Document:

Exhibit 4.4

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

                                                                 Warrant No. JL1

                     WARRANT TO PURCHASE SHARES OF COMMON STOCK

                         ISSUE DATE: September 15, 2004

      This certifies that Jorge Leon, Ph.D. or any valid transferee thereof (the
"Holder"),   for  value  received,   is  entitled  to  purchase  from  Molecular
Diagnostics,  Inc., a Delaware  corporation  with its principal  business office
located at 414 North Orleans  Street,  Suite 510,  Chicago,  Illinois 60610 (the
"Company"),  subject to the terms and conditions set forth below, at any time or
from time to time on and after the  Vesting  Date (as  defined  below) set forth
above and  before  3:00 p.m.  (Central  Time) on the  fifth  anniversary  of the
Vesting Date (the "Expiration  Date"),  25,000 shares of Common Stock, $.001 par
value per share, of the Company ("Common  Stock"),  at a purchase price of $0.20
per  share.  The shares  purchasable  upon  exercise  of this  Warrant,  and the
purchase  price per share,  each as adjusted  from time to time  pursuant to the
provisions of this Warrant,  are hereinafter referred to as the "Warrant Shares"
and the "Purchase Price,"  respectively.  As consideration for this Warrant, the
Holder named above agrees to forgive all outstanding indebtedness of the Company
to such named Holder.  The Holder expressly  agrees and  acknowledges  that this
Warrant shall not vest, and shall not be exercisable, in whole or in part, until
such time as the  stockholders  of the Company approve an increase in the number
of  authorized  shares of Common  Stock of the Company and an  amendment  to the
Company's  Certificate of  Incorporation is filed with the Secretary of State of
the State of Delaware to effect such increase (such date, the "Vesting Date").

     1. Exercise.

          (a) Exercise for Cash. The Holder may, at the Holder's  option,  elect
to exercise  this  Warrant,  in whole or in part and at any time or from time to
time on or after the Vesting Date but prior to 3:00 p.m.  (Central  Time) on the
Expiration Date, by surrendering  this Warrant,  with the purchase form appended
hereto  as  Exhibit  I duly  executed  by or on  behalf  of the  Holder,  at the
principal  office  of the  Company,  or at such  other  office  or agency as the
Company may  designate,  accompanied  by payment in full, in lawful money of the
United States, of the Purchase Price payable in respect of the number of Warrant
Shares purchased upon such exercise.  In no event shall any such exercise be for
fewer than  10,000  Warrant  Shares  unless  fewer than an  aggregate  of 10,000
Warrant Shares are then purchasable  under all outstanding  Warrants held by the
Holder.  Payment of the aggregate Purchase Price may be made in cash,  certified
or bank check, or wire transfer of immediately available funds.

                                      -1-
<PAGE>

          (b) Cashless Exercise.

               (i) The Holder may,  at the  Holder's  option,  elect to exercise
this  Warrant,  in whole  or in part and at any time or from  time to time on or
after the Vesting Date but prior to 3:00 p.m.  (Central  Time) on the Expiration
Date, on a cashless basis, by surrendering this Warrant,  with the purchase form
appended hereto as Exhibit I duly executed by or on behalf of the Holder, at the
principal  office  of the  Company,  or at such  other  office  or agency as the
Company may designate,  by canceling a portion of this Warrant in payment of the
Purchase Price payable in respect of the number of Warrant Shares purchased upon
such exercise. In the event of an exercise pursuant to this subsection 1(b), the
number of Warrant  Shares issued to the Holder shall be determined  according to
the following formula:

       X = Y(A-B)
              A

      Where:  X =       the  number of  Warrant  Shares  that shall be issued to
                        the Holder;

             Y          = the number of Warrant Shares for which this Warrant is
                        being exercised  (which shall include both the number of
                        Warrant  Shares  issued to the  Holder and the number of
                        Warrant  Shares  subject to the  portion of the  Warrant
                        being cancelled in payment of the Purchase Price);

             A =        the Fair  Market  Value (as defined  below) of one share
                        of Common Stock; and

             B =        the Purchase Price then in effect.

(ii) The Fair  Market  Value per share of Common  Stock shall be  determined  as
follows:

                    (1) If the Common  Stock is listed on a national  securities
exchange,  the Nasdaq National Market or the Nasdaq SmallCap Market,  or another
nationally  recognized trading system as of the Exercise Date (as defined in (c)
below),  the Fair Market  Value per share of Common  Stock shall be deemed to be
the average of the highest and lowest  reported  sale prices per share of Common
Stock  thereon on the trading day  immediately  preceding  the  Exercise  Date ;
provided  that if no such price is reported on such day,  the Fair Market  Value
per share of Common Stock shall be determined pursuant to clause (3).

                    (2)  If  the  Common  Stock  is  not  listed  on a  national
securities  exchange,  the Nasdaq National Market or the Nasdaq SmallCap Market,
or another nationally  recognized trading system as of the Exercise Date, but is
quoted on the  Over-The-Counter  Bulletin Board, the Fair Market Value per share
of Common  Stock shall be deemed to be the average of the highest bid and lowest
asked  prices  quoted  thereon on the  trading  day  immediately  preceding  the
Exercise  Date;  provided  that if no price is  reported  on such day,  the Fair
Market  Value per share of Common Stock shall be  determined  pursuant to clause
(3).

                                      -2-
<PAGE>

                    (3)  If  the  Common  Stock  is  not  listed  on a  national
securities  exchange,  the Nasdaq National Market, the Nasdaq SmallCap Market or
another nationally recognized trading system or the Over-the-Counter  Electronic
Bulletin  Board as of the  Exercise  Date,  the Fair  Market  Value per share of
Common Stock shall be deemed to be the amount most  recently  determined  by the
Board of  Directors of the Company  (the  "Board") to represent  the fair market
value  per  share  of  the  Common  Stock   (including   without   limitation  a
determination  for purposes of granting  Common Stock options or issuing  Common
Stock under any plan,  agreement or arrangement  with employees of the Company);
and, upon request of the Holder, the Board (or a representative  thereof) shall,
as  promptly  as  reasonably  practicable  but in any event  not  later  than 10
business days after such request, notify the Holder of the Fair Market Value per
share of Common Stock.  Notwithstanding the foregoing, if the Board has not made
such a determination  within the three-month  period prior to the Exercise Date,
then (A) the Board shall make,  and shall provide or cause to be provided to the
Holder  notice of, a  determination  of the Fair  Market  Value per share of the
Common Stock  within 15 business  days of a request by the Holder that it do so,
and (B) the exercise of this Warrant  pursuant to this  subsection 1(b) shall be
delayed until such  determination  is made and notice thereof is provided to the
Holder.

               (c) Exercise  Date and Status as Holder of Shares.  Each exercise
of this Warrant shall be deemed to have been effected  immediately  prior to the
close of business on the day on which this Warrant  shall have been  surrendered
to the  Company as  provided  in  subsection  1(a) or 1(b) above (the  "Exercise
Date"),  which Exercise  Date(s) shall not be prior to the Vesting Date. At such
time, the person or persons in whose name or names any  certificates for Warrant
Shares shall be issuable upon such exercise as provided in subsection 1(d) below
shall be deemed to have  become the  holder or holders of record of the  Warrant
Shares represented by such certificates.

               (d) Issuance of  Certificates.  As soon as practicable  after the
exercise  of this  Warrant  in whole  or in part,  and in any  event  within  10
business days thereafter,  the Company, at its expense,  will cause to be issued
in the name of, and delivered to, the Holder,  or as the Holder (upon payment by
the Holder of any applicable transfer taxes) may direct:

                    (i) a  certificate  or  certificates  for the number of full
Warrant Shares to which the Holder shall be entitled upon such exercise plus, in
lieu of any  fractional  share to which the Holder would  otherwise be entitled,
cash in an amount determined pursuant to Section 3 hereof; and

                    (ii) in case such exercise is in part only, a new warrant or
warrants (dated the date hereof) of like tenor,  calling in the aggregate on the
face or faces  thereof for the number of Warrant  Shares equal  (without  giving
effect to any adjustment therein) to the number of such shares called for on the
face of this Warrant  minus the number of Warrant  Shares for which this Warrant
was so exercised (which, in the case of an exercise pursuant to subsection 1(b),
shall include both the number of Warrant Shares issued to the Holder pursuant to
such partial exercise and the number of Warrant Shares subject to the portion of
the Warrant being cancelled in payment of the Purchase Price).

                                      -3-
<PAGE>

               (e)  Warrant  Shares.  The  Warrant  Shares  issued upon any such
exercise of this Warrant shall be validly issued, fully paid and non-assessable.

     2. Adjustments.

          (a) Adjustment for Stock Splits and Combinations. If the Company shall
at any time or from time to time  after the Issue Date as set forth on the first
page hereof (or, if this  Warrant  was issued upon  partial  exercise  of, or in
replacement  of,  another  warrant  of like  tenor,  then the date on which such
original  warrant was first issued)  (either such date being  referred to as the
"Original Issue Date") effect a subdivision of the outstanding Common Stock, the
Purchase  Price then in effect  immediately  before  that  subdivision  shall be
proportionately decreased. If the Company shall at any time or from time to time
after the Original  Issue Date combine the  outstanding  shares of Common Stock,
the Purchase Price then in effect  immediately  before the combination  shall be
proportionately  increased.  Any adjustment  under this  paragraph  shall become
effective at the close of business on the date the  subdivision  or  combination
becomes effective.

          (b) Adjustment for Certain Dividends and  Distributions.  In the event
the Company at any time or from time to time after the Original Issue Date shall
make or issue, or fix a record date for the  determination  of holders of Common
Stock  entitled  to  receive,  a  dividend  or  other  distribution  payable  in
additional  shares of Common  Stock,  then and in each such  event the  Purchase
Price then in effect  immediately before such event shall be decreased as of the
time of such issuance or, in the event such a record date shall have been fixed,
as of the close of business on such record  date,  by  multiplying  the Purchase
Price then in effect by a fraction:

               (1) the numerator of which shall be the total number of shares of
Common  Stock  issued  and  outstanding  immediately  prior  to the time of such
issuance or the close of business on such record date, and

               (2) the  denominator of which shall be the total number of shares
of Common Stock  issued and  outstanding  immediately  prior to the time of such
issuance  or the close of business on such record date plus the number of shares
of Common Stock issuable in payment of such dividend or distribution;

provided,  however,  that if such  record  date  shall  have been fixed and such
dividend is not fully paid or if such distribution is not fully made on the date
fixed  therefor,  the Purchase  Price shall be recomputed  accordingly as of the
close of business on such record date and thereafter the Purchase Price shall be
adjusted  pursuant to this  paragraph  as of the time of actual  payment of such
dividends or distributions.

          (c)  Adjustment in Number of Warrant  Shares.  When any  adjustment is
required to be made in the Purchase Price pursuant to subsections  2(a) or 2(b),
the number of Warrant Shares purchasable upon the exercise of this Warrant shall
be changed to the  number  determined  by  dividing  (i) an amount  equal to the
number of shares issuable upon the exercise of this Warrant immediately prior to
such adjustment, multiplied by the Purchase Price in effect immediately prior to
such  adjustment,  by (ii) the Purchase Price in effect  immediately  after such
adjustment.

                                      -4-
<PAGE>

          (d) Adjustments for Other  Dividends and  Distributions.  In the event
the Company at any time or from time to time after the Original Issue Date shall
make or issue, or fix a record date for the  determination  of holders of Common
Stock  entitled  to  receive,  a  dividend  or  other  distribution  payable  in
securities  of the Company  (other  than  shares of Common  Stock) or in cash or
other property (other than regular cash dividends paid out of earnings or earned
surplus,   determined  in  accordance   with   generally   accepted   accounting
principles),  then and in each such  event  provision  shall be made so that the
Holder shall receive upon exercise  hereof,  in addition to the number of shares
of Common Stock  issuable  hereunder,  the kind and amount of  securities of the
Company,  cash or other  property  which the Holder would have been  entitled to
receive had this  Warrant  been  exercised on the date of such event and had the
Holder  thereafter,  during  the  period  from  the  date of such  event  to and
including the Exercise Date, retained any such securities receivable during such
period,  giving  application  to all  adjustments  called for during such period
under this Section 2 with respect to the rights of the Holder.

          (e)   Adjustment  for   Reorganization.   If  there  shall  occur  any
reorganization,  recapitalization,  reclassification,  consolidation  or  merger
involving  the Company in which the Common Stock is converted  into or exchanged
for  securities,  cash or other  property  (other than a transaction  covered by
subsections  2(a),  2(b) or  2(d))  (collectively,  a  "Reorganization"),  then,
following such Reorganization, the Holder shall receive upon exercise hereof the
kind and amount of  securities,  cash or other  property  which the Holder would
have been entitled to receive pursuant to such  Reorganization  if such exercise
had taken  place  immediately  prior to such  Reorganization.  In any such case,
appropriate  adjustment (as determined in good faith by the Board) shall be made
in the application of the provisions set forth herein with respect to the rights
and interests thereafter of the Holder, to the end that the provisions set forth
in this  Section 2  (including  provisions  with respect to changes in and other
adjustments of the Purchase Price) shall thereafter be applicable,  as nearly as
reasonably  may be,  in  relation  to any  securities,  cash or  other  property
thereafter deliverable upon the exercise of this Warrant.

          (f)  Certificate  as to  Adjustments.  Upon  the  occurrence  of  each
adjustment or readjustment of the Purchase Price pursuant to this Section 2, the
Company at its expense shall,  as promptly as reasonably  practicable but in any
event not later than 10 business  days  thereafter,  compute such  adjustment or
readjustment  in  accordance  with the terms  hereof and furnish to the Holder a
certificate  setting forth such adjustment or  readjustment  (including the kind
and amount of securities, cash or other property for which this Warrant shall be
exercisable  and the Purchase Price) and the facts upon which such adjustment or
readjustment is based. The Company shall, as promptly as reasonably  practicable
after the written  request at any time of the Holder (but in any event not later
than 10  business  days  thereafter),  furnish or cause to be  furnished  to the
Holder a  certificate  setting  forth (i) the Purchase  Price then in effect and
(ii) the  number  of shares of Common  Stock and the  amount,  if any,  of other
securities,  cash or property  which then would be received upon the exercise of
this Warrant.

                                      -5-
<PAGE>

          (g) No Adjustments  in Certain  Cases.  No adjustment in the number of
Warrant Shares purchasable pursuant to this Warrant shall be required unless the
adjustment  would require an increase or decrease of at least one percent (1.0%)
in the number of Warrant  Shares  then  purchasable  upon the  exercise  of this
Warrant.  Except as  provided  in this  Section 2, no other  adjustments  in the
number, kind or price of shares constituting Warrant Shares shall be made during
the term, or upon the exercise,  of this Warrant.  Further, no adjustments shall
be made  pursuant  to this  Section  2 hereof  in  connection  with the grant or
exercise of presently  authorized  or  outstanding  options to purchase,  or the
issuance of shares of Common Stock  under,  the  Company's  director or employee
benefit or option plans.

          (h) Treasury  Stock.  For purposes of this Section 2, shares of Common
Stock owned or held at any relevant time by, or for the account of, the Company,
in its treasury or otherwise, shall not be deemed to be outstanding for purposes
of the calculations and adjustments herein described.

     3. Fractional  Shares.  The Company shall not be required upon the exercise
of this  Warrant to issue any  fractional  shares,  but shall pay in cash to the
Holder an amount equal to such fraction  multiplied by the Fair Market Value per
share of Common Stock, as determined pursuant to subsection 1(b) above.

     4. Investment  Representations.  The initial Holder represents and warrants
to the Company as follows:

          (a) Investment. The Holder is acquiring this Warrant, and (if and when
such Holder  exercises this Warrant) will acquire the Warrant  Shares,  for such
Holder's  own  account  for  investment  and not with a view to,  or for sale in
connection with, any  distribution  thereof,  nor with any present  intention of
distributing  or selling the same; and the Holder has no present or contemplated
agreement,  undertaking,  arrangement,  obligation,  indebtedness  or commitment
providing for the disposition thereof.

          (b) Accredited  Investor.  The Holder is an  "accredited  investor" as
defined in Rule 501(a) under the Act.

          (c)  Experience.  The  Holder  has made such  inquiry  concerning  the
Company and its business and personnel as the Holder has deemed appropriate; and
the Holder has sufficient  knowledge and experience in finance and business that
the Holder is capable of evaluating the risks and merits of an investment in the
Company.

     5. Transfers, etc.

          (a)  This  Warrant  and  the  Warrant  Shares  shall  not be  sold  or
transferred  unless either (i) they first shall have been  registered  under the
Act and any applicable  state  securities  laws, or (ii) the Company first shall
have been  furnished  with an  opinion  of legal  counsel,  satisfactory  to the
Company,  to  the  effect  that  such  sale  or  transfer  is  exempt  from  the
registration requirements of the Act and any applicable state securities laws.

          (b) Each certificate  representing  Warrant Shares shall bear a legend
substantially in the following form:

                                      -6-
<PAGE>

                  "The securities  represented by this certificate have not been
                  registered  under the Securities  Act of 1933, as amended,  or
                  any state  securities  laws,  and may not be offered,  sold or
                  otherwise  transferred,  pledged  or  hypothecated  unless and
                  until  such  securities  are  registered  under  such  act and
                  applicable  state  securities  laws or an  opinion  of counsel
                  satisfactory  to the  Company is  obtained  to the effect that
                  such registration is not required."

      The foregoing legend shall be removed from the  certificates  representing
any Warrant Shares,  at the request of the holder thereof,  at such time as they
become eligible for resale pursuant to Rule 144(k) under the Act.

          (c) The  Company  will  maintain  a register  containing  the name and
address of the  Holder of this  Warrant.  The  Holder  may  change the  Holder's
address  as shown on the  warrant  register  by  written  notice to the  Company
requesting such change.

          (d) Subject to the  provisions  of clauses (a) and (b) of this Section
5, this Warrant and all rights hereunder are transferable,  in whole or in part,
upon surrender of this Warrant with a properly executed  assignment (in the form
of Exhibit II hereto) at the  principal  office of the  Company  (or, if another
office or agency has been  designated by the Company for such  purpose,  then at
such other office or agency).  Upon the presentation and surrender of such items
to the  Company,  the Company  shall  execute and deliver to the  transferee  or
transferees  of this  Warrant  a new  Warrant  or  Warrants,  in the name of the
transferee or  transferees  named in the  assignment,  and this Warrant shall at
that time be canceled to the extent transferred.

     6. No Impairment; Adjustment of Par Value.

          (a) The Company  will not, by  amendment of its charter or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities  or any other  voluntary  action,  avoid or seek to avoid the
observance or performance  of any of the terms of this Warrant,  but will at all
times in good  faith  assist in the  carrying  out of all such  terms and in the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the Holder against impairment.

          (b) Before taking any action that would cause an  adjustment  reducing
the  Purchase  Price per share below the then par value of the shares of Warrant
Shares  issuable  upon  exercise  of the  Warrant,  the  Company  will  take any
corporate action that may be necessary in order that the Company may validly and
legally  issue fully paid and  non-assessable  shares of such Warrant  Shares at
such adjusted price.

     7. Record Date, etc. In the event:

          (a) the Company shall take a record of the holders of its Common Stock
(or other stock or securities at the time  deliverable upon the exercise of this
Warrant) for the purpose of  entitling or enabling  them to receive any dividend
or other distribution,  or to receive any right to subscribe for or purchase any
shares of stock of any class or any other  securities,  or to receive  any other
right; or

                                      -7-
<PAGE>

          (b) of any capital reorganization of the Company, any reclassification
of the Common Stock of the Company,  any  consolidation or merger of the Company
with or into another  corporation (other than a consolidation or merger in which
the Company is the surviving  entity and its Common Stock is not converted  into
or exchanged for any other  securities  or property),  or any transfer of all or
substantially all of the assets of the Company; or

          (c)  of the  voluntary  or  involuntary  dissolution,  liquidation  or
winding-up of the Company,

then,  and in each such case,  the Company  will send or cause to be sent to the
Holder a notice  specifying,  as the case may be, (i) the  record  date for such
dividend,  distribution or right, and the amount and character of such dividend,
distribution or right, or (ii) the effective date on which such  reorganization,
reclassification,  consolidation,  merger, transfer, dissolution, liquidation or
winding-up is to take place,  and the time,  if any is to be fixed,  as of which
the holders of record of Common Stock (or such other stock or  securities at the
time  deliverable  upon the  exercise  of this  Warrant)  shall be  entitled  to
exchange  their shares of Common Stock (or such other stock or  securities)  for
securities   or   other   property   deliverable   upon   such   reorganization,
reclassification,  consolidation,  merger, transfer, dissolution, liquidation or
winding-up.  Such notice shall be sent at least 10 days prior to the record date
or effective date for the event specified in such notice.

     8.  Acknowledgment  and Reservation of Stock.  Commencing the Vesting Date,
the Company will at all times  reserve and keep  available,  solely for issuance
and delivery  upon the exercise of this Warrant,  such number of Warrant  Shares
and other  securities,  cash  and/or  property,  as from  time to time  shall be
issuable  upon the exercise of this  Warrant.  The Holder  expressly  agrees and
acknowledges  that the  Company  currently  does not  have  for  reservation  or
issuance upon exercise of this Warrant a sufficient  number of authorized shares
of its Common Stock.

     9. Exchange or Replacement of Warrants.

          (a)  Upon the  surrender  by the  Holder,  properly  endorsed,  to the
Company at the principal office of the Company, the Company will, subject to the
provisions  of Section 5 hereof,  issue and  deliver to or upon the order of the
Holder,  at the Company's  expense,  a new Warrant or Warrants of like tenor, in
the name of the  Holder or as the  Holder  (upon  payment  by the  Holder of any
applicable  transfer taxes) may direct,  calling in the aggregate on the face or
faces  thereof  for the number of shares of Common  Stock (or other  securities,
cash and/or property) then issuable upon exercise of this Warrant.

          (b) Upon receipt of evidence reasonably satisfactory to the Company of
the loss,  theft,  destruction or mutilation of this Warrant and (in the case of
loss, theft or destruction) upon delivery of an indemnity agreement (with surety
if reasonably required) in an amount reasonably  satisfactory to the Company, or
(in the case of mutilation) upon surrender and cancellation of this Warrant, the
Company will issue, in lieu thereof, a new Warrant of like tenor.

                                      -8-
<PAGE>

     10. Notices.  All notices and other  communications from the Company to the
Holder in connection  herewith shall be mailed by certified or registered  mail,
postage prepaid,  or sent via a reputable  nationwide  overnight courier service
guaranteeing  next business day delivery,  to the address last  furnished to the
Company in writing by the Holder. All notices and other  communications from the
Holder to the Company in  connection  herewith  shall be mailed by  certified or
registered mail, postage prepaid, or sent via a reputable  nationwide  overnight
courier service  guaranteeing next business day delivery,  to the Company at its
principal  office set forth above.  If the Company should at any time change the
location of its  principal  office to a place other than as set forth below,  it
shall give prompt  written notice to the Holder and thereafter all references in
this  Warrant to the location of its  principal  office at the  particular  time
shall be as so  specified in such  notice.  All such notices and  communications
shall be deemed  delivered (i) three business days after being sent by certified
or registered  mail,  return receipt  requested,  postage  prepaid,  or (ii) one
business  day after  being sent via a  reputable  nationwide  overnight  courier
service guaranteeing next business day delivery.

     11. No Rights as  Stockholder;  No Liability.  No provision of this Warrant
shall be construed as conferring  upon the Holder hereof the right to vote or to
consent or to receive dividends or to receive notice as a stockholder in respect
of meetings of stockholders  for the election of directors of the Company or any
other matter  whatsoever  as a  stockholder  of the  Company.  In the absence of
affirmative  action by the Holder hereof to purchase  shares of Common Stock, no
provision  hereof  shall  give  rise to any  liability  of such  Holder  for the
purchase  price or as a stockholder  of the Company,  whether such  liability is
asserted by the Company or by creditors of the Company.

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

     13. Amendment or Waiver.  Any term of this Warrant may be amended or waived
only by an instrument in writing  signed by the party against which  enforcement
of the  change  or waiver is  sought.  No  waivers  of any  term,  condition  or
provision of this Warrant, in any one or more instances,  shall be deemed to be,
or construed as, a further or continuing  waiver of any such term,  condition or
provision.

     14.  Section  Headings.  The section  headings in this  Warrant are for the
convenience of the parties and in no way alter, modify, amend, limit or restrict
the contractual obligations of the parties.

     15.  Severability.  If any provision of this Warrant shall be held invalid,
illegal or unenforceable,  such invalidity, illegality or unenforceability shall
not affect any other  provision of this Warrant and, to this end, the provisions
hereof are severable.

     16. Assignment. This warrant shall be binding upon and inure to the benefit
of the parties  hereto and their  respective  heirs,  personal  representatives,
successors and permitted assigns.

     17.  Governing  Law.  This  Warrant  will be governed by and  construed  in
accordance with the internal laws of the State of Illinois (without reference to
the conflicts of law provisions thereof).

                                      -9-

<PAGE>

     18.  Facsimile  Signatures.  This  Warrant  may be  executed  by  facsimile
signature.

      EXECUTED as of the Issue Date indicated above.

                                    MOLECULAR DIAGNOSTICS, INC.

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

                                    Title:
                                         ---------------------------------------

ATTEST:

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

                                      -10-
<PAGE>

                                                                       EXHIBIT I

                                  PURCHASE FORM

To:                                             Dated:
   ----------------------------                        -------------------------

      The  undersigned,  pursuant to the  provisions  set forth in the  attached
Warrant (No. ___), hereby elects to purchase (check applicable box):

            ____ shares of the Common  Stock of Molecular  Diagnostics,  Inc.
by such Warrant; or

            the  maximum  number of shares of  Common  Stock  covered  by such
Warrant  pursuant to the cashless  exercise  procedure  set forth in  subsection
1(b).

      The undersigned herewith makes payment of the full purchase price for such
shares at the price per share  provided for in such Warrant.  Such payment takes
the form of (check applicable box or boxes):

               $______ in lawful money of the United States; and/or

               the  cancellation  of such portion of the attached  Warrant as is
               exercisable  for a total of _____  Warrant  Shares  (using a Fair
               Market   Value  of  $_____  per  share  for   purposes   of  this
               calculation) ; and/or

               the   cancellation  of  such  number  of  Warrant  Shares  as  is
               necessary, in accordance with the formula set forth in subsection
               1(b), to exercise this Warrant with respect to the maximum number
               of Warrant Shares  purchasable  pursuant to the cashless exercise
               procedure set forth in subsection 1(b).

                                    Signature:
                                                --------------------------------
                                    Address:
                                                --------------------------------

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

                                      -11-

<PAGE>

                                                                      EXHIBIT II

                                 ASSIGNMENT FORM

      FOR VALUE RECEIVED, ________________________________________ hereby sells,
assigns and  transfers all of the rights of the  undersigned  under the attached
Warrant  (No.  ____) with  respect  to the  number of shares of Common  Stock of
Molecular Diagnostics, Inc. covered thereby set forth below, unto:

Name of Assignee            Address                    No. of Shares

Dated:                                  Signature:
     ----------------------------                -------------------------------

Signature Guaranteed:

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

The signature should be guaranteed by an eligible guarantor  institution (banks,
stockbrokers, savings and loan associations and credit unions with membership in
an approved  signature  guarantee  medallion  program)  pursuant to Rule 17Ad-15
under the Securities Exchange Act of 1934, as amended.

                                      -12-Exhibit 4.7

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

                            STOCK PURCHASE AGREEMENT

                                     BETWEEN

                           MOLECULAR DIAGNOSTICS, INC.
                                       AND

                             SEASIDE INVESTMENTS PLC

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

                                 OCTOBER 5, 2004

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

--------------------------------------------------------------------------------
Marked to show changes from7/14/04 draft

<PAGE>

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

                                       ii

<PAGE>

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

                                      iii
<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).

                                        1
<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).

                                       2
<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).

                                       3
<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

                                       4
<PAGE>

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.

                                       5
<PAGE>

                                  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,

                                       6
<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

                                       7
<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

                                       8
<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

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