SECURITY AGREEMENT

      SECURITY  AGREEMENT (as amended,  supplemented or otherwise  modified from
time to time,  the  "Agreement"),  dated  as of  April 4,  2005,  among  Calypte
Biomedical Corporation,  a Delaware corporation (the "Company"), and the lenders
signatory hereto (each lender including their respective successors,  endorsees,
transferees  and assigns,  a "Secured  Party",  and  collectively,  the "Secured
Parties").

                              W I T N E S S E T H:

      WHEREAS,  the Company has requested that each Secured Party severally make
certain  loans  (collectively,  "Loans")  to the  Company  in  exchange  for the
Company's  Secured 8%  Convertible  Promissory  Notes in the  aggregate  initial
principal  amount of  $8,000,000  (collectively,  the  "Notes")  and warrants to
acquire Common Stock (collectively, "Warrants"). The Notes and the Warrants each
provide the holders thereof,  including the Secured Parties, the right to obtain
shares of the  Company's  Common  Stock.  The Notes and Warrants  will be issued
pursuant to a Purchase  Agreement,  dated the date of this  Agreement  among the
Company and the Secured  Parties (the "Purchase  Agreement") and the Transaction
Documents  entered into in connection  therewith (as such term is defined in the
Purchase Agreement).

      WHEREAS,  to induce the Secured Parties to make the Loans, the Company has
agreed  to  grant  to the  Secured  Parties  a  security  interest  and  lien in
Collateral of the Company,  and to enter into and grant the lien contemplated in
this Agreement.

      NOW,  THEREFORE,  in consideration of the agreements  herein contained and
for other good and valuable consideration,  the receipt and sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:

      1. Certain Definitions.

            (a) As used in this Agreement, the following terms have the meanings
specified below:

                  "Agent" means SF Capital  Partners  Ltd., as agent for each of
         the Secured Parties pursuant to this Agreement, or such other Person as
         shall have been subsequently appointed as a successor agent pursuant to
         this Agreement.

                  "Collateral"  means  all of the  Company's  right,  title  and
         interest  in, to and  under  all of the  following  (a)  Accounts,  (b)
         Chattel Paper, (c) Documents, (d) Equipment, (e) equity interests owned
         or held  by or on  behalf  of the  Company  in any of its  Subsidiaries
         (including all certificates,  instruments and other documents,  if any,
         representing  or  evidencing  such  equity   interests),   (f)  General
         Intangibles,  (g) Goods, (h) Instruments, (i) insurance relating to the
         Collateral,   (j)  intellectual  property  (including  all  inventions,
         designs,  patents,  copyrights and trademarks),  (k) intercompany debt,
         (l) Inventory,  (m) Letter of Credit Rights,  (n) other goods and other
         personal property of such Grantor, whether tangible or intangible,  (o)
         Records, and (p) Proceeds, products,  substitutions,  accessions, rents
         and  profits  of or in respect  of any of the  foregoing,  in each case
         whether  now  owned or  hereafter  created  or  acquired  and  wherever
         located,  provided  that  "Collateral"  shall not include any  Excluded
         Assets.

                                        1
<PAGE>

                  "Excluded  Assets" means assets purchased with the proceeds of
         the Vencore  Purchase  Money  Financing and any financing  described in
         clause (d) of the  definition  in the Purchase  Agreement of "Permitted
         Indebtedness,"  only for so long as such Debt remains outstanding under
         the Vencore Purchase Money Financing or any such financing described in
         such clause (d).

                  "Obligations"  means (i) the due and  punctual  payment of (a)
         principal of and premium,  if any,  and  interest  (including  interest
         accruing   during  the   pendency   of  any   bankruptcy,   insolvency,
         receivership or other similar proceeding, regardless of whether allowed
         or allowable in such proceeding) on the Notes, when and as due, whether
         at maturity, by acceleration, upon one or more dates set for prepayment
         or otherwise, and (b) all other monetary obligations, including without
         limitation  in  respect  of  fees,  commissions,  costs,  expenses  and
         indemnities,  whether primary, secondary,  direct, contingent, fixed or
         otherwise  (including monetary obligations incurred during the pendency
         of  any   bankruptcy,   insolvency,   receivership   or  other  similar
         proceeding,   regardless  of  whether  allowed  or  allowable  in  such
         proceeding),  of the Company to the Secured Parties, in each case under
         the Transaction Documents, and (ii) the due and punctual performance of
         all covenants,  agreements,  obligations and liabilities of the Company
         or any other party (other than the Agent and the Secured Parties) under
         or pursuant to the Transaction  Documents (including the requirement to
         timely  deliver  shares of Common Stock upon a conversion  of Notes and
         exercise of Warrants).

                  "Permitted Transfer" means:

                  (i) any sale,  lease,  transfer  or other  disposition  by the
         Company or any Subsidiary of any inventory,  used,  obsolete or surplus
         equipment or other property, in the ordinary course of business;

                  (ii)  licenses  and  similar  arrangements  for the use of the
         property of the Company in the ordinary  course of business which would
         not  impair  rights of the  Secured  Parties  under this  Agreement  to
         foreclose and sell Collateral following a Default;

                  (iii)  any  sale of any  Collateral  for  fair  market  value,
         provided that, without the prior written consent of the Secured Parties
         comprising Majority-in-Interest,  the aggregate value of all Collateral
         sold after the date  hereof  pursuant  to this  clause  (iii) shall not
         exceed $500,000; or

                  (iv) and any transaction  expressly  permitted by Section 5.10
         of the Purchase Agreement.

      "UCC" means the Uniform  Commercial  as in effect from time to time in the
State of New York or, when the context implies,  the Uniform  Commercial Code as
in effect from time to time in any other applicable jurisdiction.

                                        2
<PAGE>

            (b) Terms used in this  Agreement but not otherwise  defined in this
Agreement that are defined in the Purchase  Agreement  shall have the respective
meanings given such terms in the Purchase Agreement.

            (c) When used in this  Agreement,  the following  capitalized  terms
shall have the  respective  meanings  ascribed  thereto in Article 9 of the UCC:
Accounts,  Chattel Paper,  Documents,  Equipment,  General  Intangibles,  Goods,
Instruments, Inventory, Records and Proceeds.

      2. Grant of Security Interest. As an inducement for the Secured Parties to
enter into the  transactions  contemplated by the  Transaction  Documents and to
secure the complete and timely  payment,  performance  and discharge in full, as
the case may be, of all of the Obligations, the Company hereby,  unconditionally
and  irrevocably,  grants to the  Agent for the  benefit  of  Secured  Parties a
security interest in and lien on (the "Security Interest") the Collateral.

      3. Representations,  Warranties,  Covenants and Agreements of the Company.
The Company  represents and warrants to, and covenants and agrees with,  each of
the Secured Parties as follows:

            (a) The Company has the requisite  corporate  power and authority to
enter into this Agreement and to otherwise carry out its obligations thereunder.
The execution, delivery and performance by the Company of this Agreement and the
filings  contemplated  therein have been duly authorized by all necessary action
on the part of the  Company and no further  action is  required by the  Company.
This  Agreement  has been (or upon delivery will have been) duly executed by the
Company and, when delivered in accordance with the terms hereof, will constitute
the valid and binding obligation of the Company  enforceable against the Company
in accordance with its terms,  except as such  enforceability  may be limited by
applicable bankruptcy,  insolvency,  reorganization,  moratorium, liquidation or
similar laws relating to, or affecting  generally the enforcement of, creditors'
rights and remedies or by other equitable principles of general application.

            (b) Except for Permitted Liens, the Company is the sole owner of its
rights in the Collateral, free and clear of any Liens and is fully authorized to
grant the  Security  Interest in and to pledge the  Collateral.  There is not on
file in any governmental or regulatory authority,  agency or recording office an
effective financing  statement,  security agreement or transfer or any notice of
any of the  foregoing  (other  than  those  that have been filed in favor of the
Secured  Parties  pursuant to this  Agreement or in  connection  with  Permitted
Liens)  covering or affecting any of the  Collateral.  So long as this Agreement
shall be in effect,  the Company  shall not execute and shall not  authorize the
filing of in any such  office or agency any such  financing  statement  or other
document or  instrument  (except to the extent filed or recorded in favor of the
Secured  Parties  pursuant to the terms of this Agreement or in connection  with
Permitted Liens) without the prior written consent of the Secured Parties.

            (c) The  Company  represents  and  warrants  that it has no place of
business or offices where its  respective  books of account and records are kept
(other than  temporarily  at the offices of its  attorneys  or  accountants)  or
places where Collateral is stored or located,  except as set forth on Schedule B
attached hereto.

                                        3
<PAGE>

            (d) The  Company  has no  knowledge  of any  claim  that  any of the
Collateral  or the Company's  use of any  Collateral  violates the rights of any
third party. There has been no adverse decision of which the Company is aware as
to the Company's  exclusive (or nonexclusive,  as the case may be) rights to use
the Collateral in any  jurisdiction,  and, to the knowledge of the Company there
is no proceeding  involving said rights pending or threatened  before any court,
judicial  body,   administrative  or  regulatory  agency,  arbitrator  or  other
governmental authority.

            (e) The Company shall at all times maintain its books of account and
records  relating to the  Collateral at its principal  place of business and may
not relocate such books of account and records unless it delivers to each of the
Secured  Parties at least 30 days prior to such relocation (i) written notice of
such  relocation  and the new location  thereof (which must be within the United
States)  and (ii)  evidence  that  appropriate  financing  statements  and other
necessary documents have been filed and recorded and other steps have been taken
to  perfect  the  Security  Interest  to create in favor of each of the  Secured
Parties a valid, perfected and continuing first priority lien in the Collateral,
subject only to Permitted Liens.

            (f) This Agreement creates in favor of each of the Secured Parties a
valid security interest in the Collateral, securing the payment and satisfaction
of the Obligations,  and, upon making all applicable  filings, a perfected first
priority security interest in the Collateral subject only to Permitted Liens. No
authorization  or approval of or filing  (other than the filings  referred to in
the immediately preceding sentence) with or notice to any governmental authority
or regulatory body is required  either:  (i) for the grant by the Company of, or
the effectiveness of, the Security Interest granted hereby or for the execution,
delivery  and  performance  of this  Agreement  by the  Company  or (ii) for the
perfection  of or exercise by the Secured  Parties of their  rights and remedies
hereunder.

            (g)  On the  date  of  execution  of  this  Agreement,  the  Company
authorizes each Secured Party to file one or more financing statements under the
UCC with  respect to the  Security  Interest  for filing with the  jurisdictions
indicated on Schedule B, attached hereto and in such other  jurisdictions as the
Secured Parties deem necessary.

            (h) The execution,  delivery and  performance of this Agreement does
not conflict with or cause a breach or default, or an event that with or without
the passage of time or notice,  shall constitute a breach or default,  under any
agreement  to which the Company is a party or by which the Company is bound.  No
consent (including,  without limitation,  from stock holders or creditors of the
Company) is required  for the Company to enter into and perform its  obligations
hereunder, other than consents already obtained by the Company.

            (i) The Company  shall at all times  maintain the Security  Interest
provided for hereunder as a valid and perfected first priority security interest
in the  Collateral  (subject  only to  Permitted  Liens) in favor of each of the
Secured  Parties and insure that such Security  Interest  remains  senior to all
existing  and  hereafter  created  security  interests  and  Liens,  other  than
Permitted  Liens.  The Company shall safeguard and protect all  Collateral.  The
Company  hereby  agrees to defend the same against any and all  persons.  At the
request of the Agent and/or Secured  Parties,  the Company will sign and deliver
to the  Secured  Parties at any time or from time to time one or more  financing
statements  pursuant to the UCC in form  reasonably  satisfactory to the Secured
Parties and will pay the cost of filing the same in all public offices  wherever
filing is, or is deemed by the Secured  Parties to be,  necessary  to effect the
rights and obligations  provided for herein.  Without limiting the generality of
the foregoing, the Company shall pay all fees, taxes and other amounts necessary
to maintain the Security  Interest  hereunder,  and the Company shall obtain and
furnish to the Secured  Parties from time to time,  upon demand,  such  releases
and/or  subordinations of claims and liens which may be required to maintain the
priority of the Security Interest hereunder.

                                       4
<PAGE>

            (j) Other  than  Permitted  Transfers,  the  Company  will not sell,
transfer,  lease or otherwise dispose of any of the Collateral without the prior
written consent of the Secured Parties.

            (k) The Company  shall keep and preserve the tangible  Collateral in
good condition,  repair and order, and shall not knowingly operate or locate any
such  Collateral  (or cause to be operated or located) in any area excluded from
insurance  coverage  unless,  in each case, where the failure to comply with the
foregoing  provisions  does not result in an adverse  effect on the value of the
Collateral or on the Secured Parties' security interest therein.

            (l) The Company shall,  within ten (10) days of obtaining  knowledge
thereof,  advise the Agent, in sufficient  detail, of any substantial  change in
all or any material  portion of the  Collateral,  and of the  occurrence  of any
event which would have a material  adverse effect on the value of the Collateral
or on the Secured Parties' security interest therein.

            (m) The Company  shall  promptly  execute and deliver to the Secured
Parties  such  further  deeds,  mortgages,   assignments,  security  agreements,
financing   statements  or  other  instruments,   documents,   certificates  and
assurances  and take such further  action as  necessary  to perfect,  protect or
enforce their security interest in the Collateral.  The Company  represents that
on the date hereof all equity  interests owned by or on behalf of the Company in
any of its Subsidiaries  are not  certificated.  If, after the date hereof,  any
such equity  interests are  certificated,  the Company shall promptly deliver to
the Agent any and all share  certificates  evidencing  equity interests owned or
held by or on behalf of the Company in any of its  Subsidiaries,  together  with
appropriate  stock powers,  endorsed in blank, with respect to such certificated
securities, such certificates to be held in custody by the Agent until such time
as this  Security  Agreement  and  the  Security  Interest  shall  terminate  in
accordance with Section 16 hereof.

            (n)  The  Company  shall  permit  the  Secured   Parties  and  their
representatives  and agents upon prior written consent to inspect the Collateral
at any  time  during  normal  business  hours,  and to make  copies  of  records
pertaining to any material item of Collateral as may be reasonably  requested by
the Secured Parties from time to time.

            (o) The Company shall promptly notify the Agent in sufficient detail
upon becoming  aware of any  attachment,  garnishment,  execution or other legal
process levied against any Collateral and of any other  information  received by
the Company that  reasonably  would be expected to have an adverse affect on the
value of the Collateral, the Security Interest or the rights and remedies of the
Secured Parties hereunder.

            (p) The Company  shall not use or permit any  Collateral  to be used
unlawfully or in violation of any provision of this  Agreement or any applicable
statute,  regulation  or  ordinance  or any  policy of  insurance  covering  the
Collateral  where  violation  is  reasonably  likely to have a material  adverse
effect on the Secured  Parties'  rights in the  Collateral  or Secured  Parties'
ability to foreclose on the Collateral.

            (q) Other than Permitted  Liens,  the Company shall not grant to any
person or entity any rights or interest in or to any of the Collateral.

                                       5
<PAGE>

            (r)  The  Company  shall  notify  the  Agent  of any  change  in the
Company's name,  identity,  chief place of business,  chief executive  office or
residence within 30 days of such change.

      4. Defaults. Each of the following events shall be an "Event of Default":

            (a) the  occurrence  of an Event of Default  under and as defined in
any Note;

            (b) any  representation or warranty of the Company in this Agreement
or in any other  Transaction  Document shall prove to have been incorrect in any
material respect when made or deemed made; and

            (c) the  failure by the  Company  to  observe or perform  any of its
obligations hereunder for ten (10) Business Days after receipt by the Company of
written notice of such failure from any Secured Party.

      5. Duty To Hold In Trust.  Upon the occurrence and during the continuation
of any Event of Default,  the Company shall,  upon receipt by it of any revenue,
income or other sums subject to the Security Interest,  or of any check,  draft,
note, trade  acceptance or other instrument  evidencing an obligation to pay any
such sum, hold the same in trust for the Secured  Parties and shall upon request
by the  Secured  Parties  forthwith  endorse  and  transfer  any  such  sums  or
instruments, or both, to the Secured Parties for application to the satisfaction
of the Obligations.

      6. Rights and Remedies Upon Default.  Upon the  occurrence  and during the
continuation  of any Event of  Default,  the Agent (on  behalf  of,  and for the
benefit of itself and each  Secured  Party) shall have the right to exercise all
of the  remedies  conferred  hereunder,  under the Notes,  and the Agent and the
Secured  Parties shall have all the rights and remedies of a secured party under
the UCC. Without limitation, the Secured Parties shall have the following rights
and powers upon and during the continuance of an Event of Default:

            (a) The  Agent  shall  have  the  right  to take  possession  of all
tangible  manifestations or embodiments of the Collateral and, for that purpose,
without  breaching  the peace enter,  with the aid and  assistance of any person
previously  identified to, and approved in writing by, the Company, any premises
where the  Collateral,  or any part thereof,  is placed and remove the same, and
the Company shall  assemble the Collateral and make it available to the Agent at
the Company's premises.

            (b) The Agent  shall have the right to assign,  sell,  or  otherwise
dispose of and deliver all or any part of the  Collateral,  at public or private
sale or otherwise,  either with or without special  conditions or  stipulations,
for cash or on credit (for United  States  Dollars or such other  currency as it
may choose) or for future  delivery,  in such parcel or parcels and at such time
or times and at such place or places,  and upon such terms and conditions as the
Agent may deem commercially reasonable, all without (except as shall be required
by  applicable  statute  and cannot be waived)  advertisement  or demand upon or
notice to the Company or right of  redemption  of the Company,  which are hereby
expressly  waived.  Upon  each  such  sale,  assignment  or  other  transfer  of
Collateral,  the Agent may, unless  prohibited by applicable law which cannot be
waived,  purchase all or any part of the  Collateral  being sold,  free from and
discharged  of all  trusts,  claims,  right of  redemption  and  equities of the
Company, which are hereby waived and released.

                                       6
<PAGE>

            (c) The Agent may  sublicense,  to the same  extent  the  Company is
permitted by law and contract to do so, whether on an exclusive or non-exclusive
basis,  any of the  Collateral  throughout  the world for such  period,  on such
conditions and in such manner as the Agent shall, in its reasonable  discretion,
determine.

            (d) The Agent may (without  assuming any  obligations or liabilities
thereunder),  at any  time,  enforce  (and  shall  have the  exclusive  right to
enforce)  against licensee or sublicensee all rights and remedies of the Company
in, to and under any license agreement with respect to such Collateral, and take
or refrain from taking any action thereunder.

            (e) The Agent may, in order to implement  the  assignment,  license,
sale or other  disposition  of any of the  Collateral  pursuant to this Section,
pursuant to the  authority  provided  for in Section 12,  execute and deliver on
behalf of the Company one or more instruments of assignment of the Collateral in
form suitable for filing,  recording or registration in any jurisdictions as the
Secured Parties may determine advisable.

            (f) In the event  that any  Secured  Party  shall  recover  from the
Company or the Collateral more than its pro rata share of the  Obligations  owed
to all  Secured  Parties  hereunder,  whether  by  agreement,  understanding  or
arrangement with the Company or any other Person,  set off or other means,  such
Secured Party shall immediately deliver or pay over to the other Secured Parties
their pro rata portion of any such recovery in the form received.

      7. Applications of Proceeds;  Expenses. (a) The proceeds of any such sale,
sublicense or other  disposition  of the Collateral  hereunder  shall be applied
first, to the expenses of retaking,  holding, storing,  processing and preparing
for sale, selling, and the like (including,  without limitation, any taxes, fees
and other costs  incurred in  connection  therewith) of the  Collateral,  to the
reasonable  attorneys'  fees and expenses  incurred by the Agent and/or  Secured
Parties in enforcing its rights  hereunder and in  connection  with  collecting,
storing  and  disposing  of the  Collateral,  and  then to  satisfaction  of the
Obligations, and to the payment of any other amounts required by applicable law,
after which the Secured  Parties shall pay to the Company any surplus  proceeds.
If, upon the sale, license or other disposition of the Collateral,  the proceeds
thereof are  insufficient  to pay all  amounts to which the Secured  Parties are
legally entitled,  the Company will be liable for the deficiency.  To the extent
permitted by applicable law, the Company waives all claims,  damages and demands
against the Secured Parties arising out of the repossession,  removal, retention
or sale  of the  Collateral,  unless  due to the  gross  negligence  or  willful
misconduct of the Agent and/or Secured Parties.

            (b) The  Company  agrees to pay all  out-of-pocket  fees,  costs and
expenses  reasonably  incurred in connection with any filing required hereunder,
including,   without   limitation,   any  financing   statements,   continuation
statements,  partial releases and/or  termination  statements related thereto or
any expenses of any searches reasonably required by the Agent. The Company shall
also pay all other  claims and charges  which in the  reasonable  opinion of the
Agent and/or Secured Parties would reasonably be expected to prejudice,  imperil
or otherwise affect the Collateral or the Security Interest therein. The Company
will also,  upon demand,  pay to the Agent and/or Secured  Parties the amount of
any and all reasonable  expenses,  including the reasonable fees and expenses of
its  counsel  and of any experts  and  agents,  which the Agent  and/or  Secured
Parties may incur in connection with the custody or preservation of, or the sale
of, collection from, or other realization upon, any of the Collateral.

                                       7
<PAGE>

      8. Responsibility for Collateral.  The Company assumes all liabilities and
responsibility  in connection  with all  Collateral,  and the obligations of the
Company  hereunder or under the Notes shall in no way be affected or  diminished
by reason of the loss, destruction,  damage or theft of any of the Collateral or
its unenforceability or unavailability for any reason.

      9. Security Interest Absolute.  In the event that at any time any transfer
of any Collateral or any payment received by the Secured Parties hereunder shall
be deemed by final  order of a court of  competent  jurisdiction  to have been a
voidable preference or fraudulent  conveyance under the bankruptcy or insolvency
laws of the United  States,  or shall be deemed to be otherwise due to any party
other  than  the  Secured  Parties,  then,  in any  such  event,  the  Company's
obligations hereunder shall survive, and shall not be discharged or satisfied by
any prior  payment  thereof,  but shall  remain a valid and  binding  obligation
enforceable  in accordance  with the terms and  provisions  hereof.  The Company
waives all right to require  the  Secured  Parties to proceed  against any other
person or to apply any  Collateral  which the  Secured  Parties  may hold at any
time,  or to  marshal  assets,  or to pursue  any other  remedy.  To the  extent
permitted by applicable law, the Company waives any defense arising by reason of
the application of the statute of limitations to any obligation secured hereby.

      10. Term of  Agreement.  This  Agreement and the Security  Interest  shall
terminate  on the date on which all  payments  under the Notes have been made in
full or the Notes have been  converted  pursuant  to the terms  thereof  and all
other  Obligations have been paid or discharged in full. Upon such  termination,
the Secured Parties, at the request and at the expense of the Company, will join
in executing  any  termination  statement  and other filings with respect to any
financing  statement  executed and filed  pursuant to this Agreement or required
for evidencing termination of the Security Interest or this Agreement.

      11. Power of Attorney;  Further Assurances. (a) The Company authorizes the
Agent,  and does hereby  make,  constitute  and  appoint it, and its  respective
officers, agents, successors or assigns with full power of substitution,  as the
Company's true and lawful  attorney-in-fact,  with power,  in its own name or in
the name of the Company,  to, after the occurrence and during the continuance of
an Event of Default,  (i) endorse any notes,  checks,  drafts,  money orders, or
other instruments of payment (including  payments payable under or in respect of
any  policy  of  insurance)  in  respect  of the  Collateral  that may come into
possession  of the Secured  Parties;  (ii) to sign and endorse any UCC financing
statement or any invoice,  freight or express bill,  bill of lading,  storage or
warehouse  receipts,  drafts against  Company,  assignments,  verifications  and
notices  in  connection  with  accounts,  and other  documents  relating  to the
Collateral;  (iii) to pay or discharge taxes, liens, security interests or other
encumbrances  at  any  time  levied  or  placed  on or  threatened  against  the
Collateral; (iv) to demand, collect, receipt for, compromise, settle and sue for
monies due in respect of the Collateral; and (v) generally, to do, at the option
of the Secured Parties,  and at the Company's expense, at any time, or from time
to time,  all acts and  things  which the  Secured  Parties  deem  necessary  to
protect,  preserve and realize  upon the  Collateral  and the Security  Interest
granted therein,  in order to effect the intent of this Agreement and the Notes,
all as fully and  effectually  as the Company might or could do; and the Company
hereby  ratifies all that said attorney shall lawfully do or cause to be done by
virtue  hereof.  This power of attorney is coupled with an interest and shall be
irrevocable for the term of this Agreement.

                                       8
<PAGE>

            (b)  On  a  continuing  basis,  the  Company  will  make,   execute,
acknowledge,  deliver,  file and  record,  as the case may be,  with the  proper
filing and recording places in any jurisdiction,  including, without limitation,
the   jurisdictions   indicated  on  Schedule  B,  attached  hereto,   all  such
instruments,  and take all such  action as  necessary  to perfect  the  Security
Interest granted hereunder and otherwise to carry out the intent and purposes of
this Agreement,  or for assuring and confirming to the Secured Parties the grant
or  perfection  of a first  priority  security  interest in all the  Collateral,
subject to Permitted Liens.

            (c)  The  Company  hereby  irrevocably  appoints  the  Agent  as the
Company's  attorney-in-fact,  with full  authority in the place and stead of the
Company  and in the  name of the  Company,  from  time  to  time in the  Agent's
discretion,  to  file,  in  its  sole  discretion,  one  or  more  financing  or
continuation  statements  and  amendments  thereto,   relative  to  any  of  the
Collateral.

12. Agent.

            (a) Actions. The Agent shall at all times act upon and in accordance
with written instructions  received from a  Majority-in-Interest  (as defined in
Section  15) from time to time.  The Agent shall be deemed to be  authorized  on
behalf of each Secured  Party to act on behalf of such Secured  Party under this
Agreement   and,   in   the   absence   of   written    instructions    from   a
Majority-in-Interest  (with  respect  to which  the Agent  agrees  that it will,
subject to the last two sentences of this Section,  comply,  except as otherwise
advised by counsel),  to exercise such powers  hereunder  and  thereunder as are
specifically  delegated  to or  required  of the Agent by the terms  hereof  and
thereof,  together with such powers as may be reasonably incidental thereto. The
Agent  shall  have no duty to  ascertain  or inquire  as to the  performance  or
observance  of any of the terms of this  Agreement by the Company.  By accepting
their Notes each Secured  Party shall be deemed to have agreed to indemnify  the
Agent (which  agreement  shall survive any  termination  of such Secured  Party'
percentage),  from and against  any and all  liabilities,  obligations,  losses,
damages, penalties,  actions, judgments, suits, costs, expenses or disbursements
of any kind or nature  whatsoever  which may at any time be imposed on, incurred
by, or asserted  against the Agent in any way relating to or arising out of this
Agreement  and the  Notes,  including  the  reimbursement  of the  Agent for all
out-of-pocket  expenses  (including  attorneys'  fees)  incurred  by  the  Agent
hereunder or in  connection  herewith or in  enforcing  the  Obligations  of the
Company under this Agreement or the Notes, in all cases as to which the Agent is
not reimbursed by the Company;  provided,  that no Secured Party shall be liable
for the  payment  of any  portion  of  such  liabilities,  obligations,  losses,
damages, penalties,  actions, judgments, suits, costs, expenses or disbursements
determined by a court of competent  jurisdiction  in a final  proceeding to have
resulted  solely from the Agent's gross  negligence or willful  misconduct.  The
Agent shall not be required to take any action  hereunder or under the Notes, or
to prosecute or defend any suit in respect of this Agreement or under the Notes,
unless the Agent is indemnified to its  reasonable  satisfaction  by the Secured
Parties against loss, costs, liability and expense. If any indemnity in favor of
the Agent shall become impaired,  it may call for additional indemnity and cease
to do the acts indemnified against until such additional indemnity is given.

                                       9
<PAGE>

            (b)  Exculpation.  Neither  the  Agent  nor  any of  its  directors,
officers, partners, members,  shareholders,  employees or agents shall be liable
to any  Secured  Party for any  action  taken or omitted to be taken by it under
this Agreement or the Notes, or in connection herewith or therewith,  except for
its own  willful  misconduct  or  gross  negligence  or be  responsible  for the
consequences  of any  error  in  judgment.  Neither  the  Agent  nor  any of its
directors,  officers, partners, members,  shareholders,  employees or agents has
any fiduciary  relationship  with any Secured Party by virtue of this Agreement.
The Agent  shall  not be  responsible  to any  Secured  Party for any  recitals,
statements,  representations or warranties herein or in any certificate or other
document delivered in connection  herewith or for the authorization,  execution,
effectiveness,     genuineness,    validity,     enforceability,     perfection,
collectibility,  or sufficiency  of this  Agreement or the Notes,  the financial
condition of the Company or the condition or value of any of the Collateral,  or
be required to make any inquiry  concerning either the performance or observance
of any of the terms,  provisions or  conditions of this  Agreement or the Notes,
the financial condition of the Company or the existence or possible existence of
any default or event of default. The Agent shall be entitled to rely upon advice
of counsel concerning legal matters and upon any notice,  consent,  certificate,
statement or writing which it believes to be genuine and to have  presented by a
proper person.

            (c)  Obligations  Held by the Agent.  The Agent  shall have the same
rights and powers with respect to any Notes held by it or any of its affiliates,
as any Secured Party and may exercise the same as if it were not the Agent. Each
of the Company and each Secured Party hereby  waives,  and each successor to any
Secured  Party  shall be deemed to waive,  any right to  disqualify  any Secured
Party from  serving as the Agent or any claim  against  that  Secured  Party for
serving as Agent.

            (d) Copies,  etc. The Agent shall give prompt notice to each Secured
Party of each notice or request  required or  permitted to be given to the Agent
by the  Company  pursuant  to the  terms  of  this  Agreement.  The  Agent  will
distribute to each Secured Party each  instrument and other  agreement  received
for its  account  and copies of all other  communications  received by the Agent
from  the  Company  for  distribution  to each  Secured  Party  by the  Agent in
accordance  with the terms of this  Agreement.  Notwithstanding  anything herein
contained to the contrary,  all notices to and  communications  with the Company
under this Agreement shall be effected by each Secured Party through the Agent.

            (e)  Resignation of Agent.  The Agent may resign as such at any time
upon at least  thirty (30) days' prior notice to the Company and all the Secured
Parties,  such  resignation  not to be effective  until a successor  Agent is in
place.  The Agent shall be obliged to resign  should it cease to hold any Notes.
If the  Agent at any time  shall  resign,  a  Majority-in-Interest  may  jointly
appoint another Secured Party as a successor Agent which shall thereupon  become
the Agent  hereunder.  Upon the acceptance of any appointment as Agent hereunder
by a successor Agent, such successor Agent shall be entitled to receive from the
retiring Agent such documents of transfer and assignment as such successor Agent
may reasonably  request,  and shall thereupon  succeed to and become vested with
all  rights,  powers,  privileges,  and duties of the  retiring  Agent,  and the
retiring Agent shall be discharged  from its duties and  obligations  under this
Agreement.

                                       10
<PAGE>

            (f) Replacement of Agent. A Majority-in-Interest may at any time and
for any reason  replace the Agent with a  successor  Agent  jointly  selected by
them,  upon at least five (5) days  written  notice to the Company and the other
Secured Parties.  Upon the acceptance of any appointment as Agent hereunder by a
successor  Agent,  such  successor  Agent shall be entitled to receive  from the
terminated  Agent such  documents of transfer and  assignment as such  successor
Agent may reasonably  request,  and shall thereupon succeed to and become vested
with all rights, powers,  privileges,  and duties of the retiring Agent, and the
terminated Agent shall be discharged from its duties and obligations  under this
Agreement.

      13.  Notices.  All  notices,  requests,  demands and other  communications
hereunder shall be in writing,  with copies to all the other parties hereto, and
shall be deemed to have been duly  given  when (i) if  delivered  by hand,  upon
receipt,  (ii) if sent by facsimile,  upon receipt of proof of sending  thereof,
(iii) if sent by  nationally  recognized  overnight  delivery  service  (receipt
requested), the next business day or (iv) if mailed by first-class registered or
certified  mail,  return receipt  requested,  postage  prepaid,  four days after
posting in the U.S. mails, in each case if delivered to the following addresses:

If to the Company:

                           Calypte Biomedical Corporation
                           5000 Hopyard Road, Suite 480
                           Pleasanton, CA 94588
                           Facsimile No.:  (925) 730-0146
                           Attn: Chief Financial Officer

With a copy to:            Coudert Brothers LLP
                           333 S. Hope Street, Suite 2300
                           Los Angeles, CA 90071
                           Facsimile No.:  (213) 229-2999
                           Attn:  John St. Clair, Esq.

If to the Agent:           SF Capital Partners Ltd.
                           c/o Stark Offshore Management LLC
                           3600 S. Lake Drive
                           St. Francis, WI 53235
                           Facsimile No.: (414) 294-7700
                           Attn: Brian Davidson

If to Secured Parties:     To the address set forth under such  Secured Parties'
                           name on the signature pages hereto.

      14.  Other  Security.  To the  extent  that  the  Obligations  are  now or
hereafter  secured by property  other than the  Collateral or by the  guarantee,
endorsement or property of any other person, firm,  corporation or other entity,
then the Secured  Parties  shall have the right,  in their sole  discretion,  to
pursue,  relinquish,  subordinate,  modify or take any other action with respect
thereto,  without in any way modifying or affecting any of the Secured  Parties'
rights and remedies hereunder.

      15. Actions by Secured Parties. Any action required or permitted hereunder
to be taken by or on behalf of the Secured Parties shall,  for such action to be
valid, require the approval of the  Majority-in-Interest  prior to the taking of
such action.  If the consent,  approval or disapproval of the Secured Parties is
required or permitted  pursuant to this  Agreement,  such  consent,  approval or
disapproval   shall  only  be  valid  if  given  by  the   Majority-in-Interest.
"Majority-in-Interest"  means the Secured Party or Secured  Parties (as the case
may be) holding in excess of 50% of the outstanding  aggregate  principal amount
under the Notes, determined on a cumulative basis.

                                       11
<PAGE>

      16.  Termination  and Release.  This  Security  Agreement and the Security
Interest shall terminate when all Obligations have been finally and indefeasibly
paid in full.  Upon the  effectiveness  of any written consent to the release of
the Security Interest in any Collateral  pursuant to Section 6.4 of the Purchase
Agreement,  the  Security  Interest in such  Collateral  shall be  automatically
released.  Upon any sale, transfer or other disposition of Collateral  permitted
by the Loan  Documents  and Section 3(j) hereof,  the Security  Interest in such
Collateral  shall be  automatically  released (other than to the extent any such
sale, transfer or other disposition of such Collateral would,  immediately after
giving  effect  thereto,  result  in the  receipt  by the  Company  of any other
property  (whether in the form of Proceeds or otherwise) that would, but for the
release of the Security  Interest  therein  pursuant to this clause,  constitute
Collateral,  in which event the Lien created  hereunder  shall  continue in such
property).  In  connection  with any  termination  or release  pursuant  to this
Section,  the Agent shall  execute and deliver to the Company,  at the Company's
own cost and expense, all UCC termination  statements and similar documents that
the Company may reasonably request to evidence such termination or release.  Any
execution  and delivery of documents  pursuant to this Section  shall be without
recourse to or warranty by the Agent or any other Secured Party.

      17.  Miscellaneous.  (a) No course of dealing  between the Company and the
Secured Parties,  nor any failure to exercise,  nor any delay in exercising,  on
the part of the Secured Parties, any right, power or privilege hereunder,  under
the Notes or under this Agreement shall operate as a waiver  thereof;  nor shall
any single or partial  exercise of any right,  power or  privilege  hereunder or
thereunder preclude any other or further exercise thereof or the exercise of any
other right, power or privilege.

            (b) All of the rights  and  remedies  of the  Secured  Parties  with
respect to the Collateral,  whether  established  hereby, by the Notes or by any
other agreements, instruments or documents or by law shall be cumulative and may
be exercised singly or concurrently.

            (c) This Agreement  constitutes the entire  agreement of the parties
with respect to the subject matter hereof and is intended to supersede all prior
negotiations,  understandings  and agreements  with respect  thereto.  Except as
specifically set forth in this Agreement,  no provision of this Agreement may be
modified  or amended  except by a written  agreement  signed by the  Company and
Secured Parties comprising Majority-in-Interest.

            (d) In the event that any provision of this  Agreement is held to be
invalid,  prohibited or unenforceable in any jurisdiction for any reason, unless
such provision is narrowed by judicial construction, this Agreement shall, as to
such jurisdiction,  be construed as if such invalid, prohibited or unenforceable
provision  had been more narrowly  drawn so as not to be invalid,  prohibited or
unenforceable.   If,  notwithstanding  the  foregoing,  any  provision  of  this
Agreement  is  held  to  be  invalid,   prohibited  or   unenforceable   in  any
jurisdiction,  such provision, as to such jurisdiction,  shall be ineffective to
the  extent  of  such  invalidity,   prohibition  or  unenforceability   without
invalidating the remaining  portion of such provision or the other provisions of
this  Agreement  and without  affecting the validity or  enforceability  of such
provision or the other provisions of this Agreement in any other jurisdiction.

                                       12
<PAGE>

            (e) No  waiver of any  breach or  default  or any right  under  this
Agreement shall be considered  valid unless in writing and signed by the Company
and Secured Parties comprising Majority-in-Interest, and no such waiver shall be
deemed a waiver of any  subsequent  breach or default  or right,  whether of the
same or similar nature or otherwise.

            (f) This Agreement shall be binding upon and inure to the benefit of
each party hereto and its successors and assigns.

            (g) Each  party  shall take such  further  action  and  execute  and
deliver such further  documents as may be necessary or  appropriate  in order to
carry out the provisions and purposes of this Agreement.

            (h) This Agreement shall be construed in accordance with the laws of
the State of New York.  Each of the parties  hereto  irrevocably  submits to the
exclusive  jurisdiction  of any New York State or United  States  Federal  court
sitting in New York  county  over any  action or  proceeding  arising  out of or
relating to this Agreement, and the parties hereto hereby irrevocably agree that
all claims in respect of such action or proceeding  may be heard and  determined
in such New York State or Federal  court.  The parties hereto agree that a final
judgment  in any  such  action  or  proceeding  shall be  conclusive  and may be
enforced in other  jurisdictions  by suit on the judgment or in any other manner
provided by law. The parties  hereto further waive any objection to venue in the
State of New York and any  objection to an action or  proceeding in the State of
New York on the basis of forum non conveniens.

            (i) EACH PARTY HERETO HEREBY AGREES TO WAIVE ITS  RESPECTIVE  RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION  BASED  UPON OR  ARISING  OUT OF
THIS AGREEMENT.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL  ENCOMPASSING OF
ANY  DISPUTES  THAT MAY BE FILED IN ANY  COURT AND THAT  RELATE  TO THE  SUBJECT
MATTER OF THIS AGREEMENT,  INCLUDING WITHOUT  LIMITATION  CONTRACT CLAIMS,  TORT
CLAIMS,  BREACH OF DUTY CLAIMS AND ALL OTHER  COMMON LAW AND  STATUTORY  CLAIMS.
EACH PARTY HERETO  ACKNOWLEDGES  THAT THIS WAIVER IS A MATERIAL  INDUCEMENT  FOR
EACH PARTY TO ENTER INTO A BUSINESS  RELATIONSHIP,  THAT EACH PARTY HAS  ALREADY
RELIED ON THIS WAIVER IN ENTERING  INTO THIS  AGREEMENT AND THAT EACH PARTY WILL
CONTINUE TO RELY ON THIS WAIVER IN THEIR  RELATED  FUTURE  DEALINGS.  EACH PARTY
FURTHER  WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL
COUNSEL,  AND THAT SUCH PARTY KNOWINGLY AND  VOLUNTARILY  WAIVES ITS RIGHTS TO A
JURY TRIAL  FOLLOWING SUCH  CONSULTATION.  THIS WAIVER IS  IRREVOCABLE,  MEANING
THAT,  NOTWITHSTANDING  ANYTHING HEREIN TO THE CONTRARY,  IT MAY NOT BE MODIFIED
EITHER  ORALLY OR IN  WRITING,  AND THIS WAIVER  SHALL  APPLY TO ANY  SUBSEQUENT
AMENDMENTS,  RENEWALS AND SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. IN THE
EVENT OF A LITIGATION,  THIS  AGREEMENT  MAY BE FILED AS A WRITTEN  CONSENT TO A
TRIAL BY THE COURT.

                                       13
<PAGE>

            (j) This  Agreement  may be executed in any number of  counterparts,
each of which when so  executed  shall be deemed to be an original  and,  all of
which taken together shall  constitute one and the same Agreement.  In the event
that any signature is delivered by facsimile transmission,  such signature shall
create a valid  binding  obligation  of the party  executing (or on whose behalf
such  signature is executed)  the same with the same force and effect as if such
facsimile signature were the original thereof.

                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                            SIGNATURE PAGE TO FOLLOW]


                                       14
<PAGE>


      IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement
to be duly executed on the day and year first above written.

                                        CALYPTE BIOMEDICAL CORPORATION

                                        By:
                                           -------------------------------------
                                           Name:  Richard D. Brounstein
                                           Title: EVP and CFO







<PAGE>


      IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement
to be duly executed on the day and year first above written.


                                        By:
                                           -------------------------------------
                                           Name:
                                           Title:

                                        Address for Notice:




                                        With a copy to:





                                       16
<PAGE>