**Silicon Valley Bank** **Amendment to Loan Agreement** (B) Borrower will attain an adjusted net profit for the fiscal quarter endingSeptember 30, 2008, excluding from consideration up to $17,800,000 relating to in—process research and development expenses; and(C) Thereafter, Borrower will attain an adjusted net profit in each fiscal quarter.As used herein the term adjusted net profit shall mean net profit for the applicablequarter end period (x) excluding the effects of non-cash charges related to stockcompensation expenses and (y) including any income from discontinued operations,with all of the foregoing as determined in accordance with GAAP, consistentlyapplied.”     **3. Modified Revolving Maturity Date.**The Revolving Maturity Date as set forthin Section 13.1 of the Loan Agreement is hereby modified to be “October 15, 2008.”     **4. Fee.**In consideration for Bank entering into this Amendment, Borrower shallconcurrently pay Bank a fee in the amount of $11,250, which shall be non-refundable and inaddition to all interest and other fees payable to Bank under the Loan Documents.     **5. Limitation of Amendments.**     (A) The amendments set forth above are effective for the purposes set forth herein andshall be limited precisely as written and shall not be deemed to (a) be a consent to anyamendment, waiver or modification of any other term or condition of any Loan Document, or(b) otherwise prejudice any right or remedy which Bank may now have or may have in the futureunder or in connection with any Loan Document.     (B) This Amendment shall be construed in connection with and as part of the LoanDocuments and all terms, conditions, representations, warranties, covenants and agreements setforth in the Loan Documents, except as herein amended, are hereby ratified and confirmed andshall remain in full force and effect.     **6. Representations and Warranties.**To induce Bank to enter into thisAmendment, Borrower hereby represents and warrants to Bank as follows:     (A) Immediately after giving effect to this Amendment (a) the representations andwarranties contained in the Loan Documents are true, accurate and complete in all materialrespects as of the date hereof (except to the extent such representations and warranties relate toan earlier date, in which case they are true and correct as of such date), and (b) no Event ofDefault has occurred and is continuing, other than is the subject of the waiver as otherwise setforth herein;     (B) Borrower has the power and authority to execute and deliver this Amendment andto perform its obligations under the Loan Agreement, as amended by this Amendment;
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**Silicon Valley Bank** **Amendment to Loan Agreement**      (C) The organizational documents of Borrower that the Bank obtained with respect tothe original execution of the Loan Agreement remain true, accurate and complete and have notbeen amended, supplemented or restated and are and continue to be in full force and effect, otherthan for the amendment and restatement of Borrower’s certificate of incorporation filed with theSecretary of State of Delaware on May 29, 2002.     (D) The execution and delivery by Borrower of this Amendment and the performanceby Borrower of its obligations under the Loan Agreement, as amended by this Amendment, havebeen duly authorized;     (E) The execution and delivery by Borrower of this Amendment and the performanceby Borrower of its obligations under the Loan Agreement, as amended by this Amendment, donot and will not contravene (a) any law or regulation binding on or affecting Borrower, (b) anycontractual restriction with a Person binding on Borrower, (c) any order, judgment or decree ofany court or other governmental or public body or authority, or subdivision thereof, binding onBorrower, or (d) the organizational documents of Borrower;     (F) The execution and delivery by Borrower of this Amendment and the performanceby Borrower of its obligations under the Loan Agreement, as amended by this Amendment, donot require any order, consent, approval, license, authorization or validation of, or filing,recording or registration with, or exemption by any governmental or public body or authority, orsubdivision thereof, binding on either Borrower, except as already has been obtained or made;and     (G) This Amendment has been duly executed and delivered by Borrower and is thebinding obligation of Borrower, enforceable against Borrower in accordance with its terms,except as such enforceability may be limited by bankruptcy, insolvency, reorganization,liquidation, moratorium or other similar laws of general application and equitable principlesrelating to or affecting creditors’ rights.     **7. Counterparts.**This Amendment may be executed in any number of counterpartsand all of such counterparts taken together shall be deemed to constitute one and the sameinstrument.     **8. Effectiveness**. This Amendment shall be deemed effective upon (a) the dueexecution and delivery to Bank of this Amendment by each party hereto, (b) Borrower’spayment of an fee as stated above, and (c) the delivery of such other agreements and documentsby Borrower and the taking of such other actions Borrower, in each case as Bank shall determineare necessary or advisable in order to effectuate the terms and provisions hereof and of the LoanAgreement.[Signature page follows.]
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date firstabove written.             **Borrower:**   **Bank:**               **I-Flow Corporation**   **Silicon Valley Bank**               **By** /s/ James R. Talevich   **By** /s/ Robert Anderson               **President or Chief Financial Officer**     **Title** Vice President