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                                                                   Exhibit 10.19

                               INCENTIVE AGREEMENT


          THIS AGREEMENT is made effective as of August 10, 1998 by and between
SPECTRUM MEDICAL INDUSTRIES, INC., SPECTRUM LABORATORIES, INC, each a California
corporation (jointly referred to hereinafter as "SPECTRUM") and F. Jesus
Martinez ("MARTINEZ"), residing at 26541 Sotelo, Mission Viejo, CA 92692 and Roy
T. Eddleman, Chairman and CEO of SPECTRUM ("EDDLEMAN"), residing at 417 Amapola
Lane, Los Angeles, CA 90077-3411.

                                    RECITALS

         To retain MARTINEZ as an employee of SPECTRUM, SPECTRUM desires to
grant to MARTINEZ certain employment incentives, and MARTINEZ is willing to
remain in the employ of SPECTRUM on the terms and conditions set forth herein.

          DEFINITION. The "EVENT" is defined as the sale or acquisition or
merger of SPECTRUM with another entity, regardless whether or not SPECTRUM
remains the surviving entity. The merger of SPECTRUM MEDICAL INDUSTRIES, INC.,
and SPECTRUM LABORATORIES. INC., or any of SPECTRUM LABORATORIES, INC., or any
of SPECTRUM's wholly owned subsidiaries or vice versa is excluded from to
definition of the "EVENT".

          NOW, THEREFORE, in consideration of the promises and the mutual
covenants and conditions contained herein, MARTINEZ and EDDLEMAN agree as
follows:

          1.      Effective as of the date specified herein above, SPECTRUM and
                  EDDLEMAN agree to grant MARTINEZ an option for MARTINEZ to
                  acquire undiluted three percent interest (undiluted 3%) in
                  SPECTRUM of the issued and outstanding shares of SPECTRUM at a
                  price of $0.12 per share per current fair market price vested
                  immediately. The option can be exercised at anytime over a
                  ten(10) year period in whole or in part. Said option shall
                  contain a cashless exercise provision. Upon exercise of the
                  option SPECTRUM and EDDLEMAN shall complete the process to
                  make MARTINEZ the registered owner of such shares of common
                  stock of SPECTRUM, including any other class or classes of
                  stock that have rights of conversion to common shares of
                  SPECTRUM. MARTINEZ hereby acknowledges that he shall be
                  responsible for any tax consequences to him after the transfer
                  of ownership of shares as stipulated above.

          2.      Effective as the date hereof, SPECTRUM and EDDLEMAN further
                  agree to grant MARTINEZ an option for MARTINEZ to acquire
                  undiluted one percent interest


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                  (undiluted 1.0%) in SPECTRUM of the issued and outstanding
                  shares of SPECTRUM at a price of $0.12 per share (current fair
                  market price), for each two (2) years that MARTINEZ remain in
                  the employ of SPECTRUM. Such option vests on the second
                  anniversary of this agreement for an undiluted one percent
                  (1%) and on the fourth anniversary for an additional one
                  percent (1%). The option is for a period of ten (10) years.
                  The option can be exercised at any time over a ten (10) year
                  period in whole or in part. Said option shall contain a
                  cashless exercise provision. Upon exercise of the option
                  SPECTRUM and EDDLEMAN shall complete the process to make
                  MARTINEZ the registered owner of such shares of common stock
                  of SPECTRUM, including any other class or classes of stock
                  that have rights of conversion to common shares of SPECTRUM.
                  MARTINEZ hereby acknowledges that he shall be responsible for
                  any tax consequences to him after to transfer of ownership of
                  shares as stipulated above.

          3.      Effective as of to hereof, SPECTRUM and EDDLEMAN further agree
                  to make a "payment-in-kind" equal to five percent (5.0%) of
                  the net sales proceeds in the event SPECTRUM is acquired by or
                  merges with another entity as long as MARTINEZ is employed by
                  the SPECTRUM. Such "payment-in-kind" to MARTINEZ shall be made
                  in the same United Status currency or common stock of the
                  acquiring entity, or a combination thereof, on the same date
                  as the effective date of the EVENT. In the event of such
                  payment, all unexercised options are canceled and MARTINEZ,
                  shall sell all shares acquired upon exercise of the options
                  back to SPECTRUM for $.12 per share, the exercise price of the
                  option.

          4.      Effective as of the date specified herein above, SPECTRUM and
                  EDDLEMAN further agree that MARTINEZ shall not be terminated
                  prior to the effective dare of the "EVENT" if an "EVENT" is
                  forthcoming, for any reason other than "cause" as defined
                  below. For purposes of this AGREEMENT, termination for "cause"
                  shall mean (a) termination for dishonesty relating to
                  SPECTRUM's funds or assets, (b) conviction of a felony
                  involving SPECTRUM, (c) willful unauthorized disclosure of a
                  trade secret or other confidential information of SPECTRUM,
                  (d) habitual insobriety or drug addiction, or (e) continuation
                  of



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                  conduct which materially damages SPECTRUM after notice and an
                  opportunity to cure.

              IN WITNESS WHEREOF, the parties have executed this AGREEMENT as of
the day and year first above written.

For "SPECTRUM"                              For "MARTINEZ"

SPECTRUM MEDICAL INDUSTRIES, INC.           F. Jesus Martinez
and SPECTRUM LABORATORIES, INC.             26541 Sotelo
Laguna Hills, CA 92653-1362                 Mission Viejo, CA 92692

By: /s/ Roy T. Eddleman                     By: /s/ F. Jesus Martinez
   -----------------------------               -----------------------------
   Roy T. Eddleman, Chairman and CEO           F. Jesus Martinez

For "EDDLEMAN"

Roy T. Eddleman
417 Amapola Lane
Los Angeles, CA 90077-3411

/s/ Roy T. Eddleman
--------------------------------
Roy T. Eddleman

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