$1,000,000.00





                       BRIDGE LOAN AND SECURITY AGREEMENT



                                  by and among



                               EP MEDSYSTEMS, INC.



                                 (the "Company")



                                       and



                    EGS PRIVATE HEALTHCARE PARTNERSHIP, L.P.



                                  (a "Lender")



                                       and



                    EGS PRIVATE HEALTHCARE COUNTERPART, L.P.



                                  (a "Lender")











                                December 30, 2002





{PAGE}





                       BRIDGE LOAN AND SECURITY AGREEMENT



         THIS BRIDGE LOAN AND SECURITY AGREEMENT (this "Agreement") is made as

of December 30, 2002 by and between EP MEDSYSTEMS, INC., a New Jersey

corporation (the "Company"), and EGS PRIVATE HEALTHCARE PARTNERSHIP, L.P., a

Delaware limited partnership ("EGSP"), and EGS PRIVATE HEALTHCARE COUNTERPART,

L.P., a Delaware limited partnership ("EGSC", and together with EGSP, the

"Lenders" and each, a "Lender").



                                    RECITALS



         A. The Company desires to borrow funds from each Lender, and each

Lender, severally, is willing to make a loan to the Company in the amounts, with

respect to each Lender, set forth on Schedule I hereto, and on the terms and

conditions set forth below.



         B. In consideration of each Lender's agreement to make a loan on the

terms and condition set forth herein, the Company shall issue, and each Lender

will receive, a Warrant to purchase, subject to a specific condition to vesting

described therein, the number of shares of the Company's common stock, no par

value, stated value $0.001 per share (the "Common Stock"), set forth opposite

such Lender's name on Schedule I hereto.



         C. The parties desire to define the terms and conditions of their

relationship and to reduce their agreements to writing.



         NOW, THEREFORE, in consideration of the promises and covenants

contained in this Agreement, and for other good and valuable consideration, the

receipt and sufficiency of which are hereby acknowledged, the parties covenant

and agree as follows:



                                   Article 1



                                   DEFINITIONS



         As used in this Agreement, unless otherwise specified, all references

to "Sections" shall be deemed to refer to Sections of this Agreement, and the

following terms shall have the meanings set forth below:



Section 1.1 Account. "Account" means any right to payment of a monetary

obligation, whether or not earned by performance, other than the Excluded

Accounts. Without limiting the generality of the foregoing, the term "Account"

shall further include any "account" (as that term is defined in the Uniform

Commercial Code now or hereafter in effect), any accounts receivable, any

"health-care-insurance receivables" (as that term is defined in the Uniform

Commercial Code now or hereafter in effect), any "payment intangibles" (as that

term is defined in the Uniform Commercial Code now or hereafter in effect) and

all other rights to payment of every kind and description, whether or not earned

by performance.



Section 1.2       Account Debtor.  "Account Debtor" means any Person

obligated on any Account of the Company.





Section 1.3       Affiliate. "Affiliate" means, with respect to a specified

Person, any Person directly or indirectly controlling, controlled by, or under

common control with the specified Person, including, without limitation their

stockholders and any Affiliates thereof. A Person shall be deemed to control a

corporation or other entity if the Person possesses, directly or indirectly, the

power to direct or cause the direction of the management and business of the

corporation or other entity, whether through the ownership of voting securities,

by contract, or otherwise. The term "Affiliate" shall include, without

limitation, the Existing Subsidiaries.



Section 1.4      Agreement. "Agreement" means this Bridge Loan and Security

Agreement, as it may be amended or supplemented from time to time in accordance

with the terms herein, together with all attachments, exhibits, schedules,

riders and addenda, all of which are incorporated herein by this reference and

made a part hereof.

{PAGE}



Section 1.5       Base Rate.  "Base Rate" means 10.0% per annum.





Section 1.6      Borrowed Money. "Borrowed Money" means, with respect to any

Person, without duplication, (a) all indebtedness for borrowed money, (b) all

obligations of such Person evidenced by bonds, debentures, notes or similar

instruments, or upon which interest payments are customarily made,(c) that

portion of obligations with respect to capital leases that is properly

classified as a liability on a balance sheet conformity with GAAP, (d) any

obligations of such Person issued or assumed as the deferred purchase price of

property or services purchased by such Person (other than trade debt incurred in

the ordinary course of business and due within six (6) months of the incurrence

thereof or evidenced by a note or other instrument), (e) all Borrowed Money of

others secured by (or for which the holder of such Borrowed Money has an

existing right, contingent or otherwise, to be secured by) any Lien on, or

payable out of the proceeds of production from, any property or asset owned,

held or acquired by such Person regardless of whether the indebtedness secured

thereby shall have been assumed by that Person or is nonrecourse to the credit

of that Person, (f) all guaranty obligations of such Person in respect of any

Borrowed Money of any other person,(g) the maximum amount of all standby letters

of credit issued or bankers' acceptances facilities created for the account of

such Person and, without duplication, all drafts drawn thereunder (to the extent

unreimbursed), (h) the principal balance outstanding under any synthetic lease,

tax retention operating lease, off-balance sheet loan or similar off-balance

sheet financing product plus any accrued interest thereon, and (i) the Borrowed

Money of any partnership or unincorporated joint venture in which such Person is

a general partner or joint venturer.



Section 1.7       Bridge Loan.  "Bridge Loan" has the meaning set forth in

Section 2.1(a).





Section 1.8       Bridge Note.  "Bridge Note" has the meaning set forth in

Section 2.1(a).



Section 1.9       Business Day.  "Business  Day" means any day on which

financial  institutions  are open for business in the State of New York

excluding Saturdays and Sundays.



Section 1.10      Closing; Closing Date.  "Closing" and "Closing Date" have the

meanings set forth in Section 6.2.





Section 1.11      Collateral.  "Collateral" has the meaning set forth in

Section 4.1.





Section 1.12      Common Stock.  "Common Stock" has the meaning set forth in

the RECITALS hereto.





Section 1.13      Default Rate.  Default Rate means 12.0% per annum.





Section 1.14      Event of Default.  "Event of Default" and "Events of Default"

have the meanings set forth in Section 9.1.



Section 1.15      Excluded Accounts. "Excluded Accounts" means Accounts arising

out of any of the following: (a) the sale of securities of the Company, such as

stock sales, private placements and sums due in respect of the exercise of

warrants, options and convertible securities; (b) the sale of state tax losses;

(c) payments due to the Company in respect of the sublease of the Company's

office or warehouse space; (d) proceeds of financings or the sale of the

Company's real property (and related fixtures) in West Berlin, New Jersey; (e)

insurance proceeds in respect of damage or casualty to real property; and (f)

such other matters that Lenders may from time to time, exercising its sole and

absolute discretion and credit judgment, designate in writing as matters giving

rise to Excluded Accounts. Notwithstanding the foregoing, Excluded Accounts

shall in no event include any Accounts that arise directly or indirectly out of

the sale of goods and services or any other sale of the Collateral.



Section 1.16       Existing Subsidiaries. "Existing Subsidiaries" means EP

MEDSYSTEMS UK LTD, a New Jersey corporation, and EP MEDSYSTEMS FRANCE S.A.R.L.,

a New Jersey Corporation, and PROCATH CORPORATION, a New Jersey corporation.

{PAGE}



Section 1.17      Facility. "Facility" or "Facilities" mean one or more of the

manufacturing, warehousing, distribution or other facilities operated by the

Company.



Section 1.18      GAAP. "GAAP" means generally accepted accounting principles

applied in a consistent manner.



Section 1.19      Governmental Authority. "Governmental Authority" means and

includes any federal, state, District of Columbia, county, municipal, or other

government and any department, commission, board, bureau, agency or

instrumentality thereof, whether domestic or foreign.



Section 1.20      Guarantor. "Guarantor" means any Person who may from time to

time guaranty, pledge assets as security for, or otherwise become obligated in

respect of, the obligations of the Company under the Loan Documents, including,

but not limited to, the Existing Subsidiaries.



Section 1.21      Guaranty. "Guaranty" means any guaranty of the obligations of

the Company under the Loan Documents from time to time outstanding, as the same

may be amended, modified, or supplemented from time to time.



Section 1.22      HIPAA. "HIPAA" means the Health Insurance Portability and

Accountability Act of 1996, as the same may be amended, modified or supplemented

from time to time, and any successor statute thereto, and any and all rules or

regulations promulgated from time to time thereunder.



Section 1.23      Inventory. "Inventory" shall mean all of the Company's now

owned and hereafter existing or acquired goods, wherever located, which (a) are

leased by the Company as lessor; (b) are held by the Company for sale or lease

or to be furnished under a contract of service; (c) are furnished by the Company

under a contract of service; or (d) consist of raw materials, work in process,

finished goods or materials used or consumed in its business.



Section 1.24      Lender and Lenders.  "Lender" and "Lenders" have the meanings

set forth in the Preamble.



Section 1.25      Lien. "Lien" shall mean any mortgage, pledge, hypothecation,

assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),

charge or other security interest or any preference, priority or other security

agreement or preferential arrangement of any kind or nature whatsoever

(including, without limitation, any conditional sale or other title retention

agreement and any capital lease having substantially the same practical effect

as any of the foregoing).



Section 1.26      Loan Documents. "Loan Documents" means and includes this

Agreement, the Bridge Notes, any Guaranty, the Warrants and each and every other

document now or hereafter delivered by the Company or any Guarantor in

connection with this Agreement, as any of them may be amended, modified,

increased, renewed or restated from time to time.



Section 1.27      Maturity Date.  Maturity Date has the meaning set forth in

Section 2.2.



Section 1.28      Obligations.  "Obligations" has the meaning set forth in

Section 4.1.





Section 1.29      Permitted Liens. "Permitted Liens" means: (a) deposits or

pledges to secure obligations under workmen's compensation, social security or

similar laws, or under unemployment insurance; (b) deposits or pledges to

secure bids, tenders, contracts (other than contracts for the payment of money)

, leases, statutory obligations, surety and appeal bonds and other obligations

of like nature arising in the ordinary course of business; (c) mechanic's,

workmen's, materialmen's or other like Liens arising in the ordinary course of

business with respect to obligations which are not due, or which are being

contested in good faith by appropriate proceedings which suspend the collection

thereof and in respect of which adequate reserves have been made (provided that

such proceedings do not, in Lenders' sole discretion, involve any substantial

risk of the sale, loss or forfeiture of such property or assets or any interest

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