Document:

Filed by Bowne Pure Compliance

Exhibit 10.1

SECOND AMENDED AND RESTATED FORBEARANCE AGREEMENT

This Second Amended and Restated Forbearance Agreement (this “Agreement”) is dated as
of February 25, 2009, by and among the lenders identified on the signature pages hereof (such
lenders, together with their respective successors and permitted assigns, are referred to
hereinafter each individually as a “Lender” and collectively as the “Lenders”),
WELLS FARGO FOOTHILL, INC., a California corporation, as the arranger and administrative agent for
the Lenders (in such capacity, together with its successors and assigns in such capacity,
“Agent”), B & B B, INC., a Nevada corporation (“B&BB”), CASABLANCA RESORTS, LLC, a
Nevada limited liability company (“CBR”), OASIS INTERVAL MANAGEMENT, LLC, a Nevada limited
liability company (“OIM”), OASIS INTERVAL OWNERSHIP, LLC, a Nevada limited liability
company (“OIO”), OASIS RECREATIONAL PROPERTIES, INC., a Nevada corporation (“ORP”),
RBG, LLC, a Nevada limited liability company (“RBG”), VIRGIN RIVER CASINO CORPORATION, a
Nevada corporation (“VRCC”; B&BB, CBR, OIM, OIO, ORP, RBG and VRCC are referred to
hereinafter each individually as a “Borrower” and collectively, jointly and severally, as
the “Borrowers”), BLACK GAMING, LLC, a Nevada limited liability company (“Black
Gaming”) and R. BLACK, INC., a Nevada corporation (together with Black Gaming, collectively,
jointly and severally, the “Guarantors”) with reference to the following:

WHEREAS, Borrowers, Lenders, and Agent are parties to that certain Credit Agreement entered
into as of December 20, 2004, as amended by that Joinder Agreement and Amendment dated as of
December 31, 2006, that certain First Amendment to Credit Agreement entered into as of October 26,
2007, that certain Second Amendment to Credit Agreement entered into as of June 20, 2008, that
certain Forbearance, Consent and Third Amendment to Credit Agreement entered into as of November 3,
2008, that certain First Amendment [to] Forbearance Consent and Third Amendment to Credit Agreement
entered into as of January 15, 2009, and that certain Second Amendment to Forbearance, Consent and
Third Amendment to Credit Agreement dated as of February 2, 2009 (as further amended, restated,
supplemented, or otherwise modified from time to time, the “Credit Agreement”); and

WHEREAS, Defaults and Events of Default have occurred under the Credit Agreement as a result
of (i) Borrowers’ failure to achieve EBITDA in the amounts required under Section 6.16(a)(i) of the
Credit Agreement for the 12 month periods ending September 30, 2008 and December 31, 2008, (ii)
Borrowers’ failure to pay the Overadvance amount existing as of September 30, 2008 and continuing
thereafter as required under Section 2.5 of the Credit Agreement, and (iii) Borrowers’ Default or
Event of Default under Section 7.9 of the Credit Agreement with respect to the representations of
the Borrowers under Section 4.12(a) of the Credit Agreement required to be made in connection with
the delivery of the financial statements to be delivered pursuant to Section 5.3 of the Credit
Agreement for the periods ending August 31, 2008, September 30, 2008, October 31, 2008, November
30, 2008 and December 31, 2008 (such events in clauses (i), (ii) and (iii)
of this paragraph are referred to collectively as the “Events of Default”); and

 

 

 

WHEREAS, a further Default or Event of Default will occur under the Credit Agreement if
Borrowers fail to pay interest on the Senior Secured Notes when due (the “Anticipated Event of
Default” and, together with the Events of Default, the “Designated Events of Default”);
and

WHEREAS, Borrowers have requested that the Agent and Lenders continue to forbear from
enforcing their rights that arise because of the Designated Events of Default and continue to
consent to the Borrowers temporarily suspending casino operations at one of its currently operating
Casinos (the “Suspended Location”); and

WHEREAS, Borrowers, Lenders, and Agent are parties to that certain Amended and Restated
Forbearance Agreement dated as of February 12, 2009 (the “Amended and Restated Forbearance
Agreement”), pursuant to which Agent and Lenders have agreed to forbear from enforcing their
rights that arise because of the Designated Events of Default and to continue to consent to the
temporary suspension of operations at the Suspended Location for a limited period of time provided
that Borrowers comply with the terms of the Amended and Restated Forbearance Agreement; and

WHEREAS, the parties hereto desire to amend and restate the Amended and Restated Forbearance
Agreement in its entirety as provided herein;

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree that the Amended and Restated Forbearance Agreement
is amended and restated in its entirety as follows:

1. Defined Terms. All capitalized terms used herein (including, without limitation,
in the preamble and recitals hereof) without definition shall have the meanings ascribed thereto in
the Credit Agreement.

2. Forbearance.

2.1 The Lender Group hereby agrees, as of the Forbearance Effective Date (as defined below),
to forbear from exercising any rights or remedies under Section 8.1 of the Credit Agreement with
respect to the Designated Events of Default until the earliest of any of the following: (i) the
date of the occurrence of a breach or default under this Agreement; (ii) the date of the occurrence
of a Default or Event of Default that is not a Designated Event of Default; (iii) the termination
of that certain Forbearance Agreement dated as of February 19, 2009, by and among the Borrowers,
Guarantors and the holders of the Senior Secured Notes party thereto; or (iv) March 2, 2009
(subject to Section 5(b) below) (collectively, the “Forbearance Termination Date”).

2.2 Each Borrower and Guarantor hereby acknowledge and agree that upon the Forbearance
Termination Date, the forbearance provided under this Section 2 shall terminate and the
Lender Group shall have the right to exercise any and all rights and remedies under Section 8.1 of
the Credit Agreement or otherwise under the Loan Documents or under applicable law or at equity due
to the existence of the Designated Events of Default. Each Borrower and Guarantor hereby further
acknowledge and agree that, from and after the Forbearance Termination Date, the Lender Group shall
be under no obligation of any kind whatsoever to forbear from exercising any remedies on account of
the Designated Events of Default or any other Event of Default (whether similar or dissimilar to
the Designated Events of Default).

 

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2.3 The foregoing notwithstanding, if and to the extent that the Lender Group continues to
make Advances or otherwise extend credit under the Credit Agreement, notwithstanding the occurrence
of any Default or Event of Default, whether specified herein or otherwise, (a) such Advances or
other extension of credit which hereafter may be made available to Borrowers shall be made, issued,
caused to be issued, or executed, as applicable, in the Lender Group’s sole and absolute
discretion, and (b) no such action shall be construed as (i) a waiver or forbearance of any member
of the Lender Group’s rights, remedies, and powers against Borrowers, Guarantors or the Collateral
(including, without limitation, the right to terminate without notice the making of Advances or the
making of any other extensions of credit under the Credit Agreement) or (ii) a waiver of any such
Default or Event of Default or the Designated Events of Default.

3. Consent. Notwithstanding anything to the contrary contained in Section 6.3(d) of
the Credit Agreement, the Lenders hereby consent and continue to consent to the Borrowers
suspending casino operations at the Suspended Location at any time during the period beginning on
the Forbearance Effective Date (as defined below) and ending on the Forbearance Termination Date
(the “Forbearance Period”), so long as the Borrowers do not sell, transfer or remove any
Collateral or other personal property (including any Gaming Equipment) from the Suspended Location
or make any material alterations to the Suspended Location, except as previously permitted;
provided, however, that the Borrowers may transfer Collateral or other personal
property (including any Gaming Equipment) from the Suspended Location to one of the Borrowers’
other Casinos, so long as the removal of such equipment from the Suspended Location does not
materially affect the Borrowers’ ability to operate a casino at the Suspended Location.

4. Amendment to Credit Agreement. Schedule 1.1 of the Credit Agreement, Definitions,
is hereby amended and modified by amending and restating the following definition:

““Forbearance Period” has the meaning specified therefor in that certain
Second Amended and Restated Forbearance Agreement dated as of February 25, 2009, by
and among the Borrowers, Guarantors, Agent and Lenders.”

5. Covenants of Borrowers. In consideration of the continued forbearance from the
exercise of remedies by Agent and the undersigned Lenders, Borrowers covenant and agree that,
during the Forbearance Period, Borrowers shall:

(a) Not later than Friday, March 6, 2009, have provided the Agent and the Lenders a 13-week
cash flow forecast for the succeeding 13 calendar weeks, in form and substance satisfactory to
Agent; and

(b) Not later than Monday, March 2, 2009, have provided the Agent and the Lenders with a term
sheet for a restructuring of the indebtedness of the Borrowers and, in such event, the Forbearance
Period shall be extended until March 9, 2009.

 

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6. Acknowledgment of Borrowers and Guarantors. As a material inducement to the
execution by Agent and the undersigned Lenders of this Agreement, each Borrower and Guarantor
hereby acknowledge, confirm and agree as follows:

(a) As of February 24, 2009, the total aggregate outstanding principal amount of the
Obligations under the Credit Agreement with respect to the Advances is $14,857,486.30, and all
Obligations owing by Borrowers, together with interest accrued and accruing thereon, and all fees,
costs, expenses and other charges now or hereafter payable by such Borrower to Agent and each
Lender, are unconditionally owing by Borrowers to Agent and each Lender, without offset, defense,
withholding, counterclaim or deduction of any kind, nature or description whatsoever.

(b) Agent, for the benefit of the Lender Group, has and shall continue to have valid,
enforceable and perfected first-priority liens upon and security interests in the Collateral
granted to Agent, for the benefit of the Lender Group, pursuant to the Loan Documents or otherwise
granted to or held by Agent, for the benefit of the Lender Group.

(c) Upon the occurrence of any Default or Event of Default, other than any Designated Event of
Default, no member of the Lender Group will have any obligation to make any Advances or other
extensions of credit to any Borrower.

7. Binding Effect of Documents. Each Borrower and Guarantor hereby acknowledge,
confirm and agree that: (i) each of the Loan Documents to which it is a party has been duly
executed and delivered to Agent and Lenders thereto by such Borrower or Guarantor, and each is in
full force and effect as of the Forbearance Effective Date (as defined below), (ii) the agreements
and obligations of such Borrower or Guarantor contained in the Loan Documents and in this Agreement
constitute the legal, valid and binding obligations of such Borrower or Guarantor, enforceable
against such Borrower or Guarantor in accordance with their respective terms, and such Borrower or
Guarantor has no valid defense to the enforcement of the obligations under the Credit Agreement,
and (iii) Agent and each Lender are and shall be entitled to the rights, remedies and benefits
provided for in the Loan Documents and under applicable law or at equity.

8. Conditions Precedent to Effectiveness. This Agreement shall become effective as of
the date when, and only when, the following conditions have been satisfied as determined in Agent’s
sole and absolute discretion (the date of such effectiveness being herein called the
“Forbearance Effective Date”):

(a) Agent shall have received duly executed counterparts of this Agreement duly executed by
Borrowers, Guarantors and the Lenders;

(b) Borrowers shall have paid all fees, costs and expenses incurred in connection with this
Agreement and any other Loan Documents (including, without limitation, legal fees and expenses);

(c) The representations and warranties made or deemed made by Borrowers and Guarantors under
this Agreement shall be true and correct; and

 

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(d) The Agent shall have received such other documents as the Agent may request with respect
to any of the foregoing.

9. Representations and Warranties. Each Borrower and Guarantor represents and
warrants as follows:

(a) The execution, delivery and performance of this Agreement are within such Borrower’s or
Guarantor’s, as applicable, powers, have been duly authorized by all necessary action and do not
(i) violate any provision of federal, state, or local law or regulation applicable to such Borrower
or Guarantor, as applicable, the Governing Documents of such Borrower or Guarantor, as applicable,
or any order, judgment, or decree of any court or other Governmental Authority binding on such
Borrower or Guarantor, as applicable, or (ii) conflict with, result in a breach of, or constitute
(with due notice or lapse of time or both) a default under any material contractual obligation of
such Borrower or Guarantor, as applicable.

(b) No authorization, approval or other action by, and no notice to or filing with, any
Governmental Authority, any regulatory body, any Borrower’s or Guarantor’s interest holders or any
Person under any material contractual obligations of any Borrower or any Guarantor is required for
the due execution, delivery and performance by Borrowers and Guarantors of this Agreement.

(c) Each representation or warranty of Borrowers and Guarantors set forth in the Credit
Agreement and the other Loan Documents, is hereby restated and reaffirmed as true and correct in
all material respects (except that such materiality qualifier shall not be applicable to any
representations and warranties that already are qualified or modified by materiality in the text
thereof), on and as of the date of this Agreement, and after giving effect to this Agreement, as if
such representation or warranty were made on and as of the date of, and after giving effect to,
this Agreement (except to the extent that such representations and warranties relate solely to an
earlier date).

(d) This Agreement constitutes the legal, valid and binding obligation of Borrowers and
Guarantors, enforceable against Borrowers and Guarantors in accordance with its terms.

(e) No Default or Event of Default, other than the Designated Events of Default, exists under
the Credit Agreement.

10. Affirmation of Guaranty. By executing this Agreement, each Guarantor hereby
acknowledges, consents and agrees that all of its obligations and liabilities under the provisions
of the Guaranty remain in full force and effect, and that the execution and delivery of this
Agreement and any and all documents executed in connection therewith shall not alter, amend, reduce
or modify its obligations and liability under the Guaranty or any of the other Loan Documents to
which it is a party.

 

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11. No Other Amendments or Waivers. Except in connection with the forbearance,
consent and amendment forth above, the execution, delivery and effectiveness of this Agreement
shall not operate as an amendment of any right, power or remedy of Agent or the Lenders under the
Credit Agreement or any of the other Loan Documents, nor constitute a waiver of any provision of
the Credit Agreement or any of the other Loan Documents. Except as expressly amended hereby, the
text of the Credit Agreement and all other Loan Documents shall remain unchanged and in full force
and effect and Borrowers and Guarantors hereby ratify and confirm their respective obligations
thereunder. This Agreement shall not constitute a modification of the Credit Agreement or any of
the other Loan Documents or a course of dealing with Agent or the Lenders at variance with the Credit Agreement or the other Loan Documents such as to require further
notice by Agent or the Lenders to require strict compliance with the terms of the Credit Agreement
and the other Loan Documents in the future, except as expressly set forth herein. Borrowers and
Guarantors acknowledge and expressly agree that Agent and the Lenders reserve the right to, and do
in fact, require strict compliance with all terms and provisions of the Credit Agreement and the
other Loan Documents, as amended herein. Borrowers and Guarantors have no knowledge of any
challenge to Agent’s or any Lender’s claims arising under the Loan Documents, or to the
effectiveness of the Loan Documents. The forbearance contained herein is limited to the precise
terms hereof, and neither Agent nor any Lender is obligated to consider or consent to any
additional request by Borrowers for any other forbearance with respect to the Credit Agreement.

12. No Disregard of Loan Documents. Each Borrower and Guarantor acknowledge that the
parties hereto have not entered into a mutual disregard of the terms and provisions of the Credit
Agreement or the other Loan Documents, or engaged in any course of dealing in contravention of or
inconsistent with any of the material terms and provisions of the Credit Agreement or the other
Loan Documents, within the meaning of any applicable law of the State of New York, or otherwise.

13. Advice of Counsel. Each Borrower and Guarantor have had the advice of independent
counsel of their own choosing in negotiations for and the preparation of this Agreement, has read
this Agreement in full and final form, and has had this Agreement fully explained to their
satisfaction.

14. Further Assurances. Each Borrower and Guarantor agree, upon the reasonable
request of the Agent, at Borrowers’ expense, to promptly execute and deliver to Agent, or caused to
be executed and delivered to Agent, any document that is necessary to correct any inadvertent
omissions (as agreed to by Borrowers and Agent) in the Credit Agreement and other Loan Documents or
to carry out the intent of this Agreement (as agreed by Borrowers and Agent).

15. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.

16. Integration. This Agreement, together with the other Loan Documents, incorporates
all negotiations of the parties hereto with respect to the subject matter hereof and is the final
expression and agreement of the parties hereto with respect to the subject matter hereof.

17. Loan Document. This Agreement shall be deemed to be a Loan Document for all
purposes.

 

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18. Release by Borrowers; Covenant not to Sue.

(a) Effective on the date hereof, each Borrower and Guarantor hereby waive, release, remise
and forever discharge Agent and each Lender, each of their respective Affiliates, and each of the
officers, directors, employees and agents of Agent, each Lender and their respective Affiliates
(collectively, the “Releasees”), from any and all claims, suits, investigations,
proceedings, demands, obligations, liabilities, causes of action, damages, losses, costs and
expenses, whether based in contract, tort, implied or express warranty, strict liability, criminal
or civil statute or common law of any kind or character, known or unknown, past or present, liquidated or unliquidated, suspected or unsuspected, which any Borrower and
Guarantor ever had from the beginning of the world, or now has against any such Releasee which
relates, directly or indirectly to the Credit Agreement, any other Loan Document, or to any acts or
omissions of any such Releasee under, in connection with, pursuant to or otherwise in respect of
this Agreement, the Credit Agreement or any of the other Loan Documents, except for the duties and
obligations set forth in this Agreement, the Credit Agreement, or any of the other Loan Documents.
As to each and every claim released hereunder, each Borrower and Guarantor hereby represents that
it has received the advice of legal counsel with regard to the releases contained herein, and
having been so advised, specifically waives the benefit of the provisions of Section 1542 of the
Civil Code of California which provides as follows:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH A CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR
HER, MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”

As to each and every claim released hereunder, each Borrower and Guarantor also waives the
benefit of each other similar provision of applicable federal or state law (including without
limitation the laws of the State of New York), if any, pertaining to general releases after having
been advised by its legal counsel with respect thereto.

(a) Each Borrower and Guarantor, on behalf of itself and its respective successors, assigns,
and other legal representatives, hereby absolutely, unconditionally and irrevocably, covenant and
agree with and in favor of each Releasee above that it will not sue (at law, in equity, in any
regulatory proceeding or otherwise) any Releasee on the basis of any claim released, remised and
discharged by such Person pursuant to the above release. Each Borrower and Guarantor further agree
that it shall not dispute the validity or enforceability of the Credit Agreement or any of the
other Loan Documents or any of its obligations thereunder, or the validity, priority,
enforceability or the extent of the Agent’s Lien on any item of Collateral under the Credit
Agreement or the other Loan Documents. If any Borrower or Guarantor, or any of their respective
successors, assigns or other legal representatives violates the foregoing covenant, such Person,
for itself and its respective successors, assigns and legal representatives, agrees to pay, in
addition to such other damages as any Releasee may sustain as a result of such violation, all
attorneys’ fees and costs incurred by such Releasee as a result of such violation.

19. Severability. In case any provision in this Agreement shall be invalid, illegal
or unenforceable, such provision shall be severable from the remainder of this Agreement and the
validity, legality and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.

 

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20. Modification. This Agreement may not be amended, waived or modified in any manner
without the written consent of the party against whom the amendment, waiver or modification is
sought to be enforced.

21. Reference to Loan Documents. Upon and after the effectiveness of this Agreement,
each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Credit Agreement, and each reference in the other Loan
Documents to “the Credit Agreement”, “thereof” or words of like import referring to the Credit
Agreement, shall mean and be a reference to the Credit Agreement as amended and supplemented
hereby. Unless the context of this Agreement clearly requires otherwise, references to the plural
include the singular, references to the singular include the plural, the terms “includes” and
“including” are not limiting, and the term “or” has, except where otherwise indicated, the
inclusive meaning represented by the phrase “and/or.”

22. Counterparts. This Agreement may be executed by one or more of the parties hereto
on any number of separate counterparts, each of which shall be deemed an original and all of which,
taken together, shall be deemed to constitute one and the same instrument. Delivery of an executed
counterpart of this Agreement by facsimile transmission or other electronic method of transmission
shall be as effective as delivery of a manually executed counterpart thereof.

[remainder of this page intentionally left blank]

 

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IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized officers
or representatives to execute and deliver this Agreement as of the day and year first written
above.

	 	 	 	 	 
	BORROWERS: 	 B & B B, INC.,

a Nevada corporation

 	 
	 	By:  	/s/ Sean P. McKay
 	 
	 	 	Name:  	Sean McKay 	 
	 	 	Title:  	CAO 	 
	 

	 	 	 	 	 
	 	CASABLANCA RESORTS, LLC,

a Nevada limited liability company

 	 
	 	By:  	/s/
Sean P. McKay
 	 
	 	 	Name:  	Sean McKay 	 
	 	 	Title:  	CAO 	 
	 

	 	 	 	 	 
	 	OASIS INTERVAL MANAGEMENT, LLC,

a Nevada limited liability company

 	 
	 	By:  	/s/
Sean P. McKay
 	 
	 	 	Name:  	Sean McKay 	 
	 	 	Title:  	CAO 	 
	 

	 	 	 	 	 
	 	OASIS INTERVAL OWNERSHIP, LLC,

a Nevada limited liability company

 	 
	 	By:  	/s/
Sean P. McKay
 	 
	 	 	Name:  	Sean McKay 	 
	 	 	Title:  	CAO 	 

Second Amended And Restated Forbearance Agreement

 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	OASIS RECREATIONAL PROPERTIES, INC.,

a Nevada corporation

 	 
	 	By:  	/s/
Sean P. McKay
 	 
	 	 	Name:  	Sean McKay 	 
	 	 	Title:  	CAO 	 
	 

	 	 	 	 	 
	 	RBG, LLC,

a Nevada limited liability company

 	 
	 	By:  	/s/
Sean P. McKay
 	 
	 	 	Name:  	Sean McKay 	 
	 	 	Title:  	CAO 	 
	 

	 	 	 	 	 
	 	VIRGIN RIVER CASINO CORPORATION,

a Nevada corporation

 	 
	 	By:  	/s/
Sean P. McKay
 	 
	 	 	Name:  	Sean McKay 	 
	 	 	Title:  	CAO 	 

Second Amended And Restated Forbearance Agreement

 

 

 

	 	 	 	 	 

	 	 	 	 	 
	GUARANTORS: 	BLACK GAMING, LLC,

a Nevada limited liability company

 	 
	 	By:  	/s/
Sean P. McKay
 	 
	 	 	Name:  	Sean McKay 	 
	 	 	Title:  	CAO 	 
	 

	 	 	 	 	 
	 	R. BLACK, INC., 

a Nevada corporation

 	 
	 	By:  	/s/
Sean P. McKay
 	 
	 	 	Name:  	Sean McKay 	 
	 	 	Title:  	CAO 	 

Second Amended And Restated Forbearance Agreement

 

 

 

	 	 	 	 	 

	 	 	 	 	 
	AGENT AND LENDERS: 	WELLS FARGO FOOTHILL, INC., 

a California corporation, as 

Agent and as a Lender

 	 
	 	By:  	/s/ Steve Scott
 	 
	 	 	Name:  	Steve Scott 	 
	 	 	Title:  	VP 	 
	 

Second Amended And Restated Forbearance AgreementFiled by Bowne Pure Compliance

Ex. 10.82

Syntroleum — Management Stock Option Agreement

CONFIDENTIAL

This stock option Agreement (the “Agreement”) is effective as of the Grant Date set forth in the
attached Notice. The Agreement is by and between Syntroleum Corporation, a Delaware corporation
(“Syntroleum”), and the Grantee listed in the Notice. The Agreement evidences the grant by
Syntroleum of the Option to Grantee to purchase the number of shares of Syntroleum common stock,
par value $0.01 per share Common Stock indicated in the Notice. The grant is made pursuant to
action of the Board of Directors and Grantee’s acceptance of the Option in accordance with the
provisions of the Plan. Syntroleum and Grantee agree as follows.

	1.	 	Definitions

	 	1.1.	 	“Change in Control” shall be deemed to occur if any person or group within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 shall become the
beneficial owner of 25% or more of the shares of Syntroleum Common Stock then outstanding.
A Change of Control shall not have occurred if the beneficial owner is Syntroleum, a
subsidiary of Syntroleum or an employee benefit plan of Syntroleum.

	 
	 	1.2.	 	“Common Stock” means the shares of Syntroleum common stock, par value $0.01 per share.

	 	1.3.	 	“Committee” means the Nominating and Compensation Committee of Syntroleum’s Board of
Directors.

	 
	 	1.4.	 	“Employee in Good Standing” means a Syntroleum employee who is not in violation of any
of the following terms and conditions of his employment agreement and/or general company
policy;

	 	1.4.1.	 	has not threatened and has no pending legal or quasi-legal proceeding against
Syntroleum including but not limited to negotiations (related to employment),
mediations, arbitration or litigation;

	 
	 	1.4.2.	 	is current in all monies owed Syntroleum;

	 
	 	1.4.3.	 	has been in the continuous employment of Syntroleum from the Grant Date;
1.4.4. is not on performance or disciplinary probation,

	 
	 	1.4.5.	 	is not under felony indictment;

	 
	 	1.4.6.	 	has not resigned. Authorized leaves of absence from Syntroleum shall not constitute
a resignation/termination of employment for purposes of this Agreement. For purposes of
this Agreement, an authorized leave of absence shall be an absence while Grantee is on
military leave, sick leave, or other bona fide leave of absence so
long as Grantee’s right to employment with Syntroleum is guaranteed by statute or
contract and is mandatory in nature.

	 	1.5.	 	“Exercise Price” means the price set out in line 5 of Exhibit A of this Agreement

 

 

Syntroleum — Management Stock Option Agreement

CONFIDENTIAL

	 	1.6.	 	“Good Reason” means

	 	1.6.1.	 	the assignment to the Grantee of any duties that are materially inconsistent with the
Grantee’s position or any other assignment that results in a material diminution of the
Grantee’s position, authority or responsibilities (excluding performance or
disciplinary action) that are not generally imposed on Syntroleum employees as a
whole. Good Reason does not include any isolated or inadvertent action not taken in
bad faith and remedied by Syntroleum in the normal course of business after receipt of
written notification.

	 	1.6.2.	 	the assignment of the Grantee to an office outside the Tulsa metropolitan area unless
the assignment is necessary in order to complete a Syntroleum project, is not intended
to be permanent, does not last for more than twelve (12) months and for which
Syntroleum compensates the Grantee as per common industry practices (if any).

	 	1.7.	 	“Grant Date” means the date set out in line 3 of Exhibit A of this Agreement.

	 	1.8.	 	“Grantee” means the person set out in line 1 of Exhibit A of this Agreement.

	 	1.9.	 	“Incentive Stock Option(s)” or “Option(s)” means the grant by Syntroleum to Grantee of
the right to purchase shares of Common Stock pursuant to the terms of this Agreement and
the Plan. The shares subject to the Option are intended to be Incentive Stock Option (ISO)
 shares as described in Section 422(b) of the Internal Revenue Code of 1986, as amended.

	 	1.10.	 	“Notice” means Exhibit A attached to this Agreement.

	 	1.11.	 	“Performance Test” has the definition set out in Exhibit A of the Site License
Agreement attached to the Biofining Master License Agreement between Syntroleum Corporation
and Dynamic Fuels dated June 22, 2007.

	 	1.12.	 	“Plan” means the Syntroleum Corporation 2005 Stock Incentive Plan as amended

	 	1.13.	 	“Plant” means the Dynamic Fuels bio-refinery located in Geismar, Louisiana.

	2.	 	Vesting: The Option shall vest as indicated in the Notice except as otherwise
provided herein.

 

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Syntroleum — Management Stock Option Agreement

CONFIDENTIAL

	3.	 	Exercise Period: The vested portion of the Option may be exercised from time to time
with respect to any number of shares on any regular business day at Syntroleum’s offices until
the earliest to occur of the following dates subject to a ten thousand (10,000) share minimum or
balance of ownership whichever is less.

	 	3.1.	 	30 month period after the first running of the Plant Performance Test if the Grantee is
an Employee in Good Standing;

	 	3.2.	 	30 month period after the first running of the Plant Performance Test if the Grantee’s
employment is terminated without cause or the Grantee resigns for Good Reason, or

	 	3.3.	 	30 month period after the first running of the Plant Performance Test if Grantee’s
termination of employment with Syntroleum is by reason of death or disability or
retirement, or

	 	3.4.	 	10 business days following the date of Grantee’s termination of employment for any
other reason, or

	 	3.5.	 	the tenth anniversary of the Grant Date. [This language is required in order for the
Option to qualify as an ISO.]

	4.	 	Exercise:

	 	4.1.	 	The Option may be exercised only by Grantee or, in the event or Grantee’s death, by the
person to whom the Option was transferred by delivering or mailing written notice of the
exercise to the Secretary of Syntroleum in the form shown in Exhibit B. The written notice
shall be signed by each person entitled to exercise the Option and shall specify the
address and Social Security number of each such person. If any person other than Grantee
purports to be entitled to exercise all or any portion of the Option, the written notice
shall be accompanied by proof, satisfactory to Syntroleum, of that entitlement. All legal
expenses incurred by Syntroleum in exercising the Option will be to the Grantee’s account.

	 	4.2.	 	The written notice of exercise will be effective and the Option shall be deemed
exercised to the extent specified in the notice on the date one day after the written
notice is received by the Secretary of Syntroleum at its offices during regular business
hours and is accompanied by full payment of the exercise price for the shares as to which
the Option is exercised in certified funds.

	 	4.3.	 	In the event of a Change in Control, the Option will be canceled, and Syntroleum will
issue to the Grantee Common Stock equal in number to the gross number of shares that would
have been acquired upon the exercise of the remaining unexercised portion of the Option.
Grantee is responsible for its tax obligations.

 

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	5.	 	Transfer of Shares; Tax Withholding. As soon as practicable after receipt of an
effective written notice of exercise and full payment of the exercise price as provided in
Section 4.0, or upon the occurrence of a Change in Control, the Secretary of Syntroleum shall
cause ownership of the appropriate number of shares of Syntroleum Common Stock to be issued to
the person exercising the Option or the person entitled to receive shares by reason of the
Change in Control by delivering to such person a certificate for such number of shares
registered in the name of such person. Each such certificate shall bear a legend describing, to
the extent applicable, the restrictions imposed by applicable state
and federal securities laws. Notwithstanding the foregoing, if Syntroleum requires payment of any tax required by law to be
withheld with respect to a Notice or a Change in Control, the Secretary shall not transfer
ownership of shares until the required payment is made. Syntroleum reserves the right to
withhold cash from salary or other cash payments made to the Grantee or to retain shares of
Common Stock that would otherwise be transferred pursuant to the exercise of an Option or the
Change in Control in order to satisfy the tax withholding obligations of Syntroleum resulting
from the exercise of an Option or the Change in Control.

	6.	 	Miscellaneous.

	 	6.1.	 	The rights under this Agreement may not be transferred except by will or the laws of
descent and distribution.

	 	6.2.	 	The rights under this Agreement may be exercised during his lifetime only by Grantee.
The terms of the Option shall be binding upon the executors, administrators, heirs, and
successors of Grantee.

	 	6.3.	 	The Option may not be exercised, and the exercise period shall be extended day for day,
if the Committee determines that the issuance of shares of Syntroleum’s Common Stock upon
such exercise of the Option would constitute a violation of any applicable federal or state
securities or other law or regulation or restrict Syntroleum’s ability to use its net
operating loss for tax purposes; provided however, that the exercise period shall in no
event be extended beyond the tenth anniversary of the Grant Date. In addition, the net
operating loss restriction on the Grantee’s ability to exercise will not apply in the event
of a Change in Control. Grantee shall have no rights as a stockholder with respect to any
 shares covered by the Option until the date of the actual issuance of the shares.

	 	6.4.	 	No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash,
securities or other property) or distributions or other rights for which the record date is
prior to the date the shares or any part thereof are issued pursuant to exercise of all or
any part of the Option.

	 	6.5.	 	The number of shares of Common Stock subject to the Options will be adjusted as
appropriate to avoid dilution of the Grantee’s Option rights pursuant to the Plan, and
Sections 409A and 424 of the Internal Revenue Code of 1986, as amended. No adjustment to
the number of shares subject to the Options will be made if additional shares are issued in
the following situations:

	 	6.5.1.	 	shares issued and reserved as employee shares as described in the Plan;

	 	6.5.2.	 	shares issued for consideration other than cash pursuant to a merger, consolidation,
acquisition, or similar business combination approved by the Board;

	 	6.5.3.	 	shares issued at or above market price;

	 	6.5.4.	 	shares issued pursuant to any equipment loan or leasing arrangement, real property
leasing arrangement or debt financing from a bank or similar financial institution
approved by the Board.

 

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	 	6.6.	 	Grantee agrees not to disclose to any person, directly or indirectly, the terms of this
Agreement.

	 	6.7.	 	The existence of the Option granted in this Agreement shall not affect in any way the
right or the power of Syntroleum or its stockholders to make or authorize any
recapitalizations, reorganizations or other changes in Syntroleum’s capital structure or
its business, or any merger or consolidation of Syntroleum, or any issue of bonds,
debentures, preferred or prior preference stocks ahead of or affecting the Common Stock or
the rights thereof, or the dissolution or liquidation of Syntroleum or any sale or transfer
of all or any part of its assets or business, or any other corporate act or preceding,
whether of a similar character or otherwise.

	 	6.8.	 	The validity and effect of this Agreement and the rights and obligations of the
parties, and all other persons affected by this Agreement shall be construed and determined
in accordance with the laws of the State of Oklahoma in Tulsa Oklahoma.

	 	6.9.	 	Any dispute arising out of or in connection with this Agreement, including any question
regarding its existence, validity or termination, shall be addressed exclusively in the
following priority order:

	 	6.9.1.	 	Negotiation. Syntroleum and the Grantee (the “Parties” or “Party”) shall arrange a
meeting at the Syntroleum office in person to discuss the issues of each Party and
negotiate for a resolution of the dispute. The period of negotiation shall extend no
longer than thirty (30) calendar days from the first meeting of the negotiators. Each
Party shall work in good faith to accommodate their schedules to allow a meeting to
occur.

	 	6.9.2.	 	Mediation. If the Parties have failed to resolve the dispute by negotiation, the
Parties shall submit to mediation prior to seeking resolution by binding arbitration in
Tulsa, OK. The Parties will cooperate with one another in selecting a mediator from
the American Arbitration Association panel of neutrals, which shall be requested to
promptly schedule the mediation proceedings. The Parties covenant that they will
participate in the mediation in good faith and they will each bear their own costs.
All offers, promises, conduct and statements, whether oral or written, made in the
course of the mediation by any of the parties, their agents, employees, experts and
attorneys, and by the mediator, are expected to be treated as confidential, privileged
and inadmissible for any purpose, including impeachment, in any arbitration or other
proceeding involving the Parties, provided that evidence that is otherwise admissible
or discoverable shall not be rendered inadmissible or non-discoverable as a result of
its use in the mediation. If the dispute is not resolved within thirty (30) calendar
days from the date of the submission of the dispute to mediation, the administration
of the arbitration shall proceed forthwith. The mediator shall be disqualified from
serving as arbitrator in the case. This clause shall not preclude the Parties from
seeking provisional remedies in aid of arbitration, such as a temporary or permanent
injunction or restraining order to prevent a continuing harm to a Party, from a court
of appropriate jurisdiction.

 

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	 	6.9.3.	 	Arbitration. Within five (5) business days after the Parties have failed to resolve
the dispute by negotiation, the dispute shall be resolved by binding arbitration in
Tulsa, Oklahoma, before three (3) arbitrators. The arbitration shall be administered
by the American Arbitration Association pursuant to its Commercial Rules for
Arbitration. The arbitrators’ award may be enforced in State District Courts in Tulsa
County, Oklahoma, the United States District Court for the Northern District of
Oklahoma or in any other court having jurisdiction over the Parties. The Parties
covenant that they will participate in the arbitration in good faith, and that they
will each bear their own costs. This clause shall not preclude the Parties from
seeking provisional remedies in aid of arbitration, such as a temporary or permanent
injunction or restraining order to prevent a continuing harm to a Party, from a court
of appropriate jurisdiction.

	 	6.9.4.	 	The Parties agree that the dispute resolution priority set forth herein is a material
term of this agreement and that the damages for failure to comply with the dispute
resolution priority are and would be difficult to measure. Consequently, the Parties agree
that in the event a Party elects to ignore the dispute resolution priority order
requirements set forth in this Section, the Party making the election shall be obligated for
all (internal and external) costs, fees and expenses, including attorneys’ fees, of the
other Party, regardless of how the dispute is ultimately decided. In other words, any Party
electing to forego the dispute resolution priority in Section 5.9 also elects to pay the
fees, costs and expenses of the other Party even if the electing Party ultimately prevails.

	 	6.10.	 	Every notice or other communication relating to this Agreement shall be in writing and
shall be mailed to or delivered to the party for whom it is intended at such address as may
from time to time be designated by it in a notice mailed or delivered to the other party as
herein provided. Unless and until some other address is designated, all notices or
communications by Grantee to Syntroleum shall be mailed or delivered to Syntroleum at the
offices of its Secretary at 5416 S Yale Suite 400, Tulsa, Oklahoma 74135, and all notice or
communications by Syntroleum to Grantee may be given to Grantee personally or may be mailed
to him.

	 	6.11.	 	This Agreement and the grant of the Option pursuant to this Agreement are subject to
the terms of the Plan, and all the provisions applicable to Options in general and
Incentive Stock Option (ISO) shares as described in Section 422(b) of the Internal Revenue
Code of 1986, as amended in particular in the Plan are incorporated by reference into this
Agreement; however, where the terms of the Plan and the terms of this Agreement are
inconsistent, the terms of this Agreement shall govern.

 

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	7.	 	Additional Payments.

	 	7.1.	 	Anything in this Agreement to the contrary notwithstanding, in the event it shall be
determined that the Grantee shall become entitled to payments and/or benefits provided by
this Agreement or any other agreement or arrangement between Syntroleum and Grantee
resulting from a change of ownership or effective control of Syntroleum covered by Section
280G(b )(2) of the Code as a result of such change in ownership or effective control of
Syntroleum (a “Payment”), and if the payment would be subject to the excise tax imposed by
Section 4999 of the Code or any interest or penalties are incurred by the Grantee with
respect to such excise tax (such excise tax, together with any such interest and penalties,
are hereinafter collectively referred to as the “Excise Tax”), then the Grantee shall be
entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that
after payment by the Grantee of all taxes (including any interest or penalties imposed with
respect to such taxes), including, without limitation, any income taxes (and any interest
and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up
Payment, the Grantee retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.

	 	7.2.	 	All determinations required to be made under this paragraph 7, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such determination, shall be made by a nationally
or regionally recognized accounting firm (the “Accounting Firm”) which shall provide
detailed supporting calculations both to Syntroleum and the Grantee within 15 business days
of the receipt of notice from the Grantee that there has been a Payment, or such earlier
time as is requested by Syntroleum. The Accounting Firm shall be jointly selected by
Syntroleum and the Grantee and shall not, during the two years preceding the date of its
selection, have acted in any way on behalf of Syntroleum or its affiliated companies. All
fees and expenses of the Accounting Finn shall be borne solely by Syntroleum. Any Gross-Up
Payment, as determined pursuant to this paragraph 7, shall be paid by Syntroleum to the
Grantee within five (5) days of the receipt of the Accounting Firm’s determination. If the
Accounting Firm determines that no Excise Tax is payable by the Grantee, it shall furnish
the Grantee with a written opinion, based upon “substantial authority” (within the meaning
of Section 6230 of the Code), that failure to report the Excise Tax on the Grantee’s
applicable federal income tax return would not result in the imposition of a negligence or
similar penalty. Any determination by the Accounting Firm shall be binding upon Syntroleum and the Grantee, absent manifest
error. As a result of the uncertainty in the application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by Syntroleum should have been made
(“Underpayment”), consistent with the calculations required to be made hereunder. In the
event that Grantee thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has occurred and any
such Underpayment shall be promptly paid by Syntroleum to or for the benefit of the
Grantee.

 

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	 	7.3.	 	Compliance With Section 409A. Notwithstanding anything to the contrary herein, if any
of the benefits payable pursuant to this Agreement shall be deemed to constitute
nonqualified deferred compensation, within the meaning of Section 409A of the Internal
Revenue Code, then the payment of such benefits shall be delayed until the earliest date on
which such benefits can be paid without subjecting the Grantee to the payment of any
interest or tax penalty which may be imposed under Section 409A of the Internal Revenue
Code, but in no event later than six months and five days after the Employee’s separation
from service, within the meaning of Section 409A.

	8.	 	Previous Agreement. Grantee agrees to waive any rights she has under the restricted stock
agreement between Grantee and Syntroleum dated July 12th, 2007, and that agreement
is hereby terminated. The restricted stock issued to Grantee pursuant to that agreement and
held by Syntroleum shall be canceled except for 15,000 shares of such restricted stock which
shall remain issued and outstanding and held by Grantee, fully paid, and free and clear of any
liens, claims or encumbrances. Pursuant to the terms of the Plan, the Shares of Common Stock
subject to that agreement shall not count against the number of Shares of Common Stock
available for Awards under the Plan and shall be available for future Awards.

IN WITNESS WHEREOF, Syntroleum, by its duly authorized officer, and Grantee have signed this
Agreement as of the date first above written.

	 	 	 	 	 	 	 
	SYNTROLEUM CORPORATION

	 	Grantee	 
	 
	 	 	 	 	 	 
	Name: Robert B. Rosene, Jr.               
                        	 	Name:
	 	Karen Gallagher
 

	 	 
	 
	 	 	 	 	 	 
	Signature: /s/ Robert B. Rosene, Jr.	 	Signature: /s/ Karen L. Gallagher
	 
	 	 	 	 	 	 
	Date: 11/21/08	 	Date: 11/21/08
	 
	 	 	 	 	 	 
	Address: 5416 South Yale, Suite Tulsa OK 74135
	 	 	 	 	 	 

 

8

 

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Exhibit A

Notice of Stock Option Grant

	1.	 	Name (“Grantee”): Karen Gallagher

	 
	2.	 	Address: 5520 S. Yorktown Pl, Tulsa, OK 74105

	 
	3.	 	Date of Grant (“Grant
Date”): November 21, 2008

	 
	4.	 	Number of shares of Common
Stock subject to Option: 485,000

	 
	5.	 	Exercise Price per share of common stock (“Exercise Price”): 66 Cents (.66)

	 
	6.	 	Vesting Schedule:

	 	a.	 	Options with respect to 60,000 shares of Syntroleum common stock may be
exercised at any time after the Grant Date, subject to the limitation set forth in the
Agreement.

	 	b.	 	Options with respect to 60,000 shares of Syntroleum common stock may be
exercised at any time after the Committee certifies to the Board of Directors that
substantially all the financing for the Plant has occurred.

	 
	 	c.	 	Options with respect to 65,000 shares of Syntroleum common stock may be
exercised at any time after the Committee certifies to the Board of Directors that
mechanical completion of the Plant has occurred.

	 
	 	d.	 	The remaining shares of Syntroleum common stock subject to this option grant
may be exercised at any time after the Committee certifies to the Board of Directors
that the Plant has successfully completed the Performance Test.

 

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EXHIBIT B

ELECTION OF EXERCISE OF STOCK OPTIONS

The undersigned hereby gives notice to Syntroleum Corporation (“Syntroleum”) that the undersigned
is exercising stock options issued to him pursuant to the terms of the Stock Option Agreement
between Syntroleum and the undersigned, dated as of
 _____, to purchase
 _____ 
shares of the common
stock of Syntroleum (the “Agreement”). The undersigned acknowledges that no shares will be issued
before Syntroleum receives payment of the purchase price for the shares of common stock and for
payment of any tax withholding obligation.

DATED this
 _____ 
day of _____, 20
 _____.

	 	 	 	 	 
	 

	 	 

	 	 
	 

	 	Name	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	Signature	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	Address	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	Social Security Number	 	 

 

10

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