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EXHIBIT 10.2
 
EMPLOYMENT AGREEMENT
 
THIS AGREEMENT (the “Agreement”) to be effective as of August 15, 2008 (the
“Effective Date”), between Health Discovery Corporation (the “Company”), and
Stephen Barnhill (the “Executive”).
 
INTRODUCTION

The Company and the Executive are parties to an employment agreement dated
September 15, 2003, which expires on September 15, 2008, and now desire to enter
into this Agreement to replace and supersede the existing employment agreement.
 
NOW, THEREFORE, the parties agree as follows:
 
1.    Terms and Conditions of Employment.
 
(a)           Employment.  During the Term, Company will employ the Executive,
and the Executive will serve as the Chief Executive Officer of the Company on a
full-time basis and will have such responsibilities and authority as may from
time to time be assigned to the Executive by the Board of Directors of the
Company.  Executive shall be responsible for:  all medical, scientific research
and development issues including without limitation, research projects, budgets
with respect to such projects, hiring and firing of all employees, strategic
direction and strategic alliance (in conjunction with the board of directors of
Employer), patents, presentations and publications; all personnel; and all
business operations of the Company.  In this capacity, Executive will provide
unique services to the Company and be privy to the Company’s Confidential
Information and Trade Secrets.  The Executive will report to the Board of
Directors of the Company.  Executive shall serve on the Board of Directors
without additional compensation beyond that set forth in this Agreement, and
shall continue to so serve for so long as he is thereafter elected to such
position by the Company’s stockholders.  The Executive’s primary office will be
at the Company’s headquarters in such geographic location within the United
States as may be determined by the Company.
 
(b)           Exclusivity.  Throughout the Executive’s employment hereunder, the
Executive shall devote substantially all of the Executive’s time, energy and
skill during regular business hours to the performance of the duties of the
Executive’s employment, shall faithfully and industriously perform such duties,
and shall diligently follow and implement all management policies and decisions
of the Company; provided, however, that this provision is not intended to
prevent the Executive from managing his investments, so long as he gives his
duties to the Company first priority and such investment activities do not
interfere with his performance of duties for the Company.  Notwithstanding the
foregoing, other than with regard to the Executive’s duties to the Company, the
Executive will not accept any other employment during the Term, perform any
consulting services during the Term, or serve on the board of directors or
governing body of any other business, except with the prior written consent of
the Board of Directors.  Further, the Executive has disclosed on Exhibit A
hereto, all of his nonpublic company bio-discovery related investments, and
agrees during the Term not to make any investments during the Term hereof except
as a passive investor.  The Executive agrees during the Term not to own directly
or indirectly equity securities of any public healthcare related company
(excluding the Company) that represents five percent (5%) or more of the value
of voting power of the equity securities of such company.
 

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2.    Compensation.
 
(a)           Base Salary.  The Company shall pay the Executive base salary of
$300,000.00 per annum (the “Annual Base Salary”), which base salary will be
subject to review effective at least annually thereafter by the Company for
possible increases. The base salary shall be payable in equal installments, no
less frequently than twice per month, in accordance with the Company’s regular
payroll practices.
 
(b)           Bonus.
 
(i)          Retention Bonus. The Company shall pay Executive a one time
retention signing bonus of $50,000.00 to continue his employment as Chief
Executive Officer for an additional two year term. The Retention Signing Bonus
will be paid on the Effective Date.
 
(ii)         Cash Bonus.  During the Term, the Company shall pay Executive a
cash bonus equal to 10% of all Company net revenue (“Company Net Revenue”)
collected  beginning with the Effective Date and ending on the effective date of
the termination of this Agreement (the “Cash Bonus”), which will include, but
not be limited to revenue derived from development fees, license fees, royalties
pursuant to agreements between the Company any entity with which the Company
enters into a contract and also shall include distributions from SVM Capital,
LLC and the proceeds of any transaction effected by Patent Profit International
on behalf of the Company (each a “Revenue Contract”),  but shall not include the
proceeds of any capital infusions from the exercise of outstanding options or
warrants or as a result of any capital raise undertaken by the Company.  For
purposes of this Agreement, the term “Company Net Revenue” means gross revenues
collected under the Revenue Contracts, reduced by the amount of any
out-of-pocket costs or expenses that are directly related to obtaining,
negotiating or documenting the Revenue Contracts and the performance of such
Revenue Contracts, regardless of when such expenses were incurred; provided,
however, no portion of the general Company overhead, including the salaries of
Company employees, shall reduce Company Net Revenue unless any such cost or
expense is an explicit element of a Revenue Contract.  Notwithstanding anything
else to the contrary, no additional Cash Bonus amounts shall be paid if and when
during the Term the amount of the Cash Bonus equals 300% of the Executive’s
Annual Base Salary.  A Cash Bonus amount, if any, shall be paid to Executive
within four business days after the receipt of any cash payment by the Company.
 
(c)           Equity Compensation.  The Executive shall receive options to
acquire shares of the Company’s Common Stock at an exercise price per share
equal to the greater of the fair market value of a share of the Company’s Common
Stock or $0.08, which shall vest pursuant to the vesting schedule set forth on
Exhibit B hereto and which grant shall be evidenced by an option agreement in
form and substance reasonably satisfactory to the Company and Executive.
 
(d)           Expenses.  The Executive shall be entitled to be reimbursed in
accordance with Company policy in effect for reasonable and necessary expenses
incurred by the Executive in connection with the performance of the Executive’s
duties of employment hereunder; provided, however, the Executive shall, as a
condition of such reimbursement, submit verification of the nature and amount of
such expenses in accordance with the reasonable reimbursement policies from time
to time adopted by the Company.  Any travel by Executive on behalf of the
Company shall be at the Company’s expense and shall include, but not be limited
to, all costs for the Executive’s transportation, lodging, meals, and with
respect to air fare at full coach rates for domestic flights with a scheduled
flight time of less than four hours and at full business class rates for all
domestic flights with a scheduled flight time of four hours or more and for all
international flights.
 
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(e)           Paid Time Off.  Executive shall be entitled to 20 paid vacation
days during the calendar year from January 1 to December 31. For employment
periods of less than one calendar year, vacation days shall accrue at the rate
of 0.83 days per month of employment.  All vacation must be taken by December 31
in the calender year in which such vacation is earned.
 
(f)           Benefits.
 
(i)          The Company shall at all times during the Term pay all premiums for
health insurance benefits for Executive and his dependants with coverage and
premiums no less favorable to Executive as such coverage and premiums to which
Executive is receiving immediately prior to the date of this Agreement;
provided, however, Executive shall be responsible for all deductibles,
co-payment requirements or similar obligations under such health insurance, and
provided, further, that the Company's obligations under this Section 2(f)(i)
shall not exceed $30,000.
 
(ii)         In addition to the benefits payable to the Executive specifically
described herein, the Executive shall be entitled to such benefits as generally
may be made available to all other executives of the Company from time to time;
provided, however, that nothing contained herein shall require the establishment
or continuation of any particular plan or program; provided, further, that
Executive shall not be entitled to participate in any stock option or other
equity plan otherwise made available to other executives of the Company.
 
(g)           Director & Officer Insurance.  The Company, at its expense, shall
maintain director and officer insurance covering Executive at levels consistent
with past practice with a reputable carrier. The Executive shall be entitled to
indemnification, including advancement of expenses (if applicable), in
accordance with and to the extent provided by the Company’s bylaws and articles
of incorporation, and any separate indemnification agreement, if any.
 
(h)           Reimbursement Conditions.  Except as provided in Section 8(h)
below, all expenses eligible for reimbursement under this Agreement must be
incurred by the Executive during the Term of this Agreement to be eligible for
reimbursement.  Except as provided in Section 8(h) below, all reimbursements
shall be paid as soon as administratively practicable, but in no event shall any
reimbursement be paid after the last day of the calendar year following the
calendar year in which the expense was incurred, nor shall the amount of
reimbursable expenses incurred in one taxable year affect the expenses eligible
for reimbursement in any other taxable year.

(i)           Withholding.  All payments pursuant to this Agreement shall be
reduced for any applicable state, local, or federal tax withholding obligations.
 
3.    Term, Termination and Termination Payments.
 
(a)           Term.  The term of this Agreement shall begin as of the Effective
Date.  It shall continue through the second anniversary of the date hereof or
until sooner terminated earlier pursuant to Section 3(b) hereof (the “Term”).
 
(b)           Termination.  This Agreement and the employment of the Executive
by the Company hereunder shall only be terminated: (i) by expiration of the
original Term; (ii) by the Company without Cause; (iii) by the Executive for
Good Reason; (iv) by the Company or the Executive due to the Disability of the
Executive; (v) by the Company for Cause; (vi) by the Executive for other than
Good Reason or Disability, upon at least ninety (90) days prior written notice
to the Company; or (vii) upon the death of the Executive.  Notice of termination
by any party shall be given prior to termination in writing and shall specify
the basis for termination and the effective date of termination.  Further,
notice of termination for Cause by the Company or Good Reason by the Executive
shall specify the facts alleged to constitute termination for Cause or Good
Reason, as applicable.  Except as provided in Section 3(c), the Executive shall
not be entitled to any payments or benefits after the effective date of the
termination of this Agreement, except for base salary pursuant to Section 2(a)
accrued up to the effective date of termination, any unpaid earned and accrued
Cash Bonus, if any, pursuant to Section 2(b), pay for accrued but unused
vacation that the Company is legally obligated to pay Executive, if any, and
only if the Company is so obligated, as provided under the terms of any other
employee benefit and compensation agreements or plans applicable to the
Executive, expenses required to be reimbursed pursuant to Section 2(d), and any
rights to payment the Executive has under Section 2(g).
 
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(c)           Termination by the Company without Cause or by the Executive for
Good Reason.
 
(i)           If the employment of the Executive is terminated by the Company
without Cause or by the Executive for Good Reason and such termination
constitutes a Termination of Employment, the Company will pay the Executive (A)
his base salary pursuant to Section 2(a) hereof for the remainder of the
original Term, plus (B) an amount equal to the actual cost of ninety (90) days
of the Executive’s COBRA premium payments, commencing with the COBRA payment
next due after termination, should the Executive elect COBRA (the “Continuing
Benefit”).  Such amount shall be paid in arrears in substantially equal
installments not less frequently than monthly over the remainder of the original
Term commencing within thirty (30) days following the effective date of
termination; provided, however, if the Executive is a “specified employee”
within the meaning of Section 409A of the Internal Revenue Code, as amended (the
“Code”), at the date of his Termination of Employment, then such portion of the
payments that would result in a tax under Code Section 409A if paid during the
first six (6) months after Termination of Employment shall be withheld, starting
with the payments latest in time during such six (6) month period, and paid to
the Executive during the seventh month following the date of his Termination of
Employment.  Notwithstanding the foregoing, if the total payments to be paid to
the Executive hereunder, along with any other payments to the Executive, would
result in the Executive being subject to the excise tax imposed by Code Section
4999, the Company shall reduce the aggregate payments to the largest amount
which can be paid to the Executive without triggering the excise tax, but only
if and to the extent that such reduction would result in the Executive retaining
larger aggregate after-tax payments.  The determination of the excise tax and
the aggregate after-tax payments to be received by the Executive will be made by
the Company.  If payments are to be reduced, the payments made latest in time
will be reduced first.
 
(ii)          If the original Term is not extended or the Company or the
Executive terminates the Executive’s employment upon or following expiration of
the Term, such termination shall not be deemed to be a termination of the
Executive’s employment by the Company without Cause or a resignation by
Executive for Good Reason.
 
(iii)         Notwithstanding any other provision hereof, as a condition to the
payment of the amounts in this Section, the Executive shall be required to
execute and not revoke within the revocation period provided therein, the
Release.
 
(d)           Survival.  The covenants in this Section 3 hereof shall survive
the termination of this Agreement and shall not be extinguished thereby.
 
4.    Ownership and Protection of Proprietary Information.
 
(a)           Confidentiality.  All Confidential Information and Trade Secrets
and all physical embodiments thereof received or developed by the Executive
while employed by the Company are confidential to and are and will remain the
sole and exclusive property of the Company.  Except to the extent necessary to
perform the duties assigned by the Company hereunder, the Executive will hold
such Confidential Information and Trade Secrets in trust and strictest
confidence, and will not use, reproduce, distribute, disclose or otherwise
disseminate the Confidential Information and Trade Secrets or any physical
embodiments thereof and may in no event take any action causing or fail to take
the action necessary in order to prevent, any Confidential Information and Trade
Secrets disclosed to or developed by the Executive to lose its character or
cease to qualify as Confidential Information or Trade Secrets.
 
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(b)           Return of Company Property.  Upon request by the Company, and in
any event upon termination of this Agreement for any reason, as a prior
condition to receiving any final compensation hereunder (including any payments
pursuant to Section 3 hereof), the Executive will promptly deliver to the
Company all property belonging to the Company, including, without limitation,
all Confidential Information and Trade Secrets (and all embodiments thereof)
then in the Executive’s custody, control or possession.
 
(c)           Survival.  The covenants of confidentiality set forth herein will
apply on and after the date hereof to any Confidential Information and Trade
Secrets disclosed by the Company or developed by the Executive while employed or
engaged by the Company prior to or after the date hereof.  The covenants
restricting the use of Confidential Information will continue and be maintained
by the Executive for a period of two years following the termination of this
Agreement.  The covenants restricting the use of Trade Secrets will continue and
be maintained by the Executive following termination of this Agreement for so
long as permitted by the governing law.
 
5.    Non-Competition and Non-Solicitation Provisions.
 
(a)           The Executive agrees that during the Applicable Period, the
Executive will not (except on behalf of or with the prior written consent of the
Company, which consent may be withheld in Company’s sole discretion), within the
Area either directly or indirectly, on his own behalf, or in the service of or
on behalf of others, provide managerial services or management consulting
services substantially similar to those Executive provides for the Company to
any Competing Business.  The Executive acknowledges and agrees that the Business
of the Company is conducted in the Area.
 
(b)           The Executive agrees that during the Applicable Period, he will
not, either directly or indirectly, on his own behalf or in the service of or on
behalf of others solicit any individual or entity which is an actual or, to his
knowledge, actively sought prospective client of the Company or any of its
Affiliates (determined as of date of termination of employment) with whom he had
material contact while he was an Executive of the Company, for the purpose of
offering services substantially similar to those offered by the Company.
 
(c)           The Executive agrees that during the Applicable Period, he will
not, either directly or indirectly, on his own behalf or in the service of or on
behalf of others, solicit for employment with a Competing Business any person
who is a management level employee of the Company or an Affiliate with whom
Executive had contact during the last year of Executive’s employment with the
Company.  The Executive shall not be deemed to be in breach of this covenant
solely because an employer for whom he may perform services may solicit, divert,
or hire a management level employee of the Company or an Affiliate provided that
Executive does not engage in the activity proscribed by the preceding sentence.
 
(d)           The Executive agrees that during the Applicable Period, he will
not make any statement (written or oral) that could reasonably be perceived as
disparaging to the Company or any person or entity that he reasonably should
know is an Affiliate of the Company.
 
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(e)           In the event that this Section 5 is determined by a court which
has jurisdiction to be unenforceable in part or in whole, the court shall be
deemed to have the authority to strike any unenforceable provision, or any part
thereof or to revise any provision to the minimum extent necessary to be
enforceable to the maximum extent permitted by law.
 
(f)           The provisions of this Section 5 shall survive termination of this
Agreement.
 
6.    Remedies and Enforceability.
 
The Executive agrees that the covenants, agreements, and representations
contained in Sections 4 and 5 hereof are of the essence of this Agreement; that
each of such covenants are reasonable and necessary to protect and preserve the
interests and properties of the Company; that irreparable loss and damage will
be suffered by the Company should the Executive breach any of such covenants and
agreements; that each of such covenants and agreements is separate, distinct and
severable not only from the other of such covenants and agreements but also from
the other and remaining provisions of this Agreement; that the unenforceability
of any such covenant or agreement shall not affect the validity or
enforceability of any other such covenant or agreements or any other provision
or provisions of this Agreement; and that, in addition to other remedies
available to it, including, without limitation, termination of the Executive’s
employment for Cause, the Company shall be entitled to seek both temporary and
permanent injunctions to prevent a breach or contemplated breach by the
Executive of any of such covenants or agreements.
 
7.    Notice.
 
All notices, requests, demands and other communications required hereunder shall
be in writing and shall be deemed to have been duly given if delivered or if
mailed, by United States certified or registered mail, prepaid to the party to
which the same is directed at the following addresses (or at such other
addresses as shall be given in writing by the parties to one another):
 
If to the Company:
 
2 East Bryan Street, Suite 601
Savannah, GA 31401

If to the Executive:
 
2 Springfield Place
Savannah, GA 31411

Notices delivered in person shall be effective on the date of delivery.  Notices
delivered by mail as aforesaid shall be effective upon the fourth calendar day
subsequent to the postmark date thereof.
 
8.    Miscellaneous.
 
(a)           Assignment.  The rights and obligations of the Company under this
Agreement shall inure to the benefit of the Company’s successors and
assigns.  This Agreement may be assigned by the Company to any legal successor
to the Company’s business or to an entity that purchases all or substantially
all of the assets of the Company, but not otherwise without the prior written
consent of the Executive.  In the event the Company assigns this Agreement as
permitted by this Agreement and the Executive remains employed by the assignee,
the “Company” as defined herein will refer to the assignee and the Executive
will not be deemed to have terminated his employment hereunder until the
Executive terminates his employment with the assignee.  The Executive may not
assign this Agreement.
 
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(b)           Waiver.  The waiver of any breach of this Agreement by any party
shall not be effective unless in writing, and no such waiver shall constitute
the waiver of the same or another breach on a subsequent occasion.
 
(c)           Governing Law.  This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Georgia.  The parties agree
that any appropriate state or federal court located in Chatham County, Georgia
shall have jurisdiction of any case or controversy arising under or in
connection with this Agreement and shall be a proper forum in which to
adjudicate such case or controversy.  The parties consent to the jurisdiction of
such courts.
 
(d)           Entire Agreement.  This Agreement embodies the entire agreement of
the parties hereto relating to the subject matter hereof and supersedes all oral
agreements, and to the extent inconsistent with the terms hereof, all other
written agreements.
 
(e)           Amendment.  This Agreement may not be modified, amended,
supplemented or terminated except by a written instrument executed by the
parties hereto.
 
(f)            Severability.  Each of the covenants and agreements hereinabove
contained shall be deemed separate, severable and independent covenants, and in
the event that any covenant shall be declared invalid by any court of competent
jurisdiction, such invalidity shall not in any manner affect or impair the
validity or enforceability of any other part or provision of such covenant or of
any other covenant contained herein.
 
(g)           Captions and Section Headings.  Except as set forth in Section 9
hereof, captions and section headings used herein are for convenience only and
are not a part of this Agreement and shall not be used in construing it.
 
(h)           Dispute Resolution.  If a dispute arises between Company and
Executive regarding the interpretation of this Agreement, the parties agree to
negotiate in good faith regarding a resolution of the issues involved for at
least thirty days. If the parties fail to resolve the dispute during this period
of negotiation and either party initiates proceedings to enforce its rights no
later than twelve months following any termination of this Agreement, Company
will immediately escrow $50,000 from which Executive will be reimbursed for his
reasonable litigation expenses monthly upon presentation to the escrow agent of
reasonable proof of expenditure. Company will replenish this escrow fund with an
additional $25,000 whenever the balance falls below $10,000. Executive shall, as
a condition of any such reimbursement, submit proof of any expenditure within
thirty days of incurring the expenditure. Any amounts payable to Executive under
this Section shall include a tax  gross up amount to cover any applicable income
taxes based upon the Executive’s effective marginal federal and state tax rate
for the calendar year immediately preceding the calendar year in which the
reimbursement is made. Within sixty (60) days after a final determination
(excluding any appeals) is made with respect to the proceedings, unless the
parties agree otherwise, the losing party will reimburse the winning party’s
reasonable attorney’s fees and costs incurred in the litigation, and if
Executive shall be the losing party, Executive shall reimburse Company at the
same time for all prior payments to him of his reasonable litigation expenses
with appropriate interest calculated from the date(s) such prior payments were
paid to him through the date the Executive reimburses the Company. For purposes
of this Section, the appropriate interest rate means the “Prime Rate,” as
reported by the Wall Street Journal, for the date of the final determination of
the proceedings or, if that date is not a business day, for the first business
day thereafter. ALL DISPUTES ARISING OUT OF OR RELATED TO THIS AGREEMENT OR TO
COMPANY’S EMPLOYMENT OF EXECUTIVE OR THE TERMINATION OF EXECUTIVE’S EMPLOYMENT
SHALL BE SUBMITTED EXCLUSIVELY TO BINDING ARBITRATION IN SAVANNAH, GEORGIA,
PURSUANT TO THE NATIONAL RULES FOR THE RESOLUTION OF EMPLOYMENT DISPUTES OF THE
AMERICAN ARBITRATION ASSOCIATION, provided however that Company shall be
entitled to injunctive relief from any court of jurisdiction against Executive’s
breach of any covenant in Articles 6 and 7, and further provided that this
Agreement shall not require arbitration of any claim for workers’ compensation
benefits or any claim for unemployment compensation. Executive understands that
agreeing to arbitration waives the right to a jury trial. Arbitral awards shall
be enforceable by any court of competent jurisdiction.
 
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9.    Definitions.
 
(a)           “Affiliate” means any person, firm, corporation, partnership,
association or entity that, directly or indirectly or through one or more
intermediaries, controls, is controlled by or is under common control with the
Company.
 
(b)           “Applicable Period” means the period commencing as of the date of
this Agreement and ending twelve months after the termination of the Executive’s
employment with the Company or any of its Affiliates.
 
(c)           “Area” means the United States.
 
(d)           “Business of the Company” means any business that uses or provides
consulting services related to support vector machines or fractal genomic
modeling.
 
(e)           “Cause” the occurrence of any of the following events:
 
(i)          willful failure or refusal to perform the duties as set forth in
Section 1(a) as determined by the Board of Directors or implement a directive
from the Board of Directors, in each case remaining uncured for a period of
fourteen (14) days after receipt of written notice from the Board of Directors
specifying such failure or refusal;
 
(ii)         intentional disclosure by the Executive to an unauthorized person
of Confidential Information or Trade Secrets, which causes material harm to the
Company;
 
(iii)        any act by the Executive of fraud against, material
misappropriation from, or significant dishonesty to either the Company or an
Affiliate, or any other party, but in the latter case only if in the reasonable
opinion of at least two-thirds of the members of the Board of Directors of the
Company (excluding the Executive), such fraud, material misappropriation, or
significant dishonesty could reasonably be expected to have a material  adverse
impact on the Company or its Affiliates;
 
(iv)        conviction of, or plea of nolo contendere to, a felony which
adversely and materially affects the Company; or
 
(v)         a material breach of this Agreement by the Executive, provided that
the nature of such breach shall be set forth with reasonable particularity in a
written notice to the Executive who shall have ten (10) days following delivery
of such notice to cure such alleged breach, provided that such breach is, in the
reasonable discretion of the Board of Directors, susceptible to a cure.
 
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(f)            “Competing Business” means the entities listed below and any
person, firm, corporation, joint venture, or other business that is engaged in
the Business of the Company:
 
(g)           “Confidential Information” means data and information relating to
the Business of the Company or an Affiliate (which does not rise to the status
of a Trade Secret) which is or has been disclosed to the Executive or of which
the Executive became aware as a consequence of or through his relationship to
the Company or an Affiliate and which has value to the Company or an Affiliate
and is not generally known to its competitors.  Confidential Information shall
not include any data or information that has been voluntarily disclosed to the
public by the Company or an Affiliate (except where such public disclosure has
been made by the Executive without authorization) or that has been independently
developed and disclosed by others, or that otherwise enters the public domain
through lawful means without breach of any obligations of confidentiality owed
to the Company or any of its Affiliates by the Executive.
 
(h)           “Disability” means the inability of the Executive to perform the
material duties of his position hereunder due to a physical, mental, or
emotional impairment, for a ninety (90) consecutive day period or for aggregate
of one hundred eighty (180) days during any three hundred sixty-five (365) day
period.
 
(i)           “Good Reason” means the occurrence of all of the events listed in
either (i) or (ii) below:
 
(i)           (A)      the Company materially breaches this Agreement, including
without limitation, a material diminution of the Executive’s responsibilities as
Chief Executive Officer, as reasonably modified by the Board of Directors from
time to time hereafter, such that the Executive would no longer have
responsibilities substantially equivalent to those of other chief executive
officers at companies with similar revenues and market capitalization;
 
  (B)       the Executive gives written notice to the Company of the facts and
circumstances constituting the breach of the Agreement within ten (10) days
following the occurrence of the breach;
 
  (C)        the Company fails to remedy the breach within ten (10) days
following the Executive’s written notice of the breach; and
 
  (D)        the Executive terminates his employment within ten (10) days
following the Company’s failure to remedy the breach; or
 
(ii)         (A)        the Company requires the Executive to relocate the
Executive’s primary place of employment to a new location, that is more than
fifty (50) miles (calculated using the most direct driving route) from its
current location, without the Executive’s consent;
 
  (B)        the Executive gives written notice to the Company within ten (10)
days following receipt of notice of relocation of his objection to the
relocation;
 
  (C)        the Company fails to rescind the notice of relocation within ten
(10) days following the Executive’s written notice; and
 
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  (D)        the Executive terminates his employment within ten (10) days
following the Company’s failure to rescind the notice.
 
(j)           “Release” means a comprehensive release, covenant not to sue, and
non-disparagement agreement from the Executive in favor of the Company, its
executives, officers, directors, Affiliates, and all related parties, in the
form attached hereto as Exhibit C.
 
(k)           “Term” has the meaning as set forth in Section 3(a) hereof.
 
(l)           “Termination of Employment” means either that (a) the Executive
has ceased to perform any services for the Company and all affiliated companies
that, together with the Company, constitute the “service recipient” within the
meaning of Section 409A of the Code and the regulations thereunder
(collectively, the “Service Recipient”) or (b) the level of bona fide services
the Executive performs for the Service Recipient after a given date (whether as
an employee or as an independent contractor) permanently decreases (excluding a
decrease as a result of military leave, sick leave, or other bona fide leave of
absence if the period of such leave does not exceed six months, or if longer, so
long as the Executive retains a right to reemployment with the Service Recipient
under an applicable statute or by contract) to no more than twenty percent (20%)
of the average level of bona fide services performed for the Service Recipient
(whether as an employee or an independent contractor) over the immediately
preceding 36-month period.

(m)           “Trade Secrets” means data and information relating to the
Business of the Company or an Affiliate including, but not limited to, technical
or nontechnical data, formulae, patterns, compilations, programs, devices,
methods, techniques, drawings, processes, financial data, financial plans,
product plans or lists of actual or potential customers or suppliers which
(i) derives economic value, actual or potential, from not being generally known
to, and not being readily ascertainable by proper means by, other persons who
can obtain economic value from its disclosure or use, and (ii) is the subject of
efforts that are reasonable under the circumstances to maintain its secrecy.
 
IN WITNESS WHEREOF, the Company and the Executive have each executed and
delivered this Agreement as of the date first shown above.
 

 
COMPANY:
           
Health Discovery Corporation
                   
By:
/s/ Dr. Michael Hanbury       
Dr. Michael Hanbury, as an independent director
                 
THE EXECUTIVE:
                    /s/ Dr. Stephen Barnhill     
Dr. Stephen Barnhill
 

10

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EXHIBIT A

None
     

11

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EXHIBIT B

Vesting Date
Minimum Share Price
Number of Options
August 15, 2008
$0.10
1,000,000
January 1, 2009
$0.15
2,000,000
January 1, 2010
$0.20
2,000,000
January 1, 2010
$0.25
1,000,000

Each portion of the option identified  under the “Number of Options” column
above shall vest only if and when (1) the Executive has been continuously
employed by the Company through the applicable Vesting Date, (2) the Company’s
Common Stock’s closing price for any 20 consecutive trading days is no less than
the Minimum Share Price stated for the specified Vesting Date at any point after
the Effective Date, and (3) with respect to the options that have a Vesting Date
of January 1, 2010, either the Company has (i) cash on hand in excess of
$800,000, or (ii) a positive, trailing 90-day EBITDA, or (iii) raised an
additional $1,000,000 in capital from new investments, excluding any proceeds
from the exercise of any warrants or options.

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EXHIBIT C

RELEASE, AGREEMENT PURSUANT TO
EMPLOYMENT AGREEMENT

This Agreement (this “Agreement”) is made this ___ day of _____, 200_, by
_______________ (the “Employer”) and ________________ (the “Employee”).

Introduction

Employee and the Employer entered into an Employment Agreement dated ________,
200_ (the “Employment Agreement”).

The Employment Agreement requires that as a condition to the Employer’s
obligation to pay payments and benefits under Section 3(c) of the Employment
Agreement (the “Severance Benefits”), Employee must provide a release and agree
to certain other conditions as provided herein.

NOW, THEREFORE, the parties agree as follows:

1.
Employee has been offered twenty-one (21) days from receipt of this Agreement
within which to consider this Agreement. The effective date of this Agreement
shall be the date eight (8) days after the date on which Employee signs this
Agreement (“the Effective Date”). For a period of seven (7) days following
Employee’s execution of this Agreement, Employee may revoke this Agreement, and
this Agreement shall not become effective or enforceable until such seven (7)
day period has expired. Employee must communicate the desire to revoke this
Agreement in writing.  Employee understands that he or she may sign the
Agreement at any time before the expiration of the twenty-one (21) day review
period.  To the degree Employee chooses not to wait twenty-one (21) days to
execute this Agreement, it is because Employee freely and unilaterally chooses
to execute this Agreement before that time.  Employee’s signing of the Agreement
triggers the commencement of the seven (7) day revocation period.
   
2.
In exchange for Employee’s execution of this Agreement and in full and complete
settlement of any claims as specifically provided in this Agreement, the
Employer will provide Employee with the Severance Benefits.
   
3.
Employee acknowledges and agrees that this Agreement is in compliance with the
Age Discrimination in Employment Act and the Older Workers Benefit Protection
Act and that the releases set forth in this Agreement shall be applicable,
without limitation, to any claims brought under these Acts.
     
The release given by Employee in this Agreement is given solely in exchange for
the consideration set forth in Section 2 of  this Agreement and such
consideration is in addition to anything of value that Employee was entitled to
receive prior to entering into this Agreement.
     
Employee has been advised to consult an attorney prior to entering into this
Agreement and this provision of the Agreement satisfies the requirement of the
Older Workers Benefit Protection Act that Employee be so advised in writing.
     
By entering into this Agreement, Employee does not waive any rights or claims
that may arise after the date this Agreement is executed.

 
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4.
This Agreement shall in no way be construed as an admission by the Employer that
it has acted wrongfully with respect to Employee or any other person or that
Employee has any rights whatsoever against the Employer.  The Employer
specifically disclaims any liability to or wrongful acts against Employee or any
other person on the part of itself, its employees or its agents.
   
5.
As a material inducement to the Employer to enter into this Agreement, Employee
hereby irrevocably releases the Employer and each of the owners, stockholders,
predecessors, successors, directors, officers, employees, representatives,
attorneys, affiliates (and agents, directors, officers, employees,
representatives and attorneys of such affiliates) of the Employer and all
persons acting by, through, under or in concert with them (collectively, the
“Releasees”), from any and all charges, claims, liabilities, agreements,
damages, causes of action, suits, costs, losses, debts and expenses (including
attorneys’ fees and costs actually incurred) of any nature whatsoever, known or
unknown, including, but not limited to, rights arising out of alleged violations
of any contracts, express or implied, any covenant of good faith and fair
dealing, express or implied, or any tort, or any legal restrictions on the
Employer’s right to terminate employees, or any federal, state or other
governmental statute, regulation, or ordinance, including, without limitation:
(1) Title VII of the Civil Rights Act of 1964, as amended by the Civil Rights
Act of 1991 (race, color, religion, sex, and national origin discrimination);
(2) the Employee Retirement Income Security Act (“ERISA”); (3) 42 U.S.C. § 1981
(discrimination); (4) the Americans with Disabilities Act (disability
discrimination); (5) the Equal Pay Act; (6) the Age Discrimination in Employment
Act; (7) the Older Workers Benefit Protection Act;  (6) Executive Order 11246
(race, color, religion, sex, and national origin discrimination); (7) Executive
Order 11141 (age discrimination); (8) Section 503 of the Rehabilitation Act of
1973 (disability discrimination); (9) negligence; (10) negligent hiring and/or
negligent retention; (11) intentional or negligent infliction of emotional
distress or outrage; (12) defamation; (13) interference with employment;
(14) wrongful discharge; (15) invasion of privacy; or (16) violation of any
other legal or contractual duty arising under the laws of the State of Maryland
or the laws of the United States (“Claim” or “Claims”), which Employee now has,
or claims to have, or which Employee at any time heretofore had, or claimed to
have, or which Employee at any time hereinafter may have, or claim to have,
against each or any of the Releasees, in each case as to acts or omissions by
each or any of the Releasees occurring up to and including the Effective Date.
   
6.
The release in the preceding paragraph of this Agreement does not apply to
(a) all benefits and awards (including without limitation cash and stock
components) which pursuant to the terms of any compensation or benefit plans,
programs, or agreements of the Employer are earned or become payable, but which
have not yet been paid, and (b) pay for accrued but unused vacation that the
Employer is legally obligated to pay Employee, if any, and only if the Employer
is so obligated, (c) unreimbursed business expenses for which Employee is
entitled to reimbursement under the Employer’s policies, and (d) any rights to
indemnification that Employee has under any directors and officers or other
insurance policy the Employer maintains or under the bylaws and articles of
incorporation of the Company, and under any indemnification agreement, if any.
   
7.
Employee promises that he will not make statements disparaging to any of the
Releasees.  Employee agrees not to make any statements about any of the
Releasees to the press (including without limitation any newspaper, magazine,
radio station or television station) without the prior written consent of the
Employer.  The obligations set forth in the two immediately preceding sentences
will expire two years after the Effective Date.  Employee will also cooperate
with the Employer and its affiliates if the Employer requests Employee’s
testimony.  To the extent practicable and within the control of the Employer,
the Employer will use reasonable efforts to schedule the timing of Employee’s
participation in any such witness activities in a reasonable manner to take into
account Employee’s then current employment, and will pay the reasonable
documented out-of-pocket expenses that the Employer pre-approves and that
Employee incurs for travel required by the Employer with respect to those
activities.

 
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9.
Except as set forth in this Section, Employee agrees not to disclose the
existence or terms of this Agreement to anyone.  However, Employee may disclose
it to a member of his immediate family or legal or financial advisors if
necessary and on the condition that the family member or advisor similarly does
not disclose these terms to anyone.  Employee understands that he will be
responsible for any disclosure by a family member or advisor as if he had
disclosed it himself.  This restriction does not prohibit Employee’s disclosure
of this Agreement or its terms to the extent necessary during a legal action to
enforce this Agreement or to the extent Employee is legally compelled to make a
disclosure.  However, Employee will notify the Employer promptly upon becoming
aware of that legal necessity and provide it with reasonable details of that
legal necessity.
   
10.
Employee has not filed or caused to be filed any lawsuit, complaint or charge
with respect to any Claim he releases in this Agreement.  Employee promises
never to file or pursue a lawsuit, complaint or charge based on any Claim
released by this Agreement, except that Employee may participate in an
investigation or proceeding conducted by an agency of the United States
Government or of any state.  Employee also has not assigned or transferred any
claim he is releasing, nor has he purported to do so.
   
11.
The Employer and Employee agree that the terms of this Agreement shall be final
and binding and that this Agreement shall be interpreted, enforced and governed
under the laws of the State of Maryland.  The provisions of this Agreement can
be severed, and if any part of this Agreement is found to be unenforceable, the
remainder of this Agreement will continue to be valid and effective.
   
12.
This Agreement sets forth the entire agreement between the Employer and Employee
and fully supersedes any and all prior agreements or understandings, written
and/or oral, between the Employer and Employee pertaining to the subject matter
of this Agreement.
   
13.
Employee is solely responsible for the payment of any fees incurred as the
result of an attorney reviewing this agreement on behalf of Employee.  In any
litigation concerning the validity or enforceability of this contract or in any
litigation to enforce the provisions of this contract, the prevailing party
shall be entitled to recover reasonable attorneys’ fees and costs, including
court costs and expert witness fees and costs.

 
Employee’s signature below indicates Employee’s understanding and agreement with
all of the terms in this Agreement.
 
Employee should take this Agreement home and carefully consider all of its
provisions before signing it. Employee may take up to twenty-one (21) days to
decide whether Employee wants to accept and sign this Agreement.  Also, if
Employee signs this Agreement, Employee will then have an additional seven (7)
days in which to revoke Employee’s acceptance of this Agreement after Employee
has signed it.  This Agreement will not be effective or enforceable, nor will
any consideration be paid, until after the seven (7) day revocation period has
expired. Again, Employee is free and encouraged to discuss the contents and
advisability of signing this Agreement with an attorney of Employee’s choosing.
 
15

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Employee should read carefully.  This agreement includes a release of all known
and unknown claims through the effective date.  Employee is strongly advised to
consult with an attorney before executing this document.
 
IN WITNESS WHEREOF, Employee and the Employer have executed this agreement
effective as of the date first written above.

 
EMPLOYEE
                    Name                    Date Signed                    
EMPLOYER:
                   
By:
     
Title:
   

 
 
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