ESCROW AGREEMENT





         THIS ESCROW AGREEMENT (this "Agreement") is made and entered into this

16th day of February, 2001 by and among "), by and between Periodontix, Inc., a

Delaware corporation ("Periodontix") and Demegen, Inc., a Colorado corporation

("Demegen') and Joseph Lovett, in his capacity as escrow agent ("Escrow Agent").



                                    PREAMBLE



         A.   Pursuant to the terms of that certain Agreement between

              Demegen and Periodontix dated as of February 16, 2001 (the

              "Option Agreement") , Demegen was granted, among other things,

              an option to purchase certain assets of Periodontix and a

              license of certain of the technology of Periodontix;



         B.   In order to induce Demegen to enter into the Option Agreement

              and consummate the transactions contemplated therein,

              Periodontix has agreed to escrow a portion of the

              consideration it has received pursuant to the terms of the

              Option Agreement (i) as security for the prompt payment of its

              indemnification obligations under Article IX of the Option

              Agreement (the "Payment Obligations") and (ii) in accordance

              with the provisions of Sections 3.1 and 3.2 of the Option

              Agreement.



         C.   Demegen and Periodontix desire to appoint Escrow Agent to act

              as Escrow Agent pursuant to and in accordance with this

              Agreement; and



         D.   The execution of this Agreement by the parties is a condition

              precedent to the consummation of the transactions contemplated

              by the Option Agreement.



         NOW, THEREFORE, the parties hereto, in consideration of the promises

and agreements herein contained, and intending to be legally bound, do covenant

and agree as follows:



         Section 1. Definitions. All capitalized terms not otherwise defined in

this Agreement shall have the meaning ascribed to them in the Option Agreement.



         Section 2. Concurrent Events. Concurrently with the execution and

delivery of this Agreement, Demegen has caused the Escrowed Securities, to be

deposited with Escrow Agent and to be held and delivered in accordance with the

terms of this Agreement, the receipt of which is acknowledged by Escrow Agent.

Each of the parties acknowledge and agree that additional shares of Demegen

Common Stock may be delivered to the Escrow Agent from time to time in

accordance with the terms of the Option Agreement.



         Section 3. Exercise of the Right to Terminate. In the event that

Demegen shall have exercised the Right to Terminate prior to the Second Payment

Date, Demegen shall:





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         (a) Send written notice (a "Termination Notice") to Escrow Agent that

it has exercised the Right to Terminate; and



         (b) Send a copy of such Termination Notice simultaneously to

Periodontix.



         (c) If Periodontix shall notify Escrow Agent in writing within twenty

(20) calendar days after receipt of a Termination Notice that it disputes that

Demegen has validly exercised the Right to Terminate in accordance with the

provisions of the Option Agreement (such notice a "Termination Dispute Notice"),

Escrow Agent shall take no action with respect to such claim until such time as

it receives instructions relating thereto in accordance with Section 6 hereof.



         If no Termination Dispute Notice is received by Escrow Agent from

Periodontix within twenty (20) calendar days after Escrow Agent's receipt of

such Termination Notice, Escrow Agent shall deliver the Escrowed Securities to

Demegen. If no Termination Notice is received by Escrow Agent on or prior to the

Second Payment Date, Escrow Agent shall deliver the Escrowed Securities (other

than the certificate for 230,000 shares of Demegen Common Stock originally

delivered to the Escrow Agent) to Periodontix.



         Section 4. Indemnification Claims. In the event Demegen shall assert a

claim for indemnification against Periodontix in accordance with the provisions

of the Option Agreement, Demegen shall



         (a) Send written notice (a "Claim Notice") to Escrow Agent of the

amount of the indemnification claim which has not been paid (a "Claim"), and

setting forth the number of Indemnification Escrow Shares having a value based

on the Closing Share Price equal to the amount of the Claim; and



         (b) Send a copy of such Claim Notice simultaneously to Periodontix.



         If Periodontix shall notify Escrow Agent in writing within twenty (20)

business days after receipt of a Claim Notice that it has paid or disputes the

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