Exhibit 10.1





 


SEPARATION AGREEMENT AND GENERAL RELEASE


 


This Separation Agreement
and General Release (this “Agreement”) is made by and between John C. Houghton (“Employee”) and Nephros,
Inc., its predecessors, successors, parent corporations, subsidiaries, affiliates and employee benefit plans, and each of their
employees, officers and directors and fiduciaries (the “Company”);


 


1.The Employee and
the Company hereby agree and recognize that the Employee’s employment with the Company has terminated effective January 4,
2015 (the “Effective Date”) as a result of a mutual decision for the Employee to voluntarily resign from his employment.
Except as set forth herein, the Employee is entitled to no further compensation or benefits from the Company. Notwithstanding the
foregoing, although the parties have agreed to treat Employee’s separation as a voluntary resignation, the Company agrees
to respond to any inquiry in connection with the Employee’s application for unemployment insurance benefits by informing
the Department of Labor that the Employee’s separation of employment was not at the Employee’s initiative and was the
result of a mutual negotiation.


 


2.The Employee agrees
and recognizes that his employment with the Company has been permanently and irrevocably severed. In consideration of the severance
payments representing six-months of Employee’s salary ($175,000) to be made to the Employee from the Company, the Employee
further agrees (i) that he will not seek employment or re-employment with the Company at any time in the future, and that the Company
has no obligation to employ or re-employ him or otherwise consider him for employment, and (ii) to continue to be bound by and
comply with Sections 5, 6 and 7 of the Employment Agreement dated April 20, 2012 (the “Employment Agreement”) between
the Company and the Employee. The Company also acknowledges the parties continue to be bound by Sections 4.7, 9.4, and 9.5 of the
Employment Agreement. These severance payments (minus required withholdings) shall be paid periodically in accordance with the
Company’s normal payroll policies. Further, the Company hereby agrees that Employee shall be permitted to exercise any and
all of his vested unexpired stock options for ninety (90) days following the Effective Date.


 






    	 



    	 



    

 


3.The Employee and
the Company agree and acknowledge that this Agreement shall not be construed as an admission or acknowledgment of any wrongdoing
or liability by the Company, the same being expressly denied.


 


4.The Employee hereby
agrees to release the Company from any and all claims or causes of action he may have or claim to have against the Company (whether
known or unknown), including without limitation any and all claims arising out of or relating in any way to the Employee’s
employment with and/or separation of employment from the Company, including any and all claims under the Employment Agreement.
The claims against the Company which the Employee hereby releases include, but are not limited to:


 


			(a) all statutory claims including claims arising under the New Jersey Law Against Discrimination,
the Conscientious Employee Protection Act, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act,
the Americans With Disabilities Act, the Family and Medical Leave Act, the Genetic Information Nondiscrimination Act, the New Jersey
Family Leave Act, the New Jersey Civil Rights Act, the Rehabilitation Act, the Employee Retirement Income Security Act, the Sarbanes-Oxley
Act, and any other federal or state law that governs the Employee’s employment relationship with the Company and/or prohibits
discrimination on the basis of, among other things, age, color, race, religion, sex, sexual preference/orientation, marital status,
national origin, disability or veteran status;



 


			(b) all claims arising under the United States or New Jersey Constitutions;



 


			(c) all claims arising under any Executive Order or derived from or based upon any state and federal
regulations;



 


			(d) all common law claims including claims for wrongful discharge, public policy claims, retaliation
claims, whistleblower claims, claims for breach of an express or implied contract, claims for breach of an implied covenant of
good faith and fair dealing, intentional infliction of emotional distress, defamation, conspiracy, loss of consortium, tortious
interference with contract or prospective economic advantage, and negligence;



 






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			(e) all claims for any compensation including back wages, front pay, bonuses or awards, fringe
benefits, reinstatement, retroactive seniority, pension benefits, or any other form of economic loss;



 


			(f) all claims for personal injury, including physical injury, mental anguish, emotional distress,
pain and suffering, embarrassment, humiliation, damage to name or reputation, liquidated damages, and punitive damages; and



 


			(g) all claims for costs and attorneys' fees.



 


5.The Employee represents
that he has not filed any grievance, charge, claim, or complaint of any kind seeking personal recovery or personal injunctive relief
against the Company or any of its owners, employees or agents, with respect to any matter, including but not limited to, his employment
with the Company and/or the separation of that employment. Nothing contained in this paragraph shall prohibit the Employee from
(a) bringing any action to enforce the terms of this Agreement; (b) filing a timely charge or complaint with the Equal Employment
Opportunity Commission (“EEOC”) regarding the validity of this Agreement; (c) filing a timely charge or complaint with
the EEOC or participating in any investigation or proceeding conducted by the EEOC regarding any claim of employment discrimination
(although the Employee has waived any right to personal recovery or personal injunctive relief in connection with any such charge
or complaint).


 


6.The Employee agrees to maintain
in confidence and not to disclose the terms of this Agreement (including, but not limited to, statements to present and/or former
employees of the Company). However, it shall not be considered a breach of the obligation of confidentiality for the Employee to
make disclosure of the terms of this Agreement in order to obtain private and confidential legal, tax or financial advice, or to
respond to any inquiry from any governmental entity or agency regarding a tax filing, in connection with an application for unemployment
insurance benefits, or as otherwise required by law.


 






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7. This Agreement does not waive
or release any rights or claims which may arise after the date the Employee signs this Agreement. This Agreement also does not
waive or release any rights or entitlement to vested benefits under any pension, retirement or 401(k) savings plan, for reimbursement
of any medical expenses which the Employee has incurred and for which the Employee has submitted a claim under a medical plan sponsored
by the Company, or for any unreimbursed travel and business expenses, for which the Employee agrees to provide appropriate documentation
in accordance with Company policy within ten (10) days after the Effective Date and the Company will reimburse the Employee on
the next regularly scheduled paydate thereafter consistent with the Company’s normal payroll policies.


 


8.The Employee acknowledges that
the only consideration he has received for executing this Agreement is that set forth herein. No other promise, inducement, threat,
agreement, or understanding of any kind or description has been made with him or to him to cause him to enter into this Agreement.


 


9.The Employee states
that he has had the opportunity to discuss this Agreement with whomever he wished, including an attorney of his own choosing. The
Employee states that: he has had an opportunity to read, review and consider all of the provisions of this Agreement; he understands
its provisions and its final and binding effect on him; and he is accepting the benefits offered to him and is entering into this
Agreement freely, voluntarily, and without duress or coercion.


 






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10. The Employee
understands that he has twenty-one (21) days in which to review and consider this Agreement before signing it. The Employee also
understands that he is free to use as much of the twenty-one (21) day period as he wishes or considers necessary before deciding
to sign the Agreement. The Employee may revoke his signing of this Agreement within seven (7) days by delivering written notice
of revocation to Paul Mieyal, Acting President, Acting CEO, Acting CFO, and Acting Secretary, Nephros, Inc., 41 Grand Ave., River
Edge, NJ 07661. If the Employee does not execute this Agreement, or if he does execute this Agreement but then timely revokes his
signature on this Agreement, then the consideration described above will be forfeited without further action. If the Employee does
not revoke his signature on this Agreement by written notice delivered within the seven (7) day period, it becomes effective immediately
thereafter.


 


The undersigned have
read and fully understand the terms and conditions of this Agreement and have voluntarily signed their names below.


 





	JOHN C. HOUGHTON	 	NEPHROS, INC 
	 	 	 
	/s/
    John Houghton	 	By:  	/s/ Paul Mieyal
	John C. Houghton 	 	Paul Mieyal
	 	 	Acting President, Acting CEO, Acting
    CFO
	 	 	and Acting Secretary
	 	 	 
	Dated: January 4, 2015	 	Dated: January 4, 2015




 






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