Document:

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                                                                    Exhibit 10.3

THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF
THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT
AND ANY APPLICABLE STATES SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO TRANSGENOMIC, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.

                   SECURED CONVERTIBLE MINIMUM BORROWING NOTE

          FOR VALUE RECEIVED, TRANSGENOMIC, INC., a Delaware corporation (the
"BORROWER") promises to pay to LAURUS MASTER FUND, LTD., c/o Ironshore Corporate
Services Ltd., P.O. Box 1234 G.T., Queensgate House, South Church Street, Grand
Cayman, Cayman Islands, Fax: 345-949-9877 (the "HOLDER") or its registered
assigns, on order, the sum of TWO MILLION DOLLARS ($2,000,000), or, if
different, the aggregate principal amount of all "Loans" (as such term is
defined in the Security Agreement referred to below), together with any accrued
and unpaid interest hereon, on December 3, 2006 (the "MATURITY DATE").

          Capitalized terms used herein without definition shall have the
meanings ascribed to such terms in the Security Agreement between Borrower and
the Holder dated as of December 3, 2003 (as amended, modified and supplemented
from time to time, the "SECURITY AGREEMENT").

The following terms shall apply to this Secured Convertible Minimum Borrowing
Note (the "Note"):

                                    ARTICLE I
                                    INTEREST

          1.1.   INTEREST RATE AND PAYMENTS. Subject to Sections 5.3 and 6.7
hereof, interest payable on this Note shall accrue at a rate per annum equal to
the "prime rate" published in THE WALL STREET JOURNAL from time to time, plus
two percent (2.00%), but in no event less than six percent (6%) per annum (the
"CONTRACT RATE"). The Prime Rate shall be increased or decreased as the case may
be for each increase or decrease in the Prime Rate in an amount equal to such
increase or decrease in the Prime Rate; each change to be effective as of the
day of the change in such rate in accordance with the terms of the Security
Agreement. The Contract Rate shall be further adjusted from time to time as
follows: if (i) the Borrower shall have registered the shares of the Borrower's
common stock underlying the conversion of this Note and that certain warrant
issued to Holder of even date herewith on a registration statement declared
effective by the Securities Exchange Commission, and (ii) the volume weighted
average price of the Common Stock as reported by Bloomberg, L.P. on the
Principal Market for any of the ten (10) trading days immediately preceding a
Interest Payment Date (defined below) exceeds the
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then applicable Fixed Conversion Price by a multiple of at least fifteen percent
(15%), then the Contract Rate for the succeeding calendar month shall
automatically be reduced by twenty five basis points (25 b.p.) for such period
for each such multiple of fifteen percent (15%). Interest shall be payable
monthly in arrears commencing on January 1, 2004 and on the first day of each
consecutive calendar month thereafter, (each, an "INTEREST PAYMENT DATE").

                                   ARTICLE II
            ADVANCES, BORROWER CONVERSION RIGHTS, PAYMENTS UNDER NOTE

          2.1.   MECHANICS OF ADVANCES. All Loans evidenced by this Note shall
be made in accordance with the terms and provisions of the Security Agreement.

          2.2.   BORROWER'S CONVERSION RIGHTS. Subject to the terms hereof, the
Borrower shall have the sole option to determine whether to satisfy payment of
any payment of principal or interest when due either in cash or in shares of
Common Stock (as defined in the Security Agreement), or a combination of both.
Each month by the tenth (10th) day of such month, the Borrower shall deliver to
the Holder a written irrevocable notice in the form of Exhibit A attached hereto
electing to pay the amount specified therein payable on the first day of the
next month in either cash or Common Stock, or a combination of both (each, a
"REPAYMENT ELECTION NOTICE"). Each Repayment Election Notice shall be delivered
to the Holder not later than the tenth (10th) day of the month prior to the
applicable payment date (the date by which such notice is required to be given
being hereinafter referred to as the "NOTICE DATE"). If, for any amount which is
due on any repayment date, a Repayment Election Notice is not delivered to the
Holder by the applicable Notice Date for such repayment date, then the amount
due on such repayment date shall be paid in cash. If the Borrower repays all or
a portion of the amount due on any payment date in shares of Common Stock, the
number of such shares to be issued for such payment date shall be the number
determined by dividing (x) the amount to be paid in shares of Common Stock, by
(y) the Fixed Conversion Price. For purposes hereof, subject to Section 3.5
hereof, the "FIXED CONVERSION PRICE" means $2.20.

          2.3.   NO EFFECTIVE REGISTRATION. Notwithstanding anything to the
contrary herein, the Borrower shall be prohibited from exercising its right to
repay any amount hereunder in shares of Common Stock if at any time from the
Call Date (defined below) for such payment through the date upon which such
payment is made by delivery of certificates for shares of Common Stock (i) there
fails to exist an effective current Registration Statement (as defined in the
Registration Rights Agreement) on Form S-3 covering the resale of shares of
Common Stock to be issued, or (ii) an Event of Default hereunder exists and is
continuing, unless such requirement is otherwise waived in writing by the Holder
in whole or in part at the Holder's option.

          2.4.   COMMON STOCK PAYMENT GUIDELINES. Notwithstanding anything to
the contrary herein, if the Borrower has elected to make a payment hereunder in
shares of Common Stock and the closing price of the Common Stock as reported by
Bloomberg, L.P. on the Principal Market for any of the eleven (11) trading days
preceding the scheduled payment date was less than 110% of the Fixed Conversion
Price, then the Holder shall have the option to refuse to accept any portion of
such payment in shares of Common Stock.

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          2.5.   OPTIONAL PAYMENTS IN COMMON STOCK. Subject to Section 2.2
hereof, if the Borrower elects to pay interest or prepay principal and the
average closing price of the Common Stock on the Principal Market is greater
than 110% of the Fixed Conversion Price for a period of at least five (5)
consecutive trading days, then the Borrower may, AT ITS SOLE OPTION, provide the
Holder written notice (a "CALL NOTICE") requiring the conversion at the Fixed
Conversion Price of (a) in the case of interest, all interest due and payable
for the current calendar month and (b) in the case of principal, all or a
portion of the outstanding principal of this Note (subject to compliance with
Section 2.3 and 3.2), together with accrued interest on the principal amount
being prepaid, in each case, as of the date set forth in such Call Notice (the
"CALL DATE"). The Call Date shall be (a) in the case of interest, at least
eleven (11) trading days prior to the first day of the immediately succeeding
calendar month and (b) in the case of principal, at least eleven (11) trading
days following the date of the Call Notice. On the Call Date the Borrower shall
deliver to the Holder certificates evidencing the shares of Common Stock issued
in satisfaction of the principal and/or interest being retired. Notwithstanding
the foregoing, the Borrower's right to issue shares of Common Stock in payment
of obligations under this Note shall be subject to the limitation that the
number of shares of Common Stock issued at the Fixed Conversion Price in
connection with any Call Notice shall not exceed 25% of the aggregate dollar
trading volume of the Common Stock for the ten (10) trading days immediately
preceding the Call Date (as such volume is reported by Bloomberg, L.P. If the
closing price of the Common Stock is below 110% of the Fixed Conversion Price
during the ten (10) trading day period immediately preceding the Call Date, then
the Holder will then be required to convert only such amount of the Note as
shall equal twenty five percent (25%) of the aggregate dollar trading volume (as
such volume is reported by Bloomberg L.P.) for each day that the closing price
of the Common Stock exceeded 110% of the then applicable Fixed Conversion Price.
The Borrower shall not be permitted to give the Holder more than one Call Notice
under this Note during any 22-day period.

          2.6.   OPTIONAL PREPAYMENT IN CASH. The Borrower will have the option
of prepaying this Note in full or in part at any time in an amount equal to 103%
of the amount being prepaid subject to the prepayment fees under Section 16 of
the Security Agreement in the event this Note is paid in full.

                                   ARTICLE III
                           HOLDER'S CONVERSION RIGHTS

          3.1.   OPTIONAL CONVERSION. Subject to the terms of this Article III,
the Holder shall have the right, but not the obligation, at any time until the
Maturity Date, or thereafter during an Event of Default (as defined in Article
V), and, subject to the limitations set forth in Section 3.2 hereof, to convert
all or any portion of the outstanding Principal Amount and/or accrued interest
and fees due and payable into fully paid and nonassessable shares of the Common
Stock at the Fixed Conversion Price. The shares of Common Stock to be issued
upon such conversion are herein referred to as the "CONVERSION SHARES."

          3.2.   CONVERSION LIMITATION. Notwithstanding anything contained
herein to the contrary, the Holder shall not be entitled to convert pursuant to
the terms of this Note an amount that would be convertible into that number of
Conversion Shares which, when added to the number of shares of Common Stock
otherwise beneficially owned by such Holder including

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those issuable upon exercise of warrants held by such Holder would exceed 4.99%
of the outstanding shares of Common Stock of the Borrower at the time of
conversion. For the purposes of the immediately preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d) of the Exchange
Act and Regulation 13d-3 thereunder. The Conversion Shares limitation described
in this Section 3.2 shall automatically become null and void without any notice
to Borrower upon the occurrence and during the continuance beyond any applicable
grace period of an Event of Default, or upon 75 days prior notice to the
Borrower.

          3.3.   MECHANICS OF HOLDER'S CONVERSION. In the event that the Holder
elects to convert this Note into Common Stock, the Holder shall give notice of
such election by delivering an executed and completed notice of conversion
("NOTICE OF CONVERSION") to the Borrower and such Notice of Conversion shall
provide a breakdown in reasonable detail of the Principal Amount, accrued
interest and fees that are being converted. Each date on which a Notice of
Conversion is delivered or telecopied to the Borrower in accordance with the
provisions hereof shall be deemed a Conversion Date (the "CONVERSION DATE"). On
each Conversion Date and in accordance with its Notice of Conversion, the Holder
shall make the appropriate reduction to the Principal Amount, accrued interest
and fees as entered in its records and shall provide written notice thereof to
the Borrower within two (2) Business Days after the Conversion Date. A form of
Notice of Conversion to be employed by the Holder is annexed hereto as Exhibit
A. Pursuant to the terms of the Notice of Conversion, the Borrower will issue
instructions to the transfer agent accompanied by an opinion of counsel within
two (1) Business Days of the date of the delivery to Borrower of the Notice of
Conversion and shall cause the transfer agent to transmit the certificates
representing the Conversion Shares to the Holder by crediting the account of the
Holder's designated broker with the Depository Trust Corporation ("DTC") through
its Deposit Withdrawal Agent Commission ("DWAC") system within three (3)
Business Days after receipt by the Borrower of the Notice of Conversion (the
"DELIVERY DATE"). In the case of the exercise of the conversion rights set forth
herein the conversion privilege shall be deemed to have been exercised and the
Conversion Shares issuable upon such conversion shall be deemed to have been
issued upon the date of receipt by the Borrower of the Notice of Conversion. The
Holder shall be treated for all purposes as the record holder of such Common
Stock, unless the Holder provides the Borrower written instructions to the
contrary.

          3.4.   LATE PAYMENTS. The Borrower understands that a delay in the
delivery of the shares of Common Stock in the form required pursuant to this
Article beyond the Delivery Date could result in economic loss to the Holder. As
compensation to the Holder for such loss, the Borrower agrees to pay late
payments to the Holder for late issuance of such shares in the form required
pursuant to this Article III upon conversion of the Note, in the amount equal to
$500 per business day after the Delivery Date. The Borrower shall pay any
payments incurred under this Section in immediately available funds upon demand.

          3.5.   ADJUSTMENT PROVISIONS. The Fixed Conversion Price and number
and kind of shares or other securities to be issued upon conversion determined
pursuant to Section 2.2 shall be subject to adjustment from time to time upon
the happening of certain events while this conversion right remains outstanding,
as follows:

                 A.    RECLASSIFICATION, ETC. If the Borrower at any time shall,
by reclassification or otherwise, change the Common Stock into the same or a
different number of

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securities of any class or classes, this Note, as to the unpaid Principal Amount
and accrued interest thereon, shall thereafter be deemed to evidence the right
to purchase an adjusted number of such securities and kind of securities as
would have been issuable as the result of such change with respect to the Common
Stock immediately prior to such reclassification or other change.

                 B.    STOCK SPLITS, COMBINATIONS AND DIVIDENDS. If the shares
of Common Stock are subdivided or combined into a greater or smaller number of
shares of Common Stock, or if a dividend is paid on the Common Stock in shares
of Common Stock, the Fixed Conversion Price shall be proportionately reduced in
case of subdivision of shares or stock dividend or proportionately increased in
the case of combination of shares, in each such case by the ratio which the
total number of shares of Common Stock outstanding immediately after such event
bears to the total number of shares of Common Stock outstanding immediately
prior to such event.

                 C.    SHARE ISSUANCES. Subject to the provisions of this
Section 3.5, if the Borrower shall at any time prior to the conversion or
repayment in full of the Principal Amount issue any shares of Common Stock to a
person other than the Holder (except (i) pursuant to Subsections A or B above;
(ii) pursuant to options, warrants, or other obligations to issue shares
outstanding on the date hereof as disclosed to Holder in writing; or
(iii) pursuant to options that may be issued under any employee incentive stock
option and/or any qualified stock option plan adopted by the Borrower) for a
consideration per share (the "Offer Price") less than the Fixed Conversion Price
in effect at the time of such issuance, then the Fixed Conversion Price shall be
immediately reset pursuant to the formula below. For purposes hereof, the
issuance of any security of the Borrower convertible into or exercisable or
exchangeable for Common Stock shall result in an adjustment to the Fixed
Conversion Price at the time of issuance of such securities. If the Borrower
issues any additional shares pursuant to this Subsection then, and thereafter
successively upon each such issue, the Fixed Conversion Price shall be adjusted
by multiplying the then applicable Fixed Conversion Price by the following
fraction:

                                      A + B
                          (A + B) + [((C - D) X B) / C]

              A = Actual shares outstanding prior to such offering
                     B = Actual shares sold in the offering
                           C = Fixed Conversion Price
                                 D = Offer Price

                 D.    COMPUTATION OF CONSIDERATION.  For purposes of any
computation respecting consideration received pursuant to Subsection C above,
the following shall apply:

                       (a)  in the case of the issuance of shares of Common
Stock for cash, the consideration shall be the amount of such cash, provided
that in no case shall any deduction be made for any commissions, discounts or
other expenses incurred by the Borrower for any underwriting of the issue or
otherwise in connection therewith;

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                       (b)  in the case of the issuance of shares of Common
Stock for a consideration in whole or in part other than cash, the consideration
other than cash shall be deemed to be the fair market value thereof as
determined in good faith by the Board of Directors of the Borrower
(irrespective of the accounting treatment thereof); and

                       (c)  Upon any such exercise, the aggregate consideration
received for such securities shall be deemed to be the consideration received by
the Borrower for the issuance of such securities plus the additional minimum
consideration, if any, to be received by the Borrower upon the conversion or
exchange thereof (the consideration in each case to be determined in the same
manner as provided in clauses (a) and (b) of this Subsection (D)).

          3.6.   RESERVATION OF SHARES. During the period the conversion right
exists, the Borrower will reserve from its authorized and unissued Common Stock
a sufficient number of shares to provide for the issuance of Common Stock upon
the full conversion of this Note. The Borrower represents that upon issuance,
such shares will be duly and validly issued, fully paid and non-assessable. The
Borrower agrees that its issuance of this Note shall constitute full authority
to its officers, agents, and transfer agents who are charged with the duty of
executing and issuing stock certificates to execute and issue the necessary
certificates for shares of Common Stock upon the conversion of this Note.

          3.7.   REGISTRATION RIGHTS. The Holder has been granted registration
rights with respect to the shares of Common Stock  issuable  upon  conversion
of this Note as more fully set forth in a  Registration  Rights  Agreement
dated the date hereof.

                                   ARTICLE IV
                                EVENTS OF DEFAULT

          The occurrence of any of the following events is an Event of Default
("EVENT OF DEFAULT"):

          4.1.   FAILURE TO PAY PRINCIPAL, INTEREST OR OTHER FEES. The Borrower
fails to pay when due any installment of principal, interest or other fees
hereon or on any other promissory note issued pursuant to the Security
Agreement, when due in accordance with the terms of such note.

          4.2.   BREACH OF  COVENANT.  The  Borrower  breaches any covenant or
other term or condition of this Note in any material respect and such breach, if
subject to cure, continues for a period of thirty (30) days after the occurrence
thereof.

          4.3.   BREACH OF REPRESENTATIONS  AND WARRANTIES.  Any material
representation or warranty of the Borrower made herein, or the Security
Agreement, or in any Ancillary Agreement shall be materially false or
misleading.

          4.4.   STOP TRADE. An SEC stop trade order or Principal Market trading
suspension of the Common Stock shall be in effect for 5 consecutive days or 5
days during a period of 10 consecutive days, excluding in all cases a suspension
of all trading on a Principal Market, provided that the Borrower shall not have
been able to cure such trading suspension within 30 days of the notice thereof
or list the Common Stock on another Principal Market

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within 60 days of such notice. The "Principal Market" for the Common Stock shall
include the NASD OTC Bulletin Board, NASDAQ SmallCap Market, NASDAQ National
Market System, American Stock Exchange, or New York Stock Exchange (whichever of
the foregoing is at the time the principal trading exchange or market for the
Common Stock), or any securities exchange or other securities market on which
the Common Stock is then being listed or traded.

          4.5.   DEFAULT  UNDER  RELATED  AGREEMENT.  The  occurrence  of an
Event of Default  under and as defined in the Security Agreement.

          4.6.   FAILURE TO DELIVER COMMON STOCK OR REPLACEMENT NOTE. The
Borrower's failure to timely deliver Common Stock to the Holder pursuant to and
in the form required by this Note, and Section 9 of the Security Agreement, or
if required, a replacement Note if such failure to timely deliver Common Stock
shall not be cured within two (2) Business Days or such failure to deliver a
replacement Note is not cured within seven (7) Business Days.

          4.7.   PAYMENT GRACE PERIOD. The Borrower shall have a three (3)
business day grace period to pay any monetary amounts due under this Note or the
Security Agreement or any Related Document, after which grace period the Default
Rate shall apply to the monetary amounts due.

                                    ARTICLE V
                                DEFAULT PAYMENTS

          5.1.   DEFAULT PAYMENT. If an Event of Default occurs, the Holder, at
its option, may elect, in addition to all rights and remedies of Holder under
the Security Agreement and all obligations of Borrower under the Security
Agreement, to require the Borrower to make a Default Payment ("DEFAULT
PAYMENT"). The Default Payment shall be the outstanding principal amount of the
Note, plus accrued but unpaid interest, all other fees then remaining unpaid,
and all other amounts payable hereunder.

          5.2.   DEFAULT PAYMENT DATE AND DEFAULT NOTICE PERIOD. The Default
Payment shall be due and payable on the fifth business day after an Event of
Default as defined in Article IV ("DEFAULT PAYMENT DATE") has occurred and is
continuing beyond any applicable grace period. The period between the date upon
which of an Event of Default has occurred and is continuing beyond any
applicable grace period and the Default Payment Date shall be the "DEFAULT
PERIOD." If during the Default Period, the Borrower cures the Event of Default,
the Event of Default will no longer exist and any additional rights the Holder
had triggered by the occurrence and continuance of an Event of Default will no
longer exist. If the Event of Default is not cured during the Default Notice
Period, all amounts payable hereunder shall be due and payable on the Default
Payment Date, all without further demand, presentment or notice, or grace
period, all of which hereby are expressly waived.

          5.3.   DEFAULT INTEREST RATE. Following the occurrence and during the
continuance of an Event of Default, interest on this Note shall automatically be
increased to the Default Rate, and all outstanding Obligations, including unpaid
interest, shall continue to accrue interest from the date of such Event of
Default at such interest rate applicable to such Obligations until such Event of
Default is cured or waived.

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          5.4.   CUMULATIVE REMEDIES.  The remedies under this Note shall be
cumulative.

                                   ARTICLE VI
                                  MISCELLANEOUS

          6.1.   FAILURE OR INDULGENCE NOT WAIVER. No failure or delay on the
part of the Holder hereof in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege. All rights and
remedies existing hereunder are cumulative to, and not exclusive of, any rights
or remedies otherwise available.

          6.2.   NOTICES.  Any notice  herein  required  or  permitted  to be
given  shall be in writing  and  provided in accordance with the terms of the
Security Agreement.

          6.3.   AMENDMENT  PROVISION.  The term "Note" and all reference
thereto,  as used throughout this  instrument, shall mean this instrument as
originally  executed,  or if later amended or supplemented,  then as so amended
or  supplemented,  and any successor instrument as it may be amended or
supplemented.

          6.4.   ASSIGNABILITY.  This Note shall be binding upon the Borrower
and its  successors  and assigns,  and shall inure to the  benefit of the Holder
and its  successors  and  assigns,  and may be  assigned  by the Holder in
accordance  with the requirements of the Security Agreement.

          6.5.   COST OF  COLLECTION.  If default is made in the payment of this
Note,  the Borrower  shall pay the Holder hereof reasonable costs of collection,
including reasonable attorneys' fees.

          6.6.   GOVERNING LAW. This Note shall be governed by and construed in
accordance with the laws of the State of New York, without regard to principles
of conflicts of laws. Any action brought by either party against the other
concerning the transactions contemplated by this Agreement shall be brought only
in the state courts of New York or in the federal courts located in the state of
New York. Both parties and the individual signing this Note on behalf of the
Borrower agree to submit to the jurisdiction of such courts. The prevailing
party shall be entitled to recover from the other party its reasonable
attorney's fees and costs. In the event that any provision of this Note is
invalid or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of
law. Any such provision which may prove invalid or unenforceable under any law
shall not affect the validity or unenforceability of any other provision of this
Note. Nothing contained herein shall be deemed or operate to preclude the Holder
from bringing suit or taking other legal action against the Borrower in any
other jurisdiction to collect on the Borrower's obligations to Holder, to
realize on any collateral or any other security for such obligations, or to
enforce a judgment or other court order in favor of Holder.

          6.7.   MAXIMUM PAYMENTS. Nothing contained herein shall be deemed to
establish or require the payment of a rate of interest or other charges in
excess of the maximum

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permitted by applicable law. In the event that the rate of interest required to
be paid or other charges hereunder exceed the maximum permitted by such law, any
payments in excess of such maximum shall be credited against amounts owed by the
Borrower to the Holder and thus refunded to the Borrower.

          6.8.   SECURITY  INTEREST.  The Holder of this Note has been  granted
a security  interest in certain  assets of the Borrower more fully described in
the Security Agreement.

          6.9.   CONSTRUCTION. Each party acknowledges that its legal counsel
participated in the preparation of this Note and, therefore, stipulates that the
rule of construction that ambiguities are to be resolved against the drafting
party shall not be applied in the interpretation of this Note to favor any party
against the other.

       [Balance of page intentionally left blank; signature page follows.]

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          IN WITNESS WHEREOF, the Borrower has caused this Secured Convertible
Minimum Borrowing Note to be signed in its name effective as of this 3rd day of
December, 2003.

                                        TRANSGENOMIC, INC.

                                        By: /s/ Michael J. Draper
                                           -------------------------------------
                                           Name: Michael J. Draper
                                           Title: CFO

WITNESS:

     /s/ Keith A. Johnson
----------------------------------------

                                       10<Page>

                                                                    Exhibit 10.4

THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT
BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID ACT OR AN OPINION
OF COUNSEL REASONABLY SATISFACTORY TO TRANSGENOMIC, INC. THAT SUCH REGISTRATION
IS NOT REQUIRED.

                              Right to Purchase 550,000 Shares of Common
                              Stock of Transgenomic, Inc. (subject to adjustment
                              as provided herein)

                          COMMON STOCK PURCHASE WARRANT

No. 2003-1                                 Issue Date:  December 3, 2003

          Transgenomic, Inc., a corporation organized under the laws of the
State of Delaware (the "Company"), hereby certifies that, for value received,
LAURUS MASTER FUND, LTD., or assigns (the "Holder"), is entitled, subject to the
terms set forth below, to purchase from the Company from and after the Issue
Date of this Warrant and at any time or from time to time before 5:00 p.m., New
York time, through seven (7) years after such date (the "Expiration Date"), up
to 550,000 fully paid and nonassessable shares of Common Stock (as hereinafter
defined), $.01 par value, of the Company, at the Exercise Price (as defined
below). The number and character of such shares of Common Stock and the Exercise
Price are subject to adjustment as provided herein.

          As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:

          (a)    The term "Company" shall include Transgenomic, Inc. and any
corporation which shall succeed or assume the obligations of Transgenomic, Inc.
hereunder.

          (b)    The term "Common Stock" includes (a) the Company's Common
Stock, par value $.01 per share, and (b) any other securities into which or for
which any of the securities described in (a) may be converted or exchanged
pursuant to a plan of recapitalization, reorganization, merger, sale of assets
or otherwise.

          (c)    The term "Other Securities" refers to any stock (other than
Common Stock) and other securities of the Company or any other person (corporate
or otherwise) which the holder of the Warrant at any time shall be entitled to
receive, or shall have received, on the exercise of the Warrant, in lieu of or
in addition to Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to Section 4 or otherwise.

          (d)     The term "Exercise Price" shall be as follows:

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                 a.     200,000 shares at $2.25 per share;

                 b.     200,000 shares at $2.44 per share; and

                 c.     150,000 shares at $2.82 per share.

     2.   EXERCISE OF WARRANT.

          2.1    NUMBER OF SHARES ISSUABLE UPON EXERCISE. From and after the
date hereof through and including the Expiration Date, the Holder shall be
entitled to receive, upon exercise of this Warrant in whole or in part, by
delivery of an original or fax copy of the exercise notice attached hereto as
Exhibit A (the "Exercise Notice"), shares of Common Stock of the Company,
subject to adjustment pursuant to Section 4.

          2.2    FAIR MARKET VALUE. Fair Market Value of a share of Common Stock
as of a particular date (the "Determination Date") shall mean:

          (a)    If the Company's Common Stock is traded on an exchange or is
quoted on the National or SmallCap Market of The Nasdaq Stock Market,
Inc.("Nasdaq"), then the closing or last sale price, respectively, reported for
the last business day immediately preceding the Determination Date.

                 (b)    If the Company's Common Stock is not traded on an
exchange or on the Nasdaq but is traded on the NASD OTC Bulletin Board or BBX
Exchange, then the mean of the average of the closing bid and asked prices
reported for the last business day immediately preceding the Determination Date.

                 (c) Except as provided in clause (d) below, if the Company's
Common Stock is not publicly traded, then as the Holder and the Company agree or
in the absence of agreement by arbitration in accordance with the rules then in
effect of the American Arbitration Association, before a single arbitrator to be
chosen from a panel of persons qualified by education and training to pass on
the matter to be decided.

                 (d) If the Determination Date is the date of a liquidation,
dissolution or winding up, or any event deemed to be a liquidation, dissolution
or winding up pursuant to the Company's charter, then all amounts to be payable
per share to holders of the Common Stock pursuant to the charter in the event of
such liquidation, dissolution or winding up, plus all other amounts to be
payable per share in respect of the Common Stock in liquidation under the
charter, assuming for the purposes of this clause (d) that all of the shares of
Common Stock then issuable upon exercise of the Warrant are outstanding at the
Determination Date.

     3.  PROCEDURE FOR EXERCISE.

          3.1    DELIVERY OF STOCK CERTIFICATES, ETC. ON EXERCISE. The Company
agrees that the shares of Common Stock purchased upon exercise of this Warrant
shall be deemed to be issued to the Holder as the record owner of such shares as
of the close of business on the date on which this Warrant shall have been
surrendered and payment made for such shares as aforesaid. As soon as
practicable after the exercise of this Warrant in full or in part, and in any
event within

<Page>

3 business days thereafter, the Company at its expense (including the payment by
it of any applicable issue taxes) will cause to be issued in the name of and
delivered to the Holder, or as such Holder (upon payment by such holder of any
applicable transfer taxes) may direct in compliance with applicable securities
laws, a certificate or certificates for the number of duly and validly issued,
fully paid and nonassessable shares of Common Stock (or Other Securities) to
which such Holder shall be entitled on such exercise, plus, in lieu of any
fractional share to which such holder would otherwise be entitled, cash equal to
such fraction multiplied by the then Fair Market Value of one full share,
together with any other stock or other securities and property (including cash,
where applicable) to which such Holder is entitled upon such exercise pursuant
to Section 1 or otherwise.

          3.2    EXERCISE.

          (a)    Payment may be made either in (i) cash or by certified or
official bank check payable to the order of the Company equal to the applicable
aggregate Exercise Price, (ii) by delivery of the Warrant, Common Stock and/or
Common Stock receivable upon exercise of the Warrant in accordance with Section
(b) below, or (iii) by a combination of any of the foregoing methods, for the
number of Common Shares specified in such form (as such exercise number shall be
adjusted to reflect any adjustment in the total number of shares of Common Stock
issuable to the holder per the terms of this Warrant) and the Holder shall
thereupon be entitled to receive the number of duly authorized, validly issued,
fully-paid and non-assessable shares of Common Stock (or Other Securities)
determined as provided herein.

          (b)    Notwithstanding any provisions herein to the contrary, if the
Fair Market Value of one share of Common Stock is greater than the Exercise
Price (at the date of calculation as set forth below), in lieu of exercising
this Warrant for cash, the Holder may elect to receive shares equal to the value
(as determined below) of this Warrant (or the portion thereof being exercised)
by surrender of this Warrant at the principal office of the Company together
with the properly endorsed Exercise Notice in which event the Company shall
issue to the Holder a number of shares of Common Stock computed using the
following formula:

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

     Where X =   the number of shares of Common Stock to be issued to the Holder

          Y=     the number of shares of Common Stock purchasable under
                 the Warrant or, if only a portion of the Warrant is
                 being exercised, the portion of the Warrant being
                 exercised (at the date of such calculation)

          A=     the Fair Market Value of one share of the Company's Common
                 Stock (at the date of such calculation)

          B=     Exercise Price (as adjusted to the date of such calculation)

<Page>

     4.   EFFECT OF REORGANIZATION, ETC.; ADJUSTMENT OF EXERCISE PRICE.

          4.1    REORGANIZATION, CONSOLIDATION, MERGER, ETC. In case at any time
or from time to time, the Company shall (a) effect a reorganization, (b)
consolidate with or merge into any other person, or (c) transfer all or
substantially all of its properties or assets to any other person under any plan
or arrangement contemplating the dissolution of the Company, then, in each such
case, as a condition to the consummation of such a transaction, proper and
adequate provision shall be made by the Company whereby the Holder of this
Warrant, on the exercise hereof as provided in Section 1 at any time after the
consummation of such reorganization, consolidation or merger or the effective
date of such dissolution, as the case may be, shall receive, in lieu of the
Common Stock (or Other Securities) issuable on such exercise prior to such
consummation or such effective date, the stock and other securities and property
(including cash) to which such Holder would have been entitled upon such
consummation or in connection with such dissolution, as the case may be, if such
Holder had so exercised this Warrant, immediately prior thereto, all subject to
further adjustment thereafter as provided in Section 4.

          4.2    DISSOLUTION. In the event of any dissolution of the Company
following the transfer of all or substantially all of its properties or assets,
the Company, prior to such dissolution, shall at its expense deliver or cause to
be delivered the stock and other securities and property (including cash, where
applicable) receivable by the Holder of the Warrant after the effective date of
such dissolution pursuant to Section 3.1 to a bank or trust company having its
principal office in New York, NY, as trustee for the Holder of the Warrant.

          4.3    CONTINUATION OF TERMS. Upon any reorganization, consolidation,
merger or transfer (and any dissolution following any transfer) referred to in
this Section 4, this Warrant shall continue in full force and effect and the
terms hereof shall be applicable to the shares of stock and other securities and
property receivable on the exercise of this Warrant after the consummation of
such reorganization, consolidation or merger or the effective date of
dissolution following any such transfer, as the case may be, and shall be
binding upon the issuer of any such stock or other securities, including, in the
case of any such transfer, the person acquiring all or substantially all of the
properties or assets of the Company, whether or not such person shall have
expressly assumed the terms of this Warrant as provided in Section 5. In the
event this Warrant does not continue in full force and effect after the
consummation of the transactions described in this Section 4, then only in such
event will the Company's securities and property (including cash, where
applicable) receivable by the holders of the Warrant be delivered to the Trustee
as contemplated by Section 4.2.

     5.  EXTRAORDINARY EVENTS REGARDING COMMON STOCK.

          5.1    RECLASSIFICATION, ETC. If the Company at any time shall, by
reclassification or otherwise, change the Common Stock into the same or a
different number of securities of any class or classes, this Warrant shall
thereafter be deemed to evidence the right to be issued an adjusted number of
such securities and kind of securities as would have been issuable as the result
of such change with respect to the Common Stock immediately prior to such
reclassification or other change.

<Page>

          5.2    STOCK SPLITS, COMBINATIONS AND DIVIDENDS. If the shares of
Common Stock are subdivided or combined into a greater or smaller number of
shares of Common Stock, or if a dividend is paid on the Common Stock in shares
of Common Stock, the Exercise Price shall be proportionately reduced in case of
subdivision of shares or stock dividend or proportionately increased in the case
of combination of shares, in each such case by the ratio which the total number
of shares of Common Stock outstanding immediately after such event bears to the
total number of shares of Common Stock outstanding immediately prior to such
event.

          5.3    SHARE ISSUANCES. Subject to the provisions of this Section, if
the Company shall at any time issue any shares of Common Stock to a person other
than the Holder (except (a) pursuant to Sections 5.1 or 5.2 above; (b) pursuant
to options, warrants, or other obligations to issue shares outstanding on the
date hereof as disclosed to Holder in writing; or (c) pursuant to options that
may be issued under any employee incentive stock option and/or any qualified
stock option plan adopted by the Company) for a consideration per share (the
"Offer Price") less than the Exercise Price in effect at the time of such
issuance, then the Exercise Price shall be immediately reset pursuant to the
formula below. For purposes hereof, the issuance of any security of the Company
convertible into or exercisable or exchangeable for Common Stock shall result in
an adjustment to the Exercise Price at the time of issuance of such securities.
If the Company issues any additional shares pursuant to this Section then, and
thereafter successively upon each such issue, the Exercise Price shall be
adjusted by multiplying the then applicable Exercise Price by the following
fraction:

                                      A + B
                          (A + B) + [((C - D) X B) / C]

              A = Actual shares outstanding prior to such offering
                     B = Actual shares sold in the offering
                               C = Exercise Price
                               D = Offering price

          5.4    COMPUTATION OF CONSIDERATION. For purposes of any computation
respecting consideration received pursuant to Section 5.3 above, the following
shall apply:

                 (a)    In the case of the issuance of shares of Common Stock
for cash, the consideration shall be the amount of such cash, provided that in
no case shall any deduction be made for any commissions, discounts or other
expenses incurred by the Company for any underwriting of the issue or otherwise
in connection therewith;

                 (b)    In the case of the issuance of shares of Common Stock
for a consideration in whole or in part other than cash, the consideration other
than cash shall be deemed to be the fair market value thereof as determined in
good faith by the Board of Directors of the Company (irrespective of the
accounting treatment thereof); and

                 (c)    Upon any such exercise, the aggregate consideration
received for such securities shall be deemed to be the consideration received by
the Company for the issuance

<Page>

of such securities plus the additional minimum consideration, if any, to be
received by the Company upon the conversion or exchange thereof (the
consideration in each case to be determined in the same manner as provided in
clauses (a) and (b) of this Section 5.4).

     6. In the event that the Company shall (a) issue additional shares of the
Common Stock as a dividend or other distribution on outstanding Common Stock,
(b) subdivide its outstanding shares of Common Stock, (c) combine its
outstanding shares of the Common Stock into a smaller number of shares of the
Common Stock or (d) issue any shares of Common Stock to a Person other than the
Holder (other than (i) pursuant to Subsections (a), (b) or (c) above or (ii)
pursuant to options, warrants or other obligations to issue shares outstanding
on the date hereof or (iii) any shares issued for incentive stock options or
NonQualified stock options in each case under the Company's Employee Stock
Option Plan) for a consideration per share or having an exercise, conversion or
exchange price less than the Exercise Price in effect at the time of such
issuance, then, in each such event, the Exercise Price shall, simultaneously
with the happening of such event, be adjusted by multiplying the then Exercise
Price by a fraction, the numerator of which shall be the number of shares of
Common Stock outstanding immediately prior to such event and the denominator of
which shall be the number of shares of Common Stock outstanding immediately
after such event, and the product so obtained shall thereafter be the Exercise
Price then in effect. The Exercise Price, as so adjusted, shall be readjusted in
the same manner upon the happening of any successive event or events described
herein in this Section 4. The number of shares of Common Stock that the holder
of this Warrant shall thereafter, on the exercise hereof as provided in Section
1, be entitled to receive shall be increased to a number determined by
multiplying the number of shares of Common Stock that would otherwise (but for
the provisions of this Section 4) be issuable on such exercise by a fraction of
which (a) the numerator is the Exercise Price that would otherwise (but for the
provisions of this Section 4) be in effect, and (b) the denominator is the
Exercise Price in effect on the date of such exercise.

     7.   CERTIFICATE AS TO ADJUSTMENTS. In each case of any adjustment or
readjustment in the shares of Common Stock (or Other Securities) issuable on the
exercise of the Warrant, the Company at its expense will promptly cause its
Chief Financial Officer or other appropriate designee to compute such adjustment
or readjustment in accordance with the terms of the Warrant and prepare a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based, including a
statement of (a) the consideration received or receivable by the Company for any
additional shares of Common Stock (or Other Securities) issued or sold or deemed
to have been issued or sold, (b) the number of shares of Common Stock (or Other
Securities) outstanding or deemed to be outstanding, and (c) the Exercise Price
and the number of shares of Common Stock to be received upon exercise of this
Warrant, in effect immediately prior to such adjustment or readjustment and as
adjusted or readjusted as provided in this Warrant. The Company will forthwith
mail a copy of each such certificate to the holder of the Warrant and any
Warrant agent of the Company (appointed pursuant to Section 11 hereof).

     8.   RESERVATION OF STOCK, ETC. ISSUABLE ON EXERCISE OF WARRANT. The
Company will at all times reserve and keep available, solely for issuance and
delivery on the exercise of the Warrant, shares of Common Stock (or Other
Securities) from time to time issuable on the exercise of the Warrant.

<Page>

     9.   ASSIGNMENT; EXCHANGE OF WARRANT. Subject to compliance with applicable
securities laws, this Warrant, and the rights evidenced hereby, may be
transferred by any registered holder hereof (a "Transferor") with respect to any
or all of the Shares. On the surrender for exchange of this Warrant, with the
Transferor's endorsement in the form of Exhibit B attached hereto (the
"Transferor Endorsement Form") and together with evidence reasonably
satisfactory to the Company demonstrating compliance with applicable securities
laws, which shall include, without limitation, a legal opinion from the
Transferor's counsel that such transfer is exempt from the registration
requirements of applicable securities laws, the Company at its expense) but with
payment by the Transferor of any applicable transfer taxes) will issue and
deliver to or on the order of the Transferor thereof a new Warrant of like
tenor, in the name of the Transferor and/or the transferee(s) specified in such
Transferor Endorsement Form (each a "Transferee"), calling in the aggregate on
the face or faces thereof for the number of shares of Common Stock called for on
the face or faces of the Warrant so surrendered by the Transferor.

     10.  REPLACEMENT OF WARRANT. On receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant
and, in the case of any such loss, theft or destruction of this Warrant, on
delivery of an indemnity agreement or security reasonably satisfactory in form
and amount to the Company or, in the case of any such mutilation, on surrender
and cancellation of this Warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.

     11.  REGISTRATION RIGHTS. The Holder of this Warrant has been granted
certain registration rights by the Company. These registration rights are set
forth in a Registration Rights Agreement entered into by the Company and
Purchaser of the Company's Convertible Note (the "Note") at or prior to the
issue date of this Warrant.

     12.  MAXIMUM EXERCISE. The Holder shall not be entitled to exercise this
Warrant on an exercise date, in connection with that number of shares of Common
Stock which, when added to (i) the number of shares of Common Stock otherwise
beneficially owned by the Holder and its affiliates on an exercise date, and
(ii) the number of shares of Common Stock issuable upon the exercise of this
Warrant with respect to which the determination of this proviso is being made on
an exercise date, would result in beneficial ownership by the Holder and its
affiliates of more than 4.99% of the outstanding shares of Common Stock of the
Company on such date. For the purposes of the proviso to the immediately
preceding sentence, beneficial ownership shall be determined in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulation
13d-3 thereunder. Subject to the foregoing, the Holder shall not be limited to
aggregate exercises which would result in the issuance of more than 4.99%. The
restriction described in this paragraph may be revoked upon 75 days prior notice
from the Holder to the Company and is automatically null and void upon an Event
of Default under the Note.

     13.  WARRANT AGENT. The Company may, by written notice to the each holder
of the Warrant, appoint an agent for the purpose of issuing Common Stock (or
Other Securities) on the exercise of this Warrant pursuant to Section 1,
exchanging this Warrant pursuant to Section 7, and replacing this Warrant
pursuant to Section 8, or any of the foregoing, and thereafter any such
issuance, exchange or replacement, as the case may be, shall be made at such
office by such agent.

<Page>

     14.  TRANSFER ON THE COMPANY'S BOOKS. Until this Warrant is transferred on
the books of the Company, the Company may treat the registered holder hereof as
the absolute owner hereof for all purposes, notwithstanding any notice to the
contrary.

     15.  NOTICES, ETC. All notices and other communications from the Company to
the Holder of this Warrant shall be mailed by first class registered or
certified mail, postage prepaid, at such address as may have been furnished to
the Company in writing by such holder or, until any such Holder furnishes to the
Company an address, then to, and at the address of, the last Holder of this
Warrant who has so furnished an address to the Company.

     16.  VOLUNTARY ADJUSTMENT BY THE COMPANY. The Company may at any time
during the term of this Warrant reduce the then current Exercise Price to any
amount and for any period of time deemed appropriate by the Board of Directors
of the Company.

     17.  MISCELLANEOUS. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Warrant shall be governed by and construed in accordance with
the laws of State of New York without regard to principles of conflicts of laws.
Any action brought concerning the transactions contemplated by this Warrant
shall be brought only in the state courts of New York or in the federal courts
located in the state of New York; provided, however, that the Holder may choose
to waive this provision and bring an action outside the state of New York. The
individuals executing this Warrant on behalf of the Company agree to submit to
the jurisdiction of such courts and waive trial by jury. The prevailing party
shall be entitled to recover from the other party its reasonable attorney's fees
and costs. In the event that any provision of this Warrant is invalid or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of law. Any such
provision which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision of this Warrant.
The headings in this Warrant are for purposes of reference only, and shall not
limit or otherwise affect any of the terms hereof. The invalidity or
unenforceability of any provision hereof shall in no way affect the validity or
enforceability of any other provision. The Company acknowledges that legal
counsel participated in the preparation of this Warrant and, therefore,
stipulates that the rule of construction that ambiguities are to be resolved
against the drafting party shall not be applied in the interpretation of this
Warrant to favor any party against the other party.

          IN WITNESS WHEREOF, the Company has executed this Warrant under seal
as of the date first written above.

                                        TRANSGENOMIC, INC.

                                        By:  /s/ Michael J. Draper
                                           -------------------------------------
                                           Name: Michael J. Draper
                                           Title: CFO

<Page>

Witness:

     /s/ Keith A. Johnson
----------------------------------------

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