Employment
        Agreement

      


      


      THIS
        EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of October
        31, 2005 and shall be effective as of July 18, 2005 (the “Effective Date”) by
        and between SurgiCount
        Medical, Inc. (the
        “Company”), a
        California corporation and wholly owned subsidiary of Patient
        Safety Technologies, Inc.
        (“Parent”), a Delaware corporation, both with offices located at 100 Wilshire
        Boulevard, Suite 1500, Santa Monica, California, 90401, and Richard
        Bertran, an
        individual with an address 27631 Sanderling Way, Temecula, California, 92591
        (“Individual”). This Agreement replaces and supercedes that certain Employment
        Agreement entered into as of July 15, 2005 by and between Parent and Individual,
        in its entirety.

      


      WHEREAS,
        the Company is in the business of patient safety products and content; and
        

      


      WHEREAS,
        Individual has had experience in the sales and marketing of businesses in
        the
        surgical sponge and hospital supply sales; and

      


      WHEREAS,
        the Company desires to retain the services of Individual; and

      


      WHEREAS,
        Individual is willing to be employed by the Company.

      


      NOW,
        THEREFORE, in consideration of the mutual covenants contained herein, the
        parties agree as follows:

      


      


      1.
        Employment.
        Individual is hereby employed and engaged to serve the Company as the Executive
        Vice-President of Sales and Marketing of the Company, or such additional
        titles
        as the Company shall specify from time to time, and Individual does hereby
        accept, and Individual hereby agrees to such engagement and employment.


      


      2.
        Duties.
        Individual shall be responsible for the overall sales and marketing of the
        Company. In addition, Individual’s duties shall be such duties and
        responsibilities as the Company shall specify from time to time, and shall
        entail those duties customarily performed by the Executive Vice-President
        of
        Sales and Marketing of a company with a sales volume and number of employees
        commensurate with those of the Company. Individual shall have such authority,
        discretion, power and responsibility, and shall be entitled to office,
        secretarial and other facilities and conditions of employment, as are customary
        or appropriate to his position. Individual shall diligently and faithfully
        execute and perform such duties and responsibilities, subject to the general
        supervision and control of the Company’s Chief Executive Officer and board of
        directors. Individual shall be responsible and report only to the Company’s
        Chief Executive Officer. The Company’s Chief Executive Officer and board of
        directors, in its sole and absolute discretion, shall determine Individual’s
        duties and responsibilities and may assign or reassign Individual to such
        duties
        and responsibilities as it deems in the Company's best interest. Individual
        shall devote his full-time attention, energy, and skill during normal business
        hours to the business and affairs of the Company and shall not, during the
        Employment Term, as that term is defined below, be actively engaged in any
        other
        business activity, except with the prior written consent of the Company’s Chief
        Executive Officer and board of directors. 

      


      Nothing
        in this Agreement shall preclude Individual from devoting reasonable periods
        required for:

      


      
        	 	
                (a)

              	
                serving
                  as a director or member of a committee of any organization or corporation
                  involving no conflict of interest with the interests of the
                  Company;

              


      

       

       

      
        
          
          

        

        
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                (b)

              	
                serving
                  as a consultant in his area of expertise (in areas other than in
                  connection with the business of the Company), to government, industrial,
                  and academic panels where it does not conflict with the interests
                  of the
                  Company; and

              


      

      


      
        	 	
                (c)

              	
                managing
                  his personal investments or engaging in any other non-competing
                  business;
                  provided
                  that such activities do not materially interfere with the regular
                  performance of his duties and responsibilities under this Agreement
                  as
                  determined by the Company.

              


      

      


      3.
        Best Efforts of Individual.
        During
        his employment hereunder, Individual shall, subject to the direction and
        supervision of the Company’s Chief Executive Officer and board of directors,
        devote his full business time, best efforts, business judgment, skill, and
        knowledge to the advancement of the Company's interests and to the discharge
        of
        his duties and responsibilities hereunder. Notwithstanding the foregoing,
        nothing herein shall be construed as preventing Individual from investing
        his
        assets in any business.

      


      4.
        Employment Term.
        Unless
        terminated pursuant to Section 12 of this Agreement, the term of this Agreement
        shall commence as of the Effective Date of this Agreement and shall continue
        for
        a term of thirty-six (36) months (the “Initial Term”), and shall be
        automatically renewed for successive one (1) year terms (the “Renewal Term”)
        unless a party hereto delivers to the other party written notice of at least
        thirty (30) days. 

      


      5.
        Compensation of Individual. 

      


      
        	(a)  	
                Base
                  Compensation.
                  As
                  compensation for the services provided by Individual under this
                  Agreement,
                  the Company shall pay Individual an annual salary of Two Hundred
                  Thousand
                  Dollars ($200,000) ("Base Compensation").


              


      

      


      
        	(b)  	
                Stock
                  and Stock Options.
                  Individual shall also be eligible to receive shares of Parent’s authorized
                  stock options to purchase shares of Parent’s authorized stock from time to
                  time as determined by the board of directors and detailed herein:
                  Individual will receive Two Hundred Thousand (200,000) stock options,
                  vesting equally per year over three (3) years (i.e.,
                  66,667
                  shares on July 18, 2006; 66,667 shares on July 18, 2007; and 66,666
                  on
                  July 18, 2008) at a strike price of $5.00. Further, Individual
                  will
                  receive Ten Thousand (10,000) shares in a restricted stock grant
                  as a
                  signing bonus, payable within thirty (30) days of the Effective
                  Date.

              


      

      


      
        	(c)  	
                Milestones
                  Options. In
                  addition to the Base Compensation, Individual shall be eligible
                  to receive
                  a milestone bonus determined by the Chief Executive Officer and
                  board of
                  directors, based on the performance of the Company, as detailed
                  herein:

              


      

      


      
        	(i)  	
                Individual
                  will be granted Fifty Thousand (50,000) stock options of Parent
                  when
                  Individual reaches Five Million Dollars ($5,000,000) in sales for
                  SurgiCount Medical, Inc, vested at grant
                  date.

              


      

      
        	(ii)  	
                Individual
                  will be granted Fifty Thousand (50,000) stock options of Parent
                  when
                  Individual obtains a certain mutually agreed milestone as set by
                  Chief
                  Executive Officer, Individual and Health West Marketing, together,
                  vested
                  at grant date. 

              


      

      


      6.
        Benefits. Individual
        shall also be entitled to participate in any and all Company benefit plans,
        from
        time to time in effect for employees of the Company. Such participation shall
        be
        subject to the terms of the applicable plan documents and generally applicable
        Company policies. Individual shall also receive an automobile allowance of
        $10,000 per year (given that Individual adheres to Company policy on auto
        allowance) and use of a Company cellular telephone, paid for by
        Company.

      


      
        
          
          

        

        
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      7.
        Vacation, Sick Leave and Holidays.
        Individual shall be entitled to two (2) weeks of paid vacation annually,
        with
        such vacation to be scheduled and taken in accordance with the Company's
        standard vacation policies. In addition, Individual shall be entitled to
        such
        sick leave and holidays at full pay in accordance with the Company's policies
        established and in effect from time to time.

      


      8.
        Business Expenses.
        The
        Company shall promptly reimburse Individual for all reasonable out-of-pocket
        business expenses incurred in performing Individual’s duties and
        responsibilities hereunder in accordance with the Company's policies, provided
        Individual promptly furnishes to the Company adequate records of each such
        business expense.

      


      9.
        Location of Individual's Activities. Individual’s
        principal place of business in the performance of his duties and obligations
        under this Agreement shall be at a place to be determined by the Chief Executive
        Officer. Notwithstanding the preceding sentence, Individual will engage in
        such
        travel and spend such time in other places as may be necessary or appropriate
        in
        furtherance of his duties hereunder. 

      


      10.
        Confidentiality.
        Individual recognizes that the Company has and will have business affairs,
        products, future plans, trade secrets, customer lists, and other vital
        information (collectively "Confidential Information") that are valuable assets
        of the Company. Individual agrees that he shall not at any time or in any
        manner, either directly or indirectly, divulge, disclose, or communicate
        in any
        manner any Confidential Information to any third party without the prior
        written
        consent of the Company’s board of directors. Individual will use his best
        efforts to protect the Confidential Information and treat it as strictly
        confidential.

      


      11.
        Non-Competition.
        Individual acknowledges that he has gained, and will gain extensive knowledge
        in
        the business conducted by the Company, and has had, and will have, extensive
        contacts with customers and vendors of the Company. Accordingly, Individual
        agrees that he shall not compete directly or indirectly with the Company,
        set
        forth specifically as surgical dressings that are machine identified, during
        the
        Employment Term and shall not, during such period, make public statements
        in
        derogation of the Company. For the purposes of this Section 11, competing
        directly or indirectly with the Company shall mean engaging, directly or
        indirectly, as principle owner, officer, partner, consultant, advisor, investor,
        or otherwise, either alone or in association with others, in the operation
        of
        any entity engaged in a business similar to that of the Company’s. Individual
        further agrees that following termination of his employment with the Company,
        he
        shall not use the Company's Confidential Information, contacts, and vendors
        to
        compete, directly or indirectly, with the Company or against the interests
        of
        the Company. 

      


      12.
        Termination.
        Notwithstanding any other provisions hereof to the contrary, Individual’s
        employment hereunder shall terminate under the following
        circumstances:

      


      
        	(a)  	
                Voluntary
                  Termination by Individual.
                  Individual shall have the right to voluntarily terminate this Agreement
                  and his employment hereunder at any time during the Employment
                  Term.
                  

              


      

      


      
        	(b)  	
                Voluntary
                  Termination by the Company. The
                  Company shall have the right to voluntarily terminate this Agreement
                  and
                  Individual’s employment hereunder at any time during the Employment Term.
                  

              


      

      


      
        	(c)  	
                Termination
                  for Cause.
                  The Company shall have the right to terminate this Agreement and
                  Individual’s employment hereunder at any time for cause. As used in this
                  Agreement, "cause" shall mean (i) refusal by Individual
                  to implement
                  or adhere to a written directive of the Company’s Chief Executive Officer
                  or board of directors other than a directive that would result
                  in illegal
                  or unethical conduct; (ii) material breach of a material
                  term or
                  representation of this Agreement, (iii) Individual’s conviction of a
                  felony, (iv) dishonesty, gross negligence, or other act
                  by Individual
                  materially detrimental to the Company or its good will, or materially
                  damaging to its relationships with its customers, suppliers, or
                  employees;
                  (v)  breach of fiduciary duty, or (vi) misappropriation
                  by
                  Individual of funds from or resources of the Company. Cause shall
                  not be
                  deemed to exist unless the Company shall have first given Individual
                  a
                  written notice thereof specifying in reasonable detail the facts
                  and
                  circumstances alleged to constitute "cause" and ten (10) days after
                  such
                  notice such conduct has, or such circumstances have, as the case
                  may be,
                  not entirely ceased and not been entirely
                  remedied.

              


      

       

       

      
        
          
          

        

        
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        	(d)  	
                Termination
                  Upon Death or for Disability.
                  This Agreement and Individual’s employment hereunder, shall automatically
                  terminate upon Individual’s death or upon written notice to Individual and
                  certification of Individual’s disability by a qualified physician or a
                  panel of qualified physicians if Individual becomes disabled beyond
                  a
                  period of twelve (12) months and is unable to perform the duties
                  contain
                  in this Agreement. 

              


      

      


      
        	(e)  	
                Effect
                  of Termination.
                  In
                  the event that this Agreement and Individual’s employment is voluntarily
                  terminated by Individual pursuant to Section 12(a), or in the event
                  the
                  Company terminates this Agreement for cause pursuant to Section
                  12(c), all
                  obligations of the Company and all duties, responsibilities and
                  obligations of Individual under this Agreement, except for those
                  obligations set forth in Sections 8, 10, 11 and 17 hereof, shall
                  cease and
                  all unvested stock options and/or unearned milestone bonuses, will
                  be
                  forfeited.

              


      

      


      Upon
        termination pursuant to Section 12(b), where the Company voluntarily terminates
        this Agreement, the Company shall (i) pay Individual as severance compensation
        a
        cash sum equal to fifteen (15) months' of the Base Compensation, plus award
        the
        milestone option grants under Section 5(c) hereof, to the extent such milestones
        are met within the Employment Term, and (ii) automatically vest all unvested
        stock options granted pursuant to Section 5(b) had the Agreement not been
        terminated. However, if termination pursuant to Section 12(b) occurs within
        the
        final fifteen (15) months of the Employment Term, then Individual will receive
        whatever Base Compensation as would have been payable for the remaining
        Employment Term of this Agreement, or through July 18, 2008.

      


      In
        addition, if Individual voluntarily terminates, all unvested stock options
        and/or unearned milestone bonuses, will be forfeited. In the event of a sale
        of
        the Company, to the extent not already vested, all 200,000 of Individual’s stock
        options shall automatically vest. In the event of a merger, consolidation,
        sale,
        or change of control, the Company's rights hereunder shall be assigned to
        the
        surviving or resulting company, which company shall then honor this Agreement
        with Individual.

      


      The
        obligations set forth in Sections 8, 10, 11, 12 and 17 of this Agreement
        are
        intended to survive the termination of Individual's employment with Company.
        

      


      13.
        Resignation as Officer.
        In the
        event that Individual’s employment with the Company is terminated for any reason
        whatsoever, Individual agrees to immediately resign as an Officer and/or
        Director of the Company, if applicable, and any related entities. For the
        purposes of this Section 13, the term the "Company" shall be deemed to include
        subsidiaries, parents, and affiliates of the Company. 

      


      14.
        Governing Law, Jurisdiction and Venue.
        This
        Agreement shall be governed by and construed in accordance with the laws
        of the
        State of California without giving effect to any applicable conflicts of
        law
        provisions.

      


      
        
          
          

        

        
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      15.
        Business Opportunities.
        During
        the Employment Term, Individual agrees to bring to the attention of the
        Company’s board of directors all written business proposals that come to
        Individual’s attention and all business or investment opportunities of whatever
        nature that are created or devised by Individual and that relate to areas
        in
        which the Company conducts business and might reasonably be expected to be
        of
        interest to the Company or any of its subsidiaries.

      


      16.
        Employee’s Representations and Warranties.
        Individual hereby represents and warrants that he is not under any contractual
        obligation to any other company, entity or individual that would prohibit
        or
        impede Individual from performing his duties and responsibilities under this
        Agreement and that he is free to enter into and perform the duties and
        responsibilities required by this Agreement. Individual hereby agrees to
        indemnify and hold the Company and its officers, directors, employees,
        shareholders and agents harmless in connection with the representations and
        warranties made by Individual in this Section 16.

      


      17.
        Indemnification.

      


      
        	(a)  	
                The
                  Company agrees that if Individual is made a party, or is threatened
                  to be
                  made a party, to any action, suit or proceeding, whether civil,
                  criminal,
                  administrative or investigative (a "Proceeding"), by reason of
                  the fact
                  that he is or was a director, officer or employee of the Company
                  or is or
                  was serving at the request of the Company as a director, officer,
                  member,
                  employee or agent of another corporation, partnership, joint venture,
                  trust or other enterprise, including service with respect to employee
                  benefit plans, whether or not the basis of such Proceeding is Individual’s
                  alleged action in an official capacity while serving as a director,
                  officer, member, employee or agent, Individual shall be indemnified
                  and
                  held harmless by the Company to the fullest extent permitted or
                  authorized
                  by the Company's certificate of incorporation or bylaws or, if
                  greater, by
                  the laws of the State of California, against all cost, expense,
                  liability
                  and loss (including, without limitation, attorney's fees, judgments,
                  fines, ERISA excise taxes or penalties and amounts paid or to be
                  paid in
                  settlement) reasonably incurred or suffered by Individual in connection
                  therewith, and such indemnification shall continue as to Individual
                  even
                  if he has ceased to be a director, member, employee or agent of
                  the
                  Company or other entity and shall inure to the benefit of Individual’s
                  heirs, executors and administrators. The Company shall advance
                  to
                  Individual to the extent permitted by law all reasonable costs
                  and
                  expenses incurred by him in connection with a Proceeding within
                  20 days
                  after receipt by the Company of a written request, with appropriate
                  documentation, for such advance. Such request shall include an
                  undertaking
                  by Individual to repay the amount of such advance if it shall ultimately
                  be determined that he is not entitled to be indemnified against
                  such costs
                  and expenses.

              


      

      


      
        	(b)  	
                Neither
                  the failure of the Company (including its board of directors, independent
                  legal counsel or stockholders) to have made a determination prior
                  to the
                  commencement of any Proceeding concerning payment of amounts claimed
                  by
                  Individual that indemnification of Individual is proper because
                  he has met
                  the applicable standard of conduct, nor a determination by the
                  Company
                  (including its board of directors, independent legal counsel or
                  stockholders) that Individual has not met such applicable standard
                  of
                  conduct, shall create a presumption that Individual has not met
                  the
                  applicable standard of conduct.

              


      

      


      
        	(c)  	
                The
                  Company agrees to continue and maintain a directors' and officers'
                  liability insurance policy covering Individual to the extent the
                  Company
                  provides such coverage for its other executive
                  officers.

              


      

       

       

      
        
          
          

        

        
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        	(d)  	
                Promptly
                  after receipt by Individual of notice of any claim or the commencement
                  of
                  any action or proceeding with respect to which Individual is entitled
                  to
                  indemnity hereunder, Individual shall notify the Company in writing
                  of
                  such claim or the commencement of such action or proceeding, and
                  the
                  Company shall (i) assume the defense of such action or proceeding,
                  (ii)
                  employ counsel reasonably satisfactory to Individual, and (iii)
                  pay the
                  reasonable fees and expenses of such counsel. Notwithstanding the
                  preceding sentence, Individual shall be entitled to employ counsel
                  separate from counsel for the Company and from any other party
                  in such
                  action if Individual reasonably determines that a conflict of interest
                  exists which makes representation by counsel chosen by the Company
                  not
                  advisable. In such event, the reasonable fees and disbursements
                  of such
                  separate counsel for Individual shall be paid by the Company to
                  the extent
                  permitted by law.

              


      

      


      
        	(e)  	
                After
                  the termination of this Agreement and upon the request of Individual,
                  the
                  Company agrees to reimburse Individual for all reasonable travel,
                  legal
                  and other out-of-pocket expenses related to assisting the Company
                  to
                  prepare for or defend against any action, suit, proceeding or claim
                  brought or threatened to be brought against the Company or to prepare
                  for
                  or institute any action, suit, proceeding or claim to be brought
                  or
                  threatened to be brought against a third party arising out of or
                  based
                  upon the transactions contemplated herein and in providing evidence,
                  producing documents or otherwise participating in any such action,
                  suit,
                  proceeding or claim. In the event Individual is required to appear
                  after
                  termination of this Agreement at a judicial or regulatory hearing
                  in
                  connection with Individual's employment hereunder, or Individual's
                  role in
                  connection therewith, the Company agrees to pay Individual a sum,
                  to be
                  mutually agreed upon by Individual and the Company, per diem for
                  each day
                  of his appearance and each day of preparation
                  therefor.

              


      

      


      18.
        Notices.
        All
        demands, notices, and other communications to be given hereunder, if any,
        shall
        be in writing and shall be sufficient for all purposes if personally delivered,
        sent by facsimile or sent by United States mail to the address below or such
        other address or addresses as such party may hereafter designate in writing
        to
        the other party as herein provided.

      
 

      
        	
                 Company
                  or Parent:

              	 100 Wilshire Blvd., Suite
                1500	
                 Individual:

              	 Richard Bertran
	 	 Santa Monica, CA
                90401	 	 27631 Sanderling
                Way
	 	 Fax: (310) 752-1486	 	 Temecula, CA
                92591
	 	 Phone: (310)
                752-1416 	 	 Phone: (951)
                699-7255
	 	 	 	 Cell: (951)
                217-8331


      

          

           

      19.
        Entire Agreement.
        This
        Agreement contains the entire agreement of the parties and there are no other
        promises or conditions in any other agreement, whether oral or written. This
        Agreement supersedes any prior written or oral agreements between the parties.
        This Agreement may be modified or amended, if the amendment is made in writing
        and is signed by both parties. This Agreement is for the unique personal
        services of Individual and is not assignable or delegable, in whole or in
        part,
        by Individual. This Agreement may be assigned or delegated, in whole or in
        part,
        by the Company and, in such case, shall be assumed by and become binding
        upon
        the person, firm, company, corporation or business organization or entity
        to
        which this Agreement is assigned. The headings contained in this Agreement
        are
        for reference only and shall not in any way affect the meaning or interpretation
        of this Agreement. If any provision of this Agreement shall be held to be
        invalid or unenforceable for any reason, the remaining provisions shall continue
        to be valid and enforceable. The failure of either party to enforce any
        provision of this Agreement shall not be construed as a waiver or limitation
        of
        that party's right to subsequently enforce and compel strict compliance with
        every provision of this Agreement. This Agreement may be executed in two
        or more
        counterparts, each of which shall be deemed an original, but all of which
        together shall constitute one and the same instrument and, in pleading or
        proving any provision of this Agreement, it shall not be necessary to produce
        more than one of such counterparts.

      


      
        
          
          

        

        
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      IN
        WITNESS WHEREOF, the parties have executed this Agreement as of the day and
        year
        first above written.

       

       

      
 

      
        	 Company:                    	 Individual:	 
	 SurgiCount Medical, Inc.	 	 
	 	 	 
	 	 	 
	 By: 
                /s/ Milton Ault	 /s/ Richard Bertran	 
	 Name: Milton
                C. Ault, III    	 Richard Bertran	 
	 Title: Chairman
                and CEO 	 	 
	 	 	 
	 Parent:	 	 
	 Patient Safety Technologies,
                Inc.	 	 
	 	 	 
	 By: 
                /s/ Milton Ault	 	 
	 Name: Milton
                C. Ault, III	 	 
	 Title: Chairman
                and CEO	 	 
	 	 	 


      

                                          
        

      


      
        
          
          

        

        
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