SECURITY AGREEMENT


         AGREEMENT, dated as of December 31, 1996 between NETWORK IMAGING CORP.,
INC., a corporation  duly  organized and validly  existing under the laws of the
State of Delaware ("Debtor"), and FRED KASSNER (the "Secured Party").


                              W I T N E S S E T H:


         In  consideration  of the mutual  covenants  and  agreements  contained
herein, the parties hereto hereby agree as follows:


         1.  Definitions.  All terms  used herein,  unless  otherwise  defined,
shall have the meanings ascribed to them in the Loan Agreement, dated as of Dec.
31, 1996 (the "Loan  Agreement"),  between the Debtor,  on the one hand, and the
Secured  Party,  on the other,  providing  for loans by the Secured Party to the
Debtor in the principal amount of up to $5,000,000.

                  "Liabilities"   shall   mean  all   Indebtedness   and   other
liabilities and obligations,  whether now existing or hereafter arising,  of the
Debtor to the Secured Party  pursuant to the Loan Agreement  including,  without
limitation,  increases in the amounts of or  refinancings of or other changes to
the principal amount thereof and any other loans or other  indebtedness that may
be created by any amendment, supplement or other modification to, or restatement
of the Loan Agreement.


         2. Grant of Security Interest.


                  (a) As security for the prompt  payment and  performance  when
due  (whether  at  stated  maturity,   by  acceleration  or  otherwise)  of  the
Liabilities,  Debtor hereby  grants to the Secured Party a security  interest in
the Collateral, whether now owned or hereafter acquired by Debtor.

                  (b) As used  herein,  the  term  "Collateral"  shall  mean all
accounts receivable of Debtor, now or hereafter  existing,  arising out of or in
connection  with the sale or  lease of  goods,  the  rendering  of  services  or
otherwise.


         3. Covenants of the Debtors.


                  (a) Upon  request of the  Secured  Party,  Debtor  will,  upon
reasonable notice,  permit  representatives of the Secured Party,  during normal
business  hours,  to inspect its  properties  included in the  Collateral and to
inspect  and make  abstracts  from  its  books  and  records  pertaining  to the
Collateral.


                  (b) All policies of insurance  maintained by Debtor on or with
respect to the  Collateral  shall,  unless  otherwise  specified  by the Secured
Party,  be written for the  benefit of the Debtor and the  Secured  Party (as an
additional named insured) as their interests may appear,  and all such policies,
or  certificates  evidencing the same,  shall be furnished to the Secured Party.

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The Debtor will cause the carriers of its  insurance to issue loss payee clauses
in favor of the Secured  Party with respect to such  insurance and to cause such
carriers to give not less than 10 days' prior notice to the Secured Party of the
cancellation or non-renewal of any of such policies.


                  (c) Debtor will not, without the prior  written consent of the
Secured Party:


                  (1) Permit any of the Collateral to be levied upon under legal
         process or to fall under any other Lien,  other than  Permitted  Liens,
         unless promptly discharged; or


                  (2) Cause, directly or indirectly, anything to be done outside
         of the  ordinary  course of business of such Debtor  which,  or fail to
         take any action  outside of the  ordinary  course of  business  of such
         Debtor which  failure,  may impair the value of the  Collateral  in any
         material  respect  (other  than  normal wear and tear) or the liens and
         security interests herein granted and/or intended to be granted hereby;
         or


                  (3) Sell,  lease,  transfer,  assign  (including  by virtue of
         assignments by operation of law), mortgage, pledge or otherwise dispose
         of or  encumber  any of  the  Collateral  except  for  dispositions  or
         encumbrances  in the ordinary  course of business,  or permit any party
         other than the Secured Party and parties  holding liens permitted under
         (1) above to perfect any security interest in such Collateral.


                  (d) Debtor will  maintain  its books and records and its chief
place of business  only at the  location  specified in Section 6 hereof and will
not change the location of its books and records or its name,  or the name under
which it conducts its business,  or either of its addresses  without  giving the
Secured Party 30 days' prior written notice thereof.


                  (e) If any Event of Default  shall have  occurred and shall be
continuing,  Debtor will keep and stamp or otherwise  mark any and all books and
records  relating to the  Collateral  in such  manner as the  Secured  Party may
reasonably require.


         4. Further Assurances; etc.


                  (a) If any Event of Default  shall have  occurred and shall be
continuing,  Debtor  will,  from time to time and at its own  expense,  promptly
execute,  acknowledge,  witness and deliver and file and/or record, or cause the
execution,  acknowledgment,  witnessing  and  delivery  and  the  filing  and/or
recordation  of, such specific and further  assignments  of Collateral  and such
other documents or  instruments,  and shall take or cause to be taken such other
actions,  as the Secured Party may reasonably request for the perfection against
Debtor and all third parties whomsoever of the security interests created hereby
in the Collateral or for the continuation and protection  thereof,  and promptly
give to the Secured  Party  evidence  satisfactory  to the Secured Party of such
action.  Without limiting the generality of the foregoing,  Debtor promptly upon
the  execution and delivery of this  Agreement,  and at any time or from time to
time  thereafter  upon the  request of the  Secured  Party,  shall,  at Debtor's
expense,   execute,   acknowledge,   witness  and  deliver  such  financing  and
continuation  statements  as the Secured  Party may  reasonably  request for the

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<PAGE>

purpose of perfecting, maintaining and protecting such security interests of the
Secured  Party,  and shall cause this  Agreement,  any  amendment or  supplement
hereto or thereto and each such financing and continuation statement, notice and
additional  security  agreements  to be filed or  recorded in such manner and in
such  places as may be required by  applicable  law or as the Secured  Party may
reasonably request for such purpose.  Debtor hereby authorizes the Secured Party
to effect any filing or recording which the Secured Party has requested pursuant
to this  Section  4(a)  without  the  signature  of such  Debtor,  to the extent
permitted by applicable law.  Notwithstanding  the foregoing  provisions of this
Section 4(a) or any of the other provisions of this Agreement, the Secured Party
agrees that it shall not  communicate  with any account  debtors or customers of
Debtor  in the  exercise  of the  Secured  Party's  rights  hereunder  until the
occurrence and during the continuance of an Event of Default.


                  (b) At any  time  and from  time to  time,  upon  the  written
request of the Secured  Party,  Debtor will, at Debtor's  expense,  promptly and
duly execute,  acknowledge,  witness and deliver,  or cause to be duly executed,
acknowledged,  witnessed and delivered, any and all such further instruments and
documents,  and take such further  actions,  as the Secured Party may reasonably
request, to obtain for the Secured Party the full benefits of this Agreement and
of the rights and powers herein and therein granted.


         5. Actions by the Secured Party.


                  (a) If any Event of Default  shall have  occurred and shall be
continuing,  the  Secured  Party  shall  have the power to  exchange  any of the
Collateral for other property upon any reorganization, recapitalization or other
readjustment  and in connection  therewith to deposit any of the Collateral with
any committee or  depository  upon such terms as it may  determine,  all without
notice  and  without  liability  (other  than for gross  negligence  or  willful
misconduct),  except to account for  property  actually  received by the Secured
Party.


                  (b) The Secured  Party may, at any time and from time to time,
at its option or at the request of the Secured Party,  after having given notice
of its  intention to do so to the Debtor  perform any act which is undertaken by
Debtor  to be  performed  by it  hereunder  but  which it shall  have  failed to
perform, and the Secured Party may take any other action which the Secured Party
may in its reasonable judgment deem necessary for the maintenance,  preservation
or protection of any of the Collateral or the security interests therein and the
Secured Party is hereby irrevocably  appointed  attorney-in-fact  of the Debtors
for this purpose. All moneys advanced by the Secured Party for account of Debtor
in connection with any of the foregoing,  together with interest  thereon at the
rate of interest set forth in the Loan  Agreement  from the date of such advance
to the date of the  repayment  thereof,  shall be  repaid  by the  Debtor to the
Secured Party, upon demand, and shall constitute additional  Liabilities secured
hereby.  The making of any such  advance by the  Secured  Party for account of a
Debtor  shall not,  however,  relieve  the Debtor of  liability  for any default
hereunder until the full amount of all such moneys so advanced and such interest
thereon  shall have been repaid to the Secured Party and such default shall have
otherwise been cured.


         6. Debtor Representations.


                  Debtor  represents  and warrants to the Secured Party that its

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chief  place of  business  is at the  address  set  forth  below its name on the
signature  pages hereof and that it conducts  its  business  only under the name
specified on the signature pages hereof.


         7. Power Upon Default.


                  (a) Upon the  occurrence  and  during the  continuance  of any
Event of Default,  the Secured Party shall have all the rights and remedies of a
secured  party under the UCC, or other  applicable  law,  including the power of
sale upon  notice,  and all  rights  provided  herein,  all of which  rights and
remedies shall, to the fullest extent permitted by law, be cumulative.


                  (b)      Without limiting the generality of the foregoing:


                  (1) Upon the  occurrence  and  during the  continuance  of any
Event of Default, but subject always to any mandatory requirements of applicable
law then in effect,  the Secured Party may, at its option, do any one or more or
all of the  following  acts,  as the  Secured  Party in its  sole  and  complete
discretion  may then elect and at such time or times as the Secured Party in its
complete and sole discretion may determine:


                           (a)   exercise   all  the  rights  and   remedies  in
         foreclosure  and otherwise  granted to mortgagees  and secured  parties
         under the provisions of applicable law, including,  without limitation,
         the UCC;


                           (b)   institute  legal  proceedings  for the specific
         performance  of any covenant or agreement herein undertaken by a Debtor
         or for aid  in the execution or any power or remedy herein granted;

 
                           (c)   institute  legal  proceedings to foreclose upon
         and against any of the liens and security interests created hereby;


                           (d)   institute legal proceedings for the sale, under
         the judgment or decree of any court of competent  jurisdiction, of  any
         of the Collateral;


                           (e) institute  legal  proceedings for the appointment
         of a receiver or receivers pending foreclosure hereunder or the sale of
         any  of  the  Collateral  under  the  order  of a  court  of  competent
         jurisdiction or under other legal process;


                           (f) personally, or by agents or attorneys, enter into
         and upon any premises  wherein the  Collateral  or any part thereof may
         then be  situated  and take  possession  of all or any part  thereof or
         render it unusable;  and, without being  responsible  (except for gross
         negligence or willful  misconduct) for loss or damage,  hold, store and
         keep idle, or operate,  lease or otherwise use or permit the use of the
         same or any part  thereof  for such  time  and upon  such  terms as the
         Secured Party in its complete and sole  discretion may  determine,  and
         demand,  collect and retain all hire,  earnings  and all other sums due
         and to become  due in  respect  of the same from any party  whomsoever,
         accounting  only for net earnings  arising from such use, if any, after

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<PAGE>

         charging  against  all  receipts  from the use of the same and from any
         subsequent sale thereof,  by court proceedings or pursuant to subclause
         (g) of this Section  7(b)(1) all reasonable  costs and expenses of, and
         damages or losses by reason of, such use and/or sale; or


                           (g) personally, or by agents or attorneys, enter upon
         and into any  place  wherein  the  same may then be  located,  and take
         possession of any part or all of the Collateral  owned by Debtor,  with
         or without  process of law and without  being  responsible  for loss or
         damage  (except  such  as  results  from  the  Secured   Party's  gross
         negligence  or willful  misconduct),  and sell or dispose of all or any
         part of the same, free from any and all claims of a Debtor or any other
         party  claiming  by,  through  or under a Debtor  at law,  in equity or
         otherwise,  at one or more  public or private  sales,  in such place or
         places,  at such time or times,  for cash or credit and upon such terms
         as the Secured Party may determine, with or without any previous demand
         or notice to Debtor or advertisement and demand and any right or equity
         of redemption  otherwise required by law are hereby waived by Debtor to
         the fullest  extent  permitted  by  applicable  law.  The power of sale
         hereunder shall not be exhausted by one or more sales,  and the Secured
         Party may from time to time  adjourn  any sale to be made  pursuant  to
         this Section 7.


                  (2)  If the  Secured  Party  shall  demand  possession  of the
Collateral or any part thereof pursuant hereto, Debtor will, at its own expense,
forthwith cause the Collateral owned by Debtor or any part thereof designated by
the Secured Party to be assembled  and made  available  and/or  delivered to the
Secured Party at any place reasonably designated by the Secured Party.


                  (3) In the event that any mandatory  requirement of applicable
law shall  obligate  the Secured  Party to give prior notice to Debtor of any of
the  foregoing  acts,  Debtor  agrees  that a notice  given to it in  writing by
certified  U.S.  mail,  return  receipt  requested,  at least three (3) (or such
longer  period as may be required by  applicable  law)  Business Days before the
date of any such act, at its address  specified beneath its signature hereto (or
such other address as shall have been notified to the Secured Party in writing),
with a copy by fax,  at least  three (3)  Business  Days before the date of such
act,  shall be deemed to be reasonable  notice of such act,  and,  specifically,
reasonable  notification  of the time and place of any public sale hereunder and
reasonable  notification  of the time  after  which  any  private  sale or other
intended disposition to be made hereunder is to be made.


                  (4) The Secured  Party shall apply the proceeds  from the sale
or other  disposition  of the  Collateral  pursuant  to the  provisions  of this
Section  7(b) and any other  amounts held by it as  Collateral  hereunder in the
following order:


                  FIRST,  to the  payment  of the  costs  and  expenses,  if any
         (including,   without  limitation,   reasonable  attorneys,   fees  and
         expenses), incurred by the Secured Party in preserving its interests in
         the  Collateral  or in enforcing  any remedies  granted in or realizing
         against the security of, this  Agreement  or any  disbursements  by the
         Secured Party under Section 5 hereof;


                  SECOND,  to the  payment to the  Secured  Party of accrued and
         unpaid  interest due and payable under the Loan  Agreement  (whether at

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<PAGE>

         stated maturity, by acceleration or otherwise);

                  THIRD,  to the payment to the Secured Party of the outstanding
         principal  amount due and payable under the Loan Agreement  (whether at
         stated maturity, by acceleration or otherwise);


                  FOURTH,  to the payment to  the  Secured Party  of any and all
         other Liabilities due on the date of such application;


                  FIFTH,  to  the  payment  of any  other  amounts  required  by
         applicable law (including,  without limitation,  Section 9-504(1)(c) of
         the UCC); and


                  SIXTH,  after the  payment  in full of all of the  Liabilities
         (including  those not due and  payable at the time of the  applications
         above),  to the payment to the Debtors of any  surplus  then  remaining
         from such  proceeds or otherwise  as a court of competent  jurisdiction
         may direct.


                  (5) No sale or  other  disposition  of all or any  part of the
Collateral  owned by a Debtor by the Secured Party pursuant to this Section 7(b)
shall be deemed to  relieve  such  Debtor of its  obligations  in respect of any
Liabilities except to the extent the proceeds thereof are applied to the payment
of such Liabilities.


         8. Possession until Default.  Until an Event of Default shall occur and
be continuing,  except as otherwise provided in this Agreement, Debtor will have
the right to the possession and enjoyment of the Collateral  owned by it for the
purpose of conducting the ordinary course of its business.


         9. Waiver by Debtor.  To the fullest  extent it may  lawfully so agree,
Debtor agrees that it will not at any time insist upon, claim, plead or take any
benefit  or  advantage  of  any  appraisement,   valuation,   stay,   extension,
moratorium,  redemption  or similar  law now or  hereafter  in force in order to
prevent, delay or hinder the enforcement hereof or the absolute sale of any part
of the  Collateral  or the  possession  thereof  by any  purchaser  at any  sale
pursuant  to  Section  7(b)  hereof;  and  Debtor,  for itself and all who claim
through it, so far as it or they now or  hereafter  lawfully  may do so,  hereby
waives the benefit of all such laws, and all right to have the Collateral  owned
by it marshalled upon any foreclosure  hereof,  and agrees that any court having
jurisdiction to foreclose this Agreement may order the sale of the Collateral as
an entirety.  Without  limiting the generality of the foregoing,  Debtor hereby:
(i) authorizes the Secured Party,  in its sole  discretion and without notice to
or demand upon it and without otherwise  affecting its obligations  hereunder or
in  respect  of the  Liabilities,  from  time to time to  take  and  hold  other
collateral (in addition to the Collateral) for payment of any Liabilities or any
part thereof and to accept and hold any  endorsement  or guarantee of payment of
the Liabilities or any part thereof and to release or substitute any endorser or
guarantor or any other party granting  security for or in any way obligated upon
the  Liabilities  or any part thereof and/or to modify or terminate the terms of
subordination  of any Indebtedness  subordinated to any of the Liabilities;  and
(ii)  waives and  releases  any and all right to require  the  Secured  Party to
collect any Liabilities from any specific item or items of Collateral,  from any
other  party  liable as  guarantor  or in any other  manner  in  respect  of any
Liabilities or from any other collateral.


         10.  Purchases by the Secured  Party.  At any sale  pursuant to Section

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<PAGE>

7(b) hereof, the Secured Party may to the extent permitted by applicable law bid
for and purchase the Collateral  offered for sale,  and, upon compliance in full
with the terms of such  sale,  may hold,  retain and  dispose  of such  property
without further accountability therefor to either Debtor or any other party.


         11. No  Representation,  etc. Anything herein contained to the contrary
notwithstanding,  neither the Secured Party nor any of its nominees or assignees
shall have any  obligation  or  liability  by reason of or  arising  out of this
Agreement to make any inquiry as to the nature or sufficiency  of, to present or
file any claim with  respect to, or to take any action to collect or enforce the
payment  of,  any  amounts to which it may be  entitled  at any time or times by
virtue  of this  Agreement.  The  Secured  Party  makes  no  representations  or
warranties hereunder with respect to the Collateral or any part thereof, and the
Secured  Party  shall not by virtue of this  Agreement  be  chargeable  with any
obligations  or  liabilities  of either  Debtor or any other party with  respect
thereto.  The Secured Party (if it shall have acted in good faith) shall have no
liability or obligation arising out of any claims with respect to the Collateral
settled by the Secured Party.


         12. Remedies.  Each right, power and remedy herein specifically granted
to the Secured Party or otherwise available to it shall be cumulative, and shall
be in addition to every other right, power and remedy herein  specifically given
or now or  hereafter  existing at law, in equity or  otherwise;  and each right,
power and remedy, whether specifically granted herein or otherwise existing, may
be  exercised,  at any time and from time to time as often and in such  order as
may be deemed expedient by the Secured Party in its sole and complete discretion
and the exercise or commencement of exercise of any right, power or remedy shall
not be  construed  as a waiver  of the  right to  exercise,  at the same time or
thereafter,  the same or any other right,  power or remedy. No delay or omission
by the Secured Party in exercising  any such right or power,  or in pursuing any
such remedy,  shall impair any such right, power or remedy or be construed to be
a waiver of any default on the part of either Debtor or an acquiescence therein.
No waiver by the Secured  Party of any breach or default of or by either  Debtor
hereunder  shall be deemed to be a waiver of any other or  similar,  previous or
subsequent, breach or default.


         13. Notices. All notices and other  communications  provided for herein
shall be by telex,  fax,  telegraph,  cable or in writing  and  telexed,  faxed,
telegraphed,  cabled,  mailed by registered or certified mail,  postage prepaid,
return receipt requested or delivered to the intended recipient at the telephone
number or "Address for Notices"  specified below its name on the signature pages
hereof;  or, as to any party, at such other telephone number or address as shall
be  designated by such party in a notice to the other  parties.  All notices and
other  communications  hereunder  shall be  effective  or  deemed  delivered  or
furnished  (i)  if  given  by  mail  on  the  third   Business  Day  after  such
communication  is deposited in the mail  addressed  as above  provided,  (ii) if
given by telex or fax, when such communication is transmitted to the appropriate
number  determined  as above  provided  in this  Section 13 and the  appropriate
answerback  is  received  or receipt  is  otherwise  acknowledged,  and (iii) if
delivered personally, when so delivered to the holder of the office specified as
the  office  holder  to whose  attention  communications  are to be given on the
signature pages hereof.


         14.  Amendments,  etc.  This  Agreement  may not be amended or modified
except by written agreement of the Debtors and the Secured Party, and no consent
or waiver hereunder shall be valid unless in writing and signed by the person or
persons giving such consent or waiver.


         15.  Term.  This  Security  Agreement  shall continue in full force and
effect until all of the Liabilities have been  fully and  indefeasibly  paid  in

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full, whereupon this Security Agreement shall terminate.


         16.  Miscellaneous.


                  (a) This  Agreement  shall be binding  upon and shall inure to
the benefit of the Debtor and the Secured Party and their respective  successors
and  assigns;  provided  that no Debtor may  assign  its  rights or  obligations
hereunder without the prior written consent of the Secured Party.


                  (b)  This   Agreement   may  be  executed  in  any  number  of
counterparts,  all of which taken  together  shall  constitute  one and the same
instrument  and either of the  parties  hereto may  execute  this  Agreement  by
signing any such counterpart.


                  (c) This  agreement  will be construed in accordance  with and
governed by the law of the state of  Virginia,  provided  that as to  collateral
located in any  jurisdiction  other than Virginia,  the Secured Party shall have
all the rights to which a secured party under the laws of such  jurisdiction  is
entitled.


                  (d) The section titles  contained in this  Agreement  shall be
without  substantive  meaning or content  of any kind  whatsoever  and shall not
govern the interpretation of any of the provisions of this Agreement.


                  (e) The  provisions of Sections 8.3,  8.10,  8.13, and 8.20 of
the Loan Agreement are hereby  incorporated  herein by reference as if set forth
in full herein,  except that for these purposes  references to "this  Agreement"
shall be deemed  references  to this  Agreement  and not  references to the Loan
Agreement.


         The parties hereto have caused this Agreement to be duly executed as of
the day and year first above written.


                                           NETWORK IMAGING CORPORATION


                                           By:
                                              -----------------------------   
                                              Title:  James Leto, President


                              - Address for Notices -


                             500 Huntmar Park Drive
                             Herndon, VA 20170-5100
                             Fax No.: 703-478-7523

                             Attention:

                                 with copies to:

                             Julie Bowen, Esq.
                             Network Imaging Corp.

                                      -8-
<PAGE>

                             500 Huntmar Park Drive
                             Herndon, VA 20170-5100

                             Fax No.: 703-478-7523

                             Attention:


                                              --------------------------
                                              Fred Kassner


                             - Address for Notices -


                            69 Spring Street
                            Ramsey, New Jersey 07446

                            Fax No.: (201) 934-3617


                                with copies to:

                            Susan G. Kaufman, Esq.
                            69 Spring Street
                            Ramsey, New Jersey 07446

                            Fax No.: (201) 934-3617
































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