Document:

Exhibit A 

Asset Purchase Agreement 

        This ASSET
PURCHASE AGREEMENT (this “Agreement”) dated as of July 28, 2003 by and among the
Siegel Family Revocable Trust (the “Trust”) and Medical Technology Systems,
Inc., a Delaware corporation (the “Company”). The Trust and the Company are
collectively referred to as the “Parties.” 

Background 

        The
Trust licenses the Patent Rights (as defined below) to the Company pursuant to the License
Agreement (as defined below). The Company currently owes the Trust $348,000 in royalty
payments due under the License Agreement. The Trust desires to sell to the Company, and
the Company desires to purchase, the Patent Rights (as defined below) from the Trust in
exchange for the payment by the Company to the Trust of the Purchase Price (as defined
below), all in accordance with the terms and conditions set forth in this Agreement. 

        In
consideration of the mutual covenants and agreements set forth below, the Parties agree as
follows: 

Terms 

         1.       
          Definitions.   For the purposes of this Agreement, the following
          terms shall have the following meanings: 

               
            (a)     “Devices” shall mean the equipment and supplies covered by the Patent
          Rights. 

               
             (b)     “Know how” shall mean all operating details and instructions, both
          written and oral, of the Trust for the manufacture, use, promotion and sale of
          the Devices. 

               
              (c)       
          “License Agreement” means that certain License Agreement, dated as of
          October 14, 1986, by and between the Trust and DRG Consultants, Inc.
          (“DRG”) (which was assigned by DRG to the Company on October 14, 1986
          pursuant to an Agreement and Plan of Reorganization between the Company and
          DRG), as amended on September 2, 1990 pursuant to an Agreement between the
          Company and the Trust. 

               
             (d)       
          “Patent Rights” shall mean (i) the patents and patent applications set
          forth on the Patent Rights Schedule owned or controlled by the Trust and
          related to equipment and supplies used in packaging medication in punch cards
          (which is the basis of the equipment and processes which the Company uses and
          sells in its business), and (ii) “know how”. 

               
             (e)       
          “Securities Act” means the Securities Act of 1933, as amended and the
          regulations promulgated thereunder. 

               
             (f)       
          “Security Interest” means any mortgage, pledge, lien, encumbrance,
          charge, or other security interest, other than (a) mechanic’s,
          materialmen’s, and similar liens, (b) liens for taxes not yet due and
          payable or for taxes that the taxpayer is contesting in good faith through
          appropriate proceedings, (c) purchase money liens and liens securing rental
          payments under capital lease arrangements, and (d) other liens arising in the
          ordinary course of business and not incurred in connection with the borrowing of
          money. 

2.

         2.       
          Purchase and Sale. Upon the terms and subject to the
          conditions of this Agreement, the Trust sells to the Company, and the Company
          purchases from the Trust, the Patent Rights, including all of the Trust’s
          entire right, title and interest, in all countries throughout the world,
          including the rights to claim convention priority, in and to any and all
          improvements disclosed in the Patents Rights and the right to sue for past,
          present and future patent infringement of the Patent Rights. 

         3.       
          Purchase Price and Forgiveness of Royalties. Simultaneous
          with the execution of this Agreement, the Company is paying to the Trust
          $1,480,000 (the “Purchase Price”) by delivery of a promissory note
          (the “Note”) in substantially the form attached to this Agreement as
          Exhibit A in the aggregate principal amount of $1,480,000. In
          consideration for the payment by the Company of the Purchase Price to the Trust,
          the Trust forgives the $348,000 in royalty payments currently due from the
          Company to the Trust under the License Agreement. 

         4.       
          Company’s Closing Deliveries and Obligations.
          Simultaneous with the execution of this Agreement, the Company shall deliver to
          the Trust: 

               
             (a)       
          a certificate representing the Note; and 

               
             (b)       
          an Assignment and Assumption Agreement, in the form attached as Exhibit B
          (the “Assignment and Assumption Agreement”), executed by the Company. 

         5.       
          Trust’s Closing Deliveries. Upon the execution of this
          Agreement, the Trust shall deliver to the Company the Assignment and Assumption
          Agreement, executed by the Trust. 

         6.       
          Representations and Warranties of the Company. The Company makes
          the following representations and warranties to the Trust: 

               
             (a)       
          Existence. The Company is duly organized, validly existing and in good
          standing under the laws of the State of Delaware, and is duly qualified to do
          business and is in good standing under the laws of each jurisdiction where such
          qualification is required. 

               
             (b)       
          Authorization. The Company has all necessary corporate power and has
          taken all necessary corporate action required for the due authorization,
          execution, delivery and performance by the Company of this Agreement, the
          Company Transaction Documents (as defined below) and for the due authorization,
          issuance and delivery of the Note. 

               
             (c)       
          No Breach. The execution, delivery and performance of this Agreement and
          any other agreement or instrument executed by the Company in connection with
          this Agreement, including without limitation, the Note (the “Company
          Transaction Documents”), constitutes a valid and binding obligation of the
          Company, enforceable in accordance with its terms subject to the effect of
          bankruptcy, insolvency, reorganization or other similar laws and to general
          principles of equity (whether considered in proceedings at law or in equity).

2.

      The execution and delivery by the Company of the Company
          Transaction Documents to which the Company is a party, the issuance of the Note under this Agreement,
          and the fulfillment of and compliance with the respective terms of this
          Agreement by the Company, do not and shall not (i) conflict with or result
          in a breach of the terms, conditions or provisions of, (ii) constitute a
          default under, (iii) result in the creation of any lien, security interest,
          charge or encumbrance upon the Company’s capital stock or assets pursuant
          to, (iv) give any third party the right to modify, terminate or accelerate
          any obligation under, (v) result in a violation of, or (vi) require
          any authorization, consent, approval, exemption or other action by or notice or
          declaration to, or filing with, any court or administrative or governmental body
          or agency pursuant to the Company’s certificate of incorporation or bylaws,
          or any law, statute, rule or regulation to which the Company is subject, or any
          agreement, instrument, order, judgment or decree to which the Company is
          subject. 

               
             (d)       
          Governmental Consent, etc. No permit, consent, approval or authorization
          of, or declaration to or filing with, any governmental authority (except as may
          be required under federal and state securities laws) is required in connection
          with the execution, delivery and performance by the Company of this Agreement or
          the other agreements contemplated by this Agreement, or the consummation by the
          Company of any other transactions contemplated by this Agreement, except as
          expressly contemplated in this Agreement or in the Schedules to this Agreement. 

         7.       
          Representations and Warranties of the Trust. The Trust makes the
          following representations and warranties to the Company. 

               
             (a)       
          Authority. The execution, delivery and performance of this Agreement and
          any other agreement or instrument executed by the Trust in connection with this
          Agreement (the “Trust Transaction Documents”), constitutes a valid and
          binding obligation of the Trust. 

               
             (b)       
          No Breach. The execution, delivery and performance by the Trust of the
          Trust Transaction Documents to which the Trust is a party and the fulfillment of
          and compliance with the respective terms of this Agreement by the Trust, do not
          and shall not (i) conflict with or result in a breach of the terms,
          conditions or provisions of, (ii) constitute a default under,
          (iii) result in the creation of any lien, security interest, charge or
          encumbrance upon the Trust’s assets pursuant to, (iv) give any third
          party the right to modify, terminate or accelerate any obligation under,
          (v) result in a violation of, or (vi) require any authorization,
          consent, approval, exemption or other action by or notice or declaration to, or
          filing with, any court or administrative or governmental body or agency, or any
          law, statute, rule or regulation to which the Trust is subject, or any
          agreement, instrument, order, judgment or decree to which the Trust is subject. 

               
             (c)       
          Title to Assets. Except for the rights granted to the Company pursuant to
          the License Agreement, the Trust has exclusive ownership of, free and clear of
          Security Interests, with full right to use, sell, license, sublicense, dispose
          of, and bring actions for infringement of, or possesses licenses or other rights
          to use, the Patent Rights. 

3.

               
             (d)       
          Intellectual Property. 

              
                         (i)
               The Patent Rights do not infringe any patent, trademark, copyright,
         trade secret rights of any third parties or any other intellectual property rights of any
          third parties. The Trust has not received written notice from any third party
          asserting that the Patent Rights are invalid or unenforceable. 

              
                         (ii)
               
          Except for the license granted to the Company pursuant to the License Agreement,
          the Trust has not licensed or otherwise granted permission to use the Patent
          Rights to any person or entity, other than the Trust. 

              
                         (iii)
               
          There are no actions, suits, proceedings, orders, investigations or claims
          pending or, to the Trust’s knowledge, threatened against or affecting the
          Trust, or pending or threatened by the Trust against any third party, at law or
          in equity, or before or by any governmental department, commission, board,
          bureau, agency or instrumentality in connection with or related to the Patent
          Rights. 

              
                         (iv)
               
          The Trust hereby covenants that no assignment, sale, agreement or encumbrance
          has been or will be made or entered into which would conflict with this
          Agreement. 

               
             (e)       
          Investment. The Trust is acquiring the Note for its own account for the
          purpose of investment and not with a view to or for sale in connection with any
          distribution of the Note. The Trust further represents that it understands that
          the Note has not been registered under the Securities Act by reason of its
          issuance in a transaction exempt from the registration requirements of the
          Securities Act. The Trust represents that it understands that the Note may only
          be transferred pursuant to a registration statement or an exemption from
          registration and there is not currently any public market for the Note. The
          Trust is an Accredited Investor (as defined by the Securities Act Rule 501(a))
          and is able to bear the economic risk and lack of liquidity inherent in holding
          the Note. 

               
             (f)       
          Investigation by the Trust. The Trust has conducted its own independent
          investigation, review and analysis of the business, operations, assets,
          liabilities, results of operations, financial condition, and prospects of the
          Company which included the review of the Company’s most recent Form 10-K
          filed with the Securities and Exchange Commission on June 30, 2003. In entering
          into this Agreement, the Trust acknowledges that it has relied solely upon its
          own knowledge, investigation, review and analysis of the Company, and not on any
          representations of the Company or its representatives. 

         8.       
          Restrictive Legend. The certificate representing the Note subject
          to this Agreement shall have the following legends attached: 

	 	
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAW. THESE
SECURITIES MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED IN ANY MANNER ABSENT EITHER
REGISTRATION UNDER THE ACT AND UNDER EVERY APPLICABLE STATE SECURITIES LAW, OR AN OPINION
OF COUNSEL SATISFACTORY TO THE ISSUER AND ITS COUNSEL THAT REGISTRATION UNDER THOSE LAWS
IS NOT REQUIRED. 

4.

The Trust irrevocably appoints and
designates the person who is from time to time the Secretary of the Company as such
person’s attorney-in-fact, for and on its behalf, to cause the legend described above
to be placed on the certificate representing the Note. 

         9.       
          Indemnification. Subject to Section 10: 

               
             (a)    
          Indemnification of the Trust. The Company shall indemnify the Trust and
          hold the Trust harmless from and against any and all damages, losses,
          deficiencies, actions, demands, judgments, costs and expenses (including
          reasonable attorneys’ and accountants’ fees) (collectively,
          “Losses”) of or against the Trust resulting from (i) any
          misrepresentation or breach of warranty in this Agreement or (ii) any
          nonfulfillment of any agreement or covenant contained in this Agreement. 

               
             (b)    
          Indemnification of the Company. The Trust shall indemnify the Company and
          its officers, directors and shareholders (collectively, the “Company
          Indemnified Parties”) and hold each of the Company Indemnified Parties
          harmless from and against any and all Losses of or against the Company
          Indemnified Parties resulting from (i) any misrepresentation or breach of
          warranty in this Agreement on the part of the Trust or (ii) any
          nonfulfillment of any agreement or covenant contained in this Agreement. 

               
             (c)    
          Procedure Relative to Indemnification. 

              
                         (i)
               
          In the event that any Party shall claim that it is entitled to be indemnified
          pursuant to the terms of this Section 9 (the “Claiming
          Party”), the Claiming Party shall so notify the Party against which the
          claim is made (the “Indemnifying Party”) in writing of such claim
          within thirty days after the Claiming Party receives notice of any action,
          proceeding, demand or assessment or otherwise has received notice of any claim
          of a third party that may reasonably be expected to result in a claim for
          indemnification by the Claiming Party against the Indemnifying Party;
          provided, however, that failure to give such notification shall
          not affect the indemnification provided hereunder except to the extent the
          Indemnifying Party shall have been actually prejudiced as a result of such
          failure. Such notice shall specify the breach of representation, warranty,
          agreement or covenant claimed by the Claiming Party and the Losses incurred by,
          or imposed upon the Claiming Party on account thereof. If such Losses are
          liquidated in amount, the notice shall so state and such amount shall be deemed
          the amount of the claim of the Claiming Party. If the amount is not liquidated,
          the notice shall so state and in such event a claim shall be deemed asserted
          against the Indemnifying Party on behalf of the Claiming Party, but no payment
          shall be made on account thereof until the amount of such claim is liquidated
          and the claim is finally determined. 

              
                         (ii)
               
          The following provisions shall apply to any claim of the Claiming Party which is
          based upon (A) a suit, action or proceeding filed or instituted by any
          third party, or (B) any form of proceeding or assessment instituted by any
          governmental entity. 

5.

              
                         
                     (1)    
          If any third party shall notify any Claiming Party with respect to any matter (a
          “Third Party Claim”) which may give rise to a claim of indemnification
          from the Indemnifying Party under this Section 9, then the Claiming Party shall
          promptly notify the Indemnifying Party thereof in writing; provided,
          however, that no delay on the part of the Claiming Party in notifying the
          Indemnifying Party shall relieve the Indemnifying Party from any obligation
          hereunder unless (and then solely to the extent) the Indemnifying Party is
          prejudiced by such delay. 

              
                         
                     (2)    
          The Indemnifying Party will have the right to assume the defense of the Third
          Party Claim with counsel of its choice reasonably satisfactory to the Claiming
          Party at any time within 15 days after the Claiming Party has given notice of
          the Third Party Claim; provided, however, that the Indemnifying Party
          must conduct the defense of the Third Party Claim actively and diligently
          thereafter in order to preserve its rights in this regard; and provided
          further that the Claiming Party may retain separate co-counsel at its sole
          cost and expense and participate in the defense of the Third Party Claim. 

              
                         
                     (3)    
          So long as the Indemnifying Party has assumed and is conducting the defense of
          the Third Party Claim in accordance with Section 9(c)(ii)(2) above, (A) the
          Indemnifying Party will not consent to the entry of any judgment or enter into
          any settlement with respect to the Third Party Claim without the prior written
          consent of the Claiming Party (not to be withheld unreasonably) unless the
          judgment or proposed settlement involves only the payment of money damages by
          the Indemnifying Party and does not impose an injunction or other equitable
          relief upon the Claiming Party and (B) the Claiming Party will not consent to
          the entry of any judgment or enter into any settlement with respect to the Third
          Party Claim without the prior written consent of the Indemnifying Party (not to
          be withheld unreasonably). 

              
                         
                     (4)    
          In the event the Indemnifying Party does not assume and conduct the defense of
          the Third Party Claim in accordance with Section 9(c)(ii)(2) above, however, (A)
          the Claiming Party may defend against, and consent to the entry of any judgment
          or enter into any settlement with respect to, the Third Party Claim in any
          manner it reasonably may deem appropriate (and the Claiming Party need not
          consult with, or obtain any consent from, the Indemnifying Party in connection
          therewith) and (B) the Indemnifying Party will remain responsible for any Losses
          the Claiming Party may suffer resulting from, arising out of, relating to, in
          the nature of, or caused by the Third Party Claim to the fullest extent provided
          in this Section 9. 

               
             (d)    
          Determination of Amount of Claim for Indemnification. In determining the
          amount of any and all Losses under this Section 9, such amount shall be net
          of insurance proceeds actually received on account of such Loss. 

         10.       
          Survival of Representations and Warranties. All
          representations and warranties contained in this Agreement or made in writing by
          any party in connection with this Agreement shall survive the execution and
          delivery of this Agreement and the consummation of the transactions contemplated
          by this Agreement for a period of three years (and thereafter shall be of no
          force or effect), regardless of any investigation made by the Trust. 

         11.       
          Successors and Assigns. This Agreement shall be binding
          upon and inure to the benefit of the Parties and their respective successors and
          permitted assigns. No party may assign either this Agreement or any of its
          rights, interests, or obligations under this Agreement without the prior written
          approval of the other party. 

6.

         12.       
          Governing Law. This Agreement shall be governed by and
          construed in accordance with the domestic laws of Florida without giving effect
          to any choice or conflict of law provision or rule (whether of Florida or any
          other jurisdiction) that would cause the application of the laws of any
          jurisdiction other than Florida. 

         13.       
          Counterparts. This Agreement may be executed in one or more
          counterparts, each of which shall be deemed an original but all of which
          together shall constitute one and the same instrument. 

         14.       
          Notice. All notices and other communications made pursuant
          to this Agreement shall be in writing and will be sufficient if delivered by
          hand, registered or certified mail (postage prepaid), or by overnight delivery
          service, to the persons at the address set forth below (or at such other address
          as may be provided in a notice delivered pursuant to this Section 14), and shall
          be deemed effective as of the date delivered. 

      If
to the Company: If to the Siegel Family Revocable Trust

	 Medical Technology Systems, Inc. 	 	Siegel Family Revocable Trust
	
	 	

	 Medical Technology Systems, Inc. 	 	Siegel Family Revocable Trust
	12920 Automobile Blvd.	 	 10043 Windtree Boulevard
	 Clearwater, Florida 33762   	 	Seminole, Florida 33772
	 Attention:  Todd Siegel	 	 Attention:  Todd Siegel, as Trustee of Siegel Family  Revocable Trust
	 Phone:  (727) 576-6311   	 	  Phone:  (727) 576-6311
	 Facsimile:  (727) 540-0547  	 	 Facsimile:  (727) 573-1100

         15.       
          Amendment or Waiver. No amendment of any provision of this
          Agreement shall be valid unless the same shall be in writing and signed by each
          of the Parties. No waiver by either party to this Agreement of any default,
          misrepresentation, or breach of warranty or covenant under this Agreement,
          whether intentional or not, shall be deemed to extend to any prior or subsequent
          default, misrepresentation, or breach of warranty or covenant under this
          Agreement or affect in any way any rights arising by virtue of any prior or
          subsequent such occurrence. 

         16.       
          Entire Agreement. This Agreement constitutes the entire
          agreement between the Parties and supersedes any prior understandings,
          agreements, or representations by or between the Parties, written or oral, to
          the extent they related in any way to the subject matter of this Agreement,
          including, without limitation, the License Agreement. 

         17.    
           Headings. The paragraph headings contained in this
          Agreement are inserted for convenience only and shall not affect in any way the
          meaning or interpretation of this Agreement. 

         18.       
          Severability. Any term or provision of this Agreement that
          is invalid or unenforceable in any situation in any jurisdiction shall not
          affect the validity or enforceability of the remaining terms and provisions of
          this Agreement or the validity or enforceability of the offending term or
          provision in any other situation or in any other jurisdictin. 

7.

         19.       
          Expenses. Except as the Parties may otherwise mutually
          agree, each of the Parties shall bear its own costs and expenses (including
          legal fees and expenses) incurred in connection with this Agreement and the
          transactions contemplated by this Agreement. Notwithstanding the foregoing
          sentence, all sales, transfer, documentary and similar taxes, fees and
          assessments, if any, payable in connection with the sale, conveyance,
          assignment, transfers and deliveries made by the Trust or the Company in
          connection with this Agreement, including, without limitation, the issuance of
          the Note, shall be paid by the Company. 

8.

        IN
WITNESS WHEREOF, the Parties have executed this Agreement effective as of date first
written above. 

		THE COMPANY	
	 	 	 
		MEDICAL TECHNOLOGY SYSTEMS, INC.	
	 	 	 	 
	 	By:	
	 
	 	 	 	 
	 	Name:	
	 
	 	 	 	 
	 	Title:	
 
	 	 	 	 
		THE TRUST:	
	 	 	 	 
	 	
	
	 
		Todd Siegel, as Trustee of the Siegel Family Revocable Trust	

9.

EXHIBIT A 

Company’s
Promissory Note 

PROMISSORY NOTE 

	$1,480,000	 	July 28, 2003

 

 

FOR VALUE RECEIVED the undersigned,
Medical Technology Systems, Inc., a Delaware corporation, with an address of 12920
Automobile Blvd., Clearwater, Florida 33762 (the “Debtor”), promises to pay to
the Siegel Family Revocable Trust (the “Holder”) at 10043 Windtree Boulevard,
Seminole, Florida 33772 or at such other address the Holder may designate, the principal
sum of One Million Four Hundred Eighty Thousand dollars ($1,480,000) plus interest on the
outstanding principal balance at the rate of 6.25% per annum, from the date of this Note
until payment is made in full. 

        The
principal of this Note shall be payable in sixty equal payments of $28,784.92
(which includes accrued interest), payable monthly, beginning on August 1, 2003 and
ending on August 1, 2008. 

        This
Note may be prepaid at any time, in full or in part, without penalty or premium. An event
of default will occur under this Note if the Debtor fails to make a payment before 5:00
p.m., eastern time, on the day such payment is due. An event of default under this Note
will become a default if not cured within ten days of notice of such event of default is
conveyed by the Holder to the Debtor. In the case of a default, the Holder may declare the
entire principal amount of this Note, including accrued interest, immediately due and
payable. The Debtor shall pay all costs of collection, including reasonable attorneys fees
at all levels of proceedings. 

        The
Debtor and any other party liable for the payment of any amount due under this Note waive
presentment, protest and demand, notice of protest, and dishonor. The Debtor and any other
party liable for the payment of this Note expressly consent to any extensions and
renewals, in whole or in part, and all delays in time of performance which the Holder may
grant at any time and from time to time, without limitation and without any notice or
further consent of such persons. Neither party shall assign this Note without the written
consent of the other party and such consent shall not be unreasonably withheld. 

        No
failure by the Holder to exercise any right or remedy shall be deemed to be a waiver or
release of such right or remedy, and any waiver or release may be effected only through a
written document executed by the Holder and then only to the extent specifically recited
in such document. 

        This
Note shall be governed by and construed under the laws of Florida, without regard to
principles of conflict of laws. 

	 	MEDICAL TECHNOLOGY SYSTEMS, INC.	 
	 	 	 	 
	 	By:	
	 
	 	 	 	 
	 	Name:	
	 
	 	 	 	 
	 	Title::	
	 

EXHIBIT B 

Assignment and Assumption
Agreement  

ASSIGNMENT AND
ASSUMPTION AGREEMENT 

        THIS ASSIGNMENT
AND ASSUMPTION AGREEMENT (this “Assignment”) is made and entered as of July 28,
2003 between the Siegel Family Revocable Trust (the “Trust”) and Medical
Technology Systems, Inc., a Delaware corporation (the “Company”). 

BACKGROUND 

        The
Company and the Trust are entering into an Asset Purchase Agreement (the “Asset
Purchase Agreement”), dated as of the date of this Assignment, whereby the Company is
purchasing from the Trust the Patent Rights. The Company and the Trust desire for the
Trust to assign the Patent Rights to the Company, and for the Company to accept such
assignment of the Patent Rights. All capitalized terms used but not otherwise defined
herein shall have the meaning ascribed to them in the Asset Purchase Agreement. 

        In
consideration of the foregoing and of the mutual covenants set forth in this Assignment
and other good and valuable consideration, the Parties agree as follows: 

TERMS 

         1.       
          Assignment by the Trust. The Trust transfers and assigns to the Company
          and its successors and assigns all of the Trust’s right, title and interest
          in and to all of the Patent Rights. 

         2.       
          Assumption by the Company. The Company accepts the assignment of the
          Trust’s right, title and interest in and to the Patent Rights. 

         3.       
          Further Assurances. It is the intention of the Parties that the Patent
          Rights shall be transferred by the Trust to the Company and accepted from the
          Trust, as provided in the Asset Purchase Agreement. The Parties therefore agree
          that each shall execute any additional documents that may hereafter reasonably
          be requested by the other in order to more fully to effectuate such transfer,
          assignment, and assumption. 

         4.       
          Governing Law. This Assignment shall be governed and controlled as to
          validity, enforcement, interpretation, construction, effect and in all other
          respects by the internal laws of Florida applicable to contracts made in
          Florida. 

         5.       
          Multiple Counterparts. This Assignment may be executed in any number of
          counterparts, each of which shall be deemed an original instrument. Facsimile
          copies of executed documents shall be deemed originals for all purposes. 

         6.       
          Binding Effect. This Assignment shall be binding upon and inure to the
          benefit of the Parties and their successors and assigns. Except for the Asset
          Purchase Agreement and the other closing documents executed by the Trust and the
          Company pursuant to it, this Assignment records the entire understanding between
          the parties regarding the assignment of the Patent Rights and supersedes any
          previous or contemporaneous agreement, understanding, or representation, oral or
          written, by either of them. 

        IN
WITNESS WHEREOF, the Parties have executed this Assignment on the date first above
written. 

		THE COMPANY	
	 	 	 
		MEDICAL TECHNOLOGY SYSTEMS, INC.	
	 	 	 	 
	 	By:	
	 
	 	 	 	 
	 	Name:	
	 
	 	 	 	 
	 	Title:	
 
	 	 	 	 
		THE TRUST:	
	 	 	 	 
	 	
	
	 
		Todd Siegel, as Trustee of the Siegel Family Revocable Trust	

2.

Patent Rights
Schedule 

	Patent Description	 	U.S. Patent No.	 	Issue Date	 
	
	 	
	 	
	 
	1.	Medication Blister Card	 	DES 306,825	 	03/27/90	 
	2.	Multi-Cavity Medication Card Crusher (Deblister Machine)	 	4,694,996      
            	 	09/22/87	 
	3.	Dedicated Multi-Cavity Dispenser for Solids (MTS 300)	 	4,834,264           	 	05/30/89	 
	4.	Slideable Dispenser for Solids (MTS 300) (Canadian)	 	1,266,634           	 	03/13/90	 
	5.	Sealing Apparatus (MTS 300)	 	4,776,150           	 	10/11/88	 
	6.	Medication Dispensing Identifier Method	 	4,730,849           	 	03/15/88	 
	7.	Medication Dispensing Identifier System	 	4,732,411           	 	03/22/88	 
	8.	Medication Compliance Aid for Unit Dose Packaging (Gordon)	 	4,617,557           	 	10/14/86	 

S11-1EMPLOYMENT AGREEMENT  

        This agreement, effective as of July 1, 2003
(the “Agreement”) is made by and between MEDICAL TECHNOLOGY SYSTEMS, INC., a Delaware corporation
(the “Company”) , and TODD E. SIEGEL, a resident of the State of Florida (the “Executive”).

BACKGROUND  

        The
Company desires to continue to obtain the benefit of services by the Executive, and the
Executive desires to continue to render services to the Company. 

        The
Compensation Committee of the Board of Directors of the Company (the “Board”)
has determined that it is in the Company’s best interest and that of its stockholders
to recognize the substantial contribution that the Executive has made and is expected to
make in the future to the Company’s business and to continue to retain his services
in the future. 

        Accordingly,
in consideration of the mutual covenants and representations contained set forth below,
the Company and the Executive agree as follows: 

TERMS  

     	1.	 	Employment 

     	 	a. 	
          The Executive agrees to accept employment with the Company or one or more of the
          Company’s subsidiary corporations to render the services specified in this
          Agreement upon the terms and conditions and for the compensation provided in
          this Agreement. All compensation paid to the Executive by the Company or any
          subsidiary of the Company, and all benefits and perquisites received by the
          Executive from the Company or any of its subsidiaries, will be aggregated in
          determining whether the Executive has received the compensation and benefits
          provided for herein. 

     	 	b. 	
          Term. The term (the “Term”) of this contract shall commence on
          July 1, 2003, and shall continue without interruption until March 31, 2008. 

     	2.	  	
          Duties. 

     	 	a. 	
          General Duties. The Executive shall serve as President and Chief
          Executive Officer of the Company and shall continue to serve in those positions,
          with duties and responsibilities that are customary for such executives
          including, without limitation, ultimate responsibility for managing the Company,
          subject to the authority of the Board. 

     	 	b. 	
          Full Time Employment. During the term of this Agreement and excluding any
          periods of vacation, family or sick leave or holidays to which the Executive is
          entitled, the Executive shall devote his full business time and energy to the
          business, affairs and interests of the Company and its subsidiaries, and matters
          related thereto, and shall use his reasonable commercial efforts and ability to
          promote the interests of the Company and its subsidiaries. The Executive will
          diligently endeavor to promote the business, affairs and interests of the
          Company and its subsidiaries and perform services contemplated by this Agreement
          in accordance with the policies established by the Board from time to time. 

     	 	c. 	
          Certain Permissible Activities. The Executive may serve as a director or
          in any other capacity of any business enterprise, including an enterprise whose
          activities may involve or relate to the business of the Company or any of its
          subsidiaries but only if such service is expressly approved by the Company in
          writing. The Executive may (i) make and manage personal business investments of
          his choice, (ii) teach at educational institutions and deliver lectures, and
          (iii) serve in any capacity with any civic, educational or charitable
          organization, or any governmental entity or trade association, in each such case
          without seeking or obtaining approval by the Company so long as such activities
          and service do not materially interfere or conflict with the performance of his
          duties hereunder. It is agreed that to the extent that the Company shall have
          approved any service of the Executive pursuant to the first sentence of this
          Section 3(c) prior to a Change in Control Date (as defined in Section 7 below),
          or to the extent that the Executive may have engaged in activities pursuant to
          the second sentence of this Section 3(c) prior to such Change in Control Date,
          the continued conduct of such activities or the conduct of activities during the
          thirty-six months subsequent to such Change in Control Date shall be permissible
          and not in violation of any provisions of this Agreement and such Company
          approval may not be revoked or limited in any material respect during the
          thirty-six months following such Change in Control Date. 

     	 	3. 	
          Compensation and Expenses. 

     	 	a. 	
          Base Salary. For the services of the Executive to be rendered under this
          Agreement, the Company will pay the Executive an annual base salary (the
          “Base Salary”) as follows: 

          	 	(i) 	
               For the period July 1, 2003 through March 31, 2004, the amount of $255,000; 

          	 	(ii) 	
               For the period April 1, 2004 through March 31, 2005, the amount of $265,200; 

          	 	(iii) 	
               For the period April 1, 2005 through March 31, 2006, the amount of $275,808; 

          	 	(iv) 	
               For the period April 1, 2006 through March 31, 2007, the amount of $286,840; and 

          	 	(v) 	
                For the period April 1, 2007 through March 31, 2008, the amount of $298,313. 

          	 	
               Provided, however, that such Base Salary shall be pro rated accordingly over the time period that
               the Executive performs services under this Agreement in any calendar year during which this
               Agreement shall terminate before March 31st of such year. 

        The
Company shall pay the Executive his Base Salary in equal installments no less than
semi-monthly. 

               	 	b. 	
                    Base Salary Adjustment. The Base Salary may not be decreased hereunder
                    during the term of this Agreement, but may be increased upon review by and
                    within the sole discretion of the Board. 

     2.

               	 	c. 	
                    Bonus. Executive shall be entitled to receive bonus compensation in
                    accordance with Exhibits A and B on such terms as recommended by the
                    Compensation Committee and approved by the Board. Exhibit A may be amended
                    annually in accordance with the Company’s bonus program. 

               	 	d. 	
                    Expenses. In addition to any compensation received pursuant to Section 3,
                    the Company will reimburse or advance funds to the Executive for all reasonable,
                    ordinary and necessary travel, educational, seminar, trade shows, YPO,
                    entertainment, and miscellaneous expenses incurred in connection with the
                    performance of his duties under this Agreement, provided that the Executive
                    properly accounts for such expenses to the Company in accordance with the
                    Company’s practices. Such reimbursement shall include travel, lodging and
                    food costs for Executive’s immediate family to the extent they accompany
                    Executive on business related travel. 

               	 	e. 	
                    Subsidiary and Affiliate Payments. In recognition of the fact that in the
                    course of the performance of his duties hereunder the Executive may provide
                    substantial benefits to the Company’s subsidiaries or affiliated companies,
                    the Executive and the Company may at any time and from time to time agree that
                    all or any portion of the compensation due the Executive under this Agreement
                    may be paid directly to the Executive by one or more of the Company’s
                    subsidiaries or affiliated companies. 

     	 	4. 	
          Benefits. 

     	 	a. 	
          Vacation. For each year during the Term during which the Executive is
          employed, the Executive shall be entitled to 20 vacation days (which shall
          accrue and vest, except set forth below on each April 1st) without loss of
          compensation or other benefits to which he is entitled under this Agreement. 

     	 	  	
         If the Executive is unable to take all of his vacation days during a year for which he
becomes vested, then the Executive, at his sole option, may elect (a) to carry over any
unused vacation to the next calendar year to be used solely in that next year or (b) to
receive an appropriate pro rata portion of his Base Salary corresponding to the year in
which the vacation days vested. 

     	 	  	
         The Executive shall take his vacation at such times as the Executive may select and the
        affairs of the Company or any of its subsidiaries or affiliates may permit.

     	 	b. 	
          Employee Benefit Programs. In addition to the compensation to which the
          Executive is entitled pursuant to the provisions of Section 3 of this Agreement,
          during the Term, the Executive will be entitled to participate in any stock
          option plan, stock purchase plan, pension or retirement plan, insurance or other
          employee benefit plan that is maintained at that time by the Company for its
          employees, including programs of life, disability, basic medical and dental,
          supplemental medical and dental insurance. 

	 	
Notwithstanding
any provision of this Agreement to the contrary, the Company shall not be obligated to
provide the Executive with any of the benefits contained in this Section 4 (b) if the
Executive, for any reason, is or becomes uninsurable with respect to coverage relating to
any such benefit(s).

     	 	c. 	
          Automobile Allowance. During the term of this Agreement, the Company
          shall pay Executive an additional $750.00 per month as an automobile allowance
          to be applied to any automobile expense incurred by Executive. 

     3.

     	 	d. 	
          Financial and Tax Planning. During the term of this Agreement, and as
          additional consideration hereunder, Executive shall be reimbursed for personal
          financial planning, tax preparation services and accounting and legal fees
          related to such financial and tax planning, up to a maximum of $3,000 per year. 

     	5.	 	
          Termination. 

     	 	a. 	
          Termination for Cause. The Company may terminate the Executive’s
          employment pursuant to this Agreement at any time for cause upon written
          notice. Such termination will become effective upon the giving of such notice.
          Upon any such termination for cause, the Executive shall have no right to
          compensation, bonus or reimbursement under Section 3 or to participate in any
          employee benefit programs or other benefits to which he may be entitled under
          Section 4 for any period subsequent to the effective date of termination. For
          purposes of this Agreement, the term “cause” shall mean: 

          	 	(i) 	
               the Executive’s conviction of a felony and all appeals with respect thereto
               have been extinguished or abandoned by the Executive; 

          	 	(ii) 	
               the Executive’s conviction of misappropriating assets or otherwise
               defrauding the Company or any of its subsidiaries or affiliates; 

          	 	(iii) 	
               a material breach by the Executive of any provision of this Agreement, after
               thirty (30) days written notice, and thirty days to materially cure such breach. 

     	 	b. 	
          Death or Disability. This Agreement and the Company’s obligations
          under this Agreement will terminate upon the death or disability of the
          Executive. For purposes of this Section 5(c), “disability” shall mean
          that for a period of six months in any twelve-month period the Executive is
          incapable of substantially fulfilling the duties set forth in this Agreement
          because of physical, mental or emotional incapacity resulting from injury,
          sickness or disease as determined by an independent physician mutually
          acceptable to the Company and the Executive. Upon any such termination upon
          death or disability, the Company will pay the Executive or his legal
          representative, as the case may be, his Base Salary (which may include any
          accrued, but unused vacation time) at such time pursuant to Section 3(a) through
          the date of such termination of employment (or, if terminated as a result of a
          disability, until the date upon which the disability policy maintained pursuant
          to Section 4 (b) (ii) begins payment of benefits) plus any other compensation
          that may be due and unpaid. In the event of death or disability of the
          Executive, any obligations that the Executive may owe the Company for repayment
          of loans or other amounts shall be forgiven. 

     	 	c. 	
          Voluntary Termination. Prior to the termination of this Agreement, the
          Executive may, on sixty days prior written notice to the Company, at any time
          terminate his employment. Upon any such termination, the Company shall pay the
          Executive his Base Salary at such time pursuant to Section 3(a) through the date
          of such termination of employment (which shall include any vested and accrued,
          but unused vacation time). 

     	 	d. 	
          Additional Severance Upon Triggering Event. Upon any event in which the
          Executive is terminated without cause (i.e., any reason other than death,
          disability or termination for cause), (a Triggering Event), the following shall
          occur immediately and without further notice or action by Executive: 

     4.

          	 	(i) 	
               All of the Company’s obligations under this Agreement to Executive shall
               accelerate and become immediately performable and due and payable except for
               salary for the balance of the term of this agreement, which shall become due and
               payable only to the extent set forth in Section (d)(ii). 

          	 	(ii) 	
               In addition to any and all other compensation to Executive under this Agreement,
               the Company shall pay to Executive an amount equal to 2.99 times the
               Executive’s base salary in the fiscal year of the Company next immediately
               preceding the fiscal year in which the triggering event occurs; 

          	 	(iii) 	
               At his option, notwithstanding the payment of the above items, Executive may
               terminate his obligations to the Company under this Agreement, including any
               loans payable to the Company; and 

               	 	(iv) 	
                    The Company shall immediately assign to Executive any life insurance policy
                    insuring Executive’s life. The Company shall, prior to the assignment,
                    satisfy the balance of all premiums owed on the assigned policies and shall
                    insure that the designated beneficiary is not changed. 

               	 	(v) 	
                    If any of the above benefits are deemed to violate Internal Revenue Code 280G
                    and related regulations thereunder, as amended, then any excess benefits will be
                    paid during the next tax year if permitted by applicable law. 

               	6.	  	
                    Restrictive Covenants. 

               	 	a. 	
                    Competition with the Companies. The Executive covenants and agrees that,
                    during the Term of this Agreement, the Executive will not, without the prior
                    written consent of Company, directly or indirectly (whether as a sole
                    proprietor, partner, stockholder, director, officer, employee or in any other
                    capacity as principal or agent) , compete with the Company. Notwithstanding this
                    restriction, Executive shall be entitled to invest in stock of other competing
                    public companies so long as his ownership is less than 5% of such company’s
                    outstanding shares. 

               	 	b. 	
                    Disclosure of Confidential Information. The Executive acknowledges that
                    during his employment he will gain and have access to confidential information
                    regarding the Company and its subsidiaries and affiliates. The Executive
                    acknowledges that such confidential information as acquired and used by the
                    Company or any of its subsidiaries or affiliates constitutes a special, valuable
                    and unique asset in which the Company or any of its subsidiaries or affiliates,
                    as the case may be, hold a legitimate business interest. All records, files,
                    materials and confidential informant (the “Trade Secrets”) obtained by
                    the Executive in the course of his employment with the Company shall be hereby
                    deemed confidential and proprietary and shall remain the exclusive property of
                    the Company or any of its subsidiaries or affiliates, as the case may be. The
                    Executive will not, except in connection with and as required by his performance
                    of his duties under this Agreement, for any reason use for his own benefit or
                    the benefit of any person or entity with which he may be associated, disclose
                    any Trade Secrets to any person, firm, corporation, association or other entity
                    for any reason or purpose whatsoever without the prior written consent of the
                    Board of Directors of the Companies, unless such information previously shall
                    have become public knowledge through no action by or omission of the Executive. 

     5.

               	 	c. 	
                    Subversion, Disruption or Interference. At no time during the term hereof
                    shall Executive, directly or indirectly, interfere, induce, influence, combine
                    or conspire with, or attempt to induce, influence, combine or conspire with, any
                    of the employees or sponsors of, or consultants to, the Company to terminate
                    their relationship with or compete or ally against the Company or any of its
                    subsidiaries or affiliates of the Company in the business in which the Company
                    or any one of its subsidiaries or affiliates is presently engaged. 

               	 	d. 	
                    Enforcement of Restrictions. The parties hereby agree that any violation
                    by Executive of the covenants contained in this Section 6 will cause irreparable
                    damage to the Company or any of its subsidiaries and affiliates and may, as a
                    matter of course, be restrained by process issued out of a court of competent
                    jurisdiction, in addition to any other remedies provided by law. 

               	 	7. 	
                    Change of Control. 

               	 	a. 	
                    For the purposes of this Agreement, a “Change of Control” shall be
                    deemed to have taken place if any person, other than the JADE Partnership or the
                    Siegel Family Revocable Trust, including a “group” as defined in
                    Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, becomes the
                    owner or beneficial owner of the Company’s securities, after the date of
                    this Agreement, having more than 50% of the combined voting power of the then
                    outstanding securities of the Company that may be cast for the election of
                    directors of the Company (other than as a result of an issuance of securities
                    specifically approved by Executive and specifically excluded from the provisions
                    of this Section 7 by subsequent written agreement of the Executive); provided,
                    however, that a Change of Control shall not be deemed to have occurred if the
                    person who becomes the owner of more than 50% of the combined voting power of
                    the Company is Todd E. Siegel or an entity (or entities) controlled by Todd E.
                    Siegel. 

               	 	b. 	
                    The Company and Executive agree that, if Executive is in the employ of the
                    Company on the date on which a Change of Control occurs (the “Change of
                    Control Date”) , the Company will continue to employ the Executive and the
                    Executive will remain in the employ of the Company for the period commencing on
                    the Change of Control Date and ending on the expiration of the Term, to exercise
                    such authority and perform such executive duties as are commensurate with the
                    authority being exercised and duties being performed by the Executive
                    immediately prior to the Change of Control Date. If after a Change of Control,
                    the Executive is requested, and, in his sole and absolute discretion, consents
                    to change his principal business location outside of Pinellas or Hillsborough
                    Counties, Florida, the Company will reimburse the Executive for his relocation
                    expenses, including without limitation, moving expenses, temporary living and
                    travel expenses for a time while arranging to move his residence to the changed
                    location, closing costs, if any, associated with the sale of his existing
                    residence and the purchase of a replacement residence at the changed location,
                    plus an additional amount representing a gross-up of any state or federal taxes
                    payable by Executive as a result of any such reimbursements. If the Executive
                    shall not consent to change his business location, the Executive may continue to
                    provide the services required of him under this Agreement in Pinellas County,
                    Florida and the Company shall continue to maintain an office for the Executive
                    at that location similar to the Company’s office prior to the Change of
                    Control Date. 

     6.

               	 	c. 	
                    During the remaining Term after the Change of Control Date, the Company will (i)
                    continue to honor the terms of this Agreement, including as to Base Salary and
                    other compensation set forth in Section 3, and (ii) continue employee benefits
                    as set forth in Section 4 at levels in effect on the Change of Control Date (but
                    subject to such reductions as may be required to maintain such plans in
                    compliance with applicable federal law regulating employee benefits). 

               	 	d. 	
                    If during the remaining Term on or after the Change of Control Date (i) the
                    Executive’s employment is terminated by the Company other than for cause
                    (as defined in Section 5), or (ii) there shall have occurred a material
                    reduction in Executive’s compensation or employment related benefits, or a
                    material change in Executive’s status, working conditions or management
                    responsibilities, or a material change in the business objectives or policies of
                    the Company and the Executive voluntarily terminates employment within sixty
                    days of any such occurrence, or the last in a series of occurrences, then the
                    Executive shall be entitled to receive, subject to the provisions of
                    subparagraphs (e) and (f) below, a lump-sum payment equal to 299% of
                    Executive’s current Base Salary in addition to any other compensation that
                    may be due and owing to the Executive under Section 3 and Section 4. 

               	 	e. 	
                    The amounts payable to the Executive under any other compensation arrangement
                    maintained by the Company which became payable, after payment of the lump-sum
                    provided for in paragraph (d), upon or as a result of the exercise by Executive
                    of rights which are contingent on a Change of Control (and would be considered a
                    “parachute payment” under Internal Revenue Code 280G and regulations
                    thereunder), shall be reduced to the extent necessary so that such amounts, when
                    added to such lump-sum, do not exceed 299% of the Executive’s Base Salary
                    (as computed in accordance with provisions of the Internal Revenue Code of 1986,
                    as amended and any regulations promulgated thereunder) for determining whether
                    the Executive has received an excess parachute payment. Any such excess amount
                    shall be deferred and paid in the next tax year. 

               	 	f. 	
                    In the event of a proposed Change in Control, the Company will allow the
                    Executive to participate in all meetings and related negotiations related. 

               	8.	  	
                    Assignability. The rights and obligations of the Company under this
                    Agreement shall inure to the benefit of and be binding upon the successors and
                    assigns of the Company, provided that such successor or assign shall acquire all
                    or substantially all of the assets and business of the Company. The
                    Executive’s rights and obligations under this Agreement may not be assigned
                    or alienated and any attempt to do so by the Executive will be void and
                    constitute a material breach hereunder. 

               	9.	  	
                    Indemnification. The Company and the Executive acknowledge that the
                    Executive’s service as an officer of the Company exposes the Executive to
                    risks of personal liability arising from, and pertaining to, the
                    Executive’s participation in the management of the Company. The Company
                    shall defend, indemnify and hold harmless the Executive from any actual cost,
                    loss, damages, attorneys fees, or liability suffered or incurred by the
                    Executive arising out of, or connected to, the Executive’s service as an
                    officer of the Company or any of its current, former, or future subsidiaries to
                    the fullest extent allowed by law. The Company will not have any obligation to
                    the Executive under this section for any loss suffered if the Executive
                    voluntarily pays, settles, compromises, confesses judgment for, or admits
                    liability with respect to without the approval of the Company. Within thirty
                    days after the Executive receives notice of any claim or action which may give
                    rise to the application of this section, the Executive shall notify the Company
                    in writing of the claim or action. The Executive’s failure to timely notify
                    the Company of the claim or action will relieve the Company from any obligation
                    to the Executive under this section. 

     7.

               	 	10. 	
                    Severability. If any provision of this Agreement otherwise is deemed to
                    be invalid or unenforceable or is prohibited by the laws of the state or
                    jurisdiction where it is to be performed, this Agreement shall be considered
                    divisible as to such provision and such provision shall be inoperative in such
                    state or jurisdiction and shall not be part of the consideration moving from
                    either of the parties to the other. The remaining provisions of this Agreement
                    shall be valid and binding and of like effect as though such provision were not
                    included. 

               	 	11. 	
                    Prior Employment Agreements. The Executive represents that he has not
                    executed any agreement with any previous Company which may impose restrictions
                    on his employment with the Company. 

 

               	 	12. 	
                    Notice. Notices given pursuant to the provisions of this Agreement shall
                    be sent by certified mail, postage prepaid, or by overnight courier, or
                    telecopier to the following addresses: 

     		 	
                     If to the Company: 

     		 	
                    Medical Technology Systems, Inc.
12920-M Automobile Blvd.
Clearwater, FL  34622

     		 	
                     If to the Executive: 

     		 	
                    Todd E. Siegel
10043 Windtree Blvd.
Seminole, FL  33772

        Either
party may, from time to time, designate any other address to which any such notice to it
or him shall be sent. Any such notice shall be deemed to have been delivered upon the
earlier of actual receipt or four days after deposit in the mail, if by certified mail. 

     	13.	  	
          Miscellaneous. 

 

     	 	a. 	
          Governing Law. This Agreement shall be governed by and construed and
          enforced in accordance with the laws Florida without giving effect to the
          conflict of laws rules thereof. 

 

     	 	b. 	
          Waiver/Amendment. The waiver by any party to this Agreement of a breach
          of any provision hereof by any other party shall not be construed as a waiver of
          any subsequent breach by any party. No provision of this Agreement may be
          terminated, amended, supplemented, waived or modified other than by an
          instrument in writing signed by the party against whom the enforcement of the
          termination, amendment, supplement, waiver or modification is sought. 

 

     	 	c. 	
          Attorney’s Fees. In the event any action is commenced to enforce any
          provision of this agreement, the prevailing party shall be entitled to
          reasonable attorneys fees, costs and expenses. 

     8.

     	 	d. 	
          Entire Agreement. This Agreement, and the attached Exhibits A and B,
          comprise the entire agreement between the Executive and the Company. This
          Agreement supersedes all prior agreements and understandings between the parties
          with respect to the subject matter hereof and may not be modified or terminated
          orally. No modification, termination, or attempted waiver shall be valid unless
          it is in writing and is executed by each of the parties. 

     	 	e. 	
          Counterparts. This Agreement may be executed in counterparts, all of
          which shall constitute one and the same instrument. 

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

						
	 	WITNESSES:	 	 	EXECUTIVE	 
	 	 	 	 	 	 
	 	
	
	 	
	 
	 	 	 	 	TODD E. SIEGEL	 
	 	Print Name:	
	 	 	 
	 	 	 	 	 	 
	 	
	
	 	 	 
	 	 	 	 	 	 
	 	Print Name:	
	 	 	 

	 	 	 	 	COMPANY	 
	 	 	 	 	 	 	 
	 	 	 	 	MEDICAL TECHNOLOGY SYSTEMS, INC.,	 
	 	
	
	 	a Delaware corporation	 
	 	 	 	 	 	 	 
	 	Print Name:	
	 	By:	
	 
	 	 	 	 	 	 	 
	 	
	
	 	Print Name:	
	 
	 	 	 	 	 	 	 
	 	Print Name:	
	 	As:	
	 

EXHIBIT A 

Annual Bonus 

The executive shall receive an annual
bonus determined as follows: 

     	1.	
          Annual base salary times 50% (“Bonus Base”). 

     	2.	
          Bonus Base times  * % of Bonus Base as provide below. 

     	 	•	
          The bonus compensation schedule shall be adjusted for each fiscal year no later
          than the first day of the new fiscal year. 

     	 	•	
          The annual bonus shall be payable no later than June 30th following
          the fiscal year ending March 31, 2003. The Company may at it option, elect to
          make payments prior to June 30 of any year. 

*As provided on attached schedule. 

EXHIBIT A 

Annual Bonus 

 FISCAL YEAR 2004 - BONUS COMPENSATION SCHEUDLE

	 	EBITDA $	 	% OF EBITDA	 	% OF BONUS BASE
	 	
	 	
		

				
	 	 	$7,381,352	 	120% and above	 	140%	 
	 	 	$7,073,796	 	115% - 119.9%	 	130%	 
	 	 	$6,766,240	 	110% - 114.9%	 	120%	 
	 	 	$6,458,683	 	105% - 109.9%	 	110%	 
	Budget EBITDA	 	$6,151,127	 	100% - 104.9%	 	100%	*
	 	 	$6,089,616	 	99% - 99.9%	 	98%	 
	 	 	$6,028,104	 	98%	 	95%	 
	 	 	$5,966,593	 	97%	 	80%	 
	 	 	$5,905,082	 	96%	 	70%	 
	 	 	$5,843,571	 	95%	 	60%	 
	 	 	$5,782,059	 	94%	 	50%	 
	 	 	$5,720,548	 	93%	 	40%	 
	 	 	$5,659,037	 	92%	 	30%	 
	 	 	$5,600,000	 	91%	 	25%	 

EXHIBIT B 

Long-Term Incentive
Bonus 

     	1.	
          Each executive will earn a long-term incentive bonus based upon the average
          return on capital achieved by the company over a three-year time period. 

     	2.	
          Return on capital is the percentage derived by dividing the net income available
          to common shareholders for each fiscal year by the total long-term capital
          invested in the company at the end of each fiscal year. 

     	3.	
          Long-term capital is the sum of (1) stockholders equity; and (2) total long-term
          debt, minus the amount borrowed on the revolving line of credit. 

     	4.	
          The amount of the long-term incentive bonus is determined based upon the
          following formula. 

     	 	
          (Annual Salary x 80%) x Percentage of Bonus Earned 

     	5.	
          Percentage of Bonus Earned is determined based upon the average return on
          capital achieved as follows: 

			
	Average ROC Achieved 	 	Percentage of Bonue Earned 
	
	 	

	16.0%-20.0%     
                        	 	25.0%
	21.0%	 	50.0%
	21.6%	 	55.0%
	22.2%	 	60.0%
	22.8%	 	65.0%
	23.4%	 	70.0%
	24.0%	 	75.0%
	24.6%	 	80.0%
	25.2%	 	85.0%
	25.8%	 	90.0%
	26.4%	 	95.0%
	
	 	

	27.0%	 	100.0% 
	 	 	 
	If 3-Year Average ROC Exceeds Target ROC  
	 	 	 
	27.6%	 	105.0%
	28.2%	  	110.0%
	28.8%	 	115.0%
	29.4%	 	120.0%
	30.0%	 	125.0%
	30.6%	 	130.0%
	31.2%	 	135.0%
	31.8%	 	140.0%
	32.4%	 	145.0%
	33.0%	 	150.0%

     	6.	
          The average ROC is determined at the end of each fiscal year and paid to the
          executive as follows: 

          	 	a. 	
               In the year ending March 31, 2004, one-third (1/3) of the LTIB earned shall be
               paid no later than June 30, 2004; one-third (1/3) no later than June 30, 2005;
               and one-third (1/3) no later than June 30, 2006. 

          	 	b. 	
               In the fiscal year ending March 31, 2005, one-half (1/2) on June 30, 2005 and
               one-half on June 30, 2006. 

          	 	c. 	
               In the fiscal year ending March 31, 2006, on hundred per cent (100%) on June 30,
               2006.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00054-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00054-of-00352.parquet"}]]