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                                                                   EXHIBIT 10.13

                      MASTER LOAN AND SECURITY AGREEMENT


          THIS AGREEMENT dated as of June 6/th/, 2000, is made by Fusion
Medical Technologies, Inc. (the "Borrower"), a Delaware corporation having its
principal place of business and chief executive office at 34175 Ardenwood Blvd.,
Freemont, CA 94555, in favor of Transamerica Business Credit Corporation, a
Delaware corporation (the "Lender"), having its principal office at Riverway II,
West Office Tower, 9399 West Higgins Road, Rosemont, Illinois 60018.

          WHEREAS, the Borrower has requested that the Lender make Loans to it
from time to time; and

          WHEREAS, the Lender has agreed to make such Loans on the terms and
conditions of this Agreement.

          NOW, THEREFORE, in consideration of the premises and to induce the
Lender to extend credit, the Borrower hereby agrees with the Lender as follows:

          SECTION 1.  DEFINITIONS.
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          As used herein, the following terms shall have the following meanings,
and shall be equally applicable to both the singular and plural forms of the
terms defined:

Agreement shall mean this Master Loan and Security Agreement together with all
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schedules and exhibits hereto, as amended, supplemented, or otherwise modified
from time to time.

Applicable Law shall mean the laws of the State of Illinois (or any other
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jurisdiction whose laws are mandatorily applicable notwithstanding the parties'
choice of Illinois law) or the laws of the United States of America, whichever
laws allow the greater interest, as such laws now exist or may be changed or
amended or come into effect in the future.

Business Day shall mean any day other than a Saturday, Sunday, or public holiday
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or the equivalent for banks in New York City.

Code shall have the meaning specified in Section 8(d).
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Collateral shall have the meaning specified in Section 2.
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Collateral Access Agreement shall mean any landlord waiver, mortgagee waiver,
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bailee letter, or similar acknowledgement of any warehouseman or processor in
possession of any Equipment.

Effective Date shall mean the date on which all of the conditions specified in
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Section 3.3 shall have been satisfied.

Equipment shall have the meaning specified in Section 2.
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Event of Default shall mean any event specified in Section 7.
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Financial Statements shall have the meaning specified in Section 6.1.
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GAAP shall mean generally accepted accounting principles in the United States of
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America, as in effect from time to time.

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Loans shall mean the loans and financial accommodations made by the Lender to
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the Borrower in accordance with the terms of this Agreement and the Notes.

Loan Documents shall mean, collectively, this Agreement, the Notes, and all
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other present and future documents, agreements, certificates, instruments, and
opinions delivered by the Borrower under, in connection with or relating to this
Agreement, or any other present or future instrument or agreement between Lender
and Borrower, as each of the same may be amended, modified, extended, restated
or supplemented from time to time.

Material Adverse Change shall mean, with respect to any Person, a material
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adverse change in the business, prospects, operations, results of operations,
assets, liabilities, or condition (financial or otherwise) of such Person taken
as a whole.

Material Adverse Effect shall mean, with respect to any Person, a material
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adverse effect on the business, prospects, operations, results of operations,
assets, liabilities, or condition (financial or otherwise) of such Person taken
as a whole.

Note shall mean each Promissory Note made by the Borrower in favor of the
----
Lender, as amended, supplemented, or otherwise modified from time to time.

Obligations shall mean and include all loans (including the Loans), advances,
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debts, liabilities, obligations, covenants and duties owing by Borrower to
Lender of any kind or nature, present or future, whether or not evidenced by the
Note or any note, guaranty or other instrument, whether or not arising under or
in connection with, this Agreement, any other Loan Document or any other present
or future instrument or agreement, whether or not for the payment of money,
whether arising by reason of an extension of credit, opening, guaranteeing or
confirming of a letter of credit, loan, guaranty, indemnification or in any
other manner, whether direct or indirect (including those acquired by
assignment, purchase, discount or otherwise), whether absolute or contingent,
due or to become due, now due or hereafter arising and however acquired
(including without limitation all loans previously made by Lender to Borrower).
The term includes, without limitation, all interest (including interest accruing
on or after a bankruptcy, whether or not an allowed claim), charges, expenses,
commitment, facility, closing and collateral management fees, letter of credit
fees, reasonable attorneys' fees, taxes and any other sum properly chargeable to
Borrower under this Agreement, the other Loan Documents or any other present or
future agreement between Lender and Borrower.

Permitted Liens shall mean such of the following as to which no enforcement,
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collection, execution, levy, or foreclosure proceeding shall have been
commenced:  (a) liens for taxes, assessments, and other governmental charges or
levies or the claims or demands of landlords, carriers, warehousemen, mechanics,
laborers, materialmen, and other like Persons arising by operation of law in the
ordinary course of business for sums which are not yet due and payable, or liens
which are being contested in good faith by appropriate proceedings diligently
conducted and with respect to which adequate reserves are maintained to the
extent required by GAAP; (b) deposits or pledges to secure the payment of
worker's compensation, unemployment insurance, or other social security benefits
or obligations, public or statutory obligations, surety or appeal bonds, bid or
performance bonds, or other obligations of a like nature incurred in the
ordinary course of business; (c) licenses, restrictions, or covenants for or on
the use of the Equipment which do not materially impair either the use of the
Equipment in the operation of the business of the Borrower or the value of the
Equipment; (d) attachment or judgment liens that do not constitute an Event of
Default; (e) purchase money security interests or liens representing equipment
leases for specific items of equipment other than the Equipment financed
hereunder; and (f) any liens to which Lender consents in writing.

Person shall mean any individual, sole proprietorship, partnership, limited
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liability partnership, joint venture, trust, unincorporated organization,
association, corporation, limited liability company, institution, entity, party,
or government (including any division, agency, or department thereof), and the
successors, heirs, and assigns of each.

Schedule shall mean each Schedule in the form of Schedule A hereto delivered by
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the Borrower to the Lender from time to time.

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Solvent means, with respect to any Person, that as of the date as to which such
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Person's solvency is measured:


          (a) it has sufficient capital to conduct its business; and

          (b) it is able generally to meet its debts as they mature.

Taxes shall have the meaning specified in Section 5.5.
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          SECTION 2.  CREATION OF SECURITY INTEREST; COLLATERAL.  The Borrower
                      -----------------------------------------
hereby assigns and grants to the Lender a continuing general, first priority
lien on, and security interest in, all the Borrower's right, title, and interest
in and to the collateral described in the next sentence (the "Collateral") to
secure the payment and performance of all the Obligations.  The Collateral
consists of all equipment set forth on all the Schedules delivered from time to
time under the terms of this Agreement (the "Equipment"), together with all
present and future additions, parts, accessories, attachments, substitutions,
repairs, improvements, and replacements thereof or thereto, and any and all
proceeds thereof, including, without limitation, proceeds of insurance and all
manuals, blueprints, know-how, warranties, and records in connection therewith,
all rights against suppliers, warrantors, manufacturers, sellers, or others in
connection therewith, and together with all substitutes for any of the
foregoing.

          SECTION 3.  THE CREDIT FACILITY.
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          SECTION 3.1.  Borrowings.  Each Loan shall be in an amount not less
than $75,000, and in no event shall the sum of the aggregate Loans made exceed
the amount of the Lender's written commitment to the Borrower in effect from
time to time.  Notwithstanding anything herein to the contrary, the Lender shall
be obligated to make the initial Loan and each other Loan only after the Lender,
in its sole discretion, determines that the applicable conditions for borrowing
contained in Sections 3.3 and 3.4 are satisfied.  The timing and financial scope
of Lender's obligation to make Loans hereunder are limited as set forth in a
commitment letter executed by Lender and Borrower, dated as of April 10, 2000
and attached hereto as Exhibit A (the "Commitment Letter").
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          SECTION 3.2.  Application of Proceeds.  The Borrower shall not
directly or indirectly use any proceeds of the Loans, or cause, assist, suffer,
or permit the use of any proceeds of the Loans, for any purpose other than for
the purchase, acquisition, installation, or upgrading of Equipment or the
reimbursement of the Borrower for its purchase, acquisition, installation, or
upgrading of Equipment.

          SECTION 3.3.  Conditions to Initial Loan.

          (a) The obligation of the Lender to make the initial Loan is subject
to the Lender's receipt of the following, each dated the date of the initial
Loan or as of an earlier date acceptable to the Lender, in form and substance
reasonably satisfactory to the Lender and its counsel:

              (i)   completed requests for information (Form UCC-11) listing all
          effective Uniform Commercial Code financing statements naming the
          Borrower as debtor and all tax lien, judgment, and litigation searches
          for the Borrower as the Lender shall deem necessary or desirable;

              (ii)  Uniform Commercial Code financing statements (Form UCC-1)
          duly executed by the Borrower (naming the Lender as secured party and
          the Borrower as debtor and in form acceptable for filing in all
          jurisdictions that the Lender deems necessary or desirable to perfect
          the security interests granted to it hereunder) and, if applicable,
          termination statements or other releases duly filed in all
          jurisdictions that the Lender deems necessary or desirable to perfect
          and protect the priority of the security interests granted to it
          hereunder in the Equipment related to such initial Loan;

              (iii) a Note duly executed by the Borrower evidencing the amount
          of such Loan;

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              (iv)  a Collateral Access Agreement duly executed by the lessor or
          mortgagee, as the case may be, of each premises where the Equipment is
          located;

              (v)   certificates of insurance required under Section 5.4 of this
          Agreement together with loss payee endorsements for all such policies
          naming the Lender as lender loss payee and as an additional insured;

              (vi)  a certificate of the Secretary or an Assistant Secretary of
          the Borrower ("Secretary's Certificate") certifying (A) that attached
          to the Secretary's Certificate is a true, complete, and accurate copy
          of the resolutions of the Board of Directors of the Borrower (or a
          unanimous consent of directors in lieu thereof) authorizing the
          execution, delivery, and performance of this Agreement, the other Loan
          Documents, and the transactions contemplated hereby and thereby, and
          that such resolutions have not been amended or modified since the date
          of such certification and are in full force and effect; (B) the
          incumbency, names, and true signatures of the officers of the Borrower
          authorized to sign the Loan Documents to which it is a party; (C) that
          attached to the Secretary's Certificate is a true and correct copy of
          the Articles or Certificate of Incorporation of the Company, as
          amended, which Articles or Certificate of Incorporation have not been
          further modified, repealed or rescinded and are in full force and
          effect; (D) that attached to the Secretary's Certificate of the
          Borrower is a true and correct copy of the Bylaws, as amended, which
          Bylaws of the Company have not been further modified, repealed or
          rescinded and are in full force and effect; and (E) that attached to
          the Secretary's Certificate as of the date thereof is a valid
          Certificate of Good Standing issued by the Secretary of the State of
          the Borrower's state of incorporation;

              (vii)  such other agreements and instruments as the Lender deems
          reasonably necessary in its sole and absolute discretion in connection
          with the transactions contemplated hereby.

          (b)  There shall be no pending or, to the knowledge of the Borrower
after due inquiry, threatened litigation, proceeding, inquiry, or other action
(i) seeking an injunction or other restraining order, damages, or other relief
with respect to the transactions contemplated by this Agreement or the other
Loan Documents or thereby or (ii) which affects or could affect the business,
prospects, operations, assets, liabilities, or condition (financial or
otherwise) of the Borrower, except, in the case of clause (ii), where such
litigation, proceeding, inquiry, or other action could not be expected to have a
Material Adverse Effect in the judgment of the Lender.

          (c) The Borrower shall have paid all fees and expenses required to be
paid by it to the Lender as of such date.

          (d) The security interests in the Equipment related to the initial
Loan granted in favor of the Lender under this Agreement shall have been duly
perfected and shall have first priority over all other liens, except for
Permitted Liens.

              SECTION 3.4. Conditions Precedent to Each Loan. The obligation of
the Lender to make each Loan is subject to the satisfaction of the following
conditions precedent:

          (a) the Lender shall have received the documents, agreements, and
instruments set forth in Section 3.3(a)(i) through (v) applicable to such Loan,
each in form and substance satisfactory to the Lender and its counsel and each
dated the date of such Loan or as of an earlier date acceptable to the Lender;

          (b) the Lender shall have received a Schedule of the Equipment related
to such Loan, in form and substance satisfactory to the Lender and its counsel,
and the security interests in such Equipment related to such

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Loan granted in favor of the Lender under this Agreement shall have been duly
perfected and shall have priority over all other liens, except for Permitted
Liens;

          (c) all representations and warranties contained in this Agreement and
the other Loan Documents shall be true and correct on and as of the date of such
Loan as if then made, other than representations and warranties that expressly
relate solely to an earlier date, in which case they shall have been true and
correct as of such earlier date;

          (d) no Event of Default or event which with the giving of notice or
the passage of time, or both, would constitute an Event of Default shall have
occurred and be continuing or would result from the making of the requested Loan
as of the date of such request; and

          (e) the Borrower shall be deemed to have hereby reaffirmed and
ratified all security interests, liens, and other encumbrances heretofore
granted by the Borrower to the Lender.

          SECTION 4.  THE BORROWER'S REPRESENTATIONS AND WARRANTIES.
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          SECTION 4.1.  Good Standing; Qualified to do Business. The Borrower
(a) is duly organized, validly existing, and in good standing under the laws of
the State of its organization, (b) has the power and authority to own its
properties and assets and to transact the businesses in which it is presently,
or proposes to be, engaged, and (c) is duly qualified and authorized to do
business and is in good standing in every jurisdiction in which the failure to
be so qualified could reasonably be expected to have a Material Adverse Effect
on (i) the Borrower, (ii) the Borrower's ability to perform its obligations
under the Loan Documents, or (iii) the rights of the Lender hereunder.

          SECTION 4.2.  Due Execution, etc. The execution, delivery, and
performance by the Borrower of each of the Loan Documents to which it is a party
are within the powers of the Borrower, do not contravene the organizational
documents, if any, of the Borrower, and do not (a) violate any law or
regulation, or any order or decree of any court or governmental authority, (b)
conflict with or result in a breach of, or constitute a default under, any
material indenture, mortgage, or deed of trust or any material lease, agreement,
or other instrument binding on the Borrower or any of its properties, or (c)
require the consent, authorization by, or approval of or notice to or filing or
registration with any governmental authority or other Person. This Agreement is,
and each of the other Loan Documents to which the Borrower is or will be a
party, when delivered hereunder or thereunder, will be, the legal, valid, and
binding obligation of the Borrower enforceable against the Borrower in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, or similar laws affecting creditors' rights generally
and by general principles of equity.

          SECTION 4.3.  Solvency; No Liens. The Borrower is Solvent and will be
Solvent upon the completion of all transactions contemplated to occur hereunder
(including, without limitation, the Loan to be made on the Effective Date); the
security interests granted herein constitute and shall at all times constitute
the first and only liens on the Collateral other than Permitted Liens; and the
Borrower is, or will be at the time additional Collateral is acquired by it, the
absolute owner of the Collateral with full right to pledge, sell, consign,
transfer, and create a security interest therein, free and clear of any and all
claims or liens in favor of any other Person other than Permitted Liens.

          SECTION 4.4.  No Judgments, Litigation. No judgments are outstanding
against the Borrower nor is there now pending or, to the best of the Borrower's
knowledge after diligent inquiry, threatened any litigation, contested claim, or
governmental proceeding by or against the Borrower except judgments and pending
or threatened litigation, contested claims, and governmental proceedings which
could not reasonably be expected in the aggregate, to have a Material Adverse
Effect on the Borrower.

          SECTION 4.5.  No Defaults. The Borrower is not in default or has not
received a notice of default under any material contract, lease, or commitment
to which it is a party or by which it is bound.

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The Borrower knows of no dispute regarding any contract, lease, or commitment
which could reasonably be expected to have a Material Adverse Effect on the
Borrower.

          SECTION 4.6.  Collateral Locations. On the date hereof, each item of
the Collateral is located at the place of business specified in the applicable
Schedule.

          SECTION 4.7.  No Events of Default. No Event of Default has occurred
and is continuing nor has any event occurred which, with the giving of notice or
the passage of time, or both, would constitute an Event of Default.

          SECTION 4.8.  No Limitation on Lender's Rights. Except as permitted
herein, none of the Collateral is subject to contractual obligations that may
restrict or inhibit the Lender's rights or abilities to sell or dispose of the
Collateral or any part thereof after the occurrence of an Event of Default.

          SECTION 4.9.  Perfection and Priority of Security Interest. This
Agreement creates a valid and, upon completion of all required filings of
financing statements, perfected security interest, prior in right to all other
liens, except for Permitted Liens, in the Collateral, securing the payment of
all the Obligations.

          SECTION 4.10. Model and Serial Numbers. The Schedules set forth the
true and correct model number and serial number of each item of Equipment that
constitutes Collateral.

          SECTION 4.11. Accuracy and Completeness of Information. All data,
reports, and information heretofore, contemporaneously, or hereafter furnished
by or on behalf of the Borrower in writing to the Lender or for purposes of or
in connection with this Agreement or any other Loan Document, or any transaction
contemplated hereby or thereby, are or will be true and accurate in all material
respects on the date as of which such data, reports, and information are dated
or certified and not incomplete by omitting to state any material fact necessary
to make such data, reports, and information not misleading at such time. There
are no facts now known to the Borrower which individually or in the aggregate
could reasonably be expected to have a Material Adverse Effect and which have
not been specified herein, in the Financial Statements, or in any certificate,
opinion, or other written statement previously furnished by the Borrower to the
Lender.

          SECTION 4.12. Price of Equipment. The cost of each item of Equipment
does not exceed the fair and usual price for such type of equipment purchased in
like quantity and reflects all discounts, rebates and allowances for the
Equipment (including, without limitation, discounts for advertising, prompt
payment, testing, or other services) given to the Borrower by the manufacturer,
supplier, or any other person.

          SECTION 5.  COVENANTS OF THE BORROWER.
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          SECTION 5.1.  Existence, etc. The Borrower shall: (a) retain its
existence and its current yearly accounting cycle, (b) maintain in full force
and effect all licenses, bonds, franchises, leases, trademarks, patents,
contracts, and other rights necessary or desirable to the profitable conduct of
its business unless the failure to do so could not reasonably be expected to
have a Material Adverse Effect on the Borrower, (c) continue in, and limit its
operations to, the same general lines of business as those presently conducted
by it, and (d) comply with all applicable laws and regulations of any federal,
state, or local governmental authority, except for such laws and regulations the
violations of which would not, in the aggregate, have a Material Adverse Effect
on the Borrower.

          SECTION 5.2.  Notice to the Lender. As soon as possible, and in any
event within five days after the Borrower learns of the following, the Borrower
will give written notice to the Lender of (a) any proceeding instituted or
threatened to be instituted by or against the Borrower in any federal, state,
local, or foreign court or before any commission or other regulatory body
(federal, state, local, or foreign) involving a sum, together with the sum
involved in all other similar proceedings, in excess of $100,000 in the
aggregate, (b) any contract that is terminated or amended where such termination
or amendment could reasonably be expected to have a Material

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Adverse Effect on the Borrower, (c) the occurrence of any Material Adverse
Change with respect to the Borrower, and (d) the occurrence of any Event of
Default or event or condition which, with notice or lapse of time or both, would
constitute an Event of Default, together with a statement of the action which
the Borrower has taken or proposes to take with respect thereto.

          SECTION 5.3.  Maintenance of Books and Records. The Borrower will
maintain books and records pertaining to the Collateral in such detail, form,
and scope as the Lender shall require in its commercially reasonable judgment,
in form and substance conforming to industry standard. Upon two Business Days
prior notice to Borrower, the Borrower agrees that the Lender or its agents may
enter upon the Borrower's premises during normal business hours, and at any time
upon the occurrence and continuance of an Event of Default, for the purpose of
inspecting the Collateral and any and all records pertaining thereto.

          SECTION 5.4.  Insurance. The Borrower will maintain insurance on the
Collateral under such policies of insurance, with such insurance companies, in
such amounts, and covering such risks as are at all times reasonably
satisfactory to the Lender. All such policies shall be made payable to the
Lender, in case of loss, under a standard non-contributory "lender" or "secured
party" clause and are to contain such other provisions as the Lender may
reasonably require to protect the Lender's interests in the Collateral and to
any payments to be made under such policies. Certificates of insurance policies
are to be delivered to the Lender, premium prepaid, with the loss payable
endorsement in the Lender's favor, and shall provide for not less than thirty
days' prior written notice to the Lender, of any alteration or cancellation of
coverage. If the Borrower fails to maintain such insurance, the Lender may
arrange for (at the Borrower's expense and without any responsibility on the
Lender's part for) obtaining the insurance.Upon the occurrence and during the
continuance of an Event of Default, the Lender shall have the sole right, in the
name of the Lender or the Borrower, to file claims under any insurance policies,
to receive and give acquittance for any payments that may be payable thereunder,
and to execute any endorsements, receipts, releases, assignments, reassignments,
or other documents that may be necessary to effect the collection, compromise,
or settlement of any claims under any such insurance policies.

          SECTION 5.5.  Taxes. The Borrower will pay, when due, all taxes,
assessments, claims, and other charges ("Taxes") lawfully levied or assessed
against the Borrower or the Collateral other than taxes that are being
diligently contested in good faith by the Borrower by appropriate proceedings
promptly instituted and for which an adequate reserve is being maintained by the
Borrower in accordance with GAAP. If any Taxes remain unpaid after the date
fixed for the payment thereof, or if any lien shall be claimed therefor, then,
without notice to the Borrower, but on the Borrower's behalf, the Lender may pay
such Taxes, and the amount thereof shall be included in the Obligations.

          SECTION 5.6.  Borrower to Defend Collateral Against Claims; Fees on
Collateral. The Borrower will defend the Collateral against all claims and
demands of all Persons at any time claiming the same or any interest therein.
The Borrower will not permit any notice creating or otherwise relating to liens
on the Collateral or any portion thereof to exist or be on file in any public
office other than Permitted Liens. The Borrower shall promptly pay, when
payable, all transportation, storage, and warehousing charges and license fees,
registration fees, assessments, charges, permit fees, and taxes (municipal,
state, and federal) which may now or hereafter be imposed upon the ownership,
leasing, renting, possession, sale, or use of the Collateral, other than taxes
on or measured by the Lender's income and fees, assessments, charges, and taxes
which are being contested in good faith by appropriate proceedings diligently
conducted and with respect to which adequate reserves are maintained to the
extent required by GAAP.

          SECTION 5.7.  No Change of Location, Structure, or Identity. The
Borrower will not (a) change the location of its chief executive office or
establish any place of business other than those specified herein or (b) move or
permit the movement of any item of Collateral from the location specified in the
applicable Schedule (except for mobile equipment, as defined in the Uniform
Commercial Code, including but without limitation, laptop computers), except
that the Borrower may change its chief executive office and keep Collateral at
other locations within the United States provided that the Borrower has
delivered to the Lender (i) prior written notice thereof and (ii) duly executed
financing statements and other agreements and instruments (all in form and

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substance satisfactory to the Lender) necessary or, in the opinion of the
Lender, desirable to perfect and maintain in favor of the Lender a first
priority security interest prior in right to all other liens, except for
Permitted Liens, in the Collateral. Notwithstanding anything to the contrary in
the immediately preceding sentence, the Borrower may keep any Collateral
consisting of motor vehicles or rolling stock at any location in the United
States provided that the Lender's security interest in any such Collateral is
conspicuously marked on the certificate of title thereof and the Borrower has
complied with the provisions of Section 5.9.

          SECTION 5.8.  Use of Collateral; Licenses; Repair. The Collateral
shall be operated by competent, qualified personnel in connection with the
Borrower's business purposes, for the purpose for which the Collateral was
designed and in accordance with applicable operating instructions, laws, and
government regulations, and the Borrower shall use every reasonable precaution
to prevent loss or damage to the Collateral from fire and other hazards. The
Collateral shall not be used or operated for personal, family, or household
purposes. The Borrower shall procure and maintain in effect all orders,
licenses, certificates, permits, approvals, and consents required by federal,
state, or local laws or by any governmental body, agency, or authority in
connection with the delivery, installation, use, and operation of the
Collateral. The Borrower shall keep all of the Equipment in a satisfactory state
of repair and satisfactory operating condition in accordance with industry
standards, and will make all repairs and replacements when and where necessary
and practical. The Borrower will not waste or destroy the Equipment or any part
thereof, and will not be negligent in the care or use thereof. The Equipment
shall not be annexed or affixed to or become part of any realty without the
Lender's prior written consent.

          SECTION 5.9.  Further Assurances. The Borrower will, promptly upon
request by the Lender, execute and deliver or use its best efforts to obtain any
document required by the Lender (including, without limitation, warehouseman or
processor disclaimers, mortgagee waivers, landlord disclaimers, or subordination
agreements with respect to the Obligations and the Collateral), give any
notices, execute and file any financing statements, mortgages, or other
documents (all in form and substance satisfactory to the Lender), mark any
chattel paper, deliver any chattel paper or instruments to the Lender, and take
any other actions that are necessary or, in the opinion of the Lender, desirable
to perfect or continue the perfection and the first priority of the Lender's
security interest in the Collateral, to protect the Collateral against the
rights, claims, or interests of any Persons, or to effect the purposes of this
Agreement. The Borrower hereby authorizes the Lender to file one or more
financing or continuation statements, and amendments thereto, relating to all or
any part of the Collateral without the signature of the Borrower where permitted
by law. A carbon, photographic, or other reproduction of this Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law. To the extent
required under this Agreement, the Borrower will pay all costs incurred in
connection with any of the foregoing.

          SECTION 5.10. No Disposition of Collateral. The Borrower will not in
any way hypothecate or create or permit to exist any lien, security interest,
charge, or encumbrance on or other interest in any of the Collateral, except for
the lien and security interest granted hereby and Permitted Liens, and the
Borrower will not sell, transfer, assign, pledge, collaterally assign, exchange,
or otherwise dispose of any of the Collateral. In the event the Collateral, or
any part thereof, is sold, transferred, assigned, exchanged, or otherwise
disposed of in violation of these provisions, the security interest of the
Lender shall continue in such Collateral or part thereof notwithstanding such
sale, transfer, assignment, exchange, or other disposition, and the Borrower
will hold the proceeds thereof in a separate account for the benefit of the
Lender. Following such a sale, the Borrower will transfer such proceeds to the
Lender in kind.

          SECTION 5.11. No Limitation on Lender's Rights. The Borrower will not
enter into any contractual obligations which may restrict or inhibit the
Lender's rights or ability to sell or otherwise dispose of the Collateral or any
part thereof.

          SECTION 5.12. Protection of Collateral. Upon notice to the Borrower
(provided that if an Event of Default has occurred and is continuing the Lender
need not give any notice), the Lender shall have the right at any time to make
any payments and do any other acts the Lender may deem necessary to protect its
security interests in the Collateral, including, without limitation, the rights
to satisfy, purchase, contest, or

                                       8
<PAGE>

compromise any encumbrance, charge, or lien which, in the reasonable judgment of
the Lender, appears to be prior to or superior to the security interests granted
hereunder, and appear in, and defend any action or proceeding purporting to
affect its security interests in, or the value of, any of the Collateral. The
Borrower hereby agrees to reimburse the Lender for all payments made and
expenses incurred under this Agreement including fees, expenses, and
disbursements of attorneys and paralegals (including the allocated costs of in-
house counsel) acting for the Lender, including any of the foregoing payments
under, or acts taken to protect its security interests in, any of the
Collateral, which amounts shall be secured under this Agreement, and agrees it
shall be bound by any payment made or act taken by the Lender hereunder absent
the Lender's gross negligence or willful misconduct. The Lender shall have no
obligation to make any of the foregoing payments or perform any of the foregoing
acts.

          SECTION 5.13. Delivery of Items. The Borrower will (a) promptly (but
in no event later than five Business Days) after its receipt thereof, deliver to
the Lender any documents or certificates of title issued with respect to any
property included in the Collateral, and any promissory notes, letters of credit
or instruments related to or otherwise in connection with any property included
in the Collateral, which in any such case come into the possession of the
Borrower, or shall cause the issuer thereof to deliver any of the same directly
to the Lender, in each case with any necessary endorsements in favor of the
Lender and (b) deliver to the Lender as soon as available copies of any and all
press releases and other similar communications issued by the Borrower.

          SECTION 5.14. Solvency. The Borrower shall be and remain Solvent at
all times.

          SECTION 5.15. Fundamental Changes. The Borrower shall not (a) amend or
modify its name, unless the Borrower delivers to the Lender thirty days prior to
any such proposed amendment or modification written notice of such amendment or
modification and within ten days before such amendment or modification delivers
executed Uniform Commercial Code financing statements (in form and substance
satisfactory to the Lender) or (b) merge or consolidate with any other entity
without the Lender's prior written consent which shall not be unreasonably
withheld or delayed. Notwithstanding the foregoing, Borrower may merge or
consolidate with another entity if: (i) the successor entity has, as of the date
of such merger or consolidation, a tangible net worth at least as great as that
of Borrower; (ii) Borrower gives Lender at least (30) days prior written notice
of such merger or consolidation; (iii) such merger or consolidation does not
adversely affect the rights of Lender hereunder or the Lender's Security
interest in the Collateral in anyway; (iv) the successor entity has executed and
delivered to Lender an agreement in form and substance satisfactory to Lender
containing its assumption (and guarantee of any parent of such acquirer) of the
due and punctual performance and observance of each covenant and condition of
Borrower hereunder; (v) the successor entity executes any precautionary
financing statements or amendments thereto reasonably requested by Lender; and
(vi) immediately before or after such merger or consolidation, no Event of
Default has occurred and is continuing.

          SECTION 5.16. Additional Requirements. The Borrower shall take all
such further actions and execute all such further documents and instruments as
the Lender may reasonably request.

          SECTION 6.  FINANCIAL STATEMENTS.  Until the payment and satisfaction
                      --------------------
in full of all Obligations, and unless otherwise filed with the U.S. Securities
and Exchange Commission on Form 10Q or 10K (as applicable), the Borrower shall
deliver to the Lender the following financial information:

          SECTION 6.1.  Annual Financial Statements. As soon as available, but
not later than 120 days after the end of each fiscal year of the Borrower and
its consolidated subsidiaries, the consolidated balance sheet, income statement,
and statements of cash flows and shareholders equity for the Borrower and its
consolidated subsidiaries (the "Financial Statements") for such year, reported
on by independent certified public accountants without an adverse qualification;
and

          SECTION 6.2.  Quarterly Financial Statements. As soon as available,
but not later than 60 days after the end of each of the first three fiscal
quarters in any fiscal year of the Borrower and its consolidated subsidiaries,
the Financial Statements for such fiscal quarter, together with a certification
duly executed

                                       9
<PAGE>

by a responsible officer of the Borrower that such Financial Statements have
been prepared in accordance with GAAP and are fairly stated in all material
respects (subject to normal year-end audit adjustments).

          SECTION 7.  EVENTS OF DEFAULT.  The occurrence of any of the following
                      -----------------
events shall constitute an Event of Default hereunder:

          (a) the Borrower shall fail to pay within five days after due date any
amount required to be paid by the Borrower under or in connection with any Note
and this Agreement;

          (b) any representation or warranty made or deemed made by the Borrower
under or in connection with any Loan Document or any Financial Statement shall
prove to have been false or incorrect in any material respect when made;

          (c) the Borrower shall fail to perform or observe (i) any of the
terms, covenants or agreements contained in Sections 5.4, 5.7, 5.10, 5.14, or
5.15 hereof or (ii) any other term, covenant, or agreement contained in any Loan
Document (other than the other Events of Default specified in this Section 7)
and such failure remains unremedied for the earlier of fifteen days from (A) the
date on which the Lender has given the Borrower written notice of such failure
and (B) the date on which the Borrower knew or should have known of such
failure;

          (d) any provision of any Loan Document to which the Borrower is a
party shall for any reason cease to be valid and binding on the Borrower, or the
Borrower shall so state;

          (e) dissolution, liquidation, winding up, or cessation of the
Borrower's business, failure of the Borrower generally to pay its debts as they
mature, admission in writing by the Borrower of its inability generally to pay
its debts as they mature, or calling of a meeting of the Borrower's creditors
for purposes of compromising any of the Borrower's debts;

          (f) the commencement by or against the Borrower of any bankruptcy,
insolvency, arrangement, reorganization, receivership, or similar proceedings
under any federal or state law and, in the case of any such involuntary
proceeding, such proceeding remains undismissed or unstayed for forty-five days
following the commencement thereof, or any action by the Borrower is taken
authorizing any such proceedings;

          (g) an assignment for the benefit of creditors is made by the
Borrower, whether voluntary or involuntary, the appointment of a trustee,
custodian, receiver, or similar official for the Borrower or for any substantial
property of the Borrower, or any action by the Borrower authorizing any such
proceeding;

          (h) the Borrower shall default in (i) the payment of principal or
interest on any indebtedness in excess of $250,000 (other than the Obligations)
beyond the period of grace, if any, provided in the instrument or agreement
under which such indebtedness was created; or (ii) the observance or performance
of any other agreement or condition relating to any such indebtedness or
contained in any instrument or agreement relating thereto, or any other event
shall occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such indebtedness
to cause, with the giving of notice if required, such indebtedness to become due
prior to its stated maturity;

          (i) the Borrower suffers or sustains a Material Adverse Change;

          (j) any tax lien, other than a Permitted Lien, is filed of record
against the Borrower and is not bonded or discharged within five Business Days;

          (k) any judgment which has had or could reasonably be expected to have
a Material Adverse Effect on the Borrower and such judgment shall not be stayed,
vacated, bonded, or discharged within sixty days;

                                       10
<PAGE>

          (l) any material covenant, agreement, or obligation, as determined in
the sole discretion of the Lender, made by the Borrower and contained in or
evidenced by any of the Loan Documents shall cease to be enforceable, or shall
be determined to be unenforceable, in accordance with its terms; the Borrower
shall deny or disaffirm the Obligations under any of the Loan Documents or any
liens granted in connection therewith; or any liens granted on any of the
Collateral in favor of the Lender shall be determined to be void, voidable, or
invalid, or shall not be given the priority contemplated by this Agreement; or

          SECTION 8. REMEDIES.  If any Event of Default shall have occurred and
                     --------
be continuing:

          (a) The Lender may, without prejudice to any of its other rights under
any Loan Document or Applicable Law, declare all Obligations to be immediately
due and payable (except with respect to any Event of Default set forth in
Section 7(f) hereof, in which case all Obligations shall automatically become
immediately due and payable without necessity of any declaration) without
presentment, representation, demand of payment, or protest, which are hereby
expressly waived.

          (b) The Lender may take possession of the Collateral and, for that
purpose may enter, with the aid and assistance of any person or persons, any
premises where the Collateral or any part hereof is, or may be placed, and
remove the same.

          (c) The obligation of the Lender, if any, to make additional Loans or
financial accommodations of any kind to the Borrower shall immediately
terminate.

          (d) The Lender may exercise in respect of the Collateral, in addition
to other rights and remedies provided for herein (or in any Loan Document) or
otherwise available to it, all the rights and remedies of a secured party under
the applicable Uniform Commercial Code (the "Code") whether or not the Code
applies to the affected Collateral and also may (i) require the Borrower to, and
the Borrower hereby agrees that it will at its expense and upon request of the
Lender forthwith, assemble all or part of the Collateral as directed by the
Lender and make it available to the Lender at a place to be designated by the
Lender that is reasonably convenient to both parties and (ii) without notice
except as specified below, sell the Collateral or any part thereof in one or
more parcels at public or private sale, at any of the Lender's offices or
elsewhere, for cash, on credit, or for future delivery, and upon such other
terms as the Lender may deem commercially reasonable. The Borrower agrees that,
to the extent notice of sale shall be required by law, at least ten days' notice
to the Borrower of the time and place of any public sale or the time after which
any private sale is to be made shall constitute reasonable notification. The
Lender shall not be obligated to make any sale of Collateral regardless of
notice of sale having been given. The Lender may adjourn any public or private
sale from time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place to which it
was so adjourned.

          (e) All cash proceeds received by the Lender in respect of any sale
of, collection from, or other realization upon all or any part of the Collateral
may, in the discretion of the Lender, be held by the Lender as collateral for,
or then or at any time thereafter applied in whole or in part by the Lender
against, all or any part of the Obligations in such order as the Lender shall
elect. Any surplus of such cash or cash proceeds held by the Lender and
remaining after the full and final payment of all the Obligations shall be paid
over to the Borrower or to such other Person to which the Lender may be required
under applicable law, or directed by a court of competent jurisdiction, to make
payment of such surplus.

          SECTION 9.  MISCELLANEOUS PROVISIONS.
                      ------------------------

          SECTION 9.1.  Notices. Except as otherwise provided herein, all
notices, approvals, consents, correspondence, or other communications required
or desired to be given hereunder shall be given in writing and shall be
delivered by overnight courier, hand delivery, or certified or registered mail,
postage prepaid, if to the Lender, then to Transamerica Technology Finance
Division, 76 Batterson Park Road, Farmington, Connecticut 06032, Attention:
Legal Department, with a copy to the Lender at Riverway II, West Office Tower,
9399 West

                                       11
<PAGE>

Higgins Road, Rosemont, Illinois 60018, Attention: Legal Department, and if to
the Borrower, then to Fusion Medical Technologies, Inc., 34175 Ardenwood Blvd.,
Freemont, Ca 94555, Attention: Chief Executive Officer, or such other address as
shall be designated by the Borrower or the Lender to the other party in
accordance herewith. All such notices and correspondence shall be effective when
received.

          SECTION 9.2.  Headings. The headings in this Agreement are for
purposes of reference only and shall not affect the meaning or construction of
any provision of this Agreement.

          SECTION 9.3.  Assignments. The Borrower shall not have the right to
assign any Note or this Agreement or any interest therein unless the Lender
shall have given the Borrower prior written consent and the Borrower and its
assignee shall have delivered assignment documentation in form and substance
satisfactory to the Lender in its sole discretion. The Lender may assign its
rights and delegate its obligations under any Note or this Agreement.

          SECTION 9.4.  Amendments, Waivers, and Consents. Any amendment or
waiver of any provision of this Agreement and any consent to any departure by
the Borrower from any provision of this Agreement shall be effective only by a
writing signed by the Lender and shall bind and benefit the Borrower and the
Lender and their respective successors and assigns, subject, in the case of the
Borrower, to the first sentence of Section 9.3.

          SECTION 9.5.  Interpretation of Agreement. All terms not defined
herein or in a Note shall have the meaning set forth in the applicable Code,
except where the context otherwise requires. To the extent a term or provision
of this Agreement conflicts with any Note, or any term or provision thereof, and
is not dealt with herein with more specificity, this Agreement shall control
with respect to the subject matter of such term or provision. Acceptance of or
acquiescence in a course of performance rendered under this Agreement shall not
be relevant in determining the meaning of this Agreement even though the
accepting or acquiescing party had knowledge of the nature of the performance
and opportunity for objection.

          SECTION 9.6.  Continuing Security Interest. This Agreement shall
create a continuing security interest in the Collateral and shall (i) remain in
full force and effect until the indefeasible payment in full of the Obligations,
(ii) be binding upon the Borrower and its successors and assigns and (iii)
inure, together with the rights and remedies of the Lender hereunder, to the
benefit of the Lender and its successors, transferees, and assigns.

          SECTION 9.7.  Reinstatement. To the extent permitted by law, this
Agreement and the rights and powers granted to the Lender hereunder and under
the Loan Documents shall continue to be effective or be reinstated if at any
time any amount received by the Lender in respect of the Obligations is
rescinded or must otherwise be restored or returned by the Lender upon the
insolvency, bankruptcy, dissolution, liquidation, or reorganization of the
Borrower or upon the appointment of any receiver, intervenor, conservator,
trustee, or similar official for the Borrower or any substantial part of its
assets, or otherwise, all as though such payments had not been made.

          SECTION 9.8.  Survival of Provisions. All representations, warranties,
and covenants of the Borrower contained herein shall survive the execution and
delivery of this Agreement, and shall terminate only upon the full and final
payment and performance by the Borrower of the Obligations secured hereby.

          SECTION 9.9.  Indemnification. The Borrower agrees to indemnify and
hold harmless the Lender and its directors, officers, agents, employees, and
counsel from and against any and all costs, expenses, claims, or liability
incurred by the Lender or such Person hereunder and under any other Loan
Document or in connection herewith or therewith, unless such claim or liability
shall be due to willful misconduct or gross negligence on the part of the Lender
or such Person.

          SECTION 9.10. Counterparts; Telecopied Signatures. This Agreement may
be

                                       12
<PAGE>

executed in counterparts, each of which when so executed and delivered shall be
an original, but both of which shall together constitute one and the same
instrument. This Agreement and each of the other Loan Documents and any notices
given in connection herewith or therewith may be executed and delivered by
telecopier or other facsimile transmission all with the same force and effect as
if the same was a fully executed and delivered original manual counterpart.

          SECTION 9.11. Severability. In case any provision in or obligation
under this Agreement or any Note or any other Loan Document shall be invalid,
illegal, or unenforceable in any jurisdiction, the validity, legality, and
enforceability of the remaining provisions or obligations, or of such provision
or obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby.

          SECTION 9.12. Delays; Partial Exercise of Remedies. No delay or
omission of the Lender to exercise any right or remedy hereunder, whether before
or after the happening of any Event of Default, shall impair any such right or
shall operate as a waiver thereof or as a waiver of any such Event of Default.
No single or partial exercise by the Lender of any right or remedy shall
preclude any other or further exercise thereof, or preclude any other right or
remedy.

          SECTION 9.13. Entire Agreement. The Borrower and the Lender agree that
this Agreement, the Schedule hereto, and the Commitment Letter are the complete
and exclusive statement and agreement between the parties with respect to the
subject matter hereof, superseding all proposals and prior agreements, oral or
written, and all other communications between the parties with respect to the
subject matter hereof. Should there exist any inconsistency between the terms of
the Commitment Letter and this Agreement, the terms of this Agreement shall
prevail.

          SECTION 9.14. Setoff. In addition to and not in limitation of all
rights of offset that the Lender may have under Applicable Law, and whether or
not the Lender has made any demand or the Obligations of the Borrower have
matured, the Lender shall have the right to appropriate and apply to the payment
of the Obligations of the Borrower all deposits and other obligations then or
thereafter owing by the Lender to or for the credit or the account of the
Borrower.

          SECTION 9.15. WAIVER OF JURY TRIAL. THE BORROWER AND THE LENDER
IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN
DOCUMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

          SECTION 9.16. GOVERNING LAW. THE VALIDITY, INTERPRETATION, AND
ENFORCEMENT OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF ILLINOIS WITHOUT GIVING EFFECT TO THE CONFLICT OF
LAW PRINCIPLES THEREOF.

          SECTION 9.17. Venue; Service of Process. ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF ILLINOIS SITUATED IN COOK COUNTY, OR OF
THE UNITED STATES OF AMERICA FOR THE NORTHERN DISTRICT OF ILLINOIS, AND, BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER HEREBY ACCEPTS FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION
OF THE AFORESAID COURTS. THE BORROWER HEREBY IRREVOCABLY WAIVES, IN CONNECTION
WITH ANY SUCH ACTION OR PROCEEDING, ANY OBJECTION, INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS, THAT IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS. THE BORROWER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR

                                       13
<PAGE>

CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER AT THE ADDRESS FOR IT SPECIFIED
IN SECTION 9.1 HEREOF. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE LENDER TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE BORROWER IN ANY OTHER JURISDICTION,
SUBJECT IN EACH INSTANCE TO THE PROVISIONS HEREOF WITH RESPECT TO RIGHTS AND
REMEDIES.


          IN WITNESS WHEREOF, the undersigned Borrower has caused this Agreement
to be duly executed and delivered by its proper and duly authorized officer as
of the date first set forth above.

                              Fusion Medical Technologies, Inc.



                              By: /s/ Philip M. Sawyer CEO
                                  ------------------------------
                                Name: Philip M. Sawyer, CEO
                                Title: CEO & President
                              Federal Tax ID No.: 94-3177221


Accepted as of the
  6  day of June, 2000



TRANSAMERICA BUSINESS CREDIT CORPORATION


By: /s/ Keith J. Mason
    ----------------------------------------
  Name: Keith J. Mason
  Title: Senior Vice President

Form16

                                       14