Document:

EXHIBIT 10.1

 SECURITIES PURCHASE AGREEMENT
 

 THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”) is entered into as of June 10, 2014, by and between [                       ], an individual accredited investor having his principal residence at [                             ] (“Investor”), and NEAH POWER SYSTEMS, INC., a Nevada corporation having its principal offices located at 22118 20th Avenue SE, Suite 142, Bothell, Washington, 98021 (the “Company”).  The Investor and the Company are sometimes referred to herein, individually, as a “Party” and, collectively, as the “Parties”.
 

 WHEREAS, the Parties desire that the Company shall issue and the Investor shall purchase certain securities of the Company upon the terms and subject to the conditions described herein.
 

 NOW, THEREFORE, the Parties agree to the following:
 

 1.
 Purchase and Sale of Securities.  Subject to the terms and conditions of this Agreement, the Investor shall purchase from the Company and the Company shall issue and sell to the Investor thirty three million three hundred and thirty three thousand and three hundred and thirty three (33,333,333) shares (the “Shares”) of the Company’s common stock, par value $0.001 (the “Common Stock”), eight million three hundred and thirty three thousand and three hundred and thirty three (8,333,333) three (3) year warrant to purchase common shares at a strike price of $0.0300 (Warrant no XXX-01), and three million three hundred and thirty three thousand and three hundred and thirty three (3.333,333) three (3) year warrant to purchase common shares at a strike price of $0.0375 (Warrant No XXX-02) for the total of $500,000.00 (the “Purchase Price”).  
  
 2.
 Closing.  The closing of the purchase and sale of the Shares (the “Closing”) shall take place remotely by the electronic exchange of all required closing deliveries.  The date on which the Closing actually occurs is referred to herein as the “Closing Date”.
  
 3.
 Closing Deliverables.  At the Closing, (i) the Investor shall wire the Purchase Price to the Company, and (ii) the Company shall deliver to the Investor a certificate representing the Shares and the associated warrant certificates.
  
 4.
 Investor Representations.  The Investor represents, warrants and acknowledges to the Company: (i) the Investor is an accredited investor as defined in Rule 501(a) of Regulation D under the Securities Act; (ii) the Investor has such experience in financial and business matters that it is capable of evaluating the merits and risks of its investment in the Shares; (iii) the Investor acknowledges that this investment is speculative and involves a high degree of risk, and the Investor is capable of bearing all of the economic risks of this investment, including the possible loss of its investment; (iv) the Investor understands that the Shares are being sold by the Company pursuant to an exemption from registration under the Securities Act and pursuant to similar exemptions under certain state securities laws; (v) the Investor acknowledges that the Shares will be deemed “restricted securities” under applicable rules promulgated under the Securities Act; (vi) the Investor is acquiring the Shares for its own account, for investment and not with a view to, or for sale in connection with, any distribution thereof, nor with any present intention of distributing or selling the same; (vii) the Investor understands that it will not be able to transfer or make any other disposition of the Shares unless such transfer or disposition is registered or qualified under all applicable federal or state securities laws or an exemption from such registration or qualification is available; (viii) the Investor understands that the certificates representing the Shares will bear a legend evidencing the restrictions on transfer described herein; (ix) the Investor has had an opportunity to review the public information available about the Company, including the documents filed by the Company with the Securities and Exchange Commission (the “SEC”), and the Investor has had an opportunity to ask questions and receive answers from the Company in connection with the purchase of the Shares; and (x) the Investor has full power and authority to execute, deliver and perform this Agreement.
  
 

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 5.
 Representations and Warranties by Investor under USA PATRIOT Act.

 (a) 
 The Investor represents that the amounts to be paid by the Investor to the Company for the Shares were not and are not directly or indirectly derived from activities that may contravene federal, state or international laws and regulations, including anti-money laundering laws and regulations. Federal regulations and Executive Orders administered by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) prohibit, among other things, the engagement in transactions with, and the provision of services to, certain foreign countries, territories, entities and individuals.1 The lists of OFAC prohibited countries, territories, persons and entities can be found on the OFAC website at <http://www.treas.gov/ofac>. In addition, the programs administered by OFAC (“OFAC Programs”) prohibit dealing with individuals or entities in certain countries regardless of whether such individuals or entities appear on the OFAC lists. 
 
 (b) 
 The Investor hereby represents and warrants that, to the best of the Investor’s knowledge: (i) the Investor; (ii) any person controlling or controlled by the Investor; (iii) if the Investor is a privately held entity, any person having a beneficial interest in the Investor; or (iv) any person for whom the Investor is acting as agent or nominee in connection with this investment is not a country, territory, individual or entity named on an OFAC list or a person or entity prohibited under the OFAC Programs. 
 
 (c) 
 The Investor represents and warrants that, to the best of the Investor’s knowledge, (i) the Investor; (ii) any person controlling or controlled by the Investor; (iii) if the Investor is a privately held entity, any person having a beneficial interest in the Investor; or (iv) any person for whom the Investor is acting as agent or nominee in connection with this investment is not a senior foreign political figure,2 any immediate family member3 or close associate4 of a senior foreign political figure as such terms are defined in the footnotes below. 
 __________________________________________________________________
 	 	
	 1
	 These individuals include specially designated nationals, specially designated narcotics traffickers and other parties subject to OFAC sanctions and embargo programs. 

	 2 
	 A “senior foreign political figure” is defined as a senior official in the executive, legislative, administrative, military or judicial branches of a non-U.S. government (whether elected or not), a senior official of a major non-U.S. political party, or a senior executive of a non-U.S. government-owned corporation. In addition, a “senior foreign political figure” includes any corporation, business or other entity that has been formed by, or for the benefit of, a senior foreign political figure. 

	3	 “Immediate family” of a senior foreign political figure typically includes the figure's parents, siblings, spouse, children and in-laws.

	4	 A “close associate” of a senior foreign political figure is a person who is widely and publicly known to maintain an unusually close relationship with the senior foreign political figure, and includes a person who is in a position to conduct substantial U.S. and non-U.S. financial transactions on behalf of the senior foreign political figure.

  
 6.
 Company Representations. The Company represents and warrants to the Investor as follows:
  
 (a)
 Due Organization. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Nevada and has all requisite power and authority to own, lease, use, and operate its properties and to carry on its business as and where now owned, leased, used, operated and conducted. The Company has no subsidiaries. The Company is qualified to conduct business and is in good standing in the States of Nevada and Washington, and neither the conduct of its business nor the ownership or leasing of its property require it to qualify to do business as a foreign corporation in any other jurisdiction. All actions taken by the current directors and stockholders of the Company have been valid and in accordance with the laws of the State of Nevada and all actions taken by the Company have been duly authorized by the current directors and stockholders of the Company as appropriate.
 

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 (b)
 Authorized Capital, No Preemptive Rights, No Liens; Anti-Dilution. As of the date hereof, the authorized capital of the Company is 1,800,000,000 shares of Common Stock, par value $0.001 per share, of which 929,889,445 are issued and outstanding, and 5,000,000 shares of Preferred Stock, par value $0.001 per share, of which  2,000,000 shares have been designated as Series B Preferred Stock, 1,228,994 shares of which are issued and outstanding.  All of the outstanding shares of capital stock are duly authorized, validly issued, fully paid and non-assessable. No shares of capital stock of the Company are subject to preemptive rights or similar rights of the stockholders of the Company or any liens or encumbrances imposed through the actions or failure to act of the Company, or otherwise.  As of the date hereof 
 (i) there are no outstanding options, warrants, convertible securities, scrip, rights to subscribe for, puts, calls, rights of first refusal, tag-along agreements, nor any other agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or rights convertible into or exchangeable for any shares of capital stock of the Company, or arrangements by which the Company is or may become bound to issue additional shares of capital stock of the Company, and 
 (ii) there are no agreements or arrangements under which the Company is obligated to register the sale of any of its securities under the Securities Act of 1933, and 
 (iii) there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or in the Company’s articles of incorporation or bylaws or in any agreement providing rights to security holders) 
 that will be triggered by the transactions contemplated by this Agreement. 
 (c)
 Authorization. The Company has full corporate power and authority and has taken all requisite corporate action on the part of the Company, its officers, directors and stockholders necessary for (i) the authorization, execution and delivery of this Agreement and all other necessary documents required to be executed and delivered in connection herewith (collectively, the “Transaction Documents”), (ii) the performance of all obligations of the Company under the Transaction Documents, and (iii) the authorization, issuance, and delivery of the Shares in accordance with the terms hereof.  The Transaction Agreements constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms except as such enforcement may be limited by (a) applicable bankruptcy, insolvency, reorganization, voidable preference, fraudulent conveyance and other similar laws affecting the rights or remedies of creditors generally and (b) the exercise of judicial discretion in accordance with general principles of equity (whether applied by a court of law or of equity).
 (d) 
 Valid Issuance of the Shares.  The Shares, when issued and delivered in accordance with the terms hereof, will be validly issued, fully paid and non-assessable and free of restrictions on transfer other than restrictions imposed by applicable state and federal securities laws, or created by or imposed by the Seller.  Assuming the accuracy of the representations of the Seller in Section 4, the Shares, when issued, will be issued in compliance with all applicable federal and state securities laws.  
 (e)
  Common Stock. All of the outstanding shares of Common Stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable. The Company has registered the Common Stock pursuant to Section 12(b) or 12(g) of the Exchange Act and is in full compliance with all reporting requirements of the Exchange Act, and the Company has maintained all requirements for the continued listing or quotation of the Common Stock, and such Common Stock is currently listed or quoted on the Principal Market. The Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the SEC is contemplating terminating such registration.
 

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 (f)
 No Registration or Integration. Assuming that the Investor’s representations in Section 4 and the signature page to this Agreement are true and correct, no registration of the shares of common stock is required under the Securities Act or any state securities law for the offer and sale of such securities to the Investor pursuant to this Agreement.  None of the Company, its affiliates (as defined in Rule 501(b) of Regulation D under the Securities Act) or any person acting on its or their behalf has, directly or indirectly, made offers or sales of any security or solicited offers to buy any security which is or would be integrated with the sale of the Shares in a manner that would require the Shares to be registered under the Securities Act.
  
 (g)
 No General Solicitation. Neither the Company, its affiliates (as defined in Rule 501(b) of Regulation D under the Securities Act) or any person acting on its or their behalf has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with any offer or sale of the Shares in the United States. 
 (h)
 Exchange Act Compliance.  The Company is subject to and in compliance with the reporting requirements of Exchange Act.  As of its filing date, each report filed by the Company with the SEC pursuant to the Exchange Act, complied as to form in all material respects with the requirements of the Exchange Act and did not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.  Each registration statement and any amendment thereto filed by the Company pursuant to the Securities Act, as of the date such statement or amendment became effective, complied as to form in all material respects with the Securities Act and did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; and each prospectus filed pursuant to Rule 424(b) under the Securities Act, as of its issue date and as of the closing of any sale of securities pursuant thereto did not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.  The Company’s internal controls over financial reporting are effective and the Company is not aware of any material weakness in them. There has been no change in the Company’s internal controls over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal controls over financial reporting.
 (i)
 No Conflicts. The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby do not and will not (a) result in a violation of the Certificate or By-Laws or (b) conflict with, or constitute a material default (or an event that with notice or lapse of time or both would become a material default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any material agreement, indenture, instrument or any "lock-up" or similar provision of any underwriting or similar agreement to which the Company is a party, or (c) result in a violation of any federal, state or local law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to the Company or by which any property or asset of the Company is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in the aggregate, have a material adverse effect) nor is the Company otherwise in violation of, conflict with or in default under any of the foregoing. The business of the Company is not being conducted in violation of any law, ordinance or regulation of any governmental entity, except for possible violations that either singly or in the aggregate do not and will not have a material adverse effect. The Company is not required under federal, state or local law, rule or regulation to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under the Transaction Agreement or issue and sell the Equity Unit in accordance with the terms hereof or the Common Stock issuable upon exercise or conversion thereof (other than filing of a Form D with the SEC and any notice filings under state securities or blue sky laws subsequent to the closing of the transactions); provided that, for purposes of the representation made in this sentence, the Company is assuming and relying upon the accuracy of the relevant representations and agreements of Investor herein. 
 

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 (j)
 No Undisclosed Liabilities. The Company has no liabilities or obligations that are material, individually or in the aggregate, and that are not disclosed in the SEC Documents or otherwise publicly announced, other than those incurred in the ordinary course of the Company's businesses since May 14, 2014 and which, individually or in the aggregate, do not or would not have a material adverse effect on the Company. 
 (k)
 No Undisclosed Events or Circumstances. There has been no event or circumstance that has occurred or exists with respect to the Company, that, under applicable law, rule or regulation, requires public disclosure or announcement prior to the date hereof by the Company but which has not been so publicly announced or disclosed in the Company’s filings with the SEC or any disclosure schedule attending this Agreement. 
 (l)
 Financial Statements.  The financial statements included in each SEC Filing present fairly and accurately the consolidated financial position of the Company and its subsidiaries as of the dates shown and their consolidated results of operations and cash flows for the periods shown, and such financial statements have been prepared in conformity with generally accepted accounting principles applied on a consistent basis.
 (m)
 Disclosures.  No representation or warranty made by the Company under this Agreement or the other Transaction Agreements contains any untrue statement of a material fact or omits to state a material fact necessary to make the respective statements contained herein or therein, in light of the circumstances under which the statements were made, not misleading.
 5.
 Miscellaneous. 
 (a) Governing Law.  All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Washington, without regard to the principles of conflict of laws thereof.  Each Party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions hereunder (whether brought against a party hereto or its respective Affiliates, directors, officers, shareholders, employees or agents) may be commenced in the state and federal courts sitting in the City of Seattle, King County (the “Washington Courts”).  Each Party hereto hereby irrevocably submits to the non-exclusive jurisdiction of the Washington Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such Washington Courts, or such Washington Courts are improper or inconvenient venue for such proceeding.  Each Party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such Party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. Each Party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. If either Party shall commence an action or proceeding to enforce any provisions of this Agreement, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.
 

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 (b) Waiver.  Any waiver by the Company or the Investor of a breach of any provision of this Agreement shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Agreement.  The failure of the Company or the Investor to insist upon strict adherence to any term of this Agreement on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.  Any waiver by the Company or the Investor must be in writing.
 

 (c) Headings.  The headings contained herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.
 

 (d)     
 Successors and Assigns. This Agreement shall be binding upon the parties hereto, their respective successors and may not be assigned by any party without the written agreement of both parties.
 

 (e)     
 Amendment. This Agreement may not be amended without the written agreement of both parties. 
 (f)
 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
 

 (g)     
 Titles and Subtitles. The titles of the sections and subsections of this Agreement are not to be considered in construing this Agreement.
 

 (h)   
 Agreement is Entire Contract. This Agreement, together with the other Transaction Agreements, constitutes the final, complete and exclusive contract between the parties hereto with respect to the subject matter hereof and no party shall be liable or bound to the other in any manner by any warranties, representations, guarantees or covenants except as specifically set forth herein and in such other documents referred to above. Nothing in this Agreement, express or implied, is intended to confer upon any party, other than the parties hereto, and their respective successors and assigns, any right, remedies, obligations or liabilities under or by reason of this  Agreement, except as expressly provided herein.
 

 1.
 Notices. All notices pertaining to the Agreement shall be in writing and shall be delivered by a) facsimile, by b) the United States Postal Service or reputable courier service, or by c) E-mail with receipt confirmation by recipient. The contact information for such communications shall be:
 If to the Company: 
 

 Neah Power Systems, Inc. 
 22118 20th Ave SE, Suite 142
 Bothell, Washington 98021
 Tel: 425-424-3324 ext. 112
 Fax: 425-483-8454
 Attn: David Schmidt
 dschmidt@neahpower.com
  
  
 

 
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 With a copy to:
 

 Joseph J. Tomasek, Esq.
 Jtoma38@aol.com
 77 North Bridge Street
 Somerville, New Jersey 08876
 (Tel): 908-429-0030
 

 Mintz&Fraade, P.C.
 480 Madison Avenue
 New York, New York 10022
 212-486-2500
 

 

 If to Investor:
 

 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on the day and year first above written.
 

 

 

 

 

 By:__________________________________
 Principal
 

 

 NEAH POWER SYSTEMS, INC.
 

 

 By:
  ________________________________
 Gerard Christopher D’Couto
 President and Chief Executive Officer
  
 

 7EXHIBIT 10.2

 Form of Warrant
 THIS WARRANT HAS BEEN, AND THE SHARES OF COMMON STOCK WHICH MAY BE PURCHASED PURSUANT TO THE EXERCISE OF THIS WARRANT (THE "SHARES") WILL BE, ACQUIRED SOLELY FOR INVESTMENT AND NOT WITH A VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY DISTRIBUTION THEREOF. NEITHER THIS WARRANT NOR THE SHARES (TOGETHER, THE "SECURITIES") HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH DISPOSITION IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND OF ANY APPLICABLE STATE SECURITIES LAWS.
 

 Neah Power Systems, Inc.
 

 WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK
  
  	No. W-2014-XXX-XX		______ Common Shares

 

 

 THIS CERTIFIES THAT, for value received, [    ] (“Investor”), or its registered assigns (the “Holder”), is entitled to subscribe for and purchase from Neah Power Systems, Inc. (the “Company”), a Nevada corporation with an address at 22118 20th Avenue SE, Suite 142, Bothell, Washington, 98021, ”), ____ ________ shares of the fully paid and non-assessable Common Stock, $0.001 par value ("Shares"), of the Company at the price of ___________ per share (the “Exercise Price”), subject to the provisions and upon the terms and conditions hereinafter set forth.
 

 
 This Warrant is subject to the following terms and conditions:
 

 1.
 TERM.
 

 The term of this Warrant shall terminate, to the extent not exercised, on the third anniversary of its issue date (the “Term”).  This Warrant is exercisable by the Holder, in whole or in part, any time during the Term. 
 

 2. 
 METHOD OF EXERCISE; PAYMENT.
 

 (A)
 CASH EXERCISE. The purchase rights represented by this Warrant may be exercised by the Holder, in whole or in part, from time to time at the principal office of the Company, by delivering a completed and duly executed Notice of Exercise (attached hereto as Exhibit “A”) and by the payment to, and receipt thereof by, the Company of an amount equal to the Exercise Price multiplied by the number of the Shares being purchased, which amount may be paid, at the election of the Holder, by wire transfer or certified check payable to the order of the Company, in immediately available funds.  Payment of the Exercise Price shall be in lawful money of the United States of America.  The person or persons in whose name(s) any certificate(s) representing Shares shall be issuable upon exercise of this Warrant shall be deemed to have become the holder(s) of record of, and shall be treated for all purposes as the record holder(s) of, the Shares represented thereby (and such Shares shall be deemed to have been issued) immediately prior to the close of business on the date or dates upon which this Warrant is exercised, with the Holder having all rights as a record holder including, but not limited to, all voting rights. 
 

 

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 (B)
 STOCK CERTIFICATES. In the event of any exercise of the rights represented by this Warrant, certificates for the Shares so purchased shall be issued to the beneficiary(ies) named by Holder and shall be delivered to the Holder within twenty (20) business days after said exercise and, unless this Warrant has been fully exercised or has expired, a new Warrant representing the rights to acquire Shares with respect to which this Warrant shall not have been exercised shall also be issued to the Holder within such time. 
 

 3. 
 STOCK FULLY PAID; RESERVATION OF SHARES. All of the Shares issuable upon the exercise of the rights represented by this Warrant will, upon issuance and receipt of the Exercise Price therefore, be fully paid and non-assessable, and free from all preemptive rights, rights of first refusal or first offer, taxes, liens and charges with respect to the issuance thereof. The Company hereby represents and warrants that there have been reserved, and the Company shall at all applicable times keep reserved until issued as contemplated by this Section 3, out of the authorized and unissued Common Stock, 3,896,104 shares to provide for the exercise of the rights of purchase represented by this Warrant.  
 

 4. 
 ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES. Subject to the provisions of Article “2” hereof, the number and kind of Shares purchasable upon the exercise of this Warrant and the Exercise Price therefore shall be subject to adjustment from time to time upon the occurrence of certain events, as follows:
 

 (A) 
 RECLASSIFICATION, CONSOLIDATION OR MERGER. In case of any reclassification of the Common Stock (other than a change in par value, or as a result of a subdivision or combination), or in case of any consolidation or merger of the Company with or into another corporation (other than a consolidation or merger with another corporation in which the Company is a continuing corporation and in which the Company's stockholders immediately preceding such consolidation or merger own at least 50% of the voting securities of the Company following such consolidation or merger and which does not result in any reclassification of the Shares issuable upon exercise of this Warrant), or in case of any sale of all or substantially all of the assets of the Company, the Company, or such successor or purchasing corporation as the case may be, shall execute a new Warrant, providing that the holder of this Warrant shall have the right to exercise such new Warrant, and procure upon such exercise and payment of the same aggregate Exercise Price, in lieu of the Shares theretofore issuable upon exercise of this Warrant, the kind and amount of shares of stock, other securities, money and property receivable upon such reclassification, change, consolidation, sale of all or substantially all of the Company's assets or merger by a holder of an equivalent number of Shares. Such new Warrant shall provide for adjustments that shall be as nearly equivalent as may be practicable to the adjustments provided for in this Paragraph “(A)” of this Article “4” of this Warrant. The provisions of this Paragraph “(A)” of this Article “4” of this Warrant shall similarly apply to successive reclassifications, consolidations, mergers, sales, leases or conveyances.

 (B) 
 STOCK SPLITS, DIVIDENDS AND COMBINATIONS. In the event that the Company shall at any time subdivide the outstanding Shares or issue a stock dividend on its outstanding Shares, the number of Shares issuable upon exercise of this Warrant immediately prior to such subdivision or to the issuance of such stock dividend shall be proportionately increased, and the Exercise Price shall be proportionately decreased, and in the event that the Company shall at any time combine the outstanding Shares, the number of Shares issuable upon exercise of this Warrant immediately prior to such combination shall be proportionately decreased, and the Exercise Price shall be proportionately increased, effective at the close of business on the date of such subdivision, issuance of warrants or options, stock dividend or combination, as the case may be.
 

 (C)
 All calculations under this Article “4” of this Warrant shall be made to the nearest cent or to the nearest share, as the case may be.
 

 

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 (D)
 In any case in which this Article “4” of this Warrant shall require that an adjustment in the number of Shares be made effective as of a record date for a specified event, the Company may elect to defer, until the occurrence of such event, issuing to the Holder, if the Holder exercised this Warrant after such record date, the Shares, if any, issuable upon such exercise over and above the number of Shares issuable upon such exercise on the basis of the number of Shares in effect prior to such adjustment; provided, however, that the Company shall deliver to the Holder a due bill or other appropriate instrument evidencing the Holder’s right to receive such additional Shares upon the occurrence of the event requiring such adjustment.
 

 (E)
 Whenever there shall be an adjustment as provided in this Article “4” of this Warrant, the Company shall within thirty (30) days thereafter cause written notice thereof to be sent to the Holder pursuant to Paragraph “(C)” of Article “12” of this Warrant, which notice shall be accompanied by an officer’s certificate setting forth the number of Shares issuable and the Exercise Price thereof after such adjustment and setting forth a brief statement of the facts requiring such adjustment and the computation thereof, which officer’s certificate shall be conclusive evidence of the correctness of any such adjustment absent manifest error.
 

 (F)
 The Company shall not be required to issue fractions of shares of Common Stock or other capital stock of the Company upon the exercise of this Warrant. If any fraction of a share of Common Stock would be issuable on the exercise of this Warrant (or specified portions thereof), it shall be eliminated by rounding such fraction to the nearest whole integer.
 

 (G)
 No adjustment in the Exercise Price per Warrant shall be required if such adjustment is less than $.001. 
 

 5.
  SHORT SALES. Neither Holder nor any affiliate of the Holder acting on its behalf or pursuant to any understanding with it will execute any short sales of the Company’s stock or warrants.
 

 6. 
  CONDITIONS OF EXERCISE OR TRANSFER OF WARRANT.
 

 (A) 
 Unless exercised pursuant to an effective registration statement under the Act which includes the Shares so exercised, it shall be a condition to any exercise of this Warrant that the Company shall have received, at the time of such exercise, a representation in writing from the recipient that the Shares being issued upon exercise, are being acquired for investment and not with a view to any sale or distribution thereof.
 

 (B) 
 This Warrant and each certificate evidencing the Shares issued upon exercise of this Warrant shall be stamped or imprinted with a legend substantially in the following form:
 

 THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY DISTRIBUTION THEREOF, AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT. 
 

 

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 Subject to this Article “6” of this Warrant, the Company may instruct its transfer agent not to register the transfer of all or a part of this Warrant, or any of the Shares, unless the conditions specified in the above legend are satisfied.
 

 7. 
 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and warrants to the Holder as follows:
 

 (A) 
 This Warrant has been duly authorized and executed by the Company and is a valid and binding obligation of the Company enforceable in accordance with its terms.
 

 (B) 
 When exercisable in accordance with the terms hereof, the Shares will have been duly authorized and reserved for issuance by the Company, validly issued, fully paid and non-assessable.
 

 8. 
 REPRESENTATIONS AND WARRANTIES BY THE HOLDER. The Holder represents and warrants to the Company as follows:
 

 (A) 
 This Warrant is being acquired for its own account, for investment and not with a view to, or for resale in connection with, any distribution or public offering thereof within the meaning of the Act. Upon exercise of this Warrant, the Holder shall, if so requested by the Company, confirm in writing, in a form reasonably satisfactory to the Company, that the Shares issuable upon exercise of this Warrant are being acquired for investment and not with a view toward distribution or resale.
 

 
 (B) 
 Unless advised to the contrary in writing by the Company, the Holder is hereby informed and understands that this Warrant and the Shares have not been registered under the Act by reason of their issuance in a transaction exempt from the registration and prospectus delivery requirements of the Act pursuant to Section 4(a)(2) thereof, and that they must be held by the Holder indefinitely, and that the Holder must therefore bear the economic risk of such investment indefinitely, unless a subsequent disposition thereof is registered under the Act or is exempted from such registration. 
 

 (C) 
 The Holder has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the purchase of this Warrant and the Shares purchasable pursuant to the terms of this Warrant and of protecting its interests in connection therewith.
 

 (D) 
 The Holder is able to bear the economic risk of the purchase of the Shares pursuant to the terms of this Warrant.
 

 9. 
 RIGHTS OF STOCKHOLDERS. No holder of this Warrant shall be entitled, as a warrant holder, to vote or receive dividends or be deemed the holder of Common Stock or any other securities of the Company which may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed to confer upon the holder of this Warrant, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification of stock, change of par value, consolidation, merger, conveyance, or otherwise) or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until the Warrant shall have been exercised and the Shares purchasable upon the exercise hereof shall have become deliverable, as provided herein.
 

 10.
 TRANSFER. Subject to the terms and conditions of this Warrant, including, but not limited to Paragraph “(B)” of Article “6” of this Warrant, this Warrant may be transferred, in whole or in part, by delivering a completed and duly executed Notice of Assignment (attached hereto as Exhibit “B”) to the Company, with such Notice of Assignment stating the individual or entity to whom it shall be transferred (the “Transferee”), and whether such transfer shall be for all rights remaining on the Warrant or only a portion thereof. The Warrants are transferable by Holder on the registry books of the Company or its transfer agent, upon surrender of the original Warrants, duly endorsed or accompanied by proper instrument of transfer satisfactory to the Company or its transfer agent, together with payment of any applicable transfer taxes.  The Company and its transfer agent may deem and treat the person in whose name the Warrants are registered as the holder and as the absolute, true and lawful owner of the Warrants for all purposes, and neither the Company nor its transfer agent shall be affected by any notice or knowledge to the contrary.  In the event of any transfer of rights represented by this Warrant, the Transferee shall receive a Warrant in this form as soon as practicable after the Company receives the Notice of Assignment, and, unless this Warrant has been transferred in full, a new Warrant representing the rights to acquire Shares with respect to which this Warrant shall not have been exercised and which have not been transferred shall also be issued to the Holder 
 

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 11.
 MISCELLANEOUS.
 

 (A)
 Headings contained in this Warrant are for reference purposes only and shall not affect in any way the meaning or interpretation of this Warrant.
 

 (B)
 If any provision which is contained in this Warrant should, for any reason, be held to be invalid or unenforceable in any respect under the laws of any jurisdiction, such invalidity or unenforceability shall not affect any other provision of this Warrant, and this Warrant shall be construed as if such invalid or unenforceable provision had not been contained herein.
 

 (C)
 Any notice or other communication required or permitted hereunder must be in writing and sent by either (i) registered or certified mail, postage prepaid, return receipt requested, (ii) overnight delivery with confirmation of delivery or (iii) facsimile transmission with an original mailed by first class mail, postage prepaid, in each case addressed as follows:
 

 To the Holder:
  To the address of record for the Holder as shown on the registry books maintained by the Company or its transfer agent for the Warrants.
 

 To the Company:                            
 

 Neah Power Systems, Inc.
 22118 20th Avenue SE, Suite 142
 Bothell, Washington, 98021
 Attn: David Schmidt
 dschmidt@neahpower.com
 Facsimile: (425) 483-8454
 

 or in each case to such other address and facsimile number as shall have last been furnished by like notice. If mailing by registered or certified mail is impossible due to an absence of postal service, and if the other methods of sending notice set forth in this Paragraph "(C)" of this Article "11" of this Warrant are not otherwise available, notice shall be in writing and personally delivered to the aforesaid address. Each notice or communication shall be deemed to have been given as of the date so mailed or delivered, as the case may be; provided, however that any notice sent by facsimile shall be deemed to have been given as of the date sent by facsimile if a copy of such notice is also mailed by first class mail on the date sent by facsimile; if the date of mailing differs from the date of sending by facsimile, then the date of mailing by first class mail shall be deemed to be the date upon which notice was given.
 

 (D)
 This Warrant shall in all respects be construed, governed, applied and enforced under with the internal laws of the State of Nevada without giving effect to the principles of conflicts of laws and be deemed to be an agreement entered into in the State of Nevada and made pursuant to the laws of the State of Nevada.
 

 5
 
  
   
  (E) 
 Each of the parties further acknowledges and agrees that (i) each has been advised by counsel during the course of negotiations; (ii) each counsel has had significant input in the development of this Warrant and (iii) this Warrant shall not, therefore, be construed more strictly against any party responsible for its drafting regardless of any presumption or rule requiring construction against the party whose attorney drafted this agreement.
 (F)
 The parties have not made any representations, warranties, or covenants with respect to the subject matter hereof which are not set forth herein, and this Warrant, together with any instruments or other agreements executed simultaneously herewith, constitutes the entire agreement between them with respect to the subject matter hereof. All understandings and agreements heretofore had between the parties with respect to the subject matter hereof are merged in this Warrant and such other instruments and agreements, which alone fully and completely express their agreement. This Warrant may not be changed, modified, extended, terminated or discharged orally, but only by means of a written agreement which is signed by both parties to this Warrant and which explicitly states that it modifies this Warrant. 
 

 (G)
 The parties agree to execute any and all such other further instruments and documents, and to take any and all such further actions which are reasonably required to effectuate this Warrant and the intents and purposes hereof.
 

 (H)
 This Warrant shall be binding upon and inure to the benefit of the parties hereto and their heirs, executors, administrators, personal representatives, successors and assigns.
 

 (I)
 Except as otherwise expressly provided herein, no waiver of any covenant, condition, or provision of this Warrant shall be deemed to have been made unless expressly in writing and signed by the party against whom such waiver is charged; and (i) the failure of any party to insist in any one or more cases upon the performance of any of the provisions, covenants or conditions of this Warrant or to exercise any option herein contained shall not be construed as a waiver or relinquishment for the future of any such provisions, covenants or conditions, (ii) the acceptance of performance of anything required by this Warrant to be performed with knowledge of the breach or failure of a covenant, condition or provision hereof shall not be deemed a waiver of such breach or failure, and (iii) no waiver by any party of one breach by another party shall be construed as a waiver of any other or subsequent breach.
 

 (J)
 All Exhibits annexed or attached to this Warrant are incorporated into this Warrant by reference thereto and constitute an integral part of this Warrant.
 

 (K)
 This Warrant may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
 

 

 [Remainder of Page Intentionally Left Blank; Signature Page Follows]
 

 6
 
 IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly authorized officer.
 

 Issued this 10th day of June, 2014. 
 

 Neah Power Systems, Inc. 
 

 By:_________________________________________
 Name:
 Gerard Christopher D’Couto_____
 Title:
 President and Chief Executive Officer
 

 

 

 7
 
 
   
  
  
 EXHIBIT A
  
 NOTICE OF EXERCISE
  
 Warrant no:                                 
 

  To: Neah Power Systems, Inc.
 

 

 Attention: Chief Financial Officer
 

 1. The undersigned hereby elects to purchase ________ shares of Common Stock of Neah Power Systems, Inc. pursuant to the terms of this Warrant, and tenders herewith payment of the purchase price of such shares in full.
 

 2. Please issue a certificate or certificates representing said shares of Common Stock in the name of the undersigned or in such other name as is specified below: 
 

 

 

 _________________________________ (Name)
 

 _________________________________
 _________________________________ (Address) 
 

 3. The undersigned hereby represents and warrants that the aforesaid shares of Common Stock are being acquired for the account of the undersigned for investment and not with a view to, or for resale, in connection with the distribution thereof, and that the undersigned has no present intention of distributing or reselling such shares and all representations and warranties of the undersigned set forth in the attached Warrant are true and correct as of the date hereof. 
 

 

 ______________________________
 

 By: __________________________
 

 Title: _________________________
 

 Date:________________,_________
 

 8
 
 EXHIBIT B
  
 NOTICE OF ASSIGNMENT
  
 Warrant no:__________________
  
 (To be executed by the registered Holder to effect
  
 a transfer of Warrants)
  
 
 
 FOR VALUE RECEIVED, _______________________ hereby sells, assigns and transfers unto ____________________ the right to purchase ______________ shares of the common stock, par value $.001 per share, of Neah Power Systems, Inc., evidenced by the attached Warrant, together with all right, title and interest therein, and does irrevocably constitute to transfer and appoint ___________________ to transfer the said right on the books of said company with full power of substitution in the premises.
 

 The undersigned hereby certifies that the Warrants are being sold, assigned or transferred in accordance with all applicable securities laws.
 

 Dated:
 ________________
 

 ________________________
 Signature
 

 

 NOTE:  The signature to this transfer must correspond with the name as recorded on the Warrants in every particular without alteration or enlargement or any change whatever.  The signature of the person executing this transfer must be medallion guaranteed.
 

 

 

 

 9

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