Exhibit 10.44

                                   INDENTURE

     THIS INDENTURE (this "Indenture") is made and entered into as of the first
day  of  October,  2002  by and between Molecular Diagnostics, Inc., a Delaware
corporation (hereinafter called  the "Company"), having its principal office at
414 N. Orleans Street, Chicago, Illinois  60610, and each of the holders of the
Company's 12% Convertible Secured Promissory Notes hereinafter authorized (said
Notes  being hereinafter referred to as the  "Notes"  and  said  holders  being
hereinafter referred to as the "Noteholders").

      In  consideration  of the acceptance by the Noteholders of the Notes, the
Company hereby covenants and agrees with the Noteholders as follows:

      1.    Creation  and  Authorization   of   Notes.     The  Company  hereby
authorizes the issuance of the Notes, in aggregate principal  amount  of  up to
$4,000,000 (the "Offering").  Each Note shall:

      a.    be substantially in the form attached hereto as Exhibit A;

      b.    be  issuable  for  cash  and/or  the surrender by the Noteholder of
outstanding obligations of the Company to the Noteholder;

      c.    mature on July 31, 2003 (the "Maturity Date");

      d.    bear interest payable in kind on the  Maturity  Date in the form of
shares of common stock of the Company ("Common Stock"), valued  as  provided in
the Note (such shares being referred to as "Interest Shares");

      e.    be convertible as to principal into shares of Common Stock  at  the
times  and as valued in the Note  (such shares being referred to as "Conversion
Shares");

      f.    be  subject  to  optional prepayment by the Company at any time, in
whole or in part; provided that  in  the  event  of any prepayment, the Company
shall prepay all Notes outstanding under this Indenture ratably;

      g.    be subject to either automatic conversion  or  mandatory prepayment
(as  set  forth  in  the  Note)  upon  the  closing  of  a  Qualified Financing
Transaction (as defined in the Note);

      h.    be  secured  by  a security interest in the Company's  intellectual
property subject to the terms  and  conditions of the Security Agreement in the
Form of Exhibit B (the "Security Agreement"),  which  shall  be allocated among
the  Noteholders  in  proportion  to  the principal amount of Notes  they  hold
pursuant to the Collateral Sharing Agreement  in  the  form  of  Exhibit C (the
"Collateral Sharing Agreement");

      i.    be registered on the books of the Company by the Secretary  of  the
Company in the name of the Noteholders;

      j.    be executed on behalf of the Company by the manual signature of the
Chief Executive Officer of the Company;

      k.    be  issued  in reliance on one or more exemptions from registration
under the Securities Act  of  1933,  as  amended  (the  "Securities  Act")  and
applicable  state  securities laws and shall contain a legend to that effect as
set forth on each Note; and

      l.    be issued  in accordance with the terms of this Indenture, pursuant
to the exemption from qualification  under  the Trust Indenture Act of 1939 set
forth in Section 304(a)(9) of said Act.

      EACH NOTEHOLDER, BY HIS ACCEPTANCE OF HIS NOTE, AND ANY TRANSFEREE OF HIS
NOTE, WITHOUT FURTHER ACTION, SHALL BE DEEMED  AUTOMATICALLY  TO  HAVE BECOME A
PARTY  TO,  AND TO HAVE AGREED TO BE BOUND BY, THE SECURITY AGREEMENT  AND  THE
COLLATERAL SHARING  AGREEMENT  IN  THE  SAME  AS  IF  THE NOTEHOLDER HAD BEEN A
SIGNATORY THERETO.

      2.    Warrants.  In addition to the Notes, the Company  shall,  upon  the
closing  of  its  PIPE  Financing  (as  defined below), issue each Noteholder a
warrant substantially in the form of Exhibit  D  hereto to purchase a number of
shares of Common Stock equal to one share of Common  Stock for each 4 shares of
common  stock  into which the principal amount of the Note  is  convertible  (a
"Warrant"), having  an  exercise  price of: [$0.15 per share (for the first One
Million Dollars ($1,000,000) principal amount of cash subscriptions received by
the Company)] or [$0.20 per share (for  subscriptions  received after the first
One  Million Dollars ($1,000,000) principal amount of subscriptions  have  been
received  by  the Company)] (as set forth and subject to adjustment as provided
in the Warrant)  and  a  term  expiring five years from the date of issue.  The
shares of Common Stock issuable  upon  exercise  of Warrants are referred to as
"Warrant Shares." For purposes of this Indenture,  the  term  "PIPE  Financing"
means  an  Six  Million  Dollar ($6,000,000) private placement of the Company's
equity securities to occur  after the Company has completed the sale of its 12%
Convertible Secured Promissory  Notes  in  the  aggregate  principal  amount of
approximately Four Million Dollars (U.S. $4,000,000).

      3.    Securities  Act  Compliance.   The  Interest Shares, the Conversion
Shares, the Warrants and the Warrant Shares shall, like the Notes, be issued in
accordance with one or more exemptions from registration  under  the Securities
Act and applicable state securities laws and shall bear a legend to such effect
comparable to the legend borne by the Notes.

      4.    Issuance  of  Conversion  Shares.   Any  Noteholders who desire  to
convert his Note, in whole or in part, into Conversion Shares shall deliver his
Note to the Company, together with a properly completed  Notice  of  Conversion
whereupon:

      a.    the  Company  shall  cause  its  transfer  agent  to deliver to the
Noteholder  one  or  more  certificates representing the applicable  number  of
Conversion Shares; and

      b.    if the Noteholder  is  converting  less  than  the entire principal
amount of his Note:

            i.    if the conversion occurs prior to the Maturity Date, issue to
      the Noteholder a replacement Note representing the unconverted  principal
      amount of the Note; and

            ii.   if  the  conversion  occurs on the Maturity Date, pay to  the
      Noteholder an amount of cash equal  to  the  unconverted principal amount
      of, and the accrued interest on, the Note.

      5.    Conclusive Effect of Registry.   The ownership of the Notes and the
address for payment thereof shall be proved by reference  to  the  registry  of
Notes  maintained by the Secretary of the Company and, prior to due presentment
for registration  of transfer, or receipt of notification of change of address,
the Company may treat  the  person  in  whose name any Note shall be registered
upon the books of the Company as the absolute  owner  thereof,  and the address
appearing  in  the  books  of  the Company as the appropriate address  for  the
purpose  of  paying  principal  of and  interest  on  the  Notes,  for  issuing
Conversion Shares, and for all other  purposes.    All  payments so made to any
such registered Noteholder at such address shall be valid and, to the extent of
the amount or amounts so paid, effectual to satisfy and discharge the liability
of the Company for monies payable on any such Note.

      6.    Changes in Registered Address.   Any Noteholder who shall desire to
change  the address for payment of principal of and interest  on  his  Note  or
delivery  of  Conversion  Shares may notify the Secretary of the Company of the
changed address.

      7.    Transfer of Notes.    Any  Noteholder desiring to sell, transfer or
otherwise distribute his Note shall present  the  Note  to the Secretary of the
Company  for  transfer,  accompanying  the  Note  with either (a)  evidence  of
compliance  with  the  registration  provisions  of  the   Securities  Act  and
applicable  state  securities  laws,  or  (b) an opinion of counsel  reasonably
satisfactory to the Company to the effect that  such proposed sale, transfer or
other distribution may be made in reliance upon an  applicable  exemption  from
the  provisions  of  the  Securities  Act and applicable state securities laws.
Promptly upon receipt of the Note and such documentation, the Company shall, if
such documentation is satisfactory in form and substance to the Company and its
counsel, cancel the Note and issue a new  Note  registered  in  the name of the
transferee.  The determination of the Company and its counsel with  respect  to
any proposed transfer shall be final and binding upon the Noteholder.

      8.    Transfer  of  Warrants  and  Warrant  Shares.  Each Warrant and the
Warrant Shares shall be subject to the restrictions  on  transfer  set forth in
Section 8.1 and 11 of the Warrant.

      9.    Transfer of Interest Shares and Conversion Shares.   Any  holder of
Interest  Shares  or  Conversion Shares desiring to sell, transfer or otherwise
distribute such shares  shall  present  the  certificate(s)  representing  such
shares  to  the  transfer  agent  of the Company for transfer, accompanying the
certificate(s) with either (a) evidence  of  compliance  with  the registration
provisions of the Securities Act and applicable state securities  laws,  or (b)
an opinion of counsel reasonably satisfactory to the Company to the effect that
such proposed sale, transfer or other distribution may be made in reliance upon
an  applicable  exemption  from  the  provisions  of  the  Securities  Act  and
applicable  state  securities laws.  Promptly upon receipt of notification from
the transfer agent that  the  certificate(s)  have  been  delivered  to it, the
Company  shall, if such documentation is satisfactory in form and substance  to
the Company  and its counsel, direct the transfer agent to effect the requested
transfer.  The determination of the Company and its counsel with respect to any
proposed transfer shall be final and binding upon the holder of the shares.

      10.   Registration Rights.  The Interest Shares, Conversion Shares and
Warrant Shares (collectively, the "Investment Shares") shall be subject to the
registration rights set forth in this Section 10.

      a.    Piggy-Back Registration Rights.  If, at any time prior to the fifth
anniversary of  the  closing  of  the  PIPE  Financing,  the  Company  files  a
registration  statement  with  the U.S. Securities and Exchange Commission (the
"Commission") pursuant to the Securities  Act,  or  pursuant  to  any other act
passed after the date of this Indenture, which filing provides for  the sale of
securities  by  the  Company  to  the  public, or files a Regulation A offering
statement under the Securities Act, the  Company shall offer to the Noteholders
and the holders of any Investment Shares the opportunity to register or qualify
the Investment Shares at the Company's sole  expense, regardless of whether the
Noteholders or holders of Investment Shares or both may have previously availed
themselves  of any of the registration rights described  in  this  Section  10;
provided, however, that in the case of a Regulation A offering, the opportunity
to qualify shall  be  limited  to  the  amount of the available exemption after
taking  into  account  the securities that the   Company  wishes  to  qualify.
Notwithstanding anything  to  the  contrary,  this  Section  10  shall  not  be
applicable  to  a registration statement registering securities issued pursuant
to an employee benefit  plan  or  as  to  a  transaction  subject  to  Rule 145
promulgated  under  the  Securities  Act  or  for which a form S-4 registration
statement could be used.

      The Company shall deliver written notice  to  the  Noteholders and to any
holders  of  the  Investment  Shares  of its intention to file  a  registration
statement or Regulation A offering statement  under the Securities Act at least
60  days  prior  to  the  filing  of such registration  statement  or  offering
statement, and the Noteholders and  holders  of Investment Shares shall have 30
days thereafter to request in writing that the  Company register or qualify the
Investment Shares in accordance with this Section  10.   Upon the delivery of a
written request within the specified time, the Company shall  be  obligated  to
include  in  its  contemplated registration statement or offering statement all
information necessary or advisable to register or qualify the Investment Shares
for a public offering,  if  the Company does file the contemplated registration
statement or offering statement;  provided,  however, that neither the delivery
of the notice by the Company nor the delivery  of  a request by a Noteholder or
holder of Investment Shares shall in any way obligate  the  Company  to  file a
registration statement or offering statement.  Furthermore, notwithstanding the
filing  of a registration statement or offering statement, the Company may,  at
any time  prior  to  the  effective  date  thereof,  determine not to offer the
securities to which the registration statement or offering  statement  relates,
other  than  the  Investment  Shares.  Notwithstanding the foregoing, if, as  a
qualification of any offering in any state or jurisdiction in which the Company
(by vote of its Board of Directors) or any underwriter determines in good faith
that it wishes to offer securities registered  in  the offering, it is required
that offering expenses be allocated in a manner different  than  as provided in
this  Section  10,  then  the offering expenses shall be allocated in  whatever
manner is most nearly in compliance with the provisions of this Section 10.

      If  the  registration for  which  the  Company  gives  notice  is  for  a
registered public  offering  involving  an  underwriting,  the Company shall so
advise as part of its written notice to Noteholders and holders  of  Investment
Shares  given  pursuant  to  this  Section.   In  that  event, the right of any
Noteholder  or  holder of Investment Shares to registration  pursuant  to  this
Section  10 shall  be  conditioned  upon  the  holder's  participation  in  the
underwriting,  and the inclusion of Investment Shares in the underwriting shall
be limited to the  extent provided herein.  All holders proposing to distribute
their Investment Shares  through  the  underwriting  shall  (together  with the
Company and the other holders who desire to distribute their shares through the
underwriting)  enter into an underwriting agreement in customary form with  the
managing underwriter  selected  by  the  Company.   Notwithstanding  any  other
provision  of  this  Section,  if  the  managing  underwriter  determines  that
marketing  factors  require  a  limitation  of  the  number  of  shares  to  be
underwritten, the underwriter may limit the amount of securities to be included
in  the  registration  and  underwriting  by  the holders of Company securities
exercising  "piggy-back"  registration rights (including  the  Noteholders  and
holders of Investment Shares).   The  Company  shall so advise all holders, and
the number of shares that may be included in the  registration and underwriting
shall  be  allocated among all of the holders desiring  to  have  their  shares
registered,  in proportion, as nearly as practicable, to the respective amounts
of shares requested  by  each  holder  to  be  included  in  the  registration,
provided,  however,  that  no  holder  of  shares  or  other  securities to  be
registered (other than one exercising a demand registration right)  shall  have
superior  rights  with respect to inclusion in a registration than those of the
Noteholders and holders  of  Investment  Shares,  and  if  any party is granted
superior rights hereafter the Noteholder and each holder of  Investment  Shares
shall  be deemed to be automatically granted similar rights.  The Company shall
advise all  Noteholders  and  holders of Investment Shares if any limitation in
accordance with this Section is  necessary  and the number or Investment Shares
that may be included in the registration.  Any securities excluded or withdrawn
from the underwriting shall not be transferred  prior  to  one  hundred  twenty
(120)  days  after  the  effective  date of the registration statement relating
thereto, or any shorter period of time the underwriters may require.

      The Company shall comply with the  requirements of this Section 10 at its
own  expense.   That expense shall include,  but  not  be  limited  to,  legal,
accounting, consulting,  printing,  federal  and  state filing fees, NASD fees,
out-of-pocket  expenses  incurred  by  counsel,  accountants   and  consultants
retained  by  the Company, and miscellaneous expenses directly related  to  the
registration statement  or  offering statement and the offering.  However, this
expense shall not include the portion of any underwriting commissions, transfer
taxes and the underwriter's accountable  and  nonaccountable expense allowances
attributable  to  the offer and sale of the Investment  Shares,  all  of  which
expenses shall be borne by the holders of Investment Shares that are registered
or qualified.

      b.    Inclusion  of Information.    If the Company registers or qualifies
the Investment Shares in  accordance  with  this  Section 10, the Company shall
include  in  the registration statement or qualification,  and  the  prospectus
included therein,  all  information  and  materials  necessary  or advisable to
comply with the applicable statutes and regulations so as to permit  the public
sale of the Investment Shares.

      c.    Condition  of  Company's  Obligations.   As  to  each  registration
statement  or offering statement, the Company's obligations contained  in  this
Section 10 shall be conditioned upon a timely receipt by the Company in writing
of the following:

                  (i)   Information  as to the terms of the contemplated public
      offering furnished by and on behalf  of  each  Noteholder  or  holder  of
      Investment  Shares  intending  to  make  a  public  distribution  of  the
      Investment Shares; and

                 (ii)  Any other information the Company may reasonably require
      from the Noteholders  or holders of Investment Shares, or any underwriter
      for any of them, for inclusion  in the registration statement or offering
      statement.

        d.  Additional Requirements.  In  each  instance  in  which the Company
shall take any action to register or qualify the Investment Shares  pursuant to
this Section 10, the Company shall do the following:

                  (i)  supply the Noteholders and holders of Investment  Shares
      that are being registered or qualified, two (2) manually signed copies of
      each registration  statement  or  offering  statement, and all amendments
      thereto, and a reasonable number of copies of  the  preliminary, final or
      other  prospectus or offering circular, all prepared in  conformity  with
      the requirements  of  the  Securities  Act  and the rules and regulations
      promulgated thereunder, and any other documents  that the Noteholders and
      holders of Investment Shares may reasonably request;

                (ii)  cooperate with respect to (A) all  necessary or advisable
      actions  relating to the preparation and the filing of  any  registration
      statements  or  offering  statements, and all amendments thereto, arising
      from the provisions of this  Section  10,  (B)  all reasonable efforts to
      establish an exemption from the provisions of the  Securities  Act or any
      other  federal  or  state  securities  statutes,  (C)  all  necessary  or
      advisable  actions  to  register  or qualify the public offering at issue
      pursuant  to  federal  securities  statutes  and  the  state  "blue  sky"
      securities statutes of each jurisdiction  that the Noteholders or holders
      of  Investment  Shares  shall  reasonably  request,  and  (D)  all  other
      necessary or advisable actions to enable the holders of Investment Shares
      to  complete the contemplated disposition of  their  securities  in  each
      reasonably requested jurisdiction; and

                (iii)   keep all registration statements or offering statements
      to which this Section  10  applies, and all amendments thereto, effective
      under the Securities Act for  a  period  of at least 8 months after their
      initial effective date and cooperate with  respect  to  all  necessary or
      advisable  actions to permit the completion of the public sale  or  other
      disposition  of  the  securities  subject  to a registration statement or
      offering statement.

      e.    Reciprocal Indemnification Agreements.   In  each instance in which
the Company shall take any action to register or qualify the  Investment Shares
pursuant  to  this Section 10, prior to the effective date of any  registration
statement or offering  statement,  the Company and each Noteholder or holder of
Investment Shares being registered or  qualified  shall  enter  into reciprocal
indemnification   agreements,   in  the  form  customarily  used  by  reputable
investment  bankers  with  respect to  public  offerings  of  securities.   The
indemnification agreements also  shall  contain an agreement by the Noteholders
and holders of Investment Shares at issue  to  indemnify  and hold harmless the
Company,  its  officers  and  directors  from and against any and  all  losses,
claims, damages and liabilities, including,  but  not  limited to, all expenses
reasonably  incurred  in investigating, preparing, defending  or  settling  any
claim, directly resulting  from  any  untrue  statements  of material facts, or
omissions  to  state  a  material  fact  necessary  to  make  a  statement  not
misleading,  contained  in  a  registration statement or offering statement  to
which  this Section 10 applies, if,  and  only  if,  the  untrue  statement  or
omission  directly resulted from information provided in writing to the Company
by the indemnifying Noteholder or holder of Investment Shares expressly for use
in the registration statement or offering statement at issue.

      f.    Indemnification  by  the Company.  In connection with the filing of
any registration statement covering  any  Investment  Shares, the Company shall
indemnify  and hold harmless each  holder thereof against  any  and  all  loss,
claim, damage,  liability,  joint  or  several  (which  shall  for all purposes
include, but not be limited to, all costs of defense and investigation  and all
attorneys'  fees)  to  which the holder may become subject under the Securities
Act or otherwise, insofar  as  the  loss, claim, damage or liability (or action
with respect thereto) arises out of or  is  based upon (i) any untrue statement
or alleged untrue statement of a material fact  contained  in  the registration
statement, any preliminary prospectus, the effective prospectus  or  the  final
prospectus,  or  any  amendment  or  supplement thereto or (ii) the omission or
alleged  omission  to  state  in the registration  statement,  any  preliminary
prospectus, the effective prospectus  or the final prospectus, or any amendment
or supplement to any of the foregoing,  a  material  fact required to be stated
therein or necessary to make the statements therein not misleading; except that
the Company shall not be liable in any such case to the extent, but only to the
extent, that any loss, claim, damage or liability arises  out  of  or  is based
upon  an  untrue  statement  or alleged untrue statement or omission or alleged
omission made in reliance upon  and  in  conformity  with  written  information
furnished to the Company by the Noteholders or any holder of Investment  Shares
for  use  in  the  preparation  of  the registration statement, any preliminary
prospectus, the effective prospectus  or the final prospectus, or any amendment
or supplement to any of the foregoing.   This  indemnity will be in addition to
any liability the Company may otherwise have.

      g.    Indemnification by the Holders of Investment  Shares.   The holders
of  any Investment Shares covered by a registration statement prepared  by  the
Company  shall  severally,  but  not  jointly,  indemnify and hold harmless the
Company, each other Person referred to in subparts  (1), (2) and (3) of Section
11(a) of the Securities Act in respect of the registration  statement,  against
any  and  all  loss, claim, damage or liability, joint or several, (which shall
for all purposes  include,  but  not  be  limited  to, all costs of defense and
investigation and all attorneys' fees) to which the  Company may become subject
under the Securities Act or otherwise, insofar as the  loss,  claim,  damage or
liability  (or action with respect thereto) arises out of or is based upon  (i)
any untrue statement  or  alleged untrue statement of a material fact contained
in  the  registration statement,  any  preliminary  prospectus,  the  effective
prospectus  or  the  final prospectus, or any amendment or supplement to any of
the foregoing, or (ii)  the  omission  or  alleged  omission  to  state  in the
registration statement, any preliminary prospectus, the effective prospectus or
the final prospectus, or any amendment or supplement to any of the foregoing, a
material fact required to be stated therein or necessary to make the statements
therein  not misleading; except that the indemnification shall be available  in
each case  to  the extent, but only to the extent, that the untrue statement or
alleged untrue statement  or  omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by any
holder of Investment Shares for  use  in  the  preparation  of the registration
statement, any preliminary prospectus, the effective prospectus  or  the  final
prospectus, or any amendment or supplement thereto.  This indemnity will be  in
addition  to any liability the Noteholders and holders of Investment Shares may
otherwise have.

      h.    Indemnification   Procedures.    Promptly   after   receipt  by  an
indemnified  party  under  Sections  10(f)  or  10(g),  of  written  notice  of
commencement  of  any  action, the indemnified party shall, if the indemnifying
party intends to assert  a  claim  in  respect thereof against the indemnifying
party  under the relevant section hereof,  notify  the  indemnifying  party  in
writing  of  the claim or commencement of the action, provided that, failure to
notify the indemnifying  party  shall not relieve the indemnifying party of any
obligation it may have to the indemnified  party, except to the extent that the
indemnifying party did not otherwise have notice of the action, and the failure
to notify the indemnifying party prejudiced the indemnifying party's ability to
defend itself in the action, and even in that  event,  the  failure  to  notify
shall   not   relieve  the  indemnifying  party  of  any  other  liability  the
indemnifying party  may  have to the indemnified party.  If any claim or action
is brought against an indemnified  party and the indemnified party notifies the
indemnifying party thereof, the indemnifying  party  shall  have  the  right to
participate in the claim or action, jointly with any other indemnifying  party,
if  any,  and  to  assume  the  defense  of  the  claim or action using counsel
reasonably  satisfactory  to  the indemnified party.   After  notice  from  the
indemnifying party to the indemnified  party  that  it  intends  to  assume the
defense of the claim or action, the indemnifying party shall not be liable  for
any  legal  fees  or  other costs or expenses incurred by the indemnified party
after receipt of the notice,  other  that for reasonable costs of investigation
in connection with the claim or action.

      i.    Contribution.  If the indemnification provided in Sections 10(f) or
10(g) is unavailable or insufficient to  hold  harmless  the indemnified party,
then each indemnifying party shall contribute to the amount  paid or payable by
the indemnified party as a result of the indemnified losses, claims, damages or
liabilities  (i) in an appropriate proportion to reflect the relative  benefits
received by the  Company  on  the  one  hand and the Noteholders and holders of
Investment Shares on the other hand, or (ii)  if  the  allocation  provided  by
clause  (i) of this Section 10(i) is not permitted by applicable law, then in a
proportion  appropriate  to reflect the relative benefits referred to in clause
(i) of this Section 10(i),  but  also  the relative fault of the Company on the
one hand and the Noteholders and holders  of  Investment  Shares  on  the other
hand,  in  connection with the indemnified losses, claims and damages incurred,
as well as any  other relevant equitable considerations.  The relative benefits
received by the Company  and  the Noteholders shall be deemed to be in the same
proportion  as  the total net proceeds  from  the  offering  (before  deducting
expenses) received  by the Company bear to the total underwriting discounts and
un-itemized expenses received by the underwriters, in each case as set forth in
the final prospectus.   Relative  fault  shall  be  determined by reference to,
among  other things, whether the untrue statement of a  material  fact  or  the
omission  to  state  a  material  fact  relates  to information supplied by the
Company or the underwriter and the parties' relative  intent, knowledge, access
to information and opportunity to correct or prevent the  untrue  statement  or
omission.  For purposes of this Section 10(i), the term "damages" shall include
any  counsel  fees  or other expenses reasonably incurred by the Company or the
underwriters in connection  with investigating or defending any action or claim
that is the subject of the contribution  provisions  of this Section 10(i).  No
Person adjudged guilty of fraudulent misrepresentation  (within  the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
Person who was not guilty of the fraudulent misrepresentation.

      j.    Notice of Contribution.  Each party entitled to contribution agrees
that upon the service of a summons or other initial legal process upon it or in
any  action  instituted  against  it  in respect of which contribution  may  be
sought, it shall promptly give written  notice  of  the service to the party or
parties from whom the contribution may be sought, but  the  failure to notify a
party  or  parties  of  the  service  shall  not  relieve  any party from  whom
contribution  may  be  sought  from  any  obligation  it may have hereunder  or
otherwise (except as specifically provided in Section 10(i).

      k.    Holdback.  (i) Each Noteholder agrees that,  upon  receipt  of  any
notice from the Company of the happening of any event requiring the preparation
of  a  supplement  or  amendment  to a registration statement or any prospectus
relating  thereto, the Noteholder will  forthwith  discontinue  disposition  of
Investment  Shares  thereunder  until  the  holder  has  received copies of the
supplemented or amended registration statement or prospectus  from  the Company
and,  if  so  directed  by  the  Company, each Noteholder shall deliver to  the
Company all copies, other than permanent  file  copies then in the Noteholder's
possession,  of  the previous versions of the registration  statement  and  any
prospectus covering the Investment Shares; and

      (ii) Each Noteholder  shall  suspend,  upon  request  of the Company, any
disposition  of  Investment  Shares  pursuant  to a registration statement  and
prospectus contemplated by this Section 10 during  (A) any period not to exceed
two  30-day  periods  within any one 12-month period the  Company  requires  in
connection with an underwritten  offering  of  equity  securities  and  (B) any
period, not to exceed a 60-day period per circumstance or development, when the
Company  determines in good faith that offers and sales pursuant thereto should
not be made  by reason of the presence of material undisclosed circumstances or
developments with  respect  to  which  the disclosure that would be required in
such a prospectus is premature, would have  an adverse effect on the Company or
is otherwise inadvisable.

      l.    Provision  of  Information  to Company.   As  a  condition  to  the
inclusion  of  its  Investment  Shares  in  any  registration  statement,  each
Noteholder  shall  furnish  to  the  Company  any  information   regarding  the
Noteholder and the distribution proposed by the Noteholder that the Company may
request in writing or as shall be required in connection with any registration,
qualification or compliance referred to in this Section 10.

      m.    Limitation  on  Transfer  of  Investment  Shares.   Each Noteholder
acknowledges  and  agrees  that  the  Investment  Shares sold pursuant  to  any
registration statement described in this Section are  not  transferable  on the
books  of  the  Company  unless the stock certificate submitted to the transfer
agent  evidencing  the  Investment  Shares  is  accompanied  by  a  certificate
reasonably satisfactory to  the  Company  to the effect that (i) the Investment
Shares have been sold in accordance with the  registration  statement  and (ii)
the requirement of delivering a current prospectus has been satisfied.

      n.    Regulation  M.  Each Noteholder agrees not to take any action  with
respect to any distribution  deemed  to  be  made  pursuant  to  a registration
statement  that  would  constitute  a  violation  of  Regulation  M  under  the
Securities  Exchange  Act  of 1934 or any other applicable rule, regulation  or
law.

      o.    Cessation of Disposition  of  Investment Shares.  At the end of the
period during which the Company is obligated to keep any registration statement
current  and  effective  as  described  in this  Section  10,  the  holders  of
Investment  Shares  included in the registration  statement  shall  discontinue
sales of shares pursuant  to  the registration statement upon receipt of notice
from  the Company of its intention  to  remove  from  registration  the  shares
covered  by  the  registration  statement  which remain unsold, and the holders
shall notify the Company of the number of shares  registered that remain unsold
immediately upon receipt of notice from the Company.

      p.    Rule  144 Undertakings.  With a view to  making  available  to  the
Noteholders the benefits  of  certain  rules  and regulations of the Commission
that at any time permit the sale of the Investment Shares to the public without
registration, the Company shall use reasonable efforts to:

                    i.make  and  keep public information  available,  as  those
                      terms are understood  and  defined  in Rule 144 under the
                      Securities Act, at all times;

                    ii. file with the Comission in a timely  manner all reports
                      and  other  documents required of the Company  under  the
                      Exchange Act; and

                    iii.so  long  as   a   Noteholder   owns  any  unregistered
                      Investment  Shares, furnish to the Noteholder,  upon  any
                      reasonable request, a written statement by the Company as
                      to its compliance with Rule 144 under the Act, and of the
                      Exchange Act,  a  copy  of  the  most  recent  annual  or
                      quarterly  report  of  the Company, and any other reports
                      and  documents  of  the  Company   the   Noteholder   may
                      reasonably  request  in  availing  itself  of any rule or
                      regulation  of  the  Commission allowing a Noteholder  to
                      sell any securities without registration.

      q.    Waiver or Amendment of this Section.   With  the written consent of
the  Company  and  Noteholders  holding at least a majority of  the  Investment
Shares that are then outstanding,  any  provision  of  this  Section  10 may be
waived  (either generally or in a particular instance, either retroactively  or
prospectively  and  either  for  a specified period of time or indefinitely) or
amended.  Upon the effectuation of  each waiver or amendment, the Company shall
promptly give written notice thereof  to  the Noteholders, if any, who have not
previously received notice thereof or consented thereto in writing.

      r.    No Restraint or Delay.  The Noteholders shall have no right to take
any action to restrain, enjoin or otherwise  delay any registration pursuant to
this Section 10 as a result of any controversy  that  may arise with respect to
the interpretation or implementation of this Indenture.

      11.   Amendments and Modifications.   At any time  and  from time to time
this Indenture may be amended or modified by the Company as follows:

      a.    Subject to such governmental approvals as may be required  by  law,
but  without the consent of the Noteholders, this Indenture may be amended from
time to time for any one or more of the following purposes:

            i.    to  evidence  the  succession of another corporation or other
      legal entity to the Company and  the  assumption by such successor of the
      respective  covenants,  agreements  and  obligations   of   the   Company
      hereunder;

            ii.   to  add to the covenants and agreements of the Company herein
      contained any further  covenants and agreements to be thereafter observed
      or to surrender any right or power herein reserved to the Company;

            iii.  to  cure any  ambiguity  or  any  defective  or  inconsistent
      provision contained in this Indenture; or

            iv.   to  make  any  provision  with  respect  to  the  matters  or
      questions  arising   under  this  Indenture  that  may  be  necessary  or
      desirable.

      b.    With the consent of the Collateral Agent, acting in accordance with
the provisions of the Collateral  Sharing  Agreement,  this  Indenture  may  be
amended  for  the  purpose of adding any provision to, changing or modifying in
any manner the rights and obligations of the Noteholders and of the Company.

      Notwithstanding   anything  in  this  Indenture  to  the  contrary,  this
Indenture may in no event be amended to increase the aggregate principal amount
of the Notes to more than Four Million Dollars (US $4,000,000).

      12.   Miscellaneous.

      a.    Successors and  Assigns.    Nothing in this Indenture shall prevent
any consolidation or merger of the Company  with  or into any other corporation
or other legal entity, or the sale or transfer of all  or  substantially all of
the  assets  of  the  Company  or other legal entity, to any other  corporation
lawfully  entitled  to acquire the  same;  provided,  however,  that  any  such
consolidation, merger,  sale or transfer shall be on the condition that the due
and punctual payment of the principal of and interest on all the Notes, and the
due and punctual performance  and  observance  of  all  of  the  covenants  and
agreements  of  this Indenture required to be kept or performed by the Company,
shall be assumed by such other corporation or other legal entity,.

      b.    Liability.    No  recourse  for  the payment of the principal of or
interest on any Note shall be had against any  incorporator,  past,  present or
future shareholder, officer or director of the Company or any successor  entity
and  any  and  all  such  personal liability of such incorporator, shareholder,
officer or director, hereby  expressly  waived and released by every Noteholder
as a condition to, and as a consideration  for,  the  issuance  of  the Note to
Noteholder.

      c.    Notices.   Any notice or demand required or permitted to  be  given
or  served  under this Indenture may be delivered by first class mail, prepaid,
and addressed,  if  to  a  Noteholder,  to  the  Noteholder  at  his address as
reflected in the books of the Company, and, if to the Company, to the attention
of the Secretary of the Company and the Company's principal office.

      d.    Severability.   In the event that one or more of the provisions  of
this Indenture or of the Notes for any reason shall be held invalid, illegal or
unenforceable  in  any respect, such invalidity, illegality or unenforceability
shall not affect any  other  provisions of this Indenture or of the Notes which
shall remain in full force and effect.

      e.    Governing Law.  This  Indenture  and  the Note shall be governed by
and construed in accordance with the laws of the State of Illinois.

      f.    Number and Gender.  Unless the context otherwise requires, wherever
used herein, the singular shall include the plural and the plural shall include
the  singular,  and  the  use  of  one  gender  shall denote  the  other  where
appropriate.

                             [signature page follows]

<PAGE>


      IN WITNESS WHEREOF, the Company has executed  this  Indenture  as  of the
date first written above.

                                           MOLECULAR DIAGNOSTICS, INC.


                                           By: ________________________________
                                                 Peter P. Gombrich
                                                 Chief Executive Officer

<PAGE>
                                                                      EXHIBIT A

THIS  NOTE  AND  THE  INTEREST SHARES AND CONVERSION SHARES, AS DEFINED HEREIN,
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER
ANY STATE SECURITIES LAWS,  AND  MAY  NOT  BE  SOLD,  TRANSFERRED,  ASSIGNED OR
OTHERWISE  DISPOSED,  EXCEPT IN ACCORDANCE WITH THE SECURITIES ACT OF 1933,  AS
AMENDED, AND APPLICABLE STATE SECURITIES LAWS.

                    12% CONVERTIBLE SECURED PROMISSORY NOTE

                                                              Chicago, Illinois
$______________________                          _______________________, 200__


      FOR VALUE RECEIVED,  MOLECULAR  DIAGNOSTICS,  INC, a Delaware corporation
having its principal office at, 414 North Orleans Street,  Suite  510, Chicago,
Illinois 60610, acting for itself and for all its successors and assigns,  (the
"Company")  promises  to pay to the order of  ("Holder"), at , or at such other
place as Holder may from  time  to time designate in writing, the principal sum
of   Dollars (US $) in the lawful  money  of  the  United  States  of  America,
together  with  interest on so much thereof as is from time to time outstanding
at the rate hereinafter  provided,  and  payable as hereinafter provided.  This
Note  is one of a series of Notes having the  same  terms  and  conditions  and
issued  pursuant  to  that  certain  Indenture dated as of October 1, 2002 (the
"Indenture"), the terms of which are incorporated herein by reference.

      1.    Interest Rate.  The unpaid  principal  balance  of  this Note shall
bear  simple interest at the rate of twelve percent (12%) per annum.   Interest
shall be  payable  in kind on the Maturity Date (as defined below) in shares of
common stock of the Company ("Common Stock") valued at:

[For  cash  subscriptions  for  the  first  One  Million  Dollars  ($1,000,000)
principal amount  of  Notes  being offered (determined on a "first come - first
served" basis): $0.10 per share]

[For subscribers who subscribe  after  cash  subscriptions  for  the  first One
Million  Dollars  ($1,000,000) principal amount of Notes have been received  by
the Company (determined  on  a  "first  come  - first served" basis): $0.15 per
share]

 (subject to adjustment to reflect any stock splits,  reverse  stock splits and
similar recapitalization events occurring after the date hereof).

      2.    Maturity  Date.   The  total outstanding principal balance  hereof,
together with accrued and unpaid interest, shall be due and payable on July 31,
2003 (the "Maturity Date").

      3.    Conversion.

[For  cash  subscriptions  for  the  first  One  Million  Dollars  ($1,000,000)
principal amount of Notes being offered  (determined  on  a "first come - first
served" basis):  This Note shall convert automatically into  shares  of  Common
Stock  valued  at  $0.10  per share (subject to adjustment to reflect any stock
splits, reverse stock splits  and  similar  recapitalization  events  occurring
after  the  date hereof) upon the earliest to occur of: (a) the closing of  the
Company's Six  Million  Dollar ($6,000,000) "PIPE" Financing (as defined in the
Indenture); or (b) a "Qualified  Financing  Transaction,"  which,  for purposes
hereof,  means  a transaction in which the Company closes a new debt or  equity
financing after the  date hereof and prior to the Maturity Date that results in
net proceeds to the Company of at least Four Million Dollars (US $4,000,000).]

[For subscribers who subscribe  after  cash  subscriptions  for  the  first One
Million  Dollars  ($1,000,000) principal amount of Notes have been received  by
the Company (determined on a "first come - first served" basis):  This Note may
be converted as to both principal and accrued interest, in whole or in part, at
the option of the Holder,  at  any  time on or prior to the Maturity Date, into
shares of Common Stock, valued at $0.15  per  share  (subject  to adjustment to
reflect  any  stock  splits,  reverse stock splits and similar recapitalization
events occurring after the date hereof).]

      4.    Prepayment.  This Note shall be subject to prepayment as follows:

            a.    Optional Prepayment.   This  Note may be prepaid, in whole or
      in part, at any time prior to the Maturity  Date  at  the  option  of the
      Company; provided, however, that unless this Note is prepaid in full, all
      Interest Shares shall be issued on the Maturity Date.

      [For subscribers who subscribe after cash subscriptions for the first One
      Million Dollars ($1,000,000) principal amount of Notes have been received
      by the Company (determined on a "first come - first served" basis):

            b.    Mandatory   Prepayment.    This  Note  shall  be  subject  to
      mandatory prepayment in full upon the closing  of  a "Qualified Financing
      Transaction,"  which, for purposes hereof, means a transaction  in  which
      the Company closes  a  new debt or equity financing after the date hereof
      and prior to the Maturity  Date  that  results  in  net  proceeds  to the
      Company of at least Four Million Dollars (US $4,000,000).]

      5.    Default  Interest and Attorney Fees.  Upon declaration of a default
hereunder, the balance  of  the  principal  remaining  unpaid, interest accrued
thereon,  and  all  other costs and fees shall bear interest  at  the  rate  of
fifteen percent (15%)  per annum (the "Default Rate") from the date of default.
In the event of default,  the Company and all other parties liable hereon agree
to pay all costs of collection, including reasonable attorneys' fees.

      6.    Interest Calculation.   Daily  interest  shall  be  calculated on a
365-day year and the actual number of days in each month.

      7.    Costs of Collection.  The Company agrees that if, and  as often as,
this Note is placed in the hands of an attorney for collection or to  defend or
enforce  any  of  Holder's  rights  hereunder  or under any instrument securing
payment of this Note, the Company shall pay to Holder its reasonable attorneys'
fees and all court costs and other expenses incurred  in  connection therewith,
regardless of whether a lawsuit is ever commenced or whether, if commenced, the
same  proceeds  to  judgment  or  not.   The costs and expenses shall  include,
without  limitation,  all  costs,  reasonable  attorneys'  fees,  and  expenses
incurred   by   Holder   in  connection  with   any   insolvency,   bankruptcy,
reorganization, foreclosure, deed in lieu of foreclosure or similar proceedings
involving Company or any endorser, surety, guarantor or other person liable for
this Note which in any way  affect  the  exercise  by  Holder of its rights and
remedies  under  this  Note,  or  any  other  document or instrument  securing,
evidencing or relating to the indebtedness evidenced by this Note.

      8.    Default.  The events constituting an  "Event  of Default" hereunder
are defined in the Security Agreement (as defined in the Indenture).   Upon the
occurrence  of  an  Event  of  Default,  the  Holder shall have such rights and
remedies  as are set forth in the Indenture, the  Security  Agreement  and  the
Collateral Sharing Agreement (as defined in the Indenture).

      9.    Application of Payments.  Any payment made against the indebtedness
evidenced by  this  Note  shall  be  applied against the following items in the
following order:  (a) costs of collection, including reasonable attorneys' fees
incurred or paid and all costs, expenses,  default  interest,  late charges and
other expenses incurred by Holder and reimbursable to Holder pursuant  to  this
Note  (as  described  herein); (b) Default Interest accrued to the date of said
payment; (c) ordinary interest  accrued  to  the  date  of  said  payment;  and
finally, (d) outstanding principal.

      10.   Transfer.  This Note may be transferred only in accordance with the
provisions of the Indenture.

      11.   Maximum Interest.  In no event whatsoever shall the amount paid, or
agreed  to  be  paid,  to  Holder for the use, forbearance, or retention of the
money to be loaned hereunder ("Interest") exceed the maximum amount permissible
under applicable law.  If the  performance  or  fulfillment  of  any  provision
hereof,  or  any  agreement  between  the  Company  and Holder, shall result in
Interest exceeding the limit for Interest prescribed by law, then the amount of
such  Interest  shall  be  reduced  to such limit.  If, from  any  circumstance
whatsoever, Holder should receive as  Interest  an amount that would exceed the
highest  lawful  rate,  the amount that would be excessive  Interest  shall  be
applied to the reduction  of  the principal balance owing hereunder (or, at the
option of Holder, be paid over  to  the  Company)  and  not  to  the payment of
Interest.

      12.   Purpose of Loan.  The Company certifies that the loan  evidenced by
this Note is obtained for business or commercial purposes and that the proceeds
will  not  be  used  primarily for personal, family, household, or agricultural
purposes.

      13.   Governing Law.  As an additional consideration for the extension of
credit, Holder, Company  and  each  endorser,  surety, guarantor, and any other
person who may become liable for all or any part  of this obligation understand
and agree that the loan evidenced by this Note is made in the State of Illinois
and the provisions hereof will be construed in accordance  with the laws of the
State of Illinois, and such parties further agree that upon  the  occurrence of
an  Event  of  Default,  this  Note  may  be enforced in any court of competent
jurisdiction  in  the State of Illinois, and  they  do  hereby  submit  to  the
jurisdiction of such court regardless of their residence or where this Note was
executed or any endorsement hereof may be executed.

      14.   Binding  Effect.   The  term "Company" as used herein shall include
the original Company of this Note and  any  party  who  may subsequently become
liable  for the payment hereof as an assumer with the consent  of  the  Holder,
provided  that Holder may, at its option, consider the original Company of this
Note alone  as  the  Company  unless  Holder  has  consented  in writing to the
substitution of another party as the Company.  The term "Holder" as used herein
shall  mean  Holder or, if this Note is transferred, the subsequent  Holder  of
this Note.

      15.   Relationship  of Parties.  Nothing herein contained shall create or
be deemed or construed to create  a  joint  venture  or partnership between the
Company and any Holder.  Holder is acting hereunder as a lender only.

      16.   Severability.  Invalidation of any of the  provisions  of this Note
or  of  any  paragraph,  sentence,  clause,  phrase,  or  word  herein,  or the
application thereof in any given circumstance, shall not affect the validity of
the remainder of this Note.

      17.   Amendment.   This  Note  may  not be amended, modified, or changed,
except by an instrument in writing signed by the Company and the Noteholder, in
accordance with the provisions of the Indenture.

      18.   Time of the Essence.  Time is of the essence for the performance of
each and every obligation of Company hereunder.

      19.   Agreement to be Bound by Security  Agreement and Collateral Sharing
Agreement.  HOLDER, BY HIS ACCEPTANCE OF THIS NOTE,  AND ANY TRANSFEREE OF THIS
NOTE, WITHOUT FURTHER ACTION, AUTOMATICALLY SHALL BE DEEMED  TO  HAVE  BECOME A
PARTY  TO,  AND  TO HAVE AGREED TO BE BOUND BY, THE SECURITY AGREEMENT AND  THE
COLLATERAL SHARING  AGREEMENT  IN  THE  SAME  CAPACITY  AS IF HOLDER HAD BEEN A
SIGNATORY THERETO.


      IN  WITNESS  WHEREOF,  the  undersigned  has  executed this  Note  as  of
_________________, 200__.

                                           MOLECULAR DIAGNOSTICS, INC.



                                           By: ________________________________
                                                 Peter P. Gombrich
                                                 Chief Executive Officer

<PAGE>
                                                                      EXHIBIT A

                               CONVERSION NOTICE

                                                        Dated  _________, 200__


      The undersigned hereby irrevocably elects to convert  the  Note  to which
this Conversion Notice is attached into shares of the Common Stock of Molecular
Diagnostics, Inc., as follows:



                                  AMOUNT CONVERTED
                                (check as applicable)


      _____The entire principal amount of the Note

      _____ $_____________ principal amount of the Note



                    INSTRUCTIONS FOR REGISTRATION OF STOCK



      Name  _______________________________________________________
                    (Please type or print in block letters)

      Address______________________________________________________


<PAGE>
                                                                      EXHIBIT B

                              SECURITY AGREEMENT

THIS SECURITY AGREEMENT (this "Agreement"), dated as of October 1, 2002 is made
by Molecular Diagnostics, Inc., a Delaware corporation ("Debtor"), in favor  of
B.  Michael  Pisani,  residing  at  44 Lake Road, Short Hills, New Jersey 07078
("Secured Party"), as Collateral Agent  under a Collateral Sharing Agreement of
even date herewith (the "Collateral Sharing  Agreement") for the holders of the
12% Convertible Secured Promissory Notes issued  by  the  Company (the "Notes")
pursuant to an Indenture of even date herewith (the "Indenture").

      For valuable consideration, Debtor agrees as follows:

      1.    Security  Interest.   Debtor  hereby  grants  to  Secured  Party  a
continuing  security  interest  in  and to the following property or  types  of
property now owned by Debtor or hereafter  created  or  acquired by Debtor (the
"Collateral"  provided  however,  that  the Collateral shall  not  include  any
property owned by any of Debtor's subsidiaries):

            (a)   All  intellectual  property   of  Debtor,  including  without
      limitation inventions, designs, patents, patent applications, trademarks,
      trade names, copyrights, licenses and computer software;

            (b)   All  materials  and  records,  pertaining   to   any  of  the
      foregoing;

            (c)   All  documents of title evidencing or issued with respect  to
      any of the foregoing; and

            (d)   All proceeds  and products of all of the foregoing, including
      without limitation proceeds of insurance policies insuring the foregoing.

      2.    Liabilities.  The Collateral  shall  ratably secure the payment and
performance  of  all 12% Convertible Secured Promissory  Notes  issued  by  the
Company pursuant to  an  Indenture  of  even  date herewith, as may be renewed,
replaced, modified, waived or extended from time to time (the "Liabilities").

      3.    Warranties of Debtor.  Debtor warrants  and  represents  that as of
the date hereof:

            (a)   Debtor has the legal capacity and power to execute,  deliver,
      and  perform  this  Agreement  and any other documents executed or to  be
      executed in connection herewith;  such  actions have been duly authorized
      and do not and will not contravene or conflict with any provisions of law
      or any agreement or instrument affecting Debtor or its property.

            (b)   No financing statement, mortgage,  notice of judgment, or any
      similar instrument (unless filed on behalf of Secured Party) covering any
      of the Collateral is on file in any public office, except for a financing
      statement evidencing a first priority lien on all  of  Debtor's assets in
      favor of Round Valley Capital, LLC.

            (c)   Debtor  is the lawful owner of all Collateral  owned  by  it,
      free and clear of all  liens,  pledges,  charges,  mortgages,  and claims
      other  than  the  security  interest  hereunder, except liens for current
      taxes not delinquent and for a lien on  all the assets of Debtor in favor
      of Round Valley Capital, LLC (collectively, "Permitted Liens").

            (d)   Debtor is a corporation duly  formed  and  in  good  standing
      under the laws of the State of Delaware.  The exact legal name of  Debtor
      and  the  name  under which Debtor conducts business are set forth in the
      first paragraph of  this  Agreement  and Debtor does not conduct business
      under any other name.

      4.    Covenants of Debtor.  Debtor agrees  that, until payment in full of
the Liabilities, it will:

           (a)    Not change its name, its jurisdiction  of organization or its
      legal structure, without obtaining the prior written  consent  of Secured
      Party.

           (b)    Take  reasonable action to defend the Collateral against  the
      claims and demands  of  all persons other than Secured Party and promptly
      pay all taxes, assessments,  and  charges  upon  the  Collateral, and not
      authorize or execute any documents creating or perfecting  a lien upon or
      security  interest  in  any of the Collateral except in favor of  Secured
      Party and except for Permitted  Liens,  or  otherwise  create, suffer, or
      permit to exist any liens or security interests upon any Collateral other
      than in favor of Secured Party, and except for Permitted Liens.

           (c)    Execute  such  documents  and do such other acts  as  Secured
      Party  may  reasonably request to establish  and  maintain  a  valid  and
      perfected security interest in the Collateral free and clear of all other
      liens and claims  except  for  lines  in  favor  of the Secured Party and
      except  for Permitted Liens, including, but not limited  to,  paying  the
      cost of filing  and recording a financing statement in all public offices
      reasonably deemed  necessary by Secured Party.  Debtor hereby irrevocably
      authorizes Secured Party  at  any time, so long as any Liabilities remain
      outstanding, to file in any jurisdiction any initial financing statements
      and amendments thereto that (a)  describe  the Collateral and (b) contain
      any other information required by Part 5 of  Article  9  of  the  Uniform
      Commercial  Code of the jurisdiction wherein such financing statement  or
      amendment is  filed regarding the sufficiency or filing office acceptance
      of any financing  statement  or  amendment.  The Debtor agrees to furnish
      any such information to the Secured  Party promptly upon request.  Debtor
      hereby also irrevocably authorizes Secured  Party  to  make  such filings
      with the U.S. Patent and Trademark Office, the U.S. Copyright  Office and
      other regulatory agencies as Secured Party deems necessary or appropriate
      to  provide notice of the security interest in the Collateral granted  to
      Secured Party hereunder.

            (d)   After  the  occurrence  of  an  Event  of Default, furnish to
      Secured  Party,  immediately  upon  the  request  of Secured  Party,  any
      evidence of ownership of the Collateral.

            (e)   Keep  at  its  office,  at the address set  forth  under  its
      signature hereto, its records concerning  the  Collateral,  which records
      shall  be of such character as will enable Secured Party to determine  at
      any time  the status of the Collateral.  After the occurrence of an Event
      of Default,  furnish  to Secured Party such information concerning Debtor
      and the Collateral as Secured  Party  may  from  time  to time reasonably
      request  and  permit  Secured  Party  from  time  to time to inspect  the
      Collateral and to inspect, audit, and make copies of,  and extracts from,
      all  records and all other papers in the possession of Debtor  pertaining
      to the Collateral.

            (f)   Take all actions as may be necessary to maintain and preserve
      the Collateral.

            (g)   Make  appropriate  entries  upon its financial statements and
      its books and records disclosing Secured Party's security interest in the
      Collateral.

            (h)   Provide to Secured Party such  financial statements of Debtor
      and  information  from  time to time as Secured  Party  shall  reasonably
      request.

            (i)   Immediately notify  Secured Party in reasonable detail (i) of
      any material loss or depreciation in the value of the Collateral and (ii)
      of the occurrence of any event, which,  after  any  notice and passage of
      any cure period, may become an Event of Default.

            (j)   Not sell, transfer, or otherwise dispose  of  any  Collateral
      without Secured Party's prior written consent.

            (k)   Preserve  and  maintain  its  existence,  rights,  franchise,
      licenses  and  privileges  and  will not liquidate, dissolve or merge  or
      consolidate with or into any other  entity,  unless the Secured Party has
      provided its prior written consent.

            (l)   Not make any distribution of Debtor's  property  or assets to
      its stockholders, except as expressly permitted by Secured Party.

            (m)   Except  in  the  ordinary  course of business or as otherwise
      expressly  permitted  in this Agreement, and  except  for  the  Permitted
      Liens, not pledge, mortgage,  grant  a  security  interest  in, encumber,
      assign, sell, lease or otherwise dispose of or transfer, whether by sale,
      merger, consolidation, liquidation, dissolution, or otherwise, any of the
      Debtor's assets.

      5.    Events  Of  Default.  The occurrence of any of the following  shall
constitute an "Event of Default" under this Agreement and under the Notes:

            (a)   Payment Default.   Debtor  fails to pay principal or interest
      on the Notes on the Maturity Date (as defined in the Notes);

            (b)   Covenant Default.  Debtor  fails  to perform any of its other
      covenants hereunder or under the Notes or Indenture  that are material to
      Debtor  or  the  rights  of  Secured  Party  hereunder  and such  failure
      continues for ten (10) days after receipt of written notice thereof.

            (c)   Insolvency.   Debtor admits in writing its inability  to  pay
      its debts generally as they  become  due,  or makes an assignment for the
      benefit of creditors or files any petition or action for relief under any
      bankruptcy, reorganization, insolvency or moratorium  law,  or  any other
      law or laws for the relief of, or relating to, debtors.

            (d)   Bankruptcy.   An  involuntary  petition  is  filed  under any
      bankruptcy  or  insolvency  statute  against  the  Debtor or a custodian,
      receiver or trustee has been appointed to take possession of any property
      or other assets of Debtor, unless the petition or appointment  is  or has
      been  set  aside  or  withdrawn  or  ceases or has ceased to be in effect
      within thirty (30) days from the date of said filing or appointment.

      6.    Remedies on Default.  Notwithstanding any provision of any document
or  instrument  evidencing  or  relating  to  the  Liabilities,  (i)  upon  the
occurrence of any Event of Default specified in  Sections  5(a)  or  (b) above,
Secured  Party may, to the extent authorized by the Noteholders to do so  under
the Collateral  Sharing  Agreement,  declare all of the Liabilities immediately
due  and payable without notice or demand  of  any  kind,  and  (ii)  upon  the
occurrence  of an Event of Default specified in Sections 5(c) or (d) above, all
of the Liabilities  shall  be  immediately  and  automatically  due and payable
without  action  of  any  kind on the part of Secured Party.  Debtor  expressly
waives protest, notice, presentment,  dishonor  and demand of any kind.  In its
capacity as Collateral Agent for the holders of the  Notes under the Collateral
Sharing Agreement, Secured Party may exercise from time  to time any rights and
remedies available under the Uniform Commercial Code of Illinois, including the
right  to  have  Debtor  assemble  the  Collateral and deliver it  to  a  place
designated by Secured Party.  Debtor shall  pay all related expenses, including
reasonable attorneys' fees.  If any notification of intended disposition of any
of the Collateral is required by law, such notification,  if  mailed,  shall be
deemed  reasonably  and  properly given if mailed at least ten (10) days before
the disposition, postage prepaid,  addressed to Debtor at the address set forth
under its signature hereto.  Secured  Party  shall,  in  addition to and not in
limitation  of  all rights of offset under applicable law, have  the  right  to
appropriate and apply all of the Collateral in its possession to payment of the
Liabilities subject  to  the  rights  of  any  other  secured  party  permitted
hereunder.   Secured  Party  may  proceed  to  sell or otherwise dispose of the
Collateral  at public or private sale for cash or  credit;  provided,  however,
that Debtor shall be credited with proceeds of such sale only when the proceeds
are actually  received by Secured Party.  Any proceeds of the Collateral may be
applied by Secured  Party  to  the payment of expenses and costs to exercise of
Secured Party's rights hereunder,  and  any  balance  of such proceeds shall be
applied toward the Liabilities pro rata for the benefit  of  all holders of the
Notes.  Any balance remaining shall be returned to the Debtor.

      7.    Rights  of  Secured  Party.  Secured Party may at its  option  (but
shall have no duty to):

            (a)   During the continuance  of  an  Event of Default, perform any
      agreement of Debtor hereunder that Debtor shall have failed to perform;

            (b)   During the continuance of an Event of Default, take any other
      action that Secured Party reasonably deems necessary or desirable for the
      preservation  of  the  Collateral  or  Secured Party's  interest  herein,
      including  without limiting the generality  of  the  foregoing:  (i)  any
      action to realize  upon  the  Collateral;  (ii)  the  discharge of taxes,
      liens,  security interests or other encumbrances at any  time  levied  or
      placed on the Collateral subject to the rights of any other secured party
      permitted  hereunder;  or  (iii)  the discharge or keeping current of any
      obligation of Debtor having effect on the Collateral; and

            (c)   At any time and from time to time, so long as any Liabilities
      are outstanding, file, or cause to  be  filed, any financing statement or
      other notification with any governmental  authority  respecting any right
      of Secured Party in the Collateral.

      Effective  during the continuance of an Event of Default,  Debtor  hereby
appoints  Secured  Party   as   its   attorney-in-fact,  which  appointment  is
irrevocable and coupled with an interest,  for  purposes of performing acts and
signing and delivering any agreement, document, or  instrument,  on  behalf  of
Debtor  in  accordance  with  this  Section.  Debtor immediately will reimburse
Secured Party for all expenses so incurred  by  Secured  Party,  together  with
interest thereon at the default Rate (as defined in the Notes).

      8.    General.

            (a)   Nonwaiver;  Cumulative Remedies.  No delay or omission on the
      part of Secured Party in  the  exercise  of  any  right  or  remedy shall
      operate as a waiver thereof, and no single or partial exercise by Secured
      Party  of  any  right  or remedy shall preclude other or further exercise
      thereof or the exercise  of  any  other  right or remedy.  The rights and
      remedies  herein  provided  to  Secured  Party  are  cumulative  and  not
      exclusive of any rights or remedies provided by law.

            (b)   Notices.   All notices, requests,  and  demands  to  or  upon
      Secured Party or Debtor  shall  be deemed to have been given or made when
      deposited  in  the mail, postage prepaid,  addressed  to  Debtor  at  the
      address set forth  under its signature or to Secured Party at the address
      listed in the heading of this Agreement.

            (c)   Successors.    This   Agreement  shall,  upon  execution  and
      delivery by the Debtor, become effective  and  shall  be binding upon and
      inure  to  the  benefit  of  Debtor, Secured Party, and their  respective
      successors and assigns, except that Debtor may not transfer or assign any
      of its rights or interest hereunder without the consent of Secured Party.

            (d)   Number and Gender.   Unless  the  context otherwise requires,
      wherever used herein the singular shall include the plural and the plural
      shall include the singular, and the use of one  gender  shall  denote the
      other where appropriate.

            (e)   Enforcement Costs.  Debtor agrees to pay or reimburse Secured
      Party upon demand for all reasonable costs, expenses, and fees (including
      legal  costs  and fees and reasonable time charges of attorneys) incurred
      by Secured Party  in preparing, negotiating, enforcing, or preserving its
      rights under, this  Agreement  or any note, document, or other instrument
      executed in connection herewith.

            (f)   Provisions Severable;  References.   If any term or provision
      of   this   Agreement   shall   be   unenforceable   or   invalid,   such
      unenforceability  or  invalidity  shall  not  render  any  other term  or
      provision  hereof  unenforceable  or  invalid,  and  all other terms  and
      provisions of this Agreement shall be enforceable and  valid.  References
      to  Sections  herein  shall  be  to  Sections  of  this Agreement  unless
      otherwise specified

            (g)   Construction; Jurisdiction.  This Agreement  and  the  rights
      and  obligations  of  the  parties  hereunder  shall  be governed by, and
      construed and interpreted in accordance with, the laws  of  the  State of
      Illinois.   Debtor  hereby  irrevocably consents to the jurisdiction  and
      venue of any state or federal court sitting in the State of Illinois, and
      agrees that any litigation involving  this  Agreement  (including without
      limitation ancillary claims) may be conducted in any such  court  at  the
      sole option of Secured Party.  Debtor hereby waives any right or claim it
      may  have  to  transfer or change the venue of any suit, action, or other
      proceeding brought  against  Debtor  by  Secured Party in accordance with
      this Section or to claim that any such proceeding  has been brought in an
      inconvenient forum.  THE DEBTOR AGREES TO WAIVE ANY  RIGHT IT MAY HAVE TO
      A TRIAL BY JURY IN ANY SUCH SUIT ACTION OR PROCEEDING.


                           [signature page follows]

<PAGE>
                                                                      EXHIBIT B

      IN WITNESS WHEREOF, the Company has executed this Security  Agreement for
the  benefit of the Secured Party, as Collateral Agent for the holders  of  the
Notes  under  the  Collateral  Sharing  Agreement  as of the date first written
above.

                                    MOLECULAR DIAGNOSTICS, INC.


                                    By: ____________________________________
                                           Peter P. Gombrich
                                           Chief Executive Officer

                                    Address:     414 North Orleans Street
                                                 Chicago, Illinois 60610


<PAGE>
                                                                      EXHIBIT C

                         COLLATERAL SHARING AGREEMENT

      This Collateral Sharing Agreement (this "Agreement")  is  entered into as
of this 1st day of October, 2002 among B. Michael Pisani, residing  at  44 Lake
Road,  Short  Hills,  New Jersey 07078 (the "Collateral Agent") and the holders
(the "Noteholders") of  the  12%  Convertible  Secured  Promissory  Notes  (the
"Notes")  issued  by  Molecular  Diagnostics, Inc., a Delaware corporation (the
"Borrower"), pursuant to an Indenture of even date herewith (the "Indenture").

                                   RECITALS

      WHEREAS,  the  Notes  are secured  by  a  security  interest  in  certain
Collateral (as defined below)  granted  to  the  Collateral Agent pursuant to a
Security Agreement of even date herewith (the "Security Agreement"); and

      WHEREAS, the parties desire by this Agreement  to  set forth the basis by
which  the Collateral Agent will hold the security interest  and  exercise  its
rights under the Security Agreement for the benefit of all of the Noteholders.

      NOW  THEREFORE,  in  exchange  for  good  and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged,  the  parties agree as
follows:

                                   AGREEMENT

      1.    Defined  Terms.   Capitalized  terms used herein and not  otherwise
defined herein shall have the meanings attributed to such terms in the Security
Agreement.  In addition, the following terms shall have the following meanings:

      "Agent's Expenses" means all of the reasonable  fees,  costs and expenses
of the Collateral Agent (including, without imitation, the reasonable  fees and
disbursements  of  its counsel) (a) arising in connection with the preparation,
execution, delivery,  modification,  restatement,  amendment  or termination of
this Agreement and each Collateral Document or the enforcement  (whether in the
context of a civil action, adversary proceeding, workout or otherwise)  of  any
of the provisions hereof or thereof, or (b) incurred or required to be advanced
in  connection  with the sale or other disposition or the custody, preservation
or protection of  Collateral  pursuant  to  any  Collateral  Document  and  the
exercise  or  enforcement of the Collateral Agent's rights under this Agreement
and in and to the Collateral.

      "Collateral"  means  all property of the Borrower in which the Collateral
Agent shall have been granted  a  security  interest  or  lien under any of the
Collateral Documents.

      "Collateral  Account"  means  the  collateral  account  established   and
maintained by the Collateral Agent pursuant to Section 8.

      "Collateral  Documents"  means  the  Security  Agreement  and  any  other
agreements, instruments and documents incidental thereto.

      "Distribution  Date" means the first day of every month following receipt
by the Collateral Agent of a Notice of Default.

      "Notice of Default"  means  a written notice to the Collateral Agent from
any Noteholder or Noteholders certifying  that an Event of Default has occurred
and  is  continuing.   A  "Notice of Default" may  be  included  in  a  written
direction to the Collateral  Agent  from  the Requisite Noteholders pursuant to
Section 5.

      "Pro Rata Share" means, with respect  to  any  Noteholder  at any time, a
fraction  (expressed  as  a  percentage), the numerator of which shall  be  the
outstanding amount payable to  the  Noteholder  under  the  Notes  held  by the
Noteholder,  and  the  denominator  of which shall be the aggregate outstanding
amount payable to all Noteholders under the Notes.

      "Requisite  Noteholders" means,  at  any  time,  Noteholders  holding  an
aggregate Pro Rata  Share  greater  than  66-2/3%,  provided  that   "Requisite
Noteholders" shall mean all of the Noteholders (other than any Noteholder  that
has  given  notice to the Collateral Agent in accordance with the last sentence
of Section 10)  with  respect to (a) the release by the Collateral Agent of any
Collateral,  other than  a  release  in  connection  with  the  disposition  of
Collateral by  either  the  Collateral Agent or the Borrower and the receipt by
the Collateral Agent of the proceeds  of  disposition,  (b) any  amendment  to,
waiver  of  or  departure  from  the  terms  of  this  Agreement  or any of the
Collateral   Documents   that   would   change  the  definition  of  "Requisite
Noteholders," change any of the powers or  duties  of  the  Collateral Agent or
change any of the rights of any of the Noteholders under this  Agreement or any
of the Collateral Documents.

      2.    Appointment,  Nature  of  Relationship.   Each  of  the Noteholders
hereby designates and appoints the Collateral Agent, in the Collateral  Agent's
individual  capacity  and  not  as  lender,  as  the  Collateral  Agent for the
Noteholder  under  this  Agreement  and  the  Collateral  Documents,  and  each
Noteholder  hereby  irrevocably  authorizes  the  Collateral  Agent to take any
action  on the Noteholder's behalf under the provisions of this  Agreement  and
the Collateral  Documents and to exercise any powers as are set forth herein or
therein, together  with  any  other  powers  as  are  incidental  thereto.  The
Collateral Agent agrees to act on the express terms and conditions contained in
this  Agreement.   Notwithstanding  the  use  of  the  defined term "Collateral
Agent," it is expressly understood and agreed that the Collateral  Agent  shall
not  have  any  fiduciary  responsibilities to any Noteholder by reason of this
Agreement or the other Collateral  Documents  and  that the Collateral Agent is
merely acting as the representative of the Noteholders  with  only  the  duties
that  are  expressly  set forth in this Agreement and the Collateral Documents.
In its capacity as the  Noteholders' contractual representative, the Collateral
Agent (a) does not assume  any  fiduciary  duties  to  any  of the Noteholders,
(b) is a "representative" of the Noteholders within the meaning  of  Section 9-
105  of  the  Uniform  Commercial  Code  and  (c) is  acting  as an independent
contractor, the rights and duties of which are limited to those  expressly  set
forth  in this Agreement and the Collateral Documents.  Each of the Noteholders
agrees not  to  assert  any  claim  against  the Collateral Agent on any agency
theory or any other theory of liability for breach  of  fiduciary  duty, all of
which claims each Noteholder hereby expressly waives.

      3.    Powers  and  Duties.   The  Collateral  Agent  shall  have and  may
exercise  the  powers  under  the  Collateral  Documents  that are specifically
delegated  to  the  Collateral Agent by the terms hereof and thereof,  together
with powers that are reasonably incidental thereto.  The Collateral Agent shall
have no implied duties to the Noteholders, or any obligation to the Noteholders
to take any action hereunder  or  under any of the Collateral Documents, except
any action specifically required by  this  Agreement  or  any of the Collateral
Documents  to  be  taken by the Collateral Agent or directed by  the  Requisite
Noteholders in accordance with the terms hereof.

      4.    Authorization   to  Execute  Collateral  Documents.   Each  of  the
Noteholders authorizes and directs the Collateral Agent, for the benefit of the
Noteholders, to execute and deliver  each of the Collateral Documents requiring
execution and delivery by the Collateral  Agent and to accept delivery from the
Borrower of those Collateral Documents that  do  not  require  execution by the
Collateral Agent.

      5.    Direction  by Requisite Noteholders.  Except as otherwise  provided
in this Section 5, the Collateral  Agent  shall take any action with respect to
the  Collateral  and  the  Collateral Documents  directed  in  writing  by  the
Requisite Noteholders.  Notwithstanding  the  foregoing,  the  Collateral Agent
shall  not  be  obligated to take any action (a) that is in conflict  with  any
provisions of applicable law or of this Agreement or any Collateral Document or
(b) with respect  to which the Collateral Agent, in its sole opinion, shall not
have been provided  adequate security and indemnity against the costs, expenses
and liabilities that  may  be incurred by it as a result of compliance with the
direction.  Under no circumstances  shall  the  Collateral  Agent be liable for
following the written direction of the Requisite Noteholders.  In each instance
in  which  the  Requisite  Noteholders  deliver  a  written  direction  to  the
Collateral Agent pursuant hereto, the Requisite Noteholders shall promptly send
a copy of the written direction to each other Noteholder.

      6.    Notice  of  Default.  Any Noteholder or Noteholders  may  give  the
Collateral Agent a Notice  of  Default in the manner provided in Section 2, and
upon receipt of thereof, the Collateral  Agent  shall give a copy of the Notice
of Default to each other Noteholder.  If, and only  if,  the  Collateral  Agent
shall  have  received a Notice of Default, the Collateral Agent shall, upon the
written direction  of  the  Requisite  Noteholders,  exercise  the  rights  and
remedies provided in this Agreement and in any of the Collateral Documents.

      7.    Remedies.   Each  of the Noteholders hereby irrevocably agrees that
the Collateral Agent shall be authorized, after the occurrence of a Default and
at  the  direction of the Requisite  Noteholders  or  incidental  to  any  such
direction,  for the purpose of carrying out the terms of this Agreement and any
of the Collateral  Documents,  to  take  any  and all appropriate action and to
execute  any  and  all  documents  and instruments that  may  be  necessary  or
desirable to accomplish the purposes  hereof  and  thereof,  including, without
limiting the generality of the foregoing, to the extent permitted by applicable
law, to do the following:

            (a)   to ask for, demand, sue for, collect, receive  and give
      acquittance  for  any  and  all  moneys  due  or to become due with
      respect to the Collateral,

            (b)   to receive, take, endorse, assign and  deliver  any and
      all   checks,  notes,  drafts,  acceptances,  documents  and  other
      negotiable  and  nonnegotiable  instruments,  documents and chattel
      paper taken or received by the Collateral Agent  in connection with
      this Agreement or any of the Collateral Documents,

            (c)   to   commence,   file,   prosecute,   defend,   settle,
      compromise  or  adjust  any claim, suit, action or proceeding  with
      respect to the Collateral,

            (d)   to sell, transfer,  assign or otherwise deal in or with
      the  Collateral  or any part thereof  pursuant  to  the  terms  and
      conditions of this Agreement and the Collateral Documents, and

            (e)   to do,  at  its  option  and at the expense and for the
      account  of  the Noteholders (to the extent  the  Collateral  Agent
      shall not be reimbursed  by the Borrower), at any time or from time
      to  time, all acts and things  which  the  Collateral  Agent  deems
      reasonably  necessary  to protect or preserve the Collateral and to
      realize upon the Collateral.

      8.    The Collateral Account.   Upon receipt by the Collateral Agent of a
Notice  of  Default,  the  Collateral  Agent   shall   open   and  maintain  an
interest-bearing   bank   account   that   shall  be  entitled  the  "Molecular
Diagnostics, Inc. 12% Convertible Secured Note Collateral Account."  All moneys
received by the Collateral Agent with respect  to Collateral after receipt of a
Notice of Default shall be deposited in the Collateral  Account  and thereafter
shall  be held, applied and/or disbursed by the Collateral Agent in  accordance
with Section  9.   In  no  event shall moneys other than proceeds of Collateral
(and interest thereon) be deposited  in the Collateral Account.  The Collateral
Account at all times shall be subject  to the exclusive dominion and control of
the Collateral Agent.

      9.    Application of Moneys.  All  moneys held by the Collateral Agent in
the Collateral Account shall be distributed  by  the  Collateral  Agent on each
Distribution Date as follows:

            FIRST:  To  the  Collateral  Agent  in an amount equal to the
      Agent's Expenses that are unpaid as of the  Distribution  Date, and
      to any Noteholder that has theretofore advanced or paid any Agent's
      Expenses  in  an amount equal to the amount so advanced or paid  by
      the Noteholder prior to the Distribution Date;

            SECOND:  To   the   Noteholders   in  accordance  with  their
      respective Pro Rata Shares as of such Distribution Date; and

            THIRD:  Any surplus remaining after  payment  in full in cash
      of all Agent's Expenses and all Liabilities shall be  paid  to  the
      Borrower,  or  to  whomever may be lawfully entitled to receive the
      same, or as a court of competent jurisdiction may direct.

Notwithstanding the foregoing, except for any surplus under clause THIRD above,
the Collateral Agent shall  not  be  required  to  make  a  distribution on any
Distribution  Date  if  the  balance  in  the Collateral Account available  for
distribution  on the Distribution Date is less  than  $1,000.   The  Collateral
Agent shall not  be  responsible  for any Noteholder's application (or order of
application) of payments received by  the  Noteholder from the Collateral Agent
hereunder to the Liabilities owing to such Noteholder.   The  Collateral  Agent
waives  any  right  of  set-off  it  may  have against monies in the Collateral
Account to the extent the set-off results in  a  distribution  of  monies other
than as set forth in the foregoing provisions for application of monies  in the
Collateral Account.

      10.   Information  from  Noteholders.   Each  of  the  Noteholders hereby
agrees,  promptly  upon  request  by  the Collateral Agent, to provide  to  the
Collateral Agent in writing any information  regarding  the  Notes  held by the
Noteholder as may be reasonably required by the Collateral Agent at any time to
determine the Noteholder's Pro Rata Share or to calculate distributions  to the
Noteholder  from  the  Collateral  Account.   Each  Noteholder shall notify the
Collateral Agent in writing promptly following the repayment  in  full  of  the
Noteholder's Note.

      11.   Limitation  on  Collateral Agent's Duties in Respect of Collateral.
Other than the Collateral Agent's  duties  set  forth in this Agreement and the
Collateral Documents as to the custody of moneys,  stock certificates and stock
powers  received  by  the  Collateral Agent hereunder and  thereunder  and  the
accounting to the Borrower and  the  Noteholders therefor, the Collateral Agent
shall have no duty to the Borrower or  the  Noteholders  with  respect  to  any
Collateral  in its possession or control or in the possession or control of its
agent or nominee,  any  income  thereon,  or the preservation of rights against
prior parties or any other rights pertaining thereto.

      12.   Noteholder Credit Decision.  Each  Noteholder  acknowledges that it
has, independently and without reliance upon the Collateral  Agent or any other
Noteholder, and based on the financial information provided by the Borrower and
any other documents and information the Noteholder has deemed appropriate, made
its  own  credit  analysis and decision to acquire the Notes.  Each  Noteholder
also acknowledges that  it  will,  independently  and without reliance upon the
Collateral  Agent  or  any other Noteholder, and based  on  any  documents  and
information the Noteholder  deems appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement.

      13.   Exculpation.   Neither   the   Collateral  Agent  nor  any  of  its
employees, agents or affiliates shall be responsible  for  or  have any duty to
ascertain,   inquire   into,   or   verify   (a) any   statement,  warranty  or
representation made by the Borrower in connection with any Collateral Document;
(b) the performance or observance of any of the covenants  or agreements of the
Borrower  under  any  Collateral  Document;  (c) the  validity, enforceability,
effectiveness or genuineness of any Collateral Document or any other instrument
or writing furnished in connection therewith; (d) the validity,  perfection  or
priority  of  any  security  interest  or  lien  created  under  any Collateral
Document; or (e) the financial condition of the Borrower.

      14.   Employment of Agents and Counsel.  The Collateral Agent may execute
any  of  its duties as the Collateral Agent hereunder and under any  Collateral
Document by  or  through employees, agents, and attorneys-in-fact and shall not
be answerable to the  Noteholders, except as to money or securities received by
it or its authorized agents,  for  the default or misconduct of any such agents
or attorneys-in-fact selected by it.  The Collateral Agent shall be entitled to
advice of counsel in all matters pertaining  to  the  Collateral Agent's duties
hereunder and under the Collateral Documents.

      15.   Reliance on Documents and Counsel.  The Collateral  Agent  shall be
entitled  to  rely  upon  any  notice, consent, certificate, affidavit, letter,
telegram, statement, paper or document believed by it to be genuine and correct
and to have been signed or sent  by  the  proper  person  or  persons,  and, in
respect  to  legal  matters,  upon  the  opinion  of  counsel  selected  by the
Collateral Agent, which may be employees of the Collateral Agent.

      16.   Collateral   Agent's   Reimbursement   and   Indemnification.   The
Noteholders agree to reimburse and indemnify the Collateral  Agent  ratably  in
proportion  to  their  respective Pro Rata Shares as of the date hereof (a) for
any amounts not reimbursed  by  the  Borrower  under  the Collateral Documents,
(b) for any other expenses incurred by the Collateral Agent  on  behalf  of the
Noteholders,   in   connection   with  the  preparation,  execution,  delivery,
administration and enforcement of  the  Collateral  Documents  and  (c) for any
liabilities,  obligations,  losses,  damages,  penalties,  actions,  judgments,
suits, costs, expenses or disbursements of any kind and nature whatsoever which
may be imposed on, incurred by or asserted against the Collateral Agent  in any
way  relating  to  or  arising  out  of  the  Collateral Documents or any other
document  delivered  in connection therewith or the  transactions  contemplated
thereby, or the enforcement  of  any  of  the  terms thereof,  provided that no
Noteholder shall be liable for any of the foregoing  to  the  extent any of the
foregoing is found in a final non-appealable judgment by a court  of  competent
jurisdiction to have arisen from the gross negligence or willful misconduct  of
the  Collateral  Agent.   The  agreements  in this Section 16 shall survive the
repayment of the Liabilities and the termination  of  the  other  provisions of
this Agreement.

      17.   Rights as a Noteholder.  Notwithstanding that the Collateral  Agent
is  acting  as  the  Collateral  Agent  hereunder,  the Collateral Agent in its
individual  capacity  as  a Noteholder shall have the same  rights  and  powers
hereunder as any Noteholder and may exercise the same as though it were not the
Collateral Agent, and the term  "Noteholder" or "Noteholders" shall include the
Collateral Agent in its capacity as a Noteholder.

      18.   Successor Collateral Agent.  The Collateral Agent may resign at any
time by giving written notice thereof  to the Noteholders and the Borrower, and
the Collateral Agent may be removed at any  time,  with  or  without  cause, by
written notice received by the Collateral Agent from the Requisite Noteholders.
Upon any resignation or removal, the Requisite Noteholders shall have the right
to appoint, on behalf of the Noteholders, a successor Collateral Agent.   If no
successor  Collateral  Agent  shall  have  been  so  appointed by the Requisite
Noteholders and shall have accepted the appointment within  30  days  after the
departure  of  the  Collateral  Agent, then the departing Collateral Agent  may
appoint, on behalf of the Noteholders,  a successor Collateral Agent.  Upon the
acceptance of any appointment as the Collateral  Agent hereunder by a successor
Collateral Agent, the successor Collateral Agent shall thereupon succeed to and
become  vested  with  all  the rights, powers, privileges  and  duties  of  the
departing  Collateral Agent,  and  the  departing  Collateral  Agent  shall  be
discharged from  its  duties and obligations hereunder and under the Collateral
Documents.   After any departing  Collateral  Agent's  resignation  or  removal
hereunder as Collateral  Agent, the provisions of this Agreement shall continue
in effect for its benefit  in  respect  of  any  actions taken or omitted to be
taken by it while it was acting as the Collateral Agent hereunder and under the
Collateral Documents.

      19.   Release and Termination.  All of the Collateral  shall  be released
and this Agreement shall be terminated on the earlier of:

            (a)   the  date  on which (i) the Collateral Agent shall have
      received  from each of the  Noteholders  written  notice  that  all
      Liabilities  owing  to  the  Noteholder  have been paid in full and
      (ii) all Agent's Expenses shall have been paid in full; or

            (b)   the date on which (i) the Collateral  Agent  shall have
      received  written  instructions from all of the Noteholders  (other
      than any Noteholder  that  has given notice to the Collateral Agent
      in accordance with the last  sentence  of Section 10) directing the
      Collateral  Agent to release the Collateral  and  (ii) all  Agent's
      Expenses shall have been paid in full.

      20.   Amendments and Waivers.  No amendment to or waiver of any departure
from the terms of this  Agreement  shall  be  effective  unless  in writing and
signed by all of the parties hereto.  The Collateral Agent shall not execute or
deliver any amendment or waiver with respect to any Collateral Document  except
at the direction or with the consent of the Requisite Noteholders.

      21.   Notices.  All Notices hereunder shall be given in the manner and to
the  respective  addresses  for  the Noteholders contained by the Note registry
maintained by the Secretary of the Company in accordance the Indenture.

      22.   Headings.   Section  headings   used  in  this  Agreement  are  for
convenience only and shall not affect the construction of this Agreement.

      23.   Severability.  Any provision of this  Agreement  that is prohibited
or  unenforceable  in  any  jurisdiction  shall  not  invalidate the  remaining
provisions hereof, and any prohibition or unenforceability  in any jurisdiction
shall  not  invalidate  or  render  unenforceable  the provision in  any  other
jurisdiction.

      24.   Binding Effect.  This Agreement shall be  binding upon and inure to
the benefit of each of the parties hereto and their respective  successors  and
assigns.

      25.   Governing  Law.  The provisions of this Agreement shall be governed
by and construed in accordance  with the internal laws (as opposed to conflicts
of law provisions) and decisions of the State of Illinois.

      26.   Number and Gender.  Unless the context otherwise requires, wherever
used herein the singular shall include  the plural and the plural shall include
the  singular,  and  the  use  of  one  gender shall  denote  the  other  where
appropriate.

      IN  WITNESS WHEREOF, this Collateral  Sharing  Agreement  has  been  duly
executed as of by the date first written above.




                                           ____________________________________
                                           B. Michael Pisani
                                           Collateral Agent

                                           PURSUANT   TO  THE  INDENTURE,  EACH
                                           NOTEHOLDER'S  ACCEPTANCE OF HIS NOTE
                                           CONSTITUTES HIS  AGREEMENT  TO  BE A
                                           PARTY   TO,  AND  BE  BOUND  BY  THE
                                           PROVISIONS  OF  THIS  AGREEMENT, THE
                                           SAME AS IF A SIGNATORY HERETO.


<PAGE>
                                                                      EXHIBIT D

THIS  WARRANT  AND  THE UNDERLYING SHARES OF COMMON STOCK REPRESENTED  BY  THIS
CERTIFICATE HAVE NOT  BEEN  REGISTERED  UNDER  THE  SECURITIES ACT OF 1933 (THE
"ACT"), AND ARE "RESTRICTED SECURITIES" AS THAT TERM  IS  DEFINED  IN  RULE 144
UNDER  THE  ACT.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE
TRANSFERRED EXCEPT  PURSUANT  TO  AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
ACT,  OR  PURSUANT  TO  AN  EXEMPTION FROM  REGISTRATION  UNDER  THE  ACT,  THE
AVAILABILITY OF WHICH IS TO BE  ESTABLISHED  TO  THE  SATISFACTION OF MOLECULAR
DIAGNOSTICS, INC.

                                                       Warrant No. 200__- [   ]


                  WARRANT TO PURCHASE SHARES OF COMMON STOCK

                      WARRANT TO PURCHASE _______ SHARES
                  (SUBJECT TO ADJUSTMENT AS SET FORTH HEREIN)

[For cash subscriptions for the first One Million Dollars ($1,000,000)
principal amount of Notes being offered (determined on a "first come - first
served" basis):

                        EXERCISE PRICE $0.15 PER SHARE
                  (SUBJECT TO ADJUSTMENT AS SET FORTH HEREIN)]

[For subscribers who subscribe after cash subscriptions for the first One
Million Dollars ($1,000,000) principal amount of Notes have been received by
the Company (determined on a "first come - first served" basis):

                        EXERCISE PRICE $0.20 PER SHARE
                  (SUBJECT TO ADJUSTMENT AS SET FORTH HEREIN)]

                                  ISSUE DATE:
      VOID AFTER 3:00 P.M., CENTRAL TIME, ON THE FIFTH ANNIVERSARY OF THE
                                  ISSUE DATE

      THIS  CERTIFIES  THAT  ,  ,  is  entitled  to  purchase  from   Molecular
Diagnostics,  Inc.,  a  Delaware corporation (hereinafter called the "Company")
with its principal office  located  at  414  North  Orleans  Street, Suite 510,
Chicago,  Illinois  60610,  at  any  time  after the Exercise Date (as  defined
below), but before 3:00 P.M., Central Time,  on the Expiration Date (as defined
below), at the Exercise Price (as defined below),  the  number  of  shares (the
"Warrant  Shares")  of  the Company's common stock, par value $0.001 per  share
(the "Common Stock") set  forth  above.   The number of Shares purchasable upon
exercise of this Warrant and the Exercise Price  per  Share shall be subject to
adjustment from time to time as set forth in Section 4 below.


      SECTION 1.  DEFINITIONS

      The  following  terms  used  in  this  Warrant shall have  the  following
meanings (unless otherwise expressly provided herein):

      The "Act."  The Securities Act of 1933, as amended.

      The "Commission."  The Securities and Exchange Commission.

      The "Company."  Molecular Diagnostics, Inc.

      "Common Stock."  The Company's Common Stock, par value $0.001 per share.

      "Current Market Price."  The Current Market  Price shall be determined as
follows:

            (a)   if the security at issue is listed  on  a national securities
      exchange or admitted to unlisted trading privileges on  such  an exchange
      or quoted on either the National Market System or the Small Cap Market of
      the automated quotation service operated by The Nasdaq Stock Market, Inc.
      ("Nasdaq"),  the  current value shall be the last reported sale price  of
      that security on such exchange or system on the day for which the Current
      Market Price is to be determined or, if no such sale is made on such day,
      the average of the  highest  closing  bid and lowest asked price for such
      day on such exchange or system; or

            (b)   if  the security at issue is  not  so  listed  or  quoted  or
      admitted to unlisted  trading  privileges, the Current Market Value shall
      be the average of the last reported  highest  bid and lowest asked prices
      quoted on the Nasdaq Electronic Bulletin Board,  or,  if  not  so quoted,
      then  by  the  National  Quotation Bureau, Inc. on the last business  day
      prior to the day for which  the Current Market Price is to be determined;
      or

            (c)   if the security at  issue  is  not  so  listed  or  quoted or
      admitted to unlisted trading privileges and bid and asked prices  are not
      reported, the current market value shall be determined in such reasonable
      manner  as  may be prescribed from time to time by the Board of Directors
      of  the  Company,   subject   to  the  objection  procedures  hereinafter
      described.

      "Exercise Date."  July 31, 2003.

      "Exercise Price."  [$0.15] or [$0.20] per Share, as modified from time to
time in accordance with the provisions of this Warrant.

      "Expiration Date."  The fifth anniversary  of the Issue Date indicated on
the first page of this Warrant.

      "Holder" or "Warrantholder."  The person to  whom  this Warrant is issued
and any valid transferee thereof pursuant to Section 3.1 below.

      "NASD."  The National Association of Securities Dealers, Inc.

      "Nasdaq."  The automated quotation system operated by  the  Nasdaq  Stock
Market, Inc.

      "Termination  of  Business."   Any  sale,  lease  or  exchange of all, or
substantially  all,  of  the  Company's assets or business or any  dissolution,
liquidation or winding up of the Company.

      "Warrant."  This Warrant  and  any  other warrants issued in substitution
for  or replacement thereof, including those  evidenced  by  a  certificate  or
certificates  originally issued or issued upon division, exchange, substitution
or transfer pursuant to this Warrant.

      "Warrant  Shares."   The  Common  Stock purchasable upon exercise of this
Warrant  including the Common Stock underlying  unexercised  portions  of  this
Warrant.

      SECTION 2.  TERM OF WARRANTS; EXERCISE OF WARRANT

      2.1.  Exercise of Warrant.

            (a)   Subject  to  the terms of this Warrant, the Holder shall have
      the right, at any time beginning  on  the Exercise Date but prior to 3:00
      p.m., Central Time, on the Expiration Date,  to purchase from the Company
      up to the number of fully paid and nonassessable  Warrant Shares to which
      the  Holder  may  at the time be entitled to purchase  pursuant  to  this
      Warrant, upon surrender  to  the Company, at its principal office, of the
      Warrant to be exercised, together  with  the purchase form on the reverse
      thereof, duly filled in and signed, and upon  payment  to  the Company of
      the Exercise Price for the number of Warrant Shares in respect  of  which
      the  Warrant is then exercised, but in no event for less than 100 Warrant
      Shares  (unless  fewer  than  an aggregate of 100 Warrant Shares are then
      purchasable under all outstanding Warrants held by a Holder).

            (b)   In lieu of payment  of  the  Exercise  Price,  the Holder may
      require  the Company to convert this Warrant into shares of Common  Stock
      (the "Conversion  Right")  as  provided for in this Section 2.1(b).  Upon
      exercise of the Conversion Right, the Company shall deliver to the Holder
      (without payment by the Holder of  any of the Exercise Price) that number
      of shares of Common Stock equal to the  quotient obtained by dividing (x)
      the value of the Warrant at the time the  Conversion  Right  is exercised
      (determined  by  subtracting  the  aggregate  Exercise  Price  in  effect
      immediately  prior  to  the  exercise  of  the  Conversion Right from the
      aggregate Current Market Price for the Common Stock  immediately prior to
      the exercise of the Conversion Right by (y) the Current  Market  Price of
      the Common Stock.

      2.2.  Payment of Exercise Price.  Payment of the aggregate Exercise Price
may be made in cash or by check, or any combination thereof.

      2.3.  Issuance of Shares.  Upon surrender of this Warrant and payment  of
the  applicable  Exercise  Price,  the  Company  shall  issue  and  cause to be
delivered  with  all  reasonable  dispatch to or upon the written order of  the
Holder and in the name or names the  Holder  may  designate,  a  certificate or
certificates  for  the  number  of  full  Warrant Shares so purchased upon  the
exercise of this Warrant, together with cash, as provided in Section 12 hereof,
in respect of any fraction of a Warrant Share  that  would  otherwise have been
issuable upon exercise of this Warrant.

      2.4.  Status as Holder of Shares.  Upon receipt of this  Warrant  by  the
company  following any exercise by the Holder, the Holder shall be deemed to be
the  holder   of   record   of  the  Warrant  Shares  issuable  upon  exercise,
notwithstanding that the transfer  books  of  the Company may then be closed or
that certificates representing the Warrant Shares may not have been prepared or
actually delivered to the Holder.

      SECTION 3.  TRANSFERABILITY AND FORM OF WARRANT

      3.1.  Limitation on Transfer.  Any assignment or transfer of this Warrant
shall  be  made by presentation and surrender hereof  to  the  Company  at  its
principal office  or the office of its transfer agent, if any, accompanied by a
duly executed Assignment  Form.   Upon  the presentation and surrender of these
items  to the Company, the Company, at its  sole  expense,  shall  execute  and
deliver  to  the  transferee  or  transferees  of this Warrant a new Warrant or
Warrants, in the name of the transferee or transferees  named in the Assignment
Form, and this Warrant shall at that time be canceled.

      3.2.  Exchange of Certificate.  This Warrant may be exchanged for another
Warrant or Warrants entitling the Warrantholder to purchase  a  like  aggregate
number  of  Warrant Shares as the Warrant or Warrants surrendered then entitled
the Warrantholder  to  purchase.   Any  Warrantholder  desiring  to  exchange a
Warrant  shall  make  a request in writing delivered to the Company, and  shall
surrender, properly endorsed,  with  signatures  guaranteed,  the Warrant to be
exchanged.   Thereupon,  the  Company shall execute and deliver to  the  person
entitled thereto a new Warrant as requested.

      3.3.  Mutilated, Lost, Stolen,  or  Destroyed  Certificate.   In case the
certificate  evidencing  this  Warrant  shall  be  mutilated,  lost, stolen  or
destroyed,  the Company shall, at the request of the Warrantholder,  issue  and
deliver in exchange and substitution for and upon cancellation of the mutilated
certificate, or in lieu of and substitution for the certificate lost, stolen or
destroyed, a  new  Warrant  of  like  tenor representing an equivalent right or
interest, but only upon receipt of evidence  satisfactory to the Company of the
loss,  theft  or  destruction  of  the Warrant and  a  bond  of  indemnity,  if
requested, also satisfactory in form  and  amount,  at  the  applicant's  cost.
Applicants  for substitute Warrants shall also comply with any other reasonable
regulations and pay any other reasonable charges the Company may request.

      SECTION 4.  ADJUSTMENT OF NUMBER OF SHARES

      The number  and  kind of securities purchasable upon the exercise of this
Warrant and the Exercise Price payable shall be subject to adjustment from time
to time upon the happening of certain events, as follows:

      4.1.  Adjustments.   The  number  of  Warrant Shares purchasable upon the
exercise of this Warrant and the Exercise Price shall be subject to adjustments
as follows:

            (a)   In case the Company shall (i)  pay a dividend in Common Stock
      or  make  a  distribution  to  its  stockholders in  Common  Stock,  (ii)
      subdivide its outstanding Common Stock,  (iii)  combine  its  outstanding
      Common  Stock  into  a smaller number of shares of Common Stock, or  (iv)
      issue by classification  of  its  Common  Stock  other  securities of the
      Company, then in any of the foregoing cases, the number of Warrant Shares
      purchasable upon exercise of the Warrant immediately prior  thereto shall
      be  adjusted  so that the Warrantholder shall be entitled to receive  the
      kind and number of Warrant Shares or other securities of the Company that
      it would have owned  or  would  have been entitled to receive immediately
      after the happening of any of the events described above, had the Warrant
      been exercised immediately prior  to  the  happening  of the event or any
      record date with respect thereto.  Any adjustment made  pursuant  to this
      subsection  4.1(a) shall become effective immediately after the effective
      date of the event retroactive to the record date, if any, for the event.

            (b)   If  the  Company  shall  issue  rights, options, warrants, or
      convertible securities to all or substantially  all holders of its Common
      Stock, without any charge to the holders, entitling them to subscribe for
      or purchase Common Stock at a price per share that is lower at the record
      date mentioned below than the then Current Market  Price,  the  number of
      Warrant  Shares  thereafter purchasable upon the exercise of this Warrant
      shall  be  determined   by  multiplying  the  number  of  Warrant  Shares
      theretofore purchasable upon  exercise of this Warrant by a fraction, the
      numerator  of  which  shall be the  number  of  shares  of  Common  Stock
      outstanding immediately  prior  to  the  issuance of the rights, options,
      warrants or convertible securities, plus the  number of additional shares
      of Common Stock offered for subscription or purchase, and the denominator
      of  which  shall  be  the  number of shares of Common  Stock  outstanding
      immediately prior to the issuance  of  the  rights, options, warrants, or
      convertible securities, plus the number of shares  of  Common  Stock that
      the aggregate offering price of the total number of shares offered  would
      purchase  at  the  Current  Market  Price  as  of  the  record date.  The
      adjustment   shall  be  made  whenever  rights,  options,  warrants,   or
      convertible securities are issued, and shall become effective immediately
      and  retroactively   to   the   record  date  for  the  determination  of
      stockholders  entitled  to receive  the  rights,  options,  warrants,  or
      convertible securities.

            (c)   If the Company  shall  distribute to all or substantially all
      holders  of its Common Stock evidences  of  its  indebtedness  or  assets
      (excluding  cash  dividends  or distributions out of earnings) or rights,
      options, warrants, or convertible  securities  containing  the  right  to
      subscribe  for  or  purchase Common Stock (excluding those referred to in
      subsection 4.1(b) above),  then in each case the number of Warrant Shares
      thereafter  purchasable upon  the  exercise  of  this  Warrant  shall  be
      determined by  multiplying  the  number  of  Warrant  Shares  theretofore
      purchasable  upon  exercise  of this Warrant by a fraction, of which  the
      numerator  shall  be  the  then Current  Market  Price  on  the  date  of
      distribution, and the denominator  of  which  shall be the Current Market
      Price on the date of distribution minus the then  fair  value (determined
      as provided in subparagraph (e) below) of the portion of  the  assets  or
      evidences  of  indebtedness so distributed or of the subscription rights,
      options, warrants,  or  convertible  securities  applicable to one share.
      The adjustment shall be made whenever any distribution  is made and shall
      become effective on the date of distribution retroactive  to  the  record
      date  for  the  determination  of  stockholders  entitled  to receive the
      distribution.

            (d)   No  adjustment  in  the  number of Warrant Shares purchasable
      pursuant to this Warrant shall be required  unless  the  adjustment would
      require an increase or decrease of at least one percent in  the number of
      Warrant Shares then purchasable upon the exercise of this Warrant  or, if
      this  Warrant  is  not  then  exercisable,  the  number of Warrant Shares
      purchasable  upon  the  exercise  of  this  Warrant  on  the  first  date
      thereafter that this Warrant becomes exercisable; provided, however, that
      any  adjustments  which  by  reason of this subsection (4.1(d))  are  not
      required to be made immediately  shall  be carried forward and taken into
      account in any subsequent adjustment.

            (e)   Whenever the number of Warrant  Shares  purchasable  upon the
      exercise  of  this  Warrant is adjusted, as herein provided, the Exercise
      Price  payable  upon exercise  of  this  Warrant  shall  be  adjusted  by
      multiplying the Exercise  Price  immediately prior to the adjustment by a
      fraction, the numerator of which shall  be  the  number of Warrant Shares
      purchasable  upon the exercise of the Warrant immediately  prior  to  the
      adjustment, and  the  denominator of which shall be the number of Warrant
      Shares so purchasable immediately thereafter.

            (f)   Whenever  the  number  of  Warrant  Shares  purchasable  upon
      exercise of this Warrant  is  adjusted  as  herein  provided, the Company
      shall  cause to be promptly mailed to the Warrantholder  by  first  class
      mail, postage  prepaid, notice of the adjustment and a certificate of the
      chief financial  officer  of  the  Company  setting  forth  the number of
      Warrant  Shares purchasable upon the exercise of this Warrant  after  the
      adjustment,  a  brief statement of the facts requiring the adjustment and
      the computation by which the adjustment was made.

            (g)   For the  purpose of this Section 4.1, the term "Common Stock"
      shall mean (i) the class  of  stock designated as the Common Stock of the
      Company as of the Issue Date of  this Warrant, or (ii) any other class of
      stock  resulting  from successive changes  or  reclassifications  of  the
      Common Stock consisting solely of changes in par value, or from par value
      to no par value, or  from no par value to par value.  If, at any time, as
      a  result  of  an  adjustment  made  pursuant  to  this  Section  4,  the
      Warrantholder shall  become  entitled  to  purchase any securities of the
      Company other than Common Stock, then (y) if the Warrantholder's right to
      purchase is on any other basis than that available  to all holders of the
      Company's  Common  Stock,  the  Company  shall  obtain an opinion  of  an
      independent investment banking firm valuing the other  securities and (z)
      thereafter the number of other securities so purchasable upon exercise of
      this Warrant shall be subject to adjustment from time to time in a manner
      and on terms as nearly equivalent as practicable to the  provisions  with
      respect to the Warrant Shares contained in this Section 4.

            (h)   Upon  the  expiration  of  any  rights, options, warrants, or
      conversion privileges, if they shall have not  been exercised, the number
      of  Warrant  Shares  purchasable upon exercise of the  Warrants,  to  the
      extent the Warrants have  not  then  been  exercised,  shall,  upon  such
      expiration, be readjusted and shall thereafter be as they would have been
      had  they  been  originally  adjusted (or had the original adjustment not
      been required, as the case may  be) on the basis of (i) the fact that the
      only shares of Common Stock so issued were the shares of Common Stock, if
      any, actually issued or sold upon  the  exercise  of the rights, options,
      warrants, or conversion privileges, and (ii) the fact  that the shares of
      Common Stock, if any, were issued or sold for the consideration  actually
      received by the Company upon the exercise plus the consideration, if any,
      actually  received by the Company for the issuance, sale or grant of  all
      such rights,  options,  warrants, or conversion privileges whether or not
      exercised; provided, however,  that no readjustment shall have the effect
      of decreasing the number of Warrant  Shares  purchasable upon exercise of
      this  Warrant  by  an amount in excess of the amount  of  the  adjustment
      initially made in respect of the issuance, sale, or grant of such rights,
      options, warrants, or conversion rights.

      4.2.  No Adjustment for Dividends.  Except as provided in Section 4.1, no
adjustment in respect of any  dividends  or distributions out of earnings shall
be made during the term, or upon the exercise, of this Warrant.

      4.3.  No  Adjustment in Certain Cases.   No  adjustments  shall  be  made
pursuant to Section  4  hereof  in  connection  with the issuance of the Common
Stock  upon the conversion, if any, of the Company's  12%  Secured  Convertible
Promissory  Notes  or exercise of any warrants issued to the holders thereof in
connection therewith.   No  adjustments  shall  be  made  pursuant to Section 4
hereof  in  connection  with the grant or exercise of presently  authorized  or
outstanding options to purchase,  or  the  issuance  of  shares of Common Stock
under, the Company's director or employee benefit plan.

      4.4.  Preservation    of    Purchase    Rights   upon   Reclassification,
Consolidation, etc.  In case of any consolidation of the Company with or merger
of the Company into another corporation, or in  case  of any sale or conveyance
to another corporation of the property, assets, or business  of  the Company as
an  entirety  or  substantially  as  an  entirety, the Company or successor  or
purchasing  corporation,  as  the  case  may  be,   shall   execute   with  the
Warrantholder  an  agreement  that  the  Warrantholder  shall  have  the  right
thereafter  upon  payment  of the Exercise Price in effect immediately prior to
the action to purchase, upon  exercise  of this Warrant, the kind and amount of
shares and other securities and property  that it would have owned or have been
entitled to receive after the happening of  the consolidation, merger, sale, or
conveyance had this Warrant been exercised immediately prior to the action.  In
the event of a merger described in Section 368(a)(2)(E) of the Internal Revenue
Code of 1986, in which the Company is the surviving  corporation,  the right to
purchase  Shares under the Warrants shall terminate on the date of such  merger
and thereupon  the  Warrants  shall  become  null  and  void,  but  only if the
controlling  corporation  shall  agree  to  substitute  for  the  Warrants, its
warrants  which entitle the holder thereof to purchase upon their exercise  the
kind and amount of shares and other securities and property which it would have
owned or been  entitled  to receive had the Warrants been exercised immediately
prior to such merger.  Any  such  agreements  referred  to  in this Section 4.4
shall provide for adjustments, which shall be as nearly equivalent  as  may  be
practicable  to  the  adjustments  provided  for  in  Section  4  hereof.   The
provisions   of   this  Section  (4.4)  shall  similarly  apply  to  successive
consolidations, mergers, sales, or conveyances.

      4.5.  Par Value  of  Shares  of  Common  Stock.  Before taking any action
which  would  cause  an  adjustment effectively reducing  the  portion  of  the
Exercise Price allocable to  each  Share  below  the par value per share of the
Common Stock issuable upon exercise of the Warrants,  the Company will take any
corporate  action  which may, in the opinion of its counsel,  be  necessary  in
order  that  the  Company   may  validly  and  legally  issue  fully  paid  and
nonassessable Common Stock upon exercise of the Warrants.

      4.6.  Independent Public  Accountants.   The Company may retain a firm of
independent public accountants of recognized national  standing  (which  may be
any  such  firm  regularly  employed  by  the  Company) to make any computation
required under this Section 4, and a certificate  signed  by  the firm shall be
conclusive  evidence  of  the  correctness of any computation made  under  this
Section 4.

      4.7.  Treasury Stock.  For  purposes  of this Section 4, shares of Common
Stock  owned  or held at any relevant time by,  or  for  the  account  of,  the
Company, in its  treasury  or  otherwise, shall not be deemed to be outstanding
for purposes of the calculations and adjustments described.

      SECTION 5.  NOTICE TO HOLDERS

      If, prior to the expiration of this Warrant either by its terms or by its
exercise in full, any of the following shall occur:

            (a)   the Company shall  declare  a dividend or authorize any other
      distribution on its Common Stock; or

            (b)   the Company shall authorize the  granting to the shareholders
      of its Common Stock of rights to subscribe for or purchase any securities
      or any other similar rights; or

            (c)   any reclassification, reorganization or similar change of the
      Common Stock, or any consolidation or merger to  which  the  Company is a
      party, or the sale, lease, or exchange of any significant portion  of the
      assets of the Company; or

            (d)   the  voluntary  or  involuntary  dissolution,  liquidation or
      winding up of the Company; or

            (e)   any purchase, retirement or redemption by the Company  of its
      Common Stock;

then,  and in any such case, the Company shall deliver to the Holder or Holders
written  notice  thereof at least 30 days prior to the earliest applicable date
specified below with respect to which notice is to be given, which notice shall
state the following:

            (x)   the  date on which a record is to be taken for the purpose of
      the dividend, distribution or rights, or, if a record is not to be taken,
      the date as of which  the  holders  of Common Stock of record entitled to
      the dividend, distribution or rights will be determined;

            (y)   the  date  on  which  any  reclassification,  reorganization,
      consolidation, merger, sale, transfer, dissolution,  liquidation, winding
      up or purchase, retirement or redemption is expected to become effective,
      and the date, if any, as of which the Company's holders  of  Common Stock
      of record shall be entitled to exchange their Common Stock for securities
      or  other property deliverable upon the reclassification, reorganization,
      consolidation,  merger, sale, transfer, dissolution, liquidation, winding
      up, purchase, retirement or redemption; and

            (z)   if any  matters  referred to in the foregoing clauses (x) and
      (y) are to be voted upon by holders of Common Stock, the date as of which
      the shareholders entitled to vote will be determined.

      SECTION 6.  OFFICERS' CERTIFICATE

      Whenever the Exercise Price or  the  aggregate  number  of Warrant Shares
purchasable  pursuant  to  this  Warrant shall be adjusted as required  by  the
provisions  of  Section 4 above, the  Company  shall  promptly  file  with  its
Secretary or an Assistant  Secretary  at  its  principal  office,  and with its
transfer  agent,  if  any,  an  officers' certificate executed by the Company's
President and Secretary or Assistant  Secretary,  describing the adjustment and
setting forth, in reasonable detail, the facts requiring the adjustment and the
basis for and calculation of the adjustment in accordance  with  the provisions
of  this  Warrant.  Each such officers' certificate shall be made available  to
the Holder  or  Holders of this Warrant for inspection at all reasonable times,
and the Company,  after  each  adjustment, shall promptly deliver a copy of the
officers' certificate relating to  that  adjustment to the Holder or Holders of
this Warrant.  The officers' certificate described  in  this Section 6 shall be
deemed  to  be  conclusive  as  to the correctness of the adjustment  reflected
therein if, and only if, no Holder  of  this Warrant delivers written notice to
the  Company  of  an  objection to the adjustment  within  30  days  after  the
officers' certificate is  delivered  to  the Holder or Holders of this Warrant.
The  Company  will  make its books and records  available  for  inspection  and
copying  during normal  business  hours  by  the  Holder  so  as  to  permit  a
determination  as  to the correctness of the adjustment.  Failure to prepare or
provide  the  officers'  certificate  shall  not  modify  the  parties'  rights
hereunder.

      SECTION 7.  RESERVATION OF WARRANT SHARES

      There has been reserved, and the Company shall at all times keep reserved
so long as this Warrant remains outstanding, out of its authorized and unissued
Common Stock, a number of shares of Common Stock sufficient to support the full
exercise  hereof.   Every  transfer  agent  for  the  Common  Stock  and  other
securities  of  the  Company issuable upon the exercise of this Warrant will be
irrevocably authorized  and  directed  at  all  times  to  reserve  a number of
authorized shares and other securities as shall be requisite for such  purpose.
The Company will keep a copy of this Warrant on file with every transfer  agent
for  the  Common  Stock  and  other securities of the Company issuable upon the
exercise of this Warrant.  The  Company  will  supply every transfer agent with
duly executed stock and other certificates, as appropriate,  for  such  purpose
and  will provide or otherwise make available any cash which may be payable  as
provided in Section 11 hereof.

      SECTION 8.  RESTRICTIONS ON TRANSFER.

      The  Warrantholder  agrees  that  prior to making any disposition of this
Warrant or the Warrant Shares, the Warrantholder  shall  give written notice to
the Company describing briefly the manner in which any proposed  disposition is
to  be  made; and no disposition shall be made if the Company has notified  the
Warrantholder  that,  in  the opinion of counsel reasonably satisfactory to the
Warrantholder, a registration statement or other notification or post-effective
amendment thereto (hereinafter  collectively  a "Registration Statement") under
the  Act  is  required  with  respect to the disposition  and  no  Registration
Statement  has been filed by the  Company  with,  and  declared  effective,  if
necessary, by, the Commission.

      SECTION 9.  PAYMENT OF TAXES

      The Company will pay all documentary stamp taxes, if any, attributable to
the initial  issuance  of this Warrant or the shares of Common Stock comprising
the Warrant Shares; provided, however, the Company shall not be required to pay
any tax that may be payable  in  respect  of  any  transfer  of the Warrants or
Warrant Shares.

      SECTION 10. TRANSFER TO COMPLY WITH THE SECURITIES ACT OF 1933

      This  Warrant,  the  Warrant Shares, and any other securities  issued  or
issuable  upon  exercise  of  this   Warrant,  may  not  be  offered,  sold  or
transferred, in whole or in part, except in compliance with the Act, and except
in compliance with all applicable state securities laws.  The Company may cause
substantially the following legends, or  their  equivalents, to be set forth on
each certificate representing the Warrant Shares  and any other security issued
or issuable upon exercise of this Warrant, not theretofore  distributed  to the
public or sold to underwriters, as defined by the Act, for distribution to  the
public:

            (a)   "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
      BEEN  REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES
      LAWS AND  MAY  NOT BE SOLD, EXCHANGED, HYPOTHECATED OR TRANSFERRED IN ANY
      MANNER EXCEPT IN  COMPLIANCE  WITH  SUCH LAWS AND THE WARRANT PURSUANT TO
      WHICH THEY WERE ISSUED."

            (b)   Any legend required by applicable state securities laws.

      Any certificate issued at any time in  exchange  or  substitution for any
certificate  bearing  such  legends  (except  a  new  certificate  issued  upon
completion of a public distribution pursuant to a registration statement  under
the  Securities  Act  of  1933,  as  amended  (the  "Act"),  or  the securities
represented thereby) shall also bear the above legends unless, in  the  opinion
of the Company's counsel, the securities represented thereby need no longer  be
subject to such restrictions.

      SECTION 11. FRACTIONAL SHARES

      No  fractional  shares  or  scrip representing fractional shares shall be
issued upon the exercise of all or  any  part of this Warrant.  With respect to
any fraction of a share of any security called  for  upon  any exercise of this
Warrant, the Company shall pay to the Holder an amount in money  equal  to that
fraction multiplied by the Current Market Price of that share.

      SECTION 12. NO RIGHTS AS STOCKHOLDER; NOTICES TO WARRANTHOLDER

      Nothing  contained in this Warrant shall be construed as conferring  upon
the Warrantholder  or  its  transferees  any  rights  as  a  stockholder of the
Company,  including  the right to vote, receive dividends, consent  or  receive
notices as a stockholder  in  respect  to  any  meeting of stockholders for the
election  of  directors  of  the  Company  or any other  matter.   The  Company
covenants, however, that for so long as this  Warrant  is  at  least  partially
unexercised,  it  will  furnish  any Holder of this Warrant with copies of  all
reports and communications furnished  to  the  shareholders of the Company.  In
addition, if at any time prior to the expiration  of  the Warrants and prior to
their exercise, any one or more of the following events shall occur:

            (a)   any  action  which  would require an adjustment  pursuant  to
      Section 4.1 (except subsections 4.1(e) and 4.1(h) or 4.4; or

            (b)  a dissolution, liquidation,  or  winding  up  of  the  Company
      (other  than  in connection with a consolidation, merger, or sale of  its
      property, assets,  and  business  as  an  entirety or substantially as an
      entirety) shall be proposed:

then  the  Company  shall  give  notice  in  writing  of   the   event  to  the
Warrantholder, as provided in Section 15 hereof, at least 20 days  prior to the
date fixed as a record date or the date of closing the transfer books  for  the
determination   of   the   stockholders  entitled  to  any  relevant  dividend,
distribution, subscription rights  or  other rights or for the determination of
stockholders  entitled to vote on such proposed  dissolution,  liquidation,  or
winding up.  The  notice  shall  specify the record date or the date of closing
the transfer books, as the case may  be.   Failure to mail or receive notice or
any  defect therein shall not affect the validity  of  any  action  taken  with
respect thereto.

      SECTION 13. CHARGES DUE UPON EXERCISE

      The Company shall pay any and all issue or transfer taxes, including, but
not limited to, all federal or state taxes, that may be payable with respect to
the transfer  of  this  Warrant or the issue or delivery of Warrant Shares upon
the exercise of this Warrant.

      SECTION 14. WARRANT SHARES TO BE FULLY PAID

      The Company covenants  that  all  Warrant  Shares  that may be issued and
delivered  to a Holder of this Warrant upon the exercise of  this  Warrant  and
payment of the  Exercise  Price  will  be, upon such delivery, validly and duly
issued, fully paid and nonassessable.

      SECTION 15. NOTICES

      Any notice pursuant to this Warrant  by the Company or by a Warrantholder
or a holder of Shares shall be in writing and shall be deemed to have been duly
given if delivered or mailed by certified mail, return receipt requested:

      (i)   If  to a Warrantholder or a holder  of  Shares,  addressed  to  the
address set forth above.

      (ii)  If to  the  Company  addressed  to  it at 414 North Orleans Street,
Suite 510, Chicago, Illinois 60610, Attention:  President.

      Each party may from time to time change the  address  to which notices to
it are to be delivered or mailed hereunder by notice in accordance  herewith to
the other party.

      SECTION 16. MERGER OR CONSOLIDATION OF THE COMPANY

      The  Company  will  not  merge  or  consolidate  with  or  into any other
corporation  or  sell  all  or  substantially  all  of  its property to another
corporation,  unless  in connection therewith, the Company  complies  with  the
provisions of Section 4.4 hereof.

      SECTION 17. APPLICABLE LAW

      This Warrant shall  be  governed  by and construed in accordance with the
internal laws (as opposed to conflicts of  law  provisions)  of  the  State  of
Illinois, and courts located in Illinois shall have exclusive jurisdiction over
all disputes arising hereunder.

      SECTION 18. ACCEPTANCE OF TERMS; SUCCESSORS.

      By  its  acceptance  of  this  Warrant,  the Holder accepts and agrees to
comply  with all of the terms and provisions hereof.   All  the  covenants  and
provisions  of  this Warrant by or for the benefit of the Company or the Holder
shall bind and inure  to the benefit of their respective successors and assigns
hereunder.

      SECTION 19. MISCELLANEOUS PROVISIONS

      (a)   Subject to  the terms and conditions contained herein, this Warrant
shall be binding on the Company  and  its  successors  and  shall  inure to the
benefit  of the original Holder, its successors and assigns and all holders  of
Warrant Shares and the exercise of this Warrant in full shall not terminate the
provisions of this Warrant as it relates to holders of Warrant Shares.

      (b)   If  the  Company fails to perform any of its obligations hereunder,
it shall be liable to  the Holder for all damages, costs and expenses resulting
from the failure, including, but not limited to, all reasonable attorney's fees
and disbursements.

      (c)   This Warrant  cannot be changed or terminated or any performance or
condition waived in whole or  in  part except by an agreement in writing signed
by the party against whom enforcement  of  the change, termination or waiver is
sought; provided, however, that any provisions  hereof  may be amended, waived,
discharged  or  terminated  upon  the written consent of the  Company  and  the
Company.

      (d)   If any provision of this  Warrant  shall  be  held  to  be invalid,
illegal  or  unenforceable,  the  provision  shall be severed, enforced to  the
extent possible, or modified in such a way as  to  make it enforceable, and the
invalidity, illegality or unenforceability shall not  affect  the  remainder of
this Warrant.

      (e)   The  Company agrees to execute any further agreements, conveyances,
certificates and other  documents  as may be reasonably requested by the Holder
to effectuate the intent and provisions of this Warrant.

      (f)   Paragraph headings used  in  this  Warrant are for convenience only
and shall not be taken or construed to define or  limit  any  of  the  terms or
provisions  of  this Warrant.  Unless otherwise provided, or unless the context
shall otherwise require,  the  use of the singular shall include the plural and
the use of any gender shall include all genders.

      IN  WITNESS WHEREOF, the Company  has  caused  this  Warrant  to  be duly
executed and issued as of the Issue Date first set forth above.



                                    MOLECULAR DIAGNOSTICS, INC.


                                    By:   _______________________________
                                          Peter P. Gombrich
                                          Chief Executive Officer


<PAGE>
                                 PURCHASE FORM

                                                         Dated  _________, ____


      The undersigned hereby irrevocably elects to exercise this Warrant to the
extent  of  purchasing  ______________  shares of the Common Stock of Molecular
Diagnostics, Inc. and tenders payment of the exercise price thereof.

                    INSTRUCTIONS FOR REGISTRATION OF STOCK


      Name  _______________________________________________________
                    (Please type or print in block letters)



      Address______________________________________________________

................................................................................

                                ASSIGNMENT FORM

      FOR  VALUE  RECEIVED,  _________________,   hereby   sells,  assigns  and
transfers unto



      Name  _______________________________________________________
                    (Please type or print in block letters)

      Address______________________________________________________



the right to purchase           shares  Common Stock of Molecular  Diagnostics,
Inc. (the "Company") represented by this  Warrant  and  does hereby irrevocably
constitute  and appoint the Company as its attorney-in-fact,  to  transfer  the
same on the books  of  the  Company  with  full  power  of  substitution in the
premises.

      Signature                                  Dated

NOTICE:  THE SIGNATURE ON THIS ASSIGNMENT MUST CORRESPOND WITH  THE  NAME AS IT
APPEARS  UPON  THE FACE OF THIS WARRANT IN EVERY PARTICULAR, WITHOUT ALTERATION
OR ENLARGEMENT OR ANY CHANGE WHATEVER.