Document:

AGREEMENT

    

    THIS
      LETTER AGREEMENT (“AGREEMENT), made and entered into effective on March 24, 2008
      by and between Sharps Compliance Corp., a Delaware corporation, having its
      principle office at 9220 Kirby Drive, Suite 500, Houston, TX 77054 (hereinafter
      referred to as the “Company”), and Al Aladwani (hereinafter referred to as the
“Executive”) is a supplement to the binding offer letter entered into between
      The Company and Executive, a copy of which is attached as an
      Exhibit.

    

    WITNESSETH

    

    For
      and
      in consideration of the mutual promises and covenants herein contained, and
      other good and valuable consideration, the receipt and sufficiency of which
      are
      hereby acknowledged, the Company and Executive agree as follows:

    

    CONFIDENTIAL
      INFORMATION

    

    Executive
      acknowledges that in and as a result of his employment, he will be making use
      of, acquiring, and/or adding to confidential information of a special and unique
      nature and value relating to such matters as the Company's trade secrets,
      systems, procedures, manuals, confidential reports, and lists of clients,
      ("Confidential Information"). As a material inducement to the Company to enter
      into this Agreement and to pay to Executive the compensation and benefits stated
      herein, Executive covenants and agrees that he shall not, at any time during
      or
      for three (3) years following the term of his employment, directly or
      indirectly, divulge or disclose for any purpose whatsoever any Confidential
      Information that has been obtained by, or disclosed to, him as a result of
      his
      employment by the Company. In the event of a breach or threatened breach by
      Executive of any of the provisions of this paragraph, the Company, in addition
      to and not in limitation of, any other rights, remedies, or damages available
      to
      the Company at law or in equity, shall be entitled to a permanent injunction
      in
      order to prevent or restrain any such breach by Executive or Executive's
      partners, agents, representatives, servants, employers, employees, and/or any
      and all persons directly or indirectly acting for or with him. This section
      shall not apply to the extent information, (i) is generally available to the
      public or otherwise was part of public domain at the time of disclosure, (ii)
      became generally available to the public after disclosure through no act or
      omission of Executive, (iii) was disclosed to Executive by a third party who
      had
      no obligation to restrict disclosure, and (iv) Executive can show that such
      information was independently developed by Executive without use of any
      Confidential Information.

    

    RESTRICTIVE
      COVENANT

    

    Executive
      acknowledges that the services he is to render are of a special and unusual
      character with a unique value to the Company, the loss of which cannot
      adequately be compensated by damages in an action at law. In view of the unique
      value to the Company of the services of Executive for which the Company has
      contracted hereunder, because of the confidential information Company promises
      to disclose to Executive, as hereinabove set forth, and as a material inducement
      to the Company to enter into this Agreement and to pay to Executive the
      compensation stated herein as well as any additional benefits stated herein,
      Executive covenants and agrees as follows:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    For
      the
      period commencing with the date of the Agreement and ending twelve (12)
      months following
      the termination of this Agreement, for whatever reason, the Executive agrees
      that he will not directly or indirectly, for his own account or for the account
      of others, whether as principal or agent or through the agency of any
      corporation, partnership, association or other business entity, engage in any
      business activity which shall be in direct competition to any material business
      of the Company. For purposes hereof, a business will be deemed, until proven
      otherwise, to be in direct competition if it involves the sale of products
      used
      for the disposal, transportation or destruction of medical sharps or any other
      products or services marketed by the Company or its subsidiaries and affiliates.
      Executive agrees further that, for a period commencing with the date of this
      Agreement and ending twelve (12) months following termination of this Agreement,
      for whatever reason, Executive shall not, directly or indirectly, make known
      to
      any person, firm or corporation, the names and addresses of any clients,
      customers, employees or independent contractors of the Company or any other
      information pertaining to them nor call on, solicit, take away, contract with,
      employ or hire or attempt to call on, solicit, take away, contract with, employ
      or hire any of the clients, customers, employees or independent contractors
      of
      the Company, including, but not limited to, those upon whom the Executive called
      or with whom he became acquainted during the performance of the services
      pursuant to this Agreement, whether for personal purposes or for any other
      person, firm or corporation. Nothing contained in this Section shall prohibit
      the Executive from purchasing and holding as an investment not more than 5%
      of
      any class of the issued and outstanding and publicly traded capital stock of
      any
      such corporation which conducts a business in competition with the business
      of
      the Company. Should the foregoing covenant not to compete be held invalid or
      unenforceable because of the scope of the actions restricted thereby, or the
      period of time within which such agreement is operative in the judgment of
      a
      court of competent jurisdiction, the parties agree that and hereby authorize
      such court to define the maximum actions subject to and restricted by this
      Section and the period of time during which such agreement is enforceable.
      The
      provisions of this Section shall be applicable for the period indicated,
      regardless of termination of this Agreement for any reason prior to expiration
      of such period. 

    

    MISCELLANEOUS

    

    The
      laws
      of the State of Texas shall govern the validity, construction, and enforcement
      of this Agreement and the rights and obligations of the Parties hereunder.
      The
      prevailing party in any dispute hereunder, in addition to actual damages and
      any
      other legal or equitable remedies to which it may be entitled, shall be entitled
      to recover reasonable attorney fees and costs from the non-prevailing
      party.

    

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

    

    
      	 	
              EXECUTIVE:

              

              ____________________________________________

              Executive

              

              ____________________________________________

              Date

               

              
                 

                COMPANY:

                

                By: _________________________________________

                David
                  P. Tusa  

                Executive
                  Vice President, CFO & Business Development

                 

                Date:
                  ________________________________________Compensation
      Contract for Land-use Right Assignment (Expropriation)

    

    Party
      A:
      People’s Government of Shatian, Dongguan

    Legal
      representative: Chen Zhiming 

    

    Party
      B:
      Longyi Technology (Shenzhen) Co., Ltd. 

    Legal
      representative: Bo Shengfu 

    

    Whereas,
      Party A agrees to assign the land-use right to Party B for valuable
      consideration, therefore, the Contract is made by and between the Parties
      through sufficient negotiation in equal and reciprocal principles in accordance
      with the Contract Law of the People’s Republic of China and other pertinent laws
      and regulations, as well as local policies regarding land expropriation.

    

    Article
      1
      Target Land 

     

    
      	
              1.1

            	
              Brief
                Introduction 

            

    

     

    Party
      A
      agrees to assign Party B the land located at Suifengnian Village, Shatian,
      Dongguan, Guangdong and covering about 52,163 square meters (78.245 mu)
      (hereinafter referred to as the Land) for valuable consideration. Such details
      as scope and area for the Land shall be subject to the description on the
      State-owned Land Use Right Certificate which shall be applied based on the
      red-line map confirmed by the Parties. 

     

    
      	
              1.2

            	
              Use
                period 

            

    

     

    The
      use
      period shall be subject to the duration as mentioned in the Land Use Right
      Certificate which shall be issued by the Administration of State-owned Lands.
      Within the usage term as defined in the Land Use Right Certificate, Party B
      shall have the right to transfer, tenant, mortgage and inherit the land-use
      right and any buildings may have on the land. 

     

    
      	
              1.3

            	
              Land
                use 

            

      	 	 

    

    
      	
              1.3.1

            	
              The
                Land shall be used for industrial purpose. If Party B desires to
                use for
                any other purpose, it shall submit an application to Party A and
                local
                government, and go through the alteration procedures with the Planning
                Bureau and the Administration of State-owned Lands at its own cost.
                

            

      	 	 

    

    
      	
              1.3.2

            	
              Party
                B shall be responsible for the planning, design, construction and
                any
                expense may incur therefore concerning the Land. The activities as
                mentioned above must comply with the requirements of Shatian People’s
                Government for overall planning and the national regulations on
                architecture, environment protection, fire control and security.
                

            

      	 	 

    

    
      	
              1.4

            	
              Land
                expropriation compensations, land administration fee, comprehensive
                service fee and payment items 

            

      	 	 

    

    
      	
              1.4.1

            	
              It
                is agreed that the land expropriation compensations shall be RMB330
                per
                square meter (taxes not included), covering expropriation compensations,
                staffing costs, green seeding compensations, costs for three connections
                and one leveling and other charges for the State-owned Land Use Right
                Certificate (the certificate holder shall be Dongguan Shatian Foreign
                Economic Development Corporation). Total amount of the compensations
                shall
                be RMB17,213,790 (seventeen million two hundred and thirteen thousand
                seven hundred and ninety yuan only).

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              1.4.2

            	
              Party
                B shall make the initial payment (or the down payment) to Party A
                within
                30 days beginning at the date of the Contract, namely, RMB3,442,758
                (three
                million four hundred and forty-two thousand seven hundred and fifty-eight
                yuan only). 

            

      	 	 

    

    
      	
              1.4.3

            	
              Party
                B shall pay Party A RMB5,164,137 (five million one hundred and sixty-four
                thousand one hundred and thirty-seven yuan only) within two months
                beginning at the date of the Contract. 

            

      	 	 

    

    
      	
              1.4.4

            	
              The
                remaining, RMB8,606,895 (eight million six hundred and six thousand
                eight
                hundred and ninety-five yuan only), shall be paid off within 10 days
                after
                Party A obtains the State-owned Land Use Right Certificate for the
                Land
                hereunder Party A shall notices Party B immediately after the obtaining
                of
                the Certificate as indicated above. Party A shall hand over the
                State-owned Land Use Right Certificate to Party B with the payment
                concurrently. 

            

      	 	 

    

    
      	
              1.4.5

            	
              Both
                party agreed that, Party B shall pay Party A the land administration
                fee,
                starting to accrue at the date of the Contract, RMB5 per square meter
                per
                year which is RMB260,815 (two hundred and sixty thousand eight hundred
                and
                fifteen yuan only) every year. The land administration fee shall
                be
                increased by 10% every five years after the Contract is signed. The
                yearly
                land administration fee shall be paid by two payments within a year,,
                Party B is required to make first payment for the fee of the first
                six
                months to Party A prior to May 30 and prior to November 30 for the
                fee of
                the rest six months every year. 

            

      	 	 

    

    
      	
              1.4.6

            	
              Both
                party agreed that, beginning at January 1, 2008, Party B shall pay
                Party B
                the comprehensive service fee RMB500 thousand (taxes not included)
                per
                year, to be paid in June of the year. 

            

      	 	 

    

    
      	
              1.4.7

            	
              Party
                A shall issue the revenue receipt (taxes not included) to Party B
                after
                receiving the land expropriation compensations, the land administration
                fee and the comprehensive service fee from Party B. If Party B requests
                tax receipt from Party A, Party B shall be responsible for relevant
                taxes,
                which shall be paid to Party A prior to issue of the receipt.
                

            

      	 	 

    

    
      	
              1.4.8

            	
              Party
                B shall make payment to Party A by check or by T/T at Party A’s domicile.
                

            

      	 	 

    

    
      	
              1.5

            	
              Handling
                of Land-use Right Certificate 

            

    

     

    The
      State-owned Land Use Right Certificate as to the Land hereunder shall be applied
      for the beneficiary of Dongguan Shatian Foreign Economic Development
      Corporation, and the costs incurred therefore shall be paid by Party A. After
      the date of the Contract, Party B shall be liable for any and all expenses
      regarding the transfer of the State-owned Land Use Right Certificate for the
      Land hereunder to Party B. If Party B requests for alteration of the name of
      the
      constructor for the project concerning the Land, it shall make relevant payment
      for alteration. 

     

    
      	
              1.6

            	
              Land
                Delivery 

            

    

     

    Party
      A
      shall hand over the Land to Party B within one month after the date of the
      Contract. 

    

    Article
      2
      Party A’s Responsibilities 

     

    2.1
      Party
      A shall have the right to supervise the properly usage of the land by Party
      B
      pursuant to the Contract provided, however, that such supervision may not
      interrupt Party B’s normal operation during the usage term 

     

    2.2
      Party
      A shall protect Party B’s rights with respect the usage, benefit from and
      disposal of the Land hereunder, and ensure such rights not to be claimed or
      restricted by any third party. 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    2.3
      Party
      A shall after the date of the Contract assist with Party B in completing the
      procedures for commencement of and application for construction on the Land,
      and
      the costs incurred shall be paid by Party B. 

     

    2.4
      Party
      A shall help Party B properly deal with the security affairs concerning the
      enterprise and its staff, coordinate the relationships between Party B and
      local
      government, authorities and villagers, and support Party B’s normal and lawful
      operation and management. 

     

    2.5
      Party
      A shall handle the procedures for the State-owned Land Use Right Certificate
      as
      to the Land hereunder, except for deferment due to reasons not attributable
      to
      Party A. In case of such circumstances, Party B may not refuse to and/or delay
      fulfill of any of its obligations hereunder with such reasons. 

    

    Article
      3
      Party B’s Responsibilities 

     

    3.1
      Party
      B shall pay the land expropriation compensations, the land administration fee,
      down payment and the comprehensive service fee to Party A on schedule.

     

    3.2
      Party
      B shall ensure that it will develop 50% or more of the Land within one year
      after the Land is delivered; otherwise, Party A shall have the right to charge
      against Party B for the idle plots at RMB3 per square meter per month.

     

    3.3
      Party
      B shall within 30 days after the Land is delivered submit Party A the general
      layout plan for the project site in order to issue the site option opinions
      and
      the copy of the business license of the company with respect to the project.
      

     

    3.4
      Party
      B shall cooperate with Party A, actively providing all necessary materials
      for
      pre-examination, planning, project registration and handling of the State-owned
      Land Use Right Certificate concerning the Land hereunder. 

     

    3.5
      In
      order to accelerate the development of Linhai Industry Park, Party B shall
      submit the development plan concerning the Land hereunder to Party A within
      3
      months after Party A delivers the Land, and commence to develop the Land within
      6 months after the delivery; otherwise, Party A shall have the right to take
      back the Land hereunder. 

     

    3.6
      Party
      B is prohibited from setting up stores and other commercial buildings within
      the
      scope of the red line. 

     

    3.7
      If
      Party B need construct new workshops for business extension, Party A will assign
      the lands within Linhai Industry Park provided that Party B shall rent the
      buildings covering at least 60 thousand square meters (for workshops and
      dormitories) from Party A. In such case the Parties shall negotiate about
      tenancy conditions. Otherwise, Party A will not make assignment to Party B.
      

     

    Article
      4
      Default Liability 

     

    4.1
      If
      Party A fails to deliver the Land to Party B on schedule, Party A shall pay
      the
      late fee to Party B at the daily interest date of 3‰
      of the
      land expropriation compensations. In case the delinquency is more than 3 months,
      Article 4.3 hereof shall apply. 

     

    4.2
      If
      Party B cannot procure the State-owned Land Use Right Certificate due to reasons
      attributable to Party A after Party B has provided necessary materials and
      documents, Party A shall assume the default liability pursuant to Article 4.4
      hereof. 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    4.3
      If
      Party B fails to make payment due and payable on schedule, it shall pay Party
      A
      the late fee at the daily interest date of 3‰
      of the
      outstanding amount. In case the delinquency (including down payment, land
      expropriation compensations, land administration fee and comprehensive service
      fee hereunder) is more than 3 months, Party A shall have the right to take
      back
      the Land hereunder and all buildings on the ground without compensations; in
      addition, Party B shall pay Party A the liquidated damages and compensate for
      economic losses arising pursuant to Article 4.4 hereof. The payments from Party
      B shall be refunded after deducting the late fee, liquidated damages and actual
      economic losses to be paid by Party B pursuant to the Contract. 

     

    4.4
      Unless otherwise stipulated herein, either party’s breach of any other clauses
      hereof shall entitle the other party to charge liquidated damages at 20% of
      the
      land expropriation compensations as mentioned herein, or to deal with according
      to down payment rules. If the down payment or the liquidated damages are
      insufficient to make up the actual economic losses to the non-breaching party,
      the breaching party is required to make further compensation. 

    

    Article
      5
      Force Majeure 

     

    5.1
      For
      the purpose of the Contract, Force Majeure includes natural disasters and
      amendments to national policies, laws and regulations. 

     

    5.2
      Either party who delays in performing the Contract or cannot perform its
      obligations hereunder as a result of force majeure may be exempted from all
      or
      part of liabilities according to specific impacts thereupon, provided that
      the
      affected party must take all necessary measures to minimize losses arising.
      In
      addition, the affected party shall within 30 days thereafter inform the other
      party and provide relevant evidence documents and a report stating that the
      Contract cannot be performed partly or completely and that deferment is
      necessary. 

    

    Article
      6
      Dispute Settlement 

     

    Any
      and
      all disputes arising from conduction of the Contract shall be settled through
      negotiation in equal and reciprocal principles; where negotiation fails, it
      is
      agreed to subject to the judgment of the People’s Court where Party A is
      located. 

    

    Article
      7
      Miscellaneous

    

    7.1
      The
      Contract shall be part of the legal documents signed between Party B and the
      administration for state-owned land, and have equal force with such documents.
      

     

    7.2
      Any
      and all matters uncovered herein may be specified in a supplemental agreement
      which shall have equal force with the Contract. 

     

    7.3
      The
      Contract shall be in five copies with equal force, one of which is to be kept
      by
      either party hereto, Dongguan Shatian Foreign Economic Development Corporation,
      Dongguan Shatian Finance Sub-branch and Dongguan Shatian Asset Management
      Company. 

    

    Party
      A:
      People’s Government of Shatian, Dongguan 

    Representative:
      Chen Zhiming 

    

    Party
      B:
      Longyi Technology (Shenzhen) Co., Ltd. 

    Representative:
      

    

    Signed
      at: Shatian, Dongguan 

    Signed
      on
      September 20, 2007

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