Document:

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Exhibit 10.6

                          LIMITED PARTNERSHIP AGREEMENT

                                       OF

                         LOUISIANA SHELF PARTNERS, L.P.

         THIS LIMITED  PARTNERSHIP  AGREEMENT  is entered  into  effective as of
December 31, 2002,  by and among LS GAS, LLC (the  "General  Partner") and those
persons listed as Limited Partners on Exhibit A attached hereto, as amended from
time to time after the date hereof.

         Intending to be legally bound, the parties hereto agree as follows:

                             ARTICLE I. DEFINITIONS

         Capitalized  terms used in this  Agreement  and not  defined  elsewhere
herein shall have the following meanings:

         "Act" means the Delaware  Revised Uniform Limited  Partnership  Act, as
amended from time to time.

         "Adjusted  Capital Account Deficit" means, with respect to any Partner,
the deficit balance,  if any, in such Partner's Capital Account as of the end of
the relevant fiscal year, after giving effect to the following adjustments:

                  (i)     .credit to such Capital Account any amounts which such
Partner is obligated to restore or is deemed to be obligated to restore pursuant
to the  next to last  sentences  of  Regulations  Sections  1.704-(2)(g)(1)  and
1.704-2(i)(5); and

                  (ii)  debit  to  such Capital  Account the items  described in
Sections 1.704-1 (b)(2)(ii)(d)(4), (5), and (6) of the Regulations.

         The  foregoing  definition  of  Adjusted  Capital  Account  Deficit  is
intended to comply with the  provisions of Section  1.704-1(b)(2)(ii)(d)  of the
Regulations and shall be interpreted consistently therewith.

         An  "Affiliate"   (whether  or  not   capitalized)  of,  or  a  Person,
association,  partnership or corporation  "affiliated" with, a specified Person,
association,  partnership or corporation, is a Person, association,  partnership
or corporation that directly,  or indirectly through one or more intermediaries,
controls,  is  controlled  by, or is under common  control  with,  the specified
Person, association, partnership or corporation.

         "Agreement" means this limited partnership  agreement,  as the same may
be amended from time to time.

         "Appraiser" has the meaning set forth in Section 9.3 of this Agreement.

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         "Bankruptcy"   means,   with  respect  to  any  Person,   a  "Voluntary
Bankruptcy" or an "Involuntary Bankruptcy." A "Voluntary Bankruptcy" means, with
respect to any Person,  the inability of such Person  generally to pay its debts
as such debts  become  due,  or an  admission  in writing by such  Person of its
inability to pay its debts generally or a general  assignment by such Person for
the benefit of  creditors;  the filing of any  petition or answer by such Person
seeking to  adjudicate  it a bankrupt  or  insolvent,  or seeking for itself any
liquidation, winding up, reorganization,  arrangement,  adjustment,  protection,
relief,  or  composition  of such Person or its debts under any law  relating to
bankruptcy,  insolvency  or  reorganization  or relief of  debtors,  or seeking,
consenting  to,  or  acquiescing  in the  entry of an order  for  relief  or the
appointment of a receiver,  trustee,  custodian,  or other similar  official for
such Person or for any  substantial  part of its property,  or corporate  action
taken by such  Person  to  authorize  any of the  actions  set forth  above.  An
"Involuntary  Bankruptcy" means, with respect to any Person, without the consent
or acquiescence of such Person, the entering of an order for relief or approving
a petition  for  relief or  reorganization  or any other  petition  seeking  any
reorganization,    arrangement,    composition,    readjustment,    liquidation,
dissolution,  or other  similar  relief under any present or future  bankruptcy,
insolvency or similar  statute,  law, or  regulation,  or the filing of any such
petition against such Person which petition shall not be dismissed within ninety
(90) days, or, without the consent or acquiescence of such Person,  the entering
of an order  appointing a trustee,  custodian,  receiver,  or liquidator of such
Person or of all or any  substantial  part of the  property of such Person which
order shall not be dismissed within sixty (60) days.

         "Capital  Account" means,  with respect to any Partner,  such Partner's
Capital Account determined in accordance with Section 6.6.

         "Capital  Contribution"  means, with respect to any Partner, the amount
of money contributed to the Partnership by such Partner pursuant to Section 5.2.

         "Cash Available for  Distribution"  for any fiscal year or other period
means the excess of (a) the amount of gross cash  receipts of any kind  received
by the Partnership (including from any reserves previously established which the
General Partner  determines are no longer required by the Partnership)  over (b)
the sum of (i) Operating Expenses, (ii) any reserves established or increased by
the General Partner which it deems reasonably necessary for the operation of the
Partnership,   including   reserves  for  working   capital  and  maturing  debt
obligations  and other  cash  requirements  of the  Partnership,  (iii)  amounts
received by the  Partnership as Capital  Contributions  and (iv) payments of the
principal amount of indebtedness of the Partnership.

         "Certificate   of   Limited   Partnership"   means  the   Partnership's
Certificate  of Limited  Partnership  filed with the  Secretary  of State of the
State of Delaware, as the same may be amended from time to time.

         "Class A  Interests"  has the  meaning set forth in Section 5.1 of this
Agreement.

         "Class A Limited  Partner"  has the meaning set forth in Section 5.1 of
this Agreement.

         "Class A  Preferred  Return"  means an  amount  equal to a  twenty-five
percent  (25%)  annual  return,  compounded  annually,  on each  Class A Limited
Partner's Unreturned Capital. The Class A Preferred Return shall begin to accrue
on the date a Capital  Contribution  is made and  shall  end

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when such Class A Limited  Partner's  Unreturned  Capital  has been  permanently
reduced to zero.  The Class A Preferred  Return shall be calculated  whenever an
allocation or distribution  is to be made under this Agreement,  or as otherwise
necessary;  and the  calculation  of any such  accrued  amount  shall be done by
taking   into   account  all  Capital   Contributions,   as  inflows,   and  all
distributions,  as  outflows,  with  respect  to the  Class A  Interests  and by
applying  internal  rate of return  principles to such amounts and the timing of
such payments.

         "Class B  Interests"  has the  meaning set forth in Section 5.1 of this
Agreement.

         "Class B Limited  Partner"  has the meaning set forth in Section 5.1 of
this Agreement.

         "Code"  means  the  Internal  Revenue  Code of 1986,  as  amended.  All
references  herein to Code sections  shall include  corresponding  provisions of
future federal tax statutes.

         "Depreciation"  means, for each fiscal year or other period,  an amount
equal  to the  depreciation,  amortization  or  other  cost  recovery  deduction
allowable with respect to an asset for such year or other period, except that if
the Gross Asset Value of an asset  differs from its  adjusted  basis for federal
income tax purposes at the beginning of such year or other period,  Depreciation
shall be an amount  which  bears the same ratio to such  beginning  Gross  Asset
Value as the  federal  income  tax  depreciation,  amortization  or  other  cost
recovery  deduction  for such  year or  other  period  bears  to such  beginning
adjusted  tax  basis;  provided,   however,  that  if  the  federal  income  tax
depreciation,  amortization  or other cost  recovery  deduction for such year or
other period is zero,  Depreciation  shall be determined  with reference to such
beginning Gross Asset Value using any reasonable  method selected by the General
Partner.

         "General Partner" means LS Gas, LLC

         "Gross  Asset  Value"  means,  with  respect to any asset,  the asset's
adjusted basis for federal income tax purposes, except as follows:

                  (i)     .The   initial   Gross   Asset   Value  of  any  asset
contributed by a Partner to the Partnership shall be the gross fair market value
of such asset, as agreed by the contributing Partner and the General Partner;

                  (ii)     The  Gross  Asset  Values of all  Partnership  assets
shall be  adjusted  to equal  their  respective  gross fair  market  values,  as
determined  by  the  General  Partner,  as  of  the  following  times:  (a)  the
acquisition of an additional Interest in the Partnership (other than pursuant to
the original purchase at the time of formation of the Partnership) by any new or
existing  Partner in exchange for more than a de minimis  Capital  Contribution,
(b) the  distribution  by the Partnership to a Partner of more than a de minimis
amount  of  Partnership  Property  (other  than  cash) as  consideration  for an
Interest in the Partnership;  and (c) the liquidation of the Partnership  within
the meaning of Regulations Section 1.704-1(b)(2)(ii)(g): provided, however, that
the adjustments  pursuant to clauses (a) and (b) above shall be made only if the
General Partner  reasonably  determines  that such  adjustments are necessary or
appropriate  to reflect the relative  economic  interests of the Partners in the
Partnership;

                  (iii)    The  Gross  Asset  Value  of  any  Partnership  asset
distributed to any Partner shall be the gross fair market value of such asset on
the date of distribution;

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                  (iv)     The Gross Asset Values of Partnership assets shall be
increased (or  decreased) to reflect any  adjustments  to the adjusted  basis of
such assets pursuant to Code Section 734(b) or Code Section 743(b),  but only to
the extent that such  adjustments are taken into account in determining  Capital
Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m) and Section 6.3(h)
hereof,  provided,  however,  that  Gross  Asset  Values  shall not be  adjusted
pursuant hereto to the extent the General Partner  determines that an adjustment
pursuant  hereto is necessary or  appropriate  in connection  with a transaction
that would otherwise result in an adjustment pursuant hereto; and

                  (v)     .If  the  Gross  Asset  Value  of an  asset  has  been
determined or adjusted pursuant hereto,  such Gross Asset Value shall thereafter
be adjusted by the  Depreciation  taken into  account with respect to such asset
for purposes of computing Profits and Losses.

         "Indemnitee"  has the  meaning  set forth in  Section  11.1(a)  of this
Agreement.

         "Interest" means a Partner's  economic rights and other interest in the
Partnership as a Partner as provided in this Agreement.

         "Limited  Partner"  means  any  person  named as a Limited  Partner  on
Exhibit A in his,  her or its capacity as a Limited  Partner of the  Partnership
and any other person admitted to the Partnership as a Limited Partner.

         "Majority in Interest"  means with respect to any  particular  group of
Partners, those Partners whose Percentage Interests in the aggregate are greater
than  fifty  percent  (50%)  of the  Percentage  Interests  owned  by all of the
Partners within the group.

         "Nonrecourse   Deductions"   has  the  meaning  set  forth  in  Section
1.704-2(b)(1) of the Regulations.

         "Nonrecourse   Liability"   has  the   meaning  set  forth  in  Section
1.704-2(b)(3) of the Regulations.

         "Operating  Expenses" means cash  disbursements for operating  expenses
of, and proper payments by, the Partnership,  including,  but not limited to (i)
legal  representation  relating  to the  Partnership,  (ii)  accounting  and tax
preparation,  (iii) amounts paid to satisfy the  Partnership's  obligations with
respect to working  interests in oil and gas wells held by the Partnership,  and
(iv) accrued  interest  payable in cash on the principal  amount of all loans or
other indebtedness of the Partnership.

         "Partner" means the General Partner or any Limited Partner.

         "Partner  Nonrecourse  Debt"  has the  meaning  set  forth  in  Section
1.704-2(b)(4) of the Regulations.

         "Partner  Minimum  Gain" means an amount,  with respect to each Partner
Nonrecourse  Debt,  equal to the  Partnership  Minimum Gain that would result if
such  Partner  Nonrecourse  Debt  were  treated  as  a  Nonrecourse   Liability,
determined in accordance with Section 1.704-2(i)(3) of the Regulations.

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         "Partner Nonrecourse  Deductions" has the meaning set forth in Sections
1.704-2(i)(1) and 1.704-2(i)(2) of the Regulations.

         "Partnership" means Louisiana Shelf Partners,  L.P., a Delaware limited
partnership.

         "Partnership  Minimum  Gain"  has the  meaning  set  forth in  Sections
1.704-2(b)(2) and 1.704-2(d) of the Regulations.

         "Partnership  Property"  means  all  properties  and  assets  which the
Partnership may own or have an interest in from time to time.

         "Percentage  Interest"  means the Interest of a Partner  expressed as a
percentage.  The Percentage Interest of each Partner as of the date hereof is as
set forth on Exhibit A, including as it may be amended from time to time.

         "Person"  means  any  individual,  corporation,   partnership,  limited
liability  company,  joint venture,  association,  joint-stock  company,  trust,
non-incorporated   organization   or  government  or  any  agency  or  political
subdivision thereof.

         "Profit or Profits" and "Loss or Losses" means, for each fiscal year or
other period,  an amount equal to the  Partnership's  taxable income or loss for
such  year  or  period,  as  determined  by the  Partnership's  accountants,  in
accordance  with Code  ss.703(a) (for this purpose,  all items of income,  gain,
loss or deduction  required to be stated separately  pursuant to ss.703(a)(1) of
the Code shall be included in Profits or Losses),  with the adjustments required
to comply with the capital  account  maintenance  rules of Treasury  Regulations
ss.1.704-1(b)(2)(iv) and the following adjustments:

                  (i)     .Any  income of the  Partnership  that is exempt  from
federal income tax and not otherwise taken into account in computing Profits and
Losses shall be added back;

                  (ii)     Any  expenditures  of the  Partnership  described  in
ss.705(a)(2)(B) of the Code or treated as ss.705(a)(2)(B)  expenditures pursuant
to Treasury  Regulations  ss.1.704(b)(2)(iv)(i),  and not  otherwise  taken into
account in computing  Profits or Losses,  shall be subtracted  from such taxable
income or loss;

                  (iii)    If the Gross Asset Value of any Partnership  asset is
adjusted  pursuant to this  Agreement,  the amount of such  adjustment  shall be
taken into account in the taxable year as gain or loss from the  disposition  of
such asset for purposes of computing Profits or Losses;

                  (iv)     Gain  or  loss  resulting  from  any  disposition  of
Partnership  Property  with  respect  to which  gain or loss is  recognized  for
federal  income tax  purposes  shall be computed by reference to the Gross Asset
Value of the Partnership Property disposed of, notwithstanding that the adjusted
tax basis of such Property differs from its Gross Asset Value; and

                  (v)      In lieu of the  depreciation,  amortization and other
cost recovery  deductions taken into account in computing such taxable income or
loss,  there shall be taken into  account  Depreciation  for such fiscal year or
other period, computed in accordance with this Agreement.

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         "Regulations" means the regulations  promulgated under the Code, as the
same may be amended or supplemented from time to time.

         "Regulatory  Allocations"  has the meaning set forth in Section 1(h) of
Exhibit B of this Agreement.

         "Service" has the meaning set forth in Section 10.6 of this Agreement.

         "Term" has the meaning set forth in Article IV of this Agreement.

         "Transfer," with respect to any Interest in the Partnership,  means any
sale, bequest,  assignment,  pledge,  encumbrance or gift thereof, or attempt to
deliver a security interest therein, but shall not include a voluntary pledge or
assignment  pursuant to a written  agreement  by a Partner of only the rights to
recover  proceeds as distributed by the Partnership with respect to any Interest
nor shall include a collateral  assignment of one Partner's  Interest to another
Partner.

         "Unreturned  Capital"  with respect to any Partner  means all cash paid
toward such Partner's  Capital  Contribution,  reduced by distributions  made to
such Partner pursuant to Section 6.1(a)(ii) and 6.1(a)(iii).

         "Valuation  Date" has the meaning  set forth in Section  9.3(a) of this
Agreement.

                            ARTICLE II. ORGANIZATION

         2.1 Name.  The name of the  Partnership is "Louisiana  Shelf  Partners,
L.P."

         2.2  Place  of  Business.  The  principal  place  of  business  of  the
Partnership  shall be at such place as  determined by the General  Partner.  The
Partnership  may establish  additional  places of business within or without the
State of Delaware as and when required by the business of the Partnership.

         2.3 Registered  Office. The registered office for the Partnership shall
be located at such place as may be designated by the General Partner.

                              ARTICLE III. PURPOSE

         3.1  Purpose.  The  purpose for which the  Partnership  is formed is to
engage in oil and gas exploration  activities on various  properties  located in
Cameron Parish, Louisiana. In addition, the Partnership may engage in any lawful
activity for which limited  partnerships  may be organized under the laws of the
State of Delaware and otherwise in accordance with the terms of this Agreement.

         3.2 Powers of Partnership.  The  Partnership  shall have all the powers
permitted  by law which are  necessary or desirable in carrying out the purposes
and business of the Partnership, including, but not limited to, the following:

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            (a)  Transact   business  in  any  state  or  nation  in  which  the
Partnership   may  lawfully   act,  for  itself  or  as   principal,   agent  or
representative for any Person, respecting the business of the Partnership;

            (b) Enter into, make,  perform and carry out, or cancel and rescind,
contracts  and  other  obligations  for any  lawful  purpose  pertaining  to the
business of the Partnership;

            (c) Apply for,  register,  obtain,  purchase  or  otherwise  acquire
trademarks,  trade names, labels and designs relating to or useful in connection
with any business of the Partnership,  and to use, exercise, develop and license
the use of the same;

            (d) Employ on behalf of the Partnership  legal counsel,  accountants
and other professional advisors with respect to any business of the Partnership;

            (e) Compromise,  submit to arbitration, sue on, and defend claims in
favor of or against the Partnership; and

            (f)  Exercise  all of the  general  rights,  privileges  and  powers
permitted  by the  provisions  of the Act,  as adopted or  hereafter  amended or
supplemented.

                                ARTICLE IV. TERM

         The  Partnership  shall  continue  in  perpetuity  from the date hereof
unless dissolved sooner pursuant to Article X of this Agreement (the "Term").

           ARTICLE V. CONTRIBUTIONS TO CAPITAL AND STATUS OF PARTNERS

         5.1  Interests.  The  Partnership  shall  have two  classes  of Limited
Partnership  Interests,  Class A  interests  ("Class A  Interests")  and Class B
Interests  ("Class B  Interests").  Each  Person  owning a Class A  Interest  is
hereafter  referred to as a "Class A Limited  Partner" and each Person  owning a
Class B Interest is hereinafter referred to as a "Class B Limited Partner."

         5.2 Capital Contributions.

            (a)  General  Partner.  The  General  Partner  has  made  a  capital
contribution  to the  Partnership  in the  amount set forth on Exhibit A to this
Agreement.

            (b) Limited  Partners.  Each Limited  Partner  shall make an initial
Capital  Contribution,  as described in Exhibit A to this  Agreement.  The name,
mailing address,  taxpayer  identification number, initial Capital Contribution,
Percentage Interest of each Partner is set forth in Exhibit A.

            (c) Additional Capital Contributions.

                  (i) The Partners  shall be  obligated  to make all  additional
contributions to the capital of the Partnership,  for whatever  purpose,  in any
amounts requested by the General Partner,  provided that, solely with respect to
any Capital Calls made for the purpose of paying administrative  expenses of the
Partnership,  the  General  Partner  shall  only be  permitted  to  request

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two additional contributions to the capital of the Partnership per calendar year
in the aggregate  amount of $300,000.  The General Partner shall deliver written
notice  requesting any additional  Capital  Contribution  to the  Partnership (a
"Capital Call") to each Limited Partner. Each Limited Partner shall be obligated
to satisfy its pro rata portion of any Capital Call within fifteen (15) business
days of receiving such written request.

                  (ii) In the event any Class A Limited  Partner  fails to honor
all or any  portion  of a Capital  Call made in  accordance  with the  preceding
Subsection,  the General  Partner may take action to enforce such the obligation
of such Class A Limited Partner (the  "Delinquent  Limited  Partner") to satisfy
the Capital Call, including but not limited to converting the Delinquent Limited
Partner's  Class A Interests into Class B Interests and permitting the remaining
Class A Limited Partners to fund the unfunded portion of the Delinquent  Limited
Partner's aggregate Capital Call as follows:

                        (A) The General Partner shall notify the remaining Class
A Limited  Partners in writing of the amount of the  unfunded  Capital  Call and
offer them the opportunity to fund the unfunded Capital Call;

                        (B) The remaining Class A Limited  Partners shall have a
period  of  fifteen  (15)  days  within  which to  accept  the offer to fund the
unfunded  Capital Call. Such acceptance shall be made by written notice given to
the  Partnership,  which  notice  shall set forth the  portion  of the  unfunded
Capital Call that each remaining Class A Limited Partner is willing to purchase.
Each  remaining  Class A Limited  Partner  shall be entitled to purchase its pro
rata share (based on the total Percentage  Interest held by such Class A Limited
Partner and by all remaining Class A Limited  Partners) of the unfunded  Capital
Call.  Should any of the  remaining  Class A Limited  Partners  desire to fund a
portion of the unfunded Capital Call in excess of its pro rata share, and should
any  portion of the  Capital  Call  remain  unfunded  after  allocation  to each
electing Class A Limited Partner of the lesser of (i) the unfunded  Capital Call
that it has elected to fund or (ii) its pro rata share of the  unfunded  Capital
Call, then, unless electing  remaining Class A Limited Partners desiring to fund
such unfunded Capital Call shall agree upon some other basis for allocation, any
such  unfunded  Capital Call shall be  allocated  to  remaining  Class A Limited
Partners  desiring to fund it, pro rata based on the  unfunded  Capital  Call in
excess of their  respective  pro rata shares  thereof which each such  Remaining
Class A Limited  Partner  indicated in writing a desire to  purchase,  until the
entire  unfunded  Capital Call has been funded or all remaining  Class A Limited
Partners  have funded all of the  unfunded  Capital  Call which they  elected to
fund.

                        (C) In the  event  that the  remaining  Class A  Limited
Partners  shall  fail to accept the offer  pursuant  to the  previous  paragraph
within the time period set forth above as to the entire  unfunded  Capital Call,
then the General  Partner  shall be required to fund up to $300,000  towards the
satisfaction  of such  unfunded  Capital  Call and shall have the option to fund
such additional amounts as it elects.

                        (D) The  remaining  Class  A  Limited  Partners  and the
General  Partner,  if  necessary,  shall fund the  unfunded  Capital Call within
thirty (30) days of the date on which the written notice of the unfunded Capital
Call is first sent to the remaining Class A Limited Partners.

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                        (E) Any Interests converted into Class B Interests shall
continue  to be treated as Class A Interests  for  purposes of Article VI to the
extent  necessary  to give such  Interests  the benefit of the Class A Preferred
Return and allocated  Profits up to the date of such conversion.  Thus,  accrued
Class A Preferred Return and Profits allocable  pursuant to Section 6.2(d) which
have been earned as Profits,  and have been allocated,  but not yet distributed,
at the time of conversion  shall be distributed at the appropriate time as if no
conversion took place; and Class A Preferred  Return which has accrued,  but has
not been earned and  allocated,  at the time of  conversion,  shall be allocated
when earned,  and shall be distributed,  as if no conversion  took place.  Other
allocations, including those of Losses, shall be adjusted in accordance with the
principles of this Section  5.2(c).  If the Unreturned  Capital of the converted
interest  is a positive  number at the time of  conversion,  such  amount  shall
become the  Unreturned  Capital  attributable  to the Class B Interests.  If the
Capital  Account  balance of the converted  interest is less than its Unreturned
Capital at the time of conversion as a result of allocations of Losses  pursuant
to Section  6.3(d) which have not been  restored by  subsequent  allocations  of
Profits (but not if such  reduction is due to  distributions),  then the Class B
Interests shall be entitled to allocations of Profits pursuant to Section 6.2(b)
on the same  terms as if such  Losses  had been  allocated  pursuant  to Section
6.3(c).  Except as necessary to give the converted Interest the benefit of being
a Class A Interest  prior to  conversion  as  described  above,  the  Percentage
Interest of any Class B Interest shall be zero.  The Percentage  Interest of the
converted  Interest  shall be allocated  among the Class A Partners (and General
Partner, as applicable) making additional Capital  Contributions,  in proportion
thereto, which fulfill part or all of the unfunded Capital Call of the converted
Interest. The General Partner shall amend Schedule A to reflect such changes.

                  (iii) The  General  Partner may in its sole  discretion  elect
instead to avail the  Partnership  of any other  remedies  provided to it by the
Act.  Notwithstanding the foregoing, no Capital Call or other obligation to make
an additional  contribution  may be enforced by a creditor of the Partnership or
other Person other than the  Partnership  unless the General  Partner  expressly
consents to such  enforcement  or to the  assignment  of the  obligation to such
creditor.

            (d) Withdrawal of Capital  Contributions.  No Partner shall have the
right to  withdraw  or  reduce  its  Capital  Contribution,  or to  receive  any
distributions  from the Partnership,  except as otherwise  provided  herein.  No
Partner shall have the right to demand or receive any Partnership Property other
than cash from the  Partnership.  No interest or royalties  shall be paid to any
Partner on its Capital  Contribution.  No Partner  shall have  priority over any
other  Partner,  either as to the return of its  Capital  Contribution  or as to
Profits,  Losses or  distributions,  except as may be specifically  set forth in
this Agreement.

         5.3 Additional  Limited  Partners.  Additional  Limited Partners may be
admitted  to the  Partnership  with the  consent of the  General  Partner  and a
Majority  in  Interest  of the Class A Limited  Partners.  Any  dilution  of the
Percentage  Interest resulting from the admission of additional Limited Partners
shall be borne by all  Partners  pro rata in  accordance  with their  Percentage
Interests.

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 ARTICLE VI. DISTRIBUTIONS; ALLOCATION OF PROFITS AND LOSSES; CAPITAL ACCOUNTS.

         6.1 Cash Available for Distribution.

            (a) Distributions Prior to Liquidation. Except as otherwise provided
in Section 6.7 or in Article IX hereof, Cash Available for Distribution, if any,
shall  be  distributed  among  the  Partners  annually  (or more  frequently  as
determined  by the  General  Partner),  in  arrears no later than the end of the
first calendar quarter  following the year in question in such aggregate amounts
as the General Partner may determine.  Cash Available for Distribution,  if any,
shall be distributed among the Partners in the following order of priority:

                  (i) First, to the Class A Limited Partners, an amount equal to
the  accrued  but  unpaid  Class  A  Preferred  Return  as of  the  date  of the
distribution, distributed to each Class A Limited Partner pro rata in proportion
to the amount of each Class A Limited  Partner's Unpaid Class A Preferred Return
as of that date;

                  (ii)  Second,  to the General  Partner and the Class A Limited
Partners in proportion to their respective  Unreturned Capital as of the date of
the distribution,  until the General Partner's Unreturned Capital and each Class
A Limited Partner's Unreturned Capital has been reduced to zero;

                  (iii) Third, to the Class B Limited  Partners in proportion to
their  respective  Unreturned  Capital,  until  each  Class B Limited  Partner's
Unreturned Capital has been reduced to zero; and

                  (iv) Thereafter,  40% to the General  Partner,  and 60% to the
Class A  Limited  Partners  pro  rata in  proportion  to  each  Class A  Limited
Partner's Percentage Interest.

Notwithstanding the foregoing,  the General Partner may in its sole and absolute
discretion and at any time make a distribution  to the Class A Limited  Partners
and/or Class B Limited  Partners in  proportion to their  respective  Unreturned
Capital  balances.  Section  6.1(a)  shall be applied  taking  into  account the
provisions of Section 5.2(c) with respect to converted Interests.

            (b) Liquidating  Distributions.  Distributions in liquidation of the
Partnership and redemption of Interests shall be made in accordance with Capital
Accounts,  determined  after  taking  into  account all  allocations  under this
Article VI, including Profits or Losses with respect to property  distributed in
kind.

         6.2  Allocation  of  Profits.  After  giving  effect to the  Regulatory
Allocations  set  forth  in  Exhibit  B of this  Agreement  and  subject  to the
provisions of Section 5.2(c), Profits for any fiscal year or other period of the
Partnership  will be  credited to the  Capital  Accounts of the  Partners in the
following order of priority:

            (a) First, to the Partners,  in an amount  sufficient to reverse the
cumulative amount of any Losses allocated to the Partners in the current and all
prior fiscal years,  first  pursuant to the proviso after Section 6.3(d) of this
Agreement, and second pursuant to Section

                                       10
<PAGE>

6.3(d)  of  this  Agreement,  allocated  to each  Partner  in the  order  and in
proportion to the allocation of such Losses to such Partner;

            (b) Second,  to the Class B Limited  Partners,  until the cumulative
amount  allocated  pursuant to this Section 6.2(b) for the current and all prior
fiscal years is equal to the cumulative amount of any Losses allocated  pursuant
to Section 6.3(c) of this Agreement in the current and all prior fiscal years to
each Class B Limited Partner,  pro rata in proportion to the Losses allocated to
each such Class B Limited Partner;

            (c) Third,  to the Class A Limited  Partners,  until the  cumulative
amount  allocated  pursuant to this Section 6.2(c) for the current and all prior
fiscal years is equal to the cumulative Class A Preferred Return for all Class A
Limited  Partners in the current and all prior fiscal years plus the  cumulative
amount of any Losses  allocated  pursuant to Section 6.3(b) of this Agreement in
the current and all prior fiscal years (which Losses reverse  Profits  allocated
under this Section 6.2(c)) allocated to each Class A Limited Partner pro rata in
proportion to each Class A Limited Partner's Class A Preferred Return; and

            (d)  Thereafter,  40% to the General  Partner and 60% to the Class A
Limited  Partners  pro rata in  proportion  to each  Class A  Limited  Partner's
Percentage Interest.

         6.3  Allocation  of  Losses.  After  giving  effect  to the  Regulatory
Allocations  set  forth  in  Exhibit  B of this  Agreement  and  subject  to the
provisions of Section 5.2(c), Losses for any fiscal year or other period will be
charged to the  Capital  Accounts  of the  Partners  in the  following  order of
priority:

            (a) First, 40% to the General Partner and 60% to the Class A Limited
Partners pro rata in  proportion  to each Class A Limited  Partner's  Percentage
Interest in an amount  sufficient to reverse,  on a cumulative basis, the amount
of Profits  allocated  under Section 6.2(d) of this Agreement in the current and
all prior fiscal years;

            (b) Second,  to the Class A Limited Partners in an amount sufficient
to reverse, on a cumulative basis, the amount of Profits allocated under Section
6.2(c) of this Agreement in the current and all prior fiscal years;

            (c) Third,  to the Class B Limited  Partners in  proportion to their
respective  Unreturned Capital,  until each Class B Limited Partner's Unreturned
Capital is reduced to zero; and

            (d)  Fourth,  among  the  General  Partner  and the  Class A Limited
Partners pro rata in proportion to each Partner's Percentage Interest;

provided, however, that Losses that otherwise would be allocated to the Partners
in accordance with their respective Percentage Interest will not be allocated to
any Partner if such  Losses  would  result in or  increase  an Adjusted  Capital
Account  Deficit  with  respect to such  Partner  and any Losses  that cannot be
allocated to any Partner as a result of this proviso shall be allocated first to
the  Capital  Accounts  of the other  Partners  in  proportion  to the  positive
balances in their  respective  Capital  Accounts until all such Capital Accounts
are reduced to zero, and then one hundred percent (100%) to the General Partner.

                                       11
<PAGE>

         6.4 Special Tax Allocations;  Other Allocation  Rules; Tax Allocations:
Code Section 704(c).  Special tax  allocations,  other  allocation rules and tax
allocations  relating  to Code  Section  704(c)  are as set  forth on  Exhibit B
attached hereto and made a part hereof.

         6.5 Allocations in the Event of Transfer.

            (a)  If  all  or  any  portion  of an  Interest  is  transferred  in
accordance  with Article VIII hereof  during any fiscal year,  Profits,  Losses,
each item  thereof and all other items  attributable  to such  Interest for such
period shall be divided and allocated  between the transferor and transferee pro
rata in proportion to the number of days each Person owned such Interest  during
the period,  unless the General Partner elects to provide for an interim closing
of the Partnership's books.

            (b) Solely for purposes of allocating Profits,  Losses and each item
thereof  as set  forth in  Sections  6.2  through  6.4,  the  Partnership  shall
recognize  the Transfer of such  Interest not later than the end of the calendar
month during  which it receives  written  notice of such  Transfer and the other
requirements  of  Article  VIII  hereof  are  satisfied,  provided  that  if the
Partnership does not receive a written notice stating the date such Interest was
transferred  and such other  information  as the General  Partner may reasonably
require  within thirty (30) days after the end of the calendar year during which
the  Transfer  occurs,  then  all of such  items  shall  be  allocated,  and all
distributions  shall be made,  to the  Person  who,  according  to the books and
records of the  Partnership,  on the last day of the  accounting  period  during
which the Transfer  occurs,  was the owner of the Interest.  The General Partner
and the  Partnership  shall  incur  no  liability  for  making  allocations  and
distributions  in accordance with the provisions of this Section 6.5, whether or
not the General  Partner or the  Partnership  has  knowledge  of any Transfer of
ownership of any Interest.

         6.6 Capital Accounts.

            (a) A Capital  Account  shall be maintained  for each  Partner.  The
provisions of this Agreement relating to the maintenance of Capital Accounts are
intended to comply with the Regulations  promulgated under Section 704(b) of the
Code.  The Capital  Account of each  Partner  shall be increased by (a) the cash
amounts of such Partner's Capital Contribution, (b) the Gross Asset Value of any
property or services  contributed to the Partnership by the Partner as agreed to
by the contributing Partner and the Partnership,  less any indebtedness to which
such  property is subject or which is assumed by the  Partnership  in connection
with the contribution (except that any amount by which such indebtedness exceeds
such  Gross  Asset  Value of the  property  shall be  treated  as a debit to the
Partner's  Capital  Account),  and (c) such  Partner's  share of Profits and any
items in the nature of income and gain  specially  allocated to it, and shall be
decreased by (y) the amount of cash and the Gross Asset Value of other  property
actually distributed to such Partner by the Partnership less any indebtedness to
which such  property is subject or which is assumed by the Partner in connection
with the distribution (except that any amount by which such indebtedness exceeds
such  Gross  Asset  Value of the  property  shall be  treated as a credit to the
Partner's Capital Account), and (z) such Partner's share of Losses.

                                       12
<PAGE>

            (b) In the  event a  Partner  Transfers  all or any  portion  of its
Interest in accordance  with the  provisions of this  Agreement,  the transferee
shall succeed to the individual  Capital Account of the transferor to the extent
such Capital Account relates to the transferred Interest.

            (c)  It  is  the  intent  of  this  Agreement  that  each  Partner's
allocations and distributions shall be made in accordance with Section 704(b) of
the Code.  If the  Partnership  is advised by legal  counsel  that any matter or
matters  contained in this  Agreement  are unlikely to be effective  for federal
income tax purposes,  the General  Partner is hereby  granted the power to amend
the allocation and/or distribution  provisions of this Agreement,  on the advice
of legal counsel to the  Partnership,  to the minimum extent necessary to effect
the allocation of Profits and Losses herein.

            (d) No  Partner  shall  be  required  at any  time to make  any cash
contribution  to the Partnership by reason of any deficit balance in its Capital
Account,  and no such deficit  balance  shall  increase or otherwise  affect the
liability of a Partner to third parties

         6.7 Tax Distributions.  Prior to any distributions  pursuant to Section
6.1 hereof (or otherwise),  the Partnership  shall distribute Cash Available for
Distribution  to the  Partners in such amounts as the General  Partner,  in good
faith, estimates (the "Estimated Tax Liability") to be sufficient to permit each
Partner to pay all  federal,  state,  and local  income taxes which each Partner
will incur as a result of the required inclusion of each Partner's proportionate
share of the Profits of the Partnership in determining  each Partner's  federal,
state, and local tax liability, provided that such distribution shall be made no
later than 10 days  before a  quarterly  estimated  tax  payment is due and such
amount  shall be  confirmed  by the  General  Partner as soon  thereafter  as is
reasonably  practicable  provided,  however, that the highest rate applicable to
any Partner shall be applied to all Partners, including tax exempt Partners. Any
distribution  made under this Section 6.7 shall be applied  against such amounts
such Partner is entitled to receive pursuant to Section 6.1 hereof.  The General
Partner  shall  not be  required  to make the  distributions  described  in this
Section 6.7 (in respect of such taxes at such times or in such  amounts) if such
distributions  will cause a default under the  obligations to the Senior Secured
Lender.

    ARTICLE VII. MANAGEMENT; RIGHTS, POWERS, AND OBLIGATIONS OF THE PARTNERS

         7.1 Management of the Partnership.  Subject to Section 7.2 hereof,  the
management and control of the Partnership and its business and affairs,  and the
exercise of the powers of the Partnership described in Section 3.2 hereof, shall
be vested in the General Partner.

         7.2 Certain  Limitations of the General Partner.  Without obtaining the
affirmative  vote of a Majority  in  Interest  of the Class A Limited  Partners,
voting as a separate  class,  the General  Partner shall not do or permit any of
the following acts on behalf of the Partnership  unless  otherwise  specifically
stated herein:

                  (i) Act in contravention of this Agreement;

                  (ii)  Except as  provided in Article X, do any act which would
make it impossible to carry on the ordinary business of the Partnership;

                                       13
<PAGE>

                  (iii) Confess a judgment against the Partnership; or

                  (iv) Sell or dispose of all or substantially all of the assets
of the  Partnership  Property  in a  transaction  outside  of the  Partnership's
ordinary course of business.

         7.3 Meetings of the Partners.

            (a) Meetings of Partners.  Except as otherwise specifically provided
in this  Agreement,  meetings  of the  Partners  may be  called  by the  General
Partner, by written notice to the Partners given not less than ten (10) nor more
than sixty (60) days prior to the date of such meeting.  Meetings  shall be held
at such place  within or without the State of Delaware as is  designated  in the
notice of the meeting.

            (b) Quorum.  Except as provided in other  sections of this Agreement
where less than all of the Partners are entitled to vote, the Partners necessary
to  approve  any  action to be taken at such  meeting  must be  present  for the
conduct of business at any meeting of the Partners.

            (c) Written Consent. Any action of the Partners may be taken without
a meeting if the  Partners  required to approve such action  consent  thereto in
writing.

            (d) Meeting by Telephone. The meeting of the Partners may be held by
telephone conference or similar communications equipment.

            (e) Proxies.  A Partner may authorize one or more Persons to act for
such  Partner by proxy,  provided the proxy is signed by such  Partner.  A proxy
shall not be valid after the expiration of one (1) year from its date.

            (f) Waiver of Notice.  Any notice  required under this Agreement for
the  holding of  meetings  of the  Partners  may be waived by any  Partner by an
instrument in writing  signed by such Partner either before or after the meeting
to which such waiver relates.

         7.4 Voting by the Partners.  Unless otherwise stated in this Agreement,
an affirmative vote of a Majority in Interest of the Limited Partners, voting as
a class,  shall be required to adopt any matter subject to a vote of the Limited
Partners.

         7.5  Independent  Activities.  Subject to any other agreement among the
parties,  Partners and Affiliates of Partners may, notwithstanding the existence
of this Agreement,  engage in whatever  activities they choose without having or
incurring  any  obligation  to offer  any  interest  in such  activities  to the
Partnership  or any  Partner,  and  neither  this  Agreement  nor  any  activity
undertaken  pursuant  hereto shall  prevent the  Partners or any  Affiliate of a
Partner from engaging in any activity,  or require the Partners or any Affiliate
of a Partner to permit the Partnership or any Partner to participate therein.

         7.6  Execution  of  Agreements  and   Instruments.   Any  agreement  or
instrument may be executed on behalf of the  Partnership by the General  Partner
or as otherwise authorized by the General Partner.

                                       14
<PAGE>

         7.7 Holding of Assets. All Partnership Property, whether real, personal
or mixed, owned by the Partnership shall be held in the name of the Partnership.

         7.8 Fees and  Expenses.  To the extent  expenses  have been incurred in
connection  with  the  Partnership  prior  to the  date of this  Agreement,  the
Partnership  shall pay such expenses or shall  reimburse the General  Partner or
any other Person as appropriate  for such expenses if already paid. In addition,
to the  extent  that  the  General  Partner  incurs  any fees  and  expenses  in
connection  with the  performance  of its powers and duties as General  Partner,
through the provision of administrative services to the Partnership or otherwise
on behalf of the  Partnership,  the  Partnership  shall  reimburse  the  General
Partner in accordance with its normal expense reimbursement procedures.

             ARTICLE VIII. TRANSFER OF INTERESTS IN THE PARTNERSHIP

         8.1 Prohibited  Transfers.  Neither the General  Partner nor any of the
Limited Partners may sell, assign,  transfer or otherwise dispose of, or pledge,
hypothecate  or  transfer  or in any  manner  encumber,  his or its  Partnership
Interest or any part thereof  except as permitted in this Article VIII,  and any
act in violation of this Article VIII shall not be binding upon or recognized by
the  Partnership  regardless of whether the General Partner shall have knowledge
thereof.

         8.2 Limited Partners.

            (a) The General  Partner may (1) pursuant to this Section 8.2, admit
as a substituted  Limited Partner any successor in interest to a Limited Partner
either deceased or under legal disability,  and (2) pursuant to this Section 8.2
admit as substituted Limited Partners assignees of Limited Partners:

                  (i) A substituted  Limited Partner is a person admitted to all
the rights of a Limited Partner;

                  (ii) An  assignee  is a person to whom a Limited  Partner  has
assigned his Interest in the  Partnership  but who has not become a  substituted
Limited  Partner.  An assignee shall have no right to require any information or
accounting of the  Partnership's  transactions  or to inspect the  Partnership's
books but shall only be entitled to receive the share of the  distributions  and
allocations  to which his assignor  would  otherwise be entitled as set forth in
Article VI.

            (b) No assignee  of the whole or any portion of a Limited  Partner's
Interest shall have the right to become a substituted  Limited  Partner in place
of his assignor or have any other rights of a Limited Partner  hereunder  unless
all of the following conditions are satisfied:

                  (i)  The  written  consent  of the  General  Partner  to  such
substitution  shall  be  obtained,  which  consent  shall  not  be  unreasonably
withheld;

                  (ii) A duly executed and  acknowledged  written  instrument of
assignment has been filed with the Partnership which sets forth the intention of
the  assignor  that the assignee  become a  substituted  Limited  Partner in his
place;

                                       15
<PAGE>

                  (iii) The assignor and assignee  execute and acknowledge  such
other  instruments  as the General  Partner may deem  necessary  or desirable to
effect such admission,  including,  without  limitation,  an opinion of counsel,
acceptable  to the General  Partner,  to the effect that the  assignment  of the
interest will not violate the applicable provision of the Securities Act of 1933
and any applicable state securities laws, the written acceptance and adoption by
the  assignee  of  the   provisions  of  this   Agreement  and  his   execution,
acknowledgment,  and delivery to the General Partner of a Power of Attorney, the
form and content of which are more fully described in Section 13.16 hereof; and

            (c) Any person admitted to the Partnership as a Substituted  Limited
Partner  shall be  subject  to all of the  provisions  of this  Agreement  as if
originally a party to it.

            (d)  Subject  to  the  provisions  of  subparagraph  8.3(j)  hereof,
compliance with the suitability standards imposed by the Partnership, applicable
"blue  sky" laws,  if any,  and the rules of any other  applicable  governmental
authority and subject to the written consent of the General Partner (except that
assignments to heirs and personal  representatives  may be made without  consent
upon the death of a Limited Partner),  a Limited Partner shall have the right to
assign all or a portion of his  Interest by a written  assignment,  the terms of
which are not in contravention of any of the provisions of this Agreement, which
assignment  has  been  duly  executed  by  the  assignor  and  received  by  the
Partnership and recorded on the books thereof.  Any assignment in  contravention
of any of the  provisions  of this  Subsection  8.3(d)  shall be of no force and
effect and shall not be  binding  upon or  recognized  by the  Partnership.  THE
INTERESTS  EVIDENCED  BY THIS  AGREEMENT  HAVE NOT  BEEN  REGISTERED  UNDER  THE
SECURITIES  ACT OF 1933, AS AMENDED,  OR THE SECURITIES  LAWS OF ANY STATE.  THE
INTERESTS  ACQUIRED BY LIMITED  PARTNERS  MAY NOT BE SOLD OR OFFERED FOR SALE IN
THE ABSENCE OF AN EFFECTIVE  REGISTRATION  STATEMENT FOR THE INTERESTS UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND SUCH STATE LAWS AS MAY BE APPLICABLE, OR
AN OPINION OF COUNSEL  SATISFACTORY TO THE PARTNERSHIP THAT SUCH REGISTRATION IS
NOT REQUIRED.

                  (i)  Except as  provided  in  Subsections  8.3(h),  8.3(i) and
8.3(j), an assignee of an Interest shall be entitled to receive distributions of
cash or  other  property  from  the  Partnership  attributable  to the  Interest
acquired by reasons of such  assignment from and after the effective date of the
assignment  of an Interest to him. The  "effective  date" of an assignment of an
Interest  shall be the  last day of the  calendar  month  in which  the  written
instrument  of  assignment,  in form and substance  satisfactory  to the General
Partner, is received and approved by the General Partner.

                  (ii)    Anything    contained    herein   to   the    contrary
notwithstanding,  both the Partnership and the General Partner shall be entitled
to treat the assignor of a Partnership Interest as the absolute owner thereof in
all respects,  and shall incur no liability for  distributions  of cash or other
property  made in good faith to him until such times as the  written  assignment
has  been  received  by,  and  recorded  on the  books  of the  Partnership,  in
accordance with the provisions of Subsection 8.3(d)(i).

                                       16
<PAGE>

            (e) The General  Partner may elect to treat an assignee  who has not
become a substituted  Limited  Partner as a substituted  Limited  Partner in the
place of his assignor, should it deem, in its sole and absolute discretion, that
such  treatment  be in the  best  interest  of the  Partnership  for  any of its
purposes or for any of the purposes of this Agreement.

            (f) No consent of any of the  Limited  Partners is required to elect
the substitution of a Limited Partner, except that a Limited Partner who assigns
his Interest  shall,  in order for the assignee to be admitted as a  substituted
Limited  Partner,  evidence  his  intention  that the  assignee be admitted as a
substituted  Limited  Partner in his place and must execute such  instruments as
the General Partner shall, in its sole and absolute discretion,  determine to be
necessary or desirable in connection therewith.

            (g) The General  Partner  shall be required to amend this  Agreement
only quarterly but may, in its sole and absolute discretion, within a reasonable
time after the date of their written consent to the  substitution of an assignee
as a substituted  Limited Partner,  amend this Agreement to reflect the addition
of said assignee as a Limited Partner.  Neither copies of this Agreement nor any
amendment  thereto  need be  delivered  to any of the Limited  Partners and such
requirement in any statute is hereby waived.  However, upon request, the General
Partner will promptly  thereafter  furnish the requesting Limited Partner with a
copy of this Agreement and any amendments thereto as of the date of request.

            (h) Upon the death or legal  incompetency  of an individual  Limited
Partner,  his personal  representative shall have all of the rights of a Limited
Partner for the purpose of settling or the managing  his estate,  and such power
as the  decedent or  incompetent  possessed  to  constitute  a  successor  as an
assignee of his Interest in the  Partnership  and to join with such  assignee in
making  application to substitute such assignee as a Limited  Partner.  However,
such  personal  representative  shall not have the right to become a substituted
Limited  Partner  in the  place  of  his  predecessor  in  interest  unless  the
conditions of this Article VIII are first satisfied  (except with respect to the
requirement that the assignor execute and acknowledge instruments).

            (i) Upon the Bankruptcy,  dissolution or other cessation to exist as
a  legal  entity  of a  General  or  Limited  Partner,  not an  individual,  the
authorized  representative  of such  entity  shall  have all of the  rights of a
Limited  Partner for the  purpose of  effecting  the orderly  winding up and the
disposition  of the  business  of such  entity  and such  power  as such  entity
possessed  to  constitute  a successor  as an  assignee  of its  interest in the
Partnership  and to join with such assignee in making  application to substitute
such assignee as a Limited Partner.  However, such personal representative shall
not have the right to become a substituted  Limited  Partner in the place of his
predecessor  in  interest  unless the  conditions  of this  paragraph  are first
satisfied  (except with respect to the requirement that the assignor execute and
acknowledge instruments).

            (j) No assignment or transfer of an interest in the  Partnership may
be made which would result in the termination of the  Partnership  under Section
708 of the Code,  unless the General Partner  determines  that such  termination
will not have a material adverse effect on the Partnership or the Partners, or a
Majority  in  Interest  of  the  Class  A  Limited  Partners  consents  to  such
transaction.

                                       17
<PAGE>

           ARTICLE IX. DISSOLUTION AND WINDING UP OF THE PARTNERSHIP

         9.1 Dissolution of the Partnership.  The Partnership shall be dissolved
upon the first to occur of any of the following events:

            (a) An order by a court of competent  jurisdiction  decrees that the
Partnership be dissolved;

            (b) The  determination  of the  General  Partners  and a Majority in
Interest of the Class A Limited Partners to dissolve;

            (c) The sale or other disposition of all or substantially all of the
assets of the Partnership; or

            (d) The dissolution of the last General Partner,  provided that, the
Partnership  shall not be dissolved  if, within ninety (90) days of such date, a
Majority  in  Interest  of the Class A Limited  Partners  appoints a new General
Partner.

         9.2  Winding  Up  of  the  Partnership.   Upon  a  dissolution  of  the
Partnership,  the  General  Partner or other  Person  appointed  by the  General
Partner, shall take full account of the Partnership's assets and liabilities and
the assets shall be liquidated as promptly as is consistent  with  obtaining the
fair value  thereof and as shall be necessary  to timely make the  distributions
below described,  and the proceeds therefrom, to the extent sufficient therefor,
shall be applied and distributed in the following order:

            (a) To the payment and discharge of all of the  Partnership's  debts
and  liabilities  other  than  liabilities  owing  to  the  Partners,  including
establishment of any necessary contingency reserves;

            (b) To the Class A Limited Partners,  an amount equal to the amounts
owed on any loans which they may have made to the Partnership;

            (c) To the Class B Limited  Partners,  an amount  equal to any loans
which they may have made to the Partnership; and

            (d) To the Partners in accordance with Section 6.1(b).

         9.3 Distribution In Kind. Any Partnership  Property distributed in kind
in the liquidation shall be valued as follows:

            (a) The General  Partner  shall select an  independent,  third-party
appraiser,  experienced in appraising limited  partnership  interests similar to
the Interests (the  "Appraiser").  The Appraiser will determine the value of the
Limited  Partner's  Interest  as of the end of the  calendar  month  immediately
preceding  the  distribution  in kind based upon the value of the  Partnership's
assets net of  liabilities  assuming  all assets were sold at such value and all
liabilities  were  satisfied  by cash  payments at their  present  value and any
resulting  deem Profit or Loss was  allocated  to the  Partners  pursuant to the
terms of this Agreement.  The  determination of the value of a Limited Partner's
Capital  Account shall assume the going concern of the Partnership and

                                       18
<PAGE>

shall not take into account  minority  discounts  for the Capital  Account being
valued.  The date on which the Capital  Account is to be valued pursuant to this
Section shall be referred to herein as a "Valuation  Date." The Appraiser  shall
within  sixty (60) days of the  distribution  in kind  prepare a  statement  and
report  of the  amount  of  the  Limited  Partner's  Capital  Account  as of the
Valuation  Date. A copy of such  statement  and report will be forwarded to each
Partner.  The difference  between the value of any item of Partnership  Property
distributed in kind and its book value shall be treated as a gain or loss on the
disposition of Partnership Property and shall be allocated among the Partners as
provided in Article VI.

            (b)  The  Partnership's  name  and  goodwill  shall,  as  among  the
Partners, be deemed to have no value and shall belong to the Partnership, and no
Partner shall have any right or claim individually to the use thereof.

        ARTICLE X. BOOKS OF ACCOUNTS, ACCOUNTING, REPORTS, FISCAL YEAR,
                        BANKING AND TAX MATTERS PARTNER

         10.1 Accounting,  Books and Records.  The Partnership shall maintain at
its  principal  place of  business or such other  places as the General  Partner
shall determine books of account for the Partnership which shall show a true and
accurate  record of all costs and  expenses  incurred,  all  charges  made,  all
credits made and received, and all income derived in connection with the conduct
of the  Partnership  and  the  operation  of its  business  in  accordance  with
generally accepted accounting principles consistently applied and, to the extent
inconsistent therewith in accordance with this Agreement.  The Partnership shall
use the accrual  method of accounting in  preparation  of its annual reports and
for tax purposes and shall keep its books and records accordingly.  Each Partner
or its designated  representative shall have the right, during ordinary business
hours, to have access to, inspect and copy, at its sole expense, the contents of
such books or records.

         10.2 Other Records.

            (a)  The  Partnership  shall  maintain  at its  principal  place  of
business the following:

                  (i) A current  list of the full names and last known  business
address of each Partner;

                  (ii) A copy of the  Certificate  of Limited  Partnership,  all
amendments  thereto,  and executed copies of any powers of attorney  pursuant to
which the same have been executed;

                  (iii) A copy of this Agreement,  all amendments  thereto,  and
executed  copies of any written  powers of  attorney  pursuant to which the same
have been executed;

                  (iv)  Copies  of any  federal,  state,  and local  income  tax
returns and reports of the Partnership for the three most recent years; and

                  (v) Copies of any financial  statements of the Partnership for
the three most recent years.

                                       19
<PAGE>

            (b) Except as otherwise  set forth  herein,  each Partner shall have
the right,  exercisable  upon written demand,  to examine the items described in
Section  10.2(a) during ordinary  business hours and for any purpose  reasonably
related to the  Partner's  Interest in the  Partnership  (which  purpose must be
stated in the written demand),  and shall have the right, at its own expense, to
make copies of all such items.

         10.3 Reports.

            (a) The General  Partner shall be responsible for the preparation of
financial  reports of the Partnership and the coordination of financial  matters
of the Partnership with the Accountant.

            (b) Within seventy-five (75) days after the end of each fiscal year,
the General Partner shall transmit to each Partner  financial  statements  based
upon the annual  audit of the books and  financial  records of the  Partnership,
prepared in accordance with generally accepted  accounting  principles,  and, to
the extent inconsistent therewith, in accordance with this Agreement,  including
the following:

                  (i) A copy of the balance sheet of the  Partnership  as of the
last day of such fiscal year;

                  (ii) A  statement  of income or loss for the  Partnership  for
such fiscal year;

                  (iii)  A  statement  of the  Partners'  Capital  Accounts  and
changes therein for such fiscal year; and

                  (iv) A  statement  of  Partnership  cash flow for such  fiscal
year.

            (c) Within seventy-five (75) days after the end of each fiscal year,
the General  Partner  shall  transmit to each Partner a report  indicating  such
Partner's share of all items of income or gain, expense, loss or other deduction
and tax credit of the  Partnership  for such fiscal  year,  and such  additional
information to enable the Partners to complete their respective tax returns.

            (d) The General Partner shall transmit to the Limited  Partners such
other reports and information as the Limited Partners may reasonably request.

         10.4 Fiscal Year. The fiscal year of Partnership  shall be the calendar
year.

         10.5 Partnership Funds. All funds of the Partnership shall be deposited
in its name in a separate  bank account or accounts or in an account or accounts
of a savings and loan  association  or brokerage  firm as shall be determined by
the General Partner.

         10.6 Tax  Matters  Partner.  The  General  Partner  shall  serve as the
Partnership's  "tax matters  partner" (as such term is defined in the Code).  In
such capacity, the Tax Matters Partner is hereby authorized and empowered to act
for and  represent  the  Partnership  and each of the  Partners  before  (i) the
Internal  Revenue  Service  ("Service")  in  any  audit  or  examination  of any

                                       20
<PAGE>

Partnership tax return, and (ii) any court selected by the Partners for judicial
review of any adjustment  assessed by the Service.  All  out-of-pocket  expenses
incurred by the Tax Matters  Partner in his capacity as the Tax Matters  Partner
shall be  considered  expenses  of the  Partnership  for which  the Tax  Matters
Partner shall be entitled to full reimbursement.

                          ARTICLE XI. INDEMNIFICATION

         11.1 Indemnification.

            (a) General  Provisions.  Except as otherwise set forth herein,  the
Partners  and  their  respective  members,  partners,   Affiliates,   directors,
officers, agents and employees (herein referred to as an "Indemnitee"), shall be
indemnified,  held harmless and defended by the Partnership  (out of Partnership
assets,  including  the  proceeds  of  liability  insurance)  against any claim,
demand, controversy,  dispute, cost, loss, damage, expense (including reasonable
attorneys'  fees),  judgment  and/or  liability  incurred by or imposed upon the
Indemnitee in connection  with any action,  suit or  proceeding  (including  any
proceeding before any administrative or legislative body or agency) to which the
Indemnitee  may be a party or otherwise  involved,  or with which the Indemnitee
may be threatened, by reason of any action or omission of the Indemnitee (or the
Indemnitee's  employee) in connection  with the conduct of Partnership  affairs.
Such indemnification  extends to the Indemnitee in its capacity, at the time the
cause of action arose or thereafter, as general partner, member of any committee
or as a member, Affiliate,  director,  officer, partner, employee or other agent
of any other  organization in which the Partnership owns an interest or of which
the Partnership is a creditor,  which other  organization the Indemnitee (or its
employee) serves in such capacity at the request of the Partnership  (whether or
not the  Indemnitee  or its employee  continues to serve in such capacity at the
time  such  action,   suit  or  proceeding  is  brought  or   threatened).   The
indemnification  set forth  herein  shall not extend with  respect to actions or
omissions  of the  Indemnitee  (or its  employee)  which shall have been finally
adjudicated (by settlement or otherwise) in any such action,  suit or proceeding
to have constituted actual fraud, willful misconduct or gross negligence. In the
event of settlement of any action,  suit or  proceeding  brought or  threatened,
such indemnification  shall apply to all matters covered by the settlement.  The
foregoing right of  indemnification  shall be in addition to any rights to which
any  Indemnitee  may otherwise be entitled and shall inure to the benefit of the
executors,  administrators,  personal representatives,  successors or assigns of
each such Indemnitee.

            (b)  Advance  Payment of  Expenses.  The  Partnership  shall pay the
expenses incurred by an Indemnitee in defending a civil or criminal action, suit
or proceeding, or in opposing any claim arising in connection with any potential
or threatened  civil or criminal action,  suit or proceeding,  in advance of the
final  disposition  of such  action,  suit or  proceeding,  upon  receipt  of an
undertaking  by such  Indemnitee to repay such payment if he shall be determined
to be not entitled to  indemnification  therefore as provided herein;  provided,
however, that in such instance the Indemnitee is not commencing an action, suit,
or  proceeding  against  the  Partnership,  or  defending  an  action,  suit  or
proceeding  commenced  against him by the  Partnership or any Partner thereof or
opposing a claim by the Partnership or any Partner thereof arising in connection
with any such potential or threatened action, suit or proceeding.

                                       21
<PAGE>

            (c) Insurance.  The Partnership may purchase and maintain  insurance
with  such  limits  or  coverages  as  the  General  Partner   reasonably  deems
appropriate,  at the expense of the Partnership and to the extent available, for
the  protection  of any  Indemnitee  against  any  liability  incurred  by  such
Indemnitee in any such capacity or arising out of his status as such, whether or
not the  Partnership  has the power to indemnify  such  Indemnitee  against such
liability.   The  Partnership  may  purchase  and  maintain  insurance  for  the
protection of any officer, director, employee,  consultant or other agent of any
other  organization  in which the  Partnership  owns an interest or of which the
Partnership  is a  creditor  against  similar  liabilities,  whether  or not the
Partnership has the power to indemnify him or it against such  liabilities.  Any
amounts payable by the  Partnership to an Indemnitee  pursuant to the provisions
of Section  11.1(a)  above  shall be  payable  first  from the  proceeds  of any
insurance  recovery  pursuant to policies  purchased by the Partnership and then
from the other assets of the Partnership; provided, that the foregoing shall not
affect the  Partnership's  obligation  to advance  expenses  pursuant to Section
11.1(b)  hereof in  circumstances  in which the  insurance  Partnership  who has
issued such policy will not advance such expenses.

                           ARTICLE XII. MISCELLANEOUS

         12.1 Agreement for Further Execution. The Partners agree to sign, swear
or acknowledge any  certificates or filings required by the laws of the State of
Delaware or any other state,  to sign,  swear or  acknowledge  any  amendment or
cancellation  of such  certificate  or filings  whether or not such amendment or
cancellation  is  required  by law;  to sign,  swear or  acknowledge  such other
certificates,  filings,  documents or affidavits of assumed name,  trade name or
the like (and any amendments or  cancellations  thereof that may be required for
conduct  of the  Partnership's  business)  and to cause the filing of any of the
same for record wherever such filing shall be required by law. This Section 12.1
shall not  prejudice  or affect the rights of the  Partners  to approve  certain
amendments to this Agreement as herein provided.

         12.2 Amendments.

            (a) Except as otherwise  provided in this Agreement,  no alteration,
modification  or amendment of this Agreement shall be made unless in writing and
signed (in  counterpart  or otherwise) by the General  Partner and a Majority in
Interest of the Limited  Partners,  except that no alteration,  modification  or
amendment of any Section hereof which would  materially and adversely affect the
economic  interests of one or more (but not all) of the Limited  Partners may be
made (except as provided  below)  without the  unanimous  consent of all Limited
Partners so adversely affected.  Notwithstanding  the foregoing,  no increase in
the amount required to be contributed to the Partnership by the Partners,  other
than as required herein or under applicable law, may be made without the consent
of all the Partners.

            (b) Any provision to the contrary contained herein  notwithstanding,
the General Partner may,  without the consent or approval of any Partners,  make
such  amendments to this  Agreement  binding on the  Partners,  (i) to correct a
typographical  error,  cure any  ambiguity,  correct or supplement any provision
herein which may be inconsistent with any other provisions herein,  (ii) to make
any other  amendment if such  amendment  is not adverse to the  interests of the
Limited  Partners  as a whole or as a class or if such  amendment  benefits  the
Limited  Partners as a whole or as a class; and (iii) to reflect the addition of
Limited Partners pursuant to Section 5.2;

                                       22
<PAGE>

provided,  however,  that no amendment shall be adopted pursuant to this Section
12.2(b)  unless  the  adoption  thereof  does  not  affect  the  status  of  the
Partnership as a partnership for federal income tax purposes.

         12.3 Notices.

            (a) Any  notice to be given  under this  Agreement  shall be made in
writing  and sent by express,  registered  or  certified  mail,  return  receipt
requested,  postage prepaid,  fax, or commercial delivery service,  addressed as
set forth below:

                  (i) If to the General Partner or the Partnership:

                       5858 Westheimer Street
                       Suite 708
                       Houston, TX  77057

                       with a copy to:

                       Klehr, Harrison, Harvey, Branzburg & Ellers LLP
                       260 S. Broad Street
                       Philadelphia, PA  19102
                       Attn.:  Lawrence D. Rovin

                  (ii) If to any  Partner,  such  notice  shall be mailed to the
address of the Partner appearing on the records of the Partnership.

            (b) Any Partner may change the address to which notice is to be sent
by giving  notice of such  change to the  Partnership  in  conformity  with this
Section 12.3.

            (c) Any such  notice  shall be  deemed  to be  delivered,  given and
received for all purposes as of the date  delivered if delivered by a commercial
delivery  service or by  confirmed  fax, or as of the date on which the same was
deposited in a regularly maintained  receptacle for the deposit of United States
mail, if sent by express, registered or certified mail.

         12.4 Governing Law and  Jurisdiction.  This Agreement shall be governed
by, and  construed  in  accordance  with,  the laws of the State of  Delaware as
interpreted  by the  courts  of said  Commonwealth,  notwithstanding  any  rules
regarding choice of law to the contrary.  The parties to this Agreement agree to
the exclusive jurisdiction of the courts of New Castle County,  Delaware and the
Federal  courts of the  District of Delaware  for  resolution  of  controversies
arising  out of or  relating  to this  Agreement  and any  related  instruments,
agreements or documents.

         12.5 Binding Nature of Agreement.  Except as otherwise  provided,  this
Agreement  shall be binding  upon and inure to the benefit of the  Partners  and
their personal representatives, successors and assigns.

         12.6  Additional  Partners.  Each  substitute,  additional or successor
Partner shall become a signatory  hereof by signing such number of  counterparts
of this Agreement and such other

                                       23
<PAGE>

instrument  or  instruments  and in such manner,  as the General  Partner  shall
determine.  By so signing, each substitute,  additional or successor Partner, as
the case may be,  shall be deemed to have adopted and to have agreed to be bound
by all  the  provisions  of  this  Agreement;  provided,  however,  that no such
counterpart shall be binding until it shall have been signed by the Partnership.

         12.7 Validity. In the event that all or any portion of any provision of
this  Agreement  shall be held to be  invalid,  the same shall not affect in any
respect whatsoever the validity of the remainder of this Agreement.

         12.8 Entire  Agreement.  This  Agreement  and the  agreements  attached
hereto as Exhibits  constitute the entire  understanding and agreement among the
parties  hereto with respect to the subject  matter  hereof,  and supersedes all
prior  and  contemporaneous   agreements  and  understandings,   inducements  or
conditions, express or implied, oral or written, except as contained herein.

         12.9 Indulgences, Etc. Neither the failure nor any delay on the part of
any party hereto to exercise any right,  remedy,  power or privilege  under this
Agreement  shall  operate as a waiver  thereof;  nor shall any single or partial
exercise of any right,  remedy, power or privilege preclude any other or further
exercise of the same or any waiver of any right, remedy, power or privilege with
respect to any occurrence be construed as a waiver of such right,  remedy, power
or privilege with respect to any other occurrence.  No waiver shall be effective
unless it is in writing and signed by the party  asserted to have  granted  such
waiver.

         12.10 Execution in Counterparts.  This Agreement may be executed in any
number of  counterparts,  each of which  shall be deemed  to be an  original  as
against  any  party  whose  signature  appears  thereon,  and all of such  shall
together constitute one and the same instrument.

         12.11  Paragraph.  The  paragraph  headings in this  Agreement  are for
convenience  only,  form no part of this  Agreement,  and shall not  affect  its
interpretation.

         12.12 Number of Days.  In computing  the number of days for the purpose
of this Agreement, all days shall be counted,  including Saturdays,  Sundays and
holidays; provided, however, that if the final day of any time period falls on a
Saturday,  Sunday or holiday, then such final day shall be deemed to be the next
day which is not a Saturday, Sunday or holiday.

         12.13  Interpretation.   No  provision  of  this  Agreement  is  to  be
interpreted  for or against any party  because that party or that party's  legal
representative drafted such provision.

         12.14  Corporate  Authority.  Any  corporation  or trust  signing  this
Agreement  represents and warrants that the execution,  delivery and performance
of this Agreement by such  corporation or trust has been duly  authorized by all
necessary corporate or trustee action.

         12.15 Third Party Beneficiaries. Notwithstanding anything herein to the
contrary,  no provision of this Agreement is intended to benefit any party other
than the Partners hereto and their successors and assigns in the Partnership and
shall not be enforceable by any other party.

                                       24
<PAGE>

         12.16 Appointment of Attorney-in-fact.  Each Partner hereby irrevocably
constitutes   and   appoints   the   General   Partner   its  true  and   lawful
attorney-in-fact,  with full power of substitution, and with the General Partner
having  full  power  and  authority  in its name,  place  and stead to  execute,
acknowledge,  deliver,  swear to,  file and record with the  appropriate  public
offices  such  certificates,  instruments  and  documents as may be necessary or
appropriate  to carry out the  provisions of this  Agreement or  effectuate  any
action taken by or on behalf of the Partnership,  including, but not limited to,
any  amendments  to this  Agreement or the  Certificate  of Limited  Partnership
approved by the Partners as provided herein.  The appointment by the Partners of
the General  Partner as  attorney-in-fact  shall be deemed to be a power coupled
with an interest,  in  recognition  of the fact that each of the Partners  under
this Agreement  will be relying upon the power of the General  Partner to act as
contemplated  by this  Agreement  in any filing and other  action by the General
Partner on behalf of the Partnership  and, shall to the fullest extent permitted
by applicable law, survive the Bankruptcy,  death or incompetency of any Partner
hereby giving such power.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       25
<PAGE>

         IN WITNESS  WHEREOF,  the undersigned have set their hands and seals as
of the day and year first above written.

GENERAL PARTNER:

LS GAS, LLC

By:
         -----------------------------------
         Mark Bush
         Managing Member

LIMITED PARTNERS:

Attached  Powers of Attorneys.

<PAGE>

                                   EXHIBIT B

                              SPECIAL ALLOCATIONS

1. Special Tax Allocations.

         (a)  Qualified  Income  Offset.  In the event any Partner  unexpectedly
receives any adjustments, allocations, or distributions described in Regulations
Section 1.704-1  (b)(2)(ii)(d)(4),(5),  or (6), items of Partnership  income and
gain shall be  specially  allocated to each such Partner in an amount and manner
sufficient to eliminate, to the extent required by the Regulations, the Adjusted
Capital Account Deficit of such Partner as quickly as possible, provided that an
allocation pursuant to this Section 1(a) shall be made if and only to the extent
that such Partner would have an Adjusted Capital Account Deficit after all other
allocations  provided for in Article VI hereof have been  tentatively made as if
this Section 1(a) were not in the Agreement.

         (b) Gross  Income  Allocation.  In the event any  Partner has a deficit
Capital Account at the end of any  Partnership  fiscal year that is in excess of
the sum of (i) the amount such  Partner is  obligated  to restore,  and (ii) the
amount such Partner is deemed to be obligated to restore pursuant to the next to
last sentences of Regulation Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such
Partner shall be specially allocated items of Partnership income and gain in the
amount of such  excess as  quickly  as  possible,  provided  that an  allocation
pursuant to this  Section 1(b) shall be made if and only to the extent that such
Partner  would  have a deficit  Capital  Account in excess of such sum after all
other  allocations  provided for in this Article 6 have been tentatively made as
if Section 1(a) hereof and this Section 1(b) were not in the Agreement.

         (c) Partnership  Minimum Gain Chargeback.  Except as otherwise provided
in Section 1.704-2(f) of the Regulations, notwithstanding any other provision of
Article VI hereof if there is a net decrease in Partnership  Minimum Gain during
any fiscal year, each Partner shall be specially  allocated items of Partnership
income and gain for such  fiscal  year (and,  if  necessary,  subsequent  fiscal
years)  in an  amount  equal  to such  Partner's  share of the net  decrease  in
Partnership  Minimum Gain,  determined in accordance  with  Regulations  Section
1.704-2(g).  Allocations  pursuant  to the  previous  sentence  shall be made in
proportion to the  respective  amounts  required to be allocated to each Partner
pursuant thereto. The items to be so allocated shall be determined in accordance
with Section  1.704-2(f)(6) and  1.704-2(j)(2) of the Regulations.  This Section
1(c) is  intended  to comply with the minimum  gain  chargeback  requirement  in
Section  1.704-2(f) of the  Regulations  and shall be  interpreted  consistently
therewith.

         (d) Partner Minimum Gain  Chargeback.  Except as otherwise  provided in
Section 1.704-2(i)(4) of the Regulations, notwithstanding any other provision of
Article  VI  hereof,  if  there  is a  net  decrease  in  Partner  Minimum  Gain
attributable to a Partner  Nonrecourse Debt during any fiscal year, each Partner
who has a  share  of the  Partner  Minimum  Gain  attributable  to such  Partner
Nonrecourse  Debt,  determined in accordance with Section  1.704-2(i)(5)  of the
Regulations,  shall be specially  allocated items of Partnership income and gain
for such fiscal year (and, if necessary,  subsequent  fiscal years) in an amount
equal to such  Partner's  share of the net  decrease  in  Partner  Minimum  Gain
attributable  to such Partner  Nonrecourse  Debt,

<PAGE>

determined in accordance with  Regulations  Section  1.704-2(i)(4).  Allocations
pursuant to the previous  sentence shall be made in proportion to the respective
amounts required to be allocated to each Partner pursuant thereto.  The items to
be so allocated shall be determined in accordance with Section 1.704-2(i)(4) and
1.704-2(j)(2) of the  Regulations.  This Section 1(d) is intended to comply with
the  minimum  gain  chargeback  requirement  in  Section  1.704-2(i)(4)  of  the
Regulations and shall be interpreted consistently therewith.

         (e) Nonrecourse Deductions.  Nonrecourse Deductions for any Fiscal year
shall  be  specially  allocated  among  the  Partners  in  proportion  to  their
Percentage Interests.

         (f) Partner Nonrecourse Deductions.  Any Partner Nonrecourse Deductions
for any Fiscal year shall be  specially  allocated  to the Partner who bears the
economic risk of loss with respect to the Partner Nonrecourse Debt to which such
Partner  Nonrecourse  Deductions are attributable in accordance with Regulations
Section 1.704-2(i)(1).

         (g) Code Section 754  Adjustment.  To the extent an  adjustment  to the
adjusted tax basis of any  Partnership  asset pursuant to Code Section 734(b) or
Code Section 743(b) is required to be taken into account in determining  Capital
Accounts, the amount of such adjustment to the Capital Accounts shall be treated
as an item of gain (if the adjustment  increased the basis of the asset) or loss
(if the  adjustment  decreases  such  basis)  and  such  gain or loss  shall  be
specially  allocated to the Partners in a manner  consistent  with the manner in
which their  Capital  Accounts  are  required  to be  adjusted  pursuant to such
Section 1.704-1(b)(2)(iv)(m) of the Regulations.

         (h) Curative  Allocations.  The Regulatory  Allocations  consist of the
allocations  pursuant to Sections 1(a) through 1(g) hereof.  Notwithstanding any
other provision of this  Agreement,  the Regulatory  Allocations  shall be taken
into account in allocating  items of income,  gain, loss and deduction among the
Partners so that, to the extent possible,  the net amount of such allocations of
other items and the Regulatory Allocations to each Partner shall be equal to the
net amount  that would have been  allocated  to each  Partner if the  Regulatory
Allocations had not occurred.

2. Other Allocation Rules.

         (a) For purposes of determining the Profits, Losses, or any other items
allocable  to any  period,  Profits,  Losses,  and any such other items shall be
determined  on a daily,  monthly or other basis,  as  determined  by the General
Partner using any permissible  method under Code Section 706 and the Regulations
thereunder.

         (b)  Except  as  otherwise  provided  in this  Agreement,  all items of
Partnership  income,  gain,  loss,  deductions,  and any other  allocations  not
otherwise  provided  for  shall  be  divided  among  the  Partners  in the  same
proportions as they share Profits or Losses, as the case may be, for the year.

         (c) The  Partners  are  aware of the  income  tax  consequences  of the
allocations  made  by  this  Exhibit  B and  hereby  agree  to be  bound  by the
provisions of this Exhibit B in reporting their shares of Partnership income and
loss for income tax purposes.

<PAGE>

3. Tax  Allocations:  Code  Section  704(c).  Tax  allocations  shall be made in
accordance with the book allocations to Capital  Accounts  prescribed in Article
VI and Exhibit B, but subject to the  following  provisions of this Section 3 of
Exhibit  B.  In  accordance   with  Code  Section  704(c)  and  the  Regulations
thereunder,  income,  gain,  loss,  and  deduction  with respect to any property
contributed to the capital of the Partnership shall, solely for tax purposes, be
allocated among the Partners so as to take account of any variation  between the
adjusted  basis of such  property  to the  Partnership  for  federal  income tax
purposes and its initial  Gross Asset Value.  In the event the Gross Asset Value
of any  Partnership  asset is adjusted  pursuant to this  Agreement,  subsequent
allocations of income, gain, loss and deduction with respect to such asset shall
take  account of any  variation  between  the  adjusted  basis of such asset for
federal  income tax  purposes  and its Gross  Asset  Value in the same manner as
under Code Section 704(c) and the Regulations thereunder. Any elections or other
decisions  relating to such allocations  shall be made by the General Partner in
any manner that reasonably reflects the purpose and intention of this Agreement.
Allocations pursuant to this Section are solely for purposes of federal,  state,
and local  taxes and shall not  affect,  or in any way be taken into  account in
computing,  any Partner's  Capital  Account or share of Profits,  Losses,  other
items, or distributions pursuant to any provision of this Agreement.

<PAGE>

                                    EXHIBIT A

                        PARTNERS AS OF DECEMBER 31, 2002

                                        Initial Capital             Percentage
                                         Contribution                Interest
                                        ---------------             -----------
Limited Partners:

Continental Southern Resources Inc.        $661,500                   24.225%
111 Presidential Blvd. Suite 158A
Bala Cynwyd, PA  19004

BPK Resources, Inc.                        $256,500                   9.405%
5858 Westheimer Street, Suite 709
Houston, TX  77057

Michael Marcus                             $135,000                    4.95%
1505 Rockcliff Road
Austin, TX  78746

CBG Compagnie Bancaire Geneve               $27,000                    .99%
Avenue De Rumine 20
1005 Lausanne
Switzerland
                                                                       6.93%

Fenmore Consultants, Ltd.                  $189,000
PO Box 599, Suite 3
Caribbean Place, Providenciales
Turks & Caicos Islands                                                 1.98%

Rhodes Ventures, S.A.                       $54,000
P.H. Plaza 200 Building
16th Floor - 50th Street
Panama R.P.                                                            5.94%

Michael J. Garnick                         $162,000
1590 Stocton Road
Meadowbrook, PA  19406                                                 9.9%

John Paul DeJoria                          $270,000
PO Box 34540
Las Vegas, NV  89133                                                  1.485%

William F. Miller III                       $40,500
2216 Sunset
Houston, TX  77005

<PAGE>

Richard Genovese                            $27,000                    .99%
Le Montagne
7 Avenue De Grand Bretagne
Monte Carlo 98000
Monaco

Louisiana X Investors, LLC                 $877,500                   29.175%
One Belmont Avenue, Suite 417
Bala Cynwyd, PA  19004

International Travel CD's Inc.          Carried through                3.0%
5858 Westheimer Street, Suite 708        completion of
Houston, Texas  77057                     first well

General Partner:

LS Gas, LLC                                 $27,000                      1%
5858 Westheimer Street, Suite 708
Houston, TX  77057

<PAGE><PAGE>

Exhibit 4.1       Advisory and Consulting Agreements

                                    NUMBER OF SHARES AND WARRANTS

         4.1(a)                              14,000,000

         4.1(b)                              17,500,000

         4.1(c)                               2,000,000

         4.1(d)                               7,500,000

         4.1(e)                               2,500,000

         4.1(f)                                 750,000

         4.1(g)                              10,000,000

         4.1(h)                               7,500,000

         4.1(i)                               1,000,000

         Other                                  250,000
                                            -------------

Total                                        63,000,000
                                             ------------

                                       9
<PAGE>

Exhibit 4.1(a)

                              CONSULTING AGREEMENT

AGREEMENT, effective as of the 15th day of May, 2003, between Calypte Biomedical
Corporation, a Delaware Corporation (the "Company"), of 1265 Harbor Parkway,
Alameda, CA 94502, and Alfonso Saavedra, 13616 Charity Drive, Sylmar, CA 91342
("Consultant").

         WHEREAS, THE Company desires the Consultant to provide consulting
services to the Company pursuant hereto and Consultant is agreeable to providing
such services.

         NOW THEREFORE, in consideration of the premises and the mutual promises
set forth herein, the parties hereto agree as follows:

1. Consultant shall serve as a consultant to assist the Company in the following
areas:

               (a)  Facility evaluation and site searches involving analysis of
                    present space and expansion needs as part of a five-year
                    plan.

               (b)  Introductions to possible grant sources.

              2. Term: The Company shall be entitled to Consultant's services
              for reasonable times when and to the extent requested by, and
              subject to the direction of Mr. Cataldo. The term of this
              Consulting Agreement began as of the date of this Agreement, and
              shall terminate on August 15, 2003.

              3. Reasonable travel and other expenses necessarily incurred by
              Consultant to render such services, and approved in advance by the
              Company, shall be reimbursed by the Company promptly upon receipt
              of proper statements, including appropriate documentation, with
              regard to the nature and amount of those expenses. Those
              statements shall be furnished to the Company monthly at the end of
              each calendar month in the Consulting Period during which any such
              expenses are incurred. Company shall pay expenses within fifteen
              (15) business days of the receipt of a request with appropriate
              documentation.

              4. The Company shall cause the Agreement to be registered with
              Securities Exchange Commission under an available form as soon as
              practical. In consideration for the services to be performed by
              Consultant, the Company will immediately grant Consultant a
              warrant to purchase 14,000,000 shares of the registered common
              stock of the Company at $0.01 per share, or an aggregate purchase
              price of $140,000. The warrant is immediately exercisable upon
              grant and will expire on August 15, 2003. All compensation
              pursuant to this Consulting Agreement is fully earned upon
              execution of this agreement.

                                       10
<PAGE>

              5. The consultant will provide to Calypte's Executive Chairman a
              report of services rendered and results thereof no less than
              quarterly and that report will be issued within 30 days of quarter
              end. If requested by the chairman, this will be a written report.
              E.g. July 31, 2003 for the period ended June 30, 2003 and then
              within 30 days of the conclusion of the agreement.

              6. It is the express intention of the parties that the Consultant
              is an independent contractor and not an employee or agent of the
              Company. Nothing in this agreement shall be interpreted or
              construed as creating or establishing the relationship of employer
              and employee between the Consultant and the Company. Both parties
              acknowledge that the Consultant is not an employee for state or
              federal tax purposes. The Consultant shall retain the right to
              perform services for others during the term of this agreement.

                  6.1 The consulting services shall not involve and the
                  Consultant is not engaged in services in connection with the
                  offer or sale of securities in a capital-raising transaction
                  for Calypte, and further, the Consultant does not and will not
                  directly or indirectly promote or maintain a market for
                  Calypte's securities.

              7. Neither this agreement nor any duties or obligations under this
              agreement may be assigned by the Consultant without the prior
              written consent of the Company.

              8. This agreement may be terminated upon ten (10) days written
              notice by the Company. Notwithstanding any termination, the
              Consultant upon the execution of this agreement, as outlined in
              Section 4, shall earn the consideration, in full.

              9. Any notices to be given hereunder by either party to the other
              may be given either by personal delivery in writing or by mail,
              registered or certified, postage prepaid with return receipt
              requested. Mailed notices shall be addressed to the parties at the
              addressed appearing in the introductory paragraph of this
              agreement, but each party may change the address by written notice
              in accordance with the paragraph. Notices delivered personally
              will be deemed communicated as of actual receipt; mailed notices
              will be deemed communicated as of two days after mailing.

                                       11
<PAGE>

              10. This agreement supersedes any and all agreements, either oral
              or written, between the parties hereto with respect to the
              rendering of services by the Consultant for the Company and
              contains all the covenants and agreements between the parties with
              respect to the rendering of such services in any manner
              whatsoever. Each party to this agreement acknowledges that no
              representations, inducements, promises, or agreements, orally or
              otherwise, have been made by any party, or anyone acting on behalf
              of any party, which are not embodied herein, and that no other
              agreement, statement, or promise not contained in this agreement
              shall be valid or binding. Any modification of this agreement will
              be effective only if it is in writing signed by the party to be
              charged.

              11. This agreement will be governed by and construed in accordance
              with the laws of the State of California, without regard to its
              conflicts of laws provisions; and the parties agree that the
              proper venue for the resolution of any disputes hereunder shall be
              Alameda County, California.

              12. For purposes of this Agreement, Intellectual Property will
              mean (i) works, ideas, discoveries, or inventions eligible for
              copyright, trademark, patent or trade secret protection; and (ii)
              any applications for trademarks or patents, issued trademarks or
              patents, or copyright registrations regarding such items. Any
              items of Intellectual Property discovered or developed by the
              Consultant (or the Consultant's employees) during the term of this
              Agreement will be the property of the Consultant, subject to the
              irrevocable right and license of the Company to make, use or sell
              products and services derived from or incorporating any such
              Intellectual Property without payment of royalties. Such rights
              and license will be exclusive during the term of this Agreement,
              and any extensions or renewals of it. After termination of this
              Agreement, such rights and license will be nonexclusive, but will
              remain royalty-free. Notwithstanding the preceding, the textual
              and/or graphic content of materials created by the Consultant
              under this Agreement (as opposed to the form or format of such
              materials) will be, and hereby are, deemed to be "works made for
              hire" and will be the exclusive property of the Company. Each
              party agrees to execute such documents as may be necessary to
              perfect and preserve the rights of either party with respect to
              such Intellectual Property.

              13. The written, printed, graphic, or electronically recorded
              materials furnished by the Company for use by the Consultant are
              Proprietary Information and are the property of the Company.
              Proprietary Information includes, but is not limited to, product

                                       12
<PAGE>

              specifications and/or designs, pricing information, specific
              customer requirements, customer and potential customer lists, and
              information on Company's employees, agent, or divisions. The
              Consultant shall maintain in confidence and shall not, directly or
              indirectly, disclose or use, either during or after the term of
              this agreement, any Proprietary Information, confidential
              information, or know-how belonging to the Company, whether or not
              is in written form, except to the extent necessary to perform
              services under this agreement. On termination of the Consultant's
              services to the Company, or at the request of the Company before
              termination, the Consultant shall deliver to the Company all
              material in the Consultant's possession relating to the Company's
              business.

              14. The obligations regarding Proprietary Information extend to
              information belonging to customers and suppliers of the Company
              about which the Consultant may have gained knowledge as a result
              of performing services hereunder.

              15. The Consultant shall not, during the term of this agreement
              and for a period of one year immediately after the termination of
              this agreement, or any extension of it, either directly or
              indirectly (a) for purposes competitive with the products or
              services currently offered by the Company, call on, solicit, or
              take away any of the Company's customers or potential customers
              about whom the Consultant became aware as a result of the
              Consultant's services to the Company hereunder, either for the
              Consultant or for any other person or entity, or (b) solicit or
              take away or attempt to solicit or take away any of the Company's
              employees or consultants either for the Consultant or for any
              other person or entity.

              16. The Company will indemnify and hold harmless Consultant from
              any claims or damages related to statements prepared by or made by
              Consultant that are either approved in advance by the Company or
              entirely based on information provided by the Company.

         Consultant:                         Company:
         Alfonso Saavedra                    Calypte Biomedical Corporation

         /S/ Alfonso Saavedra                By: /s/ Richard D. Brounstein
             -----------------                    ----------------------
                                                  Richard D. Brounstein
                                                  Executive Vice President & CFO

                                       13
<PAGE>

                                                                  Exhibit 4.1(b)
                              CONSULTING AGREEMENT

AGREEMENT, effective as of the 15th day of May, 2003, between Calypte Biomedical
Corporation, a Delaware Corporation (the "Company"), of 1265 Harbor Parkway,
Alameda, CA 94502, and Jimmy Gonzalez, 12227 Willowbend Lane, Sylmar, CA
91342("Consultant").

         WHEREAS, THE Company desires the Consultant to provide consulting
services to the Company pursuant hereto and Consultant is agreeable to providing
such services.

         NOW THEREFORE, in consideration of the premises and the mutual promises
set forth herein, the parties hereto agree as follows:

              1. Consultant shall serve as a consultant to assist the Company in
              business development related to government-operated clinics.

              2. Term: The Company shall be entitled to Consultant's services
              for reasonable times when and to the extent requested by, and
              subject to the direction of Mr. Cataldo. The term of this
              Consulting Agreement began as of the date of this Agreement, and
              shall terminate on September 30, 2003.

              3. Reasonable travel and other expenses necessarily incurred by
              Consultant to render such services, and approved in advance by the
              Company, shall be reimbursed by the Company promptly upon receipt
              of proper statements, including appropriate documentation, with
              regard to the nature and amount of those expenses. Those
              statements shall be furnished to the Company monthly at the end of
              each calendar month in the Consulting Period during which any such
              expenses are incurred. Company shall pay expenses within fifteen
              (15) business days of the receipt of a request with appropriate
              documentation.

              4. The Company shall cause the Agreement to be registered with
              Securities Exchange Commission under an available form as soon as
              practical. In consideration for the services to be performed by
              Consultant, the Company will immediately grant Consultant a
              warrant to purchase 14,000,000 shares of the registered common
              stock of the Company at $0.01 per share, or an aggregate purchase
              price of $140,000. The warrant is immediately exercisable upon
              grant and will expire on August 15, 2003. Additionally, the
              Company will immediately grant Consultant 3,500,000 shares of the
              Company's Common Stock. All compensation pursuant to this
              Consulting Agreement is fully earned upon execution of this
              agreement.

                                       14
<PAGE>

              5. The consultant will provide to Calypte's Executive Chairman a
              report of services rendered and results thereof no less than
              quarterly and that report will be issued within 30 days of quarter
              end. If requested by the chairman, this will be a written report.
              E.g. July 31, 2003 for the period ended June 30, 2003 and then
              within 30 days of the conclusion of the agreement.

              6. It is the express intention of the parties that the Consultant
              is an independent contractor and not an employee or agent of the
              Company. Nothing in this agreement shall be interpreted or
              construed as creating or establishing the relationship of employer
              and employee between the Consultant and the Company. Both parties
              acknowledge that the Consultant is not an employee for state or
              federal tax purposes. The Consultant shall retain the right to
              perform services for others during the term of this agreement.

                  6.1 The consulting services shall not involve and the
                  Consultant is not engaged in services in connection with the
                  offer or sale of securities in a capital-raising transaction
                  for Calypte, and further, the Consultant does not and will not
                  directly or indirectly promote or maintain a market for
                  Calypte's securities.

              7. Neither this agreement nor any duties or obligations under this
              agreement may be assigned by the Consultant without the prior
              written consent of the Company.

              8. This agreement may be terminated upon ten (10) days written
              notice by the Company. Notwithstanding any termination, the
              Consultant upon the execution of this agreement, as outlined in
              Section 4, shall earn the consideration, in full.

              9. Any notices to be given hereunder by either party to the other
              may be given either by personal delivery in writing or by mail,
              registered or certified, postage prepaid with return receipt
              requested. Mailed notices shall be addressed to the parties at the
              addressed appearing in the introductory paragraph of this
              agreement, but each party may change the address by written notice
              in accordance with the paragraph. Notices delivered personally
              will be deemed communicated as of actual receipt; mailed notices
              will be deemed communicated as of two days after mailing.

              10. This agreement supersedes any and all agreements, either oral
              or written, between the parties hereto with respect to the
              rendering of services by the Consultant for the Company and
              contains all the covenants and agreements between the parties with

                                       15
<PAGE>

              respect to the rendering of such services in any manner
              whatsoever. Each party to this agreement acknowledges that no
              representations, inducements, promises, or agreements, orally or
              otherwise, have been made by any party, or anyone acting on behalf
              of any party, which are not embodied herein, and that no other
              agreement, statement, or promise not contained in this agreement
              shall be valid or binding. Any modification of this agreement will
              be effective only if it is in writing signed by the party to be
              charged.

              11. This agreement will be governed by and construed in accordance
              with the laws of the State of California, without regard to its
              conflicts of laws provisions; and the parties agree that the
              proper venue for the resolution of any disputes hereunder shall be
              Alameda County, California.

              12. For purposes of this Agreement, Intellectual Property will
              mean (i) works, ideas, discoveries, or inventions eligible for
              copyright, trademark, patent or trade secret protection; and (ii)
              any applications for trademarks or patents, issued trademarks or
              patents, or copyright registrations regarding such items. Any
              items of Intellectual Property discovered or developed by the
              Consultant (or the Consultant's employees) during the term of this
              Agreement will be the property of the Consultant, subject to the
              irrevocable right and license of the Company to make, use or sell
              products and services derived from or incorporating any such
              Intellectual Property without payment of royalties. Such rights
              and license will be exclusive during the term of this Agreement,
              and any extensions or renewals of it. After termination of this
              Agreement, such rights and license will be nonexclusive, but will
              remain royalty-free. Notwithstanding the preceding, the textual
              and/or graphic content of materials created by the Consultant
              under this Agreement (as opposed to the form or format of such
              materials) will be, and hereby are, deemed to be "works made for
              hire" and will be the exclusive property of the Company. Each
              party agrees to execute such documents as may be necessary to
              perfect and preserve the rights of either party with respect to
              such Intellectual Property.

              13. The written, printed, graphic, or electronically recorded
              materials furnished by the Company for use by the Consultant are
              Proprietary Information and are the property of the Company.
              Proprietary Information includes, but is not limited to, product
              specifications and/or designs, pricing information, specific
              customer requirements, customer and potential customer lists, and
              information on Company's employees, agent, or divisions. The
              Consultant shall maintain in confidence and shall not, directly or

                                       16
<PAGE>

              indirectly, disclose or use, either during or after the term of
              this agreement, any Proprietary Information, confidential
              information, or know-how belonging to the Company, whether or not
              is in written form, except to the extent necessary to perform
              services under this agreement. On termination of the Consultant's
              services to the Company, or at the request of the Company before
              termination, the Consultant shall deliver to the Company all
              material in the Consultant's possession relating to the Company's
              business.

              14. The obligations regarding Proprietary Information extend to
              information belonging to customers and suppliers of the Company
              about which the Consultant may have gained knowledge as a result
              of performing services hereunder.

              15. The Consultant shall not, during the term of this agreement
              and for a period of one year immediately after the termination of
              this agreement, or any extension of it, either directly or
              indirectly (a) for purposes competitive with the products or
              services currently offered by the Company, call on, solicit, or
              take away any of the Company's customers or potential customers
              about whom the Consultant became aware as a result of the
              Consultant's services to the Company hereunder, either for the
              Consultant or for any other person or entity, or (b) solicit or
              take away or attempt to solicit or take away any of the Company's
              employees or consultants either for the Consultant or for any
              other person or entity.

              16. The Company will indemnify and hold harmless Consultant from
              any claims or damages related to statements prepared by or made by
              Consultant that are either approved in advance by the Company or
              entirely based on information provided by the Company.

Consultant:                       Calypte Biomedical Corporation
/s/ Jimmy Gonzalez                  By:/s/ Richard D. Brounstein
------------------                     -------------------------
Jimmy Gonzalez                    Richard Brounstein
                                  Executive Vice President & CFO

                                       17
<PAGE>

                                                                  Exhibit 4.1(c)

                     Amendment No. 3 to Consulting Agreement
                     Between Calypte Biomedical Corporation
                                and George Furla

This Agreement amends and modifies the Amended Consulting Agreement between
Calypte Biomedical Corporation ("Calypte" or the "Company") and George Furla
("Consultant") dated February 14, 2003 and is effective as of May 15, 2003.

Whereas, the Company desires to extend the time period during which Consultant
will provide services to the Company pursuant to the above referenced Consulting
Agreement and Consultant is agreeable to extending the time for providing such
services.

Now therefore, in consideration of the premises and mutual promises set forth
herein, the parties hereto agree as follows:

1.       The term of Consultant's Consulting Agreement shall be extended and, by
         virtue of this Amendment, shall terminate on September 30, 2003 rather
         than August 20, 2003.

2.       In consideration for the extension of the services to be performed by
         Consultant, the Company will immediately grant Consultant 2,000,000
         shares of the common stock. All compensation pursuant to the Consulting
         Agreement and this Amendment is fully earned upon execution of this
         amendment.

3.       All other terms and conditions of the Amended Consultant Agreement
         dated February 14, 2003 remain unchanged.

Consultant:                                       Calypte Biomedical Corporation

/S/ George Furla                                  By: /S/ Richard D. Brounstein
----------------                                       -------------------------
George Furla                                      Richard Brounstein
                                                  EVP & CFO

                                       18
<PAGE>

                                                                  Exhibit 4.1(d)
                          CONSULTING SERVICES AGREEMENT

         This Consulting Services Agreement ("Agreement"), dated May 19, 2003,
is made by and between First Securities USA, Inc., a California corporation
("Consultant"), whose address is 2361 Campus Drive, Suite 210, Irvine,
California 92612, and Calypte Biomedical Corporation ("Client"), having its
principal place of business at 1265 Harbor Bay Parkway, Alameda, CA 94502
(collectively, the "Parties").

         WHEREAS, Client is a publicly held corporation with its common stock
trading on the Over the Counter Bulletin Board under the ticker symbol "CALY,"
and desires to further develop its business and customers;

          WHEREAS, Consultant has extensive background in the area of business
consulting and management advisory services; and

         WHEREAS, Client desires to engage Consultant to provide information,
evaluation and consulting services to Client in Consultant's area of knowledge
and expertise on the terms and subject to the conditions set forth herein.

         NOW, THEREFORE, in consideration for those services Consultant provides
 to Client, the Parties agree as follows:

1.         SERVICES OF CONSULTANT.

         Consultant agrees to perform for Client all necessary services required
in providing general business consulting and management advisory services for
Client as more specifically set forth in Exhibit A attached hereto. The services
to be provided by Consultant will not be in connection with the offer or sale of
securities in a capital-raising transaction, and will not directly or indirectly
promote or maintain a market for Client's securities. Individuals employed by
Consultant under the primary supervision of Shelly Singhal will provide the
services.

2.         CONSIDERATION.

         Client agrees to pay Consultant, as its fee and as consideration for
services provided, a warrant to purchase a total of 7,500,000 shares of free
trading common stock in Client, exercisable as follows:

              ?         7,500,000    shares exercisable at $ 0.01  per share
                        ---------                            ----

         The shares underlying this warrant have been registered on a Form S-8
Registration Statement filed with and declared effective by the U.S. Securities
and Exchange Commission. The warrant and the underlying shares, upon issuance,
shall be issued in the names of individual principals of the Consultant as set
forth on Exhibit B attached hereto.

                                       19
<PAGE>

3.         CONFIDENTIALITY.

         Each Party agrees that during the course of this Agreement, information
that is confidential or of a proprietary nature may be disclosed to the other
party, including, but not limited to, product and business plans, software,
technical processes and formulas, source codes, product designs, sales, costs
and other unpublished financial information, advertising revenues, usage rates,
advertising relationships, projections, and marketing data ("Confidential
Information"). Confidential Information shall not include information that the
receiving party can demonstrate (a) is, as of the time of its disclosure, or
thereafter becomes part of the public domain through a source other than the
receiving party, (b) was known to the receiving party as of the time of its
disclosure, (c) is independently developed by the receiving party, or (d) is
subsequently learned from a third party not under a confidentiality obligation
to the providing party.

4.         LATE PAYMENT.

         Client shall pay to Consultant all fees within 15 days of the due date.
Failure of Client to finally pay any fees within 15 days after the applicable
due date shall be deemed a material breach of this Agreement, justifying
suspension of the performance of the "Services" provided by Consultant, will be
sufficient cause for immediate termination of this Agreement by Consultant. Any
such suspension will in no way relieve Client from payment of fees, and, in the
event of collection enforcement, Client shall be liable for any costs associated
with such collection, including, but not limited to, legal costs, attorneys'
fees, courts costs, and collection agency fees.

5.         INDEMNIFICATION.

(a)        CLIENT.

         Client agrees to indemnify, defend, and hold harmless Consultant, its
directors, officers, employees, attorneys, and agents, and to defend any action
brought against said parties with respect to any and all claims, demands, causes
of action, debts or liabilities, including reasonable attorneys' fees, arising
out of work performed under this Agreement, including breach of Client of this
Agreement.

(b)        CONSULTANT.

 Consultant agrees to indemnify, defend, and shall hold harmless Client, its
directors, officers, employees, attorneys, and agents, and defend any action
brought against same with respect to any claim, demand, cause of action, debt or
liability, including reasonable attorneys' fees, to the extent that such an
action arises out of the gross negligence or willful misconduct of Consultant.

                                       20
<PAGE>

(c)        NOTICE.

         In claiming any indemnification hereunder, the indemnified party shall
promptly provide the indemnifying party with written notice of any claim, which
the indemnified party believes falls within the scope of the foregoing
paragraphs. The indemnified party may, at its expense, assist in the defense if
it so chooses, provided that the indemnifying party shall control such defense,
and all negotiations relative to the settlement of any such claim. Any
settlement intended to bind the indemnified party shall not be final without the
indemnified party's written consent, which shall not be unreasonably withheld.

6.         LIMITATION OF LIABILITY.

         Consultant shall have no liability with respect to Consultant's
obligations under this Agreement or otherwise for consequential, exemplary,
special, incidental, or punitive damages even if Consultant has been advised of
the possibility of such damages. In any event, the liability of Consultant to
Client for any reason and upon any cause of action, regardless of the form in
which the legal or equitable action may be brought, including, without
limitation, any action in tort or contract, shall not exceed 10% of the fee paid
by Client to Consultant for the specific service provided that is in question.

7.         TERMINATION AND RENEWAL.

(a) TERM.

         This Agreement shall become effective on the date appearing next to the
signatures below and terminate one year thereafter. Unless otherwise agreed upon
in writing by Consultant and Client, this Agreement shall not automatically be
renewed beyond its Term.

(b) TERMINATION.

         Either Party may terminate this Agreement on 30 calendar days' written
notice, or if prior to such action, the other party materially breaches any of
its representations, warranties or obligations under this Agreement. Except as
may be otherwise provided in this Agreement, such breach by either party will
result in the other party being responsible to reimburse the non-defaulting
party for all costs incurred directly as a result of the breach of this
Agreement, and shall be subject to such damages as may be allowed by law
including all attorneys' fees and costs of enforcing this Agreement.

(c)        TERMINATION AND PAYMENT.

         Upon any termination or expiration of this Agreement, Client shall pay
all unpaid and outstanding fees through the effective date of termination or
expiration of this Agreement. And upon such termination, Consultant shall
provide and deliver to Client any and all outstanding services due through the
effective date of this Agreement.

                                       21
<PAGE>

8.         MISCELLANEOUS.

(a)        INDEPENDENT CONTRACTOR.

         This Agreement establishes an "independent contractor" relationship
between Consultant and Client.

(b).       RIGHTS CUMULATIVE; WAIVERS.

         The rights of each of the Parties under this Agreement are cumulative.
The rights of each of the Parties hereunder shall not be capable of being waived
or varied other than by an express waiver or variation in writing. Any failure
to exercise or any delay in exercising any of such rights shall not operate as a
waiver or variation of that or any other such right. Any defective or partial
exercise of any of such rights shall not preclude any other or further exercise
of that or any other such right. No act or course of conduct or negotiation on
the part of any party shall in any way preclude such party from exercising any
such right or constitute a suspension or any variation of any such right.

(c)        BENEFIT; SUCCESSORS BOUND.

         This Agreement and the terms, covenants, conditions, provisions,
obligations, undertakings, rights, and benefits hereof, shall be binding upon,
and shall inure to the benefit of, the undersigned parties and their heirs,
executors, administrators, representatives, successors, and permitted assigns.

(d)        ENTIRE AGREEMENT.

         This Agreement contains the entire agreement between the Parties with
respect to the subject matter hereof. There are no promises, agreements,
conditions, undertakings, understandings, warranties, covenants or
representations, oral or written, express or implied, between them with respect
to this Agreement or the matters described in this Agreement, except as set
forth in this Agreement. Any such negotiations, promises, or understandings
shall not be used to interpret or constitute this Agreement.

(e)       ASSIGNMENT.

         Neither this Agreement nor any other benefit to accrue hereunder shall
be assigned or transferred by either Party, either in whole or in part, without
the written consent of the other party, and any purported assignment in
violation hereof shall be void.

(f)         AMENDMENT.

         Only an instrument in writing executed by all the Parties hereto may
amend this Agreement.

                                       22
<PAGE>

(g)        SEVERABILITY.

         Each part of this Agreement is intended to be severable. In the event
that any provision of this Agreement is found by any court or other authority of
competent jurisdiction to be illegal or unenforceable, such provision shall be
severed or modified to the extent necessary to render it enforceable and as so
severed or modified, this Agreement shall continue in full force and effect.

(h)        SECTION HEADINGS.

         The Section headings in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement.

(i)        CONSTRUCTION.

         Unless the context otherwise requires, when used herein, the singular
shall be deemed to include the plural, the plural shall be deemed to include
each of the singular, and pronouns of one or no gender shall be deemed to
include the equivalent pronoun of the other or no gender.

(j)        FURTHER ASSURANCES.

         In addition to the instruments and documents to be made, executed and
delivered pursuant to this Agreement, the parties hereto agree to make, execute
and deliver or cause to be made, executed and delivered, to the requesting party
such other instruments and to take such other actions as the requesting party
may reasonably require to carry out the terms of this Agreement and the
transactions contemplated hereby.

(k)       NOTICES.

         Any notice which is required or desired under this Agreement shall be
given in writing and may be sent by personal delivery or by mail (either a.
United States mail, postage prepaid, or b. Federal Express or similar generally
recognized overnight carrier), addressed as follows (subject to the right to
designate a different address by notice similarly given):

TO CLIENT:

TO CONSULTANT:

First Securities USA, Inc.
ATTN: Shelly Singhal
2361 Campus Drive, Suite 210
Irvine, California 92612

                                       23
<PAGE>

(l)         GOVERNING LAW.

         This Agreement shall be governed by the interpreted in accordance with
the laws of the State of California without reference to its conflicts of laws
rules or principles. Each of the parties consents to the exclusive jurisdiction
of the federal courts of the County of Orange, State of California in connection
with any dispute arising under this Agreement and hereby waives, to the maximum
extent permitted by law, any objection, including any objection based on forum
non coveniens, to the bringing of any such proceeding in such jurisdictions.

(m)       CONSENTS.

         The person signing this Agreement on behalf of each party hereby
represents and warrants that he has the necessary power, consent and authority
to execute and deliver this Agreement on behalf of such party.

(n)        SURVIVAL OF PROVISIONS.

         The provision(s) contained in paragraph(s) 3 of this Agreement shall
 survive the termination of this Agreement.

(o)        EXECUTION IN COUNTERPARTS.

         This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original and all of which together shall constitute one
and the same agreement.

                                       24
<PAGE>

         IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed and have agreed to and accepted the terms herein on the date written
above.

CALYPTE BIOMEDICAL CORPORATION

 /s/RICHARD D. BROUNSTEIN
--------------------------
BY:  Richard D. Brounstein
ITS: EVP and CFO

FIRST SECURITIES USA, INC.

/s/STANLEY BROOKS
-----------------
BY:  Stanley C. Brooks
ITS: President

                                       25
<PAGE>

                                    EXHIBIT A

SERVICES

       Consultant shall perform the following services pursuant to the terms of
this Agreement:

       (1)     General management consulting services, including but not
               limited to:

              (a)      advising on corporate structure;

              (b)      advising on marketing; and

              (c)      developing strategic alliances.

       (2)     Consulting on matters of the board of directors of the Company,
including but not limited to:

               (a)  assisting the board of directors in developing policies and
                    procedures; and

               (b)  assisting the board of directors of the Company in mergers,
                    acquisitions, and other business combinations.

       The above services will be further defined and delineated by the
Company's board of directors from time to time as necessary. However, even
though Consultant is a registered broker/dealer registered with the Securities
and Exchange Commission, Consultant shall not perform any services in connection
with the offer or sale of Company securities, financings, or any services in
connection with securities or which directly or indirectly promote or maintain a
market for Client's securities. Any such services must be provided for under a
separate agreement with separate compensation.

                                       26
<PAGE>

                                    EXHIBIT B

DESIGNATION OF SECURITIES

NAME                                           Number of Warrants
----                                           ------------------

Shelly Singhal                                 7,500,000
                                               ---------

TOTAL                                          7,500,000
                                               ---------

                                       27
<PAGE>

                          NOTICE OF EXERCISE OF WARRANT

The undersigned hereby irrevocably elects to exercise the right, represented by
the Warrant Agreement dated as of ______________, 2003, to purchase (________)
shares of the common stock of _______________, at a price of $_____ per share
and tenders herewith payment in accordance with Section 2 of said Warrant
Agreement.

           CASH:  $             =  (Exercise Price x Exercise Shares)
                    ---------

Payment is being made by:
        _            enclosed check
        _            wire transfer
        _            other
                           ---------------------------------------

            CASHLESS EXERCISE

Net number of Warrant Shares to be issued to Holder: ____________ Please deliver
the stock certificate to:

Dated:
       ------------------------------------------

 ------------------------------------------------
            [Name of Holder]

By:
   ----------------------------------------------

                                       28
<PAGE>

                                                                  Exhibit 4.1(e)
                              CONSULTING AGREEMENT

May 10, 2003
                         RE: CONTRACT FOR EDGAR SERVICES

CALYPTE BIOMEDICAL CORP
Attention: Mr. Dotson

Dear Mr. Dotson,

            As per your conversation with Shai Stern, I would like to take this
opportunity to introduce you to Vintage Filings, LLC as a method of saving your
public company the typical costs associated with EDGAR filings and SEC reporting
requirements.

            We have reviewed your Company's prior filings and we are prepared to
offer the following proposal, which will cover your Company's EDGAR filing fees
for a period of ONE (1) year from the date hereof.

             We will provide EDGAR services to your company to allow your
Company to file an unlimited number of filings which shall include, but not be
limited to Forms 3, 4, 5 13Gs, 13Ds, S-8, 8K, 10Q, 10K, S-3, SB-2, S-2, etc....

                    -    all text and tabular pages

                    -    all amended proofs and changed pages

                    -    all test filing and real time live filing fees

                    -    all email distributions of PDF Edgar proofs

                    -    all facsimile transmissions of Edgar proofs

                    -    all 12b25 and NT-10K extension forms

                    -    SEC filing of a Form ID

 As compensation for the above stated unlimited services, the Company shall
issue an aggregate $45,000 of the Company's common stock to each of the
individual partners of Vintage Filings, LLC (Seth Farbman and Shai Stern) to be
based on the closing price of the Company's common stock on May 9, 2003, $.02
per share.

Such shares, totaling 2,500,000 must be registered on a Form S-8 registration
statement prior to May 25, 2003.

                                       29
<PAGE>

            We are anxious for CALYPTE BIOMEDICAL CORP to join our other
satisfied public company clients who are saving significant fees as compared to
their previous EDGARizing bills from their law firms and financial printers. As
this is our ONLY line of business, we at Vintage Filings, focus on you, and your
total satisfaction.

            We would appreciate the opportunity to develop a long-term
relationship and be of service to you and your Company. Please feel free to
contact us at (212) 953-4901 or via email at efilings@vfilings.com. Please
confirm agreement by signing and faxing to 516-569-6084.

                                         Best wishes,

                                        /s/Seth A. Farbman, ESQ.
                                        -----------------------
                                        Seth A. Farbman, Esq.
                                        Co-Chairman and President

Agreed and Accepted:

/s/Jerry Dotson
---------------
Jerry Dotson
Calypte Biomedical Corporation
Director of Finance

                                       30

<PAGE>

                                    EXHIBIT A

DESIGNATION OF SECURITIES

Such shares shall be issued as follows:

     -     1,125,000 to be registered in the name of
           Shai Z. Stern

     -     1,125,000 to be registered in the name of
           Seth Farbman

                                       31
<PAGE>

                                                                  Exhibit 4.1(f)

                       Amendment 1 to Consulting Agreement
         Between Calypte Biomedical Corporation and Lone Star Consulting

This Agreement amends and modifies the Consulting Agreement between Calypte
Biomedical Corporation ("Calypte" or the "Company") and Lone Star Consulting
("Consultant") and is effective as of May 15, 2003.

Whereas, the Company desires to change the payment terms on the contract for
certain consulting services performed in 2003, as well as future services, and
Consultant is agreeable to such modification.

Now therefore, in consideration of the premises and mutual promises set forth
herein, the parties hereto agree as follows:

1.       Pursuant to Section 4 of the January 8, 2003 agreement, EXPENSES AND
         PAYMENT, there is a monthly payment of $3,000 in cash and $4,500 in
         stock. The Consultant may, at his option, accept the full $7,500 in
         stock each month.

2.       In consideration for this modification, the Company agrees to register
         an additional 750,000 shares with the upcoming S-8 filing during May
         2003, and reserves the right to register additional shares as
         necessary.

3.       All other terms and conditions of the existing Consultant Agreements
         remain unchanged.

Consultant:                                 Calypte Biomedical Corporation

/S/ Stephen Hofmann                         By:  /S/ Richard Brounstein
-------------------                              ----------------------
Stephen Hofmann                             Richard D. Brounstein
                                              Executive Vice President, CFO

                                       32
<PAGE>

                                                                  Exhibit 4.1(g)

                     AMENDMENT NO. 1 TO CONSULTING AGREEMENT
                     Between Calypte Biomedical Corporation
                              and Leo van den Herik

This Agreement amends and modifies the Amended Consulting Agreement between
Calypte Biomedical Corporation ("Calypte" or the "Company") and Leo van den
Herik ("Consultant") dated April 4, 2003 and is effective as of May 15, 2003.

Whereas, the Company desires to extend the time period during which Consultant
will provide services to the Company pursuant to the above referenced Consulting
Agreement and Consultant is agreeable to extending the time for providing such
services.

Now therefore, in consideration of the premises and mutual promises set forth
herein, the parties hereto agree as follows:

     1.  The term of Consultant's Consulting Agreement shall be extended and, by
         virtue of this Amendment, shall terminate on October 31, 2003 rather
         than August 31, 2003.

     2.  In consideration for the extension of the services to be performed by
         Consultant, the Company will immediately grant to Consultant a warrant
         to purchase 10,000,000 shares of the registered common stock of the
         Company at $0.01 per share, or an aggregate purchase price of $100,000.
         All compensation pursuant to the Consulting Agreement and this
         Amendment is fully earned upon execution of this amendment. The warrant
         is immediately exercisable upon grant and will expire on August 15,
         2003.

     3.  All other terms and conditions of the Amended Consultant Agreement
         dated April 4, 2003 remain unchanged.

         Consultant:                                  Company:
         Leo van den Herik                   Calypte Biomedical Corporation

         /s/ Leo van den Herik                    /s/ Richard Brounstein
         ______________________             By:______________________
                                                 Richard Brounstein
                                                 Executive Vice President & CFO

                                       33
<PAGE>

                                                                  Exhibit 4.1(h)

                          CONSULTING SERVICES AGREEMENT

         This Consulting Services Agreement ("Agreement"), dated May 19, 2003,
is made by and between Newport Capital ("Consultant"), whose address is 4695
MacArthur Court, 11th Floor, Newport Beach, CA 92660, and Calypte Biomedical
Corporation ("Client"), having its principal place of business at 1265 Harbor
Bay Parkway, Alameda, CA 94502 (collectively, the "Parties").

         WHEREAS, Client is a publicly held corporation with its common stock
trading on the Over the Counter Bulletin Board under the ticker symbol "CALY,"
and desires to further develop its business and customers;

          WHEREAS, Consultant has extensive background in the area of business
consulting and management advisory services; and

         WHEREAS, Client desires to engage Consultant to provide information,
evaluation and consulting services to Client in Consultant's area of knowledge
and expertise on the terms and subject to the conditions set forth herein.

         NOW, THEREFORE, in consideration for those services Consultant provides
to Client, the Parties agree as follows:

         1.         SERVICES OF CONSULTANT.

         Consultant agrees to perform for Client all necessary services required
in providing general business consulting and management advisory services for
Client as more specifically set forth in Exhibit A attached hereto. The services
to be provided by Consultant will not be in connection with the offer or sale of
securities in a capital-raising transaction, and will not directly or indirectly
promote or maintain a market for Client's securities. Individuals employed by
Consultant under the primary supervision of Shelly Singhal will provide the
services.

2.         CONSIDERATION.

         Client agrees to pay Consultant, as its fee and as consideration for
services provided, a warrant to purchase a total of 7,500,000 shares of free
trading common stock in Client, exercisable as follows:

              ?         7,500,000 shares exercisable at   $0.010  per share
                         ---------                         -----

         The shares underlying this warrant have been registered on a Form S-8
Registration Statement filed with and declared effective by the U.S. Securities
and Exchange Commission. The warrant and the underlying shares, upon issuance,
shall be issued in the names of individual principals of the Consultant as set
forth on Exhibit B attached hereto.

                                       34
<PAGE>

3.         CONFIDENTIALITY.

         Each Party agrees that during the course of this Agreement, information
that is confidential or of a proprietary nature may be disclosed to the other
party, including, but not limited to, product and business plans, software,
technical processes and formulas, source codes, product designs, sales, costs
and other unpublished financial information, advertising revenues, usage rates,
advertising relationships, projections, and marketing data ("Confidential
Information"). Confidential Information shall not include information that the
receiving party can demonstrate (a) is, as of the time of its disclosure, or
thereafter becomes part of the public domain through a source other than the
receiving party, (b) was known to the receiving party as of the time of its
disclosure, (c) is independently developed by the receiving party, or (d) is
subsequently learned from a third party not under a confidentiality obligation
to the providing party.

4.         LATE PAYMENT.

         Client shall pay to Consultant all fees within 15 days of the due date.
Failure of Client to finally pay any fees within 15 days after the applicable
due date shall be deemed a material breach of this Agreement, justifying
suspension of the performance of the "Services" provided by Consultant, will be
sufficient cause for immediate termination of this Agreement by Consultant. Any
such suspension will in no way relieve Client from payment of fees, and, in the
event of collection enforcement, Client shall be liable for any costs associated
with such collection, including, but not limited to, legal costs, attorneys'
fees, courts costs, and collection agency fees.

5.         INDEMNIFICATION.

(A)        CLIENT.

         Client agrees to indemnify, defend, and hold harmless Consultant, its
directors, officers, employees, attorneys, and agents, and to defend any action
brought against said parties with respect to any and all claims, demands, causes
of action, debts or liabilities, including reasonable attorneys' fees, arising
out of work performed under this Agreement, including breach of Client of this
Agreement.

(B)        CONSULTANT.

 Consultant agrees to indemnify, defend, and shall hold harmless Client, its
directors, officers, employees, attorneys, and agents, and defend any action
brought against same with respect to any claim, demand, cause of action, debt or
liability, including reasonable attorneys' fees, to the extent that such an
action arises out of the gross negligence or willful misconduct of Consultant.

                                       35
<PAGE>

(C)        NOTICE.

         In claiming any indemnification hereunder, the indemnified party shall
promptly provide the indemnifying party with written notice of any claim, which
the indemnified party believes falls within the scope of the foregoing
paragraphs. The indemnified party may, at its expense, assist in the defense if
it so chooses, provided that the indemnifying party shall control such defense,
and all negotiations relative to the settlement of any such claim. Any
settlement intended to bind the indemnified party shall not be final without the
indemnified party's written consent, which shall not be unreasonably withheld.

6.         LIMITATION OF LIABILITY.

         Consultant shall have no liability with respect to Consultant's
obligations under this Agreement or otherwise for consequential, exemplary,
special, incidental, or punitive damages even if Consultant has been advised of
the possibility of such damages. In any event, the liability of Consultant to
Client for any reason and upon any cause of action, regardless of the form in
which the legal or equitable action may be brought, including, without
limitation, any action in tort or contract, shall not exceed 10% of the fee paid
by Client to Consultant for the specific service provided that is in question.

7.         TERMINATION AND RENEWAL.

(A) TERM.

         This Agreement shall become effective on the date appearing next to the
signatures below and terminate one year thereafter. Unless otherwise agreed upon
in writing by Consultant and Client, this Agreement shall not automatically be
renewed beyond its Term.

(B) TERMINATION.

         Either Party may terminate this Agreement on 30 calendar days' written
notice, or if prior to such action, the other party materially breaches any of
its representations, warranties or obligations under this Agreement. Except as
may be otherwise provided in this Agreement, such breach by either party will
result in the other party being responsible to reimburse the non-defaulting
party for all costs incurred directly as a result of the breach of this
Agreement, and shall be subject to such damages as may be allowed by law
including all attorneys' fees and costs of enforcing this Agreement.

(C)        TERMINATION AND PAYMENT.

         Upon any termination or expiration of this Agreement, Client shall pay
all unpaid and outstanding fees through the effective date of termination or
expiration of this Agreement. And upon such termination, Consultant shall
provide and deliver to Client any and all outstanding services due through the
effective date of this Agreement.

                                       36
<PAGE>

8.         MISCELLANEOUS.

(A)        INDEPENDENT CONTRACTOR.

         This Agreement establishes an "independent contractor" relationship
between Consultant and Client.

(B).       RIGHTS CUMULATIVE; WAIVERS.

         The rights of each of the Parties under this Agreement are cumulative.
The rights of each of the Parties hereunder shall not be capable of being waived
or varied other than by an express waiver or variation in writing. Any failure
to exercise or any delay in exercising any of such rights shall not operate as a
waiver or variation of that or any other such right. Any defective or partial
exercise of any of such rights shall not preclude any other or further exercise
of that or any other such right. No act or course of conduct or negotiation on
the part of any party shall in any way preclude such party from exercising any
such right or constitute a suspension or any variation of any such right.

(C)        BENEFIT; SUCCESSORS BOUND.

         This Agreement and the terms, covenants, conditions, provisions,
obligations, undertakings, rights, and benefits hereof, shall be binding upon,
and shall inure to the benefit of, the undersigned parties and their heirs,
executors, administrators, representatives, successors, and permitted assigns.

(D)        ENTIRE AGREEMENT.

         This Agreement contains the entire agreement between the Parties with
respect to the subject matter hereof. There are no promises, agreements,
conditions, undertakings, understandings, warranties, covenants or
representations, oral or written, express or implied, between them with respect
to this Agreement or the matters described in this Agreement, except as set
forth in this Agreement. Any such negotiations, promises, or understandings
shall not be used to interpret or constitute this Agreement.

(E)        ASSIGNMENT.

         Neither this Agreement nor any other benefit to accrue hereunder shall
be assigned or transferred by either Party, either in whole or in part, without
the written consent of the other party, and any purported assignment in
violation hereof shall be void.

(F)        AMENDMENT.

         Only an instrument in writing executed by all the Parties hereto may
amend this Agreement.

                                       37
<PAGE>

(G)         SEVERABILITY.

         Each part of this Agreement is intended to be severable. In the event
that any provision of this Agreement is found by any court or other authority of
competent jurisdiction to be illegal or unenforceable, such provision shall be
severed or modified to the extent necessary to render it enforceable and as so
severed or modified, this Agreement shall continue in full force and effect.

(H)        SECTION HEADINGS.

         The Section headings in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement.

(I)        CONSTRUCTION.

         Unless the context otherwise requires, when used herein, the singular
shall be deemed to include the plural, the plural shall be deemed to include
each of the singular, and pronouns of one or no gender shall be deemed to
include the equivalent pronoun of the other or no gender.

(J)         FURTHER ASSURANCES.

         In addition to the instruments and documents to be made, executed and
delivered pursuant to this Agreement, the parties hereto agree to make, execute
and deliver or cause to be made, executed and delivered, to the requesting party
such other instruments and to take such other actions as the requesting party
may reasonably require to carry out the terms of this Agreement and the
transactions contemplated hereby.

(K)       NOTICES.

         Any notice which is required or desired under this Agreement shall be
given in writing and may be sent by personal delivery or by mail (either a.
United States mail, postage prepaid, or b. Federal Express or similar generally
recognized overnight carrier), addressed as follows (subject to the right to
designate a different address by notice similarly given):

TO CLIENT:

TO CONSULTANT:

Newport Capital
ATTN: John Vasquez
4695 MacArthur Court, 11th Floor
Newport Beach, California 92660

                                       38
<PAGE>

(L)         GOVERNING LAW.

         This Agreement shall be governed by the interpreted in accordance with
the laws of the State of California without reference to its conflicts of laws
rules or principles. Each of the parties consents to the exclusive jurisdiction
of the federal courts of the County of Orange, State of California in connection
with any dispute arising under this Agreement and hereby waives, to the maximum
extent permitted by law, any objection, including any objection based on forum
non coveniens, to the bringing of any such proceeding in such jurisdictions.

(M)       CONSENTS.

         The person signing this Agreement on behalf of each party hereby
represents and warrants that he has the necessary power, consent and authority
to execute and deliver this Agreement on behalf of such party.

(N)       SURVIVAL OF PROVISIONS.

         The provision(s) contained in paragraph(s) 3 of this Agreement shall

survive the termination of this Agreement.

(O)        EXECUTION IN COUNTERPARTS.

         This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original and all of which together shall constitute one
and the same agreement.

                                       39
<PAGE>

         IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed and have agreed to and accepted the terms herein on the date written
above.

Calypte Biomedical Corporation

/S/ Richard D. Brounstein
--------------------------
BY: Richard D. Brounstein
ITS: EVP and CFO

NEWPORT CAPITAL

/S/ John Vasquez
-------------------
BY: John Vasquez
ITS:

                                       40
<PAGE>

                                    EXHIBIT A

SERVICES

       Consultant shall perform the following services pursuant to the terms of
this Agreement:
       (1)     General management consulting services, including but not
               limited to:

              (a)      advising on corporate structure;

              (b)      advising on marketing; and

              (c)      developing strategic alliances.

       (2)     Consulting on matters of the board of directors of the Company,
including but not limited to:

               (a)  assisting the board of directors in developing policies and
                    procedures; and

               (b)  assisting the board of directors of the Company in mergers,
                    acquisitions, and other business combinations

       The above services will be further defined and delineated by the
Company's board of directors from time to time as necessary. However, even
though Consultant is a registered broker/dealer registered with the Securities
and Exchange Commission, Consultant shall not perform any services in connection
with the offer or sale of Company securities, financings, or any services in
connection with securities or which directly or indirectly promote or maintain a
market for Client's securities. Any such services must be provided for under a
separate agreement with separate compensation.

                                       41
<PAGE>

                                    EXHIBIT B

DESIGNATION OF SECURITIES

NAME                                                     NUMBER OF WARRANTS
----                                                     ------------------

John Vasquez                                             7,500,000
                                                         ---------

TOTAL                                                    7,500,000
                                                         ---------

                                       42
<PAGE>

                          NOTICE OF EXERCISE OF WARRANT

The undersigned hereby irrevocably elects to exercise the right, represented by
the Warrant Agreement dated as of ______________, 2003, to purchase (________)
shares of the common stock of _______________, at a price of $_____ per share
and tenders herewith payment in accordance with Section 2 of said Warrant
Agreement.

           CASH:  $                      =  (Exercise Price x Exercise Shares)
                    ------------------

Payment is being made by:
        _            enclosed check
        _            wire transfer
        _            other
                           ---------------------------------------

            CASHLESS EXERCISE

Net number of Warrant Shares to be issued to Holder: ____________ Please deliver
the stock certificate to:

Dated:
       --------------------------------

 --------------------------------------

            [Name of Holder]

By:
   ------------------------------------

                                       43
<PAGE>

                                                                  Exhibit 4.1(i)

                     Amendment No. 1 to Consulting Agreement
                     Between Calypte Biomedical Corporation
                          and Fox Communications Group

This Agreement amends and modifies the Consulting Agreement between Calypte
Biomedical Corporation ("Calypte" or the "Company") and Fox Communications Group
("Consultant") dated June 5, 2002 and is effective as of May 19, 2003.

Whereas, the Company desires to extend the time period during which Consultant
will provide services to the Company pursuant to the above referenced Consulting
Agreement and Consultant is agreeable to extending the time for providing such
services.

Now therefore, in consideration of the premises and mutual promises set forth
herein, the parties hereto agree as follows:

     1.  The term of Consultant's Consulting Agreement shall be extended and, by
         virtue of this Amendment, shall be from the date of this amendment and
         terminate on June 30, 2003.

     2.  In consideration for the extension of the services to be performed by
         Consultant, the Company will immediately grant Consultant 1,000,000
         shares of the common stock. All compensation pursuant to the Consulting
         Agreement and this Amendment is fully earned upon execution of this
         amendment.

     3.  The Company agrees to include these shares in an S-8 Registration
         Statement filed during May 2003. All prior services are agreed to be
         earned as previously paid.

     4.  All other terms and conditions of the Consultant Agreement dated June
         5, 2002 remain unchanged.

Consultant:                                Calypte Biomedical Corporation

 /S/ Morris Fox                             By:   /S/ Richard D. Brounstein
----------------------                            -------------------------
Morris Fox                                        Richard D. Brounstein
                                                  Executive Vice President, CFO

                                       44
<PAGE>

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