Document:

EXHIBIT 10.2

                              EMPLOYMENT AGREEMENT

     This Employment Agreement ("Agreement") is entered between National
Scientific Corporation and Graham Clark, effective the date it has been fully
executed by both parties. "NSC," "Employer," or "Company" as used in this
Agreement means National Scientific Corporation and/or its subsidiaries or
affiliate corporations located in the United States or elsewhere. "Employee" or
"Clark" as used in this Agreement means Graham Clark.

     For good and valuable consideration, including the covenants 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 independent
contractor agreements and other agreements between the parties hereto, if any.

     2.   POSITION AND DUTIES OF EMPLOYEE: Effective January 1, 2003, Clark is
retained by NSC in the position of Vice President of Technology Application and
Sales, and Director and Board Secretary. Clark will perform such duties as are
assigned by senior management consistent with that position and will devote his
full knowledge, skills, attention, and efforts to the business of the Company.

     3.   PERIOD OF EMPLOYMENT: The term of this Agreement ("Period of
Employment") will be one (1) year, commencing January 1, 2003, unless sooner
terminated according to the provisions set forth herein. This Agreement will be
self-renewing for subsequent one-year Periods of Employment unless one of the
parties notifies the other in writing at least thirty days before the end of the
then-current Period of Employment of his/its intent not to renew.

     4.   COMPENSATION: For his services under this Agreement, Clark will:

          a.   receive an annual gross salary of One Hundred Twenty Thousand
               Dollars ($120,000.00), payable monthly. Adjustments to annual

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               salary are to be determined by senior management and/or the Board
               of Directors. Adjustments to annual salary must be in writing.
               The cash portion of this salary may be deferred as described in
               Exhibit A to this Agreement, titled "Salary Deferral Agreement."

          b.   be entitled to participate in benefits programs offered employees
               of NSC in his benefits classification.

          c.   be entitled to four (4) weeks of paid vacation per year.

          d.   be eligible for future cash and stock incentives the Company may,
               in its sole discretion, decide to offer him, including the Stock
               Retainage Plan ("Stock Retainage Plan Agreement") as shown in
               Exhibit B.

          e.   be assisted with payment of legal fees and with other appropriate
               actions associated with securing "Green Card" US immigration
               status.

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

     6.   EXTERNAL COVENANTS AND RESTRICTIONS: Clark certifies that he has
notified NSC and provided NSC a copy of any and all restrictive covenants and
similar obligations he may have undertaken by reason of a prior employment or
other relationship. Clark agrees not to undertake, during his employment by NSC,
any external obligation that could restrict his ability to perform his duties
under this Agreement.

     7.   OWNERSHIP OF WORK PRODUCT: Clark 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,
processes, procedures, computer-software programs, other programs, and related
documentation.

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          a.   Clark agrees that all new or improved technology, systems,
               processes, procedures, computer-software programs, other
               programs, related documentation and intellectual property that
               Clark has or has had any part in developing or improving THAT
               RELATE DIRECTLY TO ACTIVE AREAS OF NSC BUSINESS INTEREST will be
               and remain the sole and exclusive property of NSC and that Clark
               will acquire no right, title, or interest therein. Clark further
               agrees to execute any and all documents necessary for NSC to
               secure and protect its interest in any such technology, systems,
               processes, procedures, computer-software programs, other
               programs, related documentation and intellectual property,
               including but not limited to documents related to non-disclosure,
               patents, licenses, or copyrights, whether of any state, federal,
               or foreign government. . Clark agrees that, upon termination of
               his employment for any reason whatsoever, he will surrender and
               deliver to NSC all such information and materials

          b.   Clark further acknowledges and expressly agrees that all files,
               records, lists, books, literature, correspondence, documents,
               services, products and data of any type whatsoever related to or
               used in the conduct of the business of NSC, its
               customers/clients, or prospective customers/clients will remain
               the property of NSC. Clark agrees that, upon termination of his
               employment for any reason whatsoever, he will surrender and
               deliver to NSC all such information and materials.

          c.   The parties agree that this section survives the termination of
               this Agreement for a period of two (2) years from the date of
               such termination.

     8.   CONFIDENTIAL INFORMATION: Clark acknowledges that, in the course of
his existing contract with NSC and this employment, he will generate work
products, has acquired and will be acquiring, using, and adding to confidential
information of a special and unique nature and value. Clark acknowledges and
understands that NSC is in a highly competitive business and that its success
depends in significant part on maintaining a competitive advantage. Clark
acknowledges and understands that NSC maintains and uses work product and
confidential information to gain and maintain such a competitive advantage.

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          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 without expenditure of significant time,
               effort, or expense. "Confidential information" includes but is
               not limited to information related to the business, operations,
               assets, systems, plans, work products, contracts, procedures,
               processes, intellectual property, 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 Clark in the course of his previous work
               with NSC or his employment under this Agreement is confidential
               information unless it can reasonably be presumed to be in the
               public domain.

          b.   Clark agrees that he will not, during or after his employment,
               disclose any confidential information to any person(s) without
               the express written permission of NSC.

          c.   Clark acknowledges and agrees that any disclosure of confidential
               information by him will constitute a material breach of this
               Agreement and cause for termination of this Agreement and will
               give rise to such other legal remedies as NSC may elect to
               pursue.

          d.   The parties agree that this section survives the termination of
               this Agreement.

     9.   AGREEMENT NOT TO COMPETE: Clark acknowledges that, in addition to
confidential information which he generates or to which he has or had access and
will have access during the course of his employment, he will be given the
opportunity to develop and maintain close personal rapport and good relations on
behalf of NSC with other employees of NSC and with existing and future customers

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and prospective customers of NSC. Clark agrees that during the Period of
Employment 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, officer, agent, or in any other
capacity:

          a.   solicit, divert, or accept business from any current or
               prospective customer or client of NSC with whom Clark had contact
               in his capacity as an employee or contractor of NSC during the
               one-year period before termination of this Agreement or

          b.   employ or solicit for employment any employee of NSC with whom
               Clark worked during the one-year period before termination of
               this Agreement.

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

          d.   The parties agree that this section survives the termination of
               this Agreement by one (1) year from such termination, unless such
               termination is via section 10.c below, in which case this section
               will survive thirty (30) days from such termination via section
               10.c below.

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

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

          b.   This Agreement will terminate upon the sale of all or
               substantially all of the assets or outstanding capital stock of
               NSC or any other material change in control of the Company. In
               the event of such termination, NSC will pay Clark an amount
               equivalent to fifty percent (50%) of his then-current annual
               gross salary.

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          c.   This Agreement will terminate upon the liquidation, dissolution
               or bankruptcy of NSC. In the event of such termination, however,
               NSC will pay Clark an amount equivalent to twenty-five percent
               (25%) of his then-current annual gross salary.

          d.   This Agreement will terminate on the date of Clark's death.

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

          f.   NSC may terminate this Agreement without cause upon written
               notice to Clark. In the event of such termination, however, NSC
               will pay Clark a lump sum payment equivalent twenty-five percent
               (25%) of his then-current annual gross salary.

          g.   Notwithstanding any other provision hereof, NSC may terminate
               this Agreement and Clark's employment for cause upon written
               notice to Clark, specifying the cause for termination. "Cause for
               termination" is defined as any of the following: neglect of
               duties, insubordination, 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 violation of
               material company policy; failure to comply with applicable
               federal or state statute or regulations in trading Company stock.
               In the event of termination for cause, Clark will be entitled
               only to compensation earned on or before the final date of
               employment.

     11.  SCOPE AND MODIFICATION OF AGREEMENT: The parties agree that this
Agreement contains the entire agreement between the parties concerning Clark's
employment by NSC, except for any existing Stock Option Agreements between NSC

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and Clark, which remain in force. All previous and contemporaneous statements
and representations by either party are of no effect and are expressly
superseded and replaced by this 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.  SEVERABILITY: The provisions herein entitled Position and Duties of
Employee, Compensation, Expenses, Termination of Employment, and Prohibition of
Assignment are not 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.

     13.  PROHIBITION OF ASSIGNMENT: This Agreement is personal to Clark and
neither party can assign his/its performance obligations hereunder to any third
party. Notwithstanding that, the rights of the parties under this Agreement
inure to the benefit of their respective successors, heirs, and assigns.

     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. No action involving this Agreement may be brought except as
provided in Sections 17 and 18 below, and no court action challenging the
enforceability of Section 17 may be brought except in the United States District
Court for the District of 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.

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          National Scientific Corporation         Graham Clark
          14455 N. Hayden Rd Road                 15449 N. Cabrillo Drive
          Suite 202                               Fountain Hills, AZ. 85268
          Scottsdale, Arizona 85260

     17.  ARBITRATION OF CLAIMS AND DISPUTES: Except as otherwise expressly
provided in this Agreement, any civil claim (except workers' compensation and
unemployment compensation claims) which arises out of or relates in any way to
this Agreement, to the parties' existing contract, or to the employment
relationship between the parties shall be settled by exclusive, binding, and
final arbitration in Phoenix, Arizona, in accordance with the following terms
and procedures. This includes but is not limited to claims arising under the
common law of contract, tort, or crimes and claims arising under any federal,
state, county, 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.

          a.   The party with a civil claim must notify the other party in
               writing by registered mail within the times set forth by statute
               for filing a civil claim of the type asserted of its desire to
               have the claim resolved by arbitration.

          b.   Upon notice of a timely civil claim, the parties will agree upon
               an arbitrator or, if unable to agree, will request a list from
               the American Arbitration Association or some other
               mutually-agreed-upon provider of arbitrators from which list the
               parties will alternate strikes until only one name remains. That
               last remaining name will be the arbitrator. If that person is
               unavailable, the name last struck will be the arbitrator, and so
               forth until an arbitrator is secured.

          c.   The arbitrator shall have no authority to add to, subtract from,
               or otherwise modify the terms of this Agreement or to make awards
               beyond those provided for by the statute or other theory of
               action under which the claim arises. Both parties must submit for
               arbitration at this time or permanently forego any and all
               existing claims against the other party arising from this
               Agreement, the existing contract between the parties, or the
               employment relationship between them.

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          d    Any party to the arbitration may be represented by counsel. Each
               party shall bear his/its own attorney's fees. The party producing
               a witness is responsible for paying that witness' fees and
               expenses. The arbitrator's fees and expenses, including required
               travel and per diem costs, and the cost of any evidence or proof
               produced at the arbitrator's direction are apportionable and
               shall be borne as determined by the arbitrator. All decisions of
               the arbitrator made in accordance with this policy shall be final
               and conclusively binding upon the parties. The parties agree that
               the arbitrator's award may be entered as a judgment by any court
               of competent jurisdiction.

          e.   Issues of procedure, arbitrability, appeal, or confirmation of
               award shall be governed by the Federal Arbitration Act, 9 U.S.C.
               sections 1-16.

          f.   The parties agree that this section survives the termination of
               this Agreement.

     18.  RIGHT TO INJUNCTIVE RELIEF: Notwithstanding the parties' agreement to
arbitrate any and all civil claims that may arise from this Agreement, their
existing contract, or the employment relationship between them, Clark
acknowledges and agrees that any breach or threatened breach of Section 8 or
Section 9 will cause NSC irreparable harm and entitle NSC to such injunctive
relief as may be necessary to prevent such a breach by Clark 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. Clark shall reimburse NSC its costs
and reasonable attorney's fees incurred in obtaining such injunctive relief.

     19.  DAMAGES FOR BREACH: NSC's liability to Clark for 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 Clark did not receive and would have received had he
completed the then-current Period of Employment.

     20.  INDEPENDENT LEGAL COUNSEL: Each of the parties agrees that he/it has
read and understands the terms of this Agreement and that he/it has had ample

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opportunity to seek the counsel of his/its own attorney before executing this
Agreement.

     21.  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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      National Scientific Corporation            Graham Clark

By:   /s/ Michael A. Grollman              By:   /s/ Graham L. Clark
      -------------------------------            -------------------------------

Its:  CEO                                  Date: 1/1/2003
      -------------------------------            -------------------------------

Date: 1/1/2003
      -------------------------------

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                       EXHIBIT A: SALARY DEFERAL AGREEMENT

     THIS SALARY DEFFERAL AGREEMENT (hereinafter referred to as this "Deferral
Agreement") made effective as of the 1st day of September 2002, is entered into
by and between NATIONAL SCIENTIFIC CORPORATION, a Texas corporation ("NSC" or
"Company") based in Scottsdale, AZ, and Graham Clark, whose principal residence
is Fountain Hills, AZ ("Employee"). The aforementioned persons and entities are
sometimes collectively referred to herein as the "parties" or "Parties" and
individually as a "party."

                                    RECITALS

     WHEREAS, NSC is the current employer of the Employee; and

     WHEREAS, NSC has paid the employee a gross salary each month for the last
12 months of approximately $10,000 in cash and other liquid forms, including
stock option agreements; and

     WHEREAS, NSC and the Employee have agreed that the Employee is willing to
defer on a temporary basis a future portion of salary to assist the Company
during a period of Company financial hardship;

     NOW, THEREFORE, in consideration of the agreement by the parties and other
good and valuable consideration, the receipt, adequacy and sufficiency of which
is hereby acknowledged and confessed, the parties hereby agree as follows:

     1.   Each of the foregoing recitals is incorporated in this Deferral
Agreement as a material term and condition.

     2.   The Employee agrees that for the one monthly payroll cycles during the
month of September 2002 that the Company can defer the gross salary payment made
to the Employee of $10,000, resulting in a total deferred amount ("Deferred
Amount") for the month of $10,000.

     3.   The Company agrees and acknowledges that the Deferred Amount remains
due and payable, with an annual interest rate of the Wells Fargo published prime
rate plus 2% calculated from the date of the scheduled monthly payroll to the
Employee by the Company, and that the Employee has the right to demand payment
of the Differed Amount plus accrued interest at any time, and that the Company,
if commercially reasonable and able, will make such a payment to the Employee
immediately at the point of such demand.

     4.   The parties agree that NSC must seek the on-going written affirmation
of the Employee to the terms of this Deferral Agreement each month by the 1st
calendar day of that month, or this Agreement will terminate automatically. The
Deferral Agreement will also terminate upon 30 days written notice by either
party.

     5.   The Deferred Amount may change on a month by month basis, as
documented in this Agreement.

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<PAGE>

     6.   The Employee has agreed to exchange $10,000 of this total deferred
amount in Exchange for one "B Unit" under the Company's November 2002 Private
Placement Offering Memorandum, when and if that Private Placement Offering is
available.

     7.   The term of this Salary Deferral Agreement is from September 30, 2002
to December 31, 2003.

     IN WITNESS WHEREOF, the Parties have executed this Deferral Agreement in
Scottsdale, Arizona, on the date set forth beside their respective names.

                                                 NATIONAL SCIENTIFIC CORPORATION

                                                 By:   /s/ Michael A. Grollman
                                                       -------------------------

                                                 Its:  CEO
                                                       -------------------------

                                                 Date: September 1, 2002
                                                       -------------------------

                                                 EMPLOYEE

                                                 By:   /s/ Graham L. Clark
                                                       -------------------------

                                                 Its:  President
                                                       -------------------------

                                                 Date: September 1, 2002
                                                       -------------------------

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                     EMPLOYEE AFFIRMATION OF SALARY DEFERRAL

By signing below each month, Employee affirms agrees to continue the salary
deferral as described on the attached SALARY DEFFERAL AGREEMENT:

       Month             Deferred Amount           Approval
--------------------     ---------------      -------------------

       Sept-02                10,000

       Oct-02                 10,000

       Nov-02                 10,000

       Dec-02                  3,000

       Jan-03                  3,000

       Feb-03

       Mar-03

       Apr-03

       May-03

       Jun-03

       Jul-03

       Aug-03

       Sep-03

       Oct-03

       Nov-03

       Dec-03

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                    EXHBIT B: STOCK RETAINAGE PLAN AGREEMENT

     THIS STOCK RETAINAGE PLAN AGREEMENT (hereinafter referred to as this "Stock
Plan Agreement") made effective as of the 30th day of September 2002, is entered
into by and between NATIONAL SCIENTIFIC CORPORATION, a Texas corporation ("NSC"
or "Company") based in Scottsdale, AZ, and Graham Clark, whose principal
residence is Fountain Hills, AZ ("Employee"). The aforementioned persons and
entities are sometimes collectively referred to herein as the "parties" or
"Parties" and individually as a "party."

                                    RECITALS

     WHEREAS, NSC is the current employer of the Employee; and

     WHEREAS, NSC and the Employee have agreed that the Employee is willing to
defer on a temporary basis a future portion of salary to assist the Company
during a period of Company financial hardship as shown in Exhibit A, Salary
Deferral Agreement;

     WHEREAS, NSC's common stock ("Common Stock") has a market value at this
month of September 2002 of approximately 7 cents per share, and this same Common
Stock, restricted under SEC rule 144, would be expected to have a lower market
value, were it salable on an open market;

     WHEREAS, NSC's total revenues in calendar year 2002 through September 30,
2002 were less than $3,000;

     WHEREAS, NSC and the Employee have agreed that the Employee is willing to
provide best efforts to ensure the Company succeeds in growing its sales over
the next fiscal year and beyond;

     NOW, THEREFORE, in consideration of the agreement by the parties and other
good and valuable consideration, the receipt, adequacy and sufficiency of which
is hereby acknowledged and confessed, the parties hereby agree as follows:

     1.   Each of the foregoing recitals is incorporated in this Stock Plan
Agreement as a material term and condition.

     2.   The Company agrees today to grant the Employee 500,000 shares of its
Common Stock, restricted under SEC rule 144, provided that the Company revenues
in calendar year 2003 surpass $200,000, a large increase over calendar year
2002, and also provided that the Employee remain continuously in the employment
of NSC throughout this 2003 period. Should this not occur, this stock grant will
be forfeited by the Employee, and such stock promptly returned to NSC.

     3.   The Company agrees to grant the Employee an additional 500,000 shares
of its Common Stock, restricted under SEC rule 144, provided that the Company
revenues in calendar year 2003 surpass $1,000,000, a large increase over
calendar year 2002, and also provided that the Employee remain continuously in
the employment of NSC throughout this 2003 period. Should this not occur, this
stock grant will be forfeited by the Employee, and such stock promptly returned
to NSC.

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     4.   Such stock grants will be issued by NSC at the earliest reasonable
date.

     5.   If Common Stock granted under this Agreement should be promptly
returned to the Company, and is not promptly returned, the Company may take
steps to cancel or otherwise nullify the grant of such shares of Common Stock as
should be promptly returned, with the Employee bearing all costs incurred
through this process.

     6.   The term of this Stock Plan Retainage Agreement is from September 30,
2002 to December 31, 2003.

     IN WITNESS WHEREOF, the Parties have executed this Stock Plan Retainage
Agreement in Scottsdale, Arizona, on the date set forth beside their respective
names.

                                                 NATIONAL SCIENTIFIC CORPORATION

                                                 By:   /s/ Michael A. Grollman
                                                       -------------------------

                                                 Its:  CEO
                                                       -------------------------

                                                 Date: September 30, 2002
                                                       -------------------------

                                                 EMPLOYEE

                                                 By:   /s/ Graham L. Clark
                                                       -------------------------

                                                 Its:  President
                                                       -------------------------

                                                 Date: September 30, 2002
                                                       -------------------------

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<PAGE>

                      2003-4 STOCK RETAINAGE PLAN AGREEMENT
                                    AMENDMENT

     THIS STOCK RETAINAGE PLAN AGREEMENT (hereinafter referred to as this "Stock
Plan Agreement") made effective as of the 30th day of September 2003, is entered
into by and between NATIONAL SCIENTIFIC CORPORATION, a Texas corporation ("NSC"
or "Company") based in Scottsdale, AZ, and Graham Clark, whose principal
residence is Fountain Hills, AZ ("Employee"). The aforementioned persons and
entities are sometimes collectively referred to herein as the "parties" or
"Parties" and individually as a "party."

                                    RECITALS

     WHEREAS, NSC is the current employer of the Employee; and

     WHEREAS, NSC and the Employee have agreed that the Employee is willing to
defer on a temporary basis a future portion of salary to assist the Company
during a period of Company financial hardship as shown in Exhibit A, Salary
Deferral Agreement;

     WHEREAS, NSC's common stock ("Common Stock") has a market value at this
month of September 2003 of approximately .13 cents per share, and this same
Common Stock, restricted under SEC rule 144, would be expected to have a lower
market value, were it salable on an open market;

     WHEREAS, NSC's total revenues in calendar year 2003 through September 30,
2003 were less than $100,000;

     WHEREAS, NSC and the Employee have agreed that the Employee is willing to
provide best efforts to ensure the Company succeeds in growing its sales over
the next fiscal year and beyond;

     NOW, THEREFORE, in consideration of the agreement by the parties and other
good and valuable consideration, the receipt, adequacy and sufficiency of which
is hereby acknowledged and confessed, the parties hereby agree as follows:

     1.   Each of the foregoing recitals is incorporated in this Stock Plan
 Agreement as a material term and condition.

     2.   The Company agrees today to grant the Employee 500,000 shares of its
Common Stock, restricted under SEC rule 144, provided that the Company revenues
in calendar year 2004 surpass $500,000, a large increase over calendar year
2003, and also provided that the Employee remain continuously in the employment
of NSC throughout this 2004 period. Should this not occur, this stock grant will
be forfeited by the Employee, and such stock promptly returned to NSC.

     3.   The Company agrees to grant the Employee an additional 500,000 shares
of its Common Stock, restricted under SEC rule 144, provided that the Company
revenues in calendar year 2003 surpass $1,500,000, a large increase over
calendar year 2003, and also provided that the Employee remain continuously in
the employment of NSC throughout this 2004 period. Should this not occur, this
stock grant will be forfeited by the Employee, and such stock promptly returned
to NSC.

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<PAGE>

     4.   Such stock grants will be issued by NSC at the earliest reasonable
date.

     5.   If Common Stock granted under this Agreement should be promptly
returned to the Company, and is not promptly returned, the Company may take
steps to cancel or otherwise nullify the grant of such shares of Common Stock as
should be promptly returned, with the Employee bearing all costs incurred
through this process.

     6.   The term of this Stock Plan Retainage Agreement is from September 30,
2003 to December 31, 2004.

     IN WITNESS WHEREOF, the Parties have executed this Stock Plan Retainage
Agreement in Scottsdale, Arizona, on the date set forth beside their respective
names.

                                                 NATIONAL SCIENTIFIC CORPORATION

                                                 By:   /s/ Michael A. Grollman
                                                       -------------------------

                                                 Its:  CEO
                                                       -------------------------

                                                 Date: September 30, 2003
                                                       -------------------------

                                                 EMPLOYEE

                                                 By:   /s/ Graham L. Clark
                                                       -------------------------

                                                 Its:  President
                                                       -------------------------

                                                 Date: September 30, 2003
                                                       -------------------------

                                       2EXHIBIT 10.3

                            NSC CONSULTING AGREEMENT

This Consulting Agreement (this "Agreement") is entered into as of August 1,
2001, by and between National Scientific Corporation, a Texas Corporation (the
"Company"), and Dr. El-Badawy El-Sharawy (the "Consultant").

                                    RECITALS

1.   Consultant  has  expertise  in the area of the  Company's  business  and is
willing to provide consulting services to the Company.

2.   The Company is willing to engage  Consultant as an independent  contractor,
and not as an employee, on the terms and conditions set forth herein.

                                    AGREEMENT

In consideration of the foregoing and of the mutual promises set forth herein,
and intending to be legally bound, the parties hereto agree as follows:

     1.   ENGAGEMENT.

          a.   The  Company   hereby  engages   Consultant  to  render,   as  an
               independent  contractor,  the  consulting  services  described in
               Exhibit A hereto and such other  services  as may be agreed to in
               writing by the Company and Consultant from time to time.

          b.   Consultant  hereby accepts the  engagement to provide  consulting
               services  to the  Company on the terms and  conditions  set forth
               herein.

     2.   TERM.  This  Agreement  will commence on the date first written above,
          and unless  modified by the mutual  written  agreement of the parties,
          shall continue until the  satisfactory  completion of the services set
          forth in  Exhibit A, or for a period of two (2) years from the date of
          this  Agreement,  whichever  is shorter.  Company may  terminate  this
          Agreement upon 30 days written notice to Consultant.

     3.   COMPENSATION.

          a.   In  consideration  of the services to be performed by Consultant,
               the  Company  agrees to pay  Consultant  in the manner and at the
               rates set forth in Exhibit A.

          b.   Out of pocket expenses incurred by Consultant that are authorized
               in advance by the  Company's  Project  Manager  as  describe  din
               Exhibit A, and incurred and  documented  in  accordance  with the
               Company's  published  polices regarding  out-of-pocket  expenses,
               shall be reimbursed by Company to Consultant,  as further defined
               in Exhibit A.

     4.   CONSULTANT'S BUSINESS ACTIVITIES.

          a.   Consultant  shall devote such time,  attention  and energy to the
               business  and affairs of the Company as requested by the Company,
               and in any event no less than the average  amount of contact time
               specified in Exhibit A hereto.

                        NSC CONSULTING AGREEMENT: Page 1
<PAGE>

          b.   Consultant shall keep and  periodically  provide to the Company a
               log describing  the contract  hours by Consultant,  as defined in
               Exhibit A.

          c.   Consultant  shall  provide  first right of refusal to the Company
               for any Invention or proposal to create an Invention that relates
               directly to the work defined in Exhibit A.

          d.   Consultant  will be free to take any written  proposal  which the
               Consultant  has  presented  to the  Company  that the Company has
               rejected  or  otherwise  not acted  upon for a period of 6 months
               after date of receipt,  so long as this proposal does not contain
               information  that would be defined as Confidential to the Company
               prior to the  delivery of the  proposal.  "Acted" in this section
               only shall mean, "requested service related to the proposal,  and
               paid for such service."

     5.   CONFIDENTIAL INFORMATION AND ASSIGNMENTS. Consultant is simultaneously
          executing  a  Confidential   Information   and  Invention   Assignment
          Agreement for Consultants in the form of Exhibit B (the  "Confidential
          Information  and Invention  Assignment  Agreement").  The  obligations
          under the Confidential  Information and Invention Assignment Agreement
          shall  survive  termination  of this  Agreement  for any  reason for a
          period of 5 years.

     6.   INTERFERENCE WITH THE COMPANY'S BUSINESS.

          a.   Notwithstanding  any other  provision  of this  Agreement,  for a
               period  of  one  year  after   termination  of  this   Agreement,
               Consultant shall not employ, solicit for employment, or advise or
               recommend to any other  person that such other  person  employ or
               solicit for  employment,  any person  employed or under  contract
               (whether as a  consultant,  employee or  otherwise)  by or to the
               Company during the period of such person's  association  with the
               Company and one year thereafter.

          b.   Notwithstanding any other provision of this Agreement, and to the
               fullest  extent  permitted by law, for a period of one year after
               termination  of this  Agreement,  Consultant  shall not  directly
               solicit any clients or  customers  of the Company  without  first
               notifying  the Company in  writing.  The Company has the right to
               request  that the  Consultant  not pursue a given  project with a
               given  client or customers of the Company is such an action would
               he  directly  harmful  or  damaging  to  current  active  Company
               interests  with that client or customer.  The  Consultant may not
               unreasonably refuse this request,  and the Company shall not make
               such a request  unless the potential for damage to the Company is
               clear and significant.

     7.   REPRESENTATIONS AND WARRANTIES. Consultant represents and warrants (i)
          that  Consultant  has  no  known  obligations,   legal  or  otherwise,
          inconsistent  with the terms of this  Agreement  or with  Consultant's
          undertaking  this  relationship  with  the  Company,   (ii)  that  the
          performance  of the services  called for by this  Agreement do not and
          will not knowingly  violate any applicable  law, rule or regulation or
          any  proprietary  or  other  right  of any  third  party,  (iii)  that
          Consultant  will not use in the  performance  of his  responsibilities
          under this Agreement any confidential  information or trade secrets of
          any other  person or entity and (iv) that  Consultant  has not entered
          into or will enter into any agreement in conflict with this Agreement.

     8.   ATTORNEY'S  FEES.  Should either party hereto,  or any heir,  personal
          representative,  successor or assign of either party hereto, resort to
          litigation to enforce this Agreement,  the party or parties prevailing
          in such litigation shall be entitled, in addition to such other relief
          as may be granted, to recover its or their reasonable  attorneys' fees
          and costs in such  litigation  from the party or parties  against whom
          enforcement was sought.

     9.   ENTIRE AGREEMENT.  This Agreement,  contains the entire  understanding
          and agreement  between the parties  hereto with respect to its subject

                        NSC CONSULTING AGREEMENT: Page 2
<PAGE>

          matter and  supersedes  any prior or  contemporaneous  written or oral
          agreements,  representations or warranties between them respecting the
          subject matter hereof.

     10.  AMENDMENT.  This  Agreement may be amended only by a writing signed by
          Consultant and by a representative of the Company duly authorized.

     11.  SEVERABILITY.  If any term,  provision,  covenant or condition of this
          Agreement,  or  the  application  thereof  to  any  person,  place  or
          circumstance, shall be held by a court of competent jurisdiction to be
          invalid,  unenforceable  or void,  the remainder of this Agreement and
          such  term,  provision,  covenant  or  condition  as  applied to other
          persons,  places  and  circumstances  shall  remain in full  force and
          effect.

     12.  NONWAIVER.  No  failure  or  neglect  of  either  party  hereto in any
          instance to exercise any right, power or privilege  hereunder or under
          law shall  constitute a waiver of any other right,  power or privilege
          or of the same right,  power or privilege in any other  instance.  All
          waivers  by  either  party  hereto  must  be  contained  in a  written
          instrument  signed by the party to be charged  and, in the case of the
          Company,  by an executive  officer of the Company or other person duly
          authorized by the Company.

     13.  AGREEMENT TO PERFORM NECESSARY ACTS.  Consultant agrees to perform any
          further  acts  and  execute  and  deliver  any  documents  that may be
          reasonably necessary to carry out the provisions of this Agreement.

     14.  ASSIGNMENT.  This Agreement may not be assigned by Consultant  without
          the Company's prior written consent. This Agreement may be assigned by
          the  Company  in   connection   with  a  merger  or  sale  of  all  or
          substantially  all of its  assets,  and in  other  instances  with the
          Consultant's consent which consent shall not be unreasonably  withheld
          or delayed.

     15.  COMPLIANCE  WITH  LAW.  In  connection  with  his  services   rendered
          hereunder, Consultant agrees to abide by all federal, state, and local
          laws, ordinances and regulations.

     16.  INDEPENDENT  CONTRACTOR.  The relationship  between Consultant and the
          Company  is that of  independent  contractor  under a "work  for hire"
          arrangement.  All work product developed by Consultant shall be deemed
          owned and assigned to Company.  This  Agreement is not  authority  for
          Consultant to act for the Company as its agent or make commitments for
          the Company unless authorized  explicitly in writing by the Company to
          make such a specific  commitment.  Consultant will not be eligible for
          any employee benefits,  nor will the company make deductions from fees
          to the consultant for taxes, insurance,  bonds or the like. Consultant
          retains the  discretion in performing the tasks  assigned,  within the
          scope of work specified.

     17.  TAXES.  Consultant  agrees  to pay all  appropriate  local,  state and
          federal taxes.

     18.  GOVERNING LAW. This Agreement  shall be construed in accordance  with,
          and all actions  arising  hereunder  shall be governed by, the laws of
          the State of Arizona.

                        NSC CONSULTING AGREEMENT: Page 3
<PAGE>

Agreed to this date, 8/1/2001, in Phoenix, Arizona.

National Scientific Corporation            Dr. El-Badawy El-Sharawy

By:    /s/ Michael A. Grollman             By:    /s/ Dr. El-Badawy El-Sharawy
       ------------------------------             ------------------------------

Name:  Michael A. Grollman                 Name:  Dr. El-Badawy El-Sharawy
       ------------------------------             ------------------------------

Title: CEO                                 Title: Consultant
       ------------------------------             ------------------------------

                        NSC CONSULTING AGREEMENT: Page 4
<PAGE>

                                    Exhibit A

1.   DESCRIPTION OF SERVICES TO BE RENDERED

FIRST AREA: The  Consultant  shall provide  consulting  expertise in the area of
electronic  device  and  system  design,  manufacture,  and  testing,  including
resonators,  inductors,  transformers,  HBT's,  Distributed  Amplifiers,  memory
designs including TMOS SRAM cell design.  The deliverables for this area of work
will  vary on a  month-to-month  basis,  and will be  assigned  by a  designated
project manager from the Company.  This project manager will initially be Graham
Clark,  although the Company may change this  assignment at any time by giving 7
days notice.  Deliverables  requested will be produced in a timely way with good
quality,  and  include  but are  not  limited  to new  designs,  patent  support
materials,  diagrams,  test  results,  device  prototypes,  studies,  and direct
telephone or contact  consulting hours. In addition to other  deliverables,  the
Consultant will provide a monthly time report showing his activities, which upon
approval by the project manager will form the basis calculation of compensation.

SECOND AREA: The Company specifically requests support in securing a patent on a
mask device to be used in optimizing  projection  equipment.  This device is the
same device the parties  have had under  discussion  for a number of years.  The
deliverables for this effort are a completed patent application, and those other
documents  as may be required to support the  licensing  of this patent to third
parties.

2.   MONTHLY COMPENSATION

For the First Area listed above, the Company will pay a $125 per contact hour of
approved  and  documented  work.  The  Company  will pay each  month of  minimum
retainer  of $2000 per month in cash and  $1000 per month in Stock  Options  (as
defined below under "Stock  Compensation").  The Consultant will receive this no
less than this minimum  retainer  payment per month,  even if the Consultant has
not reported  sufficient  hours to generate that  retainer when  calculated on a
hourly  basis.  However,  the  Consultant  will only be paid the  retainer  upon
submission and approval of his time report each month for contact hours.

Although  the actual hours  worked by the  Consultant  are expected to vary from
month to month, the Company expects the Consultant on the average to deliver the
Minimum  Time To Be  Expended  as  defined  in (3)  below.  This  amount  may be
increased or decreased by the Company  based on as the  Consultant's  ability to
deliver  work or hours to the  Company,  or based on the  current  financial  or
business requirement of the Company.

For the Second Area listed above,  the Company will pay the an additional 10% of
net-of-company's-cost  license fees  generated  and collected by this patent for
the Company, up to a maximum payment of $2,000,000.

For purposes of this Agreement,  "net-of-company's-cost license fees" shall mean
the revenue derived by the Company from the sale of the technology product using
the IP,  less the cost of goods sold to have the  product  manufactured  (if the
Company manufactures it), and less the cost paid to other licensed holders whose
products  are used in the  manufacture  of the  product,  and less direct  costs
associated with achieving, supporting and maintaining the patent or intellectual
property,  including  associated  legal  costs and any  testing  or  development
expenses  associated  with  developing  and proving the  specific  invention  in
question.   Specifically  excluded  from  "net-of-company's-cost  license  fees"
calculation are such items as Company overhead, staff salaries, rent, utilities,
and other  general costs of operating the business that are not directly tied to
the commercial exploitation of a specific license.

                        NSC CONSULTING AGREEMENT: Page 5
<PAGE>

3.   MINIMUM TIME TO BE EXPENDED

The  Company  expects  an  average  3  contact  hours  per week of time from the
Consultant  during the academic year, 5 contact  average hours per week from the
Consultant  during the summer.  The Consultant  with also provide an unspecified
number of non-contact Consulting hours on an as-needed basis.

4. PAYMENT TERMS

Payment to the Consultant  will be net 7 business days or sooner from receipt by
the accounting department of an approved time report.

                        NSC CONSULTING AGREEMENT: Page 6
<PAGE>

5.   SPECIAL BONUS COMPENSATION

After the filing and upon the award and issue of any new  patents  for which the
Consultant has been the primary  inventor and which have been filed according to
the Company's standard approved  procedures for filing,  other than for the Mask
Patent  whose  compensation  is described  separately  under  Compensation,  the
Company will pay the  Consultant  a bonus based on the mutually  agreed value of
the patent to the Company.  This value  agreement  will fall into the  following
categories:

<TABLE>
<CAPTION>
------------------------ ---------------------- --------------------- ---------------------- ----------------------
                         Class A                Class B               Class C                Class D
------------------------ ---------------------- --------------------- ---------------------- ----------------------
<S>                      <C>                    <C>                   <C>                    <C>
Description              This patent is         This patent is        This patent is         This patent is
                         expected to have       expected to have      expected to have       expected to have
                         major and dramatic     significant effects   significant effects    some effects on the
                         effects on the         on the technology     on the technology      technology
                         technology             marketplace, and to   marketplace, and to    marketplace, and to
                         marketplace, and to    generate revenues     generate revenues to   generate revenues to
                         generate revenues to   to the Company in     the Company in its     the Company in its
                         the Company in its     its first 5 years     first 5 years from     first 5 years from
                         first 5 years from     from date of issue    date of issue of       date of issue of
                         date of issue of       of more than          more than $10,000,000  more than $2,000,000
                         more than              $25,000,000
                         $100,000,000
------------------------ ---------------------- --------------------- ---------------------- ----------------------

Cash Portion of Bonus    $50,000                $25,000               $5,000                 $1000
------------------------ ---------------------- --------------------- ---------------------- ----------------------

Stock Option             $200,000               $100,000              $50,000                $10,000
Portion of Bonus
------------------------ ---------------------- --------------------- ---------------------- ----------------------

% of company's           8%                     4%                    1%                     0%
net-of-cost license
fees generated and
collected by this
patent for the Company
------------------------ ---------------------- --------------------- ---------------------- ----------------------
</TABLE>

In no case  will  be  total  special  bonus  paid  for  any  one  patent  exceed
$5,000,000.  In the event that the Company and the Consultant  cannot reasonably
agree on the Class of a given patent,  the Company's estimate will be used until
the actual market impact and revenues can be measured over an extended period of
time, at which point the Consultant  may request a change in bonus Class,  which
the Company  shall not  unreasonably  withhold.  If a patent is awarded which is
less in impact and revenue than the Class D above, no bonus will be paid.

6.   STOCK COMPENSATION

For  purposes  of this  agreement,  for  Compensation  to be  provided  in Stock
Options,  the Company will take the average  closing  price of NSCT common stock
for the last 5 trading days before the end of a period,  and this will be called
the current  share price of NSC stock.  The Company will issue stock  options at
75% of the value of this figure, with a one-year vesting period, which starts on
the date of issue.  In order to  compute  the number of options to be granted at
this discount,  the "Stock Option Dollars" shown in the table will be multiplied
by 4. By way of  example  of not of  limitation,  to pay  $1000 in stock  option
compensation  if the NSCT  share  price is $1.00,  the  Company  will issue 4000
options at $0.75 each.

Although stock option compensation will be earned monthly, all options contracts
will be issued calculated  quarterly for value accumulated during the previous 3
months, and will begin their vesting period on that date.

                        NSC CONSULTING AGREEMENT: Page 7
<PAGE>

7.   TRAVEL EXPENSES

When  Consultant  is  requested  in  writing  to travel  exclusively  on Company
business,  the Consultant will be reimbursed for his reasonable  travel expenses
as per the then-current Standard Company Expense Reimbursement Policy, a copy of
which is  maintained  on the  Company's  primary  internal  web  server for easy
reference.  Any hours spent  traveling  shall be billed to the Company at 1/2 of
the normal hourly rate.  When the  Consultant is traveling for any purpose other
than on exclusive Company business,  no reimbursement  will normally be provided
for any travel  expenses or travel  time.  Exceptions  to this require a written
approval by the project manager,  and approved in writing by the CFO of National
Scientific.

                        NSC CONSULTING AGREEMENT: Page 8
<PAGE>

                                    Exhibit B

CONFIDENTIAL INFORMATION AND INVENTION ASSIGNMENT AGREEMENT FOR CONSULTANT

This   CONFIDENTIAL   INFORMATION  AND  INVENTION   ASSIGNMENT   AGREEMENT  (the
"Agreement")  is  made  between  National   Scientific   Corporation,   a  Texas
Corporation (the "Company") and the undersigned consultant.

In consideration of my relationship with the Company (which for purposes of this
Agreement  shall be deemed to include  any  subsidiaries  or  Affiliates  of the
Company),  the receipt of  confidential  information  while  associated with the
Company,  and  other  good  and  valuable  consideration,   I,  the  undersigned
individual, agree that:

1.   TERM OF AGREEMENT.  This Agreement  shall continue in full force and effect
for the  duration  of my  relationship  with  the  Company  and  shall  continue
thereafter until terminated through a written instrument signed by both parties.

2.   CONFIDENTIALITY.

(a)  DEFINITIONS.  "Proprietary  Information"  is all  information  and any idea
whatever form, tangible or intangible,  pertaining in any manner to the business
of  the  Company,  or  any  of  its  Affiliates,  or  its  employees,   clients,
consultants,  or business  associates,  which was  produced  by any  employee or
consultant  of the Company in the course of his or her  employment or consulting
relationship  or otherwise  produced or acquired by or on behalf of the Company.
All  Proprietary  Information  not  generally  known  outside  of the  Company's
organization, shall be deemed "Confidential Information." By example and without
limiting the foregoing  definition,  Proprietary  and  Confidential  Information
shall include, but not be limited to:

(1) formulas,  research and development  techniques,  processes,  trade secrets,
computer  programs,   software,   electronic  codes,  mask  works,   inventions,
innovations,  patents,  patent applications,  discoveries,  improvements,  data,
know-how, formats, test results, and research projects;

(2) information about costs,  profits,  markets,  sales,  contracts and lists of
customers, and distributors;

(3) business, marketing, and strategic plans;

(4) forecasts,  unpublished financial  information,  budgets,  projections,  and
customer identities, characteristics and agreements; and

(5) employee personnel files and compensation information.

Confidential  Information is to be broadly defined, and includes all information
that has or could have  commercial  value or other  utility in the  business  in
which the Company is engaged or  contemplates  engaging,  and all information of
which the  unauthorized  disclosure could be detrimental to the interests of the
Company,   whether  or  not  such  information  is  identified  as  Confidential
Information by the Company.

(b) EXISTENCE OF  CONFIDENTIAL  INFORMATION.  The Company owns and has developed
and compiled, and will develop and compile,  certain trade secrets,  proprietary
techniques  and other  Confidential  Information  which have great  value to its

                        NSC CONSULTING AGREEMENT: Page 9
<PAGE>

business. This Confidential  Information includes not only information disclosed
by the Company to me, but also information developed or learned by me during the
course of my relationship with the Company.

(c)  PROTECTION OF  CONFIDENTIAL  INFORMATION.  I will not use, make  available,
sell,  disclose or otherwise  communicate  to any third party,  other than in my
assigned  duties  and for  the  benefit  of the  Company,  any of the  Company's
Confidential  Information,  either  during  or  after my  relationship  with the
Company. In the event I desire to publish the results of my work for the Company
through literature or speeches, I will submit such literature or speeches to the
President  of the  Company  at  least  10  days  before  dissemination  of  such
information  for a  determination  of whether  such  disclosure  may alter trade
secret  status,  may be  prejudicial  to the  interests of the  Company,  or may
constitute  an invasion  of its  privacy.  I agree not to  publish,  disclose or
otherwise  disseminate  such  information  without prior written approval of the
President of the Company.  I acknowledge  that I am aware that the  unauthorized
disclosure of Confidential  Information of the Company may be highly prejudicial
to its interests,  an invasion of privacy,  and an improper  disclosure of trade
secrets.

(d) DELIVERY OF CONFIDENTIAL  INFORMATION.  Upon request or when my relationship
with the  Company  terminates,  I will  immediately  deliver to the  Company all
copies of any and all  materials  and writings  received  from,  created for, or
belonging to the Company including, but not limited to, those which relate to or
contain Confidential Information.

(e)  LOCATION  AND  REPRODUCTION.  I shall  maintain at my  workplace  only such
Confidential  Information  as I have a current "need to know." I shall return to
the appropriate person or location or otherwise properly dispose of Confidential
Information  once that need to know no longer exists. I shall not make copies of
or otherwise  reproduce  Confidential  Information  unless there is a legitimate
business need of the Company for reproduction.

(f) PRIOR ACTIONS AND  KNOWLEDGE.  I represent and warrant that from the time of
my first contact with the Company I held in strict  confidence all  Confidential
Information  and have not disclosed any  Confidential  Information,  directly or
indirectly,  to anyone  outside the  Company,  or used,  copied,  published,  or
summarized  any  Confidential  information,   except  to  the  extent  otherwise
permitted in this Agreement.

(g) THIRD-PARTY INFORMATION.  I acknowledge that the Company has received and in
the future  will  receive  from third  parties  their  confidential  information
subject to a duty on the Company's part to maintain the  confidentiality of such
information and to use it only for certain limited purposes. I agree that I will
at all times hold all such confidential  information in the strictest confidence
and not to disclose or use it,  except as  necessary  to perform my  obligations
hereunder and as is  consistent  with the  Company's  agreement  with such third
parties.

(h) THIRD PARTIES.  I represent that my  relationship  with the Company does not
and will not breach any  agreements  with or duties to a former  employer or any
other third  party.  I will not disclose to the Company or use on its behalf any
confidential  information  belonging  to others  and I will not  bring  onto the
premises of the Company any confidential information belonging to any such party
unless consented to in writing by such party.

(i)  Consultant  will be free to take any written  proposal which the Consultant
has  presented to the Company  that the Company has  rejected or  otherwise  not
acted  upon for a period  of 6 months  after  date of  receipt,  so long as this
proposal does not contain  information  that would be defined as Confidential to
the Company prior to the delivery of the proposal.  "Acted" in this section only
shall  mean,  "requested  service  related  to the  proposal,  and paid for such
service."

3.   PROPRIETARY RIGHTS, INVENTIONS AND NEW IDEAS.

(a)  DEFINITION.  The term "Subject  Ideas or  Inventions"  includes any and all
ideas, processes,  trademarks, service marks, inventions, designs, technologies,
computer  hardware  or  software,   original  works  of  authorship,   formulas,
discoveries,  patents,  copyrights,  copyrightable works products, marketing and
business ideas, and all improvements, know-how, data, rights, and claims related

                        NSC CONSULTING AGREEMENT: Page 10
<PAGE>

to the foregoing that, whether or not patentable, which are conceived, developed
or created which;  (1) relate  directly to the Company's  program of research or
development  as defined in Exhibit A; (2) result from any work  performed  by me
for the  Company;  (3) involve  the use of the  Company's  equipment,  supplies,
facilities or trade  secrets;  (4) result from or are suggested by any work done
by the  Company  or at the  Company's  request,  or  any  projects  specifically
assigned to me; or (5) result from my access to any of the Company's  memoranda,
notes,  records,  drawings,  sketches,  models,  maps, customer lists,  research
results, data, formulae,  specifications,  inventions,  processes,  equipment or
other materials (collectively, "Company Materials").

(b) COMPANY OWNERSHIP. All right, title and interest in and to all Subject Ideas
and  Inventions,  including but not limited to all registrable and patent rights
which may subsist  therein,  shall be held and owned solely by the Company,  and
where  applicable,  all Subject Ideas and Inventions  shall be considered  works
made for hire. I shall mark all Subject Ideas and Inventions  with the Company's
copyright or other proprietary  notice as directed by the Company and shall take
all actions  deemed  necessary  by the Company to protect the  Company's  rights
therein.  In the event that the Subject Ideas and Inventions shall be deemed not
to constitute works made for hire, or in the event that I should  otherwise,  by
operation  of law,  be deemed to retain  any  rights  (whether  moral  rights or
otherwise)  to any  Subject  Ideas  and  Inventions,  I agree to  assign  to the
Company,  without further consideration,  my entire right, title and interest in
and to each and every such Subject Idea and Invention.

(c) DISCLOSURE.  I agree to disclose promptly to the Company full details of any
and all Subject Ideas and Inventions.

(d)  MAINTENANCE OF RECORDS.  I agree to keep and maintain  adequate and current
written records of all Subject Ideas and Inventions and their  development  made
by me (solely or jointly with others)  during the term of my  relationship  with
the Company. These records will be in the form of notes, sketches, drawings, and
any other format that may be specified  by the  Company.  These  records will be
available to and remain the sole property of the Company at all times.

(e)  DETERMINATION  OF SUBJECT  IDEAS AND  INVENTIONS.  I further agree that all
information  and records  pertaining to any idea,  process,  trademark,  service
mark,  invention,  technology,  computer hardware or software,  original work of
authorship,  design, formula,  discovery,  patent,  copyright,  product, and all
improvements,   know-how,   rights,   and  claims   related  to  the   foregoing
("Intellectual  Property"),  that I do  not  believe  to be a  Subject  Idea  or
Invention,  but that is  conceived,  developed,  or reduced to  practice  by the
Company (alone by me or with others) during my relationship with the Company and
for one (1) year thereafter,  shall be disclosed  promptly by me to the Company.
The  Company  shall  examine  such  information  to  determine  if in  fact  the
Intellectual Property is a Subject Idea or Invention subject to this Agreement.

(f) ACCESS.  Because of the difficulty of establishing when any Subject Ideas or
Inventions  are first  conceived  by me, or whether it results from my access to
Confidential Information or Company Materials, I agree that any Subject Idea and
Invention shall, among other  circumstances,  be deemed to have resulted from my
access to Company Materials if: (1) it grew out of or resulted from my work with
the  Company or is related to the  business of the Company as defined in Exhibit
A, and (2) it is made,  used,  sold,  exploited  or reduced to  practice,  or an
application for patent, trademark,  copyright or other proprietary protection is
filed  thereon,  by me or  with  my  significant  aid,  within  one  year  after
termination of my relationship with the Company.

(g)  ASSISTANCE.  I further agree to assist the Company in every proper way (but
at the  Company's  expense)  to obtain  and from time to time  enforce  patents,
copyrights or other rights or registrations on said Subject Ideas and Inventions
in any and all countries, and to that end will execute all documents necessary:

(1) to apply for,  obtain and vest in the name of the Company  alone (unless the
Company  otherwise  directs)  letters  patent,  copyrights  or  other  analogous
protection in any country throughout the world and when so obtained or vested to
renew and restore the same; and

(2) to defend any opposition proceedings in respect of such applications and any
opposition  proceedings  or petitions or  applications  for  revocation  of such
letters patent, copyright or other analogous protection; and

                        NSC CONSULTING AGREEMENT: Page 11
<PAGE>

(3) to  cooperate  with  the  Company  (but  at the  Company's  expense)  in any
enforcement  or  infringement  proceeding on such letters  patent,  copyright or
other analogous protection.

(h)  AUTHORIZATION  TO  COMPANY.  In the  event the  Company  is  unable,  after
reasonable  effort,  to secure my  signature  on any patent,  copyright or other
analogous  protection relating to a Subject Idea and Invention,  whether because
of my physical or mental incapacity or for any other reason whatsoever, I hereby
irrevocably  designate and appoint the Company and its duly authorized  officers
and  agents as my agent and  attorney-in-fact,  to act for and on my behalf  and
stead to execute and file any such application,  applications or other documents
and  to do all  other  lawfully  permitted  acts  to  further  the  prosecution,
issuance, and enforcement of letters patent, copyright or other analogous rights
or  protections  thereon  with the same legal force and effect as if executed by
me. My obligation  to assist the Company in obtaining and enforcing  patents and
copyrights  for Subject  Ideas and  Inventions  in any and all  countries  shall
continue  beyond the termination of my  relationship  with the Company,  but the
Company shall compensate me at a reasonable rate after such termination for time
actually spent by me at the Company's request on such assistance.

(i)  ACKNOWLEDGEMENT.  I acknowledge that there are no currently existing ideas,
processes, inventions,  discoveries, marketing or business ideas or improvements
for the subject area of this Agreement as defined in Exhibit A which I desire to
exclude from the operation of this Agreement. To the best of my knowledge, there
is no other  contract  to  assign  inventions,  trademarks,  copyrights,  ideas,
processes,  discoveries or other intellectual  property that is now in existence
between me and any other person (including any business or governmental entity).

(j) NO USE OF NAME.  I shall not at any time use the  Company's  name or any the
Company  trademark(s) or trade name(s) in any  advertising or publicity  without
the prior written consent of the Company.

4.   COMPETITIVE ACTIVITY.

(a) ACKNOWLEDGMENT.  I acknowledge that the pursuit of the activities  forbidden
by  Section  4(b)  below  would  necessarily  involve  the  use,  disclosure  or
misappropriation of Confidential Information.

(b)   PROHIBITED   ACTIVITY.   To  prevent   the   above-described   disclosure,
misappropriation  and  breach,  I agree that  during my  relationship  and for a
period  of one (1)  year  thereafter,  without  the  Company's  express  written
consent,  I  shall  not,  directly  or  indirectly,   (i)  employ,  solicit  for
employment,  or recommend for employment any person  employed by the Company (or
any Affiliate); and (ii) engage in any present or contemplated business activity
that is or may be  competitive  with the Company (or any Affiliate) in any state
where the  Company  conducts  its  business,  unless I can prove that any action
taken in  contravention  of this subsection (ii) was done without the use in any
way of Confidential Information.

5.  REPRESENTATIONS  AND WARRANTIES.  I represent and warrant (i) that I have no
obligations,  legal or otherwise,  inconsistent with the terms of this Agreement
or  with  my  undertaking  a  relationship  with  the  Company;  (ii)  that  the
performance  of the  services  called for by this  Agreement do not and will not
violate any applicable law, rule or regulation or any proprietary or other right
of any  third  party;  (iii)  that  I will  not  use  in the  performance  of my
responsibilities  for the Company any confidential  information or trade secrets
of any other  person or entity;  and (iv) that I have not  entered  into or will
enter  into any  agreement  (whether  oral or  written)  in  conflict  with this
Agreement.

6.   TERMINATION OBLIGATIONS.

(a) Upon the  termination of my  relationship  with the Company or promptly upon
the Company's request, I shall surrender to the Company all equipment,  tangible
Proprietary Information,  documents, books, notebooks,  records, reports, notes,
memoranda,  drawings,  sketches, models, maps, contracts,  lists, computer disks
(and other computer-generated files and data), any other data and records of any
kind,  and copies  thereof  (collectively,  "Company  Records"),  created on any
medium and furnished to,  obtained by, or prepared by myself in the course of or
incident to my relationship with the Company, that are in my possession or under
my control.

                        NSC CONSULTING AGREEMENT: Page 12
<PAGE>

(b) My representations,  warranties, and obligations contained in this Agreement
shall survive the termination of my relationship with the Company.

(c) Following any termination of my relationship with the Company,  I will fully
cooperate with the Company in all matters relating to my continuing  obligations
under this Agreement.

(d) I hereby grant  consent to  notification  by the Company to any of my future
employers or companies I consult with about my rights and obligations under this
Agreement.

(e) Upon  termination  of my  relationship  with the  Company,  I will execute a
Certificate  acknowledging compliance with this Agreement in the form reasonably
requested by the Company.

8.   MODIFICATION.  No modification of this Agreement shall be valid unless made
in writing and signed by both parties.

9.   BINDING  EFFECT.  This  Agreement  shall  be  binding  upon me,  my  heirs,
executors,  assigns and administrators and is for the benefit of the Company and
its successors and assigns.

10.  GOVERNING  LAW. This Agreement  shall be construed in accordance  with, and
all actions  arising under or in connection  therewith shall be governed by, the
internal  laws of the State of Arizona  (without  reference  to  conflict of law
principles).

11.  INTEGRATION.  This  Agreement  sets forth the  parties'  mutual  rights and
obligations with respect to proprietary information, prohibited competition, and
intellectual  property. It is intended to be the final,  complete, and exclusive
statement of the terms of the parties' agreements regarding these subjects. This
Agreement  supersedes  all  other  prior  and  contemporaneous   agreements  and
statements on these subjects,  and it may not be contradicted by evidence of any
prior or  contemporaneous  statements  or  agreements.  To the  extent  that the
practices,  policies,  or procedures of the Company, now or in the future, apply
to myself and are inconsistent with the terms of this Agreement,  the provisions
of this Agreement shall control unless changed in writing by the Company.

12.  ENTIRE AGREEMENT.  This  Agreement  contains the entire  understanding  and
agreement  between the parties  hereto  with  respect to its subject  matter and
supersedes   any  prior  or   contemporaneous   written   or  oral   agreements,
representations or warranties between them respecting the subject matter hereof.

13.  CONSTRUCTION.  This Agreement  shall be construed as a whole,  according to
its fair  meaning,  and not in favor of or against any party.  By way of example
and not  limitation,  this  Agreement  shall not be construed  against the party
responsible for any language in this  Agreement.  The headings of the paragraphs
hereof are inserted for  convenience  only,  and do not  constitute  part of and
shall not be used to interpret this Agreement.

14.  SEVERABILITY.  If any  term,  provision,  covenant  or  condition  of  this
Agreement,  or the  application  thereof to any person,  place or  circumstance,
shall be held to be  invalid,  unenforceable  or  void,  the  remainder  of this
Agreement  and such term,  provision,  covenant or condition as applied to other
persons, places and circumstances shall remain in full force and effect.

15.  NONWAIVER.  The failure of either the Company or me, whether  purposeful or
otherwise,  to exercise in any instance any right, power or privilege under this
Agreement or under law shall not  constitute a waiver of any other right,  power
or privilege,  nor of the same right,  power or privilege in any other instance.
Any  waiver by the  Company  or by me must be in  writing  and  signed by either
myself, if I am seeking to waive any of my rights under this Agreement, or by an
officer of the Company  (other than me) or some other person duly  authorized by
the Company.

16.  NOTICES. Any notice, request,  consent or approval required or permitted to
be given under this Agreement or pursuant to law shall be sufficient if it is in

                        NSC CONSULTING AGREEMENT: Page 13
<PAGE>

writing,  and if and when it is hand  delivered  or sent by regular  mail,  with
postage prepaid, to my residence (as noted in the Company's records),  or to the
Company's principal office, as the case may be.

17.  AGREEMENT  TO PERFORM  NECESSARY  ACTS. I agree to perform any further acts
and execute and deliver any documents that may be reasonably  necessary to carry
out the provisions of this Agreement.

18.  ASSIGNMENT.  This Agreement may not be assigned without the Company's prior
written consent.

19.  COMPLIANCE  WITH LAW. In connection with his services  rendered  hereunder,
Consultant agrees to abide by all federal, state, and local laws, ordinances and
regulations.

Agreed to this date, August 1, 2001, in Phoenix, Arizona,

National Scientific Corporation            Dr. El-Badawy El-Sharawy

By:    /s/ Michael A. Grollman             By:    /s/ Dr. El-Badawy El-Sharawy
       ------------------------------             ------------------------------

Name:  Michael A. Grollman                 Name:  Dr. El-Badawy El-Sharawy
       ------------------------------             ------------------------------

Title: CEO                                 Title: Consultant
       ------------------------------             ------------------------------

                        NSC CONSULTING AGREEMENT: Page 14
<PAGE>

                                    Exhibit C

 LIST OF COMPANIES THAT THE CONSULTANT HAS NOTIFIED THE COMPANY IN WRITING THAT
    HE PLANS TO PURSUE FOR BUSINESS DISTINCT AND SEPARATE FROM THE COMPANY'S
                                    BUSINESS

Motorola - modeling

Transtec - materials

Protek - measurements & filters

Northup Grumman - ferrite work

AIM Atomic Technologies - nuclear waste management

AIM Aerospace - engines

AIM Super Lattice - materials

Intel - packaging

Conexant - packaging

                        NSC CONSULTING AGREEMENT: Page 15
<PAGE>

                      NSC CONSULTING AGREEMENT CHANGE ORDER

This Consulting  Agreement  Change Order ("Change  Order") is entered into as of
August  1,  2002,  by and  between  National  Scientific  Corporation,  a  Texas
Corporation (the "Company"),  and Dr. El-Badawy  El-Sharawy (the  "Consultant").
This Change Order  modifies the Agreement  between  these same parties  entitled
"NSC Consulting Agreement" dated August 1, 2001.

The  parties  intend to leave all  elements of the  previous  contract in force,
except as follows:

CHANGE AREA #1: MINIMUM HOURS / MONTH REMOVED FROM AGREEMENT

Replace  the  first  two  paragraphs  under  "Compensation"   entitled  "Monthly
Compensation  with 1 paragraph shown below,  and to strike the section  entitled
"Minimum Time to be Expended" from that same section "Compensation."

     MONTHLY COMPENSATION

     FOR THE FIRST AREA LISTED  ABOVE,  THE COMPANY  WILL PAY A $125 PER CONTACT
     HOUR OF  APPROVED  AND  DOCUMENTED  WORK.  THE  COMPANY  WILL BE FOR  THESE
     SERVICES  USING 50% CASH AND 50% STOCK  OPTIONS  (AS  DEFINED  BELOW  UNDER
     "STOCK  COMPENSATION").  THE CONSULTANT WILL NOT RECEIVE A MINIMUM RETAINER
     PER MONTH,  AND MUST BE  PRE-APPROVED  IN  WRITING  TO WORK HOURS  PRIOR TO
     WORKING ANY HOURS.  THE CONSULTANT  WILL ONLY BE PAID FOR DOCUMENTED  HOURS
     WORKED,  AND ONLY THEN UPON SUBMISSION AND APPROVAL OF HIS TIME REPORT EACH
     MONTH.

CHANGE AREA #2:  BACKPAY COMPENSATION FOR 2002

The parties are that the  Consultant  was paid in full as per this Agreement for
services  rendered  through  December 2001. The parties also agree that payments
from January  20002 to July 2002 were not made in  accordance  with the original
Agreement.  In exchange for a full release of obligation from the Consultant for
any missing  payments  under this  Agreement  from it origin up to and including
July 2002, NSC will pay the Consultant  150,000 options in NSC common stock at a
strike price of 7 cents each.

Agreed to this date, 8/1/2002, in Scottsdale, Arizona,

National Scientific Corporation            Dr. El-Badawy El-Sharawy

By:    /s/ Michael A. Grollman             By:    /s/ Dr. El-Badawy El-Sharawy
       ------------------------------             ------------------------------

Name:  Michael A. Grollman                 Name:  Dr. El-Badawy El-Sharawy
       ------------------------------             ------------------------------

Title: President                           Title: Consultant
       ------------------------------             ------------------------------

                        NSC CONSULTING AGREEMENT: Page 16
<PAGE>

                            NSC CONSULTING AGREEMENT

                            AMENDMENT: July 31, 2003

This is an amendment ("Amendment") to the Consulting Agreement (the "Agreement")
entered  into  as  of  August  1,  2001,  by  and  between  National  Scientific
Corporation, a Texas Corporation (the "Company") with offices at 14455 N. Hayden
Rd  Ste  202,   Scottsdale,   AZ,  85260,  and  Dr.  El-Badawy  El-Sharawy  (the
"Consultant") located at 15832 S. 22nd St., Phoenix, AZ. 85048. The terms of the
Agreement,  including the change order dated 8/1/2002 previously accepted by the
parties, are incorporated into the Amendment by reference.

                                      TERMS

By mutual agreement of the parties today,  Section 2 of the original  Agreement,
Term,  is herby  modified so that the  Agreement  will  continue in force for an
additional  period of time. The revised  termination date of the Agreement shall
now be December 31, 2005.

Agreed to this date, 7/31/2003, in Scottsdale, Arizona,

National Scientific Corporation            Dr. El-Badawy El-Sharawy

By:    /s/ Michael A. Grollman             By:    /s/ Dr. El-Badawy El-Sharawy
       ------------------------------             ------------------------------

Name:  Michael A. Grollman                 Name:  Dr. El-Badawy El-Sharawy
       ------------------------------             ------------------------------

Title: CEO
       ------------------------------

                        NSC CONSULTING AGREEMENT: Page 17

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