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                                                                 EXHIBIT 10.38.3

                          LOAN MODIFICATION AGREEMENT

     This Loan Modification Agreement is entered into as of April 23, 1999, by
and between InnerDyne, Inc. ("Borrower") and Silicon Valley Bank ("Bank").

1.   DESCRIPTION OF EXISTING INDEBTEDNESS:  Among other indebtedness which may
be owing by Borrower to Bank, Borrower in indebted to Bank pursuant to, among
other documents, an Amended and Restated Loan and Security Agreement, dated
June 19, 1997, as may be amended from time to time, (the "Loan Agreement"). The
Loan Agreement provided for, among other things, a Revolving Committed Line in
the original principal amount of Two Million and 00/100 Dollars ($2,000,000.00)
(the "Revolving Facility") and an Equipment Committed Line in the original
principal amount of Five Hundred Thousand and 00/100 Dollars ($500,000.00) (the
"Equipment Facility"). Defined terms used but not otherwise defined herein
shall have the same meanings as in the Loan Agreement.

Hereinafter, all indebtedness owing by Borrower to Bank shall be referred to as
the "Indebtedness."

2.   DESCRIPTION OF COLLATERAL AND GUARANTIES.  Repayment of the Indebtedness
is secured by the Collateral as described in the Loan Agreement and by a
Collateral Assignment, Patent Mortgage and Security Agreement, dated February
23, 1995, as amended.

Hereinafter, the above-described security documents and guaranties, together
with all other documents securing repayment of the Indebtedness shall be
referred to as the "Security Documents". Hereinafter, the Security Documents,
together with all other documents evidencing or securing the Indebtedness shall
be referred to as the "Existing Loan Documents".

3.   DESCRIPTION OF CHANGE IN TERMS.

     A.   Modification(s) to Loan Agreement

          1.   The following defined terms are hereby amended and/or
               incorporated into Section 1.1 entitled "Definitions" to read as
               follows:

               "Equipment Advance #3" means a cash advance or cash advances
               under the Equipment Facility #3.

               "Equipment Availability End Date #3" means April 23, 2000.

               "Committed Equipment Line #3" means Seven Hundred Fifty Thousand
               and 00/100 Dollars ($750,000.00).

               "Equipment Facility #3" means the facility under which Borrower
               may request Bank to issue cash advances, as specified in Section
               2.1.4.

               "Equipment Facility #3 Maturity Date" means April 23, 2003.

               "Revolving Maturity Date" means April 22, 2000.

          2.   The following Section is hereby incorporated to read as follows:

               2.1.4     Equipment Facility #3.

                         (a)  Subject to and upon the terms and conditions of
               this Agreement, at any time from the date hereof through April
               23, 2000 (the "Equipment Availability End Date #3"), Bank agrees
               to make advances (each an "Equipment Advance #3" and
               collectively, the "Equipment Advances #3") to Borrower in an
               aggregate outstanding amount not to exceed the Committed
               Equipment Line #3. To evidence the

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               Equipment Advance #3 or  Equipment Advances #3, Borrower shall
               deliver to Bank, at the time of each Equipment Advance #3
               request, an invoice for the equipment to be purchased. The
               Equipment Advances #3 shall be used only to purchase or refinance
               Equipment purchased on or after ninety (90) days prior to the
               date of the subject Equipment Advance #3 and shall not exceed one
               hundred percent (100%) of the invoice amount of such equipment
               approved from time to time by Bank, excluding taxes, shipping,
               warranty charges, freight discounts and installation expense.

                    (b)  Interest shall accrue from the date of each Equipment
               Advance #3 at the rate specified in Section 2.3(a) and shall be
               payable monthly on the 23rd of each month through the month in
               which the Equipment Availability End Date #3 falls. Any Equipment
               Advances #3 that are outstanding on the Equipment Availability
               End Date #3 will be payable in thirty-six (36) equal monthly
               installments of principal, plus all accrued interest, beginning
               on the 23rd of each month following the Equipment Availability
               End Date #3 and ending on the Equipment Facility #3 Maturity
               Date. Equipment Advances #3, once repaid, may not be reborrowed.

                    (c)  When Borrower desires to obtain an Equipment Advance
               #3, Borrower shall notify Bank (which notice shall be
               irrevocable) by facsimile transmission to be received no later
               than 3:00 p.m. Pacific time one (1) Business Day before the day
               on which the Equipment Advance #3 is to be made. The notice shall
               be signed by a Responsible Officer or its designee and include a
               copy of the invoice for the Equipment to be financed.

          3.   Effective as of the date of this Agreement, the first sentence of
               Section 2.3(a) entitled "Interest Rate" is hereby amended to read
               as follows:

                    Except as set forth in Section 2.3(b), any Revolving
               Advances shall bear interest, on the average daily balance
               thereof, at a per annum rate equal to one-quarter of one (0.25)
               percentage point above the Prime Rate.

          4.   The following is hereby incorporated into 2.3(a) entitled
               "Interest Rate" to read as follows:

                    Except as set forth in Section 2.3(b), and subject to the
               following sentence, all outstanding Equipment Advances #3 shall
               bear interest at a floating rate equal to one-quarter of one
               (0.25) percentage point above the Prime Rate. Except as set forth
               in Section 2.3(b) Borrower shall have a one-time option on the
               Equipment Availability End Date #3, exercisable by written notice
               to Bank, to elect that all outstanding Equipment Advances #3
               shall bear interest at a rate equal to three (3.00) percentage
               points above the thirty-six (36) month Treasury Note Yield to
               maturity for three (3) year treasury bills, as such rate is
               quoted by Bank. Such fixed rate option, once elected, shall
               continue for the term of the Equipment Facility #3. If
               Borrower elects the fixed rate option, any amounts prepaid by
               Borrower shall be accompanied by a Prepayment Fee on the date of
               prepayment.

          5.   Section 6.13 entitled "Profitability" is hereby amended, in its
               entirety to read as follows:

               Borrower shall have a minimum net profit of $1.00 for each fiscal
               quarter.

4.   CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
necessary to reflect the changes described above.


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5.   PAYMENT OF LOAN FEE. Borrower shall pay to Bank a fee in the amount of
Eight Thousand Seven Hundred Fifty and 00/100 Dollars ($8,750.00) (the "Loan
Fee") plus all out-of-pocket expenses.

6.   NO DEFENSES OF BORROWER. Borrower (and each guarantor and pledgor signing
below) agrees that, as of the date hereof, it has no defenses against the
obligations to pay any amounts under the indebtedness.

7.   CONTINUING VALIDITY. Borrower (and each guarantor and pledgor signing
below) understands and agrees that in modifying the existing indebtedness, Bank
is relying upon Borrower's representations, warranties, and agreements, as set
forth in the Existing Loan Documents. Except as expressly modified pursuant to
this Loan Modification Agreement, the terms of the Existing Loan Documents
remain unchanged and in full force and effect. Bank's agreement to modifications
to the existing Indebtedness pursuant to this Loan Modification Agreement in no
way shall obligate Bank to make any future modifications to the Indebtedness.
Nothing in this Loan Modification Agreement shall constitute a satisfaction of
the Indebtedness. It is the intention of Bank and Borrower to retain as liable
parties all makers and endorsers of Existing Loan Documents, unless the party is
expressly released by Bank in writing. No maker, endorser, or guarantor will be
released by virtue of this Loan Modification Agreement. The terms of this
paragraph apply not only to this Loan Modification Agreement, but also to all
subsequent loan modification agreements.

8.   CONDITIONS. The effectiveness of this Loan Modification Agreement is
conditioned upon Borrower's payment of the Loan Fee.

     This Loan Modification Agreement is executed as of the date first written
above.



BORROWER:                                BANK:
INNERDYNE, INC.                          SILICON VALLEY BANK



By: /s/ ROBERT A. STERN                  By: /s/ CLIFF WHITE
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Name: Robert A. Stern                    Name: Cliff White
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Title: VP/Chief Financial Officer        Title: SVP
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