Document:

exv10w1

 

Exhibit 10.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in (i) the Registration Statements filed on Form F-3
(File Nos. 333-84226, 333-128361, 333-129962 and 333-130040) and in any related Prospectus and (ii)
the Registration Statements on Form S-8 (File Nos: 333-11368, 333-11414, 333-13038, 333-13664,
333-13668, 333-14254, 333-14252, 333-81564, 333-92220, 333-108833 and 333-125075) of our report
dated March 24, 2006, with respect to the consolidated financial statements and schedules of ING
Groep N.V., included in this Annual Report (Form 20-F) for the year ended December 31, 2005.

Amsterdam, The Netherlands

March 24, 2006

Ernst & Young Accountantsexv10w2

 

Exhibit 10.2

CONSENT OF INDEPENDENT PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in (i) the Registration Statements filed on Form F-3
(File Nos. 333-84226, 333-128361, 333-129962 and 333-130040) and (ii) the Registration Statements
on Form S-8 (File Nos. 333-11368, 333-11414, 333-13038, 333-13664, 333-13668, 333-14254, 333-14252,
333-81564, 333-92220, 333-108833 and 333-125075) of our report dated March 6, 2006, with respect to
the consolidated financial statements of ING Bank N.V., included by reference in this Annual Report
(Form 20-F) for the year ended December 31, 2005.

Amsterdam, The Netherlands

March 28, 2006

KPMG Accountants N.V.exv10w3

 

Exhibit 10.3

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in (i) the Registration Statements filed on Form F-3
(File Nos. 333-84226, 333-128361, 333-129962 and 333-130040) and in any related Prospectus and (ii)
the Registration Statements on Form S-8 (File Nos: 333-11368, 333-11414, 333-13038, 333-13664,
333-13668, 333-14254, 333-14252, 333-81564, 333-92220, 333-108833 and 333-125075) of our report
dated March 20, 2006, with respect to the consolidated financial statements of ING Belgium SA/NV,
not included in the ING Groep N.V. Annual Report (Form 20-F) for the year ended December 31, 2005.

Brussels, Belgium

March 24, 2006

Ernst & Young Reviseurs d’Enterprises S.C.C.Exhibit 10.1

CHASE                                                           Credit Agreement

This agreement dated as of March 27, 2006 between JPMorgan Chase Bank, N.A.
(together with its successors and assigns, the "Bank"), whose address is 707
Travis, 9th Floor, Houston, TX 77002, and SHARPS COMPLIANCE CORP. (whether one
or more, and if more than one, individually and collectively, the "Borrower"),
whose address is 9350 Kirby Drive, Houston, TX 77054.

1.       Credit Facilities.

         1.1      Scope. This agreement governs Facility A, and, unless
                  otherwise agreed to in writing by the Bank and the Borrower or
                  prohibited by applicable law, governs the Credit Facilities as
                  defined below.

         1.2      Facility A (Line of Credit). The Bank has approved a credit
                  facility to the Borrower in the principal sum not to exceed
                  $1,500,000.00 in the aggregate at any one time outstanding
                  ("Facility A"). Credit under Facility A shall be repayable as
                  set forth in a Line of Credit Note executed concurrently with
                  this agreement, and any renewals, modifications, extensions,
                  rearrangements, restatements thereof and replacements or
                  substitutions thereof. The proceeds of Facility A shall be
                  used for the following purpose: support working capital needs,
                  small acquisitions and general corporate purposes.

                  Letter of Credit Sub-Limit. At any time the Borrower is
                  entitled to an advance under Facility A, the Bank agrees to
                  issue letters of credit (all letters of credit issued for the
                  account of the Borrower which are outstanding on the date of
                  the Line of Credit Note and any letter of credit issued under
                  this agreement, together with any and all amendments,
                  modifications, renewals, extensions, increases, restatements
                  and rearrangements of and substitutions and replacements for,
                  any of the foregoing, a "Letter of Credit" or "Letters of
                  Credit") for the account of the Borrower in an amount not in
                  excess of the maximum advance that the Borrower would then be
                  entitled to obtain under Facility A, provided that (a) the
                  aggregate maximum amount which is drawn and remains
                  unreimbursed under all Letters of Credit plus the aggregate
                  maximum available amount which may be drawn under all Letters
                  of Credit which are outstanding at any time (the "L/C
                  Obligations"), shall not exceed $200,000.00, (b) the issuance
                  of any Letter of Credit with an expiration date beyond the
                  maturity date of the Line of Credit Note shall be entirely at
                  the discretion of the Bank, (c) any Letter of Credit shall be
                  a standby or commercial letter of credit and the form of the
                  requested Letter of Credit shall be satisfactory to the Bank,
                  in the Bank's sole discretion, and (d) the Borrower shall have
                  executed an application and reimbursement agreement for any
                  Letter of Credit in the Bank's standard form. While any Letter
                  of Credit is outstanding, the maximum amount of advances that
                  may be outstanding under the Line of Credit Note shall be
                  automatically reduced by the L/C Obligations. The Borrower
                  shall pay the Bank a $500.00 issuance fee and a 1.25%
                  commission fee for each standby letter of credit and each
                  commercial letter of credit that is issued. No credit shall be
                  given for fees paid due to early termination of any Letter of
                  Credit. The Borrower shall also pay the Bank's standard
                  transaction fees with respect to any transactions occurring on
                  an account of any Letter of Credit. Each fee shall be payable
                  when the related letter of credit is issued, and transaction
                  fees shall be payable upon completion of the transaction as to
                  which they are charged. All fees may be debited by the Bank to
                  any deposit account of the Borrower carried with the Bank
                  without further authority and, in any event, shall be paid by
                  the Borrower within ten (10) days following billing. The Bank
                  is authorized, but not obligated to make an advance under the
                  Line of Credit Note without notice to the Borrower, to make
                  payment on a drawing under any Letter of Credit.

         1.3      Borrowing Base. The aggregate principal amount of advances
                  outstanding at any one time under Facility A, plus L/C
                  Obligations (the "Aggregate Outstanding Amount") shall not
                  exceed the Borrowing Base or the maximum principal amount then
                  available under the Line of Credit Note (and any and all
                  renewals, modifications, extensions, rearrangements,
                  restatements thereof and replacements or substitutions
                  thereof) evidencing Facility A, whichever is less (the
                  "Maximum Available Amount"). If at any time the Aggregate
                  Outstanding Amount exceeds the Maximum Available Amount, the
                  Borrower shall immediately pay the Bank an amount equal to
                  such excess. "Borrowing Base" means the aggregate of:

                  A. 80% of the book value of all Eligible Accounts; plus

                  B. 50% of the lower of cost (determined using the first-in,
                  first-out method of inventory accounting) or wholesale market
                  value, as determined by the Bank in its sole discretion, of
                  all Eligible Inventory, not to exceed the aggregate of
                  $1,000,000.00 or 50% of loans plus letters of credit
                  outstanding.
<PAGE>

2.       Definitions. As used in this agreement, the following terms have the
         following respective meanings:

         2.1      "Credit Facilities" means all extensions of credit from the
                  Bank to the Borrower, whether now existing or hereafter
                  arising, including but not limited to those described in
                  Section 1 and those extended contemporaneously with this
                  agreement.

         2.2      "Liabilities" means all debts, obligations, indebtedness and
                  liabilities of every kind and character of the Borrower to the
                  Bank, whether individual, joint and several, contingent or
                  otherwise, now or hereafter existing in favor of the Bank,
                  including, without limitation, all liabilities, interest,
                  costs and fees, arising under or from any note, open account,
                  overdraft, credit card, lease, Rate Management Transaction,
                  letter of credit application, endorsement, surety agreement,
                  guaranty, acceptance, foreign exchange contract or depository
                  service contract, whether payable to the Bank or to a third
                  party and subsequently acquired by the Bank, any monetary
                  obligations (including interest) incurred or accrued during
                  the pendency of any bankruptcy, insolvency, receivership or
                  other similar proceedings, regardless of whether allowed or
                  allowable in such proceeding, and all renewals, extensions,
                  modifications, consolidations, rearrangements, restatements,
                  replacements or substitutions of any of the foregoing. The
                  term "Rate Management Transaction" in this agreement means any
                  transaction (including an agreement with respect thereto) that
                  is a rate swap, basis swap, forward rate transaction,
                  commodity swap, commodity option, equity or equity index swap,
                  equity or equity index option, bond option, interest rate
                  option, foreign exchange transaction, cap transaction, floor
                  transaction, collar transaction, forward transaction, currency
                  swap transaction, cross-currency rate swap transaction,
                  currency option, derivative transaction or any other similar
                  transaction (including any option with respect to any of these
                  transactions) or any combination thereof, whether linked to
                  one or more interest rates, foreign currencies, commodity
                  prices, equity prices or other financial measures.

         2.3      "Notes" means all promissory notes, instruments and/or
                  contracts evidencing the terms and conditions of any of the
                  Credit Facilities.

         2.4      "Account" means a trade account, account receivable, other
                  receivable, or other right to payment for goods sold or leased
                  or services rendered owing to the Borrower (or to a third
                  party grantor acceptable to the Bank).

         2.5      "Account Debtor" means the person or entity obligated upon an
                  Account.

         2.6      "Affiliate" means any person, corporation or other entity
                  directly or indirectly controlling, controlled by or under
                  common control with the Borrower and any director or officer
                  of the Borrower or any Subsidiary of the Borrower.

         2.7      "Distributions" means all dividends and other distributions
                  made by the Borrower to its shareholders, partners, owners or
                  members, as the case may be, other than salary, bonuses, and
                  other compensation for services expended in the current
                  accounting period.

         2.8      "Eligible Accounts" means, at any time, all of the Borrower's
                  Accounts in which the Bank has a first priority perfected
                  continuing security interest and which are earned and invoiced
                  within thirty (30) days of being earned and which contain
                  selling terms and conditions acceptable to the Bank, are
                  payable on ordinary trade terms, and are not evidenced by a
                  promissory note, other instrument or chattel paper. The net
                  amount of any Eligible Account against which the Borrower may
                  borrow shall exclude all returns, discounts, credits, and
                  offsets of any nature. Unless otherwise agreed to by the Bank
                  in writing, Eligible Accounts do not include Accounts: (1)
                  which are not owned by the Borrower free and clear of all
                  security interests, liens, encumbrances, constructive trust,
                  statutory priorities not in favor of the Bank, and claims of
                  third parties, except the Bank; (2) with respect to which the
                  Account Debtor is an Affiliate, an employee or agent of the
                  Borrower; (3) with respect to which the Account Debtor is an
                  Affiliate or otherwise affiliated with or related to the
                  Borrower; (4) with respect to which goods are placed on
                  consignment, guaranteed sale, bill-and-hold, sale-and-return,
                  sale on approval, cash-on-delivery or other terms by reason of
                  which the payment by the Account Debtor may be conditional;
                  (5) with respect to which the Account Debtor is not a resident
                  of the United States, except to the extent such Accounts are
                  otherwise Eligible Accounts and are supported by insurance,
                  bonds or other assurances satisfactory to the Bank; (6)
                  subject to the U.S. Office of Foreign Asset Control Special
                  Designated Nationals and Blocked Person's List, or with
                  respect to which the Account Debtor is otherwise a person or
                  entity with whom the Borrower or the Bank is prohibited from
                  doing business by any applicable law, regulation, executive
                  order or other legal directive; (7) which are not payable in
                  U.S. Dollars; (8) with respect to which the Borrower is or may
                  become liable to the Account Debtor for goods sold or services
                  rendered by the Account Debtor to the Borrower; (9) which are
                  subject to dispute, counterclaim, deduction, withholding,
                  defense, or setoff; (10) with respect to which the goods have
                  not been shipped or delivered, or the services have not been
                  rendered, to the Account Debtor, or which otherwise constitute
                  pre-billed Accounts; (11) which constitute retainage, or are
                  bonded Accounts; (12) with respect to which the Bank, in its
                  sole discretion, deems the creditworthiness, financial or
                  business condition of the Account Debtor to be unsatisfactory;

                                       2

<PAGE>

                  (13) of any Account Debtor who has filed or has had filed
                  against it a petition in bankruptcy or an application for
                  relief under any provision of any state or federal bankruptcy,
                  insolvency, or debtor-in-relief acts, or who has had appointed
                  a trustee, custodian, or receiver for the assets of such
                  Account Debtor, or who has made an assignment for the benefit
                  of creditors or has become insolvent or fails generally to pay
                  its debts (including its payrolls) as such debts become due;
                  (14) with respect to which the Account Debtor is the United
                  States government or any department or agency of the United
                  States; and any other Accounts deemed ineligible by the Bank
                  in its sole discretion (15) which have not been paid in full
                  within ninety (90) days from the invoice date; and (16) due
                  from any one Enumerated Account Debtor to the extent such
                  Accounts constitute more than 30% of all Eligible Accounts. In
                  no event will the balance of any Account of any single Account
                  Debtor be eligible whenever the portion of the Accounts of
                  such Account Debtor which have not been paid within ninety
                  (90) days from the invoice date is in excess of 25% of the
                  total amount outstanding on all Accounts of such Account
                  Debtor.

         2.9      "Eligible Inventory" means, at any time, all of the Borrower's
                  Inventory in which the Bank has a first priority perfected
                  continuing security interest except Inventory which is: (1)
                  not owned by the Borrower free and clear of all security
                  interests, liens, encumbrances, and claims of third parties,
                  except the Bank; (2) slow moving, obsolete, unsalable,
                  damaged, defective, perishable, or unfit for further
                  processing; (3) work in process; (4) subject to consignment or
                  otherwise in the possession of a third party, unless otherwise
                  agreed to by the Bank in writing; (5) in transit or located
                  outside of the United States; (6) identified to be purchased
                  under a contract under which the Borrower has received, or is
                  entitled to receive, an advance payment; (7) determined by the
                  Bank in its sole discretion to be ineligible due to licensing,
                  intellectual property, or legal or regulatory issues which
                  exist making it difficult to resell such Inventory; and (8)
                  comprised of samples, returns, rejected items, re-work items,
                  non-standard items, odd-lots, or repossessed goods; (9)
                  produced in violation of applicable law including the Fair
                  Labor Standards Act and the regulations and order of the
                  Department of Labor; or (10) otherwise deemed ineligible by
                  the Bank in its sole discretion; provided, however, that
                  transportation and storage charges shall be excluded from
                  amounts otherwise included in Eligible Inventory.

         2.10     "Enumerated Account Debtor" means any one of the following
                  entities obligated upon an Account:  Invacare Corporation;
                  Medical Specialties Distributors, LLC; Apria Healthcare Group,
                  Inc.; or Monsanto Company.

         2.11     "Inventory" means all of the Borrower's raw materials, work in
                  process, finished goods, merchandise, parts and supplies, of
                  every kind and description, and goods held for sale or lease
                  or furnished under contracts of service in which the Borrower
                  now has or hereafter acquires any right, whether held by the
                  Borrower or others, and all documents of title, warehouse
                  receipts, bills of lading, and all other documents of every
                  type covering all or any part of the foregoing. Inventory
                  includes inventory temporarily out of the Borrower's custody
                  or possession and all returns on Accounts.

         2.12     "Intangible Assets" means the aggregate amount of: (1) all
                  assets classified as intangible assets under generally
                  accepted accounting principles, including, without limitation,
                  goodwill, trademarks, patents, copyrights, organization
                  expenses, franchises, licenses, trade names, brand names,
                  mailing lists, catalogs, excess of cost over book value of
                  assets acquired, and bond discount and underwriting expenses;
                  and (2) loans or advances to, investments in, or receivables
                  from (i) Affiliates, officers, directors, employees or
                  shareholders of the Borrower or (ii) any person or entity if
                  such loan, advance, investment or receivable is outside the
                  Borrower's normal course of business.

         2.13     "Subsidiary" means, as to a particular person, any entity of
                  which fifty (50%) or more of the indicia of equity rights is
                  at the time of determination directly or indirectly owned by
                  the person or by one or more persons controlled by,
                  controlling or under common control with the person.

         2.14     "Tangible Net Worth" means total assets less the sum of
                  Intangible Assets and total liabilities.

         2.15     "Related Documents" means the Notes, Letters of Credit, all
                  loan agreements, credit agreements, reimbursement agreements,
                  security agreements, mortgages, deeds of trust, pledge
                  agreements, assignments, guaranties, and any other instrument
                  or document executed in connection with this agreement or in
                  connection with any of the Liabilities.

3.       Conditions Precedent.

         3.1      Conditions Precedent to Initial Extension of Credit. Before
                  the first extension of credit governed by this agreement,
                  whether by disbursement of a loan, issuance of a letter of
                  credit, or otherwise, the Borrower shall deliver to the Bank,
                  in form and substance satisfactory to the Bank:

                                       3

<PAGE>

                  A. Loan Documents. The Notes, and as applicable, the letter of
                  credit applications, reimbursement agreements, the security
                  agreements, the pledge agreements, financing statements,
                  mortgages or deeds of trust, the guaranties, the subordination
                  agreements, and any other loan documents which the Bank may
                  reasonably require to give effect to the transactions
                  described in this agreement;

                  B. Evidence of Due Organization and Good Standing. Evidence,
                  satisfactory to the Bank, of the due organization and good
                  standing of the Borrower and every other business entity that
                  is a party to this agreement or any other loan document
                  required by this agreement; and

                  C. Evidence of Authority to Enter into Loan Documents.
                  Evidence that (i) each party to this agreement and any other
                  loan document required by this agreement is authorized to
                  enter into the transactions described in this agreement and
                  the other loan documents, and (ii) the person signing on
                  behalf of each such party is authorized to do.

         3.2      Conditions Precedent to Each Extension of Credit. Before any
                  extension of credit governed by this agreement, whether by
                  disbursement of a loan, issuance of a letter of credit or
                  otherwise, the following conditions must be satisfied:

                  A. Representations. The representations of the Borrower are
                  true on and as of the date of the extension of credit;

                  B. No Event of Default. No default has occurred in any
                  provision of this agreement, the Notes or any other Related
                  Documents and is continuing or would result from the extension
                  of credit, and no event has occurred which would constitute
                  the occurrence of any default but for the lapse of time until
                  the end of any grace or cure period; and

                  C. Additional Approvals, Opinions, and Documents. The Bank has
                  received any other approvals, opinions and documents as it may
                  reasonably request.

4.       Affirmative Covenants. The Borrower agrees to do, and cause each of its
         Subsidiaries to do, each of the following:

         4.1      Insurance. Maintain insurance with financially sound and
                  reputable insurers, with such insurance and insurers to be
                  acceptable to the Bank, covering its properties and business
                  against those casualties and contingencies and in the types
                  and amounts as are in accordance with sound business and
                  industry practices.

         4.2      Existence. Maintain its existence and business operations as
                  presently in effect in accordance with all applicable laws and
                  regulations, pay its debts and obligations when due under
                  normal terms, and pay on or before their due date, all taxes,
                  assessments, fees and other governmental monetary obligations,
                  except as they may be contested in good faith if they have
                  been properly reflected on its books and, at the Bank's
                  request, adequate funds or security has been pledged to insure
                  payment.

         4.3      Financial Records. Maintain proper books and records of
                  account, in accordance with generally accepted accounting
                  principles, and consistent with financial statements
                  previously submitted to the Bank.

         4.4      Inspection. Permit the Bank to inspect and copy the Borrower's
                  business records at such times and at such intervals as the
                  Bank may reasonably require, and to discuss the Borrower's
                  business, operations, and financial condition with the
                  Borrower's officers and accountants.

         4.5      Financial Reports.  Furnish to the Bank  whatever information,
                  books and records the Bank may from time to time reasonably
                  request, including at a minimum:

                  A. Within thirty (30) days after each quarterly period, the
                  consolidated, if applicable, balance sheet as of the end of
                  that period and statements of income, cash flow and retained
                  earnings, from the beginning of that fiscal year to the end of
                  that period, certified as correct by one of its authorized
                  agents.

                  B. Within 150 days after and as of the end of each of its
                  fiscal years, a detailed consolidated, if applicable,
                  financial statement including a balance sheet and statements
                  of income, cash flow and retained earnings, such financial
                  statement, to be audited by an independent certified public
                  accountant of recognized standing acceptable to the Bank in
                  the Bank's sole discretion.

                  C. Within thirty (30) days after and as of the end of each
                  calendar month, a list of accounts receivable, aged from date
                  of invoice and certified as correct by one of its authorized
                  agents.

                                       4

<PAGE>

                  D. Within thirty (30) days after and as of the end of each
                  calendar month, a borrowing base certificate, in form and
                  detail satisfactory to the Bank, along with such supporting
                  documentation as the Bank may request.

         4.6      Notices of Claims, Litigation, Defaults, etc. Promptly inform
                  the Bank in writing of (1) all existing and all threatened
                  litigation, claims, investigations, administrative proceedings
                  and similar actions affecting the Borrower which could
                  materially affect its business, assets, affairs, prospects or
                  financial condition of the Borrower or its Subsidiaries; (2)
                  the occurrence of any event which gives rise to the Bank's
                  option to terminate the Credit Facilities; (3) the institution
                  of steps by the Borrower to withdraw from, or the institution
                  of any steps to terminate, any employee benefit plan as to
                  which the Borrower may have liability; (4) any reportable
                  event or any prohibited transaction in connection with any
                  employee benefit plan; (5) any additions to or changes in the
                  locations of the Borrower's or any of the Borrower's or
                  Subsidiary's businesses; and (6) any alleged breach of any
                  provision of this agreement or of any other agreement related
                  to the Credit Facilities by the Bank.

         4.7      Additional Information.  Furnish such additional information
                  and statements, as the Bank may request, from time to time.

         4.8      Insurance Reports.  Furnish to the Bank, upon request of the
                  Bank, reports on each existing insurance policy showing such
                  information as the Bank may reasonably request.

         4.9      Other Agreements.  Comply with all terms and conditions of all
                  other agreements, whether now or hereafter existing, between
                  the Borrower and any other party.

         4.10     Title to Assets and Property. Maintain good and marketable
                  title to all of the Borrower's assets and properties.

         4.11     Additional Assurances. Promptly make, execute and deliver any
                  and all agreements, documents, instruments and other records
                  that the Bank may request to evidence any of the Credit
                  Facilities, cure any defect in the execution and delivery of
                  any of the Related Documents, perfect any lien, comply with
                  legal requirements applicable to the Bank or the Credit
                  Facilities or more fully to describe particular aspects of the
                  agreements set forth or intended to be set forth in any of the
                  Related Documents.

         4.12     Employee Benefit Plans.  Maintain each employee benefit plan
                  as to which the Borrower may have any liability, in compliance
                  with all applicable requirements of law and regulations.

         4.13     Management. Maintain Dr. Burton J. Kunik as President and CEO.

         4.14     Banking Relationship.  Establish and maintain its primary
                  banking depository and disbursement  relationship with the
                  Bank.

         4.15     Compliance Certificates. Provide the Bank, within thirty (30)
                  days after the end of each fiscal quarter, with a certificate
                  executed by the Borrower's chief financial officer, or other
                  officer or a person acceptable to the Bank, certifying that,
                  as of the date of the certificate, no default exists under any
                  provision of this agreement.

5.       Negative Covenants.

         5.1      Unless otherwise noted, the financial requirements set forth
                  in this section will be computed in accordance with generally
                  accepted accounting principles applied on a basis consistent
                  with financial statements previously submitted by the Borrower
                  to the Bank.

         5.2      Without the written consent of the Bank, the Borrower will
                  not:

                  A. Dividends. Acquire or retire any of its shares of capital
                  stock, or, other than dividends in its capital stock, declare
                  or pay dividends or make any other distributions upon any of
                  its shares of capital stock; provided, however, that following
                  any fiscal year with respect to which the Borrower maintained
                  status as an "S" corporation under the Internal Revenue Code,
                  if there is no existing default under this agreement or any
                  agreement related to the Liabilities and to do so will not
                  cause a default under any of such agreements, the Borrower may
                  pay dividends to its shareholders sufficient in amount to pay
                  their income tax obligation attributable to the Borrower's
                  taxable income.

                  B. Sale of Shares. Issue, sell or otherwise dispose of any
                  shares of its capital stock or other securities, or rights,
                  warrants or options to purchase or acquire those shares or
                  securities.

                                       5
<PAGE>

                  C. Debt. Incur, contract for, assume, or permit to remain
                  outstanding, indebtedness for borrowed money, installment
                  obligations, or obligations under capital leases or operating
                  leases, other than (1) unsecured trade debt incurred in the
                  ordinary course of business, (2) indebtedness owing to the
                  Bank, (3) indebtedness reflected in the latest financial
                  statement of the Borrower furnished to the Bank prior to
                  execution of this agreement and that is not to be paid with
                  proceeds of borrowings under the Credit Facilities, and (4)
                  indebtedness outstanding as of the date hereof that has been
                  disclosed to the Bank in writing and that is not to be paid
                  with proceeds of borrowings under the Credit Facilities.

                  D. Guaranties. Guarantee or otherwise become or remain
                  secondarily liable on the undertaking of another, except for
                  endorsement of drafts for deposit and collection in the
                  ordinary course of business.

                  E. Liens. Create or permit to exist any lien on any of its
                  property, real or personal, except: existing liens known to
                  the Bank; liens to the Bank; liens incurred in the ordinary
                  course of business securing current non-delinquent liabilities
                  for taxes, worker's compensation, unemployment insurance,
                  social security and pension liabilities.

                  F. Use of Proceeds. Use, or permit any proceeds of the Credit
                  Facilities to be used, directly or indirectly, for the purpose
                  of "purchasing or carrying any margin stock" within the
                  meaning of Federal Reserve Board Regulation U. At the Bank's
                  request, the Borrower will furnish a completed Federal Reserve
                  Board Form U-1.

                  G. Continuity of Operations. (1) Engage in any business
                  activities substantially different from those in which the
                  Borrower is presently engaged; (2) cease operations,
                  liquidate, merge, transfer or consolidate with any other
                  entity, change its name, dissolve, or sell any assets out of
                  the ordinary course of business; or (3) enter into any
                  arrangement with any person providing for the leasing by the
                  Borrower or any Subsidiary of real or personal property which
                  has been sold or transferred by the Borrower or Subsidiary to
                  such person.

                  H. Limitation on Negative Pledge Clauses. Enter into any
                  agreement with any person other than the Bank which prohibits
                  or limits the ability of the Borrower or any of its
                  subsidiaries to create or permit to exist any lien on any of
                  its property, assets or revenues, whether now owned or
                  hereafter acquired.

                  I. Conflicting Agreements. Enter into any agreement containing
                  any provision which would be violated or breached by the
                  performance of the Borrower's obligations under this agreement
                  or any of the other Related Documents.

                  J. Transfer of Ownership. Permit any pledge of any ownership
                  interest in the Borrower, or any sale or other transfer of any
                  ownership interest in the Borrower; provided, however, Dr.
                  Burton J. Kunik may sell or transfer up to 25% of the common
                  stock in the Borrower owned by him as of the date of this
                  agreement.

                  K. Loans, Advances to and Investments in Others and
                  Receivables from Others. Make any loans or advances to,
                  investments in, or incur any receivables from any person,
                  except (A) loans, advances, investments or receivables, made
                  or incurred in the ordinary course of business, to, in or from
                  any person that is not (i) an Affiliate, (ii) an employee of
                  the Borrower, or (iii) an equity holder of the Borrower, and
                  (B) loans, advances, investments and receivables existing as
                  of the date of this agreement that have been disclosed to the
                  Bank in writing and that are not to be paid with proceeds of
                  borrowings under the Credit Facilities.

                  L. Tangible Net Worth. Permit as of any fiscal quarter end,
                  its Tangible Net Worth to be less than the following amounts
                  for the following periods: for the period June 30, 2006 to
                  June 30, 2007, $1.00, increasing by 90% of net income annually
                  thereafter.

                  M. Debt Service Coverage Ratio. Permit at any time, its ratio
                  of earnings before interest, taxes, depreciation and
                  amortization minus non-financed capital expenditures, minus
                  any Distributions, to principal payments on long term debt
                  plus capitalized lease payments plus interest plus scheduled
                  principal and interest on subordinated debt (whether made or
                  not made) for the same such period to be less than 1.25 to
                  1.00.

                  N. Government Regulation. (1) Be or become subject at any time
                  to any law, regulation, or list of any government agency
                  (including, without limitation, the U.S. Office of Foreign
                  Asset Control list) that prohibits or limits Bank from making
                  any advance or extension of credit to Borrower or from
                  otherwise conducting business with Borrower, or (2) fail to
                  provide documentary and other evidence of Borrower's identity
                  as may be requested by Bank at any time to enable Bank to
                  verify Borrower's identity or to comply with any applicable
                  law or regulation, including, without limitation, Section 326
                  of the USA Patriot Act of 2001, 31 U.S.C. Section 5318.

                                       6

<PAGE>

                  O. Subsidiaries and Acquisitions. Form, create or acquire any
                  Subsidiary without prior consent of the Bank; provided,
                  however, the Borrower may expend sums not to exceed
                  $500,000.00 in the aggregate for the cash acquisition of other
                  entities without prior consent of the Bank.

6.       Representations.

         6.1      Representations and Warranties by the Borrower. To induce the
                  Bank to enter into this agreement and to extend credit or
                  other financial accommodations under the Credit Facilities,
                  the Borrower represents and warrants as of the date of this
                  agreement and as of the date of each request for credit under
                  the Credit Facilities that each of the following statements is
                  and shall remain true and correct throughout the term of this
                  agreement and until all Credit Facilities and all amounts
                  owing under the Notes and other Related Documents are paid in
                  full. The Borrower represents that: (a) the execution and
                  delivery of this agreement and the Notes, and the performance
                  of the obligations they impose, do not violate any law,
                  conflict with any agreement by which it is bound, or require
                  the consent or approval of any governmental authority or other
                  third party, (b) this agreement and the Notes are valid and
                  binding agreements, enforceable according to their terms, (c)
                  all balance sheets, profit and loss statements, and other
                  financial statements and other information furnished to the
                  Bank in connection with the Liabilities are accurate and
                  fairly reflect the financial condition of the organizations
                  and persons to which they apply on their effective dates,
                  including contingent liabilities of every type, which
                  financial condition has not changed materially and adversely
                  since those dates, (d) no litigation, claim, investigation,
                  administrative proceeding or similar action (including those
                  for unpaid taxes) against the Borrower is pending or
                  threatened, and no other event has occurred which may in any
                  one case or in the aggregate materially adversely affect the
                  Borrower's financial condition and properties, other than
                  litigation, claims, or other events, if any, that have been
                  disclosed to and acknowledged by the Bank in writing, (e) all
                  of the Borrower's tax returns and reports that are or were
                  required to be filed, have been filed, and all taxes,
                  assessments and other governmental charges have been paid in
                  full, except those presently being contested by the Borrower
                  in good faith and for which adequate reserves have been
                  provided, (f) the Borrower is not an "investment company" or a
                  company "controlled" by an "investment company", within the
                  meaning of the Investment Company Act of 1940, as amended, (g)
                  the Borrower is not a "holding company", or a "subsidiary
                  company" of a "holding company" or an "affiliate" of a
                  "holding company" or of a "subsidiary company" of a "holding
                  company" within the meaning of the Public Utility Holding
                  Company Act of 1935, as amended, (h) there are no defenses or
                  counterclaims, offsets or adverse claims, demands or actions
                  of any kind, personal or otherwise, that the Borrower could
                  assert with respect to this agreement or the Credit
                  Facilities, (i) the Borrower owns, or is licensed to use, all
                  trademarks, trade names, copyrights, technology, know-how and
                  processes necessary for the conduct of its business as
                  currently conducted, and (j) no part of the proceeds of the
                  Credit Facilities will be used for "purchasing" or "carrying"
                  any "margin stock" within the respective meanings of each of
                  the quoted terms under Regulation U of the Board of Governors
                  of the Federal Reserve System of the United States (the
                  "Board") as now and from time to time hereafter in effect or
                  for any purpose which violates the provisions of any
                  regulations of the Board. The Borrower, other than a natural
                  person, further represents that: (a) it is duly organized and
                  validly existing under the laws of the state where it is
                  organized and is in good standing in each state where it is
                  doing business, and (b) the execution and delivery of this
                  agreement and the Notes and the performance of the obligations
                  they impose (i) are within its powers, (ii) have been duly
                  authorized by all necessary action of its governing body, and
                  (iii) do not contravene the terms of its articles of
                  incorporation or organization, its by-laws, or any
                  partnership, operating or other agreement governing its
                  affairs.

         6.2      Representations and Warranties Regarding Assets. To induce the
                  Bank to enter into this agreement and to extend credit or
                  other financial accommodations under the Credit Facilities,
                  the Borrower represents and warrants as of the date of this
                  agreement and as of the date of each request for credit under
                  the Credit Facilities that each of the following statements is
                  and shall remain true and correct throughout the term of this
                  agreement and until all Credit Facilities and all amounts
                  owing under the Notes and other Related Documents are paid in
                  full. With respect to any asset of the Borrower utilized in
                  the calculation of the Borrowing Base set forth in this
                  agreement, the Borrower represents and warrants to the Bank:
                  (1) each asset represented by the Borrower to be eligible for
                  Borrowing Base purposes of this agreement conforms to the
                  eligibility definitions set forth in this agreement (2) all
                  asset values delivered to the Bank will be true and correct,
                  subject to immaterial variance; and be determined on a
                  consistent accounting basis; (3) except as agreed to the
                  contrary by the Bank in writing, each asset is now and at all
                  times hereafter will be in the Borrower's physical possession
                  and shall not be held by others on consignment, sale or
                  approval, or sale or return; (4) except as reflected in
                  schedules delivered to the Bank, each asset is now and at all
                  times hereafter will be of good and merchantable quality, free
                  from defects; (5) each asset is not now and will not at any
                  time hereafter be stored with a bailee, warehouseman, or
                  similar party without the Bank's prior written consent, and in
                  such event, the Borrower will concurrently at the time of
                  bailment cause any such bailee, warehouseman, or similar party
                  to issue and deliver to the Bank, warehouseman receipts in the
                  Bank's name evidencing the storage of the assets; and (6) the
                  Bank, its assigns, or agents shall have the right at any time
                  and at the Borrower's expense to inspect, examine and audit
                  the Borrower's records, and if Accounts are included in the
                  calculation of Borrowing Base, confirm with Account Debtors
                  the accuracy of such Accounts, and inspect and examine the
                  assets and to check and test the same as to quality, quantity,
                  value, and condition.

                                       7
<PAGE>

7.       Default/Remedies. If any of the Credit Facilities are not paid at
         maturity, whether by acceleration or otherwise, or if a default by
         anyone occurs under the terms of this agreement, the Notes or any other
         Related Documents, then the Bank shall have all of the rights and
         remedies provided by any law, equity or agreement.

8.       Miscellaneous.

         8.1      Notice. Any notices and demands under or related to this
                  document shall be in writing and delivered to the intended
                  party at its address stated herein, and if to the Bank, at its
                  main office if no other address of the Bank is specified
                  herein, by one of the following means: (a) by hand, (b) by a
                  nationally recognized overnight courier service, or (c) by
                  certified mail, postage prepaid, with return receipt
                  requested. Notice shall be deemed given: (a) upon receipt if
                  delivered by hand, (b) on the Delivery Day after the day of
                  deposit with a nationally recognized courier service, or (c)
                  on the third Delivery Day after the notice is deposited in the
                  mail. "Delivery Day" means a day other than a Saturday, a
                  Sunday or any other day on which national banking associations
                  are authorized to be closed. Any party may change its address
                  for purposes of the receipt of notices and demands by giving
                  notice of such change in the manner provided in this
                  provision.

         8.2      No Waiver. No delay on the part of the Bank in the exercise of
                  any right or remedy waives that right or remedy. No single or
                  partial exercise by the Bank of any right or remedy precludes
                  any other future exercise of it or the exercise of any other
                  right or remedy. No waiver or indulgence by the Bank of any
                  default is effective unless it is in writing and signed by the
                  Bank, nor shall a waiver on one occasion bar or waive that
                  right on any future occasion.

         8.3      Integration. This agreement, the Notes, and the other Related
                  Documents to the Credit Facilities embody the entire agreement
                  and understanding between the Borrower and the Bank and
                  supersede all prior agreements and understandings relating to
                  their subject matter. If any one or more of the obligations of
                  the Borrower under this agreement or the Notes is invalid,
                  illegal or unenforceable in any jurisdiction, the validity,
                  legality and enforceability of the remaining obligations of
                  the Borrower shall not in any way be affected or impaired, and
                  the invalidity, illegality or unenforceability in one
                  jurisdiction shall not affect the validity, legality or
                  enforceability of the obligations of the Borrower under this
                  agreement, the Notes and the other Related Documents in any
                  other jurisdiction.

         8.4      Joint and Several  Liability.  Each party executing this
                  agreement as the Borrower is individually, jointly and
                  severally liable under this agreement.

         8.5      Governing Law and Venue. This agreement shall be governed by
                  and construed in accordance with the laws of the State of
                  Texas (without giving effect to its laws of conflicts). The
                  Borrower agrees that any legal action or proceeding with
                  respect to any of its obligations under this agreement may be
                  brought by the Bank in any state or federal court located in
                  the State of Texas, as the Bank in its sole discretion may
                  elect. By the execution and delivery of this agreement, the
                  Borrower submits to and accepts, for itself and in respect of
                  its property, generally and unconditionally, the non-exclusive
                  jurisdiction of those courts. The Borrower waives any claim
                  that the State of Texas is not a convenient forum or the
                  proper venue for any such suit, action or proceeding.

         8.6      Captions.  Section headings are for convenience of reference
                  only and do not affect the interpretation of this agreement.

         8.7      Survival of Representations and Warranties. The Borrower
                  understands and agrees that in extending the Credit
                  Facilities, the Bank is relying on all representations,
                  warranties, and covenants made by the Borrower in this
                  agreement or in any certificate or other instrument delivered
                  by the Borrower to the Bank under this agreement. The Borrower
                  further agrees that regardless of any investigation made by
                  the Bank, all such representations, warranties and covenants
                  will survive the making of the Credit Facilities and delivery
                  to the Bank of this agreement, shall be continuing in nature,
                  and shall remain in full force and effect until such time as
                  the Borrower's indebtedness to the Bank shall be paid in full.

         8.8      Non-Liability of the Bank. The relationship between the
                  Borrower and the Bank created by this agreement is strictly a
                  debtor and creditor relationship and not fiduciary in nature,
                  nor is the relationship to be construed as creating any
                  partnership or joint venture between the Bank and the
                  Borrower. The Borrower is exercising the Borrower's own
                  judgement with respect to the Borrower's business. All
                  information supplied to the Bank is for the Bank's protection
                  only and no other party is entitled to rely on such
                  information. There is no duty for Bank to review, inspect,
                  supervise or inform the Borrower of any matter with respect to
                  the Borrower's business. The Bank and the Borrower intend that
                  the Bank may reasonably rely on all information supplied by
                  the Borrower to the Bank, together with all representations
                  and warranties given by the Borrower to the Bank, without
                  investigation or confirmation by the Bank and that any
                  investigation or failure to investigate will not diminish the
                  Bank's right to so rely.

                                       8
<PAGE>

         8.9      Indemnification of the Bank. The Borrower agrees to indemnify,
                  defend and hold the Bank, its parent companies, subsidiaries,
                  affiliates, their respective successors and assigns and each
                  of their respective shareholders, directors, officers,
                  employees and agents (collectively, the "Indemnified Persons")
                  harmless from any and against any and all loss, liability,
                  obligation, damage, penalty, judgment, claim, deficiency,
                  expense, interest, penalties, attorneys' fees (including the
                  fees and expenses of attorneys engaged by the Indemnified
                  Person at the Indemnified Person's reasonable discretion) and
                  amounts paid in settlement ("Claims") to which any Indemnified
                  Person may become subject arising out of or relating to this
                  agreement or the Collateral, including any Claims resulting
                  from any Indemnified Person's own negligence, except to the
                  limited extent that the Claims are proximately caused by the
                  Indemnified Person's gross negligence or willful misconduct.
                  The indemnification provided for in this paragraph shall
                  survive the termination of this agreement and shall not be
                  affected by the presence, absence or amount of or the payment
                  or nonpayment of any claim under, any insurance.

         8.10     Counterparts. This agreement may be executed in multiple
                  counterparts, each of which, when so executed, shall be deemed
                  an original, but all such counterparts, taken together, shall
                  constitute one and the same agreement.

         8.11     Sole Discretion of the Bank. Whenever the Bank's consent or
                  approval is required under this agreement, the decision as to
                  whether or not to consent or approve shall be in the sole and
                  exclusive discretion of the Bank and the Bank's decision shall
                  be final and conclusive.

         8.12     Advice of Counsel. The Borrower acknowledges that it has been
                  advised by counsel, or had the opportunity to be advised by
                  counsel, in the negotiation, execution and delivery of this
                  agreement and any Related Documents.

         8.13     Recovery of Additional Costs. If the imposition of or any
                  change in any law, rule, regulation, or guideline, or the
                  interpretation or application of any thereof by any court or
                  administrative or governmental authority (including any
                  request or policy not having the force of law) shall impose,
                  modify, or make applicable any taxes (except federal, state,
                  or local income or franchise taxes imposed on the Bank),
                  reserve requirements, capital adequacy requirements, or other
                  obligations which would (A) increase the cost to the Bank for
                  extending or maintaining the Credit Facilities, (B) reduce the
                  amounts payable to the Bank under the Credit Facilities, or
                  (C) reduce the rate of return on the Bank's capital as a
                  consequence of the Bank's obligations with respect to the
                  Credit Facilities, then the Borrower agrees to pay the Bank
                  such additional amounts as will compensate the Bank therefor,
                  within five (5) days after the Bank's written demand for such
                  payment. The Bank's demand shall be accompanied by an
                  explanation of such imposition or charge and a calculation in
                  reasonable detail of the additional amounts payable by the
                  Borrower, which explanation and calculations shall be
                  conclusive in the absence of manifest error.

         8.14     Conflicting Terms. If this agreement is inconsistent with any
                  provision in any other Related Documents, the Bank shall
                  determine, in the Bank's sole and absolute discretion, which
                  of the provisions shall control any such inconsistency.

         8.15     Expenses. The Borrower agrees to pay or reimburse the Bank for
                  all its out-of-pocket costs and expenses and reasonable
                  attorneys' fees incurred in connection with the development,
                  preparation and execution of, and in connection with the
                  enforcement or preservation of any rights under, this
                  agreement, any amendment, supplement, or modification thereto,
                  and any other documents prepared in connection herewith or
                  therewith. These costs and expenses include without limitation
                  any costs or expenses incurred by the Bank in any bankruptcy,
                  reorganization, insolvency or other similar proceeding.

9.       USA PATRIOT ACT  NOTIFICATION.  The following notification is provided
         to Borrower pursuant to Section 326 of the USA Patriot Act of 2001,
         31 U.S.C. Section 5318:

         IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To
         help the government fight the funding of terrorism and money laundering
         activities, Federal law requires all financial institutions to obtain,
         verify, and record information that identifies each person or entity
         that opens an account, including any deposit account, treasury
         management account, loan, other extension of credit, or other financial
         services product. What this means for Borrower: When Borrower opens an
         account, if Borrower is an individual Bank will ask for Borrower's
         name, taxpayer identification number, residential address, date of
         birth, and other information that will allow Bank to identify Borrower,
         and if Borrower is not an individual Bank will ask for Borrower's name,
         taxpayer identification number, business address, and other information
         that will allow Bank to identify Borrower. Bank may also ask, if
         Borrower is an individual to see Borrower's driver's license or other
         identifying documents, and if Borrower is not an individual to see
         Borrower's legal organizational documents or other identifying
         documents.

                                       9
<PAGE>

10.      WAIVER OF SPECIAL DAMAGES. THE BORROWER WAIVES, TO THE MAXIMUM EXTENT
         NOT PROHIBITED BY LAW, ANY RIGHT THE UNDERSIGNED MAY HAVE TO CLAIM OR
         RECOVER FROM THE BANK IN ANY LEGAL ACTION OR PROCEEDING ANY SPECIAL,
         EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES.

11.      JURY WAIVER. THE BORROWER AND THE BANK HEREBY VOLUNTARILY, KNOWINGLY,
         IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY
         PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED ON CONTRACT, TORT,
         OR OTHERWISE) BETWEEN THE BORROWER AND THE BANK ARISING OUT OF OR IN
         ANY WAY RELATED TO THIS DOCUMENT. THIS PROVISION IS A MATERIAL
         INDUCEMENT TO THE BANK TO PROVIDE THE FINANCING DESCRIBED HEREIN.

THIS AGREEMENT AND THE OTHER WRITTEN RELATED DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
<TABLE>
<S><C>                                                            <C>

  Address(es) for Notices:                                        Borrower:

  9350 Kirby Drive, Suite 300
  Houston, TX 77054                                               SHARPS COMPLIANCE CORP.

  Attn:                                                           By:
       --------------------------------------------------------        --------------------------------------------------------

                                                                       --------------------------------------------------------
                                                                       Printed Name                                      Title

                                                                  Date Signed:
                                                                               ------------------------------------------------

  Address for Notices:                                            Bank:

  707 Travis, 9th Floor                                           JPMorgan Chase Bank, N.A.
  Houston, TX 77002

  Attn:                                                           By:
       --------------------------------------------------------        --------------------------------------------------------

                                                                       --------------------------------------------------------
                                                                       Printed Name                                      Title

                                                                  Date Signed:
                                                                               ------------------------------------------------
</TABLE>

                                       10

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