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                                                                    EXHIBIT 10.3

            VOID AFTER 3:30 P.M., CENTRAL TIME, ON [______], [______]

                        WARRANT TO PURCHASE COMMON SHARES

                               TRANSGENOMIC, INC.

         This is to certify that, for value received, [HOLDER], [ADDRESS] (the
"Holder"), is entitled to purchase, subject to the provisions of this Warrant,
from TRANSGENOMIC, INC. (the "Company"), a Delaware corporation, at any time
until 3:30 p.m., Central time, on [ ], [ ] ("Expiration Date"), [ ] Common
Shares of the Company at a purchase price per share of $5.00 during the period
this Warrant is exercisable. The number of Common Shares to be received upon the
exercise of this Warrant and the price to be paid for a Common Share may be
adjusted from time to time as hereinafter set forth. The purchase price of a
Common Share in effect at any time and as adjusted from time to time is
hereinafter sometimes referred to as the "Exercise Price." This Warrant is or
may be one of a series of warrants identical in form issued by the Company to
purchase an aggregate [ ] of Common Shares of the Company and the term
"Warrants" as used herein means all such Warrants (including this Warrant). The
Common Shares, as adjusted from time to time, underlying the Warrants are
hereinafter sometimes referred to as "Warrant Shares" and include all Common
Shares that have been issued upon the exercise of the Warrants and all unissued
Common Shares underlying the Warrants.

         SECTION 1. EXERCISE OF WARRANT. This Warrant may be exercised in
whole or in part at any time or from time to time until the Expiration Date
or if the Expiration Date is a day on which banking institutions are
authorized by law to close, then on the next succeeding day which shall not
be such a day, by presentation and surrender hereof to the Company or at the
office of its stock transfer agent, if any, with the Purchase Form annexed
hereto duly executed and accompanied by payment of the Exercise Price for the
number of shares specified in such Form, together with all federal and state
taxes applicable upon such exercise. The Company agrees not to merge,
reorganize or take any action that would terminate this Warrant unless
provisions are made as part of such merger, reorganization or other action
which would provide the holders of this Warrant with an equivalent of this
Warrant as specified in this Section. The Company agrees to provide notice to
the Holder that any tender offer is being made for the Company's Common
Shares no later than three business days after the day the Company becomes
aware that any tender offer is being made for outstanding Common Shares of
the Company. If this Warrant should be exercised in part only, the Company
shall, upon surrender of this Warrant for cancellation, execute and deliver a
new Warrant evidencing the right of the Holder to purchase the balance of the
Common Shares purchasable hereunder. Upon receipt by the Company of this
Warrant at the office of the Company or at the office of the Company's stock
transfer agent, in proper form for exercise and accompanied by the Purchase
Form and the Exercise Price, the Holder shall be deemed to be the holder of
record of the Common Shares issuable upon such exercise, notwithstanding that
the stock transfer books of the Company shall then be closed or

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that certificates representing such Common Shares shall not then be actually
delivered to the Holder.

         SECTION 2. RESERVATION OF SHARES. The Company hereby agrees that at
all times there shall be reserved for issuance and/or delivery upon exercise
of this Warrant such number of Common Shares as shall be required for
issuance or delivery upon exercise of this Warrant.

         SECTION 3. FRACTIONAL SHARES. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. With respect to any fraction of a Common Share called for upon any
exercise hereof, the Company shall, upon receipt by the Company or the
Company's stock transfer agent of the Exercise Price on such fractional
share, pay to the Holder an amount in cash equal to such fraction multiplied
by the current market value of such fractional share, determined as follows:

                  (a) If the Common Shares are listed on a national securities
         exchange or a foreign exchange, are admitted to unlisted trading
         privileges on such an exchange or are listed for trading on a trading
         system of the National Association of Securities Dealers, Inc. ("NASD")
         such as The Nasdaq SmallCap Market ("SCM") or the Nasdaq National
         Market ("NNM") or the OTC Bulletin Board, then the current value shall
         be the last reported sale price of the Common Shares on such an
         exchange or system on the last business day prior to the date of
         exercise of this Warrant or if no such sale is made on such day, the
         average of the closing bid prices for the Common Shares for such day on
         such exchange or such system shall be used;

                  (b) If the Common Shares are not so listed on such exchange or
         system or admitted to unlisted trading privileges, the current value
         shall be the average of the last reported bid prices reported by the
         National Quotation Bureau, Inc. on the last business day prior to the
         date of the exercise of this Warrant; or

                  (c) If the Common Shares are not so listed or admitted to
         unlisted trading privileges and if bid prices are not so reported, the
         current value shall be an amount, not less than book value, determined
         in such reasonable manner as may be prescribed by the board of
         directors of the Company.

         SECTION 4. EXCHANGE, ASSIGNMENT OR LOSS OF WARRANT. This Warrant is
exchangeable, without expense, at the option of the Holder, upon presentation
and surrender hereof to the Company or at the office of its stock transfer
agent, if any, for other Warrants of different denominations entitling the
Holder thereof to purchase (under the same terms and conditions as provided
by this Warrant) in the aggregate the same number of Common Shares
purchasable hereunder. This Warrant may not be sold, transferred, assigned or
hypothecated except in compliance with federal and state securities laws. Any
transfer or assignment shall be made by surrender of this Warrant to the
Company or at the office of its stock transfer agent, if any, with the
Assignment Form annexed hereto duly executed and with funds sufficient to pay
any transfer tax; whereupon the Company shall, without charge, execute and
deliver a new Warrant in the name of the assignee named in such instrument of
assignment and this Warrant shall promptly be canceled. This Warrant may be
divided or combined with other Warrants which carry the same

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rights upon presentation hereof at the office of the Company or at the office of
its stock transfer agent, if any, together with a written notice specifying the
names and denominations in which new Warrants are to be issued and signed by the
Holder hereof. The term "Warrant" as used herein includes any warrants issued in
substitution for or replacement of this Warrant or into which this Warrant may
be divided or exchanged. Upon receipt by the Company of evidence satisfactory to
it of the loss, theft, destruction or mutilation of this Warrant and (in the
case of loss, theft or destruction) of reasonably satisfactory indemnification,
and upon surrender and cancellation of this Warrant, if mutilated, the Company
will execute and deliver a new Warrant of like tenor and date. Subject to such
right of indemnification, any such new Warrant executed and delivered shall
constitute an additional contractual obligation on the part of the Company,
whether or not this Warrant so lost, stolen, destroyed or mutilated shall be at
any time enforceable by anyone.

         SECTION 5. RIGHTS OF THE HOLDER. The Holder shall not, by virtue
hereof, be entitled to any rights of a shareholder in the Company, either at
law or equity, and the rights of the Holder are limited to those expressed in
the Warrant and are not enforceable against the Company except to the extent
set forth herein.

         SECTION 6.   ADJUSTMENT PROVISIONS.

                  (a) ADJUSTMENTS OF THE EXERCISE PRICE.

                           (i) If the Company subdivides its outstanding Common
                  Shares into a greater number of Common Shares, the Exercise
                  Price in effect immediately prior to such subdivision shall be
                  proportionately reduced. Conversely, if the Company combines
                  its outstanding Common Shares into a lesser number of Common
                  Shares, the Exercise Price in effect immediately prior to such
                  combination -- shall be proportionally increased. In case of a
                  subdivision or combination, the adjustment of the Exercise
                  Price shall be made as of the effective date of the applicable
                  event. A distribution on Common Shares, including a
                  distribution of Convertible Securities, to shareholders of the
                  Company on a pro rata basis shall be considered a subdivision
                  of Common Shares for the purposes of this subsection (a)(i) of
                  this Section, except that the adjustment will be made as of
                  the record date for such distribution and any such
                  distribution of Convertible Securities shall be deemed to be a
                  distribution of the Common Shares underlying such Convertible
                  Securities.

                           (ii) If the Company shall at any time distribute or
                  cause to be distributed to its shareholders, on a pro rata
                  basis, cash, assets or securities of any entity other than the
                  Company, then the Exercise Price in effect immediately prior
                  to such distribution shall automatically be reduced by an
                  amount determined by dividing (x) the amount (if cash) or the
                  value (if assets or securities) of the holders of Warrants (as
                  such term is defined in the first paragraph hereof) pro rata
                  share of such distribution determined assuming that all
                  holders of Warrants had exercised their Warrants on the day
                  prior to such distribution, by (y) the number of

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                  Common Shares issuable upon the exercise of Warrants (as such
                  term is defined in the first paragraph hereof) by the holders
                  thereof on the day prior to such distribution.

                  (b) NO ADJUSTMENT FOR SMALL AMOUNTS. Anything in this Section
         to the contrary notwithstanding, the Company shall not be required to
         give effect to any adjustment in the Exercise Price unless and until
         the net effect of one or more adjustments, determined as above
         provided, shall have required a change of the Exercise Price by at
         least one cent, but when the cumulative net effect of more than one
         adjustment so determined shall be to change the actual Exercise Price
         by at least one cent, such change in the Exercise Price shall thereupon
         be given effect.

                  (c) NUMBER OF SHARES ADJUSTED. Upon any adjustment of the
         Exercise Price, the Holder of this Warrant shall thereafter (until
         another such adjustment) be entitled to purchase, at the new Exercise
         Price, the number of Common Shares, calculated to the nearest full
         share, obtained by multiplying the number of Common Shares initially
         issuable upon exercise of this Warrant by the Exercise Price specified
         in the first paragraph hereof and dividing the product so obtained by
         the new Exercise Price.

                  (d) DEFINITIONS.

                           (i) Whenever reference is made in this Section to the
                  distribution of Common Shares, the term "Common Shares" shall
                  mean the Common Shares of the Company authorized as of the
                  date hereof and any other class of stock ranking on a parity
                  with such Common Shares. However, subject to the provisions of
                  Section (ii) hereof, Common Shares issuable upon exercise
                  hereof shall include only Common Shares of the class
                  designated as Common Shares of the Company as of the date
                  hereof.

                           (ii) Whenever reference is made in this Section to
                  the distribution of Convertible Securities, the term
                  "Convertible Securities" shall mean options or Warrants or
                  rights for the purchase of Common Shares of the Company or for
                  the purchase of any stock or other securities convertible into
                  or exchangeable for Common Shares of the Company.

                  (e) ANTIDILUTION PROVISIONS.

                           (i) ADJUSTMENTS OF EXERCISE PRICE. If the Company
                  should at any time or from time to time hereafter issue or
                  sell any of its Common Shares (other than Common Shares
                  outstanding on completion of the Company's private offering of
                  a maximum of 2,000,000 Common Shares pursuant to the Company's
                  Private Placement Memorandum dated July 3, 1997, as amended
                  February 1998 and Supplemented June 1998 ("Memorandum") and
                  other than Common Shares issued upon the conversion or
                  exercise of Convertible Securities or warrants and options
                  described in the Memorandum as outstanding or issuable)
                  without consideration or for a consideration per share less
                  than the Exercise Price in effect

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                  immediately prior to the time of such issue or sale, then
                  forthwith upon such issue or sale, the Exercise Price shall be
                  automatically adjusted to a price (computed to the nearest
                  cent) determined by dividing (A) the sum of (x) the number of
                  Common Shares outstanding immediately prior to such issue or
                  sale multiplied by the Exercise Price in effect immediately
                  prior to such issue or sale and (y) the consideration, if any,
                  received by the Company upon such issue or sale, by (B) the
                  total number of Common Shares outstanding immediately after
                  such issue or sale. For purposes of this subsection (e)(i),
                  the following provisions (1) and (2) shall also be applicable:

                                    (1) RIGHTS, OPTIONS OR WARRANTS. In case at
                           any time hereafter the Company shall in any manner
                           grant any right to subscribe for or to purchase, or
                           any option or warrant for the purchase of Common
                           Shares or for the purchase of any stock or securities
                           convertible into or exchangeable for Common Shares
                           (such convertible or exchangeable stock or securities
                           being hereinafter referred to as the "Underlying
                           Convertible Securities") and if the minimum price per
                           share for which Common Shares are issuable, pursuant
                           to such rights, options, warrants or upon conversion
                           or exchange of such Underlying Convertible Securities
                           (determined by dividing (a) the total amount, if any,
                           received or receivable by the Company as
                           consideration for the granting of such rights,
                           options or warrants plus the minimum aggregate amount
                           of additional consideration payable to the Company
                           upon the exercise of such rights, options or warrants
                           under the terms of such rights, options or warrants
                           at the time of making such computation, plus, in
                           minimum aggregate amount of additional consideration,
                           if any, payable upon the conversion or exchange
                           thereof under the terms of such Underlying
                           Convertible Securities at the time of making such
                           computation, by (b) the total maximum number of
                           Common Shares issuable pursuant to such rights,
                           options or warrants or upon the conversion or
                           exchange of the total maximum amount of such
                           Underlying Convertible Securities issuable upon the
                           exercise of such rights, options or warrants under
                           the terms of such rights, options, warrants or
                           Underlying Convertible Securities at the time of
                           making such computation) shall be less than the
                           Exercise Price in effect immediately prior to the
                           time of the granting of such rights or options, then
                           the total maximum number of Common Shares issuable
                           pursuant to such rights, options, warrants or upon
                           conversion or exchange of the total maximum amount of
                           such Underlying Convertible Securities issuable upon
                           the exercise of such rights, options or warrants
                           under the terms of such rights, options warrants or
                           Underlying Convertible Securities at the time of
                           making such computation shall (as of the date of
                           granting of such rights, options or warrants) be
                           deemed to be outstanding and to have been issued for
                           said price per share as so determined, provided that
                           no further adjustment of the Exercise Price shall be
                           made upon the actual issue of Common Shares so deemed
                           to have been issued unless the price per share

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                           received by the Company upon the actual issuance of
                           Common Shares so deemed to be issued differs from the
                           price per share which was last used to adjust the
                           Exercise Price or unless by the terms of such rights,
                           options or warrants or Underlying Convertible
                           Securities the price per share which the Company will
                           receive upon any such issuance of Common Shares
                           differs from the price per share which was last used
                           to adjust the Exercise Price, in either of which
                           events the Exercise Price shall be adjusted upon the
                           occurrence of either such event to reflect the new
                           price per share of Common Stock, and further provided
                           that, upon the expiration of such rights (including
                           rights to convert or exchange), options or warrants
                           (i) the number of shares of Common Stock deemed to
                           have been issued and outstanding by reason of the
                           fact that they were issuable pursuant to such rights,
                           options or warrants (including rights to convert or
                           exchange) that were not exercised shall no longer be
                           deemed to be issued and outstanding and (ii) the
                           Exercise Price shall forthwith be adjusted to the
                           price which would have prevailed had all adjustments
                           been made on the basis of the issue only of the
                           Common Shares actually issued upon the exercise of
                           such rights, options or warrants or upon conversion
                           or exchange of such Underlying Convertible
                           Securities. Such adjustments upon expiration shall
                           have no effect on Warrants exercised prior to such
                           expiration.

                                    (2) CONVERTIBLE SECURITIES. If the Company
                           shall in any manner issue or sell any Convertible
                           Securities other than the rights, options or warrants
                           described in subsection or (e)(i)(1) hereof and if
                           the minimum price per share for which Common Shares
                           are issuable upon conversion or exchange of such
                           Convertible Securities (determined by dividing (a)
                           the total amount received or receivable by the
                           Company as consideration for the issue or sale of
                           such Convertible Securities, plus the aggregate
                           amount of additional consideration, if any, payable
                           to the Company upon the conversion or exchange
                           thereof under the terms of such Convertible
                           Securities at the time of making such computation, by
                           (b) the total maximum number of Common Shares
                           issuable upon the conversion or exchange of all such
                           Convertible Securities under the terms of such
                           Convertible Securities at the time of making such
                           computation) 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 Common Shares
                           issuable upon conversion or exchange of all such
                           Convertible Securities at the time of making such
                           computation shall (as of the date of the issue or
                           sale of such Convertible Securities) be deemed to be
                           outstanding and to have been issued for said price
                           per share as so determined, provided that no further
                           adjustment of the Exercise Price shall be made upon
                           the actual issue of Common Shares so deemed to have
                           been issued unless the price per share received by
                           the Company upon the actual issuance of Common Shares
                           so deemed to be issued differs from the price per
                           share which was last used to adjust the Exercise
                           Price or unless by the terms of such

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                           Convertible Securities the price per share which the
                           Company will receive upon any such issuance of Common
                           Shares differs from the price per share which was
                           last used to adjust the Exercise Price, in either of
                           which events the Exercise Price shall be adjusted
                           upon the occurrence of either such event to reflect
                           the new price per share of Common Shares, and further
                           provided that, if any such issue or sale of such
                           Convertible Securities is made upon exercise of any
                           right to subscribe for or to purchase or any option
                           to purchase any such Convertible Securities for which
                           an adjustment of the Exercise Price has been or is to
                           be made pursuant to the provisions of subsection
                           (e)(i)(1) then no further adjustment of the Exercise
                           Price shall be made by reason of such issue or sale
                           unless the price per share received by the Company
                           upon the conversion or exchange of such Convertible
                           Securities when actually issued differs from the
                           price which was last used to adjust the Exercise
                           Price or unless by the terms of such Convertible
                           Securities the price per share which the Company will
                           receive upon any such issuance of Common Shares upon
                           conversion or exchange of such Convertible Securities
                           differs from the price per share which was last used
                           to adjust the Exercise Price, in either of which
                           events the Exercise Price shall be adjusted upon the
                           occurrence of either of such events to reflect the
                           new price per share of Common Shares, and further
                           provided that, upon the termination of the right to
                           convert or to exchange such (i) the number of Common
                           Shares deemed to have been issued and outstanding by
                           reason of the fact that they were issuable upon
                           conversion or exchange of any such Convertible
                           Securities, which were not so converted or exchanged,
                           shall no longer be deemed to be issued and
                           outstanding, and (ii) the Exercise Price shall
                           forthwith be adjusted to the price which would have
                           prevailed had all adjustments been made on the basis
                           of the issue only of the number of Common Shares
                           actually issued upon conversion or exchange of such
                           Convertible Securities. Such adjustments upon
                           expiration shall have no effect on Warrants exercised
                           prior to such expiration.

                           (ii) DETERMINATION OF ISSUE PRICE. In case any Common
                  Shares or Convertible Securities shall be issued for cash, the
                  consideration received therefor, which shall be the gross
                  sales price for such security without deducting therefrom any
                  commission or other expenses paid or incurred by the Company
                  for any underwriting of, or otherwise in connection with, the
                  issuance thereof, shall be deemed to be the amount received by
                  the Company therefor. In case any Common Shares or Convertible
                  Securities shall be issued for a consideration part or all of
                  which shall be other than cash, then, for the purpose of this
                  subsection (e), the Board of Directors of the Company shall
                  determine the fair value of such consideration, irrespective
                  of accounting treatment, and such Common Shares or Convertible
                  Securities shall be deemed to have been issued for an amount
                  of cash equal to the value so determined by the Board of
                  Directors. The reclassification of securities other than
                  Common Shares into securities,

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                  including Common Shares, shall be deemed to involve the
                  issuance for a consideration other than cash of such Common
                  Shares immediately prior to the close of business on the date
                  fixed for the determination of security holders entitled to
                  receive such Common Shares. In case any Common Shares or
                  Convertible Securities shall be issued together with other
                  stock or securities or other assets of the Company for
                  consideration, the Board of Directors of the Company shall
                  determine what part of the consideration so received is to be
                  deemed to be consideration for the issue of such Common Shares
                  or Convertible Securities.

                           (iii) DETERMINATION OF DATE OF ISSUE. In case the
                  Company shall take a record of the holders of Common Shares
                  for the purpose of entitling them (A) to receive a dividend or
                  other distribution payable in Common Shares or in Convertible
                  Securities or (B) to subscribe for or purchase Common Shares
                  or Convertible Securities, then such record date shall be
                  deemed to be the date of the issue or sale of the Common
                  Shares 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.

                           (iv) TREASURY SHARES. For the purpose of this Section
                  (f), Common Shares at any relevant time owned or held by, or
                  for the account of, the Company shall not be deemed
                  outstanding.

         SECTION 7. OFFICER'S CERTIFICATE. Whenever the Exercise Price shall be
adjusted as required by the provisions of Section 6 hereof, the Company shall
forthwith file in the custody of its Secretary or an Assistant Secretary at its
principal office and with its stock transfer and warrant agent, if any, an
officer's certificate showing the adjusted Exercise Price determined as herein
provided and setting forth in reasonable detail the facts requiring such
adjustment. Each such officer's certificate shall be made available at all
reasonable times for inspection by the Holder and the Company shall, forthwith
after each such adjustment, deliver a copy of such certificate to the Holder.

         SECTION 8. NOTICES TO HOLDERS. So long as this Warrant shall be
outstanding and unexercised (a) if the Company shall pay any dividend or make
any distribution upon the Common Shares, (b) if the Company shall offer to the
holders of Common Shares for subscription or purchase by them any shares of
stock of any class or any other rights or (c) if any capital reorganization of
the Company, reclassification of the capital stock of the Company, consolidation
or merger of the Company with or into another corporation, sale, lease or
transfer of all or substantially all of the property and assets of the Company
to another corporation or voluntary or involuntary dissolution, liquidation or
winding up of the Company shall be effected, then, in any such case, the Company
shall cause to be delivered to the Holder, at least 10 days prior to the date
specified in (x) or (y) below, as the case may be, a notice containing a brief
description of the proposed action and stating the date on which (x) a record is
to be taken for the purpose of such dividend, distribution or rights or (y) such
reclassification, reorganization, consolidation, merger, conveyance, lease,
dissolution, liquidation or winding up is to take place

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and the date, if any is to be fixed, as of which the holders of Common Shares of
record shall be entitled to exchange their Common Shares for securities or other
property deliverable upon such reclassification, reorganization, consolidation,
merger, conveyance, dissolution, liquidation or winding up.

         SECTION 9. RECLASSIFICATION, REORGANIZATION OR MERGER. In case of any
reclassification, capital reorganization or other change of outstanding Common
Shares of the Company (other than a change in par value, from par value to no
par value, from no par value to par value or as a result of an issuance of
Common Shares by way of dividend or other distribution or of a subdivision or
combination) or in case of any consolidation or merger of the Company with or
into another corporation (other than a merger with a subsidiary in which merger
the Company is the continuing corporation and which does not result in any
reclassification, capital reorganization or other change of outstanding Common
Shares of the class issuable upon exercise of this Warrant) or in case of any
sale or conveyance to another corporation of the property of the Company as an
entirety or substantially as an entirety, the Company shall cause effective
provision to be made so that the Holder shall have the right thereafter, by
exercising this Warrant, to purchase the kind and amount of shares of stock and
other securities and property which the Holder would have received upon such
reclassification, capital reorganization or other change, consolidation, merger,
sale or conveyance had this Warrant been exercised prior to the consummation of
such transaction. Any such provision shall include provision for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Warrant. The foregoing provisions of this Section shall
similarly apply to successive reclassifications, capital reorganizations and
changes of Common Shares and to successive consolidations, mergers, sales or
conveyances. In the event the Company spins off a subsidiary by distributing to
the shareholders of the Company as a dividend or otherwise the stock of the
subsidiary, the Company shall reserve for the life of this Warrant shares of the
subsidiary to be delivered to the Holders of the Warrants upon exercise to the
same extent as if they were owners of record of the Warrant Shares on the record
date for distribution of the shares of the subsidiary.

         SECTION 10. REGISTRATION UNDER THE SECURITIES ACT OF 1933.

                  (a) Within 45 days after receipt of a written request by the
         then Holder(s) of Warrants or Warrant Shares representing at least 51%
         of the total Warrant Shares made at any time within the period
         commencing June 30, 1999 and ending June 30, 2003, the Company will
         file, no more than once, a registration statement under the Securities
         Act of 1933, as amended (the "Act"), registering the Warrants and the
         Warrant Shares. The Company will use its best efforts to cause such
         registration statement to become effective.

                  (b) In addition, if at any time during the period commencing
         June 30, 1999 and ending December 31, 2005, the Company should file a
         registration statement (which term shall not include any registration
         statement filed on Form S-8 or S-4) under the Act, which relates to a
         current offering of securities of the Company (except in connection
         with an offering (i) to employees or (ii) of the Company's securities
         solely in exchange for properties, assets or stock of other individuals
         or corporations), such registration

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         statement and the prospectus included therein shall also, at the
         written request to the Company by any of the Holder(s) of the Warrants
         and Warrant Shares, relate to and meet the requirements of the Act with
         respect to any public offering of the Warrants and Warrant Shares so as
         to permit the public sale thereof in compliance with the Act. The
         Company shall give written notice to the Holder(s) of its intention to
         file a registration statement under the Act relating to a current
         offering of the aforesaid securities of the Company 30 or more days
         prior to the filing of such registration statement, and the written
         request provided for in the first sentence of this subsection shall be
         made by the Holder(s) 10 or more days prior to the date specified in
         the notice as the date on which it is intended to file such
         registration statement. Neither the delivery of such notice by the
         Company nor of such request by the Holder(s) shall in any way obligate
         the Company to file such registration statement, and, notwithstanding
         the filing of such registration statement, the Company may, at any time
         prior to the effective date thereof, determine not to proceed to
         effectiveness with such registration statement, without liability to
         the Holder(s).

                  (c) In addition, the Company will cooperate with the then
         Holder(s) of the Warrants and Warrant Shares in preparing and signing
         any registration statement, in addition to the registration statements
         discussed above, required in order to sell or transfer the Warrants and
         Warrant Shares and will sign and supply all information required
         therefor, but such additional registration shall be at cost and expense
         of the then Holder(s).

                  (d) When, pursuant to subsections (a), (b) or (c) of this
         Section, the Company shall take any action to permit a public offering
         or sale or other distribution of the Warrants and Warrant Shares, the
         Company shall:

                           (i) supply to each selling Holder a copy of the
                  registration statement and a reasonable number of copies of
                  the preliminary, final and other prospectus in conformity with
                  requirements of the Act and the Rules and Regulations
                  promulgated thereunder and such other documents as the Holders
                  shall reasonably request;

                           (ii) bear the complete cost and expense (other than
                  any selling commissions relating to the sale of the Warrants
                  and Warrant Shares, which shall be paid by the sellers
                  thereof) of such registrations or qualifications except those
                  filed under subsection (10)(c) which shall be cost and expense
                  of the Holder(s);

                           (iii) keep effective such registration statement
                  until the first of the following events occur (A) 12 months
                  have elapsed after the effective date of such registration
                  statement or (B) all of the registered Warrant Shares issued
                  by the Company either before or after the effective date of
                  such registration statement have been publicly sold under such
                  registration statement;

                           (iv) whenever the Company files a registration
                  statement pursuant to this Section that is declared effective
                  and that registers any Warrants or Warrant

                                       10
<PAGE>

                  Shares for resale, the Company agrees to use its best efforts
                  to register or qualify the Warrants and Warrant Shares for
                  sale in those states requested by the person selling the
                  Warrants or Warrant Shares, provided that the Company shall
                  not be required to register or qualify the Warrants and
                  Warrant Shares for sale in any state in which the sale of the
                  Warrants or Warrants Shares by the person selling the Warrants
                  or Warrant Shares would be exempt from having to be registered
                  or qualified in such state. The determination of whether or
                  not such an exemption exists shall be made by counsel for the
                  Company and such determination shall be provided in writing to
                  the person desiring to sell Warrants or Warrant Shares in a
                  state; and

                           (v) indemnify and hold harmless each such Holder and
                  each underwriter, within the meaning of the Act, who may
                  purchase from or sell for any such Holder, any Warrants or
                  Warrant Shares, from and against any and all losses, claims,
                  damages and liabilities (including, but not limited to, any
                  and all expenses whatsoever reasonably incurred in
                  investigating, preparing, defending or settling any claim)
                  arising from (A) any untrue or alleged untrue statement of a
                  material fact contained in any registration statement
                  furnished pursuant to subsection (i) or any prospectus
                  included therein or (B) any omission or alleged omission to
                  state therein a material fact required to be stated therein or
                  necessary to make the statements therein not misleading
                  (unless such untrue statement or omission or such alleged
                  untrue statement or omission was based upon information
                  furnished or required to be furnished in writing to the
                  Company by such Holder or underwriter expressly for use
                  therein), which indemnification shall include each person, if
                  any, who controls any such Holder or underwriter within the
                  meaning of the Act; provided, however, that the Company shall
                  not be so obligated to indemnify any such Holder or
                  underwriter or controlling person unless such Holder and
                  underwriter shall at the same time indemnify the Company, its
                  directors, each officer signing any registration statement or
                  any amendment to any registration statement and each person,
                  if any, who controls the Company within the meaning of the
                  Act, from and against any and all losses, claims, damages and
                  liabilities (including, but not limited to, any and all
                  expenses whatsoever reasonably incurred in investigating,
                  preparing, defending or settling any claim) arising from (1)
                  any untrue or alleged untrue statement of a material fact
                  contained in any registration statement or prospectus
                  furnished pursuant to subsection (i) or (2) any omission or
                  alleged omission to state therein a material fact required to
                  be stated therein or necessary to make the statements therein
                  not misleading, but the indemnity of such Holder, underwriter
                  or controlling person shall be limited to liability based upon
                  information furnished, or required to be furnished, in writing
                  to the Company by such Holder or underwriter or controlling
                  person expressly for use therein. The Company shall not be
                  liable for amounts paid in settlement of any such litigation
                  if such settlement was effected without the consent of the
                  Company. The indemnity agreement of the Company herein shall
                  not inure to the benefit of any such underwriter (or to the
                  benefit of any person who controls such underwriter) on
                  account of any losses, claims, damages

                                       11
<PAGE>

                  or liabilities (or actions or proceedings in respect thereof)
                  arising from the sale of any of such Warrants or Warrant
                  Shares by such underwriter to a person if such underwriter
                  failed to send or give a copy of the prospectus furnished
                  pursuant to subsection (i), as the same may then be
                  supplemented or amended (if such supplement or amendment shall
                  have been furnished to the Holders pursuant to said subsection
                  (i)), to such person with or prior to the written confirmation
                  of the sale involved.

                  (e) Each Holder shall supply such information as the Company
         may reasonably require from such Holder, or any underwriter for such
         Holders, for inclusion in such registration statement or posteffective
         amendment.

                  (f) The Company's agreements with respect to the Warrants and
         Warrant Shares in this Section will continue in effect regardless of
         the exercise or surrender of this Warrant.

                  (g) Any notices or certificates by the Company to the Holder
         and by the Holder to the Company shall be deemed delivered if in
         writing and delivered personally or sent by certified mail, return
         receipt requested, to the Holder, addressed to the Holder at the
         Holder's address as set forth on the Warrant or stockholder register of
         the Company, or, if the Holder has designated, by notice in writing to
         the Company, any other address, to such other address, and, if to the
         Company, addressed to it at 5600 South 42nd Street, Omaha, Nebraska
         67107. The Company may change its address by written notice to the
         Holder.

         SECTION 11. TRANSFER TO COMPLY WITH THE SECURITIES ACT OF 1933. The
Company may cause the following legend, or one similar thereto, to be set forth
on the Warrants and on each certificate representing Warrant Shares or any other
security issued or issuable upon exercise of this Warrant not theretofore
distributed to the public or sold to underwriters for distribution to the public
pursuant to Section 10 hereof, unless legal counsel for the Company is of the
opinion as to any such certificate that such legend, or one similar thereto, is
unnecessary:

         The securities represented by this certificate may not be offered for
         sale, sold or otherwise transferred except pursuant to an effective
         registration statement made under the Securities Act of 1933 (the
         "Act") and under any applicable state securities law, or pursuant to an
         exemption from registration under the Act and under any applicable
         state securities law, the availability of which is to be established to
         the satisfaction of the Company.

         SECTION 12. EXCHANGE PROVISIONS.

                  (a) For purposes of this Section, this Warrant shall be deemed
         to represent the same number of Warrants as there are Warrant Shares
         underlying this Warrant. For example, if there are 10,000 Warrant
         Shares underlying this Warrant, then for purposes of this Section, the
         Holder shall be deemed to hold 10,000 Warrants.

                                       12
<PAGE>

                  (b) For purposes of this Section, the following terms shall
         have the following meanings:

                           (i) "Current Market Value of a Warrant Share" shall
                  be the value of a Warrant Share as determined under subsection
                  (3)(a) or (b) hereof except that the time of the determination
                  thereunder shall be the last business day prior to the day the
                  Company receives a notice from the Holder under this Section.

                           (ii) "Warrant Value" shall mean the Current Market
                  Value of a Warrant Share minus or less the Exercise Price
                  payable under this Warrant as of the close of business on the
                  last business day prior to the day the Company receives a
                  notice from the Holder under this Section.

                  (c) The Holder shall have the right to exchange, in a cashless
         transaction, all or part of the Holder's Warrants for Common Shares
         issued by the Company at any time prior to the Expiration Date of such
         Warrants by providing written notice ("Notice") to the Company. Such
         Notice may only be provided after the earlier of the date the Company
         has received proceeds from the initial public offering by the Company
         pursuant to a registration statement declared effective under the Act
         or December 31, 1999, and only at a time when the Company's Common
         Shares are listed or approved for trading or quotation on a domestic or
         foreign exchange, interdealer trading system or national quotation
         bureau. Such Notice shall set forth the number of Warrants which the
         Holder elects to exchange for Common Shares.

                  (d) Within 10 days after receipt of such Notice by the
         Company, the Company shall issue the number of Common Shares of the
         Company to the Holder which is determined by dividing the Warrant Value
         of the Warrants being exchanged by the Current Market Value of a
         Warrant Share as of the date the Notice is received by the Company.

                  (e) The Holder shall surrender the Warrant which the Holder is
         exchanging for Common Shares upon receipt thereof. If the entire
         Warrant is being exchanged by the Holder for Common Shares, the Company
         shall cancel the entire Warrant. If less than the entire Warrant is
         being exchanged for Common Shares, the Company shall issue a new
         Warrant to the Holder representing the portion of this Warrant which
         was not exchanged for Common Shares.

                                       13
<PAGE>

         SECTION 13. APPLICABLE LAW. This Warrant shall be governed by, and
construed in accordance with, the laws of the State of Nebraska.

Dated:  [              ].

                                       TRANSGENOMIC, INC.

                                       By
                                         ---------------------------------------
                                       Name
                                           -------------------------------------
                                       Title
                                            ------------------------------------

                                       14
<PAGE>

                                  PURCHASE FORM

                                                   Dated: [__________], 19[___]

         The undersigned hereby irrevocably elects to exercise the Warrant to
the extent of purchasing [ ] shares of Common Shares and hereby makes payment of
$[ ] in payment of the actual exercise price thereof.

                     INSTRUCTIONS FOR REGISTRATION OF SHARES

Name:
     ---------------------------------------------------------------------------
                  (Please typewrite or print in block letters)

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

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

                                 ASSIGNMENT FORM

                                                    Dated: [_________], 19[___]

FOR VALUE RECEIVED,
                   -------------------------------------------------------------

hereby sells, assigns and transfers unto
                                        ----------------------------------------

Name:
     ---------------------------------------------------------------------------
                  (Please typewrite or print in block letters)

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

the right to purchase Common Shares represented by this Warrant to the extent of
Common Shares as to which such right is exercisable and does hereby irrevocably
constitute and appoint attorney to transfer the same on the books of the Company
with full power of substitution in the premises.

                                      Signature:

                                       15
<PAGE>

                                                                    EXHIBIT 10.3

                                    SCHEDULE
                                       OF
                                 WARRANT HOLDERS

<TABLE>
<CAPTION>

       --------------------------------------------- --------------------------------------------
                       NAME/ADDRESS                             NO. OF COMMON SHARES
       --------------------------------------------- --------------------------------------------
<S>                                                                   <C>
               SMITH HAYES FINANCIAL SVCS.                            108,250
              Consolidated Investment Corp.
                    200 Centre Terrace
                      1225 L Street
                    Lincoln, NE 68501
       --------------------------------------------- --------------------------------------------
                    Leroy J. Schroeder                                  2,500
                   800 US Bank Building
                    Lincoln, NE 68508
       --------------------------------------------- --------------------------------------------
       Section 1.        MILLENNIUM FINANCIAL GROUP                       500
                    Anthony H. Mannara
                     Via G. Cattori 3
                   6902 Lugano-Paradiso
                       Switzerland
       --------------------------------------------- --------------------------------------------
                       Namaste Ltd.                                     2,225
               P.O. Box 3338, 1225 Geneva 3
                       Switzerland
       --------------------------------------------- --------------------------------------------
                       Deltron Ltd.                                     2,225
                  Island Resources Ltd.
                  National House, Santon
                   Isle of Man IM4 1HA
       --------------------------------------------- --------------------------------------------
                    Michael R. Fugler                                     800
                 235 West 56th, Suite 37E
                    New York, NY 10019
       --------------------------------------------- --------------------------------------------
                     Shelley K. Gluck                                     250
                    3340 Indian Creek
                   Ft. Worth, TX 76180
       --------------------------------------------- --------------------------------------------
                     David M. Dobson                                      500
                  Via Santa Radegonda 16
                   20121 Milano, Italy
       --------------------------------------------- --------------------------------------------
                    Paolo E. Floriani                                     500
                      Via Cattori 3
                6902 Paradiso, Switzerland
       --------------------------------------------- --------------------------------------------
                     James M. McCrory                                     500
                      Viale Geno 16
                    22100 Como, Italy
       --------------------------------------------- --------------------------------------------
                     Frank T. Marino                                      500
                     32 Quai G. Ador
                   Geneva, Switzerland
       --------------------------------------------- --------------------------------------------
       Section 2.          RAF/AMERICAN FRONTEER                       16,850
                     John P. Kanouff
                  2525 East Cedar Avenue
                     Denver, CO 80209
       --------------------------------------------- --------------------------------------------

</TABLE>

                                       16
<PAGE>

<TABLE>
<CAPTION>

       --------------------------------------------- --------------------------------------------
<S>                                                                   <C>
                    Robert H. Taggart                                   3,370
              7163 S. Chapparal Circle East
                     Aurora, CO 80016
       --------------------------------------------- --------------------------------------------
       Section 3.            American Fronteer                          6,740
              Financial Corporation
                    One Norwest Center
             1700 Lincoln Street, 32nd Floor
                     Denver, CO 80203
       --------------------------------------------- --------------------------------------------
       Section 4.            American Fronteer                          6,740
              Financial Corporation
                    One Norwest Center
             1700 Lincoln Street, 32nd Floor
                     Denver, CO 80203
       --------------------------------------------- --------------------------------------------
       Section 5.          G.S. BECKWITH GILBERT                       300,000
                  G. S. Beckwith Gilbert
              Field Point Capital Management
                      47 Arch Street
                   Greenwich, CT 06830
</TABLE>

                                       17<PAGE>

                                                                    EXHIBIT 10.4

                               TRANSGENOMIC, INC.

                           FIRST AMENDED AND RESTATED

                             SHAREHOLDERS AGREEMENT

         THIS AGREEMENT, originally entered into as of the 1st day of July,
1997, by and among TRANSGENOMIC, INC., a Delaware corporation (the
"Corporation"), and each of the holders of the Corporation's Common Stock as of
such date and such additional persons set forth in Schedule A hereto which
become a party hereto from time to time thereafter (collectively, the
"Shareholders") is hereby amended and restated as provided herein as of the 24th
day of February, 1998.

                              W I T N E S S E T H:

         WHEREAS, the Shareholders own all of the issued and outstanding shares
of Common Stock, par value $.01 per share, of the Corporation (the "Shares");
and

         WHEREAS, the Shareholders and the Corporation believe that it is in
their mutual best interest to impose certain restrictions and obligations upon
themselves and upon the transfer of the Shares;

         NOW, THEREFORE, in consideration of the premises and mutual covenants
set forth herein, it is mutually agreed by and among the parties as follows:

         SECTION 1. DEFINITIONS. As used in this Agreement, unless the context
otherwise requires:

                  "AGREEMENT" means this Shareholders' Agreement and any
         amendments and supplements hereto.

                  "BONA FIDE OFFER" means a written offer from a financially
         responsible party or parties identified therein by name and address,
         reasonably appearing able to comply with the terms of such offer, and
         accompanied by a deposit in an amount equal to or in excess of 10% of
         the purchase price. In the event that the person making such offer is a
         partnership or corporation, all general partners and all limited
         partners or shareholders owning more than 10% of its partnership
         interests or stock shall be identified.

                  "CONTROL SHAREHOLDER" means any Shareholder who, at the time
         in question, is a director or executive officer of the Corporation or
         who beneficially owns (as determined pursuant to Rule 13d-3 under the
         Securities Exchange Act of 1934) more than 10% of the issued and
         outstanding Shares.

                  "CORPORATION" means Transgenomic, Inc., a Delaware
         corporation.

<PAGE>

                  "EFFECTIVE DATE" means the date upon which a Notice of Offer
         is deemed to have been first delivered to the Corporation.

                  "NOTICE OF EXERCISE" means the written notice required to be
         given by the Corporation or a Shareholder to exercise the option to
         purchase the Shares offered for Transfer.

                  "NOTICE OF OFFER" means the written notice of a Shareholder's
         intention to Transfer any of his Shares and which sets forth the name
         of the proposed Transferee, the number of Shares to be Transferred and
         the terms and conditions of the proposed Transfer. Such notice shall be
         accompanied by a copy of a Bona Fide Offer received in connection with
         such proposed Transfer.

                  "PERMITTED TRANSFER" means a Transfer of Shares described in
         Section 5 hereof.

                  "PLACEMENT AGENTS" means RAF Financial Corporation and
         Millennium Financial Group, Inc.

                  "SECURITIES ACT" means the Securities Act of 1933, as amended
         from time to time, and the rules and regulations of the Securities and
         Exchange Commission promulgated thereunder.

                  "SELLING SHAREHOLDER" means any Shareholder who has delivered
         a Notice of Offer.

                  "SHAREHOLDERS" means the persons or entities which hold of
         record the issued and outstanding Shares of the Corporation.

                  "SHARES" means the issued and outstanding shares of the Common
         Stock, par value $.01 per share, of the Corporation.

                  "TRANSFER" means to directly or indirectly sell, assign,
         hypothecate, transfer, pledge, mortgage or in any other way encumber or
         dispose of Shares and shall be defined to include the process whereby
         Shares are transferred.

                  "TRANSFEREE" means the person or other entity to which a
         Selling Shareholder desires to Transfer Shares.

         SECTION 2. LEGEND. Each certificate representing Shares shall have the
following legend printed or typed thereon:

         THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
         REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH SHARES
         HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED IN
         THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT THERETO
         UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR PURSUANT TO AN
         EXEMPTION

                                       2
<PAGE>

         FROM REGISTRATION UNDER THE ACT, THE AVAILABILITY OF WHICH IS TO BE
         ESTABLISHED TO THE SATISFACTION OF THE COMPANY.

         THE STOCK EVIDENCED BY THIS CERTIFICATE IS SUBJECT TO THE TRANSFER
         RESTRICTIONS CONTAINED IN A FIRST AMENDED AND RESTATED SHAREHOLDERS'
         AGREEMENT, DATED FEBRUARY[ ], 1998, BY AND AMONG THE CORPORATION AND
         ITS SHAREHOLDERS, A COPY OF WHICH IS ON FILE AT THE OFFICE OF THE
         CORPORATION. TRANSFERS IN VIOLATION OF THE SHAREHOLDERS' AGREEMENT ARE
         VOID. BY ACCEPTANCE OF THIS CERTIFICATE THE HOLDER HEREOF AGREES TO BE
         BOUND BY THE TERMS OF THE SHAREHOLDERS AGREEMENT.

All Shares hereafter issued shall bear the same legend.

         SECTION 3. RESTRICTIONS ON TRANSFER OF SHARES. No Shareholder shall
Transfer any Shares that he may now or hereafter hold, nor shall any such Shares
be transferable except in compliance with the terms of this Agreement. No
Transfer of Shares will be recognized by the Corporation unless a registration
statement relating thereto has been declared effective under the Securities Act
or the Selling Shareholder establishes to the satisfaction of the Company that
such Transfer of Shares is exempt from registration under the Securities Act and
applicable state securities laws.

         SECTION 4. RIGHTS OF FIRST REFUSAL.

               (a) No less than 20 days prior to any Transfer, other than a
          Permitted Transfer or a Transfer by a Shareholder under Section 6
          hereof, a Shareholder desiring to Transfer Shares shall furnish a
          Notice of Offer to the Corporation and to each other Shareholder. For
          a period of 10 days after the Effective Date thereof, the Corporation
          shall have an option to purchase all or any portion of the Shares
          offered for Transfer by the Selling Shareholder on the same terms and
          conditions as set forth in the Notice of Offer. If the Corporation
          elects to exercise such option, it must deliver to the Selling
          Shareholder a Notice of Exercise within 10 days of the Effective Date.

               (b) If the Corporation elects not to exercise said option for all
          of the Shares to be Transferred by the Selling Shareholder, then it
          shall give prompt notice thereof to the other Shareholders, after
          which the other Shareholders will have an option for an additional 10
          days to purchase all or any portion of the remaining Shares offered
          for Transfer by the Selling Shareholder on the same terms and
          conditions as set forth in the Notice of Offer. If a Shareholder
          elects to exercise its option to acquire Shares to be Transferred, it
          must deliver to the Selling Shareholder a Notice of Exercise within 20
          days of the Effective Date. If more than one Shareholder exercises
          said option, then each such Shareholders shall have the right to
          purchase Shares of the Selling Shareholder on a pro rata basis based
          on the current number of Shares owned by each purchasing Shareholder.

                                       3
<PAGE>

               (c) The Notice of Exercise delivered by the Corporation or any
          Shareholder shall specify a closing date within 35 days after the
          Effective Date of the Notice of Offer. The Selling Shareholder and the
          Corporation or other Shareholders, as the case may be, may extend the
          closing date by mutual written consent.

               (d) If either the Corporation or any Shareholder elects to
          exercise its option to purchase all or any portion of the Shares, then
          the Selling Shareholder may not Transfer such Shares to any other
          party. If the periods during which the Corporation and the other
          Shareholders are entitled to exercise their options to purchase such
          Shares expire without the exercise of said options with respect to any
          of the Shares so offered, then the Selling Shareholder shall, for a
          period ending 30 days after the termination of the last applicable
          option period, be free to Transfer the Shares to the Transferee making
          the Bona Fide Offer contained in the Notice of Offer or to another
          party or parties, but in either case only so long as such Transfer is
          effected on terms and conditions no less favorable to the Selling
          Shareholder as those set forth in the Bona Fide Offer contained in the
          Notice of Offer. Any Transferee shall, as a condition to the
          recognition by the Corporation of such Transfer, execute an instrument
          acceptable to the Corporation acknowledging the terms and restrictions
          of this Agreement and the Transferee's obligation to be bound hereby.

               (e) If the Selling Shareholder does not Transfer the Shares
          within the period specified in paragraph (d) hereof, then such Shares
          shall again become subject to the restrictions of this Agreement.

               (f) Any Shares purchased by the Corporation shall be restored to
          the status of authorized but unissued Shares.

               (g) The Selling Shareholder will be responsible for the payment
          of any and all expenses incurred by the Selling Shareholder in the
          exercise of the rights specified in this Section 4 and the sale of his
          Shares.

         SECTION 5. PERMITTED TRANSFERS.

               (a) The following types of Transfers ("Permitted Transfers") may
          be consummated notwithstanding the provisions of Section 4 of this
          Agreement:

                         (i) a Transfer by any Shareholder of all or any portion
                    of his Shares, whether or not for adequate consideration,
                    either directly to, or indirectly in trust for, his spouse,
                    children, parents, siblings or a corporation or other entity
                    of which he (and/or his spouse, children, parents or
                    siblings) beneficially own 100% of the equity interests;

                         (ii) a Transfer by any Shareholder of all or any
                    portion of his Shares to another Shareholder; or

                         (iii) a Transfer by any Control Shareholder of 50% or
                    more of his Shares.

                                       4
<PAGE>

               (b) In the event a Shareholder makes a Permitted Transfer, he
          shall notify the Corporation thereof, which notice shall specify (i)
          the name of the Transferee, (ii) the relationship of the Transferee to
          the Shareholder, (iii) the number of Shares transferred and (iv) the
          date of the Transfer. Any such Transferee shall, as a condition of the
          recognition by the Corporation of such Transfer, execute a counterpart
          copy of this Agreement or other instrument acceptable to the
          Corporation acknowledging the terms and restrictions of this Agreement
          and the Transferee's obligation to be bound hereby.

               (c) Notwithstanding any other provision of this Agreement, a
          Shareholder may pledge, hypothecate or otherwise encumber up to 50% of
          his Shares to, or in favor of, any national or state bank or other
          financial institution; provided, however, that a Shareholder may
          pledge, hypothecate or encumber all of his Shares in order to secure a
          loan made to the Company. In the event a Shareholder pledges,
          hypothecates or encumbers Shares, he shall notify the Corporation
          thereof, which notice shall specify (i) the name of the party to which
          the Shares have been pledged, (ii) the number of Shares pledged (iii)
          the amount of the obligation for which such Shares have been given as
          security and (iv) the date of the pledge.

         SECTION 6. SALES BY CONTROL SHAREHOLDERS.

               (a) Other than as provided in paragraph (b) of this Section 6,
          any Control Shareholder who agrees to sell more than 50% of his Shares
          shall, on behalf of each other Shareholder which desires to sell his
          Shares, cause the purchaser of the Control Shareholder's Shares to
          agree to also acquire the Shares of each such other Shareholder on the
          same terms as such purchaser has agreed to acquire the Shares from the
          Control Shareholder; provided, however, that if such purchaser is
          unwilling to buy all Shares tendered to it by such Control Shareholder
          and any such other Shareholders, then each of the selling Shareholders
          will be entitled to sell a pro rata portion of his Shares based on the
          current number of Shares owned by such Shareholder.

               (b) The provisions of Section 6(a) shall not apply to any sale of
          Control Shares from one Control Shareholder to another Control
          Shareholder.

               (c) Any sale of Shares pursuant to this Section 6 by Shareholders
          will not be subject to the provisions of Section 4 of this Agreement.

         SECTION 7. SECURITY FOR PURCHASE PRICE OF SHARES. Whenever any Shares
are purchased pursuant to the option created under Section 4 of this Agreement
and the parties agree that the entire purchase price for the Shares will not be
paid at closing, then the purchaser(s) may endorse the certificates for the
purchased Shares and deliver the same to the Selling Shareholder as collateral
security for the payment of the unpaid purchase price, and such shares may be so
held until the entire purchase price shall have been paid. While such shares
shall be so held as collateral security and so long as the purchasing
Shareholder is not in default, the purchasing Shareholder shall be entitled to
all rights as a Shareholder, including voting rights and rights to all
dividends, with respect to such Shares.

                                       5
<PAGE>

         SECTION 8. REGISTRATION RIGHTS.

               (a) If the Company proposes to file a registration statement
          under the Securities Act with respect to either a primary or secondary
          offering by the Company of equity securities for its own account
          (other than a registration statement relating solely to (i) securities
          to be offered to employees pursuant to a stock option, stock savings,
          or other employee benefit plan of the Company or its affiliates; (ii)
          securities proposed to be issued in exchange for securities or assets
          of, or in connection with a merger or consolidation with, another
          corporation; (iii) securities to be offered by the Company generally
          to any class or series of its then-existing security holders; (iv)
          ecurities issuable upon conversion of securities which are the subject
          of an underwritten redemption; or (v) securities to be offered or
          issued pursuant to a combination of the foregoing transactions), then
          the Company shall give written notice of such proposed filing to each
          Shareholder as soon as practicable (but in no event less than 30 days
          before the anticipated filing date of such registration statement),
          and such notice shall offer the opportunity to register all or any
          part of the Shares owned by the Shareholders. Shareholders shall have
          15 days following receipt of such notice to request in writing
          inclusion of their Shares in such registration, which request shall
          specify the number of Shares a Shareholder proposes to sell.

               (b) Whenever a Shareholder requests that all or part of his
          Shares be included in a proposed registration, the Company shall use
          its reasonable best efforts to effect the registration and sale of
          such Shares and to cause the managing underwriter of any proposed
          underwritten offering to permit the requested Shares to be included in
          such registration. Shareholders may only participate in the
          underwritten portion of such registration hereunder if each of them
          (i) agrees to sell their Shares on the basis provided in any
          underwriting arrangements and (ii) completes and executes all
          questionnaires, powers of attorney, indemnities, underwriting
          agreements and other documents reasonably required under the terms of
          such underwriting arrangements and these registration rights. Among
          other things, each Shareholder agrees, if his Shares are included in
          an underwritten offering, that he will join in any general agreement
          with the managing underwriter not to effect any public sale or
          distribution of his Shares pursuant to such registration for a period
          of time not to exceed 180 days after the date any such registration
          statement is declared effective under the Securities Act.

               (c) Notwithstanding anything else set forth in paragraph (a) of
          this Section 8, the Company may, at the discretion of a majority of
          its Board of Directors and without the consent of any requesting
          Shareholder, withdraw any registration and abandon the proposed
          offering. Furthermore, if the managing underwriter of an underwritten
          offering advises the Company that in its opinion either because of (i)
          the size of the offering that the Company and any Shareholders desire
          to make or (ii) the kind of securities that the Company and any
          Shareholders intend to include in such offering, the success of the
          offering could be materially and adversely affected by inclusion of
          the Shares requested to be included, then (A) in the event that the
          size of the offering is the basis of such managing underwriter's
          opinion, the amount of Shares to be offered for the account of
          Shareholders shall be reduced on a pro rata basis among such
          Shareholders (on the basis of the amount of Shares intended to be
          included in such registration by each such

                                       6
<PAGE>

         Shareholder as compared to the aggregate amount of Shares intended to
         be included by all such Shareholders) to the extent necessary to reduce
         the total amount of Shares to be included in such offering to the
         amount recommended by such managing underwriter; and (B) in the event
         that the kind or combination of securities to be offered is the basis
         of such managing underwriter's opinion, the amount of Shares to be
         included in such offering shall be reduced as described in clause (A)
         above or, if any such reduction would, in the judgment of the managing
         underwriter, be insufficient to substantially eliminate the adverse
         effect that inclusion of the Shares requested to be included could have
         on such offering, such Shares shall be excluded from such underwritten
         offering. Notwithstanding the exclusion of such Shares from such
         underwritten offering, the Company will cause such Shares to be
         registered for resale in the same registration statement, provided that
         the requesting Shareholders agree not to consummate any such resale of
         their Shares pursuant to such registration statement for a period of
         180 days after such registration statement is declared effective under
         the Securities Act. The Company agrees to maintain the effectiveness of
         such registration statement under the Securities Act for up to 12
         months after such 180-day period has expired or until all such
         registered Shares are sold.

               (d) The registration rights under this Section shall only apply
          to the first two registration statements filed by the Company and
          declared effective under the Securities Act, other than registration
          statements relating to those offerings described in items (i) through
          (v) of paragraph (a) of this Section 8.

               (e) The Company shall pay all expenses in connection with the
          registration of Shares pursuant to this Section 8, including expenses
          incurred in connection with any registration statements that do not
          become effective. Shareholders participating in such registration
          shall pay their pro rata share of all underwriting fees, discounts or
          commissions attributable to any sale of all or part of their Shares in
          connection with any registration, whether or not the registration
          statement becomes effective. A Shareholder's pro rata share of such
          underwriting fees, discounts or commissions will be determined by
          reference to the number of shares to be sold by such Shareholder
          compared with the number of shares to be sold by all Shareholders and
          the Company pursuant to the registration.

               (f) The Company agrees that, if a registration statement which
          would give rise to the registration rights set forth in paragraph (a)
          of this Section 8 has not been declared effective under the Securities
          Act on or before June 30, 1999, then it will use its best efforts to
          cause a registration statement to be filed on the appropriate form
          under the Securities Act which relates to the resale of the Shares and
          to have such registration statement declared effective under the
          Securities Act by no later than December 31, 1999; provided that such
          dates may be extended by mutual agreement between the Company and RAF
          Financial Corporation, in their sole discretion. The Company will keep
          the registration statement effective for 12 months after the 180-day
          period described in Section 8(c) hereof expires or until all
          registered shares have been sold, whichever occurs earlier. The
          Company further agrees that on the date such registration statement is
          declared effective, the Company will have caused the Shares to be
          listed on the New York Stock Exchange, if the Company qualifies for
          such listing or, if not, on the

                                       7
<PAGE>

         American Stock Exchange, if the Company qualifies for such listing or,
         if not, on the Nasdaq Stock Market, if the Company qualifies for such
         listing or, if not, on the SmallCap Market of The Nasdaq Stock Market.

               (g) Whenever the Company files a registration statement pursuant
          to this Section 8 that is declared effective and that registers any
          Shares for resale, the Company agrees to use its best efforts to
          register or qualify the Shares for sale in those states requested by
          the person selling the Shares; provided that, the Company shall not be
          required to register or qualify the Shares for sale in any state in
          which the sale of the Shares by the person selling the Shares would be
          exempt from having to be registered or qualified in such state. The
          determination of whether or not such an exemption exists shall be made
          by counsel for the Company and such determination shall be provided in
          writing to the person desiring the sell Shares in a state.

               (h) With respect to the Shareholders who purchased Shares in the
          private offering of up to 2,000,000 Shares (the "Private Offering")
          made by the Company pursuant to the Private Placement Memorandum,
          dated July 3, 1997, and any amendments or supplements thereto (the
          "PPM"), the Company agrees that it will issue additional Shares
          ("Additional Shares") to such Shareholders if (i) Shares are sold by
          the Company pursuant to the first registration statement of the
          Company which is declared effective under the Securities Act (other
          than those excluded registration statements described in Section 8(a)
          hereof) (the "Registered Offering") at a price of less than $10.00 per
          Share or (ii) Shares are sold by the Company between the date of the
          first sale of Shares in the Private Offering and the date of the
          closing of the Registered Offering at a price of less than $5.00 per
          Share; provided, however, that the Company will not be required to
          issue Additional Shares if the amount of consideration received by the
          Company from the issuance of shares (x) to the Placement Agents upon
          the exercise of the Placement Agent Warrants described in the PPM, (y)
          to G.S. Beckwith Gilbert upon the exercise of certain warrants issued
          by the Company to him or (z) to Jeffrey Sklar upon the exercise of
          certain options issued by the Company to him (all as described in the
          PPM) is less than $5.00 per share. If the sale price in the Registered
          Offering is less than $10.00 per Share, the number of Additional
          Shares to be issued to each such Shareholder will be determined by
          subtracting such sale price from $10.00, multiplying the result by the
          number of Shares acquired in the Private Offering by such Shareholder
          and then dividing the product by such sale price. If the sale price
          for any other sale of Shares described in clause (ii) above is less
          than $5.00 per Share, the number of Additional Shares to be issued to
          each such Shareholder will be determined by subtracting such sale
          price from $5.00, multiplying the result by the number of Shares
          acquired in the Private Offering by such Shareholder and dividing the
          product by such sale price. The Company will issue Additional Shares
          to each such Shareholder within 10 days after the date of the
          occurrence of the event that causes the Company to have to issue the
          Additional Shares. Further, such Additional Shares shall be subject
          to, and have the benefits of, this Agreement.

         SECTION 9. NOTICES. All notices, requests and other communications
hereunder, including a Notice of Offer, shall be in writing and shall be
delivered by courier or other means of personal service, national overnight
delivery service, telecopy, first class U.S. mail, postage prepaid, or

                                       8
<PAGE>

certified U.S. mail, return receipt requested, addressed (i) to the Corporation
at 5600 South 42nd Street, Omaha, Nebraska 68107, facsimile (402) 733-1264,
attention: Mr. Collin J. D'Silva or (ii) to a Shareholder at the address set
forth in Schedule A hereto or at such other address of which a Shareholder has
given the Corporation notice. All such notices shall be deemed to have been
delivered on the date personally delivered or telecopied, one business day after
being delivered to a national overnight delivery service or three business days
after being deposited in the U.S. Mail.

         SECTION 10. WAIVER. No waiver of any provision of this Agreement in any
instance shall be or for any purpose be deemed to be a waiver of the right of
any party hereto to enforce strict compliance with the provisions hereof in any
subsequent instance.

         SECTION 11. GOVERNING LAW. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Delaware without giving
effect to its conflict of laws principals.

         SECTION 12. BINDING EFFECT AND BENEFITS. Except as otherwise provided
herein, the terms of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, personal representatives, successors and assigns, and shall be
binding upon any person to whom any of the Shares of the parties are transferred
and upon the heirs, executors, administrators, personal representative,
successors and assigns of each such person.

         SECTION 13. TERM OF AGREEMENT. This Agreement shall become effective as
of the date first written above and shall remain in full force and effect until
the Corporation and all of the Shareholders then holding Shares subject to this
Agreement shall agree in writing to its termination or until the first to occur
of (i) offering of Shares by the Corporation pursuant to a registration
statement effective under the Securities Act; provided that the provisions of
Section 8 shall remain in effect until satisfied, (ii) the purchase by one
Shareholder of all the issued and outstanding Shares of the Corporation or (iii)
the dissolution, bankruptcy or receivership of the Corporation. Upon termination
of this Agreement, the Secretary of the Corporation shall, upon tender of the
certificates for Shares, delete the legend endorsed thereon pursuant to Section
2 of this Agreement.

         SECTION 14. REMEDIES FOR VIOLATIONS. The Shares cannot be readily
purchased or sold on the open market and for this reason, among others, the
parties hereto will be irreparably damaged in the event that this Agreement is
not complied with by all parties hereto. In the event of any controversy
concerning the rights or obligations under this Agreement, such right or
obligation shall be enforceable in a court of equity by a decree of specific
performance.

         SECTION 15. ENTIRE AGREEMENT AND AMENDMENTS. This Agreement contains
the entire understanding and agreement between the parties hereto and supersedes
any prior agreements among the parties pertaining to the Shares. There are no
representations, warranties, promises, covenants or understandings other than
those herein expressly set forth. No change, modification or amendment of this
Agreement shall be valid unless the same be in writing and signed by all the
parties hereto.

                                       9
<PAGE>

         SECTION 16. SEVERABILITY. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions of
this Agreement, and this Agreement shall be construed in all respects as if such
invalid or unenforceable provision were omitted.

         SECTION 17. SECTION AND OTHER HEADINGS. The section and other headings
contained in this Agreement are for reference purposes only and shall not affect
the interpretation of this Agreement.

         SECTION 18. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.

         SECTION 19. CONSTRUCTION. Whenever required by the context, references
herein to the singular shall include the plural and the masculine gender shall
include the feminine gender.

         SECTION 20. ADDITIONAL PARTIES. With the approval of the Corporation,
anyone in whose name Shares are registered may become a party to this Agreement
by executing a duplicate copy hereof.

                                       10
<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

                               TRANSGENOMIC, INC.

                               By  /s/ Collin J. D'Silva
                               -----------------------------------------------
                                   Collin J. D'Silva, President

                               SHAREHOLDERS

                               /s/ Collin J. D'Silva
                               -----------------------------------------------
                               Collin J. D'Silva, Shareholder

                               /s/ Collin J. D'Silva
                               -----------------------------------------------
                               Collin J. D'Silva, as trustee for the Arther P.
                               D'Silva Family Irrevocable Trust, Shareholder

                               /s/ Arther P. D'Silva
                               -----------------------------------------------
                               Arther P. D'Silva, Shareholder

                                       11
<PAGE>

                            /s/ Thomas E. Bowman
                            -----------------------------------------------

                            /s/ Una N. Bowman
                            -----------------------------------------------
                            Thomas E. Bowman and Una N. Bowman, Shareholder

                            /s/ Stephen F. Dwyer
                            -----------------------------------------------
                            Stephen F. Dwyer, Shareholder

                            /s/ Nancy Dwyer
                            -----------------------------------------------
                            Nancy Dwyer, Shareholder

                            /s/ Robert V. Dwyer
                            -----------------------------------------------
                            Robert V. Dwyer, Jr., Shareholder

                            /s/ Robert Sanger
                            -----------------------------------------------
                            Robert Sanger, as trustee for the Robert & Ellen
                            Sanger Trust Agreement of 1992, Shareholder

                            /s/ Douglas Gjerde
                            -----------------------------------------------
                            Douglas Gjerde, Shareholder

                            COROB Investments, Ltd., Shareholder by:
                            Name /s/ Robert V. Dwyer, Jr.
                                 -----------------------------------------------
                            Title    General Partner
                                 -----------------------------------------------

                            Each of the additional Shareholders listed in
                            Schedule A  hereto  by  Collin J.  D'Silva,
                            Attorney-in-fact

                            By  /s/ Collin J. D'Silva
                                ------------------------------------------------
                                Collin J. D'Silva, Attorney-in-fact

                                       12

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