AMENDMENT TO SENIOR SECURED NOTES Dated May 22, 2007
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 ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ (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.
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Company:
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NEONODE
INC.
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By:
__________________________________
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Name:
▇▇▇▇▇▇ ▇▇▇▇▇▇
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Title:
CEO & President
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Bridge
Investors:
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Date:
May 22, 2007
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[____________________________________]
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By:__________________________________
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Name:
AIGH Investment Partners LLC
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Title:
Manager, GP
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Date:
May 22, 2007
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[____________________________________]
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By:__________________________________
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Name:
Hirshcel ▇▇▇▇▇▇▇▇▇
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Title:
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Date:
May 22, 2007
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[____________________________________]
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By:__________________________________
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Name:
▇▇▇▇▇▇ ▇▇▇▇▇▇
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Title:
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Date:
May 25, 2007
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Iwojima
Sarl
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[____________________________________]
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By:__________________________________
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Name:
▇▇▇▇▇▇ Kuchly
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Title:
Manager
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