Document:

<TABLE>
<CAPTION>
DRAFT - SUBJECT TO MODIFICATION                           CONFIDENTIAL AND PROPRIETARY - SUBJECT TO USE RESTRICTIONS
--------------------------------------------------------------------------------------------------------------------
FITZGERALDS GAMING CORPORATION-CONSOLIDATED                                                        BASE CASE V2000.1
OPERATING INCOME STATEMENT (UNAUDITED)
PROJECTIONS FOR THE YEARS ENDING DECEMBER 31, 2000 THROUGH DECEMBER 31, 2004
--------------------------------------------------------------------------------------------------------------------
                                         PROJECTED       PROJECTED        PROJECTED       PROJECTED      PROJECTED
                                           2000            2001             2002            2003           2004
                                       -----------------------------------------------------------------------------
<S>                                    <C>             <C>              <C>             <C>             <C>
REVENUE
  Casino                               $185,694,941    $192,381,059     $192,097,212    $195,277,133    $199,312,909
  Food and Beverage                      26,921,085      27,790,552       28,134,785      28,876,902      29,655,342
  Hotel                                  22,677,951      23,150,842       23,489,326      24,042,870      24,600,029
  Other Operating Departments             2,604,406       2,722,813        2,780,225       2,858,122       2,932,770
  Other                                   2,297,636       3,012,459        3,869,564       4,647,583       5,455,354
                                       -----------------------------------------------------------------------------
  TOTAL REVENUE                         240,196,019     249,057,725      250,371,112     255,702,610     261,956,404
                                       -----------------------------------------------------------------------------

COST OF SALES
  Food and Beverage                      12,106,568      12,495,123       12,646,137      12,981,168      13,332,238
  Hotel                                           -               -                -               -               -
  Other                                     785,235         812,447          832,543         852,639         875,121
                                       -----------------------------------------------------------------------------
  TOTAL COST OF SALES                    12,891,803      13,307,570       13,478,680      13,833,807      14,207,359
                                       -----------------------------------------------------------------------------

PAYROLL AND RELATED EXPENSES
  Casino                                 32,432,523      33,299,077       33,738,570      34,538,585      35,347,561
  Food and Beverage                      15,909,858      16,363,539       16,694,005      17,135,614      17,592,418
  Hotel                                  13,445,184      13,753,714       14,066,171      14,401,243      14,768,766
  Other Operating Departments             1,403,765       1,456,696        1,469,520       1,507,376       1,548,665
  Other Departments                      23,919,039      24,625,668       25,481,760      26,108,981      26,771,268
                                       -----------------------------------------------------------------------------
  TOTAL PAYROLL AND RELATED EXPENSES     87,110,369      89,498,694       91,450,026      93,691,799      96,028,678
                                       -----------------------------------------------------------------------------

COMPLIMENTARY EXPENSES
  Casino                                 19,893,628      20,453,563       20,477,084      20,721,188      21,092,559
  Food and Beverage                          81,440          83,244           83,876          84,953          86,547
  Hotel                                      74,717          76,647           77,024          77,418          78,666
  Other Operating Departments                 2,582           2,662            2,656           2,656           2,692
  Other Departments                       1,657,264       1,702,887        1,711,765       1,726,375       1,756,106
                                       -----------------------------------------------------------------------------
  TOTAL COMPLIMENTARY EXPENSES           21,709,631      22,319,003       22,352,405      22,612,590      23,016,570
                                       -----------------------------------------------------------------------------

OTHER OPERATING EXPENSES/(REVENUE)
  Casino                                 44,283,152      45,949,232       45,802,199      46,536,104      47,496,927
  Food and Beverage                       1,720,047       1,773,506        1,794,420       1,837,223       1,885,155
  Hotel                                   3,866,540       3,904,950        3,973,709       4,066,415       4,162,731
  Other Operating Expenses                1,105,319       1,195,206        1,215,852       1,248,012       1,279,067
  Other Expenses                         50,968,091      52,185,961       52,358,674      53,142,182      53,990,113
                                       -----------------------------------------------------------------------------
  TOTAL OTHER OPERATING EXPENSES        101,943,149     105,008,855      105,144,854     106,829,936     108,813,993
                                       -----------------------------------------------------------------------------
EARNINGS BEFORE TAX                    $ 16,541,067    $ 18,923,603     $ 17,945,147    $ 18,734,478    $ 19,889,804
                                       =============================================================================

EBITDA ADJUSTMENTS:
  Bond Debt Interest                              -               -                -               -               -
  Non-Bond Debt Interest                    363,972         312,301          286,217         264,296         243,704
  Interest Income-Corp Allocation           (35,238)        (15,514)          (7,541)         (2,166)              -
  Interest Income                          (763,347)     (1,461,999)      (2,301,679)     (3,046,900)     (3,817,726)
  Taxes                                           -               -                -               -               -
  Depreciation                           13,742,313      13,911,488       13,911,488      13,911,488      13,911,488
  Amortization                              423,800         423,800          423,800         423,800         423,800
  Other                                     (46,980)        (48,155)         (49,359)        (50,593)        (51,858)
  Group Allocation                                -               -                -               -               -
                                       -----------------------------------------------------------------------------
       Total Adjustments                 13,684,520      13,121,921       12,262,926      11,499,925      10,709,408
                                       -----------------------------------------------------------------------------
EBITDA (MANAGEMENT FORMAT)             $ 30,225,587    $ 32,045,524     $ 30,208,073    $ 30,234,403    $ 30,599,212
                                       =============================================================================
</TABLE>
PRESENTATION DOES NOT REFLECT SEC REQUIRED ADJUSTMENTS

<PAGE>
<TABLE>
<CAPTION>
DRAFT - SUBJECT TO MODIFICATION                                CONFIDENTIAL AND PROPRIETARY - SUBJECT TO USE RESTRICTIONS
-------------------------------------------------------------------------------------------------------------------------
FITZGERALDS GAMING CORPORATION-CONSOLIDATED                                                             BASE CASE V2000.1
SUMMARY OF CHANGES IN CASH (UNAUDITED)
PROJECTIONS FOR THE YEARS ENDING DECEMBER 31, 2000 THROUGH DECEMBER 31, 2004
-------------------------------------------------------------------------------------------------------------------------
                                              PROJECTED       PROJECTED        PROJECTED       PROJECTED      PROJECTED
                                                2000            2001             2002            2003           2004
                                            -----------------------------------------------------------------------------
<S>                                         <C>             <C>              <C>             <C>             <C>
EBITDA (BEFORE REORGANIZATION ITEMS)        $ 30,225,587    $ 32,045,524     $ 30,208,073    $ 30,234,403    $ 30,599,212

OTHER SOURCES/(USES) OF CASH:
  Existing Financing Agreements/
    Capital Leases (Slots)                      (521,855)        (23,672)               -               -               -
  Existing Financing Agreements/
    Capital Leases (Non-Slots)                (1,655,816)       (645,823)        (498,504)       (486,712)       (428,148)
  Interest Payments-Foothill Capital
    Facility                                           -               -                -               -               -
  Borrowings/(Repayments) Foothill
    Capital Facility (Net)                             -               -                -               -               -
  Reorganization Items (Excluding
    Interest Income)                          (2,558,500)     (3,000,000)               -               -               -
  Capital Expenditures (Slots)-
    Maintenance                               (4,000,000)     (4,000,000)      (4,400,000)     (4,400,000)     (4,400,000)
  Capital Expenditures (Non-Slots)-
    Maintenance                               (3,000,000)     (4,000,000)      (4,200,000)     (4,200,000)     (4,200,000)
  Capital Expenditures (Slots)-
    Property Enhancements                     (2,810,012)              -                -               -               -
  Capital Expenditures (Non-Slots)-
    Property Enhancements                     (6,510,400)              -                -               -               -
  Changes in Working Capital                           -               -                -               -               -
  Adjustments for Non-Recurring Accruals               -               -                -               -               -
  Interest Receipts                              794,017       1,484,499        2,324,179       3,069,400       3,840,226
  Proceeds from Asset Sales                            -               -                -               -               -
                                            ------------    ------------     ------------    ------------    ------------

NET INCREASE/(DECREASE) IN CASH BEFORE
  TAXES AND POR PAYMENTS                    $  9,963,021    $ 21,860,528     $ 23,433,748    $ 24,217,091    $ 30,599,212

CASH (UNRESTRICTED) AT BEGINNING OF YEAR      22,115,594      32,078,615       53,939,143      70,682,414      87,850,308
                                            ------------    ------------     ------------    ------------    ------------
CASH (UNRESTRICTED) AT END OF YEAR
  (BEFORE TAXES AND POR PAYMENTS)           $ 32,078,615    $ 53,939,143     $ 77,372,891    $ 94,899,505    $118,449,520
                                            ============    ============     ============    ============    ============
LESS:
  Income Tax Payments (to be revised)                  -               -       (6,690,477)     (7,049,197)     (7,504,444)
  Cash Required for Casino Operations
    (on premises)                             (7,800,000)     (8,200,000)      (8,200,000)     (8,200,000)     (8,200,000)
  Cash Required for General Operations
    (in bank)                                 (5,000,000)     (5,000,000)      (5,000,000)     (5,000,000)     (5,000,000)
                                            ------------    ------------     ------------    ------------    ------------
CASH AVAILABLE TO SERVICE RESTRUCTURED
  SENIOR SECURED NOTES AND OTHER POR
  PAYMENTS                                  $ 19,278,615    $ 40,739,143     $ 57,482,414    $ 74,650,308    $ 97,745,076
                                            ============    ============     ============    ============    ============
  Interest-Restructured Sr Secured
    Notes $__mm @ ___%                                 -               -                -               -               -
  Principal Repayment-Restructured
    Senior Secured Notes                               -               -                -               -               -
  Miscellaneous POR Payments
    (to be revised)                                    -               -                -               -               -
                                            ------------    ------------     ------------    ------------    ------------

CASH AVAILABLE IN EXCESS OF MINIMUM
  OPERATING REQUIREMENTS                    $ 19,278,615    $ 40,739,143     $ 57,482,414    $ 74,650,308    $ 97,745,076
                                            ============    ============     ============    ============    ============

Cash Required for Casino Operations
  (on premises)                                7,800,000       8,200,000        8,200,000       8,200,000       8,200,000
Cash Required for General Operations
  (in bank)                                    5,000,000       5,000,000        5,000,000       5,000,000       5,000,000
                                            ------------    ------------     ------------    ------------    ------------
CASH (UNRESTRICTED) AT END OF YEAR          $ 32,078,615    $ 53,939,143     $ 70,682,414    $ 87,850,308    $110,945,076

Availability under Foothill Capital
  Facility for General W/C                             -               -                -               -               -
                                            ------------    ------------     ------------    ------------    ------------
TOTAL CASH (UNRESTRICTED) AVAIL FOR
  OPERATIONS AT END OF YEAR                 $ 32,078,615    $ 53,939,143     $ 70,682,414    $ 87,850,308    $110,945,076
                                            ============    ============     ============    ============    ============
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
DRAFT - SUBJECT TO MODIFICATION                                           CONFIDENTIAL AND PROPRIETARY - SUBJECT TO USE RESTRICTIONS
------------------------------------------------------------------------------------------------------------------------------------
FITZGERALDS GAMING CORPORATION                                                                                     BASE CASE V2000.1
CONSOLIDATING
OPERATING INCOME STATEMENT (UNAUDITED)
PROJECTIONS FOR THE YEARS ENDING DECEMBER 31, 2000
------------------------------------------------------------------------------------------------------------------------------------
                                                                                 STAND                                      2000
                                                                                 ALONE                                  FITZGERALDS
                      FITZGERALDS   FITZGERALDS   FITZGERALDS     101 MAIN    FITZGERALDS   FITZGERALDS                    GAMING
                         RENO,       LAS VEGAS,   MISSISSIPPI,     STREET        GAMING     MANAGEMENT                  CORPORATION
                         INC            INC.          INC.          LLC       CORPORATION    COMPANY     ELIMINATION'S  CONSOLIDATED
                      --------------------------------------------------------------------------------------------------------------
<S>                   <C>           <C>           <C>           <C>           <C>           <C>           <C>          <C>
REVENUE
  Casino              $33,482,061   $40,295,324   $75,103,481   $36,814,075   $    -        $    -        $    -       $185,694,941
  Food and Beverage     6,312,806     9,283,991     8,873,788     2,450,500        -             -             -         26,921,085
  Hotel                 5,495,812     8,831,526     8,350,613        -             -             -             -         22,677,951
  Other Operating
   Departments            547,520     1,345,393       707,143         4,350        -             -             -          2,604,406
  Other                   295,700       755,500       361,165       265,638       663,955     4,022,500    (4,066,822)    2,297,636
                      --------------------------------------------------------------------------------------------------------------
  TOTAL REVENUE        46,133,899    60,511,734    93,396,190    39,534,563       663,955     4,022,500    (4,066,822)  240,196,019
                      --------------------------------------------------------------------------------------------------------------
COST OF SALES
  Food and Beverage     2,814,722     4,051,842     4,106,031     1,133,973        -             -             -         12,106,568
  Hotel                    -             -             -             -             -             -             -             -
  Other                     1,387       430,276       353,572        -             -             -             -            785,235
                      --------------------------------------------------------------------------------------------------------------
  TOTAL COST OF SALES   2,816,109     4,482,118     4,459,603     1,133,973        -             -             -         12,891,803
                      --------------------------------------------------------------------------------------------------------------
PAYROLL AND RELATED
 EXPENSES
  Casino                6,873,790     8,991,103    11,505,129     5,062,501        -             -             -         32,432,523
  Food and Beverage     3,413,321     6,571,304     4,362,212     1,563,021        -             -             -         15,909,858
  Hotel                 1,923,534     6,093,752     5,427,898        -             -             -             -         13,445,184
  Other Operating
   Departments            108,142       560,625       158,490       576,508        -             -             -          1,403,765
  Other Departments     5,103,373     5,227,644     7,249,125     2,891,080        -          3,447,817        -         23,919,039
                      --------------------------------------------------------------------------------------------------------------
  TOTAL PAYROLL AND
   RELATED EXPENSES    17,422,160    27,444,428    28,702,854    10,093,110        -          3,447,817        -         87,110,369
                      --------------------------------------------------------------------------------------------------------------
COMPLIMENTARY EXPENSES
  Casino                4,151,935     4,986,402     9,191,615     1,563,676        -             -             -         19,893,628
  Food and Beverage        17,906        26,253        37,281        -             -             -             -             81,440
  Hotel                     2,199        14,894        57,624        -             -             -             -             74,717
  Other Operating
   Departments             -             -              2,582        -             -             -             -              2,582
  Other Departments       180,628       412,325     1,037,631        26,680        -             -             -          1,657,264
                      --------------------------------------------------------------------------------------------------------------
  TOTAL COMPLIMENTARY
   EXPENSES             4,352,668     5,439,874    10,326,733     1,590,356        -             -             -         21,709,631
                      --------------------------------------------------------------------------------------------------------------
OTHER OPERATING
 EXPENSES/(REVENUE)
  Casino                6,721,940     7,194,935    20,331,203    10,035,074        -             -             -         44,283,152
  Food and Beverage       228,656       673,464       627,216       190,711        -             -             -          1,720,047
  Hotel                   678,033     1,494,594     1,693,913        -             -             -             -          3,866,540
  Other Operating
   Expenses               719,392       228,533        93,986        63,408        -             -             -          1,105,319
  Other Expenses       11,028,690    13,349,554    19,062,185    10,138,232        -          1,456,252    (4,066,822)   50,968,091
                      --------------------------------------------------------------------------------------------------------------
  TOTAL OTHER
   OPERATING EXPENSES  19,376,711    22,941,080    41,808,503    20,427,425        -          1,456,252    (4,066,822)  101,943,149
                      --------------------------------------------------------------------------------------------------------------
EARNINGS BEFORE TAX   $ 2,166,251   $   204,234   $ 8,098,497   $ 6,289,699   $   663,955   $  (881,569)  $    -       $ 16,541,067
                      ==============================================================================================================
EBITDA ADJUSTMENTS:
  Bond Debt Interest       -             -             -             -             -             -             -             -
  Non-Bond Debt Interest  301,443        35,238        20,561         6,730        -             -             -            363,972
  Interest Income-
   Corp Allocation                                                                (35,238)       -             -            (35,238)
  Interest Income         (22,500)      (75,300)      (22,500)      (22,500)     (628,717)        8,170        -           (763,347)
  Taxes                    -             -             -             -             -             -             -             -
  Depreciation          2,423,255     3,376,000     6,484,458     1,458,600        -             -             -         13,742,313
  Amortization             26,400        -             -            356,700        -             40,700        -            423,800
  Other                    (6,000)      (40,980)       -             -             -             -             -            (46,980)
  Group Allocation         -             -             -             -             -             -             -             -
                      --------------------------------------------------------------------------------------------------------------
    Total Adjustments   2,722,598     3,294,958     6,482,519     1,799,530      (663,955)       48,870        -         13,684,520
                      --------------------------------------------------------------------------------------------------------------
EBITDA (MANAGEMENT
 FORMAT)              $ 4,888,849   $ 3,499,192   $14,581,016   $ 8,089,229   $    -        $  (832,699)  $    -      $  30,225,587
                      ==============================================================================================================
</TABLE>
PRESENTATION DOES NOT REFLECT SEC REQUIRED ADJUSTMENTS

<PAGE>
<TABLE>
<CAPTION>
DRAFT - SUBJECT TO MODIFICATION                                           CONFIDENTIAL AND PROPRIETARY - SUBJECT TO USE RESTRICTIONS
------------------------------------------------------------------------------------------------------------------------------------
FITZGERALDS GAMING CORPORATION                                                                                     BASE CASE V2000.1
CONSOLIDATING
OPERATING INCOME STATEMENT (UNAUDITED)
PROJECTIONS FOR THE YEARS ENDING DECEMBER 31, 2001
------------------------------------------------------------------------------------------------------------------------------------
                                                                                 STAND                                      2001
                                                                                 ALONE                                  FITZGERALDS
                      FITZGERALDS   FITZGERALDS   FITZGERALDS     101 MAIN    FITZGERALDS   FITZGERALDS                    GAMING
                         RENO,       LAS VEGAS,   MISSISSIPPI,     STREET        GAMING     MANAGEMENT                  CORPORATION
                         INC            INC.          INC.          LLC       CORPORATION    COMPANY     ELIMINATION'S  CONSOLIDATED
                     ---------------------------------------------------------------------------------------------------------------
<S>                  <C>            <C>           <C>           <C>           <C>           <C>           <C>          <C>
REVENUE
  Casino             $33,926,505    $41,245,873   $78,863,431   $38,345,250   $    -        $    -        $    -       $192,381,059
  Food and Beverage    6,421,772      9,514,119     9,288,161     2,566,500        -             -             -         27,790,552
  Hotel                5,570,800      9,074,513     8,505,529        -             -             -             -         23,150,842
  Other Operating
   Departments           601,464      1,377,386       739,613         4,350        -             -             -          2,722,813
  Other                  302,380        769,029       376,564       255,011     1,334,713     4,022,500    (4,047,738)    3,012,459
                     ---------------------------------------------------------------------------------------------------------------
  TOTAL REVENUE       46,822,921     61,980,920    97,773,298    41,171,111     1,334,713     4,022,500    (4,047,738)  249,057,725
                     ---------------------------------------------------------------------------------------------------------------
COST OF SALES
  Food and Beverage    2,863,170      4,149,616     4,296,744     1,185,593        -             -             -         12,495,123
  Hotel                   -              -             -             -             -             -             -             -
  Other                    1,422        441,218       369,807        -             -             -             -            812,447
                     ---------------------------------------------------------------------------------------------------------------
  Total Cost of Sales  2,864,592      4,590,834     4,666,551     1,185,593        -             -             -         13,307,570
                     ---------------------------------------------------------------------------------------------------------------
PAYROLL AND RELATED
 EXPENSES
  Casino               6,997,089      9,202,586    11,846,360     5,253,042        -             -             -         33,299,077
  Food and Beverage    3,484,520      6,731,290     4,511,531     1,636,198        -             -             -         16,363,539
  Hotel                1,963,707      6,261,413     5,528,594        -             -             -             -         13,753,714
  Other Operating
   Departments           119,345        573,957       166,413       596,981        -             -             -          1,456,696
  Other Departments    5,230,958      5,384,473     7,441,603     3,005,104        -          3,563,530        -         24,625,668
                     ---------------------------------------------------------------------------------------------------------------
  TOTAL PAYROLL AND
   RELATED EXPENSES   17,795,619     28,153,719    29,494,501    10,491,325        -          3,563,530        -         89,498,694
                     ---------------------------------------------------------------------------------------------------------------
COMPLIMENTARY EXPENSES
  Casino               4,207,566      5,104,362     9,476,293     1,665,342        -             -             -         20,453,563
  Food and Beverage       18,083         26,727        38,434        -             -             -             -             83,244
  Hotel                    2,205         15,034        59,408        -             -             -             -             76,647
  Other Operating
   Departments            -              -              2,662        -             -             -             -              2,662
  Other Departments      182,592        422,070     1,069,769        28,456        -             -             -          1,702,887
                     ---------------------------------------------------------------------------------------------------------------
  TOTAL COMPLIMENTARY
   EXPENSES            4,410,446      5,568,193    10,646,566     1,693,798        -             -             -         22,319,003
                     ---------------------------------------------------------------------------------------------------------------
OTHER OPERATING
 EXPENSES/(REVENUE)
  Casino               6,811,729      7,354,012    21,310,459    10,473,032        -             -             -         45,949,232
  Food and Beverage      232,455        689,986       651,969       199,096        -             -             -          1,773,506
  Hotel                  689,702      1,535,545     1,679,703        -             -             -             -          3,904,950
  Other Operating
   Expenses              797,708        233,350        98,170        65,978        -             -             -          1,195,206
  Other Expenses      11,162,492     13,542,839    19,630,283    10,414,809        -          1,483,276     (4,047,738)  52,185,961
                     ---------------------------------------------------------------------------------------------------------------
  TOTAL OTHER
   OPERATING EXPENSES 19,694,086     23,355,732    43,370,584    21,152,915        -          1,483,276     (4,047,738) 105,008,855
                     ---------------------------------------------------------------------------------------------------------------
EARNINGS BEFORE TAX  $ 2,058,178    $   312,442   $ 9,595,096   $ 6,647,480   $ 1,334,713   $(1,024,306)  $    -       $ 18,923,603
                     ===============================================================================================================
EBITDA ADJUSTMENTS:
  Bond Debt Interest      -              -             -             -             -             -             -             -
  Non-Bond Debt Interest 294,793         15,514         1,994        -             -             -             -            312,301
  Interest Income-
   Corp Allocation                                                                (15,514)                                  (15,514)
  Interest Income        (22,500)       (75,300)      (22,500)      (22,500)   (1,319,199)       -             -         (1,461,999)
  Taxes                   -              -             -             -             -             -             -             -
  Depreciation         2,429,505      3,376,000     6,647,383     1,458,600        -             -             -         13,911,488
  Amortization            26,400         -             -            356,700        -             40,700        -            423,800
  Other                   (6,000)       (42,155)       -             -             -             -             -            (48,155)
  Group Allocation        -              -             -             -             -             -             -             -
                     ---------------------------------------------------------------------------------------------------------------
    Total Adjustments  2,722,198      3,274,059     6,626,877     1,792,800    (1,334,713)       40,700        -         13,121,921
                     ---------------------------------------------------------------------------------------------------------------
EBITDA (MANAGEMENT
 FORMAT)             $ 4,780,376    $ 3,586,501   $16,221,973   $ 8,440,280   $    -        $    -        $    -       $ 32,045,524
                     ===============================================================================================================
</TABLE>
PRESENTATION DOES NOT REFLECT SEC REQUIRED ADJUSTMENTS

<PAGE>
<TABLE>
<CAPTION>
DRAFT - SUBJECT TO MODIFICATION                                           CONFIDENTIAL AND PROPRIETARY - SUBJECT TO USE RESTRICTIONS
------------------------------------------------------------------------------------------------------------------------------------
FITZGERALDS GAMING CORPORATION                                                                                     BASE CASE V2000.1
CONSOLIDATING
OPERATING INCOME STATEMENT (UNAUDITED)
PROJECTIONS FOR THE YEARS ENDING DECEMBER 31, 2002
------------------------------------------------------------------------------------------------------------------------------------
                                                                                 STAND                                      2002
                                                                                 ALONE                                  FITZGERALDS
                      FITZGERALDS   FITZGERALDS   FITZGERALDS     101 MAIN    FITZGERALDS   FITZGERALDS                    GAMING
                         RENO,       LAS VEGAS,   MISSISSIPPI,     STREET        GAMING     MANAGEMENT                  CORPORATION
                         INC            INC.          INC.          LLC       CORPORATION    COMPANY     ELIMINATION'S  CONSOLIDATED
                     ---------------------------------------------------------------------------------------------------------------
<S>                  <C>           <C>           <C>           <C>           <C>           <C>           <C>           <C>
REVENUE
 Casino              $ 33,496,698  $ 42,694,614  $ 80,184,900  $ 35,721,000  $          -  $          -  $          -  $192,097,212
 Food and Beverage      6,369,424     9,816,845     9,511,766     2,436,750             -             -             -    28,134,785
 Hotel                  5,506,845     9,296,349     8,686,132             -             -             -             -    23,489,326
 Other Operating
 Departments              603,054     1,416,308       756,813         4,050             -             -             -     2,780,225
 Other                    309,229       786,373       383,029       242,434     2,166,420     4,022,500    (4,040,421)    3,869,564
                     ---------------------------------------------------------------------------------------------------------------
 TOTAL REVENUE         46,285,250    64,010,489    99,522,640    38,404,234     2,166,420     4,022,500    (4,040,421)  250,371,112
                     ---------------------------------------------------------------------------------------------------------------
COST OF SALES
 Food and Beverage      2,839,647     4,279,551     4,401,579     1,125,360             -             -             -    12,646,137
 Hotel                          -             -             -             -             -             -             -             -
 Other                      1,458       452,678       378,407             -             -             -             -       832,543
                     ---------------------------------------------------------------------------------------------------------------
 TOTAL COST OF SALES    2,841,105     4,732,229     4,779,986     1,125,360             -             -             -    13,478,680
                     ---------------------------------------------------------------------------------------------------------------
PAYROLL AND RELATED
EXPENSES
 Casino                 7,051,962     9,469,117    12,110,525     5,106,966             -             -             -    33,738,570
 Food and Beverage      3,516,042     6,926,551     4,628,644     1,622,768             -             -             -    16,694,005
 Hotel                  1,982,463     6,437,722     5,645,986             -             -             -             -    14,066,171
 Other Operating
 Departments              121,477       590,175       170,283       587,585             -             -             -     1,469,520
 Other Departments      5,361,731     5,546,009     7,595,549     3,125,308             -     3,853,163             -    25,481,760
                     ---------------------------------------------------------------------------------------------------------------
 TOTAL PAYROLL AND
 RELATED EXPENSES      18,033,675    28,969,574    30,150,987    10,442,627             -     3,853,163             -    91,450,026
                     ---------------------------------------------------------------------------------------------------------------
COMPLIMENTARY EXPENSES
 Casino                 4,154,261     5,283,651     9,456,654     1,582,518             -             -             -    20,477,084
 Food and Beverage         17,854        27,666        38,356             -             -             -             -        83,876
 Hotel                      2,177        15,562        59,285             -             -             -             -        77,024
 Other Operating
 Departments                    -             -         2,656             -             -             -             -         2,656
 Other Departments        180,280       436,893     1,067,551        27,041             -             -             -     1,711,765
                     ---------------------------------------------------------------------------------------------------------------
 TOTAL COMPLIMENTARY
 EXPENSES               4,354,572      5,763,772   10,624,502     1,609,559             -             -             -    22,352,405
                     ---------------------------------------------------------------------------------------------------------------
OTHER OPERATING
EXPENSES/(REVENUE)
 Casino                 6,756,053     7,588,725    21,677,861     9,779,560             -             -             -    45,802,199
 Food and Beverage        227,590       711,886       663,663       191,281             -             -             -     1,794,420
 Hotel                    684,387     1,573,220     1,716,102             -             -             -             -     3,973,709
 Other Operating
 Expenses                 813,937       239,754       100,304        61,857             -             -             -     1,215,852
 Other Expenses        11,169,920    13,793,042    19,879,607    10,037,182             -     1,519,344    (4,040,421)   52,358,674
                     ---------------------------------------------------------------------------------------------------------------
 TOTAL OTHER
 OPERATING EXPENSES    19,651,887    23,906,627    44,037,537    20,069,880             -     1,519,344    (4,040,421)  105,144,854
                     ---------------------------------------------------------------------------------------------------------------
EARNINGS BEFORE TAX  $  1,404,011  $    638,287  $  9,929,628  $  5,156,808  $  2,166,420  $ (1,350,007)  $         -  $ 17,945,147
                     ===============================================================================================================
EBITDA ADJUSTMENTS:
 Bond Debt Interest             -             -             -             -             -             -             -             -
 Non-Bond Debt Interest   278,676         7,541             -             -             -             -             -       286,217
 Interest Income
 - Corp Allocation                                                                 (7,541)            -             -        (7,541)
 Interest Income          (22,500)      (75,300)      (22,500)      (22,500)   (2,158,879)            -             -    (2,301,679)
 Taxes                          -             -             -             -             -             -             -             -
 Depreciation           2,429,505     3,376,000     6,647,383     1,458,600             -             -             -    13,911,488
 Amortization              26,400             -             -       356,700             -        40,700                     423,800
 Other                     (6,000)      (43,359)            -             -             -             -             -       (49,359)
 Group Allocation               -             -             -             -             -             -             -             -
                     ---------------------------------------------------------------------------------------------------------------
   Total Adjustments    2,706,081     3,264,882     6,624,883     1,792,800    (2,166,420)       40,700             -    12,262,926
                     ---------------------------------------------------------------------------------------------------------------
EBITDA (MANAGEMENT
FORMAT)              $  4,110,092  $  3,903,169  $ 16,554,511  $  6,949,608  $          -  $ (1,309,307)  $         -  $ 30,208,073
                     ===============================================================================================================
</TABLE>
PRESENTATION DOES NOT REFLECT SEC REQUIRED ADJUSTMENTS

<PAGE>
<TABLE>
<CAPTION>
DRAFT - SUBJECT TO MODIFICATION                                           CONFIDENTIAL AND PROPRIETARY - SUBJECT TO USE RESTRICTIONS
------------------------------------------------------------------------------------------------------------------------------------
FITZGERALDS GAMING CORPORATION                                                                                     BASE CASE V2000.1
CONSOLIDATING
OPERATING INCOME STATEMENT (UNAUDITED)
PROJECTIONS FOR THE YEARS ENDING DECEMBER 31, 2003
------------------------------------------------------------------------------------------------------------------------------------
                                                                                 STAND                                      2003
                                                                                 ALONE                                  FITZGERALDS
                      FITZGERALDS   FITZGERALDS   FITZGERALDS     101 MAIN    FITZGERALDS   FITZGERALDS                    GAMING
                         RENO,       LAS VEGAS,   MISSISSIPPI,     STREET        GAMING     MANAGEMENT                  CORPORATION
                         INC            INC.          INC.          LLC       CORPORATION    COMPANY     ELIMINATION'S  CONSOLIDATED
                     ---------------------------------------------------------------------------------------------------------------
<S>                  <C>           <C>           <C>           <C>           <C>           <C>           <C>           <C>
REVENUE
 Casino              $ 34,375,102  $ 43,646,026  $ 81,089,505  $ 36,166,500  $          -  $          -  $          -  $195,277,133
 Food and Beverage      6,565,766    10,093,616     9,726,770     2,490,750             -             -             -    28,876,902
 Hotel                  5,657,919     9,518,216     8,866,735             -             -             -             -    24,042,870
 Other Operating
  Departments             626,992     1,453,066       774,014         4,050             -             -             -     2,858,122
 Other                    316,247       804,151       388,010       246,127     2,906,266     4,022,500    (4,035,718)    4,647,583
                     ---------------------------------------------------------------------------------------------------------------
 TOTAL REVENUE         47,542,026    65,515,075   100,845,034    38,907,427     2,906,266     4,022,500    (4,035,718)  255,702,610
                     ---------------------------------------------------------------------------------------------------------------
COST OF SALES
 Food and Beverage      2,927,020     4,400,702     4,503,043     1,150,403             -             -             -    12,981,168
 Hotel                          -             -             -             -             -             -             -             -
 Other                      1,494       464,138       387,007             -             -             -             -       852,639
                     ---------------------------------------------------------------------------------------------------------------
 TOTAL COST OF SALES    2,928,514     4,864,840     4,890,050     1,150,403             -             -             -    13,833,807
                     ---------------------------------------------------------------------------------------------------------------
PAYROLL AND RELATED
EXPENSES
 Casino                 7,230,714     9,716,214    12,374,649     5,217,008             -             -             -    34,538,585
 Food and Beverage      3,605,612     7,122,368     4,742,510     1,665,124             -             -             -    17,135,614
 Hotel                  2,022,706     6,615,160     5,763,377             -             -             -             -    14,401,243
 Other Operating
  Departments             124,665       605,493       174,153       603,065             -             -             -     1,507,376
 Other Departments      5,495,773     5,684,658     7,777,561     3,219,068             -     3,931,921             -    26,108,981
                     ---------------------------------------------------------------------------------------------------------------
 TOTAL PAYROLL AND
  RELATED EXPENSES     18,479,470    29,743,893    30,832,250    10,704,265             -     3,931,921             -    93,691,799
                     ---------------------------------------------------------------------------------------------------------------
COMPLIMENTARY
EXPENSES
 Casino                 4,263,200     5,401,392     9,455,075     1,601,521             -             -             -    20,721,188
 Food and Beverage         18,323        28,282        38,348             -             -             -             -        84,953
 Hotel                      2,234        15,909        59,275             -             -             -             -        77,418
 Other Operating
  Departments                   -             -         2,656             -             -             -             -         2,656
 Other Departments        185,007       446,630     1,067,373        27,365             -             -             -     1,726,375
                     ---------------------------------------------------------------------------------------------------------------
 TOTAL COMPLIMENTARY
  EXPENSES              4,468,764     5,892,213    10,622,727     1,628,886             -             -             -    22,612,590
                     ---------------------------------------------------------------------------------------------------------------
OTHER OPERATING
EXPENSES/(REVENUE)
 Casino                 6,918,481     7,748,953    21,941,551     9,927,119             -             -             -    46,536,104
 Food and Beverage        234,871       731,166       675,579       195,607             -             -             -     1,837,223
 Hotel                    702,983     1,610,827     1,752,605             -             -             -             -     4,066,415
 Other Operating
  Expenses                836,712       246,141       102,450        62,709             -             -             -     1,248,012
 Other Expenses        11,351,645    14,014,319    20,106,796    10,148,827             -     1,556,313    (4,035,718)   53,142,182
                     ---------------------------------------------------------------------------------------------------------------
 TOTAL OTHER
 OPERATING EXPENSES    20,044,692    24,351,406    44,578,981    20,334,262             -     1,556,313    (4,035,718)  106,829,936
                     ---------------------------------------------------------------------------------------------------------------
EARNINGS BEFORE TAX  $  1,620,586  $    662,723  $  9,921,026  $  5,089,611  $  2,906,266  $ (1,465,734) $          -  $ 18,734,478
                     ===============================================================================================================
EBITDA ADJUSTMENTS:
 Bond Debt Interest             -             -             -             -             -             -             -             -
 Non-Bond Debt Interest   262,130         2,166             -             -             -             -             -       264,296
 Interest Income-
  Corp Allocation                                                                  (2,166)                                   (2,166)
 Interest Income          (22,500)      (75,300)      (22,500)      (22,500)   (2,904,100)            -             -    (3,046,900)
 Taxes                          -             -             -             -             -             -             -             -
 Depreciation           2,429,505     3,376,000     6,647,383     1,458,600             -             -             -    13,911,488
 Amortization              26,400             -             -       356,700             -        40,700             -       423,800
 Other                     (6,000)      (44,593)            -             -             -             -             -       (50,593)
 Group Allocation               -             -             -             -             -             -             -             -
                     ---------------------------------------------------------------------------------------------------------------
  Total Adjustments     2,689,535    3,258,273     6,624,883     1,792,800    (2,906,266)       40,700             -    11,499,925
                     ---------------------------------------------------------------------------------------------------------------
EBITDA (MANAGEMENT
FORMAT)              $   4,310,121 $  3,920,996  $ 16,545,909  $  6,882,411  $          -  $ (1,425,034) $          -  $ 30,234,403
                     ===============================================================================================================
</TABLE>
PRESENTATION DOES NOT REFLECT SEC REQUIRED ADJUSTMENTS
<PAGE>
<TABLE>
<CAPTION>
DRAFT - SUBJECT TO MODIFICATION                                           CONFIDENTIAL AND PROPRIETARY - SUBJECT TO USE RESTRICTIONS
------------------------------------------------------------------------------------------------------------------------------------
FITZGERALDS GAMING CORPORATION                                                                                     BASE CASE V2000.1
CONSOLIDATING
OPERATING INCOME STATEMENT (UNAUDITED)
PROJECTIONS FOR THE YEARS ENDING DECEMBER 31, 2004
------------------------------------------------------------------------------------------------------------------------------------
                                                                                 STAND                                      2004
                                                                                 ALONE                                  FITZGERALDS
                      FITZGERALDS   FITZGERALDS   FITZGERALDS     101 MAIN    FITZGERALDS   FITZGERALDS                    GAMING
                         RENO,       LAS VEGAS,   MISSISSIPPI,     STREET        GAMING     MANAGEMENT                  CORPORATION
                         INC            INC.          INC.          LLC       CORPORATION    COMPANY     ELIMINATION'S  CONSOLIDATED
                     ---------------------------------------------------------------------------------------------------------------
<S>                  <C>           <C>           <C>           <C>           <C>           <C>           <C>           <C>
REVENUE
 Casino              $ 35,076,102  $ 44,719,538  $ 82,830,639  $ 36,686,630  $          -  $          -  $          -  $199,312,909
 Food and Beverage      6,715,855    10,400,952     9,986,245     2,552,290             -             -             -    29,655,342
 Hotel                  5,761,255     9,766,650     9,072,124             -             -             -             -    24,600,029
 Other Operating
  Departments             641,425     1,493,903       793,380         4,062             -             -             -     2,932,770
 Other                    323,441       822,371       396,109       250,248     3,674,926     4,022,500    (4,034,241)    5,455,354
                     ---------------------------------------------------------------------------------------------------------------
 TOTAL REVENUE         48,518,078    67,203,414   103,078,497    39,493,230     3,674,926     4,022,500    (4,034,241)  261,956,404
                     ---------------------------------------------------------------------------------------------------------------
COST OF SALES
 Food and Beverage      2,994,057     4,535,385     4,623,869     1,178,927             -             -             -    13,332,238
 Hotel                          -             -             -             -             -             -             -             -
 Other                      1,531       476,900       396,690             -             -             -             -       875,121
                     ---------------------------------------------------------------------------------------------------------------
 TOTAL COST OF SALES    2,995,588     5,012,285     5,020,559     1,178,927             -             -             -    14,207,359
                     ---------------------------------------------------------------------------------------------------------------
PAYROLL AND RELATED
EXPENSES
 Casino                 7,371,211     9,989,126    12,647,691     5,339,533             -             -             -    35,347,561
 Food and Beverage      3,687,590     7,322,237     4,869,781     1,712,810             -             -             -    17,592,418
 Hotel                  2,059,648     6,812,238     5,896,880             -             -             -             -    14,768,766
 Other Operating
  Departments             127,601       622,509       178,511       620,044             -             -             -     1,548,665
 Other Departments      5,633,167     5,826,775     7,975,839     3,315,641             -     4,019,846             -    26,771,268
                     ---------------------------------------------------------------------------------------------------------------
 TOTAL PAYROLL AND
  RELATED EXPENSES     18,879,217    30,572,885    31,568,702    10,988,028             -     4,019,846             -    96,028,678
                     ---------------------------------------------------------------------------------------------------------------
COMPLIMENTARY
EXPENSES
 Casino                 4,350,137     5,534,245     9,584,366     1,623,811             -             -             -    21,092,559
 Food and Beverage         18,696        28,978        38,873             -             -             -             -        86,547
 Hotel                      2,280        16,300        60,086             -             -             -             -        78,666
 Other Operating
  Departments                   -             -         2,692             -             -             -             -         2,692
 Other Departments        188,779       457,615     1,081,966        27,746             -             -             -     1,756,106
                     ---------------------------------------------------------------------------------------------------------------
 TOTAL COMPLIMENTARY
  EXPENSES              4,559,892     6,037,138    10,767,983     1,651,557             -             -             -    23,016,570
                     ---------------------------------------------------------------------------------------------------------------
OTHER OPERATING
EXPENSES/(REVENUE)
 Casino                 7,051,356     7,927,800    22,422,023    10,095,748             -             -             -    47,496,927
 Food and Beverage        240,052       752,622       692,033       200,448             -             -             -     1,885,155
 Hotel                    716,340     1,652,806     1,793,585             -             -             -             -     4,162,731
 Other Operating
  Expenses                857,286       253,148       104,945        63,688             -             -             -     1,279,067
 Other Expenses        11,503,291    14,256,244    20,397,132    10,273,489             -     1,594,198    (4,034,241)   53,990,113
                     ---------------------------------------------------------------------------------------------------------------
 TOTAL OTHER
 OPERATING EXPENSES    20,368,325    24,842,620    45,409,718    20,633,373             -     1,594,198    (4,034,241)  108,813,993
                     ---------------------------------------------------------------------------------------------------------------
EARNINGS BEFORE TAX  $  1,715,056  $    738,486  $ 10,311,535  $  5,041,345  $  3,674,926  $ (1,591,544) $          -  $ 19,889,804
                     ===============================================================================================================
EBITDA ADJUSTMENTS:
 Bond Debt Interest             -             -             -             -             -             -             -             -
 Non-Bond Debt Interest   243,704             -             -             -             -             -             -       243,704
 Interest Income-
  Corp Allocation                                                                       -                                         -
 Interest Income          (22,500)      (75,300)      (22,500)      (22,500)   (3,674,926)            -             -    (3,817,726)
 Taxes                          -             -             -             -             -             -             -             -
 Depreciation           2,429,505     3,376,000     6,647,383     1,458,600             -             -             -    13,911,488
 Amortization              26,400             -             -       356,700             -        40,700             -       423,800
 Other                     (6,000)      (45,858)            -             -             -             -             -       (51,858)
 Group Allocation               -             -             -             -             -             -             -             -
                     ---------------------------------------------------------------------------------------------------------------
   Total Adjustments    2,671,109    3,254,842     6,624,883     1,792,800    (3,674,926)        40,700             -    10,709,408
                     ---------------------------------------------------------------------------------------------------------------
EBITDA (MANAGEMENT
FORMAT)              $   4,386,165 $  3,993,328  $ 16,936,418  $  6,834,145  $          -  $ (1,550,844) $          -  $ 30,599,212
                     ===============================================================================================================
</TABLE>
PRESENTATION DOES NOT REFLECT SEC REQUIRED ADJUSTMENTSExhibit 4.2

                               PURCHASE AGREEMENT

      PURCHASE AGREEMENT (this "Agreement") is made as of March 2, 1999 between
MILESTONE SCIENTIFIC INC., a Delaware corporation, with its principal offices at
220 South Orange Avenue, Livingston, New Jersey 07039 (the "Company"), and the
undersigned (the "Purchaser").

      WHEREAS, the Company is offering to sell up to an aggregate of $4,000,000
of its 3% Senior Convertible Notes (the "Notes"), substantially in the form
annexed hereto as Exhibit A; and

      WHEREAS, the Company desires to sell to Purchaser and Purchaser desires to
purchase Notes having a principal amount as is set forth on the signature page
hereof.

      NOW, THEREFORE, in consideration of the premises and the covenants herein
contained, the parties hereto agree as follows:

      1. Purchase and Sale of Notes. Subject to the terms and conditions
hereinafter set forth, Purchaser hereby subscribes for and agrees to purchase
Notes from the Company having the principal amount set forth on the signature
page hereto and the Company hereby agrees to sell Notes having such principal
amount to Purchaser. The purchase price for the Notes shall be an amount equal
to 100% of their stated principal amount (the "Purchase Price"). The Purchase
Price is payable by certified or bank check made payable to the Company or by
wire transfer of funds, contemporaneously with the execution and delivery of
this Agreement. The Notes being purchased by Purchaser will be delivered by the
Company on the Closing Date (as defined below).

      2. Terms of the Notes. Except as otherwise set forth in this Agreement,
the terms of the Notes shall be as set forth in the Notes.

      3. Closing. The closing of the transactions contemplated hereby
("Closing") shall take place on one or more dates (each a "Closing Date" and
collectively the "Closing Dates") within three (3) business days following the
satisfaction of the conditions set forth herein and at such times as shall be
determined by the Company at the offices of Morse, Zelnick, Rose & Lander, LLP,
450 Park Avenue, New York, New York 10022.

      4. Representations and Warranties of the Company. The Company hereby
represents and warrants to Purchaser, which representations and warranties shall
be true and correct as of the date hereof and as of the Closing Date, as
follows:

            4.1 Organization; Standing and Power. The Company and its
      subsidiaries (a) are corporations duly organized, existing and in good
      standing under the laws of the state of their incorporation, (b) have all
      requisite corporate power and authority to own its properties and to carry
      on their businesses as now conducted and as proposed hereafter to be
      conducted, (c) are duly qualified to do business as foreign corporations
      in each and every jurisdiction where such qualification is necessary
      except where the failure to so qualify would not have a material adverse
      effect on the financial condition, business, operations, assets or
      prospects of the Company and its subsidiaries as a whole and (d) the
      Company has all requisite corporate power and authority to execute and
      deliver, and perform all of its obligations under this Agreement.

<PAGE>

            4.2 Capitalization. The total authorized capital stock of the
      Company consists of 25,000,000 shares of Common Stock and no shares of
      preferred stock. As of February 1, 1999, the Company has outstanding
      8,817,882 shares of Common Stock. In addition, there are 1,000,000 shares
      of Common Stock reserved for issuance under the Company's 1997 Stock
      Option Plan of which 674,000 shares are issuable pursuant to the exercise
      of outstanding stock options ranging in exercise price from $3.00 to
      $18.50 per share. The Company also has outstanding other compensatory
      options for 226,000 shares with exercise prices ranging from $5.125 to
      $23.00 per share and warrants and options in connection with financing
      transactions for 1,686,296 shares at exercise prices ranging from $4.72 to
      $9.00 per share of Common Stock. Except as set forth in this Section 4.2,
      the Company does not have outstanding any securities convertible into or
      exchangeable for any shares of capital stock or any rights (preemptive or
      otherwise) to subscribe for or to purchase, or any options for the
      purchase of, or any agreements providing for the issuance (contingent or
      otherwise) of, any capital stock or any stock or securities convertible
      into or exchangeable for any capital stock.

            4.3 Authorization. The execution, delivery and performance by the
      Company of its obligations under this Agreement has been duly authorized
      by all requisite corporate action and will not, either prior to or as a
      result of the consummation of the transactions contemplated by this
      Agreement: (a) violate any law, any order of any court or other agency of
      government, any provision of the Certificate of Incorporation or Bylaws of
      the Company or any contract, indenture, agreement or other instrument to
      which the Company is a party, or by which the Company or any of its assets
      or properties are bound, or (b) be in conflict with, result in a breach
      of, or constitute (after the giving of notice of lapse of time or both) a
      default under, or result in the creation or imposition of any lien of any
      nature whatsoever upon any of the property or assets of any Company
      pursuant to, or result in the acceleration of, any such contract,
      indenture, agreement or other instrument. The Company is not required to
      obtain any government approval, consent or authorization from, or to file
      any declaration or statement with, any governmental instrumentality or
      agency in connection with or as a condition to the execution, delivery or
      performance of any of this Agreement other than the filings which have
      heretofore been made.

            4.4 Non-contravention. To the best of its knowledge, the Company is
      not in violation or breach of or in default with respect to, complying
      with any material provision of any contract, agreement, instrument, lease,
      license, arrangement or understanding to which it is a party, and each
      such contract, agreement, instrument, lease, license, arrangement and
      understanding is in full force and effect and is the legal, valid and
      binding obligation of the Company enforceable as to the Company in
      accordance with its terms (subject to applicable bankruptcy, insolvency
      and other laws affecting the enforceability of creditors' rights generally
      and to general equitable principals). Neither the execution and the
      delivery of this Agreement, nor the consummation of the transactions
      contemplated hereby, will (a) violate any constitution, statute,
      regulation, rule, injunction, judgment, order, decree, ruling, charge, or
      other restriction of any government, governmental agency, or court to
      which the Company is subject or (b) conflict with, result in a breach of,
      constitute a default under, result in the acceleration of, create in any
      party the right to accelerate, terminate, modify, or cancel, or require
      any notice under any agreement, contract, lease, license, instrument, or
      other arrangement to which the Company is a party or by which the Company
      is bound or to which any of the Company's assets are subject.

                                       2
<PAGE>

            4.5 Litigation. There is no action, suit or proceeding at law or in
      equity or by or before any governmental instrumentality or other agency
      now pending or, to the knowledge of the Company, threatened in writing
      against the Company, or any of its assets, which, if adversely determined,
      might reasonably be expected to have a material adverse effect on the
      Company's business, operations and financial condition, other than as
      disclosed in its Quarterly Report on Form 10-QSB for the periods ended
      September 30, 1998.

            4.6 SEC Filings. The information set forth in the Form 10-KSB for
      the year ended December 31, 1997 and Form 10-QSB for the nine month period
      ended September 30, 1998 (collectively, the "SEC Filings") as filed by the
      Company with the Securities and Exchange Commission (the "SEC") is true,
      correct and complete in all material respects as of the respective date of
      each such filing and does not omit to state any material fact necessary in
      order to make the statements therein not misleading. The financial
      statements of the Company as set forth in the SEC Filings have been
      prepared in accordance with GAAP applied on a consistent basis throughout
      the periods covered thereby and fairly present in all material respects
      the financial condition and results of operations of the Company as of
      their respective dates. Since September 30, 1998, there has not been any
      material adverse change in the business, financial condition or results of
      operations of the Company except that the Company has continued to operate
      at a loss and may have a loss for the year ended December 31, 1998 of
      approximately $9,000,000. Except for the liabilities set forth in the
      financial statements included in the SEC Filings and liabilities which
      have arisen after September 30, 1998 in the ordinary course of business,
      the Company has no material liability.

            4.7 Due Authorization. The issuance of the Notes has been duly
      authorized by all necessary corporate action and when issued will be the
      legal and binding obligations of the Company enforceable in accordance
      with their terms. The shares of Common Stock issuable upon conversion of
      the Notes have been duly authorized and reserved for issuance and, when
      issued, will be fully paid and non-assessable, free and clear of any
      restrictions on transfer (other than any restrictions under the Securities
      Act of 1933, as amended (the "Securities Act") and state securities laws),
      taxes, security interests, options, warrants, purchase rights, contracts,
      commitments, equities, claims, and demands.

            4.8 Securities Law Exemption. Assuming the accuracy of Purchaser's
      representations and warranties set forth herein, the sale of the Notes
      pursuant to this Agreement has been made in accordance with the provisions
      and requirements of Regulation D ("Regulation D") under the Securities Act
      and any applicable state law.

            4.9 Use of Proceeds. The proceeds from the sale of the Notes will be
      used 80% for sales and marketing of the Company's products and services
      and 20% for working capital.

            4.10 Compliance with Laws. The Company is in compliance in all
      material respects with all occupational safety, health, wage and hour,
      employment discrimination, environmental, flammability, labeling, usury
      and other applicable laws which are material to its businesses, and the
      Company is not aware of any state of facts, events, conditions or
      occurrences which may now or hereafter constitute or result in a violation
      of any of such applicable laws, or which may give rise to the assertion of
      any such violation, the effect of which could have a material adverse
      effect on the Company's business, operations and financial condition.

                                       3
<PAGE>

            4.11 Licenses and Permits. The Company has obtained all federal,
      state and local licenses and permits required to be maintained in
      connection with and material to its operations, and all such licenses and
      permits obtained are valid and in full force and effect.

            4.12 Existing Registration Rights. Except for the Registration
      Rights Agreement referred to in Section 7 hereof, the Company is not a
      party to any agreement under which it is obligated to register any of its
      securities under the Securities Act.

            4.13 Patents, Trademarks, Copyrights, Etc. The Company owns or
      validly licenses all patents, patent rights, patent applications,
      licenses, shop rights, trademarks, trademark applications, tradenames,
      copyrights and other proprietary information (collectively "Rights") used
      in the conduct of its business as currently being conducted. To the actual
      knowledge of the Company, the conduct of its business as currently being
      conducted does not conflict with valid rights of others in any way, nor
      has any material use been made of the Rights, except by the Company or by
      other entities duly licensed to use the same.

            4.14 No Other Representations. The Company shall not be deemed to
      have made any representations, warranties, covenants, agreements or
      indemnifications pertaining to the subject matter of this Agreement,
      whether express or implied, except to the extent that such
      representations, warranties, covenants, agreements or indemnifications are
      made in this Agreement or the Schedules hereto or in any certificate or
      other agreement, document or instrument delivered pursuant to the
      provisions of this Agreement.

      5. Representations and Warranties of the Purchasers. The Purchaser hereby
represents and warrants to the Company, which representations and warranties
shall be true and correct as of the date hereof and the Closing Date, as
follows:

            5.1 Authorization of Agreement. The execution, delivery and
      performance of this Agreement has been duly authorized by all necessary
      action on the part of Purchaser, does not violate any laws or regulations
      applicable to Purchaser and is the valid binding and enforceable
      obligation of Purchaser in accordance with its terms.

            5.2 Non-contravention. Neither the execution and the delivery of
      this Agreement, nor the consummation of the transactions contemplated
      hereby, will (a) violate any constitution, statute, regulation, rule,
      injunction, judgment, order, decree, ruling, charge, or other restriction
      of any government, governmental agency, or court to which Purchaser is
      subject or (b) conflict with, result in a breach of, constitute a default
      under, result in the acceleration of, create in any party the right to
      accelerate, terminate, modify, or cancel, or require any notice under any
      agreement, contract, lease, license, instrument, or other arrangement to
      which Purchaser is a party or by which Purchaser is bound or to which any
      of Purchaser's assets are subject.

            5.3 Accredited Investor. Purchaser is an "accredited investor" as
      that term is defined in Rule 501(a) of the Securities Act, and the rules
      promulgated thereunder.

            5.4 Investment. Purchaser acknowledges that this offering of Notes
      has not been reviewed by the United States Securities and Exchange
      Commission ("SEC") and that the sale

                                       4
<PAGE>

      of the Notes pursuant hereto is intended to be a nonpublic offering
      pursuant to Sections 4(2), 4(6) or 3(b) of the Securities Act. Purchaser
      represents that the Notes are being purchased for his own account, for
      investment and not for distribution or resale to others. Purchaser agrees
      that Purchaser will not sell or otherwise transfer the Notes or the shares
      of the Common Stock issuable upon conversion of the Notes unless such
      securities, as the case may be, are registered under the Securities Act or
      unless an exemption from such registration is available. Purchaser
      understands that neither the Notes nor the shares of Common Stock issuable
      upon conversion of the Notes have been registered under the Securities Act
      and they are or will be issued pursuant to a specific exemption from the
      registration provisions of the Securities Act which depends upon, among
      other things, the bona fide nature of the investment intent as expressed
      herein.

            5.5 Access to Data. Purchaser has been given copies of the SEC
      Filings and has had an opportunity to review same. Purchaser has had an
      opportunity to discuss the SEC Filings and the Company's business,
      management and financial affairs with the Company's management and the
      opportunity to review the Company's facilities, each to Purchaser's
      satisfaction. Purchaser understands that such discussions, as well as any
      written information issued or provided by the Company, were intended to
      describe the aspects of the Company's business and prospects which the
      Company believes to be material but were not necessarily a thorough or
      exhaustive description thereof.

            5.6 Speculative Nature of Investment. Purchaser acknowledges that
      the purchase of the Notes involves a high degree of risk and that (i) an
      investment in the Company is highly speculative and only investors who can
      afford the loss of their entire investment should consider investing in
      the Company and purchasing Notes; (ii) Purchaser may not be able to
      liquidate his investment; (iii) transferability of the Notes and the
      shares of Common Stock issuable upon conversion of the Notes is extremely
      limited; and (iv) Purchaser could sustain the loss of his entire
      investment.

            5.7 Experience. Purchaser acknowledges that he has prior investment
      experience, including investment in non-listed and non-registered
      securities, or has employed the services of an investment advisor,
      attorney or accountant to review all of the documents furnished or made
      available by the Company and to evaluate the merits and risks of such an
      investment on Purchaser's behalf.

            5.8 Lack of Liquidity. Purchaser understands that there is no public
      market for the Notes.

            5.9 Legends. Purchaser consents to the placement of a legend on the
      Notes as set forth in Section 6 of this Agreement.

            5.10 [Intentionally Omitted.]

            5.11 Address. Purchaser hereby represents that the address of
      Purchaser furnished by him at the end of this Agreement is Purchaser's
      principal residence if Purchaser is an individual or Purchaser's principal
      business address if it is a corporation or other entity.

                                       5
<PAGE>

            5.12 Registered Representative. Purchaser acknowledges that if he is
      a Registered Representative of a National Association of Securities
      Dealers, Inc. ("NASD") member firm, he must give such firm the notice
      required by the NASD Conduct Rules, or any applicable successor rules of
      the NASD receipt of which must be acknowledged by such firm on the
      signature page hereof.

            5.13 No Other Representations. Purchaser hereby represents that,
      except as set forth herein, no representations or warranties have been
      made to the Purchaser by the Company or any agent, employee or affiliate
      of the Company and in entering into this transaction, Purchaser is not
      relying on any information, other than that contained herein, that
      contained in the SEC Filings and the results of independent investigation
      by the Purchaser.

            5.14 Purpose. If Purchaser is a partnership, corporation, trust or
      other entity, it was not formed for the purpose of investing in the
      Company.

            5.15 No Broker. There is no firm, corporation, agency or other
      entity or person that is entitled to a finder's fee or any type of
      commission in relation to or in connection with the transactions
      contemplated by this Agreement as a result of any agreement or
      understanding with Purchaser or any of its directors, officers, employees
      or agents.

            6. Legends. The Notes shall be endorsed with the following legend:

      THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE
      SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNTIL (I) A REGISTRATION
      STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") SHALL
      HAVE BECOME EFFECTIVE WITH RESPECT THERETO OR (II) RECEIPT BY THE COMPANY
      OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE
      EFFECT THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED IN CONNECTION WITH
      SUCH PROPOSED TRANSFER NOR IS IN VIOLATION OF ANY APPLICABLE STATE
      SECURITIES LAWS. THIS LEGEND SHALL BE ENDORSED UPON ANY NOTE ISSUED IN
      EXCHANGE FOR THIS NOTE.

      THIS NOTE IS SUBJECT TO THE TERMS OF A PURCHASE AGREEMENT, DATED AS OF
      MARCH 2, 1999, A COPY OF WHICH IS ON FILE AT THE EXECUTIVE OFFICES OF
      MILESTONE SCIENTIFIC INC.

            7. Registration Rights. The Company and the Purchaser will enter
      into a registration rights agreement, substantially in the form annexed
      hereto as Exhibit B.

            8. Confidentiality. Purchaser covenants and agrees that none of
      Purchaser, his agents and representatives will use for their own benefit,
      convey or disclose to any third party any information provided by the
      Company concerning its current or proposed business, operations and
      financial conditions, other than information which is already publicly
      available, was already known to Purchaser or is obtained from a source
      other than the Company and to the extent required by law.

                                       6
<PAGE>

      9. Covenants.

            9.1 Affirmative Covenants of the Company. The Company covenants and
      agrees that, from the date hereof and until the Notes have been paid in
      full, it shall:

                  (a) Corporate. Do or cause to be done all things necessary to
            at all times (a) other than mergers solely among the Company and any
            of its subsidiaries, preserve, renew and keep in full force and
            effect its corporate existence, patents, trademarks, rights,
            licenses, permits and franchises, (b) comply with this Agreement,
            (c) maintain and preserve all of its material property used or
            useful in the conduct of their respective businesses, and (d) comply
            with all applicable laws material to its businesses, including the
            reporting requirements of the Securities Exchange Act of 1934,
            whether now in effect or hereafter enacted, promulgated or issued.

                  (b) Notice of Proceedings. Give prompt written notice to the
            Purchaser of any proceeding instituted against the Company in any
            federal or state court or before any commission or other regulatory
            body, whether federal, state or local, which, if adversely
            determined, could have a material adverse effect upon their
            business, operations, properties, assets or condition, financial or
            otherwise when taken as a whole.

                  (c) Books and Records; Inspection. Maintain true and accurate
            books and records respecting all of their business operations, and
            permit agents or representatives of the Purchasers to inspect, at
            any time during normal business hours, upon reasonable notice, and
            without undue material disruption of their business operations, all
            of such books and records and to visit the properties and operations
            of the Company and consult with the employees and officers of the
            Company.

                  (d) Notice of Default or Material Adverse Change. Promptly
            advise the Purchaser of any event which could have a material
            adverse effect on the Company's business, operation, property,
            assets or condition, financial or otherwise, or the existence or
            occurrence of any Event of Default (as defined in the Notes), any
            breach of this Section 9.1 or Section 9.2 or any default of the
            Company under any agreement or instrument to which it is a party.

                  (e) Notice of Filings with SEC. Promptly advise the Purchaser
            of any filing of a registration statement under the Securities Act
            with the SEC covering any of the Company's securities.

                  (f) Delivery of Financial Statements and other Reports. The
            Company will deliver to each holder of Notes promptly upon
            transmission thereof, copies of all financial statements,
            information circulars, proxy statements and reports as the Company
            shall send to its stockholders and copies of all registration
            statements, prospectuses and all reports which it shall file with
            the Securities and Exchange Commission or with any securities
            exchange on which any of its securities is listed or with NASDAQ and
            copies of all press releases and other statements made available to
            the public concerning material developments in the business of the
            Company.

                                       7
<PAGE>

                  (g) Stock to be Reserved. The Company covenants that all
            shares of Common Stock that may be issued upon conversion of the
            Notes or in respect of interest payable on the Notes will, upon
            issuance, be validly issued, fully paid and nonassessable and free
            from all taxes, liens and charges with respect to the issuance
            thereof. The Company covenants that during the period in which the
            Notes are outstanding it will at all times have authorized and
            reserved a sufficient number of shares of Common Stock to permit the
            conversion of the Notes.

            9.2 Negative Covenants of the Company. The Company covenants and
      agrees that, until the Notes have been paid in full, unless the holders of
      Notes representing more than 50% of the aggregate principal amount of the
      Notes (the "Requisite Majority") shall otherwise consent in writing, the
      Company shall not directly or indirectly:

                  (a) Restrictions on Debt and Certain Payments. Incur, create,
            assume or suffer to exist any indebtedness that shall be senior to
            or pari passu with (in right of payment) the Notes other than: (i)
            any purchase money obligations incurred by the Company in connection
            with the purchase of property; (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. The Company will not prepay any
            indebtedness or redeem any securities junior to, or pari passu with,
            the Notes.

                  (b) Restrictions on Liens. Create, assume or suffer to exist
            any lien upon any of its property or assets except (i) liens for
            taxes which are not yet due or are being contested in good faith,
            (ii) statutory liens of landlords and liens of carriers,
            warehousemen, mechanics and materialmen incurred in the ordinary
            course of business and (iii) liens made through purchase money
            security interests in the ordinary course of business.

                  (c) Registration and other Rights. Enter into any agreement
            with respect to its securities which is contrary to or inconsistent
            with the rights granted to the holders of Notes in the Registration
            Rights Agreement, this Agreement or the Notes.

      10. Participation and Additional Financing. In the event the Company
offers to sell shares of Common Stock, or securities convertible into or
exercisable for Common Stock, at a price per share less than the Conversion
Price in effect at the time of such proposed sale, other than shares issued
pursuant to employee stock options (the "Offering"), the Purchaser shall have
the right to purchase (the "Purchase Right") in connection with the Offering,
such number of shares of Common Stock as shall equal the product of (a) the
maximum number of shares of Common Stock being offered for sale by the Company
in the Offering and (b) a fraction, the numerator of which is the number of
shares into which the Note held by the Purchaser is convertible and the
denominator of which is the total number of shares of the Company issued and
outstanding at such time (without taking into account the shares of Common Stock
being offered in the Offering). The Company shall give the Purchaser written
notice of the Offering and include therein detailed information concerning the
terms of the Offering, including, but not limited to, the maximum number of
shares being offered in the Offering, the purchase price per share and the
maximum number of shares of Common Stock which the Purchaser has the right to
purchase pursuant to this Section 10. The Purchaser shall then have ten (10)
business days within which to notify the Company in writing of its intention to
exercise such

                                       8
<PAGE>

Purchaser's Purchase Right and the number of shares of Common Stock which
Purchaser intends to purchase (the "Subject Shares") pursuant to the Purchase
Right. If the Purchaser shall fail to provide the Company with such written
notification, the Company shall have no obligation to sell, and the Purchaser
shall have no right to purchase, any shares of Common Stock being sold in the
Offering. If the Purchaser shall notify the Company of its intention to exercise
such Purchaser's Purchase Right, the Company shall sell and the Purchaser shall
purchase the Subject Shares at such date and time as shall be mutually agreed to
by the parties.

      11. Conditions Precedent to the Obligations of the Company. The
obligations of the Company pursuant to this Agreement are subject to the
satisfaction at the Closing of each of the following conditions; provided,
however, that the Company may, in its sole discretion, waive any of such
conditions and proceed with the transactions contemplated hereby.

            11.1 Accuracy of Representations and Warranties. The representations
      and warranties of the Purchaser contained in this Agreement or in any
      document or certificate delivered in connection with the transactions
      contemplated hereby shall be true and correct in all material respects on
      and as of the Closing Date, as if made on and as of the Closing Date.

            11.2 Performance of Agreements. Each Purchaser shall have duly
      executed and delivered this Agreement to the Company and shall have
      performed and complied in all material respects with all covenants,
      obligations and agreements to be performed or complied with by any of them
      on or before the Closing Date pursuant to this Agreement.

      12. Conditions Precedent to the Obligations of the Purchasers. The
obligations of a Purchaser under this Agreement is subject to the satisfaction
at the Closing of each of the following conditions; provided, however, that a
Purchaser may, in such Purchaser's sole discretion, waive any of such conditions
and proceed with the transactions contemplated hereby.

            12.1 Accuracy of Representations and Warranties. The representations
      and warranties of the Company contained in this Agreement or in any
      document or certificate delivered in connection with the transactions
      contemplated hereby shall be true and correct in all material respects on
      and as of the Closing Date, as if made on and as of the Closing Date.

            12.2 Performance of Agreements. The Company shall have duly executed
      and delivered this Agreement and the Registration Rights Agreement and
      shall have performed and complied in all material respects with all
      covenants, obligations and agreements to be performed or complied with by
      it on or before the Closing Date pursuant to this Agreement.

            12.3 Litigation, Material Changes, Defaults, etc. No claim, action,
      suit, proceeding, arbitration or hearing or notice of hearing shall be
      pending (and no action or investigation by any governmental authority
      shall be threatened) which seeks to enjoin, prevent or adversely affect
      the consummation of the transactions contemplated by this Agreement. There
      shall not have been any changes in the business of the Company which have
      or could reasonably be expected to have a material adverse effect on the
      business, operations, properties, assets or condition, financial or
      otherwise, of the Company. There shall exist no defaults under the
      provisions of any instrument evidencing indebtedness of the Company.

                                       9
<PAGE>

            12.4 Officers and Secretary's Certificate. The Purchaser shall have
      received a certificate of the chief executive officer and the chief
      financial officer of the Company, dated the Closing Date, certifying as to
      the fulfillment of the conditions set forth in Sections 11.1, 11.2 and
      11.3 and a certificate of the Company's Secretary certifying copies of the
      Company's Certificate of Incorporation, By-laws and all resolutions
      authorizing the transactions contemplated herein and certifying as to the
      incumbency of officers executing this Agreement and any related document.

            12.5 Good Standing Certificates. The Purchaser shall have received
      (a) "good standing" certificate with respect to the Company from the
      Secretary of State of Delaware stating that the Company is duly
      incorporated and in good standing in Delaware, and (b) a certificate from
      the Secretary of State of New Jersey to the effect that the Company is
      duly qualified to do business in New Jersey as a foreign corporation.

            12.6 Legal Opinion. The Purchaser shall have received an opinion
      from counsel to the Company substantially in the form annexed hereto as
      Exhibit C.

            12.7 Purchase Permitted by Applicable Laws. The purchase of and
      payment for the Notes shall not be prohibited by any applicable law or
      governmental regulation (including without limitation Regulations G, T and
      X of the Board of Governors of the Federal Reserve System) and shall not
      subject the holders of the Notes to any tax, penalty or liability under
      any applicable law or governmental regulation.

      13. General Provisions.

            13.1 Survival of Representations, Warranties, Covenants, and
      Agreements. The representations, warranties, covenants and agreements
      contained in this Agreement shall survive the execution of this Agreement.

            13.2 Notices. All notices, requests, demands and other
      communications which are required to be or may be given under this
      Agreement to any party to any of the other parties shall be in writing and
      shall be deemed to have been duly given when (a) delivered in person, (b)
      the day following dispatch by an overnight courier service (such as
      Federal Express or UPS, etc.) or (c) five (5) days after dispatch by
      certified or registered first class mail, postage prepaid, return receipt
      requested, to the party to whom the same is so given or made. Any notice
      or other communication given hereunder shall be addressed to the Company,
      at its principal offices as set forth above and to the Purchaser at his
      address indicated on the signature page hereto.

            13.3 Counterparts. This Agreement may be executed in two or more
      counterparts, each of which shall be deemed an original and all of which
      together shall constitute one and the same instrument.

            13.4 Headings. All headings are inserted for convenience of
      reference only and shall not affect the meaning or interpretation of any
      such provisions or of this Agreement, taken as an entirety.

                                       10
<PAGE>

            13.5 Severability. If and to the extent that any court of competent
      jurisdiction holds any provision (or any part thereof) of this Agreement
      to be invalid or unenforceable, such holding shall in no way affect the
      validity of the remainder of this Agreement.

            13.6 Changes, Waivers, Etc. Subject to Section 9.11, neither this
      Agreement nor any provision hereof may be changed, waived, discharged or
      terminated orally, but rather may only be changed by a statement in
      writing signed by the party against which enforcement of the change,
      waiver, discharge or termination is sought. It is agreed that a waiver by
      either party of a breach of any provision of this Agreement shall not
      operate, or be construed, as a waiver of any subsequent breach by that
      same party.

            13.7 Governing Law. This Agreement shall be governed by and
      construed in accordance with the laws of the State of New York. The
      parties hereby agree that any dispute which may arise between them arising
      out of or in connection with this Agreement shall be adjudicated before a
      court located in New York City and they hereby submit to the exclusive
      jurisdiction of the courts of the State of New York located in New York,
      New York and of the federal courts in the Southern District of New York
      with respect to any action or legal proceeding commenced by any party, and
      irrevocably waive any objection they now or hereafter may have respecting
      the venue of any such action or proceeding brought in such a court or
      respecting the fact that such court is an inconvenient forum, relating to
      or arising out of this Agreement or any acts or omissions relating to the
      sale of the securities hereunder, and consent to the service of process in
      any such action or legal proceeding by means of registered or certified
      mail, return receipt requested, in care of the address set forth below or
      such other address as the undersigned shall furnish in writing to the
      other.

            13.8 Binding Effects. This Agreement shall be binding upon and inure
      to the benefit of the parties hereto and their respective successors,
      legal representatives and assigns.

            13.9 Entire Agreement. This Agreement sets forth the entire
      agreement and understanding between the parties as to the subject mater
      thereof and incorporates and supersedes all prior discussions, agreements
      and understandings of any and every nature among them.

            13.10 Further Assurances. The parties agree to execute and deliver
      all such further documents, agreements and instruments and take such other
      and further action as may be necessary or appropriate to carry out the
      purposes and intent of this Agreement.

            13.11. Waivers and Amendments. With the written consent of the
      Requisite Majority, the obligations of the Company under this Agreement
      may be waived (either generally or in a particular instance and either
      retroactively or prospectively), and with the same consent the Company may
      enter into a supplementary agreement for the purpose of adding any
      provisions to this Agreement or to any supplemental agreement or modifying
      in any manner the rights and obligations of the holders of the Notes and
      of the Company; provided, however, that no such waiver or supplemental
      agreement shall reduce the aforesaid percentage of holders of the Notes
      who are required to consent to any waiver or supplemental agreement
      without the consent of all of the holders of the Notes. Notwithstanding
      anything to the contrary above, the payment of interest, time of payment
      of interest, the interest rate payable, payment of principal and time of
      payment of principal on the Notes may not be

                                       11
<PAGE>

      changed without the written consent of holders then holding at least 80%
      of the outstanding principal amount of the Notes, and this provision may
      not be waived or amended without the written consent of holders then
      holding at least 80% of the outstanding principal amount of the Notes.
      Written notice of any such waiver, consent or agreement of amendment,
      modification or supplement shall be given by the Company to holders of the
      Notes who have not previously consented thereto in writing.

            13.12. Expenses. Each party hereto shall pay all of its own fees and
      expenses in connection with the transactions contemplated hereby;
      provided, however, the Company shall pay the legal fees incurred by
      Purchasers to Willkie Farr & Gallagher in connection with the transactions
      contemplated hereby to the extent such legal fees do not exceed $15,000 in
      the aggregate, plus the disbursements of such legal counsel.

                                       12
<PAGE>

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

PURCHASER:

-----------------------------------

Social Security or Taxpayer
Identification Number of Purchaser

Principal Amount of Notes Being Subscribed For          Purchase Price

                                        MILESTONE SCIENTIFIC INC.

                                        By:_____________________________________
                                             Leonard Osser, Chairman, and
                                             Chief Executive Officer

                                       13
<PAGE>

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

PURCHASER:

-----------------------------------
      K. TUCKER ANDERSEN

c/o Cumberland Associates LLC
1114 Avenue of the Americas
New York, NY 10036

###-##-####
Social Security or Taxpayer
Identification Number of Purchaser

$250,000                                                $250,000
Principal Amount of Notes Being Subscribed For          Purchase Price

                                        MILESTONE SCIENTIFIC INC.

                                        By:_____________________________________
                                             Leonard Osser, Chairman, and
                                             Chief Executive Officer

                                       14
<PAGE>

      transactions contemplated hereby to the extent such legal fees do not
      exceed $15,000 in the aggregate, plus the disbursements of such legal
      counsel.

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

PURCHASER:

STRATEGIC RESTRUCTURING PARTNERSHIP LP

By:________________________________

1114 Avenue of the Americas
New York, NY 10036

-----------------------------------
Social Security or Taxpayer
Identification Number of Purchaser

$250,000                                                $250,000
Principal Amount of Notes Being Subscribed For          Purchase Price

                                        MILESTONE SCIENTIFIC INC.

                                        By:____________________________________
                                             Leonard Osser, Chairman, and
                                             Chief Executive Officer

                                       12
<PAGE>

      transactions contemplated hereby to the extent such legal fees do not
      exceed $15,000 in the aggregate, plus the disbursements of such legal
      counsel.

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

PURCHASER:

CUMBERLAND PARTNERS
by Cumberland Associates LLC, as its investment advisor

By:________________________________

c/o Cumberland Associates LLC
1114 Avenue of the Americas
New York, NY 10036

13-6319596
Social Security or Taxpayer
Identification Number of Purchaser

$1,150,000                                              $1,150,000
Principal Amount of Notes Being Subscribed For          Purchase Price

                                        MILESTONE SCIENTIFIC INC.

                                        By:_____________________________________
                                             Leonard Osser, Chairman, and
                                             Chief Executive Officer

                                       12
<PAGE>

      transactions contemplated hereby to the extent such legal fees do not
      exceed $15,000 in the aggregate, plus the disbursements of such legal
      counsel.

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

PURCHASER:

LONGVIEW PARTNERS
by Cumberland Associates LLC, as its investment advisor

By:________________________________

c/o Cumberland Associates LLC
1114 Avenue of the Americas
New York, NY 10036

13-3410543
Social Security or Taxpayer
Identification Number of Purchaser

$125,000                                                $125, 000
Principal Amount of Notes Being Subscribed For          Purchase Price

                                        MILESTONE SCIENTIFIC INC.

                                        By:_____________________________________
                                              Leonard Osser, Chairman, and
                                              Chief Executive Officer

                                       12
<PAGE>

      transactions contemplated hereby to the extent such legal fees do not
      exceed $15,000 in the aggregate, plus the disbursements of such legal
      counsel.

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

PURCHASER:

LONGVIEW PARTNERS B, L.P.
by Cumberland Associates LLC, as its investment advisor

By: _______________________________

c/o Cumberland Associates LLC
1114 Avenue of the Americas
New York, NY 10036

13-3911087
Social Security or Taxpayer
Identification Number of Purchaser

$165,000                                                $165,000
Principal Amount of Notes Being Subscribed For          Purchase Price

                                        MILESTONE SCIENTIFIC INC.

                                        By:_____________________________________
                                             Leonard Osser, Chairman, and
                                             Chief Executive Officer

                                       12
<PAGE>

      transactions contemplated hereby to the extent such legal fees do not
      exceed $15,000 in the aggregate, plus the disbursements of such legal
      counsel.

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

PURCHASER:

LONGVIEW PARTNERS C, L.P.
by Cumberland Associates LLC, as its investment advisor

By: _______________________________

c/o Cumberland Associates LLC
1114 Avenue of the Americas
New York, NY 10036

13-3970907
Social Security or Taxpayer
Identification Number of Purchaser

$60,000                                                 $60,000
Principal Amount of Notes Being Subscribed For          Purchase Price

                                          MILESTONE SCIENTIFIC INC.

                                          By: __________________________________
                                                Leonard Osser, Chairman, and
                                                Chief Executive Officer

                                       12
<PAGE>

      transactions contemplated hereby to the extent such legal fees do not
      exceed $15,000 in the aggregate, plus the disbursements of such legal
      counsel.

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

PURCHASER:

___________________________________
LEONARD OSSER

Milestone Scientific Inc.
220 South Orange Avenue
Livingston, New Jersey 07039

###-##-####
Social Security or Taxpayer
Identification Number of Purchaser

$250,000                                                $250,000
Principal Amount of Notes Being Subscribed For          Purchase Price

                                        MILESTONE SCIENTIFIC INC.

                                        By:_____________________________________
                                              Leonard Osser, Chairman, and
                                              Chief Executive Officer

                                       12

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