Document:

EXHIBIT 4.2

                         FORM OF SUBSCRIPTION AGREEMENT

     This Subscription  Agreement (the "Agreement" or "Subscription  Agreement")
is made as of the date  indicated on the signature page of this Agreement by and
between National  Scientific  Corporation,  a Texas corporation (the "Company"),
and each party who is a signatory hereto and any other  Subscribers who are made
a party to this Agreement  pursuant to Section 1  (individually,  a "Subscriber"
and collectively, the "Subscribers").

                                    RECITALS

     The Company hereby offers to persons who qualify as "accredited  investors"
as  defined  in Rule  501 of  Regulation  D  promulgated  under  the  under  the
Securities Act of 1933, as amended (the "Securities  Act"), 10 million units for
aggregate gross proceed of $1.1 million ("Base Offering") in a private placement
("Offering")  to be conducted  through  Casimir Capital L.P., as Placement Agent
("Casimir" or the "Placement Agent"). The Company is offering the units pursuant
to Rule 506 of  Regulation  D  promulgated  under the  Securities  Act. The Base
Offering  will be  conducted  on a "best  efforts,  all or none  basis," as more
thoroughly described in the Confidential  Offering  Memorandum,  dated March 15,
2004  (hereinafter,  with all Exhibits and Schedules  annexed  thereto,  and any
supplements and/or amendments, the "Offering Memorandum").  Each unit (a "Unit")
shall consist of (i) one (1) share of common  stock,  par value $0.01 per share,
of the Company (the "Common  Stock"),  and (ii) a 5-year warrant (the "Warrant")
to purchase three quarters (3/4) of a share of Common Stock.  The offering price
per Unit ("Purchase  Price") shall be $0.11.  The initial exercise price of each
Warrant shall be equal to the Purchase Price.

     During the Offering  Period (as hereinafter  defined),  the Company has the
option to sell up to an additional  4,545,455  Units,  for additional  aggregate
gross  proceeds of up to $500,000,  thereby  possibly  increasing  the aggregate
gross  proceeds  of  the  Offering  to  up to  $1.6  million  (hereinafter  such
additional gross proceeds of up to $500,000,  referred to as the "Over-allotment
Option").  In the event the Company exercises the Over-allotment  Option, it may
choose to have more than one closing in connection with the Offering.

     The Common  Stock,  Warrants  and  shares of Common  Stock  underlying  the
Warrants  ("Warrant  Shares"),  including any such securities sold in connection
with the Over-allotment  Option,  shall collectively be referred to as the "Unit
Securities." The term "Offering" shall include any Units sold in connection with
the Base Offering and the Over-allotment Option.

     In consideration of the premises and the mutual covenants  contained herein
and other good and valuable consideration,  the receipt and sufficiency of which
are  hereby  acknowledged,  the  Company  and the  Subscribers  hereby  agree as
follows:

                                   ARTICLE I
                         PURCHASE AND SALE OF SECURITIES

     1.1  PURCHASE  AND  SALE OF  UNIT  SECURITIES.  Subject  to the  terms  and
conditions  set forth herein,  Subscriber  hereby  subscribes  for and agrees to
purchase  from the  Company  and the  Company  agrees  to issue and sell to each
Subscriber  at the Closing the number of Units set forth on the  signature  page
hereto.

     1.2  PAYMENT.  Prior to the Closing,  each Subscriber will deposit, by wire
transfer  or  check  of  immediately  available  funds  in  accordance  with the
Company's wire instructions,  the aggregate Purchase Price set forth beneath its

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name on the signature page hereof in a segregated  escrow account with an escrow
agent reasonably  acceptable to Casimir.  The Company will deliver  certificates
representing  the  Common  Stock and  Warrants  within 10  business  days of the
earlier to occur of the (a) Closing Date or (b) the Termination Date.

     1.3  OFFERING  PERIOD.  Unless  terminated  earlier in the  Company's  sole
discretion, the offering period (the "Offering Period") will expire May 14, 2004
(subject to extension at the  Company's  discretion  for an  additional  30 days
without notice to investors) (the "Termination Date").

                                   ARTICLE II
                   SUBSCRIBER'S REPRESENTATIONS AND WARRANTIES

     Each  Subscriber  represents  and  warrants  to the  Company  and  Casimir,
severally  and solely with respect to itself and its purchase  hereunder and not
with respect to any other Subscriber, that:

     2.1  INVESTMENT  PURPOSE.  The Subscriber is purchasing the Unit Securities
for its own  account  and not with a present  view  toward  the  public  sale or
distribution  thereof;  provided,  however,  that by making  the  representation
herein, the Subscriber does not agree to hold any of the Unit Securities for any
minimum or other  specific  term and  reserves  the right to dispose of the Unit
Securities  at any  time  in  accordance  with  or  pursuant  to a  registration
statement or an exemption under the Securities Act.

     2.2  ACCREDITED   SUBSCRIBER  STATUS.  The  Subscriber  is  an  "accredited
investor"  as  defined  in Rule  501(a)  of  Regulation  D. The  Subscriber  has
delivered  to the  Company a  Confidential  Investor  Questionnaire  in the form
annexed to the Offering  Memorandum.  The  Subscriber  hereby  represents  that,
either by reason of the  Subscriber's  business or financial  experience  or the
business or financial  experience of the Subscriber's  advisors,  the Subscriber
has the capacity to protect the  Subscriber's  own interests in connection  with
the transaction  contemplated hereby and is capable of evaluating the merits and
risks of an investment in the Unit Securities.

     2.3  RELIANCE  ON  EXEMPTIONS.  The  Subscriber  understands  that the Unit
Securities are being offered and sold to it in reliance upon specific exemptions
from the registration requirements of United States federal and state securities
laws and that the  Company is relying  upon the truth and  accuracy  of, and the
Subscriber's  compliance  with,  the  representations,  warranties,  agreements,
acknowledgments  and  understandings of the Subscriber set forth herein in order
to determine the  availability  of such  exemptions  and the  eligibility of the
Subscriber to acquire the Unit Securities.

     2.4  INFORMATION.  (a) The Subscriber  and its advisors,  if any, have been
furnished with all materials  relating to the business,  finances and operations
of the  Company,  and  materials  relating  to the  offer  and  sale of the Unit
Securities  that have been requested by the Subscriber or its advisors,  if any,
including,  without limitation,  the Offering Memorandum. The Subscriber and its
advisors,  if any,  have been afforded the  opportunity  to ask questions of the
Company.  Neither  such  inquiries  nor any  other due  diligence  investigation
conducted by Subscriber or any of its advisors or representatives  modify, amend
or affect the Subscriber's  right to rely on the Company's  representations  and
warranties contained in Article III below.

          (b)  The  Subscriber  acknowledges  and agrees  that  Casimir  has not
supplied any information for inclusion herein other than  information  furnished
in writing to the Company by Casimir  specifically for inclusion herein relating
to Casimir,  that Casimir has no responsibility for the accuracy or completeness
of the  Offering  Memorandum,  and that the  Subscriber  has not relied upon the
independent  investigation  or  verification,   if  any,  which  may  have  been
undertaken by Casimir.

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     2.5  ACKNOWLEDGEMENT  OF RISK. The Subscriber  acknowledges and understands
that its  investment  in the Unit  Securities  involves  a high  degree of risk,
including,  without  limitation,  those risk factors set forth in the  Company's
Form  10-KSB for the fiscal  year ended  September  30,  2003,  and that (i) the
Company has  experienced  losses for the past 7 years,  including  net losses of
$1,883,489,  $952,564 and $210,778  for the years ended  September  30, 2002 and
2003 and the quarter ended  December 31, 2003,  respectively,  and its auditor's
report for the years ended September 30, 2002 and 2003 raise doubt regarding the
ability of the Company to continue as a going concern;  (ii) the Company changed
its focus in February 2002 to applications of electronic devices in the location
services market and, accordingly,  is considered a development stage company and
as such,  has  limited  operating  history in its current  business  and has not
generated  significant  revenues;  (iii) the Company is  dependent  upon raising
capital  from  investors  and  requires  substantial  funds in  addition  to the
proceeds from the sale of Unit Securities;  (iv) an investment in the Company is
highly speculative, and only Subscribers who can afford the loss of their entire
investment should consider investing in the Company and the Unit Securities; (v)
the Subscriber may not be able to liquidate its investment; (vi) transferability
of the Unit Securities is extremely limited; (vii) in the event of a disposition
of the Unit  Securities,  the  Subscriber  could  sustain the loss of its entire
investment and (viii) the Company has not paid any dividends on its Common Stock
since  inception  and  does not  anticipate  the  payment  of  dividends  in the
foreseeable future.

     2.6  GOVERNMENTAL REVIEW. The Subscriber  understands that no United States
federal  or state  agency or any other  government  or  governmental  agency has
passed upon or made any  recommendation  or  endorsement of the Securities or an
investment therein.

     2.7  TRANSFER OR RESALE. The Subscriber understands that:

          (a)  except as  otherwise  provided in Article V, the Unit  Securities
have not been and are not  being  registered  under  the  Securities  Act or any
applicable state securities laws and,  consequently,  the Subscriber may have to
bear the risk of owning the Unit  Securities  for an  indefinite  period of time
because the Unit Securities may not be transferred  unless (i) the resale of the
Unit Securities is registered  pursuant to an effective  registration  statement
under the  Securities  Act; (ii) the  Subscriber has delivered to the Company an
opinion of counsel reasonably  acceptable to the Company (in form, substance and
scope  customary  for  opinions of counsel in  comparable  transactions)  to the
effect  that  the  Unit  Securities  to be  sold or  transferred  may be sold or
transferred  pursuant to an exemption from such registration;  or (iii) the Unit
Securities are sold or transferred pursuant to Rule 144;

          (b)  any sale of the Unit  Securities made in reliance on Rule 144 may
be made only in  accordance  with the terms of Rule 144 and,  if Rule 144 is not
applicable,  any resale of the Unit Securities under  circumstances in which the
seller  (or the  person  through  whom the sale is made)  may be deemed to be an
underwriter  (as  that  term is  defined  in the  Securities  Act)  may  require
compliance  with some other  exemption under the Securities Act or the rules and
regulations of the SEC promulgated thereunder; and

          (c)  except as set forth in Article V,  neither  the  Company  nor any
other person is under any obligation to register the Unit  Securities  under the
Securities  Act or any state  securities  laws or to  comply  with the terms and
conditions  of any  exemption  thereunder.  There can be no  assurance  that the
Registration  Statement  provided  for in  Article V will ever be  effective  or
remain  effective,  or that there will be any liquidity with respect to the sale
of the Registrable  Securities (as hereinafter defined), if and when registered.
Subscriber understands that although the Company's Common Stock is traded on the
OTCBB,  there is currently a limited  public market for such  securities and the
price of the Company's  Common Stock has fluctuated  widely in the past. Even if

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the Subscriber is able to sell the Registrable Securities, there is no assurance
regarding a return of or on Subscriber's investment in the Unit Securities.

     2.8  LEGENDS. The Subscriber understands the certificates  representing the
Unit Securities will bear a restrictive  legend in  substantially  the following
form  (and  a  stop-transfer  order  may  be  placed  against  transfer  of  the
certificates for such securities):

     THE SECURITIES  REPRESENTED BY THIS  CERTIFICATE  HAVE NOT BEEN  REGISTERED
UNDER THE  SECURITIES  ACT OF 1933, AS AMENDED,  OR THE  SECURITIES  LAWS OF ANY
STATE OF THE UNITED  STATES.  THE  SECURITIES  MAY NOT BE SOLD,  TRANSFERRED  OR
ASSIGNED  IN  THE  ABSENCE  OF  AN  EFFECTIVE  REGISTRATION  STATEMENT  FOR  THE
SECURITIES  UNDER  APPLICABLE  SECURITIES  LAWS,  OR  UNLESS  OFFERED,  SOLD  OR
TRANSFERRED   PURSUANT  TO  AN  AVAILABLE   EXEMPTION   FROM  THE   REGISTRATION
REQUIREMENTS OF THOSE LAWS.

     2.9  AUTHORIZATION;  ENFORCEMENT.  This Agreement has been duly and validly
authorized,  executed and delivered on behalf of the  Subscriber  and represents
the valid and binding  obligations of the  Subscriber  enforceable in accordance
with its terms, subject to the effect of any applicable bankruptcy,  insolvency,
reorganization,  moratorium  or similar laws  affecting  the rights of creditors
generally and the application of general principles of equity.

     2.10 ACKNOWLEDGEMENTS  REGARDING CASIMIR. The Subscriber  acknowledges that
Casimir  is acting as  placement  agent for the Unit  Securities  being  offered
hereby and will be compensated  by the Company for acting in such capacity.  The
Subscriber  further  acknowledges  that Casimir has acted solely as agent of the
Company in connection  with the offering of the Unit  Securities by the Company,
that the  information and data provided to the Subscriber in connection with the
transactions   contemplated  hereby  have  not  been  subjected  to  independent
verification by Casimir,  and that Casimir makes no  representation  or warranty
with respect to the accuracy or completeness of such information,  data or other
related disclosure material.  The Subscriber further acknowledges that in making
its decision to enter into this  Agreement  and purchase the Unit  Securities it
has  relied  on its own  examination  of the  Company  and  the  terms  of,  and
consequences,   of  holding  the  Unit   Securities.   The  Subscriber   further
acknowledges  that the  provisions  of this Section 2.10 are for the benefit of,
and may be enforced by, Casimir.

     2.11 NOT A REGISTERED  REPRESENTATIVE.  The Subscriber acknowledges that if
he or she is a Registered  Representative of an NASD member firm, he or she must
give such firm the notice required by the NASD's Rules of Fair Practice, receipt
of  which  must be  acknowledged  by  such  firm  in the  Confidential  Investor
Questionnaire.

     2.12 INDEMNIFICATION.  The  Subscriber  agrees to hold the  Company and its
directors,  officers,  employees,  controlling  persons  and  agents  (including
Casimir and its officers,  directors,  partners, employees, counsel, controlling
persons and agents) and their respective heirs, representatives,  successors and
assigns  harmless and to  indemnify  them against all  liabilities,  costs,  and
expenses incurred by them as a result of, (i) any misrepresentation  made by the
Subscriber  contained in this  Agreement  (including the  Confidential  Investor
Questionnaire,  (ii) any sale or  distribution by the Subscriber in violation of
the  Securities  Act or any  applicable  state  securities or "blue sky" laws or
(iii)  any  untrue  statement  of a  material  fact made by the  Subscriber  and
contained herein.

     2.13 AFFILIATE  INVESTMENTS.  Subscriber  acknowledges and understands that
certain affiliates of Casimir may purchase Unit Securities in the Offering.

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                                  ARTICLE III
                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     The Company represents and warrants to the Subscribers and Casimir that:

     3.1  ORGANIZATION  AND  QUALIFICATION.  The  Company is duly  incorporated,
validly  existing and in good  standing  under the laws of the  jurisdiction  in
which it is incorporated, with full power and authority (corporate and other) to
own,  lease,  use and operate its properties and to carry on its business as and
where now owned,  leased,  used,  operated  and  conducted.  The Company is duly
qualified to do business and is in good standing in every  jurisdiction in which
the nature of the business conducted by it makes such  qualification  necessary,
except where the failure to be so qualified or in good standing would not have a
Material Adverse Effect. The Company has no direct or indirect subsidiaries.

     3.2  AUTHORIZATION;   ENFORCEMENT.   (a)  The  Company  has  all  requisite
corporate  power and  authority to conduct the Offering as  contemplated  in the
Offering  Memorandum and to enter into and to perform its obligations under this
Agreement,  the Placement  Agent  Agreement,  Escrow  Agreement,  Right of First
Refusal  Agreement  and Mergers and  Acquisition  Agreement  (collectively,  the
"Transaction Documents"), to consummate the transactions contemplated hereby and
thereby and to issue the Unit  Securities in  accordance  with the terms hereof,
and to issue the Placement Agent Warrants and Initiation  Warrants in accordance
with the  Placement  Agent  Agreement,  and to issue the shares of Common  Stock
underlying  the  Placement  Agent  Warrants  and  Initiation  Warrants;  (b) the
execution,  delivery and performance of the Transaction Documents by the Company
and the consummation by it of the transactions  contemplated  hereby and thereby
(including  without  limitation the issuance of the  Securities)  have been duly
authorized  by the  Company's  Board of  Directors  and no  further  consent  or
authorization  of the Company,  its Board of Directors,  or its  shareholders is
required;  (c) Each of the  Transaction  Documents has been duly executed by the
Company;  and (d) Each of Transaction  Documents  constitutes a legal, valid and
binding obligation of the Company  enforceable against the Company in accordance
with its terms, subject to the effect of any applicable bankruptcy,  insolvency,
reorganization,  or moratorium or similar laws affecting the rights of creditors
generally and the application of general principles of equity.

     3.3  CAPITALIZATION.  The  authorized  and  issued  capitalization  of  the
Company is as set forth in the Offering  Memorandum.  All outstanding  shares of
Common Stock are, and all shares which may be issued pursuant to the Transaction
Documents or otherwise will be, when issued,  duly  authorized,  validly issued,
fully  paid and  nonassessable  and will not be subject  to  preemptive  rights.
Except as set forth on SCHEDULE 3.3, there are not issued, reserved for issuance
or outstanding (a) any shares of capital stock or other voting securities of the
Company,  (b) any securities of the Company  convertible into or exchangeable or
exercisable for shares of capital stock or voting securities of the Company, (c)
any warrants,  calls,  options or other rights to acquire from the Company,  and
any obligation of the Company to issue, any capital stock,  voting securities or
securities  convertible into or exchangeable or exercisable for capital stock or
voting securities of the Company.

     3.4  ISSUANCE  OF  SECURITIES.  The shares of Common  Stock of the  Company
purchased  under this  Agreement,  and the shares of Common Stock  issuable upon
exercise of the Warrants,  Placement  Agent  Warrants and  Initiation  Warrants,
including such  indeterminate  number of shares of Common Stock as may be issued
as a result of the anti-dilution provisions contained therein (collectively, the
"Warrant Shares"), are duly authorized and, upon issuance in accordance with the
terms of this Agreement,  the Placement Agent Warrants and Initiation  Warrants,
as the case may be, will be validly issued, fully paid and non-assessable,  free
from all taxes,  liens,  claims,  encumbrances  and charges  with respect to the
issue thereof,  will not be subject to preemptive rights or other similar rights
of  stockholders of the Company,  and will not impose personal  liability on the

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holders thereof.  The Company has a sufficient number of authorized but unissued
shares of Common Stock, assuming the Maximum Offering,  giving effect to (i) the
exercise of the Warrants,  Placement Agent Warrants and Initiation  Warrants and
(ii)  the  conversion,   exercise  and/or  exchange  of  all  other   securities
outstanding  on  the  date  hereof,   which  are  convertible,   exercisable  or
exchangeable for shares of Common Stock. As of the First Closing Date and for as
long as the  Warrants,  Placement  Agent  Warrants and  Initiation  Warrants are
outstanding,  the Company  shall have  reserved a  sufficient  number of Warrant
Shares to be issued upon exercise of the Warrants,  Placement Agent Warrants and
Initiation Warrants.

     3.5  NO CONFLICTS; NO VIOLATION.

          (a)  Other than as set forth in SCHEDULE 3.5, the execution,  delivery
and  performance  of each of the  Transaction  Documents  by the Company and the
consummation by the Company of the transactions  contemplated hereby and thereby
(including,  without  limitation,  the issuance of the Securities)  will not (i)
conflict  with or result in a violation of any provision of its  Certificate  of
Incorporation or Bylaws, (ii) violate or conflict with, or result in a breach of
any  provision  of, or  constitute  a default  (or an event which with notice or
lapse of time or both  could  become a  default)  under,  or give to others  any
rights of termination,  amendment (including without limitation,  the triggering
of any  anti-dilution  or right of first  refusal  provision),  acceleration  or
cancellation of, any agreement, indenture, patent, patent license, or instrument
to which the Company is a party ( any one or all being referred to as a "Company
Obligation"),  or (iii)  to the best of the  Company's  knowledge,  result  in a
violation of any law, rule,  regulation,  order,  judgment or decree  (including
U.S.  federal and state  securities  laws and regulations and regulations of any
self-regulatory  organizations  to  which  the  Company  or its  securities  are
subject)  applicable  to the  Company or by which any  property  or asset of the
Company is bound or affected  (except for such  conflicts,  breaches,  defaults,
terminations,  amendments, accelerations,  cancellations and violations as would
not, individually or in the aggregate, have a Material Adverse Effect).

          (b)  The Company is not in violation of its Articles of Incorporation,
Bylaws or other organizational documents and is not in default (and no event has
occurred  which with  notice or lapse of time or both  could put the  Company in
default)  under any  Company  Obligation  to which it is a party or by which any
property  or assets of the  Company is bound or  affected,  except for  possible
defaults as would not, individually or in the aggregate, have a Material Adverse
Effect,  nor is any other party in violation  and/or  breach of any such Company
Obligation.  Each such  Company  Obligation  is the  legal,  valid  and  binding
obligation of the Company enforceable in accordance with its terms.

          (c)  The Company is not  conducting  its  business in violation of any
law,  ordinance or regulation of any governmental  entity, the failure to comply
with which would,  individually  or in the  aggregate,  have a Material  Adverse
Effect.

          (d)  Except as  specifically  contemplated  by this  Agreement  and as
required under the Securities Act and any applicable  state  securities  laws or
any  listing  agreement  with any  securities  exchange or  automated  quotation
system,  the Company is not  required to obtain any  consent,  authorization  or
order of, or make any filing or  registration  with,  any court or  governmental
agency or any regulatory or self  regulatory  agency in order for it to execute,
deliver or perform any of its obligations under any of the Transaction Documents
in accordance  with the terms hereof and thereof,  or to issue and sell the Unit
Securities or Securities  in accordance  with the terms hereof and thereof.  All
consents, authorizations, orders, filings and registrations which the Company is
required to obtain  pursuant to the  preceding  sentence  have been  obtained or
effected on or prior to the date hereof.

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     3.6  SEC  DOCUMENTS,  FINANCIAL  STATEMENTS.  The  Company  has  filed  all
reports,  schedules,  forms, statements and other documents required to be filed
by it  with  the  SEC  since  September  30,  2000,  pursuant  to the  reporting
requirements  of the Exchange Act (all of the foregoing  filed prior to the date
hereof and all exhibits included therein and financial  statements and schedules
thereto and  documents  incorporated  by reference  therein,  being  hereinafter
referred to as the "SEC Documents"). Each Subscriber has had access to, true and
complete  copies of the SEC Documents.  As of their  respective  dates,  the SEC
Documents  complied  in all  material  respects  with  the  requirements  of the
Exchange  Act or the  Securities  Act,  as the case may be,  and the  rules  and
regulations of the SEC promulgated  thereunder  applicable to the SEC Documents,
and  none of the SEC  Documents,  at the  time  they  were  filed  with the SEC,
contained any untrue  statement of a material fact or omitted stating a material
fact required to be stated  therein or necessary in order to make the statements
therein,  in  light  of the  circumstances  under  which  they  were  made,  not
misleading.  As of their  respective  dates,  the  financial  statements  of the
Company  included  in the SEC  Documents  complied  as to  form in all  material
respects with  applicable  accounting  requirements  and the published rules and
regulations of the SEC with respect thereto. Such financial statements have been
prepared in  accordance  with U.S.  generally  accepted  accounting  principles,
consistently  applied,  during  the  periods  involved  (except  (i)  as  may be
otherwise  indicated in such financial  statements or the notes thereto, or (ii)
in the case of unaudited interim statements,  to the extent they may not include
footnotes or may be condensed or summary  statements)  and fairly present in all
material respects the financial  position of the Company as of the dates thereof
and the  results of its  operations  and cash flows for the  periods  then ended
(subject,  in the  case  of  unaudited  statements,  to  normal  year-end  audit
adjustments).  Except as set forth in the financial  statements  included in the
SEC Documents,  the Company has no liabilities,  contingent or otherwise,  other
than  liabilities  incurred in the  ordinary  course of business  subsequent  to
December  31, 2003 and  liabilities  of the type not  required  under  generally
accepted  accounting  principles to be reflected in such  financial  statements.
Such  liabilities  incurred  subsequent  to  December  31,  2003 are not, in the
aggregate,  material to the  financial  condition  or  operating  results of the
Company.

     3.7  ABSENCE OF CERTAIN  CHANGES.  Except as disclosed in the SEC Documents
or on SCHEDULE 3.7, Since December 31, 2003,  there has been no material adverse
change in the assets, liabilities,  business, properties,  operations, financial
condition,  prospects or results of operations  of the Company,  except that the
Company has continued losses from operations.

     3.8  DISCLOSURE.  None of the Offering  Documents  contains or will contain
during the Offering  Period any untrue  statement of a material fact or omits or
will omit to state a material  fact  necessary  in order to make the  statements
contained herein and therein not misleading, in light of the circumstances under
which they were made.

     3.9  ABSENCE OF LITIGATION. Except as disclosed in the SEC Documents, there
is no action, suit, claim, proceeding, inquiry or investigation before or by any
court,  public board,  government agency,  self-regulatory  organization or body
pending or, to the knowledge of the Company, threatened against or affecting the
Company or its officers or directors acting as such that could,  individually or
in the aggregate, have a Material Adverse Effect.

     3.10 INTELLECTUAL  PROPERTY.  The Company  owns or  possesses  adequate and
enforceable rights to use all material patents, patent applications, trademarks,
service marks, trade names, logos, corporate names,  copyrights,  trade secrets,
processes,  mask  works,  licenses,  inventions,  formulations,  technology  and

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know-how  and  other  intangible  property  used or  proposed  to be used in the
conduct of the  Company's  business as currently  conducted or as proposed to be
conducted (the "Proprietary  Rights"). The Company or the entities from whom the
Company has acquired rights has taken all necessary action to protect all of the
Company's  Proprietary  Rights.  The Company has not received any notice of, and
there are not any facts known to the Company which indicate the existence of (i)
any  infringement  or  misappropriation  by  any  third  party  of  any  of  the
Proprietary  Rights,  (ii) any claim by a third party contesting the validity of
any of the Proprietary  Rights or (iii) any  infringement,  misappropriation  or
violation by the Company or any of its  employees of any  Proprietary  Rights of
third parties. To the best of the Company's  knowledge,  neither the Company nor
any of its employees has infringed,  misappropriated  or otherwise  violated any
Proprietary  Rights  of any  third  parties.  To  the  Company's  knowledge,  no
infringement, illicit copying, misappropriation or violation of any intellectual
property  rights of any third party has  occurred or will occur with  respect to
any products currently being sold by the Company or with respect to any products
currently under development by the Company or with respect to the conduct of the
business of the Company or as currently  contemplated.  The Company is not aware
that any of its employees are obligated under any contract (including  licenses,
covenants or  commitments of any nature) or other  agreement,  or subject to any
judgment,  decree or order of any court or  administrative  agency,  that  would
interfere with the use of the  employee's  best efforts to promote the interests
of the  Company or that  would  conflict  with the  business  of the  Company as
currently conducted or as proposed to be conducted.  To the Company's knowledge,
neither the execution and delivery of this Agreement, nor the carrying on of the
business of the Company by the employees of the Company,  nor the conduct of the
business of the Company,  as currently conducted or as proposed to be conducted,
will conflict with or result in a breach of the terms,  conditions or provisions
of, or constitute a default under,  any contract,  covenant or instrument  under
which any such employee is now obligated.

     3.11 TAX  STATUS.  The  Company  has made or filed all  federal,  state and
foreign income and all other tax returns,  reports and declarations  required by
any  jurisdiction to which it is subject (unless and only to the extent that the
Company  has set  aside on its  books  provisions  reasonably  adequate  for the
payment of all unpaid and  unreported  taxes) and has timely  paid all taxes and
other governmental assessments and charges that are material in amount, shown or
determined to be due on such  returns,  reports and  declarations,  except those
being  contested  in good  faith,  and has set  aside  on its  books  provisions
reasonably  adequate for the payment of all taxes for periods  subsequent to the
periods to which such returns,  reports or declarations  apply. To the knowledge
of the Company,  there are no unpaid taxes in any material  amount claimed to be
due by the taxing authority of any jurisdiction, and the officers of the Company
know of no basis for any such claim.  The Company has not executed a waiver with
respect to the statute of  limitations  relating to the assessment or collection
of any foreign,  federal,  state or local tax. None of the Company's tax returns
is presently being audited by any taxing authority.

     3.12 ENVIRONMENTAL LAWS. To the best the Company's  knowledge,  the Company
(i) is in compliance with all applicable  foreign federal,  state and local laws
and  regulations  relating to the  protection  of human  health and safety,  the
environment  or  hazardous  or  toxic   substances  or  wastes,   pollutants  or
contaminants  ("Environmental Laws"), (ii) has received all permits, licenses or
other approvals required of them under applicable  Environmental Laws to conduct
business and (iii) is in  compliance  with all terms and  conditions of any such
permit,  license or approval where, in each of the three foregoing clauses,  the
failure to so comply would have,  individually  or in the aggregate,  a Material
Adverse Effect

     3.13 NO  INTEGRATED   OFFERING.   Neither  the  Company,  nor  any  of  its
affiliates,  nor any  person  acting on its or their  behalf,  has  directly  or
indirectly  made any offers or sales in any security or solicited  any offers to

                                       8
<PAGE>

buy any security under  circumstances that would require  registration under the
Securities  Act of  the  issuance  of the  Securities  to the  Subscribers.  The
issuance of the Securities to the  Subscribers  will not be integrated  with any
other  issuance  of the  Company's  securities  (past,  current or  future)  for
purposes of the Securities Act or any applicable rules of Nasdaq.

     3.14 NO BROKERS.  Neither the Company nor any officer or director has taken
any  action  which  would  give  rise to any claim by any  person or entity  for
brokerage  commissions,  finder's  fees or  similar  payments  relating  to this
Agreement or the  transactions  contemplated  hereby,  except for dealings  with
Casimir,  whose  commissions  and fees will be paid by the  Company.  Similarly,
neither the Company nor any officer or director has taken any action which would
give rise to any claim or right of any person or entity to participate or act as
agent in the Offering, or otherwise generate any fees.

     3.15 INSURANCE.  The Company is insured by insurers of recognized financial
responsibility  against such losses and risks and in such amounts as  management
of the Company  believes to be prudent and customary in the  businesses in which
the Company is engaged.

     3.16 EMPLOYMENT  MATTERS.  The Company is in  compliance  with all federal,
state,  local  and  foreign  laws  and  regulations  respecting  employment  and
employment  practices,  terms and  conditions of employment  and wages and hours
except  where  failure to be in  compliance  would not have a  Material  Adverse
Effect.  The  Company  is not bound by or  subject to (and none of its assets or
properties  is bound by or subject to) any written or oral,  express or implied,
contract, commitment or arrangement with any labor union, and no labor union has
requested  or, to the  Company's  knowledge,  has sought to represent any of the
employees,  representatives  or agents of the Company.  The Company is not aware
that  any  officer  or key  employee,  or that  any  group  of  officers  or key
employees,  intends to terminate their employment with the Company, nor does the
Company  have a present  intention  to terminate  the  employment  of any of the
foregoing.

     3.17 INVESTMENT COMPANY STATUS. The Company is not and upon consummation of
the sale of the Unit Securities  will not be an "investment  company," a company
controlled  by  an  "investment  company"  or  an  "affiliated  person"  of,  or
"promoter" or "principal underwriter" for, an "investment company" as such terms
are defined in the Investment Company Act of 1940, as amended.

     3.18 SUBSIDIARIES.  Except as disclosed in the SEC  Documents,  the Company
does not presently own or control,  directly or indirectly,  any interest in any
other  corporation,  association,  joint venture,  partnership or other business
entity and the  Company  is not a direct or  indirect  participant  in any joint
venture or partnership.

     3.19 NO CONFLICT OF INTEREST;  TRANSACTIONS  WITH AFFILIATE.  Except as set
forth in the SEC Documents, The Company is not indebted, directly or indirectly,
to any of its  beneficial  holders of five percent (5%) or more of the Company's
outstanding Common Stock ("Principal  Stockholders") or officers or directors or
to their respective  spouses or children,  in any amount.  None of the Company's
officers,  directors,  Principal  Stockholders  or employees,  or any members of
their immediate families,  are directly, or indirectly,  indebted to the Company
or,  to the  best of the  Company's  knowledge,  have  any  direct  or  indirect
ownership  interest in any entity with which the Company is  affiliated  or with
which the Company has a business relationship, or any entity which competes with
the  Company,  except  that  officers,  directors,  employees  and/or  Principal
Stockholders  of the Company may own stock in (but not  exceeding  five  percent
(5%) of the  outstanding  capital stock of) any publicly traded company that may
compete with the Company.  To the best of the Company's  knowledge,  none of the
Company's  officers,  directors,  Principal  Stockholders  or  employees  or any

                                       9
<PAGE>

members of their immediate  families are, directly or indirectly,  a party to or
interested  in any material  contract  with the Company or any  Subsidiary.  The
Company is not a guarantor or indemnitor of any indebtedness of any other person
or entity.

     3.20 COMPLIANCE  WITH SARBANES  OXLEY.  To the best of its  knowledge,  the
Company is in compliance with the Sarbanes Oxley Act of 2002.

     3.21 REGISTRATION RIGHTS; SB-2 REGISTRATION STATEMENT.  Except as disclosed
in SCHEDULE 3.21, none of the Company's  security  holders have any registration
rights,  including any right to effect a demand or shelf-registration  under the
Securities Act or exercise any "piggyback"  registration  rights with respect to
any filing under the  Securities  Act. The Company  satisfies  all  requirements
necessary in order to file a  registration  statement  with the SEC on Form SB-2
under the Securities Act.

     3.22 ACKNOWLEDGEMENTS  REGARDING  CASIMIR.  The Company  acknowledges  that
Casimir,  in acting as Placement Agent for the Unit Securities offered hereby in
accordance  with the terms of  Section 2 of the  Placement  Agent  Agreement  is
relying on the  representations  and warranties  contained in this Section 3 and
that such  provisions  of this  Section 3 are for the  benefit  of  Casimir  (in
addition to the Subscribers), and may be enforced by Casimir.

                                   ARTICLE IV
                                    COVENANTS

     4.1  COVENANTS OF THE COMPANY.

          (a)  FORM D; BLUE SKY LAWS.  The Company  will timely file a Notice of
Sale of  Securities on Form D with respect to the Unit  Securities,  as required
under  Regulation D. The Company will, on or before the Closing Date,  take such
action  as it  reasonably  determines  to  be  necessary  to  qualify  the  Unit
Securities  for  sale  to  the  Unit  Subscribers  under  this  Agreement  under
applicable  securities  (or "blue sky") laws of the states of the United  States
(or to obtain an exemption from such qualification).

          (b)  REPORTING STATUS.  The Company's Common Stock is registered under
Section 12 of the Exchange Act. During the period  commencing on the date of the
First  Closing  until the  expiration  of the  Registration  Period (as  defined
below), the Company will timely file all reports,  schedules,  forms, statements
and other documents  required to be filed by it with the SEC under the reporting
requirements  of the Exchange Act, and the Company will not terminate its status
as an  issuer  required  to file  reports  under  the  Exchange  Act even if the
Exchange  Act  or  the  rules  and  regulations  thereunder  would  permit  such
termination.

          (c)  EXPENSES. The Company and each Subscriber is liable for, and will
pay, its own expenses incurred in connection with the negotiation,  preparation,
execution  and  delivery of this  Agreement  and the  transactions  contemplated
hereby,  including,  without  limitation,  attorneys' and consultants'  fees and
expenses.

          (d)  FINANCIAL  INFORMATION.  The financial  statements of the Company
will be prepared in accordance with United States generally accepted  accounting
principles,  consistently  applied,  and will  fairly  present  in all  material
respects the consolidated  financial  position of the Company and results of its
operations and cash flows as of, and for the periods  covered by, such financial
statements  (subject,  in the case of unaudited  statements,  to normal year-end
audit adjustments).

                                       10
<PAGE>

          (e)  COMPLIANCE  WITH LAW. As long as any  Registrable  Securities (as
hereinafter  defined)  are held by a  Subscriber  the Company  will  conduct its
business in compliance  with all applicable  laws,  rules and regulations of the
jurisdictions in which it is conducting business (including, without limitation,
all applicable local, state and federal environmental laws and regulations), the
failure to comply with which would have a Material Adverse Effect.

          (f)  NO INTEGRATION.  The Company will not make any offers or sales of
any security (other than the Unit  Securities)  under  circumstances  that would
cause  the  offering  of the Unit  Securities  to be  integrated  with any other
offering of  securities  by the  Company (i) for the purpose of any  stockholder
approval  provision  applicable  to the  Company or its  securities  or (ii) for
purposes of any registration requirement under the Securities Act.

     4.2  COVENANTS OF SUBSCRIBERS.

          (a)  SALES BY SUBSCRIBERS.  Each Subscriber covenants to sell any Unit
Securities  sold  by  it  in  compliance  with  applicable  prospectus  delivery
requirements,  if any, or otherwise in compliance with the  requirements  for an
exemption  from  registration  under  the  Securities  Act  and  the  rules  and
regulations promulgated  thereunder.  No Subscriber will make any sale, transfer
or other  disposition  of the Unit  Securities  in violation of federal or state
securities laws.

          (b)  NO VOTING  AGREEMENT.  Each Subscriber  covenants and agrees with
the Company that, so long as such Subscriber  holds any of the Unit  Securities,
such subscriber  shall refrain from entering into any voting  agreement with any
other Subscriber or any third-party, including without limitation Casimir.

                                   ARTICLE V
                               REGISTRATION RIGHTS

     5.1  DEFINITIONS. As used in this Agreement, the following terms shall have
the following meanings:

          (a)  "AFFILIATE"  shall mean,  with  respect to any Person (as defined
below), any other Person controlling,  controlled by or under direct or indirect
common control with such Person (for the purposes of this definition  "control,"
when used with respect to any specified  Person,  shall mean the power to direct
the  management  and policies of such person,  directly or  indirectly,  whether
through ownership of voting securities,  by contract or otherwise; and the terms
"controlling"   and  "controlled"   shall  have  meanings   correlative  to  the
foregoing).

          (b)  "BUSINESS  DAY" shall mean a day Monday  through  Friday on which
banks are generally open for business in New York.

          (c)  "HOLDERS"  shall mean the  Subscribers,  holders of the Placement
Agent Warrants, holders of the Initiation Warrants and the holders of the Common
Stock issued upon the exercise of the Placement  Agent  Warrants and  Initiation
Warrants, any person holding Registrable  Securities,  or any person to whom the
rights under  Article V have been  transferred  in  accordance  with Section 5.8
hereof.

          (d)  "PERSON" shall mean any person, individual,  corporation, limited
liability company,  partnership,  trust or other  nongovernmental  entity or any
governmental agency, court,  authority or other body (whether foreign,  federal,
state, local or otherwise).

          (e)  The terms "REGISTER,"  "REGISTERED" and  "REGISTRATION"  refer to
the  registration  effected by preparing and filing a registration  statement in

                                       11
<PAGE>

compliance  with the  Securities  Act,  and the  declaration  or ordering of the
effectiveness of such registration statement.

          (f)  "REGISTRABLE  SECURITIES"  shall  mean (i) the  shares  of Common
Stock  included  in the Units;  (ii) the shares of Common  Stock  issuable  upon
exercise of the Warrants included in the Units; (iii) the shares of Common Stock
issuable  upon  exercise of the  Placement  Agent  Warrants  and the  Initiation
Warrants;  and (iv) any shares of Common Stock  issued as (or issuable  upon the
conversion  of any  warrant,  right or other  security  which  is  issued  as) a
dividend,  distribution or split, recapitalization,  merger, consolidation,  any
reorganization of or other distribution with respect to or in replacement of the
Common Stock, Warrants, Placement Warrants and/or Initiation Warrants; provided,
however, that securities shall only be treated as Registrable  Securities if and
only  for so  long  as  they  (a)  have  not  been  disposed  of  pursuant  to a
registration  statement declared effective by the SEC, (b) have not been sold in
a transaction exempt from the registration and prospectus delivery  requirements
of the Securities Act so that all transfer  restrictions and restrictive legends
with respect  thereto are removed upon the  consummation of such sale or (c) are
held by a Holder or a permitted transferee pursuant to Section 5.8.

          (g)  "REGISTRATION  EXPENSES" shall mean all expenses  incurred by the
Company in complying with Section 5.2 hereof, including, without limitation, all
registration,  qualification and filing fees,  printing expenses,  listing fees,
escrow fees,  fees and  expenses of counsel for the  Company,  blue sky fees and
expenses,  the expense of any special audits incident to or required by any such
registration.

          (h)  "REGISTRATION  PERIOD"  shall have the  meaning  ascribed to such
term in Section 5.4(a).

          (i)  "REGISTRATION  STATEMENT" shall mean any  registration  statement
filed with the SEC in accordance with Sections 5.2(a) and (b) herein.

          (j)  "SELLING  EXPENSES"  shall mean all  underwriting  discounts  and
selling  commissions  applicable to the sale of  Registrable  Securities and all
fees and  expenses of legal  counsel  for any Holder,  other than as provided in
paragraph (g) above.

     5.2  REGISTRATION RIGHTS. (a) No later than 60 days after the Final Closing
Date (the "Filing  Date"),  the Company shall file a  Registration  Statement on
Form SB-2 or if unavailable another appropriate registration document,  covering
the  Registrable  Securities with the SEC and use its best efforts to effect the
registration,  qualifications or compliances (including, without limitation, the
execution  of  any  required  undertaking  to  file  post-effective  amendments,
appropriate  qualifications  or exemptions  under  applicable  blue sky or other
state  securities  laws and appropriate  compliance  with applicable  securities
laws,  requirements or regulations) prior to the date which is 60 days after the
Filing Date ("Effective Date").

          (b)  From and  after  the  Final  Closing  Date if the  Company  shall
determine to proceed with the preparation and filing of a Registration Statement
in connection with the proposed offer and sale of any of its securities by it or
any of its security  holders (other than a  registration  statement on Form S-4,
S-8 or other limited purpose form),  the Company will give written notice of its
determination  to all Holders.  Upon receipt of a written  request from any such
holder  within  thirty  (30) days  after  receipt  of any such  notice  from the
Company,  the Company will cause all the  Registrable  Securities  owned by such
holders  to be  included  in  such  Registration  Statement,  all to the  extent
requisite to permit the sale or other  disposition by the prospective  seller or

                                       12
<PAGE>

sellers of the Registrable  Securities to be so registered.  If any registration
pursuant to this Section 5.2(b) shall be  underwritten  in whole or in part, the
Company may require that the  Registrable  Securities  requested  for  inclusion
pursuant to this  Section  5.2(b) be included  in the  underwriting  on the same
terms  and  conditions  as the  securities  otherwise  being  sold  through  the
underwriters.  The  obligation of the Company under this Section 5.2(b) shall be
unlimited as to the number of Registration Statements to which it applies.

     5.3  REGISTRATION   EXPENSES.   All  Registration   Expenses   incurred  in
connection  with  any  registration,   qualification,  exemption  or  compliance
pursuant to Section  5.2 shall be borne by the  Company.  All  Selling  Expenses
relating to the sale of  securities  registered by or on behalf of Holders shall
be borne by such  Holders pro rata on the basis of the number of  securities  so
registered.

     5.4  COMPANY OBLIGATIONS.  In the case of the registration,  qualification,
exemption or compliance effected by the Company pursuant to this Agreement,  the
Company shall, upon reasonable  request,  inform each Holder as to the status of
such registration,  qualification,  exemption and compliance. At its expense the
Company shall:

          (a)  use its best efforts to keep any such registration under Sections
5.2(a)  and  (b),  and  any  qualification,  exemption  compliance  under  state
securities laws which the Company determines to obtain,  continuously  effective
until the Holders have completed the distribution  described in the registration
statement  relating  thereto.  The period of time  during  which the  Company is
required hereunder to keep any Registration  Statement  effective is referred to
herein as "the  Registration  Period."  Notwithstanding  the  foregoing,  at the
Company's   election,   the  Company  may  cease  to  keep  such   registration,
qualification, exemption or compliance effective with respect to any Registrable
Securities,  and the registration  rights of a Holder shall expire, at such time
as the  earlier  of (i) the date on which all the  Holders  have  completed  the
distribution  of the  Registrable  Securities,  or (ii) the date all Registrable
Securities may be sold under Rule 144 during any ninety (90) day period; and

          (b)  advise the Holders:

               (i)  when the Registration Statement or any amendment thereto has
been  filed  with  the  SEC  and  when  the   Registration   Statement   or  any
post-effective amendment thereto has become effective;

               (ii) of any request by the SEC for  amendments or  supplements to
the Registration  Statement or the prospectus included therein or for additional
information;

              (iii) of the issuance by the SEC of any stop order  suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for such purpose;

               (iv) of the  receipt  by the  Company  of any  notification  with
respect to the suspension of the  qualification  of the  Registrable  Securities
included  therein for sale in any  jurisdiction or the initiation or threatening
of any proceeding for such purpose; and

               (v)  of the  happening  of any event that  requires the making of
any changes in the Registration  Statement or the prospectus so that, as of such
date,  the  statements  therein  are not  misleading  and do not omit to state a
material fact required to be stated  therein or necessary to make the statements

                                       13
<PAGE>

therein (in the case of the prospectus,  in the light of the circumstances under
which they were made) not misleading;

          (c)  make  every  reasonable  effort to obtain the  withdrawal  of any
order suspending the effectiveness of any Registration Statement at the earliest
possible time;

          (d)  furnish to each Holder, without charge, at least one copy of such
Registration  Statement  and any  post-effective  amendment  thereto,  including
financial  statements and schedules,  and, if the Holder so requests in writing,
all exhibits  (including those incorporated by reference) in the form filed with
the SEC;

          (e)  during the Registration Period,  deliver to each Holder,  without
charge, as many copies of the prospectus included in such Registration Statement
and any amendment or supplement  thereto as such Holder may reasonably  request;
and the Company consents to the use,  consistent with the provisions  hereof, of
the  prospectus or any  amendment or  supplement  thereto by each of the selling
Holders of  Registrable  Securities in connection  with the offering and sale of
the  Registrable  Securities  covered  by the  prospectus  or any  amendment  or
supplement thereto.  In addition,  upon the reasonable request of the Holder and
subject in all cases to confidentiality protections reasonably acceptable to the
Company, the Company will meet with a Holder or a representative  thereof at the
Company's headquarters to discuss all information relevant for disclosure in the
Registration Statement covering the Registrable  Securities,  and will otherwise
cooperate  with any  Holder  conducting  an  investigation  for the  purpose  of
reducing or eliminating such Holder's exposure to liability under the Securities
Act,  including  the  reasonable  production  of  information  at the  Company's
headquarters;

          (f)  during the Registration Period,  deliver to each Holder,  without
charge,  (i) as soon as practicable (but in the case of the annual report of the
Company to its  stockholders,  within 120 days after the end of each fiscal year
of the Company) one copy of the following documents,  other than those documents
available via EDGAR:  (A) its annual report to its  stockholders,  if any (which
annual  report shall contain  financial  statements  audited in accordance  with
generally  accepted  accounting  principles in the United States of America by a
firm  of  certified  public  accountants  of  recognized  standing);  (B) if not
included in substance in its annual report to stockholders, its annual report on
Form  10-KSB  (or  similar  form);  (C)  each of its  quarterly  reports  to its
stockholders,  and, if not  included in substance  in its  quarterly  reports to
stockholders,  its quarterly  report on Form 10-QSB (or similar form), and (D) a
copy of the full Registration Statement (the foregoing,  in each case, excluding
exhibits);  and (ii) upon  reasonable  request,  all  exhibits  excluded  by the
parenthetical to the immediately preceding clause (E), and all other information
that is generally available to the public;

          (g)  prior to any public offering of Registrable  Securities  pursuant
to any  Registration  Statement,  register or qualify or obtain an exemption for
offer and sale under the  securities or blue sky laws of such  jurisdictions  as
any such Holders reasonably request in writing,  provided that the Company shall
not for any such purpose be required to qualify  generally to transact  business
as a foreign  corporation in any jurisdiction where it is not so qualified or to
consent to general service of process in any such  jurisdiction,  and do any and
all other acts or things  reasonably  necessary or advisable to enable the offer
and sale in such  jurisdictions  of the Registrable  Securities  covered by such
Registration Statement;

                                       14
<PAGE>

          (h)  cooperate with the Holders to facilitate  the timely  preparation
and delivery of  certificates  representing  Registrable  Securities  to be sold
pursuant to any  Registration  Statement free of any restrictive  legends to the
extent not required at such time and in such  denominations  and  registered  in
such names as Holders may request at least five (5) business days prior to sales
of Registrable Securities pursuant to such Registration Statement;

          (i)  upon  the  occurrence  of  any  event   contemplated  by  Section
5.4(b)(v)  above,  the Company shall prepare a  post-effective  amendment to the
Registration  Statement or a supplement to the related  prospectus,  or file any
other required  document so that, as thereafter  delivered to subscribers of the
Registrable  Securities  included  therein,  the prospectus will not include any
untrue statement of a material fact or omit to state any material fact necessary
to make the statements  therein,  in the light of the circumstances  under which
they are made, not misleading;

          (j)  in  the  event  that  a  registration  involves  an  underwritten
offering,   enter  into  and  perform  its  obligations  under  an  underwriting
agreement, in usual and customary form, including, without limitation, customary
indemnification  and contribution  obligations,  with the managing  underwriting
underwriter or such offering;

          (k)  notify the security holders  participating  in such  registration
and the Placement Agent,  promptly after it shall receive notice thereof, of the
time when the Registration Statement has become effective or a supplement to any
prospectus forming a part of the Registration Statement has been filed;

          (l)  at the  request  of  holders  of a  majority  of the  Registrable
Securities included in the Registration  Statement,  furnish to the underwriters
on the date that the Registrable  Securities are delivered to  underwriters  for
sale in connection  with a Registration  Statement:  (i) an opinion,  dated such
date,  of the  counsel  representing  the  Company  for  the  purposes  of  such
registration,  in form and substance as is customarily  given to underwriters in
an underwritten public offering, addressed to the underwriters and (ii) a letter
dated such date, from the independent  certified  accountants of the Company, in
form an  substance  as is  customarily  given by  independent  certified  public
accountants to underwriters in an underwritten public offering, addressed to the
underwriters;

          (m)  make available for inspection by any  underwriters  participating
in an offering covering Registrable Securities, and the counsel,  accountants or
other agents retained by any such underwriter, all pertinent financial and other
records,  corporate  documents,  and  properties  of the Company,  and cause the
Company's officers, directors and employees to supply all information reasonably
requested by any such underwriters in connection with such offering;

          (n)  if the  Common  Stock is then  listed  on a  national  securities
exchange,  cause the Registrable Securities to be listed on such exchange, or if
reported on NASDAQ,  to be reported on NASDAQ.  If the Common  Stock is not then
listed on a national securities  exchange or reported on NASDAQ,  facilitate the
reporting of the Registrable Securities on NASDAQ; and:

          (o)  provide a  transfer  agent and  registrar,  which may be a single
entity, for the Registrable  Securities not later than the effective date of the
Registration Statement in which Registrable Securities are included.

     5.5  INDEMNIFICATION. (a) To the extent permitted by law, the Company shall
indemnify each Holder,  each underwriter of the Registrable  Securities and each
person controlling such Holder within the meaning of Section 15 of the Act, with

                                       15
<PAGE>

respect to which any registration, qualification or compliance has been effected
pursuant to this Agreement,  against all claims, losses, damages and liabilities
(or action in respect  thereof),  including  any of the  foregoing  incurred  in
settlement of any litigation, commenced or threatened (subject to Section 5.5(c)
below),  arising  out of or based on any untrue  statement  (or  alleged  untrue
statement)  of  a  material  fact  contained  in  any  registration   statement,
prospectus  or  offering  circular,  or any  amendment  or  supplement  thereof,
incident to any such registration,  qualification or compliance, or based on any
omission (or alleged  omission) to state  therein a material fact required to be
stated therein or necessary to make the statements  therein not  misleading,  in
light of the  circumstances  in which they were made,  and will  reimburse  each
Holder,  each  underwriter  of  the  Registrable   Securities  and  each  person
controlling  such Holder,  for reasonable  legal and other  expenses  reasonably
incurred in connection  with  investigating  or defending any such claim,  loss,
damage,  liability or action as incurred;  provided that the Company will not be
liable in any such case to the extent that any untrue  statement  or omission or
allegation  thereof is made in  reliance  upon and in  conformity  with  written
information  furnished  to the Company by or on behalf of such Holder and stated
to be  specifically  for  use in  preparation  of such  registration  statement,
prospectus or offering circular; provided that the Company will not be liable in
any such case where the claim,  loss,  damage or  liability  arises out of or is
related to the failure of the Holder to comply with the covenants and agreements
contained in this  Agreement  respecting  sales of Registrable  Securities,  and
except that the foregoing  indemnity agreement is subject to the condition that,
insofar as it relates to any such untrue  statement or alleged untrue  statement
or  omission  or  alleged  omission  made  in  the  preliminary  prospectus  but
eliminated  or remedied in the  amended  prospectus  on file with the SEC at the
time the registration  statement becomes effective or in the amended  prospectus
filed  with the SEC  pursuant  to Rule  424(b) or in the  prospectus  subject to
completion  and term sheet under Rule 434 of the Act,  which  together  meet the
requirements  of  Section  10(a)  of the  Act  (the  "Final  Prospectus"),  such
indemnity  agreement shall not inure to the benefit of any such Holder, any such
underwriter or any such  controlling  person,  if a copy of the Final Prospectus
furnished  by the Company to the Holder for  delivery  was not  furnished to the
person or entity asserting the loss,  liability,  claim or damage at or prior to
the time  such  furnishing  is  required  by the  Securities  Act and the  Final
Prospectus  would  have cured the defect  giving  rise to such loss,  liability,
claim or damage.

          (b)  Each Holder will  severally,  if Registrable  Securities  held by
such  Holder are  included  in the  securities  as to which  such  registration,
qualification  or compliance is being effected,  indemnify the Company,  each of
its directors and officers,  each underwriter of the Registrable  Securities and
each person who  controls  the  Company  within the meaning of Section 15 of the
Act, against all claims,  losses, damages and liabilities (or actions in respect
thereof),  including  any  of  the  foregoing  incurred  in  settlement  of  any
litigation,  commenced or threatened (subject to Section 5.5(c) below),  arising
out of or based on any untrue  statement  (or  alleged  untrue  statement)  of a
material fact contained in any  registration  statement,  prospectus or offering
circular,  or  any  amendment  or  supplement  thereof,  incident  to  any  such
registration,  qualification or compliance, or based on any omission (or alleged
omission)  to state  therein a material  fact  required to be stated  therein or
necessary  to make  the  statements  therein  not  misleading,  in  light of the
circumstances  in which they were made,  and will  reimburse  the Company,  such
directors and officers,  each underwriter of the Registrable Securities and each
person  controlling  the Company  for  reasonable  legal and any other  expenses
reasonably  incurred in  connection  with  investigating  or defending  any such
claim,  loss,  damage,  liability  or  action as  incurred,  in each case to the
extent,  but only to the  extent,  that such  untrue  statement  or  omission or

                                       16
<PAGE>

allegation  thereof is made in  reliance  upon and in  conformity  with  written
information furnished to the Company by or on behalf of the Holder and stated to
be  specifically  for  use  in  preparation  of  such  registration   statement,
prospectus or offering circular;  provided that the indemnity shall not apply to
the extent that such claim, loss, damage or liability results from the fact that
a current copy of the  prospectus  was not made available to the Holder and such
current copy of the  prospectus  would have cured the defect giving rise to such
loss, claim,  damage or liability.  Notwithstanding  the foregoing,  in no event
shall a Holder be liable for any such claims,  losses, damages or liabilities in
excess of the proceeds  received by such Holder in the  offering,  except in the
event of fraud by such Holder.

          (c)  Each party  entitled to  indemnification  under this  Section 5.5
(the  "Indemnified  Party")  shall give notice to the party  required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the  Indemnifying  Party to assume  the  defense of any such claim or any
litigation  resulting  therefrom,  provided  that  counsel for the  Indemnifying
Party,  who shall  conduct  the  defense of such claim or  litigation,  shall be
approved by the  Indemnified  Party (whose  approval shall not  unreasonably  be
withheld),  and the  Indemnified  Party may  participate in such defense at such
Indemnified  Party's  expense,  and  provided  further  that the  failure of any
Indemnified  Party to give  notice as  provided  herein  shall not  relieve  the
Indemnifying Party of its obligations under this Agreement,  unless such failure
is materially  prejudicial to the Indemnifying  Party in defending such claim or
litigation.  An Indemnifying  Party shall not be liable for any settlement of an
action or claim effected  without its written consent (which consent will not be
unreasonably withheld).

          (d)  If the  indemnification  provided for in this Section 5.5 is held
by a court of competent  jurisdiction to be unavailable to an Indemnified  Party
with  respect  to any loss,  liability,  claim,  damage or expense  referred  to
therein,  then the Indemnifying  Party, in lieu of indemnifying such Indemnified
Party  thereunder,  shall  contribute  to the  amount  paid or  payable  by such
Indemnified Party as a result of such loss, liability,  claim, damage or expense
in such  proportion  as is  appropriate  to reflect  the  relative  fault of the
Indemnifying  Party on the one hand and of the Indemnified Party on the other in
connection  with the  statements  or  omissions  which  resulted  in such  loss,
liability,  claim,  damage or  expense as well as any other  relevant  equitable
considerations.  The  relative  fault  of  the  Indemnifying  Party  and  of the
Indemnified  Party shall be  determined  by reference  to,  among other  things,
whether  the  untrue or  alleged  untrue  statement  of a  material  fact or the
omission  to state a  material  fact  relates  to  information  supplied  by the
Indemnifying Party or by the Indemnified Party and the parties' relative intent,
knowledge,  access to  information  and  opportunity  to correct or prevent such
statement or omission.

     5.6  HOLDER  OBLIGATIONS.  (a) Each Holder agrees that, upon receipt of any
notice from the Company of the happening of any event  requiring the preparation
of a supplement or amendment to a prospectus relating to Registrable  Securities
so that,  as  thereafter  delivered to the Holders,  such  prospectus  shall not
contain an untrue  statement  of a material  fact or omit to state any  material
fact required to be stated therein or necessary to make the  statements  therein
not  misleading,   each  Holder  will  forthwith   discontinue   disposition  of
Registrable  Securities pursuant to the registration  statement  contemplated by
Section  5.2  until  its  receipt  of  copies  of the  supplemented  or  amended
prospectus  from the Company  and, if so  directed by the  Company,  each Holder
shall deliver to the Company all copies,  other than  permanent file copies then
in  such  Holder's  possession,  of the  prospectus  covering  such  Registrable
Securities current at the time of receipt of such notice.

                                       17
<PAGE>

          (b)  As a condition to the  inclusion of its  Registrable  Securities,
each Holder shall furnish to the Company such information  regarding such Holder
and the  distribution  proposed  by such  Holder as the  Company  may request in
writing  or  as  shall  be  required  in  connection   with  any   registration,
qualification or compliance referred to in this Article V.

          (c)  Each  Holder  agrees not to take any action  with  respect to any
distribution  deemed to be made pursuant to such  Registration  Statement  which
would constitute a violation of Regulation M under the Exchange Act or any other
applicable rule, regulation or law.

     5.7  COMPANY REPORTING OBLIGATIONS.  With a view to making available to the
Holders the benefits of certain  rules and  regulations  of the SEC which at any
time  permit  the  sale of the  Registrable  Securities  to the  public  without
registration, the Company shall use its reasonable best efforts to:

          (a)  make and keep public  information  available,  as those terms are
understood and defined in Rule 144 under the Act, at all times;

          (b)  file  with the SEC in a  timely  manner  all  reports  and  other
documents required of the Company under the Exchange Act; and

          (c)  so long as a Holder owns any unregistered Registrable Securities,
furnish to such Holder,  upon any reasonable request, a written statement by the
Company as to its compliance  with Rule 144 under the Securities Act, and of the
Exchange  Act,  a copy of the most  recent  annual  or  quarterly  report of the
Company,  and such other reports and documents of the Company as such Holder may
reasonably  request  in  availing  itself of any rule or  regulation  of the SEC
allowing a Holder to sell any such securities without registration.

     5.8  TRANSFER OF  REGISTRATION  RIGHTS.  The rights to cause the Company to
register  Registrable  Securities  granted to the Holders by the  Company  under
Section 5.2 may be assigned in full by a Holder in connection with a transfer by
such  Holder of its  Registrable  Securities.  The  obligations  of the  Company
contained in this  Article V shall be binding upon any  successor to the Company
and  continue  to be in effect  with  respect  to any  securities  issued by any
successor  to the  Company  in  substitution  or  exchange  for any  Registrable
Securities.

     5.9  WAIVER OR AMENDMENT.  With the written  consent of the Company and the
Holders holding at least a majority of the Registrable  Securities that are then
outstanding  and/or  securities  convertible into or exercisable for Registrable
Securities,  any provision of this Article V may be waived (either  generally or
in a particular instance, either retroactively or prospectively and either for a
specified period of time or  indefinitely) or amended.  Upon the effectuation of
each such waiver or amendment,  the Company shall  promptly give written  notice
thereof to the Holders,  if any, who have not previously received notice thereof
or consented thereto in writing.

     5.10 PENALTY UPON DELAY OF  REGISTRATION  FILING.  Except to the extent any
delay is solely  and  directly  due to the  failure  of a Holder  to  reasonably
cooperate in providing to the Company such  information  as shall be  reasonably
requested  by the  Company  in  writing  for use in the  Registration  Statement
contemplated by Section 5.2(a), if such Registration Statement is not filed with
the SEC by the Filing Date or effective prior to the Effective Date, the Company
shall  immediately  pay to each Holder of Registrable  Securities  issued in the
Offering  an amount in cash equal to one  percent  (1%) per month,  or  fraction
thereof, of such Holder's aggregate investment until the Registration  Statement
is filed with the SEC or is declared effective by the SEC, as applicable. If the

                                       18
<PAGE>

Company  fails to pay any  liquidated  damages  pursuant to this Section in full
within seven days after the date payable,  the Company will pay interest thereon
at a rate of 15% per annum (or such lesser  maximum  amount that is permitted to
be paid by  applicable  law) to each Holder,  accruing  daily from the date such
liquidated  damages are due until such amounts,  plus all such interest thereon,
are paid in full.  The  liquidated  damages  pursuant to the terms  hereof shall
apply on a  pro-rata  basis for any  portion  of a month  prior to the filing or
effectiveness of the Registration Statement, as applicable.

     5.11 CASIMIR  RELIANCE.  The Company  acknowledges  that the holders of the
Placement  Agent  Warrants  and  Initiation  Warrants  (and the  holders  of the
underlying  shares of Common Stock) are relying on the Company's  obligations in
this Article V and that the  provisions  contained in this Article V are for the
benefit of and may be enforced by such Holders.

                                   ARTICLE VI
                                   DEFINITIONS

     6.1  "Closing"  means  the  closing  of the  purchase  and sale of the Unit
Securities under this Agreement.

     6.2  "Common Stock" means the common stock,  par value $0.01 per share,  of
the Company.

     6.3  "Company" means National Scientific Corporation.

     6.4  "Exchange Act" means the Securities Exchange Act of 1934, as amended.

     6.5  "Final  Closing  Date" means the last  Closing of the  Offering in the
event there is more than one Closing.

     6.6  "Initiation  Warrants"  mean  Warrants  to purchase  an  aggregate  of
500,000  shares of  Common  Stock  issued to  Casimir  as an  initiation  fee in
connection with the Offering.

     6.7  "Subscribers"  means the Subscribers  whose names are set forth on the
signature pages of this Agreement, and their transferees.

     6.8  "Material  Adverse Effect" means a material  adverse effect on (a) the
business,  prospects,  operations, assets or financial condition of the Company,
when  taken as a  whole,  or (b) the  ability  of the  Company  to  perform  its
obligations pursuant to the transactions contemplated by this Agreement or under
any instruments to be entered into or filed in connection herewith.

     6.9  "Mergers  and  Acquisition   Agreement"  means  the  agreement  to  be
delivered  by the  Company  pursuant  to  Section  4(f) of the  Placement  Agent
Agreement.

     6.10 "Placement  Agent  Agreement"  means the  agreement by and between the
Company and the Placement Agent with respect to the Offering.

     6.11 "Placement  Agent Warrants" means the Warrants issued to the Placement
Agent pursuant to the Placement Agent Agreement.

     6.12 "Regulation  D" means  Regulation  D as  promulgated  under by the SEC
under the Securities Act.

                                       19
<PAGE>

     6.13 "Right of First Refusal Agreement" means the agreement to be delivered
by the Company pursuant to Section 4(e) of the Placement Agent Agreement.

     6.14 "Rule 144" means Rule 144 promulgated under the Securities Act, or any
successor rule.

     6.15 "SEC" means the United States Securities and Exchange Commission.

     6.16 "SEC Documents" has the meaning set forth in Section 3.6.

     6.17 "Securities"  means the Unit  Securities,  Placement  Agent  Warrants,
Initiation  Warrants and shares of Common Stock  issuable  upon  exercise of the
Placement Agent Warrants and Initiation Warrants.

     6.18 "Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder, or any similar successor statute.

     6.19 "Warrant  Shares"  means  the  shares of Common  Stock  issuable  upon
exercise of the Warrants, Placement Agent Warrants and Initiation Warrants.

                                  ARTICLE VII
                          GOVERNING LAW; MISCELLANEOUS

     7.1  GOVERNING  LAW;  JURISDICTION.  This Agreement will be governed by and
interpreted in accordance  with the laws of the State of New York without regard
to the  principles of conflict of laws.  The parties hereto hereby submit to the
exclusive  jurisdiction of the United States federal and state courts located in
the State of New York with respect to any dispute  arising under this  Agreement
or the transactions contemplated hereby or thereby.

     7.2  COUNTERPARTS;  SIGNATURES BY FACSIMILE. This Agreement may be executed
in two or more  counterparts,  all of  which  are  considered  one and the  same
agreement and will become effective when  counterparts  have been signed by each
party and delivered to the other  parties.  This  Agreement,  once executed by a
party, may be delivered to the other parties hereto by facsimile transmission of
a copy of this Agreement  bearing the signature of the party so delivering  this
Agreement.

     7.3  HEADINGS.  The  headings  of this  Agreement  are for  convenience  of
reference  only,  are  not  part  of  this  Agreement  and  do  not  affect  its
interpretation.

     7.4  SEVERABILITY.  If any  provision  of  this  Agreement  is  invalid  or
unenforceable  under any applicable  statute or rule of law, then such provision
will be deemed  modified in order to conform  with such  statute or rule of law.
Any provision hereof that may prove invalid or unenforceable  under any law will
not affect the validity or enforceability of any other provision hereof.

     7.5  ENTIRE AGREEMENT;  AMENDMENTS. This Agreement (including all schedules
and exhibits  hereto)  constitutes the entire agreement among the parties hereto
with  respect  to  the  subject   matter  hereof  and  thereof.   There  are  no
restrictions,  promises, warranties or undertakings,  other than those set forth
or referred to herein or therein. This Agreement supersedes all prior agreements
and  understandings  among the parties hereto with respect to the subject matter
hereof. No provision of this Agreement may be waived or amended other than by an
instrument in writing signed by the party to be charged with enforcement.

     7.6  NOTICES. Any notices required or permitted to be given under the terms
of this Agreement must be sent by certified or registered  mail (return  receipt

                                       20
<PAGE>

requested)  or  delivered  personally  or by  courier  (including  a  recognized
overnight  delivery  service) and will be effective five days after being placed
in the mail,  if mailed by regular  U.S.  mail,  or upon  receipt,  if delivered
personally,  or by courier (including a recognized  overnight delivery service),
in each case addressed to a party. The addresses for such communications are:

         If to the Company:     National Scientific Corporation
                                14455 N. Hayden Road
                                Suite 202
                                Scottsdale, AZ  85620

         If to a Subscriber:    To the address set forth immediately below such
                                Subscriber's name on the signature pages hereto.

          Each party will  provide  written  notice to the other  parties of any
change in its address.

     7.7  SUCCESSORS  AND ASSIGNS.  This Agreement is binding upon and inures to
the benefit of the parties and their  successors  and assigns.  The Company will
not assign this  Agreement or any rights or  obligations  hereunder  without the
prior written  consent of the  Subscribers,  and no  Subscriber  may assign this
Agreement  or any rights or  obligations  hereunder  without  the prior  written
consent of the Company.  Notwithstanding the foregoing,  a Subscriber may assign
all or part of its rights and obligations  hereunder to any of its "affiliates,"
as that term is defined  under the  Securities  Act,  without the consent of the
Company so long as the affiliate is an accredited subscriber (within the meaning
of Regulation D under the  Securities  Act) and agrees in writing to be bound by
this Agreement. This provision does not limit the Subscriber's right to transfer
the  Securities  pursuant  to the  terms  of this  Agreement  or to  assign  the
Subscriber's  rights  hereunder to any such transferee  pursuant to the terms of
this Agreement.

     7.8  THIRD PARTY BENEFICIARIES.  This Agreement is intended for the benefit
of the parties hereto and their respective permitted successors and assigns, and
is not for the benefit  of, nor may any  provision  hereof be  enforced  by, any
other person other than as provided in Sections 3.22 and 5.11 herein.

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

     7.10 NO STRICT CONSTRUCTION.  The language used in this Agreement is deemed
to be the language chosen by the parties to express their mutual intent,  and no
rules of strict construction will be applied against any party.

     7.11 EQUITABLE RELIEF.  The Company recognizes that, if it fails to perform
or discharge any of its obligations under this Agreement,  any remedy at law may
prove to be inadequate relief to the Subscribers and other beneficiaries hereof.
The Company therefore agrees that the Subscribers and other beneficiaries hereof
are entitled to seek temporary and permanent injunctive relief in any such case.

                                       21
<PAGE>

                       CONFIDENTIAL INVESTOR QUESTIONNAIRE

In  connection  with the purchase of Units of National  Scientific  Corporation,
pursuant to the terms of the  Confidential  Offering  Memorandum dated March 15,
2004, as it may be supplemented from time-to-time, the Subscriber represents and
warrants that he, she or it comes within one category marked below, and that for
any category marked,  he, she or it has truthfully set forth,  where applicable,
the factual  basis or reason the  Subscriber  comes  within that  category.  ALL
INFORMATION IN RESPONSE TO THIS SECTION WILL BE KEPT STRICTLY CONFIDENTIAL.  The
undersigned agrees to furnish any additional  information that the Company deems
necessary in order to verify the answers set forth below.

A.   INDIVIDUAL  INVESTORS:  (Please  INITIAL one or more of the following  five
     statements)

1. _____  I  certify  that  I am an  accredited  investor  because  I  have  had
          individual  income  (exclusive  of any income  earned by my spouse) of
          more  than  $200,000  in each  of the  most  recent  two  years  and I
          reasonably  expect to have an individual  income in excess of $200,000
          for the current year.

2. _____  I certify that I am an  accredited  investor  because I have had joint
          income with my spouse in excess of $300,000 in each of the most recent
          two years and reasonably expect to have joint income with my spouse in
          excess of $300,000 for the current year.

3. _____  I  certify  that  I am  an  accredited  investor  because  I  have  an
          individual  net worth,  or my spouse and I have a joint net worth,  in
          excess of $1,000,000.

4. _____  I  am  a  director  or  executive   officer  of  National   Scientific
          Corporation.

5. _____  I have individual net worth or my spouse and I have joint net worth of
          over $ 5,000,000.

B.   PARTNERSHIPS,  CORPORATIONS,  TRUSTS OR OTHER ENTITIES: (Please INITIAL one
     of the following seven  statements).  The undersigned hereby certifies that
     it is an accredited investor because it is:

1. _____  an employee benefit plan whose total assets exceed $5,000,000;

2. _____  an employee  benefit plan whose  investments  decisions  are made by a
          plan fiduciary which is either a bank, savings and loan association or
          an  insurance  company (as defined in Section  3(a) of the  Securities
          Act) or an investment  adviser registered as such under the Investment
          Advisers Act of 1940;

3. _____  a  self-directed   employee  benefit  plan,  including  an  Individual
          Retirement Account,  with investment  decisions made solely by persons
          that are accredited investors;

4. _____  an organization described in Section 501(c)(3) of the Internal Revenue
          Code of 1986,  as  amended,  not  formed for the  specific  purpose of
          acquiring the Units, with total assets in excess of $5,000,000;

                                       22
<PAGE>

5. _____  a  corporation,   partnership,   limited  liability  company,  limited
          liability  partnership,  other entity or similar  business trust,  not
          formed for the  specific  purpose of acquiring  the Units,  with total
          assets excess of $5,000,000;

6. _____  a trust,  not formed for the specific  purpose of acquiring the Units,
          with total assets exceed  $5,000,000,  whose purchase is directed by a
          person who has such knowledge and experience in financial and business
          matters  that he is capable of  evaluating  the merits and risks of an
          investment in the Units; or

7. _____  an entity  (including  a  revocable  grantor  trust  but other  than a
          conventional trust) in which each of the equity owners qualifies as an
          accredited investor under items A(1), (2) or (3) or item B(1) above.

NASD AFFILIATION

Are you affiliated or associated with an NASD member firm (please check one):

Yes _________     No __________

If Yes, please describe:

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

If Subscriber is a Registered  Representative with an NASD member firm, have the
following acknowledgment signed by the appropriate party:

The undersigned NASD member firm acknowledges  receipt of the notice required by
Article 3, Sections 28(a) and (b) of the Rules of Fair Practice.

----------------------------------
Name of NASD Member Firm

By: ______________________________
         Authorized Officer

Date: ____________________________

                                       23
<PAGE>

                                    SIGNATURE

     THE UNDERSIGNED IS INFORMED OF THE  SIGNIFICANCE TO THE COMPANY AND CASIMIR
OF THE  FOREGOING  REPRESENTATIONS  AND ANSWERS  CONTAINED  IN THE  CONFIDENTIAL
SUBSCRIBER   QUESTIONNAIRE  AND  SUCH  ANSWERS  HAVE  BEEN  PROVIDED  UNDER  THE
ASSUMPTION THAT THE COMPANY AND CASIMIR WILL RELY ON THEM.

         IF AN INDIVIDUAL:

         Sign Name:
                           --------------------------------------------
         Print Name:
                           --------------------------------------------
         Date:
                           --------------------------------------------

         IF AN ENTITY (I.E., PARTNERSHIP, CORPORATION OR TRUST):

         Name of Entity:
                           -------------------------------------
         By:(Print Name)
                           -------------------------------------
         Title:
                           -------------------------------------
         Signature:
                           -------------------------------------
         Date:
                           -------------------------------------

                                       24
<PAGE>

                      SUBSCRIPTION AGREEMENT SIGNATURE PAGE

NUMBER OF UNITS __________   X   $0.11  =   $____________ (THE "PURCHASE PRICE")

------------------------------------       -------------------------------------
Signature                                  Signature (if purchasing jointly)

------------------------------------       -------------------------------------
Name Typed or Printed                      Name Typed or Printed

------------------------------------       -------------------------------------
Entity Name                                Entity Name

------------------------------------       -------------------------------------
Address                                    Address

------------------------------------       -------------------------------------
City, State and Zip Code                   City, State and Zip Code

------------------------------------       -------------------------------------
Telephone-Business                         Telephone-Business

------------------------------------       -------------------------------------
Telephone-Residence                        Telephone-Residence

------------------------------------       -------------------------------------
Facsimile-Business                         Facsimile-Business

------------------------------------       -------------------------------------
Facsimile-Residence                        Facsimile-Residence

------------------------------------       -------------------------------------
Tax ID # or Social Security #              Tax ID # or Social Security #

Name in which securities should be issued:
                                           -------------------------------------

INVESTORS:  YOU MUST COMPLETE THE CONFIDENTIAL INVESTOR QUESTIONNAIRE.

Dated: _____________, 2004

     This Subscription Agreement is agreed to and accepted as
     of ____________________, 2004.

                                 NATIONAL SCIENTIFIC CORPORATION

                                 By:
                                     -------------------------------------------
                                     Name:  Michael A. Grollman
                                     Title: Chief Executive Officer and Chairman

                                       25
<PAGE>

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                                       26
<PAGE>

                       SCHEDULES TO SUBSCRIPTION AGREEMENT

SCHEDULE 3.3:  Capitalization Reservations

The Capital  Structure of the Company is described in the Company's  Form 10-KSB
for the year ended  September  30,  2003,  NSC'S Annual Proxy Report on Form 14A
dated January 30, 2004,  and Form 10-QSB for the three months ended December 31,
2003,  filed February 13, 2004,  which should be read in  conjunction  with this
Schedule.

The tables below provide unaudited  summary  descriptions of total shares issued
and  outstanding,  and of the options and warrants  outstanding and of any other
shares reservations as OF MARCH 15, 2004.

     1.)  As of March 15, 2004,  Preferred  stock,  par value  $0.10;  4,000,000
     shares authorized, and no shares issued or outstanding

     2.)  As of March 15, 2004,  Common  stock,  par  value  $0.01;  120,000,000
     shares authorized, and 73,814,465 shares issued and outstanding.

     3.)  Options Outstanding at March 15, 2004 (total plan authorized shares up
     to 7,000,000, of which as of March 15, 2004, the board has reserved a total
     of 4,000,000 shares).

                                                            Weighted   Weighted
                                                Number      Average    Average
                                                  of        Exercise    Fair
                                                Shares       Price      Value
                                                --------------------------------

     Options Outstanding, September 30, 2003    3,329,757   $   0.90   $    0.06
     Granted                                      170,000       0.15        0.10
     Exercised                                         --
     Canceled                                     250,000       0.015       0.11
                                                --------------------------------

     Options Outstanding, March 15, 2004        3,249,757   $   0.92   $    0.08
                                                ================================

     4.)  Warrants Outstanding at March 15, 2004

                                                Number of   Exercise  Expiration
                                                  Shares      Price      Date
                                                --------------------------------
     Outstanding at September 30, 2003          7,412,201
     Exercised                                         --
     Expired                                           --
     New issues                                   275,000   $   0.50     6/06
                                                  275,000   $   0.75     6/06
                                                  640,000   $   0.13     1/07
                                                  500,000   $   0.10     3/11
                                                --------------------------------
         Outstanding at March 15, 2004          9,102,201
                                                ================================

                                       S-1
<PAGE>

     5.)  Other Share Reservations as of March 15, 2004

     The Company has issued a Convertible Note for $160,000 in January 2004 to a
     Private  Investment  Fund, as described in the Company's Form 10-KSB report
     for the period  ending  September  30,  2003.  This Note has a feature that
     allows  the  holder  of the  Note to  covert  the Note  into the  Company's
     restricted   common  stock  at   approximately  a  10%  discount  from  the
     then-current  market price of the Company's common stock during the life of
     the Note. As such, the Company has reserved approximately  1,200,000 shares
     in the case of this Note holder executing these rights.  However, since the
     Company plans to pay off this Note in full with the proceeds from the First
     Closing of this Offering,  and since the Company believes it unlikely these
     rights  will be executed  prior to this Note's full  pay-off at that point,
     the Company  fully  expects that the shares  reserved for this  Convertible
     Note will not longer be reserved after the First Closing of this Offering.

     Additionally,  the Company has reserved  approximately  1,000,000 shares of
     its  common  stock  to  address  unknown  issues,   including  antidilution
     provisions and other  provisions  associated with the Convertible Note from
     this Private Investment Fund.

SCHEDULE 3.5: Conflicts, Violations and Related Matters

Other  than as listed  herein  below,  as of March  15,  2004,  the  Transaction
Documents  issued  by the  Company  will not (i)  conflict  with or  result in a
violation  of any  provision of its Articles of  Incorporation  or Bylaws,  (ii)
violate  or  conflict  with,  or  result  in a breach  of any  provision  of, or
constitute  a default  (or an event  which with  notice or lapse of time or both
could  become a default)  under,  or give to others  any rights of  termination,
amendment (including without limitation,  the triggering of any anti-dilution or
right  of  first  refusal  provision),  acceleration  or  cancellation  of,  any
agreement, indenture, patent, patent license, or instrument to which the Company
is a party ( any one or all being  referred  to as a "Company  Obligation"),  or
(iii) to the best of the Company's knowledge,  result in a violation of any law,
rule,  regulation,  order,  judgment or decree (including U.S. federal and state
securities  laws  and   regulations  and  regulations  of  any   self-regulatory
organizations to which the Company or its securities are subject)  applicable to
the  Company  or by which  any  property  or asset  of the  Company  is bound or
affected  (except  for  such  conflicts,   breaches,   defaults,   terminations,
amendments,   accelerations,   cancellations   and   violations  as  would  not,
individually or in the aggregate, have a Material Adverse Effect):

     1.   The  issuance of common  stock and  warrants at less than 13 cents per
          share may  trigger the  antidilution  provisions  of 640,000  warrants
          Private  Investment  Fund as  described in the  Company's  Form 10-KSB
          report for the period ending  September 30, 2003,  and as described in
          Schedule  3.20.  The  cumulative  effect  of the  triggering  of these
          provisions, should they be so triggered, is expected to be equal to or
          less than the issuance of approximately  an additional  100,000 shares
          of Common  Stock to this  Private  Investment  Fund,  should this fund
          choose to execute these warrants, for a total of approximately 740,000
          shares of common stock.

     2.   The  issuance of common  stock and  warrants  under this  Offering may
          trigger the First  Right of Refusal  provisions  a Private  Investment
          Fund's  investment in the Company in January 2004, as described in the
          Company's Form 10-KSB report for the period ending September 30, 2003.
          The  Private  Investment  Fund has  agreed  to waive  these  rights as
          relates to this Offering.

                                       S-2
<PAGE>

SCHEDULE 3.7: Recent Material Adverse Changes

Other than as listed herein below,  of as March 15, 2004, and since February 13,
2004, date of the Company's most recent period 10-QSB filing with the SEC, there
has been no  material  adverse  change  in the  assets,  liabilities,  business,
properties,  operations, financial condition, prospects or results of operations
of the Company, except that the Company has continued losses from operations.

     Recent Material Adverse Changes: None.

SCHEDULE 3.21: Registration Rights of Current Company Security holders

Other than as listed herein below,  none of the Company's  security holders have
any  special  registration  rights,  including  any rights to effect a demand or
shelf-registration   under  the  Securities  Act  or  exercise  any  "piggyback"
registration rights with respect to any filing under the Securities Act.

     RIGHT HOLDER: Private Investment Fund
     SECURITY HELD: Warrants to purchase 640,000 shares of NSC restricted common
     stock at prices  ranging  from  $0.13 to $0.15.  These  warrants  expire in
     January 2007.
     SUMMARY  OF  RIGHTS   HELD:   Piggyback   registration   rights,   weighted
     average-based antidilution provision.
     SPECIAL ISSUES WITH FUTURE RIGHTS: This investor also holds a Note from the
     Company,  due in July of 2004, for $160,000.  In the event that the Company
     does not pay this  Note on time,  which the  Company  intends  to do,  this
     investor  will be granted an  additional  640,000  warrants to purchase NSC
     restricted  Common Stock at prices  ranging from $0.13 to $0.15.  These new
     warrants  expire in  January  2007.  Additionally,  this  investor  will be
     granted some demand  registration rights for all warrants held in the event
     that the this Note is not paid by due date.

                                      S-3EXHIBIT 4.3

                                     Form of Warrant Placement Agent to Purchase
W-___                                                     Shares of Common Stock

NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK  ISSUABLE  UPON  EXERCISE OF
THIS WARRANT HAVE BEEN REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND NEITHER  THIS WARRANT NOR SUCH SHARES MAY BE SOLD,  ENCUMBERED  OR OTHERWISE
TRANSFERRED  EXCEPT PURSUANT TO AN EFFECTIVE  REGISTRATION  STATEMENT UNDER SUCH
ACT OR AN EXEMPTION  FROM SUCH  REGISTRATION  REQUIREMENT,  AND, IF AN EXEMPTION
SHALL BE  APPLICABLE,  THE  HOLDER  SHALL HAVE  DELIVERED  AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

VOID AFTER 5:00 P.M. NEW YORK CITY TIME ON THE LAST DAY OF THE EXERCISE  PERIOD,
AS DEFINED IN THE WARRANT

                          COMMON STOCK PURCHASE WARRANT
                                       OF
                         NATIONAL SCIENTIFIC CORPORATION

     This is to  certify  that,  FOR VALUE  RECEIVED,  ________________  with an
address  at   ______________________________   (and  or  its  assign(s)   and/or
transferee(s)) (hereinafter, each a "Holder" and collectively the "Holders"), is
entitled to purchase,  subject to the provisions of this Warrant,  from National
Scientific  Corporation,  a Texas  corporation  (the  "Company"),  at an initial
exercise  price equal to $.10 per  share__________________(________)  fully paid
and  non-assessable  shares of Common Stock,  par value $.01 per share  ("Common
Stock").  The shares of Common  Stock  deliverable  upon such  exercise,  and as
adjusted  from  time-to-time  as  provided  in  this  Warrant,  are  hereinafter
sometimes  referred  to as  "Warrant  Stock,"  and the  exercise  price  for the
purchase of a share of Common  Stock  pursuant to this  Warrant in effect at any
time and as adjusted from time-to-time is hereinafter  sometimes  referred to as
the "Exercise Price." The aggregate purchase price payable for the Warrant Stock
purchasable  hereunder  is referred to as the  "Aggregate  Purchase  Price." The
Aggregate  Purchase  Price is not  subject  to  adjustment.  In the  event of an
adjustment to the Exercise Price, as provided in Section 6 herein, the number of
shares of Warrant  Stock  deliverable  upon  exercise of this  Warrant  shall be
adjusted by dividing  the  Aggregate  Purchase  Price by the  Exercise  Price in
effect immediately after such adjustment.

     This  warrant and  additional  warrants of like tenor,  including  warrants
issued in exchange and/or substitution  thereof  (collectively,  the "Warrants")
were  originally  issued to Casimir Capital L.P. and its designees in connection
with Casimir Capital L.P.  ("Placement  Agent" or "Casimir") acting as placement
agent with respect to a private  placement of securities of the Company pursuant
to the terms of a  Confidential  Term Sheet  dated March 15, 2004 and as further
provided in a Placement  Agent  Agreement  between the Company and Casimir dated
March 15, 2004.

<PAGE>

     1.   DEFINITIONS. The following terms have the meanings set forth below:

     "Current  Market Value" of a share of Warrant Stock as of a particular date
(the "Determination Date") shall mean:

          a.   If the Common Stock is listed on a national  securities  exchange
     or admitted to unlisted  trading  privileges on such exchange or listed for
     trading on the NASDAQ  National  Market,  the current market value shall be
     the last reported sale price of the Common Stock on such exchange or market
     on the last  business  day prior to the date of exercise of this Warrant or
     if no such  sale is made on such day,  the  average  closing  bid and asked
     prices for such day on such exchange or market; or

          b.   If the  Common  Stock is not so listed or  admitted  to  unlisted
     trading  privileges,  but is  traded on the  NASDAQ  SmallCap  Market,  the
     current  market  value  shall be the  average of the  closing bid and asked
     prices  for  such  day on such  market  and if the  Common  Stock is not so
     traded,  the current  market  value shall be the mean of the last  reported
     bid-and asked prices reported by the National Quotation Bureau, Inc. on the
     last business day prior to the date of the exercise of this Warrant; or

          c.   If the  Common  Stock is not so listed or  admitted  to  unlisted
     trading  privileges  and bid and  asked  prices  are not so  reported,  the
     current  market value shall be an amount,  not less than book value thereof
     as at the end of the most recent fiscal year of the Company ending prior to
     the date of the  exercise of the  Warrant,  determined  in such  reasonable
     manner as may be prescribed by the Board of Directors of the Company.

          "Convertible Securities" shall mean evidences of indebtedness,  shares
of stock or other securities,  including but not limited to options, warrants or
purchase, subscription or other rights, which are convertible into, exchangeable
or exercisable  for, or represent the right to receive,  with or without payment
of  additional  consideration  in cash or  property,  shares of Common Stock (or
other Convertible  Securities),  either  immediately or upon the occurrence of a
specified date or a specified event.

          "Exercise  Period" shall mean the period commencing on the date hereof
and ending at 5 p.m., eastern time on the day preceding the seventh  anniversary
of the date hereof.

          "Permitted  Issuances"  shall mean (i) Common Stock issuable or issued
to employees,  consultants or directors of the Company  pursuant to a stock plan
or other  compensation  arrangement  approved by the Board of  Directors  of the
Company,  but in no event, more than Eight Million shares in the aggregate,  and
(ii) Common  Stock  issued or issuable  upon  conversion  of the Warrants or any
other securities  exercisable or exchangeable for, or convertible into shares of
Common Stock outstanding as of March 15, 2004.

     2.   EXERCISE OF WARRANT.

          (a)  This  Warrant may be exercised in whole or in part at any time or
     from time to time  commencing  on the date  hereof and until  April 8, 2011
     (the "Exercise Period"),  provided,  however,  that if either such day is a
     day on which banking  institutions  in the State of New York are authorized
     by law to close, then on the next succeeding day  which shall not be such a
     day. This Warrant may be exercised by presentation  and surrender hereof to
     the Company at its principal office, or at the office of its stock transfer
     agent,  if any,  with the Purchase  Form annexed  hereto duly  executed and
     accompanied  by payment of the  Exercise  Price for the number of shares of

                                        2
<PAGE>

     Warrant  Stock  specified in such form. As soon as  practicable  after each
     such exercise of this Warrant,  but not later than seven days from the date
     of such  exercise,  the  Company  shall  issue and  deliver to the Holder a
     certificate or  certificates  for the shares of Warrant Stock issuable upon
     such  exercise,  registered in the name of the Holder or its  designee.  If
     this  Warrant  should be exercised in part only,  the Company  shall,  upon
     surrender  of this  Warrant  for  cancellation,  execute  and deliver a new
     Warrant evidencing the rights of the Holder thereof to purchase the balance
     of the shares of Warrant Stock purchasable thereunder.  Upon receipt by the
     Company of this Warrant at its office,  or by the stock  transfer  agent of
     the Company at its office, in proper form for exercise, the Holder shall be
     deemed to be the  holder of record of the shares of Common  Stock  issuable
     upon such  exercise,  notwithstanding  that the stock transfer books of the
     Company shall then be closed or that certificates  representing such shares
     of Common Stock shall not then be physically delivered to the Holder.

          (b)  In lieu  of the payment method set forth in Section (a) above, at
     any time  during the  Exercise  Period,  the  Holder  may,  at its  option,
     exchange this Warrant, in whole or in part (a "Warrant Exchange"),  without
     the payment by the Holder of any additional  consideration  into the number
     of shares of Warrant Stock  determined in accordance with this Section (b),
     by surrendering  this Warrant at the principal  office of the Company or at
     the office of its stock  transfer  agent,  accompanied  by a notice stating
     such  Holder's  intent to effect  such  exchange,  the  number of shares of
     Warrant  Stock to be  exchanged  and the date on which the Holder  requests
     that such Warrant  Exchange occur (the "Notice of  Exchange").  The Warrant
     Exchange  shall take place on the date  specified in the Notice of Exchange
     or, if later,  the date the Notice of  Exchange  is received by the Company
     (the  "Exchange  Date").  Certificates  for the shares  issuable  upon such
     Warrant Exchange and, if applicable, a new warrant of like tenor evidencing
     the  balance of the shares  remaining  subject  to this  Warrant,  shall be
     issued as of the Exchange  Date and  delivered  to the Holder  within seven
     days following the Exchange Date. In connection with any Warrant  Exchange,
     this Warrant  shall  represent  the right to subscribe  for and acquire the
     number of shares of Warrant  Stock  (rounded to the next  highest  integer)
     equal to (i) the number of shares of Warrant Stock  specified by the Holder
     in its Notice of  Exchange  (the  "Total  Number")  less (ii) the number of
     shares of Warrant Stock equal to the quotient  obtained by dividing (A) the
     product of the Total  Number  and the  existing  Exercise  Price by (B) the
     Current Market Value of a share of Common Stock. Current Market Value shall
     have the meaning set forth in Section (1) above,  except that for  purposes
     hereof,  the date of exercise,  as used in such Section (1), shall mean the
     Exchange Date.

     3.   RESERVATION  OF  SHARES/FRACTIONAL  SHARES.  The Company hereby agrees
that at all times there shall be reserved  for  issuance  and/or  delivery  upon
exercise  of this  Warrant  such  number of  shares of Common  Stock as shall be
required for issuance and delivery upon exercise of this Warrant. If the Company
hereafter lists its Common Stock on any national securities exchange, the Nasdaq
National Market or the Nasdaq SmallCap Market,  it shall use its best efforts to
keep the Warrant  Stock  authorized  for listing on such exchange upon notice of
issuance. No fractional shares or script representing fractional shares shall be
issued upon the  exercise of this  Warrant.  With  respect to any  fraction of a
share,  called for upon exercise hereof,  the Company shall pay to the Holder an

                                       3
<PAGE>

amount in cash equal to such fraction  multiplied by the Current Market Value of
a share of Warrant Stock.

     4.   EXCHANGE,  TRANSFER,  ASSIGNMENT OR LOSS OF WARRANT. This Warrant (and
all rights  hereunder) is exchangeable,  without  expense,  at the option of the
Holder,  upon  presentation and surrender hereof to the Company or at the office
of  its  stock  transfer   agent,  if  any,  for  other  Warrants  of  different
denominations  entitling the holder or any assignee and/or transferee thereof to
purchase in the aggregate the same number of shares of Common Stock  purchasable
hereunder. Upon surrender of this Warrant to the Company or at the office of its
stock  transfer  agent,  if any, with the  Assignment  Form annexed  hereto duly
executed  and funds  sufficient  to pay any  transfer  tax,  the Company  shall,
without  charge,  execute and deliver a new Warrant in the name of the  assignee
and/or  transferee named in such instrument of assignment and this Warrant shall
promptly  be  canceled.  This  Warrant  may be  divided or  combined  with other
Warrants which carry the same rights upon  presentation  hereof at the office of
the Company or at the office of its stock transfer agent, if any,  together with
a written notice  specifying the names and  denominations  in which new Warrants
are to be issued and signed by the Holder  hereof.  The term  "Warrant"  as used
herein  includes  any  Warrants  into  which  this  Warrant  may be  divided  or
exchanged.  Upon  receipt by the Company of evidence  satisfactory  to it of the
loss,  theft,  destruction  or mutilation  of this Warrant,  and (in the case of
loss, theft or destruction) of reasonably satisfactory indemnification, and upon
surrender  and  cancellation  of this Warrant,  if  mutilated,  the Company will
execute and deliver a new Warrant of like tenor.  Any such new Warrant  executed
and delivered shall constitute an additional  contractual obligation on the part
of the  Company,  whether or not this  Warrant so lost,  stolen,  destroyed,  or
mutilated shall be at any time enforceable by anyone.

     5.   RIGHTS OF THE HOLDER. The Holder shall not, by virtue of this Warrant,
be  entitled to any rights of a  stockholder  in the  Company,  either at law or
equity,  and the  rights of the Holder are  limited  to those  expressed  in the
Warrant and are not  enforceable  against  the Company  except to the extent set
forth herein.  In addition,  no provision  hereof, in the absence of affirmative
action by Holder to purchase shares of Common Stock,  and no enumeration  herein
of the rights or privileges of Holder  hereof,  shall give rise to any liability
of such Holder for the purchase price of any Common Stock or as a stockholder of
Company,  whether  such  liability  is  asserted by Company or by  creditors  of
Company.

     6.   ANTI-DILUTION PROVISIONS. The Exercise Price in effect at any time and
the number and kind of  securities  purchasable  upon  exercise of each  Warrant
shall be subject to adjustment as follows and the Company shall give each Holder
notice of any event  described  below which  requires an adjustment  pursuant to
this Section 6 at the time of such event:

          (a)  STOCK DIVIDENDS,  SUBDIVISIONS AND COMBINATIONS.  If, at any time
     or from time to time after the date of this Warrant,  the Company shall (i)
     pay a dividend or make a distribution to any holder of its capital stock in
     shares of Common Stock,  (ii)  subdivide its  outstanding  shares of Common
     Stock into a greater number of shares, (iii) combine its outstanding shares
     of  Common  Stock  into a  smaller  number  of  shares  or  (iv)  issue  by
     reclassification  of its Common  Stock any  shares of capital  stock of the
     Company,  the  Exercise  Price shall be adjusted to be equal to a fraction,
     the  numerator  of which  shall be the  Aggregate  Purchase  Price  and the
     denominator of which shall be the number of shares of Common Stock or other
     capital  stock of the Company that the Holder would have owned  immediately
     following  such action had such Warrant been  exercised  immediately  prior

                                       4
<PAGE>

     thereto.  An adjustment  made pursuant to this  Subsection (a) shall become
     effective  immediately  after the record  date in the case of a dividend or
     distribution,  and shall become effective  immediately  after the effective
     date in the case of a  subdivision,  combination or  reclassification,  and
     shall  result  in a  corresponding  adjustment  to the  number of shares of
     Warrant Stock issuable upon exercise of this Warrant.

          (b)  CERTAIN OTHER  DISTRIBUTIONS AND ADJUSTMENTS.  If, at any time or
     from time to time after the date of this  Warrant,  the Company shall issue
     or  distribute  to any  holder of shares of Common  Stock  evidence  of its
     indebtedness,  any other securities of the Company or any cash, property or
     other assets (excluding a subdivision, combination or reclassification,  or
     dividend or distribution payable in shares of Common Stock,  referred to in
     Subsection  (a), and also excluding  cash  dividends or cash  distributions
     paid out of net  profits  legally  available  therefor  in the full  amount
     thereof  (any  such  non-excluded  event  being  herein  called a  "Special
     Dividend")),  the  Exercise  Price  shall be adjusted  by  multiplying  the
     Exercise  Price then in effect by a fraction,  the numerator of which shall
     be the then  Current  Market  Value in  effect on the  record  date of such
     issuance or  distribution  less the fair  market  value (as  determined  in
     accordance  with  paragraph  B. of this  Section 6 (g)) of the  evidence of
     indebtedness,  cash,  securities  or property,  or other  assets  issued or
     distributed  in such  Special  Dividend  applicable  to one share of Common
     Stock and the  denominator  of which shall be the then Current Market Value
     in  effect  on the  record  date  of  such  issuance  or  distribution.  An
     adjustment  made  pursuant to this  Subsection  (b) shall become  effective
     immediately  after the record date of any such  Special  Dividend and shall
     result in a  corresponding  adjustment  to the  number of shares of Warrant
     Stock issuable upon exercise of this Warrant.

          (c)  ISSUANCE OF  ADDITIONAL  SHARES OF COMMON  STOCK AND  CONVERTIBLE
     SECURITIES.

               (i)  If at any time the Company shall issue or sell any shares of
          Common  Stock  or  Convertible  Securities  (whether  directly  or  by
          assumption in a merger in which Company is the surviving corporation),
          in exchange for consideration in an amount per share of Common Stock (
          determined  by  dividing  (i) the total  amount,  if any,  received or
          receivable by the Company in  consideration of the issuance or sale of
          such securities plus the total  consideration,  if any, payable to the
          Company  upon  exercise,   conversion  or  exchange   thereof  ("Total
          Consideration")  by (ii) the  number  of  additional  shares of Common
          Stock  issued,  sold or  issuable  upon the  exercise,  conversion  or
          exchange  of such  securities)  that is less than the  Exercise  Price
          (excluding Permitted Issuances),  then (A) the Exercise Price shall be
          adjusted so that it shall equal the price  determined  by  multiplying
          such Exercise Price by a fraction, the numerator of which shall be the
          number of shares of  Common Stock  outstanding on the date of issuance
          or sale  (calculated  on a fully  diluted  basis as if all  securities
          exercisable, convertible or exchangeable for Common Stock have been so
          exercised, converted or exchanged) plus the number of shares of Common
          Stock which the aggregate offering price would purchase based upon the
          Exercise  Price and the  denominator  of which  shall be the number of
          shares of Common  Stock  outstanding  on the date of  issuance or sale

                                       5
<PAGE>

          (calculated on a fully diluted basis as if all securities exercisable,
          convertible or  exchangeable  for Common Stock have been so exercised,
          converted or exchanged)  plus the maximum number of additional  shares
          of Common  Stock  issued,  sold or  issuable in  connection  with such
          offering or transaction,  and (B) the number of shares of Common Stock
          for which this Warrant is  exercisable  shall be adjusted to equal the
          product   obtained  by  multiplying   the  Exercise  Price  in  effect
          immediately  prior to such  issue or sale by the  number  of shares of
          Common Stock for which this Warrant is exercisable  immediately  prior
          to such issue or sale and dividing the product thereof by the Exercise
          Price resulting from the adjustment made pursuant to clause (A) above.

               (ii) The  provisions  of paragraph (i) of this Section 6(c) shall
          not apply to any  issuance  of  shares  of  Common  Stock for which an
          adjustment  is provided  under  Section 6(a) or 6(b). No adjustment of
          the number of shares of Common Stock for which this  Warrant  shall be
          exercisable  shall be made under  paragraph  (i) of this  Section 6(c)
          upon the  issuance  of any  shares of Common  Stock  which are  issued
          pursuant to the  exercise of any  warrants  or other  subscription  or
          purchase  rights or pursuant  to the  exercise  of any  conversion  or
          exchange rights in any Convertible Securities,  if any such adjustment
          shall  previously have been made upon the issuance of such warrants or
          other rights or upon the issuance of such Convertible Securities.

          (d)  No adjustment in the Exercise Price shall be required unless such
     adjustment  would  require an  increase  or  decrease  of at least one cent
     ($0.01) in such price;  provided,  however,  that any adjustments  which by
     reason of this  Section  6(d) are not  required to be made shall be carried
     forward  and taken into  account in any  subsequent  adjustment;  provided,
     further,  however that adjustments shall be required and made in accordance
     with the  provisions  of this  Section 6 not later than such time as may be
     required in order to preserve the tax-free  nature of a distribution to the
     Holder of this Warrant or Common Stock  issuable upon the exercise  hereof.
     All calculations  under this Section 6(d) shall be made to the nearest cent
     or to the nearest one-hundredth of a share, as the case may be.

          (e)  The Company may retain a firm of independent  public  accountants
     of  recognized  standing  selected  by the  Board  (who may be the  regular
     accountants  employed by the Company) to make any  computation  required by
     this Section 6.

          (f)  In the event that at any time, as a result of an adjustment  made
     pursuant to Section  6(a),  (b) or (c) of this  Warrant,  the Holder of any
     Warrant  thereafter  shall  become  entitled  to receive  any shares of the
     Company,  other  than  Common  Stock,  thereafter  the number of such other
     shares so  receivable  upon  exercise  of any  Warrant  shall be subject to
     adjustment from time to time in a manner and on terms as nearly  equivalent
     as practicable to the provisions with respect to the Common Stock contained
     in Sections 6(a) through (h), inclusive, of this Warrant.

          (g)  For purposes of any computation respecting consideration received
     pursuant to this Section 6, the following shall apply:

               A.   in the case of the  issuance  of shares of Common  Stock for
          cash,  the  consideration  shall be the amount of such cash,  provided
          that in no case  shall  any  deduction  be made  for any  commissions,
          discounts  or  other   expenses   incurred  by  the  Company  for  any
          underwriting of the issue or otherwise in connection therewith;

                                       6
<PAGE>

               B.   in the case of the  issuance of shares of Common Stock for a
          consideration  in whole or in part other than cash, the  consideration
          other than cash shall be deemed to be the fair market value thereof as
          determined  in good  faith by the Board of  Directors  of the  Company
          (irrespective   of   the   accounting   treatment   thereof),    whose
          determination shall be conclusive; and

               C.   in the  case  of the  issuance  of  securities  convertible,
          exchangeable or exercisable for shares of Common Stock,  the aggregate
          consideration   received   therefor   shall  be   deemed   to  be  the
          consideration  received  by the  Company  for  the  issuance  of  such
          securities plus the additional  minimum  consideration,  if any, to be
          received by the Company upon the  conversion or exchange  thereof (the
          consideration  in each  case to be  determined  in the same  manner as
          provided in clauses (A) and (B) of this Subsection).

          (h)  Notwithstanding  the foregoing,  no adjustment  shall be effected
     due to, or as a result of, any Permitted Issuances.

     7.   REGISTRATION  RIGHTS.  The  Warrant  Stock  shall be  entitled  to the
registration  rights  described  in  Article  V of the  Subscription  Agreements
entered  into  between  the  Company  and the  several  subscribers  as  further
described in Section 5 of the Placement Agent Agreement.

     8.   OFFICER'S  CERTIFICATE.   Whenever  the  Exercise  Price(s)  shall  be
adjusted as required by the provisions of Section 6 of this Warrant, the Company
shall  forthwith file in the custody of its Secretary or an Assistant  Secretary
at its principal  office and with its stock transfer agent, if any, an officer's
certificate  showing the adjusted  Exercise  Price(s) and the adjusted number of
shares of Common Stock  issuable upon  exercise of each  Warrant,  determined as
herein  provided,  setting forth in reasonable  detail the facts  requiring such
adjustment,  including a statement of the number of additional  shares of Common
Stock, if any, and such other facts as shall be necessary to show the reason for
and the manner of computing such  adjustment.  Each such  officer's  certificate
shall be forwarded by certified mail to Holder as provided in Section 13

     9.   NOTICES  TO  WARRANT  HOLDERS.  So  long  as  this  Warrant  shall  be
outstanding,  (1) if the Company shall pay any dividend or make any distribution
upon Common  Stock,  or (2) if the Company  shall offer to the holders of Common
Stock for  subscription  or purchase by them any share of any class or any other
rights, or (3) if any capital reorganization of the Company, reclassification of
the capital stock of the Company, consolidation or merger of the Company with or
into another entity,  tender offer  transaction for the Company's  Common Stock,
sale, lease or transfer of all or  substantially  all of the property and assets
of the Company, or voluntary or involuntary dissolution,  liquidation or winding
up of the  Company  shall  be  effected,  or (4) if  the  Company  shall  file a
registration statement under the Securities Act of 1933, as amended (the "Act"),
on any form other  than on Form S-4 or S-8 or any  successor  form,  then in any
such case, the Company shall cause to be mailed by certified mail to the Holder,
at least  fifteen days prior to the date  specified in clauses (1),  (2), (3) or
(4),  as the  case  may be,  of  this  Section  9 a  notice  containing  a brief
description of the proposed action and stating the date on which (i) a record is
to be taken for the purpose of such dividend,  distribution  or rights,  or (ii)
such  reclassification,  reorganization,  consolidation,  merger,  tender  offer
transaction,  conveyance,  lease,  dissolution,  liquidation or winding up is to
take  place and the  date,  if any is to be fixed,  as of which the  holders  of
Common  Stock  or  other   securities  shall  receive  cash  or  other  property

                                       7
<PAGE>

deliverable upon such reclassification,  reorganization,  consolidation, merger,
conveyance,  dissolution,  liquidation or winding up, or (iii) such registration
statement is to be filed with the Securities and Exchange Commission.

     10.  RECLASSIFICATION,   REORGANIZATION   OR   MERGER.   In   case  of  any
reclassification,  capital  reorganization or other change of outstanding shares
of Common Stock of the Company, or in case of any consolidation or merger of the
Company with or into another  corporation (other than a merger with a subsidiary
in which merger the Company is the continuing or surviving corporation and which
does not result in any reclassification,  capital reorganization or other change
of  outstanding  shares of Common Stock of the class  issuable  upon exercise of
this  Warrant)  or  in  case  of  any  sale,  lease  or  conveyance  of  all  or
substantially all of the assets of the Company,  or in the case of any statutory
exchange of securities with another corporation (including any exchange effected
in  connection  with a merger  of a third  corporation  into the  Company),  the
Company shall,  as a condition  precedent to such  transaction,  cause effective
provisions to be made so that (i) the Holder shall have the right  thereafter by
exercising this Warrant,  to purchase the kind and amount of shares of stock and
other  securities and property  receivable upon such  reclassification,  capital
reorganization  and other change,  consolidation,  merger,  sale,  conveyance or
statutory  exchange  by a holder of the number of shares of Common  Stock  which
could have been  purchased  upon exercise of this Warrant  immediately  prior to
such  reclassification,  change,  consolidation,  merger, sale,  conveyance,  or
statutory  exchange and (ii) the successor or acquiring  entity shall  expressly
assume  the  due and  punctual  observance  and  performance  of each  covenant,
agreement, obligation and condition of this Warrant to be performed and observed
by Company and all  obligations  and  liabilities  hereunder  (including but not
limited to the  provisions  of Section 6 regarding the increase in the number of
shares of Warrant Stock  potentially  issuable  hereunder).  Any such  provision
shall include  provision for adjustments  which shall be as nearly equivalent as
possible  to  the  adjustments  provided  for in  this  Warrant.  The  foregoing
provisions   of  this   Section   10  shall   similarly   apply  to   successive
reclassifications, capital reorganizations and changes of shares of Common Stock
and to successive  consolidations,  mergers, sales or conveyances.  In the event
that in connection  with any such capital  reorganization  or  reclassification,
consolidation, merger, sale, conveyance or statutory exchange, additional shares
of Common  Stock  shall be  issued  in  exchange,  conversion,  substitution  or
payment,  in whole in part,  for a security  of the  Company  other than  Common
Stock, any such issue shall be treated as an issuance of Common Stock covered by
the  provisions of Section 6 of this Warrant.  Notice of any such event shall be
mailed by certified mail to the Holders of the Warrants no less than thirty (30)
days prior to such event.  A sale of all or  substantially  all of the Company's
assets for a consideration  consisting primarily of securities shall be deemed a
consolidation or merger for the foregoing purposes.

     11.  TRANSFER TO COMPLY WITH THE  SECURITIES  ACT OF 1933.  This Warrant or
the Warrant Stock or any other security issued or issuable upon exercise of this
Warrant may not be sold or otherwise disposed of except as follows:

          (i)  to a person who, in the  opinion of counsel for the  Company,  or
     counsel for the Holder who is reasonably  acceptable  to the Company,  is a
     person to whom this  Warrant or Warrant  Stock may  legally be  transferred
     without registration and without the delivery of a current prospectus under
     the Act with respect  thereto and then only against receipt of an agreement
     of such  person to  comply  with the  provisions  of this  Section  11 with
     respect  to any  resale  or  other  disposition  of such  securities  which
     agreement  shall be  satisfactory  in form and substance to the Company and
     its counsel; or

                                       8
<PAGE>

          (ii) to any person upon  delivery  of a  prospectus  then  meeting the
     requirements  of the Act  relating  to  such  securities  and the  offering
     thereof for such sale or disposition.

     12.  GOVERNING LAW; JURISDICTION.  The corporate laws of the State of Texas
shall govern all issues  concerning  the relative  rights of the Company and its
stockholders. All issues concerning the construction,  validity, enforcement and
interpretation  of this Warrant shall be governed by and construed in accordance
with the  internal  laws of the State of New York without  giving  effect to the
principles of conflicts of law thereof.  The parties  hereto agree that venue in
any and all  actions  and  proceedings  related  to the  subject  matter of this
Warrant shall be in the state and federal  courts in and for New York, New York,
which courts shall have exclusive jurisdiction for such purpose, and the parties
hereto  irrevocably  submit to the  exclusive  jurisdiction  of such  courts and
irrevocably waive the defense of an inconvenient forum to the maintenance of any
such  action  or  proceeding.  Service  of  process  may be made  in any  manner
recognized  by such  courts.  This  Warrant  and any term hereof may be changed,
waived,  discharged or terminated only by an instrument in writing signed by the
party against which enforcement of the change, waiver,  discharge or termination
is sought.

     13.  NOTICES.  Any and all notices or other  communications  or  deliveries
required or permitted to be provided  hereunder shall be in writing and shall be
deemed given and effective on the earliest of (i) the date of  transmission,  if
such  notice or  communication  is  delivered  VIA  facsimile  at the  facsimile
telephone  number  specified in this Section  prior to 6:30 p.m.  (New York City
time) on a Business Day,  (ii) the Business Day after the date of  transmission,
if such notice or  communication  is delivered  VIA  facsimile at the  facsimile
telephone number specified in this Agreement later than 6:30 p.m. (New York City
time) on any date and earlier than 11:59 p.m. (New York City time) on such date,
(iii) the  Business Day  following  the date of mailing,  if sent by  nationally
recognized  overnight courier service,  or (iv) upon actual receipt by the party
to whom such notice is required  to be given.  The address for such  notices and
communications shall be as follows:

          If to the Company:  National Scientific Corporation
                              Scottsdale Technology Center
                              14455 North Hayden Road, Suite 202
                              Scottsdale, AZ  85260-6497

          If to the Holder:   To the Address Set Forth on the cover page hereof.

     14.  MODIFICATION   OF  WARRANT.   This  Warrant  shall  not  be  modified,
supplemented or altered in any respect,  nor any provision  waived,  except with
the consent in writing of the Holders  representing  not less than fifty percent
(50%) of the Warrants then outstanding.

                                       9
<PAGE>

     15.  PAYMENT OF TAXES.  The Company  will pay all  documentary  stamp taxes
attributable  to the issuance of shares of Common Stock  underlying this Warrant
upon exercise of this Warrant; provided,  however, that the Company shall not be
required to pay any tax which may be payable in respect of any transfer involved
in the  registration of any  certificate  for shares of Common Stock  underlying
this Warrant in a name other that of the Holder.  The Holder is responsible  for
all other tax  liability  that may arise as a result of holding or  transferring
this Warrant or receiving  shares of Common Stock  underlying  this Warrant upon
exercise hereof.

     IN WITNESS  WHEREOF,  this  Warrant  has been duly  executed as of April 8,
2004.

                                        NATIONAL SCIENTIFIC CORPORATION

                                        By:
                                            ------------------------------------
                                            Michael A. Grollman
                                            Chairman and Chief Executive Officer

ATTEST:

-------------------------------------
Secretary

[CORPORATE SEAL]

                                       10
<PAGE>

                               SUBSCRIPTION (CASH)

          The   undersigned,   ____________________________,   pursuant  to  the
provisions  of  the  foregoing  Warrant,  hereby  agrees  to  subscribe  for and
purchase  ___________________  shares of the Common Stock,  par value $_____ per
share,  of  ______________________  covered by said  Warrant,  and makes payment
therefor in full at the price per share provided by said Warrant.

Dated: ________________________          Signature:  ___________________________

                                CASHLESS EXERCISE

          The   undersigned,   ____________________________,   pursuant  to  the
provisions  of the  foregoing  Warrant,  hereby  agrees to  exchange its Warrant
for ___________________  shares of the Common Stock, par value $_____ per share,
of  ______________________  pursuant to the Cashless Exercise  provisions of the
Warrant.

Dated: ________________________          Signature:  ___________________________

                                         Address:    ___________________________

                                       11
<PAGE>

                                   ASSIGNMENT

          FOR VALUE  RECEIVED  ___________________  hereby  sells,  assigns  and
transfers  unto  ________________________  the foregoing  Warrant and all rights
evidenced    thereby,    and   does    irrevocably    constitute   and   appoint
___________________,  attorney,  to  transfer  said  Warrant  on  the  books  of
_________________________.

Dated: ________________________          Signature:  ___________________________

                                         Address:    ___________________________

                               PARTIAL ASSIGNMENT

          FOR VALUE  RECEIVED  ___________________  hereby  sells,  assigns  and
transfers  unto  ________________________  the  right to  purchase  ____________
shares of Common Stock, par value $_____ per share of  _________________________
covered by the foregoing  Warrant,  and a proportionate part of said Warrant and
the rights  evidenced  thereby,  and does  irrevocably  constitute  and  appoint
___________________,  attorney,  to  transfer  such part of said  Warrant on the
books of _________________________.

Dated: ________________________          Signature:  ___________________________

                                         Address:    ___________________________

                                       12

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