Document:

Exhibit 4.2

 

NEITHER THIS SECURITY NOR THE SECURITIES
FOR WHICH THIS SECURITY ARE EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION
OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND APPLICABLE STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (I) AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL
TO THE TRANSFEROR (IF REQUESTED BY THE COMPANY) TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY,
OR (II) RULE 144 PROMULGATED UNDER THE SECURITIES ACT. NOTWITHSTANDING THE FOREGOING, THIS SECURITY AND THE SECURITIES ISSUABLE
UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

TRANSGENOMIC, INC.

 

WARRANT TO PURCHASE COMMON STOCK

 

Warrant No.: ________

 

Date of Issuance: January 8, 2016 (“Issuance
Date”)

 

Transgenomic, Inc.,
a Delaware corporation (the “Company”), hereby certifies that, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, ____________, the registered holder hereof or its permitted assigns (the “Holder”),
is entitled, subject to the terms set forth below, to purchase from the Company, at the Exercise Price (as defined below) then
in effect, upon exercise of this Warrant to Purchase Common Stock (including any Warrant(s) to Purchase Common Stock issued in
exchange, transfer or replacement hereof, this “Warrant”), at any time or times on or after the Issuance Date
but not after 11:59 p.m., New York time, on the Expiration Date (as defined below), ______________ (_________) (subject to adjustment
as provided herein) fully paid and non-assessable shares of Common Stock (as defined below) (the “Warrant Shares”).
Except as otherwise defined herein, capitalized terms used in this Warrant shall have the meanings set forth in Section 17 hereof
or, if not set forth therein, such terms shall have the meanings set forth in the Securities Purchase Agreement, dated as of January
6, 2016, by and among the Company and the Purchasers identified therein (the “Securities Purchase Agreement”).
This Warrant is one of a series of similar warrants issued pursuant to and in connection with the Securities Purchase Agreement.

 

     

     

    

 

1.          EXERCISE
OF WARRANT.

 

(a)          Mechanics
of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in Section
1(g)), this Warrant may be exercised by the Holder on any day on or after the Issuance Date and until the Expiration Date in whole
or in part, by delivery (whether via facsimile or otherwise) of a written notice, in the form attached hereto as Exhibit
A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant. Within one (1) Trading
Day following an exercise of this Warrant as aforesaid, the Holder shall deliver payment to the Company of an amount equal to the
Exercise Price in effect on the date of such exercise multiplied by the number of Warrant Shares as to which this Warrant was so
exercised (in respect of such specific exercise, the “Aggregate Exercise Price”) in cash or via wire transfer
of immediately available funds if the Holder did not notify the Company in such Exercise Notice that such exercise was made pursuant
to a Cashless Exercise (as defined in Section 1(d)). The Holder shall not be required to deliver the original of this Warrant in
order to effect an exercise hereunder. Execution and delivery of an Exercise Notice with respect to less than all of the Warrant
Shares shall have the same effect as cancellation of the original of this Warrant and issuance of a new Warrant evidencing the
right to purchase the remaining number of Warrant Shares. Execution and delivery of an Exercise Notice for all of the then-remaining
Warrant Shares shall have the same effect as cancellation of the original of this Warrant after delivery of the Warrant Shares
in accordance with the terms hereof. On or before the first (1st) Trading Day following the later of (i) the date on which the
Company has received an Exercise Notice or (ii) the date on which the Company receives the Aggregate Exercise Price, the Company
shall transmit (whether via facsimile or otherwise) a written acknowledgment of confirmation of receipt of such Exercise Notice,
in the form attached hereto as Exhibit C, to the Holder and the Company’s transfer agent (the “Transfer
Agent”). On or before the third (3rd) Trading Day following the later of (x) the date on which the Company has received
such Exercise Notice or (y) the date on which the Company receives the Aggregate Exercise Price (such date is referred to herein
as the “Delivery Date”), the Company shall (X) provided that (I) the Transfer Agent is participating in The
Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program and (II) either a Registration Statement
(as defined in the Registration Rights Agreement) for the resale by the Holder of the applicable Warrant Shares to be issued pursuant
to such Exercise Notice is effective or such Warrant Shares are otherwise eligible for resale pursuant to Rule 144, credit such
aggregate number of shares of Common Stock to which the Holder is entitled pursuant to such exercise to the Holder’s or its
designee’s balance account with DTC through its Deposit/ Withdrawal at Custodian system, or (Y) if either of the immediately
preceding clauses (I) or (II) are not satisfied, issue and deliver to the Holder or, at the Holder’s instruction pursuant
to the Exercise Notice, the Holder’s agent or designee, in each case, sent by reputable overnight courier to the address
as specified in the applicable Exercise Notice, a certificate, registered in the Company’s share register in the name of
the Holder or its designee (as indicated in the applicable Exercise Notice), for the number of shares of Common Stock to which
the Holder is entitled pursuant to such exercise. Upon delivery of an Exercise Notice and the Aggregate Exercise Price, the Holder
shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this
Warrant has been exercised, irrespective of the date such Warrant Shares are credited to the Holder’s DTC account or the
date of delivery of the certificates evidencing such Warrant Shares (as the case may be). If this Warrant is submitted in connection
with any exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise
is greater than the number of Warrant Shares being acquired upon an exercise, then, at the written request of the Holder and upon
surrender of this Warrant by the Holder at the principal office of the Company, the Company shall as soon as practicable and in
no event later than three (3) Business Days after any exercise and at its own expense, issue and deliver to the Holder (or its
designee) a new Warrant (in accordance with Section 8(d)) representing the right to purchase the number of Warrant Shares purchasable
immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is
exercised. No fractional shares of Common Stock are to be issued upon the exercise of this Warrant, but rather the number of shares
of Common Stock to be issued shall be rounded down to the nearest whole number. The Company shall pay any and all taxes and fees
which may be payable with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant.

 

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(b)          Exercise
Price. For purposes of this Warrant, “Exercise Price” means $1.21, subject to adjustment as provided herein.

 

(c)          Company’s
Failure to Timely Deliver Securities. If the Company shall fail, for any reason within its reasonable control, to issue (or
cause to be issued) to the Holder on or before the applicable Delivery Date, a certificate for the number of shares of Common Stock
to which the Holder is entitled and register such shares of Common Stock on the Company’s share register or to credit the
Holder’s balance account with DTC for such number of shares of Common Stock to which the Holder is entitled upon the Holder’s
exercise of this Warrant (as the case may be), then, in addition to all other remedies available to the Holder, the Company shall
pay in cash to the Holder on each day after such third (3rd) Trading Day that the issuance of such shares of Common Stock is not
timely effected an amount equal to 2% of the product of (A) the aggregate number of shares of Common Stock not issued to the Holder
on a timely basis and to which the Holder is entitled and (B) the Closing Sale Price of the Common Stock on the Trading Day immediately
preceding the last possible date on which the Company could have issued such shares of Common Stock to the Holder without violating
Section 1(a). In addition to the foregoing, if the Company shall fail to issue and deliver (or cause to be issued and delivered)
a certificate to the Holder and register such shares of Common Stock on the Company’s share register or to credit the Holder’s
balance account with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise
or exchange hereunder (as the case may be) on or prior to the applicable Delivery Date, and if on or after such Delivery Date,
the Holder (or any other Person in respect, or on behalf, of the Holder) purchases (in an open market transaction or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by the Holder of all or any portion of the number of shares of Common
Stock, or a sale of a number of shares of Common Stock equal to all or any portion of the number of shares of Common Stock, that
the Holder so anticipated receiving from the Company upon such exercise or exchange then, in addition to all other remedies available
to the Holder, the Company shall, in lieu of payments under the previous sentence, within three (3) Business Days after the Holder’s
request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total
purchase price (including brokerage commissions and reasonable out-of-pocket expenses, if any) for the shares of Common Stock so
purchased (including, without limitation, by any other Person in respect, or on behalf, of the Holder) (the “Buy-In Price”),
at which point the Company’s obligation to so issue and deliver such certificate or credit the Holder’s balance account
with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise or exchange
hereunder (as the case may be) (and to issue such shares of Common Stock) shall terminate, or (ii) promptly honor its obligation
to so issue and deliver to the Holder a certificate or certificates representing such shares of Common Stock or credit the Holder’s
balance account with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise
or exchange hereunder (as the case may be) and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price
over the product of (A) such number of shares of Common Stock multiplied by (B) the lowest Closing Sale Price of the Common Stock
on any Trading Day during the period commencing on the date of the applicable Exercise Notice or Exchange Notice (as defined below),
as the case may be, and ending on the date of such issuance and payment under this clause (ii).

 

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(d)          Cashless
Exercise. Notwithstanding anything contained herein to the contrary (other than Section 1(g) below), if at the time of an exercise
hereof an Equity Conditions Failure shall then exist, then the Holder may, in its sole discretion, exercise this Warrant in whole
or in part and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment
of the Aggregate Exercise Price, elect instead to make a cashless exercise (each a “Cashless Exercise”) under
this paragraph (d). A Cashless Exercise under this paragraph (d) may be made, at the election of the Holder from time to time and
irrespective of any other election to make a Cashless Exercise, so that upon such exercise the Holder shall receive the “Net
Number” of shares of Common Stock determined according to the following formula:

 

Net Number = (A x B) - (A x C)

B

 

For purposes of the foregoing formula:

 

A = the total number of shares of Common
Stock with respect to which this Warrant is then being exercised.

 

B = as applicable: (i) the Closing Sale
Price of the Common Stock on the Trading Day immediately preceding the date of the applicable Exercise Notice if such Exercise
Notice is (1) both executed and delivered pursuant to Section 1(a) hereof on a day that is not a Trading Day or (2) both executed
and delivered pursuant to Section 1(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as
defined in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) the Bid Price
of the Common Stock as of the time of the Holder’s execution of the applicable Exercise Notice if such Exercise Notice is
executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter pursuant
to Section 1(a) hereof, or (iii) the Closing Sale Price of the Common Stock on the date of the applicable Exercise Notice if the
date of such Exercise Notice is a Trading Day and such Exercise Notice is both executed and delivered pursuant to Section 1(a)
hereof after the close of “regular trading hours” on such Trading Day.

 

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

 

Notwithstanding anything to the contrary
contained herein, exercise of this Warrant on a cashless basis may also be made from time to time at the election of the Holder
(and irrespective of any election to make a Cashless Exercise under this paragraph (d)), pursuant to the exchange provisions of
Section 5 of this Warrant.

 

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(e)          Disputes.
In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the number of Warrant Shares
to be issued pursuant to the terms hereof (including, without limitation, the Net Number), the Company shall promptly issue to
the Holder the number of Warrant Shares that are not disputed, provided that following such issuance to the Holder such dispute
shall be resolved in accordance with Section 14.

 

(f)          Insufficient
Authorized Shares. The Company shall at all times keep reserved for issuance under this Warrant a number of shares of Common
Stock as shall be necessary to satisfy the Company’s obligation to issue shares of Common Stock hereunder (without regard
to any limitation otherwise contained herein with respect to the number of shares of Common Stock that may be acquirable upon exercise
or exchange of this Warrant). If, notwithstanding the foregoing, and not in limitation thereof, at any time while this Warrant
remains outstanding the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy
its obligation to reserve for issuance upon exercise or exchange of this Warrant at least a number of shares of Common Stock equal
to the number of shares of Common Stock as shall from time to time be necessary to effect the exercise or exchange of this Warrant
(the “Required Reserve Amount”) (an “Authorized Share Failure”), then the Company shall immediately
take all action necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the
Company to reserve the Required Reserve Amount. Without limiting the generality of the foregoing sentence, as soon as practicable
after the date of the occurrence of an Authorized Share Failure, but in no event later than ninety (90) days after the occurrence
of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval of an increase in the number
of authorized shares of Common Stock. In connection with such meeting, the Company shall provide each stockholder with a proxy
statement and shall use its reasonable efforts to solicit its stockholders’ approval of such increase in authorized shares
of Common Stock.

 

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(g)          Restrictions
on Exercise. Notwithstanding anything to the contrary contained herein, the number of Warrant Shares that may be acquired by
the Holder upon any exercise of this Warrant (or otherwise in respect hereof) shall be limited to the extent necessary to ensure
that, following such exercise (or other issuance), the total number of shares of Common Stock then beneficially owned by the Holder
and its Affiliates and any other Persons whose beneficial ownership of Common Stock would be aggregated with the Holder’s
for purposes of Section 13(d) of the Exchange Act, does not exceed 9.99% of the total number of then issued and outstanding shares
of Common Stock (including for such purpose the shares of Common Stock issuable upon such exercise). For purposes of the foregoing
sentence, the aggregate number of shares of Common Stock beneficially owned by the Holder and its Affiliates shall include the
number of shares of Common Stock issuable upon exercise of this Warrant with respect to which the determination of such sentence
is being made, but shall exclude the number of shares of Common Stock which are issuable upon (i) exercise of the remaining, unexercised
portion of this Warrant beneficially owned by the Holder and its Affiliates, and (ii) exercise or conversion of the unexercised
or unconverted portion of any other securities of the Company beneficially owned by the Holder and its Affiliates (including, without
limitation, any convertible notes, convertible stock or warrants) that are subject to a limitation on conversion or exercise analogous
to the limitation contained herein. Except as set forth in the preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by
the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the
Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent
that the limitation contained in this paragraph applies, the determination of whether this Warrant is exercisable (in relation
to other securities owned by the Holder) and of which portion of this Warrant is exercisable shall be in the sole discretion of
the Holder, and the submission of an Exercise Notice shall be deemed to be the Holder’s determination of whether this Warrant
is exercisable (in relation to other securities owned by the Holder) and of which portion of this Warrant is exercisable, in each
case subject to such aggregate percentage limitation, and the Company shall have no obligation to verify or confirm the accuracy
of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance
with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this paragraph, in
determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common
Stock as reflected in (x) the Company’s most recent Form 10-Q or Form 10-K, as the case may be, (y) a more recent public
announcement by the Company, or (z) any other notice by the Company or its transfer agent setting forth the number of shares of
Common Stock outstanding. Upon the written request of the Holder, the Company shall within three (3) Trading Days confirm orally
and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares
of Common Stock shall be determined after giving effect to any actual conversion or exercise of securities of the Company, including
this Warrant, by the Holder and its Affiliates since the date as of which such number of outstanding shares of Common Stock was
last publicly reported or confirmed to the Holder. This provision shall not restrict the number of shares of Common Stock which
a Holder may receive or beneficially own in order to determine the amount of securities or other consideration that such Holder
may receive in the event of a Fundamental Transaction as contemplated by this Warrant. This provision shall automatically expire
61 calendar days prior to the Expiration Date. The Company shall provide the Holder with not less than ten (10) calendar days’
prior notice of such impending expiration of this beneficial ownership blocker.

 

(h)          Cash
Exercise. Provided that no Equity Conditions Failure then exists, if the trading price on the Principal Market at the time
of an exercise of this Warrant is greater than the then applicable Exercise Price then in effect, then in respect of such particular
exercise the Holder may only exercise this Warrant for a cash exercise price (and not by means of a Cashless Exercise under Section
1(d) above or on a cashless basis under Section 5 below).

 

2.          ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and number of Warrant Shares issuable upon exercise of this
Warrant are subject to adjustment from time to time as set forth in this Section 2.

 

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(a)          Stock
Dividends and Splits. If the Company, at any time on or after the Issuance Date, (i) pays a stock dividend on one or more classes
of its then outstanding shares of Common Stock or otherwise makes a distribution on any class of capital stock that is payable
in shares of Common Stock, (ii) subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes
of its then outstanding shares of Common Stock into a larger number of shares, or (iii) combines (by combination, reverse stock
split or otherwise) one or more classes of its then outstanding shares of Common Stock into a smaller number of shares, then in
each such case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common
Stock outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding
immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after
the record date for the determination of stockholders entitled to receive such dividend or distribution, and any adjustment pursuant
to clause (ii) or (iii) of this paragraph shall become effective immediately after the effective date of such subdivision or combination.
If any event requiring an adjustment under this paragraph occurs during the period that an Exercise Price is calculated hereunder,
then the calculation of such Exercise Price shall be adjusted appropriately to reflect such event.

 

(b)          Number
of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to Section 2(a), the number of Warrant
Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such
adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same as the aggregate
Exercise Price in effect immediately prior to such adjustment (without regard to any limitations on exercise contained herein).

 

(c)          Calculations.
All calculations under this Section 2 shall be made by rounding to the nearest 1/10000th of a cent and the nearest 1/100th of a
share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held
by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock.

 

3.          [Intentionally
Omitted].

 

4.          FUNDAMENTAL
TRANSACTIONS. If the Company, directly or indirectly, in one or more related transactions, (a) consolidates or merges with
or into (whether or not the Company is the surviving corporation) any other Person, unless the stockholders of the Company immediately
prior to such consolidation or merger continue to hold more than 50% of the outstanding shares of Voting Stock after such consolidation
or merger, (b) sells, leases, licenses, assigns, transfers, conveys or otherwise disposes of all or substantially all of its properties
or assets to any other Person, (c) allows any other Person to make a purchase, tender or exchange offer that is accepted by the
holders of more than 50% of the outstanding shares of Voting Stock of the Company (not including any shares of Voting Stock of
the Company held by the Person or Persons making or party to, or associated or affiliated with the Persons making or party to,
such purchase, tender or exchange offer), or (d) consummates a stock or share purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with any other Person whereby
such other Person acquires more than 50% of the outstanding shares of Voting Stock of the Company (not including any shares of
Voting Stock of the Company held by the other Person or other Persons making or party to, or associated or affiliated with the
other Persons making or party to, such stock or share purchase agreement or other business combination) (in any such case, a “Fundamental
Transaction”), then this Warrant will become the right thereafter to receive, upon exercise, the same amount and kind
of securities, cash or property as the Holder would have been entitled to receive upon the occurrence of such Fundamental Transaction
if it had been, immediately prior to such Fundamental Transaction, the holder of the number of Warrant Shares then issuable upon
exercise in full of this Warrant (the “Alternate Consideration”) in lieu of Common Stock. The Aggregate Exercise
Price for this Warrant will not be affected by any such Fundamental Transaction, but the Company shall apportion such Aggregate
Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components
of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received
in a Fundamental Transaction, then the Holder, to the extent practicable, shall be given the same choice as to the Alternate Consideration
it receives upon any exercise of this Warrant following such Fundamental Transaction. In addition, at the request of the Holder,
upon surrender of this Warrant, any successor to the Company or surviving entity in such Fundamental Transaction shall issue to
the Holder a new warrant consistent with the foregoing provisions and evidencing the Holder’s right to purchase the Alternate
Consideration for the Aggregate Exercise Price upon exercise thereof. Each such new warrant (or any such replacement security)
will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.

 

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5.          EXCHANGE
RIGHTS. In addition to the rights of the Holder under Section 1 hereof, this Warrant shall be exchangeable by the Holder on
a cashless basis as further set forth below (and subject to the limitations set forth in Section 1(g) hereof).

 

(a)          Exchange
Right. Subject to Section 1(g), the Holder shall be entitled at any time and from time to time from and after the Issuance
Date and prior to the Expiration Date, by written notice to the Company in the form of Exhibit B attached hereto
(an “Exchange Notice”) to exchange (an “Exchange”) all or any portion of this Warrant for
fully paid and non-assessable shares of Common Stock; provided, however, that the Company shall have the option of paying cash
in lieu of shares of Common Stock with respect to all or a portion of any Exchange Amount (as defined herein) for which an Exchange
is requested, all as further set forth in this Section 5.

 

(b)          Exchange
Number. The number of shares of Common Stock issuable in respect of an Exchange requested hereunder shall be determined by
dividing (i) the Exchange Amount (as defined below) in respect of such Exchange by (ii) the Exchange Price (as defined below) in
respect of such Exchange (such number of shares of Common Stock so issuable being the “Exchange Number”); provided,
however, that the Company shall not issue more than an aggregate of _____________1
shares of Common Stock (as adjusted for any and all stock dividends, stock splits, stock combinations or other similar transactions)
pursuant to any Exchange hereunder unless either (1) the Company has previously obtained stockholder approval to issue such additional
shares of Common Stock, or (2) the issuance of such additional shares of Common Stock has been expressly permitted by the Principal
Market (each of (1) or (2), “Issuance Approval”), and, in the absence of Issuance Approval with respect to any
Exchange Notice delivered to the Company after April 7, 2016, the Company shall be required to pay the balance, if any, of the
Exchange Amount to the Holder in cash in accordance with the provisions hereof. For avoidance of doubt, the Company shall not be
required to pay the balance, if any, of the Exchange Amount to the Holder in cash in accordance with the provisions hereof, if
it does not obtain Issuance Approval with respect to any Exchange Notice delivered to the Company on or prior to April 7, 2016.

 

 

1
To be equal to the number of Warrant Shares specified in the first paragraph of this Warrant.

 

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(c)          Definitions.

 

(i)          “Exchange
Amount” means the Black Scholes Exchange Value of the portion of this Warrant being exchanged pursuant to Section 5(a),
determined as of the applicable Exchange Date (as defined below).

 

(ii)         “Exchange
Price” means the Closing Bid Price as of two (2) Trading Days prior to the Exchange Date; provided that for purposes
of calculating the Exchange Number, the Exchange Price in each Exchange shall be no less than $0.50 (as adjusted for any and all
stock dividends, stock splits, stock combinations or other similar transactions), and, if the Closing Bid Price as of the two (2)
Trading Days prior to the Exchange Date is less than $0.50 (as adjusted for any and all stock dividends, stock splits, stock combinations
or other similar transactions), the Company shall, in addition to issuing shares of Common Stock to the Holder in such Exchange
at an Exchange Price equal to $0.50 (as adjusted for any and all stock dividends, stock splits, stock combinations or other similar
transactions), be required to pay to the Holder in accordance with the provisions hereof an amount in cash equal to the product
obtained by multiplying (A) $0.50 (as adjusted for any and all stock dividends, stock splits, stock combinations or other similar
transactions) minus the Closing Bid Price as of two (2) Trading Days prior to the Exchange Date, by (B) the aggregate number of
shares of Common Stock issued to the Holder by the Company in such Exchange at an Exchange Price equal to $0.50 (as adjusted for
any and all stock dividends, stock splits, stock combinations or other similar transactions).

 

(d)          Mechanics
of Exchange.

 

(i)          Optional
Exchange. To exchange any Exchange Amount on any date (an “Exchange Date”), the Holder shall transmit by
facsimile (or otherwise deliver), for receipt on such date, a copy of an executed Exchange Notice. The Holder shall not be required
to deliver the original of this Warrant in order to effect an exchange hereunder. Execution and delivery of an Exchange Notice
with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original of this Warrant
and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares. Execution and delivery of
an Exchange Notice for all of the then-remaining Warrant Shares shall have the same effect as cancellation of the original of this
Warrant after delivery of the Warrant Shares in accordance with the terms hereof.

 

(ii)         Exchange
for Shares of Common Stock. Within one (1) Trading Day after the date on which the Company has received an Exchange Notice,
and in the event that the Company has not elected or is not required to pay the entire Exchange Amount in cash in accordance with
the terms hereof, the Company shall transmit (whether via facsimile or otherwise) an acknowledgment of confirmation of receipt
of such Exchange Notice, in the form attached hereto as Exhibit C, to the Holder and the Transfer Agent. On or before
the third (3rd) Trading Day following the date on which the Company has received such Exchange Notice, the Exchange Number of shares
of Common Stock (or such lesser number of shares of Common Stock if the Company has either elected or is required to pay a portion
of the Exchange Amount in cash) shall be issued to the Holder, or at the Holder’s instruction, to the Holder’s agent
or designee, as if such shares of Common Stock were issuable upon an exercise under Section 1 hereof.

 

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(iii)        Exchange
for Cash. Within one (1) Trading Day after the date on which the Company has received an Exchange Notice, and in the event
that the Company has elected or is required to pay the entire or any portion of the Exchange Amount in cash in accordance with
the terms hereof, the Company shall transmit (whether via facsimile or otherwise) an acknowledgment of confirmation of receipt
of such Exchange Notice, in the form attached hereto as Exhibit D, to the Holder. On or before the third (3rd) Trading
Day following the date on which the Company has received such Exchange Notice, the Company shall pay, as applicable, all or such
portion of the Exchange Amount in cash by wire transfer of immediately available funds to an account designated by the Holder on
the Exchange Notice.

 

(iv)        Disputes.
Dispute as to the determination of the Exchange Amount, the Exchange Price or the arithmetic calculation of the number of Warrant
Shares to be issued pursuant to the terms hereof (or cash in lieu thereof), and shares subject to such dispute, shall be handled
in the same manner as disputes under Section 1(e) hereof.

 

6.          NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its certificate of incorporation or bylaws (each
as in effect from time to time) or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement,
dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms of this Warrant, and will at all times in good faith carry out all the provisions of this Warrant and take all
action as may be required to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (a)
shall not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise
Price then in effect, (b) shall take all such actions as may be necessary or appropriate in order that the Company may validly
and legally issue fully paid and non-assessable shares of Common Stock upon the exercise of this Warrant (or such other securities,
cash, assets or other property then deliverable upon exercise of this Warrant), and (c) shall, so long as this Warrant is outstanding,
take all action necessary to reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the
purpose of effecting the exercise of this Warrant, the maximum number of shares of Common Stock as shall from time to time be necessary
to effect the exercise of this Warrant (without regard to any limitations on exercise).

 

7.          WARRANT
HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in its capacity as a
holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company
for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in its capacity as
the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to
any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance
or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the
Holder of the Warrant Shares which it is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained
in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this
Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors
of the Company.

 

    	 	10	 

     

    

 

8.          REISSUANCE
OF WARRANTS.

 

(a)          Transfer
of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company
will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 8(d)), registered as the
Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less
than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section
8(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred. Prior to transferring
this Warrant, the Holder shall inform the transferee of the total number of Warrant Shares then underlying this Warrant.

 

(b)          Lost,
Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant (as to which a written certification and the indemnification contemplated below shall
suffice as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to
the Company in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the
Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 8(d)) representing the right to purchase
the Warrant Shares then underlying this Warrant.

 

(c)          Exchangeable
for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the
Company, for a new Warrant or Warrants (in accordance with Section 8(d)) representing in the aggregate the right to purchase the
number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion
of such Warrant Shares as is designated by the Holder at the time of such surrender; provided, however, no warrants for fractional
shares of Common Stock shall be given.

 

(d)          Issuance
of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant
(i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to
purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 8(a)
or Section 8(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying
the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this
Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date,
and (iv) shall have the same rights and conditions as this Warrant.

 

    	 	11	 

     

    

 

9.          NOTICES.
Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance
with Section 6.3 of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of all actions
taken pursuant to this Warrant, including in reasonable detail a description of such action and the reason therefor. Without limiting
the generality of the foregoing, the Company will give written notice to the Holder as soon as practicable upon each adjustment
of the Exercise Price and the number of Warrant Shares, setting forth in reasonable detail, and certifying, the calculation of
such adjustment(s). If the Company (a) declares a dividend or any other distribution of cash, securities or other property in respect
of its Common Stock (other than a dividend payable solely in shares of Common Stock) or (b) authorizes the voluntary dissolution,
liquidation or winding up of the affairs of the Company, then the Company shall deliver to the Holder a notice describing the material
terms and conditions of such dividend, distribution or transaction. Notwithstanding anything to the contrary in this Section 9,
the failure to deliver any notice under this Section 9 or any defect therein shall not affect the validity of the corporate action
required to be described in such notice. Until the exercise of this Warrant or any portion of this Warrant, the Holder shall not
have nor exercise any rights by virtue of ownership of a Warrant as a stockholder of the Company (including without limitation
the right to notification of stockholder meetings or the right to receive any notice or other communication concerning the business
and affairs of the Company other than as provided in this Section 9).

 

10.         AMENDMENT
AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant (other than Section 1(g)) may be amended and
the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the
Company has obtained the written consent of the Holder. No waiver shall be effective unless it is in writing and signed by an authorized
representative of the waiving party.

 

11.         SEVERABILITY.
If any provision of this Warrant is held to be invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt
to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate
such substitute provision in this Warrant.

 

12.         GOVERNING
LAW. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed
by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of
conflicts of law thereof. Each party agrees that all Proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Warrant (whether brought against a party hereto or its respective Affiliates, employees or agents)
shall be commenced exclusively in the New York Courts. Each party hereto hereby irrevocably submits to the exclusive jurisdiction
of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein (including with respect to the enforcement of this Warrant), and hereby irrevocably waives, and agrees
not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any such New York Court, or
that such Proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal
service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Warrant
and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT
OF OR RELATING TO THIS WARRANT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

    	 	12	 

     

    

 

13.         HEADINGS.
The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect
any of the provisions hereof. Any references to paragraphs, subparagraphs, sections or subsections are to those parts of this Warrant,
unless the context clearly indicates to the contrary. The language used in this Warrant will be deemed to be the language chosen
by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. This Warrant
shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring
any party by virtue of the authorship of any provisions of this Warrant.

 

14.         DISPUTE
RESOLUTION. In the case of a dispute as to the determination of the Exercise Price, the Exchange Amount, the Exchange Price,
the Closing Sale Price, the Closing Bid Price, the Bid Price or the fair market value or the arithmetic calculation of the Warrant
Shares (as the case may be), the Company or the Holder (as the case may be) may submit the disputed determinations or arithmetic
calculations (as the case may be) via facsimile (a) within two (2) Business Days after receipt of the applicable notice giving
rise to such dispute to the Company or the Holder (as the case may be) or (b) if no notice gave rise to such dispute, at any time
after the Holder or the Company (as the case may be) learned of the circumstances giving rise to such dispute. If the Holder and
the Company are unable to agree upon such determination or calculation (as the case may be) of the Exercise Price, the Exchange
Amount, the Exchange Price, the Closing Sale Price, the Closing Bid Price, the Bid Price or the fair market value or the number
of Warrant Shares (as the case may be) within three (3) Business Days of such disputed determination or arithmetic calculation
being submitted to the Company or the Holder (as the case may be), then the Company shall, within two (2) Business Days submit
via facsimile or otherwise (i) the disputed arithmetic calculation of the Warrant Shares, the disputed determination of the Exercise
Price, the Exchange Amount, the Exchange Price, the Closing Sale Price, the Closing Bid Price, the Bid Price or the fair market
value (as the case may be) to an independent, reputable investment bank of nationally recognized standing selected by the Holder
and reasonably acceptable to the Company or (ii) if acceptable to the Holder, the disputed arithmetic calculation of the Warrant
Shares to the Company’s independent, outside accountant. The Company shall use its commercially reasonable efforts to cause
at its expense the investment bank or the accountant (as the case may be) to perform the determinations or calculations (as the
case may be) and notify the Company and the Holder of the results no later than ten (10) Business Days from the time it receives
such disputed determinations or calculations (as the case may be). Such investment bank’s or accountant’s determination
or calculation (as the case may be) shall be binding upon all parties absent demonstrable error. The party whose determination
or calculation is furthest from that determined or calculated by the investment bank or accountant shall pay the costs of such
determination or calculation.

 

    	 	13	 

     

    

 

15.         REMEDIES,
CHARACTERIZATION, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative
and in addition to all other remedies available under this Warrant and the other Transaction Documents, at law or in equity (including
a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue
actual and consequential damages for any failure by the Company to comply with the terms of this Warrant. The Company covenants
to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts
set forth or provided for herein with respect to payments, exercises and the like (and the computation thereof) shall be the amounts
to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company
(or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable
harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the
event of any such breach or threatened breach, the holder of this Warrant shall be entitled, in addition to all other available
remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other
security being required. The Company shall provide all information and documentation to the Holder that is reasonably requested
by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions of this Warrant (including,
without limitation, compliance with Section 2 hereof). The issuance of shares and certificates for shares as contemplated hereby
upon the exercise of this Warrant shall be made without charge to the Holder or such shares for any issuance or stamp tax or other
costs in respect thereof, provided that the Company shall not be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of any certificate in a name other than the Holder or its agent on its behalf.

 

16.         TRANSFER.
This Warrant may be offered for sale, sold, transferred or assigned without the consent of the Company.

 

17.         CERTAIN
DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:

 

(a)          “Bid
Price” means, for any security as of the particular time of determination, the bid price for such security on the Principal
Market as reported by Bloomberg as of such time of determination, or, if the Principal Market is not the principal securities exchange
or trading market for such security, the bid price of such security on the principal securities exchange or trading market where
such security is listed or traded as reported by Bloomberg as of such time of determination, or if the foregoing does not apply,
the bid price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by
Bloomberg as of such time of determination, or, if no bid price is reported for such security by Bloomberg as of such time of determination,
the average of the bid prices of all of the market makers for such security as reported in the “pink sheets” by OTC
Markets Group Inc. (formerly Pink Sheets LLC) (the “Pink Sheets”) as of such time of determination. If the Bid
Price cannot be calculated for a security as of the particular time of determination on any of the foregoing bases, the Bid Price
of such security as of such time of determination shall be the fair market value as mutually determined by the Company and the
Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall
be resolved in accordance with the procedures in Section 14. All such determinations shall be appropriately adjusted for any stock
dividend, stock split, stock combination or other similar transaction during such period.

 

    	 	14	 

     

    

 

(b)          “Black
Scholes Exchange Value” means the value of an option for the number of shares equal to the portion of this Warrant being
exchanged at the applicable Exchange Date as set forth in the applicable Exchange Notice as such value is determined calculated
using the Black Scholes Option Pricing Model obtained from the “OV” function on Bloomberg utilizing (i) an underlying
price per share equal to the Closing Sale Price of the Common Stock as of the Issuance Date (adjusted upward to the same extent
that the Exercise Price hereunder has been adjusted upward pursuant to Section 2(a) hereof), (ii) a risk-free interest rate corresponding
to the U.S. Treasury rate for a period equal to the remaining term of this Warrant as of such Exchange Date, (iii) a strike price
equal to the Exercise Price in effect at the time of the applicable Exchange, (iv) an expected volatility equal to 135%, and (v)
a deemed remaining term of this Warrant of five (5) years (regardless of the actual remaining term of this Warrant).

 

(c)          “Bloomberg”
means Bloomberg, L.P.

 

(d)          “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed.

 

(e)          “Closing
Bid Price” and “Closing Sale Price” means, for any security as of any date, the last closing bid price
and the last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the
Principal Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade
price (as the case may be) then the last bid price or last trade price, respectively, of such security prior to 4:00:00 p.m., New
York time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for
such security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange
or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last
closing bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin
board for such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for
such security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of all of the market makers for such
security as reported in the Pink Sheets. If the Closing Bid Price or the Closing Sale Price cannot be calculated for a security
on a particular date on any of the foregoing bases, the Closing Bid Price or the Closing Sale Price (as the case may be) of such
security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the
Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with
the procedures in Section 14. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock
combination or other similar transaction during such period.

 

(f)          “Common
Stock” means (i) the Company’s shares of common stock, $0.01 par value per share, and (ii) any capital stock into
which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.

 

    	 	15	 

     

    

 

(g)          “Equity
Conditions” means: (i) the Company shall be in compliance in all material respects with all of its obligations under
all of the Transaction Documents, (ii) each of a Registration Statement and the Prospectus contained therein (each as defined in
the Registration Rights Agreement) shall then be effective and fully available for use with respect to the resale of all of the
Warrant Shares issued pursuant to a cash exercise hereof, (iii) all Underlying Common Shares and Warrant Shares (including any
Warrant Shares to be received upon exercise or exchange of this Warrant and including any Warrant Shares to be issued in a cash
exercise) shall be then, or upon such issuance shall be (as the case may be), freely tradable by the Holder without restriction
of any kind or nature (including, without limitation, under applicable securities laws) (and the Company shall have no knowledge
of any fact which would reasonably be expected to negate the foregoing in the foreseeable future) other than restrictions that
may result from the Holder being an “affiliate” of the Company as defined in Rule 144 promulgated under the Securities
Act, and (iv) no limitation shall be applicable with respect to the issuance of any Warrant Shares for cash hereunder (other than
under Section 1(g)).

 

(h)          “Equity
Conditions Failure” means that on any applicable date of determination, any of the Equity Conditions are not then satisfied.

 

(i)          “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

(j)          “Expiration
Date” means the date that is the fifth (5th) anniversary of the Issuance Date or, if such date falls on a
day other than a Business Day or on which trading does not take place on the Principal Market (a “Holiday”),
the next date that is not a Holiday.

 

(k)        “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity or a government or any department or agency thereof.

 

(l)          “Principal
Market” means the NASDAQ Capital Market.

 

(m)        “Registration
Rights Agreement” means the Registration Rights Agreement, dated as of January 8, 2016, by and between the Company and
the Purchaser.

 

(n)        “Trading
Day” means, as applicable, (i) with respect to all price determinations relating to the Common Stock, any day on which
the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading market for the Common
Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded, provided that “Trading
Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or market for less than 4.5
hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange or market (or
if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the
hour ending at 4:00:00 p.m., New York time) or (ii) with respect to all determinations other than price determinations relating
to the Common Stock, any day on which The Nasdaq Stock Market, LLC (or any successor thereto) is open for trading of securities.

 

(o)         “Voting
Stock” of a Person means capital stock of such Person of the class or classes pursuant to which the holders thereof have
the general voting power to elect, or the general power to appoint, at least a majority of the board of directors, managers or
trustees of such Person (irrespective of whether or not at the time capital stock of any other class or classes shall have or might
have voting power by reason of the happening of any contingency).

 

    	 	16	 

     

    

 

18.         REDEMPTION.

 

(a)          Redemption
of Warrant. This Warrant may be redeemed, at the option of the Company, at any time after it becomes exercisable and
prior to its expiration, at the office of the Company upon the notice referred to in Section 9 hereof, at the price equal to 130%
of the Exercise Price (the “Redemption Price”).

 

(b)          Date
Fixed for, and Notice of, Redemption. In the event the Company shall elect to redeem this Warrant, the Company shall
fix a date for the redemption. Notice of redemption shall be mailed by first class mail, postage prepaid, by the Company not less
than thirty (30) days prior to the date fixed for redemption to the Holder of this Warrant to be redeemed at its last address as
it shall appear on the registration books. Any notice mailed in the manner herein provided shall be conclusively presumed to have
been duly given whether or not the Holder received such notice.

 

(c)          Exercise
After Notice of Redemption. This Warrant may be exercised in accordance with this Warrant at any time after notice of redemption
shall have been given by the Company and prior to the time and date fixed for redemption. On and after the redemption date, the
Holder shall have no further rights except to receive, upon surrender of this Warrant, the Redemption Price.

 

[signature page follows]

 

    	 	17	 

     

    

 

IN WITNESS WHEREOF,
the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.

 

	TRANSGENOMIC, INC.	 
	 	 
	By:	 	 
	Name: Paul Kinnon	 
	Title: President and Chief Executive Officer	 

 

     

     

    

 

EXHIBIT A

EXERCISE NOTICE

 

TO BE EXECUTED BY THE HOLDER TO EXERCISE
THIS

WARRANT TO PURCHASE COMMON STOCK

 

TRANSGENOMIC, INC.

 

The undersigned Holder
hereby exercises the right to purchaseof the shares of Common Stock (“Warrant Shares”) of Transgenomic,
Inc., a Delaware corporation (the “Company”), evidenced by the Warrant to Purchase Common Stock Warrant No.
[___] with an Issuance Date of January 8, 2016 (the “Warrant”). Capitalized terms used herein and not otherwise
defined shall have the respective meanings set forth in the Warrant.

 

1.          Form
of Exercise Price. The Holder intends that payment of the Exercise Price shall be made as:

 

	 	 	a “Cash Exercise” with respect to ______________ Warrant Shares; and/or
	 	 	 
	 	 	a “Cashless Exercise” with respect to ___________ Warrant Shares.

 

In the event that the
Holder has elected a Cashless Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the Holder
hereby represents and warrants that (i) this Exercise Notice was executed by the Holder at[a.m.][p.m.] on the date set forth
below and (ii) if applicable, the Bid Price as of such time of execution of this Exercise Notice was $         .

 

2.          Payment
of Exercise Price. In the event that the Holder has elected a Cash Exercise with respect to some or all of the Warrant Shares,
the Holder shall pay the Aggregate Exercise Price in the sum of $to the Company in accordance with the terms of the Warrant.

 

3.          Delivery
of Warrant Shares and Net Number of shares of Common Stock. The Company shall deliver to Holder, or its designee or agent as
specified below,shares of Common Stock in respect of the exercise contemplated hereby. Delivery shall be made to the Holder,
or for its benefit, to the following address:

 

	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

	Date:  	 	 
	 	 	 
	 	Name of Holder	 

 

	By: 	 	 
	 	Name:	 
	 	Title:	 

 

	Account  
	Number: 	 
	 	(if electronic book entry transfer)  
	 
	Transaction Code  
	Number: 	 
	 	(if electronic book entry transfer)  

 

     

     

    

 

EXHIBIT B

EXCHANGE NOTICE

 

TO BE EXECUTED BY THE HOLDER TO EXCHANGE
THIS

WARRANT TO PURCHASE COMMON STOCK

 

TRANSGENOMIC, INC.

 

The undersigned Holder
hereby exercises the right to exchange the Warrant to Purchase Common Stock No.           (the
“Warrant”) of Transgenomic, Inc., a Delaware corporation (the “Company”) as described. Capitalized
terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.

 

	Date of Exchange: 	 	 

 

		1.	The total number of shares with respect to which this Warrant is being exchanged:

 

		2.	Black Scholes Exchange Value (as defined in Section 17
of the Warrant) for an option to purchase        [SAME # AS FROM 1 ABOVE] shares of Common
Stock: $     .

 

	Resulting Exchange Amount:  $	[insert from item 2 above]

 

		3.	Exchange Price: Closing Bid Price of the Common Stock as of two (2) Trading Days prior to
the date of Exchange (as such Closing Bid Price is defined in Section 17 of the Warrant): $            .

 

Resulting Exchange Number [Exchange Amount/Exchange
Price as set forth in 3 above]: shares of Common Stock

 

	Account for Wire
	Transfer (if applicable): 	 

 

	Account for Share issuance (if applicable):
	 
	 	 

 

	Date:  	 
	 	 
	 	 
	Name of Holder	 

 

	By:	 	 
	 	Name:	 
	 	Title:	 

  

     

     

    

  

EXHIBIT C

ACKNOWLEDGMENT

 

The Company hereby
acknowledges this [Exercise Notice][Exchange Notice] and hereby directs                   to issue the above indicated number of shares
of Common Stock in accordance with the Transfer Agent Instructions dated        , 20      ,
from the Company and acknowledged and agreed to by                      .

 

TRANSGENOMIC, INC.

 

	By:	 	 
	 	Name:	 
	 	Title:	 

 

     

     

    

 

EXHIBIT D

ACKNOWLEDGMENT

 

The Company hereby
acknowledges this Exchange Notice and agrees to pay the aggregate sum of $________________ to the Holder in lieu of [the entire
Exchange Amount][a portion of the Exchange Amount].

 

TRANSGENOMIC, INC.

 

	By:	 	 
	 	Name:	 
	 	Title:Exhibit 4.3

 

NEITHER THIS SECURITY NOR THE SECURITIES
FOR WHICH THIS SECURITY ARE EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION
OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND APPLICABLE STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (I) AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL
TO THE TRANSFEROR (IF REQUESTED BY THE COMPANY) TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY,
OR (II) RULE 144 PROMULGATED UNDER THE SECURITIES ACT. NOTWITHSTANDING THE FOREGOING, THIS SECURITY AND THE SECURITIES ISSUABLE
UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

TRANSGENOMIC, INC.

 

WARRANT TO PURCHASE COMMON STOCK

 

Warrant No.: _______

 

Date of Issuance: January 8, 2016 (“Issuance
Date”)

 

Transgenomic, Inc.,
a Delaware corporation (the “Company”), hereby certifies that, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, ____________, the registered
holder hereof or its permitted assigns (the “Holder”), is entitled, subject to the terms set forth below, to
purchase from the Company, at the Exercise Price (as defined below) then in effect, upon exercise of this Warrant to Purchase Common
Stock (including any Warrant(s) to Purchase Common Stock issued in exchange, transfer or replacement hereof, this “Warrant”),
at any time or times on or after the Issuance Date but not after 11:59 p.m., New York time, on the Expiration Date (as defined
below), One Million One Hundred Sixty-One Thousand Nine Hundred Seventy-Two (1,161,972) (subject to adjustment as provided herein)
fully paid and non-assessable shares of Common Stock (as defined below) (the “Warrant Shares”); provided
that no Warrant Shares shall be issuable prior to the date of Issuance Approval (as defined below). Except as otherwise defined
herein, capitalized terms used in this Warrant shall have the meanings set forth in Section 17 hereof or, if not set forth therein,
such terms shall have the meanings set forth in the Securities Purchase Agreement, dated as of January 6, 2016, by and among the
Company and the Purchasers identified therein (the “Securities Purchase Agreement”). This Warrant is one of
a series of similar warrants issued pursuant to and in connection with the Securities Purchase Agreement and amends and restates
in full that certain Warrant to Purchase Common Stock, Warrant No. 2015-1, dated as of July 7, 2015, issued to Crede CG III, Ltd.

 

     

     

    

 

1.            EXERCISE
OF WARRANT.

 

(a)          Mechanics
of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in Section
1(g)), this Warrant may be exercised by the Holder on any day on or after the Issuance Date and until the Expiration Date in whole
or in part, by delivery (whether via facsimile or otherwise) of a written notice, in the form attached hereto as Exhibit
A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant. Within one (1) Trading
Day following an exercise of this Warrant as aforesaid, the Holder shall deliver payment to the Company of an amount equal to the
Exercise Price in effect on the date of such exercise multiplied by the number of Warrant Shares as to which this Warrant was so
exercised (in respect of such specific exercise, the “Aggregate Exercise Price”) in cash or via wire transfer
of immediately available funds if the Holder did not notify the Company in such Exercise Notice that such exercise was made pursuant
to a Cashless Exercise (as defined in Section 1(d)). The Holder shall not be required to deliver the original of this Warrant in
order to effect an exercise hereunder. Execution and delivery of an Exercise Notice with respect to less than all of the Warrant
Shares shall have the same effect as cancellation of the original of this Warrant and issuance of a new Warrant evidencing the
right to purchase the remaining number of Warrant Shares. Execution and delivery of an Exercise Notice for all of the then-remaining
Warrant Shares shall have the same effect as cancellation of the original of this Warrant after delivery of the Warrant Shares
in accordance with the terms hereof. On or before the first (1st) Trading Day following the later of (i) the date on which the
Company has received an Exercise Notice or (ii) the date on which the Company receives the Aggregate Exercise Price, the Company
shall transmit (whether via facsimile or otherwise) a written acknowledgment of confirmation of receipt of such Exercise Notice,
in the form attached hereto as Exhibit C, to the Holder and the Company’s transfer agent (the “Transfer
Agent”). On or before the third (3rd) Trading Day following the later of (x) the date on which the Company has received
such Exercise Notice or (y) the date on which the Company receives the Aggregate Exercise Price (such date is referred to herein
as the “Delivery Date”), the Company shall (X) provided that (I) the Transfer Agent is participating in The
Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program and (II) either a Registration Statement
(as defined in the Registration Rights Agreement) for the resale by the Holder of the applicable Warrant Shares to be issued pursuant
to such Exercise Notice is effective or such Warrant Shares are otherwise eligible for resale pursuant to Rule 144, credit such
aggregate number of shares of Common Stock to which the Holder is entitled pursuant to such exercise to the Holder’s or its
designee’s balance account with DTC through its Deposit/ Withdrawal at Custodian system, or (Y) if either of the immediately
preceding clauses (I) or (II) are not satisfied, issue and deliver to the Holder or, at the Holder’s instruction pursuant
to the Exercise Notice, the Holder’s agent or designee, in each case, sent by reputable overnight courier to the address
as specified in the applicable Exercise Notice, a certificate, registered in the Company’s share register in the name of
the Holder or its designee (as indicated in the applicable Exercise Notice), for the number of shares of Common Stock to which
the Holder is entitled pursuant to such exercise. Upon delivery of an Exercise Notice and the Aggregate Exercise Price, the Holder
shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this
Warrant has been exercised, irrespective of the date such Warrant Shares are credited to the Holder’s DTC account or the
date of delivery of the certificates evidencing such Warrant Shares (as the case may be). If this Warrant is submitted in connection
with any exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise
is greater than the number of Warrant Shares being acquired upon an exercise, then, at the written request of the Holder and upon
surrender of this Warrant by the Holder at the principal office of the Company, the Company shall as soon as practicable and in
no event later than three (3) Business Days after any exercise and at its own expense, issue and deliver to the Holder (or its
designee) a new Warrant (in accordance with Section 8(d)) representing the right to purchase the number of Warrant Shares purchasable
immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is
exercised. No fractional shares of Common Stock are to be issued upon the exercise of this Warrant, but rather the number of shares
of Common Stock to be issued shall be rounded down to the nearest whole number. The Company shall pay any and all taxes and fees
which may be payable with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant.

 

    	 	2	 

     

    

 

(b)          Exercise
Price. For purposes of this Warrant, “Exercise Price” means $1.21, subject to adjustment as provided herein.

 

(c)          Company’s
Failure to Timely Deliver Securities. If the Company shall fail, for any reason within its reasonable control, to issue (or
cause to be issued) to the Holder on or before the applicable Delivery Date, a certificate for the number of shares of Common Stock
to which the Holder is entitled and register such shares of Common Stock on the Company’s share register or to credit the
Holder’s balance account with DTC for such number of shares of Common Stock to which the Holder is entitled upon the Holder’s
exercise of this Warrant (as the case may be), then, in addition to all other remedies available to the Holder, the Company shall
pay in cash to the Holder on each day after such third (3rd) Trading Day that the issuance of such shares of Common Stock is not
timely effected an amount equal to 2% of the product of (A) the aggregate number of shares of Common Stock not issued to the Holder
on a timely basis and to which the Holder is entitled and (B) the Closing Sale Price of the Common Stock on the Trading Day immediately
preceding the last possible date on which the Company could have issued such shares of Common Stock to the Holder without violating
Section 1(a). In addition to the foregoing, if the Company shall fail to issue and deliver (or cause to be issued and delivered)
a certificate to the Holder and register such shares of Common Stock on the Company’s share register or to credit the Holder’s
balance account with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise
or exchange hereunder (as the case may be) on or prior to the applicable Delivery Date, and if on or after such Delivery Date,
the Holder (or any other Person in respect, or on behalf, of the Holder) purchases (in an open market transaction or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by the Holder of all or any portion of the number of shares of Common
Stock, or a sale of a number of shares of Common Stock equal to all or any portion of the number of shares of Common Stock, that
the Holder so anticipated receiving from the Company upon such exercise or exchange then, in addition to all other remedies available
to the Holder, the Company shall, in lieu of payments under the previous sentence, within three (3) Business Days after the Holder’s
request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total
purchase price (including brokerage commissions and reasonable out-of-pocket expenses, if any) for the shares of Common Stock so
purchased (including, without limitation, by any other Person in respect, or on behalf, of the Holder) (the “Buy-In Price”),
at which point the Company’s obligation to so issue and deliver such certificate or credit the Holder’s balance account
with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise or exchange
hereunder (as the case may be) (and to issue such shares of Common Stock) shall terminate, or (ii) promptly honor its obligation
to so issue and deliver to the Holder a certificate or certificates representing such shares of Common Stock or credit the Holder’s
balance account with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise
or exchange hereunder (as the case may be) and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price
over the product of (A) such number of shares of Common Stock multiplied by (B) the lowest Closing Sale Price of the Common Stock
on any Trading Day during the period commencing on the date of the applicable Exercise Notice or Exchange Notice (as defined below),
as the case may be, and ending on the date of such issuance and payment under this clause (ii).

 

    	 	3	 

     

    

 

(d)          Cashless
Exercise. Notwithstanding anything contained herein to the contrary (other than Section 1(g) below), if at the time of an exercise
hereof an Equity Conditions Failure shall then exist, then the Holder may, in its sole discretion, exercise this Warrant in whole
or in part and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment
of the Aggregate Exercise Price, elect instead to make a cashless exercise (each a “Cashless Exercise”) under
this paragraph (d). A Cashless Exercise under this paragraph (d) may be made, at the election of the Holder from time to time and
irrespective of any other election to make a Cashless Exercise, so that upon such exercise the Holder shall receive the “Net
Number” of shares of Common Stock determined according to the following formula:

 

Net Number = (A x B) - (A x C)

B

 

For purposes of the foregoing formula:

 

A = the total number of shares of Common
Stock with respect to which this Warrant is then being exercised.

 

B = as applicable: (i) the Closing Sale
Price of the Common Stock on the Trading Day immediately preceding the date of the applicable Exercise Notice if such Exercise
Notice is (1) both executed and delivered pursuant to Section 1(a) hereof on a day that is not a Trading Day or (2) both executed
and delivered pursuant to Section 1(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as
defined in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) the Bid Price
of the Common Stock as of the time of the Holder’s execution of the applicable Exercise Notice if such Exercise Notice is
executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter pursuant
to Section 1(a) hereof, or (iii) the Closing Sale Price of the Common Stock on the date of the applicable Exercise Notice if the
date of such Exercise Notice is a Trading Day and such Exercise Notice is both executed and delivered pursuant to Section 1(a)
hereof after the close of “regular trading hours” on such Trading Day.

 

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

 

Notwithstanding anything to the contrary
contained herein, exercise of this Warrant on a cashless basis may also be made from time to time at the election of the Holder
(and irrespective of any election to make a Cashless Exercise under this paragraph (d)), pursuant to the exchange provisions of
Section 5 of this Warrant.

 

    	 	4	 

     

    

 

(e)          Disputes.
In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the number of Warrant Shares
to be issued pursuant to the terms hereof (including, without limitation, the Net Number), the Company shall promptly issue to
the Holder the number of Warrant Shares that are not disputed, provided that following such issuance to the Holder such dispute
shall be resolved in accordance with Section 14.

 

(f)          Insufficient
Authorized Shares. The Company shall at all times keep reserved for issuance under this Warrant a number of shares of Common
Stock as shall be necessary to satisfy the Company’s obligation to issue shares of Common Stock hereunder (without regard
to any limitation otherwise contained herein with respect to the number of shares of Common Stock that may be acquirable upon exercise
or exchange of this Warrant). If, notwithstanding the foregoing, and not in limitation thereof, at any time while this Warrant
remains outstanding the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy
its obligation to reserve for issuance upon exercise or exchange of this Warrant at least a number of shares of Common Stock equal
to the number of shares of Common Stock as shall from time to time be necessary to effect the exercise or exchange of this Warrant
(the “Required Reserve Amount”) (an “Authorized Share Failure”), then the Company shall immediately
take all action necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the
Company to reserve the Required Reserve Amount. Without limiting the generality of the foregoing sentence, as soon as practicable
after the date of the occurrence of an Authorized Share Failure, but in no event later than ninety (90) days after the occurrence
of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval of an increase in the number
of authorized shares of Common Stock. In connection with such meeting, the Company shall provide each stockholder with a proxy
statement and shall use its reasonable efforts to solicit its stockholders’ approval of such increase in authorized shares
of Common Stock.

 

    	 	5	 

     

    

 

(g)          Restrictions
on Exercise. Notwithstanding anything to the contrary contained herein, the number of Warrant Shares that may be acquired by
the Holder upon any exercise of this Warrant (or otherwise in respect hereof) shall be limited to the extent necessary to ensure
that, following such exercise (or other issuance), the total number of shares of Common Stock then beneficially owned by the Holder
and its Affiliates and any other Persons whose beneficial ownership of Common Stock would be aggregated with the Holder’s
for purposes of Section 13(d) of the Exchange Act, does not exceed 9.99% of the total number of then issued and outstanding shares
of Common Stock (including for such purpose the shares of Common Stock issuable upon such exercise). For purposes of the foregoing
sentence, the aggregate number of shares of Common Stock beneficially owned by the Holder and its Affiliates shall include the
number of shares of Common Stock issuable upon exercise of this Warrant with respect to which the determination of such sentence
is being made, but shall exclude the number of shares of Common Stock which are issuable upon (i) exercise of the remaining, unexercised
portion of this Warrant beneficially owned by the Holder and its Affiliates, and (ii) exercise or conversion of the unexercised
or unconverted portion of any other securities of the Company beneficially owned by the Holder and its Affiliates (including, without
limitation, any convertible notes, convertible stock or warrants) that are subject to a limitation on conversion or exercise analogous
to the limitation contained herein. Except as set forth in the preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by
the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the
Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent
that the limitation contained in this paragraph applies, the determination of whether this Warrant is exercisable (in relation
to other securities owned by the Holder) and of which portion of this Warrant is exercisable shall be in the sole discretion of
the Holder, and the submission of an Exercise Notice shall be deemed to be the Holder’s determination of whether this Warrant
is exercisable (in relation to other securities owned by the Holder) and of which portion of this Warrant is exercisable, in each
case subject to such aggregate percentage limitation, and the Company shall have no obligation to verify or confirm the accuracy
of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance
with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this paragraph, in
determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common
Stock as reflected in (x) the Company’s most recent Form 10-Q or Form 10-K, as the case may be, (y) a more recent public
announcement by the Company, or (z) any other notice by the Company or its transfer agent setting forth the number of shares of
Common Stock outstanding. Upon the written request of the Holder, the Company shall within three (3) Trading Days confirm orally
and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares
of Common Stock shall be determined after giving effect to any actual conversion or exercise of securities of the Company, including
this Warrant, by the Holder and its Affiliates since the date as of which such number of outstanding shares of Common Stock was
last publicly reported or confirmed to the Holder. This provision shall not restrict the number of shares of Common Stock which
a Holder may receive or beneficially own in order to determine the amount of securities or other consideration that such Holder
may receive in the event of a Fundamental Transaction as contemplated by this Warrant. This provision shall automatically expire
61 calendar days prior to the Expiration Date. The Company shall provide the Holder with not less than ten (10) calendar days’
prior notice of such impending expiration of this beneficial ownership blocker.

 

(h)          Cash
Exercise. Provided that no Equity Conditions Failure then exists, if the trading price on the Principal Market at the time
of an exercise of this Warrant is greater than the then applicable Exercise Price then in effect, then in respect of such particular
exercise the Holder may only exercise this Warrant for a cash exercise price (and not by means of a Cashless Exercise under Section
1(d) above or on a cashless basis under Section 5 below).

 

2.            ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and number of Warrant
Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 2.

 

    	 	6	 

     

    

 

(a)          Stock
Dividends and Splits. If the Company, at any time on or after the Issuance Date, (i) pays a stock dividend on one or more classes
of its then outstanding shares of Common Stock or otherwise makes a distribution on any class of capital stock that is payable
in shares of Common Stock, (ii) subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes
of its then outstanding shares of Common Stock into a larger number of shares, or (iii) combines (by combination, reverse stock
split or otherwise) one or more classes of its then outstanding shares of Common Stock into a smaller number of shares, then in
each such case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common
Stock outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding
immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after
the record date for the determination of stockholders entitled to receive such dividend or distribution, and any adjustment pursuant
to clause (ii) or (iii) of this paragraph shall become effective immediately after the effective date of such subdivision or combination.
If any event requiring an adjustment under this paragraph occurs during the period that an Exercise Price is calculated hereunder,
then the calculation of such Exercise Price shall be adjusted appropriately to reflect such event.

 

(b)          Number
of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to Section 2(a), the number of Warrant
Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such
adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same as the aggregate
Exercise Price in effect immediately prior to such adjustment (without regard to any limitations on exercise contained herein).

 

(c)          Calculations.
All calculations under this Section 2 shall be made by rounding to the nearest 1/10000th of a cent and the nearest 1/100th of a
share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held
by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock.

 

3.            [Intentionally
Omitted].

 

4.            FUNDAMENTAL
TRANSACTIONS. If the Company, directly or indirectly, in one or more related transactions, (a) consolidates or merges with
or into (whether or not the Company is the surviving corporation) any other Person, unless the stockholders of the Company immediately
prior to such consolidation or merger continue to hold more than 50% of the outstanding shares of Voting Stock after such consolidation
or merger, (b) sells, leases, licenses, assigns, transfers, conveys or otherwise disposes of all or substantially all of its properties
or assets to any other Person, (c) allows any other Person to make a purchase, tender or exchange offer that is accepted by the
holders of more than 50% of the outstanding shares of Voting Stock of the Company (not including any shares of Voting Stock of
the Company held by the Person or Persons making or party to, or associated or affiliated with the Persons making or party to,
such purchase, tender or exchange offer), or (d) consummates a stock or share purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with any other Person whereby
such other Person acquires more than 50% of the outstanding shares of Voting Stock of the Company (not including any shares of
Voting Stock of the Company held by the other Person or other Persons making or party to, or associated or affiliated with the
other Persons making or party to, such stock or share purchase agreement or other business combination) (in any such case, a “Fundamental
Transaction”), then this Warrant will become the right thereafter to receive, upon exercise, the same amount and kind
of securities, cash or property as the Holder would have been entitled to receive upon the occurrence of such Fundamental Transaction
if it had been, immediately prior to such Fundamental Transaction, the holder of the number of Warrant Shares then issuable upon
exercise in full of this Warrant (the “Alternate Consideration”) in lieu of Common Stock. The Aggregate Exercise
Price for this Warrant will not be affected by any such Fundamental Transaction, but the Company shall apportion such Aggregate
Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components
of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received
in a Fundamental Transaction, then the Holder, to the extent practicable, shall be given the same choice as to the Alternate Consideration
it receives upon any exercise of this Warrant following such Fundamental Transaction. In addition, at the request of the Holder,
upon surrender of this Warrant, any successor to the Company or surviving entity in such Fundamental Transaction shall issue to
the Holder a new warrant consistent with the foregoing provisions and evidencing the Holder’s right to purchase the Alternate
Consideration for the Aggregate Exercise Price upon exercise thereof. Each such new warrant (or any such replacement security)
will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.

 

    	 	7	 

     

    

 

5.            EXCHANGE
RIGHTS. In addition to the rights of the Holder under Section 1 hereof, this Warrant shall be exchangeable by the Holder on
a cashless basis as further set forth below (and subject to the limitations set forth in Section 1(g) hereof).

 

(a)          Exchange
Right. Subject to Section 1(g), the Holder shall be entitled at any time and from time to time from and after the Issuance
Date and prior to the Expiration Date, by written notice to the Company in the form of Exhibit B attached hereto
(an “Exchange Notice”) to exchange (an “Exchange”) all or any portion of this Warrant for
fully paid and non-assessable shares of Common Stock; provided, however, that the Company shall have the option of paying cash
in lieu of shares of Common Stock with respect to all or a portion of any Exchange Amount (as defined herein) for which an Exchange
is requested, all as further set forth in this Section 5.

 

(b)          Exchange
Number. The number of shares of Common Stock issuable in respect of an Exchange requested hereunder shall be determined by
dividing (i) the Exchange Amount (as defined below) in respect of such Exchange by (ii) the Exchange Price (as defined below) in
respect of such Exchange (such number of shares of Common Stock so issuable being the “Exchange Number”); provided,
however, that the Company shall not issue any Warrant Shares prior to receipt of Issuance Approval, and, in the absence of Issuance
Approval with respect to any Exchange Notice delivered to the Company after April 7, 2016, the Company shall be required to pay
the Exchange Amount to the Holder in cash in accordance with the provisions hereof. For avoidance of doubt, the Company shall not
be required to pay the Exchange Amount to the Holder in cash in accordance with the provisions hereof, if it does not obtain Issuance
Approval with respect to any Exchange Notice delivered to the Company on or prior to April 7, 2016.

 

(c)          Definitions.

 

(i)          “Exchange
Amount” means the Black Scholes Exchange Value of the portion of this Warrant being exchanged pursuant to Section 5(a),
determined as of the applicable Exchange Date (as defined below).

 

    	 	8	 

     

    

 

(ii)         “Exchange
Price” means the Closing Bid Price as of two (2) Trading Days prior to the Exchange Date; provided that for purposes
of calculating the Exchange Number, the Exchange Price in each Exchange shall be no less than $0.50 (as adjusted for any and all
stock dividends, stock splits, stock combinations or other similar transactions), and, if the Closing Bid Price as of the two (2)
Trading Days prior to the Exchange Date is less than $0.50 (as adjusted for any and all stock dividends, stock splits, stock combinations
or other similar transactions), the Company shall, in addition to issuing shares of Common Stock to the Holder in such Exchange
at an Exchange Price equal to $0.50 (as adjusted for any and all stock dividends, stock splits, stock combinations or other similar
transactions), be required to pay to the Holder in accordance with the provisions hereof an amount in cash equal to the product
obtained by multiplying (A) $0.50 (as adjusted for any and all stock dividends, stock splits, stock combinations or other similar
transactions) minus the Closing Bid Price as of two (2) Trading Days prior to the Exchange Date, by (B) the aggregate number of
shares of Common Stock issued to the Holder by the Company in such Exchange at an Exchange Price equal to $0.50 (as adjusted for
any and all stock dividends, stock splits, stock combinations or other similar transactions).

 

(d)          Mechanics
of Exchange.

 

(i)          Optional
Exchange. To exchange any Exchange Amount on any date (an “Exchange Date”), the Holder shall transmit by
facsimile (or otherwise deliver), for receipt on such date, a copy of an executed Exchange Notice. The Holder shall not be required
to deliver the original of this Warrant in order to effect an exchange hereunder. Execution and delivery of an Exchange Notice
with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original of this Warrant
and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares. Execution and delivery of
an Exchange Notice for all of the then-remaining Warrant Shares shall have the same effect as cancellation of the original of this
Warrant after delivery of the Warrant Shares in accordance with the terms hereof.

 

(ii)         Exchange
for Shares of Common Stock. Within one (1) Trading Day after the date on which the Company has received an Exchange Notice,
and in the event that the Company has not elected or is not required to pay the entire Exchange Amount in cash in accordance with
the terms hereof, the Company shall transmit (whether via facsimile or otherwise) an acknowledgment of confirmation of receipt
of such Exchange Notice, in the form attached hereto as Exhibit C, to the Holder and the Transfer Agent. On or before
the third (3rd) Trading Day following the date on which the Company has received such Exchange Notice, the Exchange Number of shares
of Common Stock (or such lesser number of shares of Common Stock if the Company has either elected or is required to pay a portion
of the Exchange Amount in cash) shall be issued to the Holder, or at the Holder’s instruction, to the Holder’s agent
or designee, as if such shares of Common Stock were issuable upon an exercise under Section 1 hereof.

 

    	 	9	 

     

    

 

(iii)        Exchange
for Cash. Within one (1) Trading Day after the date on which the Company has received an Exchange Notice, and in the event
that the Company has elected or is required to pay the entire or any portion of the Exchange Amount in cash in accordance with
the terms hereof, the Company shall transmit (whether via facsimile or otherwise) an acknowledgment of confirmation of receipt
of such Exchange Notice, in the form attached hereto as Exhibit D, to the Holder. On or before the third (3rd) Trading
Day following the date on which the Company has received such Exchange Notice, the Company shall pay, as applicable, all or such
portion of the Exchange Amount in cash by wire transfer of immediately available funds to an account designated by the Holder on
the Exchange Notice.

 

(iv)        Disputes.
Dispute as to the determination of the Exchange Amount, the Exchange Price or the arithmetic calculation of the number of Warrant
Shares to be issued pursuant to the terms hereof (or cash in lieu thereof), and shares subject to such dispute, shall be handled
in the same manner as disputes under Section 1(e) hereof.

 

6.            NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its certificate of incorporation or bylaws (each
as in effect from time to time) or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement,
dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms of this Warrant, and will at all times in good faith carry out all the provisions of this Warrant and take all
action as may be required to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (a)
shall not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise
Price then in effect, (b) shall take all such actions as may be necessary or appropriate in order that the Company may validly
and legally issue fully paid and non-assessable shares of Common Stock upon the exercise of this Warrant (or such other securities,
cash, assets or other property then deliverable upon exercise of this Warrant), and (c) shall, so long as this Warrant is outstanding,
take all action necessary to reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the
purpose of effecting the exercise of this Warrant, the maximum number of shares of Common Stock as shall from time to time be necessary
to effect the exercise of this Warrant (without regard to any limitations on exercise).

 

7.            WARRANT
HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in its capacity as a
holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company
for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in its capacity as
the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to
any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance
or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the
Holder of the Warrant Shares which it is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained
in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this
Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors
of the Company.

 

    	 	10	 

     

    

 

8.            REISSUANCE
OF WARRANTS.

 

(a)          Transfer
of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company
will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 8(d)), registered as the
Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less
than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section
8(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred. Prior to transferring
this Warrant, the Holder shall inform the transferee of the total number of Warrant Shares then underlying this Warrant.

 

(b)          Lost,
Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant (as to which a written certification and the indemnification contemplated below shall
suffice as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to
the Company in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the
Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 8(d)) representing the right to purchase
the Warrant Shares then underlying this Warrant.

 

(c)          Exchangeable
for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the
Company, for a new Warrant or Warrants (in accordance with Section 8(d)) representing in the aggregate the right to purchase the
number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion
of such Warrant Shares as is designated by the Holder at the time of such surrender; provided, however, no warrants for fractional
shares of Common Stock shall be given.

 

(d)          Issuance
of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant
(i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to
purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 8(a)
or Section 8(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying
the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this
Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date,
and (iv) shall have the same rights and conditions as this Warrant.

 

9.            NOTICES.
Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance
with Section 6.3 of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of all actions
taken pursuant to this Warrant, including in reasonable detail a description of such action and the reason therefor. Without limiting
the generality of the foregoing, the Company will give written notice to the Holder as soon as practicable upon each adjustment
of the Exercise Price and the number of Warrant Shares, setting forth in reasonable detail, and certifying, the calculation of
such adjustment(s). If the Company (a) declares a dividend or any other distribution of cash, securities or other property in respect
of its Common Stock (other than a dividend payable solely in shares of Common Stock) or (b) authorizes the voluntary dissolution,
liquidation or winding up of the affairs of the Company, then the Company shall deliver to the Holder a notice describing the material
terms and conditions of such dividend, distribution or transaction. Notwithstanding anything to the contrary in this Section 9,
the failure to deliver any notice under this Section 9 or any defect therein shall not affect the validity of the corporate action
required to be described in such notice. Until the exercise of this Warrant or any portion of this Warrant, the Holder shall not
have nor exercise any rights by virtue of ownership of a Warrant as a stockholder of the Company (including without limitation
the right to notification of stockholder meetings or the right to receive any notice or other communication concerning the business
and affairs of the Company other than as provided in this Section 9).

 

    	 	11	 

     

    

 

10.           AMENDMENT
AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant (other than Section 1(g)) may be amended and
the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the
Company has obtained the written consent of the Holder. No waiver shall be effective unless it is in writing and signed by an authorized
representative of the waiving party.

 

11.           SEVERABILITY.
If any provision of this Warrant is held to be invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt
to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate
such substitute provision in this Warrant.

 

12.           GOVERNING
LAW. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed
by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of
conflicts of law thereof. Each party agrees that all Proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Warrant (whether brought against a party hereto or its respective Affiliates, employees or agents)
shall be commenced exclusively in the New York Courts. Each party hereto hereby irrevocably submits to the exclusive jurisdiction
of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein (including with respect to the enforcement of this Warrant), and hereby irrevocably waives, and agrees
not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any such New York Court, or
that such Proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal
service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Warrant
and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT
OF OR RELATING TO THIS WARRANT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

13.           HEADINGS.
The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect
any of the provisions hereof. Any references to paragraphs, subparagraphs, sections or subsections are to those parts of this Warrant,
unless the context clearly indicates to the contrary. The language used in this Warrant will be deemed to be the language chosen
by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. This Warrant
shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring
any party by virtue of the authorship of any provisions of this Warrant.

 

    	 	12	 

     

    

 

14.            DISPUTE
RESOLUTION. In the case of a dispute as to the determination of the Exercise Price, the Exchange Amount, the Exchange Price,
the Closing Sale Price, the Closing Bid Price, the Bid Price or the fair market value or the arithmetic calculation of the Warrant
Shares (as the case may be), the Company or the Holder (as the case may be) may submit the disputed determinations or arithmetic
calculations (as the case may be) via facsimile (a) within two (2) Business Days after receipt of the applicable notice giving
rise to such dispute to the Company or the Holder (as the case may be) or (b) if no notice gave rise to such dispute, at any time
after the Holder or the Company (as the case may be) learned of the circumstances giving rise to such dispute. If the Holder and
the Company are unable to agree upon such determination or calculation (as the case may be) of the Exercise Price, the Exchange
Amount, the Exchange Price, the Closing Sale Price, the Closing Bid Price, the Bid Price or the fair market value or the number
of Warrant Shares (as the case may be) within three (3) Business Days of such disputed determination or arithmetic calculation
being submitted to the Company or the Holder (as the case may be), then the Company shall, within two (2) Business Days submit
via facsimile or otherwise (i) the disputed arithmetic calculation of the Warrant Shares, the disputed determination of the Exercise
Price, the Exchange Amount, the Exchange Price, the Closing Sale Price, the Closing Bid Price, the Bid Price or the fair market
value (as the case may be) to an independent, reputable investment bank of nationally recognized standing selected by the Holder
and reasonably acceptable to the Company or (ii) if acceptable to the Holder, the disputed arithmetic calculation of the Warrant
Shares to the Company’s independent, outside accountant. The Company shall use its commercially reasonable efforts to cause
at its expense the investment bank or the accountant (as the case may be) to perform the determinations or calculations (as the
case may be) and notify the Company and the Holder of the results no later than ten (10) Business Days from the time it receives
such disputed determinations or calculations (as the case may be). Such investment bank’s or accountant’s determination
or calculation (as the case may be) shall be binding upon all parties absent demonstrable error. The party whose determination
or calculation is furthest from that determined or calculated by the investment bank or accountant shall pay the costs of such
determination or calculation.

 

15.            REMEDIES,
CHARACTERIZATION, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative
and in addition to all other remedies available under this Warrant and the other Transaction Documents, at law or in equity (including
a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue
actual and consequential damages for any failure by the Company to comply with the terms of this Warrant. The Company covenants
to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts
set forth or provided for herein with respect to payments, exercises and the like (and the computation thereof) shall be the amounts
to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company
(or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable
harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the
event of any such breach or threatened breach, the holder of this Warrant shall be entitled, in addition to all other available
remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other
security being required. The Company shall provide all information and documentation to the Holder that is reasonably requested
by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions of this Warrant (including,
without limitation, compliance with Section 2 hereof). The issuance of shares and certificates for shares as contemplated hereby
upon the exercise of this Warrant shall be made without charge to the Holder or such shares for any issuance or stamp tax or other
costs in respect thereof, provided that the Company shall not be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of any certificate in a name other than the Holder or its agent on its behalf.

 

    	 	13	 

     

    

 

16.          TRANSFER.
This Warrant may be offered for sale, sold, transferred or assigned without the consent of the Company.

  

17.          CERTAIN
DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:

 

(a)          “Bid
Price” means, for any security as of the particular time of determination, the bid price for such security on the Principal
Market as reported by Bloomberg as of such time of determination, or, if the Principal Market is not the principal securities exchange
or trading market for such security, the bid price of such security on the principal securities exchange or trading market where
such security is listed or traded as reported by Bloomberg as of such time of determination, or if the foregoing does not apply,
the bid price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by
Bloomberg as of such time of determination, or, if no bid price is reported for such security by Bloomberg as of such time of determination,
the average of the bid prices of all of the market makers for such security as reported in the “pink sheets” by OTC
Markets Group Inc. (formerly Pink Sheets LLC) (the “Pink Sheets”) as of such time of determination. If the Bid
Price cannot be calculated for a security as of the particular time of determination on any of the foregoing bases, the Bid Price
of such security as of such time of determination shall be the fair market value as mutually determined by the Company and the
Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall
be resolved in accordance with the procedures in Section 14. All such determinations shall be appropriately adjusted for any stock
dividend, stock split, stock combination or other similar transaction during such period.

 

(b)          “Black
Scholes Exchange Value” means the value of an option for the number of shares equal to the portion of this Warrant being
exchanged at the applicable Exchange Date as set forth in the applicable Exchange Notice as such value is determined calculated
using the Black Scholes Option Pricing Model obtained from the “OV” function on Bloomberg utilizing (i) an underlying
price per share equal to the Closing Sale Price of the Common Stock as of the Issuance Date (adjusted upward to the same extent
that the Exercise Price hereunder has been adjusted upward pursuant to Section 2(a) hereof), (ii) a risk-free interest rate corresponding
to the U.S. Treasury rate for a period equal to the remaining term of this Warrant as of such Exchange Date, (iii) a strike price
equal to the Exercise Price in effect at the time of the applicable Exchange, (iv) an expected volatility equal to 135%, and (v)
a deemed remaining term of this Warrant of five (5) years (regardless of the actual remaining term of this Warrant).

 

    	 	14	 

     

    

 

(c)          “Bloomberg”
means Bloomberg, L.P.

 

(d)          “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed.

 

(e)          “Closing
Bid Price” and “Closing Sale Price” means, for any security as of any date, the last closing bid price
and the last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the
Principal Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade
price (as the case may be) then the last bid price or last trade price, respectively, of such security prior to 4:00:00 p.m., New
York time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for
such security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange
or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last
closing bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin
board for such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for
such security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of all of the market makers for such
security as reported in the Pink Sheets. If the Closing Bid Price or the Closing Sale Price cannot be calculated for a security
on a particular date on any of the foregoing bases, the Closing Bid Price or the Closing Sale Price (as the case may be) of such
security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the
Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with
the procedures in Section 14. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock
combination or other similar transaction during such period.

 

(f)          “Common
Stock” means (i) the Company’s shares of common stock, $0.01 par value per share, and (ii) any capital stock into
which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.

 

(g)          “Equity
Conditions” means: (i) the Company shall be in compliance in all material respects with all of its obligations under
all of the Transaction Documents, (ii) each of a Registration Statement and the Prospectus contained therein (each as defined in
the Registration Rights Agreement) shall then be effective and fully available for use with respect to the resale of all of the
Warrant Shares issued pursuant to a cash exercise hereof, (iii) all Underlying Common Shares and Warrant Shares (including any
Warrant Shares to be received upon exercise or exchange of this Warrant and including any Warrant Shares to be issued in a cash
exercise) shall be then, or upon such issuance shall be (as the case may be), freely tradable by the Holder without restriction
of any kind or nature (including, without limitation, under applicable securities laws) (and the Company shall have no knowledge
of any fact which would reasonably be expected to negate the foregoing in the foreseeable future) other than restrictions that
may result from the Holder being an “affiliate” of the Company as defined in Rule 144 promulgated under the Securities
Act, and (iv) no limitation shall be applicable with respect to the issuance of any Warrant Shares for cash hereunder (other than
under Section 1(g)).

 

    	 	15	 

     

    

 

(h)          “Equity
Conditions Failure” means that on any applicable date of determination, any of the Equity Conditions are not then satisfied.

 

(i)          “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

(j)          “Expiration
Date” means the date that is the fifth (5th) anniversary of the Issuance Date or, if such date falls on a
day other than a Business Day or on which trading does not take place on the Principal Market (a “Holiday”),
the next date that is not a Holiday.

 

(k)          “Issuance
Approval” means either (1) the Company has previously obtained stockholder approval to issue the Warrant Shares, or (2)
the issuance of the Warrant Shares has been expressly permitted by the Principal Market.

 

(l)          “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity or a government or any department or agency thereof.

 

(m)          “Principal
Market” means the NASDAQ Capital Market.

 

(n)          “Registration
Rights Agreement” means the Registration Rights Agreement, dated as of January 8, 2016, by and between the Company and
the Purchaser.

 

(o)          “Trading
Day” means, as applicable, (i) with respect to all price determinations relating to the Common Stock, any day on which
the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading market for the Common
Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded, provided that “Trading
Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or market for less than 4.5
hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange or market (or
if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the
hour ending at 4:00:00 p.m., New York time) or (ii) with respect to all determinations other than price determinations relating
to the Common Stock, any day on which The Nasdaq Stock Market, LLC (or any successor thereto) is open for trading of securities.

 

(p)          “Voting
Stock” of a Person means capital stock of such Person of the class or classes pursuant to which the holders thereof have
the general voting power to elect, or the general power to appoint, at least a majority of the board of directors, managers or
trustees of such Person (irrespective of whether or not at the time capital stock of any other class or classes shall have or might
have voting power by reason of the happening of any contingency).

 

18.          REDEMPTION.

 

(a)          Redemption
of Warrant. This Warrant may be redeemed, at the option of the Company, at any time after it becomes exercisable and
prior to its expiration, at the office of the Company upon the notice referred to in Section 9 hereof, at the price equal to 130%
of the Exercise Price (the “Redemption Price”).

 

    	 	16	 

     

    

 

(b)          Date
Fixed for, and Notice of, Redemption. In the event the Company shall elect to redeem this Warrant, the Company shall
fix a date for the redemption. Notice of redemption shall be mailed by first class mail, postage prepaid, by the Company not less
than thirty (30) days prior to the date fixed for redemption to the Holder of this Warrant to be redeemed at its last address as
it shall appear on the registration books. Any notice mailed in the manner herein provided shall be conclusively presumed to have
been duly given whether or not the Holder received such notice.

 

(c)          Exercise
After Notice of Redemption. This Warrant may be exercised in accordance with this Warrant at any time after notice of redemption
shall have been given by the Company and prior to the time and date fixed for redemption. On and after the redemption date, the
Holder shall have no further rights except to receive, upon surrender of this Warrant, the Redemption Price.

 

[signature page follows]

 

    	 	17	 

     

    

 

IN WITNESS WHEREOF,
the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.

 

TRANSGENOMIC, INC.

 

	By:	 	 
	Name: Paul Kinnon	 
	Title: President and Chief Executive Officer	 

 

     

     

    

 

EXHIBIT A

EXERCISE NOTICE

 

TO BE EXECUTED BY THE HOLDER TO EXERCISE
THIS

WARRANT TO PURCHASE COMMON STOCK

 

TRANSGENOMIC, INC.

 

The undersigned Holder
hereby exercises the right to purchase           of the shares of Common Stock (“Warrant Shares”) of Transgenomic,
Inc., a Delaware corporation (the “Company”), evidenced by the Warrant to Purchase Common Stock Warrant No.
2015-1A with an Issuance Date of January 8, 2016 (the “Warrant”). Capitalized terms used herein and not otherwise
defined shall have the respective meanings set forth in the Warrant.

 

1.          Form
of Exercise Price. The Holder intends that payment of the Exercise Price shall be made as:

 

	 	 	 	a “Cash Exercise” with respect to ______________ 
	 	 	 	Warrant Shares; and/or
	 	 	 	 
	 	 	 	a “Cashless Exercise” with respect to ___________ 
	 	 	 	Warrant Shares.

 

In the event that the
Holder has elected a Cashless Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the Holder
hereby represents and warrants that (i) this Exercise Notice was executed by the Holder at    [a.m.][p.m.] on the date
set forth below and (ii) if applicable, the Bid Price as of such time of execution of this Exercise Notice was $          .

 

2.          Payment
of Exercise Price. In the event that the Holder has elected a Cash Exercise with respect to some or all of the Warrant Shares,
the Holder shall pay the Aggregate Exercise Price in the sum of $        to the Company in accordance
with the terms of the Warrant.

 

3.          Delivery
of Warrant Shares and Net Number of shares of Common Stock. The Company shall deliver to Holder, or its designee or agent as
specified below,          shares          of Common Stock in respect of the exercise contemplated hereby. Delivery shall be made to the Holder,
or for its benefit, to the following address:

 

	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

Date: ___________

 

Name of Holder

 

	By:  	 	 	 
	 	Name:	 
	 	Title:	 

 

	Account
	Number:  	 
	 	(if electronic book entry transfer)
	 	 
	Transaction Code
	Number:  	 
	 	(if electronic book entry transfer)
	 	 	 

 

     

     

    

 

EXHIBIT B

EXCHANGE NOTICE

 

TO BE EXECUTED BY THE HOLDER TO EXCHANGE
THIS

WARRANT TO PURCHASE COMMON STOCK

 

TRANSGENOMIC, INC.

 

The undersigned Holder
hereby exercises the right to exchange the Warrant to Purchase Common Stock No.           (the
“Warrant”) of Transgenomic, Inc., a Delaware corporation (the “Company”) as described. Capitalized
terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.

 

Date of Exchange: _________________

 

		1.	The total number of shares with respect to which this
Warrant is being exchanged:

 

		2.	Black Scholes Exchange Value (as defined in Section 17
of the Warrant) for an option to purchase          [SAME # AS FROM 1 ABOVE] shares of Common Stock: $      .

 

Resulting
Exchange Amount: $              [insert from item 2 above]

 

		3.	Exchange Price: Closing Bid Price of the Common
Stock as of two (2) Trading Days prior to the date of Exchange (as such Closing Bid Price is defined in Section 17 of the Warrant):
$             .

 

Resulting Exchange Number [Exchange
Amount/Exchange Price as set forth in 3 above]:                 shares of Common Stock

 

	Account for Wire
	Transfer (if applicable):	 

 

	Account for Share issuance (if applicable):
	 
	 	 
	 	 	 

 

	Date:  	 
	 	 
	 	 
	Name of Holder	 

 

	By:	 	 
	 	Name:	 
	 	Title:	 

 

     

     

    

 

EXHIBIT C

ACKNOWLEDGMENT

 

The Company hereby
acknowledges this [Exercise Notice][Exchange Notice] and hereby directs         to issue the
above indicated number of shares of Common Stock in accordance with the Transfer Agent Instructions dated           ,
20  , from the Company and acknowledged and agreed to by                            .

 

TRANSGENOMIC, INC.

 

	By:	 	 
	 	Name:	 
	 	Title:	 

 

     

     

    

 

EXHIBIT D

ACKNOWLEDGMENT

 

The Company hereby
acknowledges this Exchange Notice and agrees to pay the aggregate sum of $________________ to the Holder in lieu of [the entire
Exchange Amount][a portion of the Exchange Amount].

 

TRANSGENOMIC, INC.

 

	By:	 	 
	 	Name:	 
	 	Title:

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