EXHIBIT 10.3


                              CONSULTING AGREEMENT

     THIS  CONSULTING  AGREEMENT   ("AGREEMENT")  IS  ENTERED  BETWEEN  NATIONAL
SCIENTIFIC  CORPORATION  AND SAM H. CARR, OR THE LIMITED  LIABILITY  CORPORATION
ESTABLISHED  BY MR.  CARR FOR THIS  PURPOSE,  EFFECTIVE  THIS 1ST DAY OF AUGUST,
2002.  "NSC," OR "COMPANY" AS USED IN THIS AGREEMENT  MEANS NATIONAL  SCIENTIFIC
CORPORATION.  "CONTRACTOR" OR "CARR" AS USED IN THIS AGREEMENT MEANS SAM H. CARR
OR THE LIMITED LIABILITY CORPORATION ESTABLISHED BY MR. CARR FOR THIS PURPOSE.

     For good and valuable consideration, as set forth herein, the parties agree
as follows:

     1.  DISPLACEMENT  OF EXISTING  CONTRACTS:  This  Agreement  supersedes  and
entirely  revokes,  abrogates,  and  displaces  any and all existing  agreements
between the parties hereto regarding  compensation for services  rendered to the
Company, other than the Settlement and Release Agreement of July 31, 2002.

     2.  POSITION AND DUTIES OF  CONTRACTOR:  As of the  effective  date of this
Agreement,  Carr  is  retained  by NSC in the  position  of  Financial  Services
Contract Executive. Carr will perform such duties as are assigned by the Company
Board  consistent  with that position,  which may vary from time to time, or any
other  position he may  subsequently  assume with NSC,  and will devote his full
knowledge,  skills, attention, and efforts to the business of the Company. These
duties are detailed in Attachment A, "Specific Duties and Compensation," and are
subject to change as at a later time if both  parties  agree to such  changes in
writing.

     3. TERM OF AGREEMENT:  The term of this Agreement will be through  December
31, 2002, from the effective date of this Agreement, unless sooner terminated in
accordance with the provisions set forth herein. The contract will automatically
renew for another 12 month period at that time, unless the Company provides Carr
with 90 calendar days written notice of intent to terminate this Agreement prior
to December 31, 2002.


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     4.  COMPENSATION & SPECIFIC DUTIES:  For his services under this Agreement,
Carr will receive the Compensation  listed in Attachment A, "Specific Duties and
Compensation"

     5. EXPENSES:  NSC will reimburse Carr for all reasonable  business expenses
incurred and documented in compliance with Company policy and procedure.

     6. EXTERNAL COVENANTS AND RESTRICTIONS:  Carr certifies that he is under no
restrictive  covenant or similar  obligation by reason of a prior  employment or
other relationship.  Carr agrees not to undertake,  during his service with NSC,
any external  obligation that would  materially  restrict his ability to perform
his duties under this Agreement.

     7. OWNERSHIP OF WORK PRODUCT:  Carr acknowledges and agrees that the nature
of his services to NSC and its  clients/customers may have involved and continue
to involve  development  and/or  improvement of technology,  systems,  formulas,
processes,  procedures,  computer-software programs, other programs, and related
documentation.

     a.   Carr agrees that all new or improved  technology,  systems,  formulas,
          processes, procedures, computer-software programs, other programs, and
          related  documentation that Carr has or has had any part in developing
          or improving  are, will be and remain the sole and exclusive  property
          of NSC, and that Carr has  acquired and will acquire no right,  title,
          or  interest  therein.  Carr  further  agrees to  execute  any and all
          documents  necessary for NSC to secure and protect its interest in any
          such   technology,    systems,   formulas,   processes,    procedures,
          computer-software programs, other programs, and related documentation,
          including  but not  limited to  documents  related to  non-disclosure,
          patents,  licenses,  or copyrights,  whether of any state, federal, or
          foreign government.

     b.   Carr  further  acknowledges  and  expressly  agrees  that  all  files,
          records,   lists,  books,   literature,   correspondence,   documents,
          services,  products and data of any type  whatsoever,  and in whatever
          form, including electronically or digitally stored data, related to or
          used in the conduct of the business of NSC, its customers/clients,  or


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          prospective customers/clients are and will remain the property of NSC.
          Carr agrees that,  upon  termination  of this agreement for any reason
          whatsoever,  he will surrender and deliver to NSC all such information
          and materials,  and, to the extent any such material is electronically
          or digitally  stored on a computer or another  medium,  any  remaining
          copies  of  information  surrendered  or  delivered  to  NSC  will  be
          permanently  deleted  from any  computer  or other means of storage in
          NSC's possession.

     8. CONFIDENTIAL  INFORMATION:  Carr acknowledges that, in the course of his
service  with NSC, he has  acquired,  used and added to, and will be  acquiring,
using, and adding to Confidential Information of a special and unique nature and
value.  Carr  acknowledges and understands  that NSC is in a highly  competitive
business  and that its success  depends in  significant  part on  maintaining  a
competitive advantage.  Carr acknowledges and understands that NSC maintains and
uses Confidential Information to gain and maintain such a competitive advantage.

     a.   For the purposes of this Agreement, "Confidential Information" is that
          which  is not  routinely  disclosed  by the  management  or  Board  of
          Directors  of  NSC  in  response  to  inquiries  and  is  not  readily
          obtainable elsewhere.  "Confidential  information" includes but is not
          limited to information  related to the business,  operations,  assets,
          systems,   plans,   products,   contracts,   procedures,    processes,
          documentation,  computer programs,  or software products of NSC and/or
          its customers or clients and any information  about the development or
          improvement  of any technology by NSC and/or its customers or clients.
          Information  obtained by Carr in the course of his previous  work with
          NSC or service under this Agreement is Confidential Information unless
          it is in the public domain.  Information which is in the public domain
          through sources other than Contractor is not Confidential Information.

     b.   Carr  agrees he will  not,  during or after  his  service  under  this
          agreement,  disclose any  Confidential  Information  to any  person(s)
          without  the  express  written   permission  of  NSC  except  as  such
          disclosures may be reasonably necessary in carrying out his duties for
          NSC.

     c.   Carr  acknowledges  and agrees  that any  disclosure  of  Confidential
          Information by him will constitute a material breach of this Agreement


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          and be cause for immediate  termination of this Agreement and may give
          rise to other legal liabilities for Contractor and remedies for NSC.

     9.  AGREEMENT  NOT TO  COMPETE:  Carr  acknowledges  that,  in  addition to
Confidential  Information to which he has had access and will have access during
the course of his service under this agreement, he will be given the opportunity
to develop and maintain relationships on behalf of NSC with employees of NSC and
with existing and future customers and prospective customers and clients of NSC.
Carr agrees that during the term of this Agreement and any extension thereof and
for a period of one (1) year after  termination of this Agreement,  he will not,
directly or indirectly,  as owner, partner,  principal,  shareholder,  director,
investor, lender, officer, agent, or in any other capacity:

     a.   solicit, divert, or accept business from any person or entity that was
          a current or prospective  customer or client of NSC at any time during
          the one-year period before termination of this Agreement, or

     b.   employ or solicit for employment any person who was an employee of NSC
          at any time during the  one-year  period  before  termination  of this
          Agreement.

     c.   For purposes of this Agreement,  a "prospective" customer or client is
          one that, at any time during the one-year period before termination of
          this  Agreement,  received a proposal  from NSC or whose  business was
          demonstrably solicited by NSC.

     10. TERMINATION OF AGREEMENT:  This Agreement will terminate as provided in
Section 3 unless  sooner  terminated  by any of the  following  events.

     a.   This  Agreement  will  terminate  at  any  time  upon  mutual  written
          agreement of NSC and Carr, in accordance with the terms of that mutual
          agreement.

     b.   This  Agreement  will  terminate  upon a filing  for the  liquidation,
          dissolution  or bankruptcy of NSC. In the event of such a termination,
          Carr will be  entitled  only to  compensation  earned on or before the
          final date of the contract termination.

     c.   This Agreement will terminate on the date of Carr' death.


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     d.   Carr may terminate this Agreement  without cause upon thirty (30) days
          written notice to NSC. In the event of such termination,  Carr will be
          entitled  only to  compensation  earned on or before the final date of
          this service.

     e.   NSC may  terminate  this  Agreement  at any time  without  cause  upon
          written  notice to Carr, but will pay a penalty of  approximately  six
          months of compensation to do so. In the event of such termination, NSC
          will pay Carr  $90,000 as  liquidated  damages  for this  termination,
          payable  $15,000 on the first of each  month for six months  following
          such termination.

     f.   Notwithstanding  any other  provision  hereof,  NSC may terminate this
          Agreement  and for  cause at any time  upon  written  notice  to Carr,
          specifying  the cause for  termination.  "Cause  for  termination"  is
          defined as any of the following:  repeated neglect of duties;  failure
          to comply with lawful instructions; fraud; theft; habitual drunkenness
          or  substance  abuse;  unethical  business  conduct;  conviction  of a
          felony;  any act or failure to act that would  constitute  a felony if
          prosecuted  pursuant to  applicable  criminal  statutes;  any material
          breach of this Agreement;  any willful or repeated material  violation
          of company  policy;  or failure to comply with  applicable  federal or
          state statute or regulations  regarding  trading Company stock. In the
          event  of  termination  for  cause,  Carr  will  be  entitled  only to
          compensation   earned  on  or  before  the  final  date  of  Agreement
          termination,  including  liquidated damages of $6,000,  payable within
          fifteen (15) days of such termination.

     11. SCOPE AND  MODIFICATION  OF AGREEMENT:  Neither party has relied on any
statement  or  representation  by the other party or any  representative  of the
other  party  that  is not  expressly  stated  in  this  Agreement.  Changes  or
amendments to this  Agreement are of no effect unless in writing  signed by both
parties.

     12. PROHIBITION OF ASSIGNMENT:  This Agreement is personal to Carr. Neither
party can assign the  performance of  obligations  hereunder to any third party.
Notwithstanding  that,  the parties'  rights under this  Agreement  inure to the
benefit of their respective successors, heirs, and assigns.


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     13.  SEVERABILITY:  The provisions  herein entitled  Position and Duties of
Contractor,  Compensation,  Expenses, Termination, and Prohibition of Assignment
are not severable.  All other provisions herein are severable. The ruling of any
court or arbitrator of competent  jurisdiction  that any severable  provision is
void, voidable, or otherwise  unenforceable shall have no effect on the validity
and enforceability of any other provision.

     14. CHOICE OF LAW: This  Agreement is to be construed  and  interpreted  in
accordance  with the laws of Arizona,  except as those laws may be  preempted by
federal law,  and without  regard to choice of laws rules.  No action  involving
this  Agreement may be brought  except as provided in Sections 18 below,  and no
court action  challenging the enforceability of Section 18 may be brought except
in a state or federal court located in Phoenix, Maricopa County, Arizona.

     15. WAIVER: Waiver by either party of any breach under this Agreement shall
not  operate  as a waiver  of any  subsequent  breach  of the same or any  other
provision of this Agreement.

     16.  NOTICES:  Any notice required under this Agreement shall be sufficient
if given in  writing  and sent by  registered  mail to the below  address of the
party to be noticed.

          National Scientific Corporation                     Sam H. Carr
          14455 N Hayden Road                          6811 E. Mescal St.
          Suite 202                            Scottsdale, Arizona  85254
          Scottsdale, Arizona 85260

     17.  ARBITRATION  OF CLAIMS AND  DISPUTES:  Except as  otherwise  expressly
provided in this  Agreement,  any civil claim which  arises out of or relates in
any way to this  Agreement,  to the  parties'  previous  contract(s),  or to the
relationship  between the parties  shall be settled by exclusive,  binding,  and
final arbitration in Phoenix,  Arizona,  in accordance with Rules, and under the
auspices,  of the American  Arbitration  Association.  This  includes but is not
limited  to  claims   arising   under  the  common  law  of  contract  or  tort,
discrimination claims, and all claims arising under any federal,  state, county,

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or municipal constitution,  charter,  statute, rule, or regulation.  THE PARTIES
EXPRESSLY  AGREE TO FOREGO ANY RIGHT TO TRIAL BY A JUDGE AND/OR JURY IN FAVOR OF
FINAL, BINDING, AND EXCLUSIVE ARBITRATION.

     18. RIGHT TO INJUNCTIVE RELIEF:  Notwithstanding  the parties' agreement to
arbitrate  any and all civil  claims that may arise from this  Agreement,  their
prior  contract(s),  or the  relationship  between them, Carr  acknowledges  and
agrees  that any breach or  threatened  breach of Sections 8 or 9 will cause NSC
irreparable  harm and entitle NSC to such injunctive  relief as may be necessary
to prevent such a breach by Carr and/or any person  acting for or with him. This
right to injunctive relief is in addition to and without limitation of any other
rights,  remedies, or damages available to NSC under this Agreement or at law or
in equity.  Carr shall  reimburse NSC its costs and reasonable  attorney's  fees
incurred in obtaining such injunctive relief.

     19. DAMAGES FOR BREACH: NSC's liability for damages to Carr (in addition to
the  $90,000  payment  required in  paragraph  10(e)  above) for NSC'S  wrongful
termination  of this  Agreement or any other breach thereof shall not exceed the
amount of actual damages proven and, in any case, shall not exceed the amount of
compensation  and expenses  Carr did not receive and would have  received had he
completed the then-current Period of this Agreement.

     20. INDEPENDENT CONTRACTORS. The parties are independent contractors.  Each
will bear its own costs and expenses incurred in connection with this Agreement.
Neither party has the authority to bind the other to any third party  agreement,
except as may be mutually agreed upon in a separate  writing.  In no event shall
either  party be liable  for any debts of the other  party to its  customers  or
other creditors unless provided for in this Agreement or in a separate writing.

     21. LEGAL COUNSEL: The parties agree that they have read and understand the
terms of this  Agreement  and that they have had ample  opportunity  to seek the
counsel of their own attorneys before executing this Agreement.

     22.  EXECUTION  IN   COUNTERPARTS:   This  Agreement  may  be  executed  in
counterparts  with  the  same  effect  as if the  parties  had  signed  the same
document.  The counterparts shall be construed together and shall constitute one
Agreement.


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Executed this date, August 1, 2002, in Scottsdale, Arizona,

     National Scientific Corporation          Sam H.Carr

By:  /s/ Michael A. Grollman             By:  /s/ Sam H. Carr
     -------------------------------          ----------------------------------

Its: Chief Executive Officer
     -------------------------------




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                                  ATTACHMENT A

    SPECIFIC DUTIES AND COMPENSATION AS FINANCIAL SERVICES CONTRACT EXECUTIVE

SPECIFIC DUTIES:

1.   Carr  will  oversee  the  financial   operations  of  NSC,   including  the
     preparation of financial  statements and routine  periodic filings required
     to comply with SEC  requirements.  With regard to these  periodic  filings,
     Carr will  coordinate  reviews and revisions as necessary with  independent
     professionals such as securities attorneys and auditors.

2.   Consult  with  the  Board  and  management  about  financing   options  and
     facilitate their implementation or execution.

3.   Report as requested to the Board  regarding the financial  condition of the
     Company.

4.   Oversee the  accounting  functions  and  employee(s)  to ensure  proper and
     accurate   financial   reporting  in  compliance  with  Generally  Accepted
     Accounting  Principles.

5.   Coordinate  with  NSC's   independent   auditor  to  ensure  a  smooth  and
     non-disruptive  annual audit.

6.   Facilitate  the financial  modeling and business  planning of NSC as needed
     for projects or business  planning as requested by the Board.

7.   Perform  as a  financial  representative  for NSC  with  external  business
     associates  in  proposal   meetings,   sales  meetings  or  other  business
     gatherings requiring financial representation.


COMPENSATION:

Compensation:

1.   Monthly Direct Cash Payment for approximately 160 hours/month of service at
     $15,000 per month,  payable bi-monthly in appears. The initial payment will
     be August 15,  2002.  Carr will be allowed the  equivalent  of 160 business
     hours (i.e.  four weeks) per annum as compensated  time away from NSC. Carr
     agrees to defer  $3,000 of the  Monthly  Direct  Cash  Payment  to curb the
     demand on the  Company's  cash flow.  It is  understood  that when the cash
     position  of the  Company  improves,  the  deferred  amounts  will be paid.
     However,  regardless of the Company's cash position, the amount of deferred
     Monthly Direct Cash Payments must be paid to Carr upon his written demand.

2.   Monthly Cash Payment for  Administrative  Costs incurred by Carr of $2,083,
     payable  bi-monthly  in arrears.  The initial cash payment for Monthly Cash



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     Payment  for  Administrative  Costs  will be August  15,  2002.  Any future
     reduction  in COBRA  insurance  payments,  which make up a component of the
     Administrative   Costs  will   reduce  the   Monthly   Cash   Payment   for
     Administrative Costs directly.

3.   For the duration of this Agreement, Carr will be granted,  according to the
     following  schedule,  additional  fully vested  options to purchase  common
     stock in the Company each time the Rolling  Average  Closing  Price for the
     most recent ten business days reaches or surpasses a  previously-unattained
     Whole Dollar Value above the Initial Average Closing Price.

     (1)  For each Whole Dollar Value  reached or  surpassed  between  $4.00 per
          share and $15.00 per share, inclusive,  Carr will be granted an option
          to purchase  Seventy-Five Thousand (75,000) shares at the Whole Dollar
          Value reached or surpassed.

     (2)  For each Whole Dollar Value  reached or surpassed  between  $16.00 per
          share and $30.00 per share, inclusive,  Carr will be granted an option
          to purchase Thirty Thousand  (30,000) shares at the Whole Dollar Value
          reached or surpassed.

     (3)  For each Whole Dollar Value  reached or surpassed  between  $31.00 per
          share and $50.00 per share, inclusive,  Carr will be granted an option
          to purchase  Ten  Thousand  (10,000)  shares at the Whole Dollar Value
          reached or surpassed.



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