Document:

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                                                                   Exhibit 10.21

                        CONFIDENTIAL TREATMENT REQUESTED
                        --------------------------------

INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND
IS IDENTIFIED BY THREE ASTERISKS, AS FOLLOWS "* * *", AN UNREDACTED VERSION OF
THIS DOCUMENT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

                       MANUFACTURING AND SUPPLY AGREEMENT

     This manufacturing and supply agreement is dated 12 May, 2003, and is
between NEPHROS, INC., a Delaware corporation ("Nephros") and MEDICA s.r.l., an
                                                -------
Italian company ("Medica").
                  ------

     Nephros sells systems it has developed for treating end-stage renal
disease. One component of these systems is the MD 190 hemodiafiltration
cartridge (the "Cartridge").
                ---------

     Nephros and Medica wish for Medica to manufacture Cartridges for Nephros,
using fiber provided by a supplier designated by Nephros, and ship them to
purchasers designated by Nephros.

     The parties therefore agree as follows:

                                   Article 1
                                SALE AND PURCHASE

     1.1   Supply of Cartridge. Subject to the terms of this agreement, Medica
           -------------------
shall manufacture, in such quantities as Nephros orders, the Cartridge.

     1.2   Nephros Exclusive Purchaser. Medica may not without the prior written
           ---------------------------
consent of Nephros provide Cartridges to any Person other than Nephros.

     1.3   Medica Exclusivity. Nephros shall purchase from Medica no less than
           ------------------
* * * of the Cartridges directly marketed by Nephros in the first * * *
following regulatory approval of the Cartridge in Europe ("the approval"); no
                                                           ------------
less than * * * of the Cartridges directly marketed by Nephros in * * *
following the approval; and no less than * * * of the Cartridges directly
marketed by Nephros in * * * following the approval. Medica will also be given
first consideration in good faith for the manufacture of Cartridges not directly
marketed by Nephros. For purposes of this Section 1.3, Nephros will be deemed to
have purchased from Medica any Cartridges that it purchases from any Person
other than Medica to replace Cartridges ordered from Medica that constitute
"Default Cartridges" under the terms of this agreement.
 ------------------

                                    Article 2
                                    FORECASTS

     2.1   Rolling Forecasts. (a) On or prior to the Forecast Initiation Date
           -----------------
("FID"), as specified in Schedule 3.1, Nephros shall deliver to Medica a
  ---
forecast of how many Cartridges it

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will purchase for delivery in each of the nine consecutive months beginning one
month following the FID. On or prior to one month following the FID, Nephros
shall deliver to Medica a forecast of how many Cartridges it will purchase for
delivery in each of the nine consecutive months beginning two months following
the FID. On or prior to the first day of each subsequent month, Nephros shall
deliver to Medica an update to its previously submitted forecast of its expected
purchases of Cartridges (each forecast delivered pursuant to this Section
2.1(a), a "Rolling Forecast"). Each such update must consist of a repetition of
           ----------------
the eight later months of the immediately preceding Rolling Forecast along with
a forecast for the month subsequent to the last month in the previous Rolling
Forecast.

           (b)   Nephros may not revise in any subsequent Rolling Forecast the
forecast for months 2 and 3 in any Rolling Forecast (month 1 being the earliest
month in any Rolling Forecast). Nephros may revise in any subsequent Rolling
Forecast the forecast for any other month in any Rolling Forecast.

           (c)   The forecast for any month specified in any Rolling Forecast
may not be less than the total number of Cartridges for which Nephros, prior to
delivery of that Rolling Forecast to Medics in accordance with Section 2.1(a),
has submitted purchase orders in accordance with Section 3.2 specifying a
delivery date in that month.

                                   Article 3
                          ORDERS, SHIPMENT, AND PAYMENT

     3.1   Price. The price paid by Nephros for any given shipment of Cartridges
           -----
is as stated in Schedule 3.1.
                ------------

     3.2   Purchase Orders. (a) Each purchase order that Nephros places for
           ---------------
Cartridges must be in the form attached as Exhibit A and must specify (1) how
                                           ---------
many Cartridges are desired, (2) the one or more places to which, and the manner
and date by which, delivery is to be made, and (3) the applicable price per
Cartridge. Nephros shall deliver all purchase orders by facsimile, or by one of
the means specified in Section 14.8 for giving notice, to Medica at the
following address and facsimile number or as otherwise instructed by Medics:

     Medica s.r.l.
     Via Degli Artigiani, 6
     41036 Medolla (MO) Italy
     Attention:        Daniele Giubertoni
                       MKTG & sales Manager
     Facsimile:        39-0535-52605
     E-mail:           sales@medica.it

           (b)   Nephros shall order for delivery in any given month an
aggregate number of Cartridges equal to at least 90% of the final amount
forecast for that month in the Rolling Forecasts (that quantity, the "Final
Forecast Quantity"). Nephros may order for delivery in any given Quarter an
aggregate quantity of Cartridge not exceeding 110% of the Final Forecast
                                                          --------------
Quantity. Only with Medica's written consent may Nephros order for delivery in
--------
any given Quarter an aggregate number of Cartridges exceeding 110% of the Final
Forecast Quantity.

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           (c)   Nephros shall deliver each purchase order for quantities of the
Cartridge at least 60 days in advance of the delivery date specified in that
purchase order.

           (d)   If Nephros delivers any purchase order with less lead time than
is required under Section 3.2(c), then Medica shall use commercially reasonable
efforts to fill that purchase order but will not be liable to Nephros if despite
those best efforts they fail to do so.

           (e)   Medica shall acknowledge and accept in writing (by fax, email,
or other means of correspondence, tbd) on behalf of Medica any purchase order
that Nephros places for Cartridges. Any such purchase order will be deemed
accepted by Medica if Medica does not reject it by written notice to Nephros
delivered within seven Business Days of Medica's receiving that purchase order.
Medica may not reject any purchase order that complies with the provisions of
this Article 3. If the terms of any purchase order are inconsistent with the
terms of this agreement, the terms of this agreement will control.

           (f)   If it notifies Medica no later than 30 days prior to the date
of delivery specified in any purchase order, Nephros may elect, with respect to
some or all of the Cartridges ordered in that purchase order, to postpone that
date of delivery to a date that is a number of days after the date of delivery
specified in that purchase order equal to the number of days between the date
that purchase order was delivered to Medica and the delivery date specified in
that purchase order. Nephros may not further postpone delivery of any Cartridges
the delivery of which was previously postponed. For purposes of determining
Nephros's compliance with its obligations under Section 3.2(b), Nephros will be
deemed to have purchased in the month of the original date of delivery any
Cartridges the delivery of which was postponed in accordance with this Section
3.2(f).

     3.3   Delivery. Each shipment of Cartridges will be delivered by Medica FOB
           --------
the applicable Medica manufacturing facility or retained in Medica's warehouse
facility, in accordance with Nephros instructions for each shipment. Subject to
Section 3.2(f), Medica shall deliver by the delivery date specified in a
purchase order all of the Cartridges specified in that purchase order. Nephros
is only required to pay for Cartridges actually delivered. Medica shall make
shipping arrangements with carriers designated in writing by Nephros from the
FOB point to points specified by Nephros, under the agreements that Nephros has
with those carriers.

           3.3.1 Customer Delivery. For cartridges retained in the Medica
                 -----------------
warehouse, Medica shall deliver these Cartridges, FOB the warehouse, in
quantities and to addresses specified in writing (by fax, email, or other means
of correspondence, tbd) by Nephros, in order to fulfill individual Nephros
customer orders. Medica will confirm these orders for delivery in writing (by
fax, email, or other means of correspondence, tbd), and will notify Nephros upon
successful delivery of the Cartridges to the customer locations specified.

     3.4   Freight, Insurance, and Taxes. Nephros shall pay all freight,
           -----------------------------
insurance, duties, and other fees (except tax on income to Medica) incurred in
connection with sale and shipment of Cartridges under this agreement.

           3.4.1 Delivery to European Community customer. Nephros will create a
                 ---------------------------------------
European business location holding a V.A.T. registration number ("Nephros
Europe"). Medica

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will invoice all deliveries for European customers to Nephros Europe, which will
also provide the payment.

     3.5   Delay in Delivery. If for any reason other than an Event of Force
           -----------------
Majeure Medica delivers any shipment of Cartridges later than the date of
delivery set out in the Purchase Order, Nephros will be entitled to the
following as an alternative, in its sole discretion, to its rights under Section
3.6 and Section 13.2(a)(7):

     (1)   a 5% reduction in the price of each Cartridge in the shipment if the
           shipment is delivered more than 14 days but less than 21 days late;

     (2)   a 10% reduction in the price of each Cartridge in the shipment if the
           shipment is delivered more than 21 days late.

     3.6   Delivery Default Rights. If more than 28 days have passed since the
           -----------------------
delivery date for any Cartridges and Medica has, for any reason other than an
Event of Force Majeure, failed to deliver those Cartridges, then, in addition to
any other remedies it might have under this agreement or by law, Nephros may
cancel that purchase order or the portion thereof relating to those cartridges,
as applicable, and those Cartridges will constitute Default Cartridges for
purposes of Section 1.3.

     3.7   Invoices and Payment Terms. On delivery by Medica of a shipment of
           --------------------------
Cartridges in accordance with Section 3.3, Medica shall issue to Nephros an
invoice for that shipment stating a price consistent with the terms of this
agreement. Nephros shall pay each such invoice in full within 45 Calendar Days
from the date of invoice, unless Nephros has rejected the shipment in question
in accordance with Section 4.2. If Nephros pays an invoice before Nephros
examines the shipment as provided in Section 4.2 and thereafter determines that
one or more Cartridges do not meet the Specifications, Medica shall reimburse
Nephros, by wire transfer, the purchase price of the nonconforming Cartridges
within 14 Calendar Days of Nephros notifying Medica of that nonconformity.

                                   Article 4
                            QUALITY OF THE CARTRIDGE

     4.1   Conformity with Specifications. Any Cartridges that Medica
           ------------------------------
manufactures under this agreement must (1) conform to the specifications in
Schedule 4.1 (the "Specifications") and (2) be manufactured, labeled, packaged,
------------       --------------
stored, and tested (while in the possession of, stored by, or under the control
of Medica) in accordance with cGMP.

     4.2   Conditions to Rejection. In order to be entitled to reject any
           -----------------------
Cartridge, Nephros must notify Medica of any failure of the Cartridge to meet
the Specifications or otherwise comply with this agreement.

     4.3   Rejection. (a) Nephros may reject any Cartridge that does not meet
           ---------
the Specifications or otherwise comply with this agreement (any such Cartridge,
a "Nonconforming Cartridge"). If Medica accepts that Nephros was entitled to
   -----------------------
reject that Cartridge, Medica shall within 14 Calendar Days after Medica
receives notice under Section 4.2 replace the Nonconforming Cartridge at no
additional cost to Nephros (if Nephros has paid for the

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Nonconforming Cartridge and Medica has not reimbursed Nephros the purchase
price) or for payment consistent with Section 3.7 (if Nephros has not paid for
the Nonconforming Cartridge or if Medica has reimbursed Nephros the purchase
price).

           (b)   If Medica does not agree that one or more Cartridges constitute
Nonconforming Cartridges, the Joint Review Committee, consisting of Quality
Assurance representatives from both companies, must consider the matter. If
after consideration by the Joint Review Committee the parties are unable to
reach agreement within 45 Calendar Days after the date Medica received notice
from Nephros under Section 4.2, they shall submit the dispute to arbitration in
accordance with Section 14.5.

     4.4   Nonconformity Default Rights. If for any reason other than an Event
           ----------------------------
of Force Majeure Medica (1) fails to replace any Nonconforming Cartridge as
required by Section 4.3 or (2) fails to replace any Nonconforming Cartridge
within 10 Business Days after a dispute regarding whether any rejected quantity
of Cartridge constitutes Nonconforming Cartridge is decided in Nephros's favor,
then, in addition to any other remedies it might have under this agreement or by
law, Nephros may cancel that purchase order or the portion thereof relating to
those cartridges, as applicable, and those Cartridges will constitute Default
Cartridges for purposes of Section 1.3.

     4.5   Acceptance of Cartridges. If Nephros does not notify Medica that one
           ------------------------
or more Cartridges do not meet the Specifications or otherwise fail to comply
with this agreement, those Cartridges will be deemed to have been accepted by
Nephros as being fully compliant with the Specifications and this agreement.

                                   Article 5
                               PRODUCTION PROCESS

     5.1   Joint Review Committee. The parties shall establish and hold meetings
           ----------------------
of a Joint Review Committee annually.

     5.2   Material Review Board (MRB): Activities and trending resulting from
           ---------------------------
materials, components and/or finished product manufactured for or under the
auspices of Nephros shall be reported to Nephros Quality Assurance on a monthly
basis. If such product and/or materials are involved in an external complaint or
vigilance report this shall be reported to Nephros in a timely manner.

     5.3   Yields: Medica product yields for Nephros Products shall be reported
           ------
to Nephros Quality Assurance and R&D on a quarterly basis.

     5.4   Process Development. Medica shall use commercially reasonable efforts
           -------------------
to develop technical know-how that would permit them to manufacture the
Cartridge less expensively and shall no less than semiannually furnish the Joint
Review Committee with a detailed report as to their progress in this area.
Nephros and Medica shall at the time of each report determine jointly the
actions to be taken with respect to these findings.

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     5.5   Fiber. (a) In manufacturing Cartridges, Medica shall use fiber
           -----
supplied by Membrana Gmbh, a German company ("Membrana"), or other fiber
                                              --------
suppliers as specified by Nephros.

           (b)   It is a condition of Medica's ability to timely deliver the
Cartridges ordered in any purchase order that Nephros Europe causes Membrana, or
another fiber supplier as specified by Nephros, to deliver to Medica, at
Nephros' cost and no later than 60 days prior to the delivery date specified in
the purchase order, a sufficient quantity of fiber conforming to the
Specifications to permit Medica to manufacture those Cartridges.

           (c)   Medica shall store any fiber supplied by Membrana in accordance
with guidelines supplied to Medica by Nephros or Membrana.

           (d)   If with respect to the Cartridges ordered in any given Year the
fiber wastage (including without limitation as a result of use of fiber in
Nonconforming Cartridges) exceeds 5%, then promptly after the end of that Year
Medica shall reimburse Nephros half of the cost to Nephros (including any
freight, insurance, and sales taxes and other duties, fees, and expenses) of the
quantity of fiber represented by that excess wastage.

     5.6   Equipment Supplied by Nephros. Nephros shall supply to Medica, for
           -----------------------------
use by Medica in performing its obligations under this agreement, the equipment
listed in Schedule 5.6. Nephros will retain title to that equipment and any
          ------------
other equipment that it supplies to Medica in the future for use by Medica in
performing its obligations under this agreement.

     5.7   Inventory of Raw Materials and Spare Parts. Medica shall at all times
           ------------------------------------------
manage their inventories of raw materials so as to enable Medica to meet
Nephros's demand as specified in the Rolling Forecasts. Medica shall also
maintain, consistent with the manufacturer's recommendations, an inventory of
spare parts of all equipment they use to manufacture the Cartridge.

     5.8   Sample Storage. Medica shall store no less than two Nephros product
           --------------
samples from each sterilization lot for the purpose of potential clinical or
regulatory investigations. Samples are to be stored in a controlled
(warehouse-condition-equivalent) environment for at least one (l) year beyond
their labeled expiration date.

                                   Article 6
                                 QUALITY SYSTEM

     6.1   General Quality Statement: Nephros product shall be manufactured,
           -------------------------
assembled and tested in compliance with Medica's internal quality system,
Nephros supplied specifications and documentation, and to relevant ISO, EN and
FDA standards, guidelines, and regulations.

     6.2   Quality System Changes: Any changes to the status of the Medica
           ----------------------
Quality System shall be reported to Nephros Quality Assurance and Executive
Management within 72 hours. Status changes may include, but not be limited to
the following:

           a)    ISO Certifications or CE Marking status changes

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           b)    Process or material failures, including significant vendor
                 related failures or relevant vendor terminations due to quality
                 related issues

           c)    Direct manufacturing process or materials changes

           d)    Specification changes for supplemental manufacturing processes,
                 equipment, or materials

     6.3   Vendor Quality: The quality ratings of vendors that supply materials
           --------------
used in the manufacture/assembly and/or testing of Nephros product shall be
reported to Nephros quality in a manner consistent with the Medica quality
system. Any corrective actions, regulatory holds, suspensions, or terminations
of vendors related to Nephros product shall be reported to Nephros Quality
Assurance in a timely manner.

     6.4   Vigilance System. Medica shall handle any and all international
           ----------------
product complaints and vigilance reporting that results from the use of Nephros
product. A monthly trending report shall be issued to Nephros Quality Assurance
detailing the aforementioned complaints and vigilance incidents and corrective
action activities. The following statements outline the responsibilities for the
handling and reporting of complaints and vigilance reportable incidents:

           a)    All vigilance reports shall be communicated to Nephros Quality
                 Assurance within 24 to 48 hours of evaluation and confirmation.

           b)    All individual complaints shall be communicated to Nephros for
                 evaluation and confirmation.

           c)    Complaints shall be evaluated for confirmation both by Medica
                 upon receipt and by Nephros following communication from
                 Medica.

           d)    Complaint investigations shall be a shared process between
                 Medica (QA, Manufacturing, and Engineering) and Nephros (QA and
                 R&D).

           e)    All investigation reports shall be issued jointly and in a
                 timely manner to satisfy the requirements for vigilance
                 reporting (when necessary).

           f)    Medica will serve as the Authorized Representative for
                 Complaint and Vigilance handling and reporting for Nephros

                 a.   The Medica name shall appear in small print on the Nephros
                      product label as contact information regarding complaint
                      and vigilance reporting.

           g)    When a complaint is determined to be a vigilance reportable
                 event then Medica shall be responsible for administering and
                 reporting Nephros product related vigilance incidents to the
                 necessary competent authorities within 10 days or as outlined
                 in the Medica Quality System.

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           h)    Any vigilance reportable complaint shall be forwarded to Medica
                 for reporting to the appropriate Competent Authority.

           i)    Medica shall copy Nephros Quality Assurance within 24-48 hours
                 on all and any vigilance reporting, including health outcome,
                 relationship between the incidents, and timeliness of reporting
                 the vigilance incident to the Competent Authorities.

                                   Article 7
                           OTHER OBLIGATIONS OF MEDICA

     7.1   Debarment Certification. Medica may not knowingly, after due inquiry,
           -----------------------
employ, contract with, or retain any Person directly or indirectly in connection
with its manufacture of Cartridges if that Person has been debarred by the FDA
under 21 U.S.C. 335a(k) (Section 306, Federal Food, Drug and Cosmetic Act). On
written request from Nephros, Medica shall within 10 Business Days provide
Nephros written confirmation that they have complied with the foregoing
obligation.

     7.2   Permits and Certifications. Medica currently has all Permits and
           --------------------------
Certifications necessary to enable it to perform all its obligations under this
agreement. At all times during the term of this agreement Medica shall maintain
those Permits and secure any additional Permits that become necessary.

     7.3   Manufacturing Problems. Medica shall promptly notify Nephros if it
           ----------------------
experiences any significant problems in manufacturing Cartridges, shall use
commercially reasonable efforts to resolve those problems, and shall keep
Nephros informed of the status of those efforts.

     7.4   Insurance. (a) Medica shall at its cost obtain and maintain one or
           ---------
more insurance policies providing coverage of at least Euro 5,000,000 in the
aggregate that cover Medica for fire, theft, fidelity, product liability, and
any and all potential claims, suits, losses, expenses, or damages arising out of
Medica's obligations under this agreement. At Nephros's request to Medica from
time to time, Medica shall furnish Nephros with certification of insurance
evidencing that insurance and shall provide at least 30 Business Days prior
written notice to Nephros of any cancellation of or decrease in the dollar
amount of coverage provided by any such policy.

           (b)   Nephros shall at its cost obtain and maintain product-liability
insurance coverage in the amount of $5,000,000 in relation to the Cartridge. At
the request of Medica from time to time, Nephros shall furnish Medica with
certification of insurance evidencing that insurance and shall provide at least
30 Business Days prior written notice to Medica of any cancellation of or
decrease in the amount of coverage provided by any such policy.

                                   Article 8
                              INSPECTIONS; RECORDS

     8.1   Notification of Inquiries and Inspections. Medica shall notify
           -----------------------------------------
Nephros within seven Business Days of any written or oral inquiries,
notifications, or inspection activity by any Governmental Authority in regard to
Medica's manufacture of Cartridges. Medica shall permit

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up to two individuals selected by Nephros to attend any such inspections and
shall provide Nephros with an accurate and reasonably complete description of
any such inquiries, notifications, or inspections. Medica shall also furnish to
Nephros (1) within three Business Days after receipt any report or
correspondence issued by any Governmental Authority in connection with any such
inquiries, notifications, or inspections, and (2) not later than ten Business
Days prior to the time Medica proposes to send it, a copy of any proposed
response or explanation relating to any such inquiries, notifications, or
inspections or any report or correspondence issued by any Governmental Authority
in connection therewith (each, a "Proposed Response"), in each case redacted of
                                  -----------------
trade secrets or other confidential or proprietary information of Medica that
are unrelated to Medica's obligations under this agreement or are unrelated to
manufacture of Cartridges. Medica shall discuss with Nephros any Proposed
Response and shall incorporate in that Proposed Response any reasonable comments
provided by Nephros with respect to that Proposed Response. After filing a
response with any Governmental Authority, Medica shall within 5 Business Days
notify Nephros of any further contacts with that Governmental Authority with
respect to that response.

     8.2   Access to Medica Facilities and Records. Medica shall at Nephros's
           ---------------------------------------
request give Nephros and any designee of Nephros reasonable access to Medica's
facilities, procedures, and books and records, including Medica's protocols,
standard operating procedures (SOPs), equipment specifications, and
manufacturing records, for purposes of (1) observing manufacturing operations
and (2) auditing and inspecting Medica's facilities for compliance with
applicable Laws and the terms of this agreement. Nephros acknowledges that it
and its designee may be permitted only to review, rather than obtain copies of,
certain proprietary documents of Medica; Medica shall at Nephros's request
provide Nephros with a copy of any other document that Nephros requests.

     8.3   Records. Medica shall maintain all records necessary to evidence
           -------
compliance with all applicable Laws and other requirements of applicable
Governmental Authorities relating to the manufacture of the Cartridge. Medica
shall also maintain records with respect to its costs, obligations, and
performance under this agreement. All such records shall be maintained for a
period of not less than two years from the date of expiration of each Cartridge
batch to which those records pertain, or such longer period as may be required
by Law or cGMPs.

                                   Article 9
                                CARTRIDGE RECALLS

     9.1   Cartridge Recalls. If any Governmental Authority withdraws its
           -----------------
approval to sell the Cartridge in any country or issues a directive or request
that some or all Cartridges be recalled for safety reasons relating to the
Cartridge or Nephros reasonably determines that some or all Cartridges should be
recalled, and if that recall is due to any reason other than Medica having
manufactured Cartridge that fails to conform to the Specifications or that was
not manufactured in accordance with any applicable Laws, Nephros shall pay all
costs, including Medica's reasonable out-of-pocket expenses, associated with
that recall.

     9.2   Notice of Events that May Lead to Cartridge Recall. Medica, on the
           --------------------------------------------------
one hand, and Nephros, on the other hand, shall keep each other fully and
promptly informed of any notification, event, or other information, whether
received directly or indirectly, that might affect

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the marketability, safety or effectiveness of the Cartridge or might result in a
recall of any Cartridges by any Governmental Authority.

     9.3   Recall Due to Breach By Medica. If there occurs any Cartridge recall
           ------------------------------
that is due to Medica having manufactured one or more Cartridges that fail to
conform to the Specifications or that were not manufactured in accordance with
any applicable Laws, Medica will be responsible for the costs of that recall,
Medica shall promptly, at the election of Nephros, compensate Nephros for the
Cartridge so recalled by either replacing without charge Cartridges recalled or
refunding Nephros the price paid by Nephros to Medica for the Cartridges
recalled, plus freight, insurance, sales taxes, and other duties, fees, and
expenses paid by Nephros.

     9.4   Definition of Recall. For purposes of this Article 8, "recall" means
           --------------------
any action by Nephros or any of its Affiliates, or either Medica or any of its
Affiliates, to recover title or possession or halt distribution or use of any
Cartridges sold or shipped to any other Persons. The term "recall" also applies
                                                           ------
to Cartridge that would have been subject to recall if it had been sold or
shipped.

                                   Article 10
                PUBLICITY; CONFIDENTIALITY; INTELLECTUAL PROPERTY

     10.1  Publicity. (a) Except as required by Law or the standards of any
           ---------
securities or regulatory authority, including without limitation the National
Association of Securities Dealers, Medica and Nephros may not make any official
press release, announcement, or other formal publicity relating to the
transactions that are the subject of this agreement without first obtaining in
each case the prior written consent of Nephros and Medica, respectively (which
consent may not be unreasonably withheld). If any party is required to file this
agreement with the Securities and Exchange Commission or another applicable
securities regulatory authority, that party must seek confidential treatment for
any provisions of this agreement that either party believes would disclose trade
secrets, confidential commercial, or financial information and thereby impair
the value of the contractual rights represented by this agreement or provide
detailed commercial and financial information to competitors or other Persons.
Except as required by Law or the standards of any securities regulatory
authority, Medica and Nephros may not use the name Nephros and Medica,
respectively, or any director, officer or employee thereof or any adaptation
thereof without the prior written approval of Nephros and Medica, respectively.

           (b)   Medica shall send to Nephros for its approval at least 30
Business Days before it is filed or submitted any publication, abstract, or
patent application resulting from this agreement. The authorship on any
publication or abstract will be determined by agreement of the parties or as
deemed scientifically appropriate. Any publication resulting from this agreement
will be delayed or prohibited if, in Nephros' reasonable opinion, delay or
prohibition is required in order to file or procure patent application or rights
protection in respect of any invention or discovery arising from this agreement.
Publication by Medica of any information relating to the Cartridge is subject to
the provisions of Section 10.2.

     10.2  Confidentiality. (a) It is contemplated that Medica may from time to
           ---------------
time disclose Confidential Information to Nephros, or vice versa. Medica shall
take all reasonable steps to prevent disclosure of Nephros

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Confidential Information and not to use any Nephros Confidential Information,
and Nephros shall take all reasonable steps to prevent disclosure of Medica
Confidential Information and not to use any Medica Confidential Information, in
either case except for the limited purposes set forth in this agreement.

           (b)   A party receiving Confidential Information may disclose it to
those of its Representatives who need to review that Confidential Information in
connection with that party's performance of its obligations and evaluation of
its rights under this agreement. Any party who so discloses any Confidential
Information pursuant to this Section 10.2(b) shall (1) inform those Persons of
the confidential nature of that Confidential Information, and (2) direct those
Persons to keep that Confidential Information confidential.

           (c)   The provisions of this Section 10.2 will survive termination or
expiration of this agreement and will continue for a period of 5 years from the
date of that termination or expiration.

     10.3  Pre-existing and Independently Developed Intellectual Property.
           --------------------------------------------------------------
Nothing in this agreement affects the ownership by any party of any Intellectual
Property owned or in the possession of that party on the date of this agreement
or Intellectual Property developed independently of this agreement or without
reference to any of the Confidential Information or Intellectual Property of
Medica (in the case of Nephros) or Nephros (in the case of Medica).

     10.4  Ownership. (a) Except as specified elsewhere in Section 10.4, all
           ---------
rights in patents, inventions, processes, discoveries, and other research
materials and any other novel or valuable information reflected in any medium
that arise or are created during the course of this agreement are the property
of the creating party.

           (b)   Intellectual Property, whether or not patentable, that arises
in connection with this agreement and is made solely by an employee or agent of
Nephros and without reference to any Confidential Information or Intellectual
Property disclosed by Medica will be owned by Nephros (that Intellectual
Property, "Nephros Inventions").
           ------------------

           (c)   Intellectual Property, whether or not patentable, that arises
in connection with this agreement and is made solely by an employee or agent of
a party with reference to Confidential Information or Intellectual Property of
Medica (in the case of Nephros) or Nephros (in the case of Medica) or is made
jointly by employees or agents of Nephros and Medica will be jointly owned (that
Intellectual Property, "Joint Inventions").
                        ----------------

           (d)   Intellectual Property, whether or not patentable, that arises
under this agreement and is made solely by an employee or agent of Medica and
without reference to any Confidential Information or Intellectual Property
disclosed by Nephros will be owned by Medica (that Intellectual Property,
"Medica Inventions").
 -----------------

           (e)   Inventorship will be determined according to applicable patent
law.

           (f)   Medica and Nephros shall promptly disclose to each other in
writing each invention and discovery conceived or reduced to practice in
connection with this agreement.

                                       11

<PAGE>

           (g)   Intellectual Property arising in connection with this agreement
and in the possession of a party other than the party that owns that
Intellectual Property will be treated as having been disclosed to that party by
the party that owns that Intellectual Property and will constitute Confidential
Information of the party that owns that Intellectual Property.

           (h)   Neither joint owner of any Joint Invention may sublicense that
Joint Invention without the written consent of the other joint owner, which no
joint owner may unreasonably withhold or delay.

     10.5  Limited License. Medica and Nephros each grants the other a limited,
           ---------------
non-exclusive, royalty-free license to its Intellectual Property (whether
pre-existing or arising in connection with this agreement) to the extent
necessary to permit it to carry out its obligations under this agreement. Any
such license will expire upon termination of this agreement and will not be
transferable or sublicensable.

     10.6  Maintenance of Patents. (a) Nephros shall file, prosecute and
           ----------------------
maintain patent applications and resulting patents, if any, on Nephros
Inventions and on any Joint Inventions insofar as they do not relate to
manufacture of the Cartridge.

           (b)   Medica shall file, prosecute and maintain patent applications
and resulting patents, if any, on Medica Inventions or on any Joint Inventions
relating to manufacture of the Cartridge.

           (c)   Medica, on the one hand, and Nephros, on the other hand, shall
share equally reasonable patent expenses for any Joint Invention, and shall
promptly reimburse the filing party upon presentation of an invoice by the
filing party.

           (d)   The non-filing party is entitled to review and comment in a
timely manner on any such patent filings (applications and response to office
actions) prior to submission to the relevant patent offices. Each party is
responsible for filing, prosecuting, and maintaining patent applications and
resulting patents on any invention owned solely by it.

     10.7  Reservation of All Other Rights. Except as expressly set forth in
           -------------------------------
this agreement, nothing contained herein may be construed as doing the
following:

     (1)   giving Medica any rights to any Intellectual Property of Nephros or
           any other proprietary technology of Nephros (whether pre-existing
           Intellectual Property or Intellectual Property arising in connection
           with this agreement), including without limitation any of Nephros'
           patent rights relating to the design, development, testing, use, and
           sale of the Cartridge; or

     (2)   giving Nephros any rights to any Intellectual Property of Medica or
           any other proprietary technology of Medica (whether pre-existing
           Intellectual Property or Intellectual Property arising in connection
           with this agreement).

                                       12

<PAGE>

                                   Article 11
                                 REPRESENTATIONS

     11.1  Representations of Medica.  Medica represents to Nephros as follows:
           -------------------------

           (a)   Medica is a corporation validly existing under the laws of its
jurisdiction of organization with the power to own all of its properties and
assets and to carry on its business as it is currently being conducted.

           (b)   Medica has the power to execute and deliver this agreement and
to perform its obligations under this agreement.

           (c)   Medica's Chief Executive Officer, or Amministratore Unico (AU),
has duly authorized Medica to execute and deliver this agreement and perform its
obligations under this agreement, and no other corporate proceedings of Medica
are necessary with respect thereto.

           (d)   This agreement constitutes its valid and binding obligation,
enforceable in accordance with its terms, except as enforceability is limited by
(A) any applicable bankruptcy, insolvency, reorganization, moratorium or similar
law affecting creditors' rights generally, or (B) general principles of equity,
whether considered in a proceeding in equity or at law.

           (e)   Medica is not required to obtain the Consent of any Person,
including the Consent of any party to any Contract to which it is a party, in
connection with execution and delivery of this agreement and performance of its
obligations under this agreement.

           (f)   Medica is the rightful owner or licensee of any Intellectual
Property that it may use in performing its obligations under this agreement.

           (g)   Medica's execution and delivery of this agreement and
performance of its obligations under this agreement do not (A) violate any
provision of its articles of incorporation or by-laws, as applicable, as
currently in effect, (B) conflict with, result in a breach of, constitute a
default under (or an event which, with notice or lapse of time or both, would
constitute a default under), accelerate the performance required by, result in
the creation of any Lien upon any of its properties or assets under, or create
in any party the right to accelerate, terminate, modify, or cancel, or require
any notice under, any Contract to which it is a party or by which any of its
properties or assets are bound, or (C) violate any Law or Order currently in
effect to which it is subject.

     11.2  Representations of Nephros.  Nephros represents to Medica as follows:
           --------------------------

           (a)   Nephros is a corporation validly existing and in good standing
under the law of the State of Delaware with the power to own all of its
properties and assets and to carry on its business as it is currently being
conducted.

           (b)   Nephros has the power to execute and deliver this agreement and
to perform its obligations under this agreement.

                                       13

<PAGE>

           (c) Nephros' board of directors has duly authorized Nephros to
execute and deliver this agreement and perform its obligations under this
agreement, and no other corporate proceedings of Nephros are necessary with
respect thereto.

           (d) This agreement constitutes the valid and binding obligation of
Nephros, enforceable in accordance with its terms, except as enforceability is
limited by (A) any applicable bankruptcy, insolvency, reorganization, moratorium
or similar law affecting creditors' rights generally, or (B) general principles
of equity, whether considered in a proceeding in equity or at law.

           (e) Nephros' execution and delivery of this agreement and performance
of its obligations under this agreement do not (A) violate any provision of
Nephros' articles of incorporation or by-laws as currently in effect, or (B)
violate any Law or Order currently in effect to which Nephros is subject.

                                   Article 12
                                 INDEMNIFICATION

     12.1  Indemnification.  (a)  Medica shall indemnify Nephros, each Affiliate
           ---------------
of Nephros, each Representative of Nephros, and the heirs, executors,
successors, and assigns of any of the foregoing, against the following
Indemnifiable Losses:

     (1)   Indemnifiable Losses arising out of breach by Medica of any of its
           obligations under this agreement;

     (2)   Indemnifiable Losses arising out of any inaccuracy in any
           representations of Medica contained in this agreement;

     (3)   Indemnifiable Losses arising out of any claim that any Intellectual
           Property of Medica employed by Medica under this agreement conflicts
           with the Intellectual Property Rights of any other Person; and

     (4)   Indemnifiable Losses arising out of any Cartridges that have been
           manufactured by Medica under this agreement, on condition that those
           Indemnifiable Losses are due to breach by Medica of any of its
           obligations under this agreement or the negligence or willful
           misconduct of Medica or any of its agents or Representatives.

           (b)   Nephros shall indemnify each Medica Entity, each Affiliate of
each Medica Entity, each Representative of each Medica Entity, and the heirs,
executors, successors, and assigns of any of the foregoing, against the
following Indemnifiable Losses:

     (1)   Indemnifiable Losses arising out of breach by Nephros of any of its
           obligations under this agreement;

     (2)   Indemnifiable Losses arising out of any inaccuracy in any
           representations of Nephros contained in this agreement;

                                       14

<PAGE>

     (3)   Indemnifiable Losses arising out of any claim that any Intellectual
           Property of Nephros required to manufacture the Cartridge conflicts
           with the Intellectual Property Rights of any other Person; and

     (4)   Indemnifiable Losses arising out of any Cartridges that have been
           manufactured by Medica under this agreement, unless those
           Indemnifiable Losses are due to breach by Medica of any of its
           obligations under this agreement or the negligence or willful
           misconduct of Medica or its agents or Representatives.

     12.2  Procedures Relating to Indemnification.  (a) In order to be entitled
           --------------------------------------
to indemnification under this Article 11 in connection with a claim made by any
Person against any other Person with respect to which that other Person (an
"Indemnified Party") is entitled to indemnification pursuant to this Article 11
 -----------------
(any such claim, a "Third Party Claim"), that Indemnified Party must do the
                    -----------------
following:

     (1)   notify the Person or Persons obligated to indemnify it (the
           "Indemnifying Party") in writing, and in reasonable detail, of that
            ------------------
           Third Party Claim as soon as possible but in any event within 10
           Business Days after receipt of notice of that Third Party Claim,
           except that any failure to give any such notification will only
           affect the Indemnifying Party's obligation to indemnify the
           Indemnified Party if the Indemnifying Party has been prejudiced as a
           result of that failure; and

     (2)   deliver to the Indemnifying Party as soon as possible but in any
           event within 10 Business Days after the Indemnified Party receives a
           copy of all notices and documents (including court papers) delivered
           to that Indemnified Party relating to that Third Party Claim.

           (b)   In the event of a Third Party Claim against one or more
Indemnified Parties, the Indemnifying Party may participate in the defense of
that Third Party Claim and, if it so chooses, assume at its expense the defense
of that Third Party Claim with counsel selected by the Indemnifying Party and
reasonably satisfactory to the Indemnified Party. If the Indemnifying Party so
elects to assume the defense of a Third Party Claim, the Indemnifying Party will
not be liable to the Indemnified Party for any legal expenses subsequently
incurred by the Indemnified Party in connection with the defense of that Third
Party Claim, except that if, under applicable standards of professional conduct,
there exists a conflict on any significant issue between the Indemnified Party
and the Indemnifying Party in connection with that Third Party Claim, the
Indemnifying Party shall pay the reasonable fees and expenses of one additional
counsel to act with respect to that issue to the extent necessary to resolve
that conflict. If the Indemnifying Party assumes defense of any Third Party
Claim, the Indemnified Party will be entitled to participate in the defense of
that Third Party Claim and to employ counsel, at its own expense, separate from
counsel employed by the Indemnifying Party, it being understood that the
Indemnifying Party will be entitled to control that defense. The Indemnifying
Party will be liable for the fees and expenses of counsel employed by the
Indemnified Party for any period during which the Indemnifying Party did not
assume the defense of any Third Party Claim (other than during any period in
which the Indemnified Party failed to give notice of the Third Party Claim as
provided above and a reasonable period after such notice). If the Indemnifying
Party chooses to defend or prosecute a Third Party Claim, all the parties shall
cooperate in the defense

                                       15

<PAGE>

or prosecution of that Third Party Claim, including by retaining and providing
to the Indemnifying Party records and information reasonably relevant to that
Third Party Claim, and making employees available on a reasonably convenient
basis. If the Indemnifying Party chooses to defend or prosecute any Third Party
Claim, the Indemnified Party will agree to any settlement, compromise or
discharge of that Third Party Claim that the Indemnifying Party recommends,
except that the Indemnifying Party may not without the Indemnified Party's prior
written consent agree to entry of any judgment or enter into any settlement that
provides for injunctive or other non-monetary relief affecting the Indemnified
Party or that does not include as an unconditional term that each claimant or
plaintiff give to the Indemnified Party a release from all liability with
respect to that Third Party Claim. Whether or not the Indemnifying Party has
assumed the defense of a Third Party Claim, the Indemnified Party shall not
admit any liability with respect to, or settle, compromise or discharge, that
Third Party Claim without the Indemnifying Party's prior written consent.

           (c)   In order for any Indemnified Party to be entitled to any
indemnification under this agreement in respect of a claim that does not involve
a Third Party Claim (a "Claim"), the Indemnified Party must reasonably promptly
                        -----
notify the Indemnifying Party of that Claim, and describe in reasonable detail
the basis for that Claim, except that any failure to give any such notification
will only affect the Indemnifying Party's obligation to indemnify the
Indemnified Party if the Indemnifying Party has been prejudiced as a result of
that failure. If the Indemnifying Party does not dispute that the Indemnified
Party is entitled to indemnification with respect to that Claim by notice to the
Indemnified Party prior to the expiration of a 30-Business-Day period following
receipt by the Indemnifying Party of notice of that Claim from the Indemnified
Party, that Claim will be conclusively deemed a liability of the Indemnifying
Party and the Indemnifying Party shall pay the amount of that liability to the
Indemnified Party on demand or, in the case of any notice in which the amount of
the Claim (or any portion thereof) is estimated, on such later date as the
amount of the Claim (or any portion thereof) becomes finally determined. If the
Indemnifying Party has timely disputed its liability with respect to the Claim,
the Indemnifying Party and the Indemnified Party shall proceed in good faith to
negotiate a resolution of the Claim and, if the Claim is not resolved through
negotiations within 60 Business Days following receipt by the Indemnifying Party
of notice of that Claim from the Indemnified Party, the Indemnified Party may
take the dispute to arbitration pursuant to Section 14.5.

     12.3  No Liability for Consequential Damages.  No party will be liable to
           --------------------------------------
any other for any indirect, consequential, or special damages or for loss of
profits. This limitation does not, however, apply to any obligation of either
party to indemnify the other in connection with any Third Party Claim. This
Section 12.3 does not apply to any liability of a party in respect of death or
personal injury arising out of the negligence or willful misconduct of that
party or its agents or Representatives.

     12.4  Limitation on Indemnification. (a) Each party's exclusive remedy with
           -----------------------------
respect to any Claims will be under the indemnification provisions of this
Article 12.

           (a)   The liability of Medica, on the one hand, and Nephros, on the
other hand, under this Article 12 will not exceed the purchase value of any
quantities of the Cartridge that are the subject of any Claim or Third Party
Claim.

                                       16

<PAGE>

                                   Article 13
                              TERM AND TERMINATION

     13.1  Term. The term of this agreement is three years from and including
           ----
the date of this agreement, with automatic renewal for additional successive
one-year terms unless no later than 90 days prior to the end of the initial term
or any one-year renewal term either party notifies the other that it wishes to
terminate this Agreement effective the end of the initial term or that one-year
renewal term, as applicable.

     13.2  Termination.  (a)  This agreement may be terminated as follows:
           -----------

     (1)   by Nephros upon 10 Business Days' written notice to Medica if any
           representation made in this agreement by Medica was materially
           inaccurate when made and either (1) that inaccuracy has contributed
           to Nephros's incurring Indemnifiable Losses or (2) Medica fails to
           take action to render the inaccurate representation accurate as if it
           were made on the day Nephros would otherwise be entitled to terminate
           this agreement under this Section 13.2(a)(l);

     (2)   by Medica upon 10 Business Days' written notice to Nephros if any
           representation made in this agreement by Nephros was materially
           inaccurate when made and either (1) that inaccuracy has contributed
           to either or both Medica Entities' incurring Indemnifiable Losses or
           (2) Nephros fails to take action to render the inaccurate
           representation accurate as if it were made on the day Medica would
           otherwise be entitled to terminate this agreement pursuant to this
           Section 13.2(a)(2);

     (3)   by Nephros immediately if Medica has breached any of its material
           obligations under this agreement and, if it is curable, has not cured
           that breach prior to expiration of a 45-Business-Day period from the
           date of breach;

     (4)   by Medica immediately if Nephros has breached any of its material
           obligations under this agreement and, if it is curable, has not cured
           that breach prior to expiration of a 45-Business-Day period from the
           date of breach;

     (5)   by Nephros immediately if there occurs an Event of Insolvency with
           respect to Medica;

     (6)   by Medica immediately if there occurs an Event of Insolvency with
           respect to Nephros;

     (7)   by Nephros, if for any reason other than an Event of Force Majeure
           Medica fails to deliver within 40 days after the required delivery
           date, or on more than two occasions in any 90-day period fails to
           deliver within 20 Business Days after the required delivery day, any
           shipment of Cartridge it is required to deliver pursuant to Section
           3.2, Section 4.2, or Section 9.3;

     (8)   by Medica or Nephros on 15 Business Days' prior written notice to
           Nephros or Medica, respectively, if due to an Event of Force Majeure
           (A) Nephros or

                                       17

<PAGE>

           (B) Medica or both of them, respectively, is prevented from
           performing an obligation under this agreement for more than 60 days,
           unless prior to the end of the 15-Business-Day period the Event of
           Force Majeure ceases to exist and the party prevented from performing
           resumes performance under this agreement and notifies the party
           giving the notice of termination;

           (b)   The parties may terminate this agreement at any time by written
agreement.

     13.3  Effect of Termination.  (a) Expiration of the term of this agreement
           ---------------------
and termination under 13.2 will have one or more of the following consequences
according to the table set out below:

A.   Nephros shall pay to Medica, and Medica shall pay to Nephros, all amounts
     payable up to the date of termination but not yet paid.

B.   Nephros shall purchase and Medica shall manufacture and deliver to Nephros
     consistent with the terms of this agreement all Cartridges ordered by
     Nephros but not yet delivered to Nephros.

C.   Nephros shall pay Medica an amount equal to the purchase price of any
     Cartridges manufactured in connection with purchase orders that remain open
     on the date of termination of this agreement and Medica shall deliver to
     Nephros pursuant to Section 3.2 those Cartridges.

     ---------------------------------------------------------------------------
      Grounds for Termination      Consequences
     ---------------------------------------------------------------------------
      Expiration under 13.1        A
     ---------------------------------------------------------------------------
      13.2(a)(1)                   A and, at Nephros' option, either B or C
     ---------------------------------------------------------------------------
      13.2(a)(2)                   A and, at Nephros' option, either B or C
     ---------------------------------------------------------------------------
      13.2(a)(3)                   A and, at Nephros' option, either B or C
     ---------------------------------------------------------------------------
      13.2(a)(4)                   A and, at Nephros' option, either B or C
     ---------------------------------------------------------------------------
      13.2(a)(5)                   A and, at Nephros' option, either B or C
     ---------------------------------------------------------------------------
      13.2(a)(6)                   A and, at Nephros' option, either B or C
     ---------------------------------------------------------------------------
      13.2(a)(7)                   A and, at Nephros' option, either B or C
     ---------------------------------------------------------------------------
      13.2(a)(8)                   AB
     ---------------------------------------------------------------------------
      13.2(b)                      A
     ---------------------------------------------------------------------------

           (b)   Upon any termination (including expiration) of this agreement,
each party shall return to the other party all documents and other tangible
items it or its employees or agents have received or created pursuant to this
agreement pertaining, referring, or relating to Confidential Information of the
other party.

                                       18

<PAGE>

          (c)  Termination of this agreement will not affect rights and
obligations of either party that may have accrued prior to the date of
termination or any obligation contained in Sections 10.1 and 10.2, Article 122,
Article 133, and Sections 14.3, 14.4, and 14.5.

                                   Article 14
                                  MISCELLANEOUS

     14.1 Definitions. When used in this agreement, the following terms have the
          -----------
following meanings:

     "Affiliate" means, with respect to any given Person, any other Person at
      ---------
the time directly or indirectly controlling, controlled by or under common
control with that Person, or (2) any director, officer or employee of that
Person. For purposes of this Agreement, "control" means the possession, directly
                                         -------
or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through ownership of voting securities, by
contract or otherwise.

     "Business Day" means any Monday, Tuesday, Wednesday, Thursday, or Friday
      ------------
that is not a day on which banking institutions in the State of New York are
authorized by law, regulation or executive order to close.

     "cGMPs" means current Good Manufacturing Practices (as provided for,
      -----
respectively, in the Rules Governing Medicinal Products in the European
Community Volume 4 (Guide to Good Manufacturing Practice for Medicinal Products)
and by the FDA as set out in 21 C.F.R. 210 and 21 C.F.R. 211, as amended from
time to time).

     "Confidential Information" means all data, specifications, training, and
      ------------------------
any other know-how related to the design, development, manufacture, or
performance of the Cartridge, as well as all other information and data provided
by either party to the other party pursuant to this agreement in written or
other tangible medium and marked as confidential, or if disclosed orally or
displayed, confirmed in writing within 30 Business Days after disclosure and
marked as confidential, except that the term "Confidential Information" does not
include the following:

     (1)  information that is or becomes generally available to the public other
          than as a result of a breach of this agreement by the receiving party
          or its Representatives;

     (2)  information that was within the receiving party's possession or
          knowledge prior to its being furnished to the receiving party by or on
          behalf of the disclosing party, on condition that the source of that
          information was not bound by a confidentiality agreement with or other
          contractual, legal or fiduciary obligation of confidentiality to the
          disclosing party or any other Person with respect to that information;

     (3)  information that is or becomes available to the receiving party on a
          non-confidential basis from a source other than the disclosing party
          or any of its Representatives, on condition that that source was not
          bound by a confidentiality agreement with or other contractual, legal
          or fiduciary obligation of

                                       19

<PAGE>

          confidentiality to the disclosing party or any other Person with
          respect to that information; or

     (4)  information that is independently developed by the receiving party
          without use of Confidential Information and otherwise in a manner not
          inconsistent with this letter agreement.

     "Consent" means any approval, consent, ratification, filing, declaration,
      -------
registration, waiver, or other authorization.

     "Contract" means any oral or written agreement, contract, obligation,
      --------
promise, arrangement, or undertaking that is legally binding.

     "Event of Insolvency" with respect to any Person means any of the
      -------------------
following:

     (1)  the institution by that Person of proceedings under the United States
          Bankruptcy Code, or any other applicable U.S. federal or state Law or
          any applicable foreign Law seeking an order for relief;

     (2)  the consent of that Person to the institution of bankruptcy or
          insolvency proceedings against that Person;

     (3)  the filing by that Person of a petition seeking reorganization or
          release under the Federal Bankruptcy Reform Act or any other
          applicable U.S. federal or state Law or applicable foreign Law, or the
          consent by that Person to the filing of any such petition or to the
          appointment of a receiver, liquidator, assignee, trustee, sequestrator
          (or other similar official) of that Person or of any substantial part
          of the property of that Person;

     (4)  the making by that Person of an assignment for the benefit of
          creditors;

     (5)  admission by that Person of its inability to pay its debts generally
          as they become due;

     (6)  the entry of a decree or order by a court having jurisdiction
          adjudging that Person bankrupt or insolvent, or approving as properly
          filed a petition seeking reorganization, arrangement, adjustment or
          composition of or in respect of that Person under the U.S. Bankruptcy
          Code or any other applicable U.S. federal or state Law or any
          applicable foreign Law, or appointing a receiver, liquidator,
          assignee, trustee, sequestrator (or other similar official) of that
          Person, or of any substantial part of the property of that Person, or
          ordering the winding up or liquidation of the affairs of that Person,
          and (A) that Person consents to that decree or order or (B) that
          decree or order remains unstayed and in effect for more than 60
          consecutive days.

     "FDA" means the U.S. Food and Drug Administration.
      ---

     "FOB" means "Free on Board," as that term is defined in INCOTERMS 2000.
      ---

                                       20

<PAGE>

     "Governmental Authority" means any (1) nation, state, county, city, town,
      ----------------------
village, district, or other jurisdiction of any nature, (2) federal, state,
local, municipal, or other government, whether U.S. of foreign, (3) governmental
or quasi-governmental authority of any nature (including any governmental
agency, branch, department, official, or entity and any court or other tribunal,
including an arbitral tribunal), (4) multi-national organization or body
including the EU and notified bodies, or (5) body exercising, or entitled to
exercise, any administrative, executive, judicial, legislative, police,
regulatory, or taxing power of any nature.

     "Indemnifiable Losses" means all losses, liabilities, taxes, damages,
      --------------------
deficiencies, obligations, fines, expenses, claims, demands, actions, suits,
proceedings, judgments or settlements, whether or not resulting from Third Party
Claims, incurred or suffered by an Indemnified Party, including interest and
penalties with respect thereto and out-of-pocket expenses and reasonable
attorneys' and accountants' and experts' fees and expenses incurred in the
investigation or defense of any of the same or in asserting, preserving or
enforcing any of the Indemnified Party's rights hereunder, net of any amounts
recovered or recoverable under any insurance policy.

     "Intellectual Property" means, with respect to any Person, all trademarks,
      ---------------------
patents, copyrights, and any applications for registration thereof, and trade
secrets of that Person, whether owned, used, or licensed by that Person as
licensee or licensor.

     "Law" means any federal, state, local, municipal, foreign, international,
      ---
multinational, or other administrative order, constitution, law, ordinance,
principle of common law, regulation, statute, or treaty.

     "Lien" means any charge, claim, community property interest, condition,
      ----
equitable interest, lien, option, pledge, security interest, right of first
refusal, or restriction of any kind, including any restriction on use, voting,
transfer, receipt of income, or exercise of any other attribute of ownership.

     "Month" means any of the twelve months of a year.
      -----

     "Order" means any award, decision, injunction, judgment, order, ruling,
      -----
subpoena, or verdict of any court, arbitral tribunal, administrative agency, or
other Governmental Authority.

     "Person" means any individual, corporation (including any non-profit
      ------
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, Governmental
Authority or other entity.

     "Representative" means, with respect to a particular Person, any director,
      --------------
officer, employee, agent, consultant, advisor, or other representative of that
Person, including legal counsel, accountants, and financial advisors.

     "Year" means (1) the period commencing with the date of this agreement and
      ----
ending on December 31, 2003, (2) any subsequent 12-month period commencing on
January 1st and ending on December 31st, and (3) the period beginning January
1st of the year in which this agreement expires or is terminated and ending on
the date this agreement expires or is terminated.

                                       21

<PAGE>

     14.2  Further Assurances. At any time or from time to time from the date of
           ------------------
this agreement, Medica, on the one hand, and Nephros, on the other hand, shall
at the request, and at the expense, of the other do the following:

     (1)   to the extent consistent with this agreement deliver to the other
           such records, data, or other documents requested by the other; and

     (2)   take or cause to be taken all such other actions as are reasonably
           necessary or desirable in order to permit the other to obtain the
           full benefits of this agreement.

     14.3  Governing Law. This agreement is governed by the laws of the State of
           -------------
New York without giving effect to principles of conflict of laws.

     14.4  Dispute Resolution. The parties shall attempt in good faith to
           ------------------
resolve any controversy or claim that may arise concerning their respective
rights and obligations under this agreement. If they are unable to do so within
30 Business Days from the date that controversy or claim arose, they shall refer
the controversy or claim to the AU of Medica and the CEO of Nephros, who shall
meet in person or telephonically within 20 Business Days of being requested to
do so and shall in good faith attempt to resolve the dispute. If the controversy
or claim cannot then be resolved, the parties hereby agree first to try in good
faith to settle the dispute by mediation administered by the American
Arbitration Association at its New York City offices before resorting to
arbitration.

     14.5  Arbitration. Any controversy or claim arising out of or relating to
           -----------
this agreement or the applicability of this Section 14.5 that is not resolved
pursuant to Section 14.4 will be determined by arbitration in accordance with
the International Arbitration Rules of the American Arbitration Association.
Unless the parties agree otherwise the number of arbitrators will be three, each
of whom will be appointed by the American Arbitration Association. One
arbitrator must be a lawyer, the second must be an expert in financial matters,
and the third must have expertise in the manufacture of hemodialysis products.
The place of arbitration will be New York, New York, U.S.A. The language of the
arbitration will be English. Prior to the commencement of hearings, each of the
arbitrators appointed must provide an oath or undertaking of impartiality.
Judgment upon the award rendered by the arbitrators may be entered by any court
having jurisdiction thereof. The cost of any such arbitration will be divided
equally between Nephros, on the one hand, and Medica, on the other hand, with
each party bearing its own attorneys' fees and costs.

     14.6  Force Majeure. (a) No party will be responsible to the other under
           -------------
this agreement for failure or delay in performing any obligations under this
agreement, other than payment obligations, due to factors beyond its control,
including without limitation any war, fire, earthquake, or other natural
catastrophe, or any act of God, but excluding labor disputes involving all or
any part of the work force of that party (each such factor, an "Event of Force
                                                                --------------
Majeure"). Upon the occurrence of an Event of Force Majeure, the party failing
-------
or delaying performance shall promptly notify the other party in writing,
setting forth the nature of the occurrence, its expected duration, and how that
party's performance is affected. Any party subject to an Event of Force Majeure
shall use commercially reasonable efforts to resume performing its obligations
under this agreement as soon as practicable. Except as provided in

                                       22

<PAGE>

Section 14.6(b), if an Event of Force Majeure occurs, the affected party will be
excused from performing and the time for performance will be extended as long as
that party is unable to perform as result of the Event of Force Majeure.

           (b)  If any Event of Force Majeure prevents Medica from delivering
any shipment of Cartridges for more than 30 Business Days beyond the scheduled
delivery date, then Nephros may cancel its order without incurring any liability
to Medica with respect thereto and those Cartridges will constitute Default
Cartridges for purposes of Section 1.3.

     14.7  Assignment. This agreement inures to the benefit of and is binding
           ----------
upon the successors and assignees of the parties. Neither party may assign any
of its rights or obligations under this agreement without the prior written
consent of the other, which the other party may not unreasonably withhold,
except that Nephros may upon giving written notice to Medica assign or transfer
its rights and obligations under this agreement to an Affiliate of Nephros or a
successor to all or substantially all of its assets or business relating to this
agreement, whether by sale, merger, operation of law, or otherwise.

     14.8  Notices. (a) Every notice or other communication required or
           -------
contemplated by this agreement must be in writing and sent by one of the
following methods:

     (1)   personal delivery, in which case delivery will be deemed to occur the
           day of delivery;

     (2)   by a recognized overnight delivery service such as Federal Express or
           DHL Worldwide Express, in which case delivery will be deemed to occur
           the day of delivery.

           (b)  In each case, a notice or other communication sent to a party
must be directed to the address for that party set forth below, or to another
address designated by that party by written notice. All notices to be given by a
Medica Entity may be given on its behalf by the other Medica Entity following
consultation between Medica.

     if to Nephros:
     Nephros, Inc.
     3960 Broadway
     New York, NY 10032
     Attention:    Norman Barta

     with a copy to:
     Kramer Levin Naftalis & Frankel LLP
     919 Third Avenue
     New York, NY 10022-3852
     Attention:    Richard Marlin, Esq.

                                       23

<PAGE>

     if to Medica:
     Medica s.r.l.
     Via Degli Artigiani, 6
     41036 Medolla (MO) Italy
     Attention:    Luciano Fecondini

     14.9  Severability. If any provision of this agreement is held
           ------------
unenforceable by any court of competent jurisdiction, all other provisions of
this agreement will remain effective. If any provision of this agreement is held
to be unenforceable only in part or degree, it will remain effective to the
extent not held unenforceable.

     14.10 Entire Agreement. This agreement constitutes the entire agreement of
           ----------------
the parties pertaining to the subject matter of this agreement. It supersedes
all prior agreements of the parties, whether oral or written, pertaining to the
subject matter of this agreement.

     14.11 Amendment. This agreement may not be amended except by an instrument
           ---------
in writing signed on behalf of both parties.

     14.12 Independent Contractor. Nothing in this agreement creates, or will be
           ----------------------
deemed to create, a partnership or the relationship of principal and agent or
employer and employee between the parties. Each party agrees to perform under
this agreement solely as an independent contractor.

     14.13 Counterparts. This agreement may be executed in counterparts, each of
           ------------
which is an original and all of which together constitute one and the same
instrument.

     The undersigned are executing this agreement on the date stated in the
introductory clause.

                                         NEPHROS, INC.

                                         By:   /s/ Norman J. Barta
                                              ----------------------------------
                                               Name: Norman J. Barta
                                               Title: Chief Executive Officer

                                         MEDICA s.r.l.

                                         By:   /s/ Luciano Fecondini
                                              ----------------------------------
                                               Name: Luciano Fecondini
                                               Title: Amministratore Unico

                                       24

<PAGE>

               Manufacturing and Supply Agreement: Nephros/Medica

            Schedule 3.1: Forecast Initiation Date and Price Schedule

Forecast Initiation Date: July 1, 2003

Price Schedule: in EURO (Euro)

                                      * * *

                                       25

<PAGE>

                         Exhibit A: Purchase Order Form

                                       26

<PAGE>

                       Schedule 4.1: Filter Specifications

The MD 190 filter is to be produced in accordance with Medica procedure M12.301
as per Medica Bill of Material M.07492.

                    Schedule 5.6: Nephros-Supplied Equipment

Equipment Pack A: * * *

Equipment Pack B: * * *

Equipment Pack C: * * *

Equipment Pack D: * * *

                                       27<PAGE>

                                                                   Exhibit 10.22

                                LICENSE AGREEMENT

                AGREEMENT made as of July 1, 2004 between THE TRUSTEES OF
        COLUMBIA UNIVERSITY IN THE CITY OF NEW YORK ("Licensor"), having an
        office c/o Executive Director, Audubon Research Park, 3960 Broadway, New
        York, New York 10032 and Nephros, Inc. ("Licensee"), having an office at
        3960 Broadway, New York, NY 10032.

                                   WITNESSETH:

                WHEREAS, Licensee desires to acquire a license to use space at
        the Audubon Business and Technology Center in the Mary Woodard Lasker
        Building (the "Building"), located at 3960 Broadway in the City, County
        and State of New York; and

                WHEREAS, Licensor is agreeable to granting to Licensee a license
        to use space in the Building on the terms and conditions hereinafter set
        forth.

                NOW, THEREFORE, the parties agree as follows:

        1.      LICENSE. Licensor does hereby grant to Licensee a
nontransferable license to use certain space (the "Licensed Space") on the 3&4th
floor of the Building as more particularly shown on Exhibit "A" annexed hereto
and made a part hereof.

        2.      TERM. The term of this Agreement (the "Term") shall commence on
the date hereof (the "Commencement Date"), and shall, unless sooner terminated
in accordance with the terms hereof or pursuant to law, continue until 6/30/05
(the "Expiration Date").

        3.      CONDITION OF PREMISES. Licensee acknowledges that it has
inspected the Licensed Space and agrees to take the Licensed Space "as is"
without any work being done therein by Licensor, and without any obligation upon
Licensor to make any contribution toward or to assume the performance of any
work in order to prepare the Licensed Space for use by Licensee. Licensee
acknowledges that all materials, fixtures and equipment, if any, which Licensor
may elect to make available for Licensee's use are, and shall be and remain, the
property of Licensor. Licensee acknowledges that Licensor has not made and does
not make any representations or warranties to Licensee, whether directly or
indirectly, with respect to the Licensed Space or the use or proposed use
thereof by Licensee.

        4.      USE. Licensee shall use the Licensed Space solely as laboratory
and office space. Prior to taking occupancy of the Licensed Space, Licensee
shall submit to Licensor for approval, Licensee's Regulatory Compliance Plan
(the "Plan") which Plan shall (a) identify those activities of and materials to
be used by Licensee which are or may be subject to Environmental Legal
Requirements (as hereinafter defined) or other Legal Requirements (as
hereinafter defined) and (b) detail Licensee's plans and procedures for
compliance with Environmental Legal Requirements, Legal Requirements and
Insurance Requirements (as hereinafter defined) as to each specific regulated
material and activity. From time to time, at any time during the Term, Licensee
shall revise the Plan to reflect any changes in its activities, materials,
Environmental Legal Requirements, Legal Requirements or Insurance Requirements.
The Plan and all such revisions shall be subject to Licensor's prior review and
approval.

        5.      FEE. (a) Licensee agrees to pay to Licensor as and for the use
of the Licensed Space during the Term an annual amount (the "License Fee") as
set forth on Exhibit "B" annexed hereto and made a part hereof. The License Fee
shall be paid in monthly installments as set forth on Exhibit B, in advance, on
the first day of each and every month during the Term, without offset or
deduction except that the first monthly installment shall be paid upon execution
hereof. If the Commencement Date shall occur on a day other than the first day
of a calendar month or if the Expiration Date shall occur on a day other than
the last day of a calendar month, the License Fee for such calendar month shall
be appropriately prorated.

                     (b) All other sums of money as shall become due and payable
by Licensee to Licensor hereunder (collectively, "License Consideration") shall
be paid to Licensor within ten (10) days after receipt by Licensee of bills or
notice from Licensor to Licensee identifying the same. If Licensee shall fail to
pay any License Consideration within such ten (10) day period, or shall fail to
pay any installment of the License Fee within ten (10) days after it is due,
such unpaid amounts shall bear interest at the rate per annum equal to the
lesser of (i) two percent (2%) plus the base rate charged by Citibank, N.A. and
in effect during the period such amounts are due and unpaid and (ii) the maximum
rate permitted by law, from the due date of such payment to the date paid to
Licensor.

                     (c) If Licensee shall default in performing any term,
covenant or condition of this Agreement which shall involve the expenditure of
money by Licensee to third parties, and such default shall continue beyond
applicable notice and grace period, Licensor may (but shall not be obligated to)
make such payment or, on behalf of Licensee, expend such sum as may be necessary
to perform or fulfill such term, covenant or condition. All sums so paid or
expended by Licensor shall be deemed to be License Consideration and shall be
payable by Licensee to Licensor in accordance with Paragraph 5(b) above. No such
payment or expenditure by Licensor shall be construed as a waiver of Licensee's
default or of Licensee's obligation to perform any term, covenant or condition
of this License Agreement nor shall it affect any other right or remedy of
Licensor under this License Agreement.

        6.      COVENANTS AND WARRANTIES. Licensee covenants and warrants:

                     (a) at Licensee's sole cost and expense, to keep and
maintain the Licensed Space in good order and condition, to notify Licensor of
any needed repairs, which repairs shall be performed by Licensor at Licensee's
sole cost and expense (Rider 6(a), and to quit and surrender the Licensed Space
to Licensor upon the expiration or earlier termination of this Agreement in as
good and proper order and condition as at the Commencement Date, reasonable wear
and tear excepted; (Rider 6(b)

                     (b) at Licensee's sole cost and expense, to comply promptly
with (1) all presently existing or hereafter enacted laws, orders, ordinances,
rules, regulations and requirements of, and to keep in full force and effect all
permits and licenses required pursuant to, all federal, state, municipal and
local governments and their departments, agencies, commissions, boards and
officers or any other body exercising similar jurisdiction and any other
governmental agency having jurisdiction over the Licensed Space (collectively,
"Legal Requirements"); (2) all orders, rules, regulations, requirements and
recommendations of the New York Board of Fire Underwriters or the Insurance
Service Office or any other body exercising the same or similar functions and
having jurisdiction or cognizance of all or any part of the Licensed Space or
the Building (collectively, "Insurance Requirements"); (3) any and all policies
and procedures of Licensor (including, without limitation, Licensor's Joint
Radiation Safety Committee and Licensor's Office of Environmental Health and
Safety) governing the use, handling or disposal of Hazardous Materials (as
hereinafter defined) by its tenants, licensees, contractors, employees or
researchers, now or hereafter in effect, and (4) any applicable federal, state
or local statute, code, ordinance, rule or regulation, any judicial or
administrative order or judgment applicable to Licensee or the Licensed Space
and any provision or condition of any permit, license, franchise, concession,
agreement or other authorization binding on Licensee relating to (i) the
protection of the environment, the safety and health of persons (including
employees) or the public welfare, (ii) the actual or potential release,
discharge, disposal or emission (whether past or present) of any Hazardous
Materials or (iii) the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, generation or handling of any Hazardous Materials
(collectively, "Environmental Legal Requirements"). The term "Hazardous
Materials" shall mean any flammable, explosive, radioactive, chemical or
infectious materials, hazardous (or biohazardous) materials or wastes, medical
wastes, hazardous or toxic substances, pollutants, gas, vapor, radiation,
chemical or related materials, asbestos or any material containing asbestos, or
any other substance or materials as defined in or regulated by any local, state
or federal law or ordinance or regulation promulgated pursuant thereto;

                     (c) not to use, except to identify Licensee's address (i)
as part of its mailing address on letterhead and other similar materials or (ii)
for purposes of Licensee's publications, the name of Licensor or Columbia
University or any of its officers, trustees, agents, employees, students or
faculty members for any purpose whatsoever without receiving the prior written
approval of Licensor. Without limiting

<PAGE>

the generality of the foregoing, Licensee shall not conduct its operations at
the Licensed Space under any name which includes the word "Columbia", or
otherwise hold itself or its business out as having any affiliation with
Licensor or Columbia University or Columbia-Presbyterian Medical Center;

                     (d) to comply strictly with the Plan (as defined in
Paragraph 4 hereof);

                     (e) not to use or permit the use of biohazardous agents
requiring a degree of containment in excess of that described as National
Institutes of Health Biosafety Level 2, as defined in the U.S. Department of
Health and Human Services, Public Health Service, Centers for Disease Control
and Prevention and National Institutes of Health, Biosafety in Microbiological
and Biomedical Laboratories, dated May, 1993 and any updates or revisions
thereto (the "DHH Specifications");

                     (f) to conduct all scientific research and development
activities in conformity with at least the minimum practices, equipment and
facilities recommended for such activities in the DHH Specifications; and

                     (g) not to use or permit the use of any human subjects or
live and whole dead animals (including, without limitation, live and whole dead
mice and rats) on or at the Licensed Space for any research purposes. In the
event that Licensee at any time during the Term shall desire to (a) use or
permit the use of human subjects or live or whole dead animals for research at
the Building or (b) use or permit the use of any of the facilities of Licensor
to house any live or whole dead animals, Licensee shall forward a request with
appropriate back-up documentation, including, without limitation, a detailed
description of Licensee's proposed research, to Licensor at the address set
forth in Paragraph 17 hereof. Upon receipt of such notice and back-up
documentation, Licensor shall review such request, provided, however, that
Licensor shall, in its sole and absolute discretion, have no obligation to
consent to Licensee's request.

        7.      INSURANCE. Licensee shall, at Licensee's sole cost and expense,
obtain and maintain the following types of insurance in not less than the
indicated amounts with insurance carriers reasonably acceptable to Licensor and
otherwise in compliance with Exhibit "C" annexed hereto and made a part hereof:

                     (a) Workers' Compensation and Employer's Liability
insurance with respect to all persons employed by Licensee at the Licensed Space
with a limit of liability in accordance with applicable law in the case of
Workers' Compensation and with a limit of liability of not less than the
following in the case of Employer's Liability:

        Bodily Injury by Accident - $100,000 each accident;
        Bodily Injury by Disease - $500,000 policy limit;
        Bodily Injury by Disease - $100,000 each employee;

                     (b) Comprehensive General Liability (bodily injury and
property damage) with a combined single limit of liability for bodily injury and
property damage of $2,000,000 per occurrence. Licensor shall be named as an
additional insured under this policy;

                     (c) "All Risk" property insurance (including breakage of
glass and water damage) to all property of Licensee, including all alterations,
within the Licensed Space in an amount equal to the replacement cost of such
property; and

                     (d) Such different or the same types of insurance set forth
above in such amounts as may from time to time be reasonably required by
Licensor against such other insurable hazards as at the time are commonly
insured against in the case of premises similarly situated.

        8.      DAMAGE AND DESTRUCTION. (a) If the Licensed Space or any part
thereof shall be damaged by fire or other casualty, Licensee shall give
immediate notice thereof to Licensor and this Agreement shall continue in full
force and effect, unless Licensor shall elect to terminate this Agreement as set
forth below. In the event that this Agreement shall not be so terminated,
Licensor shall restore the Licensed Space at Licensor's expense and the Licensee
Fee and License Consideration shall be proportionately abated during the period
in which Licensor is restoring the Licensed Space if all or any portion of the
Licensed Space is unusable by Licensee for the purposes set forth in Paragraph 4
above during such period. Licensee's liability for the full amount of the
Licensee Fee and License Consideration shall resume five (5) days after written
notice from Licensor that the Licensed Space is substantially ready for
Licensee's occupancy.

                     (b) In the event that the Licensed Space is rendered wholly
or substantially unusable (whether or not the Licensed Space has been damaged in
whole or in part) by fire or other casualty (of which fact Licensor shall be the
sole judge), Licensor may elect to terminate this Agreement by written notice to
Licensee given within sixty (60) days after such fire or casualty, specifying
the date for the expiration of this Agreement, which shall be no more than
thirty (30) days after the giving of such notice.

                     (c) If Licensor shall fail within thirty (30) days after
notice by Licensee to Licensor of such casualty to restore the damaged portion
of the Licensed Space to substantially the condition existing prior to such
casualty, Licensee may elect to terminate this Agreement by written notice to
Licensor given prior to completion of such restoration, specifying the date for
the expiration of this Agreement, which shall be no more than thirty (30) days
after the giving of such notice.

                     (d) Nothing contained herein shall relieve Licensee from
liability that may exist as a result of damage from fire or other casualty.
Notwithstanding the foregoing, each party shall look first to any insurance in
its favor before making any claim against the other party for recovery for loss
or damage resulting from fire or other casualty, and to the extent that such
insurance is in force and collectible and to the extent permitted by law,
Licensor and Licensee each hereby releases and waives all rights of recovery
against the other or anyone claiming through or under the other, by way of
subrogation or otherwise. The foregoing release and waiver shall be in force
only if both parties' insurance policies contain a clause providing that such a
release or waiver shall not invalidate the insurance and also provided that such
clause can be obtained without additional premium; it being agreed, however,
that the party whose insurance carrier requires such additional premium shall
notify the other party thereof and such other party shall have the right to pay
such additional premium.

                     (e) Licensee acknowledges that Licensor will not carry
insurance on the improvements, furniture, furnishings, fixtures and equipment
and other personal property required to be insured by Licensee pursuant to
Paragraph 7(a) above and Licensor will not be obligated to repair any damage
thereto or replace the same.

                     (f) Licensee hereby waives the provisions of Section 227 of
the Real Property Law and agrees that the provisions of this Paragraph 8 shall
govern and control in lieu thereof.

        9.      ALTERATIONS. Licensee shall not make any improvements,
additions, alterations or other changes, except for cosmetic and decorative
alterations, to the Licensed Space, without the prior written consent of
Licensor in each instance.

        10.     UTILITIES AND SERVICES. (a) Licensee shall have 24-hour,
7-day-a-week access to the Building and passenger elevator service to the
Licensed Space. Freight elevator service shall be available on business days
from 8 a.m. to 4 p.m. If Licensee shall require freight elevator service during
any other time, Licensor shall furnish same provided that Licensee gives
Licensor advance notice and that Licensee pays, on demand, as License
Consideration, Licensor's then established charges therefor.

                     (b) Licensor shall provide electric energy to the Licensed
Space. Licensee shall pay Licensor for electricity consumed by Licensee in the
Licensed Space. Licensor will permit the electrical risers, feeders and wiring
in the Building serving the Licensed Space to be used by Licensee for such
purpose to the extent that they are available, suitable, safe and within the
plan and design capacities of the Building. Licensee shall not be required to
pay Licensor more than the amount calculated by applying to the measured demand
and/or usage of electrical current in or furnished to the Building, the average
rate per unit of measurement, inclusive of applicable taxes, surcharges, time of
day and other charges, payable by Licensor for electrical current furnished to
the Licensed Space by the utility company serving the Building. Should any tax
or charge in the nature of a tax be imposed upon Licensor's receipts from the
sale or resale of electrical current to the Licensed Space, then the pro rata
share thereof allocable to the electrical current furnished to the Licensed
Space shall be passed on to and paid by Licensee. Bills for Licensee's usage of
electrical current shall be paid within ten (10) days by Licensee as License
Consideration. If due to any change in Legal Requirements Licensor shall not be
permitted to provide electric energy to the Licensed Space, then this Agreement
shall not be affected and Licensee shall arrange to obtain electric energy
directly from the public utility company furnishing electrical service to the
Building. In such event Licensee shall no longer pay Licensor for electricity
consumed.

                     (c) Licensee's use of electrical energy shall never exceed
the capacity of the then existing risers or wiring installation, in each case.
In order to insure that such electrical capacity is not exceeded and to avert
possible adverse effect upon the Building's electrical system, Licensee shall
not, without the prior written consent of Licensor, make or perform or permit
any alteration to wiring installations or other electrical facilities in or
serving the Licensed Space or any additions to the electrical fixtures, machines
or equipment or appliances in the Licensed Space. Licensor shall not be
obligated to consent to any such alteration or installation if, in Licensor's
judgment, the same are unnecessary or will cause permanent damage or injury to
the Building, the Building equipment

                                        2

<PAGE>

or the Licensed Space or will cause or create a hazardous condition or entail
excessive or unreasonable alterations, repairs or expense or interfere with or
disturb other tenants or occupants. Only rigid conduit or such other wiring or
conduit as shall not violate Legal Requirements will be allowed.

                     (d) Licensor shall have no liability to Licensee for any
loss, damage or expense which Licensee may sustain or incur by reason of any
change, failure, inadequacy or defect in the supply or character of the
electrical energy or emergency generator back-up power furnished to the Licensed
Space or if the quantity or character of the electrical energy is no longer
available or suitable for Licensee's requirements, except for any actual damage
suffered by Licensee by reason of any such failure, inadequacy or defect caused
by Licensor's gross negligence, and then only after actual notice thereof.

                     (e) Licensor shall make available from the public water
supply to a point or points at or near the Licensed Space selected by Licensor
such quantities of domestic cold and hot water as Licensor, in its sole and
absolute judgment, deems adequate for normal laboratory and ordinary lavatory,
cleaning and drinking purposes. In the event that the Licensee requires hot or
cold water for any purposes other than those specified in the preceding
sentence, including, but not limited to high volume laboratory usage, Licensee
shall pay Licensor, as License Consideration, for water consumed, as shown on
separate submeters for cold and hot water maintained by Licensee, together with
all sewer charges and any other rent, tax, levy or charge based thereon which
now or hereafter is assessed, imposed or a lien upon the Licensed Space or the
Building, as and when bills are rendered. Payment for cold water shall be at the
rate charged by the City for cold water. Payment for hot water shall be at three
(3) times such rate. Licensor shall have no liability to Licensee for any loss,
damage or expense which Licensee may sustain or incur if the quantity or
character of water service changes or is no longer available or suitable for
Licensee's purposes.

                     (f) Licensee shall notify Licensor, within ten (10) days
after the Commencement Date, of the water meter number of each water meter
serving the Licensed Space and whether such meter is for hot water or cold
water. If any such meter is installed subsequent to the taking of possession by
Licensee, then Licensee shall notify Licensor of such information within ten
(10) days after such installation.

                     (g) Licensor shall make available to a point or points at
or near the Licensed Space such piping, systems, equipment and facilities as
Licensor, in its sole and absolute judgment, deems adequate to provide gas
service for normal laboratory consumption. Licensee shall pay Licensor, as
License Consideration, for any and all gas consumed. Meters may be installed and
maintained by Licensor, at Licensee's sole cost and expense. The rates charged
by Licensor to Licensee for gas consumption shall not exceed the rates charged
by the utility company providing such service. Payment for gas consumed by
Licensee in the Licensed Space shall be made by Licensee as License
Consideration within ten (10) days of Licensor's bill therefor. Licensee shall
make no alteration, addition or repair to the gas connection, installations,
equipment and/or facilities without the prior written consent of Licensor in
each instance. Licensor shall have no liability to Licensee for any loss, damage
or expense which Licensee may sustain or incur if the quantity or character of
the gas service is changed or is no longer available or suitable for Licensee's
requirements.

                     (h) Licensor shall, without additional charge to Licensee,
supply hot water for heat, and chilled water for air conditioning and
ventilation to the Licensed Space through existing Building risers, radiators
and air handlers during appropriate seasons as may reasonably be required by
Licensee for ambient heating and cooling seven days a week, 24 hours a day.

                     (i) Licensor shall provide cleaning services in accordance
with the specifications annexed hereto as Exhibit D and made a part hereof.

                     (j) Licensor shall supply compressed air and vacuum air to
a point or points near the Licensed Space in quantities which Licensor deems
adequate for normal laboratory purposes. If Licensee shall require additional
compressed air and vacuum air in excess of that which Licensor deems adequate
for the purposes set forth herein, Licensor shall furnish same at Licensor's
then established rates and same shall be payable by Licensee, as License
Consideration, within ten (10) days of Licensor's bill therefor.

                     (k) Licensee shall be responsible for the proper storage
and removal from the Licensed Space and the Building and the disposal of all of
Licensee's Hazardous Materials. Licensee shall contract for the disposal of
Hazardous Materials, at Licensee's cost and expense, with vendors approved by
Licensor, in its sole and absolute discretion. In contracting with any such
vendor, Licensor shall endeavor to ensure that Licensee shall receive the
benefit of any volume discount granted to Licensor by such vendor.

        11.     NO LIENS. (a) Licensee shall have no power to do any act or to
make any contract which may create or give rise to any lien, mortgage or other
encumbrance on the estate of Licensor or any interest of Licensor or Licensee in
the Licensed Space or the Building.

                     (b) If any lien shall at any time be filed against the
Licensed Space or the Building by reason of any work, labor, services or
materials done for, or supplied to, or claimed to have been done for, or
supplied to, Licensee or anyone holding the Licensed Space through or under
Licensee, Licensee shall cause the same to be discharged of record or adequately
bonded (unless otherwise secured to the satisfaction of Licensor) within twenty
(20) business days after the date Licensee has received notice of the filing of
such lien. If Licensee shall fail to do so, then, Licensor may, but shall not be
obligated to, procure the discharge of the same either by paying the amount
claimed to be due, by deposit in a court of competent jurisdiction or by
bonding, and Licensor may compel the prosecution of an action for the
foreclosure of such lien by the lienor and pay the amount of the judgment, if
any, in favor of the lienor with interest, costs and allowances. Any amount paid
or deposited by Licensor for any such purpose, and all other expenses of
Licensor, including reasonable attorney's fees and disbursements, shall be
deemed to be License Consideration and shall be paid on demand by Licensee.

        12.     SUBORDINATION. Licensee acknowledges that this Agreement is
subject and subordinate to any and all ground or underlying leases and to all
mortgages which may now or hereafter affect such leases or the Building and to
all renewals, modifications, consolidations, replacements and extensions of any
such underlying leases and mortgages.

        13.     NO ASSIGNMENT OR USE BY THIRD PARTIES. Licensee shall not permit
the use or occupancy of all or any part of the Licensed Space by any third party
nor assign its rights nor delegate its duties under this Agreement. For purposes
of this Paragraph 13, a change in control of Licensee shall be deemed an
assignment hereunder. "Change in control" shall be deemed to mean a change (by
transfer or otherwise) in either (a) ownership of fifty percent (50%) or more of
all of the voting stock of a corporation or fifty percent (50%) or more of all
of the legal and equitable interest in a partnership or other business entity or
(b) the possession of the power directly or indirectly to direct or cause the
direction of management and policy of a corporation, partnership or other
business entity, whether through the ownership of voting securities, by
contract, common directors or officers, the contractual right to manage the
business affairs of any such corporation, partnership or business entity, or
otherwise.

        14.     BROKERAGE. Licensee represents to Licensor that there is no
broker, finder, consultant or similar person acting on behalf of Licensee
entitled to a commission, fee or other compensation in connection with the
consummation of this Agreement and no conversations or prior negotiations were
had by Licensee or anyone acting on behalf of Licensee with any broker, finder,
consultant or similar person concerning the use of the Licensed Space except for
such broker(s), if any, set forth in Exhibit "E" annexed hereto and made a part
hereof. Licensee hereby agrees to pay the commission of any such broker, finder,
consultant or similar person. Licensee shall indemnify and hold Licensor
harmless from and against all liability arising from any claims for brokerage
commissions, finder's fees or other compensation resulting from or arising out
of any alleged conversations, negotiations or actions had by Licensee or anyone
acting on behalf of Licensee with any broker, finder, consultant or similar
person. The provisions of this Paragraph 14 shall survive the termination of
this Agreement.

        15.     ACCESS TO THE PREMISES. Licensor and Licensor's agents and
employees shall have the right to enter the Licensed Space for any reasonable
purpose, including, without limitation, for purposes of inspection and repair
and monitoring Licensee's activities for compliance with the Environmental Legal
Requirements, Legal Requirements, Insurance Requirements and the Plan. Except in
cases of emergency or where required for effective inspection and monitoring for
health and safety purposes, Licensor shall provide Licensee with one (1) day
prior notice of its intention to enter the Licensed Space, which notice may be
given orally or by telephone provided that it shall be followed by written
notice received by Licensee on the same day as such oral or telephone notice.
Licensee shall acknowledge such notice "received" by signing a copy thereof and
returning it to Licensor within twenty-four (24) hours of Licensee's receipt,
and Licensor may enter the Licensed Space upon receipt of such copy acknowledged
by Licensee or upon expiration of such 24-hour period, whichever occurs first.

        16.     INDEMNIFICATION. Licensee agrees that Licensee shall make no
claim against Licensor for any injury or damage to Licensee or to any other
person(s) or for any damage to, or loss (by theft or otherwise) of, any property
of Licensee or of any other person. (Rider 16a) Licensee further agrees to
indemnify and save Licensor harmless from and against any and all claims by or
on behalf of any person(s), firm(s) or corporation(s) arising from the conduct
or management of or from any work or thing whatsoever done in, on or about the
Licensed Space during the Term (Rider 16(b), and to indemnify and save Licensor
harmless from and against any and all claims arising from any condition of the
Licensed

                                        3

<PAGE>

Space due to or arising from any act or omission or negligence of Licensee or
any of its agents, contractors, servants, employees, licensees or invitees, and
from and against all liabilities, costs and expenses (including, without
limitation, attorneys' fees and disbursements) incurred in or in connection with
any such claim or claims or action or proceeding brought thereon; and in case
any action or proceeding shall be brought against Licensor by reason of any such
claim, Licensee upon notice from Licensor agrees to resist or defend such action
or proceeding and to employ counsel therefor reasonably satisfactory to
Licensor. The provisions of this Paragraph 16 shall survive the termination of
this Agreement.

        17.     NOTICES. All notices, demands or requests made pursuant to,
under or by virtue of this Agreement must be in writing (whether or not so
stated) and sent either by personal delivery or by nationally recognized
overnight courier service or by certified or registered mail, return receipt
requested, postage prepaid as follows:

To Licensor:        Executive Director
                    Audubon Research Park, PH 1525
                    630 West 168th Street
                    New York, New York 10032

    with a
   copy to:         (i) Columbia University
                    Office of the General Counsel
                    412 Low Memorial Library
                    New York, New York  10027
                    Attention:  Deputy General Counsel

     and to:        (ii) Rosenman & Colin LLP
                    575 Madison Avenue
                    New York, New York 10022
                    Attention:  Donald H. Siskind, Esq.

To Licensee:        Nephros, Inc.
                    3960 Broadway, 4th Floor
                    New York, NY   10032
                    Attention: Norman Barta

    with a
   copy to:         ------------------------------
                    ------------------------------
                    ------------------------------
                    Attention:
                              --------------------

or to such alternative address(es) as may from time to time be designated by
notice given in the manner provided for in this Paragraph 17. Any such notice,
demand or request shall be deemed to have been rendered or given on the date of
delivery, in the case of personal delivery or delivery by overnight courier, or
on the date which is three (3) business days after mailing.

        18.     SURRENDER. Upon the termination of this Agreement, Licensee
shall peaceably and quietly leave and surrender to Licensor the Licensed Space
broom clean, in good order and condition, ordinary wear and tear excepted.

        19.     SELF-HELP. If Licensee shall default in the performance of any
covenant, provision, agreement or condition of this Agreement, and such default
shall continue beyond applicable notice and grace period, then Licensor, without
waiving such default and without liability to Licensee, may (but shall not be
obligated), perform the same (and shall have access to the Premises, if
necessary, to do so), including, without limitation, the making of repairs, for
the account and at the expense of Licensee. Any amounts paid by Licensor in
connection with the foregoing, shall be deemed to be License Consideration
payable by Licensee to Licensor within ten (10) days of Licensor's bill
therefor. The rights of Licensor under this Paragraph 19 shall be in addition to
those set forth in Paragraph 5(c).

        20.     TERMINATION. (a) Licensor may (but shall not be obligated to)
terminate this Agreement upon five (5) days' notice to Licensee if (i) Licensee
shall default in the payment of the Licensee Fee or License Consideration for
five (5) days after the due date thereof, (ii) Licensee shall be in default
hereunder other than a default set forth in subparagraph (i) of this Paragraph
20, which default shall continue and shall not be cured for thirty (30) days
after notice thereof to Licensee, or (iii) in the case of a default other that a
default set forth in subparagraph (i) of this Paragraph 20 which for causes
beyond Licensee's control cannot with due diligence be cured within such 30-day
period, if Licensee (1) shall not, promptly upon receipt of such notice advise
Licensor of Licensee's intention to institute all steps necessary to cure such
default or (2) shall not institute and thereafter with reasonable diligence
prosecute to completion all steps necessary to cure the same.

                     (b) Provided that Licensee shall surrender and deliver
possession of the Licensed Space to Licensor, and shall not be in default beyond
applicable notice and grace period in performing any term, covenant, provision
or condition of this Agreement, Licensee may terminate this Agreement with or
without cause upon not less than sixty (60) days' prior written notice to
Licensor.

        21.     SECURITY DEPOSIT. (a) Licensee has deposited the sum of $
17,021.74 with Licensor as security for the full and punctual performance by
Licensee of all of the terms of this Agreement, to be deposited by Licensor in
an interest-bearing account of Licensor's choosing. In the event Licensee
defaults in the performance of any of the terms of this Agreement, Licensor may
use or retain the whole or any part of the security deposited to the extent
required for the payment of any fees or for any sum that Licensor may expend or
may be required to expend by reason of Licensee's default, including any damages
or deficiency in the relicensing or letting of the Licensed Space, whether
accruing before or after summary proceedings or other re-entry by Licensor. In
the case of every such use or retention, Licensee shall, on demand, pay to
Licensor the sum so used or retained which sum shall be added to the security
deposited so that the same shall be replenished to its former amount. In the
event any bankruptcy, insolvency, reorganization or other creditor-debtor
proceedings shall be instituted by or against Licensee, or its successors or
assigns, the security deposited shall be deemed to be applied first to the
payment of such fees due Licensor for all periods prior to the institution of
such proceedings and the balance, if any, of the security deposited may be
retained by Licensor in partial liquidation of Licensor's damages. If Licensee
shall fully and punctually comply with all of the terms of this Agreement, the
security deposited plus any accrued interest thereon (less an amount equal to
one percent per annum on the security deposited not to exceed the amount of any
interest earned on the security deposited for Licensee's administrative costs in
connection with the security deposited) shall be returned to Licensee after the
termination of this Agreement and delivery of exclusive possession of the
Licensed Space to Licensor in compliance with the provisions of this Agreement.

                     (b) Any interest accrued with respect to the security
deposited shall be added to and constitute a part of the security deposited to
be held and disposed of by Licensor in accordance with the terms of this
Paragraph 21. Licensor shall not be liable to Licensee for any interest except
for such interest as is actually accrued.

                     (c) Licensee shall, concurrently with the execution and
delivery of this Agreement, and thereafter at any time upon request by Licensor,
deliver to Licensor a fully completed Form W-9 (Request for Taxpayer
Identification Number and Certification).

                     (d) Licensee shall not assign or encumber or attempt to
assign or encumber the security deposited and neither Licensor nor its
successors or assigns shall be bound by any such assignment, encumbrance or
attempted assignment or encumbrance.

                     (e) In the event of a sale or lease of the Building,
Licensor shall have the right to transfer the security deposited to the vendee
or lessee and Licensor shall ipso facto be released by Licensee from all
liability for the return of the security deposited and Licensee shall look
solely to the new licensor for the return of the security deposited. The
provisions hereof shall apply to every transfer or assignment made of the
security deposited to a new licensor.

                     (f) In the event that the License Fee shall increase
pursuant to the terms of this Agreement, the amount of security deposited shall
be increased so that at all times the security deposited (exclusive of interest)
shall equal one-sixth of the current annual License Fee. Licensee shall
immediately deposit with Licensor the difference between the amount being held
by Licensor as security (exclusive of interest) and the amount required to be
deposited pursuant to this Subparagraph 21(f).

        22.     CAPTIONS. The captions of the Paragraphs of this Agreement are
inserted only as a matter of convenience and for reference and in no way define,
limit or describe the scope of this Agreement nor the intent of any provision
thereof.

        23.     RELOCATION. At any time and from time to time during the Term,
Licensor shall have the right to relocate Licensee to space in the Building
reasonably comparable in size, location and utility for the purposes specified
in Paragraph 4 above, upon not less than sixty (60) days' notice to Licensee.

        24.     MISCELLANEOUS. (a) The covenants and agreements contained in
this Agreement shall apply to, inure to the benefit of, and be binding upon
Licensor and Licensee and upon their respective successors and permitted
assigns.

                     (b) This Agreement may not be changed, cancelled or
discharged orally, but only by an agreement in writing and signed by the party
against whom enforcement of any waiver, change, modification or discharge is
sought. All understandings and agreements between Licensor and Licensee are
merged in this Agreement which represents the entire agreement between the
parties and which fully and completely sets forth all terms and conditions of
the transactions embodied in this Agreement.

                                        4

<PAGE>

                     (c) If any term or provision of this Agreement or any
portion of a term or provision of this Agreement or the application of any such
term or condition to any person or circumstance shall, to any extent, be invalid
or unenforceable, the remainder of this Agreement, or the application of such
term or provision to persons or circumstances other than those as to which it is
held invalid or unenforceable, shall not be affected, and each term and
provision of this Agreement shall be valid and be enforced to the fullest extent
permitted by law.

                     (d) This Agreement shall be construed in accordance with,
and governed by, the laws of the State of New York applicable to agreements made
and performed in the State of New York.

        25.     NO LANDLORD - TENANT RELATIONSHIP. Licensee hereby acknowledges
that Licensee acquires no rights as a tenant of the Licensed Space and that no
landlord-tenant relationship is created hereby.

        26.     JURISDICTION. Licensee acknowledges and agrees that all disputes
arising, directly or indirectly, out of or relating to this Agreement, and all
actions to enforce this Agreement, may be dealt with and adjudicated in the
state courts of New York or the federal courts sitting in New York, and Licensee
hereby expressly and irrevocably submits the person of Licensee to the
jurisdiction of such courts in any suit, action or proceeding arising, directly
or indirectly, out of or relating to this Agreement and hereby irrevocably
designates the Secretary of State of New York as its agent for service of
process in any such suit, action or proceeding.

        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.

                              THE TRUSTEES OF COLUMBIA UNIVERSITY IN THE CITY OF
                              NEW YORK, Licensor

                              By: /S/ Kevin E. Kirby
                                 -----------------------------------------------
                              Title: Kevin E. Kirby, VP for Administration

                              Nephros, Inc., Licensee

                              By: /S/ Norman J. Barta
                                 -----------------------------------------------
                              Title: CEO

                                        5

<PAGE>

                    Rider to License Agreement by and between
                   The Trustees of Columbia University in the
                       City of New York and Nephros, Inc.
                                  Dated 7/1/04

Rider 6(a)

        (unless such repairs are caused by the acts or omissions of Licensor or
are repairs to building systems (i.e.HVAC) systems) not caused by the acts or
omissions of Licensee in which event such repairs shall be at Licensor's sole
cost and expense).

Rider 6(b)

        Provided, however, that this Section 6(a) shall be applicable solely
with respect to the Licensee's use of the Licensed Space and thatd the cost and
expense of compliance with this Section 6(a) due to factors not related to the
Licensee's use of the Licensed Space will be borne solely by the Licensor.

Rider 16(a)

        Unless due to Licensor's gross negligence or willful misconduct

Rider 16(b)

        due to or arising out from any act or omission or negligence of Licensee
or any of its agents, contractors, servants, employees, licensees or invitees,

Rider 21(e)

        Provided that the Licensor caused the security deposit to be transferred
to the account of the new Licensor.

Rider C-1

        (ten (10) days in the event of non-payment of insurance premiums)

<PAGE>

                                    EXHIBIT B

                                   LICENSE FEE

                The License Fee shall be payable, in advance, commencing on the
Commencement Date and thereafter on the first day of each and every month during
the Term at the rate of $ 102,130.38 per annum, payable in equal monthly
installments, at the rate of $8,510.87 per month.

                         INTERNET ACCESS FEE (optional)

                Access to the Internet via the Columbia University Network is
$3,942.00 per annum, payable in equal monthly installments, at the rate of
$328.50 per month.

<PAGE>

                                    EXHIBIT C

                              INSURANCE PROVISIONS

                Reference is made to Paragraph 7 of this Agreement.

                (a) All insurance shall be written in form and substance
reasonably satisfactory to Licensor, and issued by companies licensed to do
business in New York State and authorized to issue such policies. All policies
of insurance procured by Licensee shall contain endorsements providing that (i)
such policies may not be reduced or cancelled (including for non-payment of
premium) or allowed to lapse with respect to Licensor, or materially changed or
amended, except after thirty (30) days' (Rider C-1) prior notice from the
insurance company by registered mail to Licensee and Licensor at the respective
addresses for such parties set forth in Paragraph 17, and (ii) Licensee shall be
solely responsible for the payment of premiums therefor notwithstanding that
Licensor is or may be named as an additional insured. Upon execution and
delivery of this Agreement, duly executed certificates of all insurance required
hereunder, effective as of the Commencement Date (specifying each of the
coverages enumerated in Paragraph 7 and including evidence of the waivers of
subrogation required pursuant to Paragraph (d) of this Exhibit, together with
reasonably satisfactory evidence of payment of the premiums therefor, shall be
delivered to Licensor. Certificates evidencing any endorsements to any such
policies shall also be so deposited upon issuance thereof and a certificate
evidencing each renewal or replacement of a policy shall be so deposited at
least twenty (20) days prior to the expiration of such policy. Notwithstanding
the foregoing requirements for delivery of certificates of insurance,
certificates evidencing any endorsements and certificates of renewals and
replacements, in any instance where Licensor shall so require, an original
policy or endorsement or renewal or replacement policy, as the case may be,
shall be delivered in addition to or in place of such certificate(s). Licensee
shall not carry any separate or additional insurance concurrent in form or
contributing in the event of any loss or damage with any insurance required to
be maintained by Licensee under this Agreement. Further, all policies of
insurance procured by Licensee shall be written as primary policies not
contributing with nor in excess of coverage that Licensor may carry.

                (b) All insurance procured by Licensee under Paragraph 7 and
this Exhibit C, except for the Worker's Compensation and Employer's Liability
insurance and the "all-risk" property insurance, shall name Licensor, Licensee,
The City of New York (the "City"), The New York City Economic Development
Corporation ("EDC"), The New York State Urban Development Corporation d/b/a
Empire State Development ("UDC") and any other superior lessor and superior
mortgagee as additional insureds as their respective interests may appear, and
shall contain an endorsement that each of Licensor, the City, EDC, UDC and any
other superior lessor and superior mortgagee although named as an additional
insured, nevertheless shall be entitled to recover under said policies for any
covered loss or damages occasioned to it, its agents, employees, contractors,
directors, shareholders, partners, trustees and principals (disclosed or
undisclosed) by reason of the negligence or tortious acts of Licensee, its
servants, agents, employees and contractors.

                (c) Licensee covenants that (i) Licensee shall pay all premiums
due on policies required to be maintained by the terms of this Agreement and
(ii) Licensee shall not violate, or permit the violation of, any term or
condition of such policies, and shall maintain the policies in full force and
effect throughout the Term.

                (d) Licensee agrees to use its best efforts to include in each
of its insurance policies a waiver of the insurer's right of subrogation against
Licensor, or if such waiver should be unobtainable or unenforceable (i) an
express agreement that such policy shall not be invalidated if the insured
waives or has waived before the casualty the right of recovery against any party
responsible for a casualty covered by the policy or (ii) any other form of
permission for the release of Licensor. If such waiver, agreement or permission
shall not be, or shall cease to be obtainable without additional charge or at
all, Licensee shall so notify Licensor promptly after learning thereof. In such
case, if Licensor shall agree in writing to pay the insurer's additional charge
therefor, such waiver, agreement or permission shall (if obtainable) be included
in the policy. As long as Licensee's casualty insurance policies include the
waiver of subrogation or agreement or permission to release liability referred
to above, Licensee, to the extent that such insurance is in force and
collectible, hereby waives any right of recovery against Licensor, and
Licensor's trustees, officers, employees, agents and contractors, for any loss
occasioned by fire or other insured casualty.

                (e) In the event that this Agreement is renewed beyond the Term,
Licensor, upon notice to Licensee, shall have the right, in its sole discretion,
once annually during the term of such renewal (if such renewal is for longer
than one year), to require Licensee to increase the amount or amounts of any
insurance coverage required hereby to the amount or amounts then being required
of tenants or occupants of buildings owned by Licensor whose space is being used
for purposes similar to the use permitted hereunder.

<PAGE>

                                    EXHIBIT D

                             CLEANING SPECIFICATIONS

<PAGE>

                                    EXHIBIT E

                                    BROKER(S)

None.

<PAGE>

                                    Exhibit F

                               Network & Services

Currently, the Audubon building is connected to Columbia Presbyterian Medical
Center by a microwave antenna running at 10mbps. There are plans for in the near
future to be a 100 mbps.

All floors are equipped with two 10mbps 6 port hubs which are connected to a
10/100 mbps switch located in the basement of the building.

All network lines provided are category 5 plenum cables terminated in an RJ45
panel in the closet.

Network protocol supported are:

IP, Novell IPX, Appletalk.

NETBIOS & NETBUI are PROHIBITED.

SERVICES PROVIDED:

        .       Novell & TCP/IP Connectivity

        .       Internet Connectivity via Our domain and DNS "Auduboncenter.org"

        .       e-mail via your own Domain name and e-mail account on our DNS
                Server

        .       Techncical consulting and advisement with 3rd party computer LAN
                company.

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