8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 5, 2005

Power3 Medical Products, Inc.

(Exact name of registrant as specified in its charter)

New York	0-24921	65-0565144
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

3400 Research Forest Drive, Suite B2-3
The Woodlands, Texas  77381

(Address of principal executive offices and zip code)

(281) 466-1600

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01Entry into a Material Definitive Agreement

On September 6, 2005, the Company executed a promissory note in the principal amount of $80,000 payable to Dr. Ira L. Goldknopf (the “Payee”).  Under the terms of the note, the principal amount of eighty thousand dollars ($80,000), (the “Principal”) shall be due and payable on or before March 6, 2006 (the “Maturity Date”).  Should the Principal not be repaid as of March 6, 2006, interest of 6 % per year on any unpaid Principal amount will be earned by the Payee until such time as all of the Principal amount is repaid.  This Note may be repaid at any time prior to March 6, 2006, without interest or penalty.

On September 5, 2005, the Company executed a promissory note in the principal amount of $200,000 payable to Cordillera Fund L.P. (the “Holder”).  Pursuant to the promissory note, the Company promised to pay to the Holder $200,000 in cash within one business day of the closing of the Company’s sale of $1,600,000 in debentures pursuant to the Securities Purchase Agreement dated October 28, 2004, as amended.  If that closing, which is to occur within five trading days of the effectiveness of the Company’s pending registration statement on Form SB-2 (Registration No. 333-122227), does not occur on or before October 31, 2005, the entire unpaid principal balance will be due on October 31, 2005.   Interest, computed on the unpaid balance of the Note, shall be due and payable at Payee’s option, as follows: (A) the accrued and unpaid simple interest calculated at ten (10%) per cent per annum until and up to an event of default, as defined in the Note; or after an event of default, at a rate of twelve (12%) per cent per annum until the Note is paid in full; or (B) the accrued and unpaid interest payable on this Note shall be considered paid, in full, upon Maker’s issuance and delivery of restricted shares of Maker’s common stock at $0.00 cost basis per share to Payee, such issuance and delivery to occur on or before the earlier of the 95^th day or 2 days following the effectiveness of the registration statement, subject to the provisions of the Securities Purchase Agreement.   Upon an event of default, as defined in the Note, and until such event of default has been cured, the holder of this Note may, at its option, without further notice or demand, (i) declare the outstanding principal balance of this Note, and accrued, but unpaid interest payable on this Note in cash at the rate provided, at once due and payable; (ii) declare the outstanding principal balance of this Note, and accrued but unpaid interest payable on this Note in Maker’s unrestricted common stock at $0.00 cost basis per share at once due and payable at a rate calculated as 166,000 X 5%=Number of Late Penalty Shares to be issued to Payee per 30 calendar day period past the event of default, where the minimum pro-rata period is determined by the closest calendar 15-day anniversary past such that principal, interest and penalty shares are delivered to Payee in full; (iii) pursue any and all rights, remedies and recourses available to the holder hereof; or (iv) pursue any combination of the foregoing.

Amendment to June 17, 2005 Note

On June 17, 2005, Power3 Medical Products, Inc. (the “Company”) executed a promissory note in the principal amount of $ 396,500 payable to John Fife (the “Holder”).  Pursuant to the promissory note, the Company promised to pay to the Holder $ 396,500 in cash upon the earlier of (i) the Maturity Date of August 11, 2005; or (ii) the fifth day following the effective date of the Company’s registration statement on Form SB-2.  The Company has the right to prepay all or part of any outstanding amounts under the promissory note without penalty at any time prior to the maturity date.  The promissory note provides for interest at an annual rate of 18% per annum, beginning on the Maturity Date or from the day such interest is due as specified above.   The note is secured by a Stock Pledge Agreement, entered into on June 17, 2005, by Steven B. Rash, Chairman and CEO of Power3 Medical Products, Inc. (the “Pledgor”), wherein the Pledgor has agreed to pledge 6,000,000 shares of common stock as security for (i) the performance of the Company of its obligations under its Series 2005 Note described above and (ii) the performance by Pledgor of its Guaranty delivered to the Secured Party of even date herewith.   If on any monthly anniversary during the term of the Note, the market value of the Collateral then held by the escrow agent, does not equal or exceed 300% of the principal amount of the note, then the Pledgor shall deliver to escrow, within 3 days of such date, a certificate for additional shares and the necessary stock powers equal to not less than 300% of the principal amount of the Note.  The Pledgor shall deliver same and a statement setting forth the necessary amount of Collateral, not later than the first business day following such anniversary.

2

On September 6, 2005, the parties to the above promissory note agreed to amend the original note, thereby changing the amount to be repaid, by Power3, to John Fife to $446,500 and changing the due date of the note to be October 31, 2005.   All other provisions of the note remain in effect, as originally stated in the Note Payable.

Amendment to April 5, 2005 Note

On April 5, 2005, Power3 Medical Products, Inc. executed a promissory note in the principal amount of $251,000 payable to Cordillera Fund L.P. (the “Holder”).  As part of the Note executed on September 5, 2005, a new Promissory Note in the principal amount of $200,000 referenced above, certain items in the Note executed on April 5, 2005 were amended as follows: (i) the date August 15^th as used in Section 1. (i) in the April 5, 2005 Note is replaced by November 15, 2005; (ii) Section 1.(ii) B in the April 5, 2005 Note is replaced by the following language: the accrued and unpaid interest payable on this Note shall be considered paid, in full, upon Maker’s issuance of common stock at $0.00 cost basis per share to Payee, such issuance and delivery to occur on the earlier of the 95^th day or 2 days following the effectiveness of the registration statement, subject to the provisions of the Securities Purchase Agreement; and (iii) the number 166,000 in Section 3 of the April 5^th Note is replaced with 209,166 with the same intended use in provisions added herein to Section 3 of the April 5, 2005 Note.

Item 2.03Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

On September 6, 2005, the Company became obligated on a promissory note in the amended principal amount of $ 446,500.   Please refer to “Item 1.01-Amendment to a Material Definitive Agreement” above for further information.

On September 6. 2005, the Company became obligated on a promissory note in the principal amount of $80,000.  Please refer to “Item 1.01-Entry Into a Material Definitive Agreement” above for further information.

On September 5, 2005, the Company became obligated on a promissory note in the principal amount of $200,000.   Please refer to “Item 1.01-Entry Into a Material Definitive Agreement” above for further information.

Item 9.01Financial Statements and Exhibits

( c )Exhibits

Exhibit Number	Description
Exhibit 10.1*	Amended Promissory Note, date of original issue, June 13, 2005, executed June 17, 2005, and amended September 2, 2005, between the Company and John Fife for the sum of $446,500.
Exhibit 10.2*	Promissory Note dated September 6, 2005, executed September 6, 2005, by Steven B. Rash, Chairman and CEO of Power3 Medical Products, Inc.
Exhibit 10.3*	Promissory Note dated September 2, 2005, executed September 2, 2005, by Steven B. Rash, Chairman and CEO of Power3 Medical Products, Inc.

* Filed herewith

3

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Power3 Medical Products, Inc.
	By:	/s/ Steven B. Rash
		Steven B. Rash
		Chairman and CEO
Date: September 9, 2005

4

EX-10.1

Exhibit 10.1

THIS NOTE HAS NOT 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.

No. A1	U.S. $446,500.00		Date:	, 2005
Holder:	John Fife
			Date of Original Issue:
			June 13, 2005
Address:		303 Wacker Drive
		Suite 301
		Chicago, IL 60601
		AMENDED AND RESTATED  SERIES 2005 SECURED NOTE DUEOCTOBER 31, 2005

THIS Amended and Restated Note is one of a duly authorized issue of Notes of POWER 3 MEDICAL PRODUCTS, INC., a New York corporation, having a principal place of business at 3400 Research Forest Drive, The Woodlands, Texas 77381  (the “Company”), designated  as  its    Note  (the “Note”),  due upon the earlier of (i)October 31, 2005; or (ii) on the fifth day following the effective date of the Company’s registration statement on Form SB-2 (File no. 333-121845)  (“Maturity Date”), in an aggregate face amount of up Four Hundred and Forty Six Thousand Five Hundred and 00/100 Dollars ($446,500.00).

FOR VALUE RECEIVED, the Company promises to pay to the Holder or registered assigns, the principal sum of Four Hundred and Forty Six Thousand Five Hundred and 00/100 Dollars ($446,500.00) on the Maturity Date.  Upon default, all  amounts due hereunder shall bear interest at the rate of 18% per annum from the day such interest is due hereunder through and including the date of payment.  The principal of, and interest on, this Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts, at the address of the Holder last appearing on the Note Register.

This Note is subject to the following additional provisions:

Section 1.      The Notes are exchangeable for an equal aggregate principal amount of Notes of

different authorized denominations, as requested by the Holder surrendering the same but shall not be issuable in denominations of less than integral multiples of Twenty Thousand Dollars ($20,000) unless such amount represents the full principal balance of Notes outstanding to such Holder.  No service charge will be made for such registration of transfer or exchange.

Section 2.

(a)           The Holder, by acceptance hereof, agrees to give written notice to the Company before transferring this Note; such notice will describe briefly the proposed transfer and will give the Company the name, address, and tax identification number of the proposed transferee, and will further provide the Company with an opinion of the Holder’s counsel that such transfer can be accomplished in accordance with federal and applicable state securities laws (unless such transaction is permitted by the plan of distribution in an effective Registration Statement).  Promptly upon receiving such written notice, the Company shall present copies thereof to the Company’s counsel.

(i)            If in the opinion of such counsel the proposed transfer may be effected without registration or qualification (under any federal or state securities laws), the Company, as promptly as practicable, shall notify the Holder of such opinion, whereupon the Holder shall be entitled to transfer this Note or to dispose of Underlying Shares received upon the previous conversion of this Note, all in accordance with the terms of the notice delivered by the Holder to the Company; provided that an appropriate legend may be endorsed on this Note respecting restrictions upon transfer thereof necessary or advisable in the opinion of counsel and satisfactory to the Company to prevent further transfers which would be in violation of Section 5 of the Securities Act and applicable state securities laws; and provided further that the prospective transferee or purchaser shall execute such documents and make such representations, warranties, and agreements as may be required solely to comply with the exemptions relied upon by the Company for the transfer or disposition of the Note.

(ii)           If in the opinion of the counsel referred to in this Section 2, the proposed transfer or disposition of this Note described in the written notice given pursuant to this Section 2 may not be effected without registration or qualification of this Note, the Company shall promptly give written notice thereof to the Holder, and the Holder will limit its activities in respect to such as, in the opinion of such counsel, are permitted by law.

(b)           Prior to transfer of this Note in compliance with this Section 2, the Company and any agent of the Company may treat the person in whose name this Note is duly registered on the Note Register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the

Company nor any such agent shall be affected by notice to the contrary.

Section 3.               Events of Default.

“Event of Default” wherever used herein, means any one of the following events (whatever the reason and whether it shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body):

(i)            any default in the payment of the principal of, interest on, or other obligations in respect of, this Note, free of any claim of subordination, as and when the same shall become due and payable, (whether on the Maturity Date or by acceleration or otherwise);

(ii)           the Company or any Pledgor  shall fail to observe or perform any other covenant, agreement or warranty contained in, or otherwise commit any breach of, this Note or the Stock Pledge Agreement, including but not limited to the obligation of the Pledgor to issue additional Collateral , and such failure or breach shall not have been remedied within 10 days after the date on which notice of such failure or breach shall have been given;

(iii)          the Company shall commence a voluntary case under the United States Bankruptcy Code or insolvency laws as now or hereafter in effect or any successor thereto (the “Bankruptcy Code”); or an involuntary case is commenced against the Company under the Bankruptcy Code and the petition is not controverted within 30 days, or is not dismissed within 60 days, after commencement of such involuntary case; or a “custodian” (as defined in the Bankruptcy Code) is appointed for, or takes charge of, all or any substantial part of the property of the Company or the Company commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to the Company or there is commenced against the Company any such proceeding which remains undismissed for a period of 60 days; or the Company is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding is entered; or the Company suffers any appointment of any custodian or the like for it or any substantial part of its property which continues undischarged or unstayed for a period of 60 days; or the Company makes a general assignment for the benefit of creditors; or the Company shall fail to pay, or shall state that it is unable to pay its debts generally as they become due;r the Company shall call a meeting of all of its creditors with a view to arranging a composition or adjustment of its debts; or the Company shall by any act or failure to act indicate its consent to, approval of or acquiescence in any of the foregoing; or any corporate or other action is taken by the Company for the purpose of effecting any of the

foregoing;

(iv)          the Company shall default in any of its obligations under any mortgage, credit agreement or other facility, indenture, agreement or other instrument under which there may be issued, or by which there may be secured or evidenced any indebtedness of the Company in an amount exceeding twenty thousand dollars ($20,000), whether such indebtedness now exists or shall hereafter be created and such default shall result in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable;

(v)           the Company shall be a party to any Change of Control Transaction (as defined in Section 6), shall agree to sell or dispose of all or in excess of 49% of its assets (based on book value calculation as reflected in the Company’s most recent financial statements) in one or more transactions (whether or not such sale would constitute a Change of Control Transaction).

Section 4.               Interest Rate Limitation. The parties intend to conform strictly to the applicable usury laws in effect from time to time during the term of the Loan. Accordingly, if any transaction contemplated hereby would be usurious under such laws, then notwithstanding any other provision hereof: (i) the aggregate of all interest that is contracted for, charged, or received under this Agreement or under any other Loan Document shall not exceed the maximum amount of interest allowed by applicable law (the “Highest Lawful Rate”), and any excess shall be promptly credited to Borrower by Lender (or, to the extent that such consideration shall have been paid, such excess shall be promptly refunded to Borrower by Lender); (ii) neither Borrower nor any other Person now or hereafter liable hereunder shall be obligated to pay the amount of such interest to the extent that it is in excess of the Highest Lawful Rate; and (iii) the effective rate of interest shall be reduced to the Highest Lawful Rate. All sums paid, or agreed to be paid, to Lender for the use, forbearance, and detention of the debt of Borrower to Lender shall, to the extent permitted by applicable law, be allocated throughout the full term of the Note until payment is made in full so that the actual rate of interest does not exceed the Highest Lawful Rate in effect at any particular time during the full term thereof. If at any time the rate of interest under the Note exceeds the Highest Lawful Rate, the rate of interest to accrue pursuant to this Agreement shall be limited, notwithstanding anything to the contrary in this Agreement, to the Highest Lawful Rate, but any subsequent reductions in the Base Rate shall not reduce the interest to accrue pursuant to this Agreement below the Highest Lawful Rate until the total amount of interest accrued equals the amount of interest that would have accrued if a varying rate per annum equal to the interest rate under the Note had at all times been in effect. If the total amount of interest paid or accrued pursuant to this Agreement under the foregoing provisions is less than the total amount of interest that would have accrued if a varying rate per annum equal to the interest rate under the Note had been in effect, then Borrower agrees to pay

to Lender an amount equal to the difference between (x) the lesser of (A) the amount of interest that would have accrued if the Highest Lawful Rate had at all times been in effect, or (B) the amount of interest that would have accrued if a varying rate per annum equal to the interest rate under the Note had at all times been in effect, and (y) the amount of interest accrued in accordance with the other provisions of this Agreement.

Section 5.               Prepayment.

(a)           The Company shall have the right to prepay this Note in whole or in part thereon prior to the Maturity Date.

(b)           (i)            The Company shall give at least five (5)  business days, but not more than ten (10) business days, written notice of any intention to prepay this Note prior to the Maturity Date to the Holder which notice shall specify the “Prepayment Date”.

Section 6.               Definitions.  For the purposes hereof, the following terms shall have the following meanings:

“Business Day” means any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the State of New York are authorized or required by law or other government action to close.

“Change of Control Transaction” means the occurrence of any of (i) an acquisition after the date hereof by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of in excess of 49% of the voting securities of the Company coupled with a replacement of more than one-half of the members of the Company’s board of directors which is not approved by those individuals who are members of the board of directors on the date hereof in one or a series of related transactions, or (ii) the merger of the Company with or into another entity, consolidation or sale of all or substantially all of the assets of the Company in one or a series of related transactions, unless following such transaction, the holders of the Company’s securities continue to hold at least 40% of such securities following such transaction.  The execution by the Company of an agreement to which the Company is a party or by which it is bound providing for any of the events set forth above in (i) or (ii) does not constitute the occurrence of the event until after the event in fact occurs.

Section 7.               Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, interest and liquidated damages (if any) on, this Note at the time, place, and rate, and in the coin or currency, herein prescribed.  This Note is a direct obligation of the Company.

Section 8.               If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed but only upon receipt of evidence of such loss, theft or destruction of such Note, and of the ownership hereof, and indemnity, if requested, all reasonably satisfactory to the Company.

Section 9.                               Choice of Law and Venue; Submission to Jurisdiction; Service of Process.

(a)           THE VALIDITY OF THIS NOTE , ITS CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT, AND THE RIGHTS OF THE PARTIES HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO THE CHOICE OF LAW PRINCIPLES THEREOF). THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS NOTE  SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK OR, AT THE SOLE OPTION OF HOLDER, IN ANY OTHER COURT IN WHICH HOLDER SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY.

(b)           COMPANY HEREBY SUBMITS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION.

(c)           COMPANY HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT, OR OTHER PROCESS ISSUED IN ANY ACTION OR PROCEEDING AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT, OR OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO COMPANY.

(d)           NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO AFFECT THE RIGHT OF  HOLDER   TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW, OR TO PRECLUDE THE ENFORCEMENT BY HOLDER OF ANY JUDGMENT OR ORDER OBTAINED IN SUCH FORUM OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT

TO ENFORCE SAME IN ANY OTHER APPROPRIATE FORUM OR JURISDICTION.

(e)           To the extent determined by such court, the Company shall reimburse the Holder for any reasonable legal fees and disbursements incurred by the Holder in enforcement of or protection of any of its rights under any of this Note.

Section 10.             Any waiver by the Company or the Holder of a breach of any provision of this Note shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Note.  The failure of the Company or the Holder to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Note.  Any waiver must be in writing.

Section 11.             If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances.

Section 12.             Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day (or, if such next succeeding Business Day falls in the next calendar month, the preceding Business Day in the appropriate calendar month).

Section 13.             Security.  The obligation of the Company for payment of principal, interest and all other sums hereunder, in the event of a default and failure of the Company to perform hereunder, is secured by  the pledge of certain securities (the “Pledged Shares”) by Steven B. Rash and               as Pledgors under the terms and conditions of  Stock Pledge Agreements, and  Guarantys executed and delivered by Steven B. Rash and                     as Guarantor.

Section 14. Registration Rights . If, at any time prior to payment in full of this Note, the Company participates (whether voluntarily or by reason of an obligation to a third party) in the registration of any shares of the Company’s stock (other than a registration on Form S-4, S-8 or successor form), the Company shall give written notice thereof to the Holder and the Holder shall have the right, exercisable within ten (10) business days after receipt of such notice, to demand inclusion of all or a portion of the  Pledged Shares in such registration statement.  If the Holder exercises such election, the Pledged Shares so designated shall be included in the registration statement at no cost or expense to the Holder (other than any costs or commissions which would be borne by the Holder ).  The Holder’s rights under this Section 14 shall expire at such time as the

Holder can sell all of the Pledged Shares  under Rule 144(k) without volume or other restrictions or limit.

Section 15 . Waiver of Jury Trial

THE COMPANY  HEREBY WAIVE ITS  RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS NOTE . COMPANY REPRESENTS THAT EACH HAS REVIEWED THIS WAIVER AND KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

Section 16. Effect

This Note , as amended and restated herein in supplementation of , and not in substitution of a Note in the principal amount of $396,500 executed by the Company on the Original Issue Date and shall for all purposes be deemed  the Note referred to the Stock Pledge Agreements and Guarantys set forth in Section13 hereof.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed by an officer duly authorized for such purpose, as of the date first above indicated.

		POWER 3 MEDICAL PRODUCTS, INC.
		By:	/s/: Steven B. Rash
		Steven B. Rash, Chief Executive Officer
Attest:
By:	John P. Burton

EX-10.2

Exhibit 10.2

NOTE (“the Note”)

Power3 Medical Products, Inc., a New York corporation (the “Company”) for value received hereby promises to pay Ira L. Goldknopf (“Payee”) on or before March 5, 2006, (“Maturity Date”); the principal amount of eighty thousand dollars ($80,000.00) (“Principal”).

Should the Principal not be repaid as of March 5, 2006 interest of 6 % per year on any unpaid Principal amount will be earned by the Payee until such time as all of the Principal amount is repaid.  This Note may be repaid at any time prior to March 5, 2006 without interest or penalty.

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

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

If to the lender:

Ira L. Goldknopf

3400 Research Forest Parkway

Woodlands, Texas 77381

If to the Company:

Power3 Medical Products, Inc.

3400 Research Forest Parkway

Woodlands, Texas 77381

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

Payee	Power3 Medical Products, Inc.	Date
/s/: Ira L. Golknopf	/s/: Steven B. Rash	September 6, 2005
Ira L. Goldknopf	By: Steven B. Rash
	Its: Chairman and CEO

EX-10.3

Exhibit 10.3

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

PROMISSORY NOTE

$200,000.00	The Woodlands, Texas
	August 29, 2005

FOR VALUE RECEIVED, POWER 3 MEDICAL PRODUCTS, INC., a New York corporation (the “Maker”), promises to pay to the order of Cordillera Fund L.P., a limited partnership (the “Payee”), pursuant to the terms and conditions contained in this promissory note (this “Note”) the principal sum of Two Hundred Thousand Dollars ($200,000.00), together with interest on the unpaid principal balance from the date hereof until paid in full, if applicable, at the rate and on the terms provided herein.

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

(i)The entire unpaid principal balance of this Note shall be payable, in cash, within one Business Day (as hereinafter defined) of the closing of the Maker’s issuance and sale of $1,600,000 aggregate principal amount of debentures pursuant to the Securities Purchase Agreement dated October 28, 2004, as amended, which closing is to occur within five trading days of the effectiveness of the Maker’s registration statement on Form SB-2 currently pending with the U.S. Securities and Exchange Commission (the “Registration Statement Funding”); provided, however, that if  the Registration Statement Funding does not occur on or before October 31, 2005, the entire unpaid principal balance of this Note shall be due and payable in full on such date.  The payment date of the principal is referred to as the “Payment Date.”

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

(A)the accrued and unpaid interest calculated in accordance with Section 2 below shall be paid, in cash, concurrently upon the Payment Date; or

(B)the accrued and unpaid interest payable on this Note shall be considered paid, in full, upon Maker’s issuance and delivery of restricted shares of Maker’s common stock at $0.00 cost basis per share to Payee.  Such issuance and delivery to occur on 95th  or following 2 days the effectiveness of the registration statement[, subject to the provisions of the Securities Purchase Agreement].

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

2.Interest Rate. During the period ending on the Payment Date (the “Payment Period”), the unpaid principal balance of this Note shall bear simple interest at a per annum rate equal to ten percent (10%) for such period determined in accordance with this Section 2. Notwithstanding the foregoing, upon an Event of Default (as hereinafter defined) with respect to the Payment and until such Event of Default shall have been cured, such Payment shall bear interest at a rate of twelve percent (12%) per annum.  Interest shall be payable as provided in Section 1 above.

3.Event of Default. It is expressly provided that upon failure in the punctual payment of the principal or interest due hereunder, as the same shall become due and payable, and the passage of thirty (30) days following when such payment was due and payable, during which period the Maker may make such payment(s) as are due and payable and prevent a default of this Note, an “Event of Default” will have occurred. Upon an Event of Default and until such Event of Default shall have been cured, the holder of this Note may, at its option, without further notice or demand, (i) declare the outstanding principal balance of this Note, and accrued but unpaid interest payable on this Note in cash at the rate provided in Section 2 hereof, at once due and payable, (ii) declare the outstanding principal balance of this Note, and accrued but unpaid interest payable on this Note in Maker’s unrestricted common stock at $0.00 cost basis per share to Payee at once due and payable at a rate calculated as follows: 166,000 X 5%  = Number of Late Penalty Shares to be issued to Payee per 30 calendar day period past the Event of Default, where the minimum pro-rata period is determined by the closest calendar 15 day anniversary past the Event of Default date, either future or past.  Penalty Shares will accrue to Payee until the date that principal, interest and Penalty Shares are delivered to Payee in full.  (iii) pursue any and all rights, remedies and recourses available to the holder hereof, including but not limited to any such rights, remedies or recourses at law or in equity, or (iii) pursue any combination of the foregoing; and in the event default is made in the prompt payment of this Note when due or declared due, and the same is placed in the hands of an attorney for collection, or suit is brought on the same, or the same is collected through probate, bankruptcy or other judicial proceedings, then the Maker agrees and promises to pay all costs of collection, including reasonable attorney’s fees.

2

4.Right of Prepayment.  The Maker shall have the right to prepay all or any part of the unpaid principal or interest hereon at any time without premium or penalty.  Any and all prepayments with respect to this Note shall be applied first to payment of accrued interest as of the date of such prepayment and the balance, if any, shall be applied in reduction of the unpaid principal.

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

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

7.Transferability.  The Payee may not transfer, sell, assign, pledge, hypothecate, bequeath, gift, create a lien on, place in trust, assign or in any other way encumber or dispose of, directly or indirectly and whether or not by operation of law or for value, this Note or the obligations represented hereby (collectively, “transfer”) or any beneficial interest in this Note or any of the obligations represented hereby without the Maker’s prior written consent, which shall not be unreasonably withheld provided that the transferee of this Note or any portion hereof (i) executes and delivers to the Maker an appropriate document, satisfactory to the Maker, in which such permitted transferee agrees that it shall be bound by the same transfer restrictions set forth herein with respect to all or any portion of this Note received by such permitted transferee and (ii) delivers to the Maker an opinion of counsel or other evidence satisfactory to the Maker to the effect that the proposed transfer may be made without registration under the Securities Act of 1933 or the securities laws of any state.

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

9.Severability.  The provisions of this Note are severable and, in the event that any court of competent jurisdiction shall determine that any one or more of the provisions or part of the provisions contained in this Note shall, for any reason, be held to be invalid, illegal or

3

unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision or part of a provision of this agreement and this Note shall be reformed and construed as if such invalid or illegal or unenforceable provision, or part of such provision, would be valid, legal and enforceable to the maximum extent possible.

10.Entire Agreement; Amendment. This Note, the $251,000 Promissory Note between the Maker and the Payee dated April 5, 2005 and any documents referenced in Section 1. (i) of this Note contain the entire understanding and agreement of the parties with respect to the matters covered hereby and, except as specifically set forth herein or in the other transaction documents, neither the Maker nor Payee make any representation, warranty, covenant or undertaking with respect to such matters.  Terms and conditions set forth herein supersede all prior understandings and in cases of conflict or disagreement among agreements or in all instances where this Note provides specific values, formulas, details or remedies not provided in the April 5, 2005 $251,000 Promissory Note, terms and conditions herein shall apply to the prior and separate Note and prevail and specifically:

(i)The date August 15^th as used in Section 1. (i) in the April 5, 2005 Note is replaced by the November 15^th date as used herein.

(ii)Section 1. (ii) B in the April 5, 2005 Note is replaced by the following language:  the accrued and unpaid interest payable on this Note shall be considered paid, in full, upon Maker’s common stock at $0.00 cost basis per share to Payee.  Such issuance and delivery is to occur on the 95^th or following 2 days after the effectiveness of the registration statement [, subject to the provisions of the Securities Purchase Agreement].

(iii)The number 166,00 in Section 3 of this document is replaced with 209,166 in the same intended use in provisions added herein to Section 3 of the April 5, 2005 Note.

No provisions of this Note may be waived or amended other than by a written instrument signed by the Maker and Payee.

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

[The rest of this page is intentionally left blank.]

4

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

POWER 3 MEDICAL PRODUCTS, INC.
By:	/s/: Steven B. Rash
Name:		Steven B. Rash
Title:		Chairman/CEO
CORDILLERA FUND L.P.
By:	/s/: Stephen J. Carter
Name:		Stephen J. Carter
Title:		Co-CEO of Andrew Carter Capital
		The GP of ACCF Gen Par, L.P.
		The GP of the Cordillera Fund L.P.

5