Document:

Exhibit 10.1

 

BUSINESS FINANCING MODIFICATION AGREEMENT 

 

This Business Financing Modification Agreement is entered into
as of April 8, 2014, by and between TSS, Inc., Innovative Power Systems, Inc., and VTC, L.L.C. (individually “Borrower”,
and collectively “Borrower” or “Borrowers”) and Bridge Bank, National Association (“Lender”).

 

1. DESCRIPTION OF EXISTING INDEBTEDNESS: Among other
indebtedness which may be owing by Borrowers to Lender, Borrowers are indebted to Lender pursuant to, among other documents, a
Business Financing Agreement, dated May 21, 2013, by and among Borrowers and Lender, as may be amended from time to time (the “Business
Financing Agreement”). Capitalized terms used without definition herein shall have the meanings assigned to them in the Business
Financing Agreement.

 

Hereinafter, all indebtedness owing by Borrowers to Lender shall
be referred to as the “Indebtedness” and the Business Financing Agreement and any and all other documents executed
by Borrowers in favor of Lender shall be referred to as the “Existing Documents.”

 

2. DESCRIPTION OF CHANGE IN TERMS.

 

A. Modification(s) to Business Financing
Agreement:

 

1)
The first sentence of Section 1.3, entitled “Due Diligence”, is hereby amended to read as follows:

 

“Lender may audit each Borrower’s Receivables
and any and all records pertaining to the Collateral, at Lender’s sole discretion; provided, an audit must be completed prior
to the initial Advance and not more frequently than once every six (6) months thereafter, unless an Event of Default hereunder
has occurred and is continuing.”

 

2)
The following subsection is hereby inserted under Section 2.2, entitled “Fees”:

 

e) Maintenance Fee. The accrued and unpaid
Maintenance Fee shall be due and payable within 10 calendar days after each Month End during the term hereof.

 

3)
Paragraph (j) of the defined term “Eligible Receivable” under Section 12.1, entitled “Definitions”,
is hereby amended in its entirety to read as follows:

 

(j)
The Receivable is not in default (a Receivable will be considered in default if any of the following occur: (i) the Receivable
is not paid within 90 days from its invoice date; provided however, that Accounts from the Account Debtor Dell with payment terms
greater than 90 days but less than 150 days shall not be considered in default for the month ended February 28, 2014, and thereafter
with payment terms greater than 90 days but less than 120 days shall not be considered in default; provided further, that the aggregate
Eligible Receivable Amount for invoices aged between 90 days and 150 days from the Account Debtor Dell shall not exceed $500,000
for the month ended February 28, 2014; (ii) the Account Debtor obligated upon the Receivable suspends business, makes a general
assignment for the benefit of creditors, or fails to pay its debts generally as they come due; or (iii) any petition is filed by
or against the Account Debtor obligated upon the Receivable under any bankruptcy law or any other law or laws for the relief of
debtors.

 

(4) The following defined term is hereby
inserted under Section 12.1, entitled “Definitions”:

 

"Maintenance Fee" means the amount
equal to 0.10 percentage points per month of the ending daily Account Balance for the relevant period.

 

    	 

    	 

    

 

3. CONSISTENT CHANGES. The Existing Documents are each
hereby amended wherever necessary to reflect the changes described above.

 

4. INTENTIONALLY OMITTED.

 

5. NO DEFENSES OF BORROWER/GENERAL RELEASE. Borrower
agrees that, as of this date, it has no defenses against the obligations to pay any amounts under the Indebtedness. Each of Borrower
and Guarantor (each, a “Releasing Party”) acknowledges that Lender would not enter into this Business Financing Modification
Agreement without Releasing Party’s assurance that it has no claims against Lender or any of Lender’s officers, directors,
employees or agents. Except for the obligations arising hereafter under this Business Financing Modification Agreement, each Releasing
Party releases Lender, and each of Lender’s and entity’s officers, directors and employees from any known or unknown
claims that Releasing Party now has against Lender of any nature, including any claims that Releasing Party, its successors, counsel,
and advisors may in the future discover they would have now had if they had known facts not now known to them, whether founded
in contract, in tort or pursuant to any other theory of liability, including but not limited to any claims arising out of or related
to the Agreement or the transactions contemplated thereby. Releasing Party waives the provisions of California Civil Code section
1542, which states:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH
THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM
OR HER, MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

 

The provisions, waivers and releases set forth in this section
are binding upon each Releasing Party and its shareholders, agents, employees, assigns and successors in interest. The provisions,
waivers and releases of this section shall inure to the benefit of Lender and its agents, employees, officers, directors, assigns
and successors in interest. The provisions of this section shall survive payment in full of the Obligations, full performance of
all the terms of this Business Financing Modification Agreement and the Agreement, and/or Lender’s actions to exercise any
remedy available under the Agreement or otherwise.

 

6. CONTINUING VALIDITY. Borrower understands and agrees
that in modifying the existing Indebtedness, Lender is relying upon Borrower’s representations, warranties, and agreements,
as set forth in the Existing Documents. Except as expressly modified pursuant to this Business Financing Modification Agreement,
the terms of the Existing Documents remain unchanged and in full force and effect. Lender’s agreement to modifications to
the existing Indebtedness pursuant to this Business Financing Modification Agreement in no way shall obligate Lender to make any
future modifications to the Indebtedness. Nothing in this Business Financing Modification Agreement shall constitute a satisfaction
of the Indebtedness. It is the intention of Lender and Borrower to retain as liable parties all makers and endorsers of Existing
Documents, unless the party is expressly released by Lender in writing. No maker, endorser, or guarantor will be released by virtue
of this Business Financing Modification Agreement. The terms of this paragraph apply not only to this Business Financing Modification
Agreement, but also to any subsequent Business Financing modification agreements.

 

7. INTENTIONALLY OMITTED.

 

8. NOTICE OF FINAL AGREEMENT. BY SIGNING THIS DOCUMENT
EACH PARTY REPRESENTS AND AGREES THAT: (A) THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES, (B) THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES, AND (C) THIS WRITTEN AGREEMENT MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR UNDERSTANDINGS OF THE PARTIES.

 

    	 

    	 

    

 

9. COUNTERSIGNATURE. This Business Financing Modification
Agreement shall become effective only when executed by Lender, Borrowers, and Guarantors.

 

 

	BORROWER:     	 	LENDER:
	      	 	 	 	 
	By:	/s/ Maura A. McNerney	 	By:	/s/ David Farrell  
	 	Chief Financial Officer	 	 	Vice President
	 	TSS, Inc.	 	 	Bridge Bank, National Association
	 	 	 	 	 
	By:    	/s/ Maura A. McNerney	 	 	 
	 	Treasurer	 	 	 
	 	Innovative Power Systems, Inc.  	 	 	 
	 	 	 	 	 
	By:    	/s/ Maura A. McNerney	 	 	 
	 	Secretary & Treasurer	 	 	 
	 	VTC, LLC  	 	 	 

 

 

Guarantor consents to the modifications to the Indebtedness
pursuant to this Business Financing Modification Agreement, hereby ratifies the provisions of the Guaranty and confirms that all
provisions of that document are in full force and effect. 

 

	GUARANTOR: 	 
	 	 	 
	By:    	/s/ Maura A. McNerney	 
	 	Secretary & Treasurer	 
	 	Total Site Solutions AZ, Inc.   	 
	 	 	 
	By:    	/s/ Maura A. McNerney	 
	 	Secretary & Treasurer	 
	 	Vortech, LLC   	 
	 	 	 
	By:    	/s/ Maura A. McNerney	 
	 	Secretary & Treasurer	 
	 	Alletag Builders, Inc.Exhibit 10.2

 

 

 

FIRST AMENDMENT TO REGISTRATION
RIGHTS AGREEMENT

 

This FIRST AMENDMENT
TO REGISTRATION RIGHTS AGREEMENT (this “Amendment”) is made and entered into as of April 14, 2014, by and between NEPHROS,
INC., a Delaware corporation (the “Company”), and LAMBDA INVESTORS LLC (“Lambda”). Capitalized terms used
herein but not defined herein shall have the meanings given to such terms in the Registration Rights Agreement (as defined herein).

 

WHEREAS, the Company
and Lambda entered into that certain Registration Rights Agreement dated as of November 12, 2013 (the “Registration Rights
Agreement”); and

 

WHEREAS, pursuant to
Section 10(a) of the Registration Rights Agreement, the Company and Lambda desire to amend the Registration Rights Agreement as
set forth in this Amendment.

 

NOW, THEREFORE, in
consideration of the premises and mutual covenants and obligations hereinafter set forth, the Company and Lambda, intending legally
to be bound, hereby agree as follows.

 

1.Definitions.
Section 1 of the Registration Rights Agreement is hereby amended to replace the following definition in its entirety: 

 

“Filing Date”
shall mean the thirtieth (30th) day after receipt by the Company of written notice from Lambda directing the Company
to file the Resale Registration Statement; provided that, if the Filing Date falls on a Saturday, Sunday or any other day
which shall be a legal holiday or a day on which the SEC is authorized or required by law or other government actions to close,
the Filing Date shall be the following Business Day.

 

2.Miscellaneous.

 

(a)Ratification
and Incorporation. Except as amended hereby, the Registration Rights Agreement is in all respects ratified and confirmed,
and all of the terms thereof shall remain in full force and effect. This Amendment is executed and shall be construed as an amendment
to the Registration Rights Agreement and, as provided in the Registration Rights Agreement, this Amendment forms a part thereof
for all purposes. The Registration Rights Agreement and this Amendment shall be read, taken and construed as one and the same instrument,
and each Holder shall be bound by the Registration Rights Agreement as amended hereby.

 

(b)Counterparts.
This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

 

(c)Governing
Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT
REGARD TO THE PRINCIPLES OF THE CONFLICT OF LAWS THEREOF.

 

(d)Severability.
In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid,
illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.

 

[Signature Page Follows
Immediately]

 

    	 

    	 

    

 

IN
WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first written above.  

 

	 	NEPHROS,
INC.
	 	 
	 	By: 	/s/ John C. Houghton	 
	 	Name:  	John C. Houghton
	 	Title:	President, Chief Executive Officer

                                                and Acting Chief Financial Officer

 

 

HOLDER:  Lambda
Investors LLC

 

	By: 	/s/ Arthur H. Amron	 
	Name:  	Arthur H. Amron
	Title:	Vice President and Assistant Secretary

 

 

Address for Notices:

Lambda Investors LLC

c/o Wexford Capital LP

411 West Putnam Avenue

Greenwich, CT 06830

 

Attention: Arthur H. Amron

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