AMENDMENT NO. 3 TO AGREEMENT AND PLAN OF MERGER

THIS AMENDMENT NO. 3 (the “Amendment”) to the Agreement and Plan of Merger, dated as of December 20, 2014, by and among Shorai, Inc., a Nevada corporation (the “Company”), Neah Power Systems, Inc., a Nevada Corporation (“Parent”), Neah Merger Corp., a Nevada corporation, Neah Merger Corp. II, a Nevada corporation, and the stockholders of the Company listed on Schedule A thereto (as amended by that certain Amendment to Agreement and Plan of Merger dated as of March 4, 2015, and that certain Amendment No. 2 to Agreement and Plan of Merger dated as of April 17, 2015, the “Agreement”), is effective as of May __, 2015.  Capitalized terms used but not defined in this Amendment shall have the meanings ascribed to them in the Agreement.  

W I T N E S S E T H:

WHEREAS, the parties to the Agreement wish to amend certain provisions of the Agreement; and

WHEREAS, the Agreement may not be amended or modified except by an instrument in writing approved by the parties to the Agreement and signed on behalf of each of the parties thereto.

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree and acknowledge that the Agreement remains in full force and effect and enforceable against each of the parties as modified by this Amendment, and to amend the Agreement and provide for additional payments as set forth below:

1.

Amendments to Agreement.

(a)

Section 2.1(c) of the Agreement is hereby amended by deleting “May 14, 2015” and replacing it with “June 15, 2015.”

(b)

Section 8.1 of the Agreement is hereby amended by deleting “May 14, 2015” where it appears in each of Subsections 8.1(b)(i), 8.1(c)(i), and 8.1(d), and replacing it in each such Subsection with “June 15, 2015.”  

2.

Acknowledgment.  Parent hereby acknowledges that:

(a) the Company has attained the Milestone described in Section 2.5(b) of the Agreement and as a result no Parent Shares payable to the Company pursuant to Section 2.5(a)(ii) are or will be subject to forfeiture thereunder; and

(b) the closing price of the Parent Common Stock (as reported on the OTC BB) was not at or above $0.015 for any 10 consecutive trading days during the Reset Period and, therefore, in accordance with Section 2.5(a)(ii) of the Agreement, the Conversion Rate is adjusted to $0.0175.

Company hereby acknowledges that: