Exhibit 4.1


 


NEITHER THESE SECURITIES NOR THE SECURITIES
ISSUABLE UPON EXERCISE OF THESE SECURITIES HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION
OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY.


 


NEPHROS, INC.


 


WARRANT TO PURCHASE COMMON STOCK


 


	Warrant No. 2015-[●]	 	Original Issue Date: May [●], 2015


 


Nephros, Inc., a Delaware corporation
(the “Company”), hereby certifies that, for value received, [●] or its permitted registered assigns (the
“Holder”), is entitled to purchase from the Company up to a total of [●] shares of common stock, $0.001
par value (the “Common Stock”), of the Company (each such share, a “Warrant Share” and all
such shares, the “Warrant Shares”) at an exercise price per share equal to $0.85 (as adjusted from time to time
as provided in Section 9 herein, the “Exercise Price”), at any time and from time to time from on or after the
date hereof (the “Trigger Date”) and through and including 5:30 P.M., New York City time, on May [●], 2020 (the
“Expiration Date”), and subject to the following terms and conditions:


 


This Warrant (this “Warrant”)
is one of a series of similar warrants issued pursuant to that certain Securities Purchase Agreement, dated May 12, 2015, by and
among the Company and the Purchasers identified therein (the “Purchase Agreement”). All such warrants are referred
to herein, collectively, as the “Warrants.”


 


1.          Definitions.
In addition to the terms defined elsewhere in this Warrant, capitalized terms that are not otherwise defined herein have the meanings
given to such terms in the Purchase Agreement.


 


2.          
Registration of Warrants. The Company shall register this Warrant, upon records to be maintained by the Company for that
purpose (the “Warrant Register”), in the name of the record Holder (which shall include the initial Holder or,
as the case may be, any registered assignee to which this Warrant is permissibly assigned hereunder) from time to time. The Company
may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or
any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.


 




    	 



    	 



    




3.          
Registration of Transfers. Subject to the restrictions on transfer set forth in Section 4.1 of the Purchase Agreement and
compliance with all applicable securities laws, the Company shall register the transfer of all or any portion of this Warrant in
the Warrant Register, upon (i) surrender of this Warrant, with the Form of Assignment attached as Schedule 2 hereto duly
completed and signed, to the Company’s transfer agent or to the Company at its address specified herein and (ii) if the Registration
Statement is not effective, (x) delivery, at the request of the Company, of an opinion of counsel reasonably satisfactory to the
Company to the effect that the transfer of such portion of this Warrant may be made pursuant to an available exemption from the
registration requirements of the Securities Act and all applicable state securities or blue sky laws and (y) delivery by the transferee
of a written statement to the Company certifying that the transferee is an “accredited investor” as defined in Rule
501(a) under the Securities Act and making the representations and certifications set forth in Section 3.2(b), (c) and (d) of the
Purchase Agreement, to the Company at its address specified in the Purchase Agreement. Upon any such registration or transfer,
a new warrant to purchase Common Stock in substantially the form of this Warrant (any such new warrant, a “New Warrant”)
evidencing the portion of this Warrant so transferred shall be issued to the transferee, and a New Warrant evidencing the remaining
portion of this Warrant not so transferred, if any, shall be issued to the transferring Holder. The acceptance of the New Warrant
by the transferee thereof shall be deemed the acceptance by such transferee of all of the rights and obligations of a Holder of
a Warrant.


 


4.           Exercise
and Duration of Warrants.


 


(a)          All
or any part of this Warrant shall be exercisable by the registered Holder at any time and from time to time on or after the Trigger
Date and through and including 5:30 P.M. New York City time on the Expiration Date. Subject to Section 11 hereof (unless
intentionally omitted), at 5:30 P.M., New York City time, on the Expiration Date, the portion of this Warrant not exercised prior
thereto shall be and become void and of no value and this Warrant shall be terminated and no longer outstanding;


 


(b)          The
Holder may exercise this Warrant by delivering to the Company (i) an exercise notice, in the form attached as Schedule 1
hereto (the “Exercise Notice”), appropriately completed and duly signed and (ii) payment of the Exercise Price
in immediately available funds for the number of Warrant Shares as to which this Warrant is being exercised, and the date such
items are delivered to the Company (as determined in accordance with the notice provisions hereof) is an “Exercise Date.”
The delivery by (or on behalf of) the Holder of the Exercise Notice and the applicable Exercise Price as provided above shall constitute
the Holder’s certification to the Company that its representations contained in Section 3.2(b), (c) and (d) of the Purchase
Agreement are true and correct as of the Exercise Date as if remade in their entirety (or, in the case of any transferee Holder
that is not a party to the Purchase Agreement, such transferee Holder’s certification to the Company that such representations
are true and correct as to such assignee Holder as of the Exercise Date). The Holder shall not be required to deliver the original
Warrant in order to effect an exercise hereunder. Execution and delivery of the Exercise Notice shall have the same effect as cancellation
of the original Warrant and issuance of a New Warrant evidencing the right to purchase the remaining number of Warrant Shares.


 




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5.           Delivery
of Warrant Shares. 


 


(a)          Upon
exercise of this Warrant, the Company shall promptly (but in no event later than three Trading Days after the Exercise Date) issue
or cause to be issued and cause to be delivered to or upon the written order of the Holder and in such name or names as the Holder
may designate (provided that, if the Registration Statement is not effective and the Holder directs the Company to deliver a certificate
for the Warrant Shares in a name other than that of the Holder or an Affiliate of the Holder, it shall deliver to the Company on
the Exercise Date an opinion of counsel reasonably satisfactory to the Company to the effect that the issuance of such Warrant
Shares in such other name may be made pursuant to an available exemption from the registration requirements of the Securities Act
and all applicable state securities or blue sky laws), a certificate for the Warrant Shares issuable upon such exercise, free of
restrictive legends, unless a registration statement covering the resale of the Warrant Shares and naming the Holder as a selling
stockholder thereunder is not then effective or the Warrant Shares are not freely transferable pursuant to Rule 144 under the Securities
Act pursuant to transactions in which paragraph (c)(1) of such rule do not apply. The Holder, or any Person permissibly so designated
by the Holder to receive Warrant Shares, shall be deemed to have become the holder of record of such Warrant Shares as of the Exercise
Date. If the Warrant Shares are to be issued free of all restrictive legends, the Company shall, upon the written request of the
Holder, use its best efforts to deliver, or cause to be delivered, Warrant Shares hereunder electronically through The Depository
Trust Company or another established clearing corporation performing similar functions, if available; provided, that, the Company
may, but will not be required to, change its transfer agent if its current transfer agent cannot deliver Warrant Shares electronically
through such a clearing corporation.


 


(b)          If
(1) a certificate representing the Warrant Shares is not delivered to the Holder within three (3) Trading Days of the due exercise
of this Warrant by the Holder and (2) prior to the time such certificate is received by the Holder, the Holder, or any third party
on behalf of the Holder or for the Holder’s account, purchases (in an open market transaction or otherwise) shares of Common
Stock to deliver in satisfaction of a sale by the Holder of shares represented by such certificate (a “Buy-In”),
then the Company shall pay in cash to the Holder (for costs incurred either directly by such Holder or on behalf of a third party)
the amount by which the total purchase price paid for Common Stock as a result of the Buy-In (including brokerage commissions,
if any) exceeds the proceeds received by such Holder as a result of the sale to which such Buy-In relates. The Holder shall provide
the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company,
evidence of the amount of such loss.


 


6.          Charges,
Taxes and Expenses. Issuance and delivery of certificates for shares of Common Stock upon exercise of this Warrant shall be
made without charge to the Holder for any issue or transfer tax, transfer agent fee or other incidental tax or expense in respect
of the issuance of such certificates, all of which taxes and expenses shall be paid by the Company; provided, however, that
the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the registration of
any certificates for Warrant Shares or Warrants in a name other than that of the Holder or an Affiliate thereof. The Holder shall
be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant
Shares upon exercise hereof.


 




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7.          
Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be
issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant,
but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction (in such case) and,
in each case, a customary and reasonable indemnity (which shall not include a surety bond), if requested. Applicants for a New
Warrant under such circumstances shall also comply with such other reasonable regulations and procedures and pay such other reasonable
third-party costs as the Company may prescribe. If a New Warrant is requested as a result of a mutilation of this Warrant, then
the Holder shall deliver such mutilated Warrant to the Company as a condition precedent to the Company’s obligation to issue
the New Warrant.


 


8.          
Reservation of Warrant Shares. The Company covenants that it will at all times reserve and keep available out of the aggregate
of its authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares
upon exercise of this Warrant as herein provided, the number of Warrant Shares which are then issuable and deliverable upon the
exercise of this entire Warrant, free from preemptive rights or any other contingent purchase rights of persons other than the
Holder (taking into account the adjustments and restrictions of Section 9). The Company covenants that all Warrant Shares
so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms
hereof, be duly and validly authorized, issued and fully paid and nonassessable. The Company will take all such action as may be
necessary to assure that such shares of Common Stock may be issued as provided herein without violation of any applicable law or
regulation, or of any requirements of any securities exchange or automated quotation system upon which the Common Shares may be
listed.


 


9.          Certain
Adjustments. The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment
from time to time as set forth in this Section 9.


 


(a)          Stock
Dividends and Splits. If the Company, at any time while this Warrant is outstanding, (i) pays a stock dividend on its Common
Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides
its outstanding shares of Common Stock into a larger number of shares, or (iii) combines its outstanding shares of Common Stock
into a smaller number of shares, then in each such case the Exercise Price shall be multiplied by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding immediately before such event and the denominator of which shall
be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to clause (i) of
this paragraph shall become effective immediately after the record date for the determination of stockholders entitled to receive
such dividend or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately
after the effective date of such subdivision or combination.


 




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(b)          
Fundamental Transactions. If, at any time while this Warrant is outstanding (i) the Company effects any merger or consolidation
of the Company with or into another Person, in which the shareholders of the Company as of immediately prior to the transaction
own less than a majority of the outstanding stock of the surviving entity, (ii) the Company effects any sale of all or substantially
all of its assets or a majority of its Common Stock is acquired by a third party, in each case, in one or a series of related transactions,
(iii) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which all or substantially
all of the holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property and
would result in the shareholders of the Company immediately prior to such tender offer or exchange offer owning less than a majority
of the outstanding stock after such tender offer or exchange offer, or (iv) the Company effects any reclassification of the Common
Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other
securities, cash or property (other than as a result of a subdivision or combination of shares of Common Stock covered by Section
9(a) above) (in any such case, a “Fundamental Transaction”), then the Holder shall have the right thereafter
to receive, upon exercise of this Warrant, the same amount and kind of securities, cash or property as it would have been entitled
to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction,
the holder of the number of Warrant Shares then issuable upon exercise in full of this Warrant without regard to any limitations
on exercise contained herein (the “Alternate Consideration”). The Company shall not effect any such Fundamental
Transaction unless prior to or simultaneously with the consummation thereof, any successor to the Company, surviving entity or
the corporation purchasing or otherwise acquiring such assets or other appropriate corporation or entity shall assume the obligation
to deliver to the Holder, such Alternate Consideration as, in accordance with the foregoing provisions, the Holder may be entitled
to purchase and/or receive (as the case may be), and the other obligations under this Warrant. The provisions of this paragraph
(c) shall similarly apply to subsequent transactions analogous to a Fundamental Transaction.


 


(c)          Number
of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to Subparagraph 9(a), the number
of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that
after such adjustment the aggregate Exercise Price payable hereunder for the increased or decreased number of Warrant Shares shall
be the same as the aggregate Exercise Price in effect immediately prior to such adjustment.


 


(d)          Calculations.
All calculations under this Section 9 shall be made to the nearest cent or the nearest 1/100th of a share, as
applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for
the account of the Company, and the sale or issuance of any such shares shall be considered an issue or sale of Common Stock.


 


(e)           Notice
of Adjustments. Upon the occurrence of each adjustment pursuant to this Section 9, the Company at its expense will,
at the written request of the Holder, compute such adjustment, in good faith, in accordance with the terms of this Warrant and
prepare a certificate setting forth such adjustment, including a statement of the adjusted Exercise Price and adjusted number or
type of Warrant Shares or other securities issuable upon exercise of this Warrant (as applicable), describing the transactions
giving rise to such adjustments and showing in detail the facts upon which such adjustment is based. Upon written request, the
Company will deliver a copy of each such certificate to the Holder and to the Company’s transfer agent.


 


10.         Payment
of Exercise Price. The Holder shall pay the Exercise Price in immediately available funds; provided, however, that if,
on any Exercise Date the shares issuable upon exercise of this Warrant are not freely resalable without restriction under the Securities
Act, the Holder may, in its sole discretion, satisfy its obligation to pay the Exercise Price through a “cashless exercise”,
in which event the Company shall issue to the Holder the number of Warrant Shares determined as follows:


 




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X = Y [(A-B)/A]


 


where:


X = the number of Warrant Shares to be issued to the
Holder.


 


Y = the total number of Warrant Shares with respect
to which this Warrant is being exercised.


 


A = the average of the Closing Sale Prices of the shares
of Common Stock (as reported by Bloomberg Financial Markets) for the five Trading Days ending on the date immediately preceding
the Exercise Date.


 


B = the Exercise Price then in effect for the applicable
Warrant Shares at the time of such exercise.


 


For purposes of this Warrant, “Closing Sale Price”
means, for any security as of any date, the last trade price for such security on the principal securities exchange or trading
market for such security, as reported by Bloomberg Financial Markets, or, if such exchange or trading market begins to operate
on an extended hours basis and does not designate the last trade price, then the last trade price of such security prior to 4:00:00
p.m., New York Time, as reported by Bloomberg Financial Markets, or if the foregoing do not apply, the last trade price of such
security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg Financial Markets,
or, if no last trade price is reported for such security by Bloomberg Financial Markets, the average of the bid prices, or the
ask prices, respectively, of any market makers for such security as reported in the OTC Markets, LLC. If the Closing Sale Price
cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Sale Price of such security
on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder
are unable to agree upon the fair market value of such security, then the Company shall, within two business days submit via facsimile
(a) the disputed determination of the Warrant Exercise Price to an independent, reputable investment bank selected by the Company
and approved by the Holder or (b) the disputed arithmetic calculation of the Warrant Shares to the Company's independent, outside
accountant. The Company shall cause, at its sole expense, the investment bank or the accountant, as the case may be, to perform
the determinations or calculations and notify the Company and the Holder of the results no later than ten business days from the
time it receives the disputed determinations or calculations. Such investment bank's or accountant's determination or calculation,
as the case may be, shall be binding upon all parties absent demonstrable error. All such determinations to be appropriately adjusted
for any stock dividend, stock split, stock combination or other similar transaction during the applicable calculation period


 




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For purposes of Rule 144 promulgated under the Securities Act, it
is intended, understood and acknowledged that the Warrant Shares issued in a cashless exercise transaction shall be deemed to have
been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, on the date this
Warrant was originally issued pursuant to the Purchase Agreement (provided that the Commission continues to take the position that
such treatment is proper at the time of such exercise).


 


11.         [Intentionally
Omitted.] [OR] [Limitations on Exercise. [THIS BLOCKER PROVISIONS TO BE INCLUDED ONLY IF REQUEST OF THE HOLDER.]


 


(a)          Notwithstanding
anything to the contrary contained herein, the number of Warrant Shares that may be acquired by the Holder upon any exercise of
this Warrant (or otherwise in respect hereof) shall be limited to the extent necessary to ensure that, following such exercise
(or other issuance), the total number of shares of Common Stock then beneficially owned by the Holder and its Affiliates and any
other Persons whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d)
of the Exchange Act, does not exceed 4.99% of the total number of issued and outstanding shares of Common Stock (including for
such purpose the shares of Common Stock issuable upon such exercise). For such purposes, beneficial ownership shall be determined
in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. Each delivery of an
Exercise Notice by the Holder will constitute a representation by the Holder that it has evaluated the limitation set forth in
this Section and determined that issuance of the full number of Warrant Shares requested in such Exercise Notice is permitted under
this Section. The Company’s obligation to issue shares of Common Stock in excess of the limitation referred to in this Section
shall be suspended (and, except as provided below, shall not terminate or expire notwithstanding any contrary provisions hereof)
until such time, if any, as such shares of Common Stock may be issued in compliance with such limitation; provided, that, if, as
of 5:30 P.M., New York City time, on the Expiration Date, the Company has not received written notice that the shares of Common
Stock may be issued in compliance with such limitation, the Company’s obligation to issue such shares shall terminate. This
provision shall not restrict the number of shares of Common Stock which a Holder may receive or beneficially own in order to determine
the amount of securities or other consideration that such Holder may receive in the event of a Fundamental Transaction as contemplated
in Section 9 of this Warrant. By written notice to the Company, the Holder may waive the provisions of this Section but
any such waiver will not be effective until the 61st day after such notice is delivered to the Company, nor will any
such waiver effect any other Holder.


 


(b)          
Notwithstanding anything to the contrary contained herein, the number of Warrant Shares that may be acquired by the Holder upon
any exercise of this Warrant (or otherwise in respect hereof) shall be limited to the extent necessary to ensure that, following
such exercise (or other issuance), the total number of shares of Common Stock then beneficially owned by such Holder and its Affiliates
and any other Persons whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section
13(d) of the Exchange Act, does not exceed 9.99% of the total number of issued and outstanding shares of Common Stock (including
for such purpose the shares of Common Stock issuable upon such exercise). For such purposes, beneficial ownership shall be determined
in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. Each delivery of an
Exercise Notice hereunder will constitute a representation by the Holder that it has evaluated the limitation set forth in this
Section and determined that issuance of the full number of Warrant Shares requested in such Exercise Notice is permitted under
this Section. The Company’s obligation to issue shares of Common Stock in excess of the limitation referred to in this Section
shall be suspended (and, except as provided below, shall not terminate or expire notwithstanding any contrary provisions hereof)
until such time, if any, as such shares of Common Stock may be issued in compliance with such limitation; provided, that, if, as
of 5:30 p.m., New York City time, on the Expiration Date, the Company has not received written notice that the shares of Common
Stock may be issued in compliance with such limitation, the Company’s obligation to issue such shares shall terminate. This
provision shall not restrict the number of shares of Common Stock which a Holder may receive or beneficially own in order to determine
the amount of securities or other consideration that such Holder may receive in the event of a Fundamental Transaction as contemplated
in Section 9 of this Warrant. This restriction may not be waived.]


 




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12.         No
Fractional Shares. No fractional Warrant Shares will be issued in connection with any exercise of this Warrant. In lieu of
any fractional shares which would otherwise be issuable, the number of Warrant Shares to be issued shall be rounded to the nearest
whole number.


 


13.          Notices.
Any and all notices or other communications or deliveries hereunder (including, without limitation, any Exercise Notice) shall
be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile number specified in the Purchase Agreement prior to 5:30 p.m. (New York City time)
on a Trading Day, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile
at the facsimile number specified in the Purchase Agreement on a day that is not a Trading Day or later than 5:30 p.m. (New York
City time) on any Trading Day, (iii) the Trading Day following the date of mailing, if sent by nationally recognized overnight
courier service specifying next business day delivery, or (iv) upon actual receipt by the party to whom such notice is required
to be given, if by hand delivery. The address and facsimile number of a party for such notices or communications shall be as set
forth in the Purchase Agreement unless changed by such party by two Trading Days’ prior notice to the other party in accordance
with this Section 13.


 


14.          Warrant
Agent. The Company shall serve as warrant agent under this Warrant. Upon thirty (30) days’ notice to the Holder, the
Company may appoint a new warrant agent. Any corporation into which the Company or any new warrant agent may be merged or any corporation
resulting from any consolidation to which the Company or any new warrant agent shall be a party or any corporation to which the
Company or any new warrant agent transfers substantially all of its corporate trust or shareholders services business shall be
a successor warrant agent under this Warrant without any further act. Any such successor warrant agent shall promptly cause notice
of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last
address as shown on the Warrant Register.


 




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15.         Miscellaneous.
 


 


(a)          The
Holder, solely in such Person's capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be
deemed the holder of share capital of the Company for any purpose, nor shall anything contained in this Warrant be construed to
confer upon the Holder, solely in such Person's capacity as the Holder of this Warrant, any of the rights of a stockholder of the
Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification
of stock, consolidation, merger, amalgamation, conveyance or otherwise), receive notice of meetings, receive dividends or subscription
rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares which such Person is then entitled to receive upon
the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities
on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether
such liabilities are asserted by the Company or by creditors of the Company. Notwithstanding this Section 15(a), the Company
shall provide the Holder with copies of the same notices and other information given to the shareholders of the Company, contemporaneously
with the giving thereof to the shareholders.


 


(b)          Subject
to the restrictions on transfer set forth on the first page hereof and in Section 4.1 of the Purchase Agreement, and compliance
with applicable securities laws, this Warrant may be assigned by the Holder. This Warrant may not be assigned by the Company except
to a successor in the event of a Fundamental Transaction. This Warrant shall be binding on and inure to the benefit of the parties
hereto and their respective successors and assigns. Subject to the preceding sentence, nothing in this Warrant shall be construed
to give to any Person other than the Company and the Holder any legal or equitable right, remedy or cause of action under this
Warrant. This Warrant may be amended only in writing signed by the Company and the Holder, or their successors and assigns.


 


(c)          GOVERNING
LAW; VENUE; WAIVER OF JURY TRIAL. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS
WARRANT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
THE PRINCIPLES OF CONFLICTS OF LAW THEREOF. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND
FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION
HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE
TRANSACTION DOCUMENTS), 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 ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. 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 MANNER
PERMITTED BY LAW. THE COMPANY HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY. 


 




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


 


(e)           In
case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability
of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby, and the parties will
attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor,
and upon so agreeing, shall incorporate such substitute provision in this Warrant.


 


(f)           Except
as otherwise set forth herein, prior to exercise of this Warrant, the Holder hereof shall not, by reason of by being a Holder,
be entitled to any rights of a stockholder with respect to the Warrant Shares.





 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,


SIGNATURE PAGE FOLLOWS]


 




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IN WITNESS WHEREOF, the Company has caused this
Warrant to be duly executed by its authorized officer as of the date first indicated above.


 


	 	NEPHROS, INC.
	 	 
	 	By:	 
	 	 	Daron Evans
	 	 	President and Chief Executive Officer


 




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SCHEDULE 1


 


FORM OF EXERCISE NOTICE


 


(To be executed by the Holder to exercise the
right to purchase shares


of Common Stock under the foregoing Warrant)


  


To:        Nephros, Inc.


 


(1)         The
undersigned is the Holder of Warrant No. __________ (the “Warrant”) issued by Nephros, Inc. a Delaware corporation
(the “Company”). Capitalized terms used herein and not otherwise defined herein have the respective meanings set forth
in the Warrant.


 


(2)         The
undersigned hereby exercises its right to purchase __________ Warrant Shares pursuant to the Warrant.


  


(3)         The
Holder intends that payment of the Exercise Price shall be made as (check one):


 


	 	€	Cash Exercise 
	 	€	“Cashless Exercise” under Section 10


 


(4)         If
the Holder has elected a Cash Exercise, the Holder shall pay the sum of $_______ in immediately available funds to the Company
in accordance with the terms of the Warrant.


 


(5)         Pursuant
to this Exercise Notice, the Company shall deliver to the Holder _____________ Warrant Shares in accordance with the terms of the
Warrant.


 


[(6)         [INCLUDE
ONLY IF WARRANT CONTAINS BLOCKER PROVISION AT THE REQUEST OF THE PURCHASER.] [By its delivery of this Exercise Notice, the undersigned
represents and warrants to the Company that in giving effect to the exercise evidenced hereby, the Holder will not beneficially
own in excess of the number of shares of Common Stock (as determined in accordance with Section 13(d) of the Securities Exchange
Act of 1934) permitted to be owned under Section 11 of this Warrant to which this notice relates.]


 


Dated:_______________, _____


 





	Name of Holder:	 	 




 











	By:	 	 







	Name:	 	 





	Title:	 	 
	(Signature must conform in all respects to name of  Holder as specified on the face of the Warrant)	 


 




    	 



    	 



    

 


SCHEDULE 2


 


NEPHROS, INC.


 


FORM OF ASSIGNMENT


[To be completed and signed only upon transfer
of Warrant]


 


FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers unto                             
(the “Transferee” the right represented by the within Warrant to purchase                 
shares of Common Stock of Nephros, Inc. (the “Company”) to which the within Warrant relates and appoints                             
attorney to transfer said right on the books of the Company with full power of substitution in the premises. In connection therewith,
the undersigned represents, warrants, covenants and agrees to and with the Company that:


 


		(a)	the offer and sale of the Warrant contemplated hereby is being made in compliance with Section
4(1) of the United States Securities Act of 1933, as amended (the “Securities Act”) or another valid exemption from
the registration requirements of Section 5 of the Securities Act and in compliance with all applicable securities laws of the states
of the United States;



 


		(b)	the undersigned has not offered to sell the Warrant by any form of general solicitation or general
advertising, including, but not limited to, any advertisement, article, notice or other communication published in any newspaper,
magazine or similar media or broadcast over television or radio, and any seminar or meeting whose attendees have been invited by
any general solicitation or general advertising;



 


		(c)	the undersigned has read the Transferee’s investment letter included herewith, and to its
actual knowledge, the statements made therein are true and correct; and



 


		(d)	the undersigned understands that the Company may condition the transfer of the Warrant contemplated
hereby upon the delivery to the Company by the undersigned or the Transferee, as the case may be, of a written opinion of counsel
(which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect
that such transfer may be made without registration under the Securities Act and under applicable securities laws of the states
of the United States.






 


	Dated:__________	 
	 	(Signature must conform in all respects to name of holder as specified on the face of the Warrant)
	 	 
	 	Address of Transferee:
	 	 	 
	 	 	 
	 	 	 


 


	In the presence of: