0001140361-17-015566.txt : 20170411 0001140361-17-015566.hdr.sgml : 20170411 20170411163130 ACCESSION NUMBER: 0001140361-17-015566 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20170411 DATE AS OF CHANGE: 20170411 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: TRANSGENOMIC INC CENTRAL INDEX KEY: 0001043961 STANDARD INDUSTRIAL CLASSIFICATION: LABORATORY ANALYTICAL INSTRUMENTS [3826] IRS NUMBER: 911789357 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-59565 FILM NUMBER: 17756259 BUSINESS ADDRESS: STREET 1: 12325 EMMET ST CITY: OMAHA STATE: NE ZIP: 68164 BUSINESS PHONE: 4027385480 MAIL ADDRESS: STREET 1: 12325 EMMET STREET CITY: OMAHA STATE: NE ZIP: 68164 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: KIRK RANDAL J CENTRAL INDEX KEY: 0001091823 FILING VALUES: FORM TYPE: SC 13D/A MAIL ADDRESS: STREET 1: 1881 GROVE AVENUE CITY: RADFORD STATE: VA ZIP: 24141 SC 13D/A 1 formsc13da.htm SC 13D/A
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC  20549
 
 
SCHEDULE 13D
(Amendment No. 5)*
Under the Securities Exchange Act of 1934

TRANSGENOMIC, INC.
(Name of Issuer)
 
Common Stock
(Title of Class of Securities)

89365K206
(CUSIP Number)

Third Security, LLC
1881 Grove Avenue
Radford, Virginia 24141
Attention: Marcus E. Smith, Esq.
(540) 633-7900
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

Copy to:
John Owen Gwathmey, Esq.
David I. Meyers, Esq.
Troutman Sanders LLP
Troutman Sanders Building
1001 Haxall Point
Richmond, Virginia 23219
(804) 697-1239

April 7, 2017
(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box   r .
 
NOTE:  Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits.  See §240.13d-7 for other parties to whom copies are to be sent.
 
* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
 
The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
 
CUSIP No. 89365K206
Page 2 of 5
 
This Amendment No. 5 (this “Amendment”) amends and supplements the Statement on Schedule 13D, dated December 29, 2010 and filed on January 11, 2011, as amended by Amendment No. 1 dated February 3, 2012 and filed on February 7, 2012, as amended by Amendment No. 2 dated January 25, 2013 and filed on January 31, 2013, as amended by Amendment No. 3 dated March 5, 2014 and filed on March 7, 2014, and as amended by Amendment No. 4 dated January 6, 2016 and filed on January 12, 2016 (the “Original Schedule 13D”), relating to the Common Stock, par value $0.01 per share (the “Common Stock”), of Transgenomic, Inc., a Delaware corporation (the “Company”).  Mr. Randal J. Kirk (“Mr. Kirk”), Third Security, LLC (“Third Security”), a Virginia limited liability company that is managed by Mr. Kirk, Third Security Senior Staff 2008 LLC (“Senior Staff”), a Virginia limited liability company that is managed by Third Security, Third Security Staff 2010 LLC (“Staff 2010”), a Virginia limited liability company that is managed by Third Security, Third Security Incentive 2010 LLC (“Incentive”), a Virginia limited liability company that is managed by Third Security, and Third Security Staff 2014 LLC (“Staff 2014” and, together with Senior Staff, Staff 2010 and Incentive, the “Investors,” and the Investors together with Mr. Kirk and Third Security, the “Reporting Persons”), are filing this Amendment to disclose the entering into of option agreements related to prospective financings involving the Company.

Except as set forth below, there are no changes to the information set forth in the Original Schedule 13D.
 
Item 4.
Purpose of Transaction.
 
Item 4 of the Original Schedule 13D is hereby amended and supplemented as follows:
 
The information set forth in Items 3 and 6 is incorporated herein by reference.
 
On April 7, 2017, the Reporting Persons entered into call option agreements with BV Advisory Partners, LLC and Kuzven Precipio Investor, LLC, which agreements are filed herewith as Exhibit 23 and Exhibit 24, respectively, and incorporated herein by reference (the “Call Option Agreements”) pursuant to which the Reporting Persons granted a call option to each party to purchase an aggregate of 7,900,000 shares of Company Common Stock from the Reporting Persons for $1.00 in the event that certain conditions set forth in the Call Option Agreements are satisfied relating to a proposed bridge financing transaction and prospective merger between New Haven Labs Inc., a wholly owned subsidiary of the Company, and Precipio Diagnostics, LLC (the “Merger”).
 
Item 6.
Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.
 
Item 6 of the Original Schedule 13D is hereby amended and supplemented to include the responses in Item 4 above.

Item 7.
Material to be Filed as Exhibits.

Item 7 of the Original Schedule 13D is hereby amended and supplemented by the following:
 
CUSIP No. 89365K206
Page 3 of 5
 
Exhibit 23
Call Option Agreement by and between Third Security Senior Staff 2008 LLC, Third Security Staff 2010 LLC, Third Security Incentive 2010 LLC, Third Security Staff 2014 LLC and BV Advisory Partners, LLC dated April 7, 2017
 
Exhibit 24
Call Option Agreement by and between Third Security Senior Staff 2008 LLC, Third Security Staff 2010 LLC, Third Security Incentive 2010 LLC, Third Security Staff 2014 LLC and Kuzven Precipio Investor, LLC dated April 7, 2017
 
Exhibit 25
Joint Filing Agreement, dated as of April 11, 2017, by and among Randal J. Kirk, Third Security, LLC, Third Security Senior Staff 2008 LLC, Third Security Staff 2010 LLC, Third Security Incentive 2010 LLC and Third Security Staff 2014 LLC
 
CUSIP No. 89365K206
Page 4 of 5
 
SIGNATURES
 
After reasonable inquiry and to the best of their knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct.
 
Date:  April 11, 2017
  
   
 
/s/ Randal J. Kirk
 
Randal J. Kirk
 
 
THIRD SECURITY, LLC
     
 
By:
/s/ Randal J. Kirk
   
Randal J. Kirk
   
Manager
     
 
THIRD SECURITY SENIOR STAFF 2008 LLC
     
 
By:
/s/ Randal J. Kirk
   
Randal J. Kirk
   
Manager
     
 
THIRD SECURITY STAFF 2010 LLC
     
 
By:
/s/ Randal J. Kirk
   
Randal J. Kirk
   
Manager
     
 
THIRD SECURITY INCENTIVE 2010 LLC
     
 
By:
/s/ Randal J. Kirk
   
Randal J. Kirk
   
Manager
     
 
THIRD SECURITY STAFF 2014 LLC
     
 
By:
/s/ Randal J. Kirk
   
Randal J. Kirk
   
Manager
 
EXHIBIT INDEX
 
Exhibit 1
Series A Convertible Preferred Stock Purchase Agreement, dated December 29, 2010, by and among Transgenomic, Inc. (the “Company”), Third Security Senior Staff 2008 LLC, Third Security Staff 2010 LLC, and Third Security Incentive 2010 LLC (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K, dated December 28, 2010, and incorporated herein by reference)
 
Exhibit 2
Form of Warrant (filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K, dated December 28, 2010, and incorporated herein by reference)
 
Exhibit 3
Certificate of Designation of Series A Convertible Preferred Stock dated as of December 28, 2010 (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K, dated December 28, 2010, and incorporated herein by reference)
 
Exhibit 4
Registration Rights Agreement, dated December 29, 2010, by and among the Company, Third Security Senior Staff 2008 LLC, Third Security Staff 2010 LLC, and Third Security Incentive 2010 LLC (filed as Exhibit 4.3 to the Company’s Current Report on Form 8-K, dated December 28, 2010, and incorporated herein by reference)
 
Exhibit 5
Joint Filing Agreement, dated as of January 10, 2011, by and among Randal J. Kirk, Third Security Senior Staff 2008 LLC, Third Security Staff 2010 LLC, and Third Security Incentive 2010 LLC (filed with Original Schedule 13D)
 
Exhibit 6
Convertible Promissory Note Purchase Agreement by and among Transgenomic, Inc.; Third Security Senior Staff 2008 LLC; Third Security Staff 2010 LLC; and Third Security Incentive 2010 LLC dated December 30, 2011 (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, dated January 6, 2012, and incorporated herein by reference)
 
Exhibit 7
Convertible Promissory Note by and between Transgenomic, Inc. and Third Security Senior Staff 2008 LLC dated December 30, 2011 (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K, dated January 6, 2012, and incorporated herein by reference)
 
Exhibit 8
Convertible Promissory Note by and between Transgenomic, Inc. and Third Security Staff 2010 LLC dated December 30, 2011 (filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K, dated January 6, 2012, and incorporated herein by reference)
 
Exhibit 9
Convertible Promissory Note by and between Transgenomic, Inc. and Third Security Incentive 2010 LLC dated December 30, 2011 (filed as Exhibit 10.4 to the Company’s Current Report on Form 8-K, dated January 6, 2012, and incorporated herein by reference)
 
Exhibit 10
Form of Warrant issued by Transgenomic, Inc. to Third Security Senior Staff 2008 LLC; Third Security Staff 2010 LLC; and Third Security Incentive 2010 LLC on February 3, 2012 (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K, dated February 7, 2012, and incorporated herein by reference)
 
Exhibit 11
Registration Rights Agreement by and among Transgenomic, Inc., certain investors and the Investors (filed as Exhibit 10.4 to the Company’s Current Report on Form 8-K, dated February 7, 2012, and incorporated herein by reference)
 
Exhibit 12
Joint Filing Agreement, dated as of February 7, 2012, by and among Randal J. Kirk, Third Security Senior Staff 2008 LLC, Third Security Staff 2010 LLC, and Third Security Incentive 2010 LLC (filed with Original Schedule 13D)
 
Exhibit 13
Securities Purchase Agreement by and among Transgenomic, Inc. certain investors and the Investors, dated January 25, 2013 (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K/A, dated January 30, 2013, and incorporated herein by reference)
 
Exhibit 14
Form of Warrant issued by Transgenomic, Inc. to certain investors and the Investors (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K/A, dated January 30, 2013, and incorporated herein by reference)
 
Exhibit 15
Registration Rights Agreement by and among Transgenomic, Inc., certain investors and the Investors (filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K/A, dated January 30, 2013, and incorporated herein by reference)
 
Exhibit 16
Joint Filing Agreement, dated as of January 31, 2013, by and among Randal J. Kirk, Third Security, LLC, Third Security Senior Staff 2008 LLC, Third Security Staff 2010 LLC, and Third Security Incentive 2010 LLC
 
Exhibit 17
Securities Purchase Agreement by and among the Company and the Investors, dated March 5, 2014 (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K/A, dated March 5, 2014 and filed on March 6, 2014, and incorporated herein by reference)
 
Exhibit 18
Registration Rights Agreement by and among the Company and the Investors (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K/A, dated March 5, 2014 and filed on March 6, 2014, and incorporated herein by reference)
 
Exhibit 19
Joint Filing Agreement, dated as of March 7, 2014, by and among Randal J. Kirk, Third Security, LLC, Third Security Senior Staff 2008 LLC, Third Security Staff 2010 LLC, Third Security Incentive 2010 LLC and Third Security Staff 2014 LLC
 
Exhibit 20
Securities Purchase Agreement by and among the Company and the Investors, dated January 6, 2016 (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, dated January 6, 2016 and filed on January 11, 2016, and incorporated herein by reference)
 
Exhibit 21
Registration Rights Agreement by and among the Company and the Investors (filed as Exhibit 4.1 to the Company’s Current Report on Form 8, dated January 6, 2016 and filed on January 11, 2016, and incorporated herein by reference)
 
Exhibit 22
Joint Filing Agreement, dated as of January 12, 2016, by and among Randal J. Kirk, Third Security, LLC, Third Security Senior Staff 2008 LLC, Third Security Staff 2010 LLC, Third Security Incentive 2010 LLC and Third Security Staff 2014 LLC
 
Exhibit 23
Call Option Agreement by and between Third Security Senior Staff 2008 LLC, Third Security Staff 2010 LLC, Third Security Incentive 2010 LLC, Third Security Staff 2014 LLC and BV Advisory Partners, LLC dated April 7, 2017
 
Exhibit 24
Call Option Agreement by and between Third Security Senior Staff 2008 LLC, Third Security Staff 2010 LLC, Third Security Incentive 2010 LLC, Third Security Staff 2014 LLC and Kuzven Precipio Investor, LLC dated April 7, 2017
 
Exhibit 25
Joint Filing Agreement, dated as of April 11, 2017, by and among Randal J. Kirk, Third Security, LLC, Third Security Senior Staff 2008 LLC, Third Security Staff 2010 LLC, Third Security Incentive 2010 LLC and Third Security Staff 2014 LLC
 
 
 EX-25 2 ex25.htm EXHIBIT 25
Exhibit 25
Joint Filing Agreement
 
In accordance with Rule 13d-1(k) promulgated under the Securities Exchange Act of 1934, as amended, the persons named below agree to the joint filing on behalf of each of them a Statement on Schedule 13D (including amendments thereto) with regard to the common stock of Transgenomic, Inc., and further agree that this Joint Filing Agreement be included as an exhibit to such joint filings. In evidence thereof, the undersigned, being duly authorized, hereby execute this agreement as of the 11th day of April, 2017.
 
Date:  April 11, 2017
  
   
 
/s/ Randal J. Kirk
 
Randal J. Kirk
 
 
THIRD SECURITY, LLC
     
 
By:
/s/ Randal J. Kirk
   
Randal J. Kirk
   
Manager
     
 
THIRD SECURITY SENIOR STAFF 2008 LLC
     
 
By:
/s/ Randal J. Kirk
   
Randal J. Kirk
   
Manager
     
 
THIRD SECURITY STAFF 2010 LLC
     
 
By:
/s/ Randal J. Kirk
   
Randal J. Kirk
   
Manager
     
 
THIRD SECURITY INCENTIVE 2010 LLC
     
 
By:
/s/ Randal J. Kirk
   
Randal J. Kirk
   
Manager
     
 
THIRD SECURITY STAFF 2014 LLC
     
 
By:
/s/ Randal J. Kirk
   
Randal J. Kirk
   
Manager
 
 
 EX-99.23 3 ex99_23.htm EXHIBIT 99.23
Exhibit 23

CALL OPTION AGREEMENT

This Call Option Agreement (this “Agreement”), is made and entered as of April 7, 2017, by and among BV Advisory Partners, LLC (the “Optionee”) and Third Security Senior Staff 2008 LLC, Third Security Staff 2010 LLC, Third Security Incentive 2010 LLC and Third Security Staff 2014 LLC (collectively, the “Stockholders”)

WHEREAS, the Optionee desires to have the right to purchase certain shares (the “Shares”) of Transgenomic, Inc., a Delaware corporation (the “Company”),  common stock (the “Common Stock”) held by the Stockholders as set forth on Schedule I attached hereto, and the Stockholders desires to grant such right to the Optionee, pursuant to the terms and conditions set forth herein;

WHEREAS, on October 12, 2016, the Company entered into an Agreement and Plan of Merger (as amended, the “Merger Agreement”) with New Haven Labs Inc. (“Merger Sub”), which is a wholly owned subsidiary of the Borrower, and Precipio Diagnostics, LLC, (“Precipio”); pursuant to which at the effective time of the merger (the “Merger”), Merger Sub will merge with and into Precipio, with Precipio as the surviving entity;

WHEREAS, the consummation of a New Preferred Stock Financing (as defined in the Merger Agreement) in accordance with the terms and conditions set forth in the New Preferred Stock Term Sheet (as defined in the Merger Agreement) is a condition to the Closing of the Merger (as defined in the Merger Agreement); and

WHEREAS, in order to have sufficient funds to reach the Closing of the Merger, immediately prior hereto, the Company is entering into a bridge loan financing pursuant to which the Company is receiving gross proceeds of $1,250,000 (“Bridge Loan Financing”).

NOW, THEREFORE, in consideration of the foregoing and the mutual and dependent covenants hereinafter set forth, the parties agree as follows:

1.             Grant of Call Option.

(a)           Conditions to the Call Option.

(i)          With respect to an aggregate of 1,975,000 shares designated as the First Tranche Shares in the amounts designated for each Stockholder as set forth on Schedule 1 (the “First Tranche Shares”), the grant of this Call Option  is conditioned on the consummation of the Bridge Loan Financing on the terms and conditions set forth in the New Bridge Loan Term Sheet.
 
EXECUTION VERSION
 
(ii)         With respect to an aggregate of 5,925,000 shares designated as the Second Tranche Shares in the amounts designated for each Stockholder as set forth on Schedule 1 (the “Second Tranche Shares”),  this Call Option is conditioned on (1) the Closing of the Merger in accordance with its terms, (2) the consummation of the New Preferred Stock Financing and (3) the conversion of $3.0 million of outstanding secured debt held by certain of the Stockholders into shares of preferred stock of the Company with terms and conditions at least as favorable to such Stockholders as the terms and conditions set forth in the New Preferred Stock Term Sheet. For purposes of this Section1(a), the New Preferred Stock Financing shall be deemed to have been consummated and this condition satisfied if the Investors (as defined in the New Preferred Stock Financing Term Sheet) are ready, willing and able to consummate and fund the New Preferred Stock Financing (subject to such changes as may be necessary for such preferred stock to be treated as equity on the Company’s balance sheet) in an amount not less $5.0 million and the Company and Precipio do not consummate such New Preferred Stock Financing or another financing led by the Optionee pursuant to which the Company receives not less than $5.0 million in cash with terms and conditions at least as favorable to the Company as the terms and conditions set forth in the New Preferred Stock Term Sheet (subject to such changes as may be necessary for such preferred stock to be treated as equity on the Company’s balance sheet) and the Closing of the Merger occurs.  For the avoidance of doubt, the consummation of an Alternative Financing (as defined in the Merger Agreement) shall not satisfy the conditions set forth in this Section 1(a)(ii).

(iii)        If the conditions set forth in this Section 1(a) have not been satisfied on or before the earlier of (i) the Closing of the Merger or (ii) the termination of the Merger Agreement in accordance with its terms, then this Call Option shall automatically terminate and be null and void ab initio.

(b)           Right to Purchase. Subject to the satisfaction in full of the conditions set forth in Section 1(a)(i) above with respect to the First Tranche Shares and Section 1(a)(ii) above with respect to the Second Tranche Shares, and the other terms and conditions of this Agreement, at any time on or after the date of the Closing of the Merger the Optionee shall have the right (the “Call Right”), but not the obligation, to cause the Stockholders to sell that number of First Tranche Shares or Second Tranche Shares, as applicable, opposite each Stockholder’s name on Schedule 1 attached hereto, in an aggregate amount for all such Stockholders equal to 7,900,000 shares, to the Optionee for an aggregate purchase price of $1.00 (the “Call Purchase Price”).  The Call Right shall expire on December 31, 2017.

(c)           Procedures.

(i)          If the Optionee desires to purchase the Shares pursuant to Section 1, the Optionee shall deliver to the Stockholders a written, unconditional, and irrevocable notice (the “Call Exercise Notice”) exercising the Call Right.

(ii)         The Stockholders shall at the closing of any purchase consummated pursuant to this Section 1(c), represent and warrant to the Optionee that (A) the Stockholders have full right, title and interest in and to the Shares, (B) the Stockholders have all the necessary power and authority and have taken all necessary action to sell such Shares as contemplated by this Section 1, and (C) the Shares are free and clear of any and all mortgages, pledges, security interests, options, rights of first offer, encumbrances or other restrictions or limitations of any nature whatsoever other than those arising as a result of or under the terms of this Agreement.
 
2
EXECUTION VERSION
 
(iii)        Subject to Section 1(d) below, the closing of any sale of Shares pursuant to this Section 1 shall take place no later than five business days following receipt by the Stockholders of the Call Exercise Notice (the “Call Right Closing Date”).

(d)           Consummation of Sale. The Optionee will pay the Call Purchase Price for the Shares by check or by wire transfer of immediately available funds on the Call Right Closing Date.

(e)           Cooperation. The Stockholders shall take all actions as may be commercially reasonably necessary to consummate the sale contemplated by this Section 1, including, without limitation, entering into agreements and delivering certificates and instruments and consents as may be deemed necessary or appropriate.

(f)            Closing. At the closing of any sale and purchase pursuant to this Section 1, the Stockholders shall deliver to the Optionee a certificate or certificates representing the Shares to be sold (if any), accompanied by stock powers and all necessary stock transfer taxes paid and stamps affixed, if necessary, against receipt of the Call Purchase Price.

2.             Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent, if to the Stockholders at 1881 Grove Avenue, Radford, Virginia 24141, and, if to the Optionee at 95 Wildwood Road, Ridgewood, N.J. 07450 (or at such other address for a party as shall be specified in a notice given in accordance with this Section 2).

3.             Entire Agreement. This Agreement constitutes the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter.

4.             Successor and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. This Agreement shall be freely assignable by the Optionee.

5.             No Third-Party Beneficiaries. This Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other person any legal or equitable right, benefit or remedy of any nature whatsoever, under or by reason of this Agreement.
 
3
EXECUTION VERSION
 
6.             Headings. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.

7.             Amendment and Modification; Waiver. This Agreement may only be amended, modified or supplemented by an agreement in writing signed by each party hereto. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. Except as otherwise set forth in this Agreement, no failure to exercise, or delay in exercising, any rights, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

8.             Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

9.             Governing Law; Jurisdiction.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to any choice or conflict of laws provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the Laws of any jurisdiction other than the State of Delaware.

10.           Waiver of Jury Trial. Each party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this Agreement or the transactions contemplated hereby. Each party to this Agreement certifies and acknowledges that (a) no representative of any other party has represented, expressly or otherwise, that such other party would not seek to enforce the foregoing waiver in the event of a legal action; (b) such party has considered the implications of this waiver; (c) such party makes this waiver voluntarily; and (d) such party has been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this Section 0.

11.           Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall together be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

12.           No Strict Construction. The parties to this Agreement have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties, and no presumption or burden of proof will arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.
 
4
EXECUTION VERSION
 
[SIGNATURE PAGE FOLLOWS]
 
5
EXECUTION VERSION
 
IN WITNESS WHEREOF, the parties hereto have executed this Call Option Agreement on the date first written above.

 
BV ADVISORY PARTNERS, LLC
     
 
By:
/s/  Keith Barksdale
   
Keith Barksdale
   
Managing Member
     
 
THIRD SECURITY SENIOR STAFF 2008 LLC
     
 
By:
/s/  Randal J. Kirk
   
Randal J. Kirk
   
Manager, Third Security, LLC, which is the
   
Manager of Third Security Senior Staff 2008 LLC
     
 
THIRD SECURITY STAFF 2010 LLC
     
 
By:
/s/  Randal J. Kirk
   
Randal J. Kirk
   
Manager, Third Security, LLC, which is the
   
Manager of Third Security Staff 2010 LLC
     
 
THIRD SECURITY INCENTIVE 2010 LLC
     
 
By:
/s/  Randal J. Kirk
   
Randal J. Kirk
   
Manager, Third Security, LLC, which is the
   
Manager of Third Security Incentive 2010 LLC
     
 
THIRD SECURITY STAFF 2014 LLC
     
 
By:
/s/  Randal J. Kirk
   
Randal J. Kirk
   
Manager, Third Security, LLC, which is the
   
Manager of Third Security Staff 2014 LLC
 
6
Schedule 1

Stockholder
Total Shares
First
Tranche
Shares
Second
Tranche
Shares
Third Security Senior Staff 2008 LLC
3,160,000
790,000
2,370,000
Third Security Staff 2010 LLC
2,728,000
682,000
2,046,000
Third Security Incentive 2010 LLC
1,580,000
395,000
1,185,000
Third Security Staff 2014 LLC
432,000
108,000
324,000
TOTAL
7,900,000
1,975,000
5,925,000
 
 
 EX-99.24 4 ex99_24.htm EXHIBIT 99.24
Exhibit 24
 
CALL OPTION AGREEMENT

This Call Option Agreement (this “Agreement”), is made and entered as of April 7, 2017, by and among Kuzven Precipio Investor, LLC (the “Optionee”) and Third Security Senior Staff 2008 LLC, Third Security Staff 2010 LLC, Third Security Incentive 2010 LLC and Third Security Staff 2014 LLC (collectively, the “Stockholders”)

WHEREAS, the Optionee desires to have the right to purchase certain shares (the “Shares”) of Transgenomic, Inc., a Delaware corporation (the “Company”),  common stock (the “Common Stock”) held by the Stockholders as set forth on Schedule I attached hereto, and the Stockholders desires to grant such right to the Optionee, pursuant to the terms and conditions set forth herein;

WHEREAS, on October 12, 2016, the Company entered into an Agreement and Plan of Merger (as amended, the “Merger Agreement”) with New Haven Labs Inc. (“Merger Sub”), which is a wholly owned subsidiary of the Borrower, and Precipio Diagnostics, LLC, (“Precipio”); pursuant to which at the effective time of the merger (the “Merger”), Merger Sub will merge with and into Precipio, with Precipio as the surviving entity;

WHEREAS, the consummation of a New Preferred Stock Financing (as defined in the Merger Agreement) in accordance with the terms and conditions set forth in the New Preferred Stock Term Sheet (as defined in the Merger Agreement) is a condition to the Closing of the Merger (as defined in the Merger Agreement); and

WHEREAS, in order to have sufficient funds to reach the Closing of the Merger, immediately prior hereto, the Company is entering into a bridge loan financing pursuant to which the Company is receiving gross proceeds of $1,250,000 (“Bridge Loan Financing”).

NOW, THEREFORE, in consideration of the foregoing and the mutual and dependent covenants hereinafter set forth, the parties agree as follows:

1.         Grant of Call Option.

(a)         Conditions to the Call Option.

  (i)          With respect to an aggregate of 1,975,000 shares designated as the First Tranche Shares in the amounts designated for each Stockholder as set forth on Schedule 1 (the “First Tranche Shares”), the grant of this Call Option  is conditioned on (1) the Closing of the Merger in accordance with its terms, (2) the consummation of the Bridge Loan Financing and (3) the conversion of $3.0 million of outstanding secured debt held by certain of the Stockholders into shares of preferred stock of the Company with a conversion price at least as favorable to such Stockholders as the conversion price for such preferred stock set forth in the New Preferred Stock Financing Term Sheet.
 
  (ii)         With respect to an aggregate of 5,925,000 shares designated as the Second Tranche Shares in the amounts designated for each Stockholder as set forth on Schedule 1 (the “Second Tranche Shares”),  this Call Option is conditioned on (1) the Closing of the Merger in accordance with its terms, (2) the consummation of the New Preferred Stock Financing and (3) the conversion of $3.0 million of outstanding secured debt held by certain of the Stockholders into shares of preferred stock of the Company with terms and conditions at least as favorable to such Stockholders as the terms and conditions set forth in the New Preferred Stock Term Sheet. For purposes of this Section1(a), the New Preferred Stock Financing shall be deemed to have been consummated and this condition satisfied if the Investors (as defined in the New Preferred Stock Financing Term Sheet) are ready, willing and able to consummate and fund the New Preferred Stock Financing (subject to such changes as may be necessary for such preferred stock to be treated as equity on the Company’s balance sheet) in an amount not less $5.0 million and the Company and Precipio do not consummate such New Preferred Stock Financing or another financing led by the Optionee pursuant to which the Company receives not less than $5.0 million in cash with terms and conditions at least as favorable to the Company as the terms and conditions set forth in the New Preferred Stock Term Sheet (subject to such changes as may be necessary for such preferred stock to be treated as equity on the Company’s balance sheet) and the Closing of the Merger occurs.  For the avoidance of doubt, the consummation of an Alternative Financing (as defined in the Merger Agreement) shall not satisfy the conditions set forth in this Section 1(a)(ii).

  (iii)        If the conditions set forth in this Section 1(a) have not been satisfied on or before the earlier of (i) the Closing of the Merger or (ii) the termination of the Merger Agreement in accordance with its terms, then this Call Option shall automatically terminate and be null and void ab initio.

(b)         Right to Purchase. Subject to the satisfaction in full of the conditions set forth in Section 1(a)(i) above with respect to the First Tranche Shares and Section 1(a)(ii) above with respect to the Second Tranche Shares, and the other terms and conditions of this Agreement, at any time on or after the date of the Closing of the Merger the Optionee shall have the right (the “Call Right”), but not the obligation, to cause the Stockholders to sell that number of First Tranche Shares or Second Tranche Shares, as applicable, opposite each Stockholder’s name on Schedule 1 attached hereto, in an aggregate amount for all such Stockholders equal to 7,900,000 shares, to the Optionee for an aggregate purchase price of $1.00 (the “Call Purchase Price”).  The Call Right shall expire on December 31, 2017.

(c)         Procedures.

  (i)          If the Optionee desires to purchase the Shares pursuant to Section 1, the Optionee shall deliver to the Stockholders a written, unconditional, and irrevocable notice (the “Call Exercise Notice”) exercising the Call Right.

  (ii)         The Stockholders shall at the closing of any purchase consummated pursuant to this Section 1(c), represent and warrant to the Optionee that (A) the Stockholders have full right, title and interest in and to the Shares, (B) the Stockholders have all the necessary power and authority and have taken all necessary action to sell such Shares as contemplated by this Section 1, and (C) the Shares are free and clear of any and all mortgages, pledges, security interests, options, rights of first offer, encumbrances or other restrictions or limitations of any nature whatsoever other than those arising as a result of or under the terms of this Agreement.
 
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  (iii)        Subject to Section 1(d) below, the closing of any sale of Shares pursuant to this Section 1 shall take place no later than five business days following receipt by the Stockholders of the Call Exercise Notice (the “Call Right Closing Date”).

(d)         Consummation of Sale. The Optionee will pay the Call Purchase Price for the Shares by check or by wire transfer of immediately available funds on the Call Right Closing Date.

(e)         Cooperation. The Stockholders shall take all actions as may be commercially reasonably necessary to consummate the sale contemplated by this Section 1, including, without limitation, entering into agreements and delivering certificates and instruments and consents as may be deemed necessary or appropriate.

(f)          Closing. At the closing of any sale and purchase pursuant to this Section 1, the Stockholders shall deliver to the Optionee a certificate or certificates representing the Shares to be sold (if any), accompanied by stock powers and all necessary stock transfer taxes paid and stamps affixed, if necessary, against receipt of the Call Purchase Price.

2.         Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent, if to the Stockholders at 1881 Grove Avenue, Radford, Virginia 24141, and, if to the Optionee at c/o Kuzari Group LLC, 2201 East 42nd Street, 29th Floor, New York, NY 10017 (or at such other address for a party as shall be specified in a notice given in accordance with this Section 2).

3.         Entire Agreement. This Agreement constitutes the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter.

4.         Successor and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. This Agreement shall be freely assignable by the Optionee.

5.         No Third-Party Beneficiaries. This Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other person any legal or equitable right, benefit or remedy of any nature whatsoever, under or by reason of this Agreement.
 
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6.         Headings. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.

7.         Amendment and Modification; Waiver. This Agreement may only be amended, modified or supplemented by an agreement in writing signed by each party hereto. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. Except as otherwise set forth in this Agreement, no failure to exercise, or delay in exercising, any rights, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

8.         Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

9.         Governing Law; Jurisdiction.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to any choice or conflict of laws provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the Laws of any jurisdiction other than the State of Delaware.

10.       Waiver of Jury Trial. Each party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this Agreement or the transactions contemplated hereby. Each party to this Agreement certifies and acknowledges that (a) no representative of any other party has represented, expressly or otherwise, that such other party would not seek to enforce the foregoing waiver in the event of a legal action; (b) such party has considered the implications of this waiver; (c) such party makes this waiver voluntarily; and (d) such party has been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this Section 0.

11.       Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall together be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.
 
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12.       No Strict Construction. The parties to this Agreement have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties, and no presumption or burden of proof will arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.

[SIGNATURE PAGE FOLLOWS]
 
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IN WITNESS WHEREOF, the parties hereto have executed this Call Option Agreement on the date first written above.
 
 
KUZVEN PRECIPIO INVESTOR, LLC
     
 
By:
/s/  Mark Rimer
  
   
Mark Rimer
   
Managing Member

 
THIRD SECURITY SENIOR STAFF 2008 LLC
     
 
By:
/s/  Randal J. Kirk
  
   
Randal J. Kirk
   
Manager, Third Security, LLC, which is the
   
Manager of Third Security Senior Staff 2008 LLC

 
THIRD SECURITY STAFF 2010 LLC
     
 
By:
/s/  Randal J. Kirk
  
   
Randal J. Kirk
   
Manager, Third Security, LLC, which is the
   
Manager of Third Security Staff 2010 LLC

 
THIRD SECURITY INCENTIVE 2010 LLC
     
 
By:
/s/  Randal J. Kirk
  
   
Randal J. Kirk
   
Manager, Third Security, LLC, which is the
   
Manager of Third Security Incentive 2010 LLC

 
THIRD SECURITY STAFF 2014 LLC
     
 
By:
/s/  Randal J. Kirk
  
   
Randal J. Kirk
   
Manager, Third Security, LLC, which is the
   
Manager of Third Security Staff 2014 LLC
 
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Schedule 1
 
Stockholder
Total Shares
First
Tranche
Shares
Second
Tranche
Shares
Third Security Senior Staff 2008 LLC
3,160,000
790,000
2,370,000
Third Security Staff 2010 LLC
2,728,000
682,000
2,046,000
Third Security Incentive 2010 LLC
1,580,000
395,000
1,185,000
Third Security Staff 2014 LLC
432,000
108,000
324,000
TOTAL
7,900,000
1,975,000
5,925,000