THIS
      NOTE
      HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES
      LAWS
      OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO
      AN
      EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES
      LAWS OR AN APPLICABLE EXEMPTION TO THE REGISTRATION REQUIREMENTS OF SUCH ACT
      AND
      SUCH LAWS. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER FEDERAL
      OR STATE REGULATORY AUTHORITY HAS PASSED ON OR ENDORSED THE MERITS OF THIS
      NOTE.


    


    PROMISSORY
      NOTE

     

    
      	U.S. $20,000.00
              	 	
              Original
                Issue Date: August 7,
                2006

            
	
              Payee:
                Richard
                Kraniak (Fifth
                3rd
                Bank Account) 

              101
                West Long Lake Road

              Bloomfield
                Hills, MI 48304

            	 	 


    

     

    FOR
      VALUE
      RECEIVED, POWER3 MEDICAL PRODUCTS, INC., a New York corporation (the “Maker”),
      promises to pay to the order of Richard
      Kraniak,
      (the
“Payee”), pursuant to the terms and conditions contained in this promissory note
      (this “Note”) the principal sum of Twenty
      thousand Dollars ($20,000.00),
      together with interest on the unpaid principal balance from the date hereof
      until paid in full on August 7, 2007 or converted at the Payee’s option into
      restricted common stock of Power3 Medical Products, Inc. at the price of $0.06
      per common share on the terms provided herein.

    


    1. Terms
      and Payment.
      Principal
      and interest of this Note shall be payable as follows:

    


    
      	
            	(i)	
              The
                entire unpaid principal balance of this Note shall be payable, in
                cash,
                within one year from the date of the original issue date and is due
                on
                August 7, 2007 unless the note is converted into restricted common
                stock
                of Power3 Medical Products, Inc.

            


    

    


    
      	
            	(ii)	
              Interest,
                computed on the unpaid principal balance of this Note, shall be due
                and
                payable at Payee’s option, as follows:


            


    

    


    (A) the
      accrued and unpaid interest shall be paid, in cash, concurrently upon the
      Payment Date; or 

    


    
      	
            	(B)	
              the
                accrued and unpaid interest payable on this Note shall be considered
                paid,
                in full, upon Maker’s issuance and delivery of restricted shares of
                Maker’s common stock. 

            


    

    


    
      
        
          	
                	(iii)	
                  Warrants,
                    as further consideration of this note, the Payee is entitled
                    to subscribe
                    for, and purchase up to
                    Three hundred thirty-three thousand three hundred thirty-three
                    (333,333)
                    shares of the Company’s common stock, at any time or from time to time
                    during the period commencing on the date hereof (the “Initial Exercise
                    Date”) and terminating at 5:00 p.m., Houston, Texas local time, on
                    the
                    third anniversary of the Initial Exercise Date (the “Exercise Period”).
                    This Warrant is exercisable at an exercise price per share equal
                    to $0.08
                    per share (the “Exercise Price”).


                


        

      

    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    If
      the
      Payment of interest or principal is due on a day that is not a Business Day
      (as
      hereinafter defined), such payment shall be made on the first Business Day
      following such payment date. For
      purposes of this Note, “Business Day” means any day other than Saturday, Sunday
      or any other day on which national banking associations in the State of New
      York
      generally are closed for commercial banking business.

    


    2. Interest
      Rate.
      During
      the period ending on the Payment Date (the “Payment Period”), the unpaid
      principal balance of this Note shall bear simple interest at a per annum rate
      equal to seven percent (7%) for such period determined in accordance with this
      Section 2. Notwithstanding the foregoing, upon an Event of Default (as
      hereinafter defined) with respect to the Payment and until such Event of Default
      shall have been cured, such
      Payment shall bear interest at a
      rate of
      ten percent (10%) per annum.
      Interest
      shall be payable as provided in Section 1 above.

    


    3.
      Event
      of Default.
      It is
      expressly provided that upon failure in the punctual payment of the principal
      due hereunder, as the same shall become due and payable, and the passage of
      thirty (30) days following when such payment was due and payable, during which
      period the Maker may make such payment(s) as are due and payable and prevent
      a
      default of this Note, an “Event of Default” will have occurred. Upon an Event of
      Default and until such Event of Default shall have been cured, the holder of
      this Note may, at its option, without further notice or demand, (i) declare
      the
      outstanding principal balance of this Note, and accrued but unpaid interest
      payable on this Note in cash at the rate provided in Section 2 hereof, at
      once due and payable, (ii) pursue any and all rights, remedies and recourses
      available to the holder hereof, including but not limited to any such rights,
      remedies or recourses at law or in equity, or (iii) pursue any combination
      of
      the foregoing; and in the event default is made in the prompt payment of this
      Note when due or declared due, and the same is placed in the hands of an
      attorney for collection, or suit is brought on the same, or the same is
      collected through probate, bankruptcy or other judicial proceedings, then the
      Maker agrees and promises to pay all costs of collection, including reasonable
      attorney’s fees. 

    


    4. Right
      of Prepayment.
      The
      Maker
      shall have the right to prepay all or any part of the unpaid principal or
      interest hereon within ten (10) days written notice without premium or penalty
      and at said time, the Payee shall have the right to convert the note during
      this
      ten (10) day notification period. Any and all prepayments with respect to this
      Note shall be applied first to payment of accrued interest as of the date of
      such prepayment and the balance, if any, shall be applied in reduction of the
      unpaid principal. 

    


    5. No
      Right of Setoff.
      THE
      PAYEE
      ACKNOWLEDGES AND AGREES THAT THE MAKER HAS NO RIGHTS OF SETOFF AGAINST THE
      PAYMENT AND THEREFORE SHALL NOT WITHHOLD OR REDUCE THE PAYMENT ON THIS NOTE
      BY
      ANY AMOUNTS DUE FROM THE PAYEE TO THE MAKER.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    6. Registration
      Rights. 

     

    
      	 	
              (i)

            	
              If
                the Company shall at any time seek to register or qualify any of
                its
                common stock or the securities holdings of any of its controlling
                shareholders, on each such occasion it shall, without cost or expense,
                include all of the Payee’s Shares that have been converted per the terms
                of this agreement, and all shares underlying the warrants issued
                in this
                transaction, in such registration or qualification. The Company shall
                keep
                the registration effective until such time as the Purchaser has sold
                its
                Shares or the Shares are eligible to be transferred without restriction
                pursuant to the provisions of Rule 144(k) which was promulgated by
                the
                Securities and Exchange Commission pursuant to §4(1) of the Securities Act
                of 1933, as amended. The Purchaser agrees to provide an opinion of
                counsel
                with respect to any sales of the Shares by the Purchaser if such
                sale is
                permissible under Rule 144(k).

            


    

    


    
      	 	
              (ii)

            	
              All
                expenses in connection with preparing and filing any registration
                statement under Paragraph “A” of this Article “6” of this Agreement shall
                be borne in full by the Company; provided, however, that the Purchaser
                shall pay any and all underwriting commissions and expenses and the
                fees
                and expenses of any legal counsel selected by the Purchaser to represent
                it with respect to the sale of the
                Securities.

            


    

    


    7. No
      Usury Intended; Usury Savings Clause.
      In
      no
      event shall interest contracted for, charged or received hereunder, plus any
      other charges in connection herewith which constitute interest, exceed the
      maximum interest permitted by applicable law. The amounts of such interest
      or
      other charges previously paid to the holder of the Note in excess of the amounts
      permitted by applicable law shall be applied by the holder of the Note to reduce
      the principal of the indebtedness evidenced by the Note, or, at the option
      of
      the holder of the Note, be refunded. To the extent permitted by applicable
      law,
      determination of the legal maximum amount of interest shall at all times be
      made
      by amortizing, prorating, allocating and spreading in equal parts during the
      period of the full stated term of the loan and indebtedness, all interest at
      any
      time contracted for, charged or received from the Maker hereof in connection
      with the loan and indebtedness evidenced hereby, so that the actual rate of
      interest on account of such indebtedness is uniform throughout the term
      hereof. 

     

    8. Waivers.
      The
      Maker hereby waives presentment, protest, demand for payment, notice of dishonor
      and all other notices of any kind. No waiver of any default shall operate as
      a
      waiver of any other default or of the same default on any future occasion,
      and
      no action to enforce payment hereunder nor any indulgences or other arrangements
      granted to the Maker, including any extension of time for payment due thereon,
      shall release, waive or otherwise affect any right of the owner or holder
      hereof.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    9. Governing
      Law.
      This
      Note
      will be governed by the laws of the State of Texas without giving effect to
      any
      choice or conflict of law principles of any jurisdiction. 

    


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      rest
      of this page is intentionally left blank.]


    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF, the Maker has caused this Note to be executed as of the day
      and
      year first above written.

     

    
      	 	 	 
	 	POWER3 MEDICAL PRODUCTS,
              INC.
	 
 	 
 	 
 
	
            	By:  	/s/ Steven B. Rash 
	 	
              
Name:
              Steven B. Rash
              Title:
                Chairman and CEO

            
	 	 


    

     

    
      	 	 	 
	 	
              RICK
                KRANIAK

            
	 
 	 
 	 
 
	 	By:  	/s/ Richard Kraniak 
	 	
              
Name:
Richard
              Kraniak (Fifth
              3rd
              Bank Account) 
	 	 
	 	Title:
              
	 	
              
                

              

            


    

     

    
      
        
        

      

      
        5