UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

UNDER THE SECURITIES EXCHANGE ACT OF 1934

PRECIPIO, INC.

(Name of Issuer)

Common Stock, par value $0.01 per share

(Title of Class of Securities)

74019L107

(CUSIP Number)  

Mark Rimer

c/o Preicipio, Inc.

4 Science Park

New Haven, CT 06511

(973) 438-1000

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

June 29, 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 statement because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box:  ☐

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).

SCHEDULE 13D

SCHEDULE 13D

SCHEDULE 13D

Item 1. Security and Issuer

The class of equity securities to which this Statement on Schedule 13D (the “Statement”), relates is the common stock, par value $0.01 per share (the “Common Stock”), of Precipio, Inc., a Delaware corporation (the “Company”), whose principal executive offices are located at 4 Science Park, New Haven, Connecticut 06511.

Item 2. Identity and Background

This Statement is being filed on behalf of Mr. Mark Rimer (“Mr. Rimer”) and Chenies Investor LLC, a Delaware limited liability company that is controlled by Mr. Rimer (“Chenies Investor”, and together with Mr. Rimer, the “Reporting Persons”).

(a)-(c)      The address of the principal business office of each of the Reporting Persons is c/o Kuzari Group LLC, 220 East 42nd Street, 29th Floor, New York, NY 10017. The present principal occupation/employment of Mr. Rimer is partner at Kuzari Group and managing member of Chenies Investor, Chenies Management LLC and Kuzven Precipio Investor LLC. Mr. Rimer serves on the board of directors of several companies, including the Company, and is actively involved in business development roles at numerous portfolio companies. The principal business of Chenies Investor is investment.

During the last five years, none of the Reporting Persons have been convicted in a criminal proceeding. During the last five years, none of the Reporting Persons were party to a civil proceeding of a judicial or administrative body of competent jurisdiction and they are not subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws, nor a finding of any violation with respect to such laws. Mr. Rimer is a United States citizen.

Item 3. Source and Amount of Funds or Other Consideration

The funds used to acquire the shares of Common Stock are proceeds of investing activities of the various entities controlled by Mr. Rimer, including Chenies Investor LLC, and management fees received by Mr. Rimer as managing member of such entities. The purchases were made at various times, including purchases of promissory notes of Precipio Diagnostics LLC, purchases of promissory notes and preferred stock of Trangenomic, Inc. and the Company.

Item 4. Purpose of Transaction

The information set forth in Items 3 and 6 is incorporated herein by reference.

In connection with the closing of the merger between Transgenomic, Inc. (“Transgenomic”), New Haven Labs, Inc. and Precipio Diagnostics, LLC on June 29, 2017 (the “Merger”), Transgenomic filed the Third Amended and Restated Certificate of Incorporation (“Certificate of Incorporation”), changing its name to that of the Company and a Certificate of Designation establishing a new Series A Senior Convertible Preferred Stock (the “Series A Senior Convertible Preferred Stock”), a copy of which is filed as Exhibit 1 hereto.

In connection with the Merger, Mr. Rimer and certain entities he controls as set forth in Section 5, received 705,325 shares of the Company’s common stock and 164,324 shares of Series A Senior Convertible Preferred Stock under the Merger Agreement based on ownership by certain entities (in which he owns all the issued and outstanding equity) of notes in Precipio Diagnostics LLC (“Precipio”).

In connection with the Merger, the Company issued 69,587 shares of Series A Senior Convertible Preferred Stock (the “Private Placement Shares”) at a price of $3.736329 per share to Chenies Investor LLC, an entity controlled by Mr. Rimer pursuant to a Securities Purchase Agreement (the “Private Placement Purchase Agreement”) between the Company, Chenies Investor LLC and the other purchasers thereto (the “Purchasers”) attached hereto as Exhibit 2. In connection with this private placement, the Company, the Purchasers, the members of Precipio who received shares of Series A Senior Convertible Preferred Stock in the Merger and other parties also entered into an Investors’ Rights Agreement (the “Investors’ Rights Agreement”) attached hereto as Exhibit 3 which provides the investor parties thereto with registration rights, piggyback registration rights, preemptive rights and rights of first refusal with respect to their Company securities. The Investors’ Rights Agreement also grants holders of the majority of the outstanding Series A Senior Convertible Preferred Stock the right to designate two directors to the Company’s board of directors. Mr. Rimer is one of those directors.

The foregoing descriptions of the Private Placement Purchase Agreement and the Investors’ Rights Agreement do not purport to be complete and are subject to and qualified in their entirety by reference to the Private Placement Purchase Agreement and Investors’ Rights Agreement, which are filed as Exhibits 2 and 3 to this Schedule 13D and are incorporated by reference herein.

As disclosed on the Company’s Form 8-K filed June 30, 2017 (the “8-K”) with the Securities and Exchange Commission, in connection with the Merger and bridge financing disclosed in the 8-K and the assumption of certain obligations by Kuzven Precipio Investor LLC, an entity of which Mr. Rimer serves as Manager, the Company issued to Kuzven Precipio Investor LLC warrants (the “Side Warrants”) to purchase an aggregate of 91,420 shares of the Company’s common stock at an exercise price of $7.00 per share (subject to adjustment). The Side Warrants have a term of 5 years and are exercisable as to 22,857 shares of the Company’s common stock upon grant and as to 68,563 shares of the Company’s common stock upon the entity’s performance of the assumed obligations. In addition, upon the Company consummating one or more rounds of equity financing following July 1, 2017, with aggregate gross proceeds of at least $7 million, the Company will use a portion of the proceeds from such financing to repay the principal amount of the New Bridge Notes, together with any premium and interest (the “New Bridge Notes Repurchase”).

Pursuant to the Call Option Agreement 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 attached hereto as Exhibit 5, Kuzven Precipio Investor LLC has the right to buy 263,332 shares of the Company’s Common Stock from the Third Security entities for an aggregate purchase price of $1.00. 

Chenies Investor LLC holds an 8% Convertible Promissory Note (the "Chenies Note") issued to Chenies Investor LLC on June 29, 2017 in the principal amount of $75,000 and is payable upon the earlier to occur of (i) October 1, 2017 or (ii) the closing of a Qualified Offering (as defined in the Chenies Note) (such date, the "Maturity Date"). At any time after the Maturity Date, the Chenies Note together with any accrued interest is convertible into shares of Common Stock of the Company. If the Company does not complete a Qualified Financing by October 1, 2017, the holder may convert the outstanding principal and interest of the Chenies Note into shares of the Company's Series A Senior Convertible Preferred Stock. Upon the closing of a Qualified Financing, the outstanding principal and interest of the Chenies Note will automatically be converted into shares of the Company's Series A Senior Convertible Preferred Stock.

Item 5. Interest in Securities of the Issuer 

The information contained on the cover pages to this Statement and the information set forth or incorporated in Items 2, 3, 4 and 6 is incorporated herein by reference.

(a) and (b) See Items 11 and 13 of the cover pages to this Statement for the aggregate number of shares and percentage of issued and outstanding shares of Common Stock beneficially owned by the Reporting Persons.  The percentage ownership is calculated based on 26,863,062 shares of Common Stock issued and outstanding as reported on the Company’s Form 10-Q for the period ending March 31, 2017 and filed with the SEC on May 18, 2017, adjusted to reflect a 1:30 reverse stock split that became effective on June 13, 2017, and increased by:  (i) 7,155 shares of Common Stock issued pursuant to the preferred conversion as disclosed in the 8-K; (ii) 352,630 shares of Common Stock issued pursuant to the loan conversion disclosed in the 8-K; (iii) 1,712,901 shares of Common Stock issuable upon conversion of the Series A Senior Convertible Stock; (iv) 5,352,847 shares of Common Stock issued in the Merger; (v) 91,420 shares of Common Stock, which is the aggregate number of shares of Common Stock issuable upon the exercise of all warrants (of which warrants to purchase 22,857 shares of Common Stock are currently exercisable) to purchase Common Stock held by Kuzven Precipio Investor LLC that are or may become exercisable within 60 days; (vi) 263,332 shares of the Company’s Common Stock that Kuzven Precipio Investor LLC has the conditional right to buy pursuant to the Call Option Agreement; and (vii) 26,764 shares of the Company’s Common Stock that Chenies Investor LLC will have the right to acquire upon conversion of certain Promissory Notes that it is obligated to purchase from certain other investors.

(a) As of the date hereof, Mr. Rimer is the beneficial owner of 1,561,617 shares of Common Stock consisting of: (i) 648,436 shares of Common Stok held by Chenies Investor LLC; (ii) 281,055 shares of Common Stock held by Chenies Management LLC; (iii) 4,179 shares of Common Stock held by Precipio Employee Holdings; (iv) 59,082 shares of Series A Senior Convertible Preferred Stock held by Chenies Management LLC; (v) warrant to purchase 91,420 shares of Common Stock held by Kuzven Precipio Investor LLC; (vi) option to purchase 214,113 shares of Common Stock or Series A Senior Convertible Preferred Stock held by Dominion Capital LLC (Kuzven Precipio Investor LLC has a call option); and (vii) option to purchase 263,332 shares of Common Stock or Series A Senior Convertible Preferred Stock held by Kuzven Precipio Investor LLC.

Mr. Rimer is managing member of Chenies Investor LLC, Chenies Management LLC and Kuzven Precipio Investor LLC.

As of the date hereof, Chenies Investor LLC is the beneficial owner of 648,436 shares of Common Stock consisting of: (i) 424,270 shares of Common Stock; (ii) 174,829 shares of Series A Senior Convertible Preferred Stock; (iii) 20,073 shares of Common Stock or Series A Senior Convertible Preferred Stock pursuant to the Promissory Note; (iv) warrant to purchase 2,500 shares of Common Stock; and (v) 26,764 shares of the Company’s Common Stock that Chenies Investor LLC will have the right to acquire upon conversion of certain Promissory Notes that it is obligated to purchase from certain other investors.

(c)  Except for the transactions disclosed in this Statement, none of the Reporting Persons have engaged in any transactions in the Company’s Common Stock in the past 60 days.

(d) Not applicable

(e) Not applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

The information set forth or incorporated in Item 4 is incorporated herein by reference.

Item 7. Material to be Filed as Exhibits

Exhibit 1

Certificate of Designation of Series A Senior Convertible Preferred Stock contained within the Third Amended and Restated Certificate of Incorporation, as amended (filed as Exhibit 3.1 to Item 5.03 to the Company’s Current Report on Form 8-K, filed June 30, 2017)

Exhibit 2

Securities Purchase Agreement with the Private Placement Purchasers (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed June 30, 2017)

Exhibit 3

Investors’ Rights Agreement, dated as of June 28, 2017, by and among Transgenomic, Inc., the Investors and Incentive 2010 (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed June 30, 2017)

Exhibit 4

Form of Side Warrant

Exhibit 5

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.

SIGNATURES

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: July 10, 2017

7

Exhibit 4

NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER THE SECURITIES ACT.

PRECIPIO, INC.

WARRANT TO PURCHASE COMMON STOCK

Precipio, Inc., a Delaware corporation (the “Company”), hereby certifies that, Kuzven Precipio Investor LLC or its permitted registered assigns (the “Holder”), is entitled to purchase from the Company up to a total of ninety one thousand, four hundred twenty nine shares of common stock, $0.01 par value per share (the “Common Stock”), of the Company (each such share, a “Warrant Share” and all such shares, the “Warrant Shares”) at an exercise price per share equal to $7.00 per share (as adjusted from time to time as provided in Section 9 herein, the “Exercise Price”), at any time and from time to time on or after the time set forth in Section 1 hereof (the “Trigger Date”) and through and including 5:30 P.M., New York City time, on June 29, 2022 (the “Expiration Date”), and subject to the following terms and conditions:

1.        Exercisability. This Warrant shall be immediately exercisable as to 22,857 Warrant Shares, and shall become exercisable as to all remaining Warrant Shares only upon consummation of the purchase by Holder of the Note Securities (as defined in that certain Put Call Agreement, of even date herewith, among Holder and Dominion Capital LLC (the “Put Call Agreement”).

2.       Registration of Warrants. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder (which shall include the initial Holder or, as the case may be, any registered assignee to which this Warrant is permissibly assigned hereunder) from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

3.        Registration of Transfers. The Holder covenants that the Warrant and the Warrant Shares may be disposed of only pursuant to an effective registration statement under, and in compliance with the requirements of, the Securities Act, or pursuant to an available exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, and in compliance with any applicable state and federal securities laws. In connection with any transfer of the Warrant or the Warrant Shares other than (i) pursuant to an effective registration statement, (ii) to the Company or (iii) pursuant to Rule 144 (provided that the Holder provides the Company with reasonable assurances (in the form of seller and, if applicable, broker representation letters) that the securities may be sold pursuant to such rule), the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the Securities Act. Subject to the foregoing and compliance with all applicable securities laws, the Company shall register the transfer of all or any portion of this Warrant in the Warrant Register, upon surrender of this Warrant, with the Form of Assignment attached as Schedule 2 hereto duly completed and signed, to the Company’s transfer agent or to the Company at its address specified in the Purchase Agreement and delivery by the transferee of a written statement to the Company certifying that the transferee is an “accredited investor” as defined in Rule 501(a) under the Securities Act and making the representations and certifications substantially similar to those set forth in Sections 3.2(b), (c) and (d) of the Purchase Agreement, to the Company at its address specified in the Purchase Agreement. Upon any such registration or transfer, a new warrant to purchase Common Stock in substantially the form of this Warrant (any such new warrant, a “New Warrant”) evidencing the portion of this Warrant so transferred shall be issued to the transferee, and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued to the transferring Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance by such transferee of all of the rights and obligations in respect of the New Warrant that the Holder has in respect of this Warrant. The Company shall prepare, issue and deliver at its own expense any New Warrant under this Section 3.

4.        Exercise and Duration of Warrants.

(a)        This Warrant shall be exercisable by the registered Holder in any manner permitted by Section 10 of this Warrant at any time and from time to time on or after the times set forth in Section 1 hereof and through and including 5:30 P.M. New York City time, on the Expiration Date. At 5:30 P.M., New York City time, on the Expiration Date, the portion of this Warrant not exercised prior thereto shall be and become void and of no value and this Warrant shall be terminated and no longer outstanding.

(b)       The Holder may exercise this Warrant by delivering to the Company (i) an exercise notice, in the form attached as Schedule 1 hereto (the “Exercise Notice”), completed and duly signed, and (ii) payment of the Exercise Price for the number of Warrant Shares as to which this Warrant is being exercised (which may take the form of a “cashless exercise” if so indicated in the Exercise Notice and if a “cashless exercise” may occur at such time pursuant to Section 10 below), and the date on which the last of such items is delivered to the Company (as determined in accordance with the notice provisions hereof) is an “Exercise Date.” The delivery by (or on behalf of) the Holder of the Exercise Notice and the applicable Exercise Price as provided above shall constitute the Holder’s certification to the Company that its representations contained in Sections 3.2(b), (c) and (d) of the Purchase Agreement are true and correct as of the Exercise Date as if remade in their entirety (or, in the case of any transferee Holder that is not a party to the Purchase Agreement, such transferee Holder’s certification to the Company that such representations are true and correct as to such assignee Holder as of the Exercise Date). The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder. Execution and delivery of the Exercise Notice shall have the same effect as cancellation of the original Warrant and issuance of a New Warrant evidencing the right to purchase the remaining number of Warrant Shares.

5.        Delivery of Warrant Shares.

(a)        Upon exercise of this Warrant, the Company shall promptly (but in no event later than three (3) Trading Days after the Exercise Date) issue or cause to be issued and cause to be delivered to or upon the written order of the Holder and in such name or names as the Holder may designate (provided that, if the Registration Statement is not effective and the Holder directs the Company to deliver a certificate for the Warrant Shares in a name other than that of the Holder or an Affiliate of the Holder, it shall deliver to the Company on the Exercise Date an opinion of counsel reasonably satisfactory to the Company to the effect that the issuance of such Warrant Shares in such other name may be made pursuant to an available exemption from the registration requirements of the Securities Act and all applicable state securities or blue sky laws), (i) a certificate for the Warrant Shares issuable upon such exercise, free of restrictive legends, or (ii) an electronic delivery of the Warrant Shares to the Holder’s account at the Depository Trust Company (“DTC”) or a similar organization, unless in the case of clause (i) and (ii) a registration statement covering the resale of the Warrant Shares and naming the Holder as a selling stockholder thereunder is not then effective or the Warrant Shares are not freely transferable without volume and manner of sale restrictions pursuant to Rule 144 under the Securities Act, in which case such Holder shall receive a certificate for the Warrant Shares issuable upon such exercise with appropriate restrictive legends. The Holder, or any Person permissibly so designated by the Holder to receive Warrant Shares, shall be deemed to have become the holder of record of such Warrant Shares as of the Exercise Date. If the Warrant Shares are to be issued free of all restrictive legends, the Company shall, upon the written request of the Holder, use its reasonable best efforts to deliver, or cause to be delivered, Warrant Shares hereunder electronically through DTC or another established clearing corporation performing similar functions, if available; provided, that, the Company may, but will not be required to, change its transfer agent if its current transfer agent cannot deliver Warrant Shares electronically through such a clearing corporation.

(b)        To the extent permitted by law, the Company’s obligations to issue and deliver Warrant Shares in accordance with and subject to the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance that might otherwise limit such obligation of the Company to the Holder in connection with the issuance of Warrant Shares. Nothing herein shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

6.        Charges, Taxes and Expenses. Issuance and delivery of certificates for shares of Common Stock upon exercise of this Warrant shall be made without charge to the Holder for any issue or transfer tax, transfer agent fee or other incidental tax or expense in respect of the issuance of such certificates, all of which taxes and expenses shall be paid by the Company; provided, however, that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the registration of any certificates for Warrant Shares or the Warrants in a name other than that of the Holder or an Affiliate thereof. The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof.

7.        Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction (in such case) and, in each case, a customary and reasonable indemnity and surety bond, if requested by the Company. Applicants for a New Warrant under such circumstances shall also comply with such other reasonable regulations and procedures and pay such other reasonable third-party costs as the Company may prescribe. If a New Warrant is requested as a result of a mutilation of this Warrant, then the Holder shall deliver such mutilated Warrant to the Company as a condition precedent to the Company’s obligation to issue the New Warrant.

8.        Reservation of Warrant Shares. The Company covenants that it will at all times reserve and keep available out of the aggregate of its authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise of this Warrant as herein provided, the number of Warrant Shares that are initially issuable and deliverable upon the exercise of this entire Warrant, free from preemptive rights or any other contingent purchase rights of persons other than the Holder (taking into account the adjustments and restrictions of Section 9). The Company covenants that all Warrant Shares so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable. The Company will take all such action as may be reasonably necessary to assure that such shares of Common Stock may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of any securities exchange or automated quotation system upon which the Common Stock may be listed.

9.        Certain Adjustments. The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 9.

(a)       Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides its outstanding shares of Common Stock into a larger number of shares, (iii) combines its outstanding shares of Common Stock into a smaller number of shares or (iv) issues by reclassification of shares of Common Stock any shares of capital of the Company, then in each such case the Exercise Price shall be multiplied by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately before such event and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the effective date of such subdivision or combination.

(b)        Pro Rata Distributions. If the Company, at any time while this Warrant is outstanding, distributes to all holders of Common Stock for no consideration (i) evidences of its indebtedness, (ii) any security (other than a distribution of Common Stock covered by the preceding paragraph) or (iii) rights or warrants to subscribe for or purchase any security, or (iv) any other asset (in each case, “Distributed Property”), then, upon any exercise of this Warrant that occurs after the record date fixed for determination of stockholders entitled to receive such distribution, the Holder shall be entitled to receive, in addition to the Warrant Shares otherwise issuable upon such exercise (if applicable), the Distributed Property that such Holder would have been entitled to receive in respect of such number of Warrant Shares had the Holder been the record holder of such Warrant Shares immediately prior to such record date without regard to any limitation on exercise contained therein.

(c)       Fundamental Transactions. If, at any time while this Warrant is outstanding (i) the Company effects any merger or consolidation of the Company with or into another Person, in which the Company is not the survivor or the stockholders of the Company immediately prior to such merger or consolidation do not own, directly or indirectly, at least 50% of the voting securities of the surviving entity, (ii) the Company effects any sale of all or substantially all of its assets or a majority of its Common Stock is acquired by a third party, in each case, in one or a series of related transactions, (iii) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which all or substantially all of the holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (iv) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (other than as a result of a subdivision or combination of shares of Common Stock covered by Section 9(a) above) (in any such case, a “Fundamental Transaction”), then the Company shall provide the Holder at least ten (10) days’ prior written notice of the Fundamental Transaction, and Holder shall have the right to exercise of this Warrant (including via “cashless exercise” as set forth in Section 10 below, contingent and effective upon the closing of such Fundamental Transaction for the same amount and kind of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of the number of Warrant Shares then issuable upon exercise in full of this Warrant without regard to any limitations on exercise contained herein (the “Alternate Consideration”); provided, that this Warrant shall terminate upon the closing of such Fundamental Transaction if not exercised.

(d)        Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to paragraph (a) of this Section 9, the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such adjustment the aggregate Exercise Price payable hereunder for the increased or decreased number of Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment.

(e)        Calculations. All calculations under this Section 9 shall be made to the nearest cent or the nearest share, as applicable (provided, however, that this Warrant may only be exercised for shares of Common Stock).

(f)        Notice of Adjustments. Upon the occurrence of each adjustment pursuant to this Section 9, the Company at its expense will, at the written request of the Holder, promptly compute such adjustment, in good faith, in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment, including a statement of the adjusted Exercise Price and adjusted number or type of Warrant Shares or other securities issuable upon exercise of this Warrant (as applicable), describing the transactions giving rise to such adjustments and showing in detail the facts upon which such adjustment is based. Upon written request, the Company will promptly deliver a copy of each such certificate to the Holder and to the Company’s transfer agent.

10.        Payment of Exercise Price. The Holder shall pay the Exercise Price in immediately available funds; provided, however, that if, on any Exercise Date there is not an effective registration statement registering, or no current prospectus available for, the resale of the Warrant Shares by the Holder, then the Holder may, in its sole discretion, satisfy its obligation to pay the Exercise Price through a “cashless exercise”, in which event the Company shall issue to the Holder the number of Warrant Shares determined as follows:

X = Y [(A-B)/A]

where:

“X” equals the number of Warrant Shares to be issued to the Holder;

“Y” equals the total number of Warrant Shares with respect to which this Warrant is being exercised;

“A” equals the average of the Closing Sale Prices of the shares of Common Stock (as reported by Bloomberg Financial Markets) for the five (5) consecutive Trading Days ending on the date immediately preceding the Exercise Date; and

“B” equals the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.

For purposes of this Warrant, “Closing Sale Price” means, for any security as of any date, the last trade price for such security on the Principal Trading Market for such security, as reported by Bloomberg Financial Markets, or, if such Principal Trading Market begins to operate on an extended hours basis and does not designate the last trade price, then the last trade price of such security prior to 4:00 P.M., New York City time, as reported by Bloomberg Financial Markets, or if the foregoing do not apply, the last trade price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg Financial Markets, or, if no last trade price is reported for such security by Bloomberg Financial Markets, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported in the "pink sheets" by Pink Sheets LLC. If the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Sale Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then the Board of Directors of the Company shall use its good faith judgment to determine the fair market value. The Board of Directors’ determination shall be binding upon all parties absent demonstrable error. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during the applicable calculation period.

For purposes of Rule 144 promulgated under the Securities Act, it is intended, understood and acknowledged that the Warrant Shares issued in a “cashless exercise” transaction shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, on the date this Warrant was originally issued pursuant to the Purchase Agreement (provided that the Commission continues to take the position that such treatment is proper at the time of such exercise).

11.        [Reserved].

12.        No Fractional Shares. No fractional Warrant Shares will be issued in connection with any exercise of this Warrant. In lieu of any fractional shares that would otherwise be issuable, the number of Warrant Shares to be issued shall be rounded down to the next whole number and the Company shall pay the Holder in cash the fair market value (based on the Closing Sale Price) for any such fractional shares.

13.        Notices. Any and all notices or other communications or deliveries hereunder (including, without limitation, any Exercise Notice) shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in the Purchase Agreement prior to 5:30 P.M., New York City time, on a Trading Day, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in the Purchase Agreement on a day that is not a Trading Day or later than 5:30 P.M., New York City time, on any Trading Day, (iii) the Trading Day following the date of mailing, if sent by nationally recognized overnight courier service specifying next business day delivery, or (iv) upon actual receipt by the Person to whom such notice is required to be given, if by hand delivery. The address and facsimile number of a Person for such notices or communications shall be as set forth in the Purchase Agreement unless changed by such Person by two (2) Trading Days’ prior notice to the other Persons in accordance with this Section 13.

14.        Warrant Agent. The Company shall serve as warrant agent under this Warrant. Upon thirty (30) days’ notice to the Holder, the Company may appoint a new warrant agent. Any corporation into which the Company or any new warrant agent may be merged or any corporation resulting from any consolidation to which the Company or any new warrant agent shall be a party or any corporation to which the Company or any new warrant agent transfers substantially all of its corporate trust or shareholders services business shall be a successor warrant agent under this Warrant without any further act. Any such successor warrant agent shall promptly cause notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last address as shown on the Warrant Register.

15.        Miscellaneous.

(a)       No Rights as a Stockholder. The Holder, solely in such Person's capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in such Person's capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, amalgamation, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares which such Person is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.

(b)       Authorized Shares. (i) The Company covenants that during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

(ii)        Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate or articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (a) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (b) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant, and (c) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be necessary to enable the Company to perform its obligations under this Warrant.

(c)       Successors and Assigns. Subject to the restrictions on transfer set forth in this Warrant and in Section 4.1 of the Purchase Agreement, and compliance with applicable securities laws, this Warrant may be assigned by the Holder. This Warrant may not be assigned by the Company without the written consent of the Holder except to a successor in the event of a Fundamental Transaction. This Warrant shall be binding on and inure to the benefit of the Company and the Holder and their respective successors and assigns. Subject to the preceding sentence, nothing in this Warrant shall be construed to give to any Person other than the Company and the Holder any legal or equitable right, remedy or cause of action under this Warrant. This Warrant may be amended only in writing signed by the Company and the Holder, or their successors and assigns.

(d)       Amendment and Waiver. Except as otherwise provided herein, the provisions of the Warrants may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of the Holders of Warrants representing no less than a majority of the Warrant Shares obtainable upon exercise of the Warrants then outstanding.

(e)       Acceptance. Receipt of this Warrant by the Holder shall constitute acceptance of and agreement to all of the terms and conditions contained herein.

(f)       Governing Law; Jurisdiction. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF. EACH OF THE COMPANY AND THE HOLDER HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE STATE OF DELAWARE, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT. EACH OF THE COMPANY AND THE HOLDER HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PERSON AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THE PURCHASE AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. EACH OF THE COMPANY AND THE HOLDER HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY. 

(g)        Headings. The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect any of the provisions hereof.

(h)        Severability. In case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby, and the Company and the Holder will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized officer as of the date first indicated above.

[Signature Page to Warrant (Common)]

SCHEDULE 1

FORM OF EXERCISE NOTICE

[To be executed by the Holder to purchase shares of Common Stock under the Warrant]

Ladies and Gentlemen:

(1)       The undersigned is the Holder of Warrant No. ___ (the “Warrant”) issued by Precipio, Inc., a Delaware corporation (the “Company”). Capitalized terms used herein and not otherwise defined herein have the respective meanings set forth in the Warrant.

(2)       The undersigned hereby exercises its right to purchase ___________ Warrant Shares pursuant to the Warrant.

(3)       The Holder intends that payment of the Exercise Price shall be made as (check one):

☐        Cash Exercise

☐        “Cashless Exercise” under Section 10 of the Warrant

(4)       If the Holder has elected a Cash Exercise, the Holder shall pay the sum of $___________ in immediately available funds to the Company in accordance with the terms of the Warrant.

(5)       Pursuant to this Exercise Notice, the Company shall deliver to the Holder Warrant Shares determined in accordance with the terms of the Warrant.

(6)       By its delivery of this Exercise Notice, the undersigned represents and warrants to the Company that in giving effect to the exercise evidenced hereby the Holder will not beneficially own in excess of the number of shares of Common Stock (as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934) permitted to be owned under Section 11 of the Warrant to which this notice relates.

Dated:____________________

Name of Holder: ___________________________

By:__________________________________
Name: _______________________________
Title: _______________________________

(Signature must conform in all respects to name of Holder as specified on the face of the Warrant)

SCHEDULE 2

FORM OF ASSIGNMENT

[To be completed and executed by the Holder only upon transfer of the Warrant]

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto                              (the “Transferee”) the right represented by the within Warrant to purchase                  shares of Common Stock of Precipio, Inc. (the “Company”) to which the within Warrant relates and appoints                              attorney to transfer said right on the books of the Company with full power of substitution in the premises. In connection therewith, the undersigned represents, warrants, covenants and agrees to and with the Company that:

Exhibit 5

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.

(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 42^nd Street, 29^th 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.

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.

[signature page follows]

IN WITNESS WHEREOF, the parties hereto have executed this Call Option Agreement on the date first written above.

5