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.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    (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.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    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:
	 	 


      



     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    


    
      	
              NOTICE:
                FOR PURPOSES OF THIS AGREEMENT 

              "OBLIGATIONS"
                IS
                NOT LIMITED TO PRESENTLY 

              EXISTING
                INDEBTEDNESS, LIABILITIES
                AND OBLIGATIONS.

            	 	
              Dated:
                January __, 2006

            


    

     

     

    
 

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    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

              	
                
  



      



     

    
 

     

    
      	 
	
              FOR
                BANK USE
                ONLY

            
	 
	Authorization
              Confirmed:	   
              
	
              Signature

            


    

     

     

    
      
        
        

      

      
        5