Document:

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:NEPHROS,
INC.

    SUBSCRIPTION
AGREEMENT

     

    THIS
SUBSCRIPTION AGREEMENT (this “Agreement”) is made as of the date set forth on
the signature page hereof between Nephros, Inc., a Delaware
corporation having a place of business at 41 Grand Avenue, River Edge, NJ 07661
(the “Company”), and the undersigned (the “Purchaser”).

    

    1.           Subscription. The Purchaser, intending
to be legally bound, hereby agrees to purchase from the Company shares of the
Company’s Common Stock (the “Shares”) at a price
of $0.93 per Share (the “Per Share Purchase
Price”) in the amount set forth on the signature page hereof (the “Subscription
Amount”).  Purchasers shall also receive a warrant (the “Warrant” and with the
Shares the “Units”) to purchase a
number of shares of the Company’s Common Stock equal to the aggregate number of
Shares purchased by the Purchaser hereunder multiplied by fifty percent (50%)
(the “Warrant
Shares” and with the Shares and the Warrant the “Securities”).   The
Warrant shall be in the form attached hereto as Exhibit A and be
exercisable for a period of five years from the date of the Closing hereunder at
an exercise price equal to $1.12 per Warrant Share.  The Company is
offering up to $3,000,000 in aggregate purchase price of Shares (the “Offering”), subject
to over-allotment at the Company’s discretion.  Closings will be
conducted on a rolling basis as funds are received.  The Warrant and
this Subscription Agreement are referred to herein as the “Transaction
Documents”.  The minimum subscription amount is $100,000,
subject to the discretion of the Company to accept lesser amounts on a
case-by-case basis.

     

    2.           Closing, Deliverables and Wire
Instructions.

     

    (a)           Closing.  At
4:00 p.m. EST on Friday July 24, 2009, each Purchaser shall purchase from the
Company, severally and not jointly with the other Purchasers, and the Company
shall issue and sell to each Purchaser, Shares with an aggregate Per Share
Purchase Price equal to such Purchaser’s Subscription Amount (rounded to the
nearest whole share), together with the Warrant.

     

    (b)           Deliveries.

     

    (1)           On
or promptly after the date of Closing, the Company shall deliver or cause to be
delivered to each Purchaser the following:

     

    
      	
               
      

            	
              i.

            	
              this
      Agreement duly executed by the
Company;

            

    

     

    
      	
               
      

            	
              ii.

            	
              a
      certificate evidencing the Shares, registered in the name of such
      Purchaser; and

            

    

     

    iii.           the
executed Warrant in the name of such Purchaser.

     

    (2)           On
or before the date of Closing, each Purchaser shall deliver or cause to be
delivered to the Company the following:

     

    
      	
               
      

            	
              i.

            	
              this
      Agreement duly executed by such Purchaser;
and

            

    

     

    
      	
               
      

            	
              ii.

            	
              such
      Purchaser’s Subscription Amount by wire
  transfer.

            

    

     

    (c)           Wire
Instructions.  Subscriptions should be wired as
follows:

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Bank
Name:        HSBC Bank

    Bank
Address:    12 E. Palisade Ave.

                             
Englewood, NJ 07631

    ABA
#:               
021001088

    Account
Name:   Nephros, Inc.

    Account
#:         
392-01892-6

     

    3.           Purchaser Representations and
Warranties.  The Purchaser hereby represents, warrants,
acknowledges and agrees as follows:

     

    (a)           The
Units are not registered under the Securities Act of 1933, as amended (the
“Securities
Act”), or any state securities laws.  The Purchaser understands
that the offering and sale of the Units is intended to be exempt from
registration under the Securities Act, by virtue of Section 4(2) thereof and the
provisions of Regulation D promulgated thereunder, or not subject to such
requirement, by virtue of Regulation S promulgated under the Securities Act,
based, in part, upon the representations, warranties and agreements of the
Purchaser contained in this Subscription Agreement.

     

    (b)           The
Purchaser has reviewed the Company’s public filings under the Securities Act and
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and
all other documents requested by the Purchaser, has carefully reviewed them and
understands the information contained therein.  Neither the Commission
nor any state securities commission has approved the Units, or passed upon or
endorsed the merits of the Offering.

     

    (c)           The
Purchaser agrees that it will not will not sell, make any short sale of, pledge,
grant any option for the purchase of or otherwise dispose of any of the Shares
or Warrants purchased hereunder without the prior written consent of the Company
until January 31, 2010. The Company shall place a stop transfer order with the
Company’s transfer agent and outside counsel to prevent the transfer of the
Shares or Warrants in violation of this Agreement.

     

    (d)           All
documents, records and books pertaining to the investment in the Units
(including, without limitation, the Transaction Documents) have been made
available for inspection by the Purchaser and its representatives. Purchaser
hereby acknowledges that all such information is confidential and Purchaser
shall not disclose any such confidential information to any third party other
than as set forth herein.

     

    (e)           The
Purchaser has had reasonable time and opportunity to have discussions with, ask
questions of and receive answers from a person or persons acting on behalf of
the Company concerning the offering of the Units, the terms and conditions of
the investment and the business, financial condition, results of operations and
prospects of the Company, and all such questions have been answered to the full
satisfaction of the Purchaser.

     

    (f)           In
evaluating the suitability of an investment in the Company, the Purchaser has
not relied upon any representation or other information (oral or written) other
than as stated herein.

     

    (g)           The
Purchaser is unaware of, is in no way relying on, and did not become aware of
the offering of the Units through or as a result of, any form of general
solicitation or general advertising as those terms are used in Regulation D
under the Securities Act, including, without limitation, any article, notice,
advertisement or other communication published in any newspaper, magazine or
similar media or broadcast over television or radio, in connection with the
offering and sale of the Units and is not subscribing for Units and did not
become aware of the offering of the Units through or as a result of any seminar
or meeting to which the Purchaser was invited by, or any solicitation of a
subscription by, a person not previously known to the Purchaser in connection
with investments in Shares or Warrants generally.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (h)           The
Purchaser has taken no action which would give rise to any claim by any person
for brokerage commissions, finders’ fees or the like relating to this
Subscription Agreement or the transactions contemplated hereby.

     

    (i)           
The Purchaser has such knowledge and experience in financial, tax, and business
matters, and, in particular, investments in securities similar to the Shares and
Warrants, so as to enable the Purchaser to utilize the information made
available to it in connection with the Offering of the Units to evaluate the
merits and risks of an investment in the Units and the Company and to make an
informed investment decision with respect thereto.

     

    (j)           
The Purchaser is not relying on the Company or any of its employees, officers or
agents with respect to the legal, tax, economic and related considerations as to
an investment in the Units, and the Purchaser has relied on the advice of, or
has consulted with, only his own advisors.

     

    (k)           The
Purchaser is acquiring the Units solely for the Purchaser's own account for
investment and not with a view to resale, assignment or distribution thereof, in
whole or in part.  The Purchaser has no agreement or arrangement,
formal or informal, with any person to sell or transfer all or any part of the
Units, and the Purchaser has no plans to enter into any such agreement or
arrangement.  The Purchaser will not engage in hedging transactions
with respect to the Securities or the securities received upon exchange of the
Securities unless in compliance with the registration requirements of the
Securities Act.  Other than the transaction contemplated hereunder,
the Purchaser has not directly or indirectly, nor has any person acting on
behalf of or pursuant to any understanding with the Purchaser, executed any
disposition, including short sales as defined in Rule 200 of Regulation SHO
under the Exchange Act (but not including the location and/or reservation of
borrowable shares of Common Stock), in the securities of the Company during
the period commencing from the time that the Purchaser first received from the
Company or any other Person notice of the proposed details of the transactions
contemplated hereunder until the date this Agreement is in effect (“Discussion Time”).  Notwithstanding the foregoing, in
the case of a Purchaser that is a multi-managed investment vehicle whereby
separate portfolio managers manage separate portions of such Purchaser's assets
and the portfolio managers have no direct knowledge of the investment decisions
made by the portfolio managers managing other portions of such Purchaser's
assets, the representation set forth above shall only apply with respect to the
portion of assets managed by the portfolio manager that made the investment
decision to purchase the Units covered by this Agreement.  Other than
to other Persons party to this Agreement, such Purchaser has maintained the
confidentiality of all disclosures made to it in connection with this
transaction (including the existence, terms and proposed details of this
transaction) and has not used any such confidential information.

     

    (l)           The
Purchaser must bear the substantial economic risks of the investment in the
Units indefinitely because none of the Securities may be sold, hypothecated or
otherwise disposed of unless subsequently registered under the Securities Act
and applicable state securities laws or an exemption from such registration is
available.  Subject to the terms hereunder, legends shall be placed on
the Securities to the effect that they have not been registered under the
Securities Act or applicable state securities laws and appropriate notations
thereof will be made in the Company’s stock books.  Stop transfer
instructions will be placed with the transfer agent.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (m)          The
Purchaser has adequate means of providing for its current financial needs and
foreseeable contingencies and has no need for liquidity of the investment in the
Securities for an indefinite period of time.

     

    (n)           The
Purchaser is aware that an investment in the Units involves a number of very
significant risks as described in the Company’s public filings under the
Securities Act and the Exchange Act (the “Public Filings”), and
the Purchaser has carefully reviewed the Public Filings.

     

    (o)           The
Purchaser meets the requirements of at least one of the suitability standards
for an “accredited investor” as set forth in Regulation D promulgated under the
Securities Act or is a “non-US Person” that is a “qualified investor” as defined
in the European Union Prospective Directive.

     

    (p)           The
Purchaser: (i) if a natural person, represents that the Purchaser has reached
the age of 21 and has full power and authority to execute and deliver this
Subscription Agreement and all other related agreements or certificates and to
carry out the provisions hereof and thereof; (ii) if a corporation, partnership,
limited liability company or partnership, association, joint stock company,
trust, unincorporated organization or other entity, (A) such entity was not
formed for the specific purpose of acquiring the Units, (B) such entity is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (C) the consummation of the transactions
contemplated hereby is authorized by, and will not result in a violation of law
or its charter or other organizational documents, (D) such entity has full power
and authority to execute and deliver this Subscription Agreement and all other
related agreements or certificates and to carry out the provisions hereof and
thereof and to purchase and hold the Securities, (E) the execution and delivery
of this Subscription Agreement has been duly authorized by all necessary action,
and (F) this Subscription Agreement has been duly executed and delivered on
behalf of such entity and is a legal, valid and binding obligation of such
entity; and (iii) if executing this Subscription Agreement in a representative
or fiduciary capacity, such representative has full power and authority to
execute and deliver this Subscription Agreement in such capacity and on behalf
of the subscribing individual, ward, partnership, trust, estate, corporation,
limited liability company or limited liability partnership, or other entity for
whom such representative is executing this Subscription Agreement, and such
individual, ward, partnership, trust, estate, corporation, limited liability
company or partnership, or other entity has full right and power to perform this
Subscription Agreement and make an investment in the Company, and that this
Subscription Agreement constitutes a legal, valid and binding obligation of such
Purchaser.  The execution and delivery of this Subscription Agreement
will not violate or be in conflict with any order, judgment, injunction,
agreement or controlling document to which the Purchaser is a party or by which
it is bound.

     

    (q)           The
Purchaser had the opportunity to obtain any additional information, to the
extent the Company had such information in its possession or could acquire it
without unreasonable effort or expense, deemed relevant by the Purchaser and all
such requested information, to the extent the Company had such information in
its possession or could acquire it without unreasonable effort or expense, has
been provided to Purchaser to its full satisfaction.

     

    (r)           No
oral or written representations have been made, or oral or written information
furnished, to the Purchaser in connection with the offering of the Units or as
to the Company, which are in any way inconsistent with the information contained
in the Public Filings.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (s)           (For ERISA plans
only)    The fiduciary of the ERISA plan (the “Plan”) represents
that such fiduciary has been informed of and understands the Company’s
investment objectives, policies and strategies, and that the decision to invest
“plan assets” (as such term is defined in ERISA) in the Company is consistent
with the provisions of ERISA that require diversification of plan assets and
impose other fiduciary responsibilities.  The Purchaser fiduciary or
Plan (a) is responsible for the decision to invest in the Company; (b) is
independent of the Company or any of its affiliates; (c) is qualified to make
such investment decision; and (d) in making such decision, the Purchaser
fiduciary or Plan has not relied primarily on any advice or recommendation of
the Company or any of its affiliates.

     

    (t)           The Purchaser should check the Office
of Foreign Assets Control (“OFAC”) website at
<http://www.treas.gov/ofac> before making the following
representations. The Purchaser represents that the amounts invested by it
in the Company in the Offering were not and are not directly or indirectly
derived from activities that contravene federal, state or international laws and
regulations, including anti-money laundering laws and regulations. Federal
regulations and Executive Orders administered by OFAC prohibit, among other
things, the engagement in transactions with, and the provision of services to,
certain foreign countries, territories, entities and individuals.  The
lists of OFAC prohibited countries, territories, persons and entities can be
found on the OFAC website at <http://www.treas.gov/ofac>.  In
addition, the programs administered by OFAC (the “OFAC Programs”)
prohibit dealing with individuals1 or
entities in certain countries regardless of whether such individuals or entities
appear on the OFAC lists.

     

    (u)           To
the best of the Purchaser’s knowledge, none of: (1) the Purchaser, (2) any
person controlling or controlled by the Purchaser, (3) if the Purchaser is a
privately-held entity, any person having a beneficial interest in the Purchaser,
or (4) any person for whom the Purchaser is acting as agent or nominee in
connection with this investment is a country, territory, individual or entity
named on an OFAC list, or a person or entity prohibited under the OFAC
Programs.  Please be advised that the Company may not accept any
amounts from a prospective investor if such prospective investor cannot make the
representation set forth in the preceding paragraph.  The Purchaser
agrees to promptly notify the Company should the Purchaser become aware of any
change in the information set forth in these representations.  The
Purchaser understands and acknowledges that, by law, the Company may be
obligated to “freeze the account” of the Purchaser, either by prohibiting
additional subscriptions from the Purchaser, declining any redemption requests
and/or segregating the assets in the account in compliance with governmental
regulations.  The Purchaser further acknowledges that the Company may,
by written notice to the Purchaser, suspend the redemption rights, if any, of
the Purchaser if the Company reasonably deems it necessary to do so to comply
with anti-money laundering regulations applicable to the Company or any of the
Company’s other service providers.  These individuals include
specially designated nationals, specially designated narcotics traffickers and
other parties subject to OFAC sanctions and embargo programs.

     

    (v)           To
the best of the Purchaser’s knowledge, none of: (1) the Purchaser, (2) any
person controlling or controlled by the Purchaser, (3) if the Purchaser is a
privately-held entity, any person having a beneficial interest in the Purchaser,
or (4) any person for whom the Purchaser is acting as agent or nominee in
connection with this investment is a senior foreign political figure2, or
any immediate family3
member or
close associate4 of a
senior foreign political figure, as such terms are defined in the footnotes
below.

     

      
        

      

    

    1These
individuals include specially designated nationals, specially designated
narcotics traffickers and other parties subject to OFAC sanctions and embargo
programs.

    

    2A “senior
foreign political figure” is defined as a senior official in the executive,
legislative, administrative, military or judicial branches of a foreign
government (whether elected or not), a senior official of a major foreign
political party, or a senior executive of a foreign government-owned
corporation. In addition, a “senior foreign political figure” includes any
corporation, business or other entity that has been formed by, or for the
benefit of, a senior foreign political figure.

     

    3“Immediate
family” of a senior foreign political figure typically includes the figure’s
parents, siblings, spouse, children and in-laws.

     

    4A “close
associate” of a senior foreign political figure is a person who is widely and
publicly known to maintain an unusually close relationship with the senior
foreign political figure, and includes a person who is in a position to conduct
substantial domestic and international financial transactions on behalf of the
senior foreign political figure.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (w)          If
the Purchaser is affiliated with a non-U.S. banking institution (a “Foreign Bank”), or if
the Purchaser receives deposits from, makes payments on behalf of, or handles
other financial transactions related to a Foreign Bank, the Purchaser represents
and warrants to the Company that: (1) the Foreign Bank has a fixed address,
other than solely an electronic address, in a country in which the Foreign Bank
is authorized to conduct banking activities, (2) the Foreign Bank maintains
operating records related to its banking activities, (3) the Foreign Bank is
subject to inspection by the banking authority that licensed the Foreign Bank to
conduct banking activities, and (4) the Foreign Bank does not provide banking
services to any other Foreign Bank that does not have a physical presence in any
country and that is not a regulated affiliate.

     

    4.           Company Representations and
Warranties.  The Company hereby represents, warrants,
acknowledges and agrees as follows:

     

    (a)           Accuracy of Public
Filings.  All Public Filings and reports required to be filed
by the Company under the Securities Act and Exchange Act have been duly filed on
a timely basis with the SEC, complied at the time of filing in all material
respects with the requirements of their respective forms and the rules and
regulations thereunder, except to the extent updated or superseded by any
subsequently filed report, were complete and correct in all material respects as
of the dates at which the information was furnished, and such reports did not
contain (as of their respective dates) any untrue statements of a
material fact nor omitted to state any material fact necessary in order to make
the statements contained therein, in light of the circumstances under which they
were made, not misleading.  The Company has not disclosed to the
Purchaser any material non-public information regarding the Company; and since
the date of the Company’s last Public Filing there has occurred no event likely
to have a material adverse effect on the business or financial condition of the
Company.  The financial statements of the Company included in the
Public Filings comply in all material respects with applicable accounting
requirements and the rules and regulations of the SEC with respect thereto as in
effect at the time of filing.  Such financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America applied on a consistent basis during the periods
involved (“GAAP”), except as may
be otherwise specified in such financial statements or the notes thereto and
except that unaudited financial statements may not contain all footnotes
required by GAAP, and fairly present in all material respects the financial
position of the Company as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, immaterial, year-end audit
adjustments.

     

    (b)           Organization and
Qualification.  The Company is an entity duly incorporated,
validly existing and in good standing under the laws of the State of Delaware,
with the requisite power and authority to own and use its properties and assets
and to carry on its business as currently conducted.  The Company is
not in violation of any of the provisions of its Certificate of Incorporation or
By-Laws.  The Company has no subsidiaries.  The Company is
duly qualified to conduct business and is in good standing as a foreign
corporation or other entity in each jurisdiction in which the nature of the
business conducted or property owned by it makes such qualification necessary,
except where the failure to be so qualified or in good standing, as the case may
be, could not have or reasonably be expected to result in a Material Adverse
Effect.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (c)           Authorization;
Enforcement.  The Company has the requisite corporate power and
authority to enter into and to consummate the Offering.  The execution
and delivery of this Subscription Agreement and the Warrant by the Company and
the consummation by it of the transactions contemplated hereby have been duly
authorized by all necessary action on the part of the Company and no further
consent or action is required by the Company.  This Subscription
Agreement and the Warrant, when executed and delivered in accordance with the
terms hereof, will constitute the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors’ rights and remedies generally
and general principles of equity.

     

    (d)           No
Conflicts.  The execution, delivery and performance of this
Subscription Agreement and the Warrant by the Company and the consummation by
the Company of the Offering do not and will not: (i) conflict with or violate
any provision of the Company’s Certificate of Incorporation or By-Laws, or (ii)
conflict with, or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice or
lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company debt or otherwise) or other understanding to
which the Company is a party or by which any material property or asset of the
Company is bound or affected, or (iii) result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other restriction of any
court or governmental authority as currently in effect to which the Company is
subject (including federal and state securities laws and regulations), or by
which any material property or asset of the Company is bound or affected; except
in the case of each of clauses (ii) and (iii), such as could not, individually
or in the aggregate (a) adversely affect the legality, validity or
enforceability of the Offering, (b) have or result in a material adverse effect
on the results of operations, assets, prospects, business or condition
(financial or otherwise) of the Company, taken as a whole, or (c) adversely
impair the Company's ability to perform fully on a timely basis its obligations
under this Subscription Agreement and the Warrant (any of (a), (b) or (c), a
“Material Adverse
Effect”).

     

    (e)           Filings, Consents and
Approvals.  The Company is not required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any filing or
registration with, any court or other federal, state, local or other
governmental authority in connection with the execution, delivery and
performance by the Company of this Subscription Agreement and the Warrant, other
than: (i) the filing with the Commission of a Form D pursuant to Regulation D
under the Securities Act and (ii) applicable Blue Sky filings ((i) and (ii)
collectively, the “Required
Approvals”).

     

    (f)           Issuance of the
Securities.  The Shares and the Warrant Shares are duly
authorized and, when issued and paid for in accordance with this Subscription
Agreement and the Warrant, will be duly and validly issued, fully paid and
nonassessable, free and clear of all liens.  The Warrants are duly
authorized and free and clear of all liens.  Assuming the accuracy of
the Purchaser's representations and warranties set forth in Section 3, no
registration under the Securities Act is required for the offer and sale of the
Units by the Company to the Purchaser as contemplated hereby.  The
Company has reserved from its duly authorized capital stock the requisite number
of shares of Common Stock issuable pursuant to this Agreement and the
Warrant.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    5.           Covenants of the Purchaser and the
Company.

     

    (a)           Transfer
Restrictions.

     

    (1)           The
Securities may only be disposed of in compliance with state and federal
securities laws.  In connection with any transfer of such securities
(or hedging activities involving such securities) other than pursuant to an
effective registration statement or Rule 144, to the Company or to an affiliate
of a Purchaser or in connection with a pledge as contemplated below, the Company
may require the transferor thereof to provide to the Company an opinion of
counsel selected by the transferor and reasonably acceptable to the Company, the
form and substance of which opinion shall be reasonably satisfactory to the
Company, to the effect that such transfer does not require registration of such
transferred securities under the Securities Act.  As a condition of
transfer, any such transferee shall agree in writing to be bound by the terms of
this Agreement.

     

    (2)           The
Purchaser agrees to the imprinting, so long as is required by this Section 5(a),
of a legend on any of the certificates evidencing the Shares and Warrant Shares
in the following form:

     

    THESE
SECURITIES HAVE NOT 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 AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.

     

    (3)           Upon
request, the Company will remove any legend (including the legend set forth in
Section 5(a)(2)): (i) following the resale of Shares or Warrant Shares pursuant
to an effective registration statement under the Securities Act covering the
resale of such Shares or Warrant Shares, (ii) if such Shares or Warrant Shares
are eligible for resale under Rule 144, or (iii) if such legend is not required
under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the Staff of the
Commission).

     

    (b)           Integration.  The
Company shall not sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that would be integrated with the offer or sale of the Units in a manner
that would require the registration under the Securities Act of the sale of the
Units to the Purchasers.

     

    (c)           Non-Public
Information.  The Company covenants and agrees that following
the date of the applicable Closing neither it nor any other Person acting on its
behalf will provide any Purchaser or its agents or counsel with any information
that the Company believes constitutes material non-public information, unless
prior thereto such Purchaser shall have executed a written agreement regarding
the confidentiality and use of such information.  The Company
understands and confirms that each Purchaser shall be relying on the foregoing
representations in effecting transactions in securities of the
Company.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (d)           Disclosure;
Publicity.  No Purchaser shall issue any such press release or
otherwise make any such public statement with respect to the transactions
contemplated hereby without the prior consent of the Company, except if such
disclosure is required by law, in which case the Purchaser shall promptly
provide the Company with prior written notice of such public statement or
communication.  The Company shall not publicly disclose the name of
any Purchaser, or include the name of any Purchaser in any filing with the
Commission or any regulatory agency or Trading Market, without the prior written
consent of such Purchaser, except (i) as required by federal securities law in
connection with a registration statement and (ii) to the extent such disclosure
is required by law or Trading Market regulations.

     

    6.           Definitions.  In
addition to the terms defined elsewhere in this Agreement, the following terms
have the meanings indicated in this Section 6:

     

    (a)           “Affiliate” means any
Person that, directly or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with a Person, as such terms are
used in and construed under Rule 144 under the Securities Act.  With
respect to a Purchaser, any investment fund or managed account that is managed
on a discretionary basis by the same investment manager as such Purchaser will
be deemed to be an Affiliate of such Purchaser.

     

    (b)           “Business Day” means
any day except Saturday, Sunday and any day which shall be a Federal holiday or
a day on which banking institutions in the State of New York are authorized or
required by law or other governmental action to close.

     

    (c)           “Commission” means the
Securities and Exchange Commission.

     

    (d)           “Common Stock” means
the common stock of the Company, par value $0.001 per share, and any securities
into which such common stock shall hereinafter been reclassified
into.

     

    (e)           “Company Counsel”
shall mean Wyrick Robbins Yates & Ponton LLP.

     

    (f)           “Per Share Purchase
Price” means $0.93 per Share.

     

    (g)           “Person” means an
individual or corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any
kind.

     

    (h)           “Proceeding” means an
action, claim, suit, investigation or proceeding (including, without limitation,
an investigation or partial proceeding, such as a deposition).

     

    (i)           “Subscription Amount”
shall mean, as to each Purchaser, the amount to be paid for the Securities
purchased hereunder as specified below such Purchaser's name on the signature
page of this Agreement, in United States Dollars.

     

    (j)           “Trading Market” means
the following markets or exchanges on which the Common Stock is listed or quoted
for trading on the date in question: the American Stock Exchange, the New York
Stock Exchange, the Nasdaq Global Market, the Nasdaq Capital Market or the OTC
Bulletin Board.

     

    (k)           “Transaction
Documents” means this Agreement and the Warrant and any other documents
or agreements executed in connection with the transactions contemplated
hereunder.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    7.           Irrevocability; Binding
Effect.  The Purchaser hereby acknowledges and agrees that the
subscription hereunder is irrevocable by the Purchaser, except as required by
applicable law, and that this Subscription Agreement shall survive the death or
disability of the Purchaser and shall be binding upon and inure to the benefit
of the parties and their heirs, executors, administrators, successors, legal
representatives and permitted assigns.  If the Purchaser is more than
one person, the obligations of the Purchaser hereunder shall be joint and
several and the covenants, agreements, representations, warranties, and
acknowledgments herein shall be deemed to be made by and be binding upon each
such person and such person's heirs, executors, administrators, successors,
legal representatives and permitted assigns.

     

    8.           Modification.  This
Subscription Agreement shall not be modified or waived except by an instrument
in writing signed by the party against whom any such modification or waiver is
sought.

     

    9.           Notices.  Any notice
or other communication required or permitted to be given hereunder shall be in
writing and shall be mailed by certified mail, return receipt requested or sent
by nationwide overnight courier or delivered against receipt to the party to
whom it is to be given (a) if to Company, at the address set forth above, or (b)
if to the Purchaser, at the address set forth on the signature page hereof (or,
in either case, to such other address as the party shall have furnished in
writing in accordance with the provisions of this Section).  Any
notice or other communication given by certified mail shall be deemed given at
the time that it is signed for by the recipient except for a notice changing a
party's address which shall be deemed given at the time of receipt thereof. Any
notice or other communication given by nationwide overnight courier shall be
deemed given the next Business Day following being deposited with such
courier.

     

    10.         Assignability.  This
Subscription Agreement and the rights, interests and obligations hereunder are
not transferable or assignable by the Purchaser and the transfer or assignment
of the Securities shall be made only in accordance with all applicable
laws.

     

    11.         Applicable Law.  All
questions concerning the construction, validity, enforcement and interpretation
of the Transaction Documents shall be governed by and construed and enforced in
accordance with the internal 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 or inconvenient venue for such
proceeding.  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
parties hereby waive all rights to a trial by jury. If either party shall
commence an action or proceeding to enforce any provisions of the Transaction
Documents, then the prevailing party in such action or proceeding shall be
reimbursed by the other party for its attorneys’ fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such
action or proceeding.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    12.           Use of
Pronouns.  All pronouns and any variations thereof used herein
shall be deemed to refer to the masculine, feminine, neuter, singular or plural
as the identity of the person or persons referred to may require.

     

    13.           Miscellaneous.

     

    (a)           This
Agreement and its exhibits and schedules constitutes the entire agreement
between the Purchaser and the Company with respect to the subject matter hereof
and supersedes all prior oral or written agreements and understandings, if any,
relating to the subject matter hereof.

     

    (b)           The
Purchaser's and Company's covenants, agreements, representations and warranties
made in this Agreement shall survive the execution and delivery hereof and
delivery of the Units.

     

    (c)           Each
of the parties hereto shall pay its own fees and expenses (including the fees of
any attorneys, accountants, appraisers or others engaged by such party) in
connection with this Agreement and the transactions contemplated hereby whether
or not the transactions contemplated hereby are consummated.

     

    (d)           This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which shall together constitute one and the same
instrument.

     

    (e)           Each
provision of this Subscription Agreement shall be considered separable and, if
for any reason any provision or provisions hereof are determined to be invalid
or contrary to applicable law, such invalidity or illegality shall not impair
the operation of or affect the remaining portions of this Subscription
Agreement.

     

    (f)           Section
titles are for descriptive purposes only and shall not control or alter the
meaning of this Subscription Agreement as set forth in the
text.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SIGNATURE
PAGE TO

    SUBSCRIPTION
AGREEMENT

     

    
      Aggregate
Purchase
Price:  $__________________________________

    

    

    
      
        
          
            	 
      	 
      	 
      
	
                    Signature

                  	 
      	
                    Signature
      (if purchasing jointly)

                  
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                    Name
      Typed or Printed

                  	 
      	
                    Name
      Typed or Printed

                  
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                    Entity
      Name

                  	 
      	
                    Entity
      Name

                  
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                    Address

                  	 
      	
                    Address

                  
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                    City,
      State and Zip Code

                  	 
      	
                    City,
      State and Zip Code

                  
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                    Telephone-Business

                  	 
      	
                    Telephone—Business

                  
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                    Telephone-Residence

                  	 
      	
                    Telephone—Residence

                  
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                    Facsimile-Business

                  	 
      	
                    Facsimile—Business

                  
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                    Facsimile-Residence

                  	 
      	
                    Facsimile—Residence

                  
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                    Email
      Address

                  	 
      	
                    Email
      Address

                  
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                    Tax
      ID # or Social Security #

                  	 
      	
                    Tax
      ID # or Social Security #

                  
	 
      	 
      	 
      
	
                    Name
      in which securities should be issued:

                  	 
      

          

        

      

    

    

    Dated:   _________________ ,
2009

    

    Company
Signature Page Follows

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    THE FOREGOING SUBSCRIPTION IS ACCEPTED
AND AGREED TO this _____ day of _________________, 2009.

    

    NEPHROS,
INC.

    

    By:______________________________________________

    Ernest
Elgin, CEO

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      EXHIBIT
A

      

      FORM
OF WARRANT

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00162-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00162-of-00352.parquet"}]]