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                                       1


                                 LOAN AGREEMENT

     This Loan Agreement (the  "Agreement")  dated as of August 18, 1998, by and
among Todd and Shelia Siegel ("Lender") the Borrower described below.

     In  consideration  of the  Loan or Loans  described  below  and the  mutual
covenants and  agreements  contained  herein,  and intending to be legally bound
hereby, Lender and Borrower agree as follows:

     1.  DEFINITIONS AND REFERENCE TERMS. In addition to any other terms defined
herein,  the  following  terms  shall have the  meaning  set forth with  respect
thereto:

          A. Borrower(s): Medical Technology Systems, Inc.

          B. Borrowers' Address: 12920 Automobile Boulevard Clearwater,  Florida
     33762

          C.  Hazardous  Materials.  Hazardous  Materials  include all materials
     defined as hazardous  materials  or  substances  under any local,  state or
     federal environmental laws, rules or regulations, and petroleum,  petroleum
     products, oil and asbestos.

          D. Loan.  Any loan  described  in Section 2 hereof and any  subsequent
     loan which states that it is subject to this Loan Agreement.

          E. Loan  Documents.  Loan Documents  means this Loan Agreement and any
     and all  promissory  notes  executed by the Borrower in favor of Lender and
     all other documents, instruments (including, without limitation, warrants),
     guarantees,  certificates  and agreements  executed and/or delivered by the
     Borrower in connection with the Loan.

          F. Accounting Terms. All accounting terms not specifically  defined or
     specified herein shall have the meanings generally attributed to such terms
     under generally accepted accounting  principles ("GAAP"), as in effect from
     time  to  time,   consistently  applied,  with  respect  to  the  financial
     statements referenced in Section 3.H. hereof.

     2. LOANS.

          A. Loan.  Lender hereby agrees to make a term loan to Borrowers in the
     principal  amount  of  $100,000.00.  The  obligation  to repay  the loan is
     evidenced by a promissory  note of even date herewith (the  promissory note
     together with any and all renewals,  extensions or  rearrangements  thereof
     being hereafter  collectively  referred to as the "Note") having a maturity
     date, repayment terms and interest rate as set forth in the Note.

          B. Use of Proceeds.  The Borrower  agree that the proceeds of the Loan
     shall be used solely for working capital  purposes and shall not be used to
     satisfy any obligations of the Borrower other than obligations  incurred in
     the normal course of business of the Borrower.

          C. Extension of Loan. The maturity of the Note shall be  automatically
     extended from February 18, 1999 until May 16, 1999  provided  that:  (a) no
     defaults exist under this  Agreement;  and (b) that the Loan is not subject
     to any setoff, defense or counterclaim by the Borrower.


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                                       2


     3.  REPRESENTATIONS  AND  WARRANTIES  OF  BORROWERS.  The  Borrower  hereby
represent and warrant to Lender as follows:

          A. Good  Standing.  The  Borrower is a  corporation,  duly  organized,
     validly  existing and in good  standing  under the laws of the state of its
     respective  incorporation  and  has  the  power  and  authority  to own its
     property  and to  carry  on its  business  in each  jurisdiction  in  which
     Borrower does business.

          B. Authority and Compliance. The Borrower has full power and authority
     to execute  and  deliver  the Loan  Documents  and to incur and perform the
     obligations provided for therein, all of which have been duly authorized by
     all proper and necessary  action of the appropriate  governing body of such
     Borrower.  No consent or  approval of any public  authority  or other third
     party is required as a condition to the validity of any Loan Document,  and
     the Borrower is in compliance with all laws and regulatory  requirements to
     which it is subject.

          C. Binding  Agreement.  This  Agreement  and the other Loan  Documents
     executed by the Borrower  constitute valid and legally binding  obligations
     of the Borrower, enforceable in accordance with their terms.

          D. Litigation.  There is no proceeding  involving the Borrower pending
     or,  to the  knowledge  of the  Borrower,  threatened  before  any court or
     governmental  authority,   agency  or  arbitration  authority,   except  as
     disclosed to Lender in writing and acknowledged by Lender prior to the date
     of this Agreement.

          E. No  Conflicting  Agreements.  There  is no  charter,  bylaw,  stock
     provision,  partnership  agreement  or  other  document  pertaining  to the
     organization,  power or  authority  of the Borrower and no provision of any
     existing agreement, mortgage, indenture or contract binding on the Borrower
     or affecting its respective properties, which would conflict with or in any
     way prevent the  execution,  delivery or carrying  out of the terms of this
     Agreement and the other Loan Documents.

          F. Ownership of Assets. The Borrower has good title to its assets, and
     its assets are free and clear of liens,  except those granted to Lender and
     as disclosed to Lender prior to the date of this Agreement.

          G. Taxes.  All taxes and  assessments  due and payable by the Borrower
     have  been  paid or are  being  contested  in  good  faith  by  appropriate
     proceedings and the Borrower has filed all tax returns which it is required
     to file.

          H.  Financial   Statements.   The  financial  statements  of  Borrower
     heretofore  delivered to Lender have been prepared in accordance  with GAAP
     applied on a consistent  basis  throughout  the period  involved and fairly
     present Borrowers' financial condition as of the date or dates thereof. All
     factual information  furnished by the Borrower to Lender in connection with
     this  Agreement  and the other Loan  Documents  is and will be accurate and
     complete on the date as of which such  information  is  delivered to Lender
     and is not and will not be  incomplete by the omission of any material fact
     necessary to make such information not misleading.

          I. Place of Business. The Borrower's chief executive office is located
     at 12920 Automobile Boulevard, Clearwater, Florida 33762.


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                                       3


          J.  Environmental.  The conduct of the Borrower's  business operations
     and the condition of the Borrower's  property does not and will not violate
     any  federal  laws,  rules  or  ordinances  for  environmental  protection,
     regulations of the Environmental Protection Agency, any applicable local or
     state  law,  rule,  regulation  or  rule  of  common  law or  any  judicial
     interpretation  thereof relating  primarily to the environment or Hazardous
     Materials.

          K. Continuation of Representations and Warranties. All representations
     and warranties  made under this Agreement shall be deemed to be made at and
     as of the date  hereof and at and as of the date of any  advance  under any
     Loan.

     4.  REPRESENTATIONS AND WARRANTIES OF LENDER.  Lender hereby represents and
warrants to Borrowers that Lender: (a) is an "accredited investor," as that term
is  defined  in  Exhibit  "A" to this  Agreement,  (b) has  such  knowledge  and
experience in financial  and business  matters  rendering the Lender  capable of
evaluating the merits and risks of an investment in securities of the Company (a
"sophisticated  investor"),  or  (c)  is  not  an  accredited  or  sophisticated
investor,  but has  appointed  a  "purchaser  representative,"  as that  term is
defined in Exhibit "A" in connection  with evaluating the merits and risks of an
investment in securities of the Company.

     5.  AFFIRMATIVE  COVENANTS.  Until  full  payment  and  performance  of all
obligations of the Borrower  under the Note,  the Borrower  will,  unless Lender
consents otherwise in writing (and without limiting any requirement of any other
Loan Document):

          A. Financial  Statements and Other  Information.  Maintain a system of
     accounting  satisfactory to Lender and in accordance with GAAP applied on a
     consistent basis throughout the period involved,  permit Lender's  officers
     or authorized representatives to visit and inspect such Borrower's books of
     account and other records at such  reasonable  times and as often as Lender
     may  desire,   and  pay  the  reasonable  fees  and  disbursements  of  any
     accountants or other agents of Lender  selected by Lender for the foregoing
     purposes. Unless written notice of another location is given to Lender, the
     Borrower's  books and  records  will be  located at such  Borrower's  chief
     executive office set forth above. All financial statements called for below
     shall be prepared in form and content acceptable to Lender.

          In addition, the Borrower will:

               i.  Furnish  to  Lender  audited  financial  statements  of  such
          Borrower  for each fiscal year of such  Borrower,  within  ninety (90)
          days after the close of each such fiscal year.

               ii. Furnish to Lender  Borrower-prepared  financial statements of
          such  Borrower for each quarter of each fiscal year of such  Borrower,
          within forty-five (45) days after the close of each such period.

               iii.  Furnish  to  Lender  promptly  such  additional   financial
          information  and reports with respect to the business  operations  and
          financial condition of the Borrower as Lender may reasonably request.

          B. Insurance.  Maintain insurance with responsible insurance companies
     on such of its  properties,  in such  amounts and against  such risks as is
     customarily   maintained  by  similar  businesses  operating  in  the  same
     vicinity,  specifically  to include  fire and extended  coverage  insurance
     covering all assets, business interruption insurance,  workers compensation
     insurance and  liability  insurance,  all to be with such  companies and in
     such amounts as are  satisfactory  to Lender and  providing for at least 30
     days  prior  notice  to Lender of any  cancellation  thereof.  Satisfactory
     evidence of such  insurance  will be  supplied  to Lender  prior to funding
     under the Loan(s) and 30 days prior to each policy renewal.


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                                       4


          C. Existence and Compliance. Maintain its existence, good standing and
     qualification  to do  business,  where  required  and comply with all laws,
     regulations and governmental  requirements  including,  without limitation,
     environmental  laws  applicable to it or to any of its  property,  business
     operations and transactions.

          D. Adverse Conditions or Events.  Promptly advise Lender in writing of
     (i) any condition,  event or act which comes to its attention that would or
     might materially  adversely affect such Borrower's  financial  condition or
     operations or Lender's rights under the Loan Documents, (ii) any litigation
     filed by or against such  Borrower,  (iii) any event that has occurred that
     would  constitute an event of default under any Loan Documents and (iv) any
     uninsured or partially  uninsured  loss through fire,  theft,  liability or
     property damage in excess of an aggregate of $50,000.00.

          E. Taxes and Other Obligations.  Pay all of its taxes, assessments and
     other  obligations,  including,  but not  limited to taxes,  costs or other
     expenses  arising  out of this  transaction,  as the  same  become  due and
     payable, except to the extent the same are being contested in good faith by
     appropriate proceedings in a diligent manner.

          F.  Maintenance.  Maintain  all  of  its  tangible  property  in  good
     condition  and  repair and make all  necessary  replacements  thereof,  and
     preserve  and  maintain  all  licenses,  trademarks,  privileges,  permits,
     franchises,  certificates  and the like  necessary for the operation of its
     business.

          G. Environmental.  Immediately advise Lender in writing of (i) any and
     all  enforcement,  cleanup,  remedial,  removal,  or other  governmental or
     regulatory  actions  instituted,  completed or  threatened  pursuant to any
     applicable  federal,  state,  or  local  laws,  ordinances  or  regulations
     relating to any Hazardous  Materials  affecting  such  Borrower's  business
     operations;  and (ii) all  claims  made or  threatened  by any third  party
     against such Borrower  relating to damages,  contribution,  cost  recovery,
     compensation,  loss or injury resulting from any Hazardous  Materials.  The
     Borrower shall  immediately  notify Lender of any remedial  action taken by
     Borrower with respect to such Borrower's business operations. Borrower will
     not use or permit any other party to use any Hazardous  Materials at any of
     such  Borrower's  places of business or at any other property owned by such
     Borrower except such materials as are incidental to such Borrower's  normal
     course of  business,  maintenance  and  repairs  and which are  handled  in
     compliance with all applicable  environmental  laws. The Borrower agrees to
     permit Lender,  its agents,  contractors and employees to enter and inspect
     any of such  Borrower's  places of business  or any other  property of such
     Borrower at any  reasonable  times upon three (3) days prior notice for the
     purposes of conducting an environmental  investigation and audit (including
     taking  physical  samples) to insure that such  Borrower is complying  with
     this covenant and Borrower shall  reimburse  Lender on demand for the costs
     of any such  environmental  investigation  and audit.  The  Borrower  shall
     provide Lender, its agents, contractors, employees and representatives with
     access  to and  copies  of any and all data and  documents  relating  to or
     dealing with any Hazardous Materials used, generated,  manufactured, stored
     or disposed of by such Borrower's  business operations within five (5) days
     of the request therefore.

     6.  NEGATIVE   COVENANTS.   Until  full  payment  and  performance  of  all
obligations of the Borrower  under the Note, the Borrower will not,  without the
prior written  consent of Lender (and without  limiting any  requirement  of any
other Loan Documents):


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                                       5


          A.  Transfer of Assets or Control.  Sell,  lease,  assign or otherwise
     dispose of or  transfer  any  assets,  except in the  normal  course of its
     business, or enter into any merger or consolidation, or transfer control or
     ownership of the Borrower.

          B. Character of Business.  Change the general character of business as
     conducted  at the  date  hereof,  or  engage  in any type of  business  not
     reasonably related to its business as presently conducted.

          C.  Dividends  and  Distributions.  Make any  distribution  or pay any
     dividends (other than dividends payable in common stock of the Borrower) on
     any shares of any class of its capital stock,  or apply any of its property
     or assets to the purchase,  redemption  or the  retirement of any shares of
     any class of its capital stock.

          E. Management Change. Make any change in the president of the Borrower
     or the chief executive officer of the Borrower, if applicable.

     7. DEFAULT.  Borrowers  shall be in default under this  Agreement and under
each of the other Loan  Documents  if they shall  default in the  payment of any
amounts  due and owing  under the Loan or should  any of them fail to timely and
properly observe, keep or perform any term, covenant,  agreement or condition in
any Loan  Document or in any other loan  agreement,  promissory  note,  security
agreement,  deed of trust,  deed to secure debt,  mortgage,  assignment or other
contract  securing or evidencing  payment of any indebtedness of the Borrower to
Lender.  Borrower  shall also be in  default  under  this  Agreement  if (a) any
Borrower  defaults  under the Second  Amended  and  Restated  Loan and  Security
Agreement  dated as of September 5, 1996, as amended,  by and among  SouthTrust,
certain of the Borrowers,  Medical Technology Systems, Inc. ("MTS"), and certain
other parties, (b) if the Borrower or MTS defaults under or refuses to issue any
shares  of stock  pursuant  to any  stock  warrant  that is  issued to Lender in
connection with the loan transaction contemplated by this Loan Agreement, or (c)
the  Lender's  attorney  does not  receive the  original  stock  certificate  or
certificates  that are subject to the Pledge Agreement within ten (10) days from
the date of this Agreement.

     8. REMEDIES UPON DEFAULT.  If an event of default shall occur, Lender shall
have all rights,  powers and remedies available under each of the Loan Documents
as well as all rights and remedies available at law or in equity.

     9. NOTICES. All notices, requests or demands which any party is required or
may desire to give to any other party under any provision of this Agreement must
be in writing delivered to the other party at the following address:

         Medical Technology Systems, Inc.
         12920 Automobile Boulevard
         Clearwater, Florida 33762
         Fax. No.  (727) 573-1100

         Lender:

         Todd and Shelia Siegel
         10043 Windtree Blvd.
         Seminole, FL  33772
         Fax No.  (727) 392-2837


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                                       6

or to such other  address as any party may  designate  by written  notice to the
other party. Each such notice,  request and demand shall be deemed given or made
as follows:

          A. If sent by mail,  upon the  earlier  of the date of receipt or five
     (5) days after deposit in the U.S. Mail, first class postage prepaid;

          B. If sent by any other means , upon delivery.

     10. COSTS,  EXPENSES AND ATTORNEYS'  FEES. The Borrower shall pay to Lender
immediately  upon  demand the full amount of all costs and  expenses,  including
reasonable attorneys' fees incurred by Lender in connection with (a) negotiation
and  preparation of this Agreement and each of the Loan  Documents,  and (b) all
other  costs and  attorneys'  fees  incurred by Lender for which  Borrowers  are
obligated  to  reimburse  Lender  in  accordance  with  the  terms  of the  Loan
Documents.

     11.  MISCELLANEOUS.  Borrowers  and Lender  further  covenant  and agree as
follows, without limiting any requirement of any other Loan Document:

          A.  Cumulative  Rights and No Waiver.  Each and every right granted to
     Lender  under any Loan  Document,  or allowed it by law or equity  shall be
     cumulative  of each other and may be  exercised  in addition to any and all
     other rights of Lender,  and no delay in exercising any right shall operate
     as a waiver thereof,  nor shall any single or partial exercise by Lender of
     any right preclude any other or future exercise  thereof or the exercise of
     any other right. The Borrower  expressly  waives any  presentment,  demand,
     protest or other notice of any kind, including but not limited to notice of
     intent to accelerate and notice of acceleration.  No notice to or demand on
     the  Borrower in any case  shall,  of itself,  entitle the  Borrower to any
     other or future notice or demand in similar or other circumstances.

          B.  Applicable Law. This Loan Agreement and the rights and obligations
     of the parties hereunder shall be governed by and interpreted in accordance
     with the laws of Florida and applicable United States federal law.

          C. Amendment.  No  modification,  consent,  amendment or waiver of any
     provision  of this Loan  Agreement,  nor  consent to any  departure  by the
     Borrower therefrom,  shall be effective unless the same shall be in writing
     and signed by an officer of Lender, and then shall be effective only in the
     specified instance and for the purpose for which given. This Loan Agreement
     is binding upon the Borrower,  their respective successors and assigns, and
     inures to the benefit of Lender,  its successors and assigns;  however,  no
     assignment  or other  transfer  of the  Borrower's  rights  or  obligations
     hereunder  shall be made or be effective  without  Lender's  prior  written
     consent,  nor shall it relieve the Borrower of any  obligations  hereunder.
     There is no third party beneficiary of this Loan Agreement.

          D.  Documents.  All documents,  certificates  and other items required
     under this Loan Agreement to be executed  and/or  delivered to Lender shall
     be in form and content satisfactory to Lender and its counsel.

          E. Partial  Invalidity.  The  unenforceability  or  invalidity  of any
     provision of this Loan  Agreement  shall not affect the  enforceability  or
     validity   of  any  other   provision   herein   and  the   invalidity   or
     unenforceability  of any  provision  of any Loan  Document to any person or
     circumstance  shall not  affect  the  enforceability  or  validity  of such
     provision as it may apply to other persons or circumstances.

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                                       7

          F. Indemnification. Notwithstanding anything to the contrary contained
     in Section 12(G), the Borrower shall indemnify,  defend and hold Lender and
     its  successors  and assigns  harmless from and against any and all claims,
     demands, suits, losses, damages,  assessments,  fines, penalties,  costs or
     other  expenses  (including  reasonable  attorneys'  fees and court  costs)
     arising from or in any way related to any of the transactions  contemplated
     hereby,  including  but not limited to actual or  threatened  damage to the
     environment,  agency costs of  investigation,  personal injury or death, or
     property  damage,  due  to  a  release  or  alleged  release  of  Hazardous
     Materials,  arising  from the  Borrower's  business  operations,  any other
     property  owned by the Borrower or in the surface or ground  water  arising
     from  any of the  Borrower's  business  operations,  or  gaseous  emissions
     arising from any such Borrower's business operations or any other condition
     existing or arising from the Borrower's business operations  resulting from
     the use or existence of Hazardous  Materials,  whether such claim proves to
     be  true  or  false.   The  Borrower  further  agrees  that  its  indemnity
     obligations  shall include,  but are not limited to,  liability for damages
     resulting from the personal injury or death of an employee of the Borrower,
     regardless of whether the Borrower has paid the employee under the workmen'
     s  compensation  laws of any  state  or  other  similar  federal  or  state
     legislation for the protection of employees.  The term "property damage" as
     used in this paragraph includes,  but is not limited to, damage to any real
     or personal property of the Borrower, the Lender, and of any third parties.
     The Borrower's obligations under this paragraph shall survive the repayment
     of the Loan.

          G.  Survivability.  All  covenants,  agreements,  representations  and
     warranties  made herein or in the other Loan  Documents  shall  survive the
     making of the Loan and shall  continue  in full force and effect so long as
     the  Loan is  outstanding  or the  obligation  of the  Lender  to make  any
     advances under the Line shall not have expired.

          H.  Counterparts.  This  Agreement  may be  executed  in  two or  more
     counterparts any by facsimile transmission of signed counterparts,  each of
     which  shall  be  deemed  an  original,  but all of  which  together  shall
     constitute one and the same instrument.

     12.  WAIVER OF JURY  TRIAL.  AFTER  CONSULTING  WITH  COUNSEL  AND  CAREFUL
CONSIDERATION,   THE  BORROWER  AND  THE  LENDER  KNOWINGLY,   VOLUNTARILY,  AND
INTENTIONALLY  WAIVES  THE  RIGHT  ANY OF THEM MAY HAVE TO A TRIAL BY JURY  WITH
RESPECT TO ANY LITIGATION ARISING OUT OF THIS AGREEMENT,  THE NOTE, OR ANY OTHER
LOAN DOCUMENTS, OR OUT OF ANY COURSE OF CONDUCT,  COURSE OF DEALING,  STATEMENTS
(ORAL OR  WRITTEN),  OR ACTIONS OF THE  BORROWER  OR  LENDER.  THIS  WAIVER IS A
MATERIAL INDUCEMENT TO LENDER'S AGREEMENT TO MAKE THE LOAN TO THE BORROWER.

     13. NO ORAL  AGREEMENT.  THIS  WRITTEN  LOAN  AGREEMENT  AND THE OTHER LOAN
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.

     14. JOINT VENTURE.  Neither this Loan Agreement nor any other Loan Document
creates or evidences a partnership or joint venture between the Borrower and the
Lender. The relationship  between Borrower and Lender is solely that of a debtor
and creditor.

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                                       8


     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
duly executed under seal by their duly authorized representatives as of the date
first above written.

                                LENDER:

                                _______________________________
                                Todd and Shelia Siegel


                                BORROWER:

                                MEDICAL TECHNOLOGY SYSTEMS, INC.


                                 By:___________________________
                                    ___________________, as its
                                    ___________________________


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                                       9


                                   EXHIBIT "A"

     With respect to  individuals,  an "accredited  investor" is defined by Rule
501(a) of Regulation D, promulgated under the Securities Act of 1933, as amended
("Reg D"), as (i) "any natural person whose  individual net worth,  or joint net
worth  with  that  person's  spouse,   at  the  time  of  his  purchase  exceeds
$1,000,000,"  (ii) "any natural person who had an individual income in excess of
$200,000 in each of the two most recent years or joint income with that person's
spouse  in  excess  of  $300,000  in each of those  years  and has a  reasonable
expectation  of reaching  the same income  level in the current  year," or (iii)
"any  director,  executive  officer,  or  general  partner  of the issuer of the
securities being offered or sold, or any director,  executive officer or general
partner of a general partner of that issuer."

     "Purchaser  representative" is defined by Reg D as a person that is "not an
affiliate,  director,  officer or other  employee of the issuer,  or  beneficial
owner of 10 percent or more of any class of the equity  securities or 10 percent
or more of the equity  interest in the  issuer,"  unless the  purchaser is (a) a
relative of the purchaser representative by blood, marriage, or adoption, and is
not more  remote  than a first  cousin;  (b) a trust  or  estate  in  which  the
purchaser representative and any persons related to him as described in sections
(a) or (c) of this paragraph  collectively  have more than 50% of the beneficial
interest   (excluding   contingent   interest)   or  of  which   the   purchaser
representative serves as trustee,  executor,  or in any similar capacity;  (c) a
corporation or other organization of which the purchaser  representative and any
persons  related to him as described  in sections  (a) or (b) of this  paragraph
collectively are the beneficial owners of more than 50% of the equity securities
(excluding  directors'  qualifying  shares) or equity  interests.  A  "purchaser
representative"  must  have such  knowledge  and  experience  in  financial  and
business  matters that he is capable of evaluating  (together with the purchaser
or other purchaser representatives of the purchaser) the merits and risks of the
prospective  investment.  A  "purchaser  representative"  must also meet certain
acknowledgement and disclosure requirements described in Reg D.