exv4w8






Exhibit 4.8




GLORI ENERGY INC.




SERIES C PREFERRED STOCK PURCHASE AGREEMENT



DECEMBER 30, 2011



 









 





TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	1. PURCHASE AND SALE OF PREFERRED STOCK
	 	 	1	 
	1.1 Sale and Issuance of Series C Preferred Stock
	 	 	1	 
	1.2 Subsequent Closing
	 	 	1	 
	1.3 Closing; Delivery
	 	 	2	 
	1.4 Use of Proceeds
	 	 	2	 
	1.5 Defined Terms Used in this Agreement
	 	 	2	 
	2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
	 	 	3	 
	2.1 Organization, Good Standing, Corporate Power and Qualification
	 	 	4	 
	2.2 Capitalization
	 	 	4	 
	2.3 Subsidiaries
	 	 	6	 
	2.4 Authorization
	 	 	6	 
	2.5 Valid Issuance of Shares
	 	 	6	 
	2.6 Governmental Consents and Filings
	 	 	6	 
	2.7 Litigation
	 	 	7	 
	2.8 Intellectual Property
	 	 	7	 
	2.9 Compliance with Other Instruments
	 	 	8	 
	2.10 Agreements; Actions
	 	 	8	 
	2.11 Certain Transactions
	 	 	9	 
	2.12 Rights of Registration and Voting Rights
	 	 	9	 
	2.13 Absence of Liens
	 	 	9	 
	2.14 Financial Statements
	 	 	10	 
	2.15 Changes
	 	 	10	 
	2.16 Employee Matters
	 	 	10	 
	2.17 Tax Returns and Payments
	 	 	12	 
	2.18 Insurance
	 	 	12	 
	2.19 Confidential Information and Invention Assignment Agreements
	 	 	12	 
	2.20 Permits
	 	 	12	 
	2.21 Corporate Documents
	 	 	12	 
	2.22 Real Property Holding Corporation
	 	 	13	 
	2.23 Environmental and Safety Laws
	 	 	13	 






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	 	 	Page	 
	2.24 Qualified Small Business Stock
	 	 	13	 
	2.25 Disclosure
	 	 	13	 
	3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
	 	 	14	 
	3.1 Authorization
	 	 	14	 
	3.2 Purchase Entirely for Own Account
	 	 	14	 
	3.3 Disclosure of Information
	 	 	14	 
	3.4 Restricted Securities
	 	 	14	 
	3.5 No Public Market
	 	 	15	 
	3.6 Legends
	 	 	15	 
	3.7 Accredited Investor
	 	 	15	 
	3.8 Foreign Investors
	 	 	15	 
	3.9 No General Solicitation
	 	 	16	 
	3.10 Exculpation Among Purchasers
	 	 	16	 
	3.11 Residence
	 	 	16	 
	3.12 Bridge Note
	 	 	16	 
	4. CONDITIONS TO THE PURCHASERS’ OBLIGATIONS
	 	 	16	 
	4.1 Representations and Warranties
	 	 	16	 
	4.2 Performance
	 	 	16	 
	4.3 Compliance Certificate
	 	 	16	 
	4.4 Qualifications
	 	 	17	 
	4.5 Board of Directors
	 	 	17	 
	4.6 Indemnification Agreements
	 	 	17	 
	4.7 Third Amended and Restated Investors’ Rights Agreement
	 	 	17	 
	4.8 Third Amended and Restated Right of First Refusal and Co-Sale Agreement
	 	 	17	 
	4.9 Third Amended and Restated Voting Agreement
	 	 	17	 
	4.10 Restated Certificate
	 	 	17	 
	4.11 Secretary’s Certificate
	 	 	17	 
	4.12 Legal Opinion
	 	 	17	 
	4.13 Proceedings and Documents
	 	 	17	 
	4.14 Minimum Initial Closing Proceeds
	 	 	17	 
	5. CONDITIONS OF THE COMPANY’S OBLIGATIONS
	 	 	18	 
	5.1 Representations and Warranties
	 	 	18	 






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	 	 	Page	 
	5.2 Performance
	 	 	18	 
	5.3 Qualifications
	 	 	18	 
	5.4 Third Amended and Restated Investors’ Rights Agreement
	 	 	18	 
	5.5 Third Amended and Restated Right of First Refusal and Co-Sale Agreement
	 	 	18	 
	5.6 Third Amended and Restated Voting Agreement
	 	 	18	 
	5.7 Representation Letter
	 	 	18	 
	6. MISCELLANEOUS
	 	 	18	 
	6.1 Survival of Warranties
	 	 	18	 
	6.2 Successors and Assigns
	 	 	18	 
	6.3 Governing Law
	 	 	19	 
	6.4 Counterparts; Facsimile
	 	 	19	 
	6.5 Titles and Subtitles
	 	 	19	 
	6.6 Notices
	 	 	19	 
	6.7 No Finder’s Fees
	 	 	19	 
	6.8 Fees and Expenses
	 	 	19	 
	6.9 Attorney’s Fees
	 	 	20	 
	6.10 Amendments and Waivers
	 	 	20	 
	6.11 Severability
	 	 	20	 
	6.12 Delays or Omissions
	 	 	20	 
	6.13 Entire Agreement
	 	 	20	 
	6.14 Dispute Resolution
	 	 	20	 
	6.15 Indemnification.
	 	 	21	 
	6.16 No Commitment for Additional Financing
	 	 	22	 
	Exhibit A            Schedule of Purchasers
	 	 	 	 
	Exhibit B            Form of Amended and Restated Certificate of Incorporation
	 	 	 	 






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SERIES C PREFERRED STOCK PURCHASE AGREEMENT




     THIS SERIES C PREFERRED STOCK PURCHASE AGREEMENT (the “Agreement”) is entered into as of this
30th day of December 2011, by and among Glori Energy Inc. (f/k/a Glori Oil Limited), a
Delaware corporation (the “Company”), and the purchasers listed from time to time on Exhibit
A attached hereto (each a “Purchaser” and collectively, the “Purchasers”).



     WHEREAS, the Company desires to sell to the Purchasers, and the Purchasers desire to purchase
from the Company, shares of Series C Preferred Stock, par value $0.0001 per share (the “Series C
Preferred Stock”), to be authorized by the Company pursuant to the terms set forth herein.



     NOW, THEREFORE, in consideration of the foregoing, and of the mutual promises,
representations, warranties, covenants and conditions set forth in this Agreement, the parties
hereto hereby agree as follows:



     1. Purchase and Sale of Preferred Stock.



          1.1 Sale and Issuance of Series C Preferred Stock.




               (a) The Company shall adopt and file with the Secretary of State of the State of Delaware on
or before the Initial Closing (as defined below) the Amended and Restated Certificate of
Incorporation in the form of Exhibit B attached to this Agreement (the “Restated
Certificate”).



               (b) Subject to the terms and conditions of this Agreement, the Purchasers agree to purchase at
the Initial Closing, and the Company agrees to sell and issue to the Purchasers at the Initial
Closing, that number of shares of Series C Preferred Stock set forth in the column designated
“Initial Closing Shares” opposite such Purchaser’s name on Exhibit A, at a purchase price
of $2.741 per share. The consideration for the purchased shares of Series C Preferred Stock shall
be paid in cash or by the cancellation of indebtedness of the Company to any Purchaser (such
cancellation of principal and accrued but unpaid interest is set forth on Exhibit A under
the heading “Principal/Interest/Total Amount of Surrendered Debt.” The shares of Series C
Preferred Stock, when issued to the Purchasers pursuant to this Agreement (including any Additional
Initial Closing Shares, as defined below), shall be referred to in this Agreement as the “Shares.”



          1.2 Subsequent Closing. On or prior to January 16, 2012, the Company may sell, on the
terms and conditions contained in this Agreement, up to an aggregate of 4,420,563 additional shares
of Series C Preferred Stock (the “Additional Initial Closing Shares”) to (i) Gentry Glori Energy
Investment LLC, (ii) Advantage Capital Partners or an Affiliate, (iii) any holder of the Company’s
Series B Preferred Stock or (iv) such other purchasers to be determined by the Company. In such
event, Exhibit A to this Agreement shall be amended and updated by the Company to reflect
the number of Additional Initial Closing Shares sold by the Company. The Additional Initial
Closing Shares shall be deemed sold as of the date of the Initial Closing for the purposes of
Article Fourth, Section B, Subsection 1 of the Restated Certificate. As a condition to the sale by
the Company to the purchasers contemplated by this Section 1.2, such






1









 







purchasers shall, to the extent required by the Company, deliver to the Company a
representation letter in form and substance satisfactory to the Company.




          1.3 Closing; Delivery.




               (a) The initial purchase and sale of the Shares shall take place remotely via the exchange of
documents and signatures, at 10:00 a.m., Houston, Texas time, on December 30, 2011, or at such
other time and place as the Company and the Purchasers purchasing a majority of the Initial Closing
Shares mutually agree upon, orally or in writing (which time and place are designated as the
“Initial Closing”).



               (b) The purchase and sale of any Additional Initial Closing Shares shall take place remotely
via the exchange of documents and signatures, at such time and place as the Company and the
Purchasers purchasing a majority of the Additional Initial Closing Shares mutually agree on, orally
or in writing, subject to the limitations set forth in Section 1.2 (which time and place are
designated as the “Additional Closing” and together with the Initial Closing, each referred to
herein as, a “Closing”).



               (c) At each Closing, the Company shall deliver to the Purchasers a certificate representing
the Shares being purchased by the Purchasers at such Closing against payment of the purchase price
therefor by wire transfer to a bank account designated by the Company, by cancellation or
conversion of indebtedness of the Company to the Purchasers, including interest, or by any
combination of such methods.



          1.4 Use of Proceeds. In accordance with the directions of the Company’s Board of
Directors, as it shall be constituted in accordance with the Third Amended and Restated Voting
Agreement, the Company will use the proceeds from the sale of the Shares for product development
and other general corporate purposes.




          1.5 Defined Terms Used in this Agreement. In addition to the terms defined above, the
following terms used in this Agreement shall be construed to have the meanings set forth or
referenced below.




     “Affiliate” means, with respect to any specified Person, any other Person who or which,
directly or indirectly, controls, is controlled by, or is under common control with such specified
Person, including, without limitation, any partner, officer, director, member or employee of such
Person and any venture capital fund now or hereafter existing that is controlled by or under common
control with one or more general partners or managing members of, or shares the same management
company with, such Person.



     “Code” means the Internal Revenue Code of 1986, as amended.



     “Company Intellectual Property” means all patents, patent applications, trademarks, trademark
applications, service marks, tradenames, copyrights, trade secrets, licenses, domain names, mask
works, information and proprietary rights and processes as are necessary to the conduct of the
Company’s business as now conducted and as presently proposed to be conducted.



2









 





     “Indemnification Agreement” means the indemnification agreement between the Company and the
director designated by any Purchaser entitled to designate a member of the Board of Directors
pursuant to the Third Amended and Restated Voting Agreement.



     “Key Employee” means any executive-level employee (including vice president-level positions)
as well as any employee or consultant who either alone or in concert with others develops, invents,
programs or designs any Company Intellectual Property.



     “Knowledge,” including the phrase “to the Company’s knowledge,” shall mean the actual
knowledge after reasonable investigation of the following officers: Stuart M. Page, Victor Perez
and Dr. Thomas Ishoey.



     “Legal Opinion” means the opinion of Fulbright & Jaworski L.L.P. addressed to the Purchasers,
in the form and substance reasonably satisfactory to the Purchasers hereto.



     “Material Adverse Effect” means a material adverse effect on the business, assets (including
intangible assets), liabilities, financial condition, property, prospects or results of operations
of the Company.



     “Person” means any individual, corporation, partnership, trust, limited liability company,
association or other entity.



     “Purchaser” means each of the Purchasers who is a party to this Agreement.



     “Third Amended and Restated Investors’ Rights Agreement” means the agreement among the
Company, The Energy and Resources Institute and the Purchasers, dated as of the date of the Initial
Closing, in form and substance reasonably satisfactory to the parties hereto.



     “Third Amended and Restated Right of First Refusal and Co-Sale Agreement” means the agreement
among the Company, the Purchasers, and certain other stockholders of the Company, dated as of the
date of the Initial Closing, in form and substance reasonably satisfactory to the parties hereto.



     “Third Amended and Restated Voting Agreement” means the agreement among the Company, the
Purchasers and certain other stockholders of the Company, dated as of the date of the Initial
Closing, in form and substance reasonably satisfactory to the parties hereto.



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



     “Transaction Agreements” means this Agreement, the Third Amended and Restated Investors’
Rights Agreement, the Third Amended and Restated Right of First Refusal and Co-Sale Agreement, the
Third Amended and Restated Voting Agreement and the Indemnification Agreements.



     2. Representations and Warranties of the Company.



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          The Company hereby represents and warrants to each Purchaser that, except as set forth on the
disclosure letter delivered by the Company to the Purchasers (the “Disclosure Letter”),
which exceptions shall be deemed to be part of the representations and warranties made hereunder,
the following representations are, to the Company’s knowledge, true and complete as of the date of
the Initial Closing, except as otherwise indicated. The Disclosure Letter shall be arranged in
sections corresponding to the numbered and lettered sections and subsections contained in this
Section 2, and the disclosures in any section or subsection of the Disclosure Letter shall qualify
other sections and subsections in this Section 2 only to the extent it is readily apparent from a
reading of the disclosure that such disclosure is applicable to such other sections and
subsections.




          For purposes of these representations and warranties (other than those in Sections 2.2, 2.3,
2.4, 2.5 and 2.6), the term “the Company” shall include any subsidiaries of the Company, unless
otherwise noted herein.




          2.1 Organization, Good Standing, Corporate Power and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to carry on its business as presently
conducted and as proposed to be conducted. The Company is duly qualified to transact business and
is in good standing in each jurisdiction in which the failure to so qualify would have a Material
Adverse Effect.




          2.2 Capitalization. The authorized capital of the Company consists, immediately prior
to the Initial Closing, of:




               (a) 100,000,000 shares of common stock, $0.0001 par value per share (the “Common Stock”),
3,009,592 shares of which are issued and outstanding immediately prior to the Initial Closing. All
of the outstanding shares of Common Stock have been duly authorized, are fully paid and
nonassessable and were issued in compliance with all applicable federal and state securities laws.
The Company holds no treasury stock and no shares of Preferred Stock in its treasury.



               (b) 10,922,904 shares of Preferred Stock, 521,852 of which shares have been designated Series
A Preferred Stock, 475,541 of which are issued and outstanding immediately prior to the Initial
Closing, 2,901,052 of which shares have been designated Series B Preferred Stock, 2,901,052 of
which are issued and outstanding immediately prior to the Initial Closing and 7,500,000 of which
shares have been designated Series C Preferred Stock, none of which are issued and outstanding
immediately prior to the Initial Closing. The rights, privileges and preferences of the Preferred
Stock are as stated in the Restated Certificate and as provided by the general corporation law of
the jurisdiction of the Company’s incorporation.



               (c) The Company has reserved 5,453,740 shares of Common Stock for issuance to officers,
directors, employees and consultants of the Company pursuant to its 2006 Stock Option and Grant
Plan duly adopted by the Board of Directors and approved by the Company stockholders (the “Stock
Plan”). Of the 5,453,740 shares of Common Stock reserved for issuance under the Stock Plan, (x)
5,261,542 of such shares are reserved for issuance upon exercise of currently outstanding options,
(y) 168,932 of such shares are currently issued and



4









 




outstanding that were issued upon exercise of options granted, or pursuant to restricted stock
purchases effected, under the Stock Plan, and (z) 23,266 shares remain available for future stock
options and other awards permitted under the Plan. The Company has furnished to the Purchasers
complete and accurate copies of the Stock Plan and forms of agreements used thereunder.




               (d) Section 2.2(d) to the Disclosure Letter sets forth the capitalization of the
Company immediately following the Initial Closing, including the number of shares of the following:
(i) issued and outstanding Common Stock, including, with respect to restricted Common Stock,
vesting schedule and repurchase price; (ii) issued stock options, including vesting schedule and
exercise price; (iii) stock options not yet issued but reserved for issuance; (iv) each series of
Preferred Stock; and (v) warrants or stock purchase rights, if any. Except for (A) the conversion
privileges of the Shares to be issued under this Agreement and the conversion privileges of the
Series A Preferred Stock and the Series B Preferred Stock, (B) the rights provided in Section 4 of
the Third Amended and Restated Investors’ Rights Agreement, and (C) the securities and rights
described in Section 2.2(c) of this Agreement and on Section 2.2(d) to the Disclosure
Letter, there are no outstanding options, warrants, rights (including conversion or preemptive
rights and rights of first refusal or similar rights) or agreements, orally or in writing, to
purchase or acquire from the Company any shares of Common Stock, Series A Preferred Stock, Series B
Preferred Stock or Series C Preferred Stock, or any securities convertible into or exchangeable for
shares of Common Stock, Series A Preferred Stock, Series B Preferred Stock or Series C Preferred
Stock. All outstanding shares of the Company’s Common Stock and all shares of the Company’s Common
Stock underlying outstanding options are subject to (i) a right of first refusal in favor of the
Company upon any proposed transfer (other than transfers for estate planning purposes); and (ii) a
lock-up or market standoff agreement of not less than 180 days following the Company’s initial
public offering pursuant to a registration statement filed with the Securities and Exchange
Commission under the Securities Act.



               (e) Except as set forth on Section 2.2(e) to the Disclosure Letter, none of the
Company’s stock purchase agreements or stock option documents contains a provision for acceleration
of vesting (or lapse of a repurchase right) or other changes in the vesting provisions or other
terms of such agreement or understanding upon the occurrence of any event or combination of events.
The Company has never adjusted or amended the exercise price of any stock options previously
awarded, whether through amendment, cancellation, replacement grant, repricing, or any other means.
Except as set forth in the Restated Certificate, the Company has no obligation (contingent or
otherwise) to purchase or redeem any of its capital stock.



               (f) No stock options, stock appreciation rights or other equity-based awards issued or granted
by the Company are subject to the requirements of Section 409A of the Code. Each “nonqualified
deferred compensation plan” (as such term is defined under Section 409A(d)(1) of the Code and the
guidance thereunder) under which the Company makes, is obligated to make or promises to make,
payments (each, a “409A Plan”) complies in all material respects, in both form and operation, with
the requirements of Section 409A of the Code and the guidance thereunder. No payment to be made
under any 409A Plan is, or to the knowledge of the Company will be, subject to the penalties of
Section 409A(a)(1) of the Code.



5









 





          2.3 Subsidiaries. Except as set forth on Section 2.3 to the Disclosure
Letter, the Company does not currently own or control, directly or indirectly, any interest in
any other corporation, partnership, trust, joint venture, limited liability company, association,
or other business entity. The Company is not a participant in any joint venture, partnership or
similar arrangement.




          2.4 Authorization. All corporate action required to be taken by the Company’s Board
of Directors and stockholders in order to authorize the Company to enter into the Transaction
Agreements, and to issue the Shares at the Closing and the Common Stock issuable upon conversion of
the Shares, has been taken or will be taken prior to the Closing. All action on the part of the
officers of the Company necessary for the execution and delivery of the Transaction Agreements, the
performance of all obligations of the Company under the Transaction Agreements to be performed as
of the Closing, and the issuance and delivery of the Shares has been taken or will be taken prior
to the Closing. The Transaction Agreements, when executed and delivered by the Company, shall
constitute valid and legally binding obligations of the Company, enforceable against the Company in
accordance with their respective terms except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, or other laws of general application relating to
or affecting the enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief, or other equitable remedies, or (iii)
to the extent the indemnification provisions contained in the Third Amended and Restated Investors’
Rights Agreement and each Indemnification Agreement may be limited by applicable federal or state
securities laws.




          2.5 Valid Issuance of Shares. The Shares, when issued, sold and delivered in
accordance with the terms and for the consideration set forth in this Agreement, will be validly
issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions
on transfer under the Transaction Agreements, the Restated Certificate, applicable state and
federal securities laws and liens or encumbrances created by or imposed by a Purchaser. Assuming
the accuracy of the representations of the Purchasers in Section 3 of this Agreement and subject to
the filings described in Section 2.6(ii) below, the Shares will be issued in compliance with all
applicable federal and state securities laws. The Common Stock issuable upon conversion of the
Shares has been duly reserved for issuance, and upon issuance in accordance with the terms of the
Restated Certificate, will be validly issued, fully paid and nonassessable and free of restrictions
on transfer other than restrictions on transfer under the Transaction Agreements, the Restated
Certificate, applicable federal and state securities laws and liens or encumbrances created by or
imposed by a Purchaser. Based in part upon the representations of the Purchasers in Section 3 of
this Agreement, and subject to Section 2.6 below, the Common Stock issuable upon conversion of the
Shares will be issued in compliance with all applicable federal and state securities laws.




          2.6 Governmental Consents and Filings. Assuming the accuracy of the representations
made by the Purchasers in Section 3 of this Agreement, no consent, approval, order or authorization
of, or registration, qualification, designation, declaration or filing with, any federal, state or
local governmental authority is required on the part of the Company in connection with the
consummation of the transactions contemplated by this Agreement, except for (i) the filing of the
Restated Certificate, which will have been filed as of the Initial Closing,






6









 







and (ii) filings pursuant to Regulation D of the Securities Act, and applicable state
securities laws, which have been made or will be made in a timely manner.




          2.7 Litigation. Except as set forth on Section 2.7 to the Disclosure Letter,
there is no claim, action, suit, proceeding, arbitration, complaint, charge or, investigation
pending or, to the Company’s knowledge, currently threatened (i) against the Company or any
officer, director or Key Employee of the Company arising out of their employment or board
relationship with the Company; (ii) that questions the validity of the Transaction Agreements or
the right of the Company to enter into them, or to consummate the transactions contemplated by the
Transaction Agreements; or (iii) that would reasonably be expected to have, either individually or
in the aggregate, a Material Adverse Effect. Neither the Company nor, to the Company’s knowledge,
any of its officers, directors or Key Employees is a party or is named as subject to the provisions
of any order, writ, injunction, judgment or decree of any court or government agency or
instrumentality (in the case of officers, directors or Key Employees, such as would affect the
Company). There is no action, suit, proceeding or investigation by the Company pending or which
the Company intends to initiate. The foregoing includes, without limitation, actions, suits,
proceedings or investigations pending or threatened in writing (or any basis therefor known to the
Company) involving the prior employment of any of the Company’s employees, their services provided
in connection with the Company’s business, or any information or techniques allegedly proprietary
to any of their former employers, or their obligations under any agreements with prior employers.




          2.8 Intellectual Property. The Company owns or possesses sufficient legal rights to
all Company Intellectual Property without any known conflict with, or infringement of, the rights
of others. To the Company’s knowledge, no product or service marketed or sold (or proposed to be
marketed or sold) by the Company violates or will violate any license or infringes or will infringe
any intellectual property rights of any other party. Other than as set forth on Section 2.8 to
the Disclosure Letter, other than with respect to commercially available software products
under standard end-user object code license agreements, there are no outstanding options, licenses,
agreements, claims, encumbrances or shared ownership interests of any kind relating to the Company
Intellectual Property, nor is the Company bound by or a party to any options, licenses or
agreements of any kind with respect to the patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses, information, proprietary rights and processes of any other
Person. The Company has not received any communications alleging that the Company has violated or,
by conducting its business, would violate any of the patents, trademarks, service marks,
tradenames, copyrights, trade secrets, mask works or other proprietary rights or processes of any
other Person. The Company has obtained and possesses valid licenses to use all of the software
programs present on the computers and other software-enabled electronic devices that it owns or
leases or that it has otherwise provided to its employees for their use in connection with the
Company’s business. To the Company’s knowledge, it will not be necessary to use any inventions of
any of its employees or consultants (or Persons it currently intends to hire) made prior to their
employment by the Company. Each Company employee and consultant who has contributed to the Company
Intellectual Property has assigned to the Company all intellectual property rights he or she owns
that are part of the Company Intellectual Property. Section 2.8 to the Disclosure Letter
lists all Company Intellectual Property that is registered or for which a pending registration has
been filed. The Company has not embedded any open source, copyleft or community source code in any
of its






7









 







products generally available or in development, including but not limited to any libraries or
code licensed under any General Public License, Lesser General Public License or similar license
arrangement. For purposes of this Section 2.8, the Company shall be deemed to have knowledge of a
patent right if the Company has actual knowledge of the patent right or would be found to be on
notice of such patent right as determined by reference to United States patent laws.




          2.9 Compliance with Other Instruments. The Company is not in violation or default (i)
of any provisions of its Restated Certificate or Bylaws, (ii) of any instrument, judgment, order,
writ or decree in which the Company is named or by which it is bound, (iii) under any note,
indenture or mortgage, or (iv) under any lease, agreement, contract or purchase order to which it
is a party or by which it is bound that is required to be listed on the Disclosure Letter, or of
any provision of federal or state statute, rule or regulation applicable to the Company, the
violation of which would have a Material Adverse Effect. The execution, delivery and performance
of the Transaction Agreements and the consummation of the transactions contemplated by the
Transaction Agreements will not result in any such violation or be in conflict with or constitute,
with or without the passage of time and giving of notice, either (i) a default under any such
provision, instrument, judgment, order, writ, decree, contract or agreement or (ii) an event which
results in the creation of any lien, charge or encumbrance upon any assets of the Company or the
suspension, revocation, forfeiture, or nonrenewal of any material permit or license applicable to
the Company.




          2.10 Agreements; Actions.




               (a) Except for the Transaction Agreements, there are no agreements, understandings,
instruments, contracts or proposed transactions to which the Company is a party or by which it is
bound that involve (i) obligations (contingent or otherwise) of, or payments to, the Company in
excess of $100,000, (ii) the license of any patent, copyright, trademark, trade secret or other
proprietary right to or from the Company, (iii) the grant of rights to manufacture, produce,
assemble, license, market, or sell its products to any other Person that limit the Company’s
exclusive right to develop, manufacture, assemble, distribute, market or sell its products, or (iv)
indemnification by the Company with respect to infringements of proprietary rights.



               (b) The Company has not (i) declared or paid any dividends, or authorized or made any
distribution upon or with respect to any class or series of its capital stock, (ii) incurred any
indebtedness for money borrowed or incurred any other liabilities individually in excess of
$100,000 or in excess of $1,000,000 in the aggregate, (iii) made any loans or advances to any
Person, other than ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise
disposed of any of its assets or rights, other than the sale of its inventory in the ordinary
course of business. For the purposes of subsections (b) and (c) of this Section 2.10, all
indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed
transactions involving the same Person (including Persons the Company has reason to believe are
affiliated with each other) shall be aggregated for the purpose of meeting the individual minimum
dollar amounts of such subsection.



               (c) The Company is not a guarantor or indemnitor of any indebtedness of any other Person.



8









 





          2.11 Certain Transactions.




               (a) Except as set forth on Section 2.11 to the Disclosure Letter, and other than (i)
standard employee benefits generally made available to all employees, (ii) standard director and
officer indemnification agreements approved by the Board of Directors, and (iii) the purchase of
shares of the Company’s capital stock and the issuance of options to purchase shares of the
Company’s Common Stock, in each instance, approved in the written minutes of the Board of Directors
(previously provided to the Purchasers or their counsel), there are no agreements, understandings
or proposed transactions between the Company and any of its officers, directors, consultants or Key
Employees, or any Affiliate thereof.



               (b) Except as set forth on Section 2.11 to the Disclosure Letter, the Company is not
indebted, directly or indirectly, to any of its directors, officers or employees or to their
respective spouses or children or to any Affiliate of any of the foregoing, other than in
connection with expenses or advances of expenses incurred in the ordinary course of business or
employee relocation expenses and for other customary employee benefits made generally available to
all employees. Except as set forth on Section 2.11 to the Disclosure Letter, none of the
Company’s directors, officers or employees, or any members of their immediate families, or any
Affiliate of the foregoing (i) is, directly or indirectly, indebted to the Company or, (ii) to the
Company’s knowledge, has any direct or indirect ownership interest in any firm or corporation with
which the Company is affiliated or with which the Company has a business relationship, or any firm
or corporation which competes with the Company except that directors, officers or employees or
stockholders of the Company may own stock in (but not exceeding two percent (2%) of the outstanding
capital stock of) publicly traded companies that may compete with the Company. None of the
Company’s Key Employees or directors or any members of their immediate families or any Affiliate of
any of the foregoing are, directly or indirectly, interested in any contract with the Company.
None of the directors or officers, or any members of their immediate families, has any material
commercial, industrial, banking, consulting, legal, accounting, charitable or familial relationship
with any of the Company’s customers, suppliers, service providers, joint venture partners,
licensees and competitors.



          2.12 Rights of Registration and Voting Rights. Except as provided in the Third
Amended and Restated Investors’ Rights Agreement, the Company is not under any obligation to
register under the Securities Act any of its currently outstanding securities or any securities
issuable upon exercise or conversion of its currently outstanding securities. To the Company’s
knowledge, except as contemplated in the Third Amended and Restated Voting Agreement, no
stockholder of the Company has entered into any agreements with respect to the voting of capital
shares of the Company.




          2.13 Absence of Liens. The property and assets that the Company owns are free and
clear of all mortgages, deeds of trust, liens, loans and encumbrances, except for statutory liens
for the payment of current taxes that are not yet delinquent and encumbrances and liens that arise
in the ordinary course of business and do not materially impair the Company’s ownership or use of
such property or assets. With respect to the property and assets it leases, the Company is in
compliance with such leases and, to its knowledge, holds a valid leasehold interest free of any
liens, claims or encumbrances other than those of the lessors of such property or assets.







9









 








          2.14 Financial Statements. The Company has delivered to each Purchaser its audited
financial statements as of December 31, 2010 and for the fiscal year ended December 31, 2010, and
its unaudited financial statements (including balance sheet, income statement and statement of cash
flows) as of September 30, 2011 and for the period ended September 30, 2011 (collectively, the
“Financial Statements”). The Financial Statements fairly present in all material respects the
financial condition and operating results of the Company as of the dates, and for the periods,
indicated therein, subject in the case of the unaudited Financial Statements to normal year-end
audit adjustments. Except as set forth in the Financial Statements, the Company has no material
liabilities or obligations, contingent or otherwise, other than liabilities incurred in the
ordinary course of business subsequent to September 30, 2011, obligations under contracts and
commitments incurred in the ordinary course of business and liabilities and obligations of a type
or nature not required under generally accepted accounting principles to be reflected in the
Financial Statements, which, in all such cases, individually and in the aggregate would not have a
Material Adverse Effect. The Company maintains and will continue to maintain a standard system of
accounting established and administered in accordance with generally accepted accounting
principles.




          2.15 Changes. Since September 30, 2011, there have been no events or circumstances of
any kind that have had or could reasonably be expected to result in a Material Adverse Effect.




          2.16 Employee Matters.




               (a) As of the date hereof, the Company employs 19 full-time employees, no part-time employees
and no temporary employee and engages two consultants or independent contractors. Glori Oil
S.R.L., the wholly owned subsidiary of the Company, employees no full-time employees. Section
2.16(a) of the Disclosure Letter sets forth a detailed description of all compensation,
including salary, bonus, severance obligations and deferred compensation paid or payable for each
officer, employee, consultant and independent contractor of the Company who received compensation
in excess of $50,000 for the fiscal year ended December 31, 2010 or is anticipated to receive
compensation in excess of $50,000 for the fiscal year ending December 31, 2011.



               (b) To the Company’s knowledge, none of its employees is obligated under any contract
(including licenses, covenants or commitments of any nature) or other agreement, or subject to any
judgment, decree or order of any court or administrative agency, that would materially interfere
with such employee’s ability to promote the interest of the Company or that would conflict with the
Company’s business. Neither the execution or delivery of the Transaction Agreements, nor the
carrying on of the Company’s business by the employees of the Company, nor the conduct of the
Company’s business as now conducted and as presently proposed to be conducted, will, to the
Company’s knowledge, conflict with or result in a breach of the terms, conditions, or provisions
of, or constitute a default under, any contract, covenant or instrument under which any such
employee is now obligated.



               (c) Except as set forth on Section 2.16(c) to the Disclosure Letter, the Company is
not delinquent in payments to any of its employees, consultants, or independent contractors for any
wages, salaries, commissions, bonuses, or other direct compensation for any



10









 




service performed for it to the date hereof or amounts required to be reimbursed to such
employees, consultants, or independent contractors. The Company has complied in all material
respects with all applicable state and federal equal employment opportunity laws and with other
laws related to employment, including those related to wages, hours, worker classification, and
collective bargaining. The Company has withheld and paid to the appropriate governmental entity or
is holding for payment not yet due to such governmental entity all amounts required to be withheld
from employees of the Company and is not liable for any arrears of wages, taxes, penalties, or
other sums for failure to comply with any of the foregoing.




               (d) To the Company’s knowledge, no Key Employee intends to terminate employment with the
Company or is otherwise likely to become unavailable to continue as a Key Employee, nor does the
Company have a present intention to terminate the employment of any of the foregoing. The
employment of each employee of the Company is terminable at the will of the Company. Except as set
forth on Section 2.16(d) to the Disclosure Letter or as required by law, upon termination
of the employment of any such employees, no severance or other payments will become due. Except as
set forth on Section 2.16(d) to the Disclosure Letter, the Company has no policy, practice,
plan, or program of paying severance pay or any form of severance compensation in connection with
the termination of employment services.



               (e) The Company has not made any representations regarding equity incentives to any officer,
employees, director or consultant that are inconsistent with the share amounts and terms set forth
in the minutes of meetings of the Company’s Board of Directors.



               (f) Except as set forth on Section 2.16(f) to the Disclosure Letter, each former Key
Employee whose employment was terminated by the Company has entered into an agreement with the
Company providing for the full release of any claims against the Company or any related party
arising out of such employment.



               (g) Section 2.16(g) to the Disclosure Letter sets forth each employee benefit plan
maintained, established or sponsored by the Company, or which the Company participates in or
contributes to, which is subject to the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”). The Company has made all required contributions and has no liability to any such
employee benefit plan, other than liability for health plan continuation coverage described in Part
6 of Title I(B) of ERISA, and has complied in all material respects with all applicable laws for
any such employee benefit plan.



               (h) The Company is not bound by or subject to (and none of its assets or properties is bound
by or subject to) any written or oral, express or implied, contract, commitment or arrangement with
any labor union, and no labor union has requested or, to the knowledge of the Company, has sought
to represent any of the employees, representatives or agents of the Company. There is no strike or
other labor dispute involving the Company pending, or to the Company’s knowledge, threatened, which
could have a Material Adverse Effect, nor is the Company aware of any labor organization activity
involving its employees.



               (i) To the Company’s knowledge, none of the Key Employees or directors of the Company has been
(a) subject to voluntary or involuntary petition under the



11









 




federal bankruptcy laws or any state insolvency law or the appointment of a receiver, fiscal
agent or similar officer by a court for his business or property; (b) convicted in a criminal
proceeding or named as a subject of a pending criminal proceeding (excluding traffic violations and
other minor offenses); (c) subject to any order, judgment, or decree (not subsequently reversed,
suspended, or vacated) of any court of competent jurisdiction permanently or temporarily enjoining
him from engaging, or otherwise imposing limits or conditions on his engagement in any securities,
investment advisory, banking, insurance, or other type of business or acting as an officer or
director of a public company; or (d) found by a court of competent jurisdiction in a civil action
or by the Securities and Exchange Commission or the Commodity Futures Trading Commission to have
violated any federal or state securities, commodities, or unfair trade practices law, which such
judgment or finding has not been subsequently reversed, suspended, or vacated.




          2.17 Tax Returns and Payments. There are no federal, state, county, local or foreign
taxes dues and payable by the Company which have not been timely paid. There are no accrued and
unpaid federal, state, country, local or foreign taxes of the Company which are due, whether or not
assessed or disputed. There have been no examinations or audits of any tax returns or reports by
any applicable federal, state, local or foreign governmental agency. The Company has duly and
timely filed all federal, state, county, local and foreign tax returns required to have been filed
by it and there are in effect no waivers of applicable statutes of limitations with respect to
taxes for any year.




          2.18 Insurance. The Company has in full force and effect fire and casualty insurance
policies with extended coverage, sufficient in amount (subject to reasonable deductions) to allow
it to replace any of its properties that might be damaged or destroyed.




          2.19 Confidential Information and Invention Assignment Agreements. Each current and
former employee, consultant and officer of the Company has executed an agreement with the Company
regarding confidentiality and proprietary information substantially in the form or forms delivered
to the counsel for the Purchasers (the “Confidential Information Agreements”). No current or
former Key Employee has excluded works or inventions from his or her assignment of inventions
pursuant to such Key Employee’s Confidential Information Agreement. The Company is not aware that
any of its Key Employees is in violation thereof.




          2.20 Permits. The Company has all franchises, permits, licenses and any similar
authority necessary for the conduct of its business, the lack of which could reasonably be expected
to have a Material Adverse Effect. The Company is not in default in any material respect under any
of such franchises, permits, licenses or other similar authority.




          2.21 Corporate Documents. The Restated Certificate and Bylaws of the Company are in
the form provided to the Purchasers. The copy of the minute books of the Company provided to the
Purchasers contains minutes of all meetings of directors and stockholders and all actions by
written consent without a meeting by the directors and stockholders since the date of incorporation
and accurately reflects in all material respects all actions by the directors (and any committee of
directors) and stockholders with respect to all transactions referred to in such minutes.







12









 








          2.22 Real Property Holding Corporation. The Company is not now and has never been a
“United States real property holding corporation” as defined in the Code and any applicable
regulations promulgated thereunder. The Company has filed with the Internal Revenue Service all
statements, if any, with its United States income tax returns which are required under such
regulations.




          2.23 Environmental and Safety Laws. Except as could not reasonably be expected to
have a Material Adverse Effect (a) the Company is and has been in compliance with all Environmental
Laws; (b) there has been no release or, to the Company’s knowledge, threatened release of any
pollutant, contaminant or toxic or hazardous material, substance or waste, or petroleum or any
fraction thereof, (each a “Hazardous Substance”) on, upon, into or from any site currently or
heretofore owned, leased or otherwise used by the Company; (c) there have been no Hazardous
Substances generated by the Company that have been disposed of or come to rest at any site that has
been included in any published U.S. federal, state or local “superfund” site list or any other
similar list of hazardous or toxic waste sites published by any governmental authority in the
United States; and (d) there are no underground storage tanks located on, no polychlorinated
biphenyls (“PCBs”) or PCB-containing equipment used or stored on, and no hazardous waste as defined
by the Resource Conservation and Recovery Act, as amended, stored on, any site owned or operated by
the Company, except for the storage of hazardous waste in compliance with Environmental Laws. The
Company has made available to the Purchasers true and complete copies of all material environmental
records, reports, notifications, certificates of need, permits, pending permit applications,
correspondence, engineering studies, and environmental studies or assessments.




          For purposes of this Section 2.23, “Environmental Laws” means any law, regulation, or
other applicable requirement relating to (a) releases or threatened release of Hazardous Substance;
(b) pollution or protection of employee health or safety, public health or the environment; or (c)
the manufacture, handling, transport, use, treatment, storage, or disposal of Hazardous Substances.




          2.24 Qualified Small Business Stock. As of and immediately following the Initial
Closing: (i) the Company will be an eligible corporation as defined in Section 1202(e)(4) of the
Code, (ii) the Company will not have made purchases of its own stock described in Code Section
1202(c)(3)(B) during the one-year period preceding the Initial Closing, except for purchases that
are disregarded for such purposes under Treasury Regulation Section 1.1202-2 and (iii) the
Company’s aggregate gross assets, as defined by Code Section 1202(d)(2), at no time between its
incorporation and through the Initial Closing have exceeded $50 million, taking into account the
assets of any corporations required to be aggregated with the Company in accordance with Code
Section 1202(d)(3); provided, however, that in no event shall the Company be liable to the
Purchasers or any other party for any damages arising from any subsequently proven or identified
error in the Company’s determination with respect to the applicability or interpretation of Code
Section 1202, unless such determination shall have been given by the Company in a manner either
grossly negligent or fraudulent.




          2.25 Disclosure. The Company has made available to the Purchasers all the information
reasonably available to the Company that the Purchasers have requested for deciding whether to
acquire the Shares, including certain of the Company’s projections describing its






13









 







proposed business model (July 2011 spreadsheets) (the “Business Model”). No representation or
warranty of the Company contained in this Agreement, as qualified by the Disclosure Letter, and no
certificate furnished or to be furnished to the Purchasers at the Initial Closing contains any
untrue statement of a material fact or omits to state a material fact necessary in order to make
the statements contained herein or therein not misleading in light of the circumstances under which
they were made. The Business Model was prepared in good faith; however, the Company does not
warrant that it will achieve any results projected in the Business Model. It is understood that
this representation is qualified by the fact that the Company has not delivered to the Purchasers,
and has not been requested to deliver, a private placement or similar memorandum or any written
disclosure of the types of information customarily furnished to purchasers of securities.




     3. Representations and Warranties of the Purchasers. Each Purchaser hereby represents
and warrants to the Company, severally and not jointly, that:



          3.1 Authorization. The Purchaser has full power and authority to enter into the
Transaction Agreements. The Transaction Agreements to which such Purchaser is a party, when
executed and delivered by the Purchaser, will constitute valid and legally binding obligations of
the Purchaser, enforceable in accordance with their terms, except (a) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and any other laws of
general application affecting enforcement of creditors’ rights generally, and as limited by laws
relating to the availability of specific performance, injunctive relief, or other equitable
remedies, or (b) to the extent the indemnification provisions contained in the Investors’ Rights
Agreement may be limited by applicable federal or state securities laws.




          3.2 Purchase Entirely for Own Account. This Agreement is made with the Purchaser in
reliance upon the Purchaser’s representation to the Company, which by the Purchaser’s execution of
this Agreement, the Purchaser hereby confirms, that the Shares to be acquired by the Purchaser will
be acquired for investment for the Purchaser’s own account, not as a nominee or agent, and not with
a view to the resale or distribution of any part thereof, and that the Purchaser has no present
intention of selling, granting any participation in, or otherwise distributing the same. By
executing this Agreement, the Purchaser further represents that the Purchaser does not presently
have any contract, undertaking, agreement or arrangement with any Person to sell, transfer or grant
participations to such Person or to any third Person, with respect to any of the Shares. The
Purchaser has not been formed for the specific purpose of acquiring the Shares.




          3.3 Disclosure of Information. The Purchaser has had an opportunity to discuss the
Company’s business, management, financial affairs and the terms and conditions of the offering of
the Shares with the Company’s management and has had an opportunity to review the Company’s
facilities. The foregoing, however, does not limit or modify the representations and warranties of
the Company in Section 2 of this Agreement or the right of the Purchasers to rely thereon.




          3.4 Restricted Securities. The Purchaser understands that the Shares have not been,
and will not be, registered under the Securities Act, by reason of a specific exemption from the
registration provisions of the Securities Act which depends upon, among other things, the






14









 







bona fide nature of the investment intent and the accuracy of the Purchaser’s representations
as expressed herein. The Purchaser understands that the Shares are “restricted securities” under
applicable U.S. federal and state securities laws and that, pursuant to these laws, the Purchaser
must hold the Shares indefinitely unless they are registered with the Securities and Exchange
Commission and qualified by state authorities, or an exemption from such registration and
qualification requirements is available. The Purchaser acknowledges that the Company has no
obligation to register or qualify the Shares, or the Common Stock into which it may be converted,
for resale except as set forth in the Third Amended and Restated Investors’ Rights Agreement. The
Purchaser further acknowledges that if an exemption from registration or qualification is
available, it may be conditioned on various requirements including, but not limited to, the time
and manner of sale, the holding period for the Shares, and on requirements relating to the Company
which are outside of the Purchaser’s control, and which the Company is under no obligation and may
not be able to satisfy.




          3.5 No Public Market. The Purchaser understands that no public market now exists for
the Shares, and that the Company has made no assurances that a public market will ever exist for
the Shares.




          3.6 Legends. The Purchaser understands that the Shares and any securities issued in
respect of or exchange for the Shares, may bear one or all of the following legends:




               (a) “THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH,
THE SALE OR DISTRIBUTION THEREOF. NO SUCH TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.”



               (b) Any legend set forth in, or required by, the other Transaction Agreements.



               (c) Any legend required by the securities laws of any state to the extent such laws are
applicable to the Shares represented by the certificate so legended.



          3.7 Accredited Investor. The Purchaser is an accredited investor as defined in Rule
501(a) of Regulation D promulgated under the Securities Act.




          3.8 Foreign Investors. If the Purchaser is not a United States person (as defined by
Section 7701(a)(30) of the Code), such Purchaser hereby represents that it has satisfied itself as
to the full observance of the laws of its jurisdiction in connection with any invitation to
subscribe for the Shares or any use of this Agreement, including (i) the legal requirements within
its jurisdiction for the purchase of the Shares, (ii) any foreign exchange restrictions applicable
to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv)
the income tax and other tax consequences, if any, that may be relevant to the purchase, holding,
redemption, sale, or transfer of the Shares. Such Purchaser’s






15









 







subscription and payment for and continued beneficial ownership of the Shares will not violate
any applicable securities or other laws of the Purchaser’s jurisdiction.




          3.9 No General Solicitation. Neither the Purchaser, nor any of its officers,
directors, employees, agents, stockholders or partners has either directly or indirectly, including
through a broker or finder (a) engaged in any general solicitation, or (b) published any
advertisement in connection with the offer and sale of the Shares.




          3.10 Exculpation Among Purchasers. Each Purchaser acknowledges that it is not relying
upon any Person, other than the Company and its officers and directors, in making its investment or
decision to invest in the Company. Each Purchaser agrees that no Purchaser nor the respective
controlling Persons, officers, directors, partners, agents, or employees of any Purchaser shall be
liable to any other Purchaser for any action heretofore taken or omitted to be taken by any of them
in connection with the purchase of the Shares.




          3.11 Residence. If the Purchaser is an individual, then the Purchaser resides in the
state or province identified in the address of the Purchaser set forth on Exhibit A; if the
Purchaser is a partnership, corporation, limited liability company or other entity, then the office
or offices of the Purchaser in which its principal place of business is identified in the address
or addresses of the Purchaser set forth on Exhibit A.




          3.12 Bridge Note. If the Purchaser is a holder of that certain Convertible Promissory
Note made by the Company and dated May 31, 2011 (the “Bridge Note”), then such Purchaser hereby
acknowledges and agrees that (i) the issuance and sale for the Shares pursuant to this Agreement
shall constitute a “Qualified Financing” for purposes of Section 3 of the Bridge Note, and that
this Agreement constitutes such Purchaser’s election in writing to treat the issuance and sale of
the Shares as a “Qualified Financing” and (ii) together with the cash payment, if any, made by such
Purchaser at the Initial Closing, such Purchaser cancels, surrenders and exchanges the principal
amount of, and the accrued interest on, the Bridge Note held by such Purchaser for that number of
shares of Series C Preferred Stock set forth in the column designated “Initial Closing Shares”
opposite such Purchaser’s name on Exhibit A.




     4. Conditions to the Purchasers’ Obligations. The obligations of each Purchaser to
purchase Shares at each Closing are subject to the fulfillment, on or before such Closing, of each
of the following conditions, unless otherwise waived:



          4.1 Representations and Warranties. The representations and warranties of the Company
contained in Section 2 shall be true and correct in all material respects as of such Closing,
except that any such representations and warranties shall be true and correct in all respects where
such representation and warranty is qualified with respect to materiality.




          4.2 Performance. The Company shall have performed and complied with all covenants,
agreements, obligations and conditions contained in this Agreement that are required to be
performed or complied with by the Company on or before such Closing.




          4.3 Compliance Certificate. The Chief Executive Officer of the Company shall deliver
to the Purchasers at each Closing a certificate certifying that the conditions specified in
Sections 4.1 and 4.2 have been fulfilled.







16














 





          4.4 Qualifications. All authorizations, approvals or permits, if any, of any
governmental authority or regulatory body of the United States or of any state that are required in
connection with the lawful issuance and sale of the Shares pursuant to this Agreement shall be
obtained and effective as of such Closing.




          4.5 Board of Directors. As of the Initial Closing, the authorized size of the Board
shall be eight, and the Board shall be comprised of Jonathan Schulhof, Michael Schulhof, Stuart
Page, Matthew Gibbs, Jasbir Singh, Ganesh Kishore, Mark Puckett and John Clarke.




          4.6 Indemnification Agreements. The Company and each director designated by a
Purchaser (other than the Purchaser relying upon this condition to excuse such Purchaser’s
performance hereunder) shall have executed and delivered the Indemnification Agreements.




          4.7 Third Amended and Restated Investors’ Rights Agreement. The Company and each
Purchaser and the other stockholders of the Company named as parties thereto shall have executed
and delivered the Third Amended and Restated Investors’ Rights Agreement.




          4.8 Third Amended and Restated Right of First Refusal and Co-Sale Agreement. The
Company, each Purchaser, and the other stockholders of the Company named as parties thereto shall
have executed and delivered the Third Amended and Restated Right of First Refusal and Co-Sale
Agreement.




          4.9 Third Amended and Restated Voting Agreement. The Company, each Purchaser and the
other stockholders of the Company named as parties thereto shall have executed and delivered the
Third Amended and Restated Voting Agreement.




          4.10 Restated Certificate. The Company shall have filed the Restated Certificate with
the Secretary of State of Delaware on or prior to the Initial Closing, which shall continue to be
in full force and effect as of the Initial Closing.




          4.11 Secretary’s Certificate. The Secretary of the Company shall have delivered to
the Purchasers at the Initial Closing a certificate certifying (i) the Bylaws of the Company, (ii)
resolutions of the Board of Directors of the Company approving the Transaction Agreements and the
transactions contemplated under the Transaction Agreements, and (iii) resolutions of the
stockholders of the Company approving the Restated Certificate.




          4.12 Legal Opinion. The Purchasers shall have received the Legal Opinion, dated as of
the date of the Initial Closing.




          4.13 Proceedings and Documents. All corporate and other proceedings in connection
with the transactions contemplated at the Closing and all documents incident thereto shall be
reasonably satisfactory in form and substance to each Purchaser, and each Purchaser (or its
counsel) shall have received all such counterpart original and certified or other copies of such
documents as reasonably requested. Such documents may include good standing certificates.




          4.14 Minimum Initial Closing Proceeds. At the Initial Closing, the Company shall have
received an aggregate of at least $6,313,203.66 (exclusive of amounts advanced under the Bridge
Note) from the Purchasers.




17









 





     5. Conditions of the Company’s Obligations. The obligations of the Company to sell
Shares to the Purchasers at each Closing are subject to the fulfillment, on or before the Closing,
of each of the following conditions, unless otherwise waived:



          5.1 Representations and Warranties. The representations and warranties of each
Purchaser contained in Section 3 shall be true and correct in all material respects as of such
Closing.




          5.2 Performance. The Purchasers shall have performed and complied with all covenants,
agreements, obligations and conditions contained in this Agreement that are required to be
performed or complied with by them on or before such Closing.




          5.3 Qualifications. All authorizations, approvals or permits, if any, of any
governmental authority or regulatory body of the United States or of any state that are required in
connection with the lawful issuance and sale of the Share pursuant to this Agreement shall be
obtained and effective as of the Closing.




          5.4 Third Amended and Restated Investors’ Rights Agreement. Each Purchaser shall have
executed and delivered the Third Amended and Restated Investors’ Rights Agreement.




          5.5 Third Amended and Restated Right of First Refusal and Co-Sale Agreement. Each
Purchaser and the other stockholders of the Company named as parties thereto shall have executed
and delivered the Amended and Restated Right of First Refusal and Co-Sale Agreement.




          5.6 Third Amended and Restated Voting Agreement. Each Purchaser and the other
stockholders of the Company named as parties thereto shall have executed and delivered the Third
Amended and Restated Voting Agreement.




          5.7 Representation Letter. The Company shall have received a representation letter
from Gentry-Glori Energy Investment LLC and each individual that holds a direct or indirect
beneficial interest in Gentry-Glori Energy Investment LLC, in form and substance satisfactory to
the Company.




     6. Miscellaneous.



          6.1 Survival of Warranties. Unless otherwise set forth in this Agreement, the
representations and warranties of the Company and the Purchasers contained in or made pursuant to
this Agreement shall survive the execution and delivery of this Agreement and the Closing and shall
in no way be affected by any investigation or knowledge of the subject matter thereof made by or on
behalf of the Purchasers or the Company.




          6.2 Successors and Assigns. The terms and conditions of this Agreement shall inure to
the benefit of and be binding upon the respective successors and assigns of the parties. Nothing
in this Agreement, express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities
under or by reason of this Agreement, except as expressly provided in this Agreement.







18









 








          6.3 Governing Law. This Agreement and any controversy arising out of or relating to
this Agreement shall be governed by and construed in accordance with the General Corporation Law of
the State of Delaware as to matters within the scope thereof, and as to all other matters shall be
governed by and construed in accordance with the internal laws of the State of New York, without
regard to conflict of law principles that would result in the application of any law other than the
law of the State of New York.




          6.4 Counterparts; Facsimile. This Agreement may be executed and delivered by
facsimile signature and in two or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.




          6.5 Titles and Subtitles. The titles and subtitles used in this Agreement are used
for convenience only and are not to be considered in construing or interpreting this Agreement.




          6.6 Notices. All notices and other communications given or made pursuant to this
Agreement shall be in writing and shall be deemed effectively given: (a) upon personal delivery to
the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during
normal business hours of the recipient, and if not so confirmed, then on the next business day, (c)
five (5) days after having been sent by registered or certified mail, return receipt requested,
postage prepaid, or (d) one (1) business day after deposit with a nationally recognized overnight
courier, specifying next business day delivery, with written verification of receipt. All
communications shall be sent to the respective parties at their address as set forth on the
signature page or Exhibit A, or to such e-mail address, facsimile number or address as
subsequently modified by written notice given in accordance with this Section 6.6. If notice is
given to the Company, a copy shall also be sent to Fulbright & Jaworski L.L.P., Fulbright Tower,
1301 McKinney, Suite 5100, Houston, Texas, 77010-3095, Attn: Charles D. Powell and if notice is
given to the Purchasers, a copy shall also be given to Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C., One Financial Center, Boston, Massachusetts, Attn: Lewis Geffen. In the case of
Rawoz, a copy of the notice shall also be sent to Mr. K S Cheema, Executive Director (Legal &
Projects), Omar Zawawi Establishment LLC at Post Box 879, Postal Code 100, Muscat, Oman, e-mail
k.s.cheema@omzest.com / Fax No. 00968-24738454.




          6.7 No Finder’s Fees. Except as set forth in the Disclosure Letter, each party
represents that it neither is nor will be obligated for any finder’s fee or commission in
connection with this transaction. Each Purchaser agrees to indemnify and to hold harmless the
Company from any liability for any commission or compensation in the nature of a finder’s or
broker’s fee arising out of this transaction (and the costs and expenses of defending against such
liability or asserted liability) for which each Purchaser or any of its officers, employees, or
representatives is responsible. The Company agrees to indemnify and hold harmless each Purchaser
from any liability for any commission or compensation in the nature of a finder’s or broker’s fee
arising out of this transaction (and the costs and expenses of defending against such liability or
asserted liability) for which the Company or any of its officers, employees or representatives is
responsible.




          6.8 Fees and Expenses. At the Closing, the Company shall pay (i) up to $35,000 in
reasonable costs and out-of-pocket expenses of Gentry-Glori Energy Investment LLC






19









 







and (ii) the reasonable fees and out-of-pocket expenses of Mintz, Levin, Cohn, Ferris, Glovsky
and Popeo, P.C., counsel for the Purchasers.




          6.9 Attorney’s Fees. If any action at law or in equity (including arbitration) is
necessary to enforce or interpret the terms of any of the Transaction Agreements, the prevailing
party shall be entitled to reasonable attorney’s fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.




          6.10 Amendments and Waivers. Any term of this Agreement may be amended, terminated or
waived only with the written consent of the Company and the holders of at least sixty-six and two
thirds percent (66-2/3%) of the voting power of the Series C Preferred Stock. Any amendment or
waiver effected in accordance with this Section 6.10 shall be binding upon the Purchasers and each
transferee of the Shares (or the Common Stock issuable upon conversion thereof), each future holder
of all such securities, and the Company.




          6.11 Severability. The invalidity or unenforceability of any provision hereof shall
in no way affect the validity or enforceability of any other provision.




          6.12 Delays or Omissions. No delay or omission to exercise any right, power or remedy
accruing to any party under this Agreement, upon any breach or default of any other party under
this Agreement, shall impair any such right, power or remedy of such non-breaching or
non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any
waiver of any single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any party of any breach or default under this Agreement, or any waiver on
the part of any party of any provisions or conditions of this Agreement, must be in writing and
shall be effective only to the extent specifically set forth in such writing. All remedies, either
under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not
alternative.




          6.13 Entire Agreement. This Agreement (including the Exhibits hereto), the Restated
Certificate and the other Transaction Agreements constitute the full and entire understanding and
agreement between the parties with respect to the subject matter hereof, and any other written or
oral agreement relating to the subject matter hereof existing between the parties are expressly
canceled.




          6.14 Dispute Resolution. Any unresolved controversy or claim arising out of or
relating to this Agreement, except (i) as otherwise provided in this Agreement, or (ii) for any
such controversies or claims arising out of either party’s intellectual property rights for which a
provisional remedy or equitable relief is sought, shall be submitted to arbitration by one
arbitrator mutually agreed upon by the parties, and if no agreement can be reached within thirty
(30) days, then by one arbitrator having reasonable experience in corporate finance transactions of
the type provided for in this Agreement and who is chosen by the American Arbitration Association
(the “AAA”). The arbitration shall take place in the city in Houston, Texas (unless otherwise
agreed to in writing by the parties to the arbitration), in accordance with the AAA rules then in
effect, and judgment upon any award rendered in such arbitration will be binding






20









 







and may be entered in any court having jurisdiction thereof. There shall be limited discovery
prior to the arbitration hearing as follows: (a) exchange of witness lists and copies of
documentary evidence and documents relating to or arising out of the issues to be arbitrated, (b)
depositions of all party witnesses and (c) such other depositions as may be allowed by the
arbitrators upon a showing of good cause. Depositions shall be conducted in accordance with the
New York Code of Civil Procedure, the arbitrator shall be required to provide in writing to the
parties the basis for the award or order of such arbitrator, and a court reporter shall record all
hearings, with such record constituting the official transcript of such proceedings. The
prevailing party shall be entitled to reasonable attorney’s fees, costs, and necessary
disbursements in addition to any other relief to which such party may be entitled.




          6.15 Indemnification.




               (a) In consideration of each Purchaser’s execution and delivery of this Agreement and
fulfillment of its, his or her obligations hereunder, and in addition to all of the Company’s other
obligations under this Agreement, the Company shall defend, protect, indemnify and hold harmless
each Purchaser and each Purchaser’s affiliates, officers, directors, employees and agents
(including, without limitation, those retained in connection with the transactions contemplated by
this Agreement) (collectively, the “Indemnitees”) from and against any and all actions, causes of
action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses
(including, without limitation, costs of suit and reasonable attorneys’ fees and expenses) in
connection therewith (irrespective of whether any such Indemnitee is a party to the action for
which indemnification hereunder is sought) (the “Indemnified Liabilities”), incurred by the
Indemnitees or any of them as a result of, or arising out of, or relating to any breach of any
representation, warranty, covenant or agreement made by the Company herein. Notwithstanding the
foregoing, the Company shall have no obligation to defend, protect, indemnify and hold harmless
under this Section 6.15(a) the Indemnitees with respect to Indemnified Liabilities to the
extent resulting from or arising out of the negligence or willful misconduct of any Indemnitee.
Subject to Section 6.15(b), the Company shall reimburse the Indemnitees for the Indemnified
Liabilities as such Indemnified Liabilities are incurred. To the extent that the foregoing
undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum
contribution to the payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law.



               (b) In connection with the obligation of the Company to indemnify for expenses as set forth in
Section 6.15(a) above, the Company shall, upon presentation of appropriate invoices
containing reasonable detail, reimburse each Indemnitee for all such Indemnified Liabilities as
they are incurred by such Indemnitee; provided, however, that if such Indemnified Liabilities are
incurred pursuant to a cause of action initiated by an Indemnitee against the Company, between the
Company and such Indemnitee, such Indemnified Liabilities shall be reimbursed by the Company upon
the final determination by a court of competent jurisdiction that the Company has breached a
representation, warranty, covenant or agreement made by the Company herein.



               (c) The obligations of the Company in respect of a claim for indemnification or any other
claim related to this Agreement shall not include any consequential or punitive damages.
Notwithstanding anything to the contrary contained in this Agreement, the



21









 




Company’s total liability to any Indemnitee under this Section 6.15 or otherwise out of any
transaction contemplated herein shall not exceed the amounts actually paid to the Company by such
Indemnitee for Shares pursuant to this Agreement.




          6.16 No Commitment for Additional Financing. The Company acknowledges and agrees that
no Purchaser has made any representation, undertaking, commitment or agreement to provide or assist
the Company in obtaining any financing, investment or other assistance, other than the purchase of
the Shares as set forth herein and subject to the conditions set forth herein. In addition, the
Company acknowledges and agrees that (i) no statements, whether written or oral, made by any
Purchaser or its representatives on or after the date of this Agreement shall create an obligation,
commitment or agreement to provide or assist the Company in obtaining any financing or investment,
(ii) the Company shall not rely on any such statement by any Purchaser or its representatives and
(iii) an obligation, commitment or agreement to provide or assist the Company in obtaining any
financing or investment may only be created by a written agreement, signed by such Purchaser and
the Company, setting forth the terms and conditions of such financing or investment and stating
that the parties intend for such writing to be a binding obligation or agreement. Each Purchaser
shall have the right, in it sole and absolute discretion, to refuse or decline to participate in
any other financing of or investment in the Company, and shall have no obligation to assist or
cooperate with the Company in obtaining any financing, investment or other assistance.




[Signature Page Follows]






22









 








     IN WITNESS WHEREOF, the parties have executed this Preferred Stock Purchase Agreement as of
the date first written above.



	 	 	 	 	 	 	 

	 	 	GLORI ENERGY INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Stuart Page
 

Stuart Page, President and Chief Executive
Officer
	 	 
	 
	 	 	 	 	 	 
	 	 	Address: 4315 South Drive	 	 
	 

	 	 	 	         Houston, TX 77053	 	 






[SIGNATURE PAGE TO GLORI ENERGY INC.

SERIES C PREFERRED STOCK PURCHASE AGREEMENT]







 









 








	 	 	 	 	 	 	 

	 	 	GENTRY-GLORI ENERGY INVESTMENT LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Larry Aschebrook
 

Larry Aschebrook
	 	 
	 

	 	Title:
	 	Managing Member	 	 






[SIGNATURE PAGE TO GLORI ENERGY INC.

SERIES C PREFERRED STOCK PURCHASE AGREEMENT]









 









 








	 	 	 	 	 	 	 

	 	 	KPCB HOLDINGS, INC., AS NOMINEE	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Eric Keller
 

Eric Keller
	 	 
	 

	 	Title:
	 	President	 	 






[SIGNATURE PAGE TO GLORI ENERGY INC.

SERIES C PREFERRED STOCK PURCHASE AGREEMENT]











 









 








	 	 	 	 	 	 	 

	 	 	OXFORD BIOSCIENCE PARTNERS V L.P.	 	 
	 

	 	By:
	 	OBP Management V L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Matthew A. Gibbs
 

	 	 
	 

	 	 	 	Matthew A. Gibbs – General Partner	 	 
	 
	 	 	 	 	 	 
	 	 	mRNA FUND V L.P.	 	 
	 

	 	By:
	 	OBP Management V L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Matthew A. Gibbs
 

	 	 
	 

	 	 	 	Matthew A. Gibbs – General Partner	 	 






[SIGNATURE PAGE TO GLORI ENERGY INC.

SERIES C PREFERRED STOCK PURCHASE AGREEMENT]







 









 








	 	 	 	 	 	 	 

	 	 	MALAYSIAN LIFE SCIENCES CAPITAL FUND LTD.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Malaysian Life Sciences Capital Fund	 	 
	 

	 	 	 	Management Company Ltd, its Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Dr. Roger Earl Wyse
 

	 	 
	 

	 	 	 	Dr. Roger Earl Wyse, Co-Chairman	 	 






[SIGNATURE PAGE TO GLORI ENERGY INC.

SERIES C PREFERRED STOCK PURCHASE AGREEMENT]








 









 








	 	 	 	 	 	 	 

	 	 	ENERGY TECHNOLOGY VENTURES, LLC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Kevin Skillern
 

	 	 
	 

	 	Name:
	 	Kevin Skillern	 	 
	 

	 	Title:
	 	Managing Director	 	 






[SIGNATURE PAGE TO GLORI ENERGY INC.

SERIES C PREFERRED STOCK PURCHASE AGREEMENT]







 









 








SCHEDULES AND EXHIBITS




	 	 	 	 	 	 	 

	Exhibit A

	 	—
	 	Schedule of Purchasers	 	 
	 
	 	 	 	 	 	 
	Exhibit B

	 	—
	 	Form of Amended and Restated Certificate of Incorporation
	 	 






 









 






EXHIBIT A




SCHEDULE OF PURCHASERS



Initial Closing — December 30, 2011




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Aggregate	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Purchase Price	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	for Initial	 	 	Total Initial	 
	Investor	 	Cash	 	 	Surrendered Debt	 	 	Closing	 	 	Closing Shares	 
	Oxford Bioscience Partners V L.P.
	 	$	1,466,939.34	 	 	 	N/A	 	 	$	1,466,939.34	 	 	 	535,184	 
	222 Berkeley St, Suite 1960

Boston, MA 02116
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	mRNA Fund V L.P.
	 	$	33,059.20	 	 	 	N/A	 	 	$	33,059.20	 	 	 	12,061	 
	222 Berkeley St, Suite 1960

Boston, MA 02116
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Malaysian Life Sciences Capital
	 	$	1,999,998.06	 	 	 	N/A	 	 	$	1,999,998.06	 	 	 	729,660	 
	Fund Ltd.

c/o Burrill & Company

One Embarcadero Center, Suite

2700

San Francisco, CA 94111

Attn: Greg Young
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	KPCB Holdings, Inc. as nominee
	 	$	499,999.52	 	 	 	N/A	 	 	$	499,999.52	 	 	 	182,415	 
	2750 Sand Hill Road

Menlo Park, CA 94025

Attention:

Randy Komisar

Trae Vassallo

John Denniston
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 







 









 






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Aggregate	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Purchase Price	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	for Initial	 	 	Total Initial	 
	Investor	 	Cash	 	 	Surrendered Debt	 	 	Closing	 	 	Closing Shares	 
	Energy Technology Ventures, LLC
	 	 	 	 	 	Principal1 = $1,500,000	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	c/o GE Capital, Equity

Attn: Account Manager, Equity

	 	 	 	 	 	Interest2 =  $70,027.40	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	201 Merritt 7 

Norwalk, CT 06851
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	With a copy to:
	 	 	N/A	 	 	 	 	 	 	$	1,570,027.40	 	 	 	572,793	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	c/o GE Energy Financial Services
	 	 	 	 	 	Total Amount3 =	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Attn: Portfolio Manager, VC

	 	 	 	 	 	$	1,570,027.40	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	800 Long Ridge Road

Stanford, CT 06927

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Gentry-Glori Energy Investment
	 	$	2,313,207.54	 	 	 	N/A	 	 	$	2,313,207.54	 	 	 	843,928	 
	LLC

c/o Gentry Financial Partners

205 N. Michigan Ave., Suite 3770

Chicago, IL 60601

Attn: Thomas B. Raterman

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total:
	 	$	6,313,203.66	 	 	$	1,570,027.40	 	 	$	7,883,231.06	 	 	 	2,876,041	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 









 




			
	1	 	Principal amount of Bridge Note.
	 
	2	 	Amount of accrued but unpaid interest through
Initial Closing.
	 
	3	 	Total of Principal and accrued interest surrendered
in exchange for Series C Preferred Stock.




 









 










EXHIBIT B




FORM OF AMENDED AND RESTATED CERTIFICATE OF INCORPORATION



[See attached.]