EMPLOYMENT AGREEMENT

          AGREEMENT  is  effective  as of the  20th day of  January  2004 by and
between  CALYPTE  BIOMEDICAL  CORPORATION,  having a place of  business  at 1265
Harbor Bay Parkway,  Alameda,  CA 94502 (hereinafter  referred to as "EMPLOYER")
and J. RICHARD GEORGE,  residing at 9250 Mississippi  Run,  Brooksville FL 34613
(hereinafter referred to as "EMPLOYEE").

                              W I T N E S S E T H:
                               - - - - - - - - - -

         WHEREAS,  the  EMPLOYER is engaged in the  business of  developing  and
marketing    urine-based    diagnostic   products   and   services   for   Human
Immunodeficiency Virus (HIV-1); and

         WHEREAS,  the EMPLOYER is desirous of employing EMPLOYEE,  and EMPLOYEE
wishes to be employed by EMPLOYER in  accordance  with the terms and  conditions
set forth in this Agreement.

               NOW,  THEREFORE,  IN CONSIDERATION OF THE MUTUAL
               COVENANTS  AND   PROMISES  AND  OTHER  GOOD  AND
               VALUABLE  CONSIDERATION,  THE  RECEIPT  OF WHICH
               IS  HEREBY  ACKNOWLEDGED, IT  IS MUTUALLY AGREED
               AS FOLLOWS:

         1.  EMPLOYMENT  DUTIES AND TERM:  EMPLOYER and EMPLOYEE  agree to enter
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into an Employment  Agreement,  and the within Employment Agreement is effective
as of the date first written above. The EMPLOYER does hereby employ,  engage and
hire the EMPLOYEE as  President  and Chief  Executive  Officer of EMPLOYER for a
period of three (3) years  commencing  January 20, 2004 and terminating  January
19, 2007. The duties of EMPLOYEE shall include, but not be limited to, acting as
President  and Chief  Executive  Officer  of  EMPLOYER.  EMPLOYEE  will  perform
services  on behalf of  EMPLOYER  with  respect to the  management  and  general
supervision of the business of EMPLOYER.

         2. GOOD FAITH PERFORMANCE OF DUTIES:  The EMPLOYEE agrees that he will,
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at  all  times,  faithfully,  industriously,  and to the  best  of his  ability,
experience  and  talent,  perform  all of the duties that may be required of and
from him, pursuant to the expressed and implicit term hereof.

         3. COMPENSATION:  EMPLOYER shall pay to the EMPLOYEE,  and the EMPLOYEE
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agrees to accept from the EMPLOYER,  in full payment for the

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EMPLOYEE's services  hereunder,  compensation at the rate of $250,000 per annum.
EMPLOYEE will be paid bi weekly during the term of the within Agreement.

                                    In addition,  subject to the approval of the
Company's 2004 Incentive Plan by its stockholders,  EMPLOYER agrees to  award to
EMPLOYEE  5,000,000 stock options to purchase  5,000,000  shares of common stock
pursuant to the Company's  2004  Incentive Plan for a term of 10 years from date
of grant, which date shall be on or as soon as reasonably  practicable after the
date the Company's  stockholders  shall  approve the 2004  Incentive  Plan.  The
exercise price and the vesting schedule of the options shall be as determined by
the Company's  Compensation  Committee and consistent  with other 2004 grants to
executive officers and key employees.

                                    In  addition,  EMPLOYER  agrees to reimburse
EMPLOYEE for all verifiable expenses incurred by EMPLOYEE during the term of his
employment.  EMPLOYEE agrees to provide adequate written documentation as may be
required with respect to said expenses.

         4.  VACATION:  Paid vacation  (taken  consecutively  or in segments) in
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accordance with the EMPLOYER's policies generally applicable to other executives
of the  Company  from  time to  time,  taken  at  such  times  as is  reasonably
consistent  with  proper  performance  by  Employee  of  Employee's  duties  and
responsibilities hereunder.

         5.  TERMINATION  WITHOUT CAUSE OR CHANGE IN CONTROL:  In the event that
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the Employment  Agreement is terminated by EMPLOYER  without cause,  or EMPLOYER
sells an amount of its  outstanding  and  issued  common  stock to any entity or
third  party  which  results in a change of control  of  EMPLOYER,  then in such
event,  all stock options  granted to EMPLOYEE in addition to options granted as
per Paragraph "3" of this Agreement will be immediately vested in EMPLOYEE,  and
all payments due to EMPLOYEE for the full term of the  Agreement  will be due to
EMPLOYEE.

         6.  DEDICATION OF TIME:  EMPLOYEE shall devote all of his working time,
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attention,  knowledge  and skill  solely and  exclusively  to the  business  and
interest of the EMPLOYER. The EMPLOYEE expressly agrees that he will not, during
the term hereof or for one (1) year from the termination of this  Agreement,  be
involved directly or indirectly,  in any form,  fashion or manner, as a partner,
officer, director,  stockholder (owning in excess of 4.9%), advisor,  consultant
or employee in any other  business  similar to or in any way competing  with the
business of the EMPLOYER.  Nothing herein  contained shall,  however,  limit the
rights of the EMPLOYEE to own up to 5% of the capital stock or other  securities
of any  corporation,  whose stock or  securities  are  publicly  owned or traded
regularly on a public exchange or in the over-the-counter  market, or to prevent
the EMPLOYEE from investing financially in, or limiting the EMPLOYEE's rights to
invest  financially  in, other  businesses not allied with or competing with the
business of the  EMPLOYER,  as long as EMPLOYEE  continues  to

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devote all of his  working  time,  attention,  knowledge  and skill,  solely and
exclusively  to the  business  and interest of the  EMPLOYER.  EMPLOYEE  will be
permitted to serve on the Board of Directors of publicly owned companies.

         7.  CONFIDENTIALITY:  During the terms of EMPLOYEE's  employment  under
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this  Agreement,  and for one (1) year  thereafter,  the  EMPLOYEE  specifically
agrees that he will not, at any time,  in any  fashion,  form or manner,  either
directly or  indirectly,  use,  divulge,  disclose or communicate to any person,
firm or corporation,  in any manner whatsoever,  any confidential or proprietary
information of any kind, nature or description  concerning any matters affecting
or relating to the  business of the  EMPLOYER  including,  without  limiting the
generality of the foregoing, any of its customers, its manner of operations, its
plans, its ideas, processes,  programs, its intellectual property or other data,
information or materials of any kind,  nature or description,  without regard to
whether  any or all of the  foregoing  matters  shall  be  deemed  confidential,
material or important.  The parties hereto  stipulate that, as between them, the
same are important, material,  confidential and gravely affect the effective and
successful  conduct of the business of the EMPLOYER and its  goodwill,  and that
any breach of the terms of this Paragraph is a material breach  thereof,  except
where  the  EMPLOYEE  shall  be  acting  on  behalf  of the  EMPLOYER.  EMPLOYEE
understands  and agrees that, in the event that EMPLOYEE  violates the terms and
conditions,  as  stated  in  this  Paragraph,  that he  will  be  subject  to an
injunction and damages,  and understands  and agrees that  EMPLOYER's  remedy to
prevent  further or continued  damages  will  include a petition for  injunctive
relief.  EMPLOYEE expressly acknowledges that the restrictions contained in this
Paragraph are reasonable and are properly  required for the adequate  protection
of the EMPLOYER's interests.

                                    EMPLOYEE further understands and agrees that
EMPLOYER,   in  entering  into  this  Agreement,   is  relying  upon  EMPLOYEE's
representation  and  warranty  that all  trade  secrets  and  other  proprietary
information of EMPLOYER will be kept strictly  confidential  by EMPLOYEE and not
utilized by EMPLOYEE in any manner  whatsoever  other than on EMPLOYER's  behalf
during the course of EMPLOYEE's employment with EMPLOYER.

         8.  NON-COMPETITION:  EMPLOYEE  agrees  that,  during  the term of this
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Agreement  and for one (1) year after  termination  hereof,  he shall  not,  for
himself or any third party, directly or indirectly,  divert or attempt to divert
from the EMPLOYER or its  subsidiaries or affiliates any business of any kind in
which it is engaged or  employed,  solicit  for  employment,  or  recommend  for
employment any person employed by the EMPLOYER or by any of its  subsidiaries or
affiliates,  during the period of such person's  employment  and for a period of
one (1) year thereafter.  EMPLOYEE expressly  acknowledges that the restrictions
contained in this  paragraph are  reasonable  and are properly  required for the
adequate protection of the EMPLOYER's interests.

         9. EARLY  TERMINATION:  It is expressly  understood and agreed
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that the terms of this  Agreement,  may be terminated  by the EMPLOYER  prior to
January 19, 2007, upon the occurrence of any of the following events:

                                    (a)  Automatically  and without  notice upon
the death of the EMPLOYEE;  it is also understood that EMPLOYEE will be entitled
to three (3) months' salary which will be payable to his estate;

                                    (b)  Persistent  absenteeism  on the part of
the EMPLOYEE,  which in the reasonable judgment of the Board of Directors of the
Company is having or will have a material  adverse effect on the  performance of
the EMPLOYEE's duties under this Agreement;

                                    (c)  Deliberate   and  willful   failure  to
perform  normal  services  and duties  required  of  EMPLOYEE  pursuant  to this
Agreement,  except if the performance of such duties or services would result in
a  violation  of  EMPLOYEE's  fiduciary  responsibility  to the  Company and its
shareholders or is in a violation of applicable laws;

                                    (d) Any willful act or failure to act, which
in the  reasonable  opinion  of the Board,  is in bad faith and to the  material
detriment of the EMPLOYER;

                                    (e) Conviction of a felony  involving  moral
turpitude or dishonesty;

                                    (f)  Total  or  partial  disability  of  the
EMPLOYEE for a period of three (3)  consecutive  months or ninety (90) days,  in
the  aggregate,  so  that  he is  prevented  from  satisfactorily  performing  a
substantial part of his duties; it being further  understood and agreed that any
proceeds received by EMPLOYEE from a policy of disability  benefits insurance or
any other  proceeds  received  from any Federal,  State or  Municipal  agency of
government  will be credited to the amount of  compensation  paid to EMPLOYEE by
EMPLOYER; and

                                    (g) Fraudulent misconduct of the EMPLOYEE.

                                    The  Agreement  shall not be  terminated  by
any:

                                    (a)  Merger  or  consolidation,   where  the
Company is not the consolidating or surviving; or

                                    (b)   Transfer  of  all  or  a   substantial
majority of the assets of the Company;

                                    (c)  Acquisition or control of fifty percent
(50%) or more of the  Company's  issued and voting  equity share  capital by any
party, or by parties

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acting in concert or under common control.

                                    In the event of any merger or  consolidation
or transfer of all, or a substantial  majority,  of the assets of the Company or
acquisition  or control of fifty percent (50%) (or an amount of stock  ownership
that has the ability to elect the Board of Directors of EMPLOYER) or more of the
Company's  issued and  voting  equity  share  capital by any party or by parties
acting in concert or under common control,  the surviving or resulting entity or
the transferee or  transferees of the Company's  assets or its issued and voting
equity  share  capital,  shall be bound by, and shall have the  benefit  of, the
provision of this Agreement,  and the Company shall endeavor to take all actions
necessary to ensure that such entity or transferee or transferees shall be bound
by the  provisions of the  Agreement.  Moreover,  in the event of such merger or
consolidation, or transfer of all or a substantial majority of the assets of the
Company or acquisition of the Company of the Company's  issued and voting equity
share  capital as  aforesaid,  the  EMPLOYEE  may, at his option,  continue  his
employment  under  the terms of this  Agreement,  or upon  giving  not less than
thirty (30) days notice, no later than thirty(30) days (or as soon thereafter as
a merger or consolidation or transfer of all or a substantial majority of assets
is  announced)  prior  to  the  announced  or  anticipated  date  of  merger  or
consolidation  or  transfer  of all or a  substantial  majority of assets of the
Company, by registered mail, to the registered office of the Company,  requiring
the Company to effect full settlement of all the EMPLOYEE's  entitlements  under
the terms of this Agreement,  which settlement shall also include the payment of
EMPLOYEE's remuneration for the full term of the Agreement.

         10.  BENEFITS:  EMPLOYER agrees that EMPLOYEE will be entitled,  during
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the term,  to all  fringe  benefits  in effect  for  executive  officers  of the
EMPLOYER, such as Blue Cross/ Blue Shield and Major Medical

         11. NO WAIVER:  The parties  hereto do further  agree that no waiver or
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modification  of this  Agreement or of any  covenant,  condition  or  limitation
herein  contained,  shall be valid,  unless in writing and duly  executed by the
party to be  charged  therewith,  and that no  evidence  of any  proceedings  or
litigation  between  either of the  parties  arising  out of or  affecting  this
Agreement or the rights and  obligations of any party  hereunder  shall be valid
and binding unless such waiver or modification is in writing, duly executed, and
the parties  further  agree that the  provisions  of this  paragraph  may not be
waived except as herein set forth.

         12.  GOVERNING LAW: The parties hereto agree that it is their intention
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and  covenant  that  this  Agreement  and the  performance  hereunder  shall  be
construed in accordance with and under the laws of the State of California,  and
that the terms hereof may be enforced in any court of competent  jurisdiction in
an action for specific performance which may be instituted under this Agreement,
and that in the event of any dispute or claim under the within  Agreement,  that
same will be resolved in the Courts of the State of California.

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         13. LIMITED  INDEMNIFICATION:  EMPLOYER  indemnifies and holds harmless
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EMPLOYEE  from any claims of any type against  EMPLOYER  that arise prior to the
date of the commencement of this Agreement.

         14. OPPORTUNITY TO REVIEW:  EMPLOYEE and EMPLOYER warrant and represent
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that  each  has  had  sufficient  and  adequate   opportunity  to  consult  with
independent counsel concerning the within Agreement,  and has requested that the
firm of Baratta & Goldstein prepare the within Agreement, and is aware that said
firm is relying  upon the within  representation  prior to the parties  entering
into the Agreement herein.

         15. NOTICES:  All notices required or  permitted  to be given by either
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party  hereunder  shall be in writing  and  mailed by  registered  mail,  return
receipt requested and by regular mail to the other party addressed as follows:

                       If to EMPLOYER at:
                       CALYPTE BIOMEDICAL CORPORATION
                       1265 Harbor Bay Parkway
                       Alameda, CA 94502

                       If to EMPLOYEE at:
                       J.  RICHARD  GEORGE  9250   Mississippi  Run
                       Brooksville, FL 34613

Any notice mailed,  as provided above,  shall be deemed completed on the date of
receipt, or five (5) days from the postmark on said postal receipt.

         16. CAPTION  HEADINGS:  Caption headings in this Agreement are provided
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merely for convenience and are of no force and effect.

         17.  ENTIRE  AGREEMENT:  This  Agreement  contains the total and entire
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Agreement  between the  parties  and shall,  as of the  effective  date  hereof,
supersede  any and  all  other  Agreements  between  the  parties.  The  parties
acknowledge and agree that neither of them has made any representations that are
not specifically set forth herein,  and each of the parties hereto  acknowledges
that he or it has relied upon his or its own judgment in entering into same, and
that the  within  Agreement  has been  approved  by the  EMPLOYERS  compensation
committee and its board of directors.

         IN WITNESS WHEREOF, the parties have hereunto set their hands and seals
the day, month and year first above written.

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                                            CALYPTE BIOMEDICAL CORPORATION

                                            By:  /s/ Julius R. Krevans for the
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                                                 Compensation Committee
                                                 -------------------------------
                                                 /s/ J. Richard George
                                                 -------------------------------
                                                     J. RICHARD GEORGE