AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This Amended and Restated Employment Agreement (the “Agreement” ) by and between Power 3 Medical Products, Inc., a New York corporation (the “Company” ), and Ira L. Goldknopf, Ph.D. (the “Officer” ) is executed this 17 day of May, 2009 and shall be effective for all purposes as of May 17, 2009 (the “Effective Date” ).

WHEREAS, the Company and the Officer previously entered into that certain Employment Agreement dated as of May 18, 2004 (the “Original Agreement” );

WHEREAS, the Original Agreement terminated May 17, 2009; and

WHEREAS, the Company and the Officer desire to enter into a new Agreement and update the provisions of the Original Agreement to reflect the parties’ mutual understanding and intent and to restate the Original Agreement, as amended, in its entirety.

NOW, THEREFORE, in consideration of the premises and of the covenants and agreements herein provided, the parties hereto agree as follows:

1.            EMPLOYMENT TERMS

1.1           Term .  The Company hereby employs the Officer, and the Officer hereby accepts employment with the Company, all in accordance with the terms and conditions hereof, for a term commencing on May 17, 2009 and terminating on May 17, 2012.  However, the Officer shall be considered to be employed by the Company beyond the Termination Date for purposes of receiving certain benefits conferred under this Agreement, as described in Paragraph 3.1 hereof.

(a)            The Company hereby employs the Officer, and the Officer agrees to serve the Company, as an Officer of the Company pursuant to the terms of this Agreement.  The Company has by action of its Board of Directors appointed the Officer to the position of President and Chief Scientific Officer, however it may, in the sole and unfettered discretion of the Board of Directors, amend the Officer’s title and/or duties and responsibilities, provided that the Officer remains an officer of the Company pursuant to the terms of this Agreement.

(b)            The Officer shall be responsible for such duties as are commensurate with the office in which he serves and as may from time to time be assigned to the Officer by the Company’s Board of Directors.

(a)            At all times prior to the Termination Date, the Officer (i) shall devote his full business time, energies, best efforts, and attention to the business of the Company, (ii) shall faithfully and diligently perform the duties of his employment with the Company, (iii) shall do all reasonably in his power to promote, develop, and extend the business of the Company, and (iv) shall not enter into the service of, or be employed in any capacity or for any purpose whatsoever by, any person, firm or corporation other than the Company without the prior written consent of the Board of Directors of the Company.

(b)            The Officer shall perform his duties in accordance with all applicable laws, rules, or regulations that apply to the Company and/or its business, assets (real or personal), or employees.

2.             COMPENSATION .

2.1            Salary .

(a)           For so long as Officer is employed by the Company, the Company agrees to pay to the Officer, and the Officer shall accept from the Company, for all of his services rendered pursuant to this Agreement, a salary of One Hundred  Thousand Dollars ($100,000) per annum, payable semimonthly prorated for the period from May 18, 2009 to May 31, 2009, and a salary of One Hundred Twenty-Five Thousand Dollars ($125,000) per annum, payable semimonthly for the period beginning June 1, 2009.

(b)           The Company’s Board of Directors, or compensation committee of the Board of Directors (the “Compensation Committee” ), shall review the Officer’s salary annually and merit increases thereon shall be considered and may be approved, in the sole and unlimited discretion of the Company’s Board of Directors, depending in part on the profits and cash flow of the Company.  If the Company’s Board of Directors elects in its discretion to increase the salary of the Officer at any time or from time to time, the new salary rate shall, without further action by the Officer or the Company, be deemed substituted for the amount set forth above.  At such time, this Agreement shall be deemed amended accordingly (notwithstanding the provisions of Paragraph 7.8 below), and, as so amended, shall remain in full force and effect.

2.2            Bonuses .           The Company shall award the Officer a bonus of One Thousand Dollars ($1,000) for each publication authored by the Officer, or co-authored with another collaborator, which is published in a scientific or professional journal, in which the publication enhances the Company’s intellectual property, the Company’s scientific discoveries, the Company’s diagnostic testing products, or the Company’s overall visibility in its marketing efforts. The Company, in the sole and unfettered discretion of its Board of Directors or Compensation Committee, may from time to time award additional cash bonuses to the Officer based upon its measure of Officer’s performance.  Such bonuses may be awarded in a lump sum or may be conditioned upon the future performance or employment of Officer, in the sole and unfettered discretion of the Board of Directors of the Company.

2.3            Expenses .         Upon submission of appropriate invoices or vouchers, the Company shall pay or reimburse the Officer for all reasonable expenses incurred by the Officer in the performance of his duties hereunder in furtherance of the business of the Company.

2.4            Benefits .           The Company extends to the Officer the right to participate in whatever employee benefit plans (excluding any employee benefit plan covered separately in this Agreement) may be in effect from time to time, to the extent the Officer is eligible under the terms of the plans.  However, no employee benefits other than those specifically conferred by the terms of this Agreement have been promised to the Officer in connection with this employment.  The adoption of one or more employee benefit plans, the terms of the plans, and the Officer’s participation in the plans, if any, are in the sole discretion of the Company and may be changed by the Company at any time and from time to time.

2.5            Stock Grant .

(a)           Over the period of The Original Agreement, the Officer was granted by the Company restricted common shares of the Company’s stock (the “Common Shares”) and One Million Five Hundred (1,500,000) shares of Series B preferred stock to be designated by the Company (the “Series B Shares” ); and collectively with the Common Shares, the “Restricted Stock” . The grant of the Restricted Stock shall continue to be subject to the following terms and conditions:

(i)           Until such time as the restricted stock becomes non-forfeitable, the Company retains the right, at the discretion of the Board of Directors, to use any of such shares as deemed necessary, solely to pledge as collateral to raise funds for the benefit of the company. In the event that such shares become forfeit of a pledge, the company may at the discretion of the board of directors issue replacement shares to the employee under the restrictions of this agreement. During the course of the pledge, the voting rights of the pledged shares remain with the employee.

(ii)          Upon issuance of the Restricted Stock, except for the restrictions set forth in this Paragraph 2.5, the Officer shall have all rights of a shareholder of the Company with respect to such Restricted Stock including the right to vote such Restricted Stock and to receive all dividends and other distributions paid with respect to such Restricted Stock; provided, however, dividends, if any, paid or distributed on the Restricted Stock shall not be paid by the Company to the Officer unless and until such time as the Restricted Stock becomes non-forfeitable.

(iii)          In the event of a Change in Control (as herein defined), the Company waives in whole or in part any and all remaining restrictions on the Restricted Stock.  For purposes hereof, a Change of Control shall mean, and shall be deemed to have occurred:

(A)           if any person, other than any benefit plan of the Company or the Officer, as holder of the Series B Preferred Stock, directly or indirectly, becomes the beneficial owner (as defined in Section 13(d) of the Securities Exchange Act of 1934, as amended) of securities representing 51% or more of the combined voting power of the Company’s then-outstanding securities, but excluding any such acquisition pursuant to a merger, consolidation or similar business combination involving the Company; or

(B)           upon the consummation of a merger, consolidation, or similar business combination involving the Company, other than any such transaction which results in at least 75% of the total voting power represented by the voting securities of the surviving entity (or the parent entity thereof) outstanding immediately after such transaction being beneficially owned by at least 75% of the holders of the outstanding voting securities of the Company immediately prior to the transaction with the voting power of each such continuing holder relative to other such continuing holders not being substantially altered in the transaction; or

(C)           upon the Board of Directors or the shareholders of the Company approving a plan of complete or substantially complete liquidation of the Company; or

(D)           upon the consummation of the sale, lease, or disposition by the Company of 50% or more of the total assets of the Company in one or a series of related transactions (provided that a license, sublicense or similar transaction involving the Company’s intellectual property rights shall not be considered as a Change of Control); or

(E)           upon the individuals who constitute the Board as of the Effective Date (the “Incumbent Board” ) ceasing for any reason to constitute at least a majority of the members of the Board, provided that any person becoming a director after the Effective Date whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least two-thirds of the directors then comprising the Incumbent Board (other than any individual whose initial assumption of office occurs as a result of either (a) an actual or threatened election contest or (b) an actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board) shall be, for purposes of this Agreement, considered as though such person were a member of the Incumbent Board.

(v)          The Common Shares shall have demand registration rights or piggyback registration rights (neither of which, however, shall be effective unless and until the Officer’s rights to such shares have ceased to be subject to the risks of forfeiture as provided herein).

(b)           The Officer agrees to pay in a timely manner deemed suitable by the Company, and to indemnify and hold harmless the Company from, any and all taxes (including all penalties and interest, if any, thereon), resulting from the grant and/or transfer of the above-referenced Restricted Stock for which ultimate responsibility is assigned to or asserted against the Officer under applicable law.  For purposes of this provision, all withholding obligations of the Company in respect of the aforementioned taxes (including any and all taxes, penalties and interest imposed on or asserted against the Company for failure to properly withhold and remit any such amounts in a timely manner) shall be considered the responsibility of the Officer and, accordingly, the Officer agrees to pay in a timely manner deemed suitable by the Company, and to indemnify and hold harmless the Company from, any and all of such obligations.

2.6            Vacation; Sick Leave .    The Company’s vacation and sick leave policy has been established by the Company and may be changed by the Company at any time and from time to time.  Said policy is published in separate data files accessible to the Officer.  The Officer will not be entitled to receive payment for any unused sick leave either during employment or upon termination of employment.

2.7            Withholding .      The Company may withhold from any amounts payable under this Agreement any and all federal, state, city, or other taxes or other amounts required to be withheld by any applicable law.

3.             TERMINATION .

3.1            Termination Upon 30 Days Notice .

(a)           Either party may terminate the Officer’s employment under this Agreement for any reason whatsoever, either with or without cause, upon giving the other party no less than thirty (30) days prior written notice of such termination ( the “Notice Date” ).  The effective date of a termination pursuant to this Paragraph 3.1 shall be such termination date as stated on the notice, provided that the termination date can be no earlier than the 31 ^st day following the day the notice becomes effective pursuant to Paragraph 5.4 below (the “Termination Date” ).

(b)           Until the expiration of the contract on May 17, 2012 ( “Transition Period” ), unless terminated for “Cause” as defined in Paragraph 3.4 or if the Officer resigns from his position or duties, the Officer will continue to be considered as an employee of the Company only for the purpose of receiving the compensation and benefits awarded in Paragraphs&