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                                                              Exhibit 10.8


                              EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT AGREEMENT (the "Agreement") is made effective as of
March 3, 2000 (the "Effective Date"), between AUTOLOGOUS WOUND THERAPY, INC., a
Delaware corporation (the "Company"), and DAVID C. DEMAREST ("Executive").

     WHEREAS, the Company desires to employ Executive on the terms and
conditions hereinafter set forth;

     WHEREAS, the Company recognizes that Executive's employment is critical to
the growth and success of the Company and therefore desires to assure the
Company of Executive's continued employment; and

     WHEREAS, based on the foregoing, the Company and Executive wish to enter
into this agreement to come into force as of the Effective Date.

     NOW, THEREFORE, in consideration of the promises and the mutual covenants
and agreements herein contained, the Company and Executive hereby agree as
follows:

                             ARTICLE 1. EMPLOYMENT

A. EMPLOYMENT AND DUTIES. The Company shall employ Executive for the Term (as
hereinafter defined) as Vice President, Secretary and General Counsel, to
perform such duties as he shall reasonably be directed by the President to
perform. Executive hereby accepts such employment and agrees to render such
services on behalf of the Company. Executive shall perform his duties and carry
out his responsibilities hereunder in a diligent manner, and shall devote his
exclusive and full working time, attention and effort to the affairs of the
Company, shall use all reasonable efforts to promote the interests of the
Company and shall be just and faithful in the performance of his duties and in
carrying out his responsibilities.

B. LOCATION. The principal location for performance of Executive's services
hereunder shall be at the Company's executive offices, which are to be
re-located to north suburban Chicago, Illinois, subject to reasonable travel
requirements during the course of performing such services.

                          ARTICLE 2. EMPLOYMENT TERM

     The term of Executive's employment hereunder (the "Term") shall be deemed
to commence on the Effective Date and shall end on December 31, 2001, unless
sooner terminated in accordance with the terms of this Agreement; provided,
however, that the Term shall be automatically renewed and extended for
additional and successive Terms of two (2) years each at the end of each Term
(and any subsequent renewal Term thereof) unless either party gives Notice of
Termination (as hereinafter defined) to the other party no later than ninety
(90) days before the expiry of the then-current Term.


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                     ARTICLE 3. COMPENSATION AND BENEFITS

         In consideration for performing services on behalf of the Company, the
Executive shall receive the following compensation and benefits:

A.   CASH COMPENSATION.

     i. BASE SALARY. The Company shall pay Executive an annual salary of One
     Hundred and Fifty Thousand Dollars ($150,000), payable in bi-weekly
     installments, in arrears (the "Base Salary"). The Base Salary shall be
     reviewed annually by the Company's Board of Directors and may be
     increased, but not decreased (unless mutually agreed upon by Executive and
     the Company).

     ii. BONUS AND INCENTIVE PLANS. The Company shall establish, and Executive
     shall be entitled to participate in, Executive Bonus Compensation and
     Long-Term Incentive Programs, which shall be substantially in accordance
     with the summary points contained in Part A of Appendix I, attached hereto
     and made part hereof.

     iii. PARTICIPATION IN BENEFIT PLANS. The Company shall establish, and
     Executive shall be entitled to participate in (and to the extent that
     Executive's position, title, tenure, salary, age, health, and other
     qualifications make him eligible to participate in), employee benefit
     plans or programs, which shall be substantially in accordance with the
     summary points contained in Part B of Appendix I. The Company does not
     guarantee the continuance of any particular employee benefit plan or
     program during the Term and Executive's participation in any such plans or
     programs shall be subject to all terms, provisions, rules, and regulations
     applicable thereto. Executive will be entitled to twenty (20) days of
     vacation per year, to be used in accordance with the Company's vacation
     policy for senior executives as may be in force from time to time. During
     the existence of a Benefit Period, if any, (as hereinafter defined), the
     Company will arrange to provide Executive with welfare benefits (including
     life and health insurance benefits) of substantially similar design and
     cost to Executive as the welfare benefits and other employee benefits
     available to Executive prior to Executive's or the Company's, as the case
     may be, receipt of Notice of Termination (as hereinafter defined). In the
     event that Executive shall obtain full-time employment providing
     comparable welfare benefits during the Benefit Period, such benefits as
     otherwise receivable hereunder by Executive shall be discontinued.

     iv. EXPENSES. The Company will pay or reimburse Executive for all
     reasonable and necessary out-of-pocket expenses incurred by him in the
     performance of his duties under this Agreement, including first class air
     travel and reasonable capital and operating expenses for an office in
     Executive's home. Executive shall keep detailed and accurate records of
     expenses incurred in connection with the performance of his duties
     hereunder

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     and reimbursement therefor shall be in accordance with policies and
     procedures to be established from time to time by the Company's Board of
     Directors.

B.   STOCK WARRANTS. As a special incentive to obtain the services of
     Executive, Company hereby grants Executive the option to purchase two
     hundred thousand (200,000) shares of the common stock of the Company at
     $7.00 per share at any time, under either periodic or accelerated exercise
     terms as described below.

     i. PERIODIC EXERCISE RIGHTS. Executive's option to purchase shares shall
     vest and become fully and freely exercisable with respect to the first
     sixty-seven thousand (67,000) shares on December 31, 2000; with respect to
     the next sixty-seven thousand (67,000) shares on December 31, 2001, and
     with respect to the final sixty-six thousand (66,000) shares on December
     31, 2002; subject, however, to the provisions of Sub-section (iii), of
     this Section (B):

     ii. ACCELERATED EXERCISE RIGHTS. Notwithstanding periodic exercise rights,
     all of Executive's options that are not already exercisable in accordance
     with Sub-section 3(B)(i) shall become immediately exercisable at such time
     that the common stock of the Company trades at or above 37 and 5/8ths
     dollars per share (the "Target Price") as quoted on the securities
     exchange where the Company stock is currently being traded and during
     either of the two periods, chosen at the option of the Executive:

          a. the closing price for the stock is at or above the Target Price
          for fifteen (15) consecutive trading days; or

          b. the closing price for the stock is at or above the Target Price
          for twenty (20) out of any thirty (30) consecutive trading days.

     The determination of the Target Price during either of such periods shall
     be conclusive as reported by any independent financial reporting service,
     such as Reuters or Bloomberg Financial Markets.

     iii. POST-TERMINATION EXERCISE RIGHTS. Notwithstanding any of the
     foregoing, Executive shall have the right to exercise options to purchase
     any stock warrants or other stock grants given by the Company in
     accordance with the following:

          (a) if Executive's employment is terminated for Cause (as defined in
          Article 4(A)(ii), hereunder), or in the event that Executive
          voluntarily resigns his employment with the Company, vesting of all
          options shall cease immediately upon the effective date of
          termination or resignation;

          (b) if Executive's employment is terminated by reason of Death or
          Disability (as defined in Article 4(B) hereunder), Executive's legal
          representatives, conservators, heirs or assigns shall have the right
          to exercise all such options until


                                    Page 3
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          such options expire in accordance with the option plan under which
          such options were granted. The rights granted under this
          Sub-paragraph (iii)(b) shall apply whether or not the option was
          vested at the time of Death or Disability; provided, however, tha
          Executive was employed by the Company for at least twelve (12) months
          after the grant of any option; or

          (c) if Executive's employment is terminated for any reason other than
          Death or Disability, or in the event that Executive voluntarily
          resigns, then Executive shall have the right to exercise all options
          that have already vested as of the effective date of termination or
          resignation (or that become vested by reason of termination or
          resignation) during a period of ninety (90) days following the
          effective date of termination or resignation.

     iv. ISSUANCE OF REGISTERED SHARES. The Company hereby guarantees that it
     will issue registered common stock (the term "registered" as defined in
     the Securities and Exchange Act of 1934) to the Executive pursuant to the
     exercise of his options under Sub-sections (i) - (iii) of this Section
     3(B). In the event that the Company does not have sufficient quantities of
     registered shares available to satisfy this obligation, it shall
     immediately take all steps necessary to issue a registration statement and
     to make sufficient registered shares available in satisfaction of this
     Sub-section (iv).

     v. DILUTION. In the event that the Company issues new or additional equity
     securities, debt securities convertible into equity, declares a stock
     dividend, stock split, grants stock rights, or performs any other action
     that would reasonably be expected to reduce the value of the warrants, the
     Company shall immediately reduce the purchase price, increase number of
     the warrants, or both, so that value of the warrants granted to Executive
     remains unchanged.

     vi. EXPIRATION DATE. The options to purchase shares shall expire ten (10)
     years from the date each option becomes exercisable.

                     ARTICLE 4. TERMINATION OF EMPLOYMENT

A.   DEFINITIONS. The following terms shall have the definitions as described
     in this Section A:

     i.   "Benefit Period" shall mean:

          a.   the twenty-four (24) month period commencing on the Date of
               Termination which occurs in connection with a termination of
               employment described in the first sentence of Section 4(E)(i);
               or

          b.   the period consisting of the remainder, if any, of the then
               current Term in which occurs a termination of employment
               described in the first sentence of Section 4(E)(ii), plus the
               immediately succeeding twenty-four (24) month period.


                                    Page 4

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     ii. "Cause" shall mean any of the following:

          a. any act or failure to act (or series or combination thereof) by
          Executive done with the intent to harm in any material respect to the
          interests of the Company;

          b. the commission by Executive of a felony involving moral turpitude;

          c. the perpetration by Executive of a dishonest act or common law
          fraud against the Company or any subsidiary thereof;

          d. a grossly negligent act or failure to act (or series or
          combination thereof) by Executive detrimental in any material respect
          to the interests of the Company;

          e. the material breach by Executive of his agreements or obligations
          under this Agreement; or

          f. the continued refusal to follow the directives of the President or
          Board of Directors that are consistent with Executive's duties and
          responsibilities identified in Section 1(A) hereof.

     iii. A "Change of Control" shall mean any of the following:

          a. a sale of all or substantially all of the assets of the Company;

          b. the acquisition of more than eighty percent (80%) of the Common
          Stock of the Company (with all classes or series thereof treated as a
          single class) by any person or group of persons, except a Permitted
          Shareholder (as hereinafter defined), acting in concert. A "Permitted
          Shareholder" means a holder, as of the date the Stock Option Plan was
          adopted by the Company, of Common Stock;

          c. a reorganization of the Company wherein the holders of Common
          Stock of the Company receive stock in another company, a merger of
          the Company with another company wherein there is an eighty percent
          (80%) or greater change in the ownership of the Common Stock of the
          Company as a result of such merger, or any other transaction in which
          the Company (other than as the parent corporation) is consolidated
          for federal income tax purposes or is eligible to be consolidated for
          federal income tax purposes with another corporation;

          d. in the event that the Common Stock is traded on an established
          securities market, a public announcement that any person has acquired
          or has the right to acquire beneficial ownership of fifty-one percent
          (51%) or more of the then-outstanding Common Stock and for this
          purpose the terms "person" and


                                    Page 5

<PAGE>

          "beneficial ownership" shall have the meanings provided in Section
          13(d) of the Securities and Exchange Act of 1934 or related rules
          promulgated by the Securities and Exchange Commission, or the
          commencement of or public announcement of an intention to make a
          tender offer or exchange offer for fifty-one percent (51%) or more of
          the then outstanding Common Stock;

          e. a majority of the Board of Directors is not comprised of
          Continuing Directors. A "Continuing Director" means a director
          recommended by the Board of Directors of the Company for election as
          a director of the Company by the stockholders; or

          f. the Board of Directors of the Company, in its sole and absolute
          discretion, determines that there has been a sufficient change in the
          share ownership of the Company to constitute a change of effective
          ownership or control of the Company.

     iv. "Good Reason" shall mean the occurrence of any one or more of the
     following events during the Term:

          a. the assignment to Executive of any duties inconsistent in any
          respect with Executive's position (including status, offices, title,
          and reporting requirements), authority, duties or other
          responsibilities or any other action of the Company that results in a
          diminishment in such position, authority, duties or responsibilities,
          other than an insubstantial and inadvertent action that is remedied
          by the Company promptly after receipt of notice thereof given by
          Executive;

          b. a reduction by the Company in Executive's Base Salary as in effect
          on the Effective Date and as the same shall be increased from time to
          time hereafter;

          c. the Company's requiring Executive to be based at a location in
          excess of fifteen (15) miles from the location of Executive's
          principal residence without the consent of Executive;

          d. the failure by the Company to: (a) continue in effect any material
          compensation or benefit plan, program, policy or practice in which
          Executive was participating during the Term of his employment or at
          the time of a Change of Control; or (b) provide Executive with
          compensation and benefits at least equal (in terms of benefit levels
          and/or reward opportunities) to those provided for under each
          employee benefit plan, program, policy and practice as in effect
          immediately prior to a Change of Control (or as in effect following
          the Change of Control, if greater);

          e. the failure of the Company to obtain a satisfactory agreement from
          any successor to the Company to assume and agree to perform this
          Agreement; or

                                    Page 6

<PAGE>

          f. any purported termination by the Company of Executive's employment
          that is not effected pursuant to a Notice of Termination (as defined
          below).

     v. "Date of Termination" shall mean the date specified in the Notice of
     Termination (as hereinafter defined) (except in the case of Executive's
     death, in which case Date of Termination shall be the date of death);
     provided, however, that if Executive's employment is terminated by the
     Company other than for Cause, the date specified in the Notice of
     Termination shall be at least thirty (30) days from the date the Notice of
     Termination is given to Executive and if Executive's employment is
     terminated by Executive for Good Reason, the date specified in the Notice
     of Termination shall not be more than sixty (60) days from the date the
     Notice of Termination is given to the Company.

     vi. "Notice of Termination" shall mean a written notice either from the
     Company to Executive, or Executive to the Company, that indicates Section
     2 or the specific provision of Section 4 of this Agreement relied upon as
     the reason for such termination or non-renewal, the Date of Termination,
     and, in reasonable detail, the facts and circumstances claimed to provide
     a basis for termination or non-renewal pursuant to Section 2 or this
     Section 4 of this Agreement.

B. TERMINATION UPON DEATH OR DISABILITY. This Agreement, and Executive's
employment hereunder, shall terminate automatically and without the necessity
of any action on the part of the Company upon the death of Executive. In
addition, if at any time during the Term Executive shall become physically or
mentally disabled, whether totally or partially, so that he is unable
substantially to perform his duties and services hereunder for:

     i. a period of six (6) consecutive months; or

     ii. for shorter periods aggregating six (6) months during any twelve (12)
     month period;

then, the Company may at any time after the last day of the sixth consecutive
month of disability or the day on which the shorter periods of disability shall
have equaled an aggregate of six (6) months, by written notice to Executive
(but before Executive has recovered from such disability), terminate this
Agreement and Executive's employment hereunder.

C. COMPANY'S AND EXECUTIVE'S RIGHT TO TERMINATE PRIOR TO CHANGE OF CONTROL.
Prior to a Change of Control, this Agreement and Executive's employment
hereunder may be terminated at any time by the Company, with or without Cause,
upon thirty (30) days prior written notice to Executive, and by Executive, at
any time, upon thirty (30) days prior written notice to the Company. Any
termination of Executive's employment by the Company without Cause prior to a
Change of Control that occurs at the request or insistence of any person (other
than the

                                    Page 7

<PAGE>

Company) relating to such Change of Control shall be deemed to have
occurred after the Change of Control for the purposes of this Agreement.

D. COMPANY'S AND EXECUTIVE'S RIGHT TO TERMINATE FOLLOWING A CHANGE OF CONTROL.
Following a Change of Control, this Agreement and Executive's employment
hereunder may be terminated at any time:

     i. by the Company, with or without Cause, upon thirty (30) days prior
     written notice to Executive, or

     ii. by Executive for Good Reason upon thirty (30) days prior written
     notice to the Company. Executive's right to terminate his employment
     pursuant to this Section 4(D) shall not be affected by incapacity due to
     physical or mental illness. Executive's continued employment following a
     Change of Control shall not constitute consent to, or a waiver of, rights
     with respect to, any circumstance constituting Good Reason hereunder.

E. COMPENSATION UPON TERMINATION.

     i. TERMINATION PRIOR TO CHANGE OF CONTROL. In the event the Company
     terminates (or elects not to renew) this Agreement without Cause, and such
     termination (or non-renewal) without Cause occurs prior to any Change of
     Control, Executive shall be entitled to receive his Base Salary through
     the Date of Termination, the welfare benefits described in Section
     3(A)(iii) for the Benefit Period, and not later than thirty (30) days
     after the Date of Termination, a lump sum severance payment equal to the
     product of two (2) times the sum of Executive's then-current Base Salary
     plus the arithmetic average of payments made to Executive pursuant to the
     Company's Executive Bonus Compensation Program with respect to the three
     (3) fiscal years immediately preceding the fiscal year in which the Date
     of Termination occurs. In addition to the foregoing, to the extent not
     otherwise required under the Company's Stock Option Plan or any award
     agreement with Executive, any unvested stock option awards theretofore
     awarded to Executive shall vest and become exercisable on the Date of
     Termination. In the event this Agreement is terminated (or not renewed)
     for any reason other than by the Company without Cause, and such
     termination (or non-renewal) occurs prior to a Change of Control,
     Executive shall not be entitled to the continuation of any compensation,
     bonuses or benefits provided hereunder, or any other payments following
     the Date of Termination, other than Base Salary earned through such Date
     of Termination.

     ii. TERMINATION FOLLOWING CHANGE OF CONTROL. If this Agreement is
     terminated (or not renewed)

          a. by the Company without Cause; or




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          b. by the Executive for Good Reason during the twelve (12) month
          period immediately following a Change of Control, and such
          termination (or non-renewal) occurs following a Change of Control;

     then, the Executive shall be entitled to receive his full Base Salary
     through the Date of Termination, the welfare benefits described in Section
     3(A)(iii) for the Benefit Period and, not later than thirty (30) days
     after the Date of Termination, a lump sum severance payment equal to the
     sum of the Base Salary which would otherwise have been payable for the
     remainder (if any) of the then current Term, plus an amount equal the
     product of two (2) times the sum of Executive's then current annual Base
     Salary plus the arithmetic average of payments made to Executive pursuant
     to the Company's Executive Bonus Compensation Program with respect to the
     three (3) fiscal years immediately preceding the fiscal year in which the
     Date of Termination occurs.

     In addition to the foregoing, to the extent not otherwise required under
     the Company's Stock Option Plan or any other award agreement with
     Executive, any unvested stock option awards theretofore awarded to
     Executive shall vest and become immediately exercisable in full. In the
     event this Agreement is terminated (or not renewed) for any reason other
     than by the Company without Cause, or by Executive for Good Reason, and
     such termination (or non-renewal) occurs following a Change of Control,
     Executive shall not be entitled to the continuation of any compensation,
     bonuses or benefits provided hereunder, or any other payments following
     the Date of Termination, other than Base Salary earned through the Date of
     Termination.

     iii. At Executive's option to be exercised by written notice to the
     Company, the severance benefits payable under this Section 4(E) shall be
     paid in accordance with the Company's normal payroll procedures in
     installments over a twenty-four (24) month period corresponding to the
     amount of the payments instead of in a lump sum.

     iv. Anything to the contrary contained herein notwithstanding, as a
     condition to Executive receiving severance benefits to be paid pursuant to
     this Section 4(E), Executive shall execute and deliver to the Company a
     general release in form and substance reasonably satisfactory to the
     Company releasing the Company and its officers, directors, employees and
     agents from all liabilities, claims and obligations of any nature
     whatsoever, excepting only the Company's obligations under this Agreement,
     under any Stock Option Award Agreements, and under any other employee
     benefit plans or programs in which Executive participates under Section 3
     hereof, subject to all terms and conditions of such plans or programs and
     this Agreement.

                        ARTICLE 5. EMPLOYMENT COVENANTS

A. TRADE SECRETS AND CONFIDENTIAL INFORMATION. Executive agrees that he shall,
during the course of his employment and for a period of five (5) years
thereafter, hold inviolate and keep secret all documents, materials, knowledge
or other confidential business or technical

                                     Page 9


<PAGE>

information of any nature whatsoever disclosed to or developed by him or to
which he had access as a result of his employment (hereinafter referred to as
"Confidential Information"). Such Confidential Information shall include
technical and business information, including, but not limited to, inventions,
research and development, engineering, products, designs, manufacture, methods,
systems, improvements, trade secrets, formulas, processes, marketing,
merchandising, selling, licensing, servicing, customer lists, records or
financial information, manuals or Company strategy concerning its business,
strategy or policies. Executive agrees that all Confidential Information shall
remain the sole and absolute property of the Company. During the course of his
employment, Executive shall not use, disclose, disseminate, publish, reproduce
or otherwise make available such Confidential Information to any person, firm,
corporation or other entity, except for the purpose of conducting business on
behalf of the Company. Following the Term, Executive shall not use, disclose,
disseminate, publish, reproduce, or otherwise make available such Confidential
Information to any person, firm, corporation, or other entity. Upon termination
of his employment with the Company, Executive will leave with or deliver to the
Company all records and any compositions, articles, devices, equipment and
other items which disclose or embody Confidential Information including all
copies or specimens thereof, whether prepared by his or by others. The
foregoing restrictions on disclosure of Confidential Information shall apply so
long as the information has not properly come into the public domain through no
action of Executive.

B. TRANSFER OF INVENTIONS. Executive, for himself and his heirs and
representatives, will promptly communicate and disclose to the Company, and
upon request will, without additional compensation, execute all papers
reasonably necessary to assign to the Company or the Company's nominees, free
of encumbrance or restrictions, all inventions, discoveries, improvements,
whether patentable or not, conceived or originated by Executive solely or
jointly with others, at the Company's expense or at the Company's facilities,
or at the Company's request, or in the course of his employment, or based on
knowledge or information obtained through his employment during the Term. All
such assignments shall include the patent rights in this and all foreign
countries. Notwithstanding the foregoing, this Section 5(B) shall not apply to
any invention for which no equipment, supplies, facilities or trade secret
information of the Company was used and which was developed entirely on
Executive's own time; and

     i. that does not relate:

          a. directly to the business of the Company, or

          b. to the Company's actual or demonstrably anticipated research or
          development; or

     ii. that does not result from any work performed by Executive for the
     Company.

C. EXCLUSIVITY OF EMPLOYMENT. During the Term, Executive shall not directly or
indirectly engage in any activity competitive with or adverse to the Company's
business or welfare or render a material level of services of a business,
professional or commercial nature to any other

                                    Page 10
<PAGE>

person or firm, whether for compensation or otherwise, except for serving as a
director of another firm.

D. COVENANT NOT TO COMPETE. Executive agrees to be bound and abide by the
following covenants not to compete:

     i. TERM AND SCOPE. During his employment with the Company and for a period
     of two (2) years after the Term, Executive will not render to any
     Conflicting Organization (as hereinafter defined), services, directly or
     indirectly, anywhere in the world in connection with any Conflicting
     Product, except that Executive may accept employment with a large
     Conflicting Organization whose business is diversified (and which has
     separate and distinct divisions) if Executive first certifies to the Board
     of Directors in writing that he has provided a copy of Section 5 of this
     Agreement to such prospective employer, that such prospective employer is
     a separate and distinct division of the Conflicting Organization and that
     Executive will not render services directly or indirectly in respect of
     any Conflicting Product (as hereinafter defined). Such two-year time
     period shall be tolled during any period that Executive is engaged in
     activity in violation of this covenant.

     ii. JUDICIAL ACTION. Executive and the Company agree that, if the period
     of time or the scope of the restrictive covenant not to compete contained
     in this Section 5(D) shall be adjudged unreasonable in any court
     proceeding, then the period of time and/or scope shall be reduced
     accordingly, so that this covenant may be enforced in such scope and
     during such period of time as is judged by the court to be reasonable. In
     the event of a breach or violation of this Section 5(D) by Executive, the
     parties agree than in addition to all other remedies, the Company shall be
     entitled to equitable relief for specific performance, and Executive
     hereby agrees and acknowledges that the Company has no adequate remedy at
     law for the breach of the covenants contained herein.

     iii. DEFINITIONS. For purposes of the covenants contained in this Section
     5(D), the following terms shall have the following meanings:

          a. "Conflicting Product" means any product, method or process, system
          or service of any person or organization other than the Company, in
          existence or under development at the time Executive's employment
          with the Company terminates, that is the same as or substantially or
          directly competes with a product, method or process, system or
          service of or provided by the Company or any of its affiliates or
          about which Executive acquires Confidential Information.

          b. "Conflicting Organization" means any person or organization which
          is engaged in or about to become engaged in, research on or
          development, production, marketing, licensing, selling or servicing
          of a Conflicting Product.


                                    Page 11

<PAGE>



     iv. DISCLOSURE TO PROSPECTIVE EMPLOYERS. Executive will disclose to any
     prospective employer, prior to accepting employment, the existence of
     Section 5 of this Agreement. The obligation imposed by this Section 5(D)
     shall terminate two (2) years after termination of Executive's employment
     with the Company; provided, however, the running of such two-year period
     shall be tolled to the extent the covenant not to compete contained in
     Section 5(D) hereof is tolled.

                           ARTICLE 6. MISCELLANEOUS

A. NOTICES. Any notice required or permitted to be delivered hereunder shall be
in writing and shall be deemed to be delivered on the earlier of:



                                    Page 12
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     i. the date received; or

     ii. the date of delivery, refusal or non-delivery indicated on the return
     receipt, if deposited in a United States Postal Service depository,
     postage prepaid, sent registered or certified mail, return receipt
     requested, addressed to the party to receive the same at the address of
     such party set forth below:

         If to the Company:               If to the Executive:

         Autologous Wound Therapy, Inc.   David C. Demarest
         1523 Bowman Road, Suite A        c/o Michael J. Caywood, Esq.
         Little Rock, Arkansas            Dresser, Dresser, Gilbert & Haas, PC
         72211  USA                       112 South Monroe Street
                                          Sturgis, Michigan
                                          49091  USA

     A Party may change its address from time to time by Notice addressed to
the other Party.

B. HEADINGS. The headings of the articles and sections of this Agreement are
inserted for convenience only and shall not be deemed a part of or affect the
construction or interpretation of any provision hereof.

C. MODIFICATIONS & WAIVER. No modification of any provision of this Agreement
or waiver of any right or remedy herein provided shall be effective for any
purpose unless specifically set forth in a writing signed by the party to be
bound thereby. No waiver of any right or remedy in respect of any occurrence or
event on one occasion shall be deemed a waiver of such right or remedy in
respect of such occurrence or event on any other occasion.

D. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
parties with respect to the subject matter hereof and supersedes all other
agreements; oral or written, heretofore made with respect thereto.

E. SEVERABILITY. Any provision of this Agreement prohibited by or unlawful or
unenforceable under any applicable law of any jurisdiction shall as to such
jurisdiction be ineffective without affecting any other provision hereof. To
the full extent, however, that the provisions of such applicable law may be
waived, they are hereby waived, to the end that this Employment Agreement be
deemed to be a valid and binding agreement enforceable in accordance with its
terms.

F. GOVERNING LAW AND JURISDICTION. This Agreement shall be deemed to have been
entered into by the parties in the State of Illinois and shall be continued and
enforced in accordance with the laws of that State. Any disputes arising under
the terms and conditions of this Agreement shall be resolved in a court of
competent jurisdiction of that State and the parties hereto irrevocably submit
to such jurisdiction.

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<PAGE>

G. ASSIGNMENTS. The Company shall have the right to assign this Agreement and
to delegate all rights, duties and obligations hereunder to any entity that
controls the Company, that the Company controls or that may be the result of
the merger, consolidation, acquisition or reorganization of the Company and
another entity. Executive agrees that this Agreement is personal to him and his
rights and interest hereunder may not be assigned, nor may his obligations and
duties hereunder be delegated (except as to delegation in the normal course of
operation of the Company), and any attempted assignment or delegation in
violation of this provision shall be void. Notwithstanding any of the
foregoing, all of Executive's rights and interest hereunder shall be assignable
to Executive's legal representatives, executors or conservators in the event of
Executive's Death or Disability.

H. ATTORNEY FEES. In the event of litigation between the parties, to enforce
their respective rights under this Agreement, the prevailing party shall be
entitled to receive from the non-prevailing party reimbursement of the
prevailing party's reasonable attorney's fees and costs at all levels of trial
and appeal.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.

         Executive                        Autologous Wound Therapy, Inc.

         /s/ David C. Demarest            By: /s/ Dennis G. Hendren
         -----------------------             ------------------------
         David C. Demarest
                                              Title:  President/CEO

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<PAGE>


                                   APPENDIX I

                       Part A - Bonus and Incentive Plans

1.   ANNUAL BONUS. In addition to Executive's Base Salary, the Company shall
     pay to the Executive an annual bonus in an initial amount of Seventy-Five
     Thousand Dollars ($75,000). The bonus shall be payable depending on the
     achievement of the Executive and the Company of a specified list of
     performance and payment criteria to be agreed to between the Executive and
     the Company and approved by the Company's Board of Directors. In
     accordance with the Executive's annual salary review, the Executive's
     annual bonus shall be reviewed and increased by the Company's Board of
     Directors as may be appropriate.

2.   LONG TERM INCENTIVE PROGRAM. During the Term of Executive's employment by
     the Company, Executive shall be entitled to participate in the Company's
     Executive Long Term Incentive Program which will be established by the
     Company's Board of Director's in accordance with a strategic plan
     developed for the Company and on appropriate terms and conditions.


                  Part B - Employee Benefit Plans and Programs

1.   INSURANCE PROGRAM. The Company shall establish for the benefit of the
     Executive an insurance program, which shall include, among other things,
     life, health, dental and long-term disability coverage. Such insurance
     program shall be no less competitive than similar benefit programs that
     are established for other health care companies or comparable industries.

2.   PENSION OR PROFIT-SHARING PROGRAMS. In addition to the insurance program,
     the Company shall establish a suitable pension, (401(k)) or other profit
     sharing program, which shall be no less competitive than similar pension
     or profit-sharing programs that are established for other health care
     companies or comparable industries.


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