**Exhibit4.3**

** **

**EXHIBIT E**

 

NEITHER THIS SECURITY NORTHE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTEREDWITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANYSTATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACTOF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOTBE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDERTHE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTIONNOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND INACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGALOPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICHSHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITYMAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOANSECURED BY SUCH SECURITIES.

 

**ADDITIONALINVESTMENT RIGHT**

 

To Purchase $         principal amount of Convertible Debentures of

 

**Power 3 MedicalProducts, Inc.**

 

THIS ADDITIONALINVESTMENT RIGHT (the “AIR”) certifies that, for value received,                  (the “Holder”), is entitled, upon the terms and subject to thelimitations on exercise and the conditions hereinafter set forth, at any timeon or after the date hereof (the “Initial Exercise Date”) and on orprior to the close of business on the earlier of (a) 9 month anniversaryof the Effective Date and (b) the 18 month anniversary of the InitialExercise Date (the “Termination Date”) but not thereafter, to subscribefor and purchase from Power 3 Medical Products, Inc., a New Yorkcorporation (the “Company”), up to $                principal amount of convertible debentures (the “AIR Debenture”).  The AIR Debenture shall be in the form of theDebentures issued pursuant to the Purchase Agreement, *mutatis mutandis*, except that theconversion price thereof shall be equal to $         (1),subject to adjustment thereunder and hereunder (“AIR Conversion Price”).

 

# Section 1.               Definitions.  Capitalized terms used and not otherwisedefined herein shall have the meanings set forth in that certain SecuritiesPurchase Agreement (the “Purchase Agreement”), dated October    ,2004, among the Company and the purchasers signatory thereto.

 

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(1)  90% of the Market Price.

 

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# Section 2.               Exercise.

 

## a)             Exerciseof AIR.  Exercise of the purchaserights represented by this AIR may be made at any time or times on or after theInitial Exercise Date and on or before the Termination Date by delivery to theCompany of a duly executed facsimile copy of the Notice of Exercise Form annexedhereto (or such other office or agency of the Company as it may designate bynotice in writing to the registered Holder at the address of such Holderappearing on the books of the Company) and the payment of the aggregateprincipal amount of the AIR Debentures thereby purchased by wire transfer orcashier’s check drawn on a United States bank. Upon exercise of the AIR, the Company shall issue an AIR Debenture witha principal amount equal to the amount paid by the Holder.

##  

## b)            Mechanicsof Exercise.

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### i.              Authorizationof AIR Debenture.  The Companycovenants that during the period this AIR is outstanding, it will reserve fromits authorized and unissued Common Stock a sufficient number of shares toprovide for the issuance of all of the shares of Common Stock underlying theAIR Debenture (the “AIR Debenture Shares”).  The Company further covenants that itsissuance of this AIR shall constitute full authority to its officers who arecharged with the duty of executing certificates to execute and issue thenecessary certificates for the AIR Debenture upon the exercise of the purchaserights under, and in accordance with the terms of, this AIR and Common Stockcertificates upon conversion of the AIR Debentures. The Company covenants thatthe AIR Debenture which may be issued upon the exercise of the purchase rightsrepresented by this AIR and the AIR Debenture Shares issuable thereunder will,upon exercise of the purchase rights represented by this AIR, be dulyauthorized, validly issued, fully paid and nonassessable and free from alltaxes, liens and charges in respect of the issue thereof (other than taxes inrespect of any transfer occurring contemporaneously with such issue).  The Company will take all such reasonableaction as may be necessary to assure that the AIR Debenture and AIR DebentureShares may be issued as provided herein without violation of any applicable lawor regulation, or of any requirements of the Trading Market upon which theCommon Stock may be listed.

###  

### ii.             Deliveryof Certificates Upon Exercise. Certificates for the AIR Debenture purchased hereunder shall bedelivered to the Holder within 3 Trading Days from the delivery to the Companyof the Notice of Exercise Form, surrender of this AIR and payment of theprincipal amount as set forth above (“AIR Debenture Delivery Date”).  This AIR shall be deemed to have beenexercised on the date the payment of the principal amount is received by theCompany.  The AIR Debenture shall bedeemed to have been issued, and Holder or any other person so designated to benamed therein shall be deemed to have become a holder of record of such

 

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### security for all purposes, as of the date the AIR has been exercised bypayment to the Company of the principal amount and all taxes required to bepaid by the Holder, if any, pursuant to Section 2(b)(v) prior to theissuance of such security, have been paid.

###  

### iii.            Deliveryof New AIRs Upon Exercise.  If thisAIR shall have been exercised in part, the Company shall, at the time ofdelivery of the certificate or certificates representing the AIR Debenture,deliver to Holder a new AIR evidencing the rights of Holder to purchase theremaining principal amount of the AIR Debenture called for by this AIR, whichnew AIR shall in all other respects be identical with this AIR.

###  

### iv.            RescissionRights.  If the Company fails todeliver to the Holder a certificate or certificates representing the AIRDebenture pursuant to this Section 2(b)(iv) by the AIR DebentureDelivery Date, then the Holder will have the right to rescind such exercise.

###  

### v.             Charges,Taxes and Expenses.  Issuance ofcertificates for AIR Debentures shall be made without charge to the Holder forany issue or transfer tax or other incidental expense in respect of theissuance of such certificate, all of which taxes and expenses shall be paid bythe Company, and such certificates shall be issued in the name of the Holder orin such name or names as may be directed by the Holder; provided, however,that in the event certificates for AIR Debentures are to be issued in a nameother than the name of the Holder, this AIR when surrendered for exercise shallbe accompanied by the Assignment Form attached hereto duly executed by theHolder; and the Company may require, as a condition thereto, the payment of asum sufficient to reimburse it for any transfer tax incidental thereto.

###  

### vi.            Closingof Books.  The Company will not closeits records in any manner which prevents the timely exercise of this AIR,pursuant to the terms hereof or the conversion of the AIR Debentures pursuantto the terms thereof.

###  

# Section 3.               CertainAdjustments.

#  

## a)             StockDividends and Splits. If the Company, at any time while this AIR isoutstanding: (A) pays a stock dividend or otherwise make a distribution ordistributions on shares of its Common Stock or any other equity or equityequivalent securities payable in shares of Common Stock (which, for avoidanceof doubt, shall not include any shares of Common Stock issued by the Companypursuant to the AIR Debentures, the Debentures or the Warrants), (B) subdividesoutstanding shares of Common Stock into a larger number of shares, (C) combines(including by way of reverse stock split) outstanding shares of Common Stockinto a smaller number of shares, or (D) issues by reclassification ofshares of the Common Stock any shares of capital stock of the Company, then ineach

 

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## case the AIR Conversion Price shall be multiplied by a fraction ofwhich the numerator shall be the number of shares of Common Stock (excludingtreasury shares, if any) outstanding before such event and of which thedenominator shall be the number of shares of Common Stock outstanding aftersuch event.  Any adjustment made pursuantto this Section 3(a) shall become effective immediately after therecord date for the determination of stockholders entitled to receive suchdividend or distribution and shall become effective immediately after theeffective date in the case of a subdivision, combination or re-classification.

##  

## b)            SubsequentEquity Sales. If the Company or any Subsidiary thereof, as applicable, atany time while this AIR is outstanding, shall offer, sell, grant any option topurchase or offer, sell or grant any right to reprice its securities, orotherwise dispose of or issue (or announce any offer, sale, grant or any optionto purchase or other disposition) any Common Stock or Common Stock Equivalentsentitling any Person to acquire shares of Common Stock, at an effective priceper share less than the then AIR Conversion Price (such lower price, the “BaseShare Price” and such issuances collectively, a “Dilutive Issuance”),as adjusted hereunder (if the holder of the Common Stock or Common StockEquivalents so issued shall at any time, whether by operation of purchase priceadjustments, reset provisions, floating conversion, exercise or exchange pricesor otherwise, or due to warrants, options or rights per share which is issuedin connection with such issuance, be entitled to receive shares of Common Stockat an effective price per share which is less than the AIR Conversion Price,such issuance shall be deemed to have occurred for less than the AIR ConversionPrice), then, the AIR Conversion Price shall be reduced to equal the Base SharePrice.  Such adjustment shall be madewhenever such Common Stock or Common Stock Equivalents are issued.  The Company shall notify the Holder inwriting, no later than the business day following the issuance of any CommonStock or Common Stock Equivalents subject to this section, indicating thereinthe applicable issuance price, or of applicable reset price, exchange price,conversion price and other pricing terms.

##  

## c)             ProRata Distributions. If the Company, at any time while this AIR isoutstanding, distributes to all holders of Common Stock (and not to Holders)evidences of its indebtedness or assets or rights or warrants to subscribe foror purchase any security other than the Common Stock (which shall be subject toSection 3(b)), then in each such case the AIR Conversion Price shall bedetermined by multiplying such AIR Conversion Price in effect immediately priorto the record date fixed for determination of stockholders entitled to receivesuch distribution by a fraction of which the denominator shall be the ClosingPrice determined as of the record date mentioned above, and of which thenumerator shall be such Closing Price on such record date less the then fairmarket value at such record date of the portion of such assets or evidence ofindebtedness so distributed applicable to one outstanding share of the CommonStock as determined by the Board of Directors in good faith.  In either case the adjustments shall bedescribed in a statement provided to the Holder of the portion of assets orevidences of indebtedness so distributed or such subscription rights applicableto

 

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## one share of Common Stock.  Suchadjustment shall be made whenever any such distribution is made and shallbecome effective immediately after the record date mentioned above.

##  

## d)            Calculations.All calculations and adjustments to the AIR Conversion Price under this Section 3shall be made to the nearest cent or the nearest 1/100th of a share, as thecase may be.  For purposes of this Section 3,the number of shares of Common Stock outstanding as of a given date shall bethe sum of the number of shares of Common Stock (excluding treasury shares, ifany) outstanding.

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## e)             Noticeto Holders.

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### i.              Adjustmentto AIR Conversion Price. Whenever the AIR Conversion Price is adjustedpursuant to this Section 3, the Company shall promptly mail to each Holdera notice setting forth the AIR Conversion Price after such adjustment andsetting forth a brief statement of the facts requiring such adjustment.

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### ii.             Noticeto Allow Exercise by Holder. If (A) the Company shall declare adividend (or any other distribution) on the Common Stock; (B) the Companyshall declare a special nonrecurring cash dividend on or a redemption of theCommon Stock; (C) the Company shall authorize the granting to all holdersof the Common Stock rights or warrants to subscribe for or purchase any sharesof capital stock of any class or of any rights; (D) the approval of anystockholders of the Company shall be required in connection with anyreclassification of the Common Stock, any consolidation or merger to which theCompany is a party, any sale or transfer of all or substantially all of theassets of the Company, of any compulsory share exchange whereby the CommonStock is converted into other securities, cash or property; (E) theCompany shall authorize the voluntary or involuntary dissolution, liquidationor winding up of the affairs of the Company; then, in each case, the Companyshall cause to be mailed to the Holder at its last addresses as it shall appearupon the AIR Register of the Company, at least 20 calendar days prior to theapplicable record or effective date hereinafter specified, a notice stating (x)the date on which a record is to be taken for the purpose of such dividend,distribution, redemption, rights or warrants, or if a record is not to betaken, the date as of which the holders of the Common Stock of record to beentitled to such dividend, distributions, redemption, rights or warrants are tobe determined or (y) the date on which such reclassification, consolidation,merger, sale, transfer or share exchange is expected to become effective or close,and the date as of which it is expected that holders of the Common Stock ofrecord shall be entitled to exchange their shares of the Common Stock forsecurities, cash or other property deliverable upon such reclassification,consolidation, merger, sale, transfer or share exchange; provided, thatthe failure to mail such notice or any

 

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### defect therein or in the mailing thereof shall not affect the validityof the corporate action required to be specified in such notice.  The Holder is entitled to exercise this AIRduring the 20-day period commencing the date of such notice to the effectivedate of the event triggering such notice.

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## f)             FundamentalTransaction. If, at any time while this AIR is outstanding, (A) theCompany effects any merger or consolidation of the Company with or into anotherPerson, (B) the Company effects any sale of all or substantially all ofits assets in one or a series of related transactions, (C) any tenderoffer or exchange offer (whether by the Company or another Person) is completedpursuant to which holders of Common Stock are permitted to tender or exchangetheir shares for other securities, cash or property, or (D) the Companyeffects any reclassification of the Common Stock or any compulsory shareexchange pursuant to which the Common Stock is effectively converted into orexchanged for other securities, cash or property (in any such case, a “FundamentalTransaction”), then, upon anysubsequent exercise of this AIR the Holder shallhave the right to receive upon conversion of the AIR Debenture, for eachAIR Debenture Share that would have been issuable upon such exercise and thensubsequent conversion absent such Fundamental Transaction shares of Common Stock of the successor or acquiringcorporation or of the Company, if it is the surviving corporation, andAlternate Consideration receivable upon or as a result of such reorganization,reclassification, merger, consolidation or disposition of assets by a Holder ofthe number of shares of Common Stock for which the underlying AIR Debenturesare convertible immediately prior to such event (the “AlternateConsideration”).  For purposes of anysuch deemed conversion, the determination of the AIR Conversion Price shall beappropriately adjusted to apply to such Alternate Consideration based on theamount of Alternate Consideration issuable in respect of one share of CommonStock in such Fundamental Transaction, and the Company shall apportion the AIRConversion Price among the Alternate Consideration in a reasonable mannerreflecting the relative value of any different components of the AlternateConsideration.  If holders of CommonStock are given any choice as to the securities, cash or property to bereceived in a Fundamental Transaction, then the Holder shall be given the samechoice as to the Alternate Consideration it receives upon any conversion of theAIR Debenture underlying this AIR following such Fundamental Transaction.  To the extent necessary to effectuate theforegoing provisions, any successor to the Company or surviving entity in suchFundamental Transaction shall issue to the Holder a new additional investmentright consistent with the foregoing provisions and evidencing the Holder’sright to exercise such additional investment right ultimately into AlternateConsideration. The terms of any agreement pursuant to which a FundamentalTransaction is effected shall include terms requiring any such successor orsurviving entity to comply with the provisions of this paragraph (f) andinsuring that this AIR (or any such replacement security) will be similarlyadjusted upon any subsequent transaction analogous to a FundamentalTransaction.

 

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## g)            ExemptIssuance. Notwithstanding the foregoing, no adjustments, AlternateConsideration nor notices shall be made, paid or issued under this Section 3in respect of an Exempt Issuance.

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## h)            VoluntaryAdjustment By Company. The Company may at any time during the term of thisAIR reduce the then current AIR Conversion Price to any amount and for anyperiod of time deemed appropriate by the Board of Directors of the Company.

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# Section 4.               Transferof AIR.

#  

## a)             Transferability.  Subject to compliance with any applicablesecurities laws and the conditions set forth in Sections 5(a) and 4(d) hereofand to the provisions of Section 4.1 of the Purchase Agreement, this AIRand all rights hereunder are transferable, in whole or in part, upon surrenderof this AIR at the principal office of the Company, together with a writtenassignment of this AIR substantially in the form attached hereto duly executedby the Holder or its agent or attorney and funds sufficient to pay any transfertaxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shallexecute and deliver a new AIR or AIRs in the name of the assignee or assigneesand in the denomination or denominations specified in such instrument ofassignment, and shall issue to the assignor a new AIR evidencing the portion ofthis AIR not so assigned, and this AIR shall promptly be cancelled.  An AIR, if properly assigned, may beexercised by a new holder for the purchase of AIR Debentures without having anew AIR issued.

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## b)            NewAIRs. This AIR may be divided or combined with other AIRs upon presentationhereof at the aforesaid office of the Company, together with a written noticespecifying the names and denominations in which new AIRs are to be issued,signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer whichmay be involved in such division or combination, the Company shall execute anddeliver a new AIR or AIRs in exchange for the AIR or AIRs to be divided orcombined in accordance with such notice.

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## c)             AIRRegister. The Company shall register this AIR, upon records to bemaintained by the Company for that purpose (the “AIR Register”), in thename of the record Holder hereof from time to time.  The Company may deem and treat the registeredHolder of this AIR as the absolute owner hereof for the purpose of any exercisehereof or any distribution to the Holder, and for all other purposes, absentactual notice to the contrary

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## d)            TransferRestrictions. If,at the time of the surrenderof this AIR in connection with any transfer of this AIR, the transfer of thisAIR shall not be registered pursuant to an effective registration statement under the Securities Actand under applicable statesecurities or blue sky laws, the Company may require, as a condition of allowingsuch transfer (i) that the Holder or transferee of this

 

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## AIR, as the case may be,furnish to the Company a written opinion of counsel (which opinion shall be inform, substance and scope customary for opinions of counsel in comparabletransactions) to the effect that such transfer may be made withoutregistration under theSecurities Act and under applicable state securities or blue sky laws, (ii) thatthe holder or transferee execute and deliver to the Company an investmentletter in form and substance acceptable to the Company and (iii) that thetransferee be an “accredited investor” as defined in Rule 501(a)(1),(a)(2), (a)(3), (a)(7), or (a)(8) promulgated under the Securities Act ora qualified institutional buyer as defined in Rule 144A(a) under theSecurities Act.

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# Section 5.               Miscellaneous.

#  

## a)             Titleto the Additional Investment Right. Prior to the Termination Date and subject to compliance with applicablelaws and Section 4 of this AIR, this AIR and all rights hereunder aretransferable, in whole or in part, at the office or agency of the Company bythe Holder in person or by duly authorized attorney, upon surrender of this AIRtogether with the Assignment Form annexed hereto properly endorsed.  The transferee shall sign an investmentletter in form and substance reasonably satisfactory to the Company.

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## b)            NoRights as Creditor/Debentureholder or Shareholder Until Exercise.  This AIR does not entitle the Holder to anyrights as a creditor of the Company pursuant to the AIR Debenture prior to theexercise hereof nor does this AIR entitle the Holder to any voting rights orother rights as a shareholder of the Company prior to any conversion of the AIRDebenture.  Upon the surrender of thisAIR and the payment of the aggregate principal amount, the AIR Debentures sopurchased shall be and be deemed to be issued to such Holder as the recordowner of such AIR Debentures as of the close of business on the later of thedate of such surrender or payment.

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## c)             Loss,Theft, Destruction or Mutilation of AIR. The Company covenants that uponreceipt by the Company of evidence reasonably satisfactory to it of the loss,theft, destruction or mutilation of this AIR or any certificate relating to theAIR Debentures, and in case of loss, theft or destruction, of indemnity orsecurity reasonably satisfactory to it (which, in the case of the AIR, shallnot include the posting of any bond), and upon surrender and cancellation ofsuch AIR or certificate, if mutilated, the Company will make and deliver a newAIR or certificate of like tenor and dated as of such cancellation, in lieu ofsuch AIR or certificate.

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## d)            Saturdays,Sundays, Holidays, etc.  If the lastor appointed day for the taking of any action or the expiration of any rightrequired or granted herein shall be a Saturday, Sunday or a legal holiday, thensuch action may be taken or such right may be exercised on the next succeedingday not a Saturday, Sunday or legal holiday.

 

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## e)             AuthorizedShares.

##  

The Company covenantsthat during the period the AIR is outstanding, it will reserve from itsauthorized and unissued Common Stock a sufficient number of shares to providefor the issuance of the shares of Common Stock issuable upon conversion of theAIR Debenture.  The Company furthercovenants that its issuance of this AIR shall constitute full authority to itsofficers who are charged with the duty of executing certificates to execute andissue the necessary certificates for the AIR Debentures upon the exercise ofthe purchase rights under, and in accordance with the terms of, this AIR.  The Company will take all such reasonableaction as may be necessary to assure that such AIR Debentures and AIR DebentureShares may be issued as provided herein without violation of any applicable lawor regulation, or of any requirements of the Trading Market upon which theCommon Stock may be listed.

 

Except and to the extentas waived or consented to by the Holder, the Company shall not by any action,including, without limitation, amending its certificate of incorporation orthrough any reorganization, transfer of assets, consolidation, merger,dissolution, issue or sale of securities or any other voluntary action, avoidor seek to avoid the observance or performance of any of the terms of this AIRor the AIR Debentures, but will at all times in good faith assist in thecarrying out of all such terms and in the taking of all such actions as may benecessary or appropriate to protect the rights of Holder as set forth in thisAIR and the AIR Debenture against impairment. Without limiting the generality of the foregoing, the Company will (a) takeall such action as may be necessary or appropriate in order that the Companymay validly and legally issue fully paid and nonassessable AIR Debentures uponthe exercise of this AIR and AIR Debenture Shares upon conversion of the AIRDebentures, and (b) use commercially reasonable efforts to obtain all suchauthorizations, exemptions or consents from any public regulatory body havingjurisdiction thereof as may be necessary to enable the Company to perform itsobligations under this AIR and the AIR Debentures.

 

Before taking any actionwhich would result in an adjustment in the AIR Debentures for which this AIR isexercisable or in the AIR Conversion Price, the Company shall obtain all suchauthorizations or exemptions thereof, or consents thereto, as may be necessaryfrom any public regulatory body or bodies having jurisdiction thereof.

 

## f)             GoverningLaw. All questions concerning the construction, validity, enforcement andinterpretation of this AIR shall be governed by and construed and enforced inaccordance with the internal laws of the State of New York, without regard tothe principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning theinterpretations, enforcement and defense of the transactions contemplated bythis AIR (whether brought against a

 

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## party hereto or its respective affiliates, directors, officers,shareholders, employees or agents) shall be commenced exclusively in the stateand federal courts sitting in the City of New York.  Each party hereby irrevocably submits to theexclusive jurisdiction of the state and federal courts sitting in the City ofNew York, borough of Manhattan for the adjudication of any dispute hereunder orin connection herewith or with any transaction contemplated hereby or discussedherein, and hereby irrevocably waives, and agrees not to assert in any suit,action or proceeding, any claim that it is not personally subject to thejurisdiction of any such court, that such suit, action or proceeding isimproper or inconvenient venue for such proceeding.  Each party hereby irrevocably waives personalservice of process and consents to process being served in any such suit,action or proceeding by mailing a copy thereof via registered or certified mailor overnight delivery (with evidence of delivery) to such party at the addressin effect for notices to it under this AIR and agrees that such service shallconstitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed tolimit in any way any right to serve process in any manner permitted bylaw.  The parties hereby waive, to thefullest extent permitted by applicable law, all rights to a trial by jury.  If either party shall commence an action orproceeding to enforce any provisions of this AIR, then the prevailing party insuch action or proceeding shall be reimbursed by the other party for itsattorneys’ fees and other costs and expenses incurred with the investigation,preparation and prosecution of such action or proceeding.

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## g)            Restrictions.  The Holder acknowledges that the AIR Debenturesacquired upon the exercise of this AIR, if not registered, will haverestrictions upon resale imposed by state and federal securities laws.

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## h)            Nonwaiverand Expenses.  No course of dealingor any delay or failure to exercise any right hereunder on the part of Holdershall operate as a waiver of such right or otherwise prejudice Holder’s rights,powers or remedies, notwithstanding the fact that all rights hereunderterminate on the Termination Date.  Ifthe Company willfully and knowingly fails to comply with any provision of thisAIR, which results in any material damages to the Holder, the Company shall payto Holder such amounts as shall be sufficient to cover any costs and expensesincluding, but not limited to, reasonable attorneys’ fees, including those ofappellate proceedings, incurred by Holder in collecting any amounts duepursuant hereto or in otherwise enforcing any of its rights, powers or remedieshereunder.

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## i)              Notices.  Any notice, request or other documentrequired or permitted to be given or delivered to the Holder by the Companyshall be delivered in accordance with the notice provisions of the PurchaseAgreement.

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## j)              Limitationof Liability.  No provision hereof,in the absence of any affirmative action by Holder to exercise this AIR orpurchase AIR Debentures, and no enumeration herein of the rights or privilegesof Holder, shall give rise to any liability of Holder for the purchase price ofany AIR Debenture or any AIR

 

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## Debenture Shares or as a stockholder of the Company, whether suchliability is asserted by the Company or by creditors of the Company.

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## k)             Remedies.  Holder, in addition to being entitled toexercise all rights granted by law, including recovery of damages, will beentitled to specific performance of its rights under this AIR.  The Company agrees that monetary damageswould not be adequate compensation for any loss incurred by reason of a breachby it of the provisions of this AIR and hereby agrees to waive the defense inany action for specific performance that a remedy at law would be adequate.

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## l)              Successorsand Assigns.  Subject to applicablesecurities laws, this AIR and the rights and obligations evidenced hereby shallinure to the benefit of and be binding upon the successors of the Company andthe successors and permitted assigns of Holder. The provisions of this AIR are intended to be for the benefit of allHolders from time to time of this AIR and shall be enforceable by any suchHolder or holder of AIR Debentures.

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## m)            Amendment.  This AIR may be modified or amended or theprovisions hereof waived with the written consent of the Company and theHolder.

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## n)            Severability.  Wherever possible, each provision of this AIRshall be interpreted in such manner as to be effective and valid underapplicable law, but if any provision of this AIR shall be prohibited by orinvalid under applicable law, such provision shall be ineffective to the extentof such prohibition or invalidity, without invalidating the remainder of suchprovisions or the remaining provisions of this AIR.

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## o)            Headings.  The headings used in this AIR are for theconvenience of reference only and shall not, for any purpose, be deemed a partof this AIR.

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IN WITNESS WHEREOF, theCompany has caused this AIR to be executed by its officer thereunto dulyauthorized.

 

Dated:  October    , 2004

 
|   | **POWER 3 MEDICAL PRODUCTS, INC.** |
|--------|------------------------------------|
|   | ** **                         |
|   |                               |
|   | By:                                |   |
|   | Name:                              |
|   | Title:                             |

 

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**NOTICE OFEXERCISE**

 

TO:         POWER3 MEDICAL PRODUCTS, INC.

 

#### (1)           Theundersigned hereby elects to purchase $         principal amount of AIR Debentures of Power 3 Medical Products, Inc.pursuant to the terms of the attached AIR and tenders herewith payment of theprincipal in full, together with all applicable transfer taxes, if any.

####  

#### (2)           Paymentshall take the form of (check applicable box) in lawful money of the UnitedStates; or

####  

#### (3)           Pleaseissue a certificate or certificates representing said AIR Debentures in thename of the undersigned or in such other name as is specified below:

 

 

 

The AIR Debentures shallbe delivered to the following:

 

 

 

 

#### (4)           AccreditedInvestor.  The undersigned is an “accreditedinvestor” as defined in Regulation D promulgated under the Securities Act of1933, as amended.

####  

[SIGNATURE OF HOLDER]

 
| Name of  Investing Entity:                                |   |
|-----------------------------------------------------------|--------|
| *Signature  of Authorized Signatory of Investing Entity*: |   |
| Name of  Authorized Signatory:                            |   |
| Title of  Authorized Signatory:                           |   |
| Date:                                                     |   |
|                                                           |        |  |  |  |  |

 

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**ASSIGNMENT FORM**

 

(To assign the foregoingwarrant, executethis form and supply required information. Do not use this form to exercise the warrant.)

 

FOR VALUE RECEIVED, theforegoing AIR and all rights evidenced thereby are hereby assigned to

 
|   | whose address is |
|--------|------------------|
|   | .                |
|   |             |
|        |                  |  |

 
|                  |                     | Dated: |                  | ,      |   |   |
|-----------------------|--------------------------|--------|--------------------------------------------------------------------------------------------------|--------|--------|--------|
|                  |                     |   |                                                                                             |   |
|                  | Holder’s Signature: |   |                                                                                             |   |
|                  |                     |   |                                                                                             |   |
|                  | Holder’s Address:   |   |                                                                                             |   |
|                  |                     |   |                                                                                             |   |
|                  |                     |   |                                                                                             |   |
|                  |                     |   |                                                                                             |
| Signature Guaranteed: |                     |   |                                                                                             |   |
|                       |                          |        |                                                                                                  |        |        |        |  |  |  |

 

NOTE:  The signature to this Assignment Form mustcorrespond with the name as it appears on the face of the AIR, withoutalteration or enlargement or any change whatsoever, and must be guaranteed by abank or trust company.  Officers ofcorporations and those acting in a fiduciary or other representative capacityshould file proper evidence of authority to assign the foregoing AIR.

 

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SCHEDULE TO FORM OF ADDITIONAL INVESTMENT RIGHT

 

The Company has issued Additional Investment Rights to the following listed holders. The terms of the Additional Investment Rights issued by the Company to each of the following holders are identical except for the name of the holder and the principal amount of convertible debentures to be purchased upon exercise of the Additional Investment Rights.

 
| ** **                                   | ** ** | **PRINCIPAL AMOUNT OF**    | ** ** |
|----------------------------------------------|------------|----------------------------|------------|
| **HOLDER**                                   | ** ** | **CONVERTIBLE DEBENTURES** | ** ** |
| ** **                                   | ** ** | ** **                 | ** ** |
| Cityplatz  Limited                           |       | $                          | 125,000    |   |
| Crescent  International Ltd.                 |       | $                          | 500,000    |   |
| Crestview  Capital Master, LLC               |       | $                          | 375,000    |   |
| DKR  SoundShore Oasis Holding Fund Ltd.      |       | $                          | 125,000    |   |
| Gryphon  Master Fund L.P.                    |       | $                          | 250,000    |   |
| GSSF Master  Fund, LP                        |       | $                          | 250,000    |   |
| Mohawk  Funding                              |       | $                          | 25,000     |   |
| Omicron  Master Trust                        |       | $                          | 250,000    |   |
| Otape  Investments LLC                       |       | $                          | 250,000    |   |
| Platinum  Partners Value Arbitrage Fund L.P. |       | $                          | 208,333    |   |
| Richard  Molinsky                            |       | $                          | 75,000     |   |
| Sage Capital  Investments Limited            |       | $                          | 62,500     |   |
| Bach Farms  LLC                              |       | $                          | 4,167      |   |

 

15

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