FIRST AMENDMENT TO


LOAN AND SECURITY AGREEMENT


(TERM LOAN AND REVOLVING LOAN)


 


This FIRST AMENDMENT
TO LOAN AND SECURITY AGREEMENT (this “Amendment”), entered into on August 2, 2013 (the “Execution
Date”) with an effective date as of June 30, 2013 (the “Effective Date”), is entered into by and among
THIRD SECURITY SENIOR STAFF 2008 LLC, as administrative agent (the “Agent”), and a lender, the other
lenders party hereto (collectively, the “Lenders”), and TRANSGENOMIC, INC., a Delaware corporation (the
“Borrower”).


 


WHEREAS, the
Borrower, the Agent and the Lenders are party to that certain Loan and Security Agreement (Term Loan and Revolving Loan), dated
as of March 13, 2013 (as amended, restated, supplemented, or otherwise modified from time to time, the “Loan Agreement”),
whereby the Lenders have extended to the Borrower a loan facility pursuant to the Loan Agreement on the terms and subject to the
conditions contained therein; and


 


WHEREAS, the
Borrower has requested that the Agent and the Lenders, and the Agent and the Lenders have agreed to, subject to the terms and conditions
set forth in this Amendment, amend certain provisions of the Loan Agreement, effective as of the Effective Date.


 


NOW, THEREFORE,
in consideration of the foregoing premises, and other good and valuable consideration, the receipt and legal sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:


 


1.          Definitions.
Unless otherwise defined herein, capitalized terms used herein shall have the meanings assigned to them in the Loan Agreement.


 


2.          Amendments
to the Loan Agreement. Effective as of the Effective Date, the Loan Agreement is amended as follows:


 


(a)          Section
2.8(a) of the Loan Agreement is amended by deleting the existing text of such subsection in its entirety and inserting, in lieu
thereof, the following:


 


Advances.
Subject to Section 2.8(b), the principal amount outstanding under the Revolving Line shall accrue interest at a floating per annum
rate equal to the greater of (i) (x) the Prime Rate plus (y) three percent (3.00%) and (ii) 6.25%, which interest shall
be payable monthly in accordance with Section 2.8(d) below.


 


(b)          Section
6.2(a) of the Loan Agreement is amended by deleting the existing text of such subsection in its entirety and inserting, in lieu
thereof, the following:


  


Monthly Financial Statements. As soon as available, but no later
than thirty (30) days after the last day of each month (or thirty-three (33) days after the last day of the month of June 2013),
a company prepared consolidated balance sheet and income statement covering Borrower’s and each of its Subsidiary’s
operations for such month, certified by a Responsible Officer and in a form acceptable to the Lenders (the “Monthly Financial
Statements”);


 






    	 



    	 



    

 


(c)          Section
6.2(b) of the Loan Agreement is amended by deleting the existing text of such subsection in its entirety and inserting, in lieu
thereof, the following:


 


Monthly
Compliance Certificate. Within thirty (30) days after the last day of each month (or thirty-three (33) days after the last
day of the month of June 2013) and together with the Monthly Financial Statements, a duly completed Compliance Certificate signed
by a Responsible Officer, certifying that as of the end of such month, Borrower was in full compliance with all of the terms and
conditions of this Agreement, and setting forth calculations showing compliance with the financial covenants set forth in this
Agreement and such other information as the Lenders may reasonably request, together with a statement that at the end of such month
there were no held checks;


 


(d)          Section
6.9(b) of the Loan Agreement is amended by deleting the existing text of such subsection in its entirety and inserting, in lieu
thereof, the following:


 


Minimum
Net Revenue. Achieve at least the amounts set forth below during the applicable periods.


 


	Six Month Period Ending	Net Revenue
	March 31, 2013	$14,666,000
	April 30, 2013	$15,275,000
	May 31, 2013	$14,955,000
	June 30, 2013	$14,679,000
	July 31, 2013	$14,296,000
	August 31, 2013	$14,096,000
	September 30, 2013	$13,806,000
	October 31, 2013	$13,724,000
	November 30, 2013	$14,362,000
	December 31, 2013	$15,329,000
	January 31, 2014	$16,203,000
	February 28, 2014	$16,877,000
	March 31, 2014	$17,075,000
	April 30, 2014	$17,230,000
	May 31, 2014	$17,238,000
	June 30, 2014	$17,102,000
	July 31, 2014	$17,313,000
	August 31, 2014	$17,525,000
	September 30, 2014	$17,807,000
	October 31, 2014	$18,025,000
	November 30, 2014	$18,244,000
	December 31, 2014	$18,446,000


 


For each monthly period
in each fiscal year ending thereafter, the minimum revenue, measured on a trailing six-month basis, shall be based on an amount
that is equal to the greater of (i) eighty-five percent (85%) of the board approved Annual Financial Projections applicable to
such monthly period in such fiscal year and (ii) $18,446,000.


 






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3.          Conditions
Precedent. The effectiveness of this Amendment is subject to the satisfaction of the following conditions precedent:


 


(a)          receipt
by the Agent of a copy of this Amendment, duly executed and delivered by the Borrower and the Required Lenders;


 


(b)          receipt
by the Agent of a copy of (i) a company prepared consolidated balance sheet and income statement covering Borrower’s and
each of its Subsidiary’s operations for the month of June 2013, certified by a Responsible Officer and in a form acceptable
to the Lenders and (ii) a duly completed Compliance Certificate signed by a Responsible Officer, certifying that as of the end
of the month of June 2013, Borrower was in full compliance with all of the terms and conditions of the Loan Agreement, and setting
forth calculations showing compliance with the financial covenants set forth in the Loan Agreement and such other information as
the Lenders may reasonably request, together with a statement that at the end of such month there were no held checks;


 


(c)          receipt
by the Agent of any other documents or agreements reasonably requested by the Agent in connection with the transactions contemplated
by this Amendment;


 


(d)          the
truth and accuracy of the representations and warranties contained in Section 5 of this Amendment; and


 


(e)          receipt
by the Lenders and the Agent of any fees and expenses due and payable on or before the Execution Date under the Loan Agreement
or this Amendment.


 


4.          Reaffirmation.
The Borrower hereby reaffirms each of the agreements, covenants, and undertakings set forth in the Loan Agreement and each and
every other Loan Document as of the Execution Date as if the Borrower was making said agreements, covenants and undertakings as
of the Execution Date.


 


5.          Representations,
Warranties, Covenants and Acknowledgments. To induce the Agent and Lenders to enter into this Amendment, the Borrower hereby:


 


(a)          represents
and warrants that (i) as of the Execution Date, all of the representations and warranties made or deemed to be made under the Loan
Documents are true and correct in all material respects (other than any representation or warranty that is qualified by materiality
or Material Adverse Effect, in which case such representation or warranty is true and correct in all respects) on and as of the
Execution Date to the same extent as though made on and as of the Execution Date, except to the extent such representations and
warranties specifically relate to an earlier date, in which case such representations and warranties were true and correct in all
material respects (other than any representation or warranty that is qualified by materiality or Material Adverse Effect, in which
case such representation or warranty was true and correct in all respects) on and as of such earlier date; (ii) as of the Effective
Date and the Execution Date, after giving effect to the terms of this Amendment, there exists no Default or Event of Default under
the Loan Agreement or any of the other Loan Documents; (iii) the Borrower has the corporate power and is duly authorized to enter
into, deliver and perform this Amendment; and (iv) this Amendment is the legal, valid and binding obligation of the Borrower enforceable
against the Borrower in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability;


 






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(b)          acknowledges
and agrees that (i) this Amendment does not and shall not create (nor shall the Borrower or any of its Subsidiaries rely upon the
existence of or claim or assert that there exists) any obligation of the Agent or any Lender to consider or agree to any further
consent, waiver or amendment with respect to any Loan Document and, in the event that the Agent or any Lender subsequently agrees
to consider any further consent, waiver or amendment with respect to any Loan Document, neither this Amendment nor any other conduct
of the Agent or any Lender shall be of any force or effect on the Agent’s or such Lender’s consideration or decision
with respect thereto, and neither the Agent nor any Lender shall have any further obligation whatsoever to consider or agree to
any further consent, waiver or amendment with respect to any Loan Document; and (ii) except as expressly set forth in this Amendment,
the Agent and each Lender reserves all of their respective rights pursuant to the Loan Agreement and all other Loan Documents;


 


(c)          further
acknowledges and agrees that the Agent’s and Lenders’ agreement to amend the specific matters addressed in this Amendment,
do not and shall not create (nor shall the Borrower or any of its Subsidiaries rely upon the existence of or claim or assert that
there exists) any obligation of the Agent or any Lender to consider or agree to any further waivers, consents or amendments and,
in the event that the Agent or any Lender subsequently agrees to consider any further waivers, consents or amendments, neither
this Amendment nor any other conduct of the Agent or any Lender shall be of any force or effect on the Agent’s or any Lender’s
consideration or decision with respect to any such requested consent;


 


(d)          further
acknowledges and agrees that no right of offset, defense, counterclaim, claim, cause of action or objection in favor of the Borrower
against any Lender exists arising out of or with respect to (i) this Amendment, the Loan Agreement or any other Loan Document,
or (ii) any other documents now or heretofore evidencing, securing or in any way relating to the foregoing; and


 


(e)          further
acknowledges and agrees that this Amendment shall be deemed a Loan Document for all purposes under the Loan Agreement and the other
Loan Documents.


 


6.          Effect
of Non-Compliance. To the extent any representation or warranty made herein shall be untrue in any material respect, such occurrence
shall be deemed an Event of Default pursuant to the terms of the Loan Agreement and the other Loan Documents.


 






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7.          Release;
Indemnitees.


 


(a)          In
further consideration of the execution of this Amendment by the Agent and each Lender, the Borrower, individually and on behalf
of its successors (including, without limitation, any trustees acting on behalf of the Borrower and any debtor-in-possession with
respect to the Borrower), assigns, subsidiaries and Affiliates, hereby forever releases the Agent, each Lender and their respective
successors, assigns, parents, subsidiaries, Affiliates, officers, employees, directors, agents and attorneys (collectively, the
“Releasees”) from any and all debts, claims, demands, liabilities, responsibilities, disputes, causes, damages,
actions and causes of actions (whether at law or in equity) and obligations of every nature whatsoever, whether liquidated or unliquidated,
whether known or unknown, matured or unmatured, fixed or contingent (collectively, “Claims”) that the Borrower
may have against the Releasees which arise from or relate to any actions which the Releasees may have taken or omitted to take
in connection with the Loan Agreement or the other Loan Documents prior to the Effective Date, including, without limitation, with
respect to the Obligations, any Collateral, the Loan Agreement, any other Loan Document and any third parties liable in whole or
in part for the Obligations. This provision shall survive and continue in full force and effect whether or not the Borrower shall
satisfy all other provisions of this Amendment, the Loan Documents or the Loan Agreement, including payment in full of all Obligations.


 


(b)          The
Borrower hereby further agrees to indemnify and hold the Releasees harmless with respect to any and all liabilities, obligations,
losses, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever incurred by the
Releasees, or any of them, whether direct, indirect or consequential, as a result of or arising from or relating to any proceeding
by, or on behalf of any Person, including, without limitation, officers, directors, agents, trustees, creditors, partners or shareholders
of the Borrower or any parent, Subsidiary or Affiliate of the Borrower, whether threatened or initiated, asserting any claim for
legal or equitable remedy under any statutes, regulation or common law principle arising from or in connection with the negotiation,
preparation, execution, delivery, performance, administration and enforcement of this Amendment. The foregoing indemnity shall
survive the payment in full of the Obligations and the termination of this Amendment, the Loan Agreement and the other Loan Documents.


 


8.          Effect;
Relationship of Parties. Except as expressly modified hereby, the Loan Agreement and each other Loan Document shall be and
remain in full force and effect as originally written, and shall constitute the legal, valid, binding and enforceable obligations
of the Borrower to the Agent and Lenders. The relationship of the Agent and Lenders, on the one hand, and the Borrower, on the
other hand, has been and shall continue to be, at all times, that of creditor and debtor and not as joint venturers or partners.
Nothing contained in this Amendment, any instrument, document or agreement delivered in connection herewith or in the Loan Agreement
or any of the other Loan Documents shall be deemed or construed to create a fiduciary relationship between or among the parties.


 


9.          Expenses.
The Borrower shall pay the Agent all of its actual, documented and reasonable costs and expenses in connection with the preparation,
negotiation, execution and enforcement of this Amendment in accordance with the Loan Agreement (including, without limitation,
all actual, documented and reasonable fees, expenses and disbursements of counsel to the Agent).


 






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10.          Miscellaneous.
This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of
which, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute
but one and the same instrument. This Amendment shall be binding upon and inure to the benefit of the successors and permitted
assigns of the parties hereto. California law governs this Amendment, without regard to principles of conflicts of law. This Amendment
embodies the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes
all prior oral or written negotiations, agreements and understandings of the parties with respect to the subject matter hereof.
Time is of the essence of this Amendment.


 


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IN WITNESS WHEREOF,
the parties hereto have caused this Amendment to be executed on the Execution Date, effective as of the Effective Date.


 





	BORROWER:	 
	 	 
	TRANSGENOMIC, INC.	 
	 	 	 
	By:	/s/ M.P Colonnese	 
	Name:	 M.P Colonnese	 
	Title:	Executive Vice President	 
	 	 	 
	AGENT:	 
	 	 	 
	THIRD SECURITY SENIOR STAFF 2008 LLC	 
	As Agent for Lenders	 
	 	 	 
	 	 	 
	By	/s/ Randal J. Kirk	 
	Name:	Randal J. Kirk	 
	Title:	Manager, Third Security, LLC, which is	 
	 	the Manager of Third Security Senior	 
	 	Staff 2008 LLC	 
	 	 	 
	LENDERS:	 
	 	 	 
	THIRD SECURITY SENIOR STAFF 2008 LLC	 
	 	 	 
	By 	/s/ Randal J. Kirk	 
	 	Randal J. Kirk	 
	 	Manager, Third Security, LLC, which is the	 
	 	Manager of Third Security Senior Staff 2008 LLC	 
	 	 	 
	THIRD SECURITY STAFF 2010 LLC	 
	 	 	 
	By	/s/ Randal J. Kirk	 
	 	Randal J. Kirk	 
	 	Manager, Third Security, LLC, which is the	 
	 	Manager of Third Security Staff 2010 LLC	 
	 	 	 
	THIRD SECURITY INCENTIVE 2010 LLC	 
	 	 	 
	By	/s/ Randal J. Kirk	 
	 	Randal J. Kirk	 
	 	Manager, Third Security, LLC, which is the	 
	 	Manager of Third Security Incentive 2010 LLC	 




 





[Signature Page to First Amendment]