Exhibit 10.2


 


NEITHER THESE SECURITIES NOR THE SECURITIES
ISSUABLE UPON EXERCISE OF THESE SECURITIES HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I)
IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR (B) AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE
STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS
TRANSFER AGENT.


 


TRANSGENOMIC,
INC.


 


WARRANT TO PURCHASE COMMON STOCK


 


Original Issue Date: February 7, 2012


 


Transgenomic, Inc., a Delaware corporation
(the “Company”), hereby certifies that, for value received,                                                                        or its permitted registered assigns
(the “Holder”), is entitled to purchase from the Company up to a total of __________ shares of common stock,
$0.01 par value per share (the “Common Stock”), of the Company (each such share, a “Warrant Share”
and all such shares, the “Warrant Shares”) at an exercise price per share equal to $1.25 per share (as adjusted
from time to time as provided in Section 9 herein, the “Exercise Price”), at any time and from time to time
on or after the date hereof (the “Original Exercise Date”) and through and including 5:30 p.m., New York
City time, February 7, 2017 (the “Expiration Date”), and subject to the following terms and conditions:


 


This Warrant (this “Warrant”)
is one of a series of similar warrants issued upon conversion of the Convertible Promissory Notes originally issued by the Company
pursuant to that certain Convertible Promissory Note Purchase Agreement, dated December 30, 2011, by and among the Company, Third
Security Senior Staff 2008 LLC, Third Security Staff 2010 LLC and Third Security Incentive 2010 LLC (the “Purchase Agreement”).
All such warrants are referred to herein, collectively, as the “Warrants.”


 


1.            Definitions.
In addition to the terms defined elsewhere in this Warrant, capitalized terms that are not otherwise defined herein have the meanings
given to such terms in the Purchase Agreement. 


  


2.            Registration
of Warrants. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose, which
may be a third-party transfer agent (the “Warrant Register”), in the name of the record Holder (which shall
include the initial Holder or, as the case may be, any registered assignee to which this Warrant is permissibly assigned hereunder)
from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose
of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary. 


 



    	 



    	 



    

 


3.            Registration
of Transfers. The Company shall register the transfer of all or any portion of this Warrant in the Warrant Register, upon
surrender of this Warrant, with the Form of Assignment attached as Schedule 2 hereto duly completed and signed, to the
Company’s transfer agent or to the Company at its address specified in the Third Security Purchase Agreement and (x) delivery,
at the request of the Company, of an opinion of counsel reasonably satisfactory to the Company to the effect that the transfer
of such portion of this Warrant may be made pursuant to an available exemption from the registration requirements of the Securities
Act and all applicable state securities or blue sky laws (other than in connection with any transfer (i) pursuant to an effective
registration statement, (ii) to the Company, (iii) pursuant to Rule 144 (provided that such Holder provides the Company with reasonable
assurances (in the form of seller and, if applicable, broker representation letters) that the securities may be sold pursuant
to such rule) or (iv) in connection with a bona fide pledge) and (y) delivery by the transferee of a written statement to the
Company certifying that the transferee is an “accredited investor” as defined in Rule 501(a) under the Securities
Act, at its address specified in the Third Security Purchase Agreement. Upon any such registration or transfer, a new warrant
to purchase Common Stock in substantially the form of this Warrant (any such new warrant, a “New Warrant”)
evidencing the portion of this Warrant so transferred shall be issued to the transferee, and a New Warrant evidencing the remaining
portion of this Warrant not so transferred, if any, shall be issued to the transferring Holder. The acceptance of the New Warrant
by the transferee thereof shall be deemed the acceptance by such transferee of all of the rights and obligations in respect of
the New Warrant that the Holder has in respect of this Warrant. The Company shall prepare, issue and deliver at its own expense
any New Warrant under this Section 3. 


 


4.           Exercise
and Duration of Warrant. 


 


(a)          All or any part of this Warrant
shall be exercisable by the registered Holder in any manner permitted by Section 10 of this Warrant at any time and from time to
time on or after the Original Issue Date and through and including 5:30 p.m. New York City time, on the Expiration Date. At 5:30
p.m., New York City time, on the Expiration Date, the portion (or all) of this Warrant not exercised prior thereto shall be and
become void and of no value and this Warrant shall be automatically terminated and no longer outstanding.


 


(b)          The Holder may exercise this Warrant
by delivering to the Company (i) an exercise notice, in the form attached as Schedule 1 hereto (the “Exercise Notice”),
completed and duly signed, and (ii) payment of the Exercise Price for the number of Warrant Shares as to which this Warrant is
being exercised (which may take the form of a “cashless exercise” if so indicated in the Exercise Notice and if a “cashless
exercise” may occur at such time pursuant to Section 10 below) within two (2) Business Days following the Exercise Date (as
defined herein). The date on which the Exercise Notice is delivered to the Company (as determined in accordance with the notice
provisions hereof) is an “Exercise Date.” The Holder shall not be required to deliver the original Warrant in
order to effect an exercise hereunder, but if it is not so delivered then such exercise shall constitute an agreement by the Holder
to deliver the original Warrant to the Company as soon as practicable thereafter. Execution and delivery of the Exercise Notice
shall have the same effect as cancellation of the original Warrant and issuance of a New Warrant evidencing the right to purchase
the remaining number of Warrant Shares. 


 



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5.            Delivery
of Warrant Shares. 


 


(a)            Upon
exercise of this Warrant, the Company shall promptly (but in no event later than three Trading Days after the Exercise Date) issue
or cause to be issued and cause to be delivered to or upon the written order of the Holder and in such name or names as the Holder
may designate (provided that, if the Registration Statement (as defined below) is not effective and the Holder directs the Company
to deliver a certificate for the Warrant Shares in a name other than that of the Holder or an Affiliate of the Holder, it shall
deliver to the Company on the Exercise Date an opinion of counsel reasonably satisfactory to the Company to the effect that the
issuance of such Warrant Shares in such other name may be made pursuant to an available exemption from the registration requirements
of the Securities Act and all applicable state securities or blue sky laws), (i) a certificate for the Warrant Shares issuable
upon such exercise, free of restrictive legends, or (ii) an electronic delivery of the Warrant Shares to the Holder’s account
at the Depository Trust Company (“DTC”) or a similar organization, unless in the case of clause (i) and (ii)
a registration statement covering the resale of the Warrant Shares and naming the Holder as a selling stockholder thereunder (the
“Registration Statement”) is not then effective or the Warrant Shares are not freely transferable without restriction
under Rule 144 by Holders who are not affiliates of the Company, in which case such Holder shall receive a certificate for the
Warrant Shares issuable upon such exercise with appropriate restrictive legends. The Holder, or any Person permissibly so designated
by the Holder to receive Warrant Shares, shall be deemed to have become the holder of record of such Warrant Shares as of the
Exercise Date. Notwithstanding anything contained herein to the contrary, if the Holder fails to deliver the documents required
to register a transferee as set forth in Section 3 above or to provide the documents required under this Section 5(a) to issue
a certificate or electronic delivery of the Warrant Shares to any Person(s) other than the Holder, then determination of the three
Trading Days shall be tolled until such documents have been delivered to the Company. If the Warrant Shares are to be issued free
of all restrictive legends, the Company shall, upon the written request of the Holder, use its reasonable best efforts to deliver,
or cause to be delivered, Warrant Shares hereunder electronically through DTC or another established clearing corporation performing
similar functions, if available; provided, that, the Company may, but will not be required to, change its transfer agent if its
current transfer agent cannot deliver Warrant Shares electronically through such a clearing corporation. "Trading Day"
means any day on which the Common Stock are traded on the principal securities exchange or securities market on which the Common
Stock are then traded (the “Trading Market”); provided that "Trading Day" shall not
include any day on which the Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day
that the Common Stock is suspended from trading during the final hour of trading on such exchange or market (or if such exchange
or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at
4:00:00 p.m., New York time).


 


(b)          If by the close of the third Trading
Day after delivery of a properly completed Exercise Notice and the payment of the aggregate Exercise Price in any manner permitted
by Section 10 of this Warrant, the Company fails to deliver to the Holder a certificate representing the required number of Warrant
Shares in the manner required pursuant to Section 5(a), and if after such third Trading Day and prior to the receipt of such Warrant
Shares, the Holder is required to purchase (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction
of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”),
then the Company shall, in its sole discretion, within three Trading Days after the Holder’s request for payment, either
(1) pay in cash to the Holder an amount equal to the Holder’s total purchase price (including brokerage commissions, if any)
for the shares of Common Stock so purchased, at which point the number of Warrant Shares underlying this Warrant equal to the number
of shares of Common Stock so purchased shall be forfeited and the Company’s obligation to deliver such certificate (and to
issue such Warrant Shares) shall terminate or (2) promptly honor its obligation to deliver to the Holder a certificate or certificates
representing such Warrant Shares and pay cash to the Holder in an amount equal to the excess (if any) of Holder’s total purchase
price (including brokerage commissions, if any) for the shares of Common Stock so purchased in the Buy-In over the product of (A)
the number of shares of Common Stock purchased in the Buy-In, multiplied by (B) the closing bid price of a share of Common Stock
on the Exercise Date. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect
of the Buy-In, together with applicable confirmations and other evidence reasonably requested by the Company.


 



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(c)          To the extent permitted by law,
the Company’s obligations to issue and deliver Warrant Shares in accordance with and subject to the terms hereof are absolute
and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect
to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim,
recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the
Company (other than breaches related to this Warrant or the Purchase Agreement) or any violation or alleged violation of law by
the Holder or any other Person, and irrespective of any other circumstance that might otherwise limit such obligation of the Company
to the Holder in connection with the issuance of Warrant Shares. Nothing herein shall limit the Holder’s right to pursue
any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance
and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common
Stock upon exercise of the Warrant as required pursuant to the terms hereof.


 


6.           Charges,
Taxes and Expenses. Issuance and delivery of certificates for shares of Common Stock upon exercise of this Warrant shall be
made without charge to the Holder for any issue or transfer tax, transfer agent fee or other incidental tax or expense in respect
of the issuance of such certificates, all of which taxes and expenses shall be paid by the Company; provided, however,
that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the registration
of any certificates for Warrant Shares or the Warrants in a name other than that of the Holder or an Affiliate thereof. The Holder
shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving
Warrant Shares upon exercise hereof. 


 


7.           Replacement
of Warrant. If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange
and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon
receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction (in such case) and, in each case,
a customary and reasonable indemnity and surety bond, if requested by the Company. Applicants for a New Warrant under such circumstances
shall also comply with such other reasonable regulations and procedures and pay such other reasonable third-party costs as the
Company may prescribe. If a New Warrant is requested as a result of a mutilation of this Warrant, then the Holder shall deliver
such mutilated Warrant to the Company as a condition precedent to the Company’s obligation to issue the New Warrant. 


 



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8.            Reservation
of Warrant Shares. The Company represents and warrants that on the date hereof, it has duly authorized and reserved, and covenants
that it will at all times during the period this Warrant is outstanding reserve and keep available out of the aggregate of its
authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon
exercise of this Warrant as herein provided, the number of Warrant Shares that are initially issuable and deliverable upon the
exercise of this entire Warrant, free from preemptive rights or any other contingent purchase rights of persons other than the
Holder (taking into account the adjustments and restrictions of Section 9). The Company covenants that all Warrant Shares so issuable
and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be
duly and validly authorized, issued and fully paid and nonassessable and free from all taxes, liens and charges created by the
Company in respect of the original issuance thereof (other than taxes in respect of any transfer occurring contemporaneously with
such issue). The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who
are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares
upon the exercise of the purchase rights under this Warrant. The Company represents and warrants that the Warrant Shares, when
issued and paid for in accordance with the terms of the Transaction Documents and the Warrants, will be issued free and clear
of all security interests, claims, liens and other encumbrances other than restrictions imposed by applicable securities laws.
The Company will take all such action as may be reasonably necessary to assure that such shares of Common Stock may be issued
as provided herein without violation of any applicable law or regulation, or of any requirements of any securities exchange or
automated quotation system upon which the Common Stock may be listed.


 


9.            Certain
Adjustments. The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment
from time to time as set forth in this Section 9. 


 


(a)          Stock Dividends and Splits.
If the Company, at any time while this Warrant is outstanding, (i) pays a stock dividend on its Common Stock or otherwise
makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides its outstanding
shares of Common Stock into a larger number of shares, (iii) combines (by combination, reverse stock split or otherwise) its
outstanding shares of Common Stock into a smaller number of shares (a “Stock Combination Event”) or (iv) issues
by reclassification of shares of Common Stock any shares of capital stock of the Company, then in each such case the Exercise Price
shall be adjusted to a price determined by multiplying the Exercise Price in effect immediately prior to the effective date of
such event by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such effective date
immediately before giving effect to such event and the denominator of which shall be the number of shares of Common Stock outstanding
immediately after giving effect to such event. Any adjustment made pursuant to clause (i) of this paragraph shall become effective
immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution, and
any adjustment pursuant to clause (ii), (iii) or (iv) of this paragraph shall become effective immediately after the
effective date of such subdivision, combination or reclassification. If at any time and from time to time on or after the Issuance
Date there occurs a Stock Combination Event and the product of (i) the quotient determined by dividing (A) the Exercise Price in
effect immediately prior to the Stock Combination Event by (B) the arithmetic average of the weighted average price during the
fifteen (15) Trading Days immediately prior to the Stock Combination Event; and (ii) the arithmetic average of the weighted average
price during the fifteen (15) Trading Days immediately following the date of such Stock Combination Event (each, an “Event
Market Price”) is less than the Exercise Price then in effect (after giving effect to the adjustment in Section 9(a) above),
then on the sixteenth (16th) Trading Day immediately following such Stock Combination Event, the Exercise Price then in effect
on such sixteenth (16th) Trading Day (after giving effect to the adjustment in Section 9(a) above) shall be reduced (but in no
event increased) to the Event Market Price. For the avoidance of doubt, if the adjustment in the immediately preceding sentence
would otherwise result in an increase in the Exercise Price hereunder, no adjustment shall be made.


 



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(b)          Pro Rata Distributions.
If the Company, at any time while this Warrant is outstanding, distributes to all holders of Common Stock for no consideration
(i) evidences of its indebtedness, (ii) any security (other than a distribution of Common Stock covered by the preceding paragraph)
or (iii) rights or warrants to subscribe for or purchase any security, or (iv) any other asset, including cash (in each case, “Distributed
Property”), except, in the case of subsections (b)(i) through (b)(iv) hereof, for any distributions pursuant to a shareholders’
rights plan or similar takeover defense agreement or plan adopted by the Company, then, upon any exercise of this Warrant that
occurs after the record date fixed for determination of stockholders entitled to receive such distribution, the Holder shall be
entitled to receive, in addition to the Warrant Shares otherwise issuable upon such exercise (if applicable), the Distributed Property
that such Holder would have been entitled to receive in respect of such number of Warrant Shares had the Holder been the record
holder of such Warrant Shares immediately prior to such record date.


 


(c)          Fundamental Transactions.
If, at any time while this Warrant is outstanding (i) the Company effects (A) any merger of the Company with (but not into)
another Person, in which stockholders of the Company immediately prior to such transaction own less than a majority of the outstanding
stock of the surviving entity, or (B) any merger or consolidation of the Company into another Person, (ii) the Company effects
any sale of all or substantially all of its assets in one or a series of related transactions, (iii) any tender offer or exchange
offer approved or authorized by the Company’s Board of Directors is completed pursuant to which holders of at least a majority
of the outstanding Common Stock tender or exchange their shares for other securities, cash or property, or (iv) the Company effects
any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted
into or exchanged for other securities, cash or property (other than as a result of a subdivision or combination of shares of Common
Stock covered by Section 9(a) above) (in any such case, a “Fundamental Transaction”), then the Holder shall
have the right thereafter to receive, upon exercise of this Warrant, the same amount and kind of securities, cash or property as
it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to
such Fundamental Transaction, the holder of the number of Warrant Shares then issuable upon exercise in full of this Warrant without
regard to any limitations on exercise contained herein (the “Alternate Consideration”), and the Holder shall
no longer have the right to receive Warrant Shares upon exercise of this Warrant. The Company shall not effect any such Fundamental
Transaction unless prior to or simultaneously with the consummation thereof, any successor to the Company, surviving entity or
the corporation purchasing or otherwise acquiring such assets or other appropriate corporation or Person shall assume the obligation
to deliver to the Holder, such Alternate Consideration as, in accordance with the foregoing provisions, the Holder may be entitled
to receive, and the other obligations under this Warrant. The provisions of this paragraph (c) shall similarly apply to subsequent
transactions of an analogous type to any Fundamental Transaction.


 


(d)          Number of Warrant Shares.
Simultaneously with any adjustment to the Exercise Price pursuant to paragraph (a) or (e) of this Section 9, the number of Warrant
Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such
adjustment the aggregate Exercise Price payable hereunder for the increased or decreased number of Warrant Shares shall be the
same as the aggregate Exercise Price in effect immediately prior to such adjustment.


 


(e)          Subsequent Equity Sales.


 


(i)            Except as provided
in paragraph (e)(iii) of this Section 9, if and whenever the Company shall issue or sell, or is, in accordance with any
of paragraphs (e)(ii)(l) through (e)(ii)(7) of this Section 9, deemed to have issued or sold, any shares of Common Stock
for no consideration or for a consideration per share less than the Exercise Price in effect immediately prior to the time of such
issue or sale, then and in each such case (a “Trigger Issuance”) the then-existing Exercise Price shall be reduced
as of the close of business on the effective date of the Trigger Issuance, to a price determined as follows:


 



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Adjusted Exercise Price = (A x B) + D


 A+C


 


where


 


“A”
equals the number of shares of Common Stock outstanding, including Additional Shares of Common Stock (as defined below) deemed
to be issued hereunder, immediately preceding such Trigger Issuance;


 


“B”
equals the Exercise Price in effect immediately preceding such Trigger Issuance;


 


“C”
equals the number of Additional Shares of Common Stock issued or deemed issued hereunder as a result of the Trigger Issuance; and


 


“D”
equals the aggregate consideration, if any, received or deemed to be received by the Company upon such Trigger Issuance;


 


provided, however, that in no event
shall the Exercise Price after giving effect to such Trigger Issuance be greater than the Exercise Price immediately prior to such
Trigger Issuance.


 


For purposes of this paragraph (e), “Additional
Shares of Common Stock” shall mean all shares of Common Stock issued by the Company or deemed to be issued pursuant to
this paragraph (e), other than Excluded Issuances (as defined in paragraph (e)(iii) of this Section 9).


 


(ii)          For purposes of this paragraph (e), the following paragraphs (e)(ii)(l) to (e)(ii)(7) shall also be applicable:


 


(1)          Issuance
of Rights or Options. In case at any time the Company shall in any manner grant (directly and not by assumption in a merger
or otherwise) any warrants or other rights to subscribe for or to purchase, or any options for the purchase of, Common Stock or
any stock or security convertible into or exchangeable for Common Stock (such warrants, rights or options being called “Options”
and such convertible or exchangeable stock or securities being called “Convertible Securities”), whether or
not such Options or the right to convert or exchange any such Convertible Securities are immediately exercisable, and the price
per share for which Common Stock is issuable upon the exercise of such Options or upon the conversion or exchange of such Convertible
Securities (determined by dividing (i) the sum (which sum shall constitute the applicable consideration) of (x) the
total amount, if any, received or receivable by the Company as consideration for the granting of such Options, plus (y) the
aggregate amount of additional consideration payable to the Company upon the exercise of all such Options, plus (z), in the case
of such Options that relate to Convertible Securities, the aggregate amount of additional consideration, if any, payable upon
the issue or sale of such Convertible Securities and upon the conversion or exchange thereof, by (ii) the total maximum number
of shares of Common Stock issuable upon the exercise of such Options or upon the conversion or exchange of all such Convertible
Securities issuable upon the exercise of such Options) shall be less than the Exercise Price in effect immediately prior to the
time of the granting of such Options, then the total number of shares of Common Stock issuable upon the exercise of such Options
or upon conversion or exchange of the total amount of such Convertible Securities issuable upon the exercise of such Options shall
be deemed to have been issued for such price per share as of the date of granting of such Options or the issuance of such Convertible
Securities and thereafter shall be deemed to be outstanding for purposes of adjusting the Exercise Price. Except as otherwise
provided in paragraph (e)(ii)(3), no adjustment of the Exercise Price shall be made upon the actual issue of such Common Stock
or of such Convertible Securities upon exercise of such Options or upon the actual issue of such Common Stock upon conversion
or exchange of such Convertible Securities. 


 



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(2)          Issuance
of Convertible Securities. In case the Company shall in any manner issue (directly and not by assumption in a merger or otherwise)
or sell any Convertible Securities, whether or not the rights to exchange or convert any such Convertible Securities are immediately
exercisable, and the price per share for which Common Stock is issuable upon such conversion or exchange (determined by dividing
(i) the sum (which sum shall constitute the applicable consideration) of (x) the total amount received or receivable
by the Company as consideration for the issue or sale of such Convertible Securities, plus (y) the aggregate amount of additional
consideration, if any, payable to the Company upon the conversion or exchange thereof, by (ii) the total number of shares
of Common Stock issuable upon the conversion or exchange of all such Convertible Securities) shall be less than the Exercise Price
in effect immediately prior to the time of such issue or sale, then the total maximum number of shares of Common Stock issuable
upon conversion or exchange of all such Convertible Securities shall be deemed to have been issued for such price per share as
of the date of the issue or sale of such Convertible Securities and thereafter shall be deemed to be outstanding for purposes of
adjusting the Exercise Price, provided that (a) except as otherwise provided in paragraph (e)(ii)(3), no adjustment of the
Exercise Price shall be made upon the actual issuance of such Common Stock upon conversion or exchange of such Convertible Securities
and (b) no further adjustment of the Exercise Price shall be made by reason of the issue or sale of Convertible Securities upon
exercise of any Options to purchase any such Convertible Securities for which adjustments of the Exercise Price have been made
pursuant to the other provisions of paragraph (e). No adjustment pursuant to
this Section 9 shall be made if such adjustment would result in an increase of the Exercise Price then in effect.


 


(3)          Change
in Option Price or Conversion Rate. Upon the happening of any of the following events, namely, if the purchase price provided
for in any Option referred to in paragraph (e)(ii)(l) of this Section 9, the additional consideration, if any, payable upon
the conversion or exchange of any Convertible Securities referred to in paragraphs (e)(ii)(l) or (e)(ii)(2), or the rate at which
Convertible Securities referred to in paragraphs (e)(ii)(l) or (e)(ii)(2) are convertible into or exchangeable for Common Stock
shall change at any time (including, but not limited to, changes under or by reason of provisions designed to protect against dilution),
the Exercise Price in effect at the time of such event shall forthwith be readjusted to the Exercise Price that would have been
in effect at such time had such Options or Convertible Securities still outstanding provided for such changed purchase price, additional
consideration or conversion rate, as the case may be, at the time initially granted, issued or sold. 


 


(4)          Stock
Dividends. Subject to the provisions of this paragraph (e), in case the Company shall declare a dividend or make any other
distribution upon any stock of the Company (other than the Common Stock) payable in Common Stock, Options or Convertible Securities,
then any Common Stock, Options or Convertible Securities, as the case may be, issuable in payment of such dividend or distribution
shall be deemed to have been issued or sold without consideration.




 



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(5)          Consideration
for Stock. In case any shares of Common Stock, Options or Convertible Securities shall be issued or sold for cash, the consideration
received therefor shall be deemed to be the gross amount received by the Company therefor. In case any shares of Common Stock,
Options or Convertible Securities shall be issued or sold for a consideration other than cash, the amount of the consideration
other than cash received by the Company shall be deemed to be the fair value of such consideration as determined in good faith
by the Board of Directors of the Company. In case any Options shall be issued in connection with the issue and sale of other securities
of the Company, together comprising one integral transaction in which no specific consideration is allocated to such Options by
the parties thereto, such Options shall be deemed to have been issued for such consideration as determined in good faith by the
Board of Directors of the Company. If Common Stock, Options or Convertible Securities shall be issued or sold by the Company and,
in connection therewith, other Options or Convertible Securities (the “Additional Rights”) are issued, then
the consideration received or deemed to be received by the Company shall be reduced by the fair market value of the Additional
Rights (as determined using the Black Scholes Option Pricing Model or another method mutually agreed to by the Company and the
Holder). The Board of Directors of the Company shall respond promptly, in writing, to an inquiry by the Holder as to the fair market
value of the Additional Rights. In the event that the Board of Directors of the Company and the Holder are unable to agree upon
the fair market value of the Additional Rights, the Company and the Holder shall jointly select an appraiser who is experienced
in such matters. The decision of such appraiser shall be final and conclusive, and the cost of such appraiser shall be borne evenly
by the Company and the Holder. 


 


(6)          Record
Date. In case the Company shall take a record of the holders of its Common Stock for the purpose of entitling them (i) to receive
a dividend or other distribution payable in Common Stock, Options or Convertible Securities or (ii) to subscribe for or purchase
Common Stock, Options or Convertible Securities, then such record date shall be deemed to be the date of the issue or sale of the
shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution
or the date of the granting of such right of subscription or purchase, as the case may be.


 


(7)          Treasury
Shares. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for
the account of the Company or any of its wholly-owned subsidiaries, and the disposition of any such shares (other than the cancellation
or retirement thereof) shall be considered an issue or sale of Common Stock for the purpose of this paragraph (e).


 


(iii)          Notwithstanding
the foregoing, no adjustment will be made under this paragraph (e) in respect of: (i) the issuance of securities upon
the exercise or conversion of any Common Stock or Common Stock Equivalents issued by the Company prior to the date hereof provided
that such securities have not been amended since the date hereof to increase the number of such securities or to decrease the
exercise price, exchange price or conversion price of such securities, (ii) the grant of options, warrants, Common Stock
or other Common Stock Equivalents (but not including any amendments to such instruments) under any duly authorized Company stock
option, restricted stock plan or stock purchase plan whether now existing or hereafter approved by the Company and its stockholders
in the future, and the issuance of Common Stock in respect thereof, (iii) the issuance of securities in connection with a
Strategic Transaction, or (iv) the issuance of securities in a transaction described in paragraph (a) or (b) of this Section
9 (collectively, “Excluded Issuances”). For purposes of this paragraph, a “Strategic Transaction”
means a transaction or relationship in which (1) the Company issues shares of Common Stock to a Person that the Board of
Directors of the Company determined in good faith is, itself or through its Subsidiaries, an operating company in a business synergistic
with the business of the Company (or a shareholder thereof) and (2) the Company expects to receive benefits in addition to
the investment of funds, but shall not include (x) a transaction in which the Company is issuing securities primarily for
the purpose of raising capital or to a Person whose primary business is investing in securities or (y) issuances to lenders.
The term “Common Stock Equivalents” shall mean any securities of the Company which would entitle the holder
thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants
or other instrument that is at any time convertible into or exchangeable for, or otherwise entitles the holder thereof to receive,
Common Stock or other securities that entitle the holder to receive, directly or indirectly, Common Stock.


 



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(f)          Calculations.
All calculations under this Section 9 shall be made to the nearest cent or the nearest share, as applicable. The number of shares
of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company.


 


(g)          Notice
of Adjustments. Upon the occurrence of each adjustment pursuant to this Section 9, the Company at its expense will, at the
written request of the Holder, promptly compute such adjustment, in good faith, in accordance with the terms of this Warrant and
prepare a certificate setting forth such adjustment, including a statement of the adjusted Exercise Price and adjusted number or
type of Warrant Shares or other securities issuable upon exercise of this Warrant (as applicable), describing the transactions
giving rise to such adjustments and showing in reasonable detail the facts upon which such adjustment is based. Upon written request,
the Company will promptly deliver a copy of each such certificate to the Holder and to the Company’s transfer agent.


 


(h)          Notice
of Corporate Events. If, while this Warrant is outstanding, the Company (i) declares a dividend or any other distribution
of cash, securities or other property in respect of its Common Stock, including, without limitation, any granting of rights or
warrants to subscribe for or purchase any capital stock of the Company, (ii) authorizes or approves, enters into any agreement
contemplating or solicits stockholder approval for any Fundamental Transaction or (iii) authorizes the voluntary dissolution,
liquidation or winding up of the affairs of the Company, then, except if such notice and the contents thereof shall be deemed
to constitute material non-public information, the Company shall deliver to the Holder a notice of such transaction at least ten
(10) business days prior to the applicable record or effective date on which a Person would need to hold Common Stock in order
to participate in or vote with respect to such transaction; provided, however, that the failure to deliver such notice
or any defect therein shall not affect the validity of the corporate action required to be described in such notice.


 


10.          Payment of Exercise Price. The
Holder shall pay the Exercise Price in immediately available funds; provided, however, that if, on any Exercise Date there
is not an effective Registration Statement registering, or no current prospectus available for, the resale of the Warrant Shares
by the Holder, then the Holder may, in its sole discretion, satisfy its obligation to pay the Exercise Price through a “cashless
exercise”, in which event the Company shall issue to the Holder the number of Warrant Shares determined as follows:


 


X = Y [(A-B)/A]


 


where:


 



    	10



    	 



    

 


X = the number of Warrant Shares
to be issued to the Holder.


 


Y = the total number of Warrant
Shares with respect to which this Warrant is being exercised.


 


A = the average of the Closing Bid
Price of the shares of Common Stock (as reported by Bloomberg Financial Markets) for the five consecutive Trading Days ending on
the date immediately preceding the Exercise Date.


 


B = the Exercise Price then in
effect for the applicable Warrant Shares at the time of such exercise.


 


For purposes of this Warrant, “Closing
Bid Price” means, for any security as of any date, the last reported closing bid price for such security on the Trading
Market for such security, as reported by Bloomberg Financial Markets, or, if such Trading Market begins to operate on an extended
hours basis and does not designate the closing bid price, then the last bid price of such security prior to 4:00 p.m., New York
City time, as reported by Bloomberg Financial Markets, or if the foregoing do not apply, the last closing price of such security
in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg Financial Markets, or,
if no closing bid price is reported for such security by Bloomberg Financial Markets, the average of the bid prices of any market
makers for such security as reported in the "pink sheets" by Pink Sheets LLC. If the Closing Bid Price cannot be calculated
for a security on a particular date on any of the foregoing bases, the Closing Bid Price of such security on such date shall be
the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon
the fair market value of such security, then the Board of Directors of the Company shall use its good faith judgment to determine
the fair market value. The Board of Directors’ determination shall be binding upon all parties absent demonstrable error.
All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar
transaction during the applicable calculation period.


 


For purposes of Rule 144, it is intended, understood
and acknowledged that the provisions above permitting “cashless exercise” are intended, in part, to ensure that a full
or partial exchange of this Warrant pursuant to such provisions will qualify as a conversion, within the meaning of paragraph (d)(3)(ii)
of Rule 144, and the holding period for the Warrant Shares shall be deemed to have commenced as to such original Holder, on the
Original Issue Date.


 


11.            [Reserved.]



 


12.            No
Fractional Shares. No fractional Warrant Shares will be issued in connection with any exercise of this Warrant. In lieu of
any fractional shares that would otherwise be issuable, the number of Warrant Shares to be issued shall be rounded down to the
next whole number and the Company shall pay the Holder in cash the fair market value (based on the Closing Bid Price) for any
such fractional shares. 


 


13.            Notices.
Any and all notices or other communications or deliveries hereunder (including, without limitation, any Exercise Notice) shall
be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile number specified in the Purchase Agreement prior to 5:30 p.m., New York City time,
on a Trading Day, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile
at the facsimile number specified in the Purchase Agreement on a day that is not a Trading Day or later than 5:30 p.m., New York
City time, on any Trading Day, (iii) the Trading Day following the date of mailing, if sent by nationally recognized overnight
courier service specifying next business day delivery, or (iv) upon actual receipt by the Person to whom such notice is required
to be given, if by hand delivery. The address and facsimile number of a Person for such notices or communications shall be as
set forth in the Purchase Agreement unless changed by such Person by two Trading Days’ prior notice to the other Person(s)
in accordance with this Section 13. 


 



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14.           Warrant
Agent. The Company shall serve as warrant agent under this Warrant. Upon 15 days’ notice to the Holder, the Company may
appoint a new warrant agent. Any corporation into which the Company or any new warrant agent may be merged or any corporation resulting
from any consolidation to which the Company or any new warrant agent shall be a party or any corporation to which the Company or
any new warrant agent transfers substantially all of its corporate trust or shareholders services business shall be a successor
warrant agent under this Warrant without any further act. Any such successor warrant agent shall promptly cause notice of its succession
as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last address as shown
on the Warrant Register. 


 


15.           Miscellaneous.



 


(a)          No
Rights as a Stockholder.The Holder, solely in such Person's capacity as a holder of this Warrant, shall not be entitled
to vote or receive dividends or be deemed the holder of share capital of the Company for any purpose, nor shall anything contained
in this Warrant be construed to confer upon the Holder, solely in such Person's capacity as the Holder of this Warrant, any of
the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any
reorganization, issue of stock, reclassification of stock, consolidation, merger, amalgamation, conveyance or otherwise), receive
notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant
Shares which such Person is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this
Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities, whether such liabilities are asserted
by the Company or by creditors of the Company.


 


(b)          Authorized
Shares. (i) The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be
issued as provided herein without violation of any applicable law or regulation or of any requirements of the Trading Market upon
which the Common Stock may be listed.


 


(ii)          Except and to
the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending
its certificate of incorporation 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 actions
as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting
the generality of the foregoing, the Company will (a) not increase the par value of any Warrant Shares above the amount payable
therefor upon such exercise immediately prior to such increase in par value, (b) take all such action as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant,
and (c) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory
body having jurisdiction thereof as may be necessary to enable the Company to perform its obligations under this Warrant.


 



    	12



    	 



    

 


(iii)          Before taking
any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary
from any public regulatory body or bodies having jurisdiction thereof.


 


(c)          Successors
and Assigns.  Subject to the restrictions on transfer set forth in this Warrant, and compliance with applicable securities
laws, this Warrant may be assigned by the Holder. This Warrant may not be assigned by the Company without the written consent of
the Holder except to a successor in the event of a Fundamental Transaction. This Warrant shall be binding on and inure to the benefit
of the Company and the Holder and their respective successors and assigns. Subject to the preceding sentence, nothing in this Warrant
shall be construed to give to any Person other than the Company and the Holder any legal or equitable right, remedy or cause of
action under this Warrant.


 


(d)          Amendment
and Waiver. Except as otherwise provided herein, the provisions of the Warrants may be amended and the Company may take any
action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the
written consent of the Holder. 


 


(e)          Acceptance.
Receipt of this Warrant by the Holder shall constitute acceptance of and agreement to all of the terms and conditions contained
herein.


 


(f)          Governing
Law; Jurisdiction.        ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS WARRANT SHALL
BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES
OF CONFLICTS OF LAW THEREOF. EACH OF THE COMPANY AND THE HOLDER HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE
STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR
IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT
OF ANY OF THE TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING,
ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT. EACH OF THE COMPANY AND THE HOLDER HEREBY IRREVOCABLY
WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY
THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT
FOR NOTICES TO IT UNDER THE PURCHASE AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS
AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED
BY LAW. EACH OF THE COMPANY AND THE HOLDER HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY. 


 


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


 



    	13



    	 



    

 


(h)          Severability.       In
case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability
of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby, and the Company and
the Holder will attempt in good faith to agree upon a valid and enforceable provision which as closely as possible reflects the
intent of the parties hereto, and upon so agreeing, shall incorporate such substitute provision in this Warrant.


 



    	14



    	 



    

 


IN WITNESS WHEREOF, the Company has caused this
Warrant to be duly executed by its authorized officer as of the date first indicated above.


 


	 	TRANSGENOMIC, INC.
	 	 	 
	 	By:	 
	 	 	Name:  Craig J. Tuttle
	 	 	Title:    President/Chief Executive Officer


 



    	 



    	 



    

 


SCHEDULE 1


 


TRANSGENOMIC,
INC.


 


FORM OF EXERCISE NOTICE


 


[To be executed by the Holder to purchase shares
of Common Stock under the Warrant]


 


Ladies and Gentlemen:


 


(1)
            The
undersigned is the Holder of Warrant No. __________ (the “Warrant”) issued by Transgenomic, Inc., a Delaware corporation
(the “Company”). Capitalized terms used herein and not otherwise defined herein have the respective meanings set forth
in the Warrant. 


 


(2)
            The
undersigned hereby exercises its right to purchase __________ Warrant Shares pursuant to the Warrant.


  


(3)
            The
Holder intends that payment of the Exercise Price shall be made as (check one):


 


	 	€	Cash Exercise
	 	 	 
	 	€	“Cashless Exercise” under Section 10 of the Warrant


 


(4)
            If
the Holder has elected a Cash Exercise, the Holder shall pay the sum of $_______ in immediately available funds to the Company
in accordance with the terms of the Warrant.


 


(5)
            Pursuant
to this Exercise Notice, the Company shall deliver to the Holder Warrant Shares determined in accordance with the terms of the
Warrant. Please issue (check applicable box): 


 


	 	€	A certificate of certificates representing the Holder Warrant Shares in the name of the undersigned or in such other name as is specified below:
	 	 	 
	 	 	 


 


	 	€	The Holder Warrant Shares in electronic form to the following account:


 


	 	Name and Contact for Broker:	 	 


 


	 	Broker no:	 	 


 


	 	Account no:	 	 


 


	 	Account holder:	 	 


 



    	 



    	 



    

 


	Dated:_______________, _____
	 
	Name of Holder:  ___________________________


 


	By:	 	 
	Name:	 	 
	Title: 	 	 


(Signature must conform in all respects to name of Holder as specified
on the face of the Warrant)


 



    	 



    	 



    

 


SCHEDULE 2


 


TRANSGENOMIC,
INC.


 


FORM OF ASSIGNMENT


 


[To be completed and executed by the Holder
only upon transfer of the Warrant]


 


FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers unto                             
(the “Transferee”) the right represented by the within Warrant to purchase                 
shares of Common Stock of Transgenomic, Inc., a Delaware corporation (the “Company”) to which the within Warrant relates
and appoints                             
attorney to transfer said right on the books of the Company with full power of substitution in the premises. In connection therewith,
the undersigned represents, warrants, covenants and agrees to and with the Company that:


 


	(a)	the offer and sale of the Warrant contemplated hereby is being made in compliance with Section 4(1) of the United States Securities Act of 1933, as amended (the “Securities Act”), or another valid exemption from the registration requirements of Section 5 of the Securities Act and in compliance with all applicable securities laws of the states of the United States;
	 	 
	(b)	the undersigned has not offered to sell the Warrant by any form of general solicitation or general advertising, including, but not limited to, any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, and any seminar or meeting whose attendees have been invited by any general solicitation or general advertising;
	 	 
	(c)	the undersigned has read the Transferee’s investment letter included herewith, and to its actual knowledge, the statements made therein are true and correct; and
	 	 
	(d)	the undersigned understands that the Company may condition the transfer of the Warrant contemplated hereby upon the delivery to the Company by the undersigned or the Transferee, as the case may be, of a written opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that such transfer may be made without registration under the Securities Act and under applicable securities laws of the states of the United States.


 


	Dated:             ,     	 	 
	 	 	(Signature must conform in all respects to name of holder as specified on the face of the Warrant)
	 	 	 
	 	 	 
	 	 	Address of Transferee
	In the presence of: