Document:

Exhibit 10.2

 

AMENDMENT
NO. 2 AND AGREEMENT

 

This AMENDMENT NO. 2 AND AGREEMENT (“Amendment”) entered into
and made effective as of March 30, 2010 (“Effective Date”), is
among Cano Petroleum, Inc., a Delaware corporation (“Borrower”),
the Guarantors (as defined below), the Lenders (as defined below), and UnionBanCal
Equities, Inc., as administrative agent for such Lenders (in such
capacity, the “Administrative Agent”).

 

RECITALS

 

A.                                   The Borrower is
party to that certain Subordinated Credit Agreement dated as of December 17,
2008 (as amended, restated and otherwise modified from time to time, the “Credit
Agreement”) among the Borrower, the lenders party thereto from time to time
(the “Lenders”), the Administrative Agent.

 

B.                                     The Lenders,
subject to the terms and conditions set forth herein, wish to amend the Credit
Agreement as provided herein.

 

THEREFORE, the Borrower, the
Guarantors, the Lenders and the Administrative Agent hereby agree as follows:

 

Section 1.                                          Defined
Terms; Other Definitional Provisions.  As used in this Amendment, each of the terms
defined in the opening paragraph and the Recitals above shall have the meanings
assigned to such terms therein.  Each
term defined in the Credit Agreement and used herein without definition shall have
the meaning assigned to such term in the Credit Agreement, unless expressly
provided to the contrary.  The words “hereof”,
“herein”, and “hereunder” and words of similar import when used in this
Amendment shall refer to this Amendment as a whole and not to any particular
provision of this Amendment.  Paragraph
headings have been inserted in this Amendment as a matter of convenience for
reference only and it is agreed that such paragraph headings are not a part of
this Amendment and shall not be used in the interpretation of any provision of
this Amendment.

 

Section 2.                                          Amendments to Credit
Agreement.

 

(a)                                  Section 6.18
(Leverage Ratio) of the Credit Agreement is hereby amended by replacing the
last sentence therein in its entirety with the following:

 

Notwithstanding the foregoing, this Section 6.18 shall not apply
for the fiscal quarters ending December 31, 2009 and March 31, 2010.

 

(b)                                 Section 6.19
(Interest Coverage Ratio) of the Credit Agreement is hereby amended by
replacing the last sentence therein in its entirety with the following:

 

Notwithstanding the foregoing, this Section 6.19 shall not apply
for the fiscal quarters ending December 31, 2009 and March 31, 2010.

 

 

Section 3.                                          Agreement.  If the Credit Agreement has not been
terminated on or before May 31, 2010, then the Borrower hereby agrees to
pay on May 31, 2010, in consideration for the agreements of the Lenders
provided herein, an amendment fee in the amount of $22,500 to the
Administrative Agent for the pro rata account of the Lenders.

 

Section 4.                                          Representations and Warranties.  The Borrower and each Guarantor represents
and warrants that: (a) the representations and warranties contained in the
Credit Agreement and the representations and warranties contained in the other
Loan Documents are true and correct in all material respects on and as of the
Effective Date as if made on as and as of such date except to the extent that
any such representation or warranty expressly relates solely to an earlier
date, in which case such representation or warranty is true and correct in all
material respects as of such earlier date; (b) no Default has occurred and
is continuing; (c) the
execution, delivery and performance of this Amendment are within the corporate,
limited liability company, or partnership power and authority of such Person and
have been duly authorized by appropriate corporate, limited liability company,
or partnership actions and proceedings; (d) this Amendment constitutes the
legal, valid, and binding obligation of such Person enforceable in accordance with
its terms, except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting the rights of creditors
generally and general principles of equity; (e) there are no governmental
or other third party consents, licenses and approvals required in connection
with the execution, delivery, performance, validity and enforceability of this Amendment;
(f) the Liens under the Security Instruments are valid and subsisting and
secure the Borrower’s and such Person’s obligations under the Loan Documents;
and (g) as to each Guarantor, it has no defenses to the enforcement of the
Guaranty.

 

Section 5.                                          Conditions to Effectiveness.  This Amendment and the
amendments to the Credit Agreement provided herein shall become effective on and as of the Effective Date and
enforceable against the parties hereto upon the occurrence (whether before or after the Effective
Date) of the following conditions precedent: (a) the Administrative
Agent shall have received multiple original counterparts, as requested by the
Administrative Agent, of this Amendment duly and validly executed and delivered
by duly authorized officers of the Borrower, the Guarantors, the Administrative
Agent, and the Lenders, (b) no Default shall have occurred and be continuing
as of the Effective Date, (c) the representations and warranties in this Amendment
shall be true and correct in all material respects, and (d) the Borrower shall have paid all costs and
expenses that have been invoiced prior to the Effective Date and are payable
pursuant to Section 9.04 of the Credit Agreement.

 

Section 6.                                          Acknowledgments and Agreements.

 

(a)                                  The Borrower
acknowledges that on the date hereof all Obligations are payable without
defense, offset, counterclaim or recoupment.

 

(b)                                 The Administrative
Agent and the Lenders hereby expressly reserve all of their rights, remedies,
and claims under the Loan Documents. 
Nothing in this Amendment shall constitute a waiver or relinquishment of
(i) any Default or Event of Default under any of the Loan Documents, (ii) any
of the agreements, terms or conditions contained in any of the Loan Documents, (iii) any
rights or remedies of the Administrative Agent or any Lender with respect 

 

2

 

to the Loan Documents, or (iv) the rights of
the Administrative Agent or any Lender to collect the full amounts owing to
them under the Loan Documents.

 

(c)                                  Each of the
Borrower, the Guarantors, the Lenders and the Administrative Agent does hereby
adopt, ratify, and confirm the Credit Agreement, as amended hereby, and
acknowledges and agrees that the Credit Agreement, as amended hereby, is and
remains in full force and effect, and the Borrower and the Guarantors
acknowledge and agree that their respective liabilities and obligations under
the Credit Agreement, as amended hereby, and the Guaranty, are not impaired in
any respect by this Amendment.

 

(d)                                 From and after
the Effective Date, all references to the Credit Agreement and the Loan
Documents shall mean such Credit Agreement and such Loan Documents as amended
by this Amendment.

 

(e)                                  This Amendment
is a Loan Document for the purposes of the provisions of the other Loan
Documents.  Without limiting the
foregoing, any breach of representations, warranties, and covenants under this Amendment
shall be a Default or Event of Default, as applicable, under the Credit
Agreement.

 

Section 7.                                          Reaffirmation of the Guaranty.  Each Guarantor hereby ratifies, confirms,
acknowledges and agrees that its obligations under the Guaranty are in full
force and effect and that such Guarantor continues to unconditionally and
irrevocably guarantee the full and punctual payment, when due, whether at
stated maturity or earlier by acceleration or otherwise, all of the Guaranteed
Obligations (as defined in the Guaranty), as such Guaranteed Obligations may
have been amended by this Amendment, and its execution and delivery of this Amendment
does not indicate or establish an approval or consent requirement by such
Guarantor under the Guaranty in connection with the execution and delivery of
amendments, consents or waivers to the Credit Agreement, the Notes or any of
the other Loan Documents.

 

Section 8.                                          Counterparts;
Invalidity.  This Amendment may be signed in any number of
counterparts, each of which shall be an original and all of which, taken
together, constitute a single instrument. 
This Amendment may be executed by facsimile signature and all such
signatures shall be effective as originals. 
In the event that any one or more of the provisions contained in this
Amendment shall for any reason be held invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision of this Amendment.

 

Section 9.                                          Successors
and Assigns.  This Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns permitted pursuant to the Credit Agreement.

 

Section 10.                                   Governing
Law.  This Amendment
shall be deemed to be a contract made under and shall be governed by and
construed in accordance with the laws of the State of Texas.

 

Section 11.                                   Entire
Agreement.  THIS AMENDMENT, THE CREDIT AGREEMENT AS AMENDED BY THIS AMENDMENT, THE
NOTES, AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG
THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER 

 

3

 

HEREOF AND
SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.

 

THERE ARE NO UNWRITTEN ORAL
AGREEMENTS AMONG THE PARTIES.

 

[signature pages follow]

 

4

 

EXECUTED effective as of the
date first above written.

 

	
  BORROWER:

  	
  CANO PETROLEUM, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ben Daitch

  
	
   

  	
  Name:

  	
  Ben Daitch

  
	
   

  	
  Title:

  	
  Senior Vice President & CFO

  
	
   

  	
   

  
	
   

  	
   

  
	
  GUARANTORS:

  	
  SQUARE ONE ENERGY, INC.

  
	
   

  	
  LADDER COMPANIES, INC.

  
	
   

  	
  W.O. ENERGY OF NEVADA, INC.

  
	
   

  	
  WO ENERGY, INC.

  
	
   

  	
  CANO
  PETRO OF NEW MEXICO, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Each by:

  	
  /s/ Ben Daitch

  
	
   

  	
  Name:

  	
  Ben Daitch

  
	
   

  	
  Title:

  	
  Vice President & Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  W.O. OPERATING COMPANY, LTD.

  
	
   

  	
  W.O. PRODUCTION COMPANY, LTD.

  
	
   

  	
  Each by: WO
  Energy, Inc., its general partner

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ben Daitch

  
	
   

  	
  Name:

  	
  Ben Daitch

  
	
   

  	
  Title:

  	
  Vice President & Chief Financial Officer

  
					

 

Signature Page to
Amendment No. 2 and Agreement

 

 

	
   

  	
  UNIONBANCAL EQUITIES, INC.,

  as Administrative Agent and a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ted McNulty

  
	
   

  	
  Name:

  	
  Ted McNulty

  
	
   

  	
  Title:

  	
  Senior
  Vice President

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John W. Schmidt

  
	
   

  	
  Name:

  	
  John W. Schmidt

  
	
   

  	
  Title:

  	
  Vice
  President

  

 

Signature Page to
Amendment No. 2 and AgreementExhibit 10.10

 

THOMAS J.
SHAW

NONQUALIFIED
STOCK OPTION AGREEMENT

ISSUED
OUTSIDE OF ANY PLAN

 

This
Retractable Technologies, Inc. NonQualified Stock Option Agreement (the
“Agreement”) is made and entered into by and between RETRACTABLE TECHNOLOGIES,
INC. (the “Company”) and Thomas J. Shaw (the “Optionee”). The Company and the
Optionee are sometimes hereinafter collectively referred to as the “Parties.”

 

(1)                                  The option granted hereunder is granted
outside the Company’s 2008 Stock Option Plan or any other stock option plan.

 

(2)                                  OPTION. The Company hereby confirms the grant by the
Compensation and Benefits Committee of the Board of Directors as of July 15,
2009 (subject to approval by a vote of the Common Shareholders) to the Optionee
of the right and option to purchase three million (3,000,000) shares of the
Common Stock of the Company on the terms set forth in this Agreement (the
“Option”). The Option granted is designated as a nonqualified stock option
(“NQSO”). The Option is not vested until July 15, 2010.  An Option that is exercisable may be forfeited
pursuant to Section (3) of this Agreement.  The Option must be exercised within the
period specified in this Agreement.  The
Option may not be exercised for a fractional share of Stock (defined to mean Common
Stock of the Company). The Option, if exercised in part, shall remain
exercisable as to the remaining part in accordance with its terms. Nothing
contained in this Agreement shall be deemed to give the Optionee the right to
be retained in the service of the Company.

 

(3)                                  TERMINATION OF OPTION.

 

(A)                              MAXIMUM OPTION TERM. 
The unexercised portion of this Option which has become exercisable
shall automatically and without notice terminate and become null and void after
July 15, 2019.

 

(B)                                DEATH OF OPTIONEE.

 

(i)                                     Notwithstanding Section 3(C) of
this Agreement, upon the death of the Optionee, any Option exercisable on the
date of death may be exercised by the Optionee’s estate or by a person who
acquires the right to exercise such Option by bequest or inheritance or
otherwise by reason of the death of the Optionee, provided that such exercise
occurs within both the remaining term of the Option and within one (1) year
after the Optionee’s death. Any Option not then exercisable shall be forfeited
at the death of Optionee.

 

(ii)                                  The provisions of this subsection (3)(B) shall
apply notwithstanding the fact that the Optionee’s relationship with the
Company may have terminated prior to death, and if the Option remains
exercisable but only to the extent of any Option exercisable on the date of
death.

 

(C)                                DISABILITY.  Subject to Section 3(B) of
this Agreement, upon the termination of the Optionee’s relationship with the
Company by reason of permanent disability (as determined by the Board), the
Optionee may, within one (1) year from the date of such termination of
relationship with the Company, exercise any Option to the extent such Option
was exercisable at the date of such termination of relationship with the
Company due to disability.  Any Option
not then exercisable is forfeited upon termination of relationship with the
Company due to disability.

 

(D)                               TERMINATION FOR OTHER REASONS. 
Except as provided in Sections (3)(B) and (3)(C), the Option shall
automatically terminate upon the termination of the Optionee’s relationship
with the Company for cause.  Otherwise,
subject to Sections 3(B) and 3(C) the vested portion of the Option
shall expire upon the expiration of its term set forth in Section 3(A).  Any Option not then exercisable is forfeited
upon termination of the relationship with the Company, with or without cause.

 

(4)                                  EXERCISE OF OPTION. This Option shall be exercised by the
Optionee (or by his representatives, as provided in Section (3) of
this Agreement) as to all or part of the shares covered hereby, by the giving
of written notice of such exercise substantially in the form attached hereto as
Exhibit A, to the Company 

 

 

specifying the number of
shares to be purchased and specifying how the withholding tax obligation (if
any) shall be satisfied. The giving of such written notice to the Company shall
constitute an irrevocable election to purchase the number of shares specified
in the notice and to exercise the right on the date specified in the notice
(the “Exercise Date”). Upon payment of all amounts due from the Optionee,
including any tax withholding due upon exercise of this Option, the Company
shall cause Documents Indicating Ownership (defined to include a stock
certificate or any and all documents provided by the Company and its agents
evidencing ownership of an uncertificated share of stock) to be delivered to
the Optionee (or the person exercising the Optionee’s option) at the address
set forth herein within ten (10) business days after the Exercise Date.

 

(5)                                  OPTION PRICE. The purchase price of the shares which
may be purchased pursuant to this Option shall be eighty-one cents ($0.81) per
share (the “Option Price”), being 100% of the fair market value of a Common
Share of the Company on July 15, 2009 as determined by the Compensation
and Benefits Committee of the Board of Directors of the Company. The Option
Price and any other amounts payable upon exercise shall be paid in full at the
time the Option is exercised. Otherwise, an exercise of the Option shall be
invalid and of no effect.

 

(6)                                  TAX WITHHOLDING. Exercise of the Option in whole or in
part hereunder is conditioned upon the Optionee remitting to the Company, in
addition to the Option Price, the amount of employment taxes, if any, required
to be withheld upon exercise of this Option. The Optionee may satisfy this
obligation by a direct payment of a cashier’s check to the Company or, if
pre-approved by the Company (in its sole discretion), increased withholding on
his cash compensation payable on the Exercise Date.

 

(7)                                  NO RIGHTS PRIOR TO ISSUANCE OF DOCUMENTS
INDICATING OWNERSHIP.
Neither the Optionee nor his representatives shall have any of the rights of a
shareholder of the Company with respect to the shares subject to this Option
until Documents Indicating Ownership shall have been issued upon the exercise
of this Option. No adjustment will be made for dividends or other rights for
which the record date is prior to the date the Documents Indicating Ownership
are issued.

 

(8)                                  NONASSIGNABILITY. This Option shall not be assignable or
transferable by the Optionee other than by will or by the laws of descent and
distribution, and during the Optionee’s lifetime shall be exercisable only by
him (or his legal guardian or representative).

 

(9)                                  ADJUSTMENT FOR CORPORATE EVENTS. In the event of any Stock split, Stock
dividend, reclassification or recapitalization which changes the character or
amount of the Company’s outstanding Common Stock while any portion of this
Option is outstanding but unexercised, or if the Company participates in any
transaction resulting in a corporate merger, consolidation, acquisition of
property or stock, separation, reorganization (where the Company is the
surviving entity) or liquidation, the Company or any surviving corporation
shall take reasonable steps to prevent dilution of the Option.

 

Notwithstanding
anything to the contrary herein, in the event of 1) dissolution or liquidation
of the Company, 2) a merger or consolidation in which the Company is not the
surviving corporation (other than a merger or consolidation with a wholly-owned
subsidiary, a reincorporation of the Company in a different jurisdiction, or
other transaction in which there is no substantial change in the stockholders
of the Company or their relative stock holdings and the Option granted
hereunder is assumed, converted or replaced by the successor corporation, which
assumption, conversion or replacement will be binding on the Optionee), 3) a
merger or consolidation in which the Company is the surviving corporation but
after which the stockholders of the Company (other than any stockholder which
merges [or which owns or controls another corporation which merges] with the
Company in such merger) cease to own their shares or other equity interests in
the Company, 4) the sale of substantially all of the assets of the Company, or
5) the acquisition, sale or transfer of more than 50% of the outstanding shares
of Common Stock of the Company by tender offer or similar transaction
(otherwise than by will or by the laws of descent and distribution), the Option
shall terminate after a period of three months from the completion of such
trigger event; provided, however, that the Optionee shall have the right,
immediately upon announcement of such event to exercise his Option in whole or
in part, for a period of three months from the completion of such trigger
event, but only to the extent that such Option has not been previously
terminated.

 

(10)                            REPRESENTATIONS AND WARRANTIES OF THE
OPTIONEE: LEGEND.
The Optionee, by his acceptance hereof, represents and warrants to the Company
that his purchase of shares of Common Stock upon 

 

THOMAS
J. SHAW NONQAULIFEID STOCK OPTION

AGREEMENT
ISSUED OUTSIDE OF ANY PLAN — Page 2 of 6

 

the exercise hereof shall
be for investment and not with a view to distribution or sale, provided that
this representation and warranty shall be inoperative if, in the opinion of
counsel to the Company, a proposed sale or distribution of such shares is
pursuant to an applicable effective registration statement under the Securities
Act of 1933, as amended (the “Act”), or without such representation and
warranty is exempt from registration under the Act. The Optionee agrees that
the obligation of the Company to issue shares upon the exercise of an Option
shall also be subject, as conditions precedent, to compliance with applicable
provisions of the Act, the Securities Exchange Act of 1934, state securities
laws, rules and regulations under any of the foregoing and applicable
requirements of any securities exchange and/or securities market upon which the
Company’s securities shall be listed and/or quoted. The Company may endorse an
appropriate legend referring to the foregoing restriction upon the certificate
or certificates representing any shares issued or transferred to the Optionee
upon the exercise of this Option.

 

(11)                            NO OBLIGATION TO EXERCISE STOCK OPTION. The granting of the Option under this
Agreement shall impose no obligation upon the Optionee to exercise that Option.

 

(12)                            USE OF PROCEEDS. Proceeds from the sale of shares
pursuant to the Option granted under this Agreement shall constitute general
funds of the Company.

 

(13)                            RESERVATION OF SHARES OF STOCK. The Company, during the term of this
Agreement, will at all times reserve and keep available the number of shares of
Stock that shall be sufficient to satisfy the requirements of this Agreement.

 

(14)                            LEGAL CONSTRUCTION. In the event that any one or more of
the terms, provisions or agreements that are contained in this Agreement shall
be held by a Court of competent jurisdiction to be invalid, illegal or
unenforceable in any respect for any reason, the invalid, illegal or
unenforceable term, provision or agreement shall not affect any other term,
provision or agreement that is contained in this Agreement and this Agreement
shall be construed in all respects as if the invalid, illegal or unenforceable
term, provision or agreement had never been contained herein.

 

(15)                            COVENANTS AND AGREEMENTS AS INDEPENDENT
AGREEMENTS. Each
of the covenants and agreements that is set forth in this Agreement shall be
construed as a covenant and agreement independent of any other provision of
this Agreement. The existence of any claim or cause of action of the Optionee
against the Company, whether predicated on this Agreement or otherwise, shall
not constitute a defense to the enforcement by the Company of the covenants and
agreements that are set forth in this Agreement.

 

(16)                            ADMINISTRATION. This Agreement shall be administered by
the Compensation and Benefits Committee of the Board of Directors of the
Company (such body hereafter referred to as the “Administrator”). The
Administrator shall make determinations with respect to the terms, limitations,
restrictions, conditions and extent of that participation. Any interpretation
and construction of any provision of this Agreement by the Compensation and
Benefits Committee of the Board of Directors shall be final. The Administrator,
including any of its individual members, shall not be liable for any action or
determination made by any of them in good faith relating to this Agreement. The
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Administrator upon any questions arising under this
Agreement.

 

(17)                            ENTIRE AGREEMENT. This Agreement and the Exhibit A,
which is attached hereto and incorporated herein for all purposes, together
supersede any and all other prior understandings and agreements, either oral or
in writing, between the Parties with respect to the subject matter hereof and constitute
the sole and only agreement between the Parties with respect to the said
subject matter. All prior negotiations and agreements between the Parties with
respect to the subject matter hereof are merged into this Agreement. Each Party
to this Agreement acknowledges that no representations, inducements, promises
or agreements, orally or otherwise, have been made by any Party or by anyone
acting on behalf of any Party, which are not embodied in this Agreement and
that any agreement, statement or promise that is not contained in this
Agreement or the Exhibit A shall not be valid or binding or of any force
or effect.

 

THOMAS
J. SHAW NONQAULIFEID STOCK OPTION

AGREEMENT
ISSUED OUTSIDE OF ANY PLAN — Page 3 of 6

 

 

(18)                            PARTIES BOUND. The terms, provisions, representations,
warranties, covenants and agreements that are contained in this Agreement shall
apply to, bind upon and inure to the benefit of the Parties and their
respective heirs, executors, administrators, legal representatives and
permitted successors and assigns.

 

(19)                            TEXAS LAW TO APPLY. THIS AGREEMENT SHALL BE GOVERNED BY,
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS
(EXCLUDING ANY CONFLICTS-OF-LAW RULE OR PRINCIPLE OF TEXAS LAW THAT MIGHT REFER
THE GOVERNANCE, CONSTRUCTION OR INTERPRETATION OF THIS AGREEMENT TO THE LAWS OF
ANOTHER STATE).

 

(20)                            MODIFICATION. No change or modification of this
Agreement shall be valid or binding upon the Parties unless the change or
modification is in writing and signed by the Parties.  Notwithstanding the preceding sentence, the
Company may revoke this Option to the extent permitted in Section 21 of
this Agreement.

 

(21)                            AMENDMENT. The Administrator may discontinue or amend this
Agreement from time to time, but no material amendment shall be made without
the approval of the common stockholders.

 

Except
as provided in Section (9) of this Agreement, neither shall any
amendment impair the rights of Optionee theretofore granted without his consent;
provided, however, that if the Administrator, after consulting with Management
of the Company, determines that the application of an accounting standard in
compliance with any statement issued by the Financial Accounting Standards
Board or any other entity that reviews accounting disclosures of (or sets
accounting standards for) public companies concerning the treatment of employee
stock options would have a significant adverse effect on the Company’s
financial statements because of the fact that this Option was granted before
the issuance of such statement and it is then outstanding, then the
Administrator in its absolute discretion may cancel and revoke the Option and
the Optionee shall have no further rights in respect thereof. Such cancellation
and revocation shall be effective upon written notice by the Administrator to
the Optionee.

 

(22)                            TIME. Time is of the essence in the performance of this
Agreement.

 

(23)                            HEADINGS. The headings that are used in this Agreement are
used for reference and convenience purposes only and do not constitute
substantive matters to be considered in construing the terms and provisions of
this Agreement.

 

(24)                            GENDER AND NUMBER. Words of any gender used in this
Agreement shall be held and construed to include any other gender, and words in
the singular number shall be held to include the plural, and vice versa, unless
the context requires otherwise.

 

(25)                            NOTICE. Any notice required or permitted to be delivered
hereunder shall be deemed to be delivered upon the earlier of the expiration of
three days after deposit in the U.S. mail or actual receipt at the addresses
set forth below, or at such other addresses as they have theretofore specified
by written notice delivered in accordance herewith:

 

(A)                              Notice to the Company shall be addressed
and delivered as follows:

 

RETRACTABLE
TECHNOLOGIES, INC.

P. O.
BOX 9

511
LOBO LANE

LITTLE
ELM, TEXAS 75068-0009

ATTENTION:                                 MICHELE M. LARIOS

VICE PRESIDENT AND SECRETARY

 

(B)                                Notice to the Optionee shall be addressed
and delivered as follows:

 

THOMAS J. SHAW

_________________

_________________

 

THOMAS
J. SHAW NONQAULIFEID STOCK OPTION

AGREEMENT
ISSUED OUTSIDE OF ANY PLAN — Page 4 of 6

 

 

IN
WITNESS WHEREOF, the Company, RETRACTABLE TECHNOLOGIES, INC., has caused these
presents to be signed on this the 11th day of December, 2009 effective as of July 15,
2009 by Steven R. Wisner, its duly authorized Executive Vice President,
Engineering and Production.

 

	
   

  	
   

  	
  RETRACTABLE
  TECHNOLOGIES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BY:

  	
  s/ Steven R. Wisner

  	
   

  
	
   

  	
   

  	
   

  	
  STEVEN R. WISNER

  	
   

  
	
   

  	
   

  	
   

  	
  EXECUTIVE VICE
  PRESIDENT,

  
	
   

  	
   

  	
   

  	
  ENGINEERING
  AND PRODUCTION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  
	
  s/ Michele M. Larios

  	
   

  	
   

  	
   

  
	
  MICHELE M. LARIOS,
  SECRETARY

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ACCEPTED AND AGREED TO:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  s/ Thomas J. Shaw

  	
   

  
	
   

  	
   

  	
  THOMAS J. SHAW

  	
   

  
							

 

THOMAS
J. SHAW NONQAULIFEID STOCK OPTION

AGREEMENT
ISSUED OUTSIDE OF ANY PLAN — Page 5 of 6

 

 

EXHIBIT A

NOTICE OF EXERCISE

OF

NONQUALIFIED
STOCK OPTION

 

To:                              Retractable Technologies, Inc.

 

I hereby exercise (all/a
portion of) my NonQualified Stock Option granted by RETRACTABLE TECHNOLOGIES,
INC., in the Thomas J. Shaw NonQualified Stock Option Agreement Issued Outside
of any Plan dated effective as of July 15, 2009 (the “Agreement”) and
notify you of my desire to purchase ______________ shares of Common Stock of
the Company which were offered to me pursuant to said Option.

 

The
Option Price due for this purchase is $______________________ in cash.

 

Please
choose one:

 

___                           I have no withholding obligation.

 

___                           I am satisfying my withholding obligation
by making a direct payment by cashier’s check to the Company.

 

___                           I am satisfying my withholding obligation
by hereby authorizing increased withholding on my cash compensation payable on
the Exercise Date.

 

	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXERCISE DATE

  	
   

  	
   

  	
  THOMAS J. SHAW

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SOCIAL SECURITY NUMBER

  	
   

  
						

 

COMPANY
AUTHORIZATION OF WITHHOLDING SELECTION

 

Retractable Technologies, Inc.
hereby accepts and authorizes the choice of satisfaction of the Optionee’s
withholding obligation as indicated above.

 

	
   

  	
   

  
	
   

  	
  PRINT NAME:

  	
   

  
	
   

  	
  TITLE:

  	
   

  
				

 

THOMAS
J. SHAW NONQAULIFEID STOCK OPTION

AGREEMENT
ISSUED OUTSIDE OF ANY PLAN — Page 6 of 6

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