Document:

WARRANT AGREEMENT

                         NATIONAL SCIENTIFIC CORPORATION

     THIS AGREEMENT  (the  "Agreement"),  dated as of 1998, is between  NATIONAL
SCIENTIFIC CORPORATION (the "Company") and (the "Holder").

     WHEREAS,  in  conjunction  with an  offering of up to fifty (50) units (the
("Units"),  each Unit consisting of one thousand (1,000) shares of the Company's
convertible preferred stock, par value $0.10 par value, (the "Preferred Stock"),
and one hundred  thousand  (100,000) Class A Common Stock Purchase  Warrants ("A
Warrants or  Warrants"),  the  Company and the Holder  desire to enter into this
Agreement governing the terms of the A Warrants.

     NOW, THEREFORE,  in consideration of the promises and the mutual agreements
herein set, the parties agree as follows:

     SECTION 1. A WARRANTS AND FORM OF A WARRANT CERTIFICATES.

          (A)  Each A  Warrant  shall  entitle  the  Holder  of the  certificate
               representing such A Warrant to purchase upon the exercise thereof
               one  (1)  share  of  Common  Stock,  subject  to the  adjustments
               provided  for in Section 8 hereof,  at any time  after  issuance,
               until December 31, 2000 ("A Expiration Date") with respect to the
               A Warrants.

          (B)  The A Warrant  certificates shall be in registered form only. The
               text of the A Warrant  certificate  and the form of  election  to
               exercise an A Warrant shall be  substantially  in the form of the
               exhibit  attached  hereto.  Each A Warrant  certificate  shall be
               dated as of the date of issuance  (whether upon initial  issuance
               or upon transfer or exchange), and shall be executed on behalf of
               the Company by the manual or facsimile signature of its President
               or a Vice  President,  and attested to by the manual or facsimile
               signature of its Secretary or an Assistant Secretary.

     SECTION 2. EXERCISE OF A WARRANTS, DURATION AND A WARRANT PRICE. Subject to
the  provisions  of this  Agreement,  each  registered  Holder  of one or more A
Warrant  certificates  shall have the right, which may be exercised as in such A
Warrant  certificates  expressed,  to purchase from the Company (and the Company
shall issue and sell to such  registered  Holder) the number of shares of Common
Stock to which the A Warrants  represented by such  certificates are at the time
entitled hereunder.

     Each A Warrant not  exercised by its A  Expiration  Date shall become void,
and all rights thereunder and all rights in respect thereof under this Agreement
shall cease on such date.

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     A  Warrants  may  be  exercised  by  the   surrender  of  the   certificate
representing such A Warrants to the Company, at the office of the Company,  with
the  subscription  farm set forth duly  executed and properly  endorsed with the
signatures properly guaranteed, and upon payment in full to the Company of the A
Warrant Price (as defined  hereinafter) for the number of shares of Common Stock
as to which the A Warrant is  exercised.  Such A Warrant  Price shall be paid in
full in cash,  or by  certified  check of bank draft  payable  in United  States
currency to the order of the Company.

     The price  per share of the  Common  Stack at which the A  Warrants  may be
exercised shall be $1.00 per share with no regard to the bid or ask price of the
stock  on,  before  or after  the date the  Holder  chooses  to  exercise  the A
Warrants.  The A Expiration Date will be, as previously  stated in Section 1(A),
December 31, 2000.

     Subject  to the  further  provisions  of this  Section  2 and of  Section 5
hereof, upon such surrender of A Warrant  certificates and payment of the of the
A  Warrant  Price  as  aforesaid,  the  Company,  shall  issue  and  cause to be
delivered,  with all  reasonable  dispatch to or upon the  written  order of the
registered  Holder  of  such A  Warrants  and in  such  name  or  names  as such
registered Holder may designate, a certificate or certificates for the number of
securities  so  purchased  upon the exercise of such A Warrants,  together  with
cash, as provided in Section 9 of this Agreement,  in respect of any fraction of
a share or security otherwise issuable upon such surrender. All shares of Common
Stock issued,  upon the exercise of A Warrants  shall be validly  issued,  fully
paid and non-assessable.

     Certificates  representing  such  securities  shall be  deemed to have been
issued and any person so  designated to be named therein shall be deemed to have
become a Holder of record of such  securities as of the date of the surrender of
such A Warrants  and  payment  of the A Warrant  Price as  aforesaid;  provided,
however,  that is, at the date of  surrender  of such A Warrants  and payment of
such A  Warrant  Price,  the  transfer  books  for the  Common  Stock  or  other
securities  purchasable  upon the exercise of such A Warrants are then exercised
shall he  issuable  as of the date on which such books  shall next be opened and
until such date the Company  shall be under no duty to deliver  any  certificate
for such  securities,  The  rights  of  purchase  represented  by each A Warrant
certificate  shall be  exercisable,  at the election of the  registered  Holders
thereof,  either as an  entirety  or from time to time for part of the number of
securities specified therein and, in the event that any A Warrant certificate is
exercised in respect of less that all of the securities specified therein at any
time  prior to the A  Expiration  Date of the A  Warrant  certificate,  a flew A
Warrant certificate or certificates will be issued to such registered Holder for
the  remaining  number  securities  specified  in the A Warrant  certificate  so
surrendered.

     SECTION 3.  COUNTERSIGNATURE  AND  RESIGNATION  The Company shall  maintain
books (the "A Warrant  Register) for the  registration  and the  registration of
transfer of the A Warrants.  Upon the  initial  issuance of the A Warrants,  the
Company  shall issue and register the A Warrants in the names of the  respective
Holders thereof. The A Warrant  certificates shall be countersigned  manually or
by  facsimile  by an officer of the Company and attested to by an officer of the
Company.

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     Prior to due  presentment  for  registration  of  transfer  of any  Warrant
certificate the Company may deem and treat the person in whose name such Warrant
certificate  shall be  registered  upon the Warrant  Register  (the  "registered
Holder") as the absolute owner of such Warrant  certificate  and of each Warrant
represented thereby (notwithstanding any flotation of ownership or other writing
on the Warrant  certificate made by anyone other than the Company or the Warrant
Agent),  for the purpose of any exercise thereof,  of any distribution or notice
to the Holder thereof, and for all other purposes,  and the Company shall not be
affected by any notice to the contrary.

     SECTION 4. TRANSFER AND EXCHANGE OF WARRANTS.  The Company  shall  register
the  transfer,  from time to time, of any  outstanding  Warrant upon the warrant
Register,  upon  surrender  of  the  certificate  evidencing  such  Warrant  for
transfer,  properly endorsed with signatures properly guaranteed and accompanied
by appropriate  instructions for transfer. Upon any such transfer, a new Warrant
certificate  representing an equal aggregate  number of Warrants shall be issued
to the transferee and the surrendered  Warrant  certificate shall be canceled by
the Company.

     Warrant  certificates  may he  surrendered  to the Company  together with a
written request for exchange,  and thereupon the Company shall issue in exchange
therefor one or more new Warrant  certificates  as  requested by the  registered
Holder of the Warrant  certificate or certificates so surrendered,  representing
an equal aggregate number of Warrants.

     SECTION 5.  PAYMENT OF TAXES.  The Company will pay any  documentary  stamp
taxes  attributable  to the  initial  issuance  of the  shares of  Common  Stock
issuable upon the exercise of Warrants; provided, however, the Company shall not
be  required  to pay any tax or taxes  which may be  payable  in  respect of any
transfer  involved in the issuance or delivery of any certificates for shares of
Common  Stock in a name other than  registered  Holder of Warrants in respect of
which are issued, and in such case the Company shall not be required to issue or
deliver  any for  shares  of  Common  Stock  or any  Warrant  until  the  person
requesting  the same has paid the amount of such tax or has  established  to the
Company's satisfaction that such tax has been paid.

     SECTION  6.  MUTILATED  OR  MISSING  WARRANTS.  in case any of the  Warrant
certificates shall be mutilated,  lost, stolen or destroyed,  the Company may in
its discretion issue a new Warrant certificate,  and THE COMPANY IN EXCHANGE AND
SUBSTITUTION   THEREFOR  AND  UPON   CANCELLATION   OF  THE  MUTILATED   WARRANT
CERTIFICATE,  OR IN LIEU OF AND  SUBSTITUTION  FOR THE WARRANT  CERTIFICATE LOST
STOLEN OR DESTROYED,  shall  countersign  and deliver a new Warrant  certificate
representing  an equal  aggregate  number of Warrants,  but only upon receipt of
evidence  satisfactory to the Company of such loss, theft or destruction of such
Warrant certificate and reasonable indemnity, it requested, also satisfactory to
them. Applicants for such substitute Warrant certificates shall also comply with
such other reasonable  conditions and pay such reasonable charges as the Company
may prescribe.

     SECTION 7. RESERVATION OF COMMON STOCK.  There have been reserved,  and the
Company shall at all times keep  reserved,  out of the  authorized  and unissued
shares  of  Common  Stock,  a number of shares  sufficient  to  provide  for the
exercise of the rights of purchase represented by the Warrants then outstanding,
and the transfer agent for the Common Stock, and every subsequent transfer agent
for any shares of the Company's  capital stock issuable upon the exercise of any

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of the rights of  purchase  aforesaid,  are hereby  irrevocably  authorized  and
directed at all times to reserve such number of authorized  and unissued  shares
as shall be requisite for such purpose.

     SECTION  8.  ADJUSTMENT  OF  WARRANT  PRICE AND  NUMBER OF SHARES OF COMMON
STOCK.  The number and kind of securities  purchasable  upon the exercise of the
Warrants and the Warrant Price shall be subject to adjustment  from time to time
upon the happening of certain events, as follows:

          8.1 ADJUSTMENTS. The number of shares of Common Stock purchasable upon
the  exercise  of each  Warrant  arid the  Warrant  Price  shall be  subject  to
adjustment as follows:

          (a) In case the Company  shall (i) pay a dividend  in Common  Stock or
     make a distribution in Common Stock, (ii) subdivide its outstanding  Common
     Stock,  (iii) combine its outstanding Common Stuck into a smaller number of
     shares of Common Stock,  or (iv) issue, by  reclassification  of its Common
     stock,  other  securities  of the  Company,  the number of shares of Common
     Stock  purchasable  upon  exercise of a Warrant  immediately  prior thereto
     shall be  adjusted  so that the Holder of a Warrant  shall be  entitled  to
     receive the kind and number of shares of Common  Stock or other  securities
     of the  Company  which  such  Holder  would  have  owned or would have been
     entitled to receive  immediately  after the  happening of any of the events
     described  above, had the Warrant been exercised  immediately  prior to the
     happening  of such  event or any  record  date with  respect  thereto.  Any
     adjustment made pursuant to this subsection  8.1(a) shall become  effective
     immediately  after the  effective  date of such  event  retroactive  to the
     record date, if any, for such event.

          (b) In case the  Company  shall  issue  rights,  options,  Warrants or
     convertible  securities to all or  substantially  all holders of its Common
     Stock, without any charge to such holders,  entitling them to subscribe for
     or purchase  Common Stock at a price per share which is lower at the record
     date  mentioned  below than the then  Current  Market  Price (as defined in
     Section  9  hereof),  the  number of  shares  of  Common  Stock  thereafter
     purchasable  upon the  exercise  of each  Warrant  shall be  determined  by
     multiplying  the number of shares of Common Stock  theretofore  purchasable
     upon exercise of a Warrant by a fraction,  of which the numerator  shall be
     the number of shares of Common Stock  outstanding  immediately prior to the
     issuance of such rights,  options.  Warrants or convertible securities plus
     the number of additional shares of Common Stock offered for subscription or
     purchase,  and of which the  denominator  shall be the  number of shares of
     Common Stock outstanding  immediately prior to the issuance of such rights,
     options, Warrants or convertible securities plus the number of shares which
     the aggregate  offering  price of the total number of shares  offered would
     purchase  at such  Current  Market  Price.  Such  adjustment  shall be made
     whenever  such rights,  options.  Warrants or  convertible  securities  are
     issued,  and shall become  effective  immediately  and  retroactive  to the
     record date for the determination of stockholders  entitled to receive such
     rights, options, Warrants or convertible securities.

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          (c) In case the Company shall distribute to all or  substantially  all
     holders  of its  Common  Stock,  evidences  of its  indebtedness  or assets
     (excluding  cash  dividends  or  distributions  cut of earnings) or rights,
     options,  Warrants  or  convertible  securities  containing  the  right  to
     subscribe  for or purchase  Common Stock  (excluding  those  referred to in
     subsection 8.1(b) above),  then in each case the number of shares of Common
     Stock  thereafter  purchasable  upon the exercise of each Warrant  shall be
     determined by multiplying the number of shares of Common Stock  theretofore
     purchasable  upon  exercise  of such  Warrant by a  fraction,  of which the
     numerator  shall  be the  then  Current  Market  Price  on the date of such
     distribution,  and of which the  denominator  shall be such Current  Market
     Price on such date minus the then fair  value of the  portion of the assets
     or evidences of indebtedness so distributed or of such subscription rights,
     options,  Warrants or convertible  securities applicable to one share. Such
     adjustment  shall be made whenever any such  distribution is made and shall
     become effective on the date of distribution retroactive to the record date
     for  the   determination   of   stockholders   entitled  to  receive   such
     distribution.

          (d) No adjustment in the number of shares of Common Stock  purchasable
     pursuant to the Warrants  shall be required  unless such  adjustment  would
     require an  increase  or  decrease of at least one percent in the number of
     shares of Common Stock then  purchasable upon the exercise of the Warrants;
     provided,  however, that any adjustments which by reason of this subsection
     8.1(d) are not required to be made immediately shall be carried forward and
     taken into account in any subsequent adjustment.

          (e) Whenever the number of shares of Common Stock purchasable upon the
     exercise  of a Warrant is adjusted as herein  provided,  the Warrant  Price
     payable upon exercise of the Warrant shall be adjusted by multiplying  such
     Warrant Price immediately prior to such adjustment by a fraction,  of which
     the  numerator  shall he the number of shares of Common  Stock  purchasable
     upon the exercise of such Warrant immediately prior to such adjustment, and
     of which the  denominator  shall be the number of shares of Common Stock so
     purchasable immediately thereafter.

          8.2 NO  ADJUSTMENT  FOR  DIVIDENDS.  Except as provided in Section 8.1
hereof,  no  adjustment  in respect of any  dividends  or  distributions  out of
earnings  shall be made  during the term of a Warrant or upon the  exercise of a
Warrant.

          8.3   PRESERVATION   OF   PURCHASE   RIGHTS   UPON   RECLASSIFICATION,
CONSOLIDATION,  ETC. In case of any  consolidation of the Company with or merger
of the Company into another  corporation or in case of any sale or conveyance to
another  corporation  of the  property,  assets or business of the Company as an
entirety or  substantially  as an  entirety,  the Company or such  successor  or
purchasing  corporation,  as the case may be, shall  execute with the Company an
agreement  that the  registered  holders  of the  Warrants  shall have the right
thereafter,  upon payment of the Warrant  Price in effect  immediately  prior to
such action, to purchase,  upon exercise of each Warrant, the kind and amount of
shares and other  securities and property which it would have owned or have been
entitled to receive after the happening of such  consolidation,  merger, sale or
conveyance had each Warrant been exercised  immediately prior to such action. In
the event of a merger described in Section  368(a)(2)(E) of the Internal Revenue
Code of 1986, as amended, in which the Company is the surviving corporation, the

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right to purchase  shares of Common Stock under the Warrants shall  terminate on
the date of such merger and thereupon  the Warrants  shall become null and void,
but  only if the  controlling  corporation  shall  agree to  substitute  for the
Warrants its warrants  which  entitle the holders  thereof to purchase upon this
exercise the kind and amount of shares and other  securities  and property which
they  could  have  owned or been  entitled  to  receive  had the  Warrants  been
exercised  immediately prior to such merger. Any such agreements  referred to in
this  subsection  8.3 shall  provide for  adjustments,  which shall be as nearly
equivalent as may be  practicable to the  adjustments  provided for in section 9
hereof.  The  provisions  of  this  subsection  8.3  shall  similarly  apply  to
successive consolidations, mergers, sales or conveyances.

     SECTION 9. FRACTIONAL INTERESTS. The Company shall not be required to issue
fractional shares of common Stock on the exercise of a Warrant.  If any fraction
of a share of Common Stock would,  except for the  provisions of this Section 9,
be issuable on the exercise of a Warrant (or  specified  portion  thereof),  the
Company  shall in lieu  thereof pay an amount in cash equal to the then  Current
Market Price  multiplied by such fraction.  For purposes of this Agreement,  the
term "Current  Market Price" shall mean (i) if the Common Stock is traded in the
over-the-counter market and flat in the NASDAQ National Market System nor on any
national securities exchange, the average of the per share closing bid prices of
the  Common  Stock on the  thirty  (30)  consecutive  trading  days  immediately
preceding the date in question, as reported by NASDAQ or an equivalent generally
accepted reporting service,  or (ii) if the Common Stock is traded in the NASDAQ
National Market System or on a national securities exchange, the average for the
thirty (30) consecutive trading days immediately  preceding the date in question
of the daily per share closing prices of the Common Stock in the NASDAQ National
Market system or on the principal  stock exchange on which it is listed,  as the
case may be. For purposes of clause (i) above, if trading in the Common Stock is
not  reported by NASDAQ,  the bid price  referred to in said clause shall be the
lowest bid price as reported by National  Quotation  Bureau,  Incorporated.  The
closing  price  referred to in clause (ii) above shall be the last reported sale
price or, in the case no such reported sale takes place on such day, the average
of the  reported  closing  bid and asked  prices,  in either  case in the NASDAQ
National  Market  System or on the  national  securities  exchange  on which the
Common Stock is then listed.

     SECTION 10. RIGHTS AS  WARRANTHOLDERS.  Nothing contained in this Agreement
or in any of the  Warrants  shall be construed  as  conferring  upon the holders
thereof,  as such, any of the rights of stockholders of the Company,  including,
without limitation,  the right to receive dividends or other  distributions,  to
exercise any  preemptive  rights,  to vote or to consent or to receive notice as
stockholders  in respect of the  meetings  of  stockholders  or the  election of
directors of the Company or any other  matter.  Anything  herein to the contrary
notwithstanding,  the Company shall cause copies of all financial statements and
reports,  proxy  statements  and  other  documents  as  it  shall  send  to  its
stockholders  to be sent by the  same  class  mail as sent to its  stockholders,
postage  prepaid,  on the  date of the  mailing  to such  stockholders,  to each
registered  holder of Warrants at his address  appearing on the Warrant Register
as of the record date for the determination of the stockholders entitled to such
documents.

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     SECTION  11.  NOTICES.  All  notices,  requests  and  other  communications
pursuant to this Agreement shall be in writing and shall be  sufficiently  given
or made when delivered or mailed by first class mail, postage prepaid, addressed
as follows:

          (A)  if to the Company:

               National Scientific Corporation
               4455 East Camelback Road
               Suite 5150
               Phoenix, Arizona 55018
               Attention: President

          (B)  if to the registered holder of a Warrant,  to the address of such
          holder as shown in the Warrant Register.

     SECTION 12.  SUPPLEMENTS AND AMENDMENTS.  The Company may from time to time
supplement  or amend this  Agreement  without  the  approval  of any  holders of
Warrants  in  order  to cure any  ambiguity  or to  correct  or  supplement  any
provision contained herein which may be defective or inconsistent with any other
provision  herein,  or to make any other  provisions  in regard  to  matters  or
questions  arising  hereunder  which the Company may deem necessary or desirable
and which shall not be  inconsistent  with the  provisions of the  Warrants,  or
which  shall not  adversely  affect the  interests  of the  holders of  Warrants
(including  reducing the Warrant Price or extending the redemption or expiration
date).

     SECTION 18. SUCCESSORS.  All the covenants and provisions of this Agreement
by or for the benefit of the Company or the  registered  holders of the Warrants
shall bind and inure to the benefit of their  respective  successors and assigns
hereunder.

     SECTION 19.  GOVERNING LAW. This Agreement shall be deemed to be a contract
made  under  the  laws of the  State  of  Texas  and for all  purposes  shall be
construed in accordance with the laws of said State.

     SECTION 20. BENEFITS OF THIS AGREEMENT.  Nothing in this Agreement shall he
construed  to give to any person or  corporation  other than the Company and the
registered holders of the Warrants any legal or equitable right, remedy or claim
under this Agreement. This Agreement shall be for the sole and exclusive benefit
of the Company and the registered Holders of the Warrants.

     SECTION 21.  COUNTERPARTS.  This Agreement may be executed in  counterparts
and  each  of such  counterparts  shall  for all  purposes  be  deemed  to be an
original,  and all such counterparts  shall together  constitute hut one and the
same instrument.

     SECTION 22. DESCRIPTIVE  HEADINGS.  The descriptive headings of the several
Sections of this  Agreement  are  inserted  for  convenience  only and shall not
control or affect the moaning or construction of any of the provisions hereof.

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<PAGE>
     IN WITNESS  WHEREOF,  the parties  have caused  this  Agreement  to be duly
executed, as of the day and year first above written.

                                        NATIONAL SCIENTIFIC CORPORATION

                                        By:
                                            ------------------------------------
                                            President

                                        By:
                                            ------------------------------------
                                            Secretary

                                        8
<PAGE>
WARRANT CERTIFICATE NO.__________

               CLASS A WARRANT TO PURCHASE SHARES OF COMMON STOCK
                         NATIONAL SCIENTIFIC CORPORATION

                INCORPORATED UNDER THE LAWS OF THE STATE OF TEXAS

     This certifies  that,  for value received  ________________________________
the registered holder hereof or assigns (the "Holder"),  is entitled to purchase
from NATIONAL SCIENTIFIC  CORPORATION,  a Texas corporation (the "Company"),  at
any time  after the date of this  Warrant  Certificate  and  before  5:00  p.m.,
Arizona time, on December 31, 2001, at a purchase  price of one dollar and fifty
cents ($1.50) (the "Warrant Price") per share, fifty thousand (50,000) shares of
Common Stack of the Company  (the  "Shares").  The number of Shares  purchasable
upon exercise of each Warrant  evidenced  hereby and the Warrant Price per Share
shall be subject  to  adjustment  from time to time as set forth in the  Warrant
Agreement referred to below.

     The  Warrants  evidence  hereby  may be  exercised  in  whole or in part by
presentation  of the Warrant  Certificate  with the Purchase  Form duly executed
(with a signature  guarantee)  and  simultaneous  payment of the  Warrant  Price
(subject to adjustment) at the principal office in Phoenix,  Arizona. Payment of
such price  shall be made at the  option of the  Holder in cash or by  certified
check or bank draft, all as provided in the Warrant Agreement.

     The Warrants evidenced hereby are part of a duly authorized issue of Common
Stock  Purchase  Warrants and are issued under and in accordance  with a Warrant
Agreement  dated  __________________________,  1999 and are subject to terms and
provisions  contained in such Warrant  Agreement,  to all of which the Holder of
the Warrant  Certificate by acceptance  hereof  consents.  A copy of the Warrant
Agreement  may be obtained  for  inspection  by the Holder  hereof upon  written
request to the Company.

     Upon any partial exercise of the Warrants evidenced hereby,  there shall be
countersigned  and issued to the Holder a new Warrant  Certificate in respect of
the  Shares  as to which  the  Warrants  evidenced  hereby  shall  not have been
exercised.  This  Warrant  Certificate  may be  exchanged  at the  office of the
Company by surrender  of this  Warrant  Certificate  properly  endorsed  (with a
signature  guarantee) either separately or in combination with one or more other
Warrants for one or more new Warrants to purchase the same  aggregate  number of
Shares as here  evidenced by the Warrant or Warrants  exchanged.  No  fractional
Shares will be issued upon the exercise of rights to purchase hereunder, but the
Company  shall pay the cash value of any  fraction  upon the  exercise of one or
more Warrants.  The Warrants  evidenced hereby are transferable at the office of
the  Company  in the  manner and  subject  to the  limitations  set forth in the
Warrant Agreement.
<PAGE>
     The Holder hereof may be treated by the Company all other  parsons  dealing
with this Warrant  Certificate as the absolute owner hereof for all purposes and
as the person entitled to exercise the rights represented  hereby, any notice to
the contrary notwithstanding,  and until such transfer is entered an such books,
the Company may treat the Holder hereof as the owner for all purposes.

     This Warrant  Certificate  does not entitle the Holder hereof to any of the
rights of a stockholder of the Company.

Dated:                                  NATIONAL SCIENTIFIC CORPORATION
      -----------------------

                                        By:
                                            ------------------------------------
                                            President

ATTEST:

-----------------------------
Secretary
<PAGE>
                         NATIONAL SCIENTIFIC CORPORATION
                                  PURCHASE FORM

                         National Scientific Corporation
                      4455 East Camelback Road, Suite El GO
                             Phoenix, Arizona 85018

     The undersigned hereby irrevocably elects to exercise the right of purchase
represented by the within Warrant  Certificate for, and to purchase  thereunder,
______________  Shares of Common Stock  provided for therein,  and requests that
certificates for such Shares be issued in the name of:

________________________________________________________________________________

________________________________________________________________________________
(Please Print or Type Name, Address and Social Security Number)

and,  if  said  number  of  Shares  shall  riot be all  the  Shares  purchasable
hereunder.  that a new  Warrant  Certificate  for  the  balance  of  the  Shares
purchasable  under the within  Warrant  Certificate be registered in the name of
the  undersigned  Holder or his Assignee as below indicated and delivered to the
address stated below.

                                                       Dated: __________________
Name of Holder or Assignee:

___________________________________
(Please Print)

Address:

________________________________________________________________________________

________________________________________________________________________________

Signature:

___________________________________

Note: The  above  signature must correspond with the name as it appears upon the
      face  of  the  within  Warrant  Certificate  in  every particular, without
      alteration  or  enlargement  or any change whatever, unless these Warrants
      have been assigned.

Signature Guaranteed:

___________________________________
(Signature  must be guaranteed  by a bank or trust  company  having an office or
correspondent  in  the  United  States  or  by a  member  firm  of a  registered
securities exchange or the National Association of Securities Dealers, Inc.)
<PAGE>
                                   ASSIGNMENT

                 (To Be Signed Only Upon Assignment Of Warrants)

     FOR VALUE  RECEIVED,  the undersigned  hereby sells,  assigns and transfers
unto:

________________________________________________________________________________

________________________________________________________________________________
(Name and Address of Assignee Must Be Printed or Typewritten)

the  within   Warrants,   hereby   irrevocably   constituting   and   appointing
_____________________,  Attorney,  to transfer said Warrants on the books of the
Company, with full power of substitution in the premises.

Dated: ____________________________

___________________________________
Signature of Registered Holder

Note: The  signature  on  this  Assignment  must  correspond with the name as it
      appears  upon  the  face  of  the  within  Warrant  Certificate  in  every
      particular, without alteration or enlargement or any change whatever.

Signature Guaranteed:

___________________________________
(Signature  must be guaranteed  by a bank or trust  company  having an office or
correspondent  in  the  United  States  or  by a  member  firm  of a  registered
securities exchange or the National Association of Securities Dealers, Inc.)TARGUN PROPERTIES, INC.

                            LEASE & SERVICE AGREEMENT

This  agreement  is  made  on  this  21st  day of  August  1998  between  TARGUN
PROPERTIES,  INC., an Arizona Corporation (hereinafter referred to as "Lessor"),
and  NATIONAL  SCIENTIFIC  CORPORATION.  an  Arizona  Corporation,  (hereinafter
referred  to as  "Lessee").  Lessor  has  entered  into a lease  for  the  space
described below:

     Suite E-160, Offices # 23, 24, & 25
     4455 B. Camelback Rd.
     Phoenix, Arizona 85018

Lessee  desires to lease from  Lessor a certain  portion of Suite  E-160 for the
purpose of conducting  Lessee's  business  together with the fights in common to
the "Common Areas" of the Suite.

In  consideration  of the  covenants and promises each to the other made herein,
the parties hereto agree as follows:

1.   PREMISES.  In  consideration  of the  rents  and  covenants  to be paid and
performed by Lessee,  Lessor does hereby lease to Lessee, and Lessee does hereby
hire from Lessor,  upon the terms and conditions  hereinafter set forth,  Office
Numbers 23, 24, & 25 within the Suite E-160 (The Park Executive  Suites) located
at 4455 Camelback Rd. (hereinafter the "Premises").  All of the property at 4455
E. Camelback  Rd.,  Phoenix,  Arizona  85018,  including but not limited to, the
buildings,  equipment  moms,  grounds,  walls,  parking  areas and  driveways is
hereinafter referred to as The Suites.

     A.   An  exclusive  right to occupy  offices  numbered  23. 24, & 25 . Said
          office  will be  occupied  by no more  than  four  (4)  persons.  Many
          additional  persons  occupy the office,  Lessee shall pay to Lessor an
          additional (Fifty dollars) $50.00 per month for each additional person
          who occupies the office.

     B.   A non-exclusive light in common with other Lessees,  their associates,
          and other  parties  contracting  with  Lessor  to the use of  services
          offered by Lessor and to the use of the common areas of the  Premises,
          including  but not  limited to the  reception  area,  amenities,  copy
          machine room, conference room, and corridors, as provided by Lessor on
          this floor in the Suite.

2.   TERM.

     A.   The term shall  commence on September 1. 1998 and  terminate on August
          31 1999 subject to the provisions hereinafter provided.

     B.   If the Premises are not ready for occupancy on the  commencement  date
          of the Lease, this Lease shall remain in full force and effect. Lessee
          should  physically  inspect the  Premises to verify that the  Premises
          will be ready on any  promised  date.  Lessor  shall  not be liable to
          Lessee for any loss or damages  resulting  from the Premises not being
          ready for occupancy on the  commencement  date of this Lease,  and the
          term (or any rent increase date herein) shall not be extended,  but in
          such event all rent shall be abated  during  the  period  between  the
          commencement  of the  said  Term and the time  when the  Premises  are
          available to Lessee,  the term of the Lease shall  commence,  and rent
          shall  commence  without any  deduction or offset,  on the date Lessee
          moves into the leased  space or has a telephone  installed,  whichever
          occurs first.

     C.   Either party may  terminate  this Lease at the  expiration of the term
          set forth herein.  Lessee must give thirty (30) days written notice to
          Lessor of Lessee's  intent to terminate the Lease at the expiration of
          the term. If Lessee vacates said premises before the expiration  date,
          Lessee  will be held  responsible  to Lessor  for all rent owed  until
          specified  termination  date. If Lessee does not renew Lease or sign a
          new lease prior to the expiration of Lease,  Lessor reserves the right
          to  immediately  terminate  rental  and  serve an  immediate  eviction
          notice.  Also, if Lessee fails to give thirty (30) day written  notice
          of his intent to vacate the  premises  at the end of the term,  Lessee
          will  automatically be considered a month-to-month  tenant and will be
          responsible for the current market rental rate of the premises decided
          at Lessor's  discretion,  until such time that Lessee does give thirty
          (30) days written notice of Lessees Intent to vacate premises.

3.   RENT. Lessee agrees to pay to lessor (as rental for the Premises  described
in Paragraph 1 hereof the following monthly sum of:
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            $2400.00 Base Rent               $ 45.60 State Rental Tax
            $        Telephone Rent          $       Other
            $        Telephone Answering     $       Other
            $        Furniture Rental        $ 90.00 Covered Parking

                         $2,535.60 TOTAL MONTHLY RENTAL

All rents  shall be due and  payable on the first of each  month.  Rents  become
delinquent  after the 5th of each month at which time  Lessee is  considered  in
default of Lease and is  responsible  for any and all penalties set forth herein
as described in paragraph l2of Lease.

4.   SECURITY  DEPOSITS  Upon  execution  of this Lease by Lessee,  Lessor  will
retain  a  security  deposit  in the  amount  of  $750.00,  $300.00  of which is
non-refundable.

     A.   Lessee's security deposit  represents a bond on the part of the Lessee
          for the faithful  performance  of the  provisions  of tins Lease.  The
          security  deposit  will not be  interest  bearing to Lessee and may be
          commingled by Lessor with other funds of Lessor.  The security deposit
          will not and shall not be  applied  as rent by Lessor or  Lessee,  and
          shall be retained by Lessor during Lessee's tenancy. If Lessee remains
          in the Premises after the expiration  date of the Lease,  the security
          deposit will be retained by Lessor until Lessee's  security deposit as
          is  reasonably  necessary  to  remedy  and  defaults  of Lessee in the
          payment  of rent to  repair  damages  to the  Premises  caused  by the
          Lessee,  and the parties  expressly agree that the security deposit is
          made for all the aforesaid specific purposes.  If the space rented has
          been  previously  occupied,  Lessee  acknowledges  inspection  of  the
          carpeting,  flooring, walls, wall coverings,  ceiling, and door of the
          leased premises and  acknowledges  that there are no holes,  stains or
          other damage  thereto if not  specified in detail at the bottom of the
          last  page of this  Lease.  II  Lessee's  space  is not  completed  or
          available  for  inspection,   Lessee  has  ten  (10)  days  after  the
          commencement date of this Lease to send a letter via Certified Mail to
          lessor identifying any holes,  stains, or other damages. If Lessee has
          paid all of the rent due under  this  Lease,  Lessor  shall  return to
          Lessee the entire  security  deposit  (less  $100.00 for  cleaning and
          painting  and any  offsets  for  damages)  for each suite  occupied by
          Lessee after sixty (60) days after  Lessee moves out of the  Premises.
          II any law exists or is enacted  which  contradicts  any  provision of
          these security deposit provisions,  Lessor is not liable to Lessee for
          any damages unless Lessee sends Lessor by Certified Mail a copy of the
          applicable case of code and Lessor fails to cure same within seven (7)
          days.

5.   MASTER  LEASE.  Lessee  recognizes  that  there is a Master  Lease of which
Lessee's office (s) is a portion, and Lessee shall have no greater rights to the
use and  occupancy  of the  Premises  than  Lessor has with the  Building  under
Lessor's Master Lease. Lessee is bound to Lessor in the same manner as Lessor is
bound to the Building  with respect to all standard  lease  provisions,  such as
eminent  domain,  destruction  of  building,  etc..  as  well as the  rules  and
regulations  of the  Building.  Lessee  agrees to release and  forever  hold the
Lessor  harmless  from any claim of damages,  liabilities  or losses  alleged or
proven to be due, in whole or in part,  to any dispute which might arise between
Lessor and Landlord  under the Master Lease.  In the event of termination of the
Master Lease,  Lessee  shall,  at the option of Lessor's  Landlord,  attorney to
Lessor's Landlord and recognize Lessor's Landlord as Lessor under this Sublease.
This Paragraph does not obligate  Lessee in any way to the Building or to anyone
else,  for anyone else's rent,  or any payment  whatever,  except  expressly set
forth in this  Agreement.  Although  Lessor's  rent may be  increased  under the
Master Lease if taxes,  utilities or maintenance  costs increase,  Lessee's rent
will not be increased during the term of this Lease (except  otherwise  provided
in Paragraph 3 hereof).

     All reference to Lessee in the Agreement is to mean  Sub-Lessee;  reference
to Lessor is to mean Sub-Lessor; and reference to Lease is to mean Sub-Lease.

6.   IMPROVEMENTS

     A.   Lessee may not make any  improvements  within the office leased herein
          without the written  permission  of Lessor.  Lessee  shall pay for any
          such  improvements.  Lessee may remove  any  improvements  paid for by
          Lessee provided that Lessee repairs any holes, gaps or other damage to
          walls,  ceiling,  flooring or their coverings.  Lessee will remove any
          improvements (other than additional, normal height electrical outlets)
          installed by Lessee and restore the Premises to the condition prior to
          Lessee's  occupancy  if the  next  tenant  in that  space  objects  to
          Lessee's improvements. Lessee may not remove any improvement for which
          Lessor  contributed  payment without  Lessor's prior written  consent.
          During  the  restoration  period,  Lessee  shall pay rent to Lessor as
          provided herein as if said space were otherwise occupied by Lessee.

     B.   If Lessee  requires any  additional  air  conditioning  or  electrical
          outlets of separate  circuits for a computer or other office equipment

                                        2
<PAGE>
Lessee will be  responsible  for the entire cost thereof.  Lessee will order all
additional air conditioning or electrical work through, or with the approval of,
the Building Manager.

7.   REPAIRS.  The Building  which leases the Premises to Lessor is  responsible
for  construction  of the Premises and repairs to  elevator,  air  conditioning,
electrical,  plumbing and structural  supports under the Master Lease. Lessor is
not liable to Lessee by reason of any defect  inadequacy,  or  insufficiency  in
sane. Lessee may not deduct or offset any amount from rent due herein because of
any  problem  regarding  construction,  repairs  or lack  thereof.  Lessor  will
coordinate any repair or complaint of Lessee;  however, any claim by Lessee with
respect  thereto  shall be made solely  against the Building  and Lessor  hereby
assigns to Lessee,  solely for the purpose of making and  prosecuting any claim,
repairs for dangerous  conditions existing in the common areas within the Suite.
Lessee is responsible for, and shall indemnify and hold Lessor harmless from and
against,  any damage to  persons  or  property  caused by  Lessee,  or  Lessee's
employees,  agents, clients,  guests or invitees.  Lessee is not responsible for
repairing wall holes from normal sized nails used to hang pictures.

8.   UTILITIES, SERVICES.  MAINTENANCE. AND CONSTRUCTION.  Under Lessor's Master
Lease,  the  Building  provides  utilities,  services  janitorial,  heat and air
conditioning) , and maintenance.  Janitorial  services include carpet vacuuming,
but not  shampooing.  Heat and air  conditioning  is  provided  during  genrally
recognized  business  days and hours;  however,  Lessee  will have access to the
Premises 24 hours a day,7 days a week,  subject to the Buildints rules requiring
proper  identification  after  normal  business  hours.  Lessor is not liable to
Lessee by reason of any  failure to provide,  or the  inadequacy  of  utilities,
janitorial,  heat or air  conditioning  services or  maintenance.  Lessor is not
responsible for any negligence of the Building's agents, servants, or employees.
Lessee may not deduct or offset any amount  from rent due herein  because of any
problem  regarding  utilities,  heat,  air  conditioning,  janitorial  services,
maintenance  services or defective  construction  of  Premises.  Upon request by
Lessee, Lessor will write the Building regarding any complaint about maintenance
or construction  however, any claim by Lessee with respect thereto shall be made
by Lessee  directly  to the  Building,  under the  Master  Lease.  Lessor is not
responsible for maintaining,  repairing,  or cleaning the floor coverings,  wail
covering  or  venetian  blinds  within  Lessee's  Premises,  other  than  normal
janitorial service provided by the Building.

     A.   EXTRAORDINARY  CONSUMPTION  OF SERVICES.  Lessee shall not without the
          written  consent  of  Lessor,  use  any  apparatus  or  device  in the
          Premises,  other than a reasonable number of small business  machines,
          that  will in any way  increase  the  amount of  electricity  or water
          usually  furnished  or  supplied  for use of the  Premises  as general
          office space, or that will materially affect the temperature otherwise
          maintained by the air conditioning or heating system. In Lessor's sole
          discretion,  Lessee  agrees to pay promptly  upon demand by Lessor all
          additional  water or electric  current  consumed,  plus any additional
          expenses incurred in keeping track of said consumption,  including the
          cost of installing  separate  meters in and to the Leased  Premises if
          Lessor deems it necessary.

9.   TELEPHONE AND RECEPTION.  Lessor agrees to provide telephone  answering for
one line and reception  service as reasonably  required by Lessee from 8:00 a.m.
to 5:00 p.m., Monday through Friday,  nationally  recognized  holidays excepted.
Additional lines will be answered at a cost of $25.00 per month per line. Lessee
shall be responsible for its own telephone  expense.  and the  installation  and
monthly  service  charges,  if any,  from the  telephone  company  by  reason of
Lessee's  lines  being  connected  to the  reception  desk  and  telephone  room
consoles,  whether billed to Lessor or Lessee.  Any telephone  expense billed to
Lessor  (including  any  telephone  company  double  charge)  shall  be  paid or
reimbursed by Lessee to Lessor.

     If the telephone  company does not install  Lessee's phone on or before the
commencement  date of this Lease, the  commencement  date shall not be extended,
nor shall  rent be abated.  Lessor  will  assist  Lessee in  ordering  lines and
equipment  through  Lessor's  interconnect  telephone  company;  however,  it is
Lessee's  responsibility  to make certain lines are installed in Lessee's office
and to Lessor' central call director in a timely fashion.

     Lessee recognizes that telephone answering and reception services are never
perfect  and that  even the best  receptionists  and  telephone  operators  make
mistakes.  Lessor strives to provide excellent telephone answering and reception
services;  however,  reception services are functions that are under the control
of Lessee in that Lessee may perform either or both of these functions  directly
through Lessee's  employees Lessee hereby agrees to assume the risk of negligent
(passive  and/or active)  performance of telephone  answering  and/or  reception
service.  Lessee agrees that Lessor shall not be liable for any loss of business
or damage of any sort occurring  through or in connection with, or incidental to
the furnishing of, or the failure to furnish,  telephone  answering or reception
service.  Further, Lessee agrees to indemnify,  release and hold Lessor harmless
from any loss,  damage,  claim or liability arising out of or in connection with
any telephone  answering  and/or  reception  service provided or not provided by
Lessor's  employees  to Lessee or to any caller,  visitor or associate of Lessee
Lessor  shall not be liable for any loss of  business or damages of any sort for
authorizing or permitting the telephone company to disconnect Lessee's telephone
service if Lessee has not paid its telephone bill.

     Lessor  acknowledges that Lessee's separate number connected to the central
call  director  belongs to Lessee.  If,  upon  termination  of this  Lease,  the
telephone company requires Lessor's signature to assign said telephone number to
Lessee, Lessee may sign Lessor's name to the telephone company form.

                                        3
<PAGE>
     Lessee   provides  open   message/mail   slots  for  all  tenants.   Lessee
acknowledges  that  Lessor is not  responsible  for loss or theft of messages or
mail.

     Upon termination of this Lease, Lessor will write on all mail "Moved-Please
Forward to Sender" and return such mail to the post office. Lessor win not store
mail nor place a forwarding address on it unless Lessee pays the then-prevailing
charge for said service.

10.  PARKING.  Lessee  may  have  monthly  parking  in  the  Building's  parking
facilities, if any, according to the Building's rules, regulations and rates.

11.  ANIMALS AND VEHICLES. Lessee will not bring, nor pennit any of its visitors
to bring, any animal (except  seeing-eye dog),  bicycle or other vehicle (except
for a wheelchair) into the Suite.

12.  DEFAULT, REMEDIES

     A.   By Lessee.  Lessee  will be in  default  under the Lease if any of the
          following occurs:

          1.   If  Lessee  falls  to pay  the  rent or make  any  other  payment
               required by the Lease  within three (3) working days after Lessor
               sends Lessee a written notice or demand for payment.

          2.   If on three or more  occasions in any twelve month period  Lessor
               does not receive either Lessee's  regular monthly payment of rent
               and other  regularly  recurring  charges  on or before  the first
               business  day of the month or any other  payment on or before the
               date it is due.

          3.   If Lessee  assigns  the Lease or  mortgages  its  interest in the
               Lease or sublets any part of the Premises.

          4.   If  Lessee  abandons  the  Premises,  or ceases  to  operate  its
               business on the Premises,  or becomes  bankrupt or insolvent,  or
               makes any general  assignment of all or a substantial part of its
               property  for the  benefit  of  creditors,  or if a  receiver  is
               appointed to operate  Lessee's  business or to take possession of
               all or a substantial part of Lessees property.

          5.   If Lessee  fails to  maintain  the  insurance  as required by the
               Lease.

          6.   If Lessee  breaches any other provision of the Lease and fails to
               cure the  breach  within  fifteen  (15) days after  Lessor  sends
               written  notice of the breach,  or, if the breach cannot be cured
               within  fifteen  days,  then if  Lessee  does  not  proceed  with
               reasonable  diligence to cure the breach  within such  additional
               time as may be reasonably necessary under the circumstances.

          7.   If  Lessee  is  disruptive  and/or  uses  obscenities  or  vulgar
               language  so as to disturb  any of the other  tenants or Lessor's
               employees.

B.   Lessor's Remedies,  if Lessee is in default then Lessor may take any of the
following actions:

     1.   Fees.

          a. if rent and monthly  service  charges have not been received by the
          5th of the month, a late charge of $30.00 will be charged.

          b. if rent or monthly  service  charges have not been  received by the
          6th of the month,  an additional late charge of $10.00 per day, or ten
          percent (10%) of the total monthly rental, whichever is greater, shall
          be charged  until the rent and  service  charges,  including  the late
          charge, are paid in full.

          c. if one or more checks are  dishonored  by Lessee's bank in a twelve
          (12) month  period,  Lessor  may  require,  during the  balance of the
          Lessee's tenancy,  payment by cashier's check or money order. Lessee's
          failure to comply  therewith  will  constitute  a material  breach and
          permit Lessor to terminate this Lease.

          d. If a check is dishonored by Lesee's bank, a $50 returned  check fee
          will be charged.

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<PAGE>
          e. In the event that Lessee becomes delinquent in the payment or rent,
          or is unable to meet the monthly  rental  obligation on a timely basis
          requiring eviction,  require cleaning and/or repairs at the expense of
          Lessor,  Lessee  agrees  to pay all  collection  agency  fees that are
          required for collection of Lessee's. debt.

     2.   RE-ENTRY AND REPOSSESSION.  Lessor may re-enter and take possession of
all or any part of the Premises and remove Lessee and any person  claiming under
Lessee from the Premises,  and without  committing a trespass or becoming liable
for any loss or damage that may be  occasioned  thereby.  Lessor may also change
the locks to the  Premises  without  notice at Lessee's  expense.  Re-entry  and
repossession of the Premises will not by themselves terminate the Lease.

     3.   REMOVAL, STORAGE AND SALE OF PROPERTY. Lessor may remove any property,
including fixtures,  from the Premises and store the same at Lessee's expense in
a  warehouse  or any other  location,  or Lessor may lease the  property  on the
Premises pending sale or other disposition. If Lessor leaves the property on the
Premises or stores it at another  location  owned or controlled by Lessor,  then
Lessor may charge Lessee a reasonable  fee for storing and handling the property
comparable  to what  Lessor  would  have  had to pay to a third  party  for such
services.  Lessor  will not be liable  under any  circumstances  to Lessee or to
anyone  else for any  damage  to the  property.  Lessor  shall  proceed  to sell
Lessee's property in accordance with Arizona law.

     4.   RELETTING THE PREMISES. Lessor may relet the Premises at whatever rent
and on whatever  terms and  conditions it deems  advisable.  The term of any new
Lease may be  shorter  or  longer  than the  remaining  term of this  Lease.  In
reletting  the  Premises,  Lessor  may make any  alterations  or  repairs to the
Premises it feels are  necessary or  desirable;  may subdivide the Premises into
more  than  one  unit and  lease  each  portion  separately;  may sell  Lessee's
improvements,  fixtures  and other  property  located an the Premises to the new
tenant,  or include  such  improvements,  fixtures  and  property as part of the
Premises  without  additional cost may advertise the Premises for sale or lease;
may hire broken or other agents; and, may do anything else it deems necessary or
helpful in reletting the Premises. Lessee will be liable to Lessor for all costs
and expenses of the reletting including but not limited to rental concessions to
the new tenant,  broker's commissions and tenant  improvements,  and will remain
liable for the rent and all other  charges  arising  under the  Lease,  less any
income received from the new tenant, unless the Lease is terminated as set forth
below.

     5.   TERMINATION OF LEASE. Lessor may terminate the Lease at any time after
Lessee defaults by sending a written notice to Lessee expressly stating that the
Lease is being  terminated.  Termination  will be  effective  on the date of the
notice or on any other date set forth in the notice.  Until  Lessor sends Lessee
such a notice,  the Lease will remain in full force and effect,  and Lessee will
remain  liable  for paying  the rent and other  charges  that come due under the
Lease and for performing  all other terms and conditions of the Lease.  No other
action taken by Lessor,  including  repossession  of the  Premises,  removing or
selling Lessee's separate property,  reletting the Premises,  or filing suit for
possession or for damages,  will  terminate the Lease or release Lessee from its
continuing liability for complying with its terms and conditions.

     6.   DAMAGES.  Lessor may recover from Lessee all costs and expenses Lessor
incurs as a direct or indirect  consequence  of Lessee's  breach,  including the
cost of storing and selling  Lessee's  property,  reletting  the  Premises,  and
bringing suit against Lessee for  possession or damages.  If Lessor made or paid
for  any  improvements  to the  Premises,  or  granted  Lessee  any  improvement
allowance or credit  against rent for Lessee's  improvements,  then Lessor shall
also  be  entitled  to  recover  the  unamortized  portion  of the  cost of such
improvements or the amount of such allowance or credit determined by multiplying
the total  amount  of such  cost or  allowance  or  credit  by a  fraction,  the
denominator of which is the total number of months of the initial lease term and
the numerator of which is the number of months of the term remaining at the time
of Lessee's  default.  Also, if the Lease provides for any month during which no
rent or a reduced rent is payable,  or for any other rent  concession to Lessee,
then,  upon  default,  Lessee  shall  become  liable for the full  amount of the
monthly base rent, plus applicable  taxes, for such months,  and Lessor shall be
entitles to recover as  additional  rent the amount  that would have  payable by
Lessee for such months if the monthly  base rent  provided  for had been payable
throughout  the entire term of the Lease.  Unless Lessor  terminates  the Lease,
Lessee will also  remain  liable for any  difference  between the rent and other
charges  called  for by the Lease and the rent and other  charges  collected  by
Lessor from any new tenant For any month in which  Lessor  collects  less from a
successor tenant than is payable under this Lease, Lessor may demand that Lessee
immediately make up the difference,  and Lessor may bring suit against Lessee if
Lessee fails to do so. If Lessor does  terminate the Lease,  then Lessee will no
longer be liable on a continuing  monthly  basis for the rent and other  charges
that would have  become due under the Lease  thereafter,  but Lessee will remain
liable for all sums accrued under the Lease to the date of termination,  as well
as for all  costs  and  expenses  incurred  by  Lessor,  and any  other  damages
sustained by Lessor,  as a  consequence  of Lessee's  breach.  Also,  Lessor may
recover  from Lessee the  difference  between  the present  value at the date of
termination  of the rent  payable  under law or in ui for  breach  of  contract,
damages or other appropriate  relief,  The rights and remedies  described herein
are cumulative,  not exclusive,  and Lessors exercise of any one right or remedy
will not preclude the simultaneous or subsequent  exercise of any other right or
remedy.

13.  INDEMNIFICATION  OF  LESSOR;  INSURANCE.  Lessor  shall  not be  liable  or
answerable to Lessee or any other person,  firm or corporation for any injury or
damage  resulting  from the  condition,  or any defect in, the Premises.  Lessee
agrees to  indemnify  Lessor  against.  and hold  Lessor  and the  Premises  and
Building  free  and  harmless  from  any  and  all  penalties,  costs,  expenses
(including attorney's fees), claims, demands and causes of action arising out of
or in  connection  with  (a)  any  accident  or  other  occurrence  in or on the

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<PAGE>
facilities (including, without limiting the generality of the term "facilities",
stairways,  passageways  or  hallways),  the use of  which  Lessee  may  have in
conjunction  with other  tenants of the  Building,  which such  injury or damage
shall be caused in part or in whole by the act,  neglect,  fault or  omission of
any duty with respect to the same by Lessee,  its agents,  servants,  employees,
invitees. permittees,  customers, clients or guest, (b) the condition of, or and
condition  of, or any defect in,  Lessee's  fixtures  or  equipment  or any part
thereof,  (c) the use or  occupancy  of the  Premises by Lessee or any tenant of
Lessee,  or (d) any breach of this Lease by Lessee.  Lessor is not liable  foray
lost or stolen items in the possession of Lessee's office.

     Lessee agrees to and shall at its own cost and expense procure and maintain
during the entire Lease Term and any  extensions  thereof  comprehensive  public
liability insurance covering the Premises and their surrounding areas and naming
Lessor as an additional  Insured.  The liability  coverage tinder such insurance
shall not be less than Five  hundred  Thousand  Dollars  ($500,000)  for i4my or
death of one person in any one  accident  or  occurrence;  One  Million  Dollars
($1,000,000)  for injury or death of more than one person m any one  accident or
occurrence; and One Hundred Thousand Dollars ($100,000) for property damage. The
amounts of insurance  coverage stated herein may be reduced by mutual  agreement
of the parties. Any such reduction must be stated In writing and executed by the
parties.  Lessee  shall  provide  Lessor  with  certificates  of such  insurance
evidencing  Lessee's  compliance.  All policies of insurance  shall also provide
that such  insurance  will not be  canceled,  except after ten (10) days written
notice to Lessor The original of all policies  shall remain in the possession of
the  Lessee,  provided  however,  that the  Lessor  shall be issued  copies by a
responsible  company or  companies  authorized  to do  business  in the State of
Arizona. In no event shall the limits of said policies be considered as limiting
the liability of Lessee to Lessor under the first section of this Paragraph 13.

14.  USE OF PREMISES.  Lessee  shall not do or permit  anything to be done which
will invalidate or increase the cost of any fire, extended coverage or any other
insurance policy covering the Building and/or property located therein.

     Lessee shall not do or permit  anything to be done in or about the Premises
which will in any way obstruct or interfere  with the rights of other tenants or
occupants of the floor, or injure or annoy them, or use or allow the Premises to
be sued for any improper,  immoral, unlawful or objectionable purpose, nor shall
Lessee cause, maintain or permit any nuisance in, on or about the Premises. This
prohibition  includes,  but is not limited to.  loud music.  other loud  noises,
burning incense or other offensive or objectionable odors.

     Lessee may use and occupy the leased  Premises  for general  office use and
for no other  business  or purpose  without  written  consent of Lessor.  Lessee
shall,  at its own expense,  perform and fully satisfy all laws,  statutes,  and
regulations  which may relate to or affect the occupancy of the leased  Premises
or any governmental authorities having jurisdiction over the subject Premises.

15.  KEYS.  Lessor will supply one (i) key to the door of each of office- Lessee
will pay the Building's  prevailing charge for elevator keys,  security cards or
keys to enter the building after normal  business  hours,  or additional  office
keys. Lessor is not responsible for changing any lock, If the master key kept by
Lessor's  receptionist is stolen,  lost or misplaced,  Lessor is not responsible
for changing  Lessee's locks.  Lessee  understands that Lessor is not liable for
thefts  and  Lessee  may  install a dead bolt lock on or change  the  tumbler to
Lessee's office door (s) upon written approval of Lessor;  in which event Lessee
must  give a copy  of the  key to  Lessor  to be  used  in  emergencies  and for
maintenance  purposes.  Lessee  agrees to return all keys to Lessor  immediately
upon vacating its office.  Failure to return all keys immediately will result in
a charge of Lessee for changing the locks, which will be an amount not less that
Twenty-five Dollars ($25). Lessee agrees to pay this charge within ten (10) days
of request by Lessor.

16.  ENTRY BY LESSOR.  Lessor  shall have the right to enter the Premises at any
time to  inspect  the same or to cure any  default  (including  a breach  of the
Building's  rules and  regulations),  to supply any  service to be  provided  by
Lessor hereunder,  to submit the Premises to prospective  purchaser,  tenants or
mortgagees.  to post  notices of  non-responsibility,  and to alter,  improve or
repair the Premises and any portion of the building,  without abatement of rent,
necessary  structures where reasonably  required by the character of the work to
be  performed,  always  providing  that the  business  of  Lessee  shall  not be
interfered with unreasonably. Lessee hereby waives any claim for damages for any
injury,  inconvenience  or  interference  with  Lessee's  business,  any loss of
occupancy or quiet  enjoyment of the Premises,  and any other loss occasioned by
Lessor's entry for any of the aforesaid purposed.

     For each of the  aforesaid  purposes,  Lessor  shall at all times  have and
retain a key with which to unlock all of the doors upon the Premises,  excluding
Lessee's  vaults,  and  Lessor  shall have the right to use any and all means to
open said doors in an emergency in order to obtain  entry to the  Premises,  and
any entry to the Premises  obtained by Lessor shall not under any  circumstances
constitute  forcible or unlawful  entry into or a detainer of the Premises or an
eviction of Lessee from the Premises or any portion  therefor.  Lessor shall not
be liable for the consequences of admitting by passkey,  or refusing to admit to
the Premises, Lessee or any agent or employee of Lessee.

17.  LESSOR'S  RIGHT  TO  CURE  DEFAULTS.  All  convents  and  agreements  to be
performed  by Lessee  under  any of the terms of the Lease  shall be at its sole
cost and expense and. except as otherwise  specifically provided herein, without
any  abatement of rent.  If Lessee shall fall to pay any sum of money other than
rent  required to be paid by it hereunder or shall fail to perform any other act
on its part to be performed hereunder,  Lessor may but shall not be obligated so
to do, and  without  waiving any rights of Lessor or  releasing  Lessee from any

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<PAGE>
obligations of Lessee hereunder, make such payment or perform such other ad. All
sums so paid or expenses  incurred by Lessor and all necessary  incidental costs
together with interest  thereon at the rate of eighteen  percent (18%) per annum
from the date of such  payment  by  Lessor  shall be  considered  as rent  owing
hereunder  and shall be payable to Lessor on demand or, at the option of Lessor,
may be added to any rent then due or  thereafter  becoming due under this Lease.
In  addition.  Lessor shall have the same Night and remedies in the event of the
nonpayment  thereof be Lessee as in the case of default by lessee in the payment
of any rent hereunder.

18.  DELAYS. DEFAULT BY LESSOR. Lessor shall not be responsible for any delay or
failure In the observance or performances of any term or condition of this Lease
to be observed or performed by Lessor to the extent that such delay results from
action or order of governmental authorities;  civil commotions;  strikes, fires,
ads of God or the public  enemy;  act or default of any Lessee in the  Building,
inability  to procure  labor,  material,  fuel,  electricity,  or other forms of
energy; or any other cause beyond the reasonable  control of Lessor,  whether or
not  similar to the  matters  herein  specifically  enumerated.  Any delay shall
extend by like time any period or  performance by Lessor and shall not be deemed
a breach of, or failure to perform, this Lease or any provisions thereof.

     In the event of any  default  under this Lease by  Lessor.  Lessee,  before
exercising  any rights that it may have at law to cancel this Lease,  shall have
given  notice  of such  default  to  Lessor  and  shall  have  offered  Lessor a
reasonable  opportunity  to correct and cure the default,  Lessee also agrees to
give the holders of any mortgages or deeds of trust  (mortgages),  by registered
mail, a copy of any notice of default served upon Lessor, provided that prior to
such notice Lessee has been notified in writing (by way of Noticed Assignment of
Rents and Leases,  or  otherwise) of the  addresses of such  mortgagees.  Lessee
further  agrees that If Lessor shall have failed to cure such default within the
aforesaid time limit,  then the mortgagees shall have an additional  thirty (30)
days within which to one such default or if such default  cannot be cured within
that time,  then such  additional time as may be necessary if within such thirty
(30) days any mortgagees  has commenced and is diligently  pursuing the remedies
necessary to cure such default  (including  but not limited to  commencement  of
foreclosure  proceedings if necessary to effect such cure),  in which event this
Lease  shall not be  terminated  while  such  remedies  are being so  diligently
pursued.

19.  NOTICE TO LESSOR OR LESSEE.  All  notices  required  or desired to be given
under this Lease must be in writing and shall be  personally  given or delivered
by certified or  registered  mail  addressed to the Lessee at the address of the
Premises and to the Lessor at the address of the Suite in which the Premises are
located.  Personal delivery to the floor receptionist does not constitute notice
to either  Lessor or Lessee.  Either party may, by written  notice to the other,
specify a different address for notice purposes

20.  TENANT HOLDOVER.  In the event that Lessee,  without the written consent of
Lessor  shall bold over the  expiration  of the term of this Lease,  then Lessee
hereby  waives all notice to quit and agrees to pay Lessor,  for the period that
the Lessee is in possession after the expiration of this Lease, a monthly rental
which is twice the total monthly rental payable  pursuant to Paragraph 3 of this
Lease,  together with all damages sustained by Lessor on account of such holding
over.  If  Lessee  occupies  any part of the  Premises  for any  portion  of any
calendar  month,  Lessee  will be liable for rent for the full  calendar  month.
Lessee expressly agrees to hold Lessor harmless for all loss and damages. direct
or consequential,  which Lessor may suffer in defense of claims by other parties
against  Lessor  arising out of the holding  over by Lessee,  Including  without
limitation,  attorney's  fees which may be incurred by Lessor in defense of such
claims.  The foregoing  provision  shall not service as permission for Lessee to
hold over nor serve to extend the term of this Lease.  Acceptance of rent by the
Lessor subsequent to the expiration of the term shall not constitute  consent to
any holding oven

21.  TRANSFER  OF  LESSORS   INTEREST.   In  the  event  Lessor   transfers  its
reversionary  interest  in the  Premises  (other  than a transfer  for  security
purposes only),  Lessor shall be relieved of all obligations  accruing hereunder
after the effective  date of such transfer,  including,  but not limited to, the
return of security  deposits or other funds held by Lessor,  provided  that such
obligations have been expressly assumed in writing by the transferee, and Lessee
agreed to attorn to the transferee.

     Lessee  agrees at any time and from time to time at the  request of Lessor,
to execute, acknowledge and deliver to Lessor within ten (10) days from the date
of said request, a statement in writing certifying that this Lease is unmodified
and in full and effect (or if there have been  modifications).  and the dates to
which the fixed rent and other  charges  have been paid in  advance,  if any, it
being intended that any such statement  delivered pursuant to this paragraph may
be relied  upon by any  prospective  purchaser,  mortgagee  or  assignee  of any
mortgage of the Premises.

22.  RETURN OF POSSESSION. Lessee shall vacate the leased Premises in good order
and  repair  in which  such  property  was at the  commencement  of this  Lease,
ordinary wear and tear  excepted.  Lessee shall remove all its property no later
than 5:00 pm on the day upon  which  this Lease or any  extension  thereof  ends
whether  upon  notice or by holdover or  otherwise.  Lessor  shall have the same
rights to enforce this covenant by ejectment and for damages or otherwise as for
the breach of any other conditional therein, and remove from the leased Premises
all  property,  materials or equipment  Installed by Lessee,  provided that such
property is removed without injury of the leased Premises.

23.  CONFERENCE ROOM.  Lessee may use the conference  mom(s) on a reserved basis
or without reservation If not previously reserved, Lessee will not be allowed to
request any standing or permanent reservation of the conference room(s).  Lessee
will pay the then-current rate for conference morn usage over five (5) hours per

                                        7
<PAGE>
calendar month per office leased.  Any use of the conference room(s) by Lessee's
visitors  will be  considered  to be use by  Lessee,  whether  or not  Lessee is
present at the lime of such use, and Lessee will be responsible  for any charges
incurred for such use.

24.  LESSOR'S  EMPLOYEES.  Lessee  acknowledges that Lessor expends  substantial
amounts  of money and effort to  acquire,  train and  retain  employees  for the
services  provided to Lessee,  including  employment  agency and training costs.
Lessee agrees that during the term of, or any extension or renewal of, the Lease
and for a period on one (i) year thereafter,  Lessee will not hire or attempt to
hire In any capacity whatever, full-time, part-time or on a work for hire basis,
on behalf of itself or any person or entity by whom Lessee (if an individual) is
employed, any employee of Lessor. This prohibition shall apply during the period
of any such employee's employment by Lessor and for ninety (90) days thereafter.
The  parties  agree that it would be very  difficult  to  ascertain  the damages
stiffen by Lessor for Lessee's breach of the provision.  Therefore, it is agreed
that in the event of a breach of this  provision  by Lessee,  Lessee will pay to
Lessor as  liquidated  damages,  and not as a penalty,  a sum of money  equal to
three (3) months pay for the subject  employee at the rate paid by Lessor during
such employee's last full month employment by Lessor.

25.  ATTORNEY'S  FEES.  In the event it becomes  necessary  for either  party to
employ an attorney  in order to enforce  the terms of this Lease,  or to protect
the rights of either party hereunder,  and such party is successful in an action
in connection therewith, the other party agrees to pay such prevailing party the
reasonable attorney's fees and legal costs incurred.

26.  RESTRICTION.  Lessee  will  not  bring,  copier,  postage  meter,  or other
equipment  provided by Lessor for Lessee's  benefit into the Suite without prior
written approval of Lessor.

27.  COVENANT NOT TO COMPETE. Tenant agrees that during the terms of this Lease,
he shall  not in or about the  Premises,  engage in the  primary  or  incidental
business of providing  photocopy  service,  facsimile receipt and transmissions,
secretarial  services of any kind, or any similar services which are provided by
Lessor for the benefit of Its tenants.

28.  SPECIAL CONDITIONS.

     A.   Targun Properties,  Inc. will release National Scientific from Offices
          #2 and #5 as of  September 1, 1998.  Targun  Properties,  Inc.  offers
          Office #25 to National  Scientific as an  alternative  office,  at the
          monthly rent rate of $460.00 per month.

     B.   If,  at any  lime,  National  Scientific  defaults  on the  new  lease
          agreement,  National  Scientific  will be responsible  for the monthly
          rent of all four  original  offices  (#2,  5, 23, & 24)  rented in the
          original lease agreement.

     C.   National  Scientific may take  possession of Office #25  approximately
          September 1, 1998.

     D.   Tenant agrees to give Landlord the desk in #2 at no charge.

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<PAGE>
LESSEE:                                 LESSOR:
NATIONAL SCIENTIFIC CORPORATION         TARGUN PROPERTIES, INC.

BY: /s/ VERNON TRAYLOR                  By: /s/ MICHAEL TARGUN
    ---------------------------------       ---------------------------------
    VERNON TRAYLOR                          MICHAEL TARGUN

TITLE: Corp Secretary                   TITLE: PRESIDENT

SS.#/TAX ID  86-0837077
             --------------------
HOME
ADDRESS:
             --------------------
PHONE:       602-954-1492
             --------------------
DATE:        August 24, 1998
             --------------------

                                        9

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