Unassociated Document


    EMPLOYMENT
      AGREEMENT

    


    THIS
      EMPLOYMENT AGREEMENT (the “Agreement”),
      dated 11 June 2008, by Calypte Biomedical Corporation, a Delaware corporation
      (“Calypte”) and Mr. Don Taylor (the “Employee”), Basset Shaw, Uxmore Road,
      Checkendon RG8 0TD, UK.

     

    Calypte
      desires to employ the Employee as President and Chief Executive Officer of
      Calypte, and the Employee desires to be so employed, on the terms and conditions
      set forth in this Agreement.

     

    ACCORDINGLY,
      on the basis of the representations, warranties, and covenants contained in
      this
      Agreement, the parties agree as follows:

     

    ARTICLE
      I - EMPLOYMENT
      AND TERM

     

    1.1.
      Employment.
      Calypte
      shall employ the Employee as its President and Chief Executive Officer, and
      the
      Employee accepts such employment, on the terms and conditions set forth in
      the
      Agreement.

     

    1.2.
      Term.
      Unless
      the parties terminate or extend Employee’s employment in accordance with the
      terms of this Agreement, the term of Employee’s employment under this Agreement
      shall commence on the “Effective Date”, and shall continue for a period of 24
      months thereafter. For purposes of this Agreement, the Effective Date means
      the
      date on which the Company receives a binding commitment for sufficient funding
      to operate its business for at least a two-month period. Upon the expiration
      of
      such 24-month period, the term of the Employee’s employment under this Agreement
      shall automatically renew for successive periods of 12 months each, unless,
      at
      least 60 days before the expiration of such 24 month period or any succeeding
      12-month period, either party gives written notice to the other party of its
      intention not to renew the Agreement. If such notice of non-renewal is timely
      given, the term of the Employee’s employment under this Agreement shall expire
      at the end of such 24-month period or at the end of the current 12-month period,
      as the case may be. The term of Employee’s employment under this Agreement is
      referred to herein as the “Term.”

    


    ARTICLE
      2 - DUTIES
      OF THE EMPLOYEE

     

    2.1.
      Duties.
      During
      the Term, the Employee agrees to serve as President and Chief Executive Officer
      of Calypte. Subject to the direction and authorization of Calypte’s board of
      directors (the “Board of Directors”), the Employee shall direct and manage the
      affairs of Calypte and shall perform such other functions and undertake such
      other responsibilities as are customarily associated with his capacity as
      President and Chief Executive Officer. The Employee shall devote such tine,
      attention and skill necessary to fully perform his duties, services and
      responsibilities, and will use his best efforts to promote the interests of
      Calypte. The Employee shall, at all times during the Term, adhere to and obey
      any and all written internal rules and regulations governing the conduct of
      Calypte’s employees, as established or modified from time to time; provided,
      however, that, in the event of any conflict between the provisions of this
      Agreement and any such rules or regulations, the provisions of this Agreement
      shall control.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    2.2.
      Services.
      During
      the Term, the Employee will not, without the prior written approval of the
      Board
      of Directors, engage, directly or indirectly, in any other business activity
      which would interfere with the performance of his duties, services and
      responsibilities hereunder or which is in violation of policies established
      from
      time to time by the Board of Directors.

    


    2.3.
      Directorships.
      Notwithstanding the foregoing, the Employee shall be permitted to continue
      holding non-employee directorships as may be agreed upon by the Board of
      Directors. All costs and time associated with holding these directorships shall
      be borne by the Employee.

    


    ARTICLE
      3 - COMPENSATION

    


    3.1.
      Base
      Salary.
      During
      the Term, Calypte shall pay to the Employee a base salary at the annual rate
      of
      $150,000 per year, payable in equal bi-weekly installments on the Company’s
      normal payroll schedule.

    


    3.2.
      Common
      Stock Award.
      As soon
      as practicable after execution of this Agreement, Calypte shall award to the
      Employee 1,000,000 million shares of its common stock, which shall be fully
      vested upon the award, in accordance with the terms and conditions of Calypte’s
      2004 Incentive Plan (the “Plan”).

    


    3.3.
      Stock
      Option Award.
      Promptly
      following the effective date of this Agreement, Calypte shall grant to the
      Employee a stock option to purchase 1,000,000 shares of its common stock
      pursuant to Calypte’s 2004 Incentive Plan (the “Plan”) at an exercise price per
      share equal to the closing market price of a share of its common stock on the
      date of grant. The stock option will vest bi-annually, subject to the Employee’s
      continued Employment (as defined in the Plan), on a pro rata basis as follows:
      50% of the total stock option award on 1 December 2008 and the remaining 50%
      on
      1 June 2009.

    


    3.4.
      Bonus.
      Beginning the effective date of this Agreement, the Employee shall be entitled
      to receive a bonus of up to 50% of his annual base salary upon satisfaction
      of
      performance goals to be determined by the Board of Directors. The bonus may
      be
      paid in either cash or equity or a combination of cash and equity. The Board
      of
      Directors will set the performance goals with the assistance of Employee. The
      performance goals shall be measured and the bonus calculated as of the end
      of
      each calendar year. Where the assessment period is less than one calendar year
      the performance goals and the bonus shall be adjusted accordingly.

    


    3.5.
      Employee
      Benefits.
      The
      Employee shall be entitled to participate in or receive benefits under any
      employee benefit plans, arrangements and perquisites, including, but not limited
      to, retirement plans, supplemental retirement plans, pension plans,
      profit-sharing plans, health and accident plans, medical coverage plans,
      disability plans, insurance programs, and incentive compensation plans or any
      other employee benefit plan or arrangement now available or in the future
      available to senior executives of Calypte on the same basis as is available
      to
      other senior executives of Calypte. Calypte will not, without the Employee’s
      prior written consent, make any changes in such plans, benefits or arrangements
      which would materially adversely affect the Employee’s rights or benefits
      thereunder, except to the extent such changes are made applicable to all
      executive-level employees on a non-discriminatory basis.

     

    
      
        
        

      

      
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    3.6. Vacation.
      The
      Employee shall be entitled to 25 days paid vacation each year. A maximum of
      5
      days may be carried forward in any one year.

    


    3.7.
      Reimbursement
      for Business Expenses.
      Calypte
      shall reimburse the Employee for all reasonable and documented actual business
      expenses that the Employee incurs from time to time in the performance of his
      duties under this Agreement in accordance with the policies and practices that
      Calypte has adopted or adopts hereafter. The class of air travel shall be
      business class or similar for trips longer than 3 hours and business class
      or
      similar for all surface travel.

    


    3.8.
      Legal
      and Tax Advise Expenses.
      Calypte
      shall assist and reimburse the Employee for all reasonable documented and actual
      expenses incurred by the Employee to obtain the necessary documents for him
      to
      perform his stated duties of this Agreement in Portland. Calypte shall similarly
      reimburse the Employee up to $2,500 for the Employee’s reasonable documented and
      actual expenses incurred to consult with a tax expert regarding the Employee’s
      income tax liabilities in connection with his compensation and benefits under
      this Agreement.

    


    3.9.
      Personal
      Travel.
      The
      Company shall reimburse the Employee for reasonable and documented actual
      expenses the Employee incurs from time to time related to his and his family’s
      personal travel up to a maximum of $15,000.

    


    ARTICLE
      4 - TERMINATION

    


    4.1.
      Termination for Cause.
      Termination for Cause shall mean termination because of Employee’s personal
      dishonesty, incompetence, failure to adequately perform stated duties, willful
      misconduct, breach of fiduciary duty involving personal profit, willful
      violation of any law, rule or regulation (other than traffic violations or
      similar offenses), conviction of a felony or other serious crime, or material
      breach of any provision of this Agreement. For purposes of this Agreement,
      no
      act, or the failure to act, on the Employee’s part shall be “willful” unless
      done, or omitted to be done, not in good faith and without reasonable belief
      that the action or omission was in the best interest of Calypte. Notwithstanding
      the foregoing, the Employee shall not be deemed to have been terminated for
      Cause unless and until there shall have been delivered to him a notice of
      termination specifying the particulars thereof in detail. The Employee shall
      not
      have the right to receive compensation or other benefits for any period after
      termination for Cause which have not vested or been earned as of the date of
      such termination. The Employee shall have the right to receive compensation
      or
      other benefits which have already vested or been earned as of the date of
      termination for Cause, unless payment of such compensation or benefits is
      expressly prohibited by the terms of any plan, program or agreement governing
      such compensation or benefits.

     

    
      
        
        

      

      
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    4.2. Termination
      Upon An Other Event of Termination

     

    (a)
      Upon
      the occurrence of an Other Event of Termination (as herein defined) during
      the
      Term, the provisions of this Section 4.2 shall apply. As used in this Agreement,
      an “Other Event of Termination” shall mean and include any one or more of the
      following: (i) the termination by Calypte of the Employee’s employment hereunder
      for any reason other than a termination governed by Sections 4.1, 4.3 or 4.5
      hereof; (ii) the Employee’s resignation upon any (A) a material change in the
      Employee’s function, duties, or responsibilities, which change would cause the
      Employee’s position to become one of lesser responsibility, importance, or scope
      from the position and attributes thereof described in Sections 1.1 and 2.1
      hereof, unless consented to by the Employee, (B) a relocation of the Employee’s
      principal place of employment by more than 100 miles, unless consented to by
      the
      Employee, (C) a material reduction in the aggregate benefits and perquisites
      to
      the Employee from those being provided as of the effective date of this
      Agreement, unless such reduction is (I) consented to by the Employee, (II)
      applies generally to executive-level employees of Calypte, or (III) is a
      reduction in the amount of the Employee’s bonus based on the application of a
      formula or index to the financial performance of Calypte. Upon the occurrence
      of
      any event described in clauses (A), (B), or (C), above, the Employee shall
      have
      the right to elect to terminate his employment under this Agreement by
      resignation upon not less than 30 days prior written notice given within six
      months after the event giving rise to said right to elect.

     

    (b)
      Upon
      the occurrence of an Other Event of Termination, Calypte shall be obligated
      to
      pay the Employee, or, in the event of his subsequent death, his beneficiary
      or
      beneficiaries, or his estate, as the case may be, an amount equal to the
      Employee’s base salary on the date of termination for six (6) months. Such
      amount shall be paid in six (6) equal monthly installments commencing on the
      30th day after the Termination Date, or under such other arrangements as shall
      be agreed with the Employee. Such amount shall be in addition to any
      compensation or benefits earned by the Employee or to which the Employee was
      entitled prior to the Termination Date. Such payments shall not be reduced
      in
      the event the Employee obtains other employment following termination of
      employment.

    


    (c)
      Upon
      the occurrence of an Other Event of Termination, Calypte will cause to be
      continued life, medical, dental and disability coverage substantially identical
      to the coverage maintained by Calypte for the Employee prior to his termination
      at no premium cost to the Employee, except to the extent such coverage may
      be
      changed in its application to all executive-level employees of Calypte if such
      coverage was generally available on the date of an Other Event of Termination
      to
      executive-level employees of Calypte, or except to the extent such coverage
      may
      be changed in its application to all executive-level employees of Calypte if
      such coverage was generally available on the date of an Other Event of
      Termination to executive-level employees of Calypte. The benefits provided
      under
      this Section 4.3(c) shall continue until the earlier of (a) six month following
      Employee’s termination of employment with Calypte, (b) the end of the then
      current Term, or (c) the date the Employee becomes covered under any other
      group
      health plan not maintained by Calypte. In the event Employee is required to
      make
      an election under Sections 601 through 607 of the Employee Retirement Income
      Security Act of 1974 (commonly known as COBRA) to qualify for the benefits
      described in this Section 4.3(c), the obligations of Calypte under this Section
      4.3(c) shall be conditioned upon the Employee’s timely making such an
      election.


    
      
        
        

      

      
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    4.3.
      Termination
      By the Employee or Death.
      If the
      Employee terminates his employment with Calypte for any reason other than the
      reasons set forth in Section 4.2 hereof or the Employee’s employment is
      terminated as a result of his death, Calypte shall pay to the Employee, or
      in
      the event of his death, his beneficiary or beneficiaries or his estate, as
      the
      case may be, the base salary earned but unpaid pursuant to Section 3.1 hereof
      through the Termination Date and any earned but unused vacation pay due to
      the
      Employee at the Termination Date. Any such payments due to the Employee, under
      this Section 4.3 shall be paid on the Termination Date, unless the termination
      of the Employee’s employment was due to his death, in which case, such payment
      shall be made by no later than 30 days after the Termination Date. The Employee
      shall not have the right to receive compensation or other benefits for any
      period after the Termination Date which have not vested or been earned as of
      the
      Termination Date. The Employee shall have the right to receive compensation
      or
      other benefits which have already vested or been earned as of the Termination
      Date, unless payment of such compensation or benefits is expressly prohibited
      by
      the terms of any plan, program or agreement governing such compensation or
      benefits.

    


    4.4.
      Termination on Disability.
      If (i)
      the Employee is absent from work for 90 calendar days in any 12-month period
      by
      reason of illness or incapacity (whether physical or otherwise) or (ii) the
      Board of Directors reasonably determines that the Employee is unable to perform
      his duties, services and responsibilities hereunder by reason of illness or
      incapacity (whether physical or otherwise) for a total of 90 calendar days
      in
      any 12-month period during the Term (“Disability”), Calypte may terminate the
      Employee’s employment hereunder as of the Termination Date specified in a
      written notice termination from Calypte to the Employee. If the Employee’s
      employment is terminated by Calypte pursuant to this Section 4.4, Calypte shall
      pay on the Termination Date to the Employee the base salary earned but unpaid
      pursuant to Section 3.1 hereof through the Termination Date and any earned
      but
      unused vacation pay clue to the Employee at the Termination Date. In addition,
      the Employee shall be entitled to receive benefits based on Calypte’s applicable
      disability plans then in effect. The Employee shall not have the right to
      receive compensation or other benefits for any period after the Termination
      Date
      which have not vested or been earned as of the Termination Date. The Employee
      shall have the right to receive compensation or other benefits which have
      already vested or been earned as of the Termination Date, unless payment of
      such
      compensation or benefits is expressly prohibited by the terms of any plan,
      program or agreement governing such compensation or benefits.

    


    4.5.
      Termination
      of Calypte’s Obligation.
      If, at
      any time within one year following termination of employment, the Employee
      materially breaches any of the Employee’s obligations under Articles 5 or 6 of
      this Agreement, then, in addition to any other remedy of Calypte, Calypte’s
      obligation, if any, to make payments under Section 4.1 shall cease as of the
      date such material breach occurs. Moreover, the Employee acknowledges that
      a
      material breach of Articles 5 or 6 of this Agreement will cause irreparable
      harm
      to Calypte and, if the Employee fails to abide by these obligations, Calypte
      will be entitled to seek specific performance, including immediate issuance
      of a
      temporary restraining order or preliminary injunction enforcing this Agreement,
      and to seek judgment for damages caused by the Employee’s breach, and to seek
      other remedies provided by applicable law.


    
      
        
        

      

      
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    4.6.
      Termination
      Date.
      Any
      termination of the Employee’s employment hereunder pursuant to this Article 4
      shall be effected by written notice other than a termination as a result of
      the
      Employee’s death. Any written notice of termination shall indicate the specific
      termination provision in this Agreement relied upon and shall set forth in
      reasonable detail the facts and circumstances claimed to provide a basis for
      termination of the Employee’s employment under the provisions so indicated. The
      effective date of any such termination (the “Termination Date”) shall be as
      follows:

     

    (a) In
      the
      event of a termination due to the Employee’s death, the date of such death;
      and

     

    (b)
      In
      the event of termination for any reason other than the Employee’s death, the
      date specified in the written notice of termination which in no event shall
      be
      prior to the date of receipt of such notice.

    


    ARTICLE
      5 - CONFIDENTIALITY
      AND NON-SOLICITATION

     

    5.1.
      Nondisclosure.
      The
      Employee acknowledges that in the course of employment with Calypte, the
      Employee will have access to learn confidential information concerning Calypte.
      Confidential information includes, but is not limited to, information about
      either Calypte’s affiliates, vendors, suppliers, distributors and clients, the
      terms and conditions under which Calypte or its affiliates deals with vendors,
      suppliers, distributors and clients, sales and product information,
      manufacturing processes, product formulations, information regarding
      applications and submissions (relating to existing and proposed products) made
      to various regulatory bodies, new product plans, product development efforts,
      marketing strategies, financial information and projections and other commercial
      and product data, pricing information for products, financing arrangements,
      research materials, manuals, computer programs, data, marketing plans and
      tactics, technical information, processes and practices of Calypte, all
      information contained in electronic or computer files, salary and wage
      information, and any other information that is designated in writing by Calypte
      or its affiliates as confidential or that the Employee knows or should know
      is
      confidential; information provided by third parties that Calypte is obligated
      to
      keep confidential; and all other proprietary information of Calypte. The
      Employee acknowledges that all confidential information is and shall continue
      to
      be the exclusive property of Calypte, whether or not prepared in whole or in
      part by the Employee and whether or not disclosed to or entrusted to the
      Employee in connection with employment by Calypte. The Employee agrees not
      to
      disclose confidential information, directly or indirectly, under any
      circumstances or by any means, to any third persons without the prior written
      consent of Calypte. The Employee agrees that he will not copy, transmit,
      reproduce, summarize, quote, or make any commercial or other use whatsoever
      of
      confidential information, except as may be necessary to perform work done by
      Employee for Calypte. The Employee agrees to exercise the highest degree of
      care
      in safeguarding confidential information against loss, theft or other
      inadvertent disclosure and agrees generally to take all steps necessary or
      requested by Calypte to ensure maintenance of the confidentiality of the
      confidential information. The Employee agrees in addition to the specific
      covenants contained herein to comply with all of Calypte’s policies and
      procedures for the protection of confidential information.


    
      
        
        

      

      
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    5.2.
      Exclusions.
      Section
      5.1 shall not apply to the following information: (a) information previously,
      now or hereafter voluntarily disseminated by Calypte to the public or which
      otherwise becomes part of the public domain through lawful means; (b)
      information known to the Employee prior to the Employee’s employment with
      Calypte; (c) information received by the Employee from third parties not known
      by the Employee to be subject to a confidentiality agreement with Calypte;
      or
      (d) information, including but not limited to, information concerning banking,
      financial and/or economic principles, concepts or ideas which is not solely
      and
      exclusively derived from the business plans and activities of
      Calypte.

    


    5.3.
      Confidential
      Proprietary and Trade Secret Information of Others.
      The
      Employee represents that he has disclosed to Calypte any agreement to which
      the
      Employee is or has been a party regarding the confidential information of others
      and the Employee understands that the Employee’s employment by Calypte will not
      require the Employee to breach any such agreement. The Employee will not
      disclose such confidential information to Calypte nor induce Calypte to use
      any
      trade secret proprietary information received from another under an agreement
      or
      understanding prohibiting such use or disclosure.

    


    5.4.
      Non-Solicitation
      of Employees.
      During
      the period of one year after the Termination Date, the Employee shall not
      directly or indirectly solicit for employment or for independent contractor
      work
      any employee of Calypte, and shall not encourage any such employee to leave
      the
      employment of Calypte.

    


    5.5.
      Non-Solicitation of
      Customers.
      During
      the period of one year following the Termination Date, the Employee shall not
      directly or indirectly (a) solicit for business any customers of Calypte, (b)
      encourage any such customers to stop using the facilities or services of
      Calypte, or (c) encourage any such customers to use the facilities or services
      of any competitor of Calypte.

    


    5.6.
      No
      Unfair Competition.
      The
      Employee hereby acknowledges that the sale or unauthorized use or disclosure
      of
      any of Calypte’s Confidential Material obtained by the Employee by any means
      whatsoever, at any time before, during, or after the Term shall constitute
      unfair competition. The Employee shall not engage in any unfair competition
      with
      Calypte either during the Term or at any time thereafter.

    


    ARTICLE
      6 - CALYPTE’S
      OWNERSHIP IN EMPLOYEE’S WORK

    


    6.1.
      Calypte’s
      Ownership.
      The
      Employee agrees that all inventions, discoveries, improvements, trade secrets,
      formulae, techniques, processes, and know-how, whether or not patentable, and
      whether or not reduced to practice, that are conceived or developed during
      the
      Employee’s employment with Calypte, either alone or jointly with others, if on
      Calypte’s time, using Calypte’s facilities, relating to Calypte or to its
      current or prospective business, shall be owned exclusively by Calypte, and
      the
      Employee hereby assigns to Calypte all the Employee’s right, title, and interest
      in all such intellectual property. The Employee agrees that Calypte shall be
      the
      sole owner of all domestic and foreign patents or other rights pertaining
      thereto, and further agrees to execute all documents that Calypte reasonably
      determines to be necessary or convenient for use in applying for, prosecuting,
      perfecting, or enforcing patents or other intellectual property rights,
      including the execution of any assignments, patent applications, or other
      documents that Calypte may reasonably request. This provision is intended to
      apply only to the extent permitted by applicable law.


    
      
        
        

      

      
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    6.2.
      Section 6.1 shall not apply to inventions that the Employee has developed
      entirely on his own time without using Calypte’s equipment, supplies,
      facilities, trade secret information or Confidential Information, except
      that
      Section 6.1 will apply to inventions that either (i) relate at the time of
      conception or reduction to practice of the invention to Calypte’s business, or
      actual or demonstrably anticipated research or development of Calypte or (ii)
      result from any work that the Employee performed for Calypte. The Employee
      will
      advise Calypte promptly in writing of any inventions that the Employee believes
      meet the foregoing criteria.

    


    6.3.
      Return
      of Calypte’s Property and Materials.
      Upon
      termination of employment with Calypte, the Employee shall deliver to Calypte
      all Calypte property and materials that are in the Employee’s possession or
      control, including all of the information described as confidential information
      in Section 6 of this Agreement and including all other information relating
      to
      any inventions, discoveries, improvements, trade secrets, formulae, processes,
      or know-how of Calypte.

    


    6.4.
      Ventures.
      If
      Employee, during employment with Calypte, is engaged in or associated with
      the
      planning or implementation of any project, program, or venture involving Calypte
      and any third parties, all rights in the project, program, or venture shall
      belong to Calypte, and the Employee shall not be entitled to any interest
      therein or to any commission, finder’s fee, or other compensation in connection
      therewith other than the salary to be paid to the Employee as provided in this
      Agreement.

    


    ARTICLE
      7 - ARBITRATION

    


    Any
      claim
      or controversy between the parties which the parties are unable to resolve
      themselves, including any claim arising out of the Employee’s employment or the
      termination of that employment, and including any claim arising out of,
      connected with, or related to the formation, interpretation, performance or
      breach of this Agreement, and any claim or dispute as to whether a claim is
      subject to arbitration, shall be submitted to and resolved exclusively by
      expedited arbitration by a single arbitrator in accordance with the following
      procedures:

    


    7.1.
      In
      the event of a claim or controversy subject to this arbitration provision,
      the
      complaining party shall promptly send written notice to the other party
      identifying the matter in dispute and the proposed remedy. Following the giving
      of such notice, the parties shall meet and attempt in good faith to resolve
      the
      matter. In the event the parties are unable to resolve the matter within 21
      days, the parties shall meet and attempt in good faith to select a single
      arbitrator acceptable to both parties. If a single arbitrator is not selected
      by
      mutual consent within 10 business days following the giving of the written
      notice of dispute, an arbitrator shall be selected from a list of nine persons
      each of whom shall be an attorney who is either engaged in the active practice
      of law or a recognized arbitrator and who, in either event, is experienced
      in
      serving as an arbitrator in disputes between employers and employees, which
      list
      shall be provided by the main Portland, Oregon office of the American
      Arbitration Association (“AAA”) or of the Federal Mediation and Conciliation
      Service. If, within three business days of the parties’ receipt of such list,
      the parties are unable to agree upon an arbitrator from the list, then the
      parties shall each strike names alternatively from the list, with the first
      to
      strike being determined by the flip of a coin. After each party has had four
      strikes, the remaining name on the list shall be the arbitrator. If such person
      is unable to serve for any reason, the parties shall repeat this process until
      an arbitrator is selected.



    
      
        
        

      

      
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    7.2.
      Unless the parties agree otherwise, within 120 days of the selection of the
      arbitrator, a hearing shall be conducted before such arbitrator at a time and
      a
      place in Portland, Oregon agreed upon by the parties. In the event the parties
      are unable to agree upon the time or place of the arbitration, the time and
      place within Portland, Oregon shall be designated by the arbitrator after
      consultation with the parties. Within 30 days of the conclusion of the
      arbitration hearing, the arbitrator shall issue an award, accompanied by a
      written decision explaining the basis for the arbitrator’s award.

    


    7.3.
      In
      any arbitration hereunder, Calypte shall pay all administrative fees of the
      arbitration and all fees of the arbitrator. Each party shall pay its own
      attorneys’ fees, costs, and expenses, unless the arbitrator orders otherwise.
      The prevailing party in such arbitration, as determined by the arbitrator,
      and
      in any enforcement or other court proceedings, shall be entitled, to the extent
      permitted by law, to reimbursement from the other party for all of the
      prevailing party’s costs (including but not limited to the arbitrator’s
      compensation), expenses, and attorneys’ fees. The arbitrator shall have no
      authority to add to or to modify this Agreement, shall apply all applicable
      law,
      and shall have no lesser and no greater remedial authority than would a court
      of
      law resolving the same claim or controversy. The arbitrator shall, upon an
      appropriate motion, dismiss any claim without an evidentiary hearing if the
      party bringing the motion establishes that it would be entitled to summary
      judgement if the matter had been pursued in court litigation. The parties shall
      be entitled to reasonable discovery subject to the discretion of the
      arbitrator.

    


    7.4.
      The
      decision of the arbitrator shall be final, binding, and non-appealable, except
      as otherwise permitted by law, and may be enforced as a final judgment in any
      court of competent jurisdiction.

    


    7.5.
      This
      Agreement to resolve any disputes by arbitration shall extend to claims against
      any parent, subsidiary, or affiliate of each party, and, when acting within
      such
      capacity, any officer, director, shareholder, employee or agent of each party,
      or of any of the above, and shall apply as well to claims arising out of state
      and federal statutes and local ordinances as well as to claims arising under
      the
      common law or under this Agreement. This Agreement, however, shall not apply
      to
      claims for workers’ compensation or unemployment compensation
      benefits.

    


    7.6.
      Notwithstanding the foregoing, and unless otherwise agreed between the parties,
      either party may, in an appropriate matter, apply to a court for provisional
      relief, including a temporary restraining order or preliminary injunction,
      on
      the ground that the arbitration award to which the applicant may be entitled
      may
      be rendered ineffectual without provisional relief.


    
      
        
        

      

      
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    7.7.
      Any
      arbitration hereunder shall be conducted in accordance with the employment
      rules
      and procedures of the AAA then in effect; provided, however, that, in the event
      of any inconsistency between the rules and procedures of the AAA and the terms
      of this Agreement, the terms of this Agreement shall prevail.

     

    7.8.
      If
      any of the provisions of this Section 7 are determined to be unlawful or
      otherwise unenforceable, in whole or in part, such determination shall not
      affect the validity of the remainder of this Section 7, and this Section 7
      shall
      be reformed to the extent necessary to carry out its provisions to the greatest
      extent possible and to insure that the resolution of all conflicts between
      the
      parties, including those arising out of statutory claims, shall be resolved
      by
      neutral, binding arbitration. If a court should find that the provisions of
      this
      Section 7 are not absolutely binding, then the parties intend any arbitration
      decision and award to be fully admissible in evidence in any subsequent action,
      given great weight by any finder of fact, and treated as determinative to the
      maximum extent permitted by law.

    


    ARTICLE
      8 - MISCELLANEOUS

     

    8.1.
      Withholding.
      All sums
      payable to the Employee hereunder will be reduced by all federal, state, local
      and other withholdings and similar taxes and payments required by applicable
      law. Notwithstanding the foregoing, the Employee represents and warrants that
      he
      is a resident of the United Kingdom and may not be subject to U.S. withholding
      taxes. The Employee shall provide Calypte with the appropriate tax form so
      that
      Calypte may discontinue withholding all or a portion of taxes otherwise required
      to be withheld.

    


    8.2.
      Indemnification.
      In the
      event the Employee is made, or threatened to be made, a party to any legal
      action or proceeding, whether civil or criminal, by reason of the fact that
      the
      Employee is or was an officer of Calypte, the Employee shall be indemnified
      by
      Calypte, and Calypte shall pay the Employee’s related expenses when and as
      incurred, all to the fullest extent permitted by law but subject to all
      conditions and requirements of applicable law.

    


    8.3.
      Cooperation
      in Defense of Calypte.
      If the
      Employee, during the Term or thereafter, is served with any subpoena or other
      compulsory judicial or administrative process calling for production of
      confidential information or if the Employee is otherwise required by law or
      regulations to disclose confidential information, the Employee will promptly,
      before making any such production or disclosure, notify Calypte and provide
      it
      with such information as Calypte may reasonably request to take such action
      as
      Calypte deems necessary to protect its interests. The Employee agrees to
      cooperate reasonably with Calypte, whether during the Term or thereafter, in
      the
      prosecution or defense of all threatened claims or actual litigation in which
      Calypte is or may become a party, whether now pending or hereafter brought,
      in
      which the Employee has knowledge of relevant facts or issues. The Employee
      shall
      be promptly reimbursed out-of-pocket expenses due to cooperating with the
      prosecution or defense of any litigation for Calypte.


    
      
        
        

      

      
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    8.4.
      Severable
      Provisions.
      The
      provisions of this Agreement are separate and distinct, and if any provisions
      are determined to be unenforceable, in whole or in part, the remaining
      provisions, and the enforceable parts of any partially unenforceable provisions,
      shall nevertheless be enforceable.

    


    8.5.
      Successors
      and Assigns.
      This
      Agreement shall inure to the benefit of and be binding upon Calypte, its
      successors and assigns, and upon the Employee and his heirs, executors,
      administrators and legal representatives. The Company shall have the right
      to
      assign its rights and obligations under this Agreement to an entity which
      acquires substantially all of the assets of the Company. The Employee may not
      delegate his duties hereunder.

    


    8.6.
      Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      deemed an original and all of which taken together constitutes one and the
      same
      instrument and in making proof hereof it shall not be necessary to produce
      or
      account for more than one such counterpart.

    


    8.7.
      Waiver.
      Neither
      party shall, by mere lapse of time, without giving notice or taking other action
      hereunder, be deemed to have waived any breach by the other party of any of
      the
      provisions of this Agreement. Further, the waiver by either party of a
      particular breach of this Agreement by the other shall neither be construed
      as,
      nor constitute a, continuing waiver of such breach or of other breaches by
      the
      same or any other provision of this Agreement.

    


    8.8.
      Governing
      Law.
      The
      validity, interpretation, performance and enforcement of this Agreement shall
      be
      governed by the laws of the State of Oregon (without regard to the choice of
      law
      provisions of Oregon), but only to the extent no superseded by federal
      law.

    


    8.9.
      Headings.
      Section
      and subsection headings do not constitute part of this Agreement. They are
      included solely for convenience and reference, and they in no way define, limit,
      or describe the scope of this Agreement or the intent of any of its
      provisions.

    


    8.10.
      Integration.
      This
      Agreement, including any documents expressly incorporated into it by the terms
      of this Agreement, constitutes the entire agreement between the parties and
      supersedes all prior oral and written agreements, understandings, negotiations,
      and discussions relating to the subject matter of this Agreement. With this
      Agreement the parties rescind any previous employment agreements or arrangements
      between themselves. Any supplement, modification, waiver, or termination of
      this
      Agreement is valid only if it is set forth in writing signed by both parties.
      The waiver of any provision of this Agreement shall not constitute a waiver
      of
      any other provisions and, unless otherwise stated, shall not constitute a
      continuing waiver.

    


    8.11.
      Notice.
      Any
      notice or other communication required or permitted under this Agreement shall
      be in writing and shall be deemed to have been given (i) if personally
      delivered, when so delivered, (ii) if mailed, two days after having been placed
      in the United States mail, registered or certified, postage prepaid, addressed
      to the party to whom it is directed at the address listed below or (iii) if
      given by facsimile, when the notice is transmitted to the facsimile number
      specified below, and the appropriate answerback or telephonic confirmation
      is
      received:


    
      
        
        

      

      
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    If
      to
      Calypte:

    Calypte
      Biomedical Corporation

    16290
      SW
      Upper Boones Ferry Road

    Portland,
      OR 97224

    


    Attention:
      Corporate Secretary

    Telephone:
      (503) 726-2227

    Facsimile:
      (503) 601-6299

    


    If
      to
      the Employee:

    Mr.
      Don
      Taylor

    Basset
      Shaw

    Uxmore
      Road

    Checkendon,
      RG8 0TD

    UK.

    


    Telephone:
      +44 1491 681859

     

    In
      order
      for a party to change its address or other information for the purpose of this
      section, the party must first provide notice of that change in the manner
      required by this section.

    


    EACH
      PARTY ACKNOWLEDGES that it has had an opportunity to negotiate, carefully
      consider, and receive advice on the terms of this Agreement before signing
      it.

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK

    SIGNATURE
      PAGES FOLLOW]


    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
      as
      of the date and year set forth below.

    

      
        	 	 	 	
                Calypte
                  Biomedical Corporation

              
	 	 	 	 
	Date:	
                12
                  June 2008

              	 	
                By:

              	/s/
                Roger I. Gale 
	 	 	 	
                Name:
                  Mr. Roger I. Gale

              
	 	 	 	
                Title:
                  Chairman

              
	 	 	 	 
	Date:	
                12/06/08

              	 	
                By:

              	/s/
                Don Taylor
	 	 	 	
                Name:
                  Mr. Don Taylor

              
	 	 	 	
                Title:
                  Employee

              


      

    


    
      
        
        

      

      
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