EXHIBIT 10.42


                              EMPLOYMENT AGREEMENT

           THIS EMPLOYMENT AGREEMENT (the "Agreement") entered into as of this
15th day of October 1996, between US Diagnostic Inc. (the "Company"), and Arthur
Quillo (the "Executive").

           WHEREAS, the Company desires to ensure the availability to the
Company of the Executive's services, and the Executive is willing to enter into
such employment and render such services, all upon and subject to the terms and
conditions contained in this Agreement;

           NOW, THEREFORE, in consideration of the premises and the mutual
covenants set forth in this Agreement, and intending to be legally bound, the
Company and the Executive agree as follows:

           1. TERM OF EMPLOYMENT.

           (a) TERM. The Company hereby to employ the Executive, and the
Executive hereby accepts such continued employment with the Company, for a
period commencing on November 15, 1996 or such other date as mutually agreed and
ending three years from the date thereof (the "Term") as Executive Vice
President, Midwest/South Central Region.

           (b) CONTINUING EFFECT. Notwithstanding any termination of this
Agreement at the end of the Term or otherwise, the provisions of Sections 6 and
7 shall remain in full force and effect and the provisions of Sections 6(a),
6(c) and 7 shall be binding upon the legal representatives, successors and
assigns of the Executive, except as otherwise provided in this Agreement.

           2. DUTIES.

           (a) GENERAL DUTIES. The Executive shall serve as Executive Vice
President of the Company in charge of the "South Central" and "Midwest Region"
with duties and responsibilities that are customary for such executives. The
Executive will use his best efforts to perform his duties and discharge his
responsibilities pursuant to this Agreement competently, carefully and
faithfully. The Executive shall be appointed to the management committee
composed of other senior executives of the Company.

           (b) DEVOTION OF TIME. The Executive will devote substantially full
time during normal business hours (exclusive of periods of sickness and
disability and of such normal holiday and vacation periods as have been
established by the Company) to the affairs of the Company. It is expressly
understood that the Executive will not enter the employ of or serve as a
consultant to, or in any way perform any services with or without compensation
to, any other persons, business or organization without the prior consent of the
board of directors of the Company; provided, that the Executive shall be
permitted to devote a limited amount of his time, without compensation, to
charitable or similar organizations.

           (c) MEDICAL OPPORTUNITIES. Executive agrees to present to the Company
all potential opportunities for acquisitions, joint ventures and similar
transactions in the medical or healthcare field. Executive may pursue such
opportunities if declined by the Company.

           3. COMPENSATION AND EXPENSES.

           (a) SALARY. For the services of the Executive to be rendered under
this Agreement, the 

                                      -1-
<PAGE>



Company shall pay him an annual base salary of $125,000 with annual increments 
of not less than 5% annually for a Term of three years. In addition, Executive
will be eligible for a bonus of up to 40% of his based salary on an annual 
basis. For the first twelve months of his employment, Executive will be 
guaranteed a minimum bonus of $25,000, which will be paid in the same intervals
as his base salary

           (b) BONUS. The Executive bonus will be based on two components. The
first component will be based on achieving the budgeted net operation margin for
the Southesast region. The bonus for this category will be 10% of Executive's
base salary. In addition, Executive will be entitled to 10% of the excess Net
Operating Margin over the budgeted base amount, not to exceed 40% of his base
salary. The second component will be based on keeping the accounts receivable
for his region at a minimum of 75% of the total A/R under ninety days. The bonus
for this category will be 10% of Executive's base salary and such combination of
both components shall not exceed 40% of the base salary.

           (c) STOCK OPTIONS. Executive will be granted 50,000 stock options to
be issued at fair market value. These options shall vest over the term of
Executive's contract and will automatically vest on any change of control of the
Company.

           (d) EXPENSES. In addition to any compensation received pursuant to
Section 3(a) and (b), the Company will reimburse Executive for all out-of-pocket
moving expenses, including, but not limited to commissions on the sale of
Executive's house, moving and packing expenses, as well as any related house
hunting trips, etc.

           (e) TEMPORARY LIVING. The Company will provide Executive with
temporary living accommodations in Houston, Texas to facilitate Executive's
travel to and from California until the Company relocates Executive to the
Midwest Region.

           4. BENEFITS.

           (a) VACATION. For each 12-month period during the Term, the Executive
will be entitled to three (3) weeks of vacation without loss of compensation or
other benefits to which he is entitled under this Agreement, to be taken at such
times as the Executive may select and the affairs of the Company may permit.

           (b) EMPLOYEE BENEFIT PROGRAMS. During the Term, the Executive will be
entitled to health insurance in accordance with the Company's existing benefit
package for senior management. This will include company paid premiums for
employment coverage as well as the right to participate in the Company 401K
plan, etc.

           (c) AUTOMOBILE. The Company shall provide the Executive with a $750
automobile car allowance which will be paid to Executive monthly.

           5. TERMINATION.

           (a) TERMINATION FOR CAUSE. The Company may terminate the Executive's
employment pursuant to the terms of this Agreement at any time for Cause by
giving written notice of termination. Such termination will become effective
upon the giving of such notice, except that termination based 

                                      -2-
<PAGE>



upon clause (iii) below shall not become effective unless the Executive shall
fail to correct such breach within three months of receipt of written notice. 
At the conclusion of such three month period, this alleged breach shall be 
deemed to have been cured unless written notice to the contrary is given. Upon
any such termination for cause, the Executive shall have no right to 
compensation, bonus or reimbursement under Section 3, or to participate in any 
employee benefit programs under Section 4 for any period subsequent to the 
effective date of termination. "Cause" shall mean: (i) the Executive is 
convicted of a felony which is related to the Executive's employment or the 
business of the Company; (ii) the Executive, in carrying out his duties 
hereunder, has been found in a civil action to have committed gross negligence,
willful gross misconduct, misappropriated Company funds or otherwise defrauded 
the Company, in any case, resulting in material harm to the Company; and (iii)
the Executive materially breaches any provision of Sections 2, 6 or 7.

           (b) DEATH OR DISABILITY. Except for the Company's obligations
contained in this Section 5, this Agreement and the obligations of the Company
hereunder will terminate upon the death or disability of the Executive. For
purposes of this Section 5(b), "disability" shall mean that for a period of six
months in any 12-month period the Executive is incapable of substantially
fulfilling the duties set forth in Section 2 because of physical, mental or
emotional incapacity resulting from injury, sickness or disease.

           Upon termination by death or disability, the Company will pay the
Executive or his legal representative, as the case may be: (i) his annual salary
at such time through the date of such termination of employment and (ii) the
Executive's pro-rata bonus due under Section 3(b) of this Agreement. Such sums
shall be paid upon the same terms and conditions as if this Agreement were in
fully force and effect.

           (c) SPECIAL TERMINATION. In the event that (i) the Company materially
breaches this Agreement or the performance of its duties and obligations
hereunder; or (ii) any entity or person not now an executive officer of the
Company becomes either individually or as part of a group the beneficial owner
of 40% or more of the Company's common stock; or (iii) the merger,
consolidation, reorganization or liquidation of the Company (a "Change in
Control"), the Executive, by written notice to the Company, may elect to deem
the Executive's employment hereunder to have been terminated by the Company
without cause, in which event the Executive shall receive lump sum compensation,
bonuses payable, reimbursement and benefits payable pursuant to Section 3 and 4
herein equal to two years, unless if the remaining term of the Agreement is less
than one year, the Executive shall receive lump sum compensation, bonuses
payable, reimbursement and benefits payable pursuant to Section 3 and 4 herein
equal to one year. Alternatively, in such event, the Executive, by written
notice to the Company, may elect to refuse all further obligations of the
Company under Section 3 and Section 4 and to release the Company with respect
thereto, in which event the Company shall release the Executive from the
provisions of Section 6.

           6. NONCOMPETITION AGREEMENT.

           (a) COMPETITION WITH THE COMPANY. Except as provided for in Sections
2(b) and 6(b) hereof, until termination of his employment and for a period of 12
months commencing on the date of termination, the Executive, directly or
indirectly, in association with or as a stockholder, director, officer,
consultant, employee, partner, joint venturer, member or otherwise of or through
any person, firm, corporation, partnership, association or other entity, will
not compete with the Company or any of its affiliates in the offer, sale or
marketing of radiology products or services, including radiology practice

                                      -3-
<PAGE>



management services, that are competitive with the products or services offered
by the Company as of the date of this Agreement, or any other business engaged
in by the Company after the date of this Agreement in which Executive is
actively involved on behalf of the Company, within any metropolitan area in the
United States or elsewhere in which the Company is then engaged in the offer and
sale of competitive products or services except as provided in (b) below.
Additionally, the foregoing shall not prevent Executive from accepting
employment with an enterprise engaged in two or more lines of business, one of
which is the same or similar to the Company's business (the "Prohibited
Business") if Executive's employment is totally unrelated to the Prohibited
Business; provided, further, the foregoing shall not prohibit Executive from
owning up to 5% of the securities of any publicly-traded enterprise provided
Executive is not an employee, director, officer, consultant to such enterprise
or otherwise reimbursed for services rendered to such enterprise.

           (b) SOLICITATION OF CUSTOMERS. During the periods in which the
provisions of Section 6(a) shall be in effect, the Executive, directly or
indirectly, will not seek Prohibited Business from any Customer (as defined
below) on behalf of any enterprise or business other than the Company, refer
Prohibited Business from any Customer to any enterprise or business other than
the Company or receive commissions based on sales or otherwise relating to the
Prohibited Business from any Customer, or any enterprise or business other than
the Company. For purposes of this Section 6(b), the term "Customer" means any
person, firm, corporation, partnership, association or other entity to which the
Company or any of its affiliates sold or provided goods or services during the
12-month period prior to the time at which any determination is required to be
made as to whether any such person, firm, corporation, partnership, association
or other entity is a Customer.

           (c) NO PAYMENT. The Executive acknowledges and agrees that no
separate or additional payment will be required to be made to him in
consideration of his undertakings in this Section 6.

           (d) RELEASE. The provisions of this Section 6 shall not apply if this
Agreement is terminated by the Company without cause or by Executive upon a
material breach by the Company.

           7. NONDISCLOSURE OF CONFIDENTIAL INFORMATION. The Executive
acknowledges that during his employment he will learn and will have access to
confidential information regarding the Company and its affiliates, including
without limitation (i) confidential or secret plans, programs, documents,
agreements or other material relating to the business, services or activities of
the Company and its affiliates and (ii) trade secrets, market reports, customer
investigations, customer lists and other similar information that is proprietary
information of the Company or its affiliates (collectively referred to as
"Confidential Information"). All records, files, materials and Confidential
Information excluding personal items, obtained by the Executive in the course of
his employment with the Company are confidential and proprietary and shall
remain the exclusive property of the Company or its affiliates, as the case may
be. The Executive will not, except in connection with and as required by his
performance of his duties under this Agreement, for any reason use for his own
benefit or the benefit of any person or entity with which he may be associated
or disclose any such Confidential Information to any person, firm, corporation,
association or other entity for any reason or purpose whatsoever without the
prior written consent of the board of directors of the Company, unless such
Confidential Information previously shall have become public knowledge through
no action by or omission of the Executive.

                                      -4-
<PAGE>



           8. ASSIGNABILITY. The rights and obligations of the Company under
this Agreement shall inure to the benefit of and be binding upon the successors
or assigns of the Company, provided that such successor or assign shall acquire
all or substantially all of the assets and business of the Company. The
Executive's obligations hereunder may not be assigned or alienated and any
attempt to do so by the Executive will be void.

           9. SEVERABILITY.

           (a) The Executive expressly agrees that the character, duration and
geographical scope of the provisions set forth in this Agreement are reasonable
in light of the circumstances as they exist on the date hereof. Should a
decision, however, be made at a later date by an arbitration proceeding that the
character, duration or geographical scope of such provisions is unreasonable,
then it is the intention and the agreement of the Executive and the Company that
this Agreement shall be construed by the tribunal in such a manner as to impose
only those restrictions on the Executive's conduct that are reasonable in the
light of the circumstances and as are necessary to assure to the Company the
benefits of this Agreement. If in an arbitration proceeding, a tribunal shall
refuse to enforce all of the separate covenants deemed included herein because
taken together they are more extensive than necessary to assure to the Company
the intended benefits of this Agreement, it is expressly understood and agreed
by the parties hereto that the provisions of this Agreement that, if eliminated,
would permit the remaining separate provisions to be enforced in such proceeding
shall be deemed eliminated, for the purposes of such proceeding, from this
Agreement.

           (b) If any provision of this Agreement otherwise is deemed to be
invalid or unenforceable or is prohibited by the laws of the state or
jurisdiction where it is to be performed, this Agreement shall be considered
divisible as to such provision and such provision shall be inoperative in such
state or jurisdiction and shall not be part of the consideration moving from
either of the parties to the other. The remaining provisions of this Agreement
shall be valid and binding and of like effect as though such provision were not
included .

           10. NOTICES AND ADDRESSES. All notices, offers, acceptance and any
other acts under this Agreement (except payment) shall be in writing, and shall
be sufficiently given if delivered to the addressees in person, by Federal
Express or similar receipted delivery, by facsimile delivery or, if mailed,
postage prepaid, by certified mail, return receipt requested, as follows:

           To the Company:          US  Diagnostic Inc.
                                    777 S. Flagler Drive
                                    West Palm Beach, Florida 33401
                                    Attention: Joseph A. Paul

           To the Executive:        35 Woodhaven Drive
                                    Laguna Niguel, CA 92677
                                    Attention:  Arthur Quillo

or to such other address as either of them, by notice to the other may designate
from time to time. The transmission confirmation receipt from the sender's
facsimile machine shall be conclusive evidence of successful facsimile delivery.
Time shall be counted to, or from, as the case may be, the delivery in 

                                      -5-
<PAGE>



person or by mailing.

           11. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. The execution of this
Agreement may be by actual or facsimile signature.

           12. ARBITRATION. Any controversy, dispute or claim arising out of or
relating to this Agreement, or its interpretation, application, implementation,
breach or enforcement which the parties are unable to resolve by mutual
agreement, shall be settled by submission by either party of the controversy,
claim or dispute to binding arbitration in West Palm Beach, Florida (unless the
parties agree in writing to a different location), before a single arbitrator in
accordance with the rules of the American Arbitration Association then in
effect. In any such arbitration proceeding the parties agree to provide all
discovery deemed necessary by the arbitrator. The decision and award made by the
arbitrator shall be final, binding and conclusive on all parties hereto for all
purposes, and judgment may be entered thereon in any court having jurisdiction
thereof.

           13. ATTORNEY'S FEES. In the event that there is any controversy or
claim arising out of or relating to this Agreement, or to the interpretation,
breach or enforcement thereof, and any action or proceeding including that in
arbitration as provided for in Section 12 of this Agreement, is commenced to
enforce the provisions of this Agreement, the prevailing party shall be entitled
to an award by the court or arbitrator, as appropriate, of reasonable attorney's
fee, costs and expenses.

           14. GOVERNING LAW. This Agreement and any dispute, disagreement, or
issue of construction or interpretation arising hereunder whether relating to
its execution, its validity, the obligations provided therein or performance
shall be governed or interpreted according to the internal laws of the State of
Florida without regard to choice of law considerations.

           15. ENTIRE AGREEMENT. This Agreement constitutes the entire Agreement
between the parties and supersedes all prior oral and written agreements between
the parties hereto with respect to the subject matter hereof. Neither this
Agreement nor any provision hereof may be changed, waived, discharged or
terminated orally, except by a statement in writing signed by the party or
parties against which enforcement or the change, waiver discharge or termination
is sought.

           16. SECTION AND PARAGRAPH HEADINGS. The section and paragraph
headings in this Agreement are for reference purposes only and shall not affect
the meaning or interpretation of this Agreement.

                                      -6-
<PAGE>



           IN WITNESS WHEREOF, the Company and the Executive have executed this
Agreement as of the date and year first above written.

                                        US DIAGNOSTIC. INC.


                                        By:  
                                             --------------------------
                                             Joseph A. Paul, President


                                             --------------------------
                                                    Arthur Quillo



                                      -7-