THIS WARRANT IS SUBJECT TO
RESTRICTIONS ON TRANSFER
SET FORTH IN THIS COMMON STOCK PURCHASE WARRANT.
COMMON STOCK PURCHASE
WARRANT
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:
1.1 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 .
2.1 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
|
