EXHIBIT 4.3
NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.
ADDITIONAL INVESTMENT RIGHT
To Purchase $________ principal amount of Convertible Debentures of
POWER 3 MEDICAL PRODUCTS, INC.
THIS ADDITIONAL INVESTMENT RIGHT (the "AIR") certifies that, for value
received, _____________ (the "Holder"), is entitled, upon the terms and subject
to the limitations on exercise and the conditions hereinafter set forth, at any
time on or after the date hereof (the "Initial Exercise Date") and on or prior
to the close of business on the earlier of (a) 9 month anniversary of the
Effective Date and (b) the 18 month anniversary of the Initial Exercise Date
(the "Termination Date") but not thereafter, to subscribe for and purchase from
Power 3 Medical Products, Inc., a New York corporation (the "Company"), up to
$_____________ principal amount of convertible debentures (the "AIR Debenture").
The AIR Debenture shall be in the form of the Debentures issued pursuant to the
Purchase Agreement, mutatis mutandis, except that the conversion price thereof
shall be equal to $1.08, subject to adjustment thereunder and hereunder ("AIR
Conversion Price").
Section 1 . Definitions. Capitalized terms used and not otherwise defined
herein shall have the meanings set forth in that certain Securities Purchase
Agreement (the "Purchase Agreement"), dated October 28, 2004, among the Company
and the purchasers signatory thereto.
Section 2 . Exercise.
a) Exercise of AIR. Exercise of the purchase rights represented by
this AIR may be made at any time or times on or after the Initial Exercise
Date and on or before the Termination Date by delivery to the Company of a
duly executed facsimile copy of the Notice of Exercise Form annexed hereto
(or such other office or agency of the Company as it may designate by
notice in writing to the registered Holder at the address of such Holder
appearing on the books of the Company) and the payment of the aggregate
principal amount of the AIR Debentures thereby purchased by wire transfer
or cashier's check drawn on a United States bank. Upon exercise of the
AIR, the Company shall issue an AIR Debenture with a principal amount
equal to the amount paid by the Holder.
b) Mechanics of Exercise.
i. Authorization of AIR Debenture. The Company covenants that
during the period this AIR is outstanding, it will reserve from its
authorized and unissued Common Stock a sufficient number of shares
to provide for the issuance of all of the shares of Common Stock
underlying the AIR Debenture (the "AIR Debenture Shares"). The
Company further covenants that its issuance of this AIR shall
constitute full authority to its officers who are charged with the
duty of executing certificates to execute and issue the necessary
certificates for the AIR Debenture upon the exercise of the purchase
rights under, and in accordance with the terms of, this AIR and
Common Stock certificates upon conversion of the AIR Debentures. The
Company covenants that the AIR Debenture which may be issued upon
the exercise of the purchase rights represented by this AIR and the
AIR Debenture Shares issuable thereunder will, upon exercise of the
purchase rights represented by this AIR, be duly authorized, validly
issued, fully paid and nonassessable and free from all taxes, liens
and charges in respect of the issue thereof (other than taxes in
respect of any transfer occurring contemporaneously with such
issue). The Company will take all such reasonable action as may be
necessary to assure that the AIR Debenture and AIR Debenture Shares
may be issued as provided herein without violation of any applicable
law or regulation, or of any requirements of the Trading Market upon
which the Common Stock may be listed.
ii. Delivery of Certificates Upon Exercise. Certificates for
the AIR Debenture purchased hereunder shall be delivered to the
Holder within 3 Trading Days from the delivery to the Company of the
Notice of Exercise Form, surrender of this AIR and payment of the
principal amount as set forth above ("AIR Debenture Delivery Date").
This AIR shall be deemed to have been exercised on the date the
payment of the principal amount is received by the Company. The AIR
Debenture shall be deemed to have been issued, and Holder or any
other person so designated to be named therein shall be deemed to
have become a holder of record of such
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security for all purposes, as of the date the AIR has been exercised
by payment to the Company of the principal amount and all taxes
required to be paid by the Holder, if any, pursuant to Section
2(b)(v) prior to the issuance of such security, have been paid.
iii. Delivery of New AIRs Upon Exercise. If this AIR shall
have been exercised in part, the Company shall, at the time of
delivery of the certificate or certificates representing the AIR
Debenture, deliver to Holder a new AIR evidencing the rights of
Holder to purchase the remaining principal amount of the AIR
Debenture called for by this AIR, which new AIR shall in all other
respects be identical with this AIR.
iv. Rescission Rights. If the Company fails to deliver to the
Holder a certificate or certificates representing the AIR Debenture
pursuant to this Section 2(b)(iv) by the AIR Debenture Delivery
Date, then the Holder will have the right to rescind such exercise.
v. Charges, Taxes and Expenses. Issuance of certificates for
AIR Debentures shall be made without charge to the Holder for any
issue or transfer tax or other incidental expense in respect of the
issuance of such certificate, all of which taxes and expenses shall
be paid by the Company, and such certificates shall be issued in the
name of the Holder or in such name or names as may be directed by
the Holder; provided, however, that in the event certificates for
AIR Debentures are to be issued in a name other than the name of the
Holder, this AIR when surrendered for exercise shall be accompanied
by the Assignment Form attached hereto duly executed by the Holder;
and the Company may require, as a condition thereto, the payment of
a sum sufficient to reimburse it for any transfer tax incidental
thereto.
vi. Closing of Books. The Company will not close its records
in any manner which prevents the timely exercise of this AIR,
pursuant to the terms hereof or the conversion of the AIR Debentures
pursuant to the terms thereof.
Section 3 . Certain Adjustments.
a) Stock Dividends and Splits. If the Company, at any time while
this AIR is outstanding: (A) pays a stock dividend or otherwise make a
distribution or distributions on shares of its Common Stock or any other
equity or equity equivalent securities payable in shares of Common Stock
(which, for avoidance of doubt, shall not include any shares of Common
Stock issued by the Company pursuant to the AIR Debentures, the Debentures
or the Warrants), (B) subdivides outstanding shares of Common Stock into a
larger number of shares, (C) combines (including by way of reverse stock
split) outstanding shares of Common Stock into a smaller number of shares,
or (D) issues by reclassification of shares of the Common Stock any shares
of capital stock of the Company, then in each
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case the AIR Conversion Price shall be multiplied by a fraction of which
the numerator shall be the number of shares of Common Stock (excluding
treasury shares, if any) outstanding before such event and of which the
denominator shall be the number of shares of Common Stock outstanding
after such event. Any adjustment made pursuant to this Section 3(a) shall
become effective immediately after the record date for the determination
of stockholders entitled to receive such dividend or distribution and
shall become effective immediately after the effective date in the case of
a subdivision, combination or re-classification.
b) Subsequent Equity Sales. If the Company or any Subsidiary
thereof, as applicable, at any time while this AIR is outstanding, shall
offer, sell, grant any option to purchase or offer, sell or grant any
right to reprice its securities, or otherwise dispose of or issue (or
announce any offer, sale, grant or any option to purchase or other
disposition) any Common Stock or Common Stock Equivalents entitling any
Person to acquire shares of Common Stock, at an effective price per share
less than the then AIR Conversion Price (such lower price, the "Base Share
Price" and such issuances collectively, a "Dilutive Issuance"), as
adjusted hereunder (if the holder of the Common Stock or Common Stock
Equivalents so issued shall at any time, whether by operation of purchase
price adjustments, reset provisions, floating conversion, exercise or
exchange prices or otherwise, or due to warrants, options or rights per
share which is issued in connection with such issuance, be entitled to
receive shares of Common Stock at an effective price per share which is
less than the AIR Conversion Price, such issuance shall be deemed to have
occurred for less than the AIR Conversion Price), then, the AIR Conversion
Price shall be reduced to equal the Base Share Price. Such adjustment
shall be made whenever such Common Stock or Common Stock Equivalents are
issued. The Company shall notify the Holder in writing, no later than the
business day following the issuance of any Common Stock or Common Stock
Equivalents subject to this section, indicating therein the applicable
issuance price, or of applicable reset price, exchange price, conversion
price and other pricing terms.
c) Pro Rata Distributions. If the Company, at any time while this
AIR is outstanding, distributes to all holders of Common Stock (and not to
Holders) evidences of its indebtedness or assets or rights or warrants to
subscribe for or purchase any security other than the Common Stock (which
shall be subject to Section 3(b)), then in each such case the AIR
Conversion Price shall be determined by multiplying such AIR Conversion
Price in effect immediately prior to the record date fixed for
determination of stockholders entitled to receive such distribution by a
fraction of which the denominator shall be the Closing Price determined as
of the record date mentioned above, and of which the numerator shall be
such Closing Price on such record date less the then fair market value at
such record date of the portion of such assets or evidence of indebtedness
so distributed applicable to one outstanding share of the Common Stock as
determined by the Board of Directors in good faith. In either case the
adjustments shall be described in a statement provided to the Holder of
the portion of assets or evidences of indebtedness so distributed or such
subscription rights applicable to
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one share of Common Stock. Such adjustment shall be made whenever any such
distribution is made and shall become effective immediately after the
record date mentioned above.
d) Calculations. All calculations and adjustments to the AIR
Conversion Price under this Section 3 shall be made to the nearest cent or
the nearest 1/100th of a share, as the case may be. For purposes of this
Section 3, the number of shares of Common Stock outstanding as of a given
date shall be the sum of the number of shares of Common Stock (excluding
treasury shares, if any) outstanding.
e) Notice to Holders.
i. Adjustment to AIR Conversion Price. Whenever the AIR
Conversion Price is adjusted pursuant to this Section 3, the Company
shall promptly mail to each Holder a notice setting forth the AIR
Conversion Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment.
ii. Notice to Allow Exercise by ▇▇▇▇▇▇. If (A) the Company
shall declare a dividend (or any other distribution) on the Common
Stock; (B) the Company shall declare a special nonrecurring cash
dividend on or a redemption of the Common Stock; (C) the Company
shall authorize the granting to all holders of the Common Stock
rights or warrants to subscribe for or purchase any shares of
capital stock of any class or of any rights; (D) the approval of any
stockholders of the Company shall be required in connection with any
reclassification of the Common Stock, any consolidation or merger to
which the Company is a party, any sale or transfer of all or
substantially all of the assets of the Company, of any compulsory
share exchange whereby the Common Stock is converted into other
securities, cash or property; (E) the Company shall authorize the
voluntary or involuntary dissolution, liquidation or winding up of
the affairs of the Company; then, in each case, the Company shall
cause to be mailed to the Holder at its last addresses as it shall
appear upon the AIR Register of the Company, at least 20 calendar
days prior to the applicable record or effective date hereinafter
specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution, redemption,
rights or warrants, or if a record is not to be taken, the date as
of which the holders of the Common Stock of record to be entitled to
such dividend, distributions, redemption, rights or warrants are to
be determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer or share exchange is expected
to become effective or close, and the date as of which it is
expected that holders of the Common Stock of record shall be
entitled to exchange their shares of the Common Stock for
securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer or share
exchange; provided, that the failure to mail such notice or any
5
defect therein or in the mailing thereof shall not affect the
validity of the corporate action required to be specified in such
notice. The Holder is entitled to exercise this AIR during the
20-day period commencing the date of such notice to the effective
date of the event triggering such notice.
f) Fundamental Transaction. If, at any time while this AIR is
outstanding, (A) the Company effects any merger or consolidation of the
Company with or into another Person, (B) the Company effects any sale of
all or substantially all of its assets in one or a series of related
transactions, (C) any tender offer or exchange offer (whether by the
Company or another Person) is completed pursuant to which holders of
Common Stock are permitted to tender or exchange their shares for other
securities, cash or property, or (D) the Company effects any
reclassification of the Common Stock or any compulsory share exchange
pursuant to which the Common Stock is effectively converted into or
exchanged for other securities, cash or property (in any such case, a
"Fundamental Transaction"), then, upon any subsequent exercise of this AIR
the Holder shall have the right to receive upon conversion of the AIR
Debenture, for each AIR Debenture Share that would have been issuable upon
such exercise and then subsequent conversion absent such Fundamental
Transaction shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and
Alternate Consideration receivable upon or as a result of such
reorganization, reclassification, merger, consolidation or disposition of
assets by a Holder of the number of shares of Common Stock for which the
underlying AIR Debentures are convertible immediately prior to such event
(the "Alternate Consideration"). For purposes of any such deemed
conversion, the determination of the AIR Conversion Price shall be
appropriately adjusted to apply to such Alternate Consideration based on
the amount of Alternate Consideration issuable in respect of one share of
Common Stock in such Fundamental Transaction, and the Company shall
apportion the AIR Conversion Price among the Alternate Consideration in a
reasonable manner reflecting the relative value of any different
components of the Alternate Consideration. If holders of Common Stock are
given any choice as to the securities, cash or property to be received in
a Fundamental Transaction, then the Holder shall be given the same choice
as to the Alternate Consideration it receives upon any conversion of the
AIR Debenture underlying this AIR following such Fundamental Transaction.
To the extent necessary to effectuate the foregoing provisions, any
successor to the Company or surviving entity in such Fundamental
Transaction shall issue to the Holder a new additional investment right
consistent with the foregoing provisions and evidencing the Holder's right
to exercise such additional investment right ultimately into Alternate
Consideration. The terms of any agreement pursuant to which a Fundamental
Transaction is effected shall include terms requiring any such successor
or surviving entity to comply with the provisions of this paragraph (f)
and insuring that this AIR (or any such replacement security) will be
similarly adjusted upon any subsequent transaction analogous to a
Fundamental Transaction.
6
g) Exempt Issuance. Notwithstanding the foregoing, no adjustments,
Alternate Consideration nor notices shall be made, paid or issued under
this Section 3 in respect of an Exempt Issuance.
h) Voluntary Adjustment By Company. The Company may at any time
during the term of this AIR reduce the then current AIR Conversion Price
to any amount and for any period of time deemed appropriate by the Board
of Directors of the Company.
Section 4. Transfer of AIR.
a) Transferability. Subject to compliance with any applicable
securities laws and the conditions set forth in Sections 5(a) and 4(d)
hereof and to the provisions of Section 4.1 of the Purchase Agreement,
this AIR and all rights hereunder are transferable, in whole or in part,
upon surrender of this AIR at the principal office of the Company,
together with a written assignment of this AIR substantially in the form
attached hereto duly executed by the Holder or its agent or attorney and
funds sufficient to pay any transfer taxes payable upon the making of such
transfer. Upon such surrender and, if required, such payment, the Company
shall execute and deliver a new AIR or AIRs in the name of the assignee or
assignees and in the denomination or denominations specified in such
instrument of assignment, and shall issue to the assignor a new AIR
evidencing the portion of this AIR not so assigned, and this AIR shall
promptly be cancelled. An AIR, if properly assigned, may be exercised by a
new holder for the purchase of AIR Debentures without having a new AIR
issued.
b) New AIRs. This AIR may be divided or combined with other AIRs
upon presentation hereof at the aforesaid office of the Company, together
with a written notice specifying the names and denominations in which new
AIRs are to be issued, signed by the Holder or its agent or attorney.
Subject to compliance with Section 4(a), as to any transfer which may be
involved in such division or combination, the Company shall execute and
deliver a new AIR or AIRs in exchange for the AIR or AIRs to be divided or
combined in accordance with such notice.
c) AIR Register. The Company shall register this AIR, upon records
to be maintained by the Company for that purpose (the "AIR Register"), in
the name of the record Holder hereof from time to time. The Company may
deem and treat the registered Holder of this AIR as the absolute owner
hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the contrary.
d) Transfer Restrictions. If, at the time of the surrender of this
AIR in connection with any transfer of this AIR, the transfer of this AIR
shall not be registered pursuant to an effective registration statement
under the Securities Act and under applicable state securities or blue sky
laws, the Company may require, as a condition of allowing such transfer
(i) that the Holder or transferee of this
7
AIR, as the case may be, furnish to the Company a written opinion of
counsel (which opinion shall be in form, substance and scope customary for
opinions of counsel in comparable transactions) to the effect that such
transfer may be made without registration under the Securities Act and
under applicable state securities or blue sky laws, (ii) that the holder
or transferee execute and deliver to the Company an investment letter in
form and substance acceptable to the Company and (iii) that the transferee
be an "accredited investor" as defined in Rule 501(a)(1), (a)(2), (a)(3),
(a)(7), or (a)(8) promulgated under the Securities Act or a qualified
institutional buyer as defined in Rule 144A(a) under the Securities Act.
Section 5. Miscellaneous.
a) Title to the Additional Investment Right. Prior to the
Termination Date and subject to compliance with applicable laws and
Section 4 of this AIR, this AIR and all rights hereunder are transferable,
in whole or in part, at the office or agency of the Company by the Holder
in person or by duly authorized attorney, upon surrender of this AIR
together with the Assignment Form annexed hereto properly endorsed. The
transferee shall sign an investment letter in form and substance
reasonably satisfactory to the Company.
b) No Rights as Creditor/Debentureholder or Shareholder Until
Exercise. This AIR does not entitle the Holder to any rights as a creditor
of the Company pursuant to the AIR Debenture prior to the exercise hereof
nor does this AIR entitle the Holder to any voting rights or other rights
as a shareholder of the Company prior to any conversion of the AIR
Debenture. Upon the surrender of this AIR and the payment of the aggregate
principal amount, the AIR Debentures so purchased shall be and be deemed
to be issued to such Holder as the record owner of such AIR Debentures as
of the close of business on the later of the date of such surrender or
payment.
c) Loss, Theft, Destruction or Mutilation of AIR. The Company
covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this
AIR or any certificate relating to the AIR Debentures, and in case of
loss, theft or destruction, of indemnity or security reasonably
satisfactory to it (which, in the case of the AIR, shall not include the
posting of any bond), and upon surrender and cancellation of such AIR or
certificate, if mutilated, the Company will make and deliver a new AIR or
certificate of like tenor and dated as of such cancellation, in lieu of
such AIR or certificate.
d) Saturdays, Sundays, Holidays, etc. If the last or appointed day
for the taking of any action or the expiration of any right required or
granted herein shall be a Saturday, Sunday or a legal holiday, then such
action may be taken or such right may be exercised on the next succeeding
day not a Saturday, Sunday or legal holiday.
8
e) Authorized Shares.
The Company covenants that during the period the AIR is
outstanding, it will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of
the shares of Common Stock issuable upon conversion of the AIR
Debenture. The Company further covenants that its issuance of this
AIR shall constitute full authority to its officers who are charged
with the duty of executing certificates to execute and issue the
necessary certificates for the AIR Debentures upon the exercise of
the purchase rights under, and in accordance with the terms of, this
AIR. The Company will take all such reasonable action as may be
necessary to assure that such AIR Debentures and AIR Debenture
Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the Trading
Market upon which the Common Stock may be listed.
Except and to the extent as waived or consented to by the
Holder, the Company shall not by any action, including, without
limitation, amending its certificate of incorporation 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 of this AIR or the AIR Debentures, but will at all
times in good faith assist in the carrying out of all such terms and
in the taking of all such actions as may be necessary or appropriate
to protect the rights of Holder as set forth in this AIR and the AIR
Debenture against impairment. Without limiting the generality of the
foregoing, the Company will (a) take all such action as may be
necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable AIR Debentures upon the
exercise of this AIR and AIR Debenture Shares upon conversion of the
AIR Debentures, and (b) use commercially reasonable efforts to
obtain all such authorizations, exemptions or consents from any
public regulatory body having jurisdiction thereof as may be
necessary to enable the Company to perform its obligations under
this AIR and the AIR Debentures.
Before taking any action which would result in an adjustment
in the AIR Debentures for which this AIR is exercisable or in the
AIR Conversion Price, the Company shall obtain all such
authorizations or exemptions thereof, or consents thereto, as may be
necessary from any public regulatory body or bodies having
jurisdiction thereof.
f) Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of this AIR shall be governed by
and construed and enforced in accordance with the internal laws of the
State of New York, without regard to the principles of conflicts of law
thereof. Each party agrees that all legal proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated
by this AIR (whether brought against a
9
party hereto or its respective affiliates, directors, officers,
shareholders, employees or agents) shall be commenced exclusively in the
state and federal courts sitting in the City of New York. Each party
hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in the City of New York, borough of Manhattan for
the adjudication of any dispute hereunder or in connection herewith or
with any transaction contemplated hereby or discussed herein, and hereby
irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is
improper or inconvenient venue for such proceeding. Each party hereby
irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy
thereof via registered or certified mail or overnight delivery (with
evidence of delivery) to such party at the address in effect for notices
to it under this AIR and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in
any manner permitted by law. The parties hereby waive, to the fullest
extent permitted by applicable law, all rights to a trial by jury. If
either party shall commence an action or proceeding to enforce any
provisions of this AIR, then the prevailing party in such action or
proceeding shall be reimbursed by the other party for its attorneys' fees
and other costs and expenses incurred with the investigation, preparation
and prosecution of such action or proceeding.
g) Restrictions. The Holder acknowledges that the AIR Debentures
acquired upon the exercise of this AIR, if not registered, will have
restrictions upon resale imposed by state and federal securities laws.
h) Nonwaiver and Expenses. No course of dealing or any delay or
failure to exercise any right hereunder on the part of Holder shall
operate as a waiver of such right or otherwise prejudice ▇▇▇▇▇▇'s rights,
powers or remedies, notwithstanding the fact that all rights hereunder
terminate on the Termination Date. If the Company willfully and knowingly
fails to comply with any provision of this AIR, which results in any
material damages to the Holder, the Company shall pay to Holder such
amounts as shall be sufficient to cover any costs and expenses including,
but not limited to, reasonable attorneys' fees, including those of
appellate proceedings, incurred by Holder in collecting any amounts due
pursuant hereto or in otherwise enforcing any of its rights, powers or
remedies hereunder.
i) Notices. Any notice, request or other document required or
permitted to be given or delivered to the Holder by the Company shall be
delivered in accordance with the notice provisions of the Purchase
Agreement.
j) Limitation of Liability. No provision hereof, in the absence of
any affirmative action by Holder to exercise this AIR or purchase AIR
Debentures, and no enumeration herein of the rights or privileges of
Holder, shall give rise to any liability of Holder for the purchase price
of any AIR Debenture or any AIR
10
Debenture Shares or as a stockholder of the Company, whether such
liability is asserted by the Company or by creditors of the Company.
k) Remedies. Holder, in addition to being entitled to exercise all
rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this AIR. The Company agrees that
monetary damages would not be adequate compensation for any loss incurred
by reason of a breach by it of the provisions of this AIR and hereby
agrees to waive the defense in any action for specific performance that a
remedy at law would be adequate.
l) Successors and Assigns. Subject to applicable securities laws,
this AIR and the rights and obligations evidenced hereby shall inure to
the benefit of and be binding upon the successors of the Company and the
successors and permitted assigns of Holder. The provisions of this AIR are
intended to be for the benefit of all Holders from time to time of this
AIR and shall be enforceable by any such Holder or holder of AIR
Debentures.
m) Amendment. This AIR may be modified or amended or the provisions
hereof waived with the written consent of the Company and the Holder.
n) Severability. Wherever possible, each provision of this AIR shall
be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this AIR shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the
remainder of such provisions or the remaining provisions of this AIR.
o) Headings. The headings used in this AIR are for the convenience
of reference only and shall not, for any purpose, be deemed a part of this
AIR.
********************
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IN WITNESS WHEREOF, the Company has caused this AIR to be executed by its
officer thereunto duly authorized.
Dated: October __, 2004
POWER 3 MEDICAL PRODUCTS, INC.
By: ____________________________
Name:
Title:
12
NOTICE OF EXERCISE
TO: POWER 3 MEDICAL PRODUCTS, INC.
(1) The undersigned hereby elects to purchase $________ principal
amount of AIR Debentures of Power 3 Medical Products, Inc. pursuant to the terms
of the attached AIR and tenders herewith payment of the principal in full,
together with all applicable transfer taxes, if any.
(2) Payment shall take the form of (check applicable box) in lawful
money of the United States; or
(3) Please issue a certificate or certificates representing said AIR
Debentures in the name of the undersigned or in such other name as is specified
below:
______________________________
The AIR Debentures shall be delivered to the following:
______________________________
______________________________
______________________________
(4) Accredited Investor. The undersigned is an "accredited investor"
as defined in Regulation D promulgated under the Securities Act of 1933, as
amended.
[SIGNATURE OF HOLDER]
Name of Investing Entity: ______________________________________________________
Signature of Authorized Signatory of Investing Entity: _________________________
Name of Authorized Signatory: __________________________________________________
Title of Authorized Signatory: _________________________________________________
Date: __________________________________________________________________________
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, the foregoing AIR and all rights evidenced thereby are
hereby assigned to
_______________________________________________ whose address is
____________________________________________________________________.
____________________________________________________________________
Dated: ______________, _______
Holder's Signature: ________________________________
Holder's Address: ________________________________
________________________________
Signature Guaranteed: ___________________________________________
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the AIR, without alteration or enlargement or any change
whatsoever, and must be guaranteed by a bank or trust company. Officers of
corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing AIR.
SCHEDULE TO
FORM OF ADDITIONAL INVESTMENT RIGHT
The Company has issued Additional Investment Rights to the following
listed holders. The terms of the Additional Investment Rights issued by the
Company to each of the following holders are identical except for the name of
the holder and the principal amount of convertible debentures to be purchased
upon exercise of the Additional Investment Rights.
PRINCIPAL AMOUNT OF
HOLDER CONVERTIBLE DEBENTURES
------ ----------------------
Cityplatz Limited $125,000
Crescent International Ltd. $500,000
Crestview Capital Master, LLC $375,000
DKR SoundShore Oasis Holding Fund Ltd. $125,000
Gryphon Master Fund L.P. $250,000
GSSF Master Fund, LP $250,000
Mohawk Funding $25,000
Omicron Master Trust $250,000
Otape Investments LLC $250,000
Platinum Partners Value Arbitrage Fund L.P. $208,333
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ $75,000
Sage Capital Investments Limited $62,500
Bach Farms LLC $4,167