SEPARATION AND CONSULTING AGREEMENT AND RELEASE OF CLAIMS

            THIS  SEPARATION  AND  CONSULTING  AGREEMENT  AND  RELEASE OF CLAIMS
("Agreement")  is made  between  ANTHONY  J.  CATALDO  ("Cataldo")  and  CALYPTE
BIOMEDICAL  CORPORATION  and all of its  subsidiaries  and affiliated  companies
(collectively  hereafter  "Calypte" or "the Company") and shall become effective
on the Effective Date as set forth herein.

                                    RECITALS

            WHEREAS,  Cataldo has been employed by Calypte as Executive Chairman
of Calypte Biomedical Corporation pursuant to an Employment Agreement, dated May
10, 2002 (the "Employment Agreement"), and the parties hereto desire to end that
relationship,  and to settle,  fully,  finally and amicably,  all claims against
each other, including,  but not limited to, any claims related to the employment
of Cataldo and the termination of that employment and the Employment Agreement.

            NOW,   THEREFORE,   in  order  to  provide  said   benefits  and  in
consideration of the mutual promises,  covenants and  representations  set forth
below and other good and valuable consideration, the parties agree as follows:

            1. Relinquishment of Positions/Employment

            Pursuant to this  Agreement,  Cataldo has resigned,  effective as of
November  15, 2004,  his  position as Executive  Chairman and as Director of the
Company and any other position he holds as an officer, employee or director from
any subsidiary or affiliated company ("Resignation Date").

            2. Payment of Good and Valuable Consideration

                  a.  Cataldo has been paid  within 96 hours of his  Resignation
Date,  his final  paycheck,  which  constitutes  his  regular pay as an employee
through  November  20,  2004.  Payments  under  this  paragraph  shall  be  less
applicable taxes.

                  b. The Company  will also pay on behalf of Cataldo the cost of
COBRA payments (based on the applicable percentage previously paid by Company on
behalf of  Cataldo  for  health  insurance  while an  employee)  for a period of
eighteen  (18) months  after his  Resignation  Date or the legal limit of COBRA,
whichever occurs later. Cataldo agrees that should he become eligible for health
insurance through a new employer during the eighteen (18) month period,  that he
will  promptly  notify the Company and the  Company's  obligation  to make COBRA
payments will end with Cataldo's eligibility to participate under the New Plan.

                  c. Notwithstanding  anything to the contrary,  it is expressly
understood that all payments under this Agreement are unconditional  obligations
of Calypte and are not  contingent  on  consulting  or advisory  services  being
provided  by  Cataldo or used by the  Company.  It is  further  understood  that
Calypte  will have no right of  setoff to its  payment  obligations  under  this
Agreement  and that this  Agreement,  subject to paragraph  23, is  irrevocable,
non-cancelable   and  is  not  subject  to  early  termination  for  any  reason
whatsoever.  Commencing  on November 15,  2004,  and ending on November 14, 2006
("Consulting  Term"),  Cataldo shall provide  consulting or advisory services to
Calypte in order to provide transition and other services as may be requested by
Calypte's Chief Executive  Officer.  As part of his advisory  services,  Cataldo
shall  provide to Calypte a status  report of all pending  projects  Cataldo has
been involved with prior to the Resignation Date including,  without limitation,
names and contact  information.  In addition to the COBRA  payments set forth in
paragraph 2(b),  above,  Cataldo's  services as a consultant  shall be paid in a
total sum of $1,033,389.00 as follows:
<PAGE>

      (i) During the first year of the Consulting  Term,  commencing on December
15, 2004 and ending on November  14, 2005,  a total of  $300,000.00,  payable in
monthly increments of $25,000.00. During the second year of the Consulting Term,
commencing  on December  15, 2005 and ending on November  14,  2006,  a total of
$213,389.00,  payable in 11 monthly increments of $18,000.00 and a final monthly
increment of  $15,389.00.  Payments shall be made on the 15th day of each month.
In the event, however, that the Company closes a financing during the Consulting
Term, then the Company shall accelerate such payments as follows:

                  (a) For a financing  between  $5,000,000 and $10,000,000,  the
Company shall pay $175,000, less amounts already paid pursuant to this paragraph
2(c)(i),  within five (5) days of the closing or January 3, 2005,  whichever  is
later;

                  (b) For a financing in an amount over $10,000,000, the Company
shall pay  $375,000,  less  amounts  already  paid  pursuant  to this  paragraph
2(c)(i),  within five (5) days of the closing or January 3, 2005,  whichever  is
later; and

                  (c) The Company shall pay any remaining amounts due to be paid
under  this  paragraph  2(c)(i)  on a  pro-rata  basis  for the  balance  of the
Consulting Term.

      (ii) Upon the  expiration of any  restrictions  on the transfer of Calypte
shares,  the Company shall on January 3, 2005 pay on Cataldo's behalf the sum of
$520,000.00,   representing  the  amounts  necessary  for  Cataldo  to  exercise
1,625,000  options to purchase  shares of Calypte  common stock  pursuant to the
Calypte Biomedical Corporation 2000 Equity Incentive Plan.

                  d.  Notwithstanding  the  provisions  of  paragraph  2(c)(ii),
above,  nothing herein shall prevent  Cataldo from exercising any vested options
pursuant to the Company's applicable stock option plans. The Company also agrees
to grant Cataldo  accelerated  vesting of all of his current issued but unvested
options as of the Effective Date of this Agreement with the term to exercise all
options  expiring at the end of the term of this  Agreement  or as provided  for
under the specific option, whichever is the greater.

                  e. All valid and supported  expenses incurred by Cataldo prior
to the  Resignation  Date  and  submitted  to the  Company  will  be paid in the
ordinary course by the Company.

                  f.  In  the  event   that   Cataldo   should   die  or  become
incapacitated prior to this Agreement terminating by its own terms, the residual
amount to be paid under this Agreement will be paid in accordance with the terms
of  this  Agreement  to  Cataldo's   estate  or  his  duly  appointed   personal
representative as the case may be.


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<PAGE>

                  g. All payments made by Company under this Agreement  shall be
forwarded to an address so designated in writing by Cataldo or his legal counsel
from time to time.

            3. Indemnification Against Claims

            Calypte  agrees to  indemnify  and hold  Cataldo  harmless  from any
liability,  claims, demands, costs, expenses and attorneys' fees incurred by him
as a result  of any  actions  by him in the  course of his  employment,  or as a
director of the Company to the extent other  directors  would be so  indemnified
pursuant to applicable law. Calypte further agrees to indemnify and hold Cataldo
harmless from any liability,  claims,  demands,  costs, expenses, and attorneys'
fees  incurred  by him as a  result  of any  actions  by  him,  specifically  in
connection with providing advisory and consulting services to Calypte.

            4. Non-Disclosure of Trade Secrets and Confidential Information

            Cataldo understands and agrees that in the course of employment with
Calypte he has acquired  confidential  information and trade secrets  concerning
the  operations  of Calypte and its future plans and methods of doing  business,
which information Cataldo understands and agrees would be damaging to Calypte if
disclosed to a competitor or made available to any other person or corporations.
Cataldo  understands and agrees that such information  either has been developed
by him or divulged to him in confidence,  and he understands  and agrees that he
will keep all such information  secret and  confidential.  Furthermore,  Cataldo
agrees that on or before the Effective Date of this Agreement, he will turn over
to Calypte all Company  confidential  files,  records,  and other documents.  In
addition, Cataldo will return all property in his possession owned by Calypte.

            5. Non-Solicitation

            Cataldo  further  agrees that he will not solicit or  participate or
assist in any way in the solicitation of any person in management,  professional
or technical positions at Calypte for employment by any other company.  However,
Cataldo will not violate this provision if said employee pursues a position with
Cataldo's  future employer without any  encouragement  or involvement  direct or
indirect of Cataldo.

            6. No Other Claims

            Cataldo  represents  and  warrants  that  he has not  filed  against
Calypte or any of its  representatives,  any claim,  complaint,  charge or suit,
with any federal,  state or other agency, court, board, office or other forum or
entity,  including without limitation,  any application for workers compensation
benefits as of the Effective Date.

            7. General Release

                  a. As a  material  inducement  to  Calypte  to enter into this
Agreement,   Cataldo,   on  behalf  of  himself   and  his   heirs,   executors,
administrators,  successors and assigns,  to the extent permissible by law, does
hereby  irrevocably and  unconditionally  release,  acquit and forever discharge
Calypte,   and  its   divisions,   subsidiaries,   affiliates  and  all  owners,
stockholders,  predecessors,  successors,  assigns, agents, directors, officers,
employees,  representatives,  and  attorneys,  acting by,  through,  under or in
concert with Calypte or any parent,  subsidiary or related entity,  from any and
all charges, complaints, grievances, claims, liabilities, obligations, promises,
agreements,  controversies,  damages,  actions, causes of action, suits, rights,
demands,  costs, losses, debts and expenses (including attorneys' fees and costs
actually  incurred),  of any nature whatsoever,  known or unknown,  suspected or
unsuspected,  joint or several,  which Cataldo has had or may hereafter claim to
have had, against Calypte by reason of any matter, act, omission, cause or event
whatever from the beginning of time to the Resignation  Date  ("Claims");  other
than those obligations of Calypte set forth in this Agreement.


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<PAGE>

                  b. As a  material  inducement  to  Cataldo  to enter into this
Agreement,  Calypte,  and  its  divisions,  subsidiaries,   affiliates  and  all
predecessors,  successors, assigns and agents, to the extent permissible by law,
do hereby irrevocably and unconditionally  release, acquit and forever discharge
Cataldo, from any and all charges, complaints,  grievances, claims, liabilities,
obligations,  promises, agreements,  controversies,  damages, actions, causes of
action,  suits,  rights,  demands,  costs, losses, debts and expenses (including
attorneys' fees and costs actually incurred), of any nature whatsoever, known or
unknown,  suspected or unsuspected,  joint or several,  which Calypte has had or
may hereafter claim to have had,  against Cataldo by reason of any matter,  act,
omission,  cause or event whatever from the beginning of time to the Resignation
Date  ("Claims");  other than  those  obligations  of Cataldo  set forth in this
Agreement.

            This release and waiver of Claims specifically includes, but without
limiting the foregoing general terms, the following: (1) all Claims arising from
or relating in any way to any act or failure to act by any  employee of Calypte,
(2)  all  Claims  arising  from  or  relating  in  any  way  to  the  employment
relationship of Cataldo with Calypte and/or the termination  thereof,  including
any claims which have been asserted or could have been asserted against Calypte,
together  with (3) any and all Claims which might have been  asserted by Cataldo
in any  suit,  claim,  or  charge,  for or on  account  of any  matter or things
whatsoever  that has occurred up to and  including  the date of this  Agreement,
under any and all laws,  statutes,  orders,  regulations,  or any other claim of
right(s),  including  without  limitation,  Title VII of the Civil Rights Act of
1964, as amended, the Age Discrimination in Employment Act, the California Labor
Code,  and the  California  Fair  Employment  and  Housing  Act, or any Claim in
contract or tort.

            8. Release of Unknown or Unsuspected Claims

            For the  purpose of  implementing  a full and  complete  release and
discharge of the parties hereto,  the parties  expressly  acknowledge  that this
Agreement is intended to include in its effect,  without limitation,  all Claims
which the parties  have  against one another but do not know or suspect to exist
in their favor at the time of execution  hereof,  which if known or suspected by
them would materially  affect their decision to execute this release;  that this
Agreement  contemplates the extinguishment of any such Claim or Claims, and that
all rights under Section 1542 of the California  Civil Code are hereby expressly
waived. Section 1542 of the Civil Code provides:

            "A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing  the release,
which if known by him must have  materially  affected  his  settlement  with the
debtor."

            Cataldo and Calypte represent that they have read and understood the
provisions of California Civil Code Section 1542.


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<PAGE>

            9. Future Litigation or Anticipated Litigation

            Cataldo  agrees that he shall make himself  reasonably  available to
the Company and its counsel to assist in, cooperate with or otherwise testify in
connection with any litigation  where his  participation or assistance is needed
or  required  by law.  Calypte  agrees  that it  shall  make its  employees  and
directors  reasonably  available  to  Cataldo  and his  counsel  to  assist  in,
cooperate with or otherwise  testify in connection with any litigation where its
participation or assistance is needed or required by law.

            10. Nondisparagement

            Cataldo agrees that he will not disparage Calypte, and its officers,
directors or employees.  Calypte's  officers and directors  agree that they will
not disparage Cataldo.

            11. Other Relief

            The parties agree that any dispute, controversy or claim between the
parties arising out of or relating to this Agreement,  or any breach or asserted
breach  thereof,  shall be determined  and settled by  arbitration in accordance
with the rules for dispute  resolution of  JAMS/ENDISPUTE  in effect at the time
the arbitration  commences.  The prevailing party in such  arbitration  shall be
entitled to its reasonable costs and expenses (including  reasonable  attorneys'
fees) in such  arbitration  as part of the award.  Judgment  on the award may be
entered in any court having jurisdiction  thereof,  and the parties specifically
reserve  all  rights  to  appeal  such  judgment  as if it  were  rendered  in a
court-of-law.  Notwithstanding  the  foregoing,  in the event of any  default by
Calypte in payment under this Agreement  which shall remain uncured for a period
of ten (10) days,  on written  notice of default to Calypte,  Cataldo shall have
the right to enter  judgment in a court of competent  jurisdiction  for payments
under the  Agreement  giving  credit to amounts  previously  received  under the
Agreement.  At Cataldo's  request,  Calypte will execute  concurrently  with the
execution of this  Agreement a confession of judgment in  reasonably  acceptable
form to Calypte as prepared  by legal  counsel  for  Cataldo at  Cataldo's  sole
expense to be held in escrow by legal  counsel for  Cataldo.  A true copy of the
confession of judgment is annexed to this Agreement as Exhibit A.

            12. Press Release

            On November 16, 2004,  Calypte  issued a press release to the public
concerning  Cataldo's  resignation  in the form  attached  hereto.  Cataldo  has
consented  to the  issuance of the press  release as same  pertains to Cataldo's
resignation as executive chairman.

            Neither  party will issue any other  press  release  concerning  the
resignation.

            13. Binding Agreement

            This  Agreement  shall be binding upon Cataldo and Calypte and their
respective heirs,  administrators,  representatives,  executors,  successors and
assigns  and  shall  inure  to the  benefit  of the  parties  hereto  and  their
representatives,   and  each  of  them,  and  to  their  heirs,  administrators,
representatives, executors, successors and assigns.


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<PAGE>

            14. Attorney's Fees

            Each  party  hereto  will  bear its own costs  and  attorneys'  fees
incurred in achieving the  settlement  and release of this matter.  If any party
defaults  under the terms of this  Agreement,  and the other  party  employs  an
attorney to enforce or  interpret  the terms of this  Agreement,  or to obtain a
declaration of rights under this Agreement, whether or not legal proceedings are
commenced,  then  such  other  party  shall  be  entitled  to  recover  from the
defaulting party all attorneys' fees,  costs and expenses  incurred.  If a party
commences an action  against the other to enforce or interpret the terms of this
Agreement,  or to obtain a  declaration  of rights  under  this  Agreement,  the
prevailing  party shall be entitled to all attorneys'  fees,  costs and expenses
incurred in such action or any appeal or enforcement of such action.

            15. Non-Reliance

            Other than as  expressly  set forth in this  Agreement,  Cataldo and
Calypte  represent and acknowledge that in executing this Agreement they did not
rely upon and they have not relied upon any representation nor statement made by
any  of  the  parties  hereto  or by any of  their  agents,  representatives  or
attorneys with regard to the subject  matter,  basis or effect of this Agreement
or otherwise.

            16. Agreement Obligates, Extends and Inures

            The provisions of this Agreement shall be deemed to obligate, extend
and  inure  to  the  benefit  of the  legal  successors,  assigns,  transferees,
grantees,  heirs,  shareholders,  officers and directors of each signatory party
hereto, and to those who may assume any or all of the above-described capacities
subsequent to the execution and Resignation Date of this Agreement.

            17. Non-Admission of Liability

            This Agreement  shall not in any way be construed as an admission by
Calypte  that it has acted in any  manner in  violation  of the common law or in
violation of any federal,  state or local statute or regulation  nor shall it be
construed  as an  admission  by  Cataldo  that he has  acted  in any  manner  in
violation  of the  common law or in  violation  of any  federal,  state or local
statute or regulation.

            18. Method of Execution

            This Agreement may be executed in counterparts  and each counterpart
shall be deemed a  duplicate  original.  For  purposes of  execution,  facsimile
signature pages shall be deemed originals.

            19. Applicable Law

            This  Agreement  is deemed to have been made and entered into in the
State of  California  and shall in all  respects be  interpreted,  enforced  and
governed  under  the  laws of said  State.  The  language  of all  parts of this
Agreement  shall in all causes be  construed  as a whole,  according to its fair
meaning, and not strictly for or against any of the parties.


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<PAGE>

            20. Severability

            The  provisions  of this  Agreement  are  severable,  and should any
provision of this  Agreement be declared or be determined  by any  arbitrator or
court to be illegal or invalid,  any such provision  shall be stricken,  and the
validity of the remaining parts, terms or provisions shall not be affected.

            21. Entire Agreement

            This Agreement sets forth the entire  agreement  between the parties
and fully supersedes any and all prior agreements or understandings  between the
parties pertaining to the same subject matter,  further,  this Agreement may not
be changed  modified or amended  except by  explicit  written  agreement  by the
parties hereto.

            22. Notices

            All notices under this  Agreement are to be in writing and delivered
by overnight courier and are deemed effective upon receipt if to:

      Company:

      Calypte Biomedical Corporation,
      5000 Hopyard Rd., Suite 480
      Pleasanton, CA 94588
      Attn: Chief Executive Officer

      If to Cataldo:

      Barry K. Rothman, Esq.
      1901 Avenue of the Stars, Suite 370
      Los Angeles, CA  90067

            23. Older Worker Benefits Protection Act

            Cataldo  has been  informed  by the  Company  and  acknowledges  and
understands  that he has been given up to  twenty-one  (21) days to consider the
terms of this  Agreement  (although he need not take the full 21 days to do so),
that he may seek advice from an attorney,  and that he may revoke this Agreement
at any time within seven (7) days  following  his signing of it. This  Agreement
will not be effective or  enforceable  and no payments  will be made at any time
within  seven (7) days  following  Cataldo's  execution of this  Agreement.  The
eighth  day  following  Cataldo's  execution  of  this  Agreement  shall  be the
"Effective Date." Any revocation within this period must be submitted in writing
to the Company's Chief Executive Officer,  J. Richard George, 5000 Hopyard Road,
Suite 480,  Pleasanton,  California  94588,  and must state "I hereby  revoke my
acceptance of the Settlement Agreement and General Release."


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<PAGE>

            CATALDO states that he has carefully  read the foregoing  Agreement,
has had the  opportunity to consult with an attorney,  knows and understands its
contents, and voluntarily executes this Agreement.

            The parties further acknowledge that this Agreement has been entered
into  without  fraud,  duress,  undue  influence  or  mistake  and that upon the
Effective Date, that this Agreement is not subject to recission.

                                           SIGNATURES


Date:  12/2/04                             /s/ Anthony J. Cataldo
       ----------------------              -------------------------------------
                                           Anthony J.  Cataldo

                                           Calypte Biomedical Corporation


Date:  12/3/04                             /s/ J. Richard George
       ----------------------              -------------------------------------
                                           J. Richard George
                                           President and Chief Executive Officer


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