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Exhibit 10-117

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT is dated as of December 8, 2011, which becomes
effective January 1, 2012 between Imaging Diagnostic Systems, Inc., a Florida
corporation (the “Company”) 5307 N.W. 35th Terrace, Fort Lauderdale, FL 33309
and Michael Addley (the “Executive”).

WITNESSETH:

WHEREAS, the Company is engaged in the business of developing laser-based
medical optical imaging devices; and

WHEREAS, the Company has the intent to market and sell its products and services
to clients and potential clients throughout the world; and

WHEREAS, the Company wishes to continue to employ the Executive as its Chief
Operating Officer, charged with all the responsibilities and duties as set forth
in the Company’s bylaws; and

WHEREAS, in the course of the Executive’s employment, the Executive will
continue to have access to and acquire knowledge of valuable trade secrets,
confidential information and other proprietary information belonging and
relating to the Company and its business, and which the Company has a legitimate
interest in protecting; and

WHEREAS, the Company and Executive are willing to continue the employment,
subject to the terms and conditions contained in this Employment Agreement (the
“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. EMPLOYMENT.  The Company hereby continues the employment of the Executive and
the Executive hereby accepts employment upon the terms and condition hereinafter
set forth.

2. TERM & TERMINATION.

(a) Term.  The Company hereby continues the employment of the Executive, and the
Executive hereby accepts employment with the Company, for a period commencing on
January 1, 2012, and ending two years from that date (the “Term”). All Company
obligations under this Agreement shall cease upon expiration of the Term, except
for those stock options which have been vested.

 
 

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(b) Termination without Cause.  The Company may terminate the Executive’s
employment without cause.  Such termination will become effective upon the date
specified in the termination notice, provided that such date is at least 180
days from the date of such notice.  In the event of such termination without
cause:

(i) The Company will continue to pay the Executive his salary pursuant to
Section 3(a) through the 180 day notice period.

(ii) The Company will continue to maintain through the 180 day notice period,
the benefits provided to the Executive referred to in Section 3(b) as in effect
on the date of termination.

 On the effective date of termination, all options that were scheduled to vest
will vest and will remain exercisable for a period of three years from the date
of this Agreement.

 The compensation payments and other consideration to which the Executive is
entitled on termination without cause shall not be diminished or otherwise
affected by any employment thereafter obtained or income thereafter earned by
Executive nor will the Company maintain that it is entitled to mitigation of
amounts owed under this section for any reason.

 Termination for Cause.  The Company may terminate the Executive’s employment at
any time for cause by giving written notice of termination setting forth such
cause.  Such termination shall become effective upon the giving of such notice,
except that, where the basis for cause is capable of cure within 30 days,
termination based upon cause shall not become effective unless Executive shall
fail to complete such cure within 30 days of receipt of written notice of the
existence of such cause. Upon such termination the Executive shall have no right
to compensation, commission, bonus, benefits or reimbursement pursuant to this
Agreement, for any period subsequent to the effective date of
termination.  Further, upon termination for cause, all of the Executive’s
unvested stock options shall terminate. For purposes of this section, “cause”
shall mean: (1) the Executive is convicted of a felony; (2) the Executive, in
carrying out his duties hereunder, commits gross negligence or willful
misconduct resulting, in either case, in material harm to the Company; (3) the
Executive misappropriates Company funds or otherwise defrauds the Company; (4)
the Executive materially breaches any provision of this Agreement; or (5) the
Executive materially fails to perform his duties under section 4 resulting in
material harm to the Company.

 Death or Disability.  Upon the death or disability of the Executive, the
Executive shall be entitled to and the Company will pay the Executive’s salary
from the date of death or from the date of disability for six months or through
the end of the Term, whichever is longer. (For purposes of this Section,
“disability” shall mean that for a period of six months in any 12-month period
the Executive is incapable of substantially fulfilling his duties because of
physical, mental or emotional incapacity arising from injury, sickness or
disease.)  Should the Executive be rendered disabled, the Company will continue
to maintain for the benefit of the Executive the employee benefit programs
referred to in Section 3(b) that were in effect on the date of the disability.

 Special Termination.  In the event that (i) the Executive, with or without a
change in title or formal corporate action, shall no longer exercise all of his
customary duties and responsibilities and shall no longer possess substantially
all the authority customary for a Chief Operating Officer in a publicly-traded
company; (ii) the Company materially breaches this Agreement or the performance
of its duties and obligations hereunder; or (iii) 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 20% or more of the Company’s common stock, 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 under
Section 2(b) hereof, in which event the Executive shall be entitled to the
compensation provided for in Section 2(b).

(f)         Voluntary Termination. The Executive, on 30 days prior written
notice to the Company, may terminate his employment voluntarily.  Upon such
termination, the Company will pay the Executive’s compensation through the date
of such termination.  After such date, the Executive shall no longer be entitled
to receive any compensation, reimbursement or benefits, and all unvested stock
options shall terminate upon termination of the Executive’s employment.

(g)         Continuing Effect. Notwithstanding any termination of this Agreement
at the end of the Term or otherwise, the provisions of Sections 6 - 11 shall
remain in full force and effect and the provisions of these Sections shall be
binding upon the legal representatives, heirs, successors and assigns of the
Executive.

3. COMPENSATION.

(a) The Company will pay the Executive an annual base salary of $100,000 per
annum in equal semi-monthly installments.
 

(b) During the term of his employment, the Executive shall be entitled to
participate in employee benefits plans or programs of the Company, if any, to
the extent the Executive is eligible to participate thereunder, including the
Comprehensive Group Insurance Program maintained by the Company, paid by the
Company for the Executive and his spouse.

(c) The Company will reimburse or advance funds to the Executive for all
reasonable travel, entertainment and miscellaneous expenses incurred in
connection with the performance of duties under this Agreement, provided that
the Executive properly accounts for such expenses to the Company in accordance
with the Company’s practices.
 

(d) The Company shall provide the Executive with a $500 per month car allowance
and a cellular phone for use on Company business.

(e) The Executive shall receive an option to purchase up to an aggregate of
10,000,000 shares of the Company’s common stock at an exercise price of $0.005
per share.  The option shall vest as follows:

 
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(i)  
Options to purchase up to 2,500,000 shares may be exercised after 90 days of
continuous employment.

(ii)  
Options to purchase up to 2,500,000 shares may be exercised after 180 days of
continuous employment.

(iii)  
Options to purchase up to 2,500,000 shares may be exercised after 270 days of
continuous employment.

(iv)  
Options to purchase up to 2,500,000 shares may be exercised after 360 days of
continuous employment.

 
During the Term of this Agreement, the Company shall register from time to time
pursuant to a registration statement(s) on Form S-8 that number of shares of
common stock as shall be sufficient to cover the exercise of Executive’s options
granted hereunder.  In the event that the Company experiences a Change of
Control (as defined in the Executive’s stock option agreement of even date) then
all options will vest immediately. Also, in the event the Executive’s employment
is terminated without cause, all options will vest immediately. In the event the
Executive’s employment is terminated with cause, only that portion of the option
exercisable at the time of such termination of employment may thereafter be
exercised, and then only for three months after said termination or until the
expiration of the option, whichever is sooner.

 
(f) The Executive will be entitled to nine paid holidays and four weeks of
vacation for each 12-month period 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.

4. DUTIES.

(a)           General Duties.  The Executive shall be employed as the Chief
Operating Officer, with duties and responsibilities that are customary for such
position, subject to the direction of the Board of Directors and as directed by
the Company’s by-laws.  The Executive will use the standard of care befitting of
such an executive in performing duties and in discharging responsibilities
pursuant to this Agreement, which duties and responsibilities shall be
discharged competently, carefully, and faithfully.

(b)           Corporate Code of Conduct.  The Executive agrees to adhere to the
Company’s Corporate Code of Conduct.

(c)           Extent of Services.  The Executive will devote all of his time,
attention and energies 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.  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 person, business or
organization
 
 
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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 time,
without compensation, to charitable or similar organizations.

5. PLACE OF PERFORMANCE.  The Executive hereby acknowledges that the Company’s
existing and potential clients are located throughout the world and that the
Company is actively engaged in marketing and selling its products and services
to such clients throughout the world.

6. NON-DISCLOSURE 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) proprietary or secret plans, designs, processes, programs,
documents, software, agreements or material relating to the business, products,
services or activities of the Company and its affiliates and (ii) market
reports, customer investigations, clinical data, scientific or engineering
research, customer lists and/or similar information that is proprietary
information of the Company or its affiliates (collectively, “Confidential
Business and Technical Information”).  The Executive recognizes and acknowledges
that the Confidential Business and Technical Information, as it may exist from
time to time, represents valuable, special and unique assets of the Company
access to and knowledge of which are essential to the performance of the
Executive’s duties hereunder.

The Executive will not, during or after the term of his employment by the
Company, in whole or in part, disclose any such Confidential Business and
Technical Information to any person, firm, corporation, association or entity
for any reason or purpose whatsoever, nor shall the Executive make use of any
such Confidential Business and Technical Information for his own purposes or for
the benefit of any person, firm, corporation or entity except the Company under
any circumstances during or after the term of his employment, provided that
after the term of his employment these restrictions shall not apply to such
secrets, information and processes which are then in the public domain provided
that the Executive was not responsible, directly or indirectly, for such
secrets, information or processes entering the public domain without the
Company’s consent.

In the event an action is instituted and prior knowledge is an issue, it shall
be the obligation of the Executive to prove by clear and convincing evidence
that the Confidential Business and Technical Information disclosed was in the
public domain, was already known by the recipient, or was developed
independently by the recipient.  The Executive agrees to hold as the Company’s
property all memoranda, books, papers, letters, formulas and other data, and all
copies thereof and therefrom, in any way containing Confidential Business and
Technical Information or otherwise relating to the Company’s business and
affairs, whether made by him or otherwise coming into his possession, and upon
termination of his employment, or on demand of the Company, at any time, to
deliver the same to the Company.

7. NON-COMPETITION AGREEMENT.

(a) The Executive acknowledges and agrees that, pursuant to Florida Statutes
Section 542.335, based on having access to and acquiring

 
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knowledge of highly sensitive and valuable trade secrets, and confidential or
proprietary information belonging or relating to the Company, the Executive
would be in a position to cause serious and irreparable harm to the Company in
the event that, following the termination of his employment hereunder, the
Executive were to compete with or be involved in an enterprise which competes
with the Company, engages in the same business as the Company, or performs
research and development in the field of medical optical imaging.

(b) Until termination of his employment and for a period of 24 months commencing
on the date of termination, the Executive, directly or indirectly, in
association with or as a stockholder, director, officer, consultant, executive,
partner, joint venturer, member or otherwise of or through any person, firm,
corporation, partnership, association or entity, covenants that the Executive
will not compete with the Company or any of its affiliates in the design,
manufacture, construction, offer, sale or marketing of products or services that
are competitive with the products or services offered by the Company during such
period, within the United States or anywhere in the world.  The Executive
covenants and agrees that during his employment and for a period of 24 months
immediately following the termination of such employment, the Executive will
not, either individually or in partnership or jointly or in conjunction with any
person, firm, business, corporation, partnership, joint venture, entity,
syndicate or association, as an executive, principal, agent, officer, director,
consultant, advisor, distributor, dealer, contractor, trustee, lender,
shareholder or in any manner or capacity whatsoever, directly or indirectly, be
employed by, render services to, carry on or be engaged in, or be concerned with
or be interested in or advise, lend money to, guarantee the debts or obligations
of, or in any manner participate in the management, operation or control of any
business which is directly competitive with the business of the Company, engages
in the same business as the Company or performs research and development in the
medical optical imaging field with any entity located anywhere in the world.

(c) For the purposes of this paragraph a business shall be deemed to be in
“direct competition” or “directly competitive” with the Company if such business
is engaged in developing, manufacturing, marketing, selling, or distributing
medical optical imaging devices.

8. NON-SOLICITATION.  The Executive covenants and agrees that while he is
employed by the Company and for a period of 24 months immediately following the
termination of such employment, he will not, directly or indirectly, in any
manner whatsoever, on his own behalf, or on behalf of any person, firm,
business, corporation, partnership, joint venture, entity, syndicate or
association solicit, induce or cause, or attempt to induce or cause, any person
who is then an employee of or consultant to the Company to cease providing
services to the Company.

9. REASONABLENESS OF CONFIDENTIALITY, NON-COMPETITION AND NON-SOLICITATION
OBLIGATION AND COVENANTS.

(a) The Executive hereby acknowledges and confirms that the obligations and
covenants set out in the above paragraphs are reasonable and necessary to
protect the legitimate interests of the Company.  Without limiting the
generality of the foregoing, the Executive hereby acknowledges and confirms that

 
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given, among other things, the nature and international scope of the Company’s
operations and of the employment duties to be performed by the Executive
hereunder, the geographic scope and duration of the restrictions set forth above
are reasonable and necessary to protect the legitimate interests of the Company.

 The Executive further acknowledges and agrees that these obligations and
covenants will not preclude him from becoming gainfully employed following their
termination of his employment in his profession.

10. INVENTIONS.

 The Executive hereby sells, transfers and assigns to the Company or to any
person or entity designated by the Company, all of the entire right, title and
interest of the Executive in and to all inventions, ideas, disclosures and
improvements, whether patented or unpatented, and copyrightable material, made
or conceived by the Executive, solely or jointly, in whole or in part, during
the term hereof which (i) relate to methods, apparatus, designs, products,
processes or devices sold, leased, used or under construction or development by
the Company or any subsidiary, or (ii) otherwise relate to or pertain to the
business, functions or operations of the Company or any subsidiary, or (iii)
arise wholly or partly from the efforts of the Executive during the term
hereof.  The Executive shall communicate promptly and disclose to the Company,
in such form as the Company requests, all information, details and data
pertaining to the aforementioned inventions, ideas, disclosures and
improvements; and, whether during the term hereof or thereafter, the Executive
shall execute and deliver to the Company such formal transfers and assignments
and such other papers and documents as may be required of the Executive at the
Company’s expense to permit the Company or any person or entity designated by
the Company to file and prosecute the patent applications and, as to
copyrightable material, to obtain copyright thereon.  Any invention made by the
Executive within one year following the termination of employment shall be
deemed to fall within the provisions of this Section unless proven by the
Executive to have been first conceived and made following such termination.

 No Payment.  The Executive acknowledges and agrees that no separate or
additional payment or compensation will be required to be made to him in
consideration of his undertakings in this Section.

11. EQUITABLE RELIEF.

 The Company and the Executive recognize that the services to be rendered under
this Agreement by the Executive are special, unique and of extraordinary
character, and that in the event of the breach by the Executive of the terms and
conditions of this Agreement or if the Executive, without the prior consent of
the Board of Directors of the Company, shall leave his employment for any reason
and take any action in violation of Section 6, Section 7 or Section 8, the
Company will be entitled to institute and prosecute proceedings in any court of
competent jurisdiction referred to in Section 11(b) below, to enjoin the
Executive from breaching the provisions of Section 6, Section 7, or Section
8.  In such action, the Company will not be required to plead or prove
irreparable harm or lack of an adequate remedy at law.  Nothing contained in
this Section 11 shall be construed to prevent the Company from seeking such
other remedy as the Company may elect in any arbitration proceeding based on any
breach of this Agreement by the Executive.

 
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 Any proceeding or action for equitable relief must be commenced in state court
in Broward County, Florida.  The Executive and the Company irrevocably and
unconditionally submit to the jurisdiction of such court and agree to take any
and all future action necessary to submit to the jurisdiction of such
court.  The Executive and the Company irrevocably waive any objection that they
now have or hereafter may have to the laying of venue of any suit, action or
proceeding brought in such court for equitable relief and further irrevocably
waive any claim that any such suit, action or proceeding brought in such court
has been brought in an inconvenient forum.

12. ASSIGNMENT. The rights and obligations of the Company under this Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
the Company, provided that any 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.

13. 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 a court of competent jurisdiction 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 court 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 any judicial proceeding, a court 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.

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 provisions were not included.

 
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14. 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 addressee 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:                      Imaging Diagnostic Systems, Inc.
5307 N.W. 35th Terrace
Ft. Lauderdale, FL 33309

To the Executive:                      Michael Addley
5307 N.W. 35th Terrace
Ft. Lauderdale, FL 33309

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 person or by mailing.

15. COUNTERPART. 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.

16. ARBITRATION. Except for any controversy or claim seeking equitable relief as
provided in Section 11 of this Agreement, any controversy or claim arising out
of or relating to this Agreement, or to the interpretation, breach or
enforcement thereof or any other dispute between the parties, shall be submitted
to one arbitrator and settled by arbitration in Fort Lauderdale, Florida, in
accordance with the commercial arbitration rules of the American Arbitration
Association in effect at such time.  Any award made by such 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.

17. ATTORNEYS 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 is commenced to enforce the
provisions of this Agreement, whether through litigation or arbitration, the
prevailing party shall be entitled to recover from the non-prevailing party
his/its reasonable attorney’s fees, costs and expenses incurred at all levels.

18. GOVERNING LAW. This Agreement and any dispute, disagreement, or issues 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.

 
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19. ENTIRE AGREEMENT.  This Agreement constitutes the entire Agreement between
the parties and supersedes all prior oral and written agreements between the
parties with respect to the employment of the Executive; provided, however, that
all pre-existing option agreements between the Company and the Executive shall
remain in full force and effect.  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 whom enforcement or
the change, waiver, discharge or termination is sought.

20. ADDITIONAL DOCUMENTS.  The parties hereto shall execute and deliver such
additional instruments as may be reasonably required in order to carry out the
purpose and intent of this Agreement and to fulfill the obligations of the
parties hereunder.

21. 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.

22. WAIVER OF BREACH.  A waiver by the Company or the Executive of a breach of
any provision of the Agreement by the other party shall not operate or be
construed as a waiver of any subsequent breach by the other party.

IN WITNESS WHEREOF, the Company and the Executive have executed this Agreement
as of the 8th day of December 2011.

IMAGING DIAGNOSTIC SYSTEMS, INC.
 
 
 
 
By:  /s/ Linda B. Grable
Linda B. Grable, CEO
EXECUTIVE
 
 
 
 
/s/ Michael Addley
Michael Addley, Chief Operating Officer

 
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STOCK OPTION AGREEMENT
(2010 Non-Statutory Stock Option Plan)

Imaging Diagnostic Systems, Inc. (the “Company”), desiring to afford an
opportunity to the Grantee named below to purchase certain shares of common
stock of the Company, to provide the Grantee with an added incentive as an
employee, director or consultant of the Company, hereby grants to Grantee, and
the Grantee hereby accepts, an option to purchase the number of such shares
optioned as specified below, during the term ending at midnight (prevailing
local time at the Company’s principal office) on the expiration date of this
Option specified below, at the option exercise price specified below, subject to
and upon the following terms and conditions:

1.  Identifying Provisions:  As used in this Option, the following terms shall
have the following respective meanings.

 
(a)
Grantee: MICHAEL ADDLEY

 
(b)
Date of Grant:  December 8, 2011

 
(c)
Number of shares optioned:  10,000,000

 
(d)
Option exercise price per share:  $0.005

 
(e)
Expiration Date: December 8, 2021

 
(f)
Plan:  The Company’s 2010 Non-Statutory Stock Option Plan; and

 
(g)
Committee:  The stock option committee of the Company’s Board of Directors, or
if none, the Board of Directors.

 
 
This Option is not intended to be an incentive stock option pursuant to Section
422 of the Internal Revenue Code.

2.  Vesting:      This Option shall vest and become exercisable on the following
date(s) in the following amounts:

           Vesting Date                           Number of Shares

90 Days                                April 1,
2012                                2,500,000

180 Days                              June 29, 2012                           
  2,500,000

270 Days                              September 27, 2012                 
  2,500,000

360 Days                              December 25, 2012                   
 2,500,000

 
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           3. Restrictions on Exercise:  The following additional provisions
shall apply to the exercise of this Option:

(a)  Termination of Employment.  If the Grantee’s employment by the Company or
any of its subsidiaries is terminated without cause for any reason, other than
death only that portion of this Option exercisable at the time of such
termination of employment may thereafter be exercised, and it may not be
exercised more than three years after such termination nor after the Expiration
Date of this Option, whichever date is sooner. In all other respects, this
Option shall terminate upon such termination of employment.

  (b)  Death of Grantee.  If the Grantee shall die during the term of this
Option, the Grantee’s legal representative or representatives, or the person or
persons entitled to do so under the Grantee’s last will and testament or under
applicable intestate laws, shall have the right to exercise this Option, but
only for the number of shares as to which the Grantee was entitled to exercise
this Option in accordance with Section 2 hereof on the date of his death, and
such right shall expire and this Option shall terminate 15 months after the date
of the Grantee’s death or on
the Expiration Date of this Option, whichever date is sooner. In all other
respects, this Option shall terminate upon such death.

(c) Continuity of Employment.  This Option shall not be exercisable by the
Grantee in any part unless at all times beginning with the date of grant and
ending no more than three months prior to the date of exercise, the Grantee has,
except for military service leave, sick leave or other bona fide leave of
absence (such as temporary employment by the United States Government) been in
the continuous service of the Company, except that such period of three months
shall be one (1) year following any termination of the Grantee’s employment by
reason of his permanent and total disability.

(d) Should (i) the Grantee’s Service be terminated for misconduct (including,
but not limited to, any act of dishonesty, willful misconduct, fraud or
embezzlement) or (ii) the Grantee make any unauthorized use or disclosure of
confidential information or trade secrets of the Company or its Parent or
Subsidiary, then in any such event all outstanding Options held by the Grantee
under this Plan shall terminate immediately and cease to be exercisable.

4.  Non-Transferable.  The Grantee may not transfer this Option except by will
or the laws of descent and distribution. This Option shall not be otherwise
transferred, assigned, pledged, hypothecated or disposed of in any way, whether
by operation of law or otherwise, and shall be exercisable during the Grantee’s
lifetime only by the Grantee or his guardian or legal representative.

5. Adjustments and Corporate Reorganization.  Subject to any required action by
the shareholders of the Company, the number of Shares covered by each
outstanding Option, and the number of Shares which have been authorized for
issuance under the Plan but as to which no Options have yet been granted or
which have been returned to the Plan upon cancellation or expiration of any
Option, as well as the price per Share covered by each such outstanding Option,
shall be proportionately adjusted for any increase or decrease in the number of
issued Shares resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been “effected
without receipt of consideration.” Such adjustment shall be made by the
Committee, whose determination in that respect shall be final, binding and
conclusive.  Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of

 
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any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of Shares subject to an Option.

In the event of the proposed dissolution or liquidation of the Company, the
Option will terminate immediately prior to the consummation of such proposed
action, unless otherwise provided by the Committee.  The Committee may, in the
exercise of its sole discretion in such instances, declare that any Option shall
terminate as of a date fixed by the Committee and give each Grantee the right to
exercise his Option as to all or any part of the Option, including Shares as to
which the Option would not otherwise be exercisable.  In the event of the
proposed sale of all or substantially all of the assets of the Company, or the
merger of the Company with or into another corporation in a transaction in which
the Company is not the survivor, the Option shall be assumed or an equivalent
option shall be substituted by such successor corporation or a parent or
subsidiary of such successor corporation, unless the Committee determines, in
the exercise of its sole discretion and in lieu of such assumption or
substitution, that the Grantee shall have the right to exercise the Option as to
all of the optioned stock, including shares as to which the Option would not
otherwise be exercisable.  If the Committee makes an Option fully exercisable in
lieu of assumption or substitution in the event of such a merger or sale of
assets, the Committee shall notify the Grantee that the Option shall be fully
exercisable for a period of 30 days from the date of such notice, and the Option
will terminate upon the expiration of such period.

6.  Exercise, Payment For and Delivery of Stock: This Option may be exercised by
the Grantee or other person then entitled to exercise it by giving four business
days’ written notice of exercise to the Company specifying the number of shares
to be purchased and the total purchase price. The exercise price shall become
immediately due upon exercise of the Option and, subject to the instrument
evidencing the grant, shall be payable in one of the following alternative forms
specified below:

(a)           full payment in cash or check drawn to the Company’s order;

(b)           full payment in shares of Common Stock held for at least six (6)
months and valued at fair market value on the Exercise Date (as such term is
defined below);

(c)           full payment through a combination of shares of Common Stock held
for at least six (6) months and valued at fair market value on the Exercise Date
and cash or check; or

(d)           full payment through a broker-dealer sale and remittance procedure
provided that sale of the optioned stock is permitted as a result of an
effective registration statement under the Securities Act of 1933, as amended,
and compliance with all applicable securities laws, pursuant to which the
Grantee (i) shall provide irrevocable written instructions to a
Company-designated brokerage firm to effect the immediate sale of the purchased
shares and remit to the Company, out of the sale proceeds available on the
settlement date, sufficient funds to cover the aggregate option price payable
for the purchased shares plus all applicable Federal and State income taxes
required to be withheld by the Company in connection with such purchase and (ii)
shall provide written directives to the Company to deliver the certificates for
the purchased shares directly to such brokerage firm in order to complete the
sale transaction.

For purposes of this section 6, the Exercise Date shall be the date on which
written notice of the option exercise is delivered to the Company.  Except to
the extent the sale and remittance procedure is utilized in connection with the
exercise of the Option, payment of the exercise price for the purchased shares
must accompany such notice.

 
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The fair market value per share of Common Stock on any relevant date shall be
determined in accordance with the following provisions:

 (i)           If the Common Stock is not at the time listed or admitted to
trading on any national stock exchange but is traded on the NASDAQ National
Market, the fair market value shall be the closing selling price per share of
Common Stock on the date in question, as such price is reported by the National
Association of Securities Dealers on the NASDAQ National Market or any successor
system.  If there is no reported closing selling price for the Common Stock on
the date in question, then the closing selling price on the last preceding date
for which such quotation exists shall be determinative of fair market value.

 (ii)           If the Common Stock is at the time listed or admitted to trading
on any national stock exchange, then the fair market value shall be the closing
selling price per share of Common Stock on the date in question on the stock
exchange determined by the Committee to be the primary market for the Common
Stock, as such price is officially quoted in the composite tape of transactions
on such exchange.  If there is no reported sale of Common Stock on such exchange
on the date in question, then the fair market value shall be the closing selling
price on the exchange on the last preceding date for which such quotation
exists.

 (iii)           If the Common Stock is quoted on the NASDAQ Capital Market, or
any similar system of automated dissemination of quotations of securities
process in common use, the fair market value shall be the mean between the
closing bid and asked quotations for the Common Stock on such date.

 (iv)           If neither clause (i), (ii) or (iii) is applicable, then the
fair market value shall be the mean between the closing bid and asked quotations
for the Common Stock as reported by the National Quotation Bureau, Inc., if at
least two securities dealers have inserted both bid and asked quotations for
Common Stock on at least five of the ten preceding business days.

7.  Rights in Shares Before Issuance and Delivery.  No person shall be entitled
to the privileges of stock ownership in respect of any shares issuable upon
exercise of this Option, unless and until such shares have been issued to such
person as fully paid shares.

8.  Requirements of Law and of Stock Exchanges. By accepting this Option, the
Grantee represents and agrees for himself and he transferees by will or the laws
of descent and distribution that, unless a registration statement under the
Securities Act of 1933 is in effect as to shares purchased upon any exercise of
this Option, (i) any and all shares so purchased shall be acquired for his
personal account and not with a view to or for sale in connection with any
distribution, and (ii) each notice of the exercise of any portion of this Option
shall be accompanied by a representation and warranty in writing, signed by the
person entitled to exercise the same, that the shares are being so acquired in
good faith for his personal account and not with view to or for sale in
connection with any distribution.

No certificate or certificates for shares of stock purchased upon exercise of
this Option shall be issued and delivered unless and until, in the opinion of
counsel for the Company, such securities may be issued and delivered without
causing the Company to be in violation of or incur liability under any federal,
state or other securities law, any requirement of any securities exchange
listing agreement to which the Company may be a party, or any other requirement
of law or of any regulatory body having jurisdiction over the Company.

9.  Stock Option Plan.  This Option is subject to, and the Company and the
Grantee agree to be bound by, all of the terms and conditions of the Plan, as
the same shall have been amended from time to time in accordance with the terms
thereof, provided that no such amendment shall deprive the Grantee, without his

 
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consent, of this Option or any of his rights hereunder. Pursuant to the Plan,
the Committee is vested with final authority to interpret and construe the Plan
and this Option, and is authorized to adopt rules and regulations for carrying
out the Plan. A copy of the Plan in its present form is available for inspection
during business hours by the Grantee or other persons entitled to exercise this
Option at the Company’s principal office.  The Plan, as amended from time to
time, is hereby incorporated by reference.

10.  Notices.  Any notice to be given to the Company shall be addressed to the
Company in care of its Secretary at its principal office, and any notice to be
given to the Grantee shall be addressed to him at the address given beneath his
signature hereto or at such other address as the Grantee may hereafter designate
in writing to the Company. Any such notice shall be deemed duly given when
actually delivered by hand, facsimile, certified or registered mail or
recognized overnight courier.

11. Laws Applicable to Construction. This Agreement has been executed and
delivered by the Company in the State of Florida, and this Agreement shall be
construed and enforced in accordance with the laws of said State.

IN WITNESS WHEREOF, the Company has granted this Option on December 8, 2011.

Imaging Diagnostic Systems, Inc.
                                                                    ACCEPTED:

By:       /s/ Linda B.
Grable                                                                           By:  /s/
Michael Addley
LINDA B. GRABLE                                          
                                   MICHAEL ADDLEY
Chief Executive
Officer                                                                           Chief
Operating Officer

 
 

 
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