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Contract of Employment for Chief Executive Officer - Z/I Imaging Corp. and Lewis N. Graham Jr.


EXECUTIVE OFFICER (the "Agreement") is made and entered  into  to
be  effective  as  of the 6th day of FEBRUARY,  2001,  by  and
between  Z/I  Imaging  Corporation, a Delaware  corporation  (the
"Company"), and Lewis N. Graham, Jr. (the "Executive").


      WHEREAS, the Executive is currently employed by the Company
pursuant to the terms of that certain Contract of Employment  for
Chief Executive Officer effective as of October 1, 1999; and

      WHEREAS,  the Company and the Executive desire to  continue
that  employment relationship and to amend and restate the  terms
and conditions of such employment;

      NOW, THEREFORE, in consideration of the premises hereof and
of  the  mutual  promises and agreements  contained  herein,  the
parties  hereto, intending to be legally bound, hereby  agree  as

     1.    Employment and Term of Employment.  The Company hereby
agrees  to employ the Executive, and the Executive hereby  agrees
to  serve  the  Company, on the terms and  conditions  set  forth
herein  for the period commencing as of the date set forth  above
and  expiring on September 30, 2002, provided that this Agreement
shall  be  automatically  renewed for additional  one-year  terms
unless either party gives written notice to the contrary at least
six  (6) months prior to expiration of the initial or any renewal
term of this Agreement.

     2.   Positions and Duties.  The Executive shall serve, in name
and  in fact, as Chief Executive Officer of the Company and shall
have  such  powers and duties as are customarily associated  with
such  position.  In addition, if requested and properly  elected,
Executive  shall serve on the Company's Board of Directors.   The
Executive  shall  devote substantially all his working  time  and
efforts to the business and affairs of the Company, shall use his
best  efforts  to advance the best interests of the Company,  and
shall  not  engage in outside business activities which interfere
with the performance of his duties hereunder.

     3.   Representations and Warranties.  The Executive represents
and  warrants that the Executive is under no contractual or other
restrictions  or  obligations that will significantly  limit  the
Executive's  activities on behalf of the Company or  prohibit  or
limit  the  disclosure or use by the Executive of any information
which directly or indirectly relates to the nature of the Company
or  the  services  to  be rendered by the  Executive  under  this

     4.   Compensation.

          (a)  Base Salary.  Until October 1, 2001, the Executive shall
receive  a  base  salary at the rate of U.S. $225,000  per  annum
during  the  term  of  this  Agreement (as  adjusted,  the  "Base
Salary"), payable in substantially equal periodic payments, which
shall  be made no less frequently than monthly during the  period
of  the Executive's employment hereunder. Beginning on October 1,
2001  and  each  subsequent October 1 during  the  term  of  this
Agreement,  the  Company shall conduct a salary  and  performance
review  and shall pay to the Executive the Base Salary determined
by  the  Board  of  Directors.  Notwithstanding anything  to  the
contrary  in this Section 4(a), Executive's Base Salary shall  be
at  least  U.S.  $225,000  per annum  during  the  term  of  this

          (b)  Incentive Compensation.  In addition to Base Salary, the
Executive shall be entitled to receive incentive compensation  as
determined   by   the   Board   of  Directors   (the   "Incentive
Compensation"), whether such Incentive Compensation is  generally
available  to employees of the Company or specifically  available
to Executive.

          (c)  Expenses.  During the term of his employment hereunder, the
Executive shall be entitled to be reimbursed (in accordance  with
the policies and procedures established by the Board of Directors
for Company officers) for all reasonable expenses incurred by him
in  performing  services hereunder, provided that  the  Executive
properly accounts therefor in accordance with Company policy.

          (d)  Benefits.  During the term of his employment hereunder, the
Company  shall provide the Executive with the same benefits  that
it  provides generally to its other employees, including but  not
limited to medical, pension, vacation, bonus, profit-sharing  and
savings plans and similar benefits as such plans and benefits may
be adopted by the Company from time to time.

          (e)  Insurance.  In addition to life insurance made available to
all  employees of the Company, the Company shall, at its expense,
maintain  life  insurance payable to the  Executive's  designated
beneficiary in an amount equal to U.S. $1 million.

          (f)  Car Allowance.  During the term of the Executive's
employment  hereunder,  the Company shall  pay  the  Executive  a
vehicle allowance equal to U.S. $600 per month.
     5.   Indemnification and Insurance.  The Company shall indemnify
the Executive with respect to matters relating to the Executive's
services as an officer and/or director of the Company or  any  of
its  Affiliates (as hereinafter defined) to the extent set  forth
in  the  Company's Bylaws as amended from time  to  time  and  in
accordance with the terms of any other indemnification  which  is
generally applicable to executive officers of the Company or  any
of its Affiliates that may be provided by the Company or any such
Affiliate   from  time  to  time.  The  foregoing  indemnity   is
contractual and will survive any adverse amendment to  or  repeal
of the Bylaws. The Company shall also cover the Executive under a
policy  of officers' and directors' liability insurance providing
coverage that is comparable to that provided now or hereafter  to
any  other  executive  officer or director of  the  Company.  The
provisions of this Section 5 shall survive the termination of the
Executive's  employment  for any reason  and  the  term  of  this
Agreement.  "Affiliate" means, with respect to the Company,  each
individual, corporation, trust, partnership, limited partnership,
association,  limited liability company, joint stock  association
or  other  legal entity which controls, is controlled by,  or  is
under common control with the Company.

     6.   Offices.  In addition to serving as Chief Executive Officer
of  the Company, the Executive agrees to serve without additional
compensation,  if elected or appointed thereto, in  one  or  more
offices or as a director of any of the Company's subsidiaries  or

     7.   Termination.

          (a)  Disability.  If, as a result of the Executive's incapacity
due  to physical or mental illness, the Executive shall have been
absent  from his duties hereunder on a full time basis for ninety
(90)  consecutive days, the Company may terminate its obligations
hereunder,  except for those obligations provided for in  Section
8(a)  hereof.  The  determination of  whether  the  Executive  is
disabled  due to physical or mental illness shall be  made  by  a
licensed  physician  satisfactory to the  Executive  and  to  the

          (b)  Termination Upon Death.  If the Executive should die during
the  term of this Agreement, the Company's obligations under this
Agreement shall cease, except for those obligations set forth  in
Section  8(a)  hereof, and the Executive's  employment  shall  be

          (c)  Termination by the Company.  The Company may terminate the
Executive's employment hereunder at any time for Cause or for any
other  reason.  For the purposes of this Agreement, "Cause" shall
mean:   (i) Executive's willful, intentional or grossly negligent
failure to perform his duties under this Agreement diligently and
in accordance with the directions of the Board of Directors; (ii)
admission  or  final  conviction of  (or  plea  of  guilty,  nolo
contendere  or  similar  effect to) Executive  of  a  misdemeanor
materially  adversely affecting the Company  or  of  any  felony;
(iii)  Executive's  commission of an act  of  fraud  against,  or
Executive's  material misappropriation of property belonging  to,
the  Company;  or  (iv) any material breach by Executive  of  any
provision  of  this Agreement that is not remedied  by  Executive
within 30 days of Executive's receipt of written notice from  the
Company,  which  notice  shall include a  detailed  and  specific
description of the alleged material breach or breaches.

          (d)  Notice of Termination.  Any termination by the Company
pursuant  to  this  Section 7 shall be  communicated  by  written
notice of termination to the other party hereto.

          (e)  Resignation as Director.  If Executive's employment with the
Company  is  terminated for any reason, and at the time  of  such
termination  Executive  is  serving on  the  Company's  Board  of
Directors,  Executive shall resign his position on the  Company's
Board of Directors effective no later than the effective date  of
the  termination  of  Executive's employment  with  the  Company;
provided, that Executive's obligation to resign as set  forth  in
this Section 7(e) shall be conditioned upon the Company's payment
to  Executive  of  all  applicable payments  and  other  benefits
arising from such termination as required by this Agreement.

     8.   Compensation Upon Termination or During Disability.

          (a)   If the Executive's employment is terminated as  a
result  of  disability under Section 7(a),  the  Executive  shall
receive  an  amount which, when added to any disability  benefits
provided  for  by the Company, equals his Base Salary  until  the
twelve  (12)  month  anniversary  of  the  termination.  If   the
Executive's  employment  shall  be  terminated  because  of   the
Executive's  death,  the  Company shall pay  to  the  Executive's
estate, in a single lump sum, an amount equal to the Base  Salary
payable through the six (6) month anniversary of the termination.
          (b)  If the Executive's employment shall be terminated for Cause
or  if  the Executive voluntarily terminates his employment,  the
Company  shall  pay the Executive his Base Salary earned  through
the  date  on  which his employment is terminated.   The  Company
shall  then  have  no further obligations to the Executive  under
this Agreement.

          (c)  If the Company shall terminate the Executive's employment
under  this Agreement pursuant to Section 7(c) hereof other  than
for  Cause,  then  the  Company  shall  pay  the  Executive,   as
liquidated damages or severance or both, his Base Salary  payable
in  substantially equal periodic payments no less frequently than
monthly for the longer of (i) a period ending on the twelve  (12)
month anniversary of the termination, or (ii) a period ending  on
the  natural  expiration date of the then-current  term  (without
giving effect to automatic renewal terms) of this Agreement.

     9.   Change in Control.

          (a)  In the event:

               (i)  a Change in Control (as defined below) occurs
     during the term of this Agreement and prior to the earlier
     to occur of the first anniversary of the Change in Control
     or the expiration of the then-current term of this
     Agreement, (A) the Executive is terminated by the Company
     pursuant to Section 7(c), but not for Cause, or (B) the
     Executive terminates, or gives notice of termination, for
     Good Reason (as defined below); or
               (ii) prior to the effectiveness of a firm
     commitment underwritten public offering pursuant to a
     registration statement under the Securities Act of 1933, as
     amended, covering the offer and sale of the Company's common
     stock for the account of the Company in which the aggregate
     price to the public for shares sold by the Company equals or
     exceeds $10,000,000, Executive's service as a director of
     the Company terminates for any reason other than for Cause
     or Executive's death, disability or resignation;

then, in lieu of any payment and benefits payable pursuant to
Section 8 above, Executive shall be entitled to payment and
benefits as set forth in Section 9(b) below.

          (b)  If payment and benefits are required under Section
9(a) above, the Company shall:

               (i)  pay to the Executive as severance pay, in one
     lump sum, in cash, no later than the tenth day following
     termination, an amount equal to 3 times the Base Salary then
     in effect; and
               (ii) to the extent that Executive is eligible to,
     and timely elects to, receive continuation coverage under
     any group health plan providing coverage which is subject to
     the provisions of the Consolidated Omnibus Budget
     Reconciliation Act of 1985, as amended, and the regulations
     promulgated thereunder ("COBRA"), the Company shall timely
     reimburse Executive to the extent permitted by law for any
     premiums required for such COBRA coverage subject to the
     limitations set forth in this Section 9(b)(ii).  The
     Company's obligation to reimburse Executive shall expire
     upon the earlier to occur of (A) the date which is 18 months
     after the date Executive's employment is terminated, or (B)
     the date that Executive becomes an employee of another
     company providing Executive with coverage substantially
     similar to that provided to Executive by the Company
     immediately prior to the termination of Executive's
     employment.  Notwithstanding anything to the contrary in
     this Section 9(b)(ii), the payment of premiums by the
     Company is not intended to alter in any way the provisions
     of any group health plan of the Company, and all time
     limits, effects of subsequent coverage and all other
     relevant provisions of any such plan remain unchanged and
     shall control Executive's entitlement to coverage or
     benefits under such plan.

          (c)  As used herein, a "Change in Control" means the
happening of any of the following:

               (i)  any person or entity, including a "group" as
     defined in Section 13(d)(3) of the Securities Exchange Act
     of 1934, as amended, other than the Company or a wholly-
     owned subsidiary thereof, any employee benefit plan of the
     Company or any of its subsidiaries, becomes the beneficial
     owner of the Company's securities having 50% or more of the
     combined voting power of the then outstanding securities of
     the Company that may be cast for the election of directors
     of the Company (other than as a result of an issuance of
     securities initiated by the Company in the ordinary course
     of business); or

               (ii) as the result of, or in connection with, any
     cash tender or exchange offer, merger or other business
     combination, sales of assets or contested election, or any
     combination of the foregoing transactions, less than a
     majority of the combined voting power of the then
     outstanding securities of the Company or any successor
     corporation or entity entitled to vote generally in the
     election of the directors of the Company or such other
     corporation or entity after such transaction are held in the
     aggregate by the holders of the Company's securities
     entitled to vote generally in the election of directors of
     the Company immediately prior to such transaction; or

               (iii)     during any period of two consecutive
     years, individuals who at the beginning of any such period
     constitute the Board of Directors of the Company cease for
     any reason to constitute at least a majority thereof, unless
     the election, or the nomination for election by the
     Company's stockholders, of each director of the Company
     first elected during such period was approved by a vote of
     at least two-thirds of the directors of the Company then
     still in office who were directors of the Company at the
     beginning of any such period.

          (d)   For purposes of this Agreement, "Good Reason"
shall mean the occurrence of any of the following events without
the Executive's express written consent:

               (i)  the assignment to the Executive by the
     Company of duties inconsistent with the Executive's
     position, duties, responsibilities and status with the
     Company immediately prior to a Change in Control, or a
     change in the Executive's titles or offices as in effect
     immediately prior to a Change in Control, or any removal of
     the Executive from or any failure to reelect the Executive
     to any of such positions; provided, that any such event that
     occurs in connection with the termination of employment for
     disability, for retirement, for Cause, as a result of the
     Executive's death, or by the Executive other than for Good
     Reason, shall not fall within the purview of this Section

               (ii) a reduction by the Company in the Executive's
     Base Salary as in effect on the date hereof or as the same
     may be increased from time to time during the term of this

               (iii)     a relocation of the Company's principal
     executive offices to a location outside of Huntsville,
     Alabama, or the Executive's relocation, as required by the
     Company, to any place other than the location at which the
     Executive performed the Executive's duties prior to a Change
     in Control, except for required travel by the Executive on
     the Company's business to an extent substantially consistent
     with the Executive's business travel obligations at the time
     of a Change in Control;

               (iv) any material breach by the Company of any
     provision of this Agreement; or

               (v)  any failure by the Company to obtain the assumption of this
     Agreement by any successor or assign of the Company.

     10.  Binding Agreement.  This Agreement and all obligations of
the  Company  hereunder shall be binding upon the successors  and
assigns  of  the Company.  This Agreement and all rights  of  the
Executive  hereunder  shall  inure  to  the  benefit  of  and  be
enforceable by the Executive's personal or legal representatives,
executors,   administrators,  successors,  heirs,   distributees,
devisees, and legatees.

     11.  Notice.  For the purposes of this Agreement, notices and all
other  communications provided for in the Agreement shall  be  in
writing  and  shall  be  deemed to  have  been  duly  given  when
delivered  or  mailed  by United States registered  mail,  return
receipt requested, postage prepaid, addressed as follows:

     If to the Executive:

          Lewis N. Graham, Jr.
          104 Marquise Way
          Madison, Alabama 35758

     If to the Company:

          Z/I Imaging Corporation
          301 Cochran Road, Suite 9
          Huntsville, Alabama 35824
          Attn: Corporate Secretary

or  to such other address as any party may have furnished to  the
other  in writing in accordance herewith, except that notices  of
change of address shall be effective only upon receipt.
     12.  Withholding of Taxes.  The Company may withhold from any
amounts  payable under this Agreement all federal,  state,  city,
and  other  taxes as shall be required pursuant  to  any  law  or
government regulation or ruling.
     13.   Enforcement of Agreement.  The Company  shall  pay  or
reimburse  the  Executive for all costs and  expenses  (including
court  costs  and  reasonable attorney's fees)  incurred  by  the
Executive  in connection with any litigation seeking  to  enforce
the  Executive's rights under this Agreement, provided  that  the
Executive is substantially successful in such litigation.

     14.  Governing Law.  This Agreement shall be construed according
to  the  laws of Alabama, without giving effect to the principles
of conflicts of laws of such state.

     15.  Amendment; Modification; Waiver.  This Agreement may be
amended only by the written agreement of the parties hereto.   No
provisions  of  this  Agreement  may  be  modified,  waived,   or
discharged  unless  such waiver, modification,  or  discharge  is
agreed  to  in writing signed by Executive and the  Company.   No
waiver  by either party hereto at any time of any breach  by  the
other  party hereto or compliance with any condition or provision
of  this  Agreement to be performed by such other party shall  be
deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time.

     16.  Binding Effect.

          (a)  This Agreement is personal in nature and neither of the
parties  hereto shall, without the consent of the other,  assign,
transfer, or delegate this Agreement or any rights or obligations
hereunder  except  as  expressly provided  for  herein.   Without
limiting  the generality of the foregoing, Executive's  right  to
receive payments hereunder shall not be assignable, transferable,
or  delegable, whether by pledge, creation of a security interest
or otherwise, other than by a transfer by his will or by the laws
of  descent  and distribution and, in the event of any  attempted
assignment  or transfer contrary to this paragraph,  the  Company
shall  have  no  liability to pay any amount so attempted  to  be
assigned, transferred, or delegated.

          (b)  The Company and Executive recognize that each party will
have no adequate remedy at law for breach by the other of any  of
the  agreements contained herein and, in the event  of  any  such
breach,  the Company and Executive hereby agree and consent  that
the  other shall be entitled to a decree of specific performance,
mandamus,  or other appropriate remedy to enforce performance  of
this Agreement.

     17.  Entire Contract.  This Agreement constitutes the entire
agreement  and  supersedes  all other prior  and  contemporaneous
agreements, employment contracts and understandings, both written
and  oral, express or implied with respect to the subject  matter
of this Agreement, including the Contract of Employment for Chief
Executive   Officer  effective  October  1,  1999,  between   the
Executive and the Company.

     IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
                              Z/I IMAGING CORPORATION
                              By:    /s/ J. W. Meadlock
                              Name:  JIM MEADLOCK
                              Title: CHAIRMAN

                               /S/ Lewis N. Graham Jr.
                              Lewis N. Graham, Jr.

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