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Exhibit 10.14
 
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED WITH THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY.

 

  September ___, 2007   _____________  shares          Warrant No. T1-____

 
 
HEALTH DISCOVERY CORPORATION
STOCK PURCHASE WARRANT
 
THIS IS TO CERTIFY THAT _____________________ (the “Holder”), or its permitted
assigns, is entitled, at any time prior to the Expiration Date (as hereinafter
defined), to purchase from HEALTH DISCOVERY CORPORATION, a Georgia corporation
(the “Company”) (the Company and the Holder are hereinafter referred to
collectively as the “Parties” and individually as a “Party”), ____________
shares of Common Stock (as hereinafter defined and subject to adjustment as
provided herein) at a purchase price of $0.__ per share (as adjusted as provided
herein, the “Current Warrant Price”), on the terms and conditions and pursuant
to the provisions hereinafter set forth.
 
1.             DEFINITIONS
 
As used in this Warrant, the following terms have the respective meanings set
forth below:
 
“Additional Shares of Common Stock” shall mean all shares of Common Stock issued
by the Company after the Closing, other than Warrant Stock.
 
“Business Day” shall mean any day that is not a Saturday or Sunday or a day on
which banks are required or permitted to be closed in the State of New York.
 
“Closing Date” shall have the meaning set forth in the Purchase Agreement.
 
“Commission” shall mean the Securities and Exchange Commission or any other
federal agency then administering the Securities Act and other federal
securities laws.
 
“Common Stock” shall mean (except where the context otherwise indicates) the
common stock, no par value, of the Company as constituted on the Closing Date,
and any capital stock into which such Common Stock may thereafter be changed,
and shall also include (i) capital stock of the Company of any other class
(regardless of how denominated) issued to the holders of shares of Common Stock
upon any reclassification thereof which is also not preferred as to dividends or
assets over any other class of stock of the Company and which is not subject to
redemption, and (ii) shares of common stock of any successor or acquiring
corporation (as defined in Section 4.4) received by or distributed to the
holders of Common Stock of the Company in the circumstances contemplated by
Section 4.4.
 

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“Convertible Securities” shall mean evidences of indebtedness, shares of stock
or other securities which are convertible into or exchangeable, with or without
payment of additional consideration in cash or property, for Additional Shares
of Common Stock, either immediately or upon the occurrence of a specified date
or a specified event.
 
“Current Market Price” shall mean, in respect of any share of Common Stock on
any date herein specified (i) the average of the last reported closing bid and
asked prices on such day on the Over-the-Counter Bulletin Board (“OTCBB”), (ii)
if not listed on the OTCBB, the closing sales price on such day on the principal
stock exchange or quotation system on which such Common Stock is listed or
admitted to trading, (iii) if no sale takes place on such day on the OTCBB or
any such exchange, the average of the last reported closing bid and asked prices
on such day in the over-the-counter market, or the closing sales price on such
day on any such exchange or quotation system on which the Common Stock is listed
or admitted for trading, or (iv) if the Common Stock is not listed or admitted
for trading on in the over-the-counter market or any exchange, then as
reasonably determined by the Board of Directors of the Company.
 
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, or
any similar Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to time.
 
“Exercise Period” shall mean the period during which this Warrant is exercisable
pursuant to Section 2.1.
 
“Expiration Date” shall mean September __, 2010.
 
“Original Face Amount” shall mean the number of Warrant Shares (as adjusted from
time to time pursuant to Section 4) subject to this Warrant on the original
issue date.
 
“Outstanding” shall mean, when used with reference to Common Stock, at any date
as of which the number of shares thereof is to be determined, all issued shares
of Common Stock, except shares then owned or held by or for the account of the
Company or any subsidiary thereof.
 
“Person” shall mean any individual, sole proprietorship, partnership, limited
liability company, joint venture, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, entity or
government (whether federal, state, county, city, municipal or otherwise,
including, without limitation, any instrumentality, division, agency, body or
department thereof).
 
“Purchase Agreement” shall mean the Securities Purchase Agreement dated as of
the date hereof by and between the Company and the Holder.
 
 “Securities Act” shall mean the Securities Act of 1933, as amended, or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
 
“Trading Day(s)” shall mean any day on which the primary market on which such
shares of Common Stock are listed is open for trading.
 
“Warrants” shall mean this Warrant and all warrants issued upon transfer,
division or combination of, or in substitution for, any thereof.  All Warrants
shall at all times be identical as to terms and conditions and date, except as
to the number of shares of Common Stock for which they may be exercised.
 
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“Warrant Price” shall mean an amount equal to (i) the number of shares of Common
Stock being purchased upon exercise of this Warrant pursuant to Section 2.1,
multiplied by (ii) the Current Warrant Price as of the date of such exercise.
 
“Warrant Shares” shall mean the shares of Common Stock issuable upon exercise of
this Warrant.
 
“Warrant Stock” shall mean the shares of Common Stock purchased by the holders
of the Warrants upon the exercise thereof.

 
2.      EXERCISE OF WARRANT

 
             2.1.         Manner of Exercise.  (a) From and after the Closing
Date and until 6:30 P.M., New York time, on the Expiration Date, the Holder may
exercise this Warrant, for all or any part of the number of shares of Common
Stock purchasable hereunder.
 
(b)  In order to exercise this Warrant, in whole or in part, the Holder shall
deliver to the Company at its office at 2 East Bryan Street, Suite #601,
Savannah, GA 31401, or at the office or agency designated by the Company
pursuant to Section 15, (i) a written notice of the Holder’s election to
exercise this Warrant, (ii) a sum equal to the Current Warrant Price therefore
in cash or by certified check or cashier’s check or by wire transfer to an
account designed by the Company, and (iii) this Warrant.  Such notice shall be
substantially in the form of the subscription form appearing at the end of this
Warrant as Exhibit A, duly executed by the Holder or its agent or
attorney.  Upon receipt thereof, the Company shall, as promptly as practicable,
and in any event within five (5) Business Days thereafter, issue or cause to be
issued and deliver or cause to be delivered to the Holder a certificate or
certificates representing the aggregate number of full shares of Common Stock
issuable upon such exercise, together with cash in lieu of any fraction of a
share, as hereinafter provided.  The stock certificate or certificates so
delivered shall be, to the extent possible, in such denomination or
denominations as such Holder shall request in the notice and shall be registered
in the name of the Holder or, subject to Section 8, such other name as shall be
designated in the notice.  This Warrant shall be deemed to have been exercised
and such certificate or certificates shall be deemed to have been issued, and
the Holder or any other Person so designated to be named therein shall be deemed
to have become a holder of record of such shares for all purposes, as of the
date the notice, together with the cash or check or checks and this Warrant, is
received by the Company as described above and all taxes required to be paid by
the Holder, if any, pursuant to Section 2.2 prior to the issuance of such shares
have been paid (such date, the “Date of Exercise”).  Notwithstanding any
provision herein to the contrary, the Company shall not be required to register
shares in the name of any Person who acquired this Warrant (or part hereof) or
any Warrant Stock otherwise than in accordance with this Warrant. If the Company
fails to deliver to the Holder the required Warrant Stock in accordance with and
pursuant to this Section by the fifth Trading Day after the Date of Exercise,
then the Holder will have the right to rescind such exercise.
 
(c)  The Company’s obligations to issue and deliver Warrant Stock in accordance
with the terms hereof are absolute and unconditional, irrespective of any action
or inaction by the Holder to enforce the same, any waiver or consent with
respect to any provision hereof, the recovery of any judgment against any Person
or any action to enforce the same, or any setoff, counterclaim, recoupment,
limitation or termination, or any breach or alleged breach by the Holder or any
other Person of any obligation to the Company or any violation or alleged
violation of law by the Holder or any other Person, and irrespective of any
other circumstance which might otherwise limit such obligation of the Company to
the Holder in connection with the issuance of Warrant Stock.
 
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(d)  Payment of the Warrant Price shall be made at the option of the Holder by
(i) wire transfer to an account designated by the Company, (ii) certified or
official bank check, or (iii) any combination thereof, duly endorsed by or
accompanied by appropriate instruments of transfer duly executed by the Holder
or by the Holder’s attorney duly authorized in writing.
 
2.2.           Payment of Taxes.  All shares of Common Stock issuable upon the
exercise of this Warrant pursuant to the terms hereof shall be validly issued,
fully paid and nonassessable and without any preemptive rights.  The Company
shall pay all expenses in connection with, and all taxes and other governmental
charges that may be imposed with respect to, the issue or delivery thereof,
unless such tax or charge is imposed by law upon the Holder, in which case such
taxes or charges shall be paid by the Holder.  The Holder or its transferee
shall pay any transfer tax due and payable in respect of a transfer of this
Warrant or the Warrant Stock to a party other than the Holder.
 
2.3.           Fractional Shares.  The Company shall not be required to issue a
fractional share of Common Stock upon the exercise of this Warrant.  As to any
fraction of a share which the Holder of one or more Warrants, the rights under
which are exercised in the same transaction, would otherwise be entitled to
purchase upon such exercise, the Company shall pay a cash adjustment in respect
of such final fraction in an amount equal to the same fraction of (x) the
Current Market Price per share of Common Stock on the Date of Exercise, so long
as there continues to be a public market for the Common Stock, or (y) in the
event there is no public market for the Common Stock, the fair market value
thereof as reasonably determined by the Board of Directors of the Company.
 
3.             TRANSFER; DIVISION AND COMBINATION
 
3.1.           Transfer.  Subject to compliance with Section 10, transfer of
this Warrant and all rights hereunder, in whole or in part, shall be registered
on the books of the Company to be maintained for such purpose, upon surrender of
this Warrant at the principal office of the Company specified in Section 2.1 or
the office or agency designated by the Company pursuant to Section 15, together
with a written assignment of this Warrant substantially in the form of Exhibit B
hereto duly executed by the Holder or its agent or attorney.  Upon such
surrender, the Company shall, subject to Section 8, execute and deliver a new
Warrant or Warrants in the name of the assignee or assignees and in the
denomination specified in such instrument of assignment, and shall issue to the
assignor a new Warrant evidencing the portion of this Warrant not so assigned,
and this Warrant shall promptly be cancelled.  A Warrant, if properly assigned
in compliance with Section 8, may be exercised by a new Holder for the purchase
of shares of Common Stock without having a new Warrant issued.
 
3.2.           Division and Combination.  Subject to Section 8, this Warrant may
be divided or combined with other Warrants upon presentation hereof at the
aforesaid office or agency of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by the Holder or its agent or attorney.  Subject to compliance with
Section 3.1 and with Section 8, as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in
accordance with such notice.
 
3.3.           Expenses.  The Company shall prepare, issue and deliver at its
own expense the new Warrant or Warrants to be delivered under this Section 3.
 
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3.4.           Maintenance of Books.  The Company agrees to maintain, at its
aforesaid office or agency, books for the registration and the registration of
transfer of the Warrants.
 
4.             ADJUSTMENTS
 
The number of shares of Common Stock for which this Warrant is exercisable, or
the price at which such shares may be purchased upon exercise of this Warrant,
shall be subject to adjustment from time to time as set forth in this Section
4.  The Company shall give each Holder notice of any event described below which
requires an adjustment pursuant to this Section 4 at the time of such event.
 
4.1.           Capital Adjustments.
 
The number of shares of Warrant Stock and the Current Warrant Price shall be
deemed automatically adjusted equitably and proportionately to reflect any stock
dividend, stock split, reverse stock dividend or reverse stock split, or any
capital reorganization or recapitalization of the Company, or any similar event
affecting the Common Stock.
 
Subsequent Rights Offerings.  If the Company, at any time while the Warrant is
outstanding, shall issue rights, options or warrants to all holders of Common
Stock (and not to Holders based on their Warrant Shares) entitling them to
subscribe for or purchase shares of Common Stock at a price per share less than
the Current Market Price at the record date mentioned below, then the Current
Warrant Price shall be multiplied by a fraction, of which the denominator shall
be the number of shares of the Common Stock outstanding on the date of issuance
of such rights or warrants plus the number of additional shares of Common Stock
offered for subscription or purchase, and of which the numerator shall be the
number of shares of the Common Stock outstanding on the date of issuance of such
rights or warrants plus the number of shares which the aggregate offering price
of the total number of shares so offered (assuming receipt by the Company in
full of all consideration payable upon exercise of such rights, options or
warrants) would purchase at such Current Market Price.  Such adjustment shall be
made whenever such rights, options or warrants are issued, and shall become
effective immediately after the record date for the determination of
stockholders entitled to receive such rights, options or warrants.
 
Pro Rata Distributions.  If the Company, at any time prior to the Termination
Date, shall distribute to all holders of Common Stock (and not to Holders of the
Warrants) evidences of its indebtedness or assets (including cash and cash
dividends) or rights or warrants to subscribe for or purchase any security other
than the Common Stock, then in each such case the Current Warrant Price shall be
adjusted by multiplying the Current Warrant Price in effect immediately prior to
the record date fixed for determination of stockholders entitled to receive such
distribution by a fraction of which the denominator shall be the Current Market
Price determined as of the record date mentioned above, and of which the
numerator shall be such Current Market Price on such record date less the then
per share fair market value at such record date of the portion of such assets or
evidence of indebtedness so distributed applicable to one outstanding share of
the Common Stock as determined by the Board of Directors in good faith.  In
either case the adjustments shall be described in a statement provided to the
Holder of the portion of assets or evidences of indebtedness so distributed or
such subscription rights applicable to one share of Common Stock.  Such
adjustment shall be made whenever any such distribution is made and shall become
effective immediately after the record date mentioned above.
 
4.2.           Other Provisions Applicable to Adjustments under this
Section.  The following provisions shall be applicable to the making of
adjustments of the number of shares of Common Stock for which this Warrant is
exercisable and the Current Warrant Price provided for in this Section 4:
 
 
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                                When Adjustments to Be Made.  The adjustments
required by this Section 4 shall be made whenever and as often as any specified
event requiring an adjustment shall occur, except that any adjustment of the
number of shares of Common Stock for which this Warrant is exercisable that
would otherwise be required may be postponed (except in the case of a
subdivision or combination of shares of Common Stock, as provided for in Section
4.1) up to, but not beyond the date of exercise if such adjustment either by
itself or with other adjustments not previously made adds or subtracts less than
1% of the shares of Common Stock for which this Warrant is exercisable
immediately prior to the making of such adjustment.  Any adjustment representing
a change of less than such minimum amount (except as aforesaid) which is
postponed shall be carried forward and made as soon as such adjustment, together
with other adjustments required by this Section 4 and not previously made, would
result in a minimum adjustment or on the date of exercise.  For the purpose of
any adjustment, any specified event shall be deemed to have occurred at the
close of business on the date of its occurrence.
 
Fractional Interests.  In computing adjustments under this Section 4, fractional
interests in Common Stock shall be taken into account to the nearest 1/10th of a
share.
 
When Adjustment Not Required.  If the Company shall take a record of the holders
of its Common Stock for the purpose of entitling them to receive a dividend or
distribution and shall, thereafter and before the distribution to stockholders
thereof, legally abandon its plan to pay or deliver such dividend or
distribution, then thereafter no adjustment shall be required by reason of the
taking of such record and any such adjustment previously made in respect thereof
shall be rescinded and annulled.
 
Escrow of Warrant Stock.  If after any property becomes distributable pursuant
to this Section 4 by reason of the taking of any record of the holders of Common
Stock, but prior to the occurrence of the event for which such record is taken,
and the Holder exercises this Warrant, any Additional Shares of Common Stock
issuable upon exercise by reason of such adjustment shall be deemed the last
shares of Common Stock for which this Warrant is exercised (notwithstanding any
other provision to the contrary herein) and such shares or other property shall
be held in escrow for the Holder by the Company to be issued to the Holder upon
and to the extent that the event actually takes place, upon payment of the then
Current Warrant Price.  Notwithstanding any other provision to the contrary
herein, if the event for which such record was taken fails to occur or is
rescinded, then such escrowed shares shall be cancelled by the Company and
escrowed property returned.
 
4.3.           Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets. If the Company shall reorganize its capital, reclassify
its capital stock, consolidate or merge with or into another corporation or
other business entity (where the Company is not the surviving corporation or
where there is a change in or distribution with respect to the Common Stock of
the Company), or sell, transfer or otherwise dispose of all or substantially all
its property, assets or business to another corporation or other business entity
(each a “Material Transaction”) and, pursuant to the terms of shares of common
stock of the successor or acquiring corporation, or any cash, shares of stock or
other securities or property of any nature whatsoever (including warrants or
other subscription or purchase rights) in addition to or in lieu of common stock
of the successor or acquiring corporation (“Other Property”), are to be received
by or distributed to the holders of Common Stock of the Company, then each
Holder shall have the right thereafter to receive, upon exercise of such
Warrant, the number of shares of common stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and Other
Property receivable upon or as a result of such Material Transaction by a holder
of the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event.  In case of any such Material Transaction, at
the Holder’s option and request, any successor to the Company or surviving
entity shall expressly assume the due and punctual observance and performance of
each and every covenant and condition of this Warrant to be performed and
observed by the Company and all the obligations and liabilities hereunder in
order to provide for adjustments of shares of Common Stock for which this
Warrant is exercisable which shall be as nearly equivalent as practicable to the
adjustments provided for in this Section 4 and issue to the Holder a new warrant
substantially in the form of this Warrant and consistent with the foregoing
provisions and evidencing the Holder’s right to purchase the Other Property for
the aggregate Current Market Price upon exercise thereof.  For purposes of this
Section 4.3, “common stock of the successor or acquiring corporation” shall
include stock of such corporation of any class which is not preferred as to
dividends or assets over any other class of stock of such corporation and which
is not subject to redemption and shall also include any evidences of
indebtedness, shares of stock or other securities which are convertible into or
exchangeable for any such stock, either immediately or upon the arrival of a
specified date or the happening of a specified event and any warrants or other
rights to subscribe for or purchase any such stock.  The foregoing provisions of
this Section 4.4 shall similarly apply to successive Material Transaction.
 
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5.             NOTICES TO WARRANT HOLDERS
 
5.1.           Notice of Adjustments. Whenever the number of shares of Common
Stock for which this Warrant is exercisable, or whenever the price at which a
share of such Common Stock may be purchased upon exercise of the Warrants, shall
be adjusted pursuant to Section 4, the Company shall forthwith prepare a
certificate to be executed by the chief executive officer or chief financial
officer of the Company setting forth, in reasonable detail, the event requiring
the adjustment and the method by which such adjustment was calculated,
specifying the number of shares of Common Stock for which this Warrant is
exercisable and (if such adjustment was made pursuant to Section 4.3) describing
the number and kind of any other shares of stock or Other Property for which
this Warrant is exercisable, and any change in the purchase price or prices
thereof, after giving effect to such adjustment or change.  The Company shall
promptly cause a signed copy of such certificate to be delivered to each Holder
in accordance with Section 15.2.  The Company shall keep at its office or agency
designated pursuant to Section 11 copies of all such certificates and cause the
same to be available for inspection at said office during normal business hours
by any Holder or any prospective purchaser of a Warrant designated by a Holder
thereof.
 
5.2.           Notice of Corporate Action. If at any time:
 
(a)           the Company shall take a record of the holders of its Common Stock
for the purpose of entitling them to receive a dividend (other than a cash
dividend payable out of earnings or earned surplus legally available for the
payment of dividends under the laws of the jurisdiction of incorporation of the
Company) or other distribution, or any right to subscribe for or purchase any
evidences of its indebtedness, any shares of stock of any class or any other
securities or property, or to receive any other right;
 
(b)           there shall be any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
consolidation or merger of the Company with, or any sale, transfer or other
disposition of all or substantially all the property, assets or business of the
Company to, another corporation; or
 
(c)           there shall be a voluntary or involuntary dissolution, liquidation
or winding up of the Company;
 
then, in any one or more of such cases, the Company shall give to the Holder (i)
at least ten (10) days’ prior written notice of the date on which a record date
shall be selected for such dividend, distribution or right or for determining
rights to vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up, and (ii) in the case of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up, at least ten (10) days’ prior written notice of the date when the same shall
take place.  Such notice in accordance with the foregoing clause also shall
specify
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(A) the date on which any such record is to be taken for the purpose of such
dividend, distribution or right, the date on which the holders of Common Stock
shall be entitled to any such dividend, distribution or right, and the amount
and character thereof, and (B) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up.  Each such written notice shall be sufficiently given if addressed to the
Holder and delivered in accordance with 15.2.
 
6.     RESERVATION AND AUTHORIZATION OF COMMON STOCK; REGISTRATION WITH OR
APPROVAL OF ANY GOVERNMENTAL AUTHORITY

6.1.           Reservation of Shares.  If Holder has notified the Company of its
intention to exercise the Warrant in accordance with Section 2.1(b) and the
Company does not have a sufficient number of shares available for issuance, (a)
the Warrant shall not expire and Holder shall be permitted to exercise the
Warrant as soon as sufficient shares are available for such exercise and (b) the
Company shall use its best efforts to enable the Company to issue the Warrant
Stock.  All shares of Common Stock issued upon exercise of this Warrant and
payment therefor in accordance with the terms of such Warrant shall be duly and
validly issued and fully paid and nonassessable, and not subject to preemptive
rights.
 
6.2.           Authorization.  Before taking any action which would result in an
adjustment in the number of shares of Common Stock for which this Warrant is
exercisable or in the Current Warrant Price, the Company shall obtain all such
authorizations or exemptions thereof, or consents thereto, as may be necessary
from any public regulatory body or bodies having jurisdiction thereof.
 

7.
TAKING OF RECORD; STOCK AND WARRANT TRANSFER BOOKS

 
In the case of all dividends or other distributions by the Company to the
holders of its Common Stock with respect to which any provision of Section 4
refers to the taking of a record of such holders, the Company will in each such
case take such a record and will take such record as of the close of business on
a Business Day.  The Company will not at any time, except upon dissolution,
liquidation or winding up of the Company, close its stock transfer books or
Warrant transfer books so as to result in preventing or delaying the exercise or
transfer of this Warrant.
 
8. 
RESTRICTIONS ON TRANSFERABILITY

 
        The Holder hereby acknowledges that neither this Warrant nor any of the
securities that may be acquired upon exercise of this Warrant have been
registered or qualified under the Securities Act or under the securities laws of
any state, and the Holder will not, directly or indirectly, offer, sell, pledge,
transfer, or otherwise dispose of (or solicit any offers to buy, purchase or
otherwise acquire or take a pledge of) the Warrant or the Warrant Stock except
in compliance with the Securities Act, applicable state securities laws and the
respective rules and regulations promulgated thereunder.  The Holder
acknowledges that, upon exercise of this Warrant, the securities to be issued
upon such exercise may be subject to applicable federal and state securities (or
other) laws requiring registration, qualification or approval of governmental
authorities before such securities may be validly issued or delivered upon
notice of such exercise.  The restrictions imposed by this Section 8 upon the
exercise of this Warrant shall cease and terminate as to any particular shares
of Warrant Stock (i) when such securities shall have been effectively registered
and qualified under the Securities Act and all applicable state securities laws
and disposed of in accordance with the registration statement covering such
securities, or (ii) when, in the reasonable opinion of counsel for the Company,
such restrictions are no longer required in order to ensure compliance with the
Securities Act and all applicable state securities laws.
 
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9. 
SUPPLYING INFORMATION

      
The Company shall cooperate with each Holder of a Warrant and each holder of
Warrant Common Stock in supplying such information as may be reasonably
necessary for such holder to complete and file any information reporting forms
presently or hereafter required by the Commission as a condition to the
availability of an exemption from the Securities Act for the sale of the Warrant
or Warrant Stock.
 
10.           LOSS OR MUTILATION
 
Upon receipt by the Company from any Holder of evidence reasonably satisfactory
to it of the ownership of and the loss, theft, destruction or mutilation of this
Warrant and indemnity reasonably satisfactory to it, and in case of mutilation
upon surrender and cancellation hereof, the Company will execute and deliver in
lieu hereof a new Warrant of like tenor to such Holder; provided, in the case of
mutilation, no indemnity shall be required if this Warrant in identifiable form
is surrendered to the Company for cancellation.
 
11.           OFFICE OF COMPANY
 
As long as any of the Warrants remain outstanding, the Company shall maintain an
office or agency (which may be the principal executive offices of the Company)
where the Warrants may be presented for exercise, registration of transfer,
division or combination as provided in this Warrant.
 
12.           FILINGS

So long as the Company has a class of equity securities registered pursuant to
the Exchange Act, the Company will file on or before the required date all
regular or periodic reports (pursuant to the Exchange Act) required to be filed
with the Commission pursuant to the Exchange Act and will deliver to the Holder
promptly upon their becoming available (unless such reports are available
through the Commission’s EDGAR system) one copy of each report, notice or proxy
statement sent by the Company to its stockholders generally, and of each regular
or periodic report (pursuant to the Exchange Act) and any registration statement
or prospectus (pursuant to the Securities Act), filed by the Company with (a)
the Commission or (b) any securities exchange on which shares of Common Stock
are listed.
 
13.           NO RIGHTS AS STOCKHOLDERS; LIMITATIONS OF LIABILITY

Except as otherwise provided herein, this Warrant shall not entitle the Holder
to any rights as a stockholder of the Company, including, without limitation,
the right to vote, to receive dividends and other distributions or to receive
notice of or attend meetings of stockholders or any other proceedings of the
Company unless and to the extent exercised for shares of Common Stock in
accordance with the terms hereof.  No provision hereof, in the absence of
affirmative action by the Holder to exercise its rights to purchase shares of
Common Stock hereunder, and no enumeration herein of the rights or privileges of
the Holder hereof, shall give rise to any liability of such Holder for the
purchase price of any Common Stock or as a stockholder of the Company, whether
such liability is asserted by the Company or by creditors of the Company.
 
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14.           COMPANY CALL RIGHT

If, at any time after the one year anniversary of the Closing Date and before
the Warrant expires or is exercised, (i) the Current Market Price, as reported
by the OTCBB, is at least $0.17 per share (subject to adjustment as set forth in
Section 4) for a period of thirty (30) consecutive calendar days, and (ii) the
registration statement required by the Securities Purchase Agreement and
covering the Warrant Shares is effective and then currently able to be used in
connection with the offer and sale of the Warrant Shares, then the Company shall
have the right to require the Holder to exercise or forfeit up to fifty percent
(50%) of the Original Face Amount less any portion of the Warrant which has
previously been exercised (the “Callable Amount”), as more particularly provided
in this Section 14.  If the Company is entitled to and elects to require the
exercise or forfeiture of the Callable Amount pursuant to this Section 14, the
Company shall provide written notice to the Holder within five business days
following such thirty day period.  If the Holder does not exercise the Callable
Amount within ten days of receipt of such notice, the portion of the Callable
Amount which is not exercised shall be forfeited and deemed null and void;
provided that (i) the Current Market Price as of the date of the Company’s
notice, as reported by the OTCBB, was at least $0.17 per share (subject to
adjustment as set forth in Section 4), and (ii) the registration statement
required by the Securities Purchase Agreement and covering the Warrant Shares is
effective and then currently able to be used in connection with the offer and
sale of the Warrant Shares.  Notwithstanding the foregoing, the Holder shall not
be required to exercise or forfeit the Callable Amount if the Holder or its
affiliates control, or would have control upon the exercise of the Callable
Amount of, ten percent (10%) or more of the primary shares of the common stock
of the Company outstanding, in which case the term of the Warrant shall be
extended for up to two (2) years.
 

15.           MISCELLANEOUS
 
15.1.         Nonwaiver and Expenses.  No course of dealing or any delay or
failure to exercise any right hereunder on the part of the Holder shall operate
as a waiver of such right or otherwise prejudice the Holder’s rights, powers or
remedies.  If the Company fails to make, when due, any payments provided for
hereunder, or fails to comply with any other provision of this Warrant, the
Company shall pay to the Holder such amounts as shall be sufficient to cover any
costs and expenses including, but not limited to, reasonable attorneys’ fees,
including those of appellate proceedings, incurred by the Holder in collecting
any amounts due pursuant hereto or in otherwise enforcing any of its rights,
powers or remedies hereunder.
 
15.2.         Notice Generally.  Any notice, demand, request, consent, approval,
declaration, delivery or other communication hereunder to be made pursuant to
the provisions of this Warrant shall be sufficiently given or made if in writing
and either delivered in person with receipt acknowledged or sent by registered
or certified mail, return receipt requested, postage prepaid, or by telecopy and
confirmed by telecopy answerback, addressed as follows:
 

  If to the Company:    Health Discovery Corporation       2 East Bryan Street,
Suite #601       Savannah, Georgia 31401       Attn:  Daniel R. Furth      
Facsimile:  (912) 443-1989             With a Copy to:   Powell Goldstein LLP  
    1201 W. Peachtree Street, 14th Floor       Atlanta, Georgia 30309      
Attn:  Todd Wade, Esq.       Facsimile:  (404) 572-6999  

 
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  If to the Holder:                                        

 
or at such other address as may be substituted by notice given as herein
provided.  The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice.  Every notice, demand, request,
consent, approval, declaration or other communication hereunder shall be deemed
to have been duly given and effective on the earliest of (a) the date of
transmission, if such notice or communication is delivered via facsimile prior
to 6:30 p.m. (New York City time) on a Business Day, (b) the next Business Day
after the date of transmission, if such notice or communication is delivered via
facsimile on a day that is not a Business Day or later than 6:30 p.m. (New York
City time) on any Business Day, (c) the Business Day following the date of
mailing, if sent by U.S. nationally recognized overnight courier service, or (d)
upon actual receipt by the party to whom such notice is required to be given.

15.3.         Remedies. Each holder of Warrant and Warrant Stock, in addition to
being entitled to exercise all rights granted by law, including recovery of
damages, will be entitled to specific performance of its rights under this
Warrant.  The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions
of this Warrant and hereby agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate.
 
15.4.         Successors and Assigns. Subject to the provisions of Sections 3.1
and 8, this Warrant and the rights evidenced hereby shall inure to the benefit
of and be binding upon the successors of the Company and the successors and
assigns of the Holder.  The provisions of this Warrant are intended to be for
the benefit of all Holders from time to time of this Warrant and, with respect
to Section 8 hereof, holders of Warrant Stock, and shall be enforceable by any
such Holder or holder of Warrant Stock.
 
15.5.         Amendment. This Warrant may be modified or amended or the
provisions hereof waived by the written consent of both the Company and the
Holder.
 
15.6          Severability. Wherever possible, each provision of this Warrant
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Warrant.
 
15.7          Headings. The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.
 
15.8          Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of this Warrant shall be governed by
and construed and enforced in accordance with the internal laws of the State of
Georgia, without regard to the principles of conflicts of law thereof.  Each
party agrees that all proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Warrant (whether brought
against a party hereto or its respective affiliates, directors, officers,
shareholders, employees or agents) (each a “Proceeding”) shall be commenced
exclusively in the state and federal courts sitting in Atlanta, Georgia.  Each
party hereto hereby irrevocably submits to the exclusive jurisdiction of the
state and federal courts sitting in Atlanta, Georgia for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein (including with respect to the enforcement of this
Warrant), and hereby irrevocably waives, and agrees not to assert in any
Proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such Proceeding is improper. 

 
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Each party hereto hereby irrevocably waives personal service of process and
consents to process being served in any such Proceeding by mailing a copy
thereof via registered or certified mail or overnight delivery (with evidence of
delivery) to such party at the address in effect for notices to it under this
Warrant and agrees that such service shall constitute good and sufficient
service of process and notice thereof.  Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
Each party hereto hereby irrevocably waives, to the fullest extent permitted by
applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Warrant or the transactions contemplated
hereby.
 

 

 
[Remainder of Page Left Blank]
 
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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed and
as of the day and year first above written.

 

    HEALTH DISCOVERY CORPORATION                           By:            
Daniel R. Furth       Executive Vice President  

 
 

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EXHIBIT A

HEALTH DISCOVERY CORPORATION
SUBSCRIPTION FORM
To be executed upon exercise of Warrant
 
(1)           The undersigned registered owner of this Warrant irrevocably
exercises this Warrant for the purchase of ______ Shares of Common Stock of
HEALTH DISCOVERY CORPORATION, and herewith makes payment therefor, all at the
price and on the terms and conditions specified in this Warrant and requests
that certificates for the shares of Common Stock hereby purchased (and any
securities or other property issuable upon such exercise) be issued in the name
of and delivered to ______________ whose address is
___________________________________.
 
(2)           Please issue a certificate or certificates representing said
Warrant Shares hereby purchased (and any securities or other property issuable
upon such exercise) in the name of and delivered to the undersigned or in such
other name and with such address as is specified below:
 
                                

 

 

                            _______________________________     (Name of
Registered Owner)     _______________________________     (Signature of
Registered Owner)     _______________________________     (Street Address)    
_______________________________    
(City)     (State)                                (Zip Code)

 
NOTICE:
The signature on this subscription must correspond with the name as written upon
the face of the within Warrant in every particular, without alteration or
enlargement or any change whatsoever.

 

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EXHIBIT B

HEALTH DISCOVERY CORPORATION
ASSIGNMENT FORM
 
FOR VALUE RECEIVED, the undersigned registered owner of this Warrant hereby
sells, assigns and transfers unto the Assignee named below all of the rights of
the undersigned under this Warrant, with respect to the number of shares of
Common Stock set forth below:
 
 

 

Name and Address of Assignee     
No. of Shares of
   
Common Stock
                             

 
and does hereby irrevocably constitute and appoint __________________________
attorney-in-fact to register such transfer on the books of HEALTH DISCOVERY
CORPORATION, maintained for the purpose, with full power of substitution in the
premises.

 

Dated: _________________    Print Name:___________________________      
Signature:____________________________      
Witness:_____________________________  

 
 
NOTICE:
The signature on this subscription must correspond with the name as written upon
the face of the within Warrant in every particular, without alteration or
enlargement or any change whatsoever.