Document:

Unassociated Document

     

    Exhibit 4.1

    SERIES
A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT

    

    THIS
SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT (this “Agreement”) is
made as of this 29th day of December, 2010, by and among Transgenomic, Inc., a
Delaware corporation (the “Company”), and Third Security Senior Staff 2008 LLC,
a Virginia limited liability company (“Senior Staff LLC”), Third Security Staff
2010 LLC, a Virginia limited liability company (“Staff LLC”), and Third Security
Incentive 2010 LLC, a Virginia limited liability company (“Incentive LLC” and,
together with Senior Staff LLC and Staff LLC, the “Purchasers”).

    

    WHEREAS,
upon the terms and conditions set forth in this Agreement, the Company proposes
to issue and sell to the Purchasers 2,586,205 shares of Series A Convertible
Preferred Stock (the “Series A Preferred”) having the rights, preferences,
privileges and restrictions set forth in the Certificate of Designation in the
form attached to this Agreement as Exhibit A and in
connection therewith warrants (“Warrants”) to purchase an aggregate of 1,293,102
additional shares of Series A Preferred, the form of which is attached to this
Agreement as Exhibit
D.

    

    NOW, THEREFORE, in consideration of the
foregoing premises and the mutual covenants and conditions set forth herein, and
for good and valuable consideration the receipt and adequacy of which is hereby
acknowledged, the parties hereto agree as follows:

    

    ARTICLE
I

    DEFINITIONS

    

    
      	
              1.1

            	
              Definitions.

            

    

    

    In
addition to the terms defined elsewhere herein, when used herein, the following
terms shall have the meanings indicated hereunder:

    

    “Act”
means the Securities Act of 1933, as amended, and the rules and regulations of
the SEC thereunder.

    

    “Affiliate”
shall mean, with respect to any Person, any other Person who controls, is
controlled by or is under common control with such Person.

    

    “Agreement”
means this Agreement as the same may be amended, supplemented or modified in
accordance with the terms hereof.

    

    “Asset
Purchase Agreement” means the Asset Purchase Agreement, dated November 29, 2010,
by and among PGxHealth LLC, Clinical Data, Inc. and the Company.

    

    “Assets”
has the meaning set forth in Section 3.19 of this
Agreement.

    

    “Board of
Directors” means the Board of Directors of the Company.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    “Business
Day” means any day other than a Saturday, Sunday or other day on which
commercial banks in the State of Delaware are authorized or required by law or
executive order to close.

    

    “Bylaws”
means the Company’s Bylaws, as the same may have been amended and as in effect
as of the Closing Date, in the form attached hereto as Exhibit
C.

    

    “Capital
Stock” means all of the Company’s issued and outstanding equity
securities.

    

    “Certificate
of Designation” means the certificate of designation setting forth the rights,
preferences, privileges and restrictions of the Series A Preferred, in the form
attached hereto as Exhibit
A.

    

    “Certificate
of Incorporation” means the Third Amended and Restated Certificate of
Incorporation of the Company, as the same may have been amended and as in effect
as of the Closing Date, in the form attached hereto as Exhibit
B.

    

    “Claims”
has the meaning set forth in Section 3.5 of this
Agreement.

    

    “Closing”
has the meaning set forth in Section 2.2(a) of
this Agreement.

    

    “Closing
Date” has the meaning set forth in Section 2.2(a) of
this Agreement.

    

    “Code”
means the Internal Revenue Code of 1986, as amended, or any successor statue
thereto.

    

    “Common”
means Common Stock, $0.01 par value per share, of the Company, or any other
Capital Stock into which such stock is reclassified or
reconstituted.

    

    “Company”
has the meaning assigned to such term in the recitals to this
Agreement.

    

    “Company
Disclosure Schedule” means the schedule of exceptions and qualifications to the
representations and warranties made by the Company herein, as furnished to the
Purchasers concurrently with the execution and delivery of this
Agreement.

    

    “Compensation
Plans” means, without limitation, plans, arrangements or practices that provide
for severance pay, deferred compensation, incentive, bonus or performance awards
and stock ownership or stock options.

    

    “Contractual
Obligation(s)” means as to any Person, any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other instrument to which such Person is a
party or by which it or any of its property is bound.

    
      
         

      

      
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    “Copyright(s)”
means any foreign or United States copyright registrations and applications for
registration thereof, and any non-registered copyrights.

    

    “Environmental
Laws” means federal, state, local and foreign laws, principles of common law,
civil law, regulations and codes, as well as orders, decrees, judgments or
injunctions issued, promulgated, approved or entered thereunder relating to
pollution, protection of the environment or public health and
safety.

    

    “ERISA”
means the Employee Retirement Income Security Act of 1974, as
amended.

    

    “Exchange
Act” means the Securities Exchange Act of 1934, as amended, or any similar
successor federal statute and the rules and regulations thereunder, as the same
shall be in effect from time to time.

    

    “Financial
Statements” has the meaning set forth in Section 3.11 of this
Agreement.

    

    “GAAP”
means U.S. generally accepted accounting principles in effect from time to
time.

    

    “Governmental
Authority(ies)” when used in the singular, means any federal, state or local
governmental or quasi-governmental instrumentality, agency, board, commission or
department or any regulatory agency, bureau, commission or authority and, when
used in the plural, means all such entities.

    

    “Indebtedness”
means, as to any Person, (a) all obligations of such person for borrowed money
(including, without limitation, reimbursement and all other obligations with
respect to surety bonds, letters of credit and bankers’ acceptances, whether or
not matured), (b) all obligations of such person evidenced by notes, bonds,
debentures or similar instruments, (c) all obligations of such person to pay the
deferred purchase price of property or services, except trade accounts payable
and accrued commercial or trade liabilities arising in the ordinary course of
business, (d) all interest rate and currency swaps, caps, collars and similar
agreements or hedging devices under which payments are obligated to be made by
such Person, whether periodically or upon the happening of a contingency, (e)
all indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property), (f)
all obligations of such Person under leases which have been or should be, in
accordance with GAAP, recorded as capital leases and (g) all indebtedness
secured by any Lien (other than Liens in favor of lessors under leases other
than leases included in clause (f)) on any property or asset owned or held by
that Person regardless of whether the indebtedness secured thereby shall have
been assumed by that Person or is non-recourse to the credit of that
Person.

    
      
         

      

      
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    “Intellectual
Property Rights” means Copyrights, Patents, Trade Secrets, Trademarks, Internet
Assets, Mask Works, software (excluding “off the shelf” software) and other
proprietary rights in intellectual property existing under Requirements of
Law.

    

    “Internet
Assets” mean any internet domain names and other computer user identifiers and
any rights in and to sites on the worldwide web, including rights in and to any
text, graphics, audio and video files and html or other code incorporated in
such sites.

    

    “Lien”
means any mortgage, deed of trust, pledge, hypothecation, assignment,
encumbrance, lien (statutory or other) or preference, priority, right or other
security interest or preferential arrangement of any kind or nature whatsoever
(excluding preferred stock and equity related preferences), including, without
limitation, those created by, arising under or evidencing substantially the same
economic effect as any of the foregoing.

    

    “Losses”
means all losses, Claims, or written threats thereof, damages, expenses
(including reasonable fees, disbursements and other charges of counsel incurred)
or other liabilities.

    

    “Mask
Works” means any mask works and registrations and applications for registrations
thereof.

    

    “Material
Adverse Effect” means, subject to any applicable cure or grace periods, a
material adverse effect upon any of (a) the financial condition, operations,
business or properties of the Company, except to the extent resulting from (i)
changes in general local, domestic, foreign, or international economic
conditions (except to the extent such change has a materially disproportionate
effect on the Company as compared to other similarly situated Persons in the
industry in which the Company operates), (ii) changes affecting generally the
industry or industries in which the Company operates (except to the extent such
change has a materially disproportionate effect on the Company as compared to
other similarly situated Persons in the industry in which the Company operates),
(iii) acts of war, sabotage or terrorism, military actions or the escalation
thereof, (iv) any changes in applicable laws or accounting rules or principles,
including, without limitation, changes in GAAP, (v) any action required by this
Agreement or (vi) the announcement of this Agreement or the transactions
contemplated hereby, (b) the ability of the Company to perform its material
obligations under this Agreement or any of the Transaction Documents or (c) the
legality, validity or enforceability of this Agreement or any of the Transaction
Documents.

    

    “Material
Company IP” has the meaning set forth in Section
3.21(b).

    
      
         

      

      
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    “Obligations”
means, collectively, all of the Company’s Indebtedness, liabilities and
Contractual Obligations.

    

    “Orders”
has the meaning set forth in Section 3.2 of this
Agreement.

    

    “Patent(s)”
means any foreign or United States patents and patent applications, including
any divisionals, continuations, continuations-in-part, substitutions or reissues
thereof, whether or not patents are issued on such applications and whether or
not such applications are modified, withdrawn or resubmitted.

    

    “Person”
means any individual or group of individuals, firm, corporation, partnership,
trust, incorporated or unincorporated association, joint venture, joint stock
company, limited liability company, Governmental Authority or other entity of
any kind, and shall include any successor (by merger or otherwise) of such
entity.

    

    “Permits”
has the meaning set forth in Section 3.6(b) of
this Agreement.

    

    “Purchased
Shares” has the meaning set forth in Section 2.1(a) of
this Agreement.

    

    “Purchasers”
has the meaning assigned to such term in the recitals to this
Agreement.

    

    “Registration
Rights Agreement” means the Registration Rights Agreement to be entered into
among the Company and the Purchasers under the conditions set forth herein, the
form of which is attached hereto as Exhibit
E.

    

     “Requirements
of Law” means, as to any Person, any law, statute, treaty, rule, regulation,
license or franchise or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable or binding upon such Person or
any of its property or to which such Person or any of its property is subject or
pertaining to any or all of the transactions contemplated or referred to
herein.

    

    “SEC”
means the Securities and Exchange Commission or any similar agency then having
jurisdiction to enforce the Act.

    

    “SEC
Documents” has the meaning set forth in Section 3.11 of this
Agreement.

    

    “Securities
Filings” means the filing of a Form D with the SEC under the Act and any filing
required to be filed with the any state by the Company in respect of its
issuance of the Series A Preferred.

    

    “Series A
Preferred” means the Company’s Series A Convertible Preferred
Stock.

    

    “Share
Purchase Price” means $2.32, the price per share of the Series A Preferred to be
paid by the Purchasers.

    
      
         

      

      
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    “Taxes”
has the meaning set forth in Section 3.12 of this
Agreement.

    

    “Trade
Secrets” means any scientific or technical information, design, process,
procedure, formula or improvement that derives independent economic value from
not being generally known, and not being readily ascertainable through proper
means, to the Company’s competitors or other persons who can obtain economic
value from its use.  To the fullest extent consistent with the
foregoing, and otherwise lawful, Trade Secrets shall include, without
limitation, information and documentation pertaining to the design,
specifications, testing, validation, implementation and customizing techniques
and procedures concerning the Company’s present and future products and
services.

    

    “Trademarks”
means any foreign or United States trademarks, service marks, trade dress, trade
names, brand names, designs and logos, corporate names, product or service
identifiers, whether registered or unregistered, and all registrations and
applications for registration thereof.

    

    “Transaction
Documents” means, collectively, this Agreement, the Warrants and the
Registration Rights Agreement.

    

    “Warrant
Shares” means the shares of Series A Preferred issuable upon exercise of the
Warrants in accordance with the terms thereof.

    

    “Warrants”
has the meaning assigned to such term in the recitals to this
Agreement.

    

    
      	
               
      

            	
              1.2

            	
              Accounting Terms;
      Financial Statements.

            

    

    

    All
accounting terms used herein not expressly defined in this Agreement shall have
the respective meanings given to them in accordance with sound accounting
practice.  The term “sound accounting practice” shall mean such
accounting practice as, in the opinion of the independent certified public
accountants regularly retained by the Company, conforms at the time to GAAP
applied on a consistent basis except for changes with which such accountants
concur.

    

    
      	
               
      

            	
              1.3

            	
              Knowledge of the
      Company.

            

    

    

    All
references to “Knowledge of the Company” or any similar phrase means the actual
knowledge of those individuals set forth on Schedule 1.3 of the
Company Disclosure Schedule or knowledge any such person would be reasonably
expected to have given their position with the Company.

    
      
         

      

      
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    ARTICLE
II

    PURCHASE
AND SALE OF SERIES A PREFERRED

    

    
      	
               
      

            	
              2.1

            	
              Purchase and Sale of
      Series A Preferred.

            

    

    

    
      	
               
      

            	
              (a)

            	
              Subject
      to the terms and conditions herein set forth, the Company agrees to issue
      and sell to the Purchasers, and each Purchaser agrees that it will
      purchase from the Company, on the Closing Date, such number of shares of
      Series A Preferred (all of the shares of Series A Preferred being
      purchased pursuant to this Section 2.1(a)
      being referred to herein as the “Purchased Shares”) and Warrants set forth
      opposite such Purchaser’s name on Schedule A
      hereto for the aggregate purchase price of Six Million Dollars
      ($6,000,000.00).

            

    

     

    
      	
               
      

            	
              (b)

            	
              The
      Purchased Shares shall have the preferences and rights set forth in the
      Certificate of Designation for the Series A
  Preferred.

            

    

     

    
      	
               
      

            	
              2.2

            	
              Closing.

            

    

    

    The
closing of the sale and purchase of the Purchased Shares and Warrants (the
“Closing”) shall take place at the offices of Third Security, LLC at 1881 Grove
Avenue, Radford, Virginia 24141, at 10:00 a.m., local time, on December 29,
2010, or at such other time, place and date that the Company and the Purchasers
may agree in writing (the “Closing Date”).  On the Closing Date, the
Company shall deliver the Purchased Shares and Warrants being acquired by each
of the Purchasers in the form of certificates issued in each Purchaser’s name
upon receipt by the Company of payment of the aggregate purchase price for such
Purchased Shares and Warrants, as set forth on Schedule A hereto, by
or on behalf of each Purchaser to the Company by certified check or by wire
transfer of immediately available funds to an account designated in writing by
the Company.

    

    
      	
               
      

            	
              2.3

            	
              Use of
      Proceeds.

            

    

    

    The
Company shall use the proceeds from the sale of the Purchased Shares and
Warrants in connection with the transactions contemplated by the Asset Purchase
Agreement and for other general corporate purposes.

    
      
         

      

      
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    ARTICLE
III

    REPRESENTATIONS,
WARRANTIES AND COVENANTS OF THE COMPANY

    

    Except as
set forth on the Company Disclosure Schedule, the Company hereby represents,
warrants and covenants to each Purchaser as follows:

    

    
      	
               
      

            	
              3.1

            	
              Corporate Existence
      and Power.

            

    

    

    The
Company (a) is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware; (b) has all requisite
corporate power and authority to own and operate its property, to lease the
property it operates as lessee and to conduct the business in which it is
currently, or is currently proposed to be, engaged; (c) is licensed and in
good standing under the laws of each jurisdiction to which its ownership, lease
or operation of property or the conduct of its business requires such
qualification, except to the extent the failure to do so would not have a
Material Adverse Effect; and (d) has the corporate power and authority to
execute, deliver and perform its obligations under this Agreement and each of
the other Transaction Documents.

    

    
      	
               
      

            	
              3.2

            	
              Authorization; No
      Contravention.

            

    

    

    The
execution, delivery and performance by the Company of this Agreement and each of
the other Transaction Documents and the transactions contemplated hereby and
thereby, including, without limitation, the sale, issuance and delivery of the
Purchased Shares (a) have been duly authorized by all necessary corporate action
of the Company; (b) do not contravene the terms of the Certificate of
Incorporation or the Bylaws; and (c) do not violate, conflict with or result in
any breach or contravention of, or the creation of any Lien under, any
Contractual Obligation or the judgment, injunction, writ, award, decree or order
of any nature (collectively, “Orders”) of any Governmental Authority against, or
binding upon, the Company, in each case in this clause (c), individually or in
the aggregate, as would have a Material Adverse Effect.

    

    
      	
               
      

            	
              3.3

            	
              Governmental
      Authorization; Third Party
Consents.

            

    

    

    Except as
set forth on Schedule
3.3 of the Company Disclosure Schedule and except for the filing of the
Securities Filings and the filing and acceptance of the Certificate of
Designation, no approval, consent, exemption, authorization or other action by,
or notice to, or filing with, any Governmental Authority or any other Person in
respect of any Requirement of Law, and no lapse of a waiting period under a
Requirement of Law, is necessary or required in connection with the execution,
delivery or performance (including, without limitation, the sale, issuance and
delivery of the Purchased Shares) by, or enforcement against the Company of this
Agreement and the other Transaction Documents or the transactions contemplated
hereby and thereby.

    
      
         

      

      
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              3.4

            	
              Binding
      Effect.

            

    

    

    This
Agreement and each of the other Transaction Documents have been duly executed
and delivered by the Company and constitute the legal, valid and binding
obligations of the Company enforceable against the Company in accordance with
their terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance or transfer, moratorium or
similar laws affecting the enforcement of creditors’ rights generally or by
general principles of equity relating to enforceability (regardless of whether
considered in a proceeding at law or in equity).

    

    
      	
               
      

            	
              3.5

            	
              Litigation.

            

    

    

    There are
no actions, suits, proceedings, claims, complaints, disputes, arbitrations or
investigations (collectively, “Claims”) pending or, to the Knowledge of the
Company, threatened, at law, in equity, in arbitration or before any
Governmental Authority against the Company.  To the Knowledge of the
Company, there is no fact, event or circumstance that is likely to give rise to
any Claim.  The Company has not received notice of any Order and no
Order has been issued by any court or other Governmental Authority against the
Company purporting to enjoin or restrain the execution, delivery or performance
of this Agreement or any of the other Transaction Documents to which it is a
party.

    

    
      	
               
      

            	
              3.6

            	
              Compliance with
      Laws.

            

    

    

    
      	
               
      

            	
              (a)

            	
              The
      Company is in compliance in all respects with all Requirements of Law and
      all Orders issued by any court or Governmental Authority, except where the
      failure to be in compliance would not have a Material Adverse
      Effect.

            

    

    

    
      	
               
      

            	
              (b)

            	
              The
      Company has all licenses, permits, orders and approvals of any
      Governmental Authority (collectively, “Permits”) that are necessary for
      the conduct of the business of the Company taken as a whole; such Permits
      are in full force and effect; and no violations are or have been recorded
      in respect of any Permit, except in each case, individually or in the
      aggregate, as would not have a Material Adverse
  Effect.

            

    

    

    
      	
               
      

            	
              (c)

            	
              No
      material expenditure is presently required by the Company to comply with
      any existing Requirement of Law or
Order.

            

    

    
      
         

      

      
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              (d)

            	
              None
      of the Company, any subsidiary or any director, officer, or employee of,
      or, to the Knowledge of the Company, any agent or other person associated
      with or acting on behalf of the Company or any subsidiary has, directly or
      indirectly: (a) used any funds of the Company or any subsidiary for
      unlawful contributions, unlawful gifts, unlawful entertainment or other
      unlawful expenses relating to political activity; (b) made any unlawful
      payment to foreign or domestic governmental officials or employees or to
      foreign or domestic political parties or campaigns from funds of the
      Company or any subsidiary; (c) violated any provision of the Foreign
      Corrupt Practices Act of 1977, as amended, rule or regulation issued by
      the U.S. Office of Foreign Assets Control (“OFAC”) of the U.S. Treasury
      Department, the Financial Action Task Force on Money Laundering
      (“FATF”)  or the U.S. Secretary of the Treasury under Section
      311 or 312 of the USA PATRIOT Act or any similar Requirements of Law; (d)
      established or maintained any unlawful fund of monies or other assets of
      the Company or any subsidiary; (e) made any fraudulent entry on the books
      or records of the Company or any subsidiary; or (f) made any unlawful
      bribe, unlawful rebate, unlawful payoff, unlawful influence payment,
      unlawful kickback or other unlawful payment to any person, private or
      public, regardless of form, whether in money, property or services, to
      obtain favorable treatment in securing business, to obtain special
      concessions for the Company or any subsidiary, to pay for favorable
      treatment for business secured or to pay for special concessions already
      obtained for the Company or any
subsidiary.

            

    

    
      
         

      

      
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              3.7

            	
              Capitalization.

            

    

    

    On the
Closing Date, after giving effect to the issuance of the Purchased Shares to
each of the Purchasers in accordance with the terms hereof, the authorized
Capital Stock shall consist of (a) 100,000,000 shares of Common, of which
49,289,672 will be outstanding and issued; and (b) 15,000,000 shares of Series A
Preferred, of which 2,586,205 shares will be outstanding and
issued.  Set forth on Schedule 3.7 of the Company Disclosure Schedule
is a true and complete list of (i) the stockholders of record of the Company,
and, opposite the name of each such stockholder of record, the amount of all
Capital Stock owned by such stockholder and (ii) the holders of all outstanding
options, warrants, conversion privileges, or other rights to purchase or
otherwise acquire any authorized but unissued shares of Capital Stock or other
proprietary interests (collectively, “Options”) and, opposite the name of each
such holder, the amount of all Options of the Company owned by such
holder.  The Company has reserved a sufficient number of shares of
Series A Preferred for issuance of the Warrant Shares and a sufficient number of
shares of Common for issuance upon conversion of the Purchased Shares and the
Warrant Shares, plus such additional number of shares of Common as may be
necessary upon the application of the anti-dilution provisions of the Series A
Preferred set forth in the Certificate of Designation.  The Purchased
Shares and the Warrant Shares are duly authorized, and, assuming the accuracy of
the representations and warranties of the Purchasers set forth in Article IV and
the Warrants, as applicable, when issued to the Purchasers pursuant to the terms
of this Agreement and the Warrants, as applicable, will be validly issued, fully
paid and nonassessable and, assuming the accuracy of the representations and
warranties of the Purchasers in Sections 4.5, 4.6, and 4.7 hereof and the
Warrants, as applicable, will be issued in compliance with (or pursuant to
exemptions under) the registration and qualification requirements of all
applicable securities laws.  The shares of Common issuable upon
conversion of the Purchased Shares and the Warrant Shares are duly authorized
and, when issued in compliance with the provisions of the Certificate of
Incorporation, including the Certificate of Designation, will be validly issued,
fully paid and nonassessable and, assuming the accuracy of the representations
and warranties of the Purchasers in Sections 4.5, 4.6, and 4.7 hereof, will be
issued in compliance with (or pursuant to exemptions under) the registration and
qualification requirements of all applicable securities laws.  If at
any time after the date hereof, the Company does not have a sufficient number of
Common authorized and available for issuance upon conversion of the Purchased
Shares and/or the Warrant Shares, the Company and the Purchasers will jointly
cooperate with one another in obtaining the necessary stockholder approval to
increase the number of authorized shares of Common at the Company’s next annual
meeting of stockholders; provided, however, that if
the Purchasers so request in writing, in lieu of waiting until the next annual
meeting of stockholders, the Company shall call and hold a special meeting of
its stockholders within sixty (60) days of the date such writing is given by the
Purchasers for the sole purpose of increasing the number of authorized shares of
Common (such meeting, a “Special Meeting”), and the Company and the Purchasers
will jointly cooperate with one another in obtaining the necessary stockholder
approval at such Special Meeting.  Notwithstanding the foregoing, the
Company will not be required to hold a Special Meeting within 3 months of (i)
the Company's most recent annual meeting of stockholders or (ii) the one-year
anniversary of the Company's most recent annual meeting of
stockholders.  The outstanding shares of Capital Stock of the Company
are all duly authorized, validly issued, fully paid and nonassessable, and were
issued in compliance with (or pursuant to exemptions under) the registration and
qualification requirements of all applicable securities laws.  The
Company does not own directly or indirectly, nor has it made any investment in,
any Capital Stock of or ownership interest in any other Person.

    

    
      	
               
      

            	
              3.8

            	
              No Default or Breach;
      Contractual Obligations.

            

    

    

    The
Company has not received notice of, and is not in default under, or with respect
to, any Contractual Obligation in any respect, which, individually or together
with all such defaults, would have a Material Adverse Effect.  All
Contractual Obligations of the Company are valid, in full force and effect and
binding upon the Company, and to the Knowledge of the Company, the other parties
thereto except in each case, individually or in the aggregate, as would not have
a Material Adverse Effect.  To the Knowledge of the Company, no other
party to any such Contractual Obligation is in default thereunder, nor does any
condition exist that with notice or lapse of time or both would constitute a
default thereunder, except in each case, individually or in the aggregate, as
would not have a Material Adverse Effect.

    
      
         

      

      
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              3.9

            	
              Title to Real
      Property.

            

    

    

    The
Company has good, record and marketable title in fee simple to, or holds
interests as lessee under leases in full force and effect in, all real property
used in connection with its business or otherwise owned or leased by it, except
for such defects in title as would not, individually or in the aggregate, have a
Material Adverse Effect.

    

    
      	
               
      

            	
              3.10

            	
              FIRPTA.

            

    

    

    The
Company is not a “foreign person” within the meaning of Section 1445 of the
Code.

    

    
      	
               
      

            	
              3.11

            	
              SEC Documents;
      Financial Statements.

            

    

    

    The
Common is registered pursuant to Section 12(b) of the Exchange
Act.  During the two-year period preceding the Closing Date, the
Company has timely filed all reports, schedules, forms, statements and other
documents required to be filed by it with the SEC pursuant to the reporting
requirements of the Exchange Act (the “SEC Documents”).  At the times
of their respective filings, the SEC Documents complied in all material respects
with the requirements of the Exchange Act and the rules and regulations of the
SEC promulgated thereunder and other federal, state and local laws, rules and
regulations applicable to such documents.  At the times of their
respective filings, the SEC Documents did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.  The Company currently
meets the “registrant eligibility” requirements set forth in the general
instructions to Form S-3 to enable the registration of the Common.  As
of their respective dates, the financial statements of the Company included in
the SEC Documents (the “Financial Statements”) complied in all material respects
with applicable accounting requirements and the published rules and regulations
of the SEC or other applicable rules and regulations with respect
thereto.  Such financial statements have been prepared in accordance
with GAAP (except (i) as may be otherwise indicated in such financial statements
or the notes thereto or (ii) in the case of unaudited interim statements, to the
extent they may not include footnotes or may be condensed or summary
statements), and fairly present in all material respects the consolidated
financial position of the Company as of the dates thereof and the results of
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments).

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              3.12

            	
              Taxes.

            

    

    

    
      	
               
      

            	
              (a)

            	
              The
      Company has paid all federal, state, county, local, foreign and other
      taxes, including, without limitation, income taxes, estimated taxes,
      excise taxes, sales taxes, use taxes, gross receipts taxes, franchise
      taxes, employment and payroll related taxes, property taxes and import
      duties, whether or not measured in whole or in part by net income
      (hereinafter, “Taxes” or, individually, a “Tax”) that have come due and
      are required to be paid by it through the date hereof, and all
      deficiencies or other additions to Tax, interest and penalties owed by it
      in connection with any such Taxes, and shall timely pay any Taxes
      including additions, interest and penalties, required to be paid by it on,
      before or after the date hereof;

            

    

    

    
      	
               
      

            	
              (b)

            	
              the
      Company has timely filed returns for Taxes that it is required to file on
      and through the date hereof and all information set forth in such Tax
      returns is correct and complete in all material
  respects;

            

    

    

    
      	
               
      

            	
              (c)

            	
              with
      respect to all Tax returns of the Company, (i) except as set forth in
      Schedule
      3.12, there is no unassessed tax deficiency proposed or to the
      Knowledge of the Company threatened against the Company and (ii) except as
      set forth in Schedule 3.12,
      no audit is in progress and no extension of time is in force with respect
      to any date on which any return for Taxes was or is to be filed and no
      waiver or agreement is in force for the extension of time for the
      assessment or payment of any Tax;

            

    

    

    
      	
               
      

            	
              (d)

            	
              except
      as set forth in Schedule 3.12,
      the Company has neither agreed to nor is required to make any adjustments
      under Section 481(a) of the Code by reason of a change in accounting
      methods or otherwise; Schedule 3.12
      sets forth the status of federal income tax audits and state, local and
      foreign tax audits of the Tax returns of the Company for each taxable year
      for which the statute of limitations has not expired;
  and

            

    

    

    
      	
               
      

            	
              (e)

            	
              all
      liabilities for Taxes of the Company attributable to periods prior to the
      date hereof have been adequately provided for in the Financial Statements
      and the liability of the Company for Taxes has not and will not increase
      at any time up to the Closing Date other than in the ordinary course of
      business.

            

    

    

    
      	
               
      

            	
              3.13

            	
              Changes.

            

    

    

    Except as
disclosed in the SEC Documents, since December 31, 2009 there has not
been:

    

    
      	
               
      

            	
              (a)

            	
              any
      change in the assets, liabilities, financial condition or operating
      results of the Company from that reflected in the Financial Statements,
      except changes in the ordinary course of business that have not caused, in
      the aggregate, a Material Adverse
Effect;

            

    

    

    
      	
               
      

            	
              (b)

            	
              any
      damage, destruction or loss, whether or not covered by insurance, causing
      a Material Adverse Effect;

            

    

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (c)

            	
              any
      waiver or compromise by the Company of a valuable right or of a material
      debt owed, except in the ordinary course of
  business;

            

    

    

    
      	
               
      

            	
              (d)

            	
              any
      satisfaction or discharge of any Lien by the Company, except in the
      ordinary course of business;

            

    

    

    
      	
               
      

            	
              (e)

            	
              any
      material change or amendment to an Obligation, except in the ordinary
      course of business;

            

    

    

    
      	
               
      

            	
              (f)

            	
              receipt
      of notice that there has been a loss of, or material order cancellation
      by, any material customer of the Company or to the Knowledge of the
      Company any threatened termination, cancellation or limitation of, or any
      adverse modification or change in the business relationship of the
      Company, or the business of the Company, with any material customer or
      material supplier and, to the Knowledge of the Company, there exists no
      present condition or state of fact circumstances that would have a
      Material Adverse Effect or prevent the Company from conducting such
      business relationships or such business with any such material customer or
      material supplier in the same manner as heretofore conducted by the
      Company;

            

    

    

    
      	
               
      

            	
              (g)

            	
              any
      Lien, created by the Company, with respect to any of its material
      properties or assets, except Liens for taxes not yet due or payable or
      Liens arising in the ordinary course of
  business;

            

    

    

    
      	
               
      

            	
              (h)

            	
              any
      loans or guarantees made by the Company to or for the benefit of its
      employees, officers or directors, or any members of their immediate
      families, other than advances made in the ordinary course of
      business;

            

    

    

    
      	
               
      

            	
              (i)

            	
              any
      resignation or termination of employment of any Key
    Employee;

            

    

    

    
      	
               
      

            	
              (j)

            	
              any
      declaration, setting aside or payment or other distribution in respect of
      any of the Company’s Capital Stock (except for the reservation of shares
      of Capital Stock pursuant to this Agreement and the Transaction
      Documents), or any direct or indirect redemption, purchase or other
      acquisition of any such stock by the Company;
or

            

    

    

    
      	
               
      

            	
              (k)

            	
              any
      binding agreement or commitment by the Company to do any of the things
      described in this Section
      3.13.

            

    

    

    
      	
               
      

            	
              3.14

            	
              Investment
      Company.

            

    

    

    The
Company is not an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              3.15

            	
              Private
      Offering.

            

    

    

    No form
of general solicitation or general advertising was used by the Company or its
representatives in connection with the offer or sales of the Purchased
Shares.  Assuming the accuracy of the representations and warranties
of the Purchasers, no registration of the Purchased Shares, pursuant to the
provisions of the Act or any state securities or “blue sky” laws, will be
required by the offer, sale or issuance of the Purchased Shares.

    

    
      	
               
      

            	
              3.16

            	
              Employee
      Matters.

            

    

    

    
      	
               
      

            	
              (a)

            	
              Schedule 3.16
      contains a list of all of the individuals who are in the employ of the
      Company (“Employees”), including the names, titles and compensation of
      each.  Schedule 3.16
      lists (i) all increases in compensation of such Employees during the
      previous 12 months other than increases in salary in the ordinary course
      of business consistent with the Company’s policies and (ii) any increases
      in compensation of such Employees that have not yet been effected but
      which are valid Contractual Obligations of the Company.  To the
      Company’s Knowledge, no Employee is a party to or is otherwise bound by
      any agreement or arrangement (including, without limitation, any license,
      covenant or commitment of any nature), or subject to any Order, (i) that
      would conflict with such Employee’s obligation diligently to promote and
      further the interests of the Company or (ii) that would conflict with the
      Company’s business as now conducted.  The Company has complied
      with all Requirements of Law relating to the employment of labor,
      including provisions relating to wages, hours, equal opportunity,
      collective bargaining and payment of Social Security and other taxes,
      except in each case, individually or in the aggregate, as would not have a
      Material Adverse Effect.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Schedule
      3.16(b) contains a complete and accurate list of all written
      employment agreements for the Employees.  The employment
      agreements include, without limitation, employee leasing agreements,
      employee services agreements and non-competition
    agreements.

            

    

    

    
      	
               
      

            	
              (c)

            	
              No
      unwritten amendments have been made, whether by oral communication,
      pattern of conduct or otherwise, with respect to any Compensation Plans or
      employment agreements for the
Employees.

            

    

    

    
      	
               
      

            	
              (d)

            	
              None
      of the Employees listed on Schedule
      3.16(d) of the Company Disclosure Schedule (the “Key Employees”)
      has any plans to terminate his or her employment with the Company to the
      Company’s Knowledge, and the Company has no intention of terminating the
      employment of any Key Employee.

            

    

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              3.17

            	
              Labor
      Relations.

            

    

    

    
      	
               
      

            	
              (a)

            	
              The
      Company is not engaged in any unfair labor practice under any Requirement
      of Law;

            

    

    

    
      	
               
      

            	
              (b)

            	
              there
      is (i) no grievance or arbitration proceeding arising out of or under
      collective bargaining agreements pending or, to the Knowledge of the
      Company, threatened against the Company, and (ii) no strike, labor
      dispute, slowdown or stoppage pending or, to the Knowledge of the Company,
      threatened against the Company;

            

    

    

    
      	
               
      

            	
              (c)

            	
              the
      Company is not a party to any collective bargaining agreement or
      contract;

            

    

    

    
      	
               
      

            	
              (d)

            	
              there
      is no union representation question existing with respect to the employees
      of the Company; and

            

    

    

    
      	
               
      

            	
              (e)

            	
              to
      the Knowledge of the Company, no union organizing activities are taking
      place with respect to the employees of the
  Company.

            

    

    

    
      	
               
      

            	
              3.18

            	
              Employee Benefit
      Plans.

            

    

    

    The
Company has no actual or contingent, direct or indirect, liability in respect of
any employee benefit plan or arrangement, including any plan subject to ERISA,
other than to administer and make contributions under or pay benefits pursuant
to the plans listed on Schedule 3.18
(collectively, the “Plans”).  All of the Plans are in compliance with
all applicable Requirements of Law except to the extent that noncompliance with
such Requirements of Law would not have a Material Adverse Effect.  No
Plan (a) is subject to Title IV of ERISA, or is otherwise a Defined Benefit
Plan, or is a multiple employer plan (within the meaning of Section 413(c) of
the Code); or (b) provides for post-retirement welfare benefits except to the
extent any such benefits are required by law or a “parachute payment” (within
the meaning of Section 280G(b) of the Code) except as set forth on Schedule
3.18.  The execution and delivery of this Agreement and each of
the other Transaction Documents, the purchase and sale of the Purchased Shares
and the consummation of the transactions contemplated hereby and thereby will
not result in any prohibited transaction by the Company within the meaning of
Section 406 of ERISA or Section 4975 of the Code.  Schedule 3.18 also
sets forth all Compensation Plans of the Company, other than compensation
disclosed on Schedule
3.16.

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              3.19

            	
              Title to
      Assets.

            

    

    

    The
Company owns and has good and valid title to all of its properties and assets
used in its business and reflected as owned in the Financial Statements or so
described in any Schedule hereto (collectively, the “Assets”), in each case free
and clear of all Liens, except for (a) Liens specifically described in the notes
to the Financial Statements, (b) Liens that would not, individually or in the
aggregate, have a Material Adverse Effect, or (c) Liens for Taxes that have not
yet become delinquent.

    

    
      	
               
      

            	
              3.20

            	
              Liabilities.

            

    

    

    The
Company has no material liabilities other than (i) liabilities fully and
adequately reflected or reserved against in the Financial Statements, (ii)
liabilities not required by GAAP to be set forth in the Financial Statements and
(iii) liabilities incurred since December 31, 2009 in the ordinary course of
business and that will not have a Material Adverse Effect.

    

    
      	
               
      

            	
              3.21

            	
              Intellectual
      Property.

            

    

    

    
      	
               
      

            	
              (a)

            	
              Except
      as provided on Schedule
      3.21(a) or in the agreements listed in Schedule
      3.21(c), the Company is the owner of or has the license or right to
      use, sell, license or dispose of all of the Intellectual Property Rights
      that are used in connection with the business of the Company as presently
      conducted, free and clear of all
Liens.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Schedule
      3.21(b) sets forth all of the registered Copyrights, Patents,
      patent applications, registered Trademarks, and domain names owned or
      licenses by the Company that are material to the business of the Company
      as currently conducted.  None of the Intellectual Property
      Rights that are material to the business of the Company as currently
      conducted (the “Material Company IP”) is subject to any outstanding Order,
      and no Claim is pending or, to the Knowledge of the Company, threatened,
      which challenges the validity, enforceability, use or ownership of the
      item.

            

    

    

    
      	
               
      

            	
              (c)

            	
              Schedule
      3.21(c) sets forth all licenses, sublicenses and other agreements
      under which the Company is either a licensor or licensee of any Material
      Company IP.  The Company has performed all material obligations
      imposed upon it thereunder, and the Company is not, nor to the Knowledge
      of the Company is any party thereto in breach of or default thereunder in
      any material respect, nor is there any event which with notice or lapse of
      time or both would constitute a default thereunder.  All of the
      licenses listed on Schedule
      3.21(c) are valid, enforceable and in full force and effect with
      respect to the Company and, to the Knowledge of the Company, with respect
      to the other party or parties to such licenses, and will continue to be so
      on identical terms immediately following the Closing, except as
      enforceability may be limited by applicable bankruptcy, insolvency,
      reorganization, fraudulent conveyance or transfer, moratorium or similar
      laws affecting the enforcement of creditors’ rights generally and by
      general principles of equity related to enforceability (regardless of
      whether considered in a proceeding at law or in
  equity).

            

    

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (d)

            	
              To
      the Knowledge of the Company none of the Material Company IP currently
      sold or licensed by the Company to any Person or used by or licensed to
      the Company infringes upon or otherwise violates any Intellectual Property
      Rights of others.

            

    

    

    
      	
               
      

            	
              (e)

            	
              No
      litigation is pending and no Claim has been made against the Company or,
      to the Knowledge of the Company, is threatened, contesting the right of
      the Company to sell or license the Material Company IP to any Person or
      use the Material Company IP presently sold or licensed to such Person or
      used by the Company.

            

    

    

    
      	
               
      

            	
              (f)

            	
              To
      the Knowledge of the Company, no Person is infringing upon or otherwise
      violating the Material Company IP.

            

    

    

    
      	
               
      

            	
              (g)

            	
              No
      former employer of any Employee, and no current or former client of any
      consultant of the Company, has made a claim, or to the Knowledge of the
      Company threatened to make a claim, against the Company that such Employee
      or such consultant is utilizing proprietary information of such former
      employer or client.

            

    

    

    
      	
               
      

            	
              (h)

            	
              To
      the Knowledge of the Company, no Employee is in material violation of any
      term of any employment agreement, patent or invention disclosure agreement
      or other contract or agreement relating to the relationship of such
      Employee with the Company.

            

    

    

    
      	
               
      

            	
              (i)

            	
              None
      of the Company’s Trade Secrets has been disclosed to any Person other than
      (i) employees, representatives and agents of the Company, (ii) as required
      pursuant to any filings with a Governmental Authority, (iii) when
      disclosure to a Person is pursuant to provisions in non-disclosure,
      consultant, license or other confidentiality agreements entered into by
      the Company or (iv) in connection with discussions with possible sources
      of financing for the Company subject to customary non-disclosure
      arrangements.

            

    

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    3.22       Potential Conflicts of
Interest.

    

    Except as
disclosed in the SEC Documents or as set forth on Schedule 3.22, during
the two-year period preceding the Closing Date, no event has occurred that would
be required to be reported by the Company pursuant to Item 404(d)(1) of
Regulation S-K promulgated by the SEC.

    

    3.23       Trade
Relations.

    

    Except as
set forth on Schedule
3.23, there exists no actual or, to the Knowledge of the Company,
threatened termination, cancellation or material limitation of, or any adverse
modification or change in, the business relationship of the Company, or the
business of the Company, with any customer or any group of customers whose
purchases are individually or in the aggregate material to the Company, or with
any material supplier of the Company, and, to the Knowledge of the Company,
there exists no present condition or state of fact or circumstances that would
have a Material Adverse Effect or prevent the Company from conducting such
business relationships or such business with any such customer, such group of
customers or such material supplier substantially in the same manner as
heretofore conducted by the Company.

    

    3.24       Outstanding
Borrowing.

    

    Schedule 3.24 sets
forth (a) the amount of all Indebtedness with respect to the Company as of the
date hereof, (b) the Liens that relate to such Indebtedness and that encumber
the Assets and (c) the name of each lender thereof.

    

    3.25       Insurance.

    

    The
Company maintains insurance with insurance companies in such amounts and
covering such risks as are usually and customarily carried by Persons engaged in
the business conducted by the Company.  Such policies and binders are
valid and enforceable in accordance with their terms and are in full force and
effect.  None of such policies will be affected by, or terminate or
lapse by reason of, any transaction contemplated by this Agreement or any of the
other Transaction Documents.

    

    3.26       Minute
Records.

    

    All
minutes and written consents since January 1, 2008 of the Board of Directors and
stockholders of the Company have been provided or made available to each of the
Purchasers.  The minutes and written consents contain a complete
summary of all meetings of the Board of Directors and stockholders since January
1, 2008 and reflect all transactions referred to in such minutes and written
consents accurately in all material respects.

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    3.27       Environmental
Matters.

    

    The
Company is and has been in compliance in all respects with all applicable
Environmental Laws except for failures to be in compliance that would not,
individually or in the aggregate, have a Material Adverse
Effect.  There is no Claim pending or, to the Knowledge of the
Company, threatened against the Company pursuant to Environmental Laws that
would reasonably be expected to result in a fine, penalty or other obligation,
cost or expense that would have a Material Adverse Effect; and, there are no
past or present events, conditions, circumstances, activities, practices,
incidents, agreements, actions or plans which may prevent compliance with, or
which have given rise to or will give rise to liability under, Environmental
Laws except in each case, individually or in the aggregate, as has not had or
would not have a Material Adverse Effect.

    

    3.28       Broker’s, Finder’s or
Similar Fees.

    

    Except as
set forth on Schedule
3.28, there are no brokerage commissions, finder’s fees or similar fees
or commissions payable by the Company in connection with the transactions
contemplated hereby based on any agreement, arrangement or understanding with
the Company or any action taken by any such Person.

    

    3.29       Accountants.

    

    McGladrey
& Pullen, LLP, whose report on the financial statements of the Company is
filed with the SEC in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2009, were, at the time such report was issued, independent
registered public accountants as required by the Act.  Except as
described in the SEC Documents and as preapproved in accordance with the
requirements set forth in Section 10A of the Exchange Act, to the Knowledge of
the Company, McGladrey & Pullen, LLP has not engaged in any non-audit
services prohibited by subsection (g) of Section 10A of the Exchange Act on
behalf of the Company.

    

    3.30       Internal
Controls.

    

    The
Company has established and maintains a system of internal accounting controls
sufficient to provide reasonable assurances that:  (i) transactions
are executed in accordance with management’s general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with GAAP and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with management’s
general or specific authorization; and (iv) the recorded accountability for
assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    3.31       Corporate
Governance.

    

    The Board
of Directors meets the independence requirements of, and has established an
audit committee that meets the independence requirements of, the rules and
regulations of the SEC.  The Audit Committee has reviewed the adequacy
of its charter within the past 12 months.

    

    3.32       Disclosure
Controls.

    

    The
Company has established and maintains disclosure controls and procedures (as
such term is defined in Rules 13a-15 and 15d-15 under the Exchange
Act).  Since the date of the most recent evaluation of such disclosure
controls and procedures, there have been no significant changes in internal
controls or in other factors that could significantly affect internal controls,
including any corrective actions with regard to significant deficiencies and
material weaknesses.  The Company is in compliance in all material
respects with all provisions currently in effect and applicable to the Company
of the Sarbanes-Oxley Act of 2002, and all rules and regulations promulgated
thereunder or implementing the provisions thereof.

    

    3.33       No Undisclosed Events or
Circumstances.

    

    Except as
disclosed in the SEC Documents, since December 31, 2009, except for the
consummation of the transactions contemplated herein, to the Company’s
Knowledge, no event or circumstance has occurred or exists with respect to the
Company or its businesses, properties, prospects, operations or financial
condition, which, under any Requirement of Law, requires public disclosure or
announcement by the Company but which has not been so publicly announced or
disclosed.

    

    3.34       Application of Takeover
Provisions.

    

    The
issuance of the Series A Preferred and Warrants pursuant hereto and the
Purchasers’ ownership thereof is not prohibited by the business combination
statutes of the state of Delaware or the Certificate of
Incorporation.  The Company has not adopted any stockholder rights
plan, “poison pill” or similar arrangement that would trigger any right,
obligation or event as a result of the issuance of such securities and the
Purchasers’ ownership of such securities and there are no similar anti-takeover
provisions under the Certificate of Incorporation.  In addition, the
Company covenants and agrees that, from and after the Closing Date, it will not
adopt any such anti-takeover provisions, whether under its Certificate or
otherwise, that would be applicable to the Purchasers or any of their respective
Affiliates.

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    3.35       No Stockholder
Approval.

    

    No
approval of the stockholders of the Company is required under law or otherwise
for the Company to issue and deliver to the Purchasers the shares of Series A
Preferred and the Warrants as contemplated hereby.

    

    3.36       Disclosure.

    

    
      	
               
      

            	
              (a)

            	
              Agreement and Other
      Documents.  This Agreement and the documents and
      certificates furnished to the Purchasers by the Company, including but not
      limited to the SEC Documents, do not contain any untrue statement of a
      material fact or omit to state a material fact necessary in order to make
      the statements contained herein or therein, in the light of the
      circumstances under which they were made, not
  misleading.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Material Adverse
      Effects.  To the Knowledge of the Company, there is no
      fact which the Company has not disclosed to each of the Purchasers in
      writing which would have a Material Adverse
  Effect.

            

    

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    ARTICLE
IV

    REPRESENTATIONS
AND WARRANTIES OF THE PURCHASERS

    

    Each
Purchaser hereby represents and warrants to the Company as follows:

    

    
      	
               
      

            	
              4.1

            	
              Existence and
      Power.

            

    

    

    The
Purchaser is duly organized, validly existing and in good standing under the
laws of the Commonwealth of Virginia and has the power and authority to execute,
deliver and perform its obligations under this Agreement and each of the other
Transaction Documents.

    

    
      	
               
      

            	
              4.2

            	
              Authorization; No
      Contravention.

            

    

    

    The
execution, delivery and performance by the Purchaser of this Agreement and each
of the other Transaction Documents to which it is a party and the transactions
contemplated hereby and thereby, including, without limitation, the purchase of
the Purchased Shares, (a) have been duly authorized by all necessary action, (b)
do not contravene the terms of the Purchaser’s organizational documents, or any
amendment thereof, and (c) do not violate, conflict with or result in any breach
or contravention of or the creation of any Lien under, any Contractual
Obligation of the Purchaser, or any Orders of any Governmental Authority or
Requirement of Law applicable to the Purchaser in each case, individually or in
the aggregate, as would have a material adverse effect on (i) the ability of the
Purchaser to perform its material obligations under this Agreement or any of the
other Transaction Documents or (ii) the legality, validity or enforceability of
this Agreement or any of the other Transaction Documents.

    

    
      	
               
      

            	
              4.3

            	
              Governmental
      Authorization; Third Party
Consents.

            

    

    

    No
approval, consent, exemption, authorization, or other action by, or notice to,
or filing with, any Governmental Authority or any other person with respect to
any Requirement of Law, and no lapse of a waiting period under any Requirement
of Law, is necessary or required in connection with the execution, delivery or
performance (including, without limitation, the purchase of the Purchased
Shares) by, or enforcement against, the Purchaser of this Agreement and each of
the other Transaction Documents to which the Purchaser is a party or the
transactions contemplated hereby and thereby.

    

    
      	
               
      

            	
              4.4

            	
              Binding
      Effect.

            

    

    

    This
Agreement and each of the other Transaction Documents to which the Purchaser is
a party have been duly executed and delivered by the Purchaser and constitute
the legal, valid and binding obligations of the Purchaser, enforceable against
the Purchaser in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance or transfer, moratorium or similar laws affecting the enforcement of
creditors’ rights generally or by equitable principles relating to
enforceability (regardless of whether considered in a proceeding at law or in
equity).

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              4.5

            	
              Purchase for Own
      Account.

            

    

    

    The
Purchased Shares, Warrants and the shares of Capital Stock issuable upon
conversion thereof that are being acquired by the Purchaser pursuant to this
Agreement are being or will be acquired for its own account and with no
intention of distributing or reselling such securities or any part thereof in
any transaction that would be in violation of the securities laws of the United
States of America, or any state, without prejudice, however, to the rights of
the Purchaser at all times to sell or otherwise dispose of all or any part of
such securities under an effective registration statement under the Act, or
under an exemption from such registration available under the Act.  If
the Purchaser should in the future decide to dispose of any of such securities,
the Purchaser understands and agrees that it may do so only in compliance with
the Act and applicable state securities laws, as then in effect.

    

    
      	
               
      

            	
              4.6

            	
              Restricted
      Securities.

            

    

    

    The
Purchaser understands that the Purchased Shares will not be registered at the
time of their issuance under the Act for the reason that the sale provided for
in this Agreement is exempt pursuant to Section 4(2) of the Act and that the
reliance of the Company on such exemption is predicated in part on the
Purchaser’s representations set forth herein.  The Purchaser
represents that it is experienced in evaluating companies such as the Company,
has such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of its investment and has the ability
to suffer the total loss of its investment.  The Purchaser further
represents that it has had the opportunity to ask questions of and receive
answers from the Company concerning the terms and conditions of the offering and
to obtain additional information to such Purchaser’s satisfaction.

    

    
      	
               
      

            	
              4.7

            	
              Accredited Investor
      Status.

            

    

    

    The
Purchaser is an “accredited investor” as that term is defined by Rule 501 of
Regulation D promulgated under the Act.

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              4.8

            	
              Litigation.

            

    

    

    There are
no Claims pending or, to the knowledge of the Purchaser, threatened, at law, in
equity, in arbitration or before any Governmental Authority against the
Purchaser that, individually or in the aggregate, would have a material adverse
effect on (i) the ability of the Purchaser to perform its material obligations
under this Agreement or any of the other Transaction Documents or (ii) the
legality, validity or enforceability of this Agreement or any of the other
Transaction Documents.  No Order has been issued by any court or other
Governmental Authority against the Purchaser purporting to enjoin or restrain
the execution, delivery or performance of this Agreement or any of the other
Transaction Documents.

    

    
      	
               
      

            	
              4.9

            	
              Broker’s, Finder’s or
      Similar Fees.

            

    

    

    There are
no brokerage commissions, finder’s fees or similar fees or commissions payable
by the Purchaser, in connection with the transactions contemplated hereby based
on any agreement, arrangement or understanding with the Purchaser or any action
taken by the Purchaser.

    

    
      	
               
      

            	
              4.10

            	
              Inquiries and Access;
      No Reliance.

            

    

    

    The
Company has provided the Purchaser the opportunity to ask questions of the
Company and has provided full access to its facilities and personnel in response
to any request therefor that the Purchaser and his or its purchaser
representative(s), if any, have made, concerning the Company and its activities,
and all other matters relating to the operations of the Company and the offering
and sale of the Purchased Shares.  Such Purchaser acknowledges that he
or it is not relying upon any other investor or any officer, director,
stockholder, employee, agent, partner or Affiliate of any such investor in
making his or its investment, or decision to invest, in the Company or in
monitoring such investment.  In addition, the purchase of the
Purchased Shares and the consummation of the transactions contemplated hereunder
by the Purchaser are not done in reliance upon any warranty or representation
by, or information from, the Company of any sort, oral or written, except the
warranties and representations specifically set forth in this Agreement
(including the schedules and exhibits hereto) and in any certificates required
to be delivered to the Purchaser by the Company hereunder and
thereunder.  Such purchase and consummation are instead done entirely
on the basis of the Purchaser’s own investigation, analysis, judgment and
assessment of the present and potential value and earning power of the Company
as well as those representations and warranties by the Company specifically set
forth in this Agreement (including the schedules and exhibits hereto) and in any
certificates required to be delivered to the Purchaser by the Company hereunder
and thereunder.  In no respect does this Section 4.10 limit
the representations and warranties contained in Article III of this
Agreement.

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

    ARTICLE
V

    CONDITIONS
TO THE OBLIGATION OF THE PURCHASERS TO CLOSE

    

    The
obligation of each of the Purchasers (i) to purchase the Purchased Shares and
Warrants pursuant to the terms of this Agreement and (ii) to perform any
obligations hereunder with respect to the Closing shall be subject to the
satisfaction as reasonably determined by, or waiver by, each of the Purchasers
of the following conditions on or before the Closing Date.

    

    
      	
               
      

            	
              5.1

            	
              Representations and
      Warranties.

            

    

    

    The
representations and warranties of the Company contained in Article III hereof
shall be true and correct at and on the Closing Date as if made at and on such
date.

    

    
      	
               
      

            	
              5.2

            	
              Compliance with this
      Agreement.

            

    

    

    The
Company shall have performed and complied with all of its agreements and
conditions set forth herein that are required to be performed or complied with
by the Company on or before the Closing Date.

    

    
      	
               
      

            	
              5.3

            	
              Secretary’s
      Certificate.

            

    

    

    The
Secretary of the Company shall deliver to each of the Purchasers a certificate
certifying from the Company, in form and substance satisfactory to each of the
Purchasers, dated the Closing Date and signed by the Secretary of the Company,
certifying (a) that the attached copies of the Certificate of Incorporation,
Certificate of Designation, the Bylaws and resolutions of the Board of Directors
approving this Agreement and each of the other Transaction Documents to which
the Company is a party and the transactions contemplated hereby and thereby, are
all true, complete and correct and remain unamended and in full force and effect
and (b) as to the incumbency and specimen signature of each officer of the
Company executing this Agreement, each other Transaction Document and any other
document delivered in connection herewith on behalf of the Company.

    

    
      	
               
      

            	
              5.4

            	
              Filing of the
      Certificate of Designation.

            

    

    

    The
Certificate of Designation shall have been duly filed by the Company with and
accepted by the Delaware Secretary of State and be in full force and
effect.

    

    
      	
               
      

            	
              5.5

            	
              Registration Rights
      Agreement.

            

    

    

    As of the
Closing Date, the Company and the Purchasers shall have duly executed and
delivered the Registration Rights Agreement.

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              5.6

            	
              Consents and
      Approvals.

            

    

    

    Except
for the Securities Filings or with respect to the matters set forth on Schedule 3.3 of the
Company Disclosure Schedule, all consents, exemptions, authorizations, or other
action by, or notices to, or filings with, Governmental Authorities and other
Persons required in respect of all Requirements of Law and with respect to those
Contractual Obligations of the Company that are necessary in connection with the
execution, delivery or performance by, or enforcement against, the Company of
this Agreement and each of the other Transaction Documents shall have been
obtained and be in full force and effect, and each of the Purchasers shall have
been furnished with appropriate evidence thereof.

    

    
      	
               
      

            	
              5.7

            	
              No Application of
      Anti-Takeover Provisions.

            

    

    

    The
Company’s Board of Directors, to the extent permissible under Delaware law,
shall have taken all necessary action such that any provisions contained in the
Certificate of Incorporation or Delaware law that may apply to business
combinations or other transactions with affiliated stockholders or impact the
voting rights of affiliated stockholders shall not apply to the Purchasers or
their Affiliates, including but not limited to Section 203 of the Delaware
General Corporation Law.  The Company shall not have adopted any
stockholder rights plan, “poison pill” or similar arrangement, or any
anti-takeover provisions under its charter documents, that would trigger any
right, obligation or event as a result of the issuance of the Series A Preferred
or Warrants pursuant hereto to the Purchasers or the Purchasers’ ownership of
such securities, or the accumulation of Company securities acquired in the
market by the Purchasers or their respective Affiliates.

    

    
      	
               
      

            	
              5.8

            	
              No Material Judgment
      or Order.

            

    

    

    There
shall not be on the Closing Date any Order of a court of competent jurisdiction
or any ruling of any Governmental Authority or any condition imposed under any
Requirement of Law that, in the reasonable judgment of the Purchasers, would
prohibit the purchase of the Purchased Shares or subject any of the Purchasers
to any penalty or other onerous condition under or pursuant to any Requirement
of Law if the Purchased Shares and Warrants were to be purchased
hereunder.

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              5.9

            	
              No
      Litigation.

            

    

    

    No
action, suit proceeding, claim or dispute shall have been brought or otherwise
arisen at law, in equity, in arbitration or before any Governmental Authority
against the Company that, if adversely determined, would have, individually or
in the aggregate, a material adverse effect on (i) the ability of the Company to
perform its material obligations under this Agreement or any of the other
Transaction Documents or (ii) the legality, validity or enforceability of this
Agreement or any of the other Transaction Documents.

     

    
      	
               
      

            	
              5.10

            	
              Opinion of Company
      Counsel.

            

    

    

    Purchasers
and the Company shall have received from Paul, Hastings, Janofsky & Walker
LLP, counsel to the Company, an opinion, dated as of the Closing, in the form
attached hereto as Exhibit
F.

    

    
      	
               
      

            	
              5.11

            	
              Board of
      Directors.

            

    

    

    Immediately
after the Closing, the authorized number of directors of the Company shall be
five, who shall be (a) Rod Markin, (b) Antonius Schuh, (c) Craig Tuttle, (d)
Robert Patzig and (e) Doit L. Koppler.

    

    
      	
               
      

            	
              5.12

            	
              Preemptive
      Rights.

            

    

    

    All
stockholders of the Company having any preemptive, first refusal or other rights
with respect to the issuance of the Purchased Shares and Warrants shall have
irrevocably waived the same in writing.

    

    
      	
               
      

            	
              5.13

            	
              No Suspension of
      Trading.

            

    

    

    Trading
in the Common shall not have been suspended by the SEC or
otherwise.

    

    ARTICLE
VI

    CONDITIONS
TO THE OBLIGATIONS OF THE COMPANY TO CLOSE

    

    The obligation of the Company to issue
and sell the Purchased Shares and Warrants and the obligation of the Company to
perform its other obligations hereunder shall be subject to the satisfaction as
reasonably determined by, or written waiver by, the Company of the following
conditions on or before the Closing Date.

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              6.1

            	
              Representations and
      Warranties.

            

    

    

    The
representation and warranties of each of the Purchasers contained in Article IV hereof
shall be true and correct at and on the Closing Date as if made at and on such
date.

    

    
      	
               
      

            	
              6.2

            	
              Compliance with this
      Agreement.

            

    

    

    Each
Purchaser shall have performed and complied with all of the agreements and
conditions set forth herein that are required to be performed or complied with
by such Purchaser on or before the Closing Date.

    

    
      	
               
      

            	
              6.3

            	
              Registration Rights
      Agreement.

            

    

    

    Each
Purchaser shall have duly executed and delivered the Registration Rights
Agreement.

    

    
      	
               
      

            	
              6.4

            	
              No Material Judgment
      or Order.

            

    

    

    There
shall not be on the Closing Date any Order of a court of competent jurisdiction
or any ruling of any Governmental Authority or any condition imposed under any
Requirement of Law that, in the reasonable judgment of the Company, would
prohibit the sale of the Purchased Shares or Warrants or subject the Company to
any penalty or other onerous condition under or pursuant to any Requirement of
Law if the Purchased Shares or Warrants were to be purchased
hereunder.

    

    
      	
               
      

            	
              6.5

            	
              No
      Litigation.

            

    

    

    No
action, suit proceeding, claim or dispute shall have been brought or otherwise
arisen at law, in equity, in arbitration or before any Governmental Authority
against the Purchasers that, if adversely determined, would have, individually
or in the aggregate, a material adverse effect on (i) the ability of the
Purchasers to perform their respective material obligations under this Agreement
or any of the other Transaction Documents or (ii) the legality, validity or
enforceability of this Agreement or any of the other Transaction
Documents.

    

    
      	
               
      

            	
              6.6

            	
              Consents and
      Approvals.

            

    

    

    Except
for the Securities Filings, all consents, exemptions, authorizations, or other
action by, or notices to, or filings with, Governmental Authorities and other
Persons required in respect of all Requirements of Law and with respect to those
Contractual Obligations of the Purchasers that are necessary in connection with
the execution, delivery or performance by, or enforcement against, the
Purchasers of this Agreement shall have been obtained and be in full force and
effect, and the Company shall have been furnished with appropriate evidence
thereof.

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

    ARTICLE
VII

    MISCELLANEOUS

    

    7.1           Survival of Representations
and Warranties.

    

    All of
the representations and warranties made herein shall survive the execution and
delivery of this Agreement and expire twenty-four (24) months after the Closing
Date, except for (a) Sections 3.1, 3.2, 3.4, 3.7, 4.1, 4.2, 4.4, and 4.5 which
representations and warranties shall survive indefinitely, and (b) Section 3.12, which
shall survive until the later to occur of (i) the lapse of the statue of
limitations with respect to the assessment of any Tax to which such
representation and warranty related (including any extensions or waivers
thereof) and (ii) 60 days after the final administrative or judicial
determination of the Taxes to which such representation and warranty relates,
and no Claim with respect to Section 3.12 may be
asserted thereafter with the exception of Claims arising out of any fact,
circumstance, action or proceeding to which the party asserting such Claim shall
have given notice to the other parties to this Agreement prior to the
termination of such period of reasonable belief that a tax liability will
subsequently arise therefrom.

    

    7.2           Notices.

    

    All
notices, demands and other communications provided for or permitted hereunder
shall be made in writing and shall be by registered or certified first-class
mail, return receipt requested, telecopier, courier service or personal
delivery:

    

    
      	
               
      

            	
              (a)

            	
              if
      to the Company:

            

    

    

    Transgenomic,
Inc.

    12325
Emmet Street

    Omaha,
Nebraska 68164

    Attention:
Craig J. Tuttle

    Facsimile:  402-452-5461

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

    with a copy to:

    

    Paul, Hastings, Janofsky & Walker
LLP

    4747
Executive Drive, 12th Floor

    San
Diego, CA 92121

    Attention:  Carl R.
Sanchez

    Facsimile:  858-458-3130

    

    and

    

    
      	
               
      

            	
              (b)

            	
              if
      to the Purchasers:

            

    

    

    c/o Third
Security, LLC

    1881
Grove Avenue

    Radford,
Virginia 24141

    Attention:
Tad Fisher

    Facsimile:
540-633-7939

    

    with a copy to:

    

    Troutman
Sanders LLP

    Troutman
Sanders Building

    1001
Haxall Point

    Richmond, Virginia 23219

    Attention:
John Owen Gwathmey

    Facsimile:
804-698-5174

    

    All such
notices and communications shall be deemed to have been duly given when
delivered by hand, if personally delivered; when delivered by courier, if
delivered by commercial courier service; five (5) Business Days after being
deposited in the mail, postage prepaid, if mailed; and when receipt is
mechanically acknowledged, if telecopied.

    

    7.3         Successors and Assigns;
Third Party Beneficiaries.

    

    This
Agreement shall inure to the benefit of and be binding upon the successors and
permitted assigns of the parties hereto.  Subject to applicable
securities laws the Purchasers may assign any of their rights under any of the
Transaction Documents to any of their Affiliates.  The Company may not
assign any of their rights under this Agreement without the written consent of
the Purchasers.  No person other than the parties hereto and their
successors are intended to be beneficiaries of the provisions of this
Agreement.

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

    7.4         Amendment and
Waiver.

    

    
      	
               
      

            	
              (a)

            	
              No
      failure or delay on the part of the Company or Purchasers in exercising
      any right, power or remedy hereunder shall operate as a waiver thereof,
      nor shall any single or partial exercise of any such right, power or
      remedy preclude any other or further exercise thereof or the exercise of
      any other right, power or remedy.  The remedies provided for
      herein are cumulative and are not exclusive of any remedies that may be
      available to the Company or the Purchasers at law, in equity or
      otherwise.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Any
      amendment, supplement or modification of or to any provision of this
      Agreement, any waiver of any provision of this Agreement, and any consent
      to any departure by the Company or the Purchasers from the terms of any
      provision of this Agreement, shall be effective (i) only if it is made or
      given in writing and signed by the Company and the Purchasers, and (ii)
      only in the specific instance and for the specific purpose for which made
      or given.  Except where notice is specifically required by this
      Agreement, no notice to or demand on the Company in any case shall entitle
      the Company to any other further notice or demand in similar or other
      circumstances.

            

    

    

    7.5         Counterparts;
Facsimile.

    

    This
Agreement may be executed in any number of counterparts and by the parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the
same agreement, and may be delivered to the other parties hereto by facsimile or
similar electronic means.

    

    7.6         Headings.

    

    The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.

    

    7.7         Governing
Law.

    

    This
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware, without regard to the principles of conflicts of law
thereof.

    

    7.8         Severability.

    

    If any
one or more of the provisions contained herein, or the application thereof in
any circumstance, is held invalid, illegal or unenforceable in any respect for
any reason, the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions hereof shall not be in any
way impaired, unless the provision held invalid, illegal or unenforceable shall
substantially impair the benefits of the remaining provisions
hereof.

    
      
         

      

      
        32

        
          

        

      

      
         

      

    

    7.9         Rules of
Construction.

    

    Unless
the context otherwise requires, references to sections or subsections refer to
sections or subsections of this Agreement.

    

    7.10       Entire
Agreement.

    

    This
Agreement, together with the exhibits and schedules hereto, and the other
Transaction Documents are intended by the parties as a final expression of their
agreement and intended to be a complete and exclusive statement of the agreement
and understanding of the parties hereto in respect of the subject matter
contained herein and therein.  There are no restrictions, promises,
representations, warranties or undertakings, other than those set forth or
referred to herein or therein.  This Agreement, together with the
exhibits and schedules hereto, and the other Transaction Documents supersede all
prior agreements and understandings between the parties with respect to such
subject matter.

    

    7.11       Publicity;
Confidentiality.

    

    None of
the parties hereto shall issue a publicity release or public announcement or
otherwise make any disclosure concerning this Agreement or the transactions
contemplated hereby or the Purchasers without prior approval by the other
parties hereto; provided, however, that nothing in this
Agreement shall restrict the Purchasers or the Company from disclosing
information (a) that is already publicly available, (b) that was known to the
Purchasers on a non-confidential basis prior to its disclosure by the Company,
(c) that may be required or appropriate in response to any summons or subpoena
or in connection with any litigation, provided that the parties
will use reasonable efforts to notify the other party in advance of such
disclosure so as to permit such party to seek a protective order or otherwise
contest such disclosure, and such other party will use reasonable efforts to
cooperate, at the expense of the party trying to prevent such disclosure, with
such party in pursuing any such protective order, (d) to the Purchaser’s or the
Company’s officers, directors, agents, employees, members, partners, controlling
persons, auditors or counsel, (e) to Persons from whom releases, consents or
approvals are required, or to whom notice is required to be provided, pursuant
to the transactions contemplated by the Transaction Documents or (f) to the
prospective transferee in connection with any contemplated transfer of any of
the Purchased Shares or Warrants.  If any announcement is required by
law or the rules of any securities exchange or market on which shares of Common
are traded to be made by any party hereto, prior to making such announcement
such party will deliver a draft of such announcement to the other party and
shall give the other party reasonable opportunity to comment
thereon.

    
      
         

      

      
        33

        
          

        

      

      
         

      

    

    7.12       Further
Assurances.

    

    Each of
the parties shall execute such documents and perform such further acts, at the
expense of the requesting party, (including, without limitation, obtaining any
consents, exemptions, authorizations or other action by, or giving any notices
to, or making any filings with, any Governmental Authority or any other Person)
as may be reasonably required or desirable to carry out or to perform the
provisions of this Agreement.

    

    
      	
               
      

            	
              7.13

            	
              Expenses.  Each
      party hereto shall be responsible for its own fees and expenses associated
      with this Agreement and the closing of the transactions contemplated
      hereby; provided,
      however, that at
      the Closing the Company shall reimburse the Purchasers for all reasonable
      documented fees and expenses (including attorney’s fees) incurred by the
      Purchasers in connection with the transactions contemplated by this
      Agreement, up to a maximum of
$75,000.

            

    

    

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

     

    
      
        
           

        

        
          34

          
            

          

        

        
           

        

      

    

     

    IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered by their respective officers hereunto duly authorized on the date
first above written.

    

    
      
        
          
            
              
                	
                        COMPANY:

                      	
                        TRANSGENOMIC,
      INC.

                      	 
	 
      	 
      	 
      	 
	 
      	
                        By:

                      	
                        /s/ Craig J. Tuttle

                      	 
	 
      	 
      	
                        Craig
      J. Tuttle

                      	 
	 
      	 
      	
                        Chief
      Executive Officer and President

                      	 
	 
      	 
      	 
      	 
	
                        PURCHASERS:

                      	
                        THIRD
      SECURITY SENIOR STAFF 2008 LLC

                      	 
	 
      	 
      	 
      	 
	 
      	
                        By:

                      	
                        /s/ Randal J. Kirk

                      	 
	 
      	 
      	
                        Randal
      J. Kirk

                      	 
	 
      	 
      	
                        Manager

                      	 
	 
      	 
      	 
      	 
	 
      	
                        THIRD
      SECURITY STAFF 2010 LLC

                      	 
	 
      	 
      	 
      	 
	 
      	
                        By:

                      	
                        /s/ Randal J. Kirk

                      	 
	 
      	 
      	
                        Randal
      J. Kirk

                      	 
	 
      	 
      	
                        Manager

                      	 
	 
      	 
      	 
      	 
	 
      	
                        THIRD
      SECURITY INCENTIVE 2010 LLC

                      	 
	 
      	 
      	 
      	 
	 
      	
                        By:

                      	
                        /s/ Randal J. Kirk

                      	 
	 
      	 
      	
                        Randal
      J. Kirk

                      	 
	 
      	 
      	
                        Manager

                      	 

              

            

          

        

      

    

    

    [Signature
Page to Series A Convertible Preferred Stock Purchase
Agreement]

    
      
         

      

      
        35Unassociated Document

     

    Exhibit 4.2

    NONE OF
THIS WARRANT, THE SHARES OF SERIES A CONVERTIBLE PREFERRED STOCK TO BE ISSUED
UPON EXERCISE HEREOF OR THE SHARES OF COMMON STOCK TO BE ISSUED UPON CONVERSION
OF THE SERIES A CONVERTIBLE PREFERRED STOCK HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES OR “BLUE SKY” LAWS,
AND THE HOLDER OF THIS WARRANT REPRESENTS AND WARRANTS THAT THIS WARRANT HAS
BEEN, AND THE SHARES OF SERIES A CONVERTIBLE PREFERRED STOCK TO BE ISSUED UPON
EXERCISE HEREOF WILL BE, ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR FOR
RELEASE IN CONNECTION WITH, ANY DISTRIBUTION THEREOF.  NO SALE,
ASSIGNMENT, TRANSFER, GIFT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THIS
WARRANT OR THE SHARES OF SERIES A CONVERTIBLE PREFERRED STOCK TO BE ISSUED UPON
EXERCISE HEREOF MAY BE MADE EXCEPT AS SPECIFICALLY SET FORTH IN THIS
WARRANT.

    

    WARRANT
TO PURCHASE SHARES

    OF

    SERIES
A CONVERTIBLE PREFERRED STOCK

    OF

    TRANSGENOMIC,
INC.

    

    Warrant
No. A-[__]

    Issue
Date: December 29, 2010

    

    THIS IS TO CERTIFY THAT, FOR VALUE
RECEIVED, [_________] (“Holder”)
is entitled, subject to the terms set forth below, to purchase from Transgenomic, Inc., a Delaware
corporation (the “Company”),
[____________] shares of the Company’s Series A Convertible Preferred Stock,
$0.01 par value per share (the “Series A
Preferred”), subject to adjustment as provided in Section 9 (the “Warrant
Shares”), at the Purchase Price set forth in Section
3.

    

    1.           Issuance.  This
Warrant is issued to Holder by the Company pursuant to that certain Series A
Convertible Preferred Stock Purchase Agreement, dated December 29, 2010 (the
“Purchase
Agreement”).

    

    2.           Covenants as to Warrant
Shares.  The Company has reserved, and at all times during the
period this Warrant is outstanding shall reserve, a sufficient number of shares
of Series A Preferred for issuance upon the exercise of this
Warrant.  The Company has reserved, and at all times during the period
this Warrant is outstanding shall reserve, a sufficient number of shares of its
Common Stock, $0.01 par value per share (the “Common
Stock”), for issuance upon conversion of the Warrant Shares (the “Underlying
Common”).  The
Warrant Shares are duly authorized, and, when issued to the Holder pursuant to
the terms of this Warrant and the Purchase Agreement, will be validly issued,
fully paid and nonassessable and, assuming the accuracy of the representations
and warranties of Holder in the Purchase Agreement, will be issued in compliance
with the registration and qualification requirements of all applicable
securities laws.  The shares of Underlying Common are duly authorized
and, when issued in compliance with the provisions of the Company’s Certificate
of Incorporation (the “Certificate”),
will be validly issued, fully paid and nonassessable and will be issued in
compliance with the registration and qualification requirements of all
applicable securities laws.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    3.           Purchase Price; Number of
Shares; Notice of “Triggering Event.”  Subject to the terms and
conditions hereinafter set forth, the Holder is entitled, at any time from the
date hereof to the Expiration Date (as defined in Section 8), upon
surrender of this Warrant, the delivery of the Exercise Notice attached hereto
as Attachment I (the
“Exercise
Notice”), fully completed and duly executed, and the delivery of an
agreement to be bound by the terms and conditions of that certain Registration
Rights Agreement, dated as of December 29, 2010, among the Company, Holder and
certain of the Company’s stockholders (as such agreement may be amended from
time to time pursuant to the terms thereof) (the “Registration
Rights Agreement”), each at the office of the Company, or such other
address as the Company shall notify the Holder of in writing, to purchase from
the Company the Warrant Shares (as adjusted pursuant to Section 9) at a fixed
price per share of $2.32 (the “Purchase
Price”).  Until such time as this Warrant is exercised in full
or expires pursuant to the terms hereof, the Purchase Price and the number of
Warrant Shares issuable upon exercise of this Warrant are subject to adjustment
pursuant to Section
9.  Notwithstanding anything to the contrary set forth in this
Warrant, unless waived in writing by the Holder, the Company shall provide
written notice to Holder if any Triggering Event (defined below)
occurs.  A “Triggering
Event” shall be deemed to have occurred if:  (i) the Company’s
Board of Directors (the “Board”)
adopts a resolution approving a plan of merger or share exchange or a
transaction involving the sale of all or substantially all of the Company’s
assets (each, an “Extraordinary
Transaction”) and proposes to submit such Extraordinary Transaction to
the Company’s stockholders for approval, (ii) any tender offer or exchange offer
(whether by the Company or another person or entity) is commenced pursuant to
which holders of Common Stock are permitted to tender or exchange their shares
for other securities, cash or property, or (iii) there is a Change in Control
(as defined in the Certificate of Designation with respect to the Series A
Preferred).

    

    4.           Payment of Purchase
Price.

    

    (a)           Subject
to the conditions set forth in Section 3, this
Warrant may be exercised in full or in part by the Holder by payment in cash, by
wire transfer or by certified or official bank check payable to the order of the
Company, for the purchase price of the Warrant Shares to be purchased
hereunder.

    

    (b)           The
Holder may elect to receive, without the payment by the Holder of any additional
consideration, Warrant Shares equal to the value of this Warrant or any portion
hereof by the surrender of this Warrant or such portion to the Company, with the
redemption notice attached hereto as Attachment II (the “Redemption
Notice”) duly executed, at the office of the
Company.  Thereupon, the Company shall issue to the Holder such number
of fully paid and nonassessable Warrant Shares as is computed using the
following formula:

    

    X = Y (A-B)

         A

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    
      	
              where    

            	
              X =

            	
              the
      number of Warrant Shares to be issued to the Holder pursuant to this
      Section
      4(b).

            

    

    

    
      	
               
      

            	
              Y
      =

            	
              the number of shares
      covered by this Warrant in respect of which the net issue
      election is made pursuant to this Section
      4(b).

            

    

    
      
      

    

    

    
      	
               
      

            	
              A
      =

            	
              the
      fair market value (“FMV”)
      of one share of Series A Preferred on an as converted to Common Stock
      basis, as determined below, at the time the net issue election is made
      pursuant to this Section
      4(b).

            

    

    

    
      	
            	
              B =

            	
              the
      Purchase Price in effect under this Warrant at the time the net issue
      election is made pursuant to this Section
      4(b).

            

    

    

    For the
purposes of this Section 4(b), FMV
shall be determined at the time of exercise and shall mean the fair market value
of the shares of Common Stock determined as follows:

     

    (x)           if
the Common Stock is traded on a securities exchange, the value shall be deemed
to be the average of the closing prices of the Common Stock on such exchange
over the ten (10) trading day period ending three (3) days prior to the date of
determination;

     

    (y)           if
the Common Stock is actively traded over-the-counter, the value shall be deemed
to be the average of the closing bid over the ten (10) trading day period ending
three (3) days prior to the date of determination; or

     

    (z)           if
there is no active public market for the Common Stock, the value shall be the
fair market value thereof, as determined in good faith by the
Board.

    

    The Board
shall promptly respond in writing to a reasonable inquiry by the Holder as to
the FMV of the Series A Preferred for purposes of this Section
4(b).

    

    5.           Partial
Exercise.  For any partial exercise or redemption pursuant to
Section 4(a) or
4(b) hereof,
the Holder shall designate in the Exercise Notice or Redemption Notice (as the
case may be) the number of Warrant Shares that it wishes to purchase or the
aggregate number of underlying Warrant Shares represented by the portion of this
Warrant it wishes to redeem (as the case may be).  On any such partial
exercise or redemption, the Company at its expense shall forthwith issue and
deliver to the Holder a new warrant of like tenor, in the name of the Holder,
which shall be exercisable for such number of Warrant Shares which have not been
purchased upon such exercise or redemption.

    

    6.           Issuance; Issuance
Date.  As soon as practicable after the exercise of this
Warrant, and in any event within five (5) business days thereafter, the Company
at its expense will cause to be issued in the name of and delivered to the
Holder, a certificate or certificates for the number of Warrant Shares purchased
or acquired by the Holder as a result of such exercise, rounded down to the
nearest whole number.  The person or entity or persons or entites in
whose name or names any certificate representing shares of Series A Preferred is
issued hereunder shall be deemed to have become the holder of record of the
shares represented thereby at the close of business on the date this Warrant is
exercised with respect to such shares, whether or not the transfer books of the
Company shall be closed.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    7.           Warrant
Shares.  The Holder understands and agrees that all
certificates evidencing the shares to be issued to the Holder may bear the
following legend:

    

    THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER THE
ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.

    

    8.           Expiration Date; Automatic
Exercise.  This Warrant shall expire at the close of business
on December 28, 2015 (the “Expiration
Date”) and shall be void thereafter; provided, however, that in the event
that, upon the Expiration Date, the FMV of one Warrant Share (or other security
issuable upon the exchange hereof) as determined in accordance with Section 4(b) is
greater than the Purchase Price in effect on such date, then this Warrant shall
automatically be deemed on and as of such date to be exchanged pursuant to Section 4(b) as to
all Warrant Shares (or such other securities) for which it shall not previously
have been exchanged or converted into Series A Preferred (or if not then
outstanding, into such other class and series of securities into which the
Warrant Shares are then convertible), and the Company shall promptly deliver a
certificate representing such Warrant Shares (or such other securities) issued
upon such conversion to the Holder.

    

    9.           Adjustment of Number of
Warrant Shares Issuable Pursuant to this Warrant.

    

    (a)           Adjustment for Stock Splits
and Combinations.  If the Company shall at any time or from
time to time after the date that the first share of Series A Preferred is issued
(the “Original Issue
Date”) effect a subdivision of the outstanding Series A Preferred, the
number of Warrant Shares issuable hereunder shall be proportionately increased
and the Purchase Price shall be proportionately
decreased.  Conversely, if the Company shall at any time or from time
to time after the Original Issue Date combine the outstanding shares of Series A
Preferred into a smaller number of shares, the number of Warrant Shares issuable
hereunder shall be proportionately decreased and the Purchase Price shall be
proportionately increased.  Any adjustment under this Section 9(a) shall
become effective at the close of business on the date the subdivision or
combination becomes effective.

    

    (b)           Adjustment for Common Stock
Dividends and Distributions.  If the Company at any time or
from time to time after the Original Issue Date makes, or fixes a record date
for the determination of holders of Series A Preferred entitled to receive, a
dividend or other distribution payable in additional shares of Series A
Preferred, in each such event the number of Warrant Shares issuable hereunder
shall be proportionately increased and the Purchase Price shall be
proportionately decreased, as of the close of business on such record date;
provided, however, that
if such record date is fixed and such dividend is not fully paid or if such
distribution is not fully made on the date fixed therefor, the number of Warrant
Shares issuable hereunder and the Purchase Price shall be recomputed accordingly
as of the close of business on such record date and thereafter shall be adjusted
pursuant to this Section 9(b) to
reflect the actual payment of such dividend or distribution.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

    (c)           Adjustment for
Reclassification, Exchange and Substitution.  If at any time or
from time to time after the Original Issue Date, the Series A Preferred is
changed into the same or a different number of shares of any class or classes of
stock, whether by recapitalization, reclassification or otherwise (other than as
a result of a subdivision or combination of shares or stock dividend or a
reorganization, merger or consolidation in which the Company is the continuing
entity and which does not result in any change in the Series A Preferred) in any
such event this Warrant shall be exercisable for the kind and amount of stock
and other securities and property receivable upon such recapitalization,
reclassification or other change by holders of the maximum number of shares of
Series A Preferred for which this Warrant could have been exercised immediately
prior to such recapitalization, reclassification or change, all subject to
further adjustment as provided herein or with respect to such other securities
or property by the terms thereof.

    

    (d)           Reorganizations, Mergers,
Consolidations or Sales of Assets.  If at any time or from time
to time after the Original Issue Date, there is a Change in Control transaction
or other capital reorganization of the Series A Preferred (other than a
recapitalization, subdivision, combination, reclassification, exchange or
substitution of shares), as a part of such Change in Control transaction or
capital reorganization, this Warrant shall be deemed exercised and provision
shall be made so that the Holder shall thereafter be entitled to receive the
number of shares of stock or other securities or property to which a holder of
the number of shares of Series A Preferred deliverable upon exercise of this
Warrant would have been entitled on such Change in Control transaction or
capital reorganization, subject to adjustment in respect of such stock or
securities by the terms thereof.  In any such case, appropriate
adjustment shall be made in the application of the provisions of this Section 9 with
respect to the rights of the Holder after the Change in Control transaction or
capital reorganization to the effect that the provisions of this Section 9 shall be
applicable after that event and be as nearly equivalent as
practicable.

    

    (e)           Adjustments to Series A
Conversion Price.
The number of shares of Common Stock issuable upon conversion of the
Warrant Shares, shall be subject to adjustment from time to time in the manner
set forth in the Certificate.  For so long as this Warrant is
outstanding and exercisable for shares of Series A Preferred, the Company shall
deliver to the Holder each certificate of adjustment sent to the holders of the
Company’s Series A Preferred pursuant to Section 4(h) of the Certificate of
Designation with respect to the Series A Preferred.

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    10.         Conversion or Redemption of
Common Stock.  Should all of the Company’s Common Stock be, or
if outstanding would be, at any time prior to the expiration of this Warrant or
any portion thereof, redeemed or converted into another class shares of the
Company’s stock, or if there shall be any reclassification, capital
reorganization or change of the Common Stock, or any consolidation of the
Company with, or merger of the Company into, another corporation or other
business organization (other than a consolidation or merger in which the Company
is the continuing corporation and which does not result in any reclassification
or change of the outstanding Common Stock), or any sale or conveyance to another
corporation or other business organization of all or substantially all of the
assets of the Company or any of its subsidiaries, taken as a whole, then the
Company shall mail or cause to be mailed to the Holder a notice specifying the
date on which any such record is to be taken for the purpose of such event and
stating the material provisions of such event, including the date upon which
such event shall be consummated.  Such notice shall be mailed at least
ten (10) days prior to the earlier of the record date or the date specified in
such notice on which any such action is to be taken.

    

    11.         Fractional
Shares.  No fractional shares shall be issuable upon exercise
or conversion of this Warrant and the number of shares to be issued shall be
rounded down to the nearest whole share.  If a fractional share
interest arises upon any exercise or conversion of this Warrant, the Company
shall eliminate such fractional share interest by paying the Holder an amount
computed by multiplying the fractional interest by the FMV of a full Warrant
Share.

    

    12.         Notices of Record Date,
Etc.  In the event of:  (1) any taking by the Company
of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive a dividend or other
distribution, or any right to subscribe for, purchase or otherwise acquire any
shares of stock of any class or any other securities or property; (2) any
reclassification or recapitalization of capital stock; or (3) any voluntary or
involuntary dissolution, liquidation or winding-up of the Company, then and in
each such event the Company will mail or cause to be mailed to the Holder a
notice specifying (A) the date on which any such record is to be taken for the
purpose of such dividend, distribution or right, and stating the amount and
character of such dividend, distribution or right, or (B) the date on which any
such reclassification, reorganization, consolidation, merger, sale or
conveyance, dissolution, liquidation or winding-up is to take place, and the
time, if any is to be fixed, as of which the holders of record shall be entitled
to exchange their shares for securities or other property deliverable upon such
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, dissolution, liquidation or winding-up, and (C) the amount and character
of any stock or other securities, or rights or options with respect thereto,
proposed to be issued or granted, the date of the proposed issue or grant and
the person or class of persons to whom such proposed issue or grant is to be
offered or made.  Such notice shall be mailed at least ten (10) days
prior to the date specified in such notice on which any such action is to be
taken.

    

    13.         No Stockholder
Rights.  This Warrant in and of itself shall not entitle the
Holder to any voting rights or other rights as a stockholder of the
Company.

    

    14.         Amendment.  The
terms of this Warrant may be amended, modified or waived only with the written
consent of the Company and the Holder hereof.

     

    
      
        
           

        

        
          6

          
            

          

        

        
           

        

      

    

     

    15.         Transfers, Substitute
Warrant.

    

    (a)           This
Warrant may only be sold, assigned, transferred, pledged, hypothecated or
otherwise disposed of (each, a “Transfer”)
by the Holder (a) pursuant to an effective registration statement under the
Securities Act or (b) to an Affiliate (as defined below) of the Holder, provided that the Holder or
the Holder’s Affiliate delivers to the Company an opinion of qualified counsel
in form and substance satisfactory to the Company setting forth that such
Transfer is exempt from the registration requirements of the Securities Act and
does not otherwise violate federal or state securities laws (the “Opinion”)
and the Holder’s Affiliate delivers a representation letter (the “Representation
Letter”)
in form and substance satisfactory to the Company.  In furtherance of
the foregoing, in order to affect the Transfer, the Holder shall deliver to the
Company this Warrant, the assignment form attached hereto as Attachment III properly
endorsed, and the Opinion and the Representation Letter. Upon delivery of the
foregoing, for Transfer of this Warrant in its entirety by the Holder, the
Company shall issue a new warrant of the same denomination to the
assignee.  Upon delivery of the foregoing, for Transfer with respect
to a portion of the Warrant Shares purchasable hereunder, the Company shall
issue a new warrant to the assignee, in such denomination as shall be requested
by the Holder hereof, and shall issue to the Holder a new warrant covering the
number of shares in respect of which this Warrant shall not have been
Transferred.

    

    (b)           In
case this Warrant shall be mutilated, lost, stolen or destroyed, the Company
shall issue a new warrant of like tenor and denomination and deliver the same
(i) in exchange and substitution for and upon surrender and cancellation of any
mutilated Warrant, or (ii) in lieu of any Warrant lost, stolen or destroyed,
upon receipt of evidence reasonably satisfactory to the Company of the loss,
theft or destruction of such Warrant (including a reasonably detailed affidavit
with respect to the circumstances of any loss, theft or destruction) and of
indemnity reasonably satisfactory to the Company.

    

    16.         Governing
Law.  The provisions and terms of this Warrant shall be
governed by and construed in accordance with the laws of the State of
Delaware.

    

    17.         Successors and
Assigns.  This Warrant shall be binding upon and inure to the
benefit of the Company’s successors and assigns and shall be binding upon and
inure to the benefit of the Holder’s successors, legal representatives and
permitted assigns.

    

    18.         Business
Days.  If the last or appointed day for the taking of any
action required or the expiration of any right granted herein shall be a
Saturday or Sunday or a federal holiday, then such action may be taken or right
may be exercised on the next succeeding day which is not a Saturday or Sunday or
such a federal holiday.

    

    19.         Notices.  All
notices, requests, claims, demands, disclosures and other communications
required or permitted by this Warrant shall be in writing and shall be deemed to
have been given at the earlier of the date (a) when delivered personally or
by messenger, or (b) upon confirmed delivery as evidenced by the delivery
receipt of an nationally recognized overnight delivery service or registered or
certified United States mail, postage prepaid, return receipt requested, in all
cases addressed to the person or entity for whom it is intended at his address
set forth below or to such other address as a party shall have designated by
notice in writing to the other party in the manner provided by this Section
19:

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    

    If to
Holder:

    c/o Third
Security, LLC

    1881
Grove Avenue

    Radford,
VA 24141

    Attention:
Tad Fisher

    Facsimile:
540-633-7939

    

    With a
copy to (which shall not constitute notice):

    

    Troutman
Sanders LLP

    Troutman
Sanders Building

    1001
Haxall Point

    Richmond,
Virginia 23219

    Attention:
John Owen Gwathmey

    Facsimile:
804-698-5174

    

    If to
Company:

    

    Transgenomic,
Inc.

    12325
Emmet Street

    Omaha,
Nebraska 68164

    Attention:
Craig J. Tuttle

    Facsimile:  402-452-5461

    

    With a
copy to (which shall not constitute notice):

     

    Paul,
Hastings, Janofsky & Walker, LLP

    4747
Executive Drive, 12th Floor

    San
Diego, Ca  92121

    Attention:  Carl
R. Sanchez, Esq.

    Facsimile:  (858)
458-3005

    

    23.           Counterparts.   This
Warrant may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

     

    {Signature
Page Follows}

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    Dated:  December
29, 2010

    

    
      
        	
                TRANSGENOMIC,
      INC.

              
	 
      
	
                By:

              	
                    
      

              
	 
      	
                Craig
      J. Tuttle

              
	 
      	
                Chief
      Executive Officer and
President

              

      

    

    

    {Signature
Page To Warrant}

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    Attachment
I

    [FORM OF
EXERCISE NOTICE]

    

    (TO BE
SIGNED ONLY ON EXERCISE OF WARRANT)

    

    
      	
              To:  Transgenomic,
      Inc.

            	
              Date:___________________

            

    

    

    The undersigned, the Holder of the
within Warrant, hereby irrevocably elects to exercise this Warrant for, and to
purchase and subscribe for, _________ shares of Series A Convertible Preferred
Stock of Transgenomic, Inc. (the “Company”)
covered by this Warrant.  The undersigned herewith makes payment of
$_______ thereof.  The certificate(s) for such shares (the “Shares”)
shall be issued in the name of the undersigned as is specified
below:

    

    
      
        
          
            	
                      

                  
	
                    (Name)

                  
	
                      

                  
	
                      

                  
	
                    (Address)

                  

          

        

      

    

    

    The undersigned represents that: (i)
the aforesaid Shares are being acquired for the account of the undersigned for
investment and not with a view to, or for resale in connection with, the
distribution thereof and that the undersigned has no present intention of
distributing or reselling such shares; (ii) the undersigned is aware of the
Company’s business affairs and financial condition and has acquired sufficient
information about the Company to reach an informed and knowledgeable decision
regarding its investment in the Company; (iii) the undersigned is experienced in
making investments of this type and has such knowledge and background in
financial and business matters that the undersigned is capable of evaluating the
merits and risks of this investment and protecting the undersigned’s own
interests; (iv) the undersigned understands that the Shares issuable upon
exercise of this Warrant have not been registered under the Securities Act of
1933, as amended (the “Securities
Act”), by reason of a specific exemption from the registration provisions
of the Act, which exemption depends upon, among other things, the bona fide
nature of the investment intent as expressed herein, and, because such
securities have not been registered under the Securities Act, they must be held
indefinitely unless subsequently registered under the Securities Act or an
exemption from such registration is available; (v) the undersigned is aware that
the aforesaid Shares may not be sold pursuant to Rule 144 adopted under the
Securities Act unless certain conditions are met and until the undersigned has
held the shares for the number of years prescribed by Rule 144, that among the
conditions for use of Rule 144 is the availability of current information to the
public about the Company and the Company has not made such information available
and has no present plans to do so; and (vi) the undersigned agrees not to make
any disposition of all or any part of the aforesaid Shares unless and until
there is then in effect a registration statement under the Securities Act
covering such proposed disposition and such disposition is made in accordance
with said registration statement, or the undersigned has provided the Company
with an opinion of counsel satisfactory to the Company, stating that such
registration is not required.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    
      
        	
                  

              
	
                Signature
      (must conform to name of Holder as

              
	
                specified
      on the face of the Warrant)

              
	 
      
	
                Fed
      Tax ID #
__________________________

              

      

    

    

    [Signature
Pate to Exercise Notice]

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    Attachment
II

    [FORM OF
REDEMPTION NOTICE]

    

    (TO BE
SIGNED ONLY ON REDEMPTION OF WARRANT)

    

    TO:  Transgenomic,
Inc.

    

    The undersigned, the Holder of the
within Warrant, hereby irrevocably elects, in accordance with and subject to the
provisions of Section 4(b) of such Warrant, to redeem, and to cause the
Company to redeem for shares of Series A Convertible Preferred Stock of
Transgenomic, Inc. (“Series A
Preferred”), such Warrant with respect to that portion of such Warrant
representing __________ * underlying shares of Series A Preferred. The undersigned requests
that the certificates for the shares of Series A Preferred issuable upon
redemption be issued in the name of, and delivered to
___________________________________,

    whose
address is ____________________________________________.

    

    
      
        
          	
                    

                
	
                  (Signature
      must conform in all

                
	
                  respects
      to name of Holder as

                
	
                  specified
      on the face of the

                
	
                  Warrant)

                
	 
      
	
                    

                
	 
      
	
                    

                
	
                  (Address)

                

        

      

    

    

    Dated:

    

    
      
        
          	
                    

                

        

      

    

    

    *Insert
here the number of underlying shares with respect to which the Warrant is being
redeemed.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    Attachment
III

    [FORM OF
ASSIGNMENT]

    

    (TO BE
SIGNED ONLY ON TRANSFER OF WARRANT)

    

    For value received the undersigned
hereby desires to sell, assign and transfer unto

    

    _________________________________________________________________

    

    _________________________________________________________________

    

    Please print or typewrite name and
address of Assignee and include Fed Tax ID # of Assignee

    

    _________________________________________________________________

    

    the
within Warrant, and does hereby irrevocably constitute and appoint
______________________________ its attorney to transfer the within Warrant on
the books of the within named Company with full power of substitution on the
premises.

    

    Dated:_________________________

    

    
      
        	
                  

              
	
                (Signature
      must conform to name of Holder as

              
	
                specified
      on the face of the Warrant)

              

      

    

    

    Signed in
the Presence of:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00182-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00182-of-00352.parquet"}]]