Document:

Ex105TBIO-MColonneseSARAwardAgreement

EXHIBIT 10.5

TRANSGENOMIC, INC. 2006 EQUITY INCENTIVE PLAN 
STOCK APPRECIATION RIGHTS AGREEMENT 
THIS STOCK APPRECIATION RIGHTS AGREEMENT (this “Agreement”) is effective September 30, 2013 (the “Grant Date”) by and between Transgenomic, Inc., a Delaware corporation (the “Company”) and Mark Colonnese (“Grantee”).
WHEREAS, the Company sponsors and maintains the Transgenomic, Inc. 2006 Equity Incentive Plan, a copy of which is attached hereto as EXHIBIT A (the “Plan”); and
WHEREAS, Grantee, as an Eligible Person, has been selected to receive a grant of Stock Appreciation Rights under the Plan.
NOW, THEREFORE, the Company and Grantee hereby agree as follows:
Section 1. General. This Agreement and the Stock Appreciation Rights granted hereunder are subject in all respects to the terms and conditions of the Plan. Capitalized terms used in this Agreement without further definition shall have the same meanings given to such terms in the Plan. The award of Stock Appreciation Rights of the Company described herein (this “Award”) is conditioned on Grantee’s execution of the Award within ten (10) days after the Grant Date.
Section 1.    Grant of Stock Appreciation Rights. The Company hereby awards to Grantee, as of the Grant Date, Stock Appreciation Rights with the following terms:
	
		
	Grant Date
	September 30, 2013

	Vesting Commencement Date
	September 30, 2013

	Number of Shares measuring the value of the Award
	660,000 Shares (the “SAR Shares”)

	Exercise Price per SAR Share
	$0.36 per Share (the “Exercise Price”)

LEGAL_US_W # 76432878.1 

	
		
	Vesting Schedule
	224,400 of the SAR Shares shall vest on the one-year anniversary of the Vesting Commencement Date, with 18,150 of the SAR Shares vesting per month over the remaining 24 months, in each case provided that Grantee remains continuously employed with (or is providing continued service to) the Company through the applicable vesting date, inclusive; and provided further that if the Company terminates Grantee’s employment without Just Cause (as defined under that certain Employment Agreement, dated September 12, 2012, by and between the Company and Grantee, as amended (as may be amended or restated from time to time)) prior to the one-year anniversary of the Vesting Commencement Date, the SAR Shares shall be deemed to have vested on a monthly basis at a rate of 1/36th per month from the Vesting Commencement Date.
Notwithstanding the foregoing, Grantee’s SAR Shares will become 100% vested upon the earlier to occur of: (i) Grantee’s Termination of Service as a result of Grantee’s Disability, death or Retirement; provided that Grantee has continuously served as a director, employee or Advisor of the Company for the two-year period immediately preceding Grantee’s Termination of Service; and (ii) as of immediately prior to, and contingent upon, a Qualified Change in Control; provided that Grantee remains continuously employed with (or is providing continued service to) the Company through immediately prior to the effectiveness of such Qualified Change in Control.
For purposes of this Award, a “Qualified Change in Control” means a Change in Control whereby (i) the acquiring party (or parties) in such Change in Control offers cash, in whole or in part, to some or all of the Company’s stockholders as consideration for the shares of capital stock of the Company held thereby, and (ii) the Fair Market Value as of the last trading day immediately preceding the Change in Control or the aggregate per share price payable by the acquiring party in such Change in Control for the Common Stock is greater than the Exercise Price.
Any fraction of a share that becomes exercisable on any date will be rounded down to the next lowest whole number and any fraction of a share shall be added to the portion of the SAR Shares becoming exercisable on the following vesting date.

	Expiration Date
	September 30, 2023, subject to Section 6.

Section 2.    Adjustments to Number of SAR Shares and Exercise Price. No shares of Common Stock will be issued and no cash will be paid to Grantee before the Award vests in accordance with the “Vesting Schedule” noted in Section 2 and is exercised. The amount Grantee receives upon exercise will equal the product of:
		
	(a)
	the number of SAR Shares that Grantee designates for exercise, and

		
	(a)
	the excess of 100% of the Fair Market Value of one share of Common Stock on the date of exercise over the Exercise Price stated in Section 2.

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Section 3.    Form of Payments to Grantee. Except with respect to an Automatic Exercise (as defined below), the Company will make any payment to Grantee under the Award, as determined by the Board or the Committee following the exercise, in the form of cash, net of any applicable tax withholding obligations or shares of Common Stock, with cash paid in lieu of fractional shares of Common Stock, based on the Fair Market Value on the date of exercise. Any shares of Common Stock that Grantee receives will be free from vesting restrictions (but subject to such legends as the Company determines to be appropriate). Notwithstanding the foregoing, the Company will not issue certificates representing shares of Common Stock issuable upon the exercise of the Award to Grantee unless Grantee has made arrangements satisfactory to the Board or the Committee to satisfy any applicable tax withholding obligations. Grantee may satisfy minimum withholding requirements through the surrender of shares of Common Stock that are both subject to the Award and that have a Fair Market Value equal to the minimum statutory tax withholding associated with the shares of Common Stock giving rise to the taxable income. Grantee or the Successor of the Participant has no right or any privilege of a stockholder of the Company in respect of any shares issuable on the exercise of the award unless and until such shares have been recorded on the Company’s official stockholder records as having been issued and transferred.
Section 4.    Automatic Exercise. Notwithstanding anything herein to the contrary, this Award shall be deemed automatically exercised in full, without any further action on the part of Grantee or the Company, effective as of immediately prior to, and contingent upon, a Qualified Change in Control; provided that Grantee has remained continuously employed with (or has provided continued service to) the Company from the Grant Date through immediately prior to the effectiveness of such Qualified Change in Control (an “Automatic Exercise”). In the event of such Automatic Exercise, the Company will make a payment to Grantee under the Award in the form of cash, net of any applicable tax withholding obligations.
Section 5.    Failure of Vesting Restrictions. By executing this Agreement, Grantee acknowledges and agrees that the Award will terminate prior to the Expiration Date as provided below:
(a)    Termination of Service. Upon Grantee’s Termination of Service by the election of the Company for any reason other than Grantee’s death, Retirement or Disability (other than for Cause), Grantee may exercise the Award at any time within three months from Grantee’s Termination of Service, but only to the extent that, as of the date of Grantee’s Termination of Service, Grantee’s right to exercise the Award has vested and Grantee has not previously exercised the Award. Any portion of the Award unexercised following such period shall be forfeited as of the expiration date of such period. Notwithstanding the foregoing, if Grantee suffers a Termination of Service for Cause or the Termination of Service occurs by the election of Grantee (other than an election because of death, Retirement or Disability), Grantee’s unexercised Award as of the date of his or her Termination of Service shall be cancelled and forfeited as of such date.
(b)    Death, Retirement or Disability. Upon Grantee’s Termination of Service by reason of Grantee’s death, Retirement or Disability, or if Grantee dies with exercise rights under Section 6(a), Grantee (or his or her beneficiary in the case of death) may exercise the 

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Award at any time within 12 months from Grantee’s Termination of Service, but only to the extent that, at the date of Termination of Service, Grantee’s right to exercise the Award has vested and Grantee has not previously exercised the Award. Any portion of the Award unexercised following such period shall be forfeited as of the expiration date of such period.
Section 6.    Exercise. Subject to the provisions hereof, including Section 2 and Section 5, the Award may be exercised in whole or in part at any time, within the period permitted for the exercise thereof, with respect to whole shares only. To exercise the Award, other than pursuant to an Automatic Exercise, Grantee or the Successor of the Participant must deliver a Notice of Exercise in the form attached hereto as EXHIBIT B (the “Notice of Exercise”) to the Company at its principal office together with such additional documents as the Company may then require. The Company will determine the amount of any applicable taxes which require withholding as a result of the exercise, and Grantee must provide for such taxes as required by Section 9 and the Plan.
Section 7.    Nontransferability of Award. Except as the Company and Grantee may agree in accordance with Section 6.3 of the Plan, the Award may not be sold, pledged, assigned, hypothecated, transferred or disposed of by Grantee in any manner other than by will or the laws of descent and distribution. No transfer of any portion of the Award by will or the laws of descent and distribution shall be effective to bind the Company unless the Company is furnished with written notice thereof and appropriate documentation evidencing the rights of any Successor(s) of the Participant as the Committee deems necessary or desirable.
Section 8.    Withholding Obligations. 
(a)    At the time Grantee exercises the Award, or this Award is otherwise deemed exercised pursuant to an Automatic Exercise, in either case, in whole or in part, or at any time thereafter as requested by the Company, Grantee hereby authorizes withholding from payroll and any other amounts payable to Grantee, and otherwise agree to make adequate provision for, any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if any, which arise in connection with the exercise of the Award. By exercising the Award, Grantee agrees that, as a condition to any exercise of the Award, the Company may require Grantee to enter into an arrangement providing for the payment by Grantee to the Company of any tax withholding obligation of the Company arising by reason of the exercise of the Award.
(b)    Upon Grantee’s request and subject to approval by the Company, in its sole discretion, and compliance with any applicable legal conditions or restrictions, the Company may withhold from fully vested shares of Common Stock otherwise issuable to Grantee upon the exercise of the Award a number of whole shares of Common Stock having a Fair Market Value, determined by the Company as of the date of exercise, not in excess of the minimum amount of tax required to be withheld by law (or such lower amount as may be necessary to avoid variable award accounting). If the date of determination of any tax withholding obligation is deferred to a date later than the date of exercise of the Award, share withholding pursuant to the preceding sentence shall not be permitted unless Grantee makes a proper and timely election under Section 83(b) of the Code, covering the aggregate number of shares of Common Stock acquired upon such exercise with respect to which such 

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determination is otherwise deferred, to accelerate the determination of such tax withholding obligation to the date of exercise of the Award. Notwithstanding the filing of such election, shares of Common Stock shall be withheld solely from fully vested shares of Common Stock determined as of the date of exercise of the Award that are otherwise issuable to Grantee upon such exercise. Any adverse consequences to Grantee arising in connection with such share withholding procedure shall be Grantee’s sole responsibility.
(c)    Grantee may not exercise the Award unless the tax withholding obligations of the Company and/or any Affiliate are satisfied. Accordingly, Grantee may not be able to exercise the Award when desired even though the Award is vested, and the Company shall have no obligation to issue a certificate for such shares of Common Stock or release such shares of Common Stock from any escrow provided for herein unless such obligations are satisfied.
Section 9.    Miscellaneous Provisions. 
(a)    No Retention Rights. Nothing in this Agreement shall confer upon Grantee any right to continue in the employment or service of the Company for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company or of Grantee, which rights are hereby expressly reserved by each, to terminate his or her employment or service at any time and for any reason, with or without cause. 
(b)    Antidilution. In the event that any change in the outstanding shares of Common Stock of the Company (including an exchange of Common Stock for stock or other securities of another corporation) occurs by reason of a Common Stock dividend or split, recapitalization, merger, consolidation, combination, exchange of shares or other similar corporate changes, other than for consideration received by the Company therefore, the number of shares of stock granted hereunder or the Exercise Price may be appropriately adjusted by the Committee in its sole and absolute discretion, whose determination shall be conclusive, final and binding; provided, however that fractional shares shall be rounded to the nearest whole share. In the event of any other change in the Common Stock, the Committee shall in its sole discretion determine whether such change equitably requires a change in the number or type of shares of stock granted hereunder or the Exercise Price and any adjustment made by the Committee shall be conclusive, final and binding.
(c)    Determination of Value. The Company makes no representation as to the value of the Award or whether Grantee will be able to realize any profit from it.
(d)    Plan. The provisions of the Plan are incorporated by reference into these terms and conditions. To the extent any provision of this Agreement conflicts with the Plan, the terms of the Plan shall govern. Grantee acknowledges receipt of a copy of the Plan and represents that he has reviewed the Plan and is familiar with the terms and provisions thereof. Grantee hereby accepts this Agreement and the terms of the Plan. 
(e)    Notices. Any notice required by the terms of this Agreement shall be given in writing and shall be deemed effective upon personal delivery, upon deposit with the United 

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LEGAL_US_W # 76432878.1 

States Postal Service, by registered or certified mail, with postage and fees prepaid or upon deposit with a reputable overnight courier. Notice shall be addressed to the Company at its principal executive office and to Grantee at the address most recently provided by Grantee to the Company.
(f)    Blackout Periods. In connection with certain corporate events, the Company reserves the right to designate periods during which Grantee may not exercise the Award; provided that no such blackout period shall limit or delay an Automatic Exercise, as provided under Section 5.
(g)    Entire Agreement; Amendments. This Agreement constitutes the entire contract between the parties hereto with regard to the subject matter hereof. This Agreement supersedes any other agreements, representations or understandings (whether oral or written and whether express or implied) which relate to the subject matter hereof. The Committee shall have authority, subject to the express provisions of the Plan, to interpret this Agreement and the Plan, to establish, amend and rescind any rules and regulations relating to the Plan, to modify the terms and provisions of this Agreement, and to make all other determinations in the judgment of the Committee necessary or desirable for the administration of the Plan. The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in this Agreement in the manner and to the extent it shall deem necessary or desirable to carry it into effect. All action by the Committee under the provisions of this paragraph shall be final, conclusive and binding for all purposes.
(h)    Change in Control.  Unless provided otherwise in connection with the transaction resulting in the Change in Control, immediately preceding the occurrence of a Change in Control of the Company, any unvested portion of the Award shall immediately vest in full and to the extent not expired or previously exercised become immediately exercisable.
(i)    Choice of Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, AS SUCH LAWS ARE APPLIED TO CONTRACTS ENTERED INTO AND PERFORMED IN SUCH STATE, WITHOUT GIVING EFFECT TO THE CHOICE OF LAW PROVISIONS THEREOF.
(j)    Successors. This Agreement is personal to Grantee and, except as otherwise provided above, shall not be assignable by Grantee otherwise than by will or the laws of descent and distribution, without the written consent of the Company. This Agreement shall inure to the benefit of and be enforceable by Grantee’s legal representatives. This Agreement shall inure to the benefit of and be binding upon the Company and its successors. It shall not be assignable by the Company except in connection with the sale or other disposition of all or substantially all the assets or business of the Company.
(k)    Severability. If any provision of this Agreement for any reason should be found by any court of competent jurisdiction to be invalid, illegal or unenforceable, in whole or in part, such declaration shall not affect the validity, legality or enforceability of any 

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remaining provision or portion hereof, which remaining provision or portion hereof shall remain in full force and effect as if this Agreement had been adopted with the invalid, illegal or unenforceable provision or portion hereof eliminated.
(l)    Headings. The headings and captions in this Agreement shall not be construed to limit or modify the terms or meaning of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

BY GRANTEE’S SIGNATURE BELOW, along with the signature of the Company’s representative, Grantee and the Company agree that the Stock Appreciation Rights are awarded under and governed by the terms and conditions of this Agreement, the Plan and, in the event of exercise of the Award, the Notice of Exercise.

TRANSGENOMIC, INC.

By:        

Name:    Rodney S. Markin, M.D., Ph.D.    

Title:    Chairman of the Board of Directors    

GRANTEE
The undersigned Grantee hereby accepts the terms of this Agreement, the Plan and, in the event of exercise of the Award, the Notice of Exercise.
By:        

Name of Grantee:    Mark Colonnese    

[SIGNATURE PAGE TO STOCK APPRECIATION RIGHTS AGREEMENT]
EXHIBIT A
TRANSGENOMIC, INC.
2006 EQUITY INCENTIVE PLAN

EXHIBIT B
TRANSGENOMIC, INC.
STOCK APPRECIATION RIGHTS
NOTICE OF EXERCISE
Transgenomic, Inc.
12325 Emmet Street
Omaha, Nebraska 68164
Date of Exercise: _______________
Ladies and Gentlemen:
This constitutes notice under my Stock Appreciation Rights Agreement with Transgenomic, Inc., a Delaware corporation (the “Company”), identified below that I elect to exercise my Stock Appreciation Rights with respect to the number of shares set forth below.
	
		
	Grant Date of Stock Appreciation Rights Agreement:
	September 30, 2013

	Number of shares as 
to which SAR is 
exercised:
	___________________________

	[Certificates to be 
issued in name of:
	___________________________]

By this exercise, I agree (i) to provide such additional documents as the Company may require pursuant to the terms of the Transgenomic, Inc. 2006 Equity Incentive Plan (the “Plan”), and (ii) that the Company will satisfy its obligations arising from this exercise notice through withholding a portion of the cash payment payable hereunder equal to the amount of such obligations and/or issuing shares of common stock of the Company (net of shares of common stock of the Company having a Fair Market Value (as defined in the Plan) equal to the minimum statutory taxes and withholding due; except to the extent the undersigned pays cash herewith to settle such obligations).
Very truly yours,
By: _________________________
Name: Mark Colonnese    

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LEGAL_US_W # 76432878.1Ex107TBIO-SecondAmendmenttoLoanAgreement

Exhibit 10.7

SECOND AMENDMENT TO
LOAN AND SECURITY AGREEMENT
(TERM LOAN AND REVOLVING LOAN)
This SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”), entered into on November 14, 2013 (the “Execution Date”) with an effective date as of October 31, 2013 (the “Effective Date”), is entered into by and among THIRD SECURITY SENIOR STAFF 2008 LLC, as administrative agent (the “Agent”), and a lender, the other lenders party hereto (collectively, the “Lenders”), and TRANSGENOMIC, INC., a Delaware corporation (the “Borrower”).
WHEREAS, the Borrower, the Agent and the Lenders are party to that certain Loan and Security Agreement (Term Loan and Revolving Loan), dated as of March 13, 2013 (as amended, restated, supplemented, or otherwise modified from time to time, the “Loan Agreement”), whereby the Lenders have extended to the Borrower a loan facility pursuant to the Loan Agreement on the terms and subject to the conditions contained therein;
WHEREAS, the parties entered into a First Amendment to the Loan and Security Agreement, dated August 2, 2013; and
WHEREAS, the Borrower has requested that the Agent and the Lenders, and the Agent and the Lenders have agreed to, subject to the terms and conditions set forth in this Amendment, amend certain provisions of the Loan Agreement, effective as of the Effective Date. 
NOW, THEREFORE, in consideration of the foregoing premises, and other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
1.    Definitions.  Unless otherwise defined herein, capitalized terms used herein shall have the meanings assigned to them in the Loan Agreement.
2.    Amendments to the Loan Agreement.  Effective as of the Effective Date, the Loan Agreement is amended as follows:
(a)    Section 6.9(b) of the Loan Agreement is amended by deleting the existing text of such subsection in its entirety and inserting, in lieu thereof, the following: 
Minimum Net Revenue.  Achieve at least the amounts set forth below during the applicable periods.

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	Six Month Period Ending
	Net Revenue

	March 31, 2013
	$14,666,000

	April 30, 2013
	$15,275,000

	May 31, 2013
	$14,955,000

	June 30, 2013
	$14,679,000

	July 31, 2013
	$14,296,000

	August 31, 2013
	$14,096,000

	September 30, 2013
	$13,806,000

	October 31, 2013
	$13,022,000

	November 30, 2013
	$12,812,000

	December 31, 2013
	$11,899,000

	January 31, 2014
	$11,866,000

	February 28, 2014
	$10,895,000

	March 31, 2014
	$10,690,000

	April 30, 2014
	$10,781,000

	May 31, 2014
	$10,871,000

	June 30, 2014
	$11,592,000

	July 31, 2014
	$12,377,000

	August 31, 2014
	$13,161,000

	September 30, 2014
	$14,207,000

	October 31, 2014
	$15,406,000

	November 30, 2014
	$16,605,000

	December 31, 2014
	$18,203,000

For each monthly period in each fiscal year ending thereafter, the minimum revenue, measured on a trailing six-month basis, shall be based on an amount that is equal to the greater of (i) eighty-five percent (85%) of the board approved Annual Financial Projections applicable to such monthly period in such fiscal year and (ii) $18,203,000.
3.    Conditions Precedent.  The effectiveness of this Amendment is subject to the satisfaction of the following conditions precedent:
(a)    receipt by the Agent of a copy of this Amendment, duly executed and delivered by the Borrower and the Required Lenders;
(b)    receipt by the Agent of any other documents or agreements reasonably requested by the Agent in connection with the transactions contemplated by this Amendment;
(d)    the truth and accuracy of the representations and warranties contained in Section 5 of this Amendment; and
(e)    receipt by the Lenders and the Agent of any fees and expenses due and payable on or before the Execution Date under the Loan Agreement or this Amendment.

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4.    Reaffirmation.  The Borrower hereby reaffirms each of the agreements, covenants, and undertakings set forth in the Loan Agreement and each and every other Loan Document as of the Execution Date as if the Borrower was making said agreements, covenants and undertakings as of the Execution Date.
5.    Representations, Warranties, Covenants and Acknowledgments.  To induce the Agent and Lenders to enter into this Amendment, the Borrower hereby:
(a)    represents and warrants that (i) as of the Execution Date, all of the representations and warranties made or deemed to be made under the Loan Documents are true and correct in all material respects (other than any representation or warranty that is qualified by materiality or Material Adverse Effect, in which case such representation or warranty is true and correct in all respects) on and as of the Execution Date to the same extent as though made on and as of the Execution Date, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties were true and correct in all material respects (other than any representation or warranty that is qualified by materiality or Material Adverse Effect, in which case such representation or warranty was true and correct in all respects) on and as of such earlier date; (ii) as of the Effective Date and the Execution Date, after giving effect to the terms of this Amendment, there exists no Default or Event of Default under the Loan Agreement or any of the other Loan Documents; (iii) the Borrower has the corporate power and is duly authorized to enter into, deliver and perform this Amendment; and (iv) this Amendment is the legal, valid and binding obligation of the Borrower enforceable against the Borrower in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability;
(b)    acknowledges and agrees that (i) this Amendment does not and shall not create (nor shall the Borrower or any of its Subsidiaries rely upon the existence of or claim or assert that there exists) any obligation of the Agent or any Lender to consider or agree to any further consent, waiver or amendment with respect to any Loan Document and, in the event that the Agent or any Lender subsequently agrees to consider any further consent, waiver or amendment with respect to any Loan Document, neither this Amendment nor any other conduct of the Agent or any Lender shall be of any force or effect on the Agent’s or such Lender’s consideration or decision with respect thereto, and neither the Agent nor any Lender shall have any further obligation whatsoever to consider or agree to any further consent, waiver or amendment with respect to any Loan Document; and (ii) except as expressly set forth in this Amendment, the Agent and each Lender reserves all of their respective rights pursuant to the Loan Agreement and all other Loan Documents;
(c)    further acknowledges and agrees that the Agent’s and Lenders’ agreement to amend the specific matters addressed in this Amendment, do not and shall not create (nor shall the Borrower or any of its Subsidiaries rely upon the existence of or claim or assert that there exists) any obligation of the Agent or any Lender to consider or agree to any further waivers, consents or amendments and, in the event that the Agent or any Lender subsequently 

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agrees to consider any further waivers, consents or amendments, neither this Amendment nor any other conduct of the Agent or any Lender shall be of any force or effect on the Agent’s or any Lender’s consideration or decision with respect to any such requested consent;
(d)    further acknowledges and agrees that no right of offset, defense, counterclaim, claim, cause of action or objection in favor of the Borrower against any Lender exists arising out of or with respect to (i) this Amendment, the Loan Agreement or any other Loan Document, or (ii) any other documents now or heretofore evidencing, securing or in any way relating to the foregoing; and
(e)    further acknowledges and agrees that this Amendment shall be deemed a Loan Document for all purposes under the Loan Agreement and the other Loan Documents.
6.    Effect of Non-Compliance.  To the extent any representation or warranty made herein shall be untrue in any material respect, such occurrence shall be deemed an Event of Default pursuant to the terms of the Loan Agreement and the other Loan Documents.
7.    Release; Indemnitees.
(a)    In further consideration of the execution of this Amendment by the Agent and each Lender, the Borrower, individually and on behalf of its successors (including, without limitation, any trustees acting on behalf of the Borrower and any debtor-in-possession with respect to the Borrower), assigns, subsidiaries and Affiliates, hereby forever releases the Agent, each Lender and their respective successors, assigns, parents, subsidiaries, Affiliates, officers, employees, directors, agents and attorneys (collectively, the “Releasees”) from any and all debts, claims, demands, liabilities, responsibilities, disputes, causes, damages, actions and causes of actions (whether at law or in equity) and obligations of every nature whatsoever, whether liquidated or unliquidated, whether known or unknown, matured or unmatured, fixed or contingent (collectively, “Claims”) that the Borrower may have against the Releasees which arise from or relate to any actions which the Releasees may have taken or omitted to take in connection with the Loan Agreement or the other Loan Documents prior to the Effective Date, including, without limitation, with respect to the Obligations, any Collateral, the Loan Agreement, any other Loan Document and any third parties liable in whole or in part for the Obligations.  This provision shall survive and continue in full force and effect whether or not the Borrower shall satisfy all other provisions of this Amendment, the Loan Documents or the Loan Agreement, including payment in full of all Obligations. 
(b)    The Borrower hereby further agrees to indemnify and hold the Releasees harmless with respect to any and all liabilities, obligations, losses, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever incurred by the Releasees, or any of them, whether direct, indirect or consequential, as a result of or arising from or relating to any proceeding by, or on behalf of any Person, including, without limitation, officers, directors, agents, trustees, creditors, partners or shareholders of the Borrower or any parent, Subsidiary or Affiliate of the Borrower, whether threatened or initiated, asserting any claim for legal or equitable remedy under any statutes, regulation or 

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common law principle arising from or in connection with the negotiation, preparation, execution, delivery, performance, administration and enforcement of this Amendment.  The foregoing indemnity shall survive the payment in full of the Obligations and the termination of this Amendment, the Loan Agreement and the other Loan Documents.
8.    Effect; Relationship of Parties.  Except as expressly modified hereby, the Loan Agreement and each other Loan Document shall be and remain in full force and effect as originally written, and shall constitute the legal, valid, binding and enforceable obligations of the Borrower to the Agent and Lenders.  The relationship of the Agent and Lenders, on the one hand, and the Borrower, on the other hand, has been and shall continue to be, at all times, that of creditor and debtor and not as joint venturers or partners.  Nothing contained in this Amendment, any instrument, document or agreement delivered in connection herewith or in the Loan Agreement or any of the other Loan Documents shall be deemed or construed to create a fiduciary relationship between or among the parties.
9.    Expenses.  The Borrower shall pay the Agent all of its actual, documented and reasonable costs and expenses in connection with the preparation, negotiation, execution and enforcement of this Amendment in accordance with the Loan Agreement (including, without limitation, all actual, documented and reasonable fees, expenses and disbursements of counsel to the Agent).
10.    Miscellaneous.  This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same instrument.  This Amendment shall be binding upon and inure to the benefit of the successors and permitted assigns of the parties hereto.  California law governs this Amendment, without regard to principles of conflicts of law.  This Amendment embodies the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes all prior oral or written negotiations, agreements and understandings of the parties with respect to the subject matter hereof.  Time is of the essence of this Amendment.
[remainder of page intentionally blank]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed on the Execution Date, effective as of the Effective Date.
BORROWER:
TRANSGENOMIC, INC.
By:    _______________________________
 
Name:    _______________________________ 
 
Title:    _______________________________
AGENT:
THIRD SECURITY SENIOR STAFF 2008 LLC
As Agent for Lenders

By__________________________________ 
Name: Randal J. Kirk 
Title:   Manager, Third Security, LLC, which is 
             the Manager of Third Security Senior  
             Staff 2008 LLC
LENDERS:
THIRD SECURITY SENIOR STAFF 2008 LLC
By__________________________________
       Randal J. Kirk
        Manager, Third Security, LLC, which is the 
        Manager of Third Security Senior Staff 2008 LLC
THIRD SECURITY STAFF 2010 LLC
By__________________________________
       Randal J. Kirk
        Manager, Third Security, LLC, which is the
        Manager of Third Security Staff 2010 LLC
THIRD SECURITY INCENTIVE 2010 LLC
By__________________________________
        Randal J. Kirk
        Manager, Third Security, LLC, which is the 
        Manager of Third Security Incentive 2010 LLC

[Signature Page to Second Amendment]

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