CONTINUING GUARANTY
(Personal)
New York
 

GUARANTOR:
PATIENT SAFETY TECHNOLOGIES, INC.
 
Name    
 
Residence Address
   
BORROWERS:
AUTOMOTIVE SERVICES GROUP, LLC
 
Name    
 
Address
   
LENDER:
STEVEN J. CASPI, 3010 WESTCHESTER AVENUE, PURCHASE, NEW YORK 10577

 
1)  Guaranty.
 
(a) Guarantor, intending to be legally bound, hereby unconditionally guarantees
the full and prompt payment and performance of any and all of Borrowers'
Obligations (as defined below) to the Lender when due, whether at stated
maturity, by acceleration or otherwise. As used in this Guaranty, the term
"Obligations" shall mean any and all obligations, indebtedness and other
liabilities of Borrower to the Lender now or hereafter existing, of every kind
and nature and all accrued and unpaid interest thereon and all Expenses (as
defined below) including without limitation, whether such obligations,
indebtedness and other liabilities (i) are direct, contingent, liquidated,
unliquidated, secured, unsecured, matured or unmatured; (ii) are pursuant to a
guaranty or surety in favor of the Lender; (iii) were originally contracted with
the Lender or with another party (including obligations under a guaranty or
surety originally in favor of such other party); (iv) are contracted by Borrower
alone or jointly with one or more other parties; (v) are or are not evidenced by
a writing; (vi) are renewed, replaced, modified or extended; and (vii) are
periodically extinguished and subsequently reincurred or reduced and thereafter
increased. Guarantor will pay or perform his or her obligations under this
Guaranty upon demand. This Guaranty is and is intended to be a continuing
guaranty of payment (not collection) of the Obligations (irrespective of the
aggregate amount thereof and whether or not the Obligations from time to time
exceeds the amount of this Guaranty, if limited), independent of, in addition
and without modification to, and does not impair or in any way affect, any other
guaranty, indorsement, or other agreement in connection with the Obligations, or
in connection with any other indebtedness or liability to the Lender or
collateral held by the Lender therefor or with respect thereto, whether or not
furnished by Guarantor. Guarantor understands that the Lender can bring an
action under this Guaranty without being required to exhaust other remedies or
demand payment first from other parties.
 
(b) Guarantor acknowledges the receipt of valuable consideration for this
Guaranty and acknowledges that the Lender is relying on this Guaranty in making
a financial accommodation to Borrower, whether a commitment to lend, extension,
modification or replacement of, or forbearance with respect to, any Obligation,
cancellation of another guaranty, purchase of Borrowers' assets, or other
valuable consideration.
 
2)  Continuing, Absolute, Unconditional. This Guaranty is irrevocable, absolute,
continuing, unconditional and general without any limitation. This Guaranty is
unlimited in amount plus all accrued and unpaid interest, premiums and Expenses
(as defined below) incurred with respect to the Obligations and all of the
Expenses incurred with respect to this Guaranty (collectively, the "Guaranteed
Amount").
 
3)  Guarantor's Waivers & Authorizations.
 
(a) Guarantor's obligations shall not be released, impaired or affected in any
way including by any of the following, all of which Guarantor hereby waives (i)
any bankruptcy, reorganization or insolvency under any law of Borrower or that
of any other party, or by any action of a trustee in any such proceeding; (ii)
any new agreements or obligations of Borrower or any other party with the
Lender; (iii) any adjustment, compromise or release of any Obligations of
Borrower, by the Lender or any other party; the existence or nonexistence or
order of any filings, exchanges, releases, impairment or sale of, or failure to
perfect or continue the perfection of a security interest in any collateral for
the Obligations, (iv) any failure of Guarantor to receive notice of any intended
disposition of such collateral; (v) any fictitiousness, incorrectness,
invalidity or unenforceability, for any reason, of any instrument or other
agreement which may evidence any Obligation; (vi) any composition, extension,
stay or other statutory relief granted to Borrower including, without
limitation, the expiration of the period of any statute of limitations with
respect to any lawsuit or other legal proceeding against Borrower or any person
in any way related to the Obligations or a part thereof or any collateral
therefor; (vii) any change in form of organization, name, membership or
ownership of Borrower or Guarantor; (viii) any refusal or failure of the Lender
or any other person prior to the date hereof or hereafter to grant any
additional loan or other credit accommodation to Borrower or the Lender's or any
other party's receipt of notice of such refusal or failure; (ix) any setoff,
defense or counterclaim of Borrower with respect to the obligations or otherwise
arising, either directly or indirectly, in regard to the Obligations; or (x) any
other circumstance that might otherwise constitute a legal or equitable defense
to Guarantor's obligations under this Guaranty.
 
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(b) Guarantor waives acceptance, assent and all rights of notice or demand
including without limitation (i) notice of acceptance of this Guaranty, of
Borrowers' default or nonpayment of any Obligation, and of changes in Borrowers'
financial condition; (ii) presentment, protest, notice of protest and demand for
payment; (iii) notice that any Obligations has been incurred or of the reliance
by the Lender upon this Guaranty; and (iv) any other notice, demand or condition
to which Guarantor might otherwise be entitled prior to the Lender's reliance on
or enforcement of this Guaranty. Guarantor further authorizes the Lender,
without notice, demand or additional reservation of rights against Guarantor and
without affecting Guarantor's obligations hereunder, from time to time: (i) to
renew, refinance, modify, subordinate, extend, increase, accelerate, or
otherwise change the time for payment of, the terms of or the interest on the
Obligations or any part thereof;(ii) to accept and hold collateral from any
party for the payment of the any or all of the Obligations, and to exchange,
enforce or refrain from enforcing, or release any or all of such collateral;
(iii) to accept any indorsement or guaranty of any or all of the Obligations or
any negotiable instrument or other writing intended to create an accord and
satisfaction with respect to any or all of the Obligations; (iv) to release,
replace or modify the obligation of any indorser or guarantor, or any party who
has given any collateral for any of all of the Obligations, or any other party
in any way obligated to pay any or all of the Obligations, and to enforce or
refrain from enforcing, or compromise or modify, the terms of any obligation of
any such indorser, guarantor or party; (v) to dispose of any and all collateral
securing the Obligations in any manner as the Lender, in its sole discretion,
may deem appropriate, and to direct the order and the enforcement of any and all
indorsements and guaranties relating to the Obligations in the Lender's sole
discretion; and (vi) to determine the manner, amount and time of application of
payments and credits, if any, to be made on all or any part of the Obligations
including, without limitation, if this Guaranty is limited in amount, to make
any such application to Obligations, if any, in excess of the amount of this
Guaranty.
 
(c) Notwithstanding any other provision in this Guaranty, Guarantor irrevocably
waives, without notice, any right he or she may have at law or in equity
(including without limitation any law subrogating Guarantor to the rights of the
Lender) to seek contribution, indemnification or any other form of reimbursement
from Borrower or any other obligor or guarantor of the Obligations for any
disbursement made under this Guaranty or otherwise.
 
4)  Termination. This Guaranty shall remain in full force and effect as to each
Guarantor until actual receipt by the Lender officer responsible for Borrowers'
relationship with the Lender of written notice of Guarantor's intent to
terminate (or Guarantor's death or incapacity) plus the lapse of a reasonable
time for the Lender to act on such notice (the "Receipt of Notice"); provided,
however, this Guaranty shall remain in full force and effect thereafter until
all Obligations outstanding, or contracted or committed for (whether or not
outstanding), before such Receipt of Notice by the Lender, and any extensions,
renewals or replacements thereof (whether made before or after such Receipt of
Notice), together with interest accruing thereon after such Receipt of Notice,
shall be finally and irrevocably paid in full. Discontinuance of this Guaranty
as to one Guarantor shall not operate as a discontinuance hereof as to any other
guarantor. Payment of all of the Obligations from time to time shall not operate
as a discontinuance of this Guaranty, unless a Receipt of Notice as provided
above has been received by the Lender. Guarantor agrees that, to the extent that
Borrower makes a payment or payments to the Lender on the Obligations, or the
Lender receives any proceeds of collateral to be applied to the Obligations,
which payment or payments or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside or otherwise are required
to be repaid to Borrower, its estate, trustee, receiver or any other party,
including, without limitation, under any bankruptcy law, state or federal law,
common law or equitable cause, then to the extent of such repayment, the
obligation or part thereof which has been paid, reduced or satisfied by such
amount shall be reinstated and continued in full force and effect as of the date
such initial payment, reduction or satisfaction occurred, notwithstanding any
contrary action which may have been taken by the Lender in reliance upon such
payment or payments. As of the date any payment or proceeds of collateral are
returned, the statute of limitations shall start anew with respect to any action
or proceeding by the Lender against Guarantor under this Guaranty. Likewise, any
acknowledgment, reaffirmation or payment, by Borrower or any third party, of any
portion of the Obligations, shall be deemed to be made as agent for the
Guarantor, strictly for the purposes of tolling the running of (and/or
preventing the operation of) the applicable statute of limitations with respect
to any action or proceeding by the Bank against Guarantor under this Guaranty.

5)  Expenses. Guarantor agrees to reimburse the Lender on demand for all the
Lender's expenses, damages and losses of any kind or nature, including without
limitation costs of collection and actual attorneys' fees and disbursements
whether for internal or external counsel incurred by the Lender in attempting to
enforce this Guaranty, collect any of the Obligations including any workout or
bankruptcy proceedings or other legal proceedings or appeal, realize on any
collateral, defense of any action under the prior paragraph or for any other
purpose related to the Obligations (collectively, "Expenses"). Expenses will
accrue interest at the highest default rate in any instrument evidencing the
Obligations until payment is actually received by the Lender.
 
6)  Financial and Other Information. Guarantor shall promptly cause to be
delivered to Lender within thirty (30) days of filing with the Internal Revenue
Service, a true and complete copy of Guarantor's federal and state tax returns,
including all schedules. If Guarantor files an extension, a copy of the same
shall be delivered within thirty (30) days of filing such extension. Guarantor
represents that his or her assets are not subject to any liens, encumbrances or
contingent liabilities except as fully disclosed to the Lender in such
statements. Guarantor warrants that all information Guarantor gives to the
Lender at any time is correct, complete and not misleading. Guarantor resides at
the above address and will notify the Lender officer named above immediately in
writing upon any change in address. Guarantor understands this Guaranty and has
satisfied himself or herself as to its meaning and consequences and acknowledges
that it has made its own arrangements for keeping informed of changes or
potential changes affecting the Borrower including the Borrowers' financial
condition.
 
7)  Security; Right of Setoff. As further security for payment of the
Obligations, Expenses and any other obligations of Guarantor to the Lender,
Guarantor hereby grants to the Lender a security interest in all money,
securities and other property of Guarantor in the actual or constructive
possession or control of the Lender or its affiliates including without
limitation all deposits and other accounts owing at any time by Manufacturers
and Traders Trust Company, the Lender or any of their affiliates in any capacity
to Guarantor in any capacity (collectively, "Property"). The Lender shall have
the right to set off Guarantor's Property against any of Guarantor's obligations
to the Lender. Such set-off shall be deemed to have been exercised immediately
at the time Manufacturers and Traders Trust Company, the Lender or such
affiliate elect to do so. The Lender shall also have all of the rights and
remedies of a secured party under the Uniform Commercial Code, as the same may
be in effect in the State of New York, as amended from time to time, in addition
to those under this Guaranty and other applicable law and agreements.
 
8)  No Transfer of Assets. Guarantor shall not transfer, reinvest or otherwise
dispose of his or her assets in a manner or to an extent that would or might
impair Guarantor's ability to perform his or her obligations under this
Guaranty.
 
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9)  Nonwaiver by the Lender; Miscellaneous. This Guaranty is intended by
Guarantor to be the final, complete and exclusive expression of the agreement
between Guarantor and the Lender. This Guaranty may be assigned by the Lender,
shall inure to the benefit of the Lender and its successors and assigns, and
shall be binding upon Guarantor and his or her legal representative, successors
and assigns and any participation may be granted by the Lender herein in
connection with the assignment or granting of a participation by the Lender in
the Obligations or any part thereof. All rights and remedies of the Lender are
cumulative, and no such right or remedy shall be exclusive of any other right or
remedy. This Guaranty does not supersede any other guaranty or security granted
to the Lender by Guarantor or others (except as to Guarantor's Waiver of
Subrogation rights above). No single, partial or delayed exercise by the Lender
of any right or remedy shall preclude exercise by the Lender at any time at its
sole option of the same or any other right or remedy of the Lender without
notice. Guarantor expressly disclaims any reliance on any course of dealing or
usage of trade or oral representation of the Lender including, without
limitation, representations to make loans to Borrower or enter into any other
agreement with Borrower or Guarantor. No course of dealing or other conduct, no
oral agreement or representation made by the Lender or usage of trade shall
operate as a waiver of any right or remedy of the Lender. No waiver or amendment
of any right or remedy of the Lender or release by the Lender shall be effective
unless made specifically in writing by the Lender. Each provision of this
Guaranty shall be interpreted as consistent with existing law and shall be
deemed amended to the extent necessary to comply with any conflicting law. If
any provision nevertheless is held invalid, the other provisions shall remain in
effect. Guarantor agrees that in any legal proceeding, a copy of this Guaranty
kept in the Lender's course of business may be admitted into evidence as an
original. Captions are solely for convenience and not part of the substance of
this Guaranty. If this Guaranty is limited pursuant to Paragraph 2 hereof, until
the Obligations are indefeasibly paid in full, the Guaranteed Amount shall not
be reduced in any manner whatsoever by any amounts which the Lender may realize
before or after maturity of the Obligations (by acceleration, demand or
otherwise), as a result of payments made by or on behalf of Borrower or by or on
behalf of any other person or entity other than Guarantor primarily or
secondarily liable for the Obligations or any part thereof, or otherwise
credited to Borrower or such person or entity, or as a result of the exercise of
the Lender's rights with respect to any collateral for the Obligations or any
part thereof. Payments made to the Lender by Guarantor (other than, directly or
indirectly, from collateral or other persons or entities liable for any portion
of the Obligations) after maturity of the Obligations, by acceleration or
otherwise, shall reduce the Guaranteed Amount.
 
10)  Joint and Several. If there is more than one Guarantor, each Guarantor
jointly and severally guarantees the payment and performance in full of all
obligations under this Guaranty and the term "Guarantor" means each as well as
all of them. Guarantor also agrees that the Lender need not seek payment from
any source other than the undersigned Guarantor. This Guaranty is a primary
obligation. Guarantor's obligations hereunder are separate and independent of
Borrowers', and a separate action may be brought against Guarantor whether or
not action is brought or joined against or with Borrower or any other party.
 
11)  Notices. Any demand or notice hereunder or under any applicable law
pertaining hereto shall be in writing and duly given if delivered to Guarantor
(at its address on the Lender's records) or to the Lender (at the address on
page one and separately to the Lender officer responsible for Borrowers'
relationship with the Lender). Such notice or demand shall be deemed
sufficiently given for all purposes when delivered (i) by personal delivery and
shall be deemed effective when delivered, or (ii) by mail or courier and shall
be deemed effective three (3) business days after deposit in an official
depository maintained by the United States Post Office for the collection of
mail or one (1) business day after delivery to a nationally recognized overnight
courier service (e.g., Federal Express). Notice by e-mail is not valid notice
under this or any other agreement between Guarantor and the Lender.
 
12)  Governing Law and Jurisdiction. This Guaranty has been delivered to and
accepted by the Lender and will be deemed to be made in the State of New York.
Unless provided otherwise under federal law, this Guaranty will be interpreted
in accordance with the laws of the State of New York excluding its conflict of
laws rules. GUARANTOR HEREBY IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION
OF ANY STATE OR FEDERAL COURT IN ANY JUDICIAL DISTRICT OR COUNTY IN THE STATE OF
NEW YORK WHERE MANUFACTURERS AND TRADERS TRUST COMPANY MAINTAINS A BRANCH AND
CONSENTS THAT THE LENDER MAY EFFECT ANY SERVICE OF PROCESS IN THE MANNER AND AT
GUARANTOR'S ADDRESS SET FORTH ABOVE FOR PROVIDING NOTICE OR DEMAND; PROVIDED
THAT NOTHING CONTAINED IN THIS GUARANTY WILL PREVENT THE LENDER FROM BRINGING
ANY ACTION, ENFORCING ANY AWARD OR JUDGMENT OR EXERCISING ANY RIGHTS AGAINST
GUARANTOR INDIVIDUALLY, AGAINST ANY SECURITY OR AGAINST ANY PROPERTY OF
GUARANTOR WITHIN ANY OTHER COUNTY, STATE OR OTHER FOREIGN OR DOMESTIC
JURISDICTION. Guarantor acknowledges and agrees that the venue provided above is
the most convenient forum for both the Lender and Guarantor. Guarantor hereby
waives any objection to venue and any objection based on a more convenient forum
in any action instituted under this Guaranty.
 
13)  Waiver of Jury Trial. GUARANTOR AND THE LENDER HEREBY KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY GUARANTOR AND
THE LENDER MAY HAVE IN ANY ACTION OR PROCEEDING, IN LAW OR IN EQUITY, IN
CONNECTION WITH THIS GUARANTY OR THE TRANSACTIONS RELATED HERETO. GUARANTOR
REPRESENTS AND WARRANTS THAT NO REPRESENTATIVE OR AGENT OF THE LENDER HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE LENDER WILL NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THIS JURY TRIAL WAIVER. GUARANTOR ACKNOWLEDGES THAT
THE LENDER HAS BEEN INDUCED TO ENTER INTO THIS GUARANTY BY, AMONG OTHER THINGS,
THE PROVISIONS OF THIS SECTION.
 
Acknowledgment. Guarantor acknowledges that it has read and understands all the
provisions of this Guaranty, including the Governing Law, Jurisdiction and
Waiver of Jury Trial, and has been advised by counsel as necessary or
appropriate.
 

        GUARANTOR:       PATIENT SAFETY TECHNOLOGIES, INC.       BY:    

 
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NOTICE: FOR PURPOSES OF THIS AGREEMENT
"OBLIGATIONS" IS NOT LIMITED TO PRESENTLY
EXISTING INDEBTEDNESS, LIABILITIES AND OBLIGATIONS.
 
Dated: January __, 2006

 
 

 
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ACKNOWLEDGMENT
 
 

STATE OF )   : SS. COUNTY OF )

                                                  

On the ____ day of January , in the year 2006, before me, the undersigned, a
Notary Public in and for said State, personally appeared  , personally known to
me or proved to me on the basis of satisfactory evidence to be the individual
whose name is subscribed to the within instrument and acknowledged to me that he
executed the same in his capacity, and that by his signature on the instrument,
the individual, or the person upon behalf of which the individual acted,
executed the instrument.
 

     
   Notary Public

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FOR BANK USE ONLY
  Authorization Confirmed:    
Signature

 
 
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