THIS
WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAW.  THIS WARRANT AND
SUCH SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE PLEDGED, TRANSFERRED OR
HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION OR DELIVERY OF AN OPINION OF
COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE WITH THE ACT
OR UNLESS SOLD IN FULL COMPLIANCE WITH RULE 144 UNDER THE ACT.

    


    NEPHROS,
INC.

    


    Warrant
for the Purchase of Shares of

    Common
Stock

    


    
      
        	
                No.

              	
                ____________ Shares

              


      

    

    


    FOR VALUE RECEIVED, NEPHROS, INC., a
Delaware corporation (the "Company"), hereby certifies
that _________________, its designee or its permitted assigns is entitled to
purchase from the Company, at any time or from time to time commencing on July
24, 2009 and prior to 5:00 P.M., New York City time, on July 24, 2014 (the
“Exercise Period”),
___________ fully paid and non-assessable shares of common stock of the Company
for a purchase price per share of $1.12.  Hereinafter, (i) said common
stock of the Company, is referred to as the "Common Stock"; (ii) the shares
of the Common Stock (subject to adjustment as set forth herein) purchasable
hereunder or under any other Warrant (as hereinafter defined) are referred to as
the "Warrant Shares";
(iii) the aggregate purchase price payable for the Warrant Shares purchasable
hereunder is referred to as the "Aggregate Warrant Price"; (iv)
the price payable for each of the Warrant Shares hereunder is referred to as the
"Per Share Warrant
Price"; (v) this Warrant, all similar Warrants issued in the private
offering of Common Stock  to which this Warrant relates and all
warrants hereafter issued in exchange or substitution for this Warrant or such
similar Warrants are referred to as the "Warrants"; and (vi) the holder
of this Warrant is referred to as the "Holder" and the holders of
this Warrant and all other Warrants and Warrant Shares issued in the private
offering of Common Stock  to which this Warrant relates are referred
to as the "Holders" and
Holders of more than fifty percent (50%) of the Warrant Shares then issuable
upon exercise of then outstanding Warrants are referred to as the "Majority of the
Holders".


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    1.           Exercise
of Warrant.

     

    (a)           This
Warrant may be exercised in whole at any time, or in part from time to time, by
the Holder during the Exercise Period by the surrender of this Warrant (with the
subscription form at the end hereof duly executed) at the address set forth in
subsection 8(a) hereof, together with proper payment of the Aggregate Warrant
Price, or the proportionate part thereof if this Warrant is exercised in part,
with payment for the Warrant Shares made by certified or official bank check
payable to the order of, or wire transfer of immediately available funds to, the
Company.

    


    (b)           If
this Warrant is exercised in part, this Warrant must be exercised for a number
of whole shares of the Common Stock and the Holder is entitled to receive a new
Warrant covering the Warrant Shares that have not been exercised and setting
forth the proportionate part of the Aggregate Warrant Price applicable to such
Warrant Shares.  Upon surrender of this Warrant in connection with the
exercise of this Warrant pursuant to the terms hereof, the Company will (i)
issue a certificate or certificates in the name of the Holder for the largest
number of whole shares of the Common Stock to which the Holder shall be entitled
upon such exercise and, if this Warrant is exercised in whole, in lieu of any
fractional share of the Common Stock to which the Holder shall be entitled, pay
to the Holder cash in an amount equal to the fair value of such fractional share
(determined in such reasonable manner as the Board of Directors of the Company
shall determine), and (ii) deliver the other securities and properties
receivable upon the exercise of this Warrant, or the proportionate part thereof,
if this Warrant is exercised in part, pursuant to the provisions of this
Warrant.

    


    2.           Reservation
of Warrant Shares; Listing. The Company agrees that, prior to the
expiration of this Warrant, the Company shall at all times (a) have authorized
and in reserve, and shall keep available, solely for issuance and delivery upon
the exercise of this Warrant, the shares of the Common Stock and other
securities and properties as from time to time shall be receivable upon the
exercise of this Warrant, free and clear of all restrictions on sale or
transfer, other than under Federal or state securities laws, and free and clear
of all preemptive rights and rights of first refusal and (b) if the Company
hereafter lists its Common Stock on any national securities exchange, use its
commercially reasonable efforts to keep the Warrant Shares authorized for
listing on such exchange upon notice of issuance.

     

    3.           Certain
Adjustments.

     

    (a)           In
case the Company shall hereafter (i) pay a dividend or make a distribution on
its Common Stock in shares of Common Stock, (ii) subdivide its outstanding
shares of Common Stock into a greater number of shares or (iii) combine or
reverse-split its outstanding shares of Common Stock into a smaller number of
shares, then the Per Share Warrant Price and the number of Warrant Shares shall
forthwith be proportionately decreased and increased, respectively, in the case
of a subdivision, distribution or stock dividend, or proportionately increased
and decreased, respectively, in the case of a combination or reverse stock
split.  The Aggregate Warrant Price payable for the then total number
of Warrant Shares available for exercise under this Warrant shall remain the
same.  Adjustments made pursuant to this subsection 3(a) shall become
effective on the record date in the case of a dividend or distribution, and
shall become effective immediately after the effective date in the case of a
subdivision, combination or reclassification.  If such dividend,
distribution, subdivision or combination is not consummated in full, the Per
Share Warrant Price and Warrant Shares shall be readjusted
accordingly.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    (b)           In
case of any capital reorganization or reclassification, or any consolidation or
merger, or any sale, transfer or other disposition of all or substantially all
of its property, assets or shares to which the Company is a
party,  the Holder of this Warrant shall have the right thereafter to
receive on the exercise of this Warrant the kind and amount of securities, cash
or other property which the Holder would have owned or have been entitled to
receive immediately after such reorganization, reclassification, consolidation,
merger or reorganization had this Warrant been exercised immediately prior to
the effective date of such transaction and in any such case, if necessary,
appropriate adjustment shall be made in the application of the provisions set
forth in this Section 3 with respect to the rights and interests thereafter of
the Holder of this Warrant to the end that the provisions set forth in this
Section 3 shall thereafter correspondingly be made applicable, as nearly as may
reasonably be, in relation to any shares of stock or other securities or
property thereafter deliverable on the exercise of this Warrant.  The
above provisions of this subsection 3(b) shall similarly apply to successive
reorganizations, reclassifications, consolidations, mergers or other
dispositions.  The Company shall require the issuer of any shares of
stock or other securities or property thereafter deliverable on the exercise of
this Warrant to be responsible for all of the agreements and obligations of the
Company hereunder.  Notice of any such reorganization,
reclassification, consolidation or merger, shall be mailed to the Holders of
Warrants not less than twenty (20) days prior to such event.

     

    (c)           No
adjustment in the Per Share Warrant Price shall be required unless such
adjustment would require an increase or decrease of at least  $0.01
per share of Common Stock; provided, however, that any
adjustments which by reason of this subsection 3(c) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment;
provided, further, however,
that adjustments shall be required and made in accordance with the provisions of
this Section 3 (other than this subsection 3(c)) not later than such time as may
be required in order to preserve the tax-free nature of a distribution, if any,
to the Holder of this Warrant or Common Stock issuable upon the exercise
hereof.  All calculations under this Section 3 shall be made to the
nearest cent or to the nearest 1/100th of a share, as the case may
be.  Anything in this Section 3 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Per Share Warrant
Price, in addition to those required by this Section 3, as it in its discretion
shall deem to be advisable in order that any stock dividend, subdivision of
shares or distribution of rights to purchase stock or securities convertible or
exchangeable for stock hereafter made by the Company to its stockholders shall
not be taxable.

     

    (d)           Whenever
the Per Share Warrant Price or the number of Warrant Shares is adjusted as
provided in this Section 3 and upon any modification of the rights of a Holder
of Warrants in accordance with this Section 3, the Company shall promptly
prepare a brief statement of the facts requiring such adjustment or modification
and the manner of computing the same and cause copies of such certificate to be
mailed to the Holders of the Warrants.  The Company may, but shall not
be obligated to unless requested by a Majority of the Holders, obtain, at its
expense, a certificate of a firm of independent public accountants of recognized
standing selected by the Board of Directors (who may be the regular auditors of
the Company) setting forth the Per Share Warrant Price and the number of Warrant
Shares in effect after such adjustment or the effect of such modification, a
brief statement of the facts requiring such adjustment or modification and the
manner of computing the same and cause copies of such certificate to be mailed
to the Holders of the Warrants.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    (e)           If
the Board of Directors of the Company shall declare any dividend or other
distribution with respect to the Common Stock, the Company shall mail notice
thereof to the Holders of the Warrants not less than twenty (20) days prior
to the record date fixed for determining stockholders entitled to participate in
such dividend or other distribution.

     

    (f)   
        If, as a result of an adjustment
made pursuant to this Section 3, the Holder of any Warrant thereafter
surrendered for exercise shall become entitled to receive shares of two or more
classes of capital stock or shares of Common Stock and other capital stock of
the Company, the Board of Directors (whose determination shall be conclusive and
shall be described in a written notice to the Holder of any Warrant promptly
after such adjustment) shall determine, in good faith, the allocation of the
adjusted Per Share Warrant Price between or among shares or such classes of
capital stock or shares of Common Stock and other capital stock.

    


    4.           Fully
Paid Stock; Taxes.  The shares of the Common Stock represented
by each and every certificate for Warrant Shares delivered on the exercise of
this Warrant shall, at the time of such delivery, be duly authorized, validly
issued and outstanding, fully paid and nonassessable, and not subject to
preemptive rights or rights of first refusal imposed by any agreement to which
the Company is a party, and the Company will take all such actions as may be
necessary to assure that the par value, if any, per share of the Common Stock is
at all times equal to or less than the then Per Share Warrant
Price.  The Company shall pay, when due and payable, any and all
Federal and state stamp, original issue or similar taxes which may be payable in
respect of the issue of any Warrant Share or any certificate thereof to the
extent required because of the issuance by the Company of such
security.

     

    5.           Investment
Intent; Limited Transferability.

    


    (a)           By
accepting this Warrant, the Holder represents to the Company that it understands
that this Warrant and any securities obtainable upon exercise of this Warrant
have not been registered for sale under Federal or state securities laws and are
being offered and sold to the Holder pursuant to one or more exemptions from the
registration requirements of such securities laws.  In the absence of
an effective registration of such securities or an exemption therefrom, any
certificates for such securities shall bear the legend set forth on the first
page hereof.  The Holder understands that it must bear the economic
risk of its investment in this Warrant and any securities obtainable upon
exercise of this Warrant for an indefinite period of time, as this Warrant and
such securities have not been registered under Federal or state securities laws
and therefore cannot be sold unless subsequently registered under such laws,
unless an exemption from such registration is available.  The Holder
further represents to the Company, by accepting this Warrant, that it has full
power and authority to accept this Warrant and make the representations set
forth herein.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    (b)           The
Holder, by its acceptance of this Warrant, represents to the Company that it is
acquiring this Warrant and will acquire any securities obtainable upon exercise
of this Warrant for its own account for investment and not with a view to, or
for sale in connection with, any distribution thereof in violation of the
Act.  The Holder agrees, by acceptance of this Warrant, that this
Warrant and any such securities issuable under this Warrant will not be sold or
otherwise transferred unless (i) a registration statement with respect to such
transfer is effective under the Act and any applicable state securities laws or
(ii) such sale or transfer is made pursuant to one or more exemptions from the
registration requirements of the Act.

    


    (c)           In
addition to the limitations set forth in Section 1 and in accordance with the
legend on the first page hereof, this Warrant may not be sold, transferred,
assigned or hypothecated by the Holder except in compliance with the provisions
of the Act and the applicable state securities “blue sky” laws, and is so
transferable only upon the books of the Company which it shall cause to be
maintained for such purpose. The Company may treat the registered Holder of this
Warrant as it appears on the Company's books at any time as the Holder for all
purposes.  The Company shall permit any Holder of a Warrant or its
duly authorized attorney, upon written request during ordinary business hours,
to inspect and copy or make extracts from its books showing the registered
Holder of this Warrant.  All Warrants issued upon the transfer or
assignment of this Warrant will be dated the same date as this Warrant, and all
rights of the holder thereof shall be identical to those of the Holder unless,
in each case, otherwise prohibited by applicable law.

    


    6.           Loss,
etc., of Warrant.  Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant, and of indemnity reasonably satisfactory to the Company, if lost,
stolen or destroyed, and upon surrender and cancellation of this Warrant, if
mutilated, the Company shall execute and deliver to the Holder a new Warrant of
like date, tenor and denomination.

    


    7.           Warrant
Holder Not Stockholder.  This Warrant does not confer upon the
Holder any right to vote on or consent to or receive notice as a stockholder of
the Company, as such, in respect of any matters whatsoever, nor any other rights
or liabilities as a stockholder, prior to the exercise hereof; this Warrant
does, however, require certain notices to Holders as set forth
herein.

    


    8.           Communication.  No
notice or other communication under this Warrant shall be effective or deemed to
have been given unless, the same is in writing and is mailed by first-class
mail, postage prepaid, or via recognized overnight courier with confirmed
receipt, addressed to:

    


    (a)           the
Company at Nephros, Inc., 41 Grand Avenue, River
Edge, NJ 07661, Attn: Chief Executive Officer, or other such address as
the Company has designated in writing to the Holder; or

    


    (b)           the
Holder at the address of the Holder set forth in the Subscription Agreement, or
other such address as the Holder has designated in writing to the
Company.

    


    9.           Headings.  The
headings of this Warrant have been inserted as a matter of convenience and shall
not affect the construction hereof.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    10.           Applicable
Law.  This Warrant shall be governed by and construed in
accordance with the law of the State of New York without giving effect to the
principles of conflicts of law thereof.

    


    11.           Amendment,
Waiver, etc.  Except as expressly provided herein, neither this
Warrant nor any term hereof may be amended, waived, discharged or terminated
other than by a written instrument signed by the party against whom enforcement
of any such amendment, waiver, discharge or termination is sought; provided,
however, that any provisions hereof may be amended, waived, discharged or
terminated upon the written consent of the Company and the Majority of the
Holders.

    


    *  *  *  *  *


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    IN WITNESS WHEREOF, the
Company has caused this Warrant to be signed by the undersigned duly authorized
officer, this 24th day of July, 2009.

    


    
      
        
          	 
      	
                  NEPHROS,
      INC.

                
	 
      	 
      
	 
      	
                  By:

                	 
      
	 
      	 
      	
                  Ernest
      Elgin, CEO

                


        

      

    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    SUBSCRIPTION

    


    The undersigned, ___________________,
pursuant to the provisions of the foregoing Warrant, hereby agrees to subscribe
for and purchase ____________________ shares of the Common Stock of Nephros,
Inc. covered by said Warrant, and makes payment therefor in full at the price
per share provided by said Warrant.

    


    
      
        
          
            
              
                	
                        Dated:

                      	 	 
      	 
      	
                        Signature:

                      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                        Address:

                      	 
      


              

            

          

        

      

    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    ASSIGNMENT

    


    FOR VALUE RECEIVED _______________
(“Assignor”) hereby sells, assigns and transfers unto ____________________
(“Transferee”) the foregoing Warrant and all rights evidenced thereby, and does
irrevocably constitute and appoint _____________________, attorney, to transfer
said Warrant on the books of Nephros, Inc.  By acceptance of the
foregoing Warrant, Transferee shall become a Holder under said Warrant and
subject to the rights, obligations and representations of Holder set forth in
said Warrant.

    


    ASSIGNOR:

     

    
      	
              Dated:

            	 	 
      	 
      	
              Signature:

            	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
              Address:

            	 
      


    

     

    TRANSFEREE:

     

    
      	
              Dated:

            	 	 
      	 
      	
              Signature:

            	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
              Address:

            	 
      


    

     

    PARTIAL
ASSIGNMENT

    


    FOR VALUE RECEIVED _______________
(“Assignor”) hereby assigns and transfers unto ____________________
(“Transferee”) the right to purchase _______ shares of Common Stock of Nephros,
Inc. covered by the foregoing Warrant, and a proportionate part of said Warrant
and the rights evidenced thereby, and does irrevocably constitute and appoint
____________________, attorney, to transfer such part of said Warrant on the
books of Nephros, Inc.  By acceptance of the proportionate part of
foregoing Warrant, Transferee shall become a Holder under said proportionate
part of said Warrant and subject to the rights, obligations and representations
of Holder set forth in said Warrant.

    


    ASSIGNOR:

     

    
      	
              Dated:

            	 	 
      	 
      	
              Signature:

            	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
              Address:

            	 
      


    

     

    TRANSFEREE:

     

    
      	
              Dated:

            	 	 
      	 
      	
              Signature:

            	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
              Address: