Document:

Exhibit 10.27 Consulting Agreement

    
      

    

     

                                                                                            Exhibit
      10.27

     

     

    CONSULTING
      AGREEMENT

    

    This
      Consulting Agreement is made and entered into as of the 11 day of January,
      2006,
      (the "Effective Date"), between Nephros,
      Inc., a Delaware corporation (the “Company”) and Bruce Prashker (the
“Consultant”).

    

    WHEREAS,
      the Company desires to engage Consultant to provide consulting services to
      it in
      connection with its business; and

    

    WHEREAS,
      Consultant desires to provide consulting services to the Company;

    

    In
      consideration of and for the mutual promises and covenants contained herein,
      and
      for other good and valuable consideration, the receipt of which is hereby
      acknowledged, the parties hereto agree as follows:

    

    1. Consulting
      Services.

    

    (a)
      Subject to the terms and conditions hereinafter set forth, the Company retains
      Consultant, and Consultant hereby accepts such retention by the
      Company,

    

    (i)
      to
      undertake on a best-efforts basis such consultative and advisory services as
      the
      Company shall reasonably request, in connection with the Company's business,
      including, but not limited to, accounting and finance services, and

    

    (ii)
      to
      provide such other consulting services as reasonably requested by the
      Company.

    

    (b)
      The
      Company and Consultant hereby acknowledge and agree that Consultant shall
      perform the services specified in paragraph (a) above (the "Consulting
      Services") as an independent contractor and not as an employee of the Company.
      Consultant agrees that he will file his own tax returns on the basis of his
      status as an independent contractor for the reporting of all income, social
      security, employment and other taxes due and owing on the consideration received
      by him under this Agreement and that he is responsible for the payment of such
      taxes. Similarly, Consultant shall not be entitled to receive additional
      benefits specifically associated with employment status, such as medical, dental
      and life insurance, or stock or stock options of the Company additional to
      those
      held by the Consultant as of the Effective Date above written, and shall not
      be
      entitled to participate in any other employee benefit programs. As an
      independent contractor, Consultant acknowledges, understands and agrees that
      he
      is not, and shall not represent himself to third parties as being, the agent
      or
      representative of the Company nor does he have, and shall not represent himself
      to third parties as having, power or authority to do or take any action for
      or
      on behalf of the Company, as its agent, representative or otherwise, except
      as
      specifically herein set forth.

    

    (c)
      In
      order to protect the Company's patent rights, any services provided by
      Consultant under this Agreement shall be done at the Company's business or
      at
      some other location approved in advance by the Company 

     

     

    
      
         

      

      
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    2. Consideration
      for Consulting Services.

    

    In
      consideration of Consultant's performance of the Consulting Services, during
      the
      Term (as defined in Section 4 below) the Company shall pay Consultant a
      consulting fee (the "Consulting Fee") at the rate of $1,100.00 per working
      day,
      to be paid to Consultant on a monthly basis, payable on the first day of each
      month.

    

    

    3. Term
      and Termination.

    

    (a) The
      term
      of this Agreement shall commence on the Effective Date and shall expire on
      February 24, 2006 (the "Term"); provided, however, that the Term may be extended
      upon mutual written consent.

    

    (b) The
      provisions of Sections 3 through 15 hereof shall survive any termination of
      this
      Agreement at the expiration of the Term or prior thereto.

    

    4. Ownership
      Of Proprietary Information.
      Consultant agrees that all information that has been created, discovered or
      developed by the Company, its subsidiaries, affiliates, licensors, licensees,
      successors or assigns (collectively, the "Affiliates") and information relating
      to the Company's customers, suppliers, consultants, and licensees, and/or in
      which property rights have been assigned or otherwise conveyed to the Company
      or
      the Affiliates, shall be the sole property of the Company or the Affiliates,
      as
      applicable, and the Company or the Affiliates, as the case may be, shall be
      the
      sole owner of all patents, copyrights and other rights in connection therewith,
      including without limitation the right to make application for statutory
      protection. All of the aforementioned information is hereinafter called
      "Proprietary Information." By way of illustration, but not limitation,
      Proprietary Information includes trade secrets, processes, discoveries,
      structures, inventions, designs, ideas, works of authorship, copyrightable
      works, trademarks, copyrights, formulas, data, know-how, show-how, improvements,
      inventions, product concepts, techniques, information or statistics contained
      in, or relating to, marketing plans, strate-gies, forecasts, blueprints,
      sketches, records, notes, devices, drawings, customer lists, patent
      applications, continuation applications, continuation-in-part applications,
      file
      wrapper continuation applications and divisional applications and information
      about the Company's or the Affiliates' employees and/or consultants (including,
      without limitation, the compensation, job responsibility and job performance
      of
      such employees and/or consultants).

    

    5. Delivery
      of Documents and Data.
      On the
      expiration of the Term or the earlier termination of this Agreement pursuant
      to
      Section 3 hereof, Consultant agrees that Consultant will deliver to the Company
      all documents and data of any nature and embodied in any media pertaining to
      his
      work with the Company or the Affiliates, Consultant will not take with him
      or
      deliver to anyone else any documents or data of any description and embodied
      in
      any media or any reproduction, abstract or summary of any description containing
      or pertaining to any Proprietary Information and Consultant will sign and
      deliver the "Termination Certification" attached hereto as Exhibit A.

    

    

    
       

      
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    6. Disclosure
      of Inventions.

    

    During
      the Term, Consultant agrees that he will promptly disclose to the Company,
      or
      any persons designated by it, all improvements, inventions, designs, ideas,
      works of authorship, copyrightable works, discoveries, trademarks, copyrights,
      trade secrets, formulas, processes, structures, product concepts, marketing
      plans, strategies, customer lists, information about the Company's employees
      and/or consultants (including, without limitation, job performance of such
      employees and/or consultants), techniques, blueprints, sketches, records, notes,
      devices, drawings, know-how, data, whether or not patentable, patent
      applications, continuation applications, continuation-in-part applications,
      file
      wrapper continuation applications and divisional applications, made or conceived
      or reduced to practice or learned by him, either alone or jointly with others,
      which result from use of premises or equipment owned, leased or contracted
      for
      by the Company or the Affiliates (all said improvements, inventions, designs,
      ideas, works of authorship, copyrightable works, discoveries, trademarks,
      copyrights, trade secrets, formulas, processes, structures, product concepts,
      marketing plans, strategies, customer lists, information about the Company's
      or
      the Affiliates' employees and/or consultants, techniques, blueprints, sketches,
      records, notes, devices, drawings, know-how, data, patent applications,
      continuation applications, continuation-in-part applications, file wrapper
      continuation applications and divisional applications shall be collectively
      hereinafter called "Inventions"). Notwithstanding any provisions to the contrary
      herein, however, Consultant agrees that Consultant shall not disclose to the
      Company any improvements, inventions, designs, ideas, works of authorship,
      copyrightable works, discoveries, trademarks, copyrights, trade secrets,
      formulas, processes, structures, product concepts, marketing plans, strategies,
      customer lists, blueprints, sketches, records, notes, devices, drawings,
      techniques, know-how, data, patent applications, continuation applications,
      continuation-in-part applications, file wrapper continuation applications and
      divisional applications which Consultant possesses under the obligation of
      secrecy or confidentiality to a third party.

    

    Consultant
      understands and acknowledges that all original works of authorship which are
      made by him (solely or jointly with others) while performing the Consulting
      Services and which are protectable by copyright are being created at the
      instance of the Company and are "works made for hire," as that term is defined
      in the United States Copyright Act (17 USCA, Section 101).

     

    7. Assignment
      of and Assistance with Inventions.

    

    Consultant
      hereby assigns to the Company all right, title and interest he may have or
      acquire in all Inventions and agrees that all Inventions shall be the sole
      property of the Company and its assigns, and the Company and its assigns shall
      be the sole owner of all patents, copyrights and other rights in connection
      therewith. Consultant further agrees to assist the Company in every proper
      way
      (but at the Company's expense) to obtain and from time to time enforce patents,
      copyrights or other rights on said Inventions in any and all countries, and
      to
      that end Consultant will execute all documents necessary: 

    

    
      	
            	(i)	
              to
                apply for, obtain and vest in the name of the Company alone (unless
                the
                Company otherwise directs) letters patent, copyrights or other analogous
                protection in any country throughout the world and when so obtained
                or
                vested to renew and restore the same;
                and

            

    

     

     

     

    
       

      
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            	(ii)	
              to
                defend any opposition proceedings in respect of such applications
                and any
                opposition proceedings or petitions or applications for revocation
                of such
                letters patent, copyright or other analogous
                protection.

            

    

    

    Consultant's
      obligation to assist the Company in obtaining and enforcing patents and
      copyrights for the Inventions in any and all countries shall continue beyond
      the
      Term or earlier termination of this Agreement pursuant to Section 4 hereof,
      but
      the Company agrees to compensate Consultant at a reasonable rate after the
      expiration of the Term or such earlier termination for time actually spent
      by
      Consultant at the Company's request on such assistance.

    

    The
      provisions of Section 8(a) shall not apply to any Invention meeting the
      following conditions: (i) such Invention was developed entirely on Consultant's
      own time; and (ii) such Invention was made without the use of any Company
      equipment, supplies, facilities or Proprietary Information; and (iii) such
      information does not relate either (X) directly to the business of the Company;
      or (Y) to the Company's actual or anticipated research or development; and
      (iv)
      such Invention does not result from the performance of the Consulting
      Services.

    

    

    8. No
      Breach of Duty.
      Consultant represents and warrants that the performance by him of all the terms
      of this Agreement will not breach any agreement or duty to keep in confidence
      proprietary information acquired by Consultant in confidence or in trust prior
      to his engagement hereunder. Consultant further represents and warrants that
      he
      has not entered into, and, subject to Section 10 hereof, Consultant hereby
      agrees to not enter into, any agreement either written or oral in conflict
      herewith.

    

    

    9. Insider
      Trading, Etc.
      Consultant recognizes that in the course of his duties hereunder, Consultant
      may
      receive from the Company or others information which may be considered
      "material, non-public information" concerning a public company that is subject
      to the reporting requirements of the Securities and Exchange Act of 1934, as
      amended. Consultant agrees that he will not, without the prior written consent
      of the Company, perform any of the following:

     

    (a)
      purchase, trade, offer, pledge, sell, contract to sell or to purchase or sell
      "short" or "short against the box" (as such terms are generally understood
      in
      the securities markets), or otherwise dispose of or acquire any securities
      of
      the Company or options or other derivative securities in respect of such
      securities while in possession of relevant material, non-public information
      received from the Company or others in connection herewith;

    

    (b)
      provide the Company with information with respect to any public company that
      may
      be considered material, non-public information; and

    

    (c)
      provide any person with material, non-public information, received from the
      Company, including any relative, associate, or other individual who intends
      to,
      or may, (i) trade securities with respect to the Company which is the subject
      of
      such information or (ii) otherwise directly or indirectly benefit from such
      information.

     

     

    
       

      
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    10. Non-disparagement.
      During
      and after the Term, Consultant agrees not to make any disparaging comment or
      statement about the Company or its Affiliates, whether or not true, including
      but not limited to comments which could adversely affect the conduct of the
      Company's business, any of its plans or prospects, or the business name or
      reputation of the Company.

    

    11. Remedies
      for Breach.
      Consultant understands and agrees that any breach of Sections 4 through 10
      of
      this Agreement by the Consultant could cause irreparable damage to the Company,
      and to the Affiliates and that monetary damages alone would not be adequate
      and,
      the event of such breach, the Company shall have, in addition to any and all
      remedies of law, the right to an injunction, specific performance or other
      equitable relief to prevent or redress the violation of Consultant's obligations
      under such Sections.

    

    12. Severability.
      Every
      provision of this Agreement is intended to be severable. If any term or
      provision hereof is deemed unlawful or invalid in any jurisdiction for any
      reason whatsoever, such unlawfulness or invalidity shall not affect the validity
      of the remainder of this Agreement or the enforceability of such term or
      provision in any other jurisdiction. To the extent that any such term or
      provision is held to be unlawful or invalid, the parties agree to reform such
      term or provision in such a way which will be enforceable in the jurisdiction
      to
      which such holding applies, and which will reflect, as nearly as permissible,
      the intention of the parties.

    

    13. Representation
      of Consultant; Use of Name.
      Consultant represents that there are no binding agreements to which he is a
      party or by which he is bound, forbidding or restricting his activities herein.
      In addition, Consultant consents to the use of his name in various reports,
      brochures or other documents produced by or on behalf of the Company, including
      any and all documents filed with the Securities and Exchange
      Commission.

    

    14. Miscellaneous.
      Any
      notice or other communication between parties shall be sufficiently given if
      sent by certified or registered mail, postage prepaid, if to the Company,
      addressed to it at Nephros, Inc, 3960 Broadway, New York, New York 10032, or
      if
      to Consultant, addressed to Consultant at the address set forth below
      Consultant's name on the signature page hereof, or to such address as may
      hereafter be designated in writing by one party to the other. Such notice or
      other communication shall be deemed to be given on the date of
      receipt.

    

    This
      Agreement embodies the entire agreement and understanding between the Company
      and Consultant regarding the subject matter hereof and supersedes any and all
      negotiations, prior discussions and preliminary and prior agreements and
      understandings related to the central subject matter thereof.

    

    This
      Agreement shall in all respects be governed by, and contained and enforced
      in
      accordance with the internal substantive laws of the State of New York and
      not
      the law of conflict of laws.

     

     

    
       

      
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    This
      Agreement may be executed in one or more counterparts, each of which, when
      so
      executed shall be deemed to be an original and all of which counterparts, taken
      together, shall constitute one and the same instrument.

    

    Neither
      this Agreement nor any term hereof may be amended, modified, supplemented or
      waived save in a written instrument executed by each of the parties
      hereto.

    

    IN
      WITNESS WHEREOF, the parties have hereto set their hand on the date first above
      written.

     

     

    
      	 	 	 
	 	CONSULTANT:
	 
 	 
 	 
 
	 	By:  	/s/ 
	 	
              
                

              

              Name: Bruce Prashker

               

            
	 	
              Address:
                78 Tennyson Drive

              Short Hills, NJ 07078

               

              Tel:

              SS#:__________________________________________________

            

    

     

    
      	 	 	 
	 	NEPHROS,
              INC.
	 
 	 
 	 
 
	 	By:  	/s/ 
	 	
              
Name:
              Norman Barta 
	 	Title: 
               President & CEOExhibit 10.28 Summary

    
      

    

    Exhibit
      10.28

    

     

    SUMMARY
      OF CHANGES TO CHIEF EXECUTIVE OFFICER’S COMPENSATION

    

     

    Establishment
      of Additional Milestones pursuant to Employment Agreement with Mr. Norman J.
      Barta

    

    Norman
      J.
      Barta serves as the president and chief executive officer of Nephros, Inc.
      (the
      "Company") under a written employment agreement. This agreement, as amended
      to
      date, has a term that expires on June 30, 2007. This agreement provides Mr.
      Barta with an annual base salary, since July 31, 2004, of $285,000. Under this
      agreement, the Company has agreed to pay Mr. Barta a bonus equal to 10% of
      his
      salary at the time each of six milestones is achieved. To date, three milestones
      have been achieved. The agreement provides that after July 2004, additional
      realistic milestones will be set for each year, with the total potential payment
      for these additional milestones, if achieved, each year equaling at least 20%
      of
      Mr. Barta's annual base salary as of the date the milestones are set. Pursuant
      to such agreement, the Company's Compensation Committee has established the
      following milestones for the year ending June 30, 2006. Mr. Barta may earn
      a
      cash bonus of up to $28,500 (plus up to $14,240, payable in common stock of
      the
      Company) upon achieving certain sales and EBITDA targets. In addition, Mr.
      Barta
      may earn a cash bonus of up to $28,500 for successful achievement, as determined
      by the Board, of the following goals, in part or in full: acquisition/licensing
      of mid-dilution filter, H2H
      or
      similar; development of water filtration business; development of other
      products; new intellectual property filings; sales leadership improvements;
      and
      completion of UK clinical trials.

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