SEPARATION AGREEMENT AND MUTUAL GENERAL RELEASE
 
This SEPARATION AGREEMENT AND MUTUAL GENERAL RELEASE (hereinafter referred to as
the "Agreement" and/or "Separation Agreement") is made and entered into by and
between Steven Kane (hereinafter referred to as "Mr. KANE") and Patient Safety
Technologies, Inc. (hereinafter referred to as "PST").  (Mr. KANE and PST are
hereinafter collectively referred to as the "Parties").  Certain additional
releasing parties identified on the signature page hereto as "Additional
Parties" are deemed Parties on a several not joint basis as to Sections 5, 7, 9,
11, 12, 13 and 19(b), (c), (d) (e), (f) and (h) and no other Sections.
 
RECITALS
 
A.           Mr. KANE was employed by PST from May 7, 2009 until the closing
date of the Company’s equity financing of at least $6 million (the "Separation
Date").
 
B.           PST and Mr. KANE are parties to a separate STOCK OPTION AGREEMENT,
dated May 7, 2009 pursuant to which Mr. KANE has options to purchase 2,000,000
shares of PST stock, of which 541,667 are currently vested will receive an
extended vesting period to the extent set forth in this Agreement.
 
C.           PST and Mr. KANE are also parties to a separate EMPLOYMENT
AGREEMENT, dated May 7, 2009.
 
D.           In order to settle certain matters between the Parties, PST desires
to provide Mr. KANE with certain benefits, and Mr. KANE desires to accept such
benefits, all on the terms and conditions set forth below.
 
E.           Mr. KANE and the Additional Parties are willing to agree to certain
elements of this Agreement in consideration of the mutual covenants contained
herein.
 
NOW, THEREFORE, in consideration of the premises and promises herein contained,
the adequacy and receipt of which are hereby acknowledged by both Parties, the
Parties agree as follows:
 
AGREEMENTS
 
1.           Incorporation of Recitals:  The foregoing Recitals are hereby
incorporated into this Agreement.
 
2.           Effect of Termination:  The Parties agree that, as of the
Separation Date, Mr. KANE not only ceased to be employed by PST but also ceased
to be a director of PST and ceased to hold any office or title, including, but
not limited to, that of Chief Executive Officer at PST.
 
 
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3.           Separation Benefits From PST:  The Parties agree that:
 
(a)           They shall treat the termination of Mr. KANE's employment with PST
as if it were a termination "without Cause" on the Separation Date and Mr. KANE
shall receive the payments, continued vesting of options and benefits expressly
provided for in Section 4(a)(ii), Section 4(a)(iii)(2) and Section 4(a)(iii)(3)
of the EMPLOYMENT AGREEMENT, except that: (i) the Parties waive any notice
otherwise required (including under Section 4(a)(i) of the EMPLOYMENT
AGREEMENT); and (ii) Mr. KANE expressly and knowingly waives permanently any
benefits, payments or rights he would otherwise have or receive under Sections
4(a)(iii)(1) [Bonus] and Section 6 [Excise Taxes] of his EMPLOYMENT AGREEMENT or
any board resolution, contract, plan or arrangement that otherwise provided for
or sought to implement the same.  The payments and benefits due under this
Section shall be paid commencing on the Separation Date and shall continue to be
subject to all of the terms and conditions of the EMPLOYMENT AGREEMENT,
including Section 4(a)(iv) thereof, it being understood that (i) this Separation
Agreement constitutes the “Release” described in the EMPLOYMENT AGREEMENT and
(ii) the severance payments owed under Section 4(a)(ii) of the EMPLOYMENT
AGREEMENT shall be payable in accordance with the Company’s standard payroll
practices.1  Mr. KANE understands that treating the termination as if it were
"without Cause" is strictly a means of defining the rights and obligations of
the Parties and shall not be construed as evidence or admission of any
wrongdoing.  Both PST and Mr. KANE have agreed to make the election in the
second sentence of Section 4(a)(iii)(2) of the EMPLOYMENT AGREEMENT to pay Mr.
KANE cash in the amount of $1,057 per month for 12 months, commencing on the
Separation Date and payable thereafter on the first of each month, in lieu of
providing medical coverage and other health and welfare benefits proportionately
over the period in which payments are made to Mr. KANE under Section 4(a)(ii) of
the EMPLOYMENT AGREEMENT (i.e., over the same twelve (12) month period).
 
(b)           Mr. KANE agrees and acknowledges that other than (i) an aggregate
of the sum of (x) $209,949 in accrued director/chairman of the board fees and
unpaid chief executive officer unpaid salary accrued prior to the last payroll
date, (y) cash-out of accrued vacation through the Separation Date (it being
understood that accrued vacation as of June 15, 2010 equaled $14,844) and (z)
salary accrued but unpaid since the last payroll date through the Separation
Date (collectively, the "Accrued Amounts"), and (ii) the amounts and benefits
provided for in Section 3(a) immediately above, PST does not and will not owe or
be obligated to pay, and Mr. KANE is not entitled to receive or claim, any
wages, compensation, reimbursement, bonus (for 2009, 2010 or any other period)
or other payments (including accrued but unused vacation and reimbursable
business-related expenses) from or on behalf of PST as of the date hereof (for
services rendered or otherwise) or as a result of the termination of Mr. KANE's
employment or his EMPLOYMENT AGREEMENT.
 
(c)           On the date hereof, the Accrued Amounts are being paid in cash,
less any legally required tax withholding, to Mr. KANE, and Mr. KANE
acknowledges receipt in full of the same.
 
(d)           Other than the vesting extension expressly contemplated by Section
4(a)(iii)(3) of the EMPLOYMENT AGREEMENT, Mr. KANE shall not vest in any more
PST options.  The terms of the OPTION AGREEMENT shall otherwise remain in full
force and effect, except that the OPTION AGREEMENT is hereby deemed amended as
follows: the exercise period for any options vested as of the date hereof shall
be extended until close of business on April 30, 2011 after which time such
option may no longer be exercised, and the exercise period for any options that
vest pursuant to Section 4(a)(iii)(3) of the EMPLOYMENT AGREEMENT shall be close
of business on September 24, 2011, after which time such options may no longer
be exercised.  Mr. KANE acknowledges and agrees that, other than the options
granted to him under his OPTION AGREEMENT and that certain warrant dated April
16, 2008 issued by PST to Mr. KANE (the “Warrant”), he is not entitled to any
equity interest in PST or any option or right with respect to any such equity
interest.

 
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(e)           Mr. KANE specifically agrees that the consideration provided for
in this Separation Agreement is in lieu and full satisfaction of any and all
payments, amounts, benefits or consideration otherwise due to him, whether under
the EMPLOYMENT AGREEMENT or otherwise, and regardless of whether the terms of
the EMPLOYMENT AGREEMENT would (in the absence of this Agreement) require a
greater payment or amount and regardless of whether a "Change of Control" of the
Company were deemed to occur now or in the future.
 
4.           Taxes:  Mr. KANE acknowledges and agrees that PST has made no
representations to him regarding the tax consequences of any amounts, securities
or benefits received by him pursuant to this Agreement.  Mr. KANE also
acknowledges that he is solely responsible for payment of all taxes, state,
federal and/or local, if any, for which he may be liable on the amounts,
securities or benefits he receives pursuant to this Agreement.  He also agrees
to indemnify and hold harmless PST, and all of its employees, principals and
agents, from and against any and all loss, cost, damage, or expense, including,
but not limited to, attorney's fees incurred by any of them, arising out of his
failure to pay the taxes, if any, for which he is liable.
 
5.           Mutual General Release Of Claims:
 
(a)           As a material inducement to PST to enter into this Agreement, Mr.
KANE (on behalf of himself, his heirs, and assigns) hereby releases and forever
discharges PST and its former, current, and future owners, officers, directors,
trustees, employees, agents, assigns, representatives, attorneys, insurers, the
Additional Parties, and all persons or entities acting by, through, under or in
concert with any of them (collectively "Releasees"), of and from any and all
Claims (as defined below) which Mr. KANE may have now or in the future arising
from any act or omission or condition arising prior to his signing this
Agreement, including, but not limited to, all claims under state, federal, or
common law, whether based in contract, tort, statute or otherwise, and
including, but not limited to, claims of discrimination and claims in any way
related to Mr. KANE's employment by PST or the termination of such employment or
the actions of the Additional Parties in connection with their Schedule 13D
filing or in connection with their transactions with PST.  Notwithstanding the
foregoing, this Section 5(a) does not release Claims:  (a) that cannot lawfully
be released by this Agreement, or (b) relating to (i) Mr. KANE’s vested benefits
pursuant to PST's 401k plan, (ii) the agreements as to Mr. KANE's stock options
as set forth herein, (iii) the rights of the parties under (A) this Separation
Agreement, (B) the Warrant or (C) that certain Indemnification Agreement dated
June 1, 2010 (the “Indemnification Agreement”); it being understood that the
Warrant and Indemnification Agreement shall remain in full force and effect
notwithstanding this Separation Agreement.  “Claims” means:  liabilities,
claims, obligations, promises, agreements, demands, damages, actions, charges,
complaints, costs, losses, debts and expenses (including attorney's fees and
costs actually incurred), and causes of action of every kind, known or unknown,
disclosed or undisclosed, matured or unmatured.
 
 
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(b)           As a material inducement to Mr. KANE to enter into this Agreement,
PST and each Additional Party (severally and not jointly with PST), each on
behalf of themselves, their respective former, current, and future owners,
officers, directors, trustees, employees, agents, assigns, successors,
affiliates, representatives, attorneys, insurers, and all persons or entities
acting by, through, under or in concert with any of them (collectively, the “PST
Releasing Parties”), hereby releases and forever discharges Mr. KANE (and his
heirs and assigns), of and from any and all Claims which a PST Releasing Party
may have now or in the future arising from any act or omission or condition
arising prior to his signing this Agreement, including, but not limited to, all
claims under state, federal, or common law, whether based in contract, tort,
statute or otherwise and claims in any way related to Mr. KANE's services to
PST.  Notwithstanding the foregoing, this Section 5(b) does not release Claims:
(a)that cannot lawfully be released by this Agreement or (b) the rights of the
parties under (A) this Separation Agreement, (B) the Warrant or (C) the
Indemnification Agreement.  For the avoidance of doubt the terms and conditions
of the Indemnification Agreement shall be applied without being affected by the
release of Claims set forth in this Agreement.
 
(c)           Each of the Parties and Additional Parties, each on behalf of
themselves, their respective former, current, and future owners, officers,
directors, trustees, employees, agents, assigns, successors, affiliates,
representatives, attorneys, insurers, and all persons or entities acting by,
through, under or in concert with any of them, represents and warrants that such
person has not assigned or transferred any of the Claims which are being
released by such person hereunder.
 
6.           No Complaints:  Mr. KANE represents that he has not filed any
complaints, charges, claims, or actions against any Releasees with any state,
federal, or local agency or court or any other forum.  He further represents and
acknowledges that he waives any right to any monetary recovery or other relief
should the Equal Employment Opportunity Commission or any other state or local
fair employment practices agency pursue any such Claims on his behalf.
 
7.           Waiver Of Unknown Claims:  The Parties understand and agree that
the released Claims include not only Claims presently known to the Parties but
also include all unknown or unanticipated Claims.  The Parties knowingly and
voluntarily waive any and all rights or benefits that they may now have, or in
the future may have, under the terms of Section 1542 of the California Civil
Code, which provides as follows:
 
           A general release does not extend to claims which the creditor does
not know or suspect to exist in his or her favor at the time of executing the
release, which if known by him or her must have materially affected his or her
settlement with the debtor.
 
8.           Confidential/Proprietary Information:  As of the fifth day after
the Separation Date, Mr. KANE shall have returned to PST all keys, computers,
and credit cards belonging to PST and any other property belonging to PST,
including intellectual property and other proprietary information.  Such
property includes, but is not limited to, all computer files, documents,
letters, notes, programs, software, media, photographs, lists, manuals, records,
notebooks, and similar repositories containing "Confidential Information,"
including all copies thereof, whether prepared by Mr. KANE or others.  Mr. KANE
agrees not, directly or indirectly, to use, disseminate, disclose, lecture upon,
or publish articles concerning any Confidential Information, unless specifically
authorized in writing by the Board of Directors of PST.  The term "Confidential
Information" means all of the valuable, confidential, and proprietary financial,
technical, economic, and/or other types of proprietary information relating to
PST in whatever form, whether oral, written, or electronic, to which Mr. KANE
has, or is given (or has had or been given), access as a result of his work for
PST.  Such Confidential Information includes, without limitation, non-public
information regarding PST's plans, programs, systems, software, accounting,
financial affairs, personnel, and operations, and specifically includes PST's
customers' contact information, preferences, and financial information.  This
restriction shall not apply to any information that (a) becomes known generally
to the public through no fault of Mr. KANE; (b) is required by applicable law,
legal process, or any order or mandate of a court or other governmental
authority to be disclosed; or (c) is reasonably believed by Mr. KANE, based upon
the advice of legal counsel, to be required to be disclosed in defense of a
lawsuit or other legal or administrative action brought against Mr. KANE;
provided, that in the case of clauses (b) or (c) above, Mr. KANE shall, to the
extent reasonably practicable, give the Chief Executive Officer of PST
reasonable advance written notice of the Confidential Information intended to be
disclosed and the reasons and circumstances surrounding such disclosure, in
order to permit PST to seek a protective order or other appropriate request for
confidential treatment of the applicable Confidential Information.
 
 
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Mr. KANE also agrees not to:  (1) use Confidential Information (including, but
not limited to, generally unavailable information regarding PST personnel,
including their compensation or performance record, whether in writing or not)
to solicit or attempt to solicit, or knowingly permit anyone under his authority
or control to solicit or attempt to solicit, any of PST's employees, agents or
consultants to terminate their relationship with PST; or (2) use Confidential
Information (including, but not limited to, generally unavailable information
regarding PST customers, including their contact information, their preferences,
or their financial information, whether in writing or not) to solicit or attempt
to solicit, or knowingly permit anyone under his authority or control to solicit
or attempt to solicit, any of PST's customers or their businesses, with whom he
become acquainted solely due to his employment, to do business like the business
they now do with PST.  Mr. KANE agrees that this provision contains restrictions
that are not greater than necessary to protect the interests of PST.
 
Mr. KANE acknowledges that he remains bound by any proprietary and/or
confidential information agreement, or non-competition/non-solicitation
agreement signed by him in conjunction with his employment by PST except to the
extent, if any, that such agreement conflicts herewith (it being understood that
additional or more stringent restrictions in such agreements are not conflicts),
in which case this Agreement shall control.
 
9.           Non-Disparagement:  For a period of two years after the Separation
Date, Mr. KANE agrees that he will not disparage PST or any of the other
Releasees in connection with any matter related to PST.  For a period of two
years after the Separation Date, PST and the Additional Parties, each on behalf
of themselves, their respective former, current, and future owners, officers,
directors, trustees, employees, agents, assigns, successors, affiliates,
representatives, attorneys, insurers, and all persons or entities acting by,
through, under or in concert with any of them, agrees that it will not disparage
Mr. KANE in connection with any matter related to PST.  Notwithstanding anything
to the contrary, this Section 9 does not prevent or limit a party from giving
truthful testimony or other legally compelled disclosure.  Either party shall be
free to disclose that Mr. KANE's service to the Company as Chief Executive
Officer ended on the Separation Date on a mutually agreeable basis.
 
10.         No Future Employment:  Mr. KANE hereby waives any right he may have
to reinstatement or future employment by PST, and Mr. KANE agrees not to seek
such employment and not to perform any work for PST unless such restrictions are
cancelled or modified by mutual consent.  Until the 60th day following the
Separation Date, Mr. KANE does agree, however, to be reasonably available by
telephone to answer reasonable questions of PST relating to an orderly
transition of his work.
 
 
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11.         Indemnification And Forfeiture In The Event Of Breach:  Each of the
Parties and Additional Parties, each on behalf of themselves, their respective
former, current, and future owners, officers, directors, trustees, employees,
agents, assigns, successors, affiliates, representatives, attorneys, insurers,
and all persons or entities acting by, through, under or in concert with any of
them, agrees to indemnify and hold the other harmless from and against any and
all loss, cost, damage or expense, including but not limited to attorney's fees
incurred by the other, arising out of any breach of this Agreement or false
representation herein by the indemnifying party.
 
12.        No Admission Of Liability:  Each of the Parties and Additional
Parties, each on behalf of themselves, their respective former, current, and
future owners, officers, directors, trustees, employees, agents, assigns,
successors, affiliates, representatives, attorneys, insurers, and all persons or
entities acting by, through, under or in concert with any of them, acknowledges
and agrees in good faith that this Agreement shall never at any time or for any
purpose be considered as an admission of liability or responsibility on the part
of any party to this Section or its affiliates.
 
13.        No Reliance On Other Representations:  Mr. KANE represents and
acknowledges that in executing this Agreement, he does not rely and has not
relied upon any representation or statements made by any of the Releasees with
regard to the subject matter, basis, or effect of this Agreement or otherwise
beyond those expressly contained herein.  Mr. KANE represents that he has
carefully read and fully understands all provisions of this Agreement, and that
he is voluntarily entering into this Agreement after adequate time to consider
its terms.
 
14.        Confidentiality:  Except as required by law or court order or to
enforce its terms, Mr. KANE agrees that he will keep, and has kept, the terms of
this Separation Agreement and Release confidential except for communications
with his immediate family members, attorneys and other persons who have a need
to know the terms of the Agreement in order to comply with its provisions or
provide legal or tax advice.  Mr. KANE understands and agrees that all persons
who are provided such information must be advised of the confidentiality of the
information and required to comply with the terms of this Section.  Should Mr.
KANE ever be subpoenaed or otherwise called upon to testify or disclose the
terms or amount of this Separation Agreement and Release, he agrees to
immediately notify the Board of Directors of PST and to resist disclosure until
PST has had a reasonable opportunity of not less than ten (10) days to object or
take other action to protect its interests.  Notwithstanding the foregoing, the
Parties all acknowledge that the Company is entitled to and expect to file this
Agreement with the SEC on a Current Report on Form 8-K or other appropriate SEC
form or report.
 
15.         Acknowledgements:  Mr. KANE acknowledges that, other than the
Accrued Amounts that are being paid on the date hereof, he has received timely
payment in full for all compensation (of any sort, including, but not limited
to, wages and vacation) earned by him during him employment with PST, and for
all reimbursement of expenses (of any sort) incurred by him during him
employment with PST and for which reimbursement would be required.  Mr. KANE
also acknowledges that he has no work-related injury, illness, disease, or
condition, and that he has not been unlawfully denied any family or medical
leave or otherwise subjected to unlawful interference in that regard.  Mr. KANE
further acknowledges that it is his intent and understanding that he is entitled
to no severance or separation benefits other than as expressly provided for in
this Agreement.
 
 
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16.         Right to an Attorney, Time to Consider, Revocation. Mr. KANE
acknowledges and agrees that he was provided twenty-one (21) days to consider
this Agreement and to consult with counsel and PST has advised Mr. KANE of his
right to do so. To the extent that Mr. KANE has taken less than twenty-one (21)
days to consider this Agreement, he acknowledges that he has had sufficient time
to consider the Agreement and to consult with counsel and that he did not desire
additional time.  This Agreement will become effective on the Separation Date,
provided, however, that for 7 calendar days following the Separation Date, Mr.
KANE may revoke this Agreement by notifying the undersigned representative of
PST in writing by registered letter.  In the event of such revocation, this
Agreement shall be deemed rescinded and the parties hereto shall be placed back
as closely as possible to their positions prior to entering into this
Agreement.  No other signatory hereto may revoke this Agreement.
 
17.         Standstill.  Mr. KANE shall not, alone or with any "group," for the
18 months following the date hereof, directly or indirectly, acquire "beneficial
ownership" of any securities of PST constituting (including upon conversion or
exercise of such securities) more than 1% of the total outstanding shares of
PST, where "group" and "beneficial ownership" are as defined in Section 13(d) of
the Securities Act of 1934 and the rules promulgated pursuant thereto.  For
purposes of this Section 17, any securities Mr. KANE acquires through exercise
of options held on the date hereof shall be disregarded.  In addition, during
such 18 month period, Mr. KANE shall not, directly or indirectly, participate in
any solicitation of proxies in regard to PST.
 
18.         Insurance.  In addition to any other obligation under Mr. KANE's
Indemnification Agreement with PST, PST agrees and covenants that for a period
of no less than four years following the Separation Date (the "Coverage
Period"), PST shall maintain in full force and effect for the benefit of each
Director (including Mr. KANE) as a named insured Director & Officer Liability
Insurance on terms and conditions (including but not limited to policy limits,
deductibles, scope of coverage and the like with a financially sound insurance
carrier) no less favorable as such insurance is currently in effect as of the
Separation Date.
 
19.         Miscellaneous:  In further consideration of this Agreement, Mr. KANE
and PST agree as follows:
 
(a)           The terms mentioned in the preceding paragraphs of this Agreement
are the entire and only consideration for it, and each of the Parties shall be
responsible for payment of his or its own attorney's fees, costs, and legal
expenses, if any; provided that the prevailing party in any dispute arising out
of or related to this Agreement shall be entitled to collect its costs and
expenses (including attorneys’ fees) from the non-prevailing party(ies);
 
(b)           The language of all parts of this Agreement shall in all cases be
construed as a whole, according to its fair meaning, and not strictly for or
against any of the Parties;
 
(c)           This Agreement is entered into in the State of California and
shall be construed and interpreted in accordance with its law;
 
(d)           The various provisions of this Agreement are severable and if any
is unenforceable, at law or in equity, that provision may be severed, leaving
the others remaining in full force and effect;
 
 
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(e)           Headings contained in this Agreement are for convenience only and
shall not be considered for any purpose in construing the Agreement;
 
(f)           This Agreement may only be modified by a written agreement
identified as an amendment/modification to this Agreement and signed by the
Parties hereto; and
 
(g)           The entirety of the STOCK OPTION AGREEMENT, EMPLOYMENT AGREEMENT,
Warrant and Indemnification Agreement, as may have been modified by this
Agreement, are incorporated herein by reference and shall survive the execution
of this Agreement.
 
(h)           This Agreement and the documents referenced herein contain the
entire agreement between the Parties to it with regard to the matters set forth
in it and shall be binding upon and inure to the benefit of the executors,
administrators, personal representatives, heirs, successors and assigns of
each.  This Agreement fully supersedes any and all negotiations, and all prior
written, oral, or implied agreements or understandings between the Parties
pertaining to the subject matters hereof.
 
(i)           This Agreement may be executed in one or more counterparts
(including by means of telecopied or electronic signature pages), all of which
shall be considered one and the same agreement, and shall become effective when
one or more such counterparts have been signed by each of the parties hereto and
delivered to the other party hereto.
 
PLEASE READ CAREFULLY.  THIS SEPARATION AGREEMENT AND GENERAL RELEASE INCLUDES A
RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.

DATED:
  
 
  
     
Steven Kane
       
DATED:
  
 
PATIENT SAFETY TECHNOLOGIES, INC.
             
By:
  
       
Authorized Signatory
       
[Signatures continued]
 

 
 
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Additional Parties to Separation Agreement: Sections 5, 7, 9, 11, 12, 13 and
19(b), (c), (d) (e), (f) and (h) only:

DATED:
  
 
John P. Francis
             
  
     
John P. Francis
       
DATED:
  
 
Brian Stewart
             
  
     
Brian Stewart
       
DATED:
  
 
Wenshen Lin
             
  
     
Wenshen Lin
       
DATED:
  
 
Radisson Trading Company
             
By:
  
       
Authorized Signatory
       
DATED:
  
 
A Plus International, Inc.
             
By:
  
       
Authorized Signatory
       
DATED:
  
 
Catalysis Partners, LLC
     
by Francis Capital Management, LLC
     
by: John Francis, Managing Member
             
By:
  
       
Authorized Signatory

 
 
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DATED:
  
 
Catalysis Offshore, Ltd.
     
by Francis Capital Management, LLC
     
by: John Francis, Managing Member
             
By:
  
       
Authorized Signatory
       
DATED:
  
 
Francis Capital Management, LLC
     
by: John Francis, Managing Member
             
By:
  
       
Authorized Signatory

 
 
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