Document:

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                                  EXHIBIT 10.7

                        AMENDMENT TO CONSULTING AGREEMENT

       THIS AMENDMENT TO CONSULTING AGREEMENT made and entered to this 31st day
of December, 1998, by and among GENELINK, INC. (the "Company"), a Pennsylvania
corporation, and ROBERT P. RICCIARDI, PH.D. (the "Consultant").

                                   BACKGROUND

       The Company and the Consultant are parties to a Consulting Agreement
dated as of February, 1998 (the "Consulting Agreement"). The parties desire to
amend the Consulting Agreement as set forth below.

       NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:

       1.     Amendment to Consulting Agreement. Section 7(a) of the Consulting
              Agreement is hereby amended by deleting current Section 7(a) and
              replacing it in its entirety as follows:

              "(a)   Consultant is granted the right and option to purchase
1,000,000 shares (the "Shares") of the Company's Common Stock, exercised at the
price of $.10 per Share, which right and option may be exercised from time to
time, in whole or in pat, on a cumulative basis at any time. Subject to the
provisions of this Section 7(a) to the contrary, in the event that Consultant
ceases to be an employee, consultant, representative or agent of the Company on
or before the dates listed below, Consultant shall be obligated to forfeit to
the Company any and all Shares exercised by Consultant in excess of the number
of Shares set forth below:

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No. of Shares               No. of Shares
Consultant May Retain       Subject to           Termination
                            Forfeiture           Date

       200,000              800,000          Prior to January 1, 1999
       400,000              600,000          Prior to January 1, 2000
       600,000              400,000          Prior to January 1, 2001
       800,000              200,000          Prior to January 1, 2002
     1,000,000                    0          On or after January 1, 2002

Notwithstanding anything in this Section 7(a) to the contrary, Consultant's
obligation to forfeit any Shares he has purchased shall terminate upon a "change
in control" of the Company. For purposes of this Agreement, the term "change in
control" shall be deemed to have occurred when (i) the sale in any one or more
related transaction of 33% or more of the outstanding voting stock of the
Company, (ii) the Company sells 50% or more of its assets in one or a number of
related transactions, or (iii) as a result of a tender offer, merger,
consolidation, sale of assets, or contest for election of directors, or any
combination of the foregoing transactions or events, individuals who were
members of the Board of Directors of the Company immediately prior to any such
transaction or event. The Consultant may exercise options by giving the Company
a note equal to the exercise price of the options exercised, which will bear
interest at a floating rate equal to the Federal Funds Rate published in The
Wall Street Journal as adjusted form time to time. In the alternative, the
Consultant may use Shares owned by the Consultant, valued at the then prevailing
market price of the Shares."

       2.     No Other Amendment. The Consulting Agreement as amended hereby
              remains in full force in effect and, except as expressly as stated
              herein, there are no other amendments thereto.

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       IN WITNESS WHEREOF, the parties have executed this Amendment to
Consulting Agreement as of the date set forth above.

                                       GENELINK, INC.

                                       By: /s/ John R. DePhillipo
                                           ---------------------------------
                                           Chief Executive Officer

                                       By: /s/ Robert P. Ricciardi
                                           ---------------------------------
                                           Robert P. Ricciardi, Ph.D.

                                       3EXHIBIT 10.1

                   CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our reports
(and all references to our Firm) included in or made a part of this registration
statement.

                                           ARTHUR ANDERSEN LLP

Milwaukee, Wisconsin.
December 31, 1999.<PAGE>

                                                                      EXHIBIT 26

                     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.

         1.1.  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).

         "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 the letter agreement dated as
of March 29, 1999 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.

         "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

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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 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.

                  "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

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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).

                  "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 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

<PAGE>

                  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).

                  "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.

                  "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

<PAGE>

         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 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 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 the letter from Borrower to
         Agent, dated the date of this Agreement, which identifies itself as the
         "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.

<PAGE>

                  "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 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, all Acquisition
                  In-Process R&D 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.

<PAGE>

                  "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 "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

<PAGE>

         (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 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.

                  "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);

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

<PAGE>

                           (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 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

<PAGE>

         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;

                           (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

<PAGE>

                  (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.

                  "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

<PAGE>

         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; (b) the ability of Borrower to pay or perform the Obligations in
         accordance with the terms of this Agreement and the other Credit
         Documents; or (c) the rights and remedies of Agent or any Lender under
         this Agreement, the other Credit Documents or any related document,
         instrument or agreement.

                  "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

<PAGE>

         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.

                  "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 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.

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

<PAGE>

                  "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.

                  "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

<PAGE>

         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 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.

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

                  "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.

                  "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

<PAGE>

         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.

                  "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.

         1.2.  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
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.

         1.3.  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.

         1.4.  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.

<PAGE>

         1.5.   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.

         1.6.   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.

         1.7.   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.

         1.8.   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.

         1.9.   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 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.

SECTION II.           CREDIT FACILITY.

<PAGE>

         2.1.    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 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.

<PAGE>

                  (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. 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.

<PAGE>

                  (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 (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

<PAGE>

         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.

         2.2.    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

                           (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

<PAGE>

         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).

         2.3.    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.

         2.4.    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 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

<PAGE>

         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.

         2.5.    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 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

<PAGE>

         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.

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

         2.7.    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

<PAGE>

         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.

         2.8.    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

<PAGE>

                  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 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

<PAGE>

         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.

                  (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

<PAGE>

                  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.

                  (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.

<PAGE>

         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.

                  (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

<PAGE>

         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 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.    GUARANTIES.

                  (a) GUARANTIES. The Obligations shall be secured 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").

<PAGE>

                  (b) FURTHER ASSURANCES. Borrower shall deliver, or cause its
         Subsidiaries to deliver, to Agent such additional guaranties and other
         instruments, agreements, certificates, opinions and documents as
         Required Lenders may reasonably request to cause all Domestic
         Subsidiaries of Borrower to guarantee the Obligations on the terms set
         forth in the Amended and Restated Guaranty and otherwise establish,
         maintain, protect and evidence the rights provided to Agent, for the
         benefit of Agents and the Lenders, pursuant to the Amended and Restated
         Guaranty. 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.

         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.

SECTION III.  CONDITIONS PRECEDENT.

         3.1. 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.

         3.2. 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

<PAGE>

                  (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.

         3.3. 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.

         4.1. 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:

                  (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

<PAGE>

         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 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. Borrower and its
         Subsidiaries own and have good and marketable title, or a valid
         leasehold interest in, all their respective properties

<PAGE>

         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 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.

<PAGE>

                           (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 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.

<PAGE>

                  (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(q) (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; 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, 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

<PAGE>

         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.

         4.2. 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.

         5.1. 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:

                  (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

<PAGE>

                  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 $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; and

                           (vii) 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

<PAGE>

         transactions in accordance with GAAP.

                  (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 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.

                  (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; and

                           (iii) 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 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

<PAGE>

         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) PARI PASSU RANKING. Borrower shall take, or cause to be
         taken, all actions necessary to ensure that the Obligations of Borrower
         are and continue to rank at least PARI PASSU in right of payment with
         all other unsecured Indebtedness of Borrower.

         5.2. 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;

                           (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;

<PAGE>

                           (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 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), 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;

                           (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(j);

                           (xi) Unsecured Indebtedness of Borrower, provided
                  that (A) the Indebtedness arising under this Agreement shall
                  at all times rank at least PARI PASSU 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

<PAGE>

                  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); and

                           (xii) 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 any Credit Documents to secure the 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, 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;

<PAGE>

                           (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, 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

<PAGE>

                  Subsidiaries taken as a whole; and

                           (xvii) 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;

                           (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 of promissory notes, accounts
                  receivable and other indebtedness owed to Borrower, 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 or any of its Subsidiaries except to
                  the extent permitted by CLAUSE (x) 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

<PAGE>

         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 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 permitted by SUBPARAGRAPH
                  5.2(a) or CLAUSES (II), AND (III) OF SUBPARAGRAPH 5.02(d);

                           (iii) Investments by Borrower and its Subsidiaries in
                  each other, provided that the book value of Borrower's
                  aggregate Investment in its Foreign Subsidiaries shall not
                  exceed $5,000,000 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 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;

<PAGE>

                           (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 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) 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.

                  (i) 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.

                  (j) CAPITAL EXPENDITURES. Borrower and its Subsidiaries shall
         not make Capital

<PAGE>

         Expenditures on a consolidated basis in excess of $20,000,000 in any
         fiscal year.

                  (k) 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.

         5.3. 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 3.25 to 1.00 on the last day of any
         consecutive four-quarter period ending on the last day of each fiscal
         quarter of Borrower.

                  (b) TANGIBLE NET WORTH. Borrower shall not permit the 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 January 3, 1999 (such
         date to be referred to herein as the "base date") to be less than the
         sum on such determination date of the following:

                           (i)      Eighty five percent (85%) of the Tangible
                  Net Worth of Borrower and its Subsidiaries on the base date;

                                      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) Seventy five percent (75%) 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
         2.50 to 1.00 on the last day of any fiscal quarter.

<PAGE>

                  (d) PROFITABILITY. Borrower shall not permit the consolidated
         net income of Borrower and its Subsidiaries for any fiscal quarter to
         be less than $1.00. 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.

         6.1. 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 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

<PAGE>

         aggregate amount exceeding $1,000,000 to become due (and/or to be
         secured by cash collateral) or (B) Indebtedness constituting
         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)) 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

<PAGE>

                  (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.

         6.2. 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.

SECTION VII.          THE AGENT AND RELATIONS AMONG LENDERS.

         7.1. 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

<PAGE>

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.

         7.2. 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.

         7.3. 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 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.

         7.4. 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

<PAGE>

which occurred prior to the time such Lender ceased to be a Lender hereunder).

         7.5. 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, or
(iii) any failure by Borrower to perform its obligations under this Agreement
or any other Credit Document.

         7.6. 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, 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.

         7.7. 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.

         7.8. 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

<PAGE>

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.

         8.1. 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:

                             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

<PAGE>

                                    540 Alder Drive
                                    Milpitas, CA  95035
                                    Attn:  Andre Simone
                                    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.

         8.2. 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 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.

         8.3. 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

<PAGE>

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.

         8.4. 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, or
         (vii) amends the definition of Required Lenders, 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

                  (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.

         8.5.    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

<PAGE>

         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 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

<PAGE>

                  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
         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

<PAGE>

         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.

         8.6. 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 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.

         8.7. 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.

         8.8. 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.

         8.9. JURY TRIAL. EACH OF BORROWER, THE LENDERS AND AGENT, TO THE

<PAGE>

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 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 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

<PAGE>

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.]

<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:
                                          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:

<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:

<PAGE>

                                                               EXECUTION VERSION

                      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

                                   (CONTINUED)
<TABLE>
<CAPTION>
                                                                                                           PAGE
                                                                                                           PAGE
<S>                                                                            <C>

SECTION I.                                                                                      INTERPRETATION
                                                                                                             1

     1.01.                                                                                         Definitions
                                                                                                             1

     1.02.                                                                                                GAAP
                                                                                                            17

     1.03.                                                                                            Headings
                                                                                                            17

     1.04.                                                                                        Plural Terms
                                                                                                            17

     1.05.                                                                                                Time
                                                                                                            17

     1.06.                                                                                       Governing Law
                                                                                                            17

     1.07.                                                                                        Construction
                                                                                                            17

     1.08.                                                                                    Entire Agreement
                                                                                                            17

     1.09.                                                                    Calculation of Interest and Fees
                                                                                                            17

     1.10.                                                                       Other Interpretive Provisions
                                                                                                            18

SECTION II.                                                                                    CREDIT FACILITY
                                                                                                            18

     2.01.                                                                             Revolving Loan Facility
                                                                                                            18

     2.02.                                                                          Commitment Reductions, Etc
                                                                                                            22

     2.03.                                                                                                Fees
                                                                                                            22

     2.04.                                                                                         Prepayments
                                                                                                            23

<PAGE>

<S>                                                                  <C>

     2.05.                                                                                 Other Payment Terms
                                                                                                            23

     2.06.                                                                          Notes and Interest Account
                                                                                                            24

     2.07.                                                                                        Loan Funding
                                                                                                            25

     2.08.                                                                                  Pro Rata Treatment
                                                                                                            26

     2.09.                                                                             Change of Circumstances
                                                                                                            27

     2.10.                                                                                   Taxes on Payments
                                                                                                            29

     2.11.                                                                        Funding Loss Indemnification
                                                                                                            30

     2.12.                                                                                          Guaranties
                                                                                                            31

     2.13.                                                                              Replacement of Lenders
                                                                                                            31

SECTION III.                                                                              CONDITIONS PRECEDENT
                                                                                                            32

         3.01.                                                                    Initial Conditions Precedent
                                                                                                            32

         3.02.                                                       Conditions Precedent to Each Credit Event
                                                                                                            32

         3.03.                                                                             Covenant to Deliver
                                                                                                            32

<PAGE>

<S>                                                                  <C>
SECTION IV.                                                                     REPRESENTATIONS AND WARRANTIES
                                                                                                            33

         4.01.                                                       Borrower's Representations and Warranties
                                                                                                            33

         4.02.                                                                                   Reaffirmation
                                                                                                            37

SECTION V.                                                                                           COVENANTS
                                                                                                            37

         5.01.                                                                           Affirmative Covenants
                                                                                                            37

         5.02.                                                                              Negative Covenants
                                                                                                            40

         5.03.                                                                             Financial Covenants
                                                                                                            47

SECTION VI.                                                                                            DEFAULT
                                                                                                            48

         6.01.                                                                               Events of Default
                                                                                                            48

         6.02.                                                                                        Remedies
                                                                                                            50

SECTION VII.                                                             THE AGENT AND RELATIONS AMONG LENDERS
                                                                                                            50

         7.01.                                                              Appointment, Powers and Immunities
                                                                                                            50

         7.02.                                                                               Reliance by Agent
                                                                                                            51

         7.03.                                                                                        Defaults
                                                                                                            51

         7.04.                                                                                 Indemnification
                                                                                                            51

         7.05.                                                                                    Non-Reliance
                                                                                                            52

<PAGE>

<S>                                                           <C>

         7.06.                                                                 Resignation or Removal of Agent
                                                                                                            52

         7.07.                                                                                   Authorization
                                                                                                            52

         7.08.                                                                Agent in its Individual Capacity
                                                                                                            52

SECTION VIII.                                                                                    MISCELLANEOUS
                                                                                                            53

         8.01.                                                                                         Notices
                                                                                                            53

         8.02.                                                                                        Expenses
                                                                                                            54

         8.03.                                                                                 Indemnification
                                                                                                            54

         8.04.                                                                             Waivers; Amendments
                                                                                                            55

         8.05.                                                                          Successors and Assigns
                                                                                                            55

         8.06.                                                                                          Setoff
                                                                                                            58

         8.07.                                                                           No Third Party Rights
                                                                                                            58

         8.08.                                                                              Partial Invalidity
                                                                                                            58

         8.09.                                                                                      Jury Trial
                                                                                                            58

         8.10.                                                                                    Counterparts
                                                                                                            59

         8.11.                                                                                 Confidentiality
                                                                                                            59

         8.12.                                                Effect; Termination of Existing Credit Agreement
                                                                                                            59

<PAGE>

<S>                  <C>
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))

</TABLE>

<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>

                                   SCHEDULE I

                                     LENDERS
<TABLE>
<CAPTION>
                                                                Proportionate
         Lender                                                     Share*
         ------                                                 -------------
<S>                                                             <C>
         ABN AMRO BANK N.V.                                     33.33333333%

                  APPLICABLE LENDING OFFICE:

                  ABN AMRO Bank N.V.
                  San Francisco International Branch
                  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-

<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
</TABLE>

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

                                     I-

<PAGE>

<TABLE>
<CAPTION>
                                                               Proportionate
         Lender                                                    Share*
         ------                                                -------------
<S>                                                            <C>
         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
</TABLE>

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

                                     I-

<PAGE>

<TABLE>
<CAPTION>
                                                               Proportionate
         Lender                                                    Share*
         ------                                                -------------
<S>                                                            <C>
         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
</TABLE>

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

                                     I-

<PAGE>

<TABLE>
<CAPTION>
                                                               Proportionate
         Lender                                                    Share*
         ------                                                -------------
<S>                                                            <C>
         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 Banking Division               99 Almaden Blvd.
                  350 California Street, 10th Floor                             Suite 200
                  San Francisco, CA  94104                                      San Jose, CA 95113
                  Attention:  Jim Goudy                                                 Tel.: 408/279-7742
                  Telephone:  (415) 705-7165                                    Fax: 408/280-7163
                  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)
</TABLE>

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

                                     I-

<PAGE>

<TABLE>
<CAPTION>
                                                               Proportionate
         Lender                                                    Share*
         ------                                                -------------
<S>                                                            <C>
         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
</TABLE>

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

                                     I-
<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>
         < 0.60                  1        0%               0.750%       0.250%
         -

         > 0.60                  2        0%               0.875%       0.250%
         < 0.90
         -

         > 0.90,                 3        0%               1.000%       0.275%
         < 1.20
         -

         > 1.20,                 4        0%               1.125%       0.325%
         < 1.40
         -

         > 1.40,                 5        0%               1.250%       0.375%
         < 1.60
         -

         > 1.60,                 6        0%               1.375%       0.425%
         < 2.00
         -

         > 2.00                  7        0%               1.500%       0.475%

</TABLE>

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

        (1)/    For a consecutive four-quarter period.

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

                                  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, a Level 5 Quarter, a Level 6

                                     I-
<PAGE>

         Quarter or a Level 7 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, a Level 5 Quarter, a Level 6
         Quarter or a Level 7 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
                  March 31, 1999, Borrower's Debt/EBITDA Ratio was 1.30. The
                  quarter ending on or about September 30, 1999 will be a Level
                  4 Quarter.

         (b)      For the consecutive four-quarter period ending on or about
                  June 30, 1999, Borrower's Debt/EBITDA Ratio was 1.10. The
                  quarter ending on or about December 31, 1999 will be a Level 3
                  Quarter.

                                   1.01(a)

<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.

C.       SUBSIDIARY CORPORATE DOCUMENTS.

         (1) The Certificate of Incorporation (or comparable certificate) of
each Domestic

                                      I-
<PAGE>

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;

         (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

                                3.01-
<PAGE>

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-
<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-
<PAGE>

                            SCHEDULE 4.01(q)

                             SUBSIDIARIES

1.    SHARES OWNED DIRECTLY BY BORROWER:

<TABLE>
<CAPTION>

         Subsidiary                           Jurisdiction        Shares Owned
         ----------                           ------------        by Borrower2/
                                                                  -------------
         <S>                                  <C>                 <C>
         ADAC Research &
         Manufacturing, Inc.                  California                100%

         Community Health                     Delaware                  100%
         Computing Corp.

         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.
                                                                        100%

         ADAC Laboratories                    Canada                    100%
         Canada Ltd.

         ADAC Laboratories                    Netherlands               100%
         Europe, BV.

         ADAC Foreign
         Sales Corporation                    Virgin Islands            100%

         ADAC do Brasil                       Brazil                    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.

                                       I-
<PAGE>

         2.       SHARES OWNED DIRECTLY BY COMMUNITY HEALTH COMPUTING
         CORP. ("CHCC"):
<TABLE>
<CAPTION>

    Subsidiary                     Jurisdiction          Shares Owned
    ----------                     ------------             by CHCC
                                                         ------------
    <S>                            <C>                       <C>
    ADAC Healthcare                Texas                         100%
    Information
    Systems, Inc.
</TABLE>
         3.       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>
--------------------

1/       All shares common unless otherwise indicated.

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

<TABLE>
<CAPTION>

                                                                              Shares Owned
   Subsidiary                                           Jurisdiction          By ADAC BV2/
   ----------                                           ------------          ------------
 <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.

<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

                                      I-

<PAGE>

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

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

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

                                  ADAC LABORATORIES

                                  By:
                                     Name:
                                     Title:

<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.

                                       I-
<PAGE>

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

                                       ADAC LABORATORIES

                                       By:
                                          Name:
                                          Title:

                                       B-

<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.

                                       I-
<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-

<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:

                                       I-
<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.

                                       ADAC LABORATORIES

                                       I-
<PAGE>

                                       By:
                                          Name:
                                          Title:

                                       E-
<PAGE>

<TABLE>
<CAPTION>

---------------------------------------------------------------------------------------------------------------
                                     LOANS AND PAYMENTS OF PRINCIPAL
---------------------------------------------------------------------------------------------------------------
    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>

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

</TABLE>

                                       I-

<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
         International Branch, 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:

                  1.       DEFINITIONS AND INTERPRETATION.

                                      F-

<PAGE>

                           (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.

                           "FAIR SHARE SHORTFALL" shall mean, with respect to
                  any Guarantor at any

                                         F-

<PAGE>

                  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-

<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-

<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;

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                           (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 advised as
                  to the same by, their officers, auditors and accountants, all
                  at such

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<PAGE>

                  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;

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<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
                           security now or hereafter received by Agent, any
                           Lender or any other

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<PAGE>

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

                                         F-

<PAGE>

                           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 appropriate at the time,
                  continue to make its own appraisals and decisions in

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<PAGE>

                  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 Interest and Expenses), and (ii) to require
                  each Guarantor (A) to collect and

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<PAGE>

                  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 by the Funding Guarantor as of the date on which the related
         payment or distribution is

                                         F-

<PAGE>

         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: Andre' Simone
                                               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: Andre' Simone
                                               Telephone: (408) 321-9100
                                               Facsimile: (408) 321-9686

                           Guarantor:     ADAC Medical Technologies,
                                               Inc.
                                               c/o ADAC Laboratories
                                               540 Alder Drive
                                               Milpitas, CA  95035
                                               Attn: Andre' Simone

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<PAGE>

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

                           Guarantor:     ADAC Laboratories Pacific,
                                               Inc.
                                               c/o ADAC Laboratories
                                               540 Alder Drive
                                               Milpitas, CA  95035
                                               Attn: Andre' Simone
                                               Telephone: (408) 321-9100
                                               Facsimile: (408) 321-9686

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

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

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

                           Guarantor:     CT Solutions Inc.
                                               c/o ADAC Laboratories
                                               540 Alder Drive
                                               Milpitas, CA  95035
                                               Attn: Andre' Simone
                                               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

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<PAGE>

                                               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 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

                                         F-

<PAGE>

                  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
                  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

                                         F-

<PAGE>

                  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.

                  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.

                                         F-

<PAGE>

                                   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:

                                   O.N.E.S. MEDICAL SERVICES, INC.

                                    F-

<PAGE>

                                   By:
                                       Name:
                                       Title:

                                   CT SOLUTIONS INC.

                                   By:
                                       Name:
                                       Title:

                                    F-

<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 International Branch, 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.

                                       I-
<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.

                  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]-
<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.

                                       I-
<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-
<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-
<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.

                  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

                                       G-
<PAGE>

                                      By:
                                         Name:
                                         Title:

                                                                         , as an

                                      Assignee Lender

                                      By:
                                         Name:
                                         Title:

                                                                         , as an

                                      Assignee Lender

                                      By:
                                         Name:
                                         Title:

                                       G-
<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-

<PAGE>

                                 ATTACHMENT 1

                            TO ASSIGNMENT AGREEMENT

                   NAMES, ADDRESSES AND PROPORTIONATE SHARES

                    OF ASSIGNOR LENDER AND ASSIGNEE LENDERS

                         AND ASSIGNMENT EFFECTIVE DATE

                              _____________,____

<TABLE>
<CAPTION>

A. ASSIGNOR LENDER              Proportionate              Proportionate
   ---------------                  Share                   Share After
                                Transferred,               Assignment(1)
                                -----------                ----------
<S>                           <C>                          <C>

   _______________            _________________ %          _____________ %

</TABLE>

   Applicable Lending Office:

   __________________________
   __________________________
   __________________________
   __________________________

   Address for notices:

   __________________________
   __________________________
   __________________________
   __________________________

   Telephone No:_____________
   Telecopier No:____________

   Wiring Instructions:

   __________________________
   __________________________

To be expressed by a percentage rounded to the [seventh]-digit to the right
of the decimal point.

Share of Total Commitment sold by Assignor Lender, and share of Total
Commitment purchased by Assignee Lender.

                                       I-
<PAGE>

<TABLE>
<CAPTION>

B. ASSIGNEE LENDERS             Proportionate              Proportionate
   ----------------                 Share                   Share After
                                Transferred,               Assignment(1)
                                -----------                ----------
<S>                           <C>                          <C>

   _______________            _________________ %          _____________ %

</TABLE>

   Applicable Lending Office:

   __________________________
   __________________________
   __________________________
   __________________________

   Address for notices:

   __________________________
   __________________________
   __________________________
   __________________________

   Telephone No:_____________
   Telecopier No:____________

   Wiring Instructions:

   __________________________
   __________________________

To be expressed by a percentage rounded to the [seventh]-digit to the right
of the decimal point.

Share of Total Commitment sold by Assignor Lender, and share of Total
Commitment purchased by Assignee Lender.

                                       G[1]-
<PAGE>

<TABLE>
<CAPTION>

B. ASSIGNEE LENDERS             Proportionate              Proportionate
   ----------------                 Share                   Share After
                                Transferred,               Assignment(1)
                                -----------                ----------
<S>                           <C>                          <C>
   (cont'd)

   _______________            _________________ %          _____________ %

</TABLE>

   Applicable Lending Office:

   __________________________
   __________________________
   __________________________
   __________________________

   Address for notices:

   __________________________
   __________________________
   __________________________
   __________________________

   Telephone No:_____________
   Telecopier No:____________

   Wiring Instructions:

   __________________________
   __________________________

   C. ASSIGNMENT EFFECTIVE DATE

   ______________________, ____

To be expressed by a percentage rounded to the [seventh]-digit to the right
of the decimal point.

Share of Total Commitment sold by Assignor Lender, and share of Total
Commitment purchased by Assignee Lender.

                                       G[1]-
<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:

                                       I-

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