<PAGE>

                                                                       EXHIBIT 1

                                                            ABACUS VENTURES, LLC
                                                              1808 Marine Street
                                                          Santa Monica, CA 90405
                                                                  (310) 314-0606
                                                              FAX (310) 314-8686


                          Via Email and Federal Express
                          -----------------------------

                               September 17, 2001

Robert Nicora
President and Chief Executive Officer
Synthetic Blood International, Inc.
3189 Airway Avenue, Building C
Costa Mesa, CA  92626

Dear Bob:

         This letter agreement (the "Engagement Letter") confirms our
understanding that Synthetic Blood International, Inc., and its affiliates
("SYBD" or the "Company"), has engaged (the "Engagement"), commencing on the
date hereof until the Expiration Date, Abacus Ventures, LLC ("Abacus") as its
financial advisor with respect to potential financing, mergers and acquisition,
and strategic planning activities of the Company. As used herein, the term
"Expiration Date" shall refer to the date that is the earlier of (i) the first
anniversary of the date hereof and (ii) in the event Abacus or SYBD terminates
the Engagement pursuant to the sixth paragraph hereof, the effective date of
notice to Abacus or SYBD, as the case may be, of such termination.

1.       Services.
         --------

         The Company acknowledges and agrees that Abacus has been retained
solely to provide the following financial advisory services with respect to this
Engagement Letter: (i) contact potential sources of capital or strategic
partnerships on behalf of the Company, (ii) participate, at the Company's
request, in all meetings with potential financing sources or strategic partners,
whether introduced by Abacus or others, (iii) assist in performing due diligence
on potential financing sources or strategic partners, (iv) review and prepare
financial analyses of all financial or strategic proposals, (v) assist in
negotiating all terms and definitive agreements related to financial or
strategic matters, and (vi) providing such other services as reasonably
requested by the Company. In such capacity, Abacus shall act as an independent
contractor, and any duties of Abacus arising out of its engagement hereunder
shall be owed solely to the Company.

2.       Transaction Defined.
         -------------------

         For purposes of this Engagement Letter, the term "Transaction" means
 the occurrence, either indirectly or directly, by way of a negotiated
 transaction or otherwise, any of the following: (i) the acquisition by SYBD of
 all, or substantially all, of the outstanding capital stock, or all, or
 substantially all, of the assets or business of any other entity, (ii) any
 issuance by SYBD of common stock, stock options, warrants, stock rights, or
 other interest in the ownership of SYBD, (iii) any issuance by SYBD of any debt
 or debt-related securities, or (iv) the merger, sale or other transfer of SYBD
 or its assets or business to another entity. In connection with a Transaction,
 the Company

<PAGE>

shall take such action as is necessary or desirable to facilitate the
Transaction, including the preparation of any documents to be filed with the
Securities and Exchange commission.

3.       Compensation; Transaction Fees.
         ------------------------------

         (i)      Retainer Fees.

         As compensation for the advisory services rendered by Abacus, SYBD
         agrees to the payment of a initial retainer in the amount of five
         thousand dollars ($5,000), plus options to acquire twenty thousand
         shares of common stock of SYBD at the exercise price equal to the
         closing price of the Company's shares as of the date of this letter
         agreement. The initial retainer and the options are payable upon
         execution of this Engagement Letter. SYBD also agrees to a quarterly
         retainer in the amount of five thousand dollars ($5,000) payable at the
         end of each ninety day period following the execution of this
         Engagement Letter. Such quarterly retainer agreement may be canceled
         after ninety day days by either party upon 30 days prior written notice
         of its desire to cancel the retainer agreement. The parties acknowledge
         that the retainer fees contemplate an approximate time commitment by
         Abacus of five days per quarter. Amounts paid or payable pursuant to
         this retainer will be earned by Abacus whether or not any Transaction
         is consummated.

         (ii)     Transaction Fees.

         As compensation for the advisory services rendered by Abacus with
         respect to a Transaction as defined above involving an entity or person
         introduced by Abacus (a "Abacus Contact"), SYBD agrees to pay Abacus,
         by wire transfer of immediately available funds, upon closing of a
         Transaction, a transaction fee equal to a Lehman Formula, as defined
         below. An entity or person shall be deemed to be introduced by Abacus
         if such entity's or person's name was first provided in writing to the
         Company by Abacus. Abacus will obtain the Company's prior approval of
         the Abacus Contact before any communication is made by Abacus on behalf
         of the Company.

                  The Company may also request, on a case-by-case basis,
         Abacus's involvement in Transactions involving an entity or person
         other than a Abacus Contact. Subject to the mutual agreement of the
         parties with respect to the services to be rendered by Abacus with
         respect to a Transaction as defined above involving an entity or person
         other than a Abacus Contact, SYBD agrees, as compensation for such
         services, to pay Abacus a transaction fee based on value added to the
         transaction as mutually determined by the parties."

         For purposes of this Engagement Letter, "Lehman Formula" is defined as
         the sum of (a) 5% if the first one million dollars in Aggregate
         Consideration, (b) 4% of the Aggregate Consideration between one
         million and two million dollars, (c) 3% of the Aggregate Consideration
         between two and three million dollars, (d) 2% of the Aggregate
         Consideration between three and four million dollars, and (e) 1% of the
         Aggregate Consideration in excess of four million dollars. "Aggregate
         Consideration" is defined as the sum of all (a) cash consideration, (b)
         the fair market value of all common stock, stock options, warrants,
         stock rights, other ownership interests, and debt or debt-related
         securities issued or assumed by the Company, and (c) any other non-cash
         consideration, paid or payable with respect to a Transaction or in
         connection with a Transaction. The fair market value of any such
         securities and/or other non-cash consideration will be the value
         determined by Abacus and SYBD as of the date that the Board of
         Directors of SYBD approves a Transaction, or if no such approval is
         given or required, as of the date such securities are issued.

         Up to 50% of the transaction fees will be payable, at the option of
         SYBD, in common stock of SYBD valued at 90% of the market price as of
         the closing of the Transaction, or in warrants to acquire common stock
         of SYBD valued as of the closing of the Transaction in accordance with
         the Black Scholes valuation model. The Company agrees that a
         Transaction Fee will be payable if at any time prior to the Expiration
         Date SYBD or a related organization enters into a definitive agreement
         with respect to a Transaction substantially equivalent to that
         described in the second paragraph hereof. The Company further agrees
         that it will not enter into a Transaction unless, prior to or
         simultaneously with the consummation of such Transaction, adequate
         provision is made with respect to payment of compensation to Abacus as
         contemplated by this paragraph.

<PAGE>

         (iii)    Expenses/Indemnification.

                  The Company shall, upon request by Abacus from time to time,
         reimburse Abacus promptly for all reasonable out-of-pocket expenses
         incurred by Abacus in connection with its engagement hereunder,
         regardless of whether any Transaction is consummated, subject to the
         prior approval of the Company for travel-related expenses or other
         significant expenses. As Abacus will be acting on the Company's behalf,
         it is our practice to receive indemnification, and the Company agrees
         to the indemnification and other obligations set forth in Schedule I
         attached hereto, which Schedule is an integral part hereof.

4.       Access to Information.
         ---------------------

         For so long as this Engagement Letter is in effect, the Company shall
make available to Abacus all available financial and other information
concerning its business and operations which Abacus reasonably requests as well
as any other information relating to a Transaction (but only to the extent such
information is, in the opinion of Abacus, necessary for the completion of such
Transaction) and will provide Abacus with access to the Company's officers,
directors, employees, independent accountants and legal counsel; provided,
however, that the Company will not be required to provide information to Abacus
if such information is (i) subject to attorney-client privilege, (ii) subject to
confidentiality agreements, or (iii) proprietary trade information. In
performing its services hereunder, Abacus shall be entitled to rely without
investigation upon all information that is available from public sources as well
as all other information supplied to it by or on behalf of the Company or its
advisors and, except as otherwise specifically agreed to in writing signed by
both parties, shall not in any respect be responsible for the accuracy or
completeness of, or have any obligation to verify, the same or to conduct any
appraisal of the assets of the Company.

5.       Confidentiality.
         ---------------

         To the extent consistent with legal requirements, all information given
to Abacus by the Company, unless publicly available or otherwise available to
Abacus without restriction or breach of any confidentiality agreement, will be
held by Abacus in confidence and will not be disclosed to anyone other than
Abacus's agents and advisors without the Company's prior approval or used for
any purpose other than those referred to in this Engagement Letter.

         Any advice, written or oral, provided by Abacus pursuant to this
Engagement Letter will be treated by the Company as Confidential, will be solely
for the information and assistance of the Company in connection with the
advisory services performed by Abacus hereunder and, unless otherwise required
by law or as requested by regulatory authorities, will not be used, circulated,
quoted or otherwise referred to for any other purpose, nor will it be filed
with, included in or referred to in whole or in part in any registration
statement, proxy statement or any other document, except in each case with our
prior written consent (such consent not to be unreasonably withheld).

6.       Termination.
         -----------
         This Engagement Letter may be terminated by Abacus or SYBD upon
delivery of 30 days written notice to that effect to Abacus or the Company, as
the case may be, and shall automatically terminate upon the first anniversary of
this letter, unless extended by mutual agreement of the parties. Upon any
termination or expiration of this Engagement Letter, Abacus will be entitled to
prompt payment of all fees accrued prior to such termination or expiration and
reimbursement of all out-of-pocket expenses as described above. The indemnity
and other provisions contained in Schedule I will also remain operative and in
full force and effect regardless of any termination or expiration of this
Engagement Letter.

7.       Miscellaneous.
         -------------

         Please note that Abacus is a private investment firm specializing in
the healthcare services industry. In the ordinary course of its activities,
Abacus or its affiliates may at any time hold long or short positions, and may
trade or otherwise effect transactions, for our own account, in debt or equity
securities of potential financing sources or strategic partners. We recognize
our Responsibility for compliance with United States federal and other
applicable laws in connection with any such activities.

         This Engagement Letter, including Schedule I hereto, incorporates the
entire understanding of the parties and supersedes all previous agreements with
respect to the subject matter hereof and shall be governed by, and

<PAGE>

construed and enforced in accordance with, the laws of the State of California.
This Engagement Letter shall be binding upon and inure to the benefit of the
Company, Abacus, each Indemnified Person (as defined in Schedule I hereto) and
their respective successors and assigns.

         The Company irrevocably and unconditionally submits to the exclusive
jurisdiction of any State or Federal Court sitting in Los Angeles, California
over any suit, action or proceeding arising out of or relating to this
Engagement Letter (including Schedule I hereto). The Company, to the fullest
extent permitted by law, irrevocably and unconditionally waives any objection to
the laying of venue of any such suit, action or proceeding brought in any such
court and any claim that any such suit, action or proceeding brought in such
court has been brought in any inconvenient forum. The Company, to the fullest
extent permitted by law, agrees that a final judgment in any such suit, action
or proceeding brought in any such court shall be conclusive and binding upon the
Company and may be enforced in any other courts to whose jurisdiction the
Company is or may be subject, by suit upon such judgment.

         If any term provision, covenant or restriction contained in this
Engagement Letter, including Schedule I, is held by a court of competent
jurisdiction or other authority to be invalid, void, unenforceable or against
its regulatory policy, the remainder of the terms, provisions, covenants and
restrictions contained in this Engagement Letter shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.

         This Engagement Letter may not be amended or any provision hereof
waived or modified except by an instrument in writing signed by the Company and
Abacus.

         If the foregoing correctly sets forth our understanding, please
indicate your acceptance of the terms hereof by signing both copies of this
Engagement Letter in the appropriate space below, retaining one copy for your
files and returning one copy to Abacus, whereupon this Engagement Letter will
become a binding agreement between us.

Sincerely,



Jonathan J. Spees

Accepted and agreed to as of the date first written above by:
Synthetic Blood International, Inc.



By:__________________________
     Robert Nicora
     President and Chief Executive Officer

<PAGE>

SCHEDULE I
----------

                           INDEMNIFICATION PROVISIONS
                           --------------------------

         A. Indemnification. To the fullest extent lawful, the Company will
            ---------------
promptly, upon demand, indemnify and hold harmless Abacus Ventures, LLC and its
affiliates (collectively, "Abacus"), and each director, officer, employee,
agent, member and controlling person of Abacus (any or all of the foregoing
hereinafter referred to as an "Indemnified Person"), from and against all
losses, claims, damages, expenses (including reasonable fees and disbursements
of counsel and accountants), costs (including, without limitation, expenses,
fees and disbursement and time charges related to giving testimony or furnishing
documents in response to a subpoena or otherwise) and liabilities (joint or
several), (collectively, "Losses"), resulting directly or indirectly from any
threatened or pending investigation, action, claim, proceeding or dispute,
including securityholder actions (whether or not Abacus or any other Indemnified
Person is a potential or actual named party or witness) (collectively, a
"Claim"), which (1) are related to or arise out of any untrue statement or
alleged untrue statement of a material fact contained in any oral or written
information provided to Abacus or any other person by the Company or used by the
Company in connection with the transaction contemplated by the Agreement or any
omission or alleged omission by the Company to state therein a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, or (2) are otherwise related to or arise
out of Abacus's engagement, role, activities or the performance or
non-performance of professional services on the Company's behalf. The Company
will not be responsible, however, for any Losses pursuant to clause (2) of the
preceding sentence which are judicially determined to have resulted primarily
and directly from the willful misconduct or gross negligence of the party
seeking indemnification hereunder; but pending any such judicial determination,
the indemnification and reimbursement obligations of the Company hereunder shall
continue to apply. The Company also agrees that neither Abacus nor any
Indemnified Person shall have any liability to the Company, its owners, parents,
creditors or securityholders for or in connection with its engagement, except
such liability for Losses incurred by the Company which are judicially
determined to have resulted primarily and directly from Abacus's willful
misconduct or gross negligence. For purposes of the foregoing, "judicially
determined" shall mean determined by a court of competent jurisdiction in a
final non-appealable judgment on the merits.

         B. Proceedings. Abacus will notify the Company if it learns that any
            -----------
investigation, lawsuit, administrative proceeding or self-regulatory
organization proceeding has been instituted based, directly or indirectly, on
the transactions which were the subject of Abacus's engagement under the
Agreement, although failure to do so will not relieve the Company from any
obligation or liability it has hereunder or otherwise, except to the extent such
failure causes the Company to forfeit substantial rights and defenses. Should
any lawsuit, administrative proceeding or self-regulatory organization
proceeding (collectively, a "Proceeding") be formally instituted against Abacus
or any Indemnified Person based, directly or indirectly, on Abacus's engagement
under the Agreement, the Company will be entitled to participate therein and, to
the extent that it may wish, to assume the defense of the Proceeding, with
counsel reasonably satisfactory to Abacus, so long as the Company continues to
pay all costs and expenses of the defense and preparation for such Proceeding.
Even if the Company assumes the defense of a Proceeding, each Indemnified Person
will have the right to participate in such Proceeding and to retain its own
counsel at such Indemnified Person's own expense. Furthermore, each Indemnified
Person shall have the right to employ its own counsel in any Proceeding and to
require the Company to pay all reasonable fees and expenses of such counsel as
they are incurred if (1) such Indemnified Party has been advised by such counsel
that there may be legal defenses available to it which are different from or
additional to defenses available to the Company (in which case the Company shall
not have the right to assume the defense of the Proceeding on behalf of such
Indemnified Party) (2) the Company shall not have assumed the defense of the
Proceeding and employed counsel reasonably satisfactory to such Indemnified
Party in a timely matter or (3) the Company shall have authorized the employment
of such counsel in connection with the defense of the Proceeding.

         C. Contribution. If any indemnification sought by an Indemnified Person
            ------------
pursuant to the terms hereof is held by a court of competent jurisdiction to be
unavailable for any reason or insufficient to hold such Indemnified Person
harmless, then the Company and Abacus will contribute to the Losses for which
such indemnification is held unavailable or insufficient (1) in such proportion
as is appropriate to reflect the relative benefits received (or anticipated)
from the proposed transaction by the Company on the one hand and the Indemnified
Person on the other, in connection with Abacus's engagement referred to above
(whether or not the transaction contemplated by the engagement is consummated)
or (2) if (but only if) the allocation provided in clause

<PAGE>


(1) is for any reason unenforceable, in such proportion as is appropriate to
reflect not only the relative benefits received (or anticipated) from the
proposed transaction by the Company on the one hand and the Indemnified Person
on the other, but also the relative fault of the Company and the Indemnified
Person, as well as any other relevant equitable considerations, in each case
subject to the limitation that the contribution by Abacus will not exceed the
amount of fees actually received by Abacus pursuant to Abacus's engagement. No
person found liable for fraudulent misrepresentation shall be entitled to
contribution from any person who is not also found liable for such fraudulent
misrepresentation. It is hereby agreed that the relative benefit to the Company
on the one hand and Abacus on the other, with respect to Abacus's engagement,
shall be deemed to be in the same proportion as (1) the total value paid or
proposed to be paid or received by the Company or its stockholders, as the case
may be pursuant to the transaction, whether or not consummated, for which Abacus
is engaged to render financial advisory services bears to (2) the fee paid or
proposed to be paid to Abacus in connection with such engagement (excluding
reimbursable expenses).

         D. Settlement of Claims. The Company will not, without the prior
            --------------------
written consent of Abacus, settle or compromise or consent to the entry of any
judgment in any pending or threatened Claim or Proceeding in respect of which
indemnification may be sought hereunder (whether or not Abacus or any
Indemnified Person is an actual party to such Claim or Proceeding) unless such
settlement, compromise or consent includes provisions holding harmless and
unconditionally releasing Abacus and each other Indemnified Person hereunder
from all liability related to or arising out of such Claim or Proceeding,
including claims for contribution. The Company shall not be liable for any
settlement of any Claim effected by Abacus without its written consent (which
consent shall not be unreasonably withheld).

         E. Miscellaneous. The Company's indemnity, reimbursement and
            -------------
contribution obligations provided for herein shall: (1) be in addition to any
liability that the Company otherwise may have to Abacus and any rights that
Abacus or any Indemnified Person may have at common law or otherwise; (2)
survive the completion or termination of professional services rendered by
Abacus under the Agreement; (3) apply to any activities prior to this date and
any amendment, modification or future addition to Abacus's engagement; and (4)
inure to the benefit of the heirs, personal representatives, successors, and
assigns of Abacus and each other Indemnified Person.

         If any term, provision, covenant or restriction contained in this
Agreement is held by a court of competent jurisdiction or other authority to be
invalid, void, unenforceable or against its regulatory policy, the remainder of
the terms, provisions, covenants and restrictions contained in this Agreement
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated.

         The Company hereby consents to personal jurisdiction and service and
venue in any court in which any Claim and Proceeding which is subject to the
terms provided for herein is brought against Abacus or any other Indemnified
Person. The parties waive any right to trial by jury with respect to any claim
or proceeding related to or arising out of Abacus's engagement, any transaction
or conduct in connection therewith or this Agreement.