<PAGE>

                       FIRST AMENDMENT TO CREDIT AGREEMENT


         This First Amendment to Credit Agreement ("First Amendment") is entered
into as of October 10, 1997, by and between SPECTRUM MEDICAL INDUSTRIES, INC., a
California corporation and SPECTRUM LABORATORIES, INC,, a California
corporation, (collectively "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 ("Agreement").

         B.   Borrower and CNB desire to supplement and amend the 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 Loan Agreement.

2.       AMENDMENTS.  The Agreement is amended as follows:

         2.1     Section 1. DEFINITIONS. is amended as follows:

         2.1.1   Delete the definition of "NOTE" in its entirety and add the
                 following new definition:

                 "NOTES" means the Notes referenced in Section 2."

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

                 ""TERMINATION DATE" means May 1, 1998. Notwithstanding the
                 foregoing, CNB may, at 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. LOANS. is amended as follows:

         2.2.1   Add the following new sections 2.1A, 2.1A.1, 2.1A.2, 2.1A.3 and
                 2.7 as follows:

                 "2.IA REVOLVING CREDIT LOANS. CNB agrees to make loans
                 ("Revolving Credit Loans") to Borrower up to, but not
                 including, the Termination Date, at Borrower's

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                 request, up to the amount of Five Hundred Thousand and No/100
                 Dollars ($500,000.00) (the "Revolving Credit Commitment"). The
                 Revolving Credit Loans may be repaid and reborrowed at any time
                 up to the Termination Date; provided, however, that the
                 aggregate unpaid principal amount of outstanding Revolving
                 Credit Loans will at no time exceed the Revolving Credit
                 Commitment. Borrower will have a period of not less than thirty
                 (30) consecutive days during the twelve-month period ending on
                 the Termination Date during which time there will be no
                 outstanding Revolving Credit Loans. All Revolving Credit Loans
                 will be paid by Borrower to CNB on the Termination Date. The
                 Revolving Credit Loans will be evidenced by a promissory note
                 ("Revolving Credit Note") in the form attached hereto as
                 Exhibit "B."

                     2.1A.1 INTEREST ON REVOLVING CREDIT LOINS. Each Revolving
                 Credit Loan will bear interest from disbursement until due
                 (whether at stated maturity, by acceleration or otherwise) at a
                 fluctuating rate equal to the Prime Rate plus one quarter
                 percent (0.25%) per annum. Interest will be payable monthly in
                 arrears on the first day of each month, starting on November 1,
                 1997, and on the date the Revolving Credit Loans are paid in
                 full.

                     2.1A.2 REVOLVING COMMITMENT Fee. Borrower shall pay CNB a
                 non-refundable fee ("Revolving Commitment Fee") equal to one
                 quarter percent (1/4%) of the Revolving Credit Commitment at
                 the time the Revolving Credit Commitment is extended to
                 Borrower.

                     2.1A.3 PROCEDURE FOR REVOLVING CREDIT LOANS. Each Revolving
                 Credit Loan may be made by CNB at the oral or written request
                 of anyone who is authorized in writing by Borrower to request
                 Revolving Credit Loans until written notice of the revocation
                 of such authority is received by CNB."

                 "2.7 CASH/SECURITIES COLLATERAL. Borrower agrees that the
                 aggregate principal amount of the Cash/Securities Collateral
                 shall at no time be less than One Million Sixty-Six Thousand
                 and No/100 Dollars ($1,066,000.00)."

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

         2.3     Section 4. REPRESENTATION AND WARRANTIES. is amended as
                 follows:

                 At the end of Section 4.8 USE OF PROCEEDS. add the following
                 sentence: "Borrower will use the proceeds of the Revolving
                 Credit Loans for Borrower's general working capital needs."

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<PAGE>


3.       CONDITIONS PRECEDENT. This Amendment shall become effective upon the
         fulfillment of all of the following conditions to CNB's satisfaction:

         3.1     CNB shall have received this Amendment duty executed by
                 Borrower;

         3.2     CNB shall have received the Revolving Credit Note duly executed
                 by Borrower; and

         3.3     CNB shall have received the non-refundable Revolving Commitment
                 Fee of $1,250.00.

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

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.

SPECTRUM MEDICAL INDUSTRIES, INC.,
a California corporation

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


SPECTRUM LABORATORIES, INC.,
a Califonia corporation

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


CITY NATIONAL BANK, a national banking association

By: /s/ Ben A. Sottile
    ----------------------------
    Ben A. Sottile, Vice President





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<PAGE>


GUARANTORS CONSENT

By:   /s/ Roy T. Eddleman
      ---------------------------------
      Roy T. Eddleman


SPECTRUM MOLECULAR SEPARATIONS, INC.

By:   /s/ Roy T. Eddleman
      ---------------------------------
      Roy T. Eddleman
Title: Chairman and Chief Executive Officer


HYDRO-MED PRODUCTS, INC.

By:   /s/ Roy T. Eddleman
      ---------------------------------
      Roy T. Eddleman
Title: Chairman and Chief Executive Officer


SLI ACQUISITION CORP.

By:   /s/ Roy T. Eddleman
      ---------------------------------
      Roy T. Eddleman
Title: Chairman and Chief Executive Officer


SPECTRUM EUROPE B.V.

By:   /s/ Roy T. Eddleman
      ---------------------------------
      Roy T. Eddleman
Title: Chairman and Chief Executive Officer





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                                                                       EXHIBIT B
                              REVOLVING CREDIT NOTE

$500,000.00
                                                           La Mirada, California
                                                                October 10, 1997

For Value Received, the undersigned, SPECTRUM MEDICAL INDUSTRIES, INC., A
CALIFORNIA CORPORATION AND SPECTRUM LABORATORIES, INC., A CALIFORNIA CORPORATION
("Borrower"), promises to pay on the Termination Date to the order of CITY
NATIONAL BANK, a national banking association ("CNB"), at its Office located at
14241 East Firestone Blvd., La Mirada, CA 90638-5568, the principal amount of
Five Hundred Thousand and no/100 DOLLARS ($500,000.00) or so much thereof as may
be advanced and be outstanding, with interest thereon to be computed on each
Revolving Credit Loan from the date of its disbursement at a rate computed on
the basis of a 360-day year, actual days elapsed, at the rates, times and in
accordance with the terms of that certain Credit Agreement between Borrower and
CNB, dated as of February 28, 1997, as may be amended from time to time (the
"Credit Agreement"). Capitalized terms not defined herein shall have the
meanings given them in that certain Credit Agreement.

     All or any portion of the principal of this Revolving Credit Note ("Note")
may be borrowed, repaid and reborrowed from time to time prior to the
Termination Date, provided at the time of any borrowing no default exists under
this Note and no Event of Default or Potential Event of Default exists under the
terms and conditions of the Credit Agreement and provided, further that the
total borrowings outstanding at any one time shall not exceed the Revolving
Credit Commitment. Each borrowing and repayment of a Revolving Credit Loan shall
be noted in the books and records of CNB. The excess of borrowings over
repayments as noted on such books and records shall constitute presumptive
evidence of the principal balance due hereon from time to time and at any time.

     If payment on this Note becomes due and payable on a non-business day, the
maturity thereof shall be extended to the next business day and, with respect to
payments of principal or interest thereon shall be payable during such extension
at the then applicable rate. Upon the occurrence of one or more of the Events of
Default specified in the Credit Agreement, all amounts remaining unpaid on this
Note may become or be declared to be immediately payable as provided in the
Credit Agreement, without presentment, demand or notice of dishonor, all of
which are expressly waived. Borrower agrees to pay all costs of collection of
this Note and reasonable attorneys' fees (including attorneys' fees allocable to
CNB's in-house counsel) in connection therewith, irrespective of whether suit is
brought thereon.

     This is the Revolving Credit Note referred to in the Credit Agreement and
is entitled to the benefits thereof.

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<PAGE>


                                                                       EXHIBIT B

     Upon CNB's written notice to Borrower of the occurrence of an Event of
Default, the outstanding principal balance (and interest, to the extent
permitted by law) shall bear additional interest from the date of such notice at
the rate of Five Percent (5.0%) per annum higher than the interest rate as
determined and computed above, and continuing thereafter until the Event of
Default is cured.


     This Note shall be governed by the laws of the State of California. If this
Note is executed by more than one Borrower, all obligations are joint and
several.


  "BORROWER"


  SPECTRUM MEDICAL INDUSTRIES, INC.,
  A CALIFORNIA CORPORATION

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

SPECTRUM LABORATORIES, INC.,
A CALIFORNIA CORPORATION

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


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