Exhibit 10.2

 

UNCONDITIONAL AND CONTINUING GUARANTY

 

WHEREAS, the undersigned, Steven B. Rash and Ira Goldknopf (individually, a
“Guarantor,” collectively, the “Guarantors”), seek to induce Trinity Financing
Investments Corporation (“Lender”), with an address at 300 E. 55th Street, Apt.
14D, New York, New York 10022, to make a loan to Power 3 Medical Products, Inc.,
a New York corporation (“Borrower”); and

 

WHEREAS, the execution and delivery by Guarantors of this Unconditional and
Continuing Guaranty (the “Guaranty”) is a condition precedent to the making of a
loan by Lender to the Borrower; and

 

WHEREAS, each of the Guarantors is a shareholder of Borrower and will derive
substantial benefits from such loan;

 

NOW, THEREFORE, in consideration of the premises and of other good and valuable
consideration, the receipt of which is hereby acknowledged, each of the
Guarantors hereby covenants and agrees as follows:

 

1.                                       Guaranty.  Each Guarantor hereby
absolutely, irrevocably and unconditionally guarantees to Lender the full and
prompt performance by Borrower of all its covenants and obligations under a
certain promissory note in the original principal amount of $150,000 between
Lender and Borrower of even date herewith (the “Promissory Note”) and the
punctual and full payment and performance when due, whether at the stated date
or dates for such payment, by acceleration or otherwise, of all indebtedness,
liabilities and obligations of Borrower to Lender under the Note (all of the
foregoing are hereinafter sometimes referred to as the “Obligations”).

 

2.                                       Payment by Guarantor; Set-Off.  In the
event Lender makes demand or upon the occurrence of any Event of Default (as
defined in the Promissory Note) or a default by Borrower under any of the
Obligations and/or the failure of Borrower punctually to pay or perform any of
the Obligations when due, each Guarantor hereby agrees to make such payment
and/or performance punctually when and as the same shall become due and payable,
whether at maturity, by acceleration or otherwise.  Each such payment shall be
made to Lender at its address set forth above (or at such other address as
Lender shall specify by written notice to each Guarantor), in immediately
available funds.

 

3.                                       Obligation of Guarantors
Unconditional.  Each Guarantor hereby agrees that:

 

(a)                                  Its liability hereunder is unconditional,
irrespective of:  (i) the legality, validity or enforceability of the
Obligations; (ii) the legality, validity or enforceability of any security
interest, mortgage or pledge granted by Borrower or any Guarantor as collateral
for the Obligations, any guarantee, suretyship, letter of credit or
reimbursement agreement issued by any person secondarily or otherwise liable for
any of the Obligations, any security interest, mortgage, or pledge granted

 

--------------------------------------------------------------------------------

 

by any person secondarily or otherwise liable for any of the Obligations, or any
other device providing collateral security for payment of any of the
Obligations, all of the hereinabove referenced devices being referred to herein
as the “Collateral Security”; (iii) the absence of any action or effort by
Lender to either resort to, enforce or exhaust its remedies under or against the
Obligations and/or the Collateral Security; (iv) the waiver or consent by Lender
with respect to any provision in the documentation of the Obligations or the
Collateral Security; or (v) the recovery of any judgment against Borrower or any
action to enforce such judgment or any other circumstance which might, absent
the unconditional nature of this Guaranty, constitute a legal or equitable
discharge or defense of either Guarantor.

 

(b)                                 Lender may at any time, or from time to
time, in Lender’s sole discretion:  (i) change, alter, renew, continue, extend
and/or accelerate the time of payment of, all or any of the Obligations, or any
part or parts thereof or any renewal or renewals thereof; (ii) extend credit to
Borrower whether or not any Event of Default, or any event which with notice or
lapse of time, or both, would constitute an Event of Default, has occurred under
the Promissory Note or any other agreement between Lender and Borrower;
(iii) replace any existing Obligation and the documentation therefor with an
amended and restated Obligation and the documentation therefor; (iv) sell,
exchange, release, compromise and/or surrender all or any of the property which
is the subject of the Collateral Security (the “Collateral”), or any part or
parts thereof, with respect to which Lender may now or hereafter have an
interest; (v) sell and/or purchase any or all of the Collateral at public or
private sale, or at any broker’s board, and after deducting all costs and
expenses of every kind for collection, sale and/or delivery, apply the proceeds
of any such sale or sales against any of the Obligations; or (vi) settle or
compromise any or all of the Obligations with Borrower, and/or any other person
or persons liable thereon; all in such manner and upon such terms as Lender may
see fit and without notice to or consent from any Guarantor, who hereby agrees
to be and remain bound upon this Guaranty, irrespective of the effect upon the
existence or status of the Obligations or the Collateral Security and
notwithstanding any such change, alteration, renewal, continuance, extension,
acceleration, sale, exchange, release, compromise, surrender, application,
settlement, subordination or any other action hereinabove mentioned.

 

(c)                                  The liability of Guarantors will not be
discharged except by complete and final payment and performance of the
Obligations.

 

(d)                                 The liability of each Guarantor under this
Guaranty shall be reinstated with respect to any amount paid to Lender by
Borrower which is thereafter required to be returned to Borrower or any trustee,
receiver or other representative of or for Borrower, upon or by reason of the
bankruptcy, insolvency, reorganization, or dissolution of Borrower, or for any
other reason, all as though such amount had never been paid by Borrower.

 

2

--------------------------------------------------------------------------------

 

(e)                                  This is a guarantee of payment and not
merely of collection.

 

4.                                       Waiver of Subrogation.  No payment by
any Guarantor pursuant to any provision of this Guaranty or other satisfaction
of any Guarantor’s liabilities hereunder shall entitle either Guarantor, by
subrogation to the rights of Lender or otherwise, to any payment from Borrower,
from the proceeds of the property of Borrower or from any Collateral Security. 
Each Guarantor hereby releases and waives any and all rights to, and claims for,
subrogation, indemnity, reimbursement and/or contribution which either Guarantor
may now or hereafter have against Borrower by reason of payments made by either
Guarantor under this Guaranty.

 

5.                                       Waivers.  Each Guarantor hereby
expressly waives:  (a) notice of the acceptance of this Guaranty; (b) notice of
the making of the loan evidenced y the promissory Note and of any change in the
rate at which any of the Obligations are accruing interest or fees;
(c) diligence, presentment and demand for payment of any of the Obligations;
(d) protest, notice of protest, notice of dishonor and notice of nonpayment or
default to either Guarantor or to any other person with respect to the
Obligations; (e) filings of claims or proof of claims with a court in the event
of any bankruptcy or insolvency proceedings as to which Borrower or any person
secondarily or otherwise liable for any of the Obligations is subject; (f) any
right to require a proceeding first against Borrower or any other person;
(g) any demand for payment under this Guaranty; (h) any defenses available to a
surety under law; and (i) all other legally waivable notices to which either
Guarantor might otherwise be entitled.

 

6.                                       Insolvency of Borrower.  In the event
that any proceeding is commenced by or against Borrower under the Federal
Bankruptcy Code or any insolvency or other debtor relief laws, as now or
hereafter in effect, or for the appointment of a receiver for Borrower or any of
its property, or if Borrower shall make an assignment for the benefit of
creditors or shall discontinue business or becomes unable to pay or admits in
writing its inability to pay its debts as they come due, all Obligations of
Borrower shall, for the purpose of this Guaranty, become immediately due and
payable.

 

7.                                       Omitted

 

8.                                       Termination of Guaranty.  This Guaranty
is a continuing Guaranty and shall remain in full force and effect irrespective
of any interruptions in the business relations of Borrower with Lender;
provided, however, that either may, by notice in writing actually received and
acknowledged by Lender, terminate this Guaranty with respect to all new
Obligations incurred or contracted by Borrower after the date on which such
notice is so received, but this Guaranty shall remain in full force and effect
as to all Obligations existing at the date of receipt of such notice and to all
renewals and extensions thereof until the full payment thereof and all interest
and fees thereon to Lender.

 

9.                                       Consent to Jurisdiction; Waiver of Jury
Trial.  Each Guarantor hereby submits to the jurisdiction of the courts of the
State of New York and the United States District Court for the Southern District
of New York, as well as to the jurisdiction of all courts from which an

 

3

--------------------------------------------------------------------------------

 

appeal may be taken from the aforesaid courts, for the purpose of any suit,
action or other proceeding arising out of any obligations under or with respect
to this Guaranty, and expressly waives any and all objections Guarantor may have
as to venue in any such courts.  EACH GUARANTOR WAIVES TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT ON ANY MATTER WHATSOEVER (INCLUDING,
WITHOUT LIMITATION, ANY ACTION, PROCEEDING OR COUNTERCLAIM) ARISING OUT OF OR IN
ANY WAY CONNECTED WITH THIS GUARANTY.  No party to this Guaranty, including but
not limited to any assignee or successor of a party, shall seek a jury trial in
any lawsuit, proceeding, counterclaim, or any other litigation procedure based
upon, or arising out of, this Guaranty, any related instruments, any collateral
or the dealings or the relationship between the parties.  No party will seek to
consolidate any such action, in which a jury trial has been waived, with any
other action in which a jury trial cannot be or has not been waived.  THE
PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY DISCUSSED BY THE PARTIES HERETO,
AND THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS.  NO PARTY HAS IN ANY WAY
AGREED WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS
PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.

 

10.                                 Miscellaneous.

 

(a)                                  Notices.  All notices, requests, demands or
other communications (including telecommunications) to or from either Guarantor
or Lender shall be in writing and shall be deemed to have been duly given or
made when delivered (i) to Lender, at its address as set forth above,
Attention:  Trinity Bui,  and (ii) to either Guarantor, at the address of the
Borrower as set forth in the Promissory Note, or as to either party, at such
other address or telecopier number as such party may hereafter specify to the
party in writing.  Written notices if delivered by hand or telecopier shall be
deemed delivered upon receipt acknowledged in written form by the recipient or
five (5) business days (business day being defined as a day, other than a
Saturday or Sunday, on which the banks in Massachusetts are authorized to be
open for business) after mailing or sending, and all mailed notices shall be by
registered or certified mail, postage prepaid.  Notices provided by any other
means shall be deemed delivered upon receipt acknowledged in writing.

 

(b)                                 Expenses.  Guarantor agrees that, with or
without notice to or demand upon Borrower or Guarantor, Guarantor will pay or
reimburse Lender (to the extent reimbursement has not already been made by
Borrower) for all expenses, including reasonable fees and expenses of its legal
counsel, incurred by Lender in connection with any of the Obligations or the
collection thereof and the enforcement of any provisions of this Guaranty.

 

(c)                                  Continuing Guaranty.  This is a continuing
guaranty and shall remain in full force and effect and be binding upon Guarantor
and its successors and assigns until payment in full to Lender of all the
Obligations.

 

(d)                                 Assignments.  Lender may assign its rights
and powers under this Guaranty with respect to all or any of the Obligations,
and, in the event of such assignment, the

 

4

--------------------------------------------------------------------------------

 

assignee of such rights and powers, to the extent of such assignment, shall have
the same rights and remedies as if originally named herein in the place of its
assignor.

 

(e)                                  Waiver of Rights.  No delay on the part of
Lender in exercising any rights hereunder or failure to exercise the same shall
operate as a waiver of such rights; no notice to or demand on either Guarantor
shall be deemed to be a waiver of the obligation of either Guarantor or of the
right of Lender to take other or further action without notice or demand as
provided herein.  In any event no modification or waiver of the provisions
hereof shall be effective unless in writing nor shall any waiver be applicable
except with respect to the specific person to whom and in the specific instance
or matter for which given.

 

(f)                                    Cumulative Remedies.  The obligations of
each Guarantor hereunder are in addition to and not in substitution for any
other obligations or security interests now or hereafter held by Lender and
shall not operate as a merger of any contract or debt or suspend the fulfillment
of, or affect the rights, remedies or powers of Lender in respect of, any
obligation or other security interest held by it for the fulfillment thereof. 
The rights and remedies provided herein and in any other instrument are
cumulative and not exclusive of any other rights or remedies provided by law.

 

(g)                                 Governing Law.  This Guaranty shall be
governed by, determined and construed in accordance with the laws of the State
of New York without regards to the choice of law principles thereof.

 

(h)                                 Severability.  If any part of this Guaranty
is contrary to, prohibited by or deemed invalid under the applicable law or
regulations of any jurisdiction, such provision shall, as to such jurisdiction,
be inapplicable and deemed omitted to the extent so contrary, prohibited or
invalid, but the remainder hereof shall not be invalidated thereby and shall be
given full force and effect so far as possible, and any such prohibition or
invalidity in any jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.

 

(i)                                     References to Lender and Guarantor. 
Each reference herein to Lender shall be deemed to include its successors and
assigns, and each reference to Guarantor and any pronouns referring thereto as
used herein shall be construed in the masculine, feminine, neuter, singular, or
plural as the context may require and shall be deemed to include the heirs,
executors, administrators, legal representatives, successors and assigns of
Guarantor, all of whom shall be bound by the provisions hereof.

 

5

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, each Guarantor has executed and delivered this Guaranty as
of the       day of November, 2005.

 

WITNESS:

 

 

 

 

 

 

Steven B. Rash

 

 

 

 

 

 

 

 

Ira Goldknopf

 

6

--------------------------------------------------------------------------------