FORM
      OF WARRANT 

     

    STOCK
      PURCHASE WARRANT 

     

    To
      Purchase __________ Shares of Common Stock of 

     

    NEAH
      POWER SYSTEMS, INC. 

     

    THIS
      STOCK PURCHASE WARRANT CERTIFIES that, for value received, __________ (the
      "Holder"),
      is
      entitled, upon the terms and subject to the limitations on exercise and the
      conditions hereinafter set forth, at any time on or
      after                        ,
      2007 (the "Initial
      Exercise Date")
      and on
      or prior to the close of business on the fifth anniversary of the Initial
      Exercise Date (the "Termination
      Date")
      but
      not thereafter, to subscribe for and purchase from Neah Power Systems, Inc.,
      a
      corporation incorporated in the State of Nevada (the "Company"),
      up
      to                        [an
      amount equal to 75% of the total number of shares of common stock purchased
      by
      Holder in the offering] shares (the "Warrant
      Shares")
      of
      Common Stock, par value $0.001 per share, of the Company (the "Common
      Stock").
      The
      purchase price of one share of Common Stock (the "Exercise
      Price")
      under
      this Warrant shall be $1.10 for up to one-third of the total number of Warrant
      Shares, $1.60 for up to one-third of the total number of Warrant Shares, and
      $2.o0 for up to one-third of the total number of Warrant Shares, subject to
      adjustment hereunder. The Exercise Price and the number of Warrant Shares for
      which the Warrant is exercisable shall be subject to adjustment as provided
      herein. 

     

            1.    Title
      to Warrant.    Prior
      to the Termination Date and subject to compliance with applicable laws and
      Section 7 of this Warrant, this Warrant and all rights hereunder are
      transferable, in whole or in part, at the office or agency of the Company by
      the
      Holder in person or by duly authorized attorney, upon surrender of this Warrant
      together with the Assignment Form annexed hereto properly endorsed.


     

            2.    Authorization
      of Shares.    The
      Company covenants that all Warrant Shares which may be issued upon the exercise
      of the purchase rights represented by this Warrant will, upon exercise of the
      purchase rights represented by this Warrant, be duly authorized, validly issued,
      fully paid and nonassessable and free from all taxes, liens and charges in
      respect of the issue thereof (other than taxes in respect of any transfer
      occurring contemporaneously with such issue). 

     

            3.    Exercise
      of Warrant.    

     

    (a) Except
      as
      provided elsewhere herein, exercise of the purchase rights represented by this
      Warrant may be made at any time or times on or after the Initial Exercise Date
      and until 5:00 p.m. (Pacific time) on the Termination Date by the surrender
      of this Warrant and the Notice of Exercise Form annexed hereto duly executed,
      at
      the office of the Company (or such other office or agency of the Company as
      it
      may designate by notice in writing to the registered Holder at the address
      of
      such Holder appearing on the books of the Company) and upon payment of the
      Exercise Price of the shares thereby purchased by wire transfer or cashier's
      check drawn on a United States bank, the Holder shall be entitled to receive
      the
      number of Warrant Shares so purchased. As soon as practicable after the exercise
      of this Warrant and in any event within three Trading Days (as defined herein)
      thereafter, upon the terms and subject to the conditions of this Warrant, the
      Company at its expense will cause to be issued in the name of and delivered
      to
      the Holder, or as the Holder may direct to a broker or other persons, a
      certificate or certificates for the number of Shares to which the Holder shall
      be entitled on such exercise, in such denominations as may be requested by
      the
      Holder. In lieu of delivering physical certificates for the Warrant Shares
      issuable upon any exercise of this Warrant, provided the Company's transfer
      agent is participating in the Depository Trust Company ("DTC")
      Fast
      Automated Securities Transfer ("FAST")
      program, upon request of the Holder, the Company shall use commercially
      reasonable efforts to cause its transfer agent electronically to transmit such
      Warrant Shares by crediting the account of the Holder's broker
      with DTC
      through its Deposit Withdrawal Agent Commission system (provided that the same
      time limitations herein as for stock certificates shall apply). 

     

    (b) If
      this
      Warrant shall have been exercised in part, the Company shall, at the time of
      delivery of the certificate or certificates representing Warrant Shares or
      electronic transmittal of such Warrant Shares, deliver to Holder a new Warrant
      evidencing the rights of Holder to purchase the unpurchased Warrant Shares
      called for by this Warrant, which new Warrant shall in all other respects be
      identical with this Warrant. 

     

    
      
         

      

      
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    4.    No
      Fractional Shares or Scrip.    No
      fractional shares or scrip representing fractional shares shall be issued upon
      the exercise of this Warrant. As to any fraction of a share which Holder would
      otherwise be entitled to purchase upon such exercise, the Company shall pay
      a
      cash adjustment in respect of such final fraction in an amount equal to such
      fraction multiplied by the Exercise Price. 

     

    5.    Charges,
      Taxes and Expenses.    Issuance
      of certificates for Warrant Shares shall be made without charge to the Holder
      for any issue or transfer tax or other incidental expense in respect of the
      issuance of such certificate, all of which taxes and expenses shall be paid
      by
      the Company, and such certificates shall be issued in the name of the Holder
      or
      in such name or names as may be directed by the Holder; provided,
      however,
      that in
      the event certificates for Warrant Shares are to be issued in a name other
      than
      the name of the Holder, this Warrant when surrendered for exercise shall be
      accompanied by the Assignment Form attached hereto duly executed by the Holder;
      and the Company may require, as a condition thereto, the payment of a sum
      sufficient to reimburse it for any transfer tax incidental thereto.


     

    6.    Closing
      of Books.    The
      Company will not close its stockholder books or records in any manner which
      prevents the timely exercise of this Warrant, pursuant to the terms hereof.
      

     

    7.    Transfer,
      Division and Combination.    

     

    (a) Subject
      to compliance with any applicable securities laws and the conditions set forth
      in this Section 7, this Warrant and all rights hereunder are transferable,
      in whole or in part, upon surrender of this Warrant at the principal office
      of
      the Company, together with a written assignment of this Warrant substantially
      in
      the form attached hereto duly executed by the Holder or its agent or attorney
      and funds sufficient to pay any transfer taxes payable upon the making of such
      transfer. Upon such surrender and, if required, such payment, the Company shall
      execute and deliver a new Warrant or Warrants in the name of the assignee or
      assignees and in the denomination or denominations specified in such instrument
      of assignment, and shall issue to the assignor a new Warrant evidencing the
      portion of this Warrant not so assigned, and this Warrant shall promptly be
      cancelled. A Warrant, if properly assigned, may be exercised by a new holder
      for
      the purchase of Warrant Shares without having a new Warrant issued.


     

    (b)
       This
      Warrant may be divided or combined with other Warrants upon presentation hereof
      at the aforesaid office of the Company, together with a written notice
      specifying the names and denominations in which new Warrants are to be issued,
      signed by the Holder or its agent or attorney. Subject to compliance with
      Section 7(a), as to any transfer which may be involved in such division or
      combination, the Company shall execute and deliver a new Warrant or Warrants
      in
      exchange for the Warrant or Warrants to be divided or combined in accordance
      with such notice. 

     

    (c)
       The
      Company shall prepare, issue and deliver at its own expense (other than transfer
      taxes) the new Warrant or Warrants under this Section 7. The Company agrees
      to maintain, at its aforesaid office, books for the registration and the
      registration of transfer of the Warrants.

     

    (d)
       This
      Warrant is transferable only in connection with (a) bona fide gifts, (b)
      dispositions to any trust for the direct or indirect benefit of the Holder
      or
      the immediate family of the Holder, (c) transfers
      by the Holder to any direct
      or
      indirect affiliate,
      as defined in Rule 405 under the Securities Act of 1933, of the Holder,
or
      as
      part of a distribution without consideration by the Holder to its equity holders
      on a pro rata basis.
      For
      purposes of this paragraph, “immediate family” shall mean the undersigned and
      the spouse, any lineal descendent, father, mother, brother or sister of the
      Holder. 

     

    (e)
       If,
      at
      the time of the surrender of this Warrant in connection with any transfer of
      this Warrant, the transfer of this Warrant shall not be registered pursuant
      to
      an effective registration statement under the Securities Act and under
      applicable state securities or blue sky laws, the Company may require, as a
      condition of allowing such transfer (i) that the Holder or transferee of
      this Warrant, as the case may be, furnish to the Company a written opinion
      of
      counsel (which opinion shall be in form, substance and scope customary for
      opinions of counsel in comparable transactions) to the effect that such transfer
      may be made without registration under the Securities Act and under applicable
      state securities or blue sky laws, (ii) that the holder or transferee
      execute and deliver to the Company an investment letter in form and substance
      acceptable to the Company and (iii) that the transferee be an "accredited
      investor" as defined in Rule 501(a) promulgated under the Securities Act or
      a "qualified institutional buyer" as defined in Rule 144A promulgated under
      the Securities Act. 

     

    
      
         

      

      
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    8.    No
      Rights as Shareholder until Exercise.    This
      Warrant does not entitle the Holder to any voting rights or other rights as
      a
      shareholder of the Company prior to the exercise hereof. Upon the surrender
      of
      this Warrant and the payment of the aggregate Exercise Price, the Warrant Shares
      so purchased shall be and be deemed to be issued to such Holder as the record
      owner of such shares as of the close of business on the later of the date of
      such surrender or payment. 

     

    9.    Loss,
      Theft, Destruction or Mutilation of Warrant.    The
      Company covenants that upon receipt by the Company of evidence reasonably
      satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
      or any stock certificate relating to the Warrant Shares, and in case of loss,
      theft or destruction, of indemnity or security reasonably satisfactory to it
      (which, in the case of the Warrant, shall not include the posting of any bond),
      and upon surrender and cancellation of such Warrant or stock certificate, if
      mutilated, the Company will make and deliver a new Warrant or stock certificate
      of like tenor and dated as of such cancellation, in lieu of such Warrant or
      stock certificate. 

     

    10.    Saturdays,
      Sundays, Holidays.    If
      the last or appointed day for the taking of any action or the expiration of
      any
      right required or granted herein shall be a Saturday, Sunday or a legal holiday,
      then such action may be taken or such right may be exercised on the next
      succeeding day not a Saturday, Sunday or legal holiday. 

     

    11.    Adjustments
      of Exercise Price and Number of Warrant Shares.    The
      number and kind of securities purchasable upon the exercise of this Warrant
      and
      the Exercise Price shall be subject to adjustment from time to time upon the
      happening of any of the following. In case the Company shall (i) pay a
      dividend in shares of Common Stock or make a distribution in shares of Common
      Stock to holders of its outstanding Common Stock, (ii) subdivide its
      outstanding shares of Common Stock into a greater number of shares,
      (iii) combine its outstanding shares of Common Stock into a smaller number
      of shares of Common Stock, or (iv) issue any shares of its capital stock in
      a reclassification of the Common Stock, then the number of Warrant Shares
      purchasable upon exercise of this Warrant immediately prior thereto shall be
      adjusted so that the Holder shall be entitled to receive the kind and number
      of
      Warrant Shares or other securities of the Company which it would have owned
      or
      have been entitled to receive had such Warrant been exercised in advance
      thereof. Upon each such adjustment of the kind and number of Warrant Shares
      or
      other securities of the Company which are purchasable hereunder, the Holder
      shall thereafter be entitled to purchase the number of Warrant Shares or other
      securities resulting from such adjustment at an Exercise Price per Warrant
      Share
      or other security obtained by multiplying the Exercise Price in effect
      immediately prior to such adjustment by the number of Warrant Shares purchasable
      pursuant hereto immediately prior to such adjustment and dividing by the number
      of Warrant Shares or other securities of the Company resulting from such
      adjustment. An adjustment made pursuant to this paragraph shall become effective
      immediately after the effective date of such event retroactive to the record
      date, if any, for such event. 

     

    12.    Reorganization,
      Reclassification, Merger, Consolidation or Disposition of
      Assets.    If,
      at any time while this Warrant is outstanding, (A) the Company effects any
      merger or consolidation of the Company with or into another entity, (B) the
      Company effects any sale of all or substantially all of its assets in one or
      a
      series of related transactions, (C) any tender offer or exchange offer
      (whether by the Company or another person or entity) is completed pursuant
      to
      which holders of Common Stock tender or exchange not less than 50% of the then
      outstanding shares of Common Stock for other securities, cash or property,
      or
      (D) the Company effects any reclassification of the Common Stock or any
      compulsory share exchange pursuant to which the Common Stock is effectively
      converted into or exchanged for other securities, cash or property (in any
      such
      case, a "Fundamental
      Transaction"),
      then,
      upon any subsequent exercise of this Warrant, the Holder shall have the right
      to
      receive, for each Warrant Share that would have been issuable upon such exercise
      immediately prior to the occurrence of such Fundamental Transaction, at the
      option of the Holder, (a) upon exercise of this Warrant, the number of
      shares of Common Stock of the successor or acquiring corporation or of the
      Company, if it is the surviving corporation, and any additional consideration
      (the "Alternate
      Consideration")
      receivable upon or as a result of such reorganization, reclassification, merger,
      consolidation or disposition of assets by a holder of the number of Shares
      for
      which this Warrant is exercisable immediately prior to such event or (b) if
      the Company is acquired in an all cash transaction, cash equal to the value
      of
      this Warrant as determined in accordance with the Black-Scholes-Merton Pricing
      Model (as hereafter defined). For purposes of any such exercise, the
      determination of the Exercise Price shall be appropriately adjusted to apply
      to
      such Alternate Consideration based on the amount of Alternate Consideration
      issuable in respect of one share of Common Stock in such Fundamental
      Transaction, and the Company shall apportion the Exercise Price among the
      Alternate Consideration in a reasonable manner reflecting the relative value
      of
      any different components of the Alternate Consideration. If holders of Common
      Stock are given any choice as to the securities, cash or property to be received
      in a Fundamental Transaction, then the Holder shall be given the same choice
      as
      to the Alternate Consideration it receives upon any exercise of this Warrant
      following such Fundamental Transaction. To the extent necessary to effectuate
      the foregoing provisions, any successor to the Company or surviving entity
      in
      such Fundamental Transaction shall issue to the Holder a new warrant consistent
      with the foregoing provisions and evidencing the holder's right to exercise
      such
      warrant into Alternate Consideration; provided that this Warrant shall have
      been
      cancelled or amended to the extent such cancellation or amendment is necessary
      so that such new warrant does not unjustly or disproportionately enrich the
      holder of the new warrant relative to a holder of the number of Warrant Shares
      for which this Warrant is exercisable immediately prior to such event. The
      terms
      of any agreement pursuant to which a Fundamental Transaction is effected shall
      include terms requiring any such successor or surviving entity to comply with
      the provisions of this Section 12 and insuring that this Warrant (or any
      such replacement security) will be similarly adjusted upon any subsequent
      transaction analogous to a Fundamental Transaction. For purposes hereof,
      "Black-Scholes-Merton
      Pricing Model"
      means
      the value determined using the Black-Scholes-Merton pricing model assuming
      that
      the Warrant had been assumed by the acquiring company and determining volatility
      on an implied basis using pricing information for trading of options in the
      stock of the acquiring company as of the date of determination or, if no such
      pricing information is available, determining volatility on an historical basis
      for the 12-month period prior to the date of determination. 

     

    
      
         

      

      
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    13.    Registration
      Statement; Black Out Period.    The
      Company shall use its commercially reasonable efforts to keep a registration
      statement ("Registration Statement") with respect to the issuance and sale
      of
      the Warrant Shares continuously effective, supplemented, amended and current
      until all Warrant Shares have been issued or all Warrants have expired,
      whichever occurs earlier; provided
      that
      such obligation shall expire before such date if the Company delivers to the
      Holder a written opinion of counsel to the Company that all Holders may resell
      the Warrant Shares without registration under the Act and without restrictions
      as to the manner, timing and volume of such sale. Notwithstanding the foregoing,
      the Company shall not be required to amend or supplement the Registration
      Statement, any related prospectus or any document incorporated therein by
      reference and may suspend the availability of the Registration Statement (a
      "Black Out Period") for a period of time not to exceed 30 days in each
      instance and an aggregate of 60 days in any calendar year, (i) upon
      the occurrence or existence of any pending corporate development or any other
      material event as a result of which the Registration Statement, any related
      prospectus or any document incorporated by reference therein as then amended
      or
      supplemented would, in the Company's good faith judgment, contain an untrue
      statement of a material fact or omit to state a material fact necessary in
      order
      to make the statements therein, in light of the circumstances under which they
      were made, not misleading, and (ii) (A) the Company determines in good
      faith and in its reasonable judgment that the disclosure of such event as such
      time would not be in the best interests of the Company or (B) the
      disclosure otherwise relates to a material business transaction which has not
      yet been publicly disclosed. The Holder understands that, upon receipt of a
      written notice (without notice of the nature or details of the events) from
      the
      Company of the commencement of a Black Out Period (as defined below) (each,
      a
      "Black Out Notice"), the Holder will promptly discontinue disposition of the
      Warrant Shares pursuant to the Registration Statement until the earlier of
      (i) the end of the Black Out Period and (ii) the date on which the
      Holder is advised by the Company of the termination of the Black Out Period
      and
      the Holder receives copies of a supplemented or amended prospectus (or until
      the
      Holder is advised by the Company that the use of the Registration Statement
      may
      be resumed). If a Black Out Period is in effect on the Termination Date, then
      the Termination Date shall be extended for the number of calendar days covered
      by such Black Out Period. 

     

    14.    Voluntary
      Adjustment by the Company.    The
      Company may at any time during the term of this Warrant reduce the then current
      Exercise Price to any amount and for any period of time deemed appropriate
      by
      the Board of Directors of the Company. 

     

    15.    Notice
      of Adjustment.    Whenever
      the number of Warrant Shares or number or kind of securities or other property
      purchasable upon the exercise of this Warrant or the Exercise Price is adjusted,
      as herein provided, the Company shall give notice thereof to the Holder, which
      notice shall state the number of Warrant Shares (and other securities or
      property) purchasable upon the exercise of this Warrant and the Exercise Price
      of such Warrant Shares (and other securities or property) after such adjustment,
      setting forth a brief statement of the facts requiring such adjustment and
      setting forth the computation by which such adjustment was made. 

     

    
      
         

      

      
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    16.    Notice
      of Corporate Action.    If
      at any time: 

     

    (a)
       the
      Company shall take a record of the holders of its Common Stock for the purpose
      of entitling them to receive a dividend or other distribution, or any right
      to
      subscribe for or purchase any evidences of its indebtedness, any shares of
      stock
      of any class or any other securities or property, or to receive any other right,
      or 

     

    (b)
       there
      shall be any capital reorganization of the Company, any reclassification or
      recapitalization of the capital stock of the Company or any consolidation or
      merger of the Company with (other than a consolidation or merger in which the
      Company is the surviving corporation), or any sale, transfer or other
      disposition of all or substantially all the property, assets or business of
      the
      Company to, another corporation, or 

     

    (c)
       there
      shall be a voluntary or involuntary dissolution, liquidation or winding up
      of
      the Company; 

     

    then,
      in
      any one or more of such cases, the Company shall give to Holder (i) at
      least 20 days' prior written notice of the date on which a record date
      shall be selected for such dividend, distribution or right or for determining
      rights to vote in respect of any such reorganization, reclassification, merger,
      consolidation, sale, transfer, disposition, liquidation or winding up, and
      (ii) in the case of any such reorganization, reclassification, merger,
      consolidation, sale, transfer, disposition, dissolution, liquidation or winding
      up, at least 20 days' prior written notice of the date when the same shall
      take place. Such notice in accordance with the foregoing clause also shall
      specify (y) the date on which any such record is to be taken for the
      purpose of such dividend, distribution or right, the date on which the holders
      of Common Stock shall be entitled to any such dividend, distribution or right,
      and the amount and character thereof, and (z) the date on which any such
      reorganization, reclassification, merger, consolidation, sale, transfer,
      disposition, dissolution, liquidation or winding up is to take place and the
      time, if any such time is to be fixed, as of which the holders of Common Stock
      shall be entitled to exchange their Warrant Shares for securities or other
      property deliverable upon such disposition, dissolution, liquidation or winding
      up. Each such written notice shall be sufficiently given if addressed to Holder
      at the last address of Holder appearing on the books of the Company and
      delivered in accordance with Section 18(c). 

     

    17.    Authorized
      Shares.    The
      Company covenants that during the period the Warrant is outstanding, it will
      reserve from its authorized and unissued Common Stock a sufficient number of
      shares to provide for the issuance of the Warrant Shares upon the exercise
      of
      any purchase rights under this Warrant. The Company further covenants that
      its
      issuance of this Warrant shall constitute full authority to its officers who
      are
      charged with the duty of executing stock certificates to execute and issue
      the
      necessary certificates for the Warrant Shares upon the exercise of the purchase
      rights under this Warrant. The Company will take all such reasonable action
      as
      may be necessary to assure that such Warrant Shares may be issued as provided
      herein without violation of any applicable law or regulation, or of any
      requirements of the principal market upon which the Common Stock may then be
      traded. 

     

    Except
      and to the extent as waived or consented to by the Holder, the Company shall
      not
      by any action, including, without limitation, amending its articles of
      incorporation or through any reorganization, transfer of assets, consolidation,
      merger, dissolution, issue or sale of securities or any other voluntary action,
      avoid or seek to avoid the observance or performance of any of the terms of
      this
      Warrant, but will at all times in good faith assist in the carrying out of
      all
      such terms and in the taking of all such actions as may be necessary or
      appropriate to protect the rights of Holder as set forth in this Warrant against
      impairment. Without limiting the generality of the foregoing, the Company will
      (a) not increase the par value of any Warrant Shares above the amount
      payable therefor upon such exercise immediately prior to such increase in par
      value, (b) take all such action as may be necessary or appropriate in order
      that the Company may validly and legally issue fully paid and nonassessable
      Warrant Shares upon the exercise of this Warrant, and (c) use commercially
      reasonable efforts to obtain all such authorizations, exemptions or consents
      from any public regulatory body having jurisdiction thereof as may be necessary
      to enable the Company to perform its obligations under this Warrant.


     

    18.    Miscellaneous.    

     

    (a) Jurisdiction.
      This
      Warrant shall constitute a contract under the laws of the State of Nevada,
      without regard to its conflict of law principles or rules. 

     

    
      
         

      

      
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    (b) Nonwaiver.
      No
      course of dealing or any delay or failure to exercise any right hereunder on
      the
      part of Holder shall operate as a waiver of such right or otherwise prejudice
      Holder's rights, powers or remedies, notwithstanding all rights hereunder
      terminate on the Termination Date. 

     

    (c) Notices.
      Any
      notice, request or other document required or permitted to be given or delivered
      to the Holder by the Company shall be delivered by first class mail to Holder
      at
      the last address of Holder appearing on the books of the Company; provided
      upon
      any permitted assignment of this Warrant, the assignee shall promptly provide
      the Company with its contact information. 

     

    (d) Limitation
      of Liability.
      No
      provision hereof, in the absence of any affirmative action by Holder to exercise
      this Warrant or purchase Warrant Shares, and no enumeration herein of the rights
      or privileges of Holder, shall give rise to any liability of Holder for the
      purchase price of any Common Stock or as a stockholder of the Company, whether
      such liability is asserted by the Company or by creditors of the Company.


     

    (e) Successors
      and Assigns.
      Subject
      to applicable securities laws, this Warrant and the rights and obligations
      evidenced hereby shall inure to the benefit of and be binding upon the
      successors of the Company and the successors and permitted assigns of Holder.
      The provisions of this Warrant are intended to be for the benefit of all Holders
      from time to time of this Warrant and shall be enforceable by any such Holder
      or
      holder of Warrant Shares. 

     

    (f) Amendment.
      This
      Warrant may be modified or amended or the provisions hereof waived with the
      written consent of the Company and the holders of Warrants representing
      two-thirds of the Warrant Shares issuable under Warrants then outstanding as
      of
      the date such consent is sought; provided,
      however,
      that no
      amendment may increase the Exercise Price,
      decrease the number of shares or class of shares obtainable upon exercise of
      this Warrant or decrease the time period in which this Warrant can be exercised
      without the written consent of each Holder. 

     

    (g) Severability.
      Wherever possible, each provision of this Warrant shall be interpreted in such
      manner as to be effective and valid under applicable law, but if any provision
      of this Warrant shall be prohibited by or invalid under applicable law, such
      provision shall be ineffective to the extent of such prohibition or invalidity,
      without invalidating the remainder of such provisions or the remaining
      provisions of this Warrant. 

     

    (h)
       Headings.
      The
      headings used in this Warrant are for the convenience of reference only and
      shall not, for any purpose, be deemed a part of this Warrant. 

     

    (i)
       Remedies.
      Holder,
      in addition to being entitled to exercise all rights granted by law, including
      recovery of damages, will be entitled to specific performance of its rights
      under this Warrant. The Company agrees that monetary damages would not be
      adequate compensation for any loss incurred by reason of a breach by it of
      the
      provisions of this Warrant and hereby agrees to waive the defense in any action
      for specific performance that a remedy at law would be adequate. 

     

    IN
      WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
      officer thereunto duly authorized. 

     

    
      	
               

              Dated:                        ,
                2007

            	
               

               

            	
               

              NEAH
                POWER SYSTEMS, INC.

            
	
               

               

               

            	
               

               

               

            	
               

               

              By:

            	
               

               

               

            
	
               

               

            	
               

               

            	
               

               

            	
              Name:
                

              Title:
                

            


    

     

    
      
         

      

      
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    NOTICE
      OF EXERCISE 

     

    To:
       Neah
      Power Systems, Inc. 

     

    


     

    (1) The
      undersigned hereby elects to
      purchase            Warrant
      Shares of Neah Power Systems, Inc. pursuant to the terms of the attached Warrant
      (only if exercised in full), and tenders herewith payment of the exercise price
      in full, together with all applicable transfer taxes, if any. 

     

    (2)
       Payment
      shall take the form of (check applicable box): 

     

    o
       wire
      transfer

     

    o
       cashier's
      check

     

    (3)
       Please
      issue a certificate or certificates representing said Warrant Shares in the
      name
      of the undersigned or in such other name as is specified below: 

     

    The
      Warrant Shares shall be delivered to the following: 

     

    
      	
               

            	
               

            	
               

            	
               

            
	
               

               

            	
               

               

            	
               

               

            	
               

               

            
	
               

               

            	
               

               

            	
               

               

            	
               

               

            
	
               

               

            	
               

               

            	
               

               

               

            
	 	 	
              [NAME
                OF PURCHASER]

            
	
               

               

            	
               

               

            	
               

              By:

            	
               

               

            
	
               

            	
               

            	
               

            	
              Name:

              Title:

            
	 	 	 	 
	
               

            	
               

            	
              Dated:

            	
               

            


    

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    ASSIGNMENT
      FORM 

     

    (To
      assign the foregoing warrant, execute

     

    this
      form
      and supply required information.

     

    Do
      not
      use this form to exercise the warrant.) 

     

            FOR
      VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are
      hereby assigned to

     

    
      
        

      

    

     

    whose
      address is 

     

    
      
        

      

    

     

     

    
      
        

      

    

     

    


    
      
        

      

    

     

     

    
      	
               

            	
               

            	
              Dated:

            	
               

            	
               

            	
              ,

            	
               

            


    

    


     

    
      	
              Holder's
                Signature:

            	
               

            	
               

            
	
               

              Holder's
                Address:

            	
               

               

            	
               

               

            
	
               

               

            	
               

               

            	
               

            


    

    


     

    
      	
              Signature
                

              Guaranteed:

            	
               

            	
               

            
	
               

            	
               

            	
               

            


    

    NOTE:
      The
      signature to this Assignment Form must correspond with the name as it appears
      on
      the face of the Warrant, without alteration or enlargement or any change
      whatsoever, and must be guaranteed by a bank or trust company. Officers of
      corporations and those acting in a fiduciary or other representative capacity
      should file proper evidence of authority to assign the foregoing
      Warrant.

     

    


    
      
         

      

      
        8