Document:

SUBSCRIPTION
      ESCROW AGREEMENT

     

    SUBSCRIPTION
      ESCROW AGREEMENT
      (the
“Agreement”) executed this ___ day of April, 2007, by and among Neah Power
      Systems, Inc., a Nevada corporation (the “Issuer”), Empire Financial Group,
      Inc., a Florida corporation (the “Depositor”) and Sterling National Bank, a
      national banking institution organized and existing under the laws of the United
      States of America, as escrow agent (“Escrow Agent”).

     

    WHEREAS,
      the
      Issuer has filed a registration statement on Form SB-2, File No. 333-140255,
      with the Securities and Exchange Commission pursuant to the Securities Act
      of
      1933, as amended, concerning the subscription and sale of shares of the Issuer’s
      common stock, together with common stock purchase warrants (the “Securities”);
      and

     

    WHEREAS,
      the
      Depositor has been named as the underwriter pursuant to the proposed
      subscription and sale of the Securities under the terms of the Underwriting
      Agreement by and between Issuer and Depositor to be dated the effective date
      of
      the above registration statement (the “Effective Date”); and

     

    WHEREAS,
      the
      Issuer and Depositor propose to establish an escrow account to be designated
      “Neah Power Systems Subscription Escrow Account” in accordance and compliance
      with 17 C.F.R. section 240.15c2-4 to be maintained by the Escrow Agent (the
      “Escrow Account”) until the earlier of 90 days from the Effective Date or the
      sale of $12,000,000 in Securities (the “Maximum Purchase”) is complete or is
      terminated by the Issuer unless extended for up to an additional 90 days in
      accordance with the terms of the prospectus.

     

    NOW,
      THEREFORE,
      in
      consideration of the premises and of the mutual covenants contained herein
      and
      intending to be legally bound, the parties hereto agree as follows:

     

    1. APPOINTMENT
      OF ESCROW AGENT.
      The
      Issuer and the Depositor do hereby appoint the Escrow Agent as escrow agent
      for
      the purposes described herein.

     

    2. ACCEPTANCE
      OF APPOINTMENT BY ESCROW AGENT.
      The
      Escrow Agent does hereby accept the appointment as escrow agent and agrees
      to
      act on the terms and conditions described herein.

     

    3. ESCROW
      FUNDS.
      All
      funds received by Depositor and Issuer in connection with the sale of Securities
      shall be deposited with the Escrow Agent into the Escrow Account. The Escrow
      Agent shall hold, maintain and secure the funds deposited into the Escrow
      Account (the “Escrow Funds”), subject to the terms, conditions and restrictions
      herein described. Escrow Agent shall release Escrow Funds only in accordance
      with the instructions as set forth in Exhibit “A”, or as otherwise expressly set
      forth in this Agreement.

     

    4. HOLDING
      OF ESCROW FUNDS.
      The
      Escrow Agent shall hold the Escrow Funds in a non-interest bearing Escrow
      Account. During the term of this Agreement the Escrow Agent shall provide the
      Depositor and the Issuer with written monthly statements for the Escrow Account
      containing the beginning balance of the Escrow Funds, as well as all
      transactions for the statement period.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    5. LIABILITY
      OF ESCROW AGENT.
      The
      Escrow Agent shall not be held liable for any actions taken in good faith
      reliance upon written instructions by Depositor and/or Issuer. The Escrow Agent
      shall not be held liable for any action or inaction taken in good faith, except
      that it may be held liable for its own gross negligence or willful conduct,
      if
      so determined by a court of competent jurisdiction. Under no circumstances
      shall
      the Escrow Agent be held liable for any special, indirect or consequential
      damages of any kind, even though the Escrow Agent may have been placed on notice
      of the likelihood of such loss.

     

    6. RIGHTS
      AND DUTIES OF ESCROW AGENT.
      This
      Agreement shall represent the entire understanding of the parties hereto, and
      the Escrow Agent shall only be required to perform the duties expressly
      described herein, and no further duties shall be implied from this Agreement
      or
      any other written or oral agreement by and between the Escrow Agent, the
      Depositor and the Issuer made previous or subsequent to this Agreement, unless
      such written amendment to this Agreement is executed by all parties to this
      Agreement. The Escrow Agent may rely upon any written instructions believed
      in
      good faith to be genuine when signed and presented by the requesting party
      and
      shall not have a duty to inquire or investigate the validity of any such written
      instruction. The Escrow Agent shall not be required to solicit funds from either
      Depositor or Issuer in connection with this Agreement. The Escrow Agent shall
      be
      permitted to execute any and all powers under this Agreement directly or through
      its agents and/or attorneys, and shall be allowed to seek counsel from any
      professional regarding the performance of this Agreement, which professionals
      shall be selected at the sole discretion of the Escrow Agent. Should the Escrow
      Agent become uncertain as to its duties under this Agreement, it shall be
      permitted to immediately abstain from further action until such duties are
      expressly defined in writing by the parties hereto, and shall only be required
      to protect and keep the Escrow Funds until such time as a written agreement
      among the parties is executed or a court of competent jurisdiction shall render
      an order directing further action. Upon release of Escrow Funds as set forth
      in
      Exhibit “A” hereto, Escrow Agent shall be fully released from any and all
      further obligations, except for the provision of written notice to the other
      parties to this Agreement, setting forth in such notice the date of release
      of
      the Escrow Funds, the party to whom released, the amount released and a
      statement setting forth Escrow Agent’s release from further obligations to any
      other party to this Agreement.

     

    7. RESIGNATION
      AND SUCCESSION OF ESCROW AGENT.
      The
      Escrow Agent may resign and be discharged of all duties and obligations under
      this Agreement by providing ten days written notice of such resignation to
      both
      the Depositor and the Issuer. If no successor escrow agent shall have been
      named
      at the expiration of the ten day notice period, the Escrow Agent shall have
      no
      further obligations hereunder except to hold the Escrow Funds as a depository.
      Upon notification by Depositor and Issuer of the appointment of a successor
      escrow agent, the Escrow Agent shall promptly deliver the Escrow Funds and
      all
      materials and instruments in its possession which relate to the Escrow Funds
      to
      such successor, and the duties of the resigning Escrow Agent shall terminate
      in
      all respects, and it shall be released and discharged from all further
      obligations herein. The Escrow Agent shall have the right to withhold an amount
      equal to any amount due and owing the Escrow Agent, plus any costs and fees
      incurred by the Escrow Agent in connection with the termination of this
      Agreement. Any merger, consolidation or the purchase of all or substantially
      all
      of the Escrow Agent’s corporate assets resulting in a new corporate entity shall
      not be considered a successor for the purposes of this Agreement, and the Escrow
      Funds shall be transferred to such entity without written consent or further
      action under this Agreement.

     

    
      
         

      

      
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    8. TERMINATION
      OF ESCROW AGENT.
      The
      Escrow Agent may be discharged from its duties under this Agreement upon 30
      days
      written notice from Depositor and Issuer and upon the payment of any and all
      costs and fees due to Escrow Agent. In such event, the Escrow Agent shall be
      entitled to rely upon written instructions from Depositor and Issuer as to
      the
      disposition and delivery of the Escrow Funds. Upon 30 days after receipt of
      such
      written notice of termination, if no successor has been named, the Escrow Agent
      shall immediately cease further action under this Agreement and shall have
      no
      further obligations hereunder except to hold the Escrow Funds as a
      depository.

     

    9. TAXES
      AND FEES.
      Depositor and Issuer each represent that its Federal Tax Identification Number
      listed in Exhibit “A” is true and correct, and that each will notify the Escrow
      Agent in writing immediately upon any change to such number. Escrow Agent shall
      use Depositor’s Federal Tax Identification Number for the escrow account.
      Depositor and Issuer each grant to the Escrow Agent a right of set-off which
      may
      be exercised to pay any and all taxes, whether federal, state or local, incurred
      by the holding of the Escrow Funds. Depositor and Issuer shall, jointly and
      severally, indemnify and hold harmless the Escrow Agent against and in respect
      to liability for taxes and/or any penalties or interest attributable to the
      holding of Escrow Funds by Escrow Agent pursuant to this Agreement. Issuer
      and
      Depositor jointly and severally agree to pay or reimburse the Escrow Agent
      for
      all expenses and disbursements, including attorney’s fees, incurred in
      connection with the preparation, execution, performance, delivery, modification
      or termination of this Agreement.

     

    10. INDEMNIFICATION
      OF ESCROW AGENT.
      Depositor and Issuer shall jointly and severally indemnify, defend and hold
      harmless the Escrow Agent and its directors, officers, agents and employees
      from
      all loss, liability or expense arising from the execution and/or performance
      of
      this Agreement or the undertaking of any instructions from Depositor or Issuer,
      except for those acts by the Escrow Agent which shall constitute gross
      negligence or willful misconduct, and such indemnification shall include
      attorney’s fees. The Escrow Agent’s right of indemnification shall survive the
      resignation or termination of the Escrow Agent and the termination of the duties
      described in this Agreement. The Depositor and Issuer further grant the Escrow
      Agent a right of set-off and a security interest against the Escrow Funds for
      the payment of any claim for indemnification, expenses or compensation due
      hereunder.

     

    11. NOTICES.
      All
      communications, notices and instructions required herein shall be in writing
      and
      shall be deemed to have been duly given if delivered by hand or first class,
      registered mail, return receipt requested, postage prepaid, and addressed as
      follows:

     

    
      	(a) If
              to Escrow Agent:	
              Sterling National Bank

              
                425
                  Park Avenue

                New
                  York, New York 10022

                Telephone:
                  (212) ________

                Facsimile:
                  (212) _________

                Attention:
                  Steven Hebert

              

            

    

     

    
      
         

      

      
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      	(b) If
              to Issuer:	Neah Power Systems, Inc.
              22122
                20th Ave SE, Suite 161

              Bothell,
                Washington 98021

              Telephone:
                (425) 424-3324

              Facsimile:
                (425) _________

              Attention:
                Paul Abramowitz, CEO

            
	 	 
	(c) If
              to Depositor:	
              Empire Financial Group, Inc.

              
                14
                  E 60th Street, Suite 210

                New
                  York, New York 10022

                Telephone:
                  (212) ________

                Facsimile:
                  (212) _________

                Attention:
                  

              

            

    

     

    In
      the
      event the Escrow Agent shall receive such written instructions and shall
      determine pursuant to its sole discretion that verification of such instructions
      shall be required, then the Escrow Agent shall be permitted to seek confirmation
      of such instructions by way of telephone contact to the author of such written
      instructions. Verification of the instructions by the purported author of the
      instructions called at the telephone number placed on the instructions shall
      serve to verify such instructions.

     

    12. ASSIGNMENT.
      This
      Agreement shall not be assignable absent written consent of the parties hereto.
      Any assignment absent written consent shall be deemed void
      ab initio,
      except
      that the merger or acquisition of all or substantially all the assets of the
      parties shall not require written consent, but shall require written notice
      to
      all the parties hereto. Notwithstanding the foregoing, all covenants contained
      in this Agreement by or on behalf of the parties hereto shall bind and inure
      to
      the benefit of such parties and their respective heirs, administrators, legal
      representatives, successors and assigns.

     

    13. MODIFICATION
      OF AGREEMENT.
      This
      Agreement shall constitute the complete and entire understanding of the parties
      hereto, and shall supersede any and all prior agreements between or among them.
      The provisions of this Agreement shall not be waived, modified, amended, altered
      or supplemented, in whole or in part, except by a writing signed by all the
      parties hereto.

     

    14. CHOICE
      OF LAW.
      This
      Agreement shall be governed and construed in accordance with the laws of the
      State of New York. The parties further waive any right to a trial by jury with
      respect to any judicial proceeding arising out of occurrences related to this
      Agreement.

     

    15. FORCE
      MAJEURE.
      No party
      to this Agreement shall be liable to any other party for losses arising out
      of,
      or the inability to perform its obligations under the terms of this Agreement,
      due to acts of God, which shall include, but shall not be limited to, fire,
      floods, strikes, mechanical failure, war, riot, nuclear accident, earthquake,
      terrorist attack, computer piracy, cyber-terrorism or other acts beyond the
      control of the parties hereto.

     

    
      
         

      

      
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    16. EXECUTION.
      This
      Agreement may be executed in several counterparts, each of which shall be deemed
      an original, but such counterparts together shall constitute one and the same
      instrument. The effective date of this Agreement shall be the date it is
      executed by the last party to do so.

     

    [Signature
      page follows]

     

     

     

     

    
 

    
      
         

      

      
        5

        
          

        

      

      
         

      

       

    

    IN
      WITNESS WHEREOF,
      the
      parties hereto have executed this Agreement as of the date first written
      above.

     

    
      	 	ESCROW AGENT:
	 	STERLING NATIONAL BANK
	 	 
	 	  
	 	
              By:

            
	 	Its:
	 	 
	 	 
	 	ISSUER:
	 	NEAH POWER SYSTEMS, INC.
	 	 
	 	  
	 	
              By:
                Paul Abramowitz

            
	 	
              Its:
                President and CEO

            
	 	 
	 	 
	 	DEPOSITOR:
	 	EMPIRE FINANCIAL GROUP, INC.
	 	 
	 	  
	 	
              By:

            
	 	
              Its:

            

    

     

     

    
      
         

      

      
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    Exhibit
      “A”

     

    Escrow
      Agent shall pay over to the Issuer from the Escrow Funds, by wire transfer
      or
      bank draft of immediately available funds to a bank account of the Issuer’s
      description, the Escrow Funds upon receipt of written instructions of the Issuer
      and Depositor following the occurrence of sales of at least $6,000,000 in
      Securities (the “Minimum Purchase”). The Escrow Agent shall deduct all Escrow
      Agreement costs.

     

    After
      the
      initial disbursement of Escrow Funds to Issuer and until the termination of
      the
      Escrow Account, whether due to reaching the termination date or having closed
      on
      the Maximum Purchase, Escrow Agent shall pay to Issuer any additional funds
      received with respect to the Securities, by wire transfer or bank draft of
      immediately available funds, from time-to-time in accordance with and upon
      receipt of written instructions of the Issuer and Depositor.

     

    In
      the
      event the offering of Securities is terminated for any reason prior to the
      closing on the Minimum Purchase, upon written instructions from the Issuer
      and
      Depositor the Escrow Agreement shall return to the respective investors the
      funds on deposit without interest thereon or deduction therefrom. The written
      instructions shall be in a form reasonably acceptable to Escrow Agent and shall
      include the name and address of each investor and the exact amount to be
      returned to each investor.

     

    The
      Federal Employer Identification Number of the Issuer is 88-0418806.

     

    The
      Federal Employer Identification Number of the Depositor is
      65-0211856.EXHIBIT
        10.2

      [ENGLISH
        TRANSLATION]

      Contract
        for Technology Transfer

      

      Transferor:
        Shaanxi
        Suo'ang Biological Science & Technology Co., Ltd

      Legal
        Representative: Ren Baowen 

      Address:
        22F,
        Suite A, Zhengxin Building, No. 5, Gaoxin 1st
        Road 

      Tel:
        84067376

      

      Transferee:
        HanZhongWeiDa Commercial Company Limited

      Legal
        Representative:

      Address:
        F4 City Wuyi Building, Hanzhong

      Tel:0916-2866098 

      The
        undersigned Transferor and Transferee have agreed to close the following
        contract according to “Contract Law of the People’s Republic of
        China”:

      1.  Name
        of
        Project: COPO Resin Parent Material 

       

      2.  Obligation
        of Transferor: 

      (1).
        Transferor shall submit all technological data relating to COPO within 30
        days
        when this contract becomes effective.

      3.
        Obligation of Transferee: 

      (1).
        Transferee shall pay transferor RMB two million as royalty by installment
        plan
        as follows: 50% will be charged on March 15th
        in the
        first stage; 50% will be charged on April 15th
        in the
        second stage. Two parties shall agree as follows:

      a.
        Transferee shall pay RMB one million to transferor within two and a half
        months
        after this contract takes effect.

      (2).
        Transferee shall use this patented technology among the scope stipulated
        by this
        contract.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      4.
        Confidentiality 

      It
        is
        understood and agreed by the parties that all technological data relating
        to
        COPO shall remain strictly confidential during the term of this
        contract.

      5.
        Follow-up Improvement

      New
        invention or patent based on this transferred technology shall belong to
        those
        who invent such invention or patent during the course of implement of this
        contract except special promises between the parties. 

      6.
        Liability
        for Breach of Contract to
        Transferor 

      (1).
        Transferor shall return portion of or total charges as well as 5% penalty
        to
        transferee according to different situations if transferor does not provide
        transferee with technologic data or guidance defined in this contract.

      (2).
        Transferee shall have the right to cancell this contract if transferor does
        not
        provide technologic data or guidance two months overdue. Transferor shall
        pay 5%
        penalty.

      (3).
        Transferor shall pay 5% penalty to transferee when transferee’s losses resulting
        from transferor’s breach of contract and disclosure of confidential
        technology.

      7.
        Liability
        for Breach of Contract to
        Transferee

      (1).
        Except for paying back using fees, transferee shall pay transferor 5% penalty
        if
        transferee does not pay using fees by terms and conditions stipulated in
        this
        contract; transferee shall cease to use the patented technology and return
        related data and pay 5% penalty if transferee denies to pay using charges
        or
        penalty. 

      (2).
        Transferor shall have the right to cancel this contract if transferee does
        not
        pay using fees two months overdue and transferee shall cease to use transferred
        technology and return technological data and pay 5% penalty. 

      (3).
        Transferee shall cease to breach of contract and pay 5% penalty if transferee
        use this transferred technology beyond the scope of this contract.

      (4).
        Allowing the third party to use this patented technology without transferor’s
        permission, transferee shall cease to breach of contract and return illegal
        incomes and pay 5% of total amount as penalty. 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (5).
        Transferee shall return illegal incomes and pay 5% penalty to transferor
        when
        transferee breaches this contract and discloses the confidential
        technology.

      8.
        Liability Commitment Terms of Tortious Risks 

      (1).
        Transferor shall guarantee self as the exclusive legal owner of this patented
        technology that shall not be in process of patent application by others.
        Otherwise, transferor shall be responsible for legal liability by invading
        other’s legal right and interest due to above matters. 

      9.
        Solutions for Disputes: First is consultation, then it shall be delivered
        to
        arbitration agency if fails to consultation. 

      10.
        This
        contract is duplicate and each party holds one respectively and shall be
        effective under signatures & seals by two parties. 

      Transferor:
        Shaanxi Suo'ang Biological    Transferee:
        HanZhongWeiDa 

      Science
        & Technology Co., Ltd    
        Commercial Company Limited

       

      Legal
        Representative: Ren Baowen        Legal
        Representative:
        Xuejin
        Wang

      

       

      Date:
        Dec. 25,2006                        Date:
        Dec. 25,2006

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