Exhibit 4.1


 





NEPHROS,
Inc.


 


Warrant
AMENDMENT AND EXERCISE Agreement


 


 


THIS WARRANT AMENDMENT
AND EXERCISE AGREEMENT (this “Amendment”) is entered into as of September 29, 2015 (the “Effective
Date”), by and between Nephros, Inc. (the “Company”), and Lambda Investors LLC (the “Holder”).


 


WHEREAS, the Company
issued to the Holder that certain Class D Warrant for the Purchase of Shares of Common Stock dated November 14, 2007, and identified
as Warrant No. D-1 (together with all amendments thereto entered into prior to the date hereof, the “Warrant”),
which currently provides Holder with the right to purchase 11,742,100 shares of the Company’s common stock (the “Warrant
Shares”) at a per share exercise price of $0.30 (the “Exercise Price”);


 


WHEREAS, the Company
is in need of capital, and Company has determined that, a the current time, incentivizing all its warrant holders to exercise their
options provides the Company with the best source of capital available to it;


 


WHEREAS, as an inducement
to Holder to exercise the Warrant, the Company has offered to reduce the current Exercise Price of the Warrant by fifty percent
(50%) and to offer the same terms and conditions to the Company’s other warrant holders, as set forth more fully herein;
and


 


WHEREAS, the Company
and the Holder desire to enter into this Amendment on the terms and conditions set forth below.


 


NOW, THEREFORE, in
consideration of the mutual covenants and agreements contained herein, the Company and the Holder hereby agree as follows:


 


1.                 
Exercise Price. The Exercise Price is hereby reduced by fifty percent (50%), to $0.15 per share.


 


2.                 
Exercise of Warrant. Holder agrees to exercise, and hereby does exercise, the entirety of the purchase rights represented
by the Warrant to purchase 11,742,100 Warrant Shares at the Exercise Price (as amended by Paragraph 1 of this Amendment), for an
aggregate cash payment of $1,761,315.00. Holder shall remit to the Company on the date hereof the aggregate Exercise Price for
such Warrant Shares to the Company in immediately available cash (and not on a cashless exercise basis). Upon receipt of such payment,
the Company will cause its transfer agent to issue the Warrant Shares to Holder. Upon such exercise of the Warrant in accordance
with the terms of this Amendment, the parties acknowledge and agree that the Warrant shall terminate in its entirety and Holder
shall have no further rights thereunder (other than with respect to its right to receive Warrant Shares in accordance with this
Amendment).


 


3.                 
Offer to Other Warrant Holders. The Company hereby agrees and covenants to Holder that, as promptly as practicable,
it will offer to all the other holders of warrants to purchase shares of the Company’s common stock the opportunity to exercise
their warrants at an exercise price that is equal to fifty percent (50%) of the current exercise price of such warrants, and the
Company shall hold such offer open for period of no more than forty five (45) days.


 






     


     


    

 


 


4.                 
Securities Matters. Holder represents to the Company that it is an “accredited investor” as that term
is defined in Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended.


 


5.                 
Incorporation of Terms. All of the provisions of this Amendment are hereby incorporated into the Warrant, so that
all of such provisions shall constitute a part of the Warrant. In the event of any conflict or inconsistency between the provisions
of this Amendment, on the one hand, and the provisions of the Warrant, on the other hand, the provisions of this Amendment shall
be controlling.


 


6.                 
Limited Effect. Except as expressly amended and modified by this Amendment, the Warrant shall continue to be, and
shall remain, in full force and effect in accordance with its terms. Reference to this Amendment need not be made in the Warrant
or any other instrument or document executed in connection therewith, or in any certificate, letter or communication issued or
made pursuant to, or with respect to, the Warrant, any reference in any of such items to the Warrant being sufficient to refer
to the Warrant as amended hereby.


 


7.                 
Governing Law. This Amendment shall be governed by and construed in accordance with the internal laws of the State
of Delaware without regard to conflict of laws principles.


 


8.                 
Counterparts. This Amendment may be executed in any number of counterparts, each of which shall constitute an original,
but all of which together shall constitute one and the same instrument.


 


[Signature page follows.]


 






     


     


    

 


 





IN WITNESS WHEREOF,
the undersigned have executed this Amendment as of the date first written above.


 


 





NEPHROS, INC.


 


 





By:  /s/ Daron Evans





Name: Daron Evans





Title: Chief Executive Officer


 







 


LAMBDA
INVESTORS LLC


 


 


By:  /s/ Arthur Amron


Name:
Arthur Amron


Title:
Vice President and Assistant Secretary