Document:

[Letterhead of Morse, Zelnick, Rose & Lander]

                                            March 23, 2001

Mr. Bruce G. Wilcox
Cumberland Associates LLC
1114 Avenue of the Americas
New York, NY 10036

                  Re: Milestone 20% Secured Promissory Notes

Dear Bruce:

      As per my conversation with Barry Konig, Milestone hereby offers to
exchange new 20% Secured Promissory Notes (the "New Notes") for the 20% Secured
Promissory Notes (the "Old Notes") now held by Cumberland Benchmarked Partners,
L.P. and LongView Partners A, L.P. The New Notes will be identical to the Old
Notes, except that Paragraph 2 will be revised to prevent prepayment of the New
Notes in common stock until July 31, 2002 unless the stock issued in prepayment
is valued at $5.00 or more under the New Notes. Paragraph 2 of the New Notes
will read as follows:

      "2. Principal Payments. The Principal Amount of this Note and any Interest
      Payment Note and any accrued interest thereon, shall be due and payable on
      the Maturity Date (as defined in Paragraph 3 below) in such coin or
      currency of the United States of America as at the time of payment shall
      be legal tender for the payment of public and private debts ("cash") or,
      at the option of the Maker, in shares of Common Stock, valued as set forth
      in Paragraph 7. The Maker shall have the option to prepay the Principal
      Amount and the Principal Amount of all related Interest Payment Notes, if
      any, together with accrued interest on all such notes to the payment date
      (a) in cash at any time before the Maturity Date, (b) in shares of Common
      Stock at any time after issuance but before July 31, 2002 if the Common
      Stock, valued as set forth in Paragraph 7, is at least $5.00 per share, or
      (c) in shares of Common Stock, valued as set forth in Paragraph 7, on or
      after July 31, 2002."

<PAGE>

            If the Noteholders consent to the exchange as set forth herein,
please indicate such consent by signing this letter where indicated below and
returning it to our office together with the Old Notes.

                                                     Very truly yours,

                                                     /s/ Stephen A. Zelnick
                                                     Stephen A. Zelnick

Consented and agreed to:

Cumberland Benchmarked Partners, L.P.
By:  Cumberland Associates LLC

By: Bruce G. Wilcox
   ------------------------------------
       Bruce G. Wilcox

LongView Partners A, L.P.
By: Cumberland Associates LLC

By: Bruce G. Wilcox
   ------------------------------------
       Bruce G. Wilcox

                                       8MILESTONE SCIENTIFIC INC.
                           20% SECURED PROMISSORY NOTE

$940,000.00                                                      August 28, 2000
                                                          Livingston, New Jersey

            FOR VALUE RECEIVED, MILESTONE SCIENTIFIC INC., a Delaware
corporation (the "Company" or "Maker") with its principal executive office at
220 South Orange Avenue, Livingston, New Jersey 07039, promises to pay to:

                  Cumberland Benchmarked Partners, L.P.,
                  c/o Cumberland Associates
                  1114 Avenue of the Americas
                  New York, NY 10036

(the "Payee" or the "Holder of this Note") or permitted successors and assigns
of the Payee, the principal amount of:

                  Nine Hundred Forty Thousand and 00/100 Dollars ($940,000.00)

(the "Principal Amount"), together with interest thereon, each as set forth in
Sections 1 and 2 of this Note, payable at Payee's address set forth in the
Purchase Agreement for this Note, or at such other place as the Payee shall have
notified the Company before any principal or interest payment date.

      1. Interest.

            A. Except as otherwise provided in Paragraph B of this Section 1,
interest on the Principal Amount hereof shall accrue at the rate of 20% per
annum from the date hereof until paid in full. Interest shall be payable
quarterly in arrears on the 1st day of each quarter commencing October 1, 2000
(each such date, an "Interest Payment Date"), in such coin or currency of the
United States of America as at the time of payment shall be legal tender for the
payment of public and private debts, or, at the option of the Maker, through
issuance to the Payee of a new secured promissory note ( an "Interest Payment
Note") in the face amount of such interest payment. Interest Payment Notes shall
be identical in form to this Note, except that interest thereon shall be due at
the Maturity Date, as defined below.

            B. If an Event of Default (as defined in Paragraph 6 below) shall
have occurred and shall continue while this Note is outstanding, interest on
this Note and any Interest Payment Note shall accrue at a rate equal to the
maximum rate permitted by law (such rate is hereinafter referred to as the
"Default Rate").

            C. Interest shall be calculated on the basis of actual number of
days elapsed over a year of 360 days.

      2. Principal Payments. The Principal Amount of this Note and any Interest
Payment Note and any accrued interest thereon, shall be due and payable on the
Maturity Date (as defined in Paragraph 3 below) in such coin or currency of the
United States of America as at the time of payment shall be legal tender for the
payment of public and private debts ("cash") or, at the option of the Maker, in
shares of Common Stock, valued as set forth in Paragraph 7. The Maker shall have
the option to prepay the Principal Amount and the Principal Amount of all
related Interest Payment Notes, if any, together with

<PAGE>

accrued interest on all such notes to the payment date (a) in cash at any time
before the Maturity Date, (b) in shares of Common Stock at any time after
issuance but before July 31, 2002 if the Common Stock, valued as set forth in
Paragraph 7, is at least $5.00 per share, or (c) in shares of Common Stock,
valued as set forth in Paragraph 7, on or after July 31, 2002.

      3. Maturity. This Note shall mature, and the Principal Amount and all
accrued but unpaid interest thereon shall be due in full, on October 1, 2002
(the "Maturity Date").

      4. Security. Subject and subordinate to the security interests granted to
the holders of the Maker's 10% Secured Notes (the "Series Note Holders") issued
pursuant to a Purchase Agreement dated as of January 31, 2000 the Company hereby
grants to the Payee a security interest in all the tangible and intangible
assets of the Company including the raw material, work in process and finished
goods inventories and certain proceeds thereof, as security for the prompt
payment of the principal and accrued interest on this Note and all Interest
Payment Notes. The security interest granted hereunder shall be shared,
pro-rata, based upon the amounts then owed, including accrued interest, to the
Payee, all other payees under notes in similar form in the aggregate amount,
together with this Note, of $1,000,000, the payees under the Interest Payment
Notes, the holder of the Maker's 9% Secured Note in the face amount of $200,000
and the holder of the Maker's 8% Secured Note and related line of credit in the
aggregate amount of $1,000,000. The Company will execute all documents and make
all filings and take any other actions necessary to perfect the security
interest granted herein.

      5. Priority. The payment of the Principal Amount, the principal amount
under any Interest Payment Note and any accrued but unpaid interest on either
amount, and the principal amounts under obligations sharing the security
interest with this Note on a pro rata basis, together with the accrued but
unpaid interest thereon, shall be subordinate in right of payment to the 10%
Secured Notes and senior in right of payment to all other indebtedness of the
Company whether incurred prior or subsequent to the date hereof other than (i)
any purchase money obligations incurred by the Company in connection with the
purchase of property in the ordinary course of business, (ii) all payment
obligations of the Company pursuant to any capitalized lease entered into by the
Company, and (iii) all payables incurred by the Company in the ordinary course
of its business.

      6. Events of Default and Remedies.

            A. Events of Default. Each of the following events is herein
referred to as an Event of Default:

                  (i) any default in the payment of any principal hereunder when
the same shall be due and payable, whether at the Maturity Date or by
acceleration or otherwise;

                  (ii) any default in the payment of any interest hereunder when
the same shall be due and payable not remedied within three (3) days of written
notice given pursuant to Paragraph 6 (B) herein, whether at the Interest Payment
Date or by acceleration or otherwise;

                  (iii) any material default in the due observance or
performance of any other covenant, condition or agreement to be observed or
performed pursuant to the terms hereof, and the continuance of such default
unremedied for a period of twenty (20) days after written notice thereof to the
Company setting forth in reasonable detail the circumstances of such Event of
Default;

                  (iv) if the Company shall: (A) apply for or consent to the
appointment of a receiver, trustee, custodian or liquidator of it or any of its
properties, (B) admit in writing its inability to pay its debts as they mature,
(C) make a general assignment for the benefit of creditors, (D) be

                                       2
<PAGE>

adjudicated a bankrupt or insolvent or be the subject of an order for relief
under Title 11 of the United States Code, or (E) file a voluntary petition in
bankruptcy, or a petition or an answer seeking reorganization or an arrangement
with creditors or to take advantage or any bankruptcy, reorganization,
insolvency, readjustment of debt, dissolution or liquidation law or statute, or
an answer admitting the material allegations of a petition filed against him or
it in any proceeding under any such law, or (vi) take or permit to be taken any
action in furtherance of or for the purpose of effecting any of the foregoing;

                  (v) if any order, judgment or decree shall be entered, without
the application, approval or consent of the Company, by any court of competent
jurisdiction, approving a petition seeking reorganization of the Company, or
appointing a receiver, trustee, custodian or liquidator of any of the Company,
or of all or any substantial part of its assets, and such order, judgment or
decree shall continue unstayed and in effect for any period of sixty (60)
consecutive days;

                  (vi) there shall be a default (taking into account lapse of
notice, written notice to the Company or both) under any bond, debenture, note
or other evidence of indebtedness for money borrowed or under any mortgage,
indenture or other instrument under which there may be issued or by which there
may be secured or evidenced any indebtedness for money borrowed by the Company,
whether existing on the date hereof or created subsequent to the date hereof,
which default relates to the obligation to pay the principal of or interest on
any such indebtedness and the effect of such default is to cause such
indebtedness to become due prior to its stated maturity; or

                  (vii) if final judgment(s) for the payment of money in excess
of $200,000 individually or $250,000 in the aggregate shall be rendered against
the Company, and the same shall remain undischarged or unbonded for a period of
thirty (30) consecutive days, during which execution shall not be effectively
stayed.

            B. Remedies. Upon the occurrence of any Event of Default, and at all
times thereafter during the continuance thereof: (i) this Note shall, at the
option of the holder of this Note, become immediately due and payable, both as
to principal, interest and premium, without presentment, demand, protest or
notice of any kind, all of which are hereby expressly waived, anything contained
herein to the contrary notwithstanding; (ii) all outstanding obligations under
this Note, and all other outstanding obligations on which the applicable
interest rate is determined by reference to the interest rate under this Note,
shall bear interest at the Default Rate; (iii) the holder of this Note may file
suit against the Company on the Note and/or seek specific performance or
injunctive relief hereunder (whether or not a remedy exists at law or is
adequate); (iv) the holder of this Note shall have the right, in accordance with
this Note to exercise any and all remedies as such holder may determine in such
holders' discretion (without any requirement of marshalling of assets, or other
such requirement).

      7. Issuance of Shares in Payment of Principal and Interest. At any time
after March 31, 2001, the Company may, at its option and upon twenty (20)
trading days prior written notice, pay the principal and accrued interest on the
Note and any Interest Payment Notes by issuing shares of Common Stock valued at
eighty-five (85) percent of the average closing price of the shares during the
first fifteen (15) of the eighteen (18) trading days immediately preceding the
date of payment. If the Company issues shares pursuant to this paragraph then it
will use its reasonable best efforts to file with the Securities and Exchange
Commission no later than sixty (60) days after issuance, a registration
statement under the Securities Act of 1933, as amended, and any applicable state
securities laws registering for reoffer and resale all such shares and shall
further use its best efforts to secure the effectiveness of such registration
statement at the earliest date thereafter and to maintain its effectiveness
until all of the shares covered thereby have been sold, provided, however, that
the Company shall not be obligated to file a registration statement, or keep a
registration statement effective, if all the shares issued pursuant to this
section and

                                       3
<PAGE>

held by the Payee can be sold under Rule 144 within a period of ninety (90) days
from the filing of the applicable form.

      8. Miscellaneous.

            A. Parties in Interest. All covenants, agreements and undertakings
in this Note binding upon the Company or the Payee shall bind and inure to the
benefit of the permitted successors and assigns of the Company and the Payee,
respectively, whether so expressed or not.

            B. Notice Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally, telegraphed or
sent by certified, registered, or express mail, postage prepaid, and shall be
deemed given when so delivered personally, telegraphed or, if mailed, five days
after the date of deposit in the United States mail as follows:

(i) if to the Maker:    Milestone Scientific Inc.
                        220 South Orange Avenue
                        Livingston, NJ  07039
                        Attn: Thomas M. Stuckey, Chief Financial Officer

(ii) if to the Payee:   at the address set forth
                        on Exhibit A to the Purchase
                        Agreement

            C. Construction. This Note shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the State of New York and any applicable laws of the United States of America,
without giving effect to the conflicts or choice of law principles thereof.

            D. Enforceability. Maker acknowledges that this Note and Maker's
obligations hereunder are and shall at all times continue to be absolute and
unconditional in all respects, and shall at all times be valid and enforceable
irrespective of any other agreements or circumstances of any nature whatsoever
which might otherwise constitute a defense to this Note and the obligations of
Maker evidenced hereby, unless otherwise expressly evidenced in a writing duly
executed by the holder of this Note.

            E. Payment. If the date for any payment due hereunder would
otherwise fall on a day which is not a Business Day, such payment or expiration
date shall be extended to the next following Business Day with interest payable
at the applicable rate specified herein during such extension. "Business Day"
shall mean any day other than a Saturday, Sunday, or any day which shall be in
the City of New York a legal holiday or a day on which banking institutions are
authorized by law to close.

            F. Waiver and Set-off. Maker hereby waives diligence, presentment,
demand, protest and notice of any kind whatsoever. The nonexercise by Payee of
any of its rights hereunder in any particular instance shall not constitute a
waiver thereof in that or any subsequent instance. The Payees, in addition to
any other right available to it under applicable law, shall have the right, at
its option, to immediately set off against this Note any monies owed by the
Payee in any capacity to Maker, whether or not due, upon the occurrence of any
Event of Default, even though such charge is made or entered on the books of
Payees subsequent to those events.

            G. Lost Documents. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this Note or
any Note exchanged for it, and (i) in the case of loss, theft or destruction, of
indemnity satisfactory to it and (ii) in the case of mutilation, of surrender
for

                                       4
<PAGE>

cancellation of such Note, and, in any case, upon reimbursement to the Company
of all reasonable expenses incidental thereto, the Company will make and deliver
in lieu of such Note a new Note of like tenor and principal amount and dated as
of the original date of this Note.

      IN WITNESS WHEREOF, this Note has been executed and delivered on the date
specified above by the duly authorized representative of the Company.

                                    MILESTONE SCIENTIFIC INC.

                                    By:__________________________________
                                       Leonard Osser, Chairman and Chief
                                             Executive Officer

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