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CITY NATIONAL BANK


                      SECOND AMENDMENT TO CREDIT AGREEMENT

     This Second Amendment to Credit Agreement is entered into as of May 7,
1998, by and between SPECTRUM MEDICAL INDUSTRIES, INC., a California corporation
and SPECTRUM LABORATORIES, INC., a California corporation ("Borrower") and CITY
NATIONAL BANK, a national banking association ("CNB").

                                    RECITALS

     A. Borrower and CNB are parties to that certain Credit Agreement, dated as
of February 28, 1997, as amended by that certain First Amendment to Credit
Agreement dated as of October 10, 1997, (the Credit Agreement, as herein
amended, hereinafter the "Credit Agreement").

     B. Borrower and CNB desire to supplement and amend the Credit Agreement as
hereinafter set forth.

     NOW, THEREFORE, the parties agree as follows:

1.   DEFINITIONS.  Capitalized terms used in this Amendment without definition
shall have the meanings set forth in the Credit Agreement.

2.   AMENDMENTS. The Credit Agreement is amended as follows:

     2.1     Delete the definition of "TERMINATION DATE" in its entirety and 
     replace it with:

             "TERMINATION DATE" means July 1, 1998. Notwithstanding the
             foregoing, CNB may, as its option, terminate this Agreement
             pursuant to Section 7.3; the date of any such termination will
             become the Termination Date as that term is used in this Agreement"

      2.2    Section 2.1.3 ADDITIONAL TERM LOAN PAYMENT. is amended by
             deleting the date "DECEMBER 1, 1997" from both the first sentence
             and the last sentence and replacing it with a new date of "JULY
             1, 1998" in both the first sentence and in the last sentence.

3.    EXISTING AGREEMENT. Except as expressly amended herein, the Credit
      Agreement shall remain in full force and effect, and in all other respects
      is affirmed.

4.    Conditions Precedent. This Amendment shall become effective upon the
      fulfillment of all of the following conditions to CNB's satisfaction:


      4.1    CNB shall have received this Amendment duly executed by Borrower 
             and


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acknowledged by the Guarantors.

5.    COUNTERPARTS. This Amendment may be executed in any number of
      counterparts, and all such counterparts taken together shall be deemed to
      constitute one and the same instrument.

6.    GOVERNING LAW. This Amendment and the rights and obligations of the
      parties hereto shall be construed in accordance with, and governed by the
      laws of the State of California.

      IN WITNESS WHEREOF, the parties have executed this Amendment as of the day
and year first above written.

"Borrower"                                   SPECTRUM MEDICAL INDUSTRIES, INC.,a
                                             California corporation

                                             By:  /s/ Roy T. Eddleman
                                                  ------------------------------
                                                  Roy T. Eddleman, Chairman/CEO


                                             SPECTRUM LABORATORIES, INC., a
                                             California corporation

                                             By:  /s/ Roy T. Eddleman
                                                  ------------------------------
                                                  Roy T. Eddleman, Chairman/CEO


"CNB"                                        CITY NATIONAL BANK, a national
                                             banking association

                                             By:  /s/ Roland Pascua
                                                  ------------------------------
                                                  Roland Pascua, Vice President






CONSENT OF GUARANTORS:


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     The undersigned have previously guaranteed the indebtedness of Spectrum
Medical Industries, Inc., a California corporation and Spectrum Laboratories,
Inc., a California corporation owed to CNB. The undersigned confirm that their
respective guaranties and the security given in connection therewith, if any,
shall continue in full force and effect and that each guaranty shall be a
separate and distinct obligation and apply to the indebtedness arising from the
Credit Agreement as amended herein, subject to the overall limitation as to the
amount guaranteed.

                                     /s/ Roy T. Eddleman
                                     ----------------------------
                                     Roy T. Eddleman

                                     Spectrum Molecular Separations, Inc., a
                                     Delaware corporation


                                     By: /s/ Roy T. Eddleman
                                        ------------------------------
                                        Roy T. Eddleman, Chairman/CEO


                                     HYDRO-MED PRODUCTS, INC., a
                                     Texas corporation

                                     By: /s/ Roy T. Eddleman
                                        ------------------------------
                                        Roy T. Eddleman, Chairman/CEO


                                     SLI ACQUISITION CORP., a
                                     Delaware corporation

                                     By: /s/ Roy T. Eddleman
                                        ------------------------------
                                        Roy T. Eddleman, Chairman/CEO


                                     SPECTRUM EUROPE B.V.,a
                                     Netherlands corporation
                                     By: /s/ Roy T. Eddleman
                                        ------------------------------
                                        Roy T. Eddleman, Chairman/CEO


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