Document:

Exhibit 10.88

Exhibit
10.88

SECURITIES PURCHASE AGREEMENT

THIS
SECURITIES PURCHASE AGREEMENT (this “Agreement”) is dated October 14, 2009, between
Syntroleum Corporation, a Delaware corporation (the “Company”) and, Fletcher International, Ltd., a
company domiciled in Bermuda (the “Purchaser”).

RECITALS

WHEREAS, the Company desires to issue and sell to the Purchaser, and the Purchaser desires to
purchase from the Company, authorized but unissued shares of Common Stock upon the terms and
subject to the conditions set forth in this Agreement; and

WHEREAS, the Company and the Purchaser have executed and delivered that certain Settlement
Agreement of even date herewith (the “Settlement Agreement”), which Settlement Agreement releases
all obligations and claims evidenced by, under, relating to or arising out of that certain
Agreement dated as of November 18, 2007 by and between the Company and the Purchaser, including all
amendments and supplements thereto, and all related documents, certificates and instruments
(collectively, the “Prior Agreement”), and releases the Company, the Purchaser and their employees,
Affiliates, representatives, stockholders, directors and agents of all obligations, action, claims,
causes of action, losses, controversies, agreements and demands arising thereunder, including
without limitation all claims arising out of Civil Action No. 08-cv-5851, Fletcher International,
Ltd. vs. Syntroleum Corporation, in the United States District Court for the Southern District of
New York.

AGREEMENT

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for
other good and valuable consideration the receipt and adequacy of which are hereby acknowledged,
the Company and the Purchaser agree as follows:

ARTICLE I.

DEFINITIONS

1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, for
all purposes of this Agreement, the following terms have the meanings set forth in this Section
1.1:

“Acquiring Person” means, in connection with any Change of Control, (i) the continuing
or surviving Person of a consolidation or merger with the Company (if other than the
Company), (ii) the transferee of all or substantially all of the properties or assets of the
Company, (iii) the corporation consolidating with or merging into the Company in a
consolidation or merger in connection with which the Common Stock is changed into or
exchanged for stock or other securities of any other Person or cash or any other property,
(iv) the entity or group acting in concert acquiring or possessing the power to cast the
majority of the eligible votes at a meeting of the Company’s stockholders at which directors
are elected, (v) in the case of a capital reorganization or reclassification of the Common
Stock pursuant to which the shareholders of the Company immediately prior to such
reorganization or reclassification do not beneficially own at least fifty percent (50%)
of each class of voting securities of the Company outstanding immediately following
such reorganization or reclassification, the Company, or (vi) if the holders of Common Stock
are to receive securities of a Person that controls the Person that would be otherwise
treated as the Acquiring Person directly or indirectly through one or more intermediaries,
then such controlling Person shall be treated as the Acquiring Person for the other
provisions of this Agreement.

 

 

 

“Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a Person as
such terms are used in and construed under Rule 405 under the Securities Act. With respect
to the Purchaser, any investment fund or managed account that is managed on a discretionary
basis by the same investment manager as the Purchaser will be deemed to be an Affiliate of
the Purchaser.

“Board of Directors” means the board of directors of the Company.

“Business Day” means any day except any Saturday, any Sunday, any day which is a
federal legal holiday in the United States or any day on which banking institutions in the
State of New York or Nasdaq is closed.

“Change of Control” means:

(i) an acquisition of the Company by means of merger or other form of corporate
reorganization in which outstanding shares of the Company are exchanged for securities or
other consideration issued, or caused to be issued, by the Acquiring Person or its parent,
subsidiary or affiliate (each as defined in Rule 12b-2 of the Exchange Act),

(ii) a sale of all or substantially all of the assets of the Company (on a consolidated
basis) in a single transaction or series of related transactions,

(iii) any tender offer, exchange offer, stock purchase or other transaction or series
of related transactions by the Company in which the power to cast the majority of the
eligible votes at a meeting of the Company’s stockholders at which directors are elected is
transferred to a single entity or group acting in concert, or

(iv) a capital reorganization or reclassification of the Common Stock pursuant to which
the shareholders of the Company immediately prior to such reorganization or reclassification
do not beneficially own at least fifty percent (50%) of each class of voting securities of
the Company outstanding immediately following such reorganization or reclassification.
Notwithstanding anything contained herein to the contrary, the change in the state of
incorporation of the Company shall not in and of itself constitute a Change of Control.

“Code” means the Internal Revenue Code of 1986, as amended, and the treasury
regulations thereunder.

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

 

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“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.

“Existing Registration Statement” means that registration statement on Form S-3 filed
March 12, 2009 by the Company with the SEC, as amended (Registration No. 333-157879), along
with any amendments and supplements thereto and any replacement registration statement with
respect thereto.

“Initial Closing Shares” means the shares of Common Stock issued to the Purchaser in
the Initial Closing pursuant to this Agreement and upon the exercise of the Initial Closing
Warrant.

“Material Adverse Effect” means any material adverse effect with respect to (A) the
business, properties, assets, operations, results of operations, revenues, or condition,
financial or otherwise, of the Company and its subsidiaries taken as a whole, (B) the
legality, validity or enforceability of the Agreement and the Warrants, or the Existing
Registration Statement or Prospectus, or (C) the Company’s ability to perform fully on a
timely basis its obligations under the Agreement or the Warrants.

“Nasdaq” shall mean the Nasdaq Capital Market, but if the Nasdaq Capital Market is not
then the principal U.S. trading market for the Common Stock, then “Nasdaq” shall be deemed
to mean the principal U.S. trading market on which the Common Stock, or such other
applicable common stock, is then traded.

“Person” means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any kind.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

“Shares” means the shares of Common Stock issued or issuable to the Purchaser pursuant
to this Agreement and the Warrants.

“Subsequent Closing Shares” means the shares of Common Stock issued to the Purchaser in
a Subsequent Closing pursuant to this Agreement and upon the exercise of a Subsequent
Closing Warrant.

“Tax Affiliate” means any Person in which the Purchaser, directly or indirectly through
one or more intermediaries, owns any equity interest.

“Tax Covenants” means Sections 4.2(a), (b), (c) and (d) of this Agreement.

“Transaction Documents” means this Agreement, the Warrants, and any other documents or
agreements executed and delivered in connection with the transactions contemplated
hereunder.

 

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ARTICLE II.

PURCHASE AND SALE

2.1 Closings.

(a) Initial Closing. Subject to the terms and conditions set forth in this Agreement,
the initial purchase and sale of shares of Common Stock (the “Initial Closing”) shall take place at
9:30 a.m., New York City time, on October 14, 2009 unless the Purchaser and the Company shall
mutually agree on a different date and time (the “Initial Closing Date”). At the Initial Closing,
the Company shall issue and the Purchaser shall acquire from the Company:

(i) 1,513,833 shares of Common Stock at a price per share equal to
$2.6423 (“Per Share Purchase Price”). The purchase price shall be paid at the Initial
Closing by wire transfer as directed by the Company; and

(ii) a warrant in the form attached hereto as Annex A (the “Initial Closing Warrant”). The
Warrant delivered at the Initial Closing shall cover 1,892,291 shares of Common Stock
and shall be exercisable at a per share price of $3.3029.

(b) Subsequent Closing. Until 6:00 p.m., New York City time on June 30, 2010 (the
“Expiration Date”), the Purchaser shall have the right to purchase at the Per Share Purchase Price
(subject to adjustment pursuant to Sections 2.1(d) and 4.5(b)(iii)(C) hereof) up to a maximum of
$8,000,000.00 of Common Stock from the Company at up to two closings of a minimum of $4,000,000.00
for the first such closing and up to the remainder of the $8,000,000.00, if any, at the second such
closing (each a “Subsequent Closing” and together with the Initial Closing, each a “Closing”).

(i) To exercise the right to purchase shares of Common Stock in a Subsequent Closing, the
Purchaser shall deliver a notice in the form attached hereto as Annex B (the “Purchaser Notice”) to
the Company at least three (3) Business Days prior to the Expiration Date; provided, however, that
the Purchaser shall not be entitled to deliver a Purchaser Notice (A) if the Purchaser shall have
breached any of the Tax Covenants; (B) if (1) the Purchaser shall have materially breached any of
its obligations (other than the Tax Covenants) under this Agreement or the Warrants (as defined
below), (2) such breach caused material damage or loss to the Company, and (3) an investment by the
Purchaser at a Subsequent Closing would cause the Company additional material damage or loss; or
(C) if the sale of the Subsequent Closing Shares to the Purchaser would result in the breach of
Section 4.2(a) of this Agreement (each of the conditions specified in (A), (B) and (C) being
referred to herein as the “Non-Exercise Conditions”).

 

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(ii) Subject to (i) above, the date of a Subsequent Closing shall be set forth in the
Purchaser Notice delivered in connection therewith; provided, however, that such date shall be no
less than three (3) Business Days after the Company’s receipt of the Purchaser Notice and no later
than the Expiration Date.

(iii) At each Subsequent Closing, Purchaser shall deliver to the Company, via wire transfer,
immediately available funds equal to the aggregate purchase price for the Subsequent Closing Shares
to be purchased at such Subsequent Closing, and the Company shall deliver to each Purchaser the
Subsequent Closing Shares purchased at such Subsequent Closing and a Warrant in the form attached
hereto as Annex A (a “Subsequent Closing Warrant,” and together with the Initial Closing Warrant,
the “Warrants”) evidencing rights to purchase from the Company, subject to the terms and conditions
set forth in such Subsequent Closing Warrant and this Agreement, that number of shares of Common
Stock as is equal to 125% of the number of shares of Common Stock issued to the Purchaser at such
Subsequent Closing at an exercise price of 125% of the Per Share Purchase Price.

(c) Notwithstanding anything to the contrary in Section 2.1(b) or elsewhere in this Agreement,
in no event (including the occurrence of a Non-Exercise Condition) shall the Expiration Date be
extended.

(d) For the purpose of Section 2.1(b), in case the Company may effect any subdivision or
combination of the issued Common Stock, whether by reason of any dividend or distribution of units,
split, recapitalization, reorganization, spin-off, combination or other similar change, then (i) in
the case of any such distribution, immediately after the close of business on the record date for
the determination of holders of any class of securities entitled to receive such distribution, or
(ii) in the case of any such subdivision or combination, at the close of business on the Business
Day immediately prior to the Business Day upon which such Company action becomes effective, the Per
Share Purchase Price shall be proportionately changed.

2.2 Closing Conditions.

(a) The obligations of the Company with respect to the Initial Closing and each Subsequent
Closing are subject to the performance by the Purchaser of its obligations hereunder and the
payment of the applicable price with respect to the shares of Common Stock purchased at such
Closing and to the satisfaction of the following additional conditions precedent (in each case,
unless waived in writing by the Company):

(i) As of each applicable Closing Date, the representations and warranties made
by the Purchaser in this Agreement shall be true and correct, except those
representations and warranties which address matters only as of a particular date,
which shall be true and correct as of such date;

(ii) The Purchaser shall be in compliance in all material respects with all of
the covenants and agreements in this Agreement;

(iii) On the applicable Closing Date, the Company shall have received from the
Purchaser a certificate of an appropriate officer of the Purchaser dated as
of such Closing Date certifying as to the matters set forth in the foregoing
clauses (i) and (ii);

 

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(iv) At the Initial Closing the Purchaser shall have executed and delivered the
Settlement Agreement and such agreement shall be in full force and effect; and

(v) With respect to each Subsequent Closing none of the Non-Exercise Conditions
shall exist at the time of such Subsequent Closing.

(b) The obligations of the Purchaser with respect to the Initial Closing and each Subsequent
Closing hereunder are subject to the performance by the Company of its obligations hereunder and to
the satisfaction of the following additional conditions precedent (in each case, unless waived in
writing by the Purchaser):

(i) As of each applicable Closing Date, the representations and warranties made by the Company
in this Agreement shall be true and correct, except those representations and warranties which
address matters only as of a particular date, which shall be true and correct as of such date;

(ii) The Company shall be in compliance in all material respects with all of the covenants and
agreements in this Agreement;

(iii) On the applicable Closing Date, the Purchaser shall have received a certificate of the
Chief Executive Officer and the Principal Financial Officer of the Company dated as of such Closing
Date stating as to the matters set forth in the foregoing clauses (i) through (ii);

(iv) At the Initial Closing the Company shall have executed and delivered the Settlement
Agreement and such agreement shall be in full force and effect; and

(v) On the applicable Closing Date, the Existing Registration Statement shall be effective to
cover all of the Shares and the Warrants issuable hereunder and the Shares issuable upon exercise
of the Warrants.

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

3.1 Representations and Warranties of the Company. The Company hereby makes the
following representations and warranties to the Purchaser on each Closing Date:

(a) Offering. The Company has authorized the sale and issuance of all shares of
Common Stock, the Warrants issuable under this Agreement and the shares of Common Stock issuable
upon exercise of the Warrants (the “Offering”). The Offering, and any subsequent issuance of
shares of Common Stock upon exercise of the Warrants will, subject to compliance by the Purchaser
with the applicable representations and warranties contained in Section 3.2 hereof and with the
applicable covenants and agreements contained in Article IV hereof, be registered under the
Securities Act.

 

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(b) Incorporation. The Company has been duly incorporated and is validly existing in
good standing under the laws of Delaware or, after the relevant Closing Date, if another entity has
succeeded the Company in accordance with the terms hereof, under the laws of its jurisdiction of
incorporation.

(c) Authorization. The execution, delivery and performance of this Agreement and the
Warrants (including the authorization, sale, issuance and delivery of the shares of Common Stock
issuable hereunder and thereunder) have been duly authorized by all requisite corporate action and
no further consent or authorization of the Company, its Board of Directors or its stockholders is
required.

(d) Execution and Delivery. This Agreement and the Warrants have been duly executed
and delivered by the Company and are valid and binding agreements enforceable against the Company
in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization,
moratorium and similar laws of general applicability relating to or affecting creditors’ rights
generally and to general principles of equity. The issuance of the shares of Common Stock issuable
hereunder and under the Warrants is not and will not be subject to any preemptive right or rights
of first refusal that have not been properly waived or complied with and will not trigger any
antidilution or similar rights that have not been properly waived.

(e) Power and Authority; Qualification to Conduct Business. The Company has full
corporate power and authority necessary to (i) own and operate its properties and assets, (ii)
execute and deliver this Agreement and the Warrants, (iii) perform its obligations hereunder and
under the Warrants (including, but not limited to, the issuance of the shares of Common Stock
issuable hereunder and under the Warrants) and (iv) carry on its business as presently conducted
and as presently proposed to be conducted. The Company and its subsidiaries are duly qualified and
are authorized to do business and are in good standing as foreign corporations in all jurisdictions
in which the nature of their activities and of their properties (both owned and leased) makes such
qualification necessary, except for those jurisdictions in which failure to do so would not,
individually or in the aggregate, be reasonably expected to have a Material Adverse Effect.

(f) Consents. No consent, approval, authorization or order of any court, governmental
agency or other body is required for execution and delivery by the Company of this Agreement or the
Warrants or the performance by the Company of any of its obligations hereunder or under the
Warrants.

 

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(g) Conflicts. Neither the execution and delivery by the Company of this Agreement
nor the performance by the Company of any of its obligations hereunder and under the Warrants:

(i) violates, conflicts with, results in a breach of, or constitutes a default (or an event
which with the giving of notice or the lapse of time or both would be reasonably likely to
constitute a default) or creates any rights in respect of any Person under (A) the certificates of
incorporation or by-laws of the Company or any of its subsidiaries, (B) any decree, judgment,
order, law, treaty, rule, regulation or determination of any court, governmental
agency or body, or arbitrator having jurisdiction over the Company or any of its subsidiaries
or any of their respective properties or assets, (C) the terms of any bond, debenture, indenture,
credit agreement, note or any other evidence of indebtedness, or any agreement, stock option or
other similar plan, lease, mortgage, deed of trust or other instrument to which the Company or any
of its subsidiaries is a party, by which the Company or any of its subsidiaries is bound, or to
which any of the properties or assets of the Company or any of its subsidiaries is subject, (D) the
terms of any “lock-up” or similar provision of any underwriting or similar agreement to which the
Company or any of its subsidiaries is a party or (E) a any rule or regulation of the Financial
Industry Regulatory Authority, Inc. (successor entity to National Association of Securities
Dealers, Inc.) (“FINRA”) or Nasdaq; or

(ii) results in the creation or imposition of any lien, charge or encumbrance upon any shares
of Common Stock issuable hereunder or under the Warrants or upon any of the properties or assets of
the Company or any of its subsidiaries.

(h) Valid Issuance. When issued to Purchaser against payment therefor, each share of
Common Stock issuable hereunder and each share of Common Stock issuable upon exercise of the
Warrants:

(i) will have been duly and validly authorized, duly and validly issued, fully paid and
non-assessable;

(ii) will be free and clear of any security interests, liens, claims or other encumbrances;
and

(iii) will not have been issued or sold in violation of any preemptive or other similar rights
of the holders of any securities of the Company.

(i) Filings Complete and Accurate in All Material Respects. Since January 1, 2006,
none of the Company’s filings with the United States Securities and Exchange Commission (the “SEC”)
under the Securities Act or under Section 13 or 15(d) of the Exchange Act, including the financial
statements, schedules, exhibits and results of the Company’s operations and cash flow contained
therein (each an “SEC Filing”), contained, when filed, any untrue statement of a material fact or
omitted to state any material fact necessary in order to make the statements, in the light of the
circumstances under which they were made, not misleading. As of their respective filing dates, the
SEC Filings complied in all material respects with the requirements of the Securities Act and the
Exchange Act and the rules and regulations of the SEC promulgated thereunder as in effect at the
time of filing (including as to the reporting and accounting for stock options, as to internal
controls, disclosures as to off balance sheet arrangements, and disclosures as to transactions
with officers, directors or employees).

(j) No Integrated Offering. Neither the Company, nor any Person authorized to act on
its behalf, has, directly or indirectly, made any offers or sales of any security or solicited any
offers to buy any security, under circumstances that would cause the Offering to be integrated with
prior offerings by the Company for purposes of the Securities Act or the rules and regulations of
FINRA or Nasdaq.

 

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(k) Capitalization. Immediately prior to the Initial Closing Date, the authorized
capital stock of the Company consists of 150,000,000 shares of Common Stock, par value $0.01 per
share and 5,000,000 shares of preferred stock, par value $0.01 per share. As of the Initial
Closing Date, (i) 72,607,956 shares of Common Stock are issued and outstanding, and 17,768,705
shares of Common Stock are reserved and subject to issuance upon the exercise of outstanding stock
options, warrants or other convertible rights, (ii) no shares of preferred stock have been
designated, and (iii) no shares of capital stock are held in the treasury of the Company. All of
the outstanding shares of Common Stock are, and all shares of capital stock which may be issued
pursuant to outstanding stock options, warrants or other convertible rights will be, when issued
and paid for in accordance with the respective terms thereof, duly authorized, validly issued,
fully paid and non-assessable, free of any preemptive rights in respect thereof and issued in
compliance with all applicable state and federal laws concerning issuance of securities. As of the
Initial Closing Date, except as set forth above, and except for shares of Common Stock or other
securities issued upon conversion, exchange, exercise or purchase associated with the securities,
options, warrants, rights and other instruments referenced above, no shares of capital stock or
other voting securities of the Company were outstanding, no equity equivalents, interests in the
ownership or earnings of the Company or other similar rights were outstanding, and there were no
existing options, warrants, calls, subscriptions or other rights or agreements or commitments
relating to the capital stock of the Company or any of its subsidiaries or obligating the Company
or any of its subsidiaries to issue, transfer, sell or redeem any shares of capital stock, or other
equity interest in, the Company or any of its subsidiaries or obligating the Company or any of its
subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other
right, agreement or commitment.

3.2  Representations and Warranties of the Purchaser. The Purchaser hereby represents
and warrants to the Company on each Closing Date:

(a) The Purchaser has been duly incorporated and is validly existing under the laws of Bermuda
as of the date of this Agreement.

(b) The execution, delivery and performance of this Agreement by the Purchaser have been duly
authorized by all requisite corporate action and no further consent or authorization of the
Purchaser, its Board of Directors or its stockholders is required. This Agreement has been duly
executed and delivered by the Purchaser and, when duly authorized, executed and delivered by the
Company, will be a valid and binding agreement enforceable against the Purchaser in accordance with
its terms, subject to bankruptcy, insolvency, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors’ rights generally and to general
principles of equity.

(c) The Purchaser represents and warrants to the Company that:

(i) As of any Subsequent Closing, no Non-Exercise Condition has occurred or exists;

(ii) As of any Subsequent Closing, the Purchaser shall be in compliance in all material
respects with all of the covenants and agreements in this Agreement;

 

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(iii) With respect to each Closing, neither the Purchaser, its Affiliates, nor any Persons
acting on the behalf of or in concert with the Purchaser or its Affiliates has taken, directly or
indirectly, any action designed to cause or to result in the reduction, stabilization or
manipulation of the price of any shares of Common Stock or other security of the Company or paid
any broker’s fees or similar compensation (for the avoidance of doubt, excluding any compensation
paid to employees or consultants of the Purchaser or its Affiliates) with respect to the issuance
or sale of the Common Stock or Warrants.

(d) The Purchaser represents and warrants to the Company that on the date hereof, the date of
each Subsequent Closing and the date of each exercise of Warrants:

(i) The Purchaser and its Tax Affiliates do not and will not own immediately before and
immediately after, respectively, each such Closing or exercise more than 4.95% of the shares of
Common Stock of the Company outstanding at the time of such Closing or exercise. For purposes of
the foregoing sentence: (A) ownership of Common Stock shall include any long derivative or
synthetic position or any other stock (as defined in Temporary Treasury Regulation Section
1.382-2T(f)(18) or any successor provision) of the Company held by the Purchaser or its Tax
Affiliates; (B) notwithstanding any other provision in this Agreement (including the foregoing
clause (A)), ownership of Common Stock shall not include any Common Stock which may be acquired
pursuant to this Agreement or by exercise of any Warrant until such Common Stock is purchased and
issued to the Purchaser or its Tax Affiliates; (C) any short actual, synthetic or derivative
positions held by the Purchaser or its Tax Affiliates shall not decrease the amount of Common Stock
they are treated as owning, and (D) for purposes of calculating the percentage ownership interest
of the Purchaser and its Tax Affiliates as of a particular date, the aggregate number of shares of
Common Stock outstanding shall be the number of outstanding shares of Common Stock of the Company
most recently reported prior to such date by the Company in a filing with the SEC, provided,
however, that if at least twenty (20) Business Days prior to the effectiveness of the Purchaser’s
representation in this clause (d)(i), the Company informs the Purchaser in writing that it has
redeemed shares of its Common Stock and provides the Purchaser with the number of outstanding
shares of Common Stock following such redemption which the Purchaser can rely upon for this
purpose, the Purchaser will use such revised number of outstanding shares instead, unless and
until further updated by a subsequent SEC filing and/or Company notice pursuant to this clause
(d)(i).

(ii) The Purchaser and its Tax Affiliates have not and will not be required to file either
Schedule 13D or 13G with respect to the capital stock of the Company pursuant to Regulation 13D or
13G promulgated under the Exchange Act; and

(iii) The Affidavits (as defined below) provided previously are true, correct and complete and
none of such Affidavits contains or omits any information that would be necessary in order for such
Affidavits to be not misleading.

 

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ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

4.1 [Intentionally Omitted]

4.2 Limits on Shares Issuable and Held.

(a) The Purchaser covenants and agrees with the Company that neither the Purchaser, nor any of
its Tax Affiliates will at any time, directly, together with or through Persons who have a formal
or informal understanding to make a coordinated acquisition of stock with the Purchaser or its Tax
Affiliates, acquire, offer to acquire, or agree to acquire, by purchase or otherwise, any shares of
stock (as defined in Temporary Treasury Regulation Section 1.382-2T(f)(18) or any successor
provision) of the Company, including any Common Stock acquired hereunder or pursuant to the
Warrants, if, as a result of such acquisition, it would not be able to make the representations and
warranties contained in Section 3.2(d) hereof or issue any Affidavit described in Section 4.2(d)
hereof.

(b) Any transfer of Common Stock or exercise or transfer of the Warrants that results in a
breach of Section 4.2(a) hereof shall be void ab initio and without force or effect (a “Purported
Transfer”). The Purchaser and the Company covenant and agree to take all steps reasonably
practicable to unwind any such transfer so as to return the transferee and transferor to the
position they were in prior to the Purported Transfer.

(i) If the Purported Transfer is a public transaction and the Purchaser or a Tax Affiliate is
the buyer, then the Purported Transfer shall be void ab initio with respect to the Purchaser or Tax
Affiliate, and the Purchaser or Tax Affiliate immediately shall turn over the shares transferred in
the Purported Transfer (the “Void Shares”) to the Company, which shall sell the Void Shares in the
open market. If the proceeds of such sale are more than the amount paid by the buyer for the Void
Shares, the Company shall return to the buyer only the amount paid by the buyer for the shares and
any excess shall be contributed to the United States Treasury as a charitable contribution in
respect of which no Person shall claim a deduction for tax purposes. If the Company receives less
for the Void Shares than was paid by the buyer, the Company shall pay to the buyer only the amount
received by the Company for the Void Shares and the Company shall have no further liability to the
Purchaser, the buyer, if not the Purchaser, or to any other Person.

(ii) If the Purported Transfer is not a public transaction, the Purchaser shall take all steps
reasonably practicable within its power to cause the transaction to be rescinded, including
reimbursing any party to such transaction for any loss incurred as a result of such rescission. If
the Purchaser is unable to cause the rescission of the Purported Transfer and the Purchaser or a
Tax Affiliate is the buyer in the Purported Transfer, the Purported Transfer shall be treated the
same as a public transaction and shall have all of the consequences of a Purported Transfer that is
a public transaction described in the preceding clause (i).

(c) In connection with any transfer by the Purchaser or a Tax Affiliate in a non-public
transaction, the Purchaser or Tax Affiliate shall obtain (i) a representation or warranty from the
transferee substantially to the same effect as the representation and warranty set forth in Section
3.2(d) hereof, which shall expressly state that it may be relied upon by the Company and (ii)
covenants and affidavits from the transferee substantially to the same effect as the Tax Covenants
and Affidavits provided for herein, which shall expressly state that the Company shall be the
beneficiary of such covenants.

 

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(d) Within 90 days after the end of each fiscal year of the Company, if the Purchaser or a Tax
Affiliate owned any Common Stock during such fiscal year, and at the time of each Subsequent
Closing and exercise or transfer of a Warrant, the Purchaser (or, in the case of a Warrant
transfer, the transferor and transferee of the Warrant) shall provide the Company with an
affidavit, attesting that at no time during the preceding fiscal year (in the case of the affidavit
after the end of the fiscal year) or immediately before and immediately after the Subsequent
Closing, transfer of a Warrant or issuance of shares pursuant to a Warrant (in the case of the
Subsequent Closing or transfer or exercise of a Warrant) was the Purchaser and its Tax Affiliates
(treated in the aggregate) a “5-percent shareholder” (as the term is defined under Section 382 of
the Code treating, for this purpose, the Purchaser and its Tax Affiliates in the aggregate as one
individual (and, separately, in the case of a transfer of a Warrant, treating the transferee and
its Tax Affiliates in the aggregate as one individual and, separately, treating the transferor and
its Tax Affiliates in the aggregate as one individual)), in each case, based on the number of
outstanding shares determined in the manner provided in Section 3.2(d)(i)(D) (an “Affidavit”). For
the first fiscal year in which the Purchaser and its Tax Affiliates owned no Common Stock at any
time during such fiscal year, the Purchaser shall so attest in an Affidavit within 90 days after
the end of such fiscal year; and for each fiscal year thereafter, the Purchaser and its Tax
Affiliates shall have no duty to provide an Affidavit, unless and until an Affidavit is again
required by the first sentence of this clause (d). The attestations of all Affidavits made
pursuant to this Section 4.2(d) shall be made under penalty of perjury.

(e) The Purchaser shall not be bound by the terms and provisions of any so-called “poison
pill” or other arrangement intended to protect the unrestricted use of the Company’s tax net
operating loss carryforwards, that are any more restrictive on the Purchaser than the provisions of
this Agreement. For the avoidance of doubt, this Section 4.2(e) shall not be construed to apply (i)
to any transferee of Common Stock or Warrants from the Purchaser and (ii) to any Person other than
the Purchaser, including any person to whom Common Stock held by the Purchaser would be attributed
pursuant to Section 382 of the Code.

(f) In the event that the Purchaser attempts to acquire Subsequent Closing Shares (including
associated Warrants) or exercise Warrants but is limited by Section 4.2(a) from doing so, the
Purchaser may nonetheless exercise its right to acquire Subsequent Closing Shares (including
associated Warrants) and/or exercise Warrants at a later date, subject to the terms and conditions
of this Agreement and/or the Warrants.

(g) Notwithstanding anything in this Agreement or the Warrants to the contrary, the parties
hereby agree that (i) (A) any deliberate and intentional violation by the Purchaser of Section
3.2(d) or the Tax Covenants would result in actual, direct and foreseeable damages to the Company,
for which the Company may seek all available legal and equitable remedies, provided that conduct
shall be treated as “deliberate and intentional” if such conduct was undertaken without the
exercise of reasonable diligence with respect to such conduct, provided further, however, that the
exercise of reasonable diligence does not include having to inquire into facts that would not have
been taken into account under Treasury Regulations Section 1.382-2T in the absence of actual
knowledge of such facts, but (B) that the Company shall be entitled to seek only specific
performance of Section 3.2(d) or the Tax Covenants (and not a financial remedy) for any other
actual or alleged violation of such provisions, this clause (g)(i)(B) being intended as an express
limitation-of-remedies provision enforceable by the Purchaser, its Affiliates and

 

12

 

any Tax Affiliate; (ii) no repurchase or redemption of shares of capital stock by the Company
shall result in any breach by the Purchaser, its Affiliates or any Tax Affiliate of this Agreement
or the Warrants, provided, that for purposes of any subsequent calculation of percentage ownership
under this Agreement or the Warrant, the Purchaser, its Affiliates and its Tax Affiliates take into
account the number of shares of Common Stock outstanding as provided in Section 3.2(d)(i)(D); (iii)
Section 3.2(d) and the Tax Covenants and related provisions of this Agreement and the Warrants
shall not apply in connection with or following a Change of Control, provided that such Change of
Control would result in an ownership change (as that term is defined under Section 382 of the Code)
without taking into account any acquisitions of shares by the Purchaser that would otherwise breach
Section 3.2(d), the Tax Covenants or the related provisions of this Agreement and the Warrants; and
(iv) Section 3.2(d) and Section 4.2(e) shall cease to apply and the Tax Covenants shall terminate
at such time that both (1) the Purchaser’s right to purchase Shares pursuant to Section 2.1(b) and
its right to exercise any and all Warrants have expired, and (2) the Purchaser and the Tax
Affiliates no longer own any Shares acquired pursuant to the terms of this Agreement or pursuant to
the exercise of Warrants.

(h) The total number of shares of Common Stock that may be issued under this Agreement and the
Warrants shall not exceed a number equal to nineteen and ninety-nine one-hundredths percent
(19.99%) of the outstanding shares of Common Stock as of the date of this Agreement, as indicated
in Section 3.1(k) hereof.

4.3 Registration Rights.

(a) No later than the Initial Closing Date, the Company shall, at its own expense, cause all
of the Shares (including the Initial Closing Shares, Subsequent Closing Shares and Shares issuable
upon exercise of the Warrants) and the Warrants (including the Initial Closing Warrant and all
Subsequent Closing Warrants) to be included on the Existing Registration Statement and file a
Prospectus Supplement thereunder.

(b) The Company will: (i) use its commercial best efforts to keep the Existing Registration
Statement effective until such time as no additional Shares or Warrants may be issued pursuant to
this Agreement and no additional Shares may be issued pursuant to the Warrants (such period, the
Existing Registration Statement’s “Registration Period”); (ii) prepare and file with the SEC such
amendments and supplements to the Existing Registration Statement and the prospectus used in
connection with the Existing Registration Statement (as so amended and supplemented from time to
time, the “Prospectus”) as may be necessary to comply with the provisions of the Securities Act
with respect to the disposition of all Shares by the Purchaser or any of its Affiliates; (iii)
furnish such number of Prospectuses and other documents incident thereto, including any amendment
of or supplement to the Prospectus, as the Purchaser from time to time may reasonably request; (iv)
cause all Shares to be listed on each securities exchange and quoted on each quotation service on
which similar securities issued by the Company are then listed or quoted; and (v) otherwise comply
with all applicable rules and regulations of the SEC, FINRA and Nasdaq.

 

13

 

(c) Notwithstanding anything else in this Section 4, if, at any time during which the Shares
(including the Initial Closing Shares, Subsequent Closing Shares and Shares issuable upon the
exercise of the Warrants) and the Warrants (including the Initial Closing Warrant and
all Subsequent Closing Warrants) may be issued pursuant to the Existing Registration Statement
or a Prospectus is required to be delivered in connection with the sale of any Shares, the Company
determines in good faith and upon the advice of its outside legal counsel that a development has
occurred or a condition exists as a result of which the Existing Registration Statement or the
Prospectus contains a material misstatement or omission, or that a material transaction in which
the Company is engaged or proposes to engage would require an immediate amendment to the Existing
Registration Statement, a supplement to the Prospectus, or a filing under the Exchange Act or other
public disclosure of material information and the disclosure of such transaction would be premature
or injurious to the consummation of the transaction, the Company will immediately notify the
Purchaser, and any permitted assignee of any Warrant or additional investment right under Section
2.1(b)(i), thereof by telephone and in writing. Upon receipt of such notification, all offers and
sales of the Shares pursuant to the Existing Registration Statement shall be immediately suspended.
In such event, the Company will amend or supplement the Existing Registration Statement and the
Prospectus or make such filings or public disclosures as promptly as practicable and will take such
other steps as may be required to permit sales of the Shares thereunder, in accordance with
applicable federal and state securities laws. The Company will promptly notify the Purchaser after
it has determined in good faith that such sales have become permissible in such manner and will
promptly deliver copies of the Existing Registration Statement and the Prospectus (as so amended or
supplemented, if applicable) to the Purchaser in accordance with this Section 4.3. Notwithstanding
the foregoing, (i) under no circumstances shall the Company be entitled to exercise its right to
suspend sales of any Shares more than twice in any twelve (12)-month period, (ii) the period during
which such sales may be suspended (each a “Blackout Period”) at any time shall not exceed
forty-five (45) calendar days, and (C) no Blackout Period may commence less than forty-five (45)
calendar days after the end of the preceding Blackout Period.

4.4 Compliance. With respect to the acquisition, ownership and disposition of the
Shares and Warrants issued and to be issued pursuant to the terms of this Agreement, the Purchaser
shall use its commercial best efforts to comply with federal and state laws applicable to the
Purchaser and rules and regulations of federal and state governmental or self-regulatory agencies
and bodies, including, but not limited to, the SEC, FINRA and Nasdaq, applicable to the Purchaser.

4.5   Change of Control.

(a) If after the date of this Agreement and prior to the Expiration Date, a Change of Control
or plan or proposal with respect thereto is publicly announced or occurs, and the Acquiring Person
(or its direct or indirect parent entity) does not have a class of common equity securities listed
or admitted for trading on any securities exchange or over-the-counter or other organized market,
whether U.S. or not, then between the date such Change of Control is announced and the effective
date of the Change of Control, but not thereafter, the Purchaser shall continue to have the right
to submit to the Company a Purchaser Notice (which Purchaser Notice may, at the Purchaser’s option,
specify that the Subsequent Closing shall occur simultaneously with, and be contingent upon, the
occurrence of the Change of Control) in accordance with the terms and conditions of this Agreement;
provided, however, that so long as the Company has provided the Purchaser with at least five (5)
Business Days advance written notice of the closing
date for the Change of Control, the Company shall not be required to postpone such closing
date in order to facilitate the Subsequent Closing.

 

14

 

(b) If after the date of this Agreement and prior to the Expiration Date, a Change of Control
or plan or proposal with respect thereto is publicly announced or occurs, and the Acquiring Person
(or its direct or indirect parent entity) has a class of common equity securities listed or
admitted for trading on any securities exchange or over-the-counter or other organized market,
whether U.S. or not, then:

(i) Between the date such Change of Control is announced and the effective date of the Change
of Control, the Purchaser shall continue to have the right to submit to the Company a Purchaser
Notice (which Purchaser Notice may, at the Purchaser’s option, specify that the Subsequent Closing
shall occur simultaneously with, and be contingent upon, the occurrence of the Change of Control)
in accordance with the terms and conditions of this Agreement; provided, however, that so long as
the Company has provided the Purchaser with at least five (5) Business Days advance written notice
of the closing date for the Change of Control, the Company shall not be required to postpone such
closing date in order to facilitate the Subsequent Closing;

(ii) The Company shall not enter into an agreement with the Acquiring Person resulting in such
Change of Control unless such agreement expressly obligates the Acquiring Person to assume all of
the Company’s obligations under this Agreement; and

(iii) In the event that any right to acquire shares pursuant to Section 2.1(b) hereof remains
unexercised upon consummation of the Change of Control, the Purchaser shall thereafter
automatically have equivalent rights with respect to the Acquiring Person, and from and after the
effective date of the Change of Control and regardless of whether the Acquiring Person expressly
assumes the Company’s obligations:

(A) all references to the Company in this Agreement shall be references to the Acquiring
Person,

(B) all references to Common Stock in this Agreement shall be references to the securities for
which the Common Stock are exchanged in the Change of Control (or if none, the most widely-held
class of common equity securities of the Acquiring Person), and

(C) the Per Share Purchase Price shall be adjusted to equal the Per Share Purchase Price as in
effect immediately prior to the Change of Control multiplied by a fraction, (1) the numerator of
which is the volume-weighted average price, calculated to the nearest ten thousandth (i.e., four
decimal places (.xxxx)), of the securities for which Common Stock is exchanged in the Change of
Control (or if none, the most widely-held class of voting common equity securities of the Acquiring
Person), and (2) the denominator of which is the Daily Market Price of the Company, in the case of
(1) and (2) determined as of the Business Day immediately preceding and excluding the date on which
the Change of Control is consummated. For purposes of this Agreement, “Daily Market Price” means,
on any date, the amount per share of the Common Stock (or, for purposes of determining the Daily
Market Price of the common stock of an Acquiring Person, the common stock of such Acquiring Person),

 

15

 

 equal to (i) the
daily volume-weighted average price, calculated to the nearest ten thousandth (i.e., four decimal
places (.xxxx)), on Nasdaq or, if no sale takes place on such date, the average of the closing bid
and asked prices, calculated to the nearest ten thousandth (i.e., four decimal places (.xxxx)), on
Nasdaq on such date, in each case as reported by Bloomberg, L.P. (or by such other Person as the
Purchaser and the Company may agree), or (ii) if such Common Stock (or the common stock of an
Acquiring Person) is not then listed or admitted to trading on Nasdaq, the higher of (x) the book
value per share thereof as determined by any firm of independent public accountants of recognized
standing selected by Company and reasonably acceptable to the Purchaser as of the last calendar day
of the most recent month ending before the date as of which the determination is to be made and (y)
the fair market value per share thereof determined in good faith by an independent, nationally
recognized appraisal firm selected by the Purchaser and reasonably acceptable to the Company (whose
fees and expenses shall be borne by the Company), subject in each case to adjustment for stock
splits, recombinations, stock dividends and the like.

ARTICLE V.

NON-PERFORMANCE AND INDEMNIFICATION

5.1 Non-Performance.

(a) If the Company, at any time, shall fail to deliver the shares of Common Stock to the
Purchaser required to be delivered pursuant to this Agreement or the Warrants, in accordance with
the terms and conditions of this Agreement or the Warrants, as the case may be, for any reason
other than the failure of any condition precedent to the Company’s obligations hereunder or the
failure by Purchaser to comply with its obligations hereunder, then the Company shall (without
limitation to Purchaser’s other remedies at law or in equity):

(i) indemnify and hold Purchaser harmless against any loss, claim or damage (excluding
incidental, special, punitive and consequential damages) arising from or as a result of such
failure by the Company; and

(ii) reimburse Purchaser for all of its reasonable out-of-pocket expenses, including fees and
disbursements of its counsel, incurred by Purchaser in connection with this Agreement, the Warrants
and the transactions contemplated herein and therein.

(b) If Purchaser, at any time, shall fail to comply with its obligations to effect the Initial
Closing or the Subsequent Closings under this Agreement for any reason other than the failure of
any condition precedent to Purchaser’s obligations hereunder or the failure by the Company to
comply with its obligations hereunder, then Purchaser shall (without limitation to the Company’s
other remedies at law or in equity):

(i) indemnify and hold the Company harmless against any loss, claim or damage (excluding
incidental, special, punitive and consequential damages) arising from or as a result of such
failure by Purchaser; and

(ii) reimburse the Company for all of its reasonable out-of-pocket expenses, including fees
and disbursements of its counsel, incurred by the Company in
connection with this Agreement, the Warrants and the transactions contemplated herein and therein.

 

16

 

5.2 Indemnification.

(a) Company Indemnification Obligation. The Company hereby agrees to indemnify the
Purchaser and each of its officers, directors, employees, consultants, agents, attorneys,
accountants and Affiliates and each Person that controls (within the meaning of Section 20 of the
Exchange Act) any of the foregoing Persons (each a “Purchaser Indemnified Party”) against any
claim, demand, action, liability, damages (excluding any and all damages other than damages
actually suffered by the Purchaser Indemnified Party and excluding incidental, special, punitive
and consequential damages), cost or expense (including, without limitation, reasonable legal fees
and expenses incurred by such Purchaser Indemnified Party in investigating or defending any such
proceeding) (all of the foregoing, including associated costs and expenses being referred to herein
as a “Purchaser Indemnified Proceeding”), that it may incur in connection with any of the
transactions contemplated hereby arising out of or based upon:

(i) any of the material representations or warranties made by the Company herein being untrue
or incorrect at the time such representation or warranty was made; and

(ii) any material breach or non-performance by the Company of any of its covenants, agreements
or obligations under this Agreement or the Warrants;

provided, however, that the foregoing indemnity shall not apply to any Purchaser Indemnified
Proceeding to the extent that it arises out of, or is based upon, the gross negligence or willful
misconduct of the Purchaser in connection therewith or a claim by the Purchaser subject to
Section 5.1(a).

(b) Purchaser Indemnification Obligation. Except as otherwise expressly provided in
Section 4.2(g), the Purchaser hereby agrees to indemnify the Company and each of its officers,
directors, employees, consultants, agents, attorneys, accountants and Affiliates and each Person
that controls (within the meaning of Section 20 of the Exchange Act) any of the foregoing Persons
(each a “Company Indemnified Party”) against any claim, demand, action, liability, damages
(excluding any and all damages other than damages actually suffered by the Company Indemnified
Party and excluding incidental, special, punitive and consequential damages), cost or expense
(including, without limitation, reasonable legal fees and expenses incurred by such Company
Indemnified Party in investigating or defending any such proceeding) (all of the foregoing,
including associated costs and expenses being referred to herein as a “Company Indemnified
Proceeding,” and together with the Purchaser Indemnified Proceeding, the “Proceeding”), that it may
incur in connection with any of the transactions contemplated hereby arising out of or based upon:

(i) any of the material representations or warranties made by the Purchaser herein being
untrue or incorrect at the time such representation or warranty was made; and

 

17

 

(ii) any material breach or non-performance by the Purchaser of any of its covenants,
agreements or obligations under this Agreement or the Warrants;

provided, however, that the foregoing indemnity shall not apply to any Company Indemnified
Proceeding to the extent that it arises out of, or is based upon, the gross negligence or willful
misconduct of the Company in connection therewith or a claim by the Company subject to Section
5.1(b).

(c) Conduct of Claims.

(i) Whenever a claim for indemnification shall arise under this Section 5.2, the party seeking
indemnification (the “Indemnified Party”), shall notify the party from whom such indemnification
is sought (the “Indemnifying Party”) in writing of the Proceeding and the facts constituting the
basis for such claim in reasonable detail;

(ii) If any action shall be brought against the Indemnified Party in respect of which
indemnity may be sought, the Indemnifying Party shall have the right to assume the defense thereof.
The Indemnified Party shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel shall be at the
expense of the Indemnified Party except to the extent that (i) the employment thereof and the
Indemnifying Party’s payment of such fees and expenses has been specifically authorized by the
Indemnifying Party in writing; or (ii) the Indemnifying Party has failed after a reasonable period
of time to assume such defense and to employ counsel. In no event shall the Indemnifying Party be
liable for fees and expenses of more than one counsel separate from its own counsel for all
Indemnified Parties in connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or circumstances; and

(iii) No Indemnifying Party shall, without the prior written consent of the Indemnified
Parties (which consent shall not be unreasonably withheld), settle or compromise or consent to the
entry of any judgment with respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which
indemnification could be sought under this Section 5.2 unless such settlement, compromise or
consent (A) includes an unconditional release of each Indemnified Party from all liability arising
out of such litigation, investigation, proceeding or claim and (B) does not include a statement as
to or an admission of fault, culpability or a failure to act by or on behalf of any Indemnified
Party.

ARTICLE VI.

MISCELLANEOUS

6.1 [Intentionally omitted.]

6.2 Fees and Expenses. Each of the Purchaser and the Company agrees to pay its own
expenses incident to the performance of its obligations hereunder, including, but not limited to,
the fees, expenses and disbursements of such party’s counsel, except (a) as specified in the
indemnification provisions set forth in Section 5.2 and (b) in the event of any future litigation
between the parties relating to or arising out of this Agreement, the prevailing party shall
be entitled to recover its reasonable attorneys’ fees and costs from the non-prevailing party.

 

18

 

6.3 Entire Agreement. The Transaction Documents (including the exhibits and schedules
thereto), together with the Settlement Agreement, contain the entire understanding of the parties
with respect to the subject matter hereof and thereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties acknowledge have
been merged into such documents, exhibits and schedules.

6.4 Notices. Any and all notices or other communications or deliveries required or
permitted to be provided hereunder shall be in writing and shall be deemed given and effective on
the earliest of (a) the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number set forth on the signature pages attached hereto prior to 6:00
p.m. (New York City time) on a Business Day, (b) the next Business Day after the date of
transmission, if such notice or communication is delivered via facsimile at the facsimile number
set forth on the signature pages attached hereto on a day that is not a Business Day or later than
6:00 p.m. (New York City time) on any Business Day, (c) the 2nd Business Day following
the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (d) upon
actual receipt by the party to whom such notice is required to be given. The address for such
notices and communications to the Company and the Purchaser shall be as set forth on the signature
pages attached hereto.

6.5 Amendments; Waivers. No provision of this Agreement may be waived or amended
except in a written instrument signed, in the case of an amendment, by the Company and the
Purchaser or, in the case of a waiver, by the party against whom enforcement of any such waived
provision is sought. No waiver of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver
of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of any party to exercise any right hereunder in any manner impair the
exercise of any such right.

6.6 Headings. The headings herein are for convenience only, do not constitute a part
of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. The
language used in this Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against any party.

6.7 Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted assigns. Neither the Company nor the
Purchaser may assign this Agreement or any rights or obligations hereunder without the prior
written consent of the other party (other than by merger or otherwise by operation of law);
provided, however, that the Purchaser may assign its rights and obligations under
this Agreement in whole or in part to any of its Affiliates to which it transfers shares of Common
Stock or rights to acquire shares pursuant to Section 2.1(b), as long as such Affiliate assignee
expressly assumes the obligations hereunder in writing. Notwithstanding any assignment by the
Purchaser of its rights and obligations under this Agreement in whole or in part to any of its
Affiliates, the Purchaser shall remain jointly and severally liable under this Agreement with such
Affiliate assignee, unless expressly released by the Company. No Person acquiring Common Stock
from
the Purchaser pursuant to a public market purchase or otherwise will thereby obtain any of the
rights contained in this Agreement.

 

19

 

6.8 No Third-Party Beneficiaries. This Agreement is intended for the benefit of the
parties hereto and their respective successors and permitted assigns and is not for the benefit of,
nor may any provision hereof be enforced by, any other Person.

6.9 Governing Law. All questions concerning the construction, validity, enforcement
and interpretation of the Transaction Documents shall be governed by and construed and enforced in
accordance with the internal laws of the State of New York, without regard to the principles of
conflicts of law thereof.

6.10 Jurisdiction. Each of the parties hereto hereby submits to the exclusive
jurisdiction of any state or federal court in the Southern District of New York and any court
hearing any appeal therefrom, over any suit, action or proceeding arising out of or based upon this
Agreement. Each of the parties hereto hereby waives any objection to any proceeding in such courts
whether on the grounds of venue, residence or domicile or on the ground that the proceeding has
been brought in an inconvenient forum.

6.11 Survival. The representations and warranties contained herein shall survive the
Initial Closing, regardless of any investigation made by or on behalf of the other party to this
Agreement or any officer, director or employee of, or Person controlling or under common control
with, such party and will survive delivery of and payment for any shares of Common Stock issuable
hereunder.

6.12 Execution. This Agreement may be executed in two or more counterparts, all of
which when taken together shall be considered one and the same agreement and shall become effective
when counterparts have been signed by each party and delivered to the other party, it being
understood that both parties need not sign the same counterpart. In the event that any signature
is delivered by facsimile transmission or by e-mail delivery of a “.pdf” or “.tif” format data
file, such signature shall create a valid and binding obligation of the party executing (or on
whose behalf such signature is executed) with the same force and effect as if such facsimile or
“.pdf” or “.tif” signature page were an original thereof.

6.13 Severability. If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in
full force and effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the intention of the parties
that they would have executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

6.14 Saturdays, Sundays, Holidays. If the last or appointed day for the taking of any
action or the expiration of any right required or granted herein shall not be a Business Day, then
such action may be taken or such right may be exercised on the next succeeding Business Day.

 

20

 

6.15 Construction. The parties agree that each of them and/or their respective counsel
has reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal
rule of construction to the effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of the Transaction Documents or any amendments
hereto.

6.16 Delivery of Shares. Unless otherwise mutually agreed upon by the parties, to the
extent reasonably practicable, the Company shall deliver the shares of Common Stock issued to the
Purchaser in the Initial Closing and the shares of Common Stock, if any, issued to the Purchaser in
a Subsequent Closing to Purchaser’s account via The Depository Trust Company’s Deposit/Withdrawal
at Custodian (DWAC) system using the account information provided by Purchaser on or before the
applicable Closing Date.

6.17 Currency. All dollar ($) amounts set forth herein and in the Warrants refer to
United States dollars. All payments hereunder and thereunder will be made in lawful currency of
the United States of America.

(Signature Pages Follow)

 

21

 

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be
duly executed by their respective authorized signatories as of the date first indicated above.

	 	 	 	 	 	 	 
	SYNTROLEUM CORPORATION	 	Address for Notice:
	 
	 	 	 	 	 	 
	By:
	 	/s/ Edward G. Roth	 	 	 	Syntroleum Corporation
	 

	 	 	 	 	 	 
	 

	 	Name: Edward G. Roth	 	 	 	5416 South Yale, Suite 400
	 

	 	Title: Chief Executive Officer	 	 	 	Tulsa, Oklahoma 74135
	 

	 	 	 	 	 	Attention:   Principal Financial Officer
	 

	 	 	 	 	 	Telephone: (918) 592-7900
	 

	 	 	 	 	 	Facsimile:   (918) 592-7979
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	With a copy to (which shall not constitute notice):
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Syntroleum Corporation
	 

	 	 	 	 	 	5416 South Yale, Suite 400
	 

	 	 	 	 	 	Tulsa, Oklahoma 74135
	 

	 	 	 	 	 	Attention:   Chief Executive Officer
	 

	 	 	 	 	 	Telephone: (918) 592-7900
	 

	 	 	 	 	 	Facsimile:   (918) 592-7979

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGES FOR THE PURCHASER FOLLOWS]

[Signature Page to Securities Purchase Agreement]

 

 

 

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly
executed by their respective authorized signatories as of the date first indicated above.

	 	 	 	 	 	 	 
	FLETCHER INTERNATIONAL, LTD.	 	Address for Notice:
	 
	 	 	 	 	 	 
	By:
	 	/s/ Peter Zayfert	 	Fletcher International, Ltd.
	 
	 	 	 	 	 	 
	 
	 	Name: Peter Zayfert	 	 	 	c/o Appleby Services (Bermuda) Ltd.
	 
	 	Title: Authorized Signatory	 	 	 	Canon’s Court
	 

	 	 	 	 	 	22 Victoria Street
	By:
	 	/s/ Stewart Turner	 	PO Box HM 1179
	 
	 	 	 	 	 	 
	 
	 	Name: Stewart Turner	 	 	 	Hamilton HM EX
	 
	 	Title: Authorized Signatory	 	 	 	Bermuda
	 

	 	 	 	 	 	Attention: Desirae Jones, Corporate
	 

	 	 	 	 	 	Administrator]
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	With a copy to (which shall not constitute notice):
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Fletcher International, Ltd.
	 

	 	 	 	 	 	c/o Fletcher Asset Management, Inc.
	 

	 	 	 	 	 	48 Wall Street
	 

	 	 	 	 	 	New York, NY 10005
	 

	 	 	 	 	 	Telephone: 212-284-4801
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	And:
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Irell & Manella LLP
	 

	 	 	 	 	 	1800 Avenue of the Stars, Suite 900
	 

	 	 	 	 	 	Los Angeles, CA 90067
	 

	 	 	 	 	 	Attention: Anthony T. Iler
	 

	 	 	 	 	 	Facsimile: 310-203-7199

[Signature Page to Securities Purchase Agreement]

 

 

 

ANNEX
A

THIS WARRANT IS SUBJECT TO RESTRICTIONS ON TRANSFER SET FORTH IN

THIS COMMON STOCK PURCHASE WARRANT.

SYNTROLEUM CORPORATION

COMMON STOCK PURCHASE WARRANT

[DATE]

This Warrant (the “Warrant”) entitles Fletcher International, Ltd., a company domiciled in
Bermuda (including any successors or assigns, the “Holder”), for value received, to purchase from
SYNTROLEUM CORPORATION, a Delaware corporation (the “Company”), during the Warrant Term (as defined
below) and subject to the terms and conditions set forth herein, all or any portion of the Warrant
Shares (as defined below) at the Exercise Price (as defined below). This Warrant is issued subject
to the following terms and conditions:

1. Warrants.

1.1 General. This Warrant has been issued pursuant to that certain Securities
Purchase Agreement, dated October 14, 2009, as it may be amended from time to time, by and among
the Company and the Holder (the “Securities Purchase Agreement”), and are subject to the terms and
conditions thereof. Unless otherwise defined herein, capitalized terms used herein shall have the
meanings set forth in the Securities Purchase Agreement. A copy of the Securities Purchase
Agreement may be obtained at no cost by the Holder upon written request to the Secretary of the
Company at the principal executive offices of the Company.

1.2 Warrant Amount. This Warrant shall entitle the Holder to purchase up to [                    ]
shares of newly-issued Common Stock (the “Warrant Shares”).

1.3 Exercise Price. The per share exercise price for the Warrant Shares shall be
[                    ] (the “Exercise Price”).

1.4 Warrant Term. Subject to the limitations contained herein, the Warrant may be
exercised (in whole or in part) at any time or from time to time after the date hereof until 11:59
P.M., New York City time on the date that is six (6) years after the date hereof (the “Warrant
Term”); provided, however, that in connection with a Change of Control (as defined in the
Securities Purchase Agreement), this Warrant shall be subject to Section 3.4.

2. Exercise of Warrant.

2.1 Method of Exercise; Payment. Subject to all of the terms and conditions hereof
and the limitations set forth in Sections 2.6 and 2.7, the Holder shall
notify the Company prior to any exercise of this Warrant, in whole or in part, with respect to any
Warrant Shares, during the Warrant Term, by delivering a notice of intent to exercise substantially
in the form attached hereto, three (3) Business Days prior to the exercise date set forth therein;
provided that any such notice must be delivered to the Company at least three (3) Business Days
prior to the expiration of the Warrant Term. Upon the exercise date set forth in the applicable
notice, subject to all of the terms and conditions hereof and the limitations set forth in
Sections 2.6 and 2.7, the Holder shall (1) surrender this Warrant to the
Company at its principal office, (2) deliver to the Company a subscription substantially in the form
attached hereto, and (3) send a (a) wire transfer of immediately available funds or (b) certified
or official bank check payable to the order of the Company, in each case in the amount obtained by
multiplying (i) the number of Warrant Shares for which the Warrant is being exercised, as
designated in such notice and subscription, by (ii) the Exercise Price. Thereupon, the Holder
shall be entitled to receive the applicable number of duly authorized, validly issued, fully paid
and nonassessable Warrant Shares. Notwithstanding the foregoing, each exercise of the Warrant by
the Holder must be for at least 1,000,000 Warrant Shares; provided, however, that the Warrant may
be exercised for a lower number of Warrant Shares if such exercise is for all remaining Warrant
Shares subject to the Warrant.

 

-1-

 

2.2 Delivery of Stock Certificates on Exercise. Upon the exercise date of this
Warrant, unless otherwise mutually agreed upon by the parties, to the extent reasonably
practicable, the Company, at its expense, and in accordance with applicable securities laws, shall
deliver the number of Warrant Shares purchased by the Holder on such exercise to Holder’s account
via The Depository Trust Company’s Deposit/Withdrawal at Custodian (DWAC) system using the account
information provided by Holder in its notice of intent to exercise.

2.3 Shares To Be Fully Paid and Nonassessable. All Warrant Shares issued upon the
exercise of this Warrant shall be duly authorized, validly issued, fully paid and nonassessable,
free of all liens, taxes, charges and other encumbrances or restrictions on sale (other than those
set forth herein).

2.4 Payment of Taxes and Expenses. The Company shall pay any recording, filing, stamp
or similar tax which may be payable in respect of any transfer involved in the issuance of, and the
preparation and, as applicable, the delivery of certificates representing or the delivery via The
Depository Trust Company’s Deposit/Withdrawal at Custodian (DWAC) system of, (i) any Warrant Shares
purchased upon exercise of this Warrant and/or (ii) new or replacement warrants in the Holder’s
name or the name of any transferee of all or any portion of this Warrant.

2.5 Cooperation with Filings. The Company shall assist and cooperate with the Holder
if the Holder is required to make any governmental or regulatory filings or obtain any governmental
or regulatory approvals prior to or in connection with any exercise of this Warrant (including,
without limitation, making any filings required to be made by the Company).

2.6 Limitation on Exercise. This Warrant shall not be exercisable (i) to the extent
that, on or immediately after exercise, the representations in Section 3.2(d) of the Securities
Purchase Agreement would be untrue, and (ii) unless and until such representations are made and the
Tax Covenants, as applicable, are performed.

2.7 Limitation on Exercise by Transferees. In the event this Warrant is transferred
in accordance with Section 5, this Warrant shall not be exercisable (i) to the extent that,
on or immediately after exercise, the representations in Section 3.2(d) of the Securities Purchase
Agreement would be untrue with respect to the person exercising the Warrant and such person’s Tax
Affiliates, and (ii) unless and until the person exercising the Warrant makes such representations
and performs the Tax Covenants. For purposes of this Section 2.7, references to the
Purchaser and its Tax Affiliates in Section 3.2(d) of the Securities Purchase Agreement and in the
Tax Covenants shall be treated as referring to the person exercising the Warrant and such person’s
Tax Affiliates.

2.8 The provisions of Section 4.2(g) of the Securities Purchase Agreement shall apply hereto,
to the extent relevant to the provisions hereof, substituting “Holder” for “Purchaser” therein.

 

-2-

 

3. Adjustment of Exercise Price and Warrant Shares. The Exercise Price and the number
of Warrant Shares shall be subject to adjustment from time to time upon the happening of certain
events as described in this Section 3.

3.1 Subdivision or Combination of Stock. If at any time or from time to time after
the date hereof, the Company shall subdivide (by way of stock dividend, stock split or otherwise)
its outstanding shares of Common Stock, the Exercise Price in effect immediately prior to such
subdivision shall be reduced proportionately and the number of Warrant Shares (calculated to the
nearest whole share) shall be increased proportionately, and conversely, in the event the
outstanding shares of Common Stock shall be combined (whether by stock combination, reverse stock
split or otherwise) into a smaller number of shares, the Exercise Price in effect immediately prior
to such combination shall be increased proportionately and the number of Warrant Shares (calculated
to the nearest whole share) shall be decreased proportionately. The Exercise Price and the number
of Warrant Shares, as so adjusted, shall be readjusted in the same manner upon the happening of any
successive event or events described in this Section 3.1.

3.2 Adjustment for Stock Dividends. If at any time after the date hereof, the Company
shall declare a dividend or make any other distribution upon any class or series of stock of the
Company payable in shares of Common Stock, the Exercise Price in effect immediately prior to such
declaration or distribution shall be reduced proportionately and the number of Warrant Shares
(calculated to the nearest whole share) shall be increased proportionately, to reflect the issuance
of any shares of Common Stock, issuable in payment of such dividend or distribution. The Exercise
Price and the number of Warrant Shares, as so adjusted, shall be readjusted in the same manner upon
the happening of any successive event or events described in this Section 3.2.

3.3 Adjustments for Reclassifications. If the Common Stock issuable upon the exercise
of this Warrant shall be changed into the same or a different number of shares of any class(es) or
series of stock and/or the right to receive property, whether by reclassification or otherwise
(other than an adjustment under Sections 3.1 and 3.2 or a merger, consolidation, or
sale of assets provided for under Section 3.4), then and in each such event, the Holder
hereof shall have the right thereafter to convert each Warrant Share into the kind and amount of
shares of stock and other securities and property receivable upon such reclassification, or other
change by holders of the number of shares of Common Stock into which such Warrant Shares would have
been convertible immediately prior to such reclassification or change, all subject to successive
adjustments thereafter from time to time pursuant to and in accordance with, the provisions of this
Section 3.

3.4 Adjustments for Merger or Consolidation.

(a) If during the Warrant Term a Change of Control or plan or proposal with respect thereto is
publicly announced or occurs, and the Acquiring Person (as defined in the Securities Purchase
Agreement) (or its direct or indirect parent entity) does not have a class of common equity
securities listed or admitted for trading on any securities exchange or over-the-counter or other
organized market, whether U.S. or not, then this Warrant shall terminate upon the effective date of
a Change of Control; provided that between the date such Change of Control is announced and the
effective date of the Change of Control, but not thereafter, the Holder shall have the right to
submit to the Company an exercise notice (which exercise notice may, at the Holder’s option,
specify that the exercise and payment of the Exercise Price shall occur simultaneously with, and be
contingent upon, the occurrence of the Change of Control) in accordance with the terms and
conditions of this Warrant; provided, however, that so long as the Company has provided the Holder
with at least five (5) Business Days (as defined in the Securities Purchase Agreement) advance
written notice of the effective date for the Change of Control, the
Company shall not be required to postpone such closing date in order to facilitate the closing of
the exercise.

 

-3-

 

(b) If during the Warrant Term a Change of Control or plan or proposal with respect thereto is
publicly announced or occurs, and the Acquiring Person (or its direct or indirect parent entity)
has a class of common equity securities listed or admitted for trading on any securities exchange
or over-the-counter or other organized market, whether U.S. or not, then:

(i) Between the date such Change of Control is announced and the effective date of the Change
of Control, the Holder shall have the right to submit to the Company an exercise notice (which
exercise notice may, at the Holder’s option, specify that the exercise and payment of the Exercise
Price shall occur simultaneously with, and be contingent upon, the occurrence of the Change of
Control) in accordance with the terms and conditions of this Warrant; provided, however, that so
long as the Company has provided the Holder with at least five (5) Business Days advance written
notice of the effective date for the Change of Control, the Company shall not be required to
postpone such closing date in order to facilitate the closing of the exercise;

(ii) The Company shall not enter into an agreement with the Acquiring Person resulting in such
Change of Control unless such agreement expressly obligates the Acquiring Person to assume all of
the Company’s obligations under this Warrant; and

(iii) In the event that any portion of this Warrant remains unexercised upon consummation of
the Change of Control, the Holder shall thereafter automatically have equivalent rights with
respect to the Acquiring Person, and from and after the effective date of the Change of Control and
regardless of whether the Acquiring Person expressly assumes the Company’s obligations:

(A) all references to the Company in this Warrant shall be references to the Acquiring Person,

(B) all references to Common Stock in this Warrant shall be references to the securities for
which the Common Stock are exchanged in the Change of Control (or if none, the most widely-held
class of common equity securities of the Acquiring Person),

(C) the Exercise Price shall be adjusted, employing the methodology set forth in the
example(s) on Annex I hereto, to equal the Exercise Price as in effect immediately prior to
the Change of Control multiplied by a fraction, (1) the numerator of which is the volume-weighted
average price, calculated to the nearest ten thousandth (i.e., four decimal places (.xxxx)), of the
securities for which Common Stock is exchanged in the Change of Control (or if none, the most
widely-held class of voting common equity securities of the Acquiring Person), and (2) the
denominator of which is the Daily Market Price of the Company, in the case of (1) and (2)
determined as of the Business Day immediately preceding and excluding the date on which the Change
of Control is consummated. For purposes of this Warrant, “Daily Market Price” has the meaning
given in the Securities Purchase Agreement, substituting references to the “Holder” for the
“Purchaser,” and

(D) the number of Warrant Shares shall be adjusted, employing the methodology set forth in the
example(s) on Annex I hereto, to equal the product of the number of Warrant Shares in
effect immediately prior to the Change of Control multiplied by a fraction, (1) the numerator of
which is the Daily Market Price of the Company, and (2) the denominator of which is the
volume-weighted average price, calculated to the nearest ten thousandth (i.e., four decimal places
(.xxxx)), of the securities for which Common Stock is exchanged in the Change of Control (or if
none, the most widely-held class of voting common equity securities of the Acquiring Person), in
the case of (1) and (2) determined as of the Business Day immediately preceding and excluding the date on which the Change
of Control is consummated.

 

-4-

 

3.5 Minimum Adjustment of Exercise Price. If the amount of any adjustment of the
Exercise Price required pursuant to this Section 3 would be less than one-tenth (1/10) of
one percent (1%) of the Exercise Price in effect at the time such adjustment is otherwise so
required to be made, such amount shall be carried forward and adjustment with respect thereto made
at the time of and together with any subsequent adjustment which, together with such amount and any
other amount or amounts so carried forward, shall aggregate at least one tenth (1/10) of one
percent (1%) of such Exercise Price.

3.6 Certificate as to Adjustments. Upon the occurrence of each adjustment or
readjustment of the Exercise Price and number of Warrant Shares pursuant to this Section 3,
this Warrant shall, without any action on the part of the Holder, be adjusted in accordance with
this Section 3, and the Company, at its expense, promptly shall compute such adjustment or
readjustment in accordance with the terms hereof and prepare and furnish to the Holder a
certificate setting forth such adjustment or readjustment, showing in detail the facts upon which
such adjustment or readjustment is based. The Company will forthwith send a copy of each such
certificate to the Holder in accordance with Section 7.4 below.

4. Notices of Record Date. Upon (a) any establishment by the Company of a record date
of the holders of any class of securities for the purpose of determining the holders thereof who
are entitled to receive any dividend or other distribution, or right or option to acquire
securities of the Company, or any other right, or (b) any capital reorganization, reclassification,
recapitalization, merger or consolidation of the Company with or into any other Person, any
transfer of all or substantially all the assets of the Company, or any voluntary or involuntary
dissolution, liquidation or winding up of the Company, or the sale, in a single transaction, of a
majority of the Company’s voting stock (whether newly issued, or from treasury, or previously
issued and then outstanding, or any combination thereof), the Company shall mail to the Holder at
least ten (10) Business Days, or such longer period as may be required by law, prior to the record
date specified therein and at least ten (10) Business Days prior to the date specified in clause
(ii) or (iii) hereof, a notice specifying (i) the date established as the record date for the
purpose of such dividend, distribution, option or right and a description of such dividend,
distribution, option or right, (ii) the date on which any such reorganization, reclassification,
transfer, consolidation, merger, dissolution, liquidation or winding up, or sale is expected to
become effective and (iii) the date, if any, fixed as to when the holders of record of Common Stock
shall be entitled to exchange their shares of Common Stock for securities or other property
deliverable upon such reorganization, reclassification, transfer, consolidation, merger,
dissolution, liquidation or winding up. Subject to the other limitations on exercise contained in
this Warrant, nothing in this Section 4 shall prohibit the Holder from exercising this
Warrant during the ten (10) Business Day period commencing on the date of such notice.

5. Transfer Provisions, etc.

5.1 Limitations on Transfer. None of the Holder, or any subsequent successor,
transferee or assign, shall sell or otherwise transfer this Warrant to any Person unless and until
(1) the transferee makes the representations in Section 3.2(d) of the Securities Purchase
Agreement, agrees to perform and, to the extent then applicable, performs the Tax Covenants and (2)
the transferor and the transferee, each represent in writing, under penalty of perjury, that it
does not have a principal purpose of avoiding or ameliorating the impact of an ownership change
within the meaning of Treasury Regulation Section 1.382-4(d) related to the transfer of the
Warrant. For purposes of this Section 5.1, references to the Purchaser and its Tax
Affiliates in Section 3.2(d) and in the Tax Covenants of the Securities Purchase Agreement shall be
treated as referring to the transferee and its Tax Affiliates. Upon any transfer by the
Holder, or any subsequent successor, transferee or assign, such Person shall deliver to the
Company the Notice of Transfer, in the form attached hereto.

 

-5-

 

5.2 Warrant Register. The Company shall keep at its principal office a register for
the registration, and registration of transfers, of the Warrants. The name and address of each
Holder of one or more of the Warrants, each transfer thereof and the name and address of each
transferee of one or more of the Warrants shall be registered in such register.

6. Lost, Stolen or Destroyed Warrant. Upon receipt by the Company of evidence
satisfactory to it of loss, theft, destruction or mutilation of this Warrant and, in the case of
loss, theft or destruction, on delivery of a customary affidavit of the Holder and customary
unsecured indemnity agreement, or, in the case of mutilation, upon surrender of this Warrant, the
Company at its expense will execute and deliver, or will instruct its transfer agent to execute and
deliver, a new Warrant of like tenor and date and representing the same rights represented by such
lost, stolen, destroyed or mutilated warrant and any such lost, stolen, mutilated or destroyed
Warrant thereupon shall become void.

7. General.

7.1 Authorized Shares, Reservation of Shares for Issuance. At all times while this
Warrant is outstanding, the Company shall maintain its corporate authority to issue, and shall have
authorized and reserved for issuance upon exercise of this Warrant, such number of shares of Common
Stock, and any other capital stock or other securities as shall be sufficient to perform its
obligations under this Warrant (after giving effect to any and all adjustments to the number and
kind of Warrant Shares purchasable upon exercise of this Warrant).

7.2 No Impairment. The Company will not, by amendment of its certificate of
incorporation or through any reorganization, transfer of assets, consolidation, merger,
dissolution, issuance or sale of securities, sale or other transfer of any of its assets or
properties, or any other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of
all such terms and in the taking of all such action as may be necessary or appropriate in order to
protect the rights of the Holder hereunder against impairment. Without limiting the generality of
the foregoing, the Company (a) will not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above the amount payable therefor on such exercise,
and (b) will take all action that may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of
this Warrant.

7.3 No Rights as Stockholder. Except as provided herein, the Holder shall not be
entitled to vote or to receive dividends or to be deemed the holder of Common Stock that may at any
time be issuable upon exercise of this Warrant for any purpose whatsoever, nor shall anything
contained herein be construed to confer upon the Holder any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any corporate action
(whether upon any recapitalization, issuance or reclassification of stock, change of par value or
change of stock to no par value, consolidation, merger or conveyance or otherwise), or to receive
notice of meetings (except to the extent otherwise provided in this Warrant), or to receive
dividends or subscription rights, until the Holder shall have exercised this Warrant and been
issued Warrant Shares in accordance with the provisions hereof and continues to hold Warrant
Shares.

 

-6-

 

7.4 Notices. Any notices, reports or other correspondence (hereinafter collectively
referred to as “correspondence”) required or permitted to be given hereunder shall be sent by
postage prepaid first class mail, overnight courier or facsimile transmission, or delivered by hand to
the party to whom such correspondence is required or permitted to be given hereunder. The date of
giving any notice shall be the date of its actual receipt.

(a) All correspondence to the Company shall be addressed as follows:

Syntroleum Corporation

5416 South Yale, Suite 400

Tulsa, Oklahoma 74135

Attn: Principal Financial Officer

Facsimile: (918) 592-7900

with a copy to:

Syntroleum Corporation

5416 South Yale, Suite 400

Tulsa, Oklahoma 74135

Attention: Chief Executive Officer

Facsimile: (918) 592-7979

(b) All correspondence to the Holder shall be addressed to the Holder at its address appearing
in the books maintained by the Company.

8. Amendment and Waiver. No failure or delay of the Holder in exercising any power or
right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any other right or power.
The rights and remedies of the Holder are cumulative and not exclusive of any rights or remedies
which it would otherwise have. Any term of this Warrant may be amended or waived upon the written
consent of the Company and the Holder.

9. Governing Law. All questions concerning the construction, validity, enforcement
and interpretation of the Warrant shall be governed by and construed and enforced in accordance
with the internal laws of the State of Delaware, without regard to the principles of conflicts of
law thereof.

10. Covenants To Bind Successor and Assigns. Except as expressly provided otherwise,
all covenants, stipulations, promises and agreements in this Warrant contained by or on behalf of
the Company shall bind its successors and assigns, whether so expressed or not.

11. Severability. In case any one or more of the provisions contained in this Warrant
shall be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way be affected or
impaired thereby. The parties shall endeavor in good faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of which comes as
close as possible to that of the invalid, illegal or unenforceable provisions.

12. Construction. The definitions of this Warrant shall apply equally to both the
singular and the plural forms of the terms defined. Wherever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The section and paragraph
headings used herein are for convenience of reference only, are not part of this Warrant and are
not to affect the construction of or be taken into consideration in interpreting this Warrant.

 

-7-

 

[Signature Page to Follow]

 

-8-

 

In Witness Whereof, the Company has executed this Common Stock Purchase Warrant as of
the date first written above.

	 	 	 	 	 
	 	COMPANY:

SYNTROLEUM CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

-1-

 

ANNEX I

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Case 1: Acquiror	 	 	Case 2: Acquiror	 	 	Case 3: Acquiror	 
	 	 	 	 	Price Above SYNM	 	 	Price Below SYNM	 	 	Price Equals SYNM	 
	 	 	Units	 	Price	 	 	Price	 	 	Price	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Example Change of Control Calculations
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	(A): Acquiror share price daily VWAP on day prior to Closing
	 	$/share	 	$	25.0000	 	 	$	2.0000	 	 	$	5.0000	 
	(B): Daily Market Price of Syntroleum on day prior to Closing
	 	$/share	 	$	5.0000	 	 	$	5.0000	 	 	$	5.0000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Adjusted Exercise Price
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Exercise Price in Effect Prior to Change of Control
	 	$/share	 	$	3.3750	 	 	$	3.3750	 	 	$	3.3750	 
	Multiplied by fraction (A) divided by (B)
	 	 	 	 	5.0000	 	 	 	0.4000	 	 	 	1.0000	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	Adjusted Exercise Price
	 	$/share	 	$	16.8750	 	 	$	1.3500	 	 	$	3.3750	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Adjusted Warrants Outstanding
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Fletcher Warrants in Effect Prior to Change of Control
	 	000 shares	 	 	5,556	 	 	 	5,556	 	 	 	5,556	 
	Multiplied by fraction (B) divided by (A)
	 	 	 	 	0.2000	 	 	 	2.5000	 	 	 	1.0000	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	Adjusted Warrants Outstanding
	 	000 shares	 	 	1,111	 	 	 	13,890	 	 	 	5,556	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Warrant Exercise Consideration Post Acquisition
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	New Exercise Price X
	 	$/share	 	$	16.8750	 	 	$	1.3500	 	 	$	3.3750	 
	New Warrants Outstanding
	 	000 shares	 	 	1,111	 	 	 	13,890	 	 	 	5,556	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	Exercise Consideration Post Acquisition
	 	000 $	 	$	18,748.12	**	 	$	18,751.50	 	 	$	18,751.50	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Equals
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Warrant Exercise Consideration Pre-Acquisition
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Original Exercise Price X
	 	$/share	 	$	3.3750	 	 	$	3.3750	 	 	$	3.3750	 
	Original Warrants
	 	000 shares	 	 	5,556	 	 	 	5,556	 	 	 	5,556	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	Exercise Consideration Pre Acquisition
	 	000 $	 	$	18,751.50	 	 	$	18,751.50	 	 	$	18,751.50	 

	 	 	 
	**	 	The variation from “Exercise Consideration Pre Acquisition” is due to rounding to the nearest
whole share in computing the New Warrants Outstanding.

 

 

 

NOTICE OF INTENT TO EXERCISE

			
	To:	 	Syntroleum Corporation

5416 South Yale, Suite 400

Tulsa, Oklahoma 74135

The undersigned hereby irrevocably elects to exercise the right of purchase represented by the
attached Warrant for, and to exercise thereunder,                      shares of Common Stock, of Syntroleum
Corporation, a Delaware corporation (the “Company”), at a per share exercise price equal to $                    .

	 	 	 	 	 
	Exercise Date:

	 	 
	 	(3 Business Days after the date of this Notice)
	 

	 	 

	 	 

Upon the Exercise Date, to the extent reasonably practicable, please deliver the shares of
Common Stock described above to the undersigned’s account via The Depository Trust Company’s
Deposit/Withdrawal at Custodian (DWAC) system using the following account information:

	 	 	 	 	 
	 
	 	 

	 	 
	 
	 	 

	 	 
	 
	 	 

	 	 
	 
	 	 

	 	 

If said number of shares of Common Stock shall not be all the shares of Common Stock issuable upon
exercise of the attached Warrant, a new Warrant is to be issued in the name of the undersigned for
the remaining balance of such shares of Common Stock.

	 	 	 	 	 
	 	Holder

 	 
	Dated:                     , ____ 	
 	 
	 	Signature 	 

 

 

 

SUBSCRIPTION

			
	To:	 	Syntroleum Corporation

5416 South Yale, Suite 400

Tulsa, Oklahoma 74135

The undersigned hereby irrevocably elects to exercise the right of purchase represented by the
attached Warrant for, and to exercise thereunder,                      shares of Common Stock, of Syntroleum
Corporation, a Delaware corporation (the “Company”), at a per share exercise price equal to $                    ,
and accordingly tenders herewith an aggregate payment of $                    , representing the aggregate
purchase price for such shares based on the price(s) per share provided for in such Warrant. Such
payment is being made in accordance with Section 2.1 of the attached Warrant.

The undersigned hereby represents and warrants as follows:

(a) the undersigned does not by the exercise of the Warrant pursuant to this notice violate
Section 2.6 and/or Section 2.7 of the Warrant;

(b) the undersigned and its “Tax Affiliates” (defined as any Person in which the undersigned
directly or indirectly through one or more intermediaries, owns any equity interest) do not and
will not own, immediately before or immediately after this exercise, more than 4.95% of the shares
of Common Stock of the Company outstanding as of the date hereof. For purposes of the foregoing
sentence and subsection (c) below: (A) ownership of Common Stock shall include any long derivative
or synthetic position and any other stock (as defined in Temporary Treasury Regulation Section
1.382-2T(f)(18) or any successor provision) of the Company held by the undersigned or its Tax
Affiliates; (B) notwithstanding the foregoing clause (A), ownership of Common Stock shall not
include any Common Stock which may be acquired pursuant to Section 2.1(b) of the Securities
Purchase Agreement or by exercise of this Warrant (other than this exercise) or any other Warrants
issued pursuant to the Securities Purchase Agreement until such Common Stock is purchased and
issued; (C) any short actual, synthetic or derivative positions shall not decrease the amount of
Common Stock that the undersigned and its Tax Affiliates are treated as owning, and (D) for
purposes of calculating the percentage ownership interest of the undersigned and its Tax Affiliates
as of a particular date, the aggregate number of shares of Common Stock outstanding shall be the
number of outstanding shares of Common Stock of the Company most recently reported prior to such
date by the Company in a filing with the SEC, provided, however, that if at least twenty (20)
Business Days prior to this exercise, the Company informs the undersigned in writing that it has
redeemed shares of its Common Stock and provides the undersigned with the number of outstanding
shares of Common Stock following such redemption which the undersigned can rely upon for this
purpose, the undersigned will use such revised number of outstanding shares instead, unless and
until further updated by a subsequent SEC filing and/or Company notice pursuant hereto; and

(c) the undersigned has delivered to the Company the Affidavits described in Section 4.2(d) of
the Securities Purchase Agreement and has performed all the Tax Covenants set forth in the
Securities Purchase Agreement, applying such Section 4.2(d) and the Tax Covenants as if the
undersigned were the Purchaser referenced therein.

[Signature Page to Follow]

 

 

 

	 	 	 	 	 
	 	Holder

 	 
	Dated:                     , ____ 	
 	 
	 	Signature 	 

Syntroleum Corporation hereby acknowledges receipt of this Subscription and authorizes issuance of
the shares of Common Stock described above.

	 	 	 	 	 
	Syntroleum Corporation

 	 	 
	By:  	 	 	 
	 	Title: 	 	 	 
	 	Date: 	 	 	 

 

 

 

NOTICE OF TRANSFER 

			
	To:	 	Syntroleum Corporation

5416 South Yale, Suite 400

Tulsa, Oklahoma 74135

For value received, the undersigned hereby sells, assigns and transfers unto
                     (the “Transferee”) [the attached Warrant] [                     Warrant Shares (the
“Transferred Warrant Shares”)], together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint                      attorney to transfer said [Warrant]
[Transferred Warrant Shares] on the books of Syntroleum Corporation, a Delaware corporation (the
“Company”), with full power of substitution in the premises.

If not all of the attached Warrant is to be so transferred, a new Warrant is to be issued in
the name of the undersigned for the balance of said Warrant.

The undersigned transferor hereby represents and warrants as follows:

(a) the transfer is in compliance with the requirements and restrictions set forth in 4.2 of
the Securities Purchase Agreement, applied as if the undersigned transferor were the Purchaser
referenced in such provisions; and

(b) it does not have a principal purpose of avoiding or ameliorating the impact of an
ownership change within the meaning of Treasury Regulation Section 1.382-4(d) related to the
transfer of the Warrant.

The Transferee hereby represents and warrants as follows:

(a) the Transferee and its “Tax Affiliates” (defined as any Person in which the Transferee,
directly or indirectly through one or more intermediaries, owns any equity interest) do not and
will not own, immediately before or immediately after this transfer, more than 4.95% of the shares
of Common Stock of the Company outstanding as of the date hereof. For purposes of the foregoing
sentence and subsection (b) below: (A) ownership of Common Stock shall include any long derivative
or synthetic position and any other stock (as defined in Temporary Treasury Regulation Section
1.382-2T(f)(18) or any successor provision) of the Company held by the Transferee or its Tax
Affiliates; (B) notwithstanding the foregoing clause (A), ownership of Common Stock shall not
include any Common Stock which may be acquired pursuant to Section 2.1(b) of the Securities
Purchase Agreement or by exercise of this Warrant or any other Warrants issued pursuant to the
Securities Purchase Agreement until such Common Stock is purchased and issued; (C) any short
actual, synthetic or derivative positions shall not decrease the amount of Common Stock that the
Transferee and its Tax Affiliates are treated as owning, and (D) for purposes of calculating the
percentage ownership interest of the Transferee and its Tax Affiliates as of a particular date, the
aggregate number of shares of Common Stock outstanding shall be the number of outstanding shares of
Common Stock of the Company most recently reported prior to such date by the Company in a filing
with the SEC, provided, however, that if at least twenty (20) business days prior to the transfer,
the Company informs the Transferee in writing that it has redeemed shares of its Common Stock and
provides the Transferee with the number of outstanding shares of Common Stock following such
redemption which the Transferee can rely upon for this purpose, the Transferee will use such
revised number of outstanding shares instead, unless and until further updated by a subsequent SEC
filing and/or Company notice pursuant hereto.

 

 

 

(b) the Transferee has delivered to the Company an affidavit, attesting that immediately
before and immediately after the transfer of this Warrant the Transferee and its Tax Affiliates
(treated in the aggregate) are not a “5-percent shareholder” (as the term is defined under Section
382 of the Code treating, for this purpose, the Transferee and its Tax Affiliates in the aggregate
as one individual) based on the number of outstanding shares determined in the manner provided in
subsection (a) above.

(c) it does not have a principal purpose of the transfer is not to avoid or ameliorate the
impact of an ownership change within the meaning of Treasury Regulation Section 1.382-4(d) related
to the transfer of the Warrant;

(d) that it has performed and will continue to perform the Tax Covenants, applied as if the
Transferee were the Purchaser referenced therein;

(e) the Transferee shall be subject to the terms and conditions of the Warrant, as if it were
the original Holder thereunder, and Sections 4.2(a), (b), (c), (d), and (f) of the Securities
Purchase Agreement, as if it were the Purchaser referenced thereunder, with respect to any exercise
or transfer of the Warrant; and

(f) the Transferee understands and acknowledges that the transfer is dependent upon the
representations and warranties of the Transferee being true and correct and that the Company shall
be entitled to rely on and shall be the beneficiary of these representations and warranties.

[Signature Page to Follow]

 

 

 

	 	 	 	 	 
	 	Holder

 	 
	Dated:                     , ____ 	
 	 
	 	Signature 	 

Acknowledged and Agreed:

	 	 	 
	Transferee
	 	 
	 
	 	 
	 

Signature

	 	 

Syntroleum Corporation hereby acknowledges receipt of this Notice of Transfer.

	 	 	 	 	 
	Syntroleum Corporation

 	 	 
	By:  	 	 	 
	 	Title: 	 	 	 
	 	Date: 	 	 	 

 

 

 

ANNEX B

PURCHASER 

NOTICE 

			
	To:	 	Syntroleum Corporation

5416 South Yale, Suite 400

Tulsa, Oklahoma 74135

Fax: 918-592-7979

This Purchaser Notice (“Notice”) is being delivered pursuant to Section 2.1(b)(i) of that
certain Securities Purchase Agreement dated October 14, 2009 (the “Agreement”) by and between
Syntroleum Corporation, a Delaware corporation (the “Company”), and Fletcher International, Ltd., a
company domiciled in Bermuda (the “Purchaser”). All capitalized terms used herein, and not
otherwise defined, shall have the meanings set forth in the Agreement.

The Purchaser has the right to purchase up to a maximum of $8,000,000.00 of Common Stock from
the Company at up to two closings of a minimum of $4,000,000.00 for the first such closing and up
to the remainder of the $8,000,000.00, if any, at the second such closing, subject to the terms and
conditions set forth in the Agreement. The Purchaser hereby irrevocably elects to exercise its
right to purchase the amount set forth as the “Subsequent Closing Investment Amount” of Common
Stock of the Company. The Subsequent Closing date shall be the date set forth below:

	 	 	 	 	 
	Subsequent Closing Date:

	 	 

	 	(at least 3 Business Days after the date of this Notice and no
later than 3 Business Days prior to June 30, 2010)
	 
	 	 	 	 
	Subsequent Closing 

Investment Amount:

	 	 

	 	(subject to the limitations set forth in Section 2.1(b))
	 
	 	 	 	 
	Subsequent Closing Shares:

	 	 

	 	(Subsequent Closing Investment Amount divided by the Per
Share Purchase Price) (rounded down to the nearest whole share)

 

 

 

In addition to any representations and warranties to be brought down upon the Subsequent Closing
pursuant to the Agreement, the Purchaser hereby represents and warrants as follows:

(i) The
Purchaser and its Tax Affiliates do not and will not own immediately
before or immediately after, the Subsequent Closing, more than 4.95% of the shares of Common Stock of the
Company outstanding at the time of such Subsequent Closing. For purposes of the foregoing
sentence: (A) ownership of Common Stock shall include any long derivative or synthetic position or
any other stock (as defined in Temporary Treasury Regulation Section 1.382-2T(f)(18) or any
successor provision) of the Company held by the Purchaser or its Tax Affiliates; (B)
notwithstanding any other provision in the Agreement (including the foregoing clause (A)),
ownership of Common Stock shall not include any Common Stock which may be acquired pursuant to
Section 2.1(b) of the Agreement or by exercise of any Warrant until such Common Stock is purchased
and issued to the Purchaser or its Tax Affiliates; (C) any short actual, synthetic or derivative
positions held by the Purchaser or its Tax Affiliates shall not decrease the amount of Common Stock
they are treated as owning, and (D) for purposes of calculating the percentage ownership interest of the Purchaser and
its Tax Affiliates as of a particular date, the aggregate number of shares of Common Stock
outstanding shall be the number of outstanding shares of Common Stock of the Company most recently
reported prior to such date by the Company in a filing with the SEC, provided, however, that if at
least twenty (20) Business Days prior to the Subsequent Closing, the Company informed the Purchaser
in writing that it has redeemed shares of its Common Stock and provided the Purchaser with the
number of outstanding shares of Common Stock following such redemption which the Purchaser can rely
upon for this purpose, the Purchaser shall use such revised number of outstanding shares instead,
unless and until further updated by a subsequent SEC filing and/or Company notice pursuant hereto;
and

(ii) Purchaser has delivered, and shall deliver upon the Subsequent Closing, to the Company
the Affidavit specified in Section 4.2(d) of the Agreement.

[Signature Page of the Purchaser and Acknowledgement by the Company Follows]

 

 

 

	 	 	 	 	 
	Dated:                     , ___      	Fletcher International, Ltd.

 	 
	 	By its duly authorized investment advisor
 	 
	 	FLETCHER ASSET MANAGEMENT, INC.

 	 
	 	By:  	 	 
	 	 	Title: 	 	 
	 	 	Date: 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Title: 	 	 
	 	 	Date: 	 	 

ACKNOWLEDGED AND ACCEPTED:

	 	 	 	 	 
	Syntroleum Corporation

 	 	 
	By:  	 	 	 
	 	Title: 	 	 	 
	 	Date:Exhibit 10.89

Exhibit 10.89

THIS
WARRANT IS SUBJECT TO RESTRICTIONS ON TRANSFER
SET FORTH IN THIS
COMMON STOCK PURCHASE WARRANT.

SYNTROLEUM CORPORATION

COMMON STOCK PURCHASE WARRANT

October 14, 2009

This Warrant (the “Warrant”) entitles Fletcher International, Ltd., a company domiciled in
Bermuda (including any successors or assigns, the “Holder”), for value received, to purchase from
SYNTROLEUM CORPORATION, a Delaware corporation (the “Company”), during the Warrant Term (as defined
below) and subject to the terms and conditions set forth herein, all or any portion of the Warrant
Shares (as defined below) at the Exercise Price (as defined below). This Warrant is issued subject
to the following terms and conditions:

1. Warrants.

1.1 General. This Warrant has been issued pursuant to that certain Securities
Purchase Agreement, dated October 14, 2009, as it may be amended from time to time, by and among the
Company and the Holder (the “Securities Purchase Agreement”), and are subject to the terms and
conditions thereof. Unless otherwise defined herein, capitalized terms used herein shall have the
meanings set forth in the Securities Purchase Agreement. A copy of the Securities Purchase
Agreement may be obtained at no cost by the Holder upon written request to the Secretary of the
Company at the principal executive offices of the Company.

1.2 Warrant Amount. This Warrant shall entitle the Holder to purchase up to
1,892,291 shares of newly-issued Common Stock (the “Warrant Shares”).

1.3 Exercise Price. The per share exercise price for the Warrant Shares shall be
$3.3029 (the “Exercise Price”).

1.4 Warrant Term. Subject to the limitations contained herein, the Warrant may be
exercised (in whole or in part) at any time or from time to time after the date hereof until 11:59
P.M., New York City time on the date that is six (6) years after the date hereof (the “Warrant
Term”); provided, however, that in connection with a Change of Control (as defined in the
Securities Purchase Agreement), this Warrant shall be subject to Section 3.4.

2. Exercise of Warrant.

2.1 Method of Exercise; Payment. Subject to all of the terms and conditions hereof
and the limitations set forth in Sections 2.6 and 2.7, the Holder shall
notify the Company prior to any exercise of this Warrant, in whole or in part, with respect to any
Warrant Shares, during the Warrant Term, by delivering a notice of intent to exercise substantially
in the form attached hereto, three (3) Business Days prior to the exercise date set forth therein;
provided that any such notice must be delivered to the Company at least three (3) Business Days
prior to the expiration of the Warrant Term. Upon the exercise date set forth in the applicable
notice, subject to all of the terms and conditions hereof and the limitations set forth in
Sections 2.6 and 2.7, the Holder shall (1) surrender this Warrant to the
Company at its principal office, (2) deliver to the Company a subscription substantially in the
form attached hereto, and (3) send a (a) wire transfer of immediately available funds or (b)
certified or official bank check payable to the order of the Company, in each case in the amount
obtained by multiplying (i) the number
of Warrant Shares for which the Warrant is being exercised, as designated in such notice and
subscription, by (ii) the Exercise Price. Thereupon, the Holder shall be entitled to receive the
applicable number of duly authorized, validly issued, fully paid and nonassessable Warrant Shares.
Notwithstanding the foregoing, each exercise of the Warrant by the Holder must be for at least
1,000,000 Warrant Shares; provided, however, that the Warrant may be exercised for a lower number
of Warrant Shares if such exercise is for all remaining Warrant Shares subject to the Warrant.

 

 

 

2.2
Delivery of Stock Certificates on Exercise. Upon the exercise date of this Warrant, unless
otherwise mutually agreed upon by the parties, to the extent reasonably practicable, the Company,
at its expense, and in accordance with applicable securities laws, shall deliver the number of
Warrant Shares purchased by the Holder on such exercise to Holder’s account via The Depository
Trust Company’s Deposit/Withdrawal at Custodian (DWAC) system using the account information
provided by Holder in its notice of intent to exercise.

2.3 Shares To Be Fully Paid and Nonassessable. All Warrant Shares issued upon the
exercise of this Warrant shall be duly authorized, validly issued, fully paid and nonassessable,
free of all liens, taxes, charges and other encumbrances or restrictions on sale (other than those
set forth herein).

2.4
Payment of Taxes and Expenses. The Company shall pay any recording, filing, stamp or
similar tax which may be payable in respect of any transfer involved in the issuance of, and the
preparation and, as applicable, the delivery of certificates representing or the delivery via The
Depository Trust Company’s Deposit/Withdrawal at Custodian (DWAC) system of, (i) any Warrant Shares
purchased upon exercise of this Warrant and/or (ii) new or replacement warrants in the Holder’s
name or the name of any transferee of all or any portion of
this Warrant.

2.5 Cooperation with Filings. The Company shall assist and cooperate with the Holder
if the Holder is required to make any governmental or regulatory filings or obtain any governmental
or regulatory approvals prior to or in connection with any exercise of this Warrant (including,
without limitation, making any filings required to be made by the Company).

2.6 Limitation on Exercise. This Warrant shall not be exercisable (i) to the extent
that, on or immediately after exercise, the representations in Section 3.2(d) of the Securities
Purchase Agreement would be untrue, and (ii) unless and until such representations are made and the
Tax Covenants, as applicable, are performed.

2.7 Limitation on Exercise by Transferees. In the event this Warrant is transferred
in accordance with Section 5, this Warrant shall not be exercisable (i) to the extent that,
on or immediately after exercise, the representations in Section 3.2(d) of the Securities Purchase
Agreement would be untrue with respect to the person exercising the Warrant and such person’s Tax
Affiliates, and (ii) unless and until the person exercising the Warrant makes such representations
and performs the Tax Covenants. For purposes of this Section 2.7, references to the
Purchaser and its Tax Affiliates in Section 3.2(d) of the Securities Purchase Agreement and in the
Tax Covenants shall be treated as referring to the person exercising the Warrant and such person’s
Tax Affiliates.

2.8 The provisions of Section 4.2(g) of the Securities Purchase Agreement shall apply hereto,
to the extent relevant to the provisions hereof, substituting “Holder” for “Purchaser” therein.

3. Adjustment of Exercise Price and Warrant Shares. The Exercise Price and the number
of Warrant Shares shall be subject to adjustment from time to time upon the happening of certain
events as described in this Section 3.

3.1 Subdivision or Combination of Stock. If at any time or from time to time after
the date hereof, the Company shall subdivide (by way of stock dividend, stock split or otherwise)
its outstanding shares of Common Stock, the Exercise Price in effect immediately prior to such
subdivision
shall be reduced proportionately and the number of Warrant Shares (calculated to the nearest
whole share) shall be increased proportionately, and conversely, in the event the outstanding
shares of Common Stock shall be combined (whether by stock combination, reverse stock split or
otherwise) into a smaller number of shares, the Exercise Price in effect immediately prior to such
combination shall be increased proportionately and the number of Warrant Shares (calculated to the
nearest whole share) shall be decreased proportionately. The Exercise Price and the number of
Warrant Shares, as so adjusted, shall be readjusted in the same manner upon the happening of any
successive event or events described in this Section 3.1.

 

-2-

 

3.2 Adjustment for Stock Dividends. If at any time after the date hereof, the Company
shall declare a dividend or make any other distribution upon any class or series of stock of the
Company payable in shares of Common Stock, the Exercise Price in effect immediately prior to such
declaration or distribution shall be reduced proportionately and the number of Warrant Shares
(calculated to the nearest whole share) shall be increased proportionately, to reflect the issuance
of any shares of Common Stock, issuable in payment of such dividend or distribution. The Exercise
Price and the number of Warrant Shares, as so adjusted, shall be readjusted in the same manner upon
the happening of any successive event or events described in this Section 3.2.

3.3 Adjustments for Reclassifications. If the Common Stock issuable upon the exercise
of this Warrant shall be changed into the same or a different number of shares of any class(es) or
series of stock and/or the right to receive property, whether by reclassification or otherwise
(other than an adjustment under Sections 3.1 and 3.2 or a merger, consolidation, or
sale of assets provided for under Section 3.4), then and in each such event, the Holder
hereof shall have the right thereafter to convert each Warrant Share into the kind and amount of
shares of stock and other securities and property receivable upon such reclassification, or other
change by holders of the number of shares of Common Stock into which such Warrant Shares would have
been convertible immediately prior to such reclassification or change, all subject to successive
adjustments thereafter from time to time pursuant to and in accordance with, the provisions of this
Section 3.

3.4 Adjustments for Merger or Consolidation.

(a) If
during the Warrant Term a Change of Control or plan or proposal with respect thereto is publicly announced or
occurs, and the Acquiring Person (as defined in the Securities Purchase Agreement) (or its direct
or indirect parent entity) does not have a class of common equity securities listed or admitted for
trading on any securities exchange or over-the-counter or other organized market, whether U.S. or
not, then this Warrant shall terminate upon the effective date Change of Control; provided that
between the date such Change of Control is announced and the effective date of the Change of
Control, but not thereafter, the Holder shall have the right to submit to the Company an exercise
notice (which exercise notice may, at the Holder’s option, specify that the exercise and payment of
the Exercise Price shall occur simultaneously with, and be contingent upon, the occurrence of the
Change of Control) in accordance with the terms and conditions of this Warrant; provided, however,
that so long as the Company has provided the Holder with at least five (5) Business Days (as
defined in the Securities Purchase Agreement) advance written notice of the effective date for the
Change of Control, the Company shall not be required to postpone such closing date in order to
facilitate the closing of the exercise.

 

-3-

 

(b)
If during the Warrant Term a Change of Control or plan or proposal with respect
 thereto is publicly announced or occurs, and the Acquiring Person (or its direct or indirect parent entity) has a class of common equity
securities listed or admitted for trading on any securities exchange or over-the-counter or other organized market, whether U.S. or not, then:

(i) Between the date such Change of Control is announced and the effective date of the Change
of Control, the Holder shall have the right to submit to the Company an exercise notice (which
exercise notice may, at the Holder’s option, specify that the exercise and payment of the Exercise
Price shall occur simultaneously with, and be contingent upon, the occurrence of the Change of
Control) in accordance with the terms and conditions of this Warrant; provided, however, that so
long as the Company has provided the Holder with at least five (5) Business Days advance written
notice of the effective date for the Change of Control, the Company shall not be required to
postpone such closing date in order to facilitate the closing of the exercise;

(ii) The Company shall not enter into an agreement with the Acquiring Person resulting in such
Change of Control unless such agreement expressly obligates the Acquiring Person to assume all of
the Company’s obligations under this Warrant; and

(iii) In the event that any portion of this Warrant remains unexercised upon consummation of
the Change of Control, the Holder shall thereafter automatically have equivalent rights with
respect to the Acquiring Person, and from and after the effective date of the Change of Control and
regardless of whether the Acquiring Person expressly assumes the Company’s obligations:

(A) all references to the Company in this Warrant shall be references to the Acquiring Person,

(B) all references to Common Stock in this Warrant shall be references to the securities for
which the Common Stock are exchanged in the Change of Control (or if none, the most widely-held
class of common equity securities of the Acquiring Person),

(C) the Exercise Price shall be adjusted, employing the methodology set forth in the
example(s) on Annex I hereto, to equal the Exercise Price as in effect immediately prior to
the Change of Control multiplied by a fraction, (1) the numerator of which is the volume-weighted
average price, calculated to the nearest ten thousandth (i.e., four decimal places (.xxxx)), of the
securities for which Common Stock is exchanged in the Change of Control (or if none, the most
widely-held class of voting common equity securities of the Acquiring Person), and (2) the
denominator of which is the Daily Market Price of the Company, in the case of (1) and (2)
determined as of the Business Day immediately preceding and excluding the date on which the Change
of Control is consummated. For purposes of this Warrant, “Daily Market Price” has the meaning
given in the Securities Purchase Agreement, substituting references to the “Holder” for the
“Purchaser,” and

(D) the number of Warrant Shares shall be adjusted, employing the methodology set forth in the
example(s) on Annex I hereto, to equal the product of the number of Warrant Shares in
effect immediately prior to the Change of Control multiplied by a fraction, (1) the numerator of
which is the Daily Market Price of the Company, and (2) the denominator of which is the
volume-weighted average price, calculated to the nearest ten thousandth (i.e., four decimal places
(.xxxx)), of the securities for which Common Stock is exchanged in the Change of Control (or if
none, the most widely-held class of voting common equity securities of the Acquiring Person), in
the case of (1) and (2) determined as of the Business Day immediately preceding and excluding the
date on which the Change of Control is consummated.

3.5 Minimum Adjustment of Exercise Price. If the amount of any adjustment of the
Exercise Price required pursuant to this Section 3 would be less than one-tenth (1/10) of
one percent (1%) of the Exercise Price in effect at the time such adjustment is otherwise so
required to be made, such amount shall be carried forward and adjustment with respect thereto made
at the time of and together with
any subsequent adjustment which, together with such amount and any other amount or amounts so
carried forward, shall aggregate at least one tenth (1/10) of one percent (1%) of such Exercise
Price.

 

-4-

 

3.6 Certificate as to Adjustments. Upon the occurrence of each adjustment or
readjustment of the Exercise Price and number of Warrant Shares pursuant to this Section 3,
this Warrant shall, without any action on the part of the Holder, be adjusted in accordance with
this Section 3, and the Company, at its expense, promptly shall compute such adjustment or
readjustment in accordance with the terms hereof and prepare and furnish to the Holder a
certificate setting forth such adjustment or readjustment, showing in detail the facts upon which
such adjustment or readjustment is based. The Company will forthwith send a copy of each such
certificate to the Holder in accordance with Section 7.4 below.

4. Notices of Record Date. Upon (a) any establishment by the Company of a record date
of the holders of any class of securities for the purpose of determining the holders thereof who
are entitled to receive any dividend or other distribution, or right or option to acquire
securities of the Company, or any other right, or (b) any capital reorganization, reclassification,
recapitalization, merger or consolidation of the Company with or into any other Person, any
transfer of all or substantially all the assets of the Company, or any voluntary or involuntary
dissolution, liquidation or winding up of the Company, or the sale, in a single transaction, of a
majority of the Company’s voting stock (whether newly issued, or from treasury, or previously
issued and then outstanding, or any combination thereof), the Company shall mail to the Holder at
least ten (10) Business Days, or such longer period as may be required by law, prior to the record
date specified therein and at least ten (10) Business Days prior to the date specified in clause
(ii) or (iii) hereof, a notice specifying (i) the date established as the record date for the
purpose of such dividend, distribution, option or right and a description of such dividend,
distribution, option or right, (ii) the date on which any such reorganization, reclassification,
transfer, consolidation, merger, dissolution, liquidation or winding up, or sale is expected to
become effective and (iii) the date, if any, fixed as to when the holders of record of Common Stock
shall be entitled to exchange their shares of Common Stock for securities or other property
deliverable upon such reorganization, reclassification, transfer, consolidation, merger,
dissolution, liquidation or winding up. Subject to the other limitations on exercise contained in
this Warrant, nothing in this Section 4 shall prohibit the Holder from exercising this
Warrant during the ten (10) Business Day period commencing on the date of such notice.

5. Transfer Provisions, etc.

5.1 Limitations on Transfer. None of the Holder, or any subsequent successor,
transferee or assign, shall sell or otherwise transfer this Warrant to any Person unless and until
(1) the transferee makes the representations in Section 3.2(d) of the Securities Purchase
Agreement, agrees to perform and, to the extent then applicable, performs the Tax Covenants and (2)
the transferor and the transferee, each represent in writing, under penalty of perjury, that it
does not have a principal purpose of avoiding or ameliorating the impact of an ownership change
within the meaning of Treasury Regulation Section 1.382-4(d) related to the transfer of the
Warrant. For purposes of this Section 5.1, references to the Purchaser and its Tax
Affiliates in Section 3.2(d) and in the Tax Covenants of the Securities Purchase Agreement shall be
treated as referring to the transferee and its Tax Affiliates. Upon any transfer by the Holder, or
any subsequent successor, transferee or assign, such Person shall deliver to the Company the Notice
of Transfer, in the form attached hereto.

5.2 Warrant Register. The Company shall keep at its principal office a register for
the registration, and registration of transfers, of the Warrants. The name and address of each
Holder of one or more of the Warrants, each transfer thereof and the name and address of each
transferee of one or more of the Warrants shall be registered in such register.

 

-5-

 

6. Lost, Stolen or Destroyed Warrant. Upon receipt by the Company of evidence
satisfactory to it of loss, theft, destruction or mutilation of this Warrant and, in the case of
loss, theft or destruction, on delivery of a customary affidavit of the Holder and customary
unsecured indemnity agreement, or, in the case of mutilation, upon surrender of this Warrant, the
Company at its expense will execute and deliver, or will instruct its transfer agent to execute and
deliver, a new Warrant of like tenor and date and representing the same rights represented by such
lost, stolen, destroyed or mutilated warrant and any such lost, stolen, mutilated or destroyed
Warrant thereupon shall become void.

7. General.

7.1 Authorized Shares, Reservation of Shares for Issuance. At all times while this
Warrant is outstanding, the Company shall maintain its corporate authority to issue, and shall have
authorized and reserved for issuance upon exercise of this Warrant, such number of shares of Common
Stock, and any other capital stock or other securities as shall be sufficient to perform its
obligations under this Warrant (after giving effect to any and all adjustments to the number and
kind of Warrant Shares purchasable upon exercise of this Warrant).

7.2 No Impairment. The Company will not, by amendment of its certificate of
incorporation or through any reorganization, transfer of assets, consolidation, merger,
dissolution, issuance or sale of securities, sale or other transfer of any of its assets or
properties, or any other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of
all such terms and in the taking of all such action as may be necessary or appropriate in order to
protect the rights of the Holder hereunder against impairment. Without limiting the generality of
the foregoing, the Company (a) will not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above the amount payable therefor on such exercise,
and (b) will take all action that may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of
this Warrant.

7.3 No Rights as Stockholder. Except as provided herein, the Holder shall not be
entitled to vote or to receive dividends or to be deemed the holder of Common Stock that may at any
time be issuable upon exercise of this Warrant for any purpose whatsoever, nor shall anything
contained herein be construed to confer upon the Holder any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any corporate action
(whether upon any recapitalization, issuance or reclassification of stock, change of par value or
change of stock to no par value, consolidation, merger or conveyance or otherwise), or to receive
notice of meetings (except to the extent otherwise provided in this Warrant), or to receive
dividends or subscription rights, until the Holder shall have exercised this Warrant and been
issued Warrant Shares in accordance with the provisions hereof and continues to hold Warrant
Shares.

7.4 Notices. Any notices, reports or other correspondence (hereinafter collectively
referred to as “correspondence”) required or permitted to be given hereunder shall be sent by
postage prepaid first class mail, overnight courier or facsimile transmission, or delivered by hand
to the party to whom such correspondence is required or permitted to be given hereunder. The date
of giving any notice shall be the date of its actual receipt.

 

-6-

 

(a) All correspondence to the Company shall be addressed as follows:

Syntroleum Corporation

5416 South Yale, Suite 400

Tulsa, Oklahoma 74135

Attn:         Principal Financial Officer

Facsimile: (918) 592-7979

with a copy to:

Syntroleum Corporation

5416 South Yale, Suite 400

Tulsa, Oklahoma 74135

Attention: Chief Executive Officer

Facsimile: (918) 592-7979

(b) All correspondence to the Holder shall be addressed to the Holder at its address appearing
in the books maintained by the Company.

8. Amendment and Waiver. No failure or delay of the Holder in exercising any power or
right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any other right or power.
The rights and remedies of the Holder are cumulative and not exclusive of any rights or remedies
which it would otherwise have. Any term of this Warrant may be amended or waived upon the written
consent of the Company and the Holder.

9. Governing Law. All questions concerning the construction, validity, enforcement
and interpretation of the Warrant shall be governed by and construed and enforced in accordance
with the internal laws of the State of Delaware, without regard to the principles of conflicts of
law thereof.

10. Covenants To Bind Successor and Assigns. Except as expressly provided otherwise,
all covenants, stipulations, promises and agreements in this Warrant contained by or on behalf of
the Company shall bind its successors and assigns, whether so expressed or not.

11. Severability. In case any one or more of the provisions contained in this Warrant
shall be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way be affected or
impaired thereby. The parties shall endeavor in good faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of which comes as
close as possible to that of the invalid, illegal or unenforceable provisions.

12. Construction. The definitions of this Warrant shall apply equally to both the
singular and the plural forms of the terms defined. Wherever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The section and paragraph
headings used herein are for convenience of reference only, are not part of this Warrant and are
not to affect the construction of or be taken into consideration in interpreting this Warrant.

[Signature Page to Follow]

 

-7-

 

In Witness Whereof, the Company has executed this Common Stock Purchase Warrant as of
the date first written above.

	 	 	 	 	 
	 	COMPANY:

SYNTROLEUM CORPORATION

 	 
	 	By:  	/s/ Edward G. Roth	 
	 	 	Name:  	Edward G. Roth	 
	 	 	Title:  	Chief Executive Officer	 

 

 

ANNEX I

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Case 1: Acquiror	 	 	Case 2: Acquiror	 	 	Case 3: Acquiror	 
	 	 	 	 	Price Above	 	 	Price Below	 	 	Price Equals	 
	 	 	Units	 	SYNM Price	 	 	SYNM Price	 	 	SYNM Price	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Example Change of Control Calculations
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	(A): Acquiror share price daily VWAP on day prior to Closing
	 	$/share	 	$	 25.0000	 	 	$	 2.0000	 	 	$	 5.0000	 
	(B): Daily Market Price of Syntroleum on day prior to Closing
	 	$/share	 	$	 5.0000	 	 	$	 5.0000	 	 	$	 5.0000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Adjusted Exercise Price
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Exercise Price in Effect Prior to Change of Control
	 	$/share	 	$	 3.3750	 	 	$	 3.3750	 	 	$	 3.3750	 
	Multiplied by fraction (A) divided by (B)
	 	 	 	 	5.0000	 	 	 	0.4000	 	 	 	1.0000	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	Adjusted Exercise Price
	 	$/share	 	$	 16.8750	 	 	$	 1.3500	 	 	$	 3.3750	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Adjusted Warrants Outstanding
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Fletcher Warrants in Effect Prior to Change of Control
	 	000 shares	 	 	5,556	 	 	 	5,556	 	 	 	5,556	 
	Multiplied by fraction (B) divided by (A)
	 	 	 	 	0.2000	 	 	 	2.5000	 	 	 	1.0000	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	Adjusted Warrants Outstanding
	 	000 shares	 	 	1,111	 	 	 	13,890	 	 	 	5,556	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Warrant Exercise Consideration Post Acquisition
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	New Exercise Price X
	 	$/share	 	$	 16.8750	 	 	$	 1.3500	 	 	$	 3.3750	 
	New Warrants Outstanding
	 	000 shares	 	 	1,111	 	 	 	13,890	 	 	 	5,556	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	Exercise Consideration Post Acquisition
	 	000 $	 	$	 18,748.12	**	 	$	 18,751.50	 	 	$	 18,751.50	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Equals
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Warrant Exercise Consideration Pre-Acquisition
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Original Exercise Price X
	 	$/share	 	$	 3.3750	 	 	$	 3.3750	 	 	$	 3.3750	 
	Original Warrants
	 	000 shares	 	 	5,556	 	 	 	5,556	 	 	 	5,556	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	Exercise Consideration Pre Acquisition
	 	000 $	 	$	 18,751.50	 	 	$	 18,751.50	 	 	$	 18,751.50	 

	 	 	 
	**	 	The variation from “Exercise Consideration Pre Acquisition” is due to rounding to the nearest
whole share in computing the New Warrants Outstanding. 

 

 

NOTICE OF INTENT TO EXERCISE

	 	 	 
	To:

	 	Syntroleum Corporation
	 

	 	5416 South Yale, Suite 400
	 

	 	Tulsa, Oklahoma 74135

The undersigned hereby irrevocably elects to exercise the right of purchase represented by the
attached Warrant for, and to exercise thereunder,                      shares of Common Stock, of Syntroleum
Corporation, a Delaware corporation (the “Company”), at a per share exercise price equal to $          .

	 	 	 	 	 
	Exercise Date:      
                              

	 	 	 	(3 Business Days after the date of this Notice)

Upon the Exercise Date, to the extent reasonably practicable, please deliver the shares of
Common Stock described above to the undersigned’s account via The Depository Trust Company’s
Deposit/Withdrawal at Custodian (DWAC) system using the following account information:

	 	 	 	 	 
	 
	 	 

	 	 
	 
	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 

If said number of shares of Common Stock shall not be all the shares of Common Stock issuable upon
exercise of the attached Warrant, a new Warrant is to be issued in the name of the undersigned for
the remaining balance of such shares of Common Stock.

	 	 	 	 	 
	 

	 	Holder
	 	 
	 	 	 	 	 
	Dated:                     ,           
	 	 	 	 
	 

	 	 	 	 
	 

	 	Signature	 	 

 

 

SUBSCRIPTION

	 	 	 
	To:

	 	Syntroleum Corporation
	 

	 	5416 South Yale, Suite 400
	 

	 	Tulsa, Oklahoma 74135

The undersigned hereby irrevocably elects to exercise the right of purchase represented by the
attached Warrant for, and to exercise thereunder,                      shares of Common Stock, of Syntroleum
Corporation, a Delaware corporation (the “Company”), at a per share exercise price equal to $          ,
and accordingly tenders herewith an aggregate payment of $                    , representing the aggregate
purchase price for such shares based on the price(s) per share provided for in such Warrant. Such
payment is being made in accordance with Section 2.1 of the attached Warrant.

The undersigned hereby represents and warrants as follows:

(a) the undersigned does not by the exercise of the Warrant pursuant to this notice violate
Section 2.6 and/or Section 2.7 of the Warrant;

(b) the undersigned and its “Tax Affiliates” (defined as any Person in which the undersigned
directly or indirectly through one or more intermediaries, owns any equity interest) do not and
will not own, immediately before or immediately after this exercise, more than 4.95% of the shares
of Common Stock of the Company outstanding as of the date hereof. For purposes of the foregoing
sentence and subsection (c) below: (A) ownership of Common Stock shall include any long derivative
or synthetic position and any other stock (as defined in Temporary Treasury Regulation Section
1.382-2T(f)(18) or any successor provision) of the Company held by the undersigned or its Tax
Affiliates; (B) notwithstanding the foregoing clause (A), ownership of Common Stock shall not
include any Common Stock which may be acquired pursuant to Section 2.1(b) of the Securities
Purchase Agreement or by exercise of this Warrant (other than this exercise) or any other Warrants
issued pursuant to the Securities Purchase Agreement until such Common Stock is purchased and
issued; (C) any short actual, synthetic or derivative positions shall not decrease the amount of
Common Stock that the undersigned and its Tax Affiliates are treated as owning, and (D) for
purposes of calculating the percentage ownership interest of the undersigned and its Tax Affiliates
as of a particular date, the aggregate number of shares of Common Stock outstanding shall be the
number of outstanding shares of Common Stock of the Company most recently reported prior to such
date by the Company in a filing with the SEC, provided, however, that if at least twenty (20)
Business Days prior to this exercise, the Company informs the undersigned in writing that it has
redeemed shares of its Common Stock and provides the undersigned with the number of outstanding
shares of Common Stock following such redemption which the undersigned can rely upon for this
purpose, the undersigned will use such revised number of outstanding shares instead, unless and
until further updated by a subsequent SEC filing and/or Company notice pursuant hereto; and

(c) the undersigned has delivered to the Company the Affidavits described in Section 4.2(d) of
the Securities Purchase Agreement and has performed all the Tax Covenants set forth in the
Securities Purchase Agreement, applying such Section 4.2(d) and the Tax Covenants as if the
undersigned were the Purchaser referenced therein.

[Signature Page to Follow]

 

 

	 	 	 	 	 
	 

	 	Holder
	 	 
	 	 	 	 	 
	Dated:                     ,           
	 	 	 	 
	 

	 	 	 	 
	 

	 	Signature	 	 

Syntroleum Corporation hereby acknowledges receipt of this Subscription and authorizes issuance of
the shares of Common Stock described above.

Syntroleum Corporation

	 	 	 	 	 
	By: 

	 	 	 	 
	 

	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 
	Date: 
	 	 	 	 
	 

	 	 	 	 

 

 

 

NOTICE OF TRANSFER 

	 	 	 
	To:

	 	Syntroleum Corporation
	 

	 	5416 South Yale, Suite 400
	 

	 	Tulsa, Oklahoma 74135

For value received, the undersigned hereby sells, assigns and transfers unto
                                        
(the “Transferee”) [the attached
Warrant]
[                    
Warrant Shares (the “Transferred Warrant Shares”)], together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint                                          attorney to transfer said [Warrant]
[Transferred Warrant Shares] on the books of Syntroleum Corporation, a Delaware corporation (the
“Company”), with full power of substitution in the premises.

If not all of the attached Warrant is to be so transferred, a new Warrant is to be issued in
the name of the undersigned for the balance of said Warrant.

The undersigned transferor hereby represents and warrants as follows:

(a) the transfer is in compliance with the requirements and restrictions set forth in 4.2 of
the Securities Purchase Agreement, applied as if the undersigned transferor were the Purchaser
referenced in such provisions; and

(b) it does not have a principal purpose of avoiding or ameliorating the impact of an
ownership change within the meaning of Treasury Regulation Section 1.382-4(d) related to the
transfer of the Warrant.

The Transferee hereby represents and warrants as follows:

(a) the Transferee and its “Tax Affiliates” (defined as any Person in which the Transferee,
directly or indirectly through one or more intermediaries, owns any equity interest) do not and
will not own, immediately before or immediately after this transfer, more than 4.95% of the shares
of Common Stock of the Company outstanding as of the date hereof. For purposes of the foregoing
sentence and subsection (b) below: (A) ownership of Common Stock shall include any long derivative
or synthetic position and any other stock (as defined in Temporary Treasury Regulation Section
1.382-2T(f)(18) or any successor provision) of the Company held by the Transferee or its Tax
Affiliates; (B) notwithstanding the foregoing clause (A), ownership of Common Stock shall not
include any Common Stock which may be acquired pursuant to Section 2.1(b) of the Securities
Purchase Agreement or by exercise of this Warrant or any other Warrants issued pursuant to the
Securities Purchase Agreement until such Common Stock is purchased and issued; (C) any short
actual, synthetic or derivative positions shall not decrease the amount of Common Stock that the
Transferee and its Tax Affiliates are treated as owning, and (D) for purposes of calculating the
percentage ownership interest of the Transferee and its Tax Affiliates as of a particular date, the
aggregate number of shares of Common Stock outstanding shall be the number of outstanding shares of
Common Stock of the Company most recently reported prior to such date by the Company in a filing
with the SEC, provided, however, that if at least twenty (20) business days prior to the transfer,
the Company informs the Transferee in writing that it has redeemed shares of its Common Stock and
provides the Transferee with the number of outstanding shares of Common Stock following such
redemption which the Transferee can rely upon for this purpose, the Transferee will use such
revised number of outstanding shares instead, unless and until further updated by a subsequent SEC
filing and/or Company notice pursuant hereto.

 

 

 

(b) the Transferee has delivered to the Company an affidavit, attesting that immediately
before and immediately after the transfer of this Warrant the Transferee and its Tax Affiliates
(treated in the aggregate) are not a “5-percent shareholder” (as the term is defined under Section
382 of the Code treating, for this purpose, the Transferee and its Tax Affiliates in the aggregate
as one individual) based on the number of outstanding shares determined in the manner provided in
subsection (a) above.

(c) it does not have a principal purpose of the transfer is not to avoid or ameliorate the
impact of an ownership change within the meaning of Treasury Regulation Section 1.382-4(d) related
to the transfer of the Warrant;

(d) that it has performed and will continue to perform the Tax Covenants, applied as if the
Transferee were the Purchaser referenced therein;

(e) the Transferee shall be subject to the terms and conditions of the Warrant, as if it were
the original Holder thereunder, and Sections 4.2(a), (b), (c), (d), and (f) of the Securities
Purchase Agreement, as if it were the Purchaser referenced thereunder, with respect to any exercise
or transfer of the Warrant; and

(f) the Transferee understands and acknowledges that the transfer is dependent upon the
representations and warranties of the Transferee being true and correct and that the Company shall
be entitled to rely on and shall be the beneficiary of these representations and warranties.

[Signature Page to Follow]

 

 

 

	 	 	 	 	 
	 

	 	Holder
	 	 
	 
	 	 
	Dated:                     ,           
	 	 	 	 
	 

	 	 	 	 
	 

	 	Signature	 	 

Acknowledged and Agreed:

Transferee

	 	 	 
	 
	 	 
	 

Signature

	 	 

Syntroleum Corporation hereby acknowledges receipt of this Notice of Transfer.

Syntroleum Corporation

	 	 	 	 	 
	By: 

	 	 	 	 
	 

	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 
	Date:

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