Document:

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                                                                   Exhibit 10.29

                                    FORM OF

                          REGISTRATION RIGHTS AGREEMENT

        REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
________________, 2005, by and among Smart Online, Inc., a Delaware corporation
with its headquarters located at 2530 Meridian Parkway, Durham, North Carolina
27713 (the "Company"), and the undersigned (together with its affiliates and any
assignees or transferees of all of its respective rights hereunder, the
"Investors").

        WHEREAS:

        A.      In connection with the Subscription Agreement by and among the
parties hereto dated as of the date hereof (the "Subscription Agreement"), the
Company has agreed, upon the terms and subject to the conditions contained
therein, to issue and sell to the Investors shares of the Company's common stock
(the "Common Stock"), upon the terms and subject to the limitations and
conditions set forth in such Subscription Agreement; and

        B.      To induce the Investors to execute and deliver the Subscription
Agreement, the Company has agreed to provide certain registration rights under
the Securities Act of 1933, as amended, and the rules and regulations
thereunder, or any similar successor statute (collectively, the "1933 Act"), and
applicable state securities laws;

        NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and each
of the Investors hereby agree as follows:

        1.      DEFINITIONS.

                (a)     As used in this Agreement, the following terms shall
have the following meanings:

                        (i)     "Investors" means any person who acquires shares
        of Common Stock of the Company, or any security of the Company pursuant
        to which the holder has a right to receive shares of Common Stock of the
        Company upon exercise or conversion of such security, who agrees to
        become bound by the provisions of this Agreement or a counterpart of
        this Agreement, and permitted transfers and assignees of Investors in
        accordance with Section 9 hereof.

                        (ii)    "Listing Date" the date on which the Common
        Stock of the Company becomes listed on the OTCBB.

                        (iii)   "OTCBB" the Over-the-Counter Bulletin Board.

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                        (iv)    "register," "registered," and "registration"
        refer to a registration effected by preparing and filing a Registration
        Statement or Statements in compliance with the 1933 Act and pursuant to
        Rule 415 under the 1933 Act or any successor rule providing for offering
        securities on a continuous basis ("Rule 415"), and the declaration or
        ordering of effectiveness of such Registration Statement by the United
        States Securities and Exchange Commission (the "SEC").

                        (v)     "Registrable Securities" means (x) all shares of
        Common Stock sold by the Company pursuant to the Subscription Agreement
        or pursuant to a warrant issued to Investor at the time of purchase of
        such shares of common stock; and (z) all shares of capital stock issued
        or issuable as a dividend on or in exchange for or otherwise with
        respect to the foregoing.

                        (vi)    "Registration Statement" means a registration
        statement of the Company under the 1933 Act.

                (b)     Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings set forth in the Subscription
Agreement.

        2.      REGISTRATION.

                (a)     MANDATORY REGISTRATION. No later than April 30, 2005
(the "Target Filing Date"), the Company shall prepare and file with the SEC a
Registration Statement on Form S-1, SB-1 or SB-2 as determined by the Company in
its sole discretion (or, if such Forms are not then available, on such form of
Registration Statement as is then available) to effect a registration of the
Registrable Securities covering the resale of the Registrable Securities. The
Company may also include in such Registration Statement in its sole discretion,
shares for sale by the Company or the Company may file a separate Registration
Statement covering shares to be sold by the Company before, at the same time or
after the Company files a Registration Statement covering resale of Registrable
Securities by Investors.

                (b)     PAYMENTS BY THE COMPANY. The Company shall use its best
efforts to obtain effectiveness of the Registration Statement as soon as
reasonably practicable. If (i) the Registration Statement covering the
Registrable Securities required to be filed by the Company pursuant to Section
2(a) hereof is not filed by the Target Filing Date, then the Company will make
payments to the Investors in such amounts and at such times as shall be
determined pursuant to this Section 2(b) as liquidated damages by reason of any
such delay in their ability to sell the Registrable Securities (which remedy
shall be exclusive of any other remedies available at law or in equity). The
Company shall pay to each holder of Registrable Securities an amount (the
"Damage Amount") equal to the product obtained by multiplying (i) the purchase
price (the "Purchase Price") paid for the Registrable Securities by the
Investor, by (ii) the Applicable

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Percentage (as defined below) by (iii) the number of 30-day periods (prorated
for partial periods) after the Target Filing Date that the Registration
Statement covering the Registrable Securities of the Investor is actually filed;
provided, however, that there shall be excluded from such period any delays
which are attributable (i) to Investor, or any other Investor who holds
Registrable Securities, with respect to information relating to the Investors,
including, without limitation, the plan of distribution or beneficial ownership
of securities, or (ii) to the failure of any Investor (or legal counsel to the
Investor) to conduct their review of the Registration Statement pursuant to
Section 3(h) below in a reasonably prompt manner or (iii) any person or entity
named in the Prospectus as an underwriter. The term "Applicable Percentage"
means one half of one percent. (For example, if the Registration Statement is
filed thirty days after the Target Filing Date, the Company would pay as the
Damage Amount $500 for each $100,000 of the Purchase Price. In the sole
discretion of the Company, the Company may issue to Investor in lieu of the cash
payment described above, a number of shares of Common Stock of the Company equal
to the quotient derived by dividing (i) the Damage Amount, by (ii) Purchase
Price per share (as defined above).

                (c)     ELIGIBILITY FOR FORM S-3; CONVERSION TO FORM S-3. If the
Company meets the registration eligibility and transaction requirements for the
use of Form S-3 (or any successor form) for registration of the offer and sale
by the Investor and any other Investors of their Registrable Securities before
the earlier of the dates stated in clauses (ii) and (iii) in the definition of
the Registration Period (as defined in Section 3(a) below), the Company shall
file a Registration Statement on Form S-3 (or such successor form) with respect
to the Registrable Securities covered by the Registration Statement, filed
pursuant to Section 2(a) (and include in such Registration Statement on Form S-3
the information required by Rule 429 under the 1933 Act) or convert the
Registration Statement, filed pursuant to Section 2(a) to a Form S-3 pursuant to
Rule 429 under the 1933 Act and cause such Registration Statement (or such
amendment) to be declared effective as soon as practicable after filing. If the
Company becomes eligible to use Form S-3 during the Registration Period, the
Company agrees to use reasonable efforts to file all reports required to be
filed by the Company with the SEC in a timely manner so as to remain eligible or
become eligible, as the case may be, and thereafter to maintain its eligibility,
for the use of Form S-3. After such Registration Statement on Form S-3 become
effective, subject to Section 3 hereof, the Company shall maintain such
Registration Statement in effect until the earlier of clauses (ii) and (iii) in
the definition of Registration Period in Section 3(a) hereof.

        3.      OBLIGATIONS OF THE COMPANY.

        In connection with the registration of the Registrable Securities, the
Company shall have the following obligations:

                (a)     The Company shall prepare promptly, and use reasonable
efforts to file with the SEC not later than the Target Filing Date, a
Registration Statement with respect to the number of Registrable Securities
provided in Section 2(a), and thereafter use its best efforts to cause such
Registration Statement relating to Registrable Securities to become effective as
soon as possible after such filing, and use reasonable efforts to keep the
Registration Statement effective pursuant to Rule 415 at all times until such
date as is the earlier of (i) 270 days after the effective date of the
Registration Statement; (ii) the date on which all of the Registrable

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Securities have been sold by Investor and (iii) the date on which the
Registrable Securities of Investor (in the opinion of counsel to the Company)
may be immediately sold to the public without registration or restriction
(including without limitation as to volume by Investor) under the 1933 Act (the
"Registration Period"), which Registration Statement (including any amendments
or supplements thereto and prospectuses contained therein) shall not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein, or necessary to make the statements therein not misleading.
The right of other Investors to have the Registration Statement remain in effect
shall not confer any rights on Investor.

                (b)     The Company shall prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to the
Registration Statements and the prospectus used in connection with the
Registration Statement as may be necessary to keep the Registration Statement
effective at all times during the Registration Period, and, during such period,
comply with the provisions of the 1933 Act with respect to the disposition of
all Registrable Securities of the Company covered by the Registration Statement
until such time as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by the Investor as set forth
in the Registration Statement.

                (c)     If requested, the Company shall furnish to one legal
counsel for all Investors whose Registrable Securities are included in a
Registration Statement (i) promptly (but in no event more than two (2) business
days) after the same is prepared and publicly distributed, filed with the SEC,
or received by the Company, one copy of each Registration Statement and any
amendment thereto, each preliminary prospectus and prospectus and each amendment
or supplement thereto, and, in the case of the Registration Statement referred
to in Section 2(a), each letter written by or on behalf of the Company to the
SEC or the staff of the SEC, and each item of correspondence from the SEC or the
staff of the SEC, in each case relating to such Registration Statement (other
than any portion of any thereof which contains information for which the Company
has sought confidential treatment), and (ii) promptly (but in no event more than
two (2) business days) after the Registration Statement is declared effective by
the SEC, such number of copies of a prospectus, including a preliminary
prospectus, and all amendments and supplements thereto and such other documents
as Investor may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by Investor. The Company will immediately notify
one legal counsel representing all Investors where Registrable Securities are
included in a Registration Statement by facsimile of the effectiveness of each
Registration Statement or any post-effective amendment. The Company will
promptly respond to any and all comments received from the SEC (which comments
shall promptly be made available to one legal counsel representing all Investors
whose Registration Securities are included in a Registration Statement upon
request), with a view towards causing the Registration Statement or any
amendment thereto to be declared effective by the SEC as soon as reasonably
practicable, and (ii) promptly file an acceleration request as soon as
reasonably practicable (but in no event more than two (2) business days)
following the resolution or clearance of all SEC comments. If applicable,
following notification by the SEC that any such Registration Statement or any
amendment thereto will not be subject to review, the Company shall promptly file
with the SEC a final prospectus as soon as reasonably practicable (but in no
event more than two (2) business days) following receipt by the Company from the
SEC of an order declaring the Registration Statement effective.

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                (d)     The Company shall use reasonable efforts to (i) register
and qualify the Registrable Securities covered by the Registration Statement
under such other securities or "blue sky" laws of such jurisdictions in the
United States as the Investors who hold a majority of the Registrable Securities
being offered by the Registration Statement reasonably request or qualify for an
exemption for resale afforded companies listed in a Standard & Poor's corporate
handbook or similar publications, (ii) prepare and file in those jurisdictions
such amendments (including post-effective amendments) and supplements to such
registrations and qualifications as may be necessary to maintain the
effectiveness thereof during the Registration Period, (iii) take such other
actions as may be reasonably necessary to maintain such registrations and
qualifications in effect during the Registration Period, and (iv) take all other
actions reasonably necessary or advisable to qualify the Registrable Securities
for sale in such jurisdictions; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to (i) qualify to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this Section 3(d), (ii) subject itself to general taxation in any such
jurisdiction, (iii) file a general consent to service of process in any such
jurisdiction, (iv) provide any undertakings that cause the Company undue expense
or burden, (v) make any change in its charter or bylaws, or (vi) spend more than
$10,000 in filing fees and legal fees and expenses for such "blue sky"
compliance.

                (e)     If the Company has not selected an underwriter for the
offering, and in the event Investors who hold a majority of the Registrable
Securities being offered by the Registration Statement select underwriters for
the offering, the Company shall enter into and perform its obligations under an
underwriting agreement, in usual and customary form, including, without
limitation, customary indemnification and contribution obligations, with the
underwriters of such offering.

                (f)     As promptly as practicable after becoming aware of such
event, the Company shall notify each Investor of the happening of any event, of
which the Company has knowledge, as a result of which the prospectus included in
any Registration Statement, as then in effect, includes an untrue statement of a
material fact or omission to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, and use its best
efforts promptly to prepare a supplement or amendment to any Registration
Statement to correct such untrue statement or omission, and deliver such number
of copies of such supplement or amendment to each Investor as such Investor may
reasonably request; provided that, for not more than sixty (60) consecutive
trading days (or a total of not more than ninety (90) trading days in any twelve
(12) month period), the Company may delay the disclosure of material non-public
information concerning the Company (as well as prospectus or Registration
Statement updating) the disclosure of which at the time is not, in the good
faith opinion of the Company, in the best interests of the Company (an "Allowed
Delay"); provided, further, that the Company shall promptly (i) notify the
Investors in writing of the existence of material non-public information giving
rise to an Allowed Delay and (ii) advise the Investors in writing to cease all
sales under such Registration Statement until the end of the Allowed Delay. Upon
expiration of the Allowed Delay, the Company shall again be bound by the first
sentence of this Section 3(f) with respect to the information giving rise
thereto.

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                (g)     The Company shall use its reasonable best efforts to
prevent the issuance of any stop order or other suspension of effectiveness of
any Registration Statement, and, if such an order is issued, to obtain the
withdrawal of such order within a reasonable time and to notify each Investor
who holds Registrable Securities being sold (or, in the event of an underwritten
offering, the managing underwriters) of the issuance of such order and the
resolution thereof.

                (h)     The Company shall permit a single firm of legal counsel
designated by Investors who own a majority of the Registrable Securities offered
under the Registration Statement to review such Registration Statement and all
amendments and supplements thereto (as well as all requests for acceleration or
effectiveness thereof) a reasonable period of time prior to their filing with
the SEC. The role of such legal counsel to the Investors shall be to confirm
that the sections of such Registration Statement covering information with
respect to the Investors, the Investor's beneficial ownership of securities of
the Company and the Investors intended method of disposition of Registrable
Securities shall conform to the information provided to the Company by each of
the Investors, subject to review and approval by the Company and its legal
counsel. Such legal counsel for the Investors shall not have the right to
require changes to the description of the Company, its business or other matters
not related to selling stockholders.

                (i)     The Company shall make generally available to its
security holders as soon as practicable, but not later than ninety (90) days
after the close of the period covered thereby, an earnings statement (in form
complying with the provisions of Rule 158 under the 1933 Act) covering a
twelve-month period beginning not later than the first day of the Company's
fiscal quarter next following the effective date of the Registration Statement.

                (j)     Until the Registration Statement ceases to be effective,
the Company shall make available for inspection following reasonable prior
written notice by (i) any underwriter participating in any disposition pursuant
to a Registration Statement, (ii) one firm of attorneys or other agents retained
by the Investors who own a majority of the Registrable Securities, and (iii) one
firm of attorneys retained by all such underwriters (collectively, the
"Inspectors") all pertinent financial and other records, and pertinent corporate
documents and properties of the Company (collectively, the "Records"), as shall
be reasonably deemed necessary by each Inspector to enable each Inspector to
exercise its due diligence responsibility, and cause the Company's officers,
directors and employees to supply all information which any Inspector may
reasonably request for purposes of such due diligence; provided, however, that
each Inspector shall hold in confidence and shall not make any disclosure
(except to an Investor) of any Record or other information which the Company
determines in good faith to be confidential, and of which determination the
Inspectors are so notified, unless (a) the release of such Records is ordered
pursuant to a subpoena or other order from a court or government body of
competent jurisdiction, or (b) the information in such Records has been made
generally available to the public other than by disclosure in violation of this
or any other agreement. The Company shall not be required to allow such
inspection more than once per calendar year. Following such due diligence
review, Investor may require the Company to withdraw the Registrable Securities
of such Investor from the Registration Statement, if the Company does not make
changes to the Registration Statement requested by such Investor.

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                (k)     The Company shall not be required to disclose any
confidential information in such Records to any Inspector or to any Investor
pursuant to this Agreement until and unless such Inspector and Investor shall
have entered into confidentiality agreements (in form and substance satisfactory
to the Company) with the Company with respect thereto. Each Investor agrees that
it shall, upon learning that disclosure of such Records or other information is
sought in or by a court or governmental body of competent jurisdiction or
through other means, give prompt notice to the Company and allow the Company, at
its expense, to undertake appropriate action to prevent disclosure of, or to
obtain a protective order for, the Records deemed confidential. Nothing herein
(or in any other confidentiality agreement between the Company and any Investor)
shall be deemed to limit the Investor's ability to sell Registrable Securities
in a manner which is otherwise consistent with applicable laws and regulations.

                (l)     The Company shall (i) cause all the Registrable
Securities covered by the Registration Statement to be listed on each national
securities exchange, if any, on which securities of the same class or series
issued by the Company are then listed, if any, if the listing of such
Registrable Securities is then permitted under the rules of such exchange, or
(ii) to the extent the securities of the same class or series are not then
listed on a national securities exchange, to use reasonable efforts to arrange
for at least two market makers to register with the National Association of
Securities Dealers, Inc. ("NASD") as such with respect to such Registrable
Securities.

                (m)     The Company shall provide a transfer agent and
registrar, which may be a single entity, for the Registrable Securities not
later than the effective date of the Registration Statement.

                (n)     At the request of the holders of a majority of the
Registrable Securities offered pursuant to the Registration Statement, the
Company shall prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to a Registration Statement and any
prospectus used in connection with the Registration Statement as may be
necessary in order to change the plan of distribution set forth in such
Registration Statement.

                (o)     The Company shall take all other reasonable actions
necessary to expedite and facilitate disposition by the Investors of Registrable
Securities pursuant to a Registration Statement.

        4.      OBLIGATIONS OF THE INVESTORS.

        In connection with the registration of the Registrable Securities, the
Investors shall have the following obligations:

                (a)     It shall be a condition precedent to the obligations of
the Company to complete the registration pursuant to this Agreement with respect
to the Registrable Securities of a particular Investor that such Investor shall
furnish to the Company such information regarding itself, the Registrable
Securities held by it and the intended method of disposition of the Registrable
Securities held by it as shall be reasonably required to effect the registration
of such Registrable Securities and shall execute such documents in connection
with such registration as the Company may reasonably request. At least five (5)
business days prior to the first anticipated

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filing date of the Registration Statement, the Company shall notify each
Investor of the information the Company requires from each such Investor.

                (b)     Each Investor, by such Investor's acceptance of the
Registrable Securities, agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of the
Registration Statements hereunder, unless such Investor has notified the Company
in writing of such Investor's election to exclude all of such Investor's
Registrable Securities from the Registration Statements.

                (c)     In the event the Company or Investors holding a majority
of the Registrable Securities being registered determine to engage the services
of an underwriter, each Investor agrees to enter into and perform such
Investor's obligations under an underwriting agreement, in usual and customary
form, including, without limitation, customary indemnification and contribution
obligations, with the managing underwriter of such offering and take such other
actions as are reasonably required in order to expedite or facilitate the
disposition of the Registrable Securities, unless such Investor has notified the
Company in writing of such Investor's election to exclude all of such Investor's
Registrable Securities from such Registration Statement.

                (d)     Each Investor agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described in Section
3(f) or 3(g), such Investor will immediately discontinue disposition of
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities until such Investor's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(f) or 3(g) and, if
so directed by the Company, such Investor shall deliver to the Company (at the
expense of the Company) or destroy (and deliver to the Company a certificate of
destruction) all copies in such Investor's possession, of the prospectus
covering such Registrable Securities current at the time of receipt of such
notice.

                (e)     No Investor may participate in any underwritten
registration hereunder unless such Investor if requested by the Company (i)
agrees to sell such Investor's Registrable Securities on the basis provided in
any underwriting arrangements in usual and customary form entered into by the
Company, (ii) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents reasonably required
under the terms of such underwriting arrangements, and (iii) agrees to pay its
pro rata share of all underwriting discounts and commissions and any expenses in
excess of those payable by the Company pursuant to Section 5 below.
Notwithstanding the foregoing, there is no obligation on the part of the Company
or any underwriter to include Registrable Securities of Investor in the
securities to be purchased or sold by the underwriter.

        5.      EXPENSES OF REGISTRATION.

        All reasonable expenses, other than underwriting discounts and
commissions, incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including, without limitation, all
registration, listing and qualification fees, printers and accounting fees, the
fees and disbursements of counsel for the Company, and the reasonable fees and
disbursements

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of one counsel selected by the Investors holding a majority of the Registrable
Securities shall be borne by the Company, provided the Company shall not be
required to pay legal fees and disbursements of such legal counsel in excess of
$15,000.

        6.      INDEMNIFICATION.

        In the event any Registrable Securities are included in a Registration
Statement under this Agreement:

                (a)     To the extent permitted by law, the Company will
indemnify, hold harmless and defend (i) each Investor who holds such Registrable
Securities, (ii) the directors, officers, partners, employees, agents and each
person who controls any Investor within the meaning of the 1933 Act or the
Securities Exchange Act of 1934, as amended (the "1934 Act"), if any, (iii) any
underwriter (as defined in the 1933 Act) for the Investors, and (iv) the
directors, officers, partners, employees and each person who controls any such
underwriter within the meaning of the 1933 Act or the 1934 Act, if any (each, an
"Indemnified Person"), against any joint or several losses, claims, damages,
liabilities or expenses (collectively, together with actions, proceedings or
inquiries by any regulatory or self-regulatory organization, whether commenced
or threatened, in respect thereof, "Claims") to which any of them may become
subject insofar as such Claims arise out of or are based upon: (i) any untrue
statement of a material fact in a Registration Statement or the omission to
state therein a material fact required to be stated or necessary to make the
statements therein not misleading; (ii) any untrue statement of a material fact
contained in any preliminary prospectus if used prior to the effective date of
such Registration Statement, or contained in the final prospectus (as amended or
supplemented, if the Company files any amendment thereof or supplement thereto
with the SEC) or the omission to state therein any material fact necessary to
make the statements made therein, in light of the circumstances under which the
statements therein were made, not misleading; or (iii) any violation by the
Company of the 1933 Act, the 1934 Act, any other law, including, without
limitation, any state securities law, or any rule or regulation thereunder
relating to the offer or sale of the Registrable Securities (the matters in the
foregoing clauses (i) through (iii) being, collectively, "Violations"). Subject
to the restrictions set forth in Section 6(c) with respect to the number of
legal counsel, the Company shall reimburse the Indemnified Person, promptly as
such expenses are incurred and are due and payable, for any reasonable legal
fees or other reasonable expenses incurred by them in connection with
investigating or defending any such Claim. Notwithstanding anything to the
contrary contained herein, the indemnification agreement contained in this
Section 6(a): (i) shall not apply to a Claim arising out of or based upon a
Violation which occurs in reliance upon and in conformity with information
furnished in writing to the Company by any Indemnified Person or underwriter for
such Indemnified Person, or any of their legal counsel, expressly for use in
connection with the preparation of such Registration Statement or any such
amendment thereof or supplement thereto; (ii) shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior written
consent of the Company, which consent shall not be unreasonably withheld; and
(iii) with respect to any preliminary prospectus, shall not inure to the benefit
of any Indemnified Person if the untrue statement or omission of material fact
contained in the preliminary prospectus was corrected on a timely basis in the
prospectus, as then amended or supplemented. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of the
Indemnified Person and shall survive the transfer of the Registrable Securities
by the Investors pursuant to Section 9.

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                (b)     In connection with any Registration Statement in which
an Investor is participating, each such Investor agrees severally and not
jointly to indemnify, hold harmless and defend, to the same extent and in the
same manner set forth in Section 6(a), the Company, each of its directors, each
of its officers who signs the Registration Statement, each person, if any, who
controls the Company within the meaning of the 1933 Act or the 1934 Act, any
underwriter and any other shareholder selling securities pursuant to the
Registration Statement or any of its directors or officers or any person who
controls such shareholder or underwriter within the meaning of the 1933 Act or
the 1934 Act (collectively and together with an Indemnified Person, an
"Indemnified Party"), against any Claim to which any of them may become subject,
under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim arises out
of or is based upon any Violation by such Investor, in each case to the extent
(and only to the extent) that such Violation occurs in reliance upon and in
conformity with written information furnished to the Company by such Investor,
or its legal counsel, expressly for use in connection with such Registration
Statement; and subject to Section 6(c) such Investor will reimburse any legal or
other expenses (promptly as such expenses are incurred and are due and payable)
reasonably incurred by them in connection with investigating or defending any
such Claim; provided, however, that the indemnity agreement contained in this
Section 6(b) shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of such Investor, which
consent shall not be unreasonably withheld; provided, further, however, that the
Investor shall be liable under this Agreement (including this Section 6(b) and
Section 7) for only that amount as does not exceed the net proceeds to such
Investor as a result of the sale of Registrable Securities pursuant to such
Registration Statement. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such Indemnified Party
and shall survive the transfer of the Registrable Securities by the Investors
pursuant to Section 9. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(b) with
respect to any preliminary prospectus shall not inure to the benefit of any
Indemnified Party if the untrue statement or omission of material fact contained
in the preliminary prospectus was corrected on a timely basis in the prospectus,
as then amended or supplemented.

                (c)     Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 6 of notice of the commencement of any
action (including any governmental action), such Indemnified Person or
Indemnified Party shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Section 6, deliver to the indemnifying party a
written notice of the commencement thereof, and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified Party, as the
case may be; provided, however, that an Indemnified Person or Indemnified Party
shall have the right to retain its own counsel with the fees and expenses to be
paid by the indemnifying party, if, in the reasonable opinion of counsel
retained by the indemnifying party, the representation by such counsel of the
Indemnified Person or Indemnified Party and the indemnifying party would be
inappropriate due to actual or potential differing interests between such
Indemnified Person or Indemnified Party and any other party represented by such
counsel in such proceeding. The indemnifying party shall pay for only one
separate legal counsel for the

                                       10
<PAGE>

Indemnified Persons or the Indemnified Parties, as applicable, and such legal
counsel shall be selected by Investors holding a majority of the Registrable
Securities included in the Registration Statement to which the Claim relates
(with the approval of a majority-in-interest of the Investors), if the Investors
are entitled to indemnification hereunder, or the Company, if the Company is
entitled to indemnification hereunder, as applicable. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of any
liability to the Indemnified Person or Indemnified Party under this Section 6,
except to the extent that the indemnifying party is actually prejudiced in its
ability to defend such action. The indemnification required by this Section 6
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as such expense, loss, damage or liability is
incurred and is due and payable.

        7.      CONTRIBUTION.

        To the extent any indemnification by an indemnifying party is prohibited
or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided, however, that
(i) no contribution shall be made under circumstances where the maker would not
have been liable for indemnification under the fault standards set forth in
Section 6, (ii) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any seller of Registrable Securities who was not
guilty of such fraudulent misrepresentation, and (iii) contribution (together
with any indemnification or other obligations under this Agreement) by any
seller of Registrable Securities shall be limited in amount to the net amount of
proceeds received by such seller from the sale of such Registrable Securities.

        8.      REPORTS UNDER THE 1934 ACT.

        With a view to making available to the Investors the benefits of Rule
144 promulgated under the 1933 Act or any other similar rule or regulation of
the SEC that may at any time permit the investors to sell securities of the
Company to the public without registration ("Rule 144"), the Company agrees to
use its best efforts to:

                (a)     make and keep public information available, as those
terms are understood and defined in Rule 144;

                (b)     file with the SEC in a timely manner all reports and
other documents required of the Company under the 1933 Act and the 1934 Act so
long as the Company remains subject to such requirements and the filing of such
reports and other documents is required for the applicable provisions of Rule
144; and

                (c)     furnish to each Investor so long as such Investor owns
Registrable Securities, promptly upon request, (i) a written statement by the
Company that it has complied with the reporting requirements of Rule 144, the
1933 Act and the 1934 Act and (ii) such other

                                       11
<PAGE>

information as may be reasonably requested to permit the Investors to sell such
securities pursuant to Rule 144 without registration.

        9.      ASSIGNMENT OF REGISTRATION RIGHTS.

        The rights under this Agreement shall be automatically assignable by the
Investors to any transferee of all or any portion of Registrable Securities if:
(i) the Investor agrees in writing with the transferee or assignee to assign
such rights, and a copy of such agreement is furnished to the Company within a
reasonable time after such assignment, (ii) the Company is, within a reasonable
time after such transfer or assignment, furnished with written notice of (a) the
name and address of such transferee or assignee, and (b) the securities with
respect to which such registration rights are being transferred or assigned,
(iii) following such transfer or assignment, the further disposition of such
securities by the transferee or assignee is restricted under the 1933 Act and
applicable state securities laws, (iv) at or before the time the Company
receives the written notice contemplated by clause (ii) of this sentence, the
transferee or assignee agrees in writing with the Company to be bound by all of
the provisions contained herein, (v) such transfer shall have been made in
accordance with the applicable requirements of the Subscription Agreement, and
(vi) such transferee shall not be a "U.S. Person" as that term defined in
Regulation S promulgated under the 1933 Act.

        10.     AMENDMENT OF REGISTRATION RIGHTS.

        Provisions of this Agreement may be amended and the observance thereof
may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with written consent of the Company and
Investors who hold a majority of the Registrable Securities, except that any
person or entity who acquires Registrable Securities may become a part to this
Agreement by the Company and such person or entity signing a counterpart of this
Agreement. Any amendment or waiver effected in accordance with this Section 10
shall be binding upon each Investor and the Company. In the event the Company
becomes a subsidiary of any company whose Common Stock is publicly traded
("Holding Company"), and the Investor receives shares of Common Stock of such
Holding Company, all obligations of the Company under this Agreement shall
terminate upon such Holding Company assuming this Agreement, which may be done
without the consent or approval of Investor.

        11.     MISCELLANEOUS.

                (a)     A person or entity is deemed to be a holder of
Registrable Securities whenever such person or entity owns of record such
Registrable Securities. If the Company receives conflicting instructions,
notices or elections from two or more persons or entities with respect to the
same Registrable Securities, the Company shall act upon the basis of
instructions, notice or election received from the registered owner of such
Registrable Securities.

                (b)     Any notices required or permitted to be given under the
terms hereof shall be sent by certified or registered mail (return receipt
requested) or delivered personally or by courier (including a recognized
overnight delivery service) or by facsimile and shall be effective

                                       12
<PAGE>

five days after being placed in the mail, if mailed by regular United States
mail, or upon receipt, if delivered personally or by courier (including a
recognized overnight delivery service) or by facsimile, in each case addressed
to a party. The addresses for such communications shall be:

                If to the Company:

                        Michael Nouri
                        Smart Online, Inc.
                        Post Office Box 12794
                        Research Triangle Park, NC 27709-2794
                        Telephone:  (919) 765-5000
                        E-mail: dnouri@us.smartonline.com

                With copies to:

                        Daniels Daniels & Verdonik, P.A.
                        Post Office Drawer 12218
                        Research Triangle Park, NC 27709-2218
                        Telephone:  (919) 544-5444
                        Facsimile:  (919) 544-5920
                        Email:  jverdonik@d2vlaw.com

                If to an Investor:

                        to the address set forth immediately below such
                        Investor's name on the signature pages to the
                        Subscription Agreement, or on the address set forth
                        immediately below such Investor's name on the
                        agreement entered into pursuant to Section 9 of this
                        Agreement.

                (c)     Failure of any party to exercise any right or remedy
under this Agreement or otherwise, or delay by a party in exercising such right
or remedy, shall not operate as a waiver thereof.

                (d)     THIS AGREEMENT SHALL BE ENFORCED, GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA APPLICABLE
TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS.

                (e)     In the event that any provision of this Agreement is
invalid or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of
law. Any provision hereof which may prove invalid or unenforceable under any law
shall not affect the validity or enforceability of any other provision hereof.

                (f)     This Agreement constitutes the entire agreement among
the parties hereto with respect to the subject matter hereof and thereof. There
are no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein and therein. This

                                       13
<PAGE>

Agreement supersede all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof and thereof.

                (g)     Subject to the requirements of Section 9 hereof, this
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and assigns.

                (h)     The headings in this Agreement are for convenience of
reference only and shall not form part of, or affect the interpretation of, this
Agreement.

                (i)     This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party.
This Agreement, once executed by a party, may be delivered to the other party
hereto by facsimile transmission of a copy of this Agreement bearing the
signature of the party so delivering this Agreement.

                (j)     Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.

                (k)     Except as otherwise provided herein, all consents and
other determinations to be made by the Investors pursuant to this Agreement
shall be made by Investors holding a majority of the Registrable Securities,
determined as if the all options, warrants and convertible securities then
outstanding have been issued and/or converted into Registrable Securities.

                (l)     The Company and each Investor acknowledges that a breach
by it of its obligations hereunder will cause irreparable harm by vitiating the
intent and purpose of the transactions contemplated hereby. Accordingly, the
parties acknowledge that the remedy at law for breach of its obligations under
this Agreement will be inadequate and agrees, in the event of a breach or
threatened breach of any of the provisions under this Agreement, that the other
parties shall be entitled, in addition to all other available remedies in law or
in equity, and in addition to the penalties assessable herein, to an injunction
or injunctions restraining, preventing or curing any breach of this Agreement
and to enforce specifically the terms and provisions hereof, without the
necessity of showing economic loss and without any bond or other security being
required.

                (m)     The language used in this Agreement will be deemed to be
the language chosen by the parties to express their mutual intent, and no rules
of strict construction will be applied against any party.

                (n)     No Investor may bring any legal or other action or
proceeding for breach of this Agreement or arising out of any matter related to
this Agreement, unless the Investors who own a majority of the Registrable
Securities consent to the bringing of such action. Any claim may be settled by
the Company and the Investors who own a majority of the Registrable Securities.

                     [The Remainder of this Page is Blank.]

                                       14
<PAGE>

        IN WITNESS WHEREOF, the Company and the undersigned Investors have
caused this Agreement to be duly executed as of the date on the first page of
this Agreement.

SMART ONLINE, INC.

By: _____________________________
Name: ___________________________
Title: __________________________

INVESTOR:
_________________________________

By: _____________________________
Name: ___________________________
Title: __________________________
Address: ________________________
_________________________________
Telephone: ______________________
Facsimile: ______________________
Email: __________________________
Initial Number of Registrable Securities: __________________

                                       15EX-4.6

Exhibit 4.6 

SUBSCRIPTION
AGREEMENT

         THIS
SUBSCRIPTION AGREEMENT (this “Agreement”), dated as of June 17, 2005, by and
among MILESTONE SCIENTIFIC INC., a Delaware corporation (the “Company”), and the
subscriber identified on the signature page hereto (the “Subscriber”). 

         WHEREAS,
the Company and the Subscriber are executing and delivering this Agreement in reliance
upon an exemption from securities registration afforded by the provisions of Section 4(2)
and Rule 506 of Regulation D (“Regulation D”) as promulgated by the United
States Securities and Exchange Commission (the “Commission”) under the
Securities Act of 1933, as amended (the “1933 Act”); and 

         WHEREAS,
the parties desire that, upon the terms and subject to the conditions contained herein,
the Company shall issue and sell to the Subscriber, as provided herein, and the Subscriber
shall purchase, 20,000 Units, each Unit consisting of (i) ten (10) shares of the
Company’s common stock, $.001 par value (the “Common Stock”), and
(ii)  two warrants each to purchase one share of Common Stock (the
“Warrants”), in the form attached hereto as Exhibit A (the
“Warrants”). The shares underlying the Warrants are referred to as the Warrant
Shares. The per Unit Purchase Price shall be $24.94, which is equal to the average closing
price of the Common Stock on the American Stock Exchange during the ten trading days
ending on June 16, 2005, multiplied by 10. The aggregate Purchase Price shall be payable
to the Company on the Closing Date, as defined in Section 10 hereof. The shares of Common
Stock issuable to the Subscriber are referred to herein as the “Shares,” and the
Shares, the Warrants and the Warrant Shares are collectively referred to herein as the
“Securities”. 

         NOW,
THEREFORE, in consideration of the mutual covenants and other agreements contained in
this Agreement the Company and the Subscriber hereby agree as follows: 

         
         1.
Purchase and Sale of Shares and Warrants. Subject to the satisfaction (or waiver)
of the conditions to Closing set forth in this Agreement, the Subscriber shall purchase
the Shares and Warrants for the Purchase Price indicated on the signature page hereto,
and the Company shall sell the Shares and Warrants called for by the above price to the
Subscriber. The Purchase Price for the Shares and Warrants shall be paid in cash. The
Company shall (i) instruct its transfer agent to issue stock certificates for the number
of Shares included in the Units to be purchased hereunder and to deliver such Shares to
the Subscriber within 15 business days of the Closing Date, such Shares to be registered
in the name of the Subscriber and (ii) deliver Warrants for the number of Warrants
purchased hereunder to the Subscriber within said 15 business days. The Company will not
issue fractional Units but will refund amounts in excess of the price of the nearest full
number of Units which can be purchased with the purchase price tendered hereunder.  

         
         2.
Warrants. Promptly after the Closing Date the Company will issue two Warrants to
the Subscriber for each ten (10) shares issued to such Subscriber on the Closing Date.
The per Warrant exercise price shall be $4.89 per share. The Warrants shall be
exercisable  

 

 

until February 16, 2009.  

         
         3.
Subscriber’s Representations and Warranties. The Subscriber hereby
represents and warrants to and agrees with the Company that:  

         
         
         (a)
Information on Company. The Subscriber has been furnished with or has had access
at the EDGAR Website of the Commission to the Company’s Form 10-KSB for the year
ended December 31, 2004 and the Company’s Form 10-KSB for the year ended December
31, 2003 as filed with the Commission, together with all subsequently filed Forms 10-QSB,
8-K, and filings made with the Commission available at the EDGAR website (hereinafter
referred to collectively as the “Reports”). The Subscriber has considered all
factors the Subscriber deems material in deciding on the advisability of investing in the
Securities.  

         
         
         (b)
Information on Subscriber. At the time the Subscriber was offered the Securities
it was, and as of the date hereof it is an “accredited investor”, as such term
is defined in Regulation D promulgated by the Commission under the 1933 Act, is
experienced in investments and business matters, has made investments of a speculative
nature and has purchased securities of United States publicly-owned companies in private
placements in the past and, with its representatives, has such knowledge and experience
in financial, tax and other business matters as to enable the Subscriber to utilize the
information made available by the Company to evaluate the merits and risks of and to make
an informed investment decision with respect to the proposed purchase, which represents a
speculative investment. The Subscriber has the authority to purchase and own the
Securities. The Subscriber is able to bear the economic risk of such investment and at
the present time, is able to afford a complete loss thereof. The information set forth on
the signature page hereto regarding the Subscriber is accurate.  

         
         
         (c)
Purchase of Common Stock and Warrants. The Subscriber is purchasing the Common
Stock and Warrants as principal for its own account and not with a view to any
distribution thereof (this representation and warranty not limiting such Subscriber’s
right to sell the Shares and Warrant Shares pursuant to the Registration Statement (as
defined below hereof) or otherwise in compliance with applicable federal and state
securities laws).  

         
         
         (d)
Compliance with 1933 Act. The Subscriber understands and agrees that the
Securities have not been registered under the 1933 Act or any applicable state securities
laws, by reason of their issuance in a transaction that does not require registration
under the 1933 Act (based in part on the accuracy of the representations and warranties
of Subscriber contained herein), and that such Securities must be held indefinitely
unless a subsequent disposition is registered under the 1933 Act or any applicable state
securities laws or is exempt from such registration.  

         
         
         (e)
Current Holdings. The Subscriber is currently a holder of [          ] shares of the
Company’s Common Stock.  

         
         
         (f)
Correctness of Representations. The Subscriber represents that the foregoing
representations and warranties are true and correct as of the date hereof in all material  

 

 

respects and, unless the Subscriber
otherwise notifies the Company prior to the Closing Date (as hereinafter defined), shall
be true and correct in all material respects as of the Closing Date.  

         
         4.
Company Representations and Warranties. The Company represents and warrants to
and agrees with the Subscriber that (i) the Company is duly organized, validly
existing and in good standing on the date hereof, (ii) has full power and authority to
issue the Securities, (iii) is eligible to register the resale of its Common Stock by the
Subscriber under Form S-3 promulgated under the 1933 Act, (iv) upon receipt and
acceptance of consideration from the Subscriber the Securities will be legally and
validly issued, (v) the Company’s Form 10-KSB for the year ended December 31, 2004,
fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange
Act of 1934, as amended and the information contained in the Form 10-KSB fairly presents,
in all material respects, the financial condition and results of operations of the
Company and does not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein
not misleading and (vi) the Company has taken all action required by its Articles of
Incorporation and Bylaws and the rules and regulations of the American Stock
Exchange to approve the offer and sale of the securities, except that it has not applied
for additional listing of such securities with the American Stock Exchange but
undertakes to do so promptly upon closing hereunder.  

         
         5.
Regulation D Offering. The offer and issuance of the Securities to the Subscriber
is being made pursuant to the exemption from the registration provisions of the 1933 Act
afforded by Section 4(2) of the 1933 Act and Rule 506 of Regulation D promulgated
thereunder.  

         
         6.
Registration and Listing.  

         
         
         (a)
The Company covenants and agrees with the Subscriber that on or before the 70th
day after the Closing Date, prior to the Filing Date the Company shall prepare and file
with the Commission a Registration Statement covering the shares of common stock issuable
under this Agreement and issuable upon exercise of the Warrants (the “Registrable
Securities”) for an offering to be made on a continuous basis pursuant to Rule 415.
The Registration Statement shall be on Form S-3. The Company shall cause the Registration
Statement to become effective and remain effective as provided herein. The Company shall
use its best efforts to cause the Registration Statement to be declared effective under
the Securities Act as promptly as possible after the filing thereof. The Company shall
use its best efforts to keep the Registration Statement continuously effective under the
Securities Act until the date which is the earlier date of when (i) all Registrable
Securities have been sold or (ii) all Registrable Securities may be sold immediately
without registration under the Securities Act and without volume restrictions pursuant to
Rule 144(k), as determined by the counsel to the Company pursuant to a written opinion
letter to such effect, addressed and acceptable to the Company’s transfer agent and
the affected Holders .  

         
         
         (b)
Transfers. The Securities may only be disposed of in compliance with state and
federal securities laws. In connection with any transfer of Securities other than
pursuant to an effective registration statement, to the Company, to an Affiliate of a
Subscriber or  

 

 

in connection with a pledge as
contemplated in this Section 10, the Company may require the transferor thereof to
provide to the Company an opinion of counsel selected by the transferor, the form and
substance of which opinion shall be reasonably satisfactory to the Company, to the effect
that such transfer does not require registration of such transferred Securities under the
1933 Act. As a condition of transfer, any such transferee shall agree in writing to be
bound by the terms of this Agreement and shall have the rights of the Subscriber under
this Agreement and the Registration Rights Agreement.  

         
         
         (c)
Shares Legend. The Subscriber agrees to the imprinting, so long as is required by
this Section 7(b), of a legend on the Shares and the Warrant Shares, in substantially the
following form:  

	 	
“THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED. THESE SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH SECURITIES
ACT OR ANY APPLICABLE STATE SECURITIES LAW OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED, EXCEPT THAT THESE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OF THE HOLDER WITH
A REGISTERED BROKER-DEALER OR OTHER LOAN OF THE HOLDER WITH A FINANCIAL INSTITUTION THAT
IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES
ACT.” 

         
         
         (d)
Warrant Legend. The Subscriber agrees to the imprinting, so long as is required
by this Section 6, of a legend on the Warrants, in substantially the following form:  

	 	
“THIS
WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS WARRANT AND THE SHARES
OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS
WARRANT UNDER SAID ACT OR ANY APPLICABLE STATE SECURITIES LAW OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED, EXCEPT THAT
THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OF THE
HOLDER 

 

 

	 	
WITH
A REGISTERED BROKER-DEALER OR OTHER LOAN OF THE HOLDER WITH A FINANCIAL INSTITUTION THAT
IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT” 

         
         
         (e)
Certificates. Certificates evidencing the Shares and Warrant Shares shall
not contain any legend (including the legend set forth in Sections 7(b) and (c)), (i)
while a registration statement (including the Registration Statement) covering the resale
of such security is effective under the 1933 Act, or (ii) following any sale of such
Shares or Warrant Shares pursuant to Rule 144, or (iii) if such Shares or Warrant Shares
are eligible for sale under Rule 144(k), or (iv) if such legend is not required under
applicable requirements of the 1933 Act (including judicial interpretations and
pronouncements issued by the Staff of the Commission). The Company shall cause its
counsel to issue a legal opinion to the Company’s transfer agent promptly after the
effective date of the Registration Statement if required by the Company’s transfer
agent to effect the removal of the legend hereunder as and when any Subscriber so
requests. If all or any portion of a Warrant is exercised at a time when there is an
effective registration statement to cover the resale of the Warrant Shares, such Warrant
Shares shall be issued free of all legends  

         
         
         (f)
Acknowledgement. The Subscriber agrees that the removal of the restrictive
legend from certificates representing Securities as set forth in this Section 7 is
predicated upon the Company’s reliance that the Subscriber will sell any Securities
pursuant to either the registration requirements of the 1933 Act, including any
applicable prospectus delivery requirements, or an exemption therefrom.  

         
         
         (g)
       The Company  covenants  and agrees with the  Subscriber  that on or before the
40th day after the Closing Date it will file an application with the American Stock
Exchange to list the shares of the Company’s Common Stock underlying the Units,
including the shares of Common Stock underlying the Warrants and will use its best
efforts to prosecute such application to effectiveness.  

         
         7.
Conditions Precedent to Obligations of the Company. The obligations of the
Company are subject to the fulfillment prior to or on the Closing Date of the following
conditions any of which may be waived by the Company in writing:  

         
         (a)
all representations and warranties of the Subscriber contained in this Agreement shall be
true and correct in all respects as of the Closing Date with the same effect as though
such representations and warranties had been made on or as of such date; and  

         
         (b)
all agreements and covenants of the Subscriber to be performed or complied with on or
prior to the Closing Date have in all material respects been so performed or complied
with.  

         
         8.
Conditions Precedent to Obligations of the Subscriber. The obligations of the
Subscriber are subject to the fulfillment prior to or on the Closing Date of the
following conditions any of which may be waived by the Subscriber in writing:  

 

 

         
         
         (a)
all representations and warranties of the Company contained in this Agreement shall be
true and correct in all respects as of the Closing Date with the same effect as though
such representations and warranties had been made on or as of such date; and 

         
         
         (b)
all obligations, agreements and covenants of the Company to be performed or complied with
on or prior to the Closing Date shall have, in all respects been so performed or complied
with.  

         
         9.
Miscellaneous.  

         
         
         (a)
Notices. All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served, (ii) deposited in the mail, registered
or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air
courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or
facsimile, addressed as set forth below or to such other address as such party shall have
specified most recently by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery or
delivery by facsimile, with accurate confirmation generated by the transmitting facsimile
machine, at the address or number designated below (if delivered on a business day during
normal business hours where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day during normal business
hours where such notice is to be received) or (b) on the second business day following
the date of mailing by express courier service, fully prepaid, addressed to such address,
or upon actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be: (i) if to the Company, to: Milestone Scientific Inc., 230
South Orange Avenue, Livingston, NJ 07039Attention: Leonard Osser, Chairman, fax: (973)
535-2829, with a copy to: Morse, Zelnick, Rose & Lander, LLP, 405 Park Avenue, Suite
1401, New York, New York 10022, Attention: Stephen Zelnick, telecopier: (212) 838-9190,
(ii) if to the Subscriber to: the address and telecopier number indicated on the
signature pages hereto.  

         
         
         (b)
Closing. The consummation of the transactions contemplated herein (the “Closing
Date”) shall take place at the offices of Morse, Zelnick, Rose & Lander, LLP, upon
receipt of good funds at its escrow account ,  

	 	
The
Chase Manhattan Bank,
1211 Avenue of the Americas,
                               
New York, New York 10036,
                               
Account Name: Morse, Zelnick, Rose & Lander, LLP
                               
          Attorney Trust Account
                               
Account Number: 967086639
                               
ABA Number: 021000021 

and upon the satisfaction of all
conditions to Closing set forth in this Agreement. 

 

 

         
         
         (c)
Entire Agreement; Assignment. This Agreement and the other Transaction Documents
represent the entire agreement between the parties hereto with respect to the subject
matter hereof and may be amended only by a writing executed by the Company and the
Subscriber. Neither the Company nor the Subscriber has relied on any representations not
contained or referred to in this Agreement and the documents delivered herewith. No right
or obligation of the Company shall be assigned without prior notice to and the written
consent of the Subscriber. The Subscriber may assign any or all of its rights hereunder
to any person in connection with a transfer of any Security to such person, provided such
transferee agrees in writing to be bound, with respect to the transferred Securities, by
the provisions hereof that apply to the Subscriber.  

         
         
         (d)
Counterparts/Execution. This Agreement may be executed in any number of
counterparts and by the different signatories hereto on separate counterparts, each of
which, when so executed, shall be deemed an original, but all such counterparts shall
constitute but one and the same instrument. This Agreement may be executed by facsimile
signature and delivered by facsimile transmission.  

         
         
         (e)
Law Governing this Agreement. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without regard to principles of
conflicts of laws. Any action brought by either party against the other concerning the
transactions contemplated by this Agreement shall be brought only in the state courts of
New York or in the federal courts located in the state of New York. The parties and
the individuals executing this Agreement and other agreements referred to herein or
delivered in connection herewith on behalf of the Company agree to submit to the
jurisdiction of such courts and waive trial by jury. The prevailing party shall be
entitled to recover from the other party its reasonable attorney’s fees and costs.
In the event that any provision of this Agreement or any other agreement delivered in
connection herewith is invalid or unenforceable under any applicable statute or rule of
law, then such provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of law. Any
such provision which may prove invalid or unenforceable under any law shall not affect
the validity or enforceability of any other provision of any agreement.  

         
         
         (f)
Equitable Adjustment. The Securities and the purchase prices of Securities being
purchased hereunder shall be equitably adjusted to offset the effect of stock splits,
stock dividends, and distributions of property or equity interests of the Company to its
shareholders occurring between the date of this Agreement and the Closing Date.  

[THIS SPACE
INTENTIONALLY LEFT BLANK]

 

 

SIGNATURE PAGE TO
SUBSCRIPTION AGREEMENT

         Please
acknowledge your acceptance of the foregoing Subscription Agreement by signing and
returning a copy to the undersigned whereupon it shall become a binding agreement between
us. 

	Dated: June _____,
      2005 

      

      

      

      

      

      

      

      

      

      

      

      Dated: June _______ 2005 

      	

      The Company 

      MILESTONE SCIENTIFIC INC 

      a Delaware corporation 

      

      

      By:_________________________________ 

            Name: 

            Title: 

      

      

      Subscriber 

      

      [      ] 

      

      

      by:_________________________________ 

            Name: 

            Title: 

	SUBSCRIBER’S
      NAME AND

      ADDRESS 	PER
      UNIT

      PURCHASE

      PRICE 

      		NO.
      OF

      UNITS 

      		TOTAL
      

      AGGREGATE

      PURCHASE 

      PRICE 
	
      	$	 24.94	                          	 		                          	 	 

Telephone number: 

Facsimile number: 

 

 

EXHIBIT A

         [Form
of Warrant]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00089-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00089-of-00352.parquet"}]]