Document:

Exhibit 10.2

 

UNCONDITIONAL AND CONTINUING GUARANTY

 

WHEREAS,
the undersigned, Ira Goldknopf (individually, a “Guarantor,” ), 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 Guarantor 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,
The Guarantor 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, the Guarantor
hereby covenants and agrees as follows:

 

1.                                       Guaranty.  The 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, the 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 the Guarantor), in immediately available
funds.

 

3.                                       Obligation
of Guarantor Unconditional.  The 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 the 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 Guarantor will not be discharged except by complete and final
payment and performance of the Obligations.

 

(d)                                 The
liability of the 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.

 

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

 

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

 

5.                                       Waivers.  The 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.                                       Subordination.
The Guarantor further agrees with Lender that all of the present and future
indebtedness of Borrower to such Guarantor, other than salary, expenses
reimbursements and other amounts due pursuant to such guarantor’s Employment
Agreement with the Borrower, shall be and hereby is subordinated to the
Obligations.

 

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.

 

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9.                                       Consent
to Jurisdiction; Waiver of Jury Trial. 
The 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 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 the 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 the 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 New York 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.

 

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(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 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 the Guarantor
shall be deemed to be a waiver of the obligation of the 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 the 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.

 

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IN
WITNESS WHEREOF, each Guarantor has executed and delivered this Guaranty as of
the 9th day of December, 2005.

 

WITNESS:

 

	
  /s/: Steven B. Rash

  	
   

  	
  /s/: Ira L. Goldknopf

  	
   

  
	
   

  	
   

  	
  Ira Goldknopf

  

 

6Exhibit 10.3

 

THIS
WARRANT HAS BEEN, AND THE SHARES OF COMMON STOCK WHICH MAY BE PURCHASED
PURSUANT TO THE EXERCISE OF THIS WARRANT (THE “SHARES”) WILL BE, ACQUIRED
SOLELY FOR INVESTMENT AND NOT WITH A VIEW TO, OR FOR RESALE IN CONNECTION WITH,
ANY DISTRIBUTION THEREOF.  NEITHER THIS
WARRANT NOR THE SHARES (TOGETHER, THE “SECURITIES”) HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES
LAWS.  SUCH SECURITIES MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF SUCH
REGISTRATION OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS
COUNSEL THAT SUCH DISPOSITION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
DELIVERY REQUIREMENTS OF THE ACT AND OF ANY APPLICABLE STATE SECURITIES LAWS.

 

POWER 3 MEDICAL PRODUCTS, INC.

 

WARRANTS FOR THE PURCHASE OF SHARES OF COMMON
STOCK

 

December 9, 2005

 

THIS CERTIFIES THAT, for value received, Trinity
Financing Investments Corporation or its registered assigns (the “Holder”) is
entitled to subscribe for and purchase from POWER 3 MEDICAL PRODUCTS, INC. (the
“Company”), up to one million (1,000,000) shares of the fully paid and
nonassessable Common Stock, (the “Shares”), of the Company at the price of
fourteen cents ($.14) per share (the “Exercise Price”) as provided herein,
subject to the provisions and upon the terms and conditions hereinafter set
forth.

 

This Warrant is subject to the following terms and
conditions:

 

1.                                       TERM AND VESTING.

 

(a)                                  TERM. 
Subject to vesting requirements set forth in Paragraph “b” of this Article ”1”
of this Warrant, this Warrant is exercisable, in whole or in part, any time
from and after the date of issuance of this Warrant and prior to expiration of eight
years following the date of issuance of this Warrant.  

 

(b)                                 VESTING. 
The right to purchase the Shares hereunder shall vest and become
exercisable as follows: 100% of the Shares subject to this Warrant are
immediately vested.

 

2.                                       METHOD OF EXERCISE; PAYMENT.

 

(a)                                  CASH EXERCISE.  The purchase rights represented by this Warrant
may be exercised by the Holder, in whole or in part, from time to time at the
principal office of the Company, by delivering a completed and duly executed
Notice of Exercise (attached hereto as Exhibit ”A”) and by the payment to
the Company of an amount equal to the Exercise Price multiplied by the number
of the Shares being purchased, which amount may be paid, at the

 

1

 

election
of the Holder, by wire transfer or check payable to the order of the Company.  The person or persons in whose name(s) any
certificate(s) representing Shares shall be issuable upon exercise of this
Warrant shall be deemed to have become the holder(s) of record of, and shall be
treated for all purposes as the record holder(s) of, the Shares represented
thereby (and such Shares shall be deemed to have been issued) immediately prior
to the close of business on the date or dates upon which this Warrant is
exercised.

 

(b)                                 STOCK CERTIFICATES.  In the event of any exercise of the rights
represented by this Warrant, certificates for the shares of Common Stock so
purchased shall be delivered to the Holder within seven (7) business days
after said exercise and, unless this Warrant has been fully exercised or has
expired, a new Warrant representing the shares with respect to which this
Warrant shall not have been exercised shall also be issued to the Holder within
such time.  Failure to deliver to the
Holder certificates for the shares of Common Stock so purchased within seven (7) business
days after said exercise shall result in a penalty of one thousand dollars
($1,000) per day for each late day.

 

3.                                       STOCK FULLY PAID; RESERVATION OF SHARES.  All of the Shares issuable upon the exercise
of the rights represented by this Warrant will, upon issuance and receipt of
the Exercise Price therefor, be fully paid and nonassessable, and free from all
preemptive rights, rights of first refusal or first offer, taxes, liens and
charges with respect to the issuance thereof. 
During the period within which the rights represented by this Warrant
may be exercised, the Company shall at all times have authorized and reserved
for issuance sufficient shares of its Common Stock to provide for the exercise
of the rights represented by this Warrant.

 

4.                                       ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF
SHARES.  Subject to the provisions of Article ”1”
hereof, the number and kind of Shares purchasable upon the exercise of this
Warrant and the Exercise Price therefor shall be subject to adjustment from
time to time upon the occurrence of certain events, as follows:

 

(a)                                  RECLASSIFICATION, CONSOLIDATION OR
MERGER.  In case of any reclassification
of the Common Stock (other than a change in par value, or as a result of a
subdivision or combination), or in case of any consolidation or merger of the
Company with or into another corporation (other than a consolidation or merger
with another corporation in which the Company is a continuing corporation and
in which the Company’s stockholders immediately preceding such consolidation or
merger own at least 50% of the voting securities of the Company following such
consolidation or merger and which does not result in any reclassification of
the Shares issuable upon exercise of this Warrant), or in case of any sale of
all or substantially all of the assets of the Company, the Company, or such
successor or purchasing corporation as the case may be, shall execute a new
Warrant, providing that the holder of this Warrant shall have the right to
exercise such new Warrant, and procure upon such exercise and payment of the
same aggregate Exercise Price, in lieu of the Shares of Common Stock
theretofore issuable upon exercise of this Warrant, the kind and amount of
shares of stock, other securities, money and property receivable upon such
reclassification, change, consolidation, sale of all or substantially all of
the Company’s assets or merger by a holder of an equivalent number of shares of
Common Stock.  Such new Warrant shall
provide for adjustments that shall be as nearly equivalent as may

 

2

 

be
practicable to the adjustments provided for in this Paragraph “a” of this Article ”4”
of this Warrant.  The provisions of this
Paragraph “a” of this Article ”4” of this Warrant shall similarly apply to
successive reclassifications, consolidations, mergers, sales, leases or
conveyances.

 

(b) STOCK SPLITS, DIVIDENDS AND
COMBINATIONS.  In the event that the
Company shall at any time subdivide the outstanding shares of Common Stock, or
shall issue a stock dividend on its outstanding shares of Common Stock, the
number of Shares issuable upon exercise of this Warrant immediately prior to
such subdivision or to the issuance of such stock dividend shall be
proportionately increased, and the Exercise Price shall be proportionately
decreased, and in the event that the Company shall at any time combine the
outstanding shares of Common Stock, the number of Shares issuable upon exercise
of this Warrant immediately prior to such combination shall be proportionately
decreased, and the Exercise Price shall be proportionately increased, effective
at the close of business on the date of such subdivision, stock dividend or
combination, as the case may be.

 

5.                                       REGISTRATION. 
As more fully provided in Paragraph 13, if the Company shall at
any time seek to register or qualify any of its capital stock or the securities
holdings of any of its controlling shareholders, on each such occasion it shall
include all of the Holder’s shares in such registration or qualification at the
Company’s expense.  The Company shall
keep the registration effective until such time as the Holder has sold its
shares.

 

6.                                       ANTIDILUTION.

 

(a)                                  If, while this Warrant is outstanding, the
Company effects a subdivision of the outstanding Common Stock, the Exercise Price
then in effect shall be proportionately decreased and the number of Shares
issuable upon exercise of this Warrant shall be increased in proportion to such
increase of outstanding Common Stock, and conversely, if, while this Warrant is
outstanding, the Company combines the outstanding Common Stock, the Exercise
Price then in effect shall be proportionately increased and the number of
Shares issuable upon exercise of this Warrant shall be decreased in proportion
to such decrease in outstanding Common Stock. 
Any adjustment under this Article ”6” shall become effective as of
the record date for such event.  For
purposes of this Article, a stock dividend shall be considered a split.

 

(b)                                 All calculations under this Article ”6”
shall be made to the nearest cent or to the nearest one-hundredth of a share,
as the case may be.

 

(c)                                  In any case in which this Article ”6”
shall require that an adjustment in the number of Shares be made effective as
of a record date for a specified event, the Company may elect to defer, until
the occurrence of such event, issuing to the Holder, if the Holder exercised
this Warrant after such record date, the Shares, if any, issuable upon such
exercise over and above the number of Shares issuable upon such exercise on the
basis of the number of shares of Common Stock in effect prior to such
adjustment provided, however, that the Company shall deliver to the Holder a
due bill or other appropriate instrument evidencing the Holder’s right to
receive such additional shares of Common Stock upon the occurrence of the event
requiring such adjustment.

 

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(d)                                 Whenever there shall be an adjustment as
provided in this Article ”6”, the Company shall within fifteen (15) days
thereafter cause written notice thereof to be sent to the Holder pursuant to
Paragraph “c” of Article ”16”, which notice shall be accompanied by an
officer’s certificate setting forth the number of Shares issuable and the
Exercise Price thereof after such adjustment and setting forth a brief
statement of the facts requiring such adjustment and the computation thereof,
which officer’s certificate shall be conclusive evidence of the correctness of
any such adjustment absent manifest error.

 

(e)                                  The Company shall not be required to issue
fractions of shares of Common Stock or other capital stock of the Company upon
the exercise of this Warrant.  If any
fraction of a share of Common Stock would be issuable on the exercise of this
Warrant (or specified portions thereof), the Company shall pay lieu of such
fraction an amount in cash equal to the same fraction of the current market
price on the date of the exercise of this Warrant.

 

(f)                                    No adjustment in the Exercise Price per
Warrant shall be required if such adjustment is less than $.01; provided,
however, that any adjustments which by reason of this Article ”6” are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. 

 

7.                                       NOTICES. 
Upon any adjustment of the Exercise Price and any increase or decrease
in the number of Shares purchasable upon the exercise of this Warrant in
accordance with Article ”4” hereof, then, and in each such case, the
Company, within thirty (30) days thereafter, shall give notice pursuant to
Paragraph “c” of Article ”15” of this Warrant, which notice shall state
the Exercise Price as adjusted and, if applicable, the increased or decreased
number of Shares purchasable upon the exercise of this Warrant, setting forth
in reasonable detail the method of calculation of each.

 

8.                                       CONDITION OF EXERCISE OF WARRANT.

 

(a)                                  Unless exercised pursuant to an effective
registration statement under the Act which includes the Shares so exercised, it
shall be a condition to any exercise of this Warrant that the Company shall
have received, at the time of such exercise, a representation in writing from
the recipient that the Shares being issued upon exercise, are being acquired
for investment and not with a view to any sale or distribution thereof.

 

(b)                                 Each certificate evidencing the Shares issued
upon exercise of this Warrant, shall be stamped or imprinted with a legend
substantially in the following form:

 

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR FOR RESALE IN CONNECTION
WITH, ANY DISTRIBUTION THEREOF, AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY STATE SECURITIES
LAWS.  SUCH SECURITIES MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF SUCH
REGISTRATION OR AN OPINION OF COUNSEL SATISFACTORY TO

 

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THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION
IS NOT REQUIRED UNDER THE ACT.  

 

Subject
to this Article ”8”, the Company may instruct its transfer agent not to
register the transfer of all or a part of this Warrant, or any of the Shares,
unless one of the conditions specified in the above legend is satisfied.

 

9.                                       FRACTIONAL SHARES.  No fractional shares of Common Stock will be
issued in connection with any exercise hereunder, but in lieu of such
fractional shares the Company shall make a cash payment therefor upon the basis
of the Exercise Price then in effect.

 

10.                                 REPRESENTATIONS AND WARRANTIES OF THE
COMPANY.  The Company represents and
warrants to the Holder as follows:

 

(a)                                  This Warrant has been duly authorized and
executed by the Company and is a valid and binding obligation of the Company
enforceable in accordance with its terms;

 

(b)                                 The Shares have been duly authorized and
reserved for issuance by the Company and, when issued in accordance with the
terms hereof, will be validly issued, fully paid and nonassessable;

 

(c)                                  The rights, preferences, privileges and
restrictions granted to or imposed upon the Shares and the holders thereof are
as set forth in the Company’s Certificate of Incorporation, a true and complete
copy of which has been delivered to the original Holder of this Warrant; and

 

(d)                                 The execution and delivery of this Warrant
are not, and the issuance of the Shares upon exercise of this Warrant in accordance
with the terms hereof will not be, inconsistent with the Company’s Certificate
of Incorporation or Bylaws, as amended.

 

11.                                 REPRESENTATIONS AND WARRANTIES BY THE
HOLDER.  The Holder represents and
warrants to the Company as follows:

 

(a)                                  This Warrant is being acquired for its own
account, for investment and not with a view to, or for resale in connection
with, any distribution or public offering thereof within the meaning of the
Act.  Upon exercise of this Warrant, the
Holder shall, if so requested by the Company, confirm in writing, in a form
reasonably satisfactory to the Company, that the Shares issuable upon exercise
of this Warrant are being acquired for investment and not with a view toward
distribution or resale.

 

(b)                                 The Holder understands that the Warrant and
the Shares have not been registered under the Act by reason of their issuance
in a transaction exempt from the registration and prospectus delivery
requirements of the Act pursuant to Section 4(2) thereof, and that
they must be held by the Holder indefinitely, and that the Holder must
therefore bear the economic risk of such investment indefinitely, unless a
subsequent disposition thereof is registered under the Act or is exempted from
such registration.  

 

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(c)                                  The Holder has such knowledge and experience
in financial and business matters that it is capable of evaluating the merits
and risks of the purchase of this Warrant and the Shares purchasable pursuant
to the terms of this Warrant and of protecting its interests in connection
therewith.

 

(d)                                 The Holder is able to bear the economic risk
of the purchase of the Shares pursuant to the terms of this Warrant.

 

12.                                 RIGHTS OF STOCKHOLDERS.  No holder of this Warrant shall be entitled,
as a warrant holder, to vote or receive dividends or be deemed the holder of
Common Stock or any other securities of the Company which may at any time be
issuable on the exercise hereof for any purpose, nor shall anything contained
herein be construed to confer upon the holder of this Warrant, as such, any of
the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action
(whether upon any recapitalization, issuance of stock, reclassification of
stock, change of par value, consolidation, merger, conveyance, or otherwise) or
to receive notice of meetings, or to receive dividends or subscription rights
or otherwise until the Warrant shall have been exercised and the Shares
purchasable upon the exercise hereof shall have become deliverable, as provided
herein.

 

13.                                 REGISTRATION.

 

(a)                                   If
the Company shall at any time seek to register or qualify any of its common
stock or the securities holdings of any of its controlling shareholders, on
each such occasion it shall, without cost or expense, include all of the Holder’s
shares in such registration or qualification. 
The Company shall keep the registration effective until such time as the
Holder has sold its shares or the shares are eligible to be transferred without
restriction pursuant to the provisions of Rule 144(k) which was
promulgated by the Securities and Exchange Commission pursuant to §4(1) of
the Securities Act of 1933, as amended. 
The Company agrees to provide an opinion of counsel with respect to any
sales of the shares by the Holder if such sale is permissible under Rule 144(k).

 

(b)                                  All expenses in connection with preparing and
filing any registration statement under Paragraph “(a)” of this Article ”14”
of this Agreement shall be borne in full by the Company; provided, however,
that the holder shall pay any and all underwriting commissions and expenses and
the fees and expenses of any legal counsel selected by the holder to represent
him with respect to the sale of the Securities.

 

14.                                 OPINIONS. 
The Company agrees that at such time as this Warrant or the Shares may
be sold under Rule 144 it will (i) immediately take all actions
necessary or reasonably requested by Holder so that such persons may sell such
securities under Rule 144 or 144(k), if applicable, including, but not
limited to, delivering or causing to be delivered a legal opinion to the
Company’s transfer agent and (ii) not directly or indirectly take or fail
to take any actions to prevent such sale. 
The Company shall, at its cost, provide the appropriate opinion letters
to be issued by the Company’s counsel in compliance with the provisions of Rule 144
with respect to the transfer or sale of the Shares, if such transfer or sale is
permissible under Rule 144.

 

6

 

Furthermore,
the Company shall notify its transfer agent that Eaton & Van Winkle,
LLP is authorized to issue said opinion letters.

 

15.                                 MISCELLANEOUS.

 

(a)                                  Headings contained in this Warrant are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Warrant.

 

(b)                                  If any provision which is contained in this
Warrant should, for any reason, be held to be invalid or unenforceable in any
respect under the laws of any jurisdiction, such invalidity or unenforceability
shall not affect any other provision of this Warrant and this Warrant shall be
construed as if such invalid or unenforceable provision had not been contained
herein.

 

(c)                                   Any notice or other communication required or
permitted hereunder shall be sufficiently given if sent by (i) mail by (a) certified
mail, postage prepaid, return receipt requested and (b) first class mail,
postage prepaid (ii) overnight delivery with confirmation of delivery or (iii) facsimile
transmission with an original mailed by first class mail, postage prepaid,
addressed as follows:

 

	
  To the Holder:

  	
  Trinity Financing Investments Corporation

  
	
   

  	
  300 East 55th
  Street

  
	
   

  	
  Apt. 14 D

  
	
   

  	
  New York, NY 10022

  
	
   

  	
  Attn: Trinity Bui, President

  
	
   

  	
  Fax No.: (212) 755-9309

  
	
   

  	
   

  
	
  With a copy to:

  	
  Eaton & Van Winkle, LLP

  
	
   

  	
  3Park Avenue

  
	
   

  	
  New York, NY 10016

  
	
   

  	
  Attn: Vincent J. McGill, Esq.

  
	
   

  	
  Fax No.: (212) 779 9928

  
	
   

  	
   

  
	
  To the Company:

  	
  POWER 3 MEDICAL PRODUCTS, INC.

  
	
   

  	
  3400 Research Forest Drive

  
	
   

  	
   The
  Woodlands, Texas 773817000

  
	
   

  	
  Attn: Steven B. Rash

  
	
   

  	
  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.

  

 

or in each case to such
other address and facsimile number as shall have last been furnished by like
notice.  If all of the methods of notice
set forth in this Paragraph “(c)” of this Article of this

 

7

 

Warrant are impossible
for any reason, notice shall be in writing and personally delivered to the
aforesaid addresses.  Each notice or
communication shall be deemed to have been given as of the date so mailed or
delivered as the case may be; provided, however, that any notice sent by
facsimile shall be deemed to have been given as of the date so sent if a copy
thereof is also mailed by first class mail on the date sent by facsimile.  If the date of mailing is not the same as the
date of sending by facsimile, then the date of mailing by first class mail
shall be deemed to be the date upon which notice is given; provided further,
however, that any notice sent by overnight delivery shall be deemed to have
been given as of the date of delivery.

 

(d)                                 This Warrant shall in all respects be
construed, governed, applied and enforced in accordance with the laws of the
State of New York applicable to contracts made and to be performed therein,
without giving effect to the principles of conflicts of law.  The parties hereby consent to and irrevocably
and exclusively submit to personal jurisdiction over each of them by the Courts
of the State of New York in any action or proceeding, irrevocably waive trial
by jury and personal service of any and all process and specifically consent
that in any such action or proceeding, any service of process may be
effectuated upon any of them by certified mail, return receipt requested, in
accordance with Paragraph “(c)” of this Article ”16” of this Warrant.  In the event Trinity Financing commences
legal action to enforce any of the terms of this Agreement, the Company shall
pay all legal fees and costs incurred by Trinity Financing with respect to this
Agreement.

 

(e)                                  Each of the parties further acknowledges and
agrees that (i) each has been advised by counsel during the course of
negotiations; (ii) each counsel has had significant input in the
development of this Agreement and (iii) this Agreement shall not,
therefore, be construed more strictly against any party responsible for its
drafting regardless of any presumption or rule requiring construction
against the party whose attorney drafted this agreement.

 

(f)                                    This Warrant and all documents and
instruments referred to herein (i) constitute the entire agreement and supersede
all prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof and thereof, and (ii) are
not intended to confer upon any person other than the parties hereto any rights
or remedies hereunder.

 

(g)                                 The parties agree to execute any and all such
other further instruments and documents, and to take any and all such further
actions which are reasonably required to effectuate this Warrant and the
intents and purposes hereof.

 

(h)                                 This Warrant shall be binding upon and
inure to the benefit of the parties hereto and their heirs, executors,
administrators, personal representatives, successors and assigns.

 

(i)                                     Except
as otherwise expressly provided herein, no waiver of any covenant, condition,
or provision of this Warrant shall be deemed to have been made unless expressly
in writing and signed by the party against whom such waiver is charged; and (i) the
failure of any party to insist in any one or more cases upon the performance of
any of the provisions, covenants or conditions of this Warrant or to exercise
any option herein contained shall not be construed as a waiver or
relinquishment for the future of any such provisions, covenants or conditions, (ii) the

 

8

 

acceptance of performance of anything required by this
Warrant to be performed with knowledge of the breach or failure of a covenant,
condition or provision hereof shall not be deemed a waiver of such breach or
failure, and (iii) no waiver by any party of one breach by another party
shall be construed as a waiver of any other or subsequent breach.

 

(j)                                     This
Warrant may not be changed, modified, extended, terminated or discharged
orally, but only by an agreement in writing, which is signed by the Payor and
the Payee of this Warrant.

 

(k)                                  All
Exhibits annexed or attached to this Warrant are incorporated into this Warrant
by reference thereto and constitute an integral part of this Warrant.

 

(l)                                     The
provisions of this Warrant shall be deemed separable.  Therefore, if any part of this Warrant is
rendered void, invalid or unenforceable, such rendering shall not affect the
validity or enforceability of the remainder of this Warrant.

 

IN WITNESS WHEREOF, the Company has caused this
Warrant to be signed by its duly authorized officer.

 

Issued this 9th day of December, 2005.

 

	
   

  	
  POWER 3 MEDICAL PRODUCTS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   /s/:
  Steven B. Rash

  	
   

  
	
   

  	
  Name:

  	
   

  	
   Steven
  B. Rash

  	
   

  
	
   

  	
  Title:

  	
   

  	
   Chairman/CEO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Acknowledged and Accepted:

  	
   

  
	
   

  	
   

  
	
  Trinity Financing Investments Corporation

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/: Trinity Bui

  	
   

  	
   

  
	
  Trinity Bui, President

  	
   

  
									

 

9

 

EXHIBIT A

 

NOTICE OF EXERCISE

To: POWER 3 MEDICAL PRODUCTS, INC

 

 

Attention:
Chief Financial Officer

 

1.  The undersigned hereby elects to purchase          shares
of Common Stock of POWER 3 MEDICAL PRODUCTS, INC pursuant to the terms of this
Warrant, and tenders herewith payment of the purchase price of such shares in
full.

 

2.  Please
issue a certificate or certificates representing said shares of Common Stock in
the name of the undersigned or in such other name as is specified below:

 

                                                                          (Name)

 

 

                                                                          (Address)

 

3.  The
undersigned hereby represents and warrants that the aforesaid shares of Common
Stock are being acquired for the account of the undersigned for investment and
not with a view to, or for resale, in connection with the distribution thereof,
and that the undersigned has no present intention of distributing or reselling
such shares and all representations and warranties of the undersigned set forth
in the attached Warrant are true and correct as of the date hereof.

 

 

	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:                                      ,                        

  
					

 

10

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