CONSULTING AGREEMENT

Exhibit 10.2

In consideration of the obligations herein made and undertaken, as well as other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties, intending to be legally bound, covenant and agree as follows:

1.   Definitions

1.1.   "Company" means Arbios Systems Inc., and its employees, officers and directors, agents, consultant or independent Consultants who disclose information to Consultant pursuant to this agreement.

1.2.   "Confidential Information" means all information and material which is proprietary to Company, whether or not marked as "confidential" or "proprietary" and which is disclosed to or obtained by Consultant, which relates to Company's or its parent Company’s past, present or future research, development or business activities. Confidential Information is all information or materials prepared by or for Company and includes, without limitation, all of the following: designs, drawings, specifications, techniques, models, data, documentation, diagrams, flow charts, research, development, processes, procedures, "know-how," new product or new technology information, product prototypes, product copies, manufacturing, development or marketing techniques and materials, development or marketing timetables, strategies related to customers, suppliers or personnel, pricing policies and financial information, and other information of a similar nature, whether or not reduced to writing or other tangible form, and any other Trade Secrets or nonpublic business information. Confidential Information does not include any information which (a) was in the lawful and unrestricted possession of Consultant prior to its disclosure by Company, (b) is or becomes generally available to the public by acts other than those of Consultant after receiving it, or (c) has been received lawfully and in good faith by Consultant from a third party who did not derive it from Company.

1.3.   "Trade Secrets" shall mean any scientific or technical data, information, design, process, procedure, formula, or improvement that is commercially valuable to the Company and is not generally known in the medical device industry.

2.   Scope of Services. Consultant shall provide advisory and consulting services in the area of financial affairs and is to perform activities performed as CFO. Company specifically agrees that Consultant may perform similar services for another entity so long as such services do not violate the terms and conditions of this Agreement, or impede his ability to perform his duties hereunder. Direction of consulting services shall be provided by the Board of Directors.

3.   Term And Termination

3.1.   Term . This Agreement shall commence on the Effective Date, and continue for a period through August 31, 2008, unless earlier terminated pursuant to the terms of this Agreement. The parties may amend this Agreement to extend it for an additional period of time following the term of this Agreement.

3.2.   Termination for Breach . This Agreement may be terminated by either party upon ten (10) days' prior written notice, if the other party breaches any term hereof and the breaching party fails to cure such breach within the ten-day (10) period.

3.3.   Termination Without Cause . Subject to the terms of Section 4 below, either party may terminate this Agreement at any time upon thirty (30) days’ advance written notice to the other party.

3.4.   Survival . In the event of any termination of this Agreement, Sections 5, 6, 7 and 9 hereof shall survive and continue in effect.

4.   Compensation/Expenses .

4.1.   Consulting Fees. In consideration for Consultant's consulting services to be rendered hereunder, Company agrees to pay to Consultant the sum $5,000 per month. Payment shall be made in arrears within thirty (30) days of receipt of the invoice from Consultant for such services, or on such terms that the parties mutually agree. Consultant agrees to prepare a detailed monthly invoice to evidence services rendered as reasonably required by Company for auditing or other business requirements.

4.2.   Reimbursement of Expenses . Company shall reimburse Consultant for reasonable and necessary out-of-pocket expenses incurred by Consultant in carrying out the duties of Consultant; provided however, that such expenses, including travel, shall be approved in advance by Company, and Consultant shall provide receipts to the Company for such expenses prior to receipt of any reimbursement hereunder.

5.   Ownership Rights

5.1.   General Property . As between Company and Consultant, all right, title, and interest in and to the progress, systems, data, or materials used or produced by Consultant in the performance of the services called for in this Agreement shall remain or become the property of Company.

5.2.   Intellectual Property . Consultant agree that Company shall be entitled to own and control all proprietary technology and all financial, operating, training ideas, data, processes, procedures and materials, including works of expression, all copy