Document:

AMENDMENT
      TO LOAN DOCUMENTS

    

    Dated
      as
      of February 15, 2008

    

    

    This
      AMENDMENT AND WAIVER TO THE LOAN DOCUMENTS (this “Amendment”)
      amends
      (i) the Promissory Note dated as of November 13, 2007 (the “Note”),
      by
      and between Neah Power Systems, Inc., a Nevada corporation (the “Company”),
      and
      EPD Investment Co., LLC, a California limited liability company (the
“Holder”),
      (ii)
      the Security Interest Agreement dated as of November 12, 2007 by and between
      the
      Company and the Holder (the “Security
      Agreement”),
      (iii)
      the Pledge Agreement dated as of November 12, 2007 by and between the Company
      and the Holder (the “Pledge
      Agreement”),
      (iv)
      the Escrow Agreement dated as of November 13, 2007 by and among the Company,
      the
      Holder and Dreier Stein Kahan Browne Woods George LLP , f/k/a Dreier Stein
&
Kahan LLP (the “Escrow
      Agreement”),
      (v)
      the Purchase Agreement dated as of November 9, 2007 by and between the Company
      and the Holder (the “Purchase
      Agreement”
and
      together with the Note, the Security Agreement, the Pledge Agreement and the
      Escrow Agreement, the “Loan
      Documents”).
      Capitalized terms not otherwise defined in this Amendment have the meanings
      ascribed to such terms in the respective Loan Document. 

    

    WHEREAS,
      the Company and the Holder desire to amend the Loan Documents and waive certain
      defaults thereunder;

    

    NOW,
      THEREFORE, for good and valuable consideration, the receipt and sufficiency
      of
      which are hereby acknowledged, the Loan Documents are hereby amended and
      modified as follows:

    

    1. Amendment
      to Section 2(iii) of the Note.
      Section
      2(iii) of the Note is hereby deleted in its entirety.

    

    2. Amendment
      to Section 7(b) of the Note.
      Section
      7(c) of the Note is hereby deleted in its entirety and replaced with the
      following:

    

    “(c) Conversion
      Price.
      Notwithstanding the foregoing, the initial conversion price in effect on any
      Conversion Date shall be adjusted to: (i) $0.08 per share of Common Stock for
      the number of shares sold into the market prior to the date hereof, which total
      782,195 shares, (ii) $0.08 per share for one million additional shares, and
      (iii) a price per share agreed between the parties for an additional number
      of
      shares agreed between the parties. Purchaser hereby agrees that it will not
      sell
      any further Equity Shares (as defined in the Purchase Agreement) in the open
      market until after the shares provided for in the preceding sentence have been
      sold or the full balance due under this Note has been converted.”

    

    3. Reduction
      of Note Balance.
      Holder
      hereby converts $62,575.60 of the current amount due under the Note into 782,195
      shares of Common Stock at $0.08 per share.

    

    4. Amendment
      to Section 3 of the Escrow Agreement.
      Section
      3 of the Escrow Agreement is hereby deleted in its entirety.

    

    5. Amendment
      to Section 1(b) of the Pledge Agreement.
      Both
      Sections 1(b) of the Pledge Agreement are hereby deleted in their entirety
      and
      replaced with the following:

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “(b) The
      Pledgor represents and warrants to the Secured Party that the Pledged Shares
      are
      duly authorized, validly issued, fully paid and non assessable and that it
      will
      not permit the transfer of the Pledged Shares except in accordance with this
      Pledge Agreement while the same is in effect. The 12,500,000 Pledged Shares,
      together with any substitutes therefor, or proceeds thereof, are hereinafter
      referred to collectively as the “Collateral”.”
      

    

    6. Amendment
      to Section 1(a)(iv) of the Purchase Agreement.
      The
      following sentence is inserted at the end of Section 1(a)(iv) of the Purchase
      Agreement:

    

    “Provided,
      however,
      that
      the $100,000 amount will be reduced pro rata in proportion to the amount by
      which the balance then due under the Note is below the initial principal balance
      of the Note.” 

    

    7. Amendment
      to Section 1(a) of the Purchase Agreement.
      The
      following section is hereby inserted at the end of Section 1(a) as new Section
      1(a)(vii) of the Purchase Agreement:

    

    “(vii) Notwithstanding
      anything to the contrary herein, the Company agrees not to issue to the
      Purchaser Equity Shares which would result in beneficial ownership by the
      Purchaser and its affiliates of more than 4.99% of the outstanding shares of
      capital stock of the Company; provided, however, this restriction on the Company
      set forth herein may be waived by the Purchaser. For purposes of the immediately
      preceding sentence, beneficial ownership shall be determined in accordance
      with
      Section 13(d) of the Securities Exchange Act of 1934, as amended, and
      Regulations 13D-G thereunder.” 

    

    8. Amendment
      to Section 11 of the Security Agreement.
      Section
      11 of the Security Agreement is deleted in its entirety and replaced with the
      following: 

    

    “Upon
      payment or other satisfaction in full of the Note held by the Secured Party,
      the
      Security Interests shall terminate and all rights to the Collateral shall revert
      to the Debtor. Upon any such termination of the Security Interests or release
      of
      Collateral, the Secured Party will, at the Debtor’s expense, to the extent
      permitted by law, execute and deliver to the Debtor such documents as the Debtor
      shall reasonably request to evidence the termination of the Security Interests
      or the release of such Collateral, as the case may be.”

    

    9. Waiver
      of Default.
      The
      Holder hereby waives any prior or existing default of the Company under the
      Note, the Pledge Agreement or the Escrow Agreement, including without limitation
      any default due to any breach by the Company of Section 2(iii) of the Note,
      Section 1(b) of the Pledge Agreement or Section 3 of the Escrow
      Agreement.

    

    10. Share
      Issuance.
      Company
      shall promptly issue and deliver to the Holder such additional number of duly
      authorized, validly issued and fully paid shares of its Common Stock as may
      due
      or issuable pursuant to the foregoing amendments.

    

    11. Ratification
      of Loan Documents.
      Except
      as specifically amended by this Amendment, all provisions of the Loan Documents
      are hereby ratified and shall remain in full force and effect.

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    12. Counterparts;
      Facsimile Signatures.
      This
      Amendment may be executed in two or more counterparts and by facsimile, each
      of
      which will be deemed an original, but all of which together will constitute
      one
      and the same instrument.

    

    IN
      WITNESS WHEREOF, the parties have caused this Amendment to be duly executed
      as
      of the date first above written.

    

    

    COMPANY:

    

    NEAH
      POWER SYSTEMS, INC.

    A
      Nevada
      corporation

    
 

    
      	
              By:

            	 	 
	 	
              
                

              

            	 
	 	 	 
	 	 	 
	
              By:

            	 	 
	 	
              
                

              

            	 
	 	 	 

    

    

    
      	 	 	 
	 	
              HOLDER:

              

              EPD
                INVESTMENT CO., LLC

            
	 
 	 
 	 
 
	 	By:  	 
	 	
              

            
	 	
            

    

     

    CONSENTED
      TO AND AGREED:

    

    NEAH
      POWER SYSTEMS, INC.

    A
      Washington Corporation

    
 

    
      
        	
                By:

              	 	 
	 	
                
                  

                

              	 
	 	 	 
	 	 	 
	
                By:

              	 	 
	 	
                
                  

                

              	 
	 	 	 

      

      

      
        
          
          

        

        
          3exv4wxay

 

Exhibit 4 (a)

 

Employment contract between the Company and Mr G.J. Kleisterlee

The following contract is the employment contract of Mr G.J. Kleisterlee, containing the
terms and conditions of his employment as President/CEO and member of the Board of
Management with effect from April 1, 2007. The employment contract filed with the 2005 Form
20-F (and incorporated by reference in the 2006 Form 20-F) contains the arrangements which
apply up to April 1, 2007.

1. Continuation of employment

You are re-appointed as President/Chief Executive Officer and Chairman of the Board of
Management, and your employment with Royal Philips Electronics will be continued after April
1, 2007 subject to re-appointment by the General Meeting of Shareholders of the Company.

The Supervisory Board undertakes to submit to the General Meeting of Shareholders to be held on
March 29, 2007 a proposal for your re-appointment as President/Chief Executive Officer and
Chairman of the Board of Management of Royal Philips Electronics as of April 1, 2007.

The Contract of Employment between you and Royal Philips Electronics, dated December 9, 2004
will cease to exist as of April 1, 2007. In the event of such re-appointment, the terms and
conditions stated in this letter agreement and its annexes replace all terms and conditions
laid down in previous employment agreements and all oral and written understandings reached
with you and any company belonging to the Philips Group.

2. Duration of employment

	A.	 	The contract of employment (hereinafter referred to as the “Contract”) with the Company
connected with your Chairmanship of the Board of Management shall be entered into for a
period of four years commencing on April 1, 2007 and shall terminate ipso jure, without any
notice being required, on April 1, 2011.
	 
	B.	 	No later than six months before April 1, 2011 the parties will discuss a possible
extension of the Contract.
	 
	C.	 	Both parties shall have the right to terminate this agreement before April 1, 2011 or
before any later contract expiration date against the end of a calendar month. In this
respect, you will adhere to a written notice period of three months and the Company will
give no less than six months prior written notice.
	 
	D.	 	If the Contract is terminated at the request of the Company before April 1, 2011 other
than for a compelling reason (“dringende reden”), within the meaning of Dutch labour law,
the Supervisory Board may — at its full discretion — decide to pay you a once-only
amount by way of compensation with a maximum of twelve (12) months. You shall not be
entitled
	 
	 	 	 

 

 

			
	
Employment contract between the Company and Mr G.J. Kleisterlee
	 	2
	 

to such payment if the Contract is terminated immediately following a period in which
the Company made industrial disability payments to you under paragraph 11.

	E.	 	In case of termination of the Contract you will resign ultimately per the effective
date of such termination as President/Chief Executive Officer and Chairman of the Board
of Management.

3. Salary

Your annual salary as of April 1, 2007 shall amount to EUR 1,100,000 (gross), which
amount includes mandatory holiday allowances, to be paid in twelve monthly instalments.

Annual review and subsequent upwards adjustment, if any, of your annual salary, will be
determined at the discretion of the Supervisory Board of the Company on the advice of the
Remuneration Committee of the Supervisory Board (hereinafter also referred to as “the
Remuneration Committee”). You shall be informed in writing, on behalf of the Supervisory
Board, of any salary increases awarded to you in this way. Only salary increases determined
and approved by the Supervisory Board will replace the salary amount mentioned above.

4. Annual Incentive

In addition to the salary referred to under paragraph 3, you shall be eligible each year
for an annual incentive. This incentive shall be determined annually by the Supervisory
Board on the advice of the Remuneration Committee.

The annual incentive to be awarded relates to the preceding financial year and is
based on criteria to be determined annually. You shall be notified in writing of these
annual incentive targets.

The on-target (= 100% score) annual incentive amount to be realized by you is currently set
by the Supervisory Board at 80% of your annual salary as mentioned under paragraph 3. It can
become 120% of your annual salary if the stretch targets are realized (= 150% score). The
actual pay out of the annual incentive is determined by multiplying the annual incentive
score by the Group Incentive Multiplier (varies from 0.8 to 1.2), which is based on the
financial annual incentive target Economic Profit Realized of the Philips Group. So the
overall maximum annual incentive amount to be realized can be 144% of your annual salary.

5. Long-Term Incentive Plan

The Supervisory Board, within the framework approved by the Company’s General Meeting of
Shareholders and on the advice of the Remuneration Committee, can decide by discretion to
grant Royal Philips Electronics restricted share rights, stock options and/or other equity
related incentives to members of the Board of Management (including the Chairman) on a
year-to-year basis. The conditions of such incentives, if any, are also approved by the
General Meeting of Shareholders and may be changed on a yearly basis.

As Chairman of the Board of Management you are in principle eligible to participate in such
plan.

In April 2007 you will be eligible for a grant of restricted share rights and stock
options according to the level applicable to the Chairman of the Board of Management.

For the period you will be Chairman of the Board of Management you will not be eligible to
participate in any other Philips share purchase or equity related scheme than approved by
the

 

 

 

			
	
Employment contract between the Company and Mr G.J. Kleisterlee
	 	3
	 

Supervisory Board for the Board of Management.

The Long-Term Incentive Plan is designed to stimulate long-term investment in Philips
shares. To further align the interests of the Chairman and members of the Board of
Management and shareholders, all restricted shares shall be retained for a period of at
least five years or until at least the end of employment, if this period is shorter. The
same applies for restricted shares granted before the starting date of this Contract.

6. Company Car

You are entitled to a leased company car according to the conditions valid for Philips
Executives. In principle, a personal contribution is not required if the monthly lease price
does not exceed the standard lease price of EUR 3,050 excl. VAT at the moment of ordering of
the lease car. In case the monthly lease price exceeds the standard lease price of EUR 3,050,
a personal contribution for the private use of the car has to be paid. You are not entitled
to conclude a new lease agreement before the expiration date of the present lease agreement.

7. Allowances

	•	 	For business entertainment expenses
	 
	 	 	With respect to your position within the Company you are be eligible for a fixed
allowance for business entertainment expenses. Currently the tax-free allowance in your
case is EUR 29,042 per annum. This sum is meant to enable you amongst others to cover
the expenses you incur in entertaining business guests on behalf of the Company.
	 
	•	 	For the use of a home for representative purposes
	 
	 	 	Members of the Board of Management are eligible for a fixed allowance of Euro 6,807
tax-free to cover the use of their own home for representative purposes.

The above-mentioned allowances will be paid at the end of each quarter.

Parties agree that changes in fiscal legislation could make it necessary or desirable
for the Company to change the above arrangements.

8. Senior Executive Ambassador Program

You are invited to participate in the Senior Executive Ambassador Program to use
Philips products that will be made available to you at your home.

9. Other arrangements

The Company will make an apartment in the Amsterdam area available for the duration of your
contract of employment with Royal Philips Electronics. The costs of gas, water, electricity,
heating, telephone and local property taxes for this apartment are for your own account.

 

 

 

			
	
Employment contract between the Company and Mr G.J. Kleisterlee
	 	4
	 

10. Insurances

	•	 	Accident insurance
	 
	 	 	You will be covered by a 24-hours accident insurance policy. The maximum sum insured
is three times your gross annual salary as mentioned under paragraph 3. Details of
this arrangement are given in Annex A.
	 
	•	 	Directors and Officers Liability Insurance
	 
	 	 	You will be covered by a Directors and Officers liability insurance with regard to
“wrongful acts”. As of the date hereof, under the terms of the policy, “wrongful acts”
include any actual or alleged breach of trust, breach of duty, neglect, error,
misstatement, misleading statement, omission or other act wrongfully committed by the
Assured or any matter claimed against them solely by reason of him being Chairman of the
Board of Management.

11. Industrial disability

For a maximum period of three years from the start of disablement, but at the very latest
up to the end of the Contract, the balance between your annual salary, as stated in
paragraph 3, at the start of the total disability and the aggregate amount of any statutory
allowance distributed because of your total disablement, will — subject to your compliance
with the Company’s directives — be paid by the Company.

The Company shall not be bound by the aforesaid obligation if you have a claim against third
parties in respect of your disablement. Upon surrender to the Company of such claim — in so
far as it relates to loss of salary — an amount equal to the aforesaid balance shall — but
for no longer than the period stated in the foregoing paragraph — be paid by the Company in
advance.

However, should this policy change, the new policy will apply in full to you. No
concessions will be made if the new policy is less favorable than the present policy.

12. Holidays

The holiday entitlement for members of the Board of Management is 25 working days per
calendar year.

13. Rules governing Internal and External directorships

For the rules with respect to directorships, which may be amended from time to time, we
refer to Annex B.

14. Rules of Conduct with respect to Inside Information

The Philips’ Rules of Conduct with respect to Inside Information, which may be amended from
time to time, are applicable to you (Annex C). The Compliance Officer with respect to
inside information will contact you, as you are designated as “Qualified Insider”.

15. General Terms of Employment of Philips

Annex D contains the General Terms of Employment of the Philips Group, which also apply to
you.

 

 

 

			
	
Employment contract between the Company and Mr G.J. Kleisterlee
	 	5
	 

As evidence of your approval of the contents of the General Terms of Employment, Annex D will
be signed by you.

16. General Business Principles

For the General Business Principles, which apply to you, we refer to Annex E-1. In Annexes
E-2 and E-3 you will find the Financial Code of Ethics and the Purchasing Code of Ethics,
which are applicable to you.

17. Personnel Registration

Your data will be recorded in one or more personnel registration systems.

18. Applicable law

All terms of the employment and this Contract are governed by the laws of the Netherlands.

Parties agree that all the above compensation elements are subject to the corporate
governance framework applicable to the Chairman of the Board of Management and can be
changed, abolished or replaced by other elements at any time at the sole discretion of the
Supervisory Board of the Company.

 

 

 

			
	
Employment contract between the Company and Mr G.J. Kleisterlee
	 	6
	 

If you agree to these proposals, you are requested to sign both the enclosed copy of this
letter and Annex D and return them no later than February 9, 2007 to [contact detail
omitted] Secretary Remuneration Committee, Royal Philips Electronics, HBT 10.19, P.O. Box
77900, 1070 MX Amsterdam, the Netherlands.

Needless to say, you may contact [contact detail omitted] if you require further
information about these arrangements.

Looking forward to receiving your reply, we remain

With kind regards,

W. de Kleuver

(Chairman Supervisory Board)

Agreed and signed:

 G.J. Kleisterlee

	 	 	 
	Enclosures:
	 	 
	Annex A —

	 	Accident Insurance
	Annex B —

	 	Rules governing Internal and External Directorships
	Annex C —

	 	Rules of Conduct with respect to Inside Information
	Annex D —

	 	General Terms of Employment

	Annex E —

	 	General Business Principles (E-1), Financial Code of Ethics (E-2)
and Purchasing Code of Ethics (E-3)

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