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                                                                EXHIBIT 10.20(a)


[BAND OF AMERICA LOGO]                                   BUSINESS LOAN AGREEMENT

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This Agreement dated as of June 9, 1998 is between Bank of America National 
Trust and Savings Association (the "Bank") and Ventana Medical Systems, Inc. 
(the "Borrower").


1.   LINE OF CREDIT AMOUNT AND TERMS 

1.1  LINE OF CREDIT AMOUNT.

(a)  During the availability period described below, the Bank will provide a
     line of credit to the Borrower. The amount of the line of credit (the 
     "Commitment") is Five Million and No/100 Dollars ($5,000,000.00).

(b)  This is a revolving line of credit with a within line facility for letters 
     of credit. During the availability period, the Borrower may repay 
     principal amounts and reborrow them.

(c)  The Borrower agrees not to permit the outstanding principal balance of the
     line of credit plus the outstanding amounts of any letters of credit,
     including amounts drawn on letters of credit and not yet reimbursed, to
     exceed the Commitment.

1.2  AVAILABILITY PERIOD. The line of credit is available between the date of 
     this Agreement and May 31, 1999 (the "Expiration Date") unless the 
     Borrower is in default.

1.3  INTEREST RATE.

(a)  Unless the Borrower elects an Optional interest rate as described below, 
     the interest rate is the Reference Rate.

(b)  The Reference Rate is the rate of interest publicly announced from time to 
     time by the Bank in San Francisco, California, as its Reference Rate. The 
     Reference Rate is set by the Bank based on various factors, including the 
     Bank's costs and desired return, general economic conditions and other 
     factors, and is used as a reference point for pricing some loans. The Bank 
     may price loans to its customers at, above or below the Reference Rate. 
     Any change in the Reference Rate shall take effect at the opening of 
     business on the day specified in the public announcement of a change in 
     the Bank's Reference Rate.

1.4  REPAYMENT TERMS.

(a)  The Borrower will pay interest on June 1, 1998 and on the first day of 
     each month thereafter until payment in full of any principal outstanding 
     under this line of credit.

(b)  The Borrower will repay in full all principal and any unpaid interest or 
     other charges outstanding under this line of credit no later than the 
     Expiration Date.

(c)  The Borrower may prepay the loan in full or in part at any time. The 
     prepayment will be applied to the most remote installment of principal due 
     under this Agreement.

1.5  OPTIONAL INTEREST RATES. Instead of the interest rate based on the 
Reference Rate, the Borrower may elect to have all portions of the line of 
credit (during the availability period) bear interest at the rate(s) described 
below during an interest period agreed to by the Bank and the Borrower. Each 
interest rate is a rate per year. Interest will be paid on the last day of each 
interest period, and on the first day of each month during the interest period. 
At the end of any interest period, the interest rate will revert to the rate 
based on the Reference Rate, unless the Borrower has designated another 
optional interest rate for the portion.



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1.6  FIXED RATE.  The Borrower may elect to have all or portions of the
principal balance of the line of credit bear interest at the Fixed Rate, subject
to the following requirements:

(a)  The "Fixed Rate" means the fixed interest rate the Bank and the Borrower
     agree will apply to the portion during the applicable interest period.

(b)  The interest period during which the Fixed Rate will be in effect will be
     no shorter than 14 days and no longer than one year.

(c)  Each Fixed Rate portion will be for an amount not less than Five Hundred
     Thousand Dollars ($500,000).

1.7  LIBOR RATE.  The Borrower may elect to have all or portions of the 
principal balance of the line of credit bear interest at the LIBOR Rate plus 
1.75 percentage points.

Designation of a LIBOR Rate portion is subject to the following requirements:

(a)  The interest period during which the LIBOR Rate will be in effect will be
     one, two, three, four, five, six, seven, eight, nine, ten, eleven, or
     twelve months. The last day of the interest period and the actual number of
     days during the interest period will be determined by the Bank using the
     practices of the London inter-bank market.

(b)  Each LIBOR Rate portion will be for an amount not less than Five Hundred
     Thousand Dollars ($500,000).

(c)  THE "LIBOR Rate" means the interest rate determined by the following
     formula, rounded upward to the nearest 1/100 of one percent. (All amounts
     in the calculation will be determined by the Bank as of the first day of
     the interest period.)


                    LIBOR = London Inter-Bank Offered Rate
                            ------------------------------
                            (1.00 - Reserve Percentage)

     Where,

       (i)  "London Inter-Bank Offered Rate" means the interest rate at which
            the Bank's London Branch, London, Great Britain, would offer U.S.
            dollar deposits for the applicable interest period to other major
            banks in the London inter-bank market at approximately 11:00 a.m.
            London time two (2) London Banking Days before the commencement of
            the interest period. A "London Banking Day" is a day on which the
            Bank's London Branch is open for business and dealing in offshore
            dollars.

      (ii)  "Reserve Percentage" means the total of the maximum reserve
            percentages for determining the reserves to be maintained by member
            banks of the Federal Reserve System for Eurocurrency Liabilities, as
            defined in the Federal Reserve Board Regulation D, rounded upward to
            the nearest 1/100 of one percent. The percentage will be expressed
            as a decimal, and will include, but not be limited to, marginal,
            emergency, supplemental, special, and other reserve percentages.

(d)  The Borrower shall irrevocably request a LIBOR Rate portion no later than
     9:00 a.m. Phoenix time three (3) banking days before the commencement of
     the interest period. 

(e)  The Borrower may not elect a LIBOR Rate with respect to any portion of the
     principal balance of the line of credit which is scheduled to be repaid
     before the last day of the applicable interest period.

(f)  Any portion of the principal balance of the line of credit already bearing
     interest at the LIBOR Rate will not be converted to a different rate during
     its interest period.

(g)  Each prepayment of a LIBOR Rate portion, whether voluntary, by reason of
     acceleration or otherwise, will be accompanied by the amount of accrued
     interest on the amount prepaid and a prepayment fee as described below. A
     "prepayment", for the purposes of this paragraph, is a payment of an amount
     on a date earlier than the scheduled payment date for such amount as
     required by this Agreement. The prepayment fee shall be equal to the amount
     (if any) by which:


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     (i)  the additional interest which would have been payable during the 
          interest period on the amount prepaid had it not been prepaid, exceeds

     (ii) the interest which would have been recoverable by the Bank by placing 
          the amount prepaid on deposit in the domestic certificate of deposit
          market, the eurodollar deposit market, or other appropriate money
          market selected by the Bank, for a period starting on the date on
          which it was prepaid and ending on the last day of the interest period
          for such portion (or the scheduled payment date for the amount
          prepaid, if earlier).

(h)  The Bank will have no obligation to accept an election for a LIBOR Rate 
     portion if any of the following described events has occurred and is 
     continuing:

     (i)  Dollar deposits in the principal amount, and for periods equal to the 
          interest period, of a LIBOR Rate portion are not available in the
          London inter-bank market; or

     (ii) the LIBOR Rate does not accurately reflect the cost of a LIBOR Rate 
          portion.

1.8  OFFSHORE RATE. The Borrower may elect to have all or portions of the 
     principal balance of the line of credit bear interest at the Offshore Rate,
     subject to the following requirements:

(a)  The "Offshore Rate" means the interest rate the Bank and the Borrower 
     agree will apply to the portion during the applicable interest period.

(b)  The interest period during which the Offshore Rate will be in effect will 
     be no shorter than 30 days and no longer than one year. The last day of the
     interest period will be determined by the Bank using the practices of the
     offshore dollar inter-bank market.

(c)  Each Offshore Rate portion will be for an amount not less than Five 
     Hundred Thousand Dollars ($500,000).

(d)  The Borrower may not elect an Offshore Rate with respect to any portion of 
     the principal balance of the line of credit which is scheduled to be repaid
     before the last day of the applicable interest period.

(e)  Any portion of the principal balance of the line of credit already bearing 
     interest at the Offshore Rate will not be converted to a different rate
     during its interest period.

(f)  Each prepayment of an Offshore Rate portion, whether voluntary, by reason 
     of acceleration or otherwise, will be accompanied by the amount of accrued
     interest on the amount prepaid, and a prepayment fee equal to the amount
     (if any) by which;

     (i)  the additional interest which would have been payable on the amount 
          prepaid had it not been paid until the last day of the interest 
          period, exceeds

     (ii) the interest which would have been recoverable by the Bank by placing 
          the amount prepaid on deposit in the offshore dollar market for a
          period starting on the date on which it was prepaid and ending on the
          last day of the interest period for such portion.

(g)  The Bank will have no obligation to accept an election for an Offshore 
     Rate portion if any of the following described events has occurred and is
     continuing:

     (i)  Dollar deposits in the principal amount, and for periods equal to the 
          interest period, of an Offshore Rate portion are not available in the
          offshore Dollar inter-bank markets; or

     (ii) The Offshore Rate does not accurately reflect the cost of an Offshore 
          Rate portion.

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1.9  LETTERS OF CREDIT.  This line of credit may be used for financing:

(a)  Standby letters of credit with a maximum maturity of 365 days,

(b)  The amount of letters of credit outstanding at any one time (including
     amounts drawn on letters of credit and not yet reimbursed) may not exceed
     Two Million and No/100 Dollars ($2,000,000.00) for standby letters of 
     credit.

THE BORROWER AGREES:

(a)  Any sum drawn under a letter of credit may, at the option of the Bank, be
     added to the principal amount outstanding under this Agreement. The amount
     will bear interest and be due as described elsewhere in this Agreement.

(b)  If there is a default under this Agreement, to immediately prepay and make
     the Bank whole for any outstanding letters of credit.

(c)  The issuance of any letter of credit and any amendment to a letter of
     credit is subject to the Bank's written approval and must be in form and
     content satisfactory to the Bank and in favor of a beneficiary acceptable
     to the Bank.

(d)  To sign the Bank's form Application and Agreement for Commercial Letter of
     Credit or Application and Agreement for Standby Letter of Credit.

(e)  To pay any issuance and/or other fees that the Bank notifies the Borrower
     will be charged for issuing and processing letters of credit for the
     Borrower.

(f)  To allow the Bank to automatically charge its checking account for
     applicable fees, discounts, and other changes.

2.   FEES AND EXPENSES

2.1  FEES. (a)  Unused Commitment Fee.  The Borrower agrees to pay a fee on any
difference between the Commitment and the amount of credit it actually uses,
determined by the weighted average loan balance maintained during the specified
period. The fee will be calculated at 1/4% per year.

     This fee is due on July 1, 1998 and on the 1st day of each following
     quarter, until the expiration of the availability period.

2.2  EXPENSES.  The Borrower agrees to immediately repay the Bank for expenses
that include, but are not limited to, filing, recording and search fees,
appraisal fees, title report fees, and documentation fees.

2.3  REIMBURSEMENT COSTS. 

(a)  The Borrower agrees to reimburse the Bank for any expenses it incurs in the
     preparation of this Agreement and any agreement or instrument required by
     this Agreement. Expenses include, but are not limited to, reasonable
     attorneys' fees, including any allocated costs of the Bank's in-house
     counsel.  

(b)  The Borrower agrees to reimburse the Bank for the cost of periodic audits
     and appraisals of the personal property collateral securing this Agreement,
     at such intervals as the Bank may reasonably require. The audits and
     appraisals may be performed by employees of

3.   COLLATERAL

3.1  PERSONAL PROPERTY.  The Borrower's obligations to the Bank under this
Agreement will be secured by personal property the Borrower now owns or will own
in the future as listed below. The collateral is further defined in security
agreement(s) executed by the Borrower.

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In addition, all personal property collateral securing this Agreement shall 
also secure all other present and future obligations of the Borrower to the 
Bank (excluding any consumer credit covered by the federal Truth in Lending 
law, unless the Borrower has otherwise agreed in writing). All personal 
collateral securing any other present or future obligations of the Borrower to 
the Bank shall also secure this Agreement.

(a)  Machinery and equipment.

(b)  Inventory.

(c)  Receivables.

(d)  Patents, trademarks and other general intangibles.

4.   DISBURSEMENTS, PAYMENTS AND COSTS

4.1  REQUESTS FOR CREDIT. Each request for an extension of credit will be made 
in writing in a manner acceptable to the Bank, or by another means acceptable 
to the Bank.

4.2  DISBURSEMENTS AND PAYMENTS. Each disbursement by the Bank and each payment 
by the Borrower will be:

(a)  made at the Bank's branch (or other location) elected by the Bank from 
     time to time;

(b)  made for the account of the Bank's branch selected by the Bank from time 
     to time;

(c)  made in immediately available funds, or such other type of funds selected 
     by the Bank;

(d)  evidenced by records kept by the Bank. In addition, the Bank may, at its 
     discretion, require the Borrower to sign one or more promissory notes.

4.3  TELEPHONE AND TELEFAX AUTHORIZATION

(a)  The Bank may honor telephone or telefax instructions for advances or
     repayments or for the designation of optional interest rates or the
     issuance of letters of credit given by any one of the individual signer(s)
     of this Agreement or a person or persons authorized in writing by any one
     of the signer(s) of this Agreement.

(b)  Advances will be deposited in, and repayments will be withdrawn from, the 
     Borrower's account number 252352864, or such other of the Borrower's 
     accounts with the Bank as designated in writing by the Borrower.

(c)  The Borrower indemnifies and excuses the Bank (including its officers, 
     employees, and agents) from all liability, loss, and costs in connection 
     with any act resulting from telephone or telefax instructions it 
     reasonably believes are made by any individual authorized by the Borrower 
     to give such instructions. This indemnity and excuse will survive this 
     Agreement's termination.

4.4  DIRECT DEBIT (PRE-BILLING)

(a)  The Borrower agrees that the Bank will debit the Borrower's account number 
     252352864, or such other of the Borrower's account with the Bank as 
     designated in writing by the Borrower (the "Designated Account") on the 
     date each payment of interest and any fees from the Borrower becomes due 
     (the "Due Date"). If the Due Date is not a banking day, the Designated 
     Account will be debited on the next banking day.

(b)  Approximately 10 days prior to each Due Date, the Bank will mail to the 
     Borrower a statement of the amounts that will be due on that Due Date (the 
     "Billed Amount"). The calculation will be made on the assumption that no 
     new extensions of credit or payments will be made between the date of the 
     billing statement and the Due Date, and that there will be no changes in 
     the applicable interest rate.

(c)  The Bank will debit the Designated Account for the Billed Amount, 
     regardless of the actual amount due on that date (the "Accrued Amount"). 
     If the Billed Amount debited to the Designated Account differs from the 
     Accrued



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     Amount, the discrepancy will be treated as follows:

     (i)  If the Billed Amount is less than the Accrued Amount, the Billed 
          Amount for the following Due Date will be increased by the amount of
          the discrepancy. The Borrower will not be in default by reason of any
          such discrepancy.

     (ii) If the Billed Amount is more than the Accrued Amount, the Billed 
          Amount for the following Due Date will be decreased by the amount of 
          the discrepancy.

     Regardless of any such discrepancy, interest will continue to accrue based
     on the actual amount of principal outstanding without compounding. The Bank
     will not pay the Borrower interest on any overpayment.

(d)  The Borrower will maintain sufficient funds in the Designated Account to
     cover each debit. If there are insufficient funds in the Designated 
     Account on the date the Bank enters any debit authorized by this Agreement,
     the debit will be reversed. 

(e)  The Borrower may terminate this direct debit arrangement at any time by 
     sending written notice to the Bank at the address specified at the end of 
     this Agreement.

4.5  BANKING DAYS. Unless otherwise provided in this Agreement, a banking day 
is a day other than a Saturday or a Sunday on which the Bank is open for 
business in Arizona. For amounts bearing interest at an offshore rate (if any), 
a banking day is a day other than a Saturday or a Sunday on which the Bank is 
open for business in California and is dealing in offshore dollars. All 
payments and disbursements which would be due on a day which is not a banking 
day will be due on the next banking day. All payments received on a day which 
is not a banking day will be applied to the credit on the next banking day.

4.6  TAXES. The Borrower will not deduct any taxes from any payments it makes 
to the Bank. If any government authority imposes any taxes on any payments made 
by the Borrower, the Borrower will pay the taxes and will also pay to the Bank, 
at the time interest is paid, any additional amount which the Bank specifies as 
necessary to preserve the after-tax yield the Bank would have received if such 
taxes had not been imposed. Upon request by the Bank, the Borrower will confirm 
that it has paid the taxes by giving the Bank official tax receipts (or 
notarized copies) within 30 days after the due date. However, the Borrower will 
not pay the Bank's net income taxes.

4.7  ADDITIONAL COSTS. The Borrower will pay the Bank, on demand, for the 
Bank's costs or losses arising from any statute or regulation, or any request 
or requirement of a regulatory agency. The costs and losses will be allocated 
to the loan in a manner determined by the Bank, using any reasonable method. 
The costs include the following:

(a)  Any reserve or deposit requirements; and

(b)  Any capital requirements relating to the Bank's assets and commitments 
for credit.

4.8  INTEREST CALCULATION. Except as otherwise stated in this Agreement, all 
interest and fees, if any, will be computed on the basis of a 360-day year and 
the actual number of days elapsed. This results in more interest or a higher 
fee than if a 365-day year is used.

4.9  INTEREST ON LATE PAYMENTS. At the Bank's sole option in each instance, any 
amount not paid when due under this Agreement (including interest) shall bear 
interest from the due date at the Reference Rate plus 2.00 percentage points. 
This may result in compounding of interest.

4.10 DEFAULT RATE. Upon the occurrence and during the continuation of any 
default under this Agreement, advances under this Agreement will at the option 
of the Bank bear interest at a rate per annum which is 3.00 percentage point(s) 
higher than the rate of interest otherwise provided under this Agreement. This 
will not constitute a waiver of any default.

5.   CONDITIONS. The Bank must receive the following items, in form and content 
acceptable to the Bank, before it is required to extend any credit to the 
Borrower under this Agreement:

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5.1  AUTHORIZATIONS. Evidence that the execution, delivery and performance by 
the Borrower of this Agreement and any instrument or agreement required under 
this Agreement have been duly authorized.

5.2  GOVERNING DOCUMENTS. A copy of the Borrower's articles of incorporation.

5.3  SECURITY AGREEMENTS. Signed original security agreements, assignments, and 
financing statements (together with Collateral in which the bank requires a 
possessory security interest), which the Bank requires.

5.4  EVIDENCE OF PRIORITY.  Evidence that security interests and liens in favor 
of the Bank are valid, enforceable, and prior to all others' rights and 
interests, except those the Bank consents to in writing.

5.5  INSURANCE.  Evidence of insurance coverage, as required in the "Covenants" 
section of this Agreement.

5.6  ENVIRONMENTAL QUESTIONNAIRE.  A completed Bank form Environmental 
Questionnaire and Disclosure Statement, together with an environmental site 
assessment concerning any potential toxic or hazardous condition.

5.7  OTHER ITEMS.  Any other items that the Bank reasonably requires.

6.   REPRESENTATIONS AND WARRANTIES. When the Borrower signs this Agreement, and
until the Bank is repaid in full, the Borrower makes the following
representations and warranties. Each request for an extension of credit
constitutes a renewed representation.

6.1  ORGANIZATION OF BORROWER.  The Borrower is a corporation duly formed and 
existing under the laws of the state where organized.

6.2  AUTHORIZATION. This Agreement, and any instrument or agreement required 
hereunder, are within the Borrower's powers, have been duly authorized, and do 
not conflict with any of its organizational papers.

6.3  ENFORCEABLE AGREEMENT.  This Agreement, and each other agreement or 
document executed and delivered to the Bank in connection with this Agreement, 
is a legal, valid and binding agreement of the Borrower, enforceable against 
the Borrower in accordance with its terms, and any instrument or agreement 
required hereunder, when executed and delivered, will be similarly legal, 
valid, binding and enforceable.

6.4  GOOD STANDING.  In each state in which the Borrower does business, it is 
properly licensed, in good standing, and, where required, in compliance with 
fictitious name statutes.

6.5  NO CONFLICTS. This Agrement does not conflict with any law, agreement, or 
obligation by which the Borrower is bound.

6.6  FINANCIAL INFORMATION. All financial and other information that has been, 
or will be, supplied to the Bank is:

(a)  Sufficiently complete to give the Bank accurate knowledge of the 
     Borrower's financial condition.

(b)  In form and content required by the Bank.

(c)  In compliance with all government regulations that apply.

6.7  LAWSUITS.  There is no lawsuit, tax claim or other dispute pending or 
threatened against the Borrower, which, if lost, would impair the Borrower's 
financial condition or ability to repay the loan, except as have been disclosed 
in writing to the Bank prior to the date of this Agreement.

6.8  COLLATERAL.  All collateral required in this Agreement is owned by the 
grantor of the security interest free of any title defects or any liens or 
interests of others.

6.9  PERMITS, FRANCHISES.  The Borrower possesses all permits, memberships, 
franchises, contracts and licenses




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required and all trademark rights, trade name rights, patent rights and 
fictitious name rights necessary to enable it to conduct the business in which 
it is now engaged.

6.10 OTHER OBLIGATIONS.  The Borrower is not in default on any obligation for 
borrowed money, any purchase money obligation or any other material lease, 
commitment, contract, instrument or obligation.

6.11 INCOME TAX RETURNS.  The Borrower has no knowledge of any pending 
assessments or adjustments of its income tax for any year.

6.12 NO EVENT OF DEFAULT.  There is no event which is, or with notice or lapse 
of time or both would be, a default under this Agreement.

6.13 LOCATION OF BORROWER.  The Borrower's place of business (or, if the 
Borrower has more than one place of business, its chief executive office) is 
located at the address listed under the Borrower's signature on this Agreement.

6.14 REPRESENTATIONS CONCERNING THE YEAR 2000.  The Borrower acknowledges that
it has received a copy of the brochure prepared by the Bank entitled "On Turning
00" and that it has reviewed this material and is aware of the possible impact
of the year 2000 problem (that is, the risk that computer applications may not
be able to properly perform date-sensitive functions after December 31, 1999)
upon its computer applications and ongoing business. The Borrower represents
that any corrective action necessary will be taken and that the Borrower does
not believe the year 2000 problem will result in a material adverse change in
the Borrower's business condition (financial or otherwise), operations,
properties or prospects, or ability to repay the credit.

7.   COVENANTS  The Borrower agrees, so long as credit is available under this 
Agreement and until the Bank is repaid in full:

7.1  USE OF PROCEEDS.  To use the proceeds of the credit only for working 
capital needs.

7.2  FINANCIAL INFORMATION.  To provide the following financial information and
statements and such additional information as requested by the Bank from time to
time:

(a)  Within 90 days of the Borrower's fiscal year end, the Borrower's annual
     financial statements. These financial statements must be audited (with an
     unqualified opinion) by a Certified Public Accountant ("CPA") acceptable to
     the Bank. The statements shall be prepared on a consolidated basis.


(b)  Within 45 days of quarter end, copies of the Borrower's Form 10-Q 
     Quarterly Report.

(c)  By February 15th of each year, the Borrower's annual projections.

(d)  Within 45 days of each quarter end, the Borrower shall provide to the Bank
     copies of statements from depository institutions or brokerage firms, or
     other evidence acceptable to the Bank of the Borrower's liquid assets.

(e)  Within 90 days of Borrower's fiscal year end, the Borrower shall provide 
     to the Bank a Compliance Certificate.

(f)  Within 45 days of quarter end, the Borrower shall provide to the Bank a 
     Compliance Certificate.

7.3  QUICK RATIO.  To maintain on a consolidated basis a ratio of quick assets 
to current liabilities of at least 3.00:1.0, measured quarterly.

"Quick assets" means cash, short-term cash investments, net trade receivables 
and marketable securities not classified as long-term investments.

7.4  MINIMUM LIQUIDITY.  To maintain at all times, a minimum of at least Five 
Million and No/100 Dollars ($5,000,000.00) in the form of Cash or Readily 
Marketable Securities, measured quarterly.

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7.5  TANGIBLE NET WORTH.  To maintain on a consolidated basis tangible net worth
equal to at least Thirty One Million and No/100 Dollars ($31,000,000.00),
measured quarterly.

"Tangible net worth" means the gross book value of the borrower's assets
(excluding goodwill, patents, trademarks, trade names, organization expense,
treasury stock, unamortized debt discount and expense, deferred research and
development costs, deferred marketing expenses, developed technology, customer
lists and other like intangibles) less total liabilities, including but not
limited to accrued and deferred income taxes, and any reserves against assets.

7.6  TOTAL LIABILITIES TO TANGIBLE NET WORTH RATIO.  To maintain on a
consolidated basis a ratio of Total Liabilities to Tangible Net Worth not
exceeding 0.50:1.0, measured quarterly.

"Total Liabilities" means the sum of current liabilities plus long term
liabilities.

7.7  PROFITABILITY. The Borrower, on a consolidated basis, shall incur no single
quarterly loss in excess of Five Hundred Thousand and No/100 Dollars
($500,000.00) and no two consecutive quarterly losses (excluding non-cash
expenses associated with acquisitions and write-downs of in-process technology).
The Borrower shall incur no fiscal year end loss in any amount (including
non-cash expenses associated with acquisitions and write-downs of in-process
technology).

7.8  OTHER DEBTS.  Not to have outstanding or incur any direct or contingent
debts (other than those to the Bank), or become liable for the debts of others
without the Bank's written consent. This does not prohibit:

(a)  Acquiring goods, supplies, or merchandise on normal trade credit.

(b)  Endorsing negotiable instruments received in the usual course of business.

(c)  Obtaining surety bonds in the usual course of business.

(d)  Debts and lines of credit and leases in existence on the date of this
     Agreement disclosed in writing to the Bank.

(e)  Additional debts and lease obligations for business purposes which do not
     exceed a total principal amount of One Million and No/100 Dollars
     ($1,000,000.00) outstanding at any one time.

7.9  OTHER LIENS.  Not to create, assume, or allow any security interest or lien
(including judicial liens) on property the Borrower now or later owns, except:

(a)  Deeds of trust and security agreements in favor of the Bank.

(b)  Liens for taxes not yet due.

(c)  Liens outstanding on the date of this Agreement disclosed in writing to the
     Bank.

(d)  Additional purchase money security interests in personal or real property
     acquired after the date of this Agreement, if the total principal amount of
     debts secured by such liens does not exceed One Million and No/100 Dollars
     ($1,000,000.00) at any one time.

7.10 CAPITAL EXPENDITURES. Not to spend or incur obligations for more than Three
Million and No/100 Dollars ($3,000,000.00) in any single fiscal year to acquire
fixed or capital assets.

7.11 DIVIDENDS.  Not to declare or pay any dividends on any of its shares except
dividends payable in capital stock of the Borrower, and not to purchase, redeem
or otherwise acquire for value any of its shares, or create any sinking fund in
relation thereto.

7.12 OUT OF DEBT PERIOD.  To repay any advances in full, and not to draw any
additional advances on its revolving line of credit, for two periods of at least
30 consecutive days, one in each semi-annual period of the line-year.
"Line-year" means the period between the date of this Agreement and May 31,
1999, and each subsequent one-year



                                                                               9
<PAGE>   10
period (if any).

7.13  NOTICES TO BANK. To promptly notify the Bank in writing of:

(a)   Any lawsuit over Five Hundred Thousand and No/100 Dollars ($500,000.00)
      against the Borrower.

(b)   Any substantial dispute between the Borrower and any government authority.

(c)   Any failure to comply with this Agreement.

(d)   Any material adverse change in the Borrower's financial condition or
      operations.


(e)   Any change in the Borrower's name, legal structure, place of business, or
      chief executive office if the Borrower has more than one place of
      business.

7.14  BOOKS AND RECORDS.  To maintain adequate books and records.

7.15  AUDITS.  To allow the Bank and its agents to inspect the Borrower's 
properties and examine, audit, and make copies of books and records at any 
reasonable time. If any of the Borrower's properties, books or records are in 
the possession of a third party, the Borrower authorizes that third party to 
permit the Bank or its agents to have access to perform inspections or audits 
and to respond to the Bank's requests for information concerning such 
properties, books and records.

7.16  COMPLIANCE WITH LAWS.  To comply with the laws, (including any fictitious 
name statute), regulations, and orders of any government body with authority 
over the Borrower's business.

7.17  PRESERVATION OF RIGHTS.  To maintain and preserve all rights, privileges, 
and franchises the Borrower now has.

7.18  MAINTENANCE OF PROPERTIES.  To make any repairs, renewals, or 
replacements to keep the Borrower's properties in good working condition.

7.19  PERFECTION OF LIENS.  To help the Bank perfect and protect its security 
interests and liens, and reimburse it for related costs it incurs to protect 
its security interests and liens.

7.20  COOPERATION.  To take any action requested by the Bank to carry out the 
intent of this Agreement.

7.21  INSURANCE.

(a)   INSURANCE COVERING COLLATERAL.  To maintain all risk property damage
      insurance policies covering the tangible property comprising the
      collateral. Each insurance policy must be in an amount acceptable to the
      Bank. The insurance must be issued by an insurance company acceptable to
      the Bank and must include a lender's loss payable endorsement in favor of
      the Bank in a form acceptable to the Bank.

(b)   GENERAL BUSINESS INSURANCE.  To maintain insurance satisfactory to the
      Bank as to amount, nature and carrier covering property damage (including
      loss of use and occupancy) to any of the Borrower's properties, public
      liability insurance including coverage for contractual liability, product
      liability and workers' compensation, and any other insurance which is
      usual for the Borrower's business.

(c)   EVIDENCE OF INSURANCE. Upon the request of the Bank, to deliver to the
      Bank a copy of each insurance policy or, if permitted by the Bank, a
      certificate of insurance listing all insurance in force.

7.22  ADDITIONAL NEGATIVE COVENANTS.  Not to, without the Bank's written
      consent:

(a)   Engage in any business activities substantially different
      from the Borrower's present business.

(b)   Liquidate or dissolve the Borrower's business.

(c)   Enter into any consolidation, merger, pool, joint venture, syndicate, or
      other combination and any requests for


                                                                              10
<PAGE>   11
     Bank consent will include proforma financial statements demonstrating
     covenant compliance. Credit taker's stockholders shall own at least 60% of
     the outstanding voting securities of the surviving entity or its parent.

(d)  Lease, or dispose of all or a substantial part of the Borrower's business
     or the Borrower's assets.

(e)  Acquire or purchase a business or its assets, except for unfinanced
     acquisitions that do not exceed Five Million and No/100 Dollars
     ($5,000,000.00) in the aggregate in any calendar year, provided Borrower is
     in and will continue to be in compliance with all other terms and
     conditions of the Loan Agreement.

(f)  Sell or otherwise dispose of any assets for less than fair market value or
     enter into any sale and leaseback agreement covering any of its fixed or
     capital assets.

(g)  Voluntarily suspend its business.

7.23 ERISA PLANS.  To give prompt written notice to the Bank of:

(a)  The occurrence of any reportable event under Section 4043(b) of ERISA for
     which the PBGC requires 30 day notice.

(b)  Any action by the Borrower to terminate or withdraw from a Plan or the
     filing of any notice of intent to terminate under Section 4041 of ERISA.

(c)  Any notice of noncompliance made with respect to a Plan under Section
     4041(b) of ERISA.

(d)  The commencement of any proceeding with respect to a Plan under Section
     4042 of ERISA.

8.   HAZARDOUS WASTE.  The Borrower will indemnify and hold harmless the Bank
from any loss or liability directly or indirectly arising out of the use,
generation, manufacture, production, storage, release, threatened release,
discharge, disposal or presence of a hazardous substance. This indemnity will
apply whether the hazardous substance is on, under or about the Borrower's
property or operations or property leased to the Borrower. The indemnity
includes but is not limited to attorneys' fees (including the reasonable
estimate of the allocated cost of in-house counsel and staff). The indemnity
extends to the Bank, its parent, subsidiaries and all of their directors,
officers, employees, agents, successors, attorneys and assigns. For these
purposes, the term "hazardous substances" means any substance which is or
becomes designated as "hazardous" or "toxic" under any federal, state or local
law. This indemnity will survive repayment of the Borrower's obligations to the
Bank.

9.   DEFAULT.  If any of the following events occur, the Bank may do one or more
of the following: declare the Borrower in default, stop making any additional
credit available to the Borrower, and require the Borrower to repay its entire
debt immediately and without prior notice. If an event of default occurs under
the paragraph entitled "Bankruptcy" below with respect to the Borrower, the
entire debt outstanding under this Agreement will automatically be due
immediately.

9.1  FAILURE TO PAY.  The Borrower fails to make a payment under this Agreement
when due.

9.2  LIEN PRIORITY.  The Bank fails to have an enforceable first lien (except
for any prior liens to which the Bank has consented in writing) on or security
interest in any property given as security for the extensions of credit under
this Agreement.

9.3  FALSE INFORMATION.  The Borrower has given the Bank false or misleading
information or representations.

9.4  BANKRUPTCY.  The Borrower files a bankruptcy petition, a bankruptcy
petition is filed against the Borrower, or the Borrower makes a general
assignment for the benefit of creditors.

9.5  RECEIVERS.  A receiver or similar official is appointed for the Borrower's
business, or the business is terminated.



                                                                              11
<PAGE>   12
9.6  JUDGMENTS. Any judgments or arbitration awards are entered against the
Borrower, or the Borrower enters into any settlement agreements with respect to
any litigation or arbitration, in an aggregate amount of One Million and 
No/100 Dollars ($1,000,000.00) or more in excess of any insurance coverage.

9.7  GOVERNMENT ACTION. Any government authority takes action that the Bank 
believes materially adversely affects the Borrower's financial condition or 
ability to repay.

9.8  MATERIAL ADVERSE CHANGE. A material adverse change occurs in the 
Borrower's financial condition, properties or prospects, or ability to repay 
the extensions of credit under this Agreement.

9.9  CROSS-DEFAULT. Any default occurs under any agreement in connection with 
any credit the Borrower has obtain from anyone else or which the Borrower has 
guaranteed.

9.10 DEFAULT UNDER RELATED DOCUMENTS. Any guaranty, subordination agreement, 
security agreement, deed of trust, or other document required by this Agreement 
is violated or no longer in effect.

9.11 OTHER BANK AGREEMENTS. The Borrower fails to meet the conditions of, or 
fails to perform any obligation under any other agreement the Borrower has with 
the Bank or any affiliate of the Bank.

9.12 ERISA PLANS. The occurrences of any one or more of the following events 
with respect to the Borrower, provided such event or events could reasonably 
be expected, in the judgment of the Bank, to subject the Borrower to any tax, 
penalty or liability (or any combination of the foregoing) which, in the 
aggregate, could have a material adverse effect on the financial condition of 
the Borrower with respect to a Plan:

(a)  A reportable event shall occur with respect to a Plan which is, in the 
     reasonable judgment of the Bank, likely to result in the termination of 
     such Plan for purposes of Title IV of ERISA.

(b)  Any Plan termination (or commencement of proceedings to terminate a Plan) 
     or the Borrower's full or partial withdrawal from a Plan.

9.13 OTHER BREACH UNDER AGREEMENT. The Borrower fails to meet the conditions of,
or fails to perform any obligation under, any term of this Agreement not
specifically referred to in this Article. If, in the Bank's opinion, the breach
is capable of being remedied, then the breach will not be considered an event of
default under this Agreement for a period of ten (10) days after the date on
which the Bank gives written notice of the breach to the Borrower; provided,
however, that the Bank will not be obligated to extend any additional credit to
the Borrower during that period.

10.  ENFORCING THIS AGREEMENT; MISCELLANEOUS

10.1 GAAP. Except as otherwise stated in this Agreement, all financial
information provided to the Bank and all financial covenants will be made under
generally accepted accounting principles, consistently applied.

10.2 ARIZONA LAW. This Agreement is governed by Arizona law.

10.3 SUCCESSORS AND ASSIGNEES. This Agreement is binding on the Borrower's and
the Bank's successors and assignees. The Borrower agrees that it may not assign
this Agreement without the Bank's prior consent. The Bank may sell
participations in or assign this loan, and may exchange financial information
about the Borrower with actual or potential participants or assignees. If a
participation is sold or the loan is assigned, the purchaser will have the right
of set-off against the Borrower.

10.4 ARBITRATION

(a)  This paragraph concerns the resolution of any controversies or claims 
     between the Borrower and the Bank including, but not limited to, those that
     arise from:

     (i)  This Agreement (including any renewals, extensions or modifications of
          this Agreement);

     (ii) Any document, agreement or procedure related to, or delivered in 
          connection with this Agreement;




                                                                              12
 


 
<PAGE>   13
     (iii)     Any violation of this Agreement; or

     (iv)      Any claims for damages resulting from any business 
               conducted between the Borrower and the Bank, including 
               claims for injury to persons, property or business interest 
               (torts).

(b)  At the request of the Borrower or the Bank, any such controversies or 
     claims will be settled by arbitration in accordance with the United States 
     Arbitration Act. The United States Arbitration Act will apply even though 
     this Agreement provides that it is governed by Arizona law.

(c)  Arbitration proceedings will be administered by the American Arbitration 
     Association and will be subject to its commercial rules of arbitration.

(d)  For purposes of the application of the statute of limitations, the filing 
     of an arbitration pursuant to this paragraph is the equivalent of the 
     filing of a lawsuit, and any claim or controversy which may be arbitrated 
     under this paragraph is subject to any applicable statute of limitations. 
     The arbitrators will have the authority to decide whether any such claim 
     or controversy is barred by the statute of limitations and, if so, to 
     dismiss the arbitration on that basis.

(e)  If there is a dispute as to whether an issue is arbitrable, the 
     arbitrators will have the authority to resole any such dispute.

(f)  The decision that results from an arbitration proceeding may be submitted 
     to any authorized court of law to be confirmed and enforced.

(g)  This provision does not limit the right of the Borrower or the Bank to:

     (i)   Exercise self-help remedies such as setoff;

     (ii)  Foreclose against or sell any real or personal property collateral;
           or

     (iii) Act in a court of law, before, during or after the arbitration 
           proceeding to obtain:

          (A)  an interim remedy; and/or

          (B)  additional or supplementary remedies.

(h)  The pursuit of or a successful action for interim, additional or 
     supplementary remedies, or the filing of a court action, does not 
     constitute a waiver of the right of the Borrower or the Bank, including the
     suing party, to submit the controversy or claim to arbitration if the 
     other party contests the lawsuit.

(i)  If the Bank forecloses against any real property securing this Agreement, 
     the Bank has the option to exercise the power of sale under the deed of 
     trust or mortgage, or to proceed by judicial foreclosure.

10.5 SEVERABILITY; WAIVERS. If any part of this Agreement is not enforceable,
the rest of the Agreement may be enforced. The Bank retains all rights, even if
it makes a loan after default. If the Bank waives a default, it may enforce a
later default. Any consent or waiver under this Agreement must be in writing.
           
10.6 ADMINISTRATION COSTS. The Borrower shall pay the Bank for all reasonable 
costs incurred by the Bank in connection with administering this Agreement.

10.7 ATTORNEYS' FEES. The Borrower shall reimburse the Bank for any reasonable
costs and attorneys' fees incurred by the Bank in connection with the
enforcement or preservation of any rights or remedies under this Agreement and
any other documents executed in connection with this Agreement, and including
any amendment, waiver, "workout" or restructuring under this Agreement. In the
event of a lawsuit or arbitration proceeding, the prevailing party is entitled
to recover costs and reasonable attorneys' fees incurred in connection with the
lawsuit or arbitration proceeding, as determined by the court or arbitrator. As
used in this paragraph, "attorneys' fees" includes  



                                                                              13
<PAGE>   14
the allocated costs of in-house counsel.

10.8   ONE AGREEMENT.  This Agreement and any related security or other
agreements required by this Agreement, collectively:

(a)    Represent the sum of the understandings and agreements between the Bank
       and the Borrower concerning this credit; and

(b)    Replace any prior oral or written agreements between the Bank and the
       Borrower concerning this credit; and

(c)    Are intended by the Bank and the Borrower as the final, complete and
       exclusive statement of the terms agreed to by them.

In the event of any conflict between this Agreement and any other agreements
required by this Agreement, this Agreement will prevail.

10.9   EXCHANGE OF INFORMATION.  The Borrower agrees that the Bank may exchange
financial information about the Borrower with BankAmerica Corporation affiliates
and other related entities.

10.10  USURY LAWS.  This paragraph covers the transactions described in this
Agreement and any other agreements with the Bank or its affiliates executed in
connection with this Agreement, to the extent they are subject to the Arizona
usury laws (the "Transactions"). The Borrower understands and believes that the
Transactions comply with the Arizona usury laws. However, if any interest or
other charges paid or payable in connection with the Transactions are ever
determined to exceed the maximum amount permitted by law, the Borrower agrees
that:

(a)    The amount of interest or other charges payable by the Borrower pursuant
       to the Transactions shall be reduced to the maximum amount permitted by
       law; and

(b)    Any excess amount previously collected from the Borrower in connection
       with the Transactions which exceeded the maximum amount permitted by law
       will be credited against the then outstanding principal balance. If the
       outstanding principal balance has been repaid in full, the excess amount
       paid will be refunded to the Borrower.

All fees, charges, goods, things in action or any other sums or things of value,
other than interest at the interest rate described in this Agreement, paid or
payable by the Borrower (collectively the "Additional Sums"), that may be deemed
to be interest with respect to the Transactions, shall, for the purposes of any
laws of the State of Arizona that may limit the maximum amount of interest to be
charged with respect to the Transactions, be payable by Borrower as, and shall
be deemed to be, additional interest. For such purposes only, the agreed upon
and "contracted for rate of interest" of the Transactions shall be deemed to be
increased by the rate of interest resulting from the Additional Sums.

10.11  NOTICES.  All notices required under this Agreement shall be personally
delivered or sent by first class mail, postage prepaid, to the addresses on the
signature page of this Agreement, or to such other addresses as the Bank and the
Borrower may specify from time to time in writing.

10.12  HEADINGS.  Article and paragraph headings are for reference only and
shall not affect the interpretation or meaning of any provisions of this
Agreement.



                                                                              14

<PAGE>   15
This Agreement is executed as of the date stated at the top of the first page.


BANK OF AMERICA NATIONAL TRUST AND SAVINGS      VENTANA MEDICAL SYSTEMS, INC.
ASSOCIATION



/s/ SEAN DICKES                                 /s/ PIERRE SICE
----------------------------------              ------------------------------
By:  Sean Dickes, Vice President                By: Pierre Sice, Vice President,
                                                Chief Financial Officer


Address where notices to the Bank               Address where notices to the 
are to be sent                                  Borrower are to be sent


Tucson Commercial, #2322                        3865 N. Business Center Drive
33 North Stone, 6th Floor                       Tucson, Arizona 85705
Tucson, Arizona 85701






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