Transmittal Letter Agreement for Conversion of Convertible Promissory Note – Nephros, Inc. and Noteholder

Summary

This agreement is between Nephros, Inc. and a noteholder regarding the conversion of a previously issued convertible promissory note. Nephros agrees to pay the noteholder accrued interest and issue Series C Convertible Preferred Stock in exchange for the note’s conversion. The noteholder may also elect to purchase Series A Convertible Preferred Stock at $1.00 per share or forego this right. By signing, the noteholder acknowledges that these actions fully satisfy all rights under the original note.

EX-10.16 23 dex1016.txt FORM OF TRANSMITTAL LETTER AGREEMENT, DATED AS OF APRIL 28,2003 Exhibit 10.16 As of , 2004 ---- -- Nephros, Inc. 3960 Broadway New York, NY 10032 Re: Transmittal Letter Agreement Dear Norm: Enclosed please find the original Nephros, Inc. Convertible Promissory Note dated April 8, 2002 in the principal amount of $ issued to me by -------- Nephros. Capitalized terms used but not defined herein shall have the meanings given them in such Note. Pursuant to this Transmittal Letter Agreement, Nephros and I hereby agree as follows: 1. Nephros will pay me the amount of accrued interest on the enclosed Note set forth opposite my name in Schedule I. 2. In connection with the contemplated conversion of all of the Convertible Promissory Notes dated April 8, 2002, please issue to me in respect of conversion of my Note the number of shares of Series C Convertible Preferred Stock indicated opposite my name in Schedule I. 3. In connection with warrant rights to purchase shares of --------- Conversion Stock for $1.00 per share to which my purchase of the Note entitled me, I hereby elect as follows (check only one box): [ ] to purchase shares of Series A Convertible Preferred Stock for ---------- $1.00 per share; [ ] to purchase shares of Series A Convertible Preferred Stock ----------------- for $1.00 per share, which number of shares must be less than ; or ---------- [ ] to forego my warrant rights to purchase additional shares of Conversion Stock. If I have not checked any box, then I shall be deemed to have elected to forego my warrant rights to purchase additional shares of Conversion Stock. 4. I acknowledge and agree that the payment of dividends, the issuance of Series C Convertible Preferred Stock and my right to elect to purchase shares of Series A Convertible Preferred Stock pursuant to Section 3 hereof shall be in full satisfaction of all of my rights under the enclosed Note. In witness whereof, the undersigned has executed this Transmittal Letter Agreement as of , 2004. ------ -- --------------------------------------- [NAME OF SHAREHOLDER] Accepted and agreed: NEPHROS, INC. By: ---------------------------------- Norman J. Barta, President SCHEDULE I Shares of Series Shares of Series C A Preferred Stock Principal Accrued Preferred issuable Purchaseable for Noteholder amount of Note Interest upon conversion $1.00 per share - ---------- -------------- -------- ------------------ -----------------