Document:

[GRAPHIC OMITTED]
                                    MILESTONE
                                   SCIENTIFIC

October 21, 2005

Windsor Technologies, LLC
8295 Orchard Road
Thomasville, PA 17364
Attn:  Gary De Bruin

                   Re: MILESTONE SCIENTIFIC INC. ("MILESTONE")

Dear Mr. De Bruin,

         This will confirm that Milestone has agreed to issue to Windsor
Technologies, LLC and that Windsor Technologies, LLC has agreed to accept from
Milestone 77,381 shares of common stock in payment of $130,000 as consideration
for services rendered and to be rendered to Milestone from October 1, 2005
through December 31, 2005.

         By signing this letter, you confirm that (i) you are an "accredited
investor" within the meaning of Rule 215 of the Rules and Regulations under the
Securities Act, and (ii) you have acquired the shares for investment and
acknowledge that the shares cannot be resold or otherwise disposed of until they
are registered under the Securities Act and any applicable state securities laws
or an exemption from registration is available.

         Since the shares will not be registered at the time of issuance, the
certificates representing the shares delivered to you will bear the following
legend:

         THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT
         BE SOLD, TRANSFERRED, HYPOTHECATED OR ASSIGNED EXCEPT PURSUANT TO AN
         EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR IN A TRANSACTION
         WHICH IS EXEMPT FROM REGISTRATION UNDER THE ACT.

         Please acknowledge your agreement and understanding of the above
provisions by signing and dating a copy of this letter and returning it to us by
facsimile and mail. The shares will be delivered to you promptly after receipt
of your acknowledgement.

                                                     Very truly yours,

                                                     MILESTONE SCIENTIFIC INC.

                                                     By: /s/ Rosaline Shau
                                                         ---------------------
                                                         Rosaline Shau
                                                         Chief Financial Officer

ACCEPTED AND AGREED TO THIS
21st DAY OF OCTOBER, 2005

Windsor Technologies, Inc.

/s/ Gary De Bruin
---------------------
By:  Gary De Bruin
Its: Managing Partner

--------------------------------------------------------------------------------
          220 South Orange Avenue, Livingston, NJ  07039 o Tel: 973.535.2717 o
                                Fax: 973.535.2829
                                 www.MileSci.comexv10w7

 

EXHIBIT 10.7

Summary of Executive Bonus Arrangements

(For Fiscal 2006)

	I.	 	Bonus Structure

	 	•	 	For the current year bonus, an executive’s on-target bonus objective is approved each
year by the compensation committee. Achievement of the bonus is based on four,
equally-weighted performance goals: 25% revenue (growth initiatives only), 25% Profit,
25% Cash (cash flow from operating and investing activities before changes in working
capital), 25% MBO (individual performance objectives); provided, however, that if the
growth revenue objective is not achieved at the 80% threshold level, the other three
objectives will be paid to a maximum of 50% of the target amounts.

	 	o	 	Financial Bonus Component split by quarter: 20% for each of the first three fiscal
quarters and 40% for the fourth quarter, in each case on a year-to-date basis.
	 
	 	o	 	2-break Financial Bonus formula:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	% of Bonus	 	 	 	 	 	 	 	 	 	 
	 	 	up to 1st	 	1st Break	 	% of Bonus up to	 	2nd Break	 	% of Bonus up to	 	% of Bonus at and
	 	 	Break	 	Point	 	2nd Break	 	Point	 	100% of Plan	 	after 100%
	Revenue

	 	 	0	%	 	80% of Plan
	 	15% + 2.5% for each
	 	90% of Plan
	 	60% + 2.5% for each
	 	100% + 1.0% for each
	 

	 	 	 	 	 	 	 	1% over 80%
	 	 	 	1% over 90%
	 	1% over 100%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Profit

	 	 	0	%	 	95% of Plan
	 	15% + 10.0% for each
	 	97.5% of Plan
	 	60% + 10.0% for each
	 	100% + 1.0% for each
	 

	 	 	 	 	 	 	 	1% over 95%
	 	 	 	1% over 97.5%
	 	1% over 100%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Cash

	 	 	0	%	 	90% of Plan
	 	15% + 5.0% for each
	 	95% of Plan
	 	60% + 5.0% for each
	 	100% + 1.0% for each
	 

	 	 	 	 	 	 	 	1% over 90%
	 	 	 	1% over 95%
	 	1% over 100%

	 	o	 	MBOs are annual, tied to the Company’s growth initiatives and consist of
1-6 objectives per executive, negotiated and agreed between the Chief Executive
Officer and executive based on the approved budget and business plan. The
Chief Executive Officer’s MBOs are the sum of the individual executives’ MBOs.

	 	•	 	Long-Term Bonus Pool for the three subsequent fiscal years (1/3 each) = current
year bonus as actually earned up to bonus pool of 40% of the on-target current year
bonus. Additional bonus pool dollars are added at the rate of $1 per $2 of
overachievement of the Profit target up to maximum of 100% of the actual current year
bonus.

	 	o	 	Long-Term Bonus payouts for each of the three years are tied to the 5-year
revenue plan (including acquisitions).

	 	o	 	Long-Term Bonus award formula: <75% of target gets 75% of plan (floor);
75-100% gets 75% + 1% for each 1% over 75%; 100-125% gets

 

 

100% + 1% for each 1%
over 100%; 125-150% gets 150% + 2% for each 1% over 125%; >150% gets 200%
(cap).

	 	o	 	Payout in three annual installments following each of the three performance
periods. One-half of the floor amount is paid in common stock, valued at the time
of payment, and the remainder is paid in cash.

	 	•	 	Long-term bonus pool payouts from fiscal 2003, 2004 and 2005 are in their payout
phase. Their respective performance criteria are cash from operating and investing
activities before changes in working capital, earnings per share and revenue. These
awards are payable entirely in cash.

	II.	 	Miscellaneous Provisions

	 	•	 	If an executive’s employment is terminated for any reason, the executive forfeits
all rights to any current year bonus for the fiscal quarter in which the termination
occurs and subsequent fiscal quarters and forfeits all rights to any long-term bonus
not yet paid.
	 
	 	•	 	These compensation arrangements do not give any executive any right to be retained
in the employment of the Company and do not affect the right of the Company to
terminate, with or without cause, any executive’s employment at any time.
	 
	 	•	 	The Company has the right to withhold from any compensation payable to an
executive, or to cause the executive (or the executor or administrator of his or her
estate or his or her distributee) to make payment of, any federal, state, local, or
foreign taxes required to be withheld with respect to any payment.
	 
	 	•	 	The Company may amend, alter, suspend or discontinue the compensation arrangements,
as it shall from time to time consider desirable.
	 
	 	•	 	In limited circumstances, the Chief Executive Officer, in consultation with the
compensation committee, may approve limited exceptions to the terms of the bonus
plans.exv10w8

 

EXHIBIT 10.8

Summary of Non-Employee Director Compensation

     Non-employee director compensation currently consists of an annual cash retainer of $18,000
and an option grant for 6,000 shares. Audit committee members receive an additional $6,000 per
year ($8,000 for the chairman) and compensation committee members an additional $2,500. Any
director who fails to attend in a fiscal year at least 75% of the combined number of the meetings
of the Board and committees on which such director served, and fails to attend in person at least
75% of the in person Board meetings, may forfeit some or all of the compensation, as the Board may
in its discretion determine.exv10w14

 

EXHIBIT 10.14

			
	 
	
	 	Amendment to Credit Agreement

This agreement is dated as of June 27, 2005, by and between ARI Network Services, Inc. (the
“Borrower”) and JPMorgan Chase Bank, N.A., successor by merger to Bank One, NA, with its main
office in Chicago, IL (the “Bank”), and its successors and assigns. The provisions of this
agreement are effective on the date that this agreement has been executed by all of the signers
and delivered to the Bank (the “Effective Date”).

WHEREAS, the Borrower and the Bank entered into a credit agreement dated July 9, 2004, as amended
(if applicable) (the “Credit Agreement”); and

WHEREAS, the Borrower has requested and the Bank has agreed to amend the Credit Agreement as set
forth below;

NOW, THEREFORE, in mutual consideration of the agreements contained herein and for other good and
valuable consideration, the parties agree as follows:

	1.	 	DEFINED TERMS. Capitalized terms not defined herein shall have the meaning ascribed in the
Credit Agreement.
	 
	2.	 	MODIFICATION OF CREDIT AGREEMENT. The Credit Agreement is hereby amended as follows:

	 	2.1	 	Section 1.3 of the Credit Agreement captioned “Borrowing Base” is hereby amended and
restated to read as follows:
	 
	 	 	 	Borrowing Base. The aggregate principal amount of advances outstanding at any one
time under Facility A (the “Aggregate Outstanding Amount”) shall not exceed the
Borrowing Base or the maximum principal amount then available under the Line of
Credit Note (and any renewals, modifications or extensions thereof) evidencing
Facility A, whichever is less (the “Maximum Available Amount”). If at any time the
Aggregate Outstanding Amount exceeds the Maximum Available Amount, the Borrower shall
immediately pay the Bank an amount equal to such excess. “Borrowing Base” means the
aggregate of

	 	A.	 	80% of the book value of all Eligible Accounts, plus
	 
	 	B.	 	45% of the value of all Eligible Open Orders/Unbilled Renewals;
provided however, Borrower’s overall
renewal rate is equal to or greater that 85%, minus
	 
	 	C.	 	$75,000.00.

	 	2.2	 	Section 2. of the Credit Agreement captioned “Definitions” is hereby amended by
adding Subsection 2.10 thereto as follows:

2.10 “Eligible Open Orders/Unbilled Renewals” means all of Borrowers open
orders/unbilled renewals that will become Eligible Accounts upon billing.

	 	2.3	 	Sub-section A of Section 4.5 of the Credit Agreement captioned “Financial
Reports” is hereby amended and restated
to read as follows:

A. Via either the EDGAR System or its Home Page, within forty-five (45) days after the
filing of its Quarterly Report on Form 10-QSB for the fiscal quarter then ended with
the Securities and Exchange Commission, copies of the financial statements for such
fiscal quarter as contained in such Quarterly Report on Form 10-QSB.

	 	2.4	 	Sub-section C of Section 4.5 of the Credit Agreement captioned “Financial
Reports” is hereby amended and restated
to read as follows:

C. Upon request, a list of accounts receivable, aged from date of invoice and
certified as correct by one of its authorized agents.

	3.	 	RATIFICATION. The Borrower ratifies and reaffirms the Credit Agreement and the Credit
Agreement shall remain in full
force and effect as modified herein.

 

 

	4.	 	BORROWER REPRESENTATIONS AND WARRANTIES. The Borrower represents and
warrants that (a) the
representations and warranties contained in the Credit Agreement are true and correct in
all material respects as of the date of
this agreement, (b) no condition, act or event which could constitute an event of default
under the Credit Agreement or any
promissory note or credit facility executed in reference to the Credit Agreement exists,
and (c) no condition, event, act or
omission has occurred, which, with the giving of notice or passage of time, would
constitute an event of default under the
Credit Agreement or any promissory note or credit facility executed in reference to the
Credit Agreement.
	 
	5.	 	FEES AND EXPENSES. The Borrower agrees to pay all fees and out-of-pocket disbursements
incurred by the Bank in connection with this agreement, both before and after judgment, including legal fees
incurred by the Bank in the preparation,
consummation, administration and enforcement of this agreement.
	 
	6.	 	EXECUTION AND DELIVERY. This agreement shall become effective only after it is fully
executed by the Borrower and the Bank.
	 
	7.	 	ACKNOWLEDGEMENTS OF BORROWER. The Borrower acknowledges that as of the date of this
agreement it has no offsets with respect to all amounts owed by the Borrower to the Bank arising under or
related to the Credit Agreement on or prior to the date of this agreement. The Borrower fully, finally and forever releases and
discharges the Bank and its successors, assigns, directors, officers, employees, agents and representatives from any
and all claims, causes of action, debts and liabilities, of whatever
kind or nature, in Law or in equity, of the Borrower,
whether now known or unknown to the Borrower, which may have arisen in connection with the Credit Agreement or the actions or
omissions of the Bank related to the Credit Agreement on or prior to the date hereof. The Borrower acknowledges and agrees
that this agreement is limited to
the terms outlined above, and shall not be construed as an agreement to change any other
terms or provisions of the Credit
Agreement. This agreement shall not establish a course of dealing or be construed as
evidence of any willingness on the
Bank’s part to grant other or future agreements, should any be requested.
	 
	8.	 	NOT A NOVATION. This agreement is a modification only and not a novation. Except
for the above-quoted
modification(s), the Credit Agreement, any loan agreements, credit agreements,
reimbursement agreements, security
agreements, mortgages, deeds of trust, pledge agreements, assignments, guaranties,
instruments or documents executed in
connection with the Credit Agreement, and all the terms and conditions thereof, shall be
and remain in full force and effect
with the changes herein deemed to be incorporated therein. This agreement is to be
considered attached to the Credit
Agreement and made a part thereof. This agreement shall not release or affect the
liability of any guarantor of any promissory
note or credit facility executed in reference to the Credit Agreement or release any
owner of collateral granted as security for
the Credit Agreement. The validity, priority and enforceability of the Credit Agreement
shall not be impaired hereby. To the
extent that any provision of this agreement conflicts with any term or condition set
forth in the Credit Agreement, or any
document executed in conjunction therewith, the provisions of this agreement shall
supersede and control. The Bank
expressly reserves all rights against all parties to the Credit Agreement.

	 	 	 	 	 
	 	 	Borrower:
	 
	 	 	 	 
	 	 	ARI Network Services, Inc.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Timothy Sherlock
	 

	 	 	 	 
	 

	 	 	 	Timothy Sherlock     VP Finance, CFO
	 

	 	 	 	 
	 

	 	 	 	Printed Name               Tille
	 
	 	 	 	 
	 	 	Date Signed: 2/7/05;
	 
	 	 	 	 
	 	 	Bank:
	 
	 	 	 	 
	 	 	JP Morgan Chase/Bank, N.A.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Jay A. Isaman
	 

	 	 	 	 
	 

	 	 	 	Jay A. Isaman          VP
	 

	 	 	 	 
	 

	 	 	 	Printed Name            Title
	 
	 	 	 	 
	 	 	Date Signed: 7/8/05

2

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