EXHIBIT 10.3
                     Employment Agreement Robert Aholt, Jr.

                                                                    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

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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.

      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.

      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

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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

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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:

            (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

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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.

      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:
                                                  -----------------------------
                                                  Mark Weinreb, President & CEO

Accepted and agreed to:


-----------------------------
Robert Aholt