Document:

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                                                                   EXHIBIT 10.34

                               ORTHALLIANCE, INC.

                         2000 EMPLOYEE STOCK OPTION PLAN
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                               ORTHALLIANCE, INC.
                         2000 EMPLOYEE STOCK OPTION PLAN

                                    ARTICLE I

                                   DEFINITIONS

      As used herein, the following terms have the following meanings unless the
context clearly indicates to the contrary.

      1.1   "Board" shall mean the Board of Directors of the Company.

      1.2   "Change in Control" shall mean the occurrence of either of the
following events:

            (a)   any of the following events:

                  (i)   the dissolution or liquidation of the Company; or

                  (ii)  a reorganization, merger or consolidation of the Company
                        with one or more other corporations or other entities
                        (except with respect to a transaction, the sole purpose
                        of which is to change the domicile or name of the
                        Company), as a result of which the Company ceases to
                        exist or becomes a subsidiary of another corporation or
                        other entities (which shall be deemed to have occurred
                        if another corporation shall own, directly or
                        indirectly, more than fifty percent (50%) of the
                        aggregate voting power of all outstanding equity
                        securities of the Company); or

                  (iii) a sale of all or substantially all of the Company's
                        assets; or

            (b)   Any "person" (as such term is used in Sections 13(d) and
                  14(d) of the Exchange Act), other than (i) the Company, any
                  employee benefit plan of the Company, or any subsidiary of
                  the Company; or (ii) any entity holding Company Stock for
                  or pursuant to the terms of any such employee benefit plan,
                  by the acquisition or aggregation of securities is or
                  becomes the beneficial owner, directly or indirectly, of
                  securities of the Company representing fifty percent (50%)
                  or more of the combined voting power of the Company's then
                  outstanding securities ordinarily (and apart from rights
                  accruing under special circumstances) having the right to
                  vote at elections of directors (the "Base Capital Stock");
                  except that any change in the relative beneficial ownership
                  of the Company's securities by any person resulting solely
                  from a reduction in the aggregate number of outstanding
                  shares of Base Capital Stock, and any decrease thereafter
                  in such person's ownership of securities, shall be
                  disregarded until such person increases in any manner,
                  directly or indirectly, such person's beneficial ownership
                  of any securities of the Company.

      1.3   "Code" shall mean the Internal Revenue Code of 1986, as amended,
including effective date and transition rules (whether or not codified). Any
reference herein to a specific section of the Code shall be deemed to include a
reference to any applicable corresponding provision of future law.

      1.4   "Committee" shall mean a committee of at least two (2) Directors
appointed from time to time by the Board, having the duties and authority set
forth herein in addition to any other authority granted by the Board; provided,
however, that with respect to any Options granted to an individual who is also a
Section 16 Insider, the Committee shall consist of at least two (2) Directors
(who need not be members of the Committee with respect to Options granted to any
other individuals) who are Non-Employee Directors (within the meaning of Rule
16b-3), and all authority and discretion shall be exercised by such Non-Employee
Directors, and references herein to the
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"Committee" shall mean such Non-Employee Directors insofar as any actions or
determinations of the Committee shall relate to or affect Options made to or
held by any Section 16 Insider. At any time that the Board shall not have
appointed a committee as described above, any reference herein to the Committee
shall mean a reference to the Board.

      1.5   "Company" shall mean OrthAlliance, Inc., a Delaware corporation.

      1.6   "Director" shall mean a member of the Board and any person who is an
advisory, honorary or emeritus director of the Company if such person is
considered a director for the purposes of Section 16 of the Exchange Act, as
determined by reference to such Section 16 and to the rules, regulations,
judicial decisions, and interpretative or "no-action" positions with respect
thereto of the Securities and Exchange Commission, as the same may be in effect
or set forth from time to time.

      1.7   "Disabled Optionee" shall mean an Optionee who suffers a Disability.

      1.8   "Disability" shall mean a physical or mental infirmity which impairs
an Optionee's ability to substantially perform his duties with the Company or a
Subsidiary for a period of 180 consecutive days, as determined by an independent
physician selected by agreement between the Company and the Optionee or, failing
such agreement, selected by two physicians (one of which shall be selected by
the Company and the other by the Optionee).

      1.9   "Eligible Employee" shall mean an employee of the Company who is at
the time of grant not either (i) an Officer of the Company, or (ii) a Director
of the Company.

      1.10  "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended. Any reference herein to a specific section of the Exchange Act shall be
deemed to include a reference to any applicable corresponding provision of
future law.

      1.11  "Exercise Price" shall mean the price at which an Optionee may
purchase a share of Stock under a Stock Option Agreement.

      1.12  "Fair Market Value" on any date shall mean (i) the average closing
sales price of the Stock on such date on the national securities exchange having
the greatest volume of trading in the Stock during the thirty (30) day period
preceding such date or, if such exchange was not open for trading on such date,
the next preceding date on which it was open; (ii) if the Stock is not traded on
any national securities exchange, the average of the closing high bid and low
asked prices of the Stock on the over-the-counter market on the date such value
is to be determined, or in the absence of closing bids on such date, the closing
bids on the next preceding date on which there were bids; or (iii) if the Stock
is not traded on a national securities exchange or the over-the-counter market,
the fair market value as determined in good faith by the Board or the Committee
based on such relevant facts as may be available, including, without limitation,
the price at which recent sales of Stock have been made, the book value of the
Stock and the Company's current and future earnings.

      1.13  "For Cause" termination shall mean the termination of an Optionee's
employment as a result of: (i) any act that constitutes on the part of the
Optionee, fraud, dishonesty, gross malfeasance of duty, or conduct grossly
inappropriate to the Optionee's position of employment; or (ii) the conviction
(from which no appeal may be or is timely taken) of the Optionee of a felony.

      1.14  "Incentive Stock Option" shall mean an option to purchase Stock of
the Company which complies with and is subject to the terms, limitations, and
conditions of Section 422 of the Code and any regulations promulgated with
respect thereto.

      1.15  "Officer" shall mean a person who constitutes an officer of the
Company for the purposes of Section 16 of the Exchange Act, as determined by
reference to such Section 16 and to the rules, regulations, judicial decisions,
and interpretative or "no-action" positions with respect thereto of the
Securities and Exchange Commission, as the same may be in effect or set forth
from time to time.

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      1.16  "Option" shall mean an option, including an Incentive Stock Option,
to purchase Stock granted pursuant to the provisions of Article VI hereof.

      1.17  "Optionee" shall mean a person to whom an Option has been granted
hereunder or his permitted assign.

      1.18  "Plan" shall mean the OrthAlliance, Inc. 2000 Employee Stock Option
Plan, the terms of which are set forth herein.

      1.19  "Purchasable" shall refer to Stock which may be purchased by an
Optionee under the terms of this Plan on or after a certain date specified in an
applicable Stock Option Agreement.

      1.20  "Section 16 Insider" shall mean any person who is subject to the
provisions of Section 16 of the Exchange Act.

      1.21  "Stock" shall mean the Class A Common Stock, $.001 par value per
share, of the Company, subject to applicable provisions of Section 5.2.

      1.22  "Stock Option Agreement" shall mean a written agreement between the
Company and an Optionee under which the Optionee may purchase Stock hereunder,
as provided in Article VI hereof.

      1.23  "Subsidiary" shall mean any corporation in which the Company
directly or indirectly owns stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock of such corporation.

                                   ARTICLE II
                                    THE PLAN

      2.1   Name. This Plan shall be known as the "OrthAlliance, Inc. 2000
Employee Stock Option Plan."

      2.2   Purpose. The purpose of the Plan is to advance the interests of the
Company, its Subsidiaries and its stockholders by affording certain Eligible
Employees of the Company and its Subsidiaries an opportunity to acquire or
increase their proprietary interests in the Company. The objective of the
Options is to promote the growth and profitability of the Company and its
Subsidiaries by providing Optionees with an additional incentive to achieve the
Company's objectives through participation in its success and growth and by
encouraging their continued association with or service to the Company and its
Subsidiaries.

      2.3   Effective Date. The effective date of this Plan is April 7, 2000.

                                   ARTICLE III
                                  PARTICIPANTS

      The class of persons eligible to participate in the Plan shall consist of
all Eligible Employees of the Company or any Subsidiary whose participation in
the Plan the Committee determines to be in the best interests of the Company.

                                   ARTICLE IV
                                 ADMINISTRATION

      4.1   Duties and Powers of the Committee. This Plan shall be administered
by the Committee. The Committee shall select one of its members as its Chairman
and shall hold its meetings at such times and places as it may determine. The
Committee shall keep minutes of its meetings and shall make such rules and
regulations for the conduct of its business as it may deem necessary. The
Committee shall have the power to act by unanimous written consent in lieu of a
meeting, and to meet telephonically. In administering this Plan, the Committee's
actions and determinations shall be binding on all interested parties. The
Committee shall have the power to grant Options in

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accordance with the provisions of this Plan. Subject to the provisions of this
Plan, the Committee shall have the discretion and authority to determine those
persons to whom Options will be granted, the number of shares of Stock subject
to each Option, such other matters as are specified herein, and any other terms
and conditions of a Stock Option Agreement. To the extent not inconsistent with
the provisions of this Plan, the Committee may give an Optionee an election to
surrender an Option in exchange for the grant of a new Option, and shall have
the authority to amend or modify an outstanding Stock Option Agreement or to
waive any provision thereof, provided that the Optionee consents to such action.

      4.2   Interpretation; Rules. Subject to the express provisions of the
Plan, the Committee shall have complete authority to interpret the Plan, to
prescribe, amend and rescind rules and regulations relating to it, to determine
the details and provisions of each Stock Option Agreement, and to make all other
determinations necessary or advisable for the administration of the Plan,
including, without limitation, the amending or altering of the Plan and any
Options granted hereunder as may be required to comply with or to conform to any
federal, state or local laws or regulations.

      4.3   No Liability. Neither any Director nor any member of the Committee
shall be liable to any person for any act or determination made in good faith
with respect to the Plan or any Option granted hereunder.

      4.4   Majority Rule. A majority of the members of the Committee shall
constitute a quorum, and any action taken by a majority at a meeting at which a
quorum is present, or any action taken without a meeting evidenced by a writing
executed by all the members of the Committee, shall constitute the action of the
Committee.

      4.5   Company Assistance. The Company shall supply full and timely
information to the Committee on all matters relating to eligible persons, their
employment, death, retirement, disability, or other termination of employment,
and such other pertinent facts as the Committee may require. The Company shall
furnish the Committee with such clerical and other assistance as is necessary in
the performance of its duties.

                                    ARTICLE V
                         SHARES OF STOCK SUBJECT TO PLAN

      5.1   Limitations. Subject to any antidilution adjustment pursuant to the
provisions of Section 5.2 hereof, the maximum number of shares of Stock that may
be issued hereunder shall be Five Hundred Thousand (500,000). The amount of
Stock subject to the Plan may be increased from time to time in accordance with
Article VIII hereof. Shares subject to an Option may be either authorized and
unissued shares or shares issued and later acquired by the Company. The shares
covered by any unexercised portion of an Option that has terminated for any
reason (except as set forth in the following paragraph) may again be optioned
under this Plan, and such shares shall not be considered as having been optioned
or issued in computing the number of shares of Stock remaining available for
Options hereunder.

      If Options are issued in respect of options to acquire stock of any entity
acquired, by merger or otherwise, by the Company or any Subsidiary, to the
extent that such issuance shall not be inconsistent with the terms, limitations
and conditions of Rule 16b-3 under the Exchange Act, the aggregate number of
shares of Stock for which Options may be granted hereunder shall automatically
be increased by the number of shares subject to the Options so issued.

      5.2   Antidilution.

            (a)   If (i) the outstanding shares of Stock are increased,
decreased or changed into or exchanged for a different number or kind of shares
or other securities of the Company by reason of merger (excluding mergers of
orthodontic entities with and into the Company), consolidation, reorganization,
recapitalization, reclassification, combination or exchange of shares, or stock
split or stock dividend (excluding the conversion of the Company's Class B
Common Stock into shares of Stock as set forth in the Company's Amended and
Restated Certificate of Incorporation), (ii) any spin-off, split-off or other
distribution of assets materially affects the price of the Company's stock, or
(iii) there is any assumption and conversion to this Plan by the Company of an
acquired company's outstanding option grants, then:

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                  (A)   the aggregate number and kind of shares of Stock for
            which Options may be granted hereunder shall be adjusted
            appropriately by the Committee; and

                  (B)   the rights of Optionees (concerning the number of shares
            of Stock subject to Options and the Exercise Price) under
            outstanding Options shall be adjusted appropriately by the
            Committee.

            (b)   If not provided in a Stock Option Agreement to the contrary,
if a Change in Control occurs, the Committee, in its discretion, may provide:

                  (i)   notwithstanding other provisions hereof, that all
            Options granted under this Plan shall become exercisable
            immediately, notwithstanding the provisions of the respective Stock
            Option Agreements regarding exercisability, and that all such
            Options shall terminate ninety (90) days after the Committee gives
            written notice of the immediate right to exercise all such Options
            and of the decision to terminate all Options not exercised within
            such 90-day period, or

                  (ii)  notice to all Optionee's that all Options granted under
            this Plan shall be assumed by the successor corporation or
            substituted on an equitable basis with options issued by such
            successor corporation.

            (c)   If the Company is to be liquidated or dissolved in connection
with a Change in Control, the provisions of Section 5.2(b) shall apply. In all
other instances, the adoption of a plan of dissolution or liquidation of the
Company shall, notwithstanding other provisions hereof, cause all then-remaining
restrictions pertaining to Options under the Plan to lapse, and shall cause
every Option outstanding under the Plan to terminate to the extent not exercised
prior to the adoption of the plan of dissolution or liquidation by the
stockholders; provided, however, that, notwithstanding any other provisions
hereof, the Committee may declare all Options granted under the Plan to be
exercisable at any time on or before the fifth (5th) business day following such
adoption, notwithstanding the provisions of the respective Stock Option
Agreements regarding exercisability.

            (d)   The adjustments described in paragraphs (a) through (c) of
this Section 5.2, and the manner of their application, shall be determined
solely by the Committee, and any such adjustment may provide for the elimination
of fractional share interests. The adjustments required under this Article V
shall apply to any successors of the Company and shall be made regardless of the
number or type of successive events requiring such adjustments.

                                   ARTICLE VI
                                     OPTIONS

      6.1   Types of Options Granted. The Committee may, under this Plan, grant
only Options which do not qualify as Incentive Stock Options. Options may be
granted subject to conditions based on the financial performance of the Company
or any other factor the Committee deems relevant. Neither the Company, nor any
Subsidiary or any other person warrants or otherwise represents that favorable
or desirable tax treatment or characterization will be applicable in respect of
any Option or Stock.

      6.2   Option Grant and Agreement. Each Option granted hereunder shall be
evidenced by minutes of a meeting or the written consent of the Committee and by
a written Stock Option Agreement executed by the Company and the Optionee. The
terms of the Option, including the Option's duration, time or times of exercise
and exercise price, shall be stated in the Stock Option Agreement. Every
Optionee shall be given a copy of the Plan.

      6.3   Exercise Price. The Exercise Price of the Stock subject to each
Option shall be determined by the Committee.

      6.4   Exercise Period. The period for the exercise of each Option granted
hereunder shall be determined by the Committee. In addition, no Option granted
to a Section 16 Insider shall be exercisable prior to the expiration

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of six (6) months from the date such Option is granted, other than in the case
of the death or Disability of the Optionee.

      6.5   Option Exercise.

            (a)   Unless otherwise provided in the Stock Option Agreement or
Section 6.4 hereof, an Option may be exercised at any time or from time to time
during the term of the Option as to any or all full shares which have become
Purchasable under the provisions of the Option, but not at any time as to less
than one hundred (100) shares unless the remaining shares that have become so
Purchasable are less than one hundred (100) shares. The Committee shall have the
authority to prescribe in any Stock Option Agreement that the Option may be
exercised only in accordance with a vesting schedule during the term of the
Option.

            (b)   An Option shall be exercised by (i) delivery to the Company at
its principal office of a written notice of exercise with respect to a specified
number of shares of Stock and (ii) payment to the Company at that office of the
full amount of the Exercise Price for such number of shares in accordance with
Section 6.5(c). If requested by an Optionee, an Option may be exercised with the
involvement of a stockbroker in accordance with the federal margin rules set
forth in Regulation T (in which case the certificates representing the
underlying shares will be delivered by the Company directly to the stockbroker).

            (c)   The Exercise Price is to be paid in full in cash by a
certified or cashier's check payable to the Company upon the exercise of the
Option, and the Company shall not be required to deliver certificates for the
shares purchased until such payment has been made; provided, however, that the
Committee may provide in a Stock Option Agreement (or may otherwise determine in
its sole discretion at the time of exercise) that in lieu of cash, all or any
portion of the Exercise Price may be paid by tendering to the Company shares of
Stock duly endorsed for transfer and owned by the Optionee, or by authorization
to the Company to withhold shares of Stock otherwise issuable upon exercise of
the Option, in each case to be credited against the Exercise Price at the Fair
Market Value of such shares on the date of exercise (however, no fractional
shares may be so transferred, and the Company shall not be obligated to make any
cash payments in consideration of any excess of the aggregate Fair Market Value
of shares transferred over the aggregate Exercise Price); provided further, the
Committee may provide in a Stock Option Agreement (or may otherwise determine in
its sole discretion at the time of exercise) that, in lieu of cash or shares,
full payment may be effected through a broker-dealer sale and remittance
procedure pursuant to which the Optionee (i) shall provide irrevocable written
instructions to a designated brokerage firm to effect the immediate sale of the
purchased shares and remit to the Company, out of the sale proceeds available on
the settlement date, sufficient funds to cover the aggregate Exercise Price
(plus all applicable Federal and State income and employment taxes required to
be withheld by the Company by reason of such purchase) and (ii) shall provide
written directives to the Company to deliver the certificates for the purchased
shares directly to such brokerage firm in order to complete the sale
transaction.

            (d)   In addition to and at the time of payment of the Exercise
Price, the Company may withhold, or require the Optionee to pay to the Company
in cash, the amount of any federal, state and local income, employment or other
withholding taxes which the Committee determines are required to be withheld
under federal, state or local law in connection with the exercise of an Option;
provided, however, the Committee may provide in a Stock Option Agreement (or may
otherwise determine in its sole discretion at the time of exercise) that all or
any portion of such tax obligations may, upon the election of the Optionee, be
paid by tendering to the Company whole shares of Stock duly endorsed for
transfer and owned by the Optionee, or by authorization to the Company to
withhold shares of Stock otherwise issuable upon exercise of the Option, in
either case in that number of shares having a Fair Market Value on the date of
exercise equal to the amount of such taxes thereby being paid, and subject to
such restrictions as to the approval and timing of any such election as the
Committee may from time to time determine to be necessary or appropriate to
satisfy the conditions of the exemption set forth in Rule 16b-3 under the
Exchange Act, if such rule is applicable. To the extent tax withholding is
required at an applicable time with respect to Options or Stock acquired under
this Plan by an Optionee, the Company, applicable Subsidiary or other entity
upon which such withholding obligation arises shall be entitled to withhold from
such Optionee's compensation (derived from this Plan or otherwise) the
applicable amount required to be withheld).

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            (e)   The holder of an Option shall not have any of the rights of a
stockholder with respect to the shares of Stock subject to the Option until such
shares have been issued and transferred to the Optionee upon the exercise of the
Option.

            (f)   Notwithstanding anything to the contrary herein or in a Stock
Option Agreement, a given Option shall not be exercisable to the extent the
exercise thereof would cause the Company to be a reporting company under the
Exchange Act.

      6.6   Nontransferability of Option. No Option shall be transferable by an
Optionee other than by will or the laws of descent and distribution; provided,
however, that no Option shall be transferable prior to stockholder approval of
the Plan by an Optionee who is a Section 16 Insider. During the lifetime of an
Optionee, Options shall be exercisable only by such Optionee (or by such
Optionee's guardian or legal representative, should one be appointed).

      6.7   Termination of Employment or Service. The Committee shall have the
power to specify, with respect to the Options granted to a particular Optionee,
the effect upon such Optionee's right to exercise an Option as a result of
termination of such Optionee's employment or service under various
circumstances, which effect may include immediate or deferred termination of
such Optionee's rights under an Option, or acceleration of the date at which an
Option may be exercised in full.

      6.8   Employment Rights. Nothing in the Plan or in any Stock Option
Agreement shall confer on any person any right to continue in the employ of the
Company or any of its Subsidiaries, or shall interfere in any way with the right
of the Company or any of its Subsidiaries to terminate such person's employment
at any time.

      6.9   Disabled Optionee. In the event of termination of employment because
of the Optionee's becoming a Disabled Optionee, such Optionee (or his or her
legal representative) may exercise an Option within a period ending on the
earlier of (a) the last day of the one (1) year period following the beginning
of such Optionee's Disability or (b) the expiration date of an Option, to the
extent of the number of shares which were Purchasable hereunder at the date of
such termination.

      6.10  Certain Successor Options. To the extent not inconsistent with the
terms, limitations and conditions of Code Section 422 and any regulations
promulgated with respect thereto, an Option issued in respect of an option held
by an employee to acquire stock of any entity acquired, by merger or otherwise,
by the Company (or any Subsidiary of the Company) may contain terms that differ
from those stated in this Article, but solely to the extent necessary to
preserve for any such employee the rights and benefits contained in such
predecessor option, or to satisfy the requirements of Code Section 424(a).

                                   ARTICLE VII
                               STOCK CERTIFICATES

      The Company shall not be required to issue or deliver any certificate for
shares of Stock purchased upon the exercise of any Option granted hereunder or
any portion thereof, prior to fulfillment of all of the following conditions:

            (a)   The admission of such shares to listing on all stock exchanges
on which the Stock is then listed;

            (b)   The completion of any registration or other qualification of
such shares which the Committee shall deem necessary or advisable under any
federal or state law or under the rulings or regulations of the Securities and
Exchange Commission or any other governmental regulatory body;

            (c)   The obtaining of any approval or other clearance from any
federal or state governmental agency or body which the Committee shall determine
to be necessary or advisable; and

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            (d)   The lapse of such reasonable period of time following the
exercise of the Option as the Board from time to time may establish for reasons
of administrative convenience.

Stock certificates issued and delivered to Optionees shall bear such restrictive
legends as the Company shall deem necessary or advisable pursuant to applicable
federal and state securities laws.

                                  ARTICLE VIII
                        TERMINATION AND AMENDMENT OF PLAN

      8.1   Termination and Amendment. Board may at any time terminate the Plan,
and may at any time and from time to time and in any respect amend the Plan;
provided, however, that the Board (unless its actions are approved or ratified
by the stockholders of the Company within twelve (12) months of the date that
the Board amends the Plan) may not amend the Plan to:

            (a)   grant Incentive Stock Options; or

            (b)   include Officers or Directors.

      8.2   Effect on Optionee's Rights. No termination, amendment or
modification of the Plan shall affect adversely an Optionee's rights under a
Stock Option Agreement without the consent of the Optionee or his legal
representative.

                                   ARTICLE IX
                    RELATIONSHIP TO OTHER COMPENSATION PLANS

      The adoption of the Plan shall not affect any other stock option,
incentive, or other compensation plans in effect for the Company or any of its
Subsidiaries; nor shall the adoption of the Plan preclude the Company or any of
its Subsidiaries from establishing any other form of incentive or other
compensation plan for employees of the Company or any of its Subsidiaries.

                                    ARTICLE X
                                  MISCELLANEOUS

      10.1  Replacement or Amended Grants. At the sole discretion of the
Committee, and subject to the terms of the Plan, the Committee may modify
outstanding Options or accept the surrender of outstanding Options and grant new
Options in substitution for them. However, no modification of an Option shall
adversely affect an Optionee's rights under a Stock Option Agreement without the
consent of the Optionee or his legal representative.

      10.2  Plan Binding on Successors. The Plan shall be binding upon the
successors and assigns of the Company.

      10.3  Singular; Plural; Gender. Whenever used herein, nouns in the
singular shall include the plural and the masculine pronoun shall include the
feminine gender and vice versa.

      10.4  Headings Not Part of Plan. Headings of Articles and Sections hereof
are inserted for convenience and reference and do not constitute part of the
Plan.

      10.5  Interpretation. With respect to Section 16 Insiders, transactions
under this Plan are intended to comply with all applicable conditions of Rule
16b-3 or its successors under the Exchange Act. To the extent any provision of
the Plan or action by the Plan administrators fails to so comply, it shall be
deemed void to the extent permitted by law and deemed advisable by the Plan
administrators.

      10.6  Governing Law. This Plan shall be governed by, and construed in
accordance with, the laws of the State of Delaware without regard to conflicts
of laws principles.

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                                                                    EXHIBIT 10.1

                                 ASPENBIO, INC.
                          SECURITIES PURCHASE AGREEMENT

      THIS SECURITIES PURCHASE AGREEMENT (the "Agreement") is made and entered
into as of December 28, 2001, by and among ASPENBIO, INC., a Colorado
corporation (the "Company"), and Cambridge Holdings, Ltd., a Colorado
corporation (the "Purchaser").

                                    RECITALS

      WHEREAS, the Company has authorized the sale and issuance of 1,000,000
shares of its Common Stock (the "Shares") and Warrants to purchase up to 830,000
shares of Common Stock at $1.00 per share (the "Warrants") and the Shares and
the Warrants are collectively referred to as the "Securities";

      WHEREAS, the Purchaser desires to purchase the Securities on the terms and
conditions set forth herein;

      WHEREAS, the Company desires to secure certain consulting services of the
Purchaser in connection with taking the Company public; and

      WHEREAS, the Company desires to issue and sell the Securities to Purchaser
on the terms and conditions set forth herein.

                                    AGREEMENT

      NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises, representations, warranties, and covenants hereinafter set forth and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

      1. AGREEMENT TO SELL AND PURCHASE.

            1.1 AUTHORIZATION OF SECURITIES. On or prior to the First Closing
(as defined in Section 2 below), the Company shall have authorized (a) the sale
and issuance to Purchaser of the Securities and (b) the issuance of such shares
of Common Stock to be issued upon exercise of the Warrants (the "Warrant
Shares"). The Warrants shall be issued to the designees of the Purchaser listed
in Purchaser's Schedule 1.1 and in the forms attached hereto as Exhibits A-1 and
A-2. Such designees shall each execute a Subscription Agreement in the form
attached hereto as Exhibit I prior to receipt of the Warrants.

            1.2 SALE AND PURCHASE. Subject to the terms and conditions hereof,
at the Closings (as hereinafter defined) the Company hereby agrees to issue and
sell to the Purchaser, and the Purchaser agrees to purchase from the Company,
the Securities at an aggregate purchase price of $600,000. As further
consideration for the purchase of the Securities, Purchaser agrees to perform
certain consulting services for the Company as set forth in the Consulting
Agreement

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in the form attached hereto as Exhibit H (the "Consulting Agreement") pursuant
to which the Purchaser may forfeit 330,000 of the Warrants as provided in the
Consulting Agreement.

      2. CLOSING, DELIVERY AND PAYMENT.

            2.1 CLOSING. The first closing of the sale and purchase of the
Securities under this Agreement (the "First Closing") shall take place at 9:00
a.m. on the date hereof, at the offices of Patton Boggs, LLP, 1660 Lincoln
Street, Suite 1900, Denver, CO 80264. The second closing will take place at 9:00
AM at Patton Boggs, LLP on the second business day subsequent to delivery by the
Company to Purchaser of financial statements of the Company consisting of
audited balance sheets as at December 31, 2001 and 2000 and audited statements
of income and cash flow for the year ended December 31, 2001 and for the period
from inception to December 31, 2000 (which shall include an audited balance
sheet and audited statements of income and cash flow for Vitro Diagnostics, Inc.
for the period between January 1, 2000 and August 31, 2000. (the "Second
Closing"). The Company's audited statements shall be prepared by Larry
O'Donnell, C.P.A., and shall be in accordance with generally accepted accounting
principles.

            2.2 DELIVERY AT THE FIRST CLOSING. At the First Closing, subject to
the terms and conditions hereof, the Company will deliver to the Purchaser a
certificate representing the 500,000 Shares to be purchased at the First Closing
by the Purchaser, against payment of $300,000 by certified check, or wire
transfer made payable to the order of the Company, and the parties will execute
and deliver the Related Agreements (as defined below), except for the Warrants
and the Consulting Agreement.

            2.3 DELIVERY AT THE SECOND CLOSING. At the Second Closing, subject
to the terms and conditions hereof, the Company will deliver to the Purchaser a
certificate representing 500,000 Shares and the Warrants to be purchased at the
Second Closing by the Purchaser against payment of $300,000 by certified check,
or wire transfer made payable to the order of the Company and the parties will
execute and deliver the Consulting Agreement.

      3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

            Except as set forth on a Schedule of Exceptions delivered by the
Company to the Purchaser at the Closing specifically identifying the relevant
Section hereof, the Company hereby represents and warrants to Purchaser as of
the date of this Agreement as set forth below.

            3.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Colorado. The Company has all requisite corporate power and
authority to own and operate its properties and assets, to execute and deliver
this Agreement, the Warrant and the Investor Rights Agreement in the form
attached hereto as Exhibit B (the "Investor Rights Agreement"), the Shareholders
Agreement in the form attached hereto as Exhibit C (the "Shareholders
Agreement") and the Consulting Agreement in the form attached hereto as Exhibit
H (the "Consulting Agreement") (collectively, the "Related Agreements"), to
issue and sell the Securities and the Warrant Shares, and to carry out the
provisions of this Agreement and the Related Agreements and to carry on its
business as presently conducted and as presently proposed to be conducted. The
Company is duly qualified and is authorized to do business and

                                       2
<PAGE>
is in good standing as a foreign corporation in all jurisdictions in which the
nature of its activities and of its properties (both owned and leased) makes
such qualification necessary, except for those jurisdictions in which failure to
do so would not have a material adverse effect on the Company or its business.

            3.2 SUBSIDIARIES. Except as provided in the Schedule of Exceptions,
the Company has no Subsidiaries and does not own or control any equity security
or other interest of any other corporation, limited partnership or other
business entity. The Company is not a participant in any joint venture,
partnership or similar arrangement. As used in this Agreement, the term
"Subsidiary" or "Subsidiaries" means any domestic or foreign corporation or
other business organization, whether or not incorporated, of which more than
fifty percent (50%) of either the equity interest in, or the voting control of
such corporation or organization is, directly or indirectly, beneficially owned
by the Company.

            3.3 CAPITALIZATION; VOTING RIGHTS.

                  (a) The authorized capital stock of the Company, immediately
prior to the First Closing, consists of 15,000,000 shares of Common Stock,
8,300,000 shares of which are issued and outstanding.

                  (b) Options to purchase 200,000 shares have been granted and
are currently outstanding (as listed on Exhibit D), and 900,000 shares of Common
Stock are reserved for future issuance to officers, directors, employees and
consultants of the Company.

                  (c) Other than as set forth on Exhibit D, and except as may be
granted pursuant to this Agreement and the Related Agreements, there are no
outstanding options, warrants, rights (including conversion or preemptive rights
and rights of first refusal), proxy or shareholder agreements, or agreements of
any kind for the purchase or acquisition from the Company of any of its
securities.

                  (d) The number and class of the Company's equity securities
issuable upon exercise or conversion of all outstanding options, warrants and
other convertible securities of the Company are as set forth on Exhibit D. The
number of shares issuable upon exercise or conversion of such securities will
not be adjusted as a result of the transactions contemplated by this Agreement
except with respect to the Warrant Shares.

                  (e) All issued and outstanding shares of the Company's Common
Stock (i) have been duly authorized and validly issued to the persons listed on
Exhibit D hereto and are fully paid and nonassessable, and (ii) were issued in
compliance with all applicable state and federal laws concerning the issuance of
securities.

                  (f) The Warrant Shares have been duly and validly reserved for
issuance. When issued in compliance with the provisions of this Agreement, the
Securities and the Warrant Shares will be validly issued, fully paid and
nonassessable, and will be free of any liens or encumbrances; provided, however,
that the Shares and the Warrant Shares may be subject to restrictions on
transfer under state and/or federal securities laws as set forth herein or as
otherwise required by such laws at the time a transfer is proposed.

                                       3
<PAGE>
                  (g) No stock plan, stock purchase, stock option or other
agreement or understanding between the Company and any holder of any equity
securities or rights to purchase equity securities provides for acceleration or
other changes in the vesting provisions or other terms of such agreement or
understanding as the result of any merger, consolidated sale of stock or assets,
change in control or any other transaction(s) by the Company.

            3.4 AUTHORIZATION; BINDING OBLIGATIONS. All corporate action on the
part of the Company, its officers, directors and shareholders necessary for the
authorization of this Agreement and the Related Agreements, the performance of
all obligations of the Company hereunder and thereunder at the Closings and the
authorization, sale, issuance and delivery of the Securities pursuant hereto and
the Warrant Shares has been taken or will be taken prior to the Closing. This
Agreement and the Related Agreements, when executed and delivered, will be valid
and binding obligations of the Company enforceable in accordance with their
terms, except (a) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting
enforcement of creditors' rights and (b) general principles of equity that
restrict the availability of equitable remedies. The sale of the Securities and
the subsequent exercise of the Warrants into Warrant Shares are not and will not
be subject to any preemptive rights or rights of first refusal that have not
been properly waived or complied with.

            3.5 FINANCIAL STATEMENTS. The Company has made available to the
Purchaser (a) its audited balance sheet as at December 31, 2000 and audited
statement of income and cash flow for the period from inception to December 31,
2000, and (b) its unaudited balance sheet as at December 15, 2001 (the
"Statement Date") and unaudited consolidated statement of income and cash flow
for the period ending on the Statement Date (collectively, the "Financial
Statements"), copies of which are attached hereto as Exhibit E. The Financial
Statements, together with the notes thereto, are complete and correct in all
material respects, have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
indicated, except as disclosed therein, and present fairly the financial
condition and position of the Company as of December 31, 2000 and the Statement
Date; provided, however, that the unaudited financial statements have been
prepared in accordance with customary internal bookkeeping practices of the
Company. No verification from any third party has been obtained with respect to
the information contained in the unaudited financial statements.

            3.6 LIABILITIES. To the Company's knowledge, the Company has no
liabilities or obligations of any nature (whether known or unknown and whether
absolute, accrued, contingent or otherwise) except for liabilities or
obligations reflected or reserved against in the Financial Statements, and
except current liabilities incurred in the ordinary course of business
subsequent to the Statement Date which have not been, either in any individual
case or in the aggregate, materially adverse.

            3.7 AGREEMENTS; ACTION.

                  (a) Except for agreements explicitly contemplated hereby,
there are no agreements, understandings or proposed transactions between the
Company and any of its officers, directors, affiliates or any affiliate thereof.

                                       4
<PAGE>
                  (b) There are no agreements, understandings, instruments,
contracts, proposed transactions, judgments, orders, writs or decrees to which
the Company is a party or to its knowledge by which it is bound which may
involve (i) obligations (contingent or otherwise) of, or payments to, the
Company in excess of $25,000 (other than obligations of, or payments to, the
Company arising from purchase or sale agreements entered into in the ordinary
course of business), or (ii) the transfer or license of any patent, copyright,
trade secret or other proprietary right to or from the Company (other than
licenses arising from the purchase of "off the shelf" or other standard
products), or (iii) provisions restricting the development, manufacture or
distribution of the Company's products or services, or (iv) indemnification by
the Company with respect to infringements of proprietary rights (other than
indemnification obligations arising from purchase, sale or license agreements
entered into in the ordinary course of business).

                  (c) The Company has not (i) declared or paid any dividends, or
authorized or made any distribution upon or with respect to any class or series
of its capital stock, (ii) incurred any indebtedness for money borrowed or any
other liabilities (other than with respect to dividend obligations,
distributions, indebtedness and other obligations incurred in the ordinary
course of business or as disclosed in the Financial Statements) individually in
excess of $25,000 or, in the case of indebtedness and/or liabilities
individually less than $25,000, in excess of $100,000 in the aggregate, (iii)
made any loans or advances to any person, other than ordinary advances for
travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its
assets or rights, other than the sale of its inventory in the ordinary course of
business.

                  (d) For the purposes of subsections (b) and (c) above, all
indebtedness, liabilities, agreements, understandings, instruments, contracts
and proposed transactions involving the same person or entity (including persons
or entities the Company has reason to believe are affiliated therewith) shall be
aggregated for the purpose of meeting the individual minimum dollar amounts of
such subsections.

            3.8 OBLIGATIONS TO RELATED PARTIES. There are no obligations of the
Company to officers, directors, shareholders, or employees of the Company other
than (a) for payment of salary for services rendered, (b) reimbursement for
reasonable expenses incurred on behalf of the Company and (c) for other standard
employee benefits made generally available to all employees (including stock
option agreements outstanding under any stock option plan approved by the Board
of Directors of the Company). None of the officers, directors or shareholders of
the Company, or any members of their immediate families, are indebted to the
Company. No officer, director or shareholder, or any member of their immediate
families, is, directly or indirectly, interested in any material contract with
the Company (other than such contracts as relate to any such person's ownership
of capital stock or other securities of the Company). Except as may be disclosed
in the Financial Statements, the Company is not a guarantor or indemnitor of any
indebtedness of any other person, firm or corporation.

            3.9 CHANGES. Since the Statement Date, there has not been to the
Company's knowledge:

                  (a) Any change in the assets, liabilities, financial
condition, prospects or operations of the Company from that reflected in the
Financial Statements, other than changes in the ordinary course of business,
none of which individually or in the aggregate has had or is

                                       5
<PAGE>
reasonably expected to have a material adverse effect on such assets,
liabilities, financial condition, prospects or operations of the Company;

                  (b) Any resignation or termination of any officer, key
employee or group of employees of the Company; and the Company does not know of
the impending resignation or termination of employment of any such officer, key
employee or group of employees;

                  (c) Any material change, except in the ordinary course of
business, in the contingent obligations of the Company by way of guaranty,
endorsement, indemnity, warranty or otherwise;

                  (d) Any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the properties, business or
prospects or financial condition of the Company;

                  (e) Any waiver by the Company of a valuable right or of a
material debt owed to it;

                  (f) Any direct or indirect loans made by the Company to any
shareholder, employee, officer or director of the Company, other than advances
made in the ordinary course of business;

                  (g) Any material change in any compensation arrangement or
agreement with any employee, officer, director or shareholder;

                  (h) Any declaration or payment of any dividend or other
distribution of the assets of the Company;

                  (i) Any labor organization activity related to the Company;

                  (j) Any debt, obligation or liability incurred, assumed or
guaranteed by the Company, except those for immaterial amounts and for current
liabilities incurred in the ordinary course of business;

                  (k) Any sale, assignment or transfer of any patents,
trademarks, copyrights, trade secrets or other intangible assets;

                  (l) Any change in any material agreement to which the Company
is a party or by which it is bound which materially and adversely affects the
business, assets, liabilities, financial condition, operations or prospects of
the Company;

                  (m) Any other event or condition of any character that, either
individually or cumulatively, has materially and adversely affected the
business, assets, liabilities, financial condition, prospects or operations of
the Company; or

                  (n) Any arrangement or commitment by the Company to do any of
the acts described in subsection (a) through (m) above.

                                       6
<PAGE>
            3.10 TITLE TO PROPERTIES AND ASSETS; LIENS, ETC. The Company has
good and marketable title to its properties and assets, including the properties
and assets reflected in the most recent balance sheet included in the Financial
Statements, and good title to its leasehold estates, in each case subject to no
mortgage, pledge, lien, lease, encumbrance or charge, other than (a) those
resulting from taxes which have not yet become delinquent, (b) minor liens and
encumbrances which do not materially detract from the value of the property
subject thereto or materially impair the operations of the Company, and (c)
those that have otherwise arisen in the ordinary course of business. All
facilities, machinery, equipment, fixtures, vehicles and other properties owned,
leased or used by the Company are in good operating condition and repair and are
reasonably fit and usable for the purposes for which they are being used. To the
Company's knowledge, the Company is in compliance with all material terms of
each lease to which it is a party or is otherwise bound.

            3.11 INTELLECTUAL PROPERTY.

                  (a) To the Company's knowledge, the Company and each of its
Subsidiaries owns or possesses adequate licenses or other rights to use all of
the patents, patent applications, trademarks, trademark applications, service
marks, service mark applications, trade names, trade secrets, copyrights,
copyright applications, licenses, domain names, and other intellectual property
(collectively, the "Intellectual Property") necessary for the conduct of its
business as of the date hereof and as presently proposed to be conducted.
Section 3.11 of Schedule of Exceptions sets forth, with respect to each item of
Intellectual Property of the Company registered with any domestic or foreign
governmental agency (i) a brief description of such item of Intellectual
Property, and (ii) the jurisdictions covered by such registration or
application. The Company has not received any communication alleging that the
Company or any of its Subsidiaries has violated, or by conducting its business
as presently proposed to be conducted, would violate any of the Intellectual
Property of any other person or entity. The business and operations of the
Company and its Subsidiaries as of the date hereof and as presently proposed to
be conducted are not materially dependent upon any item or items of Intellectual
Property of any other person or entity.

                  (b) Neither the Company nor any of its Subsidiaries has any
obligation to compensate any person for the use of any Intellectual Property and
has not, other than in the ordinary course of business, granted to any person
any license or right to use such Intellectual Property, whether or not requiring
the payment of royalties. To the Company's knowledge, the Company and each of
its Subsidiaries has taken all actions reasonably necessary to protect its
ownership or rights to use its Intellectual Property. Neither the Company nor
any of its Subsidiaries has assigned, transferred, licensed, pledged,
encumbered, or otherwise taken or failed to take any action with respect to its
Intellectual Property and underlying technology which would be reasonably likely
to have a material adverse effect. To the Company's knowledge, the conduct of
the business of the Company or any of its Subsidiaries as of the date hereof and
as presently proposed to be conducted does not infringe on any Intellectual
Property of any third party. To the Company's knowledge, no third party has
infringed or is infringing on any of the Intellectual Property of the Company or
any of its Subsidiaries. To the Company's knowledge, no technical information
developed by and belonging to the Company or any of its Subsidiaries has been
disclosed to a third party who has not entered into an agreement to maintain the
confidentiality of such technical information.

                                       7
<PAGE>
                  (c) The Company does not know of any employee or consultant of
the Company or any of its Subsidiaries that is obligated under any agreement
(including licenses, covenants or commitments of any nature) or subject to any
judgment, decree or order of any court or administrative agency, or any other
restriction that would interfere with the use of his or her best efforts to
carry out his or her duties for the Company or any of its Subsidiaries or to
promote the interests of the Company or such Subsidiary or that would conflict
with the business of the Company or any of its Subsidiaries as currently
conducted and as proposed to be conducted. To the Company's knowledge, the
conduct of the business of the Company or any of its Subsidiaries by the
employees and contractors of the Company or any of its Subsidiaries, as
currently conducted and as presently proposed to be conducted, will not conflict
with or result in a breach of the terms, conditions or provisions of, or
constitute a default under, any contract, covenant or instrument under which any
of such employees or contractors or the Company or any such Subsidiary is now
obligated. The Company does not believe it is or will be necessary to utilize
any inventions of any employees of the Company or any of its Subsidiaries (or
persons the Company or any of its Subsidiaries currently intends to hire) made
prior to their employment by the Company or such Subsidiary.

            3.12 COMPLIANCE WITH OTHER INSTRUMENTS. To the Company's knowledge,
the Company is not in material violation or default of any term of its Articles
or Bylaws, or of any provision of any mortgage, indenture, contract, agreement,
instrument or contract to which it is party or by which it is bound or of any
judgment, decree, order, writ. To the Company's knowledge, the execution,
delivery, and performance of and compliance with this Agreement, and the Related
Agreements, and the issuance and sale of the Securities pursuant hereto and of
the Warrant Shares, will not, with or without the passage of time or giving of
notice, result in any such material violation, or be in conflict with or
constitute a material default under any such term, or result in the creation of
any mortgage, pledge, lien, encumbrance or charge upon any of the properties or
assets of the Company or the suspension, revocation, impairment, forfeiture or
nonrenewal of any permit, license, authorization or approval applicable to the
Company, its business or operations or any of its assets or properties. To the
Company's knowledge, the Company has avoided every condition, and has not
performed any act, the occurrence of which would result in the Company's loss of
any right granted under any license, distribution agreement or other agreement
required to be disclosed on the Schedule of Exceptions.

            3.13 LITIGATION. There is no action, suit, proceeding or
investigation pending or, to the Company's knowledge, currently threatened
against the Company that questions the validity of this Agreement, or the
Related Agreements or the right of the Company to enter into any of such
agreements, or to consummate the transactions contemplated hereby or thereby, or
which would reasonably be expected to result, either individually or in the
aggregate, in any material adverse change in the assets, condition, affairs or
prospects of the Company, financially or otherwise, or any change in the current
equity ownership of the Company, nor does the Company know of any basis for any
of the foregoing. The foregoing includes, without limitation, actions pending
or, to the Company's knowledge, threatened involving the prior employment of any
of the Company's employees, their use in connection with the Company's business
of any information or techniques allegedly proprietary to any of their former
employers, or their obligations under any agreements with prior employers. The
Company is not a party or subject to the provisions of any order, writ,
injunction, judgment or decree of any court or

                                       8
<PAGE>
government agency or instrumentality. There is no action, suit, proceeding or
investigation by the Company currently pending or which the Company intends to
initiate.

            3.14 TAX RETURNS AND PAYMENTS. The Company has timely filed all tax
returns (federal, state and local) required to be filed by it. All taxes shown
to be due and payable on such returns, any assessments imposed, and to the
Company's knowledge all other taxes due and payable by the Company on or before
the Closing, have been paid or will be paid prior to the time they become
delinquent. The Company has not been advised (a) that any of its returns,
federal, state or other, have been or are being audited as of the date hereof,
or (b) of any deficiency in assessment or proposed judgment to its federal,
state or other taxes. The Company has no knowledge of any liability of any tax
to be imposed upon its properties or assets as of the date of this Agreement
that is not adequately provided for.

            3.15 EMPLOYEES. To the Company's knowledge, the Company has no
collective bargaining agreements with any of its employees. There is no labor
union organizing activity pending or, to the Company's knowledge, threatened
with respect to the Company. To the Company's knowledge, no employee of the
Company, nor any consultant with whom the Company has contracted, is in
violation of any material term of any employment contract, proprietary
information agreement or any other agreement relating to the right of any such
individual to be employed by, or to contract with, the Company because of the
nature of the business to be conducted by the Company; and to the Company's
knowledge the continued employment by the Company of its present employees, and
the performance of the Company's contracts with its independent contractors,
will not result in any such violation. The Company has not received any notice
alleging that any such violation has occurred. Each of the employees of and
consultants to the Company and each of its Subsidiaries has executed and
delivered to the Company a nondisclosure and inventions agreement substantially
in the form of Exhibit F attached hereto. No employee of the Company has been
granted the right to continued employment by the Company or to any material
compensation following termination of employment with the Company. The Company
does not know of any officer, key employee or group of employees that intends to
terminate his, her or their employment with the Company, nor does the Company
have a present intention to terminate the employment of any officer, key
employee or group of employees.

            3.16 OBLIGATIONS OF MANAGEMENT. Each officer and key employee of the
Company is currently devoting substantially all of his or her business time to
the conduct of the business of the Company. The Company does not know of any
officer or key employee of the Company that is planning to work less than full
time at the Company in the future. No officer or key employee is currently
working or, to the Company's knowledge, plans to work for a competitive
enterprise, whether or not such officer or key employee is or will be
compensated by such enterprise.

            3.17 REGISTRATION RIGHTS AND VOTING RIGHTS. Except as set forth in
the Investor Rights Agreement and Exhibits hereto, the Company is presently not
under any obligation, and has not granted any rights, to register any of the
Company's presently outstanding securities or any of its securities that may
hereafter be issued. To the Company's knowledge, except as contemplated in the
Shareholders Agreement, no shareholder of the

                                       9
<PAGE>
Company has entered into any agreement with respect to the voting of equity
securities of the Company.

            3.18 COMPLIANCE WITH LAWS; PERMITS. To the Company's knowledge, the
Company is not in violation of any applicable statute, rule, regulation, order
or restriction of any domestic or foreign government or any instrumentality or
agency thereof in respect of the conduct of its business or the ownership of its
properties which violation would materially and adversely affect the business,
assets, liabilities, financial condition, operations or prospects of the
Company. To the Company's knowledge, no governmental orders, permissions,
consents, approvals or authorizations are required to be obtained and no
registrations or declarations are required to be filed in connection with the
execution and delivery of this Agreement and the issuance of the Securities or
the Warrant Shares, except such as has been duly and validly obtained or filed,
or with respect to any filings that must be made after the Closing, as will be
filed in a timely manner. To the Company's knowledge, the Company has all
franchises, permits, licenses and any similar authority necessary for the
conduct of its business as now being conducted by it, the lack of which could
materially and adversely affect the business, properties, prospects or financial
condition of the Company and believes it can obtain, without undue burden or
expense, any similar authority for the conduct of its business as planned to be
conducted.

            3.19 ENVIRONMENTAL AND SAFETY LAWS.

                  (a) To the Company's knowledge, the Company is not in
violation of any applicable statute, law or regulation relating to occupational
health and safety, and to its knowledge, no material expenditures are or will be
required in order to comply with any such existing statute, law or regulation.

                  (b) To the Company's knowledge, neither the Company nor any
Subsidiary has caused or allowed, or contracted with any party for, the
generation, use, transportation, treatment, storage or disposal of any Hazardous
Substances (as defined below) in connection with the operation of its business
or otherwise in a material violation of any applicable Environmental Laws. To
the Company's knowledge, the operation of the business and the ownership, lease
or occupation of real property (the "Premises") by the Company and its
Subsidiaries are in material compliance with all applicable Environmental Laws
(as defined below) and orders or directives of any governmental authorities
having jurisdiction under such Environmental Laws, including, without
limitation, any Environmental Laws or orders or directives with respect to any
cleanup or remediation of any release or threat of release of Hazardous
Substances. Neither the Company nor any Subsidiary has received any citation,
directive, letter or other communication, written or oral, or any notice of any
proceeding, claim or lawsuit, from any person arising out of the ownership or
occupation of the Premises, or the conduct of its operations, and the Company
does not know of any basis therefor. To the Company's knowledge, the Company and
each of its Subsidiaries has obtained and is maintaining in full force and
effect all necessary permits, licenses and approvals required by all
Environmental Laws applicable to the Premises and the business operations
conducted thereon, and is in compliance with all such permits, licenses and
approvals. To the Company's knowledge, neither the Company nor any Subsidiary
has caused or allowed a release, or a threat of release, of any Hazardous
Substance unto, at or near the Premises, and, to the Company's

                                       10
<PAGE>
knowledge, neither the Premises nor any property at or near the Premises has
ever been subject to a release, or a threat of release, of any Hazardous
Substance. For the purposes of this Agreement, the term "Environmental Laws"
shall mean any Federal, state or local law or ordinance or regulation pertaining
to the protection of human health or the environment, including, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. Sections 9601, et seq. For purposes of this Agreement, the term
"Hazardous Substances" shall include oil and petroleum products, asbestos,
polychlorinated biphenyls, urea formaldehyde and any other materials classified
as hazardous or toxic under any Environmental Laws.

            3.20 FULL DISCLOSURE. The Company has provided the Purchaser with
all information requested by the Purchaser in connection with its decision to
purchase the Securities, including all information the Company believes is
reasonably necessary to make such investment decision. Neither this Agreement,
the exhibits hereto, the Related Agreements nor any other document delivered by
the Company to Purchaser or its attorneys or agents in connection herewith or
therewith or with the transactions contemplated hereby or thereby, contain any
untrue statement of a material fact nor omit to state a material fact necessary
in order to make the statements contained herein or therein not misleading. To
the Company's knowledge, there are no facts which (individually or in the
aggregate) materially adversely affect the business, assets, liabilities,
financial condition, prospects or operations of the Company that have not been
set forth in this Agreement, the exhibits hereto, the Related Agreements or in
other documents delivered to Purchaser or their attorneys or agents in
connection herewith.

            3.21 FOREIGN CORRUPT PRACTICES ACT. To the Company's knowledge,
neither the Company nor any of its Subsidiaries has taken any action which would
cause it to be in material violation of the Foreign Corrupt Practices Act of
1977, as amended, or any rules or regulations thereunder. To the Company's
knowledge, there is not now, and there has never been, any employment by the
Company or any of its subsidiaries of, or beneficial ownership in the Company or
any of its subsidiaries by, any governmental or political official in any
country in the world.

            3.22 MINUTE BOOKS. The minute books of the Company made available to
the Purchaser contain a complete summary of all meetings of directors and
shareholders since the time of incorporation.

            3.23 INSURANCE. The Company has general commercial, fire, casualty
and workers' compensation insurance policies with coverage customary for
companies similarly situated to the Company.

      4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.

                                       11
<PAGE>
            Except as set forth on a Schedule of Exceptions delivered by the
Purchaser to the Company at the Closing specifically identifying the relevant
Section hereof, the Purchaser hereby represents and warrants to the Company as
follows (such representations and warranties do not lessen or obviate the
representations and warranties of the Company set forth in this Agreement):

            4.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Purchaser is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Colorado. The Purchaser is duly qualified and is authorized
to do business and is in good standing as a foreign corporation in all
jurisdictions in which the nature of its activities and of its properties (both
owned and leased) makes such qualification necessary, except for those
jurisdictions in which failure to do so would not have a material adverse effect
on the Purchaser or its business.

            4.2 REQUISITE POWER AND AUTHORITY. Purchaser has all necessary power
and authority under all applicable provisions of law to execute and deliver this
Agreement and the Related Agreements and to carry out their provisions. All
action on Purchaser's part required for the lawful execution and delivery of
this Agreement and the Related Agreements have been or will be effectively taken
prior to the Closing. Upon their execution and delivery, this Agreement and the
Related Agreements will be valid and binding obligations of Purchaser,
enforceable in accordance with their terms, except (a) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application affecting enforcement of creditors' rights and (b) as limited by
general principles of equity that restrict the availability of equitable
remedies

            4.3 LITIGATION. There is no action, suit, proceeding or
investigation pending or, to the Purchaser's knowledge, currently threatened
against the Purchaser that questions the validity of this Agreement, or the
Related Agreements or the right of the Purchaser to enter into any of such
agreements, or to consummate the transactions contemplated hereby or thereby, or
which would reasonably be expected to result, either individually or in the
aggregate, in any material adverse change in the assets, condition, affairs or
prospects of the Purchaser, financially or otherwise, or any change in the
current equity ownership of the Purchaser, nor does the Purchaser know of any
basis for any of the foregoing. Purchaser is not a party or subject to the
provisions of any order, writ, injunction, judgment or decree of any court or
government agency or instrumentality. Neither the Purchaser, its officers,
directors or any shareholders holding more than 5% of the issued and outstanding
shares of the Purchaser have been subject to action, suit, order, procedure or,
to the knowledge of Purchaser, investigation by the U.S. Securities and Exchange
Commission ("SEC"), the National Association of Securities Dealers, any state
securities commission or other regulatory body. There is no action, suit,
proceeding or investigation by the Purchaser currently pending or which the
Purchaser intends to initiate.

            4.4 TAX RETURNS AND PAYMENTS. The Purchaser has timely filed all tax
returns (federal, state and local) required to be filed by it. All taxes shown
to be due and payable on such returns, any assessments imposed, and to the
Purchaser's knowledge all other taxes due and payable by the Purchaser on or
before the Closing, have been paid or will be paid prior to the time they become
delinquent. The Purchaser has not been advised (a) that any of its returns,
federal, state or other, have been or are being audited as of the date hereof,
or (b) of any

                                       12
<PAGE>
deficiency in assessment or proposed judgment to its federal, state or other
taxes. The Purchaser has no knowledge of any liability of any tax to be imposed
upon its properties or assets as of the date of this Agreement that is not
adequately provided for.

            4.5 FULL DISCLOSURE. The Purchaser has provided the Company with all
information requested by the Company in connection with sale of the Securities,
including all information the Purchaser believes is reasonably necessary to make
such a decision. Neither this Agreement, the exhibits hereto, the Related
Agreements nor any other document delivered by the Purchaser to Company or its
attorneys or agents in connection herewith or therewith or with the transactions
contemplated hereby or thereby, contain any untrue statement of a material fact
nor omit to state a material fact necessary in order to make the statements
contained herein or therein not misleading. To the Purchaser's knowledge, there
are no facts which (individually or in the aggregate) materially adversely
affect the consummation of the transactions contemplated herein that have not
been set forth in this Agreement, the exhibits hereto, the Related Agreements or
in other documents delivered to Company or their attorneys or agents in
connection herewith.

            4.6 INVESTMENT REPRESENTATIONS. Purchaser understands that neither
the Securities nor the Warrant Shares have been registered under the Securities
Act. Purchaser also understands that the Securities are being offered and sold
pursuant to an exemption from registration contained in the Securities Act based
in part upon Purchaser's representations contained in the Agreement. Purchaser
hereby represents and warrants as follows:

                  (a) INVESTMENT EXPERIENCE. Purchaser has substantial
experience in evaluating and investing in private placement transactions of
securities in companies similar to the Company so that it is capable of
evaluating the merits and risks of its investment in the Company and has the
capacity to protect its own interests.

                  (b) ACQUISITION FOR OWN ACCOUNT. Purchaser is acquiring the
Securities and the Warrant Shares for Purchaser's own account for investment
only, and not with a view towards their distribution.

                  (c) PURCHASER CAN PROTECT ITS INTEREST. Purchaser represents
that by reason of its, or of its management's, business or financial experience,
Purchaser has the capacity to protect its own interests in connection with the
transactions contemplated in this Agreement, and the Related Agreements.
Further, Purchaser is aware of no publication of any advertisement in connection
with the transactions contemplated in the Agreement.

                  (d) COMPANY INFORMATION. Purchaser has had an opportunity to
discuss the Company's business, management and financial affairs with directors,
officers and management of the Company. Purchaser has also had the opportunity
to ask questions of and receive answers from, the Company and its management
regarding the terms and conditions of this investment.

                  (e) LIQUIDITY. Purchaser acknowledges and agrees that the
Securities, and, if issued, the Warrant Shares must be held indefinitely unless
they are subsequently registered under the Securities Act or an exemption from
such registration is available.

                                       13
<PAGE>
                  (f) RESIDENCE. The office of the Purchaser in which its
investment decision was made is located at the address of the Purchaser set
forth on the signature page hereof.

            4.7 TRANSFER RESTRICTIONS. The Purchaser acknowledges and agrees
that the Securities and, if issued, the Warrant Shares are subject to
restrictions on transfer pursuant to the Securities Act and applicable
securities laws.

      5. CONDITIONS TO CLOSING.

            5.1 CONDITIONS TO PURCHASER'S OBLIGATIONS AT THE CLOSING.
Purchaser's obligations to purchase the Securities at each of the Closings are
subject to the satisfaction, at or prior to the date for each of the Closings,
of the following conditions:

                  (a) REPRESENTATIONS AND WARRANTIES TRUE; PERFORMANCE OF
OBLIGATIONS. The representations and warranties made by the Company in Section 3
hereof shall be true and correct as of the Closing Date with the same force and
effect as if they had been made as of the Closing Date, and the Company shall
have performed all obligations and conditions herein required to be performed or
observed by it on or prior to the Closing.

                  (b) CONSENTS, PERMITS, AND WAIVERS. The Company shall have
obtained any and all consents, permits and waivers necessary or appropriate for
consummation of the transactions contemplated by the Agreement and the Related
Agreements (except for such as may be properly obtained subsequent to the
Closing).

                  (c) CORPORATE DOCUMENTS. The Company shall have delivered to
Purchaser or their counsel, copies of all corporate documents of the Company as
Purchaser shall reasonably request.

                  (d) RESERVATION OF WARRANT SHARES. The Warrant Shares issuable
upon conversion of the Shares shall have been duly authorized and reserved for
issuance upon such conversion.

                  (e) SECRETARY'S CERTIFICATE. The Purchaser shall have received
from the Company's Secretary, a certificate having attached thereto (i) the
Company's Articles of Incorporation, as amended, as in effect at the time of the
Closing, (ii) the Company's Bylaws as in effect at the time of the Closing,
(iii) resolutions approved by the Board of Directors authorizing the
transactions contemplated hereby, and (iv) good standing certificates with
respect to the Company from the Secretary of State of Colorado and any other
jurisdiction in which the Company is qualified to do business, dated a recent
date before the Closing.

                  (f) INVESTOR RIGHTS AGREEMENT. The Investor Rights Agreement
substantially in the form attached hereto as Exhibit B shall have been executed
and delivered by the parties thereto.

                  (g) SHAREHOLDERS AGREEMENT. The Shareholders Agreement
substantially in the form attached hereto as Exhibit C shall have been executed
and delivered by the parties thereto.

                                       14
<PAGE>
                  (h) PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings in connection with the transactions contemplated at the Closing
hereby and all documents and instruments incident to such transactions shall be
reasonably satisfactory in substance and form to the Purchaser and their special
counsel, and the Purchaser and their special counsel shall have received all
such counterpart originals or certified or other copies of such documents as
they may reasonably request.

            5.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The Company's
obligation to issue and sell the Shares at each Closing is subject to the
satisfaction, on or prior to such Closing, of the following conditions:

                  (a) REPRESENTATIONS AND WARRANTIES TRUE. The representations
and warranties in Section 4 made by the Purchaser shall be true and correct at
the date of each of the Closings, with the same force and effect as if they had
been made on and as of said date.

                  (b) PERFORMANCE OF OBLIGATIONS. The Purchaser shall have
performed and complied with all agreements and conditions herein required to be
performed or complied with by the Purchaser on or before the Closing.

                  (c) INVESTOR RIGHTS AGREEMENT. The Investor Rights Agreement
substantially in the form attached hereto as Exhibit B shall have been executed
and delivered by the Purchaser.

                  (d) CONSENTS, PERMITS, AND WAIVERS. The Company shall have
obtained any and all consents, permits and waivers necessary or appropriate for
consummation of the transactions contemplated by the Agreement and the Related
Agreements (except for such as may be properly obtained subsequent to the
Closing).

                  (e) SECRETARY'S CERTIFICATE. The Company shall have received
from the Purchaser's Secretary, a certificate having attached thereto (i)
resolutions approved by the Board of Directors authorizing the transactions
contemplated hereby, and (ii) good standing certificates with respect to the
Purchaser from the Secretary of State of Colorado.

                  (f) CONFIDENTIALITY. The Confidentiality and Non-disclosure
Agreement substantially in the form attached hereto as Exhibit G shall have been
executed and delivered by the Purchaser.

                  (g) CONSULTING AGREEMENT. The Consulting Agreement
substantially in the form attached hereto as Exhibit H shall have been executed
and delivered by the parties thereto.

      6. MISCELLANEOUS.

            6.1 GOVERNING LAW. This Agreement shall be governed in all respects
by the laws of the State of Colorado.

            6.2 SURVIVAL. The representations, warranties, covenants and
agreements made herein shall survive any investigation made by the Purchaser and
the closing of the transactions

                                       15
<PAGE>
contemplated hereby. All statements as to factual matters contained in any
certificate or other instrument delivered by or on behalf of the Company
pursuant hereto in connection with the transactions contemplated hereby shall be
deemed to be representations and warranties by the Company hereunder solely as
of the date of such certificate or instrument.

            6.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto and shall inure to the benefit of and be enforceable by each
person who shall be a holder of the Securities from time to time.

            6.4 ENTIRE AGREEMENT. This Agreement, the exhibits and schedules
hereto, the Related Agreements and the other documents delivered pursuant hereto
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof and no party shall be liable or bound to any
other in any manner by any representations, warranties, covenants and agreements
except as specifically set forth herein and therein.

            6.5 SEVERABILITY. In case any provision of the Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

            6.6 AMENDMENT AND WAIVER.

                  (a) This Agreement may be amended or modified only upon the
written agreement of the Company and the Purchaser.

                  (b) The obligations of the Company and the Purchaser under the
Agreement may be waived only written consent of the other party but any waiver
or failure to insist upon strict compliance with such obligations shall not
operate as a waiver of, or estoppel with respect to, any subsequent failure of
compliance.

            6.7 DELAYS OR OMISSIONS. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any party, upon any breach,
default or noncompliance by another party under this Agreement or the Related
Agreements, shall impair any such right, power or remedy, nor shall it be
construed to be a waiver of any such breach, default or noncompliance, or any
acquiescence therein, or of or in any similar breach, default or noncompliance
thereafter occurring. It is further agreed that any waiver, permit, consent or
approval of any kind or character on the Purchaser's part of any breach, default
or noncompliance under this Agreement, the Related Agreements or any waiver on
such party's part of any provisions or conditions of the Agreement or the
Related Agreements must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement or the Related Agreements, by law, or otherwise afforded to any party,
shall be cumulative and not alternative.

            6.8 NOTICES. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the
party to be notified, (b) when sent by confirmed facsimile if sent during normal
business hours of the recipient, if not, then on the next business day, (c) five
(5) business days after having been sent by registered or certified mail, return
receipt requested, postage prepaid, or (d) one (1) business day after deposit
with a

                                       16
<PAGE>
nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent to the Company
and to the Purchaser at their respective addresses as set forth on the signature
page hereof or at such other address as the Company or such Purchaser may
designate by ten (10) days advance written notice to the other party hereto.

            6.9 EXPENSES. Each party will pay its own legal, accounting and
other expenses incurred by such party or on its own behalf in connection with
this Agreement and the Related Agreements.

            6.10 ATTORNEYS' FEES. In the event that any suit or action is
instituted to enforce any provision in this Agreement, the prevailing party in
such dispute shall be entitled to recover from the losing party all fees, costs
and expenses of enforcing any right of such prevailing party under or with
respect to this Agreement, including without limitation, such reasonable fees
and expenses of attorneys and accountants, which shall include, without
limitation, all fees, costs and expenses of appeals.

            6.11 TITLES AND SUBTITLES. The titles of the sections and
subsections of the Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.

            6.12 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

            6.13 BROKER'S FEES. Each party hereto represents and warrants that
no agent, broker, investment banker, person or firm acting on behalf of or under
the authority of such party hereto is or will be entitled to any broker's or
finder's fee or any other commission directly or indirectly in connection with
the transactions contemplated herein. Each party hereto further agrees to
indemnify each other party for any claims, losses or expenses incurred by such
other party as a result of the representation in this Section 6.13 being untrue.

            6.14 INDEMNIFICATION. Each party hereto agrees to indemnify and hold
harmless the other party, its affiliates, directors, officers, agents and
representatives as follows:

                  (a) INDEMNIFICATION FOR CLAIMS. As used herein, the term
"Claims" refers to any losses, damages, liabilities, or claims including costs
or expenses (including but not limited to attorneys' fees and other expenses of
investigation in defense of any such claims) which arise as a result of any
breach or violation of the covenants, agreements, warrants, or representations
contained in this Agreement or the Related Agreements. Any party who has
breached or violated any covenant, agreement, warranty, or representation giving
rise to a Claim shall be referred to as an "Indemnifying Party" and any party
who has suffered or is threatened with suffering losses in connection with such
a Claim shall be referred to as an "Indemnified Party." The Indemnifying Party
will be obligated to indemnify the Indemnified party with respect to any Claim
occasioned by a breach or violation of this Agreement or the Related Agreements
on the part of the Indemnifying Party.

                                       17
<PAGE>
                  (b) NOTICE. Any Indemnified Party shall promptly advise any
Indemnifying Party in writing of the existence of any Claim caused or permitted
by such Indemnifying Party as soon as feasible and in no event later than ten
days after the Indemnified Party becomes aware of such actual or potential
Claim. Thereafter, if the Indemnifying Party acknowledges its obligation in
writing, the Indemnified Party will afford the Indemnifying Party a reasonable
opportunity to undertake the defense, settlement, or other resolution of the
Claim, and the Indemnified Party shall cooperate fully with the Indemnifying
Party in resolving such matter. If the Indemnifying Party fails or refuses to
acknowledge its liability or to undertake such defense, settlement, or other
resolution of such Claim, then the Indemnified Party may itself defend, settle,
or otherwise resolve the Claim, and the Indemnifying Party shall be solely
responsible for all costs incurred by the Indemnified Party in connection
therewith.

            6.15 USE OF PROCEEDS. The proceeds from the sale of the Securities
shall be used by the Company for research and development and for general
corporate purposes.

            6.16 KNOWLEDGE. Whenever a statement of any party to this Agreement
is qualified by that party's "knowledge", "knowledge" means the actual knowledge
of the person making such statement at the time or times that such statement is
made without any requirement for further inquiry. If the statement is made by
the Company, such knowledge shall include the actual knowledge of the Company's
officers and directors; otherwise, the actual knowledge of a person shall not be
imputed to any other person.

            6.17 PRONOUNS. All pronouns contained herein, and any variations
thereof, shall be deemed to refer to the masculine, feminine or neutral,
singular or plural, as to the identity of the parties hereto may require.

                            [SIGNATURE PAGE FOLLOWS]

                                       18
<PAGE>
            IN WITNESS WHEREOF, the parties hereto have executed the SECURITIES
PURCHASE AGREEMENT as of the date set forth in the first paragraph hereof.

COMPANY:                                      PURCHASER:

ASPENBIO, INC.                                CAMBRIDGE HOLDINGS, LTD.

By:___________________________________        By:_______________________________
   Roger Hurst, President                        Gregory Pusey, President

Address: 8100 Southpark Way, Bldg. B-1           106 S. University Blvd. Unit 14
         Littleton, CO  80120                    Denver, CO  80209

                          SECURITIES PURCHASE AGREEMENT
                                 SIGNATURE PAGE
<PAGE>
                                LIST OF EXHIBITS

Warrants                                                            Exhibit A

Investor Rights Agreement                                           Exhibit B

Shareholders Agreement                                              Exhibit C

List of Shareholders and Optionholders                              Exhibit D

Financial Statements                                                Exhibit E

Proprietary Information and Inventions Agreement                    Exhibit F

Confidentiality and Non-disclosure Agreement                        Exhibit G

Consulting Agreement                                                Exhibit H

Subscription Agreement                                              Exhibit I

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