Document:

THROUGHOUT THIS AGREEMENT, WHERE INFORMATION HAS BEEN REPLACED BY AN ASTERISK
(*), THAT INFORMATION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE
24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. THE
OMITTED INFORMATION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

                                                                   EXHIBIT 10.67

                                LICENSE AGREEMENT

         This LICENSE AGREEMENT ("Agreement") is made and effective as of the
1st day of June, 2004, by and between PARIS HILTON ENTERTAINMENT INC., with
offices at 250 North Canon Drive,2nd Floor, Beverly Hills, CA 90210
("Licensor"), and PARLUX FRAGRANCES, INC., a public Delaware corporation with
offices at 3725 S.W. 30th Avenue, Ft. Lauderdale, Fl. 33312 ("Licensee")
(together the "Parties").

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

         WHEREAS, by way of a master license (the "Master License") from Ms.
Paris Hilton, an individual with a mailing address of c/o Ms. Wendy White, 250
North Canon Drive, 2nd Floor, Beverly Hills, CA 90210, to Licensor, Licensor has
the sole and exclusive rights to license the Licensed Mark (as hereinafter
defined) pursuant to the terms hereof; and

         WHEREAS, Licensee is engaged in the business of manufacturing,
promoting and selling Articles (as hereinafter defined) and Licensor desires to
obtain the services of Licensee in connection with the manufacture, promotion
and sale of the Articles bearing the Licensed Mark; and

         WHEREAS, Licensor is willing to grant the license contained in this
Agreement and Licensee desires to obtain from Licensor, the exclusive right and
license to use the Licensed Mark in the Territory (as hereinafter defined) for
use on and in connection with the manufacture, promotion, distribution and sale
of Articles.

         NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, the parties hereto covenant and agree as follows:

                                      -1-
<PAGE>

                                    ARTICLE 1

                                   Definitions

         The following definitions shall apply:

A.                TERRITORY. All countries of the world and all duty-free-shops,
                  ships, airplanes, military bases and diplomatic missions of
                  every country of the world, including the world-wide web.

B.                ARTICLES. Men's and women's fragrances and related personal
                  care products such as body lotion, body creme, body mist, hand
                  creme, bath and shower gel, massage oil, dusting powder, after
                  shave, after shave balm or gel, deodorant stick and bath soap,
                  which bear the Licensed Mark under this Agreement. Licensee
                  shall have the right of first refusal for cosmetics, skin care
                  products and home/environmental products such as candles,
                  potpourri and incense (the "Additional Products") pursuant to
                  Article 2 hereof.

C.                LICENSED MARK. The trademark PARIS HILTON and such other
                  trademarks as are, from time to time, agreed to by Licensor.
                  Licensor has filed to register the Licensed Mark in the United
                  States Patent and Trademark Office in International Class 3
                  for fragrances on May 5, 2004, Serial No. 78/412749.

D.                NET SALES. The sales price at which Licensee or any Subsidiary
                  or Affiliate (as hereinafter defined) bills its Non-Subsidiary
                  or Affiliate customers for Articles less: (i) all returns of
                  damaged, defective or other merchandise, uncollectible
                  accounts, trade and cash discounts and allowances, and taxes
                  directly applicable to the sale of Articles (such as sales,
                  use, value added or similar taxes); (ii) all freight and
                  shipping charges, insurance costs and duties and other
                  governmental charges paid by the Licensee to the extent stated
                  separately on any invoice; (iii) all receipts from the sale of
                  discontinued and close-out merchandise (which shall include
                  only Articles sold at a discount of 25% or more from the
                  normal price charged to that specific customer and then only
                  to the extent that the aggregate gross sales thereof in any
                  contract year do not exceed fifteen percent (15%) of total
                  gross sales); and, (iv) all receipts from the sale of samples,
                  displays, brochures, gift-with-purchase and similar
                  advertising and promotional materials and packaging supplies.

                                      -2-
<PAGE>

                  Notwithstanding the terms of sub-section (iii) above, Licensee
                  shall not be excused from paying royalties on the sales of the
                  Articles in which the Licensee receives a minimum gross margin
                  of 25%, in which gross margin is defined as sales price to the
                  customer less Licensee's cost of goods and shipping.

E.                SUBSIDIARY. Any corporation or other entity which is 100%
                  directly or indirectly owned by Licensee.

F.                AFFILIATE. Any corporation or other entity which is at least
                  50% owned by Licensee.

                                    ARTICLE 2

                             Grant Of License Rights

         Rights Granted. Upon the terms and conditions of this Agreement,
Licensor hereby grants to Licensee, during the term of this Agreement, the sole
and exclusive right and license to use the Licensed Mark in the Territory as a
trademark in connection with the manufacture, promotion, sale and distribution
solely of the Articles and on all brand identifications, packing materials,
containers, promotional material, publicity, sales, advertising, newspaper,
magazine, radio, television, cinema and similar media presently existing or that
may exist in the future, in connection solely with the creation, manufacture,
introduction, marketing, distribution, sale and advertising of the Articles,
through the channels customarily used to manufacture, sell, distribute,
advertise and promote Articles of comparable prestige and quality in the
ordinary course of business as described in paragraph A of Article 7 below.
Licensor shall not, during any period this Agreement is in effect, grant any
rights to any third party in connection with the Articles for the Trademark or
any other trademark which includes PARIS HILTON or any derivative thereof.

         Right of First Refusal. Licensee shall have the right of first refusal,
subject to the terms set forth below, to manufacture and distribute the
Additional Products within the Territory. If Licensor desires to appoint a third
party as the licensee for the Additional Products in all or part of the
Territory, Licensor shall first present Licensee with the third party's proposed
terms. Licensee shall, within thirty (30) days following receipt of such terms,
elect whether to become the licensee for such Additional Products or to decline
such opportunity.

                                      -3-
<PAGE>
                                    ARTICLE 3

                             Exclusively of License

         Licensor will not grant any other license effective during the term of
this Agreement for the use of the Licensed Mark on or in connection with the
Articles in the Territory. Licensor and Ms. Paris Hilton may use or grant others
the right to use the Licensed Mark on or in connection with goods of all other
types and descriptions in the Territory. Licensor acknowledges that Licensee
presently manufactures and/or distributes in parts of the Territory articles
similar to the Articles covered by this Agreement which bear other trademarks.
Licensor further acknowledges and consents to Licensee obtaining other
additional licenses for the manufacture and/or distribution of other similar
lines during the term of this Agreement. Licensee will not, during the term of
this Agreement and thereafter, attack either Licensor's title in and to the
Licensed Mark or the validity of this License.

                                    ARTICLE 4

                                Term of Agreement

         Subject to the rights of termination set forth in this Agreement, the
initial term of this Agreement shall commence on June 1, 2004 and terminate on
June 30, 2009 (the "Initial Term").Licensee shall have the option to renew this
Agreement for an additional five-year period as long as the Minimum Royalties
(as hereinafter defined) for the Initial Term have been fully paid. Licensee
shall notify Licensor of its intent to either renew or not renew no later than
December 31, 2008.

         Each twelve (12) month period commencing on each July 1st and ending on
June 30th shall constitute and be referred to herein as an "Annual Period."
However, the initial Annual Period shall commence on June 1, 2004 and shall
terminate on June 30, 2005.

                                    ARTICLE 5

                                 Confidentiality

         The Parties acknowledge that all information relating to the business
and operations of Licensor and Licensee which they learn or have learned during
or prior to the term of this Agreement is confidential. The Parties acknowledge
the need to preserve the confidentiality and secrecy of such information and
agree that, both during the term of this Agreement and after the expiration or

                                      -4-
<PAGE>

termination hereof, they shall not use or disclose same, and shall take all
necessary steps to preserve in all respects such confidentiality and secrecy.
The provisions of this paragraph shall not apply with respect to any information
which has entered the public domain through no fault of Parties. The provisions
of this paragraph shall survive the expiration or termination of this Agreement.

                                    ARTICLE 6

                               Duties of Licensee

         A. Best Efforts. During the term of this Agreement, Licensee will use
its best efforts to exploit the rights herein granted throughout the Territory
and to sell the maximum quantity of Articles therein consistent with the high
standards and prestige represented by the Licensed Mark.

         B. Design and Sample making. Licensor shall not be responsible for the
production, design or sample making of the Articles and Licensee shall bear all
costs related thereto.

                                    ARTICLE 7

                                Quality Standards

A.                Manufacture of Articles; Quality Control.

                  (i)      The contents and workmanship of Articles shall be at
                           all times of the highest quality consistent with the
                           reputation, image and prestige of the Licensed Mark
                           and Articles shall be distributed and sold with
                           packaging and sales promotion materials appropriate
                           for such highest quality Products. The parties agree
                           that the Articles shall be of such premium quality,
                           prestige and price similar to that of the Calvin
                           Klein, Ralph Lauren (excluding Purple Label), and
                           Tommy Hilfiger fragrances as of the date of this
                           Agreement.

                  (ii)     All Articles shall be manufactured, labeled, sold,
                           distributed and advertised in accordance with all
                           applicable national, state and local laws and
                           regulations.

                  (iii)    Licensee shall submit to Licensor for approval the
                           two sets of the fragrance, scent, packaging and other
                           material, designs, sketches, colors, tags, containers
                           and labels (the "Approval Package") for Licensor's
                           review, which approval shall not be unreasonably
                           withheld. In the event that Licensor does not respond

                                      -5-
<PAGE>

                           to Licensee within 10 days of the receipt of any and
                           all items within the scope of the Approval Package,
                           any such item shall be deemed approved.

                  (iv)     During the term of this Agreement, upon Licensor's
                           request, Licensee shall submit, free of charge to
                           Licensor, the then current production samples of each
                           Article marketed. Production samples submitted by
                           Licensee for this purpose may be retained by
                           Licensor. Further, Licensee shall provide Licensor
                           with 100 samples of the various Articles being
                           distributed each year for Licensor to use for public
                           relations and promotional purposes. All Articles to
                           be sold hereunder shall be at least equal in quality
                           to the samples presented to the Licensor. Licensor
                           and its duly authorized representatives shall have
                           the right, upon reasonable advance notice and during
                           normal business hours, at Licensor's expense, to
                           examine Articles in the process of being manufactured
                           and to inspect all facilities utilized by Licensee in
                           connection therewith.

B.                Required Markings. Licensee shall cause to appear on all
                  packaging of Articles, (i) "the trademark, PARIS HILTON" is
                  licensed to "Parlux Fragrances, Inc."; and such additional
                  legends, markings and notices complying with the requirements
                  of any law or regulation in the Territory and (ii) such
                  legends, markings and notices as Licensor, from time to time,
                  may reasonably request.

C.                Distribution. In order to maintain the reputation, image and
                  prestige of the Licensed Mark, Licensee's normal distribution
                  patterns shall consist of those retail establishments whose
                  location, merchandising and overall operations are consistent
                  with the products described in paragraph A (i) of Article 7
                  above.

D.                Sales Force. During the term of this Agreement, Licensee shall
                  maintain a non-exclusive sales force suitable to carry out the
                  purpose of this Agreement.

                                      -6-
<PAGE>
                                    ARTICLE 8

                           Guaranteed Minimum Royalty

         In consideration of both the license granted and the services to be
performed by Licensor hereunder, Licensee shall pay to Licensor an annual
Guaranteed Minimum Royalty as follows:

         ANNUAL PERIOD              GUARANTEED MINIMUM ROYALTY
         -------------              --------------------------
Year 1 (6/1/04-6/30/05)             *(due upon execution hereof)
Year 2 (7/1/05-6/30/06)             *
Year 3 (7/1/06-6/30/07)             *
Year 4 (7/1/07-6/30/08)             *
Year 5 (7/1/08-6/30/09)             *

         In the event that the Initial Term of this Agreement is extended for an
additional five-year term (July 1, 2009 - June 30, 2014, the "Extended Term")
the Guaranteed Minimum Royalty for each Annual Period of the Extended Term shall
be *.

         The Guaranteed Minimum Royalty payable for each Annual Period shall be
paid to Licensor on a monthly basis in 12-equal installments on the first of
every month starting with the payment of the Guaranteed Minimum Royalty for Year
2 on July 1, 2005.

         The Guaranteed Minimum Royalty for each Annual Period shall be credited
against the Sales Royalty for only the same Annual Period as provided in Article
9 below.

         The Guaranteed Minimum Royalty for each renewal term will be limited to
the Guaranteed Minimum Royalty corresponding to the year in progress.

                                    ARTICLE 9

                        Sales Royalty; Withholding Taxes

A.                Licensee shall pay to Licensor a Sales Royalty on each Annual
                  Period's Net Sales of *. The Sales Royalty payable hereunder
                  shall be accounted for and paid on a quarterly basis within
                  forty-five (45) days after the close of the prior quarter's
                  sales, along with the Guaranteed Minimum Royalty that may be
                  due. In other words, the actual Sales Royalty will be paid
                  45-days in arrears computed on the basis of Net Sales during
                  the quarter ending 45 days before the period upon which
                  royalties are being paid, with a credit for

                                      -7-
<PAGE>

                  any Guaranteed Minimum Royalty and Sales Royalty payments
                  previously made to Licensor.

B.                If applicable, Licensee shall compute any payment, on behalf
                  of Licensor, for all taxes (other than United States Federal,
                  state or local income taxes) which any governmental authority
                  in the Territory may impose on Licensor with respect to
                  royalties paid by Licensee to Licensor. The amount of such
                  taxes shall be deducted from payments of royalties, provided
                  that Licensor is entitled under applicable law to credit the
                  amount of such taxes against its United States Federal Income
                  Tax obligations. Licensee shall furnish Licensor with an
                  official receipt (together with a translation thereof if not
                  in English) promptly after each such payment of taxes. In the
                  event such taxes are not paid when due, all resulting
                  penalties and interest shall be borne by Licensee.

C.                No payment of Sales Royalty for any Annual Period in excess of
                  payments of Guaranteed Minimum Royalty for the same Annual
                  Period shall be credited against the Guaranteed Minimum
                  Royalty due to Licensor for any other Annual Period.

D.                The addresses for all Royalty Payments, including the
                  Guaranteed Minimum Royalty shall be as follows:

                  (1) The initial Guaranteed Minimum Royalty of * payable upon
                      execution hereof:

                      *        to: "Tucker & Latifi, LLP, as Counsel",
                                   Robert L. Tucker, Esq., Tucker & Latifi, LLP,
                                   160 East 84th Street, New York, NY 10028

                      *        to: Paris Hilton Entertainment Inc. c/o Ms. Wendy
                                   White, 250 North Canon Drive, 2nd Floor,
                                   Beverly Hills, CA 90210

                  (2) All other Guaranteed Minimum Royalties and other
                      Royalties:

                      20% of amounts due to: Tucker & Latifi, LLP, as Counsel",
                                             Robert L. Tucker, Esq., Tucker &
                                             Latifi, LLP, 160 East 84th Street,
                                             New York, NY 10028

                                      -8-
<PAGE>

                      80% of amounts due to: Paris Hilton Entertainment Inc.
                                             c/o Ms. Wendy White,
                                             250 North Canon Drive, 2nd Floor,
                                             Beverly Hills, CA 90210

                                   ARTICLE 10

                                   Advertising

         Licensee agrees to spend in the United States for "consumer
advertising" (as defined below) * of Net Sales during each Annual Period.

         For the other markets in the Territory, Licensee or its distributors
will jointly spend not less than * of Net sales in such markets during each
Annual Period.

         "Consumer Advertising" shall be understood to include newspapers,
magazines, television, radio, billboards (including related artwork and
production charges for these five categories), retailer demonstration charges,
retailer's catalogues, gifts-with-purchase including the gift aspect of value
sets, direct mail, remittance envelopes, blow-ins, billing inserts (both scented
and unscented), product samples, pamphlets, free goods (including those to
Licensor for events and other public relation activities), window and counter
displays (including testers, dummies, counter cards and other visual aids),
special events, contests, publicity and promotions and cooperative advertising.

                  Licensor undertakes at Licensee's request to make Ms. Paris
Hilton ("PH") available at reasonable intervals and for reasonable periods
(which shall involve a maximum of seven (7) appearances during the first
contract year and a maximum of four (4) appearances each contract year
thereafter) for promotional tie-ins serving to associate PH with the Articles.
Licensee shall also be entitled to the use of PH's likeness for advertising and
promotional purposes upon Licensor's approval first being obtained in each
instance, which approval shall not be unreasonably withheld or delayed. Licensor
shall make every reasonable effort, in light of PH's busy schedule, at the
request of the Licensee, to arrange for PH's cooperation for publicity
photographs, launch parties, personal appearances and radio and TV interviews
(which shall be included in PH's obligations of seven (7) and four (4)
appearances discussed above). Licensee shall reimburse Licensor for the
reasonable costs involved in providing PH plus one other individual, selected by
Licensor, plus her Mother and Father if they wish to attend, with first-class
travel, lodging, food and other related expenses mutually agreed upon in advance
of each appearance attended by PH at Licensee's request. If PH fails to appear
for a scheduled Licensor approved event, Licensee will have the right to deduct
up to $50,000 of its non-refundable out of pocket expenses incurred in
connection with each specific event from the Sales Royalty. The failure to

                                      -9-
<PAGE>

appear at a scheduled event could have a material adverse effect on the
Licensee's ability to market the Articles.

                                   ARTICLE 11

                   Sales Statement; Books and Records; Audits

A.                Sales Statement. Licensee shall deliver to Licensor at the
                  time each Sales Royalty payment is due, a reasonably detailed
                  report signed by a duly authorized officer of Licensee
                  indicating by quarter the Net Sales and a computation of the
                  amount of Sales Royalty payable hereunder for said period.
                  Such statement shall be furnished to Licensor whether or not
                  any Articles have been sold during the period of which such
                  statement is due.

                  Licensee shall deliver to Licensor, not later than ninety (90)
                  days after the close of each Annual Period during the term of
                  this Agreement (or portion thereof in the event of prior
                  termination for any reason), a statement signed by a duly
                  authorized officer relating to said entire Annual Period,
                  setting forth the same information required to be submitted by
                  Licensee in accordance with the first paragraph of this
                  Article and also setting forth the information concerning
                  expenditures for the advertising and promotion of Articles
                  during such Annual Period required by Article 10 hereof.

B.                Books and Records; Audits. Licensee shall prepare and
                  maintain, in such manner as will allow its accountants to
                  audit same in accordance with generally accepted accounting
                  principles, complete and accurate books of account and records
                  (specifically including without limitation the originals or
                  copies of documents supporting entries in the books of
                  account) in which accurate entries will be made covering all
                  transactions, including advertising expenditures, arising out
                  of or relating to this Agreement. Licensee shall keep separate
                  general ledger accounts for such matters that do not include
                  matters or sales related to this Agreement. Licensor and its
                  duly authorized representatives shall have the right, for the
                  duration of this Agreement and for one (1) year thereafter,
                  during regular business hours and upon seven (7) business days
                  advance notice (unless a shorter period is appropriate in the
                  circumstances), to audit said books of account and records and
                  examine all other documents and material in the possession or
                  under the control of Licensee with respect to the subject

                                      -10-
<PAGE>

                  matter and the terms of this Agreement, including, without
                  limitation, invoices, credits and shipping documents, and to
                  make copies of any and all of the above. All such books of
                  account, records, documents and materials shall be kept
                  available by Licensee for at least two (2) years after the end
                  of the Annual Period to which they relate.

         If, as a result of any audit of Licensee's books and records, it is
shown that Licensee's payments were less than the amount which should have been
paid by an amount equal to * or more of the payments actually made with respect
to sales occurring during the period in question, Licensee shall reimburse
Licensor for the cost of such audit and shall make all payments required to be
made to eliminate any discrepancy revealed by said audit within ten (10) days
after Licensor's demand therefor.

                                   ARTICLE 12

                          Indemnification and Insurance

A.                Indemnification of Licensor. Licensee hereby agrees to save
                  and hold Licensor and its agents harmless of and from and to
                  indemnify them against any and all claims, suits, injuries,
                  losses, liability, demands, damages and expenses (including,
                  subject to subparagraph D below, Licensor's reasonable
                  attorneys' fees and expenses) which Licensor may incur or be
                  obligated to pay, or for which either may become liable or be
                  compelled to pay in any action, claim or proceeding against
                  it, for or by reason of any acts, whether of omission or
                  commission, that may be committed or suffered by Licensee or
                  any of its servants, agents or employees in connection with
                  Licensee's performance of this Agreement, including but not
                  limited to those arising out of the alleged defect in any
                  Article produced by Licensee under this Agreement, the
                  manufacture, labeling, sale, distribution or advertisement of
                  any Article by Licensee in violation of any national, state or
                  local law or regulation or the breach of Article 5 hereof. The
                  provisions of this paragraph and Licensee's obligations
                  hereunder shall survive the expiration or termination of this
                  Agreement.

B.                Insurance Policy. Licensee shall procure and maintain at its
                  own expense in full force and effect at all times during which
                  Articles are being sold, with a responsible insurance carrier
                  acceptable to Licensor, a public liability insurance policy
                  including products liability coverage with respect to Articles
                  with a limit of liability not less than $3,000,000. It shall
                  be acceptable if such coverage is provided by a product
                  liability policy and an additional umbrella policy. Such
                  insurance policies shall be written for the benefit of
                  Licensee and Licensor and shall provide for at least thirty

                                      -11-
<PAGE>

                  (30) days prior written notice to said parties of the
                  cancellation or substantial modification thereof. Licensor
                  shall be a named insured on each such policy. Such insurance
                  may be obtained by Licensee in conjunction with a policy which
                  covers products other than Articles.

C.                Evidence of Insurance. Licensee shall, from time to time upon
                  reasonable request by Licensor, promptly furnish or cause to
                  be furnished to Licensor evidence in form and substance
                  satisfactory to Licensor of the maintenance of the insurance
                  required by subparagraph B above, including, but not limited
                  to, copies of policies, certificates of insurance (with
                  applicable riders and endorsements) and proof of premium
                  payments. Nothing contained in this paragraph shall be deemed
                  to limit in any way the indemnification provisions of the
                  subparagraph A above.

D.                Notice. Licensor will give Licensee notice of any action,
                  claim, suit or proceeding in respect of which indemnification
                  may be sought and Licensee shall defend such action, claim,
                  suit or proceeding on behalf of Licensor. In the event
                  appropriate action is not taken by Licensee within thirty (30)
                  days after its receipt of notice from Licensor, then Licensor
                  shall have the right, but not the obligation, to defend such
                  action, claim, suit or proceeding. Licensor may, subject to
                  Licensee's indemnity obligation under subparagraph A above, be
                  represented by its own counsel in any such action, claim, suit
                  or proceeding. In any case, the Licensor and the Licensee
                  shall keep each other fully advised of all developments and
                  shall cooperate fully with each other in all respects in
                  connection with any such defense as is made. Nothing contained
                  in this paragraph shall be deemed to limit in any way the
                  indemnification provisions of the subparagraph A above except
                  that in the event appropriate action is being taken by
                  Licensee by counsel reasonably acceptable to Licensor, with
                  respect to any not-trademark or intellectual property, action,
                  claim, suit or proceeding. Licensor shall not be permitted to
                  seek indemnification from Licensee for attorneys' fees and
                  expenses incurred without the consent of Licensee. In
                  connection with the aforesaid actions, claims and proceedings,
                  the parties shall, where no conflict of interest exists, seek

                                      -12-
<PAGE>

                  to be represented by common reasonably acceptable counsel. In
                  connection with actions, claims or proceedings involving
                  trademark or other intellectual property matters which are
                  subject to indemnification hereunder, Licensor shall at all
                  times be entitled to be represented by its own counsel, for
                  whose reasonable fees and disbursements it shall be entitled
                  to indemnification hereunder.

                                   ARTICLE 13

                                The Licensed Mark

A.                Licensee shall not join any name or names with the Licensed
                  Mark so as to form a new mark, unless and until Licensor
                  consents thereto in writing. Licensee acknowledges the
                  validity of the Licensed Mark, the secondary meaning
                  associated with the Licensed Mark, and the rights of Licensor
                  with respect to the Licensed Mark in the Territory in any form
                  or embodiment thereof and the goodwill attached or which shall
                  become attached to the Licensed Mark in connection with the
                  business and goods in relation to which the same has been, is
                  or shall be used. Sales by Licensee shall be deemed to have
                  been made by Licensor for purposes of trademark registration
                  and all uses of the Licensed Mark by Licensee shall inure to
                  the benefit of Licensor. Licensee shall not, at any time, do
                  or suffer to be done, any act or thing which may in any way
                  adversely affect any rights of Licensor in and to the Licensed
                  Mark or any registrations thereof or which, directly or
                  indirectly, may reduce the value of the Licensed Mark or
                  detract from its reputation. Licensee will use its best
                  efforts to distribute Articles in the proper channels
                  comparable to those of the brands outlined in Article 7 A (i)
                  herein.

B.                At Licensor's request, Licensee shall execute any documents,
                  including Registered User Agreements, reasonably required by
                  Licensor to confirm the respective rights of Licensor and Ms.
                  Paris Hilton in and to the Licensed Mark in each jurisdiction
                  in the Territory and the respective rights of Licensor and
                  Licensee pursuant to this Agreement. Licensee shall cooperate
                  with Licensor, in connection with the filing and the
                  prosecution by Licensor of applications to register or renew
                  the Licensed Mark for Articles sold hereunder in each
                  jurisdiction in the Territory where Licensee has reasonably
                  requested the same. Such filings and prosecution outside the
                  U.S. shall be in the name of Licensor or Ms. Paris Hilton, as
                  they may decide, the expense of which will be split evenly
                  between the Licensor and Licensee. Nothing contained herein
                  shall obligate Licensor to prosecute any trademark application
                  outside the U.S. which is opposed or rejected in any country

                                      -13-
<PAGE>

                  after the application is filed, provided, however, that any
                  such prosecution shall go forward if (a) Licensee requests
                  same; (b) Licensee pays for same directly; and (c) such
                  prosecution is in Licensor's (or Ms. Paris Hilton's) name and
                  directed by Licensor. Licensor shall cooperate fully with any
                  such prosecution.

C.                Licensee shall use the Licensed Mark in each jurisdiction in
                  the Territory strictly in compliance with the legal
                  requirements obtained therein and shall use such markings in
                  connection therewith as may be required by applicable legal
                  provisions. Licensee shall cause to appear on all Articles and
                  on all materials on or in connection with which the Licensed
                  Mark is used, such legends, markings and notices as may be
                  reasonably necessary in order to give appropriate notice of
                  any trademark, trade name or other rights therein or
                  pertaining thereto.

D.                Licensee shall never challenge the validity of the Licensed
                  Mark or any application for registration thereof, or any
                  trademark registration hereof, or any rights of Licensor
                  therein. The foregoing shall not be deemed to prevent Licensee
                  from asserting, as a defense to a claim of breach of contract
                  brought against Licensee by Licensor for failure to perform
                  its obligations hereunder, that its ceasing performance under
                  this Agreement was based upon Licensor's failure to own the
                  Licensed Mark in the United States of America, provided that
                  it is established in a court of law that Licensor does not own
                  the Licensed Mark, that the Licensed Mark is owned by a third
                  party so as to preclude the grant of the license provided
                  herein.

E.                In the event that Licensee learns of any infringement or
                  imitation of the Licensed Mark or of any use by any person of
                  a trademark similar to the Licensed Mark, it promptly shall
                  notify Licensor thereof. In no event, however, shall Licensor
                  be required to take any action if it deems it inadvisable to
                  do so.

F.                Licensor shall not be required to protect, indemnify or hold
                  Licensee harmless against, or be liable to Licensee for, any

                                      -14-
<PAGE>

                  liabilities, losses, expenses or damages which may be suffered
                  or incurred by Licensee as a result of any infringement or
                  allegation thereof by any other person, firm or corporation,
                  other than by reason of Licensor's breach of the
                  representations made and obligations assumed herein. Licensor
                  and Ms. Paris Hilton make no warranties or representations as
                  to the registrability of the Licensed Mark in the various
                  trademark offices around the World, except that Licensor
                  warrants and represents that Ms. Paris Hilton has a pending
                  trademark application for the Licensed Mark in the United
                  States Patent and Trademark Office in International Class 3
                  for fragrances; Serial No. 78/412749. However, Licensor and
                  Ms. Paris Hilton, to the best of their knowledge, are not
                  aware of any registrations or pending registrations in
                  International Class 3 or otherwise, that would preclude or
                  restrict Licensee from selling the Articles anywhere in the
                  Territory.

                                   ARTICLE 14

                              Defaults; Termination

A.                The following conditions and occurrences shall constitute
                  "Events of Default" by Licensee:

                  1.       the failure to pay Licensor the full amount due it
                           under any of the provisions of this Agreement by the
                           prescribed date for such payment; 2. the failure to
                           deliver full and accurate reports pursuant to any of
                           the provisions of this Agreement by the prescribed
                           due date therefore;

                  3.       the making or furnishing of a knowingly false
                           statement in connection with or as part of any
                           material aspect of a report, notice or request
                           rendered pursuant to this Agreement;

                  4.       the failure to maintain the insurance required by
                           Article 12;

                  5.       the use of the licensed mark in an unauthorized or
                           unapproved manner;

                  6.       Licensee's use of other trademarks or in association
                           with the Articles, without prior written consent of
                           Licensor;

                                      -15-
<PAGE>

                  7.       the commencement against Licensee of any proceeding
                           in bankruptcy, or similar law, seeking
                           reorganization, liquidation, dissolution,
                           arrangement, readjustment, discharge of debt, or
                           seeking the appointment of a receiver, trustee or
                           custodian of all or any substantial part of
                           Licensee's property, not dismissed within sixty (60)
                           days, or Licensee's making of an assignment for the
                           benefit of creditors, filing of a bankruptcy
                           petition, its acknowledgment of its insolvency or
                           inability to pay debts, or taking advantage of any
                           other provision of the bankruptcy laws;

                  8.       the material breach of any other material promise or
                           agreement made herein.

B.                In the event Licensee fails to cure (i) an Event of Default
                  within thirty (30) days after written notice of default is
                  transmitted to Licensee under Article 14 A.3, A.5, A.6, or
                  A.7; or (ii) Licensee fails to cure any other Event of Default
                  within sixty (60) days after written notice of default is
                  transmitted to Licensee or within such further period as
                  Licensor may allow, this Agreement shall, at Licensor's
                  option, be terminated, on notice to Licensee, and all the
                  prorated Guaranteed Minimum Royalties for the Annual Period as
                  in Article 8 above shall become due, without prejudice to
                  Licensor's right to receive other payments due or owing to
                  Licensor under this Agreement or to any other right of
                  Licensor, including the right to damages and/or equitable
                  relief.

C.                Upon the termination of this Agreement, in the event this
                  Agreement is not renewed as provided in Article 4 above, or in
                  the event of the termination or expiration of a renewal term
                  of this Agreement, Licensee, except as specified below, will
                  immediately discontinue use of the Licensed Mark, will not
                  resume the use thereof or adopt any colorable imitation of the
                  Licensed Mark or any of its parts, will promptly deliver and
                  convey to Licensor (free of all liens and encumbrances)

                  (i)      all plates, engravings, silk-screens, or the like
                           used to make or reproduce the Licensed Mark and the
                           Designs, but not the bottle mold or tooling which
                           Licensor shall be entitled to purchase or recover as
                           provided below; and

                                      -16-
<PAGE>

                  (ii)     all items affixed with likeness or reproductions of
                           the Licensed Mark, whether Articles, labels, bags,
                           hangers, tags or otherwise, and, upon request by
                           Licensor, will assign to Licensor such rights as
                           Licensee may have acquired in the Licensed Mark. In
                           the event that this Agreement expires or is
                           terminated by Licensor due to Licensee's default,
                           Licensor shall have an option, but not an obligation,
                           to purchase the bottle mold and tooling for the
                           Articles, free of all liens and other encumbrances,
                           at a price equal to Licensee's cost for same
                           established by submission of bill(s) from supplier
                           and satisfactory proof of payment for same. Licensor
                           shall pay such cost as follows: 50% (fifty) at
                           closing and the balance paid by six (6) equal monthly
                           payments. Licensor shall, at the time it exercises
                           its purchase option, enter into a security agreement
                           with Licensee with respect to the mold, which shall
                           entitle Licensee to foreclose on its security
                           interest in the mold in the event Licensor fails to
                           make any installment payment due within fifteen (15)
                           days after receiving notice of default. Licensor
                           shall exercise its aforesaid option within thirty
                           (30) days after Licensee's submission of documents
                           establishing cost. Notwithstanding the foregoing, if
                           Licensor has terminated this Agreement due to
                           Licensee's default, Licensor, at its option, shall be
                           entitled, in exercising its purchase option, to
                           deduct from the cost price an amount equal to the
                           sales and guaranteed minimum royalties Licensor is
                           entitled to recover, for which deduction Licensee
                           shall receive a credit. In the event Licensor
                           exercises its aforesaid option, Licensee shall be
                           precluded forever from using the bottle molds or
                           tools and from selling or otherwise transferring or
                           licensing any rights whatsoever in the molds or tools
                           to any third party. In the event that Licensor does
                           not exercise its aforesaid option, Licensee shall not
                           use the bottle molds or tools or sell or otherwise
                           transfer or license any rights whatsoever in the
                           bottle mold or tools to any third party for a period
                           of two (2) years after the date of termination of the

                                      -17-
<PAGE>

                           fair market value. In the event of any permitted use
                           of the bottle mold and/or tools by Licensee, Licensee
                           shall not use in connection therewith the Licensed
                           Mark, any trademark confusingly similar thereto, any
                           trade dress associated with the Articles, any
                           advertising or promotional materials used in
                           connection with the Articles or any other markings or
                           materials which would cause a reasonable consumer to
                           believe that any new items sold using the bottle mold
                           and tools are authorized by Licensor or in some way
                           associated with the Licensed Mark. Any permitted sale
                           or license of the bottle mold and/or tools by
                           Licensee shall prohibit in writing the purchaser or
                           licensee from using the Licensed Mark, and
                           confusingly similar trademark and any such trade
                           dress, advertising, promotional materials, markings
                           or other materials and shall expressly make Licensor
                           a third party beneficiary of such provision.

                                   ARTICLE 15

                       Rights on Expiration or Termination

A.                If this Agreement expires or is terminated, Licensee shall
                  cease to manufacture Articles (except for work in process or
                  to balance component inventory) but shall be entitled, for an
                  additional period of twelve (12) months only, on a
                  non-exclusive basis, to sell and dispose of its inventory
                  subject, however, to the provisions of paragraph D of this
                  Article. Such sales shall be made subject to all of the
                  provisions of this agreement and to an accounting for and the
                  payment of Sales Royalty thereon but not to the payment of
                  Guaranteed Minimum Royalties. Such accounting and payment
                  shall be made monthly.

B.                In the event of termination in accordance with Article 14
                  above, Licensee shall pay to Licensor, the Sales Royalty then
                  owed to it pursuant to this Agreement or otherwise.

C.                Notwithstanding any termination in accordance with Article 14
                  above, Licensor shall have and hereby reserve all rights and
                  remedies which it has, or which are granted to it by operation

                                      -18-
<PAGE>

                  of law, to enjoin the unlawful or unauthorized use of the
                  Licensed Mark, and to collect royalties payable by Licensee
                  pursuant to this Agreement and to be compensated for damages
                  for breach of this Agreement.

D.                Upon the expiration or termination of this Agreement, Licensee
                  shall deliver to Licensor a complete and accurate schedule of
                  Licensee's inventory of Articles and of related work in
                  process then on hand (including any such items held by
                  Subsidiaries, Affiliates or others on behalf of Licensee)
                  (hereinafter referred to as "Inventory). Such schedule shall
                  be prepared as of the close of business on the date of such
                  expiration or termination and shall reflect Licensee's cost of
                  each such item. Notwithstanding anything contained to the
                  contrary in this Agreement, Licensor thereupon shall have the
                  option, exercisable by notice in writing delivered to Licensee
                  within thirty (30) days after its receipt of the complete
                  Inventory schedule, to purchase any or all of the Inventory,
                  free of all liens and other encumbrances, for an amount equal
                  to Licensee's cost plus 20%. In the event such notice is sent
                  by Licensor, Licensee shall deliver to Licensor or its
                  designee all of the Inventory referred to therein within
                  thirty (30) days after Licensor's said notice and, in respect
                  of any Inventory so purchased, assign to Licensor all then
                  outstanding orders from Licensee to its suppliers and to
                  Licensee from its customers. Licensor shall pay Licensee for
                  such Inventory within twenty (20) days after the delivery of
                  such Inventory to Licensor. No Sales Royalty shall be payable
                  to Licensor with respect to any such inventory purchased by
                  Licensor.

                                   ARTICLE 16

                          Sublicensing and Distribution

A.(i)             The performance of Licensee hereunder is of a personal nature.
                  Therefore, neither this Agreement nor the License or other
                  rights granted hereunder may be assigned, sublicensed or
                  transferred by Licensee, whether to a subsidiary or Affiliate
                  except as approved by Licensor in advance, in writing, which
                  approval will not be unreasonably denied. However, any
                  assignment of this Agreement or the rights granted hereunder
                  must be to an entity with equal or superior financial strength
                  to Licensee.

                                      -19-
<PAGE>

              (ii)Consolidation. Notwithstanding anything contained to the
                  contrary in this Agreement, this Agreement shall not terminate
                  if Licensee is merged or otherwise consolidated into another
                  entity which is the surviving entity of equal or superior
                  financial strength.

B.                Licensee shall be entitled to use distributors in connection
                  with its sale of Articles under this Agreement without
                  approval of Licensor. No such distributor, however, shall be
                  entitled to exercise any of Licensee's rights hereunder except
                  for the sale of Articles which have been approved by Licensor
                  hereunder.

                                   ARTICLE 17

                                  Miscellaneous

A.                Representations. The parties respectively represent and
                  warrant that they have full right, power and authority to
                  enter into this Agreement and perform all of their obligations
                  hereunder and that they are under no legal impediment which
                  would prevent their signing this Agreement or consummating the
                  same. Licensor represents and warrants that it has the right
                  to license the Licensee the Licensed Mark and that Licensor
                  has not granted any other existing license to use the Licensed
                  Mark on products covered hereunder in the Territory and that
                  no such license will be granted during the term of this
                  Agreement except in accordance with the provisions hereof.

B.                Licensor's Rights. Not withstanding anything to the contrary
                  contained in this Agreement, Licensor shall not have the right
                  to negotiate or enter into agreements with third parties
                  pursuant to which it may grant a license to use the Licensed
                  Mark in connection with the manufacture, distribution and/or
                  sale of products covered hereunder in the Territory or provide
                  consultation and design services with respect to such products
                  in the Territory prior to the termination or expiration of
                  this Agreement.

C.                Licensor's Retail Stores. In the event Licensor (or Ms. Paris
                  Hilton) opens one or more retail stores or boutiques selling
                  various products bearing the Licensed Mark, Licensee agrees to
                  sell Articles to Licensor for sale in such stores at the
                  established U.S. retail price for the specific Article, less
                  an additional 75% (seventy-five percent) discount. Licensee
                  further agrees that any sales pursuant to this paragraph shall

                                      -20-
<PAGE>

                  be included in the computation of Net Sales for any applicable
                  Annual Period hereunder.

D.                Governing Law; Entire Agreement. This Agreement shall be
                  construed and interpreted in accordance with the laws of the
                  State of Florida applicable to agreements made and to be
                  performed in said State, contains the entire understanding and
                  agreement between the parties hereto with respect to the
                  subject matter hereof, supersedes all prior oral or written
                  understandings and agreements relating thereto and may not be
                  modified, discharged or terminated, nor may any of the
                  provisions hereof be waived, orally.

E.                No Agency. Nothing herein contained shall be construed to
                  constitute the parties hereto as partners or as joint
                  venturers, or either as agent of the other, and licensee shall
                  have no power to obligate or bind Licensor in any manner
                  whatsoever.

F.                No Waiver. No waiver by either party, whether express or
                  implied, of any provision of this Agreement, or of any breach
                  or default thereof, shall constitute a continuing waiver of
                  such provision or of any other provision of this Agreement.
                  Acceptance of payments by Licensor shall not be deemed a
                  waiver by Licensor of any violation of or default under any of
                  the provisions of this Agreement by Licensee.

G.                Void Provisions. If any provision or any portion of any
                  provision of this Agreement shall be held to be void or
                  unenforceable, the remaining provisions of this Agreement and
                  the remaining portion of any provision held void or
                  unenforceable in part shall continue in full force and effect.

H.                Construction. This Agreement shall be construed without regard
                  to any presumption or other rule requiring construction
                  against the party causing this Agreement to be drafted. If any
                  words or phrases in this Agreement shall have been stricken
                  out or otherwise eliminated, whether or not any other words or
                  phrases have been added, this Agreement shall be construed as
                  if those words or phrases were never included in this
                  Agreement, and no implication or inference shall be drawn from
                  the fact that the words or phrases were so stricken out or
                  otherwise eliminated.

I.                Force Majeure. Neither party hereto shall be liable to the
                  other for delay in any performance or for the failure to
                  render any performance under the Agreement (other than payment

                                      -21-
<PAGE>

                  to any accrued obligation for the payment of money) when such
                  delay or failure is by reason of lockouts, strikes, riots,
                  fires, explosions, blockade, civil commotion, epidemic,
                  insurrection, war or warlike conditions, the elements,
                  embargoes, act of God or the public enemy, compliance with any
                  law, regulation or other governmental order, whether or not
                  valid, or other similar causes beyond the control of the party
                  effected. The party claiming to be so affected shall give
                  notice to the other party promptly after it learns of the
                  occurrence of said event and of the adverse results thereof.
                  Such notice shall set forth the nature and extent of the
                  event. The delay or failure shall not be excused unless such
                  notice is so given. Notwithstanding any other provision of
                  this Agreement, either party may terminate this Agreement if
                  the other party is unable to perform any or all of its
                  obligations hereunder for a period of six (6) months by reason
                  of said event as if the date of termination were the date set
                  forth herein as the expiration date hereof. If either party
                  elects to terminate this Agreement under this paragraph,
                  Licensee shall have no further obligations for the Guaranteed
                  Minimum Royalty beyond the date of termination (which shall be
                  prorated if less than an Annual Period is involved) and shall
                  be obligated to pay any Sales Royalty which is then due or
                  becomes due.

J.                Binding Effect. This Agreement shall inure to the benefit of
                  and shall be binding upon the parties, their respective
                  successors, Licensor's transferees and assigns and Licensee's
                  permitted transferees and assigns.

K.                Resolution of Disputes. Any controversy or claim arising our
                  of, in connection with, or relating to this Agreement, shall
                  be determined by arbitration by a three person arbitration
                  panel at the office of the American Arbitration Association.
                  Both Parties shall share equally the cost of such arbitration
                  (except each shall bear its own attorney's fees). Any decision
                  rendered by the arbitrators shall be final and binding, and
                  judgment may be entered in any court having jurisdiction.

L.                Consolidation. Notwithstanding anything contained to the
                  contrary in this Agreement (a) this Agreement shall not
                  terminate if Licensor is merged or otherwise consolidated into
                  another entity which is the surviving entity. (b) Licensor
                  shall be entitled to assign this Agreement to any Corporation
                  to which the Trademark is assigned.

                                      -22-
<PAGE>

M.                Survival. The provisions of Articles 11, 12A, 12D, 13, 15, 16,
                  and 17 shall survive any expiration or termination of this
                  Agreement.

N.                Paragraph Headings. The paragraph headings in this Agreement
                  are for convenience of reference only and shall be given no
                  substantive effect.

                                   ARTICLE 18

                                     Notices

         Any notice or other communications required or permitted by this
Agreement to be given to a party will be in writing and will be considered to be
duly given when sent by any recognized overnight courier service to the party
concerned to the following persons or addresses (or to such other persons or
addresses as a party may specify by notice to the other):

TO LICENSOR                  Ms. Paris Hilton c/o Ms. Wendy White
                             250 North Canon Dr. 2nd Floor,
                             Beverly Hills, CA 90210

WITH A COPY TO:              Robert L. Tucker, Esq.,  Tucker & Latifi, LLP
                             160 East 84th Street, New York, NY 10028
                             Tel: 212-472-6262; Fax: 212-744-6509.
                              RTucker@TuckerLatifi.com

TO LICENSEE                  PARLUX FRAGRANCES, INC.
                             3725 SW 30TH Avenue
                             Ft. Lauderdale, Florida, 33312
                             Attention: Ilia Lekach
                             Chairman & CEO
                             Fax : (954)  316-8155

WITH A COPY TO:              Bingham McCutcheon LLP
                             399 Park Avenue
                             New York, New York 10022
                             Attention: Francis A. Fuselier, Esq.
                             Fax: (212) 752-5378

                                      -23-
<PAGE>

         Notice of the change of any such address shall be duly given by either
party to the other in the manner herein provided.

PARLUX FRAGRANCES, INC.

BY:   /s/ Frank A. Buttacavoli                              Date: May 27, 2004
      --------------------------------------------
      Frank A. Buttacavoli
      Title: Executive Vice President / COO / CFO

PARIS HILTON ENTERTAINMENT INC.

BY:   /s/ Paris Hilton                                      Date: May 21, 2004
      ---------------------------------
      Paris Hilton

         Compliance with the terms of this Agreement shall constitute compliance
with the terms of the Master License. In the event of a termination of the
Master License granted to Licensor, prior to the expiration of this Agreement
(and any extensions thereof) Ms. Paris Hilton warrants and represents that the
successor entity to the rights to the PARIS HILTON trademark shall assume the
obligations and succeed to the rights of the Licensor and the rights of Licensee
shall continue unaffected.

ACKNOWLEDGE and APPROVED:

/s/ Paris Hilton
--------------------
Paris Hilton
Dated:  May 21, 2004

                                      -24-Exhibit 4.1

                       THE CALYPTE BIOMEDICAL CORPORATION
                               2004 INCENTIVE PLAN

                                    ARTICLE I

                                     GENERAL

1.1   PURPOSE

      The purpose of The Calypte Biomedical Corporation 2004 Incentive Plan is
to attract, retain and motivate officers, employees (including prospective
employees), consultants and others who may perform services for the Company, to
compensate them for their contributions to the long-term growth and profits of
the Company, and to encourage them to acquire a proprietary interest in the
success of the Company.

1.2   DEFINITIONS OF CERTAIN TERMS.

      1.2.1 "Award" means an award made pursuant to the Plan.

      1.2.2 "Award Agreement" means the written document by which each Award is
evidenced.

      1.2.3 "Board" means the Board of Directors of Calypte.

      1.2.4 " Calypte" means Calypte Biomedical Corporation, and any successor
thereto.

      1.2.5 "Cause" means the causes set forth in any written employment or
services agreement between the Company and the grantee, if any, or, in the
absence of such an agreement, means any of the following acts or circumstances:
(i) willful destruction by the grantee of Company property having a material
value to the Company; (ii) fraud, embezzlement, theft, or comparable dishonest
activity committed by the grantee against the Company; (iii) the Participant's
conviction of or entering a plea of guilty or nolo contendere to any crime
constituting a felony or any misdemeanor involving fraud, dishonesty or moral
turpitude; (iv) the grantee's breach, neglect, refusal or failure to discharge,
in each case in any material respect, his or her duties (other than due to
Disability) commensurate with his or her title and function or failure to comply
with the lawful directions of the Board; or (v) a willful and knowing material
misrepresentation by the grantee to the Board.

      1.2.6 "Certificate" means a stock certificate (or other appropriate
document or evidence of ownership) representing shares of Common Stock of
Calypte.

      1.2.7 "Code" means the Internal Revenue Code of 1986, as amended from time
to time, and the applicable rulings and regulations thereunder.

      1.2.8 "Committee" means the Compensation Committee of the Board or any
successor thereto or such other committee or subcommittee designated by the
Board to administer the Plan in accordance with Section 1.3.

      1.2.9 "Common Stock" means common stock of Calypte, par value $0.03 per
share.

      1.2.10 "Company" means Calypte.

      1.2.11 "Disability" means, unless otherwise defined in an Award Agreement,
or as otherwise determined under procedures established by the Committee for
purposes of the Plan, a disability within the meaning of Section 22(e)(3) of the
Code.

                                       9
<PAGE>

      1.2.12 "Employment" means a grantee's performance of services for the
Company, as determined by the Committee. The terms "employ" and "employed" shall
have their correlative meanings.

      1.2.13 "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and the applicable rules and regulations thereunder.

      1.2.14 "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:

            1.2.14.1 If the Common Stock is listed on any established stock
      exchange, the NASDAQ System or a national market system, including without
      limitation, the National Market System of NASDAQ, the Fair Market Value of
      a share of Common Stock will be the closing sales price for such stock (or
      the closing bid, if no sales are reported) as quoted on that system or
      exchange (or the system or exchange with the greatest volume of trading in
      Common Stock) on the day of determination, as reported in the Wall Street
      Journal or any other source the Committee considers reliable.

            1.2.14.2 If the Common Stock is not traded as set forth above, the
      Fair Market Value will be determined in good faith by the Committee, such
      determination by the Committee to be final, conclusive and binding.

      1.2.15 "Grant Notice" means the written notice evidencing certain terms
and conditions of an Award. The Grant Notice is part of the Award Agreement.

      1.2.16 "Incentive Award" means any Award granted contingently on the
achievement of Performance Goals during Performance Periods, expressed in U.S.
currency or Common Stock or any combination thereof, intended to qualify as
performance-based compensation pursuant to Section 162(m) of the Code, as now
constituted or subsequently amended, or pursuant to a successor provision of the
Code, and which is so designated in the applicable Award Agreement.

      1.2.17 "Incentive Stock Option" means an Option that is intended to
qualify for special federal income tax treatment pursuant to Sections 421 and
422 of the Code, as now constituted or subsequently amended, or pursuant to a
successor provision of the Code, and which is so designated in the applicable
Award Agreement.

      1.2.18 "Nonqualified Stock Option" means an Option that is not an
Incentive Stock Option.

      1.2.19 "Option" means an Incentive Stock Option or a Nonqualified Stock
Option or both, as the context requires.

      1.2.20 "Performance Goals" means objectives for the Company or any
individual grantee established by the Committee with respect to Incentive Awards
contingently granted under the Plan. The Performance Goals shall be based on one
or more of the following criteria: earnings (either in the aggregate or on a
per-share basis), total stockholder return, return on equity, return on capital,
net income, cash flow, operating income or profit, gross revenues, economic
value added, or strategic business criteria. The levels of performance required
with respect to Performance Goals may be expressed in absolute or relative
levels.

      1.2.21 "Performance Period" means a set time period during which
Performance Goals must be met.

      1.2.22 "Plan" means The Calypte Biomedical Corporation 2004 Incentive
Plan, as described herein and as hereafter amended from time to time.

      1.2.23 "Termination of Employment" occurs on the first day on which a
grantee is for any reason no longer providing services to the Company in the
capacity of an employee, officer or consultant.

                                       10
<PAGE>

      1.3 ADMINISTRATION.

      1.3.1 Subject to Section 1.3.4, the Plan shall be administered by the
Board or the Committee, whose members shall serve at the pleasure of the Board.
To the extent required for transactions under the Plan to qualify for the
exemptions available under Rule 16b-3 promulgated under the Exchange Act, all
actions relating to Awards to persons subject to Section 16 of the Exchange Act
may be taken by the Board or the Committee composed of two or more members, each
of whom is a "non-employee director" within the meaning of Exchange Act Rule
16b-3. To the extent required for compensation realized from Awards under the
Plan to be deductible by Calypte pursuant to Section 162(m) of the Code, such
Awards may be granted by the Committee composed of two or more members, each of
whom is an "outside director" within the meaning of Code Section 162(m).

      1.3.2 Subject to Section 3.1, the Committee shall have complete control
over the administration of the Plan and shall have the authority in its
discretion to (a) exercise all of the powers granted to it under the Plan, (b)
construe, interpret and implement the Plan and any Award Agreements, (c)
prescribe, amend and rescind rules and regulations relating to the Plan,
including rules governing its own operations, (d) make all determinations
necessary or advisable in administering the Plan, (e) correct any defect, supply
any omission and reconcile any inconsistency in the Plan, (f) amend the Plan to
reflect changes in applicable law, (g) amend any outstanding Award Agreement in
any respect, including, without limitation, to accelerate the time or times at
which the Award becomes vested, unrestricted or may be exercised, waive or amend
any goals, restrictions or conditions set forth in such Award Agreement, or
impose new goals, restrictions and conditions, or reflect a change in the
grantee's circumstances (e.g., a change to part-time employment status), and (h)
determine whether, to what extent and under what circumstances and method or
methods (1) Awards may be (A) settled in cash, shares of Common Stock, other
securities, other Awards or other property, (B) exercised or (C) canceled,
forfeited or suspended, (2) shares of Common Stock, other securities, other
Awards or other property, and other amounts payable with respect to an Award may
be deferred either automatically or at the election of the grantee thereof or of
the Committee, (3) loans (whether or not secured by Common Stock) may be
extended by the Company with respect to any Awards and (4) Awards may be settled
by Calypte, any of its subsidiaries or affiliates or any of its or their
designees.

      1.3.3 Actions of the Committee may be taken by the vote of a majority of
its members. Any action may be taken by a written instrument signed by a
majority of the Committee members, and action so taken shall be fully as
effective as if it had been taken by a vote at a meeting. The determination of
the Committee on all matters relating to the Plan or any Award Agreement shall
be final, binding and conclusive. The Committee may allocate among its members
and delegate to any person who is not a member of the Committee any of its
administrative responsibilities.

      1.3.4 No member of the Board or the Committee or any employee of the
Company shall be liable for any action or determination made in good faith with
respect to the Plan or any Award thereunder. Each such person shall be
indemnified and held harmless by Calypte against and from any loss, cost,
liability, or expense that may be imposed upon or incurred by such person in
connection with or resulting from any action, suit or proceeding to which such
person may be a party or in which such person may be involved by reason of any
action taken or failure act under the Plan or any Award Agreement and against
and from any and all amounts paid by such person, with Calypte's approval, in
settlement thereof, or paid by such person in satisfaction of any judgment in
any such action, suit or proceeding against such person, provided that Calypte
shall have the right, at its own expense, to assume and defend the same. The
foregoing right of indemnification shall not be available to a person to the
extent that a final judgment or other final adjudication binding upon such
person establishes that the acts or omissions of such person giving rise to the
indemnification claim resulted from such person's bad faith, fraud or willful
criminal act or omission. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may be
entitled under Calypte's Certificate of Incorporation or Bylaws, as a matter of
law, or otherwise, or any other power that Calypte may have to indemnify such
persons or hold them harmless.

1.4   PERSONS ELIGIBLE FOR AWARDS.

      Awards under the Plan may be made to such officers, employees (including
prospective employees), consultants and other individuals who may perform
services for the Company, as the Committee may select.

                                       11
<PAGE>

1.5   TERMINATION OF EMPLOYMENT.

      The Committee may impose on any Award or the exercise or settlement
thereof, at the date of grant or, subject to the provisions of Section 3.1,
thereafter, such additional terms and conditions not inconsistent with the
provisions of the Plan as the Committee shall determine, including terms
requiring forfeiture, acceleration or pro-rata acceleration of Awards in the
event of a Termination of Employment. Except as otherwise determined by the
Committee, all Options that have not been exercised, or any other Awards that
remain subject to a risk of forfeiture or which are not otherwise vested, or
which have outstanding Performance Periods, at the time of a Termination of
Employment shall be forfeited to the Company.

      1.5.2 TERMINATION FOR CAUSE. If a grantee's Employment is terminated for
Cause, then all Options and other Awards that remain subject to a risk of
forfeiture or which are not otherwise vested held by such grantee shall
immediately be terminated and cancelled upon Termination of Employment.

      1.5.3 DEATH, DISABILITY, TERMINATION WITHOUT CAUSE. Except as otherwise
provided in the applicable Award Agreement, upon the grantee's death, Disability
or Termination of Employment for any reason other than for Cause, the grantee:

            1.5.3.1 shall forfeit all Awards that have not previously vested or
      remain subject to a risk of forfeiture;

            1.5.3.2 shall have thirty (30) days to exercise the grantee's Awards
      that are vested on the Termination of Employment if such termination is
      for any reason other than the grantee's Disability or death; and

            1.5.3.3 shall have one (1) year to exercise the grantee's Awards
      that are vested on the date of Disability or death if the grantee's
      Termination of Employment is due to the grantee's Disability or death.

      1.5.4 TERMINATION AFTER CHANGE IN CONTROL. Except as otherwise provided by
the Committee or in the applicable Award Agreement, if any grantee's Employment
is terminated by the Company for any reason other than for Cause within six (6)
months after a "change in control" as defined in Section 3.7, then all unvested
Awards and other Awards remaining subject to a risk of forfeiture held by such
grantee shall become fully vested for exercise upon the Termination of
Employment.

      1.5.5 Any Awards not exercised within the permissible period of time shall
be forfeited by the grantee. Notwithstanding any of the foregoing, the grantee
shall not be permitted to exercise any Option at a time beyond the initial
option term.

1.6   TYPES OF AWARDS UNDER PLAN.

      Awards may be made under the Plan in the form of (a) Options, (b) stock
appreciation rights, (c) dividend equivalent rights, (d) restricted stock, (e)
restricted stock units, (f) other equity-based or equity-related Awards which
the Committee determines to be consistent with the purpose of the Plan and the
interests of the Company, and (g) Incentive Awards. No Incentive Stock Option
(other than an Incentive Stock Option that may be assumed or issued by Calypte
in connection with a transaction to which Section 424(a) of the Code applies)
may be granted to a person who is not eligible to receive an Incentive Stock
Option under the Code.

                                       12
<PAGE>

1.7   SHARES AVAILABLE FOR AWARDS.

      1.7.1 TOTAL SHARES AVAILABLE. Subject to adjustment pursuant to Section
1.7.2, the total number of shares of Common Stock which may be delivered
pursuant to Awards granted under the Plan shall be 30,000,000, of which
8,000,000 shall be available for delivery as restricted stock and restricted
stock units. If, after the effective date of the Plan, any Award is forfeited or
otherwise terminated or canceled without the delivery of shares of Common Stock
or is settled for cash, any shares of Common Stock are surrendered or withheld
from any Award to satisfy a grantee's income tax or other withholding
obligations, or any shares of Common Stock owned by a grantee are tendered to
pay the exercise price of any Award granted under the Plan, then the shares
covered by such forfeited, terminated or canceled Award or which are equal to
the number of shares settled, surrendered, withheld or tendered shall again
become available for transfer pursuant to Awards granted or to be granted under
this Plan.

      1.7.2 ADJUSTMENTS. The Committee shall adjust the number of shares of
Common Stock authorized pursuant to Section 1.7.1 and adjust (including, without
limitation, by payment of cash) the terms of any outstanding Awards (including,
without limitation, the number of shares of Common Stock covered by each
outstanding Award, the type of property to which the Award is subject and the
exercise or strike price of any Award), in such manner as necessary to preserve
the benefits or potential benefits intended to be made available to grantees of
Awards, for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
spinoff, splitup, combination or reclassification of the Common Stock, or any
other event the Committee determines in its sole discretion affects the
capitalization of Calypte, including any extraordinary dividend or distribution.
After any adjustment made pursuant to this Section 1.7, the number of shares of
Common Stock subject to each outstanding Award shall be rounded to the nearest
whole number.

      1.7.3 MAXIMUM AWARDS. Subject to adjustment as provided in Section 1.7.2,
(a) the maximum number of shares of Common Stock with respect to which Options
or stock appreciation rights may be granted to an individual grantee during any
calendar year shall equal 8,000,000 shares of Common Stock, (b) the maximum
number of shares of Common Stock with respect to which restricted stock or
restricted stock units may be granted to an individual grantee during any
calendar year shall equal 8,000,000 shares of Common Stock, (c) the total value
of any Incentive Award awarded to an individual grantee during any calendar year
shall not exceed $1,000,000. Any shares of Common Stock (a) delivered by
Calypte, (b) with respect to which Awards are made by Calypte and (c) with
respect to which Calypte becomes obligated to make Awards, in each case through
the assumption of, or in substitution for, outstanding awards previously granted
by an acquired entity, shall not be counted against the shares of Common Stock
available for Awards under this Plan. Shares of Common Stock which may be
delivered pursuant to Awards may be authorized but unissued Common Stock or
authorized and issued Common Stock held in Calypte's treasury or otherwise
acquired for the purposes of the Plan.

                                   ARTICLE II
                              AWARDS UNDER THE PLAN

2.1   AGREEMENTS EVIDENCING AWARDS.

      Each Award granted under the Plan shall be evidenced by a written document
which shall contain such provisions and conditions as the Committee deems
appropriate. The Committee may grant Awards in tandem with or in substitution
for any other Award or Awards granted under this Plan or any award granted under
any other plan of the Company. By accepting an Award pursuant to the Plan, a
grantee thereby agrees that the Award shall be subject to all of the terms and
provisions of the Plan and the applicable Award Agreement.

2.2   NO RIGHTS AS A SHAREHOLDER.

      No grantee of an Award shall have any of the rights of a shareholder of
Calypte with respect to shares subject to such Award until the delivery of such
shares. Except as otherwise provided in Section 1.7.2, no adjustments shall be
made for dividends, distributions or other rights (whether ordinary or
extraordinary, and whether in cash, Common Stock, other securities or other
property) for which the record date is prior to the date such shares are
delivered.

                                       13
<PAGE>

2.3   GRANT OF OPTIONS.

The Committee may grant Options to purchase shares of Common Stock from Calypte,
in such amounts and subject to such terms and conditions as the Committee may
determine. The price of an Option under this Plan shall be determined in the
sole discretion of the Committee; provided, however, if the Committee designates
an Option as an Incentive Stock Option, then such Option shall be granted only
to an employee of the Company, shall have a per share price not less than 100%
of the Fair Market Value of a share of Common Stock on the date of grant of the
Option, and, if granted to a person who owns capital stock (including stock
treated as owned under Section 424(d) of the Code) possessing more than 10% of
the total combined voting power of all classes of capital stock of the Company
(a "10% Owner"), have a per share price not less than 110% of the Fair Market
Value of a share of Common Stock on the date of grant, and shall be for a period
of not more than 10 years (five years if the Grantee is a 10% Owner) from the
date of grant. Notwithstanding designation as an Incentive Stock Option, if the
shares of Common Stock subject to a grantee's Incentive Stock Options (granted
under all plans of the Company), which become exercisable for the first time
during any calendar year, have a Fair Market Value in excess of $100,000, the
Options accounting for the excess will be treated as Nonqualified Stock Options.
Incentive Stock Options will be taken into account in the order in which they
were granted, and the Fair Market Value of the shares of Common Stock will be
determined as of the date of grant.

2.4   STOCK APPRECIATION RIGHTS.

      The Committee may grant Stock Appreciation Rights in conjunction with all
or part of an Option granted under the Plan. In the case of a Nonqualified Stock
Option, such rights may be granted either at or after the date of grant of such
Option. In the case of an Incentive Stock Option, such rights may be granted
only at the date of grant of such Option. A Stock Appreciation Right shall
terminate and no longer be exercisable upon the termination or exercise of the
related Option. In either case, the terms and conditions of a Stock Appreciation
Right shall be set forth in the Award Agreement for the related Option or an
amendment thereto. Stock Appreciation Rights shall be exercisable only at such
time or times and to the extent that the Options to which they relate. Upon
exercise of a Stock Appreciation Right, a grantee shall be entitled to receive
an amount equal to the product of (a) the excess of the Fair Market Value of one
share of Common Stock over the exercise price per share specified in the related
Option times (b) the number of shares in respect of which the Stock Appreciation
Right shall have been exercised, in cash, shares of Common Stock or both, with
the Committee having the right to determine the form of payment.

2.5   EXERCISE OF OPTIONS AND STOCK APPRECIATION RIGHTS.

      2.5.1 Any acceptance by the Committee of a grantee's written notice of
exercise of an Option shall be conditioned upon payment for the shares being
purchased. Such payment may be made in cash or by such other method as the
Committee may from time to time prescribe.

      2.5.2 After receiving payment from the grantee of the full Option exercise
price, or after receiving notice from the grantee of the exercise of a stock
appreciation right for which payment will be made by Calypte partly or entirely
in shares of Common Stock, Calypte shall, subject to the provisions of the Plan
or any Award Agreement, deliver the shares of Common Stock.

2.6   GRANT OF DIVIDEND EQUIVALENT RIGHTS.

      The Committee may include in the Award Agreement with respect to any Award
a dividend equivalent right entitling the grantee to receive amounts equal to
all or any portion of the dividends that would be paid on the shares of Common
Stock covered by such Award if such shares had been delivered pursuant to such
Award. The grantee of a dividend equivalent right will have only the rights of a
general unsecured creditor of Calypte until payment of such amounts is made as
specified in the applicable Award Agreement. In the event such a provision is
included in an Award Agreement, the Committee shall determine whether such
payments shall be made in cash, in shares of Common Stock or in another form,
whether they shall be conditioned upon the exercise of the Award to which they
relate, the time or times at which they shall be made, and such other terms and
conditions as the Committee shall deem appropriate.

                                       14
<PAGE>

2.7   GRANT OF RESTRICTED STOCK.

      The Committee may grant or offer for sale restricted shares of Common
Stock in such amounts and subject to such terms and conditions as the Committee
shall determine, including restrictions based upon the achievement of
Performance Goals, time-based restrictions on vesting following the attainment
of the Performance Goals; provided, that such restrictions may lapse, if so
determined by the Committee, in the event of the Grantee's Termination of
Employment due to death, Disability or Termination of Employment by the Company
without Cause. Upon the delivery of restricted shares of Common Stock, the
grantee shall have the rights of a shareholder with respect to the restricted
stock, subject to any restrictions and conditions as the Committee may include
in the applicable Award Agreement. In the event that a Certificate is issued in
respect of restricted shares of Common Stock, such Certificate may be registered
in the name of the grantee but shall be held by Calypte or its designated agent
until the time the restrictions lapse.

2.8   GRANT OF RESTRICTED STOCK UNITS.

      The Committee may grant Awards of restricted stock units in such amounts
and subject to such terms and conditions as the Committee shall determine. A
grantee of a restricted stock unit will have only the rights of a general
unsecured creditor of Calypte until delivery of shares of Common Stock or cash
is made as specified in the applicable Award Agreement. On the delivery date,
the grantee of each restricted stock unit not previously forfeited shall receive
one share of Common Stock or cash equal in value to a share of Common Stock or a
combination thereof, as specified by the Committee.

2.9   GRANT OF OTHER STOCK-BASED AWARDS.

      The Committee may grant other types of equity-based or equity-related
Awards (including the grant or offer for sale of unrestricted shares of Common
Stock) in such amounts and subject to such terms and conditions as the Committee
shall determine. Such Awards may entail the transfer of actual shares of Common
Stock to Plan participants, or payment in cash or otherwise of amounts based on
the value of shares of Common Stock.

2.10  GRANT OF INCENTIVE AWARDS.

      The Committee may grant Incentive Awards in such amounts and subject to
the achievement of Performance Goals during Performance Periods and other terms
and conditions as the Committee shall determine. Incentive Awards shall be
granted and administered to comply with the requirements of Section 162(m) of
the Code. After the applicable Performance Period has ended, the grantee shall
be entitled to payment based on the level of achievement of the Performance
Goals set by the Committee. The Committee shall certify the achievement of the
Performance Goals in writing before the Incentive Award is settled. At the
discretion of the Committee, the settlement of Incentive Awards may be in cash,
shares of Common Stock, or in some combination thereof, as set forth in the
Award Agreement. If a grantee is promoted or demoted during a Performance
Period, then, to the extent the Committee determines that the Award, the
Performance Goals or the Performance Period are no longer appropriate, the
Committee may adjust, change, eliminate or cancel the Award, the Performance
Goals or the applicable Performance Period, as it deems appropriate in order to
make them appropriate and comparable to the initial Award, the Performance Goals
or the Performance Period.

2.11  TAX OFFSET BONUSES.

      At the time an Award is made hereunder or at any time thereafter, the
Committee may grant to the grantee receiving such Award the right to receive a
cash payment in an amount specified by the Committee, to be paid at such time or
times (if ever) as the Award results in compensation income to the grantee, for
the purpose of assisting the grantee to pay the resulting taxes, all as
determined by the Committee, and on such other terms and conditions as the
Committee shall determine.

                                       15
<PAGE>

                                   ARTICLE III

                                  MISCELLANEOUS

3.1   AMENDMENT OF THE PLAN.

      3.1.1 The Board may from time to time alter, suspend, discontinue, revise,
amend or terminate the Plan in any respect whatsoever, provided, that no
termination, amendment, or modification of the Plan shall adversely affect in
any material way any Award previously granted under the Plan, without the
written consent of the grantee of such Award, except as otherwise specifically
permitted in the Plan or such Award Agreement.

      3.1.2 Unless otherwise determined by the Board, shareholder approval of
any suspension, discontinuance, revision or amendment shall be obtained only to
the extent necessary to comply with any applicable law, rule or regulation or
stock exchange requirement.

3.2   TAX WITHHOLDING.

      3.2.1 As a condition to the delivery of any shares of Common Stock
pursuant to any Award or the lifting or lapse of restrictions on any Award, or
in connection with any other event that gives rise to a federal or other
governmental tax withholding obligation on the part of Calypte or any of its
subsidiaries or affiliates relating to an Award (including, without limitation,
FICA tax), (a) Calypte may deduct or withhold (or cause to be deducted or
withheld) from any payment or distribution to a grantee whether or not pursuant
to the Plan or (b) the Committee shall be entitled to require that the grantee
remit cash to Calypte or any of its subsidiaries or affiliates (through payroll
deduction or otherwise), in each case in an amount sufficient in the opinion of
Calypte to satisfy such withholding obligation.

      3.2.2 If the event giving rise to the withholding obligation involves a
transfer of shares of Common Stock, then, unless the applicable Award Agreement
provides otherwise, at the discretion of the Committee, the grantee may satisfy
the withholding obligation described under Section 3.2.1 by electing to have
Calypte withhold shares of Common Stock (which withholding will be at a rate not
in excess of the statutory minimum rate) or by tendering previously owned shares
of Common Stock, in each case having a Fair Market Value equal to the amount of
tax to be withheld (or by any other mechanism as may be required or appropriate
to conform with local tax and other rules). For this purpose, Fair Market Value
shall be determined as of the date on which the amount of tax to be withheld is
determined (and Calypte may cause any fractional share amount to be settled in
cash).

3.3   REQUIRED CONSENTS AND LEGENDS.

      3.3.1 If the Committee shall at any time determine that any consent (as
hereinafter defined) is necessary or desirable as a condition of, or in
connection with, the granting of any Award, the delivery of shares of Common
Stock or the delivery of any cash, securities or other property under the Plan,
or the taking of any other action thereunder (each such action being hereinafter
referred to as a "plan action"), then such plan action shall not be taken, in
whole or in part, unless and until such consent shall have been effected or
obtained to the full satisfaction of the Committee. The Committee may direct
that any Certificate evidencing shares delivered pursuant to the Plan shall bear
a legend setting forth such restrictions on transferability as the Committee may
determine to be necessary or desirable, and may advise the transfer agent to
place a stop order against any legended shares.

3.3.2 The term "consent" as used herein with respect to any plan action includes
(a) any and all listings, registrations or qualifications in respect thereof
upon any securities exchange or under any federal, state, or local law, or law,
rule or regulation of a jurisdiction outside the United States, (b) any and all
written agreements and representations by the grantee with respect to the
disposition of shares, or with respect to any other matter, which the Committee
may deem necessary or desirable to comply with the terms of any such listing,
registration or qualification or to obtain an exemption from the requirement
that any such listing, qualification or registration be made, (c) any and all
other consents, clearances and approvals in respect of a plan action by any
governmental or other regulatory body or any stock exchange or self-regulatory
agency and (d) any and all consents or authorizations required to comply with,
or required to be obtained under, applicable local law or otherwise required by
the Committee. Nothing herein shall require Calypte to list, register or qualify
the shares of Common Stock on any securities exchange.

                                       16
<PAGE>

3.4   NONASSIGNABILITY.

      Except to the extent otherwise expressly provided in the applicable Award
Agreement, no Award (or any rights and obligations thereunder) granted to any
person under the Plan may be sold, exchanged, transferred, assigned, pledged,
hypothecated or otherwise disposed of (including through the use of any
cash-settled instrument) (each such action being hereinafter referred to as an
"assignment"), whether voluntarily or involuntarily, other than by will or by
the laws of descent and distribution, and all such Awards (and any rights
thereunder) shall be exercisable during the life of the grantee only by the
grantee or the grantee's legal representative. Notwithstanding the immediately
preceding sentence, the Committee may permit, under such terms and conditions
that it deems appropriate in its sole discretion, a grantee to transfer any
Award to any person or entity that the Committee so determines. Any assignment
in violation of the provisions of this Section 3.4 shall be void. All of the
terms and conditions of this Plan and the Award Agreements shall be binding upon
any such permitted successors and assigns.

3.5   REQUIREMENT OF CONSENT AND NOTIFICATION OF ELECTION UNDER SECTION 83(B) OF
      THE CODE OR SIMILAR PROVISION.

      No election under Section 83(b) of the Code (to include in gross income in
the year of transfer the amounts specified in Code Section 83(b)) or under a
similar provision of the law of a jurisdiction outside the United States may be
made unless expressly permitted by the terms of the Award Agreement or by action
of the Committee in writing prior to the making of such election. If a grantee
of an Award, in connection with the acquisition of shares of Common Stock under
the Plan or otherwise, is expressly permitted under the terms of the Award
Agreement or by such Committee action to make any such election and the grantee
makes the election, the grantee shall notify the Committee of such election
within ten (10) days of filing notice of the election with the Internal Revenue
Service or other governmental authority, in addition to any filing and
notification required pursuant to regulations issued under Code Section 83(b) or
other applicable provision.

3.6   REQUIREMENT OF NOTIFICATION UPON DISQUALIFYING DISPOSITION UNDER SECTION
      421(B) OF THE CODE.

      If any grantee shall make any disposition of shares of Common Stock
delivered pursuant to the exercise of an Incentive Stock Option under the
circumstances described in Section 421(b) of the Code (relating to certain
disqualifying dispositions), such grantee shall notify Calypte of such
disposition within 10 days thereof.

3.7   CHANGE IN CONTROL.

      3.7.1 The Committee may provide in any Award Agreement for provisions
relating to a "change in control" of Calypte (as such term is defined by the
Committee in any such Award Agreement), including, without limitation, the
acceleration or extension of the exercisability of, or the lapse of restrictions
or deemed satisfaction of goals with respect to, any outstanding Awards.

      3.7.2 Unless otherwise provided in the applicable Award Agreement, in the
event of a merger, consolidation, mandatory share exchange or other similar
business combination of Calypte with or into any other entity ("successor
entity") or any transaction in which another person or entity acquires all of
the issued and outstanding Common Stock of Calypte, or all or substantially all
of the assets of Calypte, outstanding Awards may be assumed or an equivalent
Award may be substituted by such successor entity or a parent or subsidiary of
such successor entity.

                                       17
<PAGE>

3.8   RIGHT OF DISCHARGE RESERVED.

      Nothing in the Plan or in any Award Agreement shall confer upon any
grantee the right to continued Employment by the Company or affect any right
which the Company may have to terminate such Employment.

3.9   NATURE OF PAYMENTS.

      3.9.1 Any and all grants of Awards and deliveries of Common Stock, cash,
securities or other property under the Plan shall be in consideration of
services performed or to be performed for the Company by the grantee. Awards
under the Plan may, in the discretion of the Committee, be made in substitution
in whole or in part for cash or other compensation otherwise payable to an
Employee.

      3.9.2 All such grants and deliveries shall constitute a special
discretionary incentive payment to the grantee and shall not be required to be
taken into account in computing the amount of salary or compensation of the
grantee for the purpose of determining any contributions to or any benefits
under any pension, retirement, profit-sharing, bonus, life insurance, severance
or other benefit plan of the Company or under any agreement with the grantee,
unless the Company specifically provides otherwise.

3.10  NON-UNIFORM DETERMINATIONS.

      The Committee's determinations under the Plan and Award Agreements need
not be uniform and may be made by it selectively among persons who receive, or
are eligible to receive, Awards under the Plan (whether or not such persons are
similarly situated). Without limiting the generality of the foregoing, the
Committee shall be entitled, among other things, to make non-uniform and
selective determinations under Award Agreements, and to enter into non-uniform
and selective Award Agreements, as to (a) the persons to receive Awards, (b) the
terms and provisions of Awards and (c) whether a grantee's Employment has been
terminated for purposes of the Plan.

3.11  OTHER PAYMENTS OR AWARDS.

      Nothing contained in the Plan shall be deemed in any way to limit or
restrict Calypte from making any award or payment to any person under any other
plan, arrangement or understanding, whether now existing or hereafter in effect.

3.12  PLAN HEADINGS.

      The headings in this Plan are for the purpose of convenience only and are
not intended to define or limit the construction of the provisions hereof.

3.13  DATE OF ADOPTION AND TERM OF PLAN.

The Plan was adopted by the Board on February 24, 2004, and made effective as of
June 22, 2004, the date of its approval by the Company's stockholders. Unless
sooner terminated by the Board, the Plan shall terminate on the day before the
tenth anniversary of the effective date of the Plan. The Board reserves the
right to terminate the Plan at any time; provided, however, that all Awards made
under the Plan prior to its termination shall remain in effect until such Awards
have been satisfied or terminated in accordance with the terms and provisions of
the Plan and the applicable Award Agreements.

3.14  GOVERNING LAW.

      ALL RIGHTS AND OBLIGATIONS UNDER THE PLAN AND EACH AWARD AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
DELAWARE, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.

                                       18
<PAGE>

3.15  SEVERABILITY; ENTIRE AGREEMENT.

      If any of the provisions of this Plan or any Award Agreement is finally
held to be invalid, illegal or unenforceable (whether in whole or in part), such
provision shall be deemed modified to the extent, but only to the extent, of
such invalidity, illegality or unenforceability and the remaining provisions
shall not be affected thereby; provided, that if any of such provisions is
finally held to be invalid, illegal, or unenforceable because it exceeds the
maximum scope determined to be acceptable to permit such provision to be
enforceable, such provision shall be deemed to be modified to the minimum extent
necessary to modify such scope in order to make such provision enforceable
hereunder. The Plan and any Award Agreements contain the entire agreement of the
parties with respect to the subject matter thereof and supersede all prior
agreements, promises, covenants, arrangements, communications, representations
and warranties between them, whether written or oral with respect to the subject
matter thereof.

3.16  WAIVER OF CLAIMS.

      Each grantee of an Award recognizes and agrees that prior to being
selected by the Committee to receive an Award he or she has no right to any
benefits hereunder. Accordingly, in consideration of the grantee's receipt of
any Award hereunder, he or she expressly waives any right to contest the amount
of any Award, the terms of any Award Agreement, any determination, action or
omission hereunder or under any Award Agreement by the Committee, Calypte, or
the Board, or any amendment to the Plan or any Award Agreement (other than an
amendment to this Plan or an Award Agreement to which his or her consent is
expressly required by the express terms of an Award Agreement).

3.17  NO THIRD PARTY BENEFICIARIES.

      Except as expressly provided therein, neither the Plan nor any Award
Agreement shall confer on any person other than the Company and the grantee of
any Award any rights or remedies thereunder.

3.18  SUCCESSORS AND ASSIGNS OF CALYPTE.

      The terms of this Plan shall be binding upon and inure to the benefit of
Calypte and its successors and assigns.

                                       19

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00068-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00068-of-00352.parquet"}]]