Document:

Exhibit 4.2

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

                                                               Warrant No. KS1

                  WARRANT TO PURCHASE SHARES OF COMMON STOCK

                         ISSUE DATE: September 15, 2004

      This  certifies  that  Ken  Sgro  or any  valid  transferee  thereof  (the
"Holder"),   for  value  received,   is  entitled  to  purchase  from  Molecular
Diagnostics,  Inc., a Delaware  corporation  with its principal  business office
located at 414 North Orleans  Street,  Suite 510,  Chicago,  Illinois 60610 (the
"Company"),  subject to the terms and conditions set forth below, at any time or
from time to time on and after the  Vesting  Date (as  defined  below) set forth
above and  before  3:00 p.m.  (Central  Time) on the  fifth  anniversary  of the
Vesting Date (the "Expiration Date"),  192,000 shares of Common Stock, $.001 par
value per share, of the Company ("Common  Stock"),  at a purchase price of $0.10
per  share.  The shares  purchasable  upon  exercise  of this  Warrant,  and the
purchase  price per share,  each as adjusted  from time to time  pursuant to the
provisions of this Warrant,  are hereinafter referred to as the "Warrant Shares"
and the "Purchase Price,"  respectively.  As consideration for this Warrant, the
Holder named above agrees to forgive all outstanding indebtedness of the Company
to such named Holder.  The Holder expressly  agrees and  acknowledges  that this
Warrant shall not vest, and shall not be exercisable, in whole or in part, until
such time as the  stockholders  of the Company approve an increase in the number
of  authorized  shares of Common  Stock of the Company and an  amendment  to the
Company's  Certificate of  Incorporation is filed with the Secretary of State of
the State of Delaware to effect such increase (such date, the "Vesting Date").

     1. Exercise.

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

<PAGE>

          (b) Cashless Exercise.

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

       X = Y(A-B)
              A

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

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

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

             B =        the Purchase Price then in effect.

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

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

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

                                       -2-
<PAGE>

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

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

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

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

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

                                       -3-
<PAGE>

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

     2. Adjustments.

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

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

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

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

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

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

                                       -4-
<PAGE>

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

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

          (f)  Certificate  as to  Adjustments.  Upon  the  occurrence  of  each
adjustment or readjustment of the Purchase Price pursuant to this Section 2, the
Company at its expense shall,  as promptly as reasonably  practicable but in any
event not later than 10 business  days  thereafter,  compute such  adjustment or
readjustment  in  accordance  with the terms  hereof and furnish to the Holder a
certificate  setting forth such adjustment or  readjustment  (including the kind
and amount of securities, cash or other property for which this Warrant shall be
exercisable  and the Purchase Price) and the facts upon which such adjustment or
readjustment is based. The Company shall, as promptly as reasonably  practicable
after the written  request at any time of the Holder (but in any event not later
than 10  business  days  thereafter),  furnish or cause to be  furnished  to the
Holder a  certificate  setting  forth (i) the Purchase  Price then in effect and
(ii) the  number  of shares of Common  Stock and the  amount,  if any,  of other
securities,  cash or property  which then would be received upon the exercise of
this Warrant.
                                       -5-
<PAGE>

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

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

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

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

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

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

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

     5. Transfers, etc.

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

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

                                       -6-
<PAGE>

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

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

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

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

     6. No Impairment; Adjustment of Par Value.

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

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

     7. Record Date, etc. In the event:

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

                                      -7-
<PAGE>

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

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

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

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

     9. Exchange or Replacement of Warrants.

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

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

                                      -8-
<PAGE>

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

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

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

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

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

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

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

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

                                      -9-
<PAGE>

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

      EXECUTED as of the Issue Date indicated above.

                                    MOLECULAR DIAGNOSTICS, INC.

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

ATTEST:

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

                                      -10-

<PAGE>

 EXHIBIT I

                                  PURCHASE FORM

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

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

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

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

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

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

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

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

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

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

                                      -11-

<PAGE>

                                                                      EXHIBIT II

                                 ASSIGNMENT FORM

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

Name of Assignee            Address                    No. of Shares

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

Signature Guaranteed:

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

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

                                      -12-Exhibit 4.3

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

                                                                 Warrant No. JF1

                   WARRANT TO PURCHASE SHARES OF COMMON STOCK

                         ISSUE DATE: SEPTEMBER 15, 2004

         This certifies that James Fallon or any valid  transferee  thereof (the
"Holder"),   for  value  received,   is  entitled  to  purchase  from  Molecular
Diagnostics,  Inc., a Delaware  corporation  with its principal  business office
located at 414 North Orleans  Street,  Suite 510,  Chicago,  Illinois 60610 (the
"Company"),  subject to the terms and conditions set forth below, at any time or
from time to time on and after the  Vesting  Date (as  defined  below) set forth
above and  before  3:00 p.m.  (Central  Time) on the  fifth  anniversary  of the
Vesting Date (the "Expiration  Date"),  8,000 shares of Common Stock,  $.001 par
value per share, of the Company ("Common  Stock"),  at a purchase price of $0.10
per  share.  The shares  purchasable  upon  exercise  of this  Warrant,  and the
purchase  price per share,  each as adjusted  from time to time  pursuant to the
provisions of this Warrant,  are hereinafter referred to as the "Warrant Shares"
and the "Purchase Price,"  respectively.  As consideration for this Warrant, the
Holder named above agrees to forgive all outstanding indebtedness of the Company
to such named Holder.  The Holder expressly  agrees and  acknowledges  that this
Warrant shall not vest, and shall not be exercisable, in whole or in part, until
such time as the  stockholders  of the Company approve an increase in the number
of  authorized  shares of Common  Stock of the Company and an  amendment  to the
Company's  Certificate of  Incorporation is filed with the Secretary of State of
the State of Delaware to effect such increase (such date, the "Vesting Date").

         1. Exercise.

             (a)  Exercise  for Cash.  The Holder may, at the  Holder's  option,
elect to exercise this Warrant, in whole or in part and at any time or from time
to time on or after the Vesting  Date but prior to 3:00 p.m.  (Central  Time) on
the  Expiration  Date,  by  surrendering  this  Warrant,  with the purchase form
appended hereto as Exhibit I duly executed by or on behalf of the Holder, at the
principal  office  of the  Company,  or at such  other  office  or agency as the
Company may  designate,  accompanied  by payment in full, in lawful money of the
United States, of the Purchase Price payable in respect of the number of Warrant
Shares purchased upon such exercise. In no event shall any such exercise be for

                                       48
<PAGE>

fewer than  10,000  Warrant  Shares  unless  fewer than an  aggregate  of 10,000
Warrant Shares are then purchasable  under all outstanding  Warrants held by the
Holder.  Payment of the aggregate Purchase Price may be made in cash,  certified
or bank check, or wire transfer of immediately available funds.

             (b) Cashless Exercise.

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

          X = Y (A-B)
              --------
                 A

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

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

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

                 B =    the Purchase Price then in effect.

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

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

                           (2) If the  Common  Stock is not listed on a national
securities  exchange,  the Nasdaq National Market or the Nasdaq SmallCap Market,
or another nationally  recognized trading system as of the Exercise Date, but is
quoted on the  Over-The-Counter  Bulletin Board, the Fair Market Value per share
of Common  Stock shall be deemed to be the average of the highest bid and lowest

                                      -2-
<PAGE>

asked  prices  quoted  thereon on the  trading  day  immediately  preceding  the
Exercise  Date;  provided  that if no price is  reported  on such day,  the Fair
Market  Value per share of Common Stock shall be  determined  pursuant to clause
(3).

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

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

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

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

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

                                      -3-
<PAGE>

the Holder  pursuant to such partial  exercise and the number of Warrant  Shares
subject to the portion of the Warrant being cancelled in payment of the Purchase
Price).

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

         2. Adjustments.

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

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

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

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

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

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

                                      -4-
<PAGE>

immediately prior to such adjustment, multiplied by the Purchase Price in effect
immediately  prior to such  adjustment,  by (ii) the  Purchase  Price in  effect
immediately after such adjustment.

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

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

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

                                      -5-
<PAGE>

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

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

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

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

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

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

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

         5. Transfers, etc.

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

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

                                      -6-
<PAGE>

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

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

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

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

         6. No Impairment; Adjustment of Par Value.

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

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

         7. Record Date, etc. In the event:

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

                                      -7-
<PAGE>

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

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

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

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

         9. Exchange or Replacement of Warrants.

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

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

         10. Notices.  All notices and other  communications from the Company to
the Holder in  connection  herewith  shall be mailed by certified or  registered
mail,  postage prepaid,  or sent via a reputable  nationwide  overnight  courier
service  guaranteeing next business day delivery,  to the address last furnished

                                      -8-
<PAGE>

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

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

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

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

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

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

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

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

                                      -9-
<PAGE>

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

         EXECUTED as of the Issue Date indicated above.

                                          MOLECULAR DIAGNOSTICS, INC.

                                          By:________________________________

                                          Title:_____________________________

ATTEST:

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

                                      -10-
<PAGE>

                                                                       EXHIBIT I

                                  PURCHASE FORM

To:_________________                                          Dated:____________

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

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

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

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

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

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

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

                                        Signature:
                                                   ------------------------

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

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

                                      -11-
<PAGE>

                                   EXHIBIT II

                                 ASSIGNMENT FORM

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

Name of Assignee                 Address                         No. of Shares
----------------                 -------                         -------------

Dated:_____________________          Signature:________________________________

Signature Guaranteed:

By: _______________________

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

                                      -12-

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