<PAGE>

                     AMENDED AND RESTATED BUSINESS LOAN AGREEMENT

BORROWER:     Laserscope                 LENDER:      Silicon Valley Bank
              3052 Orchard Drive                      Santa Clara Technology
              San Jose, CA 95134                      3003 Tasman Drive
                                                      Santa Clara, CA 96064
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THIS AMENDED AND RESTATED BUSINESS LOAN AGREEMENT BETWEEN LASERSCOPE
("BORROWER") AND SILICON VALLEY BANK ("LENDER") IS MADE AND EXECUTED ON THE
FOLLOWING TERMS AND CONDITIONS.  BORROWER HAS RECEIVED PRIOR COMMERCIAL LOANS
FROM LENDER OR HAS APPLIED TO LENDER FOR A COMMERCIAL LOAN OR LOANS AND OTHER
FINANCIAL ACCOMMODATIONS, INCLUDING THOSE WHICH MAY BE DESCRIBED ON ANY EXHIBIT
OR SCHEDULE ATTACHED TO THIS AGREEMENT.  ALL SUCH LOANS AND FINANCIAL
ACCOMMODATIONS, TOGETHER WITH ALL FUTURE LOANS AND FINANCIAL ACCOMMODATIONS FROM
LENDER TO BORROWER, ARE REFERRED TO IN THIS AGREEMENT INDIVIDUALLY AS THE "LOAN"
AND COLLECTIVELY AS THE "LOANS." BORROWER UNDERSTANDS AND AGREES THAT: (A) IN
GRANTING, RENEWING, OR EXTENDING ANY LOAN, LENDER IS RELYING UPON BORROWER'S
REPRESENTATIONS, WARRANTIES, AND AGREEMENTS, AS SET FORTH IN THIS AGREEMENT; (B)
THE GRANTING, RENEWING, OR EXTENDING OF ANY LOAN BY LENDER AT ALL TIMES SHALL BE
SUBJECT TO LENDER'S SOLE JUDGMENT AND DISCRIMINATION; AND (C) ALL SUCH LOANS
SHALL BE AND SHALL REMAIN SUBJECT TO THE FOLLOWING TERMS AND CONDITIONS OF THIS
AGREEMENT.

TERM.  This Agreement shall be effective as of March 18, 1996, and shall
continue thereafter until all Indebtedness of Borrower to Lender has been
performed in full and the parties terminate this Agreement in writing.

DEFINITIONS.  The following words shall have the following meanings when used in
this Agreement.  Terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code.  All
references to dollar amounts shall mean amounts in lawful money of the United
States of America.

    AGREEMENT.   The word "Agreement means this Amended and Restated Business
    Loan Agreement, as this Amended and Restated Business Loan Agreement as it
    amends and restates that certain Business Loan Agreement dated June 7,
    1991, may be amended or modified from time to time, together with all
    exhibits and schedules attached to this Amended and Restated Business Loan
    Agreement from time to time.

    BORROWER.  The word "Borrower" means Laserscope.  The word "Borrower" also
    includes, as applicable, all subsidiaries and affiliates of Borrower as
    provided below in the paragraph titled "Subsidiaries and Affiliates."

    CERCLA.  The word "CERCLA" means the Comprehensive Environmental Response,
    Compensation, and Liability Act of 1980, as amended.

    CASH FLOW.  The words "Cash Flow" mean net income after taxes, and
    exclusive of extraordinary gains and income, plus depreciation and
    amortization.

    COLLATERAL.  The word "Collateral" means and includes without limitation
    all property and assets granted as collateral security for a Loan, whether
    real or personal property, whether granted directly or indirectly, whether
    granted now or in the future, and whether granted in the form of a security
    interest, mortgage, deed of trust, assignment, pledge, chattel mortgage,
    chattel trust, factor's lien, equipment trust, conditional sale, trust
    receipt, lien, charge, lien or title retention contract, lease or
    consignment intended as a security device, or any other security or lien
    interest whatsoever, whether created by law, contract, or otherwise.

    DEBT.  The word "Debt" means all of Borrower's liabilities excluding
    Subordinated Debt.

    ERISA.  The word "ERISA" means the Employee Retirement Income Security Act
    of 1974, as amended.

    EVENT OF DEFAULT.  The words "Event of Default" mean and include without
    limitation any of the Events of Default set forth below in the section
    titled "EVENTS OF DEFAULT."

    GRANTOR.  The word "Grantor" means and includes without limitation each and
    all of the persons or entities granting a Security Interest in any
    Collateral for the Indebtedness, including without limitation all Borrowers
    granting such a Security Interest.

    GUARANTOR.  The word "Guarantor" means and includes without limitation each
    and all of the guarantors, sureties, and accommodation parties in
    connection with any Indebtedness.

    INDEBTEDNESS.  The word "Indebtedness" means and includes without
    limitation all Loans, together with all other obligations, debts and
    liabilities of Borrower to Lender, or any one or more of them, as well as
    all claims by Lender against Borrower, or any one or more of them; whether
    now or hereafter existing, voluntary or involuntary, due or not due,
    absolute or contingent, liquidated or unliquidated; whether Borrower may be
    liable individually or jointly with others; whether Borrower may be
    obligated as a guarantor, surety, or otherwise; whether recovery upon such
    Indebtedness may be or hereafter may become barred by any statute of
    limitations; and whether such Indebtedness may be or hereafter may become
    otherwise unenforceable.

    LENDER.  The word "Lender" means Silicon Valley Bank, its successors and
    assigns.

    LINE OF CREDIT.  The words "Line of Credit" mean and refer to that certain
    Amended and Restated Promissory Note of even date herewith.

    LIQUID ASSETS.  The words "Liquid Assets" mean Borrower's cash on hand plus
    Borrower's receivables.

    LOAN.  The word "Loan" or "Loans" means and includes without limitation any
    and all commercial loans and financial accommodations from Lender to
    Borrower, whether now or hereafter existing, and however evidenced,
    including without limitation those loans and financial accommodations
    described herein or described on any exhibit or schedule attached to this
    Agreement from time to time.

<PAGE>

                     AMENDED AND RESTATED BUSINESS LOAN AGREEMENT
                                     (CONTINUED)

    NOTE.  The word "Note" means and includes without limitation Borrower's
    promissory note or notes, if any, evidencing Borrower's Loan obligations in
    favor of Lender, as well as any substitute, replacement or refinancing note
    or notes therefor.

PERMITTED LIENS.  The words "Permitted Liens" mean: (a) liens and security
interests securing Indebtedness owed by Borrower to Lender; (b) liens for taxes,
assessments, or similar charges either not yet due or being contested in good
faith; (c) liens of materialmen, mechanics, warehousemen, or carriers, or other
like liens arising in the ordinary course of business and securing obligations
which are not yet delinquent; (d) purchase money liens or

    purchase money security interests upon or in any property acquired or held
    by Borrower in the ordinary course of business to secure indebtedness
    outstanding on the date of this Agreement or permitted to be incurred under
    the paragraph of this Agreement titled "Indebtedness and Liens"; (e) liens
    and security interests which, as of the date of this Agreement, have been
    disclosed to and approved by the Lender in writing; and (f) those liens and
    security interests which in the aggregate constitute an immaterial and
    insignificant monetary amount with respect to the net value of Borrower's
    assets.

    RELATED DOCUMENTS.  The words "Related Documents" mean and include without
    limitation all promissory notes, credit agreements, loan agreements,
    environmental agreements, guaranties, security agreements, mortgages, deeds
    of trust, and all other instruments, agreements and documents, whether now
    or hereafter existing, executed in connection with the Indebtedness.

    SECURITY AGREEMENT.  The words "Security Agreement" mean and include
    without limitation any agreements, promises, covenants, arrangements,
    understandings or other agreements, whether created by law, contract, or
    otherwise, evidencing, governing, representing, or creating a Security
    Interest.

    SECURITY INTEREST.  The words "Security Interest" mean and include without
    limitation any type of collateral security, whether in the form of a lien,
    charge, mortgage, deed of trust, assignment, pledge, chattel mortgage,
    chattel trust, factor's lien, equipment trust, conditional sale, trust
    receipt, lien or title retention contract, lease or consignment intended as
    a security device, or any other security or lien interest whatsoever,
    whether created by law, contract, or otherwise.

    SARA.  The word "Sara" means the Superfund Amendments and Reauthorization
    Act of 1986 as now or hereafter amended.

    SUBORDINATED DEBT.  The words "Subordinated Debt" mean Indebtedness and
    liabilities of Borrower which have been subordinated by written agreement
    to Indebtedness owed by Borrower to Lender in form and substance acceptable
    to Lender.

    TANGIBLE NET WORTH.  The words "Tangible Net Worth" mean Borrower's total
    assets excluding all intangible assets (i.e., goodwill, trademarks,
    patents, copyrights, organizational expenses, and similar intangible items,
    but including leaseholds and leasehold improvements) less total Debt.

    WORKING CAPITAL.  The words "Working Capital" mean Borrower's current
    assets, excluding prepaid expenses, less Borrower's current liabilities.

CONDITIONS PRECEDENT TO EACH ADVANCE.  Lender's obligation to make the initial
Loan Advance and each subsequent Loan Advance under this Agreement shall be
subject to the fulfillment to Lender's satisfaction of all of the conditions set
forth in this Agreement and in the Related Documents.

    ACCOUNTS RECEIVABLE AUDIT.  Lender shall perform an audit of Borrower's
    accounts receivable, with results satisfactory to Lender, prior to any
    advance under the Line of Credit.  Borrower's deposit account shall be
    debited for the audit expense and notification shall be mailed to Borrower.

    NOTIFICATION.  Borrower shall provide to Lender, not later than forty-five
    (45) days prior to any advance under the Note, written notification of
    Borrower's intent to make such advance.  Upon any Advance request, the Line
    of Credit shall be transferred to Commercial Finance Department.

    LOAN DOCUMENTS.  Borrower shall provide to Lender in form satisfactory to
    Lender the following documents for the Loan: (a) the Note, (b) Security
    Agreements granting to Lender security interests in the Collateral, (c)
    Financing Statements perfecting Lender's Security Interests; (d) evidence
    of insurance as required below; and (e) any other documents required under
    this Agreement or by Lender or its counsel.

    BORROWER'S AUTHORIZATION.  Borrower shall have provided in form and
    substance satisfactory to Lender properly certified resolutions, duly
    authorizing the execution and delivery of this Agreement, the Note and the
    Related Documents, and such other authorizations and other documents and
    instruments as Lender or its counsel, in their sole discretion, may
    require.

    PAYMENT OF FEES AND EXPENSES.  Borrower shall have paid to Lender all fees,
    charges, and other expenses which are then due and payable as specified in
    this Agreement or any Related Document.

    REPRESENTATIONS AND WARRANTIES.  The representations and warranties set
    forth in this Agreement, in the Related Documents, and in any document or
    certificate delivered to Lender under this Agreement are true and correct.

    NO EVENT OF DEFAULT.  There shall not exist at the time of any Advance a
    condition which would constitute an Event of Default under this Agreement.

REPRESENTATIONS AND WARRANTIES.  Borrower represents and warrants to Lender, as
of the date of this Agreement, as of the date of each disbursement of Loan
proceeds, as of the date of any renewal, extension or modification of any Loan,
and at all times any Indebtedness exists:

    ORGANIZATION.  Borrower is a corporation which is duly organized, validly
    existing, and in good standing under the laws of the State of California
    and is validly existing and in good standing in all states in which
    Borrower is doing business.  Borrower has the full power and authority to
    own its properties and to transact the businesses in which it is presently
    engaged or presently proposes to engage.  Borrower also is duly qualified
    as a foreign corporation and is in good standing in all states in which the
    failure to so qualify would have a material adverse effect on its
    businesses or financial condition.

    AUTHORIZATION.  The execution, delivery, and performance of this Agreement
    and all Related Documents by Borrower, to the extent to be executed,
    delivered or performed by Borrower, have been duly authorized by all
    necessary action by Borrower; do not require the consent or approval of any
    other person, regulatory authority or governmental body; and do not
    conflict with, result in a violation of, or constitute a default under (a)
    any provision of its


                                          2

<PAGE>

                     AMENDED AND RESTATED BUSINESS LOAN AGREEMENT
                                     (Continued)


articles of incorporation or organization, or bylaws, or any agreement or other
instrument binding upon Borrower or (b) any law, governmental regulation, court
decree, or order applicable to Borrower.

FINANCIAL INFORMATION.  Each financial statement of Borrower supplied to Lender
truly and completely disclosed Borrower's financial condition as of the date of
the statement, and there has been no material adverse change in Borrower's
financial condition subsequent to the date of the most recent financial
statement supplied to Lender.  Borrower has no material contingent 
obligations except as disclosed in such financial statements.

LEGAL EFFECT.  This Agreement constitutes, and any instrument or agreement
required hereunder to be given by Borrower when delivered will constitute,
legal, valid and binding obligations of Borrower enforceable against Borrower
in accordance with their respective terms.

PROPERTIES.   Except as contemplated by this Agreement or as previously
disclosed in Borrower's financial statements or in writing to Lender and as
accepted by Lender, and except for property tax liens for taxes not presently
due and payable, Borrower owns and has good title to all of Borrower's 
properties free and clear of all Security Interests, and has not executed any
security documents or financing statements relating to such properties.  All
of Borrower's properties are titled in Borrower's legal name, and Borrower
has not used, or filed a financing statement under, any other name for at
least the last five (5) years.

HAZARDOUS SUBSTANCES.  The terms "hazardous waste," "hazardous substance," 
"disposal," "release," and "threatened release," as used in this Agreement,
shall have the same meanings as set forth in the "CERCLA," "SARA," the 
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the
Resource Conservation and Recovery Act, 49 U.S.C. Section 6901, et seq., 
Chapters 6.5 through 7.7 of Division 20 of the California Health and Safety
Code, Section 25100, et seq., or other applicable state or Federal laws, 
rules, or regulations adopted pursuant to any of the foregoing.  Except as 
disclosed to and acknowledged by Lender in writing, Borrower represents and 
warrants that: (a) During the period of Borrower's ownership of the 
properties, there has been no use, generation, manufacture, storage, 
treatment, disposal, release or threatened release of any hazardous waste or
substance by any person on, under, about or from any of the properties. (b) 
Borrower has no knowledge of, or reason to believe that there has been (i) 
any use, generation, manufacture, storage, treatment, disposal, release, or 
threatened release of any hazardous waste or substance on, under, about or 
from the properties by any prior owners or occupants of any of the 
properties, or (ii) any actual or threatened litigation or claims of any kind 
by any person relating to such matters. (c) Neither Borrower nor any tenant, 
contractor, agent or other authorized user of any of the properties shall 
use, generate, manufacture, store, treat, dispose of, or release any 
hazardous waste or substance on, under, about or from any of the properties; 
and any such activity shall be conducted in compliance with all applicable 
federal, state, and local laws, regulations, and ordinances, including 
without limitation those laws, regulations and ordinances described above.  
Borrower authorizes Lender and its agents to enter upon the properties to 
make such inspections and tests as Lender may deem appropriate to determine 
compliance of the properties with this section of the Agreement.  Any 
inspections or tests made by Lender shall be at Borrower's expense and for 
Lender's purposes only and shall not be construed to create any 
responsibility or liability on the part of Lender to Borrower or to any other 
person.  The representations and warranties contained herein are based on 
Borrower's due diligence in investigating the properties for hazardous waste 
and hazardous substances.  Borrower hereby (a) releases and waives any future 
claims against Lender for indemnity or contribution in the event Borrower 
becomes liable for cleanup or other costs under any such laws, and (b) agrees 
to indemnify and hold harmless Lender against any and all claims, losses, 
liabilities, damages, penalties, and expenses which Lender may directly or 
indirectly sustain or suffer resulting from a breach of this section of the 
Agreement or as a consequence of any use, generation, manufacture, storage, 
disposal, release or threatened release occurring prior to Borrower's 
ownership or interest in the properties, whether or not the same was or 
should have been known to Borrower. The provisions of this section of the 
Agreement, including the obligation to indemnify, shall survive the payment 
of the Indebtedness and the termination or expiration of this Agreement and 
shall not be affected by Lender's acquisition of any interest in any of the 
properties, whether by foreclosure or otherwise.

LITIGATION AND CLAIMS.  No litigation, claim, investigation, administrative
proceeding or similar action (including those for unpaid taxes) against Borrower
is pending or threatened, and no other event has occurred which may materially
adversely affect Borrower's financial condition or properties, other than
litigation, claims, or other events, if any, that have been disclosed to and
acknowledged by Lender in writing.

TAXES.  To the best of Borrower's knowledge, all tax returns and reports of
Borrower that are or were required to be filed, have been filed, and all taxes,
assessments and other governmental charges have been paid in full, except those
presently being or to be contested by Borrower in good faith in the ordinary
course of business and for which adequate reserves have been provided.

LIEN PRIORITY.  Unless otherwise previously disclosed to Lender in writing,
Borrower has not entered into or granted any Security Agreements, or permitted
the filing or attachment of any Security Interests on or affecting any of the
Collateral directly or indirectly securing repayment of Borrower's Loan and
Note, that would be prior or that may in any way be superior to Lender's
Security Interests and rights in and to such Collateral.

BINDING EFFECT.  This Agreement, the Note, all Security Agreements directly or
indirectly securing repayment of Borrower's Loan and Note and all of the Related
Documents are binding upon Borrower as well as upon Borrower's successors,
representatives and assigns, and are legally enforceable in accordance with
their respective terms.

COMMERCIAL PURPOSES.  Borrower intends to use the Loan proceeds solely for
business or commercial related purposes.

EMPLOYEE BENEFIT PLANS.  Each employee benefit plan as to which Borrower may
have any liability complies in all material respects with all applicable
requirements of law and regulations, and (i) no Reportable Event nor Prohibited
Transaction (as defined in ERISA) has occurred with respect to any such plan,
(ii) Borrower has not withdrawn from any such plan or initiated steps to do so,
and (iii) no steps have been taken to terminate any such plan.

INVESTMENT COMPANY ACT.  Borrower is not an "investment company" or a company
"controlled" by an "investment company", within the meaning of the Investment
Company Act of 1940, as amended.

PUBLIC UTILITY HOLDING COMPANY ACT.  Borrower is not a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company", within the meaning
of the Public Utility Holding Company Act of 1935, as amended.

REGULATIONS G, T AND U. Borrower is not engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulations G, T and
U of the Board of Governors of the Federal Reserve System).


                                          3

<PAGE>

                     AMENDED AND RESTATED BUSINESS LOAN AGREEMENT
                                     (Continued)

    LOCATION OF BORROWER'S OFFICES AND RECORDS.  Borrower's place of business,
    or Borrower's Chief executive office, if Borrower has more than one place
    of business, is located at 3052 Orchard Drive, San Jose, CA 95134.  Unless
    Borrower has designated otherwise in writing this location is also the
    office or offices where Borrower keeps its records concerning the
    Collateral.

    INFORMATION.  All information heretofore or contemporaneously herewith
    furnished by Borrower to Lender for the purposes of or in connection with
    this Agreement or any transaction contemplated hereby is, and all
    information hereafter furnished by or on behalf of Borrower to Lender will
    be, true and accurate in every material respect on the date as of which
    such information is dated or certified; and none of such information is or
    will be incomplete by omitting to state any material fact necessary to make
    such information not misleading.

    CLAIMS AND DEFENSES.  There are no defenses or counterclaims, offsets or
    other adverse claims, demands or actions of any kind, personal or
    otherwise, that Borrower, Grantor, or any Guarantor could assert with
    respect to the Note, Loan, Indebtedness, this Agreement, or the Related
    Documents.

    SURVIVAL OF REPRESENTATIONS AND WARRANTIES.  Borrower understands and
    agrees that Lender, without independent investigation, is relying upon the
    above representations and warranties in extending Loan Advances to
    Borrower.  Borrower further agrees that the foregoing representations and
    warranties shall be continuing in nature and shall remain in full force and
    effect until such time as Borrower's Indebtedness shall be paid in full, or
    until this Agreement shall be terminated in the manner provided above,
    whichever is the last to occur.

AFFIRMATIVE COVENANTS.  Borrower covenants and agrees with Lender that, while
this Agreement is in effect, Borrower will:

    LITIGATION.  Promptly inform Lender in writing of (a) all material adverse
    changes in Borrower's financial condition, and (b) all existing and all
    threatened litigation, claims, investigations, administrative proceedings
    or similar actions affecting Borrower or any Guarantor which could
    materially affect the financial condition of Borrower or the financial
    condition of any Guarantor.

    FINANCIAL RECORDS.  Maintain its books and records in accordance with
    generally accepted accounting principles, applied on a consistent basis,
    and permit Lender to examine and audit Borrower's books and records at all
    reasonable times.

    FINANCIAL STATEMENTS.  Furnish Lender with, as soon as available, but in no
    event later than five (5) days after filing with the Securities and
    Exchange Commission, Borrower's forms 10K and 10Q.  All financial reports
    required to be provided under this Agreement shall be prepared in
    accordance with generally accepted accounting principles, applied on a
    consistent basis, and certified by Borrower as being true and correct.

    ACCOUNTS RECEIVABLE AND ACCOUNTS PAYABLE.  Provide to Lender not later than
    45 days after and as of the end of each quarter, an aged list of accounts
    receivable and accounts payable.  In the event there are outstandings under
    the Note, Borrower shall provide to Lender not later than 20 days after and
    as of the end of each month, a borrowing base certificate, in addition to
    an aged list of accounts receivable and accounts payable.

    COMPLIANCE CERTIFICATE.  Unless waived in writing by Lender, provide Lender
    quarterly, within fifty (50) days and at the time of each disbursement of
    Loan proceeds with a certificate executed by Borrower's chief financial
    officer, or other officer or person acceptable to Lender, certifying that
    the representations and warranties set forth in this Agreement are true and
    correct as of the date of the certificate and further certifying that, as
    of the date of the certificate, no Event of Default exists under this
    Agreement.

    ADDITIONAL INFORMATION.  Furnish such additional information and
    statements, lists of assets and liabilities, agings of receivables and
    payables, inventory schedules, budgets, forecasts, tax returns, and other
    reports with respect to Borrower's financial condition and business
    operations as Lender may request from time to time.

    FINANCIAL COVENANTS AND RATIOS.  Comply with the following covenants and
    ratios: Maintain on a quarterly basis, beginning with the quarter ended
    March 31, 1996, a minimum quick ratio of 1.1O to 1.00; a minimum tangible
    net worth of $16,000,000.00, plus 75% of net income (exclusive of losses)
    and 100% of new equity; a maximum total debt minus subordinated debt to
    tangible net worth plus subordinated debt ratio of 0.75 to 1.00.
    Furthermore, Borrower may incur one quarterly loss not to exceed
    $300,000.00, provided, Borrower shall achieve profitability on a quarterly
    and annual basis.

    Except as provided above, all computations made to determine compliance
    with the requirements contained in this paragraph shall be made in
    accordance with generally accepted accounting principles, applied on a
    consistent basis, and certified by Borrower as being true and correct.

    FOREIGN EXCHANGE SUBLIMIT.  Subject to the terms of this Agreement, as
    amended from time to time, Borrower may utilize up to $2,000,000.00 for
    spot and future foreign exchange contracts (the "Exchange Contracts").  All
    Exchange Contracts must provide for delivery of settlement on or before the
    Maturity Date, as set forth in the Note.  The limit available at any time
    shall be reduced by the following amounts (the "Foreign Exchange Reserve")
    on each day (the "Determination Date"): (i) on all outstanding Exchange
    Contracts on which delivery is to be effected or settlement allowed more
    than two business days from the Determination Date, 10% of the gross amount
    of the Exchange Contracts; plus (ii) on all outstanding Exchange Contracts
    on which delivery is to be effected or settlement allowed within two
    business days after the Determination Date, 100% of the gross amount of the
    Exchange Contracts.  In lieu of the Foreign Exchange Reserve for 100% of
    the gross amount of any Exchange Contract, the Borrower may request that
    Lender debit Borrower's bank account with Lender for such amount, provided
    Borrower has immediately available funds in such amounts in its bank
    account.

    Lender may, in its discretion, terminate the Exchange Contracts at any time
    (a) that an Event of Default occurs or (b) that there is no sufficient
    availability under the Note and Borrower does not have available funds in
    its bank account to satisfy the Foreign Exchange Reserve.  If Lender
    terminates the Exchange Contracts, and without limitation of the FX
    Indemnity Provisions (as referred to below), Borrower agrees to reimburse
    Lender for any and all fees, costs and expenses relating thereto or arising
    in connection therewith.

    Borrower shall not permit the total gross amount of all Exchange Contracts
    on which delivery is to be effected and settlement allowed in any two
    business day period to be more than $1,000,000.00 nor shall Borrower permit
    the total gross amount of all Exchange Contracts to which Borrower is a
    party, outstanding at any one time, to exceed $1,000,000.00.


                                          4

<PAGE>

                     AMENDED AND RESTATED BUSINESS LOAN AGREEMENT
                                     (Continued)

    Borrower shall execute all standard form applications and agreements of
    Lender in connection with the Exchange contracts, and without limiting any
    of the terms of such applications and agreements, Borrower will pay all
    standard fees and charges of Lender in connection with the Exchange
    Contracts.  Without limiting any of the other terms of the Loan Agreement
    or any such standard form applications and agreement of Lender, Borrower
    agrees to indemnify Lender and hold it harmless, from and against any and
    all claims, debts, liabilities, demands, obligations, actions, costs and
    expenses (including, without limitation, attorneys fees of counsel of
    Lender's choice), of every nature and description which it may sustain  or
    incur, based  upon, arising out of, or in any way relating to any of the
    Exchange Contracts or any transactions relating thereto or contemplated
    thereby (collectively referred to as the "FX Indemnity Provisions").

    LETTER OF CREDIT SUBLIMIT.  Subject to the terms and conditions of this
    Agreement, as may be amended from time to time, Lender agrees to issue or
    cause to be issued under the Note standby and commercial letters of credit
    for the account of Borrower in an aggregate face amount not to exceed One
    Million and 00/100 Dollars ($1,000,000.00). Each such letter of credit
    shall have an expiry date of ninety (90) days later than the Maturity Date,
    as set forth in the Note, provided that Borrower's letter of credit
    reimbursement obligation shall be secured by cash on terms acceptable to
    Lender at any time after the Maturity Date if the term of this Agreement is
    not extended by Lender.  All such letters of credit shall be, in form and
    substance, acceptable to Lender in its sole discretion and shall be subject
    to the terms and conditions of Lender's form of application and letter of
    credit agreement.

    INSURANCE.  Maintain fire and other risk insurance, public liability
    insurance, and such other insurance as Lender may require with respect to
    Borrower's properties and operations, in form, amounts, coverages and with
    insurance companies reasonably acceptable to Lender.  Borrower, upon
    request of Lender, will deliver to Lender from time to time the policies or
    certificates of insurance in form satisfactory to Lender, including
    stipulations that coverages will not be canceled or diminished without at
    least ten (10) days' prior written notice to Lender.  Each insurance policy
    also shall include an endorsement providing that coverage in favor of
    Lender will not be impaired in any way by any act, omission or default of
    Borrower or any other person.  In connection with all policies covering
    assets in which Lender holds or is offered a security interest for the
    Loans, Borrower will provide Lender with such loss payable or other
    endorsements as Lender may require.

    INSURANCE REPORTS.  Furnish to Lender, upon request of Lender, reports on
    each existing insurance policy showing such information as Lender may
    reasonably request, including without limitation the following: (a) the
    name of the insurer; (b) the risks insured; (c) the amount of the policy;
    (d) the properties insured; (e) the then current property values on the
    basis of which insurance has been obtained, and the manner of determining
    those values; and (f) the expiration date of the policy.  In addition, upon
    request of Lender (however not more often than annually), Borrower will
    have an independent appraiser satisfactory to Lender determine, as
    applicable, the actual cash value or replacement cost of any Collateral. 
    The cost of such appraisal shall be paid by Borrower.

    OTHER AGREEMENTS.  Comply with all terms and conditions of all other
    agreements, whether now or hereafter existing, between Borrower and any
    other party and notify Lender immediately in writing of any default in
    connection with any other such agreements.

    LOAN PROCEEDS.  Use all Loan proceeds solely for Borrower's business
    operations, unless specifically consented to the contrary by Lender in
    writing.

    TAXES, CHARGES AND LIENS.  Pay and discharge when due all of its
    indebtedness and obligations, including without limitation all assessments,
    taxes, governmental charges, levies and liens, of every kind and nature,
    imposed upon Borrower or its properties, income, or profits, prior to the
    date on which penalties would attach, and all lawful claims that, if
    unpaid, might become a lien or charge upon any of Borrower's properties,
    income, or profits.  Provided however, Borrower will not be required to pay
    and discharge any such assessment, tax, charge, levy, lien or claim so long
    as (a) the legality of the same shall be contested in good faith by
    appropriate proceedings, and (b) Borrower shall have established on its
    books adequate reserves with respect to such contested assessment, tax,
    charge, levy, lien, or claim in accordance with generally accepted
    accounting practices.  Borrower, upon demand of Lender, will furnish to
    Lender evidence of payment of the assessments, taxes, charges, levies,
    liens and claims and will authorize the appropriate governmental official
    to deliver to Lender at any time a written statement of any assessments,
    taxes, charges, levies, liens and claims against Borrower's properties,
    income, or profits.

    PERFORMANCE.  Perform and comply with all terms, conditions, and provisions
    set forth in this Agreement and in the Related Documents in a timely
    manner, and promptly notify Lender if Borrower learns of the occurrence of
    any event which constitutes an Event of Default under this Agreement or
    under any of the Related Documents.

    OPERATIONS.  Maintain executive and management personnel with substantially
    the same qualifications and experience as the present executive and
    management personnel; provide written notice to Lender of any change in
    executive and management personnel; conduct its business affairs in a
    reasonable and prudent manner and in compliance with all applicable
    federal, state and municipal laws, ordinances, rules and regulations
    respecting its properties, charters, businesses and operations, including
    without limitation, compliance with the Americans With Disabilities Act and
    with all minimum funding standards and other requirements of ERISA and
    other laws applicable to Borrower's employee benefit plans.

    ENVIRONMENTAL STUDIES.  Promptly conduct and complete, at Borrower's
    expense, all such investigations, studies, samplings and testings as may be
    requested by Lender or any governmental authority relative to any substance
    defined as toxic or a hazardous substance under any applicable federal,
    state, or local law, rule, regulation, order or directive, or any waste or
    by-product thereof, at or affecting any property or any facility owned,
    leased or used by Borrower.


    INSPECTION.  Permit employees or agents of Lender at any reasonable time to
    inspect any and all Collateral for the Loan or Loans and Borrower's other
    properties and to examine or audit Borrower's books, accounts, and records
    and to make copies and memoranda of Borrower's books, accounts, and 
    records.  If Borrower now or at any time hereafter maintains any records
    (including without limitation computer generated records and computer 
    software programs for the generation of such records) in the possession of
    a third party, Borrower, upon request of Lender, shall notify such party
    to permit Lender free access to such records at all reasonable times and
    to provide Lender with copies of any records it may request, all at 
    Borrower's expense.

    ENVIRONMENTAL COMPLIANCE AND REPORTS.  Borrower shall comply in all
    respects with all environmental protection federal, state and local laws,
    statutes, regulations and ordinances; not cause or permit to exist, as a
    result of an intentional or unintentional action or omission on its part or
    on the part of any third party, on property owned and/or occupied by
    Borrower, any environmental activity where damage may result to the
    environment,


                                          5

<PAGE>

                     AMENDED AND RESTATED BUSINESS LOAN AGREEMENT
                                     (Continued)

    unless such environmental activity is pursuant to and in compliance with
    the conditions of a permit issued by the appropriate federal, state or
    local governmental authorities; shall furnish to Lender promptly and in
    any event within thirty (30) days after receipt thereof a copy of any
    notice, summons, lien, citation, directive, letter or other communication
    from any governmental agency or instrumentality concerning any intentional
    or unintentional action or omission on Borrower's part in connection with
    any environmental activity whether or not there is damage to the 
    environment and/or other natural resources.

    ADDITIONAL  ASSURANCES.  Make,  execute  and  deliver  to  Lender  such 
    promissory  notes,  mortgages,  deeds  of  trust,  security  agreements,  
    financing statements, instruments, documents and other agreements as Lender
    or its attorneys may reasonably request to evidence and secure the Loans
    and to perfect all Security Interests.

NEGATIVE COVENANTS.  Borrower covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent of
Lender:

    INDEBTEDNESS AND LIENS. (a) Except for trade debt incurred in the normal
    course of business and indebtedness to Lender contemplated by this
    Agreement, in excess of $1,500,000.00, create, incur or assume indebtedness
    for borrowed money, including capital leases, (b) except as allowed as a
    Permitted Lien, sell, transfer, mortgage, assign, pledge, lease, grant a
    security interest in, or encumber any of Borrower's assets, or (c) sell
    with recourse any of Borrower's accounts, except to Lender.  As regards
    items (a) and (b), exceptions will be made for (i) trade accounts payable
    and (ii) equipment financing arrangements for capital equipment purchases
    in line with Borrower's approved budget.

    CONTINUITY OF OPERATIONS. (a) Engage in any business activities
    substantially different than those in which Borrower is presently engaged,
    (b) cease operations, liquidate, merge, transfer, acquire or consolidate
    with any other entity, change ownership, change its name, dissolve or
    transfer or sell Collateral out of the ordinary course of business, (c) pay
    any dividends on Borrower's stock (other than dividends payable in its
    stock), provided, however that notwithstanding the foregoing, but only so
    long as no Event of Default has occurred and is continuing or would result
    from the payment of dividends, if Borrower is a "Subchapter S Corporation"
    (as defined in the Internal Revenue Code of 1986, as amended), Borrower may
    pay cash dividends on its stock to its shareholders from time to time in
    amounts necessary to enable the shareholders to pay income taxes and make
    estimated income tax payments to satisfy their liabilities under federal
    and state law which arise solely from their status as Shareholders of a
    Subchapter S Corporation because of their ownership of shares of stock of
    Borrower, or (d) purchase or retire any of Borrower's outstanding shares or
    alter or amend Borrower's capital structure.

    LOANS, ACQUISITIONS AND GUARANTIES. (a) Loan, invest in or Advance money or
    assets, (b) purchase, create or acquire any interest in any other
    enterprise or entity in an amount exceeding $1,000,000.00 in the aggregate,
    or (c) incur any obligation as surety or guarantor other than in the
    ordinary course of business.

CESSATION OF ADVANCES.  If Lender has made any commitment to make any Loan to
Borrower, whether under this Agreement or under any other agreement, Lender
shall have no obligation to make Loan Advances or to disburse Loan proceeds if:
(a) Borrower or any Guarantor is in default under the terms of this Agreement or
any of the Related Documents or any other agreement that Borrower or any
Guarantor has with Lender; (b) Borrower or any Guarantor becomes insolvent,
files a petition in bankruptcy or similar proceedings, or is adjudged a
bankrupt; (c) there occurs a material adverse change in Borrower's financial
condition, in the financial condition of any Guarantor, or in the value of any
Collateral securing any Loan; or (d) any Guarantor seeks, claims or otherwise
attempts to limit, modify or revoke such Guarantor's guaranty of the Loan or any
other loan with Lender.

LOAN ADVANCES.  Lender, in its discretion, will make loans to Borrower, in
amounts determined by Lender, up to the amounts as defined and permitted in the
Agreement and Related Documents, including but not limited to any Promissory
Notes, executed by Borrower (the "Credit Limit").  The Borrower is responsible
for monitoring the total amount of Loans and Indebtedness outstanding from time
to time, and Borrower shall not permit the same, at any time to exceed the
Credit Limit.  If at any time the total of all outstanding Loans and
Indebtedness exceeds the Credit Limit, the Borrower shall immediately pay the
amount of the excess to Lender, without notice or demand.

BORROWING BASE FORMULA.  Funds shall be advanced under the Line of Credit
according to a borrowing base formula, as determined by Lender, on a monthly
basis, defined as follows: the lesser of (a) $5,000,000.00 or up to (b) Eighty
percent (80%) of eligible accounts receivable, subject to satisfactory accounts
receivable audit to be performed by Lender minus the sum of (i) the face amount
of outstanding Letters of Credit (including drawn but unreimbursed Letters of
Credit) and (ii) the outstanding under the Foreign Exchange Sublimit.  Eligible
accounts receivable shall include, but not be limited to, those accounts
outstanding less than 90 days from the date of invoice, excluding foreign,
government, contra, and intercompany accounts; and exclude accounts wherein 50%
or more of the account is outstanding more than 90 days from the date of
invoice.  Except for specific projects pre-approved by Lender with an increased
concentration limit, any account which alone exceeds 25% of total accounts will
be ineligible to the extent said account exceeds 25% of total accounts.  Also
exclude any credit balances which are aged past 90 days.  Also ineligible are
any accounts which Lender in its sole judgment excludes for valid credit
reasons.  Notwithstanding the foregoing, upon Borrower's election to advance
under the Line of Credit, Borrower acknowledges and agrees that Lender shall
transfer the loan to its Commercial Finance Division.  Any such advance request
shall be made approximately 45 days to borrowing to allow for an audit of
Borrower's accounts receivable.  Borrower's deposit account will be debited for
the audit expense and a notification will be mailed to Borrower.

EVENTS OF DEFAULT.  Each of the following shall constitute an Event of Default
under this Agreement:

    DEFAULT ON INDEBTEDNESS.  Failure of Borrower to make any payment when due
    on the Loans.

    OTHER DEFAULTS.  Failure of Borrower or any Grantor to comply with or to
    perform when due any other term, obligation, covenant or condition
    contained in this Agreement or in any of the Related Documents, or failure
    of Borrower to comply with or to perform any other term, obligation,
    covenant or condition contained in any other agreement between Lender and
    Borrower.

    DEFAULT IN FAVOR OF THIRD PARTIES.  Should Borrower or any Grantor default
    under any loan, extension of credit, security agreement, purchase or sales
    agreement, or any other agreement, in favor of any other creditor or person
    that may materially affect any of Borrower's property or Borrower's or any
    Grantor's ability to repay the Loans or perform their respective
    obligations under this Agreement or any of the Related Documents.


                                          6

<PAGE>

                     AMENDED AND RESTATED BUSINESS LOAN AGREEMENT
                                     (Continued)

    FALSE STATEMENTS.  Any warranty, representation or statement made or
    furnished to Lender by or on behalf of Borrower or any Grantor under this
    Agreement or the Related Documents is false or misleading in any material
    respect at the time made or furnished, or becomes false or misleading at any
    time thereafter.

    DEFECTIVE COLLATERALIZATION.  This Agreement or any of the Related
    Documents ceases to be in full force and effect (including failure of any
    Security Agreement to create a valid and perfected Security Interest) at
    any time and for any reason.

    INSOLVENCY.  The dissolution or termination of Borrower's existence as a
    going business, the insolvency of Borrower, the appointment of a receiver
    for any part of Borrower's property, any assignment for the benefit of
    creditors, any type of creditor workout, or the commencement of any
    proceeding under any bankruptcy or insolvency laws by or against Borrower.

    CREDITOR OR FORFEITURE PROCEEDINGS.  Commencement of foreclosure or
    forfeiture proceedings, whether by judicial proceeding, self-help,
    repossession or any other method, by any creditor of Borrower, any creditor
    of any Grantor against any collateral securing the Indebtedness, or by any
    governmental agency.  This includes a garnishment, attachment, or levy on
    or of any of Borrower's deposit accounts with Lender.

    EVENTS AFFECTING GUARANTOR.  Any of the preceding events occurs with
    respect to any Guarantor of any of the Indebtedness or any Guarantor dies
    or becomes incompetent, or revokes or disputes the validity of, or
    liability under, any Guaranty of the Indebtedness.

    CHANGE IN OWNERSHIP.  Any change in ownership of twenty-five percent (25%)
    or more of the common stock of Borrower.

    ADVERSE CHANGE.  A material adverse change occurs in Borrower's financial
    condition, or Lender believes the prospect of payment or performance of the
    Indebtedness is impaired.

EFFECT OF AN EVENT OF DEFAULT.  If any Event of Default shall occur, except
where otherwise provided in this Agreement or the Related Documents, all
commitments and obligations of Lender under this Agreement or the Related
Documents or any other agreement immediately will terminate (including any
obligation to make Loan Advances or disbursements), and, at Lender's option, all
Indebtedness immediately will become due and payable, all without notice of any
kind to Borrower, except that in the case of an Event of Default of the type
described in the "Insolvency" subsection above, such acceleration shall be
automatic and not optional.  In addition, Lender shall have all the rights and
remedies provided in the Related Documents or available at law, in equity, or
otherwise.  Except as may be prohibited by applicable law, all of Lender's
rights and remedies shall be cumulative and may be exercised singularly or
concurrently.  Election by Lender to pursue any remedy shall not exclude pursuit
of any other remedy, and an election to make expenditures or to take action to
perform an obligation of Borrower or of any Grantor shall not affect Lender's
right to declare a default and to exercise its rights and remedies.

DEFAULT RATE.  Upon default, including failure to pay upon final maturity,
Lender, at its option, may do one or both of the following: (a) increase the
variable interest rate on this Note to five percentage points (5.000%) over the
Interest Rate otherwise payable thereunder, and (b) add any unpaid accrued
interest to principal and such sum will bear interest therefrom until paid at
the rate provided in the Note.

MISCELLANEOUS PROVISIONS.  The following miscellaneous provisions are a part of
this Amendment and Restatement:

    AMENDMENTS.  This Agreement, together with any Related Documents,
    constitutes the entire understanding and agreement of the parties as to the
    matters set forth in this Agreement.  No alteration of or amendment to this
    Agreement shall be effective unless given in writing and signed by the
    party or parties sought to be charged or bound by the alteration or
    amendment.

    AMENDMENT AND RESTATEMENT.  This Amended and Restated Business Loan
    Agreement amends and restates the terms and conditions of that certain
    Business Loan Agreement dated June 7, 1991, as amended.

    APPLICABLE LAW.  This Agreement has been delivered to Lender and accepted
    by Lender in the State of California.  If there is a lawsuit, Borrower
    agrees upon Lender's request to submit to the jurisdiction of the courts of
    Santa Clara County, the State of California.  Lender and Borrower hereby
    waive the right to any jury trial in any action, proceeding, or
    counterclaim brought by either Lender or Borrower against the other.
    (Initial Here /s/ TB) This Agreement shall be governed by and construed in
                  ------
    accordance with the laws of the State of California.

    CAPTION HEADINGS.  Caption headings in this Agreement are for convenience
    purposes only and are not to be used to interpret or define the provisions
    of this Agreement.

    MULTIPLE PARTIES; CORPORATE AUTHORITY.  All obligations of Borrower under
    this Agreement shall be joint and several, and all references to Borrower
    shall mean each and every Borrower.  This means that each of the Borrowers
    signing below is responsible for all obligations in this Agreement.

    CONSENT TO LOAN PARTICIPATION.  Borrower agrees and consents to Lender's
    sale or transfer, whether now or later, of one or more participation
    interests in the Loans to one or more purchasers, whether related or
    unrelated to Lender.  Lender may provide, without any limitation
    whatsoever, to any one or more purchasers, or potential purchasers, any
    information or knowledge Lender may have about Borrower or about any other
    matter relating to the Loan, and Borrower hereby waives any rights to
    privacy it may have with respect to such matters.  Borrower additionally
    waives any and all notices of sale of participation interests, as well as
    all notices of any repurchase of such participation interests.  Borrower
    also agrees that the purchasers of any such participation interests will be
    considered as the absolute owners of such interests in the Loans and will
    have all the rights granted under the participation agreement or agreements
    governing the sale of such participation interests.  Borrower further
    waives all rights of offset or counterclaim that it may have now or later
    against Lender or against any purchaser of such a participation interest
    and unconditionally agrees that either Lender or such purchaser may enforce
    Borrower's obligation under the Loans irrespective of the failure or
    insolvency of any holder of any interest in the Loans.  Borrower further
    agrees that the purchaser of any such participation interests may enforce
    its interests irrespective of any personal claims or defenses that Borrower
    may have against Lender.

    BORROWER INFORMATION.  Borrower consents to the release of information on
    or about Borrower by Lender in accordance with any court order, law or
    regulation and in response to credit inquiries concerning Borrower.


                                          7

<PAGE>

                     AMENDED AND RESTATED BUSINESS LOAN AGREEMENT
                                     (Continued)

    NON-LIABILITY OF LENDER.  The relationship between Borrower and Lender is a
    debtor and creditor relationship and not fiduciary in nature, nor is the
    relationship to be construed as creating any partnership or joint venture
    between Lender and Borrower.  Borrower is exercising its own judgment with
    respect to Borrower's business.  All information supplied to Lender is for
    Lender's protection only and no other party is entitled to rely on such
    information.  There is no duty for Lender to review, inspect, supervise, or
    inform Borrower of any matter with respect to Borrower's business.  Lender
    and Borrower intend that Lender may reasonably rely on all information
    supplied by Borrower to Lender, together with all representations and
    warranties given by Borrower to Lender, without investigation or
    confirmation by Lender and that any investigation or failure to investigate
    will not diminish Lender's right to so rely.

    NOTICE OF LENDER'S BREACH.  Borrower must notify Lender in writing of any
    breach of this Agreement or the Related Documents by Lender and any other
    claim, cause of action or offset against Lender within thirty (30) days
    after the occurrence of such breach or after the accrual of such claim,
    cause of action or offset.  Borrower waives any claim, cause of action or
    offset for which notice is not given in accordance with this paragraph. 
    Lender is entitled to rely on any failure to give such notice.

    BORROWER INDEMNIFICATION.  Borrower shall indemnify and hold Lender
    harmless from and against all claims, costs, expenses, losses, damages, and
    liabilities of any kind, including but not limited to attorneys' fees and
    expenses, arising out of any matter relating directly or indirectly to the
    Indebtedness, whether resulting from internal disputes of the Borrower,
    disputes between Borrower and any Guarantor, or whether involving any third
    parties, or out of any other matter whatsoever related to this Agreement or
    the Related Documents, but excluding any claim or liability which arises as
    a direct result of Lender's gross negligence or willful misconduct.  This
    indemnity shall survive full repayment and satisfaction of the Indebtedness
    and termination of this Agreement.

    COUNTERPARTS.  This Agreement may be executed in multiple counterparts,
    each of which, when so executed, shall be deemed an original, but all such
    counterparts, taken together, shall constitute one and the same Agreement.

    COSTS AND EXPENSES.  Borrower agrees to pay upon demand all of Lender's
    expenses, including without limitation attorneys' fees, incurred in
    connection with the preparation, execution, enforcement, modification and
    collection of this Agreement or in connection with the Loans made pursuant
    to this Agreement.  Lender may pay someone else to help collect the Loans
    and to enforce this Agreement, and Borrower will pay that amount.  This
    includes, subject to any limits under applicable law, Lender's attorneys'
    fees and Lender's legal expenses, whether or not there is a lawsuit,
    including attorneys' fees for bankruptcy proceedings (including efforts to
    modify or vacate any automatic stay or injunction), appeals, and any
    anticipated post-judgment collection services.  Borrower also will pay any
    court costs, in addition to all other sums provided by law.

    NOTICES.  All notices required to be given under this Agreement shall be
    given in writing, may be sent by telefacsimile, and shall be effective when
    actually delivered or when deposited with a nationally recognized overnight
    courier or deposited in the United States mail, first class, postage
    prepaid, addressed to the party to whom the notice is to be given at the
    address shown above.  Any party may change its address for notices under
    this Agreement by giving formal written notice to the other parties,
    specifying that the purpose of the notice is to change the party's address. 
    To the extent permitted by applicable law, if there is more than one
    Borrower, notice to any Borrower will constitute notice to all Borrowers. 
    For notice purposes, Borrower agrees to keep Lender informed at all times
    of Borrower's current address(es).

    SEVERABILITY.  If a court of competent jurisdiction finds any provision of
    this Agreement to be invalid or unenforceable as to any person or
    circumstance, such finding shall not render that provision invalid or
    unenforceable as to any other persons or circumstances. if feasible, any
    such offending provision shall be deemed to be modified to be within the
    limits of enforceability or validity; however, if the offending provision
    cannot be so modified, it shall be stricken and all other provisions of
    this Agreement in all other respects shall remain valid and enforceable.

    SUBSIDIARIES AND AFFILIATES OF BORROWER.  To the extent the context of any
    provisions of this Agreement makes it appropriate, including without
    limitation any representation, warranty or covenant, the word "Borrower" as
    used herein shall include all subsidiaries and affiliates of Borrower. 
    Notwithstanding the foregoing however, under no circumstances shall this
    Agreement be construed to require Lender to make any Loan or other
    financial accommodation to any subsidiary or affiliate of Borrower.

    SUCCESSORS AND ASSIGNS.  All covenants and agreements contained by or on
    behalf of Borrower shall bind its successors and assigns and shall inure to
    the benefit of Lender, its successors and assigns.  Borrower shall not,
    however, have the right to assign its rights under this Agreement or any
    interest therein, without the prior written consent of Lender.

    SURVIVAL.  All warranties, representations, and covenants made by Borrower
    in this Agreement or in any certificate or other instrument delivered by
    Borrower to Lender under this Agreement shall be considered to have been
    relied upon by Lender and will survive the making of the Loan and delivery
    to Lender of the Related Documents, regardless of any investigation made by
    Lender or on Lender's behalf.

    TIME IS OF THE ESSENCE.  Time is of the essence in the performance of this
    Agreement.

WAIVER.  Lender shall not be deemed to have waived any rights under this
Agreement unless such waiver is given in writing and signed by Lender.  No delay
or omission on the part of Lender in exercising any right shall operate as a
waiver of such right or any other right.  A waiver by Lender of a provision of
this Agreement shall not prejudice or constitute a waiver of Lender's right
otherwise to demand strict compliance with that provision or any other provision
of this Agreement.  No prior waiver by Lender, nor any course of dealing between
Lender and Borrower, or between Lender and any Grantor, shall constitute a 
waiver of any of Lender's rights or of any obligations of Borrower or of any
Grantor as to any future transactions.  Whenever the consent of Lender is
required under this Agreement, the granting of such consent by Lender in any
instance shall not constitute continuing consent in subsequent instances
where such consent is required, and in all cases such consent may be granted
or withheld in the sole discretion of Lender.


                                          8

<PAGE>

                     AMENDED AND RESTATED BUSINESS LOAN AGREEMENT
                                     (Continued)


BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS AMENDED AND
RESTATED BUSINESS LOAN AGREEMENT, AND BORROWER AGREES TO ITS TERMS.  THIS
AGREEMENT IS DATED AS OF MARCH 18, 1996.


BORROWER:

Laserscope


By: /s/ Thomas B. Boyd
   ---------------------------------
Name: Thomas B. Boyd
     -------------------------------
Title: Sr. V.P. Operations & Finance
      ------------------------------


LENDER:

Silicon Valley Bank


By: /s/ Mary T. Toomey
   ---------------------------------
Name: Mary T. Toomey
     -------------------------------
Title: Vice President
      ------------------------------


                                        9