Exhibit 4.7

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                            STOCK PURCHASE AGREEMENT

                                     BETWEEN

                           MOLECULAR DIAGNOSTICS, INC.
                                       AND

                             SEASIDE INVESTMENTS PLC


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

                                 OCTOBER 5, 2004

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



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Marked to show changes from7/14/04 draft

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TABLE OF CONTENTS

ARTICLE I         CERTAIN DEFINITIONS..........................................1
         1.1      Certain Definitions..........................................1

ARTICLE II        PURCHASE AND SALE OF SHARES..................................4
         2.1      Purchase and Sale; Purchase Price............................4
         2.2      Execution and Delivery of Documents; The Closing.............4

ARTICLE III       REPRESENTATIONS AND WARRANTIES...............................6
         3.1      Representations, Warranties and Agreements of the Target
                  Company......................................................6
         3.2      Representations and Warranties of Seaside....................9

ARTICLE IV        OTHER AGREEMENTS OF THE PARTIES.............................12
         4.1      Manner of Offering..........................................12
         4.2      Notice of Certain Events....................................12
         4.3      Blue Sky Laws...............................................12
         4.4      Integration.................................................13
         4.5      Furnishing of Rule 144(c) Materials.........................13
         4.6      Solicitation Materials......................................13
         4.7      Listing of Common Stock.....................................13
         4.8      Indemnification.............................................13
         4.9      Sale of Seaside Shares......................................15
         4.10     Lock Up by Seaside..........................................15
         4.11     Short Sales.................................................15
         4.12     Liquidation of Consideration Stock..........................16
         4.13     Definitive Certificates.....................................16
         4.14     London Stock Exchange.......................................16
         4.15     Liquidation of Seaside Consideration Shares.................16

ARTICLE V         MISCELLANEOUS...............................................16
         5.1      Fees and Expenses...........................................16
         5.2      Entire Agreement............................................17
         5.3      Notices.....................................................17
         5.4      Amendments; Waivers.........................................18
         5.5      Headings....................................................18
         5.6      Successors and Assigns......................................18
         5.7      No Third Party Beneficiaries................................18
         5.8      Governing Law; Venue; Service of Process....................18
         5.9      Survival....................................................18
         5.10     Counterpart Signatures......................................18
         5.11     Publicity...................................................19
         5.12     Severability................................................19
         5.13     Limitation of Remedies......................................19


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LIST OF SCHEDULES:

Schedule 3.1(a)   Subsidiaries
Schedule 3.1(c)   Capitalization and Registration Rights
Schedule 3.1(d)   Equity and Equity Equivalent Securities
Schedule 3.1(e)   Conflicts
Schedule 3.1(f)   Consents and Approvals
Schedule 3.1(g)   Litigation
Schedule 3.1(h)   Defaults and Violations


LIST OF EXHIBITS:

Exhibit A         Escrow Agreement
Exhibit B         Officer's Certificate
Exhibit C         Registration Rights Agreement



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<PAGE>

         THIS STOCK PURCHASE  AGREEMENT  (this  "Agreement") is made and entered
into as of October 5, 2004, between Molecular  Diagnostics,  Inc., a corporation
organized  and  existing  under the laws of the State of Delaware  (the  "Target
Company"),  and Seaside Investments PLC, a corporation  organized under the laws
of England and Wales with its offices at 30 Farringdon Street, London EC4A 4HJ (
"Seaside").

         WHEREAS,  subject  to the  terms  and  conditions  set  forth  in  this
Agreement,  the Target Company  desires to issue and sell to Seaside and Seaside
desires  to  acquire  from the Target  Company  11,000,000  shares of the Target
Company's  common  stock,  par value  $.001 (the  "Common  Stock") for the Total
Purchase Price set forth in Section 2.1(b) below.  The  consideration to be paid
by Seaside  for the Common  Stock  shall be  subject to certain  downside  price
protection (the "Downside Price Protection") provided in Section 2 of the Escrow
Agreement.

         IN CONSIDERATION  of the mutual covenants  contained in this Agreement,
the Target Company and Seaside agree as follows:

                                   ARTICLE I
                               CERTAIN DEFINITIONS


         1.1  Certain  Definitions.  As used in this  Agreement,  and unless the
context  requires a different  meaning,  the  following  terms have the meanings
indicated:

         "Affiliate"  means,  with  respect  to any  Person,  any  Person  that,
directly or  indirectly,  controls,  is controlled by or is under common control
with such Person.  For the purposes of this  definition,  "control"  (including,
with correlative  meanings,  the terms "controlled by" and "under common control
with") shall mean the possession, directly or indirectly, of the power to direct
or cause the direction of the  management  and policies of such Person,  whether
through the ownership of voting securities or by contract or otherwise.

         "Agreement"  shall  have the  meaning  set  forth  in the  introductory
paragraph of this Agreement.

         "Business  Day" means any day except  Saturday,  Sunday,  any day which
shall be a legal holiday or a day on which banking  institutions in the State of
New York are authorized or required by law or other government actions to close.

         "Closing" shall have the meaning set forth in Section 2.2(a) hereof.

         "Closing  Bid Price"  shall mean the  closing  bid price for a share of
Common Stock on such date on the OTCBB (or such other exchange, market, or other
system that the Common Stock is then traded on), as reported on Bloomberg,  L.P.
(or similar  organization  or agency  succeeding  to its  functions of reporting
prices).


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<PAGE>

         "Closing  Date"  shall have the  meaning  set forth in  Section  2.2(a)
hereof.

         "Closing  Price"  shall be the Closing Bid Price of the Common Stock on
the day of Closing.

         "Common Stock" shall have the meaning in the recital.

         "Consideration  Stock"  shall  have the  meaning  set forth in  Section
2.1(a) hereof.

         "Control  Person"  shall have the meaning  set forth in Section  4.8(a)
hereof.

         "Disclosure  Documents" means the Target Company's  reports filed under
the Exchange Act with the SEC.

         "Downside Price Protection" shall have the meaning in the recital.

         "Escrow Agent" means Gottbetter & Partners, LLP, 488 Madison Avenue, 12
Floor, New York, NY 10022; Tel: 212-400-6900; Fax: 212-400-6901.

         "Escrow  Agreement" means the escrow agreement,  dated the date hereof,
by and among the Target Company,  Seaside and the Escrow Agent annexed hereto as
EXHIBIT A.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

         "G&P" means Gottbetter & Partners, LLP.

         "HW" means  Hunter  Wise  Financial  Group,  LLC,  and/or  Hunter  Wise
Securities, LLC, a NASD registered Broker/Dealer,  2171 Campus Drive, Suite 200,
Irvine,  CA  92612;  Tel:  949-852-1700;   Fax:  949-852-1722,  a  non-exclusive
corporate finance advisor to the Target Company.

         "Indemnified  Party" shall have the meaning set forth in Section 4.8(b)
hereof.

         "Indemnifying Party" shall have the meaning set forth in Section 4.8(b)
hereof.

         "Losses" shall have the meaning set forth in Section 4.8(a) hereof.

         "Material  Adverse  Effect" shall have the meaning set forth in Section
3.1(a) hereof.

         "Material"  shall  mean  having a  financial  consequence  in excess of
$25,000.

         "NASD" means the National Association of Securities Dealers, Inc.

         "Nasdaq" shall mean the Nasdaq Stock Market, Inc.(R)

         "OTCBB" shall mean the NASD over-the counter Bulletin Board(R).


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<PAGE>

         "p" shall mean pence or 1/100th of a British Pound Sterling.

         "Person"  means an individual  or a  corporation,  partnership,  trust,
incorporated or  unincorporated  association,  joint venture,  limited liability
company, joint stock company,  government (or an agency or political subdivision
thereof) or other entity of any kind.

         "Private  Placement  Memorandum"  shall have the  meaning  set forth in
Section 3.1(l) hereof.

          "Proceeding" means an action, claim, suit, investigation or proceeding
(including,  without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.

         "Registration Rights Agreement" means the Registration Rights Agreement
in the form of EXHIBIT C annexed hereto.

         "Seaside" shall have the meaning in the introductory paragraph.

         "Seaside Consideration Shares" shall have the meaning in Section 2.1(c)
hereof.

         "Seaside  Escrow  Shares"  means  the  Seaside   Consideration   Shares
deposited  into  escrow by the  Target  Company  under  the terms of the  Escrow
Agreement in EXHIBIT A.

         "Seaside  Protection  Shares" means the Seaside  Escrow Shares that the
Target  Company is  required  to sell to  Seaside  under the terms of the Escrow
Agreement in EXHIBIT A.

         "Seaside Shares" shall mean ordinary shares of 1.0p each in Seaside.

         "SEC" means the Securities and Exchange Commission.

         "Securities Act" means the Securities Act of 1933, as amended.

         "Short Sales" shall have the meaning set forth in Section 4.12 hereof.

         "Subsidiaries"  shall  have the  meaning  set forth in  Section  3.1(a)
hereof.

         "Target  Company" shall have the meaning set forth in the  introductory
paragraph.

         "Total  Purchase  Price"  shall have the  meaning  set forth in Section
2.1(b) hereof.

          "Trading  Day" means (a) a day on which the Common  Stock is quoted on
Nasdaq,  the OTCBB or the principal stock exchange on which the Common Stock has
been listed,  or (b) if the Common  Stock is not quoted on Nasdaq,  the OTCBB or
any  stock  exchange,  a day  on  which  the  Common  Stock  is  quoted  in  the
over-the-counter  market,  as  reported  by the  Pinksheets  LLC (or any similar
organization or agency succeeding its functions of reporting prices).


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<PAGE>

         "Transaction  Documents"  means this  Agreement  and all  exhibits  and
schedules  hereto and all other  documents,  instruments  and writings  required
pursuant to this Agreement.

         "U.S." means the United States.

                                   ARTICLE II

                           PURCHASE AND SALE OF SHARES

         2.1 Purchase and Sale; Purchase Price.

                  (a) Subject to the terms and conditions set forth herein,  the
Target  Company shall issue and sell and Seaside shall  purchase  eleven million
(11,000,000)  shares of the Target  Company's  Common Stock (the  "Consideration
Stock").

                  (b) The total  purchase  price (the  "Total  Purchase  Price")
shall be the number of shares of  Consideration  Stock multiplied by the average
of the Closing Bid Price per share of Common  Stock  during the ten (10) Trading
Days  immediately  preceding  July  30,  2004,  or the  ten  (10)  Trading  Days
immediately preceding September 30, 2004, whichever is less.

                  (c) The Total  Purchase Price shall be paid by delivery to the
Target  Company of the  number of Seaside  Shares  (the  "Seaside  Consideration
Shares") equal to the Total Purchase Price divided by the conversion rate of the
British Pound  Sterling to purchase US Dollars as  determined  below on the July
30,  2004.  The Seaside  Shares  shall have a value of (pound)1  per share.  The
number of Seaside  Shares to be issued will be based on the  conversion  rate of
the  British  Pound  Sterling  to the US  Dollar  in  effect  as of the close of
business on the day preceding the Closing Date, as quoted by Coutts & Co. as the
commercial rate it gives to purchase US Dollars.  For example,  if the effective
conversion  rate is  $1.80/(pound) 1 and the Total Purchase Price is $8,000,000,
then the number of Seaside  Shares the Target  Company will receive  shall equal
the  $8,000,000/$1.80,  or 4,444,444 Seaside Shares.  The Seaside  Consideration
Shares shall be subject to the "Downside Price Protection" provided in Section 2
of the Escrow Agreement.

         2.2 Execution and Delivery of Documents; The Closing.

                  (a) The  Closing  of the  purchase  and sale of the  shares of
Consideration Stock (the "Closing") shall take place within sixty (60) days from
the date hereof (the "Closing Date"). On the Closing Date,

                           (i) the Target  Company  shall execute and deliver to
the Escrow Agent a certificate in the name of Seaside representing the shares of
Consideration Stock;

                           (ii) the Target  Company shall execute and deliver to
Seaside a certificate of its President, in the form of EXHIBIT B annexed hereto,
certifying  that attached  thereto is a copy of resolutions  duly adopted by the


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Board of  Directors  of the Target  Company  authorizing  the Target  Company to
execute and deliver the Transaction Documents and to enter into the transactions
contemplated  thereby,  provided  that  the  Target  Company  may  execute  such
certificate upon the execution of this Agreement,  in which case it will be held
in escrow by the Escrow Agent and delivered at Closing;

                           (iii) Seaside shall execute and deliver to the Escrow
Agent a certificate in the name of the Target Company or a provisional letter of
allotment for a trading account in the name of the Escrow Agent representing the
Seaside  Escrow Shares and a certificate  in the name of the Target Company or a
provisional  letter of  allotment  for a trading  account  in the name of Escrow
Agent  (to be held for the  benefit  of the  Target  Company)  representing  the
balance of the Seaside Consideration Shares;

                           (iv) the Target Company and Seaside shall execute and
deliver to each other an  executed  Registration  Rights  Agreement  in the form
annexed  hereto as EXHIBIT C, provided  that the Target  Company and Seaside may
execute the Registration  Rights Agreement upon the execution of this Agreement,
in which case it will be held in escrow by the  Escrow  Agent and  delivered  at
Closing;

                           (v) the Target Company,  Seaside and the Escrow Agent
shall execute and deliver to each other an executed Escrow Agreement in the form
annexed  hereto as EXHIBIT A,  provided  that the Target  Company,  Seaside  and
Escrow  Agent may  execute  the  Escrow  Agreement  upon the  execution  of this
Agreement,  in which  case it will be held in  escrow  by the  Escrow  Agent and
delivered at Closing;

                           (vi) the Target  Company shall execute and deliver to
HW or its assigns  certificates or access to a trading account in the name of HW
representing the Consideration  Stock and the Seaside Shares owed to HW pursuant
to a separate advisory agreement between HW and the Target Company;

                           (vii) Seaside shall execute and deliver to the Escrow
Agent a stock power endorsed in blank relating to the Consideration Stock; and

                           (viii) the Target  Company shall wire the monies owed
to G&P  pursuant  to Section 5.1 hereof for legal fees with the  following  wire
instructions:

                Citibank, N.A.
                488 Madison Avenue
                New York, NY ABA Routing No.: 021000089
                Account Name: Gottbetter & Partners, LLP
                Account No. 49061322
                Reference: Molecular Diagnostics, Inc.


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                                  ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

         3.1  Representations,  Warranties and Agreements of the Target Company.
The Target Company hereby makes the following  representations and warranties to
Seaside, all of which shall survive the Closing:

                  (a)  Organization and  Qualification.  The Target Company is a
corporation, duly incorporated,  validly existing and in good standing under the
laws of the  jurisdiction of its formation,  with the requisite  corporate power
and  authority  to own and use its  properties  and  assets  and to carry on its
business as currently  conducted.  The Target Company has no subsidiaries  other
than  as set  forth  on  SCHEDULE  3.1(A)  attached  hereto  (collectively,  the
"Subsidiaries").  Each of the Subsidiaries is a corporation,  duly incorporated,
validly  existing and in good standing under the laws of the jurisdiction of its
incorporation,  with the full  corporate  power and authority to own and use its
properties and assets and to carry on its business as currently conducted.  Each
of the Target Company and the  Subsidiaries is duly qualified to do business and
is in good standing as a foreign  corporation in each  jurisdiction in which the
nature  of  the  business   conducted  or  property   owned  by  it  makes  such
qualification necessary,  except where the failure to be so qualified or in good
standing, as the case may be, would not, individually or in the aggregate,  have
a material adverse effect on the results of operations,  assets,  prospects,  or
financial condition of the Target Company and the Subsidiaries, taken as a whole
(a "Material Adverse Effect").

                  (b)  Authorization,  Enforcement.  The Target  Company has the
requisite  corporate  power and  authority to enter into and to  consummate  the
transactions  contemplated hereby and by each other Transaction  Document and to
otherwise to carry out its obligations  hereunder and thereunder.  The execution
and delivery of this  Agreement and each of the other  Transaction  Documents by
the Target Company and the consummation by it of the  transactions  contemplated
hereby and thereby has been duly authorized by all necessary  action on the part
of the Target Company.  Each of this Agreement and each of the other Transaction
Documents  has been or will be duly  executed  by the  Target  Company  and when
delivered in  accordance  with the terms hereof or thereof will  constitute  the
valid and  binding  obligation  of the Target  Company  enforceable  against the
Target Company in accordance with its terms,  except as such  enforceability may
be limited by applicable  bankruptcy,  insolvency,  reorganization,  moratorium,
liquidation or similar laws relating to, or affecting  generally the enforcement
of, creditors'  rights and remedies or by other equitable  principles of general
application.

                  (c)  Capitalization.  The  authorized,  issued and outstanding
capital  stock of the  Company  is set forth on  SCHEDULE  3.1(C).  No shares of
Common Stock are entitled to preemptive or similar rights,  nor is any holder of
the Common Stock  entitled to  preemptive or similar  rights  arising out of any
agreement or understanding  with the Target Company by virtue of this Agreement.
Except as  disclosed  in  SCHEDULE  3.1(C),  there are no  outstanding  options,
warrants,  script,  rights  to  subscribe  to,  registration  rights,  calls  or
commitments  of any  character  whatsoever  relating  to  securities,  rights or
obligations convertible into or exchangeable for, or giving any person any right
to  subscribe  for or  acquire,  any  shares  of  Common  Stock,  or  contracts,


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<PAGE>

commitments,  understandings, or arrangements by which the Target Company or any
Subsidiary is or may become bound to issue additional shares of Common Stock, or
securities or rights  convertible or  exchangeable  into shares of Common Stock.
Neither the Target  Company nor any  Subsidiary  is in  violation  of any of the
provisions  of  its  Certificate  of  Incorporation,  bylaws  or  other  charter
documents.

                  (d) Issuance of Securities.  The shares of Consideration Stock
have been duly and validly  authorized for issuance,  offer and sale pursuant to
this  Agreement  and,  when issued and delivered as provided  hereunder  against
payment  in  accordance  with the  terms  hereof,  shall be  valid  and  binding
obligations  of  the  Target  Company   enforceable  in  accordance  with  their
respective terms.

                  (e) No Conflicts.  The execution,  delivery and performance of
this Agreement and the other Transaction Documents by the Target Company and the
consummation by the Target Company of the transactions  contemplated  hereby and
thereby do not and will not (i)  conflict  with or violate any  provision of its
Certificate of Incorporation or bylaws (each as amended through the date hereof)
or (ii) be subject to obtaining any consents except those referred to in Section
3.1(f), conflict with, or constitute a default (or an event which with notice or
lapse of time or both  would  become a  default)  under,  or give to others  any
rights  of  termination,   amendment,   acceleration  or  cancellation  of,  any
agreement,  indenture or instrument to which the Target  Company is a party,  or
(iii)  result in a violation  of any law,  rule,  regulation,  order,  judgment,
injunction,  decree or other restriction of any court or governmental  authority
to which the Target Company or its Subsidiaries is subject  (including,  but not
limited to, those of other  countries and the federal and state  securities laws
and regulations), or by which any property or asset of the Target Company or its
Subsidiaries  is bound or  affected,  except  in the case of clause  (ii),  such
conflicts, defaults, terminations, amendments, accelerations,  cancellations and
violations  as would  not,  individually  or in the  aggregate,  have a Material
Adverse Effect.  The business of the Target Company and its  Subsidiaries is not
being  conducted  in  violation  of any  law,  ordinance  or  regulation  of any
governmental authority.

                  (f) Consents and Approvals.  Except as specifically  set forth
in SCHEDULE 3.1(F), neither the Target Company nor any Subsidiary is required to
obtain any  consent,  waiver,  authorization  or order of, or make any filing or
registration   with,  any  court  or  other  federal,   state,  local  or  other
governmental  authority  or other  Person  in  connection  with  the  execution,
delivery and performance by the Target Company of this Agreement and each of the
other Transaction Documents.

                  (g) Litigation;  Proceedings. Except as specifically disclosed
in SCHEDULE 3.1(G),  there is no Proceeding  threatened against or affecting the
Target Company or any of its Subsidiaries or any of their respective  properties
before or by any court,  governmental  or  administrative  agency or  regulatory
authority  (federal,  state,  county,  local or foreign) which (i) relates to or
challenges the legality,  validity or  enforceability  of any of the Transaction


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<PAGE>

Documents or the shares of Consideration  Stock, (ii) could,  individually or in
the aggregate, have a Material Adverse Effect or (iii) could, individually or in
the  aggregate,  materially  impair the ability of the Target Company to perform
fully on a timely basis its obligations under the Transaction Documents.

                  (h) No Default or  Violation.  Except as set forth in SCHEDULE
3.1(H)  hereto,  neither the Target Company nor any Subsidiary (i) is in default
under or in violation of any  indenture,  loan or credit  agreement or any other
agreement  or  instrument  to  which  it is a party or by which it or any of its
properties is bound, except such conflicts or defaults as do not have a Material
Adverse  Effect,  (ii) is in violation of any order of any court,  arbitrator or
governmental  body, except for such violations as do not have a Material Adverse
Effect,  or (iii) is in  violation  of any statute,  rule or  regulation  of any
governmental  authority  which  could  (individually  or in the  aggregate)  (a)
adversely affect the legality, validity or enforceability of this Agreement, (b)
have a Material  Adverse  Effect or (c)  adversely  impair the Target  Company's
ability or obligation to perform fully on a timely basis its  obligations  under
this Agreement.

                  (i)  Disclosure   Documents.   The  Disclosure  Documents  are
accurate in all  material  respects  and do not contain any untrue  statement of
material fact or omit to state any material fact  necessary in order to make the
statements  made therein,  in light of the  circumstances  under which they were
made, not misleading.

                  (j)  Non-Registered  Offering.  Neither the Target Company nor
any Person  acting on its  behalf has taken or will take any action  (including,
without  limitation,  any offering of any securities of the Target Company under
circumstances  which would  require the  integration  of such  offering with the
offering  of the  Consideration  Stock  under the  Securities  Act) which  might
subject  the  offering,  issuance  or sale  of the  Consideration  Stock  to the
registration requirements of Section 5 of the Securities Act.

                  (k) Placing Agent.  The Target Company accepts and agrees that
Dungarvon  Associates,  Inc.  ("Dungarvon")  is acting for  Seaside and does not
regard  any person  other  than  Seaside as its  customer  in  relation  to this
Agreement, and that it has not made any recommendation to the Target Company, in
relation to this Agreement and is not advising the Target  Company,  with regard
to the  suitability or merits of the Seaside Shares and in particular  Dungarvon
has no duties or  responsibilities  to the Target Company for the best execution
of the transaction contemplated by this Agreement.

                  (l) Private Placement Representations.  The Target Company (i)
has received and carefully reviewed such information and documentation  relating
to Seaside that the Target Company has requested, including, without limitation,
Seaside's  Confidential  Private Offering  Memorandum,  dated June 14, 2004 (the
"Private Placement  Memorandum");  (ii) has had a reasonable  opportunity to ask
questions of and receive answers from Seaside concerning the Seaside Shares, and
all such questions,  if any, have been answered to the full  satisfaction of the
Target Company; (iii) has such knowledge and expertise in financial and business
matters  that it is capable of  evaluating  the merits and risks  involved in an
investment in the Seaside Shares;  (iii) understands that Seaside has determined
that the  exemption  from the  registration  provisions of the  Securities  Act,
provided by Section 4(2) of the  Securities  Act is  applicable to the offer and
sale of the Seaside Shares, based, in part, upon the representations, warranties


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<PAGE>

and agreements  made by the Target Company  herein;  and (iv) except as provided
herein and in the Private Placement Memorandum, no representations or warranties
have been made to the  Target  Company by  Seaside  or any  agent,  employee  or
affiliate of Seaside and in entering into this transaction the Target Company is
not  relying  upon any  information,  other  than  the  results  of  independent
investigation by the Target Company.

Seaside  acknowledges and agrees that the Target Company makes no representation
or warranty  with  respect to the  transactions  contemplated  hereby other than
those specifically set forth in Section 3.1 hereof.

         3.2 Representations and Warranties of Seaside. Seaside hereby makes the
following  representations  and warranties to the Target  Company,  all of which
shall survive the Closing:

                  (a) Organization;  Authority.  Seaside is a corporation,  duly
organized,  validly  existing  and  in  good  standing  under  the  laws  of the
jurisdiction  of its formation  with the requisite  power and authority to enter
into and to consummate  the  transactions  contemplated  hereby and by the other
Transaction  Documents and otherwise to carry out its obligations  hereunder and
thereunder. The acquisition of the shares of Consideration Stock to be purchased
by Seaside  hereunder has been duly  authorized  by all necessary  action on the
part of Seaside.  This Agreement has been duly executed and delivered by Seaside
and constitutes the valid and legally binding obligation of Seaside, enforceable
against it in accordance with its terms,  except as such  enforceability  may be
limited by  applicable  bankruptcy,  insolvency,  reorganization,  moratorium or
similar laws relating to, or affecting  generally the enforcement of,  creditors
rights and remedies or by other general principles of equity.

                  (b)  Investment  Intent.  Seaside is  acquiring  the shares of
Consideration  Stock to be  purchased by it  hereunder,  for its own account for
investment purposes only and not with a view to or for distributing or reselling
such shares of  Consideration  Stock,  or any part thereof or interest  therein,
without  prejudice,  however,  to Seaside's right,  subject to the provisions of
this Agreement,  at all times to sell or otherwise dispose of all or any part of
such shares of  Consideration  Stock in compliance with  applicable  federal and
state securities laws.

                  (c) Experience of Seaside.  Seaside,  either alone or together
with its representatives,  has such knowledge,  sophistication and experience in
business and financial  matters so as to be capable of evaluating the merits and
risks of an investment in the shares of Consideration Stock to be acquired by it
hereunder, and has so evaluated the merits and risks of such investment.

                  (d) Ability of Seaside to Bear Risk of Investment.  Seaside is
able to bear the economic risk of an investment in the Consideration Stock to be
acquired by it hereunder  and, at the present time, is able to afford a complete
loss of such investment.

                  (e) Access to Information.  Seaside  acknowledges  that it has
been  afforded  (i) the  opportunity  to ask  such  questions  as it has  deemed
necessary of, and to receive answers from, representatives of the Target Company
concerning the terms and conditions of the Consideration Stock offered hereunder


                                       9
<PAGE>

and the  merits  and  risks of  investing  in such  securities;  (ii)  access to
information  about  the  Target  Company  and  the  Target  Company's  financial
condition, results of operations, business, properties, management and prospects
sufficient to enable it to evaluate its investment in the  Consideration  Stock;
and (iii) the opportunity to obtain such additional information which the Target
Company possesses or can acquire without  unreasonable effort or expense that is
necessary to make an informed investment decision with respect to the investment
and to verify the  accuracy  and  completeness  of the  information  that it has
received about the Target Company.

                  (f) Reliance.  Seaside  understands and acknowledges  that (i)
the shares of  Consideration  Stock being  offered and sold to it hereunder  are
being  offered  and sold  without  registration  under the  Securities  Act in a
private  placement  that is  exempt  from  the  registration  provisions  of the
Securities   Act  under  Section  4(2)  of  the  Securities  Act  and  (ii)  the
availability  of such exemption  depends in part on, and that the Target Company
will rely upon the accuracy and truthfulness  of, the foregoing  representations
and Seaside hereby consents to such reliance.

                  (g) Regulation S. Seaside  understands and  acknowledges  that
(A) the  shares  of  Consideration  Stock  have not been  registered  under  the
Securities  Act, are being sold in reliance upon an exemption from  registration
afforded by Regulation S; and that such shares of  Consideration  Stock have not
been registered with any state securities commission or authority;  (B) pursuant
to the requirements of Regulation S, the shares of  Consideration  Stock may not
be  transferred,  sold or  otherwise  exchanged  unless in  compliance  with the
provisions of Regulation S and/or pursuant to registration  under the Securities
Act, or pursuant to an available exemption hereunder; and (C) the Target Company
is under no obligation to register the shares of  Consideration  Stock under the
Securities  Act or any state  securities  law, or to take any action to make any
exemption from any such registration provisions available.

         Seaside  is  not a U.S.  Person  and is not  acquiring  the  shares  of
Consideration  Stock for the  account of any U.S.  Person;  (B) no  director  or
executive officer of Seaside is a national or citizen of the United States;  and
(C) it is not  otherwise  deemed to be a "U.S.  Person"  within  the  meaning of
Regulation S.

         Seaside was not formed  specifically  for the purpose of acquiring  the
shares of Consideration Stock purchased pursuant to this Agreement.

         Seaside is  purchasing  the shares of  Consideration  Stock for its own
account and risk and not for the account or benefit of a U.S.  Person as defined
in Regulation S and no other person has any interest in or  participation in the
shares of Consideration Stock or any right, option, security interest, pledge or
other interest in or to the shares of Consideration  Stock. Seaside understands,
acknowledges and agrees that it must bear the economic risk of its investment in
the  shares of  Consideration  Stock for an  indefinite  period of time and that
prior to any such offer or sale, the Target Company may require,  as a condition
to  effecting a transfer  of the shares of  Consideration  Stock,  an opinion of
counsel,  acceptable to the Target Company,  as to the registration or exemption
therefrom under the Securities Act and any state securities acts, if applicable.


                                       10
<PAGE>

         Seaside will,  after the  expiration of the Restricted  Period,  as set
forth  under  Regulation  S  Rule  903(b)(3)(iii)(A),  offer,  sell,  pledge  or
otherwise  transfer the shares of  Consideration  Stock only in accordance  with
Regulation S, or pursuant to an available  exemption  under the  Securities  Act
and, in any case, in accordance  with  applicable  state  securities  laws.  The
transactions  contemplated by this Agreement have neither been pre-arranged with
a purchaser who is in the U.S. or who is a U.S.  Person,  nor are they part of a
plan or scheme to evade the registration provisions of the United States federal
securities laws.

         The offer leading to the sale evidenced hereby was made in an "offshore
transaction."  For  purposes  of  Regulation  S,  Seaside  understands  that  an
"offshore  transaction"  as defined under  Regulation S is any offer or sale not
made to a person in the  United  States and either (A) at the time the buy order
is originated,  the purchaser is outside the United States, or the seller or any
person  acting on his behalf  reasonably  believes that the purchaser is outside
the United  States;  or (B) for  purposes of (1) Rule 903 of  Regulation  S, the
transaction  is  executed  in, or on or through a physical  trading  floor of an
established  foreign  exchange that is located  outside the United States or (2)
Rule 904 of  Regulation  S, the  transaction  is executed  in, on or through the
facilities of a designated  offshore  securities  market, and neither the seller
nor any  person  acting  on its  behalf  knows  that  the  transaction  has been
prearranged with a buyer in the U.S.

         Neither  Seaside nor any  Affiliate  or any Person  acting on Seaside's
behalf,  has made or is aware of any  "directed  selling  efforts" in the United
States,  which is defined in Regulation S to be any activity  undertaken for the
purpose  of,  or that  could  reasonably  be  expected  to have the  effect  of,
conditioning  the  market  in  the  United  States  for  any of  the  shares  of
Consideration Stock being purchased hereby.

         Seaside understands that the Target Company is the seller of the shares
of  Consideration  Stock which are the subject of this Agreement,  and that, for
purpose of Regulation S, a  "distributor"  is any  underwriter,  dealer or other
person  who  participates,   pursuant  to  a  contractual  arrangement,  in  the
distribution of securities  offered or sold in reliance on Regulation S and that
an  "affiliate"  is any  partner,  officer,  director or any person  directly or
indirectly controlling, controlled by or under common control with any person in
question. Seaside agrees that Seaside will not, during the Restricted Period set
forth under Rule 903(b)(iii)(A), act as a distributor, either directly or though
any affiliate, nor shall it sell, transfer,  hypothecate or otherwise convey the
shares of Consideration Stock other than to a non-U.S. Person.

         Seaside acknowledges that the shares of Consideration Stock will bear a
legend in substantially the following form:


THE SHARES  REPRESENTED  BY THIS  CERTIFICATE  HAVE BEEN  OFFERED AND SOLD IN AN
"OFFSHORE  TRANSACTION"  IN RELIANCE  UPON  REGULATION S AS  PROMULGATED  BY THE
SECURITIES AND EXCHANGE COMMISSION.  ACCORDINGLY,  THE SECURITIES REPRESENTED BY
THIS  CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"SECURITIES  ACT") AND MAY NOT BE  TRANSFERRED  OTHER  THAN IN  ACCORDANCE  WITH
REGULATION S, PURSUANT TO REGISTRATION  UNDER THE SECURITIES ACT, OR PURSUANT TO


                                       11
<PAGE>

AN  AVAILABLE   EXEMPTION  FROM  REGISTRATION  UNDER  THE  SECURITIES  ACT,  THE
AVAILABILITY  OF WHICH IS TO BE ESTABLISHED TO THE  SATISFACTION OF THE COMPANY.
THE SECURITIES  REPRESENTED BY THIS CERTIFICATE CANNOT BE THE SUBJECT OF HEDGING
TRANSACTIONS  UNLESS SUCH  TRANSACTIONS  ARE  CONDUCTED IN  COMPLIANCE  WITH THE
SECURITIES ACT.

THE SALE OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS RESTRICTED PURSUANT TO
THE TERMS OF A STOCK  PURCHASE  AGREEMENT,  DATED  OCTOBER 5, 2004,  BETWEEN THE
COMPANY AND SEASIDE INVESTMENTS PLC, A COPY OF WHICH IS AVAILABLE UPON REQUEST.

The Target Company acknowledges and agrees that Seaside makes no representations
or warranties with respect to the  transactions  contemplated  hereby other than
those specifically set forth in this Section 3.2.

                                   ARTICLE IV

                         OTHER AGREEMENTS OF THE PARTIES

         4.1 Manner of Offering.  The Consideration  Stock being issued pursuant
to section 4(2) of the Securities  Act and Regulation S thereunder.  The Seaside
Consideration Shares are being issued pursuant to section 4(2) of the Securities
Act.

         4.2 Notice of Certain Events. The Target Company shall, on a continuing
basis,  (i) advise  Seaside  promptly  after  obtaining  knowledge  of,  and, if
requested by Seaside, confirm such advice in writing, of (A) the issuance by any
state securities  commission of any stop order  suspending the  qualification or
exemption from qualification of the shares of Consideration  Stock, for offering
or sale in any  jurisdiction,  or the  initiation  of any  proceeding  for  such
purpose by any state securities commission or other regulatory authority, or (B)
any event that makes any statement of a material fact made by the Target Company
in Section 3.1 or in the Disclosure Documents untrue or that requires the making
of any additions to or changes in Section 3.1 or in the Disclosure  Documents in
order to make the statements  therein,  in the light of the circumstances  under
which they are made,  not  misleading,  (ii) use its best efforts to prevent the
issuance of any stop order or order  suspending the  qualification  or exemption
from qualification of the Consideration Stock under any state securities or Blue
Sky  laws,  and (iii) if at any time any state  securities  commission  or other
regulatory  authority  shall  issue an order  suspending  the  qualification  or
exemption from qualification of the Consideration Stock under any such laws, and
use its best  efforts to obtain the  withdrawal  or lifting of such order at the
earliest possible time.

         4.3 Blue Sky Laws.  The Target  Company agrees that it will execute all
necessary  documents and pay all necessary state filing or notice fees to enable
the Target Company to sell the shares of Consideration Stock to Seaside.


                                       12
<PAGE>

         4.4  Integration.  The Target  Company shall not and shall use its best
efforts to ensure that no Affiliate shall sell, offer for sale or solicit offers
to buy or otherwise  negotiate in respect of any security (as defined in Section
2 of the Securities  Act) that would be integrated with the offer or sale of the
shares of  Consideration  Stock in a manner that would require the  registration
under the  Securities  Act of the sale of the shares of  Consideration  Stock to
Seaside.

         4.5 Furnishing of Rule 144(c) Materials.  The Target Company shall, for
so long as any of the  Consideration  Stock  remain  outstanding  and during any
period in which the Target  Company is not subject to Section 13 or 15(d) of the
Exchange Act, make available to any registered holder of the Consideration Stock
in  connection  with any sale  thereof  and any  prospective  purchaser  of such
Consideration  Stock from such Person,  such information in accordance with Rule
144(c)  promulgated  under  the  Securities  Act  as is  required  to  sell  the
Consideration Stock under Rule 144 promulgated under the Securities Act.

         4.6 Solicitation Materials. The Target Company shall not (i) distribute
any offering materials in connection with the offering and sale of the shares of
Consideration  Stock other than the Disclosure  Documents and any amendments and
supplements thereto prepared in compliance herewith or (ii) solicit any offer to
buy or sell the  shares of  Consideration  Stock by means of any form of general
solicitation or advertising.

         Listing of Common Stock.  If the Common Stock is or shall become listed
on the OTCBB or on another  exchange,  the Target Company shall (a) use its best
efforts to maintain  the listing of its Common  Stock on the OTCBB or such other
exchange on which the Common  Stock is then listed until four (4) years from the
date  hereof,  and (b)  shall  provide  to  Seaside  evidence  of such  listing.
Notwithstanding  the foregoing,  the Target Company may voluntarily  cease to be
listed on the OTCBB at such time as the Target Company becomes listed on another
exchange.

         4.7

         4.8 Indemnification.

                  (a) Indemnification

                           (i)  The  Target   Company   shall,   notwithstanding
termination of this  Agreement and for a period of six (6) years,  indemnify and
hold  harmless  Seaside  and its  officers,  directors,  agents,  employees  and
Affiliates,  each Person who controls or Seaside  (within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act) (each such Person, a
"Control Person") and the officers,  directors, agents, employees and Affiliates
of each such Control Person,  to the fullest extent permitted by applicable law,
from  and  against  any and all  losses,  claims,  damages,  liabilities,  costs
(including,  without  limitation,  costs of preparation and attorneys' fees) and
expenses (collectively,  "Losses"), as incurred, arising out of, or relating to,
a breach or breaches of any representation,  warranty,  covenant or agreement by
the Target Company under this Agreement or any other Transaction Document.

                           (ii) Seaside  shall,  notwithstanding  termination of
this  Agreement  and for a period of six (6) years,  indemnify and hold harmless
the Target Company, its officers,  directors, agents and employees, each Control
Person and the officers, directors, agents and employees of each Control Person,


                                       13
<PAGE>

to the fullest extent  permitted by applicable law, from and against any and all
Losses, as incurred, arising out of, or relating to, a breach or breaches of any
representation,  warranty, covenant or agreement by Seaside under this Agreement
or the other  Transaction  Documents,  except for Losses  solely  arising out of
negligence, bad faith or breach of this Agreement by the Target Company.

                           (iii) The Target Company and Seaside acknowledge that
in the SEC's  opinion,  directors,  officers and persons  controlling  a company
subject to the  Securities Act can not be indemnified  for  liabilities  arising
under the Securities Act by such company.


                  (b) Conduct of Indemnification  Proceedings. If any Proceeding
shall be brought or asserted against any Person entitled to indemnity  hereunder
(an  "Indemnified  Party"),  such  Indemnified  Party  promptly shall notify the
Person from whom indemnity is sought (the "Indemnifying  Party") in writing, and
the  Indemnifying  Party  shall  assume  the  defense  thereof,   including  the
employment of counsel  reasonably  satisfactory to the Indemnified Party and the
payment of all fees and expenses  incurred in connection  with defense  thereof;
provided,  that the failure of any  Indemnified  Party to give such notice shall
not relieve the Indemnifying Party of its obligations or liabilities pursuant to
this  Agreement,  except  (and  only) to the  extent  that it  shall be  finally
determined  by a court of competent  jurisdiction  (which  determination  is not
subject to appeal or further  review) that such failure  shall have  proximately
and materially adversely prejudiced the Indemnifying Party.

                  An Indemnified  Party shall have the right to employ  separate
counsel in any such  Proceeding and to participate in the defense  thereof,  but
the  fees  and  expenses  of  such  counsel  shall  be at the  expense  of  such
Indemnified  Party or Parties unless:  (1) the Indemnifying  Party has agreed to
pay such fees and  expenses;  or (2) the  Indemnifying  Party  shall have failed
promptly  to  assume  the  defense  of such  Proceeding  and to  employ  counsel
reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3)
the named  parties to any such  Proceeding  (including  any  impleaded  parties)
include  both  such  Indemnified  Party  and the  Indemnifying  Party,  and such
Indemnified Party shall have been advised by counsel that a conflict of interest
is likely to exist if the same counsel were to represent such Indemnified  Party
and the Indemnifying  Party (in which case, if such  Indemnified  Party notifies
the  Indemnifying  Party in writing that it elects to employ separate counsel at
the expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense of the claim against the Indemnified  Party but will
retain the right to control the overall Proceedings out of which the claim arose
and such counsel  employed by the  Indemnified  Party shall be at the expense of
the  Indemnifying  Party).  The  Indemnifying  Party shall not be liable for any
settlement of any such Proceeding  effected without its written  consent,  which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party,  unless
such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such Proceeding.


                                       14
<PAGE>

                  All fees and  expenses of the  Indemnified  Party to which the
Indemnified Party is entitled hereunder (including  reasonable fees and expenses
to the extent incurred in connection with  investigating  or preparing to defend
such Proceeding in a manner not inconsistent with this Section) shall be paid to
the  Indemnified  Party,  as incurred,  within ten (10) Business Days of written
notice thereof to the Indemnifying Party.

                  No  right  of  indemnification  under  this  Section  shall be
available as to a particular Indemnified Party if the Indemnifying Party obtains
a non-appealable final judicial  determination that such Losses arise solely out
of the negligence, breach of agreement or bad faith of such Indemnified Party in
performing the obligations of such  Indemnified  Party under this Agreement or a
breach by such Indemnified Party of its obligations under this Agreement.

                  (c) Contribution.  If a claim for  indemnification  under this
Section is unavailable to an Indemnified  Party or is  insufficient to hold such
Indemnified Party harmless for any Losses in respect of which this Section would
apply  by its  terms  (other  than by  reason  of  exceptions  provided  in this
Section), then each Indemnifying Party, in lieu of indemnifying such Indemnified
Party,  shall contribute to the amount paid or payable by such Indemnified Party
as a result of such Losses in such  proportion as is  appropriate to reflect the
relative  benefits  received by the  Indemnifying  Party on the one hand and the
Indemnified Party on the other and the relative fault of the Indemnifying  Party
and Indemnified  Party in connection with the actions or omissions that resulted
in such  Losses  as well as any other  relevant  equitable  considerations.  The
relative  fault  of such  Indemnifying  Party  and  Indemnified  Party  shall be
determined  by reference  to, among other  things,  whether there was a judicial
determination  that such Losses arise in part out of the negligence or bad faith
of the Indemnified Party in performing the obligations of such Indemnified Party
under this Agreement or the Indemnified  Party's breach of its obligations under
this Agreement.  The amount paid or payable by a party as a result of any Losses
shall be deemed to include any attorneys' or other fees or expenses  incurred by
such party in connection with any Proceeding to the extent such party would have
been indemnified for such fees or expenses if the  indemnification  provided for
in this Section was available to such party.

                  (d) Non-Exclusivity. The indemnity and contribution agreements
contained in this Section are in addition to any  obligation  or liability  that
the Indemnifying Parties may have to the Indemnified Parties.

         4.9 Sale of Seaside  Consideration  Shares.  Seaside  shall  assist the
Target Company in setting up and  maintaining a trading  account at a registered
broker in the United Kingdom to facilitate the sale of the Seaside Consideration
Shares.  Broker's  commissions in the trading  account shall not exceed one half
percent (0.5%).

         4.10 Lock Up by Seaside. Seaside shall not sell, transfer or assign all
or any of the  shares  of  Consideration  Stock  for a  period  of one (1)  year
following the Closing,  without the written consent of the Target Company, which
consent may be withheld in the Target Company's sole discretion.


                                       15
<PAGE>

         4.11 Short Sales. Seaside agrees it will not enter into any Short Sales
(as  hereinafter  defined) until the date that Seaside no longer owns the shares
of Consideration  Stock. For purpose hereof, a "Short Sale" shall mean a sale of
Common  Stock by  Seaside  that is marked as a short  sale and that is made at a
time when there is no equivalent offsetting long position in the Common Stock by
Seaside.

         4.12  Liquidation  of  Consideration  Stock.  Commencing  on  the  date
occurring  one (1) year  after  the  Closing,  Seaside  may sell its  shares  of
Consideration Stock at a monthly rate no greater than an amount equal to fifteen
percent (15%) of the Target  Company's prior month's  trading volume,  provided,
however,  that  Seaside  may  execute  block  trades of 50,000 or more shares of
Consideration  Stock and such sales shall not count  toward the fifteen  percent
(15%) limitation on the rate of liquidation. Seaside shall use the proceeds from
these liquidations to re-purchase Seaside Shares in the marketplace.

         4.13 Definitive  Certificates.  The definitive  certificates evidencing
the shares of  Consideration  Stock shall be held at the office of the Secretary
of Seaside if and when the Consideration Stock is received from the Escrow Agent
pursuant to the Escrow  Agreement and shall remain with the Secretary  until one
(1) year from the date hereof.

         4.14  London  Stock  Exchange.   Seaside  shall  register  the  Seaside
Consideration  Shares for trading on the London Stock  Exchange PLC by September
30, 2004.

         4.15 Liquidation of Seaside Consideration  Shares.  Commencing with the
month during which  Seaside  Shares are accepted for trading on the London Stock
Exchange  PLC, and during each calendar  month  thereafter,  Target  Company may
shall its shares of Seaside  Consideration  Shares at a monthly  rate that is no
greater than ten percent (10%) of the total of the Seaside  Consideration Shares
(the "Sales  Allowance").  Any unused portion of the Sales Allowance  during any
month may be carried over to subsequent months. The Seaside Escrow Shares, after
they  have  been  distributed  to  the  Target  Company,  may  be  sold  without
restriction.

                                    ARTICLE V

                                  MISCELLANEOUS

         5.1 Fees and  Expenses.  Except  as set forth in this  Agreement,  each
party shall pay the fees and expenses of its advisers, counsel,  accountants and
other experts, if any, and all other expenses incurred by such party incident to
the  negotiation,  preparation,  execution,  delivery  and  performance  of this
Agreement.  The Target  Company  shall pay all stamp and other  taxes and duties
levied in  connection  with the  issuance of the shares of  Consideration  Stock
pursuant  hereto.  Seaside shall be responsible for any taxes payable by Seaside
that may  arise as a result  of the  investment  hereunder  or the  transactions
contemplated  by this Agreement or any other  Transaction  Document.  The Target
Company  agrees  to pay  $7,500  to G&P  for  legal  fees  associated  with  the
transactions contemplated by this Agreement at Closing. The Target Company shall
pay all fees owed to HW pursuant to a separate advisory agreement between Hunter
Wire and the Target Company.  The Target Company shall pay all costs,  expenses,
fees and all taxes  incident to and in  connection  with:  (A) the  issuance and


                                       16
<PAGE>

delivery of the Consideration  Stock, (B) the exemption from registration of the
Consideration  Stock for offer and sale to Seaside under the  securities or Blue
Sky  laws  of  the  applicable   jurisdictions,   and  (C)  the  preparation  of
certificates  for  the  Consideration  Stock  (including,   without  limitation,
printing and  engraving  thereof),  and (D) all fees and expenses of counsel and
accountants of the Target Company.

         5.2 Entire Agreement This Agreement,  together with all of the Exhibits
and Schedules annexed hereto,  and any other  Transaction  Document contains the
entire  understanding  of the parties with respect to the subject  matter hereof
and supersede all prior  agreements and  understandings,  oral or written,  with
respect to such matters. This Agreement shall be deemed to have been drafted and
negotiated  by both parties  hereto and no  presumptions  as to  interpretation,
construction or enforceability  shall be made by or against either party in such
regard.

         5.3 Notices. Any notice or other communication required or permitted to
be given  hereunder  shall be in  writing  and shall be deemed to have been duly
given  upon  facsimile  transmission  (with  written  transmission  confirmation
report) at the number  designated  below (if  delivered on a Business Day during
normal  business  hours  where  such  notice  is to be  received),  or the first
Business Day following such delivery (if delivered  other than on a Business Day
during  normal  business  hours where such notice is to be  received)  whichever
shall first occur. The addresses for such communications shall be:

                  If to the Target Company: Molecular Diagnostics, Inc.
                                            414 N. Orleans, Suite 502
                                            Chicago, IL  60610
                                            Attn:  Dr. Denis M. O'Donnell, M.D.
                                            President and CEO
                                            Tel:   (312) 222-9550
                                            Fax:  (312) 222-9580

                  With copies to:           Mr. David White
                                            White, White & Van Etten
                                            55 Cambridge Parkway, Suite 101
                                            Cambridge, MA  02142
                                            Tel:  (617) 225-6900
                                            Fax: (617) 225-0205

                  If to Seaside:            Seaside Investments PLC
                                            30 Farringdon Street
                                            London EC4A 4HJ
                                            Attn: Harry Pearl
                                            Tel: 44.207.569.0044
                                            Fax: 44.207.724.0090


                                       17
<PAGE>

                  With copies to:           Gottbetter & Partners, LLP
                                            488 Madison Avenue, 12th Floor
                                            New York, NY 10022
                                            Attn:  Adam S. Gottbetter, Esq.
                                            Tel:  (212) 400-6900
                                            Fax:  (212) 400-6901

or such other address as may be designated hereafter by notice given pursuant to
the terms of this Section 5.3.

         5.4 Amendments;  Waivers.  No provision of this Agreement may be waived
or amended except in a written  instrument  signed, in the case of an amendment,
by both the Target  Company  and  Seaside,  or, in the case of a waiver,  by the
party against whom  enforcement  of any such waiver is sought.  No waiver of any
default  with  respect  to any  provision,  condition  or  requirement  of  this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of
any other  provision,  condition or requirement  hereof,  nor shall any delay or
omission of either  party to exercise any right  hereunder in any manner  impair
the exercise of any such right accruing to it thereafter.

         5.5  Headings.  The headings  herein are for  convenience  only, do not
constitute a part of this  Agreement  and shall not be deemed to limit or affect
any of the provisions hereof.

         5.6  Successors and Assigns.  This Agreement  shall be binding upon and
inure  to the  benefit  of the  parties  and  their  respective  successors  and
permitted  assigns.  The  assignment by a party of this  Agreement or any rights
hereunder shall not affect the obligations of such party under this Agreement.

         5.7 No Third Party  Beneficiaries.  This  Agreement is intended for the
benefit of the parties  hereto and their  respective  permitted  successors  and
assigns and is not for the benefit of, nor may any provision  hereof be enforced
by, any other person.

         5.8  Governing  Law;  Venue;  Service of Process.  The  parties  hereto
acknowledge  that  the  transactions  contemplated  by  this  Agreement  and the
exhibits hereto bear a reasonable relation to the State of New York. The parties
hereto agree that the  internal  laws of the State of New York shall govern this
Agreement  and the exhibits  hereto,  including,  but not limited to, all issues
related to usury.  Any action to enforce the terms of this  Agreement  or any of
its exhibits,  or any other Transaction Document shall be brought exclusively in
the state and/or federal courts situated in the County and State of New York. If
and only if New York declines  jurisdiction  within the State of New York,  such
action  shall be  brought in the State and  County  where the  Target  Company's
principal  place of  business is  situated.  Service of process in any action by
Seaside or the Target Company to enforce the terms of this Agreement may be made
by  serving  a copy of the  summons  and  complaint,  in  addition  to any other
relevant  documents,  by commercial  overnight courier to the other party at its
principal address set forth in this Agreement.


                                       18
<PAGE>

         5.9 Survival.  The representations and warranties of the Target Company
and Seaside  contained in Article III and the  agreements  and  covenants of the
parties contained in Article IV and this Article V shall survive the Closing.

5.10  Counterpart  Signatures.  This  Agreement  may be  executed in two or more
counterparts,  all of which when taken  together shall be considered one and the
same agreement and shall become effective when  counterparts have been signed by
each party and  delivered  to the other  party,  it being  understood  that both
parties need not sign the same  counterpart.  In the event that any signature is
delivered by facsimile  transmission,  such  signature  shall create a valid and
binding  obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.

         5.11 Publicity.  The Target Company and Seaside shall consult with each
other in issuing any press releases or otherwise  making public  statements with
respect to the  transactions  contemplated  hereby and neither party shall issue
any such press release or otherwise make any such public  statement  without the
prior written  consent of the other,  which  consent  shall not be  unreasonably
withheld or delayed,  unless counsel for the disclosing  party deems such public
statement to be required by applicable  federal  and/or state  securities  laws.
Except as otherwise required by applicable law or regulation, the Target Company
will not disclose to any third party  (excluding its legal counsel,  accountants
and representatives) the name of Seaside.

         5.12  Severability.  In case any one or more of the  provisions of this
Agreement  shall be invalid or  unenforceable  in any respect,  the validity and
enforceability of the remaining terms and provisions of this Agreement shall not
in any way be affected or impaired thereby and the parties will attempt to agree
upon a valid and enforceable  provision  which shall be a reasonable  substitute
therefore,  and upon so agreeing, shall incorporate such substitute provision in
this Agreement.

         5.13  Limitation  of  Remedies.  With  respect  to claims by the Target
Company or any person acting by or through the Target Company,  or by Seaside or
any person acting through Seaside,  for remedies at law or at equity relating to
or arising out of a breach of this  Agreement,  liability,  if any, shall, in no
event,  include loss of profits or incidental,  indirect,  exemplary,  punitive,
special or consequential damages of any kind.

                           [ SIGNATURE PAGE FOLLOWS ]


                                       19
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first indicated above.

                                      Target Company:

                                      Molecular Diagnostics, Inc.


                                      By:  _________________________
                                         Dr. Denis M. O'Donnell, M.D.
                                         President and CEO



                                      Seaside:

                                      Dungarvon Associates, Inc. on behalf of
                                      Seaside Investments Plc.
                                      By: __________________________
                                      Name: ________________________
                                      Title: _______________________



                                       20

<PAGE>

                                    EXHIBIT A

                                ESCROW AGREEMENT

      ESCROW AGREEMENT (this "Agreement"), dated as of October 5, 2004, by and
between Molecular Diagnostics, Inc., a Delaware corporation with its principal
place of business at 414 N. Orleans, Suite 502, Chicago, IL 60610(the "Target
Company"); Gottbetter & Partners, LLP with its principal place of business at
488 Madison Avenue, New York, NY 10022 (the "Escrow Agent"); and Seaside
Investments Plc, a corporation organized under the laws of England and Wales
with its offices at 30 Farringdon Street, London EC4A 4HJ ("Seaside").

                                    RECITALS

            A. Simultaneously with the execution of this Agreement, Seaside and
the Target Company entered into a Stock Purchase Agreement (the "Stock Purchase
Agreement"), dated as of the date hereof and incorporated herein by reference,
pursuant to which the Target Company has agreed to issue to Seaside the
Consideration Stock in exchange for the Seaside Consideration Shares.

            B. The parties have agreed that the Consideration Stock and Seaside
Consideration Shares shall be deposited into escrow pursuant to this Agreement,
including thirty percent (30%) of the Seaside Consideration Shares to be
deposited into escrow as Downside Price Protection (the "Seaside Escrow
Shares").

            C. The Escrow Agent is willing to act as escrow agent pursuant to
the terms of this Agreement with respect to the purchase of the shares of
Consideration Stock.

            D. All capitalized terms used but not defined herein shall have the
meanings ascribed thereto in the Stock Purchase Agreement.

      NOW, THEREFORE, IT IS AGREED:

            1. DEPOSIT INTO ESCROW. At Closing, the parties shall deposit into
escrow (i) the Seaside Consideration Shares, (ii) the Consideration Stock and
(iii) the stock power executed by Seaside. The deposit of the Seaside
Consideration Shares, at the election of Seaside, may be made as (i) a
certificate in the name of the Target Company or a provisional letter of
allotment for a trading account in the name of the Escrow Agent representing the
Seaside Escrow Shares and (ii) a certificate in the name of the Target Company
or a provisional letter of allotment for a trading account in the name of the
Escrow Agent (to be held for the benefit of the Target Company) representing the
balance of the Seaside Consideration Shares. The Escrow Agent shall hold the
Seaside Consideration Shares and the Consideration Stock in escrow when
delivered.



                                      A-1
<PAGE>

            2. TERMS OF ESCROW. (a) If the Market Value of the Common Stock on
the date occurring one year after Closing (the "One Year Anniversary") is less
than the Closing Price, the Target Company shall sell to Seaside and Seaside
shall purchase the number of Seaside Escrow Shares (the "Seaside Protection
Shares") equal to (a) the Seaside Consideration Shares multiplied by (b) the
Percentage Decrease, at a purchase price of 1p per Seaside Consideration Share
(the "Escrow Purchase Price"). The "Percentage Decrease" shall be equal to 1 -
Market Value/the Closing Price. "Market Value" shall be the average of the ten
(10) closing bid prices per share of the Common Stock during the ten (10)
trading days immediately preceding the One Year Anniversary.

            Within three (3) Business Days of the One Year Anniversary, Seaside
shall (i) send a notice ("Sale Notice") to the Target Company and the Escrow
Agent of the Seaside Protection Shares to be sold by the Target Company to
Seaside, if any, and (ii) deposit the Escrow Purchase Price with the Escrow
Agent, if necessary. Within fourteen (14) Business Days of the Target Company's
and the Escrow Agent's receipt of the Sale Notice and Escrow Agent's receipt of
the Escrow Purchase Price, the Escrow Agent is authorized and directed
simultaneously (i) to pay the Escrow Purchase Price, if any, to the Target
Company, (ii) to deliver the Seaside Protection Shares, if any, to Seaside and
(iii) to deliver the remaining Seaside Escrow Shares, if any, to the Target
Company.

            (b) If at any time before September 30, 2004, the Escrow Agent
receives written notice (the "LSE Notice") from Seaside that the Seaside
Consideration Shares are listed on the London Stock Exchange plc (the "London
Exchange"), the Escrow Agent is authorized and directed to distribute, within
fourteen (14) Business Days of receipt of such LSE Notice, (i) the Consideration
Stock to Seaside and (ii) seventy percent (70%) of the Seaside Consideration
Shares to the Target Company. If the Escrow Agent does not receive such LSE
Notice by September 30, 2004, the Escrow Agent is authorized and directed to
distribute, no later than October 5, 2004, (i) the Consideration Stock and the
stock power executed by Seaside to the Target Company and (ii) the Seaside
Consideration Shares to Seaside; provided, however, that the Target Company
shall have the option to extend the September 30, 2004 deadline by providing
written notice to the Escrow Agent with a written acknowledgement from Seaside.

      3.    DUTIES AND OBLIGATIONS OF THE ESCROW AGENT.

            (a) The parties hereto agree that the duties and obligations of the
Escrow Agent shall be only those obligations herein specifically provided and no
other. The Escrow Agent's duties are those of a depositary only, and the Escrow
Agent shall incur no liability whatsoever, except as a direct result of its
willful misconduct or gross negligence in the performance of its duties
hereunder;

            (b) The Escrow Agent may consult with counsel of its choice, and
shall not be liable for any action taken, suffered or omitted to be taken by it
in accordance with the advice of such counsel;

            (c) The Escrow Agent shall not be bound in any way by the terms of
any other agreement to which Seaside and the Target Company are parties, whether
or not the Escrow Agent has knowledge thereof, and the Escrow Agent shall not in
any way be required to determine whether or not any other agreement has been
complied with by Seaside and the Target Company, or any other party thereto. The
Escrow Agent shall not be bound by any modification, amendment, termination,
cancellation, rescission or supersession of this Agreement unless the same shall
be in writing and signed jointly by Seaside and the Target Company and agreed to
in writing by the Escrow Agent;



                                      A-2
<PAGE>

            (d) If the Escrow Agent shall be uncertain as to its duties or
rights hereunder or shall receive instructions, claims or demands which, in its
opinion, are in conflict with any of the provisions of this Agreement, the
Escrow Agent shall be entitled to refrain from taking any action other than
keeping safely the Consideration (as defined below) or taking certain action
until the Escrow Agent is directed otherwise in writing jointly by Seaside and
the Target Company or by a final judgment of a court of competent jurisdiction;

            (e) The Escrow Agent shall be fully protected in relying upon any
written notice, demand, certificate or document which the Escrow Agent, in good
faith, believes to be genuine. The Escrow Agent shall not be responsible for the
sufficiency or accuracy of the form, execution, validity or genuineness of
documents or securities now or hereafter deposited hereunder or of any
endorsement thereon, or for any lack of endorsement thereon, or for any
description therein; nor shall the Escrow Agent be responsible or liable in any
respect on account of the identity, authority or rights of the persons executing
or delivering or purporting to execute or deliver any such document, security or
endorsement;

            (f) The Escrow Agent shall not be required to institute legal
proceedings of any kind and shall not be required to defend any legal
proceedings which may be instituted against it or in respect of the
Consideration;

            (g) If the Escrow Agent at any time, in its sole discretion, deems
it necessary or advisable to relinquish custody of any of the securities (to the
extent delivered to the Escrow Agent pursuant hereto, the "Consideration"), it
may do so by delivering the same to another Person that agrees to act as escrow
agent hereunder and whose substitution for the Escrow Agent is agreed upon in
writing by Seaside and the Target Company; provided, however that such successor
Escrow Agent must be resident in the United States. If no such escrow agent is
selected within three (3) days after the Escrow Agent gives notice to Seaside
and the Target Company of the Escrow Agent's desire to so relinquish custody of
the Consideration and resign as Escrow Agent, then the Escrow Agent may do so by
delivering the Consideration to the clerk or other proper officer of a state or
federal court of competent jurisdiction situate in the state and county of New
York. The fee of any court officer shall be borne by the Target Company. Upon
such delivery, the Escrow Agent shall be discharged from any and all
responsibility or liability with respect to the Consideration and this Agreement
and each of the Target Company and Seaside shall promptly pay all monies it may
owe to the Escrow Agent for its services hereunder, including, but not limited
to, reimbursement of its out-of-pocket expenses pursuant to paragraph (i) below;



                                      A-3
<PAGE>

            (h) This Agreement shall not create any fiduciary duty on the Escrow
Agent's part to Seaside or the Target Company, nor disqualify the Escrow Agent
from representing either party hereto in any dispute with the other, including
any dispute with respect to the Stock Purchase Agreement; provided, however,
that in the event of such dispute, the Escrow Agent shall have the right to
commence an interpleader action in any court of competent jurisdiction of the
state of New York or of the United States located in the county and state of New
York, deposit the Consideration with such court;

            (i) The parties acknowledge and agree that the Escrow Agent is
counsel to Seaside. The parties agree to, and agree not to object to, the Escrow
Agent's engagement as Escrow Agent hereunder;

            (j) Upon the full performance of this Agreement, the Escrow Agent
shall be deemed released and discharged of any further obligations hereunder.

      4.    INDEMNIFICATION.

            (a) Seaside hereby indemnifies and holds free and harmless the
Escrow Agent from any and all losses, expenses, liabilities and damages
(including but not limited to reasonable attorney's fees, and amounts paid in
settlement) resulting from claims asserted by the Target Company against the
Escrow Agent with respect to the performance of any of the provisions of this
Agreement;

            (b) The Target Company hereby indemnifies and holds free and
harmless the Escrow Agent from any and all losses, expenses, liabilities and
damages (including but not limited to reasonable attorney's fees, and amount
paid in settlement) resulting from claims asserted by Seaside against the Escrow
Agent with respect to the performance of any of the provisions of this
Agreement;

            (c) Seaside and the Target Company, jointly and severally, hereby
indemnify and hold the Escrow Agent harmless from and against any and all
losses, damages, taxes, liabilities and expenses that may be incurred by the
Escrow Agent, arising out of or in connection with its acceptance of appointment
as the Escrow Agent hereunder and/or the performance of its duties pursuant to
this Agreement, the Stock Purchase Agreement and the securities, including, but
not limited to, all legal costs and expenses of the Escrow Agent incurred
defending itself against any claim or liability in connection with its
performance hereunder, provided that the Escrow Agent shall not be entitled to
any indemnity for any losses, damages, taxes, liabilities or expenses that
directly result from its willful misconduct or gross negligence in its
performance as Escrow Agent hereunder

            (d) In the event of any legal action or Proceeding involving any of
the parties to this Agreement which is brought to enforce or otherwise
adjudicate any of the rights or obligations of the parties hereunder, the
non-prevailing party or parties shall pay the legal fees of the prevailing party
or parties and the legal fees, if any, of the Escrow Agent.

      5.    MISCELLANEOUS.



                                      A-4
<PAGE>

            (a) All notices, including the Sale Notice, objections, requests,
demands and other communications sent to any party hereunder shall be deemed
duly given if (x) in writing and sent by facsimile transmission to the Person
for whom intended if addressed to such Person at its facsimile number set forth
below or such other facsimile number as such Person may designate by notice
given pursuant to the terms of this Section 5 and (y) the sender has
confirmation of transmission:

            (i)    If to the Target Company:  Molecular Diagnostics, Inc.
                                              Attn: Dr. Denis M. O'Donnell, M.D.
                                              President and CEO
                                              414 N. Orleans, Suite 502
                                              Chicago, IL  60610
                                              Tel:  (312) 222-9550
                                              Fax: (312) 222-9580

            (ii)   If to Seaside:             Seaside Investments PLC
                                              30 Farringdon Street
                                              London EC4A 4HJ
                                              Attn: Harry Pearl
                                              Tel: 44.207.569.0044
                                              Fax: 44.207.724.0090

            (iii)  If to the Escrow
                                               Agent: Gottbetter
                                               & Partners, LLP
                                               488 Madison Ave.
                                               New York, New York
                                               10022 Attn: Adam
                                               S. Gottbetter,
                                               Esq. Tel: (212)
                                               400-6900 Fax:
                                               (212) 400-6901

            (b) This Agreement has been prepared, negotiated and delivered in
the state of New York and shall be governed by and construed and enforced in
accordance with the laws of the state of New York applicable to contracts
entered into and performed entirely within New York, without giving effect to
the principles of New York law relating to the conflict of laws.

            (c) This Agreement may be executed in two or more counterparts, all
of which when taken together shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.

            (d) This Agreement shall be binding upon and inure to the benefit of
the parties and their successors and permitted assigns. The assignment by a
party of this Agreement or any rights hereunder shall not affect the obligations
of such party under this Agreement.



                                      A-5
<PAGE>

      6. TERMINATION OF ESCROW. The term of this Escrow Agreement shall begin
upon the date hereof and shall continue until terminated upon the earlier to
occur of (i) the Seaside Escrow Shares are fully distributed or (ii) the written
agreement of the parties to terminate this Agreement. Upon the termination of
this Escrow Agreement pursuant to subsection (ii), the Escrow Agent shall
distribute any of the Seaside Escrow Shares then held by it pursuant to the
terms of the written agreement of the parties.


                           [ SIGNATURE PAGE FOLLOWS ]




                                      A-6
<PAGE>


      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed the day and year first above written.


                                      The Target Company:

                                      Molecular Diagnostics, Inc.


                                      By:
                                         -------------------------
                                      Dr. Denis M. O'Donnell, M.D.
                                      President and CEO


                                      Seaside:

                                      Dungarvon Associates, Inc. on behalf of
                                      Seaside Investments Plc.


                                      By:
                                         -------------------------
                                      Name:
                                      Title:


                                      Escrow Agent:

                                      Gottbetter & Partners, LLP


                                      By:
                                         -------------------------
                                      Name: Adam S Gottbetter
                                      Title: Managing Partner



                                      A-7
<PAGE>

                                    EXHIBIT B

                           MOLECULAR DIAGNOSTICS, INC.

                              OFFICER'S CERTIFICATE


      I, Dr. Denis M. O'Donnell, M.D., being the President and CEO of Molecular
Diagnostics, Inc., a Delaware corporation (the "Target Company"), pursuant to
Section 2.2(a)(ii) of that certain Stock Purchase Agreement (the "Purchase
Agreement"), dated as of October 5, 2004, by and between the Target Company and
Seaside Investments PLC, do hereby certify on behalf of the Target Company that
attached hereto is a copy of the resolutions duly adopted by the Board of
Directors of the Target Company authorizing the Target Company to execute and
deliver the Transaction Documents, as such term is defined in the Purchase
Agreement and to enter into the transactions contemplated thereby.

      IN WITNESS WHEREOF, I have executed this Officer's Certificate on behalf
of the Target Company this 5th day of October, 2004.

                                                   Molecular Diagnostics, Inc.


                                                   By:
                                                      -------------------------
                                                   Dr. Denis M. O'Donnell, M.D.
                                                   President and CEO


                                      B-1
<PAGE>

                                    EXHIBIT C


                          REGISTRATION RIGHTS AGREEMENT

      THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of October
4, 2004, by and among Molecular Diagnostics, Inc., a Delaware corporation, with
its principal office located at 414 N. Orleans, Suite 502, Chicago, IL 60610
(the "Target Company"), and Seaside Investments Plc., a company incorporated in
England and Wales, with its principal place of business at 30 Farringdon Street,
London EC4A 4HJ ("Seaside").

      Simultaneously with the execution and delivery of this Agreement, Seaside
and the Target Company have entered into a Stock Purchase Agreement, dated as of
the date hereof (the "Purchase Agreement"), which Purchase Agreement is
incorporated herein by reference, and pursuant to which the Purchaser has agreed
to purchase the Target Company's common stock, par value $.001 (the "Common
Stock"; and such shares of Common Stock purchased, the "Consideration Stock"),
all as more particularly provided therein.


NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Target Company and Seaside
hereby agree as follows:

      1.    DEFINITIONS.

As used in this Agreement, the following terms shall have the following
meanings:

      (a) "Person" means a corporation, a limited liability company, an
      association, a partnership, an organization, a business, an individual, a
      governmental or political subdivision thereof or a governmental agency.

      (b) "Register," "registered," and "registration" refer to a registration
      effected by preparing and filing one or more Registration Statements (as
      defined below) in compliance with the 1933 Act and pursuant to Rule 415
      under the 1933 Act or any successor rule providing for offering securities
      on a continuous or delayed basis ("Rule 415"), and the declaration or
      ordering of effectiveness of such Registration Statement(s) by the United
      States Securities and Exchange SEC (the "SEC").

      (c) "Registrable Securities" means the shares of Consideration Stock.

      (d) "Registration Statement" means a registration statement under the 1933
      Act which covers the Registrable Securities.

      2.    REGISTRATION.




                                      C-1
<PAGE>

      (a) Subject to the terms and conditions of this Agreement, the Target
      Company shall prepare and file, no later than eight (8) months from the
      date hereof, with the SEC a registration statement on Form S-1 or SB-2
      (or, if the Target Company is then eligible, on Form S-3) under the 1933
      Act (the "Initial Registration Statement") for the registration for the
      resale by Seaside, who purchased shares of Common Stock pursuant to the
      Purchase Agreement the shares of Consideration Stock. The Target Company
      shall cause the Registration Statement to remain effective until all of
      the Registrable Securities have been sold. Prior to the filing of the
      Registration Statement with the SEC, the Target Company shall furnish a
      copy of the Initial Registration Statement to Seaside and Gottbetter &
      Partners LLP for their review and comment. Seaside and Gottbetter &
      Partners LLP shall furnish comments on the Initial Registration Statement
      to the Target Company within three (3) Business Days of the receipt
      thereof from the Target Company.

      (b) Effectiveness of the Initial Registration Statement. The Target
      Company shall use its best efforts (i) to have the Initial Registration
      Statement declared effective by the SEC no later than one year anniversary
      from date hereof (the "Scheduled Effective Deadline") and (ii) to insure
      that the Initial Registration Statement and any subsequent Registration
      Statement remains in effect until the earlier of (A) all of the
      Registrable Securities have been sold, subject to the terms and conditions
      of this Agreement or (B) in the written opinion of counsel for the Target
      Company all of the Registrable Securities are eligible for sale without an
      effective Registration Statement under the 1933 Act.

      (c) Failure to Obtain Effectiveness of the Registration Statement. In the
      event the Registration Statement is not declared effective by the SEC on
      or before the Scheduled Effective Deadline, sales cannot be made pursuant
      to the Registration Statement whether because of a failure to keep the
      Registration Statement effective, failure to disclose such information as
      is necessary for sales to be made pursuant to the Registration Statement,
      failure to register sufficient shares of Common Stock or otherwise then as
      partial relief for the damages to any holder of Registrable Securities by
      reason of any such delay in or reduction of its ability to sell the
      underlying shares of Common Stock (which remedy shall not be exclusive of
      any other remedies at law or in equity), the Target Company will pay as
      liquidated damages (the "Liquidated Damages") to Seaside, at Seaside's
      option, either a cash amount or shares of the Target Company's Common
      Stock within three (3) business days, after demand therefore, equal to
      three percent (3%) of the Per Share Market Value of the Common Stock
      outstanding as Liquidated Damages.

      (d) Liquidated Damages. The Target Company and Seaside hereto acknowledge
      and agree that the sums payable under subsections 2(c) above shall
      constitute liquidated damages and not penalties and are in addition to all
      other rights of Seaside, including the right to call a default. The
      parties further acknowledge that (i) the amount of loss or damages likely
      to be incurred is incapable or is difficult to precisely estimate, (ii)
      the amounts specified in such subsections bear a reasonable relationship
      to, and are not plainly or grossly disproportionate to, the probable loss
      likely to be incurred in connection with any failure by the Target Company
      to obtain or maintain the effectiveness of a Registration Statement, (iii)
      one of the reasons for the Target Company and Seaside reaching an
      agreement as to such amounts was the uncertainty and cost of litigation
      regarding the question of actual damages, and (iv) the Target Company and
      Seaside are sophisticated business parties and have been represented by
      sophisticated and able legal counsel and negotiated this Agreement at
      arm's length.



                                      C-2
<PAGE>

      3.    RELATED OBLIGATIONS.


      (a) The Target Company shall keep the Registration Statement effective
      pursuant to Rule 415 at all times until the date on which Seaside shall
      have sold all the Registrable Securities covered by such Registration
      Statement (the "Registration Period"), which Registration Statement
      (including any amendments or supplements thereto and prospectuses
      contained therein) shall not contain any untrue statement of a material
      fact or omit to state a material fact required to be stated therein, or
      necessary to make the statements therein, in light of the circumstances in
      which they were made, not misleading.


      (b) The Target Company shall prepare and file with the SEC such amendments
      (including post-effective amendments) and supplements to a Registration
      Statement and the prospectus used in connection with such Registration
      Statement, which prospectus is to be filed pursuant to Rule 424
      promulgated under the 1933 Act, as may be necessary to keep such
      Registration Statement effective at all times during the Registration
      Period, and, during such period, comply with the provisions of the 1933
      Act with respect to the disposition of all Registrable Securities of the
      Target Company covered by such Registration Statement until such time as
      all of such Registrable Securities shall have been disposed of in
      accordance with the intended methods of disposition by the seller or
      sellers thereof as set forth in such Registration Statement. In the case
      of amendments and supplements to a Registration Statement which are
      required to be filed pursuant to this Agreement (including pursuant to
      this Section 3(b)) by reason of the Target Company's filing a report on
      Form 10-KSB, Form 10-QSB or Form 8-K or any analogous report under the
      Securities Exchange Act of 1934, as amended (the "1934 Act"), the Target
      Company shall incorporate such report by reference into the Registration
      Statement, if applicable, or shall file such amendments or supplements
      with the SEC on the same day on which the 1934 Act report is filed which
      created the requirement for the Target Company to amend or supplement the
      Registration Statement.

      (c) The Target Company shall furnish to Seaside, without charge, (i) at
      least one (1) copy of such Registration Statement as declared effective by
      the SEC and any amendment(s) thereto, including financial statements and
      schedules, all documents incorporated therein by reference, all exhibits
      and each preliminary prospectus, (ii) ten (10) copies of the final
      prospectus included in such Registration Statement and all amendments and
      supplements thereto (or such other number of copies as Seaside may
      reasonably request) and (iii) such other documents as Seaside may
      reasonably request from time to time in order to facilitate the
      disposition of the Registrable Securities owned by Seaside.



                                      C-3
<PAGE>

      (d) The Target Company shall use its best efforts to (i) register and
      qualify the Registrable Securities covered by a Registration Statement
      under such other securities or "blue sky" laws of such jurisdictions in
      the United States as Seaside reasonably requests, (ii) prepare and file in
      those jurisdictions, such amendments (including post-effective amendments)
      and supplements to such registrations and qualifications as may be
      necessary to maintain the effectiveness thereof during the Registration
      Period, (iii) take such other actions as may be necessary to maintain such
      registrations and qualifications in effect at all times during the
      Registration Period, and (iv) take all other actions reasonably necessary
      or advisable to qualify the Registrable Securities for sale in such
      jurisdictions; provided, however, that the Target Company shall not be
      required in connection therewith or as a condition thereto to (w) make any
      change to its certificate of incorporation or by-laws, (x) qualify to do
      business in any jurisdiction where it would not otherwise be required to
      qualify but for this Section 3(d), (y) subject itself to general taxation
      in any such jurisdiction, or (z) file a general consent to service of
      process in any such jurisdiction. The Target Company shall promptly notify
      Seaside of the receipt by the Target Company of any notification with
      respect to the suspension of the registration or qualification of any of
      the Registrable Securities for sale under the securities or "blue sky"
      laws of any jurisdiction in the United States or its receipt of actual
      notice of the initiation or threat of any proceeding for such purpose.

      (e) As promptly as practicable after becoming aware of such event or
      development, the Target Company shall notify Seaside in writing of the
      happening of any event as a result of which the prospectus included in a
      Registration Statement, as then in effect, includes an untrue statement of
      a material fact or omission to state a material fact required to be stated
      therein or necessary to make the statements therein, in light of the
      circumstances under which they were made, not misleading (provided that in
      no event shall such notice contain any material, nonpublic information),
      and promptly prepare a supplement or amendment to such Registration
      Statement to correct such untrue statement or omission, and deliver ten
      (10) copies of such supplement or amendment to Seaside. The Target Company
      shall also promptly notify Seaside in writing (i) when a prospectus or any
      prospectus supplement or post-effective amendment has been filed, and when
      a Registration Statement or any post-effective amendment has become
      effective (notification of such effectiveness shall be delivered to
      Seaside by facsimile on the same day of such effectiveness), (ii) of any
      request by the SEC for amendments or supplements to a Registration
      Statement or related prospectus or related information, and (iii) of the
      Target Company's reasonable determination that a post-effective amendment
      to a Registration Statement would be appropriate.

      (f) The Target Company shall use its best efforts to prevent the issuance
      of any stop order or other suspension of effectiveness of a Registration
      Statement, or the suspension of the qualification of any of the
      Registrable Securities for sale in any jurisdiction within the United
      States of America and, if such an order or suspension is issued, to obtain
      the withdrawal of such order or suspension at the earliest possible moment
      and to notify Seaside of the issuance of such order and the resolution
      thereof or its receipt of actual notice of the initiation or threat of any
      proceeding for such purpose.




                                      C-4
<PAGE>

      (g) At the reasonable request of Seaside, the Target Company shall furnish
      to Seaside, on the date of the effectiveness of the Registration Statement
      and thereafter from time to time on such dates as Seaside may reasonably
      request (i) a letter, dated such date, from the Target Company's
      independent certified public accountants in form and substance as is
      customarily given by independent certified public accountants to
      underwriters in an underwritten public offering, and (ii) an opinion,
      dated as of such date, of counsel representing the Target Company for
      purposes of such Registration Statement, in form, scope and substance as
      is customarily given in an underwritten public offering, addressed to
      Seaside.

      (h) The Target Company shall make available for inspection by (i) Seaside
      and (ii) one (1) firm of accountants or other agents retained by Seaside
      (collectively, the "Inspectors") all pertinent financial and other
      records, and pertinent corporate documents and properties of the Target
      Company (collectively, the "Records"), as shall be reasonably deemed
      necessary by each Inspector, and cause the Target Company's officers,
      directors and employees to supply all information which any Inspector may
      reasonably request; provided, however, that each Inspector shall agree,
      and Seaside hereby agrees, to hold in strict confidence and shall not make
      any disclosure (except to Seaside) or use any Record or other information
      which the Target Company determines in good faith to be confidential, and
      of which determination the Inspectors are so notified, unless (a) the
      disclosure of such Records is necessary to avoid or correct a misstatement
      or omission in any Registration Statement or is otherwise required under
      the 1933 Act, (b) the release of such Records is ordered pursuant to a
      final, non-appealable subpoena or order from a court or government body of
      competent jurisdiction, or (c) the information in such Records has been
      made generally available to the public other than by disclosure in
      violation of this or any other agreement of which the Inspector and
      Seaside has knowledge. Seaside agrees that it shall, upon learning that
      disclosure of such Records is sought in or by a court or governmental body
      of competent jurisdiction or through other means, give prompt notice to
      the Target Company and allow the Target Company, at its expense, to
      undertake appropriate action to prevent disclosure of, or to obtain a
      protective order for, the Records deemed confidential.

      (h) The Target Company shall hold in confidence and not make any
      disclosure of information concerning Seaside provided to the Target
      Company unless (i) disclosure of such information is necessary to comply
      with federal or state securities laws, (ii) the disclosure of such
      information is necessary to avoid or correct a misstatement or omission in
      any Registration Statement, (iii) the release of such information is
      ordered pursuant to a subpoena or other final, non-appealable order from a
      court or governmental body of competent jurisdiction, or (iv) such
      information has been made generally available to the public other than by
      disclosure in violation of this Agreement or any other agreement. The
      Target Company agrees that it shall, upon learning that disclosure of such
      information concerning Seaside is sought in or by a court or governmental
      body of competent jurisdiction or through other means, give prompt written
      notice to Seaside and allow Seaside, at Seaside's expense, to undertake
      appropriate action to prevent disclosure of, or to obtain a protective
      order for, such information.



                                      C-5
<PAGE>

      (i) The Target Company shall use its best efforts either to cause all the
      Registrable Securities covered by a Registration Statement (i) to be
      listed on each securities exchange on which securities of the same class
      or series issued by the Target Company are then listed, if any, if the
      listing of such Registrable Securities is then permitted under the rules
      of such exchange or (ii) the inclusion for quotation on the National
      Association of Securities Dealers, Inc. OTC Bulletin Board for such
      Registrable Securities. The Target Company shall pay all fees and expenses
      in connection with satisfying its obligation under this Section 3(i).

      (j) The Target Company shall cooperate with Seaside and, to the extent
      applicable, to facilitate the timely preparation and delivery of
      certificates (not bearing any restrictive legend) representing the
      Registrable Securities to be offered pursuant to a Registration Statement
      and enable such certificates to be in such denominations or amounts, as
      the case may be, as Seaside may reasonably request and registered in such
      names as Seaside may request.

      (k) The Target Company shall use its best efforts to cause the Registrable
      Securities covered by the applicable Registration Statement to be
      registered with or approved by such other governmental agencies or
      authorities as may be necessary to consummate the disposition of such
      Registrable Securities.

      (l) The Target Company shall make generally available to its security
      holders as soon as practical, but not later than ninety (90) days after
      the close of the period covered thereby, an earnings statement (in form
      complying with the provisions of Rule 158 under the 1933 Act) covering a
      twelve (12) month period beginning not later than the first day of the
      Target Company's fiscal quarter next following the effective date of the
      Registration Statement.

      (m) The Target Company shall otherwise use its best efforts to comply with
      all applicable rules and regulations of the SEC in connection with any
      registration hereunder.

      (n) Within two (2) business days after a Registration Statement which
      covers Registrable Securities is declared effective by the SEC, the Target
      Company shall deliver, and shall cause legal counsel for the Target
      Company to deliver, to the transfer agent for such Registrable Securities
      (with copies to Seaside whose Registrable Securities are included in such
      Registration Statement) confirmation that such Registration Statement has
      been declared effective by the SEC in the form attached hereto as Exhibit
      A.

      (o) The Target Company shall take all other reasonable actions necessary
      to expedite and facilitate disposition by Seaside of Registrable
      Securities pursuant to a Registration Statement.

      4.    OBLIGATIONS OF SEASIDE.




                                      C-6
<PAGE>

      Seaside agrees that, upon receipt of any notice from the Target Company of
the happening of any event of the kind described in Section 3(f) or the first
sentence of 3(e), Seaside will immediately discontinue disposition of
Registrable Securities pursuant to any Registration Statement(s) covering such
Registrable Securities until Seaside's receipt of the copies of the supplemented
or amended prospectus contemplated by Section 3(e) or receipt of notice that no
supplement or amendment is required. Notwithstanding anything to the contrary,
the Target Company shall cause its transfer agent to deliver unlegended
certificates for shares of Common Stock to a transferee of Seaside in accordance
with the terms of the Securities Purchase Agreement in connection with any sale
of Registrable Securities with respect to which Seaside has entered into a
contract for sale prior to Seaside's receipt of a notice from the Target Company
of the happening of any event of the kind described in Section 3(f) or the first
sentence of 3(e) and for which Seaside has not yet settled. Seaside shall
furnish the Target Company with such information as the Target Company
reasonably requests for disclosure in the Registration Statement as required by
the rules and regulations of the SEC.

      5.    EXPENSES OF REGISTRATION.

      All expenses incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including, without limitation, all
registration, listing and qualifications fees, printers, legal and accounting
fees shall be paid by the Target Company, except that Seaside shall pay all
discounts and commission relating to the sale of Registrable Securities and the
fees of any attorneys or advisors retained by Seaside.

      6.    INDEMNIFICATION.


      With respect to Registrable Securities which are included in a
Registration Statement under this Agreement:

      (a) To the fullest extent permitted by law, the Target Company will, and
      hereby does, indemnify, hold harmless and defend Seaside, the directors,
      officers, partners, employees, agents, representatives of, and each
      Person, if any, who controls Seaside within the meaning of the 1933 Act or
      the 1934 Act (each, an "Indemnified Person"), against any losses, claims,
      damages, liabilities, judgments, fines, penalties, charges, costs,
      reasonable attorneys' fees, amounts paid in settlement or expenses, joint
      or several (collectively, "Claims") incurred in investigating, preparing
      or defending any action, claim, suit, inquiry, proceeding, investigation
      or appeal taken from the foregoing by or before any court or governmental,
      administrative or other regulatory agency, body or the SEC, whether
      pending or threatened, whether or not an indemnified party is or may be a
      party thereto ("Indemnified Damages"), to which any of them may become
      subject insofar as such Claims (or actions or proceedings, whether
      commenced or threatened, in respect thereof) arise out of or are based
      upon: (i) any untrue statement or alleged untrue statement of a material
      fact in a Registration Statement or any post-effective amendment thereto
      or in any filing made in connection with the qualification of the offering
      under the securities or other "blue sky" laws of any jurisdiction in which
      Registrable Securities are offered ("Blue Sky Filing"), or the omission or
      alleged omission to state a material fact required to be stated therein or
      necessary to make the statements therein not misleading; (ii) any untrue
      statement or alleged untrue statement of a material fact contained in any
      final prospectus (as amended or supplemented, if the Target Company files
      any amendment thereof or supplement thereto with the SEC) or the omission
      or alleged omission to state therein any material fact necessary to make
      the statements made therein, in light of the circumstances under which the
      statements therein were made, not misleading; or (iii) any violation or
      alleged violation by the Target Company of the 1933 Act, the 1934 Act, any
      other law, including, without limitation, any state securities law, or any
      rule or regulation there under relating to the offer or sale of the
      Registrable Securities pursuant to a Registration Statement (the matters
      in the foregoing clauses (i) through (iii) being, collectively,
      "Violations"). The Target Company shall reimburse Seaside and each such
      controlling person promptly as such expenses are incurred and are due and
      payable, for any legal fees or disbursements or other reasonable expenses
      incurred by them in connection with investigating or defending any such
      Claim. Notwithstanding anything to the contrary contained herein, the
      indemnification agreement contained in this Section 6(a): (x) shall not
      apply to a Claim by an Indemnified Person arising out of or based upon a
      Violation which occurs in reliance upon and in conformity with information
      furnished in writing to the Target Company by such Indemnified Person
      expressly for use in connection with the preparation of the Registration
      Statement or any such amendment thereof or supplement thereto; (y) shall
      not be available to the extent such Claim is based on a failure of Seaside
      to deliver or to cause to be delivered the prospectus made available by
      the Target Company, if such prospectus was timely made available by the
      Target Company pursuant to Section 3(c); and (z) shall not apply to
      amounts paid in settlement of any Claim if such settlement is effected
      without the prior written consent of the Target Company, which consent
      shall not be unreasonably withheld. Such indemnity shall remain in full
      force and effect regardless of any investigation made by or on behalf of
      the Indemnified Person and shall survive the transfer of the Registrable
      Securities by Seaside pursuant to Section 9 hereof.



                                      C-7
<PAGE>

      (b) In connection with a Registration Statement, Seaside agrees to
      severally and not jointly indemnify, hold harmless and defend, to the same
      extent and in the same manner as is set forth in Section 6(a), the Target
      Company, each of its directors, each of its officers, employees,
      representatives, or agents and each Person, if any, who controls the
      Target Company within the meaning of the 1933 Act or the 1934 Act (each an
      "Indemnified Party"), against any Claim or Indemnified Damages to which
      any of them may become subject, under the 1933 Act, the 1934 Act or
      otherwise, insofar as such Claim or Indemnified Damages arise out of or is
      based upon any Violation, in each case to the extent, and only to the
      extent, that such Violation occurs in reliance upon and in conformity with
      written information furnished to the Target Company by Seaside expressly
      for use in connection with such Registration Statement; and, subject to
      Section 6(d), Seaside will reimburse any legal or other expenses
      reasonably incurred by them in connection with investigating or defending
      any such Claim; provided, however, that the indemnity agreement contained
      in this Section 6(b) and the agreement with respect to contribution
      contained in Section 7 shall not apply to amounts paid in settlement of
      any Claim if such settlement is effected without the prior written consent
      of Seaside, which consent shall not be unreasonably withheld; provided,
      further, however, that Seaside shall be liable under this Section 6(b) for
      only that amount of a Claim or Indemnified Damages as does not exceed the
      net proceeds to Seaside as a result of the sale of Registrable Securities
      pursuant to such Registration Statement. Such indemnity shall remain in
      full force and effect regardless of any investigation made by or on behalf
      of such Indemnified Party and shall survive the transfer of the
      Registrable Securities by Seaside pursuant to Section 9. Notwithstanding
      anything to the contrary contained herein, the indemnification agreement
      contained in this Section 6(b) with respect to any prospectus shall not
      inure to the benefit of any Indemnified Party if the untrue statement or
      omission of material fact contained in the prospectus was corrected and
      such new prospectus was delivered to Seaside prior to Seaside's use of the
      prospectus to which the Claim relates.



                                      C-8
<PAGE>

      (c) Promptly after receipt by an Indemnified Person or Indemnified Party
      under this Section 6 of notice of the commencement of any action or
      proceeding (including any governmental action or proceeding) involving a
      Claim, such Indemnified Person or Indemnified Party shall, if a Claim in
      respect thereof is to be made against any indemnifying party under this
      Section 6, deliver to the indemnifying party a written notice of the
      commencement thereof, and the indemnifying party shall have the right to
      participate in, and, to the extent the indemnifying party so desires,
      jointly with any other indemnifying party similarly noticed, to assume
      control of the defense thereof with counsel mutually satisfactory to the
      indemnifying party and the Indemnified Person or the Indemnified Party, as
      the case may be; provided, however, that an Indemnified Person or
      Indemnified Party shall have the right to retain its own counsel with the
      fees and expenses of not more than one (1) counsel for such Indemnified
      Person or Indemnified Party to be paid by the indemnifying party, if, in
      the reasonable opinion of counsel retained by the indemnifying party, the
      representation by such counsel of the Indemnified Person or Indemnified
      Party and the indemnifying party would be inappropriate due to actual or
      potential differing interests between such Indemnified Person or
      Indemnified Party and any other party represented by such counsel in such
      proceeding. The Indemnified Party or Indemnified Person shall cooperate
      fully with the indemnifying party in connection with any negotiation or
      defense of any such action or claim by the indemnifying party and shall
      furnish to the indemnifying party all information reasonably available to
      the Indemnified Party or Indemnified Person which relates to such action
      or claim. The indemnifying party shall keep the Indemnified Party or
      Indemnified Person fully apprised at all times as to the status of the
      defense or any settlement negotiations with respect thereto. No
      indemnifying party shall be liable for any settlement of any action, claim
      or proceeding effected without its prior written consent; provided,
      however, that the indemnifying party shall not unreasonably withhold,
      delay or condition its consent. No indemnifying party shall, without the
      prior written consent of the Indemnified Party or Indemnified Person,
      consent to entry of any judgment or enter into any settlement or other
      compromise which does not include as an unconditional term thereof the
      giving by the claimant or plaintiff to such Indemnified Party or
      Indemnified Person of a release from all liability in respect to such
      claim or litigation. Following indemnification as provided for hereunder,
      the indemnifying party shall be subrogated to all rights of the
      Indemnified Party or Indemnified Person with respect to all third parties,
      firms or corporations relating to the matter for which indemnification has
      been made. The failure to deliver written notice to the indemnifying party
      within a reasonable time of the commencement of any such action shall not
      relieve such indemnifying party of any liability to the Indemnified Person
      or Indemnified Party under this Section 6, except to the extent that the
      indemnifying party is prejudiced in its ability to defend such action.



                                      C-9
<PAGE>

      (d) The indemnification required by this Section 6 shall be made by
      periodic payments of the amount thereof during the course of the
      investigation or defense, as and when bills are received or Indemnified
      Damages are incurred.

      (e) The indemnity agreements contained herein shall be in addition to (i)
      any cause of action or similar right of the Indemnified Party or
      Indemnified Person against the indemnifying party or others, and (ii) any
      liabilities the indemnifying party may be subject to pursuant to the law.

      7.    CONTRIBUTION.


      To the extent any indemnification by an indemnifying party is prohibited
or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided, however, that:
(i) no seller of Registrable Securities guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any seller of Registrable Securities who was not guilty of
fraudulent misrepresentation; and (ii) contribution by any seller of Registrable
Securities shall be limited in amount to the net amount of proceeds received by
such seller from the sale of such Registrable Securities.

      8.    REPORTS UNDER THE 1934 ACT.

      With a view to making available to Seaside the benefits of Rule 144
promulgated under the 1933 Act or any similar rule or regulation of the SEC that
may at any time permit Seaside to sell securities of the Target Company to the
public without registration ("Rule 144") the Target Company agrees to:

      (a) make and keep public information available, as those terms are
      understood and defined in Rule 144;

      (b) file with the SEC in a timely manner all reports and other documents
      required of the Target Company under the 1933 Act and the 1934 Act so long
      as the Target Company remains subject to such requirements (it being
      understood that nothing herein shall limit the Target Company's
      obligations under Section 4(c) of the Securities Purchase Agreement) and
      the filing of such reports and other documents as are required by the
      applicable provisions of Rule 144; and

      (c) furnish to Seaside so long as Seaside owns Registrable Securities,
      promptly upon request, (i) a written statement by the Target Company that
      it has complied with the reporting requirements of Rule 144, the 1933 Act
      and the 1934 Act, (ii) a copy of the most recent annual or quarterly
      report of the Target Company and such other reports and documents so filed
      by the Target Company, and (iii) such other information as may be
      reasonably requested to permit Seaside to sell such securities pursuant to
      Rule 144 without registration.



                                      C-10
<PAGE>

      9.    AMENDMENT OF REGISTRATION RIGHTS.


      Provisions of this Agreement may be amended and the observance thereof may
be waived (either generally or in a particular instance and either retroactively
or prospectively), only with the written consent of the Target Company and
Seaside. Any amendment or waiver effected in accordance with this Section 9
shall be binding upon Seaside and the Target Company. No such amendment shall be
effective to the extent that it applies to fewer than all of the holders of the
Registrable Securities. No consideration shall be offered or paid to any Person
to amend or consent to a waiver or modification of any provision of any of this
Agreement unless the same consideration also is offered to all of the parties to
this Agreement.

      10.   MISCELLANEOUS.


      (a) A Person is deemed to be a holder of Registrable Securities whenever
      such Person owns or is deemed to own of record such Registrable
      Securities. If the Target Company receives conflicting instructions,
      notices or elections from two (2) or more Persons with respect to the same
      Registrable Securities, the Target Company shall act upon the basis of
      instructions, notice or election received from the registered owner of
      such Registrable Securities.

      (b) Any notices, consents, waivers or other communications required or
      permitted to be given under the terms of this Agreement must be in writing
      and will be deemed to have been delivered: (i) upon receipt, when
      delivered personally; (ii) upon receipt, when sent by facsimile (provided
      confirmation of transmission is mechanically or electronically generated
      and kept on file by the sending party); or (iii) one (1) business day
      after deposit with a nationally recognized overnight delivery service, in
      each case properly addressed to the party to receive the same. The
      addresses and facsimile numbers for such communications shall be:


If to the Target Company, to:        Molecular Diagnostics, Inc.
                                     414 N. Orleans, Suite 502
                                     Chicago, IL  60610
                                     Attention:  Dr. Denis M. O'Donnell, M.D.
                                     Telephone: (312) 222-9550
                                     Facsimile:   (312) 222-9580


If to Seaside:                       Seaside Investments PLC
                                     30 Farringdon Street
                                     London EC4A 4HJ
                                     Attention:  Harry Pearl
                                     Telephone:  44.207.569.0044
                                     Facsimile:   44.207.724.0090



                                      C-11
<PAGE>

Written confirmation of receipt (A) given by the recipient of such notice,
consent, waiver or other communication, (B) mechanically or electronically
generated by the sender's facsimile machine containing the time, date, recipient
facsimile number and an image of the first page of such transmission or (C)
provided by a courier or overnight courier service shall be rebuttable evidence
of personal service, receipt by facsimile or receipt from a nationally
recognized overnight delivery service in accordance with clause (i), (ii) or
(iii) above, respectively.

            (c) Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.

            (d) The laws of the State of Delaware shall govern all issues
concerning the relative rights of the Target Company and Seaside as its
stockholders. All other questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by the
internal laws of the State of New York, without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of New York or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of New York. Each party hereby irrevocably
submits to the non-exclusive jurisdiction of the Courts of the State of New
York, sitting in New York County and federal courts for the District of New York
sitting New York, New York, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
If any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of any provision of this Agreement in any other
jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND
AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.

            (e) This Agreement and the Purchase Agreement and related documents
constitute the entire agreement among the parties hereto with respect to the
subject matter hereof and thereof. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein and
therein. This Agreement and the Purchase Agreement and related documents
supersede all prior agreements and understandings among the parties hereto with
respect to the subject matter hereof and thereof.

            (f) This Agreement shall inure to the benefit of and be binding upon
the permitted successors and assigns of each of the parties hereto.



                                      C-12
<PAGE>

            (g) The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.

            (h) This Agreement may be executed in identical counterparts, each
of which shall be deemed an original but all of which shall constitute one and
the same agreement. This Agreement, once executed by a party, may be delivered
to the other party hereto by facsimile transmission of a copy of this Agreement
bearing the signature of the party so delivering this Agreement.

            (i) Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.

            The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent and no rules of
strict construction will be applied against any party.

            (j) This Agreement is intended for the benefit of the parties hereto
and their respective permitted successors and assigns, and is not for the
benefit of, nor may any provision hereof be enforced by, any other Person.


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


                                      C-13
<PAGE>

IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement
to be duly executed as of day and year first above written.

                                             TARGET COMPANY:
                                             MOLECULAR DIAGNOSTICS, INC.

                                             By:
                                                --------------------------------
                                             Name:  Dr. Denis M. O'Donnell, M.D.
                                             Title: President and CEO


                                      C-14