AMENDED AND RESTATED GUARANTY
AMENDED
AND RESTATED
GUARANTY
dated as of July 29, 2008 ("Guaranty") made by Xxxxxx X. Xxxx, an individual
residing at, 00 Xxxxxxxxxx Xxxxx, Xxx Xxxxxxxxx, XX 00000 (“Guarantor”) in favor
of Able Income Fund, LLC ("Lender").
WITNESSETH
WHEREAS,
Power 3 Medical Products, Inc., a New York corporation (the “Borrower”), and the
Lender are parties to a Debentures, dated as of June 30, 2008 (such agreement,
as amended, restated, supplemented or otherwise modified from time to time,
being hereinafter referred to as the “Initial Debenture”);
WHEREAS,
Borrower and the Lender are parties to a new Debentures, dated as of July 25,
2008 (such agreement, as amended, restated, supplemented or otherwise modified
from time to time, being hereinafter referred to as the “New Debentures” and
together with the Initial Debentures, the “Debentures”)
WHEREAS,
pursuant to the Debentures, the Guarantor is required to execute and deliver
to
the Lender a guaranty guaranteeing the Debentures and all other obligations
under the Debentures and the other Loan Documents; and
WHEREAS,
the Guarantor has determined that (i) it will derive substantial benefit and
advantage from the loan and other financial accommodations made available to
the
Borrower under the Debentures and the other Loan Documents and (ii) its
execution, delivery and performance of this Guaranty directly benefit, and
are
within the best interests of, the Guarantor;
NOW,
THEREFORE, in consideration of $1,000, paid by the Borrower to the Guarantor,
receipt of which is hereby acknowledged, the premises, the agreements herein
and
in order to induce the Lender to make and maintain the Loan pursuant to the
Debentures, the Guarantor hereby agrees with the Lender, as
follows:
Section
1. Definitions.
Reference is hereby made to the Debentures for a statement of the terms thereof.
All terms used in this Guaranty which are defined in the Debentures and not
otherwise defined herein shall have the same meanings herein as set forth
therein. As used in this Guaranty, the following terms have the following
meanings (terms defined in the singular to have the same meaning when used
in
the plural and vice versa):
“Borrower”
has the meaning specified in the preamble above.
“Guaranty
Documents” means the Loan Documents and any document or agreement evidencing,
related to or delivered in connection with any or all of the Guaranteed
Obligations.
“Guaranteed
Obligations” means any and all present and future liabilities and obligations of
Borrower and Grantor to Lender incurred by Borrower and Grantor under the Loan
Documents, and whether due or to become due, secured or unsecured, absolute
or
contingent, joint or several, direct or indirect, acquired outright,
conditionally or as collateral security by Lender from another, liquidated
or
unliquidated, arising by operation of law or otherwise, together with all fees
and expenses incurred in collecting any or all of the items specified in this
definition or enforcing any rights under any of the Guaranty Documents,
including all fees and expenses of Lender’s counsel and of any experts and
agents which may be paid or incurred by Lender in collecting any such items
or
enforcing any such rights.
Section
2. Rules
of Interpretation.
When
used in this Guaranty: (1) “or” is not exclusive, (2) a reference to a law
includes any amendment or modification to such law, and (3) a reference to
an
agreement, instrument or document includes any amendment or modification of
such
agreement, instrument or document.
Section
3. Guaranty.
Guarantor hereby guarantees to Lender and its successors, endorsees, transferees
and assigns the prompt and complete payment, as and when due and payable
(whether at stated maturity or by required prepayment, acceleration, demand
or
otherwise), of all of the Guaranteed Obligations now existing or hereafter
incurred will be paid strictly in accordance with their terms.
Section
4. Limitation
of Liability.
The
obligation of Guarantor under this Guaranty shall be limited to an aggregate
amount equal to the largest amount that would not render the obligation of
Guarantor under this Guaranty subject to avoidance under Section 548 of the
United States Bankruptcy Code or any comparable provision of any applicable
state law.
Section
5. Type
of Guaranty.
This
Guaranty is absolute and unconditional and as such is not subject to any
conditions and Guarantor is fully liable to perform all of its duties and
obligations under this Guaranty as of the date of execution of this Guaranty.
This Guaranty is a continuing guaranty and applies to all future Guaranteed
Obligations. In addition, this Guaranty shall remain in full force and effect
even if at any time there are no outstanding Guaranteed Obligations. This
Guaranty is a guaranty of payment and not of collection. The obligations and
liabilities of Guarantor under this Guaranty shall not be conditioned or
contingent upon the pursuit by Lender of any right or remedy against Borrower,
Grantor or any other person which may be or become liable in respect of all
or
any part of the Guaranteed Obligations, or against any assets securing the
payment of the Guaranteed Obligations or guarantee for such Guaranteed
Obligations or right of setoff with respect to such Guaranteed Obligations.
This
Guaranty is irrevocable and as such cannot be cancelled, terminated or revoked
by Guarantor.
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Section
6. Reinstatement
of Guaranty.
This
Guaranty shall continue to be effective or shall be reinstated, as the case
may
be, if at any time any payment, or any part thereof, of any of the Guaranteed
Obligations are rescinded or must otherwise be returned by Lender upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of Borrower,
Grantor or otherwise, all as though such payment had not been made.
Guarantor
hereby consents that, without the necessity of any reservation of rights against
Guarantor and without notice to or further assent by Guarantor, any demand
for
payment of any of the Guaranteed Obligations made by Lender may be rescinded
by
Lender and any of such Guaranteed Obligations continued after such
rescission.
Section
7. Security
Interest.
To
secure the payment of the obligations of Guarantor under this Guaranty,
Guarantor has executed a Pledge Agreement in favor of, and grants Lender a
pledge and security interest in the Pledged Shares listed in Schedule 1 to
the
Pledge Agreement.
Section
8. Waiver
of Notices.
Guarantor hereby waives any and all notices including (1) notice of or proof
of
reliance by Lender upon this Guaranty or acceptance of this Guaranty, (2) notice
of the incurrence of any Guaranteed Obligations or the renewal, extension or
accrual of any such Guaranteed Obligations, (3) notice of any actions taken
by
Lender, Borrower, Grantor or any other person under any Guaranty Document,
and
(4) notices of nonpayment or nonperformance, protest, notices of protest and
notices of dishonor.
Section
9. Waiver
of Defenses.
Guarantor hereby waives any and all defenses to the performance by Guarantor
of
its duties and obligations under this Guaranty, including any defense based
on
any of the following:
(1) any
failure of Lender to disclose to Guarantor any information relating to the
business, condition (financial or otherwise), operations, performance,
properties or prospects of any party obligated to make payment on any and all
Guaranteed Obligations, whether as principal or guarantor, now or hereafter
known to Lender,
(2) any
defense to the payment of any or all the Guaranteed Obligations, including
lack
of validity or enforceability of any of the Guaranteed Obligations or any
Guaranty Documents,
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(3) any
change in the time, manner or place of payment of, or in any other term in
respect of, all or any of the Guaranteed Obligations, or any other amendment
or
waiver of or consent to any departure from any Guaranty Document,
(4) any
exchange or release of, or non-perfection of any security interest on or in
any
assets securing the payment of the Guaranteed Obligations,
(5) any
failure to execute any other guaranty for all or any part of the Guaranteed
Obligations, or any release or amendment or waiver of, or consent to any
departure from, any other guaranty for any or all of the Guaranteed Obligations,
(6)
any subordination of any or all of the Guaranteed Obligations,
(7)
any act
or omission of Lender in connection with the enforcement of, or the exercise
of
rights and remedies, including any election of, or the order of exercising
any,
remedies, with respect to (a) the Guaranteed Obligations, (b) any other
guarantor of the Guaranteed Obligations, or (c) any assets securing the payment
of the Guaranteed Obligations,
(8) any
manner of application of any funds received by Lender to Guaranteed Obligations
or any other obligations owed to Lender, whether from the sale or disposition
of
any assets securing the Guaranteed Obligations, from another guarantor of the
Guaranteed Obligations or otherwise, and
(9) any
failure to give or provide any notices, demands or protests, including those
specified under Section 8 herein, entitled “Waiver of Notices”.
Section
10. Subrogation.
Guarantor may not exercise any rights which Guarantor may acquire by way of
subrogation or contribution, whether acquired by any payment made under this
Guaranty, by any setoff or application of funds of Borrower, by Lender or
otherwise, until (1) the payment in full of the Guaranteed Obligations (after
Lender no longer has any obligation or arrangement to provide credit to
Borrower, including under or pursuant to a line of credit), and (2) the payment
of all fees and expenses to be paid by Guarantor pursuant to this Guaranty.
If
any amount shall be paid to Guarantor on account of such subrogation or
contribution rights at any time when all of the Guaranteed Obligations and
all
such other expenses shall not have been paid in full (after Lender no longer
has
any obligation or arrangement to provide credit to Borrower, including under
or
pursuant to a line of credit), such amount shall be held in trust for the
benefit of Lender, shall be segregated from the other funds of Guarantor and
shall forthwith be paid over to Lender to be credited and applied in whole
or in
part by Lender against the Guaranteed Obligations, whether matured or unmatured,
and all such other fees and expenses in accordance with the terms of the
Guaranty Documents.
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Section
11. Representations.
At the
time of execution of this Guaranty and each time Lender provides credit as
Debentures above, Guarantor represents and warrants to Lender as
follows:
(1) Name.
The
exact legal name of the Guarantor is the name specified in the preamble to
this
Guaranty. The Guarantor has not been known by any other name during the five
(5)
years prior to the date of the Guaranty.
(2) Location.
The
principal residence of the Guarantor is 00 Xxxxxxxxxx Xxxxx, Xxx Xxxxxxxxx,
XX
00000.
(3) No
Contravention.
The
execution, delivery and performance by Guarantor of this Guaranty do not and
will not (a) violate any provision of any law, order, writ, judgment,
injunction, decree, determination, or award presently in effect applicable
to
Guarantor, (b) result in a breach of or constitute a default under any indenture
or loan or credit agreement or any other agreement, lease, or instrument to
which Guarantor is a party or by which Guarantor or its properties may be bound
or affected, or (c) result in, or require, the creation or imposition of any
lien upon or with respect to any of the properties now owned or hereafter
acquired by Guarantor.
(4) Governmental
Authority.
No
authorization, approval or other action by, and no notice to or filing with,
any
governmental authority is required for the due execution, delivery and
performance by Guarantor of this Guaranty.
(5) Legally
Enforceable Guaranty.
This
Guaranty is the legal, valid and binding obligation of Guarantor, enforceable
against Guarantor in accordance with its terms, except to the extent that such
enforcement may be limited by (a) applicable bankruptcy, insolvency, and other
similar laws affecting creditors' rights generally, or (b) general equitable
principles, regardless of whether the issue of enforceability is considered
in a
proceeding in equity or at law.
Section
12. Remedies.
Lender
shall not, by any act, delay, omission or otherwise, be deemed to have waived
any of its rights or remedies under this Guaranty or otherwise. A waiver by
Lender of any right or remedy hereunder on any one occasion, shall not be
construed as a ban or waiver of any such right or remedy which Lender would
have
had on any future occasion, nor shall Lender be liable for exercising or failing
to exercise any such right or remedy. The rights and remedies of Lender under
this Guaranty are cumulative and, as such, are in addition to any other rights
and remedies available to Lender under law or any other agreements.
Section
13. Appointment
as Attorney-in-Fact.
Guarantor hereby appoints Lender as the attorney-in-fact for Guarantor, with
full authority in the place and stead of Guarantor and in the name of Guarantor
or otherwise, to exercise all rights and remedies granted to Lender under this
Guaranty and to take any action and to execute any instrument which Lender
may
deem necessary or advisable to accomplish the purposes of this
Guaranty.
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Section
14. Indemnity
and Expenses.
Guarantor hereby indemnifies Lender from and against any and all claims, losses,
damages and liabilities growing out of or resulting from this Guaranty
(including, without limitation, enforcement of this Guaranty), except claims,
losses, damages or liabilities resulting from Lender's gross negligence and
willful misconduct.
Guarantor
will upon demand pay to Lender the amount of any and all expenses, including
the
fees and expenses of its counsel and of any experts and agents, which Lender
may
incur in connection with (1) any amendment to this Guaranty, (2) the
administration of this Guaranty, (3) the exercise or enforcement of any of
the
rights of Lender under this Guaranty, or (4) the failure by Guarantor to perform
or observe any of the provisions of this Guaranty.
Section
15. Amendments.
No
amendment or waiver of any provision of this Guaranty, nor consent to any
departure by Guarantor from this Guaranty, shall in any event be effective
unless the same shall be in writing and signed by Guarantor and Lender, and
then
such amendment or waiver shall be effective only in the specific instance and
for the specific purpose for which given.
Section
16. Addresses
for Notices.
All
notices and other communications provided for under this Guaranty shall be
in
writing and, mailed or delivered by messenger or overnight delivery service,
addressed, in the case of Guarantor at its address specified below its
signature, and in the case of Lender at the address specified below, or as
to
any such party at such other address as shall be designated by such party in
a
written notice to the other party complying as to delivery with the terms of
this Section.
If
to
Lender:
Attention:
With
copies to:
If
to
Guarantor:
Xxxxxx
X.
Xxxx
c/o
Power3 Medical Products, Inc.
0000
Xxxxxxxx Xxxxxx Xxxxx
Xxx
Xxxxxxxxx, Xxxxx 00000
Fax
No.:
000-000-0000
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With
copies to:
Sichenzia
Xxxx Xxxxxxxx Xxxxxxx LLP
Attn:
Xxxxxx X. Xxxxxx
00
Xxxxxxxx, 00xx
Xx.
Xxx
Xxxx,
Xxx Xxxx 00000
Fax
No.:
000-000-0000
All
such
notices and other communications shall, when mailed, be effective three (3)
days
after being placed in the mails, or when delivered to a messenger or overnight
delivery service, be effective one (1) day after being delivered to the
messenger or overnight delivery service, in each case, addressed as specified
above.
Section
17. Assignment
and Transfer of Obligations.
This
Guaranty will bind the estate of Guarantor as to Guaranteed Obligations created
or incurred both before and after the death or incapacity of Guarantor, whether
or not Lender receives notice of such death or incapacity. This Guaranty shall
inure to the benefit of Lender and its successors, transferees and assigns.
Guarantor may not transfer or assign its obligations under this Guaranty. Lender
may assign or otherwise transfer all or a portion of its rights or obligations
with respect to the Guaranteed Obligations to any other party, and such other
party shall then become vested with all the benefits in respect of such
transferred Guaranteed Obligations granted to Lender in this Guaranty or
otherwise. Guarantor agrees that Lender can provide information regarding
Guarantor to any prospective or actual successor, transferee or
assign.
Section
18. Setoff.
Guarantor agrees that, in addition to, and without limiting, any right of
setoff, Lender’s lien or counterclaim Lender may otherwise have, Lender shall be
entitled, at its option, to offset balances (general or special, time or demand,
provisional or final) held by it for the account of Guarantor, at any of the
offices of Lender, in Dollars or any other currency, against any amount payable
by Guarantor to Lender under this Guaranty which is not paid when demanded
(regardless of whether such balances are then due to Guarantor), in which case
Lender shall promptly notify Guarantor, provided that Lender’s failure to give
such notice shall not affect the validity of such offset.
Section
19. Submission
to Jurisdiction.
Guarantor hereby irrevocably submits to the jurisdiction of any federal or
state
court sitting in New York County in the State of New York over any action or
proceeding arising out of or related to this Guaranty and agrees with Lender
that personal jurisdiction over Guarantor rests with such courts for purposes
of
any action on or related to this Guaranty. Guarantor hereby waives personal
service by manual delivery and agrees that service of process may be made by
prepaid certified mail directed to Guarantor at the address of Guarantor for
notices under this Guaranty or at such other address as may be designated in
writing by Guarantor to Lender, and that upon mailing of such process such
service will be effective as if Guarantor was personally served. Guarantor
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or
in any manner provided by law. Guarantor further waives any objection to venue
in any such action or proceeding on the basis of inconvenient forum. Guarantor
agrees that any action on or proceeding brought against Lender shall only be
brought in such courts.
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Section
20. Governing
Law.
This
Guaranty shall be governed by and construed in accordance with the laws of
the
State of New York without regard to its principles of conflicts of
law.
Section
21. Subordination.
Once a
demand for payment is made on the Guarantor under this Guaranty Guarantor will
not (1) make any demand for payment of, or take any action to accelerate, any
obligation owed to Guarantor by Borrower, (2) seek to collect payment of, or
enforce any right or remedies against Borrower, any of the obligations owed
to
Guarantor by Borrower or any guarantees, credit supports, collateral or other
security related to or supporting any of such obligations, or (3) commence,
or
join with any other creditor in commencing, any bankruptcy or similar proceeding
against Borrower. Guarantor also agrees that the payment of all obligations
of
Borrower to Guarantor shall be subordinate and junior in time and right of
payment in accordance with the terms of this Section to the prior payment in
full (in cash) of the Guaranteed Obligations. In furtherance of such
subordination, (1) to the extent possible, Guarantor will not take or receive
from Borrower any payments, in cash or any other property, by setoff or any
other means, of any or all of the obligations owed to Guarantor by Borrower,
or
purchase, redeem, or otherwise acquire any of such obligations, or change the
terms or provisions of any such obligations and (2) if for any reason and under
any circumstance Guarantor receives a payment on such obligation, whether in
a
bankruptcy or similar proceeding or otherwise, all such payments or
distributions upon or with respect to such obligations shall be received in
trust for the benefit of Lender, shall be segregated from other funds and
property held by Guarantor and shall be forthwith paid over to Lender in the
same form as so received (with any necessary endorsement) to be applied (in
the
case of cash) to, or held as collateral (in the case of securities or other
non-cash property) for, the payment or prepayment of the Guaranteed Obligations.
Guarantor agrees that any subrogation rights Guarantor may acquire as a result
of a payment under this Section may not be exercised until (1) the payment
in
full of the Guaranteed Obligations (after Lender no longer has any obligation
or
arrangement to provide credit to Borrower, including under or pursuant to a
line
of credit), and (2) the payment of all fees and expenses to be paid by Guarantor
pursuant to this Guaranty.
Section
22. Miscellaneous.
This
Guaranty is in addition to and not in limitation of any other rights and
remedies Lender may have by virtue of any other instrument or agreement
previously, contemporaneously or hereafter executed by Guarantor or any other
party or by law or otherwise. If any provision of this Guaranty is contrary
to
applicable law, such provision shall be deemed ineffective without invalidating
the remaining provisions of this Guaranty. Titles in this Guaranty are for
convenience of reference only and shall not affect the interpretation or
construction of this Guaranty. This Guaranty constitutes the entire agreement
between Guarantor and Lender with respect to the matters covered by this
Guaranty and supercedes all written or oral agreements with respect to such
matters.
Section
23. WAIVER
OF JURY TRIAL.
GUARANTOR EXPRESSLY WAIVES ANY AND EVERY RIGHT TO A TRIAL BY JURY IN ANY ACTION
ON OR RELATED TO THIS GUARANTY.
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IN
WITNESS WHEREOF, Guarantor has duly executed and delivered this Guaranty as
of
the date of this Guaranty.
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___________________________________
Xxxxxx
X. Xxxx
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