                                                                    Exhibit 10.3
                                                                    ------------

                             PHASE III MEDICAL, INC.
                             330 South Service Road
                                    Suite 120
                            Melville, New York 11747
                                  631 574.4955

September 13, 2004

Mr. Robert Aholt, Jr.
20128 Cavern Court
Saugus, California 91390


Dear Mr. Aholt:

     We are pleased to extend to you an invitation to become the Chief Operating
Officer ("COO") of Phase III Medical, Inc. (the "Company").

     As you know, the Company is a public company that, among other things,
provides capital and guidance to companies, within the medical sector, in
exchange for revenues, royalties and other contractual rights known as "royalty
interests," that entitle it to receive a portion of revenue from the sale of
pharmaceuticals, medical devices and biotechnology products. As COO, you will be
responsible for assisting the Company in reviewing and evaluating business,
scientific and medical opportunities, and for other discussions and meetings
that may arise during the normal course of the Company conducting its business.

     This Letter Agreement shall be effective as of September 13, 2004 (the
"Commencement Date") and shall continue for a period of three (3) years from the
Commencement Date (the "Term"). For all services rendered by you in any capacity
required hereunder during the Term, you shall be entitled to a monthly salary of
$4,000 during the first year of the Term, $5,000 during the second year of the
Term, and $6,000 during the third year of the Term, payable within normal
payroll practices of the Company, provided that all conditions to payment
specified herein have been met.

     In further consideration for your services hereunder, on January 1, 2005
and on the first day of each calendar quarter thereafter during the Term, the
Company shall grant you a number of shares of common stock, $0.001 par value per
share, of the Company ("Common Stock"), with a "Dollar Value" of $26,750.00,
$27,625.00 and $28,887.50, respectively, during the first, second and third
years of the Term. The per share price (the "Price") of each share granted to
determine the Dollar Value shall be the average closing price of one share of
Common Stock on the National Association of Securities Dealers, Inc.
Over-the-Counter Bulletin Board (the "Bulletin Board") (or other similar
exchange or association on which the Common Stock is then listed or quoted) for
the five (5) consecutive trading days immediately preceding the date of grant of
such shares; provided, however, that if the Common Stock is not then quoted on
the Bulletin Board or otherwise listed or quoted on an exchange or association,
the Price shall be the fair market value of one share of Common Stock as of the
date of grant as determined in good faith by the Board of Directors of the
Company. The number of shares of Common Stock for each quarterly grant shall be
equal to the quotient of the Dollar Value divided by the Price. The shares
granted will be subject to a one year lockup as of the date of each grant.

<PAGE>

     At the end of each year, the parties will discuss variations in the cash
and stock proportions of your compensation. In the absence of an alternative
mutual agreement, the foregoing shall apply.

     Your employment with the Company shall automatically terminate upon your
death or Disability (as defined below). The Company may terminate your
employment prior to the end of the Term with or without Cause (as defined below)
immediately upon written notice to you. You may terminate your employment upon
thirty (30) days' prior written notice to the Company. For purposes of this
Letter Agreement, the terms set forth below shall have the meanings ascribed to
them below:

     "Cause" shall mean (i) willful malfeasance or willful misconduct by you in
      connection with your employment; (ii) your gross negligence in
      performing any of your duties under this Letter Agreement; (iii) your
      conviction of, or entry of a plea of guilty to, or entry of a plea of
      nolo contendre with respect to, any crime other than a traffic
      violation or infraction which is a misdemeanor; (iv) your material
      breach of any written policy applicable to all employees adopted by
      the Company that is not cured to the reasonable satisfaction of the
      Company within fifteen (15) business days after notice thereof; or (v)
      material breach by you of any of your agreements in this Letter
      Agreement which is not cured to the reasonable satisfaction of the
      Company within fifteen (15) business days after notice thereof.

     "Disability" shall mean your inability to perform an essential function of
      your duties and responsibilities to the Company by reason of a
      physical or mental disability or infirmity, which inability has
      continued for a period of more than six (6) consecutive months, or for
      a period aggregating more than six (6) months, whether or not
      continuous, during any nine (9) month period. The existence of a
      Disability shall be determined by the Company in its absolute
      discretion.

     "Good Reason" shall mean (i) the Company's reassignment of your base of
      operations outside of Los Angeles, California without your consent,
      (ii) the material reduction by the Company of your duties during the
      Term, (iii) the Company's material breach of the Company's obligations
      under this Letter Agreement, or (iv) the Company not retaining you as
      COO.

<PAGE>

     In the event your employment is terminated prior to the end of the Term due
to your death or Disability, by the Company with or without Cause or upon your
resignation from your position as COO for Good Reason, earned but unpaid cash
compensation and unreimbursed expenses due as of the date of such termination
(the "Employment Termination Date") shall be payable in full. In addition, in
the event your employment is terminated prior to the end of the Term for any of
the reasons identified in the preceding sentence other than by the Company with
Cause, you or your executor of your last will or the duly authorized
administrator of your estate, as applicable, will be entitled (i) to receive
severance payments equal to one year's salary, paid at the same level and timing
of salary as you are then currently receiving and (ii) to receive, during the
one (1) year period following the Employment Termination (the "Severance
Period"), the stock grants that you would have been entitled to receive had your
employment not been terminated prior to the end of the Term; provided, however,
that in the event such termination is by the Company without Cause or is upon
your resignation for Good Reason, such severance payment and grant shall be
subject to your execution and delivery to the Company of a release of all claims
against the Company. No other payments shall be made, nor benefits provided, by
the Company in connection with the termination of employment prior to the end of
the Term, except as otherwise required by law.

     The Company shall pay or reimburse you for all reasonable travel or other
expenses (including, without limitation, digital subscriber line (DSL), car (at
$750 per month), cell phone and insurance expenses) incurred by you in
connection with the performance of your duties and obligations under this Letter
Agreement, subject to your presentation of appropriate vouchers in accordance
with such procedures as the Company may from time to time establish (including
any procedures established to preserve any deductions for Federal income
taxation purposes to which the Company may be entitled). I will also pay the
executive search firm that you engaged up to $5,000 of the amounts that you owe
to such firm.

     All payments provided for under this Letter Agreement shall be paid in cash
from the general funds of the Company. The Company shall not be required to
establish a special or separate fund or other segregation of assets to assure
such payments, and, if the Company shall make any investments to aid it in
meeting its obligations hereunder, you shall have no right, title or interest
whatever in or to any such investments except as may otherwise be expressly
provided in a separate written instrument relating to such investments.

     You acknowledge that, as COO, you will have access to the Company's
confidential information and that all confidential information shall be and
remain the sole property of the Company and that you will not at any time, now
or in the future, disclose, disseminate or otherwise make public any of the
confidential information without the express written permission of the Company.

     You acknowledge and agree that your services pursuant to this Letter
Agreement are unique and extraordinary; that the Company will be dependent upon
you for development, financial, marketing and other expertise; and that you will
have access to and control of confidential information of the Company. You
further acknowledge that the business of the Company is international in scope
and cannot be confined to any particular geographic area. You further
acknowledge that the scope and duration of the restrictions set forth in this
paragraph are reasonable in light of the specific nature and duration of the
transactions contemplated by this Letter Agreement. For the foregoing reasons
and to induce the Company to enter this Letter Agreement, you covenant and agree
that during the Term and the period beginning at the end of the Term and ending
one (1) year after the end of the Term, you shall not unless with written
consent of the Company:

<PAGE>

          (i)  engage in any business directly related to the business of
               providing capital and guidance to companies, within the medical
               pharmaceutical and biotechnology sector, or in any other business
               conducted by the Company during the Term (collectively, the
               "Prohibited Activity") in the world for your own account;

          (ii) become interested in any individual, corporation, partnership or
               other business entity (a "Person") engaged in any Prohibited
               Activity in the world, directly or indirectly, as an individual,
               partner, shareholder, officer, director, principal, agent,
               employee, trustee, consultant or in any other relationship or
               capacity; provided, however, that you may own directly or
               indirectly, solely as an investment, securities of any Person
               which are traded on any national securities exchange if you (x)
               are not a controlling person of, or a member of a group which
               controls, such person or (y) do not, directly or indirectly, own
               5% or more of any class of securities of such person; or

          (iii) directly or indirectly hire, employ or retain any person who at
               any time during the last twelve (12) months of the Term was an
               employee of the Company or directly or indirectly solicit,
               entice, induce or encourage any such person to become employed by
               any other person.

     You hereby acknowledge that the covenants and agreements contained in the
immediately preceding paragraph are reasonable and valid in all respects and
that the Company is entering into this Letter Agreement on such acknowledgment.
If you breach, or threaten to commit a breach, of any of the restrictive
covenants set forth in this Letter Agreement (the "Restrictive Covenants"), the
Company shall have the following rights and remedies, each of which rights and
remedies shall be independent of the other and severally enforceable, and all of
which rights and remedies shall be in addition to, and not in lieu of, any other
rights and remedies available to the Company under law or in equity: (i) the
right and remedy to have the Restrictive Covenants specifically enforced by any
court having equity jurisdiction, it being acknowledged and agreed that any such
breach or threatened breach will cause irreparable injury to the Company and
that money damages will not provide an adequate remedy to the Company; and (ii)
the right and remedy to require you to account for and pay over to the Company
such damages as are recoverable at law as the result of any transactions
constituting a breach of any of the Restrictive Covenants.

     You hereby represent and warrant that (i) you have the legal capacity to
execute and perform this Letter Agreement, (ii) this Letter Agreement is a valid
and binding agreement enforceable against you according to its terms, (iii) the
execution and performance of this Letter Agreement does not violate the terms of
any existing agreement or understanding to which you are a party or by which you
may be bound and (iv) you have, and will, maintain during the Term, all
requisite licenses, permits and approvals necessary to perform the duties of COO
set forth herein. You also hereby agree that you shall not participate in any
medical, health, and insurance plans which may from time to time be in effect
for employees of, or consultants to, or other agents of, the Company. You hereby
acknowledge to the Company that you desire to, and are capable of, securing such
benefits independent of your relationship with the Company.

<PAGE>

     This Letter Agreement shall be governed by, and construed in accordance
with, the internal laws of the State of New York, without reference to the
choice of law principles thereof. Any claim, controversy or dispute between the
parties hereto, arising out of, relating to, or in connection with this Letter
Agreement or any aspect of your services to the Company hereunder, including but
not limited to the termination of this Letter Agreement and any and all claims
in tort or contract, shall be submitted to arbitration in Melville, New York,
pursuant to the American Arbitration Association ("AAA") National Arbitration
Rules for the Resolution of Employment Disputes. This provision shall apply to
claims against the Company and/or its affiliates and their respective current or
former employees, agents, managers, officers and/or directors. Any issue about
whether a claim is covered by this Letter Agreement shall be determined by the
arbitrator. There shall be one arbitrator, who (a) shall be chosen from a panel
provided by the AAA and who shall apply the substantive law of the State of New
York, (b) may award injunctive relief or any other remedy available from a
judge, including attorney fees and costs to the prevailing party, and (c) shall
not have the power to award punitive damages. Judicial review of the
arbitrator's award shall be strictly limited to the issue of whether said award
was obtained through fraud, corruption or misconduct.

     This Letter Agreement shall be binding upon, and shall inure to the benefit
of, the Company and you and its and your respective permitted successors,
assigns, heirs, beneficiaries and representatives. This Letter Agreement is
personal to you and may not be assigned by you without the prior written consent
of the Company. Any attempted assignment in violation of this paragraph shall be
null and void. This Letter Agreement shall constitute the entire agreement among
the parties with respect to the matters covered hereby and shall supersede all
previous written, oral or implied understandings among them with respect to such
matters.

     We are excited about your involvement with the Company and look forward to
a long and mutually rewarding scientific and business relationship.

<PAGE>

     For our records, I would appreciate your countersigning the attached copy
of this Letter Agreement and returning the same to me at your earliest
convenience.

                                     Sincerely,

                                     PHASE III MEDICAL, INC.


                                     By:   /s/ Mark Weinreb
                                           ----------------
                                           Mark Weinreb, President & CEO



Accepted and agreed to:


/s/ Robert Aholt
----------------
Robert Aholt

