AMENDMENT NO. 4 TO SECURITY AGREEMENT
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 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:
Xxxxxx Xxxxxx
Title:
President & CEO
Address
for Notices:
Xxxxxxxxxxxxxxx
00
X000
00 Xxxxxxxxx, Xxxxxx
Attention:
President
Fax:
00000-0-000-00 51
|
|
SECURED
PARTY:
|
AIGH
INVESTMENT PARTNERS, LLC
By:_________________________________ Name:
Xxxx XxxxxxxxxTitle:
Manager
|
Schedule
I
[To
Be
Updated]
