LOAN AND SECURITY AGREEMENT

Exhibit 10.48

EXECUTION COPY

Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

LOAN AND SECURITY AGREEMENT

           THIS LOAN AND SECURITY AGREEMENT (this “ Agreement ”) dated as of the Effective Date between (i) SILICON VALLEY BANK , a California corporation with a loan production office located at One Newton Executive Park, 2221 Washington Street, Suite 200, Newton, Massachusetts 02462 (“ Bank ”), and (ii) NXSTAGE MEDICAL, INC. , a Delaware corporation (“ NxStage ”), EIR MEDICAL, INC. , a Massachusetts corporation (“ EIR ”), MEDISYSTEMS CORPORATION , a Washington corporation (“ Medisystems ”), each with offices located at 439 South Union Street, 5 ^th Floor, Lawrence, Massachusetts 01843, and MEDISYSTEMS SERVICES CORPORATION , a Nevada corporation, (“ Services ”), with offices located at 101 Convention Center Drive, Suite 850, Las Vegas, Nevada 89101 (NxStage, EIR, Medisystems and Services are individually and collectively, jointly and severally, the “ Borrower ”), provides the terms on which Bank shall lend to Borrower and Borrower shall repay Bank. The parties agree as follows:

      1 ACCOUNTING AND OTHER TERMS

          Accounting terms not defined in this Agreement shall be construed following GAAP. Calculations and determinations must be made following GAAP. Capitalized terms not otherwise defined in this Agreement shall have the meanings set forth in Section 13. All other terms contained in this Agreement, unless otherwise indicated, shall have the meaning provided by the Code to the extent such terms are defined therein.

      2 LOAN AND TERMS OF PAYMENT

      2.1 Promise to Pay . Borrower hereby unconditionally, jointly and severally, promises to pay Bank the outstanding principal amount of all Credit Extensions and accrued and unpaid interest thereon as and when due in accordance with this Agreement.

      2.1.1 Revolving Advances.

          (a) Availability . Subject to the terms and conditions of this Agreement and to deduction of Reserves, Bank shall make Advances not exceeding the Availability Amount. Amounts borrowed under the Revolving Line may be repaid, and prior to the Revolving Line Maturity Date, reborrowed, subject to the applicable terms and conditions precedent herein.

          (b) Termination; Repayment . The Revolving Line terminates on the Revolving Line Maturity Date, when the principal amount of all Advances, the unpaid interest thereon, and all other Obligations relating to the Revolving Line shall be immediately due and payable.

      2.1.2 Letters of Credit Sublimit.

          As part of the Revolving Line and subject to deduction of Reserves, Bank shall issue or have issued Letters of Credit denominated in Dollars or a Foreign Currency for Borrower’s account. The aggregate Dollar Equivalent amount utilized for the issuance of Letters of Credit shall at all times reduce the amount otherwise available for Advances under the Revolving Line. The aggregate Dollar Equivalent of the face amount of outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit and any Letter of Credit Reserve) may not exceed the lesser of (A) Seven Million Five Hundred Thousand Dollars ($7,500,000), minus (i) the sum of all amounts used (and not re-paid) for Cash Management Services, and minus (ii) the FX Reduction Amount, or (B) the lesser of Revolving Line or the Borrowing Base, minus (i) the sum of all outstanding principal amounts of any Advances (including any amounts used and not re-paid for Cash Management Services), and minus (ii) the FX Reduction Amount.

          (a) If, on the Revolving Line Maturity Date (or the effective date of any termination of this Agreement), there are any outstanding Letters of Credit, then on such date Borrower shall provide to Bank cash collateral in an amount equal to 105% of the Dollar Equivalent of the face amount of all such Letters of Credit plus all interest, fees, and costs due or to become due in connection therewith (as estimated by Bank in its good faith business judgment), to secure all of the Obligations relating to such Letters of Credit. All Letters of Credit shall be in form and substance acceptable to Bank in its sole discretion and shall be subject to the terms and conditions of Bank’s standard Application and Letter of Credit Agreement (the “ Letter of Credit Application ”). Borrower agrees to execute any further documentation in connection with the Letters of Credit as Bank may reasonably

request. Borrower further agrees to be bound by the regulations and interpretations of the issuer of any Letters of Credit guarantied by Bank and opened for Borrower’s account or by Bank’s interpretations of any Letter of Credit issued by Bank for Borrower’s account, and Borrower understands and agrees that Bank shall not be liable for any error, negligence, or mistake, whether of omission or commission, in following Borrower’s instructions or those contained in the Letters of Credit or any modifications, amendments, or supplements thereto, absent Bank’s gross negligence or wilfull misconduct.

          (b) The obligation of Borrower to immediately reimburse Bank for drawings made under Letters of Credit shall be absolute, unconditional, and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement, such Letters of Credit, and the Letter of Credit Application.

          (c) Borrower may request that Bank issue a Letter of Credit payable in a Foreign Currency. If a demand for payment is made under any such Letter of Credit, Bank shall treat such demand as an Advance to Borrower of the Dollar Equivalent of the amount thereof (plus fees and charges in connection therewith such as wire, cable, SWIFT or similar charges).

          (d) To guard against fluctuations in currency exchange rates, upon the issuance of any Letter of Credit payable in a Foreign Currency, Bank shall create a reserve (the “ Letter of Credit Reserve ”) under the Revolving Line in an amount equal to ten percent (10%) of the face amount of such Letter of Credit upon the issuance thereof. The amount of the Letter of Credit Reserve may be adjusted by Bank from time to time to account for fluctuations in the exchange rate. The availability of funds under the Revolving Line shall be reduced by the amount of such Letter of Credit Reserve for as long as such Letter of Credit remains outstanding and such reduction shall cease when such Letter of Credit is no longer outstanding.

      2.1.3 Foreign Exchange Sublimit. As part of the Revolving Line and subject to the deduction of Reserves, Borrower may enter into foreign exchange contracts with Bank under which Borrower commits to purchase from or sell to Bank a specific amount of Foreign Currency (each, a “ FX Forward Contract ”) on a specified date (the “ Settlement Date ”). The aggregate amount of FX Forward Contracts at any one time may not exceed ten (10) times the lesser of (A) Seven Million Five Hundred Thousand Dollars ($7,500,000), minus (i) the sum of all amounts used (and not re-paid) for Cash Management Services, and minus (ii) the Dollar Equivalent of the face amount of any outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit and any Letter of Credit Reserve), or (B) the lesser of Revolving Line or the Borrowing Base, minus (i) the sum of all outstanding principal amounts of any Advances (including any amounts used (and not repaid) for Cash Management Services), and minus (ii) the Dollar Equivalent of the face amount of any outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit and any Letter of Credit Reserve). The amount otherwise available for Credit Extensions under the Revolving Line shall be reduced by an amount equal to ten percent (10%) of each outstanding FX Forward Contract (the “ FX Reduction Amount ”). Any amounts needed to fully reimburse Bank for any amounts not paid by Borrower in connection with FX Forward Contracts will be treated as Advances under the Revolving Line and will accrue interest at the interest rate applicable to Advances.

      2.1.4 Cash Management Services Sublimit. Borrower may use the Revolving Line for Bank’s cash management services, which may include merchant services, direct deposit of payroll, business credit card, and check cashing services identified in Bank’s various cash management services agreements (collectively, the “ Cash Management Services ”), in an aggregate amount not to exceed the lesser of (A) Seven Million Five Hundred Thousand Dollars ($7,500,000), minus (i) the Dollar Equivalent of the face amount of any outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit and any Letter of Credit Reserve), and minus (ii) the FX Reduction Amount, or (B) the lesser of Revolving Line or the Borrowing Base, minus (i) the sum of all outstanding principal amounts of any Advances, minus the Dollar Equivalent of the face amount of any outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit and any Letter of Credit Reserve), and minus (iii) the FX Reduction Amount. Any amounts Bank pays on behalf of Borrower for any Cash Management Services will be treated as Advances under the Revolving Line and will accrue interest at the interest rate applicable to Advances.

      2.2 Overadvances. If, at any time, the sum of (a) the outstanding principal amount of any Advances (including any amounts used (and not re-paid) for Cash Management Services); plus (b) the face amount of any outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit and any Letter of Credit Reserve); plus (c) the FX Reduction Amount exceeds the lesser of either the Revolving Line or the Borrowing Base (such excess amount being an “ Overadvance ”), Borrower shall immediately pay to Bank in cash such Overadvance. Without limiting Borrower’s obligation to repay Bank any amount of the Overadvance, Borrower agrees to pay Bank interest on the outstanding amount of any Overadvance if not paid when due on demand, at the Default Rate.

      2.3 Payment of Interest on the Credit Extensions.

          (a) Interest Rate .

               (i)  Advances . Subject to Section 2.3(b), the principal amount outstanding under the Revolving Line shall accrue interest at floating per annum rate equal to two percentage points (2.00%) above the Prime Rate, which interest shall be payable monthly, in arrears, in accordance with Section 2.3(f) below.

          (b) Default Rate . Immediately upon the occurrence and during the continuance of an Event of Default, Obligations shall bear interest at a rate per annum which is four percentage points (4.00%) above the rate that is otherwise applicable thereto (the “ Default Rate ”) unless Bank otherwise elects from time to time in its sole discretion to impose a smaller increase. Fees and expenses which are required to be paid by Borrower pursuant to the Loan Documents (including, without limitation, Bank Expenses) but are not paid when due shall bear interest until paid at a rate equal to the highest rate applicable to the Obligations. Payment or acceptance of the increased interest rate provided in this Section 2.3(b) is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Bank.

          (c) Adjustment to Interest Rate . Changes to the interest rate of any Credit Extension based on changes to the Prime Rate shall be effective on the effective date of any change to the Prime Rate and to the extent of any such change.

          (d) Computation; 360-Day Year . In computing interest, the date of the making of any Credit Extension shall be included and the date of payment shall be excluded; provided, however, that if any Credit Extension is repaid on the same day on which it is made, such day shall be included in computing interest on such Credit Extension. Interest shall be computed on the basis of a 360-day year for the actual number of days elapsed.

          (e) Debit of Accounts . Bank may debit any of Borrower’s deposit accounts, including the Designated Deposit Account, for principal and interest payments or any other amounts Borrower owes Bank when due. These debits shall not constitute a set-off.

          (f) Interest Payment Date . Unless otherwise provided, interest is payable monthly on the last calendar day of each month.

          (g) Payment; Interest Computation . Interest is payable monthly on the last calendar day of each month. In computing interest on the Obligations, all Payments received after 12:00 noon Eastern time on any day shall be deemed received on the next Business Day. Bank shall not, however, be required to credit Borrower’s account for the amount of any item of payment which is unsatisfactory to Bank in its good faith business judgment, and Bank may charge Borrower’s Designated Deposit Account for the amount of any item of payment which is returned to Bank unpaid.

      2.4 Fees. Borrower shall pay to Bank:

          (a) Anniversary Fee . A fully earned, non refundable annual fee equal to (i) Seventy Five Thousand Dollars ($75,000), payable on the earlier to occur of (X) the occurrence of an Event of Default and (Y) 365 days after the Effective Date (the “ First Anniversary ”); and (ii) Thirty Seven Thousand Five Hundred Dollars ($37,500), on a pro-rated basis through the Revolving Line Maturity Date, payable on the earlier to occur of (X) after the First Anniversary, the occurrence of an Event of Default, and (Y) 365 days after the First Anniversary.

          (b) Letter of Credit Fee . Bank’s customary fees and expenses for the issuance or renewal of Letters of Credit, upon the issuance of such Letter of Credit, each anniversary of the issuance during the term of such Letter of Credit, and upon the renewal of such Letter of Credit by Bank;

          (c) Termination Fee . Upon the conditions set forth in and subject to the terms of Section 12.1, a termination fee;

          (d) Unused Revolving Line Facility Fee . A fee (the “ Unused Revolving Line Facility Fee ”), payable monthly, in arrears, on a calendar year basis, in an amount equal to one-half of one percent (0.50%) per annum of the average unused portion of the Revolving Line, as determined by Bank. The unused portion of the

Revolving Line, for the purposes of this calculation, shall not include amounts reserved for products provided in connection with Cash Management Services, FX Forward Contracts or Letters of Credit. Borrower shall not be entitled to any credit, rebate or repayment of any Unused Revolving Line Facility Fee previously earned by Bank pursuant to this Section notwithstanding any termination of the Agreement or the suspension or termination of Bank’s obligation to make loans and advances hereunder, including during any Streamline Period; and

          (e) Bank Expenses . All Bank Expenses (including reasonable attorneys’ fees and expenses for documentation and negotiation of this Agreement incurred through and after the Effective Date, when due.

      2.5 Payments; Application of Payments.

          (a) All payments (including prepayments) to be made by Borrower under any Loan Document shall be made in immediately available funds in U.S. Dollars, without setoff or counterclaim, before 12:00 noon Eastern time on the date when due. Payments of principal and/or interest received after 12:00 noon Eastern time are considered received at the opening of business on the next Business Day. When a payment is due on a day that is not a Business Day, the payment shall be due the next Business Day, and additional fees or interest, as applicable, shall continue to accrue until paid.

          (b) Except as provided in the proviso in Section 6.3(c) hereof, Bank shall apply the whole or any part of collected funds against the Revolving Line or credit such collected funds to a depository account of Borrower with Bank (or an account maintained by an Affiliate of Bank), the order and method of such application to be in the sole discretion of Bank. Borrower shall have no right to specify the order or the accounts to which Bank shall allocate or apply any payments required to be made by Borrower to Bank or otherwise received by Bank under this Agreement when any such allocation or application is not specified elsewhere in this Agreement.

      3 CONDITIONS OF LOANS

      3.1 Conditions Precedent to Initial Credit Extension. Bank’s obligation to make the initial Credit Extension is subject to the condition precedent that Bank shall have received, in form and substance satisfactory to Bank, such documents, and completion of such other matters, as Bank may reasonably deem necessary or appropriate, including, without limitation:

          (a) duly executed original signatures to the Loan Documents;

          (b) duly executed original signatures to the Control Agreements, if any;

          (c) Borrower’s Operating Documents and a good standing certificate of Borrower certified by the Secretary of State of the applicable jurisdiction of Borrower as of a date no earlier than thirty (30) days prior to the Effective Date;

          (d) duly executed original signatures to the Secretary’s Certificate with completed Borrowing Resolutions for Borrower;

          (e) the Asahi Intercreditor Agreement by and between Asahi and Bank, together with the duly executed original signatures thereto;

          (f) certified copies, dated as of a recent date, of financing statement searches, as Bank shall request, accompanied by written evidence (including any UCC termination statements) that the Liens indicated in any such financing statements either constitute Permitted Liens or have been or, in connection with the initial Credit Extension, will be terminated or released;

          (g) the Perfection Certificates of Borrower, together with the duly executed original signatures thereto;

          (h) the IP Agreement of Borrower, together with the duly executed original signatures thereto and any required schedules thereto;

          (i) (1) within forty-five (45) days of the Effective Date, obtain a landlord’s consent in favor of Bank for the Borrower’s leased location located at 439 South Union Street, 5 ^th Floor, Lawrence, MA 01843, together with the duly executed signatures thereto; and (2) for each other leased location of the Borrower existing on the Effective Date with assets greater than $250,000, Borrower shall, within forty-five (45) days of the Effective Date, use commercially reasonable efforts to obtain a landlord’s consent for each such location, from each respective landlord thereof, together with the duly executed original signatures thereto;

          (j) (1) within forty-five (45) days of the Effective Date, obtain a bailee’s/warehouseman’s waiver executed by Kuehne & Nagle, Inc., for the Borrower’s leased warehouse space located at 1800 Waters Ridge Drive, Suite 100, Lewisville, Texas 75057; and (2) for each other leased warehouse space of the Borrower in existence on the Effective Date with assets greater than $250,000, Borrower shall, within forty-five (45) days of the Effective Date, use commercially reasonable efforts to obtain a bailee’s/warehouseman’s waiver for each such location, from each respective bailee/warehouseman, together with the duly executed original signatures thereto;

          (k) the duly executed original signatures to each Guaranty, together with a Secretary’s Certificate/duly executed original signatures to the completed Borrowing Resolutions for each Guarantor;

          (l) a legal opinion of Borrower’s counsel as to authority of the Borrowers and enforceability of the Loan Documents, in form and substance acceptable to Bank, in its reasonable discretion, dated as of the Effective Date together with the duly executed original signature thereto;

          (m) evidence satisfactory to Bank that the insurance policies required by Section 6.7 hereof are in full force and effect, together with appropriate evidence showing lender loss payable and/or additional insured clauses or endorsements in favor of Bank; and

          (n) payment of the fees and Bank Expenses then due as specified in Section 2.4 hereof.

      3.2 Conditions Precedent to all Credit Extensions. Bank’s obligations to make each Credit Extension, including the initial Credit Extension, is subject to the following conditions precedent:

          (a) except as otherwise provided in Section 3.4(a), timely receipt of an executed Transaction Report;

          (b) the representations and warranties in this Agreement shall be true, accurate, and complete in all material respects on the date of the Transaction Report and on the Funding Date of each Credit Extension; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date, and no Default or Event of Default shall have occurred and be continuing or result from the Credit Extension. Each Credit Extension is Borrower’s representation and warranty on that date that the representations and warranties in this Agreement remain true, accurate, and complete in all material respects; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date; and

          (c) in Bank’s reasonable discretion, there has not been a Material Adverse Change.

      3.3 Covenant to Deliver. Borrower agrees to deliver to Bank each item required to be delivered to Bank under this Agreement as a condition precedent to any Credit Extension. Borrower expressly agrees that a Credit Extension made prior to the receipt by Bank of any such item shall not constitute a waiver by Bank of Borrower’s obligation to deliver such item, and the making of any Credit Extension in the absence of a required item shall be in Bank’s sole discretion.

      3.4 Procedures for Borrowing. Advances. Subject to the prior satisfaction of all other applicable conditions to the making of an Advance set forth in this Agreement, to obtain an Advance other than Advances under Sections 2.1.2 or 2.1.4), Borrower shall notify Bank (which notice shall be irrevocable) by electronic mail, facsimile, or telephone by 12:00 noon Eastern time on the Funding Date of the Advance. Together with any such electronic or facsimile notification, Borrower shall deliver to Bank by electronic mail or facsimile a completed

Transaction Report executed by a Responsible Officer or his or her designee. Bank may rely on any telephone notice given by a person whom Bank reasonably believes is a Responsible Officer or designee. Bank shall credit Advances to the Designated Deposit Account. Bank may make Advances under this Agreement based on instructions from a Responsible Officer or his or her designee or without instructions if the Advances are necessary to meet Obligations which have become due.

      4 CREATION OF SECURITY INTEREST

      4.1 Grant of Security Interest. Borrower hereby grants Bank, to secure the payment and performance in full of all of the Obligations, a continuing security interest in, and pledges to Bank, the Collateral, wherever located, whether now owned or hereafter acquired or arising, and all proceeds and products thereof.

      4.2 Priority of Security Interest. Borrower represents, warrants, and covenants that the security interest granted herein is and shall at all times continue to be a first priority perfected security interest in the Collateral (subject only to Permitted Liens that may have superior priority to Bank’s Lien under this Agreement and the Asahi Intercreditor Agreement). If Borrower shall acquire a commercial tort claim in excess of Two Hundred Fifty Thousand Dollars ($250,000), Borrower shall promptly notify Bank in a writing signed by Borrower of the general details thereof and grant to Bank in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance reasonably satisfactory to Bank.

          If this Agreement is terminated, Bank’s Lien in the Collateral shall continue until the Obligations (other than inchoate indemnity obligations and any other obligations which, by their terms, are to survive the termination of this Agreement) are repaid in full in cash. Upon payment in full in cash of the Obligations (other than inchoate indemnity obligations and any other obligations which, by their terms, are to survive the termination of this Agreement) and at such time as Bank’s obligation to make Credit Extensions has terminated, Bank shall, at Borrower’s sole cost and expense, release its Liens in the Collateral and all rights therein shall revert to Borrower.

      4.3 Authorization to File Financing Statements. Borrower hereby authorizes Bank to file financing statements, without notice to Borrower, with all appropriate jurisdictions to perfect or protect Bank’s interest or rights hereunder, including a notice that any disposition of the Collateral, by either Borrower or any other Person other than in accordance with this Agreement, shall be deemed to violate the rights of Bank under the Code. Such financing statements may indicate the Collateral as “all assets of the Debtor” or words of similar effect, or as being of an equal or lesser scope, or with greater detail, all in Bank’s discretion.

      5 REPRESENTATIONS AND WARRANTIES

          Borrower represents and warrants as follows:

      5.1 Due Organization; Authorization; Power and Authority. Borrower and each of its Subsidiaries are duly existing and in good standing as a Registered Organization in its jurisdiction of formation and each is qualified and licensed to do business and each is in good standing in any jurisdiction in which the conduct of each of its business or its ownership of property requires that it be qualified except where the failure to do so would not reasonably be expected to have a material adverse effect on Borrower’s business taken as a whole. In connection with this Agreement, Borrower has delivered to Bank completed certificates each signed by Borrower, each entitled “Perfection Certificate”. Borrower represents and warrants to Bank that (a) Borrower’s exact legal name is that indicated on the Perfection Certificate and on the signature page hereof; (b) Borrower is an organization of the type and is organized in the jurisdictions set forth in the Perfection Certificate; (c) the Perfection Certificate accurately sets forth Borrower’s organizational identification number or accurately states that Borrower has none; (d) the Perfection Certificate accurately sets forth each Borrower’s place of business, or, if more than one, its chief executive office as well as Borrower’s mailing address (if different than its chief executive office); (e) except as set forth in the Perfection Certificate, Borrower (and each of its predecessors) has not, in the past five (5) years, changed its jurisdiction of formation, organizational structure or type, or any organizational number assigned by its jurisdiction; and (f) all other information set forth on the Perfection Certificate pertaining to Borrower and each of its Subsidiaries is accurate and complete in all material respects (it being understood and agreed that Borrower may from time to time update certain information in the Perfection Certificate after the Effective Date, and such information is deemed automatically updated, to the extent changes are permitted by one or more specific provisions in this Agreement). If Borrower is not now a Registered Organization but later becomes one, Borrower shall promptly notify Bank of such occurrence and provide Bank with Borrower’s organizational identification number.

          The execution, delivery and performance by Borrower of the Loan Documents to which it is a party have been duly authorized, and do not (i) conflict with any of Borrower’s organizational documents (except where Borrower has obtained any necessary consents), (ii) contravene, conflict with, constitute a default under or violate any material Requirement of Law, (iii) contravene, conflict or violate any applicable order, writ, judgment, injunction, decree, determination or award of any Governmental Authority by which Borrower or any of its Subsidiaries or any of their property or assets may be bound or affected, (iv) require any action by, filing, registration, or qualification with, or Governmental Approval from, any Governmental Authority (except such Governmental Approvals which have already been obtained and are in full force and effect) or (v) constitute an event of default under any material agreement by which Borrower is bound (after giving effect to any consents or amendments obtained concurrently herewith). Borrower is not in default under any agreement to which it is a party or by which it is bound in which the default would reasonably be expected to have a material adverse effect on Borrower’s business taken as a whole.

      5.2 Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to grant a Lien hereunder, free and clear of any and all Liens except Permitted Liens. Other than as permitted pursuant to Section 6.8 hereof, Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors.

          As of the date hereof, no portion of the Collateral (other than (i) Field Equipment maintained with Borrower’s customers and/or end users of such Field Equipment, and (ii) other assets with a value of no more than $250,000 at any location) is in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral (other than (i) Field Equipment maintained with Borrower’s customers and/or end users of such Field Equipment, and (ii) other assets with a value of no more than $250,000 at any location) shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral to a bailee (other than (i) Field Equipment maintained with Borrower’s customers and/or end users of such Field Equipment, and (ii) other assets with a value of no more than $250,000 at any location), then Borrower will use commercially reasonable efforts to deliver to the Bank an executed bailee agreement in form and substance satisfactory to Bank in its reasonable discretion.

          All Inventory is in all material respects of good and marketable quality, free from material defects.

          Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and, as of the date hereof noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business taken as a whole.

          Except as noted on the Perfection Certificate, and as Borrower may notify Bank pursuant to Section 6.10(c) hereof, Borrower is not a party to, nor is it bound by, any Restricted License (other than any open source or over the counter software that is commercially available to the public).

      5.3 Accounts Receivable; Inventory. For any Eligible Account in any Borrowing Base Certificate, all statements made and all unpaid balances appearing in all invoices, instruments and other documents evidencing such Eligible Accounts are and shall be true and correct and all such invoices, instruments and other documents, and all of Borrower’s Books are genuine and in all respects what they purport to be. Whether or not an Event of Default has occurred and is continuing, Bank may notify any Account Debtor owing Borrower money of Bank’s security interest in such funds and verify the amount of such Eligible Account; provided that, prior to the occurrence of an Event of Default, acceptable forms of notification and verification may include such form and manner as will be reasonably determined by Bank and Borrower. All sales and other transactions underlying or giving rise to each Eligible Account shall comply in all material respects with all applicable laws and governmental rules and regulations. Borrower has no knowledge of any actual or imminent Insolvency Proceeding of any Account Debtor whose accounts are Eligible Accounts in any Borrowing Base Certificate. To the best of Borrower’s knowledge, all

signatures and endorsements on all documents, instruments, and agreements relating to all Eligible Accounts are genuine, and all such documents, instruments and agreements are legally enforceable in accordance with their terms.

          For any item of Inventory consisting of “Eligible Inventory” in any Borrowing Base Certificate, such Inventory (a) consists of finished goods, in good, new, and salable condition, which is not perishable, returned, consigned, obsolete, not sellable, damaged, or defective, and is not comprised of demonstrative or custom inventory, works in progress, packaging or shipping materials, or supplies; (b) meets in all material respects all applicable governmental standards; (c) has been manufactured in compliance with the Fair Labor Standards Act, to the extent applicable; (d) is not subject to any Liens, except the first priority Liens granted or in favor of Bank under this Agreement or any of the other Loan Documents and Permitted Liens; and (e) is located at the locations identified by Borrower in the Perfection Certificate where it maintains Inventory (or at any location permitted under Section 5.2).

      5.4 Litigation. There are no actions or proceedings pending or, to the knowledge of the Responsible Officers, threatened in writing against Borrower or any of its Subsidiaries that would reasonably be expected to result in damages or costs to Borrower of more than, individually, Five Hundred Thousand Dollars ($500,000), or in the aggregate One Million Dollars ($1,000,000).

      5.5 Financial Condition . All consolidated financial statements for Borrower and any of its Subsidiaries delivered to Bank fairly present in all material respects Borrower’s consolidated financial condition and Borrower’s consolidated results of operations (for the periods presented, subject to the absence of footnotes and year-end adjustments for the interim financial statements). There has not been any material deterioration in Borrower’s consolidated financial condition since the date of the most recent financial statements submitted to Bank.

      5.6 Solvency . The fair salable value of Borrower’s assets (including goodwill minus disposition costs) exceeds the fair value of its liabilities; Borrower is not left with unreasonably small capital after the transactions in this Agreement; and Borrower is able to pay its debts (including trade debts) as they mature.

      5.7 Regulatory Compliance. Borrower is not an “investment company” or except as disclosed in the Perfection Certificate, a company “controlled” by an “investment company” under the Investment Company Act of 1940, as amended. Borrower is not engaged as one of its important activities in extending credit for margin stock (under Regulations X, T and U of the Federal Reserve Board of Governors). Borrower has complied in all material respects with the Federal Fair Labor Standards Act, the rules and regulations promulgated by the U.S. Food and Drug Administration and the U.S. Food, Drug and Cosmetic Act. Neither Borrower nor any of its Subsidiaries is a “holding company” or an “affiliate” of a “holding company” or a “subsidiary company” of a “holding company” as each term is defined and used in the Public Utility Holding Company Act of 2005. Borrower has not violated any laws, ordinances or rules, the violation of which would reasonably be expected to have a material adverse effect on its business. None of Borrower’s or any of its Subsidiaries’ properties or assets has been used by Borrower or any Subsidiary or, to the best of Borrower’s knowledge, by previous Persons, in disposing, producing, storing, treating, or transporting any hazardous substance other than legally, except where it would not reasonably be expected to have a material adverse effect on Borrower’s business taken as a whole. Borrower and each of its Subsidiaries have obtained all consents, approvals and authorizations of, made all declarations or filings with, and given all notices to, all Government Authorities that are necessary to continue their respective businesses as currently conducted, except where the failure to do so would not reasonably be expected to have a material adverse effect on the Borrower’s business, taken as a whole.

      5.8 Subsidiaries; Investments . Borrower does not own any stock, partnership interest or other equity securities except for Permitted Investments.

      5.9 Tax Returns and Payments; Pension Contributions . Borrower has timely filed all required tax returns and reports (except such returns or reports related to taxes as may be due or owing in an amount less than One Hundred Thousand Dollars ($100,000) in the aggregate), and Borrower has timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower (except such returns or reports related to taxes as may be due or owing in an amount less than One Hundred Thousand Dollars ($100,000) in the aggregate). Borrower may defer payment of any contested taxes, provided that with respect to any such taxes in excess of One Hundred Thousand Dollars ($100,000), Borrower (a) in good faith contests its obligation to pay the taxes by appropriate proceedings promptly and diligently instituted and conducted, (b) notifies Bank in writing of the commencement of, and any material development in, the proceedings, (c) posts bonds or takes any other steps required to prevent the governmental authority levying such contested taxes from obtaining a Lien upon any of the

Collateral that is other than a “Permitted Lien”. Borrower is unaware of any claims or adjustments proposed for any of Borrower’s prior tax years which would reasonably be expected to result in additional taxes in excess of One Hundred Thousand Dollars ($100,000) becoming due and payable by Borrower. Borrower has paid all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with their terms, and Borrower has not withdrawn from participation in, and has not permitted partial or complete termination of, or permitted the occurrence of any other event with respect to, any such plan which would reasonably be expected to result in any liability of Borrower, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency.

      5.10 Use of Proceeds . Borrower shall use the proceeds of the Credit Extensions solely as working capital and to fund its general business requirements and not for personal, family, household or agricultural purposes.

      5.11 Full Disclosure . No written representation, warranty or other statement of Borrower in any certificate or written statement given to Bank in connection with this Agreement, as of the date such representation, warranty, or other statement was made, taken together with all such written certificates and written statements given to Bank, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained in the certificates or statements not misleading (it being recognized by Bank that the projections and forecasts provided by Borrower in good faith and based upon reasonable assumptions are not viewed as facts and that actual results during the period or periods covered by such projections and forecasts may differ from the projected or forecasted results).

      5.12 Definition of “Knowledge.” For purposes of the Loan Documents, whenever a representation or warranty is made to Borrower’s knowledge or awareness, to the “best of” Borrower’s knowledge, or with a similar qualification, knowledge or awareness means the actual knowledge, after reasonable investigation, of the Responsible Officers.

      6 AFFIRMATIVE COVENANTS

          Borrower shall do all of the following:

      6.1 Government Compliance . Maintain its and all its Subsidiaries’ legal existence and good standing in their respective jurisdictions of formation and maintain qualification in each jurisdiction in which the failure to so qualify would reasonably be expected to have a material adverse effect on Borrower’s business or operations taken as a whole. Borrower shall comply, and have each Subsidiary comply, with all laws, ordinances and regulations to which it is subject, including, without limitation, regulations of the U.S. Food and Drug Administration and regulations promulgated pursuant to the U.S. Food, Drug and Cosmetic Act, the noncompliance with which would reasonably be expected to have a material adverse effect on Borrower’s business taken as a whole.

      6.2 Financial Statements, Reports, Certificates .

          (a) Borrower shall provide Bank with the following:

                    (i) (A) bi-weekly, and (B) upon each request for a Credit Extension, a Transaction Report;

                    (ii) within thirty (30) days after the end of each month, (A) monthly accounts receivable agings, aged by invoice date, (B) monthly accounts payable agings, aged by invoice date, and outstanding or held check registers, if any, (C) (x) monthly reconciliations of accounts receivable agings (aged by invoice date), Transaction Reports, and such portion of the general ledger as Bank may reasonably request, and (y) to the extent requested by Bank in its good faith business judgment, monthly Deferred Revenue reports, detailed backlog reports and bookings reports, in each case prepared by Borrower in a manner consistent with past practices, and (D) monthly perpetual inventory reports prepared in accordance with GAAP or such other inventory reports as are requested by Bank in its good faith business judgment;

                    (iii) as soon as available, and in any event within thirty (30) days after the end of each month, monthly unaudited consolidated and consolidating financial statements;

                    (iv) within thirty (30) days after the end of each month a monthly Compliance Certificate signed by a Responsible Officer, certifying that as of the end of such month, Borrower was in compliance with all of the terms of this Agreement, and setting forth calculations showing compliance with the financial covenants set forth in this Agreement and such other information as Bank shall reasonably request, including, without limitation, a statement that at the end of such month there were no held checks;

                    (v) as soon as available, and in any event within forty-five (45) days after the end of each fiscal quarter of Borrower, quarterly consolidated unaudited financial statements;

                    (vi) within sixty (60) days after the end of each fiscal year of Borrower, annual operating budgets (including income statements, balance sheets and cash flow statements, by month) for the upcoming fiscal year of Borrower, as approved by Borrower’s board of directors, and such additional financial projections as may be requested by Bank in its good faith business judgment;

                    (vii) as soon as available, and in any event within one hundred twenty (120) days following the end of Borrower’s fiscal year, annual consolidated financial statements certified by, and with an unqualified opinion with respect to the consolidated financial statements, of independent certified public accountants reasonably acceptable to Bank;

                    (viii) within five (5) days of delivery, copies of all material statements, reports and notices made available to Borrower’s security holders or to any holders of Subordinated Debt, in their respective capacity as such;

                    (ix) a prompt report of any legal actions pending or threatened in writing against Borrower or any of its Subsidiaries that would reasonably be expected to result in damages or costs to Borrower or any of its Subsidiaries of, individually, Five Hundred Thousand Dollars ($500,000) or in the aggregate One Million Dollars ($1,000,000) or more;

          The items specified in clauses (v), (vii) and (viii) shall be deemed delivered by sending a copy to the Bank or by timely filing such items with the SEC, or a link thereto or a copy thereof on borrower’s or another website on the Internet.

          Notwithstanding the foregoing, during a Streamline Period, provided no Event of Default has occurred and is continuing, Borrower shall be required to provide Bank with the Transaction Reports required pursuant to clause (a)(i)(A) above monthly, within thirty (30) days after the end of each month. In any event, Borrower may provide Bank with an updated Transaction Report at any time in its sole discretion;

          (b) In the event that Borrower is or becomes subject to the reporting requirements under the Securities Exchange Act of 1934, as amended, within five (5) days after filing, all reports on Form 10-K, 10-Q and 8-K filed with the SEC or a link thereto or copy thereof on Borrower’s or another website on the Internet.

          (c) (i) quarterly written notice of any material change in the composition of the Intellectual Property, (ii) quarterly written notice of the registration of any Copyright (including any subsequent ownership right of Borrower in or to any Copyright), Patent or Trademark not previously disclosed to Bank, or (iii) notice of Borrower’s knowledge of an event that would reasonably be expected to have a material adverse effect on the value of the Intellectual Property.

      6.3 Accounts Receivable .

          (a) Schedules and Documents Relating to Accounts . Borrower shall deliver to Bank Transaction Reports and schedules of collections, as provided in Section 6.2, on Bank’s standard forms; provided , however , that Borrower’s failure to execute and deliver the same shall not affect or limit Bank’s Lien and other rights in all of Borrower’s Accounts, nor shall Bank’s failure to advance or lend against a specific Account affect or limit Bank’s Lien and other rights therein. If requested by Bank, Borrower shall furnish Bank with copies (or, at Bank’s request, originals) of all contracts, orders, invoices, and other similar documents, and all shipping instructions, delivery receipts, bills of lading, and other evidence of delivery, for any goods the sale or disposition of which gave rise to such Accounts. In addition, Borrower shall deliver to Bank, on its request, the originals of all instruments, chattel paper, security agreements, guarantees and other documents and property evidencing or

securing any Accounts, in the same form as received, with all necessary endorsements, and copies of all credit memos.

          (b) Disputes . Borrower shall promptly notify Bank of all disputes or claims relating to Accounts owed to Borrower in an aggregate amount in excess of One Hundred Thousand Dollars ($100,000) for all such accounts. Borrower may forgive (completely or partially), compromise, or settle any Account for less than payment in full, or agree to do any of the foregoing so long as (i) Borrower does so in good faith, in a commercially reasonable manner, in the ordinary course of business, in arm’s-length transactions, and reports the same to Bank in the regular reports provided to Bank; (ii) no Default or Event of Default has occurred and is continuing; and (iii) after taking into account all such discounts, settlements and forgiveness, the total outstanding Advances will not exceed the Availability Amount.

          (c) Collection of Accounts . Borrower shall have the right to collect all Accounts, unless and until a Default or an Event of Default has occurred and is continuing. All payments on, and proceeds of, Accounts shall be deposited directly by the applicable Account Debtor into a lockbox account, or such other “blocked account” as Bank may specify, pursuant to a blocked account agreement in form and substance satisfactory to Bank in its reasonable discretion; provided , however , that with respect to Accounts owed to Medisystems, Medisystems may, subject to Section 6.8 hereof, for a period of up to one hundred eighty (180) days, continue to collect Accounts in the normal course of business through its existing collection accounts at Key Bank. Whether or not an Event of Default has occurred and is continuing, Borrower shall hold all payments on, and proceeds of, any Accounts in trust for Bank, and Borrower shall, with the exception of Medisystems noted above, promptly deliver all such payments and proceeds to Bank in their original form, duly endorsed, to be applied to the Obligations pursuant to the terms of Section 9.4 hereof; provided , further , that during a Streamline Period, provided no Event of Default has occurred and is continuing, such payments and proceeds shall be transferred on a daily basis by Bank to an account of Borrower maintained at Bank.

          (d) Returns . Provided no Event of Default has occurred and is continuing, if any Account Debtor returns any Inventory to Borrower, Borrower shall promptly (i) determine the reason for such return, (ii) issue a credit memorandum to the Account Debtor in the appropriate amount, and (iii) upon request from Bank, provide a copy of such credit memorandum to Bank, to the extent such credit memorandum is in an amount in excess of Fifty Thousand Dollars ($50,000) per credit memorandum or One Hundred Thousand Dollars ($100,000) in the aggregate for all such credit memoranda. In the event any attempted return occurs after the occurrence and during the continuance of any Event of Default, Borrower shall hold the returned Inventory in trust for Bank, and immediately notify Bank of the return of the Inventory.

          (e) Verification . Whether or not an Event of Default has occurred and is continuing, Bank may notify any Account Debtor owing Borrower money of Bank’s security interest in such funds and verify the amount of such Eligible Account; provided that, prior to the occurrence of an Event of Default, acceptable forms of notification and verification shall be in such form and manner as will be reasonably determined by Bank and Borrower.

          (f) No Liability . Bank shall not be responsible or liable for any shortage or discrepancy in, damage to, or loss or destruction of, any goods, the sale or other disposition of which gives rise to an Account, or for any error, act, omission, or delay of any kind occurring in the settlement, failure to settle, collection or failure to collect any Account, or for settling any Account in good faith for less than the full amount thereof, nor shall Bank be deemed to be responsible for any of Borrower’s obligations under any contract or agreement giving rise to an Account. Nothing herein shall, however, relieve Bank from liability for its own gross negligence or willful misconduct.

      6.4 Remittance of Proceeds . Subject to the Asahi Intercreditor Agreement, except as otherwise provided in Section 6.3(c), deliver, in kind, all proceeds arising from the disposition of any Collateral with respect to which Bank has a senior lien, to Bank in the original form in which received by Borrower not later than the following Business Day after receipt by Borrower, to be applied to the Obligations pursuant to the terms of Section 9.4 hereof; provided that, if no Default or Event of Default has occurred and is continuing, Borrower shall not be obligated to remit to Bank the proceeds of the sale of worn out, excess or obsolete Equipment disposed of by Borrower in good faith in an arm’s length transaction for an aggregate purchase price of One Hundred Thousand Dollars ($100,000) or less (for all such transactions in any fiscal year) or the proceeds of Transfers permitted under Section 7.1 hereof. Borrower agrees that it will not commingle proceeds of Collateral with any of Borrower’s other funds or property, but will hold such proceeds separate and apart from such other funds and property and in an

express trust for Bank, subject to the Asahi Intercreditor Agreement. Nothing in this Section limits the restrictions on disposition of Collateral set forth elsewhere in this Agreement.

      6.5 Taxes; Pensions; Withholding. Timely file, and require each of its Subsidiaries to timely file, all required tax returns and reports (or extensions thereof) and timely pay, and require each of its Subsidiaries to timely pay, all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower and each of its Subsidiaries, except as otherwise provided in Section 5.9 hereof, and shall deliver to Bank, on demand, appropriate certificates attesting to such payments, and pay all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with their terms.

      6.6 Access to Collateral; Books and Records. At reasonable times, on three (3) Business Days’ notice (provided no notice is required if an Event of Default has occurred and is continuing), Bank, or its agents, shall have the right, on a semi-annual basis (or more frequently as conditions warrant, in Bank’s reasonable discretion), to inspect the Collateral and the right to audit and copy Borrower’s Books. The foregoing inspections and audits shall be at Borrower’s expense, and the charge therefor shall be $850 per person per day (or such higher amount as shall represent Bank’s then-current standard charge for the same), plus reasonable out-of-pocket expenses. In the event Borrower and Bank schedule an audit more than ten (10) days in advance, and Borrower cancels or seeks to reschedules the audit with less than ten (10) days written notice to Bank, then (without limiting any of Bank’s rights or remedies), Borrower shall pay Bank a fee of $1,000 plus any reasonable out-of-pocket expenses incurred by Bank to compensate Bank for the anticipated costs and expenses of the cancellation or rescheduling.

      6.7 Insurance. Keep its business and the Collateral insured for risks and in amounts standard for companies in Borrower’s industry and location and as Bank may reasonably request. Insurance policies shall be in a form, with companies, and in amounts that are reasonably satisfactory to Bank. All property policies shall have a lender’s loss payable endorsement showing Bank as an additional lender loss payee and waive subrogation against Bank and shall provide that the insurer must give Bank at least twenty (20) days notice before canceling, amending, or declining to renew its policy. All liability policies shall show, or have endorsements showing, Bank as an additional insured, and all such policies (or the loss payable and additional insured endorsements) shall provide that the insurer shall give Bank at least twenty (20) days notice before canceling, amending, or declining to renew its policy. At Bank’s request, Borrower shall deliver certified copies of policies and evidence of all premium payments. Proceeds payable under any policy with respect to any Collateral as to which the Bank’s Lien is senior to that of Asahi pursuant to the Asahi Intercreditor Agreement shall, at Bank’s option, be payable to Bank on account of the Obligations. Notwithstanding the foregoing, (a) so long as no Event of Default has occurred and is continuing, Borrower shall have the option of applying the proceeds of any casualty policy up to Two Hundred Fifty Thousand Dollars ($250,000) with respect to any loss, toward the replacement or repair of destroyed or damaged property; provided that any such replaced or repaired property (i) shall be of equal or like value as the replaced or repaired Collateral and (ii) shall be deemed Collateral in which Bank has been granted a security interest, and (b) after the occurrence and during the continuance of an Event of Default, all proceeds payable under such casualty policy shall, at the option of Bank, be payable to Bank on account of the Obligations. If Borrower fails to obtain insurance as required under this Section 6.7 or to pay any amount or furnish any required proof of payment to third persons and Bank, Bank may make all or part of such payment or obtain such insurance policies required in this Section 6.7, and take any action under the policies Bank deems prudent.

      6.8 Operating Accounts.

          (a) (i) Maintain its and its Subsidiaries’, if any, primary operating, depository accounts and securities accounts with Bank and Bank’s Affiliates; provided that Medisystems shall, for a period of up to one hundred eighty (180) days after the Effective Date, be permitted to maintain its existing operating accounts at Key Bank (the “ Key Bank Accounts ”); provided further , that at any time in which the Key Bank Accounts have a balance equal to or greater than Two Hundred Fifty Thousand Dollars ($250,000), such amounts shall immediately be transferred to an account of Borrower maintained at Bank (Bank acknowledges and agrees that notwithstanding the provisions of clause (b) below, no Control Agreement shall be required with respect to the Key Bank Accounts during the 180 day transition period); and

          (ii) Within ninety (90) days after the Effective Date, maintain or invest at least 80% of the Borrowers’ and its Subsidiaries funds, on a world-wide, aggregate basis, through Bank or an Affiliate of Bank.

          (b) Provide Bank five (5) days prior-written notice before establishing any Collateral Account at or with any bank or financial institution other than Bank or Bank’s Affiliates. For each Collateral Account that Borrower at any time maintains, Borrower shall cause the applicable bank or financial institution (other than Bank) at or with which any Collateral Account is maintained to execute and deliver a Control Agreement or other appropriate instrument with respect to such Collateral Account to perfect Bank’s Lien in such Collateral Account in accordance with the terms hereunder which Control Agreement may not be terminated without the prior written consent of Bank. The provisions of the previous sentence shall not apply to (i) deposit accounts exclusively used for payroll, payroll taxes and/or other employee wage and benefit payments to or for the benefit of Borrower’s employees and identified to Bank by Borrower as such, and (ii) any account or accounts at which the Borrower maintains an aggregate amount of up to One Hundred Thousand Dollars ($100,000) for all such accounts at any time.

      6.9 Financial Covenants.

          Maintain at all times, to be tested as of the last day of each month, unless otherwise noted, on a consolidated basis with respect to Borrower and its Subsidiaries:

          (a) Adjusted EBITDA . Achieve a minimum Adjusted EBITDA (maximum loss), measured on a quarterly basis for each quarterly period ending date listed below, in an amount not less than (max loss not greater than) the corresponding amount listed below for such quarterly period:

          (b) Liquidity . Liquidity of Borrower of at least Seven Million Five Hundred Thousand Dollars ($7,500,000); provided , however , that if Borrower fails to maintain Liquidity of at least Seven Million Five Hundred Thousand Dollars, in Bank’s sole discretion and with the prior consent of Bank, Borrower shall have three (3) Business Days to achieve Liquidity of at least Seven Million Five Hundred Thousand Dollars ($7,500,000). During such three (3) Business Day cure period, no Event of Default will be deemed to have occurred under this Section 6.9(b) (but no Credit Extension will be made during the cure period). Such three (3) Business Day cure period under this Section 6.9(b) may be exercised no more than once prior to the Revolving Line Maturity Date.

      6.10 Protection and Registration of Intellectual Property Rights.

          (a) (i) Protect, defend and maintain the validity and enforceability of its Intellectual Property consistent with reasonable business judgment; (ii) promptly advise Bank in writing of material infringements of its material Intellectual Property; and (iii) not allow any Intellectual Property material to Borrower’s business to be abandoned, forfeited or dedicated to the public without Bank’s written consent.

          (b) If Borrower (i) obtains any Patent, registered Trademark, registered Copyright, registered mask work, or any pending application for any of the foregoing, or (ii) applies for any Patent or the registration of any Trademark, then Borrower shall, on a quarterly basis, provide written notice thereof to Bank and shall execute such intellectual property security agreements and other documents and take such other actions as Bank shall reasonably request in its good faith business judgment to perfect and maintain a perfected security interest in favor of Bank in such property, subject to the Asahi Intercreditor Agreement. If Borrower decides to register any Copyrights or mask works in the United States Copyright Office, Borrower shall: (x) provide Bank with at least fifteen (15) days prior written notice of Borrower’s intent to register such Copyrights or mask works together with a copy of the application it intends to file with the United States Copyright Office (excluding exhibits thereto); (y)

execute an intellectual property security agreement and such other documents and take such other actions as Bank may reasonably request to perfect and maintain a perfected security interest in favor of Bank in the Copyrights or mask works intended to be registered with the United States Copyright Office, subject to the Asahi Intercreditor Agreement; and (z) record any such intellectual property security agreement with the United States Copyright Office contemporaneously with filing the Copyright or mask work application(s) with the United States Copyright Office. Upon request, Borrower shall provide to Bank copies of all applications that it files for Patents or for the registration of Trademarks, Copyrights or mask works, and will promptly provide Bank with evidence of the recording of the intellectual property security agreement necessary for Bank to perfect and maintain a security interest in such property.

          (c) Provide written notice to Bank within ten (10) Business Days of entering or becoming bound by any Restricted License (other than open source or over-the-counter software that is commercially available to the public and other than the Utterberg License). Borrower shall make commercially reasonable efforts upon request of Bank to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (i) any Restricted License (other than open source or over-the-counter software that is commercially available to the public and the Utterberg License) to be deemed “Collateral” and for Bank to have a security interest in it that would be reasonably expected to otherwise be restricted or prohibited by law or by the terms of any such Restricted License, whether now existing or entered into in the future, and (ii) subject to the Asahi Intercreditor Agreement, Bank to have the ability in the event of a liquidation of any Collateral to dispose of such Restricted License (other than open source or over-the-counter software that is commercially available to the public and other than the Utterberg License) in accordance with Bank’s rights and remedies under this Agreement and the other Loan Documents.

      6.11 Litigation Cooperation. From the date hereof and continuing through the termination of this Agreement, make available to Bank, upon reasonable notice and at reasonable intervals, without expense to Bank, Borrower and its officers, employees and agents and Borrower’s Books, to the extent that Bank may deem them reasonably necessary to prosecute or defend any third-party suit or proceeding instituted by or against Bank with respect to any Collateral or relating to Borrower.

      6.12 Creation/Acquisition of Subsidiaries. Notwithstanding and without limiting the negative covenant contained in Section 7.3 hereof, in the event Borrower or any Subsidiary creates or acquires any Subsidiary, Borrower and such Subsidiary shall promptly notify Bank of the creation or acquisition of such new Subsidiary and, at Bank’s request, in its sole discretion, take all such action as may be reasonably required by Bank to cause each such Subsidiary to, in Bank’s sole discretion, become a co-Borrower or Guarantor under the Loan Documents and grant a continuing pledge and security interest in and to the assets of such Subsidiary (substantially as described on Exhibit A hereto); and Borrower shall grant and pledge to Bank a perfected security interest in the stock, units or other evidence of ownership of each Subsidiary.

     Borrower may designate a newly created Subsidiary to be a Filter Plant Subsidiary hereunder. Upon such designation, (a) such Subsidiary shall not be deemed to be a “Subsidiary” for the purposes of this Agreement and the other Loan Documents, (b) the Borrower shall not be required to comply with the first paragraph of this Section 6.12 with respect to such Subsidiary, and (c) upon request of Borrower, Bank shall not unreasonably withhold its consent to release the Guaranty of such Subsidiary, if any.

      6.13 Further Assurances. Execute any further instruments and take further action as Bank reasonably requests to perfect or continue Bank’s Lien in the Collateral as contemplated by this Agreement. On a monthly basis, Borrower agrees to make management available to provide any update with respect to Government Approvals and will provide Bank with such additional documents as Bank reasonably requests in connection therewith.

      6.14 Changes in Senior Management . Upon the departure of any Key Person from NxStage, (i) give the Bank prompt notice of such departure, (ii) provide the Bank with prompt notice as to the officer or employee who will be acting in the capacity of such office for purposes of taking actions under the Loan Documents, and (iii) keep the bank reasonably informed, and in any event no less than monthly, as to the Borrower’s efforts to fill such position or its determination as to the officers or employees who will fulfill the duties otherwise associated with such office.

      7 NEGATIVE COVENANTS

          Borrower shall not do any of the following without Bank’s prior written consent: