Document:

Exhibit 10.35

 

 

NOTE (“the
Note”)

 

Power3 Medical Products, Inc., a New York corporation (the “Company”)
for value received hereby promises to pay Ira L. Goldknopf
(“Payee”) on or before May 23, 2006, (“Maturity Date”); the principal
amount of fifty-two thousand dollars ($52,000.00) (“Principal”).

 

Should the Principal not be repaid as of May 23, 2006 interest of
6 % per year on any unpaid Principal amount will be earned by the Payee until
such time as all of the Principal amount is repaid. This Note may be
repaid at any time prior to May 23, 2006 without interest or penalty.

 

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, if
any, 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.

 

Notices, payments, requests, and other communications to the respective
parties hereunder shall be in writing, and shall be deemed received when
delivered personally, by facsimile, or first class certified mail, return
receipt requested and postage prepaid, as follows:

 

If to the lender:

 

Ira L. Goldknopf

3400 Research Forest Parkway

Woodlands, Texas 77381

 

If to the Company:

 

Power3 Medical Products, Inc.

3400 Research Forest Parkway

Woodlands, Texas 77381

 

This Note is governed by and is to be construed in accordance with the
law of the State of Texas.

 

	
  Payee

  	
  Power3 Medical Products, Inc.

  	
  Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
    /s/: Ira L Goldknopf

  	
   

  	
    /s/: John P. Burton

  	
   

  	
  November 23,
  2005

  	
   

  
	
  Ira L. Goldknopf

  	
  By: John P. Burton

  	
   

  	
   

  
	
   

  	
  Its: CFOExhibit 10.37

 

 

NOTE (“the
Note”)

 

Power3 Medical Products, Inc., a New York corporation (the “Company”)
for value received hereby promises to pay Ira L. Goldknopf
(“Payee”) on or before June 14, 2006, (“Maturity Date”); the principal
amount of fifty thousand dollars ($50,000.00) (“Principal”).

 

Should the Principal not be repaid as of June 14, 2006 interest of
6 % per year on any unpaid Principal amount will be earned by the Payee until
such time as all of the Principal amount is repaid. This Note may be
repaid at any time prior to June 14, 2006 without interest or penalty.

 

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, if
any, 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.

 

Notices, payments, requests, and other communications to the respective
parties hereunder shall be in writing, and shall be deemed received when
delivered personally, by facsimile, or first class certified mail, return
receipt requested and postage prepaid, as follows:

 

If to the lender:

 

Ira L. Goldknopf

3400 Research Forest Parkway

Woodlands, Texas 77381

 

If to the Company:

 

Power3 Medical Products, Inc.

3400 Research Forest Parkway

Woodlands, Texas 77381

 

This Note is governed by and is to be construed in accordance with the
law of the State of Texas.

 

	
  Payee

  	
  Power3 Medical Products, Inc.

  	
  Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
    /s/ Ira L Goldknopf

  	
   

  	
    /s/ John P. Burton

  	
   

  	
  December 14,
  2005

  	
   

  
	
  Ira L. Goldknopf

  	
  By: John P. Burton

  	
   

  	
   

  
	
   

  	
  Its: CFOEXHIBIT 4.5

 

THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS, SUCH SECURITIES MAY NOT BE OFFERED, SOLD OR TRANSFERRED
IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY
TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

 

WARRANT TO PURCHASE 2,500,000 SHARES OF COMMON STOCK

 

VOID 5:00 P.M. PACIFIC TIME ON APRIL 10,
2016

 

THIS WARRANT (“Warrant”) certifies that, FOR VALUE
RECEIVED pursuant to that certain Licensing Agreement dated April 11, 2006
by and between American Medical Technologies, Inc., a Delaware corporation
(the “Company”), and Discus Holdings, Inc., a California corporation (the “Holder”),
the Holder and its registered assigns are entitled to purchase from the
Company, all or any part of Two Million Five Hundred Thousand (2,500,000)
shares (the “Warrant Shares”) of Common Stock, $0.04 par value per share (“Common
Stock”), of the Company at a price of twenty-hundredth Dollars ($0.20) per
share at any time and from time to time if and when the shares become vested as
provided herein (the “Vesting Date”) until 5:00 p.m., Pacific Time, April 10,
2016, (the “Expiration Date”) subject to the provisions and adjustments and on
the terms and conditions hereinafter set forth. The purchase price of one
Warrant Share payable from time to time upon the exercise of this Warrant
(whether such price be the price specified above or an adjusted price
determined as hereinafter provided) is referred to herein as the “Warrant
Price.”

 

1.             Exercise
of Warrant. Subject to the conditions hereinabove and hereinafter set
forth, this Warrant may be exercised by the Holder in whole at any time or
in part from time to time after the Vesting Date and until the Expiration
Date; provided, however that if the date of exercise is on a date in which
banking institutions in the State of California are authorized by law to close,
the Warrant shall be exercised on the next succeeding day. This Warrant shall
be exercised solely by presentation and surrender hereof to the Company at its
principal office, or at the office of its stock transfer agent, if any, and
upon payment to the Company of the Warrant Price for the Warrant Shares so
purchased. Such payment may be made by the Holder in the form of a
certified or cashier’s check. If this Warrant is exercised with respect to less
than all of the Warrant Shares at the time purchasable hereunder, the Holder
hereof shall be entitled to receive a new warrant covering the number of
Warrant Shares in respect of which this Warrant shall not have been exercised.

 

2.             Vesting
of Warrant Shares. This Warrant, to the extent the Warrant has not
otherwise expired, shall first become exercisable (i) as to 500,000 shares
of the original number of Warrant Shares on the first anniversary of the date
hereof and (ii) as to an additional 41,667 shares of the original number
of Warrant Shares on each successive full one-month period following the first
anniversary of the date hereof (until the fifth anniversary of the date
hereof), in each case, as such amount of Warrant Shares as may be adjusted
pursuant to Section 4 hereof. The vesting of the Warrant Shares shall cease
upon the Closing of the sale (the “Spectrum Sale”) of Spectrum Dental, Inc.,
the Holder’s wholly owned subsidiary, to the Company pursuant to the Stock
Purchase Agreement, as contemplated by that certain Put and Call Option
Agreement dated as of April 11, 2006 between the Holder and the Company. Thereafter,
this Warrant may be exercised as to the number of Warrant Shares that the
Holder was entitled to purchase at the time of the consummation of the Spectrum
Sale.

 

3.             Reservation
of Shares of Common Stock. The Company covenants and agrees that during the
period within which the rights represented by this Warrant may be
exercised, the Company will at all times have authorized, and hold in reserve
for issuance upon exercise of this Warrant, a sufficient number of shares of
Common Stock to provide for the exercise of the rights represented by this
Warrant and the issuance of the Warrant Shares.

 

4.             Adjustment
of Warrant Price and Number of Shares. The Warrant Price in effect and the
number and kind of securities issuable upon the exercise of this Warrant shall
be subject to adjustment from time to time upon the happening of certain events
as follows:

 

(a)           Adjustment for Dividends in Stock or Other Securities
or Property. In case at any time or from time to time on or after
the date hereof the holders of the Common Stock of the Company (or any shares
of

 

1

 

stock or other securities
at the time receivable upon the exercise of this Warrant) shall have received,
or, on or after the record date fixed for the determination of eligible
stockholders, shall have become entitled to receive, without payment therefor,
other or additional stock or other securities or property (other than cash) of
the Company by way of dividend, then and in each case, the holder of this
Warrant shall, upon the exercise hereof, be entitled to receive, in addition to
the number of shares of Common Stock receivable thereupon, and without payment
of any additional consideration therefor, the amount of such other or
additional stock or other securities or property (other than cash) of the
Company which such holder would hold on the date of such exercise had it been
the holder of record of such Common Stock on the date hereof and had
thereafter, during the period from the date hereof to and including the date of
such exercise, retained such shares and/or all other additional stock available
by it as aforesaid during such period, giving effect to all adjustments called
for during such period by paragraphs (b) and (c) of this Section 4.

 

(b)           Adjustment for Reclassification, Reorganization or
Merger. In case of any reclassification or change of the outstanding
securities of the Company or of any reorganization of the Company (or any other
corporation the stock and securities of which are at the time receivable upon
the exercise of this Warrant) or any similar corporate reorganization on or
after the date hereof, then and in each such case the holder of this Warrant,
upon the exercise hereof at any time after the consummation of such
reclassification, change, reorganization, merger or conveyance, shall be
entitled to receive, in lieu of the stock or other securities and property
receivable upon the exercise hereof prior to such consummation, the stock or
other securities or property to which such holder would have been entitled upon
such consummation if such holder had exercised this Warrant immediately prior
thereto, all subject to further adjustment as provided in paragraphs (a) and
(c); and in each such case, the terms of this Section 4 shall be
applicable to the shares of stock or other securities properly receivable upon
the exercise of this Warrant after such consummation.

 

(c)           Stock Splits and Reverse Stock Splits. If
at any time on or after the date hereof the Company shall subdivide its
outstanding shares of Common Stock into a greater number of shares, the Warrant
Price in effect immediately prior to such subdivision shall thereby be
proportionately reduced and the number of Warrant Shares receivable upon
exercise of the Warrant shall thereby be proportionately increased; and,
conversely, if at any time on or after the date hereof the outstanding number
of shares of Common Stock shall be combined into a smaller number of shares,
the Warrant Price in effect immediately prior to such combination shall thereby
be proportionately increased and the number of Warrant Shares receivable upon
exercise of this Warrant shall thereby be proportionately decreased.

 

5.             Issuance
of Common Stock. The Warrant Price shall be adjusted from time to time
according to the following provisions:

 

As used in this Section 5, the term “Additional
Shares” means any shares of Common Stock or convertible securities issued by
the Company after the date hereof other than (i) shares of Common Stock
issued upon exercise of this Warrant; (ii) the issuance to any employee,
director, officer, contractor or consultant of the Company pursuant to an
approval of the Board of Directors of the Company or pursuant to any plan
approved by the Board of Directors of the Company; and (iii) shares issued
by the Company upon any stock split, stock dividend, combination, or similar
event or pursuant to any merger, recapitalization or other event to which the
provisions of Section 4 otherwise apply.

 

If the Company shall issue any Additional Shares
either (i) without consideration or (ii) for a consideration per
share of Common Stock less than the Warrant Price in effect immediately prior
to the issuance of such Additional Shares or (iii), in the case of convertible
securities, at an exercise price per share of Common Stock which is less than
the Warrant Price in effect immediately prior to the issuance of such
Additional Shares, then the Warrant Price (as adjusted previously pursuant to
the terms hereof) shall be adjusted to a price (computed to the nearest cent
and shall be the new Warrant Price) obtained by applying the following formula:

 

NP = (AS x OP) + C

AS + NS

 

where:

 

NP           equal the new Warrant Price

 

2

 

AS          equals the number of shares of Common Stock
outstanding (treasury shares not being deemed to be outstanding) on the date
hereof

 

OP           equals the Warrant Price in effect
immediately prior to the calculation

 

C             equals the aggregate consideration received
by the Company for all Additional Shares which were issued after the date
hereof

 

NS           equals the number of Additional Shares which
were issued after the date hereof

 

provided,
however, that such adjustment shall be made only if the result obtained by
applying the foregoing formula yields a new Warrant Price which is less than
the Warrant Price in effect immediately prior to the issuance of such
Additional Shares.

 

Upon each adjustment of the Warrant Price pursuant
to the provisions of this Section 5, the number of securities issuable
upon the exercise of each Warrant shall be adjusted to the nearest full amount
by multiplying a number equal to the Warrant Price in effect immediately prior
to such adjustment by the number of Warrant Shares issuable upon exercise of
the Warrants immediately prior to such adjustment and dividing the product so
obtained by the adjusted Warrant Price.

 

6.             Certificate
of Adjustment. Whenever the Warrant Price or number or type of securities
issuable upon exercise of this Warrant is adjusted, as herein provided, the
Company shall promptly deliver to the record holder of this Warrant and with
its stock transfer agent, if any,  a
certificate of an officer of the Company setting forth the nature of such
adjustment and the adjusted Warrant Price determined as herein provided,
including a statement of the number of additional Warrant Shares, if any, and
such other facts as shall be necessary to show the reason for and the manner of
computing such adjustment.

 

7.             No
Fractional Shares. No fractional shares of Common Stock will be issued in
connection with any exercise hereunder. In lieu of any fractional shares which
would otherwise be issuable, the Company shall pay cash equal to the product of
such fraction multiplied by the fair market value of one share of Common Stock
on the date of exercise, as determined in good faith by the Company’s Board of
Directors.

 

8.             No
Stockholder Rights. This Warrant shall not entitle the Holder to any of the
rights of a stockholder of the Company. The Holder shall be entitled to such
rights only upon and to the extent of the Holder’s exercise of this Warrant.

 

9.             Fully
Paid Stock: Taxes. The Company covenants and agrees that the shares of
stock represented by each and every certificate for its Common Stock to be delivered
on the exercise of this Warrant as herein provided shall, at the time of such
delivery, be fully paid and non-assessable, and free from all liens and charges
with respect to the purchase thereof. Each and every certificate for the
Company’s Common Stock to be delivered on the exercise of this Warrant shall
bear an appropriate legend regarding restrictions on transferability. The
Company further covenants and agrees that it will pay when due and payable any
and all federal and state taxes which may be payable by the Company in
respect of the issue of this Warrant or any Common Stock or certificates
therefor upon the exercise of this Warrant, pursuant to the provisions hereof.
The Company shall not, however, be required to pay any tax which may be
payable in respect of any transfer, in whole or in part, of this Warrant
(including the issuance of new Warrants in connection therewith) or the
delivery of stock certificates in a name other than that of the Holder of this
Warrant presented for exercise, and any such tax shall be paid by such Holder
at the time of presentation.

 

10.           Assignment.
Neither this Warrant nor the Warrant Shares have been registered under the
Securities Act of 1933 (the “Act”), as amended, or any applicable “Blue Sky”
laws and, therefore, the transfer of such securities is restricted by the Act
and applicable Blue Sky laws. By acceptance of this Warrant, the Holder
represents and warrants to the Company that this Warrant is acquired for the
Holder’s own account, for investment and not with a view to distribution within
the meaning of the Act and the Holder agrees that the Holder will not offer,
distribute, sell, transfer or otherwise dispose of this Warrant or the shares
issuable upon exercise of this Warrant, except pursuant to (i) an effective
registration statement under the Act and any applicable Blue Sky laws with
respect thereto, or (ii) an opinion, satisfactory to the Company,
addressed to the Company, of counsel reasonably satisfactory to the Company,
that such offering, distribution, sale, transfer or disposition is exempt from
registration under the Act and any applicable Blue Sky laws, or (iii) a
letter from the staff of the Securities and

 

3

 

Exchange Commission or
any state securities commissioner, as the case may be, to the effect that
it will recommend that no action be taken with respect to such transaction. The
Holder agrees, by acceptance of this Warrant, to execute any and all documents
deemed necessary by the Company and required by the regulatory authority of any
state in connection with any public offering by the Company of its securities.
Subject to the restrictions set forth above, the right to purchase all or any part of
the Warrant Shares granted by this Warrant shall be assignable or transferable,
in whole or in part, by the Holder. If this Warrant is assigned, this Warrant
shall be surrendered at the principal office of the Company with a written form of
assignment reasonably satisfactory to the Company duly executed. Such
assignment or transfer shall confer upon such assignee or transferee all rights
and benefits granted to the Holder under this Warrant, subject to the
obligations and limitations herein contained, and the Company shall execute and
deliver to such assignee or transferee a new Warrant in the same form and
substance as this Warrant.

 

11.           Representations
and Warranties of the Company. The Company hereby represents, warrants and
agrees as follows:

 

(a)           The
Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware, with all requisite corporate
power and authority to own, lease and operate its properties and conduct its
business as now being conducted. The Company is duly qualified to do business as
a foreign corporation in each jurisdiction in which it is required to be so
qualified and in which the failure to be so qualified could have a material and
adverse effect upon the Company.

 

(b)           The
issuance of this Warrant by the Company has been duly and validly authorized by
all requisite corporate action and power, and this Warrant constitutes the
valid and binding obligation of the Company enforceable against it in
accordance with its respective terms. Upon delivery of the Warrant Price, the
Warrant Shares will be duly authorized, validly issued and outstanding, fully
paid and non-assessable.

 

(c)           No
consent, approval or authorization of, or filing, registration or qualification
with, any court, or any governmental, administrative or judicial authority or
regulatory body (domestic or foreign) or other action is required on the part of
the Company for the issuance of the Warrants, except for filings required under
state securities or “blue sky” laws which have been made or shall be made by
the Company in compliance with such laws.

 

12.           Partial
Exercise and Partial Assignment. If this Warrant be exercised in part only,
the Holder hereof shall be entitled to receive a new Warrant covering the
number of Warrant Shares in respect of which this Warrant shall not have been
exercised as provided in Section 1 hereof. If this Warrant is partially
assigned, this Warrant shall be surrendered at the principal office of the
Company or at the stock transfer agent of the Company at its office, if any,
with a written form of partial assignment reasonably satisfactory to the
Company duly executed, and thereupon a new Warrant shall be issued to the
Holder hereof covering the number of Warrant Shares not assigned, the assignee
of such partial assignment of this Warrant shall also be entitled to receive a
new Warrant covering the number of shares so assigned.

 

13.           Definitions.
The term “Warrants” as used herein shall mean this Warrant and all Warrants
hereafter issued in exchange or substitution for this Warrant. The term “Holder”
as used herein shall include the original Holder and include any person(s) who
shall at the time be the registered holder(s) of any of the Warrants.

 

14.           Lost
Stolen Warrants. Etc. In case any Warrant shall be mutilated, lost, stolen
or destroyed, the Company shall issue a new Warrant of like date, tenor, and
denomination and deliver the same in exchange and substitution for and upon
surrender and cancellation of any mutilated Warrant, or in lieu of any Warrant
lost, stolen or destroyed, upon an indemnity agreement or bond reasonably
satisfactory to the Company.

 

15.           Miscellaneous.

 

(a)           Successors and Assigns. All covenants and
agreements in this Warrant shall be binding upon the Company and its successors
and assigns.

 

(b)           Governing Law. This Warrant shall be
construed and enforced in accordance with the laws of the State of Texas.

 

(c)           Notices. Any notices or other
communications required or permitted hereunder shall be sufficiently given if
in writing and sent by fax (followed by first class mail, postage prepaid,
if to the Holder,

 

4

 

addressed to the Holder
at 8550 Higuera St., Culver City, CA 90232 (Attention:  General Counsel), Fax: (310) 845-1513, and if
to the Company, addressed to it at 5655 Bear Lane, Corpus Christi, TX 78405, or
to such other address, fax number or attention as shall be furnished in writing
by the Company or the Holder, and any such notice shall be deemed to have been
given as of the date of transmittal.

 

5

 

IN WITNESS WHEREOF, the undersigned has caused this
Warrant to be signed by a duly authorized officer and this Warrant to be issued
as of this 11th day of April, 2006.

 

	
   

  	
  American Medical Technologies, Inc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/
  Roger W. Dartt

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Roger
  W. Dartt

  
	
   

  	
   

  	
  Title:

  	
  President

  
					

 

6

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