Document:

exhibit10-75.htm

     

    
      EXHIBIT
        10.75

      

      EMPLOYMENT
        AGREEMENT

      

      THIS
        EMPLOYMENT AGREEMENT is dated as of August 30, 2007, between
Imaging Diagnostic Systems, Inc., a Florida corporation (the
        "Company"), and Allan L. Schwartz (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 Executive Vice-President
        and
        Chief Financial Officer, charged with all the responsibilities and duties
        legally required by the State of Florida and to oversee various broad and
        specific aspects of its business; 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 August
        30, 2007, and ending one year from that date (the "Term"). All Company
        obligations under this Agreement shall cease upon its termination, except
        for
        those stock options which have been vested.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      (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 60 days from the date of such notice.  In the event
        of such termination without cause:

      

      (i)              For
        the remainder of the Term following the effective date of termination, the
        Company will continue to pay the Executive his salary pursuant to Section
        3(a).

      

      (ii)              The
        Company will continue to maintain for the remainder of the Term following
        the
        effective date of termination, for the benefit of the Executive, the employee
        benefit programs referred to in Section 3(b) as in effect on the date of
        termination.

      

      (iii)              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
        termination.

      

      (c)         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.

      

      (d)         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 through the end of
        the
        Term. (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.

      

      (e)         Special
        Termination.  In the event that (i) the Company materially
        breaches this Agreement or the performance of its duties and obligations
        hereunder; or (ii) any entity or person not now an executive officer of the
        Company becomes either individually or as part of a

      
        
          
          

        

        
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      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 continue to pay the Executive an annual base salary of $192,400
        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, except for the appropriate employee and spouse
        portion.

      

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

      

      (d)           The
        Executive shall receive an option to purchase up to an aggregate of 250,000
        shares of the Company’s common stock at an exercise price of $.058 per share
        pursuant to the Company’s standard form of stock option
        agreement.  The option shall vest one year from the date of this
        Agreement, provided that the Executive remains employed by the Company through
        that time, except to the extent that earlier vesting is provided under specified
        circumstances as set forth elsewhere in this Agreement or in the Company’s
        applicable form of stock option agreement.

      

       

      (e)           The
        Executive will be entitled to nine paid holidays and six 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.

      
        
          
          

        

        
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      4.           DUTIES.

      

      (a)           General
        Duties.  The Executive shall be employed as the Executive
        Vice-President and Chief Financial Officer, with duties and responsibilities
        that are customary for such position, subject to the direction of the CEO
        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 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,

      
        
          
          

        

        
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      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 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.

      
        
          
          

        

        
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      (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 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.

      

      (b)           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.

      

      (a)           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

      
        
          
          

        

        
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      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.

      

      (b)           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.

      

      (a)           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.

      

      (b)           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

      
        
          
          

        

        
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      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.

      

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

      

      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.

      6531
        N.W.
        18th
        Court

      Plantation,
        Florida 33313

      

      To
        the
        Executive:                                 Allan
        L. Schwartz

      6531
        N.W.
        18th
        Court

      Plantation,
        Florida 33313

      

      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,

      
        
          
          

        

        
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      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.

      

      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 subject matter
        hereof.  Neither this Agreement nor any provision hereof may be
        changed, waived, discharged or terminated orally, except by a statement in
        writing signed by the party or parties against 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 30th day of August, 2007.

      

      
        	
                IMAGING
                  DIAGNOSTIC SYSTEMS, INC.

                 

                 

                By:
                  /s/ T. B. Hansen

                 

                     Tim
                  Hansen, Chief Executive Officer

              	
                EXECUTIVE

                 

                 

                /s/
                  Allan L. Schwartz

                 

                Allan
                  L. Schwartz

              

      

      

      
        
          
          

        

        
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      STOCK
        OPTION AGREEMENT

      (2007
        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 (the “Common Stock”) to provide the Grantee with an added
        incentive as an employee 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 offices) 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:  Allan
        L. Schwartz;

      

      (b)           Date
        of grant:  August 30, 2007;

      

      (c)           Number
        of shares optioned:  250,000;

      

      (d)           Option
        exercise price per share:  $.058;

      

      (e)           Expiration
        Date:  August 30, 2017;

      

      (f)           Plan:  The
        Company’s 2007 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 amount(s):

      

      
        	
                Vesting
                  Date

              	
                Number
                  of Shares

              
	
                August
                  30, 2008

              	
                250,000

              

      

      

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      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 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 after the earlier
        of
        (i) three years after such termination or (ii) the Expiration Date.

      

      (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 three years after
        the
        date of the Grantee’s death or on the expiration date of this Option, whichever
        date is sooner.

      

      (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 years 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 employ of the Company.

      

      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 the Option, as well as the exercise price per share of the 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 any class, shall affect, and no adjustment by reason thereof
        shall
        be made with respect to, the number or price of shares subject to the
        Option.

      

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      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 any such instance, declare that the Option
        shall terminate as of a date fixed by the Committee and give 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
        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 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
        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 Grantee complies
        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 exercise 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

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      procedure
        is utilized in connection with the exercise of the Option, payment of the
        exercise price for the purchased shares must accompany such notice.

      

      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 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.

      

      (v)           If
        none of clauses (i) – (iv) is applicable then the fair market value shall be
        determined by the Committee.

      

      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.

      

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      8.           Requirements
        of Law and of Stock Exchanges. By
        accepting this Option, the Grantee represents and agrees for himself and
        his
        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 a 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 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.           Conflict
        with Employment Agreement.  In the event
        that any provision of this Option Agreement is inconsistent with a provision
        of
        an employment agreement between the Grantee and the Company, the employment
        agreement provision shall govern and supersede the inconsistent provision
        of
        this Agreement.

      

      12.           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.

      

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, the Company has granted this Option on August 30,
        2007.

      

      
        	
                IMAGING
                  DIAGNOSTIC SYSTEMS, INC.

                 

                 

                /s/
                  T. B. Hansen

                 

                By:
                  Timothy B. Hansen, Chief Executive Officer

              	
                GRANTEE

                 

                 

                /s/
                  Allan L. Schwartz

                 

                Allan
                  L. Schwartz

              

      

      

      
 

       

       

       

       15exhibit10-76.htm

     

    
      EXHIBIT
        10.76

      

      EMPLOYMENT
        AGREEMENT

      

      THIS
        EMPLOYMENT AGREEMENT is dated as of August 30, 2007, between
Imaging Diagnostic Systems, Inc., a Florida corporation (the
        "Company"), and Deborah O’Brien (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 Senior Vice President,
        charged
        with all the responsibilities and duties legally required by the State of
        Florida and to oversee various broad and specific aspects of its business;
        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 conditions 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 September
        15, 2007, and ending one year from that date (the "Term"). All Company
        obligations under this Agreement shall cease upon its termination, except
        for
        those stock options which have been vested.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      (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 60 days from the date of such notice.  In the event
        of such termination without cause:

      

      (i)              For
        the remainder of the Term following the effective date of termination, the
        Company will continue to pay the Executive her salary pursuant to Section
        3(a).

      

      (ii)              The
        Company will continue to maintain for the remainder of the Term following
        the
        effective date of termination, for the benefit of the Executive, the employee
        benefit programs referred to in Section 3(b) as in effect on the date of
        termination.

      

      (iii)              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
        termination.

      

      (c)         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 her 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 her duties under section
        4.

      

      (d)         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 through the end of
        the
        Term. (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 her 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.

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      

      (e)         Special
        Termination.  In the event that (i) the Company materially
        breaches this Agreement or the performance of its duties and obligations
        hereunder; or (ii) any entity or person not now an executive officer of the
        Company becomes either individually or as part of a group the beneficial
        owner
        of 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 her 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 continue to pay the Executive an annual base salary of $138,000
        per
        annum in equal semi-monthly installments.

      

      (b)           During
        the term of her 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 her child, except for the appropriate employee and family
        portion.

      

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

      

      (d)           The
        Executive shall receive an option to purchase up to an aggregate of 250,000
        shares of the Company’s common stock at an exercise price of $___ per share
        pursuant to the Company’s standard form of stock option
        agreement.  The option shall vest one year from the date of this
        Agreement, provided that the Executive remains employed by the Company through
        that time, except to the extent that earlier vesting is provided under specified
        circumstances as set forth elsewhere in this Agreement or in the Company’s
        applicable form of stock option agreement.

      

       

      (e)           The
        Executive will be entitled to nine paid holidays and six weeks of vacation
        for
        each 12-month period without loss of compensation or other benefits to which
        she
        is entitled under this Agreement, to be taken at such times as the Executive
        may
        select and the affairs of the Company may permit.

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      4.           DUTIES.

      

      (a)           General
        Duties.  The Executive shall be employed as the Senior
        Vice-President, with duties and responsibilities that are customary for such
        position, subject to the direction of the CEO 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 her 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 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 her employment, she 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 her 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 her 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 her employment, provided that after
        the term of her employment these restrictions shall not apply to such
        secrets,

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      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 her or otherwise coming into her possession, and upon termination
        of her
        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 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 her 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 her 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 her 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.

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      

      (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 she is employed by the Company
        and for
        a period of 24 months immediately following the termination of such employment,
        she will not, directly or indirectly, in any manner whatsoever, on her 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 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.

      

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

      

      10.           INVENTIONS.

      

      (a)           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

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      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.

      

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

      

      11.           EQUITABLE
        RELIEF.

      

      (a)           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 her 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.

      

      (b)           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

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      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.

      

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

      

      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.

      6531
        N.W.
        18th
        Court

      Plantation,
        Florida 33313

      

      To
        the
        Executive:                                 Deborah
        O’Brien

      6531
        NW
        18th
        Court

      Plantation,
        Florida 33313

      

      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,

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      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 her/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.

      

      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 subject matter
        hereof.  Neither this Agreement nor any provision hereof may be
        changed, waived, discharged or terminated orally, except by a statement in
        writing signed by the party or parties against 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 30th day of August 30, 2007.

      

      
        	
                IMAGING
                  DIAGNOSTIC SYSTEMS, INC.

                 

                 

                By:
                  /s/ T. B. Hansen

                 

                     Tim
                  Hansen, Chief Executive Officer

              	
                EXECUTIVE

                 

                 

                /s/
                  Deborah O’Brien

                 

                Deborah
                  O’Brien

                 

                 

                 

                 

              

      

      

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      STOCK
        OPTION AGREEMENT

      (2007
        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 (the “Common Stock”) to provide the Grantee with an added
        incentive as an employee 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 offices) 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:  Deborah
        O’Brien;

      

      (b)           Date
        of grant:  September 15, 2007;

      

      (c)           Number
        of shares optioned:  250,000;

      

      (d)           Option
        exercise price per share:  $____

      

      (e)           Expiration
        Date:  September 15, 2017;

      

      (f)           Plan:  The
        Company’s 2007 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 amount(s):

      

      
        	
                Vesting
                  Date

              	
                Number
                  of Shares

              
	
                September
                  15, 2008

              	
                250,000

              

      

      

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      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 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 after the earlier
        of
        (i) three years after such termination or (ii) the Expiration Date.

      

      (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 her death,
        and
        such right shall expire and this Option shall terminate three years after
        the
        date of the Grantee’s death or on the expiration date of this Option, whichever
        date is sooner.

      

      (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 years 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 employ of the Company.

      

      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 her 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 the Option, as well as the exercise price per share of the 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 any class, shall affect, and no adjustment by reason thereof
        shall
        be made with respect to, the number or price of shares subject to the
        Option.

      

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      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 any such instance, declare that the Option
        shall terminate as of a date fixed by the Committee and give Grantee the
        right
        to exercise her 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 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 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
        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 Grantee complies
        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 exercise 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

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      procedure
        is utilized in connection with the exercise of the Option, payment of the
        exercise price for the purchased shares must accompany such notice.

      

      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 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.

      

      (v)           If
        none of clauses (i) – (iv) is applicable then the fair market value shall be
        determined by the Committee.

      

      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.

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      

      8.           Requirements
        of Law and of Stock Exchanges. By
        accepting this Option, the Grantee represents and agrees for herself and
        her
        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 her 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 her personal account
        and
        not with a 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 her consent, of this Option or any of her 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 her at the address given beneath her 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.           Conflict
        with Employment Agreement.  In the event
        that any provision of this Option Agreement is inconsistent with a provision
        of
        an employment agreement between the Grantee and the Company, the employment
        agreement provision shall govern and supersede the inconsistent provision
        of
        this Agreement.

      

      12.           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.

      

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, the Company has granted this Option on September 15,
        2007.

      

      
        	
                IMAGING
                  DIAGNOSTIC SYSTEMS, INC.

                 

                 

                /s/
                  T. B. Hansen

                 

                By:
                  Timothy B. Hansen, Chief Executive Officer

              	
                GRANTEE

                 

                 

                /s/
                  Deborah O’Brien

                 

                Deborah
                  O’Brien

              

      

      

      

      

      

      

      

      

      
 
15

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