Document:

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                     AMENDED AND RESTATED CREDIT AGREEMENT

                THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of
March 29, 1999, is entered into by and among:

                (1)     ADAC LABORATORIES, a California corporation
        ("BORROWER");

                (2)     Each of the financial institutions from time to time
        listed in SCHEDULE I hereto, as amended from time to time (such
        financial institutions to be referred to herein collectively as the
        "LENDERS"); and

                (3)     ABN AMRO BANK N.V., a Netherlands public company acting
        through its San Francisco International Branch, as agent for the Lenders
        (in such capacity, "AGENT").

                                   RECITALS

                A.      Borrower, Agent and certain of the Lenders are parties
to that certain Credit Agreement, dated as of July 31, 1996 (as amended, the
"EXISTING CREDIT AGREEMENT"), pursuant to which such Lenders have provided to
Borrower certain credit facilities upon the terms and subject to the conditions
set forth therein.

                B.      Borrower has requested Agent and such Lenders to amend
the Existing Credit Agreement in certain respects, including without limitation,
to add a new Person as a Lender and to increase the amount available for
borrowing under the Existing Credit Agreement.

                C.      Agent, such Lenders and the new Lender have agreed to
amend the Existing Credit Agreement upon the terms and subject to the conditions
set forth herein.  For convenience of reference, the parties hereto wish to
restate the Existing Credit Agreement as so amended in its entirety.

                                   AGREEMENT

                NOW, THEREFORE, in consideration of the above Recitals and the
mutual covenants herein contained, the parties hereto hereby agree that the
Existing Credit Agreement shall be amended and restated as of the date hereof to
read in its entirety as follows

SECTION I.      INTERPRETATION.

     1.01.      DEFINITIONS.  Unless otherwise indicated in this Agreement or
any other Credit Document, each term set forth below, when used in this
Agreement or any other Credit Document, shall have the respective meaning given
to that term below or in the provision of this agreement or other document,
instrument or Agreement referenced below.

                "ABN" shall mean ABN AMRO Bank N.V., a Netherlands public
        company.

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                "ACQUISITION IN-PROCESS R&D CHARGES" shall mean non-recurring
        charges, not to exceed $50,000,000 (pre-tax) in the aggregate, to be
        taken by Borrower as a result of write-offs of in process research and
        development expenses and charges incurred in connection with the
        consummation of acquisitions by Borrower otherwise permitted pursuant to
        SUBPARAGRAPH 5.02(d).

                "ADAC Capital" shall mean ADAC Capital, LLC, a Delaware limited
        liability company and a wholly-owned Subsidiary of Borrower.

                "AFFILIATE" shall mean, with respect to any Person, (a) each
        Person that, directly or indirectly, owns or controls, whether
        beneficially or as a trustee, guardian or other fiduciary, five percent
        (5%) or more of any class of Equity Securities of such Person, (b) each
        Person that controls, is controlled by or is under common control with
        such Person or any Affiliate of such Person or (c) each of such Person's
        officers, directors, joint venturers and partners; PROVIDED, HOWEVER,
        that in no case shall Agent or any Lender be deemed to be an Affiliate
        of Borrower or any of its Subsidiaries for purposes of this Agreement.
        For the purpose of this definition, "control" of a Person shall mean the
        possession, directly or indirectly, of the power to direct or cause the
        direction of its management or policies, whether through the ownership
        of voting securities, by contract or otherwise.

                "AGENT" shall have the meaning given to that term in CLAUSE (3)
        OF THE INTRODUCTORY PARAGRAPH.

                "AGENT'S FEE LETTER" shall mean (a) prior to the First Amendment
        Effective Date, the letter agreement dated as of March 29, 1999 between
        Borrower and Agent and (b) after the First Amendment Effective Date, the
        letter agreement dated as of the First Amendment Effective Date between
        Borrower and Agent.

                "AGREEMENT" shall mean this Amended and Restated Credit
        Agreement.

                "AMENDED AND RESTATED GUARANTY" shall have the meaning given to
        that term in SUBPARAGRAPH 2.12(a).

                "AMENDED AND RESTATED NOTES" shall have the meaning given to
        that term in SUBPARAGRAPH 2.06(a).

                "APPLICABLE LENDING OFFICE" shall mean, with respect to any
        Lender, (a) initially, its office designated as such in SCHEDULE I (or,
        in the case of any Lender which becomes a Lender by an assignment
        pursuant to SUBPARAGRAPH 8.05(c), its office designated as such in the
        applicable Assignment Agreement) and (b) subsequently, such other office
        or offices as such Lender may designate to Agent as the office at which
        such Lender's Loans will thereafter be maintained and for the account of
        which all payments of principal of, and interest on, such Lender's Loans
        will thereafter be made.

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                "APPLICABLE MARGIN" shall mean, with respect to any Loan at any
        time, the per annum margin which is determined pursuant to the Pricing
        Grid and added to the Base Rate or LIBO Rate, as the case may be, for
        such Loan; PROVIDED, HOWEVER, that each Applicable Margin determined
        pursuant to the Pricing Grid shall be increased by two percent (2.00%)
        on the date an Event of Default occurs and shall continue at such
        increased rate unless and until such Event of Default is waived in
        accordance with this Agreement.

                "ASSIGNEE LENDER" shall have the meaning given to that term in
        SUBPARAGRAPH 8.05(c).

                "ASSIGNMENT" shall have the meaning given to that term in
        SUBPARAGRAPH 8.05(c).

                "ASSIGNMENT AGREEMENT" shall have the meaning given to that term
        in SUBPARAGRAPH 8.05(c).

                "ASSIGNMENT EFFECTIVE DATE" shall have, with respect to each
        Assignment Agreement, the meaning set forth therein.

                "ASSIGNOR LENDER" shall have the meaning given to that term in
        SUBPARAGRAPH 8.05(c).

                "BASE RATE" shall mean, on any day, the greater of (a) the Prime
        Rate in effect on such date and (b) the Federal Funds Rate for such day
        PLUS one-half percent (0.50%).

                "BASE RATE LOAN" shall mean, at any time, a Loan which then
        bears interest as provided in CLAUSE (i) OF SUBPARAGRAPH 2.01(c).

                "BNP" shall mean Banque National de Paris, acting through its
        San Francisco Branch.

                "BORROWER" shall have the meaning given to that term in CLAUSE
        (1) OF THE INTRODUCTORY PARAGRAPH.

                "BORROWER NOTE GUARANTIES" shall mean, collectively, all
        guaranties or related forms of Indebtedness executed by Borrower in
        favor of ABN, Sanwa, BNP or UBOC in connection with sales by Borrower to
        such Person of promissory notes or other instruments of indebtedness
        owed to Borrower and all other documents, instruments and agreements
        executed by Borrower and delivered to such Person in connection with
        such sales.
                "BORROWER IP SECURITY AGREEMENT" shall have the meaning given to
        that term in Subparagraph 2.12(b).

                "BORROWER SECURITY AGREEMENT" shall have the meaning given to
        that term in Subparagraph 2.12(b).

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                "BORROWING" shall mean a borrowing by Borrower consisting of the
        Loans made by each of the Lenders on the same date and of the same Type
        pursuant to a single Notice of Borrowing.

                "BUSINESS DAY" shall mean any day on which (a) commercial banks
        are not authorized or required to close in San Francisco, California or
        New York, New York and (b) if such Business Day is related to a LIBOR
        Loan, dealings in Dollar deposits are carried out in the London
        interbank market.

                "CAPITAL ADEQUACY REQUIREMENT" shall have the meaning given to
        that term in SUBPARAGRAPH 2.09(d).

                "CAPITAL ASSET" shall mean, with respect to any Person, any
        tangible fixed or capital asset owned or leased (in the case of a
        Capital Lease) by such Person, or any expense incurred by such Person
        that is required by GAAP to be reported as a non-current asset on such
        Person's balance sheet.

                "CAPITAL EXPENDITURES" shall mean, with respect to any Person
        and any period, all amounts expended by such Person during such period
        for the acquisition of Capital Assets (including all amounts paid or
        accrued on Capital Assets and other Indebtedness incurred or assumed to
        acquired Capital Assets but excluding Capital Assets acquired as a
        result of a consolidation or merger with any other Person or the
        acquisition of substantially all of the assets of any other Person).

                "CAPITALIZED SPARE PARTS 1999 NON-ORDINARY CHARGES" shall mean
        the non-ordinary charges, not to exceed $5,000,000 (pre-tax) in the
        aggregate, taken by Borrower in Borrower's fourth fiscal quarter in 1999
        as a result of the write-off of certain capitalized spare parts.

                "CAPITAL LEASES" shall mean any and all lease obligations that,
        in accordance with GAAP, are required to be capitalized on the books of
        a lessee.

                "CASH EQUIVALENTS" shall mean:

                        (a)     Direct obligations of, or obligations the
                principal and interest on which are unconditionally guaranteed
                by, the United States of America or obligations of any agency of
                the United States of America to the extent such obligations are
                backed by the full faith and credit of the United States of
                America, in each case maturing within one year from the date of
                acquisition thereof;

                        (b)     Certificates of deposit maturing within one year
                from the date of acquisition thereof issued by a commercial bank
                or trust company organized under the laws of the United States
                of America or a state thereof or that is a Lender, provided that
                (A) such deposits are denominated in Dollars, (B) such bank or
                trust company has capital, surplus and undivided profits of not
                less than $100,000,000 and (C) such bank or trust company has
                certificates of deposit or

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                other debt obligations rated at least A-1 (or its equivalent) by
                Standard and Poor's Ratings Group or P-1 (or its equivalent) by
                Moody's Investors Service, Inc.;

                        (c)     Open market commercial paper maturing within 270
                days from the date of acquisition thereof issued by a
                corporation organized under the laws of the United States of
                America or a state thereof, provided such commercial paper is
                rated at least A-1 (or its equivalent) by Standard and Poor's
                Ratings Group or P-1 (or its equivalent) by Moody's Investors
                Service, Inc.;

                        (d)     Any repurchase agreement entered into with a
                commercial bank or trust company organized under the laws of the
                United States of America or a state thereof or that is a Lender,
                provided that (A) such bank or trust company has capital,
                surplus and undivided profits of not less than $100,000,000, (B)
                such bank or trust company has certificates of deposit or other
                debt obligations rated at least A-1 (or its equivalent) by
                Standard and Poor's Ratings Group or P-1 (or its equivalent) by
                Moody's Investors Service, Inc., (C) the repurchase obligations
                of such bank or trust company under such repurchase agreement
                are fully secured by a perfected security interest in a security
                or instrument of the type described in CLAUSE (i), (ii) OR (iii)
                above and (D) such security or instrument so securing the
                repurchase obligations has a fair market value at the time such
                repurchase agreement is entered into of not less than 100% of
                such repurchase obligations; and

                        (e)     Other Investments permitted from time to time
                under Borrower's corporate investment policy as it exists on the
                date of this Agreement and as it may be amended from time to
                time with the approval of Agent.

                "CHANGE OF CONTROL" shall mean, with respect to Borrower, the
        occurrence of any of the following events:  (a) any person or group of
        persons (within the meaning of Section 13 or 14 of the Securities
        Exchange Act of 1934, as amended) shall (i) acquire beneficial ownership
        (within the meaning of Rule 13d-3 promulgated by the Securities and
        Exchange Commission under the Securities Exchange Act of 1934, as
        amended) of forty percent (40%) or more of the outstanding Equity
        Securities of Borrower entitled to vote for members of the board of
        directors or (ii) acquire all or substantially all of the assets of
        Borrower and its Subsidiaries taken as a whole or (b) during any period
        of twelve (12) consecutive calendar months, individuals who are
        directors of Borrower on the first day of such period ("Initial
        Directors") and any directors of Borrower who are specifically approved
        by two-thirds of the Initial Directors and previously-approved Directors
        shall cease to constitute a majority of the Board of Directors of
        Borrower before the end of such period.

                "CHANGE OF LAW" shall have the meaning given to that term in
        SUBPARAGRAPH 2.09(b).

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                "CLOSING DATE" shall mean the Business Day, not later than March
        31, 1999, that each of the conditions set forth in PARAGRAPH 3.01 and
        SCHEDULE 3.01 has been satisfied by Borrower or waived in writing by
        Agent on behalf of the Lenders.

                "Collateral" shall mean all property in which Agent or any
        Lender has a Lien to secure the Secured Obligations.

                "Collateral Certificate" shall mean the Collateral Certificate
        dated as of the First Amendment Effective Date executed by Borrower and
        delivered to Agent.

                "COMMITMENT" shall mean, with respect to any Lender at any time,
        such Lender's Proportionate Share at such time of the Total Commitment
        at such time.

                "COMMITMENT FEE PERCENTAGE" shall mean, with respect to the
        Unused Commitment at any time, the per annum rate which is determined
        pursuant to the Pricing Grid and used to calculate the Commitment Fees.

                "COMMITMENT FEES" shall have the meaning given to that term in
        SUBPARAGRAPH 2.03(b).

                "CONTINGENT OBLIGATION" shall mean, with respect to any Person,
        (a) any Guaranty Obligation of that Person; and (b) any direct or
        indirect obligation or liability, contingent or otherwise, of that
        Person (i) in respect of any Surety Instrument issued for the account of
        that Person or as to which that Person is otherwise liable for
        reimbursement of drawings or payments, (ii) to purchase any materials,
        supplies or other property from, or to obtain the services of, another
        Person if the relevant contract or other related document or obligation
        requires that payment for such materials, supplies or other property, or
        for such services, shall be made regardless of whether delivery of such
        materials, supplies or other property is ever made or tendered, or such
        services are ever performed or tendered, or (iii) in respect to any Rate
        Contract that is not entered into in connection with a bona fide hedging
        operation that provides offsetting benefits to such Person.  The amount
        of any Contingent Obligation shall (subject, in the case of Guaranty
        Obligations, to the last sentence of the definition of "Guaranty
        Obligation") be deemed equal to the maximum reasonably anticipated
        liability in respect thereof, and shall, with respect to ITEM (b)(iii)
        of this definition be marked to market on a current basis.

                "CONTRACTUAL OBLIGATION" of any Person shall mean, any
        indenture, note, lease, loan agreement, security, deed of trust,
        mortgage, security agreement, guaranty, instrument, contract, agreement
        or other form of contractual obligation or undertaking to which such
        Person is a party or by which such Person or any of its property is
        bound.

                "CREDIT DOCUMENTS" shall mean and include this Agreement, the
        Amended and Restated Notes, the Security Documents, the Amended and
        Restated Guaranty, all Rate Contracts of Borrower with any Lender
        related to any Loan and the Agent's Fee Letter; all other documents,
        instruments and agreements delivered to Agent or any Lender pursuant to
        PARAGRAPH 3.01; and all other documents, instruments and agreements

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        delivered by Borrower or any of its Subsidiaries to Agent or any Lender
        in connection with this Agreement on or after the date of this
        Agreement.

                "CREDIT EVENT" shall mean the making of any Loan, the conversion
        of any Loan into a LIBOR Loan or the selection of a new Interest Period
        for any LIBOR Loan.

                "DEBT/EBITDA RATIO" shall mean, with respect to Borrower and its
        Subsidiaries on the last day of any fiscal quarter, the ratio,
        determined on a consolidated basis in accordance with GAAP, of (a) the
        sum of the Funded Indebtedness of Borrower and its Subsidiaries at such
        time to (b) the EBITDA of Borrower and its Subsidiaries for the
        consecutive four-quarter period which ended on the last day of such
        fiscal quarter.

                "DEFAULT" shall mean any event or circumstance not yet
        constituting an Event of Default which with the giving of any notice or
        the lapse of any period of time or both, would become an Event of
        Default.

                "Disclosure Letter" shall mean (a) prior to the First Amendment
        Effective Date, the letter from Borrower to Agent, dated as of March
        29, 1999 which identified itself as the "Disclosure Letter" under this
        Agreement and (b) after the First Amendment Effective Date, the letter
        from Borrower to Agent, dated the First Amendment Effective Date, which
        identifies itself as the amended "Disclosure Letter" under this
        Agreement.

                "DOLLARS" and "$" shall mean the lawful currency of the United
        States of America and, in relation to any payment under this Agreement,
        same day or immediately available funds.

                "DOMESTIC SUBSIDIARY" shall mean each Subsidiary of Borrower
        which is "domestic" within the meaning of Section 7701(a)(4) of the IRC.

                "Domestic Subsidiary IP Security Agreement" shall have the
        meaning given to that term in Subparagraph 2.12(b).

                "Domestic Subsidiary Security Agreement" shall have the meaning
        given to that term in Subparagraph 2.12(b).

                "EBITDA" shall mean, with respect to Borrower and its
        Subsidiaries for any period, the sum of the following, determined on a
        consolidated basis in accordance with GAAP:

                        (a)     The net income of Borrower and its Subsidiaries
                for such period before provision for income taxes;

                                     PLUS

                        (b)     The sum (to the extent deducted in calculating
                such Adjusted Net Income) of (i) all Interest Expenses of
                Borrower and its Subsidiaries accrued

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                during such period and (ii) all depreciation and amortization
                expenses of Borrower and its Subsidiaries accrued during such
                period;

                                     PLUS

                        (c)     To the extent deducted in calculating such net
                income for such period under CLAUSE (a) above, (i) all
                Acquisition In-Process R&D Charges taken by Borrower and its
                Subsidiaries during such period, (ii) all 1999 Non-Recurring and
                Non-Ordinary Charges taken by Borrower and its Subsidiaries
                during such period, (iii) all Capitalized Spare Parts 1999
                Non-Ordinary Charges taken by Borrower and its Subsidiaries
                during such period and (iv) all Latin American Notes 1999
                Non-Ordinary Charges taken by Borrower and its Subsidiaries
                during such period.

                "EBITDAR" shall mean, with respect to Borrower and its
        Subsidiaries for any period, the sum of the following, determined on a
        consolidated basis in accordance with GAAP:

                        (a)     EBITDA of Borrower and its Subsidiaries for such
                period;

                                     PLUS

                        (b)     The sum of all lease Rental Obligations of
                Borrower and its Subsidiaries accrued during such period.

                "EBITDAR/FIXED CHARGE COVERAGE RATIO" shall mean, with respect
        to Borrower and its Subsidiaries for any period, the ratio, determined
        on a consolidated basis in accordance with GAAP, of:

                        (a)     EBITDAR of Borrower and its Subsidiaries for the
                consecutive four-quarter period which ended on the last day of
                such fiscal quarter;

                                      TO

                        (b)     The sum of (i) to the extent deducted in
                calculating such EBITDAR for such period, all Interest Expenses
                of Borrower and its Subsidiaries for such period, PLUS (ii) to
                the extent deducted in calculating such EBITDAR for such period,
                all payments of Rental Obligations made by Borrower and its
                Subsidiaries for such period, PLUS (iii) the aggregate principal
                amount of all long-term Indebtedness of Borrower and its
                Subsidiaries that matures during the consecutive four-quarter
                period immediately following such period.

                "ELIGIBLE ASSIGNEE" shall mean (a) a commercial bank organized
        under the laws of the United States, or any state thereof, and having a
        combined capital and surplus of at least $100,000,000; (b) a commercial
        bank organized under the laws of any other country which is a member of
        the Organization for Economic Cooperation and Development (the

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        "OECD"), or a political subdivision of any such country, and having a
        combined capital and surplus of at least $100,000,000, provided that
        such bank is acting through a branch or agency located in the United
        States; or (c) a Person that is primarily engaged in the business of
        commercial banking and that is (i) a Subsidiary of a Lender, (ii) a
        Subsidiary of a Person of which a Lender is a Subsidiary, or (iii) a
        Person of which a Lender is a Subsidiary.

                "EMPLOYEE BENEFIT PLAN" shall mean any employee benefit plan
        within the meaning of section 3(3) of ERISA maintained or contributed to
        by Borrower or any ERISA Affiliate, other than a Multiemployer Plan.

                "ENVIRONMENTAL LAWS" shall mean all Requirements of Law relating
        to the protection of human health and the environment, including,
        without limitation, all Requirements of Law, pertaining to reporting,
        licensing, permitting, transportation, storage, disposal, investigation,
        and remediation of emissions, discharges, releases, or threatened
        releases of Hazardous Materials, chemical substances, pollutants,
        contaminants, or hazardous or toxic substances, materials or wastes,
        whether solid, liquid, or gaseous in nature, into the air, surface
        water, groundwater, or land, or relating to the manufacture, processing,
        distribution, use, treatment, storage, disposal, transport, or handling
        of chemical substances, pollutants, contaminants, or hazardous or toxic
        substances, materials, or wastes, whether solid, liquid, or gaseous in
        nature.

                "EQUITY SECURITIES" of any Person shall mean (a) all common
        stock, preferred stock, participations, shares, partnership interests or
        other equity interests in and of such Person (regardless of how
        designated and whether or not voting or non-voting) and (b) all
        warrants, options and other rights to acquire any of the foregoing.

                "ERISA" shall mean the Employee Retirement Income Security Act
        of 1974, as the same may from time to time be amended or supplemented,
        including any rules or regulations issued in connection therewith.

                "ERISA AFFILIATE" shall mean any Person which is treated as a
        single employer with Borrower under Section 414 of the IRC.

                "EVENT OF DEFAULT" shall have the meaning given to that term in
        PARAGRAPH 6.01.

                "EXISTING CREDIT AGREEMENT" shall have the meaning given to that
        term in the RECITAL B.

                "FEDERAL FUNDS RATE" shall mean, for any day, the rate per annum
        set forth in the weekly statistical release designated as H.15(519), or
        any successor publication, published by the Federal Reserve Board
        (including any such successor publication, "H.15 (519)") for such day
        opposite the caption "Federal Funds (Effective)".  If on any relevant
        day, such rate is not yet published in H.15 (519), the rate for such day
        shall be the rate set forth in the daily statistical release designated
        as the Composite 3:30 p.m. Quotations for U.S. Government Securities, or
        any successor publication, published by the Federal

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        Reserve Bank of New York (including any such successor publication, the
        "Composite 3:30 p.m. Quotations") for such day under the caption
        "Federal Funds Effective Rate".  If on any relevant day, such rate is
        not yet published in either H.15 (519) or the Composite 3:30 p.m.
        Quotations, the rate for such day shall be the arithmetic means, as
        determined by Agent, of the rates quoted to Agent for such day by
        three (3) Federal funds brokers of recognized standing selected by
        Agent.

                "FEDERAL RESERVE BOARD" shall mean the Board of Governors of the
        Federal Reserve System.

                "FINANCIAL STATEMENTS" shall mean, with respect to any
        accounting period for any Person, statements of income, shareholders'
        equity and cash flows of such Person for such period, and a balance
        sheet of such Person as of the end of such period, setting forth in each
        case in comparative form figures for the corresponding period in the
        preceding fiscal year if such period is less than a full fiscal year or,
        if such period is a full fiscal year, corresponding figures from the
        preceding annual audit, all prepared in reasonable detail and in
        accordance with GAAP.

                "First Amendment Effective Date" shall mean August 17, 1999.

                "Foreign Subsidiary" shall mean each Subsidiary of Borrower
        which is "foreign" within the meaning of Section 7701(a)(5) of the IRC.

                "FUNDED INDEBTEDNESS" of any Person shall mean, without
        duplication:

                        (a)     All obligations of such Person evidenced by
                notes, bonds, debentures or other similar instruments and all
                other obligations of such Person for borrowed money (including
                obligations to repurchase receivables and other assets sold with
                recourse);

                        (b)     All obligations of such Person for the deferred
                purchase price of property or services (including obligations
                under letters of credit and other credit facilities which secure
                or finance such purchase price and obligations under "synthetic"
                leases), but excluding trade accounts payable, provided that
                (A) such accounts arise in the ordinary course of business and
                are not evidenced by a note or similar instrument and (B) no
                material part of any such account is more than ninety (90) days
                past due (unless subject to a bona fide dispute and for which
                adequate reserves have been established);

                        (c)     All obligations of such Person under conditional
                sale or other title retention agreements with respect to
                property acquired by such Person (to the extent of the value of
                such property if the rights and remedies of the seller or lender
                under such agreement in the event of default are limited solely
                to repossession or sale of such property);

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                        (d)     All obligations of such Person as lessee under
                or with respect to Capital Leases;

                        (e)     All non-contingent payment or reimbursement
                obligations of such Person under or with respect to Surety
                Instruments;

                        (f)     All Guaranty Obligations of such Person with
                respect to the obligations of other Persons of the types
                described in CLAUSES (a) - (e) above; and

                        (g)     All obligations of other Persons of the types
                described in CLAUSES (a) - (e) above to the extent secured by
                (or for which any holder of such obligations has an existing
                right, contingent or otherwise, to be secured by) any Lien in
                any property (including accounts and contract rights) of such
                Person, even though such Person has not assumed or become liable
                for the payment of such obligations.

                "GAAP" shall mean generally accepted accounting principles and
        practices as in effect in the United States of America from time to
        time, consistently applied.

                "GOVERNMENTAL AUTHORITY" shall mean any domestic or foreign
        national, state or local government, any political subdivision thereof,
        any department, agency, authority or bureau of any of the foregoing, or
        any other entity exercising executive, legislative, judicial, regulatory
        or administrative functions of or pertaining to government, including,
        without limitation, the Federal Deposit Insurance Corporation, the
        Federal Reserve Board, the Comptroller of the Currency, any central bank
        or any comparable authority.

                "GOVERNMENTAL CHARGES" shall mean, with respect to any Person,
        all levies, assessments, fees, claims or other charges imposed by any
        Governmental Authority upon such Person or any of its property or
        otherwise payable by such Person.

                "GOVERNMENTAL RULE" shall mean any law, rule, regulation,
        ordinance, order, code interpretation, judgment, decree, directive,
        guidelines, policy or similar form of decision of any Governmental
        Authority.

                "GUARANTY OBLIGATION" shall mean, with respect to any Person,
        any direct or indirect liability of that Person with respect to any
        indebtedness, lease, dividend, letter of credit or other obligation (the
        "primary obligations") of another Person (the "primary obligor"),
        including any obligation of that Person, whether or not contingent,
        (a) to purchase, repurchase or otherwise acquire such primary
        obligations or any property constituting direct or indirect security
        therefor, or (b) to advance or provide funds (i) for the payment or
        discharge of any such primary obligation, or (ii) to maintain working
        capital or equity capital of the primary obligor or otherwise to
        maintain the net worth or solvency or any balance sheet item, level of
        income or financial condition of the primary obligor, or (c) to purchase
        property, securities or services primarily for the purpose of assuring
        the owner of any such primary obligation of the ability of the primary
        obligor to make payment of such primary obligation, or (d) otherwise to
        assure or hold harmless the

                                       11

<PAGE>

        holder of any such primary obligation against loss in respect thereof.
        (Without limiting the generality of the foregoing definition, the
        Guaranty Obligations of Borrower shall include the obligations of
        Borrower under the Borrower Note Guaranties.) The amount of any
        Guaranty Obligation shall be deemed equal to the stated or
        determinable amount of the primary obligation in respect of which
        such Guaranty Obligation is made or, if not stated or if
        indeterminable, the maximum reasonably anticipated liability in respect
        thereof.

                "HAZARDOUS MATERIALS" shall mean all materials, substances and
        wastes which are classified or regulated as "hazardous," "toxic" or
        similar descriptions under any Environmental Law or which are hazardous,
        toxic, harmful or dangerous to human health.

                "INDEBTEDNESS" of any Person shall mean, without duplication:

                        (a)     All obligations of such Person evidenced by
                notes, bonds, debentures or other similar instruments and all
                other obligations of such Person for borrowed money (including
                non-contingent obligations to repurchase receivables and other
                assets sold with recourse;

                        (b)     All obligations of such Person for the deferred
                purchase price of property or services (including obligations
                under letters of credit and other credit facilities which secure
                or finance such purchase price and obligations under "synthetic"
                leases), but excluding trade accounts payable, provided that
                (A) such accounts arise in the ordinary course of business and
                are not evidenced by a note or similar instrument and (B) no
                material part of any such account is more than ninety (90) days
                past due (unless subject to a bona fide dispute and for which
                adequate reserves have been established);

                        (c)     All obligations of such Person under conditional
                sale or other title retention agreements with respect to
                property acquired by such Person (to the extent of the value of
                such property if the rights and remedies of the seller or lender
                under such agreement in the event of default are limited solely
                to repossession or sale of such property);

                        (d)     All obligations of such Person as lessee under
                or with respect to Capital Leases;

                        (e)     All obligations of such Person, contingent or
                otherwise, under or with respect to Surety Instruments;

                        (f)     All obligations of such Person, contingent or
                otherwise, under or with respect to Rate Contracts;

                                       12

<PAGE>

                        (g)     All Guaranty Obligations of such Person with
                respect to the obligations of other Persons of the types
                described in CLAUSES (a) - (f) above and all other Contingent
                Obligations of such Person; and

                        (h)     All obligations of other Persons of the types
                described in CLAUSES (a) - (f) above to the extent secured by
                (or for which any holder of such obligations has an existing
                right, contingent or otherwise, to be secured by) any Lien in
                any property (including accounts and contract rights) of such
                Person, even though such Person has not assumed or become liable
                for the payment of such obligations.

                "INTEREST ACCOUNT" shall have the meaning given to that term in
        SUBPARAGRAPH 2.06(b).

                "INTEREST EXPENSES" shall mean, with respect to any Person for
        any period, the sum, determined on a consolidated basis in accordance
        with GAAP, of all interest accruing on the Indebtedness of such Person
        during such period (including interest attributable to Capital Leases).

                "INTEREST PERIOD" shall mean, with respect to any LIBOR Loan,
        the time periods selected by Borrower pursuant to SUBPARAGRAPH 2.01(b)
        or SUBPARAGRAPH 2.01(d) which commences on the first day of such Loan or
        the effective date of any conversion and ends on the last day of such
        time period, and thereafter, each subsequent time period selected by
        Borrower pursuant to SUBPARAGRAPH 2.01(e) which commences on the last
        day of the immediately preceding time period and ends on the last day of
        that time period.

                "INVESTMENT" of any Person shall mean any loan or advance of
        funds by such Person to any other Person (other than advances to
        employees of such Person for moving and travel expenses, drawing
        accounts and similar expenditures in the ordinary course of business),
        any purchase or other acquisition of any Equity Securities or
        Indebtedness of any other Person, any capital contribution by such
        Person to or any other investment by such Person in any other Person
        (including any Guaranty Obligations of such Person and any indebtedness
        of such Person of the type described in CLAUSE (h) of the definition of
        "Indebtedness" on behalf of any other Person); PROVIDED, HOWEVER, that
        Investments shall not include (a) accounts receivable or other
        indebtedness owed by customers of such Person which are current assets
        and arose from sales of inventory in the ordinary course of such
        Person's business for ordinary terms or (b) prepaid expenses of such
        Person incurred and prepaid in the ordinary course of business.

                "IRC" shall mean the Internal Revenue Code of 1986, as amended
        from time to time.

                "LATIN AMERICAN NOTES 1999 NON-ORDINARY CHARGES" shall mean the
        non-ordinary charges, not to exceed $9,000,000 (pre-tax) in the
        aggregate, taken by Borrower in Borrower's third and fourth fiscal
        quarters in 1999 as a result of the write-off of certain Latin American
        promissory notes and related obligations.

                                       13

<PAGE>

                "LENDERS" shall have the meaning given to that term in CLAUSE
        (2) OF THE INTRODUCTORY PARAGRAPH.

                "LIBO RATE" shall mean, with respect to any Interest Period for
        the LIBOR Loans in any Borrowing consisting of LIBOR Loans, a rate per
        annum equal to the quotient of (a) the arithmetic mean (rounded upward
        if necessary to the nearest 1/16 of one percent) of the rates per annum
        provided to Agent by each of the Reference Banks as the rate at which
        Dollar deposits are offered to such Reference Bank in the London
        interbank market on the second Business Day prior to the first day of
        such Interest Period at or about 11:00 A.M. (London time) (for delivery
        on the first day of such Interest Period) in an amount substantially
        equal to such Reference Bank's LIBOR Loan in such Borrowing and for a
        term comparable to such Interest Period, DIVIDED BY (b) one minus the
        Reserve Requirement for such Loans in effect from time to time.  If for
        any reason any of the Reference Banks fails to provide Agent with a rate
        on any day as provided in CLAUSE (a) of the preceding sentence, Agent
        shall calculate the LIBO Rate based upon the rate(s) provided by the
        remaining Reference Bank(s).  The LIBO Rate shall be adjusted
        automatically as to all LIBOR Loans then outstanding as of the effective
        date of any change in the Reserve Requirement.

                "LIBOR LOAN" shall mean, at any time, a Loan which then bears
        interest as provided in CLAUSE (ii) OF SUBPARAGRAPH 2.01(c).

                "LIEN" shall mean, with respect to any property, any security
        interest, mortgage, pledge, lien, charge or other encumbrance in, of, or
        on such property or the income therefrom, including, without limitation,
        the interest of a vendor or lessor under a conditional sale agreement,
        Capital Lease or other title retention agreement, or any agreement to
        provide any of the foregoing, and the filing of any financing statement
        or similar instrument under the Uniform Commercial Code or comparable
        law of any jurisdiction.

                "LOAN" shall have the meaning given to that term in SUBPARAGRAPH
        2.01(a).

                "MARGIN STOCK" shall have the meaning given to that term in
        Regulation U issued by the Federal Reserve Board, as amended from time
        to time, and any successor regulation thereto.

                "MATERIAL ADVERSE EFFECT" shall mean a material adverse effect
        on (a) the business, assets, operations, prospects or financial or other
        condition of Borrower and its Subsidiaries on a consolidated basis
        (other than occurring as a result of the Capitalized Spare Parts 1999
        Non-Ordinary Charges or the Latin American Notes 1999 Non-Ordinary
        Charges); (b) the ability of Borrower to pay or perform the Obligations
        in accordance with the terms of this Agreement and the other Credit
        Documents; (c) the rights and remedies of Agent or any Lender under this
        Agreement, the other Credit Documents or any related document,
        instrument or agreement; or (d) the value of the Collateral, Agent's or
        any Lender's security interest in the Collateral or the perfection or
        priority of such security interests.

                                       14

<PAGE>

                "MATURITY" shall mean, with respect to any Loan, interest, fee
        or other amount payable by Borrower under this Agreement or the other
        Credit Documents, the date such Loan, interest, fee or other amount
        becomes due, whether upon the stated maturity or due date, upon
        acceleration or otherwise.

                "MATURITY DATE" shall mean March 29, 2002 or, if such date is
        extended from time to time pursuant to SUBPARAGRAPH 2.01(h), any later
        date to which so extended.

                "MATURITY DATE EXTENSION REQUEST" shall have the meaning given
        to that term in SUBPARAGRAPH 2.01(h).

                "MULTIEMPLOYER PLAN" shall mean any multiemployer plan within
        the meaning of section 3(37) of ERISA maintained or contributed to by
        Borrower or any ERISA Affiliate.

                "NET PROCEEDS" shall mean, with respect to any sale or issuance
        of any Equity Security or the incurrence of any Indebtedness by any
        Person, the aggregate consideration received by such Person from such
        sale, issuance or incurrence LESS the sum of the actual amount of the
        reasonable fees and commissions payable to Persons other than such
        Person or any Affiliate of such Person, the reasonable legal expenses
        and the other reasonable costs and expenses directly related to such
        sale, issuance or incurrence that are to be paid by such Person.

                "1999 LITIGATION RESERVE" shall mean the litigation reserve, not
        to exceed $1,000,000 (pre-tax) in the aggregate, taken by Borrower in
        Borrower's fourth fiscal quarter in 1999.

                "1999 NON-RECURRING AND NON-ORDINARY CHARGES" shall mean the
        non-recurring and non-ordinary charges, not to exceed $37,000,000
        (pre-tax) in the aggregate, taken by Borrower in Borrower's second,
        third and fourth fiscal quarters 1999, other than the Latin American
        Notes 1999 Non-Ordinary Charges and the Capitalized Spare PartS 1999
        Non-Ordinary Charges.

                "NOTICE OF BORROWING" shall have the meaning given to that term
        in SUBPARAGRAPH 2.01(b).

                "NOTICE OF CONVERSION" shall have the meaning given to that term
        in SUBPARAGRAPH 2.01(d).

                "NOTICE OF INTEREST PERIOD SELECTION" shall have the meaning
        given to that term in SUBPARAGRAPH 2.01(e).

                "OBLIGATIONS" shall mean and include, with respect to Borrower,
        all loans, advances, debts, liabilities, and obligations, howsoever
        arising, owed by Borrower to Agent or any Lender of every kind and
        description (whether or not evidenced by any note or instrument and
        whether or not for the payment of money), direct or indirect, absolute

                                       15

<PAGE>

        or contingent, due or to become due, now existing or hereafter arising
        pursuant to the terms of this Agreement or any of the other Credit
        Documents, including without limitation all interest, fees, charges,
        expenses, attorneys' fees and accountants' fees chargeable to Borrower
        or payable by Borrower hereunder or thereunder.

                "PARTICIPANT" shall have the meaning given to that term in
        SUBPARAGRAPH 8.05(b).

                "PBGC" shall mean the Pension Benefit Guaranty Corporation, or
        any successor thereto.

                "PERMITTED INDEBTEDNESS" shall have the meaning given to that
        term in SUBPARAGRAPH 5.02(a).

                "PERMITTED LIENS" shall have the meaning given to that term in
        SUBPARAGRAPH 5.02(b).

                "PERSON" shall mean and include an individual, a partnership, a
        corporation (including a business trust), a joint stock company, an
        unincorporated association, a limited liability company, a joint
        venture, a trust or other entity or a Governmental Authority.

                "PLEDGE AGREEMENT" shall have the meaning given to that term in
        SUBPARAGRAPH 2.12(b).

                "PRICING GRID" shall mean SCHEDULE 1.01(a).

                "PRIME RATE" shall mean the per annum rate publicly announced by
        ABN from time to time at its Chicago office as its prime commercial
        lending rate.  The Prime Rate is determined by ABN from time to time as
        a means of pricing credit extensions to some customers and is neither
        directly tied to any external rate of interest or index nor necessarily
        the lowest rate of interest charged by ABN at any given time for any
        particular class of customers or credit extensions.  Any change in the
        Base Rate resulting from a change in the Prime Rate shall become
        effective on the Business Day on which each change in the Prime Rate
        occurs.

                "PRIMARY SECURED OBLIGATIONS" shall mean, collectively, (a) the
        Obligations and (b) the obligations of Borrower to ABN (as long as ABN
        remains a Lender hereunder) under any Borrower Note Guaranties in favor
        of ABN (or any replacement financing thereof) in a principal amount not
        exceeding $4,500,000.

                "PRIOR SECURITY DOCUMENTS" shall mean and include the "Security
        Agreement", the "Pledge Agreement", the "IP Security Agreement" (as each
        such term is defined in the Existing Credit Agreement), and all other
        instruments, agreements, certificates, opinions and documents (including
        Uniform Commercial Code financing statements and fixture filings and
        landlord waivers) previously

                                       16

<PAGE>

        delivered to Agent or any Lender in connection with the Existing Credit
        Agreement, other than the Guaranties.

                "PROPORTIONATE SHARE" shall mean, with respect to each Lender,
        the percentage set forth under the caption "Proportionate Share"
        opposite such Lender's name on SCHEDULE I, or, if changed, such
        percentage as may be set forth for such Lender in the Register.

                "RATE CONTRACTS" shall mean swap agreements (as that term is
        defined in Section 101 of the Federal Bankruptcy Reform Act of 1978, as
        amended) and any other agreements or arrangements designed to provide
        protection against fluctuations in interest or currency exchange rates.

                "REFERENCE BANKS" shall mean ABN, Sanwa and BNP.

                "REGISTER" shall have the meaning given to that term in
        SUBPARAGRAPH 8.05(d).

                "RENTAL OBLIGATIONS" shall mean all present and future
        obligations of Borrower or any of its Subsidiaries under rental
        agreements or leases of real or personal property, other than (a)
        obligations that can be terminated by the giving of notice without
        liability to Borrower or such Subsidiary in excess of the liability for
        rent due as of the date on which such notice is given and under which no
        penalty or premium is paid as a result of any such termination, and (b)
        current obligations in respect of Capital Leases or "synthetic leases".

                "REPORTABLE EVENT" shall have the meaning given to that term in
        ERISA and applicable regulations thereunder.

                "REQUIRED LENDERS" shall mean (a) at any time Loans are
        outstanding, Lenders holding sixty-six and two-thirds percent (66 2/3%)
        or more of the aggregate principal amount of such Loans and (b) at any
        time no Loans are outstanding, Lenders whose Proportionate Shares equal
        or exceed sixty-six and two-thirds percent (66 2/3%).

                "REQUIREMENT OF LAW" applicable to any Person shall mean (a) the
        Articles or Certificate of Incorporation and By-laws, Partnership
        Agreement or other organizational or governing documents of such Person,
        (b) any Governmental Rule applicable to such Person, (c) any license,
        permit, approval or other authorization granted by any Governmental
        Authority to or for the benefit of such Person or (d) any judgment,
        decision or determination of any Governmental Authority or arbitrator,
        in each case applicable to or binding upon such Person or any of its
        property or to which such Person or any of its property is subject.

                "RESERVE REQUIREMENT" shall mean, with respect to any day in an
        Interest Period for a LIBOR Loan, the aggregate of the reserve
        requirement rates (expressed as a decimal) in effect on such day for
        eurocurrency funding (currently referred to as "Eurocurrency
        liabilities" in Regulation D of the Federal Reserve Board) maintained
        by a

                                        17

<PAGE>

        member bank of the Federal Reserve System.  As used herein, the term
        "reserve requirement" shall include, without limitation, any basic,
        supplemental or emergency reserve requirements imposed on Lender by any
        Governmental Authority.

                "RESPONSIBLE OFFICER" shall mean, with respect to Borrower, the
        Chairman, Chief Executive Officer, Chief Operating Officer, President,
        Chief Financial Officer, Treasurer or General Counsel of Borrower (or,
        if the titles are changed, the persons having similar responsibilities
        for Borrower).

                "SANWA" shall mean Sanwa Bank California, a California banking
        corporation.

                "SECONDARY SECURED OBLIGATIONS" shall mean, collectively, to the
        extent such obligations are not Primary Secured Obligations, (a) the
        obligations of Borrower under any Borrower Note Guaranties; (b) the
        obligations of Borrower or any of its Subsidiaries to any Lender under,
        on account of or otherwise in connection with Rate Contracts; and (c)
        the obligations of Borrower or any of its Subsidiaries to any Lender
        under, on account of or otherwise in connection with Surety Instruments.

                "SECURED OBLIGATIONS" shall mean, collectively, the Primary
        Secured Obligations and the Secondary Secured Obligations.

                "SECURITY DOCUMENTS" shall mean and include the Borrower
        Security Agreement, the Domestic Subsidiary Security Agreements, the
        Borrower IP Security Agreement, the Domestic Subsidiary IP Security
        Agreements, the Pledge Agreement and all other instruments, agreements,
        certificates, opinions and documents (including Uniform Commercial Code
        financing statements and fixture filings and landlord waivers)
        delivered to Agent or any Lender in connection with  any Collateral or
        to secure the Secured Obligations.

                "SUBSIDIARY" of any Person shall mean (a) any corporation of
        which more than 50% of the issued and outstanding Equity Securities
        having ordinary voting power to elect a majority of the Board of
        Directors of such corporation (irrespective of whether at the time
        capital stock of any other class or classes of such corporation shall or
        might have voting power upon the occurrence of any contingency) is at
        the time directly or indirectly owned or controlled by such Person, by
        such Person and one or more of its other Subsidiaries or by one or more
        of such Person's other Subsidiaries, (b) any partnership, joint venture,
        or other association of which more than 50% of the equity interest
        having the power to vote, direct or control the management of such
        partnership, joint venture or other association is at the time owned and
        controlled by such Person, by such Person and one or more of the other
        Subsidiaries or by one or more of such Person's other Subsidiaries or
        (c) any other Person included in the Financial Statements of such Person
        on a consolidated basis.

                                        18

<PAGE>

                "SURETY INSTRUMENTS" shall mean all letters of credit (including
        standby and commercial), banker's acceptances, bank guaranties, shipside
        bonds, surety bonds and similar instruments.

                "TANGIBLE NET WORTH" shall mean, with respect to Borrower and
        its Subsidiaries at any time, the remainder at such time, determined on
        a consolidated basis in accordance with GAAP, of (a) the total assets of
        Borrower and its Subsidiaries MINUS (b) the sum (without limitation and
        without duplication of deductions) of (i) the total liabilities of
        Borrower and its Subsidiaries, (ii) all reserves established by Borrower
        and its Subsidiaries for anticipated losses and expenses (to the extent
        not deducted in calculating total assets in CLAUSE (a) above), (iii) all
        intangible assets of Borrower and its Subsidiaries (to the extent
        included in calculating total assets in CLAUSE (a) above), including,
        without limitation, goodwill (including any amounts, however designated
        on the balance sheet, representing the cost of acquisition of businesses
        and investments in excess of underlying tangible assets), trademarks,
        trademark rights, trade name rights, copyrights, patents, patent rights,
        licenses, unamortized debt discount, marketing expenses, organizational
        expenses, non-compete agreements and deferred research and development
        and (iv) all loans owed to Borrower and its Subsidiaries by officers,
        directors and employees of Borrower and its Subsidiaries.

                "TAXES" shall have the meaning given to such term in
        SUBPARAGRAPH 2.10(a).

                "TOTAL COMMITMENT" shall mean, at any time, Seventy Five Million
        Dollars ($75,000,000) or, if such amount is reduced pursuant to
        SUBPARAGRAPH 2.02(a), the amount to which so reduced and in effect at
        such time.

                "TYPE" shall mean, with respect to any Loan or Borrowing at any
        time, the classification of such Loan or Borrowing by the type of
        interest rate it then bears, whether an interest rate based upon the
        Base Rate or the LIBO Rate.

                "UBOC" shall mean Union Bank of California, a California banking
        corporation.

                "UGM ACQUISITION" shall mean the acquisition of substantially
        all of the assets and/or stock of UGM Laboratory, a Pennsylvania
        corporation and UGM Medical Systems, Inc., a Pennsylvania corporation.

                "UNUSED COMMITMENT" shall mean, at any time, the remainder of
        (a) the Total Commitment at such time minus (b) the aggregate principal
        amount of all Loans outstanding at such time.

     1.02.      GAAP.  Unless otherwise indicated in this Agreement or any other
Credit Document, all accounting terms used in this Agreement or any other Credit
Document shall be construed, and all accounting and financial computations
hereunder or thereunder shall be computed, in accordance with GAAP.  If GAAP
changes during the term of this Agreement such that any covenants contained
herein would then be calculated in a different manner or with different
components, Borrower, the Lenders and Agent agree to negotiate in good faith to

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<PAGE>

amend this agreement in such respects as are necessary to conform those
covenants as criteria for evaluating borrower's financial condition to
substantially the same criteria as were effective prior to such change in GAAP;
PROVIDED, HOWEVER, that, until Borrower, the Lenders and Agent so amend this
Agreement, all such covenants shall be calculated in accordance with GAAP as in
effect immediately prior to such change.

     1.03.      HEADINGS.  Headings in this Agreement and each of the other
Credit Documents are for convenience of reference only and are not part of the
substance hereof or thereof.

     1.04.  PLURAL TERMS.  All terms defined in this Agreement or any other
Credit Document in the singular form shall have comparable meanings when used in
the plural form and VICE VERSA.

     1.05.  TIME.  All references in this Agreement and each of the other Credit
Documents to a time of day shall mean San Francisco, California time, unless
otherwise indicated.

     1.06.      GOVERNING LAW.  This Agreement and each of the other Credit
Documents (unless otherwise provided in such other Credit Documents) shall be
governed by and construed in accordance with the laws of the State of California
without reference to conflicts of law rules.

     1.07.      CONSTRUCTION.  This Agreement is the result of negotiations
among, and has been reviewed by, Borrower, each Lender, Agent and their
respective counsel.  Accordingly, this Agreement shall be deemed to be the
product of all parties hereto, and no ambiguity shall be construed in favor of
or against Borrower, any Lender or Agent.

     1.08.      ENTIRE AGREEMENT.  This Agreement and each of the other Credit
Documents, taken together, constitute and contain the entire agreement of
Borrower, the Lenders and Agent and supersede any and all prior agreements,
negotiations, correspondence, understandings and communications among the
parties, whether written or oral, respecting the subject matter hereof.

     1.09.      CALCULATION OF INTEREST AND FEES.  All calculations of interest
and fees under this Agreement and the other Credit Documents for any period (a)
shall include the first day of such period and exclude the last day of such
period and (b) shall be calculated on the basis of a year of 360 days for actual
days elapsed, except that during any period any loan bears interest based upon
the prime rate, such interest shall be calculated on the basis of a year of 365
or 366 days, as appropriate, for actual days elapsed.

     1.10.      OTHER INTERPRETIVE PROVISIONS.  References in this agreement
to "Recitals," "Sections," "Paragraphs," "Subparagraphs," "Exhibits" and
"Schedules" are to recitals, sections, paragraphs, subparagraphs, exhibits
and schedules herein and hereto unless otherwise indicated.  References in
this Agreement and each of the other Credit Documents to any document,
instrument or agreement (a) shall include all exhibits, schedules and other
attachments thereto, (b) shall include all documents, instruments or
agreements issued or executed in replacement thereof, and (c) shall mean such
document, instrument or agreement, or replacement or predecessor thereto, as
amended, modified and supplemented from time to time and in effect at

                                        20

<PAGE>

any given time.  References in this Agreement and each of the other Credit
Documents to any statute or other law (i) shall include any successor statute
or law, (ii) shall include all rules and regulations promulgated under such
statute or law (or any successor statute or law), and (iii) shall mean such
statute or law (or successor statute or law) and such rules and regulations,
as amended, modified, codified or reenacted from time to time and in effect
at any given time.  The words "hereof," "herein" and "hereunder" and words of
similar import when used in this agreement or any other credit document shall
refer to this agreement or such other credit document, as the case may be, as
a whole and not to any particular provision of this agreement or such other
credit document, as the case may be.  The words "include" and "including" and
words of similar import when used in this agreement or any other credit
document shall not be construed to be limiting or exclusive.  In the event of
any inconsistency between the terms of this agreement and the terms of any
other credit document, the terms of this agreement shall govern.

                                        21

<PAGE>

SECTION II.     CREDIT FACILITY.

        2.01.   REVOLVING LOAN FACILITY.

                (a) LOAN AVAILABILITY.  Subject to the terms and conditions of
        this Agreement (including the amount limitations set forth in PARAGRAPH
        2.02 and the conditions set forth in SECTION III), each Lender severally
        agrees to advance to Borrower from time to time during the period
        beginning on the Closing Date and ending on the Maturity Date such loans
        as Borrower may request under this PARAGRAPH 2.01 (individually, a
        "LOAN"); PROVIDED, HOWEVER, that (i) the aggregate principal amount of
        all Loans made by such Lender at any time outstanding shall not exceed
        such Lender's Commitment at such time and (ii) the aggregate principal
        amount of all Loans made by all Lenders at any time outstanding shall
        not exceed the Total Commitment at such time.  All Loans shall be made
        on a pro rata basis by the Lenders in accordance with their respective
        Proportionate Shares, with each Borrowing to be comprised of a Loan by
        each Lender equal to such Lender's Proportionate Share of such
        Borrowing.  Except as otherwise provided herein, Borrower may borrow,
        repay and reborrow Loans until the Maturity Date.

                (b) NOTICE OF BORROWING.  Borrower shall request each Borrowing
        by delivering to Agent an irrevocable written notice in the form of
        EXHIBIT A, appropriately completed (a "NOTICE OF BORROWING"), which
        specifies, among other things:

                        (i)     The principal amount of the requested Borrowing,
                which shall be in the amount of (A) $100,000 or an integral
                multiple of $50,000 in excess thereof in the case of a Borrowing
                consisting of Base Rate Loans; or (B) $400,000 or an integral
                multiple of $100,000 in excess thereof in the case of a
                Borrowing consisting of LIBOR Loans;

                        (ii)    Whether the requested Borrowing is to consist of
                Base Rate Loans or LIBOR Loans;

                        (iii)   If the requested Borrowing is to consist of
                LIBOR Loans, the initial Interest Period selected by Borrower
                for such Loans in accordance with SUBPARAGRAPH 2.01(e); and

                        (iv)    The date of the requested Borrowing, which shall
                be a Business Day;

        Borrower shall give each Notice of Borrowing to Agent at least three (3)
        Business Days before the date of the requested Borrowing in the case of
        a Borrowing consisting of LIBOR Loans with Interest Periods of one month
        or longer and on or before the date of the requested Borrowing in the
        case of any other Borrowing.  Each Notice of Borrowing shall be
        delivered by first-class mail or facsimile to Agent at the office or
        facsimile number and during the hours specified in PARAGRAPH 8.01;
        PROVIDED, HOWEVER, that Borrower shall promptly deliver to Agent the
        original of any Notice of Borrowing initially delivered by facsimile.
        Agent shall promptly notify each Lender of the contents

                                       22

<PAGE>

        of each Notice of Borrowing and of the amount and Type of (and, if
        applicable, the Interest Period for) each Loan to be made by such Lender
        as part of the requested Borrowing.

                (c) LOAN INTEREST RATES.  Borrower shall pay interest on the
        unpaid principal amount of each Loan from the date of such Loan until
        the maturity thereof, at one of the following rates per annum:

                        (i)     During such periods as such Loan is a Base Rate
                Loan, at a rate per annum equal to the Base Rate PLUS the
                Applicable Margin therefor, such rate to change from time to
                time as the Applicable Margin or Base Rate shall change; and

                        (ii)    During such periods as such Loan is a LIBOR
                Loan, at a rate per annum equal at all times during each
                Interest Period for such LIBOR Loan to the LIBO Rate for such
                Interest Period PLUS the Applicable Margin therefor, such rate
                to change from time to time during such Interest Period as the
                Applicable Margin shall change.

        All Loans in each Borrowing shall, at any given time prior to maturity,
        bear interest at one, and only one, of the above rates.  The number of
        Borrowings consisting of LIBOR Loans shall not exceed seven (7) at any
        time.

                (d) CONVERSION OF LOANS.  Borrower may convert any Borrowing
        from one Type of Borrowing to the other Type; PROVIDED, HOWEVER, that
        any conversion of a Borrowing consisting of LIBOR Loans into a Borrowing
        consisting of Base Rate Loans shall be made on, and only on, the last
        day of an Interest Period for such LIBOR Loans.  Borrower shall request
        such a conversion by an irrevocable written notice to Agent in the form
        of EXHIBIT B, appropriately completed (a "NOTICE OF CONVERSION"), which
        specifies, among other things:

                        (i)     The Borrowing which is to be converted;

                        (ii)    The Type of Borrowing into which such Borrowing
                is to be converted;

                        (iii)   If such Borrowing is to be converted into a
                Borrowing consisting of LIBOR Loans, the initial Interest Period
                selected by Borrower for such Loans in accordance with
                SUBPARAGRAPH 2.01(e); and

                        (iv)    The date of the requested conversion, which
                shall be a Business Day.

        Borrower shall give each Notice of Conversion to Agent at least three
        (3) Business Days before the date of the requested conversion in the
        case of a conversion into a Borrowing consisting of LIBOR Loans with
        Interest Periods of one month or more and on or before the date of the
        requested conversion in the case of a conversion into any other
        Borrowing.

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<PAGE>

        Each Notice of Conversion shall be delivered by first-class mail or
        facsimile to Agent at the office or to the facsimile number and during
        the hours specified in PARAGRAPH 8.01; PROVIDED, HOWEVER, that Borrower
        shall promptly deliver to Agent the original of any Notice of Conversion
        initially delivered by facsimile.  Agent shall promptly notify each
        Lender of the contents of each Notice of Conversion.

                (e) LIBOR LOAN INTEREST PERIODS.

                        (i)     The initial and each subsequent Interest Period
                selected by Borrower for a LIBOR Loan shall be one (1) week, two
                (2) weeks, one (1) month, two (2) months, three (3) months or
                six (6) months; PROVIDED, HOWEVER, that (A) any Interest Period
                which would otherwise end on a day which is not a Business Day
                shall be extended to the next succeeding Business Day unless
                such next Business Day falls in another calendar month, in which
                case such Interest Period shall end on the immediately preceding
                Business Day; (B) any Interest Period (other than a one-week or
                two-week Interest Period) which begins on the last Business Day
                of a calendar month (or on a day for which there is no
                numerically corresponding day in the calendar month at the end
                of such Interest Period) shall end on the last Business Day of a
                calendar month; and (C) no such Interest Period shall end after
                the Maturity Date.

                        (ii)    Borrower shall notify Agent by an irrevocable
                written notice in the form of EXHIBIT C, appropriately completed
                (a "NOTICE OF INTEREST PERIOD SELECTION"), at least three (3)
                Business Days prior to the last day of each Interest Period for
                LIBOR Loans of the Interest Period selected by Borrower for the
                next succeeding Interest Period for such Loans.  Each Notice of
                Interest Period Selection shall be given by first-class mail or
                facsimile to the office or the facsimile number and during the
                hours specified in PARAGRAPH 8.01; PROVIDED, HOWEVER, that
                Borrower shall promptly deliver to Agent the original of any
                Notice of Interest Period Selection initially delivered by
                facsimile.  If Borrower fails to notify Agent of the next
                Interest Period for LIBOR Loans in accordance with this
                SUBPARAGRAPH 2.01(e), such Loans shall automatically convert to
                Base Rate Loans on the last day of the current Interest Period
                therefor.

                (f) SCHEDULED LOAN PAYMENTS.  Borrower shall repay the principal
        amount of the Loans on the Maturity Date.  Borrower shall pay accrued
        interest on the unpaid principal amount of each Loan in arrears (A) in
        the case of a Base Rate Loan, on the last day in each March, June,
        September and December, (B) in the case of a LIBOR Loan, on the last day
        of each Interest Period therefor (and, if any such Interest Period is
        longer than three (3) months, every three (3) months); and (C) in the
        case of all Loans, upon prepayment (to the extent thereof) and at
        maturity.

                (g) PURPOSE.  Borrower shall use the proceeds of the Loans (i)
        first, to repay on the Closing Date all indebtedness outstanding under
        the Existing Credit Agreement and

                                       24

<PAGE>

        (ii) thereafter, for Borrower's general corporate needs, including the
        consummation of acquisitions otherwise permitted pursuant to the terms
        of this Agreement.

                (h) MATURITY DATE EXTENSIONS.  On or before the last Business
        Day of each December beginning on December 31, 2001, Borrower may
        request the Lenders to extend the Maturity Date for an additional
        one-year period.  Borrower shall request each such extension by
        appropriately completing, executing and delivering to Agent a written
        request in the form of EXHIBIT D (a " MATURITY DATE EXTENSION REQUEST").
        Borrower understands that this SUBPARAGRAPH 2.01(h) is included in this
        Agreement for Borrower's convenience in requesting extensions and
        acknowledges that neither Agent nor any Lender has promised (either
        expressly or by implication), and neither Agent nor any Lender has
        any obligation or commitment, to extend the Maturity Date at any
        time.  Agent shall promptly deliver to each Lender three (3) copies
        of each Maturity Date Extension Request received by Agent.  If a
        Lender, in its sole and absolute discretion, consents to any Maturity
        Date Extension Request, such Lender shall evidence such consent by
        executing and returning two (2) copies of the Maturity Date Extension
        Request to Agent not later than the last Business Day which is thirty
        (30) days after the date Borrower delivered to Agent the Maturity
        Date Extension Request.  Any failure by any Lender to execute and
        return a Maturity Date Extension Request shall be deemed a denial
        thereof.  If Borrower shall deliver a Maturity Date Extension Request
        to Agent pursuant to the first sentence of this SUBPARAGRAPH 2.01(h),
        then not later than the last Business Day which is thirty-five (35)
        days after the date Borrower delivered to Agent the Maturity Date
        Extension Request, Agent shall notify Borrower in writing whether (i)
        Agent has received a copy of the Maturity Date Extension Request
        executed by each Lender, in which case the definition of " Maturity
        Date" set forth in PARAGRAPH 1.01 shall be deemed amended as provided
        in the Maturity Date Extension Request as of the date of such written
        notice from Agent to Borrower, or (ii) Agent has not received a copy
        of the Maturity Date Extension Request executed by each Lender, in
        which case such Maturity Date Extension Request shall be deemed
        denied.  Agent shall deliver to Borrower, with each written notice
        under CLAUSE (i) of the preceding sentence which notifies Borrower
        that Agent has received a Maturity Date Extension Request executed by
        each Lender, a copy of the Maturity Date Extension Request so
        executed by each Lender.

        2.02.   COMMITMENT REDUCTIONS, ETC.

                (a) OPTIONAL REDUCTION OR CANCELLATION OF COMMITMENTS.  Borrower
        may, upon three (3) Business Days written notice to Agent, permanently
        reduce the Total Commitment by the amount of one million Dollars
        ($1,000,000) or an integral multiple of one million Dollars ($1,000,000)
        in excess thereof or cancel the Total Commitment in its entirety;
        PROVIDED, HOWEVER, that:

                        (i)     Borrower may not reduce the Total Commitment
                prior to the Maturity Date, if, after giving effect to such
                reduction, the aggregate principal amount of all Loans then
                outstanding would exceed the Total Commitment; and

                                       25

<PAGE>

                        (ii)    Borrower may not cancel the Total Commitment
                prior to the Maturity Date, if, after giving effect to such
                cancellation, any Loans would then remain outstanding.

                (b) MANDATORY REDUCTION OR CANCELLATION OF COMMITMENTS.  If, at
        any time, Borrower is required to make any mandatory prepayment of Loans
        pursuant to CLAUSE (ii) OF SUBPARAGRAPH 2.04(c), the Total Commitment
        shall be automatically and permanently reduced or cancelled by an amount
        equal to the full amount of any required prepayment.

                (c) EFFECT OF COMMITMENT REDUCTIONS.  From the effective date of
        any reduction of the Total Commitment, the Commitment Fees payable
        pursuant to SUBPARAGRAPH 2.03(b) shall be computed on the basis of the
        Total Commitment as so reduced.  Once reduced or cancelled, the Total
        Commitment may not be increased or reinstated without the prior written
        consent of all Lenders.  Any reduction of the Total Commitment pursuant
        to SUBPARAGRAPH 2.02(a) or SUBPARAGRAPH 2.02(b) shall be applied ratably
        to reduce each Lender's Commitment in accordance with CLAUSE (i) OF
        SUBPARAGRAPH 2.08(a).

        2.03.   FEES.

                (a) AGENT'S FEE.  Borrower shall pay to Agent, for its own
        account, agent's fees and other compensation in the amounts and at the
        times set forth in the Agent's Fee Letter.

                (b) COMMITMENT FEES.  Borrower shall pay to Agent, for the
        ratable benefit of the Lenders as provided in CLAUSE (iii) OF
        SUBPARAGRAPH 2.08(a), nonrefundable commitment fees (the "COMMITMENT
        FEES") equal to the Commitment Fee Percentage on the daily average
        Unused Commitment for the period beginning on the date of this Agreement
        and ending on the Maturity Date.  The Commitment Fee Percentage shall be
        determined as provided in the Pricing Grid and may change for each
        calendar quarter.  Borrower shall pay the Commitment Fees in arrears on
        the last day in each March, June, September and December and on the
        Maturity Date (or if the Total Commitment is cancelled on a date prior
        to the Maturity Date, on such prior date).

                (c) PARTICIPATION FEE.  On the Closing Date, Borrower shall pay
        to Agent, for the benefit of the Lenders, a one-time non-refundable
        participation fee equal to 0.15% of the Total Commitment to be shared
        among the Lenders pro rata in accordance with such Lenders' respective
        proportionate share of the Total Commitment.

        2.04.   PREPAYMENTS.

                (a) TERMS OF ALL PREPAYMENTS.  Upon the prepayment of any Loan
        (whether such prepayment is an optional prepayment under SUBPARAGRAPH
        2.04(b), a mandatory prepayment required by SUBPARAGRAPH 2.04(c) or a
        mandatory prepayment required by any other provision of this Agreement
        or the other Credit Documents, including, without limitation, a
        prepayment upon acceleration), Borrower shall pay to the Lender which
        made such Loan (i) all accrued interest to the date of such prepayment
        on the amount

                                       26

<PAGE>

        prepaid and (ii) if such prepayment is the prepayment of a LIBOR Loan
        on a day other than the last day of an Interest Period for such LIBOR
        Loan, all amounts payable to such Lender pursuant to PARAGRAPH 2.11.

                (b) OPTIONAL PREPAYMENTS.  At its option, Borrower may, upon
        three (3) Business Days notice to Agent, prepay the Loans in any
        Borrowing in part, in an aggregate principal amount of $1,000,000 or
        more, or in whole; except that Borrower may prepay the Loans in any
        Borrowing consisting of Base Rate Loans on the last Business Day in any
        fiscal quarter of Borrower upon same day notice to Agent if Borrower
        delivers such notice to Agent not later than 1:00 p.m. on the date of
        such prepayment.

                (c) MANDATORY PREPAYMENTS.  Borrower shall immediately repay
        Loans as follows:

                        (i)     If, at any time, the aggregate principal amount
                of all Loans then outstanding exceeds the Total Commitment at
                such time, Borrower shall immediately prepay Loans in an
                aggregate principal amount equal to such excess; and

                        (ii)    Upon the incurrence by Borrower of unsecured
                Indebtedness of the type permitted pursuant to CLAUSE (xi) OF
                SUBPARAGRAPH 5.02(a), Borrower shall immediately prepay Loans in
                an amount equal to the Net Proceeds derived from the
                Indebtedness so incurred.

        2.05.   OTHER PAYMENT TERMS.

                (a) PLACE AND MANNER.  Borrower shall make all payments due to
        each Lender or Agent hereunder by payments to Agent at Agent's office
        located at the address specified in PARAGRAPH 8.01, with each payment
        due to a Lender to be for the account of such Lender and such Lender's
        Applicable Lending Office.  Borrower shall make all payments hereunder
        in lawful money of the United States and in same day or immediately
        available funds not later than 12:00 noon on the date due, except that
        Borrower may make prepayments of the Loans in a Borrowing consisting of
        Base Rate Loans on the last Business Day of a fiscal quarter as late as
        1:00 p.m.  Agent shall promptly disburse to each Lender each payment
        received by Agent for the account of such Lender.

                (b) DATE.  Whenever any payment due hereunder shall fall due on
        a day other than a Business Day, such payment shall be made on the next
        succeeding Business Day, and such extension of time shall be included in
        the computation of interest or fees, as the case may be.

                (c) LATE PAYMENTS.  If any amounts required to be paid by
        Borrower under this Agreement or the other Credit Documents (including,
        without limitation, principal or interest payable on any Loan, any fees
        or other amounts) remain unpaid after such amounts are due, Borrower
        shall pay interest on the aggregate, outstanding balance of such amounts
        from the date due until those amounts are paid in full at a per annum
        rate

                                       27

<PAGE>

        equal to the Base Rate PLUS two percent (2.00%), such rate to change
        from time to time as the Base Rate shall change.

                (d) APPLICATION OF PAYMENTS.  All payments hereunder shall be
        applied first to unpaid fees, costs and expenses then due and payable
        under this Agreement or the other Credit Documents, second to accrued
        interest then due and payable under this Agreement or the other Credit
        Documents and finally to reduce the principal amount of outstanding
        Loans.

                (e) FAILURE TO PAY AGENT.  Unless Agent shall have received
        notice from Borrower at least one (1) Business Day prior to the date on
        which any payment is due to the Lenders hereunder that Borrower will not
        make such payment in full, Agent shall be entitled to assume that
        Borrower has made or will make such payment in full to Agent on such
        date and Agent may, in reliance upon such assumption, cause to be paid
        to the Lenders on such due date an amount equal to the amount then due
        such Lenders.  If and to the extent Borrower shall not have so made such
        payment in full to Agent, each such Lender shall repay to Agent
        forthwith on demand such amount distributed to such Lender together with
        interest thereon, for each day from the date such amount is distributed
        to such Lender until the date such Lender repays such amount to Agent,
        at (i) the Federal Funds Rate for the first three (3) days and (ii) the
        per annum rate applicable to Base Rate Loans thereafter.  A certificate
        of Agent submitted to any Lender with respect to any amounts owing by
        such Lender under this SUBPARAGRAPH 2.05(e) shall be conclusive absent
        manifest error.

        2.06.   NOTES AND INTEREST ACCOUNT.

                (a)  NOTES.  The obligation of Borrower to repay the Loans made
        by each Lender and to pay interest thereon at the rates provided herein
        shall be evidenced by a promissory note in the form of EXHIBIT E
        (individually, an "AMENDED AND RESTATED NOTE") which note shall be
        (i) payable to the order of such Lender, (ii) in the amount of such
        Lender's Commitment, (iii) dated the Closing Date and (iv) otherwise
        appropriately completed.  Borrower authorizes each Lender to record on
        the schedule annexed to such Lender's Amended and Restated Note the date
        and amount of each Loan made by such Lender and of each payment or
        prepayment of principal thereon made by Borrower, and agrees that all
        such notations shall constitute prima facie evidence of the matters
        noted; PROVIDED, HOWEVER, that any failure by a Lender to make any such
        notation shall not affect the Obligations.  Borrower further authorizes
        each Lender to attach to and make a part of such Lender's Amended and
        Restated Note continuations of the schedule attached thereto as
        necessary.

                (b)  INTEREST ACCOUNT.  Borrower authorizes Agent to record in
        an account or accounts maintained by Agent on its books (the "INTEREST
        ACCOUNT") (i) the interest rates applicable to all Loans and the
        effective dates of all changes thereto, (ii) the Interest Period for
        each LIBOR Loan, (iii) the date and amount of each principal and
        interest

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<PAGE>

        payment on each Loan and (iv) such other information as Agent may
        determine is necessary for the computation of interest payable by
        Borrower hereunder.

        2.07.   LOAN FUNDING.

                (a)  LENDER FUNDING AND DISBURSEMENT TO BORROWER.  Each Lender
        shall, before 12:00 noon on the date of each Borrowing, make available
        to Agent at Agent's office specified in PARAGRAPH 8.01, in same day or
        immediately available funds, such Lender's Proportionate Share of such
        Borrowing.  After Agent's receipt of such funds and upon satisfaction of
        the applicable conditions set forth in SECTION III, Agent shall promptly
        disburse such funds to Borrower in same day or immediately available
        funds.  Unless otherwise directed by Borrower, Agent shall disburse the
        proceeds of each Borrowing by disbursement to the account or accounts
        specified in the applicable Notice of Borrowing.

                (b)  LENDER FAILURE TO FUND.  Unless Agent shall have received
        notice from a Lender prior to the date of any Borrowing that such Lender
        will not make available to Agent such Lender's Proportionate Share of
        such Borrowing, Agent shall be entitled to assume that such Lender has
        made or will make such portion available to Agent on the date of such
        Borrowing in accordance with SUBPARAGRAPH 2.07(a), and Agent may on such
        date, in reliance upon such assumption, disburse or otherwise credit to
        Borrower a corresponding amount.  If any Lender does not make the amount
        of its Proportionate Share of any Borrowing available to Agent on or
        prior to the date of such Borrowing, such Lender shall pay to Agent, on
        demand, interest which shall accrue on such amount from the date of such
        Borrowing until such amount is paid to Agent at rates equal to (i) the
        daily Federal Funds Rate during the period from the date of such
        Borrowing through the third Business Day thereafter and (ii) the rate
        applicable to Base Rate Loans thereafter.  A certificate of Agent
        submitted to any Lender with respect to any amounts owing under this
        SUBPARAGRAPH 2.07(b) shall be conclusive absent manifest error.  If the
        amount of any Lender's Proportionate Share of any Borrowing is not paid
        to Agent by such Lender within three (3) Business Days after the date of
        such Borrowing, Borrower shall repay such amount to Agent, on demand,
        together with interest thereon, for each day from the date such amount
        was disbursed to Borrower until the date such amount is repaid to Agent,
        at the interest rate applicable at the time to the Loans comprising such
        Borrowing.

                (c)  LENDERS' OBLIGATIONS SEVERAL.  The failure of any Lender to
        make the Loan to be made by it as part of any Borrowing shall not
        relieve any other Lender of its obligation hereunder to make its Loan on
        the date of such Borrowing, but no Lender shall be obligated in any way
        to make any Loan which another Lender has failed or refused to make or
        otherwise be in any way responsible for the failure or refusal of any
        other Lender to make any Loan required to be made by such other Lender
        on the date of any Borrowing.

                                       29

<PAGE>

        2.08.   PRO RATA TREATMENT.

                (a)     BORROWINGS, COMMITMENT REDUCTIONS, ETC.  Except as
        otherwise provided herein:

                        (i)     Each Borrowing and reduction of the Total
                Commitment shall be made or shared among the Lenders pro rata
                according to their respective Proportionate Shares;

                        (ii)    Each payment of principal of Loans in any
                Borrowing shall be shared among the Lenders which made or funded
                the Loans in such Borrowing pro rata according to the respective
                unpaid principal amounts of such Loans so made or funded by such
                Lenders;

                        (iii)   Each payment of interest on Loans in any
                Borrowing shall be shared among the Lenders which made or funded
                the Loans in such Borrowing pro rata according to (A) the
                respective unpaid principal amounts of such Loans so made or
                funded by such Lenders and (B) the dates on which such Lenders
                so made or funded such Loans;

                        (iv)    Each payment of Commitment Fees shall be shared
                among the Lenders pro rata according to (A) their respective
                Proportionate Shares and (B) in the case of each Lender which
                becomes a Lender hereunder after the date hereof, the date upon
                which such Lender so became a Lender;

                        (v)     Each payment of interest (other than interest on
                Loans) shall be shared among the Lenders and Agent owed the
                amount upon which such interest accrues pro rata according to
                (A) the respective amounts so owed such Lenders and Agent and
                (B) the dates on which such amounts became owing to such Lenders
                and Agent; and

                        (vi)    All other payments under this Agreement and the
                other Credit Documents shall be for the benefit of the Person or
                Persons specified.

                (b)  SHARING OF PAYMENTS, ETC.  If any Lender shall obtain any
        payment (whether voluntary, involuntary, through the exercise of any
        right of setoff, or otherwise) on account of Loans owed to it in excess
        of its ratable share of payments on account of such Loans obtained by
        all Lenders entitled to such payments, such Lender shall forthwith
        purchase from the other Lenders such participations in the Loans as
        shall be necessary to cause such purchasing Lender to share the excess
        payment ratably with each of them; PROVIDED, HOWEVER, that if all or any
        portion of such excess payment is thereafter recovered from such
        purchasing Lender, such purchase shall be rescinded and each other
        Lender shall repay to the purchasing Lender the purchase price to the
        extent of such recovery together with an amount equal to such other
        Lender's ratable share (according to the proportion of (i) the amount of
        such other Lender's required repayment to (ii) the total amount so
        recovered from the purchasing Lender) of any interest or other amount
        paid or

                                       30

<PAGE>

        payable by the purchasing Lender in respect of the total amount so
        recovered.  Borrower agrees that any Lender so purchasing a
        participation from another Lender pursuant to this SUBPARAGRAPH 2.08(b)
        may, to the fullest extent permitted by law, exercise all its rights of
        payment (including the right of setoff) with respect to such
        participation as fully as if such Lender were the direct creditor of
        Borrower in the amount of such participation.

        2.09.   CHANGE OF CIRCUMSTANCES.

                (a)  INABILITY TO DETERMINE RATES.  If, on or before the first
        day of any Interest Period for any LIBOR Loan, (i) any Lender shall
        advise Agent that the LIBO Rate for such Interest Period cannot be
        adequately and reasonably determined due to the unavailability of funds
        in or other circumstances affecting the London interbank market or
        (ii) any Lender shall advise Agent that the rate of interest for such
        Loan does not adequately and fairly reflect the cost to such Lender of
        making or maintaining such LIBOR Loan, Agent shall immediately give
        notice of such condition to Borrower and the other Lenders.  After the
        giving of any such notice and until Agent shall otherwise notify
        Borrower that the circumstances giving rise to such condition no longer
        exist, Borrower's right to request the making of or conversion to, and
        the Lenders' obligations to make or convert to LIBOR Loans shall be
        suspended.  Any LIBOR Loans outstanding at the commencement of any such
        suspension shall be converted at the end of the then current Interest
        Period for such LIBOR Loans into a Base Rate Loans unless such
        suspension has then ended.

                (b)  ILLEGALITY.  If, after the date of this Agreement, the
        adoption of any Governmental Rule, any change in any Governmental Rule
        or the application or requirements thereof (whether such change occurs
        in accordance with the terms of such Governmental Rule as enacted, as a
        result of amendment or otherwise), any change in the interpretation or
        administration of any Governmental Rule by any Governmental Authority,
        or compliance by any Lender with any request or directive (whether or
        not having the force of law) of any Governmental Authority (a "CHANGE OF
        LAW") shall make it unlawful or impossible for any Lender to make or
        maintain any LIBOR Loan, such Lender shall immediately notify Agent and
        Borrower of such Change of Law.  Upon receipt of such notice,
        (i) Borrower's right to request the making of or conversion to, and such
        Lender's obligation to make or convert to LIBOR Loans shall be
        terminated, and (ii) Borrower shall, at the request of such Lender,
        either (A) pursuant to SUBPARAGRAPH 2.01(d) convert any such then
        outstanding LIBOR Loans into Base Rate Loans at the end of the current
        Interest Period for such LIBOR Loans or (B) immediately repay or convert
        any such LIBOR Loans if such Lender shall notify Borrower that such
        Lender may not lawfully continue to fund and maintain such LIBOR Loans.
        Any conversion or prepayment of LIBOR Loans made pursuant to the
        preceding sentence prior to the last day of an Interest Period for such
        LIBOR Loans shall be deemed a prepayment thereof for purposes of
        PARAGRAPH 2.11.  After any Lender notifies Agent and Borrower of such a
        Change of Law and until such Lender notifies Agent and Borrower that it
        is no longer unlawful or impossible for such Lender to make or maintain
        a LIBOR Loan, all Loans of such Lender shall be Base Rate Loans.

                                       31

<PAGE>

                (c)  INCREASED COSTS.  If, after the date of this Agreement,
        any Change of Law:

                        (i)     Shall subject any Lender to any tax, duty or
                other charge with respect to any LIBOR Loan, or shall change the
                basis of taxation of payments by Borrower to any Lender on such
                a LIBOR Loan or in respect to such a LIBOR Loan under this
                Agreement (except for changes in the rate of taxation on the
                overall net income of any Lender imposed by its jurisdiction of
                incorporation or the jurisdiction in which its principal
                executive office is located); or

                        (ii)    Shall impose, modify or hold applicable any
                reserve (excluding any Reserve Requirement or other reserve to
                the extent included in the calculation of the LIBO Rate for any
                Loans), special deposit or similar requirement against assets
                held by, deposits or other liabilities in or for the account of,
                advances or loans by, or any other acquisition of funds by any
                Lender for any LIBOR Loan; or

                        (iii)   Shall impose on any Lender any other condition
                related to any LIBOR Loan or such Lender's Commitment;

        And the effect of any of the foregoing is to increase the cost to such
        Lender of making, renewing, or maintaining any such LIBOR Loan or its
        Commitment or to reduce any amount receivable by such Lender hereunder;
        then Borrower shall from time to time, within five (5) days after demand
        by such Lender, pay to such Lender additional amounts sufficient to
        reimburse such Lender for such increased costs or to compensate such
        Lender for such reduced amounts.  A certificate as to the amount of such
        increased costs or reduced amounts, submitted by such Lender to Borrower
        shall, in the absence of manifest error, be conclusive and binding on
        Borrower for all purposes.  The obligations of Borrower under this
        SUBPARAGRAPH 2.09(c) shall survive the payment and performance of the
        Obligations and the termination of this Agreement.

                (d)  CAPITAL REQUIREMENTS.  If, after the date of this
        Agreement, any Lender determines that (i) any Change of Law affects the
        amount of capital required or expected to be maintained by such Lender
        or any Person controlling such Lender (a "CAPITAL ADEQUACY REQUIREMENT")
        and (ii) the amount of capital maintained by such Lender or such Person
        which is attributable to or based upon the Loans, the Commitments or
        this Agreement must be increased as a result of such Capital Adequacy
        Requirement (taking into account such Lender's or such Person's policies
        with respect to capital adequacy), Borrower shall pay to such Lender or
        such Person, within five (5) days after demand of such Lender, such
        amounts as such Lender or such Person shall determine are necessary to
        compensate such Lender or such Person for the increased costs to such
        Lender or such Person of such increased capital.  A certificate of any
        Lender setting forth in reasonable detail the computation of any such
        increased costs, delivered by such Lender to Borrower shall, in the
        absence of manifest error, be conclusive and binding on Borrower for all
        purposes.  The obligations of Borrower under this SUBPARAGRAPH 2.09(d)
        shall survive the payment and performance of the Obligations and the
        termination of this Agreement.

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<PAGE>

                (e)  MITIGATION.  Any Lender which becomes aware of (i) any
        Change of Law which will make it unlawful or impossible for such Lender
        to make or maintain any LIBOR Loan or (ii) any Change of Law or other
        event or condition which will obligate Borrower to pay any amount
        pursuant to SUBPARAGRAPH 2.09(c) or SUBPARAGRAPH 2.09(d) shall notify
        Borrower and Agent thereof as promptly as practical.  If any Lender has
        given notice of any such Change of Law or other event or condition and
        thereafter becomes aware that such Change of Law or other event or
        condition has ceased to exist, such Lender shall notify Borrower and
        Agent thereof as promptly as practical.  Each Lender affected by any
        Change of Law which makes it unlawful or impossible for such Lender to
        make or maintain any LIBOR Loan or to which Borrower is obligated to pay
        any amount pursuant to SUBPARAGRAPH 2.09(c) or SUBPARAGRAPH 2.09(d)
        shall use reasonable commercial efforts (including changing the
        jurisdiction of its Applicable Lending Office) to avoid the effect of
        such Change of Law or to avoid or materially reduce any amounts which
        Borrower is obligated to pay pursuant to SUBPARAGRAPH 2.09(c) or
        SUBPARAGRAPH 2.09(d) if, in the reasonable opinion of such Lender, such
        efforts would not be disadvantageous to such Lender or contrary to such
        Lender's normal banking practices.

     2.10.      TAXES ON PAYMENTS.

                (a)  PAYMENTS FREE OF TAXES.  All payments made by Borrower
        under this Agreement and the other Credit Documents shall be made free
        and clear of, and without deduction or withholding for or on account of,
        any present or future income, stamp or other taxes, levies, imposts,
        duties, charges, fees, deductions or withholdings, now or hereafter
        imposed, levied, collected, withheld or assessed by any Governmental
        Authority (except net income taxes and franchise taxes in lieu of net
        income taxes imposed on Agent or any Lender by its jurisdiction of
        incorporation or the jurisdiction in which its Applicable Lending Office
        is located) (all such non-excluded taxes, levies, imposts, duties,
        charges, fees, deductions and withholdings being hereinafter called
        "TAXES").  If any Taxes are required to be withheld from any amounts
        payable to Agent or any Lender hereunder or under the other Credit
        Documents, the amounts so payable to Agent or such Lender shall be
        increased to the extent necessary to yield to Agent or such Lender
        (after payment of all Taxes) interest or any such other amounts payable
        hereunder at the rates or in the amounts specified in this Agreement and
        the other Credit Documents.  Whenever any Taxes are payable by Borrower,
        as promptly as possible thereafter, Borrower shall send to Agent for its
        own account or for the account of such Lender, as the case may be, a
        certified copy of an original official receipt received by Borrower
        showing payment thereof.  If Borrower fails to pay any Taxes when due to
        the appropriate taxing authority or fails to remit to Agent the required
        receipts or other required documentary evidence, Borrower shall
        indemnify Agent and the Lenders for any incremental taxes, interest or
        penalties that may become payable by Agent or any Lender as a result of
        any such failure.  The obligations of Borrower under this
        SUBPARAGRAPH 2.10(a) shall survive the payment and performance of the
        Obligations and the termination of this Agreement.

                                      33

<PAGE>

                (b)  WITHHOLDING EXEMPTION CERTIFICATES.  On or prior to the
        date of the initial Borrowing or, if such date does not occur within
        thirty (30) days after the date of this Agreement, by the end of such
        30-day period, each Lender which is not organized under the laws of the
        United States of America or a state thereof shall deliver to Borrower
        and Agent two duly completed copies of United States Internal Revenue
        Service Form 1001 or 4224 (or successor applicable form), as the case
        may be, certifying in each case that such Lender is entitled to receive
        payments under this Agreement without deduction or withholding of any
        United States federal income taxes.  Each Lender which delivers to
        Borrower and Agent a Form 1001 or 4224 pursuant to the immediately
        preceding sentence further undertakes to deliver to Borrower and Agent
        two further copies of Form 1001 or 4224 (or successor applicable forms),
        as the case may be, on or before the date that any such form expires or
        becomes obsolete or after the occurrence of any event requiring a change
        in the most recent form previously delivered by such Lender to Borrower
        and Agent, certifying that such Lender is entitled to receive payments
        under this Agreement without deduction or withholding of any United
        States federal income taxes.  Each Lender which is not organized under
        the laws of the United States of America or a state thereof further
        agrees (i) promptly to notify Agent and Borrower of any change of
        circumstances (including without limitation any change in any treaty,
        law or regulation) which would prevent such Lender from receiving
        payments hereunder without any deduction or withholding of United States
        federal income tax and (ii) to furnish to Agent and Borrower any other
        manner of certification as Agent or Borrower may reasonably request to
        establish the right of such Lender to receive payments hereunder without
        any deduction or withholding of United States federal income tax.

                (c)  MITIGATION.  If Agent or any Lender claims any additional
        amounts to be payable to it pursuant to this PARAGRAPH 2.10, such Person
        shall use reasonable commercial efforts to file any certificate or
        document requested in writing by Borrower (including without limitation
        copies of Internal Revenue Service Form 1001 (or successor forms)
        reflecting a reduced rate of withholding) or to change the jurisdiction
        of its Applicable Lending Office if the making of such a filing or such
        change in the jurisdiction of its Applicable Lending Office would avoid
        the need for or materially reduce the amount of any such additional
        amounts which may thereafter accrue and if, in the reasonable opinion of
        such Person, in the case of a change in the jurisdiction of its
        Applicable Lending Office, such change would not be disadvantageous to
        such Person or contrary to such Person's normal banking practices.

                (d)  TAX RETURNS.  Nothing contained in this PARAGRAPH 2.10
        shall require Agent or any Lender to make available any of its tax
        returns (or any other information relating to its taxes which it deems
        to be confidential).

        2.11.   FUNDING LOSS INDEMNIFICATION.  If borrower shall (a) repay,
prepay or convert any LIBOR loan on any day other than the last day of an
interest period therefor (whether a scheduled payment, an optional prepayment
or conversion, a mandatory prepayment or conversion, a payment upon
acceleration or otherwise), (b) fail to borrow any LIBOR loan for which a
Notice of Borrowing has been delivered to Agent (whether as a result of the
failure to

                                      34

<PAGE>

satisfy any applicable conditions or otherwise) or (c) fail to convert any
loans into LIBOR loans in accordance with a Notice of Conversion delivered to
Agent (whether as a result of the failure to satisfy any applicable
conditions or otherwise), Borrower shall, upon demand by any Lender,
reimburse such Lender for and hold such Lender harmless from all costs and
losses incurred by such Lender as a result of such repayment, prepayment,
conversion or failure.  Borrower understands that such costs and losses may
include, without limitation, losses incurred by a Lender as a result of
funding and other contracts entered into by such Lender to fund a LIBOR loan.
 Each lender demanding payment under this PARAGRAPH 2.11 shall deliver to
Borrower, with a copy to Agent, a certificate setting forth the amount of
costs and losses for which demand is made, which certificate shall set forth
in reasonable detail the calculation of the amount demanded.  Such a
certificate so delivered to Borrower shall constitute PRIMA FACIE evidence of
such costs and losses.  The obligations of Borrower under this PARAGRAPH 2.11
shall survive the payment and performance of the Obligations and the
termination of this Agreement.

        2.12.    SECURITY.

             (a)  GUARANTIES.  The Secured Obligations shall be  Guaranteed
        by an Amended and Restated Guaranty in the form of EXHIBIT F, duly
        executed by each Domestic Subsidiary of Borrower (the "AMENDED AND
        RESTATED GUARANTY").

             (b)  mortgages, security agreements, etc.  on and after the
        first amendment effective date, the secured obligations shall be secured
        by the following:

                     (i)     a security agreement in the form of exhibit H-1,
                duly executed by borrower (the "borrower security agreement");

                        (ii)    a domestic subsidiary security agreement in the
                form of exhibit H-2, duly executed by each domestic subsidiary
                of borrower (each a "domestic subsidiary security agreement,"
                and collectively, the "domestic subsidiary security
                agreements");

                     (iii)   a borrower intellectual property security
                agreement in the form of exhibit I-1, duly executed by borrower
                (the "borrower ip security agreement");

                     (iv)    a domestic subsidiary intellectual property
                security agreement in the form of exhibit i-2, duly executed by
                each domestic subsidiary of borrower (each a "domestic
                subsidiary ip security agreement," and collectively, the
                "domestic subsidiary ip security agreements"); and

                     (v)     a pledge agreement in the form of exhibit J,
                duly executed by borrower (the "pledge agreement").
                                      35

<PAGE>

                (c)  FURTHER ASSURANCES.  Except as otherwise provided in
        Subparagraph 2.12(e), Borrower shall deliver, or cause its Subsidiaries
        to deliver, to Agent such additional mortgages, deeds of trust, security
        agreements, pledge agreements, guaranties, lessor consents and estoppels
        (containing appropriate mortgagee and lender protection language) and
        other instruments, agreements, certificates, opinions and documents
        (including Uniform Commercial Code financing statements and fixture
        filings and landlord waivers) as Required Lenders may reasonably request
        to :

                     (i)     Grant, perfect, maintain, protect and evidence
                security interests in favor of Agent, for the benefit of Agent
                and the Lenders as security for the Secured Obligations, in any
                or all present and future real and personal property of Borrower
                and each Domestic Subsidiary of Borrower prior to the Liens or
                other interests of any Person, except for Permitted Liens;

                        (ii)    Cause all Domestic Subsidiaries of Borrower to
                guarantee the Secured Obligations on the terms set forth in the
                Amended and Restated Guaranty; and

                     (iii)   Otherwise establish, maintain, protect and
                evidence the rights provided to Agent, for the benefit of Agents
                and the Lenders, pursuant to the  Security Documents.

        Borrower shall fully cooperate with Agent and the Lenders and perform
        all additional acts reasonably requested by Agent or any Lender to
        effect the purposes of this PARAGRAPH 2.12.

                (d)  ALLOCATION OF COLLATERAL PROCEEDS.  Agent shall apply any
        proceeds realized by Agent from the sale, disposition or collection of
        Collateral as follows:

                        (i)     Agent first shall apply such proceeds to pay all
                reasonable costs and expenses incurred by Agent in realizing
                such proceeds.

                     (ii)    If any proceeds then remain, Agent shall apply
                such proceeds to the Primary Secured Obligations until all such
                obligations are satisfied in full.  If such proceeds are
                insufficient to satisfy all of the Primary Secured Obligations
                in full, Agent shall allocate such proceeds among the Lenders
                pro rata according to the Primary Secured Obligations then owed
                to each Lender.

                     (iii)   If any proceeds then remain, Agent shall apply
                such proceeds to the Secondary Secured Obligations until all
                such obligations are satisfied in full.  If such proceeds are
                insufficient to satisfy all of the Secondary Secured Obligations
                in full, Agent shall allocate such proceeds among the
                                      36

<PAGE>

                Lenders pro rata according to the Secondary Secured Obligations
                then owed to each Lender.

                (e)  Release of Collateral.

                        (i)     Each Lender hereby authorizes Agent to execute
                and deliver such documents, instruments and agreements as
                borrower may reasonably request to release the Lien granted to
                Agent by the Security Documents in any Collateral that is sold
                by Borrower in accordance with Subparagraph 5.02(c).  In
                determining whether a sale is in accordance with Subparagraph
                5.02(c), Agent may rely upon certificates of Borrower or such
                other evidence as Agent may deem appropriate.

                        (ii)    In addition, if during each of any two
                consecutive fiscal quarters occurring after the First Amendment
                Effective Date Borrower maintains a Debt/EBITDA Ratio of less
                than 1.00 to 1.00 (as determined by agent in its reasonable
                discretion), Agent shall execute and deliver (and each Lender
                hereby authorizes Agent to execute and deliver) such documents,
                instruments and agreements as Borrower may reasonably request to
                release the Lien granted to Agent by the Security Documents in
                the Collateral.

        2.13.   REPLACEMENT OF LENDERS.  IF any Lender shall (a) suspend its
obligation to make or maintain LIBOR Loans pursuant to SUBPARAGRAPH 2.09(b)
for a reason which is not applicable to the Lenders (or a material number of
the Lenders) generally, or (b) demand any payment under SUBPARAGRAPH 2.09(c),
2.09(d) OR 2.10(a) for a reason which is not applicable to the Lenders (or a
material number of the Lenders) generally, then Agent may (or upon the
written request of Borrower so long as no Default or Event of Default shall
have occurred and be continuing, shall) replace such Lender (the "AFFECTED
LENDER"), or cause such affected Lender to be replaced, with another lender
(the "REPLACEMENT LENDER") satisfying the requirements of an Assignee Lender
under SUBPARAGRAPH 8.05(c), by having the affected Lender sell and assign all
of its rights and obligations under this Agreement and the other Credit
Documents to the replacement lender pursuant to SUBPARAGRAPH 8.05(c);
PROVIDED, HOWEVER, that if Borrower seeks to exercise such right, it must do
so within one hundred twenty (120) days after it first knows or should have
known of the occurrence of the event or events giving rise to such right, and
neither Agent nor any Lender shall have any obligation to identify or locate
a replacement lender for Borrower.  Upon receipt by any affected Lender of a
written notice from Agent stating that Agent is exercising the replacement
right set forth in this PARAGRAPH 2.1e, such affected Lender shall sell and
assign all of its rights and obligations under this Agreement and the other
Credit Documents to the replacement lender pursuant to an Assignment
Agreement and SUBPARAGRAPH 8.05(c) for a purchase price equal to the sum of
the principal amount of the affected Lender's Loans so sold and assigned, all
accrued and unpaid interest thereon and its ratable share of all fees to
which it is entitled.

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<PAGE>

SECTION III.    CONDITIONS PRECEDENT.

        3.01.   INITIAL CONDITIONS PRECEDENT.  The obligations of the Lenders to
make the loans comprising the initial borrowing are subject to receipt by agent,
on or prior to the Closing Date, of each item listed in SCHEDULE 3.01, each in
form and substance satisfactory to Agent and each Lender, and with sufficient
copies for, Agent and each Lender.

        3.02.   CONDITIONS PRECEDENT TO EACH CREDIT EVENT.  The occurrence of
each Credit Event (including the initial borrowing) is subject to the further
conditions that:

                (a)  Borrower shall have delivered to Agent the Notice of
        Borrowing, notice of conversion or notice of interest period selection,
        as the case may be, for such credit event in accordance with this
        agreement; and

                (b)  On the date such credit event is to occur and after giving
        effect to such credit event, the following shall be true and correct:

                        (i)     The representations and warranties of Borrower
                and its Subsidiaries set forth in PARAGRAPH 4.01 and in the
                other Credit Documents are true and correct in all material
                respects as if made on such date (except for representations and
                warranties expressly made as of a specified date, which shall be
                true as of such date);

                        (ii)    No Default or Event of Default has occurred and
                is continuing or will result from such Credit Event; and

                        (iii)   All of the Credit Documents are in full force
                and effect.

        The submission by Borrower to Agent of each Notice of Borrowing, each
        Notice of Conversion (other than a notice for a conversion to a Base
        Rate Loan) and each Notice of Interest Period Selection shall be deemed
        to be a representation and warranty by Borrower that each of the
        statements set forth above in this SUBPARAGRAPH 3.02(b) is true and
        correct as of the date of such notice.

        3.03.   COVENANT TO DELIVER.  Borrower agrees (not as a condition but
as a covenant) to deliver to Agent each item required to be delivered to
Agent as a condition to the occurrence of any Credit Event if such credit
event occurs. Borrower expressly agrees that the occurrence of any such
credit event prior to the receipt by agent of any such item shall not
constitute a waiver by Agent or any Lender of Borrower's obligation to
deliver such item.

SECTION IV.     REPRESENTATIONS AND WARRANTIES.

        4.01.   BORROWER'S REPRESENTATIONS AND WARRANTIES.  In order to
induce Agent and the Lenders to enter into this Agreement, Borrower hereby
represents and warranties to Agent and the Lenders as follows:

                                     38

<PAGE>

                (a)  DUE INCORPORATION, QUALIFICATION, ETC.  Each of Borrower
        and Borrower's Subsidiaries (i) is a corporation duly organized, validly
        existing and in good standing under the laws of its jurisdiction of
        organization; (ii) has the power and authority to own, lease and operate
        its properties and carry on its business as now conducted; and (iii) is
        duly qualified, licensed to do business and in good standing as a
        foreign corporation in each jurisdiction where the failure to be so
        qualified or licensed is reasonably likely to have a Material Adverse
        Effect.

                (b)  AUTHORITY.  The execution, delivery and performance by
        Borrower of each Credit Document executed, or to be executed, by
        Borrower and the consummation of the transactions contemplated thereby
        (i) are within the power of Borrower and (ii) have been duly authorized
        by all necessary actions on the part of Borrower.

                (c)  ENFORCEABILITY.  Each Credit Document executed, or to be
        executed, by Borrower has been, or will be, duly executed and delivered
        by Borrower and constitutes, or will constitute, a legal, valid and
        binding obligation of Borrower, enforceable against Borrower in
        accordance with its terms, except as limited by bankruptcy, insolvency
        or other laws of general application relating to or affecting the
        enforcement of creditors' rights generally and general principles of
        equity.

                (d)  NON-CONTRAVENTION.  The execution and delivery by Borrower
        of the Credit Documents executed by Borrower and the performance and
        consummation of the transactions contemplated thereby do not (i) violate
        any Requirement of Law applicable to Borrower; (ii) violate any
        provision of, or result in the breach or the acceleration of, or entitle
        any other Person to accelerate (whether after the giving of notice or
        lapse of time or both), any Contractual Obligation of Borrower; or
        (iii) result in the creation or imposition of any Lien (or the
        obligation to create or impose any Lien) upon any property, asset or
        revenue of Borrower (except such Liens as may be created in favor of
        Agent pursuant to this Agreement or the other Credit Documents).

                (e)  APPROVALS.  No consent, approval, order or authorization
        of, or registration, declaration or filing with, any Governmental
        Authority or other Person (including, without limitation, the
        shareholders of any Person) is required in connection with the execution
        and delivery of the Credit Documents executed by Borrower and the
        performance and consummation of the transactions contemplated thereby,
        except such as have been made or obtained and are in full force and
        effect.

                (f)  NO VIOLATION OR DEFAULT.  Neither Borrower nor any of its
        Subsidiaries is in violation of or in default with respect to (i) any
        Requirement of Law applicable to such Person; (ii) any Contractual
        Obligation of such Person (nor is there any waiver in effect which, if
        not in effect, would result in such a violation or default), where, in
        each case, such violation or default is reasonably likely to have a
        Material Adverse Effect.  Without limiting the generality of the
        foregoing, neither Borrower nor any of its Subsidiaries (A) has violated
        any Environmental Laws, (B) has any liability under any Environmental
        Laws or (C) has received notice or other communication of an
        investigation or is under

                                     39

<PAGE>

        investigation by any Governmental Authority having authority to enforce
        Environmental Laws, where such violation, liability or investigation is
        reasonably likely to have a Material Adverse Effect.  No Event of
        Default or Default has occurred and is continuing.

                (g)  LITIGATION.  No actions (including, without limitation,
        derivative actions), suits, proceedings or investigations are pending
        or, to the knowledge of Borrower, threatened against Borrower or any of
        its Subsidiaries at law or in equity in any court or before any other
        Governmental Authority which (i) are reasonably likely (alone or in the
        aggregate) to have a Material Adverse Effect or (ii) seek to enjoin,
        either directly or indirectly, the execution, delivery or performance by
        Borrower of the Credit Documents or the transactions contemplated
        thereby.

                (h)  TITLE; POSSESSION UNDER LEASES.  Set forth in Schedule 7 to
        the Collateral Certificate (as supplemented by Borrower from time to
        time in a written notice to Agent pursuant to clause (vii) of
        Subparagraph 5.01(a) or otherwise) is a complete list of all real
        property owned by Borrower or any of its Domestic Subsidiaries, with the
        owner of such property, the location of such property, a brief
        description of such property and the use of such property.  Set forth in
        Schedule 7 to the Collateral Certificate (as supplemented by Borrower
        from time to time in a written notice to Agent pursuant to clause (vii)
        of Subparagraph 5.01(a) or otherwise) is a complete list of all real
        property leased by Borrower or any of its Domestic Subsidiaries as
        lessee or sublessee, with the lessee or sublessee of such property, the
        location of such property, a brief description of such property, the use
        of such property, the owner of such property and the date and title of
        and parties to the lease for such property (including all amendments
        thereof).  Borrower and its Subsidiaries own and have good and
        marketable title, or a valid leasehold interest in, all their respective
        properties and assets as reflected in the most recent Financial
        Statements delivered to Agent (except those assets and properties
        disposed of in the ordinary course of business or otherwise in
        compliance with this Agreement since the date of such Financial
        Statements) and all respective assets and properties acquired by
        Borrower and its Subsidiaries since such date (except those disposed of
        in the ordinary course of business or otherwise in compliance with this
        Agreement).  Such assets and properties are subject to no Lien, except
        for Permitted Liens.  Each of Borrower and its Subsidiaries has complied
        with all obligations under all leases to which it is a party and enjoys
        peaceful and undisturbed possession under such leases except where the
        failure to so comply or enjoy is not reasonably likely to have a
        Material Adverse Effect.

                (i)  FINANCIAL STATEMENTS.  The Financial Statements of Borrower
        and its Subsidiaries which have been delivered to Agent, (i) are in
        accordance with the books and records of Borrower and its Subsidiaries,
        which have been maintained in accordance with good business practice;
        (ii) have been prepared in conformity with GAAP; and (iii) fairly
        present the financial conditions and results of operations of Borrower
        and its Subsidiaries as of the date thereof and for the periods covered
        thereby.  Neither Borrower nor any of its Subsidiaries has any
        Contingent Obligations or other outstanding obligations which are
        material in the aggregate, except as disclosed in the audited Financial
        Statements

                                     40

<PAGE>

        dated September 27, 1998, furnished by Borrower to Agent prior to the
        date hereof, or in the Financial Statements delivered to Agent pursuant
        to CLAUSE (I) OR (II) OF SUBPARAGRAPH 5.01(A).

                (j)  NO AGREEMENTS TO SELL ASSETS; ETC.  Neither Borrower nor
        any of its Subsidiaries has any legal obligation, absolute or
        contingent, to any Person to sell all or substantially all of the assets
        of Borrower or, except to the extent permitted pursuant to SUBPARAGRAPH
        5.02(d) OR 5.02(e), any of its Subsidiaries (other than sales in the
        ordinary course of business), or to effect any merger, consolidation or
        other reorganization of Borrower or, except to the extent permitted
        pursuant to SUBPARAGRAPH 5.02(d) OR 5.02(e), any of its Subsidiaries or
        to enter into any agreement with respect thereto.

                (k)  EMPLOYEE BENEFIT PLANS.

                        (i)     Based on the latest valuation of each Employee
                Benefit Plan that either Borrower or any ERISA Affiliate
                maintains or contributes to, or has any obligation under (which
                occurred within twelve months of the date of this
                representation), the aggregate benefit liabilities of such plan
                within the meaning of Section 4001 of ERISA did not exceed the
                aggregate value of the assets of such plan.  Neither Borrower
                nor any ERISA Affiliate has any liability with respect to any
                post-retirement benefit under any Employee Benefit Plan which is
                a welfare plan (as defined in section 3(1) of ERISA), other than
                liability for health plan continuation coverage described in
                Part 6 of Title I(B) of ERISA, which liability for health plan
                contribution coverage is not reasonably likely to have a
                Material Adverse Effect.

                        (ii)    Each Employee Benefit Plan complies, in both
                form and operation, in all material respects, with its terms,
                ERISA and the IRC, and no condition exists or event has occurred
                with respect to any such plan which would result in the
                incurrence by either Borrower or any ERISA Affiliate of any
                material liability, fine or penalty.  Each Employee Benefit
                Plan, related trust agreement, arrangement and commitment of
                Borrower or any ERISA Affiliate is legally valid and binding and
                in full force and effect.  No Employee Benefit Plan is being
                audited or investigated by any government agency or is subject
                to any pending or threatened claim or suit.  Neither Borrower
                nor any ERISA Affiliate nor any fiduciary of any Employee
                Benefit Plan has engaged in a prohibited transaction under
                section 406 of ERISA or section 4975 of the IRC.

                        (iii)   Neither Borrower nor any ERISA Affiliate
                contributes to or has any material contingent obligations to any
                Multiemployer Plan.  Neither Borrower nor any ERISA Affiliate
                has incurred any material liability (including secondary
                liability) to any Multiemployer Plan as a result of a complete
                or partial withdrawal from such Multiemployer Plan under
                Section 4201 of ERISA or as a result of a sale of assets
                described in Section 4204 of ERISA.  Neither Borrower nor any
                ERISA Affiliate has been notified that any Multiemployer Plan is
                in

                                     41

<PAGE>

                reorganization or insolvent under and within the meaning of
                Section 4241 or Section 4245 of ERISA or that any Multiemployer
                Plan intends to terminate or has been terminated under
                Section 4041A of ERISA.

                (l)  OTHER REGULATIONS.  Borrower is not subject to regulation
        under the Investment Company Act of 1940, the Public Utility Holding
        Company Act of 1935, the Federal Power Act, any state public utilities
        code or to any other Governmental Rule limiting its ability to incur
        indebtedness.

                (m)  PATENT AND OTHER RIGHTS.  Borrower and its Subsidiaries own
        or license (or could obtain such ownership or license on terms not
        materially adverse to Borrower and its Subsidiaries, taken as a whole)
        under validly existing agreements, and have the full right to license in
        the ordinary course of business as currently contemplated without the
        consent of any other Person, all patents, licenses, trademarks, trade
        names, trade secrets, service marks, copyrights and all rights with
        respect thereto, which are required to conduct their businesses as now
        conducted.

                (n)  GOVERNMENTAL CHARGES.  Borrower and its Subsidiaries have
        filed or caused to be filed all tax returns which are required to be
        filed by them.  Borrower and its Subsidiaries have paid, or made
        provision for the payment of, all taxes and other Governmental Charges
        which have or may have become due pursuant to said returns or otherwise
        and all other indebtedness, except such Governmental Charges or
        indebtedness, if any, which are being contested in good faith and as to
        which adequate reserves (determined in accordance with GAAP) have been
        provided or which are not reasonably likely to have a Material Adverse
        Effect if unpaid.

                (o)  MARGIN STOCK.  Borrower owns no Margin Stock which would
        cause it to be in violation of SUBPARAGRAPH 5.01(f).

                (p)  SUBSIDIARIES, ETC.  Set forth in SCHEDULE 4.01(p) (as
        supplemented by Borrower from time to time in a written notice to Agent)
        is a complete list of all of Borrower's Subsidiaries; the jurisdiction
        of incorporation of each such Subsidiary; for each Domestic Subsidiary
        and each direct Foreign Subsidiary, the number of shares of each class
        of Equity Security of such Subsidiary outstanding; and the percentage of
        each such Subsidiary's outstanding Equity Securities owned directly by
        Borrower or another Subsidiary of Borrower.  Except for such
        Subsidiaries, Borrower has no Subsidiaries, is not a partner in any
        partnership or a joint venturer in any joint venture.

                (q)  CATASTROPHIC EVENTS.  Neither Borrower nor any of its
        Subsidiaries and none of their properties is or has been affected by any
        fire, explosion, accident, strike, lockout or other labor dispute,
        drought, storm, hail, earthquake, embargo, act of God or other casualty
        that is reasonably likely to have a Material Adverse Effect.  There are
        no disputes presently subject to grievance procedure, arbitration or
        litigation under any of the collective bargaining agreements, employment
        contracts or employee welfare or incentive plans to which Borrower or
        any of its Subsidiaries is a party, and there are no strikes, lockouts,
        work stoppages or slowdowns, or, to the best knowledge of Borrower,

                                     42

<PAGE>

        jurisdictional disputes or organizing activities occurring or threatened
        which alone or in the aggregate are reasonably likely to have a Material
        Adverse Effect.

                (r)  BURDENSOME CONTRACTUAL OBLIGATIONS, ETC.  Neither Borrower
        nor any of its Subsidiaries and none of their properties is subject to
        any Contractual Obligation or Requirement of Law which is reasonably
        likely to have a Material Adverse Effect.

                (s)  NO MATERIAL ADVERSE EFFECT.  No event has occurred and no
        condition exists which is reasonably likely to have a Material Adverse
        Effect.

                (t)  ACCURACY OF INFORMATION FURNISHED.  None of the Credit
        Documents and none of the other certificates, statements or information
        furnished to Agent or any Lender by or on behalf of Borrower or any of
        its Subsidiaries in connection with the Credit Documents or the
        transactions contemplated thereby contains or will contain any untrue
        statement of a material fact or omits or will omit to state a material
        fact necessary to make the statements therein, in light of the
        circumstances under which they were made, not misleading; PROVIDED,
        HOWEVER, that it is recognized by Agent and the Lenders that projections
        and forecasts provided and developed by Borrower, while reflecting
        Borrower's good faith projections or forecasts based upon methods and
        data Borrower believed to be reasonable and accurate when made, are not
        to be viewed as facts and that actual results during the period or
        periods covered by any such projections and forecasts may differ from
        the projected or forecasted results.

                (u)  YEAR 2000 COMPATIBILITY.  Borrower and its Subsidiaries
        have reviewed the areas within their business and operations which could
        be adversely affected by, and have developed or are developing a program
        to address on a timely basis, the "Year 2000 Problem" (that is, the risk
        that computer applications used by Borrower and its Subsidiaries may be
        unable to recognize and perform properly date-sensitive functions
        involving certain dates prior to and any date on or after December 31,
        1999), and have made related appropriate inquiry of material suppliers
        and vendors.  Based on such review and program, Borrower believes that
        the "Year 2000 Problem" will not have a Material Adverse Effect.

        4.02.   REAFFIRMATION.  Borrower shall be deemed to have reaffirmed,
for the benefit of the Lenders and Agent, each representation and warranty
contained in PARAGRAPH 4.01 and in the other Credit Documents on and as of
the date of each Credit Event (except for representations and warranties
expressly made as of a specified date, which shall be true as of such date).

SECTION V.      COVENANTS.

        5.01.   AFFIRMATIVE COVENANTS.  Until the termination of this
Agreement and the satisfaction in full by Borrower of all Obligations,
Borrower will comply, and will cause compliance, with the following
affirmative covenants, unless Required Lenders shall otherwise consent in
writing:

                                     43

<PAGE>

                (a)  FINANCIAL STATEMENTS, REPORTS, ETC.  Borrower shall furnish
        to Agent, with sufficient copies for each Lender, the following, each in
        such form and such detail as Agent or the Required Lenders shall
        reasonably request:

                        (i)     As soon as available and in no event later than
                fifty (50) days after the last day of the first three fiscal
                quarters of Borrower in each fiscal year, a copy of the
                Financial Statements of Borrower and its Subsidiaries (prepared
                on a consolidated basis) for such quarter and for the fiscal
                year to date, certified by a Responsible Officer of Borrower to
                present fairly the financial condition, results of operations
                and other information reflected therein and to have been
                prepared in accordance with GAAP (subject to normal year-end
                audit adjustments);

                        (ii)    As soon as available and in no event later than
                one hundred, twenty (120) days after the close of each fiscal
                year of Borrower, (A) copies of the audited Financial Statements
                of Borrower and its Subsidiaries (prepared on a consolidated
                basis) for such year, prepared by independent certified public
                accountants of recognized national standing acceptable to Agent
                and (B) copies of the unqualified opinions (or qualified
                opinions reasonably acceptable to Agent) and management letters
                delivered by such accountants in connection with all such
                Financial Statements;

                        (iii)   Contemporaneously with the quarterly and
                year-end Financial Statements required by the foregoing
                CLAUSES (i) AND (ii), a compliance certificate of a Responsible
                Officer of Borrower which (A) states that no Event of Default
                and no Default has occurred and is continuing, or, if any such
                Event of Default or Default has occurred and is continuing, a
                statement as to the nature thereof and what action Borrower
                proposes to take with respect thereto, (B) sets forth, for the
                quarter or year covered by such Financial Statements or as of
                the last day of such quarter or year (as the case may be), the
                calculation of the financial ratios and tests provided in
                PARAGRAPH 5.03, (C) sets forth, as of the last day of such
                quarter or year, the amounts at such time of all Guaranty
                Obligations and all obligations on account of Rate Contracts
                and Surety Instruments of Borrower and its Subsidiaries to
                others, (D) states that the year 2000 remediation efforts of
                Borrower and its Subsidiaries are proceeding as scheduled,
                and (E) indicates whether an auditor, regulator or third party
                consultant has issued a management letter or other
                communication regarding the year 2000 exposure, program or
                progress of Borrower and/or its Subsidiaries;

                        (iv)    As soon as possible and in no event later than
                five (5) Business Days after any Responsible Officer of Borrower
                (or, in the case of (A) below, any Responsible Officer or any
                Vice President of Human Resources) knows of the occurrence or
                existence of (A) any Reportable Event under any Employee Benefit
                Plan or Multiemployer Plan; (B) any actual or threatened
                litigation, suits, claims or disputes against Borrower or any of
                its Subsidiaries which could reasonably be expected to result in
                monetary damages payable by Borrower or its Subsidiaries of

                                     44

<PAGE>

                $1,000,000 or more (alone or in the aggregate); (C) any other
                event or condition which is reasonably likely to have a Material
                Adverse Effect; or (D) any Default or Event of Default; the
                statement of the President, Chief Financial Officer or Vice
                President-Finance of Borrower setting forth details of such
                event, condition, Default or Event of Default and the action
                which Borrower proposes to take with respect thereto;

                        (v)     As soon as available and in no event later than
                five (5) Business Days after they are sent, made available or
                filed, copies of (A) all registration statements and reports
                filed by Borrower or any of its Subsidiaries with any securities
                exchange or the Securities and Exchange Commission (including,
                without limitation, all 10-Q, 10-K and 8-K reports); (B) all
                reports, proxy statements and financial statements sent or made
                available by Borrower or any of its Subsidiaries to its security
                holders; and (C) all press releases and other similar public
                concerning any material developments in the business of Borrower
                or any of its Subsidiaries made available by Borrower or any of
                its Subsidiaries to the public generally;

                        (vi)    As soon as available and in no event later than
                thirty (30) days before the first day of each fiscal year of
                Borrower, the consolidated plan and forecast of Borrower and its
                Subsidiaries for such fiscal year, including quarterly cash flow
                projections;

                        (vii)   As soon as possible and in no event later than
                thirty (30) days after the acquisition by Borrower of any
                leasehold or ownership interest in real property, a written
                supplement to Schedule 7 to the Collateral Certificate;

                        (viii)  As soon as possible and in no event later than
                thirty (30) days after the establishment or acquisition by
                Borrower or any of its Subsidiaries of any new Subsidiary or any
                new Equity Securities of any existing Subsidiary, written notice
                thereof;

                        (ix)    As soon as possible and in no event later than
                sixty (60) days after the issuance to or acquisition by Borrower
                of any new patent, trademark, copyright or mask work, written
                notice thereof; and

                        (x)     Such other instruments, agreements,
                certificates, opinions, statements, documents and information
                relating to the operations or condition (financial or otherwise)
                of Borrower or its Subsidiaries, and compliance by Borrower with
                the terms of this Agreement and the other Credit Documents as
                Agent may from time to time reasonably request.

                (b)  BOOKS AND RECORDS.  Borrower and its Subsidiaries shall at
        all times keep proper books of record and account in which full, true
        and correct entries will be made of their transactions in accordance
        with GAAP.

                                     45

<PAGE>

                (c)  INSPECTIONS.  Borrower and its Subsidiaries shall permit
        any Person designated by any Lender, upon reasonable notice and during
        normal business hours, to visit and inspect any of the properties and
        offices of Borrower and its Subsidiaries, to conduct audits of any or
        all of the Collateral at Borrower's expense, to examine the books and
        records of Borrower and its Subsidiaries and make copies thereof and to
        discuss the affairs, finances and business of Borrower and its
        Subsidiaries with, and to be advised as to the same by, their officers,
        auditors and accountants, all at such times and intervals as any Lender
        may reasonably request; provided, however, that, so long as no Default
        or Event of Default has occurred and is continuing, (i) audits of the
        Collateral shall be conducted by Persons designated by Agent at
        reasonable cost and shall not be conducted at Borrower's expense more
        than once in any twelve (12) month period and (ii) Agent shall use its
        best efforts to schedule such audits at times during which Borrower and
        its Subsidiaries are conducting their own audits in order to minimize
        the expenses incurred by Agent or its designees in performing such
        audits.

                (d)  INSURANCE.  Borrower and its Subsidiaries shall:

                        (i)     Carry and maintain insurance of the types and in
                the amounts customarily carried from time to time during the
                term of this Agreement by others engaged in substantially the
                same business as such Person and operating in the same
                geographic area as such Person, including, but not limited to,
                fire, public liability, property damage and worker's
                compensation;

                        (ii)    Carry and maintain each policy for such
                insurance with (A) a company which is rated A or better by A.M.
                Best and Company at the time such policy is placed and at the
                time of each annual renewal thereof or (B) any other insurer
                which is reasonably satisfactory to Agent;

                        (iii)   Obtain and maintain endorsements for such
                insurance as specified in Exhibit L; and

                        (iv)    Deliver to Agent from time to time, as Agent may
                request, schedules setting forth all insurance then in effect.

                (e)  GOVERNMENTAL CHARGES.  Borrower and its Subsidiaries shall
        promptly pay and discharge when due all taxes and other Governmental
        Charges prior to the date upon which penalties accrue thereon, except
        such taxes and other Governmental Charges as may in good faith be
        contested or disputed, or for which arrangements for deferred payment
        have been made, provided that in each such case appropriate reserves are
        maintained to the reasonable satisfaction of Agent.

                (f)  USE OF PROCEEDS.  Borrower shall use the proceeds of the
        Loans only for the purposes set forth in SUBPARAGRAPH 2.01(g). Borrower
        shall not use any part of the proceeds of any Loan, directly or
        indirectly, for the purpose of purchasing or carrying any Margin Stock
        or for the purpose of purchasing or carrying or trading in any
        securities

                                     46

<PAGE>

        under such circumstances as to involve Borrower, any Lender or Agent
        in a violation of Regulations T, U or X issued by the Federal
        Reserve Board.

                (g)  GENERAL BUSINESS OPERATIONS.  Except to the extent
        otherwise permitted pursuant to SUBPARAGRAPH 5.02(d), each of Borrower
        and its Subsidiaries shall (i) preserve and maintain its corporate
        existence and all of its rights, privileges and franchises reasonably
        necessary to the conduct of its business; PROVIDED, HOWEVER, that
        Borrower may cause any wholly-owned Subsidiary to be liquidated if
        Borrower's board of directors determines that it is in the best
        interests of Borrower and its Subsidiaries, taken as a whole and the
        assets of such dissolved wholly-owned Subsidiary are placed with
        Borrower or any Guarantor hereunder; (ii) conduct its business
        activities in compliance with all Requirements of Law and Contractual
        Obligations applicable to such Person, the violation of which is
        reasonably likely to have a Material Adverse Effect; and (iii) keep all
        property useful and necessary in its business in good working order and
        condition, ordinary wear and tear excepted, except where any failure to
        do so is not reasonably likely to have a Material Adverse Effect.
        Borrower shall maintain its chief executive office and principal place
        of business in the United States and shall not relocate its chief
        executive office or principal place of business outside of California
        except upon not less than ninety (90) days prior written notice to
        Agent.

                (h)  YEAR 2000 COMPATIBILITY.  Borrower and its Subsidiaries
        shall take all acts reasonably necessary to ensure that all software,
        hardware, firmware, equipment, goods and systems utilized by or material
        to their business operations or financial condition will properly
        perform date sensitive functions before, during and after the
        year 2000. At the request of Agent, Borrower shall provide to Agent
        such certifications or other evidence of compliance with this
        SUBPARAGRAPH 5.01(h) as Agent may from time to time require.

                (i)   SENIOR RANKING.  Borrower shall take, or cause to be
        taken, all actions necessary to ensure that the Secured Obligations
        are and continue to rank senior in right of payment with all other
        SECURED OR unsecured Indebtedness of Borrower, other than Permitted
        Liens.

     5.02.      NEGATIVE COVENANTS.  Until the termination of this Agreement and
the satisfaction in full by Borrower of all Obligations, borrower will comply,
and will cause compliance, with the following negative covenants, unless
Required Lenders shall otherwise consent in writing:

                (a)  INDEBTEDNESS.  Neither Borrower nor any of its Subsidiaries
        shall create, incur, assume or permit to exist any Indebtedness except
        for the following ("PERMITTED INDEBTEDNESS"):

                        (i)     The Obligations of Borrower under the Credit
                Documents;

                        (ii)    Indebtedness of Borrower and its Subsidiaries
                listed in the Disclosure Letter and existing on the date of this
                Agreement;

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<PAGE>

                        (iii)   Indebtedness of Borrower and its Subsidiaries
                arising from the endorsement of instruments for collection in
                the ordinary course of Borrower's or a Subsidiary's business;

                        (iv)    Indebtedness of Borrower and its Subsidiaries
                under Rate Contracts, provided that (A) all such arrangements
                are entered into in connection with bona fide hedging operations
                and not for speculation and (B) the aggregate net amount owed by
                Borrower and its Subsidiaries under, on account of or otherwise
                in connection with such Rate Contracts does not exceed
                $5,000,000 (marked to market) at any time;

                        (v)     Indebtedness of Borrower and its Subsidiaries
                under purchase money and construction loans and Capital Leases
                incurred by Borrower or any of its Subsidiaries to finance the
                acquisition by such Person of real property, fixtures or
                equipment or the construction of improvements to real property
                provided that (A) in each case, (y) such Indebtedness is
                incurred by such Person at the time of, or not later than sixty
                (60) days after, the acquisition by such Person of the property
                so financed or so constructed and (z) such Indebtedness does not
                exceed the purchase price or construction price (including
                acquisition of fixtures) of the property so financed or so
                constructed and (B) the aggregate amount of such Indebtedness
                outstanding at any time does not exceed $5,000,000;

                        (vi)    Indebtedness of Borrower and its Subsidiaries
                under initial or successive refinancings of any Indebtedness
                permitted by CLAUSE (ii) above, provided that (A) the principal
                amount of any such refinancing does not exceed the principal
                amount of the Indebtedness being refinanced and (B) the material
                terms and provisions of any such refinancing (including
                maturity, redemption, prepayment, default and subordination
                provisions) are no less favorable to the Lenders than the
                Indebtedness being refinanced;

                        (vii)   Indebtedness of Borrower and its Subsidiaries
                with respect to Surety Instruments in the ordinary course of
                business, provided that the aggregate amount of the obligations
                secured by such Surety Instruments at any time does not exceed
                $8,000,000;

                        (viii)  Guaranty Obligations of Borrower in respect of
                Permitted Indebtedness of its Subsidiaries;

                        (ix)    Guaranty Obligations or other related forms of
                Indebtedness incurred by borrower in connection with sales by
                Borrower of promissory notes, accounts receivable and other
                indebtedness owed to Borrower (including, without limitation,
                obligations under Borrower Note Guaranties and, if the Borrower
                Note Guaranty to ABN is replaced with some other form of
                Indebtedness, obligations under such Indebtedness), provided
                that the aggregate amount of all such notes, receivables and
                other indebtedness outstanding and so guaranteed by Borrower
                does not exceed $25,000,000 at any time;

                                     48

<PAGE>

                        (x)     Indebtedness of Borrower to any of its
                Subsidiaries, Indebtedness of any of Borrower's Subsidiaries to
                Borrower or Indebtedness of any of Borrower's Subsidiaries to
                any of Borrower's other Subsidiaries, provided that any
                Indebtedness of Borrower to any of its Subsidiaries and any
                Indebtedness of any of Borrower's Subsidiaries to Borrower shall
                be subject to Subparagraph 5.02(k);

                        (xi)    Unsecured Indebtedness of Borrower not otherwise
                permitted pursuant to clause (xii) below, provided that (A) the
                Indebtedness arising under this Agreement shall at all times
                rank senior in right of payment with such unsecured
                Indebtedness, (B) such unsecured Indebtedness does not contain
                material provisions that are more restrictive to Borrower and
                its Subsidiaries than the material provisions contained in this
                Agreement, (C) no principal payable in connection with such
                unsecured Indebtedness is scheduled for payment on or prior to
                the Maturity Date, (D) the Net Proceeds of such unsecured
                Indebtedness are applied to prepay the Loans pursuant to clause
                (ii) of Subparagraph 2.04(c) and reduce the Total Commitment
                pursuant to Subparagraph 2.02(b), and (E) the aggregate
                principal amount of all such unsecured Indebtedness outstanding
                at any time (measured at the time of the incurrence of such
                unsecured Indebtedness) does not exceed Fifty Million Dollars
                ($50,000,000);

                        (xii)   Short-term unsecured indebtedness of ADAC
                Capital incurred in connection with the financing of proposed
                sales by ADAC Capital of promissory notes, accounts receivable
                and other indebtedness owed to ADAC Capital or any of Borrower's
                other Subsidiaries arising under transactions the terms and
                conditions of which have been approved in advance by the
                Required Lenders; and

                        (xiii)  Other Indebtedness of Borrower and its
                Subsidiaries, provided that the aggregate principal amount of
                all such Indebtedness does not exceed $5,000,000 at any time.

                (b)  LIENS.  Neither Borrower nor any of its Subsidiaries shall
        create, incur, assume or permit to exist any Lien on or with respect to
        any of its assets or property of any character, whether now owned or
        hereafter acquired, except for the following ("PERMITTED LIENS"):

                        (i)     Liens granted to Agent or any Lender pursuant to
                the Security Documents or any other Credit Documents to secure
                the Secured Obligations;

                        (ii)    Liens listed in the Disclosure Letter and
                existing on the date of this Agreement;

                        (iii)   Liens for taxes or other Governmental Charges
                not at the time delinquent or thereafter payable without penalty
                or being contested in good faith,

                                     49

<PAGE>

                provided that adequate reserves for the payment thereof have
                been established in accordance with GAAP;

                        (iv)    Liens of carriers, warehousemen, mechanics,
                materialmen, vendors, and landlords and other similar Liens
                imposed by law incurred in the ordinary course of business for
                sums not overdue or being contested in good faith, provided that
                adequate reserves for the payment thereof have been established
                in accordance with GAAP;

                        (v)     Deposits under workers' compensation,
                unemployment insurance and social security laws or to secure the
                performance of bids, tenders, contracts (other than for the
                repayment of borrowed money) or leases, or to secure statutory
                obligations of surety or appeal bonds or to secure indemnity,
                performance or other similar bonds in the ordinary course of
                business;

                        (vi)    Zoning restrictions, easements, rights-of-way,
                title irregularities and other similar encumbrances, which alone
                or in the aggregate are not substantial in amount and do not
                materially detract from the value of the property subject
                thereto or interfere with the ordinary conduct of the business
                of Borrower or any of its Subsidiaries;

                        (vii)   Banker's Liens and similar Liens (including
                set-off rights) in respect of bank deposits;

                        (viii)  Liens on property or assets of any corporation
                which becomes a Subsidiary of Borrower after the date of this
                Agreement, provided that (A) such Liens exist at the time of
                such acquisition and (B) such Liens were not created in
                contemplation of such acquisition;

                        (ix)    Judgment Liens, provided that the judgment does
                not yet constitute an Event of Default under SUBPARAGRAPH
                6.01(h);

                        (x)     Rights of vendors or lessors under conditional
                sale agreements, Capital Leases or other title retention
                agreements, provided that, in each case, (A) such rights secure
                or otherwise relate to Permitted Indebtedness, (B) such rights
                do not extend to any property other than property acquired with
                the proceeds of such Permitted Indebtedness and (C) such rights
                do not secure any Indebtedness other than such Permitted
                Indebtedness;

                        (xi)    Liens in favor of customs and revenue
                authorities arising as a matter of law to secure payment of
                customs duties and in connection with the importation of goods
                in the ordinary course of Borrower's and its Subsidiaries'
                businesses;

                        (xii)   Liens securing Indebtedness which constitutes
                Permitted Indebtedness under clause (v) of Subparagraph 5.02(a)
                provided that, in each case,

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<PAGE>

                such Lien (A) covers only those assets (together with
                accessions thereto, replacements and proceeds, including
                insurance proceeds, and substitutions therefor), the
                acquisition of which was financed by such Permitted
                Indebtedness, and (B) secures only such Permitted Indebtedness;

                        (xiii)  Liens on the property or assets of any
                Subsidiary of Borrower in favor of Borrower or any other
                Subsidiary of Borrower;

                        (xiv)   Liens incurred in connection with the extension,
                renewal or refinancing of the Indebtedness secured by the Liens
                described in CLAUSE (ii) OR (xii) above, provided that any
                extension, renewal or replacement Lien (A) is limited to the
                property covered by the existing Lien and (B) secures
                Indebtedness which is no greater in amount and has material
                terms no less favorable to the Lenders than the Indebtedness
                secured by the existing Lien;

                        (xv)    Liens on insurance proceeds in favor of
                insurance companies with respect to the financing of insurance
                premiums;

                        (xvi)   Leases and subleases of, and licenses and
                sublicenses with respect to, property where Borrower or a
                Subsidiary is the lessor or licensor (or sublessor or
                sublicensor); provided that such leases, subleases, licenses and
                sublicenses do not in the aggregate materially interfere with
                the business of Borrower and its Subsidiaries taken as a whole;

                        (xvii)  Liens on property or assets of Borrower or any
                Subsidiary of Borrower arising pursuant to transactions of the
                type permitted pursuant to Subparagraph 5.02(c)(vi); and

                        (xviii) Other Liens in an amount not to exceed $100,000.

                (c)  ASSET DISPOSITIONS.  Neither Borrower nor any of its
        Subsidiaries shall sell, lease, transfer or otherwise dispose of any of
        its assets or property, whether now owned or hereafter acquired, except
        for the following:

                        (i)     Sales of inventory by Borrower and its
                Subsidiaries in the ordinary course of their businesses;

                        (ii)    Sales of surplus, damaged, worn or obsolete
                equipment or inventory for not less than fair market value;

                        (iii)   Sales or other dispositions of Investments
                permitted by CLAUSE (i) OF SUBPARAGRAPH 5.02(e) for not less
                than fair market value;

                        (iv)    Sales or assignments of defaulted receivables to
                a collection agency in the ordinary course of business;

                                     51

<PAGE>

                        (v)     Sales or other dispositions of assets and
                property by Borrower to any of Borrower's Subsidiaries or by any
                of Borrower's Subsidiaries to Borrower or any of its other
                Subsidiaries, provided that the terms of any such sales or other
                dispositions by or to Borrower are terms which are no less
                favorable to Borrower then would prevail in the market for
                similar transactions between unaffiliated parties dealing at
                arm's length;

                        (vi)    Sales by Borrower and ADAC Capital of promissory
                notes, accounts receivable and other indebtedness owed to
                Borrower and its Subsidiaries, provided that each such sale is
                (A) for cash consideration which is not less than the fair
                market value of the promissory notes, accounts receivable or
                other indebtedness sold and (B) without any recourse to
                Borrower, ADAC Capital or any of Borrower's other Subsidiaries
                except to the extent permitted by CLAUSE (ix) of Subparagraph
                5.02(a);

                        (vii)   Sales and licenses by Borrower of its
                intellectual property, in the ordinary course of its business,
                provided that, in each case, the terms of the transaction are
                terms which then would prevail in the market for similar
                transactions between unaffiliated parties dealing at arm's
                length; and

                        (viii)  Other sales, leases, transfers and disposals of
                assets and property, provided that the aggregate value of all
                such assets and property (based upon the greater of the fair
                market or book value of such assets and property) so sold,
                leased, transferred or otherwise disposed of in any fiscal year
                does not exceed $10,000,000 per year.

                (d)  MERGERS, ACQUISITIONS, ETC.  Neither Borrower nor any of
        its Subsidiaries shall consolidate with or merge into any other Person
        or permit any other Person to merge into it, establish any Subsidiary or
        acquire any Person or all or substantially all of the assets of any
        Person, except that:

                        (i)     Any Subsidiary of Borrower may merge into
                Borrower or any wholly-owned Subsidiary of Borrower;

                        (ii)    Borrower and its Subsidiaries may acquire any
                Person or all or substantially all of the assets of any Person,
                provided that (A) such Person or such assets are in a line of
                business permitted under SUBPARAGRAPH 5.02(f) and (B)
                immediately after giving effect to such acquisition, Borrower is
                in compliance with each of the financial covenants contained in
                PARAGRAPH 5.03; and

                        (iii)   Borrower and its Subsidiaries may acquire any
                other Person or all or substantially all of the assets of any
                other Person, provided that the aggregate cost of such
                acquisitions does not exceed ten percent (10%) of the Tangible
                Net Worth of Borrower and its Subsidiaries.  In determining the
                aggregate amount of acquisitions permitted under this CLAUSE
                (iii) at any time during a fiscal year

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                subject to this clause, the Tangible Net Worth of Borrower and
                its Subsidiaries as of the last day of the most recently ended
                fiscal quarter shall be used.

                (e)  INVESTMENTS.  Neither Borrower nor any of its Subsidiaries
        shall make any Investment except for Investments in the following:

                        (i)     Investments of Borrower and its Subsidiaries in
                Cash Equivalents;

                        (ii)    Any transaction involving Borrower or any of its
                Domestic Subsidiaries permitted by Subparagraph 5.02(a) or
                clauses (ii), and (iii) of Subparagraph 5.02(d);

                        (iii)   Investments by Borrower and its Subsidiaries in
                each other, provided that  with respect to Investments by
                Borrower in its Foreign Subsidiaries , such Investments shall be
                limited to (A) the Investments listed in the Disclosure Letter
                and existing on the First Amendment Effective Date and (b) other
                Investments having an aggregate book value of not more than
                $10,000,000 at any time;

                        (iv)    Investments consisting of loans to employees,
                officers and directors;

                        (v)     Investments arising under Rate Contracts
                otherwise permitted pursuant to SUBPARAGRAPH 5.02(a)(iv);

                        (vi)    Investments (other than Investments in Foreign
                Subsidiaries otherwise permitted pursuant to clause (iii) above)
                listed in the Disclosure Letter and existing on the date of this
                Agreement;

                        (vii)   Investments received in the settlement of
                delinquent obligations or disputes, including Investments
                received in connection with the bankruptcy or reorganization of
                third Persons;

                        (viii)  Investments consisting of deposit accounts
                maintained in the ordinary course of business;

                        (ix)    Investments accepted in connection with
                dispositions of assets otherwise permitted under SUBPARAGRAPH
                5.02(c); and

                        (x)     Other Investments not otherwise permitted
                pursuant to this SUBPARAGRAPH 5.02(e); provided that the
                aggregate amount of such Investments does not exceed $5,000,000
                at any time.

                (f)  CHANGE IN BUSINESS.  Neither Borrower nor any of its
        Subsidiaries shall engage, either directly or indirectly through
        Affiliates, in any business substantially different from businesses
        associated or connected with radiology or cardiology

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<PAGE>

        information systems, radiation planning, or servicing or manufacturing
        new or used nuclear medical equipment.

                (g)  INDEBTEDNESS PAYMENTS, ETC.  Neither Borrower nor any of
        its Subsidiaries shall (i) prepay, redeem, purchase, defease or
        otherwise satisfy in any manner prior to the scheduled payment thereof
        any Indebtedness for borrowed money (other than the Obligations or any
        Indebtedness owed by any Subsidiary to Borrower) or lease obligations or
        (ii) amend, modify or otherwise change the terms of any document,
        instrument or agreement evidencing Indebtedness for borrowed money
        (other than the Obligations or any Indebtedness owed by any Subsidiary
        to Borrower) or lease obligations so as to accelerate the scheduled
        payment thereof.

                (h)  Security Issuances.  None of Borrower's Subsidiaries shall
        issue, offer or sell any Equity Securities not currently outstanding
        except that any of Borrower's Subsidiaries may issue Equity Securities
        to Borrower or a wholly-owned Subsidiary of Borrower, provided that such
        Equity Securities are pledged to Agent pursuant to the Pledge Agreement
        to the extent required by the Pledge Agreement.

                (i)  Redemptions.  Neither Borrower nor any of its Subsidiaries
        shall purchase, redeem, retire, defease or otherwise acquire for value
        any of its Equity Securities.

                (j)  ERISA.  Neither Borrower nor any ERISA Affiliate shall
        (i) adopt or institute any Employee Benefit Plan that is an
        employee pension benefit plan within the meaning of Section 3(2) of
        ERISA, (ii) take any action which will result in the partial or
        complete withdrawal, within the meanings of sections 4203 and 4205 of
        ERISA, from a Multiemployer Plan, (iii) engage or permit any Person
        to engage in any transaction prohibited by section 406 of ERISA or
        section 4975 of the IRC involving any Employee Benefit Plan or
        Multiemployer Plan which would subject either Borrower or any ERISA
        Affiliate to any tax, penalty or other liability including a
        liability to indemnify, (iv) incur or allow to exist any accumulated
        funding deficiency (within the meaning of section 412 of the IRC or
        section 302 of ERISA), (v) fail to make full payment when due of all
        amounts due as contributions to any Employee Benefit Plan or
        Multiemployer Plan, (vi) fail to comply with the requirements of
        section 4980B of the IRC or Part 6 of Title I(B) of ERISA, or (vii)
        adopt any amendment to any Employee Benefit Plan which would require
        the posting of security pursuant to section 401(a)(29) of the IRC,
        where singly or cumulatively, the above would have a Material Adverse
        Effect.

                (k)  TRANSACTIONS WITH AFFILIATES.  Neither Borrower nor any of
        its Subsidiaries shall enter into any Contractual Obligation with any
        Affiliate(other than Borrower or any direct or indirect wholly-owned
        Subsidiary of Borrower) or engage in any other transaction with any
        Affiliate (other than Borrower or any direct or indirect wholly-owned
        Subsidiary of Borrower) except upon terms at least as favorable to
        Borrower or such Subsidiary as an arms-length transaction with
        unaffiliated Persons.

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<PAGE>

                (l)  CAPITAL EXPENDITURES.  Borrower and its Subsidiaries shall
        not make Capital Expenditures on a consolidated basis in excess of
        $20,000,000 in any fiscal year.

                (m)  ACCOUNTING CHANGES.  Neither Borrower nor any of its
        Subsidiaries shall change (i) its fiscal year (currently October 1
        through September 30) or (ii) its accounting practices except as
        required by GAAP.

        5.03.   FINANCIAL COVENANTS.  Until the termination of this agreement
and the satisfaction in full by borrower of all obligations, borrower will
comply, and will cause compliance, with the following financial covenants,
unless required lenders shall otherwise consent in writing:

                (a)  EBITDAR/FIXED CHARGE COVERAGE RATIO.  Borrower shall not
        permit the EBITDAR/Fixed Charge Coverage Ratio of Borrower and its
        Subsidiaries to be less than the ratios set forth below as of the end
        of the four fiscal quarter periods set forth below:

               Four fiscal quarter periods ending on the
                       last day of the third fiscal quarter
                       in 1999, the fourth fiscal quarter in
                       1999 and the first fiscal quarter in 2000    1.75 to 1.00

               Four fiscal quarter period ending on the
                       last day of the second fiscal quarter in
                       2000                                         2.00 to 1.00

               Four fiscal quarter period ending on the
                       last day of the third fiscal quarter in
                       2000                                         2.75 to 1.00

               Four fiscal quarter period ending on the
                       last day of the fourth fiscal quarter in
                       2000 and the last day of each fiscal quarter
                       thereafter                                   3.25 to 1.00

                (b)  TANGIBLE NET WORTH.  Borrower shall not permit the sum of
        (1) Tangible Net Worth of Borrower and its Subsidiaries on the last day
        of any fiscal quarter (any such date to be referred to herein as a
        "determination date") which occurs on or after  July 4, 1999 (such date
        to be referred to herein as the "base date") plus (2) the after tax
        amount (if any) of the Capitalized Spare Parts 1999 Non-Ordinary Charges
        and the Latin American Notes 1999 Non-Ordinary Charges  of Borrower and
        its Subsidiaries for each quarter after the base date through and
        including the quarter ending immediately prior to the determination
        date, to be less than the sum on such determination date of the
        following:

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<PAGE>

                        (i)     $64,000,000; provided, however, that if Borrower
                has not completed the UGM Acquisition prior to the end of its
                first fiscal quarter in 2000, $70,000,000;

                                         PLUS

                        (ii)    Fifty percent (50%) of the sum of the
                consolidated quarterly net income (ignoring any quarterly
                losses) of Borrower and its Subsidiaries for each quarter after
                the base date through and including the quarter ending
                immediately prior to the determination date;

                                         PLUS

                        (iii)    Eighty five percent (85%) of the Net Proceeds
                realized by Borrower and its Subsidiaries from the issuance
                and/or sale of Equity Securities during the period commencing on
                the base date and ending on the determination date;

                                        MINUS

                        (iv)    If the determination date is after the date of
                any permitted acquisition by Borrower pursuant to SUBPARAGRAPH
                5.02(d), an amount equal to the after-tax sum of the Acquisition
                In-Process R&D Charges taken by Borrower during any such fiscal
                quarter.

                (c)  Debt/EBITDA Ratio.  Borrower shall not permit the
        Debt/EBITDA Ratio of borrower and its subsidiaries to be greater than
        the ratios set forth below as of the end of the four fiscal quarter
        periods set forth below:

           Four fiscal quarter periods ending on the
                   last day of the third fiscal quarter
                   in 1999, and the fourth fiscal quarter in 1999   3.00 to 1.00

           Four fiscal quarter period ending on the
                   last day of the first fiscal quarter in 2000     3.25 to 1.00

           Four fiscal quarter period ending on the
                   last day of the second fiscal quarter in 2000
                   and the date day of each fiscal quarter
                   thereafter 2.50 to 1.00;

        Provided, however, that for every four fiscal quarter period ending on
        the last day of a fiscal quarter occurring after the date Agent and the
        Lenders release their security interest in the Collateral securing the
        Secured Obligations pursuant to

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<PAGE>

        Subparagraph 2.12(e), Borrower shall not permit the Debt/EBITDA Ratio
        of Borrower and its Subsidiaries to be greater than 2.00 to 1.00.
                (d)  PROFITABILITY.  Borrower shall not permit the consolidated
        net income of Borrower and its Subsidiaries (i) for the third fiscal
        quarter in 1999 to be a loss in excess of $9,000,000, (ii) for the
        fourth fiscal quarter in 1999 to be less than $1.00 and (iii) for any
        other fiscal quarter to be less than $1.00.  In calculating the
        consolidated net income of Borrower and its Subsidiaries for the third
        fiscal quarter in 1999, an amount equal to the after-tax sum of any
        Latin American Notes 1999 Non-Ordinary Charges taken by Borrower during
        such fiscal quarter shall be ignored.  In addition, in calculating the
        consolidated net income of Borrower and its Subsidiaries for the fourth
        fiscal quarter in 1999, an amount equal to the sum of the 1999
        Litigation Reserve, the after-tax sum of any Capitalized Spare Parts
        1999 Non-Ordinary Charges and the Latin American Notes 1999 Non-Ordinary
        Charges taken by Borrower during such fiscal quarter shall be ignored.
        Finally, in calculating the consolidated net income of Borrower and its
        Subsidiaries for any quarter for the purposes of this subparagraph, an
        amount equal to the after-tax sum of any Acquisition In-Process R&D
        Charges taken by Borrower during such fiscal quarter shall be ignored.

SECTION VI.     DEFAULT.

        6.01.   EVENTS OF DEFAULT.  The occurrence or existence of any one or
more of the following shall constitute an "EVENT OF DEFAULT" hereunder:

                (a)  NON-PAYMENT. Borrower shall (i) fail to pay within one (1)
        day after the same becomes due any principal of any Loan or (ii) fail to
        pay within five (5) days after the same becomes due any interest, fees
        or other amount required under the terms of this Agreement or any of the
        other Credit Documents; or

                (b)  SPECIFIC DEFAULTS.  Borrower or any of its Subsidiaries
        shall fail to observe or perform any covenant, obligation, condition or
        agreement set forth in SUBPARAGRAPH 5.01(d), PARAGRAPH 5.02 or PARAGRAPH
        5.03; or

                (c)  OTHER DEFAULTS.  Borrower or any of its Subsidiaries shall
        fail to observe or perform any other covenant, obligation, condition or
        agreement contained in this Agreement or the other Credit Documents and
        such failure shall continue for twenty (20) days after the earlier of
        (i) the date a Responsible Officer first knew or should have known of
        such failure and (ii) the date Agent delivers to Borrower a notice of
        such failure; or

                (d)  REPRESENTATIONS AND WARRANTIES.  Any representation,
        warranty, certificate, information or other statement (financial or
        otherwise) made or furnished by or on behalf of Borrower or any of its
        Subsidiaries to Agent or any Lender in or in connection with this
        Agreement or any of the other Credit Documents, or as an inducement to
        Agent or

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<PAGE>

        any Lender to enter into this Agreement, shall be false, incorrect,
        incomplete or misleading in any material respect when made or
        furnished; or
                (e)  CROSS-DEFAULT.  (i) Borrower or any of its Subsidiaries
        shall fail to make any payment when due on account of any Indebtedness
        of such Person (other than the Obligations) and such failure shall
        continue beyond any period of grace provided with respect thereto, if
        the amount of such Indebtedness exceeds $1,000,000 or the effect of such
        failure is to cause, or permit the holder or holders thereof to cause,
        Indebtedness of Borrower and its Subsidiaries (other than the
        Obligations) in an aggregate amount exceeding $1,000,000 to become due;
        (ii) Borrower or any of its Subsidiaries shall otherwise fail to observe
        or perform any agreement, term or condition contained in any agreement
        or instrument relating to any Indebtedness of such Person (other than
        the Obligations), or any other event shall occur or condition shall
        exist, if the effect of such failure, event or condition is to cause, or
        permit the holder or holders thereof to cause, (A) Indebtedness of
        Borrower and its Subsidiaries (other than the Obligations) in an
        aggregate amount exceeding $1,000,000 to become due (and/or to be
        secured by cash collateral) or (B) Indebtedness constituting secured
        Obligations to become due (and/or to be secured by cash collateral); or

                (f)  INSOLVENCY, VOLUNTARY PROCEEDINGS.  Borrower or any of its
        Subsidiaries shall (i) apply for or consent to the appointment of a
        receiver, trustee, liquidator or custodian of itself or of all or a
        substantial part of its property, (ii) be unable, or admit in writing
        its inability, to pay its debts generally as they mature, (iii) make a
        general assignment for the benefit of its or any of its creditors,
        (iv) be dissolved or liquidated in full or in part, (v) become insolvent
        (as such term may be defined or interpreted under any applicable
        statute), (vi) commence a voluntary case or other proceeding seeking
        liquidation, reorganization or other relief with respect to itself or
        its debts under any bankruptcy, insolvency or other similar law now or
        hereafter in effect or consent to any such relief or to the appointment
        of or taking possession of its property by any official in an
        involuntary case or other proceeding commenced against it, or (vi) take
        any action for the purpose of effecting any of the foregoing; or

                (g)  INVOLUNTARY PROCEEDINGS.  Proceedings for the appointment
        of a receiver, trustee, liquidator or custodian of Borrower or any of
        its Subsidiaries or of all or a substantial part of the property
        thereof, or an involuntary case or other proceedings seeking
        liquidation, reorganization or other relief with respect to Borrower or
        any of its Subsidiaries or the debts thereof under any bankruptcy,
        insolvency or other similar law now or hereafter in effect shall be
        commenced and an order for relief entered or such proceeding shall not
        be dismissed or discharged within sixty (60) days of commencement; or

                (h)  JUDGMENTS.  (i) One or more judgments, orders, decrees or
        arbitration awards requiring Borrower and/or its Subsidiaries to pay an
        aggregate amount of $1,000,000 or more (exclusive of amounts covered by
        insurance issued by an insurer not an Affiliate of Borrower and
        otherwise satisfying the requirements set forth in SUBPARAGRAPH 5.01(d))

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<PAGE>

        shall be rendered against Borrower and/or any of its Subsidiaries in
        connection with any single or related series of transactions, incidents
        or circumstances and the same shall not be vacated or stayed for a
        period of ten (10) consecutive days; (ii) any judgment, writ,
        assessment, warrant of attachment, tax lien or execution or similar
        process shall be issued or levied against a substantial part of the
        property of Borrower or any of its Subsidiaries and the same shall not
        be released, stayed, vacated or otherwise dismissed within ten (10) days
        after issue or levy; or (iii) any other judgments, orders, decrees,
        arbitration awards, writs, assessments, warrants of attachment, tax
        liens or executions or similar processes which, alone or in the
        aggregate, are reasonably likely to have a Material Adverse Effect are
        rendered, issued or levied; or

                (i)  CREDIT DOCUMENTS.  Any Credit Document or any material term
        thereof shall cease to be, or be asserted by Borrower or any of its
        Subsidiaries not to be, a legal, valid and binding obligation of
        Borrower or any of its Subsidiaries enforceable in accordance with its
        terms; or

                (j)  ERISA.  Any Reportable Event which constitutes grounds for
        the termination of any Employee Benefit Plan by the PBGC or for the
        appointment of a trustee by the PBGC to administer any Employee Benefit
        Plan shall occur, or any Employee Benefit Plan shall be terminated
        within the meaning of Title IV of ERISA or a trustee shall be appointed
        by the PBGC to administer any Employee Benefit Plan; or

                (k)  CHANGE OF CONTROL.  Any Change of Control shall occur; or

                (l)  MATERIAL ADVERSE EFFECT.  Any event(s) or condition(s)
        which is(are) reasonably likely to have a Material Adverse Effect shall
        occur or exist.

     6.02.      REMEDIES.  At any time after the occurrence and during the
continuance of any event of default (other than an event of default referred to
in SUBPARAGRAPH 6.01(f) or 6.01(g)), Agent may, with the consent of the Required
Lenders, or shall, upon instructions from the Required Lenders, by written
notice to Borrower, (a) terminate the Commitments and the obligations of the
Lenders to make Loans and/or (b) declare all outstanding Obligations payable by
Borrower to be immediately due and payable without presentment, demand, protest
or any other notice of any kind, all of which are hereby expressly waived,
anything contained herein or in the Amended and Restated Notes to the contrary
notwithstanding.  Upon the occurrence or existence of any Event of Default
described in SUBPARAGRAPH 6.01(f) or 6.01(g), immediately and without notice,
(1) the Commitments and the obligations of the Lenders to make Loans shall
automatically terminate and (2) all outstanding Obligations payable by Borrower
hereunder shall automatically become immediately due and payable, without
presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived, anything contained herein or in the Amended and
Restated Notes to the contrary notwithstanding.  In addition to the foregoing
remedies, upon the occurrence or existence of any Event of Default, Agent may
exercise any other right, power or remedy available to it under any of the
Credit Documents or otherwise by law, either by suit in equity or by action at
law, or both.

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SECTION VII.    THE AGENT AND RELATIONS AMONG LENDERS.

        7.01.   APPOINTMENT, POWERS AND IMMUNITIES.  Each Lender hereby appoints
and authorizes Agent to act as its agent hereunder and under the other Credit
Documents with such powers as are expressly delegated to Agent by the terms of
this Agreement and the other Credit Documents, together with such other powers
as are reasonably incidental thereto.  Agent shall not have any duties or
responsibilities except those expressly set forth in this Agreement or in any
other Credit Document, be a trustee for any Lender or have any fiduciary duty to
any Lender.  Notwithstanding anything to the contrary contained herein Agent
shall not be required to take any action which is contrary to this Agreement or
any other Credit Document or any applicable Governmental Rule.  Neither Agent
nor any Lender shall be responsible to any other Lender for any recitals,
statements, representations or warranties made by Borrower or any of its
Subsidiaries contained in this Agreement or in any other Credit Document, for
the value, validity, effectiveness, genuineness, enforceability or sufficiency
of this Agreement or any other Credit Document or for any failure by Borrower or
any of its Subsidiaries to perform their respective obligations hereunder or
thereunder.  Agent may employ agents and attorneys-in-fact and shall not be
responsible to any Lender for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care.  Neither Agent nor any of
its directors, officers, employees, agents or advisors shall be responsible to
any Lender for any action taken or omitted to be taken by it or them hereunder
or under any other Credit Document or in connection herewith or therewith,
except for its or their own gross negligence or willful misconduct.  Except as
otherwise provided under this Agreement, Agent shall take such action with
respect to the Credit Documents as shall be directed by the Required Lenders.

     7.02.      RELIANCE BY AGENT.  Agent shall be entitled to rely upon any
certificate, notice or other document (including any cable, telegram, facsimile
or telex) believed by it in good faith to be genuine and correct and to have
been signed or sent by or on behalf of the proper Person or Persons, and upon
advice and statements of legal counsel, independent accountants and other
experts selected by Agent with reasonable care.  As to any other matters not
expressly provided for by this Agreement, Agent shall not be required to take
any action or exercise any discretion, but shall be required to act or to
refrain from acting upon instructions of the Required Lenders and shall in all
cases be fully protected by the Lenders in acting, or in refraining from acting,
hereunder or under any other Credit Document in accordance with the instructions
of the Required Lenders, and such instructions of the Required Lenders and any
action taken or failure to act pursuant thereto shall be binding on all of the
Lenders.

     7.03.      DEFAULTS.  Agent shall not be deemed to have knowledge or notice
of the occurrence of any Default or Event of Default unless Agent has received a
written notice from a Lender or Borrower, referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"Notice of Default".  If Agent receives such a notice of the occurrence of a
Default or Event of Default, Agent shall give prompt notice thereof to the
Lenders.  Agent shall take such action with respect to such Default or Event of
Default as shall be reasonably directed by the Required Lenders; PROVIDED,
HOWEVER, that until Agent shall have received such directions, Agent may (but
shall not be obligated to) take such action, or refrain

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<PAGE>

from taking such action, with respect to such Default or Event of Default as
it shall deem advisable in the best interest of the Lenders.

     7.04.      INDEMNIFICATION.  Without limiting the Obligations of
Borrower hereunder, each Lender agrees to indemnify Agent, ratably in
accordance with their Proportionate Shares, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may at any
time be imposed on, incurred by or asserted against Agent in any way relating
to or arising out of this Agreement or any documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or
thereby or the enforcement of any of the terms hereof or thereof; PROVIDED,
HOWEVER, that no Lender shall be liable for any of the foregoing to the
extent they arise from Agent's gross negligence or willful misconduct.  Agent
shall be fully justified in refusing to take or in continuing to take any
action hereunder unless it shall first be indemnified to its satisfaction by
the Lenders against any and all liability and expense which may be incurred
by it by reason of taking or continuing to take any such action. The
obligations of each Lender under this PARAGRAPH 7.04 shall survive the
payment and performance of the Obligations, the termination of this Agreement
and any Lender ceasing to be a party to this Agreement (with respect to
events which occurred prior to the time such Lender ceased to be a Lender
hereunder).
     7.05.      NON-RELIANCE.  Each Lender represents that it has, independently
and without reliance on Agent, or any other Lender, and based on such documents
and information as it has deemed appropriate, made its own appraisal of the
business, prospects, management, financial condition and affairs of Borrower and
the Subsidiaries and its own decision to enter into this Agreement and agrees
that it will, independently and without reliance upon Agent or any other Lender,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own appraisals and decisions in taking or not taking
action under this Agreement.  Neither Agent nor any of its affiliates nor any of
their respective directors, officers, employees, agents or advisors shall (a) be
required to keep any Lender informed as to the performance or observance by
Borrower or any of its Subsidiaries of the obligations under this Agreement or
any other document referred to or provided for herein or to make inquiry of, or
to inspect the properties or books of Borrower or any of its Subsidiaries; (b)
have any duty or responsibility to provide any Lender with any credit or other
information concerning Borrower or any of its Subsidiaries which may come into
the possession of Agent, except for notices, reports and other documents and
information expressly required to be furnished to the Lenders by Agent
hereunder; or (c) be responsible to any Lender for (i) any recital, statement,
representation or warranty made by Borrower or any officer, employee or agent of
Borrower in this Agreement or in any of the other Credit Documents, (ii) the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any Credit Document, (iii) the value or sufficiency of the
Collateral or the validity or perfection of any of the liens or security
interests intended to be created by the Credit Documents, or (iv) any failure by
Borrower to perform its obligations under this Agreement or any other Credit
Document.

        7.06.   RESIGNATION OR REMOVAL OF AGENT.  Agent may resign at any time
by giving thirty (30) days prior written notice thereof to Borrower and the
Lenders, and Agent may be removed at any time with or without cause by the
Required Lenders.  Upon any such resignation or removal,

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<PAGE>

the Required Lenders shall have the right to appoint a successor agent, which
agent, if not a lender, shall be reasonably acceptable to borrower; PROVIDED,
HOWEVER, that Borrower shall have no right to approve a successor Agent if a
Default or an Event of Default has occurred and is continuing.  Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from the duties and obligations thereafter arising
hereunder.  After any retiring Agent's resignation or removal hereunder as
Agent, the provisions of this SECTION VII shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Agent.

     7.07.      AUTHORIZATION.  Agent is hereby authorized by the Lenders to
execute, deliver and perform, each of the Credit Documents to which Agent is or
is intended to be a party and each Lender agrees to be bound by all of the
agreements of Agent contained in the Credit Documents.

     7.08.      AGENT IN ITS INDIVIDUAL CAPACITY.  Agent and its affiliates may
make loans to, accept deposits from and generally engage in any kind of banking
or other business with Borrower and its Subsidiaries and Affiliates as though
Agent were not Agent hereunder.  With respect to Loans, if any, made by Agent in
its capacity as a Lender, Agent in its capacity as a Lender shall have the same
rights and powers under this Agreement and the other Credit Documents as any
other Lender and may exercise the same as though it were not Agent, and the
terms "Lender" or "Lenders" shall include Agent in its capacity as a Lender.

SECTION VIII.   MISCELLANEOUS.

        8.01.   NOTICES.  Except as otherwise provided herein, all notices,
requests, demands, consents, instructions or other communications to or upon
Borrower, any Lender or Agent under this Agreement or the other Credit Documents
shall be in writing and faxed, mailed or delivered, if to Borrower or Agent, at
its respective facsimile number or address set forth below or, if to any Lender,
at the address or facsimile number specified beneath the heading "Address for
Notices" under the name of such Lender in SCHEDULE I (or to such other facsimile
number or address for any party as indicated in any notice given by that party
to the other parties).  All such notices and communications shall be effective
(a) when sent by Federal Express or other overnight service of recognized
standing, on the Business Day following the deposit with such service; (b) when
mailed, first class postage prepaid and addressed as aforesaid through the
United States Postal Service, upon receipt; (c) when delivered by hand, upon
delivery; and (d) when faxed, upon confirmation of receipt; PROVIDED, HOWEVER,
that any notice delivered to Agent under SECTION II shall not be effective until
received by Agent.

                        Agent:  ABN AMRO Bank N.V.
                                101 California Street, Suite 4550
                                San Francisco, CA  94111-5812
                                Attn:  Dianne Barkley
                                Telephone:  (415) 984-3706
                                Fax No:  (415) 362-3524

                                with a copy to:

                                       62

<PAGE>

                                ABN AMRO Bank N.V.
                                1325 Avenue of the Americas, 9th Floor
                                New York, NY  10019
                                Attn:  Linda Boardman
                                Telephone:  (212) 314-1724
                                Fax No:  (212) 314-1709

                                And

                                ABN AMRO Bank N.V.
                                208 S. LaSalle Street, Suite 1500
                                Chicago, IL  60604-1003
                                Attn:  Joseph Coriaci
                                       Credit Administration
                                Telephone: (312) 992-5118
                                Fax No.:  (312) 992-5111
                Borrower:       ADAC Laboratories
                                540 Alder Drive
                                Milpitas, CA  95035
                                Attn:  Ronald Lindberg
                                Telephone:  (408) 321-9100
                                Fax No:  (408) 321-9686

Each Notice of Borrowing, Notice of Conversion and Notice of Interest Period
Selection shall be given by Borrower to Agent's office located at the address
referred to above during Agent's normal business hours; PROVIDED, HOWEVER, that
any such notice received by Agent after 10:30 a.m. on any Business Day shall be
deemed received by Agent on the next Business Day.  In any case where this
Agreement authorizes notices, requests, demands or other communications by
Borrower to Agent or any Lender to be made by telephone or facsimile, Agent or
any Lender may conclusively presume that anyone purporting to be a person
designated in any incumbency certificate or other similar document received by
Agent or a Lender is such a person.

        8.02.   EXPENSES.  Borrower shall pay on demand, whether or not any Loan
is made hereunder, (a) all reasonable fees and expenses, including reasonable
attorneys' fees and expenses, incurred by Agent in connection with the
preparation, negotiation, execution and delivery of, and the exercise of its
duties under, this Agreement and the other Credit Documents, and the
preparation, negotiation, execution and delivery of amendments and waivers
hereunder and thereunder and (b) all reasonable fees and expenses, including
reasonable attorneys' fees and expenses, incurred by Agent and the Lenders in
the enforcement or attempted enforcement of any of the obligations or in
preserving any of Agent's or the Lenders' rights and remedies (including,
without limitation, all such fees and expenses incurred in connection with any
"workout" or restructuring affecting the Credit Documents or the Obligations or
any bankruptcy or similar proceeding involving Borrower or any of its
Subsidiaries).  As used herein, the term "reasonable

                                       63

<PAGE>

attorneys' fees and expenses" shall include, without limitation, allocable
costs and expenses of Agent's and Lenders' in-house legal counsel and staff.
The obligations of Borrower under this PARAGRAPH 8.02 shall survive the
payment and performance of the Obligations and the termination of this
Agreement.

        8.03.   INDEMNIFICATION.  To the fullest extent permitted by law,
Borrower agrees to protect, indemnify, defend and hold harmless Agent, the
Lenders and their Affiliates and their respective directors, officers,
employees, agents and advisors ("INDEMNITEES") from and against any and all
liabilities, losses, damages or expenses of any kind or nature and from any
suits, claims or demands (including in respect of or for reasonable attorney's
fees and other expenses) arising on account of or in connection with any matter
or thing or action or failure to act by Indemnitees, or any of them, arising out
of or relating to the Credit Documents or any transaction contemplated thereby,
including without limitation any use by Borrower of any proceeds of the Loans,
except to the extent such liability arises from the willful misconduct or gross
negligence of such Indemnitee.  Upon receiving knowledge of any suit, claim or
demand asserted by a third party that Agent or any Lender believes is covered by
this indemnity, Agent or such Lender shall give Borrower notice of the matter
and an opportunity to defend it, at Borrower's sole cost and expense, with legal
counsel satisfactory to Agent or such Lender, as the case may be.  Agent or such
Lender may also require Borrower to defend the matter.  Any failure or delay of
Agent or any Lender to notify Borrower of any such suit, claim or demand shall
not relieve Borrower of its obligations under this PARAGRAPH 8.03 but shall
reduce such obligations to the extent of any increase in those obligations
caused solely by any such failure or delay which is unreasonable.  The
obligations of Borrower under this PARAGRAPH 8.03 shall survive the payment and
performance of the Obligations and the termination of this Agreement.

        8.04.   WAIVERS; AMENDMENTS.  Any term, covenant, agreement or condition
of this Agreement or any other Credit Document may be amended or waived, and any
consent under this Agreement or any other Credit Document may be given, if such
amendment, waiver or consent is in writing and is signed by Borrower and the
required Lenders (or Agent on behalf of the required Lenders with the written
approval of the Required Lenders); PROVIDED, HOWEVER that:

                (a)  Any amendment, waiver or consent which would (i) increase
        the Total Commitment, (ii) extend the Maturity Date, (iii) reduce the
        principal of or interest on any Loan or any fees or other amounts
        payable for the account of the Lenders hereunder, (iv) extend any
        scheduled principal, interest or fee payment date, (v) amend this
        PARAGRAPH 8.04, (vi)  releases the Amended and Restated Guaranty, (vii)
        amends the definition of Required Lenders, or (viii) release any
        substantial and material part of the Collateral (except for any release
        permitted by Subparagraph 2.12(e)), must be in writing and signed or
        approved in writing by all Lenders;

                (b)  Any amendment, waiver or consent which increases or
        decreases the Proportionate Share of any Lender must be in writing and
        signed by such Lender; and

                                       64

<PAGE>

                (c)  Any amendment, waiver or consent which affects the rights
        or obligations of Agent must be in writing and signed by Agent.

No failure or delay by Agent or any Lender in exercising any right under this
Agreement or any other Credit Document shall operate as a waiver thereof or of
any other right hereunder or thereunder nor shall any single or partial exercise
of any such right preclude any other further exercise thereof or of any other
right hereunder or thereunder.  Unless otherwise specified in such waiver or
consent, a waiver or consent given hereunder shall be effective only in the
specific instance and for the specific purpose for which given.

     8.05.      SUCCESSORS AND ASSIGNS.

                (a)  BINDING EFFECT.  This Agreement and the other Credit
        Documents shall be binding upon and inure to the benefit of Borrower,
        the Lenders, Agent, all future holders of the Amended and Restated Notes
        and their respective successors and permitted assigns, except that
        Borrower may not assign or transfer any of its rights or obligations
        under any Credit Document without the prior written consent of Agent and
        each Lender.  All references in this Agreement to any Person shall be
        deemed to include all successors and assigns of such Person.

                (b)  PARTICIPATIONS.  Any Lender may at any time sell to one or
        more banks or other financial institutions ("PARTICIPANTS")
        participating interests in any Loan owing to such Lender, any Amended
        and Restated Note held by such Lender, any Commitment of such Lender or
        any other interest of such Lender under this Agreement and the other
        Credit Documents.  In the event of any such sale by a Lender of
        participating interests, such Lender's obligations under this Agreement
        shall remain unchanged, such Lender shall remain solely responsible for
        the performance thereof, such Lender shall remain the holder of its
        Amended and Restated Notes for all purposes under this Agreement and
        Borrower and Agent shall continue to deal solely and directly with such
        Lender in connection with such Lender's rights and obligations under
        this Agreement.  Any agreement pursuant to which any such sale is
        effected may require the selling Lender to obtain the consent of the
        Participant in order for such Lender to agree in writing to any
        amendment, waiver or consent of a type specified in CLAUSE (i), (ii),
        (iii) OR (iv) OF SUBPARAGRAPH 8.04(a) but may not otherwise require the
        selling Lender to obtain the consent of such Participant to any other
        amendment, waiver or consent hereunder.  Borrower also agrees that any
        Lender which has transferred any participating interest in its
        Commitment or Loans shall, notwithstanding any such transfer, be
        entitled to the full benefits accorded such Lender under PARAGRAPH 2.09,
        PARAGRAPH 2.10, and PARAGRAPH 2.11, as if such Lender had not made such
        transfer.

                (c)  ASSIGNMENTS.  Any Lender may, at any time, sell and assign
        to any Lender or any Eligible Assignee (individually, an "ASSIGNEE
        LENDER") all or a portion of its rights and obligations under this
        Agreement and the other Credit Documents (such a sale and assignment to
        be referred to herein as an "ASSIGNMENT") pursuant to an assignment
        agreement in the form of EXHIBIT G (an "ASSIGNMENT AGREEMENT"), executed
        by each

                                       65

<PAGE>

        Assignee Lender and such assignor Lender (an "ASSIGNOR LENDER")
        and delivered to Agent for its acceptance and recording in the Register;
        PROVIDED, HOWEVER, that:

                        (i)     Without the written consent of Agent and, if no
                Default or Event of Default has occurred and is continuing,
                Borrower (which consent of Agent and Borrower shall not be
                unreasonably withheld), no Lender may make any Assignment to any
                Assignee Lender which is not, immediately prior to such
                Assignment, a Lender hereunder or an Affiliate thereof; or

                        (ii)    Without the written consent of Agent and, if no
                Default or Event of Default has occurred and is continuing,
                Borrower (which consent of Agent and Borrower shall not be
                unreasonably withheld), no Lender may make any Assignment to any
                Assignee Lender if, after giving effect to such Assignment, the
                Commitment of such Lender or such Assignee Lender would be less
                than Five Million Dollars ($5,000,000) (except that a Lender may
                make an Assignment which reduces its Commitment to zero without
                the written consent of Borrower and Agent); or

                        (iii)   Without the written consent of Agent and, if no
                Default or Event of Default has occurred and is continuing,
                Borrower (which consent of Agent and Borrower shall not be
                unreasonably withheld), no Lender may make any Assignment which
                does not assign and delegate an equal pro rata interest in such
                Lender's Loans, Commitment and all other rights, duties and
                obligations of such Lender under this Agreement and the other
                Credit Documents.

        Upon such execution, delivery, acceptance and recording of each
        Assignment Agreement, from and after the Assignment Effective Date
        determined pursuant to such Assignment Agreement, (A) each  Assignee
        Lender thereunder shall be a Lender hereunder with a Proportionate Share
        as set forth on ATTACHMENT 1 TO SUCH ASSIGNMENT AGREEMENT (under the
        caption "Proportionate Share After Assignment") and shall have the
        rights, duties and obligations of such a Lender under this Agreement and
        the other Credit Documents, and (B) the Assignor Lender thereunder shall
        be a Lender with a Proportionate Share as set forth on ATTACHMENT 1 TO
        SUCH ASSIGNMENT AGREEMENT (under the caption "Proportionate Share After
        Assignment"), or, if the Proportionate Share of the Assignor Lender has
        been reduced to 0%, the Assignor Lender shall cease to be a Lender and
        to have any obligation to make any Loan; PROVIDED, HOWEVER, that any
        such Assignor Lender which ceases to be a Lender shall continue to be
        entitled to the benefits of any provision of this Agreement which by its
        terms survives the termination of this Agreement.  Each Assignment
        Agreement shall be deemed to amend SCHEDULE I to the extent, and only to
        the extent, necessary to reflect the addition of each Assignee Lender,
        the deletion of each Assignor Lender which reduces its Proportionate
        Share to 0% and the resulting adjustment of Proportionate Shares arising
        from the purchase by each Assignee Lender of all or a portion of the
        rights and obligations of an Assignor Lender under this Agreement and
        the other Credit Documents.  On or prior to the Assignment Effective
        Date determined pursuant to each Assignment Agreement, Borrower, at its
        own expense, shall execute and

                                       66

<PAGE>

        deliver to Agent, in exchange for the surrendered Amended and
        Restated Note of the Assignor Lender thereunder, a new Amended and
        Restated Note to the order of each Assignee Lender thereunder (with
        each new Amended and Restated Note to be in an amount equal to the
        Commitment assumed by such Assignee Lender) and, if the Assignor
        Lender is continuing as a Lender hereunder, a new Amended and
        Restated Note to the order of the Assignor Lender (with the new
        Amended and Restated Note to be in an amount equal to the Commitment
        retained by it).  Each such new Amended and Restated Note shall be
        dated the Closing Date and each shall otherwise be in the form of the
        Amended and Restated Note replaced thereby.  The Amended and Restated
        Notes surrendered by the Assignor Lender shall be returned by Agent
        to Borrower marked "replaced".  Each Assignee Lender which was not
        previously a Lender hereunder and which is not incorporated under the
        laws of the United States of America or a state thereof shall, within
        three (3) Business Days of becoming a Lender, deliver to Borrower and
        Agent two duly completed copies of United States Internal Revenue
        Service Form 1001 or 4224 (or successor applicable form), as the case
        may be, certifying in each case that such Lender is entitled to
        receive payments under this Agreement without deduction or
        withholding of any United States federal income taxes.

                (d)  REGISTER.  Agent shall maintain at its address referred to
        in PARAGRAPH 8.01 a copy of each Assignment Agreement delivered to it
        and a register (the "REGISTER") for the recordation of the names and
        addresses of the Lenders and the Proportionate Shares of each Lender
        from time to time.  The entries in the Register shall be conclusive in
        the absence of manifest error, and Borrower, Agent and the Lenders may
        treat each Person whose name is recorded in the Register as the owner of
        the Loans recorded therein for all purposes of this Agreement.  The
        Register shall be available for inspection by Borrower or any Lender at
        any reasonable time and from time to time upon reasonable prior notice.

                (e)  REGISTRATION.  Upon its receipt of an Assignment Agreement
        executed by an Assignor Lender and an Assignee Lender (and, to the
        extent required by SUBPARAGRAPH 8.05(c), by Borrower and Agent) together
        with payment to Agent by Assignor Lender of a registration and
        processing fee of $4000, Agent shall (i) promptly accept such Assignment
        Agreement and (ii) on the Effective Date determined pursuant thereto
        record the information contained therein in the Register and give notice
        of such acceptance and recordation to the Lenders and Borrower.  Agent
        may, from time to time at its election, prepare and deliver to the
        Lenders and Borrower a revised SCHEDULE I reflecting the names,
        addresses and respective Proportionate Shares of all Lenders then
        parties hereto.

                (f)  CONFIDENTIALITY.  Agent and the Lenders may disclose the
        Credit Documents and any financial or other information relating to
        Borrower or any Subsidiary to each other or, with the consent of
        Borrower, to any potential Participant or Assignee Lender.
        8.06.   SETOFF; SECURITY INTEREST.

                (a)  SETOFF.  In addition to any rights and remedies of the
        Lenders provided by law, each Lender shall have the right, with the
        prior consent of Agent but without prior notice
                                       67

<PAGE>

        to or consent of Borrower, any such notice and consent being
        expressly waived by Borrower to the extent permitted by applicable
        law, upon the occurrence and during the continuance of an Event of
        Default, to set-off and apply against the Obligations any amount
        owing from such Lender to Borrower. The aforesaid right of set-off
        may be exercised by such Lender against Borrower or against any
        trustee in bankruptcy, debtor in possession, assignee for the benefit
        of creditors, receiver or execution, judgment or attachment creditor
        of Borrower or against anyone else claiming through or against
        Borrower or such trustee in bankruptcy, debtor in possession,
        assignee for the benefit of creditors, receiver, or execution,
        judgment or attachment creditor, notwithstanding the fact that such
        right of set-off may not have been exercised by such Lender at any
        prior time.  Each Lender agrees promptly to notify Borrower after any
        such set-off and application made by such Lender, PROVIDED that the
        failure to give such notice shall not affect the validity of such
        set-off and application.

                (b)  SECURITY INTEREST.  As security for the Secured
        Obligations, Borrower hereby grants to Agent and each Lender, for the
        benefit of all Lenders, a continuing security interest in any and all
        deposit accounts or moneys of Borrower now or hereafter maintained with
        such Lender.  Each Lender shall have all of the rights of a secured
        party with respect to such security interest.

        8.07.   NO THIRD PARTY RIGHTS.  Nothing expressed in or to be implied
from this Agreement is intended to give, or shall be construed to give, any
Person, other than the parties hereto and their permitted successors and assigns
hereunder, any benefit or legal or equitable right, remedy or claim under or by
virtue of this Agreement or under or by virtue of any provision herein.

        8.08.   PARTIAL INVALIDITY.  If at any time any provision of this
Agreement is or becomes illegal, invalid or unenforceable in any respect under
the law or any jurisdiction, neither the legality, validity or enforceability of
the remaining provisions of this Agreement nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction shall
in any way be affected or impaired thereby.

        8.09.   JURY TRIAL.  EACH OF BORROWER, THE LENDERS AND AGENT, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY AS TO ANY ISSUE RELATING HERETO IN ANY ACTION, PROCEEDING, OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO ANY CREDIT DOCUMENT.

        8.10.   COUNTERPARTS.  This Agreement may be executed in any number of
identical counterparts, any set of which signed by all the parties hereto shall
be deemed to constitute a complete, executed original for all purposes.

        8.11.   CONFIDENTIALITY.  None of the Banks and Agent shall disclose to
any Person any information with respect to Borrower or any of its Subsidiaries
which is furnished pursuant to this Agreement or under the other Credit
Documents, except that any Bank or Agent may disclose any such information (a)
to its own directors, officers, employees, auditors, counsel and

                                       68

<PAGE>

other professional advisors and to its Affiliates if such Bank or Agent or
such Bank's or such Agent's holding or parent company in its sole discretion
determines that any such party should have access to such information; (b) to
another Bank or Agent; (c) if generally available to the public through no
fault of Agent or the Banks; (d) if required or appropriate in any report,
statement or testimony submitted to any Governmental Authority having or
claiming to have jurisdiction over such Bank or Agent; (e) if required or
appropriate in response to any summons or subpoena or in connection with any
litigation, to the extent permitted or deemed advisable by counsel; (f) to
comply with any Requirement of Law applicable to such Bank or Agent; (g) to
any Participant or Assignee Bank or any prospective Participant or Assignee
Bank, provided that such Participant or Assignee or prospective Participant
or assignee agrees in writing to be bound by this PARAGRAPH 8.11 prior to
disclosure; or (h) otherwise with the prior consent of Borrower; PROVIDED,
HOWEVER, that any disclosure made in violation of this agreement shall not
affect the obligations of Borrower and its Subsidiaries under this Agreement
and the other Credit Documents.

     8.12.      EFFECT; TERMINATION OF EXISTING CREDIT AGREEMENT.  Borrower,
Agent and the Lenders agree that, on and after the Closing Date, (a) this
Agreement, the Amended and Restated Notes and the Amended and Restated Guaranty
shall amend, restate in their entirety and replace, without novation, the
Existing Credit Agreement, the promissory notes issued by Borrower in connection
with the Existing Credit Agreement (the "Existing Notes") and the Guaranty dated
as of july 31, 1996 issued by the Domestic Subsidiaries in favor of Agent for
the benefit of the Lenders in connection with the Existing Credit Agreement (the
"Existing Guaranty"), respectively, (b) all obligations of the Lenders to make
loans or otherwise extend credit to Borrower under the Existing Credit Agreement
shall be terminated and (c) the Prior Security Documents and all of the Liens
granted to Agent and the Lenders thereunder shall terminate; PROVIDED, HOWEVER,
that such termination shall not (i) operate as a waiver of any right, power or
remedy of Agent or the Lender hereunder or under the Amended and Restated Notes,
the Amended and Restated Guaranty or any related document, instrument or
agreement or (ii) extinguish or impair any obligations of Borrower under the
Existing Credit Agreement, the Existing Notes, the Existing Guaranty or any
related document, instrument or agreement except to the extent any such
obligation is actually satisfied by Borrower or is covered in this Agreement or
the other Credit Documents; PROVIDED, FURTHER, that all of the Loans outstanding
under the Existing Credit Agreement shall remain outstanding and shall be deemed
to have been made under this Agreement on a pro rata basis by the Lenders
hereunder in accordance with their respective Proportionate Shares.
                        [the first signature page follows.]

                                       69

<PAGE>

                IN WITNESS WHEREOF, Borrower, the Lenders and Agent have caused
this Agreement to be executed as of the day and year first above written.

BORROWER:                               ADAC LABORATORIES

                                        By: ________________________________
                                                Name: ______________________
                                                Title: _____________________

AGENT:                                  ABN AMRO BANK N.V., AS AGENT

                                        By: ________________________________
                                                Name: ______________________
                                                Title: _____________________

                                        By:
                                        By: ________________________________
                                                Name: ______________________
                                                Title: _____________________

LENDERS:                                ABN AMRO BANK N.V., AS A LENDER

                                        By: ________________________________
                                                Name: ______________________
                                                Title: _____________________

                                        By: ________________________________
                                                Name: ______________________
                                                Title: _____________________

                                        SANWA BANK CALIFORNIA, AS A LENDER

                                        By: ________________________________
                                                Name: ______________________
                                                Title: _____________________

                                      70

<PAGE>

                                        BANQUE NATIONALE DE PARIS, AS A LENDER

                                        By: ________________________________
                                                Name: ______________________
                                                Title: _____________________

                                        UNION BANK OF CALIFORNIA, N.A, AS A
                                        LENDER

                                        By: ________________________________
                                                Name: ______________________
                                                Title: _____________________

                                        WELLS FARGO BANK, N.A., AS A LENDER

                                        By: ________________________________
                                                Name: ______________________
                                                Title: _____________________

                                      71
<PAGE>

                                                         PROPOSED CONFIRMED COPY
                                                         THROUGH FIRST AMENDMENT

--------------------------------------------------------------------------------

                       AMENDED AND RESTATED CREDIT AGREEMENT

                                       AMONG

                                 ADAC LABORATORIES

                                        AND

                              THE LENDERS NAMED HEREIN

                                        AND

                                ABN AMRO BANK N.V.,
                              AS AGENT FOR THE LENDERS

                                   MARCH 29, 1999

--------------------------------------------------------------------------------
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                  PAGE
<S>            <C>                                                                <C>
SECTION I.          INTERPRETATION . . . . . . . . . . . . . . . . . . . . . . . . .1

     1.01.     Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

     1.02.     GAAP  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

     1.03.     Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

     1.04.     Plural Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

     1.05.     Time. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

     1.06.     Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

     1.07.     Construction  . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

     1.08.     Entire Agreement  . . . . . . . . . . . . . . . . . . . . . . . . . 19

     1.09.     Calculation of Interest and Fees. . . . . . . . . . . . . . . . . . 19

     1.10.     Other Interpretive Provisions . . . . . . . . . . . . . . . . . . . 19

SECTION II.    CREDIT FACILITY . . . . . . . . . . . . . . . . . . . . . . . . . . 20

     2.01.     Revolving Loan Facility . . . . . . . . . . . . . . . . . . . . . . 20

     2.02.     Commitment Reductions, Etc. . . . . . . . . . . . . . . . . . . . . 23

     2.03.     Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

     2.04.     Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

     2.05.     Other Payment Terms . . . . . . . . . . . . . . . . . . . . . . . . 25

     2.06.     Notes and Interest Account. . . . . . . . . . . . . . . . . . . . . 26

     2.07.     Loan Funding. . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

     2.08.     Pro Rata Treatment. . . . . . . . . . . . . . . . . . . . . . . . . 28

     2.09.     Change of Circumstances . . . . . . . . . . . . . . . . . . . . . . 29

     2.10.     Taxes on Payments . . . . . . . . . . . . . . . . . . . . . . . . . 31

     2.11.     Funding Loss Indemnification. . . . . . . . . . . . . . . . . . . . 32

     2.12.      Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

     2.13.     Replacement of Lenders. . . . . . . . . . . . . . . . . . . . . . . 35

SECTION III.   CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . . . . . . 35

     3.01.     Initial Conditions Precedent. . . . . . . . . . . . . . . . . . . . 35

     3.02.     Conditions Precedent to Each Credit Event . . . . . . . . . . . . . 35

     3.03.     Covenant to Deliver . . . . . . . . . . . . . . . . . . . . . . . . 36

                                      -i-
<PAGE>

                               TABLE OF CONTENTS

                                  (CONTINUED)

                                                                                  PAGE
<S>            <C>                                                                <C>
SECTION IV.    REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . . 36

     4.01.     Borrower's Representations and Warranties . . . . . . . . . . . . . 36

     4.02.     Reaffirmation . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

SECTION V.     COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

     5.01.     Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . 41

     5.02.     Negative Covenants. . . . . . . . . . . . . . . . . . . . . . . . . 44

     5.03.     Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . 51

SECTION VI.    DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

     6.01.     Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . 54

     6.02.     Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

SECTION VII.   THE AGENT AND RELATIONS AMONG LENDERS . . . . . . . . . . . . . . . 56

     7.01.     Appointment, Powers and Immunities. . . . . . . . . . . . . . . . . 56

     7.02.     Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . . . . 56

     7.03.     Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

     7.04.     Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . 57

     7.05.     Non-Reliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

     7.06.     Resignation or Removal of Agent . . . . . . . . . . . . . . . . . . 58

     7.07.     Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

     7.08.     Agent in its Individual Capacity. . . . . . . . . . . . . . . . . . 58

SECTION VIII.  MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

     8.01.     Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

     8.02.     Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

     8.03.     Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . 60

     8.04.     Waivers; Amendments . . . . . . . . . . . . . . . . . . . . . . . . 60

     8.05.     Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . 61

     8.06.     Setoff; Security Interest . . . . . . . . . . . . . . . . . . . . . 64

     8.07.     No Third Party Rights . . . . . . . . . . . . . . . . . . . . . . . 64

     8.08.     Partial Invalidity. . . . . . . . . . . . . . . . . . . . . . . . . 64

                                      -ii-
<PAGE>

                               TABLE OF CONTENTS

                                  (CONTINUED)
<CAPTION>
                                                                                  PAGE
<S>            <C>                                                                <C>
     8.09.     Jury Trial. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

     8.10.     Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

     8.11.     Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . 65

     8.12.     Effect; Termination of Existing Credit Agreement. . . . . . . . . . 65
</TABLE>

SCHEDULES

     I         Lenders
     1.01      Pricing Grid
     3.01      Initial Conditions Precedent
     4.01(q)   Subsidiaries

EXHIBITS
     A    Notice of Borrowing (2.01(b))
     B    Notice of Conversion (2.01(d))
     C    Notice of Interest Period Selection (2.01(e))
     D    Maturity Date Extension Request (2.01(h))
     E    Amended and Restated Note (2.06(a))
     F    Amended and Restated Guaranty (2.12(a))
     G    Assignment Agreement (8.05(c))
     H-1  Borrower Security Agreement (2.12(b))
     H-2  Domestic Subsidiary Security Agreement (2.12(b))
     I-1  Borrower IP Security Agreement (2.12(b))
     I-2  Domestic Subsidiary IP Security Agreement (2.12(b))
     J    Pledge Agreement (2.12(b))
     K    Collateral Certificate (1.01(a))
     L    Insurance Endorsements (5.01(d))

                                     -iii-
<PAGE>

An extra section break has been inserted above this paragraph. Do not delete
this section break if you plan to add text after the Table of
Contents/Authorities. Deleting this break will cause Table of
Contents/Authorities headers and footers to appear on any pages following the
Table of Contents/Authorities.

<PAGE>

This redlined draft, generated by CompareRite -TM- - The Instant Redliner, shows
the differences between - original document : 38434.10 and revised document:
382444.3CompareRite found 162 change(s) in the textDeletions appear as
Overstrike text Additions appear as Bold+Dbl Underline text

<PAGE>

                                   SCHEDULE I

                                     LENDERS

Lender                                       Proportionate
------                                           Share*
                                                 ------
ABN AMRO BANK N.V.                           33.33333333%

          Applicable Lending Office:

          ABN AMRO Bank N.V.
          San Francisco  Representative Office
          101 California Street, Suite 4550
          San Francisco, CA  94111-5812
          Address for Notices:

          Credit Administration:

          ABN AMRO Bank N.V.
          208 S. LaSalle Street, Suite 1500
          Chicago, IL  60604-1003
          Attn:  Joseph Coriaci
                    Credit Administration
          Telephone:  (312) 992-5118
          Fax No.:  (312) 992-5111

          With a copy to:

          ABN AMRO Bank N.V.
          101 California Street, Suite 4550
          San Francisco, CA 94111-5812
          Attn:  Dianne Barkley
                    Vice President
          Telephone:  (415) 984-3706
          Fax No:  (415) 362-3524

                                      I-1
<PAGE>

          Notices of Borrowing, Etc.:

          ABN AMRO Bank N.V.
          Capital Markets Syndication Group
          1235 Avenue of the Americas, 9th Floor
          New York, NY 10019
          Attn:  Linda Boardman
          Telephone:  (212) 314-1724
          Fax No:  (212) 314-1709

          Wiring Instructions:

          ABN AMRO Bank N.V.
          ABA #:  026009580
          F/O ABN AMRO Bank N.V.
          Chicago Branch CPU
          Account #:  650-001-1789-41
          Reference:  Adac Laboratories

     * To be expressed as a percentage rounded to the eighth digit to the right
       of the decimal point.

                                      I-2
<PAGE>

Lender                                       Proportionate
------                                           Share*
                                                 ------
SANWA BANK CALIFORNIA                        24.00000000%

          Applicable Lending Office:
          San Jose CBC
          220 Almaden Boulevard
          San Jose, CA  95113-2003

          Address for notices:

          220 Almaden Boulevard
          San Jose, CA  95113-2003
          Attn:  Clifford M. Wallace
          Telephone No:  (408) 297-6500
          Telecopier No:  (408) 292-4092

          Wiring Instructions:

          Sanwa Bank California
          220 Almaden Boulevard
          San Jose, CA  95113
          ABA No. 122003516
          Account No:  1129-92463
          Reference:  Commercial Loan No. 00-0491250-5
          For Further Credit To: ADAC Laboratories

     * To be expressed as a percentage rounded to the eighth digit to the right
       of the decimal point.

                                      I-3
<PAGE>

Lender                                       Proportionate
------                                           Share*
                                                 ------
BANQUE NATIONALE DE PARIS                    14.66666666%

          Applicable Lending Office:
          Banque National de Paris,
          San Francisco Branch
          180 Montgomery Street, 3rd Floor
          San Francisco, CA  94104

          Address for Notice:

          180 Montgomery Street, 3rd Floor
          San Francisco, CA  94104
          Attention:  Debra Wright, Vice President
          Telephone:  (415) 956-0707
          Telecopier:  (415) 296-8954
          Telex:  RCA 278900 (Answerback: BNPs UR)

          Wiring Instructions

          Federal Reserve Bank of San Francisco
          San Francisco, California
          ABA Number:  121027234
          Account Name:  Banque Nationale de Paris, San Francisco Branch
          Reference:  ADAC Laboratories

     * To be expressed as a percentage rounded to the eighth digit to the right
       of the decimal point.

                                      I-4
<PAGE>

Lender                                       Proportionate
------                                           Share*
                                                 ------
UNION BANK OF CALIFORNIA, N.A.                14.66666666%

          Applicable Lending Office:

          Union Bank of California, N.A.
          350 California Street
          San Francisco, CA  94104

          Address for Notice:                          cc: Notification
                                                       ----------------
          Union Bank of California, N.A.               Allan Miner
          Northern California Commercial               99 Almaden Blvd.
          Banking Division                             Suite 200
          350 California Street, 10th Floor            San Jose, CA 95113
          San Francisco, CA  94104                     Tel.: 408/279-7742
          Attention:  Jim Goudy                        Fax: 408/280-7163
          Telephone:  (415) 705-7165
          Telecopier:  (415) 705-7111

          Wiring Instructions:

          Union Bank of California, N.A.
          1980 Saturn Street
          Monterey Park, CA  91755

          ABA Number:  122-000-496
          Account Number:  070-196431
          Account Name:  Wire Transfer Clearing
          Attention:  Commercial Loan Operations
          Reference:  ADAC Laboratories
          (include any additional information needed to process transaction)

     * To be expressed as a percentage rounded to the eighth digit to the right
       of the decimal point.

                                      I-5
<PAGE>

Lender                                       Proportionate
------                                           Share*
                                                 ------
WELLS FARGO BANK, N.A.                       13.33333333%

          Applicable Lending Office:

          Wells Fargo Bank, N.A.
          121 Park Center Plaza, Third Floor
          San Jose, CA  95113

          Address for Notice:

          Wells Fargo Bank, N.A.
          Commercial Bank Loan Center
          201 Third Street, 8th Floor
          San Francisco, CA  94103
          Attention:  Oscar Enriquez
          Telephone:  (415) 477-5425
          Telecopier:  (415) 979-0675

          Wiring Instructions:

          Wells Fargo Bank, N.A.
          San Francisco, CA
          ABA Number:  121-000-248
          BNF:  Member SYN/AC-2712-507201
          Reference:  ADAC LABORATORIES

     * To be expressed as a percentage rounded to the eighth digit to the right
       of the decimal point.

                                      I-6
<PAGE>

                                  SCHEDULE 1.01(a)

                                    PRICING GRID

                                  APPLICABLE MARGINS

<TABLE>
<CAPTION>
             DEBT/      QUARTER   BASE     LIBOR      COMMITMENT
             EBITDA     LEVEL(2)  RATE     LOANS      FEE
             RATIO(1)             LOANS               PERCENTAGE
             --------  ---------  -----    -----      ----------
<S>                     <C>       <C>      <C>        <C>
    LESS THAN OR
    EQUAL TO 0.50          1       0%      1.000%       0.250%

 GREATER THAN 0.50         2       0%      1.500%       0.375%
    LESS THAN 1.00

 GREATER THAN 1.00,        3       0%      2.000%       0.500%
    LESS THAN 1.50

 GREATER THAN 1.50,        4       0%      2.250%       0.625%
    LESS THAN OR
    EQUAL TO 2.00

 GREATER THAN 2.00         5       0%      2.500%       0.750%
</TABLE>
--------------------

(1)   For a consecutive four-quarter period.

(2)   For the second quarter after the last quarter in the consecutive
four-quarter period.

                                   1.01(a)-1
<PAGE>

                                     EXPLANATION

1.   The Applicable Margin for each Loan and the Commitment Fee Percentage will
     be set for each quarter and will vary depending upon whether such quarter
     is a Level 1 Quarter, a Level 2 Quarter, a Level 3 Quarter, a Level 4
     Quarter, OR a Level 5 Quarter.

2.   The Closing Date through the quarter ending on or about June 30, 1999 will
     be a Level 2 Quarter.

3.   Each quarter thereafter will be a Level 1 Quarter, a Level 2 Quarter, a
     Level 3 Quarter, a Level 4 Quarter, OR a Level 5  Quarter depending upon
     Borrower's Debt/EBITDA Ratio for the consecutive four-quarter period which
     ended with the second quarter prior to such quarter.

4.   Examples:

     (a)  For the consecutive four-quarter period ending on or about  September
          30, 1999, Borrower's Debt/EBITDA Ratio was 1.30.  The quarter ending
          on or about  March 31, 2000 will be a Level  3 Quarter.

     (b)  For the consecutive four-quarter period ending on or about June 30,
          2000, Borrower's Debt/EBITDA Ratio was  1.60.  The quarter ending on
          or about December 31,  2000 will be a Level  4 Quarter.

                                   1.01(a)-2
<PAGE>

                                   SCHEDULE 3.01

                            INITIAL CONDITIONS PRECEDENT

A.   PRINCIPAL CREDIT DOCUMENTS.

     (1)  The Amended and Restated Credit Agreement, duly executed by Borrower,
each Lender and each Agent; and

     (2)  An Amended and Restated Note payable to each Lender, each duly
executed by Borrower; and

     (3)  The Amended and Restated Guaranty, duly executed by each Domestic
Subsidiary of Borrower.

B.   BORROWER CORPORATE DOCUMENTS.

     (1)  The Certificate or Articles of Incorporation of Borrower, certified as
of a recent date prior to the Closing Date by the Secretary of State (or
comparable official) of its jurisdiction of incorporation;

     (2)  A Certificate of Good Standing (or comparable certificate) for
Borrower, certified as of a recent date prior to the Closing Date by the
Secretary of State (or comparable official) of its jurisdiction of
incorporation;

     (3)  A certificate of the Secretary or an Assistant Secretary of Borrower,
dated the Closing Date, certifying (a) that attached thereto is a true and
correct copy of the Bylaws of Borrower as in effect on the Closing Date; (b)
that attached thereto are true and correct copies of resolutions duly adopted by
the Board of Directors of Borrower and continuing in effect, which authorize the
execution, delivery and performance by Borrower of this Agreement and the other
Credit Documents executed or to be executed by Borrower and the consummation of
the transactions contemplated hereby and thereby; and (c) that there are no
proceedings for the dissolution or liquidation of Borrower;

     (4)  A certificate of the Secretary or an Assistant Secretary of Borrower,
dated the Closing Date, certifying the incumbency, signatures and authority of
the officers of Borrower authorized to execute, deliver and perform this
Agreement, the other Credit Documents and all other documents, instruments or
agreements related thereto executed or to be executed by Borrower; and

     (5)  Certificates of Good Standing (or comparable certificates) for
Borrower, certified as of a recent date prior to the Closing Date by the
Secretaries of State (or comparable official) of each state in which Borrower is
qualified to do business.

                                     3.01-1
<PAGE>

C.   SUBSIDIARY CORPORATE DOCUMENTS.

     (1)  The Certificate of Incorporation (or comparable certificate) of each
Domestic Subsidiary of Borrower, certified as of a recent date prior to the
Closing Date by the Secretary of State (or comparable public official) of its
state of incorporation;

     (2)  A Certificate of Good Standing (or comparable certificate) for each
Domestic Subsidiary of Borrower, certified as of a recent date prior to the
Closing Date by the Secretary of State (or comparable public official) of its
state of incorporation;

     (3)  A certificate of the Secretary or an Assistant Secretary of each
Domestic Subsidiary of Borrower, dated the Closing Date, certifying (a) that
attached thereto is a true and correct copy of the Bylaws of such Subsidiary as
in effect on the Closing Date; (b) that attached thereto are true and correct
copies of resolutions duly adopted by the Board of Directors of such Subsidiary
and continuing in effect, which authorize the execution, delivery and
performance by such Subsidiary of the Credit Documents executed or to be
executed by such Subsidiary and the consummation of the transactions
contemplated hereby and thereby; and (c) that there are no proceedings for the
dissolution or liquidation of such Subsidiary; and

     (4)  A certificate of the Secretary or an Assistant Secretary of each
Domestic Subsidiary of Borrower, dated the Closing Date, certifying the
incumbency, signatures and authority of the officers of such Subsidiary
authorized to execute, deliver and perform the Credit Documents and all other
documents, instruments or agreements related thereto executed or to be executed
by such Subsidiary.

D.   FINANCIAL STATEMENTS, FINANCIAL CONDITION, ETC.

     (1)  A copy of the unaudited Financial Statements of Borrower and its
Subsidiaries for the fiscal quarter ended December 31, 1998 and for the fiscal
year to such date (prepared on a consolidated and consolidating basis),
certified by the Chief Financial Officer or Vice President-Finance of Borrower
to present fairly the financial condition, results of operations and other
information reflected therein and to have been prepared in accordance with GAAP
(subject to normal year-end audit adjustments);

     (2)  A copy of the audited consolidated Financial Statements of Borrower
for the fiscal year ended September 27, 1998, prepared by Coopers & Lybrand and
a copy of the unqualified opinion delivered by such accountants in connection
with such Financial Statements;

     (3)  A copy of the 10-Q report filed by Borrower with the Securities and
Exchange Commission for the quarter ended December 31, 1998;

     (4)  A copy of the 10-K report filed by Borrower with the Securities and
Exchange Commission for the fiscal year ended September 27, 1998;

                                     3.01-2
<PAGE>

     (5)  The consolidated plan and forecast of Borrower and its Subsidiaries
for the fiscal year ending in 1999, including quarterly cash flow projections
through the fiscal year ending in 1999 and annual cash flow projections through
the fiscal years ending 2000 and 2001; and

     (6)  Such other financial, business and other information regarding
Borrower, or any of its Subsidiaries as Agent or any Lender may reasonably
request, including information as to possible contingent liabilities, tax
matters, environmental matters and obligations for employee benefits and
compensation.

E.   OPINION.

     A favorable written opinion of Wilson Sonsini Goodrich & Rosati, counsel
for Borrower and its Subsidiaries, dated the Closing Date and addressed to Agent
for the benefit of Agent and the Lenders, covering such legal matters as Agent
may reasonably request and otherwise in form and substance satisfactory to
Agent.

G.   OTHER ITEMS.

     (1)  A duly completed and timely delivered Notice of Borrowing;

     (2)  Certificates of insurance evidencing the insurance Borrower is
required to maintain pursuant to SUBPARAGRAPH 5.01(d);

     (3)  An organization chart for Borrower and its Subsidiaries, setting forth
the relationship among such Persons, certified by the Chief Financial Officer or
Vice President-Finance of Borrower;

     (4)  A certificate of the Chief Financial Officer or Vice President-Finance
of Borrower, addressed to Agent and dated the Closing Date, certifying that:

     (a)  The representations and warranties set forth in PARAGRAPH 4.01 and in
the other Credit Documents are true and correct in all material respects as of
such date (except for such representations and warranties made as of a specified
date, which shall be true as of such date);

     (b)  No Event of Default or Default has occurred and is continuing as of
such date;

     (c)  All of the Credit Documents are in full force and effect;

     (5)  All fees and expenses payable to Agent and the Lenders on or prior to
the Closing Date (including all fees payable to Agent pursuant to the Agent's
Fee Letter);

     (6)  All fees and expenses of Agent's counsels through the Closing Date;
and

                                     3.01-3
<PAGE>

     (7)  Such other evidence as Agent or any Lender may reasonably request to
establish the accuracy and completeness of the representations and warranties
and the compliance with the terms and conditions contained in this Agreement and
the other Credit Documents.

                                     3.01-4
<PAGE>

                                  SCHEDULE 4.01(q)

                                    SUBSIDIARIES

1.   SHARES OWNED DIRECTLY BY BORROWER:
<TABLE>
<CAPTION>
     Subsidiary          Jurisdiction     Shares Owned
     ----------          ------------     by Borrower(1)
                                          -------------

<S>                      <C>              <C>
     ADAC Research &     California       100%
     Manufacturing,
     Inc.

     ADAC Healthcare     Texas            100%
     Information
     Systems, Inc.

     ADAC Medical        Delaware         100%
     Technologies, Inc.
     (formerly known
     as J.D. Technical
     Services, Inc.)

     ADAC Laboratories   California       100%
     Pacific, Inc.

     ADAC Healthcare     Delaware         100%
     Partners, Inc.

     Cortet, Inc.        Florida          100%

     O.N.E.S Medical     New Hampshire    100%
     Services, Inc.

     CT Solutions        California       100%

     ADAC Capital, LLC   Delaware         100%

     ADAC Laboratories   Canada           100%
     Canada Ltd.

     ADAC Laboratories   Netherlands      100%
     Europe, BV.

     ADAC Foreign        Virgin Islands   100%
     Sales Corporation

     ADAC do Brasil      Brazil           100%
</TABLE>
--------------------

                                   4.01(q)-1
<PAGE>

(1)   All shares common unless otherwise indicated.

                                   4.01(q)-2
<PAGE>

2.   SHARES OWNED DIRECTLY BY ADAC HEALTHCARE PARTNERS, INC. ("ADAC HCPI"):

<TABLE>
<CAPTION>
     Subsidiary       Jurisdiction   Shares Owned
     ----------       ------------   by ADAC HCPI
                                     ------------

<S>                   <C>            <C>
     ADAC Radiology   Delaware       100%
     Services, Inc.
                                     100%
</TABLE>

--------------------

3.   SHARES OWNED DIRECTLY BY ADAC LABORATORIES EUROPE B.V. ("ADAC BV"):

<TABLE>
<CAPTION>

     Subsidiary                   Jurisdiction   Shares Owned
     ----------                   ------------   by ADAC BV(2)
                                                 -------------
<S>                               <C>            <C>
     ADAC Laboratories, SARL      France         100%

     ADAC Laboratories, SRL       Italy          100%

     ADAC Laboratories, Ltd.      UK             100%

     ADAC Laboratories, A/S       Denmark        100%

     ADAC Laboratories, GmbH      Germany        100%
</TABLE>

--------------------

     (2)  An immaterial number of directors' qualifying shares or the equivalent
          may be outstanding for some Foreign Subsidiaries.

                                   4.01(q)-3
<PAGE>

                                    EXHIBIT A

                               NOTICE OF BORROWING

                                     [Date]

ABN AMRO Bank N.V.
  as Agent
Capital Markets Syndication Group
1235 Avenue of the Americas, 9th Floor
New York, NY 10019
Attn:  Linda Boardman

     1. Reference is made to that certain Amended and Restated Credit Agreement,
dated as of March 29, 1999 (the "CREDIT AGREEMENT"), among ADAC Laboratories
("BORROWER"), the financial institutions listed in SCHEDULE I to the Credit
Agreement (the "LENDERS") and ABN AMRO Bank N.V., as agent for the Lenders (in
such capacity, "AGENT"). Unless otherwise indicated, all terms defined in the
Credit Agreement have the same respective meanings when used herein.

     2. Pursuant to SUBPARAGRAPH 2.01(b) of the Credit Agreement, Borrower
hereby irrevocably requests a Borrowing upon the following terms:

     (a) The principal amount of the requested Borrowing is to be $____________;

     (b) The requested Borrowing is to consist of ["Base Rate" or "LIBOR"]
Loans;

     (c) If the requested Borrowing is to consist of LIBOR Loans, the initial
Interest Period for such Loans will be ______________ months; and

     (d) The date of the requested Borrowing is to be _______________, ______.

     3. Borrower hereby certifies to Agent and the Lenders that, on the date of
this Notice of Borrowing and after giving effect to the requested Borrowing:

     (a) The representations and warranties of Borrower set forth in PARAGRAPH
4.01 of the Credit Agreement and in the other Credit Documents are true and
correct in all material respects as if made on such date (except for
representations and warranties expressly made as of a specified date, which
shall be true as of such date);

     (b) No Default or Event of Default has occurred and is continuing; and

     (c) All of the Credit Documents are in full force and effect.

     4. Please disburse the proceeds of the requested Borrowing to

--------------------------------------------------------------------------------

                                      A-1
<PAGE>

--------------------------------------------------------------------------------

     IN WITNESS WHEREOF, Borrower has executed this Notice of Borrowing on the
date set forth above.

                                   ADAC LABORATORIES

                                   By:
                                      -----------------------------------
                                      Name:
                                           ------------------------------
                                      Title:
                                            -----------------------------

                                      A-2
<PAGE>

                                    EXHIBIT B

                              NOTICE OF CONVERSION

                                     [Date]

ABN AMRO Bank N.V.
  as Agent
Capital Markets Syndication Group
1235 Avenue of the Americas, 9th Floor
New York, NY 10019
Attn:  Linda Boardman

     1. Reference is made to that certain Amended and Restated Credit Agreement,
dated as of March 29, 1999 (the "CREDIT AGREEMENT"), among ADAC Laboratories
("BORROWER"), the financial institutions listed in SCHEDULE I to the Credit
Agreement (the "LENDERS") and ABN AMRO Bank N.V., as agent for the Lenders (in
such capacity, "AGENT"). Unless otherwise indicated, all terms defined in the
Credit Agreement have the same respective meanings when used herein.

     2. Pursuant to SUBPARAGRAPH 2.01(d) of the Credit Agreement, Borrower
hereby irrevocably requests to convert a Borrowing as follows:

     (a) The Borrowing to be converted consists of ["Base Rate" or "LIBOR"]
Loans in the aggregate principal amount of $__________ which were initially
advanced to Borrower on __________, ____;

     (b) The Loans in the Borrowing are to be converted into ["Base Rate" or
"LIBOR"] Loans;

     (c) If such Loans are to be converted into LIBOR Loans, the initial
Interest Period for such Loans commencing upon conversion will be __________
months; and

     (d) The date of the requested conversion is to be __________, ____.

     3. Borrower hereby certifies to Agent and the Lenders that, on the date of
this Notice of Conversion, and after giving effect to the requested conversion:

     (a) The representations and warranties of Borrower set forth in PARAGRAPH
4.01 of the Credit Agreement and in the other Credit Documents are true and
correct in all material respects as if made on such date (except for
representations and warranties expressly made as of a specified date, which
shall be true as of such date);

     (b) No Default or Event of Default has occurred and is continuing; and

     (c) All of the Credit Documents are in full force and effect.

                                      B-1
<PAGE>

     IN WITNESS WHEREOF, Borrower has executed this Notice of Conversion on the
date set forth above.

                                   ADAC LABORATORIES

                                   By:
                                      -----------------------------------
                                      Name:
                                           ------------------------------
                                      Title:
                                            -----------------------------

                                      B-2
<PAGE>

                                     EXHIBIT C

                        NOTICE OF INTEREST PERIOD SELECTION

                                       [Date]

ABN AMRO Bank N.V.
  as Agent
Capital Markets Syndication Group
1235 Avenue of the Americas, 9th Floor
New York, NY 10019
Attn:  Linda Boardman

     1. Reference is made to that certain Amended and Restated Credit Agreement,
dated as of March 29, 1999 (the "CREDIT AGREEMENT"), among ADAC Laboratories
("BORROWER"), the financial institutions listed in SCHEDULE I to the Credit
Agreement (the "LENDERS") and ABN AMRO Bank N.V., as agent for the Lenders (in
such capacity, "AGENT"). Unless otherwise indicated, all terms defined in the
Credit Agreement have the same respective meanings when used herein.

     2. Pursuant to SUBPARAGRAPH 2.01(e) of the Credit Agreement, Borrower
hereby irrevocably selects a new Interest Period for a Borrowing as follows:

     (a) The Borrowing for which a new Interest Period is to be selected
consists of LIBOR Loans in the aggregate principal amount of $__________ which
were initially advanced to Borrower on __________, ____;

     (b) The last day of the current Interest Period for such Loans is
___________, ____; and

     (c) The next Interest Period for such Loans commencing upon the last day of
the current Interest Period is to be _________ months.

     3. Borrower hereby certifies to the Agents and the Lenders that, on the
date of this Notice of Interest Period Selection, and after giving effect to the
requested selection:

     (a) The representations and warranties of Borrower set forth in PARAGRAPH
4.01 of the Credit Agreement and in the other Credit Documents are true and
correct in all material respects as if made on such date (except for
representations and warranties expressly made as of a specified date, which
shall be true as of such date);

     (b) No Default or Event of Default has occurred and is continuing; and

     (c) All of the Credit Documents are in full force and effect.

                                      C-1
<PAGE>

     IN WITNESS WHEREOF, Borrower has executed this Notice of Interest Period
Selection on the date set forth above.

                                   ADAC LABORATORIES

                                   By:
                                      -----------------------------------
                                      Name:
                                           ------------------------------
                                      Title:
                                            -----------------------------

                                      C-2
<PAGE>

                                    EXHIBIT D

                         MATURITY DATE EXTENSION REQUEST

                                     [Date]

ABN AMRO Bank N.V.
  as Agent
Capital Markets Syndication Group
1235 Avenue of the Americas, 9th Floor
New York, NY 10019
Attn:  Linda Boardman

     1. Reference is made to that certain Amended and Restated Credit Agreement,
dated as of March 29, 1999 (the "CREDIT AGREEMENT"), among ADAC Laboratories
("BORROWER"), the financial institutions listed in SCHEDULE I to the Credit
Agreement (the "LENDERS") and ABN AMRO Bank N.V., as agent for the Lenders (in
such capacity, "AGENT"). Unless otherwise indicated, all terms defined in the
Credit Agreement have the same respective meanings when used herein.

     2. Upon the execution of a copy of this letter by each Lender, the return
thereof to Agent and the written notification thereof by Agent to Borrower and
Lenders, the Maturity Date, as defined in PARAGRAPH 1.01 of the Credit
Agreement, shall be amended by changing the date "December 31, ____" to December
31, 20__."

     Except as specifically amended hereby, all terms, covenants and conditions
of the Credit Agreement shall remain in full force and effect.

                                   Very truly yours,

                                   ADAC LABORATORIES

                                   By:
                                      -----------------------------------
                                      Name:
                                           ------------------------------
                                      Title:
                                            -----------------------------

                                      D-1
<PAGE>

                                    EXHIBIT E

                            AMENDED AND RESTATED NOTE

$______________                        ____________________, __________

                                                  ________________, ____

     FOR VALUE RECEIVED, ADAC LABORATORIES, a California corporation
("BORROWER"), hereby promises to pay to the order of ____________________, a
____________________ ("LENDER"), the principal sum of
______________________________ DOLLARS ($__________) or such lesser amount as
shall equal the aggregate outstanding principal balance of the Loans made by
Lender to Borrower pursuant to the Amended and Restated Credit Agreement
referred to below (as amended from time to time, the "CREDIT AGREEMENT"), on or
before the Maturity Date specified in the Credit Agreement; and to pay interest
on said sum, or such lesser amount, at the rates and on the dates provided in
the Credit Agreement.

     Borrower shall make all payments hereunder, for the account of Lender's
Applicable Lending Office, to Agent as indicated in the Credit Agreement, in
lawful money of the United States and in same day or immediately available
funds.

     Borrower hereby authorizes Lender to record on the schedule(s) annexed to
this note the date and amount of each Loan and of each payment or prepayment of
principal made by Borrower and agrees that all such notations shall constitute
prima facie evidence of the matters noted; provided, however, that the failure
of Lender to make any such notation shall not affect Borrower's obligations
hereunder.

     This note is one of the Notes referred to in the Amended and Restated
Credit Agreement, dated as of March 29, 1999, among Borrower, Lender and the
other financial institutions from time to time parties thereto (collectively,
the "Lenders") and ABN AMRO Bank N.V., as agent for the Lenders. This note is
subject to the terms of the Credit Agreement, including the rights of prepayment
and the rights of acceleration of maturity set forth therein. Terms used herein
have the meanings assigned to those terms in the Credit Agreement, unless
otherwise defined herein.

     The transfer, sale or assignment of any rights under or interest in this
note is subject to certain restrictions contained in the Credit Agreement,
including PARAGRAPH 8.05 thereof.

     Borrower shall pay all reasonable fees and expenses, including reasonable
attorneys' fees, incurred by Lender in the enforcement or attempt to enforce any
of Borrower's obligations hereunder not performed when due. Borrower hereby
waives notice of presentment, demand, protest or notice of any other kind. This
note shall be governed by and construed in accordance with the laws of the State
of California.

                                       E-1
<PAGE>

                                   ADAC LABORATORIES

                                   By:
                                      -----------------------------------
                                      Name:
                                           ------------------------------
                                      Title:
                                            -----------------------------

                                      E-2
<PAGE>

                                LOANS AND PAYMENTS OF PRINCIPAL

<TABLE>
<CAPTION>
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     Date    Type of   Amount of   Interest    Amount of      Unpaid    Notation
              Loan       Loan       Period     Principal    Principal    Made By
                                                 Paid        Balance
                                              or Prepaid
--------------------------------------------------------------------------------
     <S>     <C>       <C>         <C>        <C>           <C>         <C>
--------------------------------------------------------------------------------

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</TABLE>

                                      E-3
<PAGE>

                                    EXHIBIT F

                          AMENDED AND RESTATED GUARANTY

     THIS AMENDED AND RESTATED GUARANTY (this "Guaranty"), dated as of March 29,
1999 is executed by each of the undersigned (each such entity and each entity
which hereafter executes and delivers a Subsidiary Joinder in substantially the
form of Attachment 1 hereto to be referred to herein as a "Guarantor"), in favor
of ABN AMRO BANK N.V., a Netherlands public company acting through its San
Francisco Representative Office, acting as agent (in such capacity, "Agent") for
the financial institutions which are from time to time parties to the Credit
Agreement referred to in Recital A below (collectively, the "Lenders").

                                    RECITALS

     A. Pursuant to a Credit Agreement dated as of July 31, 1996 (as amended to
the date hereof, the "Existing Credit Agreement"), among ADAC Laboratories, a
California corporation ("Borrower"), the Lenders and Agent, the Lenders have
agreed to extend certain credit facilities to Borrower upon the terms and
subject to the conditions set forth therein. The availability of the credit
facilities under such Existing Credit Agreement was subject, among other
conditions, to the execution and delivery of each Guarantor of a Guaranty dated
as of July 31, 1996 (the "Existing Guaranty").

     B. Borrower has requested Agent and the Lenders to amend the Existing
Credit Agreement in certain respects. Pursuant to an Amended and Restated Credit
Agreement dated the date hereof (the "Credit Agreement"), among Borrower, Agent
and the Lenders, Agent and the Lenders have agreed to amend and restate the
Existing Credit Agreement upon the terms and subject to the conditions set forth
therein including, without limitation, (i) receipt by Agent of this Guaranty,
duly executed by each existing Domestic Subsidiary of Borrower, which amends,
and for convenience of reference, restates the Existing Guaranty as so amended
in its entirety and (ii) the receipt by Agent of Subsidiary Joinders, duly
executed by each future Domestic Subsidiary of Borrower. Each of the undersigned
Guarantors is a Domestic Subsidiary of Borrower and expects to continue to
derive substantial direct and indirect benefit from the transactions
contemplated by the Credit Agreement.

                                    AGREEMENT

     NOW, THEREFORE, in consideration of the above recitals and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, each Guarantor hereby agrees with Agent, for the ratable benefit
of the Lenders and Agent, that the Existing Guaranty shall be amended and
restated to read in its entirety as follows:

                                      F-1
<PAGE>

     1.   DEFINITIONS AND INTERPRETATION.

          (a)  DEFINITIONS.  When used in this Guaranty, the following terms
     shall have the following respective meanings:

          "ADJUSTED MAXIMUM GUARANTY AMOUNT" shall mean, with respect to any
     Guarantor, the maximum liability of such Guarantor under this Guaranty,
     limited to the extent provided in Subparagraph 2(d) hereof (except that,
     for purposes of calculating the Adjusted Maximum Guaranty Amount of a
     Guarantor only, any assets or liabilities of such Guarantor arising under
     Paragraph 8 hereof shall be ignored).

          "AGENT" shall have the meaning given to that term in the introductory
     paragraph hereof.

          "AGGREGATE GUARANTY PAYMENTS" shall mean, with respect to any
     Guarantor at any time, the aggregate net amount of all payments made by
     such Guarantor under this Guaranty (including, without limitation, under
     Paragraph 8 hereof) at or prior to such time.

          "BORROWER" shall have the meaning given to that term in the Recital A
     hereof.

          "CREDIT AGREEMENT" shall have the meaning given to that term in the
     Recital B hereof.

          "DISALLOWED POST-COMMENCEMENT INTEREST AND EXPENSES" shall mean
     interest computed at the rate provided in the Credit Agreement and claims
     for reimbursement, costs, expenses or indemnities under the terms of any of
     the Credit Documents accruing or claimed at any time after the commencement
     of any Insolvency Proceeding, if the claim for such interest,
     reimbursement, costs, expenses or indemnities is not allowable, allowed or
     enforceable against Borrower in such Insolvency Proceeding.

          "EXISTING CREDIT AGREEMENT" shall have the meaning given to the term
     in Recital A hereof.

          "EXISTING GUARANTY" shall have the meaning given to the term in
     Recital A hereof.

          "FAIR SHARE" shall mean, with respect to any Guarantor at any time, an
     amount equal to (i) a fraction, the numerator of which is the Adjusted
     Maximum Guaranty Amount of such Guarantor and the denominator of which is
     the aggregate Adjusted Maximum Guaranty Amounts of all Guarantors,
     multiplied by (ii) the aggregate amount paid by all Funding Guarantors
     under this Guaranty at or prior to such time.

                                      F-2
<PAGE>

          "FAIR SHARE SHORTFALL" shall mean, with respect to any Guarantor at
     any time, the amount, if any, by which the Fair Share of such Guarantor at
     such time exceeds the Aggregate Guaranty Payments of such Guarantor at such
     time.

          "FUNDING GUARANTOR" shall have the meaning given to that term in
     Paragraph 8 hereof.

          "GUARANTEED OBLIGATIONS" shall mean all loans, advances, debts,
     liabilities and obligations, howsoever arising, owed by Borrower to Agent
     or any Lender of every kind and description (whether or not evidenced by
     any note or instrument and whether or not for the payment of money), direct
     or indirect, absolute or contingent, due or to become due, now existing or
     hereafter arising pursuant to the terms of the Credit Agreement or any of
     the other Credit Documents, including, without limitation, all principal,
     interest, rent, fees, taxes, charges, expenses, attorneys' fees and
     accountants' fees chargeable to Borrower or payable by Borrower thereunder.

          "GUARANTOR" shall have the meaning given to that term in the
     introductory paragraph hereof.

          "INSOLVENCY PROCEEDING" shall mean any case or proceeding under the
     United States Bankruptcy Code or any other similar law, rule or regulation
     of the United States or any jurisdiction or any other action or proceeding
     for the reorganization, liquidation, appointment of a receiver,
     rearrangement of debts, marshalling of assets or similar action relating to
     Borrower or any Guarantor, their respective creditors or any substantial
     part of their respective assets, whether or not any such case, proceeding
     or action is voluntary or involuntary.

          "LENDERS" shall have the meaning given to that term in the
     introductory paragraph hereof.

          "SUBORDINATED OBLIGATIONS" shall have the meaning given to that term
     in Paragraph 6 hereof.

          "SUBSIDIARY JOINDER" shall mean an agreement substantially in the form
     of Attachment 1 hereto.

Unless otherwise defined herein, all other capitalized terms used herein and
defined in the Credit Agreement shall have the respective meanings given to
those terms in the Credit Agreement.

          (b)  OTHER INTERPRETIVE PROVISIONS.  The rules of construction set
     forth in SECTION I OF THE CREDIT AGREEMENT shall, to the extent not
     inconsistent with the terms of this Guaranty, apply to this Guaranty and
     are hereby incorporated by reference.  Each Guarantor acknowledges receipt
     of copies of the Credit Agreement and the other Credit Documents.

                                      F-3
<PAGE>

     2.   GUARANTY.

          (a)  PAYMENT GUARANTY.  Each Guarantor unconditionally guarantees and
     promises to pay and perform as and when due, whether at stated maturity,
     upon acceleration or otherwise, any and all of the Guaranteed Obligations.
     If any Insolvency Proceeding relating to Borrower is commenced, each
     Guarantor further unconditionally guarantees and promises to pay and
     perform, upon the demand of Agent, any and all of the Guaranteed
     Obligations (including any and all Disallowed Post-Commencement Interest
     and Expenses) in accordance with the terms of the Credit Documents, whether
     or not such obligations are then due and payable by Borrower and whether or
     not such obligations are modified, reduced or discharged in such Insolvency
     Proceeding.  This Guaranty is a guaranty of payment and not of collection.

          (b)  CONTINUING GUARANTY.  This Guaranty is an irrevocable continuing
     guaranty of the Guaranteed Obligations which shall continue in effect until
     all obligations of the Lenders to extend credit to Borrower have terminated
     and all of the Guaranteed Obligations have been fully, finally and
     indefeasibly paid.  If any payment on any Guaranteed Obligation is set
     aside, avoided or rescinded or otherwise recovered from Agent or any
     Lender, such recovered payment shall constitute a Guaranteed Obligation
     hereunder and, if this Guaranty was previously released or terminated, it
     automatically shall be fully reinstated, as if such payment was never made.

          (c)  INDEPENDENT OBLIGATION.  The liability of each Guarantor
     hereunder is independent of the Guaranteed Obligations and of the
     obligations of each other Guarantor hereunder, and a separate action or
     actions may be brought and prosecuted against each Guarantor irrespective
     of whether action is brought against Borrower, any other Guarantor or any
     other guarantor of the Guaranteed Obligations or whether Borrower, any
     other Guarantor or any other guarantor of the Guaranteed Obligations is
     joined in any such action or actions.

          (d)  FRAUDULENT TRANSFER LIMITATION.  If, in any action to enforce
     this Guaranty, any court of competent jurisdiction determines that
     enforcement against any Guarantor for the full amount of the Guaranteed
     Obligations is not lawful under or would be subject to avoidance under
     Section 548 of the United States Bankruptcy Code or any applicable
     provision of any comparable law of any state or other jurisdiction, the
     liability of such Guarantor under this Guaranty shall be limited to the
     maximum amount lawful and not subject to such avoidance.

          (e)  TERMINATION.  Notwithstanding any termination of this Guaranty in
     accordance with PARAGRAPH 6 hereof, this Guaranty shall continue to be in
     full force and effect and applicable to any Guaranteed Obligations arising
     thereafter which arise because prior payments of Guaranteed Obligations are
     rescinded or otherwise required to be surrendered by Agent or any Lender
     after receipt.

                                      F-4
<PAGE>

     3.   REPRESENTATIONS AND WARRANTIES.  Each Guarantor hereby represents and
warrants to Agent and the Lenders as follows:

          (a)  DUE INCORPORATION, QUALIFICATION, ETC.  Such Guarantor is a  duly
     organized, validly existing and in good standing under the laws of its
     jurisdiction of organization and is duly qualified and in good standing in
     each jurisdiction where the nature of its business or properties requires
     such qualification, except where the failure to qualify could not have a
     Material Adverse Effect.

          (b)  AUTHORITY.  The execution, delivery and performance by such
     Guarantor of this Guaranty are within the power of such Guarantor and have
     been duly authorized by all necessary actions on the part of such
     Guarantor.

          (c)  ENFORCEABILITY.  This Guaranty has been duly executed and
     delivered by such Guarantor and constitutes a legal, valid and binding
     obligation of such Guarantor, enforceable against it in accordance with its
     terms, except as limited by bankruptcy, insolvency or other laws of general
     application relating to or affecting the enforcement of creditors' rights
     generally.

          (d)  NON-CONTRAVENTION.  The execution, delivery and performance by
     such Guarantor of this Guaranty do not (i) violate any Requirement of Law
     applicable to such Guarantor, (ii) contravene any material Contractual
     Obligation of such Guarantor or (iii) result in the creation or imposition
     of any Lien upon any property, asset or revenue of such Guarantor.

          (e)  APPROVALS.  No consent, approval, order or authorization of, or
     registration, declaration or filing with, any Governmental Authority or
     other Person (including, without limitation, the shareholders of any
     Person) is required in connection with the execution, delivery and
     performance of this Guaranty, except such consents, approvals, orders,
     authorizations, registrations, declarations and filings that are so
     required and which have been obtained and are in full force and effect.

          (f)  NO VIOLATION.  No Guarantor is in violation of any Requirement of
     Law applicable to such Guarantor or any Contractual Obligation of such
     Guarantor, where, in either case, such violation is reasonably likely to
     have a Material Adverse Effect.

          (g)  LITIGATION.  No actions (including, without limitation,
     derivative actions), suits, proceedings or investigations are pending or,
     to the knowledge of such Guarantor, threatened against such Guarantor in
     any court or before any other Governmental Authority which (i) is
     reasonably likely (alone or in the aggregate) to have a Material Adverse
     Effect or (ii) seeks to enjoin, either directly or indirectly, the
     execution, delivery or performance of this Guaranty by such Guarantor;

                                      F-5
<PAGE>

          (h)  FINANCIAL STATEMENTS.  The Financial Statements of such
     Guarantor, which have been delivered to Agent and the Lenders fairly
     present the information reflected therein and have been prepared in
     accordance with GAAP.

          (i)  OTHER REGULATIONS.  Such Guarantor is not subject to regulation
     under the Investment Company Act of 1940, the Public Utility Holding
     Company Act of 1935, the Federal Power Act, any state public utilities code
     or to any other Governmental Rule limiting its ability to incur
     indebtedness.

          (j)  TAXES.  Such Guarantor has paid all taxes and other charges
     imposed by any Governmental Authority due and payable by such Guarantor
     other than those which are being challenged in good faith by appropriate
     proceedings and for which adequate reserves have been established.

     4.   COVENANTS.  Until all obligations of Agent or any Lender to extend
credit to Borrower have terminated and all of the Guaranteed Obligations have
been fully, finally and indefeasibly paid, each Guarantor shall comply with the
following covenants:

          (a)  FINANCIAL STATEMENTS, REPORTS, ETC.  Such Guarantor shall furnish
     to Agent, with sufficient copies for each Lender, the following, each in
     such form and such detail as Agent or the Required Lenders shall reasonably
     request:

               (i)    Such Financial Statements of such Guarantor as Agent or
          the Required Lenders shall reasonably request;

               (ii)   Notice of any Default or Event of Default known to such
          Guarantor or of any other event or condition known to such Guarantor
          which is reasonably likely to have a Material Adverse Effect; and

               (iii)  Such other certificates, opinions, statements, documents
          and information relating to the operations or condition (financial or
          otherwise) of such Guarantor or its Subsidiaries, and compliance by
          Borrower and such Guarantor with the terms of the Credit Documents as
          Agent or any Lender may from time to time reasonably request.

          (b)  BOOKS AND RECORDS.  Such Guarantor and its Subsidiaries shall
     maintain proper books of record and account in accordance with good
     business practices and GAAP.

          (c)  INSPECTIONS.  Such Guarantor and its Subsidiaries shall permit
     any Person designated by Agent or any Lender, upon reasonable notice and
     during normal business hours, to visit and inspect any of the properties
     and offices of such Guarantor and its Subsidiaries, to examine the books
     and records of such Guarantor and its Subsidiaries and make copies thereof
     and to discuss the affairs, finances and accounts of such Guarantor and its
     Subsidiaries with, and to be

                                      F-6
<PAGE>

     advised as to the same by, their officers, auditors and accountants, all at
     such times and intervals as Agent or any Lender may reasonably request.

          (d)  INSURANCE.  Such Guarantor and its Subsidiaries shall maintain
     with financially sound and reputable insurance carriers insurance in such
     amounts, with such deductibles and covering such risks as is customary for
     companies engaged in similar businesses in the same geographic areas as
     such Guarantor and its Subsidiaries.

          (e)  GOVERNMENTAL CHARGES AND OTHER INDEBTEDNESS.  To the extent
     failure to do so could have a Material Adverse Effect, such Guarantor and
     its Subsidiaries shall promptly pay and discharge all taxes and other
     charges imposed by any Government Authority upon such Guarantor or its
     Subsidiaries or their property as and when they become due.

          (f)  GENERAL BUSINESS OPERATIONS.  To the extent failure to do so
     could have a Material Adverse Effect, such Guarantor and its Subsidiaries
     shall (i) maintain its corporate existence and all rights, privileges and
     franchises necessary for the conduct of its business and (ii) comply with
     all Requirements of Law and Contractual Obligations applicable to it.

     5.   AUTHORIZATIONS, WAIVERS, ETC.

          (a)  AUTHORIZATIONS.  Each Guarantor authorizes Agent and the Lenders,
     in their discretion, without notice to such Guarantor, irrespective of any
     change in the financial condition of Borrower, such Guarantor, any other
     Guarantor or any other guarantor of the Guaranteed Obligations since the
     date hereof, and without affecting or impairing in any way the liability of
     such Guarantor hereunder, from time to time to:

               (i)    Create new Guaranteed Obligations and renew, compromise,
          extend, accelerate or otherwise change the time for payment or
          performance of, or otherwise amend or modify the Credit Documents or
          change the terms of the Guaranteed Obligations or any part thereof,
          including increase or decrease of the rate of interest thereon;

               (ii)   Take and hold security for the payment or performance of
          the Guaranteed Obligations and exchange, enforce, waive or release any
          such security; apply such security and direct the order or manner of
          sale thereof; and purchase such security at public or private sale;

               (iii)  Otherwise exercise any right or remedy they may have
          against Borrower, such Guarantor, any other Guarantor, any other
          guarantor of the Guaranteed Obligations or any security, including,
          without limitation, the right to foreclose upon any such security by
          judicial or nonjudicial sale;

                                      F-7
<PAGE>

               (iv)   Settle, compromise with, release or substitute any one or
          more makers, endorsers or guarantors of the Guaranteed Obligations;
          and

               (v)    Assign the Guaranteed Obligations, this Guaranty or the
          other Credit Documents in whole or in part to the extent provided in
          the Credit Agreement and the other Credit Documents.

          (b)  WAIVERS.  Each Guarantor hereby waives:

               (i)    Any right to require Agent or any Lender to (A) proceed
          against Borrower, any other Guarantor or any other guarantor of the
          Guaranteed Obligations, (B) proceed against or exhaust any security
          received from Borrower, such Guarantor, any other Guarantor or any
          other guarantor of the Guaranteed Obligations or otherwise marshall
          the assets of Borrower, such Guarantor, any other Guarantor or any
          other guarantor of the Guaranteed Obligations or (C) pursue any other
          remedy in Agent's or any Lender's power whatsoever;

               (ii)   Any defense arising by reason of the application by
          Borrower of the proceeds of any borrowing;

               (iii)  Any defense resulting from the absence, impairment or loss
          of any right of reimbursement, subrogation, contribution or other
          right or remedy of Guarantor against Borrower, any other Guarantor,
          any other guarantor of the Guaranteed Obligations or any security,
          whether resulting from an election by Agent or any Lender to foreclose
          upon security by nonjudicial sale, or otherwise;

               (iv)   Any setoff or counterclaim of Borrower or any defense
          which results from any disability or other defense of Borrower or the
          cessation or stay of enforcement from any cause whatsoever of the
          liability of Borrower (including, without limitation, the lack of
          validity or enforceability of any of the Credit Documents);

               (v)    Any defense based upon any law, rule or regulation which
          provides that the obligation of a surety must not be greater or more
          burdensome than the obligation of the principal;

               (vi)   Until all obligations of Agent or any Lender to extend
          credit to Borrower have terminated and all of the Guaranteed
          Obligations have been fully, finally and indefeasibly paid, any right
          of subrogation, reimbursement, indemnification or contribution and
          other similar right to enforce any remedy which Agent, the Lenders or
          any other Person now has or may hereafter have against Borrower on
          account of the Guaranteed Obligations, and any benefit of, and any
          right to participate in, any

                                      F-8
<PAGE>

          security now or hereafter received by Agent, any Lender or any other
          Person on account of the Guaranteed Obligations;

               (vii) All presentments, demands for performance, notices of
          non-performance, notices delivered under the Credit Documents,
          protests, notice of dishonor, and notices of acceptance of this
          Guaranty and of the existence, creation or incurring of new or
          additional Guaranteed Obligations and notices of any public or private
          foreclosure sale;

               (viii) The benefit of any statute of limitations to the extent
          permitted by law;

               (ix)   Any appraisement, valuation, stay, extension, moratorium
          redemption or similar law or similar rights for marshalling;

               (x)    Any right to be informed by Agent or any Lender of the
          financial condition of Borrower, any other Guarantor or any other
          guarantor of the Guaranteed Obligations or any change therein or any
          other circumstances bearing upon the risk of nonpayment or
          nonperformance of the Guaranteed Obligations;

               (xi)   Until all obligations of Agent or any Lender to extend
          credit to Borrower have terminated and all of the Guaranteed
          Obligations have been fully, finally and indefeasibly paid, any right
          to revoke this Guaranty;

               (xii)  Any defense arising from an election for the application
          of Section 1111(b)(2) of the United States Bankruptcy Code which
          applies to the Guaranteed Obligations;

               (xiii) Any defense based upon any borrowing or grant of a
          security interest under Section 364 of the United States Bankruptcy
          Code;

               (xiv)  Any right it may have to a fair value hearing to determine
          the size of a deficiency judgment following any foreclosure on any
          security for the Guaranteed Obligations;

               (xv)   All rights and defenses arising out of an election of
          remedies by Agent or any Lender, even though that election of
          remedies, such as a nonjudicial foreclosure with respect to security
          for a Guaranteed Obligation, has destroyed such Guarantor's rights of
          subrogation and reimbursement against Borrower by the operation of
          Section 580d of the Code of Civil Procedure or otherwise; and

               (xvi)  All other rights and defenses available to such Guarantor
          by reason of Sections 2787 to 2855, inclusive, Section 2899 or Section
          3433

                                      F-9
<PAGE>

          of the California Civil Code or Section 3605 of the California
          Commercial Code.

     Without limiting the scope of any of the foregoing provisions of this
     Paragraph 5, and pursuant to the provisions of California Civil Code
     Section 2856, each Guarantor hereby further waives all rights and defenses
     that such Guarantor may have because the Guaranteed Obligations are secured
     by real property.  This means, among other things:

               (A)    Agent or any Lender may collect from any Guarantor without
          first foreclosing on any real or personal property collateral pledged
          by Borrower.

               (B)    If Agent or any Lender forecloses on any real property
          collateral pledged by Borrower:

                      (1)     The amount of the Guaranteed Obligations may be
               reduced only by the price for which that collateral is sold at
               the foreclosure sale, even if the collateral is worth more than
               the sale price.

                      (2)     Agent or any Lender may collect from any Guarantor
               even if Agent or any Lender, by foreclosing on the real property
               collateral, has destroyed any right such Guarantor or any other
               Guarantor may have to collect from Borrower.

     This is an unconditional and irrevocable waiver of any rights and defenses
     each Guarantor may have because the Guaranteed Obligations are secured by
     real property.  These rights and defenses include, but are not limited to,
     any rights or defenses based upon Section 580a, 580b, 580d, or 726 of the
     California Code of Civil Procedure.

          (c)  FINANCIAL CONDITION OF BORROWER, ETC.  Each Guarantor is fully
     aware of the financial condition and affairs of Borrower.  Each Guarantor
     has executed this Guaranty without reliance upon any representation,
     warranty, statement or information concerning Borrower furnished to such
     Guarantor by Agent or any Lender and has, independently and without
     reliance on Agent or any Lender, and based on such documents and
     information as it has deemed appropriate, made its own appraisal of the
     financial condition and affairs of Borrower and of other circumstances
     affecting the risk of nonpayment or nonperformance of the Guaranteed
     Obligations.  Each Guarantor is in a position to obtain, and assumes full
     responsibility for obtaining, any additional information about the
     financial condition and affairs of Borrower and of other circumstances
     affecting the risk of nonpayment or nonperformance of the Guaranteed
     Obligations and will, independently and without reliance upon Agent or any
     Lender, and based on such documents and information as it shall deem

                                      F-10
<PAGE>

     appropriate at the time, continue to make its own appraisals and decisions
     in taking or not taking action in connection with this Guaranty.

     6.   SUBORDINATION.  Each Guarantor hereby subordinates any and all debts,
liabilities and obligations owed to such Guarantor by Borrower or any Subsidiary
of Borrower (the "SUBORDINATED OBLIGATIONS") to the Guaranteed Obligations as
provided in this PARAGRAPH 6.

          (a)  PROHIBITED PAYMENTS, ETC.  Until the occurrence of a Default or
     an Event of Default or any default by any Guarantor hereunder, each
     Guarantor and its Subsidiaries may receive regularly scheduled payments
     from Borrower on account of Subordinated Obligations.  After the occurrence
     and during the continuance of any Default or Event of Default or any
     default by any Guarantor hereunder (including the commencement and
     continuation of any Insolvency Proceeding relating to Borrower, however,
     unless Agent or Required Lenders otherwise requests, no Guarantor shall,
     nor shall it permit any of its Subsidiaries to, demand, accept or take any
     action to collect any payment on account of the Subordinated Obligations.

          (b)  PRIOR PAYMENT OF GUARANTEED OBLIGATIONS.  In any Insolvency
     Proceeding relating to Borrower, each Guarantor agrees that Agent and the
     Lenders shall be entitled to receive payment of all Guaranteed Obligations
     (including any and all Disallowed Post-Commencement Interest and Expenses)
     before such Guarantor or any of its Subsidiaries receives payment of any
     Subordinated Obligations.

          (c)  TURN-OVER.  After the occurrence and during the continuance of
     any Default or Event of Default (including the commencement and
     continuation of any Insolvency Proceeding relating to Borrower, each
     Guarantor and its Subsidiaries shall, if Agent or Required Lenders so
     requests, collect, enforce and receive payments on account of the
     Subordinated Obligations as trustee for Agent and the Lenders and deliver
     such payments to Agent on account of the Guaranteed Obligations (including
     any and all Disallowed Post-Commencement Interest and Expenses), together
     with any necessary endorsements or other instruments of transfer, but
     without reducing or affecting in any manner the liability of such Guarantor
     under the other provisions of this Guaranty.

          (d)  AGENT AUTHORIZATION.  After the occurrence and during the
     continuance of any Default or Event of Default or any default by a
     Guarantor hereunder (including the commencement and continuation of any
     Insolvency Proceeding relating to Borrower, Agent is authorized and
     empowered (but without any obligation to so do), in its discretion, (i) in
     the name of each Guarantor and its Subsidiaries, to collect and enforce,
     and to submit claims in respect of, Subordinated Obligations and to apply
     any amounts received thereon to the Guaranteed Obligations (including any
     and all Disallowed Post-Commencement

                                      F-11
<PAGE>

     Interest and Expenses), and (ii) to require each Guarantor (A) to collect
     and enforce, and to submit claims in respect of, Subordinated Obligations
     and (B) to pay any amounts received on such obligations to Agent for
     application to the Guaranteed Obligations (including any and all Disallowed
     Post-Commencement Interest and Expenses).

     7.   GENERAL PLEDGE; SETOFF.

          (a)  PLEDGE.  In addition to all liens upon and rights of setoff
     against the property of any Guarantor given to Agent or any Lender by law
     or separate agreement to secure the liabilities of any Guarantor hereunder,
     to the extent permitted by law, each Guarantor hereby grants to Agent (for
     the ratable benefit of Agent and the Lenders), as security for such
     Guarantor's obligations hereunder, a security interest in all monies,
     deposit accounts, securities and other property of such Guarantor now or
     hereafter in the possession of or on deposit with Agent or any Lender,
     whether held in a general or special account or deposit, or for safekeeping
     or otherwise; and Agent shall have all rights and remedies of a secured
     party with respect to such property.

          (b)  SETOFF.  In addition to any rights and remedies of Agent or any
     Lender provided by law, Agent and the Lenders (with the prior consent of
     Agent) shall have the right, without prior notice to any Guarantor, any
     such notice being expressly waived by each Guarantor to the extent
     permitted by applicable law, upon the occurrence and during the continuance
     of a Default or an Event of Default, to set-off and apply against the
     Guaranteed Obligations any amount owing from Agent or any Lender to such
     Guarantor, including all deposits, accounts and moneys of such Guarantor
     then or thereafter maintained with Agent or any Lender, at or at any time
     after, the happening of any of the above mentioned events.

          (c)  NONWAIVER.  No security interest or right of setoff shall be
     deemed to have been waived by any act or conduct on the part of Agent or
     any Lender or by any failure to exercise such right of setoff or to enforce
     such security interest, or by any delay in so doing; and every right of
     setoff and security interest shall continue in full force and effect until
     such right of setoff or security interest is specifically waived or
     released by an instrument in writing executed by Agent.

     8.   CONTRIBUTION AMONG GUARANTORS.  The Guarantors desire to allocate
among themselves, in a fair and equitable manner, their rights of contribution
from each other when any payment is made by any Guarantor under this Guaranty.
Accordingly, if any payment is made by any Guarantor under this Guaranty (a
"FUNDING GUARANTOR") that exceeds its Fair Share, the Funding Guarantor shall be
entitled to a contribution from each other Guarantor in the amount of such other
Guarantor's Fair Share Shortfall, so that all such contributions shall cause
each Guarantor's Aggregate Guaranty Payments to equal its Fair Share.  The
amounts payable as contributions hereunder shall be determined

                                      F-12
<PAGE>

by the Funding Guarantor as of the date on which the related payment or
distribution is made by the Funding Guarantor, and such determination shall be
binding on the other Guarantors absent manifest error. The allocation and right
of contribution among the Guarantors set forth in this Paragraph 8 shall not be
construed to limit in any way the liability of any Guarantor under this Guaranty
or the amount of the Guaranteed Obligations.

     9.   MISCELLANEOUS.

          (a)  NOTICES.  Except as otherwise provided herein, all notices,
     requests, demands, consents, instructions or other communications to or
     upon any Guarantor, any Lender or Agent under this Guaranty or the other
     Credit Documents to which a Guarantor is a party shall be in writing and
     faxed, mailed or delivered, if to a Guarantor or Agent, at its respective
     facsimile number or address set forth below or in the respective Subsidiary
     Joinder for such Guarantor or, if to any Lender, at the address or
     facsimile number specified beneath the heading "Address for Notices" under
     the name of such Lender in Schedule I to the Credit Agreement (or to such
     other facsimile number or address for any party as indicated in any notice
     given by that party to the other parties).  All such notices and
     communications shall be effective (i) when sent by overnight service of
     recognized standing, on the second Business Day following the deposit with
     such service; (ii) when mailed, first class postage prepaid and addressed
     as aforesaid through the United States Postal Service, upon receipt; (iii)
     when delivered by hand, upon delivery; and (iv) when faxed, upon
     confirmation of receipt.
          Guarantor:  ADAC Research and Mfg., Inc.
                      c/o ADAC Laboratories
                      540 Alder Drive
                      Milpitas, CA  95035
                      Attn:  Ronald Lindberg
                      Telephone: (408) 321-9100
                      Facsimile: (408) 321-9686

          Guarantor:  ADAC Healthcare Information Systems, Inc.
                      c/o ADAC Laboratories
                      540 Alder Drive
                      Milpitas, CA  95035
                      Attn:  Ronald Lindberg
                      Telephone: (408) 321-9100
                      Facsimile: (408) 321-9686
          Guarantor:  ADAC Medical Technologies, Inc.
                      c/o ADAC Laboratories
                      540 Alder Drive
                      Milpitas, CA  95035

                                      F-13
<PAGE>
                      Attn:  Ronald Lindberg
                      Telephone: (408) 321-9100
                      Facsimile: (408) 321-9686

                                      F-14
<PAGE>
          Guarantor:  ADAC Laboratories Pacific, Inc.
                      c/o ADAC Laboratories
                      540 Alder Drive
                      Milpitas, CA  95035
                      Attn:  Ronald Lindberg
                      Telephone: (408) 321-9100
                      Facsimile: (408) 321-9686

          Guarantor:  ADAC Healthcare Partners, Inc.
                      c/o ADAC Laboratories
                      540 Alder Drive
                      Milpitas, CA  95035
                      Attn:  Ronald Lindberg
                      Telephone: (408) 321-9100
                      Facsimile: (408) 321-9686

          Guarantor:  ADAC Radiology Services, Inc.
                      c/o ADAC Laboratories
                      540 Alder Drive
                      Milpitas, CA  95035
                      Attn:  Ronald Lindberg
                      Telephone: (408) 321-9100
                      Facsimile: (408) 321-9686

          Guarantor:  Cortet, Inc.
                      c/o ADAC Laboratories
                      540 Alder Drive
                      Milpitas, CA  95035
                      Attn:  Ronald Lindberg
                      Telephone: (408) 321-9100
                      Facsimile: (408) 321-9686

          Guarantor:  O.N.E.S. Medical Services, Inc.
                      c/o ADAC Laboratories
                      540 Alder Drive
                      Milpitas, CA  95035
                      Attn:  Ronald Lindberg
                      Telephone: (408) 321-9100
                      Facsimile: (408) 321-9686

          Guarantor:  CT Solutions Inc.
                      c/o ADAC Laboratories
                      540 Alder Drive
                      Milpitas, CA  95035
                      Attn:  Ronald Lindberg

                                      F-15
<PAGE>

                      Telephone: (408) 321-9100
                      Facsimile: (408) 321-9686

          Agent:      ABN AMRO Bank N.V.
                      101 California Street, Suite 4550
                      San Francisco, CA  94111-5812
                      Attn: Dianne Barkley
                      Telephone: (415) 984-3706
                      Facsimile: (415) 362-3524

                      with a copy to:

                      ABN AMRO Bank N.V.
                      1325 Avenue of the Americas, 9th Floor
                      New York, NY  10017
                      Attn:  Linda Boardman
                      Telephone:  (212) 314-1724
                      Fax No:  (212) 314-1709

          (b)  PAYMENTS.  Each Guarantor shall make all payments required
     hereunder to Agent, or its order, at Agent's office located at the address
     set forth in SUBPARAGRAPH 9(a) hereof, or at such other office as Agent may
     designate, on demand, in Dollars.  If any amounts required to be paid by a
     Guarantor under this Guaranty are not paid when due, such Guarantor shall
     pay interest on the aggregate, outstanding balance of such amounts from the
     date due until those amounts are paid in full at a per annum rate equal to
     the Base Rate plus two percent (2.00%), such rate to change from time to
     time as the Base Rate shall change.

          (c)  EXPENSES.  Each Guarantor shall pay on demand (i) all reasonable
     fees and expenses, including reasonable attorneys' fees and expenses,
     incurred by Agent in connection with the preparation, execution and
     delivery of, and the exercise of its duties under, this Guaranty and the
     preparation, execution and delivery of amendments and waivers hereunder and
     (ii) all reasonable fees and expenses, including reasonable attorneys' fees
     and expenses, incurred by Agent and the Lenders in connection with the
     enforcement or attempted enforcement of this Guaranty or any of the
     Guaranteed Obligations or in preserving any of Agent's or the Lenders'
     rights and remedies (including, without limitation, all such fees and
     expenses incurred in connection with any "workout" or restructuring
     affecting the Credit Documents or the Guaranteed Obligations or any
     bankruptcy or similar proceeding involving Guarantor, any other Guarantor,
     Borrower or any of their affiliates).

          (d)  WAIVERS; AMENDMENTS.  This Guaranty may not be amended or
     modified, nor may any of its terms be waived, except by written instruments
     signed by each Guarantor and Agent to the extent permitted pursuant to
     Section

                                      F-16
<PAGE>

     8.04 of the Credit Agreement. Each waiver or consent under any provision
     hereof shall be effective only in the specific instances for the purpose
     for which given. No failure or delay on Agent's or any Lender's part in
     exercising any right hereunder shall operate as a waiver thereof or of any
     other right nor shall any single or partial exercise of any such right
     preclude any other further exercise thereof or of any other right.

          (e)  ASSIGNMENTS.  This Guaranty shall be binding upon and inure to
     the benefit of Agent, the Lenders, the Guarantors and their respective
     successors and assigns; PROVIDED, HOWEVER, that no Guarantor may assign or
     transfer any of its rights and obligations under this Guaranty without the
     prior written consent of Agent and the Lenders, and, PROVIDED, FURTHER,
     that Agent and any Lender may sell, assign and delegate their respective
     rights and obligations hereunder only as permitted by the Credit Agreement.
     All references in this Guaranty to any Person shall be deemed to include
     all permitted successors and assigns of such Person.

          (f)  CUMULATIVE RIGHTS, ETC.  The rights, powers and remedies of Agent
     and the Lenders under this Guaranty shall be in addition to all rights,
     powers and remedies given to Agent and the Lenders by virtue of any
     applicable law, rule or regulation of any Governmental Authority, the
     Credit Agreement, any other Credit Document or any other agreement, all of
     which rights, powers, and remedies shall be cumulative and may be exercised
     successively or concurrently without impairing Agent's or any Lender's
     rights hereunder.  Each Guarantor waives any right to require Agent or any
     Lender to proceed against any Person or to exhaust any Collateral or to
     pursue any remedy in Agent's or such Lender's power.

          (g)  PAYMENTS FREE OF TAXES, ETC.  All payments made by each Guarantor
     under this Guaranty shall be made by each Guarantor free and clear of and
     without deduction for any and all present and future taxes, levies,
     charges, deductions and withholdings.  In addition, each Guarantor shall
     pay upon demand any stamp or other taxes, levies or charges of any
     jurisdiction with respect to the execution, delivery, registration,
     performance and enforcement of this Guaranty.  If any taxes, levies,
     charges or other amounts are required to be withheld from any amounts
     payable to Agent or any Lender hereunder, the amounts so payable to Agent
     or such Lender shall be increased to the extent necessary to yield to Agent
     or such Lender (after payment of all such amounts) any such amounts payable
     hereunder in the amounts specified in this Guaranty.  Upon request by Agent
     or any Lender, each Guarantor shall furnish evidence satisfactory to Agent
     or such Lender that all requisite authorizations and approvals by, and
     notices to and filings with, governmental authorities and regulatory bodies
     have been obtained and made and that all requisite taxes, levies and
     charges have been paid.

          (h)  PARTIAL INVALIDITY.  If at any time any provision of this
     Guaranty is or becomes illegal, invalid or unenforceable in any respect
     under the law or any

                                      F-17
<PAGE>

     jurisdiction, neither the legality, validity or enforceability of the
     remaining provisions of this Guaranty nor the legality, validity or
     enforceability of such provision under the law of any other jurisdiction
     shall in any way be affected or impaired thereby.

          (i)  JOINT AND SEVERAL OBLIGATION.  The obligations of the Guarantors
     under this Guaranty are joint and several obligations of each Guarantor and
     may be freely enforced against each Guarantor, for the full amount of the
     Guaranteed Obligations, without regard to whether enforcement is sought or
     available against any other Guarantor.

          (j)  GOVERNING LAW.  This Guaranty shall be governed by and construed
     in accordance with the laws of the State of California without reference to
     conflicts of law rules.

          (k)  JURY TRIAL.  EACH GUARANTOR, THE LENDERS AND AGENT, TO THE
     FULLEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES ALL
     RIGHT TO TRIAL BY JURY AS TO ANY ISSUE RELATING HERETO IN ANY ACTION,
     PROCEEDING, OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS GUARANTY.

          (l)  LIMITATION OF LIABILITY.  NO CLAIM MAY BE MADE BY ANY GUARANTOR
     AGAINST AGENT, ANY LENDER OR THE AFFILIATES, DIRECTORS, OFFICERS,
     EMPLOYEES, ATTORNEYS OR AGENTS OF AGENT OR ANY LENDER FOR ANY SPECIAL,
     INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM
     (WHETHER BASED UPON ANY BREACH OF CONTRACT, TORT, BREACH OF STATUTORY DUTY
     OR ANY OTHER THEORY OF LIABILITY) ARISING OUT OF OR RELATED TO THE
     TRANSACTIONS CONTEMPLATED BY THIS GUARANTY, OR ANY ACT, OMISSION OR EVENT
     OCCURRING IN CONNECTION THEREWITH, AND GUARANTOR HEREBY WAIVES, RELEASES
     AND AGREES NOT TO SUE UPON ANY CLAIM FOR ANY SUCH DAMAGES, WHETHER OR NOT
     NOW ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.

          (m)  COUNTERPARTS.  This Agreement may be executed in any number of
     identical counterparts, any set of which signed by all parties hereto shall
     be deemed to constitute a complete, executed original for all purposes.

                                      F-18
<PAGE>

          IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
executed as of the day and year first above written.

                                   ADAC RESEARCH AND MFG., INC.

                                   By:
                                      ------------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

                                   ADAC HEALTHCARE INFORMATION
                                   SYSTEMS, INC.

                                   By:
                                      ------------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

                                   ADAC MEDICAL TECHNOLOGIES, INC.

                                   By:
                                      ------------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

                                   ADAC LABORATORIES PACIFIC, INC.

                                   By:
                                      ------------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

                                   ADAC HEALTHCARE PARTNERS, INC.

                                   By:
                                      ------------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

                                   ADAC RADIOLOGY SERVICES, INC.

                                      F-19
<PAGE>

                                   By:
                                      ------------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

                                   CORTET, INC.

                                   By:
                                      ------------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

                                   O.N.E.S. MEDICAL SERVICES, INC.

                                   By:
                                      ------------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

                                   CT SOLUTIONS INC.

                                   By:
                                      ------------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

                                      F-20
<PAGE>

                                  ATTACHMENT 1

                               SUBSIDIARY JOINDER

     THIS SUBSIDIARY JOINDER (this "AGREEMENT"), dated as of ____________, ____,
is executed by [NEW SUBSIDIARY], a _________ [corporation] [partnership] [etc.]
("NEW SUBSIDIARY"), in favor of ABN AMRO BANK N.V., a Netherlands public company
acting through its San Francisco Representative Office, acting as agent (in such
capacity, "AGENT") for the financial institutions which are from time to time
parties to the Credit Agreement referred to in Recital A below (collectively,
the "LENDERS").

                                    RECITALS

     A. Pursuant to an Amended and Restated Credit Agreement dated as of March
29, 1999 (as amended from time to time, the "CREDIT AGREEMENT"), among ADAC
Laboratories, a California corporation ("BORROWER"), the Lenders and Agent, the
Lenders have agreed to extend certain credit facilities to Borrower upon the
terms and subject to the conditions set forth therein.

     B. The Lenders' obligations to extend the credit facilities to Borrower
under the Credit Agreement are subject, among other conditions, to receipt by
Agent of (1) an Amended and Restated Guaranty, dated as of March 29, 1999 (the
"GUARANTY"), duly executed by each existing Domestic Subsidiary of Borrower, and
(2) Subsidiary Joinders, duly executed by each future Domestic Subsidiary of
Borrower.

     C. New Subsidiary is a new Domestic Subsidiary of Borrower and expects to
derive substantial direct and indirect benefit from the transactions
contemplated by the Credit Agreement.

                                   AGREEMENT

          NOW, THEREFORE, in consideration of the above recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, New Subsidiary hereby agrees with Agent, for the ratable benefit
of the Lenders and Agent, as follows:

          1.   DEFINITIONS AND INTERPRETATION.  Unless otherwise defined herein,
all capitalized terms used herein and defined in the Guaranty shall have the
respective meanings given to those terms in the Guaranty.  New Subsidiary
acknowledges receipt of copies of the Guaranty, the Credit Agreement and the
other Credit Documents.

          2.   REPRESENTATIONS AND WARRANTIES.  On and as of the date of this
Agreement (the "Effective Date") and for the ratable benefit of the Agent and
the Lenders, New Subsidiary hereby makes each of the representations and
warranties made by each Guarantor in the Guaranty.

                                     F[1]-1
<PAGE>

          3.   AGREEMENT TO BE BOUND.  New Subsidiary agrees that, on and as of
the Effective Date, it shall become a Guarantor under the Guaranty and shall be
bound by all the provisions of the Guaranty to the same extent as if New
Subsidiary had executed the Guaranty on the Closing Date.

          4.   WAIVER.  Without limiting the generality of the waivers in the
Guaranty, New Subsidiary specifically agrees to be bound by the Guaranty and
waives any right to notice of acceptance of its execution of this Agreement and
of its agreement to be bound by the Guaranty.

          5.   GOVERNING LAW.  This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California.

                                     F[1]-2
<PAGE>

          IN WITNESS WHEREOF, New Subsidiary has caused this Agreement to be
executed by its duly authorized officer.

                                   [NEW SUBSIDIARY]

                                   By:
                                      ------------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

Address:

[__________________________________]
[__________________________________]
[__________________________________]
Attn: [_______________________]
Telephone: [(___) ___-____]
Facsimile: [(___) ___-____]

                                     F[1]-3
<PAGE>

                                    EXHIBIT G

                              ASSIGNMENT AGREEMENT

     THIS ASSIGNMENT AGREEMENT, dated as of the date set forth at the top of
Attachment 1 hereto, by and among:

          (1)  The bank designated under item A of ATTACHMENT I hereto as the
     Assignor Lender ("ASSIGNOR LENDER"); and

          (2)  Each bank designated under item B of ATTACHMENT I hereto as an
     Assignee Lender (individually, an "ASSIGNEE LENDER").

                                    RECITALS

     A.   Assignor Lender is one of the lenders which is a party to the Amended
and Restated Credit Agreement dated as of March 29, 1999, by and among ADAC
Laboratories ("BORROWER,") Assignor Lender and the other financial institutions
parties thereto (collectively, the "LENDERS") and ABN AMRO Bank N.V., as agent
for the Lenders (in such capacity, "AGENT").  (Such credit agreement, as
amended, supplemented or otherwise modified in accordance with its terms from
time to time to be referred to herein as the "CREDIT AGREEMENT").

     B.   Assignor Lender wishes to sell, and Assignee Lender wishes to
purchase, all or a portion of Assignor Lender's rights under the Credit
Agreement pursuant to Subparagraph 8.05(c) of the Credit Agreement.

                                    AGREEMENT

     Now, therefore, the parties hereto hereby agree as follows:

     1.   DEFINITIONS.  Except as otherwise defined in this Assignment
Agreement, all capitalized terms used herein and defined in the Credit Agreement
have the respective meanings given to those terms in the Credit Agreement.

     2.   SALE AND ASSIGNMENT.  Subject to the terms and conditions of this
Assignment Agreement, Assignor Lender hereby agrees to sell, assign and delegate
to each Assignee Lender and each Assignee Lender hereby agrees to purchase,
accept and assume the rights, obligations and duties of a Lender under the
Credit Agreement and the other Credit Documents equal to the Proportionate Share
set forth under the caption "Proportionate Share Transferred" opposite such
Assignee Lender's name on ATTACHMENT I hereto.  Such sale, assignment and
delegation shall become effective on the date designated in ATTACHMENT I hereto
(the "ASSIGNMENT EFFECTIVE DATE"), which date shall be at least five (5)
Business Days after the date following the date counterparts of this Assignment
Agreement are delivered to Agent in accordance with Paragraph 3 hereof.

                                      G-1
<PAGE>

     3.   ASSIGNMENT EFFECTIVE NOTICE.  Upon (a) receipt by Agent of five (5)
counterparts of this Assignment Agreement (to each of which is attached a fully
completed ATTACHMENT I), each of which has been executed by Assignor Lender and
each Assignee Lender (and, to the extent required by SUBPARAGRAPH 8.05(c) OF THE
CREDIT AGREEMENT, by Borrower and Agent) and (b) payment to Agent of the
registration and processing fee specified in SUBPARAGRAPH 8.05(e) OF THE CREDIT
AGREEMENT by Assignor Lender, Agent will transmit to Borrower, Assignor Lender
and each Assignee Lender an Assignment Effective Notice substantially in the
form of ATTACHMENT II hereto, fully completed (an "ASSIGNMENT EFFECTIVE
NOTICE").

     4.   ASSIGNMENT EFFECTIVE DATE.  At or before 12:00 noon (local time of
Assignor Lender) on the Assignment Effective Date, each Assignee Lender shall
pay to Assignor Lender, in immediately available or same day funds, an amount
equal to the purchase price, as agreed between Assignor Lender and such Assignee
Lender (the "PURCHASE PRICE"), for the Proportionate Share purchased by such
Assignee Lender hereunder.  Effective upon receipt by Assignor Lender of the
Purchase Price payable by each Assignee Lender, the sale, assignment and
delegation to such Assignee Lender of such Proportionate Share as described in
Paragraph 2 hereof shall become effective.

     5.   PAYMENTS AFTER THE ASSIGNMENT EFFECTIVE DATE.  Assignor Lender and
each Assignee Lender hereby agree that Agent shall, and hereby authorize and
direct Agent to, allocate amounts payable under the Credit Agreement and the
other Credit Documents as follows:

          (a)  All principal payments made after the Assignment Effective Date
     with respect to each Proportionate Share assigned to an Assignee Lender
     pursuant to this Assignment Agreement shall be payable to such Assignee
     Lender.

          (b)  All interest, fees and other amounts accrued after the Assignment
     Effective Date with respect to each Proportionate Share assigned to an
     Assignee Lender pursuant to this Assignment Agreement shall be payable to
     such Assignee Lender.

Assignor Lender and each Assignee Lender shall make any separate arrangements
between themselves which they deem appropriate with respect to payments between
them of amounts paid under the Credit Documents on account of the Proportionate
Share assigned to such Assignee Lender, and neither Agent nor Borrower shall
have any responsibility to effect or carry out such separate arrangements.

     6.   DELIVERY OF NOTES.  On or prior to the Assignment Effective Date,
Assignor Lender will deliver to Agent the Notes payable to Assignor Lender.  On
or prior to the Assignment Effective Date, Borrower will deliver to Agent new
Notes for each Assignee Lender and Assignor Lender, in each case in principal
amounts reflecting, in accordance with the Credit Agreement, their respective
Commitments (as adjusted pursuant to this Assignment Agreement).  As provided in
SUBPARAGRAPH 8.05(c) OF THE CREDIT AGREEMENT, each such new Note shall be dated
the Closing Date.  Promptly after

                                      G-2
<PAGE>

the Assignment Effective Date, Agent will send to each of Assignor Lender and
the Assignee Lenders its new Notes and will send to Borrower the superseded Note
payable to Assignor Lender, marked "Replaced."

     7.   DELIVERY OF COPIES OF CREDIT DOCUMENTS.  Concurrently with the
execution and delivery hereof, Assignor Lender will provide to each Assignee
Lender (if it is not already a Lender party to the Credit Agreement) conformed
copies of all documents delivered to Assignor Lender on or prior to the Closing
Date in satisfaction of the conditions precedent set forth in the Credit
Agreement.

     8.   FURTHER ASSURANCES.  Each of the parties to this Assignment Agreement
agrees that at any time and from time to time upon the written request of any
other party, it will execute and deliver such further documents and do such
further acts and things as such other party may reasonably request in order to
effect the purposes of this Assignment Agreement.

     9.   FURTHER REPRESENTATIONS, WARRANTIES AND COVENANTS.  Assignor Lender
and each Assignee Lender further represent and warrant to and covenant with each
other, Agent and the Lenders as follows:

          (a)  Other than the representation and warranty that it is the legal
     and beneficial owner of the interest being assigned hereby free and clear
     of any adverse claim, Assignor Lender makes no representation or warranty
     and assumes no responsibility with respect to any statements, warranties or
     representations made in or in connection with the Credit Agreement or the
     other Credit Documents or the execution, legality, validity,
     enforceability, genuineness, sufficiency or value of the Credit Agreement
     or the other Credit Documents furnished.

          (b)  Assignor Lender makes no representation or warranty and assumes
     no responsibility with respect to the financial condition of Borrower or
     any of its obligations under the Credit Agreement or any other Credit
     Documents.

          (c)  Each Assignee Lender confirms that it has received a copy of the
     Credit Agreement and such other documents and information as it has deemed
     appropriate to make its own credit analysis and decision to enter into this
     Assignment Agreement.

          (d)  Each Assignee Lender will, independently and without reliance
     upon Agent, Assignor Lender or any other Lender and based upon such
     documents and information as it shall deem appropriate at the time,
     continue to make its own credit decisions in taking or not taking action
     under the Credit Agreement and the other Credit Documents.

          (e)  Each Assignee Lender appoints and authorizes Agent to take such
     action as Agent on its behalf and to exercise such powers under the Credit

                                      G-3
<PAGE>

     Agreement and the other Credit Documents as Agent is authorized to exercise
     by the terms thereof, together with such powers as are reasonably
     incidental thereto, all in accordance with SECTION VII OF THE CREDIT
     AGREEMENT.

          (f)  Each Assignee Lender agrees that it will perform in accordance
     with their terms all of the obligations which by the terms of the Credit
     Agreement and the other Credit Documents are required to be performed by it
     as a Lender.

          (g)  ATTACHMENT I hereto sets forth administrative information with
     respect to each Assignee Lender.

     10.  EFFECT OF THIS ASSIGNMENT AGREEMENT.  On and after the Assignment
Effective Date, (a) each Assignee Lender shall be a Lender with a Proportionate
Share equal to the Proportionate Share set forth under the caption
"Proportionate Share After Assignment" opposite such Assignee Lender's name on
ATTACHMENT I hereto and shall have the rights, duties and obligations of such a
Lender under the Credit Agreement and the other Credit Documents and (b)
Assignor Lender shall be a Lender with a Proportionate Share equal to the
Proportionate Share set forth under the caption "Proportionate Share After
Assignment" opposite Assignor Lender's name on ATTACHMENT I hereto and shall
have the rights, duties and obligations of such a Lender under the Credit
Agreement and the other Credit Documents, or, if the Proportionate Share of
Assignor Lender has been reduced to 0%, Assignor Lender shall cease to be a
Lender and shall have no further obligation to make any Loans.

     11.  MISCELLANEOUS.  This Assignment Agreement shall be governed by, and
construed in accordance with, the laws of the State of California.  Paragraph
headings in this Assignment Agreement are for convenience of reference only and
are not part of the substance hereof.

                                      G-4
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Assignment
Agreement to be executed by their respective duly authorized officers as of the
date set forth in ATTACHMENT I hereto.

                                                                            , as
                                   -----------------------------------------
                                   Assignor Lender

                                   By:
                                      ------------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

                                                                         , as an
                                   --------------------------------------
                                   Assignee Lender

                                   By:
                                      ------------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

                                                                         , as an
                                   --------------------------------------
                                   Assignee Lender

                                   By:
                                      ------------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

                                                                         , as an
                                   --------------------------------------
                                   Assignee Lender

                                   By:
                                      ------------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

                                      G-5
<PAGE>

CONSENTED TO AND ACKNOWLEDGED BY:

-----------------------------------------

By:
   ------------------------------------------
     Name:
          -----------------------------------
     Title:
           ----------------------------------

                                 ,
---------------------------------
  As Agent

By:
   ------------------------------------------
     Name:
          -----------------------------------
     Title:
           ----------------------------------

ACCEPTED FOR RECORDATION
  IN REGISTER:

                                 ,
---------------------------------
  As Agent

By:
   ------------------------------------------
     Name:
          -----------------------------------
     Title:
           ----------------------------------

                                      G-6
<PAGE>

                                  ATTACHMENT 1

                             TO ASSIGNMENT AGREEMENT

                    NAMES, ADDRESSES AND PROPORTIONATE SHARES

                     OF ASSIGNOR LENDER AND ASSIGNEE LENDERS

                          AND ASSIGNMENT EFFECTIVE DATE

                              ______________, ____

A.  ASSIGNOR LENDER      Proportionate         Proportionate
                             Share              Share After
                        TRANSFERRED(1),(2)        ASSIGNMENT(1)

    _______________    _________________%     _______________%

     Applicable Lending Office:

     _____________________________

     ______________________________

     ______________________________

     ______________________________

     Address for notices:

     ______________________________

     ______________________________

     ______________________________

     ______________________________

     Telephone No:_________________

     Telecopier No:________________

     Wiring Instructions:

     ______________________________

     ______________________________

-------------------
(1) To be expressed by a percentage rounded to the [seventh]-digit to the right
of the decimal point.

(2) Share of Total Commitment sold by Assignor Lender, and share of Total
Commitment purchased by Assignee Lender.

                                     G[1]-1
<PAGE>

B.  ASSIGNEE LENDERS      Proportionate         Proportionate
    ----------------         Share              Share After
                        Transferred(3),(4)        Assignment(1)
                        ------------------      ---------------

    _______________    _________________%     _______________%

     Applicable Lending Office:

     _____________________________

     ______________________________

     ______________________________

     ______________________________

     Address for notices:

     ______________________________

     ______________________________

     ______________________________

     ______________________________

     Telephone No:_________________

     Telecopier No:________________

     Wiring Instructions:

     ______________________________

     ______________________________

-------------------
(3) To be expressed by a percentage rounded to the [seventh]-digit to the right
of the decimal point.

(4) Share of Total Commitment sold by Assignor Lender, and share of Total
Commitment purchased by Assignee Lender.

                                     G[1]-2
<PAGE>

B.  ASSIGNEE LENDERS     Proportionate         Proportionate
                             Share              Share After
                        TRANSFERRED(5),(6)       ASSIGNMENT(1)

    _______________    _________________%     _______________%

     Applicable Lending Office:

     _____________________________

     ______________________________

     ______________________________

     ______________________________

     Address for notices:

     ______________________________

     ______________________________

     ______________________________

     ______________________________

     Telephone No:_________________

     Telecopier No:________________

     Wiring Instructions:

     ______________________________

     ______________________________

     C.  ASSIGNMENT EFFECTIVE DATE

     ___________________________

     __________________, _______

-------------------
(5) To be expressed by a percentage rounded to the [seventh]-digit to the right
of the decimal point.

(6) Share of Total Commitment sold by Assignor Lender, and share of Total
Commitment purchased by Assignee Lender.

                                     G[1]-3
<PAGE>

                                  ATTACHMENT 2

                             TO ASSIGNMENT AGREEMENT

                                     FORM OF

                           ASSIGNMENT EFFECTIVE NOTICE

     Reference is made to the Amended and Restated Credit Agreement, dated as of
March 29, 1999, among ADAC Laboratories ("BORROWER"), the financial institutions
parties thereto (the "LENDERS") and ABN AMRO Bank N.V., as agent for the Lenders
(in such capacity, "AGENT").  Agent hereby acknowledges receipt of five executed
counterparts of a completed Assignment Agreement, a copy of which is attached
hereto.  [Note:  Attach copy of Assignment Agreement.]  Terms defined in such
Assignment Agreement are used herein as therein defined.

     1.   Pursuant to such Assignment Agreement, you are advised that the
Assignment Effective Date will be __________.

     2.   Pursuant to such Assignment Agreement, Assignor Lender is required to
deliver to Agent on or before the Assignment Effective Date the Notes payable to
Assignor Lender.

     3.   Pursuant to such Assignment Agreement, Borrower is required to deliver
to Agent on or before the Assignment Effective Date the following Notes, each
dated _________________ [Insert appropriate date]:

     [Describe each new Note for Assignor Lender and each Assignee Lender as to
principal amount.]

     4.   Pursuant to such Assignment Agreement, each Assignee Lender is
required to pay its Purchase Price to Assignor Lender at or before 12:00 Noon on
the Assignment Effective Date in immediately available funds.

                                   Very truly yours,

                                   ABN AMRO BANK N.V.
                                    as Agent

                                   By:
                                      ------------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

                                     G[2]-1
<PAGE>
                                   EXHIBIT H-1

                           BORROWER SECURITY AGREEMENT

     THIS BORROWER SECURITY AGREEMENT, dated as of September [A], 1999 is
executed by ADAC LABORATORIES, a California corporation ("Borrower"), in favor
of ABN AMRO BANK N.V., a Netherlands public company acting through its San
Francisco Representative Office, acting as agent (in such capacity, "Agent") for
the financial institutions which are from time to time parties to the Credit
Agreement referred to in Recital A below (collectively, the "Lenders").

                                    RECITALS

     A. Pursuant to an Amended and Restated Credit Agreement, dated as of March
29, 1999, as amended by that certain First Amendment to Amended and Restated
Credit Agreement dated as of August 17, 1999 (as amended, and as further amended
from time to time, the "Credit Agreement"), among Borrower, the Lenders and
Agent, the Lenders have agreed to extend certain credit facilities to Borrower
upon the terms and subject to the conditions set forth therein.

     B. The Lenders' obligations to continue extend the credit facilities to
Borrower under the Credit Agreement are subject, among other conditions, to
receipt by Agent of this Security Agreement, duly executed by Borrower.

                                    AGREEMENT

     NOW, THEREFORE, in consideration of the above recitals and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Borrower hereby agrees with Agent, for the ratable benefit of the
Lenders and Agent, as follows:

     1. Definitions and Interpretation. When used in this Security Agreement,
the following terms shall have the following respective meanings:

          "Account Debtor" shall have the meaning given to that term in
     subparagraph 3(g) hereof.

          "Agent" shall have the meaning given to that term in the introductory
     paragraph hereof.

          "Borrower" shall have the meaning given to that term in the
     introductory paragraph hereof.

          "Collateral" shall have the meaning given to that term in paragraph 2
     hereof.

                                      H-1-1
<PAGE>
          "Collateral Certificate" shall have the meaning given to that term in
     the Credit Agreement.

          "Credit Agreement" shall have the meaning given to that term in
     Recital A hereof.

          "Depositary Bank" shall have the meaning given to that term in
     subparagraph 4(e) hereof.

          "Equipment" shall have the meaning given to that term in Attachment 1
     hereto.

          "Intermediary" shall have the meaning given to that term in
     subparagraph 4(f) hereof.

          "Inventory" shall have the meaning given to that term in Attachment 1
     hereto.

          "Lenders" shall have the meaning given to that term in the
     introductory paragraph hereof.

          "Receivables" shall have the meaning given to that term in Attachment
     1 hereto.

          "Related Contracts" shall have the meaning given to that term in
     Attachment 1 hereto.

          "Secured Obligations" shall have the meaning given to that term in the
     Credit Agreement.

          "UCC" shall mean the Uniform Commercial Code as in effect in the State
     of California from time to time.

Unless otherwise defined herein, all other capitalized terms used herein and
defined in the Credit Agreement shall have the respective meanings given to
those terms in the Credit Agreement, and all terms defined in the UCC shall have
the respective meanings given to those terms in the UCC.  The rules of
construction set forth in Section I of the Credit Agreement shall, to the extent
not inconsistent with the terms of this Security Agreement, apply to this
Security Agreement and are hereby incorporated by reference.

     2. Grant of Security Interest. As security for the Secured Obligations,
Borrower hereby pledges and assigns to Agent (for the ratable benefit of the
Lenders and Agent) and grants to Agent (for the ratable benefit of the Lenders
and Agent) a security interest in all right, title and interest of Borrower in
and to the property described in Attachment 1 hereto, whether now owned or
hereafter

                                     H-1-2
<PAGE>
acquired (collectively and severally, the "Collateral"), which Attachment 1 is
incorporated herein by this reference.

     3. Representations and Warranties. Borrower represents and warrants to the
Lenders and Agent as follows:

          (a) Borrower is the legal and beneficial owner of the Collateral (or,
     in the case of after-acquired Collateral, at the time Borrower acquires
     rights in the Collateral, will be the legal and beneficial owner thereof).
     No other Person has (or, in the case of after-acquired Collateral, at the
     time Borrower acquires rights therein, will have) any right, title, claim
     or interest (by way of Lien, purchase option or otherwise) in, against or
     to the Collateral, other than Permitted Liens.

          (b) Agent has (or in the case of after-acquired Collateral, at the
     time Borrower acquires rights therein, will have) a first priority
     perfected security interest in the Collateral to the extent that a security
     interest in such Collateral can be perfected by the filing of a financing
     statement, and a security interest in all other Collateral, subject to no
     other Liens except for Permitted Liens.

          (c) All Equipment and Inventory are (i) located at the locations
     indicated in item 8 of the Collateral Certificate, (ii) in transit to such
     locations or (iii) in transit to a third party purchaser which will become
     obligated on a Receivable to Borrower upon receipt. Except for Equipment
     and Inventory referred to in clauses (ii) and (iii) of the preceding
     sentence, Borrower has exclusive possession and control of the Inventory
     and Equipment.

          (d) All Inventory has been (or, in the case of hereafter produced
     Inventory, will be) produced in compliance with all applicable Governmental
     Rules, including the Fair Labor Standards Act (if applicable).

          (e) Borrower keeps all records concerning the Receivables and the
     originals of all Related Contracts at its chief executive office located at
     the address set forth in item 2 of the Collateral Certificate.

          (f) Each Receivable is genuine and enforceable against the party
     obligated to pay the same (an "Account Debtor") free from any right of
     rescission, defense, setoff or discount.

          (g) Each insurance policy maintained by Borrower is validly existing
     and is in full force and effect. Borrower is not in default in any material
     respect under the provisions of any insurance policy, and there are no
     facts which, with the giving of notice or passage of time (or both), would
     result in such a default under any provision of any such insurance policy.

                                     H-1-3
<PAGE>
          (h) The information set forth in the Collateral Certificate is true,
     correct and accurate.

     4. Covenants. Borrower hereby agrees as follows:

          (a) Borrower, at Borrower's expense, shall promptly procure, execute
     and deliver to Agent all documents, instruments and agreements and perform
     all acts which are necessary, or which Agent may reasonably request, to
     establish, maintain, preserve, protect and perfect the Collateral, the Lien
     granted to Agent therein and the first priority of such Lien (subject to
     Permitted Liens) or to enable Agent to exercise and enforce its rights and
     remedies hereunder with respect to any Collateral. Without limiting the
     generality of the preceding sentence, Borrower shall (i) procure, execute
     and deliver to Agent all stock powers, endorsements, assignments, financing
     statements and other instruments of transfer requested by Agent, (ii)
     deliver to Agent promptly upon receipt all originals of Collateral
     consisting of instruments, documents and chattel paper in amounts exceeding
     $1,000,000 (provided, however that upon the occurrence of a Default, if
     requested by Agent, Borrower shall deliver to Agent promptly upon receipt
     all originals of Collateral consisting of instruments, documents and
     chattel paper in amounts of less than $1,000,000 but exceeding $100,000)
     and (iii) take such actions as may be necessary or reasonably requested by
     Agent to perfect the Lien of Agent in any Collateral consisting of
     investment property (including taking the actions required by Subparagraph
     4(f) hereof and, in those jurisdictions where appropriate, causing such
     Liens to be recorded or registered in the books of any financial
     intermediary or clearing corporation requested by Agent).

          (b) Borrower shall not use or permit any Collateral to be used in
     violation of (i) any provision of the Credit Agreement, this Security
     Agreement or any other Security Document, (ii) any applicable Governmental
     Rule where such use might have a Material Adverse Effect, or (iii) any
     policy of insurance covering the Collateral.

          (c) Borrower shall pay promptly when due all taxes and other
     governmental charges, all Liens and all other charges now or hereafter
     imposed upon, relating to or affecting any Collateral.

          (d) Without thirty (30) days prior written notice to Agent, Borrower
     shall not (i) change Borrower's name or place of business (or, if Borrower
     has more than one place of business, its chief executive office), or the
     office in which Borrower's records relating to Receivables or the originals
     of Related Contracts are kept, (ii) keep Collateral consisting of chattel
     paper and documents at any location other than its chief executive office
     set forth in item 2 of the Collateral Certificate, or (iii) keep Collateral

                                     H-1-4
<PAGE>
     consisting of Equipment, Inventory or other goods at any location other
     than the locations set forth in item 8 of the Collateral Certificate.

          (e) For each deposit account maintained by Borrower, Borrower shall
     (i) execute and deliver to the bank or other depository institution at
     which such deposit account is maintained (the "Depositary Bank") a Notice
     of Security Interest in the form of Attachment 2 hereto and (ii) use its
     best efforts to cause the Depositary Bank to execute and deliver to Agent
     an Acknowledgment and Agreement in the form set forth in such Notice of
     Security Interest (or in any other form acceptable to Agent in its sole
     discretion). Without ten (10) days prior written notice to Agent, Borrower
     shall not establish any deposit account not set forth in item 15 of the
     Collateral Certificate.

          (f) For each securities account and commodity account maintained by
     Borrower, Borrower shall (i) complete, execute and deliver to the bank,
     broker or other Person at which such account is maintained (the
     "Intermediary") a Notice of Security Interest in the form of Attachment 3
     hereto and (ii) cause the Intermediary to execute and deliver to Agent an
     Acknowledgment and Agreement in the form set forth in such Notice of
     Security Interest (or in any other form acceptable to Agent in its sole
     discretion). Without thirty (30) days prior written notice to Agent,
     Borrower shall not establish any securities account or commodity account
     not set forth in item 16 of the Collateral Certificate.

          (g) If requested by Agent, Borrower shall deposit, or cause to be
     deposited, all remittances, checks and other funds (in whatever form)
     received with respect to Receivables to a deposit account for which
     Borrower has complied with subparagraph 4(e) above and in which Agent has a
     first priority perfected security interest.

          (h) Borrower shall appear in and defend any action or proceeding which
     may affect its title to or Agent's interest in the Collateral if an adverse
     decision is reasonably likely to have a Material Adverse Effect.

          (i) If Agent gives value to enable Borrower to acquire rights in or
     the use of any Collateral, Borrower shall use such value for such purpose.

          (j) Borrower shall keep separate, accurate and complete records of the
     Collateral and shall provide Agent with such records and such other reports
     and information relating to the Collateral as Agent may reasonably request
     from time to time.

          (k) Borrower shall not surrender or lose possession of (other than to
     Agent), sell, encumber, lease, rent, option, or otherwise dispose of or
     transfer any Collateral or right or interest therein except as permitted in
     the

                                     H-1-5
<PAGE>
     Credit Agreement, and Borrower shall keep the Collateral free of all Liens
     except Permitted Liens.

          (l) Borrower shall, if requested by Agent, type, print or stamp
     conspicuously on the face of all original copies of all Collateral
     consisting of chattel paper and documents in excess of $100,000 not in the
     possession of Agent a legend satisfactory to Agent indicating that such
     chattel paper and documents are subject to the security interest granted
     hereby.

          (m) Borrower shall collect, enforce and receive delivery of the
     Receivables in accordance with past practice until otherwise notified by
     Agent.

          (n) Borrower shall comply with all material Requirements of Law
     applicable to Borrower which relate to the production, possession,
     operation, maintenance and control of the Collateral (including, without
     limitation, the Fair Labor Standards Act).

          (o) Borrower shall (i) carry and maintain insurance on the Collateral
     as required pursuant to Subparagraph 5.01(c) of the Credit Agreement, (ii)
     deliver to Agent from time to time, as Agent may request, schedules setting
     forth all insurance then in effect, and (iii) deliver to Agent copies of
     each policy of insurance which replaces, or evidences the renewal of, each
     existing policy of insurance at least fifteen (15) days prior to the
     expiration of such policy. Agent shall be named as additional insured or
     additional loss payee, as appropriate, on all liability and property
     insurance of Borrower and such policies shall contain such additional
     endorsements as shall be required by Agent. Prior to the occurrence and the
     continuance of an Event of Default, all proceeds of any property insurance
     paid as a result of any event or occurrence shall be paid to Borrower. All
     proceeds of any property insurance paid after the occurrence and during the
     continuance of an Event of Default shall be paid to Agent to be held as
     Collateral and applied as provided in the Credit Agreement or, at the
     election of the Required Lenders, returned to Borrower.

     5. Authorized Action by Agent. Borrower hereby irrevocably appoints Agent
as its attorney-in-fact and agrees that Agent may perform (but Agent shall not
be obligated to and shall incur no liability to Borrower or any third party for
failure so to do) any act which Borrower is obligated by this Security Agreement
to perform, and to exercise such rights and powers as Borrower might exercise
with respect to the Collateral, including, without limitation, the right to (a)
collect by legal proceedings or otherwise and endorse, receive and receipt for
all dividends, interest, payments, proceeds and other sums and property now or
hereafter payable on or on account of the Collateral; (b) enter into any
extension, reorganization, deposit, merger, consolidation or other agreement
pertaining to, or deposit,

                                     H-1-6
<PAGE>
surrender, accept, hold or apply other property in exchange for the Collateral;
(c) insure, process, preserve and enforce the Collateral; (d) make any
compromise or settlement, and take any action it deems advisable, with respect
to the Collateral; (e) pay any Indebtedness of Borrower relating to the
Collateral; and (f) execute UCC financing statements and other documents,
instruments and agreements required hereunder; provided, however, that Agent
shall not act pursuant to this appointment or otherwise hereunder unless an
Event of Default has occurred and is continuing. Borrower agrees to reimburse
Agent upon demand for all reasonable costs and expenses, including attorneys'
fees, Agent may incur while acting as Borrower's attorney-in-fact hereunder, all
of which costs and expenses are included in the Secured Obligations. Borrower
agrees that such care as Agent gives to the safekeeping of its own property of
like kind shall constitute reasonable care of the Collateral when in Agent's
possession; provided, however, that Agent shall not be required to make any
presentment, demand or protest, or give any notice and need not take any action
to preserve any rights against any prior party or any other Person in connection
with the Secured Obligations or with respect to the Collateral.

     6. Default and Remedies. Borrower shall be deemed in default under this
Security Agreement upon the occurrence and during the continuance of an Event of
Default, as that term is defined in the Credit Agreement. In addition to all
other rights and remedies granted to Agent by this Security Agreement, the
Credit Agreement, the other Credit Documents, the UCC and other applicable
Governmental Rules, Agent may, upon the occurrence and during the continuance of
any Event of Default, exercise any one or more of the following rights and
remedies: (a) collect, receive, appropriate or realize upon the Collateral or
otherwise foreclose or enforce Agent's security interests in any or all
Collateral in any manner permitted by applicable Governmental Rules or in this
Security Agreement; (b) notify any or all Account Debtors to make payments on
Receivables directly to Agent; (c) direct any Depositary Bank or Intermediary to
liquidate the account(s) maintained by it, pay all amounts payable in connection
therewith to Agent and/or deliver any proceeds thereof to Agent; (d) sell or
otherwise dispose of any or all Collateral at one or more public or private
sales, whether or not such Collateral is present at the place of sale, for cash
or credit or future delivery, on such terms and in such manner as Agent may
determine; (e) require Borrower to assemble the Collateral and make it available
to Agent at a place to be designated by Agent; (f) enter onto any property where
any Collateral is located and take possession thereof with or without judicial
process; and (g) prior to the disposition of the Collateral, store, process,
repair or recondition any Collateral consisting of goods, perform any
obligations and enforce any rights of Borrower under any Related Contracts or
otherwise prepare and preserve Collateral for disposition in any manner and to
the extent Agent deems appropriate. In furtherance of Agent's rights hereunder,
Borrower hereby grants to Agent an irrevocable, non-exclusive license
(exercisable without royalty or other payment by Agent) to use, license or
sublicense any patent, trademark, tradename, copyright or other intellectual
property in which Borrower now or hereafter has any right, title or interest,
together with the right of access to

                                     H-1-7
<PAGE>
all media in which any of the foregoing may be recorded or stored. In any case
where notice of any sale or disposition of any Collateral is required, Borrower
hereby agrees that seven (7) days notice of such sale or disposition is
reasonable.

     7. MISCELLANEOUS.

          (a) Notices. Except as otherwise specified herein, all notices,
     requests, demands, consents, instructions or other communications to or
     upon Borrower or Agent under this Security Agreement shall be given as
     provided in Paragraph 8.01 of the Credit Agreement.

          (b) Waivers; Amendments. Any term, covenant, agreement or condition of
     this Security Agreement may be amended or waived only as provided in the
     Credit Agreement. No failure or delay by Agent or any Lender in exercising
     any right hereunder shall operate as a waiver thereof or of any other right
     nor shall any single or partial exercise of any such right preclude any
     other further exercise thereof or of any other right. Unless otherwise
     specified in any such waiver or consent, a waiver or consent given
     hereunder shall be effective only in the specific instance and for the
     specific purpose for which given.

          (c) Successors and Assigns. This Security Agreement shall be binding
     upon and inure to the benefit of Agent, the Lenders and Borrower and their
     respective successors and assigns; provided, however, that Agent, the
     Lenders and Borrower may sell, assign and delegate their respective rights
     and obligations hereunder only as permitted by the Credit Agreement. Agent
     and the Lenders may disclose this Security Agreement as provided in the
     Credit Agreement.

          (d) Partial Invalidity. If at any time any provision of this Security
     Agreement is or becomes illegal, invalid or unenforceable in any respect
     under the law or any jurisdiction, neither the legality, validity or
     enforceability of the remaining provisions of this Security Agreement nor
     the legality, validity or enforceability of such provision under the law of
     any other jurisdiction shall in any way be affected or impaired thereby.

          (e) Cumulative Rights, etc. The rights, powers and remedies of Agent
     and the Lenders under this Security Agreement shall be in addition to all
     rights, powers and remedies given to Agent and the Lenders by virtue of any
     applicable Governmental Rule, the Credit Agreement, any other Credit
     Document or any other agreement, all of which rights, powers, and remedies
     shall be cumulative and may be exercised successively or concurrently
     without impairing Agent's rights hereunder. Borrower waives any right to
     require Agent or any Lender to proceed against any Person or to exhaust any
     Collateral or to pursue any remedy in Agent's or such Lender's power.

                                     H-1-8
<PAGE>
          (f) Payments Free of Taxes, Etc. All payments made by Borrower under
     this Security Agreement shall be made by Borrower free and clear of and
     without deduction for any and all present and future taxes, levies,
     charges, deductions and withholdings. In addition, Borrower shall pay upon
     demand any stamp or other taxes, levies or charges of any jurisdiction with
     respect to the execution, delivery, registration, performance and
     enforcement of this Security Agreement. Upon request by Agent, Borrower
     shall furnish evidence satisfactory to Agent that all requisite
     authorizations and approvals by, and notices to and filings with,
     governmental authorities and regulatory bodies have been obtained and made
     and that all requisite taxes, levies and charges have been paid.

          (g) Borrower's Continuing Liability. Notwithstanding any provision of
     this Security Agreement or any other Credit Document or any exercise by
     Agent of any of its rights hereunder or thereunder (including, without
     limitation, any right to collect or enforce any Collateral), (i) Borrower
     shall remain liable to perform its obligations and duties in connection
     with the Collateral (including, without limitation, the Related Contracts
     and all other agreements relating to the Collateral) and (ii) neither Agent
     nor any Lender shall assume any liability to perform such obligations and
     duties or to enforce any of Borrower's rights in connection with the
     Collateral (including, without limitation, the Related Contracts and all
     other agreements relating to the Collateral).

          (h) Governing Law. This Security Agreement shall be governed by and
     construed in accordance with the laws of the State of California without
     reference to conflicts of law rules (except to the extent otherwise
     provided in the UCC).

                                     H-1-9
<PAGE>
     IN WITNESS WHEREOF, Borrower has caused this Security Agreement to be
executed as of the day and year first above written.

                                   ADAC LABORATORIES

                                   By:
                                      ------------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

                                     H-1-10
<PAGE>
                                  ATTACHMENT 1

                              TO SECURITY AGREEMENT

     All right, title and interest of Borrower, whether now owned or hereafter
acquired, in and to the following:

     (a) All equipment and fixtures (including, without limitation, all
diagnostic imaging equipment, furniture, vehicles and other machinery and office
equipment), together with all additions and accessions thereto and replacements
therefor (collectively, the "Equipment");

     (b) All inventory (including, without limitation, (i) all raw materials,
work in process and finished goods and (ii) all such goods which are returned to
or repossessed by Borrower), together with all additions and accessions thereto,
replacements therefor, products thereof and documents therefor (collectively,
the "Inventory");

     (c) All accounts, chattel paper, instruments, deposit accounts and other
rights to the payment of money (including, without limitation, general
intangibles and contract rights) (collectively, the "Receivables") and all
contracts, security agreements, leases, guaranties and other agreements
evidencing, securing or otherwise relating to the Receivables (collectively, the
"Related Contracts");

     (d) All certificated and uncertificated securities, security entitlements,
securities accounts, commodity contracts, commodity accounts and other
investment property;

     (e) All other general intangibles and contract rights not otherwise
described above (including, without limitation, (i) customer and supplier lists
and contracts, books and records, insurance policies, tax refunds, contracts for
the purchase of real or personal property; (ii) all patents, copyrights,
trademarks, tradenames and service marks, (iii) all licenses to use,
applications for, and other rights to, such patents, copyrights, trademarks,
tradenames and service marks, and (iv) all goodwill of Borrower);

     (f) All other property not otherwise described above (including, without
limitation, all money, letters of credit, documents and goods); and

     (g) All proceeds of the foregoing (including, without limitation, whatever
is receivable or received when Collateral or proceeds is sold, collected,
exchanged, returned, substituted or otherwise disposed of, whether such
disposition is voluntary or involuntary, including rights to payment and return
premiums and insurance proceeds under insurance with respect to any Collateral,
and all rights to payment with respect to any cause of action affecting or
relating to the Collateral).

                                    H-1[1]-1
<PAGE>
                                  ATTACHMENT 2

                              TO SECURITY AGREEMENT

                           NOTICE OF SECURITY INTEREST

                                       IN

                                 DEPOSIT ACCOUNT

                            __________, [19__] [20__]

[Name of Depositary Bank]
[Address of Depositary Bank]

          ADAC LABORATORIES, a California corporation ("Borrower") and ABN AMRO
     BANK N.V., a Netherlands public company acting through its San Francisco
     Representative Office, acting as agent for certain financial institutions
     (in such capacity, "Agent"), under that certain Amended and Restated Credit
     Agreement dated as of March 29, 1999 (the "Credit Agreement"), hereby
     notify you that Borrower has granted to Agent a security interest in all
     deposit accounts maintained by Borrower with you including, without
     limitation, the deposit accounts described below:

     Account            Depositor's              Account
      Number              Name                    Type

     Borrower and Agent authorize you to continue to allow Borrower to make
     deposits to, draw checks upon and otherwise withdraw funds from such
     deposit accounts (the "Deposit Accounts") without the consent of Agent
     until Agent shall instruct you otherwise.

          Borrower has authorized Agent to inform you when an Event of Default
     (as defined in the Credit Agreement) has occurred and is continuing and at
     such time instruct you to cease to permit any further payments or
     withdrawals from the Deposit Accounts by Borrower and/or to pay any or all
     amounts in the Deposit Accounts to Agent. Borrower authorizes and directs
     you to comply with all such instructions received by you from Agent without
     further inquiry on your part and

                                    H-1[2]-1
<PAGE>
     hereby agrees to indemnify and hold harmless you and your officers,
     directors and employees from and for any compliance by you with such
     instructions.

                                   ADAC LABORATORIES

                                   By:
                                      ------------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

                                   ABN AMRO BANK N.V.,
                                   as Agent

                                   By:
                                      ------------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

                                    H-1[2]-2
<PAGE>
                          ACKNOWLEDGEMENT AND AGREEMENT

                               OF DEPOSITARY BANK

     The undersigned depositary bank hereby acknowledges receipt of the above
notice and agrees with Borrower and Agent to comply with any instruction it may
receive from Agent in accordance therewith. The undersigned confirms to Agent
that the information set forth above regarding the Deposit Accounts is accurate,
that such Deposit Accounts are currently open and that the undersigned has no
prior notice of any other security interest, lien or interest in such Deposit
Accounts. The undersigned waives any right of setoff except for its right or
recoupment for returned items.

                                   By:
                                      ------------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

                                    H-1[2]-3
<PAGE>
                                  ATTACHMENT 3

                              TO SECURITY AGREEMENT

                           NOTICE OF SECURITY INTEREST

                                       IN

                         [SECURITIES][COMMODITY] ACCOUNT

                          __________ __, [19__] [2000]

[Name of Intermediary]
[Address of Intermediary]

     ADAC LABORATORIES, a California corporation ("Borrower") and ABN AMRO BANK
N.V., a Netherlands public company acting through its San Francisco
Representative Office, acting as agent for certain financial institutions (in
such capacity, "Agent"), under that certain Amended and Restated Credit
Agreement dated as of March 29, 1999 (the "Credit Agreement"), hereby notify you
that Borrower has granted to Agent a security interest in all
[securities][commodity] accounts maintained by Borrower with you including,
without limitation, the accounts described below:

         Account Number      Account Holder's  Name       Account  Type

        ________________        ________________        ________________

        ________________        ________________        ________________

        ________________        ________________        ________________

Until Agent shall instruct you otherwise pursuant to the following paragraph,
Borrower and Agent authorize you, without the consent of Agent, to continue to
comply with all directions of Borrower regarding the purchase, sale, transfer or
redemption of all securities, security entitlements, other investment property
and other financial assets for and in such accounts (the "Accounts").

     Borrower has authorized Agent to inform you when an Event of Default (as
defined in the Credit Agreement) has occurred and is continuing and at such time
direct you to cease to comply with any further directions of Borrower with
respect to the Accounts. After your receipt of any such notice, Borrower
authorizes and directs you, without the consent of Borrower or further inquiry
on your part, to comply with all directions of Agent

                                    H-1[3]-1
<PAGE>
regarding the Accounts, including, without limitation, any direction to (a)
purchase, sell, transfer or redeem any or of all securities, security
entitlements, other investment property or other financial assets for and in the
Accounts, (b) withdraw any or all funds from the Accounts and pay such funds to
Agent or any person designated by Agent or (c) transfer any or all of the
Accounts to the name of Agent or any person designated by Agent. Borrower hereby
agrees to indemnify and hold harmless you and your officers, directors and
employees from and for any compliance by you with such directions of Agent.

                                   ADAC LABORATORIES

                                   By:
                                      ------------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

                                   ABN AMRO BANK N.V.,
                                   as Agent

                                   By:
                                      ------------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

                                    H-1[3]-2
<PAGE>
                          ACKNOWLEDGEMENT AND AGREEMENT

                                 OF INTERMEDIARY

     The undersigned institution hereby acknowledges receipt of the above notice
and agrees with Borrower and Agent to comply with any direction it may receive
from Agent in accordance therewith without the consent of Borrower or further
inquiry.  The undersigned confirms to Agent that the information set forth above
regarding the Accounts is accurate, that such Accounts are currently open and
that the undersigned has no prior notice of any other security interest, lien or
interest in such Accounts.  The undersigned agrees that any lien or right of
setoff it may have in or against the accounts is subordinate to the security
interest of Agent therein.

                                   By:
                                      ------------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

                                    H-1[3]-3
<PAGE>
                                   EXHIBIT H-2

                     DOMESTIC SUBSIDIARY SECURITY AGREEMENT

     THIS DOMESTIC SUBSIDIARY SECURITY AGREEMENT (this "Security Agreement"),
dated as of September [A], 1999 is executed by [_______________], a
[_______________] ("Grantor"), in favor of ABN AMRO BANK N.V., a Netherlands
public company acting through its San Francisco Representative Office, acting as
agent (in such capacity, "Agent") for the financial institutions which are from
time to time parties to the Credit Agreement referred to in Recital A below
(collectively, the "Lenders").

                                    RECITALS

     A. Pursuant to an Amended and Restated Credit Agreement, dated as of March
29, 1999 as amended by that certain First Amendment to Amended and Restated
Credit Agreement dated as of August 17, 1999 (as amended, and as further amended
from time to time, the "Credit Agreement"), among Adac Laboratories, a
California corporation ("Borrower"), the Lenders and Agent, the Lenders have
agreed to extend certain credit facilities to Borrower upon the terms and
subject to the conditions set forth therein.

     B. The Lenders' obligations to continue to extend the credit facilities to
Borrower under the Credit Agreement are subject, among other conditions, to
receipt by Agent of this Security Agreement, duly executed by Grantor. Grantor
expects to derive substantial direct and indirect benefit from the transactions
contemplated by the Credit Agreement.

                                    AGREEMENT

     NOW, THEREFORE, in consideration of the above recitals and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Grantor hereby agrees with Agent, for the ratable benefit of the
Lenders and Agent, as follows:

     1. Definitions and Interpretation. When used in this Security Agreement,
the following terms shall have the following respective meanings:

          "Account Debtor" shall have the meaning given to that term in
     subparagraph 3(g) hereof.

          "Agent" shall have the meaning given to that term in the introductory
     paragraph hereof.

          "Borrower" shall have the meaning given to that term in the
     introductory paragraph hereof.

                                     H-2-1
<PAGE>
          "Collateral" shall have the meaning given to that term in paragraph 2
     hereof.

          "Collateral Certificate" shall have the meaning given to that term in
     the Credit Agreement.

          "Credit Agreement" shall have the meaning given to that term in
     Recital A hereof.

          "Depositary Bank" shall have the meaning given to that term in
     subparagraph 4(e) hereof.

          "Equipment" shall have the meaning given to that term in Attachment 1
     hereto.

          "Grantor" shall have the meaning given to that term in the
     introductory paragraph hereof.

          "Intermediary" shall have the meaning given to that term in
     subparagraph 4(f) hereof.

          "Inventory" shall have the meaning given to that term in Attachment 1
     hereto.

          "Lenders" shall have the meaning given to that term in the
     introductory paragraph hereof.

          "Receivables" shall have the meaning given to that term in Attachment
     1 hereto.

          "Related Contracts" shall have the meaning given to that term in
     Attachment 1 hereto.

          "Secured Obligations" shall have the meaning given to that term in the
     Credit Agreement.

          "UCC" shall mean the Uniform Commercial Code as in effect in the State
     of California from time to time.

Unless otherwise defined herein, all other capitalized terms used herein and
defined in the Credit Agreement shall have the respective meanings given to
those terms in the Credit Agreement, and all terms defined in the UCC shall have
the respective meanings given to those terms in the UCC.  The rules of
construction set forth in Section I of the Credit Agreement shall, to the extent
not inconsistent with the terms of this Security Agreement, apply to this
Security Agreement and are hereby incorporated by reference.

                                     H-2-2
<PAGE>
     2. GRANT OF SECURITY INTEREST. As security for the Secured Obligations,
Grantor hereby pledges and assigns to Agent (for the ratable benefit of the
Lenders and Agent) and grants to Agent (for the ratable benefit of the Lenders
and Agent) a security interest in all right, title and interest of Grantor in
and to the property described in Attachment 1 hereto, whether now owned or
hereafter acquired (collectively and severally, the "Collateral"), which
Attachment 1 is incorporated herein by this reference.

     3. REPRESENTATIONS AND WARRANTIES. Grantor represents and warrants to the
Lenders and Agent as follows:

          (a) Grantor is the legal and beneficial owner of the Collateral (or,
     in the case of after-acquired Collateral, at the time Grantor acquires
     rights in the Collateral, will be the legal and beneficial owner thereof).
     No other Person has (or, in the case of after-acquired Collateral, at the
     time Grantor acquires rights therein, will have) any right, title, claim or
     interest (by way of Lien, purchase option or otherwise) in, against or to
     the Collateral, other than Permitted Liens.

          (b) Agent has (or in the case of after-acquired Collateral, at the
     time Grantor acquires rights therein, will have) a first priority perfected
     security interest in the Collateral to the extent that a security interest
     in such Collateral can be perfected by the filing of a financing statement,
     and a security interest in all other Collateral, subject to no other Liens
     except for Permitted Liens.

          (c) All Equipment and Inventory are (i) located at the locations
     indicated in item 8 of the Collateral Certificate, (ii) in transit to such
     locations or (iii) in transit to a third party purchaser which will become
     obligated on a Receivable to Grantor upon receipt. Except for Equipment and
     Inventory referred to in clauses (ii) and (iii) of the preceding sentence,
     Grantor has exclusive possession and control of the Inventory and
     Equipment.

          (d) All Inventory has been (or, in the case of hereafter produced
     Inventory, will be) produced in compliance with all applicable Governmental
     Rules, including the Fair Labor Standards Act (if applicable).

          (e) Grantor keeps all records concerning the Receivables and the
     originals of all Related Contracts at its chief executive office located at
     the address set forth in item 2 of the Collateral Certificate.

          (f) Each Receivable is genuine and enforceable against the party
     obligated to pay the same (an "Account Debtor") free from any right of
     rescission, defense, setoff or discount.

                                     H-2-3
<PAGE>
          (g) Each insurance policy maintained by Grantor is validly existing
     and is in full force and effect. Grantor is not in default in any material
     respect under the provisions of any insurance policy, and there are no
     facts which, with the giving of notice or passage of time (or both), would
     result in such a default under any provision of any such insurance policy.

          (h) The information set forth in the Collateral Certificate is true,
     correct and accurate.

     4. COVENANTS. Grantor hereby agrees as follows:

          (a) Grantor, at Grantor's expense, shall promptly procure, execute and
     deliver to Agent all documents, instruments and agreements and perform all
     acts which are necessary, or which Agent may reasonably request, to
     establish, maintain, preserve, protect and perfect the Collateral, the Lien
     granted to Agent therein and the first priority of such Lien (subject to
     Permitted Liens) or to enable Agent to exercise and enforce its rights and
     remedies hereunder with respect to any Collateral. Without limiting the
     generality of the preceding sentence, Grantor shall (i) procure, execute
     and deliver to Agent all stock powers, endorsements, assignments, financing
     statements and other instruments of transfer requested by Agent, (ii)
     [deliver to Agent promptly upon receipt all originals of Collateral
     consisting of instruments, documents and chattel paper in amounts exceeding
     $1,000,000 (provided, however, that upon the occurrence of a Default, if
     requested by Agent, Grantor shall deliver to Agent promptly upon receipt
     all originals of Collateral consisting of instruments, documents and
     chattel paper in amounts of less than $1,000,000 but exceeding $100,000)]
     {for use in all Domestic Subsidiary Security Agreements other than ADAC
     Capital, LLC}[upon the occurrence of a Default, if requested by Agent,
     deliver to Agent promptly upon receipt all originals of Collateral
     consisting of instruments, documents and chattel paper in amounts exceeding
     $1,000,000] {for use in ADAC Capital, LLC Domestic Subsidiary Security
     Agreement}and (iii) take such actions as may be necessary or reasonably
     requested by Agent to perfect the Lien of Agent in any Collateral
     consisting of investment property (including taking the actions required by
     Subparagraph 4(f) hereof and, in those jurisdictions where appropriate,
     causing such Liens to be recorded or registered in the books of any
     financial intermediary or clearing corporation requested by Agent).

          (b) Grantor shall not use or permit any Collateral to be used in
     violation of (i) any provision of the Credit Agreement, this Security
     Agreement or any other Security Document, (ii) any applicable Governmental
     Rule where such use might have a Material Adverse Effect, or (iii) any
     policy of insurance covering the Collateral.

                                     H-2-4
<PAGE>
          (c) Grantor shall pay promptly when due all taxes and other
     governmental charges, all Liens and all other charges now or hereafter
     imposed upon, relating to or affecting any Collateral.

          (d) Without thirty (30) days prior written notice to Agent, Grantor
     shall not (i) change Grantor's name or place of business (or, if Grantor
     has more than one place of business, its chief executive office), or the
     office in which Grantor's records relating to Receivables or the originals
     of Related Contracts are kept, (ii) keep Collateral consisting of chattel
     paper and documents at any location other than its chief executive office
     set forth in item 2 of the Collateral Certificate, or (iii) keep Collateral
     consisting of Equipment, Inventory or other goods at any location other
     than the locations set forth in item 8 of the Collateral Certificate.

          (e) For each deposit account maintained by Grantor, Grantor shall (i)
     execute and deliver to the bank or other depository institution at which
     such deposit account is maintained (the "Depositary Bank") a Notice of
     Security Interest in the form of Attachment 2 hereto and (ii) use its best
     efforts to cause the Depositary Bank to execute and deliver to Agent an
     Acknowledgment and Agreement in the form set forth in such Notice of
     Security Interest (or in any other form acceptable to Agent in its sole
     discretion). Without ten (10) days prior written notice to Agent, Grantor
     shall not establish any deposit account not set forth in item 15 of the
     Collateral Certificate.

          (f) For each securities account and commodity account maintained by
     Grantor, Grantor shall (i) complete, execute and deliver to the bank,
     broker or other Person at which such account is maintained (the
     "Intermediary") a Notice of Security Interest in the form of Attachment 3
     hereto and (ii) cause the Intermediary to execute and deliver to Agent an
     Acknowledgment and Agreement in the form set forth in such Notice of
     Security Interest (or in any other form acceptable to Agent in its sole
     discretion). Without thirty (30) days prior written notice to Agent,
     Grantor shall not establish any securities account or commodity account not
     set forth in item 16 of the Collateral Certificate.

          (g) If requested by Agent, Grantor shall deposit, or cause to be
     deposited, all remittances, checks and other funds (in whatever form)
     received with respect to Receivables to a deposit account for which Grantor
     has complied with subparagraph 4(e) above and in which Agent has a first
     priority perfected security interest.

          (h) Grantor shall appear in and defend any action or proceeding which
     may affect its title to or Agent's interest in the Collateral if an adverse
     decision is reasonably likely to have a Material Adverse Effect.

                                     H-2-5
<PAGE>
          (i) If Agent gives value to enable Grantor to acquire rights in or the
     use of any Collateral, Grantor shall use such value for such purpose.

          (j) Grantor shall keep separate, accurate and complete records of the
     Collateral and shall provide Agent with such records and such other reports
     and information relating to the Collateral as Agent may reasonably request
     from time to time.

          (k) Grantor shall not surrender or lose possession of (other than to
     Agent), sell, encumber, lease, rent, option, or otherwise dispose of or
     transfer any Collateral or right or interest therein except as permitted in
     the Credit Agreement, and, notwithstanding any provision of the Credit
     Agreement, Grantor shall keep the Collateral free of all Liens except
     Permitted Liens.

          (l) Grantor shall, if requested by Agent, type, print or stamp
     conspicuously on the face of all original copies of all Collateral
     consisting of chattel paper and documents in excess of $100,000 not in the
     possession of Agent a legend satisfactory to Agent indicating that such
     chattel paper and documents are subject to the security interest granted
     hereby.

          (m) Grantor shall collect, enforce and receive delivery of the
     Receivables in accordance with past practice until otherwise notified by
     Agent.

          (n) Grantor shall comply with all material Requirements of Law
     applicable to Grantor which relate to the production, possession,
     operation, maintenance and control of the Collateral (including, without
     limitation, the Fair Labor Standards Act).

          (o) Grantor shall (i) carry and maintain insurance on the Collateral
     as required pursuant to Subparagraph 5.02(c) of the Credit Agreement, (ii)
     deliver to Agent from time to time, as Agent may request, schedules setting
     forth all insurance then in effect, and (iii) deliver to Agent copies of
     each policy of insurance which replaces, or evidences the renewal of, each
     existing policy of insurance at least fifteen (15) days prior to the
     expiration of such policy. Agent shall be named as additional insured or
     additional loss payee, as appropriate, on all liability and property
     insurance of Grantor and such policies shall contain such additional
     endorsements as shall be required by Agent. Prior to the occurrence and the
     continuance of an Event of Default, all proceeds of any property insurance
     paid as a result of any event or occurrence shall be paid to Grantor. All
     proceeds of any property insurance paid after the occurrence and during the
     continuance of an Event of Default shall be paid to Agent to be held as
     Collateral and applied as provided in the Credit Agreement or, at the
     election of the Required Lenders, returned to Grantor.

                                     H-2-6
<PAGE>
     5. AUTHORIZED ACTION BY AGENT. Grantor hereby irrevocably appoints Agent as
its attorney-in-fact and agrees that Agent may perform (but Agent shall not be
obligated to and shall incur no liability to Grantor or any third party for
failure so to do) any act which Grantor is obligated by this Security Agreement
to perform, and to exercise such rights and powers as Grantor might exercise
with respect to the Collateral, including, without limitation, the right to (a)
collect by legal proceedings or otherwise and endorse, receive and receipt for
all dividends, interest, payments, proceeds and other sums and property now or
hereafter payable on or on account of the Collateral; (b) enter into any
extension, reorganization, deposit, merger, consolidation or other agreement
pertaining to, or deposit, surrender, accept, hold or apply other property in
exchange for the Collateral; (c) insure, process, preserve and enforce the
Collateral; (d) make any compromise or settlement, and take any action it deems
advisable, with respect to the Collateral; (e) pay any Indebtedness of Grantor
relating to the Collateral; and (f) execute UCC financing statements and other
documents, instruments and agreements required hereunder; provided, however,
that Agent shall not act pursuant to this appointment or otherwise hereunder
unless an Event of Default has occurred and is continuing. Grantor agrees to
reimburse Agent upon demand for all reasonable costs and expenses, including
attorneys' fees, Agent may incur while acting as Grantor's attorney-in-fact
hereunder, all of which costs and expenses are included in the Secured
Obligations. Grantor agrees that such care as Agent gives to the safekeeping of
its own property of like kind shall constitute reasonable care of the Collateral
when in Agent's possession; provided, however, that Agent shall not be required
to make any presentment, demand or protest, or give any notice and need not take
any action to preserve any rights against any prior party or any other Person in
connection with the Secured Obligations or with respect to the Collateral.

     6. DEFAULT AND REMEDIES. Grantor shall be deemed in default under this
Security Agreement upon the occurrence and during the continuance of an Event of
Default, as that term is defined in the Credit Agreement. In addition to all
other rights and remedies granted to Agent by this Security Agreement, the
Credit Agreement, the other Credit Documents, the UCC and other applicable
Governmental Rules, Agent may, upon the occurrence and during the continuance of
any Event of Default, exercise any one or more of the following rights and
remedies: (a) collect, receive, appropriate or realize upon the Collateral or
otherwise foreclose or enforce Agent's security interests in any or all
Collateral in any manner permitted by applicable Governmental Rules or in this
Security Agreement; (b) notify any or all Account Debtors to make payments on
Receivables directly to Agent; (c) direct any Depositary Bank or Intermediary to
liquidate the account(s) maintained by it, pay all amounts payable in connection
therewith to Agent and/or deliver any proceeds thereof to Agent; (d) sell or
otherwise dispose of any or all Collateral at one or more public or private
sales, whether or not such Collateral is present at the place of sale, for cash
or credit or future delivery, on such terms and in such manner as Agent may
determine; (e) require Grantor to assemble the Collateral and make it available
to Agent at a place to be designated by Agent; (f)

                                     H-2-7
<PAGE>
enter onto any property where any Collateral is located and take possession
thereof with or without judicial process; and (g) prior to the disposition of
the Collateral, store, process, repair or recondition any Collateral consisting
of goods, perform any obligations and enforce any rights of Grantor under any
Related Contracts or otherwise prepare and preserve Collateral for disposition
in any manner and to the extent Agent deems appropriate. In furtherance of
Agent's rights hereunder, Grantor hereby grants to Agent an irrevocable,
non-exclusive license (exercisable without royalty or other payment by Agent) to
use, license or sublicense any patent, trademark, tradename, copyright or other
intellectual property in which Grantor now or hereafter has any right, title or
interest, together with the right of access to all media in which any of the
foregoing may be recorded or stored. In any case where notice of any sale or
disposition of any Collateral is required, Grantor hereby agrees that seven (7)
days notice of such sale or disposition is reasonable.

     7. AUTHORIZATIONS, WAIVERS, ETC.

          (a) Authorizations. Grantor authorizes Agent and the Lenders, in their
     discretion, without notice to Grantor, irrespective of any change in the
     financial condition of Borrower, Grantor or any other guarantor of the
     Secured Obligations since the date hereof, and without affecting or
     impairing in any way the liability of Grantor hereunder, from time to time
     to:

               (i) Create new Secured Obligations and renew, compromise, extend,
          accelerate or otherwise change the time for payment or performance of,
          or otherwise amend or modify the Credit Documents or change the terms
          of the Secured Obligations or any part thereof, including increase or
          decrease of the rate of interest thereon;

               (ii) Take and hold security for the payment or performance of the
          Secured Obligations and exchange, enforce, waive or release any such
          security; apply such security and direct the order or manner of sale
          thereof; and purchase such security at public or private sale;

               (iii) Otherwise exercise any right or remedy they may have
          against Borrower, Grantor, any other guarantor of the Secured
          Obligations or any security, including, without limitation, the right
          to foreclose upon any such security by judicial or nonjudicial sale;

               (iv) Settle, compromise with, release or substitute any one or
          more makers, endorsers or guarantors of the Secured Obligations; and

               (v) Assign the Secured Obligations, this Security Agreement or
          the other Credit Documents in whole or in part to the

                                     H-2-8
<PAGE>
          extent provided in the Credit Agreement and the other Credit
          Documents.

          (b)  Waivers.  Grantor hereby waives:

               (i) Any right to require Agent or any Lender to (A) proceed
          against Borrower or any other guarantor of the Secured Obligations,
          (B) proceed against or exhaust any security received from Borrower,
          Grantor, or any other guarantor of the Secured Obligations or
          otherwise marshall the assets of Borrower, Grantor, or any other
          guarantor of the Secured Obligations or (C) pursue any other remedy in
          Agent's or any Lender's power whatsoever;

               (ii) Any defense arising by reason of the application by Borrower
          of the proceeds of any borrowing;

               (iii) Any defense resulting from the absence, impairment or loss
          of any right of reimbursement, subrogation, contribution or other
          right or remedy of Grantor against Borrower, any other guarantor of
          the Secured Obligations or any security, whether resulting from an
          election by Agent or any Lender to foreclose upon security by
          nonjudicial sale, or otherwise;

               (iv) Any setoff or counterclaim of Borrower or any defense which
          results from any disability or other defense of Borrower or the
          cessation or stay of enforcement from any cause whatsoever of the
          liability of Borrower (including, without limitation, the lack of
          validity or enforceability of any of the Credit Documents);

               (v) Any defense based upon any law, rule or regulation which
          provides that the obligation of a surety must not be greater or more
          burdensome than the obligation of the principal;

               (vi) Until all obligations of Agent or any Lender to extend
          credit to Borrower have terminated and all of the Secured Obligations
          have been fully, finally and indefeasibly paid, any right of
          subrogation, reimbursement, indemnification or contribution and other
          similar right to enforce any remedy which Agent, the Lenders or any
          other Person now has or may hereafter have against Borrower on account
          of the Secured Obligations, and any benefit of, and any right to
          participate in, any security now or hereafter received by Agent, any
          Lender or any other Person on account of the Secured Obligations;

               (vii) All presentments, demands for performance, notices of
          non-performance, notices delivered under the Credit Documents,

                                     H-2-9
<PAGE>
          protests, notice of dishonor, and notices of acceptance of this
          Security Agreement and of the existence, creation or incurring of new
          or additional Secured Obligations and notices of any public or private
          foreclosure sale;

               (viii) The benefit of any statute of limitations to the extent
          permitted by law;

               (ix) Any appraisement, valuation, stay, extension, moratorium
          redemption or similar law or similar rights for marshalling;

               (x) Any right to be informed by Agent or any Lender of the
          financial condition of Borrower, any other guarantor of the Secured
          Obligations or any change therein or any other circumstances bearing
          upon the risk of nonpayment or nonperformance of the Secured
          Obligations;

               (xi) Until all obligations of Agent or any Lender to extend
          credit to Borrower have terminated and all of the Secured Obligations
          have been fully, finally and indefeasibly paid, any right to revoke
          this Security Agreement;

               (xii) Any defense arising from an election for the application of
          Section 1111(b)(2) of the United States Bankruptcy Code which applies
          to the Secured Obligations;

               (xiii) Any defense based upon any borrowing or grant of a
          security interest under Section 364 of the United States Bankruptcy
          Code;

               (xiv) Any right it may have to a fair value hearing to determine
          the size of a deficiency judgment following any foreclosure on any
          security for the Secured Obligations;

               (xv) All rights and defenses arising out of an election of
          remedies by Agent or any Lender, even though that election of
          remedies, such as a nonjudicial foreclosure with respect to security
          for a Secured Obligation, has destroyed Grantor's rights of
          subrogation and reimbursement against Borrower by the operation of
          Section 580d of the Code of Civil Procedure or otherwise; and

               (xvi) All other rights and defenses available to Grantor by
          reason of Sections 2787 to 2855, inclusive, Section 2899 or Section
          3433 of the California Civil Code or Section 3605 of the California
          Commercial Code.

                                     H-2-10
<PAGE>
          Without limiting the scope of any of the foregoing provisions of this
          Paragraph 5, and pursuant to the provisions of California Civil Code
          Section 2856, Grantor hereby further waives all rights and defenses
          that Grantor may have because the Secured Obligations are secured by
          real property.  This means, among other things:

                    (A) Agent or any Lender may collect from Grantor without
               first foreclosing on any real or personal property collateral
               pledged by Borrower.

                    (B) If Agent or any Lender forecloses on any real property
               collateral pledged by Borrower:

                         (1) The amount of the Secured Obligations may be
                    reduced only by the price for which that collateral is sold
                    at the foreclosure sale, even if the collateral is worth
                    more than the sale price.

                         (2) Agent or any Lender may collect from Grantor even
                    if Agent or any Lender, by foreclosing on the real property
                    collateral, has destroyed any right Grantor may have to
                    collect from Borrower.

          This is an unconditional and irrevocable waiver of any rights and
          defenses Grantor may have because the Secured Obligations are secured
          by real property. These rights and defenses include, but are not
          limited to, any rights or defenses based upon Section 580a, 580b,
          580d, or 726 of the California Code of Civil Procedure.

                                     H-2-11
<PAGE>
          (c) Financial Condition of Borrower, Etc. Grantor is fully aware of
     the financial condition and affairs of Borrower. Grantor has executed this
     Security Agreement without reliance upon any representation, warranty,
     statement or information concerning Borrower furnished to Grantor by Agent
     or any Lender and has, independently and without reliance on Agent or any
     Lender, and based on such documents and information as it has deemed
     appropriate, made its own appraisal of the financial condition and affairs
     of Borrower and of other circumstances affecting the risk of nonpayment or
     nonperformance of the Secured Obligations. Grantor is in a position to
     obtain, and assumes full responsibility for obtaining, any additional
     information about the financial condition and affairs of Borrower and of
     other circumstances affecting the risk of nonpayment or nonperformance of
     the Secured Obligations and will, independently and without reliance upon
     Agent or any Lender, and based on such documents and information as it
     shall deem appropriate at the time, continue to make its own appraisals and
     decisions in taking or not taking action in connection with this Security
     Agreement.

     8. Miscellaneous.

               (a) Notices. Except as otherwise provided herein, all notices,
          requests, demands, consents, instructions or other communications to
          or upon Grantor, any Lender or Agent under this Security Agreement or
          the other Credit Documents to which Grantor is a party shall be in
          writing and faxed, mailed or delivered, if to Grantor or Agent, at its
          respective facsimile number or address set forth below or, if to any
          Lender, at the address or facsimile number specified beneath the
          heading "Address for Notices" under the name of such Lender in
          Schedule I to the Credit Agreement (or to such other facsimile number
          or address for any party as indicated in any notice given by that
          party to the other parties). All such notices and communications shall
          be effective (i) when sent by overnight service of recognized
          standing, on the second Business Day following the deposit with such
          service; (ii) when mailed, first class postage prepaid and addressed
          as aforesaid through the United States Postal Service, upon receipt;
          (iii) when delivered by hand, upon delivery; and (iv) when faxed, upon
          confirmation of receipt.

          Grantor:    [__________________________]
                      c/o ADAC Laboratories
                      540 Alder Drive
                      Milpitas, CA  95035
                      Attn: Ronald Lindberg
                      Telephone: (408) 321-9100
                      Facsimile: (408) 321-9686

          Agent:      ABN AMRO Bank N.V.
                      101 California Street, Suite 4550

                                     H-2-12
<PAGE>
                      San Francisco, CA  94111-5812
                      Attn: Dianne Barkley
                      Telephone: (415) 984-3706
                      Facsimile: (415) 362-3524

                      with a copy to:

                      ABN AMRO Bank N.V.
                      1325 Avenue of the Americas, 9th Floor
                      New York, NY  10017
                      Attn:  Linda Boardman
                      Telephone:  (212) 314-1724
                      Fax No:  (212) 314-1709

               (b) Waivers; Amendments. Any term, covenant, agreement or
          condition of this Security Agreement may be amended or waived only as
          provided in the Credit Agreement. No failure or delay by Agent or any
          Lender in exercising any right hereunder shall operate as a waiver
          thereof or of any other right nor shall any single or partial exercise
          of any such right preclude any other further exercise thereof or of
          any other right. Unless otherwise specified in any such waiver or
          consent, a waiver or consent given hereunder shall be effective only
          in the specific instance and for the specific purpose for which given.

               (c) Successors and Assigns. This Security Agreement shall be
          binding upon and inure to the benefit of Agent, the Lenders and
          Grantor and their respective successors and assigns; provided,
          however, that Agent, the Lenders and Grantor may sell, assign and
          delegate their respective rights and obligations hereunder only as
          permitted by the Credit Agreement. Agent and the Lenders may disclose
          this Security Agreement as provided in the Credit Agreement.

               (d) Partial Invalidity. If at any time any provision of this
          Security Agreement is or becomes illegal, invalid or unenforceable in
          any respect under the law or any jurisdiction, neither the legality,
          validity or enforceability of the remaining provisions of this
          Security Agreement nor the legality, validity or enforceability of
          such provision under the law of any other jurisdiction shall in any
          way be affected or impaired thereby.

               (e) Cumulative Rights, etc. The rights, powers and remedies of
          Agent and the Lenders under this Security Agreement shall be in
          addition to all rights, powers and remedies given to Agent and the
          Lenders by virtue of any applicable Governmental Rule, the Credit
          Agreement, any other Credit Document or any other agreement, all of
          which rights, powers, and remedies shall be cumulative and may be
          exercised successively or concurrently without impairing Agent's
          rights hereunder. Grantor waives any right to

                                     H-2-13
<PAGE>
          require Agent or any Lender to proceed against any Person or to
          exhaust any Collateral or to pursue any remedy in Agent's or such
          Lender's power.

               (f) Payments Free of Taxes, Etc. All payments made by Grantor
          under this Security Agreement shall be made by Grantor free and clear
          of and without deduction for any and all present and future taxes,
          levies, charges, deductions and withholdings. In addition, Grantor
          shall pay upon demand any stamp or other taxes, levies or charges of
          any jurisdiction with respect to the execution, delivery,
          registration, performance and enforcement of this Security Agreement.
          Upon request by Agent, Grantor shall furnish evidence satisfactory to
          Agent that all requisite authorizations and approvals by, and notices
          to and filings with, governmental authorities and regulatory bodies
          have been obtained and made and that all requisite taxes, levies and
          charges have been paid.

               (g) Grantor's Continuing Liability. Notwithstanding any provision
          of this Security Agreement or any other Credit Document or any
          exercise by Agent of any of its rights hereunder or thereunder
          (including, without limitation, any right to collect or enforce any
          Collateral), (i) Grantor shall remain liable to perform its
          obligations and duties in connection with the Collateral (including,
          without limitation, the Related Contracts and all other agreements
          relating to the Collateral) and (ii) neither Agent nor any Lender
          shall assume any liability to perform such obligations and duties or
          to enforce any of Grantor's rights in connection with the Collateral
          (including, without limitation, the Related Contracts and all other
          agreements relating to the Collateral).

               (h) Governing Law. This Security Agreement shall be governed by
          and construed in accordance with the laws of the State of California
          without reference to conflicts of law rules (except to the extent
          otherwise provided in the UCC).

                                     H-2-14
<PAGE>
     IN WITNESS WHEREOF, Grantor has caused this Security Agreement to be
executed as of the day and year first above written.

                                   [_____________________________]

                                   By:
                                      ------------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

                                     H-2-15
<PAGE>
                                  ATTACHMENT 1

                              TO SECURITY AGREEMENT

     All right, title and interest of Grantor, whether now owned or hereafter
acquired, in and to the following:

     (a) All equipment and fixtures (including, without limitation, all
diagnostic imaging equipment, furniture, vehicles and other machinery and office
equipment), together with all additions and accessions thereto and replacements
therefor (collectively, the "Equipment");

     (b) All inventory (including, without limitation, (i) all raw materials,
work in process and finished goods and (ii) all such goods which are returned to
or repossessed by Grantor), together with all additions and accessions thereto,
replacements therefor, products thereof and documents therefor (collectively,
the "Inventory");

     (c) All accounts, chattel paper, instruments, deposit accounts and other
rights to the payment of money (including, without limitation, general
intangibles and contract rights) (collectively, the "Receivables") and all
contracts, security agreements, leases, guaranties and other agreements
evidencing, securing or otherwise relating to the Receivables (collectively, the
"Related Contracts");

     (d) All certificated and uncertificated securities, security entitlements,
securities accounts, commodity contracts, commodity accounts and other
investment property;

     (e) All other general intangibles and contract rights not otherwise
described above (including, without limitation, (i) customer and supplier lists
and contracts, books and records, insurance policies, tax refunds, contracts for
the purchase of real or personal property; (ii) all patents, copyrights,
trademarks, tradenames and service marks, (iii) all licenses to use,
applications for, and other rights to, such patents, copyrights, trademarks,
tradenames and service marks, and (iv) all goodwill of Grantor);

     (f) All other property not otherwise described above (including, without
limitation, all money, letters of credit, documents and goods); and

     (g) All proceeds of the foregoing (including, without limitation, whatever
is receivable or received when Collateral or proceeds is sold, collected,
exchanged, returned, substituted or otherwise disposed of, whether such
disposition is voluntary or involuntary, including rights to payment and return
premiums and insurance proceeds under insurance with respect to any Collateral,
and all rights to payment with respect to any cause of action affecting or
relating to the Collateral).

                                    H-2[1]-1
<PAGE>
                                  ATTACHMENT 2

                              TO SECURITY AGREEMENT

                           NOTICE OF SECURITY INTEREST

                                       IN

                                 DEPOSIT ACCOUNT

                            __________, [19__] [20__]

[Name of Depositary Bank]
[Address of Depositary Bank]

          [________________], a [____________________] ("Grantor") and ABN AMRO
     BANK N.V., a Netherlands public company acting through its San Francisco
     Representative Office, acting as agent for certain financial institutions
     (in such capacity, "Agent"), under that certain Domestic Subsidiary
     Security Agreement dated as of September [A], 1999 (the "Security
     Agreement"), hereby notify you that Grantor has granted to Agent a security
     interest in all deposit accounts maintained by Grantor with you including,
     without limitation, the deposit accounts described below:

          Account            Depositor's            Account
           Number               Name                 Type

       ______________      _______________      _________________
       ______________      _______________      _________________
       ______________      _______________      _________________
       ______________      _______________      _________________

     Grantor and Agent authorize you to continue to allow Grantor to make
     deposits to, draw checks upon and otherwise withdraw funds from such
     deposit accounts (the "Deposit Accounts") without the consent of Agent
     until Agent shall instruct you otherwise.

          Grantor has authorized Agent to inform you when an Event of Default
     (as defined in the Credit Agreement) has occurred and is continuing and at
     such time instruct you to cease to permit any further payments or
     withdrawals from the Deposit Accounts by Grantor and/or to pay any or all
     amounts in the Deposit Accounts to Agent. Grantor authorizes and directs
     you to comply with all such instructions received by you from Agent without
     further inquiry on your part and hereby agrees to indemnify and hold

                                    H-2[2]-1
<PAGE>
harmless you and your officers, directors and employees from and for any
compliance by you with such instructions.

                                   [_______________________]

                                   By:
                                      ------------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

                                   ABN AMRO BANK N.V.,
                                   as Agent

                                   By:
                                      ------------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

                                    H-2[2]-2
<PAGE>
                          ACKNOWLEDGEMENT AND AGREEMENT

                               OF DEPOSITARY BANK

     The undersigned depositary bank hereby acknowledges receipt of the above
notice and agrees with Grantor and Agent to comply with any instruction it may
receive from Agent in accordance therewith. The undersigned confirms to Agent
that the information set forth above regarding the Deposit Accounts is accurate,
that such Deposit Accounts are currently open and that the undersigned has no
prior notice of any other security interest, lien or interest in such Deposit
Accounts. The undersigned waives any right of setoff except for its right or
recoupment for returned items.

                                   By:
                                      ------------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

                                    H-2[2]-3
<PAGE>
                                  ATTACHMENT 3

                              TO SECURITY AGREEMENT

                           NOTICE OF SECURITY INTEREST

                                       IN

                         [SECURITIES][COMMODITY] ACCOUNT

                          __________ __, [19__] [2000]

[Name of Intermediary]
[Address of Intermediary]

     [________________], a [____________________] ("Grantor") and ABN AMRO BANK
N.V., a Netherlands public company acting through its San Francisco
Representative Office, acting as agent for certain financial institutions (in
such capacity, "Agent"), under that certain Domestic Subsidiary Security
Agreement dated as of September [A], 1999 (the "Security Agreement"), hereby
notify you that Grantor has granted to Agent a security interest in all
[securities][commodity] accounts maintained by Grantor with you including,
without limitation, the accounts described below:

         Account Number      Account Holder's  Name       Account  Type

       ________________         ________________        ________________

       ________________         ________________        ________________

       ________________         ________________        ________________

Until Agent shall instruct you otherwise pursuant to the following paragraph,
Grantor and Agent authorize you, without the consent of Agent, to continue to
comply with all directions of Grantor regarding the purchase, sale, transfer or
redemption of all securities, security entitlements, other investment property
and other financial assets for and in such accounts (the "Accounts").

     Grantor has authorized Agent to inform you when an Event of Default (as
defined in the Credit Agreement) has occurred and is continuing and at such time
direct you to cease to comply with any further directions of Grantor with
respect to the Accounts.  After your receipt of any such notice, Grantor
authorizes and directs you, without the consent of Grantor or further inquiry on
your part, to comply with all directions of Agent regarding

                                    H-2[3]-1
<PAGE>
the Accounts, including, without limitation, any direction to (a) purchase,
sell, transfer or redeem any or of all securities, security entitlements, other
investment property or other financial assets for and in the Accounts, (b)
withdraw any or all funds from the Accounts and pay such funds to Agent or any
person designated by Agent or (c) transfer any or all of the Accounts to the
name of Agent or any person designated by Agent. Grantor hereby agrees to
indemnify and hold harmless you and your officers, directors and employees from
and for any compliance by you with such directions of Agent.

                                   [___________________________]

                                   By:
                                      ------------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

                                   ABN AMRO BANK N.V.,
                                   as Agent

                                   By:
                                      ------------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

                                    H-2[3]-2
<PAGE>
                          ACKNOWLEDGEMENT AND AGREEMENT

                                 OF INTERMEDIARY

     The undersigned institution hereby acknowledges receipt of the above notice
and agrees with Grantor and Agent to comply with any direction it may receive
from Agent in accordance therewith without the consent of Grantor or further
inquiry. The undersigned confirms to Agent that the information set forth above
regarding the Accounts is accurate, that such Accounts are currently open and
that the undersigned has no prior notice of any other security interest, lien or
interest in such Accounts. The undersigned agrees that any lien or right of
setoff it may have in or against the accounts is subordinate to the security
interest of Agent therein.

                                   By:
                                      ------------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

                                    H-2[3]-3
<PAGE>

                                   EXHIBIT I-1

                           BORROWER SECURITY AGREEMENT

                            (INTELLECTUAL PROPERTY)

                  THIS BORROWER SECURITY AGREEMENT (INTELLECTUAL PROPERTY),
dated as of September [A], 1999 is executed by ADAC LABORATORIES, a California
corporation ("Borrower") in favor of ABN AMRO BANK N.V., a Netherlands public
company acting through its San Francisco Representative Office, acting as agent
(in such capacity, "Agent") for the financial institutions which are from time
to time parties to the Credit Agreement referred to in Recital A below
(collectively, the "Lenders").

                                    RECITALS

         A. Pursuant to an Amended and Restated Credit Agreement, dated as of
March 29, 1999 as amended by that certain First Amendment to Amended and
Restated Credit Agreement dated as of August 17, 1999 (as amended, and as
further amended from time to time, the "Credit Agreement"), among Borrower,
the Lenders and Agent, the Lenders have agreed to extend certain credit
facilities to Borrower upon the terms and subject to the conditions set forth
therein.

         B. The Lenders' obligations to continue to extend the credit
facilities to Borrower under the Credit Agreement are subject, among other
conditions, to receipt by Agent of this Security Agreement duly executed by
Borrower.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the above recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Borrower hereby agrees with Agent, for the ratable benefit of
the Lenders and Agent, as follows:

         1. DEFINITIONS AND INTERPRETATION. When used in this Security
Agreement, the following terms shall have the following respective meanings:

         "Agent" shall have the meaning given to that term in the introductory
paragraph hereof.

         "Borrower" shall have the meaning given to that term in the
introductory paragraph hereof.

         "Collateral" shall have the meaning given to that term in paragraph 2
hereof.

                                     I-1-1

<PAGE>

         "Credit Agreement" shall have the meaning given to that term in Recital
     A hereof.

         "Copyright Office" shall mean the United States Copyright Office or any
     successor office or agency thereto.

         "Copyrights" shall have the meaning given to that term in Attachment 1
     hereto.

         "Lenders" shall have the meaning given to that term in the introductory
     paragraph hereof.

         "Mask Works" shall have the meaning given to that term in Attachment 1
     hereto.

         "Patent and Trademark Office" shall mean the United States Patent and
     Trademark Office or any successor office or agency thereto.

         "Patent Applications" shall mean all applications made by, or on behalf
     of, Borrower to the Patent and Trademark Office or to any similar
     office or agency of any foreign country or political subdivision
     thereof for the registration of Patents.

         "Patent Registrations" shall mean all Patents registered with the
     Patent and Trademark Office or with any similar office or agency of any
     foreign country or political subdivision thereof and all Patent
     Applications.

         "Patents" shall have the meaning given to that term in Attachment 1
     hereto.

         "Secured Obligations" shall have the meaning given to that term in the
     Credit Agreement.

         "Trade Secrets" shall have the meaning given to that term in
     Attachment 1 hereto.

         "Trademarks" shall have the meaning given to that term in Attachment 1
     hereto.

         "UCC" shall mean the Uniform Commercial Code as in effect in the State
     of California from time to time.

Unless otherwise defined herein, all other capitalized terms used herein and
defined in the Credit Agreement shall have the respective meanings given to
those terms in the Credit Agreement, and all terms defined in the UCC shall have
the respective meanings given to those terms in the UCC. The rules of
construction set forth in Section I of the Credit Agreement shall, to the extent
not inconsistent with the terms
                                    I-1-2

<PAGE>

of this Security Agreement, apply to this Security Agreement and are hereby
incorporated by reference.

         2. GRANT OF SECURITY INTEREST. As security for the Secured
Obligations, Borrower hereby pledges and assigns to Agent (for the ratable
benefit of the Lenders and Agent) and grants to Agent (for the ratable
benefit of the Lenders and Agent) a security interest in all right, title and
interest of Borrower in and to the property described in Attachment 1 hereto,
whether now owned or hereafter acquired (collectively and severally, the
"Collateral"), which Attachment 1 is incorporated herein by this reference.

         3. REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants
to the Lenders and Agent as follows:

              (a) Borrower is the legal and beneficial owner of the Collateral
         (or, in the case of after-acquired Collateral, at the time Borrower
         acquires rights in the Collateral, will be the beneficial owner
         thereof). No other Person has (or, in the case of after-acquired
         Collateral, at the time Borrower acquires rights therein, will have)
         any right, title, claim or interest (by way of Lien, purchase option
         or otherwise) in, against or to the Collateral, other than Permitted
         Liens.

              (b) Agent has (or in the case of after-acquired Collateral, at
         the time Borrower acquires rights therein, will have) a first
         priority perfected security interest in the Collateral, subject to
         no other Liens other than Permitted Liens; provided, however, that
         (i) the security interest of Agent may be subject to Permitted Liens
         and (ii) Agent must make the filings with the Patent and Trademark
         Office contemplated by this Security Agreement to perfect its
         security interest in Borrower's Patents and Trademarks registered
         with that office.

              (c) Borrower has the sole, full and unencumbered right, title
         and interest in and to (i) each of the Trademarks described in
         Schedule A to Attachment 1 hereto for the goods and services covered
         by the registrations thereof, (ii) each of the Patents described in
         Schedule B to Attachment 1 hereto, (iii) each of the Copyrights
         described in Schedule C to Attachment 1 hereto and (iv) each of the
         Mask Works described in Schedule D to Attachment 1 hereto. Any
         registrations for such Trademarks and Patents are valid and
         enforceable and in full force and effect and none of the Patents has
         been abandoned or dedicated. According to the records of the
         Copyright Office, all registered Copyrights and Mask Works are valid
         and enforceable and in full force and effect.

              (d) Borrower does not own any Patents, Trademarks, Copyrights
         or Mask Works registered in, or the subject of pending applications
         in, the

                                     I-1-3

<PAGE>

         Patent and Trademark Office or the Copyright Office, other than those
         described in Schedules A, B, C and D to Attachment 1 hereto.

              (e) To the best of Borrower's knowledge, no claim has been made
         by any third party and remains unresolved that any of the Patents,
         Trademarks, Copyrights or Mask Works is invalid and unenforceable or
         violates or may violate the rights of any Person.

              (f) Set forth in Schedule E to Attachment 1 hereto is a
         complete list of all material licenses of Patents, Trademarks,
         Copyrights, Mask Works and Trade Secrets which Borrower has granted
         to any Person.

              (g) Set forth in Schedule F to Attachment 1 hereto is a
         complete list of all licenses of Patents, Trademarks, Copyrights,
         Mask Works and Trade Secrets which any Person has granted to
         Borrower.

              (h) Borrower has obtained from each employee who may be
         considered the inventor of patentable inventions (invented within
         the scope of such employee's employment with Borrower) an agreement
         to assign to Borrower all rights to such inventions, including
         Patents.

              (i) Borrower has taken all commercially reasonable steps to
         protect the secrecy and the validity under applicable law of all
         material Trade Secrets.

         4. COVENANTS OF BORROWER. Borrower hereby agrees as follows:

              (a) Borrower, at Borrower's expense, shall promptly procure,
         execute and deliver to Agent all documents, instruments and
         agreements and perform all acts which are necessary, or which Agent
         may reasonably request, to establish, maintain, preserve, protect
         and perfect the Collateral, the Lien granted to Agent therein and
         the first priority of such Lien or to enable Agent to exercise and
         enforce its rights and remedies hereunder with respect to any
         Collateral. Without limiting the generality of the preceding
         sentence, Borrower shall (i) execute all notices of security
         interest for each relevant type of intellectual property in forms
         suitable for filing with the Patent and Trademark Office or the
         Copyright Office, as applicable, substantially in the forms of
         Attachments 2 and 3 hereto or other forms reasonably acceptable to
         Agent and (ii) take all commercially reasonable steps in any
         proceeding before the Patent and Trademark Office, the Copyright
         Office or any similar office or agency in any other country or any
         political subdivision thereof, to diligently prosecute or maintain,
         as applicable, each application and registration of material
         Patents, Trademarks, Copyrights and Mask Works, including filing of
         renewals, affidavits of use, affidavits of incontestability and
         opposition, interference and cancellation proceedings (except to the
         extent that dedication,
                                     I-1-4

<PAGE>
         abandonment or invalidation is permitted hereunder or would not be
         reasonably likely to have a Material Adverse Effect).

              (b) Borrower shall not use any Collateral or permit any
         Collateral to be used in violation of (i) any provision of the
         Credit Agreement, this Security Agreement or any other Credit
         Document, (ii) any applicable Governmental Rule or Contractual
         Obligation where such use could reasonably be expected to have a
         Material Adverse Effect, or (iii) any policy of insurance covering
         the Collateral where such use is reasonably likely to have a
         Material Adverse Effect.

              (c) Borrower shall pay promptly when due all taxes and other
         governmental charges, all Liens and all other charges now or
         hereafter imposed upon, relating to or affecting any Collateral.

              (d) Borrower shall appear in and defend any action or
         proceeding which may affect its title to or Agent's security
         interest in the Collateral if an adverse decision is reasonably
         likely to have a Material Adverse Effect.

              (e) Borrower shall keep separate, accurate and complete records
         of the Collateral and shall permit Agent to examine and make copies
         of such records and provide such reports and information relating to
         the Collateral as Agent may reasonably request from time to time.

              (f) Borrower shall not surrender or lose possession of (other
         than to Agent), sell, encumber, lease, rent, option, license or
         otherwise dispose of or transfer any Collateral or right or interest
         therein except as permitted in the Credit Agreement, and Borrower
         shall keep the Collateral free of all Liens except Permitted Liens.

              (g) Borrower (either directly or through licensees) will make
         commercially reasonable efforts to continue to use the Trademarks
         which are material to Borrower's business or operations in
         connection with each and every trademark class of goods or services
         applicable to its current line of products or services as reflected
         in its current catalogs, brochures, price lists or similar materials
         in order to maintain such Trademarks in full force and effect free
         from any claim of abandonment for nonuse, and Borrower will not (and
         will not permit any licensee thereof to) do any act or knowingly
         omit to do any act whereby Borrower's rights in any such material
         Trademark is reasonably likely to become invalidated. Borrower will
         not do any act, or omit to do any act, whereby the Patents or Patent
         Registrations which are material to Borrower's business or
         operations may become abandoned or dedicated or the remedies
         available against potential infringers weakened if such action or
         omission would be reasonably likely to have a Material Adverse
         Effect and shall notify Agent immediately if it knows of any reason
         or has reason to know that any such Patent Registration may become

                                     I-1-5

<PAGE>

         abandoned or dedicated. Borrower will not do any act or omit to do
         any act, whereby the Copyrights or Mask Works which are material to
         Borrower's business or operations may become abandoned or dedicated
         or the remedies available against potential infringers weakened if
         such action or omission would be reasonably likely to have a
         Material Adverse Effect, and shall notify Agent immediately if it
         knows of any reason or has reason to know that any such Copyright or
         Mask Work may become abandoned or dedicated.

              (h) Borrower will promptly notify Agent upon the filing, either
         by Borrower or through any agent, employee, licensee or designee, of
         (i) an application for the registration of any Patent, Trademark,
         Copyright or Mask Work with the Patent and Trademark Office or the
         Copyright Office or any similar office or agency in any other
         country or any political subdivision thereof, (ii) any assignment of
         any Patent or Trademark, which Borrower may acquire from a third
         party, with the Patent and Trademark Office or any similar office or
         agency in any other country or any political subdivision thereof, or
         (iii) any assignment of any Copyright or Mask Work, which Borrower
         may acquire from a third party, with the Copyright Office or any
         similar office or agency in any other country or any political
         subdivision thereof.

              (i) Borrower shall (i) make application to the Patent and
         Trademark Office to register any material unpatented but patentable
         inventions developed by Borrower or its employees (within the scope
         of their employment), unless Borrower, in the exercise of its
         prudent business judgment, deems any such Patent not to have any
         significant commercial value or determines that its rights
         thereunder are better preserved as a Trade Secret, (ii) make
         application to the Patent and Trademark Office to register any
         registerable but unregistered material Trademarks used by Borrower
         in connection with its products or services unless Borrower in the
         exercise of its prudent business judgment, deems any such Trademark
         not to have any significant commercial value, and (iii) make
         application to the Copyright Office to register any material
         unregistered Copyright or Mask Work to which Borrower has rights
         unless Borrower in the exercise of its prudent business judgment,
         deems any such Copyright or Mask Work not to have any significant
         commercial value or determines that its rights thereunder are better
         protectable as a Trade Secret.

              (j) Borrower shall (i) use proper statutory notice in connection
         with its use of the Trademarks, Copyrights and Mask Works,
         (ii) maintain consistent standards of quality in its manufacture of
         products sold under the Trademarks or provision of services in
         connection with the Trademarks, and (iii) take all commercially
         reasonable steps to protect the secrecy and the validity under
         applicable law of all material Trade Secrets.

                                     I-1-6

<PAGE>
              (k) If any Executive Officer of Borrower learns of any use by
         any Person of any term or design likely to cause confusion with any
         Trademark, Borrower shall promptly notify Agent of such use and of
         all steps taken and to be taken to remedy any infringement of such
         Trademark.

              (l) Borrower shall maintain with each employee who may have
         access to any material Trade Secrets of Borrower an agreement by
         which such employee agrees not to disclose such Trade Secrets and
         with each employee who may be the inventor of patentable inventions
         (invented within the scope of such employee's employment) an
         invention assignment agreement requiring such employee to assign all
         rights to such inventions, including, patents and patent
         applications, to Borrower and further requiring such employee to
         cooperate fully with Borrower, its successors in interest, including
         Agent, and their counsel, in the prosecution of any patent
         application or in any litigation involving the invention, whether
         such cooperation is required during such employee's employment with
         Borrower or after the termination of such employment.

         5. AUTHORIZED ACTION BY AGENT. Borrower hereby irrevocably appoints
Agent as its attorney-in-fact and agrees that Agent may perform (but Agent
shall not be obligated to and shall incur no liability to Borrower or any
third party for failure so to do) any act which Borrower is obligated by this
Security Agreement to perform, and to exercise such rights and powers as
Borrower might exercise with respect to the Collateral, including, without
limitation, the right to (a) collect by legal proceedings or otherwise and
endorse, receive and receipt for all royalties, payments, proceeds and other
sums and property now or hereafter payable on or on account of the Collateral;
(b) enter into any extension, reorganization, deposit, merger, consolidation or
other agreement pertaining to, or deposit, surrender, accept, hold or apply
other property in exchange for the Collateral; (c) insure, process, preserve and
enforce the Collateral; (d) make any compromise or settlement, and take any
action it deems advisable, with respect to the Collateral; (e) pay any
indebtedness of Borrower relating to the Collateral; and (f) execute UCC
financing statements and other documents, instruments and agreements required
hereunder; provided, however, that Agent shall exercise such powers only after
the occurrence and during the continuance of an Event of Default. In furtherance
of the powers granted in this paragraph 5, Borrower shall execute and deliver to
Agent a Special Power of Attorney in the form of Attachment 4 hereto. Borrower
agrees to reimburse Agent upon demand for all reasonable costs and expenses,
including reasonable attorneys' fees, Agent may incur while acting as Borrower's
attorney-in-fact hereunder, all of which costs and expenses are included in the
Secured Obligations. Borrower agrees that such care as Agent gives to the
safekeeping of its own property of like kind shall constitute reasonable care of
the Collateral when in Agent's possession; provided, however, that Agent shall
not be required to make any presentment, demand or protest, or give any notice
and need not take any

                                     I-1-7

<PAGE>

action to preserve any rights against any prior party or any other Person
in connection with the Secured Obligations or with respect to the Collateral.

         6. DEFAULT AND REMEDIES. Borrower shall be deemed in default under
this Security Agreement upon the occurrence and during the continuance of an
Event of Default, as that term is defined in the Credit Agreement. In
addition to all other rights and remedies granted to Agent by this Security
Agreement, the Credit Agreement, the other Credit Documents, the UCC and
other applicable Governmental Rules, Agent may, upon the occurrence and
during the continuance of any Event of Default, exercise any one or more of
the following rights and remedies: (a) collect, receive, appropriate or
realize upon the Collateral or otherwise foreclose or enforce Agent's
security interests in any or all Collateral in any manner permitted by
applicable Governmental Rules or in this Security Agreement; (b) notify any
or all licensees to make payments on Receivables directly to Agent; (c) sell
or otherwise dispose of any or all Collateral at one or more public or
private sales, whether or not such Collateral is present at the place of
sale, for cash or credit or future delivery, on such commercially reasonable
terms and in such commercially reasonable manner as Agent may determine; (d)
upon ten (10) Business Days' prior notice to Borrower, direct Borrower not to
make any further use of the Patents, the Trademarks (or any mark similar
thereto), the Copyrights (or any work deriving therefrom), or the Mask Works
for any purpose; (e) upon ten (10) Business Days' prior notice to Borrower,
license, whether general, special or otherwise, and whether on an exclusive
or nonexclusive basis, any of the Patents, Trademarks, Copyrights or Mask
Works, throughout the world for such term or terms, on such conditions, and
in such manner, as Agent shall in its sole discretion determine; (f) enforce
(and upon notice to Borrower have the exclusive right to enforce) against any
licensee or sublicensee all rights and remedies of Borrower in, to and under
any one or more license agreements with respect to the Collateral (without
assuming any obligations or liability thereunder), and take or refrain from
taking any action under any thereof; and (g) in addition to the foregoing, in
order to implement the assignment, sale or other disposal of any of the
Collateral, pursuant to the authority granted in paragraph 5 hereof, execute
and deliver on behalf of Borrower, upon five (5) Business Days' prior notice
to Borrower, one or more instruments of assignment of the Patents,
Trademarks, Copyrights or Mask Works (or any application or registration
thereof), in form suitable for filing, recording or registration in any
country.

         7.       INDEMNIFICATION AND RELEASE.

               (a) Borrower assumes all responsibility and liability arising
         from the use of the Patents, Trademarks, Copyrights and Mask Works,
         and Borrower hereby indemnifies and holds Agent, each other Agent
         and each Lender and their respective directors, officers, employees,
         agents and any of their respective Affiliates ("Indemnitees")
         harmless from and against any claim, suit, loss, damage or expense
         (including reasonable attorneys' fees and

                                     I-1-8

<PAGE>

         expenses) arising out of or in connection with any alleged
         infringement of any patent, trademark, service mark, trade name,
         trade secret, copyright or mask work of a third party or alleged
         defect in any product manufactured, promoted or sold by Borrower (or
         any Affiliate of Borrower) in connection with any Patent, Trademark,
         Copyright or Mask Work or out of the manufacture, promotion, labeling,
         sale or advertisement of any product or service by Borrower (or any
         Affiliate of Borrower); provided, however, that the foregoing indemnity
         shall not extend to any use by Agent or any Lender (or any of their
         respective Affiliates) of any Patent, Trademark, Copyright or Mask Work
         which constitutes gross negligence or willful misconduct. Borrower
         agrees that Agent, the Agent and the Lenders do not assume, and shall
         have no responsibility for, the payment of any sums due or to become
         due under any agreement or contract included in the Collateral or the
         performance of any obligations to be performed under or with respect to
         any such agreement or contract by Borrower, and Borrower hereby agrees
         to indemnify and hold each Indemnitee harmless with respect to any and
         all claims by any Person relating thereto.

              (b) Borrower agrees to indemnify and hold the Indemnitees
         harmless and against any claim, suit, loss, damage or expense
         (including reasonable attorneys' fees and expenses) arising out of
         or in connection with any action taken or omitted to be taken by
         Agent hereunder with respect to any license agreement of Borrower,
         other than actions taken or omitted to be taken through the gross
         negligence or willful misconduct of such Indemnities or any breach
         of this Agreement or the other Credit Documents.

              (c) Borrower agrees to indemnify and hold the Indemnitees
         harmless and against any claim, suit, loss, damage or expense
         (including reasonable attorneys' fees and expenses) arising out of
         or in connection with any claim, suit or proceeding instituted by
         Borrower or in which Borrower participates.

              (d) Borrower hereby releases the Indemnitees from any claims,
         causes of action and demands at any time arising out of or with
         respect to any actions taken or omitted to be taken by Agent under
         the powers of attorney granted in paragraph 5 hereof, other than
         actions taken or omitted to be taken through the gross negligence or
         willful misconduct of such Indemnitees or any breach of this
         Agreement or the other Credit Documents.

              (e) Borrower agrees to cause Agent to be named as an additional
         insured with respect to any policy of insurance held by Borrower
         from time to time covering product liability or intellectual
         property infringement risk.

              (f) Nothing contained in this Paragraph 7 shall, however, be
         deemed to require Borrower to indemnify or hold harmless any
         Indemnitee

                                     I-1-9

<PAGE>

         from any losses, costs, claims or damages arising from or relating
         to such Indemnitee's gross negligence or willful misconduct.

8.    MISCELLANEOUS.

     (a) NOTICES. Except as otherwise specified herein, all notices,
requests, demands, consents, instructions or other communications to
or upon Borrower or Agent under this Security Agreement shall be
given as provided in Paragraph 8.01 of the Credit Agreement.

     (b) WAIVERS; AMENDMENTS. Any term, covenant, agreement or
condition of this Security Agreement may be amended or waived only
as provided in the Credit Agreement. No failure or delay by Agent in
exercising any right hereunder shall operate as a waiver thereof or
of any other right nor shall any single or partial exercise of any
such right preclude any other further exercise thereof or of any
other right. Unless otherwise specified in any such waiver or
consent, a waiver or consent given hereunder shall be effective only
in the specific instance and for the specific purpose for which
given.

     (c) SUCCESSORS AND ASSIGNS. This Security Agreement shall be
binding upon and inure to the benefit of Agent, Borrower and the
Lenders and their respective successors and assigns; provided,
however, that Agent, the Lenders and Borrower may sell, assign and
delegate their respective rights and obligations hereunder only as
permitted by the Credit Agreement. The Lenders and Agent may
disclose this Security Agreement as provided in the Credit Agreement.

     (d) PARTIAL INVALIDITY. If at any time any provision of this
Security Agreement is or becomes illegal, invalid or unenforceable
in any respect under the law of any jurisdiction, neither the
legality, validity or enforceability of the remaining provisions of
this Security Agreement nor the legality, validity or enforceability
of such provision under the law of any other jurisdiction shall in
any way be affected or impaired thereby.

     (e) CUMULATIVE RIGHTS, ETC. The rights, powers and remedies of
Agent under this Security Agreement shall be in addition to all
rights, powers and remedies given to Agent and the Lenders by virtue
of any applicable Governmental Rule, the Credit Agreement, any other
Credit Document or any other agreement, all of which rights, powers,
and remedies shall be cumulative and may be exercised successively
or concurrently without impairing Agent's rights hereunder. Borrower
waives any right to require Agent or any Lender to proceed against
any Person or to exhaust any Collateral or to pursue any remedy in
Agent's or any Lender's power.

                                    I-1-10

<PAGE>

             (f) Payments Free of Taxes, Etc. All payments made by Borrower
         under this Security Agreement shall be made by Borrower free and
         clear of and without deduction for any and all present and future
         taxes, levies, charges, deductions and withholdings. In addition,
         Borrower shall pay upon demand any stamp or other taxes, levies or
         charges of any jurisdiction with respect to the execution, delivery,
         registration, performance and enforcement of this Security
         Agreement. Upon request by Agent, Borrower shall furnish evidence
         satisfactory to Agent that all requisite authorizations and
         approvals by, and notices to and filings with, governmental
         authorities and regulatory bodies have been obtained and made and
         that all requisite taxes, levies and charges have been paid.

              (g) Borrower's Continuing Liability. Notwithstanding any
         provision of this Security Agreement or any other Credit Document or
         any exercise by Agent of any of its rights hereunder or thereunder
         (including, without limitation, any right to collect or enforce any
         Collateral), (i) Borrower shall remain liable to perform its
         obligations and duties in connection with the Collateral and (ii)
         neither Agent nor any Lender shall assume or be considered to have
         assumed any liability to perform such obligations and duties or to
         enforce any of Borrower's rights in connection with the Collateral.

              (h) Governing Law. This Security Agreement shall be governed by
         and construed in accordance with the laws of the State of California
         without reference to conflicts of law rules (except to the extent
         otherwise provided in the UCC).
                                     I-1-11

<PAGE>

         IN WITNESS WHEREOF, Borrower and Agent have caused this Security
Agreement to be executed as of the day and year first above written.

                                       ADAC LABORATORIES

                                       By: ____________________________________
                                       Name: __________________________________
                                       Title: _________________________________

                                    I-1-12

<PAGE>

                                ATTACHMENT 1

                           TO SECURITY AGREEMENT

         All right, title and interest of Borrower, whether now owned or
hereafter acquired, in and to the following property:

         (a) All trademarks, trade names, trade styles and service marks, and
all prints and labels on which said trademarks, trade names, trade styles and
service marks have appeared or appear, and all designs and general
intangibles of like nature, now existing or hereafter adopted or acquired,
all right, title and interest therein and thereto, all registrations and
recordings thereof, including, (i) all applications, registrations and
recordings in the Patent and Trademark Office or in any similar office or
agency of the United States, any state thereof, or any foreign country or any
political subdivision thereof, all whether now owned or hereafter acquired by
Borrower, including those described in Schedule A to this Attachment 1, which
Schedule A is incorporated herein by this reference, and (ii) all reissues,
extensions or renewals thereof and all licenses thereof (collectively, the
"Trademarks");

         (b) All patentable inventions, patent rights, shop rights, letters
patent of the United States or any foreign country, all right, title and
interest therein and thereto, and all registrations and recordings thereof,
including (i) all Patent Registrations and recordings in the Patent and
Trademark Office or in any similar office or agency of the United States, any
state thereof or any foreign country or political subdivision thereof, all
whether now owned or hereafter acquired by Borrower, including those
described in Schedule B to this Attachment 1, which Schedule B is
incorporated herein by this reference, and (ii) all reissues, continuations,
continuations-in-part or extensions thereof and all licenses thereof
(collectively, the "Patents");

         (c) All copyrights including, without limitation, (i) all original
works of authorship fixed in any tangible medium of expression, all right,
title and interest therein and thereto, and all registrations and recordings
thereof, including all applications, registrations and recordings in the
Copyright Office or in any similar office or agency of the United States, any
state thereof, or any foreign country or any political subdivision thereof,
all whether now owned or hereafter acquired by Borrower, including those
described on Schedule C to this Attachment 1, which Schedule C is
incorporated herein by this reference, and (ii) all extensions or renewals
thereof and all licenses thereof (collectively, the "Copyrights");

         (d) All mask works including all series of related images, however
fixed or encoded, in final or intermediate form, having or representing the
predetermined, three dimensional pattern of metallic, insulating, or
semiconductor material present or removed from the layers of a semiconductor
chip product, in which series the relation of the images to one another is
that each image has the

                                   I-1[1]-1

<PAGE>

         pattern of the surface of one form of the semiconductor chip
         product, and all right, title and interest therein and thereto, and
         all registrations and recordings thereof, including all
         applications, registrations and recordings in the Copyright Office
         or in any similar office or agency of the United States, any state
         thereof, or any foreign country or any political subdivision
         thereof, all whether now owned or hereafter acquired by the
         Borrower, including those described on Schedule D to this Attachment
         1, which Schedule D is incorporated herein by this reference, and
         (ii) all extensions or renewals thereof and all licenses thereof
         (collectively, the "Mask Works");

              (e) All goodwill of Borrower's business symbolized by the
         Trademarks and all customer lists and other records of Borrower
         relating to the distribution of products or provision of services
         bearing or covered by the Trademarks;

              (f) All proprietary information, including formulas, patterns,
         compilations, programs, devices, methods, techniques or processes,
         that derives independent economic value, actual or potential, from
         not being generally known to, and not being readily ascertainable by
         proper means by other Persons who can obtain economic value from its
         disclosure or use, all whether now owned or hereafter acquired by
         the Borrower (collectively, the "Trade Secrets");

              (g) All claims by Borrower against any Person for past, present
         or future infringement of the Patents, Trademarks, Copyrights, Mask
         Works or Trade Secrets; and

              (h) All proceeds of the foregoing (including whatever is
         receivable or received when Collateral or proceeds is (are) sold,
         collected, exchanged, licensed or otherwise disposed of, whether
         such disposition is voluntary or involuntary, including rights to
         payment and return premiums and insurance proceeds under insurance
         with respect to any Collateral, and all rights to payment with
         respect to any cause of action affecting or relating to the
         Collateral).

                                   I-1[1]-2

<PAGE>

                                   SCHEDULE A

                                 TO ATTACHMENT 1

                              TO SECURITY AGREEMENT

                       TRADEMARKS AND TRADEMARK APPLICATIONS

                                   I-1[1]-3

<PAGE>

                                   SCHEDULE B

                                TO ATTACHMENT 1

                              TO SECURITY AGREEMENT

                          PATENTS AND PATENT APPLICATIONS
                                   I-1[1]-4

<PAGE>

                                  SCHEDULE C

                               TO ATTACHMENT 1

                             TO SECURITY AGREEMENT

                                 COPYRIGHTS

Registration No.          Jurisdiction         Date

                                   [NONE]
                                   I-1[1]-5

<PAGE>

                                  SCHEDULE D

                              TO ATTACHMENT 1

                            TO SECURITY AGREEMENT

                                 MASK WORKS

Registration No.          Jurisdiction         Date

                                   [NONE]
                                   I-1[1]-6

<PAGE>

                                  SCHEDULE E

                               TO ATTACHMENT 1

                            TO SECURITY AGREEMENT

                LICENSES GRANTED BY BORROWER TO THIRD PARTIES

                                   I-1[1]-7

<PAGE>

                                 SCHEDULE F

                              TO ATTACHMENT 1

                           TO SECURITY AGREEMENT

               LICENSES GRANTED BY THIRD PARTIES TO BORROWER

                                  I-1[1]-8

<PAGE>
                                  ATTACHMENT 2

                             TO SECURITY AGREEMENT

                            [SEPARATE INSTRUMENT FOR

                            EACH FORM OF COLLATERAL]

                           GRANT OF SECURITY INTEREST

                      [TRADEMARKS][COPYRIGHTS][MASK WORKS]

          THIS GRANT OF SECURITY INTEREST, dated as of September [A], 1999 is
     executed by ADAC LABORATORIES, a California corporation ("Borrower"), in
     favor of ABN AMRO BANK N.V., a Netherlands public company acting through
     its San Francisco Representative Office, acting as agent (in such capacity,
     "Agent") for the financial institutions which are from time to time parties
     to the Credit Agreement referred to in Recital A below (collectively, the
     "Lenders").

          A. Pursuant to an Amended and Restated Credit Agreement, dated as of
     March 29, 1999 (as amended from time to time, the "Credit Agreement"),
     among Borrower, the Lenders and Agent, the Lenders have agreed to extend
     certain credit facilities to Borrower upon the terms and subject to the
     conditions set forth therein.

          [B. Borrower has adopted, used and is using the trademarks, more
     particularly described on Schedules 1-A and 1-B annexed hereto and made a
     part hereof, which trademarks are registered or subject to an application
     for registration in the United States Patent and Trademark Office
     (collectively, the "Trademarks").]

          [B. Borrower owns the copyrights registered in the United States
     Copyright Office, more particularly described on Schedule 1-A annexed
     hereto and made a part hereof (collectively, the "Copyrights").]

          [B. Borrower owns the mask works registered in the United States
     Copyright Office, more particularly described on Schedule 1-A annexed
     hereto and made a part hereof (collectively, the "Mask Works").]

          C. Borrower has entered into a Security Agreement (Intellectual
     Property) dated the date hereof (the "Security Agreement") in favor of
     Agent (for the ratable benefit of the Lenders and Agent).

          [D. Pursuant to the Security Agreement, Borrower has granted to Agent
     (for the ratable benefit of the Lenders and Agent) a security interest in
     all right, title and interest of Borrower in and to the Trademarks,
     together with the goodwill of the business symbolized by the Trademarks and
     the customer lists and records related to the Trademarks and the
     applications and registrations thereof, and all proceeds thereof, including
     any and all causes of action which may exist by reason

                                    I-1[2]-1
<PAGE>
     of infringement thereof (the "Collateral"), to secure the payment,
     performance and observance of the Secured Obligations, as defined in the
     Security Agreement.]

          [D. Pursuant to the Security Agreement, Borrower has granted to Agent
     (for the ratable benefit of the Lenders and Agent) a security interest in
     all right, title and interest of Borrower in and to the Copyrights and the
     registrations thereof, together with any renewals or extensions thereof,
     and all proceeds thereof, including any and all causes of action which may
     exist by reason of infringement thereof for the full term of the Copyrights
     (the "Collateral"), to secure the prompt payment, performance and
     observance of the Secured Obligations, as defined in the Security
     Agreement.]

          [D. Pursuant to the Security Agreement, Borrower has granted to Agent
     (for the ratable benefit of the Lenders and Agent) a security interest in
     all right, title and interest of Borrower in and to the Mask Works and the
     registrations thereof, together with any renewals or extensions thereof,
     and all proceeds thereof, including any and all causes of action which may
     exist by reason of infringement thereof for the full term of the Mask Works
     (the "Collateral"), to secure the prompt payment, performance and
     observance of the Secured Obligations, as defined in the Security
     Agreement.]

          NOW, THEREFORE, for good and valuable consideration, receipt of which
     is hereby acknowledged, Borrower does hereby further grant to Agent a
     security interest in the Collateral to secure the prompt payment,
     performance and observance of the Secured Obligations.

          Borrower does hereby further acknowledge and affirm that the rights
     and remedies of Agent with respect to the security interest in the
     Collateral granted hereby are more fully set forth in the Security
     Agreement, the terms and provisions of which are hereby incorporated herein
     by reference as if fully set forth herein.

               Agent's address is:

               ABN AMRO BANK N.V.
               c/o ABN AMRO North America, Inc.
               101 California Street, Suite 4550
               San Francisco, CA 94111-5812
               Attn:  Maria Vickroy Peralta
               Telephone:  (415) 984-3704
               Fax No.: (415) 362-3524

                                    I-1[2]-2
<PAGE>
          IN WITNESS WHEREOF, Borrower has caused this Agreement to be executed
     as of the day and year first above written.

                                   ADAC LABORATORIES

                                   By:
                                      ------------------------------------------
                                      Name:
                                           -------------------------------------
                                      Title:
                                            ------------------------------------

                                    I-1[2]-3
<PAGE>
     STATE OF CALIFORNIA                 )
                                         )
     COUNTY OF                             )

          On, ____________ before me, ____________________, personally appeared
     _________________________________, personally known to me (or proved to me
     on the basis of satisfactory evidence) to be the person(s) whose name(s)
     is/are subscribed to the within instrument and acknowledged to me that
     he/she/they executed the same in her/her/their authorized capacity(ies),
     and that by his/her/their signature(s) on such instrument the person or
     entity on behalf of which the person(s) acted executed the instrument.

          WITNESS my hand and official seal.

Signature                                             (Seal)

                                    I-1[2]-4
<PAGE>
                   SCHEDULE 1-A TO GRANT OF SECURITY INTEREST

                                   TRADEMARKS

                   SCHEDULE 1-B TO GRANT OF SECURITY INTEREST

                             TRADEMARK APPLICATIONS

     Mark                       Application Date                 Application No.

                                    I-1[2]-5
<PAGE>
                   SCHEDULE 1-A TO GRANT OF SECURITY INTEREST

                                   COPYRIGHTS

Description                     Registration Date               Registration No.

                   SCHEDULE 1-A TO GRANT OF SECURITY INTEREST

                                   MASK WORKS

Description                     Registration Date               Registration No.

                                    I-1[2]-6
<PAGE>
                                  ATTACHMENT 3

                             TO SECURITY AGREEMENT

                           GRANT OF SECURITY INTEREST

                                   (PATENTS)

          THIS GRANT OF SECURITY INTEREST, dated as of September [A], 1999 is
     executed by ADAC LABORATORIES, a California corporation ("Borrower"), in
     favor of ABN AMRO BANK N.V., a Netherlands public company acting through
     its San Francisco Representative Office, acting as agent (in such capacity,
     "Agent") for the financial institutions which are from time to time parties
     to the Credit Agreement referred to in Recital A below (collectively, the
     "Lenders").

          A. Pursuant to an Amended and Restated Credit Agreement, dated as of
     August 17, 1999 (as amended from time to time, the "Credit Agreement"),
     among Borrower, the Lenders and Agent, the Lenders have agreed to extend
     certain credit facilities to Borrower upon the terms and subject to the
     conditions set forth therein.

          B. Borrower owns the letters patent, and/or applications for letters
     patent, of the United States and certain foreign countries, more
     particularly described on Schedules 1-A and 1-B annexed hereto and made a
     part hereof (collectively, the "Patents").

          C. Borrower has entered into a Security Agreement (Intellectual
     Property) dated the date hereof (the "Security Agreement") in favor of
     Agent (for the ratable benefit of the Lenders and Agent).

          D. Pursuant to the Security Agreement, Borrower has assigned and
     granted to Agent (for the ratable benefit of the Lenders and Agent) a
     security interest in all right, title and interest of Borrower in and to
     the Patents, together with any reissue, continuation, continuation-in-part
     or extension thereof, and all proceeds thereof, including any and all
     causes of action which may exist by reason of infringement thereof (the
     "Collateral"), to secure the prompt payment, performance and observance of
     the Secured Obligations, as defined in the Security Agreement;

          NOW, THEREFORE, for good and valuable consideration, receipt of which
     is hereby acknowledged, Borrower does hereby further assign, transfer and
     convey unto Agent and grant to Agent a security interest in the Collateral
     to secure the prompt payment, performance and observance of the Secured
     Obligations.

          Borrower does hereby further acknowledge and affirm that the rights
     and remedies of Agent with respect to the assignment of and security
     interest in the

                                    I-1[3]-1
<PAGE>
     Collateral made and granted hereby are more fully set forth in the Security
     Agreement, the terms and provisions of which are hereby incorporated herein
     by reference as if fully set forth herein.

          Agent's address is:

          ABN AMRO BANK N.V.
          c/o ABN AMRO North America, Inc.
          101 California Street, Suite 4550
          San Francisco, CA 94111-5812
          Attn:  Maria Vickroy Peralta
          Telephone:  (415) 984-3704
          Fax No.: (415) 362-3524

          IN WITNESS WHEREOF, Borrower has caused this Agreement to be executed
     as of the day and year first above written.

                                   ADAC LABORATORIES

                                   By:
                                      ------------------------------------------
                                      Name:
                                           -------------------------------------
                                      Title:
                                            ------------------------------------

                                    I-1[3]-2
<PAGE>
     STATE OF CALIFORNIA                 )
                                         )
     COUNTY OF                               )

          On _________, ___________ before me, ___________________, personally
     appeared _____________________________, personally known to me (or proved
     to me on the basis of satisfactory evidence) to be the person(s) whose
     name(s) is/are subscribed to the within instrument and acknowledged to me
     that he/she/they executed the same in her/her/their authorized
     capacity(ies), and that by his/her/their signature(s) on such instrument
     the person or entity on behalf of which the person(s) acted executed the
     instrument.

          WITNESS my hand and official seal.

Signature                                    (Seal)

                                    I-1[3]-3
<PAGE>
                   SCHEDULE 1-A TO GRANT OF SECURITY INTEREST

                                    PATENTS

                   SCHEDULE 1-B TO GRANT OF SECURITY INTEREST

                              PATENT APPLICATIONS

                                Application No.

                                    I-1[3]-4
<PAGE>
                                  ATTACHMENT 4

                             TO SECURITY AGREEMENT

                           SPECIAL POWER OF ATTORNEY

     STATE OF CALIFORNIA                 )
                                         )  ss.:
     COUNTY OF                                   )

          KNOW ALL PERSONS BY THESE PRESENTS, THAT ADAC LABORATORIES, a
     California corporation ("Borrower"), pursuant to a Security Agreement
     (Intellectual Property), dated the date hereof (the "Security Agreement"),
     between Borrower and ABN AMRO BANK N.V., as agent (for the ratable benefit
     of the Lenders and Agent) (jointly in such capacities, "Agent") under that
     certain Amended and Restated Credit Agreement dated as of March 29, 1999
     (as amended from time to time, the "Credit Agreement") among Borrower, the
     Lenders and Agent, hereby appoints and constitutes Agent its true and
     lawful attorney in fact, with full power of substitution, and with full
     power and authority to perform the following acts on behalf of Borrower
     following the occurrence and during the continuation of an Event of Default
     (as defined in the Credit Agreement):

          1. For the purpose of assigning, selling, licensing or otherwise
     disposing of all right, title and interest of Borrower in and to any
     letters patent of the United States or any other country or political
     subdivision thereof, and all registrations, recordings, reissues,
     continuations, continuations-in-part and extensions thereof, and all
     pending applications therefor, and for the purpose of the recording,
     registering and filing of, or accomplishing any other formality with
     respect to, the foregoing, to execute and deliver any and all agreements,
     documents, instruments of assignment or other papers necessary or advisable
     to effect such purpose;

          2. For the purpose of assigning, selling, licensing or otherwise
     disposing of all right, title and interest of Borrower in and to any
     trademarks, trade names, trade styles and service marks, and all
     registrations, recordings, reissues, extensions and renewals thereof, and
     all pending applications therefor, and for the purpose of the recording,
     registering and filing of, or accomplishing any other formality with
     respect to, the foregoing, to execute and deliver any and all agreements,
     documents, instruments of assignment or other papers necessary or advisable
     to effect such purpose;

          3. For the purpose of assigning, selling, licensing or otherwise
     disposing of all right, title and interest of Borrower in and to any
     copyrights, and all registrations, recordings, reissues, extensions and
     renewals thereof, and all pending

                                    I-1[4]-1
<PAGE>
     applications therefor, and for the purpose of the recording, registering
     and filing of, or accomplishing any other formality with respect to, the
     foregoing, to execute and deliver any and all agreements, documents,
     instruments of assignment or other papers necessary or advisable to effect
     such purpose;

          4. For the purpose of assigning, selling, licensing or otherwise
     disposing of all right, title and interest of Borrower in and to any mask
     works, and all registrations, recordings, reissues, extensions and renewals
     thereof, and all pending applications therefor, and for the purpose of the
     recording, registering and filing of, or accomplishing any other formality
     with respect to, the foregoing, to execute and deliver any and all
     agreements, documents, instruments of assignment or other papers necessary
     or advisable to effect such purpose;

          5. For the purpose of evidencing and perfecting Agent's interest in
     any patent, trademark, copyright or mask work not previously assigned to
     Agent as security, or in any patent, trademark, copyright or mask work,
     which Borrower may acquire from a third party, and for the purpose of the
     recording, registering and filing of, or accomplishing any other formality
     with respect to, the foregoing, to execute and deliver any and all
     agreements, documents, instruments of assignment or other papers necessary
     or advisable to effect such purpose.

          6. To execute any and all documents, statements, certificates or other
     papers necessary or advisable in order to obtain the purposes described
     above as Agent may in its reasonable discretion determine.

          This power of attorney is made pursuant to the Security Agreement and
     takes effect solely for the purposes of thereof and is subject to the
     conditions thereof and may not be revoked until termination of the Security
     Agreement as provided therein.

     Dated: September [A], 1999

                                   ADAC LABORATORIES

                                   By:
                                      ------------------------------------------
                                      Name:
                                           -------------------------------------
                                      Title:
                                            ------------------------------------

                                    I-1[4]-2
<PAGE>
     STATE OF CALIFORNIA        )
                                )  ss.:
     COUNTY OF SAN FRANCISCO    )

          On __________, ______________ before me, _______________, personally
     appeared ________________________, personally known to me (or proved to me
     on the basis of satisfactory evidence) to be the person(s) whose name(s)
     is/are subscribed to the within instrument and acknowledged to me that
     he/she/they executed the same in her/her/their authorized capacity(ies),
     and that by his/her/their signature(s) on such instrument the person or
     entity on behalf of which the person(s) acted executed the instrument.

          WITNESS my hand and official seal.

Signature                                    (Seal)

                                    I-1[4]-3
<PAGE>
                                  EXHIBIT I-2

                     DOMESTIC SUBSIDIARY SECURITY AGREEMENT

                            (INTELLECTUAL PROPERTY)

          THIS DOMESTIC SUBSIDIARY SECURITY AGREEMENT (INTELLECTUAL PROPERTY),
     dated as of September [A], 1999 is executed by [_______________], a
     [_______________] ("Grantor"), in favor of ABN AMRO BANK N.V., a
     Netherlands public company acting through its San Francisco Representative
     Office, acting as agent (in such capacity, "Agent") for the financial
     institutions which are from time to time parties to the Credit Agreement
     referred to in Recital A below (collectively, the "Lenders").

                                    RECITALS

          A. Pursuant to an Amended and Restated Credit Agreement, dated as of
     March 29, 1999 as amended by that certain First Amendment to Amended and
     Restated Credit Agreement dated as of August 17, 1999 (as amended, and as
     further amended from time to time, the "Credit Agreement"), among Adac
     Laboratories, a California corporation ("Borrower"), the Lenders and Agent,
     the Lenders have agreed to extend certain credit facilities to Borrower
     upon the terms and subject to the conditions set forth therein.

          B. The Lenders' obligations to continue to extend the credit
     facilities to Borrower under the Credit Agreement are subject, among other
     conditions, to receipt by Agent of this Security Agreement duly executed by
     Grantor. Grantor expects to derive substantial direct and indirect benefit
     from the transactions contemplated by the Credit Agreement.

                                   AGREEMENT

          NOW, THEREFORE, in consideration of the above recitals and for other
     good and valuable consideration, the receipt and adequacy of which are
     hereby acknowledged, Grantor hereby agrees with Agent, for the ratable
     benefit of the Lenders and Agent, as follows:

               1. Definitions and Interpretation. When used in this Security
          Agreement, the following terms shall have the following respective
          meanings:

               "Agent" shall have the meaning given to that term in the
          introductory paragraph hereof.

               "Borrower" shall have the meaning given to that term in the
          Recital A hereof.

                                     I-2-1
<PAGE>
               "Collateral" shall have the meaning given to that term in
          paragraph 2 hereof.

               "Credit Agreement" shall have the meaning given to that term in
          Recital A hereof.

               "Copyright Office" shall mean the United States Copyright Office
          or any successor office or agency thereto.

               "Copyrights" shall have the meaning given to that term in
          Attachment 1 hereto.

               "Grantor" shall have the meaning given to that term in the
          introductory paragraph hereof.

               "Lenders" shall have the meaning given to that term in the
          introductory paragraph hereof.

               "Mask Works" shall have the meaning given to that term in
          Attachment 1 hereto.

               "Patent and Trademark Office" shall mean the United States Patent
          and Trademark Office or any successor office or agency thereto.

               "Patent Applications" shall mean all applications made by, or on
          behalf of, Grantor to the Patent and Trademark Office or to any
          similar office or agency of any foreign country or political
          subdivision thereof for the registration of Patents.

               "Patent Registrations" shall mean all Patents registered with the
          Patent and Trademark Office or with any similar office or agency of
          any foreign country or political subdivision thereof and all Patent
          Applications.

               "Patents" shall have the meaning given to that term in Attachment
          1 hereto.

               "Secured Obligations" shall have the meaning given to that term
          in the Credit Agreement.

               "Trade Secrets" shall have the meaning given to that term in
          Attachment 1 hereto.

               "Trademarks" shall have the meaning given to that term in
          Attachment 1 hereto.

               "UCC" shall mean the Uniform Commercial Code as in effect in the
          State of California from time to time.

                                     I-2-2
<PAGE>
     Unless otherwise defined herein, all other capitalized terms used herein
     and defined in the Credit Agreement shall have the respective meanings
     given to those terms in the Credit Agreement, and all terms defined in the
     UCC shall have the respective meanings given to those terms in the UCC. The
     rules of construction set forth in Section I of the Credit Agreement shall,
     to the extent not inconsistent with the terms of this Security Agreement,
     apply to this Security Agreement and are hereby incorporated by reference.

          2. Grant of Security Interest. As security for the Secured
     Obligations, Grantor hereby pledges and assigns to Agent (for the ratable
     benefit of the Lenders and Agent) and grants to Agent (for the ratable
     benefit of the Lenders and Agent) a security interest in all right, title
     and interest of Grantor in and to the property described in Attachment 1
     hereto, whether now owned or hereafter acquired (collectively and
     severally, the "Collateral"), which Attachment 1 is incorporated herein by
     this reference.

          3. Representations and Warranties. Grantor represents and warrants to
     the Lenders and Agent as follows:

               (a) Grantor is the legal and beneficial owner of the Collateral
          (or, in the case of after-acquired Collateral, at the time Grantor
          acquires rights in the Collateral, will be the beneficial owner
          thereof). No other Person has (or, in the case of after-acquired
          Collateral, at the time Grantor acquires rights therein, will have)
          any right, title, claim or interest (by way of Lien, purchase option
          or otherwise) in, against or to the Collateral, other than Permitted
          Liens.

               (b) Agent has (or in the case of after-acquired Collateral, at
          the time Grantor acquires rights therein, will have) a first priority
          perfected security interest in the Collateral, subject to no other
          Liens other than Permitted Liens; provided, however, that (i) the
          security interest of Agent may be subject to Permitted Liens and (ii)
          Agent must make the filings with the Patent and Trademark Office
          contemplated by this Security Agreement to perfect its security
          interest in Grantor's Patents and Trademarks registered with that
          office.

               (c) Grantor has the sole, full and unencumbered right, title and
          interest in and to (i) each of the Trademarks described in Schedule A
          to Attachment 1 hereto for the goods and services covered by the
          registrations thereof, (ii) each of the Patents described in Schedule
          B to Attachment 1 hereto, (iii) each of the Copyrights described in
          Schedule C to Attachment 1 hereto and (iv) each of the Mask Works
          described in Schedule D to Attachment 1 hereto. Any registrations for
          such Trademarks and Patents are valid and enforceable and in full
          force and effect and none of the Patents has been abandoned or
          dedicated. According to the records of the Copyright

                                     I-2-3
<PAGE>
          Office, all registered Copyrights and Mask Works are valid and
          enforceable and in full force and effect.

               (d) Grantor does not own any Patents, Trademarks, Copyrights or
          Mask Works registered in, or the subject of pending applications in,
          the Patent and Trademark Office or the Copyright Office, other than
          those described in Schedules A, B, C and D to Attachment 1 hereto.

               (e) To the best of Grantor's knowledge, no claim has been made by
          any third party and remains unresolved that any of the Patents,
          Trademarks, Copyrights or Mask Works is invalid and unenforceable or
          violates or may violate the rights of any Person.

               (f) Set forth in Schedule E to Attachment 1 hereto is a complete
          list of all material licenses of Patents, Trademarks, Copyrights, Mask
          Works and Trade Secrets which Grantor has granted to any Person.

               (g) Set forth in Schedule F to Attachment 1 hereto is a complete
          list of all licenses of Patents, Trademarks, Copyrights, Mask Works
          and Trade Secrets which any Person has granted to Grantor.

               (h) Grantor has obtained from each employee who may be considered
          the inventor of patentable inventions (invented within the scope of
          such employee's employment with Grantor) an agreement to assign to
          Grantor all rights to such inventions, including Patents.

               (i) Grantor has taken all commercially reasonable steps to
          protect the secrecy and the validity under applicable law of all
          material Trade Secrets.

          4. Covenants of Grantor. Grantor hereby agrees as follows:

               (a) Grantor, at Grantor's expense, shall promptly procure,
          execute and deliver to Agent all documents, instruments and agreements
          and perform all acts which are necessary, or which Agent may
          reasonably request, to establish, maintain, preserve, protect and
          perfect the Collateral, the Lien granted to Agent therein and the
          first priority of such Lien or to enable Agent to exercise and enforce
          its rights and remedies hereunder with respect to any Collateral.
          Without limiting the generality of the preceding sentence, Grantor
          shall (i) execute all notices of security interest for each relevant
          type of intellectual property in forms suitable for filing with the
          Patent and Trademark Office or the Copyright Office, as applicable,
          substantially in the forms of Attachments 2 and 3 hereto or other
          forms reasonable acceptable to Agent and (ii) take all commercially
          reasonable steps in any proceeding before the Patent and Trademark
          Office, the Copyright Office or any similar office or agency in any
          other country or any

                                     I-2-4
<PAGE>
          political subdivision thereof, to diligently prosecute or maintain, as
          applicable, each application and registration of material Patents,
          Trademarks, Copyrights and Mask Works, including filing of renewals,
          affidavits of use, affidavits of incontestability and opposition,
          interference and cancellation proceedings (except to the extent that
          dedication, abandonment or invalidation is permitted hereunder or
          would not be reasonably likely to have a Material Adverse Effect).

               (b) Grantor shall not use any Collateral or permit any Collateral
          to be used in violation of (i) any provision of the Credit Agreement,
          this Security Agreement or any other Credit Document, (ii) any
          applicable Governmental Rule or Contractual Obligation where such use
          could reasonably be expected to have a Material Adverse Effect, or
          (iii) any policy of insurance covering the Collateral where such use
          is reasonably likely to have a Material Adverse Effect.

               (c) Grantor shall pay promptly when due all taxes and other
          governmental charges, all Liens and all other charges now or hereafter
          imposed upon, relating to or affecting any Collateral.

               (d) Grantor shall appear in and defend any action or proceeding
          which may affect its title to or Agent's security interest in the
          Collateral if an adverse decision is reasonably likely to have a
          Material Adverse Effect.

               (e) Grantor shall keep separate, accurate and complete records of
          the Collateral and shall permit Agent to examine and make copies of
          such records and provide such reports and information relating to the
          Collateral as Agent may reasonably request from time to time.

               (f) Grantor shall not surrender or lose possession of (other than
          to Agent), sell, encumber, lease, rent, option, license or otherwise
          dispose of or transfer any Collateral or right or interest therein
          except as permitted in the Credit Agreement, and Grantor shall keep
          the Collateral free of all Liens except Permitted Liens.

               (g) Grantor (either directly or through licensees) will make
          commercially reasonable efforts to continue to use the Trademarks
          which are material to Grantor's business or operations in connection
          with each and every trademark class of goods or services applicable to
          its current line of products or services as reflected in its current
          catalogs, brochures, price lists or similar materials in order to
          maintain such Trademarks in full force and effect free from any claim
          of abandonment for nonuse, and Grantor will not (and will not permit
          any licensee thereof to) do any act or knowingly omit to do any act
          whereby Grantor's rights in any such material Trademark is reasonably
          likely to become invalidated. Grantor will not do any act, or omit to
          do any act, whereby the Patents or Patent Registrations which are

                                     I-2-5
<PAGE>
          material to Grantor's business or operations may become abandoned or
          dedicated or the remedies available against potential infringers
          weakened if such action or omission would be reasonably likely to have
          a Material Adverse Effect and shall notify Agent immediately if it
          knows of any reason or has reason to know that any such Patent
          Registration may become abandoned or dedicated. Grantor will not do
          any act or omit to do any act, whereby the Copyrights or Mask Works
          which are material to Grantor's business or operations may become
          abandoned or dedicated or the remedies available against potential
          infringers weakened if such action or omission would be reasonably
          likely to have a Material Adverse Effect, and shall notify Agent
          immediately if it knows of any reason or has reason to know that any
          such Copyright or Mask Work may become abandoned or dedicated.

               (h) Grantor will promptly notify Agent upon the filing, either by
          Grantor or through any agent, employee, licensee or designee, of (i)
          an application for the registration of any Patent, Trademark,
          Copyright or Mask Work with the Patent and Trademark Office or the
          Copyright Office or any similar office or agency in any other country
          or any political subdivision thereof, (ii) any assignment of any
          Patent or Trademark, which Grantor may acquire from a third party,
          with the Patent and Trademark Office or any similar office or agency
          in any other country or any political subdivision thereof, or (iii)
          any assignment of any Copyright or Mask Work, which Grantor may
          acquire from a third party, with the Copyright Office or any similar
          office or agency in any other country or any political subdivision
          thereof.

               (i) Grantor shall (i) make application to the Patent and
          Trademark Office to register any material unpatented but patentable
          inventions developed by Grantor or its employees (within the scope of
          their employment), unless Grantor, in the exercise of its prudent
          business judgment, deems any such Patent not to have any significant
          commercial value or determines that its rights thereunder are better
          preserved as a Trade Secret, (ii) make application to the Patent and
          Trademark Office to register any registerable but unregistered
          material Trademarks used by Grantor in connection with its products or
          services unless Grantor in the exercise of its prudent business
          judgment, deems any such Trademark not to have any significant
          commercial value, and (iii) make application to the Copyright Office
          to register any material unregistered Copyright or Mask Work to which
          Grantor has rights unless Grantor in the exercise of its prudent
          business judgment, deems any such Copyright or Mask Work not to have
          any significant commercial value or determines that its rights
          thereunder are better protectable as a Trade Secret.

                                     I-2-6
<PAGE>
               (j) Grantor shall (i) use proper statutory notice in connection
          with its use of the Trademarks, Copyrights and Mask Works, (ii)
          maintain consistent standards of quality in its manufacture of
          products sold under the Trademarks or provision of services in
          connection with the Trademarks, and (iii) take all commercially
          reasonable steps to protect the secrecy and the validity under
          applicable law of all material Trade Secrets.

               (k) If any Executive Officer of Grantor learns of any use by any
          Person of any term or design likely to cause confusion with any
          Trademark, Grantor shall promptly notify Agent of such use and of all
          steps taken and to be taken to remedy any infringement of such
          Trademark.

               (l) Grantor shall maintain with each employee who may have access
          to any material Trade Secrets of Grantor an agreement by which such
          employee agrees not to disclose such Trade Secrets and with each
          employee who may be the inventor of patentable inventions (invented
          within the scope of such employee's employment) an invention
          assignment agreement requiring such employee to assign all rights to
          such inventions, including, patents and patent applications, to
          Grantor and further requiring such employee to cooperate fully with
          Grantor, its successors in interest, including Agent, and their
          counsel, in the prosecution of any patent application or in any
          litigation involving the invention, whether such cooperation is
          required during such employee's employment with Grantor or after the
          termination of such employment.

          5. Authorized Action by Agent. Grantor hereby irrevocably appoints
     Agent as its attorney-in-fact and agrees that Agent may perform (but Agent
     shall not be obligated to and shall incur no liability to Grantor or any
     third party for failure so to do) any act which Grantor is obligated by
     this Security Agreement to perform, and to exercise such rights and powers
     as Grantor might exercise with respect to the Collateral, including,
     without limitation, the right to (a) collect by legal proceedings or
     otherwise and endorse, receive and receipt for all royalties, payments,
     proceeds and other sums and property now or hereafter payable on or on
     account of the Collateral; (b) enter into any extension, reorganization,
     deposit, merger, consolidation or other agreement pertaining to, or
     deposit, surrender, accept, hold or apply other property in exchange for
     the Collateral; (c) insure, process, preserve and enforce the Collateral;
     (d) make any compromise or settlement, and take any action it deems
     advisable, with respect to the Collateral; (e) pay any indebtedness of
     Grantor relating to the Collateral; and (f) execute UCC financing
     statements and other documents, instruments and agreements required
     hereunder; provided, however, that Agent shall exercise such powers only
     after the occurrence and during the continuance of an Event of Default. In
     furtherance of the powers granted in this paragraph 5, Grantor shall
     execute and deliver to Agent a Special Power of Attorney in the form of
     Attachment 4 hereto. Grantor agrees to reimburse Agent upon demand for all
     reasonable costs and expenses, including

                                     I-2-7
<PAGE>
     reasonable attorneys' fees, Agent may incur while acting as Grantor's
     attorney-in-fact hereunder, all of which costs and expenses are included in
     the Secured Obligations. Grantor agrees that such care as Agent gives to
     the safekeeping of its own property of like kind shall constitute
     reasonable care of the Collateral when in Agent's possession; provided,
     however, that Agent shall not be required to make any presentment, demand
     or protest, or give any notice and need not take any action to preserve any
     rights against any prior party or any other Person in connection with the
     Secured Obligations or with respect to the Collateral.

          6. Default and Remedies. Grantor shall be deemed in default under this
     Security Agreement upon the occurrence and during the continuance of an
     Event of Default, as that term is defined in the Credit Agreement. In
     addition to all other rights and remedies granted to Agent by this Security
     Agreement, the Credit Agreement, the other Credit Documents, the UCC and
     other applicable Governmental Rules, Agent may, upon the occurrence and
     during the continuance of any Event of Default, exercise any one or more of
     the following rights and remedies: (a) collect, receive, appropriate or
     realize upon the Collateral or otherwise foreclose or enforce Agent's
     security interests in any or all Collateral in any manner permitted by
     applicable Governmental Rules or in this Security Agreement; (b) notify any
     or all licensees to make payments on Receivables directly to Agent; (c)
     sell or otherwise dispose of any or all Collateral at one or more public or
     private sales, whether or not such Collateral is present at the place of
     sale, for cash or credit or future delivery, on such commercially
     reasonable terms and in such commercially reasonable manner as Agent may
     determine; (d) upon ten (10) Business Days' prior notice to Grantor, direct
     Grantor not to make any further use of the Patents, the Trademarks (or any
     mark similar thereto), the Copyrights (or any work deriving therefrom), or
     the Mask Works for any purpose; (e) upon ten (10) Business Days' prior
     notice to Grantor, license, whether general, special or otherwise, and
     whether on an exclusive or nonexclusive basis, any of the Patents,
     Trademarks, Copyrights or Mask Works, throughout the world for such term or
     terms, on such conditions, and in such manner, as Agent shall in its sole
     discretion determine; (f) enforce (and upon notice to Grantor have the
     exclusive right to enforce) against any licensee or sublicensee all rights
     and remedies of Grantor in, to and under any one or more license agreements
     with respect to the Collateral (without assuming any obligations or
     liability thereunder), and take or refrain from taking any action under any
     thereof; and (g) in addition to the foregoing, in order to implement the
     assignment, sale or other disposal of any of the Collateral, pursuant to
     the authority granted in paragraph 5 hereof, execute and deliver on behalf
     of Grantor, upon five (5) Business Days' prior notice to Grantor, one or
     more instruments of assignment of the Patents, Trademarks, Copyrights or
     Mask Works (or any application or registration thereof), in form suitable
     for filing, recording or registration in any country.

                                     I-2-8
<PAGE>
     7. Indemnification and Release.

          (a) Grantor assumes all responsibility and liability arising from the
     use of the Patents, Trademarks, Copyrights and Mask Works, and Grantor
     hereby indemnifies and holds Agent, each other Agent and each Lender and
     their respective directors, officers, employees, agents and any of their
     respective Affiliates ("Indemnitees") harmless from and against any claim,
     suit, loss, damage or expense (including reasonable attorneys' fees and
     expenses) arising out of or in connection with any alleged infringement of
     any patent, trademark, service mark, trade name, trade secret, copyright or
     mask work of a third party or alleged defect in any product manufactured,
     promoted or sold by Grantor (or any Affiliate of Grantor) in connection
     with any Patent, Trademark, Copyright or Mask Work or out of the
     manufacture, promotion, labeling, sale or advertisement of any product or
     service by Grantor (or any Affiliate of Grantor) provided, however, that
     the foregoing indemnity shall not extend to any use by Agent or any Lender
     (or any of their respective Affiliates) of any Patent, Trademark, Copyright
     or Mask Work which constitutes gross negligence or willful misconduct.
     Grantor agrees that Agent, the Agent and the Lenders do not assume, and
     shall have no responsibility for, the payment of any sums due or to become
     due under any agreement or contract included in the Collateral or the
     performance of any obligations to be performed under or with respect to any
     such agreement or contract by Grantor, and Grantor hereby agrees to
     indemnify and hold each Indemnitee harmless with respect to any and all
     claims by any Person relating thereto.

          (b) Grantor agrees to indemnify and hold the Indemnitees harmless and
     against any claim, suit, loss, damage or expense (including reasonable
     attorneys' fees and expenses) arising out of or in connection with any
     action taken or omitted to be taken by Agent hereunder with respect to any
     license agreement of Grantor, other than actions taken or omitted to be
     taken through the gross negligence or willful misconduct of such
     Indemnitees or any breach of this Agreement or the other Credit Documents.

          (c) Grantor agrees to indemnify and hold the Indemnitees harmless and
     against any claim, suit, loss, damage or expense (including reasonable
     attorneys' fees and expenses) arising out of or in connection with any
     claim, suit or proceeding instituted by Grantor or in which Grantor
     participates.

          (d) Grantor hereby releases the Indemnitees from any claims, causes of
     action and demands at any time arising out of or with respect to any
     actions taken or omitted to be taken by Agent under the powers of attorney
     granted in paragraph 5 hereof, other than actions taken or omitted

                                     I-2-9
<PAGE>
     to be taken through the gross negligence or willful misconduct of such
     Indemnitees or any breach of this Agreement or the other Credit Documents.

          (e) Grantor agrees to cause Agent to be named as an additional insured
     with respect to any policy of insurance held by Grantor from time to time
     covering product liability or intellectual property infringement risk.

          (f) Nothing contained in this Paragraph 7 shall, however, be deemed to
     require Grantor to indemnify or hold harmless any Indemnitee from any
     losses, costs, claims or damages arising from or relating to such
     Indemnitee's gross negligence or willful misconduct.

     8. Authorizations, Waivers, Etc.

          (a) Authorizations. Grantor authorizes Agent and the Lenders, in their
     discretion, without notice to Grantor, irrespective of any change in the
     financial condition of Borrower, Grantor or any other guarantor of the
     Secured Obligations since the date hereof, and without affecting or
     impairing in any way the liability of Grantor hereunder, from time to time
     to:

               (i) Create new Secured Obligations and renew, compromise, extend,
          accelerate or otherwise change the time for payment or performance of,
          or otherwise amend or modify the Credit Documents or change the terms
          of the Secured Obligations or any part thereof, including increase or
          decrease of the rate of interest thereon;

               (ii) Take and hold security for the payment or performance of the
          Secured Obligations and exchange, enforce, waive or release any such
          security; apply such security and direct the order or manner of sale
          thereof; and purchase such security at public or private sale;

               (iii) Otherwise exercise any right or remedy they may have
          against Borrower, Grantor, any other guarantor of the Secured
          Obligations or any security, including, without limitation, the right
          to foreclose upon any such security by judicial or nonjudicial sale;

               (iv) Settle, compromise with, release or substitute any one or
          more makers, endorsers or guarantors of the Secured Obligations; and

               (v) Assign the Secured Obligations, this Security Agreement or
          the other Credit Documents in whole or in part to the extent provided
          in the Credit Agreement and the other Credit Documents.

                                     I-2-10
<PAGE>
         (b) Waivers. Grantor hereby waives:

               (i) Any right to require Agent or any Lender to (A) proceed
          against Borrower or any other guarantor of the Secured Obligations,
          (B) proceed against or exhaust any security received from Borrower,
          Grantor, or any other guarantor of the Secured Obligations or
          otherwise marshall the assets of Borrower, Grantor, or any other
          guarantor of the Secured Obligations or (C) pursue any other remedy in
          Agent's or any Lender's power whatsoever;

               (ii) Any defense arising by reason of the application by Borrower
          of the proceeds of any borrowing;

               (iii) Any defense resulting from the absence, impairment or loss
          of any right of reimbursement, subrogation, contribution or other
          right or remedy of Grantor against Borrower, any other guarantor of
          the Secured Obligations or any security, whether resulting from an
          election by Agent or any Lender to foreclose upon security by
          nonjudicial sale, or otherwise;

               (iv) Any setoff or counterclaim of Borrower or any defense which
          results from any disability or other defense of Borrower or the
          cessation or stay of enforcement from any cause whatsoever of the
          liability of Borrower (including, without limitation, the lack of
          validity or enforceability of any of the Credit Documents);

               (v) Any defense based upon any law, rule or regulation which
          provides that the obligation of a surety must not be greater or more
          burdensome than the obligation of the principal;

               (vi) Until all obligations of Agent or any Lender to extend
          credit to Borrower have terminated and all of the Secured Obligations
          have been fully, finally and indefeasibly paid, any right of
          subrogation, reimbursement, indemnification or contribution and other
          similar right to enforce any remedy which Agent, the Lenders or any
          other Person now has or may hereafter have against Borrower on account
          of the Secured Obligations, and any benefit of, and any right to
          participate in, any security now or hereafter received by Agent, any
          Lender or any other Person on account of the Secured Obligations;

               (vii) All presentments, demands for performance, notices of
          non-performance, notices delivered under the Credit Documents,
          protests, notice of dishonor, and notices of acceptance of this
          Security Agreement and of the existence, creation or incurring of new
          or

                                     I-2-11
<PAGE>
          additional Secured Obligations and notices of any public or private
          foreclosure sale;

               (viii) The benefit of any statute of limitations to the extent
          permitted by law;

               (ix) Any appraisement, valuation, stay, extension, moratorium
          redemption or similar law or similar rights for marshalling;

               (x) Any right to be informed by Agent or any Lender of the
          financial condition of Borrower, any other guarantor of the Secured
          Obligations or any change therein or any other circumstances bearing
          upon the risk of nonpayment or nonperformance of the Secured
          Obligations;

               (xi) Until all obligations of Agent or any Lender to extend
          credit to Borrower have terminated and all of the Secured Obligations
          have been fully, finally and indefeasibly paid, any right to revoke
          this Security Agreement;

               (xii) Any defense arising from an election for the application of
          Section 1111(b)(2) of the United States Bankruptcy Code which applies
          to the Secured Obligations;

               (xiii) Any defense based upon any borrowing or grant of a
          security interest under Section 364 of the United States Bankruptcy
          Code;

               (xiv) Any right it may have to a fair value hearing to determine
          the size of a deficiency judgment following any foreclosure on any
          security for the Secured Obligations;

               (xv) All rights and defenses arising out of an election of
          remedies by Agent or any Lender, even though that election of
          remedies, such as a nonjudicial foreclosure with respect to security
          for a Secured Obligation, has destroyed Grantor's rights of
          subrogation and reimbursement against Borrower by the operation of
          Section 580d of the Code of Civil Procedure or otherwise; and

               (xvi) All other rights and defenses available to Grantor by
          reason of Sections 2787 to 2855, inclusive, Section 2899 or Section
          3433 of the California Civil Code or Section 3605 of the California
          Commercial Code.

                                     I-2-12
<PAGE>
     Without limiting the scope of any of the foregoing provisions of this
     Paragraph 5, and pursuant to the provisions of California Civil Code
     Section 2856, Grantor hereby further waives all rights and defenses that
     Grantor may have because the Secured Obligations are secured by real
     property. This means, among other things:

               (A) Agent or any Lender may collect from Grantor without first
          foreclosing on any real or personal property collateral pledged by
          Borrower.

               (B) If Agent or any Lender forecloses on any real property
          collateral pledged by Borrower:

                    (1) The amount of the Secured Obligations may be reduced
               only by the price for which that collateral is sold at the
               foreclosure sale, even if the collateral is worth more than the
               sale price.

                    (2) Agent or any Lender may collect from Grantor even if
               Agent or any Lender, by foreclosing on the real property
               collateral, has destroyed any right Grantor may have to collect
               from Borrower.

     This is an unconditional and irrevocable waiver of any rights and defenses
     Grantor may have because the Secured Obligations are secured by real
     property. These rights and defenses include, but are not limited to, any
     rights or defenses based upon Section 580a, 580b, 580d, or 726 of the
     California Code of Civil Procedure.

                                     I-2-13
<PAGE>
          (c) Financial Condition of Borrower, Etc. Grantor is fully aware of
     the financial condition and affairs of Borrower. Grantor has executed this
     Security Agreement without reliance upon any representation, warranty,
     statement or information concerning Borrower furnished to Grantor by Agent
     or any Lender and has, independently and without reliance on Agent or any
     Lender, and based on such documents and information as it has deemed
     appropriate, made its own appraisal of the financial condition and affairs
     of Borrower and of other circumstances affecting the risk of nonpayment or
     nonperformance of the Secured Obligations. Grantor is in a position to
     obtain, and assumes full responsibility for obtaining, any additional
     information about the financial condition and affairs of Borrower and of
     other circumstances affecting the risk of nonpayment or nonperformance of
     the Secured Obligations and will, independently and without reliance upon
     Agent or any Lender, and based on such documents and information as it
     shall deem appropriate at the time, continue to make its own appraisals and
     decisions in taking or not taking action in connection with this Security
     Agreement.

          9. Miscellaneous.

               (a) Notices. Except as otherwise specified herein, all notices,
          requests, demands, consents, instructions or other communications to
          or upon Grantor or Agent under this Security Agreement shall be given
          as provided in Paragraph 8.01 of the Credit Agreement.

               (b) Waivers; Amendments. Any term, covenant, agreement or
          condition of this Security Agreement may be amended or waived only as
          provided in the Credit Agreement. No failure or delay by Agent in
          exercising any right hereunder shall operate as a waiver thereof or of
          any other right nor shall any single or partial exercise of any such
          right preclude any other further exercise thereof or of any other
          right. Unless otherwise specified in any such waiver or consent, a
          waiver or consent given hereunder shall be effective only in the
          specific instance and for the specific purpose for which given.

               (c) Successors and Assigns. This Security Agreement shall be
          binding upon and inure to the benefit of Agent, Grantor and the
          Lenders and their respective successors and assigns; provided,
          however, that Agent, the Lenders and Grantor may sell, assign and
          delegate their respective rights and obligations hereunder only as
          permitted by the Credit Agreement. The Lenders and Agent may disclose
          this Security Agreement as provided in the Credit Agreement.

               (d) Partial Invalidity. If at any time any provision of this
          Security Agreement is or becomes illegal, invalid or unenforceable in
          any respect under the law of any jurisdiction, neither the legality,
          validity or enforceability of the remaining provisions of this
          Security Agreement nor the

                                     I-2-14
<PAGE>
          legality, validity or enforceability of such provision under the law
          of any other jurisdiction shall in any way be affected or impaired
          thereby.

               (e) Cumulative Rights, etc. The rights, powers and remedies of
          Agent under this Security Agreement shall be in addition to all
          rights, powers and remedies given to Agent and the Lenders by virtue
          of any applicable Governmental Rule, the Credit Agreement, any other
          Credit Document or any other agreement, all of which rights, powers,
          and remedies shall be cumulative and may be exercised successively or
          concurrently without impairing Agent's rights hereunder. Grantor
          waives any right to require Agent or any Lender to proceed against any
          Person or to exhaust any Collateral or to pursue any remedy in Agent's
          or any Lender's power.

               (f) Payments Free of Taxes, Etc. All payments made by Grantor
          under this Security Agreement shall be made by Grantor free and clear
          of and without deduction for any and all present and future taxes,
          levies, charges, deductions and withholdings. In addition, Grantor
          shall pay upon demand any stamp or other taxes, levies or charges of
          any jurisdiction with respect to the execution, delivery,
          registration, performance and enforcement of this Security Agreement.
          Upon request by Agent, Grantor shall furnish evidence satisfactory to
          Agent that all requisite authorizations and approvals by, and notices
          to and filings with, governmental authorities and regulatory bodies
          have been obtained and made and that all requisite taxes, levies and
          charges have been paid.

               (g) Grantor's Continuing Liability. Notwithstanding any provision
          of this Security Agreement or any other Credit Document or any
          exercise by Agent of any of its rights hereunder or thereunder
          (including, without limitation, any right to collect or enforce any
          Collateral), (i) Grantor shall remain liable to perform its
          obligations and duties in connection with the Collateral and (ii)
          neither Agent nor any Lender shall assume or be considered to have
          assumed any liability to perform such obligations and duties or to
          enforce any of Grantor's rights in connection with the Collateral.

               (h) Governing Law. This Security Agreement shall be governed by
          and construed in accordance with the laws of the State of California
          without reference to conflicts of law rules (except to the extent
          otherwise provided in the UCC).

                                     I-2-15
<PAGE>
          IN WITNESS WHEREOF, Grantor and Agent have caused this Security
     Agreement to be executed as of the day and year first above written.

                                   ADAC LABORATORIES

                                   By:
                                      ------------------------------------------
                                      Name:
                                           -------------------------------------
                                      Title:
                                            ------------------------------------

                                     I-2-16
<PAGE>
                                  ATTACHMENT 1

                             TO SECURITY AGREEMENT

          All right, title and interest of Grantor, whether now owned or
     hereafter acquired, in and to the following property:

          (a) All trademarks, trade names, trade styles and service marks, and
     all prints and labels on which said trademarks, trade names, trade styles
     and service marks have appeared or appear, and all designs and general
     intangibles of like nature, now existing or hereafter adopted or acquired,
     all right, title and interest therein and thereto, all registrations and
     recordings thereof, including, (i) all applications, registrations and
     recordings in the Patent and Trademark Office or in any similar office or
     agency of the United States, any state thereof, or any foreign country or
     any political subdivision thereof, all whether now owned or hereafter
     acquired by Grantor, including those described in Schedule A to this
     Attachment 1, which Schedule A is incorporated herein by this reference,
     and (ii) all reissues, extensions or renewals thereof and all licenses
     thereof (collectively, the "Trademarks");

          (b) All patentable inventions, patent rights, shop rights, letters
     patent of the United States or any foreign country, all right, title and
     interest therein and thereto, and all registrations and recordings thereof,
     including (i) all Patent Registrations and recordings in the Patent and
     Trademark Office or in any similar office or agency of the United States,
     any state thereof or any foreign country or political subdivision thereof,
     all whether now owned or hereafter acquired by Grantor, including those
     described in Schedule B to this Attachment 1, which Schedule B is
     incorporated herein by this reference, and (ii) all reissues,
     continuations, continuations-in-part or extensions thereof and all licenses
     thereof (collectively, the "Patents");

          (c) All copyrights including, without limitation, (i) all original
     works of authorship fixed in any tangible medium of expression, all right,
     title and interest therein and thereto, and all registrations and
     recordings thereof, including all applications, registrations and
     recordings in the Copyright Office or in any similar office or agency of
     the United States, any state thereof, or any foreign country or any
     political subdivision thereof, all whether now owned or hereafter acquired
     by Grantor, including those described on Schedule C to this Attachment 1,
     which Schedule C is incorporated herein by this reference, and (ii) all
     extensions or renewals thereof and all licenses thereof (collectively, the
     "Copyrights");

          (d) All mask works including all series of related images, however
     fixed or encoded, in final or intermediate form, having or representing the
     predetermined, three dimensional pattern of metallic, insulating, or
     semiconductor material present or removed from the layers of a
     semiconductor chip product, in which series the relation of the images to
     one another is that each image has the

                                    I-2[1]-1
<PAGE>
     pattern of the surface of one form of the semiconductor chip product, and
     all right, title and interest therein and thereto, and all registrations
     and recordings thereof, including all applications, registrations and
     recordings in the Copyright Office or in any similar office or agency of
     the United States, any state thereof, or any foreign country or any
     political subdivision thereof, all whether now owned or hereafter acquired
     by the Grantor, including those described on Schedule D to this Attachment
     1, which Schedule D is incorporated herein by this reference, and (ii) all
     extensions or renewals thereof and all licenses thereof (collectively, the
     "Mask Works");

          (e) All goodwill of Grantor's business symbolized by the Trademarks
     and all customer lists and other records of Grantor relating to the
     distribution of products or provision of services bearing or covered by the
     Trademarks;

          (f) All proprietary information, including formulas, patterns,
     compilations, programs, devices, methods, techniques or processes, that
     derives independent economic value, actual or potential, from not being
     generally known to, and not being readily ascertainable by proper means by
     other Persons who can obtain economic value from its disclosure or use, all
     whether now owned or hereafter acquired by the Grantor (collectively, the
     "Trade Secrets");

          (g) All claims by Grantor against any Person for past, present or
     future infringement of the Patents, Trademarks, Copyrights, Mask Works or
     Trade Secrets; and

          (h) All proceeds of the foregoing (including whatever is receivable or
     received when Collateral or proceeds is (are) sold, collected, exchanged,
     licensed or otherwise disposed of, whether such disposition is voluntary or
     involuntary, including rights to payment and return premiums and insurance
     proceeds under insurance with respect to any Collateral, and all rights to
     payment with respect to any cause of action affecting or relating to the
     Collateral).

                                    I-2[1]-2
<PAGE>
                                   SCHEDULE A

                                TO ATTACHMENT 1

                             TO SECURITY AGREEMENT

                     TRADEMARKS AND TRADEMARK APPLICATIONS

                                    I-2[1]-3
<PAGE>
                                   SCHEDULE B

                                TO ATTACHMENT 1

                             TO SECURITY AGREEMENT

                        PATENTS AND PATENT APPLICATIONS

                                    I-2[1]-4
<PAGE>
                                   SCHEDULE C

                                TO ATTACHMENT 1

                             TO SECURITY AGREEMENT

                                   COPYRIGHTS

Registration No.          Jurisdiction         Date

                                     [NONE]

                                    I-2[1]-5
<PAGE>
                                   SCHEDULE D

                                TO ATTACHMENT 1

                             TO SECURITY AGREEMENT

                                   MASK WORKS

Registration No.          Jurisdiction         Date

                                     [NONE]

                                    I-2[1]-6
<PAGE>
                                   SCHEDULE E

                                TO ATTACHMENT 1

                             TO SECURITY AGREEMENT

                  LICENSES GRANTED BY GRANTOR TO THIRD PARTIES

                                    I-2[1]-7
<PAGE>
                                   SCHEDULE F

                                TO ATTACHMENT 1

                             TO SECURITY AGREEMENT

                  LICENSES GRANTED BY THIRD PARTIES TO GRANTOR

                                    I-2[1]-8
<PAGE>
                                  ATTACHMENT 2

                             TO SECURITY AGREEMENT

                            [SEPARATE INSTRUMENT FOR

                            EACH FORM OF COLLATERAL]

                           GRANT OF SECURITY INTEREST

                      [TRADEMARKS][COPYRIGHTS][MASK WORKS]

          THIS GRANT OF SECURITY INTEREST, dated as of September [A], 1999 is
     executed by [_______________], a [_______________] ("Grantor"), in favor of
     ABN AMRO BANK N.V., a Netherlands public company acting through its San
     Francisco Representative Office, acting as agent (in such capacity,
     "Agent") for the financial institutions which are from time to time parties
     to the Credit Agreement referred to in Recital A below (collectively, the
     "Lenders").

          A. Pursuant to an Amended and Restated Credit Agreement, dated as of
     March 29, 1999 as amended by that certain First Amendment to Amended and
     Restated Credit Agreement dated as of August 17, 1999 (as amended, and as
     further amended from time to time, the "Credit Agreement"), among Adac
     Laboratories, a California corporation ("Borrower"), the Lenders and Agent,
     the Lenders have agreed to extend certain credit facilities to Borrower
     upon the terms and subject to the conditions set forth therein.

          [B. Grantor has adopted, used and is using the trademarks, more
     particularly described on Schedules 1-A and 1-B annexed hereto and made a
     part hereof, which trademarks are registered or subject to an application
     for registration in the United States Patent and Trademark Office
     (collectively, the "Trademarks").]

          [B. Grantor owns the copyrights registered in the United States
     Copyright Office, more particularly described on Schedule 1-A annexed
     hereto and made a part hereof (collectively, the "Copyrights").]

          [B. Grantor owns the mask works registered in the United States
     Copyright Office, more particularly described on Schedule 1-A annexed
     hereto and made a part hereof (collectively, the "Mask Works").]

          C. Grantor has entered into a Security Agreement (Intellectual
     Property) dated the date hereof (the "Security Agreement") in favor of
     Agent (for the ratable benefit of the Lenders and Agent).

          [D. Pursuant to the Security Agreement, Grantor has granted to Agent
     (for the ratable benefit of the Lenders and Agent) a security interest in
     all right, title and interest of Grantor in and to the Trademarks, together
     with the goodwill of the

                                    I-2[2]-1
<PAGE>
     business symbolized by the Trademarks and the customer lists and records
     related to the Trademarks and the applications and registrations thereof,
     and all proceeds thereof, including any and all causes of action which may
     exist by reason of infringement thereof (the "Collateral"), to secure the
     payment, performance and observance of the Secured Obligations, as defined
     in the Security Agreement.]

          [D. Pursuant to the Security Agreement, Grantor has granted to Agent
     (for the ratable benefit of the Lenders and Agent) a security interest in
     all right, title and interest of Grantor in and to the Copyrights and the
     registrations thereof, together with any renewals or extensions thereof,
     and all proceeds thereof, including any and all causes of action which may
     exist by reason of infringement thereof for the full term of the Copyrights
     (the "Collateral"), to secure the prompt payment, performance and
     observance of the Secured Obligations, as defined in the Security
     Agreement.]

          [D. Pursuant to the Security Agreement, Grantor has granted to Agent
     (for the ratable benefit of the Lenders and Agent) a security interest in
     all right, title and interest of Grantor in and to the Mask Works and the
     registrations thereof, together with any renewals or extensions thereof,
     and all proceeds thereof, including any and all causes of action which may
     exist by reason of infringement thereof for the full term of the Mask Works
     (the "Collateral"), to secure the prompt payment, performance and
     observance of the Secured Obligations, as defined in the Security
     Agreement.]

          NOW, THEREFORE, for good and valuable consideration, receipt of which
     is hereby acknowledged, Grantor does hereby further grant to Agent a
     security interest in the Collateral to secure the prompt payment,
     performance and observance of the Secured Obligations.

          Grantor does hereby further acknowledge and affirm that the rights and
     remedies of Agent with respect to the security interest in the Collateral
     granted hereby are more fully set forth in the Security Agreement, the
     terms and provisions of which are hereby incorporated herein by reference
     as if fully set forth herein.

               Agent's address is:

               ABN AMRO BANK N.V.
               c/o ABN AMRO North America, Inc.
               101 California Street, Suite 4550
               San Francisco, CA 94111-5812
               Attn:  Maria Vickroy Peralta
               Telephone:  (415) 984-3704
               Fax No.: (415) 362-3524

                                    I-2[2]-2
<PAGE>
          IN WITNESS WHEREOF, Grantor has caused this Agreement to be executed
     as of the day and year first above written.

                                   ADAC LABORATORIES

                                   By:
                                      ------------------------------------------
                                      Name:
                                           -------------------------------------
                                      Title:
                                            ------------------------------------

                                    I-2[2]-3
<PAGE>
     STATE OF CALIFORNIA                 )
                                         )
     COUNTY OF                                   )

          On _______________, before me, _________________, personally appeared
     ___________________________________________, personally known to me (or
     proved to me on the basis of satisfactory evidence) to be the person(s)
     whose name(s) is/are subscribed to the within instrument and acknowledged
     to me that he/she/they executed the same in her/her/their authorized
     capacity(ies), and that by his/her/their signature(s) on such instrument
     the person or entity on behalf of which the person(s) acted executed the
     instrument.

          WITNESS my hand and official seal.

Signature                                (Seal)

                                    I-2[2]-4
<PAGE>
                   SCHEDULE 1-A TO GRANT OF SECURITY INTEREST

                                   TRADEMARKS

                   SCHEDULE 1-B TO GRANT OF SECURITY INTEREST

                             TRADEMARK APPLICATIONS

Mark                            Application Date                 Application No.

                                    I-2[2]-5
<PAGE>
                   SCHEDULE 1-A TO GRANT OF SECURITY INTEREST

                                   COPYRIGHTS

Description                     Registration Date               Registration No.

                   SCHEDULE 1-A TO GRANT OF SECURITY INTEREST

                                   MASK WORKS

Description                     Registration Date               Registration No.

                                    I-2[2]-6
<PAGE>
                                  ATTACHMENT 3

                             TO SECURITY AGREEMENT

                           GRANT OF SECURITY INTEREST

                                   (PATENTS)

          THIS GRANT OF SECURITY INTEREST, dated as of September [A], 1999 is
     executed by [_______________], a [_______________] ("Grantor"), in favor of
     ABN AMRO BANK N.V., a Netherlands public company acting through its San
     Francisco Representative Office, acting as agent (in such capacity,
     "Agent") for the financial institutions which are from time to time parties
     to the Credit Agreement referred to in Recital A below (collectively, the
     "Lenders").

          A. Pursuant to an Amended and Restated Credit Agreement, dated as of
     March 29, 1999 as amended by that certain First Amendment to Amended and
     Restated Credit Agreement dated as of August 17, 1999 (as amended, and as
     further amended from time to time, the "Credit Agreement"), among Adac
     Laboratories, a California corporation ("Borrower"), the Lenders and Agent,
     the Lenders have agreed to extend certain credit facilities to Borrower
     upon the terms and subject to the conditions set forth therein.

          B. Grantor owns the letters patent, and/or applications for letters
     patent, of the United States and certain foreign countries, more
     particularly described on Schedules 1-A and 1-B annexed hereto and made a
     part hereof (collectively, the "Patents").

          C. Grantor has entered into a Security Agreement (Intellectual
     Property) dated the date hereof (the "Security Agreement") in favor of
     Agent (for the ratable benefit of the Lenders and Agent.

          D. Pursuant to the Security Agreement, Grantor has assigned and
     granted to Agent (for the ratable benefit of the Lenders and Agent) a
     security interest in all right, title and interest of Grantor in and to the
     Patents, together with any reissue, continuation, continuation-in-part or
     extension thereof, and all proceeds thereof, including any and all causes
     of action which may exist by reason of infringement thereof (the
     "Collateral"), to secure the prompt payment, performance and observance of
     the Secured Obligations, as defined in the Security Agreement;

          NOW, THEREFORE, for good and valuable consideration, receipt of which
     is hereby acknowledged, Grantor does hereby further assign, transfer and
     convey unto Agent and grant to Agent a security interest in the Collateral
     to secure the prompt payment, performance and observance of the Secured
     Obligations.

                                    I-2[3]-1
<PAGE>
          Grantor does hereby further acknowledge and affirm that the rights and
     remedies of Agent with respect to the assignment of and security interest
     in the Collateral made and granted hereby are more fully set forth in the
     Security Agreement, the terms and provisions of which are hereby
     incorporated herein by reference as if fully set forth herein.

               Agent's address is:

               ABN AMRO BANK N.V.
               c/o ABN AMRO North America, Inc.
               101 California Street, Suite 4550
               San Francisco, CA 94111-5812
               Attn:  Maria Vickroy Peralta
               Telephone:  (415) 984-3704
               Fax No.: (415) 362-3524

          IN WITNESS WHEREOF, Grantor has caused this Agreement to be executed
     as of the day and year first above written.

                                   ADAC LABORATORIES

                                   By:
                                      ------------------------------------------
                                      Name:
                                           -------------------------------------
                                      Title:
                                            ------------------------------------

                                    I-2[3]-2
<PAGE>
     STATE OF CALIFORNIA                 )
                                         )
     COUNTY OF                                   )

          On ____________, ___ before me, _________________, personally
     appeared _________________________________, personally known to me (or
     proved to me on the basis of satisfactory evidence) to be the person(s)
     whose name(s) is/are subscribed to the within instrument and acknowledged
     to me that he/she/they executed the same in her/her/their authorized
     capacity(ies), and that by his/her/their signature(s) on such instrument
     the person or entity on behalf of which the person(s) acted executed the
     instrument.

          WITNESS my hand and official seal.

Signature                                    (Seal)

                                    I-2[3]-3
<PAGE>
                   SCHEDULE 1-A TO GRANT OF SECURITY INTEREST

                                    PATENTS

                   SCHEDULE 1-B TO GRANT OF SECURITY INTEREST

                              PATENT APPLICATIONS

                                Application No.

                                    I-2[3]-4
<PAGE>
                                  ATTACHMENT 4

                             TO SECURITY AGREEMENT

                           SPECIAL POWER OF ATTORNEY

     STATE OF CALIFORNIA                 )
                                         )  ss.:
     COUNTY OF                                   )

          KNOW ALL PERSONS BY THESE PRESENTS, THAT ADAC LABORATORIES, a
     California corporation ("Grantor"), pursuant to a Security Agreement
     (Intellectual Property), dated the date hereof (the "Security Agreement"),
     between Grantor and ABN AMRO BANK N.V., as agent (for the ratable benefit
     of the Lenders and Agent) (jointly in such capacities, "Agent") under that
     certain Amended and Restated Credit Agreement, dated as of March 29, 1999
     as amended by that certain First Amendment to Amended and Restated Credit
     Agreement dated as of August 17, 1999 (as amended, and as further amended
     from time to time, the "Credit Agreement"), among Adac Laboratories, a
     California corporation ("Borrower"), the Lenders and Agent, hereby appoints
     and constitutes Agent its true and lawful attorney in fact, with full power
     of substitution, and with full power and authority to perform the following
     acts on behalf of Grantor following the occurrence and during the
     continuation of an Event of Default (as defined in the Credit Agreement):

          1. For the purpose of assigning, selling, licensing or otherwise
     disposing of all right, title and interest of Grantor in and to any letters
     patent of the United States or any other country or political subdivision
     thereof, and all registrations, recordings, reissues, continuations,
     continuations-in-part and extensions thereof, and all pending applications
     therefor, and for the purpose of the recording, registering and filing of,
     or accomplishing any other formality with respect to, the foregoing, to
     execute and deliver any and all agreements, documents, instruments of
     assignment or other papers necessary or advisable to effect such purpose;

          2. For the purpose of assigning, selling, licensing or otherwise
     disposing of all right, title and interest of Grantor in and to any
     trademarks, trade names, trade styles and service marks, and all
     registrations, recordings, reissues, extensions and renewals thereof, and
     all pending applications therefor, and for the purpose of the recording,
     registering and filing of, or accomplishing any other formality with
     respect to, the foregoing, to execute and deliver any and all agreements,
     documents, instruments of assignment or other papers necessary or advisable
     to effect such purpose;

                                    I-2[4]-1
<PAGE>
          3. For the purpose of assigning, selling, licensing or otherwise
     disposing of all right, title and interest of Grantor in and to any
     copyrights, and all registrations, recordings, reissues, extensions and
     renewals thereof, and all pending applications therefor, and for the
     purpose of the recording, registering and filing of, or accomplishing any
     other formality with respect to, the foregoing, to execute and deliver any
     and all agreements, documents, instruments of assignment or other papers
     necessary or advisable to effect such purpose;

          4. For the purpose of assigning, selling, licensing or otherwise
     disposing of all right, title and interest of Grantor in and to any mask
     works, and all registrations, recordings, reissues, extensions and renewals
     thereof, and all pending applications therefor, and for the purpose of the
     recording, registering and filing of, or accomplishing any other formality
     with respect to, the foregoing, to execute and deliver any and all
     agreements, documents, instruments of assignment or other papers necessary
     or advisable to effect such purpose;

          5. For the purpose of evidencing and perfecting Agent's interest in
     any patent, trademark, copyright or mask work not previously assigned to
     Agent as security, or in any patent, trademark, copyright or mask work,
     which Grantor may acquire from a third party, and for the purpose of the
     recording, registering and filing of, or accomplishing any other formality
     with respect to, the foregoing, to execute and deliver any and all
     agreements, documents, instruments of assignment or other papers necessary
     or advisable to effect such purpose.

          6. To execute any and all documents, statements, certificates or other
     papers necessary or advisable in order to obtain the purposes described
     above as Agent may in its reasonable discretion determine.

          This power of attorney is made pursuant to the Security Agreement and
     takes effect solely for the purposes of thereof and is subject to the
     conditions thereof and may not be revoked until termination of the Security
     Agreement as provided therein.

     Dated: September [A], 19999

                                   ADAC LABORATORIES

                                   By:
                                      ------------------------------------------
                                      Name:
                                           -------------------------------------
                                      Title:
                                            ------------------------------------

                                    I-2[4]-2
<PAGE>
     STATE OF CALIFORNIA      )
                              )  ss.:
     COUNTY OF SAN FRANCISCO  )

          On ______________, ___ before me, _____________________, personally
     appeared ____________________________________, personally known to me (or
     proved to me on the basis of satisfactory evidence) to be the person(s)
     whose name(s) is/are subscribed to the within instrument and acknowledged
     to me that he/she/they executed the same in her/her/their authorized
     capacity(ies), and that by his/her/their signature(s) on such instrument
     the person or entity on behalf of which the person(s) acted executed the
     instrument.

          WITNESS my hand and official seal.

Signature                                    (Seal)

                                    I-2[4]-3
<PAGE>
                                   EXHIBIT J

                                PLEDGE AGREEMENT

          THIS PLEDGE AGREEMENT, dated as of September [A], 1999 is executed by
     ADAC LABORATORIES, a California corporation ("Borrower"), in favor of ABN
     AMRO BANK N.V., a Netherlands public company acting through its San
     Francisco Representative Office, acting as agent (in such capacity,
     "Agent") for the financial institutions which are from time to time parties
     to the Credit Agreement referred to in Recital A below (collectively, the
     "Lenders").

                                    RECITALS

          A. Pursuant to an Amended and Restated Credit Agreement, dated as of
     March 29, 1999, as amended by that certain First Amendment to Amended and
     Restated Credit Agreement dated as of August 17, 1999 (as amended, and as
     further amended from time to time, (the "Credit Agreement"), among
     Borrower, the Lenders and Agent, the Lenders have agreed to extend certain
     credit facilities to Borrower upon the terms and subject to the conditions
     set forth therein.

          B. The Lenders' obligations to continue to extend the credit
     facilities to Borrower under the Credit Agreement are subject, among other
     conditions, to receipt by Agent of this Pledge Agreement, duly executed by
     Borrower.

                                   AGREEMENT

          NOW, THEREFORE, in consideration of the above recitals and for other
     good and valuable consideration, the receipt and adequacy of which are
     hereby acknowledged, Borrower hereby agrees with Agent, for the ratable
     benefit of the Lenders and Agent, as follows:

          1. Definitions and Interpretation. When used in this Pledge Agreement,
     the following terms shall have the following respective meanings:

               "Agent" shall have the meaning given to that term in the
          introductory paragraph hereof.

               "Borrower" shall have the meaning given to that term in the
          introductory paragraph hereof.

               "Collateral" shall have the meaning given to that term in
          paragraph 2 hereof.

               "Credit Agreement" shall have the meaning given to that term in
          Recital A hereof.

                                      J-1
<PAGE>
               "Domestic Subsidiary" shall have the meaning given to that term
          in the Credit Agreement and shall include, without limitation, as of
          the date hereof each of the Subsidiaries listed in Part A of
          Attachment 1 hereto.

               "Domestic Subsidiary Shares" shall mean all Subsidiary Shares in
          Domestic Subsidiaries.

               "Equity Securities" shall have the meaning given to that term in
          the Credit Agreement.

               "Foreign Subsidiary" shall have the meaning given to that term in
          the Credit Agreement and shall include, without limitation as of the
          date hereof, each of the Subsidiaries listed in Part B of Attachment 1
          hereto.

               "Foreign Subsidiary Nonvoting Shares" shall mean all Subsidiary
          Shares in Foreign Subsidiaries having no voting power, including
          without limitation as of the date hereof, the Subsidiary Shares so
          designated in Part B of Attachment 1 hereto.

               "Foreign Subsidiary Voting Shares" shall mean all Subsidiary
          Shares in Foreign Subsidiaries having voting power, including without
          limitation as of the date hereof, the Subsidiary Shares so designated
          in Part B of Attachment 1 hereto.

               "IRC" shall have the meaning given to that term in the Credit
          Agreement.

               "Lenders" shall have the meaning given to that term in the
          introductory paragraph hereof.

               "Maximum Percentage" shall mean, with respect to the Foreign
          Subsidiary Voting Shares of any Foreign Subsidiary, the maximum
          percentage of such shares that can be pledged to Agent without
          increasing the gross income of Borrower pursuant to Sections 951 and
          956(c) (or any successor provisions) of the IRC, which percentage as
          of the date hereof shall be sixty-six percent (66%).

               "Pledged Shares" shall mean the Subsidiary Shares described in
          subparagraphs 2(a), 2(b) and 2(c) hereof.

               "Secured Obligations" shall have the meaning given to that term
          in the Credit Agreement.

               "Subsidiary" shall have the meaning given to that term in the
          Credit Agreement.

                                      J-2
<PAGE>
               "Subsidiary Shares" shall mean, with respect to any Subsidiary of
          Borrower, all Equity Securities issued by such Subsidiary.

               "UCC" shall mean the Uniform Commercial Code as in effect in the
          State of California from time to time.

     Unless otherwise defined herein, all other capitalized terms used herein
     and defined in the Credit Agreement shall have the respective meanings
     given to those terms in the Credit Agreement, and all terms defined in the
     UCC shall have the respective meanings given to those terms in the UCC. The
     rules of construction set forth in Section I of the Credit Agreement shall,
     to the extent not inconsistent with the terms of this Pledge Agreement,
     apply to this Pledge Agreement and are hereby incorporated by reference.

          2. Pledge. As security for the Secured Obligations, Borrower hereby
     pledges and assigns to Agent (for the ratable benefit of the Lenders and
     Agent) and grants to Agent (for the ratable benefit of the Lenders and
     Agent) a security interest in all right, title and interest of Borrower in
     and to the property described in subparagraphs (a) - (e) below, whether now
     owned or hereafter acquired (collectively and severally, the "Collateral"):

               (a) All Domestic Subsidiary Shares;

               (b) All Foreign Subsidiary Voting Shares of each Foreign
          Subsidiary equal to the Maximum Percentage therefor;

               (c) All Foreign Subsidiary Nonvoting Shares;

               (d) All dividends, cash, instruments and other property from time
          to time received, receivable or otherwise distributed or distributable
          in respect of or in exchange for any of the Pledged Shares; and

               (e) All proceeds of the foregoing.

          3. Representations and Warranties. Borrower represents and warrants to
     the Lenders and Agent as follows:

               (a) Borrower is the record legal and beneficial owner of the
          Collateral (or, in the case of after-acquired Collateral, at the time
          Borrower acquires rights in the Collateral, will be the record legal
          and beneficial owner thereof). No other Person has (or, in the case of
          after-acquired Collateral, at the time Borrower acquires rights
          therein, will have) any right, title, claim or interest (by way of
          Lien, purchase option or otherwise) in, against or to the Collateral
          (other than with respect to Collateral other than the Pledged Shares,
          Permitted Liens).

                                      J-3
<PAGE>
               (b) Agent has (or in the case of after-acquired Collateral, at
          the time Borrower acquires rights therein, will have) a first priority
          perfected security interest in the Pledged Shares and the other
          Collateral.

               (c) All Pledged Shares have been (or in the case of
          after-acquired Pledged Shares, at the time Borrower acquires rights
          therein, will have been) duly authorized, validly issued and fully
          paid and are (or in the case of after-acquired Pledged Shares, at the
          time Borrower acquires rights therein, will be) non-assessable.

               (d) Borrower has (or will have within fourteen (14) days of the
          date hereof) delivered to Agent, together with all necessary stock
          powers, endorsements, assignments and other necessary instruments of
          transfer, the originals of all Pledged Shares, other certificated
          securities, other Collateral and all certificates, instruments and
          other writings evidencing the same.

               (e) Set forth in Attachment 1 hereto is a true, complete and
          accurate list of all Subsidiary Shares. All information set forth in
          Attachment 1 is true, complete and accurate.

          4. Covenants. Borrower hereby agrees as follows:

               (a) Borrower, at Borrower's expense, shall promptly procure,
          execute and deliver to Agent all documents, instruments and agreements
          and perform all acts which are necessary, or which Agent may
          reasonably request, to establish, maintain, preserve, protect and
          perfect the Collateral, the Lien granted to Agent therein and the
          first priority of such Lien or to enable Agent to exercise and enforce
          its rights and remedies hereunder with respect to any Collateral.
          Without limiting the generality of the preceding sentence, Borrower
          shall (i) procure, execute and deliver to Agent all stock powers,
          endorsements, assignments, financing statements and other instruments
          of transfer requested by Agent, (ii) deliver to Agent promptly upon
          receipt the originals of all Pledged Shares, other certificated
          securities, other Collateral and all certificates, instruments and
          other writings evidencing the same and (iii) cause the Lien of Agent
          to be recorded or registered in the books of any financial
          intermediary or clearing corporation requested by Agent.

               (b) Borrower shall pay promptly when due all taxes and other
          governmental charges, all Liens and all other charges now or hereafter
          imposed upon, relating to or affecting any Collateral.

               (c) Upon demand by Agent after the occurrence and during the
          continuation of any Event of Default, Borrower shall deposit, or cause
          to be deposited, all remittances, checks and other funds (in whatever
          form) received with respect to Collateral to a deposit account for
          which Borrower

                                      J-4
<PAGE>
          has complied with subparagraph 4(e) of the Borrower Security Agreement
          and in which Agent has a first priority perfected security interest.

               (d) Borrower shall appear in and defend any action or proceeding
          which may affect its title to or Agent's security interest in the
          Collateral if an adverse decision is reasonably likely to have a
          Material Adverse Effect.

               (e) Borrower shall not surrender or lose possession of (other
          than to Agent), sell, encumber, lease, rent, option, or otherwise
          dispose of or transfer any Collateral or right or interest therein
          except as permitted in the Credit Agreement, and, notwithstanding any
          provision of the Credit Agreement, Borrower shall keep the Collateral
          free of all Liens (except with respect to Collateral other than the
          Pledged Shares, Permitted Liens.

          5. Voting Rights and Dividends Prior to Default. Unless an Event of
     Default has occurred and is continuing:

               (a) Borrower may exercise or refrain from exercising any and all
          voting and other consensual rights pertaining to the Pledged Shares or
          any part thereof; provided, however, that Borrower shall not exercise
          or refrain from exercising any such rights where the consequence of
          such action or inaction would be (i) to impair any Collateral, the
          Lien granted to Agent therein, the first priority of such Lien or
          Agent's rights and remedies hereunder with respect to any Collateral
          or (ii) otherwise inconsistent with the terms of this Pledge Agreement
          and the other Credit Documents.

               (b) Borrower may receive and retain all dividends and interest
          paid in cash in respect of the Pledged Shares, except for any such
          dividends and interest paid in connection with a partial or total
          liquidation or dissolution or in connection with a reduction of
          capital, capital surplus or paid-in-surplus. Borrower shall promptly
          deliver to Agent to hold as Collateral all dividends and interest
          which Borrower is not entitled to receive and retain pursuant to the
          preceding sentence, in the same form as so received (with any
          necessary endorsement), and, until so delivered, shall hold such
          dividends and interest in trust for the benefit of Agent, segregated
          from the other property or funds of Borrower.

          6. Authorized Action by Agent. Borrower hereby irrevocably appoints
     Agent as its attorney-in-fact and agrees that Agent may perform (but Agent
     shall not be obligated to and shall incur no liability to Borrower or any
     third party for failure so to do) any act which Borrower is obligated by
     this Pledge Agreement to perform, and to exercise such rights and powers as
     Borrower might exercise with respect to the Collateral, including, without
     limitation, the right to (a) collect by legal proceedings or otherwise and
     endorse, receive and receipt for all dividends, interest, payments,
     proceeds and other sums and property now or hereafter payable on or on
     account of the Collateral; (b) enter into any extension, reorganization,

                                      J-5
<PAGE>
     deposit, merger, consolidation or other agreement pertaining to, or
     deposit, surrender, accept, hold or apply other property in exchange for
     the Collateral; (c) insure, process, preserve and enforce the Collateral;
     (d) make any compromise or settlement, and take any action it deems
     advisable, with respect to the Collateral; (e) pay any Indebtedness of
     Borrower relating to the Collateral; and (f) execute UCC financing
     statements and other documents, instruments and agreements required
     hereunder; provided, however, that Agent may exercise such powers only
     after the occurrence and during the continuance of an Event of Default.
     Borrower agrees to reimburse Agent upon demand for all reasonable costs and
     expenses, including attorneys' fees, Agent may incur while acting as
     Borrower's attorney-in-fact hereunder, all of which costs and expenses are
     included in the Secured Obligations. Borrower agrees that such care as
     Agent gives to the safekeeping of its own property of like kind shall
     constitute reasonable care of the Collateral when in Agent's possession;
     provided, however, that Agent shall not be required to make any
     presentment, demand or protest, or give any notice and need not take any
     action to preserve any rights against any prior party or any other Person
     in connection with the Secured Obligations or with respect to the
     Collateral.

          7. Events of Default.

               (a) Event of Default. Borrower shall be deemed in default under
          this Pledge Agreement upon the occurrence and during the continuance
          of an Event of Default, as that term is defined in the Credit
          Agreement.

               (b) Voting Rights and Dividends. Upon the occurrence and during
          the continuance of an Event of Default:

                    (i) All rights of Borrower to exercise the voting and other
               consensual rights which it would otherwise be entitled to
               exercise pursuant to subparagraph 5(b) hereof and to receive the
               dividends and interest payments which it would otherwise be
               authorized to receive and retain pursuant to subparagraph 5(a)
               hereof shall cease and all such rights shall thereupon become
               vested in Agent which shall thereupon have the sole right, but
               not the obligation, to exercise such voting and other consensual
               rights and to receive and hold as Collateral such dividends and
               interest payments.

                    (ii) Borrower shall promptly deliver to Agent to hold as
               Collateral all dividends and interest received by Borrower after
               the occurrence and during the continuance of any Event of
               Default, in the same form as so received (with any necessary
               endorsement), and, until so delivered, shall hold such dividends
               and interest in trust for the benefit of Agent, segregated from
               the other property or funds of Borrower.

                                      J-6
<PAGE>
               (c) Other Rights and Remedies. In addition to all other rights
          and remedies granted to Agent by this Pledge Agreement, the Credit
          Agreement, the other Credit Documents, the UCC and other applicable
          Governmental Rules, Agent may, upon the occurrence and during the
          continuance of any Event of Default, exercise any one or more of the
          following rights and remedies: (i) collect, receive, appropriate or
          realize upon the Collateral or otherwise foreclose or enforce Agent's
          security interests in any or all Collateral in any manner permitted by
          applicable Governmental Rules or in this Pledge Agreement; (ii) notify
          any or all issuers of or transfer or paying agents for the Collateral
          or any applicable clearing corporation, financial intermediary or
          other Person to register the Collateral in the name of Agent or its
          nominee and/or to pay all dividends, interest and other amounts
          payable in respect of the Collateral directly to Agent; (iii) sell or
          otherwise dispose of any or all Collateral at one or more public or
          private sales, whether or not such Collateral is present at the place
          of sale, for cash or credit or future delivery, on such terms and in
          such manner as Agent may determine; and (iv) require Borrower to
          assemble all records and information relating to the Collateral and
          make it available to Agent at a place to be designated by Agent. In
          any case where notice of any sale or disposition of any Collateral is
          required, Borrower hereby agrees that seven (7) days notice of such
          sale or disposition is reasonable.

               (d) Securities Laws.

                    (i) Borrower acknowledges and recognizes that Agent may be
               unable to effect a public sale of all or a part of the Pledged
               Shares and may be compelled to resort to one or more private
               sales to a restricted group of purchasers who will be obligated
               to agree, among other things, to acquire the Pledged Shares for
               their own account, for investment and not with a view to the
               distribution or resale thereof. Borrower acknowledges that any
               such private sales may be at prices and on terms less favorable
               to Agent than those of public sales, and agrees that such private
               sales shall be deemed to have been made in a commercially
               reasonable manner and that Agent has no obligation to delay sale
               of any Pledged Shares to permit the issuer thereof to register it
               for public sale under the Securities Act of 1933, as amended, or
               under any state securities law.

                    (ii) Upon the occurrence and during the continuation of an
               Event of Default and at Agent's request, Borrower shall, and
               shall cause all issuers of Collateral and all officers and
               directors thereof and all other necessary Persons to, execute and
               deliver all documents, instruments and agreements and perform all
               other acts necessary or, in the opinion of Agent, advisable to
               sell the Collateral in any public or private sale, including any
               acts requested by Agent to (A) register

                                      J-7
<PAGE>
               any Collateral under the Securities Act of 1933, (B) qualify any
               Collateral under any state securities or "Blue Sky" laws or (C)
               otherwise permit any such sale to be made in full compliance with
               all applicable Governmental Rules.

          8. Miscellaneous.

               (a) Notices. Except as otherwise specified herein, all notices,
          requests, demands, consents, instructions or other communications to
          or upon Borrower or Agent under this Pledge Agreement shall be given
          as provided in Paragraph 8.01 of the Credit Agreement.

               (b) Waivers; Amendments. Any term, covenant, agreement or
          condition of this Pledge Agreement may be amended or waived only as
          provided in the Credit Agreement. No failure or delay by Agent or any
          Lender in exercising any right hereunder shall operate as a waiver
          thereof or of any other right nor shall any single or partial exercise
          of any such right preclude any other further exercise thereof or of
          any other right. Unless otherwise specified in any such waiver or
          consent, a waiver or consent given hereunder shall be effective only
          in the specific instance and for the specific purpose for which given.

               (c) Successors and Assigns. This Pledge Agreement shall be
          binding upon and inure to the benefit of Agent, the Lenders and
          Borrower and their respective successors and assigns; provided,
          however, that Agent, the Lenders and Borrower may sell, assign and
          delegate their respective rights and obligations hereunder only as
          permitted by the Credit Agreement. Agent may disclose this Pledge
          Agreement as provided in the Credit Agreement.

               (d) Partial Invalidity. If at any time any provision of this
          Pledge Agreement is or becomes illegal, invalid or unenforceable in
          any respect under the law of any jurisdiction, neither the legality,
          validity or enforceability of the remaining provisions of this Pledge
          Agreement nor the legality, validity or enforceability of such
          provision under the law of any other jurisdiction shall in any way be
          affected or impaired thereby.

               (e) Cumulative Rights, etc. The rights, powers and remedies of
          Agent and the Lenders under this Pledge Agreement shall be in addition
          to all rights, powers and remedies given to Agent and the Lenders by
          virtue of any applicable Governmental Rule, the Credit Agreement, any
          other Credit Document or any other agreement, all of which rights,
          powers, and remedies shall be cumulative and may be exercised
          successively or concurrently without impairing Agent's rights
          hereunder. Borrower waives any right to require Agent or any Lender to
          proceed against any Person or to exhaust any Collateral or to pursue
          any remedy in Agent's or such Lender's power.

                                      J-8
<PAGE>
               (f) Payments Free of Taxes, Etc. All payments made by Borrower
          under this Pledge Agreement shall be made by Borrower free and clear
          of and without deduction for any and all present and future taxes,
          levies, charges, deductions and withholdings. In addition, Borrower
          shall pay upon demand any stamp or other taxes, levies or charges of
          any jurisdiction with respect to the execution, delivery,
          registration, performance and enforcement of this Pledge Agreement.
          Upon request by Agent, Borrower shall furnish evidence satisfactory to
          Agent that all requisite authorizations and approvals by, and notices
          to and filings with, governmental authorities and regulatory bodies
          have been obtained and made and that all requisite taxes, levies and
          charges have been paid.

               (g) Borrower's Continuing Liability. Notwithstanding any
          provision of this Pledge Agreement or any other Credit Document or any
          exercise by Agent of any of its rights hereunder or thereunder
          (including, without limitation, any right to collect or enforce any
          Collateral), (i) Borrower shall remain liable to perform its
          obligations and duties in connection with the Collateral and (ii)
          neither Agent nor any Lender shall assume or be considered to have
          assumed any liability to perform such obligations and duties or to
          enforce any of Borrower's rights in connection with the Collateral.

               (h) Governing Law. This Pledge Agreement shall be governed by and
          construed in accordance with the laws of the State of California
          without reference to conflicts of law rules (except to the extent
          otherwise provided in the UCC).

                                      J-9
<PAGE>
          IN WITNESS WHEREOF, Borrower has caused this Pledge Agreement to be
     executed as of the day and year first above written.

                                   ADAC LABORATORIES

                                   By:
                                      ------------------------------------------
                                      Name:
                                           -------------------------------------
                                      Title:
                                            ------------------------------------

                                      J-10
<PAGE>
                                  ATTACHMENT 1

                              TO PLEDGE AGREEMENT

                                     PART A

                           DOMESTIC SUBSIDIARY SHARES

<TABLE>
<CAPTION>
                                                                         Shares          Shares Owned
          Subsidiary                          Jurisdiction            Outstanding(1)     by Borrower
<S>                                           <C>                     <C>                <C>
          ADAC Research &
          Manufacturing, Inc.                 California                  1,000               100%

          ADAC Healthcare Information
          Systems, Inc.                       Texas                                           100%

          ADAC Medical
          Technologies, Inc.
          (formerly known
          as J.D. Technical
          Services, Inc.)                     Delaware                    1,000               100%

          ADAC Laboratories
          Pacific, Inc.                       California                  1,000               100%

          ADAC Healthcare
          Partners, Inc.                      Delaware                 1 common               100%

                                                                      1,000,000
                                                                      preferred               100%

          Cortet, Inc.                        Florida                                         100%

          O.N.E.S. Medical Services, Inc.     New Hampshire                                   100%

          CT Solutions                        California                                      100%
</TABLE>

--------------------

(1)       All shares common unless otherwise indicated.

                                      J-11
<PAGE>
                                      PART B

                           FOREIGN SUBSIDIARY SHARES

<TABLE>
<CAPTION>
                                                                         Shares          Shares Owned
          Subsidiary                          Jurisdiction            Outstanding(1)     by Borrower(2)
<S>                                           <C>                     <C>                <C>
          ADAC Laboratories
          Canada Ltd.                         Canada                        100               100%

          ADAC Laboratories
          Europe, BV.                         Netherlands                20,646               100%

          ADAC Foreign
          Sales Corporation                   Virgin Islands              1,000               100%

          ADAC do Brasil                      Brazil                     85,000               100%
</TABLE>

--------------------

(1) All shares common unless otherwise indicated.

(2) An immaterial number of directors' qualifying shares or the equivalent may
be outstanding for some Foreign Subsidiaries.

                                      J-12
<PAGE>
                                   EXHIBIT K

                             COLLATERAL CERTIFICATE

          I, [_______________], as the Chief Financial Officer of ADAC
Laboratories, a California corporation (the "Company"), pursuant to Section 3.01
of the Amended and Restated Credit Agreement dated as of March 29, 1999 entered
into by and among the Company, the Lenders named therein and ABN AMRO BANK N.V.,
a Netherlands public company acting through its San Francisco Representative
Office, as agent for the Lenders, hereby certify for and on behalf of the
Company and each of the Company's Domestic Subsidiaries that the information set
forth in the Profile attached hereto as Attachment 1 is true, correct and
accurate.

          IN WITNESS WHEREOF, the undersigned has executed this Collateral
Certificate on and as of this [A] day of August, 1999.

                                   Name:

                                   Title:

                                      K-1
<PAGE>
                                  ATTACHMENT 1
                            TO COLLATERAL CERTIFICATE

                  PROFILE OF BORROWER AND DOMESTIC SUBSIDIARIES

ADAC LABORATORIES ("Borrower"):

     1. The current legal name of Borrower is ADAC Laboratories. The current
legal name of each Domestic Subsidiary of Borrower is as follows:

     Entity

     2. Borrower's chief executive office is located at 540 Alder Drive,
Milpitas, California. Borrower's federal employer I.D. no. is 94-1725806. The
chief executive offices of each Domestic Subsidiary of Borrower are as follows:

     Entity                                    Location

     3. Borrower was incorporated on October 14, 1970 in the state of
California. Since its incorporation, Borrower has had no other legal name. In
addition, since the respective date of organization of each Domestic Subsidiary
of Borrower, no Domestic Subsidiary of Borrower has any other legal name.

     4. Neither Borrower nor any of its Domestic Subsidiaries does business
under any trade name except as follows:

     Entity                                    Trade Name

                                     K[1]-1
<PAGE>
     5. Since at least January 1, 1996, neither Borrower nor any of its Domestic
Subsidiaries has acquired any of their respective assets in a bulk sale or any
other transaction not in the ordinary course of business of the seller.

     6. The following is a complete list of all states and other jurisdictions
in which Borrower and each of its Domestic Subsidiaries is qualified to do
business:

     Entity                                    State or Jurisdiction

     7. The following is a complete list of all offices and other places of
business at which Borrower and each of its Domestic Subsidiaries currently
conducts or has within the last four months conducted business (provide address,
owner of site and brief description of assets located there):

     Entity        Address       Owner of Site          Description of Assets

     8. The following is a complete list of all persons and entities (other than
Borrower or any Domestic Subsidiary of Borrower) who at any time have possession
of any assets of Borrower or any Domestic Subsidiary of Borrower (provide name,
address where located and description of assets located there):

     Entity        Address       Owner of Site          Description of Assets

                                     K[1]-2
<PAGE>
Of the persons and entities listed above in this item 8;

          a. The following persons and entities are warehouses which issue
     warehouse receipts:

                                           Person or
     Entity                                 Entity

          b. The following persons and entities process or finish inventory or
     other goods for Borrower or any Domestic Subsidiary of Borrower:

                                           Person or
     Entity                                 Entity

          c. The following persons and entities hold inventory or other goods on
     consignment for Borrower or a Domestic Subsidiary of Borrower:

                                           Person or
     Entity                                 Entity

          d. The following other persons and entities have possession of assets
     of Borrower or a Domestic Subsidiary of Borrower for the purposes
     indicated:

                                           Person or
     Entity                                 Entity

                                     K[1]-3
<PAGE>
     9. The following is a complete list of all motor vehicles owned by Borrower
or any Domestic Subsidiary of Borrower (describe each vehicle by make, model and
year and indicate for each the state in which registered and the state in which
based):

                                               State of           State in which
     Entity                  Vehicle           Registration           Based

     10. The following is a complete list of all aircraft and boats and all
other inventory, equipment and other goods of Borrower or its Domestic
Subsidiaries which are subject to any certificate of title or other registration
statute of the United States, any state or any other jurisdiction (provide
description of covered goods and indicate registration system and jurisdiction):

                                                                Registration
     Entity              Goods           System                 Jurisdiction

     11. The following is a complete list of all patents, copyrights,
trademarks, tradenames and service marks registered in the name of Borrower:

          a.       Entity               Patents                Registration No.

          b.       Entity             Copyrights               Registration No.

                                     K[1]-4
<PAGE>
          c.                          Trademarks,
                                    Trade Names and
               Entity                Service Marks             Registration No.

     12. The following is a complete list of all subsidiaries of Borrower
(provide name of subsidiary, jurisdiction of incorporation, outstanding shares
and shares owned by Borrower):

                                           Shares                  Shares Owned
     Subsidiary        Jurisdiction      Outstanding               by Borrower

     13. The following is a complete list of all other stock (other than the
stock of subsidiaries described in item 13 above), bonds, debentures, notes and
other securities owned by Borrower or any of its Domestic Subsidiaries which
have a value (higher of cost or market value) of $1.00 more (provide name of
issuer, a description of security and value):

                                                            Description of
     Entity           Issuer             Security               Value

     14. The following is a complete list of all notes payable to Borrower or
any of its Domestic Subsidiaries not otherwise listed herein (provide name of
obligor, date, original principal amount and current principal balance):

                                       Original      Current
          Entity          Obligor       Date         Amount          Balance

                                     K[1]-5
<PAGE>
     15. The following is a complete list of all bank accounts maintained by
Borrower or any of its Domestic Subsidiaries (provide name and address of
depository bank, type of account and account number):

               Depository           Bank         Type of           Account
    Entity        Bank            Address        Account            Number

     16. The following is a complete list of all investment accounts maintained
by Borrower (provide name and address of securities intermediary, type of
account and account number):

                  Securities       Intermediary's  Type of        Account
     Entity       Intermediary           Address        Account         Number

     17. Does Borrower or any of its Domestic Subsidiaries regularly receive
letters of credit from customers to secure payments of sums owed to such Person?

     Yes ____.  No ____.

     18. Does Borrower or any of its Domestic Subsidiaries regularly have
accounts receivable due from, or contracts with, the United States government or
any agency or department thereof?

     Yes ____.  No ____.

          If yes, indicate the percentage of Borrower's or such Domestic
     Subsidiary's total outstanding accounts receivable that are due from the
     United States government and agencies and departments thereof: ________%

                                     K[1]-7
<PAGE>
     19. Does Borrower or any of its Domestic Subsidiaries regularly receive
advance deposits from customers for goods not yet delivered to such customers?

     Yes ____. No ____.

     20. Does Borrower or any of its Domestic Subsidiaries regularly import
goods from outside the United States?

     Yes ____. No ____.

                                     K[1]-8
<PAGE>
                                    EXHIBIT L

                             INSURANCE ENDORSEMENTS

          1. Property Insurance. Each of the property insurance policies of
     Borrower and each of its Subsidiaries (individually, an "Insured Party")
     shall contain substantially the following endorsements:

               (a) Agent shall be named as additional loss payee.

               (b) In respect of the interests of Agent in the policies, the
          insurance shall not be invalidated by any action or by inaction of any
          Insured Party or by any Person having temporary possession of the
          property covered thereby (the "Property") while under contract with
          any Insured Party to perform maintenance, repair, alteration or
          similar work on the Property, and shall insure the interests of Agent
          regardless of any breach or violation of any warranty, declaration or
          condition contained in the insurance policy by any Insured Party or
          Agent or any other additional insured (other than by such additional
          insured, as to such additional insured) or by any Person having
          temporary possession of the Property while under contract with
          Borrower to perform maintenance, repair, alteration or similar work on
          the Property.

               (c) If the insurance policy is cancelled for any reason
          whatsoever, or substantial change is made in the coverage that affects
          the interests of Agent, or if the insurance coverage is allowed to
          lapse for non-payment of premium, such cancellation, change or lapse
          shall not be effective as to Agent for 30 days (or 10 days in the case
          of non-payment of premium) after receipt by Agent of written notice
          from the insurers of such cancellation, change or lapse.

               (d) Neither Agent nor any Lender shall have any obligation or
          liability for premiums, commissions, assessments, or calls in
          connection with the insurance.

               (e) The insurer shall waive any rights of set-off or counterclaim
          or any other deduction, whether by attachment or otherwise, that it
          may have against Agent and each Lender.

               (f) The insurance shall be primary without right of contribution
          from any other insurance that may be carried by Agent or any Lender
          with respect to its or their interest in the Property.

               (g) The insurer shall waive any right of subrogation against
          Agent and each Lender.

                                      L-1
<PAGE>
               (h) All provisions of the insurance, except the limits of
          liability, shall operate in the same manner as if there were a
          separate policy covering each insured party.

          2. Liability Insurance. Each of the liability insurance policies of
     each Insured Party shall contain substantially the following endorsements:

               (a) Agent shall be named as additional insured.

               (b) In respect of the interests of Agent in the policies, the
          insurance shall not be invalidated by any action or by inaction of any
          Insured Party or by any Person having temporary possession of the
          property covered thereby (the "Property") while under contract with
          any Insured Party to perform maintenance, repair, alteration or
          similar work on the Property, and shall insure the interests of Agent
          regardless of any breach or violation of any warranty, declaration or
          condition contained in the insurance policy by any Insured Party or
          Agent or any other additional insured (other than by such additional
          insured, as to such additional insured) or by any Person having
          temporary possession of the Property while under contract with
          Borrower to perform maintenance, repair, alteration or similar work on
          the Property; provided, however, that the foregoing shall not be
          deemed to (i) cause such insurance policies to cover matters otherwise
          excluded from coverage by the terms of such policies or (ii) require
          any insurance to remain in force notwithstanding non-payment of
          premiums except as provided in clause (c) below.

               (c) If the insurance policy is cancelled for any reason
          whatsoever, or substantial change is made in the coverage that affects
          the interests of Agent, or if the insurance coverage is allowed to
          lapse for non-payment of premium, such cancellation, change or lapse
          shall not be effective as to Agent for 30 days (or 10 days in the case
          of non-payment of premium) after receipt by Agent of written notice
          from the insurer of such cancellation, change or lapse.

               (d) Neither Agent nor any Lender shall have any obligation or
          liability for premiums, commissions, assessments, or calls in
          connection with the insurance.

               (e) The insurer shall waive any rights of set-off or counterclaim
          or any other deduction, whether by attachment or otherwise, that it
          may have against Agent and each Lender.

               (f) The insurance shall be primary without right of contribution
          from any other insurance that may be carried by Agent or any Lender
          with respect to their interests in the Property.

                                      L-2
<PAGE>
               (g) The insurer shall waive any right of subrogation against
          Agent and each Lender.

               (h) All provisions of the insurance, except the limits of
          liability, shall operate in the same manner as if there were a
          separate policy covering each insured party.

                                      L-3
<PAGE>

          This redlined draft, generated by CompareRite (TM) - The Instant
          Redliner, shows the differences between - original document :
          87757.10and revised document: 382903.3CompareRite found 71 change(s)
          in the textDeletions appear as Overstrike text Additions appear as
          Bold+Dbl Underline text

                                      L-4
<PAGE>

                                                               EXECUTION VERSION

                               FIRST AMENDMENT TO
                      AMENDED AND RESTATED CREDIT AGREEMENT

     THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this
"AMENDMENT"), dated as of August 17, 1999, is entered into by and among:

          (1) ADAC LABORATORIES, a California corporation ("BORROWER");

          (2) Each of the financial institutions listed in SCHEDULE I TO THE
     CREDIT AGREEMENT referred to in RECITAL A below (collectively, the
     "LENDERS"); and

          (3) ABN AMRO BANK N.V., a Netherlands public company acting through
     its San Francisco Representative Office, as agent for the Lenders (in such
     capacity, "AGENT").

                                    RECITALS

     A. Borrower, the Lenders and Agent are parties to an Amended and Restated
Credit Agreement dated as of March 29, 1999 (the "CREDIT AGREEMENT").

     B. Borrower has requested the Lenders and Agent to amend the Credit
Agreement in certain respects.

     C. The Lenders and Agent are willing so to amend the Credit Agreement and
to grant such waivers upon the terms and subject to the conditions set forth
below.

                                   AGREEMENT

     NOW, THEREFORE, in consideration of the above recitals and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Borrower, the Lenders and Agent hereby agree as follows:

     1. DEFINITIONS, INTERPRETATION. All capitalized terms defined above and
elsewhere in this Amendment shall be used herein as so defined. Unless otherwise
defined herein, all other capitalized terms used herein shall have the
respective meanings given to those terms in the Credit Agreement, as amended by
this Amendment. The rules of construction set forth in SECTION I OF THE CREDIT
AGREEMENT shall, to the extent not inconsistent with the terms of this
Amendment, apply to this Amendment and are hereby incorporated by reference.

     2. AMENDMENTS TO CREDIT AGREEMENT. Subject to the satisfaction of the
conditions set forth in Paragraph 4 below, the Credit Agreement is hereby
amended so as to incorporate all of the changes set forth in the marked version
of the Credit Agreement attached hereto as ATTACHMENT A.

<PAGE>

     3. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and warrants
to Agent and the Lenders that the following are true and correct on the date of
this Amendment and that, after giving effect to the amendments set forth in
PARAGRAPH 2 above, the following will be true and correct on the Effective Date
(as defined below):

          (a) The representations and warranties of Borrower and its
     Subsidiaries set forth in PARAGRAPH 4.01 OF THE CREDIT AGREEMENT and in the
     other Credit Documents are true and correct in all material respects;

          (b) No Default or Event of Default has occurred and is continuing; and

          (c) Each of the Credit Documents is in full force and effect.

(Without limiting the scope of the term "Credit Documents," Borrower expressly
acknowledges in making the representations and warranties set forth in this
PARAGRAPH 3 that, on and after the date hereof, such term includes this
Amendment.)

     4. EFFECTIVE DATE. The amendments effected by PARAGRAPH 2 above shall
become effective on the date on which Agent and the Lenders shall have received
the following, each in form and substance satisfactory to Agent, the Lenders and
their respective counsel (such date, the "EFFECTIVE DATE"):

          (a) This Amendment duly executed by Borrower, each Lender and Agent;

          (b) A letter in the form of ATTACHMENT B hereto appropriately
     completed and duly executed by each Guarantor;

          (c) A Subsidiary Joinder, duly executed by ADAC Capital, LLC, a
     Delaware limited liability company and a wholly-owned Subsidiary of
     Borrower ("ADAC CAPITAL");

          (d) The Borrower Security Agreement, duly executed by Borrower;

          (e) A Domestic Subsidiary Security Agreement from each Domestic
     Subsidiary, duly executed by each such Domestic Subsidiary;

          (f) The Borrower IP Security Agreement, duly executed by Borrower;

          (g) A Domestic Subsidiary IP Security Agreement from each Domestic
     Subsidiary, duly executed by each such Domestic Subsidiary;

          (h) The Pledge Agreement, duly executed by Borrower;

          (i) A Certificate of the Secretary of Borrower, dated the Effective
     Date, certifying that (i) the Articles of Incorporation and Bylaws of
     Borrower, in the form delivered to Agent on the Closing Date, are in full
     force and effect and have not been amended, supplemented, revoked or
     repealed since such date and (ii) that attached thereto

                                       2
<PAGE>

     are true and correct copies of resolutions duly adopted by the Board of
     Directors of Borrower and continuing in effect, which authorize the
     execution, delivery and performance by Borrower of this Amendment and the
     consummation of the transactions contemplated hereby, including without
     limitation, the grant by Borrower in favor of Agent for the benefit of the
     Lenders of a security interest in the Collateral;

          (j) A Certificate of the Secretary of each Domestic Subsidiary (other
     than ADAC Capital), dated the Effective Date, certifying that (i) the
     Articles of Incorporation and Bylaws of such Domestic Subsidiary, in the
     form delivered to Agent on the Closing Date, are in full force and effect
     and have not been amended, supplemented, revoked or repealed since such
     date and (ii) that attached thereto are true and correct copies of
     resolutions duly adopted by the Board of Directors of such Domestic
     Subsidiary and continuing in effect, which authorize the execution,
     delivery and performance by such Domestic Subsidiary of the Credit
     Documents executed or to be executed by such Subsidiary in connection with
     this Amendment and the consummation of the transactions contemplated hereby
     and thereby, including without limitation, the grant by each such Domestic
     Subsidiary in favor of Agent for the benefit of the Lenders of a security
     interest in such Domestic Subsidiary's Collateral;

          (k) A Certificate of the Secretary of ADAC Capital, dated the
     Effective Date, certifying that (i) attached thereto are true and correct
     copies of the Articles of Organization and Operating Agreement of ADAC
     Capital as in effect on the Effective Date and (ii) that attached thereto
     are true and correct copies of resolutions duly adopted by the Board of
     Directors of ADAC Capital and continuing in effect, which authorize the
     execution, delivery and performance by ADAC Capital of the Credit Documents
     executed or to be executed by ADAC Capital in connection with this
     Amendment and the consummation of the transactions contemplated hereby and
     there, including without limitation, the grant by ADAC Capital in favor of
     Agent for the benefit of the Lenders of a security interest in ADAC
     Capital's Collateral;

          (l) The Collateral Certificate, duly executed by Borrower on behalf of
     itself and its Domestic Subsidiaries;

          (m) Such Uniform Commercial Code financing statements and fixture
     filings (appropriately completed and executed) for filing in such
     jurisdictions as Agent may request to perfect the Liens granted to Agent in
     the Credit Agreement (as amended by this Amendment), the Security Documents
     and the other Credit Documents;

          (n) Such Uniform Commercial Code termination statements (appropriately
     completed and executed) for filing in such jurisdictions as Agent may
     request to terminate any financing statement evidencing Liens of other
     Persons in the Collateral which are prior to the Liens granted to Agent in
     the Credit Agreement (as amended by this Amendment), the Security Documents
     and the other Credit Documents, except for any such prior Liens which are
     expressly permitted by the Credit Agreement to be prior;

                                       3
<PAGE>

          (o) Uniform Commercial Code search certificates from the jurisdictions
     in which Uniform Commercial Code financing statements are to be filed
     pursuant to ITEM (k) above reflecting no other financing statements or
     filings which evidence Liens of other Persons in the Collateral which are
     prior to the Liens granted to Agent in the Credit Agreement (as amended by
     this Amendment), the Security Documents and the other Credit Documents,
     except for any such prior Liens (i) which are expressly permitted by the
     Credit Agreement to be prior or (b) for which Agent has received a
     termination statement pursuant to ITEM (n) above;

          (p) The stock certificates representing all of the outstanding capital
     stock of each Subsidiary of Borrower pledged to Agent pursuant to the
     Pledge Agreement and existing on the Effective Date, together with undated
     stock powers duly executed by Borrower in blank and attached thereto;

          (q) To the extent requested by Agent or the Required Lenders, a Notice
     of Security Interest in Deposit Account in the form of ATTACHMENT 2 TO THE
     BORROWER SECURITY AGREEMENT and ATTACHMENT 2 TO THE DOMESTIC SUBSIDIARY
     SECURITY AGREEMENT (as applicable) for each bank at which Borrower or a
     Domestic Subsidiary maintains a deposit account, each appropriately
     completed, duly executed by Borrower or such Domestic Subsidiary, as
     appropriate, and Agent and acknowledged by the depositary bank to which
     addressed;

          (r) Appropriate documents for filing with the United States Patent and
     Trademark Office and all other filings necessary to perfect the security
     interests granted to Agent by the Borrower IP Security Agreement and the
     Domestic Subsidiary IP Security Agreement (as applicable), all
     appropriately completed and duly executed by Borrower or such Domestic
     Subsidiary (as applicable) and, where appropriate, notarized;

          (s) A Power of Attorney in the form of ATTACHMENT 4 TO THE BORROWER IP
     SECURITY AGREEMENT and ATTACHMENT 4 TO THE DOMESTIC SUBSIDIARY IP SECURITY
     AGREEMENT (as applicable), dated the Effective Date and otherwise
     appropriately completed, duly executed by Borrower and notarized;

          (t) Such other documents, instruments and agreements as Agent may
     reasonably request to establish and perfect the Liens granted to Agent or
     any Lender in the Credit Agreement (as amended by this Amendment), the
     Security Documents and the other Credit Documents;

          (u) Such other evidence as Agent may request to establish that the
     Liens granted to Agent or any Lender in the Credit Agreement (as amended by
     this Amendment), the Security Documents and the other Credit Documents are
     perfected and prior to the Liens of other Persons in the Collateral, except
     for any such Liens which are expressly permitted by the Credit Agreement to
     be prior;

          (v) A favorable written opinion of legal counsel for the Borrower and
     the Domestic Subsidiaries, dated the Effective Date, addressed to Agent for
     the benefit of

                                       4
<PAGE>

     Agent and the Lenders, covering such legal matters as Agent may reasonably
     request and otherwise in form and substance satisfactory to Agent;

          (w) Certificates of insurance evidencing the insurance Borrower is
     required to maintain pursuant to SUBPARAGRAPH 5.01(d) OF THE CREDIT
     AGREEMENT, together with endorsements thereto as required by such
     subparagraph and EXHIBIT L TO THE CREDIT AGREEMENT;

          (x) The new Agent's Fee Letter, duly executed by Borrower, in form and
     substance satisfactory to Agent;

          (y) An amended Disclosure Letter, duly executed by Borrower and dated
     the Effective Date;

          (z) A nonrefundable amendment fee equal to 0.375% of each Lender's
     Commitment; and

          (aa) Such other evidence as Agent or any Lender may reasonably request
     to establish the accuracy and completeness of the representations and
     warranties and the compliance with the terms and conditions contained in
     this Amendment and the other Credit Documents.

     5. EFFECT OF THIS AMENDMENT. On and after the Effective Date, each
reference in the Credit Agreement and the other Credit Documents to the Credit
Agreement shall mean the Credit Agreement as amended hereby. Except as
specifically amended above, (a) the Credit Agreement and the other Credit
Documents shall remain in full force and effect and are hereby ratified and
confirmed and (b) the execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power, or remedy of the Lenders or Agent, nor constitute a waiver of any
provision of the Credit Agreement or any other Credit Document.

     6. MISCELLANEOUS.

          (a) COUNTERPARTS. This Amendment may be executed in any number of
     identical counterparts, any set of which signed by all the parties hereto
     shall be deemed to constitute a complete, executed original for all
     purposes.

          (b) HEADINGS. Headings in this Amendment are for convenience of
     reference only and are not part of the substance hereof.

          (c) GOVERNING LAW. This Amendment shall be governed by and construed
     in accordance with the laws of the State of California without reference to
     conflicts of law rules.

                                       5
<PAGE>

     IN WITNESS WHEREOF, Borrower, Agent and the Lenders have caused this
Amendment to be executed as of the day and year first above written.

BORROWER:                          ADAC LABORATORIES

                                   By:
                                      ------------------------------------------
                                      Name: R. Andrew Eckert

                                      Title: Chief Executive Officer

AGENT:                             ABN AMRO BANK N.V.

                                   By:
                                      ------------------------------------------
                                      Name:
                                           -------------------------------------
                                      Title:
                                            ------------------------------------

                                   By:
                                      ------------------------------------------
                                      Name:
                                           -------------------------------------
                                      Title:
                                            ------------------------------------

LENDERS:                           ABN AMRO BANK N.V.

                                   By:
                                      ------------------------------------------
                                      Name:
                                           -------------------------------------
                                      Title:
                                            ------------------------------------

                                   By:
                                      ------------------------------------------
                                      Name:
                                           -------------------------------------
                                      Title:
                                            ------------------------------------

                                   SANWA BANK CALIFORNIA

                                   By:
                                      ------------------------------------------
                                      Name:
                                           -------------------------------------
                                      Title:
                                            ------------------------------------

                                       6
<PAGE>

                                   BANQUE NATIONALE DE PARIS

                                   By:
                                      ------------------------------------------
                                      Name:
                                           -------------------------------------
                                      Title:
                                            ------------------------------------

                                   By:
                                      ------------------------------------------
                                      Name:
                                           -------------------------------------
                                      Title:
                                            ------------------------------------

                                   UNION BANK OF CALIFORNIA, N.A.

                                   By:
                                      ------------------------------------------
                                      Name:
                                           -------------------------------------
                                      Title:
                                            ------------------------------------

                                   WELLS FARGO BANK, N.A.

                                   By:
                                      ------------------------------------------
                                      Name:
                                           -------------------------------------
                                      Title:
                                            ------------------------------------

                                       7
<PAGE>

                                  ATTACHMENT A

               SEE ATTACHED MARKED VERSION OF THE CREDIT AGREEMENT
           ATTACHED HERETO AND INCORPORATED HEREIN BY THIS REFERENCE.

                                       A-1
<PAGE>

                                  ATTACHMENT B

                            GUARANTOR CONSENT LETTER

                                ___________, 1999

TO:  ABN AMRO BANK, N.V.,
     As Agent for the Lenders under the Credit Agreement referred to below

     1. Reference is made to the following:

          (a) The Amended and Restated Credit Agreement dated as of March 29,
     1999 (the "Credit Agreement") among ADAC Laboratories ("Borrower"), the
     financial institutions which are from time to time parties thereto (the
     "Lenders"), and ABN AMRO Bank, as agent for the Lenders ("Agent");

          (b) The Amended and Restated Guaranty dated as of March 29, 1999 (the
     "Guaranty") executed by each of undersigned (each a "Guarantor," and
     collectively, the "Guarantors") in favor of the Lenders and Agent; and

          (c) The First Amendment to Credit Agreement dated as of August 17,
     1999 (the "First Amendment") among Borrower, the Lenders and Agent.

     2. Each Guarantor hereby consents to the First Amendment. Each Guarantor
expressly agrees that such amendment shall in no way affect or alter the rights,
duties, or obligations of Guarantor, the Lenders or Agent under the Guaranty.

     3. From and after the date hereof, the term "Credit Agreement" as used in
the Guaranty shall mean the Credit Agreement, as amended by the First Amendment.

     4. The Guarantors' consent to the First Amendment shall not be construed
(i) to have been required by the terms of the Guaranty or any other document,
instrument or agreement relating thereto or (ii) to require the consent of the
Guarantors in connection with any future amendment of the Credit Agreement or
any other Credit Document.

     IN WITNESS WHEREOF, each Guarantor has executed this Guarantor Consent
Letter as of the day and year first written above.

                                   ADAC RESEARCH AND MFG., INC.

                                   By:
                                      ------------------------------------------
                                      Name:
                                           -------------------------------------
                                      Title:
                                            ------------------------------------

                                      A-1
<PAGE>

                                   ADAC HEALTHCARE INFORMATION
                                   SYSTEMS, INC.

                                   By:
                                      ------------------------------------------
                                      Name:
                                           -------------------------------------
                                      Title:
                                            ------------------------------------

                                   ADAC MEDICAL TECHNOLOGIES, INC.

                                   By:
                                      ------------------------------------------
                                      Name:
                                           -------------------------------------
                                      Title:
                                            ------------------------------------

                                   ADAC LABORATORIES PACIFIC, INC.

                                   By:
                                      ------------------------------------------
                                      Name:
                                           -------------------------------------
                                      Title:
                                            ------------------------------------

                                   ADAC HEALTHCARE PARTNERS, INC.

                                   By:
                                      ------------------------------------------
                                      Name:
                                           -------------------------------------
                                      Title:
                                            ------------------------------------

                                   ADAC RADIOLOGY SERVICES, INC.

                                   By:
                                      ------------------------------------------
                                      Name:
                                           -------------------------------------
                                      Title:
                                            ------------------------------------

                                   CORTET, INC.

                                   By:
                                      ------------------------------------------
                                      Name:
                                           -------------------------------------
                                      Title:
                                            ------------------------------------

                                      A-2
<PAGE>

                                   O.N.E.S. MEDICAL SERVICES, INC.

                                   By:
                                      ------------------------------------------
                                      Name:
                                           -------------------------------------
                                      Title:
                                            ------------------------------------

                                   CT SOLUTIONS INC.

                                   By:
                                      ------------------------------------------
                                      Name:
                                           -------------------------------------
                                      Title:
                                            ------------------------------------

                                      A-3<PAGE>

                                                                   Exhibit 10.17

                  FIRST AMENDMENT, dated as of October 22, 1999 (this
"AMENDMENT"), to the Credit Agreement, dated as of April 29, 1998, (the "CREDIT
AGREEMENT"), among GROVE WORLDWIDE LLC, a Delaware limited liability company
(the "COMPANY"), GROVE CAPITAL, INC., a Delaware corporation and a Wholly Owned
Subsidiary of the Company ("GROVE CAPITAL"; the Company and Grove Capital,
individually, a "BORROWER" and collectively, the "BORROWERS"), the several banks
and other financial institutions or entities from time to time parties to this
Agreement (collectively, the "LENDERS"; individually, a "LENDER"), CHASE BANK OF
TEXAS, NATIONAL ASSOCIATION, as Administrative Agent (as hereinafter defined)
for the Lenders hereunder, BANKBOSTON, N.A., as syndication agent (in such
capacity, the "SYNDICATION AGENT") for the Lenders hereunder, and DONALDSON,
LUFKIN & JENRETTE SECURITIES CORPORATION, as documentation agent (in such
capacity, the "DOCUMENTATION AGENT") for the Lenders hereunder.

                              W I T N E S S E T H:

                  WHEREAS, pursuant to the Credit Agreement, the Lenders have
agreed to make, and have made, certain loans and other extensions of credit to
the Borrowers; and

                  WHEREAS, the Borrowers have requested, and, upon this
Amendment becoming effective, the Required Lenders have agreed, that certain
provisions of the Credit Agreement be amended in the manner provided for in this
Amendment.

                  NOW, THEREFORE, the parties hereto hereby agree as follows:

                  1. DEFINED TERMS. Terms defined in the Credit Agreement and
used herein shall have the meanings given to them in the Credit Agreement.

                  2. AMENDMENTS TO SECTION 1.1 OF THE CREDIT AGREEMENT. (a)
Section 1.1 of the Credit Agreement is hereby amended by deleting the definition
of "CONSOLIDATED EBITDA" and substituting in lieu thereof the following
definition:

                     "CONSOLIDATED EBITDA": for any period, Consolidated Net
Income for such period PLUS, without duplication and to the extent reflected as
a charge in the statement of such Consolidated Net Income for such period, the
sum of (a) income tax expense and distributions to the direct and indirect
members of Holdings in lieu of taxes, (b) Consolidated Interest Expense,
non-cash interest expense not included in Consolidated Interest Expense,
amortization or writeoff of debt discount and debt issuance costs and
commissions, discounts and other fees and charges associated with Indebtedness
(including the Loans), (c) depreciation and amortization expense and other
non-cash charges, (d) amortization of intangibles (including goodwill) and
organization costs, (e) the aggregate amount of up-front or one-time fees or
expenses payable in respect of Interest Rate Protection Agreements during such
period (to the

<PAGE>
                                                                               2

extent deducted in determining Consolidated Net Income for such period), (f) for
the periods of four consecutive fiscal quarters of the Company ended September
30, 1999, December 31, 1999, March 31, 2000, June 30, 2000 and September 30,
2000, the direct and indirect costs of implementing new management information
systems (including, without limitation, productivity losses and overtime and
systems support expenses) as reasonably estimated by the Company and reported to
the Administrative Agent, not to exceed the amount set forth below:

<TABLE>
<CAPTION>

                             Four Quarters
                                 Ended                            Amount
                             --------------                       ------
                           <S>                                <C>
                           September 30, 1999                 $17,700,000
                           December 31, 1999                   15,500,000
                           March 31, 2000                      13,000,000
                           June 30, 2000                        9,300,000
                           September 30, 2000                   6,000,000
</TABLE>

PLUS (g) for the periods of four consecutive fiscal quarters of the Company
ended September 30, 1999, December 31, 1999, March 31, 2000, June 30, 2000 and
September 30, 2000, severance charges (which severance charges shall not exceed,
for the four consecutive fiscal quarters ended September 30, 1999 only,
$600,000), PLUS (h) the amount of unrealized foreign exchange losses (net of any
gains) (or MINUS the amount of unrealized foreign exchange gains (net of any
losses)) MINUS, to the extent included in the statement of such Consolidated Net
Income for such period, other non-cash income.

                  (b) Section 1.1 of the Credit Agreement is hereby amended by
deleting the definition of "PERMITTED ACQUISITION" and substituting in lieu
thereof the following definition:

                      "PERMITTED ACQUISITION":  any acquisition of a Person,
division or line of business in the same or related line of business by the
Company or any of its Subsidiaries for a purchase price (including any
Indebtedness assumed and continuing outstanding), together with the aggregate
purchase price paid in connection with other such acquisitions since the Closing
Date, of up to an amount of $50,000,000; PROVIDED that (i) the Company receives
approval from Required Lenders to any such acquisitions completed prior to the
date which is 12 months after the Amendment Effective Date; (ii) at any time of
such acquisition, based upon the assumption that such acquisition and any
additional Indebtedness incurred to finance such acquisition had been
consummated and incurred at the beginning of the most recently completed four
fiscal quarter period, and taking into account the earnings (or loss) of the
acquired Person, division or business line during such period and, anticipated
cost savings resulting from such acquisition, the Company shall, based upon PRO
FORMA financial statements reviewed (including as to the anticipated cost
savings) by the Company's independent public accountants, be in PRO FORMA
compliance with the provisions of Section 7.1 and have a PRO FORMA Consolidated
Fixed Charge Coverage Ratio of 1.10 to 1.0 and (iii) no Default or Event of
Default shall have occurred and be continuing.

<PAGE>
                                                                               3

                  3. AMENDMENT TO SECTION 4.16 OF THE CREDIT AGREEMENT. Section
4.16 of the Credit Agreement is hereby amended and restated in its entirety as
follows:

                     The proceeds of the Term Loans shall be used to finance a
portion of the Acquisition and to pay related fees and expenses. The proceeds of
the Revolving Credit Loans and/or the Swing Line Loans shall be used (a) to
finance a portion of the Acquisition and to pay related fees and expenses, (b)
to finance Permitted Acquisitions and (c) for general corporate purposes of the
Borrowers and their Subsidiaries; PROVIDED that no more than $60,000,000 of such
proceeds shall be used for purposes referred to in clause (c) until the delivery
of the first set of consolidated financial statements on or after December 31,
1999 showing that for the four fiscal quarters ending with the last fiscal
quarter covered by such consolidated financial statements, a Consolidated Fixed
Charge Coverage Ratio (but using as the definition of "CONSOLIDATED EBITDA" for
purposes of determining such Consolidated Fixed Charge Coverage Ratio the
definition thereof as in effect prior to the First Amendment dated as of October
22, 1999 to this Agreement) of 1.30 to 1.0.

                  4. AMENDMENT TO SECTION 7.1(B) OF THE CREDIT AGREEMENT.
Section 7.1(b) of the Credit Agreement is hereby amended by deleting the table
and substituting in lieu thereof the following table:

<TABLE>
<CAPTION>

                                                                      Consolidated Fixed
                    Period                                            Charge Coverage Ratio
                    ------                                            ---------------------
                  <S>                                                       <C>
                  Closing Date to 6/30/1999                                 1.05 to 1.0
                  9/30/1999 to 3/31/2000                                    1.00 to 1.0
                  6/30/2000 to 12/31/2001                                   1.10 to 1.0
                  3/31/2002 to 12/31/2002                                   1.15 to 1.0
                  3/31/2003 to 12/31/2003                                   1.25 to 1.0
                  3/31/2004 to 12/31/2004                                   1.50 to 1.0
                  3/31/2005 to 12/31/2005                                   1.75 to 1.0
                  thereafter                                                2.00 to 1.0
</TABLE>

                  5. AMENDMENT TO ANNEX A OF THE CREDIT AGREEMENT. Annex A of
the Credit Agreement is hereby amended by deleting the Pricing Grid therein and
substituting in lieu thereof the Pricing Grid attached hereto as Annex A.

                  6. CONDITIONS TO EFFECTIVENESS. This Amendment shall become
effective on the date (the "AMENDMENT EFFECTIVE DATE") first set forth above
upon the Administrative Agent having received counterparts of this Amendment
duly executed and delivered by the Borrowers and the Required Lenders together
with a Consent to this Amendment duly executed and delivered by the Loan
Parties.

<PAGE>
                                                                               4

                  7. REPRESENTATION AND WARRANTIES. To induce the Agents and the
Lenders parties hereto to enter into this Amendment, each Borrower hereby
represents and warrants to the Agents and all of the Lenders as of the Amendment
Effective Date that: the unaudited consolidated balance sheet of the Company and
its consolidated Subsidiaries as at June 30, 1999 and the related unaudited
consolidated statements of income and of cash flows for the nine-month period
ended on such date, certified by a Responsible Officer, copies of which have
heretofore been furnished to each Lender, are complete and correct and present
fairly the consolidated financial condition of the Company and its consolidated
Subsidiaries as at such date, and the consolidated results of their operations
and their consolidated cash flows for the nine-month period then ended (subject
to normal year-end audit adjustments).

                  8. AFFIRMATION. The Borrowers and Lenders agree that the
amendments herein to the definition of Consolidated EBITDA and Section 7.1(b) of
the Credit Agreement, shall be effective for purposes of calculating the
Consolidated Fixed Charge Coverage Ratio pursuant to and complying with Section
7.1(b) of the Credit Agreement for the period ending October 2, 1999.

                  9. GENERAL. (a) PAYMENT OF EXPENSES. The Borrowers jointly and
severally agree to pay or reimburse the Administrative Agent for all of its
out-of-pocket costs and reasonable expenses incurred in connection with this
Amendment, any other documents prepared in connection herewith and the
transactions contemplated hereby, including, without limitation, the reasonable
fees and disbursements of counsel to the Administrative Agent.

                  (b) NO OTHER AMENDMENTS; CONFIRMATION. Except as expressly
amended, modified and supplemented hereby, the provisions of the Credit
Agreement and the Notes are and shall remain in full force and effect.

                  (c) GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

                  (d) COUNTERPARTS. This Amendment may be executed by one or
more of the parties to this Amendment on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument. A set of the copies of this Amendment signed by all the
parties shall be lodged with each Borrower and the Administrative Agent.

                  (e) SUCCESSORS. The execution and delivery of this Amendment
by any Lender

<PAGE>
                                                                               5

 shall be binding upon each of its successors and assigns (including
Transferees of its commitments and Loans in whole or in part prior to
effectiveness hereof) and binding in respect of all of its Revolving Credit
Commitment and Loans.

<PAGE>
                                                                               6

                 [THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.]

<PAGE>
                                                                               7

                  IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective proper and duly
authorized officers as of the day and year first above written.

                                GROVE WORLDWIDE LLC

                                By:________________________
                                Name:
                                Title:

                                GROVE CAPITAL, INC.

                                By:________________________
                                Name:
                                Title:

                                CHASEBANK OF TEXAS, NATIONAL
                                  ASSOCIATION, as Administrative Agent,
                                  Swing Line Lender, Issuing Lender and a
                                  Lender

                                By:________________________
                                Name:
                                Title:

                                BANKBOSTON, N.A., as Syndication Agent
                                 and as a Lender

                                By:________________________
                                Name:
                                Title:

<PAGE>
                                                                               8

                                DONALDSON, LUFKIN & JENRETTE
                                  SECURITIES CORPORATION, as
                                  Documentation Agent and as a Lender

                                By:________________________
                                Name:
                                Title:

                                ARCHIMEDES FUNDING, L.L.C.

                                By:________________________
                                Name:
                                Title:

                                BALANCED HIGH-YIELD FUND I LTD.

                                By:________________________
                                Name:
                                Title:

                                THE BANK OF NEW YORK

                                By:________________________
                                Name:
                                Title:

                                BHF (USA) CAPITAL CORPORATION

                                By:________________________
                                Name:
                                Title:

<PAGE>
                                                                               9

                                BHF-BANK AKTIENGESELLSCHAFT

                                By:________________________
                                Name:
                                Title:

                                CERES FINANCE, LTD.

                                By:________________________
                                Name:
                                Title:

                                COMERICA BANK

                                By:________________________
                                Name:
                                Title:

                                CONTINENTAL ASSURANCE COMPANY

                                By:________________________
                                Name:
                                Title:

                                CREDIT LYONNAIS NEW YORK BRANCH

                                By:________________________
                                Name:
                                Title:

<PAGE>
                                                                              10

                                CYPRESSTREE INVESTMENT FUND, LLC
                                BY:  CYPRESSTREE INVESTMENT
                                MANAGEMENT COMPANY, INC., its Managing
                                Member

                                By:________________________
                                Name:
                                Title:

                                CYPRESSTREE INVESTMENT PARTNERS II,
                                LTD.,
                                BY:  CYPRESSTREE INVESTMENT
                                MANAGEMENT COMPANY, INC., as Portfolio
                                Manager

                                By:________________________
                                Name:
                                Title:

                                ELC (CAYMAN) LTD.

                                By:________________________
                                Name:
                                Title:

                                FLEET NATIONAL BANK

                                By:________________________
                                Name:
                                Title:

<PAGE>
                                                                              11

                                FLEET BUSINESS CREDIT CORPORATION

                                By:________________________
                                Name:
                                Title:

                                FREMONT INVESTMENT AND LOAN

                                By:________________________
                                Name:
                                Title:

                                GENERAL ELECTRIC CAPITAL CORP

                                By:________________________
                                Name:
                                Title:

                                KZH CRESCENT 2 LLC

                                By:________________________
                                Name:
                                Title:

                                KZH CRESCENT 3 LLC

                                By:________________________
                                Name:
                                Title:

                                KZH CRESCENT LLC

<PAGE>
                                                                              12

                                By:________________________
                                Name:
                                Title:

                                KZH III LLC

                                By:________________________
                                Name:
                                Title:

                                KZH RIVERSIDE LLC

                                By:________________________
                                Name:
                                Title:

                                KZH CYPRESS TREE-1 LLC

                                By:________________________
                                Name:
                                Title:

                                MASSACHUSETTS MUTUAL LIFE
                                INSURANCE

                                By:________________________
                                Name:
                                Title:

                                OAK HILL SECURITIES FUND, L.P.

<PAGE>
                                                                              13

                                By:________________________
                                Name:
                                Title:

                                OASIS COLLATERALIZED HIGH INCOME
                                PORTFOLIO

                                By:________________________
                                Name:
                                Title:

                                BANQUE PARIBAS

                                By:________________________
                                Name:
                                Title:

                                SEQUILS I, LTD.

                                By:________________________
                                Name:
                                Title:

                                SOCIETE GENERALE

                                By:________________________
                                Name:
                                Title:

<PAGE>
                                                                              14

                                SOMERS CDO, LIMITED

                                By:________________________
                                Name:
                                Title:

                                U.S. BANK NATIONAL ASSOCIATION

                                By:________________________
                                Name:
                                Title:

                                WELLS FARGO BANK, N.A.

                                By:________________________
                                Name:
                                Title:

<PAGE>
                                                                              15

                  Each of the undersigned hereby consents to the foregoing
Amendment and hereby confirms, reaffirms and restates that its obligations under
or in respect of the Credit Agreement and the documents related thereto to which
it is party are and shall remain in full force and effect after giving effect to
the foregoing Amendment and agrees and confirms, in the case of National Crane
Corporation, that it is a party to the Guarantee and Collateral Agreement as a
Grantor thereunder:

                                GROVE HOLDINGS LLC

                                By:      ________________________
                                Title:

                                GROVE WORLDWIDE LLC

                                By:      ________________________
                                Title:

                                GROVE CAPITAL, INC.

                                By:      ________________________
                                Title:

                                GROVE U.S. LLC

                                By:      ________________________
                                Title:

                                CRANE ACQUISITION CORPORATION

                                By:      ________________________
                                Title:

<PAGE>
                                                                              16

                                CRANE HOLDING INC.

                                By:       _______________________
                                Title:

                                GROVE FINANCE LLC

                                By:      ________________________
                                Title:

                                NATIONAL CRANE CORPORATION

                                By:      ________________________
                                Title:

<PAGE>
                                                                              17

<TABLE>
<CAPTION>

                                                                                                               ANNEX A

                                                                 PRICING GRID

                                              Revolving        Revolving
                                                Credit           Credit         Term Loan        Term Loan
                             Fixed            Applicable       Applicable      Applicable       Applicable
                             Charge           Margin for       Margin for      Margin for       Margin for
                            Coverage         Eurocurrency      Base Rate      Eurocurrency      Base Rate      Commitment
                             Ratio              Loans            Loans           Loans            Loans         Fee Rate

<S>                        <C>                <C>             <C>             <C>             <C>              <C>
Greater than or equal to   2.5 to 1.0         2.500%          1.500%          3.000%          2.000%           .500%
Greater than or equal to   2.0 to 1.0         2.750%          1.750%          3.250%          2.250%           .500%
Less than                  2.0 to 1.0         3.000%          2.000%          3.500%          2.500%           .500%
                        ================  ==============  ==============  ===============  ==============  ============

</TABLE>

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