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                                                                    EXHIBIT 4.25

     THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SHARES ISSUABLE
     UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
     OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES
     LAWS AND, UNLESS SO REGISTERED, MAY NOT BE OFFERED OR SOLD EXCEPT
     PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
     REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ANY APPLICABLE
     STATE SECURITIES LAWS.

                         THE TRANSFER OF THIS WARRANT IS
                         RESTRICTED AS DESCRIBED HEREIN.

                             AMPERSAND MEDICAL CORP.

               Warrant for the Purchase of Shares of Common Stock,
                            Par value $.001 per share

No. 1                                                             150,000 Shares

     THIS CERTIFIES that, for value received, TUCKER ANTHONY INCORPORATED (the
"HOLDER"), is entitled to subscribe for and purchase from Ampersand Medical
Corp., a Delaware corporation (the "COMPANY'), upon the terms and conditions set
forth herein, at any time or from time to time before 5:00 P.M., New York time,
on July 10, 2006 (the "EXERCISE PERIOD"), 150,000 shares of the Company's Common
Stock, par value $.001 per share ("COMMON STOCK"), at a price of $1.20 per share
(the "EXERCISE PRICE") (collectively, including any warrants issued upon the
exercise or transfer of any such warrants in whole or in part, the "WARRANTS").
All of the 150,000 shares subject to the Warrant shall vest on the date hereof.
As used herein, the term "this Warrant" shall mean and include this Warrant and
any Warrant or Warrants hereafter issued as a consequence of the exercise or
transfer of this Warrant in whole or in part. This Warrant may not be sold,
transferred, assigned or hypothecated until July 10, 2006, except that it may be
transferred, in whole or in part, to (i) one or more directors, officers,
members or employees of the Holder (or the directors, officers, members or
employees of any such member); (ii) any other firm which participated in the
transactions contemplated by the engagement letter (the "TRANSACTION") (or the
directors, officers, members or employees of any such firm); (iii) a successor
to the Holder, or the officers, members or employees of such successor; (iv) a
purchaser of substantially all of the assets of the Holder; or (v) by operation
of law; and the term the "Holder" as used herein shall include any transferee to
whom this Warrant has been transferred in accordance with the above.

     The number of shares of Common Stock issuable upon exercise of the Warrants
(the "WARRANT SHARES") and the Exercise Price may be adjusted from time to time
as hereinafter set forth.

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     1. Exercise. This Warrant may be exercised during the Exercise Period, as
to the whole or any lesser number of whole Warrant Shares, by the surrender of
this Warrant (with the election form at the end hereof duly executed) to the
Company at its office at 414 North Orleans, Suite 510, Chicago, IL 60610 or at
such other place as is designated in writing by the Company, together with a
certified or bank cashier's check payable to the order of the Company in an
amount equal to the Exercise Price multiplied by the number of Warrant Shares
for which this Warrant is being exercised (the "STOCK PURCHASE PRICE").

     2. Conversion. (a) In lieu of the payment of the Stock Purchase Price, the
Holder shall have the right (but not the obligation), to require the Company to
convert this Warrant, in whole or in part, into shares of Common Stock (the
"CONVERSION RIGHT") as provided for in this Section 2. Upon exercise of the
Conversion Right, the Company shall deliver to the Holder (without payment by
the Holder of any of the Stock Purchase Price) that number of shares of Common
Stock (the "CONVERSION SHARES") equal to the quotient obtained by dividing (x)
the value of this Warrant (or portion thereof as to which the Conversion Right
is being exercised if the Conversion Right is being exercised in part) at the
time the Conversion Right is exercised (determined by subtracting the aggregate
Stock Purchase Price of the shares of Common Stock as to which the Conversion
Right is being exercised in effect immediately prior to the exercise of the
Conversion Right from the aggregate Current Market Price (as defined in Section
6(c) hereof), as of the date of exercise of the Conversion Right, of the shares
of Common Stock as to which the Conversion Right is being exercised) by (y) the
Current Market Price of one share of Common Stock, as of the date of exercise of
the Conversion Right.

        (b) The Conversion Rights provided under this Section 2 may be
exercised, in whole or in part, at any time and from time to time, while any
Warrants remain outstanding. In order to exercise the Conversion Right, the
Holder shall surrender to the Company, at its offices, this Warrant with the
Cashless Exercise Form at the end hereof duly executed. The presentation and
surrender shall be deemed a waiver of the Holder's obligation to pay all or any
portion of the aggregate purchase price payable for the shares of Common Stock
as to which such Conversion Right is being exercised. This Warrant (or so much
thereof as shall have been surrendered for conversion) shall be deemed to have
been converted immediately prior to the close of business on the day of
surrender of such Warrant for conversion in accordance with the foregoing
provisions.

     3. Holder of Record. Upon each exercise of the Holder's rights to purchase
Warrant Shares or Conversion Shares, the Holder shall be deemed to be the holder
of record of the Warrant Shares or Conversion Shares issuable upon such exercise
or conversion, notwithstanding that the transfer books of the Company shall then
be closed or certificates representing such Warrant Shares or Conversion Shares
shall not then have been actually delivered to the Holder. As soon as
practicable after each such exercise or conversion of this Warrant, the Company
shall issue and deliver to the Holder a certificate or certificates for the
Warrant Shares or Conversion Shares issuable upon such exercise or conversion,
registered in the name of the Holder or its designee. If this Warrant should be
exercised or converted in part only, the Company shall, upon surrender of this
Warrant for cancellation, execute and deliver a new Warrant evidencing the right
of the Holder to purchase the balance of the Warrant Shares (or portions
thereof) subject to purchase hereunder.

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     4. Warrant Register. Any Warrants issued upon the transfer or exercise or
conversion in part of this Warrant shall be numbered and shall be registered in
a Warrant Register as they are issued. The Company shall be entitled to treat
the registered holder of any Warrant on the Warrant Register as the owner in
fact thereof for all purposes and shall not be bound to recognize any equitable
or other claim to or interest in such Warrant on the part of any other person,
and shall not be liable for any registration or transfer of Warrants which are
registered or to be registered in the name of a fiduciary or the nominee of a
fiduciary unless made with the actual knowledge that a fiduciary or nominee is
committing a breach of trust in requesting such registration or transfer, or
with the knowledge of such facts that its participation therein amounts to bad
faith. This Warrant shall be transferable only on the books of the Company upon
delivery thereof duly endorsed by the Holder or by his duly authorized attorney
or representative, or accompanied by proper evidence of succession, assignment,
or authority to transfer. In all cases of transfer by an attorney, executor,
administrator, guardian, or other legal representative, duly authenticated
evidence of his or its authority shall be produced. Upon any registration of
transfer, the Company shall deliver a new Warrant or Warrants to the person
entitled thereto. This Warrant may be exchanged, at the option of the Holder
thereof, for another Warrant, or other Warrants of different denominations, of
like tenor and representing in the aggregate the right to purchase a like number
of Warrant Shares (or portions thereof), upon surrender to the Company or its
duly authorized agent. Notwithstanding the foregoing, the Company shall have no
obligation to cause Warrants to be transferred on its books to any person if, in
the opinion of counsel to the Company, such transfer does not comply with the
provisions of the Securities Act of 1933, as amended (the "ACT"), and the rules
and regulations thereunder.

     5. Valid Issuance. The Company shall at all times reserve and keep
available out of its authorized and unissued Common Stock, solely for the
purpose of providing for the exercise of the rights to purchase all Warrant
Shares and/or Conversion Shares granted pursuant to the Warrants, such number of
shares of Common Stock as shall, from time to time, be sufficient therefor. The
Company covenants that all shares of Common Stock issuable upon exercise of this
Warrant, upon receipt by the Company of the full Exercise Price therefor, and
all shares of Common Stock issuable upon conversion of this Warrant, shall be
validly issued, fully paid and nonassessable, without any personal liability
attaching to the ownership thereof, and will not be issued in violation of any
preemptive rights of stockholders, optionholders, warrantholders and any other
persons and the Holders will receive good title to the securities purchased by
them, respectively, free and clear of all liens, security interests, pledges,
charges, encumbrances, stockholders' agreements and voting trusts which might be
created by acts or omissions to act of the Company.

     6. Dilutive Events. (a) In case the Company shall at any time after the
date the Warrants were first issued (i) declare a dividend on the outstanding
Common Stock payable in shares of its capital stock, (ii) subdivide the
outstanding Common Stock into a greater number of shares, (iii) combine the
outstanding Common Stock into a smaller number of shares, or (iv) issue any
shares of its capital stock by reclassification of the Common Stock (including
any such reclassification in connection with a consolidation or merger in which
the Company is the continuing corporation), then, in each case, the Exercise
Price, and the number and kind of securities issuable upon exercise or
conversion of this Warrant, in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination or
reclassification, shall be altered, effective as of the close of business on
such record date, to a

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price (calculated to the nearest .001 of a cent) determined by multiplying such
Exercise Price by a fraction:

            (1) the numerator of which shall be the Current Market Price in
effect on such record date or, if the Common Stock trades on an ex-dividend
basis, on the date prior to the commencement of ex-dividend trading, less the
amount of such dividend or distribution (as determined in good faith by the
Board of Directors of the Company) applicable to one Common Share, and

            (2) the denominator of which shall be such Current Market Price,
provided that, in the event that the amount of such dividend as so determined is
equal to or greater than ten percent (10%) of such Current Market Price or in
the event that such fraction is less than 9/10, in lieu of the foregoing
adjustment, adequate provision shall be made so that the Holder of this Warrant
shall receive a pro rata share of such dividend based upon the maximum number of
Common Stock at a time issuable to such Holder (determined without regard to
whether the Warrant is exercisable at such time).

        (b) Treatment of Share Dividends, Share Splits, etc. In case the
Company at any time or from time to time after the date hereof shall declare or
pay any dividend on the Common Stock payable in Common Stock, or shall effect a
subdivision of the outstanding Common Stock into a greater number of Common
Stock (by reclassification or otherwise than by payment of a dividend in Common
Stock), then, and in each such case, Additional Common Stock shall be deemed to
have been issued (a) in the case of any such dividend, immediately after the
close of business on the record date for the determination of holders of any
class of securities entitled to receive such dividend, or (b) in the case of any
such clause, at the close of business on the date immediately prior to the day
upon which such corporate action becomes effective.

        (c) For purposes of this Agreement, "CURRENT MARKET PRICE" shall mean
the Market Price on the relevant date, as long as the national securities
exchanges were open for trading on such date, provided, however, that if the
national securities exchanges were not open for trading on such date, it shall
mean the Market Price on the most recent date for which the national securities
exchanges were open for trading, and further provided, that if no Common Stock
is then listed or admitted to trading on any national securities exchange or
quoted in the over-the-counter market, the Current Market Price shall be the
Market Price on such date. The "MARKET PRICE" shall mean the amount per share of
Common Stock equal to (a) the last sale price of such shares of Common Stock on
such date or, if no such sale takes place on such date, the average of the
closing bid and asked prices thereof on such date, in each case as officially
reported on the principal national securities exchanges on which such shares of
Common Stock are then listed or admitted to trading or (b) if such shares of
Common Stock are not then listed or admitted to trading on any national
securities exchange but are designated as a national market system security by
the NASD, the last trading price of the shares of Common Stock on such date, or
(c) if there shall have been no trading on such date or if the shares of Common
Stock are not so designated, the average of the closing bid and asked prices of
the shares of Common Stock on such date as shown by the NASD automated quotation
system, or (d) if such shares of Common Stock are not then listed or admitted to
trading on any national exchange or quoted in the over-the-counter market, the
higher of (x) the book value thereof as

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determined by any firm of independent public accountants of recognized standing
selected by the Board of Directors of the Company as of the last day of any
month ending within sixty (60) days preceding the date as of which the
determination is to be made or (y) the fair value thereof determined in good
faith by the Board of Directors of the Company as of a date which is within
twenty (20) days of the date as of which the determination is to be made.

        (d) Computation of Consideration. For the purposes of this Section 6:

            (1) the consideration for the issue or sale of any Additional
Common Stock shall, irrespective of the accounting treatment of such
consideration,

                (i)   insofar as it consists of cash, be computed at the net
amount of cash received by the Company, without deducting any expenses paid or
incurred by the Company or any commissions or compensations paid or concessions
or discounts allowed to underwriters, dealers or other performing similar
services in connection with such issue or sale,

                (ii)  insofar as it consists of property (including securities)
other than cash, be computed at the fair value thereof at the time of such issue
or sale, as determined in good faith by the Board of Directors of the Company,
and

                (iii) in case Additional Common Stock are issued or sold
together with other shares or securities or other assets of the Company for a
consideration which covers both, be the portion of such consideration so
received, computed as provided in clauses (i) and (ii) above, allocable to such
Additional Common Stock, all as determined in good faith by the Board of
Directors of the Company.

            (2) Additional Common Stock deemed to have been issued pursuant
to Section 7(c) relating to share dividends, share splits, etc., shall be deemed
to have been issued for no consideration.

        (e) Adjustments for Combinations, etc. In case the outstanding Common
Stock shall be combined or consolidated, by reclassification or otherwise, into
a lesser number of Common Stock, the Exercise Price in effect immediately prior
to such combination or consolidation shall, concurrently with the effectiveness
of such combination or consolidation, be proportionately increased.

        (f) Dilution in Case of Other Securities. In case any Other Securities
shall be issued or sold or shall become subject to issue or sale upon the
conversion or exchange of any shares (or Other Securities) of the Company (or
any issuer of Other Securities or any other person referred to in Section 7(a))
or to subscription, purchase or other acquisition pursuant to any Options issued
or granted by the Company (or any such other issuer or person) for a
consideration such as to dilute, on a basis consistent with the standards
established in the other provisions of this Section 6, the purchase rights
granted by this Warrant, then, and in each such case, the computations,
adjustments and readjustments provided for in this Section 6 with respect to the
Exercise Price shall be made as nearly as possible in the manner so provided and
applied to determine the amount of Other Securities from time to time receivable
upon the exercise of the Warrants, so as to protect the Holders of the Warrants
against the effect of such dilution. Notwithstanding the foregoing, the
provisions of this Section 6 shall not apply with respect to the

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issuance or sale of Common Stock, or the grant of options exercisable at a price
that is equal to or exceeds the fair market value of the Company's Common Stock
on the date of issuance, issued or issuable after the date hereof to directors,
officers, employees and consultants of the Company or any subsidiary pursuant to
any qualified or non-qualified stock option plan or agreement, stock purchase
plan or agreement, stock restriction agreement, employee stock ownership plan
(ESOP), consulting agreement, or such other options, issuances, arrangements or
plans intended principally as a means of providing compensation for employment
or services and approved by the Board of Directors.

        (g) No adjustment in the Exercise Price shall be required if such
adjustment is less than $.05; provided, however, that any adjustments which by
reason of this Section 6(d) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. All calculations under this
Section 6 shall be made to the nearest cent or to the nearest one-thousandth of
a share, as the case may be.

        (h) Upon each adjustment of the Exercise Price as a result of the
calculations made in Section 6(a) hereof, this Warrant shall thereafter evidence
the right to purchase, at the adjusted Exercise Price, that number of shares
(calculated to the nearest thousandth) obtained by dividing (i) the product
obtained by multiplying the number of shares purchasable upon exercise of this
Warrant prior to adjustment of the number of shares by the Exercise Price in
effect prior to adjustment of the Exercise Price, by (ii) the Exercise Price in
effect after such adjustment of the Exercise Price.

        (i) Whenever there shall be an adjustment as provided in this Section
6, the Company shall promptly cause written notice thereof to be sent by
registered mail, postage prepaid, to the Holder, at its address as it shall
appear in the Warrant Register, which notice shall be accompanied by an
officer's certificate setting forth the number of Warrant Shares purchasable
upon the exercise of this Warrant and the Exercise Price after such adjustment
and setting forth a brief statement of the facts requiring such adjustment and
the computation thereof, which officer's certificate shall be conclusive
evidence of the correctness of any such adjustment absent manifest error.

        (j) The Company shall not be required to issue fractions of shares of
Common Stock or other capital stock of the Company upon the exercise or
conversion of this Warrant. If any fraction of a share would be issuable on the
exercise or conversion of this Warrant (or specified portions thereof) but for
the preceding sentence, the Company shall purchase such fraction for an amount
in cash equal to the same fraction of the Current Market Price of such share of
Common Stock on the date of exercise or conversion of this Warrant.

     7. Assumption of Obligations: (a) In case of any consolidation with or
merger of the Company with or into another corporation (other than a merger or
consolidation in which the Company is the surviving or continuing corporation),
or in case of any sale, lease or conveyance to another corporation of the
property and assets of any nature of the Company as an entirety or substantially
as an entirety, such successor, leasing or purchasing corporation, as the case
may be, shall (i) execute with the Holder an agreement providing that the Holder
shall have the right thereafter to receive upon exercise or conversion of this
Warrant solely the kind and amount of shares of stock and other securities,
property, cash, or any combination thereof

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receivable upon such consolidation, merger, sale, lease, or conveyance by a
holder of the number of shares of Common Stock for which this Warrant would have
been exercisable or into which this Warrant could have been converted
immediately prior to such consolidation, merger, sale, lease or conveyance, and
(ii) make effective provision in its certificate of incorporation or otherwise,
if necessary, to effect such agreement. Such agreement shall provide for
adjustments which shall be as nearly equivalent as practicable to the
adjustments in Section 6 hereof.

        (b) In case of any reclassification or change of the shares of Common
Stock issuable upon exercise or conversion of this Warrant (other than a change
in par value or from a specified par value to no par value, or as a result of a
subdivision or combination, but including any change in the shares into two or
more classes or series of shares), or in case of any consolidation or merger of
another corporation into the Company in which the Company is the continuing
corporation and in which there is a reclassification or change (including a
change to the right to receive cash or other property) of the shares of Common
Stock (other than a change in par value, or from a specified par value to no par
value, or as a result of a subdivision or combination, but including any change
in the shares into two or more classes or series of shares), the Holder shall
have the right thereafter to receive upon exercise or conversion of this Warrant
solely the kind and amount of shares of stock and other securities, property,
cash, or any combination thereof receivable upon such reclassification, change,
consolidation, or merger by a holder of the number of shares of Common Stock for
which this Warrant would have been exercisable or into which this Warrant could
have been converted immediately prior to such reclassification, change,
consolidation or merger. Thereafter, appropriate provision shall be made for
adjustments which shall be as nearly equivalent as practicable to the
adjustments in Section 6.

        (c) The above provisions of this Section 7 shall similarly apply to
successive reclassifications and changes of shares of Common Stock and to
successive consolidations, mergers, sales, leases or conveyances.

     8. Notice of Adjustments. In case at any time the Company shall propose

        (i)     to pay any dividend or make any distribution on shares
of Common Stock in shares of Common Stock or make any other distribution (other
than regularly scheduled cash dividends which are not in a greater amount per
share than the most recent such dividend) to all holders of Common Stock; or

        (ii)    to issue any rights, warrants or other securities to all
holders of Common Stock entitling them to purchase any additional shares of
Common Stock or any other rights, warrants or other securities; or

        (iii)   to effect any reclassification or change of outstanding
shares of Common Stock, or any consolidation, merger, sale, lease or conveyance
of property, described in Section 7; or

        (iv)    to effect any liquidation, dissolution or winding-up of the
Company; or

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        (v)     to take any other action which would cause an adjustment to
the Exercise Price;

then, and in any one or more of such cases, the Company shall give written
notice thereof, by registered mail, postage prepaid, to each Holder at the
address for such Holder as it shall appear in the Warrant Register, mailed at
least 10 days prior to (i) the date as of which the holders of record of shares
of Common Stock to be entitled to receive any such dividend, distribution,
rights, warrants, other securities are to be determined, (ii) the date on which
any such reclassification, change of outstanding shares of Common Stock,
consolidation, merger, sale, lease, conveyance of property, liquidation,
dissolution or winding-up is expected to become effective, and the date as of
which it is expected that holders of record of shares of Common Stock shall be
entitled to exchange their shares for securities or other property, if any,
deliverable upon such reclassification, change of outstanding shares,
consolidation, merger, sale, lease, conveyance of property, liquidation,
dissolution or winding-up, or (iii) the date of such action which would require
an adjustment to the Exercise Price.

     9. Taxes. The issuance of any shares or other securities upon the exercise
or conversion of this Warrant, and the delivery of certificates or other
instruments representing such shares or other securities, shall be made without
charge to the Holder for any tax or other charge in respect of such issuance.
The Company shall not, however, be required to pay any tax which may be payable
in respect of any transfer involved in the issue and delivery of any certificate
in a name other than that of the Holder and the Company shall not be required to
issue or deliver any such certificate unless and until the person or persons
requesting the issue thereof shall have paid to the Company the amount of such
tax or shall have established to the satisfaction of the Company that such tax
has been paid.

     10. Registration Rights. (a) If, at any time during the five year period
commencing on July 10, 2001 the Company shall file a registration statement
(other than on Form S-4, Form S-8 or any successor form) with the Securities and
Exchange Commission (the "COMMISSION") while any Eligible Securities (as
hereinafter defined) are outstanding, the Company shall give all of the then
holders of any Eligible Securities (the "ELIGIBLE HOLDERS") at least 15 days
prior written notice of the filing of such registration statement. If requested
by any Eligible Holder in writing within 20 days after receipt of any such
notice, the Company shall, at the Company's sole expense (other than the fees
and disbursements of counsel for the Eligible Holders and the underwriting
discounts, if any, payable in respect of the Eligible Securities sold by any
Eligible Holder), register or qualify all or, at each Eligible Holder's option,
any portion of the Eligible Securities of any Eligible Holder who shall have
made such request, concurrently with the registration of such other securities,
all to the extent required to permit a public offering and sale of the Eligible
Securities through the facilities of all appropriate securities exchanges and
the over-the-counter market, and will use its best efforts through its officers,
directors, auditors and counsel to cause such registration statement to become
effective as promptly as practicable. Notwithstanding the foregoing, if the
managing underwriter of any such offering shall advise the Company in writing
that, in its opinion, the distribution of all or a portion of the Eligible
Securities requested by the Eligible Holders to be included in the registration
concurrently with the securities being registered by the Company would
materially adversely affect the distribution of such securities by the Company
for its own account, then any Eligible Holder who shall have requested
registration of his or its Eligible Securities shall delay the

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offering and sale of such Eligible Securities (or the portions thereof so
designated by such managing underwriter) for such period, not to exceed 90 days
from the effectiveness of any registration statement (the "DELAY PERIOD"), as
the managing underwriter shall request, provided that no such delay shall be
required as to any Eligible Securities if any securities of the Company are
included in such registration statement and eligible for sale during the Delay
Period for the account of any person other than the Company and any Eligible
Holder unless the securities included in such registration statement and
eligible for sale during the Delay Period for such other person shall have been
reduced pro rata to the reduction of the Eligible Securities which were
requested to be included and eligible for sale during the Delay Period in such
registration. As used herein, "ELIGIBLE SECURITIES" shall mean the Warrants and
the Warrant Shares and the Conversion Shares which, in each case, have not been
previously sold pursuant to a registration statement or sold or eligible for
sale pursuant to Rule 144 promulgated under the Act.

        (b) If, during the six-month period commencing on July 10, 2001, the
Company has not filed a registration statement (other than on Form S-4, Form S-8
or any successor form) with the Commission while any Eligible Securities are
outstanding, and the Eligible Holders have not been given the opportunity to
exercise their registration rights pursuant to Section 10(a) above, the Eligible
Holders who in the aggregate own (or upon exercise of all Warrants then
outstanding would own) a majority of the total number of shares of Common Stock
then included (or upon such exercise would be included) in the Eligible
Securities (the "MAJORITY HOLDERS") will have the right to, at any time during
the four year period commencing after the expiration of the six-month period
mentioned above, give a written request to the Company to register the sale of
all or part of such Eligible Securities. The Company shall, as promptly as
practicable, prepare and file with the Commission a registration statement
sufficient to permit the public offering and sale of the Eligible Securities
through the facilities of all appropriate securities exchanges and the over-the
counter market, and will use such registration statement to become effective as
promptly as practicable; provided, however, that the Company shall only be
obligated to file one such registration statement for which all expenses
incurred in connection with such registration (other than the fees and
disbursements of counsel for the Eligible Holders and underwriting discounts, if
any, payable in respect of the Eligible Securities sold by the Eligible Holders)
shall be borne by the Company and one additional such registration statement for
which all such expenses shall be paid by the Eligible Holders. Within three
business days after receiving any request contemplated by this Section 10(b),
the Company shall give written notice to all the other Eligible Holders,
advising each of them that the Company is proceeding with such registration and
offering to include therein all or any portion of any such other Eligible
Securities, provided that the Company receives a written request to do so from
such Eligible Holder within 20 days after receipt by him or it of the Company's
notice.

        (c) In the event of a registration pursuant to the provisions of this
Section 10, the Company shall use its best efforts to cause the Eligible
Securities so registered to be registered or qualified for sale under the
securities or blue sky laws of such jurisdictions as the Holder or Holders may
reasonably request; provided, however, that the Company shall not for any such
purpose be required to (A) qualify generally to do business as a foreign
corporation in any jurisdiction wherein it is not otherwise required to be so
qualified, (B) subject itself to taxation in any jurisdiction wherein it is not
so subject or (C) consent to general service of process in any such jurisdiction
or otherwise take action that would subject it to the general jurisdiction of
the courts of any jurisdiction to which it is not so subject.

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        (d) The Company shall keep effective any registration or qualification
contemplated by this Section 10 and shall from time to time amend or supplement
each applicable registration statement, preliminary prospectus, final
prospectus, application, document and communication for such period of time as
shall be required to permit the Eligible Holders to complete the offer and sale
of the Eligible Securities covered thereby. The Company shall in no event be
required to keep any such registration or qualification in effect for a period
in excess of nine months from the date on which the Eligible Holders are first
free to sell such Eligible Securities.

        (e) In the event of a registration pursuant to the provisions of this
Section 10, the Company shall furnish to each Eligible Holder such number of
copies of the registration statement and of each amendment and supplement
thereto (in each case, including all exhibits), such reasonable number of copies
of each prospectus contained in such registration statement and each supplement
or amendment thereto (including each preliminary prospectus), all of which shall
conform to the requirements of the Act and the rules and regulations thereunder,
and such other documents, as any Eligible Holder may reasonable request to
facilitate the disposition of the Eligible Securities included in such
registration.

        (f) In the event of a registration pursuant to the provisions of this
Section 10, the Company shall furnish each Eligible Holder of any Eligible
Securities so registered with an opinion of its counsel (reasonably acceptable
to the Eligible Holders) to the effect that (i) the registration statement has
become effective under the Act and no order suspending the effectiveness of the
registration statement, preventing or suspending the use of the registration
statement, any preliminary prospectus, any final prospectus or any amendment or
supplement thereto has been issued, nor has the Commission or any securities or
blue sky authority of any jurisdiction instituted or threatened to institute any
proceedings with respect to such an order, (ii) the registration statement and
each prospectus forming a part thereof (including each preliminary prospectus),
and any amendment or supplement, thereto, complies as to form with the Act and
the rules and regulations thereunder, and (iii) such counsel has no knowledge of
any material misstatement or omission in such registration statement or any
prospectus, as amended or supplemented. Such opinion shall also state the
jurisdictions in which the Eligible Securities have been registered or qualified
for sale pursuant to the provisions of Section 10(c).

        (g) In the event of a registration pursuant to the provision of this
Section 10, the Company shall enter into a cross-indemnity agreement and a
contribution agreement, each in customary form, with each underwriter, if any,
and, if requested, enter into an underwriting agreement containing conventional
representations, warranties, allocation of expenses, and customary closing
conditions, including, but not limited to, opinions of counsel and accountants'
cold comfort letters, with any underwriter who acquires any Eligible Securities.

        (h) The Company covenants and agrees that, until all the Eligible
Securities have been sold under a registration statement or pursuant to Rule 144
under the Act, it shall keep current in filing all reports, statements and other
materials required to be filed with the Commission to permit holders of the
Eligible Securities to sell such securities under Rule 144.

                                      -10-
<PAGE>

        (i) The Company may delay any requested registration hereunder by giving
written notice to Eligible Holders who have elected to include their Eligible
Securities in a registration under this Section 10 if the Company's Board of
Directors determines in good faith that a registration at such time would be
materially detrimental to the Company provided that any such delay shall not
exceed ninety (90) days and the Company cannot provide this notice more than
twice in any twelve-month period.

        (j) Notwithstanding the foregoing, if the managing underwriter of an
offering which includes all or a portion of the Eligible Securities, and such
managing underwriter advises the Company that marketing factors require a
limitation of the number of securities to be underwritten (including Eligible
Securities) then the Company shall so advise all security holders whose
securities are proposed to be registered, and the number of shares that may be
included in the underwriting and registration shall be allocated pro rata to the
participating security holders based on the number of securities initially
proposed to be underwritten.

     11. Indemnification. (a) Subject to the conditions set forth below, the
Company agrees to indemnify and hold harmless each Eligible Holder, its
officers, directors, members, employees, agents and counsel, and each person, if
any, who controls any such person within the meaning of Section 15 of the Act or
Section 20(a) of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), from and against any and all loss, liability, charge, claim, damage and
expense whatsoever (which shall include, for all purposes of this Section 11,
but not be limited to, reasonable attorneys' fees and any and all reasonable
expense whatsoever incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation), as and when incurred,
arising out of, based upon, or in connection with (i) any untrue statement or
alleged untrue statement of a material fact contained (A) in any registration
statement, preliminary prospectus or final prospectus (as from time to time
amended and supplemented), or any amendment or supplement thereto, relating to
the sale of any of the Eligible Securities, or (B) in any application or other
document or communication (in this Section 11 collectively called an
"APPLICATION") executed by or on behalf of the Company or based upon written
information furnished by or on behalf of the Company filed in any jurisdiction
in order to register or qualify any of the Eligible Securities under the
securities or blue sky laws thereof or filed with the Commission or any
securities exchange; or any omission or alleged omission to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, unless such statement or omission was made in reliance upon and
in conformity with written information furnished to the Company with respect to
such Eligible Holder by or on behalf of such person expressly for inclusion in
any registration statement, preliminary prospectus or final prospectus, or any
amendment or supplement thereto, or in any application, as the case may be, or
(ii) any breach of any representation, warranty, covenant or agreement of the
Company contained in this Warrant. The foregoing agreement to indemnify shall be
in addition to any liability the Company may otherwise have, including
liabilities arising under this Warrant.

     If any action is brought against any Eligible Holder or any of its
officers, directors, members, employees, agents or counsel, or any controlling
persons of such person (an "INDEMNIFIED PARTY") in respect of which indemnity
may be sought against the Company pursuant to the foregoing paragraph, such
indemnified party or parties shall promptly notify the

                                      -11-
<PAGE>

Company in writing of the institution of such action (provided that the failure
so to notify shall not relieve the Company from any liability pursuant to this
Section 11(a), but shall only reduce the amount of the indemnification if any to
the extent that the Company is prejudiced by such delay) and the Company shall
promptly assume the defense of such action, including the employment of counsel
(reasonably satisfactory to such indemnified party or parties) and payment of
expenses. Such indemnified party or parties shall have the right to employ its
or their own counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of such indemnified party or parties unless the
employment of such counsel shall have been authorized in writing by the Company
in connection with the defense of such action or the Company shall not have
promptly employed counsel reasonably satisfactory to such indemnified party or
parties to have charge of the defense of such action or such indemnified party
or parties shall have reasonably concluded that there may be a conflict of
interest between the indemnified party or parties and the Company in the conduct
of the defense of such action in any of which events such fees and expenses
shall be borne by the Company and the Company shall not have the right to direct
the defense of such action on behalf of the indemnified party or parties.
Anything in this Section 11 to the contrary notwithstanding, the Company shall
not be liable for any settlement of any such claim or action effected without
its written consent, which shall not be unreasonably withheld. The Company shall
not, without the prior written consent of each indemnified party that is not
released as described in this sentence, settle or compromise any action, or
permit a default or consent to the entry of judgment in or otherwise seek to
terminate any pending or threatened action, in respect of which indemnity may be
sought hereunder (whether or not any indemnified party is a party thereto),
unless such settlement, compromise, consent or termination includes an
unconditional release of each indemnified party from all liability in respect of
such action. The Company agrees promptly to notify the Eligible Holders of the
commencement of any litigation or proceedings against the Company or any of its
officers or directors in connection with the sale of any Eligible Securities or
any preliminary prospectus, prospectus, registration statement, or amendment or
supplement thereto, or any application relating to any sale of any Eligible
Securities.

        (b) The Holder agrees to indemnify and hold harmless the Company, each
director of the Company, each officer of the Company who shall have signed any
registration statement covering Eligible Securities held by the Holder, each
other person, if any, who controls the Company within the meaning of Section 15
of the Act or Section 20(a) of the Exchange Act, and its or their respective
counsel, to the same extent as the foregoing indemnity from the Company to the
Holder in Section 11(a), but only with respect to statements or omissions, if
any, made in any registration statement, preliminary prospectus or final
prospectus (as from time to time amended and supplemented), or any amendment or
supplement thereto, or in any application, in reliance upon and in conformity
with written information furnished to the Company with respect to the Holder by
or on behalf of the Holder expressly for inclusion in any such registration
statement, preliminary prospectus or final prospectus, or any amendment or
supplement thereto, or in any application, as the case may be. If any action
shall be brought against the Company or any other person so indemnified based on
any such registration statement, preliminary prospectus or final prospectus, or
any amendment or supplement thereto, or in any application, and in respect of
which indemnity may be sought against the Holder pursuant to this Section 11(b),
the Holder shall have the rights and duties given to the Company, and the
Company and each other person so indemnified shall have the rights and duties
given to the indemnified parties, by the provisions of Section 11(a).

                                      -12-
<PAGE>

        (c) To provide for just and equitable contribution, if (i) an
indemnified party makes a claim for indemnification pursuant to Section 11(a) or
11(b) (subject to the limitations thereof) but it is found in a final judicial
determination, not subject to further appeal, that such indemnification may not
be enforced in such case, even though this Agreement expressly provides for
indemnification in such case, or (ii) any indemnified or indemnifying party
seeks contribution under the Act, the Exchange Act or otherwise, then the
Company (including for this purpose any contribution made by or on behalf of any
director of the Company, any officer of the Company who signed any such
registration statement, any controlling person of the Company, and its or their
respective counsel), as one entity, and the Eligible Holders of the Eligible
Securities included in such registration in the aggregate (including for this
purpose any contribution by or on behalf of an indemnified party), as a second
entity, shall contribute to the losses, liabilities, claims, damages and
expenses whatsoever to which any of them may be subject, on the basis of
relevant equitable considerations such as the relative fault of the Company and
such Eligible Holders in connection with the facts which resulted in such
losses, liabilities, claims, damages and expenses. The relative fault, in the
case of an untrue statement, alleged untrue statement, omission or alleged
omission, shall be determined by, among other things, whether such statement,
alleged statement, omission or alleged omission relates to information supplied
by the Company or by such Eligible Holders, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement, alleged statement, omission or alleged omission. The Company and the
Holder agree that it would be unjust and inequitable if the respective
obligations of the Company and the Eligible Holders for contribution were
determined by pro rata or per capita allocation of the aggregate losses,
liabilities, claims, damages and expenses (even if the Holder and the other
indemnified parties were treated as one entity for such purpose) or by any other
method of allocation that does not reflect the equitable considerations referred
to in this Section 11(c). In no case shall any Eligible Holder be responsible
for a portion of the contribution obligation imposed on all Eligible Holders in
excess of its pro rata share based on the number of shares of Common Stock owned
by it (or which would be owned by it upon exercise of all Eligible Securities)
and included in such registration as compared to the number of shares of Common
Stock owned by it (or which would be owned by it upon exercise of all Eligible
Securities by all Eligible Holders) and included in such registration. No person
guilty of a fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who is not guilty of
such fraudulent misrepresentation. For purposes of this Section 11(c), each
person, if any, who controls any Eligible Holder within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act and each officer, director,
member, employee, agent and counsel of each such Eligible Holder or control
person shall have the same rights to contribution as such Eligible Holder or
control person and each person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, each
officer of the Company who shall have signed any such registration statement,
each director of the Company, and its or their respective counsel shall have the
same rights to contribution as the Company, subject in each case to the
provisions of this Section 11(c). Anything in this Section 11(c) to the contrary
notwithstanding, no party shall be liable for contribution with respect to the
settlement of any claim or action effected without its written consent. This
Section 11(c) is intended to supersede any right to contribution under the Act,
the Exchange Act or otherwise.

     12. Representations and Warranties. The Company represents and warrants to
Holder as follows:

                                      -13-
<PAGE>

        (a) This Warrant has been duly authorized and executed by the Company
and is a valid and binding obligation of the Company enforceable in accordance
with its terms;

        (b) The shares of Common Stock issuable hereunder have been duly
authorized and reserved for issuance by the Company and, when issued in
accordance with the terms hereof, will be validly issued, fully paid and
nonassessable;

        (c) The execution and delivery of this Warrant are not, and the issuance
of the shares of Common Stock upon exercise of this Warrant in accordance with
the terms hereof will not be, inconsistent with the Company's Certificate of
Incorporation or by-laws, do not and will not contravene any law, governmental
rule or regulation, judgment or order applicable to the Company, and, except for
consents that have already been obtained by the Company, do not and will not
conflict with or contravene any provision of, or constitute a default under, any
indenture, mortgage, contract or other instrument of which the Company is a
party or by which it is bound or require the consent or approval of, the giving
of notice to, the registration with or the taking of any action in respect of or
by, any Federal, state or local governmental authority or agency or other
person.

     13. Legend. Unless registered pursuant to the provisions of Section 10
hereof, the Warrant Shares or Conversion Shares issued upon exercise or
conversion of the Warrants shall be subject to a stop transfer order and the
certificate or certificates evidencing such Warrant Shares shall bear the
following legend:

     "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
   THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
   SECURITIES LAWS AND, UNLESS SO REGISTERED, MAY NOT BE OFFERED OR SOLD EXCEPT
   PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
   REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ANY APPLICABLE STATE
   SECURITIES LAWS."

     14. Reservation and Listing of Securities. The Company shall at all times
reserve and keep available out of its authorized Common Stock, solely for the
purpose of issuance upon the exercise of the Warrants, such number of Common
Stock or other securities, properties or rights as shall be issuable upon the
exercise thereof. The Company covenants and agrees that, upon exercise of the
Warrants and payment of the Exercise Price therefor, all Common Stock and other
securities issuable upon such exercise shall be duly and validly issued, fully
paid, nonassessable and not subject to the preemptive rights of any shareholder.
As long as the Warrants shall be outstanding, the Company shall use its best
efforts to cause all Common Stock issuable upon the exercise of the Warrants to
be listed on all securities exchanges and/or included in the automated quotation
system of the Nasdaq (subject to official notice of issuance) with respect to
which the Common Stock issued to the public in connection herewith may then be
listed and/or quoted.

                                      -14-
<PAGE>

     15. Destroyed or Lost Warrants. Upon receipt of evidence satisfactory to
the Company of the loss, theft, destruction or mutilation of any Warrant (and
upon surrender of any Warrant if mutilated), and upon reimbursement of the
Company's reasonable incidental expenses, the Company shall execute and deliver
to the Holder thereof a new Warrant of like date, tenor and denomination.

     16. Notices to Warrant Holders. In the event of

        (a) any taking by the Company of a record of the holders of any class of
securities for the purpose of determining the holders thereof who are entitled
to receive any dividend or other distribution, or any right to subscribe for,
purchase or otherwise acquire any shares of stock of any class or any other
securities or property, or to receive any other right, or

        (b) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any consolidation or
merger involving the Company and any other person or any transfer of all or
substantially all the assets of the Company to any other person, or

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

the Company will mail to each Holder of a Warrant a notice specifying (i) the
date or expected date on which any such record is to be taken for the purpose of
such dividend, distribution or right, and the amount and character of such
dividend, distribution or right, and (ii) the date or expected date on which any
such reorganization, reclassification, recapitalization, consolidation, merger,
transfer, dissolution, liquidation or winding-up is to take place and time, if
any such time is to be fixed, as of which the holders of record of Common Stock
(or other securities) shall be entitled to exchange their shares of Common Stock
(or other securities) for the securities or other property deliverable upon such
reorganization, reclassification, recapitalization, consolidation, merger,
transfer, dissolution, liquidation or winding-up. Such notice shall be mailed at
least 45 days prior to the date therein specified.

     17. Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly given or
made at the time delivered by hand if personally delivered; five calendar days
after mailing if sent by registered or certified mail; when answered back, if
telexed; when receipt is acknowledged, if telecopied: and the next business day
after timely delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery (except that a notice of change of address shall
not be deemed to have been given until actually received by the addressee):

        (a) If to the registered Holder of the Warrants, to the address of such
Holder as shown on the books of the Company; or

        (b) If to the Company, to the address set forth in Section 1 hereof or
to such other address as the Company may designate by notice to the Holders.

     18. Supplements and Amendments. The Company and the Underwriter may from
time to time supplement or amend this Agreement without the approval of any
Holders of

                                      -15-
<PAGE>

Warrants (other than the Underwriter) in order to cure any ambiguity, to correct
or supplement any provision contained herein which may be defective or
inconsistent with any provisions herein, or to make any other provisions in
regard to matters or questions arising hereunder which the Company and the
Underwriter may deem necessary or desirable and which the Company and the
Underwriter deem shall not adversely affect the interests of the Holders of
Warrants.

     19. No Notice of Meetings. The Holder of any Warrant shall not have, solely
on account of such status, any rights of a stockholder of the Company, either at
law or in equity, or to any notice of meetings of stockholders or of any other
proceedings of the Company, except as provided in this Warrant.

     20. Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and performed within such State, without regard to the principles thereof
respecting conflicts of law.

Dated:
       -------------------------
                                                AMPERSAND MEDICAL CORP.

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

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

Attest:

--------------------------------
Secretary

                                                Acknowledged and Accepted by:

                                                TUCKER ANTHONY INCORPORATED

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

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

                                      -16-
<PAGE>

                               FORM OF ASSIGNMENT

(To be executed by the registered holder if such holder desires to transfer the
attached Warrant.)

     FOR VALUE RECEIVED, _______________________________ hereby sells, assigns
and transfers unto ______________________ a Warrant to purchase ______ shares of
Common Stock, par value $.001 per share, of AMPERSAND MEDICAL CORP. (the
"Company"), together with all right, title and interest therein, and does hereby
irrevocably constitute and appoint ________________ attorney to transfer such
Warrant on the books of the Company, with full power of substitution.

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

Signature
         -----------------------

                                     NOTICE

     The Signature on the foregoing Assignment must correspond to the name as
written upon the fact of this Warrant in every particular, without alteration or
enlargement or any change whatsoever.

                                      -17-
<PAGE>

To:   Ampersand Medical Corp.
      414 North Orleans, Suite 510
      Chicago, IL 60610

                              ELECTION TO EXERCISE

     The undersigned hereby exercises his or its rights to purchase ____ Warrant
Shares covered by the within Warrant and tenders payment herewith in the amount
of $________ in accordance with the terms thereof, and requests that
certificates for such securities be issued in the name of, and delivered to:

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

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

--------------------------------------------------------------------------------
                    (Print Name, Address and Social Security
                          or Tax Identification Number)

and, if such number of Warrant Shares shall not be all the Warrant Shares
covered by the within Warrant, that a new Warrant for the balance of the Warrant
Shares covered by the within Warrant be registered in the name of, and delivered
to, the undersigned at the address stated below.

Dated:                                        Name
      ----------------------------                 -----------------------------
                                                              (Print)

Address:
        ------------------------------------------------------------------------

                                              ----------------------------------
                                                         (Signature)

                                      -18-
<PAGE>

To:   Ampersand Medical Corp.
      414 North Orleans, Suite 510
      Chicago, IL 60610

                             CASHLESS EXERCISE FORM
            (To be executed upon conversion of the attached Warrant)

     The undersigned hereby irrevocably elects to surrender its Warrant for the
number of shares of Common Stock as shall be issuable pursuant to the cashless
exercise provisions set forth in Section 2 of the within Warrant, in respect of
____ shares of Common Stock underlying the within Warrant, and requests that
certificates for such securities be issued in the name of and delivered to:

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

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

--------------------------------------------------------------------------------
                    (Print, Name, Address and Social Security
                          or Tax Identification Number)

and, if such number of shares shall not be all the shares exchangeable or
purchasable under the within Warrant, that a new Warrant for the balance of the
Warrant Shares covered by the within Warrant be registered in the name of, and
delivered to, the undersigned at the address stated below.

Dated:                                        Name
      ----------------------------                 -----------------------------
                                                              (Print)

Address:
        ------------------------------------------------------------------------

                                              ----------------------------------
                                                         (Signature)

                                      -19-<PAGE>
                                                                    EXHIBIT 4.26

THIS WARRANT, AND THE SECURITIES ISSUABLE UPON THE EXERCISE THEREOF, HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
OR BLUE SKY LAWS OF ANY STATE OR OTHER JURISDICTION, AND NEITHER THIS WARRANT
NOR SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED,
DISTRIBUTED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS:
(A) THERE IS AN EFFECTIVE REGISTRATION AND/OR QUALIFICATION UNDER SUCH ACT AND
ALL SUCH APPLICABLE SECURITIES AND/OR BLUE SKY LAWS COVERING SUCH TRANSACTION,
OR (B) THE COMPANY RECEIVES AN OPINION LETTER FROM LEGAL COUNSEL TO THE HOLDER
OF THIS WARRANT OR SUCH SECURITIES (AS THE CASE MAY BE), REASONABLY SATISFACTORY
TO THE COMPANY, TO THE EFFECT THAT SUCH TRANSACTION IS EXEMPT FROM THE
APPLICABLE REGISTRATION AND/OR QUALIFICATION REQUIREMENTS OF SUCH ACT AND
APPLICABLE SECURITIES AND BLUE SKY LAWS.

                                     WARRANT
                            TO PURCHASE COMMON STOCK
                                       OF
                           MOLECULAR DIAGNOSTICS, INC.

Warrant No. VMSI - 1                1,750,000                  November 2, 2001

     MOLECULAR DIAGNOSTICS, INC., a Delaware corporation (the "Company"), for
value received, hereby certifies that VENTANA MEDICAL SYSTEMS, INC. or its
registered assigns, is entitled to purchase from the Company ONE MILLION SEVEN
HUNDRED AND FIFTY THOUSAND (1,750,000) of duly authorized, validly issued, fully
paid and non-assessable shares of Common Stock, par value $0.001 per share, of
the Company ("Common Stock"), at the purchase price of US$1.15 per share (such
per share price, subject to the adjustments, if any provided for in Section 2),
being hereinafter referred to as the ("Exercise Price") at any time or from time
to time prior to 5:00 p.m., New York City time, on the Expiration Date, all
subject to the terms, conditions and adjustments set forth below in this
Warrant.

     Certain terms used and not defined above in this Warrant are defined in
Section 5.

1. EXERCISE OF WARRANT

     1.1. MANNER OF EXERCISE. This Warrant may be exercised by the holder
hereof, in whole or in any part (including as to any fraction of a share),
during normal business hours on any Business Day until the Expiration Date by
surrender of this Warrant, with the form of Subscription Notice at the end
hereof (or a reasonable facsimile thereof) duly executed by such holder, to the
Company, accompanied by: (i) payment of the aggregate Exercise Price for the
Common Stock being purchased. Payment of the Exercise Price shall be made, at
the option of the holder hereof, either: (A) in cash or by certified or official
bank check payable to the order of the Company in the amount of the aggregate
Exercise Price (or portion thereof being paid in this manner), (B) by the
surrender of indebtedness of the Company (principal and/or interest) in an
amount equal to the aggregate Exercise Price (or portion thereof being paid in
this manner), (C) by the surrender of Common Stock, including Common Stock
obtained upon any previous exercise of this Warrant, having a Market Value (as
hereinafter defined) as of the date of exercise equal to the aggregate Exercise
Price (or portion thereof being paid in this manner), (D) by the surrender of
other warrants of the Company, having a Warrant Value (as hereinafter defined)
as of the date of exercise equal to the aggregate Exercise Price (or portion
thereof being paid in this manner), or (E) by any combination of the foregoing.
In lieu of paying the Exercise Price in the foregoing manner, the holder hereof
may, at its option, surrender to the Company all or a specified portion of this
Warrant in exchange for a number of shares of Common Stock determined by
dividing (1) the product of (i) the number of shares issuable upon exercise of
this Warrant or such specified portion (as the case may be) and (ii) the
difference between the Market Value of the Common Stock as of the date of
exercise and the Exercise Price, by (2) such Market Value. For purposes of the
foregoing, "Market Value" of the Common Stock means, as of any date, the
reported closing sale price per share of the Common Stock as of the immediately
preceding Business Day (provided there is no such reported closing sale price on
such Business Day, then the average of the last-reported bid and ask prices on
such Business Day); and "Warrant Value" means, for any warrant as of any date,
the excess (if any) of the exercise price per share thereof over the Market
Value of the Common Stock as of such date.

     1.2. WHEN EXERCISE EFFECTIVE. Each exercise of this Warrant shall be deemed
to have been effected immediately prior to the close of business on the Business
Day on which this Warrant shall have been exercised as provided in Section 1.1,
and immediately prior to the close of business on such Business Day the Person
or Persons in

<PAGE>

                                                                               2

whose name or names any certificate or certificates for Common Stock shall be
issuable upon such exercise as provided in Section 1.3 shall be deemed to have
become the holder or holders of record thereof.

     1.3. DELIVERY OF STOCK CERTIFICATES, ETC. As soon as practicable after the
exercise of this Warrant in whole or in any part as provided in Section 1.1, and
in any event within ten (10) days thereafter, the Company at its expense
(including the payment by it of any applicable issue taxes) will cause to be
issued in the name of and delivered to the holder hereof or, subject to Section
3, such other Person or Persons as such holder (upon payment by such holder of
any applicable transfer taxes) may direct: (i) a certificate or certificates for
the number of shares of Common Stock to which such holder shall be entitled upon
such exercise; (ii) in case such exercise is in part only, a new Warrant or
Warrants of like tenor, calling in the aggregate on the face or faces thereof
for the number of shares of Common Stock equal to (without giving effect to any
adjustment therein from the Original Issue Date) the number of such shares
called for on the face of this Warrant minus the number of shares of Common
Stock (without giving effect to any adjustment therein from the Issue Date) as
to which this Warrant shall have been so exercised.

2. ANTI-DILUTION ADJUSTMENTS.

     (A) Stock Splits, Stock Dividends, Combinations. If at any time after the
Original Issue Date the Company shall:

                    (1) take a record of the holders of its Common Stock for the
          purpose of entitling them to receive a dividend payable in, or other
          distribution of, Additional Shares of Common Stock,

                    (2) subdivide its outstanding shares of Common Stock into a
          larger number of shares of Common Stock, or

                    (3) combine its outstanding shares of Common Stock into a
          smaller number of shares of Common Stock

then: (i) the number of shares of Common Stock issuable upon exercise of the
Warrants shall be adjusted to equal the number of shares of Common Stock which a
holder of the same number of shares of Common Stock issuable upon exercise of
the Warrants immediately prior to the occurrence of such event would own or be
entitled to receive after the occurrence of such event; and (ii) the Exercise
Price shall be adjusted to equal the product of such Exercise Price in effect
immediately prior to such adjustment and a fraction (x) the numerator of which
shall be the number of shares of Common Stock issuable upon exercise of the
Warrants immediately prior to the adjustment made pursuant to the foregoing
clause (i) and (y) the denominator shall be the number of shares of Common Stock
issuable upon exercise of the Warrants immediately after such adjustment.

     (B) Issuance of Additional Shares of Common Stock. If at any time after the
Original Issue Date the Company shall issue or sell any Additional Shares of
Common Stock to any Person or Persons for consideration in an amount per
Additional Share of Common Stock less than the Exercise Price at the date the
Additional Shares of Common Stock are issued, then: (i) the number of shares of
Common Stock issuable upon exercise of the Warrants shall be adjusted to equal
the product of (A) the number of shares of Common Stock issuable upon exercise
of the Warrants immediately prior to the occurrence of such issuance or sale,
and (B) a fraction (x) the numerator of which shall be the number of shares of
Common Stock Outstanding immediately prior the occurrence of such issuance or
sale plus the number of Additional Shares of Common Stock to be issued in such
issuance or sale and (y) the denominator of which shall be the number of shares
of Common Stock Outstanding immediately prior to the occurrence of such issuance
or sale plus the number of shares of Common Stock which the aggregate
consideration to be paid for such Additional Shares of Common Stock would
purchase at the Exercise Price at the date such shares are issued or sold (prior
to adjustment hereunder); and (ii) the Exercise Price shall be adjusted to equal
the product of such Exercise Price in effect immediately prior to such
adjustment and a fraction (x) the numerator of which shall be the number of
shares of Common Stock issuable upon exercise of the Warrants immediately prior
to the adjustment made pursuant to the foregoing clause (i) and (y) the
denominator shall be the number of shares of Common Stock issuable upon exercise
of the Warrants immediately after such adjustment.

<PAGE>
                                                                               3

     (C) Issuance of Convertible Securities. If at any time after the Original
Issue Date the Company shall take a record of the holders of its Common Stock
for the purpose of entitling them to receive a distribution of, or shall
otherwise issue or sell, any Convertible Securities, whether or not the rights
to convert, exchange or exercise thereunder are immediately exercisable, then
the number of shares of Common Stock issuable upon exercise of the Warrants
shall be adjusted as provided in Section 2(B) on the basis that the maximum
number of Additional Shares of Common Stock issuable to effect the conversion,
exchange or exercise of all such Convertible Securities shall be deemed to have
been issued and outstanding and the Company shall have received all of the
consideration payable therefor, if any, as of the date of the actual issuance of
such Convertible Securities. After adjustment shall have been made in the number
of shares of the Common Stock issuable upon exercise of the Warrants and the
Exercise Price with respect to the distribution, issuance or sale of any
Convertible Securities ("Primary Convertible Securities") in accordance with the
foregoing, no further adjustment thereof shall be made upon the actual issuance
of (x) any Convertible Securities ("Secondary Convertible Securities") issued
upon conversion, exchange or exercise of such Primary Convertible Securities or
(y) any shares of Common Stock issued upon conversion, exchange or exercise of
such Primary Convertible Securities or Secondary Convertible Securities.

     (D) Superseding Adjustments. If, at any time any adjustment of the number
of shares of Common Stock issuable upon exercise of the Warrants shall have been
made pursuant to subsection 2(C) as the result of any issuance of Convertible
Securities,

                    (1) the right of conversion, exchange or exercise with
          respect to all or a portion of such Convertible Securities shall have
          expired, shall not have been exercised or shall be treated as having
          been cancelled or acquired by the Company, or

                    (2) the consideration per share of Common Stock issuable
          pursuant to the terms of such Convertible Securities shall be
          increased or decreased, or the number of shares of Common Stock
          issuable pursuant to such terms shall be increased or decreased,
          solely by virtue of provisions therein contained for an automatic
          decrease in such consideration per share, or automatic increase in
          such number of shares, upon the occurrence of a specified date or
          event,

then (i) such previous adjustment shall be rescinded and annulled and the
Additional Shares of Common Stock which were deemed to have been issued by
virtue of the computation made in connection with the adjustment so rescinded
and annulled shall no longer be deemed to have been issued by virtue of such
computation, and (ii) a recomputation shall be made of the effect of such
Convertible Securities on the basis of

                    (3) treating the number of Additional Shares of Common Stock
          or other property (if any) theretofore actually issued or issuable
          pursuant to any previous conversion, exchange or exercise (as the case
          may be) of any such Convertible Securities as having been issued on
          the date or dates of any such conversion, exchange or exercise and for
          the consideration actually received and receivable therefor, and

                    (4) treating any such Convertible Securities which then
          remain outstanding as having been granted or issued immediately after
          the time of such increase or decrease (as the case may be)

whereupon a new adjustment of the number of shares of Common Stock issuable upon
exercise of the Warrants, and of the Exercise Price, shall be made on the basis
pursuant to the appropriate provisions of this Section 2, which new adjustment
shall supersede the previous adjustment so rescinded and annulled.

     (E) Other Provisions Applicable to Adjustments Under this Section. The
following provisions shall be applicable to the making of adjustments provided
for in this Section 2:

          (1) Computation of Consideration. To the extent that any Additional
Shares of Common Stock or any Convertible Securities shall be issued for cash
consideration, the consideration received by the Company therefor shall be the
amount of the cash received by the Company therefor, or, if such Additional
Shares of Common Stock or Convertible Securities are offered by the Company for
subscription, the subscription price, or, if such Additional Shares of Common
Stock or Convertible Securities are sold to underwriters or dealers for public
offering without a subscription offering, the initial public offering price (in
any such case subtracting any amounts paid or receivable for accrued interest or
accrued dividends and without taking into account any compensation, discounts or
expenses paid or incurred by the Company for and in the underwriting of, or
otherwise in connection with, the issuance thereof). To the extent that such
issuance shall be for a consideration other than cash, then, except as herein
otherwise expressly provided herein, the amount of such consideration shall be
deemed to be the fair value of such consideration at the time of such issuance
as

<PAGE>

                                                                               4

determined by resolution of the Board of Directors. In case any Additional
Shares of Common Stock or any Convertible Securities shall be issued in
connection with any transaction described in Section 2(F) in which the Company
issues any securities or other property, the amount of consideration therefor
shall be deemed to be the fair value, as determined by resolution of the Board
of Directors, of such portion of the assets and business of the non-surviving
Person as such Board by resolution shall determine to be attributable to such
Additional Shares of Common Stock or Convertible Securities, as the case may be.
The consideration for any Additional Shares of Common Stock issuable pursuant to
conversion, exchange or exercise of any Convertible Securities shall be the
consideration received by the Company for issuing such Convertible Securities
plus the additional consideration (if any) payable to the Company upon the
conversion, exchange or exercise of such Convertible Securities. In case of the
issuance at any time of any Additional Shares of Common Stock or Convertible
Securities in payment or satisfaction of any dividends upon any class of stock
other than Common Stock, the Company shall be deemed to have received for such
Additional Shares of Common Stock or Convertible Securities a consideration
equal to the amount of such dividend so paid or satisfied.

          (2) When Adjustments to be Made. The adjustments required by this
Section 2 shall be made whenever and as often as any specified event requiring
an adjustment shall occur, except that any adjustment of the number of shares of
Common Stock into which the Notes are convertible that would otherwise be
required may be postponed (except in the case of a subdivision or combination of
shares of the Common Stock, as provided for in subsection 2.(A)) up to, but not
beyond the date of, conversion if such adjustment either by itself or with other
adjustments not previously made adds or subtracts less than 1 % of the shares of
Common Stock issuable upon exercise of the Warrants immediately prior to the
making of such adjustment. Any adjustment representing a change of less than
such minimum amount (except as aforesaid) which is postponed shall be carried
forward and made as soon as such adjustment, together with other adjustments
required by this Section 2 and not previously made, would result in a minimum
adjustment or on the date of conversion. For the purpose of any adjustment, any
specified event shall be deemed to have occurred at the close of business on the
date of its occurrence.

          (3) Fractional Interests. In computing adjustments under this Section
2, fractional interests in Common Stock shall be taken into account to the
nearest one-ten thousandth (1/10,000th) of a share.

          (4) When Adjustment Not Required. If the Company shall take a record
of the holders of its Common Stock for the purpose of entitling them to receive
a dividend or distribution or subscription or purchase rights and shall,
thereafter and before the distribution to stockholders, legally abandon its plan
to pay or deliver such dividend, distribution, subscription or purchase rights,
then thereafter no adjustment shall be required by reason of the taking of such
record and any such adjustment previously made in respect thereof shall be
rescinded and annulled.

     (F) Reorganization, Reclassification, Merger, Consolidation or Disposition
of Assets. In the event that the Company, at any time after the Original Issue
Date, shall (i) merge or consolidate with any other Person and the Company shall
not be the resulting or surviving Person, (ii) merge or consolidate with any
other Person and the Company shall be the resulting or surviving Person but in
connection therewith the Common Stock shall be changed into or exchanged for
stock or other securities of any other Person or cash or any other property or
assets, (iii) sell, lease or otherwise transfer all or substantially all of its
property or assets to any other Person and in connection therewith stock or
other securities, cash or any other property or assets shall be issuable or
deliverable in exchange for the Common Stock, or (iv) effect a capital
reorganization or reclassification of the Common Stock (other than in the
circumstances where any of Sections 2(A), (B) or (C) apply), then, and as a
condition to the effectiveness of any such merger consolidation, sale, lease or
other transfer or capital reorganization or reclassification (as the case may
be), lawful and adequate provision shall be made so that the holders of the
Warrants shall thereafter be entitled to receive, upon exercise thereof (in lieu
of the Common Stock which such holders would have been entitled to receive upon
such exercise immediately prior to such merger, consolidation, sale, lease or
other transfer or capital reorganization or reclassification (as the case may
be)), the stock or other securities, cash or other property or assets which such
holders would have been entitled to receive had the outstanding Warrants been
exercised immediately prior to such merger, consolidation, sale, lease or other
transfer or capital reorganization or reclassification (as the case may be), at
the aggregate Exercise Price in effect immediately prior to the such merger,
consolidation, sale, lease or other transfer or capital reorganization or
reclassification (as the case may be). As a further condition to the
effectiveness of any such merger, consolidation, sale, lease or other transfer
or capital reorganization or reclassification (as the case may be), any Person
(other than the Company) who shall become obligated to deliver any stock or
other securities, cash or other property or assets in accordance with the
foregoing shall deliver to the holders of the Warrants a written instrument by
which such Person shall expressly agree to issue and deliver any such stock or
other securities, cash or other property or assets upon exercise of the
Warrants.

<PAGE>

                                                                               5

     (G) Certain Limitations. Notwithstanding anything herein to the contrary,
the Company shall not enter into any transaction which, by reason of any
adjustment hereunder, would cause the Exercise Price to be less than the par
value per share of Common Stock.

     (H) Notice of Exercise Price Adjustments. Whenever the number of shares of
Common Stock issuable upon exercise of the Warrants, or the Exercise Price,
shall be adjusted pursuant to this Section 2, the Company shall forthwith
prepare a certificate to be executed by an authorized officer of the Company
setting forth, in reasonable detail, the event requiring the adjustment and the
method by which such adjustment was calculated, specifying the number of shares
of Common Stock into which the outstanding Warrants are exercisable and (if such
adjustment was made pursuant to Section 2(F), describing the number and kind of)
any stock or other securities, cash or other property or assets for which the
outstanding Warrants are exercisable, and any change in the Exercise Price
thereof, after giving effect to such adjustment or change. The Company shall
promptly cause a signed copy of such certificate to be delivered to each holder
of Warrants at such holder's address as appears on the books of the Company. The
Company shall keep at its office copies of all such certificates and cause the
same to be available for inspection at said office during normal business hours
by any holder of Warrants or any prospective purchaser of Warrants from such
holder.

     (I) Notice of Certain Corporate Actions. Holders of Warrants shall be
entitled to the same rights to receive notices of corporate actions and other
matters pertaining to the Company as the holders of outstanding shares of Common
Stock, and the Company shall forward (or cause to be forwarded) to each holder
of Warrants, at such holder's address as appears on the books of the Company,
all notices forwarded to holders of the Common Stock generally (whether or not
legally required).

3. RESTRICTIONS ON TRANSFER

     3.1. WARRANTS LEGEND. Except as otherwise provided in this Section 3, each
Warrant shall be stamped or otherwise imprinted with a legend in substantially
the following form:

     "THIS WARRANT, AND THE SECURITIES ISSUABLE UPON THE EXERCISE THEREOF, HAVE
     NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
     SECURITIES OR BLUE SKY LAWS OF ANY STATE OR OTHER JURISDICTION, AND NEITHER
     THIS WARRANT NOR SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED,
     SOLD, TRANSFERRED, DISTRIBUTED, ASSIGNED, PLEDGED, HYPOTHECATED OR
     OTHERWISE DISPOSED OF UNLESS: (A) THERE IS AN EFFECTIVE REGISTRATION AND/OR
     QUALIFICATION UNDER SUCH ACT AND ALL SUCH APPLICABLE SECURITIES AND/OR BLUE
     SKY LAWS COVERING SUCH TRANSACTION, OR (B) THE COMPANY RECEIVES AN OPINION
     LETTER FROM LEGAL COUNSEL TO THE HOLDER OF THIS WARRANT OR SUCH SECURITIES
     (AS THE CASE MAY BE), REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT
     THAT SUCH TRANSACTION IS EXEMPT FROM THE APPLICABLE REGISTRATION AND/OR
     QUALIFICATION REQUIREMENTS OF SUCH ACT AND APPLICABLE SECURITIES AND BLUE
     SKY LAWS."

     3.2. COMMON STOCK LEGEND. Except as otherwise provided in this Section 3,
each certificate representing Common Stock shall be stamped or otherwise
imprinted with a legend in substantially the following form:

     "THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
     SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES OR BLUE SKY LAWS OF
     ANY STATE OR OTHER JURISDICTION, AND NEITHER SUCH SECURITIES NOR ANY
     INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, DISTRIBUTED, ASSIGNED,
     PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS: (A) THERE IS AN
     EFFECTIVE REGISTRATION AND/OR QUALIFICATION UNDER SUCH ACT AND ALL SUCH
     APPLICABLE SECURITIES AND/OR BLUE SKY LAWS COVERING SUCH TRANSACTION, OR
     (B) THE CORPORATION RECEIVES AN OPINION LETTER FROM LEGAL COUNSEL TO THE
     HOLDER OF SUCH SECURITIES, REASONABLY SATISFACTORY TO THE CORPORATION, TO
     THE EFFECT THAT SUCH TRANSACTION IS EXEMPT FROM THE APPLICABLE REGISTRATION
     AND/OR QUALIFICATION REQUIREMENTS OF SUCH ACT AND APPLICABLE SECURITIES AND
     BLUE SKY LAWS."

<PAGE>

                                                                               6

     3.3. RESTRICTIONS ON TRANSFER. Each offer, sale, transfer, distribution,
assignment, pledge, hypothecation or other disposal of this Warrant, or Common
Stock and any interest therein shall be subject to compliance with the terms of
the foregoing legend(s) (as applicable), and the Company may refuse to register
or otherwise recognize any transfer of this Warrant or Common Stock not in
compliance therewith.

     3.4. TERMINATION OF COMMON STOCK RESTRICTIONS. The restrictions imposed
under this Section 3 shall terminate as to this Warrant and any shares of Common
Stock when, if and so long as such shares shall have been effectively registered
under the Securities Act and disposed of pursuant thereto. Whenever the
restrictions imposed by this Section 3 shall terminate as to this Warrant or any
shares of Common Stock as hereinabove provided, the holder thereof shall be
entitled to receive from the Company, at its expense, a new Warrant or a new
certificate or certificates for such shares (as applicable) without the legend
called for hereunder

4.  CORPORATE OFFICE; OWNERSHIP; REGISTRATION OF TRANSFER, ETC.

     4.1. CORPORATE OFFICE. The Company shall maintain a copy of the Warrants at
its corporate office.

     4.2. OWNERSHIP OF WARRANTS. The Company may deem and treat the Person in
whose name this Warrant is registered as the owner and holder thereof for all
purposes hereunder and shall not be bound by any notice to the contrary, until
presentation of this Warrant for registration of transfer as provided in this
Section 4.

     4.3. REGISTRATION OF TRANSFER. The Company agrees to maintain at its
corporate offices books for the registration and registration of transfer of
Warrants, and (subject to the provisions of Section 3) this Warrant and all
rights hereunder are transferable, in whole or in any part, on said books at
said office upon surrender of this Warrant at said offices, together with a
written instrument of transfer of this Warrant duly executed by the holder
thereof or its duly authorized agent or attorney and funds sufficient to pay any
transfer taxes payable in respect thereof. Upon such surrender and payment, the
Company shall execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees and in the denominations specified in such instrument and
this Warrant shall promptly be cancelled.

     4.4. DIVISION OR COMBINATION OF WARRANTS. This Warrant may be divided or
combined with other Warrants upon presentation of this Warrant and of any other
Warrants with which this Warrant is to be combined at the corporate offices of
the Company, together with a written notice specifying the names and
denominations in which the new Warrant or Warrants are to be issued duly
executed by the holders hereof and thereof or their respective duly authorized
agents or attorneys. Subject to compliance with Section 4.3 as to any transfer
which may be involved in such division or combination, the Company shall execute
and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to
be divided or combined in accordance with such notice.

     4.5. LOSS, DESTRUCTION, ETC. OF WARRANTS. Upon receipt of evidence
satisfactory to the Company of the loss, theft, mutilation or destruction of the
Warrant, and in the case of any such loss, theft or destruction upon delivery of
a written indemnity in such form and amount as shall be reasonably satisfactory
to the Company, or in the event of such mutilation upon surrender and
cancellation of the mutilated Warrant, the Company shall execute and deliver a
new Warrant of like tenor in lieu of such lost, stolen, mutilated or destroyed
Warrant. Any Warrant issued under the provisions of this Section 4.5 in lieu of
any Warrant alleged to be lost, stolen, mutilated or destroyed Warrant shall
constitute an original contractual obligation on the part of the Company.

     4.6. EXPENSES OF DELIVERY. The Company shall bear and pay all expenses,
taxes (other than transfer taxes) and other charges incurred or charged in
connection with the preparation, issuance and delivery of the Warrant hereunder.

5. DEFINITIONS

     For purposes of the Warrants, the following definitions, not defined
elsewhere in this Warrant, have the following meanings:

     "Additional Shares of Common Stock" means all shares of Common Stock issued
or issuable by the Company after the Original Issue Date other than Excluded
Shares.

     "Board of Directors" means the Board of Directors of the Company, or any
authorized committee thereof.

<PAGE>

                                                                               7

     "Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions at the place where any
specified act pursuant to this Note is to occur are authorized or obligated by
or pursuant to law, regulation or executive order to close.

     "Convertible Securities" means evidences of indebtedness, shares of stock,
options, warrants and other purchase or subscription rights, other than Series C
Convertible Preferred Stock, which are convertible into, exchangeable for or
exercisable for, with or without payment of additional consideration in cash or
other property, and either immediately or upon the occurrence of a specified
date or a specified event, Additional Shares of Common Stock (which excludes,
for the avoidance of doubt, Excluded Shares) or other Convertible Securities.

     "Excluded Shares" means shares of Common Stock issued or issuable: (A) to:
(i) employees, officers and/or directors of, and/or consultants to, the Company
or any of its subsidiaries in consideration of services rendered or to be
rendered to the Company or any of its subsidiaries, to otherwise compensate any
such Person and/or to retain the services of any such Person (provided that
Excluded Shares under this clause (i) may not exceed at, any time, 20% of the
amount of Common Stock outstanding and issuable pursuant to Convertible
Securities outstanding at such time); (ii) vendors, lenders or other providers
of finance to, and/or strategic partners of, the Company or any of its
subsidiaries in consideration of favorable cash pricing, continued business
and/or other consideration or value added; and (iii) sellers and/or other
securityholders of companies, businesses or assets purchased or otherwise
acquired (including by merger, consolidation or joint venture formation) by the
Company or any of its subsidiaries; and (B) upon conversion of Convertible
Securities originally issued prior to the Original Issue Date.

     "Expiration Date" means November 2, 2004.

     "Majority Holders" means, at any time, the holders of a majority of the
Warrants.

     "Original Issue Date" means November 2, 2001.

     "Outstanding" means, when used with reference to Common Stock at any date
as of which the number of shares thereof is to be determined, (i) all issued and
outstanding shares of Common Stock, except shares then owned or held by or for
the account of the Company or any subsidiary thereof, and shall include all
shares issuable in respect of outstanding scrip or any certificates representing
fractional interests in shares of Common Stock, and (ii) all shares of Common
Stock issuable in respect of any outstanding Convertible Securities of the
Company having a nominal conversion, exchange or exercise price.

     "Person" means any individual, firm, corporation or other entity, and shall
include any successor (by merger or otherwise) of such entity.

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

6. NO IMPAIRMENT OF RIGHTS; CERTAIN COVENANTS

     The Company will not, by amendment of its certificate of incorporation or
through any consolidation, merger, sale, lease or other transfer of property or
assets, capital reorganization or reclassification, issuance of securities,
dissolution, liquidation, winding-up or otherwise, take any action or omit to
take any action directly or indirectly avoiding or seeking to avoid the
observance or performance of the provisions of the Warrant, but shall at all
times in good faith assist in the carrying out the terms of such provisions
thereof. Without limiting the generality of the foregoing, the Company covenants
and agrees that it: (i) shall not take any action (contemplated under Section 2
or otherwise) that results in the par value of a share of Common Stock to exceed
the Exercise Price therefor; (ii) shall not take any action (contemplated under
Section 2 or otherwise) that results in the total number of shares of Common
Stock or other securities issuable upon exercise of the Warrant exceeding the
number of authorized but unissued shares of the Company under its certificate of
incorporation; and (iii) shall otherwise take all actions as may be necessary or
appropriate in order that the Company may issue and deliver to the holders of
the Warrant upon exercise thereof at the Exercise Price, free from preemptive
rights, duly authorized, validly issued, fully paid and non-assessable shares of
Common Stock which may be issuable upon exercise thereof.

7.  MISCELLANEOUS

     7.1. NOT STOCKHOLDERS; LIMITATION OF LIABILITY. Except as expressly
provided herein, no provision of this Warrant shall be construed as conferring
upon the holder thereof the rights of a stockholder of the Company. No provision

<PAGE>

                                                                               8

hereof, in the absence of affirmative action by the holder hereof to purchase
Common Stock, and no mere enumeration herein of the rights, powers or privileges
of the holder hereof, shall give rise to any liability of such holder for the
purchase price of any Common Stock or otherwise as a stockholder of the Company,
whether such liability is asserted by the Company or its creditors.

     7.2. WAIVERS AND AMENDMENTS. Any term or provision of the Warrant may be
waived, supplemented or amended in a writing executed by the Company and
executed (or consented to in writing) by the Majority Holders.

     7.3. ILLEGALITY. If the event that any one or more of the provisions
contained in this Warrant shall be determined to be invalid, unenforceable or
illegal in any respect for any reason, the validity, enforceability or legality
of such provision in any other respect and the remaining provisions of this
Warrant shall not, at the election of the party for whom the benefit of the
provision exists, be in any way impaired.

     7.4. NOTICES. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered personally,
sent by overnight delivery service or sent by registered or certified mail,
postage prepaid, addressed as follows: (i) if to the holder of this Warrant, at
the registered address of such holder as set forth in the Warrant; and (ii) if
to the Company, 414 N. Orleans, Suite 510, Chicago, Illinois 60610, Attention:
President; provided that exercise of this Warrant shall be effective if effected
in the manner provided in Section 1. The Company or holder of this Warrant may
by notice to the other change the address to which notices or other
communications to it are to be delivered or sent.

     7.5. ENTIRE AGREEMENT. This Warrant contains the entire agreement between
the Company and the holder of this Warrant with respect to the subject matter
hereof and supersedes all prior arrangements or understandings with respect
thereto.

     7.6. SPECIFIC PERFORMANCE. The holder of the Warrant shall be entitled to
the equitable remedy of specific performance by the Company in the event of any
breach by it of the terms and provisions thereof. The Company hereby irrevocably
waives, to the extent that it may do so under applicable law, any defense based
on the adequacy of a remedy at law which may be asserted as a bar to the remedy
of specific performance in any action brought against the Company for specific
performance of the Warrant.

     7.7. DESCRIPTIVE HEADINGS; SECTION REFERENCES. The descriptive headings of
this Warrant are for convenience only and shall not control or affect the
meaning or construction of any provision of this Warrant. All Section references
set forth in this Warrant are (unless the context otherwise require) references
to sections of this Warrant.

     7.8. GOVERNING LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of Illinois (without regard to the choice
of law principles thereof).

     IN WITNESS WHEREOF, the Company has caused this Warrant to be executed and
delivered on its behalf as of the date first above written.

                                     MOLECULAR DIAGNOSTICS, INC.

                                     By:
                                        ---------------------------------
                                     Peter P. Gombrich
                                     Chairman and CEO

<PAGE>
                           MOLECULAR DIAGNOSTICS, INC.

                              Warrant No. VMSI - 1
                               Subscription Notice

     THE UNDERSIGNED, the holder of the foregoing Warrant, HEREBY ELECTS TO
EXERCISE purchase rights represented by said Warrant for, and to purchase
thereunder, _______________________________________________________ shares
of the Common Stock covered by said Warrant and herewith makes payment of the
full Exercise Price therefor by the delivery herewith of cash or a certified or
official bank check payable to the order of the Company in the amount of
$___________________ or such other payment form as specified in Section 1.1 of
the warrant.

THE UNDERSIGNED HEREBY SURRENDERS to the Company the foregoing Warrant with
respect to ____ shares of Common Stock.

AND THE UNDERSIGNED HEREBY REQUESTS that:

(1)  the certificates for such shares (and any other securities or other
     property issuable upon such exercise): (1) be issued in the name of the
     undersigned or (if indicated in the following space), the following person
     or entity: _______________________________________________________________
     __________________________________________________________________________
     and (2) be delivered to the following address:____________________________
     __________________________________________________________________________

(2)  and if such shares shall not include all of the shares (or other securities
     or other property) issuable as provided in said Warrant, then a new
     Warrant, of like tenor and date, for the balance of the shares issuable
     thereunder be executed and delivered to the undersigned at the following
     address:_________________________________________________________________
     _____________________________________________ .

     Dated: _______________________

                                                  ____________________________
                                                  Name Printed:

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