\n| <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n 3. Registration of Transfers<\/u>. The Company shall register the transfer
\nof all or any portion of this Warrant in the Warrant Register, upon surrender of
\nthis Warrant, with the Form of Assignment attached as Schedule 2<\/u> hereto
\nduly completed and signed, to the Company153s transfer agent or to the Company at
\nits address specified in the Third Security Purchase Agreement and (x) delivery,
\nat the request of the Company, of an opinion of counsel reasonably satisfactory
\nto the Company to the effect that the transfer of such portion of this Warrant
\nmay be made pursuant to an available exemption from the registration
\nrequirements of the Securities Act and all applicable state securities or blue
\nsky laws (other than in connection with any transfer (i) pursuant to an
\neffective registration statement, (ii) to the Company, (iii) pursuant to Rule
\n144 (provided that such Holder provides the Company with reasonable assurances
\n(in the form of seller and, if applicable, broker representation letters) that
\nthe securities may be sold pursuant to such rule) or (iv) in connection with a
\nbona fide pledge) and (y) delivery by the transferee of a written statement to
\nthe Company certifying that the transferee is an “accredited investor” as
\ndefined in Rule 501(a) under the Securities Act, at its address specified in the
\nThird Security Purchase Agreement. Upon any such registration or transfer, a new
\nwarrant to purchase Common Stock in substantially the form of this Warrant (any
\nsuch new warrant, a “New Warrant<\/em>“) evidencing the portion of this
\nWarrant so transferred shall be issued to the transferee, and a New Warrant
\nevidencing the remaining portion of this Warrant not so transferred, if any,
\nshall be issued to the transferring Holder. The acceptance of the New Warrant by
\nthe transferee thereof shall be deemed the acceptance by such transferee of all
\nof the rights and obligations in respect of the New Warrant that the Holder has
\nin respect of this Warrant. The Company shall prepare, issue and deliver at its
\nown expense any New Warrant under this Section 3.<\/p>\n<\/p>\n4. Exercise and Duration of Warrant<\/u>.<\/p>\n<\/p>\n (a) All or any part of this Warrant shall be exercisable by the registered
\nHolder in any manner permitted by Section 10 of this Warrant at any time and
\nfrom time to time on or after the Original Issue Date and through and including
\n5:30 p.m. New York City time, on the Expiration Date. At 5:30 p.m., New York
\nCity time, on the Expiration Date, the portion (or all) of this Warrant not
\nexercised prior thereto shall be and become void and of no value and this
\nWarrant shall be automatically terminated and no longer outstanding.<\/p>\n<\/p>\n (b) The Holder may exercise this Warrant by delivering to the Company (i) an
\nexercise notice, in the form attached as Schedule 1<\/u> hereto (the
\n“Exercise Notice<\/em>“), completed and duly signed, and (ii) payment of the
\nExercise Price for the number of Warrant Shares as to which this Warrant is
\nbeing exercised (which may take the form of a “cashless exercise” if so
\nindicated in the Exercise Notice and if a “cashless exercise” may occur at such
\ntime pursuant to Section 10 below) within two (2) Business Days following the
\nExercise Date (as defined herein). The date on which the Exercise Notice is
\ndelivered to the Company (as determined in accordance with the notice provisions
\nhereof) is an “Exercise Date<\/em>.” The Holder shall not be required to
\ndeliver the original Warrant in order to effect an exercise hereunder, but if it
\nis not so delivered then such exercise shall constitute an agreement by the
\nHolder to deliver the original Warrant to the Company as soon as practicable
\nthereafter. Execution and delivery of the Exercise Notice shall have the same
\neffect as cancellation of the original Warrant and issuance of a New Warrant
\nevidencing the right to purchase the remaining number of Warrant Shares.<\/p>\n<\/p>\n\n\n\n| \n 2<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n 5. Delivery of Warrant Shares<\/u>.<\/p>\n<\/p>\n (a) Upon exercise of this Warrant, the Company shall promptly (but in no
\nevent later than three Trading Days after the Exercise Date) issue or cause to
\nbe issued and cause to be delivered to or upon the written order of the Holder
\nand in such name or names as the Holder may designate (provided that, if the
\nRegistration Statement (as defined below) is not effective and the Holder
\ndirects the Company to deliver a certificate for the Warrant Shares in a name
\nother than that of the Holder or an Affiliate of the Holder, it shall deliver to
\nthe Company on the Exercise Date an opinion of counsel reasonably satisfactory
\nto the Company to the effect that the issuance of such Warrant Shares in such
\nother name may be made pursuant to an available exemption from the registration
\nrequirements of the Securities Act and all applicable state securities or blue
\nsky laws), (i) a certificate for the Warrant Shares issuable upon such exercise,
\nfree of restrictive legends, or (ii) an electronic delivery of the Warrant
\nShares to the Holder153s account at the Depository Trust Company (“DTC<\/em>“)
\nor a similar organization, unless in the case of clause (i) and (ii) a
\nregistration statement covering the resale of the Warrant Shares and naming the
\nHolder as a selling stockholder thereunder (the “Registration
\nStatement<\/em>“) is not then effective or the Warrant Shares are not freely
\ntransferable without restriction under Rule 144 by Holders who are not
\naffiliates of the Company, in which case such Holder shall receive a certificate
\nfor the Warrant Shares issuable upon such exercise with appropriate restrictive
\nlegends. The Holder, or any Person permissibly so designated by the Holder to
\nreceive Warrant Shares, shall be deemed to have become the holder of record of
\nsuch Warrant Shares as of the Exercise Date. Notwithstanding anything contained
\nherein to the contrary, if the Holder fails to deliver the documents required to
\nregister a transferee as set forth in Section 3 above or to provide the
\ndocuments required under this Section 5(a) to issue a certificate or electronic
\ndelivery of the Warrant Shares to any Person(s) other than the Holder, then
\ndetermination of the three Trading Days shall be tolled until such documents
\nhave been delivered to the Company. If the Warrant Shares are to be issued free
\nof all restrictive legends, the Company shall, upon the written request of the
\nHolder, use its reasonable best efforts to deliver, or cause to be delivered,
\nWarrant Shares hereunder electronically through DTC or another established
\nclearing corporation performing similar functions, if available; provided, that,
\nthe Company may, but will not be required to, change its transfer agent if its
\ncurrent transfer agent cannot deliver Warrant Shares electronically through such
\na clearing corporation. “Trading Day<\/em>” means any day on which the Common
\nStock are traded on the principal securities exchange or securities market on
\nwhich the Common Stock are then traded (the “Trading Market<\/em>“);
\nprovided<\/em> that “Trading Day<\/em>” shall not include any day on which
\nthe Common Stock is scheduled to trade on such exchange or market for less than
\n4.5 hours or any day that the Common Stock is suspended from trading during the
\nfinal hour of trading on such exchange or market (or if such exchange or market
\ndoes not designate in advance the closing time of trading on such exchange or
\nmarket, then during the hour ending at 4:00:00 p.m., New York time).<\/p>\n<\/p>\n(b) If by the close of the third Trading Day after delivery of a properly
\ncompleted Exercise Notice and the payment of the aggregate Exercise Price in any
\nmanner permitted by Section 10 of this Warrant, the Company fails to deliver to
\nthe Holder a certificate representing the required number of Warrant Shares in
\nthe manner required pursuant to Section 5(a), and if after such third Trading
\nDay and prior to the receipt of such Warrant Shares, the Holder is required to
\npurchase (in an open market transaction or otherwise) shares of Common Stock to
\ndeliver in satisfaction of a sale by the Holder of the Warrant Shares which the
\nHolder anticipated receiving upon such exercise (a “Buy-In<\/em>“), then the
\nCompany shall, in its sole discretion, within three Trading Days after the
\nHolder153s request for payment, either (1) pay in cash to the Holder an amount
\nequal to the Holder153s total purchase price (including brokerage commissions, if
\nany) for the shares of Common Stock so purchased, at which point the number of
\nWarrant Shares underlying this Warrant equal to the number of shares of Common
\nStock so purchased shall be forfeited and the Company153s obligation to deliver
\nsuch certificate (and to issue such Warrant Shares) shall terminate or (2)
\npromptly honor its obligation to deliver to the Holder a certificate or
\ncertificates representing such Warrant Shares and pay cash to the Holder in an
\namount equal to the excess (if any) of Holder153s total purchase price (including
\nbrokerage commissions, if any) for the shares of Common Stock so purchased in
\nthe Buy-In over the product of (A) the number of shares of Common Stock
\npurchased in the Buy-In, multiplied by (B) the closing bid price of a share of
\nCommon Stock on the Exercise Date. The Holder shall provide the Company written
\nnotice indicating the amounts payable to the Holder in respect of the Buy-In,
\ntogether with applicable confirmations and other evidence reasonably requested
\nby the Company.<\/p>\n<\/p>\n\n\n\n| \n 3<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n (c) To the extent permitted by law, the Company153s obligations to issue and
\ndeliver Warrant Shares in accordance with and subject to the terms hereof are
\nabsolute and unconditional, irrespective of any action or inaction by the Holder
\nto enforce the same, any waiver or consent with respect to any provision hereof,
\nthe recovery of any judgment against any Person or any action to enforce the
\nsame, or any setoff, counterclaim, recoupment, limitation or termination, or any
\nbreach or alleged breach by the Holder or any other Person of any obligation to
\nthe Company (other than breaches related to this Warrant or the Purchase
\nAgreement) or any violation or alleged violation of law by the Holder or any
\nother Person, and irrespective of any other circumstance that might otherwise
\nlimit such obligation of the Company to the Holder in connection with the
\nissuance of Warrant Shares. Nothing herein shall limit the Holder153s right to
\npursue any other remedies available to it hereunder, at law or in equity
\nincluding, without limitation, a decree of specific performance and\/or
\ninjunctive relief with respect to the Company153s failure to timely deliver
\ncertificates representing shares of Common Stock upon exercise of the Warrant as
\nrequired pursuant to the terms hereof.<\/p>\n<\/p>\n 6. Charges, Taxes and Expenses<\/u>. Issuance and delivery of certificates
\nfor shares of Common Stock upon exercise of this Warrant shall be made without
\ncharge to the Holder for any issue or transfer tax, transfer agent fee or other
\nincidental tax or expense in respect of the issuance of such certificates, all
\nof which taxes and expenses shall be paid by the Company; provided,
\nhowever<\/em>, that the Company shall not be required to pay any tax that may be
\npayable in respect of any transfer involved in the registration of any
\ncertificates for Warrant Shares or the Warrants in a name other than that of the
\nHolder or an Affiliate thereof. The Holder shall be responsible for all other
\ntax liability that may arise as a result of holding or transferring this Warrant
\nor receiving Warrant Shares upon exercise hereof.<\/p>\n<\/p>\n7. Replacement of Warrant<\/u>. If this Warrant is mutilated, lost, stolen
\nor destroyed, the Company shall issue or cause to be issued in exchange and
\nsubstitution for and upon cancellation hereof, or in lieu of and substitution
\nfor this Warrant, a New Warrant, but only upon receipt of evidence reasonably
\nsatisfactory to the Company of such loss, theft or destruction (in such case)
\nand, in each case, a customary and reasonable indemnity and surety bond, if
\nrequested by the Company. Applicants for a New Warrant under such circumstances
\nshall also comply with such other reasonable regulations and procedures and pay
\nsuch other reasonable third-party costs as the Company may prescribe. If a New
\nWarrant is requested as a result of a mutilation of this Warrant, then the
\nHolder shall deliver such mutilated Warrant to the Company as a condition
\nprecedent to the Company153s obligation to issue the New Warrant.<\/p>\n<\/p>\n\n\n\n| \n 4<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n 8. Reservation of Warrant Shares<\/u>. The Company represents and warrants
\nthat on the date hereof, it has duly authorized and reserved, and covenants that
\nit will at all times during the period this Warrant is outstanding reserve and
\nkeep available out of the aggregate of its authorized but unissued and otherwise
\nunreserved Common Stock, solely for the purpose of enabling it to issue Warrant
\nShares upon exercise of this Warrant as herein provided, the number of Warrant
\nShares that are initially issuable and deliverable upon the exercise of this
\nentire Warrant, free from preemptive rights or any other contingent purchase
\nrights of persons other than the Holder (taking into account the adjustments and
\nrestrictions of Section 9). The Company covenants that all Warrant Shares so
\nissuable and deliverable shall, upon issuance and the payment of the applicable
\nExercise Price in accordance with the terms hereof, be duly and validly
\nauthorized, issued and fully paid and nonassessable and free from all taxes,
\nliens and charges created by the Company in respect of the original issuance
\nthereof (other than taxes in respect of any transfer occurring contemporaneously
\nwith such issue). The Company further covenants that its issuance of this
\nWarrant shall constitute full authority to its officers who are charged with the
\nduty of executing stock certificates to execute and issue the necessary
\ncertificates for the Warrant Shares upon the exercise of the purchase rights
\nunder this Warrant. The Company represents and warrants that the Warrant Shares,
\nwhen issued and paid for in accordance with the terms of the Transaction
\nDocuments and the Warrants, will be issued free and clear of all security
\ninterests, claims, liens and other encumbrances other than restrictions imposed
\nby applicable securities laws. The Company will take all such action as may be
\nreasonably necessary to assure that such shares of Common Stock may be issued as
\nprovided herein without violation of any applicable law or regulation, or of any
\nrequirements of any securities exchange or automated quotation system upon which
\nthe Common Stock may be listed.<\/p>\n<\/p>\n 9. Certain Adjustments<\/u>. The Exercise Price and number of Warrant
\nShares issuable upon exercise of this Warrant are subject to adjustment from
\ntime to time as set forth in this Section 9.<\/p>\n<\/p>\n (a) Stock Dividends and Splits<\/u>. If the Company, at any time while this
\nWarrant is outstanding, (i) pays a stock dividend on its Common Stock or
\notherwise makes a distribution on any class of capital stock that is payable in
\nshares of Common Stock, (ii) subdivides its outstanding shares of Common Stock
\ninto a larger number of shares, (iii) combines (by combination, reverse stock
\nsplit or otherwise) its outstanding shares of Common Stock into a smaller number
\nof shares (a “Stock Combination Event<\/em>“) or (iv) issues by
\nreclassification of shares of Common Stock any shares of capital stock of the
\nCompany, then in each such case the Exercise Price shall be adjusted to a price
\ndetermined by multiplying the Exercise Price in effect immediately prior to the
\neffective date of such event by a fraction, the numerator of which shall be the
\nnumber of shares of Common Stock outstanding on such effective date immediately
\nbefore giving effect to such event and the denominator of which shall be the
\nnumber of shares of Common Stock outstanding immediately after giving effect to
\nsuch event. Any adjustment made pursuant to clause (i) of this paragraph shall
\nbecome effective immediately after the record date for the determination of
\nstockholders entitled to receive such dividend or distribution, and any
\nadjustment pursuant to clause (ii), (iii) or (iv) of this paragraph shall become
\neffective immediately after the effective date of such subdivision, combination
\nor reclassification. If at any time and from time to time on or after the
\nIssuance Date there occurs a Stock Combination Event and the product of (i) the
\nquotient determined by dividing (A) the Exercise Price in effect immediately
\nprior to the Stock Combination Event by (B) the arithmetic average of the
\nweighted average price during the fifteen (15) Trading Days immediately prior to
\nthe Stock Combination Event; and (ii) the arithmetic average of the weighted
\naverage price during the fifteen (15) Trading Days immediately following the
\ndate of such Stock Combination Event (each, an “Event Market Price”) is less
\nthan the Exercise Price then in effect (after giving effect to the adjustment in
\nSection 9(a) above), then on the sixteenth (16th) Trading Day immediately
\nfollowing such Stock Combination Event, the Exercise Price then in effect on
\nsuch sixteenth (16th) Trading Day (after giving effect to the adjustment in
\nSection 9(a) above) shall be reduced (but in no event increased) to the Event
\nMarket Price. For the avoidance of doubt, if the adjustment in the immediately
\npreceding sentence would otherwise result in an increase in the Exercise Price
\nhereunder, no adjustment shall be made.<\/p>\n<\/p>\n\n\n\n| \n 5<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n (b) Pro Rata Distributions<\/u>. If the Company, at any time while this
\nWarrant is outstanding, distributes to all holders of Common Stock for no
\nconsideration (i) evidences of its indebtedness, (ii) any security (other than a
\ndistribution of Common Stock covered by the preceding paragraph) or (iii) rights
\nor warrants to subscribe for or purchase any security, or (iv) any other asset,
\nincluding cash (in each case, “Distributed Property<\/em>“), except, in the
\ncase of subsections (b)(i) through (b)(iv) hereof, for any distributions
\npursuant to a shareholders153 rights plan or similar takeover defense agreement or
\nplan adopted by the Company, then, upon any exercise of this Warrant that occurs
\nafter the record date fixed for determination of stockholders entitled to
\nreceive such distribution, the Holder shall be entitled to receive, in addition
\nto the Warrant Shares otherwise issuable upon such exercise (if applicable), the
\nDistributed Property that such Holder would have been entitled to receive in
\nrespect of such number of Warrant Shares had the Holder been the record holder
\nof such Warrant Shares immediately prior to such record date.<\/p>\n<\/p>\n(c) Fundamental Transactions<\/u>. If, at any time while this Warrant is
\noutstanding (i) the Company effects (A) any merger of the Company with (but not
\ninto) another Person, in which stockholders of the Company immediately prior to
\nsuch transaction own less than a majority of the outstanding stock of the
\nsurviving entity, or (B) any merger or consolidation of the Company into another
\nPerson, (ii) the Company effects any sale of all or substantially all of its
\nassets in one or a series of related transactions, (iii) any tender offer or
\nexchange offer approved or authorized by the Company153s Board of Directors is
\ncompleted pursuant to which holders of at least a majority of the outstanding
\nCommon Stock tender or exchange their shares for other securities, cash or
\nproperty, or (iv) the Company effects any reclassification of the Common Stock
\nor any compulsory share exchange pursuant to which the Common Stock is
\neffectively converted into or exchanged for other securities, cash or property
\n(other than as a result of a subdivision or combination of shares of Common
\nStock covered by Section 9(a) above) (in any such case, a “Fundamental
\nTransaction<\/em>“), then the Holder shall have the right thereafter to receive,
\nupon exercise of this Warrant, the same amount and kind of securities, cash or
\nproperty as it would have been entitled to receive upon the occurrence of such
\nFundamental Transaction if it had been, immediately prior to such Fundamental
\nTransaction, the holder of the number of Warrant Shares then issuable upon
\nexercise in full of this Warrant without regard to any limitations on exercise
\ncontained herein (the “Alternate Consideration<\/em>“), and the Holder shall
\nno longer have the right to receive Warrant Shares upon exercise of this
\nWarrant. The Company shall not effect any such Fundamental Transaction unless
\nprior to or simultaneously with the consummation thereof, any successor to the
\nCompany, surviving entity or the corporation purchasing or otherwise acquiring
\nsuch assets or other appropriate corporation or Person shall assume the
\nobligation to deliver to the Holder, such Alternate Consideration as, in
\naccordance with the foregoing provisions, the Holder may be entitled to receive,
\nand the other obligations under this Warrant. The provisions of this paragraph
\n(c) shall similarly apply to subsequent transactions of an analogous type to any
\nFundamental Transaction.<\/p>\n<\/p>\n(d) Number of Warrant Shares<\/u>. Simultaneously with any adjustment to
\nthe Exercise Price pursuant to paragraph (a) or (e) of this Section 9, the
\nnumber of Warrant Shares that may be purchased upon exercise of this Warrant
\nshall be increased or decreased proportionately, so that after such adjustment
\nthe aggregate Exercise Price payable hereunder for the increased or decreased
\nnumber of Warrant Shares shall be the same as the aggregate Exercise Price in
\neffect immediately prior to such adjustment.<\/p>\n<\/p>\n (e) Subsequent Equity Sales<\/u>.<\/p>\n<\/p>\n (i) Except as provided in paragraph (e)(iii) of this Section 9<\/u>, if and
\nwhenever the Company shall issue or sell, or is, in accordance with any of
\nparagraphs (e)(ii)(l) through (e)(ii)(7) of this Section 9<\/u>, deemed to
\nhave issued or sold, any shares of Common Stock for no consideration or for a
\nconsideration per share less than the Exercise Price in effect immediately prior
\nto the time of such issue or sale, then and in each such case (a “Trigger
\nIssuance<\/em>“) the then-existing Exercise Price shall be reduced as of the
\nclose of business on the effective date of the Trigger Issuance, to a price
\ndetermined as follows:<\/p>\n<\/p>\n\n\n\n| \n 6<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Adjusted Exercise Price = (A x B) + D<\/u><\/p>\n<\/p>\n A+C<\/p>\n<\/p>\n where<\/p>\n<\/p>\n “A” equals the number of shares of Common Stock outstanding, including
\nAdditional Shares of Common Stock (as defined below) deemed to be issued
\nhereunder, immediately preceding such Trigger Issuance;<\/p>\n<\/p>\n “B” equals the Exercise Price in effect immediately preceding such Trigger
\nIssuance;<\/p>\n<\/p>\n “C” equals the number of Additional Shares of Common Stock issued or deemed
\nissued hereunder as a result of the Trigger Issuance; and<\/p>\n<\/p>\n “D” equals the aggregate consideration, if any, received or deemed to be
\nreceived by the Company upon such Trigger Issuance;<\/p>\n<\/p>\n provided, however<\/em>, that in no event shall the Exercise Price after
\ngiving effect to such Trigger Issuance be greater than the Exercise Price
\nimmediately prior to such Trigger Issuance.<\/p>\n<\/p>\nFor purposes of this paragraph (e), “Additional Shares of Common
\nStock<\/em>” shall mean all shares of Common Stock issued by the Company or
\ndeemed to be issued pursuant to this paragraph (e), other than Excluded
\nIssuances (as defined in paragraph (e)(iii) of this Section 9<\/u>).<\/p>\n<\/p>\n(ii) For purposes of this paragraph (e), the following paragraphs (e)(ii)(l)
\nto (e)(ii)(7) shall also be applicable:<\/p>\n<\/p>\n (1) Issuance of Rights or Options<\/u>. In case at any time the Company
\nshall in any manner grant (directly and not by assumption in a merger or
\notherwise) any warrants or other rights to subscribe for or to purchase, or any
\noptions for the purchase of, Common Stock or any stock or security convertible
\ninto or exchangeable for Common Stock (such warrants, rights or options being
\ncalled “Options<\/em>” and such convertible or exchangeable stock or
\nsecurities being called “Convertible Securities<\/em>“), whether or not such
\nOptions or the right to convert or exchange any such Convertible Securities are
\nimmediately exercisable, and the price per share for which Common Stock is
\nissuable upon the exercise of such Options or upon the conversion or exchange of
\nsuch Convertible Securities (determined by dividing (i) the sum (which sum shall
\nconstitute the applicable consideration) of (x) the total amount, if any,
\nreceived or receivable by the Company as consideration for the granting of such
\nOptions, plus (y) the aggregate amount of additional consideration payable to
\nthe Company upon the exercise of all such Options, plus (z), in the case of such
\nOptions that relate to Convertible Securities, the aggregate amount of
\nadditional consideration, if any, payable upon the issue or sale of such
\nConvertible Securities and upon the conversion or exchange thereof, by (ii) the
\ntotal maximum number of shares of Common Stock issuable upon the exercise of
\nsuch Options or upon the conversion or exchange of all such Convertible
\nSecurities issuable upon the exercise of such Options) shall be less than the
\nExercise Price in effect immediately prior to the time of the granting of such
\nOptions, then the total number of shares of Common Stock issuable upon the
\nexercise of such Options or upon conversion or exchange of the total amount of
\nsuch Convertible Securities issuable upon the exercise of such Options shall be
\ndeemed to have been issued for such price per share as of the date of granting
\nof such Options or the issuance of such Convertible Securities and thereafter
\nshall be deemed to be outstanding for purposes of adjusting the Exercise Price.
\nExcept as otherwise provided in paragraph (e)(ii)(3), no adjustment of the
\nExercise Price shall be made upon the actual issue of such Common Stock or of
\nsuch Convertible Securities upon exercise of such Options or upon the actual
\nissue of such Common Stock upon conversion or exchange of such Convertible
\nSecurities.<\/p>\n<\/p>\n\n\n\n| \n 7<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n (2) Issuance of Convertible Securities<\/u>. In case the Company shall in
\nany manner issue (directly and not by assumption in a merger or otherwise) or
\nsell any Convertible Securities, whether or not the rights to exchange or
\nconvert any such Convertible Securities are immediately exercisable, and the
\nprice per share for which Common Stock is issuable upon such conversion or
\nexchange (determined by dividing (i) the sum (which sum shall constitute the
\napplicable consideration) of (x) the total amount received or receivable by the
\nCompany as consideration for the issue or sale of such Convertible Securities,
\nplus (y) the aggregate amount of additional consideration, if any, payable to
\nthe Company upon the conversion or exchange thereof, by (ii) the total number of
\nshares of Common Stock issuable upon the conversion or exchange of all such
\nConvertible Securities) shall be less than the Exercise Price in effect
\nimmediately prior to the time of such issue or sale, then the total maximum
\nnumber of shares of Common Stock issuable upon conversion or exchange of all
\nsuch Convertible Securities shall be deemed to have been issued for such price
\nper share as of the date of the issue or sale of such Convertible Securities and
\nthereafter shall be deemed to be outstanding for purposes of adjusting the
\nExercise Price, provided that (a) except as otherwise provided in paragraph
\n(e)(ii)(3), no adjustment of the Exercise Price shall be made upon the actual
\nissuance of such Common Stock upon conversion or exchange of such Convertible
\nSecurities and (b) no further adjustment of the Exercise Price shall be made by
\nreason of the issue or sale of Convertible Securities upon exercise of any
\nOptions to purchase any such Convertible Securities for which adjustments of the
\nExercise Price have been made pursuant to the other provisions of paragraph
\n(e). No adjustment pursuant to this Section 9 shall be made if such
\nadjustment would result in an increase of the Exercise Price then in
\neffect<\/u>.<\/p>\n<\/p>\n (3) Change in Option Price or Conversion Rate<\/u>. Upon the happening of
\nany of the following events, namely, if the purchase price provided for in any
\nOption referred to in paragraph (e)(ii)(l) of this Section 9<\/u>, the
\nadditional consideration, if any, payable upon the conversion or exchange of any
\nConvertible Securities referred to in paragraphs (e)(ii)(l) or (e)(ii)(2), or
\nthe rate at which Convertible Securities referred to in paragraphs (e)(ii)(l) or
\n(e)(ii)(2) are convertible into or exchangeable for Common Stock shall change at
\nany time (including, but not limited to, changes under or by reason of
\nprovisions designed to protect against dilution), the Exercise Price in effect
\nat the time of such event shall forthwith be readjusted to the Exercise Price
\nthat would have been in effect at such time had such Options or Convertible
\nSecurities still outstanding provided for such changed purchase price,
\nadditional consideration or conversion rate, as the case may be, at the time
\ninitially granted, issued or sold.<\/p>\n<\/p>\n (4) Stock Dividends<\/u>. Subject to the provisions of this paragraph (e),
\nin case the Company shall declare a dividend or make any other distribution upon
\nany stock of the Company (other than the Common Stock) payable in Common Stock,
\nOptions or Convertible Securities, then any Common Stock, Options or Convertible
\nSecurities, as the case may be, issuable in payment of such dividend or
\ndistribution shall be deemed to have been issued or sold without consideration.\n<\/p>\n<\/p>\n\n\n\n| \n 8<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n (5) Consideration for Stock<\/u>. In case any shares of Common Stock,
\nOptions or Convertible Securities shall be issued or sold for cash, the
\nconsideration received therefor shall be deemed to be the gross amount received
\nby the Company therefor. In case any shares of Common Stock, Options or
\nConvertible Securities shall be issued or sold for a consideration other than
\ncash, the amount of the consideration other than cash received by the Company
\nshall be deemed to be the fair value of such consideration as determined in good
\nfaith by the Board of Directors of the Company. In case any Options shall be
\nissued in connection with the issue and sale of other securities of the Company,
\ntogether comprising one integral transaction in which no specific consideration
\nis allocated to such Options by the parties thereto, such Options shall be
\ndeemed to have been issued for such consideration as determined in good faith by
\nthe Board of Directors of the Company. If Common Stock, Options or Convertible
\nSecurities shall be issued or sold by the Company and, in connection therewith,
\nother Options or Convertible Securities (the “Additional Rights<\/em>“) are
\nissued, then the consideration received or deemed to be received by the Company
\nshall be reduced by the fair market value of the Additional Rights (as
\ndetermined using the Black Scholes Option Pricing Model or another method
\nmutually agreed to by the Company and the Holder). The Board of Directors of the
\nCompany shall respond promptly, in writing, to an inquiry by the Holder as to
\nthe fair market value of the Additional Rights. In the event that the Board of
\nDirectors of the Company and the Holder are unable to agree upon the fair market
\nvalue of the Additional Rights, the Company and the Holder shall jointly select
\nan appraiser who is experienced in such matters. The decision of such appraiser
\nshall be final and conclusive, and the cost of such appraiser shall be borne
\nevenly by the Company and the Holder.<\/p>\n<\/p>\n(6) Record Date<\/u>. In case the Company shall take a record of the
\nholders of its Common Stock for the purpose of entitling them (i) to receive a
\ndividend or other distribution payable in Common Stock, Options or Convertible
\nSecurities or (ii) to subscribe for or purchase Common Stock, Options or
\nConvertible Securities, then such record date shall be deemed to be the date of
\nthe issue or sale of the shares of Common Stock deemed to have been issued or
\nsold upon the declaration of such dividend or the making of such other
\ndistribution or the date of the granting of such right of subscription or
\npurchase, as the case may be.<\/p>\n<\/p>\n (7) Treasury Shares<\/u>. The number of shares of Common Stock outstanding
\nat any given time shall not include shares owned or held by or for the account
\nof the Company or any of its wholly-owned subsidiaries, and the disposition of
\nany such shares (other than the cancellation or retirement thereof) shall be
\nconsidered an issue or sale of Common Stock for the purpose of this paragraph
\n(e).<\/p>\n<\/p>\n (iii) Notwithstanding the foregoing, no adjustment will be made under this
\nparagraph (e) in respect of: (i) the issuance of securities upon the exercise or
\nconversion of any Common Stock or Common Stock Equivalents issued by the Company
\nprior to the date hereof provided that such securities have not been amended
\nsince the date hereof to increase the number of such securities or to decrease
\nthe exercise price, exchange price or conversion price of such securities, (ii)
\nthe grant of options, warrants, Common Stock or other Common Stock Equivalents
\n(but not including any amendments to such instruments) under any duly authorized
\nCompany stock option, restricted stock plan or stock purchase plan whether now
\nexisting or hereafter approved by the Company and its stockholders in the
\nfuture, and the issuance of Common Stock in respect thereof, (iii) the issuance
\nof securities in connection with a Strategic Transaction, or (iv) the issuance
\nof securities in a transaction described in paragraph (a) or (b) of this
\nSection 9<\/u> (collectively, “Excluded Issuances<\/em>“). For purposes of
\nthis paragraph, a “Strategic Transaction<\/em>” means a transaction or
\nrelationship in which (1) the Company issues shares of Common Stock to a Person
\nthat the Board of Directors of the Company determined in good faith is, itself
\nor through its Subsidiaries, an operating company in a business synergistic with
\nthe business of the Company (or a shareholder thereof) and (2) the Company
\nexpects to receive benefits in addition to the investment of funds, but shall
\nnot include (x) a transaction in which the Company is issuing securities
\nprimarily for the purpose of raising capital or to a Person whose primary
\nbusiness is investing in securities or (y) issuances to lenders. The term
\n“Common Stock Equivalents<\/em>” shall mean any securities of the Company
\nwhich would entitle the holder thereof to acquire at any time Common Stock,
\nincluding, without limitation, any debt, preferred stock, rights, options,
\nwarrants or other instrument that is at any time convertible into or
\nexchangeable for, or otherwise entitles the holder thereof to receive, Common
\nStock or other securities that entitle the holder to receive, directly or
\nindirectly, Common Stock.<\/p>\n<\/p>\n\n\n\n| \n 9<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n (f) Calculations<\/u>. All calculations under this Section 9 shall be made
\nto the nearest cent or the nearest share, as applicable. The number of shares of
\nCommon Stock outstanding at any given time shall not include shares owned or
\nheld by or for the account of the Company.<\/p>\n<\/p>\n (g) Notice of Adjustments<\/u>. Upon the occurrence of each adjustment
\npursuant to this Section 9, the Company at its expense will, at the written
\nrequest of the Holder, promptly compute such adjustment, in good faith, in
\naccordance with the terms of this Warrant and prepare a certificate setting
\nforth such adjustment, including a statement of the adjusted Exercise Price and
\nadjusted number or type of Warrant Shares or other securities issuable upon
\nexercise of this Warrant (as applicable), describing the transactions giving
\nrise to such adjustments and showing in reasonable detail the facts upon which
\nsuch adjustment is based. Upon written request, the Company will promptly
\ndeliver a copy of each such certificate to the Holder and to the Company153s
\ntransfer agent.<\/p>\n<\/p>\n (h) Notice of Corporate Events<\/u>. If, while this Warrant is outstanding,
\nthe Company (i) declares a dividend or any other distribution of cash,
\nsecurities or other property in respect of its Common Stock, including, without
\nlimitation, any granting of rights or warrants to subscribe for or purchase any
\ncapital stock of the Company, (ii) authorizes or approves, enters into any
\nagreement contemplating or solicits stockholder approval for any Fundamental
\nTransaction or (iii) authorizes the voluntary dissolution, liquidation or
\nwinding up of the affairs of the Company, then, except if such notice and the
\ncontents thereof shall be deemed to constitute material non-public information,
\nthe Company shall deliver to the Holder a notice of such transaction at least
\nten (10) business days prior to the applicable record or effective date on which
\na Person would need to hold Common Stock in order to participate in or vote with
\nrespect to such transaction; provided, however<\/em>, that the failure to
\ndeliver such notice or any defect therein shall not affect the validity of the
\ncorporate action required to be described in such notice.<\/p>\n<\/p>\n10. Payment of Exercise Price<\/u>. The Holder shall pay the Exercise Price
\nin immediately available funds; provided, however<\/em>, that if, on any
\nExercise Date there is not an effective Registration Statement registering, or
\nno current prospectus available for, the resale of the Warrant Shares by the
\nHolder, then the Holder may, in its sole discretion, satisfy its obligation to
\npay the Exercise Price through a “cashless exercise”, in which event the Company
\nshall issue to the Holder the number of Warrant Shares determined as follows:\n<\/p>\n<\/p>\nX = Y [(A-B)\/A]<\/p>\n<\/p>\n where:<\/p>\n<\/p>\n \n\n\n| \n 10<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n X = the number of Warrant Shares to be issued to the Holder.<\/p>\n<\/p>\n Y = the total number of Warrant Shares with respect to which this Warrant is
\nbeing exercised.<\/p>\n<\/p>\n A = the average of the Closing Bid Price of the shares of Common Stock (as
\nreported by Bloomberg Financial Markets) for the five consecutive Trading Days
\nending on the date immediately preceding the Exercise Date.<\/p>\n<\/p>\n B = the Exercise Price then in effect for the applicable Warrant Shares at
\nthe time of such exercise.<\/p>\n<\/p>\n For purposes of this Warrant, “Closing Bid Price<\/em>” means, for any
\nsecurity as of any date, the last reported closing bid price for such security
\non the Trading Market for such security, as reported by Bloomberg Financial
\nMarkets, or, if such Trading Market begins to operate on an extended hours basis
\nand does not designate the closing bid price, then the last bid price of such
\nsecurity prior to 4:00 p.m., New York City time, as reported by Bloomberg
\nFinancial Markets, or if the foregoing do not apply, the last closing price of
\nsuch security in the over-the-counter market on the electronic bulletin board
\nfor such security as reported by Bloomberg Financial Markets, or, if no closing
\nbid price is reported for such security by Bloomberg Financial Markets, the
\naverage of the bid prices of any market makers for such security as reported in
\nthe “pink sheets” by Pink Sheets LLC. If the Closing Bid Price cannot be
\ncalculated for a security on a particular date on any of the foregoing bases,
\nthe Closing Bid Price of such security on such date shall be the fair market
\nvalue as mutually determined by the Company and the Holder. If the Company and
\nthe Holder are unable to agree upon the fair market value of such security, then
\nthe Board of Directors of the Company shall use its good faith judgment to
\ndetermine the fair market value. The Board of Directors153 determination shall be
\nbinding upon all parties absent demonstrable error. All such determinations
\nshall be appropriately adjusted for any stock dividend, stock split, stock
\ncombination or other similar transaction during the applicable calculation
\nperiod.<\/p>\n<\/p>\nFor purposes of Rule 144, it is intended, understood and acknowledged that
\nthe provisions above permitting “cashless exercise” are intended, in part, to
\nensure that a full or partial exchange of this Warrant pursuant to such
\nprovisions will qualify as a conversion, within the meaning of paragraph
\n(d)(3)(ii) of Rule 144, and the holding period for the Warrant Shares shall be
\ndeemed to have commenced as to such original Holder, on the Original Issue Date.\n<\/p>\n<\/p>\n 11. [Reserved<\/u>.]<\/p>\n<\/p>\n 12. No Fractional Shares<\/u>. No fractional Warrant Shares will be issued
\nin connection with any exercise of this Warrant. In lieu of any fractional
\nshares that would otherwise be issuable, the number of Warrant Shares to be
\nissued shall be rounded down to the next whole number and the Company shall pay
\nthe Holder in cash the fair market value (based on the Closing Bid Price) for
\nany such fractional shares.<\/p>\n<\/p>\n 13. Notices<\/u>. Any and all notices or other communications or deliveries
\nhereunder (including, without limitation, any Exercise Notice) shall be in
\nwriting and shall be deemed given and effective on the earliest of (i) the date
\nof transmission, if such notice or communication is delivered via facsimile at
\nthe facsimile number specified in the Purchase Agreement prior to 5:30 p.m., New
\nYork City time, on a Trading Day, (ii) the next Trading Day after the date of
\ntransmission, if such notice or communication is delivered via facsimile at the
\nfacsimile number specified in the Purchase Agreement on a day that is not a
\nTrading Day or later than 5:30 p.m., New York City time, on any Trading Day,
\n(iii) the Trading Day following the date of mailing, if sent by nationally
\nrecognized overnight courier service specifying next business day delivery, or
\n(iv) upon actual receipt by the Person to whom such notice is required to be
\ngiven, if by hand delivery. The address and facsimile number of a Person for
\nsuch notices or communications shall be as set forth in the Purchase Agreement
\nunless changed by such Person by two Trading Days153 prior notice to the other
\nPerson(s) in accordance with this Section 13.<\/p>\n<\/p>\n\n\n\n| \n 11<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n 14. Warrant Agent<\/u>. The Company shall serve as warrant agent under this
\nWarrant. Upon 15 days153 notice to the Holder, the Company may appoint a new
\nwarrant agent. Any corporation into which the Company or any new warrant agent
\nmay be merged or any corporation resulting from any consolidation to which the
\nCompany or any new warrant agent shall be a party or any corporation to which
\nthe Company or any new warrant agent transfers substantially all of its
\ncorporate trust or shareholders services business shall be a successor warrant
\nagent under this Warrant without any further act. Any such successor warrant
\nagent shall promptly cause notice of its succession as warrant agent to be
\nmailed (by first class mail, postage prepaid) to the Holder at the Holder153s last
\naddress as shown on the Warrant Register.<\/p>\n<\/p>\n 15. Miscellaneous<\/u>.<\/p>\n<\/p>\n (a) No Rights as a Stockholder<\/u>.The Holder, solely in such Person’s
\ncapacity as a holder of this Warrant, shall not be entitled to vote or receive
\ndividends or be deemed the holder of share capital of the Company for any
\npurpose, nor shall anything contained in this Warrant be construed to confer
\nupon the Holder, solely in such Person’s capacity as the Holder of this Warrant,
\nany of the rights of a stockholder of the Company or any right to vote, give or
\nwithhold consent to any corporate action (whether any reorganization, issue of
\nstock, reclassification of stock, consolidation, merger, amalgamation,
\nconveyance or otherwise), receive notice of meetings, receive dividends or
\nsubscription rights, or otherwise, prior to the issuance to the Holder of the
\nWarrant Shares which such Person is then entitled to receive upon the due
\nexercise of this Warrant. In addition, nothing contained in this Warrant shall
\nbe construed as imposing any liabilities on the Holder to purchase any
\nsecurities, whether such liabilities are asserted by the Company or by creditors
\nof the Company.<\/p>\n<\/p>\n (b) Authorized Shares<\/u>. (i) The Company will take all such reasonable
\naction as may be necessary to assure that such Warrant Shares may be issued as
\nprovided herein without violation of any applicable law or regulation or of any
\nrequirements of the Trading Market upon which the Common Stock may be listed.\n<\/p>\n<\/p>\n (ii) Except and to the extent as waived or consented to by the Holder, the
\nCompany shall not by any action, including, without limitation, amending its
\ncertificate of incorporation or through any reorganization, transfer of assets,
\nconsolidation, merger, dissolution, issue or sale of securities or any other
\nvoluntary action, avoid or seek to avoid the observance or performance of any of
\nthe terms of this Warrant, but will at all times in good faith assist in the
\ncarrying out of all such terms and in the taking of all such actions as may be
\nnecessary or appropriate to protect the rights of Holder as set forth in this
\nWarrant against impairment. Without limiting the generality of the foregoing,
\nthe Company will (a) not increase the par value of any Warrant Shares above the
\namount payable therefor upon such exercise immediately prior to such increase in
\npar value, (b) take all such action as may be necessary or appropriate in order
\nthat the Company may validly and legally issue fully paid and nonassessable
\nWarrant Shares upon the exercise of this Warrant, and (c) use commercially
\nreasonable efforts to obtain all such authorizations, exemptions or consents
\nfrom any public regulatory body having jurisdiction thereof as may be necessary
\nto enable the Company to perform its obligations under this Warrant.<\/p>\n<\/p>\n \n\n\n| \n 12<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n (iii) Before taking any action which would result in an adjustment in the
\nnumber of Warrant Shares for which this Warrant is exercisable or in the
\nExercise Price, the Company shall obtain all such authorizations or exemptions
\nthereof, or consents thereto, as may be necessary from any public regulatory
\nbody or bodies having jurisdiction thereof.<\/p>\n<\/p>\n (c) Successors and Assigns<\/u>. Subject to the restrictions on transfer
\nset forth in this Warrant, and compliance with applicable securities laws, this
\nWarrant may be assigned by the Holder. This Warrant may not be assigned by the
\nCompany without the written consent of the Holder except to a successor in the
\nevent of a Fundamental Transaction. This Warrant shall be binding on and inure
\nto the benefit of the Company and the Holder and their respective successors and
\nassigns. Subject to the preceding sentence, nothing in this Warrant shall be
\nconstrued to give to any Person other than the Company and the Holder any legal
\nor equitable right, remedy or cause of action under this Warrant.<\/p>\n<\/p>\n (d) Amendment and Waiver<\/u>. Except as otherwise provided herein, the
\nprovisions of the Warrants may be amended and the Company may take any action
\nherein prohibited, or omit to perform any act herein required to be performed by
\nit, only if the Company has obtained the written consent of the Holder.<\/p>\n<\/p>\n (e) Acceptance<\/u>. Receipt of this Warrant by the Holder shall constitute
\nacceptance of and agreement to all of the terms and conditions contained herein.\n<\/p>\n<\/p>\n (f) Governing Law; Jurisdiction<\/u>. ALL QUESTIONS CONCERNING THE
\nCONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS WARRANT SHALL BE
\nGOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE
\nOF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF. EACH
\nOF THE COMPANY AND THE HOLDER HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE
\nJURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK,
\nBOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
\nCONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED
\nHEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE TRANSACTION
\nDOCUMENTS), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT,
\nACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE
\nJURISDICTION OF ANY SUCH COURT. EACH OF THE COMPANY AND THE HOLDER HEREBY
\nIRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING
\nSERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA
\nREGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY)
\nTO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THE PURCHASE
\nAGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT
\nSERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED
\nTO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.
\nEACH OF THE COMPANY AND THE HOLDER HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY.\n<\/p>\n<\/p>\n (g) Headings<\/u>. The headings herein are for convenience only, do not
\nconstitute a part of this Warrant and shall not be deemed to limit or affect any
\nof the provisions hereof.<\/p>\n<\/p>\n\n\n\n| \n 13<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n (h) Severability<\/u>. In case any one or more of the provisions of this
\nWarrant shall be invalid or unenforceable in any respect, the validity and
\nenforceability of the remaining terms and provisions of this Warrant shall not
\nin any way be affected or impaired thereby, and the Company and the Holder will
\nattempt in good faith to agree upon a valid and enforceable provision which as
\nclosely as possible reflects the intent of the parties hereto, and upon so
\nagreeing, shall incorporate such substitute provision in this Warrant.<\/p>\n<\/p>\n\n\n\n| \n 14<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
\nby its authorized officer as of the date first indicated above.<\/p>\n<\/p>\n \n\n\n| <\/td>\n | \n TRANSGENOMIC, INC.<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | \n By:<\/p>\n<\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | \n Name: Craig J. Tuttle<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | \n Title: President\/Chief Executive Officer<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n \n\n\n| <\/td>\n<\/tr>\n | \n| <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n SCHEDULE 1<\/u><\/p>\n \n TRANSGENOMIC, INC.<\/p>\n \n FORM OF EXERCISE NOTICE<\/p>\n \n [To be executed by the Holder to purchase shares of Common
\nStock under the Warrant]<\/p>\n \n Ladies and Gentlemen:<\/p>\n<\/p>\n (1) The undersigned is the Holder of Warrant No. __________ (the “Warrant”)
\nissued by Transgenomic, Inc., a Delaware corporation (the “Company”).
\nCapitalized terms used herein and not otherwise defined herein have the
\nrespective meanings set forth in the Warrant.<\/p>\n<\/p>\n (2) The undersigned hereby exercises its right to purchase __________ Warrant
\nShares pursuant to the Warrant.<\/p>\n<\/p>\n (3) The Holder intends that payment of the Exercise Price shall be made as
\n(check one):<\/p>\n<\/p>\n \n\n\n| <\/td>\n | \n<\/td>\n | \n Cash Exercise<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | \n<\/td>\n | \n “Cashless Exercise” under Section 10 of the Warrant<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n (4) If the Holder has elected a Cash Exercise, the Holder shall pay the sum
\nof $_______ in immediately available funds to the Company in accordance with the
\nterms of the Warrant.<\/p>\n<\/p>\n (5) Pursuant to this Exercise Notice, the Company shall deliver to the Holder
\nWarrant Shares determined in accordance with the terms of the Warrant. Please
\nissue (check applicable box):<\/p>\n<\/p>\n \n\n\n| <\/td>\n | \n<\/td>\n | \n A certificate of certificates representing the Holder Warrant Shares in the
\nname of the undersigned or in such other name as is specified below:<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n| <\/td>\n | \n<\/td>\n | \n The Holder Warrant Shares in electronic form to the following account:<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n \n\n\n| <\/td>\n | \n Name and Contact for Broker:<\/p>\n<\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n| <\/td>\n | \n Broker no:<\/p>\n<\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n| <\/td>\n | \n Account no:<\/p>\n<\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n| <\/td>\n | \n Account holder:<\/p>\n<\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n| <\/td>\n<\/tr>\n | \n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n| \n Dated:_______________, _____<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n<\/tr>\n | \n| \n Name of Holder: ___________________________<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n \n\n\n| \n By:<\/p>\n<\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| \n Name:<\/p>\n<\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| \n Title:<\/p>\n<\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n (Signature must conform in all respects to name of Holder as specified on the
\nface of the Warrant)<\/p>\n<\/p>\n \n\n\n| <\/td>\n<\/tr>\n | \n| <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n SCHEDULE 2<\/u><\/p>\n \n TRANSGENOMIC, INC.<\/p>\n \n FORM OF ASSIGNMENT<\/p>\n \n [To be completed and executed by the Holder only upon transfer
\nof the Warrant]<\/p>\n \n FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
\n(the “Transferee”) the right represented by the within Warrant to purchase
\nshares of Common Stock of Transgenomic, Inc., a Delaware corporation (the
\n“Company”) to which the within Warrant relates and appoints attorney to transfer
\nsaid right on the books of the Company with full power of substitution in the
\npremises. In connection therewith, the undersigned represents, warrants,
\ncovenants and agrees to and with the Company that:<\/p>\n<\/p>\n \n\n\n| \n (a)<\/p>\n<\/td>\n | \n the offer and sale of the Warrant contemplated hereby is being made in
\ncompliance with Section 4(1) of the United States Securities Act of 1933, as
\namended (the “Securities Act”), or another valid exemption from the registration
\nrequirements of Section 5 of the Securities Act and in compliance with all
\napplicable securities laws of the states of the United States;<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n<\/tr>\n | \n| \n (b)<\/p>\n<\/td>\n | \n the undersigned has not offered to sell the Warrant by any form of general
\nsolicitation or general advertising, including, but not limited to, any
\nadvertisement, article, notice or other communication published in any
\nnewspaper, magazine or similar media or broadcast over television or radio, and
\nany seminar or meeting whose attendees have been invited by any general
\nsolicitation or general advertising;<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n<\/tr>\n | \n| \n (c)<\/p>\n<\/td>\n | \n the undersigned has read the Transferee153s investment letter included
\nherewith, and to its actual knowledge, the statements made therein are true and
\ncorrect; and<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n<\/tr>\n | \n| \n (d)<\/p>\n<\/td>\n | \n the undersigned understands that the Company may condition the transfer of
\nthe Warrant contemplated hereby upon the delivery to the Company by the
\nundersigned or the Transferee, as the case may be, of a written opinion of
\ncounsel (which opinion shall be in form, substance and scope customary for
\nopinions of counsel in comparable transactions) to the effect that such transfer
\nmay be made without registration under the Securities Act and under applicable
\nsecurities laws of the states of the United States.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n \n\n\n| \n Dated: ,<\/p>\n<\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | \n (Signature must conform in all respects to name of holder as specified on the
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