Document:

THESE
      SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
      AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED
      FOR
      SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
      OR
      AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE COMPANY THAT SUCH
      REGISTRATION IS NOT REQUIRED.

     

    

     

    
      	
              No._________

            	
              US
                $200,000

            

    

    

     

    POWER3
      MEDICAL PRODUCTS, INC.

    15%
      CONVERTIBLE DEBENTURE SERIES

    DUE
      DECEMBER 30, 2008

    

     

    FOR
      VALUE
      RECEIVED, POWER3 MEDICAL PRODUCTS, INC., a corporation organized and existing
      under the laws of the State of New York (the "Company"), promises to pay to
      ___________________, the registered holder hereof (the "Holder"), the principal
      sum of Two Hundred Thousand and 00/100 Dollars (US $200,000) on December 30,
      2008 (the “Maturity Date”) and to pay interest on the principal sum outstanding
      on a monthly basis, with the first payment payable 30 days after the closing,
      at
      the rate of 15% per annum, accruing from June 30, 2008, the date of initial
      issuance of this Debenture (the “Issue Date”), on the date (each, an “Interest
      Payment Date”) which is the earlier of (i) the next Conversion Date (as defined
      below), or (ii) the Maturity Date, as the case may be. Interest shall accrue
      monthly (pro-rated on a daily basis for any period longer or shorter than a
      month) from the later of the Issue Date or the previous Interest Payment Date
      and shall be payable, subject to the other provisions of this Debenture, in
      cash
      or in Common Stock. If not paid in full on an Interest Payment Date, interest
      shall be fully cumulative and shall accrue on a daily basis, based on a 365-day
      year, monthly or until paid, whichever is earlier. Additional provisions
      regarding the payment of interest are provided in Section 4(D) below (the terms
      of which shall govern as if this sentence were not included in this Debenture).
      

     

    This
      Debenture is subject to the following additional provisions:

    

    1. The
      Debentures will initially be issued in denominations determined by the Company,
      but are exchangeable for an equal aggregate principal amount of Debentures
      of
      different denominations, as requested by the Holder surrendering the same.
      No
      service charge will be made for such registration or transfer or
      exchange.

    

    2. The
      Company shall be entitled to withhold from all payments of principal of, and
      interest on, this Debenture any amounts required to be withheld under the
      applicable provisions of the United States income tax laws or other applicable
      laws at the time of such payments, and Holder shall execute and deliver all
      required documentation in connection therewith.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    3. This
      Debenture has been issued subject to investment representations of the original
      purchaser hereof and may be transferred or exchanged only in compliance with
      the
      Securities Act of 1933, as amended (the "Act"), and other applicable state
      and
      foreign securities laws and the terms of the Securities Purchase Agreement.
      In
      the event of any proposed transfer of this Debenture, the Company may require,
      prior to issuance of a new Debenture in the name of such other person, that
      it
      receive reasonable transfer documentation that is sufficient to evidence that
      such proposed transfer complies with the Act and other applicable state and
      foreign securities laws and the terms of the Securities Purchase Agreement.
      Prior to due presentment for transfer of this Debenture, the Company and any
      agent of the Company may treat the person in whose name this Debenture is duly
      registered on the Company's Debenture Register as the owner hereof for the
      purpose of receiving payment as herein provided and for all other purposes,
      whether or not this Debenture be overdue, and neither the Company nor any such
      agent shall be affected by notice to the contrary.

    

    4. A. 
      (i) At
      any time on or after the Issue Date and prior to the time this Debenture is
      paid
      in full in accordance with its terms (including, without limitation, after
      the
      occurrence of an Event of Default, as defined below, or, if the Debenture is
      not
      fully paid or converted after the Maturity Date), the Holder of this Debenture
      is entitled, at its option, subject to the following provisions of this Section
      4, to convert this Debenture at any time into shares of Common Stock, $0.001
      par
      value ("Common Stock"), of the Company at the Conversion Price (as defined
      below). Any such conversion is referred to as a “Conversion.”

    

    (ii)
      On
      the Maturity Date the Company shall pay the principal and accrued interest
      (through the actual date of payment) of any portion of this Debenture which
      is
      then outstanding.

    

    (iii)
      For
      purposes of this Debenture, the following terms shall have the meanings
      indicated below: 

    

    “Conversion
      Price” means the (i) the VWAP for the three (3) Regular Trading Days (which need
      not be consecutive) selected by the Holder from the 20 Trading Days ending
      on
      the Trading Day immediately before the relevant Conversion Date, multiplied
      by
      (ii) seventy percent (70%).

    

    “Regular
      Trading Day,” “Reporting Service,” “Trading Day,” and “VWAP” have the meanings
      ascribed to them in the Securities Purchase Agreement.

    

    “Conversion
      Date” means the date on which the Holder faxes or otherwise delivers a Notice of
      Conversion to the Company so that it is received by the Company on or before
      such specified date.

    

    “Conversion
      Shares” has the meaning ascribed to in Section 4(H) hereof.

    

    B. A
      Conversion shall be effectuated by the Holder by faxing a notice of conversion
      (“Notice of Conversion”) to the Company as provided in this paragraph. The
      Notice of Conversion shall be executed by the Holder of this Debenture and
      shall
      evidence such Holder's intention to convert this Debenture or a specified
      portion hereof in the form annexed hereto as Exhibit A. Delivery of the Notice
      of Conversion shall be accepted by the Company by hand, mail or courier delivery
      at the address specified in said Exhibit A or at the facsimile number specified
      in said Exhibit A (each of such address or facsimile number may be changed
      by
      notice given to the Holder in the manner provided in the Securities Purchase
      Agreement). If so indicated on the first page of this Debenture, a portion
      of
      the purchase price for this Debenture was represented by the Specific Purchase
      Note. If the Specific Purchase Note was issued, and it is subsequently paid
      or
      otherwise satisfied in full, the Company will promptly acknowledge such payment
      or satisfaction in writing (but the absence of such acknowledgment shall not
      affect the Holder’s rights hereunder). Notwithstanding the foregoing, if the
      Specific Purchase Note was issued on the Issue Date, this Debenture may be
      converted by way of a Conversion only after such Specific Purchase Note has
      been
      paid or otherwise satisfied in full.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    C. Notwithstanding
      any other provision hereof or of any of the other Transaction Agreements, in
      no
      event (except (i) as specifically provided herein as an exception to this
      provision, or (ii) while there is outstanding a tender offer for any or all
      of
      the shares of the Company’s Common Stock) shall the Holder be entitled to
      convert any portion of this Debenture, or shall the Company have the obligation
      to convert such Debenture (and the Company shall not have the right to pay
      interest hereon in shares of Common Stock) to the extent that, after such
      conversion or issuance of stock in payment of interest, the sum of (1) the
      number of shares of Common Stock beneficially owned by the Holder and its
      affiliates (other than shares of Common Stock which may be deemed beneficially
      owned through the ownership of the unconverted portion of the Debentures or
      other convertible securities or of the unexercised portion of warrants or other
      rights to purchase Common Stock), and (2) the number of shares of Common Stock
      issuable upon the conversion of the Debentures with respect to which the
      determination of this proviso is being made, would result in beneficial
      ownership by the Holder and its affiliates of more than 4.99% of the outstanding
      shares of Common Stock (after taking into account the shares to be issued to
      the
      Holder upon such conversion). For purposes of the proviso to the immediately
      preceding sentence, beneficial ownership shall be determined in accordance
      with
      Section 13(d) of the Securities Exchange Act of 1934, as amended, except as
      otherwise provided in clause (1) of such sentence. Nothing herein shall preclude
      the Holder from disposing of a sufficient number of other shares of Common
      Stock
      beneficially owned by the Holder so as to thereafter permit the continued
      conversion of this Debenture.

    

    D. (i)
      Subject to the terms of Section 4(C) and to the other terms of this Section
      4(D), 

    

    (x)
      interest on the principal amount of this Debenture converted pursuant to a
      Notice of Conversion, and

    

    (y)
      any
      other amounts due to the Holder with respect to this Debenture or pursuant
      to
      any other provision of any of the Transaction Agreements, including but not
      necessarily limited to, Administrative Costs (collectively, “Other
      Costs”),

    

    shall
      be
      due and payable, at the option of the Holder, in cash or in shares of Common
      Stock on the Interest Payment Date. 

    

    (ii)
      If
      the interest payable in connection with a Conversion or if Other Costs are
      to be
      paid in cash, the Company shall make such payment within three (3) Trading
      Days
      after the Interest Payment Date (for interest) or of the demand for such Other
      Costs by the Holder, as the case may be.

    

    (iii)
      If
      interest or Other Costs are to be paid in Common Stock, the number of shares
      of
      Common Stock to be received shall be determined by dividing the dollar amount
      of
      the interest by the Conversion Price in effect on the relevant Interest Payment
      Date or on the date of demand for such Other Costs by the Holder, as the case
      may be. For such purposes, the date of a demand for Other Costs by the Holder
      shall be treated (with respect to the amount of such Other Costs) as an Interest
      Payment Date.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    E. The
      Company shall have the right to prepay, at any time, any or all of the
      outstanding principal and interest due pursuant to this Debenture, without
      the
      prior written consent of the Holder.

    

    F. (i)
      The
      following provisions apply to the issuances of Common Stock in payment of the
      amounts due under this Debenture, whether as principal or interest, as provided
      in the preceding provisions of this Section 4.

    

    (ii)
      No
      fractional shares of Common Stock or scrip representing fractions of shares
      will
      be issued on conversion, but the number of shares issuable shall be rounded
      to
      the nearest whole share.

    

    (iii)
      All
      shares issuable with respect to a Conversion Date or Interest Payments Date
      shall be deemed “Conversion Shares” for all purposes of this Debenture and the
      other Transaction Agreements. Certificates representing the relevant Conversion
      Shares (“Conversion Certificates”) will be delivered to the Holder at the
      address specified in the relevant Notice of Conversion or demand for payment
      of
      Other Costs (and if none, the Holder’s the Holder’s address for notices as
      contemplated by the Securities Purchase Agreement, which address the Holder
      may
      change from time to time in the manner provided therein), via express courier,
      by electronic transfer or otherwise, within three (3) Trading Days (such third
      Trading Day, the “Delivery Date”) after the relevant Conversion Date. The Holder
      shall be deemed to be the holder of the shares issuable to it in accordance
      with
      the relevant provisions of this Debenture on the Conversion Date or Interest
      Payment Date, as the case may be.

    

    G. Except
      as
      may specified in a specific provision of this Debenture, any payments under
      this
      Debenture shall be applied in the following order of priority: (i) first to
      Other Costs, (ii) then to accrued but unpaid interest; and (iii) then, to
      principal in the inverse order of maturity. 

    

    5.
       No
      provision of this Debenture shall alter or impair the obligation of the Company,
      which is absolute and unconditional, to pay the principal of, and interest
      on,
      this Debenture at the time, place, and rate, and in the coin or currency or
      where contemplated herein in shares of its Common Stock, as applicable, as
      herein prescribed. This Debenture and all other Debentures now or hereafter
      issued of similar terms are direct obligations of the Company.

     

    6. A.
       Each
      Pledgor (as defined in the Pledge Agreement) is personally guarantying to the
      Holder the timely and full fulfillment of all of the obligations of the Company
      under this Debenture on the terms provided above and in the Guarantee, which
      has
      been executed by such Pledgor in favor of, and delivered to, the
      Holder.

    

    B. The
      obligations of the Company under this Debenture and of each respective Pledgor
      under the Guarantee executed and delivered by such Pledgor are secured under
      the
      terms of the Pledge Agreement, to which the Holder and the Pledgor are parties
      (the "Pledge Agreement"), the terms of which are incorporated herein by
      reference, by a pledge from each respective Pledgor of the number of shares
      of
      the Company's Common Stock identified opposite such Pledgor’s name, of which
      shares the relevant Pledgor is the record and beneficial owner. If the Holder
      forecloses on any of the Pledged Shares, the obligations of the Company will
      be
      reduced only to the extent of the proceeds actually realized from such
      foreclosure, in the priority specified in Section 4(G) hereof.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    7. Except
      as
      provided in Sections 5 and 6 above or in a separate instrument signed by the
      party to be charged therewith, no recourse shall be had for the payment of
      the
      principal of, or the interest on, this Debenture, or for any claim based hereon,
      or otherwise in respect hereof (including, but not limited to, a claim for
      Other
      Costs), against any incorporator, shareholder, officer or director, as such,
      past, present or future, of the Company or any successor corporation, whether
      by
      virtue of any constitution, statute or rule of law, or by the enforcement of
      any
      assessment or penalty or otherwise, all such liability being, by the acceptance
      hereof and as part of the consideration for the issue hereof, expressly waived
      and released.

    

    8. All
      payments contemplated hereby to be made “in cash” shall be made in immediately
      available good funds of United States of America currency by wire transfer
      to an
      account designated in writing by the Holder to the Company (which account may
      be
      changed by notice similarly given). All payments of cash and each delivery
      of
      shares of Common Stock issuable to the Holder as contemplated hereby shall
      be
      made to the Holder at the address last appearing on the Debenture Register
      of
      the Company as designated in writing by the Holder from time to time; except
      that the Holder can designate, by notice to the Company, a different delivery
      address for any one or more specific payments or deliveries.

    

    9. If,
      for
      as long as this Debenture remains outstanding, the Company enters into a merger
      (other than where the Company is the surviving entity) or consolidation with
      another corporation or other entity or a sale or transfer of all or
      substantially all of the assets of the Company to another person (collectively,
      a "Sale"), the Company will require, in the agreements reflecting such
      transaction, that the surviving entity expressly assume the obligations of
      the
      Company hereunder. Notwithstanding the foregoing, if the Company enters into
      a
      Sale and the holders of the Common Stock are entitled to receive stock,
      securities or property in respect of or in exchange for Common Stock, then
      as a
      condition of such Sale, the Company and any such successor, purchaser or
      transferee will agree that the Debenture may thereafter be converted on the
      terms and subject to the conditions set forth above into the kind and amount
      of
      stock, securities or property receivable upon such merger, consolidation, sale
      or transfer by a holder of the number of shares of Common Stock into which
      this
      Debenture might have been converted immediately before such merger,
      consolidation, sale or transfer, subject to adjustments which shall be as nearly
      equivalent as may be practicable. In the event of any such proposed Sale, (i)
      the Holder hereof shall have the right to convert by delivering a Notice of
      Conversion to the Company within fifteen (15) days of receipt of notice of
      such
      Sale from the Company, except that Section 4(C) shall not apply to such
      conversion.

    

    10. If,
      at
      any time while any portion of this Debenture remains outstanding, the Company
      spins off or otherwise divests itself of a part of its business or operations
      or
      disposes of all or of a part of its assets in a transaction (the “Spin Off”) in
      which the Company, in addition to or in lieu of any other compensation received
      and retained by the Company for such business, operations or assets, causes
      securities of another entity (the “Spin Off Securities”) to be issued to
      security holders of the Company, the Company shall cause (i) to be reserved
      Spin
      Off Securities equal to the number thereof which would have been issued to
      the
      Holder had all of the Holder’s Debentures outstanding on the record date (the
“Record Date”) for determining the amount and number of Spin Off Securities to
      be issued to security holders of the Company (the “Outstanding Debentures”) been
      converted as of the close of business on the Trading Day immediately before
      the
      Record Date (the “Reserved Spin Off Shares”), and (ii) to be issued to the
      Holder on the conversion of all or any of the Outstanding Debentures, such
      amount of the Reserved Spin Off Shares equal to (x) the Reserved Spin Off Shares
      multiplied by (y) a fraction, of which (I) the numerator is the principal amount
      of the Outstanding Debentures then being converted, and (II) the denominator
      is
      the principal amount of the Outstanding Debentures.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    11. If,
      at
      any time while any portion of this Debenture remains outstanding, the Company
      effectuates a stock split or reverse stock split of its Common Stock or issues
      a
      dividend on its Common Stock consisting of shares of Common Stock, the prices
      used in determining the Conversion Price from dates prior to such action or
      and
      any other fixed amounts calculated as contemplated hereby or by any of the
      other
      Transaction Agreements shall be equitably adjusted to reflect such action.
      

    

    12. The
      Holder of the Debenture, by acceptance hereof, agrees that this Debenture is
      being acquired for investment and that such Holder will not offer, sell or
      otherwise dispose of this Debenture or the shares of Common Stock issuable
      upon
      conversion thereof except under circumstances which will not result in a
      violation of the Act or any applicable state Blue Sky or foreign laws or similar
      laws relating to the sale of securities.

    

    13. A. This
      Debenture shall be governed by and construed in accordance with the laws of
      the
      State of New York for contracts to be wholly performed in such state and without
      giving effect to the principles thereof regarding the conflict of
      laws.

    

    B. In
      the
      event of any litigation or dispute arising from this Debenture or any of the
      other Transaction Agreements, the parties agrees that the party which is awarded
      the most money shall be deemed the prevailing party for all purposes and such
      prevailing party shall be entitled to an additional award from the other party
      for the full amount of the attorneys’ fees and expenses paid or payable by such
      prevailing party in connection with the litigation and/or dispute, without
      reduction or apportionment based upon the individual claims or defenses giving
      rise to such fees and expenses. Nothing in this Section 13(B) shall restrict
      or
      impair a court’s power to award fees and expenses to any party for frivolous or
      bad faith pleading by the other party.

    

    C. JURY
      TRIAL WAIVER.
      The
      Company and the Holder hereby waive a trial by jury in any action, proceeding
      or
      counterclaim brought by either of the Parties hereto against the other in
      respect of any matter arising out of or in connection with this Debenture.
      

    

    14. A. The
      term
      "Event of Default" means the occurrence of any one or more of the following
      events:

    

    
      	 	 	
              i.

            	
              The
                Company shall default in the payment of principal or interest on
                this
                Debenture when due and such default shall continue for a period of
                ten
                (10) Trading Days; or

            

    

    

    
      	 	 	
              ii.

            	
              There
                is a Cancellation Date; or

            

    

    

    
      	 	 	
              iii.

            	
              Any
                of the representations or warranties made by the Company herein,
                or any of
                the other Transaction Agreements or in any certificate or financial
                or
                other written statements heretofore or hereafter furnished by the
                Company
                in connection with the execution and delivery of this Debenture shall
                be
                false or misleading in any material respect at the time made;
                or

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	 	 	
              iv.

            	
              The
                Company shall fail to perform or observe, in any material respect,
                any
                covenant, term, provision, condition, agreement or obligation of
                the
                Company under any of the Transaction Agreements and such failure,
                if
                capable of being cured, shall continue uncured for a period of ten
                (10)
                Trading Days after the Holder gives the Company written notice
                thereof;

            

    

    

    
      	 	 	
              v.

            	
              The
                Company shall fail to maintain its status as a reporting company
                under the
                federal securities laws; or

            

    

    

    
      	 	 	
              vi.

            	
              The
                Company shall fail to timely file all reports required to be filed
                by it
                with the SEC pursuant to Section 12 or 15(d) of the 1934 Act, or
                otherwise
                required by the 1934 Act; or

            

    

    

    
      	 	 	
              vii.

            	
              The
                Company shall have its Common Stock suspended from trading on the
                Principal Trading Market for in excess of ive (5) Trading Days or
                the
                Company’s Common Stock is delisted from trading on the Principal Trading
                Market; or

            

    

    

    
      	 	 	
              viii.

            	
              The
                Company or any of its Subsidiaries shall (x) admit in writing its
                inability to pay its debts generally as they mature; (y) make an
                assignment for the benefit of creditors or commence proceedings for
                its
                dissolution; or (z) apply for or consent to the appointment of a
                trustee,
                liquidator or receiver for its or for a substantial part of its property
                or business; or

            

    

    

    
      	 	 	
              ix.

            	
              A
                trustee, liquidator or receiver shall be appointed for the Company
                or any
                of it Subsidiaries or for a substantial part of such entitiy’s property or
                business without its consent and shall not be discharged within sixty
                (60)
                days after such appointment; or

            

      	 	 	 	 

      	 	 	x.	Any governmental agency or any court of competent
              jurisdiction at the instance of any governmental agency shall assume
              custody or control of the whole or any substantial portion of the
              properties or assets of the Company or any of its Subsidiaries and
              shall
              not be dismissed within sixty (60) days thereafter;
              or

    

     

    
      	 	 	
              xi.

            	
              Bankruptcy,
                reorganization, insolvency or liquidation proceedings or other proceedings
                for relief under any bankruptcy law or any law for the relief of
                debtors
                shall be instituted by or against the Company or any of its Subsidiaries
                and, if instituted against the Company or any such Subsidiary, shall
                not
                be dismissed within sixty (60) days after such institution or the
                Company
                or such Subsidiary shall by any action or answer approve of, consent
                to,
                or acquiesce in any such proceedings or admit the material allegations
                of,
                or default in answering a petition filed in any such proceeding;
                or

            

    

    

    
      	 	 	
              xii.

            	
              Any
                money judgment, writ or warrant of attachment, or similar process
                in
                excess of Two Hundred Thousand Dollars ($200,000) in the aggregate
                shall
                be entered or filed against the Company or any of it Subsidiaries
                or any
                of such entity’s properties or other assets and shall remain unpaid,
                unvacated, unbonded or unstayed for a period of five (5) Trading
                Days;
                or

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	 	 	
              xiii.

            	
              The
                Company or any of its Subsidiaries is, by the end of any relevant
                grace
                period, in default in the payment of principal or interest as and
                when due
                and payable under any one or more debt obligations of the Company
                and its
                Subsidiaries (or any combination thereof) such that the aggregate
                amount
                of such defaults is in excess of Two Hundred Thousand Dollars ($200,000);
                or

            

    

    

    
      	 	 	
              xiv.

            	
              The
                average trading value over any consecutive ten (10) trading days
                shall be
                less than $7,000 per trading day; or

            

      	 	 	 	 

      	 	 	xv.	It becomes unlawful for the Company to perform its
              outstanding obligations under this Debenture or any other Debenture
              issued
              pursuant to the Securities Purchase Agreement;
              or

    

     

     

    B. If
      an
      Event of Default shall have occurred and is continuing, then, 

    

    (i)
      unless and until such Event of Default shall have been cured or waived in
      writing by the Holder (which waiver shall not be deemed to be a waiver of any
      subsequent default), at the option of the Holder and in the Holder’s sole
      discretion, but without further notice from the Holder, the unpaid amount of
      this Debenture, computed as of such date, will bear interest at the rate (the
      “Default Rate”) equal to one percent (1%) per month or the highest rate allowed
      by law, whichever is lower, from the date of the Event of Default to until
      and
      including the date actually paid; and any partial payments shall be applied
      as
      provided in Section 5 hereof; and

    

    (ii)
      at
      any time thereafter, and in each and every such case, unless such Event of
      Default shall have been cured or waived in writing by the Holder (which waiver
      shall not be deemed to be a waiver of any subsequent default), at the option
      of
      the Holder and in the Holder's sole discretion, the Holder may elect to redeem
      all or part of the Unconverted Debenture (as defined below) on the terms
      provided in Section 15 hereof.

    

    15.
       A. The
      Company acknowledges that if there is an Event of Default, the Holder may
      require the Company to immediately redeem all or any part of the outstanding
      portion of this Debenture for an amount equal to the Redemption Amount (as
      defined below). The Redemption Amount shall be paid in cash by the Company
      to
      the Holder. As of the Redemption Due Date or, if earlier, the Redemption Payment
      Date (as those terms are defined below), the Redemption Amount shall be deemed
      applied, if so elected by the Holder, to any outstanding balance due on the
      Specific Purchase Note and then to any outstanding balance on any Purchase
      Note
      issued by the Holder, as designated by the Holder. Any portion of the Redemption
      Amount which is not so applied shall be paid in cash to the Holder and shall
      be
      applied in the priority provided in Section 4(I) hereof.

    

    B. For
      purposes of this Debenture, the following terms shall have the meanings
      indicated below: 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Unconverted
      Debenture” means the principal amount of this Debenture which has not been
      converted as of the relevant date. 

    

    “Redemption
      Payment Date” means the date on which the Company actually pays the Redemption
      Amount.

    

    “Redemption
      Amount” means the amount equal to the sum of (i) the Applicable Redemption
      Percentage of the principal of an Unconverted Debenture which is being redeemed,
      plus (ii) any accrued but unpaid interest thereon through and including the
      Redemption Payment Date, plus (iii) all Other Costs.

    

    “Applicable
      Redemption Percentage” means one hundred ten percent (110%), unless the Event of
      Default is one specified under Section 14(A)(viii) or (ix), in which event
      it
      means one hundred fifty percent (150%).

    

    C. The
      Holder of an Unconverted Debenture may elect to redeem a portion of such
      Unconverted Debenture without electing to redeem the balance of the Unconverted
      Debenture; provided, however, that if the Holder gives a Redemption Notice
      (as
      defined below) without specifying the amount of the Unconverted Debenture being
      redeemed, such Redemption Notice shall be deemed to refer to the full principal
      amount of the Unconverted Debenture. The Holder’s option to redeem all or part
      of the Unconverted Debenture shall be exercised by the Holder giving written
      notice of the exercise of this provision by the Holder (a “Redemption Notice”)
      at any time after a relevant Event of Default has occurred but before such
      Event
      of Default is cured. The Redemption Notice shall specify (a) the date (the
      “Redemption Due Date”) on which the Redemption Amount shall be paid, which date
      shall be at least five (5) Trading Days after the date (a “Redemption Notice
      Date”) on which the Holder Redemption Notice is given, and (b) the wire
      instructions for the account to which the Redemption Amount is to be paid;
      provided, however, that the Company shall have the right to accelerate the
      date
      of such payment.

    

    D. If
      all of
      the Unconverted Debentures are being redeemed pursuant to this Section 5, then,
      upon payment in full of the Redemption Amount for all of the Unconverted
      Debentures in accordance with the provisions of this Section 5, the Holder
      shall
      deliver the Debenture to the Company marked “paid in full”.

    

    E. If
      the
      Redemption Amount is not timely paid by the Company, the Redemption Amount
      shall
      accrue interest at the Default Rate and the Holder may declare the Redemption
      Amount, together with such interest, due under this Debenture immediately due
      and payable, without presentment, demand, protest or notice of any kinds, all
      of
      which are hereby expressly waived, anything herein or in any note or other
      instruments contained to the contrary notwithstanding, and the Holder may
      immediately enforce any and all of the Holder's rights and remedies provided
      herein or any other rights or remedies afforded by law, including, but not
      necessarily limited to, the equitable remedy of specific performance and
      injunctive relief.

    

    16. Nothing
      contained in this Debenture shall be construed as conferring upon the Holder
      the
      right to vote or to receive dividends or to consent or receive notice as a
      shareholder in respect of any meeting of shareholders or any rights whatsoever
      as a shareholder of the Company, unless and to the extent converted in
      accordance with the terms hereof.

    

    17. Any
      notice required or permitted hereunder shall be given in manner provided in
      the
      Section headed "NOTICES" in the Securities Purchase Agreement, the terms of
      which are incorporated herein by reference.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    18. The
      Company may prepay the entire principal, along with any accrued interest, due
      under this note at any time without penalty. 

    

    

    IN
      WITNESS WHEREOF, the Company has caused this instrument to be duly executed
      by
      an officer thereunto duly authorized.

    

    Dated:
      _________________, 20___

    

    

    
      	 	
              POWER3
                MEDICAL PRODUCTS, INC.

            	 
	 	 	 
	 	
              By:_______________________________________

            	 
	 	 	 
	 	
              __________________________________________

            	 
	 	
              (Print
                Name)

            	 
	 	
              _________________________________________

            	
               

            
	 	
              (Title)

            	 

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

    

    POWER3
      MEDICAL PRODUCTS, INC.

    NOTICE
      OF
      CONVERSION

    OF

    15%
      CONVERTIBLE DEBENTURE 

    DUE
      JANUARY 1, 2009

    

    (To
      be
      Executed by the Registered Holder in Order to Convert the
      Debenture)

    

    
      	
              TO:

            	
              POWER3
                MEDICAL PRODUCTS, INC.

            	
              VIA
                FAX: (281) 466-1481 

            
	 	
              3400
                Research Forest Drive, Suite B2-3

            	 
	 	
              The
                Woodlands, TX 77381

            	 
	 	
              Attn:
                President

            	 

    

    

    FROM:
      _________________________________________________________
      (“Holder”)

    

    DATE:
      _______________________________________________ (the “Conversion
      Date”)

    

    
      	
              RE:

            	
              Conversion
                of $_________________ principal amount (the “Converted Debenture”) of the
                15% Convertible Debenture Due January 1, 2009, (the “Debenture”) of POWER3
                MEDICAL PRODUCTS, INC. (the “Company”) into ______________________ shares
                (the “Principal Conversion Shares”) of Common Stock (defined
                below)

            

    

    

    
      	
              Note:
                Either the purchase price for this Debenture was paid for in full
                on or
                prior to the Issue Date or the Specific Purchase Note for this Debenture
                has been paid or otherwise satisfied in full prior to the issuance
                of this
                Notice of Conversion.

            

    

     

    The
      captioned Holder hereby gives notice to the Company, pursuant to the Debenture
      of POWER3 MEDICAL PRODUCTS, INC. that the Holder elects to convert the Converted
      Debenture into fully paid and non-assessable shares of Common Stock, $0.001
      par
      value (the “Common Stock”), of the Company as of the Conversion Date specified
      above. Said conversion shall be based on Conversion Price of
      $________________.1

     

     

    ______________________

    1As
      defined in the Debenture,

    

    “Conversion
      Price” means the (i) the VWAP for the three (3) Regular Trading Days (which need
      not be consecutive) selected by the Holder from the twenty (20) Trading Days
      ending on the Trading Day immediately before the relevant Conversion Date,
      multiplied by (ii) seventy percent (70%).

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    
    

    As
      contemplated by the Debenture, the Company should also pay all accrued but
      unpaid interest on the Converted Debenture to the Holder. The Holder elects
      that
      such accrued but unpaid interest should be paid

    

    ࿇ in
      ______________ shares of Common Stock (“Interest Conversion Shares”),
      representing such interest amount converted at the Conversion Price indicated
      above, which Interest Conversion Shares should be delivered together with the
      Principal Conversion Shares, or 

     

    ࿇ in
      cash, which should be paid as provided in the Debenture by wire transfer as
      follows2:

     

    
      ___________________________________

      

      ___________________________________

      

      ___________________________________
        

      

      Based
        on
        this Conversion Price, the number of Principal Conversion Shares plus Interest
        Conversion Shares (collectively, “Conversion Shares”) indicated above should be
        issued in the following name(s):

      

      
        	 	
                Name
                  and Record Address

              	
                Conversion
                  Shares

              
	 	
                _______________________________

              	
                _______________

              
	 	
                _______________________________

              	
                _______________

              
	 	
                _______________________________

              	
                _______________

              

      

      

      It
        is the
        intention of the Holder to comply with the provisions of Section 4(C) of
        the
        Debenture regarding certain limits on the Holder's right to convert thereunder.
        The Holder believe this conversion complies with the provisions of said Section
        4(C). Nonetheless, to the extent that, pursuant to the conversion effected
        hereby, the Holder would have more shares than permitted under said Section,
        this notice should be amended and revised, ab initio, to refer to the conversion
        which would result in the issuance of shares consistent with such provision.
        Any
        conversion above such amount is hereby deemed void and revoked.

       

      
        
          

        

        The
          Worksheet attached to this Notice of Conversion lists the 3 Regular Trading
          Days
          used in determining the Conversion Price.

        2Information
          should include the following:

         

      

    

    All
      Wires: 

    (1)
      Bank
      Name

    (2)
      Bank
      Address (including street, city, state) 

    (3)
      ABA
      or Wire Routing No. 

    (4)
      Account Name

    (5)
      Account Number

    

    If
      Wire
      is going to International (Non-US) Bank, all of the above plus:

    (6)
      SWIFT
      Number

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    As
      contemplated by the Debenture, this Notice of Conversion is being sent by
      facsimile to the telecopier number and officer indicated above. 

    

    If
      this
      Notice of Conversion represents the full conversion of the outstanding balance
      of the Converted Debenture, the Holder either (1) has previously surrendered
      the
      Converted Debenture to the Company or (2) will surrender (or cause to be
      surrendered) the Converted Debenture to the Company at the address indicated
      above by express courier within five (5) Trading Days after delivery or
      facsimile transmission of this Notice of Conversion. 

    

    The
      certificates representing the Conversion Shares should be transmitted by the
      Company to the Holder

    

    ࿇ via
      express courier, or 

    

    ࿇ by
      electronic transfer

    

    within
      the time contemplated by the Debenture after receipt of this Notice of
      Conversion (by facsimile transmission or otherwise) to:

    

    _____________________________________

    _____________________________________

    _____________________________________

    

    

    
      	 	
              _____________________________________

            	
            
	 	
              (Print
                name of Holder)

            	
               

            
	 	 	 
	 	
              By:
                __________________________________

            	 
	 	
              (Signature
                of Authorized Person)

            	 
	 	 	 
	 	
              ______________________________________

            	 
	 	
              (Printed
                Name and Title)

            	 

    

    

    

    CONVERSION
      PRICE WORKSHEET

    

    The
      following information was used in determining the Conversion Price referred
      to
      in this Notice of Conversion.

    
       

      
        	
                1.

              	
                Conversion
                  Date:  ___________________,
                  20__

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

       

      
        	
                2.

              	
                The
                  Holder selected the following three (3) Regular Trading Days (which
                  need
                  not be consecutive) out of the 20 Trading Days ending on the Trading
                  Day
                  before the Conversion Date:

              

      

       

      
        	
                 

              	
                (1)

              	
                /
                  /

              
	
                 

              	
                (2)

              	
                /
                  /

              
	
                 

              	
                (3)

              	
                /
                  /

              

      

      

      
        	
                3.

              	
                The
                  VWAP for Regular Trading Days of the 3 Regular Trading Days specified
                  above was $_____.

              

      

       

      
        	
                4.

              	
                75%
                  of amount specified in item 3 above is $_____
                  (=
                  the Conversion Price).GUARANTY

    

    

    GUARANTY
      dated as of June 30, 2008 ("Guaranty") made by Steven B. Rash, an individual
      residing at,10 Spiceberry Place, The Woodlands, TX 77382 (“Guarantor”) in favor
      of _____________________ ("Lender").  

    

    WITNESSETH

    

    WHEREAS,
      Power 3 Medical Products, Inc., a New York corporation (the “Borrower”), and the
      Lender are parties to a Debenture, dated as of June 30, 2008 (such agreement,
      as
      amended, restated, supplemented or otherwise modified from time to time, being
      hereinafter referred to as the “Debenture”);

    

    WHEREAS,
      pursuant to the Debenture, the Guarantor is required to execute and deliver
      to
      the Lender a guaranty guaranteeing the Debenture and all other obligations
      under
      the Debenture and the other Loan Documents; and

    

    WHEREAS,
      the Guarantor has determined that (i) it will derive substantial benefit and
      advantage from the loan and other financial accommodations made available to
      the
      Borrower under the Debenture and the other Loan Documents and (ii) its
      execution, delivery and performance of this Guaranty directly benefit, and
      are
      within the best interests of, the Guarantor;

    

    NOW,
      THEREFORE, in consideration of $1,000, paid by the Borrower to the Guarantor,
      receipt of which is hereby acknowledged, the premises, the agreements herein
      and
      in order to induce the Lender to make and maintain the Loan pursuant to the
      Debenture, the Guarantor hereby agrees with the Lender, as follows:

    

    Section
      1. Definitions.
      Reference is hereby made to the Debenture for a statement of the terms thereof.
      All terms used in this Guaranty which are defined in the Debenture and not
      otherwise defined herein shall have the same meanings herein as set forth
      therein. As used in this Guaranty, the following terms have the following
      meanings (terms defined in the singular to have the same meaning when used
      in
      the plural and vice versa):

    

    “Borrower”
      has the meaning specified in the preamble above.

    

    “Guaranty”
      means this Guaranty.

    

    “Guaranty
      Documents” means the Loan Documents and any document or agreement evidencing,
      related to or delivered in connection with any or all of the Guaranteed
      Obligations.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

      “Guaranteed
      Obligations” means any and all present and future liabilities and obligations of
      Borrower and Grantor to Lender incurred by Borrower and Grantor under the Loan
      Documents, and whether due or to become due, secured or unsecured, absolute
      or
      contingent, joint or several, direct or indirect, acquired outright,
      conditionally or as collateral security by Lender from another, liquidated
      or
      unliquidated, arising by operation of law or otherwise, together with all fees
      and expenses incurred in collecting any or all of the items specified in this
      definition or enforcing any rights under any of the Guaranty Documents,
      including all fees and expenses of Lender’s counsel and of any experts and
      agents which may be paid or incurred by Lender in collecting any such items
      or
      enforcing any such rights.

    

    Section
      2. Rules
      of Interpretation.
      When
      used in this Guaranty: (1) “or” is not exclusive, (2) a reference to a law
      includes any amendment or modification to such law, and (3) a reference to
      an
      agreement, instrument or document includes any amendment or modification of
      such
      agreement, instrument or document.

    

    Section
      3. Guaranty.
      Guarantor hereby guarantees to Lender and its successors, endorsees, transferees
      and assigns the prompt and complete payment, as and when due and payable
      (whether at stated maturity or by required prepayment, acceleration, demand
      or
      otherwise), of all of the Guaranteed Obligations now existing or hereafter
      incurred will be paid strictly in accordance with their terms.

    

    Section
      4. Limitation
      of Liability.
      The
      obligation of Guarantor under this Guaranty shall be limited to an aggregate
      amount equal to the largest amount that would not render the obligation of
      Guarantor under this Guaranty subject to avoidance under Section 548 of the
      United States Bankruptcy Code or any comparable provision of any applicable
      state law.

    

    Section
      5. Type
      of Guaranty.
      This
      Guaranty is absolute and unconditional and as such is not subject to any
      conditions and Guarantor is fully liable to perform all of its duties and
      obligations under this Guaranty as of the date of execution of this Guaranty.
      This Guaranty is a continuing guaranty and applies to all future Guaranteed
      Obligations. In addition, this Guaranty shall remain in full force and effect
      even if at any time there are no outstanding Guaranteed Obligations. This
      Guaranty is a guaranty of payment and not of collection. The obligations and
      liabilities of Guarantor under this Guaranty shall not be conditioned or
      contingent upon the pursuit by Lender of any right or remedy against Borrower,
      Grantor or any other person which may be or become liable in respect of all
      or
      any part of the Guaranteed Obligations, or against any assets securing the
      payment of the Guaranteed Obligations or guarantee for such Guaranteed
      Obligations or right of setoff with respect to such Guaranteed Obligations.
      This
      Guaranty is irrevocable and as such cannot be cancelled, terminated or revoked
      by Guarantor.

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    Section
      6. Reinstatement
      of Guaranty.
      This
      Guaranty shall continue to be effective or shall be reinstated, as the case
      may
      be, if at any time any payment, or any part thereof, of any of the Guaranteed
      Obligations are rescinded or must otherwise be returned by Lender upon the
      insolvency, bankruptcy, dissolution, liquidation or reorganization of Borrower,
      Grantor or otherwise, all as though such payment had not been made.

    

    Guarantor
      hereby consents that, without the necessity of any reservation of rights against
      Guarantor and without notice to or further assent by Guarantor, any demand
      for
      payment of any of the Guaranteed Obligations made by Lender may be rescinded
      by
      Lender and any of such Guaranteed Obligations continued after such
      rescission.

    

    Section
      7. Security
      Interest.
      To
      secure the payment of the obligations of Guarantor under this Guaranty,
      Guarantor has executed a Pledge Agreement in favor of, and grants Lender a
      pledge and security interest in the Pledged Shares listed in Schedule 1 to
      the
      Pledge Agreement.

    

    Section
      8. Waiver
      of Notices.
      Guarantor hereby waives any and all notices including (1) notice of or proof
      of
      reliance by Lender upon this Guaranty or acceptance of this Guaranty, (2) notice
      of the incurrence of any Guaranteed Obligations or the renewal, extension or
      accrual of any such Guaranteed Obligations, (3) notice of any actions taken
      by
      Lender, Borrower, Grantor or any other person under any Guaranty Document,
      and
      (4) notices of nonpayment or nonperformance, protest, notices of protest and
      notices of dishonor.

    

    Section
      9. Waiver
      of Defenses.
      Guarantor hereby waives any and all defenses to the performance by Guarantor
      of
      its duties and obligations under this Guaranty, including any defense based
      on
      any of the following:

    

    (1) any
      failure of Lender to disclose to Guarantor any information relating to the
      business, condition (financial or otherwise), operations, performance,
      properties or prospects of any party obligated to make payment on any and all
      Guaranteed Obligations, whether as principal or guarantor, now or hereafter
      known to Lender,

    

    (2) any
      defense to the payment of any or all the Guaranteed Obligations, including
      lack
      of validity or enforceability of any of the Guaranteed Obligations or any
      Guaranty Documents, 

    

    (3) any
      change in the time, manner or place of payment of, or in any other term in
      respect of, all or any of the Guaranteed Obligations, or any other amendment
      or
      waiver of or consent to any departure from any Guaranty Document,

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    (4) any
      exchange or release of, or non-perfection of any security interest on or in
      any
      assets securing the payment of the Guaranteed Obligations,

     

    (5) any
      failure to execute any other guaranty for all or any part of the Guaranteed
      Obligations, or any release or amendment or waiver of, or consent to any
      departure from, any other guaranty for any or all of the Guaranteed Obligations,
      

    
       

      (6)
any
        subordination of any or all of the Guaranteed Obligations, 

       

    

    (7) 
      any act
      or omission of Lender in connection with the enforcement of, or the exercise
      of
      rights and remedies, including any election of, or the order of exercising
      any,
      remedies, with respect to (a) the Guaranteed Obligations, (b) any other
      guarantor of the Guaranteed Obligations, or (c) any assets securing the payment
      of the Guaranteed Obligations, 

    

    (8) any
      manner of application of any funds received by Lender to Guaranteed Obligations
      or any other obligations owed to Lender, whether from the sale or disposition
      of
      any assets securing the Guaranteed Obligations, from another guarantor of the
      Guaranteed Obligations or otherwise, and 

    

    (9) any
      failure to give or provide any notices, demands or protests, including those
      specified under Section 8 herein, entitled “Waiver of Notices”.

    

    Section
      10. Subrogation.
      Guarantor may not exercise any rights which Guarantor may acquire by way of
      subrogation or contribution, whether acquired by any payment made under this
      Guaranty, by any setoff or application of funds of Borrower, by Lender or
      otherwise, until (1) the payment in full of the Guaranteed Obligations (after
      Lender no longer has any obligation or arrangement to provide credit to
      Borrower, including under or pursuant to a line of credit), and (2) the payment
      of all fees and expenses to be paid by Guarantor pursuant to this Guaranty.
      If
      any amount shall be paid to Guarantor on account of such subrogation or
      contribution rights at any time when all of the Guaranteed Obligations and
      all
      such other expenses shall not have been paid in full (after Lender no longer
      has
      any obligation or arrangement to provide credit to Borrower, including under
      or
      pursuant to a line of credit), such amount shall be held in trust for the
      benefit of Lender, shall be segregated from the other funds of Guarantor and
      shall forthwith be paid over to Lender to be credited and applied in whole
      or in
      part by Lender against the Guaranteed Obligations, whether matured or unmatured,
      and all such other fees and expenses in accordance with the terms of the
      Guaranty Documents.

    

    Section
      11. Representations.
      At the
      time of execution of this Guaranty and each time Lender provides credit as
      Debentured above, Guarantor represents and warrants to Lender as
      follows:

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    (1) Name.
      The
      exact legal name of the Guarantor is the name specified in the preamble to
      this
      Guaranty. The Guarantor has not been known by any other name during the five
      (5)
      years prior to the date of the Guaranty.

    

    (2) Location.
      The
      principal residence of the Guarantor is 10 Spiceberry Place, The Woodlands,
      TX
      77382.

    

    (3) No
      Contravention.
      The
      execution, delivery and performance by Guarantor of this Guaranty do not and
      will not (a) violate any provision of any law, order, writ, judgment,
      injunction, decree, determination, or award presently in effect applicable
      to
      Guarantor, (b) result in a breach of or constitute a default under any indenture
      or loan or credit agreement or any other agreement, lease, or instrument to
      which Guarantor is a party or by which Guarantor or its properties may be bound
      or affected, or (c) result in, or require, the creation or imposition of any
      lien upon or with respect to any of the properties now owned or hereafter
      acquired by Guarantor.

    

    (4) Governmental
      Authority.
      No
      authorization, approval or other action by, and no notice to or filing with,
      any
      governmental authority is required for the due execution, delivery and
      performance by Guarantor of this Guaranty.

    

    (5) Legally
      Enforceable Guaranty.
      This
      Guaranty is the legal, valid and binding obligation of Guarantor, enforceable
      against Guarantor in accordance with its terms, except to the extent that such
      enforcement may be limited by (a) applicable bankruptcy, insolvency, and other
      similar laws affecting creditors' rights generally, or (b) general equitable
      principles, regardless of whether the issue of enforceability is considered
      in a
      proceeding in equity or at law.

    

    Section
      12. Remedies.
      Lender
      shall not, by any act, delay, omission or otherwise, be deemed to have waived
      any of its rights or remedies under this Guaranty or otherwise. A waiver by
      Lender of any right or remedy hereunder on any one occasion, shall not be
      construed as a ban or waiver of any such right or remedy which Lender would
      have
      had on any future occasion, nor shall Lender be liable for exercising or failing
      to exercise any such right or remedy. The rights and remedies of Lender under
      this Guaranty are cumulative and, as such, are in addition to any other rights
      and remedies available to Lender under law or any other agreements.

    

    Section
      13. Appointment
      as Attorney-in-Fact.
      Guarantor hereby appoints Lender as the attorney-in-fact for Guarantor, with
      full authority in the place and stead of Guarantor and in the name of Guarantor
      or otherwise, to exercise all rights and remedies granted to Lender under this
      Guaranty and to take any action and to execute any instrument which Lender
      may
      deem necessary or advisable to accomplish the purposes of this
      Guaranty.

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    Section
      14. Indemnity
      and Expenses.
      Guarantor hereby indemnifies Lender from and against any and all claims, losses,
      damages and liabilities growing out of or resulting from this Guaranty
      (including, without limitation, enforcement of this Guaranty), except claims,
      losses, damages or liabilities resulting from Lender's gross negligence and
      willful misconduct. 

    Guarantor
      will upon demand pay to Lender the amount of any and all expenses, including
      the
      fees and expenses of its counsel and of any experts and agents, which Lender
      may
      incur in connection with (1) any amendment to this Guaranty, (2) the
      administration of this Guaranty, (3) the exercise or enforcement of any of
      the
      rights of Lender under this Guaranty, or (4) the failure by Guarantor to perform
      or observe any of the provisions of this Guaranty.

    

    Section
      15. Amendments.
      No
      amendment or waiver of any provision of this Guaranty, nor consent to any
      departure by Guarantor from this Guaranty, shall in any event be effective
      unless the same shall be in writing and signed by Guarantor and Lender, and
      then
      such amendment or waiver shall be effective only in the specific instance and
      for the specific purpose for which given.

    

    Section
      16. Addresses
      for Notices.
      All
      notices and other communications provided for under this Guaranty shall be
      in
      writing and, mailed or delivered by messenger or overnight delivery service,
      addressed, in the case of Guarantor at its address specified below its
      signature, and in the case of Lender at the address specified below, or as
      to
      any such party at such other address as shall be designated by such party in
      a
      written notice to the other party complying as to delivery with the terms of
      this Section.

    

    

    If
      to
      Lender:

     

    
      Attention:

    

     

    With
      copies to:

    

     

    

    If
      to
      Guarantor:

     

    Steven
      B.
      Rash

    c/o
      Power3 Medical Products, Inc.

    3400
      Research Forest Drive

    The
      Woodlands, Texas 77381

    Fax
      No.:
      281-466-1481

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    

    With
      copies to:

    

    Sichenzia
      Ross Friedman Ference LLP

    Attn:
      Darrin M. Ocasio

    61
      Broadway, 32nd
      Fl.

    New
      York,
      New York 10006

    Fax
      No.:
      212-981-6774

    

    All
      such
      notices and other communications shall, when mailed, be effective three (3)
      days
      after being placed in the mails, or when delivered to a messenger or overnight
      delivery service, be effective one (1) day after being delivered to the
      messenger or overnight delivery service, in each case, addressed as specified
      above.

    

    Section
      17. Assignment
      and Transfer of Obligations.
      This
      Guaranty will bind the estate of Guarantor as to Guaranteed Obligations created
      or incurred both before and after the death or incapacity of Guarantor, whether
      or not Lender receives notice of such death or incapacity. This Guaranty shall
      inure to the benefit of Lender and its successors, transferees and assigns.
      Guarantor may not transfer or assign its obligations under this Guaranty. Lender
      may assign or otherwise transfer all or a portion of its rights or obligations
      with respect to the Guaranteed Obligations to any other party, and such other
      party shall then become vested with all the benefits in respect of such
      transferred Guaranteed Obligations granted to Lender in this Guaranty or
      otherwise. Guarantor agrees that Lender can provide information regarding
      Guarantor to any prospective or actual successor, transferee or
      assign.

    

    Section
      18. Setoff.
      Guarantor agrees that, in addition to, and without limiting, any right of
      setoff, Lender’s lien or counterclaim Lender may otherwise have, Lender shall be
      entitled, at its option, to offset balances (general or special, time or demand,
      provisional or final) held by it for the account of Guarantor, at any of the
      offices of Lender, in Dollars or any other currency, against any amount payable
      by Guarantor to Lender under this Guaranty which is not paid when demanded
      (regardless of whether such balances are then due to Guarantor), in which case
      Lender shall promptly notify Guarantor, provided that Lender’s failure to give
      such notice shall not affect the validity of such offset.

    

    Section
      19. Submission
      to Jurisdiction.
      Guarantor hereby irrevocably submits to the jurisdiction of any federal or
      state
      court sitting in New York County in the State of New York over any action or
      proceeding arising out of or related to this Guaranty and agrees with Lender
      that personal jurisdiction over Guarantor rests with such courts for purposes
      of
      any action on or related to this Guaranty. Guarantor hereby waives personal
      service by manual delivery and agrees that service of process may be made by
      prepaid certified mail directed to Guarantor at the address of Guarantor for
      notices under this Guaranty or at such other address as may be designated in
      writing by Guarantor to Lender, and that upon mailing of such process such
      service will be effective as if Guarantor was personally served. Guarantor
      agrees that a final judgment in any such action or proceeding shall be
      conclusive and may be enforced in other jurisdictions by suit on the judgment
      or
      in any manner provided by law. Guarantor further waives any objection to venue
      in any such action or proceeding on the basis of inconvenient forum. Guarantor
      agrees that any action on or proceeding brought against Lender shall only be
      brought in such courts.

    

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    Section
      20. Governing
      Law.
      This
      Guaranty shall be governed by and construed in accordance with the laws of
      the
      State of New York without regard to its principles of conflicts of
      law.

    

    Section
      21. Subordination.
      Once a
      demand for payment is made on the Guarantor under this Guaranty Guarantor will
      not (1) make any demand for payment of, or take any action to accelerate, any
      obligation owed to Guarantor by Borrower, (2) seek to collect payment of, or
      enforce any right or remedies against Borrower, any of the obligations owed
      to
      Guarantor by Borrower or any guarantees, credit supports, collateral or other
      security related to or supporting any of such obligations, or (3) commence,
      or
      join with any other creditor in commencing, any bankruptcy or similar proceeding
      against Borrower. Guarantor also agrees that the payment of all obligations
      of
      Borrower to Guarantor shall be subordinate and junior in time and right of
      payment in accordance with the terms of this Section to the prior payment in
      full (in cash) of the Guaranteed Obligations. In furtherance of such
      subordination, (1) to the extent possible, Guarantor will not take or receive
      from Borrower any payments, in cash or any other property, by setoff or any
      other means, of any or all of the obligations owed to Guarantor by Borrower,
      or
      purchase, redeem, or otherwise acquire any of such obligations, or change the
      terms or provisions of any such obligations and (2) if for any reason and under
      any circumstance Guarantor receives a payment on such obligation, whether in
      a
      bankruptcy or similar proceeding or otherwise, all such payments or
      distributions upon or with respect to such obligations shall be received in
      trust for the benefit of Lender, shall be segregated from other funds and
      property held by Guarantor and shall be forthwith paid over to Lender in the
      same form as so received (with any necessary endorsement) to be applied (in
      the
      case of cash) to, or held as collateral (in the case of securities or other
      non-cash property) for, the payment or prepayment of the Guaranteed Obligations.
      Guarantor agrees that any subrogation rights Guarantor may acquire as a result
      of a payment under this Section may not be exercised until (1) the payment
      in
      full of the Guaranteed Obligations (after Lender no longer has any obligation
      or
      arrangement to provide credit to Borrower, including under or pursuant to a
      line
      of credit), and (2) the payment of all fees and expenses to be paid by Guarantor
      pursuant to this Guaranty.

    

    Section
      22. Miscellaneous.
      This
      Guaranty is in addition to and not in limitation of any other rights and
      remedies Lender may have by virtue of any other instrument or agreement
      previously, contemporaneously or hereafter executed by Guarantor or any other
      party or by law or otherwise. If any provision of this Guaranty is contrary
      to
      applicable law, such provision shall be deemed ineffective without invalidating
      the remaining provisions of this Guaranty. Titles in this Guaranty are for
      convenience of reference only and shall not affect the interpretation or
      construction of this Guaranty. This Guaranty constitutes the entire agreement
      between Guarantor and Lender with respect to the matters covered by this
      Guaranty and supercedes all written or oral agreements with respect to such
      matters.

    

    Section
      23. WAIVER
      OF JURY TRIAL.
      GUARANTOR EXPRESSLY WAIVES ANY AND EVERY RIGHT TO A TRIAL BY JURY IN ANY ACTION
      ON OR RELATED TO THIS GUARANTY.

    

    IN
      WITNESS WHEREOF, Guarantor has duly executed and delivered this Guaranty as
      of
      the date of this Guaranty.

     

     

    
      	 	___________________________________
	 	
              Steven
                B. Rash

            

    

    

    
      
         

      

      
        8

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