Document:

<PAGE>

                                  TERM NOTE B-2

<TABLE>
<CAPTION>
<S><C>
--------------------------------------------------------------------------------
Debtor's Name: Specialty Laboratories, Inc.
--------------------------------------------------------------------------------
Debtor's Address:                          Office: #210       Loan Number
2211 Michigan Avenue
Santa Monica, California 90404
                                           -------------------------------------
                                           Maturity Date:     Amount
                                           February 1, 2004   $6,186,491.56
------------------------------------------------------------- ------------------
</TABLE>

Santa Monica, California         $6,186,491.56          Date: February 17, 1999

FOR VALUE RECEIVED, on February 1, 2004 (the "Maturity Date"), the undersigned
("Debtor") promises to pay to the order of UNION BANK OF CALIFORNIA, N.A.
("Bank"), as indicated below, the principal sum of Six Million One Hundred
Eighty-Six Thousand Four Hundred Ninety-One and 56/100 Dollars ($6,186,491.56),
or so much thereof as is disbursed, together with interest on the balance of
such principal from time to time outstanding, at the per annum rate or rates and
at the times set forth below. This Term Note B-2 (this "Note") is the Term Note
B-2 described in the Amended and Restated Loan Agreement (as such term is
defined hereinbelow) and is governed by the terms and conditions thereof.

1. PAYMENTS.

         PRINCIPAL PAYMENTS. Debtor shall pay principal in forty-eight (48)
equal consecutive monthly installments, each in an amount equal to one-sixtieth
(1/60th) of the outstanding principal amount hereof on February 1, 2000,
beginning February 1, 2000, and continuing on the first day of each month
thereafter. On the Maturity Date, all outstanding principal and accrued but
unpaid interest shall be due and payable. The availability under this Note shall
be reduced on the same day and in the same amount as each scheduled principal
payment.

         INTEREST PAYMENTS. Debtor shall pay interest on the first day of each
month; commencing March 1, 1999. Should interest not be paid when due, it shall
become part of the principal and bear interest as herein provided. All
computations of interest under this Note shall be made on the basis of a year of
360 days, for actual days elapsed.

         a. BASE INTEREST RATE. At Debtor's option, amounts outstanding
         hereunder in increments of at least One Hundred Thousand Dollars
         ($100,000) shall bear interest at a rate, based on an index selected by
         Debtor, equal to Bank's LIBOR Rate for the Interest Period selected by
         Debtor plus the LIBOR Rate Margin.

                                       1
<PAGE>

         Any Base Interest Rate may not be changed, altered or otherwise
         modified until the expiration of the Interest Period selected by
         Debtor. The exercise of interest rate options by Debtor shall be as
         recorded in Bank's records, which records shall be prima facie evidence
         of the amount borrowed as a Base Interest Rate Loan and the interest
         rate; provided, however, that failure of Bank to make any such notation
         in its records shall not discharge Debtor from its obligation to repay
         in full with interest all amounts borrowed. In no event shall any
         Interest Period extend beyond the Maturity Date.

         To exercise this option, Debtor may, from time to time with respect to
         principal outstanding on which the Base Interest Rate is not accruing,
         and on the expiration of any Interest Period with respect to principal
         outstanding on which the Base Interest Rate has been accruing, select
         an index offered by Bank for a Base Interest Rate Loan and an Interest
         Period by telephoning an authorized lending officer of Bank located at
         the banking office identified below prior to 10:00 a.m., Pacific time,
         on any Business Day and advising that officer of the selected index,
         the Interest Period and the Origination Date selected (which
         Origination Date shall follow the date of such selection by no more
         than two (2) Business Days).

         Bank will mail a written confirmation of the terms of the selection to
         Debtor promptly after the selection is made. Failure to send such
         confirmation shall not affect Bank's rights to collect interest at the
         rate selected. If, on the date of the selection, the index is
         unavailable for any reason, the selection shall be void. Bank reserves
         the right to fund the principal from any source of funds.

         b. VARIABLE INTEREST RATE. All principal outstanding hereunder which is
         not bearing interest at a Base Interest Rate shall bear interest at a
         rate per annum equal to the Reference Rate, which rate shall vary as
         and when the Reference Rate changes.

         Debtor shall pay all amounts due under this Note in lawful money of the
         United States at Bank's Los Angeles Headquarters Commercial Banking
         Office, or such other office as may be designated by Bank, from time to
         time.

2. LATE PAYMENTS. If any payment required by the terms of this Note shall remain
unpaid ten days after same is due, at the option of Bank, Debtor shall pay a fee
of $100 to Bank.

3. INTEREST RATE FOLLOWING DEFAULT. In the event of default, at the option of
Bank, and, to the extent permitted by law, interest shall be payable on the
outstanding principal under this Note at a per annum rate equal to five percent
(5%) in excess of the interest rate specified in paragraph 1.b, above,
calculated from the date of default until all amounts payable under this Note
are paid in full.

4. PREPAYMENT.

         a. Amounts outstanding under this Note bearing interest at a rate based
         on the Reference Rate may be prepaid in whole or in part at any time,
         without penalty or premium. Amounts outstanding under this Note bearing
         interest at the Base Interest

                                       2
<PAGE>

         Rate may only be prepaid, in whole or in part, provided that Bank has
         received not less than five (5) Business Days' prior written notice of
         an intention to make such prepayment and Debtor pays a prepayment fee
         to Bank in an amount equal to the present value of the product of: (i)
         the difference (but not less than zero) between (a) the Base Interest
         Rate applicable to the principal amount which Debtor intends to prepay
         and (b) the return which Bank could obtain if it used the amount of
         such prepayment of principal to purchase at bid price regularly quoted
         securities issued by the United States having a maturity date most
         closely coinciding with the relevant Base Rate Maturity Date and such
         securities were held by Bank until the relevant Base Rate Maturity Date
         ("Yield Rate"); (ii) a fraction, the numerator of which is the number
         of days in the period between the date of prepayment and the relevant
         Base Rate Maturity Date and the denominator of which is 360; and (iii)
         the amount of the principal so prepaid (except in the event that
         principal payments are required and have been made as scheduled under
         the terms of the Base interest Rate Loan being prepaid, then an amount
         equal to the lesser of (A) the amount prepaid or (B) fifty percent
         (50%) of the sum of (1) the amount prepaid and (2) the amount of
         principal scheduled under the terms of the Base Interest Rate Loan
         being prepaid to be outstanding at the relevant Base Rate Maturity
         Date). Present value under this Note is determined by discounting the
         above product to present value using the Yield Rate as the annual
         discount factor.

         b. In no event shall Bank be obligated to make any payment or refund to
         Debtor, nor shall Debtor be entitled to any setoff or other claim
         against Bank, should the return which Bank could obtain under the above
         prepayment formula exceed the interest that Bank would have received if
         no prepayment had occurred. All prepayments shall include payment of
         accrued interest on the principal amount so prepaid and shall be
         applied to payment of interest before application to principal. A
         determination by Bank as to the prepayment fee amount, if any, shall be
         conclusive.

         c. Such prepayment fee, if any, shall also be payable if prepayment
         occurs as the result of the acceleration of the principal of this Note
         by Bank because of any default hereunder. If, following such
         acceleration, all or any portion of a Base Interest Rate Loan is
         satisfied, whether through sale of property encumbered by any security
         agreement or other agreement securing this Note, at a foreclosure sale
         held thereunder or through the tender of payment at any time following
         such acceleration, but prior to such a foreclosure sale, then such
         satisfaction shall be deemed an evasion of the prepayment conditions
         set forth above, and Bank shall, automatically and without notice or
         demand, be entitled to receive, concurrently with such satisfaction the
         prepayment fee set forth above, and the amount of such prepayment fee
         shall be added to the principal. DEBTOR HEREBY ACKNOWLEDGES AND AGREES
         THAT BANK WOULD NOT EXTEND THE CREDIT TO DEBTOR EVIDENCED BY THIS NOTE
         WITHOUT DEBTOR'S AGREEMENT, AS SET FORTH ABOVE, TO PAY BANK A
         PREPAYMENT FEE UPON THE SATISFACTION OF ALL OR ANY PORTION OF THE
         PRINCIPAL BEARING INTEREST AT THE BASE INTEREST RATE FOLLOWING THE
         ACCELERATION OF THE MATURITY DATE HEREOF BY REASON OF A DEFAULT. DEBTOR
         HAS CAUSED THOSE PERSONS SIGNING THIS NOTE ON ITS BEHALF TO SEPARATELY
         INITIAL THE AGREEMENT CONTAINED IN THIS PARAGRAPH BY PLACING THEIR
         INITIALS BELOW:

                                       3
<PAGE>

         INITIALS: [ILLEGIBLE]  [ILLEGIBLE]
                   -----------  -----------

         5. DEFAULT AND ACCELERATION OF TIME FOR PAYMENT. Default shall include,
         but not be limited to, any of the following: (a) the failure of Debtor
         to make any payment required under this Note when due and, in the case
         of any interest payment only, such failure shall continue for five (5)
         days; (b) any breach, misrepresentation or other default by Debtor, any
         guarantor, co-maker, endorser, or any person or entity other than
         Debtor providing security for this Note (hereinafter individually and
         collectively referred to as the "Obligor") under any security
         agreement, guaranty or other agreement between Bank and any Obligor,
         and such breach, misrepresentation or other default, if in respect of a
         financial covenant which is capable of being cured, is not cured within
         thirty (30) days after its occurrence; (c) the insolvency of any
         Obligor or the failure of any Obligor generally to pay such Obligor's
         debts as such debts become due; (d) the commencement as to any Obligor
         of any voluntary or involuntary proceeding under any laws relating to
         bankruptcy, insolvency, reorganization, arrangement, debt adjustment or
         debtor relief and in the case of any involuntary proceeding, the same
         shall not be dismissed or discharged within sixty (60) days after
         commencement; (e) the assignment by any Obligor for the benefit of such
         Obligor's creditors of any substantial part of such Obligor's property;
         (f) the appointment, or commencement of any proceeding for the
         appointment of a receiver, trustee, custodian or similar official for
         all or substantially all of any Obligor's property; (g) the
         commencement of any proceeding for the dissolution or liquidation of
         any Obligor; (h) the termination of existence or death of any Obligor;
         (i) the revocation of any guaranty or subordination agreement given in
         connection with this Note; (j) the failure of any Obligor to comply
         with any order, judgment, injunction, decree, writ or demand of any
         court or other public authority; (k) the filing or recording against
         any Obligor, or the property of any Obligor, of any notice of levy,
         notice to withhold, or other legal process for taxes other than
         property taxes; (l) the default by any Obligor personally liable for
         amounts owed hereunder on any obligation concerning the borrowing of
         money; (m) the issuance against any Obligor, or the property of any
         Obligor, of any writ of attachment, execution, or other judicial lien;
         or (n) the deterioration of the financial condition of any Obligor
         which results in Bank deeming itself, in good faith, insecure. Upon the
         occurrence of any such default, Bank, in its discretion, may cease to
         advance funds hereunder and may declare all obligations under this Note
         immediately due and payable; however, upon the occurrence of an event
         of default under subsection (d), (e), (f) or (g) hereof, all principal
         and interest shall automatically become immediately due and payable.

         6. ADDITIONAL AGREEMENTS OF DEBTOR. If any amounts owing under this
         Note are not paid when due, Debtor promises to pay all costs and
         expenses, including reasonable attorneys' fees, incurred by Bank in the
         collection or enforcement of this Note. Debtor and any endorsers of
         this Note, for the maximum period of time and the full extent
         permitted by law, (a) waive diligence, presentment, demand, notice of
         nonpayment, protest, notice of protest, and notice of every kind; (b)
         waive the right to assert the defense of any statute of limitations to
         any debt or obligation hereunder; and (c) consent to renewals and
         extensions of time for the payment of any amounts due under this Note.
         The receipt of any check or other item of payment by Bank, at its
         option, shall not be considered a payment on account until such check
         or other item of payment is honored when presented for payment at the
         drawee bank. Bank may delay the credit of such payment based upon
         Bank's schedule of funds availability, and interest under this Note
         shall accrue until the funds are deemed collected. In any action
         brought under or arising out of this Note,

                                       4
<PAGE>

         Debtor and any Obligor, including their successors and assigns, hereby
         consent to the jurisdiction of any competent court within the State of
         California, as provided in any alternative dispute resolution agreement
         executed between Debtor and Bank, and consent to service of process by
         any means authorized by said state's law. The term "Bank" includes,
         without limitation, any holder of this Note. This Note shall be
         construed in accordance with and governed by the laws of the State of
         California. This Note hereby incorporates any alternative dispute
         resolution agreement previously, concurrently or hereafter executed
         between Debtor and Bank.

         7. DEFINITIONS. As used herein, the following terms shall have the
         meanings respectively set forth below: "AMENDED AND RESTATED LOAN
         AGREEMENT" shall mean that certain Amended and Restated Loan Agreement
         dated as of April 7, 1997, by and between Debtor and Bank, as amended
         by that certain First Amendment dated as of January 23, 1998, as
         amended by that certain Second Amendment and Waiver dated as of
         February 17, 1999 and as at any time further amended, supplemented or
         otherwise modified or further restated. "BASE INTEREST RATE" shall mean
         a rate of interest based on the LIBOR Rate. "BASE INTEREST RATE LOAN"
         shall mean amounts outstanding under this Note that bear interest at
         the Base Interest Rate. "BASE RATE MATURITY DATE" shall mean the last
         day of the Interest Period with respect to principal outstanding under
         a Base Interest Rate Loan. "BUSINESS DAY" shall mean a day which is not
         a Saturday or Sunday on which Bank is open for business in the state
         identified in paragraph 6 above, and with the respect to the rate of
         interest based on the LIBOR Rate, on which dealings in U.S. dollar
         deposits outside of the United States may be carried on by Bank.
         "INTEREST PERIOD" shall mean any calendar period of one (1), three (3),
         six (6), nine (9) or, subject to availability, twelve (12) months. In
         determining an Interest Period, a month means a period that starts on
         one Business Day in a month and ends on and includes the day preceding
         the numerically corresponding day in the next month. For any month in
         which there is no such numerically corresponding day, then as to that
         month, such day shall be deemed to be the last calendar day of such
         month. Any Interest Period which would otherwise end on a non-Business
         Day shall end on the next succeeding Business Day unless that is the
         first day of a month, in which event such Interest Period shall end on
         the next preceding Business Day. In no event shall any Interest Period
         extend beyond the Maturity Date. "LIBOR RATE" shall mean a per annum
         rate of interest (rounded upward, if necessary, to the nearest 1/100
         of 1%) at which dollar deposits, in immediately available funds and in
         lawful money of the United States would be offered to Bank, outside of
         the United States, for a term coinciding with the Interest Period
         selected by Debtor and for an amount equal to the amount of principal
         covered by Debtor's interest rate selection, plus Bank's costs,
         including the cost, if any of reserve requirements. "LIBOR RATE MARGIN"
         shall mean, (i) two and three-quarters percent (2-3/4%) per annum,
         effective on the first day of the month following the month in which
         Bank receives a Financial Statement (as such term is defined in the
         Amended and Restated Loan Agreement) from Debtor demonstrating that the
         ratio of Debtor's Funded Indebtedness to EBITDA for the fiscal period
         covered thereby was greater than 2.25 to 1.00, (ii) two and forty-five
         one hundredths percent (2.45%) per annum, effective on the first day of
         the month following the month in which Bank receives a Financial
         Statement from Debtor demonstrating that the ratio of Debtor's Funded
         Indebtedness to EBITDA for the fiscal period covered thereby was less
         than or equal to 2.25 to 1.00 but greater than 1.50 to 1.00 and (iii)
         two percent (2%) per annum, effective on the first day of the month
         following the month in which Bank receives a Financial Statement from
         Debtor demonstrating that the ratio of Debtor's Funded Indebtedness to
         EBITDA for the fiscal

                                       5
<PAGE>

         period covered thereby was less than or equal to 1.50 to 1.00;
         provided, however, that (x) if at any time there exists an Event of
         Default under the Amended and Restated Loan Agreement, or any event
         which, with notice or the lapse of time, or both, would become an Event
         of Default under the Amended and Restated Loan Agreement or (y) if
         Debtor fails to deliver any Financial Statement to Bank within the
         required time period set forth in the Amended and Restated Loan
         Agreement, then the ratio of Debtor's Funded Indebtedness to EBITDA
         shall be deemed to be greater 2.25 to 1.00 until such Event of Default
         or unmatured Event of Default is cured or otherwise waived by Bank or
         such Financial Statement is delivered to Bank, as the case may be; and
         provided further, however, that the LIBOR Rate Margin shall never be a
         negative number. "ORIGINATION DATE" shall mean the Business Day on
         which funds are made available to Debtor relating to Debtor's selection
         of the Base Interest Rate. "REFERENCE RATE" shall mean the rate
         announced by Bank from time to time at its corporate headquarters as
         its Reference Rate. The Reference Rate is an index rate determined by
         Bank from time to time as a means of pricing certain extensions of
         credit and is neither directly tied to any external rate of interest or
         index nor necessarily the lowest rate of interest charged by Bank at
         any given time.

         SPECIALTY LABORATORIES, INC.

         By     /s/ Paul F. Beyer
                ------------------------------
                Paul F. Beyer

         Title  President
               ------------------------------

         By     /s/ Bart E. Thielen
                ------------------------------
                Bart E. Thielen

         Title  Vice President Finance and Treasurer
                ------------------------------

                                       6<PAGE>

                                TERM NOTE B

<TABLE>
<S> <C>
--------------------------------------------------------------------------------
Debtor's Name: Specialty Laboratories, Inc.
--------------------------------------------------------------------------------
Debtor's Address:                           Office: #210      Loan Number

2211 Michigan Avenue
Santa Monica, California 90404
                                            ------------------------------------
                                            Maturity Date:           Amount
                                            February 1, 2004         $11,000,000
--------------------------------------------------------------------------------
</TABLE>

Santa Monica, California         $11,000,000             Date: January 23, 1998

FOR VALUE RECEIVED, on February 1, 2004 (the "Maturity Date"), the undersigned
("Debtor") promises to pay to the order of UNION BANK OF CALIFORNIA, N.A.
("Bank"), as indicated below, the principal sum of Eleven Million Dollars
($11,000,000), or so much thereof as is disbursed, together with interest on the
balance of such principal from time to time outstanding, at the per annum rate
or rates and at the times set forth below. This Term Note B (this "Note") is
governed by the terms and conditions of the Amended and Restated Loan Agreement
(as such term is defined hereinbelow).

1. PAYMENTS.

         PRINCIPAL PAYMENTS. Debtor shall pay principal in sixty (60) equal
consecutive monthly installments, each in an amount sufficient to fully amortize
the principal balance hereof by the Maturity Date, beginning February 1, 1999,
and continuing on the first day of each month thereafter. The availability under
this Note shall be reduced on the same day and in the same amount as each
scheduled principal payment.

         INTEREST PAYMENTS. Debtor shall pay interest on the first day of each
month (commencing February 1, 1998). Should interest not be paid when due, it
shall become part of the principal and bear interest as herein provided. All
computations of interest under this Note shall be made on the basis of a year of
360 days, for actual days elapsed.

         a. BASE INTEREST RATE. At Debtor's option, amounts outstanding
         hereunder in increments of at least One Hundred Thousand Dollars
         ($100,000) shall bear interest at a rate, based on an index selected by
         Debtor, equal to Bank's LIBOR Rate for the Interest Period selected by
         Debtor plus the LIBOR Rate Margin.

         Any Base Interest Rate may not be changed, altered or otherwise
         modified until the expiration of the Interest Period selected by
         Debtor. The exercise of interest rate options by Debtor shall be as
         recorded in Bank's records, which records shall be prima facie evidence
         of the amount borrowed as a Base Interest Rate Loan and the interest
         rate; provided, however, that failure of Bank to make any such notation
         in its records shall not discharge Debtor from its obligation to repay
         in full with interest all amounts borrowed. In no event shall any
         Interest Period extend beyond the Maturity Date.

                                     Page 1
<PAGE>

         To exercise this option, Debtor may, from time to time with respect to
         principal outstanding on which the Base Interest Rate is not accruing,
         and on the expiration of any Interest Period with respect to principal
         outstanding on which the Base Interest Rate has been accruing, select
         an index offered by Bank for a Base Interest Rate Loan and an Interest
         Period by telephoning an authorized lending officer of Bank located at
         the banking office identified below prior to 10:00 a.m., Pacific time,
         on any Business Day and advising that officer of the selected index,
         the Interest Period and the Origination Date selected (which
         Origination Date shall follow the date of such selection by no more
         than two (2) Business Days).

         Bank will mail a written confirmation of the terms of the selection to
         Debtor promptly after the selection is made. Failure to send such
         confirmation shall not affect Bank's rights to collect interest at the
         rate selected. If, on the date of the selection, the index is
         unavailable for any reason, the selection shall be void. Bank reserves
         the right to fund the principal from any source of funds.

         b. VARIABLE INTEREST RATE. All principal outstanding hereunder which is
         not bearing interest at a Base Interest Rate shall bear interest at a
         rate per annum equal to the Reference Rate, which rate shall vary as
         and when the Reference Rate changes.

         Debtor shall pay all amounts due under this Note in lawful money of the
         United States at Bank's Los Angeles Headquarters Commercial Banking
         Office, or such other office as may be designated by Bank, from time to
         time.

2. LATE PAYMENTS. If any payment required by the terms of this Note shall remain
unpaid ten days after same is due, at the option of Bank, Debtor shall pay a fee
of $100 to Bank.

3. INTEREST RATE FOLLOWING DEFAULT. In the event of default, at the option of
Bank, and, to the extent permitted by law, interest shall be payable on the
outstanding principal under this Note at a per annum rate equal to five percent
(5%) in excess of the interest rate specified in paragraph 1.b, above,
calculated from the date of default until all amounts payable under this Note
are paid in full.

4. PREPAYMENT.

         a. Amounts outstanding under this Note bearing interest at a rate based
         on the Reference Rate may be prepaid in whole or in part at any time,
         without penalty or premium. Amounts outstanding under this Note bearing
         interest at the Base Interest Rate may only be prepaid, in whole or in
         part, provided that Bank has received not less than five (5) Business
         Days' prior written notice of an intention to make such prepayment and
         Debtor pays a prepayment fee to Bank in an amount equal to the present
         value of the product of: (i) the difference (but not less than zero)
         between (a) the Base Interest Rate applicable to the principal amount
         which Debtor intends to prepay and (b) the return which Bank could
         obtain if it used the amount of such prepayment of principal to
         purchase at bid price regularly quoted securities issued by the United
         States having a maturity date most closely coinciding with the relevant
         Base Rate Maturity Date and such securities were held by Bank until the
         relevant Base Rate Maturity Date ("Yield Rate"); (ii) a fraction, the
         numerator of which is the number of days in the period between the date
         of prepayment and the relevant Base Rate Maturity Date and the
         denominator of which is 360; and (iii) the amount of the principal so
         prepaid (except in the event that principal payments are required and
         have been made as scheduled under the terms of the Base Interest Rate
         Loan being prepaid, then an amount equal to the lesser of (A) the
         amount prepaid or (B) fifty percent (50%) of the sum of (1) the amount
         prepaid and (2) the amount of principal scheduled under the terms of
         the Base Interest Rate Loan being prepaid

                                     Page 2
<PAGE>

         to be outstanding at the relevant Base Rate Maturity Date). Present
         value under this Note is determined by discounting the above product to
         present value using the Yield Rate as the annual discount factor.

         b. In no event shall Bank be obligated to make any payment or refund to
         Debtor, nor shall Debtor be entitled to any setoff or other claim
         against Bank, should the return which Bank could obtain under the above
         prepayment formula exceed the interest that Bank would have received if
         no prepayment had occurred. All prepayments shall include payment of
         accrued interest on the principal amount so prepaid and shall be
         applied to payment of interest before application to principal. A
         determination by Bank as to the prepayment fee amount, if any, shall be
         conclusive.

         c. Such prepayment fee, if any, shall also be payable if prepayment
         occurs as the result of the acceleration of the principal of this Note
         by Bank because of any default hereunder. If, following such
         acceleration, all or any portion of a Base Interest Rate Loan is
         satisfied, whether through sale of property encumbered by any security
         agreement or other agreement securing this Note, at a foreclosure sale
         held thereunder or through the tender of payment at any time following
         such acceleration, but prior to such a foreclosure sale, then such
         satisfaction shall be deemed an evasion of the prepayment conditions
         set forth above, and Bank shall, automatically and without notice or
         demand, be entitled to receive, concurrently with such satisfaction the
         prepayment fee set forth above, and the amount of such prepayment fee
         shall be added to the principal. DEBTOR HEREBY ACKNOWLEDGES AND AGREES
         THAT BANK WOULD NOT EXTEND THE CREDIT TO DEBTOR EVIDENCED BY THIS NOTE
         WITHOUT DEBTOR'S AGREEMENT, AS SET FORTH ABOVE, TO PAY BANK A
         PREPAYMENT FEE UPON THE SATISFACTION OF ALL OR ANY PORTION OF THE
         PRINCIPAL BEARING INTEREST AT THE BASE INTEREST RATE FOLLOWING THE
         ACCELERATION OF THE MATURITY DATE HEREOF BY REASON OF A DEFAULT. DEBTOR
         HAS CAUSED THOSE PERSONS SIGNING THIS NOTE ON ITS BEHALF TO SEPARATELY
         INITIAL THE AGREEMENT CONTAINED IN THIS PARAGRAPH BY PLACING THEIR
         INITIALS BELOW:

         INITIALS: /s/ [ILLEGIBLE]           /s/ [ILLEGIBLE]
                   ----------------          ----------------

5. DEFAULT AND ACCELERATION OF TIME FOR PAYMENT. Default shall include, but not
be limited to, any of the following: (a) the failure of Debtor to make any
payment required under this Note when due and, in the case of any interest
payment only, such failure shall continue for five (5) days; (b) any breach,
misrepresentation or other default by Debtor, any guarantor, co-maker, endorser,
or any person or entity other than Debtor providing security for this Note
(hereinafter individually and collectively referred to as the "Obligor") under
any security agreement, guaranty or other agreement between Bank and any
Obligor, and such breach, misrepresentation or other default, if in respect of a
financial covenant which is capable of being cured, is not cured within thirty
(30) days after its occurrence; (c) the insolvency of any Obligor or the failure
of any Obligor generally to pay such Obligor's debts as such debts become due;
(d) the commencement as to any Obligor of any voluntary or involuntary
proceeding under any laws relating to bankruptcy, insolvency, reorganization,
arrangement, debt adjustment or debtor relief and in the case of any involuntary
proceeding, the same shall not be dismissed or discharged within sixty (60) days
after commencement; (e) the assignment by any Obligor for the benefit of such
Obligor's creditors of any substantial part of such Obligor's property; (f) the
appointment, or commencement of any proceeding for the appointment of a
receiver, trustee, custodian or similar official for all or substantially all of
any Obligor's property; (g) the commencement of any proceeding for the
dissolution or liquidation of any Obligor; (h) the termination of existence or
death of any Obligor; (i) the revocation of any guaranty or subordination
agreement given in connection with this Note; (j)

                                     Page 3
<PAGE>

the failure of any Obligor to comply with any order, judgment, injunction,
decree, writ or demand of any court or other public authority; (k) the filing or
recording against any Obligor, or the property of any Obligor, of any notice of
levy, notice to withhold, or other legal process for taxes other than property
taxes; (l) the default by any Obligor personally liable for amounts owed
hereunder on any obligation concerning the borrowing of money; (m) the issuance
against any Obligor, or the property of any Obligor, of any writ of attachment,
execution, or other judicial lien; or (n) the deterioration of the financial
condition of any Obligor which results in Bank deeming itself, in good faith,
insecure. Upon the occurrence of any such default, Bank, in its discretion, may
cease to advance funds hereunder and may declare all obligations under this Note
immediately due and payable; however, upon the occurrence of an event of default
under subsection (d), (e), (f) or (g) hereof, all principal and interest shall
automatically become immediately due and payable.

6. ADDITIONAL AGREEMENTS OF DEBTOR. If any amounts owing under this Note are not
paid when due, Debtor promises to pay all costs and expenses, including
reasonable attorneys' fees, incurred by Bank in the collection or enforcement of
this Note. Debtor and any endorsers of this Note, for the maximum period of time
and the full extent permitted by law, (a) waive diligence, presentment, demand,
notice of nonpayment, protest, notice of protest, and notice of every kind; (b)
waive the right to assert the defense of any statute of limitations to any debt
or obligation hereunder; and (c) consent to renewals and extensions of time for
the payment of any amounts due under this Note. The receipt of any check or
other item of payment by Bank, at its option, shall not be considered a payment
on account until such check or other item of payment is honored when presented
for payment at the drawee bank. Bank may delay the credit of such payment based
upon Bank's schedule of funds availability, and interest under this Note shall
accrue until the funds are deemed collected. In any action brought under or
arising out of this Note, Debtor and any Obligor, including their successors and
assigns, hereby consent to the jurisdiction of any competent court within the
State of California, as provided in any alternative dispute resolution agreement
executed between Debtor and Bank, and consent to service of process by any means
authorized by said state's law. The term "Bank" includes, without limitation,
any holder of this Note. This Note shall be construed in accordance with and
governed by the laws of the State of California. This Note hereby incorporates
any alternative dispute resolution agreement previously, concurrently or
hereafter executed between Debtor and Bank.

7. DEFINITIONS. As used herein, the following terms shall have the meanings
respectively set forth below: "AMENDED AND RESTATED LOAN AGREEMENT" shall mean
that certain Amended and Restated Loan Agreement dated as of April 7, 1997, by
and between Debtor and Bank, as amended by that certain First Amendment dated as
of even date herewith and as at any time further amended, supplemented or
otherwise modified or further restated. "BASE INTEREST RATE" shall mean a rate
of interest based on the LIBOR Rate. "BASE INTEREST RATE LOAN" shall mean
amounts outstanding under this Note that bear interest at the Base Interest
Rate. "BASE RATE MATURITY DATE" shall mean the last day of the Interest Period
with respect to principal outstanding under a Base Interest Rate Loan. "BUSINESS
DAY" shall mean a day which is not a Saturday or Sunday on which Bank is open
for business in the state identified in paragraph 6 above, and with the respect
to the rate of interest based on the LIBOR Rate, on which dealings in U.S.
dollar deposits outside of the United States may be carried on by Bank.
"INTEREST PERIOD" shall mean any calendar period of one (1), three (3), six (6),
nine (9) or, subject to availability, twelve (12) months. In determining an
Interest Period, a month means a period that starts on one Business Day in a
month and ends on and includes the day preceding the numerically corresponding
day in the next month. For any month in which there is no such numerically
corresponding day, then as to that month, such day shall be deemed to be the
last calendar day of such month. Any Interest Period which would otherwise end
on a non-Business Day shall end on the next succeeding Business Day unless that
is the first day of a month, in which event such Interest Period shall end

                                     Page 4

<PAGE>

on the next preceding Business Day. In no event shall any Interest Period
extend beyond the Maturity Date. "LIBOR RATE" shall mean a per annum rate of
interest (rounded upward, if necessary, to the nearest 1/100 of 1%) at which
dollar deposits, in immediately available funds and in lawful money of the
United States would be offered to Bank, outside of the United States, for a
term coinciding with the Interest Period selected by Debtor and for an amount
equal to the amount of principal covered by Debtor's interest rate selection,
plus Bank's costs, including the cost, if any of reserve requirements. "LIBOR
RATE MARGIN" shall mean, (i) two and three-quarters percent (2-3/4%) per
annum, effective on the first day of the month following the month in which
Bank receives a Financial Statement (as such term is defined in the Amended
and Restated Loan Agreement) from Debtor demonstrating that the ratio of
Debtor's Funded Indebtedness to EBITDA for the fiscal period covered thereby
was greater than 2.25 to 1.00, (ii) two and forty-five one hundredths percent
(2.45%) per annum, effective on the first day of the month following the
month in which Bank receives a Financial Statement from Debtor demonstrating
that the ratio of Debtor's Funded Indebtedness to EBITDA for the fiscal
period covered thereby was less than or equal to 2.25 to 1.00 but greater
than 1.50 to 1.00 and (iii) two percent (2%) per annum, effective on the
first day of the month following the month in which Bank receives a Financial
Statement from Debtor demonstrating that the ratio of Debtor's Funded
Indebtedness to EBITDA for the fiscal period covered thereby was less than or
equal to 1.50 to 1.00; provided, however, that (x) if at any time there
exists an Event of Default under the Amended and Restated Loan Agreement, or
any event which, with notice or the lapse of time, or both, would become an
Event of Default under the Amended and Restated Loan Agreement or (y) if
Debtor fails to deliver any Financial Statement to Bank within the required
time period set forth in the Amended and Restated Loan Agreement, then the
ratio of Debtor's Funded Indebtedness to EBITDA shall be deemed to be greater
than 2.25 to 1.00 until such Event of Default or unmatured Event of Default
is cured or otherwise waived by Bank or such Financial Statement is delivered
to Bank, as the case may be; and provided further, however, that the LIBOR
Rate Margin shall never be a negative number. "ORIGINATION DATE" shall mean
the Business Day on which funds are made available to Debtor relating to
Debtor's selection of the Base Interest Rate. "REFERENCE RATE" shall mean the
rate announced by Bank from time to time at its corporate headquarters as its
Reference Rate. The Reference Rate is an index rate determined by Bank from
time to time as a means of pricing certain extensions of credit and is
neither directly tied to any external rate of interest or index nor
necessarily the lowest rate of interest charged by Bank at any given time.

SPECIALTY LABORATORIES, INC.

By  [ILLEGIBLE]
  -----------------------------------

Title  President
     --------------------------------

By  [ILLEGIBLE]
  -----------------------------------

Title  V.P. Finance and Treasurer
     --------------------------------

                                       Page 5

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