March 25, 2004


Mr. William L. Allender

Dear Bill:

      On behalf of the Board of Directors of Cytomedix,  Inc. (the "Company"), I
am pleased to offer you the  following  compensation  and other  benefits on the
terms and conditions set forth in this letter  agreement with attached  exhibits
(the "Agreement").

      Subject to the terms and conditions  herein,  the Company agrees to employ
you as Chief  Financial  Officer.  In such  capacity,  you  shall  report to the
Company's  Board of Directors and shall have the powers,  responsibilities,  and
authorities  as are  assigned  by the  Company's  Board  of  Directors.  By your
acceptance  of this  Agreement,  you accept  employment  as the Chief  Financial
Officer of the Company as of November 15, 2003 (the "Effective  Date") and agree
to devote  your  full  working  time and  efforts  to the best of your  ability,
experience,   and  talent,   to  the   performance   of  services,   duties  and
responsibilities  as the Company's  Chief Financial  Officer.  You shall perform
such duties and exercise such powers,  commensurate  with your position,  as the
Company's  Board of  Directors  shall from time to time  delegate to you on such
terms and conditions and subject to such  restrictions as the Company's Board of
Directors reasonably from time to time may impose.

      Your  term of  employment  shall  commence  as of the  Effective  Date and
continue until the date of termination (the "Termination Date") (the period from
the  Effective  Date  until the  Termination  Date  shall be the  "Term").  Your
employment  with  the  Company  shall  not be for any  specific  term and may be
terminated by you or the Company at any time with or without cause.  In the case
of termination by you or by the Company, and if so requested by the Company, you
agree to remain the  Company's  Chief  Financial  Officer for a period of thirty
(30) days from the date of notice of termination.  In such case, the Termination
Date shall be the  thirtieth  day  following  notice of  termination.  You shall
receive a base salary  ("Base  Salary") at the rate of $95,000 per annum  during
the Term; provided,  however, the Compensation  Committee of the Company's Board
of Directors,  or if no such  Compensation  Committee is in place, the Company's
Board of Directors,  shall review your annual Base Salary for potential increase
each year. Any increase in Base Salary shall constitute "Base Salary" hereunder.
The Base  Salary  shall not be  decreased  at any time  during  the  Term.  Upon
termination  of your  employment by either you or the Company,  you shall not be
entitled to any payments of your Base Salary for periods  after the  Termination
Date.  Base Salary  shall be payable in  accordance  with the  ordinary  payroll
practices of the Company. The Company shall be entitled to withhold from payment
any amount of withholding required by law.

      Upon  approval by the  Compensation  Committee of the  Company's  Board of
Directors,  or if no such committee is in place,  the entire Board of Directors,
you shall receive options to purchase  175,000 shares of Company's  common stock
at an exercise price of $1.50 per share.  The other terms and conditions of such
award shall be governed by the terms of a stock option award agreement in a form
substantially similar to that presently used by the Company. The options awarded
shall be for a term of ten (10) years, and the options  representing the 175,000
shares shall vest one year from the date of grant,  unless otherwise provided in
the grant notice or stock option award agreement.

<PAGE>


      It is  expressly  understood  and  contemplated  that a bonus plan will be
mutually  agreed  upon by the  parties  hereto  for the  Company's  fiscal  year
beginning  January 1 2004, and for each fiscal year thereafter  during the Term.
It is  anticipated  that pursuant to this bonus plan you will be eligible for an
annual bonus of options  representing  75,000 shares of common stock exercisable
at $1.50 per share.  The annual  bonus plan and the grant of options  thereunder
shall  be  based  upon  mutually  agreed  upon  performance  objectives.   These
performance  objectives may include,  be driven by, and/or be  proportionate  to
balance sheet ratios,  GAAP determined EBIT, or any other measure of performance
commonly  utilized in connection with annual bonus plans. Any awards pursuant to
an annual bonus plan shall be governed by the terms and conditions  contained in
the grant notice and stock option agreement issued to you by the Company.

      You shall be eligible to participate in any  compensation  plan or program
maintained  by the Company.  The Company  shall provide you during the Term with
coverage  under all employee  pension and welfare  benefit  programs,  plans and
practices  (commensurate  with your  position  in the  Company and to the extent
permitted under any employee benefit plan) in accordance with the terms thereof,
which the Company generally makes available to its senior executives.

      You shall be entitled to no less than ten business  days of paid  vacation
in each calendar year (or such greater time as Company  policy  permits a person
of your  employment  seniority),  which  shall  be  taken  at such  times as are
consistent  with your  responsibilities  hereunder.  In  addition,  you shall be
entitled to the perquisites  and other fringe benefits  generally made available
to senior  executives of the Company,  commensurate  with your position with the
Company.

      You will be authorized to incur  reasonable  expenses in carrying out your
duties and responsibilities under this Agreement, including, without limitation,
expenses   for   travel  and   similar   items   related  to  such   duties  and
responsibilities.  The Company will  reimburse  you for all such  expenses  upon
presentation, from time to time, of accounts of such expenditures (appropriately
itemized and approved consistent with the Company's policy).

      This  Agreement,  including  the attached  Exhibits A and B,  contains the
entire understanding among the parties hereto and supersedes in all respects any
prior or other agreement or understanding among the parties with respect to your
employment, including but not limited to any severance arrangements.


<PAGE>


      If any  provision  of this  Agreement  shall be  declared to be invalid or
unenforceable,  in whole or in part, such invalidity or  unenforceability  shall
not affect the remaining  provisions hereof which shall remain in full force and
effect. Each party hereto shall be solely responsible for any and all legal fees
incurred  by  him  or  it in  connection  with  this  Agreement,  including  the
enforcement  of this  Agreement.  This  Agreement may only be amended by written
agreement  of the  parties  hereto,  and  shall be  construed,  interpreted  and
governed in  accordance  with the laws of Arkansas,  without  reference to rules
relating to conflicts of law.

            By your signature  below,  you agree that this Agreement,  including
Exhibits A and B, shall be binding  upon and inure to the  benefit of your heirs
and representatives  and the assigns and successors of the Company,  but neither
this  Agreement nor any rights or obligations  hereunder  shall be assignable or
otherwise  subject to  hypothecation  by you or by the Company,  except that the
Company may assign this Agreement to any successor (whether by merger,  purchase
or otherwise) to the stock, assets or business(es) of the Company.

                                        Very truly yours,

                                        CYTOMEDIX, INC.

                                        ___________________________________
                                        By: Robert Burkett
                                            Chairman of the Board of Directors


I have read and hereby accept the terms of this Agreement


_____________________________________
Mr. William L. Allender

Date: _______________________________


<PAGE>


                                    Exhibit A

                           Confidentiality Provisions

      In connection with the Agreement,  Mr. William L. Allender  ("Executive"),
hereby agrees as follows:

      (a) Executive shall not, without the prior written consent of the Company,
use,  divulge,   disclose  or  make  accessible  to  any  other  person,   firm,
partnership,  corporation  or other  entity  any  Confidential  Information  (as
defined  below)  pertaining  to  the  business  of  the  Company  or  any of its
affiliates, except (i) while employed by the Company, in the business of and for
the  benefit  of the  Company,  or (ii)  when  required  to do so by a court  of
competent jurisdiction,  by any governmental agency having supervisory authority
over the business of the Company,  or by any administrative  body or legislative
body  (including a committee  thereof) with  jurisdiction  to order Executive to
divulge, disclose or make accessible such information.

      For  purposes of this  Exhibit A,  "Confidential  Information"  shall mean
non-public  information concerning the financial data, strategic business plans,
product  development  (or  other  proprietary  product  data),  customer  lists,
marketing plans and other non-public,  proprietary and confidential  information
of the Company or its  affiliates  (hereinafter  referred  to as the  "Protected
Group") or the Company's existing or potential customers,  that is not otherwise
available to the public (other than by Executive's breach of the terms hereof).

      (b)  During  the Term and for one (1) year  thereafter,  Executive  agrees
that,  without  the  prior  written  consent  of the  Company,  (A) he will not,
directly or indirectly,  in the United  States,  participate in any Position (as
defined below) in any business which is in competition  with any business of the
Protected  Group  and (B) he shall  not,  on his own  behalf or on behalf of any
person, firm or company, directly or indirectly,  solicit or offer employment to
any person who has been employed by the  Protected  Group at any time during the
12 months immediately preceding such solicitation,  and (C) he shall not, on his
own behalf or on behalf of any person, firm or company,  solicit,  call upon, or
otherwise communicate in any way with any client,  customer,  prospective client
or prospective  customer of the Company or of any member of the Protected  Group
for the  purposes  of  causing  or of  attempting  to cause  any such  person to
purchase  products sold or services  rendered by the Company or by any member of
the Protected  Group from any person other than the Company or any member of the
Protected  Group.  The term  "Position"  shall include,  without  limitation,  a
partner,  director,  holder of more than 5% of the  outstanding  voting  shares,
principal, executive, officer, manager or any employment or consulting position.
It is acknowledged and agreed that the scope of the clause as set forth above is
essential,  because  (i) a  more  restrictive  definition  of  "Position"  (e.g.
limiting it to the "same"  position with a competitor)  will subject the Company
to serious,  irreparable harm by allowing  competitors to describe  positions in
ways to evade the  operation  of this  clause,  and  substantially  restrict the
protection sought by the Company,  and (ii) by allowing  Executive to escape the
application  of this clause by accepting a position  designated as a "lesser" or
"different"  position with a  competitor,  the Company is unable to restrict the
Executive from providing  valuable  information to such competing company to the
harm of the Company.

<PAGE>


      (c)  Executive   agrees  that  he  will  not,   directly  or   indirectly,
individually  or in  concert  with  others,  engage in any  conduct  or make any
statement that is likely to have the effect of  undermining  or disparaging  the
reputation  of the Company or any member of the Protected  Group,  or their good
will, products, or business opportunities,  or that is likely to have the effect
of undermining or disparaging  the reputation of any officer,  director,  agent,
representative or employee, past or present, of the Company or any member of the
Protected  Group.  Company  agrees that it shall not,  directly  or  indirectly,
engage in any conduct or make any statement that is likely to have the effect of
undermining or disparaging the reputation of Executive.

      (d) For  purposes of this  Exhibit A, a business  shall be deemed to be in
competition  with the  Protected  Group  if it is  principally  involved  in the
purchase,  sale or other dealing in any property or the rendering of any service
purchased,  sold, dealt in or rendered by the Protected Group as a material part
of the business of the Protected  Group within the same geographic area in which
the Protected  Group effects such  purchases,  sales or dealings or renders such
services.

      (e) Executive and the Company agree that this covenant not to compete is a
reasonable  covenant under the  circumstances,  and further agree that if in the
opinion of any court of competent  jurisdiction such restraint is not reasonable
in any respect,  such court shall have the right,  power and authority to excise
or modify such  provision or  provisions  of this covenant as to the court shall
appear not  reasonable  and to  enforce  the  remainder  of the  covenant  as so
modified.  Executive  agrees that any breach of the covenants  contained in this
Exhibit A would irreparably  injure the Company.  Accordingly,  Executive agrees
that the Company may, in addition to pursuing any other  remedies it or they may
have in law or in equity,  cease making any payments  otherwise required by this
Agreement  and obtain an  injunction  against  Executive  from any court  having
jurisdiction over the matter restraining any further violation of this Agreement
by Executive.


<PAGE>


                                    Exhibit B

                                Change Of Control

      In connection  with the Agreement,  Mr. William L. Allender  ("Executive")
and Cytomedix, Inc. ("Company") hereby agree as follows:

      (a) In the  event  a  Change  of  Control  occurs,  and  (i)  the  Company
terminates   Executive's   employment  without  Cause,  or  (ii)  the  Executive
terminates  his  employment  for Good Cause  within three (3) months prior to or
within three (3) months  following the effective  date of a Change of Control of
the Company, then Executive will be entitled to a lump sum payment equivalent to
fifty percent (50%) of the Executive's  Base Salary in effect at the time of the
Change of control,  less standard  deductions and  withholdings  (the "Change of
Control  Benefits").  No  payment  under  (ii)  above  shall be made  until  the
transaction causing a Change of Control has occurred.

      (b) In the event that the Change of Control  Benefits or any part  thereof
provided for in this Exhibit B, or any amount otherwise payable to the Executive
under  the  Agreement,  this  Exhibit  B, or  otherwise,  constitute  "parachute
payments"  within the meaning of Section  280G of the  Internal  Revenue Code of
1986,  as amended  (the "Code") and will be subject to the excise tax imposed by
Section 4999 of the Code,  then  Executive  shall receive (i) a payment from the
Company  sufficient to pay such excise tax, and (ii) an additional  payment from
the Company sufficient to pay the income, employment, excise and any other taxes
arising from the payments made by the Company to or for the benefit of Executive
pursuant to paragraph (a) above and this paragraph (b) so that  Executive  shall
be  fully  reimbursed  for any  excise  tax and any  taxes  associated  with the
payments to  reimburse  Executive  for such  excise tax.  Unless the Company and
Executive  otherwise agree in writing,  the determination of Executive's  excise
tax liability and the amount  required to be paid under this paragraph (b) shall
be made in writing by a nationally  recognized  accounting firm  satisfactory to
both parties (the  "Accountants").  In the event that the excise tax incurred by
Executive is determined by the Internal  Revenue Service to be greater or lesser
than the amount so  determined  by the  Accountants,  the Company and  Executive
agree to promptly make such additional  payment,  including interest and any tax
penalties,  to the  other  party  as the  Accountants  reasonably  determine  is
appropriate  to ensure  that the net  economic  effect to  Executive  under this
paragraph (b), on an after-tax  basis, is as if the Code Section 4999 excise tax
did not apply to Executive.  For purposes of making the calculations required by
this  paragraph  (b),  the  Accountants  may  make  reasonable  assumptions  and
approximations  concerning  applicable taxes and may rely on  interpretations of
the Code for which there is a "substantial  authority"  tax reporting  position.
The Company and Executive shall furnish to the Accountants  such information and
documents  the   Accountants   may  reasonably   request  in  order  to  make  a
determination  under this  paragraph  (b). The Company  shall bear all costs the
Accountants   may  reasonably   incur  in  connection   with  any   calculations
contemplated by this paragraph (b).

      (c) Upon the  occurrence of a Change of Control,  all unvested  options or
other stock based  incentives  that have been awarded to the Executive  prior to
the transaction  causing a Change of Control shall become  immediately vested so
that all such options and  incentives  shall become fully vested under the terms
of the plans under with they were issued.

<PAGE>


      (d) The following  definitions shall be applicable to the identified terms
used in this Exhibit B:

      (i) "Change of Control" shall mean (1) a sale or other  disposition of all
or substantially all of the assets of the Company; (2) a merger or consolidation
in which the Company is not the surviving  entity and in which the  shareholders
of the Company  immediately prior to such  consolidation or merger own less than
fifty percent (50%) of the surviving entity's voting power immediately after the
transaction;  (3) a reverse merger in which the Company is the surviving  entity
but the shares of the Company's common stock outstanding  immediately  preceding
the merger are converted by virtue of the merger into other property, whether in
form of  securities,  cash or otherwise,  and in which the  shareholders  of the
Company  immediately  prior to such merger own less than fifty  percent (50%) of
the Company's  voting power  immediately  after the  transaction;  (4) any other
capital  reorganization  in which more than fifty percent (50%) of the shares of
the  Company  entitled  to vote are  exchanged;  or (5) during any period of two
consecutive  years (not  including  periods prior to the effective  date of this
Agreement), individuals who at the beginning of such period constitute the board
and any new directors  whose election by the board or nomination for election by
the  stockholders  was  approved by at least 2/3rds of the members of the board,
cease for any reason to constitute a majority thereof.

      (ii) "For Cause"  shall mean:  (1) the  willful and  continued  failure by
Executive  to  substantially  perform  his duties with the Company in good faith
(other than any such failure  resulting  from his  incapacity due to physical or
mental  illness,   injury  or  disability),   after  a  demand  for  substantial
performance  is delivered to him by the Board of Directors of the Company  which
identified,  in  reasonable  detail,  the manner in which the Board of Directors
believes  that  Executive  has not  substantially  performed  his duties in good
faith;  (2) the willful  engaging by Executive in conduct which causes  material
harm to the Company, monetarily or otherwise; or (3) Executive's conviction of a
felony arising from conduct during the term of this  Agreement.  For purposes of
this  definition,  no  act  or  failure  to act on  Executive's  part  shall  be
considered  "willful"  unless  done,  or omitted to be done,  by him not in good
faith and without  reasonable belief that his action or omission was in the best
interest  of the Company or its  shareholders.  Notwithstanding  the  foregoing,
Executive shall not be deemed to have been terminated for Cause unless and until
there shall have been  delivered to him a copy of a  resolution  duly adopted by
the  affirmative  vote of two-thirds  (2/3rds) of the directors then occupying a
seat on the Board of Directors at a meeting of the Board of Directors called and
held for such purpose (after ten (10) days notice to him and an opportunity  for
him,  together  with his  counsel,  to appear  before  the Board of  Directors),
finding that  Executive was guilty of conduct  described in clauses (1), (2), or
(3) of this definition.

      (iii) "Good Cause" shall mean any of the  following  actions  taken by the
Company  or any  subsidiary  that  employs  the  Executive:  (1) a breach of the
Agreement,  (2) an assignment  of the Executive to duties that are  inconsistent
with his status as a senior  executive or which  represent a  diminution  of his
status in the Company, (3) a reduction in Executive's Base Salary, (4) a failure
by the Company to pay any of Executive's compensation in accordance with Company
policy,  (5) a reduction in or elimination  of any of the benefits  described in
the  Agreement  or otherwise  granted to  Executive,  (6) change of  Executive's
title,  or (7) the failure of a  successor  to the Company to confirm in writing
within five (5) days of its  succession its obligation to assume and perform all
obligations of the Agreement.