Document:

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.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    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.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    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.

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    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.

     

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

     

    "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-2power3_8k-ex1002.htm

    
      
        

      

    

    Exhibit
10.2

     

    THE
SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE APPLICABLE SECURITIES LAWS OF
ANY STATE OR OTHER JURISDICTION, AND MAY NOT BE SOLD, ASSIGNED, TRANSFERRED,
PLEDGED OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH THE REQUIREMENTS OF
SUCH ACT AND THE APPLICABLE SECURITIES LAW OF ANY STATE OR OTHER
JURISDICTION.

    

    WARRANT
TO PURCHASE 100,000 SHARES

    OF
THE COMMON STOCK OF

    POWER3
MEDICAL PRODUCTS, INC.

     

    
      	Warrant
      No.:  2008-___ 	
              Date of Issuance: November 04,
      2008

            

    

     

    This
certifies that _________________ or his, her or its permitted assigns (each
individually, a “Holder”)
for value received, shall be entitled to purchase from Power3 Medical Products,
Inc., a New York corporation (the “Company”),
having its principal place of business at 3400 Research Forest Drive, Suite
B2-3, The Woodlands, Texas 77381, a maximum of __________ fully paid and
nonassessable shares of the Company’s common stock, $0.001 par value per share
(“Common
Stock”), for a purchase price equal to $0.04 per share (the “Exercise
Price”) at any time, or from time to time, beginning with the filing by
the Company of an amendment to its certificate of incorporation authorizing
sufficient shares of Common Stock for such exercise, up to and including 5:00
p.m., Central Standard time on the date three years after the date of this
Warrant (the “Expiration
Date”), upon (i) the surrender to the Company at its principal place of
business (or at such other location as the Company may advise the Holder in
writing) of this Warrant and a Form of Subscription in substantially the form
attached hereto duly completed and executed and, (ii) if applicable, payment in
cash or by check or other consideration permitted pursuant to Section 1(b) hereof
of the aggregate Exercise Price for the number of shares for which this Warrant
is being exercised, determined in accordance with the provisions hereof. The
Exercise Price and the number of shares of Common Stock purchasable hereunder
are subject to adjustment as provided in Section 3
hereof.

    

    This
Warrant is subject to the following terms and conditions:

    

    1.     Exercise;
Issuance of Certificates; Payment For Shares.

    

    (a)           General.  This
Warrant is exercisable at the option of the Holder of record hereof, at any time
or from time to time up to the Expiration Date for all or any part of the shares
of Common Stock (but not for a fraction of a share) which may be Purchased
hereunder. The Company agrees that the shares of Common Stock purchased under
this Warrant shall be and are deemed to be issued to the Holder hereof as the
record owner of such shares as of the close of business on the date on which (i)
this Warrant shall have been surrendered, properly endorsed, (ii) the completed,
executed Form of Subscription shall have been surrendered, and (iii) payment
shall have been made to the Company for such shares, in each case, at the
Company’s address set forth above (or at such other location as the Company may
advise the Holder in writing). Certificates for the shares of Common Stock so
purchased, together with any other securities or property to which the Holder is
entitled upon such exercise, shall be delivered to the Holder by the Company at
the Company’s expense within a reasonable time after the rights represented by
this Warrant have been so exercised, and in any event, within ten (10) days of
such exercise. In case of a purchase of less than all the shares that may be
purchased under this Warrant, the Company shall cancel this Warrant and execute
and deliver a new Warrant or Warrants of like tenor for the balance of the
shares purchasable under the Warrant surrendered upon such purchase, to the
Holder hereof within a reasonable time. Each stock certificate so delivered
shall be in such denominations of Common Stock as may be requested by the Holder
hereof and shall be registered in the name of the Holder.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    (b)           Net Issue
Exercise.  Notwithstanding any provisions herein to the
contrary, if the fair market value of one share of the Company’s Common Stock is
greater than the Exercise Price (at the date of calculation as set forth below),
in lieu of exercising this Warrant for cash, the Holder may elect to receive
shares equal to the value (as determined below) of this Warrant (or the portion
thereof being canceled) by surrender of this Warrant at the principal office of
the Company together with the properly endorsed Form of Subscription and notice
of such election, in which event the Company shall issue to the Holder a number
of shares of Common Stock computed using the following formula:

    

    X = Y (A-B) 

               A

     

    Where:

    

    X
=           the number of
shares of Common Stock to be issued to the Holder;

    

    
      	
               
      

            	
              Y
      =

            	
              the
      number of shares of Common Stock purchasable under the Warrant or, if only
      a portion of the Warrant is being exercised, the portion of the Warrant
      being canceled (at the date of such
  calculation);

            

    

    

    
      	
               
      

            	
              A
      =

            	
              the
      fair market value of one share of the Company’s Common Stock (at the date
      of such calculation); and

            

    

    

    B
=           Exercise
Price (as adjusted to the date of such calculation).

    

    For
purposes of the above calculation, “fair market
value” shall mean with respect to the Common Stock on any date in
question the average of the closing bid prices per share of the Common Stock for
the previous fifteen (15) consecutive trading days (i) on the principal
securities exchange or trading market where the Common Stock is listed or traded
or, if the foregoing does not apply, (ii) in the over-the-counter market on the
electronic bulletin board for the Common Stock or, if, and only if, no trading
price is reported for the Common Stock, then its fair market value shall be as
determined, in good faith by the board of directors of the Company.

    

    (c)           Common Stock
Legend.  Upon any exercise of the Warrants, certificates
representing the shares of Common Stock shall bear a restrictive legend
substantially identical to that set forth on the face of this
Warrant.

    

    2.     Shares To
Be Fully Paid; Reservation of Shares.

    

    The
Company covenants and agrees that all shares of Common Stock that may be issued
upon the exercise of the rights represented by this Warrant will, upon issuance,
be duty authorized, validly issued, fully paid and nonassessable and free of all
taxes, liens and charges with respect to the issue thereof.  The
Company further 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 reserved, for the purpose of issue or transfer upon
exercise of the subscription rights evidenced by this Warrant, a sufficient
number of shares of authorized but unissued Common Stock, or other securities
and property, when and as required to provide for the exercise of the rights
represented by this Warrant. The Company will take all such action as may be
necessary to assure that such shares of Common Stock may be issued as provided
herein without violation of any applicable law or regulation, or of any
requirements of any domestic securities exchange upon which the Common Stock may
be listed; provided, however, that the
Company shall not be required to effect a registration under Federal or State
securities laws with respect to such exercise.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    3.     Adjustment
of Exercise Price and Number of Shares.

    

    The
Exercise Price and the number of shares (or amount of other securities or
property) purchasable upon the exercise of this Warrant shall be subject to
adjustment from time to time upon the occurrence of certain events described in
this Section
3.  This Section shall not require an adjustment to the
Exercise Price in connection with any dividends paid in cash or upon any sale of shares
of Common Stock for a per share price that is less than the Exercise
Price.

    

    (a)           Subdivision or Combination
of Stock. If the Company shall effect a stock dividend or stock split or
subdivide its outstanding shares of Common Stock into a greater number of
shares, the Exercise Price in effect immediately prior to such stock dividend,
stock split or subdivision shall be proportionately reduced, and conversely, if
the Company shall effect a reverse stock split or combine its outstanding shares
of Common Stock into a smaller number of shares, the Exercise Price in effect
immediately prior to such reverse stock split or combination shall be
proportionately increased.  Upon each adjustment of the Exercise
Price, the Holder of this Warrant shall thereafter be entitled to purchase, at
the Exercise Price resulting from such adjustment, the number of shares obtained
by multiplying the Exercise Price in effect immediately prior to such adjustment
by the number of shares purchasable pursuant hereto immediately prior to such
adjustment, and dividing the product thereof by the Exercise Price resulting
from such adjustment.

    

    (b)           Dividends in Common Stock,
Other Stock, Property, Reclassification.If the holders of Common Stock
(or any shares of stock or other securities at the time receivable upon the
exercise of this Warrant) shall have received or become entitled to receive,
without payment therefor,

    

    (i)           Common
Stock or any shares of stock or other securities that are directly or indirectly
convertible into or exchangeable for Common Stock, or any rights or options to
subscribe for, purchase or otherwise acquire any of the foregoing by way of
dividend or other distribution (other than shares of Common Stock issued as a
stock dividend, stock split or subdivision, adjustments in respect of which
shall be covered by the terms of Section 3(a)
above),

    

    (ii)           any
cash paid or payable otherwise than as a cash dividend(other than a liquidation
or dissolution, which shall be covered by the terms of Section 3(d) below),
or

    

    (iii)           additional
shares of Common Stock or additional stock or other securities or property
(including cash) by way of spin-off, split-up, reclassification,
recapitalization, reorganization, combination of shares or similar corporate
rearrangement (other than shares of Common Stock issued as a stock dividend,
stock split or subdivision, adjustments in respect of which shall be covered by
the terms of Section
3(a) above),

    

    then, and
in each such case, the Holder hereof shall, upon the exercise of this Warrant, be entitled to receive, in addition to the number
of shares of Common Stock receivable upon such exercise, and without payment of
any additional consideration therefor, the amount of stock and other securities
and property (including cash in the cases referred to in clauses (ii) and (iii)
above) which such Holder would hold on the date of such exercise had such Holder
been the holder of record of such Common Stock as of the date on which holders
of Common Stock received or became entitled to receive such shares or all other
additional stock and other securities and property.

    

    (c)           Reorganization,
Reclassification, Consolidation, Merger or Sale.  If any
reclassification, recapitalization or reorganization, or consolidation or merger
of the Company with another corporation, or the sale of all or substantially all
of its assets or other similar transaction, shall be effected in such a way that
holders of Common Stock shall be entitled to receive, with respect to or in
exchange for their shares of Common Stock, securities or other assets or
property (an “Organic
Change”) and the Company is the resulting or surviving corporation of
such Organic Change, then, as a condition of such Organic Change, provisions
shall be made by the Company whereby the Holder hereof shall thereafter have the
right 

     

    
      
        
        

      

      
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    to
purchase and receive (in lieu of the shares of the Common Stock of the Company
purchasable and receivable upon the exercise of this Warrant immediately prior
to such Organic Change) such shares of stock, securities or other assets or
property as may be issued or payable in connection with such Organic Change with
respect to or in exchange for the number of outstanding shares of such Common
Stock purchasable and receivable upon the exercise of this Warrant immediately
prior to such Organic Change. In the event of any Organic Change, appropriate
provision shall be made by the Company with respect to the rights and interests
of the Holder of this Warrant to the end that the provisions hereof (including,
without limitation, provisions for adjustments of the Exercise Price and of the
number of shares (or amount of stock, other securities or property) purchasable
and receivable upon the exercise of this Warrant) shall thereafter be
applicable, in relation to any shares of stock, securities or property
thereafter deliverable upon the exercise hereof.  In the event of any
Organic Change pursuant to which the Company is not the surviving or resulting
corporation, prior to the consummation thereof, the corporation resulting from
such Organic Change or the corporation purchasing such assets shall assume by
written instrument the obligation to deliver to the Holder such shares of stock,
securities or assets as, in accordance with the foregoing provisions, the Holder
may be entitled to purchase; provided, however, this Warrant
may be canceled by the Company as of the effective date of any such Organic
Change pursuant to which the Company is not the surviving or resulting
corporation by giving notice to the Holder of the Company’s intent to do so at
least ten (10) business days prior to the effective date of such Organic Change
or record date associated with such Organic Change, whichever is
earlier.

    

    (d)           Liquidation or
Dissolution.  In the event of a proposed dissolution or
liquidation of the Company, this Warrant will terminate immediately prior to the
consummation of such proposed action, so long as the Company has delivered the
notice required by Section 3(f)(iv)
below.

    

    (e)           Certain
Events.   If any change in the outstanding Common Stock of
the Company or any other event occurs as to which the other provisions of this
Section 3 are
not strictly applicable or if strictly applicable would not fairly protect the
purchase rights of the Holder of the Warrant in accordance with such provisions,
then the Board of Directors of the Company shall make an adjustment in the
number and class of shares or other securities or property available under the
Warrant, the Exercise Price or the application of such provisions, so as to
protect such purchase rights as aforesaid. The adjustment shall be such as will
give the Holder of the Warrant upon exercise for the same aggregate Exercise
Price the total number, class and kind of shares or other securities or property
as the Holder have owned had the Warrant been exercised prior to the event and
had the Holder continued to hold such shares until after the event requiring
adjustment.

    

    (f)           Notices of
Change.

    

    (i)           Immediately
upon any adjustment in the number or class of shares subject to this Warrant and
of the Exercise Price, the Company shall give written notice thereof to the
Holder, setting forth in reasonable detail and certifying the calculation of
such adjustment,

    

    (ii)           The
Company shall give written notice to the Holder at least ten (10) business days
prior to the date on which the Company closes its books or takes a record for
determining rights to receive any dividends or distributions,

    

    (iii)           The
Company shall also give written notice to the Holder at least ten (10) business
days prior to the date on which an Organic Change shall take place,
and

    

    (iv)           The
Company shall give written notice to the Holder at least ten (10) business days
prior to the effective date of any proposed liquidation or dissolution of the
Company.

    

    
      
        
        

      

      
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    (g)           Calculations.  All
calculations under this Section 3 shall be
made to the nearest cent or the nearest 1/100th of a
share, as applicable.  The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or for
the account of the Company, and the disposition of any such shares shall be
considered an issue or sale of Common Stock.

     

    (h)           Adjustments.  Notwithstanding
any provision of this Section 3, no
adjustment of the Exercise Price shall be required if such adjustment is less
than $0.01; provided, however, that any
adjustments that by reason of this Section 3(h) are not
required to be made shall be carried forward and taken into account for purposes
of any subsequent adjustment.

    

    4.     Issue
Tax.

    

    The
issuance of certificates for shares of Common Stock upon the exercise of the
Warrant shall be made without charge to the Holder of the Warrant for any issue
tax (other than any applicable income taxes) in respect thereof; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any certificate in a name
other than that of the then Holder of the Warrant being exercised.

    

    5.     No Voting
or Dividend Rights; Limitation of Liability.

    

    Nothing
contained in this Warrant shall be construed as conferring upon the Holder
hereof the right to vote or to consent or to receive notice as a stockholder of
the Company or any other matters or any rights whatsoever as a stockholder of
the Company. No dividends or interest shall be payable or accrue in respect of
this Warrant or the interest represented hereby or the shares purchasable
hereunder until, and only to the extent that, this Warrant shall have been
exercised. No provisions hereof, in the absence of affirmative action by the
Holder to purchase shares of Common Stock, and no mere enumeration herein of the
rights or privileges of the Holder hereof shall give rise to any liability of
such Holder for the Exercise Price or as a stockholder of the Company, whether
such liability is asserted by the Company or by its creditors.

    

    6.     Transfer;
Division and Combination.

    

    (a)           Transfer
Restricted.  This Warrant, and any rights hereunder, may not be
assigned or transferred, except as provided in the legend hereon and in
accordance with and subject to provisions of (i) all applicable state securities
laws, and (ii) the Securities Act of 1933, as amended (the “Securities
Act”), and the rules and regulations promulgated
thereunder.  Any purported transfer or assignment made other than in
accordance with this Section 6 shall be
null and void and of no force and effect.

    

    (b)           Assignment.  Any
assignment permitted hereunder shall be made by surrender of this Warrant to the
Company at its principal place of business as set forth above with a Form of
Assignment in substantially the form attached hereto duly completed and executed
and funds sufficient to pay any transfer tax, if any.  In such event,
the Company shall, without charge, execute and deliver a new Warrant in the name
of the assignee named in such instrument of assignment in the amount so assigned
and this Warrant shall be promptly canceled; provided, however, that in the
event that Holder hereof shall assign or transfer less than the full amount of
this Warrant, a new Warrant evidencing the remaining portion of this Warrant not
so assigned or transferred shall be issued in the name of the
Holder.

    

    (c)           Division and
Combination.  This Warrant may divided or combined with other
Warrants upon presentation and surrender hereof at the principal place of
business of the Company as set forth above, together with a written notice
specifying the names and denominations in which new Warrants are to be issued
signed by the Holder.  Subject to compliance with Section 3(a), as to
any transfer which may be involved in such division or combination, the Company
shall execute and deliver a new Warrant or Warrants of like tenor in exchange
for the Warrant or Warrants to be divided or combined in accordance with such
notice.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (d)           Non-Interference; Par
Value.  The Company shall not close its books against the
transfer of this Warrant or any share of Common stock issued or issuable upon
the exercise of this Warrant in any manner which interferes with the timely
exercise of this Warrant.  The Company shall from time to time take
all such action as may be necessary to ensure that the par value per share of
the unissued Common Stock acquirable upon exercisable of this Warrant is at all
times equal to or less than the Exercise Price then in effect.

    

    7.     Representations
and Covenants of the Holder.

    

    This
Warrant has been entered into by the Company in reliance upon the following
representations and covenants of the Holder:

    

    (a)           Investment Purpose.
The Holder is purchasing the Warrant for the Holder’s own account, or for one or
more investor accounts for which the Holder is acting as a fiduciary or agent,
in each case for investment, and not with a view to, or for offer or sale in
connection with, any distribution thereof in violation of the Securities Act and
state securities laws.

    

    (b)           Disposition of Holder’s
Rights.   The Holder agrees on its own behalf and on
behalf of any investor account for which such Holder is the Warrant to offer,
sell or otherwise transfer such Warrant only (i) to the Company, (ii) pursuant
to a registration statement which has been declared effective under the
Securities Act, or (iii) pursuant to any available exemption from the
registration requirements of the Securities Act and applicable state securities
laws.  The Holder acknowledges that the Company reserves the right
prior to the offer, sale or other transfer made pursuant to clause (iii) above
to require the delivery of an opinion of counsel, certifications and/or other
information satisfactory to the Company.

    

    8.     Right to
Piggyback Registrations.

    

    If the
Company proposes to register any of its securities under the Securities Act for
its own account or for the account of holder of in excess of 10% of the
outstanding Common Stock (other than pursuant to a (a) registration solely in
connection with an employee benefit or stock ownership plan, (b) registration on
Form S-4 or its successor, or (c) registration on any form that does not include
substantially the same information as would be required to be included in a
registration statement covering the sale of the shares of Common Stock issuable
upon exercise of the Warrant, and the registration form to be used may be used
for the registration of shares of Common Stock issuable upon exercise of the
Warrant), the Company will give prompt written notice to the Holder of its
intention to effect such a registration and the Company will use its
commercially reasonable efforts to include in such registration all shares of
Common Stock issuable upon exercise of the Warrant that Holders of the Warrant
request the Company to include in such registration by written notice given to
the Company within ten days after the date of sending of the notice from the
Company.

    

    9.     Register.

    

    The
Company will maintain a register containing the names and addresses of the
registered Holders of the Warrants.  The Holder may change his or its
address as shown on the Warrant register at any time by giving written notice to
the Company requesting such change.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    10.         
Fractional
Shares.

    

    No
fractional shares shall be issued upon exercise of this Warrant. The Company
shall, in lieu of issuing any fractional share, pay the Holder entitled to such
fraction a sum in cash equal to such fraction multiplied by the then effective
Exercise Price.

    

    11.          Miscellaneous.

    

    (a)           Amendments. Any term
of this Warrant may be amended with the written consent of the Company and the
Holder.

    

    (b)           Notices.  Any
notice, request or other document required or permitted to be given or delivered
to the Holder hereof or the Company shall be delivered or shall be sent by
certified mail, postage prepaid, to each such Holder at its address as on the
Warrant Register or to the Company at the address indicated therefor in the
first paragraph of this Warrant or such other address as either may from time to
time provide to the other.

    

    (c)           Binding Effect on
Successors.  This Warrant shall be binding upon any corporation
succeeding the Company by merger, consolidation or acquisition of all or
substantially all of the Company’s assets. All of the covenants and agreements
of the Company shall inure to the benefit of the permitted successors and
assigns of the Holder hereof.

    

    (d)           Descriptive Headings and
Governing Law.  The descriptive headings of the several
sections and paragraphs of this Warrant are inserted for convenience only and do
not constitute a part of this Warrant. This Warrant shall be construed and
enforced in accordance with, and the rights of the parties shall be governed by,
the laws of the State of Texas.

    

    (e)           Lost
Warrants.  The Company represents and warrants to the Holder
hereof that upon receipt of evidence reasonably satisfactory to the Company of
the loss, theft, destruction, or mutilation of this Warrant and, in the case of
any such loss, theft or destruction, upon receipt of an indemnity reasonably
satisfactory to the Company, or, in the case of any such mutilation, upon
surrender and cancellation of such Warrant, the Company, at its expense, will
make and deliver a new Warrant, of like tenor, in lieu of the lost, stolen,
destroyed or mutilated Warrant.

    

    [REMAINDER
OF PAGE INTENTIONALLY BLANK]

     

     

    
      
        
        

      

      
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    IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date of
issuance written above.

     

    
      	 	COMPANY: 
	 	 
	 	POWER3 MEDICAL PRODUCTS,
      INC. 
	 	 
	 	By:________________________________ 
	 	
              Ira L. Goldknopf,
      President 

            

    

     

    
 

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    
 

    EXHIBIT
A

    

    FORM
OF SUBSCRIPTION

    

    Date:  _________,
200_

    Power3
Medical Products, Inc.

    3400
Research Forest Dr., Ste B2-3

    The
Woodlands, Texas 77381

    

    Attn:
President

    

    Ladies
and Gentlemen:

    

    
      	
              □

            	
              The
      undersigned hereby elects to exercise the warrant issued to it by Power3
      Medical Products, Inc. (the “Company’)
      and dated November 4, 2008 (the “Warrant”)
      and to purchase thereunder  ________
      shares of the Common Stock of the Company (the “Shares”)
      at a purchase price of 04/100 Dollars ($0.04) per Share for an aggregate
      purchase price of ______________Dollars ($               )
      (the “Exercise
      Price”). Pursuant to the terms of the Warrant, the undersigned has
      delivered the Exercise Price herewith in full in cash or by certified
      check or wire transfer.

            

    

    

    
      	
              □

            	
              The
      undersigned hereby elects to convert ________________ percent (___%) of
      the value of the Warrant pursuant to the Net Exercise provisions of Section 1(b) of
      the Warrant.

            

    

    

    In
connection with the exercise of the Warrant to purchase the number of shares
specified above, undersigned makes the following representations and
covenants:

    

    1.           The
undersigned is an “Accredited Investor,” as such term is defined in Rule 501(a)
of Regulation D promulgated under the Securities Act of 1933, as amended (the
“Securities
Act”).

     

    2.           The
undersigned is purchasing the Shares for the undersigned’s own account, or for
one or more investor accounts for which the undersigned is acting as a fiduciary
or agent, in each case for investment, and not with a view to, or for offer or
sale in connection with, any distribution thereof in violation of the Securities
Act.

     

    3.           The
undersigned has had access to such financial and other information concerning
the Company and the Shares that the undersigned has deemed necessary in
connection with a decision to purchase the Shares, including an opportunity to
ask questions of and request information from the Company.

    
 

    
      	 	Very truly
      yours, 
	 	 
	 	 
	 	________________________________ 
	 	
              By:______________________________ 

            
	 	
              Name:____________________________ 

            
	 	Title:_____________________________ 

    

     

    

     

    

    
      
        
        

      

      
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    EXHIBIT
B

    

    ASSIGNMENT
FORM

    

    (To
assign the foregoing Warrant, execute this form and supply required
information.

    Do not
use this form to exercise the Warrant)

    

     

                      FOR
VALUE RECEIVED, _____________________________ hereby sells,  assigns
and transfers all of the rights of the undersigned  under the
attached  Warrant (No. 2008- _____) with respect to the number of
shares of Common Stock covered thereby set forth below, unto:

     

    
      	Name
      of Assignee 	Address 	No. of Shares 
	 	 	 
	 	 	 

    

     

     

                                                            

    

    

    By:__________________________________

    Name:____________________________

    Title:_____________________________

    

    Signature
Guaranteed:

    

    

    By:__________________________________

    

    The
signature should be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership in
an approved signature guarantee medallion program) pursuant to Rule 17Ad-15
under the Securities Exchange Act of 1934.

     

     

    B-1

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