Document:

Exhibit 10.4

 

STOCK
PLEDGE AGREEMENT

 

STOCK PLEDGE AGREEMENT (“Agreement”)
entered into as of the 9th day of December 2005 by and among Trinity
Financing Investments Corporation (the “Secured Party”), and those persons
identified on the signature page hereof (each a “Pledgor”).

 

RECITALS

 

A.                                   Pledgor
have financial and other interests in Power 3 Medical Products, Inc., a
New York corporation (the “Company”), and have agreed to pledge certain shares
of the Company as security for: (i) the payment and performance by the
Company of its obligations under its Promissory note of even date herewith in
an aggregate face amount of $150,000 and 00/100 Dollars ($150,000.00) payable
to the Secured Party (the “Note”)and (ii) the performance by
Pledgor of its  Guaranty delivered to
Secured Party of even date herewith.  Capitalized
terms in this Agreement which are not identified herein will have the meanings
given such terms in the Note.

 

B.                                     The
Secured Party is willing to accept the Note from the Company only upon receiving
Pledgors’ Guaranty and the pledge of certain stock as set forth in this
Agreement.

 

NOW, THEREFORE, in
consideration of the premises, the mutual covenants and conditions contained
herein, and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

1.                                       Grant
of Security Interest.  As security
for the prompt and complete payment and performance (whether at the stated
maturity, by acceleration or otherwise) of all of the Company’s obligations
under the Note (the “Secured obligations”), Pledgors hereby pledge to the
Secured Party as collateral security the securities initially set forth on the
attached Schedule 1 of this Agreement (the “Pledged Shares”).  Unless otherwise set forth on Schedule 1
of this Agreement, each Pledgor is the beneficial and record owner of the
Pledged Shares set forth opposite such Pledgor’s name on such Schedule.  Such Pledged Shares, together with any
additions, replacements, accessions substitutes therefor, or proceeds thereof,
are hereinafter referred to collectively as the “Collateral.”

 

2.                                       Perfection
of Security Interests.  (a) 
Upon execution of this Agreement by each Pledgor, such Pledgor shall deliver
the Pledge Shares, together with Stock Powers (with Medallion Guarantees
annexed).

 

(b)                                 The
Company and The Pledgor will, at its expense, cause to be searched the public
records with respect to the Collateral and will execute, deliver, file and
record (in such manner and form as each Secured Party may require), or permit
each Secured Party to file and record, as its attorney in fact, any financing
statements, any carbon, photographic or other reproduction of a financing
statement or this Agreement (which shall be sufficient as a financing statement
hereunder), any specific assignments or other paper that may be reasonably
necessary or desirable, or that such Secured Party may request, in order to
create, preserve, perfect or validate any Security Interest or to enable such
Secured Party to exercise and enforce its rights hereunder with respect to any
of the Collateral.  The Company and each
of the Pledgors hereby appoints each Secured Party as the Company’s or such
Pledgor’s attorney-in-fact to execute in the name and behalf of the Company or
such Pledgor, as the case may be, such additional financing statements as such
Secured Party may request.

 

3.                                       Assignment.  In connection with the transfer of the Note
in accordance with its terms, a Secured Party may assign or transfer the whole
or any part of its security interest granted hereunder, and may transfer as
collateral security the whole or any part of Secured Party’s security interest
in the Collateral.  Any transferee of the
Collateral shall be vested with all of the rights and powers of Secured Party
hereunder with respect to the Collateral.

 

4.                                       Pledgor
Warranty.  (A) Title.  The Pledgor represents and warrants hereby to
the Secured Party as follows with respect to the Pledged Shares set forth
opposite The Pledgor’s name on Schedule 2 to this Agreement:

 

(i) that the
Collateral is free and clear of any encumbrances of every nature whatsoever,
and such Pledgor is the sole owner of the Pledged Shares;

 

(ii) The Pledgor
agrees not to grant or create, any security interest, claim, lien, pledge or other

 

 

encumbrance with respect to such Collateral or attempt
to sell, transfer or otherwise dispose of the Collateral, until the Secured
Obligations have been paid in full or this Agreement terminates; and

 

(iii)                               this
Agreement constitutes a legal, valid and binding obligation of The Pledgor
enforceable in accordance with its terms (except as the enforcement thereof may
be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium, and similar laws, now or hereafter in effect),

 

B.                                     Other:               (i) Pledgor
has made necessary inquiries of the Company and believes that the Company fully
intends to fulfill and has the capability of fulfilling the Secured Obligations
to be performed by the Company in accordance with the terms of the Notes.

 

(ii)                                  The
Pledgor is not (and none of them is) acting, and have not (and none of them
has) agreed to act, in any plan to sell or dispose of any Shares in a manner
intended to circumvent the registration requirements of the Securities Act of
1933, as amended, or any applicable state law.

 

(iii)                               Pledgor
has been advised by counsel of the elements of a bona-fide pledge for purposes
of Rule 144(d)(3)(iv) under the Securities Act of 1933, as amended,
including the relevant SEC interpretations and affirm the pledge of shares by
each of the undersigned pursuant to this Pledge Agreement will constitute a
bona-fide pledge of such shares for purposes of such Rule.

 

(iv)                              Pledgor
hereby unconditionally personally guarantees to the Secured Party the timely
and full fulfillment of the Secured Obligations of the Company.

 

5. Intentionally omitted

 

6.                                       Collection
of Dividends and Interest.  During
the term of this Agreement for so long as any amounts remain outstanding under
the Note, all dividends, distributions, interest payments, and other amounts
that may be, or may become, due on any of the Collateral, shall be paid to the
Secured Party as a payment or prepayment, as the case may be, of amounts due
under the Note.

 

7.                                       Voting
Rights.  During the term of this
Agreement and until such time as this Agreement has terminated or Secured Party
has exercised its rights under this Agreement to foreclose its security
interest in the Collateral, Pledgors shall have the right to exercise any
voting rights evidenced by, or relating to, the Collateral.

 

8.                                       Warrants
and Options.  In the event that,
during the term of this Agreement, subscription, spin-off, warrants, dividends,
or any other rights or option shall be issued in connection with the
Collateral, such warrants, dividends, rights and options shall be immediately
delivered to Secured Party to be held under the terms hereof in the same manner
as the Collateral.

 

9.                                       Preservation
of the Value of the Collateral. 
Pledgors shall pay all taxes, charges, and assessments against the
Collateral and do all acts necessary to preserve and maintain the value
thereof.

 

10.                                 Secured
Party as Pledgor’s Attorney-in-Fact.

 

(a)                                  Pledgor
hereby irrevocably appoints Secured Party as Pledgor’s attorney-in-fact, with
full authority in the place and stead of Pledgor and in the name of Pledgor,
Secured Party or otherwise, from time to time at Secured Party’s discretion, to
take any action and to execute any instrument that Secured Party may reasonably
deem necessary or advisable to accomplish the purposes of this Agreement,
including: (i) upon the occurrence and during the continuance of an Event
of Default, to receive, indorse, and collect all instruments made payable to
Pledgor representing any dividend, interest payment or other distribution in
respect of the Collateral or any part thereof to the extent permitted hereunder
and to give full discharge for the same and to execute and file governmental
notifications and reporting forms; (ii) to arrange for the transfer of the
Collateral on the books of any of the Company or any other Person to the name
of Secured Party or to the name of Secured Party’s nominee.

 

(b)                                 In
addition to the designation of Secured Party as Pledgor’s attorney-in-fact in
subsection (a), Pledgor hereby irrevocably appoints Secured Party as Pledgor’s
agent and attorney-in-fact to make, execute and deliver any and all documents
and writings which may be necessary or appropriate for approval of, or be
required by, any regulatory authority located in any city, county, state or
country where Pledgor or any of the Company engage in business, in order to
transfer or to more effectively transfer any of the Pledged Interests or
otherwise enforce Secured Party’s rights hereunder.

 

 

11.                                 Remedies
upon Default.

 

Upon the occurrence and
during the continuance of an Event of Default under the Note and/or the
Guaranty “Event of Default”):

 

(a)                                  Secured
Party may exercise in respect of the Collateral, in addition to other rights
and remedies provided for herein or otherwise available to it, all the rights
and remedies of a secured party on default under the Uniform Commercial Code
(the “Code”, irrespective of whether the Code applies to the affected items of
Collateral), and Secured Party may also without notice (except as specified
below) sell the Collateral or any part thereof in one or more parcels at public
or private sale, at any exchange, broker’s board or at any of Secured Party’s
offices or elsewhere, for cash, on credit or for future delivery, at such time
or times and at such price or prices and upon such other terms as Secured Party
may deem commercially reasonable, irrespective of the impact of any such sales
on the market price of the Collateral. To the maximum extent permitted by
applicable law, Secured Party may be the purchaser of any or all of the
Collateral at any such sale and shall be entitled, for the purpose of bidding
and making settlement or payment of the purchase price for all or any portion
of the Collateral sold at any such public sale, to use and apply all or any
part of the Secured Obligations as a credit on account of the purchase price of
any Collateral payable at such sale. Each purchaser at any such sale shall hold
the property sold absolutely free from any claim or right on the part of
Pledgor, and Pledgor hereby waives (to the extent permitted by law) all rights
of redemption, stay, or appraisal that it now has or may at any time in the
future have under any rule of law or statute now existing or hereafter
enacted. Pledgor agrees that, to the extent notice of sale shall be required by
law, at least ten (10) calendar days notice to Pledgor of the time and
place of any public sale or the time after which a private sale is to be made
shall constitute reasonable notification. Secured Party shall not be obligated
to make any sale of Collateral regardless of notice of sale having been given.
Secured Party may adjourn any public or private sale from tme to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned. To
the maximum extent permitted by law, Pledgor hereby waives any claims against
Secured Party arising because the price at which any Collateral may have been
sold at such a private sale was less than the price that might have been
obtained at a public sale, even if Secured Party accepts the first offer
received and does not offer such Collateral to more than one offeree.

 

(b)                                 Pledgor
hereby agrees that any sale or other disposition of the Collateral conducted in
conformity with reasonable commercial practices of banks, insurance companies,
or other financial institutions in the city and state where Secured Party is
located in disposing of property similar to the Collateral shall be deemed to
be commercially reasonable.

 

(c)                                  Pledgor
hereby acknowledges that the sale by Secured Party of any Collateral pursuant
to the terms hereof in compliance with the Securities Act of 1933 as now in
effect or as hereafter amended, or any similar statute hereafter adopted with
similar purpose or effect (the “Securities Act”), as well as applicable “Blue
Sky” or other state securities laws, may require strict limitations as to the
manner in which Secured Party or any subsequent transferee of the Collateral
may dispose thereof. Pledgor acknowledges and agrees that in order to protect
Secured Party’s interest it may be necessary to sell the Collateral at a price
less than the maximum price attainable if a sale were delayed or were made in
another manner, such as a public offering under the Securities Act. Pledgor has
no objection to sale in such a manner and agrees that Secured Party shall have
no obligation to obtain the maximum possible price for the Collateral. Without
limiting the generality of the foregoing, Pledgor agrees that, upon the
occurrence and during the continuation of an Event of Default, Secured Party
may, subject to applicable law, from time to time attempt to sell all or any
part of the Collateral by a private placement, restricting the bidders and
prospective purchasers to those who will represent and agree that they are
purchasing for investment only and not for distribution. In so doing, Secured
Party may solicit offers to buy the Collateral or any part thereof for cash,
from a limited number of investors reasonably believed by Secured Party to be
institutional investors or other accredited investors who might be interested
in purchasing the Collateral. If Secured Party shall solicit such offers, then
the acceptance by Secured Party of one of the offers shall be deemed to be a
commercially reasonable method of disposition of the Collateral.

 

(d)                                 If
Secured Party shall determine to exercise its right to sell all or any portion
of the Collateral pursuant to this Section, Pledgor agrees that, upon request
of Secured Party, Pledgor will, at its own expense:

 

(i)                                     execute
and deliver, or cause the officers and directors of the Company to execute and
deliver, to any person, entity or governmental authority as Secured Party may
choose, any and all documents and writings which, in Secured Party’s reasonable
judgment, may be necessary or appropriate for approval, or be required by, any
regulatory authority located in any city, county, state or country where
Pledgor or the Company

 

 

engage in business, in order to transfer or to more
effectively transfer the Pledged Interests or otherwise enforce Secured Party’s
rights hereunder; and

 

(ii)                                  do
or cause to be done all such other acts and things as may be necessary to make
such sale of the Collateral or any part thereof valid and binding and in
compliance with applicable law; and

 

(iii)                               cause
the Company to timely file all periodic reports required to be filed by the
Company under the Securities Exchange Act of 1934.

 

12.                                 (a)Term
of Agreement.  This Agreement shall
continue in full force and effect until the indefeasible payment in full of the
Note.  Upon the indefeasible payment in
full of the Note is paid in full, the security interests in the relevant
Collateral shall be deemed released, and any portion of the Collateral not
transferred to or sold by any one or more Secured Parties shall be returned to
the Pledgor (and for such purpose, delivery to Darrin Ocasio, Esq., of
Sichenzia Ross Friedman Ference LLP of New York, NY shall deemed to comply with
such return requirement).  Upon
termination of this Pledge Agreement, the relevant Collateral shall be returned
within five (5) Trading Days to Debtor or to the Pledgor, as contemplated
above.

 

(b) Application
of Proceeds.  Upon the occurrence and
during the continuance of an Event of Default, any cash held by Secured Party
as Collateral and all cash Proceeds received by Secured Party in respect of any
sale of, collection from, or other realization upon all or any part of the
Collateral pursuant to the exercise by Secured Party of its remedies as a
secured creditor as provided in Section 9 shall be applied from time to
time by the Secured Part as provided in the Note.

 

13.                                 Duties
of Secured Party.

 

The powers conferred on
Secured Party hereunder are solely to protect its interests in the Collateral
and shall not impose on it any duty to exercise such powers. Except as provided
in Section 9-207 of the Code, Secured Party shall have no duty with
respect to the Collateral or any responsibility for taking any necessary steps
to preserve rights against any Persons with respect to any Collateral.

 

14.                                 Amendments;
etc.

 

No amendment or waiver of
any provision of this Agreement nor consent to any departure by Pledgor
herefrom shall in any event be effective unless the same shall be in writing
and signed by Secured Party, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given. No
failure on the part of Secured Party to exercise, and no delay in exercising
any right under this Agreement, any other Credit Document, or otherwise with
respect to any of the Secured Obligations, shall operate as a waiver thereof;
nor shall any single or partial exercise of any right under this Agreement, any
other Credit Document, or otherwise with respect to any of the Secured
Obligations preclude any other or further exercise thereof or the exercise of
any other right. The remedies provided for in this Agreement or otherwise with
respect to any of the Secured Obligations are cumulative and not exclusive of
any remedies provided by law.

 

15.                                 Notices.

 

Unless otherwise
specifically provided herein, all notices shall be in writing addressed to the
respective party as set forth below: and may be personally served, faxed,
telecopied or sent by overnight courier service or United States mail:

 

If to Pledgor:

 

Ira Goldknopf

c/o Power3 Medical
Products, Inc.

3400 Research Forest
Drive

The Woodlands, Texas
77381

Fax No.:  281-466-1481

 

with a copy to:

 

Sichenzia Ross Friedman
Ference LLP

 

 

1065 Avenue of the
Americas

New York, NY 10018

Fax No.:     212-930-9725

Attn:                    Darrin
M. Ocasio, Esq.

 

If to Secured Party:

 

Trinity Financing
Investments Corporation

300 East 55th
Street

Apt. 14 D

New York, New York 10022

Fax No.: 212 755 9309

Attn:  Trinity Bul

 

with a copy to:

 

Eaton & Van
Winkle

3 Park Avenue

New York, New York 10016

Fax. No. 212 779
9928

Attn: Vincent J. McGill, Esq.

 

Any notice given pursuant to this section shall
be deemed to have been given: (a) if delivered in person, when delivered; (b) if
delivered by fax, on the date of transmission if transmitted on a Business Day
before 4:00 p.m. at the place of receipt or, if not, on the next
succeeding Business Day; (c) if delivered by overnight courier, two (2) days
after delivery to such courier properly addressed; or (d) if by United States
mail, four (4) Business Days after depositing in the United States mail,
with postage prepaid and properly addressed. Any party hereto may change the
address or fax number at which it is to receive notices hereunder by notice to
the other party in writing in the foregoing manner.

 

16.                                 Continuing
Security Interest.

 

This Agreement shall
create a continuing security interest in the Collateral and shall: (a) remain
in full force and effect until the indefeasible payment in full of the Secured
Obligations; (b) be binding upon Pledgor and its successors and assigns;
and (c) inure to the benefit of Secured Party and its successors,
transferees, and assigns. Upon the indefeasible payment in full of the Secured
Obligations; the security interests granted herein shall automatically
terminate and all rights to the Collateral shall revert to Pledgor. Upon any
such termination, Secured Party will, at Pledgor’s expense, execute and deliver
to Pledgor such documents as Pledgor shall reasonably request to evidence such
termination. Such documents shall be prepared by Pledgor and shall be in form
and substance reasonably satisfactory to Secured Party.

 

17.                                 Security
Interest Absolute.

 

To the maximum extent
permitted by law, all rights of Secured Party, all security interests
hereunder, and all obligations of Pledgor hereunder, shall be absolute and
unconditional irrespective of:

 

(a)                                  any
lack of validity or enforceability of any of the Secured Obligations or any
other agreement or instrument relating thereto;

 

(b)                                 any
change in the time, manner, or place of payment of, or in any other term of,
all or any of the Secured Obligations, or any other amendment or waiver of or
any consent to any departure from any of the terms of the Note, or any other
agreement or instrument relating thereto;

 

(c)                                  any
exchange, release, or non-perfection of any other collateral, or any release or
amendment or waiver of or consent to departure from any guaranty for all or any
of the Secured Obligations; or

 

(d)                                 any
other circumstances that might otherwise constitute a defense available to, or
a discharge of, Pledgor.

 

18.                                 Headings.

 

 

Section and subsection headings
in this Agreement are included herein for convenience of reference only and
shall not constitute a part of this Agreement or be given any substantive
effect.

 

19.                                 Severability.

 

In case any provision in
or obligation under this Agreement shall be invalid, illegal or unenforceable
in any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

 

20.                                 Counterparts;
Telefacsimile Execution.

 

This Agreement may be
executed in one or more counterparts, each of which shall be deemed an original
and all of which together shall constitute one and the same Agreement. Delivery
of an executed counterpart of this Agreement by telefacsimile shall be equally
as effective as delivery of an original executed counterpart of this Agreement.
Any party delivering an executed counterpart of this Agreement by telefacsimile
also shall deliver an original executed counterpart of this Agreement but the
failure to deliver an original executed counterpart shall not affect the
validity, enforceability, or binding effect hereof.

 

21.                                 Additional
provisions.

 

(a)                                  THE
VALIDITY OF THIS AGREEMENT, 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 AGREEMENT 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 SECURED PARTY, IN ANY OTHER
COURT IN WHICH SECURED PARTY SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND
WHICH HAS SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY. THE
PLEDGOR HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT HE MAY HAVE
TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR SIMILAR DOCTRINE OR TO OBJECT
TO VENUE WITH RESPECT TO ANY PROCEEDING BROUGHT IN ACCORDANCE WITH THIS SECTION AND
STIPULATES THAT THE STATE AND FEDERAL COURTS LOCATED IN THE CITY AND COUNTY OF
NEW YORK SHALL HAVE IN PERSONAM JURISDICTION AND VENUE OVER HIM FOR THE PURPOSE
OF LITIGATING ANY DISPUTE, CONTROVERSY OR PROCEEDING ARISING OUT OF OR RELATED
TO THIS AGREEMENT.

 

(b)                                 PLEDGOR
HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT, OR OTHER PROCESS
ISSUED IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT
AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT, OR OTHER PROCESS MAY BE
MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO PLEDGOR AT HIS ADDRESS
PROVIDED HEREIN.

 

(c)                                  NOTHING
IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO AFFECT THE RIGHT OF SECURED
PARTY TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW, OR TO
PRECLUDE THE ENFORCEMENT BY SECURED PARTY 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.

 

(d)                                 PLEDGOR SHALL REIMBURSE SECURED PARTY FOR ALL
REASONABLE COSTS AND EXPENSES, INCLUDING WITHOUT LIMITATION REASONABLE
ATTORNEYS’ FEES AND COSTS, INCURRED IN CONNECTION WITH (I) DRAFTING,
NEGOTIATING, EXECUTING AND DELIVERING ANY AMENDMENT, MODIFICATION OR WAIVER OF,
OR CONSENT WITH RESPECT TO, ANY MATTER ELATING TO THE RIGHTS OF SECURED PARTY
HEREUNDER AND (II) ENFORCING ANY PROVISIONS OF THIS AGREEMENT AND/OR REALIZING
UPON ANY COLLATERAL.

 

 

The rights and remedies
herein reserved to any party shall be cumulative and in addition to any other
or further rights and remedies available at law or in equity. Any waiver by the Pledgor or the Secured
Party of a breach of any provision of this Agreement 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 Agreement. 
The failure of the Secured Party to insist upon strict adherence to any
term of this Agreement 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 Agreement.  Any waiver must be in writing.

 

PLEDGOR HEREBY WAIVES
HIS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT. THE PLEDGOR REPRESENTS THAT HE 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.

 

Successors and Assigns. All
of the terms and provisions of this Agreement shall be binding upon and inure
to the benefits of the parties hereto and their respective successors, heirs
and permitted assigns.

 

IN WITNESS WHEREOF,
Pledgor and Secured Party have caused this Agreement to be duly executed and
delivered by their officers thereunto duly authorized as of the date first
written above.

 

 

	
   

  	
  IRA GOLDKNOPF

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /s/  Ira L.
  Goldknopf

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TRINITY FINANCING INVESTMENTS CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /s/:  Trinity
  Bui

  	
   

  
	
   

  	
  Title:

  	
     President 

  	
   

  
							

 

 

Schedule 1

 

Pledged Interests: 3,000,000 shares of common stock of
Power3 Medical Products, Inc.

 

Name of Issuer: Power3 Medical Products, Inc

 

Jurisdiction of Organization: New York
                                                                                                             

 

Type of Interest: Share of common stock

 

Number of Shares/Units (if applicable):  1,000,000

 

Certificate Number(s) (if any)                

 

Percentage of Outstanding Interests in Issuer:
approximately

 

Additional Collateral as Set forth in Section 1.

 

Schedule 2

 

Pledgor Information:

 

For Pledgor That Is a Registered Organization

Jurisdiction of Organization:                                                                                                               

 

Type of Organization:                                                                                                                          

 

Organizational ID Number (if any):                                                                                                     

 

For Pledgor That Is An Individual:     Steven
B. Rash
                                                                                          

 

Address of Principal Residence:
     See Notice section
                                                                                                

 

For Pledgor That Is Neither a Registered Organization
nor an Individual:

 

Type of Organization:                                                                                                                          

 

 

Schedule 1

 

Pledged Interests: 3,000,000 shares of common stock of
Power3 Medical Products, Inc.

 

Name of Issuer: Power3 Medical Products, Inc

 

Jurisdiction of Organization: New York
                                                                                                              

 

Type of Interest: Share of common stock

 

Number of Shares/Units (if applicable):  1,000,000

 

Certificate Number(s) (if any)                   

 

Percentage of Outstanding Interests in Issuer:
approximately

 

Additional Collateral as Set forth in Section 1.

 

Schedule 2

 

Pledgor Information:

 

For Pledgor That Is a Registered Organization

Jurisdiction of Organization:                                                                                                               

 

Type of Organization:                                                                                                                           

 

Organizational ID Number (if any):                                                                                                      

 

For Pledgor That Is An Individual:    Ira
Goldknopf                                                                                               

 

Address of Principal Residence:     See
Notice section                                                                                                         

 

For Pledgor That Is Neither a Registered Organization
nor an Individual:

 

Type of Organization:Exhibit 4.2

 

CUSIP No.:

 

113⁄4% SENIOR PAY IN KIND NOTES DUE 2012

 

	
  No.

  	
   

  	
  $

  

 

FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED, AND THE RULES AND REGULATIONS
THEREUNDER, THIS NOTE IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT; FOR EACH
$1,000 PRINCIPAL AMOUNT OF THIS NOTE, (1) THE ISSUE PRICE IS $1,000; (2) THE
ISSUE DATE IS JULY 19, 2005; AND (3) THE YIELD TO MATURITY IS 13.155%
(COMPOUNDED SEMI-ANNUALLY).  PLEASE
CONTACT DAVID F. MYERS, JR., EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL OFFICER
AND SECRETARY OF THE COMPANY, AT (630) 572-8518 IF YOU WOULD LIKE INFORMATION
RELATING TO THE AMOUNT OF THE ORIGINAL ISSUE DISCOUNT.

 

SAFETY PRODUCTS HOLDINGS, INC., a Delaware corporation
(the “Company”, which term includes any successor entity), for value
received promises to pay to CEDE & CO. or registered assigns, the sum
indicated on Schedule A hereof on January 1, 2012.

 

Interest Payment Dates:  January 1 and July 1, commencing January 1,
2006.

 

Record Dates:  June 15
and December 15.

 

Reference is made to the further provisions of this
Note contained herein and the Indenture (as defined), which will for all
purposes have the same effect as if set forth at this place.

 

 

IN WITNESS WHEREOF, the Company has caused this Note
to be signed manually or by facsimile by its duly authorized officers.

 

	
   

  	
  SAFETY PRODUCTS
  HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

Certificate of Authentication

 

This is one of the 113⁄4% Senior Pay in Kind Notes due 2012
referred to in the within-mentioned Indenture.

 

 

	
   

  	
  WILMINGTON TRUST
  COMPANY,

  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  

 

 

(REVERSE OF SECURITY)

 

113⁄4% SENIOR PAY IN KIND NOTE DUE 2012

 

1.             Interest.  Safety Products Holdings, Inc., a
Delaware corporation (the “Company”) and successor to the obligations of
NSP Holdings L.L.C. (“Holdings”) under the Indenture, promises to pay
interest on the principal amount of this Note at the rate per annum
shown above.  Interest on the Notes will
accrue from the most recent date on which interest has been paid or, if no
interest has been paid, from the date of the original issuance of the
Notes.  The Company will pay interest
semi-annually in arrears on each Interest Payment Date, commencing January 1,
2006.  Interest on the Notes will accrue
from July 1, 2005, the most recent date to which interest was paid on the
Notes issued under the Indenture on January 7, 2005 (the “Existing
Notes”).  Interest will be computed
on the basis of a 360-day year of twelve 30-day months.  Through and including the interest payment
date of January 1, 2010, accrued interest on all notes then outstanding
will be payable, at the Company’s option, in cash or in the form of additional
notes (when issued in payment of interest or Additional Interest, “PIK Notes”).  On and after the interest payment to be made
on July 1, 2010, accrued interest will be payable solely in cash.  The PIK Notes will be identical to the
originally issued Notes, except that interest will begin to accrue from the date
they are issued rather than the Issue Date.

 

The Notes will be issued in denominations of $1,000
and integral multiples of $1,000; provided, however, that PIK Notes will be issued in denominations of
$1.00 and integral multiples of $1.00.

 

2.             Method
of Payment.  The Company shall pay
interest on the Notes (except defaulted interest) to the Persons who are the
registered Holders at the close of business on June 15 or December 15
immediately preceding the Interest Payment Date (whether or not such day is a Business
Day) even if the Notes are cancelled on registration of transfer or
registration of exchange after such Record Date.  Holders must surrender Notes to a Paying
Agent to collect principal payments. 
Payments of principal and premium, if any, will be made (on presentation
of such Notes if in certificated form) in money of the United States that at
the time of payment is legal tender for payment of public and private debts; provided, however, that
the Company may pay principal, premium, if any, and interest (other than
interest payable in PIK Notes) by check payable in such money.  The Company may deliver any such interest
payment to the Paying Agent or to a Holder at the Holder’s registered address.

 

3.             Paying
Agent and Registrar.  Initially, Wilmington
Trust Company, a Delaware banking corporation (the “Trustee”), will act
as Paying Agent and Registrar.  The Company
may change any Paying Agent, Registrar or co-Registrar without notice to the
Holders.  The Company or any of its
Subsidiaries may act as Paying Agent or Registrar.

 

4.             Indenture.  The Company issued this Note under an
Indenture, dated as of January 7, 2005 (as amended by a First Supplemental
Indenture, dated as of July 19, 2005 and a Second Supplemental Indenture
dated as of July 19, 2005, the “Indenture”), by and among Holdings,
NSP Holdings Capital Corp. and the Trustee. 
This Note is one of a duly authorized issue of Additional Notes of the Company
designated as its 113⁄4% Senior Pay in Kind Notes due 2012 (the “Notes”).  The Notes include the Initial Notes, the
Additional Notes and the Exchange Notes (as defined below) issued in exchange
for the Initial Notes and Additional Notes pursuant to the Indenture.  The Initial Notes, the Additional Notes and
the Exchange Notes are treated as a single class of securities under the
Indenture.  Capitalized terms herein are
used as defined in the Indenture unless otherwise defined herein.  The terms of the Notes include those stated
in the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) (the “TIA”),
as in effect on the date of the Indenture. 
Notwithstanding anything to the contrary herein, the Notes are subject
to all such terms, and Holders are referred to the Indenture and the TIA for a
statement of them.  The Notes are general
unsecured obligations of the Company.

 

5.             Redemption.

 

(a)           Optional
Redemption with Make Whole Payment. 
At any time prior to July 1, 2006, the notes may be redeemed in
whole or in part at the option of the Company, upon not less than 30 or more
than 60

 

 

days’
prior notice, at a redemption price equal to 100% of the principal amount
thereof, plus the Make Whole Premium and any accrued and unpaid interest
thereon to the applicable redemption date.

 

(b)           Optional
Redemption.  The Company may redeem
the Notes, at its option, in whole at any time or in part from time to time, on
and after July 1, 2006 at the following Redemption Prices (expressed as
percentages of the principal amount thereof) if redeemed during the periods set
forth below, plus, in each case, accrued and unpaid interest thereon, if any,
to the date of redemption.

 

	
  Year

  	
   

  	
  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  July 1, 2006 - June 30, 2007

  	
   

  	
  112.5

  	
  %

  
	
  July 1, 2007 - June 30, 2008

  	
   

  	
  105

  	
  %

  
	
  July 1, 2008 - June 30, 2009

  	
   

  	
  103

  	
  %

  
	
  Thereafter

  	
   

  	
  100

  	
  %

  

 

(c)           Optional
Redemption upon Equity Offerings. 
Notwithstanding the foregoing, the Company may redeem in the aggregate
up to 35% of the principal amount of Notes at any time and from time to time
prior to July 1, 2006 at a Redemption Price equal to 111.75% of the
aggregate principal amount so redeemed, plus accrued and unpaid interest in
cash, if any, to the Redemption Date out of the Net Proceeds of one or more
Equity Offerings; provided that

 

(1)           at
least 65% of the principal amount of Notes originally issued remains
outstanding immediately after the occurrence of any such redemption and

 

(2)           any
such redemption occurs within 90 days following the closing of such Equity Offering.

 

(d)           Mandatory
Partial Redemption.  On July 1,
2010, if any notes are outstanding, the Company will be required to redeem, at
a redemption price of 100% of the principal amount of the notes so redeemed, a
principal amount of notes (the “Mandatory Principal Redemption Amount”)
sufficient (but not in excess of the
amount sufficient) to
ensure that the notes are not treated under the Code as “Applicable High Yield
Discount Obligations” for the ongoing deductibility of interest by the Company.
The Mandatory Principal Redemption Amount will be calculated as (i) the
excess of (A) the aggregate
principal amount of all notes outstanding on July 1, 2010, over (B) the issue price (determined pursuant
to Treasury Regulation Section 1.1273-2(a)(i)) of all notes issued or
deemed issued (as a result of the deemed exchange for U.S. federal income tax
purposes of notes outstanding immediately prior to the date of closing of the
2005 Sale Transaction (the “Effective Date”) for new notes on the Effective
Date, and assuming for this purpose that all holders consented to the
amendments and waivers to the Indenture proposed in connection with the 2005
Sale Transaction (“Proposed Amendments and Waivers”)), less (ii) an
amount equal to one year’s simple uncompounded interest (determined using the stated interest rate on the notes) on the aggregate
issue price (determined pursuant to Treasury Regulation Section 1.1273-2(a)(i),
and assuming for this purpose that all holders consent to the Proposed Amendments
and Waivers) of all notes, other than PIK Notes issued subsequent to the Effective Date. The
Mandatory Principal Redemption Amount will be applied as a partial redemption
of each note outstanding.

 

6.             Notice
of Redemption.  Notice of redemption
under paragraphs 5(a), (b), (c) and (d) of this Note will be mailed
at least 30 days but not more than 60 days before the Redemption Date to each
Holder to be redeemed at such Holder’s registered address.

 

Except as set forth in the Indenture, if monies for
the redemption of the Notes called for redemption shall have been deposited with
the Paying Agent for redemption on such Redemption Date, then, unless the Company
defaults in the payment of such Redemption Price plus accrued interest, if any,
the Notes called for redemption will cease to bear interest from and after such
Redemption Date and the only right of the Holders of such Notes will be to
receive payment of the Redemption Price plus accrued interest, if any.

 

 

7.             Offers
to Purchase.  The Indenture provides
that, after certain Asset Sales (as defined in the Indenture) and upon the
occurrence of a Change of Control (as defined in the Indenture), and subject to
further limitations contained therein, the Company will make an offer to
purchase certain amounts of the Notes in accordance with the procedures set
forth in the Indenture.

 

8.             Denominations;
Transfer; Exchange.  The Notes are in
registered form, without coupons, in denominations of $1,000 and integral
multiples thereof, provided, however,
that the PIK Notes will be issued in denominations of $1.00 and integral
multiples of $1.00.  A Holder shall
register the transfer or exchange of Notes in accordance with the
Indenture.  The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay certain transfer taxes or similar governmental charges
payable in connection therewith as permitted by the Indenture.  The Registrar need not register the transfer
of or exchange of any Notes or portions thereof selected for redemption.

 

9.             Persons
Deemed Owners.  The registered holder
of a Note shall be treated as the owner of it for all purposes.

 

10.           Unclaimed
Money.  If money for the payment of
principal or interest remains unclaimed for two years, the Trustee and the
Paying Agent will pay the money back to the Company.  After that, Holders entitled to money must
look to the Company for payment as general creditors unless an “abandoned
property” law designates another person.

 

11.           Legal
Defeasance and Covenant Defeasance. 
If the Company at any time deposits with the Trustee U.S. legal tender
or U.S. Government Obligations sufficient to pay the principal of and interest
on the Notes to redemption or maturity and complies with the other provisions
of the Indenture relating to defeasance, the Company will be discharged from
certain provisions of the Indenture and the Notes (including certain covenants,
but excluding its obligation to pay the principal of and interest on the
Notes).

 

12.           Amendments,
Supplements, and Waivers.  Subject to
certain exceptions, the Indenture or the Notes may be amended or supplemented
with the written consent of the Holders of at least a majority in aggregate
principal amount of the Notes  then
outstanding, and any existing Default or Event of Default or noncompliance with
any provision may be waived with the written consent of the Holders of a
majority in aggregate principal amount of the Notes then outstanding.  Without notice to or consent of any Holder,
the parties thereto may amend or supplement the Indenture or the Notes to,
among other things, cure any ambiguity, defect or inconsistency, provide for
uncertificated Notes in addition to or in place of certificated Notes or make
any other change that does not adversely affect in any material respect the
rights of any Holder.

 

13.           Restrictive
Covenants.  The Indenture imposes
certain limitations on the ability of the Company and its Subsidiaries to,
among other things, incur additional Indebtedness, make payments in respect of
its Capital Stock, enter into transactions with Affiliates, create dividend or
other payment restrictions affecting Restricted Subsidiaries, sell assets,
create liens, issue capital stock, enter into sale and lease-back transactions,
make certain Investments, merge or consolidate with any other Person, or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially
all of its assets.  Such limitations are
subject to a number of important qualifications and exceptions.  The Company must annually report to the
Trustee on compliance with such limitations.

 

14.           Successor
Entity.  When a successor entity
assumes, in accordance with the Indenture, all the obligations of its
predecessor under the Notes and the Indenture, and immediately before and
thereafter no Default or Event of Default exists and certain other conditions are
satisfied, the predecessor entity will be released from those obligations.

 

15.           Defaults
and Remedies.  Events of Default are
set forth in the Indenture.  If an Event
of Default (other than an Event of Default pursuant to Section 6.01(f) or
(g) of the Indenture) shall have occurred and be continuing, then the
Trustee or the Holders of not less than 25% in aggregate principal amount of
the Notes then outstanding, may declare to be immediately due and payable the
entire principal amount of all the Notes then outstanding plus accrued interest
to the date of acceleration; provided, however, that after such acceleration but before a judgment
or decree based on such acceleration is obtained by the Trustee, the Holders of
a majority in aggregate principal amount of the outstanding Notes may rescind
and annul such acceleration and its consequences if all existing

 

 

Events
of Default, other than the nonpayment of principal, premium, if any, or
interest that has become due solely because of the acceleration, have been
cured or waived. No such rescission shall affect any subsequent Default or
impair any right consequent thereto.  In
case an Event of Default specified in Section 6.01(f) or (g) of
the Indenture occurs, such principal amount, together with premium, if any, and
interest with respect to all of the Notes, shall be due and payable immediately
without any declaration or other act on the part of the Trustee or the Holders.  The Trustee is not obligated to enforce the
Indenture or the Notes unless it has received indemnity reasonably satisfactory
to it.

 

16.           Trustee
Dealings with Company.  The Trustee
under the Indenture, in its individual or any other capacity, may make loans
to, accept deposits from, and perform services for the Company, and may otherwise
deal with the Company, its Subsidiaries or their respective Affiliates as if it
were not the Trustee.

 

17.           No
Recourse Against Others.  As more
fully described in the Indenture, no director, officer, employee, stockholder
or incorporator, as such, of the Company shall have any liability for any
obligation of the Company under the Notes or the Indenture or for any claim
based on, in respect of or by reason of such obligations or their
creation.  Each Holder by accepting a
Note waives and releases all such liability. 
Such waiver and release are part of the consideration for the issuance
of the Notes.

 

18.           Authentication.  This Note shall not be valid until the
Trustee or Authenticating Agent manually signs the certificate of
authentication on this Note.

 

19.           Governing
Law.  THIS NOTE
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW
YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.  EACH OF THE PARTIES TO THE INDENTURE HAS
AGREED TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE.

 

20.           Abbreviations
and Defined Terms.  Customary
abbreviations may be used in the name of a Holder or an assignee, such as:  TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).

 

21.           CUSIP
Numbers.  Pursuant to a
recommendation promulgated by the Committee on Uniform Security Identification
Procedures, the Company has caused CUSIP numbers to be printed on the Notes as
a convenience to the Holders.  No
representation is made as to the accuracy of such numbers as printed on the
Notes and reliance may be placed only on the other identification numbers
printed hereon.

 

22.           Indenture.  Each Holder, by accepting a Note, agrees to
be bound by all of the terms and provisions of the Indenture, as the same may
be amended from time to time.

 

The Company will furnish to any Holder upon written
request and without charge a copy of the Indenture which has the text of this
Note in larger type.  Requests may be
made to:  c/o Norcross Safety Products L.L.C., 2001 Spring Road, Suite 425,
Oak Brook, Illinois 60523, Attention: 
Chief Financial Officer.

 

 

SCHEDULE A

 

SCHEDULE OF
PRINCIPAL AMOUNT

 

The initial principal
amount at maturity of this Note shall be $                 .
The following decreases/increases in the principal amount at maturity of this
Note have been made:

 

	
  Date of Increase/

  Decrease

  	
   

  	
  Decrease in

  Principal Amount at

  Maturity

  	
   

  	
  Increase in Principal

  Amount at Maturity

  	
   

  	
  Total Principal

  Amount at Maturity

  Following such

  Increase/ Decrease

  	
   

  	
  Notation Made by or

  on Behalf of Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

ASSIGNMENT FORM

 

If you the Holder want to assign this Note, fill in
the form below and have your signature guaranteed:

 

	
  I or we assign and transfer this Note to:

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  (Print or type
  name, address and zip code and

  
	
  social security
  or tax ID number of assignee)

  

 

 

and irrevocably appoint
                                                                                                                                                                         ,
agent to transfer this Note on the books of the Company.  The agent may substitute another to act for
him.

 

	
  Date:

  	
   

  	
   

  	
  Signed:

  	
   

  	
   

  
	
   

  	
   

  	
  (Sign exactly as
  your name appears on the other side of this Note)

  
							

 

 

	
  Medallion
  Guarantee:

  	
   

  	
   

  

 

 

[OPTION OF HOLDER TO ELECT PURCHASE]

 

If you want to elect to have this Note purchased by
the Company pursuant to Section 4.13 or Section 4.16 of the
Indenture, check the appropriate box:

 

Section 4.13 o

 

Section 4.16 o

 

If you want to elect to have only part of this Note
purchased by the Company pursuant to Section 4.13 or Section 4.16 of
the Indenture, state the amount you elect to have purchased:

 

	
  $

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  NOTICE: The
  signature on this assignment must correspond with the name as it appears upon
  the face of the within Note in every particular without alteration or
  enlargement or any change whatsoever and be guaranteed by the endorser’s bank
  or broker.

  
	
   

  	
   

  
	
   

  	
   

  
	
  Medallion
  Guarantee:

  	
   

  	
   

  
									

 

2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00095-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00095-of-00352.parquet"}]]