Document:

Exhibit 10.9

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.

                               _____________, 2005
_____________  shares                                        Warrant No. _______

                          HEALTH DISCOVERY CORPORATION
                             STOCK PURCHASE WARRANT

         THIS IS TO CERTIFY THAT  [Purchaser]  (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 Texas  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 $0.24 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.

                                      E-80
<PAGE>

         "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 id 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 December 31, 2008.

         "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.

         "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.

                                      E-81
<PAGE>

         "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 1116  South Old  Temple  Road,
Lorena,  Texas  76655,  or at the  office or agency  designated  by the  Company
pursuant  to  Section  14,  (i) a written  notice of the  Holder's  election  to
exercise  this  Warrant,  (ii)  payment  of the  Warrant  Price,  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.

         (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.

                                      E-82
<PAGE>

         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

         3.5. 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 14, 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.

         3.6.  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.

         3.7. Expenses.  The Company shall prepare, issue and deliver at its own
expense the new Warrant or Warrants to be delivered under this Section 3.

         3.8.  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.

                                      E-83
<PAGE>

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 Shares 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.

         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:

                  (e) 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.

                  (f) 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.

                  (g) 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.

                  (h) 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.

                                      E-84
<PAGE>

         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.

5. NOTICES TO WARRANT HOLDERS

         5.3.  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 14.2. 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.

                                      E-85
<PAGE>

         5.4. 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  (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 Section 14.2.

6.       RESERVATION  AND  AUTHORIZATION   OF  COMMON STOCK;  REGISTRATION  WITH
         OR APPROVAL OF ANY  GOVERNMENTAL AUTHORITY

         6.1.  Reservation  of  Shares.  From and after the  Closing  Date,  the
Company  shall at all times  reserve and keep  available  for issuance  upon the
exercise of Warrants such number of its authorized but unissued shares of Common
Stock as will be  sufficient  to permit the exercise in full of all  outstanding
Warrants.  All shares of Common  Stock which shall be so  issuable,  when 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.

                                      E-86
<PAGE>

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 TRANSFERRABILITY

         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.  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.

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.

                                      E-87
<PAGE>

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.

14.      MISCELLANEOUS

         14.1.  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.

         14.2. 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
                                         1116 South Old Temple Road
                                         Lorena, Texas 76655
                                         Attn:    Robert S. Braswell, IV
                                         Facsimile:  (254) 744-9310

                  With a Copy to:        Powell, Goldstein, Frazer & Murphy LLP
                                         191 Peachtree Street, 16th Floor
                                         Atlanta, Georgia 30303
                                         Attn:    Todd Wade, Esq.
                                         Facsimile:  (404) 572-6999

                                      E-88
<PAGE>

                  If to the Holder:      ____________________________________

                                         ____________________________________

                                         ____________________________________

                                         ____________________________________

                                         ____________________________________

                                      E-89
<PAGE>

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.

         14.3.  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.

         14.4. 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.

         14.5.  Amendment.  This  Warrant  may be  modified  or  amended  or the
provisions  hereof  waived by the  written  consent of both the  Company and the
Holder.

         14.6 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.

         14.7  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.

                                      E-90
<PAGE>

         14.8  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
Delaware,  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.  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]

                                      E-91
<PAGE>

         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:
                                         ---------------------------------------
                                          Robert S. Braswell, IV
                                          Chief Administrative Officer

                                      E-92EXHIBIT 10.4

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE
HAVE  BEEN  REGISTERED  WITH  THE  SECURITIES  AND  EXCHANGE  COMMISSION  OR THE
SECURITIES   COMMISSION  OF  ANY  STATE  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.  THIS  SECURITY  MAY BE PLEDGED IN  CONNECTION  WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

Original Issue Date: January 27, 2005

                                                                     $350,000.00

                  12% SENIOR SECURED NOTE DUE DECEMBER 31, 2005

      THIS NOTE is one of a series of duly  authorized  and  issued  12%  Senior
Subordinated  Secured Notes of Duncan Capital Financial Group,  Inc., a Delaware
corporation, having a principal place of business at 830 Third Avenue, New York,
NY 10022  (the  "Company"),  designated  as its 12%  Senior  Secured  Note,  due
December 31, 2005 (the "Note(s)").

      FOR VALUE RECEIVED, the Company promises to pay to DCOFI MASTER LDC or its
registered assigns (the "Holder"),  the principal sum of $350,000.00 on December
31,  2005 or such  earlier  date as the Notes are  required or  permitted  to be
repaid as provided  hereunder (the "Maturity Date"),  and to pay interest to the
Holder on the aggregate  unconverted and then  outstanding  principal  amount of
this Note in accordance with the provisions hereof.  This Note is subject to the
following additional provisions:

      Section 1. Definitions.  For the purposes hereof, in addition to the terms
defined  elsewhere in this Note:  (a)  capitalized  terms not otherwise  defined
herein have the meanings given to such terms in the Purchase Agreement,  and (b)
the following terms shall have the following meanings:

            "Alternate  Consideration"  shall  have  the  meaning  set  forth in
      Section 4(c).

            "Balance"  means the difference  between  $500,000 and the aggregate
      amount of the  Company's  12% Senior  Secured  Notes due December 31, 2005
      outstanding.

                                       1
<PAGE>

            "Business  Day"  means any day except  Saturday,  Sunday and any day
      which shall be a federal  legal  holiday in the United  States or a day on
      which  banking  institutions  in the State of New York are  authorized  or
      required by law or other government action to close.

            "Change of Control  Transaction"  means the occurrence of any of (i)
      an  acquisition  after the date hereof by an individual or legal entity or
      "group" (as described in Rule 13d-5(b)(1)  promulgated  under the Exchange
      Act) of effective  control (whether through legal or beneficial  ownership
      of capital stock of the Company, by contract or otherwise) of in excess of
      33% of the voting securities of the Company,  or (ii) a replacement at one
      time or within a three year period of more than one-half of the members of
      the  Company's  board of directors  which is not approved by a majority of
      those  individuals  who are members of the board of  directors on the date
      hereof (or by those individuals who are serving as members of the board of
      directors  on any date  whose  nomination  to the board of  directors  was
      approved by a majority of the  members of the board of  directors  who are
      members on the date  hereof),  or (iii) the execution by the Company of an
      agreement  to which  the  Company  is a party  or by  which  it is  bound,
      providing for any of the events set forth above in (i) or (ii).

            "Common  Stock" means the common  stock,  $ $.001 par value,  of the
      Company and stock of any other class into which such shares may  hereafter
      have been reclassified or changed.

            "Event of Default" shall have the meaning set forth in Section 8.

            "Exchange  Act"  means  the  Securities  Exchange  Act of  1934,  as
      amended.

            "Fundamental  Transaction"  shall  have  the  meaning  set  forth in
      Section 4(c) hereof.

            "Late Fee" shall have the meaning set forth in Section 2(c) hereof.

            "Original  Issue Date" shall mean the date of the first  issuance of
      the Notes regardless of the number of transfers of any Note and regardless
      of the number of instruments which may be issued to evidence such Note.

            "Penalty  Shares"  means 500,000  shares of registered  Common Stock
      issuable to the Holder in accordance with the terms herein.

            "Person"  means  a  corporation,   an  association,  a  partnership,
      organization,  a  business,  an  individual,  a  government  or  political
      subdivision thereof or a governmental agency.

                                       2
<PAGE>

            "Purchase Agreement" means the Securities Purchase Agreement,  dated
      as of January 27, 2005,  to which the Company and the original  Holder are
      parties,  as  amended,  modified  or  supplemented  from  time  to time in
      accordance with its terms.

            "Securities  Act" means the Securities Act of 1933, as amended,  and
      the rules and regulations promulgated thereunder.

            "Subsidiary"  shall  have  the  meaning  given  to such  term in the
      Purchase Agreement.

            "Trading  Day" means a day on which (i) the New York Stock  Exchange
      is open for business,  if the Common Stock is not publicly  traded or (ii)
      if the  Company's  Common  Stock is publicly  traded,  the Common Stock is
      traded on a Trading Market.

            "Trading  Market" means the following  markets or exchanges on which
      the Common  Stock is listed or quoted for trading on the date in question:
      the Nasdaq  SmallCap  Market,  the American Stock  Exchange,  the New York
      Stock Exchange, the Nasdaq National Market or the OTC Bulletin Board.

            "Transaction  Documents"  shall  have the  meaning  set forth in the
      Purchase Agreement.

      Section 2. Interest and Prepayments.

            a) Payment of Interest in Cash.  The Company  shall pay  interest to
      the Holder on the aggregate and outstanding  principal amount of this Note
      at the rate of 12% per annum, payable quarterly in arrears, in cash on the
      last day of each  quarter,  beginning  on the first  such  date  after the
      Original  Issue Date and on the Maturity  Date (except  that,  if any such
      date is not a Business  Day,  then such  payment  shall be due on the next
      succeeding Business Day).

            b) Payment of Unused Line Fee.  The Company  shall pay a fee in cash
      to the Holder equal to 4% per annum on the Balance  until such time as the
      Purchaser  delivers the Balance to the Company.  This fee shall be payable
      quarterly  in arrears on the last day of each  quarter,  beginning  on the
      first such date after the  Original  Issue Date and on the  Maturity  Date
      (except  that,  if any such date is not a Business  Day, then such payment
      shall be due on the next succeeding Business Day).

            c) Late Fee.  All  overdue  accrued  and unpaid  interest to be paid
      hereunder  shall  entail a late fee at the rate of 20% per  annum (or such
      lower maximum amount of interest  permitted to be charged under applicable
      law) ("Late Fee") which will accrue daily,  from the date such interest is
      due hereunder through and including the date of payment.

                                       3
<PAGE>

            d) Optional Prepayment.  The Company shall have the right to prepay,
      in cash,  all or a portion of the Notes for an amount equal to 115% of the
      principal  amount to be  repaid,  plus all  accrued  and  unpaid  interest
      thereon:

      Section 3. Registration of Transfers and Exchanges.

            a) Different  Denominations.  This Note is exchangeable for an equal
      aggregate principal amount of Notes of different authorized denominations,
      as requested by the Holder  surrendering  the same. No service charge will
      be made for such registration of transfer or exchange.

            b) Investment Representations.  This Note has been issued subject to
      certain investment representations of the original Holder set forth in the
      Purchase  Agreement and may be transferred or exchanged only in compliance
      with the Purchase  Agreement and applicable  federal and state  securities
      laws and regulations.

            c)  Reliance  on Note  Register.  Prior  to due  presentment  to the
      Company  for  transfer  of this  Note,  the  Company  and any agent of the
      Company may treat the Person in whose name this Note is duly registered on
      the Note Register as the owner hereof for the purpose of receiving payment
      as herein provided and for all other purposes, whether or not this Note is
      overdue,  and  neither the Company nor any such agent shall be affected by
      notice to the contrary.

      Section 4. Certain Adjustments.

            a) Stock  Dividends  and Stock Splits.  If the Company,  at any time
      while the  Notes  are  outstanding:  (A)  shall  pay a stock  dividend  or
      otherwise make a  distribution  or  distributions  on shares of its Common
      Stock or any other  equity  or equity  equivalent  securities  payable  in
      shares of Common Stock, (B) subdivide  outstanding  shares of Common Stock
      into a larger number of shares,  (C) combine  (including by way of reverse
      stock split)  outstanding  shares of Common Stock into a smaller number of
      shares, or (D) issue by reclassification of shares of the Common Stock any
      shares of capital stock of the Company,  then the Penalty  Shares shall be
      adjusted  accordingly.  Any adjustment made pursuant to this Section shall
      become effective  immediately  after the record date for the determination
      of  stockholders  entitled to receive such  dividend or  distribution  and
      shall become effective immediately after the effective date in the case of
      a subdivision, combination or re-classification.

            b) Calculations. All calculations under this Section 4 shall be made
      to the nearest cent or the nearest 1/100th of a share, as the case may be.
      The number of shares of Common Stock  outstanding  at any given time shall
      not include  shares of Common Stock owned or held by or for the account of
      the Company,  and the description of any such shares of Common Stock shall
      be  considered  one issue or sale of Common  Stock.  For  purposes of this
      Section  4, the number of shares of Common  Stock  deemed to be issued and
      outstanding as of a given date shall be the sum of the number of shares of
      Common Stock (excluding treasury shares, if any) issued and outstanding.

                                       4
<PAGE>

            c)  Fundamental  Transaction.  If,  at any time  while  this Note is
      outstanding,  (A) the Company effects any merger or  consolidation  of the
      Company with or into another  Person,  (B) the Company effects any sale of
      all or  substantially  all of its  assets  in one or a series  of  related
      transactions,  (C) any tender  offer or  exchange  offer  (whether  by the
      Company  or another  Person) is  completed  pursuant  to which  holders of
      Common Stock are  permitted  to tender or exchange  their shares for other
      securities,   cash  or   property,   or  (D)  the   Company   effects  any
      reclassification  of the Common  Stock or any  compulsory  share  exchange
      pursuant  to which  the  Common  Stock is  effectively  converted  into or
      exchanged  for other  securities,  cash or property  (in any such case,  a
      "Fundamental Transaction"),  then upon issuance of the Penalty Shares, the
      Holder shall have the right to receive,  for each Penalty Share that would
      have been issuable absent such Fundamental Transaction,  the same kind and
      amount of  securities,  cash or property as it would have been entitled to
      receive upon the  occurrence  of such  Fundamental  Transaction  if it had
      been, immediately prior to such Fundamental Transaction, the holder of one
      share of Common  Stock  (the  "Alternate  Consideration").  If  holders of
      Common Stock are given any choice as to the  securities,  cash or property
      to be  received in a  Fundamental  Transaction,  then the Holder  shall be
      given the same choice as to the Alternate  Consideration  it receives upon
      issuance of the Penalty Shares following such Fundamental Transaction.  To
      the extent necessary to effectuate the foregoing provisions, any successor
      to the Company or surviving entity in such Fundamental  Transaction  shall
      issue to the Holder a new note consistent  with the foregoing  provisions.
      The terms of any agreement pursuant to which a Fundamental  Transaction is
      effected  shall  include terms  requiring any such  successor or surviving
      entity to comply with the  provisions  of this  paragraph (c) and insuring
      that  this  Note  (or any such  replacement  security)  will be  similarly
      adjusted  upon  any  subsequent  transaction  analogous  to a  Fundamental
      Transaction.

      Section 5. Intentionally Omitted.

      Section 6.  Penalty  Share  Issuance.  In addition to all of the  remedies
available to the Holder  pursuant to Section 8, in the event that the  principal
amount of the Note, together with all accrued, but unpaid,  interest is not paid
within two (2) Trading Days of the Maturity  Date,  the Company  shall issue the
Penalty Shares to the Holder.

      Section  7.  Negative  Covenants.  So long as any  portion of this Note is
outstanding, the Company will not and will not permit any of its Subsidiaries to
directly or indirectly:

            a) enter  into,  create,  incur,  assume  or  suffer  to  exist  any
      indebtedness  or  liens  of any  kind,  on or with  respect  to any of its
      property or assets now owned or hereafter acquired or any interest therein
      or any income or profits  therefrom that is senior to, or pari passu with,
      in any respect,  the Company's  obligations  under the Notes;

                                       5
<PAGE>

            b) amend its certificate of  incorporation,  bylaws or other charter
      documents so as to adversely affect any rights of the Holder;

            c) repay,  repurchase  or offer to repay,  repurchase  or  otherwise
      acquire  any of  its  Common  Stock,  Preferred  Stock,  or  other  equity
      securities; or

            d) enter into any agreement with respect to any of the foregoing.

      Section 8. Events of Default.

            a) "Event of Default",  wherever  used herein,  means any one of the
      following events (whatever the reason and whether it shall be voluntary or
      involuntary  or effected by operation of law or pursuant to any  judgment,
      decree or order of any court,  or any  order,  rule or  regulation  of any
      administrative or governmental body):

                  i. any default in the payment of (A) the  principal  of amount
            of any Note, or (B) interest (including Late Fees) on, or damages in
            respect   of,  any  Note,   in  each  case  free  of  any  claim  of
            subordination,  as and when the same shall  become  due and  payable
            (whether on the Maturity Date or by acceleration or otherwise) which
            default,  solely in the case of an interest payment or other default
            under clause (B) above, is not cured, within 2 Trading Days;

                  ii. the  Company  shall  fail to observe or perform  any other
            covenant  or  agreement  contained  in this Note or any of the other
            Transaction  Documents  which  failure is not cured,  if possible to
            cure, within the earlier to occur of (A) 5 Trading Days after notice
            of such default sent by the Holder or by any other Holder and (B) 10
            Trading  Days after the Company  shall  become or should have become
            aware of such failure;

                  iii. a default or event of  default  (subject  to any grace or
            cure period  provided for in the applicable  agreement,  document or
            instrument)  shall occur under (A) any of the Transaction  Documents
            other than the Notes,  or (B) any other material  agreement,  lease,
            document or  instrument  to which the Company or any  Subsidiary  is
            bound;

                  iv. any  representation  or warranty made herein, in any other
            Transaction  Document,  in any written statement  pursuant hereto or
            thereto, or in any other report,  financial statement or certificate
            made or  delivered  to the Holder or any other holder of Notes shall
            be untrue or incorrect  in any material  respect as of the date when
            made or deemed made;

                  v. (i) the Company or any of its Subsidiaries  shall commence,
            or  there  shall  be  commenced  against  the  Company  or any  such
            Subsidiary,  a case under any  applicable  bankruptcy  or insolvency
            laws as now or hereafter in effect or any successor thereto,  or the
            Company or any Subsidiary  commences any other  proceeding under any
            reorganization,  arrangement, adjustment of debt, relief of debtors,
            dissolution,  insolvency  or  liquidation  or  similar  law  of  any
            jurisdiction  whether  now or  hereafter  in effect  relating to the
            Company or any Subsidiary thereof or (ii) there is commenced against
            the  Company  or  any  Subsidiary   thereof  any  such   bankruptcy,
            insolvency  or other  proceeding  which  remains  undismissed  for a
            period of 60 days; or (iii) the Company or any Subsidiary thereof is
            adjudicated  by a  court  of  competent  jurisdiction  insolvent  or
            bankrupt;  or any order of relief or other order  approving any such
            case or proceeding is entered; or (iv) the Company or any Subsidiary
            thereof  suffers any appointment of any custodian or the like for it
            or any substantial part of its property which continues undischarged
            or  unstayed  for a period  of 60 days;  or (v) the  Company  or any
            Subsidiary  thereof  makes a general  assignment  for the benefit of
            creditors;  or (vi) the  Company  shall fail to pay,  or shall state
            that it is  unable  to pay,  or shall be  unable  to pay,  its debts
            generally as they become due; or (vii) the Company or any Subsidiary
            thereof  shall  call a  meeting  of  its  creditors  with a view  to
            arranging a composition,  adjustment or  restructuring of its debts;
            or (viii) the Company or any Subsidiary  thereof shall by any act or
            failure to act  expressly  indicate  its consent to,  approval of or
            acquiescence in any of the foregoing; or (ix) any corporate or other
            action is taken by the  Company or any  Subsidiary  thereof  for the
            purpose of effecting any of the foregoing;

                                       6
<PAGE>

                  vi. the Company or any Subsidiary  shall default in any of its
            obligations under any mortgage,  credit agreement or other facility,
            indenture  agreement,  factoring agreement or other instrument under
            which  there may be  issued,  or by which  there may be  secured  or
            evidenced any indebtedness for borrowed money or money due under any
            long term  leasing or  factoring  arrangement  of the  Company in an
            amount exceeding  $150,000,  whether such indebtedness now exists or
            shall  hereafter  be created and such  default  shall result in such
            indebtedness becoming or being declared due and payable prior to the
            date on which it would otherwise become due and payable;

                  vii. if any of the Company's  Common Stock is registered  with
            the Commission, the Common Stock shall not be eligible for quotation
            on or quoted for trading on a Trading  Market and shall not again be
            eligible  for and quoted or listed for trading  thereon  within five
            Trading Days;

                  viii.  the  Company  shall be a party to any Change of Control
            Transaction  or  Fundamental  Transaction,  shall  agree  to sell or
            dispose  of all or in  excess  of 33% of its  assets  in one or more
            transactions  (whether or not such sale would constitute a Change of
            Control  Transaction)  or shall redeem or repurchase  more than a de
            minimis  number of its  outstanding  shares of Common Stock or other
            equity  securities of the Company (other than  repurchases of shares
            of Common Stock or other equity securities of departing officers and
            directors of the Company; provided such repurchases shall not exceed
            $100,000,  in the aggregate,  for all officers and directors  during
            the term of this Note);

                                       7
<PAGE>

            b) Remedies Upon Event of Default.  If any Event of Default  occurs,
      the full principal  amount of this Note,  together with interest and other
      amounts  owing  in  respect  thereof,  to the date of  acceleration  shall
      become, at the Holder's election, immediately due and payable in cash. The
      aggregate  amount  payable upon an Event of Default  shall be equal to the
      Mandatory Prepayment Amount. Commencing 5 days after the occurrence of any
      Event of Default that results in the eventual  acceleration  of this Note,
      the interest  rate on this Note shall accrue at the rate of 20% per annum,
      or such lower  maximum  amount of interest  permitted to be charged  under
      applicable law. All Notes for which the full Mandatory  Prepayment  Amount
      hereunder  shall have been paid in accordance  herewith  shall promptly be
      surrendered to or as directed by the Company.  The Holder need not provide
      and the Company hereby waives any  presentment,  demand,  protest or other
      notice of any kind, and the Holder may immediately and without  expiration
      of any  grace  period  enforce  any and  all of its  rights  and  remedies
      hereunder and all other  remedies  available to it under  applicable  law.
      Such declaration may be rescinded and annulled by Holder at any time prior
      to payment hereunder and the Holder shall have all rights as a Note holder
      until such time, if any, as the full payment under this Section shall have
      been  received by it. No such  rescission  or  annulment  shall affect any
      subsequent Event of Default or impair any right consequent thereon.

      Section 9. Miscellaneous.

            a)  Other   Agreements   Between  the   Parties.   It  is  currently
      contemplated that prior to the Maturity Date, the Company may enter into a
      senior  secured  financing with the Laurus Funds or another senior lender.
      In the event of such a financing,  the Holder shall,  at its option,  have
      the Notes exchanged for convertible notes (the  "Convertible  Notes") with
      the material  terms set forth below.  The  Convertible  Notes shall have a
      term of three years and shall be  convertible  into Common  Stock at $0.68
      per share.  The  Convertible  Notes  shall be  interest  only (at the same
      coupon as the Notes) for the first six months and shall amortize at 1/30th
      per month  thereafter.  The Convertible Notes shall be secured by a second
      lien on all of the Company's  assets (and  guarantee of the  Subsidiaries,
      subordinated   in  right  of  payment  to  senior  lender)  and  shall  be
      pre-payable,  in  cash,  at  115% of the  principal  amount  thereof.  The
      Convertible Notes shall be issued with five year warrants (the "Warrants")
      to  purchase  50% of the  Convertible  Notes on an as  converted  basis at
      $16.67 per share.  The Convertible  Notes and Warrants shall be subject to
      customary  registration  rights (30 days to file/90 days to be  effective,
      subject  to  additional  time  based on the  Commission's  comments).  The
      Company  shall  reimburse  the  Investor  for legal and other  expenses in
      connection with the Convertible Notes.

            b)  Notices.   Any  and  all  notices  or  other  communications  or
      deliveries to be provided by the Holders hereunder shall be in writing and
      delivered  personally,  by  facsimile,  sent  by a  nationally  recognized
      overnight  courier service,  addressed to the Company,  at the address set
      forth above, facsimile number 212-581-7010, Attn: Chief Financial Officer,
      or such other  address or facsimile  number as the Company may specify for
      such purposes by notice to the Holders  delivered in accordance  with this
      Section.  Any and all notices or other  communications or deliveries to be
      provided  by the  Company  hereunder  shall be in  writing  and  delivered
      personally,  by  facsimile,  sent  by a  nationally  recognized  overnight
      courier service addressed to each Holder at the facsimile telephone number
      or address of such Holder appearing on the books of the Company,  or if no
      such facsimile telephone number or address appears, at the principal place
      of business of the Holder. Any notice or other communication or deliveries
      hereunder  shall be deemed given and  effective on the earliest of (i) the
      date of  transmission,  if such notice or  communication  is delivered via
      facsimile  at the  facsimile  telephone  number  specified in this Section
      prior to 5:30 p.m.  (New York City time),  (ii) the date after the date of
      transmission,  if such notice or  communication is delivered via facsimile
      at the  facsimile  telephone  number  specified in this Section later than
      5:30 p.m.  (New York City  time) on any date and  earlier  than 11:59 p.m.
      (New York City time) on such date, (iii) the second Business Day following
      the date of mailing,  if sent by nationally  recognized  overnight courier
      service,  or (iv) upon actual  receipt by the party to whom such notice is
      required to be given.

                                       8
<PAGE>

            c) Absolute  Obligation.  Except as expressly  provided  herein,  no
      provision  of this  Note  shall  alter or  impair  the  obligation  of the
      Company,  which is absolute and  unconditional,  to pay the  principal of,
      interest and liquidated damages (if any) on, this Note at the time, place,
      and rate, and in the coin or currency,  herein prescribed.  This Note is a
      direct debt obligation of the Company. This Note ranks pari passu with all
      other Notes now or hereafter issued under the terms set forth herein.

            d) Lost or Mutilated  Note. If this Note shall be  mutilated,  lost,
      stolen or destroyed,  the Company  shall execute and deliver,  in exchange
      and substitution for and upon cancellation of a mutilated Note, or in lieu
      of or in substitution for a lost, stolen or destroyed Note, a new Note for
      the principal amount of this Note so mutilated,  lost, stolen or destroyed
      but only upon receipt of evidence of such loss,  theft or  destruction  of
      such Note, and of the ownership hereof, and indemnity,  if requested,  all
      reasonably satisfactory to the Company.

            e)  Security  Interest/Subordination.  This  Note is a  direct  debt
      obligation  of the Company  and,  pursuant to the  Security  Agreement  is
      secured by a first  priority  perfected  security  interest  in all of the
      assets of the Company for the benefit of the Holders.

            f)  Governing  Law.  All  questions   concerning  the  construction,
      validity, enforcement and interpretation of this Note shall be governed by
      and  construed  and enforced in  accordance  with the internal laws of the
      State of New York,  without  regard to the  principles of conflicts of law
      thereof.  Each party  agrees  that all legal  proceedings  concerning  the
      interpretations,  enforcement and defense of the transactions contemplated
      by any of the  Transaction  Documents  (whether  brought  against  a party
      hereto or its respective affiliates,  directors,  officers,  shareholders,
      employees or agents)  shall be  commenced in the state and federal  courts
      sitting  in the City of New  York,  Borough  of  Manhattan  (the "New York
      Courts").  Each party hereto hereby  irrevocably  submits to the exclusive
      jurisdiction  of the New York Courts 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
      any of the Transaction  Documents),  and hereby  irrevocably  waives,  and
      agrees not to assert in any suit, action or proceeding,  any claim that it
      is not personally  subject to the  jurisdiction of any such court, or such
      New York Courts are improper or  inconvenient  venue for such  proceeding.
      Each party  hereby  irrevocably  waives  personal  service of process  and
      consents to process being served in any such suit, action or 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 Note 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 Note or the transactions  contemplated  hereby.
      If either  party  shall  commence an action or  proceeding  to enforce any
      provisions  of this  Note,  then the  prevailing  party in such  action or
      proceeding  shall be reimbursed by the other party for its attorneys  fees
      and other costs and expenses incurred with the investigation,  preparation
      and prosecution of such action or proceeding.

                                       9
<PAGE>

            g) Waiver.  Any  waiver by the  Company or the Holder of a breach of
      any  provision  of this Note shall not operate as or be  construed to be a
      waiver of any other breach of such provision or of any breach of any other
      provision of this Note. The failure of the Company or the Holder to insist
      upon strict  adherence  to any term of this Note on one or more  occasions
      shall  not be  considered  a waiver  or  deprive  that  party of the right
      thereafter to insist upon strict  adherence to that term or any other term
      of this Note. Any waiver must be in writing.

            h) Severability.  If any provision of this Note is invalid,  illegal
      or unenforceable,  the balance of this Note shall remain in effect, and if
      any  provision is  inapplicable  to any person or  circumstance,  it shall
      nevertheless remain applicable to all other persons and circumstances.  If
      it shall be found that any  interest or other amount  deemed  interest due
      hereunder violates applicable laws governing usury, the applicable rate of
      interest due hereunder shall automatically be lowered to equal the maximum
      permitted rate of interest.  The Company  covenants (to the extent that it
      may lawfully do so) that it shall not at any time insist upon,  plead,  or
      in any manner  whatsoever  claim or take the benefit or advantage  of, any
      stay,  extension or usury law or other law which would prohibit or forgive
      the Company from paying all or any portion of the principal of or interest
      on this Note as contemplated herein,  wherever enacted, now or at any time
      hereafter in force,  or which may affect the covenants or the  performance
      of this  indenture,  and the Company (to the extent it may lawfully do so)
      hereby  expressly  waives all  benefits or  advantage of any such law, and
      covenants  that it will not, by resort to any such law,  hinder,  delay or
      impeded the execution of any power herein granted to the Holder,  but will
      suffer and permit  the  execution  of every such as though no such law has
      been enacted.

                                       10
<PAGE>

            i) Next  Business  Day.  Whenever  any  payment or other  obligation
      hereunder  shall be due on a day other than a Business  Day,  such payment
      shall be made on the next succeeding Business Day.

            j) Headings. The headings contained herein are for convenience only,
      do not  constitute a part of this Note and shall not be deemed to limit or
      affect any of the provisions hereof.

                              *********************

                                       11
<PAGE>

      IN WITNESS  WHEREOF,  the Company has caused this Note to be duly executed
by a duly authorized officer as of the date first above indicated.

                                       DUNCAN CAPITAL FINANCIAL GROUP, INC.

                                       /s/ Richard Stierwalt
                                       -----------------------------------------
                                       Richard Stierwalt, President

                                       12

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}]]