Document:

SECURITY
      AGREEMENT

    BY
      AND BETWEEN AULT GLAZER BODNAR ACQUISITION FUND LLC 

    AND
      PATIENT SAFETY TECHNOLOGIES, INC.

    

    

    Ault
      Glazer Bodnar Acquisition Fund, LLC (“Secured Party”) and Patient Safety
      Technologies, Inc., a Delaware corporation (“Debtor”) agree as
      follows:

    

    1. GRANT
      OF SECURITY INTEREST.

    

    1.1
      The
      Debtor, jointly and severally, hereby grants to the Secured Party a security
      interest in personal property and fixtures, inventory, products and proceeds
      (including proceeds of proceeds, the “Collateral”) of Debtor, as security
      for:

     

    1.1.1
      The
      satisfaction and the prompt and full performance of all of Debtor’s obligations
      under that certain Secured Promissory Note (the “Note”) dated January 11, 2006
      in the principal amount of one hundred fifty thousand dollars ($150,000.00)
      plus
      interest at the rate of seven percent (7% ) per month, as the Note may be
      amended, modified, or extended from time to time (including, without limitation,
      the obligation to make payments of principal and interest thereon);
      and

    

    1.1.2
      The
      full, faithful, true and exact performance and observance of all of the
      obligations, covenants and duties of Debtor under this Security Agreement,
      as
      the same may be amended, modified, or extended from time to time.

    

    2. DEFAULT.
      Any of
      the following events shall constitute an event of default
      hereunder:

    

    2.1
      The
      failure by Debtor to make full and timely payment when due of any sum as
      required to be paid to Secured Party under the Note after any applicable notice
      of non-payment provided for in the Note has been given, and any period within
      which to cure the non-payment has elapsed, if applicable. A true and correct
      copy of the Note is attached hereto as Exhibit “A” and incorporated herein by
      this reference.

    2.2
      The
      failure by Debtor to fully and timely perform any covenant, agreement,
      obligation or duty imposed on Debtor by this Security Agreement or any other
      agreement by and between Debtor and Secured Party now existing or hereinafter
      made.

    

    2.3
      The
      filing by Debtor of any petition, or commencement by Debtor of any proceeding,
      under the Bankruptcy Act or any state insolvency law.

    

    2.4
      The
      making by Debtor of any general assignment for the benefit of
      creditors.

    

    2.5
      The
      filing of any petition, or commencement of any proceeding, under the Bankruptcy
      Act or any state insolvency law, against Debtor, or the appointment of any
      receiver or trustee, which petition, proceeding or appointment is not fully
      and
      completely discharged, dismissed or vacated within sixty (60) days.

     

    
      
         

      

      
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    2.6
      Any
      warranties made by Debtor are untrue in any material respect, or any schedule,
      statement, report, notice, or writing furnished by Debtor to the Secured Party
      are untrue in any material respect on the date as of which the facts set forth
      are stated or certified.

    

    3. INSPECTION
      OF RECORDS.
      Secured
      Party shall have the right without 

    notice
      to
      inspect all financial books, records and reports of Debtor at Debtor’s premises
      or wherever the same may be maintained during normal business
      hours.

    

    4. REMEDIES
      UPON DEFAULT.

    

    4.1
      Upon
      the occurrence of an event of default, in addition to any and all other remedies
      at law or in equity available to Secured Party, Debtors hereby authorize and
      empower Secured Party, at Secured Party’s option and without notice to Debtor,
      except as specifically provided herein (and, to the extent necessary, hereby
      irrevocably appoint Secured Party as Debtor’s attorney-in-fact for such
      purposes):

    

    4.1.1
      To
      require Debtor to assemble any and all of the Collateral and make the same
      available to Secured Party at the premises wherein the same is located, or
      any
      other place designated by Secured Party; Secured Party may enter upon any
      premises where any of the Collateral is located and may take possession of
      the
      same without judicial process and without the need to post any bond or security
      as an incident thereto; and

    4.1.2
      To
      sell, assign, transfer and deliver the whole or any part of the Collateral
      at
      public or private sale, for cash, upon credit, or for future delivery, in bulk
      or item by item, at such prices and upon such terms as are commercially
      reasonable, given the nature of the Collateral and the market therefor, with
      or
      without warranties, without the necessity of the Collateral being present at
      any
      such sale or in view of the prospective purchasers thereof, and without any
      presentment, demand for performance, protest, notice of protest, or notice
      of
      dishonor except as set forth herein, any other such advertisement, presentment,
      demand or notice being expressly waived by Debtors to the extent permitted
      by
      law. At any public sale or sales of the Collateral, Secured Party or Secured
      Party’s assigns may bid for and purchase all or any part of the Collateral
      offered for sale and upon compliance with the terms of such sale, may hold,
      exploit and dispose of such Collateral discharged from all claims of Debtor,
      except to the extent that Debtor has rights in the proceeds of such sale or
      sales, and free from any right or redemption, all of which are hereby expressly
      waived and released, and may in paying the purchase price thereof, in lieu
      of
      cash assignment at the face amount thereof, together with any interest accrued
      thereon, all or any part of unpaid principal or interest or both, payable under
      the Note. Secured Party may also purchase all or any part of the Collateral
      at
      any private sale thereof to the extent that such Collateral is customarily
      sold
      in a recognized market or is the subject of a widely or regularly distributed
      standard price quotation. Upon conclusion of any such public or private sale,
      Secured Party may execute and deliver a bill of sale to the assets so sold,
      in
      the name of Debtor. Secured Party may use Debtor’s premises for the purpose of
      conducting of any such sale. Secured Party shall give Debtor seven (7) days’
notice, in writing, of the time and place thereof, and in the case of a public
      sale, the date thereof and the name of the purchaser. Notice shall be deemed
      given when deposited in the United States mail, postage prepaid, certified
      or
      registered, and addressed to Debtor at 100 Wilshire Boulevard, Suite 1750,
      Santa
      Monica, CA 90401. Secured Party shall only be required to publish an
      advertisement of a public sale, which advertisement may be published in a
      newspaper of general circulation no later than seven (7) days prior to the
      date
      of sale, and an advertisement so published shall be deemed commercially
      reasonable if it merely gives the place, time, and date of sale, merely
      identifies the Collateral by classification without describing quantity or
      quality; provided, however that such advertisement may, at Secured Party’s
      option, contain additional information. Debtor acknowledges that Secured Party
      may accept any offer received, provided it is commercially reasonable, that
      Secured Party, at Secured Party’s option, need not approach more than one
      possible purchaser, and that Secured Party shall, to the fullest extent
      permitted by law, be relieved from all liability or claim for inadequacy of
      price if the manner and terms of sale comply with the terms of this Security
      Agreement.

     

    
      
         

      

      
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    4.2
      In
      the event of any such sale by Secured Party of all or any of said Collateral
      on
      credit, or for future delivery, such property so sold may be retained by Secured
      Party until the selling price is paid by the purchaser. Secured Party shall
      incur no liability in case of the failure of the purchaser to take up and pay
      for the property so sold. In case of any such failure, said Collateral may
      be
      again, and from time to time, sold.

    4.3
      In
      the event of any such sale or disposition, the proceeds thereof shall be applied
      first to the payment of the expenses of the sale, commissions, actual attorneys’
fees, and all other charges paid or incurred by Secured Party in taking,
      holding, selling , advertising, or otherwise preparing such Collateral for
      sale
      or otherwise in connection with maintaining the security of such Collateral,
      including any taxes or other charges imposed by law upon the Collateral and/or
      the ownership, holding or transfer thereof; secondly, to pay, satisfy and
      discharge all indebtedness of Debtor to Secured Party secured hereby then due
      and payable pursuant to the Note; thirdly, to the extent that Debtor may still
      have monetary obligations to Secured Party not yet due and payable, Secured
      Party may retain any surplus as collateral for the payment of such sums when
      due; and fourthly, if all of the secured obligations are then discharged and
      satisfied, to pay the surplus, if any, to Debtor. Secured Party shall look
      only
      to the assets of the business then operated and/or owned by Debtor to satisfy
      any and all claims, defaults or breaches regarding the Note and shall not in
      any
      event, look to any other assets of Debtor to satisfy same.

    

    4.4
      Secured Party shall not be liable or responsible for safeguarding the
      Collateral, or any portion thereof, or maintaining the condition thereof, or
      for
      any loss or damage thereto and diminution in value of the Collateral either
      through loss or non-collection. Secured Party shall not be liable or responsible
      for any act or default of any carrier or warehouseman or of any other person,
      other than that occasioned by the gross negligence and willful misconduct of
      Secured Party. 

     

    
      
         

      

      
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    5. REPRESENTATIONS
      AND WARRANTIES.
      Debtor
      represents and warrants that
      this
      Security Agreement has been duly and validly authorized, executed and delivered
      by Debtor and constitutes a valid and binding agreement, enforceable in
      accordance with its terms, and the execution and delivery of this Security
      Agreement do not violate, or constitute a default (with or without the giving
      of
      notice, the passage of time, or both) under any order, judgment, agreement,
      contract, or instrument to which Debtor is a party or by which Debtor is
      affected or may be bound. Debtor represents that Debtor will at all times
      maintain the Collateral in good state of repair and condition consistent with
      good business practice, including replacement of damaged, destroyed, or obsolete
      parts thereof, will pay any and all taxes thereon or applicable thereto prior
      to
      delinquency, and shall maintain at all times insurance thereon against risk
      of
      fire and other such risks as are covered by “extended coverage”, theft, burglary
      and vandalism. Such policy or policies shall provide that any loss thereunder
      and proceeds payable thereunder shall be payable to Secured Party as Secured
      Party’s interest may appear.

    

    6. INDEMNITY.
      In the
      case of any adverse claim with respect to the Collateral or any
      portion thereof arising out of any act done, or permitted or acquiesced in
      by
      Debtor, Debtor indemnifies and agrees to hold Secured Party harmless from and
      against any and all claims, losses, liabilities, damages, expenses, costs and
      actual attorneys’ fees incurred by Secured Party in or by virtue of exercising
      any right, power or remedy of Secured Party hereunder or defending, protecting,
      enforcing or prosecuting the security interest hereby created. Any such loss,
      cost, liability, damage or expense so incurred shall be repaid upon demand
      by
      Secured Party and until so paid shall be deemed a secured obligation
      hereunder.

    

    7. NO
      WAIVER BY SECURED PARTY.
      Any
      forbearance, failure, or delay by Secured
      Party in exercising any right, power or remedy hereunder shall not be deemed
      to
      be a waiver of such right, power, or remedy, and any single or partial exercise
      of any right, power, or remedy of Secured Party shall not preclude the later
      exercise of any other right, power, or remedy, each of which shall continue
      in
      full force and effect until such right, power, or remedy is specifically waived
      by an instrument in writing, executed by Secured Party.

    

    8. EFFECTIVENESS
      OF AGREEMENT.
      This
      Security Agreement and Debtors’ duties
      and obligations and Secured Party’s powers to dispose of the Collateral, and all
      other rights, powers and remedies granted to Secured Party hereunder shall
      remain in full force and effect until Debtor has satisfied and discharged all
      of
      Debtor’s obligations to Secured Party secured thereby.

    

    9. WAIVER
      BY DEBTOR.
      All
      provisions of law, in equity and by statute providing
      for, relating to, or pertaining to pledges or security interests and the sale
      of
      pledged property or property in which a security interest is granted, or which
      prescribe, prohibit, limit or restrict the right to, or conditions, notice
      or
      manner of sale, together with all limitations of law, in equity, or by statute,
      on the right of attachment in the case of secured obligations, are hereby
      expressly waived by Debtor to the fullest extent Debtor may lawfully waive
      same.

    

    10. RELEASE
      OF COLLATERAL.
      Upon
      payment in full by Debtor, in lawful money
      of
      the United States of America, to Secured Party at the address set forth in
      the
      Note of all amounts secured hereby, and performance of all other obligations
      of
      Debtor under this Security Agreement, together with any interest thereon and
      any
      costs and expenses incurred by Secured Party in the enforcement of this Security
      Agreement or of any of Secured Party’s rights hereunder, or in the enforcement
      of any other agreements (whether heretofore or hereafter entered into) between
      Debtor and Secured Party, or any of the rights of Secured Party thereunder,
      and
      upon the request of Debtor therefore, Secured Party will deliver to Debtor,
      at
      Debtor’s sole cost and expense, such termination statements and such other
      documents of release, reconveyance and reassignments as shall be sufficient
      to
      discharge Debtor of the liabilities secured hereby and to terminate and release
      the security interest in the Collateral created hereby.

     

    
      
         

      

      
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    11. MISCELLANEOUS. 

    

    11.1
      This
      Security Agreement and all of the rights and duties in connection herewith
      shall
      be governed by and construed in accordance with the laws of the State of
      California thereof without giving effect to principles governing conflicts
      of
      law.

    

    11.2
      This
      Security Agreement and all of its terms and provisions shall be binding upon
      the
      heirs, successors, transferees and assigns of each of the parties
      hereto.

    

    11.3
      In
      the event any portion of this Security Agreement is held invalid, the remaining
      portions shall remain in full force and effect as if that invalid portion had
      never been a part hereof.

    

    11.4
      In
      the event litigation is commenced to enforce or interpret this Security
      Agreement, or any provision hereof, the prevailing party shall be entitled
      to
      recover its actual costs and attorneys’ fees.

    

    11.5
      This
      Security Agreement may be amended only by written consent of each of the parties
      hereto.

    11.6
      Any
      and all notices, demands, requests, or other communications required or
      permitted by this Security Agreement or by law to be served on, given to, or
      delivered to any party hereto by any other party to this Security Agreement
      shall be in writing and shall be deemed duly served, given, or delivered when
      personally delivered to the party, or in lieu of such personal delivery, when
      deposited in the United States mail, first-class postage prepaid addressed
      to
      the party at the address herein appearing.

    

    11.7
      This
      Security Agreement constitutes the entire agreement between the parties
      pertaining to the subject matter contained herein and supercedes all prior
      and
      contemporaneous agreements, representations and understandings of the parties.
      No waiver of any of the provisions of this Security Agreement shall be deemed,
      or shall constitute a waiver of any other provision, whether or not similar,
      nor
      shall any waiver constitute a continuing waiver. No waiver shall be binding
      unless executed in writing by the party making the waiver.

    

    11.8
      This
      Security Agreement may be executed simultaneously in one or more counterparts,
      each of which shall be deemed an original, but all of which together shall
      constitute one and the same instrument. The exhibits attached hereto are made
      a
      part hereof and incorporated herein.

     

    
      
         

      

      
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    11.9
      Nothing in this Security Agreement, whether express or implied, is intended
      to
      confer any rights or remedies under or by reason of this Security Agreement
      on
      any persons other than the parties to it and their respective successors and
      assigns, nor is anything in this Security Agreement intended to relieve or
      discharge the obligations or liability of any third persons to any party to
      this
      Security Agreement, nor shall any provision give any third person any right
      of
      subrogation or action against any party to this Security Agreement.

    

    11.10
      Each party’s obligations under this Security Agreement is unique. If any party
      should default in its obligations under this Security Agreement, the parties
      each acknowledge that it would be extremely impracticable to measure the
      resulting damages; accordingly, the non-defaulting party, in addition any other
      available rights or remedies, may sue in equity for specific performance without
      the necessity of posting a bond or other security, and the parties each
      expressly waive the defense that a remedy in damages will be adequate.

    

    11.11
      All
      representations, warranties and agreements of the parties contained in this
      Security Agreement, or in any instrument, certificate, opinion or other writing
      provided for in it, shall survive the completion of all acts contemplated
      herein.

    

    11.12
      Whenever the context of this Security Agreement requires, the masculine gender
      includes the feminine or neuter gender, and the singular number includes the
      plural.

    

    11.13
      As
      used herein, the word “days” shall refer to calendar day, including holidays,
      weekends, non-business days, etc.

    11.14
      The
      captions contained herein do not constitute part of this Security Agreement
      and
      are used solely for convenience and shall in no way be used to construe, modify,
      limit or otherwise affect this Security Agreement.

    

    IN
      WITNESS WHEREOF, this Security Agreement is executed on the date first set
      forth
      above at Los Angeles County, California.

    

    
      	
              DEBTOR

            	
              SECURED
                PARTY

            
	
              PATIENT
                SAFETY TECHNOLOGIES,

            	
              AULT
                GLAZER BODNAR 

            
	
              INC.

            	
              ACQUISITION
                FUND, LLC

            
	 	 
	 	 
	
              ___________________________________

            	
              ___________________________________
                

            
	
              BY:
                Louise Glazer, M.D., Ph.D

            	
              BY:
                Milton “Todd” Ault III

            
	
              TITLE:
                Chairman and Chief Executive Officer

            	
              TITLE:
                Managing Member

            

    

    

    

    
      
         

      

      
        6CONTINUING
      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.

     

    
      
        
        

      

      
        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

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