Document:

Term Sheet for Mercator Momentum Fund LLP

  
 Exhibit 10.116 
  
 Mercator Momentum Fund, LP. 
 TERM SHEET 
  
 This Term Sheet is intended as an outline of the basic terms upon which Mercator Momentum Fund, LP (“Mercator” or “Lender”) would be willing
to consider the extension of credit to Calypte Biomedical Corporation (“Borrower” or “Company”). This Term Sheet should not be construed as an offer to lend based upon such terms or as a binding commitment. The terms set forth
herein are based on limited information provided by Borrower and are subject to change pending the completion of due diligence and the approval of Mercator’s loan committee. Until the parties have executed a definite loan agreement and related
documentation, neither Mercator nor its partners shall have any obligation to fund the loan outlined herein. 
  
 September 12, 2002 
  

	Borrower: 
 	Calypte Biomedical Corporation 
 

	 	1265 Harbor BayParkway 
 

	 	Alameda, CA 94502 
 

	 	Tel: (510) 749-5100 
 

	 	Fax: (510) 526-5381 
 

 

	Lender: 
 	Mercator Momentum Fund, LP and/or other participants from time to time (collectively referred to as “Lender”). 
 

 

	Total Credit Facility: 
 	$2,000,000 
 

 

	Debenture Tranche Funding 
 	$550,000 for 1st
Debenture funding, $500,000 Debenture funding thereafter per 30 day subject to conditions as set forth herein. 
 

 

	Availability: 
 	Immediately upon the signing of a definitive agreement reflecting the Terms set forth herein. 
 

 

	Conditions Precedent: 
 	N/A. 
 

 

	Market Price: 
 	Market Price shall mean the average of the lowest three inter-day trading prices (which need not occur on consecutive Trading Days) during the twenty Trading Days
immediately preceding the applicable Conversion Date (which may include Trading Days prior to the Original Issue Date), provided, that such thirty Trading Day period shall be extended for the number of Trading Days during such period in which (A)
trading in the Common Stock is suspended by, or not traded on, the pink sheets or a Subsequent Market on which the Common Stock is then listed, or (B) after the date declared effective by the Commission, the Underlying Shares Registration Statement
is either not effective or the Prospectus included in the Underlying Shares Registration Statement may not be used by the Holder for the resale of Underlying Shares. 
 

  

	Repayment: 
 	Monthly interest, principal on maturity. Interest shall accrue until Maturity or paid in kind upon conversion. 
 

 

	Rate: 
 	12% APR 
 

 

	Commitment Fee: 
 	The Company shall pay a Commitment Fee equal to 10% of the Total Credit Facility. The entire Commitment Fee will be net funded from upon initial debenture funding.

 

 

	Maturity: 
 	The earlier of September 12, 2004 (the “Maturity Date”), the Borrower’s next equity event, or a sale or merger. 

 

	Conversion: 
 	The Note shall be convertible at the Lender’s sole discretion in part or in whole at a price equal to 85% of the Market Price. Notwithstanding the foregoing,
the Lender will not convert should the Market Price of Company be below $0.05 
 

 

	Registration: 
 	Upon the initial debenture funding of $550,000, the Company shall have a Registration Statement submitted to the SEC within 45 Days registering 200% of the common
stock of the company available for conversion immediately after the initial funding. Furthermore, the Registration Statement must be deemed effective by the SEC for the Company to receive any additional Debenture tranches. Such tranches will be
available to Company in 30 day increments. 
 

 

	Default: 
 	At an event of Default (failure to make interest and/or principle payment(s) when due, failure to submit Registration statement within 45 Days, and/or failure to
have Registration statement approved within 90 Days thereafter) the Company shall issue to the Lender 10,000 shares of Company’s common stock per day from the time of Default until Default is corrected and the lower of 18% APR or the highest
rate of interest permitted by law. The corresponding Registration statement shall be amended immediately by Company to include the Default shares, if any. 
 

 

	Common Stock: 
 	For the first Debenture in the amount of $550,000, the Company shall issue the Lender 500,000 shares of common stock of Company. Such stock shall be included in a
Registration Statement. For each Debenture thereafter the Lender will also receive additional common stock of the Company as agreed by both parties. 
 

 

	Extension: 
 	N/A 
 

 

	Collateral: 
 	N/A 
 

 

	Debt Subordination: 
 	N/A 
 

 

	Warrants: 
 	N/A 
 

 

	Financial  
 	None; provided, however, the proceeds of the Credit Facility shall not be
 
 

  

	Covenants: 
 	available to reduce or retire any insider note or convertible debt. 
 

 

	Reporting: 
 	Monthly Financials 
 

 

	Documentation: 
 	Lender’s standard documents, including: conditions to advances, representations and warranties on company status, legal compliance, liens, legal compliance;
covenants on investments, liens, debt, dispositions, insurance; remedies, jury waiver and California law provisions. 
 

 

	Expenses: 
 	Borrower to reimburse Lender for all out of pocket costs in connection with the underwriting, legal, documentation and funding of the Credit facility.

 

 

	Deposit: 
 	N/A 
 

 

	Confidentiality: 
 	This Term Sheet is confidential and proprietary to Lender. Please treat it with the same respect that we treat your private information and do not disclose it to
any third parties. 
 

 
 To confirm your agreement with these basic terms, and to permit us to proceed with our due
diligence, please fax an executed copy of this Term Sheet to our office (213.533.8285) and deliver the executed original and the Deposit to our office via courier by 5:30 p.m. September 12, 2002: 
  

Mercator Momentum Fund, LP. 
 555 South Flower Street, Suite 4500 
 Los Angeles, CA 90071 
  
 THIS TERM SHEET EXPIRES AT

 5:30 p.m. (PST) on September 12, 2002. 
 MERCATOR MOMENTUM FUND, LP. 

 
 
 
 /s/    ANSHUMAN “ANDY” DUBE 
 
Anshuman “Andy” Dube 
 General Partner 
  
 Agreed and confirmed: 
  
 Calypte Biomedical
Corporation 
  
 By:         /s/    ANTHONY J.
CATALDO                                      
               
  
 Title:     Executive
Chairman                                       
                
  
 Date:     September 12,
2002                                        
               

  
 REGISTRATION RIGHTS AGREEMENT 
  
 AGREEMENT dated as of the 12th day of September, 2002, between the person whose name and address appears in the convertible debenture (individually, a “Holder” or, collectively with the holders of the
Securities issued in the Offering, each as defined below, the “Holders”), and CALYPTE BIOMEDICAL CORPORATION., a Delaware corporation having its principal executive office at 1265 Harbor Bay Parkway, Alameda, CA 94502 (the
“Company”). 
  
 WHEREAS, the Holders have previously subscribed to a convertible debenture (the
“Debenture”) with the Company in the principal amount of U.S. $550,000 (the “Offering”). The Holders, upon conversion of the debenture may own up to a maximum of 11,000,000 Units (the “Units”), each Unit consisting of
one share of Common Stock, $.001 par value (the “Common Stock”) of the Company. 
  
 WHEREAS, the
Company desires to grant to the Holder the registration rights set forth herein with respect to the Shares; 
  
 NOW, THEREFORE, the parties hereto mutually agree as follows: 
  
 1.    Registrable Securities.    As used herein the term “Registrable Security” means each of the shares of Common Stock included in the Units; provided, however, that
with respect to any particular Registrable Security, such security shall cease to be a Registrable Security when, as of the date of determination, (i) it has been effectively registered under the Securities Act of 1933, as amended (the
“Securities Act”) and disposed of pursuant thereto, or (ii) registration under the Securities Act is no longer required for the immediate public distribution of such security. The term “Registrable Securities” means any and/or
all of the securities falling within the foregoing definition of a “Registrable Security.” In the event of any merger, reorganization, consolidation, recapitalization or other change in corporate structure affecting the Common Stock, such
adjustment shall be made in the definition of “Registrable Security” as is appropriate in order to prevent any dilution or enlargement of the rights granted pursuant to this Section 1. 
  

2.    Registration.    The Company agrees to file a registration statement (a “Registration Statement”)
with the Securities and Exchange Commission (the “Commission”) within 45 days of the completion of the Offering in order to register the resale of the Registrable Securities under the Securities Act. Once effective, the Company will be
required to maintain the effectiveness of the Registration Statement until the earlier of (i) the date that all of the Registrable Securities have been sold, or (ii) the date that the Company receives an opinion of counsel to the Company that all of
the Registrable Securities may be freely traded without registration under the Securities Act, under Rule 144 promulgated under the Securities Act or otherwise. 
  
 3.    Covenants of the Company With Respect to Registration.     

  
 The Company covenants and agrees as follows: 
  
 (1)    connection with any registration filed pursuant hereto, the Company shall use its best efforts to cause the
Registration Statement to become effective as promptly as possible and, if any stop order shall be issued by the Commission in connection therewith, to use its reasonable efforts to obtain the removal of such order. Following the effective date of a
Registration Statement, the Company shall, upon the request of the Holder, forthwith supply such reasonable number of copies of the Registration Statement, preliminary prospectus and prospectus meeting the requirements of the Securities Act, and
other documents necessary or incidental to the public offering of the Registrable Securities, as shall be reasonably requested by the Holder to permit the Holder to make a public distribution of the Holder’s Registrable Securities. The
obligations of the Company hereunder with respect to the Holder’s Registrable Securities are subject to the Holder’s furnishing to the Company such appropriate information concerning the Holder, the Holder’s Registrable Securities and
the terms of the Holder’s offering of such Registrable Securities as the Company may reasonably request in writing. 
  
 (2)    The Company shall pay all costs, fees and expenses in connection with all Registration Statements filed pursuant to Section 2 hereof including, without limitation, the Company’s legal and accounting
fees, printing expenses, and blue sky fees and expenses; provided, however, that the Holder shall be solely responsible for the fees of any counsel retained by the Holder in connection with such registration and any transfer taxes or underwriting
discounts, commissions or fees applicable to the Registrable Securities sold by the Holder pursuant thereto. 
  
 (3)    The Company will take all necessary action which may be required in qualifying or registering the Registrable Securities included in a Registration Statement for offering and sale under the securities or
blue sky laws of such states as are reasonably requested by the holders of such securities, provided that the Company shall not be obligated to execute or file any general consent to service of process or to qualify as a foreign corporation to do
business under the laws of any such jurisdiction. 
  
 4.    Additional Terms.

  
 (1)    The Company shall indemnify and hold harmless the Holder and each underwriter, within
the meaning of the Securities Act, who may purchase from or sell for the Holder, any Registrable Securities, from and against any and all losses, claims, damages and liabilities caused by any untrue statement of a material fact contained in the
Registration Statement, any other registration statement filed by the Company under the Securities Act with respect to the registration of the Registrable Securities, any post-effective amendment to such registration statements, or any prospectus
included therein or caused by any omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission based upon information furnished or required to be furnished in writing to the Company by the Holder or underwriter expressly for use therein, which indemnification shall include each person, if any, who controls
either the Holder or underwriter
 

 
within the meaning of the Securities Act and each officer, director, employee and agent of the Holder and underwriter; provided, however, that the indemnification in this Section 5(a) with
respect to any prospectus shall not inure to the benefit of the Holder or underwriter (or to the benefit of any person controlling the Holder or underwriter) on account of any such loss, claim, damage or liability arising from the sale of
Registrable Securities by the Holder or underwriter, if a copy of a subsequent prospectus correcting the untrue statement or omission in such earlier prospectus was provided to the Holder or underwriter by the Company prior to the subject sale and
the subsequent prospectus was not delivered or sent by the Holder or underwriter to the purchaser prior to such sale and provided further, that the Company shall not be obligated to so indemnify the Holder or any such underwriter or other person
referred to above unless the Holder or underwriter or other person, as the case may be, shall at the same time indemnify the Company, its directors, each officer signing the Registration Statement and each person, if any, who controls the Company
within the meaning of the Securities Act, from and against any and all losses, claims, damages and liabilities caused by any untrue statement of a material fact contained in the Registration Statement, any registration statement or any prospectus
required to be filed or furnished by reason of this Agreement or caused by any omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, insofar as such losses, claims,
damages or liabilities are caused by any untrue statement or omission based upon information furnished in writing to the Company by the Holder or underwriter expressly for use therein. 
  
 (2)    If for any reason the indemnification provided for in the preceding section is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, claim, damage, liability or expense referred to therein, then the indemnifying party, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by the
indemnified party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect not only the relative benefits received by the indemnified party and the indemnifying party, but also the relative fault of the
indemnified party and the indemnifying party, as well as any other relevant equitable considerations. 
  
 (3)    Neither the filing of a Registration Statement by the Company pursuant to this Agreement nor the making of any request for prospectuses by the Holder shall impose upon the Holder any obligation to sell the
Holder’s Registrable Securities. 
  
 (4)    The Holder, upon receipt of notice from the
Company that an event has occurred which requires a Post-Effective Amendment to the Registration Statement or a supplement to the prospectus included therein, shall promptly discontinue the sale of Registrable Securities until the Holder receives a
copy of a supplemented or amended prospectus from the Company, which the Company shall provide as soon as practicable after such notice. 
  
 (5)    If the Company fails to keep the Registration Statement referred to above continuously effective during the requisite period, then the Company shall, promptly upon the request of the Holders of at
least a majority of the unsold Registrable Securities, use its best efforts to update the Registration Statement or file a new registration statement covering the Registrable Securities remaining unsold, subject to the terms and provisions hereof.

  
 (6)    The Holder agrees to provide the Company with any
information or undertakings reasonably requested by the Company in order for the Company to include any appropriate information concerning the Holder in the Registration Statement or in order to promote compliance by the Company or the Holders with
the Securities Act. 
  
 5.    Governing Law.    The Registrable
Securities will be, if and when issued, delivered in California. This Agreement shall be deemed to have been made and delivered in the State of California and shall be governed as to validity, interpretation, construction, effect and in all other
respects by the internal substantive laws of the State of California, without giving effect to the choice of law rules thereof. 
  
 6.    Amendment.    This Agreement may only be amended by a written instrument executed by the Company and the Holder. 
  
 7.    Entire Agreement.    This Agreement constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof, and supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof. 
  
 8.    Execution in Counterparts.    This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same document. 
  
 9.    Notices.    All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed duly given when delivered by hand or mailed by
registered or certified mail, postage prepaid, return receipt requested, as follows: 
  
 If to the Holder, to his,
her or its address set forth in the Purchaser Questionnaire. 
  
 If to the Company, to the address set forth on the
first page of this Agreement. 
  
 10.    Binding Effect;
Benefits.    The Holder may assign his, her or its rights hereunder. This Agreement shall inure to the benefit of, and be binding upon, the parties hereto and their respective heirs, legal representatives and successors.
Nothing herein contained, express or implied, is intended to confer upon any person other than the parties hereto and their respective heirs, legal representatives and successors, any rights or remedies under or by reason of this Agreement.

  

  
 11.    Headings.    The
headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the meaning or interpretation of any of the terms or provisions of this Agreement. 
  
 12.    Severability.    Any provision of this Agreement which is held by a court of
competent jurisdiction to be prohibited or unenforceable in any jurisdiction(s) shall be, as to such jurisdiction(s), ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other jurisdiction. 
  
 IN WITNESS
WHEREOF, this Agreement has been executed and delivered by the parties hereto as of the date first above written. 
  
 CALYPTE BIOMEDICAL CORPORATION. 
  
 By:                                     
                                        
                    
  
 Name: 
  
 
             Its: 
  
 
 
 HOLDER: 
  
 MERCATOR MOMENTUM FUND, LP 
  
 By:                                     
                                        
                    
  
              Its: 
  
 

  
 November 7, 2002 
  
 VIA E-Mail and First Class Mail 
  
 Mr. Anthony J. Cataldo 
 Executive Chairman 
 Calypte Biomedical Corp. 
 1265 Harbor
Bay Parkway 
 Alameda, CA 94502 
  
 Re: Registration Rights
Agreement—Waiver of Default—Amendment. 
  
 Dear Tony: 
  
 Please permit the within to confirm our prior understanding and agreement with respect to our waiver of the provision requiring Calypte Biomedical Corporation to file a Registration Statement (as
defined in the Registration Rights Agreement dated as of the 12th day of September, 2002 (the
“Agreement”)). The requirement to file a Registration Statement is hereby extended an additional forty five (45) days through December 11, 2002. All other terms and conditions of the Agreement remain in full force and effect unless
modified in writing with the mutual consent of both parties. Please countersign this letter acknowledging your agreement to the waiver and amendment and forward a fully executed copy of this letter back to me at our office. 
  
 Should you have any questions, please call me. 
  
 Kindest Regards, 
 Mercator Group, LLC. 
  
 /s/    DAVID FIRESTONE 
 David Firestone 
 Managing Partner

  
 Agreed to: 
  
 Calypte
Biomedical Corporation 
  
 /s/    ANTHONY J.
CATALDO 
 
Anthony J. Cataldo 
 Executive ChairmanForms of Subscription Agreement

  
 EXHIBIT 10.117 
  
 SUBSCRIPTION AGREEMENT 
  
 , 2002 

 
 Dear Subscriber: 
  
 You, together with other subscribers (each a “Subscriber”) hereby agree to purchase, and Calypte Biomedical Corporation, a Delaware corporation (the “Company”), hereby agrees to issue and to sell to the
Subscriber, Shares of the Company’s $.001 par value common stock (the “Company Shares”) for the consideration as set forth on the signature page hereof (“Purchase Price”). (The Company Shares are sometimes referred to herein
as the “Shares”, “Common Shares”, “Securities”, or “Common Stock”). Upon acceptance of this Agreement by the Subscriber, the Company shall issue and deliver the Shares against payment, by federal funds wire
transfer, or bank, or certified check of the Purchase Price. 
  
 The following terms and conditions shall apply to
this Subscription. 
  
 1.    Subscriber’s Representations and
Warranties.    The Subscriber hereby represents and warrants to and agrees with the Company that: 
  
 (a)    Information on Company.    The Subscriber has been furnished with the Company’s Form 10-K and 10-K/A for the year ended December 31, 2001 as filed with the Securities and
Exchange Commission (the “Commission”) together with all subsequently filed forms 10-Q, 8-K, Preliminary Proxy Statement, and pending Form S-2 Registration Statement Amendment I, and other publicly available filings made with the
Commission (hereinafter referred to collectively as the “Reports”). In addition, the Subscriber has received from the Company such other information concerning its operations, financial condition and other matters as the Subscriber has
requested (such information in writing is collectively, the “Other Written Information”), and considered all factors the Subscriber deems material in deciding on the advisability of investing in the Shares of Common Stock. 

 
 (b)    Information on Subscriber.    The Subscriber is and was not a “U.S.
person”, as defined in Regulation S promulgated under the Securities Act of 1933 at the time the offer or sale of the Shares of Common Stock is made. Additionally, Subscriber is an “accredited investor”, as such term is defined in
Regulation D promulgated by the Commission under the Securities Act of 1933, as amended (the “1933 Act”), is experienced in investments and business matters, has made investments of a speculative nature and has purchased securities of
United States publicly-owned companies in private placements in the past and, with its representatives, has such knowledge and experience in financial, tax and other business matters as to enable the Subscriber to utilize the information made
available by the Company to evaluate the merits and risks of and to make an informed investment decision with respect to the proposed purchase, which represents a speculative investment. The Subscriber has the authority and is duly and legally
qualified to purchase and own the Shares of Common Stock. The Subscriber is able to bear the risk of such investment for an indefinite period and to afford a complete loss thereof. The information set forth on the signature page hereto regarding the
Subscriber is accurate. 
  
 (c)    Purchase of Shares.    On the
Closing Date, the Subscriber will purchase the Company Stock for its own account and not with a view to any distribution thereof 

  
 and that the purchase of the Common Stock is intended to be made as an “Offshore Transaction”
as defined in Regulation S. 
  
 (d)    Compliance with Securities
Act.    The Subscriber understands and agrees that the Shares have not been registered under the 1933 Act, by reason of their issuance in a transaction that does not require registration under the 1933 Act (based in part on
the accuracy of the representations and warranties of Subscriber contained herein), and that such Shares of Common Stock must be held unless a subsequent disposition is registered under the 1933 Act or is exempt from such registration. 

 
 (e)    Company Shares Legend.    The Company Shares shall bear the following
legend, unless same shall have been included in an effective registration statement under the 1933 Act: 
  
 
	 “THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THESE SHARES MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO CALYPTE BIOMEDICAL CORPORATION THAT SUCH REGISTRATION IS NOT
REQUIRED”.
 

 
  
 (f)    Communication of
Offer.    The offer to sell the Shares of Common Stock was directly communicated to the Subscriber. At no time was the Subscriber presented with or solicited by any leaflet, newspaper or magazine article, radio or television
advertisement, or any other form of general advertising or solicited or invited to attend a promotional meeting otherwise than in connection and concurrently with such communicated offer. 
  
 (g)    Correctness of Representations.    The Subscriber represents that the foregoing representations and warranties are
true and correct as of the date hereof and, unless the Subscriber otherwise notifies the Company prior to the Closing Date (as hereinafter defined), shall be true and correct as of the Closing Date. The foregoing representations and warranties shall
survive the Closing Date. 
  
 2.    Company Representations and
Warranties.    The Company represents and warrants to and agrees with the Subscriber that: 
  
 (a)    Due Incorporation.    The Company and each of its subsidiaries, if any, is a corporation duly organized, validly existing and in good standing under the laws of the respective
jurisdictions of their incorporation and have the requisite corporate power to own their properties and to carry on their business as now being conducted. The Company and each of its subsidiaries is duly qualified as a foreign corporation to do
business and is in good standing in each jurisdiction where the nature of the business conducted or property owned by it makes such qualification necessary, other than those jurisdictions in which the failure to so qualify would not have a material
adverse effect on the business, operations or financial condition of the Company. 

  
 (b)    Outstanding Stock.    All
issued and outstanding shares of capital stock of the Company and each of its subsidiaries has been duly authorized and validly issued and are fully paid and non-assessable. 
  
 (c)    Authority; Enforceability.    This Agreement and other agreements delivered together with this Agreement or in
connection herewith have been duly authorized, executed and delivered by the Company and are valid and binding agreements enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting creditors’ rights generally and to general principles of equity; and the Company has full corporate power and authority necessary to enter into this Agreement, and such other
agreements and to perform its obligations hereunder and under all other agreements entered into by the Company relating hereto. 
  
 (d)    Additional Issuances.    Except as set forth on Schedule 2(d), there are no outstanding agreements or preemptive or similar rights affecting the Company’s common stock or
equity and no outstanding rights, warrants or options to acquire, or instruments convertible into or exchangeable for, or agreements or understandings with respect to the sale or issuance of any shares of common stock or equity of the Company or
other equity interest in any of the subsidiaries of the Company except as described in the Reports or Other Written Information. 
  
 (e)    Consents.    No consent, approval, authorization or order of any court, governmental agency or body or arbitrator having jurisdiction over the Company, or any of its affiliates,
the National Association of Securities Dealers, Inc. (“NASD”), NASDAQ or the Company’s Shareholders is required for execution of this Agreement, and all other agreements entered into by the Company relating thereto, including, without
limitation, the issuance and sale of the Securities, and the performance of the Company’s obligations hereunder and under all such other agreements. 
  
 (f)    No Violation or Conflict.    Assuming the representations and warranties of the Subscriber in Paragraph 1 are true and correct and the Subscriber
complies with its obligations under this Agreement, neither the issuance and sale of the Shares of Common Stock nor the performance of the Company’s obligations under this Agreement and all other agreements entered into by the Company relating
thereto by the Company will: 
  
 (i)    violate, conflict with, result in a breach of, or
constitute a default (or an event which with the giving of notice or the lapse of time or both would be reasonably likely to constitute a default) under (A) the certificate of incorporation, charter or bylaws of the Company, (B) to the
Company’s knowledge, any decree, judgment, order, law, treaty, rule, regulation or determination applicable to the Company of any court, governmental agency or body, or arbitrator having jurisdiction over the Company or any of its affiliates or
over the properties or assets of the Company or any of its affiliates, (C) the terms of any bond, debenture, note or any other evidence of indebtedness, or any agreement, stock option or other similar plan, indenture, lease, mortgage, deed of trust
or other instrument to which the Company or any of its affiliates is a party, by which the Company or any of its affiliates is bound, or to which any of the properties of the Company or any of its affiliates is subject, or (D) the terms of any
“lock-up” or similar provision of any underwriting or similar agreement to which the Company, or any of its affiliates is a party except the violation, conflict, breach, or default of which would not have a material adverse effect on the
Company; or 

  
 (ii)    result in the creation or imposition of any lien,
charge or encumbrance upon the Shares of Common Stock or any of the assets of the Company, its subsidiaries or any of its affiliates. 
  
 (g)    The Shares of Common Stock.    The Shares upon issuance: 
  
 (i)    are, or will be, free and clear of any security interests, liens, claims or other encumbrances, subject to restrictions upon transfer under the 1933 Act and State laws; 
  
 (ii)    have been, or will be, duly and validly authorized and on the date of issuance and on the Closing Date, as
hereinafter defined, and will be duly and validly issued, fully paid and nonassessable (and if registered pursuant to the 1933 Act, and resold pursuant to an effective Registration Statement will be free trading and unrestricted, provided that the
Subscriber complies with the Prospectus delivery requirements); 
  
 (iii)    will not have been
issued or sold in violation of any preemptive or other similar rights of the holders of any Shares of Common Stock of the Company; and 
  
 (iv)    will not subject the holders thereof to personal liability by reason of being such holders. 
  
 (h)    Litigation.    There is no pending or, to the best knowledge of the Company, threatened action, suit, proceeding or investigation before any court,
governmental agency or body, or arbitrator having jurisdiction over the Company, or any of its affiliates that would affect the execution by the Company or the performance by the Company of its obligations under this Agreement, and all other
agreements entered into by the Company relating hereto. Except as disclosed in the Securities and Exchange Commission filings, Reports or Other Written Information, there is no pending or, to the best knowledge of the Company, threatened action,
suit, proceeding or investigation before any court, governmental agency or body, or arbitrator having jurisdiction over the Company, or any of its affiliates which litigation if adversely determined could have a material adverse effect on the
Company. 
  
 (i)    Reporting Company.    The Company is a
publicly-held company subject to reporting obligations pursuant to Sections 15(d) and 13 of the Securities Exchange Act of 1934, as amended (the “1934 Act”) and has a class of common shares registered pursuant to Section 12(g) of the 1934
Act. The Company’s common stock is listed for trading on the OTC Bulletin Board (“Bulletin Board”). Pursuant to the provisions of the 1934 Act, the Company has filed all reports and other materials required to be filed thereunder with
the Securities and Exchange Commission during the preceding twelve months. 
  
 (j)    No
Market Manipulation.    The Company has not taken, and will not take, directly or indirectly, any action designed to, or that might reasonably be expected to, cause or result in stabilization or manipulation of the price of
the common stock of the Company to facilitate the sale or resale of the Shares of Common Stock or affect the price at which the Shares may be issued or resold. 
  
 (k)    Information Concerning Company.    The Reports contain all material information relating to the Company and its operations and financial condition
as of their 

 
respective dates which information is required to be disclosed therein. Since the date of the financial statements included in the Reports, and except as modified in the Other Written Information
or in the Schedule hereto, there has been no material adverse change in the Company’s business, financial condition or affairs not disclosed in the Reports. The Reports do not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances when made. 
  
 (l)    Dilution.    The Company’s executive officers and directors have studied and fully understand the nature of the Stock being sold hereby and
recognize that they have a potential dilutive effect. The board of directors of the Company has concluded, in its good faith business judgment, that such issuance is in the best interests of the Company. The Company specifically acknowledges that
its obligation to issue the Shares upon payment is binding upon the Company and enforceable, except as otherwise described in this Subscription Agreement, regardless of the dilution such issuance may have on the ownership interests of other
shareholders of the Company. 
  
 (m)    Stop Transfer.    The Shares
of Common Stock are restricted securities as of the date of this Agreement. The Company will not issue any stop transfer order or other order impeding the sale, resale or delivery of the Stock, except as may be required by federal securities laws.

  
 (n)    Defaults.    To the best of the Company’s knowledge,
neither the Company nor any of its subsidiaries is in violation of its Certificate of Incorporation or ByLaws. Neither the Company nor any of its subsidiaries is (i) in default under or in violation of any other material agreement or instrument to
which it is a party or by which it or any of its properties are bound or affected, which default or violation would have a material adverse effect on the Company, (ii) in default with respect to any order of any court, arbitrator or governmental
body or subject to or party to any order of any court or governmental authority arising out of any action, suit or proceeding under any statute or other law respecting antitrust, monopoly, restraint of trade, unfair competition or similar matters,
or (iii) to its knowledge in violation of any statute, rule or regulation of any governmental authority which violation would have a material adverse effect on the Company. 
  
 (o)    No Integrated Offering.    The Company believes that neither the Company, nor any of its affiliates, nor any person
acting on its or their behalf, has directly or indirectly made any offers or sales of any security or solicited any offers to buy any security under circumstances that would cause the offer of the Shares of Common Stock pursuant to this Agreement to
be integrated with prior offerings by the Company for purposes of the 1933 Act or any applicable stockholder approval provisions, including, without limitation, under the rules and regulations of the Bulletin Board nor will the Company or any of its
affiliates or subsidiaries take any action or steps that would cause the offering of the Common Stock to be integrated with other offerings. The Company has not conducted and will not conduct any offer other than the transactions contemplated hereby
that will be integrated with the offer or issuance of the Common Stock. Subscribers warrant and represent to the Company that each Subscriber has not taken any action that would cause a violation of the integration regulation as promulgated by
Federal Law as made and provided. 
  
 (p)    No General
Solicitation.    Neither the Company, nor any of its affiliates, nor to its knowledge, any person acting on its or their behalf, has engaged in any form 

 
of general solicitation or general advertising (within the meaning of Regulation S or D under the Act) in connection with the offer or sale of the Common Stock. 
  
 (q)    Listing.    The Company’s Common Stock is quoted on, and listed for trading on
the Bulletin Board. The Company has not received any oral or written notice that its Common Stock will be delisted from the Bulletin Board or that the Company’s Common Stock does not meet all requirements for the continuation of such listing.

  
 (r)    No Undisclosed Liabilities.    The Company has no
liabilities or obligations which are material, individually or in the aggregate, which are not disclosed in the Reports, Securities and Exchange Commission filings, and Other Written Information, other than those incurred in the ordinary course of
the Company’s businesses since December 31, 2001 and which, individually or in the aggregate, would not reasonably be expected to have a material adverse effect on the Company’s financial condition. 
  
 (s)    No Undisclosed Events or Circumstances.    Since December 31, 2001, no event or
circumstance has occurred or exists with respect to the Company or its businesses, properties, operations or financial condition, that, under applicable law, rule or regulation, requires public disclosure or announcement prior to the date hereof by
the Company but which has not been so publicly announced or disclosed in the Reports. 
  
 (t)    Capitalization.    The authorized and outstanding capital stock of the Company as of the date of this Agreement and the Closing Date are set forth on Schedule 2(t) hereto. Except
as set forth in the Reports and Other Written Information and Securities and Exchange Commission filings, there are no options, warrants, or rights to subscribe to, securities, rights or obligations convertible into or exchangeable for or giving any
right to subscribe for any shares of capital stock of the Company. All of the outstanding shares of Common Stock of the Company have been duly and validly authorized and issued and are fully paid and nonassessable. 
  
 (u)    Correctness of Representations.    The Company represents that the foregoing
representations and warranties are true and correct as of the date hereof in all material respects, and, unless the Company otherwise notifies the Subscriber prior to the Closing Date, shall be true and correct in all material respects as of the
Closing Date. The foregoing representations and warranties shall survive the Closing Date. 
  
 3.    Regulation S Offering.    This Offering is being made pursuant to the exemption from the registration provisions of the Securities Act of 1933, as amended, afforded by Regulation S
promulgated there under. On the Closing Date, the Company will provide an opinion from the Company’s legal counsel based upon the representation of Subscribers opining on the availability of the Regulation S exemption as it relates to the offer
and issuance of the Shares of Common Stock. 
  
 4.    Reissuance of Shares of Common
Stock.    The Company agrees to reissue certificates representing the Shares of Common Stock without the legend set forth in Sections 1(e) above at such time as (a) the holder thereof is permitted to and disposes of such
Shares of Common Stock pursuant to Rule 144(d) and/or Rule 144(k) under the 1933 Act or Regulation “S” in the opinion of counsel reasonably satisfactory to the Company, or (b) upon resale subject to an effective registration statement
after the Shares are registered under the 1933 Act. The Company agrees to cooperate with the Subscriber in connection with all resales pursuant to Rule 144(d) and Rule 144(k) and provide legal opinions necessary to allow such resales provided the
Company and its counsel receive requested written representations from the Subscriber and selling broker, 

 
if any. Provided the Subscriber provides required certifications and representation letters, if any, if the Company fails to remove any legend as required by this Section 4 (a “Legend
Removal Failure”), then beginning on the tenth (10th) day following the date that the Subscriber has
requested the removal of the legend and delivered all items reasonably required by the Company to be delivered by the Subscriber, the Company continues to fail to remove such legend, the Company shall pay to each Subscriber or assignee holding
Shares, subject to a Legend Removal Failure, as liquidated damages and not a penalty an amount equal to one percent (1%) of the Purchase Price of the Shares subject to a Legend Removal Failure per day that such failure continues. If during any
twelve (12) month period, the Company fails to remove any legend as required by this Section 4 for an aggregate of thirty (30) days, each Subscriber or assignee holding Shares subject to a Legend Removal Failure may, at its option, require the
Company to purchase all or any portion of the Shares subject to a Legend Removal Failure held by such Subscriber or assignee at a price per share equal to 120% of the applicable Purchase Price. 
  

5.    Regulation D.    In the event that a Subscriber does not qualify under Regulation S and qualifies under Regulation
D, the Company covenants and agrees that if the Company fails to file a Registration Statement for Company Shares within ninety (90) days from the Closing Date pursuant to Section 10.1(iv) below, then for so long as such registration statement is
not effective and as any of the Company Shares remain outstanding and continue to be “restricted Shares” within the meaning of Rule 144, the Company shall, in order to permit resales of any of the Company Shares pursuant to Rule 144 under
the 1933 Act, (a) continue to file all material required to be filed pursuant to Section 13(a) or 15(d) of the 1934 Act. 
  
 6.    Indemnification.    The Company on the one hand, and the Subscriber on the other hand, agree to indemnify the other against and hold the other harmless from any and all liabilities
to any other persons claiming brokerage commissions or finder’s fees other than Careen Limited on account of services purported to have been rendered on behalf of the indemnifying party in connection with this Agreement or the transactions
contemplated hereby and arising out of such party’s actions. The Company and the Subscriber represent to each other that there are no other parties entitled to receive fees, commissions, or similar payments in connection with the offering
described in the Subscription Agreement. 
  
 7.    Covenants of the
Company.    The Company covenants and agrees with the Subscriber as follows: 
  
 (a)    The Company will advise the Subscriber, promptly after it receives notice of issuance by the Securities and Exchange Commission, any state securities commission or any other regulatory authority of any stop
order or of any order preventing or suspending any offering of any securities of the Company, or of the suspension of the qualification of the Common Stock of the Company for offering or sale in any jurisdiction, or the initiation of any proceeding
for any such purpose. 
  
 (b)    The Company will maintain the listing of its Common Stock on
the NASDAQ SmallCap Market, NASDAQ National Market System, NASD OTC Bulletin Board, or New York Exchange, or Pink Sheet Trading Market (whichever of the foregoing is at the time the principal trading exchange or market for the Common Stock (the
“Principal Market”), and will use its best efforts to comply, in all respects, with the Company’s reporting, filing and other obligations under the bylaws or rules of the National Association of Securities Dealers (“NASD”)
and such exchanges, as applicable. The Company will provide the Subscriber copies of all notices it receives notifying the Company of the threatened and actual delisting of the Common Stock from any Principal Market. 

  
 (c)    The Company shall notify the Commission, NASD, the
Principal Market and applicable state authorities, in accordance with their requirements, if any, of the transactions contemplated by this Agreement, and shall take all other necessary action and proceedings as may be required and permitted by
applicable law, rule and regulation, for the legal and valid issuance of the Shares of Common Stock to the Subscriber and promptly provide copies thereof to Subscriber. 
  
 (d)    From the Closing Date and until at least one (1) year after the effectiveness of the Registration Statement on Form S-2 or such other
Registration Statement described in Section 10.1(iv) hereof, the Company will (i) cause its Common Stock to continue to be registered under Sections 12(b) or 12(g) of the Exchange Act, (ii) comply in all respects with its reporting and filing
obligations under the Exchange Act, (iii) comply with all reporting requirements that are applicable to an issuer with a class of Shares registered pursuant to Section 12(g) of the Exchange Act, and (iv) comply with all requirements related to any
registration statement filed pursuant to this Agreement. The Company will use its best efforts not to take any action or file any document (whether or not permitted by the Act or the Exchange Act or the rules thereunder) to terminate or suspend such
registration or to terminate or suspend its reporting and filing obligations under said Acts until one (1) year after the actual effective date of the Registration Statement on Form S-2 or other Registration Statement described in Section 10.1(iv)
hereof. Until the resale of the Company Shares by the Subscriber, the Company will use its best efforts to continue the listing of the Common Stock on the Bulletin Board and will comply in all respects with the Company’s reporting, filing and
other obligations under the bylaws or rules of Bulletin Board. 
  
 8.    Covenants of the
Company and Subscriber Regarding Indemnification. 
  
 (a)    The Company agrees to
indemnify, hold harmless, reimburse and defend Subscriber, Subscriber’s officers, directors, agents, affiliates, control persons, and principal shareholders, against any claim, cost, expense, liability, obligation, loss or damage (including
reasonable legal fees) of any nature, incurred by or imposed upon Subscriber or any such person which results, arises out of or is based upon (i) any material misrepresentation by Company or breach of any warranty by Company in this Agreement or in
any Exhibits or Schedules attached hereto, or other agreement delivered pursuant hereto; or (ii) after any applicable notice and/or cure periods, any breach or default in performance by the Company of any covenant or undertaking to be performed by
the Company hereunder, or any other agreement entered into by the Company and Subscribers relating hereto. 
  
 (b)    Subscriber agrees to indemnify, hold harmless, reimburse and defend the Company and each of the Company’s officers, directors, agents, affiliates, control persons against any claim, cost, expense,
liability, obligation, loss or damage (including reasonable legal fees) of any nature, incurred by or imposed upon the Company or any such person which results, arises out of or is based upon (i) any material misrepresentation by Subscriber in this
Agreement or in any Exhibits or Schedules attached hereto, or other agreement delivered pursuant hereto; or (ii) after any applicable notice and/or cure periods, any breach or default in performance by Subscriber of any covenant or undertaking to be
performed by Subscriber hereunder, or any other agreement entered into by the Company and Subscribers relating hereto. 

  
 (c)    The procedures set forth herein shall apply to the
indemnifications set forth in Sections 8(a) and 8(b) above. 
  
 10.1.    Registration
Rights.    The Company hereby grants the following registration rights to holders of the Shares of Common Stock. 
  
 (a)    The Company hereby agrees to register the Shares of Common Stock herein on a Form S-2 or any other applicable Form with the Securities and Exchange Commission within ninety (90) days of the date
hereof, and it is further agreed that, should the Company not file a Registration Statement, as provided for herein, within the said 90 day period, that the Company will pay any liquidated damage penalty in the amount of up to 250,000 Common Shares
for each ten (10) days that the Company fails to file the Registration Statement, as stated herein. It is understood that the liquidated damages will be calculated on a pro rata basis based upon the number of shares purchased by Subscribers.
Subscribers agree that the registration will be on an optional piggy-back or single registration basis at the option of the Company, and that the Company will bear all costs and expenses of the registration. 
  
 (b)    The Company agrees to give ten (10) days written notice to all Subscribers of the filing of the Registration
Statement, and Subscribers agree that each will cooperate with the Company in providing the necessary information required by each Subscriber to file a Registration Statement on that Subscriber’s behalf. 
  
 (c)    Each Subscriber agrees to execute the within Agreement and to subscribe for the number of Shares of Common
Stock as agreed to by Subscriber. 
  
 10.2.    Registration
Procedures.    If and whenever the Company is required by the provisions hereof to effect the registration of any Shares of Common Stock under the Act, the Company will, as expeditiously as possible: 
  
 (a)    prepare and file with the Commission a Registration Statement with respect to such Shares of Common Stock and
use its best efforts to cause such Registration Statement to become and remain effective for the period of the distribution contemplated thereby (determined as herein provided), and promptly provide to the holders of Shares of Common Stock
(“Sellers”) copies of all filings with the Commission; 
  
 (b)    prepare and file
with the Commission such amendments and supplements to such Registration Statement and the prospectus used in connection therewith as may be necessary to keep such Registration Statement effective until the latest of: (i) 180 days following the
effective date of the Registration Statement; 
  
 (c)    furnish to the Seller, such number of
copies of the Registration Statement and the prospectus included therein (including each preliminary prospectus) as such Seller reasonably may request in order to facilitate the public sale or their disposition of the securities covered by such
Registration Statement; 
  
 (d)    use its best efforts to register or qualify the Seller’s
Shares of Common Stock covered by such Registration Statement under the securities or “blue sky” laws of such jurisdictions as the Seller shall reasonably designate, provided, however, that the Company shall not for any such purpose be
required to qualify generally to transact business as a 

 
foreign corporation in any jurisdiction where it is not so qualified or to consent to general service of process in any such jurisdiction; 
  

(e)    list the Shares of Common Stock covered by such Registration Statement with any securities exchange on which the Common Stock of the
Company is then listed; 
  
 (f)    immediately notify the Seller when a prospectus relating
thereto is required to be delivered under the Act, of the happening of any event of which the Company has knowledge as a result of which the prospectus contained in such Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; 
  
 (g)    make available for inspection by the Seller, and any attorney retained by the Seller, all publicly available, non-confidential financial and
other records, pertinent corporate documents and properties of the Company, and cause the Company’s officers, directors and employees to supply all publicly available, non-confidential information reasonably requested by the attorney for Seller
in connection with such Registration Statement; 
  
 (h)    will notify the Subscriber of the
effectiveness of the Registration Statement within one business day of such event. 
  
 10.3.    Provision of Documents.    In connection with each registration hereunder, the Seller will furnish to the Company in writing such information and representation letters with
respect to itself and the proposed distribution by it as reasonably shall be necessary in order to assure compliance with federal and applicable state securities laws. In connection with each registration pursuant to Section 10.1(i) or 10.1(ii)
covering an underwritten public offering, the Company and the Seller agree to enter into a written agreement with the managing underwriter in such form and containing such provisions as are customary in the securities business for such an
arrangement between such underwriter and companies of the Company’s size and investment stature. 
  
 10.4.    Expenses.    All expenses incurred by the Company in complying with Section 10, including, without limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel and independent public accountants for the Company, fees and expenses (including reasonable counsel fees) incurred in connection with complying with state securities or “blue sky” laws, fees of the National
Association of Securities Dealers, Inc., transfer taxes, fees of transfer agents and registrars, and costs of insurance are called “Registration Expenses”. All underwriting discounts and selling commissions applicable to the sale of Shares
of Common Stock, including any fees and disbursements of any special counsel to the Seller, are called “Selling Expenses”. The Seller shall pay the fees of its own additional counsel, if any. The Company will pay all Registration Expenses
in connection with the registration statement under Section 10. All Selling Expenses in connection with each registration statement under Section 10 shall be borne by the Seller and may be apportioned among the Sellers in proportion to the number of
shares sold by the Seller relative to the number of shares sold under such registration statement or as all Sellers thereunder may agree. 
  
 10.5.    Indemnification and Contribution. 
  
 (a)    In the event of a registration of any Shares of Common Stock 

 
under the Act pursuant to Section 10, the Company will indemnify and hold harmless the Seller, each officer of the Seller, each director of the Seller, each underwriter of such Shares of Common
Stock thereunder and each other person, if any, who controls such Seller or underwriter within the meaning of the 1933 Act, against any losses, claims, damages or liabilities, joint or several, to which the Seller, or such underwriter or controlling
person may become subject under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact
contained in any Registration Statement under which such Shares of Common Stock were registered under the Act pursuant to Section 10, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereof, or arise
out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances when made, and will reimburse the
Seller, each such underwriter and each such controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the
Company shall not be liable to the Seller to the extent that any such damages arise out of or are based upon an untrue statement or omission made in any preliminary prospectus if (i) the Seller failed to send or deliver a copy of the final
prospectus delivered by the Company to the Seller with or prior to the delivery of written confirmation of the sale by the Seller to the person asserting the claim from which such damages arise, (ii) the final prospectus would have corrected such
untrue statement or alleged untrue statement or such omission or alleged omission, or (iii) to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made in conformity with information furnished by any such Seller, or any such controlling person in writing specifically for use in such Registration Statement or prospectus. 
  

(b)    In the event of a registration of any of the Shares of Common Stock under the Act pursuant to Section 10, the Seller will indemnify and
hold harmless the Company, and each person, if any, who controls the Company within the meaning of the Act, each officer of the Company who signs the Registration Statement, each director of the Company, each underwriter and each person who controls
any underwriter within the meaning of the Act, against all losses, claims, damages or liabilities, joint or several, to which the Company or such officer, director, underwriter or controlling person may become subject under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement under which such
Shares of Common Stock were registered under the Act pursuant to Section 10, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company and each such officer, director, underwriter and controlling person for any legal or other
expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action, provided, however, that the Seller will be liable hereunder in any such case if and only to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with information pertaining to such Seller, as such,
furnished in writing to the Company by such Seller specifically for use in such registration statement or prospectus, and provided, further, however, that the liability of the Seller hereunder shall be limited to the gross proceeds received by the
Seller from the sale of Common Stock covered by such Registration Statement. 

  
 (c)    Promptly after receipt by an indemnified party
hereunder of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party hereunder, notify the indemnifying party in writing thereof, but the omission so to
notify the indemnifying party shall not relieve it from any liability which it may have to such indemnified party other than under this Section 10.5(c) and shall only relieve it from any liability which it may have to such indemnified party under
this Section 10.5(c), except and only if and to the extent the indemnifying party is prejudiced by such omission. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate in and, to the extent it shall wish, to assume and undertake the defense thereof with counsel satisfactory to such indemnified party, and, after notice from the indemnifying party to
such indemnified party of its election so to assume and undertake the defense thereof, the indemnifying party shall not be liable to such indemnified party under this Section 10.5(c) for any legal expenses subsequently incurred by such indemnified
party in connection with the defense thereof other than reasonable costs of investigation and of liaison with counsel so selected, provided, however, that, if the defendants in any such action include both the indemnified party and the indemnifying
party and the indemnified party shall have reasonably concluded that there may be reasonable defenses available to it which are different from or additional to those available to the indemnifying party or if the interests of the indemnified party
reasonably may be deemed to conflict with the interests of the indemnifying party, the indemnified parties shall have the right to select one separate counsel and to assume such legal defenses and otherwise to participate in the defense of such
action, with the reasonable expenses and fees of such separate counsel and other expenses related to such participation to be reimbursed by the indemnifying party as incurred. 
  
 (d)    In order to provide for just and equitable contribution in the event of joint liability under the Act in any case in which either (i) the
Seller, or any controlling person of the Seller, makes a claim for indemnification pursuant to this Section 10.5, but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of
time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Section 10.5 provides for indemnification in such case, or (ii) contribution under the Act may be
required on the part of the Seller or controlling person of the Seller in circumstances for which indemnification is provided under this Section 10.5; then, and in each such case, the Company and the Seller will contribute to the aggregate losses,
claims, damages or liabilities to which they may be subject (after contribution from others) in such proportion so that the Seller is responsible only for the portion represented by the percentage that the public offering price of its Shares of
Common Stock offered by the Registration Statement bears to the public offering price of all Shares of Common Stock offered by such Registration Statement. 
  
 11.    Miscellaneous. 
  
 (a)    Notices.    All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified
herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery,
telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective
(a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if
 

 
delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during
normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall
first occur. The addresses for such communications shall be: (i) if to the Company to Calypte Biomedical Corporation, 1265 Harbor Bay Parkway, Alameda, California 94502, telecopier number: (510) 814-8494, and (ii) if to the Subscriber, to the name,
address and telecopier number set forth on the signature page hereto, with a copy by telecopier only to Careen Limited, 14 Rovert Home Market Street, P. O. Box CB 12345, Nassau, Bahamas. 
  
 (b)    Closing.    The consummation of the transactions contemplated herein shall take place at the offices of , upon the
satisfaction of all conditions to Closing set forth in this Agreement. The closing date shall be the date that Subscriber funds representing the net amount due the Company from the Purchase Price of the Offering is transmitted by wire transfer or
otherwise to the Company (the “Closing Date”). 
  
 (c)    Entire Agreement;
Assignment.    This Agreement represents the entire agreement between the parties hereto with respect to the subject matter hereof and may be amended only by a writing executed by both parties. No right or obligation of
either party shall be assigned by that party without prior notice to and the written consent of the other party. 
  
 (d)    Execution.    This Agreement may be executed by facsimile transmission, and in counterparts, each of which will be deemed an original. 
  
 (e)    Law Governing this Agreement.    This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the
state courts of New York or in the federal courts located in the state of New York. Both parties and the individuals executing this Agreement and other agreements on behalf of the Company agree to submit to the jurisdiction of such courts and waive
trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney’s fees and costs. In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid
or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision
which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. 
  
 (f)    Specific Enforcement, Consent to Jurisdiction.    The Company and Subscriber acknowledge and agree that irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent or cure
breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof or thereof, this being in addition to any other remedy to which any of them may be entitled by law or equity. Subject to Section 11(e) hereof,
each of the Company and Subscriber hereby waives, and agrees not to assert in any such suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such court, that the suit, action or proceeding is brought in an
inconvenient forum or that the venue of the
 

 
suit, action or proceeding is improper. Nothing in this Section shall affect or limit any right to serve process in any other manner permitted by law. 
  
 (g)    Confidentiality.    The Company agrees that it will not disclose publicly or
privately the identity of the Subscriber unless expressly agreed to in writing by the Subscriber or only to the extent required by law. 
  
 (h)    Automatic Termination.    This Agreement shall automatically terminate without any further action of either party hereto if the Closing shall not have occurred by the
tenth (10th) business day following the date this Agreement is accepted by the Subscriber. 
  
 Please acknowledge
your acceptance of the foregoing Subscription Agreement by signing and returning a copy to the undersigned whereupon it shall become a binding agreement between us. 
  
 Dated:  August , 2002 
  
 
	 CALYPTE BIOMEDICAL CORPORATION
         a Delaware Corporation
 
	 
	 By:
 	 	  
 

	  	 	 Name: ANTHONY J. CATALDO
 Title: Executive Chairman
 

 
  
 AGREED TO: 
  
 
SUBSCRIBER 
  
 The undersigned, a Subscriber to the within Subscription Agreement, agrees to purchase Shares of Common Stock of Calypte Biomedical Corporation in accordance with the terms of the within Subscription Agreement at $ per share for the
sum of $            . 
  
 
                                      
                      SUBSCRIBER 
  
 AGREED TO: 
  
 CALYPTE BIOMEDICAL CORPORATION 
  
 By:                                     
                                    
             
 Executive Chairman

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