LOAN AND SECURITY AGREEMENT

     THIS LOAN AND SECURITY AGREEMENT  ("Agreement") is dated as of December 26,
1996 by and between DVI  Business  Credit  Corporation,  a Delaware  corporation
("Lender"),  and  HealthCare  Imaging  Services,  Inc., a Delaware  corporation;
Edgewater  Imaging  Associates,  L.P., a New Jersey limited  partnership;  Wayne
Imaging Associates,  L.P., a New Jersey limited partnership;  Rittenhouse Square
Imaging Associates, L.P., a Pennsylvania limited partnership ("Borrower") .

                                    SECTION 1

                                   DEFINITIONS

Section 1.1.  Specific Definitions.  The following definitions shall apply:

     (a) "Account Debtors" shall mean Borrower's customers and all other persons
who are  obligated  or indebted to Borrower in any manner,  whether  directly or
indirectly, primarily or secondarily, contingently or otherwise, with respect to
Accounts.

     (b) "Accounts"  shall mean all accounts,  accounts  receivable,  monies and
debt  obligations in any form owing to Borrower  (whether  arising in connection
with contracts,  contract rights,  instruments,  general  intangibles or chattel
paper)  arising out of the  rendition  of  services  by Borrower  whether or not
earned by  performance;  all deposit  accounts,  credit  insurance,  guaranties,
letters of credit,  advises of credit and other  security  for any of the above;
Borrower's Books relating to any of the foregoing.

     (c) "Advance" shall mean an advance of loan proceeds  constituting all or a
part of the Loan.

     (d)  "Borrower's  Books"  shall mean all of  Borrower's  books and  records
including  but not  limited  to:  minute  books,  ledgers;  records  indicating,
summarizing or evidencing Borrower's assets,  liabilities and the Accounts;  all
information  relating to Borrower's business operations or financial  condition;
and all  computer  programs,  disk or tape  files,  printouts,  runs  and  other
computer-prepared  information and the equipment  containing  such  information;
provided,  however,  that  confidential  patient  records  shall not be included
therein, except to the extent otherwise provided by law.

     (e) "Prime Rate" shall mean the rate of interest announced publicly by Bank
of America from time to time as its prime rate.

     (f) "Borrowing Base" shall mean, on the date of determination  thereof,  an
amount equal to the sum of  seventy-five  percent  (75%) of the Net  Collectible
Value for each type of  Eligible  Account  minus the;  provided,  however,  that
workers   compensation   lien  and  personal  injury  claims  may  never  exceed
thirty-five percent (35%) of the Borrowing Base.



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     (g) "Cash Flow Ratio" as of any day, a fraction (a) the  numerator of which
is equal to (i) the aggregate  collections  received  during the two immediately
preceding calendar months in respect of Eligible accounts  receivable divided by
(ii) 2.0 and (b) the  denominator  of which is an  amount  equal to the  average
daily aggregate NCV of Eligible accounts  receivable during such two immediately
preceding calendar months.

     (h) "Closing Date" shall mean the date of the first Advance of the Loan.

     (i) "Collateral" shall have the meaning specified in Section 3.1 hereof.

     (j) "Commitment Amount" shall have the meaning set forth in Section 2.1.

     (k) "Distribution"  shall mean, with respect to any shares of capital stock
or any warrant or right to acquire  shares of capital  stock or any other equity
security,  (i) the  retirement,   redemption,  purchase  or  other  acquisition,
directly or indirectly,  for value by the issuer of any such security, except to
the extent that the consideration therefor consists of shares of stock, (ii the
declaration or (without  duplication)  payment of any dividend in cash, directly
or indirectly, on or with respect to any such security,  (iii) any investment in
the holder of five  percent  (5%) or more of any such  security  if a purpose of
such  investment  is  to  avoid   characterization   of  the  transaction  as  a
Distribution,  and (iv) any other cash payment constituting a distribution under
applicable laws with respect to such security.

     (l) "Eligible  Accounts"  shall mean  Borrower's accounts receivable from"

compensation  authorized,  which have been due and payable for one hundred fifty
(150) or fewer days from the date of service and worker's  compensation lien and
personal injury claims, which have due and payable for three hundred sixty (360)
or fewer  days from the date of  service  (collectively  referred  to as "Retail
Accounts").

     (m) "ERISA" means the Employee  Retirement  Income Security Act of 1974, as
amended,  and all references to sections thereof shall include such sections and
any predecessor provisions thereto, including any rules or regulations issued in
connection therewith.

     (n) "Event of  Default"  shall  have the  meaning  specified  in Section 10
hereof.

     (o) "Fair Value" means (i) with respect to Borrower's  assets,  if Net Fair
Value is being  determined as of a date on or prior to the first  anniversary of
the date  hereof,  the lower of (1) the value of such  assets as  determined  in
accordance with Bankruptcy Code Section 5487 or (2) the value of such assets  as
determined  in  accordance  with the state  fraudulent  conveyance or fraudulent
transfer  law  that  would  be  applicable  to  the  determination  whether  the
obligations  and/or the security  interest  relating  thereto would constitute a
fraudulent  conveyance or a fraudulent  transfer (the  "Applicable  State Law"),
(ii) with respect to Borrower's assets, if Net Fair Value is being determined as
of a date  after the first  anniversary  of the date  hereof,  the value of such
assets as determined in accordance with the Applicable State Law,




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<PAGE>

     (iii) with respect to  Borrower's  liabilities,  if Net Fair Value is being
determined as of a date on or prior to the first anniversary of the date hereof,
the lower of (1) the value of such  liabilities as determined in accordance with
Bankruptcy  Code Section 548 or (2) the value of such  liabilities as determined
in accordance with the Applicable State Law, and (iv) with respect to Borrower's
liabilities,  if Net Fair Value is being determined as of a date after the first
anniversary of the date hereof,  the value of such  liabilities as determined in
accordance with the Applicable State Law.

     (p) "GAAP" means generally accepted accounting  principles set forth in the
opinions  of the  Accounting  Principles  Board  of the  American  Institute  of
Certified Public  Accountants  and/or in statements of the Financial  Accounting
Standards Board, consistently applied.

     (q)  "Governmental  Authority"  shall mean any  governmental  or  political
subdivision  or  any  agency,  authority,   bureau,  central  bank,  commission,
department or instrumentality  thereof,  or any court,  tribunal,  grand jury or
arbitrator, in any case whether foreign or domestic.

     (r)  "Health  Care  Laws"  shall  mean all  federal,  state and local  laws
specifically  relating  to health  care  providers  and  health  care  services,
including,  but not limited to,  Section  1877(a) of the Social  Security Act as
amended by the Omnibus Budget Reconciliation Act of 1993, 42 USC Section 1395nn.

     (s)  "Indebtedness"  of a Person shall mean (i) all items  (except items of
capital stock,  capital or paid-in  surplus or of retained  earnings)  which, in
accordance  with GAAP,  would be included in  determining  total  liabilities as
shown on the  liability  side of the balance sheet of such Person as of the date
as of which  Indebtedness  is to be  determined,  including any lease which,  in
accordance  with  GAAP  would  constitute  indebtedness;  (ii) all  indebtedness
secured by any mortgage,  pledge,  security,  lien or conditional  sale or other
title  retention  agreement to which any property or asset owned or held by such
Person is subject,  whether or not the  indebtedness  secured thereby shall have
been  assumed;  and (iii) all  indebtedness  of others  which  such  Person  has
directly or indirectly  guaranteed,  endorsed (otherwise than for the collection
or deposit in the ordinary course of business), discounted or sold with recourse
or agreed  (contingently  or  otherwise)  to purchase or repurchase or otherwise
acquire,  or in  respect  of which  such  Person has agreed to supply or advance
funds (whether by way of loan, stock or equity purchase, capital contribution or
otherwise) or otherwise to become directly or indirectly liable.

     (t)  "Lender  Expenses"  shall mean (i) all costs or  expenses  (including,
without  limitation,  taxes  and  insurance  premiums)  required  to be  paid by
Borrower  under this Agreement or under any of the other Loan Documents that are
paid or advanced by Lender; (ii) filing, recording,  publication and search fees
paid or  incurred  by Lender  in  connection  with  Lender's  transactions  with
Borrower;  (iii) costs  and expenses  incurred by Lender to correct any Event of
Default or enforce any provision of the Loan Documents or in gaining  possession
of, maintaining, handling, preserving, storing, shipping, selling, and preparing
for  sale  or  advertising  to sell  the  Collateral,  whether  or not a sale is
consummated,  after  the  occurrence  of an Event  of  Default;  (iv) costs and
expenses of suit


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<PAGE>

incurred by Lender in enforcing or defending  the Loan  Documents or any portion
thereof; (v) costs and expenses incurred by Lender to convert any data submitted
to Lender by  Borrower  to an  acceptable  form;  and (vi)  Lender's  reasonable
attorney  fees  and  expenses  incurred  (before  or  after  execution  of  this
Agreement)  in advising  Lender with  respect to, or in  structuring,  drafting,
reviewing, negotiating, amending, terminating, enforcing, defending or otherwise
concerning,  the Loan Documents or any portion thereof,  irrespective of whether
suit is brought.

     (u) "Lien" shall mean any security interest,  mortgage, pledge, assignment,
lien or other encumbrance of any kind,  including any interest of a vendor under
a conditional  sale contract or consignment and any interest of a lessor under a
capital lease.

     (v)  "Loan"  shall mean each loan or any other loan or loans made by Lender
to Borrower pursuant to this Agreement.

     (w) "Loan  Availability" shall mean the lesser of (a) the Commitment Amount
or (b) the  Borrowing  Base minus the aggregate  Advances and other  Obligations
outstanding under this Agreement.

     (x)  "Loan  Documents"  shall  mean  (i) this Agreement;   (ii) the  Note;
(iii) any other agreements or documents hereafter delivered to secure repayment
of the  Loan;  (iv) the Lock Box Agreement  and  (v) any  other  certificates,
documents,  instruments, or financing statements delivered by Borrower to Lender
pursuant to the terms of this Agreement.

     (y) "Lock Box  Agreement"  shall mean  those  certain  Lock Box  Agreements
between Borrower and any lock box servicer(s)  ("servicer(s)")  chosen by Lender
and Borrower and the letter of  instructions  with respect thereto among Lender,
Borrower and Servicer.

     (z) "Net Collectible  Percentage"  shall mean the percentages  described on
Exhibit A attached hereto.  The Net Collectible  Percentage may change from time
to time in Lender's sole and absolute discretion,  written notification of which
shall be given to Borrower by Lender.

     (aa) "Net Collectible Value" shall mean, for each type of Eligible Account,
the Net Collectible  Percentage times the aggregate current  outstanding  amount
for such type of Eligible Account.

     (bb) "Net Fair  Value"  the  amount by which the Fair  Value of  Borrower's
assets exceeds the Fair Value of Borrower's  liabilities  (including  contingent
liabilities).

     (cc) "Note"  shall mean the Secured  Promissory  Note  executed by Borrower
pursuant to the terms of this Agreement.

     (dd)  "Obligations"  means (i) all  obligations  (monetary or otherwise) of
Borrower  arising under or in connection with this  Agreement,  the Note and all
other Loan Documents.

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<PAGE>

     (ee)  "Permitted  Liens"  shall  mean  (i) Liens  for  property  taxes  and
assessments  or  governmental  charges  or levies and Liens  securing  claims or
demands of mechanics and  materialmen,  provided that payment thereof is not yet
due or is being  contested  as  permitted in this  Agreement;  (ii) Liens of or
resulting  from any  judgment or award,  the time for the appeal or petition for
rehearing of which has not expired,  or in respect of which  Borrower is in good
faith prosecuting an appeal or proceeding for a review and in respect of which a
stay of execution pending such appeal or proceeding for review has been secured;
(iii) Liens and priority  claims  incidental  to the conduct of business or the
ownership of properties and assets  (including  warehouse's and attorney's Liens
and  statutory  landlord's  Liens);  deposits,  pledges  or Liens to secure  the
performance  of  bids,  tenders,  or trade  contracts,  or to  secure  statutory
obligations;  and surety or appeal bonds or other Liens of like  general  nature
incurred in the  ordinary  course of  business  and not in  connection  with the
borrowing of money;  provided  that in each case the  obligation  secured is not
overdue or, if overdue,  is being contested in good faith by appropriate actions
or  proceedings;  and further  provided that any such  warehouse's  or statutory
landlord's  Liens  have  been  subordinated  to the  Liens of Lender in a manner
satisfactory  to Lender;  and (iv) Liens existing on the date of this Agreement
that  secure  Indebtedness  of  Borrower  outstanding  on such date and that are
disclosed on Schedule 1.1 hereto;

     (ff) "Person" shall mean an individual,  corporation,  partnership, limited
liability company, trust, unincorporated association, joint venture, joint-stock
company,  government (including political subdivisions),  Governmental Authority
or any other entity.

     (gg)  "Proceeds"  shall mean all proceeds and  products of  Collateral  and
documents covering  Collateral;  all property received wholly or partly in trade
or exchange for  Collateral;  all claims  against third  parties  arising out of
damage,  destruction  or  decrease  in value of the  Collateral;  all  leases of
Collateral;  and all rents, revenues,  issues, profits and proceeds arising from
the sale,  lease,  license,  encumbrance,  collection or any other  temporary or
permanent disposition of the Collateral or any interest therein.

     (hh)  "Subordinate  Obligations"  shall mean all  Indebtedness  of Borrower
subordinated to the Obligations  pursuant to subordination  and/or intercreditor
agreements in form satisfactory to Lender.

     (ii)  "Termination  Date" shall mean the last day of any term as to which a
written notice of  non-renewal  pursuant to Section 2.7 has been received or, in
the case of a  termination  due to a prepayment  under  Section 2.7, the date of
such prepayment.

     (jj)  "Unmatured  Default"  shall mean any event or  condition  that,  with
notice,  passage of time, or a determination by Lender or any combination of the
foregoing would constitute an Event of Default.

Section 1.2.  Generally  Accepted  Accounting  Principles and Uniform Commercial
Code. All financial  terms used in this  Agreement,  other than those defined in
this Section 1, have the meanings  accorded to them under GAAP.  All other terms
used in this Agreement, other than those defined in this

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<PAGE>

Section 1, have the meanings accorded to them in the Uniform  Commercial Code as
enacted in any applicable jurisdiction.

Section 1.3.  Construction

     (a) Unless the context of this Agreement  clearly requires  otherwise,  the
plural  includes  the  singular,  the  singular  includes  the plural,  the part
includes the whole,  "including"  is not  limiting,  and "or" has the  inclusive
meaning  of  the  phrase  "and/or."  The  words  "hereof,"  "herein,"  "hereby,"
"hereunder" and other similar terms in this Agreement refer to this Agreement as
a whole and not exclusively to any particular provision of this Agreement.

     (b) Neither this Agreement nor any uncertainty or ambiguity herein shall be
construed  or resolved  against  Lender or Borrower,  whether  under any rule of
construction or otherwise.  On the contrary, this Agreement has been reviewed by
each of the  parties  and its counsel  and shall be  construed  and  interpreted
according  to the  ordinary  meaning of the words used so as to  accomplish  the
purposes and intentions of all parties hereto fairly.

                                    SECTION 2

                                      LOAN

Section 2.1. The Loan.  Subject to the terms and  conditions  and relying on the
representations and warranties set forth herein,  Lender agrees to make Advances
to Borrower from time to time in an aggregate amount not to exceed the lesser of
(i) Two Million and no/100 Dollars ($2,000,000.00) (the "Commitment Amount"), or
(ii) the Borrowing Base. Within the limits of the Loan  Availability,  Borrower
may borrow,  make  repayments  pursuant to Section 2.4 and reborrow.  If, at any
time, the aggregate  Advances and other Obligations  outstanding exceed the then
Loan Availability,  then Borrower shall pay to Lender a sum sufficient to reduce
the Advances and other Obligations outstanding to an amount not greater than the
Loan  Availability.  Lender's  commitment to make Advances shall expire, and the
amount of the Loan then  outstanding  shall  mature  and be repaid by  Borrower,
without further action on the part of Lender, on the Termination Date.

Section 2.2. Note.  All Loans made by the Lender under this  Agreement  shall be
evidenced by, and repaid with interest in accordance  with, a single  promissory
note of Borrower in  substantially  the form of Exhibit 2.02 duly completed,  in
the original principal amount equal to the initial Commitment Amount,  dated the
Closing  Date,  payable  to the  Lender  and  maturing  as to  principal  on the
Termination  Date (the  "Note").  The  amount of each  Advance  and  payment  of
principal  amount  received  by the Lender  shall be  recorded  in the books and
records of the Lender, which books and records shall, in the absence of manifest
error,  be conclusive  as to the  outstanding  balance of and other  information
related  to the Loan.  Lender  shall be  entitled  at any time to  endorse  on a
schedule  attached  to the  Note  the  amount  and  type  of  each  Advance  and
information relating thereto.


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<PAGE>

Section 2.3. The Borrowing  Base.  On a weekly basis the Borrowing  Base will be
recalculated by adding weekly billings to the prior week's Eligible Accounts and
subtracting deposits and adjustments,  if applicable,  and then multiplying this
amount by the Net Collectible Percentage. The Borrowing Base shall be calculated
on the basis of the reports delivered to Lender pursuant to Section 5.4.

Section 2.4.  Notice of  Borrowing.  Whenever  Borrower  desires to borrow under
Section 2.1, Borrower shall deliver to Lender a Drawdown Request Form, in a form
reasonably satisfactory to Lender, signed by an authorized officer no later than
2:00 p.m.  Pacific Standard Time at least one (1) business day in advance of the
proposed  funding date. The Drawdown  Request Form shall specify (i) the funding
date (which  shall be a business  day) with  respect to the  requested  Loan and
(ii) the amount of the proposed Advance.

Section 2.5. Use of Proceeds. The proceeds of the Loan shall be used by Borrower
to provide working capital.

Section 2.6. Loan Repayment Via Lock  Box/Servicer  Account.  Upon the execution
hereof,  Borrower shall become a party to the Lock Box Agreement  which provides
for the receipt and processing of Account  payments.  Borrower shall irrevocably
direct:  (i) all  non-government  payors to remit payment to the servicer's post
office box in Lender's name and control, and (ii) all government payors to remit
payment to a second post office box of such servicer in Borrower's  name.  Prior
to funding and upon receipt of the lock box post office box number(s),  Borrower
shall provide Lender re-direct letters (in a form satisfactory to Lender) to all
of Borrower's payors on Borrower's letterhead, including envelopes for Lender to
process and mail (Lender will add postage  which shall be charged to  Borrower).
The Lock Box  Agreement  provides for the servicer to deposit daily all receipts
of the post  office  boxes into  deposit  accounts,  with  non-government  payor
receipts paid into an account subject to Lender's control and,  government payor
receipts paid into an account in Borrower's  name; such accounts shall be (i) at
a financial  institution  acceptable  to Lender,  and (ii) governed by terms and
conditions  acceptable  to Lender.  Borrower  agrees and  acknowledges  that all
government  payor receipts will be immediately  transferred to an account in the
name and  control of Lender.  Deposits  (net of fees) shall be applied to reduce
the Loan balance including Advances,  interest, fees, all applicable charges and
other payments, if applicable,  within 24 hours.  Deposits/receipts  will reduce
the Borrowing  Base in accordance  with Section 2.3 above.  Any receipts (net of
such  servicer's  fees) remaining after all such payments to Lender will be paid
to  Borrower  within 24 hours of  receipt.  Borrower  shall bear all charges for
establishing  and  maintaining the post office box accounts and all bank charges
for such deposit  accounts.  Lender  shall deduct from the deposit  accounts all
sums Borrower owes to it hereunder, including fees, interest, reimbursements and
principal  payments.  Any  Obligations  not  paid by  such  deduction  shall  be
satisfied  by direct  payment  to Lender at 4041  MacArthur  Blvd.,  Suite  401,
Newport Beach,  California 92660. Any amounts hereunder not paid as agreed shall
be assessed a late payment penalty of five percent (5%).

Section 2.7. Term of Agreement;  Prepayment.  The Term of this  Agreement is two
(2) years.  Provided that no Event of Default or any Unmatured  Event of Default
exists, Borrower may

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<PAGE>


terminate this Agreement  provided that it pays to Lender an amount equal to two
and one half percent  (2.5%) of the  Commitment  Amount if canceled in year 1 of
the initial term; and one and one half percent  (1.5%) of the Commitment  Amount
if canceled in year 2. This Agreement  shall be renewed for  consecutive one (1)
year terms unless this Agreement is terminated,  effective as of the last day of
a term,  by written  notice by Lender or Borrower no later than thirty (30) days
before   the   expiration   of  such   term.   All  of   Lender's   obligations,
responsibilities  and duties  shall cease upon the date of  termination  of this
Agreement,  except for its obligation to remit excess receipts from the lock box
deposit accounts in accordance with the terms of this Agreement.

Section 2.8. Lender's Fees. Upon execution  hereof,  Lender shall be entitled to
an  origination  fee equal to one and one half percent  (1.5%) of the Commitment
Amount, less $15,000.00 currently on deposit. Increases to the Commitment Amount
during  the  term  will be  charged  on the  incremental  increase  at the  same
origination percentage.  On or before the first day of each month Borrower shall
pay Lender a monthly  maintenance  fee of One  Thousand  Two  Hundred  Fifty and
no/100 Dollars ($1,250.00).  Commencing sixty (60) days from the date hereof, on
or before the first day of each month  Borrower  shall pay Lender an  unutilized
loan fee of equal to .5% of the difference between the Commitment Amount and the
average outstanding Loan amount as of the previous month.  Lender's fees will be
deducted, when due, directly from receipts from accounts receivable deposited in
accordance with Section 2.6.

Section  2.9.  Interest on the Loans.  All Advances  shall bear  interest on the
unpaid  principal  amount  thereof  from the date made  until  paid in full at a
fluctuating rate equal to the Prime Rate plus three percent (3%). Interest shall
be payable  monthly in arrears on the first day of each month for the  preceding
month.  Interest shall be calculated on the basis of a year of 360 days, but for
the actual  number of days  elapsed.  Interest  accrued but not paid pursuant to
Section 2.6 shall be treated as an Advance if not otherwise paid within five (5)
days of the end of the month in which it accrues.

Section 2.10. Conditions to the Closing. Lender's obligation to make the initial
Advance hereunder on the Closing Date is subject to Lender's  determination that
Borrower as of the date of the Advance has satisfied,  and continues to satisfy,
the following conditions:

     The  representations  and warranties set forth in this Agreement and in the
other Loan Documents  shall be true and correct on and as of the date hereof and
shall be true and correct in all  material  respects as of the Closing  Date and
Borrower shall have performed all obligations  which were to have been performed
by it hereunder.

     (b) Borrower shall have executed and delivered to Lender (or shall cause to
be executed and delivered to Lender by the appropriate Persons) the following:

      (i)    this Agreement;

      (ii)   the Note;



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<PAGE>


     (iii)  UCC-1 Financing Statements;

     (iv)   the Lock Box Agreement;

     (v)    Payor redirect letters;

     (vi) pay-off  letters,  UCC  Termination  Statements  and Lien  Releases as
required to grant Lender a first priority security interest other than Permitted
Liens in Collateral pledged as security for repayment of the Loan;

     (vii) certified copies of resolutions of the Board of Directors of Borrower
authorizing  the  execution  and  delivery of Loan  Documents  to be executed by
Borrower; and

     (viii) copies of the Articles of Incorporation of Borrower certified by the
Secretary of State of the applicable issuing state.

     (ix) a  certificate  from  an  officer  of  Borrower  indicating  that  the
representations  and warranties  contained herein are true and correct as of the
Closing Date.

     (c)  Neither  an Event of  Default  nor an  Unmatured  Default  shall  have
occurred and be continuing as of the Closing Date,

     (d) Borrower or Guarantor shall not have suffered a material adverse change
in its business,  operations or financial  condition  from that reflected in the
Financial Statements of Borrower or Guarantor delivered to Lender or otherwise.

     (e) Lender  shall  have  received  such  additional  supporting  documents,
certificates  and assurances as Lender shall  reasonably  request which shall be
satisfactory to Lender in form and substance.

Section 2.11. If there is more than one Borrower,  the obligations hereunder are
joint  and  several  obligations  of the  Borrowers.  Notwithstanding  any other
provision  hereof, a Borrower's  liability for the obligations at any time shall
not  exceed  the  greater  of (1)  the  sum of (a) the  total  principal  of the
obligations  that such  Borrower  directly or  indirectly  received  and (b) the
interest  and  expenses  accrued  with  respect to such  principal,  and (2) the
greater of (a)  ninety-five  percent (95%) of such  Borrower's Net Fair Value on
the date hereof,  and (b) ninety-five  percent (95%) of such Borrower's  highest
Net Fair Value during the period  commencing  after such date and terminating on
the date of determination of liability hereunder




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<PAGE>



                                    SECTION 3

                                SECURITY INTEREST

Section 3.1. Grant of Security  Interest.  In order to secure prompt payment and
performance of all  Obligations,  Borrower  hereby grants to Lender a continuing
first-priority  pledge  and  security  interest  in the  following  property  of
Borrower (the "Collateral"), whether now owned or existing or hereafter acquired
or arising and  regardless of where  located,  subject only to Permitted  Liens.
This security interest in the Collateral shall attach to all Collateral  without
further action on the part of Lender or Borrower.  The Collateral  shall consist
of the  following,  subject in each case only to Permitted  Liens  together with
such  third-party  consents,  lien waivers and estoppel  certificates  as Lender
shall  reasonably  require:  All  of  Borrower's  present  and  future  Accounts
(including,  without  limitation,  all of  Borrower's  rights under that certain
Professional  Services  Agreement  dated February 13, 1992 between  Borrower and
United Imaging Group; that certain Consulting  Services Agreement dated June 29,
1991 between  Borrower  and  Monmouth  Diagnostic  Imaging,  P.A.;  that certain
Consulting  Services  Agreement  dated June 26, 1991 between  Borrower and Wayne
MRI,  P.A.;  that  certain  Consulting  Services  Agreement  dated June 29, 1991
between Borrower and Edgewater Diagnostic Imaging, P.A.; that certain Consulting
Services and License  Agreement  dated  January 27, 1986 as Amended and Assigned
between Borrower and Kings Medical Diagnostic Imaging, P.C.).

                                    SECTION 4

                            SPECIFIC REPRESENTATIONS

Section 4.1.  Name of  Borrower.

The exact name, state law under which Borrower was organized, prior legal names,
current or prior trade names are set forth on Schedule 4.1.

Section 4.2. Mergers and Consolidations. Except as disclosed on Schedule 4.2, no
entity has merged into any of Borrower or been consolidated with Borrower.

Section 4.3.  Purchase of Assets.  Except as disclosed on Schedule 4.3 no entity
has sold  substantially all of its assets to Borrower or sold assets to Borrower
outside the ordinary course of such seller's business at any time in the past.

Section  4.4.  Change of Name or Identity.  Borrower  shall not change its name,
business   structure  or  identity  or  use  a  new  trade  name  without  prior
notification to Lender or merge into or consolidate with any other entity.

                                    SECTION 5

                         PROVISIONS CONCERNING ACCOUNTS

Section 5.1. Office and Records of Borrower.  Borrower's chief executive offices
are  located  at: 200 Schulz  Drive,  Middletown,  New  Jersey  07701.  Borrower
maintains  all of its records  with  respect to Accounts  at: 200 Schulz  Drive,
Middletown,  New Jersey 07701. Borrower has not at any time within the past four
(4) months maintained their chief executive office or their records with respect

                                              10

<PAGE>


to Accounts at any other location and shall not do so hereafter  except with the
prior written consent of Lender.

Section 5.2. Representations. Borrower represents and warrants that each Account
at the time of its  assignment  to Lender (a) will be owned  solely by Borrower,
(b) will be for a liquidated  amount maturing as stated in Borrower's Books; (c)
will be a bona fide existing  obligation created by the rendition of services to
Account  Debtors or their  insured by  Borrower  in the  ordinary  course of its
business;  and  (d)  will  not  be  subject  to  any  known  deduction,  offset,
counterclaim,  return  privilege,  or other  condition,  except as  reflected on
Borrower's  Books.  Borrower  shall neither  redate any invoices nor reissue new
invoices in full or partial satisfaction of old invoices. Allowances, if any, as
between  Borrower and its customers  will be on the same basis and in accordance
with the usual customary practices of Borrower as they exist on the date of this
Agreement.

Section 5.3. Returns and Repossessions. Borrower shall notify Lender within five
(5)  business  days of  occurrence  of all material  claims  asserted by Account
Debtors.

Section 5.4.  Borrowing  Base Reports.  Borrower shall on a weekly basis execute
and  deliver to  Lender,  in form and  content  satisfactory  to  Lender, (i) a
Borrowing Base report;  (ii) a detailed aging of Accounts; and (iii) a charges,
collections  and  adjustment  summary  for the week.  Borrower  shall,  upon the
request of Lender execute and deliver to Lender an updated Borrowing Base report
reflecting  additional  billings,  write-offs and deposits and all of Borrower's
accounts receivable data in a computer disc or tape format acceptable to Lender.
On a monthly basis, and no later than the 10th day of each month, Borrower shall
submit to  Lender  (i) a  month-end  Borrowing  Base  Report,  (ii) an  accounts
receivable  aging report as of the last day of the  preceding  month,  and (iii)
charges,  collections and adjustments  summary for the preceding  month.  Lender
shall  periodically  review Borrower's  actual  adjustments to cash receipts and
write-offs,  as well as  Borrower's  payor  profile.  To the  extent  Borrower's
adjustments, write-offs and payor profile materially changes, Lender may, in its
sole discretion, change the Net Collectible Percentage attributable to each type
of account by written notice to Borrower of such change.

Section 5.5.  Compliance  Certificate.  With each final month-end Borrowing Base
report which Borrower delivers to Lender,  Borrower also shall deliver to Lender
a  Compliance  Certificate  in the form of Exhibit 5.5  attached  hereto,  which
Compliance Certificate shall be completed and signed by an officer of Borrower.

Section 5.6.  Lender's  Rights.  Any officer,  employee or agent of Lender shall
have the  right,  at any time or times  hereafter,  in the name of Lender or its
nominee  (including  Borrower),  with prior  notice to  Borrower,  to verify the
validity, amount or any other matter relating to any Accounts by mail, telephone
or otherwise;  and all reasonable  costs thereof shall be payable by Borrower to
Lender.  Lender,  or its  designee  may at any time after  default  by  Borrower
hereunder  notify  customers or Account Debtors that Accounts have been assigned
to Lender or of Lender's security interest therein and after default by Borrower
hereunder  collect the same directly and charge all reasonable  collection costs
and expenses to Borrower's account.


                                              11

<PAGE>


Section 5.7. Disclaimer of Liability.  Lender shall not be liable to Borrower or
any third person for the correctness, validity or genuineness of any instruments
or  documents   released  or  endorsed  to  Borrower  by  Lender   (which  shall
automatically  be deemed to be without  recourse  to Lender in any event) or for
the existence, character, quantity, quality, condition, value or delivery of any
goods  purporting  to be  represented  by any such  documents;  and  Lender,  by
accepting a Lien on the  Collateral or by releasing any  Collateral to Borrower,
shall not be deemed to have assumed any  obligation or liability to any supplier
or  creditor  of  Borrower  or to any  other  third  party.  Borrower  agrees to
indemnify  and  defend  Lender and hold it  harmless  in respect to any claim or
proceeding arising out of any matter referred to in this Section 5.7.

Section  5.8.  Post Default  Rights.  If an Event of Default has occurred and is
continuing  hereunder,  no  discount,  credit or  allowance  shall be granted or
permitted  by  Borrower  to  any  Account  Debtor;   provided,   however,  that,
notwithstanding the existence of an Event of Default,  (i) Borrower may continue
to invoice  and bill  Account  Debtors  under  discount,  credit  and  allowance
arrangements  that Borrower  maintained in the ordinary course of business prior
to such Event of Default  occurring,  and (ii) Account  Debtors may,  during the
continuance  of an Event of  Default,  utilize  discount,  credit and  allowance
arrangements  that Borrower extended to them in the ordinary course of business.
Lender may,  after  default by  Borrower,  settle or adjust  disputes and claims
directly with Account  Debtors for amounts and upon terms that Lender  considers
advisable,  and in such cases,  Lender will credit Borrower's  account with only
the net amounts received by Lender in payment of such disputed  Accounts,  after
deducting all Lender Expenses incurred in connection therewith.

Section 5.9.  Accounts Owed by Federal  Government.  If any Accounts shall arise
out of a contract with the United States of America or any  department,  agency,
subdivision or  instrumentality  thereof,  Borrower shall promptly notify Lender
thereof  in writing  and take all other  action  requested  by Lender to protect
Lender's  Lien on such  Accounts  under the  provisions  of the federal  laws on
assignment of claims.

Section 5.10.  Business Activity Reports.  Borrower has filed and shall file all
legally  required  notices and reports of its business  activities  with all the
appropriate  taxing  authorities and the appropriate  Governmental  Authority of
each jurisdiction in which Borrower is legally required to file such a notice or
report.

                                    SECTION 6

                    PROVISIONS CONCERNING GENERAL INTANGIBLES

Section 6.1.  Contracts.

     (a) Schedule 6.1. is a true and complete list of all material contracts and
agreements to which Borrower is a party.



                                              12

<PAGE>


     (b)  Borrower  shall  not  amend,  modify or  supplement  any  contract  or
agreement  included in the Collateral or waive any provision  thereof other than
in  accordance  with  Borrower's  standard  business  practice,  nor shall  such
standard business practice be materially changed without Lender's consent, which
shall not be unreasonably withheld.

     (c)  Borrower  shall  remain  liable  to  perform  all  of its  duties  and
obligations under any contracts and agreements included in the Collateral to the
same extent as if this  Agreement  had not been  executed;  and Lender shall not
have any  obligation or liability  under such contracts and agreements by reason
of this Agreement or otherwise.

     (d)  Borrower  need not pay any amount due under any  contract or agreement
listed on Schedule  6.1, nor  otherwise  perform any action  required  under the
terms of any such contract or agreement, if such payment or performance is being
contested  in good  faith by  appropriate  proceedings  promptly  initiated  and
diligently  conducted,  if Lender is notified in advance of such contest, and if
Borrower establishes any reserve or other appropriate provision required by GAAP
and deposits  with Lender cash or an  acceptable  bond  reasonably  requested by
Lender.

                                    SECTION 7

                     OTHER PROVISIONS CONCERNING COLLATERAL

Section 7.1. Further  Assurances.  Borrower shall execute and deliver to Lender,
concurrent with Borrower's  execution of this Agreement and at any time or times
hereafter  at the  request of Lender,  all  financing  statements,  continuation
financing  statements,  security  agreements,  chattel  mortgages,  assignments,
endorsements  of  certificates of title,  applications  for titles,  affidavits,
reports,  notices,  schedules  of Accounts,  letters of authority  and all other
documents  Lender may reasonably  request,  in form  satisfactory to Lender,  to
perfect and maintain  perfected Lender's Liens in the Collateral and in order to
consummate fully all of the transactions  contemplated under the Loan Documents.
Borrower hereby irrevocably  makes,  constitutes and appoints Lender (and any of
Lender's officers,  employees or agents designated by Lender) as Borrower's true
and  lawful  attorney  with  power to sign the  name of  Borrower  on any of the
above-described  documents  or on any other  similar  documents  that need to be
executed,  recorded  or filed in order to perfect or  continue  to be  perfected
Lender's Liens in the Collateral.

Section  7.2.  Lender's  Duty of Care  Lender  shall  have no duty of care  with
respect to the Collateral except that Lender shall exercise reasonable care with
respect to the  Collateral in Lender's  custody.  Lender shall be deemed to have
exercised  reasonable care if such property is accorded treatment  substantially
equal to that which  Lender  accords its own  property  or if Lender  takes such
action with respect to the  Collateral as Borrower  shall request or agree to in
writing  provided  that neither  failure to comply with any such request nor any
omission to do any such act  requested by Borrower  shall be deemed a failure to
exercise  reasonable  care.  Lender's  failure to take steps to preserve  rights
against any  parties or  property  shall not be deemed to be failure to exercise
reasonable care with respect to the Collateral in Lender's custody.  All risk, 

                                              13
<PAGE>

loss, damage or destruction of the Collateral shall be borne by Borrower.

Section 7.3.  Reinstatement  of Liens.  If, at any time after payment in full by
Borrower of all Obligations  and termination of Lender's Liens,  any payments on
Obligations previously made by Borrower or any other Person must be disgorged by
Lender for any reason whatsoever (including, without limitation, the insolvency,
bankruptcy,  or reorganization of Borrower or such other Person), this Agreement
and Lender's  Liens  granted  hereunder  shall be reinstated as to all disgorged
payments as though such payments had not been made,  and Borrower shall sign and
deliver  to Lender all  documents  and other  items  necessary  to  perfect  all
terminated Liens.

Section  7.4.  Lender  Expenses.  If  Borrower  fails,  as required by the terms
hereof, (i) to pay any moneys (whether taxes, assessments, insurance premiums or
otherwise)  due to third  persons  or  entities,  (ii) to make any  deposits  or
furnish any required  proof of payment or deposit or (iii) to discharge any Lien
not permitted  hereby,  then Lender may, to the extent that it  determines  that
such  failure  by  Borrower  could have a material  adverse  effect on  Lender's
interests  in the  Collateral,  in its  discretion  and without  prior notice to
Borrower,  make  payment of the same or any part  thereof.  Any amounts  paid or
deposited by Lender shall constitute  Lender Expenses,  shall become part of the
Obligations,  shall bear  interest  at the rate of  eighteen  percent  (18%) per
annum, and shall be secured by the Collateral. Any payments made by Lender shall
not constitute (a) an agreement by Lender to make similar payments in the future
or (b) a waiver by Lender of any Event of Default under this  Agreement.  Lender
need not  inquire as to, or contest  the  validity  of, any such  expense,  tax,
security  interest,  encumbrance  or Lien and the receipt of the usual  official
notice for the payment of moneys to a  governmental  entity shall be  conclusive
evidence that the same was validly due and owing.

Borrower  shall  immediately  and without demand  reimburse  Lender for all sums
expended  by  Lender  that  constitute  Lender  Expenses,  and  Borrower  hereby
authorizes   and  approves  all  advances  and  payments  by  Lender  for  items
constituting Lender Expenses.

Section 7.5.  Inspection of Records.  During usual business hours,  Lender shall
have the right to inspect  Borrower's  Books and  records in order to verify the
amount or condition  of, or any other matter  relating  to, the  Collateral  and
Borrower's financial condition and to copy and make extracts therefrom. Borrower
waives the right to assert a confidential relationship, if any, it may have with
any  accounting  firm or  service  bureau  in  connection  with any  information
requested  by Lender  pursuant  to this  Agreement  and agrees  that  Lender may
directly  contact any such  accounting firm or service bureau in order to obtain
such information.

Section 7.6.  Waivers.  Except as  specifically  provided  for herein,  Borrower
waives demand, protest, notice of protest, notice of default or dishonor, notice
of payment  and  nonpayment,  notice of any  default,  nonpayment  at  maturity,
release, compromise,  settlement,  extension or renewal of any or all commercial
paper,  accounts,  documents,  instruments,  chattel paper and guaranties at any
time held by Lender on which Borrower may in any way be liable.



                                              14

<PAGE>


                                    SECTION 8

                         REPRESENTATIONS AND WARRANTIES

As of the date hereof  Borrower  hereby  warrants and  represents  to Lender the
following:

Section 8.1. Corporate Status Borrower is a corporation  validly existing and in
good standing under the laws of the state of its incorporation; and is qualified
and  licensed to do business  and is in good  standing in any state in which the
conduct of its  business or its  ownership  of property  requires  that it be so
qualified or licensed, and has the power and authority (corporate and otherwise)
to execute and carry out the terms of the Loan Documents to which it is a party,
to own its assets and to carry on its business as currently conducted.

Section 8.2. Authorization. The execution, delivery, and performance by Borrower
of this Agreement and each other Loan Document have been duly  authorized by all
necessary  corporate or  partnership  action.  Borrower,  has duly  executed and
delivered  this  Agreement  and each other Loan Document to which it is a party,
and each of them  constitutes  a valid and binding  obligation  of Borrower,  as
applicable, enforceable according to its terms except as such enforceability may
be limited by equitable principles and by bankruptcy, insolvency or similar laws
affecting the rights of creditors generally.

Section 8.3. No Breach.  The execution,  delivery and performance by Borrower of
this  Agreement and each other Loan Document to which they are a party (a) will
not contravene any law or any governmental  rule or order binding on Collateral;
(b) will not violate any provision of the articles of  incorporation,  bylaws or
partnership  agreement,  as  applicable,  of Borrower; (c) will not violate any
agreement or instrument by which Borrower,  as applicable, is bound; (d) do not
require any notice to consent by any  Governmental  Authority; and (e) will not
result in the  creation of a Lien on any assets of  Borrower  except the Lien to
Lender granted herein.

Section  8.4.  Taxes.  All  assessments  and taxes,  whether  real,  personal or
otherwise,  due or payable by or imposed, levied or assessed against Borrower or
any of its  property  have been paid in full  before  delinquency  or before the
expiration of any extension period; and Borrower has made due and timely payment
or deposit of all federal, state, and local taxes,  assessments or contributions
required  of it by law,  except  only  for  items  that  Borrower  is  currently
contesting  diligently  and in good faith and that have been fully  disclosed in
writing to Lender.

Section  8.5.  Deferred  Compensation  Plans.  Borrower  has made  all  required
contributions  to all  deferred  compensation  plans to which it is  required to
contribute,  and  Borrower has no  liability  for any  unfunded  benefits of any
single-employer or multi-employer plans. Borrower is not and at no time has been
a sponsor of,  provided,  or maintained  for any  employees any defined  benefit
plan.

Section 8.6.  Litigation  and  Proceedings.  Except as set forth on Schedule 8.6
attached hereto,  there are no outstanding  judgments against Borrower or any of
its assets and there are no actions or

                                              15


<PAGE>

proceedings  pending by or against  Borrower before any court or  administrative
agency.  Borrower  has no knowledge  or belief of any  pending,  threatened,  or
imminent  litigation,   governmental  investigations,   or  claims,  complaints,
actions, or prosecutions  involving Borrower,  except for ongoing which Borrower
is the  plaintiff  and  except as set forth in  Schedule  8.6  hereto.collection
matters in which  Borrower is the  plaintiff and except as set forth in Schedule
8.6 hereto.

Section 8.7.  Business.  Borrower has all franchises,  authorizations,  patents,
trademarks,  copyrights and other rights necessary to advantageously conduct its
business.  They are all in full force and  effect and are not in known  conflict
with  the  rights  of  others.  Borrower  is not a party  to or  subject  to any
agreement or restriction  that is so unusual or burdensome  that it might have a
material adverse effect on Borrower's business, properties or prospects.

Section 8.8. Laws and  Agreements.  Borrower is in compliance  with all material
agreements applicable to it, including obligations to contribute to any employee
benefit  plan or  pension  plan  regulated  by ERISA.  Borrower  is in  material
compliance with all laws applicable to it.

Section 8.9.  Ownership of Accounts.  Prior to the Lender making any Loan as set
forth  herein,  the  Borrower  will be the sole  owner  of,  and  have  good and
marketable title to the Accounts pledged as security for such Loan.

Section  8.10. No conflict.  The granting of a security  interest in the pledged
Accounts  to the Lender will not  violate  the terms or  provisions  of any loan
document  or any other  agreement  to which the  Borrower  then is a party or by
which it is bound.

Section 8.11.  Security Interest.  After giving effect to each Loan contemplated
by this  Agreement,  the Lender  will be the holder of a valid  perfected  first
priority  security  interest in the pledged  Accounts.  Accounts  pledged to the
lender in connection with any Loan will be free and clear of all liens.

Section 8.12. No Defaults.  As of the date on which an Account is pledged to the
Lender  pursuant to the terms hereof there shall have been no default under such
Account.

Section 8.13. Origination.Each Account will have been originated by the Borrower
in the ordinary course of its business in accordance with the Borrower's regular
credit approval  process and does not contravene any laws,  rules or regulations
applicable  thereto.  No pledged  Account  will have been  selected on any basis
which would have any adverse effect on the Lender.

Section 8.14.  Legality.  No pledged Account will have been originated in, or be
subject to the laws of, any jurisdiction  whose laws would make the terms hereof
or any transaction contemplated hereby unlawful.

Section 8.15.  Consents.  No consent or approval is required for the pledging of
any Accounts to the Lender pursuant to the terms of this  Agreement,  except for
such consents or approvals as have been obtained.


                                              16

<PAGE>


Section 8.16.  Financial  Condition.  All financial  statements and  information
relating to Borrower that have been or may hereafter be delivered by Borrower to
Lender are accurate and complete and have been prepared in accordance with GAAP.
Borrower has no material obligations or liabilities of any kind not disclosed in
that financial information, and there has been no material adverse change in the
financial  condition  of Borrower  since the date of the most  recent  financial
statements submitted to Lender.

Section 8.17.  Health Care Laws.

     (a) Borrower has  obtained all permits,  licenses and other  authorizations
that are required under Health Care Laws applicable to Borrower and it and is in
compliance  in all  material  respects  with all  terms  and  conditions  of the
required permits, licenses and authorizations,  and is also in compliance in all
material  respects  with  all  other  limitations,   restrictions,   conditions,
standards,  prohibitions,  requirements,  obligations,  schedules and timetables
contained in such Health Care Laws.

     (b)  Borrower  is not aware of, and has not  received  notice of, any past,
present or future  events,  conditions,  circumstances,  activities,  practices,
incidents,  actions or plans that may  interfere  with or prevent  compliance or
continued compliance in any material respect with Health Care Laws.

     (c) There is no civil,  criminal or administrative  action,  suit,  demand,
claim, hearing,  notice or demand letter, notice of violation,  investigation or
proceeding pending or threatened against Borrower, relating in any way to Health
Care Laws.

Section 8.18. Cumulative  Representations.  The warranties,  representations and
agreements  set forth herein shall be cumulative  and in addition to any and all
other  warranties,  representations  and agreements that Borrower shall give, or
cause to be given, to Lender, either now or hereafter.

                                    SECTION 9

                                    COVENANTS

Section 9.1. Encumbrance of Collateral. Borrower shall not create, incur, assume
or permit to exist any Lien on any Collateral now owned or hereafter acquired by
Borrower, except for Liens to Lender and Permitted Liens.

Section 9.2. Business  Borrower.  shall engage primarily in business of the same
general character as that now conducted by Borrower.

Section 9.3.  Condition and Repair.  Borrower  shall maintain in good repair and
working order all properties  used in their business and from time to time shall
make all appropriate repairs and replacements thereof.



                                              17

<PAGE>


Section  9.4.  Taxes.  Borrower  shall  pay all  taxes,  assessments  and  other
governmental  charges  imposed upon it or any of its assets or in respect of any
of its  franchises,  business,  income or profits before any penalty or interest
accrues  thereon,  and all claims  (including,  without  limitation,  claims for
labor,  services,  materials  and  supplies)  for sums that have  become due and
payable  and that by law have or might  become a Lien or charge  upon any of its
assets,  provided  that  (unless any  material  item or property  would be lost,
forfeited or  materially  impaired as a result  thereof) no such charge or claim
need be paid if it is being  contested in good faith by appropriate  proceedings
promptly initiated and diligently conducted, if Lender is notified in advance of
such  contest,  and if Borrower  establishes  any  reserve or other  appropriate
provision required by GAAP. Borrower shall make timely payment or deposit of all
FICA payments and withholding  taxes required of it by applicable laws and will,
upon request,  furnish Lender with proof  satisfactory to Lender indicating that
Borrower has made such payments or deposits.

Section 9.5. Accounting System. Borrower at all times hereafter shall maintain a
standard and modern system of accounting  in accordance  with GAAP,  with ledger
and account cards or computer tapes,  disks,  printouts and records that contain
information pertaining to the Collateral that may from time to time be requested
by Lender. Borrower shall not modify or change its method of accounting or enter
into any agreement  hereafter with any  third-party  accounting  firm or service
bureau for the preparation or storage of Borrower's  accounting  records without
said  accounting  firm's or  service  bureau's  agreeing  to  provide  to Lender
information regarding the Collateral and Borrower's financial condition.

Section 9.6. Quarterly  Financial  Statements.  Borrower shall furnish Lender as
soon as practicable  but in no event later than  forty-five  (45) days after the
end of each of the first three quarterly fiscal periods of each fiscal year with
unaudited  quarterly  financial  statements in form and substance as required by
Lender,  including a balance sheet, an income  statement and a statement of cash
flows,  prepared in accordance with GAAP together with a certificate executed by
the chief financial  officer of Borrower  stating that the financial  statements
fairly  present the  financial  condition of Borrower as of the date and for the
periods covered and that as of the date of such  certificate  there has not been
any violation of any  provision of this  Agreement or the happening of any Event
of Default or Unmatured Default hereunder.

Section 9.7. Annual Financial Statements.  Borrower shall furnish Lender as soon
as  practicable  but in no event  later than ninety (90) days after the close of
each fiscal year  commencing  with fiscal  1996 with  audited  annual  financial
statements, which financial statements shall be prepared in accordance with GAAP
and shall be certified without  qualification by an independent certified public
accounting firm satisfactory to Lender. With all financial statements,  Borrower
will also deliver a certificate of its chief financial officer attesting that no
Event of Default or Unmatured  Default  under the  Agreement has occurred and is
continuing.

Section  9.8.  Borrower  shall  maintain at all times during the term hereof the
following  financial  covenants,  measured in accordance  with GAAP: (i) minimum
Tangible Net Worth of $3,000,000,  (ii) Debt to Equity Ratio of not greater than
3.0 to 1.0.


                                              18

<PAGE>


Section 9.9.  Borrower's  Cash Flow Ratio shall not be less than twenty  percent
(20%) for two (2) consecutive reporting periods.

Section 9.10.  Further  Information.  Borrower shall promptly supply Lender with
such other information  concerning its affairs as Lender may reasonably  request
from time to time  hereafter  and shall  promptly  notify Lender of any material
adverse change in Borrower's financial condition and any condition or event that
constitutes a breach of or event that constitutes an Event of Default under this
Agreement.  In addition,  Borrower authorizes Lender to contact credit reporting
agencies concerning, Borrower's credit standing. Borrower also authorizes Lender
to utilize Borrower's name in Lender's marketing materials.

Section  9.11.  ERISA  Covenants.  Guarantor  or Borrower  shall comply with all
applicable  provisions  of ERISA and all other laws  applicable  to any deferred
compensation  plans with which  Guarantor or Borrower is  associated,  and shall
promptly  notify Lender of the  occurrence of any event that could result in any
material  liability  of  Borrower  to any person to any person  whatsoever  with
respect to any such plan.

Section 9.12. Restrictions on Merger, Consolidation, Sale of Assets, Issuance of
Stock, etc. Without prior written consent of Lender, Borrower shall not:

     (a) merge or consolidate with any Person;

     (b) sell,  lease or otherwise  dispose of its assets in any  transaction or
series of  related  transactions  (other  than sales in the  ordinary  course of
business);

     (c) liquidate,  dissolve or effect a recapitalization  or reorganization in
any form of transaction;



                                              19

<PAGE>


     (d) acquire  interests of any  business in excess of Five Hundred  Thousand
Dollars  ($500,000.00)  in the  aggregate in any  calendar  year in any business
(whether by purchase of assets, purchase of stock, merger or otherwise);

     (e) become subject to any agreement or instrument  which by its terms would
restrict Borrower's right or ability to perform any of its obligations to Lender
pursuant to the terms of the Loan Documents; or

     (f) authorize or issue any additional stock or equity interest.
Section 9.13.  Health Care Covenants:

     (a) Borrower  shall comply in all material  respects with, and shall obtain
all permits required by, all Health Care Laws applicable to Borrower.

     (b) Borrower shall promptly  furnish to Lender a copy of any  communication
from any Governmental  Authority concerning any possible violation of any Health
Care Laws or any  occurrence of which  Borrower  would be required to notify any
Governmental Authority with jurisdiction over Health Care Laws.

Section 9.14. Distributions. Borrower shall not make any Distributions except as
(i) set forth on Schedule  9.12  hereto,  and (ii)  authorized  by Lender,  upon
Borrower's request,  which authorization shall not be unreasonably  withheld and
which  authorization shall not be deemed to authorize any Distributions while an
Event of Default is continuing or if such  Distribution  would cause an Event of
Default to occur.

Section 9.15. Subordinate Obligations. Borrower shall not voluntarily prepay any
principal  (including the making of any sinking fund  payment),  interest or any
other amount in respect of Subordinate Obligations.

Section  9.16.  Amendments.  Borrower  shall  not  amend  any  provision  of any
Subordinate   Obligation  if  such  amendment   would  (i)  affect  any  of  the
subordination  provisions thereof, (ii) advance the date of any required payment
or prepayment  thereunder,  (iii) make covenants  therein more burdensome,  when
considered  in their  entirety,  to  Borrower,  (iv) reduce any default or grace
period therein provided,  or (v) otherwise have a material adverse effect on the
interests of Lender.


                                              20

<PAGE>


                                   SECTION 10

                                EVENTS OF DEFAULT

An Event of  Default  shall be  deemed to exist if any of the  following  events
shall have occurred and be continuing:

     (a)  Borrower  fails to make any  payment of  principal  or interest or any
other  payment  on the Note or any other  Obligation  when due and  payable,  by
acceleration or otherwise, and such failure shall continue for five (5) business
days after the payment is due;

     (b)  Borrower  fails to observe  or  perform  any  covenant,  condition  or
agreement to be observed or performed  pursuant to the terms hereof or any other
Loan  Document  to which it is a party and such  failure is not cured as soon as
reasonably  practicable  and in any event within  thirty (30) days after written
notice thereof by Lender;

     (c) A court  enters a decree or order for relief in respect of  Borrower in
an  involuntary  case  under any  applicable  bankruptcy,  insolvency,  or other
similar  law then in effect,  or  appoints  a  receiver,  liquidator,  assignee,
custodian,  trustee,  or sequestrator (or other similar official) of Borrower or
for any substantial part of its property, or orders the windup or liquidation of
Borrower's  affairs; or a petition initiating an involuntary case under any such
bankruptcy,  insolvency, or similar law is filed against Borrower and is pending
for sixty (60) days without dismissal;

     (d) Borrower  commences a voluntary case under any  applicable  bankruptcy,
insolvency or other similar law then in effect, makes any general assignment for
the benefit of creditors,  fails generally to pay its debts as such debts become
due, or takes corporate action in furtherance of any of the foregoing;

     (e)  Final  judgment  for the  payment  of money on any  claim in excess of
$50,000 is rendered  against  Borrower and remains  undischarged for twenty (20)
days during which execution is not effectively stayed;

     (f) Any  guarantor  of the  Obligations  revokes or  attempts to revoke its
guaranty of any of the  Obligations,  or becomes  the  subject of an  insolvency
proceeding  of the type  described  in clauses (c) or (d) above with  respect to
Borrower or fails to observe or perform any covenant,  condition or agreement to
be performed under any Loan Document to which it is a party;

     (g) Borrower makes any payment on account of any  Subordinate  Obligations,
other than payments specifically permitted by the terms of such subordination or
this Agreement;

     (h) Any Person holding any Subordinate  Obligations  becomes the subject of
any proceeding  resulting in the termination of the  subordination  arrangement,
terminates the subordination arrangement or asserts that it is terminated.


                                              21

<PAGE>


     (i) Any Collateral or any part thereof is sold, agreed to be sold, conveyed
or allocated by operation of law or otherwise;

     (j)  Borrower  defaults  under  the  terms  of any  Indebtedness  or  lease
involving  total payment  obligations  of Borrower in excess of $50,000 and such
default is not cured within the time period permitted  pursuant to the terms and
conditions  of such  Indebtedness  or lease,  or an event  occurs that gives any
creditor or lessor the right to accelerate the maturity of any such indebtedness
or lease payments;

     (k)  Demand is made for  payment of any  Indebtedness  in excess of $50,000
that was not originally payable upon demand when incurred but the terms of which
were later changed to provide for payment upon demand;

     (l) Borrower is enjoined, restrained or in any way prevented by court order
from continuing to conduct all or any material part of its business affairs;

     (m) A judgment or other claim in excess of $50,000  becomes a Lien upon any
or all of Borrower's assets, other than a Permitted Lien;

     (n) A notice of Lien,  levy or  assessment in excess of $50,000 is filed of
record  with  respect to any or all of  Borrower's  assets by the United  States
Government,  or any department,  agency, or instrumentality  thereof,  or by any
state, county, municipal or other Government Authority; or any tax or debt owing
at any time  hereafter to any one or more of such  entities  becomes a Lien upon
any or all of  Borrower's  assets and the same is not paid on the  payment  date
thereof, except to the extent such tax or debt is being contested by Borrower as
permitted in Section 8.4;

     (o)  There is a  material  impairment  of the  value of the  Collateral  or
priority of Lender's Liens on the Collateral;

     (p) Any of  Borrower's  assets in excess of $50,000 or any  Collateral  are
seized, subjected to a distress warrant, levied upon or come into the possession
of any judicial officer;

     (q) Any representation or warranty made in writing to Lender by any officer
of Borrower in connection with the  transactions  contemplated in this Agreement
is materially incorrect when made;

     (r) If the  aggregate  dollar value of all  judgments,  defaults,  demands,
claims and notices of Liens under  clauses  (e),  (j),  (k),  (m) and (n) hereof
exceeds $100,000; or

     (s)  Borrower  shall fail to direct all  receipts  for Accounts to the Lock
Box.
     
     (t) As of any day,  the Cash Flow  Ratio is less than the  Designated  Cash
Flow Ratio.


                                              22

<PAGE>

                                   SECTION 11

                                    REMEDIES

Section 11.1.  Specific Remedies.  Upon the occurrence of any Event of Default:

     (a)  Lender may cease  advancing  money or  extending  credit to or for the
benefit of Borrower  under this  Agreement,  under any other Loan  Document,  or
under any other agreement between Borrower and Lender.

     (b) Lender may declare all  Obligations to be due and payable  immediately,
whereupon they shall  immediately  become due and payable  without  presentment,
demand,  protest or notice of any kind, all of which are hereby expressly waived
by Borrower.

     (c) Lender may set off against the Obligations  all  Collateral,  balances,
credits, deposits,  accounts, or moneys of Borrower then or thereafter held with
Lender, including amounts represented by certificates of deposit.

     (d) Lender may pay, purchase, contest or compromise any encumbrance, charge
or Lien that,  in the opinion of Lender,  appears to be prior or superior to its
Lien and pay all  reasonable  expenses  incurred in  connection  therewith.

     (e) Lender may  (i) notify Account  Debtors  to make  payment on  Accounts
directly to Lender; (ii) settle, adjust, compromise,  extend or renew Accounts,
whether  before  or after  legal  proceedings  to  collect  such  Accounts  have
commenced;  (iii) prepare and file any  bankruptcy  proofs of claim or  similar
documents  against  any  Account  Debtor;  (iv) prepare  and  file  any  notice,
assignment,  satisfaction,  or release of Lien, UCC termination statement or any
similar  document; (v) sell or assign  Accounts, individually or in bulk, upon
such  terms,  for  such  amounts,  and at such  time or times  as  Lender  deems
advisable;  and  (vi) complete the performance  required of Borrower under any
contract or  agreement  to which  Borrower is a party and out of which  Accounts
arise or may arise.

     (f) Lender may (i) endorse Borrower's name on all checks,  notes,  drafts,
money  orders or other  forms of payment of or  security  for  Accounts or other
Collateral; (ii) sign Borrower's name on drafts  drawn on Account  Debtors or
issuers of  letters  of credit;  and  (iii) notify  the  postal  authorities  in
Borrower's  name to change the address for  delivery  of  Borrower's  mail to an
address  designated by Lender,  receive and open all mail addressed to Borrower,
copy all mail,  return all mail relating to Collateral,  and hold all other mail
available for pickup by Borrower.

Section 11.2.  Power of Attorney.  Borrower  hereby  appoints Lender (and any of
Lender's  officers,  employees,  or agents  designated  by Lender) as Borrower's
attorney,  with  power  whether  before or after the  occurrence  of an Event of
Default: (a) to endorse Borrower's name on any checks, notes, acceptances, money
orders, drafts or other forms of payment or security that may come into Lender's
                                
                                       24

<PAGE>


possession;  (b) to sign Borrower's name on drafts against Account  Debtors,  on
schedules and  assignments of Accounts,  on  verifications  of Accounts,  and on
notices to Account Debtors;  (c) to notify the post office authorities to change
the address for delivery of Borrower's mail to an address  designated by Lender,
to  receive  and open all mail  addressed  to  Borrower  and to retain  all mail
relating to the Collateral  and forward all other mail to Borrower;  (d) to send
requests for verification of Accounts;  (e) to execute UCC Financing Statements;
and (f) to do all things necessary to carry out this Agreement.  The appointment
of Lender as Borrower's  attorney and each and every one of Lender's  rights and
powers,  being  coupled  with  an  interest,  are  irrevocable  as  long  as any
Obligations are outstanding.  Lender agrees not to exercise the power granted in
clause  11.2(b) prior to the occurrence of an Event of Default and agrees not to
exercise the power granted in clause 11.2(d) prior to  notification  of Borrower
of its intent to do so, but such  limitations do not limit the  effectiveness of
such power of  attorney at any time.  Any person  dealing  with Lender  shall be
entitled to rely  conclusively  on any written or oral  statement of Lender that
this power of attorney is in effect.  Lender may also use Borrower's  stationery
in  connection  with  exercising  its rights and  remedies  and  performing  the
Obligations of Borrower.

Section 11.3. Expenses Secured. All expenses,  including attorney fees, incurred
by Lender in the exercise of its rights and remedies provided in this Agreement,
in the other Loan  Documents  or by law shall be payable by  Borrower to Lender,
shall be part of the Obligations, and shall be secured by the Collateral.

Section 11.4.  Equitable Relief.  Borrower recognizes that in the event Borrower
fails to perform,  observe,  or discharge any of its  Obligations or liabilities
under this Agreement,  no remedy of law will provide  adequate relief to Lender,
and Borrower  agrees that Lender shall be entitled to  temporary  and  permanent
injunctive  relief in any such case  without  the  necessity  of proving  actual
damages.

Section 11.5.  Remedies Are Cumulative.  No remedy set forth herein is exclusive
of any  other  available  remedy  or  remedies,  but each is  cumulative  and in
addition to every other right or remedy given under this  Agreement or under any
other agreement between Lender and Borrower or now or hereafter  existing at law
or  in  equity  or by  statute.  Lender  may  pursue  its  rights  and  remedies
concurrently or in any sequence, and no exercise of one right or remedy shall be
deemed to be an election. No delay by Lender shall constitute a waiver, election
or acquiescence by it.

                                   SECTION 12

                                    INDEMNITY

Section 12.1.  General Indemnity.  Borrower shall protect,  indemnify and defend
and save harmless Lender and its directors,  officers, agents and employees from
and against any and all loss, cost,  liability (including  negligence,  tort and
strict  liability),  expense,  damage,  suits  or  demands  (including  fees and
disbursements  of  counsel)  on  account  of any suit or  proceeding  before any
Governmental  Authority which arises from the transactions  contemplated in this
Agreement or otherwise  arising in  connection  with or relating to the Loan and
any security therefor, unless such suit, claim or damages

                                              25

<PAGE>


are  caused  by the  negligence  or  intentional  malfeasance  of  Lender or its
directors,  officer, agents or employees.  Upon receiving knowledge of any suit,
claim or demand  asserted by a  third-party  that Lender  believes is covered by
this  indemnity,  Lender shall give Borrower  timely notice of the matter and an
opportunity  to defend  it, at  Borrower's  sole cost and  expense,  with  legal
counsel acceptable to Lender.  Lender may, at its option,  also require Borrower
to so defend the matter.  This  obligation on the part of Borrower shall survive
the termination of this Agreement and the repayment of the Note.

                                   SECTION 13

                                  MISCELLANEOUS

Section 13.1. Delay and Waiver. No delay or omission to exercise any right shall
impair  any such  right  or be a  waiver  thereof,  but any  such  right  may be
exercised from time to time and as often as may be deemed expedient. A waiver on
one occasion shall be limited to that particular occasion.

Section  13.2.  Complete  Agreement.  This  Agreement  and the Schedules are the
complete   agreement  of  the  parties   hereto  and   supersede   all  previous
understandings  relating to the subject  matter  hereof.  This  Agreement may be
amended only by an instrument in writing that  explicitly  states that it amends
this  Agreement  and is signed  by the party  against  whom  enforcement  of the
amendment is sought.  This  Agreement may be executed in  counterparts,  each of
which will be an original and all of which will constitute a single agreement.

Section  13.3.  Severability;  Headings.  If any part of this  Agreement  or the
application thereof to any Person or circumstance is held invalid, the remainder
of this Agreement shall not be affected thereby. The section headings herein are
included  for  convenience  only and  shall  not be  deemed to be a part of this
Agreement.

Section 13.4. Binding Effect.  This Agreement shall be binding upon and inure to
the benefit of the respective legal  representatives,  successors and assigns of
the  parties  hereto;  however,  Borrower  may not  assign  any of its rights or
delegate any of its Obligations hereunder.  Lender (and any subsequent assignee)
may  transfer  and assign  this  Agreement  and deliver  the  Collateral  to the
assignee,  who shall thereupon have all of the rights of Lender;  and Lender (or
such  subsequent  assignee  who in turn  assigns  as  aforesaid)  shall  then be
relieved and discharged of any  responsibility or liability with respect to this
Agreement and said Collateral.

Section 13.5. Notices.  Any notices under or pursuant to this Agreement shall be
deemed  duly  sent  when  delivered  in hand or when  mailed  by  registered  or
certified mail, return receipt  requested,  or when delivered by courier or when
transmitted by telex,  telecopy,  or similar  electronic medium to the following
addresses:


               


                                              26

<PAGE>


               To Borrower:         HealthCare Imaging Services, Inc.
                                    200 Schulz Drive
                                    Red Bank, New Jersey  07701
                                    Attention:  Elliott Vernon, President
                                    Telephone:  (908) 224-9292
                                    Telecopier:  (908) 224-9329

               To Lender:           DVI Business Credit Corporation
                                    4041 MacArthur Blvd., Suite 401
                                    Newport Beach, CA  92660
                                    Attention:  Cynthia J. Cohn
                                                Executive Vice President
                                    Telephone:  (714) 474-6100
                                    Telecopier:  (714) 474-6199

               Copies to:           DVI Business Credit Corporation
                                    500 Hyde Park
                                    Doylestown, PA  18901
                                    Attention:  Melvin C. Breaux, Esquire
                                                General Counsel
                                    Telephone:  (215) 230-2931
                                    Telecopier:  (215) 230-3537

Either  party may change  such  address  by sending  notice of the change to the
other party;  such change of address shall be effective only upon actual receipt
of the notice by the other party.

Section 13.6.  Governing Law.  ALL ACTS AND TRANSACTIONS HEREUNDER AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED,
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF CALIFORNIA,
WITHOUT GIVING EFFECT TO CONFLICTS OF LAW PRINCIPLES.

Section 13.7.  Waiver of Trial by Jury.  LENDER AND BORROWER HEREBY WAIVE THE
RIGHT TO TRIAL BY JURY OF ANY MATTERS ARISING OUT OF THIS AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS OR  THE RELATIONSHIP BETWEEN LENDER
AND BORROWER.

Section 13.8.  Submission to Jurisdiction.

               (a)    BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY CALIFORNIA OR FEDERAL COURT SITTING IN ORANGE
COUNTY, CALIFORNIA, OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT.  BORROWER HEREBY AGREES THAT SERVICE OF
COPIES OF SUMMONS AND COMPLAINTS AND ANY OTHER PROCESS  WHICH MAY BE
SERVED IN ANY ACTION OR PROCEEDING ARISING HEREUNDER MAY BE MADE BY


                                              27

<PAGE>


MAILING OR DELIVERING A COPY OF SUCH PROCESS BY REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, TO BORROWER AT ITS ADDRESS SET FORTH AT THE
BEGINNING OF THIS AGREEMENT.

               (b)    NOTHING IN THIS PARAGRAPH 13.8 SHALL AFFECT THE RIGHT OF
LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR AFFECT THE RIGHT OF LENDER TO BRING ANY ACTION OR PROCEEDING
AGAINST BORROWER OR ANY OF ITS PROPERTIES IN THE COURTS OF OTHER
JURISDICTIONS TO THE EXTENT OTHERWISE PERMITTED BY LAW.

               (c)    TO THE EXTENT THAT BORROWER HAS OR HEREAFTER MAY
ACQUIRE (I) ANY IMMUNITY FROM JURISDICTION OF ANY COURT OF CALIFORNIA
OR ANY FEDERAL COURT SITTING IN ORANGE COUNTY, CALIFORNIA OR FROM ANY
LEGAL PROCESS OUT OF ANY SUCH COURT (WHETHER THROUGH SERVICE OR
NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION,
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, OR (ii)
ANY OBJECTION TO THE LAYING OF THE VENUE OR OF AN INCONVENIENT FORUM
OF ANY SUIT, ACTION OR PROCEEDING, IF BROUGHT IN CALIFORNIA OR FEDERAL
COURT SITTING IN ORANGE COUNTY, CALIFORNIA UNDER PROCESS SERVED IN
ACCORDANCE WITH SUBPARAGRAPH (a) ABOVE, BORROWER HEREBY
IRREVOCABLY WAIVES SUCH IMMUNITY OR OBJECTION IN RESPECT OF ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE LOANS.

     IN WITNESS  WHEREOF,  Borrower and Lender have executed  this  Agreement by
their duly authorized officers as of the date first above written.

                                            LENDER:

                                            DVI BUSINESS CREDIT CORPORATION

                                            By:  /s/CYNTHIA J. COHN      
                                            Print Name: CYNTHIA J. COHN 
                                            Title:  EXECUTIVE VICE PRESIDENT


                                              28

<PAGE>



                                            BORROWER:

                                            HealthCare Imaging Services, Inc.
                                            Edgewater Imaging Associates, L.P.

                                            By:   HealthCare Imaging Services
                                                  of Edgewater, Inc.,
                                                   its General Partner

                                            By:    /s/ELLIOTT H. VERNON 
                                            -------------------------------
                                            By:    /s/ELLIOTT H. VERNON       

                                            Print Name: ELLIOTT H. VERNON
                                            Print Name: ELLIOTT H. VERNON
                                            Title: PRESIDENT
                                            Title: PRESIDENT

Wayne Imaging Associates, L.P.             Rittenhouse Square Imaging Assoc.,LP
By:  HealthCare Imaging Services, Inc.,    By:   HealthCare Imaging Services of
Rittouse Square its General Partner              its General Partner


By:     /s/ELLIOTT H. VERNON                By:    /s/ELLIOTT H. VERNON   
        
Print Name: ELLIOTT H. VERNON               Print Name: ELLIOTT H. VERNON       
        
Title:  PRESIDENT                           Title: PRESIDENT




                                              29
<PAGE>

                                         Schedule 1.1

                                             LIENS

[List Permitted Liens]

None, other than DVI.






                                              30
<PAGE>



                                         Schedule 4.1

                                      NAMES OF BORROWERS

[Disclose the exact names, state law under which Borrowers were organized,
prior legal names, current or prior trade names]

1)      HealthCare Imaging Services, Inc.; State of Delaware
2)      HIS Acquisitions, Inc.; State of Delaware
3)      New York MR Associates, L.P.; State of New York
4)      Edgewater Imaging Associates, L.P.; State of New Jersey
5)      Wayne Imaging Associates, L.P.; State of New Jersey
6)      Rittenhouse Square Imaging Associates, L.P.; State of Pennsylvania




                                              31
<PAGE>



                                         Schedule 4.2

                                  MERGERS AND CONSOLIDATIONS

[Disclose Mergers and Consolidations]

None



                                              32
<PAGE>



                                         Schedule 4.3

                                      PURCHASES OF ASSETS
                              OUTSIDE ORDINARY COURSE OF BUSINESS

[Disclose all assets purchased outside of the ordinary course of business.]

None



                                              33
<PAGE>



                                         Schedule 6.1

                                           CONTRACTS

[List all material Contracts.]

1) Consulting  Services  Agreement by and between  HealthCare  Imaging services,
Inc. and Monmouth Diagnostic Imaging, P.A.

2) Consulting  Services  Agreement by and between  HealthCare  Imaging Services,
Inc. (successor to New York MR Associates) and Kings Medical Diagnostic Imaging,
P.A.

3)  Consulting  Services  Agreement by and between  Jatin  Gajarawala,  M.D. and
Arnold  Olefson,  M.D. or their  designee,  Wayne MRI,  P.A.  and Wayne  Imaging
Associates, L.P.

4) Consulting  Services  Agreement by and between Edgewater Imaging  Associates,
L.P. and Edgewater Diagnostic Imaging, P.A.

5) Excess Capacity License Agreement by and between HealthCare Imaging Services,
Inc. and Alex Tsitsuashvili

6) Excess Capacity License Agreement by and between HealthCare Imaging Services,
Inc. and Core Health, Inc.




                                              34
<PAGE>



                                         Schedule 8.6

                                  LITIGATION AND PROCEEDINGS

[List outstanding  judgments  against Borrower or any of its assets,  actions or
proceedings pending by or against Borrower, other threatened or imminent actions
against Borrower and governmental investigations.]

  None



                                              35
<PAGE>



                                         Schedule 9.12

                                    PERMITTED DISTRIBUTIONS

1) Pursuant to the Wayne Imaging Associates, L.P. Limited Partnership Agreement,
the limited partners receive a minority interest distribution.

2) Pursuant  to the  Restructured  Limited  Partnership  Agreement,  the limited
partners receive a minority interest distribution.


                                              36
<PAGE>


  EXHIBIT A

                                       Borrowing Base Report






                                               37
<PAGE>


                                            EXHIBIT 5.5

                                      Borrowing Base Report
                                    Compliance Certification


In connection with the Borrowing Base report dated the date hereof  delivered by
the Borrower  ("Borrower")  pursuant to that certain Loan and Security Agreement
by and among the Borrower and DVI Business Credit  Corporation,  the undersigned
hereby certifies as follows:

1) The  Borrower  has  complied  and is in  compliance  with  all of the  terms,
covenants and conditions of the Loan and Security Agreement;

2) No Default or Event of Default exists under the Loan and Security Agreement;

3) The  representations,  warranties and covenants contained in Section 8 of the
Loan and Security Agreement are true as of the date hereof.

Capitalized  terms used herein not otherwise  defined shall have the  respective
meanings ascribed thereto in the Revolving Loan and Security Agreement.


     IN WITNESS WHEREOF,  the undersigned has caused this Certificate to be duly
executed and delivered as of the 26th day of December, 1996.

HealthCare Imaging Services, Inc.           Edgewater Imaging Associates, L.P.
                                             By:   HealthCare Imaging
                                                   Services of Edgewater, Inc.,
                                                         its General Partner

By:     /s/ELLIOTT H. VERNON                By:    /s/ELLIOTT H. VERNON         
Print Name: ELLIOTT H. VERNON               Print Name: ELLIOTT H. VERNON
Title:  PRESIDENT                           Title: PRESIDENT   

Wayne Imaging Associates, L.P.           Rittenhouse Square Imaging Assoc., L.P.
By: HealthCare Imaging Services, Inc.,   By:   HealthCare Imaging Services of
        its General Partner                    Rittenhouse Square
                                               its General Partner


By:     /s/ELLIOTT H. VERNON             By:    /s/ELLIOTT H. VERNON 
Print Name: ELLIOTT H. VERNON            Print Name: ELLIOTT H. VERNON 
Title:  PRESIDENT                        Title: PRESIDENT







                                                1

<PAGE>


                                                                  EXHIBIT 2.02

                                     SECURED PROMISSORY NOTE

                                     Dated December 26, 1996


FOR VALUE RECEIVED,  the undersigned  (collectively  and  individually  "Maker")
jointly and severally  hereby promise to pay to DVI Business Credit  Corporation
or its assignee  (the  "Holder") or order,  the principal sum of Two Million and
00/100  ($2,000,000.00)  or such  amount  thereof  as may be  from  time to time
advanced  hereunder,  pursuant to the terms of that  certain  Loan and  Security
Agreement  dated  as of the date  hereof  between  Holder  as  Lender,  Maker as
Borrower (the  "Agreement"),  with interest on the unpaid principal balance from
time  to  time  outstanding  until  paid at the  fluctuating  rate  of  interest
announced publicly by Bank of America, NT&SA in San Francisco,  California, from
time to time as its prime rate plus three  percent  (3%) per annum,  computed on
the basis of a 360-day year and actual days elapsed,  until paid. Interest shall
be payable on the first of each month  this Note is  outstanding  in  accordance
with the terms of the Agreement,  with all unpaid principal and interest due and
payable in full on the second anniversary of the date hereof.

If any part of the  interest  due on this Note is not paid when due, it shall be
added to the principal  amount of this Note and thereafter  bear interest at the
rate provided above. If the specified interest rate shall at any time exceed the
maximum  allowed by law, then the  applicable  interest rate shall be reduced to
the maximum allowed by law.

1) This Note shall be subject to prepayment or redemption in whole or in part at
any  time  without  penalty  or  premium.  Notwithstanding  the  foregoing,  the
Agreement may not be terminated,  and will not be terminated by any  prepayment,
without payment of the  termination fee required  pursuant to Section 2.7 of the
Agreement.

2) Principal and interest  shall be payable to Holder at 4041  MacArthur  Blvd.,
Suite 401,  Newport Beach, CA 92660, or such other place as the Holder may, from
time to time in writing, appoint.

3) This Note is made  pursuant  to, and secured by the  Agreement.  This Note is
also  secured  by any  Security  Documents  referred  to in the  Agreement.  The
Agreement and the Security  Documents create a lien on and security interest in,
the personal property  described therein  ("Collateral").  The Agreement and the
Security  Documents shall  hereinafter be collectively  referred to as the "Loan
and Security  Documents" and are hereby  incorporated by reference in and made a
part of this Note.

4) The  occurrence  of any Event of Default under the  Agreement  shall,  at the
election of the Holder,  make the entire unpaid balance of the principal  amount
of this Note and accrued interest  immediately due and payable without notice of
default,  presentment or demand for payment,  protest or notice of nonpayment or
dishonor, or other notices or demands of any kind or character.




                                                2
<PAGE>


5) Failure of the Holder to exercise the  acceleration  option of paragraph 4 of
this Note on the  occurrence of any of the events  enumerated  therein shall not
constitute  waiver  of the  right to  exercise  such  option  on the  subsequent
occurrence of any of the events enumerated therein.

6) Principal and interest  shall be payable in lawful money of the United States
of America which shall be legal tender in payment of all debts and dues,  public
and  private,  at the time of  payment.  Maker  waives  presentment,  demand for
payment,  notice of  nonpayment,  protest and notice of  protest,  and all other
notices and demands in  connection  with the deliver,  acceptance,  performance,
default or enforcement of this Note.  Maker consents to any and all  assignments
of this Note,  extensions  of time,  renewals  and  waivers  that may be made or
granted by the Holder. Maker expressly agrees that such assignments,  extensions
of time,  renewals or waivers shall not affect Maker's  liability.  Maker agrees
that Holder may, without notice to Maker and without  affecting the liability of
Maker,  accept  additional  or  substitute  security for this Note,  release any
security or any party liable for this Note or extend or renew this Note.

7) If Maker shall fail to make any payment of interest or  principal,  including
the payment due upon maturity, when the same is due and payable and such failure
shall continue for five (5) business days after nonpayment, a late charge by way
of damages shall be immediately due and payable.  Maker  recognizes that default
by Maker in making the payments herein agreed to be paid when due will result in
the Holder incurring  additional  expenses,  in loss to the Holder of the use of
the money due and in frustration to the Holder in meeting its other commitments.
Maker  agrees  that,  if for any reason  Maker fails to pay any amount due under
this Note when due,  the Holder  shall be entitled to damages for the  detriment
caused thereby,  but that it is extremely difficult and impractical to ascertain
the extent of such  damages.  Maker  therefore  agrees  that a sum equal to five
cents ($.05) for each one dollar  ($1.00) of each payment  which is not received
within  five  (5)  business  days  after  the  date it is due and  payable  is a
reasonable estimate of the said damages to the Holder, which sum Maker agrees to
pay on demand.

8) If action be  instituted  on this Note  (including  without  limitation,  any
proceedings for collection  hereof in any bankruptcy or probate matter or case),
or if  proceedings  are  commenced  on or under  any of the  Loan  and  Security
Documents,  Maker  promises  to pay the  Holder  all  costs  of  collection  and
enforcement including, without limitation, reasonable attorneys' fees.

9) Any and all notices or other communications or payments required or permitted
to be given  hereunder  shall be effective  when received or refused if given or
rendered in writing, in the manner provided in the Agreement.

10) This Note shall inure to the benefit of the Holder's successors and assigns.
References  to the  "Holder"  shall be deemed to refer to the  holder(s) of this
Note at the time such reference becomes relevant.

11) If any term,  provision,  covenant,  or  condition of this Note is held by a
court of competent jurisdiction to be invalid, void, or unenforceable,  the rest
of this Note  shall  remain  in full  force and  effect  to the  greater  extent
permitted by law and shall in no other way be affected, impaired or invalidated.





                                                3
<PAGE>


12) Nothing  contained  herein or in the Loan and  Security  Documents  shall be
deemed  to  prevent  recourse  to and  the  enforcement  against  Maker  and the
Collateral of all liabilities, obligations and undertakings contained herein and
in the Loan and Security Documents.

13)     THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF
THE STATE OF CALIFORNIA AND MAKER AGREES TO SUBMIT TO THE JURISDICTION
OF THE STATE AND/OR FEDERAL COURTS IN THE STATE OF CALIFORNIA.

MAKER:

HealthCare Imaging Services, Inc.       Edgewater Imaging Associates, L.P.
                                        By: HealthCare Imaging Services of 
                                            Edgewater, Inc. its General Partner

By:     /s/ELLIOTT H. VERNON            By:    /s/ELLIOTT H. VERNON
Print Name: ELLIOTT H. VERNON           Print Name: ELLIOTT H. VERNON       
Title:  PRESIDENT                       Title: PRESIDENT


Wayne Imaging Associates, L.P.          Rittenhouse Square Imaging Assoc., L.P.
By: HealthCare Imaging Services, Inc.,  By:   HealthCare Imaging Services of
        its General Partner                   Rittenhouse Square
                                              its General Partner

By:     /s/ELLIOTT H. VERNON            By:    /s/ELLIOTT H. VERNON
Print Name: ELLIOTT H. VERNON           Print Name: ELLIOTT H. VERNON       
Title: PRESIDENT                        Title: PRESIDENT  




                                                4
<PAGE>


                                         AMENDMENT NO. 1
                                               TO
                            LOAN AND SECURITY AGREEMENT ("AGREEMENT")
                                     DATED DECEMBER 26, 1996
                                             BETWEEN
                                HEALTHCARE IMAGING SERVICES, INC.
                               EDGEWATER IMAGING ASSOCIATES, L.P.
                                 WAYNE IMAGING ASSOCIATES, L.P.
                           RITTENHOUSE SQUARE IMAGING ASSOCIATES, L.P.
                                (COLLECTIVELY HEREIN "BORROWER")
                                               AND
                           DVI BUSINESS CREDIT CORPORATION ("LENDER")

FOR  VALUABLE  CONSIDERATION,  the receipt and  sufficiency  of which are hereby
acknowledged, the parties hereto agree to amend the Agreement as follows:

1) Section  1(l)  "Eligible  Accounts"  shall be  amended  and  replaced  in its
entirety as follows:

Eligible  Accounts shall mean  Borrower's  accounts  receivable  from commercial
insurance,  Medicare,  Medicaid,  managed care providers,  workers' compensation
authorized, which have been due and payable for one hundred fifty (150) or fewer
days from the date of  service,  and  worker's  compensation  lien and  personal
injury  claims,  which have been due and payable for one hundred eighty (180) or
fewer  days from the date of  service,  and  earned  but  unbilled  charges  for
no-fault accounts up to ninety (90) days from the date of service  (collectively
referred to as "Retail Accounts").

Any  provision in Amendment No. 1  ("Amendment")  hereof that may be contrary to
any provision of the Agreement shall prevail and override the Agreement.  Except
as expressly set forth herein,  all other  provisions of this Amendment shall be
interpreted in light of the provisions of the Agreement. Both parties warrant to
each other that this  Amendment  has been  authorized  and duly  executed and is
binding on both parties hereto as of 31st day of January, 1997.

                                               LENDER:

                                               DVI Business Credit Corporation
                                               By:  /s/ ANTHONY J. TUREK  
                                               Name:  ANTHONY J. TUREK    
                                               Title:  MANAGING DIRECTOR 

                                            BORROWER:
HealthCare Imaging Services, Inc.           Edgewater Imaging Assoc., L.P.
                                            By: HealthCare Imaging Serv. of
                                            Edgewater, Inc., its General Partner
By:     /s/ELLIOTT H. VERNON                By:    /s/ELLIOTT H. VERNON
-----------------------------                   ----------------------------




                                                5
<PAGE>

Name: ELLIOTT H. VERNON                     Name: ELLIOTT H. VERNON
Title:  PRESIDENT                                  Title: PRESIDENT             

Wayne Imaging Associates, L.P.           Rittenhouse Square Imaging Assoc., L.P.
By:  HealthCare Imaging Services, Inc.   By:  HealthCare Imaging Services of
        its General Partner                   Rittenhouse Square, its Gen. Part.

By:     /s/ELLIOTT H. VERNON             By:    /s/ELLIOTT H. VERNON
Name: ELLIOTT H. VERNON                  Name: ELLIOTT H. VERNON
Title:  PRESIDENT                        Title: PRESIDENT             





                                                6

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