Grantor on November 20, 2006, borrowed an aggregate principal amount of
$1,000,000 pursuant to senior secured notes on substantially the same terms
as
the First Round Notes (collectively, with the First Round Notes, the
“Old
Notes”)
from
the Secured Party and other Investors (collectively, in this capacity, the
“Second
Round Investors”)
and
together with the First Round Investors, the “Existing
Investors”);
WHEREAS,
the Grantor intends to sell additional senior secured notes to the Existing
Investors and to other investors (the “New
Notes”)
in an
aggregate principal amount of up to $5,000,000 (the “Offering”),
in
substantially the form attached as Exhibit
1
to that
certain Note Purchase Agreement, dated January 22, 2007 (the “Note
Purchase Agreement”),
among
the Grantor, the Secured Party and those persons who execute the Note Purchase
Agreement from time to time as a purchaser of the New Notes (collectively,
in
this capacity, the “New
Investors”);
and
WHEREAS,
the Existing Investors intend to exchange the Old Notes for amended and restated
notes of similar tenor to the New Notes (the “Amended
and Restated Notes”)
pursuant to the terms of that certain Bridge Note Exchange Agreement, dated
as
of January 22, 2007, by and among the Grantor and the Existing Investors;
and
WHEREAS,
the parties hereto wish to amend the Security Agreement to add as Obligations
the obligations of the Grantor under the Amended and Restated Notes and the
New
Notes.
NOW,
THEREFORE, in consideration of the mutual covenants contained herein and for
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged, the parties to the Security Agreement hereby agree as
follows:
SECTION
1. Amendments
to the Security Agreement.
The
Security Agreement is hereby amended, effective upon completion of the purchase
from time to time of any New Notes, 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) The
parties hereto agree that the Obligations under the Security Agreement include
the obligations of the Grantor under the Amended and Restated Notes and the
New
Notes; provided that the aggregate principal amount of the Amended and Restated
Notes together with the aggregate principal amount of the New Notes does not
exceed $10,000,000.
(c) The
parties hereto agree that the New Notes shall be pari passu with the Amended
and
Restated 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 Second 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. 2 TO SECURITY AGREEMENT
Dated
January ____, 2007
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THE
GRANTOR:
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a
Delaware corporation
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By:________________________________
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Name:
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Title:
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Address
for Notices:
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Xxxxxxxxxxxxxxx
00
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X000
00 Xxxxxxxxx, Xxxxxx
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Attention:
President
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Fax:
00000-0-000 18 51
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SECURED
PARTY:
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AIGH
INVESTMENT PARTNERS, LLC
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By:________________________________
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Name:
Xxxx Xxxxxxxxx
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Title:
Manager
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SCHEDULE
I
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EXISTING
INVESTORS
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Name
and Address
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Principal
Amount of Amended and Restated Notes
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AIGH
Investment Partners, LLC
0000
Xxxxxxxx Xxxxxx
Xxxxxxxxx,
XX 00000
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$4,000,000
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Xxxxxxx
X. Xxxxxxxxx
000
Xxxxxxx Xxxx
Xxxxxxxxx,
XX 00000
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$750,000
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Xxxxxx
X. Xxxxxx
0
Xxxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx,
XX 00000
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$250,000
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NEW
INVESTORS
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Name
and Address
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Principal
Amount of New Notes
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