Document:

<PAGE>

                                                                     EXHIBIT 4.6

                               SILICON VALLEY BANK
                          REGISTRATION RIGHTS AGREEMENT

         THIS REGISTRATION RIGHTS AGREEMENT is entered into as of May 8, 2003,
by and between Silicon Valley Bank ("SVB") and the Company whose name appears on
the last page of this Agreement.

                                    RECITALS

         A. Concurrently with the execution of this Agreement, the Company is
issuing a warrant to purchase stock to SVB (the "Warrant") pursuant to which SVB
has the right to acquire from the Company the Shares (as defined in the
Warrant).

         B. By this Agreement, the SVB and the Company desire to set forth the
registration rights of the Shares all as provided herein.

         NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions hereinafter set forth, the parties hereto mutually agree as follows:

         1. Registration Rights. The Company covenants and agrees as follows:

                  1.1 Definitions. For purposes of this Section 1:

                           (a) The term "register," "registered," and
"registration" refer to a registration effected by preparing and filing a
registration statement or similar document in compliance with the Securities Act
of 1933, as amended (the "Securities Act"), and the declaration or ordering of
effectiveness of such registration statement or document;

                           (b) The term "Registrable Securities" means (i) the
Shares (if Common Stock) or all shares of Common Stock of the Company issuable
or issued upon conversion of the Shares and (ii) any Common Stock of the Company
issued as (or issuable upon the conversion or exercise of any warrant, right or
other security which is issued as) a dividend or other distribution with respect
to, or in exchange for or in replacement of, any stock referred to in (i).

                           (c) The terms "Holder" or "Holders" means the SVB or
qualifying transferees under subsection 1.8 hereof who hold Registrable
Securities.

                           (d) The term "SEC" means the Securities and Exchange
Commission.

                  1.2 Company Registration.

                           (a) Registration. If at any time or from time to
time, the Company shall determine to register any of its securities, for its own
account or the account of any of its shareholders, other than a registration on
Form S-1 or S-8 or Form D relating solely to employee stock option or purchase
plans, or a registration on Form S-4 relating solely to an SEC Rule 145
transaction, or a registration on any other form (other than Form S-1, S-2, S-3
or S-18, or their

                                       1

<PAGE>

successor forms) or any successor to such forms, which does not include
substantially the same information as would be required to be included in a
registration statement covering the sale of Registrable Securities, the Company
will:

                                    (i) promptly give to each Holder written
notice thereof (which shall include a list of the jurisdictions in which the
Company intends to attempt to qualify such securities under the applicable blue
sky or other state securities laws); and

                                    (ii)include in such registration (and
compliance), and in any underwriting involved therein, all the Registrable
Securities specified in a written request or requests, made within 30 days after
receipt of such written notice from the Company, by any Holder or Holders,
except as set forth in subsection 1.2(b) below.

                           (b) Underwriting. If the registration of which the
Company gives notice is for a registered public offering involving an
underwriting, the Company shall so advise the Holders as a part of the written
notice given pursuant to subsection 1.2(a)(i). In such event the right of any
Holder to registration pursuant to this subsection 1.2 shall be conditioned upon
such Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting to the extent provided
herein. All Holders proposing to distribute their securities through such
underwriting shall (together with the Company and the other shareholders
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by the Company.

                  1.3 Expenses of Registration. All expenses incurred in
connection with any registration, qualification or compliance pursuant to this
Section 1 including without limitation, all registration, filing and
qualification fees, printing expenses, fees and disbursements of counsel for the
Company and expenses of any special audits incidental to or required by such
registration, shall be borne by the Company except the Company shall not be
required to pay underwriters' fees, discounts or commissions relating to
Registrable Securities. All expenses of any registered offering not otherwise
borne by the Company shall be borne pro rata among the Holders participating in
the offering and the Company.

                  1.4 Registration Procedures. In the case of each registration,
qualification or compliance effected by the Company pursuant to this
Registration Rights Agreement, the Company will keep each Holder participating
therein advised in writing as to the initiation of each registration,
qualification and compliance and as to the completion thereof. Except as
otherwise provided in subsection 1.3, at its expense the Company will:

                           (a) Prepare and file with the SEC a registration
statement with respect to such Registrable Securities and use its best efforts
to cause such registration statement to become effective, and, upon the request
of the Holders of a majority of the Registrable Securities registered
thereunder, keep such registration statement effective for up to 120 days.

                                       2

<PAGE>

                           (b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.

                           (c) Furnish to the Holders such numbers of copies of
a prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by them.

                           (d) Use its reasonable best efforts to register and
qualify the securities covered by such registration statement under such other
securities or Blue Sky laws of such jurisdictions as shall be reasonably
requested by the Holders, provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions.

                           (e) In the event of any underwritten public offering,
enter into and perform its obligations under an underwriting agreement, in usual
and customary form, with the managing underwriter of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.

                           (f) Notify each Holder of Registrable Securities
covered by such registration statement at any time when a prospectus relating
thereto is required to be delivered under the Securities Act or the happening of
any event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
then existing.

                  1.5 Indemnification.

                           (a) The Company will indemnify each Holder of
Registrable Securities and each of its officers, directors and partners, and
each person controlling such Holder, with respect to which such registration,
qualification or compliance has been effected pursuant to this Rights Agreement,
and each underwriter, if any, and each person who controls any underwriter of
the Registrable Securities held by or issuable to such Holder, against all
claims, losses, expenses, damages and liabilities (or actions in respect
thereto) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any prospectus, offering circular or
other document (including any related registration statement, notification or
the like) incident to any such registration, qualification or compliance, or
based on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statement therein not
misleading, or any violation or alleged violation by the Company of the
Securities Act, the Securities Exchange Act of 1934, as amended ("Exchange
Act"), or any state securities law applicable to the Company or any rule or
regulation promulgated under the Securities Act, the Exchange Act or any such
state law and relating to action or inaction required of the Company in
connection with any such registration, qualification of compliance, and will

                                       3

<PAGE>

reimburse each such Holder, each of its officers, directors and partners, and
each person controlling such Holder, each such underwriter and each person who
controls any such underwriter, within a reasonable amount of time after incurred
for any reasonable legal and any other expenses incurred in connection with
investigating, defending or settling any such claim, loss, damage, liability or
action; provided, however, that the indemnity agreement contained in this
subsection 1.5(a) shall not apply to amounts paid in settlement of any such
claim, loss, damage, liability, or action if such settlement is effected without
the consent of the Company (which consent shall not be unreasonably withheld);
and provided further, that the Company will not be liable in any such case to
the extent that any such claim, loss, damage or liability arises out of or is
based on any untrue statement or omission based upon written information
furnished to the Company by an instrument duly executed by such Holder or
underwriter specifically for use therein.

                           (b) Each Holder will, if Registrable Securities held
by or issuable to such Holder are included in the securities as to which such
registration, qualification or compliance is being effected, indemnify the
Company, each of its directors and officers, each underwriter, if any, of the
Company's securities covered by such a registration statement, each person who
controls the Company within the meaning of the Securities Act, and each other
such Holder, each of its officers, directors and partners and each person
controlling such Holder, against all claims, losses, expenses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company, such Holders, such directors,
officers, partners, persons or underwriters for any reasonable legal or any
other expenses incurred in connection with investigating, defending or settling
any such claim, loss, damage, liability or action, in each case to the extent,
but only to the extent, that such untrue statement (or alleged untrue statement)
or omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to the Company by an instrument
duly executed by such Holder specifically for use therein; provided, however,
that the indemnity agreement contained in this subsection 1.5(b) shall not apply
to amounts paid in settlement of any such claim, loss, damage, liability or
action if such settlement is effected without the consent of the Holder (which
consent shall not be unreasonably withheld); and provided further, that the
total amount for which any Holder shall be liable under this subsection 1.5(b)
shall not in any event exceed the aggregate proceeds received by such Holder
from the sale of Registrable Securities held by such Holder in such
registration.

                           (c) Each party entitled to indemnification under this
subsection 1.5 (the "Indemnified Party") shall give notice to the party required
to provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom; provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not be
unreasonably withheld), and the

                                       4

<PAGE>

Indemnified Party may participate in such defense at such party's expense; and
provided further, that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying of its obligations hereunder,
unless such failure resulted in prejudice to the Indemnifying Party; and
provided further, that an Indemnified Party (together with all other Indemnified
Parties which may be represented without conflict by one counsel) shall have the
right to retain one separate counsel, with the fees and expenses to be paid by
the Indemnifying Party, if representation of such Indemnified Party by the
counsel retained by the Indemnifying Party would be inappropriate due to actual
or potential differing interests between such Indemnified Party and any other
party represented by such counsel in such proceeding. No Indemnifying Party, in
the defense of any such claim or litigation, shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation.

                  1.6 Information by Holder. Any Holder or Holders of
Registrable Securities included in any registration shall promptly furnish to
the Company such information regarding such Holder or Holders and the
distribution proposed by such Holder or Holders as the Company may request in
writing and as shall be required in connection with any registration,
qualification or compliance referred to herein.

                  1.7 Rule 144 Reporting. With a view to making available to
Holders the benefits of certain rules and regulations of the SEC which may
permit the sale of the Registrable Securities to the public without
registration, the Company agrees at all times to:

                           (a) make and keep public information available, as
those terms are understood and defined in SEC Rule 144, after 90 days after the
effective date of the first registration filed by the Company for an offering of
its securities to the general public;

                           (b) file with the SEC in a timely manner all reports
and other documents required of the Company under the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements); and

                           (c) so long as a Holder owns any Registrable
Securities, to furnish to such Holder forthwith upon request a written statement
by the Company as to its compliance with the reporting requirements of said Rule
144 (at any time after 90 days after the effective date of the first
registration statement filed by the Company for an offering of its securities to
the general public), and of the Securities Act and the Exchange Act (at any time
after it has become subject to such reporting requirements), a copy of the most
recent annual or quarterly report of the Company, and such other reports and
documents so filed by the Company as the Holder may reasonably request in
complying with any rule or regulation of the SEC allowing the Holder to sell any
such securities without registration.

                  1.8 Transfer of Registration Rights. Holders' rights to cause
the Company to register their securities and keep information available, granted
to them by the Company under subsections 1.2 and 1.7 may be assigned to a
transferee or assignee of a Holder's Registrable

                                       5

<PAGE>

Securities not sold to the public, provided, that the Company is given written
notice by such Holder at the time of or within a reasonable time after said
transfer, stating the name and address of said transferee or assignee and
identifying the securities with respect to which such registration rights are
being assigned. The Company may prohibit the transfer of any Holders' rights
under this subsection 1.8 to any proposed transferee or assignee who the Company
reasonably believes is a competitor of the Company.

         2.   General.

                  2.1 Waivers and Amendments. With the written consent of the
record or beneficial holders of at least a majority of the Registrable
Securities, the obligations of the Company and the rights of the Holders of the
Registrable Securities under this agreement may be waived (either generally or
in a particular instance, either retroactively or prospectively, and either for
a specified period of time or indefinitely), and with the same consent the
Company, when authorized by resolution of its Board of Directors, may enter into
a supplementary agreement for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement;
provided, however, that no such modification, amendment or waiver shall reduce
the aforesaid percentage of Registrable Securities. Upon the effectuation of
each such waiver, consent, agreement of amendment or modification, the Company
shall promptly give written notice thereof to the record holders of the
Registrable Securities who have not previously consented thereto in writing.
This Agreement or any provision hereof may be changed, waived, discharged or
terminated only by a statement in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is sought, except to
the extent provided in this subsection 2.1.

                  2.2 Governing Law. This Agreement shall be governed in all
respects by the laws of the State of California as such laws are applied to
agreements between California residents entered into and to be performed
entirely within California.

                  2.3 Successors and Assigns. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and administrators of
the parties hereto.

                  2.4 Entire Agreement. Except as set forth below, this
Agreement and the other documents delivered pursuant hereto constitute the full
and entire understanding and agreement between the parties with regard to the
subjects hereof and thereof.

                  2.5 Notices. etc. All notices and other communications
required or permitted hereunder shall be in writing and shall be mailed by first
class mail, postage prepaid, certified or registered mail, return receipt
requested, addressed (a) if to Holder, at such Holder's address as set forth
below, or at such other address as such Holder shall have furnished to the
Company in writing, or (b) if to the Company, at the Company's address set forth
below, or at such other address as the Company shall have furnished to the
Holder in writing.

                                       6

<PAGE>

                  2.6 Severability. In case any provision of this Agreement
shall be invalid, illegal, or unenforceable, the validity, legality and
enforceability of the remaining provisions of this Agreement or any provision of
the other Agreements shall not in any way be affected or impaired thereby.

                  2.7 Titles and Subtitles. The titles of the sections and
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.

                  2.8 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

SVB                                       COMPANY
SILICON VALLEY BANK                       I-FLOW CORPORATION
By: ______________________                By: _______________________
Name: Gary Reagan                         Name: Donald M. Earhart
                (Print)                                         (Print)
Title: Vice President                     Title: Chairman of the Board
                                            President or Vice President
Address: 3003 Tasman Drive                Address: 20202 Windrow Drive
         Santa Clara, California 95054             Lake Forest,
         Attention: Treasury Department            California 92630
                                                   Attn: Chief Financial
                                                   Officer

                                       7<PAGE>

                                                                    EXHIBIT 10.8

                AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

         This AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this
"Agreement") dated as of the Effective Date, between SILICON VALLEY BANK
("Bank"), whose address is 3003 Tasman Drive, Santa Clara, California 95054 with
a loan production office located at 38 Technology Drive, Suite 150, Irvine,
California 92618, and I-FLOW CORPORATION and SPINAL SPECIALTIES, INC. (jointly
and severally referred to herein as the "Borrower"), whose address is 20202
Windrow Drive, Lake Forest, California 92630, provides the terms on which Bank
will lend to Borrower and Borrower will repay Bank.

         Reference is made to that certain Loan and Security Agreement between
them dated September 28, 1995, as amended and otherwise modified prior to the
date hereof (such loan agreement as so amended and as otherwise amended,
modified or supplemented from time to time being referred to herein as the
"Original Loan Agreement"). Borrower and Bank desire to amend and restate the
Original Loan Agreement in its entirety to read as is set forth herein,
effective as of the Effective Date. The following agreements, documents and
instruments shall nevertheless continue in full force and effect: Any and all
guarantees relating to the Original Loan Agreement, all standard documents of
Bank entered into by the Borrower in connection with Letters of Credit and/or
Foreign Exchange Contracts, all UCC-1 financing statements and other documents
filed with governmental offices which perfect liens or security interests in
favor of Bank.

         NOW, THEREFORE, for good and valuable consideration, the parties hereto
hereby agree as follows:

1.       ACCOUNTING AND OTHER TERMS

         Accounting terms not determined in this Agreement will be construed
following GAAP. Calculations and determinations must be made following GAAP. The
term "financial statements" includes the notes and schedules. The terms
"including" and "includes" always mean "including (or includes) without
limitation," in this or any Loan Document.

2.       LOAN AND TERMS OF PAYMENT

                               2.1 Promise to Pay.

         Borrower promises to pay Bank the unpaid principal amount of all Credit
Extensions and interest on the unpaid principal amount of the Credit Extensions
in accordance with the terms and conditions hereof.

         2.1.1    REVOLVING ADVANCES.

         (a) Bank will make Revolving Advances not exceeding, on a joint basis
for all Borrowers, the lesser of (A) the Committed Revolving Line or (B) the
Borrowing Base minus (i) all amounts for services utilized under the Merchant
Services Sublimit, and minus (ii) the amount of all outstanding Letters of
Credit (including drawn but unreimbursed Letters of Credit); provided that the
aggregate amount of Revolving Advances, Letters of Credit, Merchant Services
utilizations together with the outstanding amount of the Term Loan Advances
shall not exceed $4,000,000 through the period ending July 31, 2003, $4,500,000
through the period ending October 31, 2003 and $5,000,000 thereafter, and with
the foregoing determined on a joint basis for all Borrowers (the limitations set
forth in this proviso are collectively referred to as the "Usage Cap"). Amounts
borrowed under this Section may be repaid and reborrowed during the term of this
Agreement.

<PAGE>

         (b) To obtain a Revolving Advance, Borrower must notify Bank by
facsimile or telephone by 12:00 p.m. Pacific time on the Business Day the
Revolving Advance is proposed to be made. Borrower must promptly confirm the
notification by delivering to Bank the Payment/Advance Form, in the form
attached hereto as Exhibit B. Bank will credit Revolving Advances to Borrower's
deposit account. Bank may make Revolving Advances under this Agreement based on
instructions from a Responsible Officer or his or her designee or without
instructions if any such Revolving Advances are necessary to meet Obligations
which have become due. Bank may rely on any telephonic notice given by a person
whom Bank believes is a Responsible Officer or such Person's designee, and
Borrower hereby indemnifies Bank for any loss Bank suffers due to any such
reliance.

         (c) The Committed Revolving Line terminates on the Revolving Maturity
Date, when all Revolving Advances and related Obligations are immediately
payable.

2.1.2 LETTERS OF CREDIT. Bank will issue or have issued letters of credit for
Borrower's account (individually referred as a "Letter of Credit" and
collectively referred to herein as the "Letters of Credit") not exceeding (i)
the Committed Revolving Line, minus (ii) the outstanding principal balance of
the Revolving Advances, minus (iii) the aggregate amount of extended Merchant
Services; provided, however, the face amount of outstanding Letters of Credit
(including drawn but unreimbursed Letters of Credit) may not exceed $500,000 on
a joint basis for all Borrowers, subject to, as and when applicable, the Usage
Cap. Each Letter of Credit will have an expiry date of no later than 180 days
after the Revolving Maturity Date, but Borrower's reimbursement obligation shall
be secured by cash on terms acceptable to Bank at any time after the earlier to
occur of the Revolving Maturity Date if the term of this Agreement is not
extended by Bank or as of any earlier date of termination of this Agreement.
Borrower agrees to execute any further documentation in connection with the
Letters of Credit as Bank may reasonably request.

2.1.3 MERCHANT SERVICES SUBLIMIT. Borrower may use up to $100,000 on a joint
basis for all Borrowers (the "Merchant Services Sublimit") for Bank's merchant
services including such services as are identified in various agreements
relating thereto (the "Merchant Services"), with such sublimit subject to, as
and when applicable, the Usage Cap. The aggregate amounts utilized under the
Merchant Services Sublimit will at all times reduce the amount otherwise
available to be borrowed under the Committed Revolving Line and new Merchant
Services may be extended only if the amount of such proposed new extension of
such services would otherwise be available for the making of a Revolving Advance
in such amount. Any amounts Bank pays on behalf of Borrower or any amounts that
are not paid by Borrower for any Merchant Services will be treated as Revolving
Advances under the Committed Revolving Line and will accrue interest at the rate
for Revolving Advances.

         2.1.4    TERM LOAN ADVANCES.

         (a) Through December 31, 2003 (the "Availability End Date"), Bank will
make advances (individually a "Term Loan Advance" and collectively referred to
as the "Term Loan Advances") not exceeding in the aggregate for all Term Loan
Advances outstanding from time to time the Committed Term Loan Line, subject,
however, to the Usage Cap, as and when applicable in accordance with its terms.
Each Term Loan Advance must be for a minimum of $100,000.

         (b) Interest accrues from the date of each Term Loan Advance at the
rate in Section 2.3 and is payable monthly until the Availability End Date
occurs. Term Loan Advances outstanding on the Availability End Date are payable
in 36 equal monthly installments of principal, plus accrued interest, beginning
on the 1st of each month following the Availability End Date and

                                       2

<PAGE>

ending on December 1, 2006 (the "Term Loan Maturity Date"). Term Loan Advances
when repaid may not be reborrowed.

         (c) To obtain a Term Loan Advance, Borrower must notify Bank by
facsimile or telephone by 12:00 p.m. Pacific time on the Business Day the Term
Loan Advance is proposed to be made. Borrower must promptly confirm the
notification by delivering to Bank the Payment/Advance Form, in the form
attached hereto as Exhibit B. Bank will credit Term Loan Advances to Borrower's
deposit account. Bank may make Term Loan Advances under this Agreement based on
instructions from a Responsible Officer or his or her designee or without
instructions if any such Advances are necessary to meet Obligations which have
become due. Bank may rely on any telephonic notice given by a person whom Bank
believes is a Responsible Officer or such Person's designee, and Borrower hereby
indemnifies Bank for any loss Bank suffers due to any such reliance.

                                2.2 Overadvances.

         If Borrower's Obligations hereunder exceed the applicable lending
limitations set forth above, Borrower must immediately pay Bank any such excess.

                          2.3 Interest Rate, Payments.

         (a) Interest Rate. Revolving Advances accrue interest on the
outstanding principal balance at a per annum rate of one-half percentage point
(0.50%) above the Prime Rate. Term Loan Advances accrue interest on the
outstanding principal balance at a per annum rate of one percentage point
(1.00%) above the Prime Rate, provided that the applicable interest rate
hereunder with respect to Term Loan Advances shall never be less than 5.25% per
annum under any circumstances. After an Event of Default, Obligations accrue
interest at five (5) percentage points above the rate effective immediately
before the Event of Default. The interest rate increases or decreases when the
Prime Rate changes. Interest is computed on a 360 day year for the actual number
of days elapsed.

         (b) Payments. Interest due and payable on the 1st day of each month.
Bank may debit any of Borrower's deposit accounts for principal and interest
payments owing or any amounts Borrower owes Bank. Bank will promptly notify
Borrower when it debits Borrower's accounts. These debits are not a set-off.
Payments received after 12:00 noon Pacific time are considered received at the
opening of business on the next Business Day. When a payment is due on a day
that is not a Business Day, the payment is due the next Business Day and
additional fees or interest accrue.

                                    2.4 Fees.

         (a) Facility Fee. Borrower shall pay to Bank a fee of $15,000
concurrently herewith on a joint basis for both Borrowers, which shall be in
addition to interest and to all other amounts payable hereunder and which shall
not be refundable. Bank acknowledges that it has received a good faith deposit
of $5,000 prior to the date hereof, which shall be applied to the foregoing
facility fee.

         (b)      Bank Expenses. Borrower shall pay to the Bank all Bank
Expenses (including reasonable attorneys' fees and expenses) incurred through
and after the Closing Date when due.

3. CONDITIONS OF LOANS

              3.1 Conditions Precedent to Initial Credit Extension.

         Bank's obligation to make the initial Credit Extension is subject to
the condition precedent that it receive the agreements, documents and fees it
requires.

                                       3

<PAGE>

               3.2 Conditions Precedent to all Credit Extensions.

         Bank's obligations to make each Credit Extension, including the initial
Credit Extension, is subject to the following:

         (a)  timely receipt of any Payment/Advance Form; and

         (b) the representations and warranties in Section 5 must be materially
true on the date of the Payment/Advance Form and on the effective date of each
Credit Extension and no Event of Default may have occurred and be continuing, or
result from the Credit Extension. Each Credit Extension is Borrower's
representation and warranty on that date that the representations and warranties
of Section 5 remain true.

4.       CREATION OF SECURITY INTEREST

                         4.1 Grant of Security Interest.

         Borrower grants Bank a continuing security interest in all presently
existing and later acquired Collateral to secure all Obligations and performance
of each of Borrower's duties under the Loan Documents. Except for Permitted
Liens, any security interest will be a first priority security interest in the
Collateral. Bank may place a "hold" on any deposit account pledged as
Collateral. If this Agreement is terminated, Bank's lien and security interest
in the Collateral will continue until Borrower fully satisfies its Obligations.

5.       REPRESENTATIONS AND WARRANTIES

         Borrower represents and warrants as follows:

                     5.1 Due Organization and Authorization.

         Each of Borrower and each Subsidiary is duly existing and in good
standing in its state of formation and qualified and licensed to do business in,
and in good standing in, any state in which the conduct of its business or its
ownership of property requires that it be qualified, except where the failure to
do so could not reasonably be expected to cause a Material Adverse Change.

         The execution, delivery and performance of the Loan Documents have been
duly authorized, and do not conflict with Borrower's formation documents, nor
constitute an event of default under any material agreement by which Borrower is
bound. Borrower is not in default under any agreement to which or by which it is
bound in which the default could reasonably be expected to cause a Material
Adverse Change.

                                 5.2 Collateral.

         Borrower has good title to the Collateral, free of Liens except
Permitted Liens. The Accounts are bona fide, existing obligations, and the
service or property has been performed or delivered to the account debtor or its
agent for immediate shipment to and unconditional acceptance by the account
debtor. Borrower has no notice of any actual or imminent Insolvency Proceeding
of any account debtor whose accounts are an Eligible Account in any Borrowing
Base Certificate. All Inventory is in all material respects of good and
marketable quality, free from material defects. Borrower is the sole owner of
the Intellectual Property, except for non-exclusive licenses granted to its
customers in the ordinary course of business. Each Patent is valid and
enforceable and no part of the Intellectual Property has been judged invalid or
unenforceable, in whole or in part, and no claim has been made that any part of
the Intellectual Property violates the rights of any third party, except to the
extent such claim could not reasonably be expected to cause a Material Adverse
Change.

                                       4
<PAGE>

                                 5.3 Litigation.

         Except as shown in the Schedule, there are no actions or proceedings
pending or, to the knowledge of Borrower's Responsible Officers, threatened by
or against Borrower or any Subsidiary in which a likely adverse decision could
reasonably be expected to cause a Material Adverse Change.

             5.4 No Material Adverse Change in Financial Statements.

         All consolidated financial statements for Borrower, and any Subsidiary,
delivered to Bank fairly present in all material respects Borrower's
consolidated financial condition and Borrower's consolidated results of
operations. There has not been any material deterioration in Borrower's
consolidated financial condition since the date of the most recent financial
statements submitted to Bank.

                                  5.5 Solvency.

         The fair salable value of Borrower's assets (including goodwill minus
disposition costs) exceeds the fair value of its liabilities; the Borrower is
not left with unreasonably small capital after the transactions in this
Agreement; and Borrower is able to pay its debts (including trade debts) as they
mature.

                           5.6 Regulatory Compliance.

         Borrower is not an "investment company" or a company "controlled" by an
"investment company" under the Investment Company Act. Borrower is not engaged
as one of its important activities in extending credit for margin stock (under
Regulations T and U of the Federal Reserve Board of Governors). Borrower has
complied in all material respects with the Federal Fair Labor Standards Act.
Borrower has not violated any laws, ordinances or rules, the violation of which
could reasonably be expected to cause a Material Adverse Change. None of
Borrower's or any Subsidiary's properties or assets has been used by Borrower or
any Subsidiary or, to the best of Borrower's knowledge, by previous Persons, in
disposing, producing, storing, treating, or transporting any hazardous substance
other than legally. Borrower and each Subsidiary has timely filed all required
tax returns and paid, or made adequate provision to pay, all material taxes,
except those being contested in good faith with adequate reserves under GAAP.
Borrower and each Subsidiary has obtained all consents, approvals and
authorizations of, made all declarations or filings with, and given all notices
to, all government authorities that are necessary to continue its business as
currently conducted, except where the failure to do so could not reasonably be
expected to cause a Material Adverse Change.

                                5.7 Subsidiaries.

         Borrower does not own any stock, partnership interest or other equity
securities except for Permitted Investments.

                              5.8 Full Disclosure.

         No written representation, warranty or other statement of Borrower in
any certificate or written statement given to Bank (taken together with all such
written certificates and written statements to Bank) contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements contained in the certificates or statements not misleading, with
it being recognized by Bank that the projections and forecasts provided by
Borrower in good faith and based upon reasonable assumptions are not viewed as
facts and that actual results during the period or periods covered by such
projections and forecasts may differ from the projected and forecasted results.

                                       5
<PAGE>

6.       AFFIRMATIVE COVENANTS

         Borrower will do all of the following for so long as Bank has an
obligation to lend, or there are outstanding Obligations:

                           6.1 Government Compliance.

         Borrower will maintain its and all Subsidiaries' legal existence and
good standing in its jurisdiction of formation and maintain qualification in
each jurisdiction in which the failure to so qualify would reasonably be
expected to cause a material adverse effect on Borrower's business or
operations. Borrower will comply, and have each Subsidiary comply, with all
laws, ordinances and regulations to which it is subject, noncompliance with
which could have a material adverse effect on Borrower's business or operations
or would reasonably be expected to cause a Material Adverse Change.

                6.2 Financial Statements, Reports, Certificates.

         (a) Borrower will deliver to Bank: (i) as soon as available, but no
later than 30 days after the last day of each month, a company prepared
consolidating balance sheet and income statement covering Borrower's
consolidated operations during the period certified by a Responsible Officer and
in a form acceptable to Bank; (ii) as soon as available, but no later than five
days after the earlier to occur of the date each of the Reports 10-Q and 10-K of
I-Flow Corporation is filed or required to be filed with the Securities and
Exchange Commission, each of such 10-Q and 10-K Reports and all other documents
and information filed in connection therewith; (iii) a prompt report of any
legal actions pending or threatened against Borrower or any Subsidiary that
could result in damages or costs to Borrower or any Subsidiary of $250,000 or
more, on a joint basis for all such entities; (iv) budgets, sales projections,
operating plans or other financial information Bank reasonably requests; and (v)
prompt notice of any material change in the composition of the Intellectual
Property or knowledge of an event that materially adversely affects the value of
the Intellectual Property.

         (b) Within 20 days after the last day of each month, Borrower will
deliver to Bank a Borrowing Base Certificate signed by a Responsible Officer in
the form of Exhibit C, with aged listings of accounts receivable and accounts
payable together with an inventory report in form acceptable to Bank.

         (c) Within 30 days after the last day of each month, Borrower will
deliver to Bank with the monthly financial statements a Compliance Certificate
signed by a Responsible Officer in the form of Exhibit D.

         (d) Borrower shall allow Bank to audit Borrower's Collateral at
Borrower's expense. Such audits will be conducted no more often than every 12
months unless a Default or an Event of Default has occurred and is continuing.

                             6.3 Inventory; Returns.

         Borrower will keep all Inventory in good and marketable condition, free
from material defects. Returns and allowances between Borrower and its account
debtors will follow Borrower's customary practices as they exist at execution of
this Agreement. Borrower must promptly notify Bank of all returns, recoveries,
disputes and claims, that involve more than $50,000 on a joint basis for all
Borrowers.

                                   6.4 Taxes.

         Borrower will make, and cause each Subsidiary to make, timely payment
of all material federal, state, and local taxes or assessments (other than taxes
and assessments which Borrower

                                       6
<PAGE>

is contesting in good faith, with adequate reserves maintained in accordance
with GAAP) and will deliver to Bank, on demand, appropriate certificates
attesting to the payment.

                                 6.5 Insurance.

         Borrower will keep its business and the Collateral insured for risks
and in amounts standard for Borrower's industry, and as Bank may reasonably
request. Insurance policies will be in a form, with companies, and in amounts
that are satisfactory to Bank in Bank's reasonable discretion. All property
policies will have a lender's loss payable endorsement showing Bank as an
additional loss payee and all liability policies will show the Bank as an
additional insured and provide that the insurer must give Bank at least 20 days
notice before canceling its policy. At Bank's request, Borrower will deliver
certified copies of policies and evidence of all premium payments. Proceeds
payable under any policy will, at Bank's option, be payable to Bank on account
of the Obligations.

                              6.6 Primary Accounts.

         Borrower will maintain its primary banking and investment account
relationships with Bank.

                            6.7 Financial Covenants.

         Borrower will maintain at all times during the effectiveness of this
Agreement on a consolidated basis for I-Flow Corporation and tested quarterly
during the term hereof unless otherwise indicated below:

                  (i) QUICK RATIO. A ratio of Quick Assets to Modified Current
Liabilities of at least 1.25 TO 1.00.

                  (ii)PROFITABILITY. Borrower will not incur a net loss in
excess of $900,000 for the quarter ending March 31, 2003, $1,000,000 for the
quarter ending June 30, 2003 and $800,000 for the quarter ending September 30,
2003.

                  (iii) DEBT SERVICE RATIO. Beginning with the quarter end
period of December 31, 2003 and thereafter on a quarterly basis, Borrower shall
maintain a Debt Service Ratio of not less than 1.50 to 1 as of the end of each
fiscal quarter.

                        6.8 Intellectual Property Rights.

         Borrower will register (as determined in the commercially reasonable
business judgment of Borrower) with the United States Patent and Trademark
Office its material patent and trademark Intellectual Property and such
additional Intellectual Property rights relating thereto developed or acquired
including revisions or additions to any product before the sale or licensing of
the product to any third party or which is otherwise material. Borrower shall
inform Bank of any such registration promptly and take such actions and execute
such documentation as Bank may deem necessary or advisable relating thereto.

         Borrower has no present maskworks, software, computer programs and
other works of authorship registered with the United States Copyright Office
except as disclosed on Exhibit 6.8 hereto, and Borrower shall not hereafter
register any maskworks, software, computer programs or other works of authorship
subject to United States copyright protection with the United States Copyright
Office.

         Borrower will (i) protect, defend and maintain the validity and
enforceability of the Intellectual Property in a manner consistent with past
practices and, in any event, consistent with reasonable and prudent business
practices and promptly advise Bank in writing of material

                                       7
<PAGE>

infringements and (ii) not allow any Intellectual Property to be abandoned,
forfeited or dedicated to the public without Bank's written consent.

              6.9 Notification Regarding InfuSystem Guaranty; etc.

         Borrower will notify Bank immediately via telephone and in writing at
any time that demand has been made of Borrower to perform under the InfuSystem
Guaranty. Further, Borrower will also promptly notify Bank of material adverse
developments regarding the InfuSystem Credit Facility.

                         6.10 InfuSystem Loan Proceeds.

         BORROWER SHALL CAUSE INFUSYSTEM TO FORWARD TO BORROWER PROCEEDS OF ALL
REVOLVING LOANS OF INFUSYSTEM UNDER THE INFUSYSTEM CREDIT FACILITY UPON THE
MAKING THEREOF, OTHER THAN FOR LOAN PROCEEDS IN THE AGGREGATE AMOUNT SET FORTH
IN SECTION 7.11 HEREOF.

                            6.11 Further Assurances.

         Borrower will execute any further instruments and take further action
as Bank reasonably requests to perfect or continue Bank's security interest in
the Collateral or to effect the purposes of this Agreement.

7.       NEGATIVE COVENANTS

         Borrower will not do (and with respect to Section 7.11 only, Borrower
will cause InfuSystem not to do) any of the following without Bank's prior
written consent, which will not be unreasonably withheld, for so long as Bank
has an obligation to lend or there are any outstanding Obligations:

                                7.1 Dispositions.

         Convey, sell, lease, transfer or otherwise dispose of (collectively
"Transfer"), or permit any of its Subsidiaries to Transfer, all or any part of
its business or property, except for Transfers (i) of Inventory in the ordinary
course of business; (ii) of non-exclusive licenses and similar arrangements for
the use of the property of Borrower or its Subsidiaries in the ordinary course
of business; or (iii) of worn-out or obsolete Equipment.

      7.2 Changes in Business, Ownership, Management or Business Locations.

         Engage in or permit any of its Subsidiaries to engage in any business
other than the businesses currently engaged in by Borrower or reasonably related
thereto or have a material change in its management or its ownership of greater
than 25% (other than by the sale of Borrower's equity securities in a public
offering or to venture capital investors so long as Borrower identifies the
venture capital investors prior to the closing of the investment). Borrower will
not, without at least 30 days prior written notice, relocate its chief executive
office or add any new offices or business locations in which Borrower maintains
or stores over $5,000 in Borrower's assets or property.

                          7.3 Mergers or Acquisitions.

         Merge or consolidate, or permit any of its Subsidiaries to merge or
consolidate, with any other Person, or acquire, or permit any of its
Subsidiaries to acquire, all or substantially all of the capital stock or
property of another Person, except where: (i) no Default or Event of Default has
occurred and is continuing or would result from such action during the term of
this Agreement; (ii) such transaction would not result in a decrease of more
than 25% of Tangible Net Worth; and (iii) upon the acquisition of any other
Person as otherwise permitted pursuant to the terms of this Section, such Person
become an appropriate obligor relating to the Obligations hereunder, as the Bank
may determine, and shall execute such agreements, documents and instruments as
are reasonably necessary or appropriate, as the Bank may determine, in order to
evidence such debt obligations and to establish a first priority security
interest in the personal property assets of such

                                       8
<PAGE>

Person in favor of Bank, subject to Permitted Liens. A Subsidiary may merge or
consolidate into another Subsidiary or into Borrower as long as no Default or
Event of Default is occurring prior thereto or arises thereafter.

                                7.4 Indebtedness.

         Create, incur, assume, or be liable for any Indebtedness, or permit any
Subsidiary to do so, other than Permitted Indebtedness.

                                7.5 Encumbrance.

         Create, incur, or allow any Lien on any of its property, or assign or
convey any right to receive income, including the sale of any Accounts, or
permit any of its Subsidiaries to do so, except for Permitted Liens, or permit
the first priority lien status of Bank regarding the Collateral to change,
subject only to Permitted Liens as may be applicable.

                         7.6 Distributions; Investments.

         Directly or indirectly acquire or own any Person, or make any
Investment in any Person, other than Permitted Investments, or permit any of its
Subsidiaries to do so. Pay any dividends or make any distribution or payment or
redeem, retire or purchase any capital stock.

                        7.7 Transactions with Affiliates.

         Directly or indirectly enter into or permit to exist any material
transaction with any Affiliate of Borrower except for transactions that are in
the ordinary course of Borrower's business, upon fair and reasonable terms that
are no less favorable to Borrower than would be obtained in an arm's length
transaction with a nonaffiliated Person.

                             7.8 Subordinated Debt.

         Make or permit any payment on any Subordinated Debt, except under the
terms of the Subordinated Debt, or amend any provision in any document relating
to the Subordinated Debt without Bank's prior written consent.

                                 7.9 Compliance.

         Become an "investment company" or a company controlled by an
"investment company," under the Investment Company Act of 1940 or undertake as
one of its important activities extending credit to purchase or carry margin
stock, or use the proceeds of any Credit Extension for that purpose; fail to
meet the minimum funding requirements of ERISA, permit a Reportable Event or
Prohibited Transaction, as defined in ERISA, to occur; fail to comply with the
Federal Fair Labor Standards Act or violate any other law or regulation, if the
violation could reasonably be expected to have a material adverse effect on
Borrower's business or operations or would reasonably be expected to cause a
Material Adverse Change, or permit any of its Subsidiaries to do so.

                7.10 Maintenance of InfuSystem Credit Facility.

         TAKE ANY ACTION THAT CAUSES OR OTHERWISE BRING ABOUT, OR CAUSES
INFUSYSTEM TAKE ANY ACTION OR OTHERWISE BRING ABOUT, THE TERMINATION OR
CANCELLATION OF THE INFUSYSTEM CREDIT FACILITY RELATING TO REVOLVING LOANS ONLY,
             OTHER THAN IN ACCORDANCE WITH SCHEDULED MATURITY DATE.

                7.11 Limitation Regarding InfuSystem Borrowings.

         TO RETAIN, UNDER THE DOMINION AND CONTROL OF INFUSYSTEM, PROCEEDS OF
REVOLVING LOANS ONLY UNDER THE INFUSYSTEM CREDIT FACILITY IN EXCESS OF
$1,000,000 AT ANY TIME (WITH THE UNDERSTANDING THAT ALL OTHER PROCEEDS OF SUCH
REVOLVING LOANS ARE TO BE FORWARDED TO I-FLOW CORPORATION UPON THE MAKING OF
REVOLVING LOANS UNDER THE
     INFUSYSTEM CREDIT FACILITY, AS FURTHER STATED IN SECTION 6.10 HEREOF).

8.       EVENTS OF DEFAULT

         Any one of the following is an "Event of Default" hereunder:

                                       9
<PAGE>

                              8.1 Payment Default.

         If Borrower fails to pay any of the Obligations within three days after
their due date. During such additional 3 day period the failure to cure such
payment default is not an Event of Default hereunder (but no Credit Extension
will be made during the cure period);

                              8.2 Covenant Default.

         (A) If Borrower does not perform any obligation in Section 6 or
violates any covenant in Section 7; or

         (B) If Borrower does not perform or observe any other material term,
condition or covenant in this Agreement (other than Section 8.1 or 8.2(A)), any
Loan Documents, or in any agreement between Borrower and Bank (but not including
a circumstance under Section 8.6(A) below) and as to any default under a term,
condition or covenant that can be cured, has not cured the default within 10
days after it occurs, or if the default cannot be cured within 10 days or cannot
be cured after Borrower's attempts within 10 day period, and the default may be
cured within a reasonable time, then Borrower has an additional period (of not
more than 30 days) to attempt to cure the default. During the additional time,
the failure to cure the default is not an Event of Default (but no Credit
Extensions will be made during the cure period);

                          8.3 Material Adverse Change.

         If there (i) occurs a material adverse change in the business,
operations, or condition (financial or otherwise) of the Borrower, or (ii) is a
material impairment of the prospect of repayment of any portion of the
Obligations or (iii) is a material impairment of the value or priority of Bank's
security interests in the Collateral (any of the foregoing is referred to herein
as a "Material Adverse Change").

                                 8.4 Attachment.

         If any material portion of Borrower's assets is attached, seized,
levied on, or comes into possession of a trustee or receiver and the attachment,
seizure or levy is not removed in 10 days, or if Borrower is enjoined,
restrained, or prevented by court order from conducting a material part of its
business or if a judgment or other claim becomes a Lien on a material portion of
Borrower's assets, or if a notice of lien, levy, or assessment is filed against
any of Borrower's assets by any government agency and not paid within 10 days
after Borrower receives notice. These are not Events of Default if stayed or if
a bond is posted pending contest by Borrower (but no Credit Extensions will be
made during the cure period);

                                 8.5 Insolvency.

         If Borrower becomes insolvent or if Borrower begins an Insolvency
Proceeding or an Insolvency Proceeding is begun against Borrower and not
dismissed or stayed within 30 days (but no Credit Extensions will be made before
any Insolvency Proceeding is dismissed);

                              8.6 Other Agreements.

         (A) If there is a default or event of default under any other document
or agreement between Bank and Borrower of any nature or kind;

         (B) if there is a default or event of default under the InfuSystem
Guaranty or any document or agreement or instrument relating to the InfuSystem
Credit Facility or any successor credit facility thereto that may arise from
time to time; or

         (C) If there is a default in any other agreement between Borrower and a
third party that gives the third party the right to accelerate any Indebtedness
exceeding $100,000 or that could cause a Material Adverse Change;

                                       10
<PAGE>

                                 8.7 Judgments.

         If a money judgment(s) in the aggregate of at least $50,000 is rendered
against Borrower and is unsatisfied and unstayed for 10 days (but no Credit
Extensions will be made before the judgment is stayed or satisfied);

                             8.8 Misrepresentations.

         If Borrower or any Person acting for Borrower makes any material
misrepresentation or material misstatement now or later in any warranty or
representation in this Agreement or in any writing delivered to Bank or to
induce Bank to enter this Agreement or any Loan Document; or

                                  8.9 Guaranty.

         Any guaranty of any Obligations ceases for any reason to be in full
force or any Guarantor does not perform any obligation under any guaranty of the
Obligations, or any material misrepresentation or material misstatement exists
now or later in any warranty or representation in any guaranty of the
Obligations or in any certificate delivered to Bank in connection with the
guaranty, or any circumstance described in Sections 8.4, 8.5 or 8.7 occurs to
any Guarantor.

9.       BANK'S RIGHTS AND REMEDIES

                            9.1 Rights and Remedies.

         When an Event of Default occurs and continues Bank may, without notice
or demand, do any or all of the following:

         (a) Declare all Obligations immediately due and payable (but if an
Event of Default described in Section 8.5 occurs all Obligations are immediately
due and payable without any action by Bank);

         (b) Stop advancing money or extending credit for Borrower's benefit
under this Agreement or under any other agreement between Borrower and Bank;

         (c) Settle or adjust disputes and claims directly with account debtors
for amounts, on terms and in any order that Bank considers advisable;

         (d) Make any payments and do any acts it considers necessary or
reasonable to protect its security interest in the Collateral. Borrower will
assemble the Collateral if Bank requires and make it available as Bank
designates. Bank may enter premises where the Collateral is located, take and
maintain possession of any part of the Collateral, and pay, purchase, contest,
or compromise any Lien which appears to be prior or superior to its security
interest and pay all expenses incurred. Borrower grants Bank a license to enter
and occupy any of its premises, without charge, to exercise any of Bank's rights
or remedies;

         (e) Apply to the Obligations any (i) balances and deposits of Borrower
it holds, or (ii) any amount held by Bank owing to or for the credit or the
account of Borrower;

         (f) Ship, reclaim, recover, store, finish, maintain, repair, prepare
for sale, advertise for sale, and sell the Collateral. Bank is granted a
non-exclusive, royalty-free license or other right to use, without charge,
Borrower's labels, Patents, Copyrights, Mask Works, rights of use of any name,
trade secrets, trade names, Trademarks, service marks, and advertising matter,
or any similar property as it pertains to the Collateral, in completing
production of, advertising for sale, and selling any Collateral and, in
connection with Bank's exercise of its rights under this Section, Borrower's
rights under all licenses and all franchise agreements inure to Bank's benefit;
and

         (g) Dispose of the Collateral according to the Code.

                                       11
<PAGE>

                             9.2 Power of Attorney.

         Effective only when an Event of Default occurs and continues, Borrower
irrevocably appoints Bank as its lawful attorney to: (i) endorse Borrower's name
on any checks or other forms of payment or security; (ii) sign Borrower's name
on any invoice or bill of lading for any Account or drafts against account
debtors, (iii) make, settle, and adjust all claims under Borrower's insurance
policies; (iv) settle and adjust disputes and claims about the Accounts directly
with account debtors, for amounts and on terms Bank determines reasonable; and
(v) transfer the Collateral into the name of Bank or a third party as the Code
permits. Bank may exercise the power of attorney to sign Borrower's name on any
documents necessary to perfect or continue the perfection of any security
interest regardless of whether an Event of Default has occurred. Bank's
appointment as Borrower's attorney in fact, and all of Bank's rights and powers,
coupled with an interest, are irrevocable until all Obligations have been fully
repaid and performed and Bank's obligation to provide Credit Extensions
terminates.

                            9.3 Accounts Collection.

         When an Event of Default occurs and continues, Bank may notify any
Person owing Borrower money of Bank's security interest in the funds and verify
the amount of the Account. Borrower must collect all payments in trust for Bank
and, if requested by Bank, immediately deliver the payments to Bank in the form
received from the account debtor, with proper endorsements for deposit.

                               9.4 Bank Expenses.

         If Borrower fails to pay any amount or furnish any required proof of
payment to third persons, Bank may make all or part of the payment or obtain
insurance policies required in Section 6.5, and take any action under the
policies Bank deems prudent. Any amounts paid by Bank are Bank Expenses and
immediately due and payable, bearing interest at the then applicable rate and
secured by the Collateral. No payments by Bank are deemed an agreement to make
similar payments in the future or Bank's waiver of any Event of Default.

                      9.5 Bank's Liability for Collateral.

         If Bank complies with reasonable banking practices and the Code, it is
not liable for: (a) the safekeeping of the Collateral; (b) any loss or damage to
the Collateral; (c) any diminution in the value of the Collateral; or (d) any
act or default of any carrier, warehouseman, bailee, or other person. Borrower
bears all risk of loss, damage or destruction of the Collateral.

                            9.6 Remedies Cumulative.

         Bank's rights and remedies under this Agreement, the Loan Documents,
and all other agreements are cumulative. Bank has all rights and remedies
provided under the Code, by law, or in equity. Bank's exercise of one right or
remedy is not an election, and Bank's waiver of any Event of Default is not a
continuing waiver. Bank's delay is not a waiver, election, or acquiescence. No
waiver is effective unless signed by Bank and then is only effective for the
specific instance and purpose for which it was given.

                               9.7 Demand Waiver.

         Borrower waives demand, notice of default or dishonor, notice of
payment and nonpayment, notice of any default, nonpayment at maturity, release,
compromise, settlement, extension, or renewal of accounts, documents,
instruments, chattel paper, and guarantees held by Bank on which Borrower is
liable.

10.      NOTICES

         All notices or demands by any party about this Agreement or any other
related agreement must be in writing and be personally delivered or sent by an
overnight delivery service, by

                                       12
<PAGE>

certified mail, postage prepaid, return receipt requested, or by telefacsimile
to the addresses set forth at the beginning of this Agreement. A party may
change its notice address by giving the other party written notice.

11.      CHOICE OF LAW , VENUE AND JURY TRIAL WAIVER

         California law governs the Loan Documents without regard to principles
of conflicts of law. Borrower and Bank each submit to the exclusive jurisdiction
of the State and Federal courts in Orange County, California.

BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY CONTEMPLATED
TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS
WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT.
EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

12.      GENERAL PROVISIONS

                          12.1 Successors and Assigns.

         This Agreement binds and is for the benefit of the successors and
permitted assigns of each party. Borrower may not assign this Agreement or any
rights under it without Bank's prior written consent which may be granted or
withheld in Bank's discretion. Bank has the right, without the consent of or
notice to Borrower, to sell, transfer, negotiate, or grant participation in all
or any part of, or any interest in, Bank's obligations, rights and benefits
under this Agreement.

                              12.2 Indemnification.

         Borrower will indemnify, defend and hold harmless Bank and its
officers, employees, and agents against: (a) all obligations, demands, claims,
and liabilities asserted by any other party in connection with the transactions
contemplated by the Loan Documents; and (b) all losses or Bank Expenses
incurred, or paid by Bank from, following, or consequential to transactions
between Bank and Borrower (including reasonable attorneys fees and expenses),
except for losses caused by Bank's gross negligence or willful misconduct.

                              12.3 Time of Essence.

         Time is of the essence for the performance of all obligations in this
Agreement.

                         12.4 Severability of Provision.

         Each provision of this Agreement is severable from every other
provision in determining the enforceability of any provision.

                    12.5 Amendments in Writing, Integration.

         All amendments to this Agreement must be in writing and signed by
Borrower and Bank. This Agreement represents the entire agreement about this
subject matter, and supersedes prior negotiations or agreements. All prior
agreements, understandings, representations, warranties, and negotiations
between the parties about the subject matter of this Agreement merge into this
Agreement and the Loan Documents.

                               12.6 Counterparts.

         This Agreement may be executed in any number of counterparts and by
different parties on separate counterparts, each of which, when executed and
delivered, are an original, and all taken together, constitute one Agreement.

                                       13
<PAGE>

                                 12.7 Survival.

         All covenants, representations and warranties made in this Agreement
continue in full force while any Obligations remain outstanding. The obligations
of Borrower in Section 12.2 to indemnify Bank will survive until all statutes of
limitations for actions that may be brought against Bank have run.

                              12.8 Confidentiality.

         In handling any confidential information, Bank will exercise the same
degree of care that it exercises for its own proprietary information, but
disclosure of information may be made (i) to Bank's subsidiaries or affiliates
in connection with their business with Borrower, (ii) to prospective transferees
or purchasers of any interest in the loans (provided, however, Bank shall use
commercially reasonable efforts in obtaining such prospective transferee or
purchasers agreement of the terms of this provision), (iii) as required by law,
regulation, subpoena, or other order, (iv) as required in connection with Bank's
examination or audit and (v) as Bank considers appropriate exercising remedies
under this Agreement. Confidential information does not include information that
either: (a) is in the public domain or in Bank's possession when disclosed to
Bank, or becomes part of the public domain after disclosure to Bank; or (b) is
disclosed to Bank by a third party, if Bank does not know that the third party
is prohibited from disclosing the information.

                    12.9 Attorneys' Fees, Costs and Expenses.

         In any action or proceeding between Borrower and Bank arising out of
the Loan Documents, the prevailing party will be entitled to recover its
reasonable attorneys' fees and other reasonable costs and expenses incurred, in
addition to any other relief to which it may be entitled.

13.      DEFINITIONS

                                13.1 Definitions.

         In this Agreement:

         "ACCOUNTS" are all existing and later arising accounts, contract
rights, and other obligations owed Borrower in connection with its sale or lease
of goods (including licensing software and other technology) or provision of
services, all credit insurance, guaranties, other security and all merchandise
returned or reclaimed by Borrower and Borrower's Books relating to any of the
foregoing.

         "AFFILIATE" of a Person is a Person that owns or controls directly or
indirectly the Person, any Person that controls or is controlled by or is under
common control with the Person, and each of that Person's senior executive
officers, directors, partners and, for any Person that is a limited liability
company, that Person's managers and members.

         "AVAILABILITY END DATE" shall have the meaning ascribed to such term in
Section 2.1.4 hereof.

         "BANK EXPENSES" are all audit fees and expenses and reasonable costs
and expenses (including reasonable attorneys' fees and expenses) for preparing,
negotiating, administering, defending and enforcing the Loan Documents
(including appeals or Insolvency Proceedings).

         "BORROWER'S BOOKS" are all Borrower's books and records including
ledgers, records regarding Borrower's assets or liabilities, the Collateral,
business operations or financial condition and all computer programs or discs or
any equipment containing the information.

                                       14
<PAGE>

         "BORROWING BASE" means (A) 80% of Eligible Accounts as determined and
confirmed by Bank from Borrower's most recent Borrowing Base Certificate; plus
(B) the lesser of $500,000 or 25% of the Value of domestic finished goods
inventory of the Borrower that the Bank deems eligible for borrowing; provided,
however, that Bank may lower the percentages above after performing and
evaluating the results of audits of Borrower's Collateral from time to time. As
used in the foregoing definition "Value" shall mean the lower of cost or
wholesale market value.

         "BUSINESS DAY" is any day that is not a Saturday, Sunday or a day on
which the Bank is closed.

         "CLOSING DATE" is the date of this Agreement.

         "CODE" is the Uniform Commercial Code, as applicable.

         "COLLATERAL" is the property described on Exhibit A.

         "COMMITTED REVOLVING LINE" is the revolving credit facility extended by
Bank hereunder to Borrower and relating to an aggregate amount of Revolving
Advances of up to Four-Million Dollars ($4,000,000) determined on a joint basis
for all Borrowers, subject, however, to the Usage Cap.

         "COMMITTED TERM LOAN LINE" is the term loan credit facility extended by
Bank hereunder to Borrower consisting of an aggregate amount of Term Loan
Advances of up to Two-Million Dollars ($2,000,000) determined on a joint basis
for all Borrowers, subject to the Usage Cap.

         "CONTINGENT OBLIGATION" is, for any Person, any direct or indirect
liability, contingent or not, of that Person for (i) any indebtedness, lease,
dividend, letter of credit or other obligation of another such as an obligation
directly or indirectly guaranteed, endorsed, co-made, discounted or sold with
recourse by that Person, or for which that Person is directly or indirectly
liable; (ii) any obligations for undrawn letters of credit for the account of
that Person; and (iii) all obligations from any interest rate, currency or
commodity swap agreement, interest rate cap or collar agreement, or other
agreement or arrangement designated to protect a Person against fluctuation in
interest rates, currency exchange rates or commodity prices; but "Contingent
Obligation" does not include endorsements in the ordinary course of business.
The amount of a Contingent Obligation is the stated or determined amount of the
primary obligation for which the Contingent Obligation is made or, if not
determinable, the maximum reasonably anticipated liability for it determined by
the Person in good faith; but the amount may not exceed the maximum of the
obligations under the guarantee or other support arrangement.

         "COPYRIGHTS" are all copyright rights, applications or registrations
and like protections in each work or authorship or derivative work, whether
published or not (whether or not it is a trade secret) now or later existing,
created, acquired or held.

         "CREDIT EXTENSION" is each Revolving Advance, each Term Loan Advance,
each Letter of Credit, each Merchant Services utilization and each other
extension of credit by Bank for Borrower's benefit.

         "CURRENT ASSETS" are amounts that under GAAP should be included on that
date as current assets on Borrower's consolidated balance sheet.

                                       15
<PAGE>

         "CURRENT LIABILITIES" are the aggregate amount of Borrower's Total
Liabilities which mature within one (1) year.

         "DEBT SERVICE RATIO" means, as of any quarter-end date, a ratio of (a)
Borrower's quarterly earnings before interest, taxes, depreciation and other
non-cash amortization expenses and other non-cash expenses of the Borrower,
determined in accordance with GAAP and annualized, to (b) the sum of (i)
Borrower's payment obligations relating to the current maturities of principal
on all of Borrower's outstanding long term indebtedness, determined in
accordance with GAAP, plus (ii) the annualized amount of interest due on all
indebtedness of Borrower for such quarter then ended.

         "DEFAULT" shall mean any event or occurrence which with the passing of
time or the giving of notice or both would become an Event of Default hereunder.

         "EFFECTIVE DATE" is the date Bank executes this Agreement.

         "ELIGIBLE ACCOUNTS" are Accounts in the ordinary course of Borrower's
business that meet all Borrower's representations and warranties in this
Agreement; but Bank may change eligibility standards by giving Borrower notice.
Unless Bank agrees otherwise in writing, Eligible Accounts will not include:

                  (a) Accounts that the account debtor has not paid within 90
days of invoice date;

                  (b) Accounts for an account debtor, 50% or more of whose
Accounts have not been paid within 90 days of invoice date;

                  (c) Credit balances over 90 days from invoice date;

                  (d) Accounts for an account debtor, including Affiliates,
whose total obligations to Borrower exceed 25% of all Accounts, for the amounts
that exceed that percentage, unless the Bank approves in writing;

                  (e) Accounts for which the account debtor does not have its
principal place of business in the United States, provided that each of
Fresenius Medical Care AG, B. Braun Melsungen, B. Braun Celsa SA, AG, Kobayashi
and Teva will be considered Eligible Accounts regardless of such debtor's
principal place of business outside of the United States if any such Accounts
otherwise satisfy the eligibility standards hereunder and as long as Bank
continues to determine that such account debtors are acceptable to Bank, as Bank
will from time to time evaluate, in light of such debtor's foreign domicile;

                  (f) Accounts for which the account debtor is a federal, state
or local government entity or any department, agency, or instrumentality,
excluding hospitals owned by federal, state, or local governments;

                  (g) Accounts for which Borrower owes the account debtor, but
only up to the amount owed (sometimes called "contra" accounts, accounts
payable, customer deposits or credit accounts);

                  (h) Accounts for demonstration or promotional equipment, or in
which goods are consigned, sales guaranteed, sale or return, sale on approval,
bill and hold, or other terms if account debtor's payment may be conditional;

                                       16
<PAGE>

                  (i) Accounts for which the account debtor is Borrower's
Affiliate, officer, employee, or agent;

                  (j) Accounts in which the account debtor disputes liability or
makes any claim and Bank believes there may be a basis for dispute (but only up
to the disputed or claimed amount), or if the Account Debtor is subject to an
Insolvency Proceeding, or becomes insolvent, or goes out of business; and

                  (k) Accounts for which Bank reasonably determines collection
to be doubtful.

         "EQUIPMENT" is all present and future machinery, equipment, tenant
improvements, furniture, fixtures, vehicles, tools, parts and attachments in
which Borrower has any interest.

         "ERISA" is the Employment Retirement Income Security Act of 1974, and
its regulations.

         "GAAP" is generally accepted accounting principles, consistently
applied.

         "GUARANTOR" is any present or future guarantor of the Obligations.

         "INDEBTEDNESS" is (a) indebtedness for borrowed money or the deferred
price of property or services, such as reimbursement and other obligations for
surety bonds and letters of credit, (b) obligations evidenced by notes, bonds,
debentures or similar instruments, (c) capital lease obligations and (d)
Contingent Obligations.

         "INFUSYSTEM" shall mean InfuSystem, Inc., a California corporation, a
wholly-owned subsidiary of I-Flow Corporation.

         "INFUSYSTEM CREDIT FACILITY" shall mean that certain loan facility by
and between InfuSystem and Fifth Third Bank, as now in existence and as amended
and otherwise modified from time to time, and with the understanding that as of
the date hereof such overall credit facility is composed of a revolving loan
facility and an equipment loan facility.

         "INFUSYSTEM GUARANTY" shall mean a continuing guaranty by I-Flow
Corporation of the obligations of InfuSystem under the InfuSystem Credit
Facility as such guaranty is modified from time to time, provided that, in any
event, the liability of I-Flow Corporation thereunder shall not exceed
$3,500,000 at any time.

         "INSOLVENCY PROCEEDING" are proceedings by or against any Person under
the United States Bankruptcy Code, or any other bankruptcy or insolvency law,
including assignments for the benefit of creditors, compositions, extensions
generally with its creditors, or proceedings seeking reorganization,
arrangement, or other relief.

         "INTELLECTUAL PROPERTY" is:

         (a) Copyrights, Trademarks, Patents, and Mask Works including
amendments, renewals, extensions, and all licenses or other rights to use and
all license fees and royalties from the use;

         (b) Any trade secrets and any intellectual property rights in computer
software and computer software products now or later existing, created, acquired
or held;

                                       17
<PAGE>

         (c) All design rights which may be available to Borrower now or later
created, acquired or held;

         (d) Any claims for damages (past, present or future) for infringement
of any of the rights above, with the right, but not the obligation, to sue and
collect damages for use or infringement of the intellectual property rights
above;

         All proceeds and products of the foregoing, including all insurance,
indemnity or warranty payments.

         "INVENTORY" is present and future inventory in which Borrower has any
interest, including merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products intended for sale or
lease or to be furnished under a contract of service, of every kind and
description now or later owned by or in the custody or possession, actual or
constructive, of Borrower, including inventory temporarily out of its custody or
possession or in transit and including returns on any accounts or other proceeds
(including insurance proceeds) from the sale or disposition of any of the
foregoing and any documents of title.

         "INVESTMENT" is any beneficial ownership of (including stock,
partnership interest or other securities) any Person, or any loan, advance or
capital contribution to any Person.

         "LETTER OF CREDIT" OR "LETTERS OF CREDIT" shall have the meaning
ascribed to such term in Section 2.1.2 hereof.

         "LIEN" is a mortgage, lien, deed of trust, charge, pledge, security
interest or other encumbrance.

         "LOAN DOCUMENTS" are, collectively, this Agreement, any note, or notes
or guaranties or third party suretyship obligations in favor of Bank executed by
Borrower or other Persons, as applicable, and any other present or future
agreement between Borrower and/or for the benefit of Bank in connection with
this Agreement, all as amended, extended or restated.

         "MASK WORKS" are all mask works or similar rights available for the
protection of semiconductor chips, now owned or later acquired.

         "MATERIAL ADVERSE CHANGE" is defined in Section 8.3.

         "MERCHANT SERVICES" shall have the meaning ascribed to such term in
Section 2.1.3 hereof.

         "MERCHANT SERVICES SUBLIMIT" shall have the meaning ascribed to such
term in Section 2.1.3 hereof.

         "MODIFIED CURRENT LIABILITIES" are the aggregate amount of Borrower's
Current Liabilities plus, to the extent not already included in the foregoing,
all Obligations (regardless of tenor) owing to Bank including the face amount of
all outstanding Letters of Credit.

         "OBLIGATIONS" are debts, principal, interest, Bank Expenses and other
amounts Borrower owes Bank now or later, including cash management services,
letters of credit and foreign exchange contracts, if any and including interest
accruing after Insolvency Proceedings begin and debts, liabilities, or
obligations of Borrower assigned to Bank.

                                       18
<PAGE>

         "PATENTS" are patents, patent applications and like protections,
including improvements, divisions, continuations, renewals, reissues, extensions
and continuations-in-part of the same.

         "PERMITTED INDEBTEDNESS" is:

         (a)      Borrower's indebtedness to Bank under this Agreement or any
                  other Loan Document;

         (b)      Indebtedness existing on the Closing Date and shown on the
                  Schedule;

         (c)      Subordinated Debt;

         (d)      Indebtedness to trade creditors incurred in the ordinary
                  course of business;

         (e)      Indebtedness secured by Permitted Liens; and

         (f)      Contingent Indebtedness relating to the InfuSystem Guaranty,
                  provided that the aggregate amount of the liability of I-Flow
                  Corporation under the InfuSystem Guaranty shall not exceed
                  $3,500,000 at any time.

         (g)      Indebtedness of InfuSystem under the InfuSystem Credit
                  Facility

         "PERMITTED INVESTMENTS" are:

         (a) Investments shown on the Schedule and existing on the Closing Date;
and

         (b) (i) marketable direct obligations issued or unconditionally
guaranteed by the United States or its agency or any State maturing within 1
year from its acquisition, (ii) commercial paper maturing no more than 1 year
after its creation and having the highest rating from either Standard & Poor's
Corporation or Moody's Investors Service, Inc., and (iii) Bank's certificates of
deposit issued maturing no more than 1 year after issue.

         "PERMITTED LIENS" are:

         (a) Liens existing on the Closing Date and shown on the Schedule or
arising under this Agreement or other Loan Documents;

         (b) Liens for taxes, fees, assessments or other government charges or
levies, either not delinquent or being contested in good faith and for which
Borrower maintains adequate reserves on its Books, if they have no priority over
any of Bank's security interests;

         (c) Purchase money Liens (i) on Equipment acquired or held by Borrower
or its Subsidiaries incurred for financing the acquisition of the Equipment, or
(ii) existing on equipment when acquired, if the Lien is confined to the
property and improvements and the proceeds of the equipment;

         (d) Non-exclusive licenses or sublicenses granted in the ordinary
course of Borrower's business and, with respect to any licenses where Borrower
is the licensee, any interest or title of a licensor or under any such license
or sublicense, if the licenses and sublicenses permit granting Bank a security
interest;

         (e) Leases or subleases entered into in the ordinary course of
Borrower's business, including in connection with Borrower's leased premises or
leased property; and

                                       19
<PAGE>

         (f) Liens incurred in the extension, renewal or refinancing of the
indebtedness secured by Liens described in (a) through (c), but any extension,
renewal or replacement Lien must be limited to the property encumbered by the
existing Lien and the principal amount of the indebtedness may not increase.

         "PERSON" is any individual, sole proprietorship, partnership, limited
liability company, joint venture, company association, trust, unincorporated
organization, association, corporation, institution, public benefit corporation,
firm, joint stock company, estate, entity or government agency.

         "PRIME RATE" is Bank's most recently announced "prime rate," even if it
is not Bank's lowest rate.

         "QUICK ASSETS" is, as of any date of determination, the Borrower's
consolidated, unrestricted cash, unrestricted cash equivalents, and net trade
accounts receivable of Borrower, on a joint basis for all Borrowers.

         "RESPONSIBLE OFFICER" is each of the Chief Executive Officer, the Chief
Operating Officer, the Chief Financial Officer and the Controller of Borrower.

         "REVOLVING ADVANCE" or "REVOLVING ADVANCES" is a loan advance (or
advances) under the Committed Revolving Line.

         "REVOLVING MATURITY DATE" is December 24, 2003.

         "SCHEDULE" is any attached schedule of exceptions.

         "SUBORDINATED DEBT" is debt incurred by Borrower subordinated to
Borrower's indebtedness owed to Bank and which is reflected in a written
agreement in a manner and form acceptable to Bank and approved by Bank in
writing.

         "SUBSIDIARY" is for any Person, or any other business entity of which
more than 50% of the voting stock or other equity interests is owned or
controlled, directly or indirectly, by the Person or one or more Affiliates of
the Person.

         "TANGIBLE NET WORTH" is, on any date, the consolidated total assets of
Borrower and its Subsidiaries minus, without duplication, (i) any amounts
attributable to (a) goodwill, (b) intangible items such as unamortized debt
discount and expense, Patents, trade and service marks and names, Copyrights and
research and development expenses except prepaid expenses, and (c) reserves not
already deducted from assets, and (ii) Total Liabilities.

         "TERM LOAN ADVANCE" OR "TERM LOAN ADVANCE(S)" shall have the meaning
ascribed to such term in Section 2.1.4 hereof.

         "TERM LOAN MATURITY DATE" shall have the meaning ascribed to such term
in Section 2.1.4 hereof.

         "TOTAL LIABILITIES" is on any day, obligations that should, under GAAP,
be classified as liabilities on Borrower's consolidated balance sheet, including
all Indebtedness, and current portion Subordinated Debt allowed to be paid, but
excluding all other Subordinated Debt.

                                       20
<PAGE>

         "TRADEMARKS" are trademark and servicemark rights, registered or not,
applications to register and registrations and like protections, and the entire
goodwill of the business of Assignor connected with the trademarks.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the date first above
written.

                               BORROWER:
                               I-FLOW CORPORATION

                               By: _________________________________________
                               Title: Chairman, President and CEO

                               BORROWER:
                               SPINAL SPECIALITIES, INC.

                               By: __________________________________________
                               Title: President
                               BANK:
                               SILICON VALLEY BANK

                               By: _____________________________________
                               Title: ______________________________________

Effective Date: ___May 8, 2003_____________

                                       21

<PAGE>

                                    EXHIBIT A

         The Collateral consists of all of Borrower's right, title and interest
in and to all of Borrower's personal property, including without limitation the
following:

         All goods and equipment now owned or hereafter acquired, including,
without limitation, all machinery, fixtures, vehicles (including motor vehicles
and trailers), and any interest in any of the foregoing, and all attachments,
accessories, accessions, replacements, substitutions, additions, and
improvements to any of the foregoing, wherever located;

         All inventory, now owned or hereafter acquired, including, without
limitation, all merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products including such
inventory as is temporarily out of Borrower's custody or possession or in
transit and including any returns upon any accounts or other proceeds, including
insurance proceeds, resulting from the sale or disposition of any of the
foregoing and any documents of title representing any of the above;

         All contract rights and general intangibles now owned or hereafter
acquired, including, without limitation, goodwill, trademarks, servicemarks,
trade styles, trade names, patents, patent applications, leases, license
agreements, franchise agreements, blueprints, drawings, purchase orders,
customer lists, route lists, infringements, claims, computer programs, computer
discs, computer tapes, literature, reports, catalogs, design rights, income tax
refunds, payments of insurance and rights to payment of any kind;

         All now existing and hereafter arising accounts, contract rights,
royalties, license rights and all other forms of obligations owing to Borrower
arising out of the sale or lease of goods, the licensing of technology or the
rendering of services by Borrower, whether or not earned by performance, and any
and all credit insurance, guaranties, and other security therefor, as well as
all merchandise returned to or reclaimed by Borrower;

         All documents, cash, deposit accounts, securities, securities
entitlements, securities accounts, investment property, financial assets,
letters of credit, letter-of-credit rights, commercial tort claims, certificates
of deposit, instruments and chattel paper now owned or hereafter acquired and
Borrower's Books relating to the foregoing; and

         All copyright rights, copyright applications, copyright registrations
and like protections in each work of authorship and derivative work thereof,
whether published or unpublished, now owned or hereafter acquired; all trade
secret rights, including all rights to unpatented inventions, know-how,
operating manuals, license rights and agreements and confidential information,
now owned or hereafter acquired; all mask work or similar rights available for
the protection of semiconductor chips, now owned or hereafter acquired; all
claims for damages by way of any past, present and future infringement of any of
the foregoing; and

         All Borrower's Books relating to the foregoing and any and all claims,
rights and interests in any of the above and all substitutions for, additions
and accessions to and proceeds thereof.

<PAGE>

                                    EXHIBIT B

                        LOAN PAYMENT/ADVANCE REQUEST FORM
                DEADLINE FOR SAME DAY PROCESSING IS 12:00 P.S.T.

FAX TO: 949.789.1930                                     DATE: _________________

[ ] LOAN PAYMENT:

    From Account # ______________________          To Account # ________________
                     (Deposit Account #)                        (Loan Account #)

    Principal $ ______________________ and/or Interest $ ____________________

    All Borrower's representation and warranties in the Loan and Security
    Agreement are true, correct and complete in all material respects to on the
    date of the telephone transfer request for and advance, but those
    representations and warranties expressly referring to another date shall be
    true, correct and complete in all material respects as of the date:

    AUTHORIZED SIGNATURE: _________________________ Phone Number: ______________

[ ] LOAN ADVANCE:

    COMPLETE OUTGOING WIRE REQUEST SECTION BELOW IF ALL OR A PORTION OF THE
    FUNDS FROM THIS LOAN ADVANCE ARE FOR AN OUTGOING WIRE.

    From Account # _____________________       To Account # ____________________
                      (Loan Account #)                       (Deposit Account #)

    Amount of Advance $ ______________________

    All Borrower's representation and warranties in the Loan and Security
    Agreement are true, correct and complete in all material respects to on the
    date of the telephone transfer request for and advance, but those
    representations and warranties expressly referring to another date shall be
    true, correct and complete in all material respects as of the date:

    AUTHORIZED SIGNATURE: _____________________ Phone Number: __________________

[ ] OUTGOING WIRE REQUEST

    COMPLETE ONLY IF ALL OR A PORTION OF FUNDS FROM THE LOAN ADVANCE ABOVE ARE
    TO BE WIRED.

    Deadline for same day processing is 12:00pm, P.S.T.
    Beneficiary Name: ____________________    Amount of Wire: $ ________________
    Beneficiary Bank: ____________________    Account Number: __________________
    City and Sate: ________________________

    Beneficiary Bank Transit (ABA) #: ____________________ Beneficiary Bank Code
    (Swift, Sort, Chip, etc.):

                          (FOR INTERNATIONAL WIRE ONLY)

    Intermediary Bank: ___________________    Transit (ABA) #: _________________
    For Further Credit to: _____________________________________________________
    Special Instruction: _______________________________________________________

    By signing below, I (we) acknowledge and agree that my (our) funds transfer
    request shall be processed in accordance with and subject to the terms and
    conditions set forth in the agreements(s) covering funds transfer
    service(s), which agreements(s) were previously received and executed by me
    (us).

    Authorized Signature: ____________ 2nd Signature (If Required): ____________
    Print Name/Title: _______________________ Print Name/Title: ________________
    Telephone # _____________________________ Telephone # ______________________

<PAGE>

                                    EXHIBIT C

                           BORROWING BASE CERTIFICATE

<TABLE>
<CAPTION>
Borrower: I-Flow Corporation                                                        Bank: Silicon Valley Bank
          Spinal Specialities, Inc.                                                       3003 Tasman Drive
                                                                                          Santa Clara, CA 95054
<S>                                                                                 <C>
Commitment Amount: $4,000,000, subject to Usage Cap

ACCOUNTS RECEIVABLE

1.       ACCOUNTS RECEIVABLE BOOK VALUE AS OF______                                   $ _____________________

2.       ADDITIONS (PLEASE EXPLAIN ON REVERSE                                         $ _____________________

3.       TOTAL ACCOUNTS RECEIVABLE                                                    $ _____________________

ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication)

4.       AMOUNTS OVER 90 DAYS DUE                                                     $ _____________________

5.       BALANCE OF 50% OVER 90 DAY ACCOUNTS                                          $ _____________________

6.       CREDIT BALANCES OVER 90 DAYS                                                 $ _____________________

7.       CONCENTRATION LIMITS*                                                        $ _____________________

8.       FOREIGN ACCOUNTS (NOT INCLUDING PERMITTED EXCEPTIONS)                        $ _____________________

9.       GOVERNMENTAL ACCOUNTS                                                        $ _____________________

10.      CONTRA ACCOUNTS                                                              $

11.      PROMOTION OR DEMO ACCOUNTS                                                   $ _____________________

12.      INTERCOMPANY/EMPLOYEE ACCOUNTS                                               $ _____________________

13.      OTHER (PLEASE EXPLAIN ON REVERSE)                                            $ _____________________

14.      TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS                                         $ _____________________

15.      ELIGIBLE ACCOUNTS (#3 MINUS #14)                                             $ _____________________

16.      LOAN VALUE OF ACCOUNTS (80% OF #15)                                          $ _____________________

INVENTORY

17.      25% OF INVENTORY VALUE (LOWER OF COST OR MARKET) AS OF_____                  $ _____________________

18.      LOWER OF #17 OR $500K                                                        $ _____________________
</TABLE>

<PAGE>

<TABLE>
<S>                                                                                   <C>
BALANCES

19.      MAXIMUM LOAN AMOUNT, SUBJECT TO USAGE CAP                                    $ _____________________

20.      TOTAL FUNDS AVAILABLE [LESSER OF #19 OR (#16 + #18]                          $ _____________________

21.      PRESENT BALANCE OWING ON LINE OF CREDIT                                      $ _____________________

22.      OUTSTANDING UNDER SUBLIMITS (LC, MERCHANT SVCS)                              $ _____________________

23.      RESERVE POSITION (#20 MINUS (#21 AND #22))                                   $ _____________________
</TABLE>

I-Flow Corporation                                     Spinal Specialities, Inc.

By: ___________________                                By:______________________
Title:                                                 Title:

                                   Exhibit C

<PAGE>

                                    EXHIBIT D
                             COMPLIANCE CERTIFICATE

TO: SILICON VALLEY BANK
    3003 Tasman Drive
         Santa Clara, CA 95054

FROM: I-Flow Corporation
      Spinal Specialities, Inc.

         The undersigned authorized officer of I-Flow Corporation and Spinal
         Specialities, Inc. (jointly and severally the "Borrower") certifies
         that under the terms and conditions of the Loan and Security Agreement
         between Borrower and Bank (the "Agreement"), (i) Borrower is in
         complete compliance for the period ending _______________ with all
         required covenants except as noted below and (ii) all representations
         and warranties in the Agreement are true and correct in all material
         respects on this date. Attached are the required documents supporting
         the certification. The Officer certifies that these are prepared in
         accordance with Generally Accepted Accounting Principles (GAAP)
         consistently applied from one period to the next except as explained in
         an accompanying letter or footnotes. The Officer acknowledges that no
         borrowings may be requested at any time or date of determination that
         Borrower is not in compliance with any of the terms of the Agreement,
         and that compliance is determined on an ongoing basis and not just at
         the date this certificate is delivered.

PLEASE INDICATE COMPLIANCE STATUS BY CIRCLING YES/NO UNDER "COMPLIES" COLUMN.

<TABLE>
<CAPTION>
REPORTING COVENANT                                                    REQUIRED                                    COMPLIES
------------------                                                    --------                                    --------
<S>                                                           <C>                                                 <C>
Monthly consolidating financial statements + CC               Monthly within 30 days                               Yes No
10-Q, 10-K                                                    Within 5 days of SEC deadline                        Yes No
A/R & A/P Agings                                              Monthly within 20 days                               Yes No
A/R Audit                                                     Annual                                               Yes No
Borrowing Base Certificate                                    Monthly within 20 days                               Yes No
Inventory Report                                              Monthly within 20 days                               Yes No
</TABLE>

<TABLE>
<CAPTION>
FINANCIAL COVENANT                                              REQUIRED                  ACTUAL                  COMPLIES
------------------                                              --------                  ------                  --------
<S>                                                           <C>                       <C>                       <C>
Maintain (quarterly) for I-Flow Corporation on a
  consolidated basis::

  Minimum Quick Ratio                                         1.25:1.00                 _____:1.00                 Yes No
  Debt Service Ratio (annualized)                             1.50:1.00                 _____:1.00                 Yes No
   (beginning 12/31/03)
  Max. Net Loss                                               900K QE 3/03              $_________                 Yes No
                                                              1MM QE 6/03               $_________                 Yes No
                                                              800K QE 9/03              $_________                 Yes No
</TABLE>

Have there been updates to Borrower's intellectual
  property, if appropriate?                                   Yes / No

COMMENTS REGARDING EXCEPTIONS: See Attached.
Sincerely,

I-Flow Corporation
       Spinal Specialities, Inc.

By: _________________________
Title:

                                  BANK USE ONLY

        Received by:____________________________________________________________
               AUTHORIZED SIGNER
        Date:___________________________________________________________________
        Verified:_______________________________________________________________
               -AUTHORIZED SIGNER
        Date:___________________________________________________________________
        By:_____________________________________________________________________
Title:  Compliance Status:                        Yes         No

<PAGE>

                                   Exhibit 6.8

                   [List of Registered Intellectual Property]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00055-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00055-of-00352.parquet"}]]