GUARANTY

    


    


    GUARANTY
      dated as of June 30, 2008 ("Guaranty") made by Steven B. Rash, an individual
      residing at,10 Spiceberry Place, The Woodlands, TX 77382 (“Guarantor”) in favor
      of _____________________ ("Lender").  

    


    WITNESSETH

    


    WHEREAS,
      Power 3 Medical Products, Inc., a New York corporation (the “Borrower”), and the
      Lender are parties to a Debenture, dated as of June 30, 2008 (such agreement,
      as
      amended, restated, supplemented or otherwise modified from time to time, being
      hereinafter referred to as the “Debenture”);

    


    WHEREAS,
      pursuant to the Debenture, the Guarantor is required to execute and deliver
      to
      the Lender a guaranty guaranteeing the Debenture and all other obligations
      under
      the Debenture and the other Loan Documents; and

    


    WHEREAS,
      the Guarantor has determined that (i) it will derive substantial benefit and
      advantage from the loan and other financial accommodations made available to
      the
      Borrower under the Debenture and the other Loan Documents and (ii) its
      execution, delivery and performance of this Guaranty directly benefit, and
      are
      within the best interests of, the Guarantor;

    


    NOW,
      THEREFORE, in consideration of $1,000, paid by the Borrower to the Guarantor,
      receipt of which is hereby acknowledged, the premises, the agreements herein
      and
      in order to induce the Lender to make and maintain the Loan pursuant to the
      Debenture, the Guarantor hereby agrees with the Lender, as follows:

    


    Section
      1. Definitions.
      Reference is hereby made to the Debenture for a statement of the terms thereof.
      All terms used in this Guaranty which are defined in the Debenture and not
      otherwise defined herein shall have the same meanings herein as set forth
      therein. As used in this Guaranty, the following terms have the following
      meanings (terms defined in the singular to have the same meaning when used
      in
      the plural and vice versa):

    


    “Borrower”
      has the meaning specified in the preamble above.

    


    “Guaranty”
      means this Guaranty.

    


    “Guaranty
      Documents” means the Loan Documents and any document or agreement evidencing,
      related to or delivered in connection with any or all of the Guaranteed
      Obligations.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

      “Guaranteed
      Obligations” means any and all present and future liabilities and obligations of
      Borrower and Grantor to Lender incurred by Borrower and Grantor under the Loan
      Documents, and whether due or to become due, secured or unsecured, absolute
      or
      contingent, joint or several, direct or indirect, acquired outright,
      conditionally or as collateral security by Lender from another, liquidated
      or
      unliquidated, arising by operation of law or otherwise, together with all fees
      and expenses incurred in collecting any or all of the items specified in this
      definition or enforcing any rights under any of the Guaranty Documents,
      including all fees and expenses of Lender’s counsel and of any experts and
      agents which may be paid or incurred by Lender in collecting any such items
      or
      enforcing any such rights.

    


    Section
      2. Rules
      of Interpretation.
      When
      used in this Guaranty: (1) “or” is not exclusive, (2) a reference to a law
      includes any amendment or modification to such law, and (3) a reference to
      an
      agreement, instrument or document includes any amendment or modification of
      such
      agreement, instrument or document.

    


    Section
      3. Guaranty.
      Guarantor hereby guarantees to Lender and its successors, endorsees, transferees
      and assigns the prompt and complete payment, as and when due and payable
      (whether at stated maturity or by required prepayment, acceleration, demand
      or
      otherwise), of all of the Guaranteed Obligations now existing or hereafter
      incurred will be paid strictly in accordance with their terms.

    


    Section
      4. Limitation
      of Liability.
      The
      obligation of Guarantor under this Guaranty shall be limited to an aggregate
      amount equal to the largest amount that would not render the obligation of
      Guarantor under this Guaranty subject to avoidance under Section 548 of the
      United States Bankruptcy Code or any comparable provision of any applicable
      state law.

    


    Section
      5. Type
      of Guaranty.
      This
      Guaranty is absolute and unconditional and as such is not subject to any
      conditions and Guarantor is fully liable to perform all of its duties and
      obligations under this Guaranty as of the date of execution of this Guaranty.
      This Guaranty is a continuing guaranty and applies to all future Guaranteed
      Obligations. In addition, this Guaranty shall remain in full force and effect
      even if at any time there are no outstanding Guaranteed Obligations. This
      Guaranty is a guaranty of payment and not of collection. The obligations and
      liabilities of Guarantor under this Guaranty shall not be conditioned or
      contingent upon the pursuit by Lender of any right or remedy against Borrower,
      Grantor or any other person which may be or become liable in respect of all
      or
      any part of the Guaranteed Obligations, or against any assets securing the
      payment of the Guaranteed Obligations or guarantee for such Guaranteed
      Obligations or right of setoff with respect to such Guaranteed Obligations.
      This
      Guaranty is irrevocable and as such cannot be cancelled, terminated or revoked
      by Guarantor.

    


    
      
         

      

      
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    Section
      6. Reinstatement
      of Guaranty.
      This
      Guaranty shall continue to be effective or shall be reinstated, as the case
      may
      be, if at any time any payment, or any part thereof, of any of the Guaranteed
      Obligations are rescinded or must otherwise be returned by Lender upon the
      insolvency, bankruptcy, dissolution, liquidation or reorganization of Borrower,
      Grantor or otherwise, all as though such payment had not been made.

    


    Guarantor
      hereby consents that, without the necessity of any reservation of rights against
      Guarantor and without notice to or further assent by Guarantor, any demand
      for
      payment of any of the Guaranteed Obligations made by Lender may be rescinded
      by
      Lender and any of such Guaranteed Obligations continued after such
      rescission.

    


    Section
      7. Security
      Interest.
      To
      secure the payment of the obligations of Guarantor under this Guaranty,
      Guarantor has executed a Pledge Agreement in favor of, and grants Lender a
      pledge and security interest in the Pledged Shares listed in Schedule 1 to
      the
      Pledge Agreement.

    


    Section
      8. Waiver
      of Notices.
      Guarantor hereby waives any and all notices including (1) notice of or proof
      of
      reliance by Lender upon this Guaranty or acceptance of this Guaranty, (2) notice
      of the incurrence of any Guaranteed Obligations or the renewal, extension or
      accrual of any such Guaranteed Obligations, (3) notice of any actions taken
      by
      Lender, Borrower, Grantor or any other person under any Guaranty Document,
      and
      (4) notices of nonpayment or nonperformance, protest, notices of protest and
      notices of dishonor.

    


    Section
      9. Waiver
      of Defenses.
      Guarantor hereby waives any and all defenses to the performance by Guarantor
      of
      its duties and obligations under this Guaranty, including any defense based
      on
      any of the following:

    


    (1) any
      failure of Lender to disclose to Guarantor any information relating to the
      business, condition (financial or otherwise), operations, performance,
      properties or prospects of any party obligated to make payment on any and all
      Guaranteed Obligations, whether as principal or guarantor, now or hereafter
      known to Lender,

    


    (2) any
      defense to the payment of any or all the Guaranteed Obligations, including
      lack
      of validity or enforceability of any of the Guaranteed Obligations or any
      Guaranty Documents, 

    


    (3) any
      change in the time, manner or place of payment of, or in any other term in
      respect of, all or any of the Guaranteed Obligations, or any other amendment
      or
      waiver of or consent to any departure from any Guaranty Document,

    


    
      
         

      

      
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    (4) any
      exchange or release of, or non-perfection of any security interest on or in
      any
      assets securing the payment of the Guaranteed Obligations,

     

    (5) any
      failure to execute any other guaranty for all or any part of the Guaranteed
      Obligations, or any release or amendment or waiver of, or consent to any
      departure from, any other guaranty for any or all of the Guaranteed Obligations,
      

    
       

      (6)
any
        subordination of any or all of the Guaranteed Obligations, 

       

    

    (7) 
      any act
      or omission of Lender in connection with the enforcement of, or the exercise
      of
      rights and remedies, including any election of, or the order of exercising
      any,
      remedies, with respect to (a) the Guaranteed Obligations, (b) any other
      guarantor of the Guaranteed Obligations, or (c) any assets securing the payment
      of the Guaranteed Obligations, 

    


    (8) any
      manner of application of any funds received by Lender to Guaranteed Obligations
      or any other obligations owed to Lender, whether from the sale or disposition
      of
      any assets securing the Guaranteed Obligations, from another guarantor of the
      Guaranteed Obligations or otherwise, and 

    


    (9) any
      failure to give or provide any notices, demands or protests, including those
      specified under Section 8 herein, entitled “Waiver of Notices”.

    


    Section
      10. Subrogation.
      Guarantor may not exercise any rights which Guarantor may acquire by way of
      subrogation or contribution, whether acquired by any payment made under this
      Guaranty, by any setoff or application of funds of Borrower, by Lender or
      otherwise, until (1) the payment in full of the Guaranteed Obligations (after
      Lender no longer has any obligation or arrangement to provide credit to
      Borrower, including under or pursuant to a line of credit), and (2) the payment
      of all fees and expenses to be paid by Guarantor pursuant to this Guaranty.
      If
      any amount shall be paid to Guarantor on account of such subrogation or
      contribution rights at any time when all of the Guaranteed Obligations and
      all
      such other expenses shall not have been paid in full (after Lender no longer
      has
      any obligation or arrangement to provide credit to Borrower, including under
      or
      pursuant to a line of credit), such amount shall be held in trust for the
      benefit of Lender, shall be segregated from the other funds of Guarantor and
      shall forthwith be paid over to Lender to be credited and applied in whole
      or in
      part by Lender against the Guaranteed Obligations, whether matured or unmatured,
      and all such other fees and expenses in accordance with the terms of the
      Guaranty Documents.

    


    Section
      11. Representations.
      At the
      time of execution of this Guaranty and each time Lender provides credit as
      Debentured above, Guarantor represents and warrants to Lender as
      follows:

    


    
      
         

      

      
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    (1) Name.
      The
      exact legal name of the Guarantor is the name specified in the preamble to
      this
      Guaranty. The Guarantor has not been known by any other name during the five
      (5)
      years prior to the date of the Guaranty.

    


    (2) Location.
      The
      principal residence of the Guarantor is 10 Spiceberry Place, The Woodlands,
      TX
      77382.

    


    (3) No
      Contravention.
      The
      execution, delivery and performance by Guarantor of this Guaranty do not and
      will not (a) violate any provision of any law, order, writ, judgment,
      injunction, decree, determination, or award presently in effect applicable
      to
      Guarantor, (b) result in a breach of or constitute a default under any indenture
      or loan or credit agreement or any other agreement, lease, or instrument to
      which Guarantor is a party or by which Guarantor or its properties may be bound
      or affected, or (c) result in, or require, the creation or imposition of any
      lien upon or with respect to any of the properties now owned or hereafter
      acquired by Guarantor.

    


    (4) Governmental
      Authority.
      No
      authorization, approval or other action by, and no notice to or filing with,
      any
      governmental authority is required for the due execution, delivery and
      performance by Guarantor of this Guaranty.

    


    (5) Legally
      Enforceable Guaranty.
      This
      Guaranty is the legal, valid and binding obligation of Guarantor, enforceable
      against Guarantor in accordance with its terms, except to the extent that such
      enforcement may be limited by (a) applicable bankruptcy, insolvency, and other
      similar laws affecting creditors' rights generally, or (b) general equitable
      principles, regardless of whether the issue of enforceability is considered
      in a
      proceeding in equity or at law.

    


    Section
      12. Remedies.
      Lender
      shall not, by any act, delay, omission or otherwise, be deemed to have waived
      any of its rights or remedies under this Guaranty or otherwise. A waiver by
      Lender of any right or remedy hereunder on any one occasion, shall not be
      construed as a ban or waiver of any such right or remedy which Lender would
      have
      had on any future occasion, nor shall Lender be liable for exercising or failing
      to exercise any such right or remedy. The rights and remedies of Lender under
      this Guaranty are cumulative and, as such, are in addition to any other rights
      and remedies available to Lender under law or any other agreements.

    


    Section
      13. Appointment
      as Attorney-in-Fact.
      Guarantor hereby appoints Lender as the attorney-in-fact for Guarantor, with
      full authority in the place and stead of Guarantor and in the name of Guarantor
      or otherwise, to exercise all rights and remedies granted to Lender under this
      Guaranty and to take any action and to execute any instrument which Lender
      may
      deem necessary or advisable to accomplish the purposes of this
      Guaranty.

    


    
      
         

      

      
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    Section
      14. Indemnity
      and Expenses.
      Guarantor hereby indemnifies Lender from and against any and all claims, losses,
      damages and liabilities growing out of or resulting from this Guaranty
      (including, without limitation, enforcement of this Guaranty), except claims,
      losses, damages or liabilities resulting from Lender's gross negligence and
      willful misconduct. 

    Guarantor
      will upon demand pay to Lender the amount of any and all expenses, including
      the
      fees and expenses of its counsel and of any experts and agents, which Lender
      may
      incur in connection with (1) any amendment to this Guaranty, (2) the
      administration of this Guaranty, (3) the exercise or enforcement of any of
      the
      rights of Lender under this Guaranty, or (4) the failure by Guarantor to perform
      or observe any of the provisions of this Guaranty.

    


    Section
      15. Amendments.
      No
      amendment or waiver of any provision of this Guaranty, nor consent to any
      departure by Guarantor from this Guaranty, shall in any event be effective
      unless the same shall be in writing and signed by Guarantor and Lender, and
      then
      such amendment or waiver shall be effective only in the specific instance and
      for the specific purpose for which given.

    


    Section
      16. Addresses
      for Notices.
      All
      notices and other communications provided for under this Guaranty shall be
      in
      writing and, mailed or delivered by messenger or overnight delivery service,
      addressed, in the case of Guarantor at its address specified below its
      signature, and in the case of Lender at the address specified below, or as
      to
      any such party at such other address as shall be designated by such party in
      a
      written notice to the other party complying as to delivery with the terms of
      this Section.

    


    


    If
      to
      Lender:

     

    
      Attention:

    

     

    With
      copies to:

    


     

    


    If
      to
      Guarantor:

     

    Steven
      B.
      Rash

    c/o
      Power3 Medical Products, Inc.

    3400
      Research Forest Drive

    The
      Woodlands, Texas 77381

    Fax
      No.:
      281-466-1481

    


    
      
         

      

      
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    With
      copies to:

    


    Sichenzia
      Ross Friedman Ference LLP

    Attn:
      Darrin M. Ocasio

    61
      Broadway, 32nd
      Fl.

    New
      York,
      New York 10006

    Fax
      No.:
      212-981-6774

    


    All
      such
      notices and other communications shall, when mailed, be effective three (3)
      days
      after being placed in the mails, or when delivered to a messenger or overnight
      delivery service, be effective one (1) day after being delivered to the
      messenger or overnight delivery service, in each case, addressed as specified
      above.

    


    Section
      17. Assignment
      and Transfer of Obligations.
      This
      Guaranty will bind the estate of Guarantor as to Guaranteed Obligations created
      or incurred both before and after the death or incapacity of Guarantor, whether
      or not Lender receives notice of such death or incapacity. This Guaranty shall
      inure to the benefit of Lender and its successors, transferees and assigns.
      Guarantor may not transfer or assign its obligations under this Guaranty. Lender
      may assign or otherwise transfer all or a portion of its rights or obligations
      with respect to the Guaranteed Obligations to any other party, and such other
      party shall then become vested with all the benefits in respect of such
      transferred Guaranteed Obligations granted to Lender in this Guaranty or
      otherwise. Guarantor agrees that Lender can provide information regarding
      Guarantor to any prospective or actual successor, transferee or
      assign.

    


    Section
      18. Setoff.
      Guarantor agrees that, in addition to, and without limiting, any right of
      setoff, Lender’s lien or counterclaim Lender may otherwise have, Lender shall be
      entitled, at its option, to offset balances (general or special, time or demand,
      provisional or final) held by it for the account of Guarantor, at any of the
      offices of Lender, in Dollars or any other currency, against any amount payable
      by Guarantor to Lender under this Guaranty which is not paid when demanded
      (regardless of whether such balances are then due to Guarantor), in which case
      Lender shall promptly notify Guarantor, provided that Lender’s failure to give
      such notice shall not affect the validity of such offset.

    


    Section
      19. Submission
      to Jurisdiction.
      Guarantor hereby irrevocably submits to the jurisdiction of any federal or
      state
      court sitting in New York County in the State of New York over any action or
      proceeding arising out of or related to this Guaranty and agrees with Lender
      that personal jurisdiction over Guarantor rests with such courts for purposes
      of
      any action on or related to this Guaranty. Guarantor hereby waives personal
      service by manual delivery and agrees that service of process may be made by
      prepaid certified mail directed to Guarantor at the address of Guarantor for
      notices under this Guaranty or at such other address as may be designated in
      writing by Guarantor to Lender, and that upon mailing of such process such
      service will be effective as if Guarantor was personally served. Guarantor
      agrees that a final judgment in any such action or proceeding shall be
      conclusive and may be enforced in other jurisdictions by suit on the judgment
      or
      in any manner provided by law. Guarantor further waives any objection to venue
      in any such action or proceeding on the basis of inconvenient forum. Guarantor
      agrees that any action on or proceeding brought against Lender shall only be
      brought in such courts.

    


    
      
         

      

      
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    Section
      20. Governing
      Law.
      This
      Guaranty shall be governed by and construed in accordance with the laws of
      the
      State of New York without regard to its principles of conflicts of
      law.

    


    Section
      21. Subordination.
      Once a
      demand for payment is made on the Guarantor under this Guaranty Guarantor will
      not (1) make any demand for payment of, or take any action to accelerate, any
      obligation owed to Guarantor by Borrower, (2) seek to collect payment of, or
      enforce any right or remedies against Borrower, any of the obligations owed
      to
      Guarantor by Borrower or any guarantees, credit supports, collateral or other
      security related to or supporting any of such obligations, or (3) commence,
      or
      join with any other creditor in commencing, any bankruptcy or similar proceeding
      against Borrower. Guarantor also agrees that the payment of all obligations
      of
      Borrower to Guarantor shall be subordinate and junior in time and right of
      payment in accordance with the terms of this Section to the prior payment in
      full (in cash) of the Guaranteed Obligations. In furtherance of such
      subordination, (1) to the extent possible, Guarantor will not take or receive
      from Borrower any payments, in cash or any other property, by setoff or any
      other means, of any or all of the obligations owed to Guarantor by Borrower,
      or
      purchase, redeem, or otherwise acquire any of such obligations, or change the
      terms or provisions of any such obligations and (2) if for any reason and under
      any circumstance Guarantor receives a payment on such obligation, whether in
      a
      bankruptcy or similar proceeding or otherwise, all such payments or
      distributions upon or with respect to such obligations shall be received in
      trust for the benefit of Lender, shall be segregated from other funds and
      property held by Guarantor and shall be forthwith paid over to Lender in the
      same form as so received (with any necessary endorsement) to be applied (in
      the
      case of cash) to, or held as collateral (in the case of securities or other
      non-cash property) for, the payment or prepayment of the Guaranteed Obligations.
      Guarantor agrees that any subrogation rights Guarantor may acquire as a result
      of a payment under this Section may not be exercised until (1) the payment
      in
      full of the Guaranteed Obligations (after Lender no longer has any obligation
      or
      arrangement to provide credit to Borrower, including under or pursuant to a
      line
      of credit), and (2) the payment of all fees and expenses to be paid by Guarantor
      pursuant to this Guaranty.

    


    Section
      22. Miscellaneous.
      This
      Guaranty is in addition to and not in limitation of any other rights and
      remedies Lender may have by virtue of any other instrument or agreement
      previously, contemporaneously or hereafter executed by Guarantor or any other
      party or by law or otherwise. If any provision of this Guaranty is contrary
      to
      applicable law, such provision shall be deemed ineffective without invalidating
      the remaining provisions of this Guaranty. Titles in this Guaranty are for
      convenience of reference only and shall not affect the interpretation or
      construction of this Guaranty. This Guaranty constitutes the entire agreement
      between Guarantor and Lender with respect to the matters covered by this
      Guaranty and supercedes all written or oral agreements with respect to such
      matters.

    


    Section
      23. WAIVER
      OF JURY TRIAL.
      GUARANTOR EXPRESSLY WAIVES ANY AND EVERY RIGHT TO A TRIAL BY JURY IN ANY ACTION
      ON OR RELATED TO THIS GUARANTY.

    


    IN
      WITNESS WHEREOF, Guarantor has duly executed and delivered this Guaranty as
      of
      the date of this Guaranty.

     

     

    
      	 	___________________________________
	 	
              Steven
                B. Rash

            


    

    


    
      
         

      

      
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