power3_8k-ex1001.htm


    
      
        

      

    

    Exhibit
10.1

    
NEITHER
THIS PROMISSORY NOTE NOR THE SECURITIES ISSUABLE UPON CONVERSION OF THIS
PROMISSORY NOTE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAW.  NO SALE, TRANSFER, PLEDGE OR
ASSIGNMENT OF THIS NOTE OR SUCH SECURITIES SHALL BE VALID OR EFFECTIVE UNLESS
(A) SUCH TRANSFER IS MADE PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAW,
OR (B) SUCH TRANSFER IS MADE PURSUANT TO AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND OF ANY APPLICABLE STATE SECURITIES
LAW.

     

    
      	$______  	
              November 04,
      2008

            


    

     

     

    POWER3 MEDICAL PRODUCTS,
INC.

     

    CONVERTIBLE PROMISSORY
NOTE

     

    FOR GOOD
AND VALUABLE CONSIDERATION RECEIVED, the undersigned, POWER3 MEDICAL PRODUCTS,
INC., a New York corporation (“Maker"), hereby
unconditionally promises to pay to the order of
_________________________________ a resident of _________________ whose address
is ______________________ (together with such party's successors and permitted
assigns, "Holder"), in lawful
money of the United States of America at such place as Holder may direct, the
principal amount of _______________________________ ($_______) (the “Principal Amount”)
loaned by Holder to Maker under this Convertible Demand Promissory Note (the
"Note"),
together with accrued interest on the outstanding principal amount at such
interest rates and at such times as are specified in this Note.

     

    1.    Definitions.  Capitalized
terms used herein but not defined herein shall have the meanings specified in
Exhibit A
attached hereto.

     

    2.    The
Loan.

     

    2.1    Loan.  On
the date hereof, Holder has made a loan in the Principal Amount to Maker (the
“Loan”) and
pursuant to the terms and conditions of this Note.

     

    2.2    Interest.  The
Loan made under this Note shall bear interest from the date hereof until paid or
otherwise forgiven pursuant to the terms hereof at a rate equal to the lesser of
(a) twelve percent (12.0%) per annum until paid, commencing on November 4, 2008,
computed on the basis of a 360 day year consisting of 12 months of 30 days each
but for the actual number of days outstanding.  All past due principal
on this Note will bear interest from maturity (whether at scheduled maturity,
upon acceleration of maturity following an Event of Default (as defined below)
or otherwise) until paid at the Past Due Rate.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    NOTWITHSTANDING the foregoing or any
other term in this Note to the contrary, it is the intention of Holder and Maker
to conform strictly to any applicable usury laws.  Accordingly, if
Holder contracts for, charges, or receives any consideration in connection with
this Note which constitutes interest in excess of the Highest Lawful Rate, then
any such excess shall be canceled automatically and, if previously paid, shall
at Holder's option be applied to the Principal Amount or be refunded to
Maker.  In determining whether any interest exceeds the Highest Lawful
Rate, such interest shall, to the extent permitted by applicable law, be
amortized, prorated, allocated, and spread in equal parts throughout the term of
this Note.

     

    3.    Payments.

     

    3.1    Maturity
Date.  Subject to earlier conversion pursuant to Section 4.1, this
Note shall mature, and the Amount Outstanding shall be due and payable, on the
earlier to occur of (each a "Maturity Date") (i)
November 4, 2009 or (ii) the date on which the Loan is accelerated due to an
Event of Default pursuant to Section
6.2.  Subject to earlier conversion pursuant to Section 4, all
accrued and unpaid interest will be payable in arrears, upon the Maturity Date,
when all accrued and unpaid interest will be due and payable.

     

    3.2    Prepayments.  Maker
may not prepay this Note in whole or in part without giving Holder ten (10) days
prior written notice.

     

    3.3    Payments
Generally.  Unless otherwise stated, all monetary amounts
expressed under this Note and all payments due under this Note are expressed in
and shall be due in U.S. Dollars.  Maker shall make all payments
required under this Note not later than 12:00 noon, Houston, Texas time, on any
date when due at such location as is specified by Holder in writing in
immediately available funds.  Whenever any payment to be made under
this Note shall be stated to be due on a day other than a Business Day, such
payment shall be due and payable on the next succeeding Business
Day.  If the date for payment of any obligation is not specified in
this Note, such obligations shall be payable upon demand.  Any and all
payments by or on account of any obligation of Maker under this Note shall be
made without deduction for any taxes.

     

    4.    Conversion.

     

    4.1    Optional
Conversion.    Holder will have the option, in its
sole discretion, at any time prior to the Maturity Date, to convert all or any
portion of the Amount Outstanding into shares of the Common Stock, at a
conversion price equal to $0.03 per share.

     

    4.2    No Fractional
Shares.  No fractional shares of Common Stock will be issued
upon conversion of this Note.  In lieu of any fractional Shares to
which Holder would otherwise be entitled upon any such purchase, Maker will pay
Holder a cash amount equal to such fraction multiplied by the conversion price,
subject to adjustment for any stock splits, stock dividends, reverse stock
splits, combinations or other adjustments to the Common Stock.

     

    4.3    No
Impairment.  Maker will not, by amendment of its certificate of
incorporation, bylaws, or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by Maker, but will at all times
in good faith assist in the carrying out of all the provisions of this Section 4 and in the
taking of all such action as may be necessary or appropriate in order to protect
the purchase rights of Holder hereunder against impairment.

     

    
      
        
        

      

      
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    5.    Covenants.

     

    5.1    Company
Fundamentals.  Maker shall: (a) pay when due all taxes and
governmental charges of every kind upon it or against its income, profits, or
property, except to the extent contested in good faith and for which adequate
reserves have been established; (b) renew, preserve, maintain, and pay when
due all fees related to, and keep in full force and effect, all of its material
licenses, patents, permits, and franchises; (c) do all things necessary to
preserve its entity existence and its qualifications and rights in all
jurisdictions where such qualification is necessary; (d) comply with all
applicable laws and regulations; and (e) maintain accurate and complete
books and records of its business affairs.

     

    5.2    Matters Requiring
Notice.  For so long as there is any Amount Outstanding, Maker
will notify Holder immediately, upon acquiring knowledge of (a) the
institution or threatened institution of any lawsuit or administrative
proceeding which, if adversely determined, might result in a Material Adverse
Change or (b) any Event of Default.

     

    5.3    Further
Assurances.  Maker will execute such additional instruments as
may be requested by Holder in order to carry out the intent of this Note, and to
perfect or give further assurances of any of the rights granted or provided for
in this Note.

     

    5.4    Use of
Proceeds.  Maker shall use the proceeds of the Loans only for
working capital and general corporate purposes.

     

    6.    Default and
Remedies.

     

    6.1    Events of
Default.  The occurrence of any of the following shall
constitute an "Event
of Default" hereunder:

     

    6.1.1 Maker
fails to pay when due any principal, interest, or other amount due under this
Note, or otherwise fails to comply with the terms of this Note;

     

    6.1.2 Any
representation or warranty made in this Note proves to have been untrue or
misleading in any material respect as of the date made;

     

    6.1.3 Maker or
any present or future Affiliate, shareholder, or creditor of Maker shall
commence any action, suit, or proceeding against or affecting Maker, or
involving the validity or enforceability of the Note, at law or in equity, or
before any governmental authority, which in the sole judgment of Holder, impairs
or would impair the enforceability of the Note or Holder's ability to collect
the Obligations when due;

     

    6.1.4 Maker
shall be prevented or relieved by any governmental authority from performing or
observing any material term, covenant, or condition of the Note;

     

    6.1.5 There
shall be or have been a Material Adverse Change; or

     

    6.1.6 There
shall be or have been a Bankruptcy Event.

     

    6.2    Acceleration.  If
an Event of Default due to a Bankruptcy Event shall have occurred, then, and in
any such event, the unpaid Amount Outstanding shall automatically become and be
forthwith due and payable in full, without notice of intent to demand,
presentment for payment, notice of nonpayment, protest, notice of protest,
grace, notice of dishonor, notice of intent to accelerate, notice of
acceleration, and all other notices, all of which are hereby expressly waived by
Maker.  If any other Event of Default shall have occurred and be
continuing, then, and in any such event, Holder may declare the unpaid Amount
Outstanding to be immediately due and payable and thereupon the Amount
Outstanding shall be immediately due and payable without notice of intent to
demand, presentment for payment, notice of nonpayment, protest, notice of
protest, grace, notice of dishonor, notice of intent to accelerate, notice of
acceleration, and all other notices, all of which are hereby expressly waived by
Maker.

     

    
      
        
        

      

      
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    6.3    Remedies.  During
the continuation of an Event of Default, Holder may exercise all of its rights
under this Note and all other rights at law or in equity.

     

    7.    Representations and
Warranties of Holder.  Holder hereby represents and warrants to
Maker that: (i) this Note and the Common Stock issuable upon conversion hereof
are being acquired for its own account, for investment and not with a view to,
or for resale in connection with, any distribution or public offering thereof
within the meaning of the Securities Act of 1933, as amended (the "Act"), (ii)
Holder understands that this Note and the Common Stock issuable upon conversion
hereof have not been registered under the Act by reason of their issuance in a
transaction exempt from the registration and prospectus delivery requirements of
the Act pursuant to Section 4(2) thereof, and that they must be held by Holder
indefinitely, and that Holder must therefore bear the economic risk of such
investment indefinitely, unless a subsequent disposition thereof is registered
under the Act or is exempted from such registration, (iii) Holder has such
knowledge and experience in financial and business matters that it is capable of
evaluating the merits and risks of the purchase of this Note and the Common
Stock issuable upon conversion hereof and of protecting its interests in
connection therewith, (iv) Holder is able to bear the economic risk of the
purchase of this Note and the Common Stock issuable upon conversion of this
Note, and (v) Holder is an “accredited investor” as such term is defined in Rule
501 of Regulation D promulgated under the Act.

     

    8.    Miscellaneous.

     

    All notices and other communications
made under this Note shall be addressed to the applicable party at the following
address:

     

    
      	
              If to
      Maker:

               

              Power3
      Medical Technologies, Inc.

              3400
      Research Forest Dr., Ste B2-3

              The
      Woodlands, Texas 77381

              Attn:
      Ira L. Goldknopf, President

            	
              If to
      Holder:

               

              ________________

              ________________

              ________________

               

            


    

     

    Notices
shall, unless otherwise specified herein, be in writing and may be delivered by
hand delivery, United States mail, overnight courier service, or facsimile or
e-mail.  Notice by facsimile, hand delivery, or e-mail shall be
effective at the close of business on the day actually received, if received
during business hours on a Business Day, and otherwise shall be effective at the
close of business on the next Business Day; provided that e-mail shall not be
considered received until sender's receipt of an acknowledgement from the
intended recipient (such as by the "return receipt requested" function, as
available, return e-mail, or other written acknowledgement).  Notice
by overnight United States mail or courier shall be effective on the next
Business Day after it was sent.  A party may change its addresses by
providing notice of same in accordance herewith.

     

    
      
        
        

      

      
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    No right, power, or remedy conferred to
Holder in this Note or now or hereafter existing at law, in equity, by statute,
or otherwise shall be exclusive, and each such right, power, or remedy shall to
the fullest extent permitted by law be cumulative and in addition to every other
such right, power, or remedy.  No course of dealing and no delay in
exercising any right, power, or remedy conferred to Holder shall operate as a
waiver of or otherwise prejudice any such right, power, or remedy.  No
notice to or demand upon Maker shall entitle Maker to similar notices or demands
in the future.

     

    This Note
shall be governed by the laws of the State of Texas.  If any provision
in this Note is held to be unenforceable, such provision shall be severed and
the remaining provisions shall remain in full force and effect.  The
provisions of this Note may be waived or amended only in a writing signed by the
party against whom enforcement of the waiver or amendment is
sought.  This Note shall bind and inure to the benefit of Maker and
Holder and their respective successors and permitted assigns.  Neither
party may assign its rights or delegate its duties under this Note without the
prior written consent of the other party, except that Holder may assign its
rights and delegate its duties under this Note to an Affiliate without the
consent of Maker.  Time is of the essence of this
Agreement.

     

    HOLDER
HEREBY ACKNOWLEDGES AND CERTIFIES TO MAKER THAT (A) HOLDER HAS BEEN ADVISED BY
MAKER TO SEEK THE ADVICE OF AN ATTORNEY AND AN ACCOUNTANT IN CONNECTION WITH
THIS NOTE AND (B) HOLDER HAS HAD THE OPPORTUNITY TO SEEK THE ADVICE OF AN
ATTORNEY AND ACCOUNTANT OF HOLDER'S CHOICE IN CONNECTION WITH THIS NOTE
(INCLUDING THE RIGHTS GRANTED HEREIN).

     

    THIS
NOTE EMBODIES THE FINAL, ENTIRE AGREEMENT BETWEEN HOLDER AND MAKER AND
SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OR DISCUSSIONS OF HOLDER AND MAKER.

     

    *
* * * *

     

     

    
      
        
        

      

      
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    [SIGNATURE
PAGE TO CONVERTIBLE PROMISSORY NOTE]

    


    IN
WITNESS WHEREOF, Maker has duly executed this Convertible Promissory Note as of
the date first above written.

     

    
    

     

    
      	 	POWER3 MEDICAL
      TECHNOLOGIES, INC. 
	 	 
	 	
              By:
      __________________________  

            
	 	
              Ira
      L. Goldknopf, President 

            


    

     

    


    ACCEPTED
BY:

    
 

    By:
_____________________________

    Name:
_________________

    


     

     

    
      
        
        

      

      
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EXHIBIT
A

    


    DEFINITIONS

    


    "Affiliate" means,
with respect to a specified Person, another Person that directly, or indirectly
through one or more intermediaries, Controls or is Controlled by or is under
common Control with the Person specified, including, without limitation, an
investment fund that is managed or sponsored by the Person in
question.

     

    "Aggregate Accrued
Interest" means the aggregate of any and all accrued and unpaid interest
under this Note.

     

    "Amount Outstanding"
means the sum of the Principal Amount and the Aggregate Accrued
Interest.

     

    "Bankruptcy Event"
means (a) any petition or other request for relief seeking an arrangement,
receivership, reorganization, liquidation, or similar relief under bankruptcy or
other laws for the relief of debtors that shall have been filed against Maker or
any of its properties, without Maker's consent, and such request for relief (i)
remains in effect for 30 or more days, whether or not consecutive, or (ii) is
approved by a final nonappealable order or (b) Maker consents to or files any a
petition or other request for relief of the type described in clause (a) above
seeking relief from creditors, makes any assignment for the benefit of creditors
or other arrangement with creditors, or admits in writing its inability to pay
its debts as they become due.

     

    "Business Day" means a
day other than a Saturday, Sunday, or any other day on which commercial banks in
Houston, Texas, are authorized or required by law to remain closed.

     

    "Control" and "Controlled" mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the ability
to exercise voting power, by contract or otherwise, which includes customary
powers of a manager of any limited liability company or any general partner of
any limited partnership or any board of directors of any
corporation.

     

    "Highest Lawful Rate"
means the maximum lawful interest rate that may be contracted for, charged, or
received under the laws applicable to this Note which are presently in effect
or, to the extent allowed by law, under such applicable laws which may hereafter
be in effect and which allow a higher maximum lawful interest rate.

     

    "Material Adverse
Change" means (a) any material adverse change in the assets, liabilities,
financial condition, business, or affairs of Maker after the date hereof or (b)
a material adverse effect on Maker's ability to perform the
Obligations.

     

    “Common Stock” means
the Common Stock, $0.001 par value, of Maker.

     

    "Obligations" means
all loans to, and debts, liabilities, obligations, covenants, and duties of,
Maker to Holder or its Affiliates arising under this Note, including interest
and fees that accrue after the commencement by or against Maker or any Affiliate
thereof of any proceeding under any debtor relief laws naming such Person as the
debtor in such proceeding, regardless of whether such interest and fees are
allowed claims in such proceeding.

     

    
      
        
        

      

      
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    "Past Due Rate" means
a rate per annum equal to the lesser of (a) 18% and (b) the Highest Lawful
Rate.

     

    "Person" means any
natural person, corporation, limited liability company, trust, joint venture,
association, company, partnership, governmental authority, or other
entity.

     

     

     

     

     

     

    A-2