THIS NOTE MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR
OTHERWISE ALIENATED OR ENCUMBERED WITHOUT THE PRIOR WRITTEN CONSENT OF THE
BORROWER.

$150,000.00

State of Utah

June 16, 2015

BUYER TRUST DEED NOTE #1

FOR VALUE RECEIVED, INTER-MOUNTAIN CAPITAL CORP., a Delaware corporation (the
“Borrower”), hereby promises to pay to NEAH POWER SYSTEMS, INC., a Nevada
corporation (the “Lender,” and together with the Borrower, the “Parties”), the
principal sum of $150,000.00 together with all accrued and unpaid interest
thereon, fees incurred or other amounts owing hereunder, all as set forth below
in this Buyer Trust Deed Note #1 (this “Note”). This Note is issued pursuant to
that certain Securities Purchase Agreement of even date herewith, entered into
by and between the Borrower and the Lender (as the same may be amended from time
to time, the “Purchase Agreement”), pursuant to which the Lender issued to the
Borrower that certain Secured Convertible Promissory Note in the principal
amount of $832,500.00 (as the same may be amended from time to time, the “Lender
Note”), convertible into shares of the Company’s Common Stock. All capitalized
terms used but not otherwise defined herein shall have the meanings ascribed
thereto in the Purchase Agreement.  

1. Principal and Interest. Interest shall accrue on the unpaid principal balance
and any unpaid late fees or other fees under this Note at a rate of five percent
(5.0%) per annum until the full amount of the principal and fees has been paid.
Interest shall be computed on the basis of a 365-day year for the actual number
of days elapsed. Notwithstanding any provision to the contrary herein, in no
event shall the applicable interest rate at any time exceed the maximum interest
rate allowed under applicable law, as provided in Section 12 below. The entire
unpaid principal balance and all accrued and unpaid interest, if any, under this
Note, shall be due and payable on the Maturity Date (as defined in the Lender
Note) under the Lender Note.

2. Payment. Unless prepaid, all principal and accrued interest under this Note
is payable in one lump sum on the Maturity Date. All payments of interest and
principal shall be (i) in lawful money of the United States of America, and (ii)
in the form of immediately available funds. All payments shall be applied first
to costs of collection, if any, then to accrued and unpaid interest, and
thereafter to principal. Payment of principal and interest hereunder shall be
delivered to the Lender at the address furnished to the Borrower for that
purpose.

3. Prepayment by the Borrower. The Borrower may, with Lender’s consent, pay,
without penalty, all or any portion of the outstanding balance along with any
accrued but unpaid interest on this Note at any time prior to the Maturity Date.

4. Security. The payment of this Note (and all the other Buyer Trust Deed Notes
(as defined in the Purchase Agreement)) shall be secured by that certain Trust
Deed of even date herewith (as the same may be amended from time to time, the
“Trust Deed”) executed by the Borrower, as Trustor, in favor of the Lender, as
Beneficiary, encumbering certain real property of the Borrower located in
Wasatch County, Utah, as more specifically set forth in the Trust Deed. All the
terms and conditions of the Trust Deed are hereby incorporated into and made a
part of this Note. The Lender covenants and agrees to release the Trust Deed
pursuant to the terms of Section 5.

5. Release of Trust Deed. The Lender covenants and agrees that simultaneous with
the receipt of this Note, duly executed by the Borrower, Lender shall execute
and deliver to Borrower a

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Request for Deed of Reconveyance substantially in the form attached hereto as
Exhibit A (the “Request”), which will operate to release the Trust Deed upon
satisfaction of the conditions for release of the Trust Deed set forth in the
Escrow Agreement. As reflected in the Escrow Agreement, an escrow agent (the
“Escrow Agent”), mutually satisfactory to the Borrower and the Lender, shall
hold the Request in escrow, subject to the condition that the Escrow Agent may
not release the Request until all of the conditions for release of the Trust
Deed set forth in the Escrow Agreement have been satisfied. In accordance with
the terms of the Escrow Agreement, the Request shall be released to the Borrower
and Escrow Agent shall record the reconveyance deed attached to the Escrow
Agreement (thereby releasing the Trust Deed) on the earlier of (i) the first
date on which all of the Buyer Trust Deed Notes are repaid in full, and (ii) six
(6) months and three (3) days following the date the Trust Deed is recorded or
such later date as determined in the sole discretion of the Borrower (the
“Release Date”). For avoidance of doubt, after the Release Date, there shall be
no collateral securing this Note.

6. Right of Offset. Notwithstanding anything to the contrary herein or in any of
the other Transaction Documents, in the event (i) of the occurrence of any Event
of Default (as defined in the Lender Note) under the Lender Note or any other
note issued by the Lender in connection with the Purchase Agreement, (ii) the
Borrower exercises any Event of Default Redemption Right or Fundamental
Transaction Redemption Right (as such terms are defined in the Lender Note)
under the Lender Note, (iii) the Lender Note is accelerated for any reason, or
(iv) of a breach of any material term, condition, representation, warranty,
covenant or obligation of the Lender under any Transaction Document, the
Borrower shall be entitled to deduct and offset any amount owing by the Lender
under the Lender Note from any amount owed by the Borrower under this Note. In
the event that the Borrower’s exercise of the Borrower’s offset rights under
this Section 6 results in the full satisfaction of the Borrower’s obligations
under this Note, then the Lender shall return this Note to the Borrower for
cancellation or, in the event this Note has been lost, stolen or destroyed, the
Lender shall provide the Borrower with a lost note affidavit in a form
reasonably acceptable to the Borrower.

7. Default. If any of the events specified below shall occur (each, an “Event of
Default”) the Lender may declare the unpaid principal balance under this Note,
together with all accrued and unpaid interest thereon, fees incurred or other
amounts owing hereunder immediately due and payable, by notice in writing to the
Borrower. If any default, other than a Payment Default (as defined below), is
curable, then the default may be cured (and no Event of Default will have
occurred) if the Borrower, after receiving written notice from the Lender
demanding cure of such default, either (a) cures the default within fifteen (15)
days of the receipt of such notice, or (b) if the cure requires more than
fifteen (15) days, immediately initiates steps that the Lender deems in the
Lender’s reasonable discretion to be sufficient to cure the default and
thereafter diligently continues and completes all reasonable and necessary steps
sufficient to produce compliance as soon as reasonably practical. Each of the
following events shall constitute an Event of Default:

7.1. Failure to Pay. The Borrower’s failure to make any payment when due and
payable under this Note (a “Payment Default”);

7.2. Breaches of Covenants. The Borrower’s failure to observe or perform any
other covenant, obligation, condition or agreement contained in this Note;

7.3. Representations and Warranties. If any representation, warranty,
certificate, or other statement (financial or otherwise) made or furnished by or
on behalf of the Borrower to the Lender in writing in connection with this Note
or any of the other Transaction Documents, or as an inducement to the Lender to
enter into the Purchase Agreement, shall be false, incorrect, incomplete or
misleading in any material respect when made or furnished; and

 

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7.4. Involuntary Bankruptcy. If any involuntary petition is filed under any
bankruptcy or similar law or rule against the Borrower, and such petition is not
dismissed within sixty (60) days, or a receiver, trustee, liquidator, assignee,
custodian, sequestrator or other similar official is appointed to take
possession of any of the assets or properties of the Borrower or any guarantor.

8. Binding Effect; Assignment. This Note shall be binding on the Parties and
their respective heirs, successors, and assigns; provided, however, that neither
party shall assign any of its rights hereunder without the prior written consent
of the other party, except that the Borrower may assign this Note to any of the
Borrower’s Affiliates without the prior written consent of the Lender and,
furthermore, the Lender agrees that it shall not unreasonably withhold,
condition or delay its consent to any other assignment of this Note by the
Borrower.

9. Governing Law. This Note shall be governed by and interpreted in accordance
with the laws of the State of Utah for contracts to be wholly performed in such
state and without giving effect to the principles thereof regarding the conflict
of laws.

10. Purchase Agreement; Arbitration of Disputes. By acceptance of this Note,
each party agrees to be bound by the applicable terms, conditions and general
provisions of the Purchase Agreement and the other Transaction Documents,
including without limitation the Arbitration Provisions attached as an Exhibit
to the Purchase Agreement.

11. Customer Identification–USA Patriot Act Notice. The Lender hereby notifies
the Borrower that pursuant to the requirements of the USA Patriot Act (Title III
of Pub. L. 107-56, signed into law October 26, 2001) (the “Act”), and the
Lender’s policies and practices, the Lender is required to obtain, verify and
record certain information and documentation that identifies the Borrower, which
information includes the name and address of the Borrower and such other
information that will allow the Lender to identify the Borrower in accordance
with the Act.

12. Lawful Interest. It being the intention of the Lender and the Borrower to
comply with all applicable laws with regard to the interest charged hereunder,
it is agreed that, notwithstanding any provision to the contrary in this Note or
any of the other Transaction Documents, no such provision, including without
limitation any provision of this Note providing for the payment of interest or
other charges, shall require the payment or permit the collection of any amount
in excess of the maximum amount of interest permitted by law to be charged for
the use or detention, or the forbearance in the collection, of all or any
portion of the indebtedness evidenced by this Note or by any extension or
renewal hereof (“Excess Interest”). If any Excess Interest is provided for, or
is adjudicated to be provided for, in this Note or any of the other Transaction
Documents, then in such event:

12.1. the provisions of this Section 12 shall govern and control;

12.2. the Borrower shall not be obligated to pay any Excess Interest;

12.3. any Excess Interest that the Lender may have received hereunder shall, at
the option of the Lender, be (i) applied as a credit against the principal
balance due under this Note or the accrued and unpaid interest thereon not to
exceed the maximum amount permitted by law, or both, (ii) refunded to the
Borrower, or (iii) any combination of the foregoing;

12.4. the applicable interest rate or rates shall be automatically subject to
reduction to the maximum lawful rate allowed to be contracted for in writing
under the applicable governing usury laws, and this Note and the Transaction
Documents shall be deemed to have been, and shall be, reformed and modified to
reflect such reduction in such interest rate or rates; and

 

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12.5. the Borrower shall not have any action or remedy against the Lender for
any damages whatsoever or any defense to enforcement of this Note or arising out
of the payment or collection of any Excess Interest.

13. Pronouns. Regardless of their form, all words used in this Note shall be
deemed singular or plural and shall have the gender as required by the text.

14. Headings. The various headings used in this Note as headings for sections or
otherwise are for convenience and reference only and shall not be used in
interpreting the text of the section in which they appear and shall not limit or
otherwise affect the meanings thereof.

15. Time of Essence. Time is of the essence with this Note.

16. Severability. If any part of this Note is construed to be in violation of
any law, such part shall be modified to achieve the objective of the Parties to
the fullest extent permitted by law and the balance of this Note shall remain in
full force and effect.

17. Attorneys’ Fees. If any action at law or in equity is necessary to enforce
this Note or to collect payment under this Note, the Lender shall be entitled to
recover reasonable attorneys’ fees directly related to such enforcement or
collection actions.

18. Amendments and Waivers; Remedies. No failure or delay on the part of either
party hereto in exercising any right, power or remedy hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to either
party hereto at law, in equity or otherwise. Any amendment, supplement or
modification of or to any provision of this Note, any waiver of any provision of
this Note, and any consent to any departure by either party from the terms of
any provision of this Note, shall be effective (i) only if it is made or given
in writing and signed by the Borrower and the Lender and (ii) only in the
specific instance and for the specific purpose for which made or given.

19. Notices. Unless otherwise provided for herein, all notices, requests,
demands, claims and other communications hereunder shall be given in accordance
with the subsection of the Purchase Agreement titled “Notices.” Either party may
change the address to which notices, requests, demands, claims and other
communications hereunder are to be delivered by providing notice thereof in the
manner set forth in the Purchase Agreement.

20. Final Note. This Note, together with the other Transaction Documents,
contains the complete understanding and agreement of the Borrower and the Lender
and supersedes all prior representations, warranties, agreements, arrangements,
understandings, and negotiations of the Borrower and Lender with respect to the
subject matter of the Transaction Documents. THIS NOTE, TOGETHER WITH THE OTHER
TRANSACTION DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY ALLEGED PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.

[Remainder of page intentionally left blank]

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IN WITNESS WHEREOF, the Parties have executed this Note as of the date set forth
above.

BORROWER:

INTER-MOUNTAIN CAPITAL CORP.

By: _________________________

       John M. Fife, President

ACKNOWLEDGED, ACCEPTED AND AGREED:

NEAH POWER SYSTEMS, INC.

By:                                                      

      Name:                                           

      Title:                                              

[Signature Page to Buyer Trust Deed Note #1]

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EXHIBIT A

REQUEST