Exhibit 10.2

                                  May 27, 2005

Mr. Thomas Axmacher
[Home Address]

            Re:   Certain Compensation Arrangements

Dear Tom:

            This letter  confirms our agreement with respect to a 2006 cash stay
bonus relating to your continued employment with Curative Health Services, Inc.,
including  its  subsidiaries  and  affiliated  entities,  and  their  respective
successors and assigns (collectively the "Company").

1)    The  Company is  prepared  to pay to you a stay bonus of  $100,000 in cash
      (less applicable  withholdings and deductions),  no later than October 31,
      2006,  if and only if each of the  following  conditions  shall  have been
      fully satisfied,  in the sole reasonable discretion of the Chief Executive
      Officer of the Company:

      a)    You shall have  relocated your home and moved to the vicinity of the
            Company's Nashua,  New Hampshire offices by July 31, 2005, and shall
            have remained there continuously through October 31, 2006.

      b)    You shall have fully,  timely and  satisfactorily  completed each of
            the following milestones:

            i)    The  consolidation  and  transfer  of  the  Company's  Finance
                  Department   to  Nashua,   New   Hampshire   shall  have  been
                  successfully   substantially   completed  by  July  31,  2005,
                  including   such  that  all   Finance   Department   functions
                  previously  performed  in  Hauppauge,  New  York  (other  than
                  accounting  functions  relating  to the  Company's  Wound Care
                  Management  business  unit,  and to OptCare  Plus  (Virginia),
                  eBioCare and Apex operations,  which shall not be transitioned
                  to  Nashua  at  this  time)   shall  have  been   successfully
                  transitioned to qualified  individuals employed by the Company
                  and based in the Company's Nashua offices, with no significant
                  diminishment  in performance and  effectiveness  compared with
                  the  Finance  Department  functions  previously  performed  in
                  Hauppauge.

            ii)   The  Company's  auditors  shall have  provided an  unqualified
                  opinion that the Company's  financial  statements  included in
                  its filing  with the United  States  Securities  and  Exchange
                  Commission  ("SEC") on Form 10-K  relating  to the fiscal year
                  ending  December  31, 2005  present  fairly,  in all  material
                  respects,  the  consolidated  financial  position  of Curative
                  Health  Services,  Inc. and  subsidiaries at December 31, 2005
                  and 2004, and the  consolidated  results of their  operations,
                  stockholders equity and their cash flows for each of the three
                  years in the period ended  December 31,  2005,  in  conformity
                  with U.S. generally accepted accounting  principles,  and that
                  the related financial

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Mr. Thomas Axmacher
May 27, 2005
Page 2


                  statement  schedule,  when considered in relation to the basic
                  financial statements taken as a whole,  presents fairly in all
                  material respects the information set forth therein.

            iii)  The  Company's  auditors  shall have  provided an  unqualified
                  opinion  that   Curative   Health   Services,   Inc.  and  its
                  subsidiaries   (including  without  limitation  Critical  Care
                  Systems, Inc.) maintained, in all material respects, effective
                  internal controls over financial  reporting as of December 31,
                  2005,  and shall have confirmed a management  assessment  that
                  Curative Health Services, Inc. and its subsidiaries (including
                  without  limitation  Critical Care Systems,  Inc.)  maintained
                  such effective internal controls.

            iv)   The Company  shall have timely and  properly  filed its annual
                  report on Form 10-K with the SEC, and

                  (1)   such report shall not contain any untrue  statement of a
                        material fact or omit to state a material fact necessary
                        to  make   the   statements   made,   in  light  of  the
                        circumstances  in which  they are made,  not  misleading
                        with respect to the period covered by the report; and

                  (2)   the  information  contained  in such report shall fairly
                        present,   in  all  material  respects,   the  financial
                        condition  and results of  operations  and cash flows of
                        the Company as of and for the periods  presented  in the
                        report, and

                  (3)   such report shall fully comply with the  requirements of
                        Section 13(a) or 15(d) of the Securities Exchange Act of
                        1934.

2)    Notwithstanding  the  foregoing,  the payment  referred to in  paragraph 1
      above  shall  be  reduced  by the  amount  of any  performance-based  cash
      incentive  payment  determined for you with respect to performance by you,
      the  Finance   Department   and/or  by  the  Company  in  connection  with
      performance  during 2005. For purposes of calculating such reduction,  the
      full amount of such  incentive  payment  (before  taking into  account any
      applicable withholdings or deductions) shall be included.

3)    The provisions of your Employment  Agreement,  as amended or modified from
      time to time, remain in full force and effect and are not modified hereby.
      You agree that in the event of a breach by you of any of the covenants set
      forth in your  Employment  Agreement (or of your  fiduciary  duties to the
      Company or  otherwise),  the  Company  would be  entitled  to off-set  any
      amounts contemplated in this letter agreement,  in addition to any and all
      other available remedies.

4)    This agreement  constitutes the entire  agreement  between the Company and
      you, and supersedes and cancels all prior and contemporaneous  written and
      oral agreements between the Company and you, regarding the cash stay bonus
      as  contemplated  in this letter.  You affirm that,  in entering into this
      agreement,  you are not  relying  upon  any  oral or  written  promise  or
      statement  made by  anyone  at any time on  behalf  of the  Company.  This
      agreement does not constitute a promise of continuing employment.

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Mr. Thomas Axmacher
May 27, 2005
Page 3


5)    This  agreement may not be changed or altered,  except by a writing signed
      by the Company and you. This agreement is entered into in the State of New
      York and the  laws of the  State of New  York  will  apply to any  dispute
      concerning it.

Please  sign a copy of this letter  agreement  in the place  provided  below and
return to me the fully executed original.

                                    Best regards,

Acknowledged and agreed:            CURATIVE HEALTH SERVICES, INC.

-----------------------
Thomas Axmacher                     By: _________________________________
                                        Paul F. McConnell
                                        President and Chief Executive Officer