EXHIBIT 99.6
WARRANT AGREEMENT
Dated as of May 26, 2004
Between
SYNTROLEUM CORPORATION
and
AMERICAN STOCK TRANSFER AND TRUST COMPANY
as Warrant Agent
TABLE OF CONTENTS
Page
----
ARTICLE I
ISSUANCE, FORM, EXECUTION, DELIVERY AND
REGISTRATION OF WARRANT CERTIFICATES
Section 1.01 Issuance of Warrants ................................................... 1
Section 1.02 Form of Warrant Certificates ........................................... 1
Section 1.03 Execution of Warrant Certificates ...................................... 2
Section 1.04 Authentication and Delivery ............................................ 2
Section 1.05 Temporary Warrant Certificates ......................................... 3
Section 1.06 Separation of Warrants and Shares ...................................... 3
Section 1.07 Registration ........................................................... 3
Section 1.08 Registration of Transfers and Exchanges ................................ 4
Section 1.09 Lost, Stolen, Destroyed, Defaced or Mutilated Warrant Certificates ..... 6
Section 1.10 Offices for Exercise, etc .............................................. 7
ARTICLE II
DURATION, EXERCISE OF WARRANTS AND EXERCISE PRICE
Section 2.01 Duration of Warrants .................................................... 7
Section 2.02 Exercise, Exercise Price, Settlement and Delivery. ...................... 8
Section 2.03 Cancellation of Warrant Certificates. ................................... 9
ARTICLE III
OTHER PROVISIONS RELATING TO
RIGHTS OF HOLDERS OF WARRANTS
Section 3.01 Enforcement of Rights. .................................................. 9
ARTICLE IV
CERTAIN COVENANTS OF THE COMPANY
Section 4.01 Payment of Taxes. ....................................................... 10
Section 4.02 Reservation of Shares. .................................................. 10
Section 4.03 Registration of Securities. ............................................. 10
ARTICLE V
ADJUSTMENTS
Section 5.01 Adjustment of Exercise Price and Number of Shares Issuable .............. 11
Section 5.02 Fractional Interest. .................................................... 17
Section 5.03 When Adjustment Not Required. ........................................... 17
Section 5.04 Challenge to Good Faith Determination. .................................. 17
Section 5.05 Treasury Stock. ......................................................... 18
Section 5.06 Notices to Warrant Holders. ............................................. 18
Section 5.07 Par Value of Shares of Common Stock ..................................... 18
ARTICLE VI
CONCERNING THE WARRANT AGENT
Section 6.01 Warrant Agent. .......................................................... 19
Section 6.02 Conditions of Warrant Agent's Obligations. .............................. 19
Section 6.03 Resignation and Appointment of Successor. ............................... 22
ARTICLE VII
MISCELLANEOUS
Section 7.01 Amendment. .............................................................. 24
Section 7.02 Notices and Demands to the Company and Warrant Agent. ................... 24
Section 7.03 Addresses for Notices to Parties and for Transmission of Documents. ..... 24
Section 7.04 Notices to Holders ...................................................... 25
Section 7.05 Applicable Law. ......................................................... 25
Section 7.06 Obtaining of Governmental Approvals. .................................... 25
Section 7.07 Persons Having Rights Under Agreement. .................................. 25
Section 7.08 Headings. ............................................................... 25
Section 7.09 Counterparts. ........................................................... 25
Section 7.10 Inspection of Agreement. ................................................ 25
Section 7.11 Successors. ............................................................. 26
EXHIBIT A - Form of Warrant Certificate
EXHIBIT B - Certificate To Be Delivered upon Exchange or Registration of Transfer of
Warrants
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INDEX OF DEFINED TERMS
Defined Term Section
------------ -------
Act Recitals
Additional Shares of Common Stock 5.01(f)
Agreement Recitals
Business Day 2.01
Common Stock Recitals
Company Recitals
Convertible Securities 5.01(e)
Current Market Value 5.01(c)
Definitive Warrants 1.02
Distribution 5.01(f)
Effective Date Recitals
Election to Exercise 2.02(b)
Excluded Shares 5.01(e)
Exercisability Date 2.02(a)
Exercise Date 2.02(d)
Exercise Price 2.02(a)
Expiration Date 2.01
Fully Diluted Basis 5.01(g)
Global Warrants 1.02
Issuance Date 5.01(e)
Majority Holders 5.04
Market Value 5.01(c)
Nasdaq 5.01(c)
Officers' Certificate 1.08(f)(ii)
Options 5.01(e)
Registrar 1.07
Related Parties 6.02(e)
SEC 4.03
Shares 1.01
Shelf Registration Statement 4.03
Underwriter Recitals
Warrant Agent Recitals
Warrant Agent Office 1.10
Warrant Certificates Recitals
Warrant Exercise Office 2.02(b)
Warrant Register 1.07
Warrants Recitals
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WARRANT AGREEMENT
WARRANT AGREEMENT ("Agreement"), dated as of May 26, 2004 (the "Effective
Date") by Syntroleum Corporation, a Delaware corporation (together with any
successor thereto, the "Company"), and American Stock Transfer and Trust
Company, a New York corporation, as warrant agent (with any successor Warrant
Agent, the "Warrant Agent").
WHEREAS, the Company has entered into an underwriting agreement dated May
21, 2004 with ▇▇▇▇▇▇▇▇▇ & Company, Inc. (the "Underwriter") in which the Company
has agreed, among other things, to sell to the Underwriter in an initial public
offering under the Securities Act of 1933, as amended (the "Act"), units
consisting in the aggregate of (i) 5,916,000 shares of common stock, par value
$.01 per share, of the Company ("Common Stock") and (ii) 887,400 Warrants to
purchase an aggregate of 887,400 shares of Common Stock of the Company (the
"Warrants"), and the certificates evidencing the Warrants being hereinafter
referred to as "Warrant Certificates"), in each case subject to adjustment in
accordance with the terms hereof; and
WHEREAS, the Warrants and the shares of Common Stock comprising part of the
units shall be separately transferable immediately; and
WHEREAS, the Company desires the Warrant Agent to assist the Company as
warrant agent in connection with the issuance, exchange, cancellation,
replacement and exercise of the Warrants, and in this Agreement wishes to set
forth, among other things, the terms and conditions on which the Warrants may be
issued, exchanged, canceled, replaced and exercised;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
ISSUANCE, FORM, EXECUTION, DELIVERY AND
REGISTRATION OF WARRANT CERTIFICATES
Section 1.01 Issuance of Warrants. Each Warrant Certificate shall evidence
the number of Warrants specified therein, each Warrant evidenced thereby shall
represent the right, subject to the provisions contained herein and therein, to
purchase from the Company (and the Company shall issue and sell to such holder
of the Warrant) one fully paid and non-assessable share of the Company's Common
Stock (the shares of Common Stock purchasable upon exercise of a Warrant, as
adjusted from time to time, being hereinafter referred to as the "Shares" and,
where appropriate, such term shall also mean the other securities or property
purchasable and deliverable upon exercise of a Warrant as provided in Article V)
at the price specified herein and therein, in each case subject to adjustment as
provided herein and therein.
Section 1.02 Form of Warrant Certificates. Warrant Certificates shall be
issued initially in the form of one or more permanent Global Warrants (the
"Global Warrants"), substantially in the form of Exhibit A hereto (including
footnote 1 thereto). The Warrant Certificates evidencing the Global Warrants to
be delivered pursuant to this Agreement shall be substantially in the form set
forth in Exhibit A attached hereto. Such Global Warrants shall represent such of
the outstanding Warrants as shall be specified therein and each shall provide
that it shall represent the aggregate amount of outstanding Warrants from time
to time endorsed thereon and that the
aggregate amount of outstanding Warrants represented thereby may from time to
time be reduced or increased, as appropriate. Any endorsement of a Global
Warrant to reflect the amount of any increase or decrease in the amount of
outstanding Warrants represented thereby shall be made by the Warrant Agent and
Depositary (as identified below) in accordance with instructions given by the
holder thereof. The Depository Trust Company shall act as the Depositary with
respect to the Global Warrants until a successor shall be appointed by the
Company. Upon written request, a Warrant holder may receive from the Warrant
Agent definitive warrants ("Definitive Warrants") as set forth in Section 1.08
hereof. Definitive Warrants shall be substantially in the form set forth in
Exhibit A attached hereto.
Section 1.03 Execution of Warrant Certificates. The Warrant Certificates
shall be executed on behalf of the Company by its chief executive officer, its
president or any vice president and attested by its secretary or an assistant
secretary. Such signatures may be the manual or facsimile signatures of the
present or any future such officers. Typographical and other minor errors or
defects in any such reproduction of the signature shall not affect the validity
or enforceability of any Warrant Certificate that has been duly countersigned
and delivered by the Warrant Agent.
In case any officer of the Company who shall have signed any of the Warrant
Certificates shall cease to be such officer before the Warrant Certificate so
signed shall be countersigned and delivered by the Warrant Agent or disposed of
by the Company, such Warrant Certificate nevertheless may be countersigned and
delivered or disposed of as though the person who signed such Warrant
Certificate had not ceased to be such officer of the Company; and any Warrant
Certificate may be signed on behalf of the Company by such persons as, at the
actual date of the execution of such Warrant Certificate, shall be the proper
officers of the Company, although at the date of the execution and delivery of
this Agreement any such person was not such an officer.
Section 1.04 Authentication and Delivery. Subject to the immediately
following paragraph, Warrant Certificates shall be authenticated by manual or
facsimile signature and dated the date of authentication by the Warrant Agent
and shall not be valid for any purpose unless so authenticated and dated. The
Warrant Certificates shall be numbered and shall be registered in the Warrant
Register (as defined in Section 1.07 hereof).
Upon the receipt by the Warrant Agent of a written order of the Company,
which order shall be signed by its chief executive officer, its president or any
vice president and attested by its secretary or an assistant secretary, and
shall specify the amount of Warrants to be authenticated, whether the Warrants
are to be Global Warrants or Definitive Warrants, the date of such Warrants and
such other information as the Warrant Agent may reasonably request, without any
further action by the Company, the Warrant Agent is authorized, upon receipt
from the Company at any time and from time to time of the Warrant Certificates,
duly executed as provided in Section 1.03 hereof, to authenticate the Warrant
Certificates and deliver them. Such authentication shall be by a duly authorized
signatory of the Warrant Agent (although it shall not be necessary for the same
signatory to sign all Warrant Certificates).
In case any authorized signatory of the Warrant Agent who shall have
authenticated any of the Warrant Certificates shall cease to be such authorized
signatory before the Warrant Certificate shall be disposed of by the Company,
such Warrant Certificate nevertheless may be
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delivered or disposed of as though the person who authenticated such Warrant
Certificate had not ceased to be such authorized signatory of the Warrant Agent;
and any Warrant Certificate may be authenticated on behalf of the Warrant Agent
by such persons as, at the actual time of authentication of such Warrant
Certificates, shall be the duly authorized signatories of the Warrant Agent,
although at the time of the execution and delivery of this Agreement any such
person is not such an authorized signatory.
The Warrant Agent's authentication on all Warrant Certificates shall be in
substantially the form set forth in Exhibit A hereto.
Section 1.05 Temporary Warrant Certificates. Pending the preparation of
definitive Warrant Certificates, the Company may execute, and, upon receipt of
an authentication order in accordance with Section 1.04 hereof, the Warrant
Agent shall authenticate and deliver, temporary Warrant Certificates, which are
printed, lithographed, typewritten or otherwise produced, substantially of the
tenor of the definitive Warrant Certificates in lieu of which they are issued
and with such appropriate insertions, omissions, substitutions and other
variations as the officers executing such Warrant Certificates may determine, as
evidenced by their execution of such Warrant Certificates.
If temporary Warrant Certificates are issued, the Company will cause
definitive Warrant Certificates to be prepared without unreasonable delay. After
the preparation of definitive Warrant Certificates, the temporary Warrant
Certificates shall be exchangeable for definitive Warrant Certificates upon
surrender of the temporary Warrant Certificates at any office or agency
maintained by the Company for that purpose pursuant to Section 1.10 hereof.
Subject to the provisions of Section 4.01 hereof, such exchange shall be without
charge to the holder. Upon surrender for cancellation of any one or more
temporary Warrant Certificates, the Company shall execute, and, upon receipt of
an authentication order in accordance with Section 1.04 hereof, the Warrant
Agent shall authenticate and deliver in exchange therefor, one or more
definitive Warrant Certificates representing in the aggregate a like number of
Warrants. Until so exchanged, the holder of a temporary Warrant Certificate
shall in all respects be entitled to the same benefits under this Agreement as a
holder of a definitive Warrant Certificate.
Section 1.06 Separation of Warrants and Shares. The Shares and Warrants
will be separately transferable immediately.
Section 1.07 Registration. The Company will keep, at the office or agency
maintained by the Company for such purpose, a register or registers in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of, and registration of transfer and exchange of,
Warrants as provided in this Article. Each person designated by the Company from
time to time as a person authorized to register the transfer and exchange of the
Warrants is hereinafter called, individually and collectively, the "Registrar."
The Company hereby initially appoints the Warrant Agent as Registrar. Upon
written notice to the Warrant Agent and any acting Registrar, the Company, in
its sole discretion, may appoint a successor Registrar for such purposes.
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Section 1.08 Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Definitive Warrants. When Definitive
Warrants are presented to the Warrant Agent with a request:
(i) to register the transfer of the Definitive Warrants; or
(ii) to exchange such Definitive Warrants for an equal number
of Definitive Warrants,
the Warrant Agent shall register the transfer or make the exchange as requested
if the requirements under this Warrant Agreement as set forth in this Section
1.08 hereof for such transactions are met; provided, however, that the
Definitive Warrants presented or surrendered for registration of transfer or
exchange shall be duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Company and the Warrant Agent, duly
executed by the holder thereof or by his attorney, duly authorized in writing.
(b) Restrictions on Transfer of a Definitive Warrant for a Beneficial
Interest in a Global Warrant. A Definitive Warrant may not be transferred for a
beneficial interest in a Global Warrant except upon satisfaction of the
requirements set forth below. Upon receipt by the Warrant Agent of a Definitive
Warrant, duly endorsed or accompanied by appropriate instruments of transfer, in
form satisfactory to the Warrant Agent, together with written instructions
directing the Warrant Agent to make, or to direct the Depositary to make, an
endorsement on the Global Warrant to reflect an increase in the aggregate amount
of the Warrants represented by the Global Warrant, then the Warrant Agent shall
cancel such Definitive Warrant and cause, or direct the Depositary to cause, in
accordance with the standing instructions and procedures existing between the
Depositary and the Warrant Agent, the number of Warrants represented by the
Global Warrant to be increased accordingly. If no Global Warrant is then
outstanding, the Company shall issue and the Warrant Agent shall authenticate a
new Global Warrant in the appropriate amount.
(c) Transfer and Exchange of Global Warrants. The transfer and
exchange of Global Warrants or beneficial interests therein shall be effected
through the Depositary, in accordance with this Section 1.08 and the procedures
of the Depositary therefor.
(d) Transfer of a Beneficial Interest in a Global Warrant for a
Definitive Warrant.
(i) Any person having a beneficial interest in a Global
Warrant may upon request transfer such beneficial interest for a Definitive
Warrant. Upon receipt by the Warrant Agent of written instructions or such other
form of instructions as is customary for the Depositary from the Depositary or
its nominee on behalf of any person having a beneficial interest in a Global
Warrant and upon receipt by the Warrant Agent of a written order or such other
form of instructions as is customary for the Depositary or the person designated
by the Depositary as having such a beneficial interest containing registration
instructions then the Warrant Agent will cause, in accordance with the standing
instructions and procedures existing between the Depositary and the Warrant
Agent, the aggregate amount of the Global Warrant to be reduced and, following
such reduction, the Company will execute and, upon receipt of an
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authentication order in the form of an Officers' Certificate (as defined), the
Warrant Agent will authenticate and deliver to the transferee a Definitive
Warrant. If such beneficial interest is being transferred to the person
designated by the Depositary as being the beneficial owner, a certification from
such person to that effect (in substantially the form of Exhibit B hereto) may
be required.
(ii) Definitive Warrants issued in exchange for a beneficial
interest in a Global Warrant pursuant to this Section 1.08(d) shall be
registered in such names and in such authorized denominations as the Depositary,
pursuant to instructions from its direct or indirect participants or otherwise,
shall instruct the Warrant Agent in writing. The Warrant Agent shall deliver
such Definitive Warrants to the persons in whose names such Warrants are so
registered.
(e) Restrictions on Transfer and Exchange of Global Warrants.
Notwithstanding any other provisions of this Warrant Agreement (other than the
provisions set forth in subsection (h) of this Section 1.08), a Global Warrant
may not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(f) Authentication of Definitive Warrants in Absence of Depositary.
If at any time:
(i) the Depositary for the Warrants notifies the Company that
the Depositary is unwilling or unable to continue as Depositary for the Global
Warrant and a successor Depositary for the Global Warrant is not appointed by
the Company within 90 days after delivery of such notice; or
(ii) the Company, at its sole discretion, notifies the Warrant
Agent in writing that it elects to cause the issuance of Definitive Warrants
under this Warrant Agreement,
then the Company will execute, and the Warrant Agent, upon receipt of an
officers' certificate signed by two officers of the Company (one of whom must be
the principal executive officer, principal financial officer or principal
accounting officer) (an "Officers' Certificate") requesting the authentication
and delivery of Definitive Warrants, will authenticate and deliver Definitive
Warrants, in an aggregate number equal to the aggregate number of warrants
represented by the Global Warrant, in exchange for such Global Warrant.
(g) Cancellation and/or Adjustment of a Global Warrant. At such time
as all beneficial interests in a Global Warrant have either been exchanged for
Definitive Warrants, redeemed, repurchased or canceled, such Global Warrant
shall be returned to or retained and cancelled by the Warrant Agent. At any time
prior to such cancellation, if any beneficial interest in a Global Warrant is
exchanged for Definitive Warrants, redeemed, repurchased or cancelled, the
number of Warrants represented by such Global Warrant shall be reduced and an
endorsement shall be made on such Global Warrant, by the Warrant Agent to
reflect such reduction.
(h) Obligations with Respect to Transfers and Exchanges of Definitive
Warrants.
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(i) To permit registrations of transfers and exchanges, the
Company shall execute, at the Warrant Agent's request, Definitive Warrants and
Global Warrants. Furthermore, the Warrant Agent shall, upon receipt of an
authentication order in accordance with Section 1.04 hereof, authenticate
Definitive Warrants and Global Warrants.
(ii) All Definitive Warrants and Global Warrants issued upon
any registration, transfer or exchange of Definitive Warrants or Global Warrants
shall be the valid obligations of the Company, entitled to the same benefits
under this Warrant Agreement as the Definitive Warrants or Global Warrants
surrendered upon the registration of transfer or exchange.
(iii) Prior to due presentment for registration of transfer of
any Warrant, the Warrant Agent and the Company may deem and treat the person in
whose name any Warrant is registered as the absolute owner of such Warrant, and
neither the Warrant Agent nor the Company shall be affected by notice to the
contrary.
(i) Payment of Taxes. The Company will pay all documentary stamp
taxes attributable to the initial issuance of the Shares upon the exercise of
Warrants; provided, however, that the Company shall not be required to pay any
tax or taxes which may be payable in respect of any transfer involved in the
issue of any Warrant Certificates or any certificates for the Shares in a name
other than that of the registered holder of a Warrant Certificate surrendered
upon the exercise of a Warrant, and the Company shall not be required to issue
or deliver such Warrant Certificates unless or until the person or persons
requesting the issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the Company that such
tax has been paid.
Section 1.09 Lost, Stolen, Destroyed, Defaced or Mutilated Warrant
Certificates. Upon receipt by the Company and the Warrant Agent (or any agent of
the Company or the Warrant Agent, if requested by the Company) of evidence
satisfactory to them of the loss, theft, destruction, defacement, or mutilation
of any Warrant Certificate and of indemnity reasonably satisfactory to them and,
in the case of mutilation or defacement, upon surrender thereof to the Warrant
Agent for cancellation, then, in the absence of notice to the Company or the
Warrant Agent that such Warrant Certificate has been acquired by a bona fide
purchaser or holder in due course, the Company shall execute, and, upon receipt
of an authentication order in accordance with Section 1.04 hereof, an authorized
signatory of the Warrant Agent shall manually authenticate and deliver, in
exchange for or in lieu of the lost, stolen, destroyed, defaced or mutilated
Warrant Certificate, a new Warrant Certificate representing a like number of
Warrants, bearing a number or other distinguishing symbol not contemporaneously
outstanding. Upon the issuance of any new Warrant Certificate under this
Section, the Company may require the payment from the holder of such Warrant
Certificate of a sum sufficient to cover any tax, stamp tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Warrant Agent and the
Registrar) in connection therewith. Every substitute Warrant Certificate
executed and delivered pursuant to this Section in lieu of any lost, stolen or
destroyed Warrant Certificate shall constitute an additional contractual
obligation of the Company, whether or not the lost, stolen or destroyed Warrant
Certificate shall be at any time enforceable by anyone, and shall be entitled to
the benefits of (but shall be subject to all the limitations of rights set forth
in) this Agreement equally and proportionately with any
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and all other Warrant Certificates duly executed and delivered hereunder. The
provisions of this Section 1.09 are exclusive with respect to the replacement of
lost, stolen, destroyed, defaced or mutilated Warrant Certificates and shall
preclude (to the extent lawful) any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to the contrary
with respect to the replacement of lost, stolen, destroyed, defaced or mutilated
Warrant Certificates.
The Warrant Agent is hereby authorized to authenticate in accordance with
the provisions of this Agreement, and deliver the new Warrant Certificates
required pursuant to the provisions of this Section.
Section 1.10 Offices for Exercise, etc. So long as any of the Warrants
remain outstanding, the Company will designate and maintain in New York City,
New York: (a) an office or agency where the Warrant Certificates may be
presented for exercise, (b) an office or agency where the Warrant Certificates
may be presented for registration of transfer and for exchange (including the
exchange of temporary Warrant Certificates for definitive Warrant Certificates
pursuant to Section 1.05 hereof), and (c) an office or agency where notices and
demands to or upon the Company in respect of the Warrants or of this Agreement
may be served. The Company may from time to time change or rescind such
designation, as it may deem desirable or expedient; provided, however, that an
office or agency shall at all times be maintained in New York City, New York, as
provided in the first sentence of this Section. In addition to such office or
offices or agency or agencies, the Company may from time to time designate and
maintain one or more additional offices or agencies within or outside of New
York, where Warrant Certificates may be presented for exercise or for
registration of transfer or for exchange, and the Company may from time to time
change or rescind such designation, as it may deem desirable or expedient. The
Company will give to the Warrant Agent written notice of the location of any
such office or agency and of any change of location thereof. The Company hereby
designates the Warrant Agent's office at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇ in the Borough of
Manhattan, City of New York (the "Warrant Agent Office"), as the initial agency
maintained for each such purpose.
ARTICLE II
DURATION, EXERCISE OF WARRANTS AND EXERCISE PRICE
Section 2.01 Duration of Warrants. Subject to the terms and conditions
established herein, the Warrants shall expire at 5:00 p.m., New York City, New
York time, on May 26, 2008 (the "Expiration Date"). Each Warrant may be
exercised on any Business Day (as defined below) on or after the Exercisability
Date (as defined below) and on or prior to the Expiration Date.
Any Warrant not exercised on or prior to the Expiration Date relating to
such Warrant shall become void, and all rights of the holder under the Warrant
Certificate evidencing such Warrant and under this Agreement shall cease.
"Business Day" shall mean any day on which (i) banks in New York City, New
York are open for business, (ii) the principal national securities exchange or
market on which the Common Stock is listed or admitted to trading is open for
business and (iii) the principal national
7
securities exchange or market, if any, on which the Warrants are listed or
admitted to trading are open for business.
Section 2.02 Exercise, Exercise Price, Settlement and Delivery.
(a) Subject to the provisions of this Agreement, a holder of each
Warrant shall have the right to purchase from the Company on or after the
Effective Date (the "Exercisability Date") and on or prior to the Expiration
Date one fully paid, registered and non-assessable Share, at the purchase price
of $7.60 for each share purchased upon the exercise of the Warrants (the
"Exercise Price"), in each case subject to adjustment in accordance with Article
V hereof,.
(b) Warrants may be exercised on or after the Exercisability Date by
(i) surrendering at any office or agency maintained for that purpose by the
Company pursuant to Section 1.10 (each a "Warrant Exercise Office") the Warrant
Certificate evidencing such Warrants with the form of election to purchase
Shares set forth on the reverse side of the Warrant Certificate (the "Election
to Exercise") duly completed and signed by the registered holder or holders
thereof or by the duly appointed legal representative thereof or by a duly
authorized attorney, and (ii) paying in full the Exercise Price for each such
Warrant exercised and any other amounts required to be paid pursuant to Section
1.08(i) hereof. Each Warrant may be exercised only in whole.
(c) Simultaneously with the exercise of each Warrant, payment in full
of the Exercise Price shall be made in cash or by certified or official bank
check to be delivered to the office or agency where the Warrant Certificate is
being surrendered. No payment or adjustment shall be made on account of any
dividends on the Shares issued upon exercise of a Warrant.
(d) Upon such surrender of a Warrant Certificate and payment and
collection of the Exercise Price at any Warrant Exercise Office (other than any
Warrant Exercise Office that also is an office of the Warrant Agent), such
Warrant Certificate and payment shall be promptly delivered to the Warrant
Agent. The "Exercise Date" for a Warrant shall be the date when all of the items
referred to in the first sentence of paragraphs (b) and (c) of this Section 2.02
are received by the Warrant Agent at or prior to 2:00 p.m., New York City, New
York time, on a Business Day and the exercise of the Warrants will be effective
as of such Exercise Date. If any items referred to in the first sentence of
paragraphs (b) and (c) are received after 2:00 p.m., New York City, New York
time, on a Business Day, the exercise of the Warrants to which such item relates
will be effective on the next succeeding Business Day. Notwithstanding the
foregoing, in the case of an exercise of Warrants on the Expiration Date (as
defined in Section 2.01), if all of the items referred to in the first sentence
of paragraphs (b) and (c) are received by the Warrant Agent at or prior to 5:00
p.m., New York City, New York time, on such Expiration Date, the exercise of the
Warrants to which such items relate will be effective on the Expiration Date. If
all of the items referred to in the first sentence of paragraphs (b) and (c) are
received by the Warrant Agent after 5:00 p.m., New York City time, on such
Expiration Date, the exercise of the Warrants to which such items relate will
not be effective and shall be void.
(e) Upon the exercise of a Warrant in accordance with the terms
hereof, the receipt of a Warrant Certificate and payment of the Exercise Price,
the Warrant Agent shall: (i) cause an amount equal to the Exercise Price to be
paid to the Company by crediting the same to
8
the account designated by the Company in writing to the Warrant Agent for that
purpose; (ii) advise the Company immediately by telephone of the amount so
deposited to the Company's account and promptly confirm such telephonic advice
in writing and (iii) as soon as practicable, advise the Company in writing of
the number of Warrants (giving effect to Section 5.01(i) below) exercised in
accordance with the terms and conditions of this Agreement and the Warrant
Certificates, the instructions of each exercising holder of the Warrant
Certificates with respect to delivery of the Shares to which such holder is
entitled upon such exercise, and such other information as the Company shall
reasonably request.
(f) Subject to Section 5.02 hereof, as soon as practicable after the
exercise of any Warrant or Warrants in accordance with the terms hereof, the
Company shall issue or cause to be issued to or upon the written order of the
registered holder of the Warrant Certificate evidencing such exercised Warrant
or Warrants, a certificate or certificates evidencing the Shares to which such
holder is entitled, in fully registered form, registered in such name or names
as may be directed by such holder pursuant to the Election to Exercise, as set
forth on the reverse of the Warrant Certificate. The Warrant Agent shall have no
obligation to ascertain the number of Shares to be issued with respect to the
exercised Warrant or Warrants. Such certificate or certificates evidencing the
Shares shall be deemed to have been issued and any persons who are designated to
be named therein shall be deemed to have become the holder of record of such
Shares as of the close of business on the Exercise Date. After such exercise of
any Warrant or Warrants, the Company shall also issue or cause to be issued to
or upon the written order of the registered holder of such Warrant Certificate,
a new Warrant Certificate, countersigned by the Warrant Agent pursuant to the
Company's written instruction, evidencing the number of Warrants, if any,
remaining unexercised unless such Warrants shall have expired.
Section 2.03 Cancellation of Warrant Certificates. In the event the
Company shall purchase or otherwise acquire Warrants, the Warrant Certificates
evidencing such Warrants may thereupon be delivered to the Warrant Agent, and if
so delivered, shall be canceled by it and retired. The Warrant Agent shall
cancel all Warrant Certificates properly surrendered for exchange, substitution,
transfer or exercise. The Warrant Agent shall account promptly to the Company
with respect to Warrants exercised and concurrently pay to the Company all
monies received by the Warrant Agent for the purchase of Warrant Shares through
the exercise of such Warrants.
ARTICLE III
OTHER PROVISIONS RELATING TO
RIGHTS OF HOLDERS OF WARRANTS
Section 3.01 Enforcement of Rights.
(a) Notwithstanding any of the provisions of this Agreement, any
holder of any Warrant Certificate, without the consent of the Warrant Agent, the
holder of any Shares or the holder of any other Warrant Certificate, may, in and
for his own behalf, enforce, and may institute and maintain any suit, action or
proceeding against the Company suitable to enforce, his right to exercise the
Warrant or Warrants evidenced by his Warrant Certificate in the manner provided
in such Warrant Certificate and in this Agreement.
9
(b) Neither the Warrants nor any Warrant Certificate shall entitle
the holders thereof to any of the rights of a holder of Shares, including,
without limitation, the right to vote or to receive any dividends or other
payments or to consent or to receive notice as stockholders in respect of the
meetings of stockholders or for the election of directors of the Company or to
share in the assets of the Company in the event of the liquidation, dissolution
or winding up of the Company's affairs or any other matter, or any rights
whatsoever as stockholders of the Company.
ARTICLE IV
CERTAIN COVENANTS OF THE COMPANY
Section 4.01 Payment of Taxes.The Company will pay all documentary stamp
taxes attributable to the initial issuance of Warrants and of the Shares upon
the exercise of Warrants or to the separation of the Warrants and Shares;
provided, however, that the Company shall not be required to pay any tax or
other governmental charge which may be payable in respect of any transfer or
exchange of any Warrant Certificates or any certificates for Shares in a name
other than the registered holder of a Warrant Certificate surrendered upon the
exercise of a Warrant. In any such case, no transfer or exchange shall be made
unless or until the person or persons requesting issuance thereof shall have
paid to the Company the amount of such tax or other governmental charge or shall
have established to the satisfaction of the Company that such tax or other
governmental charge has been paid or an exemption is available therefrom.
Section 4.02 Issuance and Reservation of Shares.The Company shall take all
actions necessary to ensure that the shares of Common Stock issuable upon
exercise of the Warrants shall be duly authorized and, when issued upon exercise
or exchange of any Warrant in accordance with the terms hereof, shall be validly
issued, fully paid and non-assessable, free and clear of all taxes, liens,
charges and security interests and free and clear of all preemptive or similar
rights. There has been reserved and the Company shall at all times keep reserved
so long as the Warrants remain outstanding, out of its authorized Common Stock,
such number of shares of Common Stock as shall be subject to purchase under the
Warrants. On or before taking any action that would cause an adjustment pursuant
to the terms of the Warrants resulting in an increase in the number of shares of
Common Stock deliverable upon such conversion or exercise above the number
thereof previously authorized, reserved and available therefore, the Company
shall take all such action so required for compliance with this Section.
Section 4.03 Registration of Securities.The Company agrees, for so long as
any Warrants continue to be outstanding, to use its best efforts to (i) maintain
the effectiveness of the Company's Registration Statement on Form S-3
(Registration No. 333-62290) (the "Shelf Registration Statement") and file any
and all post effective amendments to the Shelf Registration Statement necessary
to maintain such effectiveness, (ii) make all required filings under applicable
securities laws and regulations necessary to keep current the Shelf Registration
Statement, (iii) reserve capacity under the Shelf Registration Statement of a
sufficient number of shares of Common Stock to accommodate the exercise of all
outstanding Warrants, (iv) make all filings required under applicable federal
and state securities laws, as may be necessary to permit the issuance of
registered shares of Common Stock upon the exercise of the Warrants at any and
all times during the period the Warrants are exercisable and (v) take all
actions required to cause the exchange of Warrants for shares of Common Stock as
provided below in this Section 4.03 to
10
be exempt from the registration requirements of the Securities Act of 1933, as
amended, and state qualification requirements; provided, however, that the
Company shall not be obligated to file any general consent to service of process
or to qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not otherwise so
subject. If at any time the effectiveness of the Shelf Registration Statement
lapses or the Shelf Registration Statement is otherwise not available for the
issuance of shares of Common Stock upon the exercise of the Warrants, the
Company shall use its best efforts to prepare and file with the Securities and
Exchange Commission (the "SEC"), a registration statement and such other
documents as may be necessary and use its commercially reasonable efforts to
have such registration statement declared effective as promptly thereafter as
practical, in order to comply with the provisions of the Act so as to permit the
registered resale of the shares of Common Stock issuable upon exercise of the
Warrants. In the event that at the time a notice of exercise is delivered to the
Warrant Agent either (i) a registration statement covering issuance or resale of
the shares of Common Stock issuable upon exercise of the Warrants is not in
effect or (ii) the Shelf Registration Statement is not available or
qualifications under applicable state securities laws are not in effect for the
issuance of shares of Common Stock upon the exercise of the Warrants and such
purchase and the resale of Warrant Shares by the Warrantholders are not exempt
from the registration requirements of the Securities Act of 1933, as amended,
and such state qualification requirements, then, the Company shall, if requested
by the Warrantholder giving the notice of exercise, exchange the Warrants being
exercised for a number of shares of Common Stock equal to the whole number
nearest to (a) the number of shares of Common Stock issuable upon exercises of
such Warrants minus (b) the number of shares of Common Stock equal to the
quotient obtained by dividing (i) the product obtained by multiplying (A) the
Exercise Price by (B) the number of shares of Common Stock issuable upon
exercises of such Warrants by (ii) the Current Market Value. In the event that
the Shelf Registration Statement or another registration statement is not
effective and available or qualifications under applicable state securities laws
are not in effect for the issuance of shares of Common Stock upon the exercise
of the Warrants, a holder of a Warrant would not be permitted under applicable
securities laws to purchase shares of Common Stock upon exercise of the Warrants
unless such purchase or exchange is exempt from the registration requirements of
the Securities Act of 1933, as amended, and such state qualification
requirements, provided that the holders would be allowed to exchange Warrants
for shares of Common Stock as provided in Section 4.03.
ARTICLE V
ADJUSTMENTS
Section 5.01 Adjustment of Exercise Price and Number of Shares Issuable.
The number and kind of Shares purchasable upon the exercise of Warrants and the
Exercise Price shall be subject to adjustment from time to time upon the
happening of certain events, as follows:
(a) Stock Splits, Combinations, etc. In case the Company after the
date hereof shall (A) make or pay a dividend or make a distribution in shares of
Common Stock on its Common Stock, (B) subdivide its outstanding shares of Common
Stock into a greater number of shares or (C) combine or reclassify its
outstanding shares of Common Stock into a smaller number of shares, the number
of Shares purchasable upon exercise of the Warrants immediately prior to such
action shall be adjusted so that the holder of any Warrant upon exercise of the
11
Warrants shall be entitled to receive the number of shares of Common Stock which
such holder would have owned or would have been entitled to receive immediately
following such action had the Warrants been exercised immediately prior thereto.
An adjustment made pursuant to this paragraph shall become effective on the day
immediately after the record date, except as provided in Section 5.03 below, in
the case of a dividend or distribution and shall become effective on the day
immediately after the effective date in the case of a subdivision or combination
or reclassification. Whenever the number of Shares purchasable upon the exercise
of a Warrant is adjusted as provided in this paragraph (a), the Exercise Price
shall be adjusted by multiplying such Exercise Price immediately prior to such
adjustment by a fraction, of which the numerator shall be the number of Shares
purchasable upon the exercise of the Warrants immediately prior to such
adjustment, and of which the denominator shall be the number of Shares so
purchasable immediately thereafter.
(b) In case the Company or any subsidiary of the Company after the
date hereof shall distribute to all holders of Common Stock any of its assets,
evidences of indebtedness, cash or securities (excluding any distributions
referred to in paragraph (a) and any dividend or distribution paid in cash out
of earned surplus of the Company) then in each such case the Exercise Price
shall be adjusted so that the same shall equal the price determined by
multiplying the Exercise Price in effect immediately prior to the record date of
such distribution by a fraction of which the numerator shall be the then Current
Market Value per share of the Common Stock (determined as provided in paragraph
(c) below) on the record date mentioned below less the then fair market value
(as reasonably determined in good faith by the Board of Directors of the
Company) of the portion of the assets, evidences of indebtedness, cash or
securities so distributed applicable to one share of Common Stock, and of which
the denominator shall be such Current Market Value per share of the Common
Stock. Such adjustment shall, except as provided in Section 5.03, become
effective on the day immediately after the record date for the determination of
stockholders entitled to receive such distribution.
(c) For the purposes of this Warrant Agreement, the Current Market
Value per share of Common Stock on any date shall be deemed to be the average of
the Market Value of the Common Stock for the 10 trading days before, and ending
not later than, the earlier of the date in question and the date before the
"`ex' date", with respect to the issuance or distribution requiring such
computation. For purposes of this paragraph (c), the term "`ex' date," when used
with respect to any issuance or distribution, means the first date on which the
Common Stock trades regular way on the Nasdaq Stock Market ("Nasdaq") (or, if
not listed or admitted to trading thereon, then on the principal national
securities exchange or automated quotation system on which the Common Stock is
listed or admitted to trading and if not listed or admitted to trading on any
national securities exchange or automated quotation system, as determined in
good faith by the Company's Board of Directors) without the right to receive
such issuance or distribution. "Market Value" on any trading day shall mean (i)
in the case of a security traded on the over-the-counter market and not on
Nasdaq nor on any national securities exchange, the per share last sale price of
the Common Stock on such trading day as reported by Nasdaq or an equivalent
generally accepted reporting service; (ii) in the case of a security traded on
Nasdaq or on a national securities exchange, the per share last sale price of
the Common Stock on such trading day on Nasdaq or on the principal stock
exchange on which it is listed, as the case may be or (iii) if neither clause
(i) or (ii) above is applicable, then the fair value thereof as determined in
good faith by the Company's Board of Directors. For purposes of clause (i)
above, if trading
12
in the Common Stock is not reported by Nasdaq, the bid price referred to in said
clause shall be the lowest bid price as reported in the "pink sheets" published
by National Quotation Bureau, Incorporated. The last sale price referred to in
clause (ii) above shall be the last reported sale price or, in case no such
reported sale takes place on such day, the average of the reported closing bid
and asked prices, in either case on Nasdaq or on the national securities
exchange on which the Common Stock is then listed.
(d) Reclassification, Combinations, Mergers, etc. In case of any
reclassification or change of outstanding shares of Common Stock (other than as
set forth in Section 5.01(a) above and other than a change in par value, or from
par value to no par value, or from no par value to par value, or in case of any
consolidation or merger of the Company with or into another corporation (other
than a merger in which the Company is the continuing corporation and which does
not result in any reclassification or change of the then outstanding shares of
Common Stock (other than a change in par value, or from par value to no par
value, or from no par value to par value or as a result of a subdivision or
combination)) or in case of any sale or conveyance to another corporation of all
or substantially all of the assets of the Company (computed on a consolidated
basis), then, as a condition of such reclassification, change, consolidation,
merger, sale or conveyance, the Company or such a successor or purchasing
corporation, as the case may be, shall forthwith make lawful and adequate
provision whereby the holder of such Warrant then outstanding shall have the
right thereafter to receive on exercise of such Warrant the kind and amount of
shares of stock and other securities and property receivable upon such
reclassification, change, consolidation, merger, sale or conveyance by a holder
of the number of shares of Common Stock issuable upon exercise of such Warrant
immediately prior to such reclassification, change, consolidation, merger, sale
or conveyance and enter into a supplemental warrant agreement so providing. Such
provisions shall include provision for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article
V. If the issuer of securities deliverable upon exercise of Warrants under the
supplemental warrant agreement is an affiliate of the surviving or transferee
corporation, that issuer shall join in the supplemental warrant agreement. The
above provisions of this paragraph (d) shall similarly apply to successive
reclassifications and changes of shares of Common Stock and to successive
consolidations, mergers, sales or conveyances.
In case of any such reclassification, merger, consolidation or disposition
of assets, the successor or acquiring corporation (if other than the Company)
shall expressly assume the due and punctual observance and performance of each
and every covenant and condition of this Warrant Agreement to be performed and
observed by the Company and all the obligations and liabilities hereunder,
subject to such modifications as may be deemed appropriate (as determined by
resolution of the Board of Directors of the Company) in order to provide for
adjustments of shares of the Common Stock for which this Warrant is exercisable
which shall be as nearly equivalent as practicable to the adjustments provided
for in this Article V. The foregoing provisions of this Section 5.01(d) shall
similarly apply to successive reorganizations, reclassifications, mergers,
consolidations or disposition of assets.
If, as a result of an adjustment made pursuant to this paragraph, the
holder of any Warrant thereafter exercised shall become entitled to receive
shares of two or more classes of capital stock of the Company, the Board of
Directors of the Company (whose determination shall be
13
conclusive) shall determine the allocation of the adjusted Exercise Price
between or among shares of such classes of capital stock.
(e) Issuance of Common Stock, Options or Convertible Securities. For
the purposes of this Warrant Agreement, "Additional Shares of Common Stock"
shall mean all shares of Common Stock issued or deemed to be issued by the
Company after the Effective Date, other than Excluded Shares (as defined below).
In the event the Company shall, at any time or from time to time after the
Effective Date, issue, sell, distribute or otherwise grant in any manner
(including by assumption) shares of Common Stock or any rights to subscribe for
or to purchase, or any warrants or options for the purchase of, Common Stock or
any stock or securities convertible into or exchangeable for Common Stock (any
such rights, warrants or options being herein called "Options" and any such
convertible or exchangeable stock or securities being herein called "Convertible
Securities") or any Convertible Securities (other than upon exercise of any
Option), whether or not such Options or the rights to convert or exchange such
Convertible Securities are immediately exercisable, then the maximum number of
shares of Common Stock (as set forth in the instrument relating thereto without
regard to any provision contained therein for a subsequent adjustment of such
number) issuable upon the exercise and/or conversion of such Options or
Convertible Securities, shall be deemed to be Additional Shares of Common Stock.
For purposes of this Warrant Agreement, the term "Issuance Date" shall mean
(i) with respect to Additional Shares of Common Stock deemed to have been issued
in connection with the issuance of an Option or Convertible Security, the date
such Option or Convertible Security is issued and (ii) in all other cases, the
actual date Additional Shares of Common Stock are issued.
For the purposes of this Warrant Agreement, "Excluded Shares" shall mean:
(i) shares for which the consideration per share as determined pursuant to
paragraph (f) below would be equal to or more than the Current Market Value
determined on the day prior to the Issuance Date; (ii) shares for which the
consideration per share as determined pursuant to (f) below is equal to or
greater than the initial Exercise Price (appropriately adjusted to reflect stock
splits or combinations, stock dividends, reorganizations, consolidations and
similar changes); (iii) shares of Common Stock issuable upon the exercise of
Options or conversion or payment of Convertible Securities existing as of the
Effective Date; (iv) shares of Common Stock (appropriately adjusted to reflect
stock splits or combinations, stock dividends, reorganizations, consolidations
and similar changes) issued pursuant to (A) any stock incentive plan existing as
of the Effective Date or (B) any amendment thereto or any additional stock
incentive plan adopted by the stockholders of the Company after the Effective
Date; and (v) shares issued pursuant to the adjustment provisions of this
Section 5.01. The issuance of Excluded Shares shall not be an issuance of
Additional Shares of Common Stock, and shall not give rise to an adjustment or a
right to purchase the securities pursuant to paragraph (f) below.
In any such case in which the Additional Shares of Common Stock are deemed
to be issued, no right to receive an adjustment or to purchase securities under
Section 5.01(f) below will accrue upon the subsequent issue of shares of Common
Stock upon the exercise and/or conversion or exchange of such Option or
14
Convertible Security unless such Option or Convertible Security shall have been
amended or modified prior to exercise or conversion or exchange so as to
increase the number of Additional Shares of Common Stock deemed to have been
issued thereunder or decrease the exercise and/or conversion or exchange price
payable thereunder to an amount less than Current Market Value as of the
Issuance Date thereof.
(f) If the price per share at which Common Stock is issued after the
Effective Date or Common Stock is issuable upon the exercise of Options or upon
the conversion or exchange of Convertible Securities issued after the Effective
Date, in either case other than Excluded Shares (determined by dividing (i) the
aggregate amount, if any, received or receivable by the Company as consideration
for the issuance, sale, distribution or granting of such Common Stock or Options
or any such Convertible Security, plus the minimum aggregate amount of
additional consideration, if any, payable to the Company upon the issuance of
Common Stock or the exercise of all such Options or upon conversion or exchange
of all such Convertible Securities, plus, in the case of Options to acquire
Convertible Securities, the minimum aggregate amount of additional
consideration, if any, payable upon the conversion or exchange of all such
Convertible Securities, by (ii) the total maximum number of shares of Common
Stock to be issued, sold, distributed or granted or issuable upon the exercise
of all such Options or upon the conversion or exchange of all such Convertible
Securities or upon the conversion or exchange of all Convertible Securities
issuable upon the exercise of all Options (as set forth in the instrument
relating thereto without regard to any provision contained therein for a
subsequent adjustment of such number)) shall be less than the Current Market
Value per share of Common Stock (determined pursuant to Section 5.01(c)) on the
Issuance Date of such Common Stock, Options or Convertible Securities then,
unless the Company offers to sell to each holder of Warrants, at the same price
and on the same terms offered to all other prospective buyers (provided that the
holders of Warrants shall not be required to buy any securities or other assets
in order to buy such Common Stock, Options or Convertible Securities, except in
the context of an offering of units of packaged securities), a number of shares
of Common Stock, Options or Convertible Securities that is equal to the product
of such holder's portion of the Common Stock then outstanding if immediately
prior thereto all the Warrants held by such holder had been exercised,
multiplied by the number of shares of Common Stock, Options or Convertible
Securities so issued, sold, distributed or granted:
(i) The Exercise Price shall be reduced to an amount equal to
the product obtained by multiplying (A) the Exercise Price in effect immediately
prior to such issuance or sale times (B) a fraction, (I) the numerator of which
shall be the sum of (x) the product of (1) the number of shares of Common Stock
outstanding (on a Fully Diluted Basis) immediately prior to such issuance or
sale times (2) the Current Market Value per share as of the date of such
issuance or sale plus (y) the consideration, if any, received or receivable by
the Company upon such issuance, sale, exercise, conversion or exchange
calculated in accordance with the procedures set forth above pursuant to this
paragraph (f), and (II) the denominator of which shall be the product of (x) the
number of shares of Common Stock outstanding (on a Fully Diluted Basis)
immediately after such issuance or sale times (y) such Current Market Value per
share; and
(ii) The number of Shares issuable upon exercise of such
Warrant shall be increased to the number of shares determined by multiplying (A)
the number of Shares issuable upon exercise of such Warrant immediately prior to
such issuance or sale by (B) a
15
fraction, (1) the numerator of which shall be the Exercise Price in effect
immediately prior to the adjustment in clause (i) of this paragraph (f), and (2)
the denominator of which shall be the Exercise Price in effect immediately after
such adjustment.
"Fully Diluted Basis" means, with respect to the Common Stock at any time
of determination, the number of shares of Common Stock that would be issued and
outstanding at such time, assuming full conversion, exercise and exchange of all
issued and outstanding Convertible Securities and Options that shall be (or may
become) exchangeable for, or exercisable or convertible into, Common Stock,
including the Warrants.
Each holder of a Warrant may elect to buy all or any portion of the Common
Stock, Options or Convertible Securities offered pursuant to this subsection (f)
or may decline to purchase any such securities.
Notwithstanding the provisions of this subsection (f), in no event will the
Exercise Price be decreased pursuant to any adjustment under this subsection (f)
to a price under $5.60 (appropriately adjusted to reflect stock splits or
combinations, stock dividends, reorganizations, consolidations and similar
changes), and in no event will the aggregate number of Shares issuable upon
exercise of the Warrants be increased pursuant to any adjustment under this
subsection (f) to a number over 1,204,328 (appropriately adjusted to reflect
stock splits or combinations, stock dividends, reorganizations, consolidations
and similar changes).
(g) Consideration Received. If any shares of Common Stock, Options or
Convertible Securities shall be issued, sold or distributed for a consideration
other than cash, the amount of the consideration other than cash received by the
Company in respect thereof shall be deemed to be the then fair market value of
such consideration (as determined in good faith by the Board of Directors of the
Company). If any Options shall be issued in connection with the issuance and
sale of other securities of the Company, together comprising one integral
transaction in which no specific consideration is allocated to such Options by
the parties thereto, such Options shall be deemed to have been issued without
consideration; provided, however, that if such Options have an exercise price
equal to or greater than the Current Market Value of the Common Stock on the
date of issuance of such Options, then such Options shall be deemed to have been
issued for consideration equal to such exercise price. For purposes of
determining the price per share of any Additional Shares of Common Stock, in the
event that shares of Common Stock, Options and Convertible Securities issued in
a single transaction or series of related transactions, the price per share
shall be determined on the basis of the aggregate consideration received and
shares issued or deemed to be issued in such transaction or series of related
transactions.
(h) Changes in Options and Convertible Securities. If the exercise
price provided for in any Options referred to in Section 5.01(f) above, the
additional consideration, if any, payable upon the conversion or exchange of any
Convertible Securities referred to in Section 5.01(f) above, or the rate at
which any Convertible Securities referred to in Section 5.01(f) above are
convertible into or exchangeable for Common Stock shall change at any time to a
price which is less than the Current Market Value thereof as of the Issuance
Date, then the adjustment provisions of Section 5.01(f) above would be
applicable.
(i) Statement of Warrants. Irrespective of any adjustment in the
number or kind of Shares issuable upon the exercise of the Warrants, Warrants
theretofore or thereafter
16
issued shall continue to express the same number and kind of shares as are
stated in the Warrants initially issuable pursuant to this Agreement.
(j) Expiration of Rights, Warrants or Options. Upon the expiration of
any Options or Convertible Securities, to the extent the Warrants shall not have
been exercised, the Exercise Price shall be adjusted to such amount as would
have been received by a Warrant holder had the adjustment in such Exercise Price
made upon the distribution of such Options or Convertible Securities been made
upon the basis of the distribution of only such number of Options or Convertible
Securities as were actually exercised or converted.
(k) No Nominal Adjustment. No adjustment in the number of Shares
purchasable pursuant to the Warrants or in the Exercise Price shall be required
unless such adjustment would require an increase or decrease of at least 1.0% of
the number of Shares then purchasable upon exercise of the Warrants or in the
Exercise Price; provided, however, that any adjustments which by reason of this
subsection (k) are not required to be made immediately shall be carried forward
and taken into account in any subsequent adjustment. All calculations under this
Section 5 shall be made to the nearest cent or to the nearest one-hundredth of a
share, as the case may be.
Section 5.02 Fractional Interest. The Company shall not be required to
issue fractional shares of Common Stock on the exercise of Warrants. If more
than one Warrant shall be presented for exercise in full at the same time by the
same holder, the number of full shares of Common Stock which shall be issuable
upon such exercise shall be computed on the basis of the aggregate number of
shares of Common Stock acquirable on exercise of the Warrants so presented. If
any fraction of a share of Common Stock would, except for the provisions of this
Section, be issuable on the exercise of any Warrant (or specified portion
thereof), the Company shall direct the transfer agent for the Common Stock to
pay an amount in cash calculated to equal the then Current Market Value per
share (determined pursuant to Section 5.01(c)) multiplied by such fraction
computed to the nearest whole cent. Holders of Warrants, by their acceptances of
the Warrant Certificates, expressly waive any and all rights to receive any
fraction of a share of Common Stock or a stock certificate representing a
fraction of a share of Common Stock.
Section 5.03 When Adjustment Not Required. If the Company shall take a
record of the holders of its Common Stock for the purpose of entitling them to
receive a dividend or distribution or subscription or purchase rights and shall,
thereafter and before the distribution to stockholders thereof, legally abandon
its plan to pay or deliver such dividend, distribution, subscription or purchase
rights, then thereafter no adjustment shall be required by reason of the taking
of such record and any such adjustment previously made in respect thereof shall
be rescinded and annulled.
Section 5.04 Challenge to Good Faith Determination. Whenever the Board of
Directors of the Company shall be required to make a determination in good faith
of the fair value of any item under this Article V, such determination may be
challenged in good faith by holders holding a majority of the outstanding
Warrants (the "Majority Holders"), and any dispute shall be resolved by an
investment banking firm of national standing selected by the Company. The fee of
such investment banking firm shall be paid by the Company, unless such fair
market value as determined by the investment banking firm is more than 95% of
the fair market value determined
17
by the Board of Directors of the Company, in which case the challenging holders
shall be jointly and severally liable for such fee.
Section 5.05 Treasury Stock. The sale or other disposition of any issued
shares of Common Stock owned or held by or for the account of the Company shall
be deemed an issuance thereof and a repurchase thereof and designation of such
shares as treasury stock shall be deemed to be a redemption thereof for the
purposes of this Agreement.
Section 5.06 Notices to Warrant Holders. In connection with any adjustment
pursuant to this Article V, the Company shall (i) promptly after such
adjustment, cause to be filed with the Warrant Agent a certificate of an officer
of the Company setting forth the number of shares (or portion thereof) issuable
after such adjustment, upon exercise of a Warrant and the Exercise Price after
such adjustment, which certificate shall be conclusive evidence of the
correctness of the matters set forth therein, and (ii) promptly after such
adjustment cause to be given to each of the registered holders of the Warrant
Certificates at his address appearing on the Warrant Register written notice of
such adjustments by first-class mail, postage prepaid. The Warrant Agent shall
be entitled to conclusively rely on the above-referenced officer's certificate
and shall be under no duty or responsibility with respect to any such
certificate, except to exhibit the same from time to time to any holder desiring
an inspection thereof during normal business hours upon reasonable notice. The
Warrant Agent shall not at any time be under any duty or responsibility to any
holder to determine whether any facts exist that may require any adjustment of
the number of Shares issuable on exercise of the Warrants or the Exercise Price,
or with respect to the nature or extent of any such adjustment when made, or
with respect to the method employed in making such adjustment or the validity or
value (or the kind or amount) of any Shares which may be issuable on exercise of
the Warrants. The Warrant Agent shall not be responsible for any failure of the
Company to make any cash payment or to issue, transfer or deliver any shares of
Common Stock or stock certificates or other common stock or property upon the
exercise of any Warrant.
The Company shall, in addition, promptly notify the holders of the Warrants
of any determination of its Board of Directors that any actions affecting its
Common Stock will not require an adjustment to the number of Shares for which a
Warrant is exercisable, and shall specify in such notice the reasons for such
determination. In the event that the Majority holders shall challenge any of the
calculations set forth in such notice within 20 days after the Company's
delivery thereof, the Company shall retain a firm of independent certified
public accountants or law firm of national standing selected by the Company to
prepare and execute a certificate verifying that no adjustment is required. The
Company shall promptly cause a signed copy of any certificate prepared pursuant
to this Section 5.06 to be delivered to each holder at his address appearing in
the Warrant Register. The Company shall keep at its office or agency designated
pursuant to Section 1.10 copies of all such certificates and cause the same to
be available for inspection at said office during normal business hours upon
reasonable notice by any holder or any prospective purchaser of a Warrant
designated by a holder thereof.
Section 5.07 Par Value of Shares of Common Stock. Before taking any action
which would cause an adjustment effectively reducing the portion of the Exercise
Price allocable to each Share below the then par value per share of the Common
Stock issuable upon exercise of the Warrants, the Company will take any
corporate action which may, in the opinion of its
18
counsel, be necessary in order that the Company may validly and legally issue
fully paid and nonassessable Common Stock upon exercise of the Warrants.
ARTICLE VI
CONCERNING THE WARRANT AGENT
Section 6.01 Warrant Agent. The Company hereby appoints American Stock
Transfer and Trust Company as warrant agent (and in all capacities in this
Agreement, the "Warrant Agent") of the Company in respect of the Warrants and
the Warrant Certificates upon the terms and subject to the conditions herein and
in the Warrant Certificates set forth; and American Stock Transfer and Trust
Company hereby accepts such appointment. The Warrant Agent shall have the powers
and authority specifically granted to and conferred upon it in the Warrant
Certificates and hereby and such further powers and authority to act on behalf
of the Company as the Company may hereafter grant to or confer upon it and it
shall accept in writing. All of the terms and provisions with respect to such
powers and authority contained in the Warrant Certificates are subject to and
governed by the terms and provisions hereof.
Section 6.02 Conditions of Warrant Agent's Obligations. The Warrant Agent
accepts its obligations herein set forth upon the terms and conditions hereof
and in the Warrant Certificates, including the following, to all of which the
Company agrees and to all of which the rights hereunder of the holders from time
to time of the Warrant Certificates shall be subject:
(a) The Warrant Agent shall be entitled to compensation to be agreed
upon with the Company in writing for all services rendered by it and the Company
agrees promptly to pay such compensation and to reimburse the Warrant Agent for
its reasonable out-of-pocket expenses (including reasonable fees and expenses of
counsel) incurred without gross negligence or willful misconduct on its part in
connection with the services rendered by it hereunder. The Company also agrees
to indemnify the Warrant Agent, each successor Warrant Agent, and their
respective directors, officers, affiliates, agents and employees for, and to
hold it and its directors, officers, affiliates, agents and employees harmless
against, any loss, liability or expense of any nature whatsoever (including,
without limitation, fees and expenses of counsel) incurred without gross
negligence or willful misconduct on the part of the Warrant Agent or successor
Warrant Agent, arising out of or in connection with its acting as such Warrant
Agent hereunder and its exercise or failure to exercise of its rights and
performance of its obligations hereunder. The obligations of the Company under
this Section 6.02 shall survive the exercise and the expiration of the Warrant
Certificates and the resignation and removal of the Warrant Agent.
(b) In acting under this Agreement and in connection with the Warrant
Certificates, the Warrant Agent is acting solely as agent of the Company and
does not assume any obligation or relationship of agency or trust for or with
any of the owners or holders of the Warrant Certificates.
(c) The Warrant Agent may consult with counsel and any advice or
written opinion of such counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in accordance with such advice or opinion.
19
(d) The Warrant Agent shall be fully protected and shall incur no
liability for or in respect of any action taken or omitted to be taken or thing
suffered by it in reliance upon any Warrant Certificate, notice, direction,
consent, certificate, affidavit, opinion of counsel, instruction, statement or
other paper or document reasonably believed by it, in the absence of bad faith,
to be genuine and to have been presented or signed by the proper parties.
(e) The Warrant Agent, and its officers, directors, affiliates and
employees ("Related Parties"), may become the owners of, or acquire any interest
in, Warrant Certificates, shares or other obligations of the Company with the
same rights that it or they would have it if were not the Warrant Agent
hereunder and, to the extent permitted by applicable law, it or they may engage
or be interested in any financial or other transaction with the Company and may
act on, or as depositary, trustee or agent for, any committee or body of holders
of shares or other obligations of the Company as freely as if it were not the
Warrant Agent hereunder. Nothing in this Agreement shall be deemed to prevent
the Warrant Agent or such Related Parties from acting in any other capacity for
the Company.
(f) The Warrant Agent shall not be under any liability for interest
on, and shall not be required to invest, any monies at any time received by it
pursuant to any of the provisions of this Agreement or of the Warrant
Certificates.
(g) The Warrant Agent shall not be under any responsibility in
respect of the validity of this Agreement (or any term or provision hereof) or
the execution and delivery hereof (except the due execution and delivery hereof
by the Warrant Agent) or in respect of the validity or execution of any Warrant
Certificate (except its authentication thereof).
(h) The recitals and other statements contained herein and in the
Warrant Certificates (except as to the Warrant Agent's authentication thereon)
shall be taken as the statements of the Company and the Warrant Agent assumes no
responsibility for the correctness of the same. The Warrant Agent does not make
any representation as to the validity or sufficiency of this Agreement or the
Warrant Certificates, except for its due execution and delivery of this
Agreement; provided, however, that the Warrant Agent shall not be relieved of
its duty to authenticate the Warrant Certificates as authorized by this
Agreement. The Warrant Agent shall not be accountable for the use or application
by the Company of the proceeds of the exercise of any Warrant.
(i) Before the Warrant Agent acts or refrains from acting with
respect to any matter contemplated by this Warrant Agreement, it may require:
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Warrant Agreement relating to the proposed action have been complied
with; and
(2) if reasonably necessary in the sole judgment of the Warrant
Agent, an opinion of counsel for the Company stating that, in the
opinion of such counsel, all such conditions precedent have been
complied with.
Each Officers' Certificate or, if requested, an opinion of counsel with
respect to compliance with a condition or covenant provided for in this Warrant
Agreement shall include:
20
(1) a statement that the person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such person, he or she
has made such examination or investigation as is necessary to enable
him or her to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
(j) The Warrant Agent shall be obligated to perform such duties as
are herein and in the Warrant Certificates specifically set forth and no implied
duties or obligations shall be read into this Agreement or the Warrant
Certificates against the Warrant Agent. The Warrant Agent shall not be
accountable or under any duty or responsibility for the use by the Company of
any of the Warrant Certificates authenticated by the Warrant Agent and delivered
by it to the Company pursuant to this Agreement. The Warrant Agent shall have no
duty or responsibility in case of any default by the Company in the performance
of its covenants or agreements contained in the Warrant Certificates or in the
case of the receipt of any written demand from a holder of a Warrant Certificate
with respect to such default, including, without limiting the generality of the
foregoing, any duty or responsibility to initiate or attempt to initiate any
proceedings at law or otherwise or, except as provided in Section 7.02 hereof,
to make any demand upon the Company. The Warrant Agent shall not be obligated to
perform any duty to the extent prohibited by law.
(k) Unless otherwise specifically provided herein, any order,
certificate, notice, request, direction or other communication from the Company
made or given under any provision of this Agreement shall be sufficient if
signed by its chief executive officer, its president, its treasurer, its
controller or any vice president or its secretary or any assistant secretary.
(l) The Warrant Agent shall have no responsibility in respect of any
adjustment pursuant to Article V hereof.
(m) The Company agrees that it will perform, execute, acknowledge and
deliver, or cause to be performed, executed, acknowledged and delivered, all
such further and other acts, instruments and assurances as may reasonably be
required by the Warrant Agent for the carrying out or performing by the Warrant
Agent of the provisions of this Agreement.
(n) The Warrant Agent is hereby authorized and directed to accept
written instructions with respect to the performance of its duties hereunder
from any one of the chief executive officer, the president, the treasurer, the
controller, any vice president or the secretary of the Company or any other
officer or official of the Company reasonably believed to be authorized to give
such instructions and to apply to such officers or officials for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or
21
suffered to be taken by it in good faith in accordance with instructions with
respect to any matter arising in connection with the Warrant Agent's duties and
obligations arising under this Agreement. Such application by the Warrant Agent
for written instructions from the Company may, at the option of the Warrant
Agent, set forth in writing any action proposed to be taken or omitted by the
Warrant Agent with respect to its duties or obligations under this Agreement and
the date on or after which such action shall be taken and the Warrant Agent
shall not be liable for any action taken or omitted in accordance with a
proposal included in any such application on or after the date specified therein
(which date shall be not less than 10 Business Days after the Company receives
such application unless the Company consents to a shorter period), provided that
(i) such application includes a statement to the effect that it is being made
pursuant to this paragraph (n) and that unless objected to prior to such date
specified in the application, the Warrant Agent will not be liable for any such
action or omission to the extent set forth in such application and (ii) prior to
taking or omitting any such action, the Warrant Agent has not received written
instructions objecting to such proposed action or omission.
(o) Whenever in the performance of its duties under this Agreement
the Warrant Agent shall deem it necessary or desirable that any fact or matter
be proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the chief executive officer,
the president, the treasurer, the controller, any vice president or the
secretary of the Company or any other officer or official of the Company
reasonably believed to be authorized to give such instructions and delivered to
the Warrant Agent; and such certificate shall be full authorization to the
Warrant Agent for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(p) The Warrant Agent shall not be required to risk or expend its own
funds in the performance of its obligations and duties hereunder.
Section 6.03 Resignation and Appointment of Successor.
(a) The Company agrees, for the benefit of the holders from time to
time of the Warrant Certificates, that there shall at all times be a Warrant
Agent hereunder.
(b) The Warrant Agent may at any time resign as Warrant Agent by
giving written notice to the Company of such intention on its part, specifying
the date on which its desired resignation shall become effective, provided that
such date shall be at least 30 days after the date on which such notice is given
unless the Company agrees to accept less notice. Upon receiving such notice of
resignation, the Company shall promptly appoint a successor Warrant Agent,
qualified as provided in Section 6.03(d) hereof, by written instrument in
duplicate signed on behalf of the Company, one copy of which shall be delivered
to the resigning Warrant Agent and one copy to the successor Warrant Agent. As
provided in Section 6.03(d) hereof, such resignation shall become effective upon
the earlier of (x) the acceptance of the appointment by the successor Warrant
Agent or (y) 30 days after receipt by the Company of notice of such resignation.
The Company may, at any time and for any reason, and shall, upon any event set
forth in the next succeeding sentence, remove the Warrant Agent and appoint a
successor Warrant Agent by written instrument in duplicate, specifying such
removal and the date on
22
which it is intended to become effective, signed on behalf of the Company, one
copy of which shall be delivered to the Warrant Agent being removed and one copy
to the successor Warrant Agent. The Warrant Agent shall be removed as aforesaid
if it shall become incapable of acting, or shall be adjudged as bankrupt or
insolvent, or a receiver of the Warrant Agent or of its property shall be
appointed, or any public officer shall take charge or control of it or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation. Any removal of the Warrant Agent and any appointment of a successor
Warrant Agent shall become effective upon acceptance of appointment by the
successor Warrant Agent as provided in Section 6.03(d). As soon as practicable
after appointment of the successor Warrant Agent, the Company shall cause
written notice of the change in the Warrant Agent to be given to each of the
registered holders of the Warrants in the manner provided for in Section 7.04
hereof
(c) Upon resignation or removal of the Warrant Agent, if the Company
shall fail to appoint a successor Warrant Agent within a period of 30 days after
receipt of such notice of resignation or removal, then the holder of any Warrant
Certificate or the Warrant Agent may apply to a court of competent jurisdiction
for the appointment of a successor to the Warrant Agent. Pending appointment of
a successor to the Warrant Agent, either by the Company or by such a court, the
duties of the Warrant Agent shall be carried out by the Company.
(d) Any successor Warrant Agent, whether appointed by the Company or
by a court, shall be a bank or trust company in good standing, incorporated
under the laws of the United States of America or any State thereof and having,
at the time of its appointment, a combined capital surplus of at least $50
million. Such successor Warrant Agent shall execute and deliver to its
predecessor and to the Company an instrument accepting such appointment
hereunder and all the provisions of this Agreement, and thereupon such successor
Warrant Agent, without any further act, deed or conveyance, shall become vested
with all the rights, powers, duties and obligations of its predecessor
hereunder, with like effect as if originally named as Warrant Agent hereunder,
and such predecessor shall thereupon become obligated to (i) transfer and
deliver, and such successor Warrant Agent shall be entitled to receive, all
securities, records or other property on deposit with or held by such
predecessor as Warrant Agent hereunder and (ii) upon payment of the amounts then
due it pursuant to Section 6.02(a) hereof, pay over, and such successor Warrant
Agent shall be entitled to receive, all monies deposited with or held by any
predecessor Warrant Agent hereunder.
(e) Any corporation or bank into which the Warrant Agent hereunder
may be merged or converted, or any corporation or bank with which the Warrant
Agent may be consolidated, or any corporation or bank resulting from any merger,
conversion or consolidation to which the Warrant Agent shall be a party, or any
corporation or bank to which the Warrant Agent shall sell or otherwise transfer
all or substantially all of its corporate trust business, shall be the successor
to the Warrant Agent under this Agreement (provided that such corporation or
bank shall be qualified as aforesaid) without the execution or filing of any
document or any further act on the part of any of the parties hereto.
(f) No Warrant Agent under this Warrant Agreement shall be personally
liable for any action or omission of any successor Warrant Agent or of the
Company.
23
ARTICLE VII
MISCELLANEOUS
Section 7.01 Amendment. This Agreement and the terms of the Warrants may
be amended by the Company and the Warrant Agent, without the consent of the
holder of any Warrant Certificate, for the purpose of curing any ambiguity, or
of curing, correcting or supplementing any defective or inconsistent provision
contained herein or therein or, subject to the provisions of the second
paragraph of this Section 7.01, in any other manner which the Company may deem
necessary or desirable and which shall not adversely affect in any material
respect the interests of the holders of the Warrant Certificates.
The Company and the Warrant Agent may modify this Agreement and the
terms of the Warrants with the consent of not less than a majority in number of
the then outstanding Warrants for the purpose of adding any provision to or
changing in any manner or eliminating any of the provisions of this Agreement or
modifying in any manner the rights of the holders of the outstanding Warrants;
provided, however, that no such modification that increases or decreases the
Exercise Price, decreases the number of shares purchasable upon exercise of the
Warrants, reduces the period of time during which the Warrants are exercisable
hereunder, otherwise materially and adversely affects the exercise rights of the
holders of the Warrants, reduces the percentage required for modification, or
effects any change to this Section 7.01 may be made with respect to an
outstanding Warrant without the consent of the holder of such Warrant.
Any modification or amendment made in accordance with this Agreement
will be conclusive and binding on all present and future holders of Warrant
Certificates whether or not they have consented to such modification or
amendment or waiver and whether or not notation of such modification or
amendment is made upon such Warrant Certificates. Any instrument given by or on
behalf of any holder of a Warrant Certificate in connection with any consent to
any modification or amendment will be conclusive and binding on all subsequent
holders of such Warrant Certificate.
Section 7.02 Notices and Demands to the Company and Warrant Agent. If the
Warrant Agent shall receive any notice or demand addressed to the Company by the
holder of a Warrant Certificate pursuant to the provisions hereof or of the
Warrant Certificates, the Warrant Agent shall promptly forward such notice or
demand to the Company.
Section 7.03 Addresses for Notices to Parties and for Transmission of
Documents. All notices hereunder to the parties hereto shall be deemed to have
been given when sent by certified or registered mail, postage prepaid, or by
telex or telecopy, confirmed by first class mail, postage prepaid, addressed to
any party hereto as follows:
To the Company: Syntroleum Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
To the Warrant Agent: American Stock Transfer and Trust Company
▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
or at any other address of which either of the foregoing shall have notified the
other in writing.
Section 7.04 Notices to Holders. Notices to holders of Warrants shall be
mailed to such holders at the addresses of such holders as they appear in the
Warrant Register. Any such notice shall be sufficiently given if sent by
first-class mail, postage prepaid.
Section 7.05 APPLICABLE LAW. THE VALIDITY, INTERPRETATION AND PERFORMANCE
OF THIS AGREEMENT AND EACH WARRANT CERTIFICATE ISSUED HEREUNDER AND OF THE
RESPECTIVE TERMS AND PROVISIONS THEREOF SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PROVISIONS
THEREOF.
Section 7.06 Obtaining of Governmental Approvals. The Company will from
time to time take all action required to be taken by it which may be necessary
to obtain and keep effective any and all permits, consents and approvals of
governmental agencies and authorities and securities acts filings under United
States Federal and State laws, and the rules and regulations of all stock
exchanges on which the Warrants are listed which may be or become requisite in
connection with the issuance, sale, transfer, and delivery of the Warrant
Certificates, the exercise of the Warrants or the issuance, sale, transfer and
delivery of the shares issued upon exercise of the Warrants.
Section 7.07 Persons Having Rights Under Agreement. Nothing in this
Agreement expressed or implied and nothing that may be inferred from any of the
provisions hereof is intended, or shall be construed, to confer upon, or give
to, any person or corporation other than the Company, the Warrant Agent and the
holders of the Warrant Certificates any right, remedy or claim under or by
reason of this Agreement or of any covenant, condition, stipulation, promise or
agreement hereof; and all covenants, conditions, stipulations, promises and
agreements in this Agreement contained shall be for the sole and exclusive
benefit of the Company and the Warrant Agent and their successors and of the
holders of the Warrant Certificates.
Section 7.08 Headings. The descriptive headings of the several Articles
and Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
Section 7.09 Counterparts. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original; but
such counterparts shall together constitute but one and the same instrument.
Section 7.10 Inspection of Agreement. A copy of this Agreement shall be
available at all reasonable times at the principal corporate trust office of the
Warrant Agent, for inspection by the holder of any Warrant Certificate. The
Warrant Agent may require such holder to submit his Warrant Certificate for
inspection by it.
25
Section 7.11 Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Warrant Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
26
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of the day and year first above written.
SYNTROLEUM CORPORATION
By: _____________________________
Name: ___________________________
Title: __________________________
AMERICAN STOCK TRANSFER
AND TRUST COMPANY,
as Warrant Agent
By: _____________________________
Name: ___________________________
Title: __________________________
27
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
[FACE]
[Unless and until it is exchanged in whole or in part for Warrants in
certificated form, this Warrant may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to the issuer
or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or such other entity as is requested by an authorized representative
of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co.,
has an interest herein./1/
CUSIP#[_]
No. [_] [_] Warrants
WARRANT CERTIFICATE
SYNTROLEUM CORPORATION
This Warrant Certificate certifies that [ ], or registered assigns, is the
registered holder of [ ] Warrants (the "Warrants") to purchase shares of Common
Stock, par value $.01 per share (the "Common Stock"), of Syntroleum Corporation
a Delaware corporation (the "Company"). Each Warrant entitles the holder to
purchase from the Company at any time on or after May 26, 2004 until 5:00 p.m.,
New York City, New York time, on May 26, 2008 (the "Expiration Date"),
___________ fully paid and non-assessable shares of Common Stock (a "Share", or,
if adjusted, the "Shares", which may also include any other securities or
property purchasable upon exercise of a Warrant, such adjustment and inclusion
each as provided in the Warrant Agreement) at the exercise price (the "Exercise
Price") of $7.60 per Share upon surrender of this Warrant Certificate and
payment of the Exercise Price at any office or agency maintained for that
purpose by the Company (the "Warrant Agent Office"), subject to the conditions
set forth herein and in the Warrant Agreement.
The Exercise Price shall be payable by cash, certified check or official
bank check or by such other means as is acceptable to the Company in the lawful
currency of the United States of America which as of the time of payment is
legal tender for payment of public or private debts. The Company has initially
designated the Warrant Agent's office in New York City, New York, as the initial
Warrant Agent Office. The number of Shares issuable upon exercise of the
Warrants ("Exercise Rate") is subject to adjustment upon the occurrence of
certain events set forth in the Warrant Agreement.
----------
/1/ This paragraph is to be included only if the Warrant is in global form.
A-1
Any Warrants not exercised on or prior to 5:00 p.m., New York City, New
York time, on May 26, 2008 shall thereafter be void.
Reference is hereby made to the further provisions on the reverse hereof
which provisions shall for all purposes have the same effect as though fully set
forth at this place. Capitalized terms used in this Warrant Certificate but not
defined herein shall have the meanings ascribed thereto in the Warrant
Agreement.
This Warrant Certificate shall not be valid unless authenticated by the
Warrant Agent, as such term is used in the Warrant Agreement.
THIS WARRANT CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PROVISIONS
THEREOF.
WITNESS the facsimile seal of the Company and facsimile signatures of its
duly authorized officers.
Dated: ___________ SYNTROLEUM CORPORATION
By: _____________________________
Name: ___________________________
Title: __________________________
[Seal]
Attest:
By: _____________________________
Name: ___________________________
Title: __________________________
Certificate of Authentication:
This is one of the Warrants referred to in the within mentioned Warrant
Agreement:
_____________________________
as Warrant Agent
By: _________________________
Authorized Signatory
A-2
[FORM OF WARRANT CERTIFICATE]
[REVERSE]
SYNTROLEUM CORPORATION
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants, each of which represents the right to purchase at
any time on or after May 26, 2004, until 5:00 p.m., New York City, New York
time, on May 26, 2008, ____ shares of Common Stock of the Company, subject to
adjustment as set forth in the Warrant Agreement. The Warrants are issued
pursuant to a Warrant Agreement dated as of May 26, 2004 (the "Warrant
Agreement"), duly executed and delivered by the Company to American Stock
Transfer and Trust Company, a New York corporation, as Warrant Agent (the
"Warrant Agent"), which Warrant Agreement is hereby incorporated by reference in
and made a part of this instrument and is hereby referred to for a description
of the rights, limitation of rights, obligations, duties and immunities
thereunder of the Warrant Agent, the Company and the holders (the words
"holders" or "holder" meaning the registered holders or registered holder) of
the Warrants. Warrants may be exercised by (1) surrendering at any Warrant Agent
Office this Warrant Certificate with the form of Election to Exercise set forth
hereon duly completed and executed and (ii) paying in full the Exercise Price
for each such Warrant exercised and any other amounts required to be paid
pursuant to the Warrant Agreement.
If all of the items referred to in the last sentence of the preceding
paragraph are received by the Warrant Agent at or prior to 2:00 p.m., New York
City, New York time, on a Business Day, the exercise of the Warrant to which
such items relate will be effective on such Business Day. If any items referred
to in the last sentence of the preceding paragraph are received after 2:00 p.m.,
New York City, New York time, on a Business Day, the exercise of the Warrants to
which such item relates will be deemed to be effective on the next succeeding
Business Day. Notwithstanding the foregoing, in the case of an exercise of
Warrants on the Expiration Date, if all of the items referred to in the last
sentence of the preceding paragraph are received by the Warrant Agent at or
prior to 5:00 p.m., New York City, New York time, on such Expiration Date, the
exercise of the Warrants to which such items relate will be effective on the
Expiration Date.
Subject to the terms of the Warrant Agreement, as soon as practicable after
the exercise of any Warrant or Warrants, the Company shall issue or cause to be
issued to or upon the written order of the registered holder of this Warrant
Certificate pursuant to the Election to Exercise, as set forth on the reverse of
this warrant Certificate, a certificate or certificates evidencing the Share.
Such certificate or certificates evidencing the Share or Shares shall be deemed
to have been issued and any persons who are designated to be named therein shall
be deemed to have become the holder of record of such Share or Shares as of the
close of business on the date upon which the exercise of this Warrant was deemed
to be effective as provided in the preceding paragraph.
The Company will not be required to issue fractional shares of Common Stock
upon exercise of the Warrants or distribute Share certificates that evidence
fractional shares of Common Stock. In lieu of fractional shares of Common Stock,
there shall be paid to the
A-3
registered holder of this Warrant Certificate at the time such Warrant
Certificate is exercised an amount in cash equal to the same fraction of the
Current Market Value per share as determined in accordance with the Warrant
Agreement.
Warrant Certificates, when surrendered at any office or agency maintained
by the Company for that purpose by the registered holder thereof in person or by
legal representative or attorney duly authorized in writing, may be exchanged
for a new Warrant Certificate or new Warrant Certificates evidencing in the
aggregate a like number of Warrants, in the manner and subject to the
limitations provided in the Warrant Agreement, without charge except for any tax
or other governmental charge imposed in connection therewith.
Upon due presentment for registration of transfer of this Warrant
Certificate at any office or agency maintained by the Company for that purpose,
a new Warrant Certificate evidencing in the aggregate a like number of Warrants
shall be issued to the transferee in exchange for this Warrant Certificate,
subject to the limitations provided in the Warrant Agreement, without charge
except for any tax or other governmental charge imposed in connection therewith.
The Company and the Warrant Agent may deem and treat the registered holder
hereof as the absolute owner of this Warrant Certificate (notwithstanding any
notation of ownership or other writing hereon made by anyone) for the purpose of
any exercise hereof and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary.
The term "Business Day" shall mean any day on which (i) banks in New York
City, New York are open for business, (ii) the principal national securities
exchange or market on which the Common Stock is listed or admitted to trading is
open for business and (iii) the principal national securities exchange or market
on which the Warrants are listed or admitted to trading are open for business.
A-4
(FORM OF ELECTION TO EXERCISE)
(To be executed upon exercise of Warrants on the Exercise Date)
The undersigned hereby irrevocably elects to exercise _______ of the
Warrants represented by this Warrant Certificate and purchase the whole number
of Shares issuable upon the exercise of such Warrants and herewith tenders
payment for such Shares in the amount of $__________ in cash or by certified or
official bank check, in accordance with the terms hereof The undersigned
requests that a certificate representing such Shares be registered in the name
of _______________________________ whose address is _____________________ and
that such certificate be delivered to _______________________________ whose
address is _________________________________. Any cash payments to be paid in
lieu of a fractional Share should be made to ____________________________ whose
address is _______________________ and the check representing payment thereof
should be delivered to _______________________ whose address is
____________________.
Dated: ___________________
Name of holder of Warrant Certificate: ________________________
(Please Print)
Tax Identification or Social Security Number: ________________________
Address: ________________________
Signature: ________________________
________________________
Note: The above signature must correspond with the name as written upon the face
of this Warrant Certificate in every particular, without alteration or
enlargement or any change whatever.
Dated: ___________________
A-1
[FORM OF ASSIGNMENT]
For value received ___________________________ hereby sells, assigns and
transfers unto ____________________________the within Warrant Certificate,
together with all right, title and interest therein, and does hereby irrevocably
constitute and appoint attorney, to transfer said Warrant Certificate on the
books of the within-named Company, with full power of substitution in the
premises.
Dated: ______________________
Signature: __________________
Note: The above signature must correspond with the name as written upon the face
of this Warrant Certificate in every particular, without alteration or
enlargement or any change whatever.
A-1
SCHEDULE OF EXCHANGES OF CERTIFICATED WARRANTS/2/
The following exchanges of a part of this Global Warrant for certificated
Warrants have been made:
-------------------------------------------------------------------------------------------------------------
Date of Amount of decrease in Amount of increase in Number of Warrants Signature of
Exchange Number of Warrants of Number of Warrants of of this Global authorized officer of
this Global Warrant this Global Warrant Warrant following Warrant Agent
such decrease (or
increase)
-------------------------------------------------------------------------------------------------------------
--------
/2/ This is to be included only if the Warrant is in global form.
A-1
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF WARRANTS
Re: Warrants to Purchase Common Stock (the "Warrants") of Syntroleum
Corporation.
This Certificate relates to _________ Warrants held in* book-entry or*
___________ certificated form by ____________ (the "Transferor").
The Transferor: *
[_] has requested the Warrant Agent by written order to deliver in exchange
for its beneficial interest in the Global Warrant held by the
Depositary a Warrant or Warrants in definitive, registered form of
authorized denominations and an aggregate number equal to its
beneficial interest in such Global Warrant (or the portion thereof
indicated above); or
[_] has requested the Warrant Agent by written order to exchange or
register the transfer of a Warrant or Warrants.
In connection with such request and in respect of each such Warrant,
the Transferor does hereby certify that the Transferor is familiar with the
Warrant Agreement relating to the above captioned Warrants and the restrictions
on transfers thereof as provided in such Warrant Agreement, and that the
transfer of this Warrant does not require registration under the Securities Act
of 1933, as amended (the "Act").
[INSERT NAME OF TRANSFEROR]
Date: By: _______________________
*Check applicable box.
B-1