Document:

EXHIBIT
4.1

 

THE
OFFER AND SALE OF THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE BORROWER THAT SUCH REGISTRATION IS NOT REQUIRED.
FURTHER, THIS NOTE IS SUBJECT TO SIGNIFICANT RESTRICTIONS ON TRANSFER BY THE HOLDER HEREOF, AS DESCRIBED MORE FULLY HEREIN.

 

NEPRHOS,
INC.

11%
UNSECURED PROMISSORY NOTE

 

	No.
    2016-[   ]	June
    [   ], 2016
	$[     ]	River
    Edge, New Jersey

 

FOR
VALUE RECEIVED, NEPHROS, INC., a Delaware corporation (the “Company”), promises to pay to [     ]
(“Holder”), or [his/her/its] registered assigns, in lawful money of the United States of America, the principal
sum of [          ] Dollars ($[     ]), together with
simple interest on the unpaid principal balance at a rate equal to eleven percent (11.00%) per annum, computed on the basis of
the actual number of days elapsed and a year of 365 days, but charged for actual days principal is outstanding (the “Applicable
Rate”).

 

All
unpaid principal, together with any then unpaid and accrued interest and other amounts payable hereunder, shall be due and payable
on the earlier of (i) June [   ], 2019 (the “Maturity Date”), or (ii) when, upon or after the
occurrence of an Event of Default, such amounts are declared due and payable by the Holders (as defined below) or made automatically
due and payable in accordance with the terms hereof. This Note is issued pursuant to that certain Note and Warrant Purchase Agreement
of even date herewith between the Company and Holder (as amended, modified or supplemented, the “Purchase Agreement”).
This Note is one in a series of similar promissory notes issued by Company pursuant to the offering of such notes under the Purchase
Agreement. This Note and such other similar promissory notes shall be collectively referred to herein as the “Notes,”
and the Holder and each other holder of Notes shall be collectively referred to herein as the “Holders.” Capitalized
terms used but not defined herein shall have the meanings ascribed to such terms in the Purchase Agreement.

 

THE
OBLIGATIONS DUE UNDER THIS NOTE ARE NOT SECURED BY ANY ASSETS OR OTHER COLLATERAL. 

 

The
following is a statement of the rights of Holder and the conditions to which this Note is subject, and to which Holder, by the
acceptance of this Note, agrees:

 

1.
Interest Payments. Company shall pay interest to the Holder on the aggregate then outstanding principal balance of this
Note at the Applicable Rate, payable in cash semi-annually in arrears on June [  ] and December [  ] of each
calendar year and on the Maturity Date (each such date, an “Interest Payment Date”). If any Interest Payment
Date is not a Business Day, then the applicable payment shall be due on the next succeeding Business Day.

 

    	 		 

    	 	 	 

    

 

2.
Prepayment. Company may prepay this Note in whole or in part without premium or penalty; provided that any such
prepayment will be applied first to the payment of fees, costs and expenses due under this Note, second to interest accrued under
this Note and third, if the amount of prepayment exceeds the amount of all such fees, costs and expenses and accrued interest,
to the payment of the principal due under this Note. Holder acknowledges and understands that Company, in its sole discretion,
may prepay, in whole or in part, amounts outstanding under any of the other Notes before making any equal or pro rata payment
to Holder under this Note.

 

3.
Ranking. The obligations of Company under this Note shall rank on parity with all other Notes. All payments and recoveries
payable on account of principal and unpaid interest on the Notes shall be paid and applied ratably and proportionately on the
outstanding balances of all Notes.

 

4.
Events of Default. Each of the following shall constitute an “Event of Default” hereunder:

 

4.1
Company shall fail to pay any principal, interest or other amount payable hereunder on the applicable due date and such failure
continues for thirty (30) days after written notice to Company;

 

4.2
Company shall (a) voluntarily terminate operations or apply for or consent to the appointment of, or the taking of possession
by, a receiver, custodian, trustee or liquidator in respect of the Company or of all or a substantial part of the assets of the
Company, (b) admit in writing its inability, to pay debts as the debts become due, (c) make a general assignment for the benefit
of its creditors, (d) commence a voluntary case under the United States Bankruptcy Code (as now or hereafter in effect), (e) file
a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding-up, or composition
or adjustment of debts, (f) fail to controvert in a timely and appropriate manner, or acquiesce in writing to, any petition filed
against it in an involuntary case under the United States Bankruptcy Code or applicable state bankruptcy laws or (g) take any
corporate action for the purpose of effecting any of the foregoing;

 

4.3
A sale of all or substantially all of the assets of the Company to any unaffiliated third party, or a merger or consolidation
of Company, with any person, after which Company’s shareholders own less than fifty percent (50%) of the voting stock of
Company or the entity that survives or results from such merger or consolidation; or

 

4.4
Default in the performance of any other obligation under this Note or the Purchase Agreement and such failure continues for thirty
(30) days after written notice to Company.

 

    	 	2	 

    	 	 	 

    

 

5.
Rights of Holders upon Event of Default. Upon the occurrence or existence of any Event of Default and at any time thereafter
during the continuance of such Event of Default, the holders of a majority of the aggregate principal amount then outstanding
under all Notes (the “Required Holders”) may declare any or all outstanding balance of the Notes to be immediately
due and payable without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived.
In addition to the foregoing remedies, upon the occurrence or existence of any Event of Default, the Required Holders may exercise
any other right, power or remedy granted to it by the Purchase Agreements or otherwise by law or in equity.

 

6.
No Right of Set-off. Company’s obligations to Holder under this Note shall not be subject to any right of Holder
to set-off amounts or obligations owed or owing by Holder to Company.

 

7.
Successors and Assigns. Subject to the restrictions on transfer described below, the rights and obligations of the Company
and Holder shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the parties.

 

8.
Waiver and Amendment. No amendments to or modifications of or waivers under the Notes (including this Note) shall be valid
or binding unless made in a writing signed by the Company and the Required Holders and expressly stating that it intends to amend
or modify, or waive a right under, the Notes and specifying the provision(s) intended to be amended, modified or waived. Any such
amendment, modification or waiver shall be effective only in the specific instance and for the purpose for which it was given.
Any such amendment, modification or waiver that complies with this Section 8 shall constitute an amendment, waiver or modification
of all outstanding Notes.

 

9.
Transfer of this Note Prohibited. This Note may not be sold, assigned or otherwise transferred by Holder without the prior
written consent of Company, which consent may be withheld in its sole discretion. Notwithstanding the foregoing, Holder may assign
this Note to Holder’s Affiliates and to its successors, heirs or representatives upon Holder’s death or incapacity
in the case of a Holder that is a natural person) or upon Holder’s dissolution (in the case of a Holder that is a corporation,
partnership or other entity). This Note and any certificate representing the securities thus transferred shall bear a legend as
to the applicable restrictions on transferability in order to ensure compliance with the Securities Act, unless in the opinion
of counsel for the Company such legend is not required in order to ensure compliance with the Securities Act. Subject to the foregoing,
transfers of this Note shall be registered upon registration books maintained for such purpose by or on behalf of the Company.
Prior to presentation of this Note for registration of transfer, Company shall treat the registered holder hereof as the owner
and holder of this Note for the purpose of receiving all payments of principal and interest hereon and for all other purposes
whatsoever, whether or not this Note shall be overdue and the Company shall not be affected by notice to the contrary. Any purported
assignment of this Note in violation of this Section 9 shall be void.

 

10.
Assignment by Company. Neither the Notes (including this Note) nor any of the rights, interests or obligations thereunder
may be assigned, by operation of law or otherwise, in whole or in part, by Company without the prior written consent of the Required
Holders.

 

    	 	3	 

    	 	 	 

    

 

11.
Notices. All notices, requests, consents and demands shall be made in writing and shall be mailed postage prepaid, or delivered
by reliable overnight courier service, or delivered by hand, to Company or to Holder at their respective addresses set forth below
or to such other address as may be furnished in writing to the other party hereto and shall be effective upon receipt:

 

If
to the Company:

 

Nephros,
Inc.

41
Grand Avenue

River
Edge, NJ 07661

Attn:
Chief Executive Officer

 

If
to Holder, to such address as the original purchaser of this Note shall have provided to Company at the time of original issuance
of this Note, as may be amended hereafter by written notice by such Holder to Company delivered as aforesaid; or, in any case,
at such other address or addresses as shall have been furnished in writing by such party to the other party. All such notices,
requests, consents and other communications shall be deemed to have been received (a) in the case of personal delivery, on the
date of such delivery, (b) in the case of mailing, on the fifth Business Day following the date of such mailing and (c) in the
case of overnight courier, on the second next Business Day.

 

12.
Waiver of Certain Rights. Subject to any applicable notice periods provided herein, Company hereby waives protest, presentment,
notice of dishonor, and notice of acceleration of maturity.

 

13.
Payments. All payments hereunder shall be payable in lawful money of the United States of America by check delivered to
Holder at such address as provided to Company at the time of the original issuance of this Note, or at such place as Holder may
designate in writing no less than five (5) Business Days prior to the applicable payment date.

 

14.
Governing Law. The validity of this Note, together with its construction, interpretation, and enforcement, and the rights
of the parties hereunder shall be determined under, governed by, and construed in accordance with the laws of the State of New
York (without reference to the choice of law principles thereof). Any suit, claim, proceeding or other action to enforce the terms
of this Note may be brought only in the state or federal courts situated in or having jurisdiction over New York City, New York.
Each of the parties hereto irrevocably consents to personal jurisdiction in the state or federal courts in the State of New York.
Each of the Company and, by acceptance of this Note, the Holder irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Note.

 

15.
Entire Agreement. This Note and the Purchase Agreement constitute the full and entire understanding and agreement between
the parties with regard to the subjects hereof.

 

16.
Headings. The headings or captions used in this Note are used for convenience only and are not to be considered in construing
or interpreting this Note.

 

(Signature
page follows)

 

    	 	4	 

    	 	 	 

    

 

The
Company has caused this Note to be issued as of the date first written above.

 

	 	NEPHROS,
    INC.,
	 	a
    Delaware corporation
	 	 	 
	 	By:	/s/
    Daron Evans
	 	Name:	Daron
    Evans
	 	Its:	President
    & CEO

 

[Signature
Page to Note]EXHIBIT
4.2

 

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. 2016-[   ]	Original
    Issue Date: June [   ], 2016

 

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 $0.30 (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
June [   ], 2021 (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 Note and Warrant
Purchase Agreement, dated June 3, 2016, 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
there is not then an effective registration statement under the Securities Act covering the resale of the Warrant Shares by the
Holder, (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.

 

    	 	2	 

    	 	 	 

    

 

(c)
Notwithstanding anything to the contrary contained herein, but subject to Section 11 hereof
(unless intentionally omitted), to the extent this Warrant is not previously exercised,
it shall be deemed to have been automatically exercised pursuant to a “cashless exercise” as described in Section
10 hereof (even if not surrendered), as of immediately before its expiration on the Expiration Date if the then-Closing Sale Price
exceeds the then-Exercise Price, unless the Holder notifies the Company in writing to the contrary prior to such automatic exercise.

 

5.
Delivery of Warrant Shares. 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.

 

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.

 

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.

 

    	 	3	 

    	 	 	 

    

 

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.

 

    	 	4	 

    	 	 	 

    

 

(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:

 

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

 

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).

 

    	 	5	 

    	 	 	 

    

 

11.
[Intentionally Omitted.]

 

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.

 

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.

 

    	 	6	 

    	 	 	 

    

 

(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. No amendments to or modifications of or waivers under this Warrant shall be valid or binding unless made in a writing
signed by the Company and the Holder and expressly stating that it intends to amend or modify, or waive a right under, this Warrant
and specifying the provision intended to be amended, modified or waived. Any such amendment, modification or waiver shall be effective
only in the specific instance and for the purpose for which it was given.

 

(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.

 

(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]

 

    	 	7	 

    	 	 	 

    

 

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:	 

 

    	 	8	 

    	 	 	 

    

 

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:

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