Document:

10.6

 

Commitment Letter

 

 

Majority Shareholder Yong Xu hereby promises
to pay all the expenses Yinhang Internet Technologies Development Inc. incurred for its operations. Yinhang Internet Technologies
Development Inc. hereby promises to repay Yong Xu once it is profitable.

 

 

 

Yinhang Internet Technologies Development,
Inc.

 

Director’s Signature:

 

Date: June 10, 2012

 

 

Majority Shareholder’s Signature:

 

Date: June 10, 2012SEVERANCE AGREEMENT
(this “Agreement”), dated as of June 22, 2012 (the “Effective Date”), between P&F
INDUSTRIES, INC., a Delaware corporation (the “Company”), and JOSEPH A. MOLINO, JR. (the “Executive”).

 

W I T N E S S E T H

 

WHEREAS, the
Company believes that the establishment and maintenance of a sound and vital management of the Company is essential to the protection
and enhancement of the interests of the Company and its stockholders; and

 

WHEREAS, the
Company has determined that the Executive is a key employee of the Company and that it is appropriate
to take steps to induce the Executive to remain with the Company by offering the Executive protection for a possible loss of income
upon a loss of employment under the terms and conditions set forth in this Agreement, including enhanced protection if the Executive
suffers a loss of employment under the terms and conditions set forth in this Agreement within two years following a Change
in Control (as defined below).

 

NOW THEREFORE,
in consideration of the foregoing, the mutual promises contained herein and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

1.             TERM. The term of this Agreement (the “Term”) shall commence on the Effective Date and,
unless terminated earlier as provided in Section 2, shall expire on December 31, 2014 (the “Expiration Date”);
provided that, if a Change in Control takes place prior to the Expiration Date, the Term shall be a period of two years after the
date of the consummation of the Change in Control. Notwithstanding anything in this Agreement to the contrary, if the Company becomes
obligated to make any payment to the Executive pursuant to the terms hereof at or prior to the expiration of this Agreement, then
this Agreement shall remain in effect for such and related purposes (including but not limited to under Section 4(c)) until all
of the Company’s obligations hereunder are fulfilled.

 

2.             TERMINATION. The Executive’s employment with the Company and the Term shall terminate prior to the Expiration
Date on the first of the following to occur prior to the Expiration Date:

 

(a)        Disability. Upon 30 days’ prior written notice by the Company to the Executive of termination due to
Disability if the Executive does not return to full-time continuous employment with the Company within such 30 days. For purposes
of this Agreement, “Disability” shall be defined as the Executive’s becoming physically or mentally disabled,
whether totally or partially, so that he has been unable to perform his material duties hereunder for a period of 180 days (including
weekends and holidays) during any 365-day period.

 

(b)        Death. Automatically on the date of death of the Executive.

 

    	 

    	 	

    
 

(c)        Cause. Upon the Company’s termination of the Executive’s employment hereunder for Cause which
shall be effective immediately upon written notice by the Company to the Executive of a termination for Cause. “Cause”
shall mean the Executive’s:

 

(i)refusal
or willful failure to attempt in good faith to perform his duties for the Company (other than as a result of physical of mental
incapacity);

 

(ii)gross
negligence or willful misconduct with regard to the Company, its assets or employees of a material nature or any fraud, theft
or material dishonesty with regard to the Company or in the performance of his duties for the Company;

 

(iii)willful
misconduct which in the good faith judgment of the Chief Executive Officer of the Company (the “CEO”) or the
Board of Directors of the Company (the “Board”) has or may materially damage the Company economically or reputation
wise;

 

(iv)commission
of any felony or any other crime involving fraud, dishonesty, securities law violations or moral turpitude, provided that any conviction
for, or pleading guilty or nolo contendere to, any such felony or other crime shall conclusively be deemed acknowledgement by the
Executive of commission thereof;

 

(v)failure
to attempt in good faith to follow the written direction of the CEO or the Board; or

 

(vi)material
breach of a material term of this Agreement or any other material agreement with the Company that is not cured within 15 days of
the giving of written notice thereof.

 

(d)         Without Cause. Upon written notice by the Company to the Executive of an involuntary termination without Cause,
other than for death or Disability.

 

(e)         Good Reason. Upon written notice by the Executive to the Company of a termination for Good Reason upon or
within two years following a Change in Control, provided that such notice is given within 60 days of the Good Reason event. “Good
Reason” shall mean the occurrence of any of the following events, without the express written consent of the Executive,
unless such events are cured by the Company within 30 days following written notification by the Executive to the Company that
he intends to terminate his employment hereunder for one of the reasons set forth below:

 

(i)any
reduction or diminution in the Executive’s title immediately prior to the Change in Control;

 

(ii)any
material reduction or diminution in the Executive’s then authorities, duties, or responsibilities with the Company;

 

(iii)a
material reduction in the Executive’s base salary or benefits, in either case as in effect immediately prior to the Change
in Control (but not including any reduction related to a broader compensation reduction by the Company that is not limited to any
particular employee or executive);

 

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(iv)a
relocation of the Executive’s principal business location to an area outside of a 35 mile radius of both the Executive’s
principal business location and the Executive’s principal residence at the time of such relocation; or

 

(v)a
material breach of this Agreement by the Company.

 

Notwithstanding
the foregoing, the Executive agrees that, during any period of incapacity, the Company may appoint or temporarily assign his duties
to another or others without such action resulting in Good Reason.

 

(f)         
Without Good Reason. Upon 60 days’ prior written notice by the Executive to the Company of the Executive’s
voluntary termination of employment without Good Reason (which the Company may, in its sole discretion, make effective earlier
than any notice date).

 

3.            CONSEQUENCES OF TERMINATION.

 

(a)         Disability. In the event the Executive’s employment is terminated due to Disability upon or prior to
the Expiration Date, the Company shall pay or provide the Executive (i) any unpaid base salary through the date of termination
paid in accordance with the Company’s normal payroll policies as if the Executive were an employee, (ii) any annual bonus
earned but unpaid with respect to the fiscal year ending on or preceding the date of termination, paid when such annual bonus would
have ordinarily been paid in accordance with its terms, (iii) reimbursement for any unreimbursed expenses through the date of termination
incurred and paid in accordance with the Company’s normal reimbursement procedures, (iv) any other amounts and benefits the
Executive is entitled to receive under any employee benefit plan in accordance with the terms of the applicable plan (collectively
items (i) through (iv) shall be hereafter referred to as the “Accrued Amounts”), (v) a pro-rata portion of the
Executive’s annual bonus for the fiscal year in which the Executive’s termination occurs based on actual results for
the fiscal year (determined by multiplying the amount of such bonus which would be due for the full fiscal year by a fraction,
the numerator of which is the number of days during the fiscal year of termination that the Executive is employed by the Company
and the denominator of which is 365), paid when such annual bonus would have ordinarily been paid in accordance with its terms
(the “Pro Rata Bonus”), and (vi) subject to Section 18(b) hereof and solely to the extent the Executive does
not otherwise receive such coverage under any other medical benefits available to the Executive as a result of his Disability,
if the Executive timely elects continuation coverage (“COBRA Coverage”) under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) for continuation of coverage under
the Company’s group health insurance plans in which the Executive participated immediately prior to the date of termination
(the “Health Plans”), the Company shall pay to the Executive monthly an amount equal to the difference
of the Executive’s premium costs for such COBRA Coverage for the Executive and the Executive’s dependents minus the
active employee rate under the Health Plans (excluding, for purposes of calculating cost, an employee’s
ability to pay premiums with pre-tax dollars) until the earliest of (x) one (1) year after the date of termination, (y)
the Executive’s ceasing to have a physical or mental disability that would have prevented him from performing his material
duties hereunder and (z) the Executive and the Executive’s dependents otherwise ceasing to be eligible for COBRA Coverage
(the “Disability COBRA Payments”); provided, that unless subject to further
delay as set forth in Section 18(b), the first payment of the Disability COBRA Payments will made on the sixtieth (60th)
day after the date of termination and will include payment of any amounts that would otherwise be due prior thereto. Following
a termination due to Disability all equity awards granted to the Executive shall be governed in accordance with the terms of the
applicable grant agreements.

 

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(b)         Death. In the event the Executive’s employment is terminated due to the Executive’s death upon
or prior to the Expiration Date, the Company shall pay or provide to the Executive’s estate (i) the Accrued Amounts, (ii)
the Pro Rata Bonus and (iii) subject to the Executive’s dependents timely election of COBRA Coverage under the Health Plans,
the Company shall pay to the Executive’s dependents monthly an amount equal to the difference of the premium costs for such
COBRA Coverage for the Executive’s dependents minus the active employee rate under the Health Plans (excluding,
for purposes of calculating cost, an employee’s ability to pay premiums with pre-tax dollars) until the earlier of
(i) one (1) year after the date of the Executive’s death and (ii) the Executive’s dependents ceasing to be eligible
for COBRA Coverage. Following a termination due to the Executive’s death all equity awards granted to the Executive shall
be governed in accordance with the terms of the applicable grant agreements.

 

(c)         Termination For Cause Or Voluntary Termination. In the event the Executive’s employment is terminated
upon or prior to the Expiration Date (i) by the Company for Cause, or (ii) subject to Section 4(a), by the Executive for any reason,
the Company shall pay or provide to the Executive the Accrued Amounts. Following any such termination all equity awards granted
to the Executive shall be governed in accordance with the terms of the applicable grant agreements.

 

(d)         Termination Without Cause. In the event the Executive’s employment is terminated by the Company other
than for Cause upon or prior to the Expiration Date, and Section 4(a) does not apply, the Company shall pay or provide to the Executive
(i) the Accrued Amounts; and (ii) subject to Sections 5 and 18(b), continued payments of base salary for 12 months following the
date of termination (the “Severance Payment”) paid in accordance with the Company’s normal payroll policies
as if the Executive were an employee (but off employee payroll); provided,
that unless subject to further delay as set forth in Section 18(b), the first payment of the Severance Payment will made on the
sixtieth (60th) day after the date of termination and will include payment of any amounts that would otherwise be due
prior thereto. Following any such termination all equity awards granted to the Executive shall be governed in accordance with the
terms of the applicable grant agreements. Payments and benefits provided in this Section 3(d) shall be in lieu of any termination
or severance payments or benefits for which the Executive may be eligible under any of the plans, policies or programs of the Company.

 

4.             CHANGE IN CONTROL.

 

(a)           Notwithstanding anything herein to the contrary, subject to Section 4(c), in the event a Change in Control occurs
prior to the Expiration Date and the Executive’s employment is terminated by the Company without Cause or the Executive resigns
for Good Reason within two years following such Change in Control, and in lieu of the amounts and benefits under Section 3(d) in
the event of a termination by the Company without Cause, the Company shall pay or provide to the Executive (i) the Accrued Amounts;
and (ii) subject to Sections 5 and 18(b):

 

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(A)payment
in an amount equal to 12 months Base Salary, such payment to be made as follows: (x) if the Change
in Control is not as a result of an event that constitutes a “change in control event” (a “409A Change in Control”)
within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and
the regulations and guidance promulgated thereunder (collectively “Code Section 409A”),
then such payment shall be paid to the Executive in equal installments for 12 months following the date of termination in
accordance with the Company’s normal payroll policies as if the Executive were an employee (but off employee payroll);
provided, that unless subject to further delay as set forth in Section 18(b), the first payment of such payment will
made on the sixtieth (60th) day after the date of termination and will include payment of any amounts that would otherwise
be due prior thereto, and (y) if the Change in Control does result from an event that constitutes
a 409A Change in Control, then the full amount of such payment shall be paid to the Executive in a lump sum on the 60th
day after the date of termination;

 

(B)a
lump sum amount equal to the Executive’s target annual bonus for the fiscal year in which the Executive’s termination
occurs, such payment to be made as follows: (x) if the Change in Control is not a 409A Change
in Control, then such payment shall be paid to the Executive on the later of the date such annual bonus would have ordinarily
been paid in accordance with its terms and the sixtieth (60th) day after the date of termination,
and (y) if the Change in Control does result from an event that constitutes a 409A Change in Control, then on the 60th
day after the date of termination;

 

(C)if
the Executive timely elects COBRA Coverage for continuation of coverage under
the Health Plans, the Company shall pay to the Executive monthly an amount equal to the difference of the Executive’s
premium costs for such COBRA Coverage for the Executive and the Executive’s dependents minus the active employee rate under
the Health Plans (excluding, for purposes of calculating cost, an employee’s ability to pay premiums
with pre-tax dollars) until the earliest of (I) 12 months from the date of termination, (II) the Executive becoming eligible
for medical benefits from a subsequent employer, or (III) the Executive and the Executive’s dependents otherwise ceasing
to be eligible for COBRA Coverage (the “COBRA Payments”); provided, that unless
subject to further delay as set forth in Section 18(b), the first payment of the COBRA Payments will made on the sixtieth (60th)
day after the date of termination and will include payment of any amounts that would otherwise be due prior thereto.

 

Following any such termination all
equity awards granted to the Executive shall be governed in accordance with the terms of the applicable grant agreements.

 

(b)          
For purposes of this Agreement, “Change in Control” will mean the occurrence of one of the following
events:

 

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(i)any
“person” (as such term is defined in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes, after the Effective Date, a “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing
50% or more of the combined voting power of the Company’s then outstanding securities eligible to vote for the election of
the Board (the “Company Voting Securities”); provided, however, that an event described in this subsection (i)
shall not be deemed to be a Change in Control if any of following becomes such a beneficial owner:

 

(A)the
Company or any majority-owned subsidiary (provided, that this exclusion applies solely to the ownership levels of the Company or
the majority-owned subsidiary),

 

(B)any
tax-qualified, broad-based employee benefit plan sponsored or maintained by the Company or any majority-owned subsidiary,

 

(C)any
underwriter temporarily holding securities pursuant to an offering of such securities, or

 

(D)any
person pursuant to a Non-Qualifying Transaction (as defined below);

 

(ii)individuals
who, on the Effective Date, constitute the Board (the “Incumbent Directors”) cease for any reason to constitute
at least a majority of the Board, provided that any person becoming a director subsequent to the Effective Date whose election
or nomination for election was approved by a vote of at least two-thirds of the Incumbent Directors then on the Board (either by
a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without
objection to such nomination) shall be an Incumbent Director.

 

(iii)the
consummation of a merger, consolidation, statutory share exchange or similar form of corporate transaction involving the Company
or any of its Subsidiaries that requires the approval of the Company’s stockholders, whether for such transaction or the
issuance of securities in the transaction (a “Business Combination”), unless immediately following such Business
Combination:

 

(A)50%
or more of the total voting power of:

 

(x)the
corporation resulting from such Business Combination (the “Surviving Corporation”), or

 

(y)if
applicable, the ultimate parent corporation that directly or indirectly has beneficial ownership of 100% of the voting securities
eligible to elect directors of the Surviving Corporation (the “Parent Corporation”),

 

is represented
by Company Voting Securities that were outstanding immediately prior to such Business Combination (or, if applicable, is represented
by shares into which such Company Voting Securities were converted pursuant to such Business Combination), and such voting power
among the holders thereof is in substantially the same proportion as the voting power of such Company Voting Securities among the
holders thereof immediately prior to the Business Combination;

 

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(B)no
person (other than any employee benefit plan (or related trust) sponsored or maintained by the Surviving Corporation or the Parent
Corporation), is or becomes the beneficial owner, directly or indirectly, of 50% or more of the total voting power of the outstanding
voting securities eligible to elect directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation);
and

 

(C)at
least a majority of the members of the board of directors of the Parent Corporation (or if there is no Parent Corporation, the
Surviving Corporation) following the consummation of the Business Combination were Incumbent Directors at the time of the Board’s
approval of the execution of the initial agreement providing for such Business Combination

 

(any Business Combination which
satisfies all of the criteria specified in (A), (B) and (C) above shall be deemed to be a “Non-Qualifying Transaction”);
or

 

(iv)consummation
of the sale of all or substantially all of the Company’s assets or stockholder approval of a liquidation or dissolution of
the Company, unless the voting common equity interests of the acquirer of such assets or an ongoing entity (other than a liquidating
trust), as the case may be, based on total voting power, are at least more than 50% beneficially owned, directly or indirectly,
by the Company’s shareholders in substantially the same proportions as such shareholders owned the Company’s outstanding
voting common equity interests immediately prior to such sale or liquidation and, if a plan of liquidation or dissolution, such
ongoing entity assumes all existing obligations of the Company under this Plan.

 

Notwithstanding the foregoing,
a Change in Control of the Company shall not be deemed to occur solely because any person acquires beneficial ownership of more
than 50% of the Company Voting Securities, based on total voting power, as a result of the acquisition of Company Voting Securities
by the Company which reduces the number of Company Voting Securities outstanding; provided, that, if after such acquisition by
the Company such person becomes the beneficial owner of Company Voting Securities that increases the percentage of outstanding
Company Voting Securities beneficially owned by such person, a Change in Control of the Company shall then occur.

 

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(c)      Notwithstanding anything else herein, if any payment or benefit, within the meaning of
Section 280G(b)(2) of the Code, to the Executive or for Executive’s benefit paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise in connection with, or arising out of, Executive’s employment with the
Company or a change in ownership or effective control of the Company or of a substantial portion of its assets, would be subject
to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Executive with respect to
such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the
“Excise Tax”), the amounts and benefits provided under this Agreement or otherwise that are subject to
Section 280G of the Code as a result of the transaction will be automatically reduced to an amount that equals the product of 2.99
multiplied by the Executive’s “base amount” (as determined in accordance with Sections 280G and 4999 of the Code
by the Company’s certified public accountants unless the Company and the Executive mutually agree to the appointment of an
independent certified public accounting firm), such that the Executive will not be subject to the Excise Tax. Unless otherwise
elected by the Executive, to the extent permitted under Code Section 409A, such reduction shall first be applied to any severance
payments payable to the Executive under this Agreement in reverse order of receipt, then to the vesting on any equity, with underwater
stock options first net withholding, and thereafter any in-the-money stock options starting from the stock options with smallest
spread between fair market value and exercise price, and thereafter any restricted stock or restricted stock units.

 

5.            RELEASE. Any and all amounts payable and benefits or additional rights provided pursuant to Sections 3(d)(ii)
or 4(a)(ii) shall only be payable or provided if the Executive executes and delivers to the Company a general release of all claims
against the Company in the form attached to the Agreement as Appendix A (the “Release”) (with such changes
as the Company may request to support the legality and effectiveness of the Release). The Company shall provide the Executive with
a copy of the Release within seven (7) days following the Executive’s date of termination and the Executive will be required
to provide the Company with an executed copy of the Release that has become effective within
sixty (60) days following the Executive’s date of termination.

 

6.            RESTRICTIVE COVENANTS.

 

(a)          Confidentiality. The Executive agrees that he shall not, directly or indirectly, use, make available, sell,
disclose or otherwise communicate to any person, other than in the reasonable good faith performance of his duties and for the
benefit of the Company, either during the period of the Executive’s employment or at any time thereafter, any nonpublic,
proprietary or confidential information, knowledge or data relating to the Company, any of its subsidiaries, affiliated companies
or businesses, which shall have been obtained by the Executive during the Executive’s employment by the Company. The foregoing
shall not apply to information that (i) was known to the public prior to its disclosure to the Executive; (ii) becomes generally
known to the public subsequent to disclosure to the Executive through no wrongful act of the Executive or any representative of
the Executive; or (iii) the Executive is required to disclose by applicable law, regulation or legal process (provided that the
Executive provides the Company with prior notice of the contemplated disclosure and reasonably cooperates with the Company at its
expense in seeking a protective order or other appropriate protection of such information).

 

(b)          Nonsolicitation. During the Executive’s employment with the Company and for the 12 month period thereafter,
the Executive agrees that he will not, except in the furtherance of his duties hereunder, directly or indirectly, individually
or on behalf of any other person, firm, corporation or other entity, (i) solicit or hire any employees, representatives or agents
of the Company (or any of its affiliates) or (ii) solicit any of the Company’s customers.

 

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(c)          Noncompetition. The Executive acknowledges that he performs services of a unique nature for the Company that
are irreplaceable, and that his performance of such services to a competing business will result in irreparable harm to the Company.
Accordingly, during the Executive’s employment hereunder and for the 12 month period thereafter, the Executive agrees that
the Executive will not, (i) enter the employ of (whether as an employee, consultant, independent contractor or otherwise, and whether
or not for compensation), or render any services to, any person, firm, corporation or other entity, in whatever form, engaged or
actively planning to be engaged in any Competitive Business, (ii) directly or indirectly, own, manage, operate, control or otherwise
engage in such a Competitive Business for his own account, or (iii) directly or indirectly, become interested in a Competitive
Business as an individual, partner, shareholder, director, officer, principal, agent, trustee or in any other relationship or capacity.
“Competitive Business” will mean, as of any date, any business competitive with any business then being conducted
by the Company and operating in some or all of the same geographic areas; provided that, upon the termination of the Executive’s
employment such determinations shall thereafter be determined as of the date of the termination. The foregoing shall not be violated
by the Executive’s providing services to a noncompetitive portion of a group of related businesses which noncompetitive portion
consists of less than 20% of the overall revenues of such group of related businesses measured based on the fiscal year prior to
the fiscal year in which the Executive had his initial relationship with such noncompetitive portion, nor by ownership of less
than 2% of public company stock or debt or a passive interest of less than 2% in a pooled account, such as a hedge fund, private
equity fund or mutual fund.

 

(d)          Nondisparagment. During the Employment Term and thereafter, the Executive agrees not to disparage or
encourage or induce others to disparage the Company or any of its affiliates or any of its and their past and present officers,
directors, employees, products or services. For purposes of this Agreement, the term “disparage”
includes, without limitation, comments or statements to the press, to the Company or any of its affiliates or any of its or their
officers, directors, or employees or to any individual or entity with whom the Company or any
of its affiliates has a business relationship (including, without limitation, any vendor, supplier, customer or distributor of
the Company or any of its affiliates) that would adversely affect in any manner: (i) the conduct of any business of the Company
or any of its affiliates (including, without limitation, any business plans or prospects) or (ii) the business reputation of the
Company or any of its affiliates or any of its and their officers, directors, employees, products or services.
Notwithstanding the foregoing, this Section 6(d) shall not apply to truthful statements made in the course of sworn testimony
in administrative, judicial or arbitral proceedings or normal competitive statements.

 

(e)          Reformation. If it is determined by a court of competent jurisdiction in any state that any restriction in
this Section 6 is excessive in duration or scope or is unreasonable or unenforceable under the laws of that state, it is the intention
of the parties that such restriction may be modified or amended by the court to render it enforceable to the maximum extent permitted
by the law of that state.

 

(f)           Survival of Provisions. The obligations contained in this Section 6 shall survive the termination or expiration
of the Executive’s employment with the Company and shall be fully enforceable thereafter.

 

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7.            COOPERATION. Upon the receipt of reasonable notice from the Company (including outside counsel), the Executive
agrees that while employed by the Company and thereafter, the Executive will respond and provide information with regard to matters
in which he has knowledge as a result of his employment with the Company, and will provide reasonable assistance to the Company,
its affiliates and their respective representatives in defense of any claims that may be made against the Company or its affiliates,
and will assist the Company and its affiliates in the prosecution of any claims that may be made by the Company or its affiliates,
to the extent that such claims may relate to the period of the Executive’s employment with the Company. The Executive agrees
to promptly inform the Company if he becomes aware of any lawsuits involving such claims that may be filed or threatened against
the Company or its affiliates. The Executive also agrees to promptly inform the Company (to the extent he is legally permitted
to do so) if he is asked to assist in any investigation of the Company or its affiliates (or their actions), regardless of whether
a lawsuit or other proceeding has then been filed against the Company or its affiliates with respect to such investigation, and
shall not do so unless legally required. Upon presentation of appropriate documentation, the Company shall pay or reimburse the
Executive for all reasonable out-of-pocket travel, duplicating or telephonic expenses incurred by the Executive in complying with
this Section 7.

 

8.           EQUITABLE RELIEF AND OTHER REMEDIES.

 

(a)               
The Executive acknowledges and agrees that the Company’s remedies at law for a breach or threatened breach
of any of the provisions of Section 6 or Section 7 would be inadequate and, in recognition of this fact, the Executive agrees that,
in the event of such a breach or threatened breach, in addition to any remedies at law, the Company, without posting any bond,
shall be entitled to obtain equitable relief in the form of specific performance, temporary restraining order, a temporary or permanent
injunction or any other equitable remedy which may then be available.

 

(b)              
In the event of a violation of Section 6 or Section 7 of this Agreement, any severance being paid to the Executive
by the Company pursuant to this Agreement (or any successor agreement) or otherwise shall immediately cease.

 

9.           NO ASSIGNMENTS.

 

(a)               
This Agreement is personal to each of the parties hereto. Except as provided in Section 9(b) below, no party may
assign or delegate any rights or obligations hereunder without first obtaining the written consent of the other party hereto.

 

(b)              
The Company may assign this Agreement to any successor to all or substantially all of the business and/or assets
of the Company provided the Company shall require such successor to expressly assume and agree to perform this Agreement and, if
applicable, any Change in Control Agreement (but without creating any rights on a second change in control), in the same manner
and to the same extent that the Company would be required to perform it if no such succession had taken place.

 

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10.         NOTICE. For the purpose of this Agreement, notices and all
other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given (i) on the
date of delivery if delivered by hand, (ii) on the first business day following the date of deposit with the overnight delivery
service if delivered by guaranteed overnight delivery service, or (iii) on the fourth business day following the date mailed by
United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

 

If to the Executive:

 

At the last address shown on the records of the Company;

 

If to the Company:

 

P&F Industries, Inc.

445 Broadhollow Road

Suite 100

Melville, New York 11747

Facsimile: (631) 773-4230

Attn: General Counsel

 

With a copy to:

 

Certilman Balin Adler & Hyman, LLP

90 Merrick Avenue

East Meadow, New York 11554

Facsimile: (516) 296-7111

Attn: Steven J. Kuperschmid, Esq.

 

and

 

Proskauer Rose LLP

Eleven Times Square

New York, New York 10036-8299

Facsimile: (212) 969-2900

Attn: Michael S. Sirkin, Esq.

 

or to such other address as either party
may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective
only upon receipt.

 

11.         SECTION HEADINGS; INCONSISTENCY. The section headings used
in this Agreement are included solely for convenience and shall not affect, or be used in connection with, the interpretation of
this Agreement. In the event of any inconsistency between the terms of this Agreement and any form, award, plan or policy of the
Company, the terms of this Agreement shall control.

 

12.         SEVERABILITY. The provisions of this Agreement shall be deemed
severable and the invalidity of unenforceability of any provision shall not affect the validity or enforceability of the other
provisions hereof.

 

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13.         COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instruments.

 

14.         ARBITRATION. Any dispute or controversy arising under or in connection with this Agreement or the Executive’s
employment with the Company, other than injunctive relief under Section 8 hereof, shall be settled exclusively by arbitration,
conducted before a single arbitrator in New York, New York (applying New York law) in accordance with the National Rules for the
Resolution of Employment Disputes of the American Arbitration Association then in effect. The decision of the arbitrator will be
final and binding upon the parties hereto. Judgment may be entered on the arbitrator’s award in any court having jurisdiction.
The parties acknowledge and agree that in connection with any such arbitration and regardless of outcome (a) each party shall pay
all its own costs and expenses, including without limitation its own legal fees and expenses, and (b) joint expenses shall be borne
equally among the parties; provided, however, in the event that the arbitrator determines that the Executive is the prevailing
party, then the Company shall pay or reimburse all reasonable legal fees and expenses incurred by the Executive.

 

15.         MISCELLANEOUS. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification
or discharge is agreed to in writing and signed by the Executive and such officer or director as may be designated by the Board.
No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision
of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. This Agreement supersedes any and all other agreements, either oral or in writing,
between the parties hereto with respect to the employment of the Executive by the Company and, together with all exhibits hereto
sets forth the entire agreement of the parties hereto in respect of the subject matter contained herein. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly
set forth in this Agreement. The validity, interpretation, construction and performance of this Agreement shall be governed by
the laws of the State of New York without regard to its conflicts of law principles.

 

16.         NO MITIGATION; TERMINATION CLAIM LIMIT. In no event shall the Executive be obliged to seek other employment
or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement,
nor shall the amount of any payment hereunder be reduced by any compensation earned by the Executive as a result of employment
by another employer, except as provided in Section 8(b) hereof. Any claim by the Executive for damages as a result of a termination
based on Section 2(c)(iv) shall not be brought prior to resolution of the criminal case and the Executives damages shall be limited
to (a) the monetary amounts the Executive would have received in the event of a termination without Cause and (b) the intrinsic
value on the termination date of any equity vested at, or upon, such termination that the Executive forfeited or did not receive
because of the classification of the termination for Cause (and the Executive shall have no right to the equity, which shall be
cancelled upon the termination for Cause).

 

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17.         WITHHOLDING. The Company may withhold from any and all
amounts payable under this Agreement such federal, state and local taxes as may be required to be withheld pursuant to any applicable
law or regulation.

 

18.         SECTION 409A COMPLIANCE.

 

(a)               
The intent of the parties is that payments and benefits under this Agreement comply with,
or be exempt from, Code Section 409A and, accordingly, to the maximum extent permitted, this Agreement shall be limited,
construed and interpreted in accordance with such intent. If the Executive notifies the Company (with
specificity as to the reason therefore) that the Executive believes that any provision of this Agreement (or of any award of compensation,
including equity compensation or benefits) would cause the Executive to incur any additional tax or interest under Code Section
409A and the Company concurs with such belief or the Company (without any obligation whatsoever to do so) independently makes such
determination, and modifying such provision would avoid such additional tax or interest, the Company shall, after consulting with
the Executive, reform such provision to try to comply with Code Section 409A through good faith modifications to the minimum extent
reasonably appropriate to conform with Code Section 409A. To the extent that any provision hereof is modified in order to comply
with Code Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain
the original intent and economic benefit to the Executive and the Company of the applicable provision without violating the provisions
of Code Section 409A.

 

(b)              
A termination of employment shall not be deemed to have occurred for purposes of
any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment
unless such termination is also a “Separation from Service” within the meaning of Code Section 409A and, for purposes
of any such provision of this Plan, references to a “termination,” “termination of employment” or like
terms shall mean Separation from Service. Notwithstanding any provision to the contrary in this Agreement, if the Executive
is deemed on the date of his termination to be a “specified employee” within
the meaning of that term under Code Section 409A(a)(2)(B) and using the identification methodology
selected by the Company from time to time, or if none, the default methodology set forth in Code Section 409A, then with
regard to any payment or the providing of any benefit that constitutes
“non-qualified deferred compensation” pursuant to Code Section 409A that is payable due to the Executive’s Separation
from Service, to the extent required to be delayed in compliance with Code Section 409A(a)(2)(B), such payment or benefit
shall not be made or provided to the Executive (subject to the last sentence of this Section
18(b)) prior to the earlier of (i) the expiration of the six (6)-month period measured from the date of the Executive’s Separation
from Service, and (ii) the date of the Executive’s death (the “Delay Period”). For avoidance of doubt,
the Severance Payment shall not be treated as non-qualified deferred compensation that is required to be delayed in compliance
with Code Section 409A(a)(2)(B) to the extent that it meets the exemption set forth in Department of Treasury Regulation Section
1.409A-1(b)(9)(iii) (for separation pay due to involuntary separation from service) and only that portion, if any, of the Severance
Payment that exceeds the exempt amount shall be subject the delay, if any, required pursuant to the preceding sentence. On
the first day of the seventh month following the date of the Executive’s Separation from Service or, if earlier, on the date
of the Executive’s death, all payments delayed pursuant to this Section 18(b) (whether they would have otherwise been
payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to the Executive in a lump
sum, and any remaining payments and benefits due to the Executive under this Agreement
shall be paid or provided in accordance with the normal payment dates specified for them herein. Notwithstanding the foregoing,
to the extent that the provision of any welfare benefits provided to the Executive following
his Separation from Service will be treated as non-qualified deferred compensation that is required to be delayed (after taking
into account the exemption in Department of Treasury Regulation Section 1.409A-1(b)(9)(v)) but would not be required to be delayed
if the premiums therefor were paid by the Executive, the Executive shall pay the full
cost of the premiums for such welfare benefits during the Delay Period and the Company shall pay the Executive an amount equal
to the amount of such premiums paid by the Executive during the Delay Period promptly after its conclusion.

 

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(c)               
In no event whatsoever shall the Company be liable for any additional tax, interest or
penalties that may be imposed on the Executive by Code Section 409A or any damages for failing to comply with Code Section 409A.

 

(d)              
To the extent any reimbursement of costs and expenses provided for under this Agreement constitutes taxable income
to the Executive for Federal income tax purposes, such reimbursements shall be made no later than December 31 of the calendar year
next following the calendar year in which the expenses to be reimbursed are incurred.

 

(e)               
If under this Agreement, an amount is to be paid in two or more installments, for purposes of Code Section 409A,
each installment shall be treated as a separate payment.

 

(f)               
Whenever a payment under the Agreement specifies a payment period with reference to a number of days, the actual
date of payment within the specified period shall be within the sole discretion of the Company.

 

19.           CLAWBACKS. The Executive hereby acknowledges and agrees that
he is subject to Section 304 of the Sarbanes-Oxley Act of 2002, and that pursuant thereto he may under certain circumstances be
obligated to pay back to the Company certain amounts previously received by him. In addition, the Executive hereby acknowledges
and agrees that he shall be subject to any clawback policy adopted or implemented by the Company in respect of the Dodd-Frank Wall
Street Reform and Consumer Protection Act of 2010 and such regulations as are promulgated thereunder from time to time to the extent
required by the Act and the implementing regulations.

 

 

 

[End of text -
Signature page follows]

 

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IN WITNESS WHEREOF,
the parties hereto have executed this Agreement as of the date first written above.

 

	 	
        P&F INDUSTRIES, INC.

         

        By:/s/ Richard A. Horowitz

        Name: Richard A. Horowitz

        Its: President

         

	 	
        

        

        

        /s/ Joseph A. Molino, Jr.

        JOSEPH A. MOLINO, JR. 

         

 

 

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APPENDIX A

 

FORM OF RELEASE

 

AGREEMENT AND
GENERAL RELEASE AND WAIVER, dated as of ______________ (the “Agreement”), by and between JOSEPH A. MOLINO, JR.
(the “Employee”) and P&F INDUSTRIES, INC., a Delaware corporation (the “Company”).

 

The Employee and the
Company mutually want to enter into this Agreement concerning the Employee’s separation from the Company. Where appropriate
in the context of this Agreement, the term “Company” includes, the Company’s past, present and future subsidiaries,
affiliates, divisions, parents, and any of its or their respective predecessors, successors, assigns, assets, employee benefit
plans or funds and its or their past, present and future directors, officers, fiduciaries, trustees, administrators, representatives,
shareholders, agents, employees, and independent contractors, whether acting on behalf of the Company or in their individual capacities.

 

1.                 
The Employee acknowledges and agrees that (a) his last date of employment with the Company was __________ (the “Termination
Date”), (b) the Termination Date was the termination date of his employment with the Company for purposes of participation
in and coverage under all benefit plans and programs sponsored by or through the Company, (c) the Company shall have no obligation
to rehire the Employee, or to consider him for employment, after the Termination Date, and (d) he will not seek employment with
the Company at any time in the future.

 

2.                 
The Employee acknowledges that he has carefully read this Agreement in its entirety, the terms and implications of this
Agreement have been fully explained to the Employee, the Employee has had answered to his satisfaction any questions he has asked
with regard to the meaning and significance of any provision of this Agreement, and that he fully understands the significance
of all of the terms and conditions of this Agreement.

 

3.                 
The Employee acknowledges that he has been given the opportunity to consider this Agreement for twenty-one (21) days and
decide for himself whether or not he wants to sign it.

 

4.                 
The Employee acknowledges that he has been advised to consult with an attorney of his choice concerning this Agreement and
the implications to the Employee of signing or not signing it.

 

5.                 
The Employee acknowledges that he has carefully considered other alternatives to executing this Agreement, and has decided
that he wants to sign it.

 

6.                 
The Employee may accept this Agreement by signing it and returning it to _____________, P&F Industries, Inc., 445 Broadhollow
Road, Suite 100, Melville, New York, 11747, within twenty-one (21) days of his receipt of this Agreement. The Employee is entitled
to change his mind and revoke this Agreement by indicating his desire to do so in writing delivered to __________ at the address
above (or by fax at (     )    -     ) by no later than 5:00 p.m.
EST on the seventh (7th) day after the date he signs this Agreement (the “Revocation Period”). This Agreement will
not become effective and the Employee will not receive any of the benefits set out below until the eighth (8th) day after the Employee
signs it (the “Effective Date”). If the last day of the Revocation Period falls on a Saturday, Sunday or holiday, the
last day of the Revocation Period will be deemed to be the next business day.

 

    	 

    	 	

    
 

7.                 
In consideration for the Employee’s signing and not revoking this Agreement, the Company has agreed to pay the Employee
the consideration set forth in Section [IF TERMINATION IS NOT IN CONNECTION WITH A CHANGE IN CONTROL - 3(d)(ii)] [IF TERMINATION
IS IN CONNECTION WITH A CHANGE IN CONTROL – 4(a)(ii)] of that certain Severance Agreement, dated as of _________, 2012, by
and between the Company and the Employee (the “Severance Agreement”). The Company and the Employee expressly agree
that the Company is not otherwise obligated to pay such consideration; that the Employee is not otherwise entitled to receive any
of such consideration; and that, if the Employee does not sign this Agreement or revokes this Agreement during the Revocation Period,
the Company will have no further obligations to the Employee under this Agreement, including, without limitation, the obligation
to make the payments set forth in Section 7 of this Agreement.

 

8.                 
By entering into this Agreement, the parties do not admit, and specifically deny, any liability or wrongdoing, or violation
of any law, statute, order, regulation or policy. It is expressly understood and agreed that this Agreement is being entered into
solely for the purpose of avoiding the costs of litigation and amicably resolving all matters in controversy, disputes, causes
of action, claims, contentions and differences of any kind whatsoever which have been or could have been alleged by the respective
parties against each other.

 

9.                 
The Employee acknowledges that he knows that there are various state and federal laws which prohibit employment discrimination
on the basis of age, sex, race, color, creed, national origin, marital status, religion, disability or veteran status and that
these laws are enforced through the Federal Equal Employment Opportunity Commission, the New York State Division of Human Rights
and various city, county and local human rights agencies.  In addition, the Employee acknowledges that he knows that there
are other federal, state, and local laws of other types or description regarding employment, including, but not limited to, claims
arising from or derivative of the Employee’s employment with the Company.

 

10.             
The consideration set forth in Section 7 of this Agreement is in full and complete satisfaction of all claims whatsoever
the Employee may have against the Company arising from the Employee’s employment and/or separation from employment with the
Company, or from any other matter whatsoever up to and including the date of this Agreement, whether known or unknown. Without
limiting the generality of the foregoing, the Employee hereby releases, waives, and forever discharges any and all claims of any
kind against the Company arising from the Employee’s employment and/or separation from employment with the Company, or from
any other matter whatsoever up to and including the date of this Agreement, whether known or unknown, that he may have or had,
including, but not limited to, fraud, claims arising under Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C.
§621 et. seq., Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. §2000 et. seq.,
the Civil Rights Act of 1866, 42 U.S.C. §1981, 42 U.S.C. §1983, The Equal Pay Act, as amended, 29 U.S.C. §206(d)(1),
the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. §201 et. seq., the Family and Medical Leave Act
of 1993, 29 U.S.C. §2601 et. seq., the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C.
§1001 et. seq., the Americans with Disabilities Act, 42 U.S.C. §12101 et. seq., the Civil
Rights Act of 1991, 105 Stat. 1071, Executive Order 11246, the Sarbanes-Oxley Act of 2002 (a federal whistleblower law), the New
York State Human Rights Law, New York City Human Rights Law, New York Equal Pay Law and N.Y. Lab. Law, Section’s 201-c (adoptive
parent leave) and 740 (whistle blower statute (private employees)), all as amended, and any other federal, state and local fair
employment practice law, workers’ compensation law, unemployment insurance law, and any other employee relations duties and
obligations, whether imposed by express or implied contract, tort (including, but not limited to, all intentional torts, negligence,
negligent hiring, training, supervision or retention), common law, equity, public policy statute, executive order or law, any claims
for physical or emotional distress or injuries, or any other duty obligation of any kind or description, as well as any rights
or claims the Employee or his attorney or other representative have or may have for costs, expenses, attorneys’ fees or otherwise.
The foregoing shall not apply to the Employee’s right to receive the payments and benefits provided under Sections [IF TERMINATION
IS NOT IN CONNECTION WITH A CHANGE IN CONTROL - 3(d)(i) and (ii)] [IF TERMINATION IS IN CONNECTION WITH A CHANGE IN CONTROL –
4(a)(i) and (ii)] of the Severance Agreement, nor to the Employee’s rights, if any, to indemnification as an officer of the
Company or a fiduciary of any Company benefit plan. In addition, nothing in this Agreement shall be construed to prevent the Employee
from filing a charge with, or participating in an investigation conducted by, any governmental agency, including, without limitation,
the Equal Employment Opportunity Commission or applicable state/city fair employment practices agency, to the extent required or
permitted by law, or to prevent any challenge by the Employee to the waiver and release of any claims as set forth herein; provided,
that the Employee hereby agrees not to accept any award or settlement from any source or proceeding
(including, but not limited to, any proceeding brought by any other person or by any government agency) with respect to any claim
or right waived in this Agreement.

 

    	 

    	 	

    
 

11.             
The Employee agrees to keep this Agreement confidential and not to reveal its contents to anyone except his attorney, his
immediate family or his financial consultant, or as required by law. The Employee will be responsible for any disclosure by them.
The Company agrees to keep this Agreement confidential and not to reveal the contents to anyone except its attorneys, accountants,
officers, directors and human resources director. The foregoing will not prohibit disclosure of this Agreement as required by law
or regulation, including, but not limited to, those of the U.S. Securities And Exchange Commission and the rules of any exchange,
quotation system and/or self regulatory organization on which or with which the Company’s securities are quoted, listed and/or
traded, as the case may be; provided that if the Employee is required to make a disclosure pursuant to the foregoing he agrees
to give the Company prompt written notice thereof and cooperate with the Company’s efforts to seek a protective order.

 

12.             
The Employee represents and warrants that he has returned all property belonging to the Company and has deleted from his
home or personal computer, personal e-mail accounts and electronic filings all Company information.

 

    	 

    	 	

    
 

13.             
The parties hereto agree and acknowledge that Sections [IF TERMINATION IS NOT IN CONNECTION WITH A CHANGE IN CONTROL - 3(d)]
[IF TERMINATION IS IN CONNECTION WITH A CHANGE IN CONTROL – 4(a)], 6, 7, 8, 12, 14, 15, 16, 17, 18 and 19 of the Severance
Agreement shall remain in full force and effect and shall remain fully enforceable following the Effective Date.

 

14.             
The payments set forth in Section 7 of this Agreement are subject to taxes and all applicable withholding requirements.

 

15.             
Except as specifically set forth in this Agreement, this Agreement constitute the entire agreement between the Employee
and the Company with respect to the subject matter hereof and may only be modified, altered or changed in writing, signed by both
the Company and the Employee.

 

16.             
This Agreement has been executed freely, knowingly and voluntarily by the Employee without duress, coercion, or undue influence,
with a full understanding of its terms. The Employee acknowledges and agrees that, prior to executing this Agreement, he has been
provided with sufficient time in which to consider this Agreement and that, in deciding to execute this Agreement, he has relied
on his own judgment and further acknowledges that he is fully aware of its contents and of its legal effects. The parties to this
Agreement agree that no fact, evidence or transaction currently unknown to them but which may hereafter become known to them shall
affect in any way or manner the final or unconditional nature of this Agreement.

 

17.             
This Agreement shall be interpreted and construed and enforced in accordance with the laws of the State of New York, excluding
choice of law principles thereof.

 

18.             
This Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective successors,
assigns and legal representatives.

 

19.             
The waiver by either party of a breach of any provision of this Agreement shall not operate or be construed as a waiver
of any subsequent breach. If any provision of this Agreement, or part thereof, shall be held to be invalid or unenforceable, such
invalidity or unenforceability shall attach only to such provision and not in any way affect or render invalid or unenforceable
any other provisions of this Agreement, and this Agreement shall be carried out as if such invalid or unenforceable provision,
or part thereof, had been reformed, and any court of competent jurisdiction is authorized to so reform such invalid or unenforceable
provision, so that it would be valid, legal and enforceable to the fullest extent permitted by applicable law.

 

20.             
BY SIGNING THIS AGREEMENT, THE EMPLOYEE STATES THAT: HE HAS READ IT; HE UNDERSTANDS IT AND KNOWS THAT HE IS GIVING UP
IMPORTANT RIGHTS; HE AGREES WITH EVERYTHING IN IT; HE WAS TOLD, IN WRITING, TO CONSULT AN ATTORNEY BEFORE SIGNING IT; HE HAS HAD
[21] [45] DAYS TO REVIEW THE AGREEMENT AND THINK ABOUT WHETHER OR NOT HE WANTED TO SIGN IT; AND HE HAS SIGNED IT KNOWINGLY AND
VOLUNTARILY.

 

    	 

    	 	

    
 

 

[Remainder of
page intentionally left blank.]

 

 

 

 

 

 

 

 

 

    	 

    	 	

    
 

WHEREFORE, the
Employee and the Company now voluntarily and knowingly execute this Agreement as of the day and year first written above.

 

 

	 	
        P&F INDUSTRIES, INC.

         

        By: __________________________________

               Name: _____________________________

                            (Please
        print) 

       Title:______________________________

         

	 	
        

_____________________________________

        JOSEPH A. MOLINO, JR. 

         

 

Sworn to by JOSEPH A. Molino, Jr. before
me this ____ day of ______________, 20___.

 

 

___________________________

Notary Public

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