ASSET PURCHASE AGREEMENT





                                 BY AND BETWEEN



                                PERIODONTIX, INC.



                                       AND



                                  DEMEGEN, INC.













                                  JULY 16, 2001























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{PAGE}   2



                            ASSET PURCHASE AGREEMENT



      THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made as of July 16,

2001, by and between Demegen, Inc., a Colorado corporation ("Demegen") and

Periodontix, Inc., a Delaware corporation (the "Company" or sometimes referred

to as "Seller")



                                    RECITALS



            A. Pursuant to the terms of that certain Agreement dated February

16, 2001 among Demegen and the Company (the "Option Agreement"), the Company

granted Demegen an option to purchase certain Assets (as defined in the Option

Agreement).



            B. Demegen now desires to purchase the Assets and has provided the

Company with written notice of the exercise of the option to purchase the Assets

for the consideration and on the terms and conditions set forth in this

Agreement.



      NOW, THEREFORE, in consideration of the respective representations,

      warranties, covenants and agreements set forth herein, the parties hereto

      agree as follows:





                                    ARTICLE I



                         SALE AND TRANSFER OF THE ASSETS



      1.1   Definitions.



            All capitalized terms not otherwise defined in this Agreement shall

have the meanings ascribed to them in the Option Agreement.



      1.2   Purchase and Sale.



            (a) Within fifteen days of the date Demegen exercised the Option by

providing notice to the Company and executing of this Agreement and in reliance

on the representations and warranties set forth herein and in the Option

Agreement, the Company will convey, assign, transfer and deliver to Demegen, and

Demegen will purchase from the Company all right, title and interest of the

Company in and to the Assets, but excluding the assets listed on Schedule 1.2,

which shall include Seller's cash and securities (the "Excluded Assets"). Right,

title and interest to the Excluded Assets shall be retained by the Company. The

Company shall transfer good and marketable title to the Assets to Demegen, free

and clear of any Security Interest and any right, title or interest of any other

person or entity.



      1.3   Assumed Liabilities.



            Demegen shall not assume or be deemed to assume, or be obligated

to pay, discharge or perform or otherwise be responsible for any liability or

obligation (whether known or unknown, whether absolute or contingent, whether

liquidated or unliquidated, and whether









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{PAGE}   3



due or to become due) of the Company or the Assets all of which are expressly

retained by the Seller, except for the obligations identified in Schedule 1.3

(collectively the "Assumed Liabilities") and only to the extent set forth in

Schedule 1.3, which Assumed Liabilities Demegen shall assume, discharge, perform

and be responsible for in accordance with the Instrument of Assumption of

Liabilities.



      1.4   The Closing.



            The closing of the purchase and sale of the Assets (the "Closing")

will take place within fifteen days after Demegen shall have exercised the

Option and executed this Agreement at the offices of Hale and Dorr LLP, 60 State

Street, Boston, MA 02109, or such other time and place as the parties may

mutually agree (the "Closing Date").



      1.5   Purchase Consideration.



            In consideration for the Company's sale of the Assets, Demegen shall

cause to be issued and delivered to the Company the following securities (the

"Purchase Consideration"). In the event that the date of the exercise of the

Option by Demegen is on or before July 31, 2001, then at the Closing Demegen

shall deliver (i) 4,230,000 shares of Demegen Common Stock (subject to

appropriate adjustment in the event of any split, combination or

reclassification of the outstanding Demegen Common Stock after the date of the

Option Agreement) and a Warrant to purchase 4,700,000 shares of Demegen Common

Stock (subject to appropriate adjustment in the event of any split, combination

or reclassification of the outstanding Demegen Common Stock after the date of

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