Document:

ex10-1.htm

    
      
        
          

        
Exhibit 10.1

       

       

      EMPLOYMENT
AGREEMENT

      

      THIS
AGREEMENT is by and between DIRECT WIRELESS COMMUNICATIONS, INC., a Texas public
corporation with an address at 2068 N. Valley Mills Dr., Waco, Texas 76710
(hereinafter referred to as “Employer”), and Stephen Barnhill, with an address
at 2 Springfield Place, Savannah, Georgia 31411 hereinafter referred to as
“Employee”).

      

      WHEREAS,
Employer has purchased assets from the Barnhill Group, LLC, which was the
previous employer of Employee; and

      

      WHEREAS,
Employer desires to employ Employee and Employee desires to such employment in
accordance with the terms and conditions herein; and

      

      WHEREAS,
Employee represents and warrants to Employer that he is not party to any
contract which Employee will be breaching by entering into this Agreement or
which restricts in any way Employee’s ability to accept employment with
Employer: and

      

      WHEREAS,
Employer would not enter into this Agreement with Employee but for the foregoing
representation and warranty by Employee.

      

      NOW,
THEREFORE, for and in consideration of the mutual benefits to be gained by the
performance thereof, the parties hereto agree as follows:

      

      
        	
                1.

              	
                EMPLOYMENT/TERM

              

      

      

      Employer
hereby employs Employee and Employee hereby accepts employment with Employer
under the terms and conditions specified in this Agreement.

      

      Employment
of Employee pursuant to the terms of this Agreement in the position of President
will commence on the 15th day of
September, 2003 and will continue for a period of five (5) years (the “Original
Term”) unless earlier terminated as further set forth herein.  This
Agreement shall automatically renew for successive one-year terms unless either
party gives notice to the other party of its intent not to renew within a thirty
day period prior to the end of the then current term.

      

      
        	
                2.

              	
                TITLE
      AND DUTIES

              

      

       

      2.1           Employee
shall have the title of President and Medical Director.  The general
duties to be performed by Employee shall include:

      

      a.           
Authority over and responsibility for all medical, scientific research and
development issues including without limitation, research projects, budgets with
respect to such projects, hiring and firing of all scientific and medical
employees, strategic direction and strategic alliance (in conjunction with the
board of directors of Employer), patents, presentations and
publications;

      

      b.           
Authority over all research and medical personnel;

      

      c.          
 Those additional duties assigned to Employee from time to time by the
board of directors of Employer; and

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        d.    To
regularly, promptly and fully report to the board of directors of Employer or to
any person duly authorized by the Employer to receive such reports as to the
performance of Employee’s duties and as to the business and affairs of the
Employer, including business opportunities and activities, know to
Employee.

      

       

                   
2.2            Hours - Employee
shall be expected to work such hours as reasonable and necessary to comply with
workload demands, but Employee shall not be prohibited from undertaking other
business or philanthropic ventures, including but not limited to those ventures
with which Employee is currently involved, including serving on the board of
directors or similar governing body of any charitable, civic or service
organization, provided such activities do not interfere with the ability of
Employee to discharge the responsibilities required under this
Agreement.  In connection with any activities permitted under this
Section 2.2, Employee shall retain any compensation received
therefore.

      

      
        	
                3.

              	
                COMPENSATION

              

      

      

      3.1           Salary - Employer
shall pay Employee base gross salary at the rate of $25,000 per month, payable
in accordance with Employer’s customary payment policy. Consistent with its
mandate, the Compensation Committee of Employer’s board of directors, of if no
such committee is standing, the full board of directors, shall on each
anniversary of the date of this Agreement, grant Employee an increase in his
base gross salary, as in effect on the prior day, equal to the percentage
increase for the preceding twelve calendar months in the United States
Department of Labor’s Bureau of Labor Statistics Consumer Price Index (or
successor to that index).  At no time during the term of this
Agreement shall Employee’s base salary be reduced.

      

      3.2           Reimbursement of
Expenses - Employee shall be reimbursed monthly by Employer for
reasonable and necessary business expenses incurred in connection with
Employee’s performance of his duties.  Reimbursement is subject to the
submission of expenses in a timely manner with appropriate supporting
documentation, and subject to compliance with the Employer’s standard
reimbursement policy.

      

      3.3           Other Benefits and Duties
– Employee will be entitled to the following additional
benefits:

      

      (a)           Incentive Stock Option
Plan – Employee will be eligible to participate in an Incentive Stock
Option Plan granting Employee the number of options with the corresponding
vesting schedules as set forth on Exhibit A upon establishment of the Incentive
Stock Option Plan by the board of directors;

      

      (b)           Other Benefits -
Employer shall at all times during the term of this Agreement provide health
insurance benefits for Employee with coverage and premiums no less favorable to
Employee as such coverage and premiums to which Employee is receiving
immediately prior to the date of this Agreement.  Employee will also
participate in any employee benefit plans, programs, arrangements and policies
maintained by Employer for its employees from time to time, including, but not
limited to, any benefit or non-qualified deferred compensation plan or program
made available generally to executive officers of Employer and/or members of the
board of directors.  Employer will pay all Employee and family
contributions, deductibles, co-insurance and other expenses unreimbursed by the
health insurance plan for medically necessary covered health services provided
in the United States, not to exceed $25,000 per plan year in the
aggregate.  Employee will also be eligible to such other benefits
applicable to Employee including retirement, pension, profit sharing, insurance
or other similar plans, which are implemented from time to time by the board of
directors, provided that the rights to such benefits
are not contractual and are subject to modification by Employer at any time,
although such modifications shall apply prospectively.

       

      
        
          Stephen
Barnhill Employment Agreement,

          
          

        

        
          Page
2

          
            

          

        

        
          
          

        

      

      
               
3.4           Vacation - Employee
shall be entitled to 20 paid vacation days during the calendar year from January
1 to December 31.  For employment periods of less than one calendar
year, vacation days shall accrue at the rate of 0.83 days per month of
employment.  All vacation must be taken by December 31 in the calendar
year in which such vacation is earned.

      

      3.5           Public holidays -
Employee shall also be entitled to all “public holidays,” as that term is
generally defined.

      

      3.6           Taxes - Employer
shall withhold from Employee’s compensation provided for hereunder all
applicable income taxes, social security and Medicare costs that Employer is
required to withhold.

      

      3.7           Additional
Perquisites –

      

      (a)           Travel – Employee
shall not be required to be away from his principal office for any more than
four days (or parts thereof) out of any thirty consecutive day period nor more
than eight days (or parts thereof) out of any ninety consecutive day
period.

      

      (b)           Travel Expenses – Any
travel by Employee on behalf of Employer shall be at Employer’s expense and
shall include, but not be limited to, all costs of transportation, lodging,
meals, and with respect to air fare at full coach rates for domestic flights
with a scheduled flight time of less than four hours and at full business class
rates for all domestic flights with a scheduled flight time of four hours or
more and for all international flights.  All travel will be at the
sole discretion of the Employee.

      

      (c)           Office – Employee’s
principal office shall be located in Savannah, Georgia.  Employer
shall provide and maintain furniture, fixtures and equipment for Employee’s
principal office as is reasonable for such office, together with a full-time
secretary/receptionist whose continued employment shall be in the sole
discretion of Employee.  In no event shall Employee be required to
move his office location or residence in order to satisfy his obligations under
this Agreement.

      

      (d)           Director & Officer
Insurance – Employer, at its expense, shall maintain director and officer
insurance covering Employee with a reputable carrier.

      

      
        	
                4.

              	
                TERM
      AND TERMINATION OF EMPLOYMENT;
SUSPENSION

              

      

      

      (a)           4.1           Termination for Cause
- This Agreement may be terminated by the board of directors of Employer without
prior written notice for “Cause.”  “Cause” as used herein means the
following:  (i) Employee’s conviction of, or plea of nolo contendere
to, a felony which adversely and materially affects the Employer, (ii)
Employee’s willful failure or refusal to perform the duties as set forth in
Section 2.1 as determined by the Board of Directors or implement a directive
from the Board of Directors, in each case remaining uncured for a period of
fourteen (14) days after receipt of written notice from the Board of Directors
specifying such failure or refusal; or (iii) during any ninety (90) consecutive
day period, failed for a material period of time to perform material duties of
his position on a substantially full time basis by reason of a disability as
defined by 29 C.F.R.§ 1630.2(g)(1), and Employee cannot perform the essential
functions of his position with reasonable accommodation.

      

      4.2           Rights on Termination for
Cause - If the board of directors of Employer terminate this Agreement
for Cause as defined in Section 4.1, then Employer shall make on the date of
termination a lump sum payment equal to the sum of (i) accrued unpaid wages,
(ii) unreimbursed expenses properly incurred
prior to the date of termination and (iii) the value of all accrued unpaid
vacation pay, less any amounts which Employee owes to Employer and which
Employee hereby authorizes shall be offset against amounts owed to him by
Employer.  Upon such termination, Employee shall waive his/her right
to further compensation, and shall have a duty to seek other employment in
mitigation of the loss of employment.

       

      
        
          Stephen
Barnhill Employment Agreement,

          
          

        

        
          Page
3

          
            

          

        

        
          
          

        

      

       

      4.3           Rights on Termination other
than for “Cause” - If Employer terminates this Agreement, other than for
Cause, then the Employer shall give the Employee thirty (30) days’ prior written
notice of its intent to terminate, in which event Employer shall be required to
(i) continue to meet its obligations to the Employee under Section 3.1 for the
remaining portion of the Original Term of the Agreement (but in no event less
than for a period of one year from the date of termination) and
(ii) reimburse the Employee for ninety (90) days of the Employee’s COBRA
premium payments, commencing with the COBRA payment next due after termination,
should the Employee elect COBRA (the “Continuing Benefit”).  The
Employer may deduct from each payment to the Employee any and all amounts
required to be deducted or withheld for general payroll purposes in accordance
with the provisions of federal law and any applicable state law now in effect or
hereafter in effect including without limitation, state and federal income
withholding, FICA and other withholding tax requirements, and such other
deductions permitted by the Employer which Employee may authorize from time to
time.  In addition, any outstanding options granted to Employee shall
immediately vest on the date of the termination.

      

      4.4           Rights on Termination “at
will.” - If Employee terminates the Agreement,

      

      (a) for “good reason,” then Employee
shall be entitled to receive the benefits applicable under Section 4.3
above.  “Good reason” as used herein means any of the following
without the consent of Employee (i) a breach of this Agreement by Employer, or
(ii) a substantial adverse change in the nature or status of Employee’s
responsibilities or title from those described in this Agreement.

      

      (b) for other than “good reason,” then
Employee shall be entitled to receive the benefits applicable under Section 4.2
above.

      

      4.5           Rights on Termination at
death – Upon the termination of Employee’s employment as a result of
Employee’s death, Employee’s beneficiary or estate shall be entitled to receive
the benefits applicable under Section 4.3 above plus any death benefits for
which Employee is eligible under any play or program maintained by
Employer.

      

      
        	
                5.

              	
                ASSIGNMENT

              

      

      

      This
Agreement may not be assigned in whole or in part by Employee, but is personal
to Employee and will terminate as a matter of law upon Employee’s death, if not
terminated earlier pursuant to Article 4.

      

      
        	
                6.

              	
                NON-COMPETITION
      AND PROTECTION OF CONFIDENTIAL INFORMATION BY EMPLOYEE; INTELLECTUAL
      PROPERTY

              

      

      

      6.1           During Employment -
While employed by Employer, Employee shall not directly or indirectly as an
employee, employer, consultant, agent, principal, partner, stockholder,
corporate officer, director or in any other individual or representative
capacity, engage or participate in any business in competition with the business
of Employer or take any action inconsistent with his confidential and fiduciary
relationship with Employer.

       

      
        
          Stephen
Barnhill Employment Agreement,

          
          

        

        
          Page
4

          
            

          

        

        
          
          

        

      

       

       

      
        
                        
6.2            Subsequent
to Employment - In consideration for Employer’s employment of Employee
pursuant to the terms of this Agreement. Employee agrees that upon termination
of employment for Cause by Employer or by Employee, Employee shall not, directly
or indirectly, enter into or engage in direct or indirect competition with
Employer in Texas, Georgia or California, where Employer conducts business, as a
partner, joint venturer, director, officer, employee, agent, consultant, owner
or shareholder of a competing business for a period of 12 months
thereafter.  Employee acknowledges that Employer would not have
employed Employee in the position and with the compensation and benefits
provided Employee hereunder, but for Employee’s agreement to this
covenant.  The parties expressly intend to enter into a binding and
enforceable covenant not to compete.  If the scope of this covenant as
written is subsequently found to be broader than is permitted by the Governing
Law, then the covenant shall be deemed binding and enforceable to the maximum
extent then allowed by the Governing Law.

        

      6.3           Confidential
Information - Employee acknowledges that during employment with Employer,
he will be privy to, make use of, acquire and/or add to confidential information
which is closely guarded and valued by Employer and to which Employee would not
have access but for employment with Employer.  Such confidential
information includes, but is not limited to, Employer’s trade secrets, systems,
procedures, manuals, computer software, customer lists (which are deemed for all
purposes confidential and proprietary), vendor list, product list and price
list.  As a material inducement to Employer to employ Employee, to
grant Employee access to Employer’s confidential information, and to pay
Employee the compensation stated herein, Employee covenants that he shall not,
at any time during or following the termination of employment or this Agreement,
directly or indirectly, use, divulge or disclose for any purpose whatsoever,
other than within the scope of employment by Employer, any confidential
information that has been obtained by, or disclosed to, Employee as a result of
or during employment with Employer.  Employee will not make or possess
without authority copies of documents, papers or other media on which any
confidential information about the Employer or any of its affiliated companies
is recorded.  On termination of employment for any reason, Employee
shall deliver to the Employer all such documents, papers or other media together
with all copies thereof. Confidential information shall not include, and the
restrictions herein, shall not apply to information, which is already in the
public domain through no fault of Employee or that was known to Employee prior
to his employment with Employer.  If Employee receives a court
subpoena, which seeks Employer’s confidential information, Employee shall
promptly notify Employer of the subpoena and give the Employer the opportunity
to challenge the subpoena, but if Employer does not do so, Employee shall have
no duty to disobey the subpoena.

      
      

       

       

      
        
          Stephen
Barnhill Employment Agreement,

          
          

        

        
          Page
5

          
            

          

        

        
          
          

        

      

       

      6.4    Intellectual
Property.

       

      
        	 	
                (a)

              	
                Ownership
      –   If, during the period of Employee’s employment,
      Employee either alone or jointly with others, makes any improvement,
      process, system, invention, design or discovery, including any registered
      or unregistered copyrights, service or trade marks, patents (together
      “Inventions”) capable of use in connection with any business of the
      Employer or of any subsidiary of the Employer, such Invention shall be and
      remain the property of the Employer (whether registered or not) and
      accordingly Employee hereby assigns to the Employer any rights Employee
      may have in such Inventions.  Upon making any Invention,
      Employee will immediately communicate all information concerning the same
      to the Employer.  If so requested, at the Employer’s expense but
      without receiving additional payment, Employee will assist the Employer in
      obtaining Letters Patent, Trademark or Copyright Registrations, or any
      other protection desired by the Employer in respect of any such Invention
      and, at the expense of the Employer, will execute all documents and do all
      things necessary to give effect to this provision.  This Section
      6.4 shall apply only to Inventions relating to the business of
      Employer.  In addition, if Employer is not interested in the
      Invention then Employee shall have the right to retain such Invention at
      his sole cost.

              
	 	 	 
	
                 
      

              	
                (b)

              	
                Assignment -
      Employee hereby assigns (so as to continue beyond the termination of this
      Agreement for whatever reason) to the Employer as beneficial owner by way
      of assignment, all of Employee’s rights, title and interest, including
      without limitation all patent, trademark and copyright ownership of
      Employee, in and to all material written or devised by Employee pertaining
      to the actual or potential operation or business of the Employer or any
      affiliated company of Employer, resulting from or suggested by any work
      which Employee shall do pursuant to Employee’s employment with Employer
      whether or not such items constitute a “work made for hire” as defined in
      the U.S. Copyright Act of 1976, 17 U.S.C. §101, as amended, and all rights
      of action for damages for infringement
thereof.

              

      

      

      
        	
                 
      

              	
                (c)

              	
                Appointment of
      Attorney-in-Fact - Employee hereby irrevocably appoints the
      Employer to be Employee’s attorney-in-fact to execute on Employee’s behalf
      any documents as described in this Article 6.4 and generally to act on
      Employee’s behalf and in Employee’s name for the purpose of giving to the
      Employer the full benefit of the provisions of this Article
      6.4.  A certificate in writing signed by any director or the
      secretary of the Employer that any instrument or act falls within the
      authority hereby conferred shall be conclusive evidence that such is the
      case.

              

      

      

      
        	
                7.

              	
                OTHER
      POST-EMPLOYMENT RESTRICTIONS

              

      

      

      7.1           Solicitation of Employer’s
Customers - Until the expiration of 12 months from the termination of
employment with the Employer for cause, Employee shall not directly or
indirectly solicit, canvass or approach any person or entity:

      

      
        	
                 
      

              	
                (a)

              	
                Who,
      to Employee’s knowledge, was provided with goods or services by the
      Employer or any of its subsidiaries at any time during 12 months before
      such termination;

              

      

      

      
        	
                 
      

              	
                (b)

              	
                For
      the purpose of offering to that person or entity goods or services similar
      to those which were provided by
Employer.

              

      

      

      7.2           Solicitation of Employer’s
Employees - After the termination of Employee’s employment with the
Employer for Cause, for a period of 12 months from the date of termination,
Employee shall not directly or indirectly solicit or entice away or endeavor to
entice away from the Employer or any of its affiliates any
employee.

      

      7.3           Representation to Third
Parties - After the termination of Employee’s employment with the
Employer (for whatever reason), Employee shall not represent himself or permit
himself to be held out as being in any way connected with or interested in the
business of the Employer or any of the affiliates of the Employer, except if and
for so long as Employee remains an employee of that affiliate.

      

      
        	
                8.

              	
                INDEMNITY

              

      

      

      (a)  Employee
hereby agrees to indemnify and hold harmless Employer from all costs arising
from (i) Employee’s breach of this Agreement, (ii) claims made by third parties
that Employee breached an employment or other contract with such third party by
entering into this Agreement or (iii) claims that Employee is restricted from
accepting employment with Employer, or (iv) claims that Employer is by this
Agreement
interfering with a business or contractual relationship between Employee and any
third party, in each case to the extent a court of competent jurisdiction rules
in favor of such third party on the merits of such claim.

       

      
        
          Stephen
Barnhill Employment Agreement,

          
          

        

        
          Page
6

          
            

          

        

        
          
          

        

      

       

      (b)  Employer
hereby agrees to indemnify and hold harmless Employee from all costs arising
from (i) claims made by third parties that Employee breached an employment or
other contract with such third party by entering into this Agreement or (ii)
claims that Employee is restricted from accepting employment with Employer, or
(iii) claims that Employer is by this Agreement interfering with a business or
contractual relationship between Employee and any third party, in each case
provided that no court of competent jurisdiction rules in favor of such third
party on the merits of such claim.

      

      
        	
                9.

              	
                GENERAL
      PROVISIONS

              

      

      

      9.1           Notice - Any written
notice required under this Agreement shall be deemed received upon personal
delivery or three days after mailing by certified mail, with return receipt
requested, addressed to the party for which it is intended at the parties’
respective addresses or upon the next business day when deposited with a
nationally recognized express courier.

      

      9.2           Waiver and
Limitations - Employee’s failure to give written notice of any claim or
controversy within ninety (90) days shall constitute a waiver of the claim or
controversy.  The statute of limitations for all lawsuits arising
hereunder or related hereto or to Employer’s employment of Employee, or the
termination of Employee’s employment, for any and all claims, shall be two years
unless a shorter limitation period is otherwise fixed by the Governing
Law.

      

      9.3           Entire Agreement -
Understanding - This Agreement supersedes all other agreements or
understandings, either oral or written, between the parties with respect to
Employer’s employment of Employee.  Each party has read and understood
and voluntarily entered into this Agreement, which reflects the mutual
understandings of the parties and shall not be construed more strongly in favor
of or against either party.  Employee acknowledges that he has had the
opportunity to consult with an attorney about this Agreement, including without
limitation, the arbitration provision, before signing.

      

      9.4           Severability - The
invalidity or unenforceability of a particular provision of this Agreement shall
not affect the enforceability of any other provisions.

      

      9.5           Amendments - This
Agreement may only be amended in writing by an agreement executed by both
parties hereto.

      

      9.6           Waiver - Waiver by
any party of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach.

      

      9.7           Binding Effect -
Subject to the prohibition against assignment by Employee herein contained, this
Agreement and the terms and conditions herein shall inure to the benefit of and
be binding upon the parties hereto their successors, heirs and legal
representatives.

      

      9.8           Attorney’s Fees - If
any action at law or in equity is necessary to enforce or interpret the terms of
this Agreement, the prevailing party shall be awarded reasonable attorney’s
fees, costs and other expenses necessarily incurred.

      

      9.9           Injunctive Relief -
The covenants by Employee contained in Articles 6 and 7 shall be construed and
interpreted as agreements independent of any other provisions of this
Agreement.  The existence of any claim or cause of action by Employee
against Employer, whether predicated on this Agreement
or otherwise, shall not constitute a defense to Employer’s enforcement of such
covenants. Employee acknowledges and expressly agrees that breach of these
covenants would cause immediate and irreparable injury to Employer, the remedies
at law for breach of these covenants are inadequate, and that Employer is
entitled to injunctive relief to prevent a breach, stop a continuing breach or
prevent any further or recurring breach of these covenants, with a minimum bond,
and as to a temporary restraining order without notice.  The
provisions of Articles 6 and 7 shall survive any termination of Employee’s
employment and/or the termination of this Agreement.

       

      
        
          Stephen
Barnhill Employment Agreement,

          
          

        

        
          Page
7

          
            

          

        

        
          
          

        

      

       

      9.10          Governing Law - THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS
AND IS PERFORMABLE IN DALLAS COUNTY, TEXAS.

      

      9.11          Dispute Resolution
– If a dispute arises
between Employer and Employee regarding the implementation of this Agreement,
the parties agree to negotiate in good faith regarding a resolution of the
issues involved for at least thirty days.  If the parties fail to
resolve the dispute during this period of negotiation and either party initiates
proceedings to enforce its rights, Employer will immediately escrow $50,000 from
which Employee will be reimbursed for his reasonable litigation expenses monthly
upon presentation to the escrow agent of reasonable proof of
expenditure.  Employer will replenish this
escrow fund with an additional $25,000 whenever the balance falls below $10,000,
and will deposit appropriate interest for any late payments.  Any
amounts payable to Employee under this Section shall be grossed up to cover any
applicable income taxes.  Upon completion of any such proceedings,
unless the parties agree otherwise, the losing party will reimburse the winning
party’s reasonable attorney’s fees and costs incurred in the litigation, and if
Employee shall be the losing party, Employee shall reimburse Employer for
payments to him of his reasonable litigation expenses with appropriate interest
calculated from the date such reimbursement payments are due, which due date
shall not be less than five days form the date of the final judgement in such
litigation, until payment is made.   ALL DISPUTES ARISING OUT OF OR
RELATED TO THIS AGREEMENT OR TO EMPLOYER’S EMPLOYMENT OF EMPLOYEE OR THE
TERMINATION OF EMPLOYEE’S EMPLOYMENT SHALL BE SUBMITTED EXCLUSIVELY TO BINDING
ARBITRATION IN DALLAS, TEXAS, PURSUANT TO THE NATIONAL RULES FOR THE RESOLUTION
OF EMPLOYMENT DISPUTES OF THE AMERICAN ARBITRATION ASSOCIATION, provided
however that Employer shall be entitled to injunctive relief from any court of
jurisdiction against Employee’s breach of any covenant in Articles 6 and 7, and
further provided that this Agreement shall not require arbitration of any claim
for workers’ compensation benefits (although any claims arising under Texas
Labor Code § 450.001 shall be subject exclusively to arbitration) or any claim
for unemployment compensation.  Employee understands that agreeing to
arbitration waives the right to a jury trial.  Arbitral awards shall
be enforceable by any court of competent jurisdiction

      

      9.12          Counterparts - This
Agreement shall be executed in multiple originals, each of which shall be valid
as an original.

      

      9.13          Survival of Certain
Provisions – The provisions hereof, including without limitation those
contained in Articles 4, 7, 8 and Sections 9.8 and 9.11, which are to be
performed or observed after the termination of this Agreement and the covenants
and agreements of the parties contained herein with respect thereto shall
survive the termination of this Agreement and be effective according to their
terms.

       

      
        
          Stephen
Barnhill Employment Agreement,

          
          

        

        
          Page
8

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                EXECUTED
      this 15th
      day of September 2003.

              

      

      

      

      
        	
                 
      

              	
                EMPLOYER

              

      

      

      
        	
                 
      

              	
                DIRECT
      WIRELESS COMMUNICATIONS, INC.

              

      

      

      

       

      
        	 	BY:	/s/
      Bill G. Williams	 
	 	 	Bill
      G. Williams, Chairman and CEO	 
	 	 	 	 

      

       

      
        	
                 
      

              	
                EMPLOYEE

              

      

       

       

      
        
          	 	BY:	/s/
      Stephen Barnhill	 
	 	 	Stephen
      Barnhill	 
	 	 	 	 

        

      

       

       

      
        
          Stephen
Barnhill Employment Agreement,

          
          

        

        
          Page
9

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
A

      STOCK
OPTIONS

       

       

    

    

     

     

     

     

     

     

     

     

     

     

    
 

    Stephen
Barnhill Employment Agreement,

     

    Page
10ex10-14.htm

    
      

    

    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.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “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.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “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.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (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.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    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:

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

                                     

                                      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.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    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 

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (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.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

     

    
      	
              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.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    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	 

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
       

      
        	 	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. 

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    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]

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

     

    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	 

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    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.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    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.

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