December
      21, 2007

    


    Claude
      A.
      Dance

    1255
      Hog
      Hollow Drive

    Dripping
      Springs, Texas 78620

    


    Dear
      Claude:

    


    I
      have
      enjoyed our conversations with you regarding your a promotion to a senior
      management level position opportunity with Sharps Compliance, Inc. (“Sharps” or
      the “Company”) .We are pleased to offer you the position of Senior Vice
      President of Sales and Marketing with Sharps reporting directly to me. The
      offer
      is contingent upon your acceptance of the terms and conditions of employment
      as
      outlined in this letter including effective date noted below.

    


    Your
      new
      compensation will include a base salary of $7,692.31 per pay period (twenty-six
      pay periods per year). 

    


    As
      an
      employee of Sharps, you will continue be eligible to participate in the
      Company’s group benefit program which includes: group health, vision, dental,
      disability insurance and 401(k). A summary description of the program, including
      employee premiums, is included as an attachment to this offer letter. You will
      also be entitled to a grant of options to purchase 75,000 shares of the
      Company’s common stock at an exercise price equal to the closing price of the
      stock subsequent to nine (90) days from the effective date of this letter noted
      below. All stock option grants are subject to Board of Director approval and
      the
      terms of the Sharps Compliance Corp. 1993 Stock Plan. The above noted stock
      option grant is in addition to the 25,000 share option grant awarded to you
      in
      your offer letter August 24, 2007 (in conjunction with your initial
      employment).

    


    This
      offer does not constitute an employment contract or guarantee of employment
      for
      any specific period of time since the Company is an“at-will”
employer.
      At-will employment means that either you or the
      Company,
      with or
      without cause and with or without prior notice, may terminate the employment
      relationship at any time. Additionally,
      your employment will be subject to the Company’s policies and procedures, a copy
      of which was provided to you when you initially joined the Company.


    


    Notwithstanding
      the above, the Company will provide you with a letter agreement that provides
      you with six (6) months of severance should your employment be terminated
      without cause. 

     

    

      Sharps
        Compliance, Inc.

      9220
        Kirby Drive Suite 500

      Houston,
        Texas 77054

      www.sharpsinc.com

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Page
      2

    Dance

    


    Additionally,
      you agree to enter into a non-compete and confidentiality agreement consistent
      with that entered into by other senior management members. The form of this
      agreement is attached.

    


    The
      effective date of this new employment arrangement is December 26,
      2007.

    


    We
      are
      pleased to offer you this promotion opportunity and are confident that you
      will
      make a measurable contribution to the Company. Should the above be acceptable
      to
      you, please sign your acceptance of this offer of employment in the designated
      space below and fax the document to Lynn Carnes at 713-660-3583.

    


    Sincerely,

    
      


    

    



    


    Dr.
      Burton J. Kunik

    Chairman,
      Chief Executive Officer & President

    


    Attachments

    


    Accepted
      and Agreed:

    


    _____________________________

    Claude
      A.
      Dance 

    December
      26, 2007 

     

    
      Sharps
        Compliance, Inc.

      9220
        Kirby Drive Suite 500

      Houston,
        Texas 77054

      www.sharpsinc.com