FORM OF WARRANT
THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR AN
OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED.
POWER3 MEDICAL PRODUCTS, INC.
COMMON STOCK PURCHASE WARRANT
1.
Issuance .
In consideration of good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged by
POWER3 MEDICAL PRODUCTS, INC. ,
a New York corporation (the “Company”),
_____________________________ or
registered assigns (the “Holder”) is hereby granted the
right to purchase at any time, on or after the Issue Date (as
defined below) until 5:00 P.M., Central Time, on the Expiration
Date (as defined below), Three Million Five Hundred Thousand
(3,500,000) fully paid and nonassessable shares of the
Company’s Common Stock, $0.001 par value per share (the
“Common Stock”), at an initial exercise price per share
(the “Exercise Price”) of $____ per share, subject to
further adjustment as set forth herein. This Warrant was originally
issued to the Holder or the Holder’s predecessor in interest
on _____________, 2008 (the “Issue Date”).
2.
Exercise of Warrants .
2.1
General .
(a)
This Warrant is exercisable in whole or in part at any time
and from time to time commencing on the Issue Date. Such
exercise shall be effectuated by submitting to the Company
(either by delivery to the Company or by facsimile
transmission as provided in Section 8 hereof) a completed and
duly executed Notice of Exercise (substantially in the form
attached to this Warrant Certificate) as provided in the
Notice of Exercise. The date such Notice of Exercise is faxed
to the Company shall be the “Exercise Date,”
provided that, if such exercise represents the full exercise
of the outstanding balance of the Warrant, the Holder of this
Warrant tenders this Warrant Certificate to the Company within
five (5) Trading Days thereafter. The Notice of Exercise shall
be executed by the Holder of this Warrant and shall indicate
(i) the number of shares then being purchased pursuant to such
exercise and (ii) if applicable (as provided below), whether
the exercise is a cashless exercise.
(b)
The provisions of this Section 2.1(b) shall only be applicable
(i) prior to the Automatic Conversion Date (as defined below),
if, and only if, for any reason on the Exercise Date, there is
no effective registration statement naming the Holder as
selling stockholder pursuant to which the Holder would be
entitled to sell the Warrant Shares on such date, or (ii) on
the Automatic Exercise Date (as defined below), whether or not
there is an effective Registration Statement covering the
Warrant Shares on such date. If the Notice of Exercise form
elects a “cashless” exercise, the Holder shall
thereby be entitled to receive a number of shares of Common
Stock equal to (w) the excess of the Current Market Value (as
defined below) over the total cash exercise price of the
portion of the Warrant then being exercised, divided by (x)
the Market Price of the Common Stock. For the purposes of this
Warrant, the terms (y) “Current Market Value”
shall mean an amount equal to the Market Price of the Common
Stock, multiplied by the number of shares of Common Stock
specified in the applicable Notice of Exercise, and (z)
“Market Price of the Common Stock” shall mean the
VWAP for the Trading Day immediately prior to the Exercise
Date.
(c)
If the Holder provides on the Notice of Exercise form that the
Holder has elected a “cash” exercise (or if the
cashless exercise referred to in the immediately preceding
paragraph (b) is not available in accordance with its terms),
the Exercise Price per share of Common Stock for the shares
then being exercised shall be payable, at the election of the
Holder, in cash or by certified or official bank check or by
wire transfer in accordance with instructions provided by the
Company at the request of the Holder.
(d)
Upon the appropriate payment, if any, of the Exercise Price
for the shares of Common Stock purchased, together with the
surrender of this Warrant Certificate (if required), the
Holder shall be entitled to receive a certificate or
certificates for the shares of Common Stock so purchased. The
Company shall deliver such certificates representing the
Warrant Shares in accordance with the instructions of the
Holder as provided in the Notice of Exercise (the certificates
delivered in such manner, the “Warrant Share
Certificates”) within ten (10) Trading Days (such third
Trading Day, a “Delivery Date”) of (i) with
respect to a “cashless exercise,” the Exercise
Date or the Automatic Exercise Date, as the case may be, or,
(ii) with respect to a “cash” exercise, the later
of the Exercise Date or the date the payment of the Exercise
Price for the relevant Warrant Shares is received by the
Company.
(e)
The Holder shall be deemed to be the holder of the shares
issuable to it in accordance with the provisions of this
Section 2.1 on the Exercise Date.
2.2
Limitation on Exercise .
Notwithstanding the provisions of this Warrant, in no event (except
(i) as specifically provided in this Warrant as an exception to
this provision, (ii) on the Automatic Exercise Date, or (iii) while
there is outstanding a tender offer for any or all of the shares of
the Company’s Common Stock) shall the Holder be entitled to
exercise this Warrant, or shall the Company have the obligation to
issue shares upon such exercise of all or any portion of this
Warrant to the extent that, after such exercise the sum of (1) the
number of shares of Common Stock beneficially owned by the Holder
and its affiliates (other than shares of Common Stock which may be
deemed beneficially owned through the ownership of the unexercised
portion of the Warrants or other rights to purchase Common Stock or
through the ownership of the unconverted portion of convertible
securities), and (2) the number of shares of Common Stock issuable
upon the exercise of the Warrants with respect to which the
determination of this proviso is being made, would result in
beneficial ownership by the Holder and its affiliates of more than
4.99% of the outstanding shares of Common Stock (after taking into
account the shares to be issued to the Holder upon such exercise).
For purposes of the proviso to the immediately preceding sentence,
beneficial ownership shall be determined in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended, except as
otherwise provided in clause (1) of such sentence. Nothing herein
shall preclude the Holder from disposing of a sufficient number of
other shares of Common Stock beneficially owned by the Holder so as
to thereafter permit the continued exercise of this
Warrant.
2.3
Automatic Exercise. If
any portion of this Warrant remains unexercised as of the
Expiration Date and the Market Price of the Common Stock as of the
Expiration Date is greater than the applicable Exercise Price as of
the Expiration Date, then, without further action by the Holder,
this Warrant shall be deemed to have been exercised automatically
on the date (the “Automatic Exercise Date”) which is
the day immediately prior to the close of business on the
Expiration Date (or, in the event that the Expiration Date is not a
Trading Day, the immediately preceding Trading Day) as if the
Holder had duly given a Notice of Exercise for a
“cashless” exercise as contemplated by Section 2.1(b)
hereof, and the Holder (or such other person or persons as directed
by the Holder) shall be treated for all purposes as the holder of
record of such Warrant Shares as of the close of business on such
Automatic Exercise Date. This Warrant shall be deemed to be
surrendered to the Company on the Automatic Exercise Date by virtue
of this Section 2.3 without any action by the Holder.
2.4
Certain Definitions .
As used herein, each of the following terms has the meaning set
forth below, unless the context otherwise requires:
(a)
“Expiration
Date” means the earlier of (i) the Scheduled Expiration
Date or (ii) the Accelerated Expiration Date (as defined
below).
(b)
“Scheduled
Expiration Date” means the date which is the last
calendar day of the month in
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