Exhibit 10.1
 
PowerVerde, Inc.
23429 NE 35th Drive
Glendale, Arizona 85310
Tel. (623) 780-3321
www.powerverdeenergy.com

November 1, 2011

Bryce Johnson
Paul Kelly
Cornerstone Conservation Group LLC
13237 North 76th Place
Scottsdale, AZ 85260

 
Re:
Binding Letter of Intent for Acquisition

Dear Sirs:

This Binding Letter of Intent sets forth the basic terms and conditions of the
transaction (the “Acquisition”) whereby PowerVerde, Inc. (“PowerVerde”) will
acquire from Bryce Johnson (“Johnson”), Paul Kelly (“Kelly”) and Vince Hils
(“Hils”) (“Sellers”) 100% of the membership interests in Cornerstone
Conservation Group LLC, an Arizona limited liability company (the “Company”) and
(ii) as a result of the Acquisition, PowerVerde will indirectly own all of the
Company’s intellectual property described on Exhibit ”A” attached hereto.

1.           Purchase of Interests. At the closing of the Acquisition (the
“Closing”), which shall take place within 30 days after the execution of this
Letter of Intent, subject to the terms and conditions set forth herein, the
Sellers shall sell, assign and transfer to PowerVerde 100% of the membership
interests in the Company (the “Interests”), free and clear of any and all liens,
claims and encumbrances. Sellers represent and warrant that they are the only
members of the Company.

2.           Consideration. As payment and consideration for the Interests, the
following will occur:

(a)           At Closing, PowerVerde will issue 2,260,000 shares of its common
stock to Sellers and their affiliates as follows:

 
(i)
1,575,000 shares to Johnson or a trust designated by him;

 
(ii)
337,500 shares to Kelly;

(iii)         337,500 shares to Vince Hils; and

 
(iii)
10,000 shares to Paul Smith.

 
 
 

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Bryce Johnson

Paul Kelly

Cornerstone Conservation Group LLC

November 1, 2011

Page 2 of 6
 
(b)           At Closing, PowerVerde will issue fully vested three–year warrants
to purchase an aggregate of 300,000 shares of PowerVerde common stock as
follows:

 
(i)
50,000 shares to Johnson at an exercise price of $2.00 per share, exercisable
beginning 1/1/12;

 
(ii)
50,000 shares to Kelly at an exercise price of $2.00 per share, exercisable
beginning 1/1/12;

 
(iii)
50,000 shares to Johnson at an exercise price of $3.00 per share, exercisable
beginning 7/1/12;

 
(iv)
50,000 shares to Kelly at an exercise price of $3.00 per share, exercisable
beginning 7/1/12;

 
(v)
50,000 shares to Johnson at an exercise price of $4.00 per share, exercisable
beginning 1/1/13; and

 
(vi)
50,000 shares to Kelly at an exercise price of $4.00 per share, exercisable
beginning 1/1/13.

(c)           Until the close of business in Phoenix, Arizona, on December 31,
2011 (the “Initial Period”), Sellers shall provide to PowerVerde and/or the
Company at no charge such part-time consulting services as PowerVerde shall
reasonably request, including, but not limited to, services relating to (i)
further development of the Company’s combined cooling, heating and power
(“CCHP”) systems, (ii) national and international distribution of CCHP systems,
(iii) development of geothermal hybrid systems and advance cooling tower
assisted systems and (iv) improvement and application of PowerVerde’s waste heat
systems. After the Initial Period, the parties shall negotiate in good faith
appropriate compensation/service agreements for Sellers’ further services,
subject to mutual approval, which shall not be unreasonably withheld.

(d)           Immediately upon execution of this Letter of Intent, Johnson shall
be appointed to PowerVerde’s Board of Directors. Kelly shall be appointed to
PowerVerde’s Board of Directors within six months following execution of this
Letter of Intent.

3.           Definitive Document. The parties will, within 30 days after
execution of this Binding LOI, execute definitive documentation reflecting the
transactions contemplated hereby (collectively, the “Transaction”), including,
but not limited to, a membership interest purchase agreement, on terms as
materially outlined in this Binding LOI (collectively, the “Definitive
Document”), which terms shall be reasonably satisfactory to PowerVerde and
Sellers and their respective counsel and which shall include representations,
warranties, agreements, covenants, conditions and indemnities customary for
negotiated transactions of this type, including, but not limited to, provisions
protecting the Company’s intellectual property.
 
 
 

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Bryce Johnson
Paul Kelly
Cornerstone Conservation Group LLC
November 1, 2011
Page 3 of 6
 
4.           Confidentiality. Subject to Section 5 below, the parties shall
maintain the strict confidentiality of (i) all information exchanged in
connection with the proposed Transaction and (ii) all proprietary information
relating to the Company, PowerVerde and their respective businesses.

5.           Publicity. Neither PowerVerde, the Sellers nor the Company will
make any public announcement concerning this letter of intent, the discussions
between Sellers, PowerVerde and the Company or any other matter relating to the
proposed Transaction without the consent of the other party; provided, however,
that, after consultation with the other party, either may make disclosure if
such party is advised by its counsel that such disclosure is required by
applicable law, including applicable U.S. securities laws. Except as permitted
by the preceding sentence, neither the Company, PowerVerde, Sellers nor any of
their respective affiliates, directors, shareholders, members, managers,
officers, employees, counsel, accountants, financial advisors or other agents
will disclose the existence or terms of this letter of intent or that
PowerVerde, Sellers and the Company are holding discussions with any person
other than the respective legal, accounting and financial advisors of the
Company, Sellers or PowerVerde who have a need to know such information solely
for the purpose of assisting such party in connection with the proposed
Acquisition.

6.           Termination. This letter of intent shall automatically terminate
upon the execution of the Definitive Document, or earlier:

 
(a)
by the mutual written consent of PowerVerde and Sellers;

 
(b)
by either PowerVerde or Sellers, acting reasonably and in good faith, if the
Definitive Document has not been executed on or before December 31, 2011;

 
(c)
by Sellers, if PowerVerde has materially breached any of its obligations
hereunder; or

 
(d)
by PowerVerde, if Sellers have materially breached any of their obligations
hereunder.

7.           Expenses. Each of PowerVerde and Sellers will bear their own
expenses incurred in connection with the investigation, negotiation,
documentation and/or the closing of the Transaction, including all fees and
disbursements of each party’s respective counsel, accountants, financial
advisors, finders, and consultants. The Company shall not pay Sellers’ expenses.
 
 
 

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Bryce Johnson
Paul Kelly
Cornerstone Conservation Group LLC
November 1, 2011
Page 4 of 6
 
8.           Brokers. The parties represent and warrant that there are no
brokers, salespersons or finders involved in this transaction. The parties agree
to defend, indemnify and hold each other harmless from and against any and all
expense, costs, damage or liability (including, without limitation, court costs
and actual reasonable attorney fees, in preparation for and at any arbitration
proceeding, trial and/or appeal) resulting from the claims for any brokerage
fees or similar commissions asserted by brokers, salespersons or finders
claiming by, through or under the indemnifying party.

9.           Miscellaneous. This Binding LOI (a) shall be governed by, and
construed in accordance with, the internal laws of the State of Florida, USA,
without regard to the conflicts of laws principles of such state; (b) may not be
amended or terminated nor may compliance with any provision of this letter of
intent be waived except pursuant to a written agreement signed by both parties;
and (c) may be signed in counterparts, each of which shall constitute one and
the same instrument. The captions used in this letter of intent are for
convenience only and shall not affect the interpretation of this letter of
intent.

10.           Exclusive Dealing. From the date hereof until the Termination Date
Sellers and the Company will not, directly or indirectly, through any
representative or otherwise, solicit or entertain offers from, negotiate with or
in any manner encourage, discuss, accept, or consider any proposal of any other
person relating to the direct or indirect sale of the equity or assets of the
Company.

11.           Legally Binding. This letter of intent is legally binding on the
parties hereto. Each party represents and warrants that such party has all
requisite authority to execute and deliver this Binding LOI and to perform all
obligations of such party set forth herein or contemplated hereby.

12.           Equitable Relief. Each party agrees that (a) any breach of the
obligation to consummate the transactions contemplated by this Binding LOI as
contemplated hereby will result in irreparable injury to the other party to this
Binding LOI for which a remedy at law would be inadequate, and (b) in addition
to any relief at law that may be available to a party for such breach and
regardless of any other provision contained in this Binding LOI, each party
shall be entitled to injunctive and other equitable relief as a court may grant,
without the need to post a bond. This Section 12 shall not be construed to limit
a party’s right to obtain equitable relief for other breaches of this Binding
LOI under general equitable standards
 
 
 

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Bryce Johnson
Paul Kelly
Cornerstone Conservation Group LLC
November 1, 2011
Page 5 of 6
 
Please confirm your agreement to the foregoing terms and conditions by signing
in the space provided below and sending the fully executed letter of intent to
me by fax or pdf, with the original to follow by courier.
 

 
Sincerely,
       
POWERVERDE, INC.
       
By:
/s/ Richard H. Davis
 
Name: Richard H. Davis
 
Its: CEO

 
AGREED AND ACCEPTED
 
this 1st day of November, 2011.
       
By:
/s/ Bryce Johnson
   
Bryce Johnson
       
By:
/s/ Paul Kelly
   
Paul Kelly
       
By:
/s/ Vince Hils
   
Vince Hils
 

 
 
 

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Bryce Johnson
Paul Kelly
Cornerstone Conservation Group LLC
November 1, 2011
Page 6 of 6
 
EXHIBIT “A”

INTELLECTUAL PROPERTY

U.S. Patent Application No. 12/749,416 filed on March 29, 2010, entitled “Solar
Photovoltaic Closed Fluid Loop Evaporative Tower,” and related intellectual
property.

 
 

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