Exhibit 10.1
WARRANT AGREEMENT
THIS WARRANT AGREEMENT (the “Agreement”), dated as of June 30, 2008, is made and
entered into by and between Syntroleum Corporation, a Delaware corporation (the
“Company”), and Tyson Foods, Inc., a Delaware corporation (“Warrantholder”)
(both the Company and the Warrantholder may be referred to collectively as the
“Parties”).
The Parties are each 50% owners of Dynamic Fuels, LLC, a Delaware limited
liability company (“DF”) which has been approved for $100,000,000 of funding
under certain Go-Zone revenue bonds originated by the Louisiana Public
Facilities Authority (the “Bonds”).
As a condition to DF obtaining funding under the Bonds, among other things, the
Warrantholder is providing a letter of credit in the amount of $100,000,000 to
guarantee DF’s obligations under the Bonds (the “Guarantee”).
The Parties agreement is that each of them has effective responsibility as
between each other for one-half of the Guarantee, and the Parties agree, as
between each other, that each of the Company and the Warrantholder is obligated
for one-half of any and all amounts disbursed arising out of and pursuant to the
Guarantee, up to $50,000,000 each. Warrantholder agrees to provide the Guarantee
in its name, as the Company’s financial condition does not presently support its
issuance of a letter of credit or other form of guarantee in the necessary
amount. Warrantholder further agrees to maintain the Guarantee until the Bonds
reach final maturity, or until DF is financially able to provide the Guarantee
and elects to do so. As consideration to induce the Warrantholder to provide the
Guarantee, Company and the Warrantholder have agreed that the Company will issue
and deliver to the Warrantholder warrants (the “Warrants”) to purchase up to
eight million shares (the “Shares”) of the Company’s common stock, par value
$.01 per share (the “Common Stock”) upon the terms and conditions of this
Agreement, pursuant to the terms set forth herein.
The cost of issuing the Bonds, consisting of the items identified in Attachment
1, shall be borne by DF. Annual costs payable by DF in relation to the Bonds
include (i) the interest payments on the Bonds; (ii) the annual Remarketing
Agent fee; (iii) the annual fee payable to the Bondholders’ Trustee; and
(iv) the letter of credit fees for supplying the Letter of Credit guaranty from
Warrantholder for the Bonds. Any fees in addition to those mentioned above are
subject to the approval of DF.
In consideration of the foregoing recitals, covenants, and agreements, and for
the purpose of defining the terms and provisions of the Warrants and the
respective rights and obligations thereunder, the Company and the Warrantholder,
for value received, hereby further agree as follows:

 

 

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Section 1. Transferability and Form of Warrants.
1.1 Registration. The Warrants shall be numbered and shall be registered on the
books of the Company when issued.
1.2 Limitations on Transfer.
(a) The Warrants and the Shares shall not be sold, assigned, transferred,
pledged or otherwise encumbered except upon the conditions specified in this
Agreement. Warrantholder will cause any proposed purchaser, assignee, transferee
or pledgee of the Warrants or the Shares, except for transferees in dispositions
of Shares that are pursuant to an effective registration statement under the
Securities Act of 1933 (the “Act”), or dispositions of Shares pursuant to
Rule 144 or Rule 144A under the Act, to agree to take and hold such securities
subject to the provisions and upon the conditions specified in this Agreement.
The Warrants may be divided or combined, upon request to the Company by a
Warrantholder, into a certificate or certificates representing the right to
purchase the same aggregate number of Shares. Unless the context indicates
otherwise, the term “Warrantholder” shall include any transferee or transferees
of the Warrants or the Shares that are required to be bound by the terms hereof,
and the term “Warrants” shall include any and all warrants outstanding pursuant
to this Agreement, including those evidenced by a certificate or certificates
issued upon division, exchange or substitution pursuant to this Agreement.
Warrantholder by its receipt of a Warrant certificate, agrees to be bound by and
comply with the terms of this Agreement. Warrantholder represents and agrees
that the Warrant (and Shares if the Warrant is exercised) is purchased only for
investment, for such Warrantholder’s own account, and without any present
intention to sell, or with a view to distribution of, the Warrant or Shares.
(b) If Warrantholder desires to sell the Warrants, Warrantholder shall deliver a
written notice thereof (“Right of First Offer Notice”) to the Company.
(c) Upon receipt of the Right of First Offer Notice, the Company shall have
thirty (30) calendar days to provide Warrantholder with a binding, written offer
(the “Offer”) to purchase the Warrants. Any Offer must include, at a minimum, a
price, in cash, for the Warrants, a description of any material conditions
applicable to the purchase thereof, and the time period within which the Company
is prepared to close such purchase (which shall be as soon as reasonably
practicable, but in no event later than sixty (60) calendar days after the
date-of the Right of First Offer Notice). Upon receipt of an Offer from the
Company, Warrantholder shall have the right, but not the obligation, to accept
the same by delivering written notice to the Company, which notice shall
constitute a contract between Warrantholder to sell, and the Company to
purchase, the Warrants on the terms and conditions described therein.
(d) If Warrantholder elects not to accept any Offer, Warrantholder may sell the
Warrants to a third party, provided that, the sale price for the Warrants must
be in cash and may not be less than 105% of the price set forth in any Offer
that was timely delivered to Warrantholder. The sale must be concluded within
the later to occur of (i) one hundred eighty (180) calendar days from the date
of such election and (ii) receipt of any third party consents or approvals
required in connection with such sale. If Warrantholder elects not to accept an
Offer for the Warrants and does not agree to sell the Warrants in accordance
with the terms of this Agreement within thirty (30) calendar days of such
election, then Warrantholder shall not sell the Warrants for a period of one
(1) year following the expiration of such thirty (30) calendar day period.
Following such one (1) year period, if Warrantholder desires to sell the
Warrants, Warrantholder shall once again deliver a Right of First Offer Notice
to the Company.

 

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1.3 Form of Warrants. The text of the Warrants and of the form of election to
purchase Shares shall be substantially as set forth in Exhibit A attached
hereto. The number of Shares issuable upon exercise of the Warrants is subject
to adjustment upon the occurrence of certain events, all as hereinafter
provided. The Warrant shall be executed on behalf of the Company by its Chief
Executive Officer, President or by a Vice President, attested to by its
Secretary or an Assistant Secretary. A Warrant bearing the signature of an
individual who was at the time of execution thereof the proper officer of the
Company shall bind the Company, notwithstanding that such individual shall have
ceased to hold such office prior to the delivery of such Warrant or did not hold
such office on the date of this Agreement.
The Warrants shall be dated as of the date of signature thereof by the Company
either upon initial issuance or upon division, exchange or substitution.
1.4 Legend on Warrants. Each Warrant certificate shall bear the following
legends:

  (a)  
“THE WARRANTS EVIDENCED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE
SECURITIES LAWS. NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT (I) AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO, (II) AN OPINION OF COUNSEL FOR THE
HOLDER, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT
REQUIRED AND ANY PROSPECTUS DELIVERY REQUIREMENTS ARE NOT APPLICABLE OR
(III) RECEIPT OF NO-ACTION LETTERS FROM THE APPROPRIATE GOVERNMENTAL
AUTHORITIES. COPIES OF THE WARRANT AGREEMENT COVERING THE PURCHASE OF THESE
WARRANTS AND VARIOUS REQUIREMENTS, INCLUDING WITHOUT LIMITATION PROVISIONS
RESTRICTING THEIR TRANSFER, MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE
BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE COMPANY AT
THE PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY.”; and

  (b)  
any legend required by applicable state securities law.

Any certificate issued at any time in exchange or substitution for any
certificate bearing such legends (except, in the case of the Shares, a new
certificate issued upon completion of a public distribution pursuant to a
registration statement under the Act or upon completion of a sale under Rule 144
or Rule 144A under the Act of the securities represented thereby) shall also
bear the above legend or similar legend unless, in the opinion of the Company’s
counsel, the securities represented thereby need no longer be subject to such
restrictions. Warrantholder consents to the Company making a notation on its
records and giving instructions to any registrar or transfer agent of the
Warrants and the Common Stock in order to implement the restrictions on transfer
established in this Agreement.

 

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Section 2. Exchange of Warrant Certificate. Any Warrant certificate may be
exchanged for another certificate or certificates entitling a Warrantholder to
purchase a like aggregate number of Shares as the certificate or certificates
surrendered then entitled such Warrantholder to purchase. Any Warrantholder
desiring to exchange a Warrant certificate shall make such request in writing
delivered to the Company, and shall surrender, properly endorsed, the
certificate evidencing the Warrant to be so exchanged. Thereupon, the Company
shall execute and deliver to the person entitled thereto a new Warrant
certificate as so requested.
Section 3. Issuance of Warrants; Term of Warrants; Exercise of Warrants; Amount
of Warrants.
(a) On the date of funding of the Bonds, the Company shall issue a Warrant
certificate evidencing Warrants representing the right, subject to the
provisions contained herein and therein, to purchase from the Company up to
eight million Shares; provided that in the event the number of shares of Common
Stock issuable pursuant to the exercise of a Warrant to be issued pursuant to
this Section 3(a), (i) when aggregated with all other shares of Common Stock
then owned beneficially by the Warrantholder, would result in the beneficial
ownership by the Warrantholder (assuming such Warrants were exercisable) of a
number of shares of Common Stock equal to or in excess of 20% of the outstanding
shares of Common Stock on the date of issuance or (ii) when aggregated with all
other shares of Common Stock issuable pursuant to the exercise of all Warrants
previously issued pursuant to this Section 3(a) and all warrants previously
issued pursuant to the Warrant Agreement dated as of June 22, 2007 between the
Company and the Warrantholder (the “2007 Agreement”) would result in the
issuance upon exercise of all such Warrants and warrants of a number of shares
of Common Stock equal to or in excess of 20% of the outstanding shares of Common
Stock as of the date of this Agreement, then the number of shares of Common
Stock issuable pursuant to the exercise of such Warrant shall be reduced to the
maximum number of shares of Common Stock that does not equal or exceed such
amount. The Company represents to the Warrantholder that the Company has all
corporate power and authority to issue the Warrants and the Shares (and the
warrants and the shares contemplated by the 2007 Agreement) to the Warrantholder
and has obtained all consents and approvals required in connection with the
issuance of the Warrants and the Shares (and the warrants and the shares
contemplated by the 2007 Agreement) to the Warrantholder; provided, that
shareholder approval has not been obtained based upon the maximum share
limitations set forth in the preceding sentence.
(b) Subject to the terms of this Agreement, including without limitation
subsection (e) of this Section 3, Warrantholder shall have the right, at any
time and from time to time on a day that is not a Saturday, Sunday or public
holiday in Tulsa, Oklahoma, to exercise the Warrants and to purchase from the
Company up to the number of duly authorized, fully paid and nonassessable Shares
to which Warrantholder may at the time be entitled to purchase pursuant to this
Agreement, upon surrender to the Company, at its principal office, of the
certificate evidencing the Warrants to be exercised, together with the purchase
form on the reverse thereof duly completed and signed, and upon payment to the
Company of the Warrant Price, for the number of Shares in respect of which such
Warrants are then exercised, but in no event for less than 100 Shares for any
Warrantholder (unless less than an aggregate of 100 Shares are then purchasable
under all outstanding Warrants held by a Warrantholder).
(c) Payment by Warrantholder of the aggregate Warrant Price shall be made in
cash or by immediately available funds, check or any combination thereof.

 

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(d) Upon such surrender of the Warrants and payment of such Warrant Price as
aforesaid, the Company shall issue and cause to be delivered to or upon the
written order of the exercising Warrantholder and in the name of the exercising
Warrantholder a certificate or certificates for the number of full Shares so
purchased upon the exercise of his Warrant, together with cash, as provided in
Section 9 hereof, in respect of any fractional Shares otherwise issuable upon
such surrender. Such certificate or certificates shall be deemed to have been
issued and the exercising Warrantholder shall be deemed to have become a holder
of record of such securities as of the date of surrender of the Warrants and
payment of the Warrant Price, as aforesaid, notwithstanding that the certificate
or certificates representing such securities shall not actually have been
delivered or that the stock transfer books of the Company shall then be closed.
The Warrants shall be exercisable, at the election of a Warrantholder, either in
full or from time to time in part and, in the event that a certificate
evidencing the Warrants is exercised in respect of less than all of the Shares
specified therein, a new certificate evidencing the remaining portion of the
Warrants held by such Warrantholder will be issued by the Company.
(e) The Parties acknowledge that the number of Warrants exercisable into Shares
hereunder shall be based on a pro-rata delivery of the Warrants determined by
the actual credit support supplied by Warrantholder. The following calculation
method shall be used.
Definition:
X – is the maximum credit support offered by Warrantholder with the same general
terms and conditions as the Bonds . X is equal to $50,000,000 (fifty million
dollars).
Y – is the maximum number of warrants to be issued by Company concurrent with
$50,000,000 (fifty million) in credit support to Company. Y is equal to
8,000,000 (eight million) warrants
Z – is the Warrant Ratio which is equal to Y divided by X which is 0.16 warrants
per $1 of credit support supplier by Warrantholder.
P – is the percentage of the Bond allocated to Company based on Company’s
ownership in the project financed by the Bonds. As of the date of this Agreement
P = 50%
B – is the gross Bond amount issued
GCS – is the gross credit support required by Company from Warrantholder which
is equal to P times B.
XWH – is the credit support for the Bonds supplied by Company and may be
voluntary or mandatory. Company supplied credit support is mandatory if GCS is
greater than X. Company must determine the level of voluntary credit support for
the Bonds to be supplied by the Company no later than the date on which the DF
Management Committee approves the resolution to issue the Bonds
XC – is the credit support supplied by the Warrantholder

 

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WD – is the Warrants due Warrantholder
The calculation is described as follows and illustrated the following example
calculations
WD = (B*P-XWH)*Z
Example Calculation
Example 1 — Bond Amount Less Than $100 million, voluntary credit support from
Company

                      Row #   Symbol   Description   Value     Calculation
1
  X   Maximum Warrantholder supplied credit support   $ 50,000,000     Constant
2
  Y   Maximum Warrant Amount     8,000,000     Constant
3
  Z   Warrant Ratio — Warrants/USD     0.1600     Row 2/Row 3
4
  B   Actual Bond amount issued   $ 85,000,000     Value
5
  P   Percentage of the Bond allocated to Company     50 %   Value
6
  GCS  
Gross Company credit support required from Warrantholder
(not to exceed $50 million)
  $ 42,500,000     Row 4* Row 5
7
  XWH   Company supplied voluntary credit support   $ 25,000,000     Value
8
  XC   Credit support supplied by Warrantholder   $ 17,500,000     Row 6 – Row 7
9
  WD   Warrants due Warrantholder     2,800,000     Row 8 * Row 3

Example 2 — Bond amount equals $100 million, no credit support from Company

                      Row #   Symbol   Description   Value     Calculation
1
  X   Maximum Warrantholder supplied credit support   $ 50,000,000     Constant
2
  Y   Maximum Warrant Amount     8,000,000     Constant
3
  Z   Warrant Ratio — Warrants/USD     0.1600     Row 2/Row 3
4
  B   Actual Bond amount issued   $ 100,000,000     Value
5
  P   Percentage of the Bond allocated to Company     50 %   Value
6
  GCS  
Gross Company credit support required from Warrantholder
(not to exceed $50 million)
  $ 50,000,000     Row 4* Row 5
7
  XWH   Company supplied credit support   $ 0     Value
8
  XC   Credit support supplied by Warrantholder   $ 50,000,000     Row 6 – Row 7
9
  WD   Warrants due Warrantholder     8,000,000     Row 8 * Row 3

Example 3 — Bond amount greater than $100 million, mandatory credit support from
Company

                      Row #   Symbol   Description   Value     Calculation
1
  X   Maximum Warrantholder supplied credit support   $ 50,000,000     Constant
2
  Y   Maximum Warrant Amount     8,000,000     Constant
3
  Z   Warrant Ratio — Warrants/USD     0.1600     Row 2/Row 3
4
  B   Actual Bond amount issued   $ 135,000,000     Value
5
  P   Percentage of the Bond allocated to Company     50 %   Value
6
  GCS  
Gross Company credit support required from Warrantholder
(not to exceed $50 million)
  $ 67,500,000     Row 4* Row 5
7
  XWH   Company supplied mandatory credit support   $ 17,500,000     Value
8
  XC   Credit support supplied by Warrantholder   $ 50,000,000     Row 6 – Row 7
9
  WD   Warrants due Warrantholder     8,000,000     Row 8 * Row 3

Illustrative calculations only. Other combination exist.

 

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(f) The Warrants shall not be issued upon the occurrence of any of the following
events:

  (1)  
The Bonds are not issued;
    (2)  
The Guarantee is not required as a condition to the issuance of the Bonds.

(g) The Warrants will expire four (4) years from the date of issuance.
Section 4. Payment of Taxes. The Company will pay all documentary stamp taxes,
if any, attributable to the initial issuance of the Warrants or the Shares;
provided, however, the Company shall not be required to pay any tax which may be
payable in respect of any secondary transfer of the Warrants or the Shares.
Section 5. Mutilated or Missing Warrants. In case the certificate or
certificates evidencing the Warrants shall be mutilated, lost, stolen or
destroyed, the Company shall, at the request of a Warrantholder, issue and
deliver in exchange and substitution for and upon cancellation of the mutilated
certificate or certificates, or in lieu of and substitution for the certificate
or certificates lost, stolen or destroyed, a new Warrant certificate or
certificates of like tenor and representing an equivalent right or interest, but
only upon receipt of evidence satisfactory to the Company of such loss, theft or
destruction of such Warrant and a bond of indemnity, if requested, also
satisfactory in form and amount at the applicant’s cost. Applicants for such
substitute Warrants certificate shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Company may prescribe.
Section 6. Reservation of Shares; No Impairment.
(a) There has been reserved, and the Company shall at all times keep reserved so
long as the Warrants remain outstanding, out of its authorized Common Stock,
such number of shares of Common Stock as shall be subject to purchase under the
Warrants. On or before taking any action that would cause an adjustment pursuant
to the terms of the Warrants resulting in an increase in the number of shares of
Common Stock deliverable upon such conversion or exercise above the number
thereof previously authorized, reserved and available therefor, the Company
shall take all such action so required for compliance with this Section.
(b) The Company shall not by any action, including, without limitation, amending
its charter documents or through any reorganization, reclassification, transfer
of assets, consolidation, merger, dissolution, issue or sale of securities or
any other similar voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Agreement, 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 the
Warrantholder against impairment.
Section 7. Warrant Price. The price per Share at which Shares shall be
purchasable upon the exercise of the Warrants (the “Warrant Price”) is, subject
to adjustment pursuant to Section 8 hereof, $0.01.

 

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Section 8. Adjustment of Number of Shares. The number of securities purchasable
upon the exercise of the Warrants and the Warrant Price shall be subject to
adjustment from time to time upon the happening of certain events, as follows:
8.1 Adjustments. The number of Shares purchasable upon the exercise of the
Warrants and the Warrant Price shall be subject to adjustment as follows:
(a) If the Company after the date hereof shall (1) make or pay a dividend or
make a distribution in shares of Common Stock on its Common Stock, (2) subdivide
its outstanding shares of Common Stock into a greater number of shares or
(3) combine or reclassify its outstanding shares of Common Stock into a smaller
number of shares, the number of Shares purchasable upon exercise of the Warrants
immediately prior to such action shall be adjusted so that a Warrantholder upon
exercise of the Warrants shall be entitled to receive the number of shares of
Common Stock which it would have owned or would have been entitled to receive
immediately following such action had the Warrants been exercised immediately
prior thereto. An adjustment made pursuant to this subsection (a) shall become
effective on the day immediately after the record date, except as provided in
subjection (g) below, in the case of a dividend or distribution and shall become
effective on the day immediately after the effective date in the case of a
subdivision or combination. Whenever the number of Shares purchasable upon the
exercise of a Warrant is adjusted as provided in this paragraph (a), the Warrant
Price shall be adjusted by multiplying such Warrant Price immediately prior to
such adjustment by a fraction, of which the numerator shall be the number of
Shares purchasable upon the exercise of the Warrants immediately prior to such
adjustment, and of which the denominator shall be the number of Shares so
purchasable immediately thereafter.
(b) If the Company after the date hereof shall distribute any rights, warrants
or options to all holders of its Common Stock entitling them, for a period
expiring within sixty (60) days after the record date for such distribution, to
purchase shares of Common Stock or securities convertible into Common Stock at a
price per share less than the Relevant Current Market Price Per Share (as
defined below), the Warrant Price shall be adjusted by multiplying the Warrant
Price in effect immediately prior to such adjustment by a fraction, of which
(i) the numerator shall be the sum of (A) the number of shares of Common Stock
outstanding on the record date for the distribution to which this subsection
(b) is being applied and (B) the number of shares of Common Stock which the
aggregate price of the total number of shares of Common Stock offered pursuant
to the distribution to which this subsection (b) is being applied would purchase
at the Relevant Current Market Price Per Share and (ii) the denominator shall be
the sum of (A) the number of shares of Common Stock outstanding on the record
date for the distribution to which this subsection (b) is being applied and
(B) the number of additional shares of Common Stock offered pursuant to the
distribution to which this subsection (b) is being applied. For purposes of this
subsection (b), the “Relevant Current Market Price Per Share” means the then
Current Market Value per share of the Common Stock (determined as provided in
subsection (e) below) on the record date for the distribution to which this
subsection (b) applies, minus, for any distribution to which subsection
(c) applies and for which (x) the record date shall occur on or before the
record date for the distribution to which this subsection (b) applies and
(y) the “‘ex’ date” shall occur on or after the record date for the
determination of shareholders entitled to receive the rights, warrants or
options to which this subsection (b) applies, the fair market value (on the
record date for the distribution to which this subsection (b) applies and as
reasonably determined in good faith by the Board of Directors of the Company) of
the assets of the Company or evidences of indebtedness, cash or securities
distributed in respect of each share of Common Stock in such subsection
(c) distribution. The adjustment shall, except as provided in subsection
(g) below, become effective on the day immediately after the record date for the
determination of shareholders entitled to receive the rights, warrants or
options to which this subsection (b) applies.

 

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(c) If the Company or any subsidiary of the Company after the date hereof shall
distribute to all holders of Common Stock any of its assets, evidences of
indebtedness, cash or securities (excluding any distributions referred to in
subsections (a) or (b) and any dividend or distribution paid in cash out of
earned surplus of the Company) then in each such case the Warrant Price shall be
adjusted so that the same shall equal the price determined by multiplying the
Warrant Price in effect immediately prior to the record date of such
distribution by a fraction of which the numerator shall be the then Current
Market Value per share of the Common Stock (determined as provided in subsection
(e) below) on the record date mentioned below less the then fair market value
(with respect to non-cash consideration, as reasonably determined in good faith
by the Board of Directors of the Company) of the portion of the assets,
evidences of indebtedness, cash or securities so distributed applicable to one
share of Common Stock, and of which the denominator shall be such Current Market
Value per share of the Common Stock. Such adjustment shall, except as provided
in subsection (g) below, become effective on the day immediately after the
record date for the determination of stockholders entitled to receive such
distribution.
(d) If the Company after the date hereof shall consummate a tender offer for or
otherwise repurchase or redeem Common Stock (other than a repurchase in
connection with grants, vesting or exercises of awards under stock incentive
plans), to the extent that the cash and value of any other consideration
included in such payment per share of Common Stock exceeds the Current Market
Value per share of Common Stock (determined as provided in subsection (e) below)
on the trading day next succeeding the Expiration Time (as defined below),
unless the Company tenders for the Warrants on terms which give effect to such
excess consideration, the Warrant Price shall be reduced so that the same shall
equal the price determined by multiplying the Warrant Price in effect
immediately prior to the last time tenders or repurchases or redemptions may be
made pursuant to such tender or repurchase or redemption (the “Expiration Time”)
by a fraction of which the numerator shall be the number of shares of Common
Stock outstanding (including any tendered, repurchased or redeemed shares) at
the Expiration Time multiplied by the Current Market Value per share of Common
Stock on the trading day next succeeding the Expiration Time, and of which the
denominator shall be the sum of (A) the fair market value (with respect to
non-cash consideration, as reasonably determined in good faith by the Board of
Directors of the Company) of the aggregate consideration payable to shareholders
based on the acceptance of all shares validly tendered, repurchased or redeemed
and not withdrawn as of the Expiration Time (the shares deemed so accepted being
referred to as the “Purchased Shares”) and (B) the product of the number of
shares of Common Stock outstanding (less any Purchased Shares) at the Expiration
Time and the Current Market Value per share of Common Stock on the trading day
next succeeding the Expiration Time, such reduction to become effective
immediately prior to the opening of business on the day following the Expiration
Time.

 

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(e) For the purpose of any computation under subsection (b), (c) or (d) above,
the “Current Market Value” per share of Common Stock on any date shall be deemed
to be the average of the Market Value of the Common Stock for the ten
(10) trading days before, and ending not later than, the earlier of the date in
question and the date before the “‘ex’ date”, with respect to the issuance or
distribution requiring such computation. For purposes of subsection (b) and this
subsection (e), the term “‘ex’ date,” when used with respect to any issuance or
distribution, means the first date on which the Common Stock trades regular way
on the Nasdaq (or, if not listed or admitted to trading thereon, then on the
principal national securities exchange or automated quotation system on which
the Common Stock is listed or admitted to trading and if not listed or admitted
to trading on any national securities exchange or automated quotation system, as
determined in good faith by the Company’s Board of Directors) without the right
to receive such issuance or distribution. “Market Value” on any trading day
shall mean (i) in the case of a security traded on the over-the-counter market
and not on Nasdaq nor on any national securities exchange, the per share last
sale price of the Common Stock on such trading day as reported by Nasdaq or an
equivalent generally accepted reporting service; (ii) in the case of a security
traded on Nasdaq or on a national securities exchange, the per share last sale
price of the Common Stock on such trading day on Nasdaq or on the principal
stock exchange on which it is listed, as the case may be or (iii) if neither
clause (i) or (ii) above is applicable, then the fair value thereof as
determined in good faith by the Company’s Board of Directors. For purposes of
clause (i) above, if trading in the Common Stock is not reported by Nasdaq, the
bid price referred to in said clause shall be the lowest bid price as reported
in the “pink sheets” published by National Quotation Bureau, Incorporated. The
last sale price referred to in clause (ii) above shall be the last reported sale
price or, in case no such reported sale takes place on such day, the average of
the reported closing bid and asked prices, in either case on Nasdaq or on the
national securities exchange on which the Common Stock is then listed.
(f) In addition to the foregoing adjustments in subsections (a), (b), (c) and
(d) above, the Company will be permitted to make such reductions in the Warrant
Price as it considers to be advisable in order that any event treated for
Federal income tax purposes as a dividend of stock or stock rights will not be
taxable to the holders of the shares of Common Stock.
(g) In any case in which this Section 8 shall require that an adjustment be made
effective on the day immediately following a record date, the Company may elect
to defer the effectiveness of such adjustment (but in no event until a date
later than the effective time of the event giving rise to such adjustment), in
which case the Company shall, with respect to any Warrant exercised after such
record date and on and before such adjustment shall have become effective
(i) defer paying any cash payment pursuant to Section 9 hereof or issuing to
Warrantholder the number of shares of Common Stock (or other assets or
securities) issuable upon such exercise in excess of the number of shares of
Common Stock and other capital stock of the Company issuable thereupon only on
the basis of the Warrant Price prior to such adjustment, and (ii) not later than
five (5) business days after such adjustment shall have become effective, pay to
Warrantholder the appropriate cash payment pursuant to Section 9 hereof and
issue to Warrantholder the additional shares of Common Stock (or other asset or
securities) issuable on such exercise.

 

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(h) Upon the expiration of any rights, warrants or options referred to in
subsection (b) or (c) above, to the extent the Warrants shall not have been
exercised, the Warrant Price shall be adjusted to such amount as would have been
received by a Warrantholder had the adjustment in such Warrant Price made upon
the distribution of such rights, warrants or options been made upon the basis of
the distribution of only such number of rights, warrants or options as were
actually exercised.
(i) No adjustment in the number of Shares purchasable pursuant to the Warrants
or in the Warrant Price shall be required unless such adjustment would require
an increase or decrease of at least 1.0% of the number of Shares then
purchasable upon exercise of the Warrants or in the Warrant Price; provided,
however, that any adjustments which by reason of this subsection 8.1(i) are not
required to be made immediately shall be carried forward and taken into account
in any subsequent adjustment. All calculations under this Section 8 shall be
made to the nearest cent or to the nearest one-hundredth of a share, as the case
may be.
(j) Whenever the number of Shares purchasable upon the exercise of the Warrants
or the Warrant Price is adjusted as herein provided, the Company shall cause to
be promptly mailed to the Warrantholder by first class mail, postage prepaid,
notice of such adjustment setting forth the number of Shares purchasable upon
the exercise of the Warrants and the Warrant Price after such adjustment, a
brief statement of the facts requiring such adjustment and the computation by
which such adjustment was made.
(k) Except as provided in this Section 8 or in Section 11, during the term of
the Warrants or upon the exercise of the Warrants, no adjustment shall be made
(i) in respect of any dividends or distributions or (ii) in respect of the
consummation of any business combination or other extraordinary transaction.
8.2 Par Value of Shares of Common Stock. Before taking any action which would
cause an adjustment effectively reducing the portion of the Warrant Price
allocable to each Share below the then par value per share of the Common Stock
issuable upon exercise of the Warrants, the Company will take any corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue fully paid and nonassessable Common Stock
upon exercise of the Warrants.
8.3 Independent Public Accountants. The Company may retain a firm of independent
public accountants of recognized national standing (which may be any such firm
regularly employed by the Company) to make any computation required under this
Section 8, and a certificate signed by such firm shall be conclusive evidence of
the correctness of any computation made under this Section 8.
8.4 Statement on Warrant Certificates. Irrespective of any adjustments in the
number of securities issuable upon exercise of Warrants or in the Warrant Price,
Warrant certificates theretofore or thereafter issued may continue to express
the same number of securities and Warrant Price as are stated in the Warrant
certificates initially issuable pursuant to this Agreement. However, the Company
may, at any time in its sole discretion (which shall be conclusive), make any
change in the form of Warrant certificate that it may deem appropriate and that
does not affect the substance thereof; and any Warrant certificate thereafter
issued, whether upon registration of, or in exchange or substitution for, an
outstanding Warrant certificate, may be in the form so changed.

 

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Section 9. Fractional Interests; Fair Value. The Company shall not be required
to issue fractional Shares on the exercise of the Warrants. If any fraction of a
Share would, except for the provisions of this Section 9, be issuable on the
exercise of the Warrants (or specified portion thereof), the Company shall pay
an amount in cash equal to the then Market Value of the Common Stock on the day
of such exercise multiplied by such fraction.
Section 10. No Right as Stockholder; Notices to Warrantholder. Nothing contained
in this Agreement or in the Warrants shall be construed as conferring upon any
Warrantholder or its transferees any rights as a stockholder of the Company,
including the right to vote, receive dividends, call meetings, consent or
receive notices as a stockholder in respect of any meeting of stockholders for
the election of directors of the Company or any other matter or imposing any
fiduciary or other duty on the Company, its officers or directors, in favor of
any Warrantholder, all of which rights and duties owed to stockholders are
disclaimed and waived by Warrantholder. If, however, at any time prior to the
expiration of the Warrants and prior to their exercise, any one or more of the
following events shall occur:
(a) any action which would require an adjustment pursuant to Section 8.1; or
(b) a dissolution, liquidation or winding up of the Company or a consolidation,
merger or similar business combination or sale of its property, assets and
business as an entirety or substantially as an entirety shall be proposed;
then the Company shall give notice in writing of such event to Warrantholder, as
provided in Section 10 hereof, promptly prior to the date fixed as a record date
or the date of closing the transfer books for the determination of the
stockholders entitled to any relevant dividend, distribution, subscription
rights or other rights, or for the determination of stockholders entitled to
vote on such proposed dissolution, liquidation or winding up. Such notice shall
specify such record date or the date of closing the transfer books, as the case
may be. Failure to mail or receive such notice or any defect therein shall not
affect the validity of any action taken with respect thereto.
Section 11. Continuation of Purchase Rights in Case of Reclassification, Change,
Merger, Consolidation or Sale of Assets. If any of the following shall occur,
namely: (a) any reclassification or change of outstanding shares of Common Stock
issuable upon exercise of the Warrants (other than a change in par value, or
from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination of outstanding shares of Common Stock),
(b) any consolidation or merger of the Company with or into any other person, or
the merger of any other person with or into the Company (other than a merger
which does not result in any reclassification, change, conversion, exchange or
cancellation of outstanding shares of Common Stock) or (c) sale, transfer or
conveyance of all or substantially all of the assets of the Company (computed on
a consolidated basis), then the Company, or such successor or purchasing entity,
as the case may be, shall, as a condition precedent to such reclassification,
change, consolidation, merger, sale, transfer or conveyance, execute and deliver
to Warrantholder an agreement providing that Warrantholder shall have the right
to exercise the Warrants only into the kind and amount of shares of stock and
other securities and property (including cash) receivable upon such
reclassification, change, consolidation, merger,

 

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sale, transfer or conveyance by a holder of the number of shares of Common Stock
issuable upon exercise of the Warrants immediately prior to such
reclassification, change, consolidation, merger, sale, transfer or conveyance
assuming such holder of Common Stock of the Company (i) is not a person party to
such transaction and (ii) failed to exercise its rights of an election, if any,
as to the kind or amount of securities, cash and other property receivable upon
such reclassification, change, consolidation, merger, sale, transfer or
conveyance (provided that if the kind or amount of securities, cash, and other
property receivable upon such reclassification, change, consolidation, merger,
sale, transfer or conveyance is not the same for each share of Common Stock of
the Company held immediately prior to such reclassification, change,
consolidation, merger, sale, transfer or conveyance in respect of which such
rights of election shall not have been exercised (“non-electing share”), then
for the purpose of this Section 11 the kind and amount of securities, cash and
other property receivable upon such reclassification, change, consolidation,
merger, sale, transfer or conveyance by each non-electing share shall be deemed
to be the kind and amount so receivable per share by a plurality of the
non-electing shares). Such agreement shall provide for adjustments which shall
be as nearly equivalent as may be practicable to the adjustments provided for in
this Agreement. If, in the case of any such consolidation, merger, sale or
conveyance, the stock or other securities and property (including cash)
receivable thereupon by a holder of shares of Common Stock includes shares of
stock or other securities and property (including cash) of a corporation other
than the successor or purchasing corporation, as the case may be, in such
consolidation, merger, sale or conveyance, then such agreement shall also be
executed by such other corporation and shall contain such additional provisions
to protect the interests of Warrantholder as the Board of Directors of the
Company shall reasonably consider necessary by reason of the foregoing. The
provisions of this Section 11 shall similarly apply to successive
consolidations, mergers, sales or conveyances. Notice of the execution of each
such agreement shall be mailed to Warrantholder by first class mail, postage
prepaid.
Section 12. Securities Laws; Restrictions on Transfer of Shares; Registration
Rights.
(a) Warrantholder agrees that the Warrant and the related Shares (each of the
Warrant and the Shares being referred to herein as a “Security” and together,
“Securities”) are being acquired for investment and that Warrantholder will not
purchase, offer, sell or otherwise dispose of any of the Securities except under
circumstances which will not result in a violation of the Act. In order to
exercise this Warrant, a Warrantholder must be able to confirm and shall confirm
in writing, by executing a certificate to be supplied by the Company, all of the
representations and other covenants contained in this Agreement, including that
the Securities so purchased are being acquired for investment and not with a
view toward distribution or resale. The Shares (unless registered under the Act)
shall be stamped or imprinted with, in addition to any other appropriate or
required legend, a legend in substantially the following form:
“THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 OR ANY STATE SECURITIES LAWS. NO SALE OR DISPOSITION MAY BE EFFECTED
WITHOUT (i) AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO, (ii) AN OPINION
OF COUNSEL FOR THE HOLDER, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH
REGISTRATION IS NOT REQUIRED AND ANY PROSPECTUS DELIVERY REQUIREMENTS ARE NOT
APPLICABLE OR (iii) RECEIPT OF NO-ACTION LETTERS FROM THE APPROPRIATE
GOVERNMENTAL AUTHORITIES. COPIES OF THE AGREEMENT COVERING THE PURCHASE OF THESE
SECURITIES AND RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT NO COST BY WRITTEN
REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE
COMPANY AT THE PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY.”

 

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(b) In addition, Warrantholder specifically represents to the Company both at
the time of initial purchase of the Warrant and at those future times as
specified herein:
(1) The Warrantholder has experience in analyzing and investing in companies
like the Company and is capable of evaluating the merits and risks of an
investment in the Company and has the capacity to protect its own interests. The
Warrantholder is an “Accredited Investor” as that term is defined in Rule 501(a)
promulgated under the Act. The Warrantholder is aware of the Company’s business
affairs and financial condition, and has acquired information about the Company
sufficient to reach an informed and knowledgeable decision to acquire the
Securities. The Warrantholder is acquiring the Securities for its own account
for investment purposes only not as a nominee or agent and not with a view to,
or for the resale in connection with, any “distribution” thereof for purposes of
the Act. The Warrantholder acknowledges the Company’s obligation to file a
registration statement with respect to the Shares as set forth in the
Registration Rights Agreement dated as of the date hereof by and between the
Company and the Warrantholder (the “Registration Rights Agreement”), the
effectiveness of which registration statement may be required for the resale of
the Shares. The Warrantholder has not offered or sold any portion of the
Securities to be acquired by such Warrantholder and has no present intention of
reselling or otherwise disposing of any portion of such Securities either
currently or after the passage of a fixed or determinable period of time or upon
the occurrence or nonoccurrence of any predetermined event or circumstance, and
in particular the Warrantholder has no current intention to resell the Shares
under such registration statement nor would it have such intention if such
registration statement were effective as of the date of purchase. The
Warrantholder understands that investment in the Securities is subject to a high
degree of risk. The Warrantholder can bear the economic risk of its investment,
including the full loss of its investment, and by reason of its business or
financial experience or the business or financial experience of its professional
advisors has the capacity to evaluate the merits and risks of its investment and
protect its own interest in connection with the purchase of the Securities. The
Warrantholder also represents it has not been organized for the purpose of
acquiring the Securities.
(2) The Warrantholder understands that the Securities have not been and except
as provided in the Registration Rights Agreement will not be registered under
the Act or any applicable State securities law in reliance upon a specific
exemption therefrom, which exemption depends upon, among other things, the bona
fide nature of the Warrantholder’s investment intent and the accuracy of the
Warrantholder’s representations as expressed herein and the Warrantholder will
furnish the Company with such additional information as is reasonably requested
by the Company in connection with such exemption.

 

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(3) The Warrantholder further understands that the Securities must be held
indefinitely unless subsequently registered under the Act and any applicable
state securities laws, or unless exemptions from registration are otherwise
available. Moreover, the Warrantholder understands that the Company is under no
obligation to and does not expect to register the Securities except as provided
for in the Registration Rights Agreement.
(4) The Warrantholder is aware of the provisions of Rule 144 and Rule 144A,
promulgated under the Act, which, in substance, permit limited public resale of
“restricted securities” acquired, directly or indirectly, from the issuer
thereof (or from an Affiliate of such issuer), in a nonpublic offering subject
to the satisfaction of certain conditions, if applicable, including, among other
things: The availability of certain public information about the Company, the
resale occurring not less than six (6) months after the party has purchased and
paid for the Securities to be sold; the sale being made through a broker in an
unsolicited “broker’s transaction” or in transactions directly with a market
maker (as said term is defined under the Securities Exchange Act of 1934 (the
“Exchange Act”)) and the amount of securities being sold during any three-month
period not exceeding the specified limitations stated therein.
(5) The Warrantholder further understands that at the time it wishes to sell the
Securities, it is possible that there will be no public market upon which to
make such a sale, and that, even if such a public market then exists, the
Company may not be satisfying the current public information requirements of
Rule 144, and that, in such event, the Warrantholder may be precluded from
selling the Securities under Rule 144 even if the six month minimum holding
period had been satisfied.
(6) The Warrantholder further understands that in the event all of the
requirements of Rule 144 or Rule 144A are not satisfied, registration under the
Act or compliance with registration exemption will be required; and that,
notwithstanding the fact that Rule 144 is not exclusive, the Staff of the
Securities and Exchange Commission has expressed its opinion that persons
proposing to sell private placement securities other than in a registered
offering and otherwise than pursuant to Rule 144 will have a substantial burden
of proof in establishing that an exemption from registration is available for
such offers or sales, and that such persons and their respective brokers who
participate in such actions do so at their own risk.
(7) The Warrantholder has had a reasonable opportunity to ask questions relating
to and otherwise discuss the Company’s business, management and financial
affairs with the Company’s management, customers and other parties, and the
Warrantholder has received satisfactory responses to the Warrantholder’s
inquiries. The Warrantholder has relied solely on its own independent
investigation before deciding to enter into the purchase of the Warrants
contemplated hereby. Unless the Warrantholder has otherwise notified the Company
in writing, the Warrantholder is not, and has not been within the ninety
(90) days prior to the closing date of the purchase of the Securities, a broker
or dealer of securities. Unless the Warrantholder has otherwise notified the
Company in writing, the Warrantholder is not an employee, officer or director of
the Company nor prior to the date hereof is the Warrantholder the beneficial
owner of 5% or more of the Common Stock of the Company.

 

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(c) With respect to any offer, sale or other disposition of any Securities that
is not registered under the Act, Warrantholder agrees to give written notice to
the Company prior thereto, describing briefly the manner thereof, together with
a written opinion of such Warrantholder’s counsel, if reasonably requested by
the Company, to the effect that such offer, sale or other disposition may be
effected without registration or qualification (under the Act as then in effect
or any federal or state law then in effect) of such Securities and indicating
whether or not under the Act, certificates for the Securities in question to be
sold or otherwise disposed of require any restrictive legend as to applicable
restrictions on transferability in order to ensure compliance with such law.
Such opinion must be satisfactory to the Company in its reasonable judgment and
shall state that it may be relied upon by counsel to the Company, and any stock
exchange or transfer agent. Promptly upon receiving such written notice and
satisfactory opinion, if so requested, the Company shall notify such
Warrantholder that such Warrantholder may sell or otherwise dispose of such
Securities all in accordance with the terms of the notice delivered to the
Company. If a determination has been made pursuant to this subsection (c) that
the opinion of counsel for the Warrantholder is not satisfactory to the Company,
the Company shall so notify such Warrantholder promptly after such determination
has been made and shall specify in detail the legal analysis supporting any such
conclusion. Each certificate representing the Securities thus transferred
(except a transfer registered under the Act or a transfer of Shares pursuant to
Rule 144 or Rule 144A) shall bear a legend as to the applicable restrictions on
transferability in order to ensure compliance with such laws, unless in the
aforesaid opinion of counsel for the Warrantholder, such legend is not required
in order to ensure compliance with such laws. The Company may issue stop
transfer instructions to its transfer agent in connection with such
restrictions.
(d) Prior to any transfer of the Securities (except a transfer registered under
the Act or a transfer of Shares pursuant to Rule 144 or Rule 144A), the proposed
transferee shall agree in writing with the Company to be bound by the terms of
this Agreement (whether or not the Warrant has been exercised or otherwise
outstanding) as if an original signatory hereto and the proposed transferee must
be able to and must make representations as set forth in this Section 12.
(e) As used in this Section 12, “Affiliate” shall mean, with respect to any
person, any other person controlling, controlled by or under direct or indirect
common control with such person (for the purposes of this definition “control,”
when used with respect to any specified person, shall mean the power to direct
the management and policies of such person, directly or indirectly, whether
through ownership of voting securities, by contract or otherwise; and the terms
“controlling” and “controlled” shall have meanings correlative to the
foregoing).

 

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Section 13. Notices. Any notice pursuant to this Agreement by the Company or by
a Warrantholder or a holder of Shares shall be in writing and shall be deemed to
have been duly given if delivered or mailed by certified mail, return receipt
requested:
(a) If to the Warrantholder or holders of Shares addressed to them at 2210 West
Oaklawn Drive, Springdale, Arkansas 72764, Attention: General Counsel; or such
other address as provided to Company in writing.
(b) If to the Company addressed to it at 5416 South Yale, Suite 400, Tulsa,
Oklahoma 74135, Attention: President.
Each party may from time to time change the address to which notices to it are
to be delivered or mailed hereunder by notice in accordance herewith to the
other party.
Section 14. Successors. All the covenants and provisions of this Agreement by or
for the benefit of the Company, the Warrantholder or the holders of Shares shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 15. Applicable Law. This Agreement shall be deemed to be a contract made
under the laws of the State of Delaware and for all purposes shall be construed
in accordance with the laws of said State.
Section 16. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company, the
Warrantholder and the holders of Shares any legal or equitable right, remedy or
claim under this Agreement. This Agreement shall be for the sole and exclusive
benefit of the Company, the Warrantholder and the holders of Shares.
Section 17. Counterparts. This Agreement may be executed in any number of
counterparts each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
Section 18. Amendment. Except as expressly provided herein, neither this
Agreement nor any term hereof may be amended, waived, discharged or terminated
other than by a written instrument signed by the party against whom enforcement
of any such amendment, waiver, discharge or termination is sought; provided,
however, that any provisions hereof may be amended, waived, discharged or
terminated upon the written consent of the Company and the then current
Warrantholder having the right to acquire by virtue of holding the Warrants at
least 50% of the Shares which are then issuable upon exercise of the then
outstanding Warrants.
[Remainder of page intentionally left Blank]

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed,
all as of the day and year first above written.

            SYNTROLEUM CORPORATION
      By:   /s/ Edward G. Roth         Name:   Edward G. Roth        Title:  
President and CEO   

            WARRANTHOLDER:

TYSON FOODS, INC.
      By:   /s/ Dennis Leatherby         Name:   Dennis Leatherby       
Title:   Executive Vice President and CFO   

 

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Exhibit A
“THE WARRANTS EVIDENCED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE
SECURITIES LAWS. NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT (I) AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO, (II) AN OPINION OF COUNSEL FOR THE
HOLDER, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT
REQUIRED AND ANY PROSPECTUS DELIVERY REQUIREMENTS ARE NOT APPLICABLE OR (III)
RECEIPT OF NO-ACTION LETTERS FROM THE APPROPRIATE GOVERNMENTAL AUTHORITIES.
COPIES OF THE WARRANT AGREEMENT COVERING THE PURCHASE OF THESE WARRANTS AND
VARIOUS REQUIREMENTS, INCLUDING WITHOUT LIMITATION PROVISIONS RESTRICTING THEIR
TRANSFER, MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF
RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE COMPANY AT THE PRINCIPAL
EXECUTIVE OFFICES OF THE COMPANY.”
Warrant Certificate No.                     
WARRANTS TO PURCHASE
                     MILLION SHARES OF COMMON STOCK
SYNTROLEUM CORPORATION
INCORPORATED UNDER THE LAWS
OF THE STATE OF DELAWARE
This certifies that, for value received, Tyson Foods, Inc., the registered
holder hereof (the “Warrantholder”), is entitled to purchase from SYNTROLEUM
CORPORATION (the “Company”) at a purchase price of $0.01 per share (the “Warrant
Price”) the number of shares of Common Stock of the Company set forth above (the
“Shares”). The number of shares of Common Stock of the Company purchasable upon
exercise of each Warrant evidenced hereby and the Warrant Price shall be subject
to adjustment from time to time as set forth in the Warrant Agreement (as
hereinafter defined).
The Warrants evidenced hereby may be exercised in whole or in part by
presentation of this Warrant certificate with the Purchase Form attached hereto
duly executed and simultaneous payment of the Warrant Price at the principal
office of the Company. Payment of such price shall be made in cash or
immediately available funds.

 

 

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The Warrants evidenced hereby are issued under and in accordance with a Warrant
Agreement, dated as of                     , 2008 (the “Warrant Agreement”),
between the Company and the Warrantholder and are subject to the terms and
provisions contained in the Warrant Agreement, including certain restrictions on
the exercise thereof, to all of which the Warrantholder by acceptance hereof
consents.
Upon any partial exercise of the Warrants evidenced hereby, there shall be
signed and issued to the Warrantholder a new Warrant certificate in respect of
the Shares as to which the Warrants evidenced hereby shall not have been
exercised. These Warrants may be exchanged at the office of the Company by
surrender of this Warrant certificate properly endorsed for one or more new
Warrants of the same aggregate number of Shares as are evidenced by the Warrant
or Warrants exchanged. No fractional shares of Common Stock will be issued upon
the exercise of rights to purchase hereunder, but the Company shall pay the cash
value of any fraction upon the exercise of one or more Warrants. These Warrants
are transferable in the manner and subject to the restrictions set forth or
referred to in the Warrant Agreement.
This Warrant Certificate does not entitle the Warrantholder to any of the rights
of a stockholder of the Company.

            SYNTROLEUM CORPORATION
      By:             Name:           Title:      

Dated:                                         ,                     
ATTEST:
                                                                                
Secretary

 

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SYNTROLEUM CORPORATION
PURCHASE FORM
SYNTROLEUM CORPORATION
5416 South Yale, Suite 400
Tulsa, Oklahoma 74135
The undersigned hereby irrevocably elects to exercise the right of purchase
represented by the within Warrant certificate for, and to purchase thereunder,
 _____  shares of Common Stock (the “Shares”) provided for therein, and requests
that certificates for the Shares be issued in the name of.

         
 
 
 
   
 
       

(Please Print or Type Name, Address and Social Security Number or Taxpayer
Identification Number)
and, if said number of Shares shall not be all the Shares purchasable
thereunder, that a new Warrant certificate for the balance of the Shares
purchasable under the within Warrant certificate be registered in the name of
the undersigned Warrantholder as below indicated and delivered to the address
stated below. The undersigned has also submitted to the Company a certificate in
which it has made the representations and covenants required in Section 12 of
the Warrant Agreement.
Dated:                                         
Name of Warrantholder:
         
                                                                       
(Please Print)

         
Address:
       
 
 
 
   
 
       
 
 
 
   
Signature:
       
 
 
 
   

Note: The above signature must correspond with the name as written upon the face
of this Warrant certificate in every particular, without alteration or
enlargement or any change whatever.

 

 

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Attachment 1
Bonds Cost of Issuance
Estimated Costs
These costs have been estimated by Suntrust and these are the only items that
will be included in the fees paid by DF. The addition of new items to this list
shall require mutual consent of the Parties.

         
State Bond Commission
  $ 104,500  
Louisiana Public Facilities Authority
  $ 50,000  
Issuer Counsel
  $ 12,500  
Borrower’s Counsel, Phelps Dunbar
  $ 100,000  
Bond Counsel, Foley & Judell
  $ 115,000  
Underwriter’s Discount
  $ 275,000  
Underwriter Expenses
  $ 10,000  
Underwriter’s / Bank Counsel
  $ 100,000  
Trustee Fees
  $ 7,000  
Trustee Counsel
  $ 7,000  
Moody’s Rating Service
  $ 25,000    
Estimated Total Cost of Issuance
  $ 806,000