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EXHIBIT 10.3  

 
 

ESCROW AGREEMENT    
  

    THIS ESCROW AGREEMENT (this "Agreement") is made as of January 22, 2001 by and among Calypte Biomedical Corporation, a corporation incorporated under
the laws of the State of Delaware (the "Company"), the investors signatory hereto (each an "Investor" and together the "Investors") and Epstein Becker & Green, P.C., (the "Escrow Agent").
Capitalized terms used but not defined herein shall have the meanings set forth in the Convertible Debentures and Warrants Purchase Agreement referred to in the first recital. 

W I T N E S S E T H:  

    WHEREAS, the Investors will be purchasing from the Company, in the aggregate, up to $1,100,000 principal amount of Convertible Debentures (the "Convertible
Debentures") and Warrants, at the Purchase Price set forth in the Convertible Debentures and Warrants Purchase Agreement (the "Purchase Agreement") dated the date hereof between the Investors and the
Company, which will be issued as per the terms contained herein and in the Purchase Agreement; 

    WHEREAS,
it is intended that the purchase of the securities be consummated in accordance with the requirements set forth by Sections 4(2) and/or 4(6) and/or Regulation D
promulgated under the Securities Act of 1933, as amended; and 

    WHEREAS,
the Company and the Investors have requested that the Escrow Agent hold the applicable Purchase Price with respect to the Closings in escrow until the Escrow Agent has
received the Convertible Debentures, the Warrants and certain other closing documents specified herein. 

    NOW,
THEREFORE, in consideration of the covenants and mutual promises contained herein and other good and valuable consideration, the receipt and legal sufficiency of which are hereby
acknowledged and intending to be legally bound hereby, the parties agree as follows: 

 
 

ARTICLE 1
  
    TERMS OF THE ESCROW    
  

    1.1.   The
parties hereby agree to establish an escrow account with the Escrow Agent whereby the Escrow Agent shall hold the funds for the purchase of
the $1,100,000 principal amount of Convertible Debentures and the Warrants as contemplated by the Purchase Agreement. 

    1.2.   (a)  At
the first Closing, upon the Escrow Agent's receipt of the applicable Purchase Price for such Closing into its master escrow
account from the Investors, together with executed counterparts of this Agreement, the Registration Rights Agreement, the Purchase Agreement, it shall telephonically advise the Company, or the
Company's designated attorney or agent, of the amount of funds it has received into its account. 

    (b) Wire
transfers to the Escrow Agent shall be made as follows: 

Epstein
Becker & Green, P.C.

Master Escrow Account

Chase Manhattan Bank

1411 Broadway—Fifth Floor

New York, New York 10018

ABA No. 021000021

Account No. 035-1-346036

Attention: L. Borneo 

 

    1.3.   Upon
receipt of said notice, the Company shall deliver to the Escrow Agent Convertible Debentures evidencing the $550,000 principal amount of
Convertible Debentures and the Warrants to be issued to each Investor at the Closing together with: 

	(i)
	an
executed original counterpart to the Purchase Agreement;

	(ii)
	an
executed original Registration Rights Agreement;

	(iii)
	the
executed original opinion of Heller Ehrman White & McAuliffe LLP in the form of Exhibit E  to the Purchase Agreement; and

	(iv)
	an
executed original counterpart of this Escrow Agreement. 

    In
the event that the foregoing items are not in the Escrow Agent's possession within three (3) Trading Days of the Escrow Agent notifying the Company that the Escrow Agent has
custody of the Purchase Price applicable to such Convertible Debentures, then each Investor shall have the right to demand the return of said Purchase Price. 

    1.4.   At
the first Closing, once the Escrow Agent confirms the validity of the issuance of the applicable Convertible Debentures and the Warrants by
means of its receipt of a Release Notice in the form attached hereto as Exhibit X executed by the Company and each Investor, it shall verify and
enter the Exercise Price on the face of the Warrant, verify and enter the applicable Closing Date and the Set Price on each Convertible Debenture and then wire 95% of said Purchase Price per the
written instructions of the Company, net of $25,000 to Epstein, Becker & Green, P.C. for the Investor's legal, escrow and administrative costs and the remaining 5% as directed by Ladenburg
Thalmann & Co. Inc. 

    1.5.   Once
the applicable Purchase Price has been wired per the Company's instructions, the Escrow Agent shall arrange to have the Convertible
Debentures, the Warrants, the Escrow Agreement, the Registration Rights Agreement, the voting agreements and the opinion of counsel delivered as per instructions from the parties. 

    1.6.   At
the second Closing, the Company, upon receipt of said notice of receipt of funds, shall deliver to the Escrow Agent Convertible Debentures
evidencing in the aggregate $550,000 principal amount of Convertible Debentures to be issued to the Investors. 

    1.7.   In
the event that the foregoing items are not in the Escrow Agent's possession within three (3) Trading Days of the Escrow Agent notifying
the Company that the Escrow Agent has custody of the
Purchase Price applicable to such Convertible Debentures, then each Investor shall have the right to demand the return of said Purchase Price. 

    1.8.   Once
Escrow Agent confirms the validity of the issuance of the Convertible Debentures by means of its receipt of a Release Notice in the form
attached hereto as Exhibit X executed by the Company and each Investor, it shall verify and enter the applicable Closing Date and Set Price on
the Convertible Debentures and it shall immediately wire 95% of the Purchase Price per the written instructions of the Company and the remaining 5% as directed by Ladenburg Thalmann &
Co. Inc. 

    1.9.   Once
the Purchase Price has been sent as set forth above, the Escrow Agent shall then arrange to have the applicable Convertible Debentures
delivered as per instructions from the Investors. 

 
 

ARTICLE 2
  
    MISCELLANEOUS    
  

    2.1.   No
waiver or any breach of any covenant or provision herein contained shall be deemed a waiver of any preceding or succeeding breach thereof, or
of any other covenant or provision herein contained. No extension of time for performance of any obligation or act shall be deemed any extension of the time for performance of any other obligation or
act. 

2

 

    2.2.   Except as otherwise set forth above, all notices or other communications required or permitted hereunder shall be in writing, and shall be sent as
set forth in the Purchase Agreement. 

    2.3.   This
Escrow Agreement shall be binding upon and shall inure to the benefit of the permitted successors and permitted assigns of the parties
hereto. 

    2.4.   This
Escrow Agreement is the final expression of, and contains the entire agreement between, the parties with respect to the subject matter hereof
and supersedes all prior understandings with respect thereto. This Escrow Agreement may not be modified, changed, supplemented or terminated, nor may
any obligations hereunder be waived, except by written instrument signed by the parties to be charged or by its agent duly authorized in writing or as otherwise expressly permitted herein. 

    2.5.   Whenever
required by the context of this Escrow Agreement, the singular shall include the plural and masculine shall include the feminine. This
Escrow Agreement shall not be construed as if it had been prepared by one of the parties, but rather as if both parties had prepared the same. 

    2.6.   The
parties hereto expressly agree that this Escrow Agreement shall be governed by, interpreted under and construed and enforced in accordance
with the laws of the State of New York. Any action to enforce, arising out of, or relating in any way to, any provisions of this Escrow Agreement shall only be brought in a state or Federal court
sitting in New York City. 

    2.7.   The
Escrow Agent's duties hereunder may be altered, amended, modified or revoked only by a writing signed by the Company, each Investor and the
Escrow Agent. 

    2.8.   The
Escrow Agent shall be obligated only for the performance of such duties as are specifically set forth herein and may rely and shall be
protected in relying or refraining from acting on any instrument reasonably believed by the Escrow Agent to be genuine and to have been signed or presented by the proper party or parties. The Escrow
Agent shall not be personally liable for any act the Escrow Agent may do or omit to do hereunder as the Escrow Agent while acting in good faith, and without gross negligence or willful misconduct. 

    2.9.   The
Escrow Agent is hereby expressly authorized to disregard any and all warnings given by any of the parties hereto or by any other person or
corporation, excepting only orders or process of courts of law and is hereby expressly authorized to comply with and obey orders, judgments or decrees of any court. In case the Escrow Agent obeys or
complies with any such order, judgment or decree, the Escrow Agent shall not be liable to any of the parties hereto or to any other person, firm or corporation by reason of such decree being
subsequently reversed, modified, annulled, set aside, vacated or found to have been entered without jurisdiction. 

    2.10.  The
Escrow Agent shall not be liable in any respect on account of the identity, authorization or rights of the parties executing or delivering or
purporting to execute or deliver the Purchase Agreement or any documents or papers deposited or called for thereunder. 

    2.11.  The
Escrow Agent shall be entitled to employ such legal counsel and other experts as the Escrow Agent may deem necessary to advise the Escrow
Agent in connection with the Escrow Agent's duties hereunder, may rely upon the advice of such counsel, and may pay such counsel reasonable compensation therefor. The Escrow Agent has acted as legal
counsel for the Investors, and may continue to act as legal counsel for the Investors, from time to time, notwithstanding its duties as the Escrow Agent hereunder. The Company consents to the Escrow
Agent in such capacity as legal counsel for the Investors and waives any claim that such representation represents a conflict of interest on the part of the Escrow Agent. The Company understands that
the Investors and the Escrow Agent are relying explicitly on the foregoing provision in entering into this Escrow Agreement. 

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    2.12.  The Escrow Agent's responsibilities as escrow agent hereunder shall terminate if the Escrow Agent shall resign by written notice to the Company
and the Investors. In the event of any such resignation, the Investors and the Company shall appoint a successor Escrow Agent. 

    2.13.  If
the Escrow Agent reasonably requires other or further instruments in connection with this Escrow Agreement or obligations in respect hereto,
the necessary parties hereto shall join in furnishing such instruments. 

    2.14.  It
is understood and agreed that should any dispute arise with respect to the delivery and/or ownership or right of possession of the documents
or the escrow funds held by the Escrow Agent hereunder, the Escrow Agent is authorized and directed in the Escrow Agent's sole discretion (1) to retain in the Escrow Agent's possession without
liability to anyone all or any part of said documents or the escrow funds until such disputes shall have been settled either by mutual written agreement of the parties concerned by a final order,
decree or judgment or a court of competent jurisdiction after the time for appeal has expired and no appeal has been perfected, but the Escrow Agent shall be under no duty whatsoever to institute or
defend any such proceedings or (2) to deliver the escrow funds and any other property and documents held by the Escrow Agent hereunder to a state or Federal court having competent subject
matter jurisdiction and located in the City of New York in accordance with the applicable procedure therefor. 

    2.15.  The
Company and each Investor agree jointly and severally to indemnify and hold harmless the Escrow Agent and its partners, employees, agents and
representatives from any and all claims, liabilities, costs or expenses in any way arising from or relating to the duties or performance of the Escrow Agent, in its capacity as the Escrow Agent and
not as counsel to the Investor, hereunder or the transactions contemplated hereby or by the Purchase Agreement other than any such claim, liability, cost or expense to the extent the same shall have
been determined by final, unappealable judgment of a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of the Escrow Agent. 

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    IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement as of this 22nd day of January, 2001. 

	 	 	CALYPTE BIOMEDICAL CORPORATION
	

 	
 	

By:	
 	

/s/ Nancy Katz
	 	 	 	 	

	 	 	 	 	Nancy Katz, President & CEO
	

 	
 	
INVESTOR:
	

 	
 	

AMRO INTERNATIONAL, S.A.
	

 	
 	

By:	
 	

/s/ H.U. Bachofen
	 	 	 	 	

	 	 	 	 	H.U. Bachofen, Director
	

 	
 	
ESCROW AGENT:
	

 	
 	

EPSTEIN BECKER & GREEN, P.C.
	

 	
 	

By:	
 	

/s/ Robert F. Charron
	 	 	 	 	

	 	 	 	 	Robert F. Charron, Authorized Signatory

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Exhibit X to

Escrow Agreement  

 
 

RELEASE NOTICE    
  

    The UNDERSIGNED, pursuant to the Escrow Agreement, dated as of January 22, 2001 among Calypte Biomedical Corporation, the Investors signatory thereto
and Epstein Becker & Green, P.C., as Escrow Agent (the "Escrow Agreement"; capitalized terms used herein and not defined shall have the meaning ascribed to such terms in the Escrow Agreement),
hereby notify the Escrow Agent that each of the conditions precedent to the purchase and sale of the Convertible Debentures and Warrants set forth in the Convertible Debenture and Warrants Purchase
Agreement have been satisfied. The Company and the undersigned Investor hereby confirm that all of their respective representations and warranties contained in the Purchase Agreement remain true and
correct and authorize the release by the Escrow Agent of the funds and documents to be released at the Closings as described in the Escrow Agreement. This Release Notice shall not be effective until
executed by the Company and the Investor. 

    This
Release Notice may be signed in one or more counterparts, each of which shall be deemed an original. 

    IN
WITNESS WHEREOF, the undersigned have caused this Release Notice to be duly executed and delivered as of this 24th day of January, 2001. 

	 	 	CALYPTE BIOMEDICAL CORPORATION
	

 	
 	

By:	
 	

/s/ Nancy Katz
	 	 	 	 	

	 	 	 	 	Nancy Katz, President & CEO
	

 	
 	
AMRO INTERNATIONAL, S.A.
	

 	
 	

By:	
 	

/s/ H.U. Bachofen
	 	 	 	 	

	 	 	 	 	H.U. Bachofen, Director

6

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ESCROW AGREEMENT

ARTICLE 1 TERMS OF THE ESCROW

ARTICLE 2 MISCELLANEOUS

RELEASE NOTICEPrepared by MERRILL CORPORATION www.edgaradvantage.com

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EXHIBIT 10.4  

NEITHER
THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY OTHER APPLICABLE SECURITIES LAWS IN
RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER SECURITIES LAWS. NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE HEREOF MAY BE SOLD,
PLEDGED, TRANSFERRED, ENCUMBERED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR IN A TRANSACTION WHICH IS EXEMPT FROM REGISTRATION UNDER
THE PROVISIONS OF THE SECURITIES ACT. 

 
 
 

STOCK PURCHASE WARRANT
  
    To Purchase 200,000 Shares of Common Stock of
  
    Calypte Biomedical Corporation    
  

    THIS CERTIFIES that, for value received, AMRO International, S.A. (the "Holder"), is entitled, upon the terms and subject to the conditions hereinafter set
forth, at any time on or after January 24, 2001 (the "Initial Exercise Date") and on or prior to the close of business on the third anniversary of the Initial Exercise Date (the "Termination
Date"), but not thereafter, to subscribe for and purchase from Calypte Biomedical Corporation, a Delaware corporation (the "Company"), up to 200,000 shares (the "Warrant Shares") of Common Stock,
$0.001 par value, of the Company (the "Common Stock"). The purchase price of one share of Common Stock (the "Exercise Price") under this Warrant shall be $1.50. The Exercise Price and the number of
shares for which the Warrant is exercisable shall be subject to adjustment as provided herein. In the event of any conflict between the terms of this Warrant and the Convertible Debentures and
Warrants Purchase Agreement dated January 22, 2001 pursuant to which this Warrant has been issued (the "Purchase Agreement"), the Purchase Agreement shall control. Capitalized terms used and
not otherwise defined herein shall have the meanings set forth for such terms in the Purchase Agreement. 

    1.  Title to Warrant.  Prior to the Termination Date and subject to compliance with applicable laws, this
Warrant and all rights hereunder are transferable, in whole or in part, at the office or agency of the Company by the Holder hereof in person or by duly authorized attorney, upon surrender of this
Warrant together with the Assignment Form annexed hereto properly endorsed. 

    2.  Authorization of Shares.  The Company covenants that all shares of Common Stock which may be issued
upon the exercise of rights represented by this Warrant will, upon exercise of the rights represented by this Warrant, be duly authorized, validly issued, fully paid and nonassessable and free from
all taxes, liens and charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue). 

    3.  Exercise of Warrant.  Except as provided in Section 4 herein, exercise of the purchase rights
represented by this Warrant may be made at any time or times on or after the Initial Exercise Date and on or before the close of business on the Termination Date. Exercise of this Warrant or any part
hereof shall be effected by the surrender of this Warrant and the Notice of Exercise Form annexed hereto duly executed (which notice may be delivered pursuant to the notice provision of the Purchase
Agreement), at the office of the Company (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of such Holder appearing on the
books of the Company) and upon payment of the Exercise Price of the shares thereby purchased by wire transfer or cashier's check drawn on a United States bank, the Holder shall be entitled to receive
a certificate for the number of Warrant Shares so purchased. Certificates for shares purchased 

1

 

hereunder shall be delivered to the Holder within five (5) Trading Days after the date on which the Notice of Exercise Form has been deemed delivered to the Company provided that all of the
conditions of exercise of this warrant have been met by such date. This Warrant shall be deemed to have been exercised and such certificate or certificates shall be deemed to have been issued, and the
Holder or any other person so designated to be named therein shall be deemed to have become a Holder of record of such shares for all purposes, as of the date the Warrant has been exercised by payment
to the Company of the Exercise Price and all taxes required to be paid by the Holder, if any, pursuant to Section 5 prior to the issuance of such shares, have been paid. If this Warrant shall
have been exercised in part, the Company shall, at the time of delivery of the certificate or certificates representing Warrant Shares, deliver to Holder a new Warrant evidencing the rights of Holder
to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant. 

    This
Warrant may also be exercised by means of a "cashless exercise" in which the Holder shall be entitled to receive a certificate for the number of Warrant Shares equal to the
quotient obtained by dividing [(A-B) (X)] by (A), where: 

	(A)	 	=	 	the average of the high and low trading prices per share of Common Stock on the Trading Day preceding the date of such election;
	

(B)	
 	

=	
 	

the Exercise Price of the Warrants; and
	

(X)	
 	

=	
 	

the number of Warrant Shares issuable upon exercise of the Warrants in accordance with the terms of this Warrant.

    Notwithstanding anything herein to the contrary, in no event shall the Holder be permitted to exercise this Warrant for Warrant Shares to the extent that
(x) the number of shares of Common Stock owned by such Holder (other than Warrant Shares) plus (y) the number of Warrant Shares, would be equal to or exceed 9.9% of the number of shares
of Common Stock then issued and outstanding, including shares issuable upon exercise of this Warrant held by such Holder after application of this Section 3(d). As used herein, beneficial
ownership shall be determined in accordance with Section 13(d) of the Exchange Act. To the extent that the limitation contained in this Section 3(d) applies, the determination of whether
this Warrant is exercisable (in relation to other securities owned by the Holder) and of which a portion of this Warrant is exercisable shall be in the sole discretion of such Holder, and the
submission of a Notice of Exercise shall be deemed to be such Holder's determination of whether this Warrant is exercisable (in relation to other securities owned by such Holder) and of which portion
of this Warrant is exercisable, in each case subject to such aggregate percentage limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. Nothing
contained herein shall be deemed to restrict the right of a Holder to exercise this Warrant into shares of Common Stock at such time as such exercise will not violate the provisions of this
Section 3(d). The provisions of this Section 3(d) may be waived by the Holder upon, at the election of the Holder, with not less than 75 days' prior notice to the Company, and the
provisions of this Section 3(d) shall continue to apply until such 75th day (or such later date as may be specified in such notice of waiver). No exercise of this Warrant in
violation of this Section 3(d) but otherwise in accordance with this Warrant shall affect the status of the Warrant Shares as validly issued, fully-paid and nonassessable. 

    4.  No Fractional Shares or Scrip.  No fractional shares or scrip representing fractional shares shall be
issued upon the exercise of this Warrant. As to any fraction of a share which Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay a cash adjustment in respect of
such final fraction in an amount equal to the Exercise Price. 

    5.  Charges, Taxes and Expenses.  Issuance of certificates for Warrant Shares shall be made without
charge to the Holder hereof for any issue or transfer tax or other incidental expense in respect 

2

 

of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the Holder of this Warrant or in such name or
names as may be directed by the Holder subject to applicable laws; provided, however, that in the event certificates for Warrant Shares are to be issued in a name other than the name of the Holder,
this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder; and the Company may require, as a condition thereto, the payment of
a sum sufficient to reimburse it for any transfer tax incidental thereto. 

    6.  Closing of Books.  The Company will not close its shareholder books or records in any manner which
prevents the timely exercise of this Warrant. 

    7.  Transfer, Division and Combination.  (a) Subject to compliance with any applicable securities laws,
transfer of this Warrant and all rights hereunder, in whole or in part, shall be registered on the books of the Company to be maintained for such purpose, upon surrender of this Warrant at the
principal office of the Company, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient
to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of
the assignee or assignees and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not
so assigned, and this Warrant shall promptly be cancelled. A Warrant, if properly assigned, may be exercised by a new Holder for the purchase of Warrant Shares without having a new Warrant issued. 

    (b) This
Warrant may be divided or combined with other Warrants of like terms upon presentation hereof at the aforesaid office of the Company, together with a written
notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 7(a), as to any transfer
which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice. 

    (c) The
Company shall prepare, issue and deliver at its own expense (other than transfer taxes) the new Warrant or Warrants under this Section 7. 

    (d) The
Company agrees to maintain, at its aforesaid office, books for the registration and the registration of transfer of the Warrants. 

    8.  No Rights as Shareholder until Exercise.  This Warrant does not entitle the Holder to any voting
rights or other rights as a shareholder of the Company prior to the exercise hereof. Upon the surrender of this Warrant and the payment of the aggregate Exercise Price, the Warrant Shares so purchased
shall be and be deemed to be issued to such Holder as the record owner of such shares as of the close of business on the later of the date of such surrender or payment. 

    9.  Loss, Theft, Destruction or Mutilation of Warrant.  The Company covenants that upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it (which shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if
mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate. 

    10.  Saturdays, Sundays, Holidays, etc.  If the last or appointed day for the taking of any action or the
expiration of any right required or granted herein shall be a Saturday, Sunday or a legal holiday, then such action may be taken or such right may be exercised on the next succeeding day not a
Saturday, Sunday or legal holiday. 

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    11.  Adjustments of Exercise Price and Number of Warrant Shares.  (a) Stock Splits, etc. The
number and kind of securities purchasable upon the exercise of this Warrant and the Exercise Price shall be subject to adjustment from time to time upon the happening of any of the following. In case
the Company shall (i) pay a dividend in shares of Common Stock or make a distribution in shares of Common Stock to holders of its outstanding Common Stock, (ii) subdivide its outstanding
shares of Common Stock into a greater number of shares of Common Stock, (iii) combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock or (iv) issue
any shares of its capital stock in a reclassification of the Common Stock, then the number of Warrant Shares purchasable upon exercise of this Warrant immediately prior thereto shall be adjusted so
that the Holder of this Warrant shall be entitled to receive the kind and number of Warrant Shares or other securities of the Company which it would have owned or have been entitled to receive had
such Warrant been exercised in advance thereof. Upon each such adjustment of the kind and number of Warrant Shares or other securities of the Company which are purchasable hereunder, the Holder shall
thereafter be entitled to purchase the number of Warrant Shares or other securities resulting from such adjustment at an Exercise Price per Warrant Share or other security obtained by multiplying the
Exercise Price in effect immediately prior to such adjustment by the number of Warrant Shares purchasable pursuant hereto immediately prior to such adjustment and dividing by the number of Warrant
Shares or other securities of the Company resulting from such adjustment. An adjustment made pursuant to this paragraph shall become effective immediately after the effective date of such event
retroactive to the record date, if any, for such event. 

    (b)  Reorganization, Reclassification, Merger, Consolidation or Disposition of Assets.  In case the
Company shall reorganize its capital, reclassify its capital stock, consolidate or merge with or into another corporation (where the Company is not the surviving corporation or where there is a change
in or distribution with respect to the Common Stock of the Company), or sell, transfer or otherwise dispose of all or substantially all its property, assets or business to another corporation and,
pursuant to the terms of such reorganization, reclassification, merger, consolidation or disposition of assets, shares of common stock of the successor or acquiring corporation, or any cash, shares of
stock or other securities or property of any nature whatsoever (including warrants or other subscription or purchase rights) in addition to or in lieu of common stock of the successor or acquiring
corporation ("Other Property"), are to be received by or distributed to the holders of Common Stock of the Company, then the Holder shall have the right thereafter to receive, upon exercise of this
Warrant, the number of shares of common stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and Other Property receivable upon or as a result of such
reorganization, reclassification, merger, consolidation or disposition of assets by a Holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such
event. In case of any such reorganization, reclassification, merger, consolidation or disposition of assets, the successor or acquiring corporation (if other than the Company) shall expressly assume
the due and punctual observance and performance of each and every covenant and condition of this Warrant to be performed and observed by the Company and all the obligations and liabilities hereunder,
subject to such modifications as may be deemed appropriate (as determined in good faith by resolution of the Board of Directors of the Company) in order to provide for adjustments to the number of
Warrant Shares for which this Warrant is exerscisable, which shall be as nearly equivalent as practicable to the adjustments provided for in this Section 11. For purposes of this
Section 11, "common stock of the successor or acquiring corporation" shall include stock of such corporation of any class which is not preferred as to dividends or assets over any other class
of stock of such corporation and which is not subject to redemption and shall also include any evidences of indebtedness, shares of stock or other securities which are convertible into or exchangeable
for any such stock, either immediately or upon the arrival of a specified date or the happening of a specified event and any warrants or other rights to subscribe for or purchase any such stock. The
foregoing provisions of this Section 11 shall similarly apply to successive reorganizations, reclassifications, mergers, consolidations or disposition of assets. 

4

 

    12.  Voluntary Adjustment by the Company.  The Company may, at its sole discretion, at any time during
the term of this Warrant, reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the Board of Directors of the Company. 

    13.  Notice of Adjustment.  Whenever the number of Warrant Shares or number or kind of securities or
other property purchasable upon the exercise of this Warrant or the Exercise Price is adjusted as herein provided, the Company shall promptly mail by registered or certified mail, return receipt
requested, to the Holder of this Warrant notice of such adjustment or adjustments setting forth the number of Warrant Shares (and other securities or property) purchasable upon the exercise of this
Warrant and
the Exercise Price of such Warrant Shares (and other securities or property) after such adjustment, setting forth a brief statement of the facts requiring such adjustment and setting forth the
computation by which such adjustment was made. Such notice, in the absence of manifest error, shall be conclusive evidence of the correctness of such adjustment. 

    14.  Notice of Corporate Action.  If at any time: 

    (a) the
Company shall take a record of the holders of its Common Stock for the purpose of entitling them to receive a dividend or other distribution, or any right to
subscribe for or purchase any evidences of its indebtedness, any shares of stock of any class or any other securities or property, or to receive any other right, or 

    (b) there
shall be any capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company or any consolidation or
merger of the Company with, or any sale, transfer or other disposition of all or substantially all the property, assets or business of the Company to, another corporation where the Company is not the
surviving corporation, or, 

    (c) there
shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company; 

then,
in any one or more of such cases, the Company shall give to the Holder (i) at least 10 calendar days' prior written notice of the date on which a record date shall be selected for such
dividend, distribution or right or for determining rights to vote in respect of any such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, liquidation or winding
up, and (ii) in the case of any such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, dissolution, liquidation or winding up, at least 10 calendar days'
prior written notice of the date when the same shall take place. Such notice in accordance with the foregoing clause also shall specify (i) the date on which any such record is to be taken for
the purpose of such dividend, distribution or right, the date on which the holders of Common Stock shall be entitled to any such dividend, distribution or right, and the amount and character thereof,
and (ii) the date on which any such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, dissolution, liquidation or winding up is to take place and the time,
if any such time is to be fixed, as of which the holders of Common Stock shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such disposition,
dissolution, liquidation or winding up. Each such written notice shall be sufficiently given if addressed to the Holder at the last address of the Holder appearing on the books of the Company and
delivered in accordance with Section 16(d). To the extent that the notice required to be given to the Holder hereunder is material, non-public information, then such Holder shall
sign such confidentiality agreement with the Company as it or its counsel may reasonably require to protect against the premature disclosure of such event. 

    15.  Authorized Shares.  The Company covenants that during the period the Warrant is outstanding, it will
reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The
Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and 

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issue the necessary certificates for the Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that
such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Principal Market upon which the Common Stock may be listed. 

    The
Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith
assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of the Holder against impairment. Without limiting the
generality of the foregoing, the Company will (a) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par
value, (b) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares, and (c) use all
commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be necessary to enable the Company to
perform its obligations under this Warrant. 

    Upon
the request of the Holder, the Company will at any time during the period this Warrant is outstanding acknowledge in writing, in form reasonably satisfactory to Holder, the
continuing validity of this Warrant and the obligations of the Company hereunder. 

    Before
taking any action which would cause an adjustment reducing the current Exercise Price below the then par value, if any, of the Warrant Shares, the Company shall take any
corporate action which may be necessary in order that the Company may validly and legally issue fully paid and non-assessable shares of such Common Stock at such adjusted Exercise Price. 

    Before
taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain
all such
authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof. 

    16.  Miscellaneous.  

    (a)  Jurisdiction.  This Warrant shall constitute a contract under the laws of New York without regard to
its conflict of law principles or rules, and be subject to arbitration pursuant to the terms set forth in the Purchase Agreement. 

    (b)  Restrictions.  The Holder hereof acknowledges that the Warrant Shares acquired upon the exercise of
this Warrant, if not registered, will have restrictions upon resale imposed by state and federal securities laws. 

    (c)  Nonwaiver and Expenses.  No course of dealing or any delay or failure to exercise any right
hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice Holder's rights, powers or remedies, notwithstanding that all rights hereunder terminate on the
Termination Date. If the Company willfully fails to comply with any material provision of this Warrant, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and
expenses including, but not limited to, reasonable attorneys' fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise
enforcing any of its rights, powers or remedies hereunder. 

    (d)  Notices.  Any notice, request or other document required or permitted to be given or delivered to
the Holder by the Company shall be delivered in accordance with the notice provisions of the Purchase Agreement. 

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    (e)  Limitation of Liability.  No provision hereof, in the absence of affirmative action by the Holder to
exercise this Warrant or to purchase Warrant Shares, and no enumeration herein of the rights or privileges of Holder hereof, shall give rise to any liability of Holder for the purchase price of any
Warrant Shares or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company. 

    (f)  Remedies.  Holder, in addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Warrant and hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate. 

    (g)  Successors and Assigns.  Subject to applicable securities laws, this Warrant and the rights and
obligations evidenced hereby shall inure to the benefit of and be binding upon the successors of the Company and the successors and permitted assigns of the Holder. The provisions of this Warrant are
intended to be for the benefit of all Holders from time to time of this Warrant and shall be enforceable by any such Holder. 

    (h)  Indemnification.  The Company agrees to indemnify and hold harmless the Holder from and against any
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, attorneys' fees, expenses and disbursements of any kind which may be imposed upon, incurred by or
asserted against the Holder in any manner relating to or arising out of any failure by the Company to perform or observe in any material respect any of its covenants, agreements, undertakings or
obligations set forth in this Warrant; provided, however, that the Company will not be liable hereunder to the extent that any liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs, attorneys' fees, expenses or disbursements are found in a final non-appealable judgment by a court to have resulted
from the Holder's negligence, bad faith or willful misconduct in its capacity as a stockholder or warrantholder of the Company. 

    (i)  Amendment.  This Warrant may be modified or amended or the provisions hereof waived with the written
consent of the Company and the Holder. 

    (j)  Severability.  Wherever possible, each provision of this Warrant shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant. 

    (k)  Headings.  The headings used in this Warrant are for the convenience of reference only and shall
not, for any purpose, be deemed a part of this Warrant. 

[SIGNATURE PAGE FOLLOWS.]  

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    IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized. 

	Dated: January 24, 2001	 	 	 	 
	 	 	CALYPTE BIOMEDICAL CORPORATION
	

 	
 	

By:	
 	

/s/ Nancy Katz
	 	 	 	 	

	 	 	 	 	Nancy Katz, President & CEO

8

 
 
 

NOTICE OF EXERCISE    
  

To:
Calypte Biomedical Corporation 

    (1) The
undersigned hereby elects to purchase      shares of Common Stock (the "Common Stock"), of Calypte Biomedical Corporation pursuant to the terms of
the attached Warrant, and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any. 

    (2) Please
issue a certificate or certificates representing said shares of Common Stock in the name of the undersigned or in such other name as is specified below: 

	________________________________________________________________________

(Name)
	

________________________________________________________________________

(Address)
	

________________________________________________________________________

Dated: 

________________________________________________

Signature 

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ASSIGNMENT FORM
  
    (To assign the foregoing warrant, execute
  this form and supply required information.
  Do not use this form to exercise the warrant.)    
  

    FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to 

________________________________________________
whose address is 

________________________________________________________________________.

________________________________________________________________________ 

Dated:
________________________ , ____________ 

	Holder's Signature:	 	

	

Holder's Address:	
 	

	

 	
 	

____________________________________

Signature Guaranteed: ________________________________________________ 

NOTE:
The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever, and must be guaranteed
by a bank or trust company. Officers of corporations and those acting in an fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant. 

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QuickLinks

STOCK PURCHASE WARRANT

NOTICE OF EXERCISE

ASSIGNMENT FORM

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