SETTLEMENT AGREEMENT AND MUTUAL RELEASE

      This Settlement and Release  Agreement (the  "Agreement") is made this ___
day of October,  2005, by and between The Lash Group, Inc.  ("Lash"),  Molecular
Diagnostics,  Inc.  ("MDI")  and  Peter  Gombrich  ("Gombrich")  (Lash,  MDI and
Gombrich hereinafter collectively referred to as the "Parties").

                                    RECITALS

      WHEREAS,  on or about  February  15,  2002,  the Parties  entered  into an
agreement;  and

      WHEREAS,  Lash alleges to have provided certain consulting services to MDI
and that MDI has failed to compensate Lash for those services; and

      WHEREAS,  a dispute  has arisen  between  the  Parties  relating  to their
respective  obligations under the Agreement and with regard to services provided
by Lash (the "Dispute"); and

      WHEREAS,  the  Parties  have  agreed to settle the  Dispute and thereby to
resolve finally and completely all issues arising out of their current and prior
dealings.

                         AGREEMENT AND RELEASE OF CLAIMS

      NOW,  THEREFORE,  in  consideration  of the various  mutual  promises  and
undertakings set forth herein, the Parties agree as follows:

      1. MDI and Gombrich  shall each execute a Confession  of Judgment,  a true
and  accurate  copy of which is  attached  hereto as Exhibit A and  incorporated
herein by reference (the "Confession of Judgment").


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<PAGE>

      2. Lash, on behalf of Lash and any person or entity claiming by or through
it, does hereby  release MDI and  Gombrich and the "Other  Released  Parties" as
defined  below from any and all  claims,  demands,  actions and causes of action
arising out of or relating to the Dispute,  known or unknown, from the beginning
of time to the date of this  Settlement  Agreement,  except for the  obligations
arising out of this  Settlement  Agreement and the  Confession of Judgment.  The
term "Other  Released  Parties" as used in this paragraph  shall include any and
all legal representatives,  employees, agents, officers, directors,  successors,
affiliated companies and assigns of MDI.

      3. Upon receipt of the full Settlement  Amount (as such term is defined in
the  Confession  of Judgment)  Lash does hereby  release  MDI,  Gombrich and the
"Other Released Parties" from any and all claims, demands,  actions or causes of
action arising out of or relating to the Dispute and until the Settlement Amount
is paid in full, Lash reserves its rights under the Confession of Judgment.  The
term "Other  Released  Parties" as used in this paragraph  shall include any and
all legal representatives,  employees, agents, officers, directors,  successors,
affiliated companies and assigns of MDI.

      4. Gombrich,  on behalf of himself and any person or entity claiming by or
through him, does hereby  release Lash and the Other  Released  Parties from any
and all claims, demands, actions and causes of action arising out of or relating
to the Dispute, known or unknown, from the beginning of time to the date of this
Settlement  Agreement.  The  term  "Other  Released  Parties"  as  used  in this
paragraph shall include any and all legal  representatives,  employees,  agents,
officers,  directors,  successors,  affiliated  companies  and  assigns of Lash.
Nothing contained in this agreement is intended to release any past, current, or
future claims that Gombrich has or may have against MDI.

      5.  MDI,  on  behalf of itself  and any  person or entity  claiming  by or
through them,  does hereby release Lash and the Other Released  Parties from any
and all claims, demands, actions and causes of action arising out of or relating
to the Dispute, known or unknown, from the beginning of time to the date of this
Settlement  Agreement.  The  term  "Other  Released  Parties"  as  used  in this
paragraph shall include any and all legal  representatives,  employees,  agents,
officers,  directors,  successors,  affiliated  companies  and  assigns of Lash.
Nothing contained in this agreement is intended to release any past, current, or
future claims that MDI has or may have against Gombrich.


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      6. MDI, Lash and Gombrich  respectively  warrant and  represent  that they
have not  assigned,  transferred  or conveyed in any manner any claims or rights
released by this Settlement  Agreement,  and each of them agree to indemnify and
hold the other harmless from any breach of this representation and warranty.

      7. This  Settlement  Agreement  shall  not be filed  with the court in the
Action.

      8. This  Settlement  Agreement  shall be  governed by and  interpreted  in
accordance  with the laws of the State of North  Carolina as they are applied to
contracts made and to be wholly  performed in this State,  without regard to any
choice of law rules to the contrary.

      9. This  Settlement  Agreement  represents  the  entire  agreement  of the
parties  and may not be  amended  orally.

      10. The Parties entered into this Settlement Agreement freely and have not
in any way relied upon the advice of any  representative of the other Parties or
anyone associated with the other Parties.

      11.  This  Settlement  Agreement  shall be  binding  upon and inure to the
benefit  of the  Parties  hereto  and their  respective  heirs,  administrators,
successors, employees and assigns.

      12. The invalidity or unenforceability of any particular provision of this
Settlement  Agreement  shall not affect the other  provisions  hereof,  and this
Settlement  Agreement  shall be  construed in all respects as if such invalid or
unenforceable provisions were omitted.


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      13.  Nothing in this  Settlement  Agreement  shall not be  construed as an
admission of liability on behalf of Gombrich or MDI.


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<PAGE>

                              MOLECULAR DIAGNOSTICS, INC.


                              By:
                                  --------------------------------
                              Title:
                                    ------------------------------
                              Date:
                                   -------------------------------


STATE OF _________________________

COUNTY OF _______________________

      I,  __________________,  a Notary  Public for said  county  and state,  do
hereby certify that ________________ on behalf of Molecular  Diagnostics,  Inc.,
personally appeared before me this day and acknowledged the due execution of the
foregoing instrument.

      Witness   my  hand   and   official   seal,   this   the   _____   day  of
____________________, 2005.

                                    -------------------------------
                                    Notary Public

My Commission Expires: ________________


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<PAGE>

                              ------------------------------------
                              PETER GOMBRICH

                              Date:
                                   -------------------------------

STATE OF _________________

COUNTY OF _______________

      I,  __________________,  a Notary  Public for said  county  and state,  do
hereby certify that Peter Gombrich  personally  appeared  before me this day and
acknowledged the due execution of the foregoing instrument.

      Witness   my  hand   and   official   seal,   this   the   _____   day  of
__________________, 2005.

                                    -------------------------------
                                    Notary Public

My Commission Expires: ________________


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<PAGE>


                              THE LASH GROUP, INC.

                              By:
                                  --------------------------------
                              Title:
                                    ------------------------------
                              Date:
                                   -------------------------------


STATE OF NORTH CAROLINA

COUNTY OF MECKLENBURG

      I,  __________________,  a Notary  Public for said  county  and state,  do
hereby  certify  that  ________________  on  behalf  of The  Lash  Group,  Inc.,
personally appeared before me this day and acknowledged the due execution of the
foregoing instrument.

      Witness   my  hand   and   official   seal,   this   the   _____   day  of
____________________, 2005.

                                    -------------------------------
                                    Notary Public

My Commission Expires: ________________


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