Document:

Exhibit 10.1

 

EXHIBIT 10.1

AGREEMENT AND PLAN OF MERGER

among

VYREX CORPORATION,

VYREX ACQUISITION CORPORATION

and

POWERVERDE, INC.

February
11, 2008

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	PAGE	 
	1. The Merger
	 	 	1	 
	1.1 Merger
	 	 	1	 
	1.2 Effective Time
	 	 	1	 
	1.3 Certificate of Incorporation; By-laws; Directors and Officers; Parent Name Change
	 	 	2	 
	1.4 Assets and Liabilities
	 	 	2	 
	1.5 Manner and Basis of Converting Shares
	 	 	2	 
	1.6 Surrender and Exchange of Certificates
	 	 	3	 
	1.7 Parent Common Stock
	 	 	3	 
	 
	 	 	 	 
	2. Representations and Warranties of the Company
	 	 	4	 
	2.1 Organization, Standing, Subsidiaries, Etc.
	 	 	4	 
	2.2 Qualification
	 	 	4	 
	2.3 Capitalization of the Company
	 	 	4	 
	2.4 Company Stockholders
	 	 	4	 
	2.5 Corporate Acts and Proceedings
	 	 	4	 
	2.6 Compliance with Laws and Instruments
	 	 	5	 
	2.7 Binding Obligations
	 	 	5	 
	2.8 Broker’s and Finder’s Fees
	 	 	5	 
	2.9 Financial Statements
	 	 	5	 
	2.10 Absence of Undisclosed Liabilities
	 	 	5	 
	2.11 Changes
	 	 	6	 
	2.12 Tax Returns and Audits
	 	 	6	 
	2.13 Employee Benefit Plans; ERISA
	 	 	7	 
	2.14 Title to Property and Encumbrances
	 	 	7	 
	2.15 Litigation
	 	 	7	 
	2.16 Patents, Trademarks, Etc.
	 	 	7	 
	2.17 Interested Party Transactions
	 	 	8	 
	2.18 Questionable Payments
	 	 	8	 
	2.19 Obligations to or by Stockholders
	 	 	8	 
	2.20 Assets and Contracts
	 	 	8	 
	2.21 Employees
	 	 	9	 
	2.22 Disclosure
	 	 	9	 
	 
	 	 	 	 
	3. Representations and Warranties of Parent and Acquisition Corp.
	 	 	9	 
	3.1 Organization and Standing
	 	 	9	 
	3.2 Corporate Authority
	 	 	10	 
	3.3 Broker’s and Finder’s Fees
	 	 	10	 
	3.4 Capitalization of Parent
	 	 	10	 
	3.5 Acquisition Corp
	 	 	11	 
	3.6 Validity of Shares
	 	 	11	 
	3.7 SEC Reporting and Compliance
	 	 	11	 
	3.8 Financial Statements
	 	 	12	 
	3.9 Governmental Consents

	 	 	12	 

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	 	 	PAGE	 
	3.10 Compliance with Laws and Instruments
	 	 	12	 
	3.11 No General Solicitation
	 	 	12	 
	3.12 Binding Obligations
	 	 	13	 
	3.13 Absence of Undisclosed Liabilities
	 	 	13	 
	3.14 Changes
	 	 	13	 
	3.15 Tax Returns and Audits
	 	 	14	 
	3.16 Employee Benefit Plans; ERISA
	 	 	14	 
	3.17 Litigation
	 	 	15	 
	3.18 Interested Party Transactions
	 	 	15	 
	3.19 Questionable Payments
	 	 	15	 
	3.20 Obligations to or by Stockholders
	 	 	15	 
	3.21 Assets and Contracts
	 	 	15	 
	3.22 Employees
	 	 	16	 
	3.23 Patents, Trademarks, Etc.
	 	 	16	 
	3.24 Disclosure
	 	 	17	 
	 
	 	 	 	 
	4. Investment Letter
	 	 	17	 
	 
	 	 	 	 
	5. Conduct of Businesses Pending the Merger
	 	 	17	 
	5.1 Conduct of Business by the Company Pending the Merger
	 	 	17	 
	5.2 Conduct of Business by Parent and Acquisition Corp. Pending the Merger
	 	 	18	 
	 
	 	 	 	 
	6. Additional Agreements
	 	 	19	 
	6.1 Access and Information
	 	 	19	 
	6.2 Additional Agreements
	 	 	19	 
	6.3 Publicity
	 	 	20	 
	6.4 Appointment of Officers and Directors
	 	 	20	 
	6.5 Stock Incentive Plan
	 	 	20	 
	6.6 Additional Parent Actions
	 	 	20	 
	6.7 Payment of Parent Liabilities
	 	 	20	 
	6.8 Indemnity Agreements
	 	 	20	 
	6.9 Post-Closing Audit and Filing Expenses
	 	 	20	 
	6.10 Parent Post-Closing Capitalization Table
	 	 	21	 
	 
	 	 	 	 
	7. Conditions of Parties’ Obligations
	 	 	21	 
	7.1 Company Obligations
	 	 	21	 
	7.2 Parent and Acquisition Corp. Obligations
	 	 	22	 
	 
	 	 	 	 
	8. Survival of Representations and Warranties
	 	 	23	 
	 
	 	 	 	 
	9. Amendment of Agreement
	 	 	24	 
	 
	 	 	 	 
	10. Definitions
	 	 	24	 
	 
	 	 	 	 
	11. Closing
	 	 	28	 
	 
	 	 	 	 
	12. Termination Prior to and After Closing
	 	 	28	 
	12.1 Termination of Agreement
	 	 	28	 
	12.2 Termination of Obligations
	 	 	28	 
	 
	 	 	 	 
	13. Miscellaneous
	 	 	28	 
	13.1 Notices
	 	 	28	 

ii

 

	 	 	 	 	 
	 	 	PAGE	 
	13.2 Entire Agreement
	 	 	29	 
	13.3 Expenses
	 	 	29	 
	13.4 Time
	 	 	29	 
	13.5 Severability
	 	 	29	 
	13.6 Successors and Assigns
	 	 	29	 
	13.7 No Third Parties Benefited
	 	 	30	 
	13.8 Counterparts; Signature by Facsimile
	 	 	30	 
	13.9 Governing Law
	 	 	30	 
	13.10 Venue; Submission to Jurisdiction
	 	 	30	 

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LIST OF EXHIBITS AND SCHEDULES

Exhibits

	 	 	 
	A

	 	Certificate of Merger
	B

	 	Directors and Officers of the Surviving Corporation
	C

	 	Parent Post Closing Capitalization Table

Company Disclosure Schedules

	 	 	 
	2.4

	 	Company Stockholders
	2.9

	 	Financial Statements
	2.11

	 	Company Changes/Indebtedness
	2.13

	 	Schedule of Employee Benefit Plans
	2.15

	 	Litigation
	2.16

	 	Company Patents, Trademarks, Etc.
	2.17

	 	Company Interested Party Transactions
	2.20

	 	Company Assets and Contracts

Parent Disclosure Schedules

	 	 	 
	3.4

	 	Capitalization of Parent
	3.14

	 	Parent Changes/Indebtedness
	3.21

	 	Parent Assets and Contracts
	6.7

	 	Parent Debt

iv

 

 

AGREEMENT AND PLAN OF MERGER

     THIS
AGREEMENT AND PLAN OF MERGER is made and entered into as of February 11, 2008, by and
among VYREX CORPORATION, a Delaware corporation (“Parent”), VYREX ACQUISITION CORPORATION, a
Delaware corporation and wholly-owned subsidiary of Parent (“Acquisition Corp.”), and POWERVERDE,
INC., a Delaware corporation (the “Company”).

W I T N E S S E T H:

     WHEREAS, the Board of Directors of each of Acquisition Corp., Parent and the Company have each
determined that it is fair to and in the best interests of their respective corporations and
shareholders for Acquisition Corp. to be merged with and into the Company (the “Merger”) upon the
terms and subject to the conditions set forth herein;

     WHEREAS, the Board of Directors of Acquisition Corp. and the Board of Directors of the Company
have approved the Merger in accordance with the General Corporation Law of the State of Delaware
(the “DGCL”), and upon the terms and subject to the conditions set forth herein and in the
Certificate of Merger (the “Certificate of Merger”) attached as Exhibit “A” hereto; and the Board
of Directors of Parent has also approved this Agreement and the Certificate of Merger; and

     WHEREAS, the requisite Stockholders (as such term is defined in Section 10 hereof) have
approved, by written consent pursuant to Sections 228 and 251 of the DGCL, this Agreement and the
Certificate of Merger and the transactions contemplated hereby and thereby, including without
limitation, the Merger, and Parent, as the sole stockholder of Acquisition Corp., has approved this
Agreement, the Certificate of Merger and the transactions contemplated and described hereby and
thereby, including without limitation, the Merger.

     NOW, THEREFORE, in consideration of the mutual agreements and covenants hereinafter set forth,
the parties hereto agree as follows:

     1. The Merger.

          1.1 Merger. Subject to the terms and conditions of this Agreement and the Certificate of
Merger, Acquisition Corp. shall be merged with and into the Company in accordance with Section 251
of the DGCL. At the Effective Time (as hereinafter defined), the separate legal existence of
Acquisition Corp. shall cease, and the Company shall be the surviving corporation in the Merger
(sometimes hereinafter referred to as the “Surviving Corporation”) and shall continue its corporate
existence under the laws of the State of Delaware under the name PowerVerde, Inc.

          1.2 Effective Time. The Merger shall become effective on the date and at the time the
Certificate of Merger is filed with the Secretary of State of the State of Delaware in accordance
with Section 251 of the DGCL. The time at which the Merger shall become effective as aforesaid is
referred to hereinafter as the “Effective Time.”

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          1.3 Certificate of Incorporation; By-laws, Directors and Officers; Parent Name Change.

               (a) The Certificate of Incorporation of the Company, as in effect immediately prior to the
Effective Time, shall be the Certificate of Incorporation of the Surviving Corporation from and
after the Effective Time until further amended in accordance with applicable law.

               (b) The By-laws of the Company, as in effect immediately prior to the Effective Time, shall be
the By-laws of the Surviving Corporation from and after the Effective Time until amended in
accordance with applicable law, the Certificate of Incorporation of the Surviving Corporation and
such By-laws.

               (c) The directors and officers listed in Exhibit “B” hereto shall be the
directors and
officers of the Surviving Corporation and the Parent, and each shall hold his respective office or
offices from and after the Effective Time (except, in the case of directors, as described in
Section 6.4) until his successor shall have been elected and shall have qualified in accordance
with applicable law, or as otherwise provided in the Certificate of Incorporation or By-laws of the
Surviving Corporation.

               (d) As soon as practicable following the Effective Time, the Parent shall file a certificate
of amendment to its certificate of incorporation changing its name to PowerVerde Solar Corporation.

          1.4 Assets and Liabilities. At the Effective Time, the Surviving Corporation shall possess all
the rights, privileges, powers and franchises of a public as well as of a private nature, and be
subject to all the restrictions, disabilities and duties of each of Acquisition Corp. and the
Company (collectively, the “Constituent Corporations”); and all the rights, privileges, powers and
franchises of each of the Constituent Corporations, and all property, real, personal and mixed, and
all debts due to any of the Constituent Corporations on whatever account, as well for stock
subscriptions as all other things in action or belonging to each of the Constituent Corporations,
shall be vested in the Surviving Corporation; and all property, rights, privileges, powers and
franchises, and all and every other interest shall be thereafter as effectively the property of the
Surviving Corporation as they were of the several and respective Constituent Corporations, and the
title to any real estate vested by deed or otherwise in either of the such Constituent Corporations
shall not revert or be in any way impaired by the Merger; but all rights of creditors and all liens
upon any property of any of the Constituent Corporations shall be preserved unimpaired, and all
debts, liabilities and duties of the Constituent Corporations shall thenceforth attach to the
Surviving Corporation, and may be enforced against it to the same extent as if said debts,
liabilities and duties had been incurred or contracted by it.

          1.5 Manner and Basis of Converting Shares.

               (a) At the Effective Time:

          (i) each share of common stock, $.001 par value, of Acquisition Corp. that
shall be outstanding immediately prior to the Effective

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Time shall, by virtue of the Merger and without any action on the part of the
holder thereof, be converted into the right to receive one share of common stock,
par value $.001 per share, of the Surviving Corporation, so that at the Effective
Time, Parent shall be the holder of all of the issued and outstanding shares of the
Surviving Corporation;

          (ii) the shares of common stock, par value $.001 per share, of the Company (the
“Company Common Stock”), which shares at the Closing will constitute all of the
issued and outstanding shares of capital stock of the Company, beneficially owned by
the Stockholders listed in Schedule 2.4 (other than shares of Company Common
Stock as to which appraisal rights are perfected pursuant to the applicable
provisions of the DGCL and not withdrawn or otherwise forfeited), shall, by virtue
of the Merger and without any action on the part of the holders thereof, be
converted into the right to receive 1.2053301 shares of Parent Common Stock for each
share of Company Common Stock; and

               (b) After the Effective Time, there shall be no further registration of transfers on the stock
transfer books of the Surviving Corporation of the shares of Company Common Stock that were
outstanding immediately prior to the Effective Time.

          1.6 Surrender and Exchange of Certificates. Promptly after the Effective Time and upon
(i) surrender of a certificate or certificates representing shares of Company Common Stock that
were outstanding immediately prior to the Effective Time or an affidavit and indemnification in
form reasonably acceptable to counsel for the Parent stating that such Stockholder has lost its
certificate or certificates or that such have been destroyed and (ii) delivery of a Representation
Letter (as described in Section 4 hereof), Parent shall issue to each record holder of the Company
Common Stock surrendering such certificate or certificates and Representation Letter, a certificate
or certificates registered in the name of such Stockholder representing the number of shares of
Parent Common Stock that such Stockholder shall be entitled to receive as set forth in
Section 1.5(a)(ii) hereof. Until the certificate, certificates or affidavit is or are surrendered
together with the Representation letter as contemplated by this Section 1.6 and Section 4 hereof,
each certificate or affidavit that immediately prior to the Effective Time represented any
outstanding shares of Company Common Stock shall be deemed at and after the Effective Time to
represent only the right to receive upon surrender as aforesaid 1.2053301 shares of Parent Common
Stock for each share of Company Stock previously held or to perfect any rights of appraisal which
such holder may have pursuant to the applicable provisions of the DGCL.

          1.7 Parent Common Stock. Parent agrees that it will cause the Parent Common Stock into which
the Company Common Stock is converted at the Effective Time pursuant to Section 1.5(a)(ii) to be
available for such purpose. Parent further covenants that immediately prior to the Effective Time
there will be no more than 1,294,144 shares of Parent Common Stock issued and outstanding, and,
except as set forth in Schedule 3.4, that no other common or preferred stock or equity
securities or any options, warrants, rights or other agreements or instruments convertible,
exchangeable or exercisable into common or preferred stock or other equity securities shall be
issued or outstanding.

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     2. Representations and Warranties of the Company. The Company hereby represents and warrants
to each of Parent and Acquisition Corp. as follows:

          2.1 Organization, Standing, Subsidiaries, Etc.

               (a) The Company is a corporation duly organized and existing in good standing under the laws
of the State of Delaware, and has all requisite power and authority (corporate and other) to carry
on its business, to own or lease its properties and assets, to enter into this Agreement and the
Certificate of Merger and to carry out the terms hereof and thereof. Copies of the Certificate of
Incorporation and By-laws of the Company that have been delivered to Parent and Acquisition Corp.
prior to the execution of this Agreement are true and complete and have not since been amended or
repealed.

               (b) The Company has no subsidiaries or direct or indirect interest (by way of stock ownership
or otherwise) in any firm, corporation, limited liability company, partnership, association or
business.

          2.2 Qualification. The Company is duly qualified to conduct business as a foreign corporation
and is in good standing in each jurisdiction wherein the nature of its activities or its properties
owned or leased makes such qualification necessary, except where the failure to be so qualified
would not have a material adverse effect on the condition (financial or otherwise), properties,
assets, liabilities, business operations, results of operations or prospects of the Company taken
as a whole (the “Condition of the Company”).

          2.3 Capitalization of the Company. The authorized capital stock of the Company consists of
100,000,000 shares of Company Common Stock, and 20,000,000 shares of Company preferred stock, none
of which have been issued, and the Company has no authority to issue any other capital stock. There
are 20,400,000 shares of Company Common Stock issued and outstanding, and such shares are duly
authorized, validly issued, fully paid and nonassessable. The Company has no outstanding warrants,
stock options, rights or commitments to issue Company Common Stock or other Equity Securities of
the Company, and there are no outstanding securities convertible or exercisable into or
exchangeable for Company Common Stock or other Equity Securities of the Company.

          2.4 Company Stockholders. Schedule 2.4 hereto contains a true and complete table
setting forth the names of the record owners of all of the outstanding shares of Company Common
Stock and other Equity Securities of the Company, together with the number and percentage (on a
fully-diluted basis) of securities held. To the knowledge of the Company, there is no voting trust,
agreement or arrangement among any of the beneficial holders of Company Common Stock affecting the
exercise of the voting rights of Company Common Stock.

          2.5 Corporate Acts and Proceedings. The execution, delivery and performance of this Agreement
and the Certificate of Merger (together, the “Merger Documents”) have been duly authorized by the
Board of Directors of the Company and have been approved by the requisite vote of the Stockholders,
and all of the corporate acts and other proceedings required for the due and valid authorization,
execution, delivery and performance of the Merger Documents and the consummation of the Merger have
been validly and appropriately taken, except for the filing of the Certificate of Merger referred
to in Section 1.2.

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          2.6 Compliance with Laws and Instruments. To the knowledge of the Company, the business,
products and operations of the Company have been and are being conducted in compliance in all
material respects with all applicable laws, rules and regulations, except for such violations
thereof for which the penalties, in the aggregate, would not have a material adverse effect on the
Condition of the Company. The execution, delivery and performance by the Company of the Merger
Documents and the consummation by the Company of the transactions contemplated by this Agreement:
(a) will not require any authorization, consent or approval of, or filing or registration with, any
court or governmental agency or instrumentality, except such as shall have been obtained prior to
the Closing, (b) will not cause the Company to violate or contravene in any material respect
(i) any provision of law, (ii) any rule or regulation of any agency or government, (iii) any order,
judgment or decree of any court, or (iv) any provision of the Certificate of Incorporation or
By-laws of the Company, (c) will not violate or be in conflict with, result in a breach of or
constitute (with or without notice or lapse of time, or both) a default under, any indenture, loan
or credit agreement, deed of trust, mortgage, security agreement or other contract, agreement or
instrument to which the Company is a party or by which the Company or any of its properties is
bound or affected, except as would not have a material adverse effect on the Condition of the
Company, and (d) will not result in the creation or imposition of any material Lien upon any
property or asset of the Company.

          2.7 Binding Obligations. The Merger Documents constitute the legal, valid and binding
obligations of the Company and are enforceable against the Company in accordance with their
respective terms.

          2.8 Broker’s and Finder’s Fees. To the knowledge of the Company, no Person has, or as a result
of the transactions contemplated herein will have any right or valid claim against the Company,
Parent, Acquisition Corp. or any Stockholder for any commission, fee or other compensation as a
finder or broker, or in any similar capacity.

          2.9 Financial Statements. Attached hereto as Schedule 2.9 are the Company’s audited
Balance Sheet, Statement of Operations, Statement of Stockholders’ Equity and Statement of Cash
Flows as of and for the period from inception (March 9, 2007) through September 30, 2007 (the
“Balance Sheet Date”).  Such financial statements (i) are in accordance with the books and records
of the Company, (ii) present fairly in all material respects the financial Condition of the Company
as of the dates therein specified and the results of its operations and its cash flows for the
periods therein specified and (iii) have been prepared in accordance with generally accepted
accounting principles in the United States of America (“US GAAP”) applied on a basis consistent
with prior accounting periods.

          2.10 Absence of Undisclosed Liabilities. The Company has no material obligation or liability
(whether accrued, absolute, contingent, liquidated or otherwise, whether due or to become due),
arising out of any transaction entered into at or prior to the Closing, except (a) as disclosed in
Schedule 2.11 hereto, (b) to the extent set forth on or reserved against in the Balance
Sheet, (c) current liabilities incurred and obligations under agreements entered into in the usual
and ordinary course of business since September 30, 2007, none of which (individually or in the
aggregate) has had or will have a material adverse effect on the Condition of the Company and
(d) by the specific terms of any written agreement, document or arrangement identified in the
Schedules.

5

 

          2.11 Changes. Since September 30, 2007, except as disclosed in Schedule 2.11 hereto,
the Company has not (a) incurred any debts, obligations or liabilities, absolute, accrued,
contingent or otherwise, whether due or to become due, except for fees, expenses and liabilities
incurred in connection with the Merger and related transactions and current liabilities incurred in
the usual and ordinary course of business, (b) discharged or satisfied any Liens other than those
securing, or paid any obligation or liability other than, current liabilities shown on the Balance
Sheet and current liabilities incurred since September 30, 2007, in each case in the usual and
ordinary course of business, (c) mortgaged, pledged or subjected to Lien any of its assets,
tangible or intangible, other than in the usual and ordinary course of business, (d) sold,
transferred or leased any of its assets, except in the usual and ordinary course of business,
(e) cancelled or compromised any debt or claim, or waived or released any right, of material value,
(f) suffered any physical damage, destruction or loss (whether or not covered by insurance)
materially and adversely affecting the Condition of the Company, (g) entered into any transaction
other than in the usual and ordinary course of business, (h) encountered any labor union
difficulties, (i) made or granted any wage or salary increase or made any increase in the amounts
payable under any profit sharing, bonus, deferred compensation, severance pay, insurance, pension,
retirement or other employee benefit plan, agreement or arrangement, other than in the ordinary
course of business consistent with past practice, or entered into any employment agreement, (j)
issued or sold any shares of capital stock, bonds, notes, debentures or other securities or granted
any options (including employee stock options), warrants or other rights with respect thereto, (k)
declared or paid any dividends on or made any other distributions with respect to, or purchased or
redeemed, any of its outstanding capital stock, (l) suffered or experienced any change in, or
condition affecting, the financial Condition of the Company other than changes, events or
conditions in the usual and ordinary course of its business, none of which (either by itself or in
conjunction with all such other changes, events and conditions) could reasonably be expected to
have a material adverse effect on the Condition of the Company, (m) made any change in the
accounting principles, methods or practices followed by it or depreciation or amortization policies
or rates theretofore adopted, (n) made or permitted any amendment or termination of any material
contract, agreement or license to which it is a party, (o) suffered any material loss not reflected
in the Company Balance Sheet or its statement of income for the year ended on the Company Balance
Sheet Date, (p) paid, or made any accrual or arrangement for payment of, bonuses or special
compensation of any kind or any severance or termination pay to any present or former officer,
director, employee, stockholder or consultant, (q) made or agreed to make any charitable
contributions or incurred any non-business expenses in excess of $5,000 in the aggregate, or (r)
entered into any agreement, or otherwise obligated itself, to do any of the foregoing.

          2.12 Tax Returns and Audits. All required federal, state and local Tax Returns of the Company
have been accurately prepared in all material respects and duly and timely filed, and all federal,
state and local Taxes required to be paid with respect to the periods covered by such returns have
been paid to the extent that the same are material and have become due, except where the failure so
to file or pay could not reasonably be expected to have a material adverse effect upon the
Condition of the Company. The Company is not and has not been delinquent in the payment of any
Tax.  The Company has not had a Tax deficiency assessed against it.  None of the Company’s federal
income tax returns nor any state or local income or franchise tax returns has been audited by
governmental authorities.  The reserves for Taxes reflected on the

6

 

Company’s Balance Sheet are sufficient for the payment of all unpaid Taxes payable by the Company
with respect to the period ended on the Company’s Balance Sheet Date.  There are no federal, state,
local or foreign audits, actions, suits, proceedings, investigations, claims or administrative
proceedings relating to Taxes or any Tax Returns of the Company now pending, and the Company has
not received any notice of any proposed audits, investigations, claims or administrative
proceedings relating to Taxes or any Tax Returns.

          2.13 Employee Benefit Plans; ERISA. Schedule 2.13 lists any: (i) “employee benefit
plans” as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”), maintained or contributed to by the Company and covering employees of the
Company, including (x) any such plans that are “employee welfare benefit plans” as defined in
Section 3(1) of ERISA and (y) any such plans that are “employee pension benefit plans” as defined
in Section 3(2) of ERISA (collectively, the “Company Benefit Plans”); or (ii) life and health
insurance, hospitalization, savings, bonus, deferred compensation, incentive compensation, holiday,
vacation, severance pay, sick pay, sick leave, disability, tuition refund, service award, company
car, scholarship, relocation, patent award, fringe benefit and other employee benefit plans,
contracts (other than individual employment, consultancy or severance contracts), policies or
practices of the Company providing employee or executive compensation or benefits to its employees,
other than the Company Benefit Plans (collectively, the “Benefit Arrangements”). Each Company
Benefit Plan and Benefit Arrangement has been maintained and administered in all material respects
in accordance with applicable law.

          2.14 Title to Property and Encumbrances. The Company has good, valid and indefeasible
marketable title to all properties and assets used in the conduct of its business (except for
property held under valid and subsisting leases which are in full force and effect and which are
not in default) free of all Liens and other encumbrances, except Permitted Liens and such ordinary
and customary imperfections of title, restrictions and encumbrances as do not, individually or in
the aggregate, materially detract from the value of the property or assets or materially impair the
use made thereof by the Company in its business. Without limiting the generality of the foregoing,
the Company has good and indefeasible title to all of its properties and assets reflected in the
Balance Sheet, except for property disposed of in the usual and ordinary course of business since
September 30, 2007, and for property held under valid and subsisting leases which are in full force
and effect and which are not in default.

          2.15 Litigation. There is no legal action, suit, arbitration or other legal, administrative or
other governmental proceeding (other than proceedings before the United States Patent and Trademark
Office or foreign counterparts thereof) pending or, to the best knowledge of the Company,
threatened against or affecting the Company or its properties, assets or business, and after
reasonable investigation, the Company is not aware of any incident, transaction, occurrence or
circumstance that might reasonably be expected to result in or form the basis for any such action,
suit, arbitration or other proceeding. The Company is not in default with respect to any order,
writ, judgment, injunction, decree, determination or award of any court or any governmental agency
or instrumentality or arbitration authority.

          2.16 Patents, Trademarks, Etc. Schedule 2.16 sets forth a list of all United States
patents, trademarks, trade names, and applications therefore used by the Company exclusively in and
material to the conduct of its business (the “Patent and Trademark Rights”). Except as disclosed in
Schedule 2.16, (a) the Company owns or possesses adequate licenses or

7

 

other valid rights to use all Patent and Trademark Rights; and (b) to the Company’s knowledge, the
conduct of its business as now being conducted does not conflict with any valid patents,
trademarks, trade names or copyrights of others in any way which has a material adverse effect on
the business or financial Condition of the Company or its business.

          2.17 Interested Party Transactions. Except as disclosed on Schedule 2.17, no officer,
director or stockholder of the Company or any Affiliate or “associate” (as such term is defined in
Rule 405 under the Securities Act) of any such Person or the Company has or has had, either
directly or indirectly, (a) an interest in any Person that (i) furnishes or sells services or
products that are furnished or sold or are proposed to be furnished or sold by the Company or
(ii) purchases from or sells or furnishes to the Company any goods or services, or (b) a beneficial
interest in any contract or agreement to which the Company is a party or by which it may be bound
or affected.

          2.18 Questionable Payments. Neither the Company nor, to the knowledge of the Company, any
director, officer, agent, employee or other Person associated with or acting on behalf of the
Company, has used any corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity; made any direct or indirect unlawful payments to
government officials or employees from corporate funds; established or maintained any unlawful or
unrecorded fund of corporate monies or other assets; made any false or fictitious entries on the
books of record of any such corporations; or made any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment.

          2.19 Obligations to or by Stockholders. Except as disclosed on Schedule 2.19, the
Company has no liability or obligation or commitment to any stockholder of the Company or any
Affiliate or “associate” (as such term is defined in Rule 405 under the Securities Act) of any
stockholder of Company, nor does any stockholder of Company or any such Affiliate or associate have
any liability, obligation or commitment to the Company.

          2.20 Assets and Contracts. Except as expressly set forth in a schedule to this Agreement, the
Company’s Balance Sheet or the notes thereto, the Company is not a party to any written or oral
agreement not made in the ordinary course of business that is material to the Company.  Company
does not own any real property.  Except as disclosed on Schedule 2.20, Company is not a
party to or otherwise bound by any written or oral (a) agreement with any labor union,
(b) agreement for the purchase of fixed assets or for the purchase of materials, supplies or
equipment in excess of normal operating requirements, (c) agreement for the employment of any
officer, individual employee or other Person on a full-time basis or any agreement with any Person
for consulting services, (d) bonus, pension, profit sharing, retirement, stock purchase, stock
option, deferred compensation, medical, hospitalization or life insurance or similar plan, contract
or understanding with respect to any or all of the employees of Company or any other Person,
(e) indenture, loan or credit agreement, note agreement, deed of trust, mortgage, security
agreement, promissory note or other agreement or instrument relating to or evidencing Indebtedness
for Borrowed Money or subjecting any asset or property of Company to any Lien or evidencing any
Indebtedness, (f) guaranty of any Indebtedness, (g) lease or agreement under which Company is
lessee of or holds or operates any property, real or personal, owned by any other Person, (h) lease
or agreement under which Company is lessor or permits any Person to hold or operate any property,
real or personal, owned or controlled by Company, (i) agreement granting any preemptive right,
right of first refusal or similar right to any Person,

8

 

(j) agreement or arrangement with any Affiliate or any “associate” (as such term is defined in
Rule 405 under the Securities Act) of Company or any present or former officer, director or
stockholder of Company, (k) agreement obligating Company to pay any royalty or similar charge for
the use or exploitation of any tangible or intangible property, (1) covenant not to compete or
other restriction on its ability to conduct a business or engage in any other activity, (m)
distributor, dealer, manufacturer’s representative, sales agency, franchise or advertising contract
or commitment, (n) agreement to register securities under the Securities Act, (o) collective
bargaining agreement, or (p) agreement or other commitment or arrangement with any Person
continuing for a period of more than two months from the Closing Date that involves an expenditure
or receipt by Company in excess of $1,000.  Except as disclosed on Schedule 2.20, the
Company maintains no insurance policies and insurance coverage of any kind with respect to Company,
its business, premises, properties, assets, employees and agents.  Schedule 2.20 contains a
true and complete list and description of each bank account, savings account, other deposit
relationship and safety deposit box of Company, including the name of the bank or other depository,
the account number and the names of the individuals having signature or other withdrawal authority
with respect thereto. Except as disclosed on Schedule 2.20, no consent of any bank or other
depository is required to maintain any bank account, other deposit relationship or safety deposit
box of Company in effect following the consummation of the Merger and the transactions contemplated
hereby.  Company has furnished to the Parent true and complete copies of all agreements and other
documents disclosed or referred to in Schedule 2.20 or the Company Balance Sheet or the
notes thereto, as well as any additional agreements or documents, requested by the Parent.

          2.21 Employees. Except as disclosed on Schedule 2.17, other than pursuant to ordinary
arrangements of consulting compensation at fair market rates, Company is not under any obligation
or liability to any officer, director, employee or Affiliate of Company. The Company has no
employment agreements with, or any severance payment obligations to, any of its officers or
employees.

          2.22 Disclosure. There is no fact relating to the Company that the Company has not disclosed to
Parent that materially and adversely affects or, insofar as the Company can now reasonably foresee,
will materially and adversely affect the Condition of the Company.

     3. Representations and Warranties of Parent and Acquisition Corp. Parent and Acquisition
Corp. jointly and severally represent and warrant to the Company as follows:

          3.1 Organization and Standing. Parent is a corporation duly organized and existing in good
standing under the laws of the State of Delaware. Acquisition Corp. is a corporation duly organized
and existing in good standing under the laws of the State of Delaware. Parent is duly qualified to
conduct business as a foreign corporation and is in good standing in each jurisdiction wherein the
nature of its activities or its properties owned or leased makes such qualification necessary,
except where the failure to be so qualified would not have a material adverse effect on the
Condition of the Parent (as defined below). Parent and Acquisition Corp. have heretofore delivered
to the Company complete and correct copies of their respective Certificates of Incorporation and
By-laws as now in effect. Parent and Acquisition Corp. have full corporate power and authority to
carry on their respective businesses as they are now being conducted and as now proposed to be
conducted and to own or lease their respective properties and assets. Neither Parent nor
Acquisition Corp. has any subsidiaries (except Parent as the sole

9

 

stockholder of Acquisition Corp.) or direct or indirect interest (by way of stock ownership or
otherwise) in any firm, corporation, limited liability company, partnership, association or
business. Parent owns all of the issued and outstanding capital stock of Acquisition Corp. free and
clear of all Liens, and Acquisition Corp. has no outstanding options, warrants or rights to
purchase capital stock or other equity securities of Acquisition Corp., other than the capital
stock owned by Parent. Unless the context otherwise requires, all references in this Section 3 to
the “Parent” shall be treated as being a reference to the Parent and Acquisition Corp. taken
together as one enterprise.

          3.2 Corporate Authority. Each of Parent and/or Acquisition Corp. (as the case may be) has
full corporate power and authority to enter into the Merger Documents and the other agreements to
be made pursuant to the Merger Documents, and to carry out the transactions contemplated hereby and
thereby. All corporate acts and proceedings required for the authorization, execution, delivery and
performance of the Merger Documents and such other agreements and documents by Parent and/or
Acquisition Corp. (as the case may be) have been duly and validly taken or will have been so taken
prior to the Closing. Each of the Merger Documents constitutes a legal, valid and binding
obligation of Parent and/or Acquisition Corp. (as the case may be), each enforceable against them
in accordance with their respective terms.

          3.3 Broker’s and Finder’s Fees. No person, firm, corporation or other entity is entitled
by reason of any act or omission of Parent or Acquisition Corp. to any broker’s or finder’s fees,
commission or other similar compensation with respect to the execution and delivery of this
Agreement or the Certificate of Merger, or with respect to the consummation of the transactions
contemplated hereby or thereby. Parent and Acquisition Corp. jointly and severally agree to defend,
indemnify and hold Company harmless from and against any and all loss, claim or liability
(including attorneys fees, expert fees and all costs of court, whether or not assessable under
applicable law) arising out of any such claim from any other Person who claims he, she or it
introduced Parent or Acquisition Corp. to, or assisted them with, the transactions contemplated by
or described herein.

          3.4 Capitalization of Parent. The authorized capital stock of Parent consists of
(a) 200,000,000 shares of common stock, par value $0.0001 per share (the “Parent Common Stock”), of
which not more than 1,294,144 shares will be, prior to the Effective Time, issued and outstanding
and (b) 50,000,000 shares of preferred stock, par value $0.0001 per share, of which no shares are
issued or outstanding. Schedule 3.4 hereto contains a complete and true capitalization
table setting forth the Parent common stock holdings of the officers and directors of Parent and
the holders of greater than 5% of Parent Common Stock. Except as set forth on Schedule 3.4
or in the Parent SEC Documents (as defined in Section 3.7 below), Parent has no outstanding
options, warrants, rights or commitments to issue shares of Parent Common Stock or any other Equity
Security of Parent or Acquisition Corp., and there are no outstanding securities convertible or
exercisable into or exchangeable for shares of Parent Common Stock or any other Equity Security of
Parent or Acquisition Corp. There is no voting trust, agreement or arrangement among any of the
beneficial holders of Parent Common Stock affecting the nomination or election of directors or the
exercise of the voting rights of Parent Common Stock. All outstanding shares of the capital stock
of Parent are validly issued and outstanding, fully paid and nonassessable, and none of such shares
have been issued in violation of the preemptive rights of any person or any applicable law. 

10

 

          3.5 Acquisition Corp. Acquisition Corp. is a wholly-owned subsidiary of Parent that was
formed specifically for the purpose of the Merger and that has not conducted any business or
acquired any property, and will not conduct any business or acquire any property prior to the
Closing Date, except in preparation for and otherwise in connection with the transactions
contemplated by this Agreement, the Certificate of Merger and the other agreements to be made
pursuant to or in connection with this Agreement and the Certificate of Merger.  The authorized
capital stock of Acquisition Corp. consists of 1,000 shares of $.001 par value common stock (the
“Acquisition Corp. Common Stock”), of which not more than 100 shares will be, prior to the
Effective Time, issued and outstanding.

          3.6 Validity of Shares. All of the 24,588,734 shares of Parent Common Stock to be
issued at the Closing pursuant to Section 1.5(a)(ii) hereof, when issued and delivered in
accordance with the terms hereof and the Certificate of Merger, shall be duly and validly issued,
fully paid and nonassessable. The issuance of the Parent Common Stock upon the Merger pursuant to
Section 1.5(a)(ii) will be exempt from the registration and prospectus delivery requirements of the
Securities Act and from the qualification or registration requirements of any applicable state blue
sky or securities laws.

          3.7 SEC Reporting and Compliance.

               (a) Parent has filed with the Commission all forms, reports and documents required to be filed
by companies registered pursuant to Section 12(g) of the Exchange Act (collectively, the “Parent
SEC Documents”). The Parent SEC Documents (i) were prepared in all material respects in accordance
with the requirements of the Securities Act and the Exchange Act, as the case may be, and the
rules and regulations thereunder and (ii) did not, at the time they were filed (or at the effective
date thereof in the case of registration statements), contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary in order to make
the statements made therein, in light of the circumstances under which they were made, not
misleading.

               (b) Parent has not filed, and nothing has occurred with respect to which Parent would be
required to file, any report on Form 8-K since September 30, 2007.  Prior to and until the Closing,
Parent will provide to the Company copies of any and all amendments or supplements to the Parent
SEC Documents filed with the Commission since September 30, 2007 and any and all subsequent
statements, reports and filings filed by the Parent with the Commission or delivered to the
stockholders of Parent.

               (c) Parent is not an investment company within the meaning of Section 3 of the Investment
Company Act.

               (d) The shares of Parent Common Stock are quoted on the OTC Bulletin Board under the symbol
“VYXC”, and Parent is in compliance in all material respects with all rules and regulations of the
OTC Bulletin Board applicable to it and the Parent Stock.

               (e) Between the date hereof and the Closing Date, Parent shall continue to satisfy the filing
requirements of the Exchange Act and all other requirements of

11

 

applicable securities laws and the OTC Bulletin Board and, as of the Closing Date, the Parent
Stock shall be listed on the OTC Bulletin Board.

               (f) To the best of its knowledge, Parent has otherwise complied in all material respects with
the Securities Act, Exchange Act and all other applicable federal and state securities laws.

          3.8 Financial Statements. The balance sheets, and statements of operations, statements of
changes in shareholders’ equity and statements of cash flows contained in the Parent SEC Documents
(the “Parent Financial Statements”) (i) have been prepared in accordance with US GAAP applied on a
basis consistent with prior periods (and, in the case of unaudited financial information, on a
basis consistent with year-end audits), (ii) are in accordance with the books and records of the
Parent, and (iii) present fairly in all material respects the financial Condition of the Parent at
the dates therein specified and the results of its operations and changes in financial position for
the periods therein specified. The financial statements included in the Annual Report on
Form 10-KSB for the fiscal year ended December 31, 2006, are audited by, and include the related
report of Berenfeld Spritzer Schehecter & Sheer, LLP, Parent’s independent registered public
accounting firm. The financial information included in each of the Quarterly Reports on Form 10-QSB
for the quarters ended March 31, 2007, June 30, 2007, and September 30, 2007, is unaudited, but
reflects all adjustments (including normally recurring accounts) that Parent considers necessary
for a fair presentation of such information and have been prepared in accordance with US GAAP,
consistently applied, and present fairly in all material respects the financial condition of the
Parent on the dates therein specified.

          3.9 Governmental Consents. All consents, approvals, orders, or authorizations of, or
registrations, qualifications, designations, declarations, or filings with any federal or state
governmental authority on the part of Parent or Acquisition Corp. required in connection with the
consummation of the Merger shall have been obtained prior to, and be effective as of, the Closing.

          3.10 Compliance with Laws and Instruments. The execution, delivery and performance by
Parent and/or Acquisition Corp. of this Agreement, the Certificate of Merger and the other
agreements to be made by Parent or Acquisition Corp. pursuant to or in connection with this
Agreement or the Certificate of Merger and the consummation by Parent and/or Acquisition Corp. of
the transactions contemplated by the Merger Documents will not cause Parent and/or Acquisition
Corp. to violate or contravene (i) any provision of law, (ii) any rule or regulation of any agency
or government, (iii) any order, judgment or decree of any court, or (v) any provision of their
respective articles or certificate of incorporation or by-laws as amended and in effect on and as
of the Closing Date and will not violate or be in conflict with, result in a breach of or
constitute (with or without notice or lapse of time, or both) a default under any indenture, loan
or credit agreement, deed of trust, mortgage, security agreement or other agreement or contract to
which Parent or Acquisition Corp. is a party or by which Parent and/or Acquisition Corp. or any of
their respective properties is bound.

          3.11 No General Solicitation. In issuing Parent Common Stock in the Merger hereunder,
neither Parent nor anyone acting on its behalf has offered to sell the Parent Common Stock by any
form of general solicitation or advertising.

12

 

          3.12 Binding Obligations. The Merger Documents constitute the legal, valid and binding
obligations of Parent and Acquisition Corp., and are enforceable against Parent and Acquisition
Corp., in accordance with their respective terms.

          3.13 Absence of Undisclosed Liabilities. Neither Parent nor Acquisition Corp. has any
obligation or liability (whether accrued, absolute, contingent, liquidated or otherwise, whether
due or to become due), arising out of any transaction entered into at or prior to the Closing,
except (a) as disclosed in the Parent SEC Documents, (b) to the extent set forth on or reserved
against in the audited balance sheet of Parent as of December 31, 2006 (the “Parent Balance Sheet”)
or the Notes to the Parent Financial Statements, (c) current liabilities incurred and obligations
under agreements entered into in the usual and ordinary course of business since December 31, 2006
(the “Parent Balance Sheet Date”), none of which (individually or in the aggregate) materially and
adversely affects the condition (financial or otherwise), properties, assets, liabilities, business
operations, results of operations or prospects of the Parent or Acquisition Corp., taken as a whole
(the “Condition of the Parent”), as disclosed on a Schedule attached to this Agreement, and (e) by
the specific terms of any written agreement, document or arrangement attached as an exhibit to the
Parent SEC Documents.

          3.14 Changes. Since the Parent Balance Sheet Date, except as disclosed in the Parent SEC
Documents and on Schedule 3.14, the Parent has not (a) incurred any debts, obligations or
liabilities, absolute, accrued or, to the Parent’s knowledge, contingent, whether due or to become
due, except for current liabilities incurred in the usual and ordinary course of business,
(b) discharged or satisfied any Liens other than those securing, or paid any obligation or
liability other than, current liabilities shown on the Parent Balance Sheet and current liabilities
incurred since the Parent Balance Sheet Date, in each case in the usual and ordinary course of
business, (c) mortgaged, pledged or subjected to Lien any of its assets, tangible or intangible,
other than in the usual and ordinary course of business, (d) sold, transferred or leased any of its
assets, except in the usual and ordinary course of business, (e) cancelled or compromised any debt
or claim, or waived or released any right of material value, (f) suffered any physical damage,
destruction or loss (whether or not covered by insurance) which could reasonably be expected to
have a material adverse effect on the Condition of the Parent, (g) entered into any transaction
other than in the usual and ordinary course of business, (h) encountered any labor union
difficulties, (i) made or granted any wage or salary increase or made any increase in the amounts
payable under any profit sharing, bonus, deferred compensation, severance pay, insurance, pension,
retirement or other employee benefit plan, agreement or arrangement, other than in the ordinary
course of business consistent with past practice, or entered into any employment agreement, (j)
issued or sold any shares of capital stock, bonds, notes, debentures or other securities or granted
any options (including employee stock options), warrants or other rights with respect thereto, (k)
declared or paid any dividends on or made any other distributions with respect to, or purchased or
redeemed, any of its outstanding capital stock, (l) suffered or experienced any change in, or
condition affecting, the financial Condition of the Parent other than changes, events or conditions
in the usual and ordinary course of its business, none of which (either by itself or in conjunction
with all such other changes, events and conditions) could reasonably be expected to have a material
adverse effect on the Condition of the Parent, (m) made any change in the accounting principles,
methods or practices followed by it or depreciation or amortization policies or rates theretofore
adopted, (n) made or permitted any amendment or termination of any material contract, agreement or
license to which it is a party,

13

 

(o) suffered any material loss not reflected in the Parent Balance Sheet or its statement of income
for the year ended on the Parent Balance Sheet Date, (p) paid, or made any accrual or arrangement
for payment of, bonuses or special compensation of any kind or any severance or termination pay to
any present or former officer, director, employee, stockholder or consultant, (q) made or agreed to
make any charitable contributions or incurred any non-business expenses in excess of $5,000 in the
aggregate, or (r) entered into any agreement, or otherwise obligated itself, to do any of the
foregoing.

          3.15 Tax Returns and Audits. All required federal, state and local Tax Returns of the
Parent have been accurately prepared in all material respects and duly and timely filed, and all
federal, state and local Taxes required to be paid with respect to the periods covered by such
returns have been paid to the extent that the same are material and have become due, except where
the failure so to file or pay could not reasonably be expected to have a material adverse effect
upon the Condition of the Parent. The Parent is not and has not been delinquent in the payment of
any Tax. The Parent has not had a Tax deficiency assessed against it. None of the Parent’s federal
income tax returns nor any state or local income or franchise tax returns has been audited by
governmental authorities. The reserves for Taxes reflected on the Parent Balance Sheet are
sufficient for the payment of all unpaid Taxes payable by the Parent with respect to the period
ended on the Parent Balance Sheet Date. There are no federal, state, local or foreign audits,
actions, suits, proceedings, investigations, claims or administrative proceedings relating to Taxes
or any Tax Returns of the Parent now pending, and the Parent has not received any notice of any
proposed audits, investigations, claims or administrative proceedings relating to Taxes or any Tax
Returns.

          3.16 Employee Benefit Plans; ERISA.

               (a) Except as disclosed in the Parent SEC Documents, there are no “employee benefit
plans”
(within the meaning of Section 3(3) of ERISA) nor any other employee benefit or fringe benefit
arrangements, practices, contracts, policies or programs other than programs merely involving the
regular payment of wages, commissions, or bonuses established, maintained or contributed to by the
Parent. Any plans listed in the Parent SEC Documents are hereinafter referred to as the “Parent
Employee Benefit Plans.”

               (b) Any current and prior material documents, including all amendments thereto, with respect
to each Parent Employee Benefit Plan have been given to the Company or its advisors.

               (c) All Parent Employee Benefit Plans are in material compliance with the applicable
requirements of ERISA, the Code and any other applicable state, federal or foreign law.

               (d) There are no pending, or to the knowledge of the Parent, threatened, claims or lawsuits
which have been asserted or instituted against any Parent Employee Benefit Plan, the assets of any
of the trusts or funds under the Parent Employee Benefit Plans, the plan sponsor or the plan
administrator of any of the Parent Employee Benefit Plans or against any fiduciary of a Parent
Employee Benefit Plan with respect to the operation of such plan.

14

 

               (e) There is no pending, or to the knowledge of the Parent, threatened, investigation or
pending or possible enforcement action by the Pension Benefit Guaranty Corporation, the Department
of Labor, the Internal Revenue Service or any other government agency with respect to any Parent
Employee Benefit Plan.

               (f) No actual or, to the knowledge of Parent, contingent liability exists with respect to the
funding of any Parent Employee Benefit Plan or for any other expense or obligation of any Parent
Employee Benefit Plan, except as disclosed on the financial statements of the Parent or the Parent
SEC Documents, and to the knowledge of the Parent, no contingent liability exists under ERISA with
respect to any “multi-employer plan,” as defined in Section 3(37) or Section 4001(a)(3) of ERISA.

          3.17 Litigation. There is no legal action, suit, arbitration or other legal,
administrative or other governmental proceeding pending or, to the knowledge of the Parent,
threatened against or affecting the Parent or Acquisition Corp. or their properties, assets or
business. To the knowledge of the Parent, neither Parent nor Acquisition Corp. is in default with
respect to any order, writ, judgment, injunction, decree, determination or award of any court or
any governmental agency or instrumentality or arbitration authority.

          3.18 Interested Party Transactions. Except as disclosed in the Parent SEC Documents and on
Schedule 3.14, no officer, director or stockholder of the Parent or any Affiliate or
“associate” (as such term is defined in Rule 405 under the Securities Act) of any such Person or
the Parent has or has had, either directly or indirectly, (a) an interest in any Person that
(i) furnishes or sells services or products that are furnished or sold or are proposed to be
furnished or sold by the Parent or (ii) purchases from or sells or furnishes to the Parent any
goods or services, or (b) a beneficial interest in any contract or agreement to which the Parent is
a party or by which it may be bound or affected.

          3.19 Questionable Payments. Neither the Parent, Acquisition Corp. nor to the knowledge of
the Parent, any director, officer, agent, employee or other Person associated with or acting on
behalf of the Parent or Acquisition Corp., has used any corporate funds for unlawful contributions,
gifts, entertainment or other unlawful expenses relating to political activity; made any direct or
indirect unlawful payments to government officials or employees from corporate funds; established
or maintained any unlawful or unrecorded fund of corporate monies or other assets; made any false
or fictitious entries on the books of record of any such corporations; or made any bribe, rebate,
payoff, influence payment, kickback or other unlawful payment.

          3.20 Obligations to or by Stockholders. Except as disclosed in the Parent SEC Documents,
the Parent has no liability or obligation or commitment to any stockholder of Parent or any
Affiliate or “associate” (as such term is defined in Rule 405 under the Securities Act) of any
stockholder of Parent, nor does any stockholder of Parent or any such Affiliate or associate have
any liability, obligation or commitment to the Parent.

          3.21 Assets and Contracts. Except as expressly set forth in a schedule to this Agreement,
the Parent Balance Sheet or the notes thereto, the Parent is not a party to any written or oral
agreement not made in the ordinary course of business that is material to the Parent. Parent does
not own any real property. Parent is not a party to or otherwise bound by any written or oral
(a) agreement with any labor union, (b) agreement for the purchase of fixed assets or for

15

 

the purchase of materials, supplies or equipment in excess of normal operating requirements,
(c) agreement for the employment of any officer, individual employee or other Person on a full-time
basis or any agreement with any Person for consulting services, (d) bonus, pension, profit sharing,
retirement, stock purchase, stock option, deferred compensation, medical, hospitalization or life
insurance or similar plan, contract or understanding with respect to any or all of the employees of
Parent or any other Person, (e) indenture, loan or credit agreement, note agreement, deed of trust,
mortgage, security agreement, promissory note or other agreement or instrument relating to or
evidencing Indebtedness for Borrowed Money or subjecting any asset or property of Parent to any
Lien or evidencing any Indebtedness, (f) guaranty of any Indebtedness, (g) lease or agreement under
which Parent is lessee of or holds or operates any property, real or personal, owned by any other
Person, (h) lease or agreement under which Parent is lessor or permits any Person to hold or
operate any property, real or personal, owned or controlled by Parent, (i) agreement granting any
preemptive right, right of first refusal or similar right to any Person, (j) agreement or
arrangement with any Affiliate or any “associate” (as such term is defined in Rule 405 under the
Securities Act) of Parent or any present or former officer, director or stockholder of Parent, (k)
agreement obligating Parent to pay any royalty or similar charge for the use or exploitation of any
tangible or intangible property, (1) covenant not to compete or other restriction on its ability to
conduct a business or engage in any other activity, (m) distributor, dealer, manufacturer’s
representative, sales agency, franchise or advertising contract or commitment, (n) agreement to
register securities under the Securities Act, (o) collective bargaining agreement, or (p) agreement
or other commitment or arrangement with any Person continuing for a period of more than two months
from the Closing Date that involves an expenditure or receipt by Parent in excess of $1,000. 
Except as disclosed on Schedule 3.21, the Parent maintains no insurance policies and
insurance coverage of any kind with respect to Parent, its business, premises, properties, assets,
employees and agents. Schedule 3.21 contains a true and complete list and description of
each bank account, savings account, other deposit relationship and safety deposit box of Parent,
including the name of the bank or other depository, the account number and the names of the
individuals having signature or other withdrawal authority with respect thereto. Except as
disclosed on Schedule 3.21, no consent of any bank or other depository is required to
maintain any bank account, other deposit relationship or safety deposit box of Parent in effect
following the consummation of the Merger and the transactions contemplated hereby. Parent has
furnished to the Company true and complete copies of all agreements and other documents disclosed
or referred to in Schedule 3.21 or the Parent Balance Sheet or the notes thereto, as well
as any additional agreements or documents, requested by the Company.

          3.22 Employees. Other than pursuant to ordinary arrangements of employment compensation,
Parent is not under any obligation or liability to any officer, director, employee or Affiliate of
Parent.  The Company has no employment agreements with, or any severance payment obligations to,
any of its officers or employees.

          3.23 Patents, Trademarks, Etc. The Parent SEC Documents disclose all of Parent’s Patent
and Trademark rights. Except as disclosed in the Parent SEC Documents, (a) Parent owns or
possesses adequate licenses or other valid rights to use all Patent and Trademark Rights; and
(b) to Patent’s knowledge, the conduct of its business as now being conducted does not conflict
with any valid patents, trademarks, trade names or copyrights of

16

 

others in any way which has a material adverse effect on the business or financial Condition of the
Parent or its business.

          3.24 Disclosure. There is no fact relating to Parent that Parent has not disclosed to the
Company in writing or disclosed in Parent SEC filings or in any schedules or exhibits attached
hereto or incorporated herein that materially and adversely affects nor, insofar as Parent can now
foresee, will materially and adversely affect, the condition (financial or otherwise), properties,
assets, liabilities, business operations, results of operations or prospects of Parent. No
representation or warranty by Parent herein and no information disclosed in the schedules or
exhibits hereto by Parent contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements contained herein or therein not misleading.

     4. Investment Letter. At or prior to the Closing, Parent shall have received from each of
the Company’s shareholders a Representation Letter in standard form for comparable transactions
agreeing among other things that the shares of Parent Common Stock to be issued in the merger are,
among other things, being acquired for investment purposes and not with a view to public resale,
are being acquired for the shareholder’s own account, and that the shares of Parent Common Stock
are restricted and may not be resold without registration, except in reliance on an exemption
therefrom under the Securities Act.

     5. Conduct of Businesses Pending the Merger.

          5.1 Conduct of Business by the Company Pending the Merger. Prior to the Effective Time,
unless Parent or Acquisition Corp. shall otherwise agree in writing or as otherwise contemplated by
this Agreement or disclosed in any Schedule to this Agreement:

               (a) the business of the Company shall be conducted only in the ordinary course;

               (b) the Company shall not (i) directly or indirectly redeem, purchase or otherwise acquire
or
agree to redeem, purchase or otherwise acquire any shares of its capital stock; (ii) amend its
Certificate of Incorporation or By-laws; or (iii) split, combine or reclassify the outstanding
Company Common Stock or declare, set aside or pay any dividend payable in cash, stock or property
or make any distribution with respect to any such stock;

               (c) the Company shall not (i) issue or agree to issue any additional shares of, or
options,
warrants or rights of any kind to acquire any shares of, Company Common Stock; (ii) acquire or
dispose of any fixed assets or acquire or dispose of any other substantial assets other than in the
ordinary course of business; (iii) incur additional Indebtedness or any other liabilities or enter
into any other transaction other than in the ordinary course of business; (iv) enter into any
contract, agreement, commitment or arrangement with respect to any of the foregoing; or (v) except
as contemplated by this Agreement, enter into any contract, agreement, commitment or arrangement to
dissolve, merge, consolidate or enter into any other material business combination;

               (d) the Company shall use its best efforts to preserve intact the business organization of the
Company, to keep available the service of its present officers and key employees, and to preserve
the good will of those having business relationships with it; and

17

 

               (e) the Company will not enter into any new employment agreements with any of its officers or
employees or grant any increases in the compensation or benefits of its officers and employees
other than increases in the ordinary course of business and consistent with past practice or amend
any employee benefit plan or arrangement.

          5.2 Conduct of Business by Parent and Acquisition Corp. Pending the Merger. Parent
represents and warrants to the Company that Parent and Acquisition Corp. do not operate any
business.  Prior to the Effective Time, unless the Company shall otherwise agree in writing or as
otherwise contemplated by this Agreement or disclosed in any Schedule to this Agreement:

               (a) the business of Parent and Acquisition Corp. shall be conducted only in the ordinary
course; provided, however, that Parent shall take the steps necessary to have discontinued its
existing business without liability to Parent or Acquisition Corp. as of the Closing Date;

               (b) neither Parent nor Acquisition Corp. shall (i) directly or indirectly redeem, purchase
or
otherwise acquire or agree to redeem, purchase or otherwise acquire any shares of its capital
stock; (ii) amend its articles or certificate of incorporation or by-laws; or (iii) split, combine
or reclassify its capital stock or declare, set aside or pay any dividend payable in cash, stock or
property or make any distribution with respect to such stock;

               (c) neither Parent nor Acquisition Corp. shall (i) issue or agree to issue any additional
shares of, or options, warrants or rights of any kind to acquire shares of, its capital stock;
(ii) acquire or dispose of any assets other than in the ordinary course of business (except for
dispositions in connection with Section 5.2(a) hereof); (iii) incur additional Indebtedness or any
other liabilities or enter into any other transaction except in the ordinary course of business;
(iv) enter into any contract, agreement, commitment or arrangement with respect to any of the
foregoing, or (v) except as contemplated by this Agreement, enter into any contract, agreement,
commitment or arrangement to dissolve, merge, consolidate or enter into any other material business
contract or enter into any negotiations in connection therewith;

               (d) neither Parent nor Acquisition Corp. will, nor will they authorize any director or
authorize or permit any officer or employee or any attorney, accountant or other representative
retained by them to, make, solicit, encourage any inquiries with respect to, or engage in any
negotiations concerning, any Acquisition Proposal (as defined below for purposes of this
paragraph). Parent will promptly advise the Company orally and in writing of any such inquiries or
proposals (or requests for information) and the substance thereof. As used in this paragraph,
“Acquisition Proposal” shall mean any proposal for a merger or other business combination involving
the Parent or Acquisition Corp. or for the acquisition of a substantial equity interest in either
of them or any material assets of either of them other than as contemplated by this Agreement.
Parent will immediately cease and cause to be terminated any existing activities, discussions or
negotiations with any person conducted heretofore with respect to any of the foregoing; and

               (e) neither the Parent nor Acquisition Corp. will enter into any new employment agreements
with any of their officers or employees or grant any increases in the compensation or benefits of
their officers or employees.

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     6. Additional Agreements.

          6.1 Access and Information. The Company, Parent and Acquisition Corp. shall each afford to
the other and to the other’s accountants, counsel and other representatives full access during
normal business hours throughout the period prior to the Effective Time of all of its properties,
books, contracts, commitments and records (including but not limited to tax returns) and during
such period, each shall furnish promptly to the other all information concerning its business,
properties and personnel as such other party may reasonably request; provided, that no
investigation pursuant to this Section 6.1 shall affect any representations or warranties made
herein. Each party shall hold, and shall cause its employees and agents to hold, in confidence all
such information (other than such information which (i) is already in such party’s possession or
(ii) becomes generally available to the public other than as a result of a disclosure by such party
or its directors, officers, managers, employees, agents or advisors, or (iii) becomes available to
such party on a non-confidential basis from a source other than a party hereto or its advisors,
provided that such source is not known by such party to be bound by a confidentiality agreement
with or other obligation of secrecy to a party hereto or another party until such time as such
information is otherwise publicly available; provided, however, that (A) any such information may
be disclosed to such party’s directors, officers, employees and representatives of such party’s
advisors who need to know such information for the purpose of evaluating the transactions
contemplated hereby (it being understood that such directors, officers, employees and
representatives shall be informed by such party of the confidential nature of such information),
(B) any disclosure of such information may be made as to which the party hereto furnishing such
information has consented in writing, and (C) any such information may be disclosed pursuant to a
judicial, administrative or governmental order or request; provided, however, that the requested
party will promptly so notify the other party so that the other party may seek a protective order
or appropriate remedy and/or waive compliance with this Agreement and if such protective order or
other remedy is not obtained or the other party waives compliance with this provision, the
requested party will furnish only that portion of such information which is legally required and
will exercise its best efforts to obtain a protective order or other reliable assurance that
confidential treatment will be accorded the information furnished). If this Agreement is
terminated, each party will deliver to the other all documents and other materials (including
copies) obtained by such party or on its behalf from the other party as a result of this Agreement
or in connection herewith, whether so obtained before or after the execution hereof.

          6.2 Additional Agreements. Subject to the terms and conditions herein provided, each of
the parties hereto agrees to use its commercially reasonable best efforts to take, or cause to be
taken, all action and to do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the transactions contemplated by
this Agreement, including using its commercially reasonable efforts to satisfy the conditions
precedent to the obligations of any of the parties hereto to obtain all necessary waivers, and to
lift any injunction or other legal bar to the Merger (and, in such case, to proceed with the Merger
as expeditiously as possible). In order to obtain any necessary governmental or regulatory action
or non-action, waiver, consent, extension or approval, each of Parent, Acquisition Corp. and the
Company agrees to take all reasonable actions and to enter into all reasonable agreements as may be
necessary to obtain timely governmental or regulatory approvals and to take such further action in
connection therewith as may be necessary. In case at any time after the Effective Time any further
action is necessary or desirable to carry out the

19

 

purposes of this Agreement, the proper officers and/or directors of Parent, Acquisition Corp. and
the Company shall take all such necessary action.

          6.3 Publicity. No party shall issue any press release or public announcement pertaining to
the Merger that has not been agreed upon in advance by Parent and the Company; provided, however,
that this provision shall not prevent any party from making any announcement or filing any report
required by it to be in compliance with any applicable federal or state securities laws.

          6.4 Appointment of Officers and Directors. Parent shall accept the resignation of the
current officers and directors of Parent as provided by Section 7.2(f)(7) hereof, and shall cause
the persons listed as officers and directors in Exhibit “B” hereto to be elected to such positions,
in each case immediately upon the Effective Time, except that the resignation and appointment of
certain directors shall be delayed until compliance with Section 14(f) of the Exchange Act and
rules promulgated thereunder, as set forth in Exhibit “B” and Section 7.2(f)(7) hereof. At the
first annual meeting of Parent stockholders and thereafter, the election of members of Parent’s
Board of Directors shall be accomplished in accordance with the by-laws of Parent.

          6.5 [Intentionally Deleted] 

          6.6 Additional Parent Actions. Prior to the Closing, Parent shall have

               (a) cancelled any shares of Parent Common Stock held in treasury by Parent; and

               (b) no outstanding contractual commitments, and shall not have outstanding payables or
liabilities, except for Parent’s reasonable legal and accounting fees and expenses incurred in
connection with this Agreement and the Merger, which shall be paid at Closing.

          6.7 Payment of Parent Liabilities. Immediately upon the execution of this Agreement, the
Company shall pay the Parent’s liabilities in the maximum amount of $183,131 as set forth on
Schedule 6.7 to the extent not previously paid (the “Parent Debt”).

          6.8 Indemnity Agreements. Parent and Company acknowledge that Parent is a party to
certain indemnification agreements (the “Indemnity Agreements”) in favor of Parent’s current and
former officers and directors, copies of which have been provided to Company. Parent and Company
agree that these Indemnity Agreements shall survive the Merger and any subsequent merger,
reorganization or reincorporation of Parent, and that Parent and Company shall take no action which
will deprive the beneficiaries of these Indemnification Agreements of the benefits and protections
thereof, nor shall Parent or Company take any action intended to or effecting any change,
limitation, termination or other modification of the rights and duties of any party under such
Indemnity Agreements.

          6.9 Post-Closing Audit and Filing Expenses. The Company agrees that it shall be
responsible for all post-Closing costs and expenses incurred in connection with preparation and
filing of Parent’s SEC Documents due after Closing.

20

 

          6.10 Parent Post-Closing Capitalization Table. Attached hereto as Exhibit “C” is a table
showing the capitalization of Parent after consummation of the Merger and the transactions
contemplated herein.

     7. Conditions of Parties’ Obligations.

          7.1 Company Obligations. The obligations of Parent and Acquisition Corp. under this
Agreement and the Certificate of Merger are subject to the fulfillment at or prior to the Closing
of the following conditions, any of which may be waived in whole or in part by Parent.

               (a) No Errors, etc. The representations and warranties of the Company under this Agreement
shall be deemed to have been made again on the Closing Date and shall then be true and correct in
all material respects.

               (b) Compliance with Agreement. The Company shall have performed and complied in all material
respects with all agreements and conditions required by this Agreement to be performed or complied
with by it on or before the Closing Date.

               (c) No Default or Adverse Change. There shall not exist on the Closing Date any Default or
Event of Default or any event or condition that, with the giving of notice or lapse of time, or
both, would constitute a Default or Event of Default, and since the Balance Sheet Date, there shall
have been no material adverse change in the Condition of the Company.

               (d) No Restraining Action. No action or proceeding before any court, governmental body or
agency shall have been threatened, asserted or instituted to restrain or prohibit, or to obtain
substantial damages in respect of, this Agreement or the Certificate of Merger or the carrying out
of the transactions contemplated by the Merger Documents.

               (e) Supporting Documents. Parent and Acquisition Corp. shall have received the following:

                    (i) Copies of resolutions of the Board of Directors
and the Stockholders of the
Company authorizing and approving the execution, delivery and performance of the Merger
Documents and all other documents and instruments to be delivered pursuant hereto and
thereto.

                    (ii) A certificate, dated the Closing Date, executed
by the Company’s President and
Chief Executive Officer, certifying as to satisfaction of the conditions set forth in
Section 7.1(c) and certifying that, except for the filing of the Certificate of
Merger: (i) all consents, authorizations, orders and approvals of, and filings and
registrations with, any court, governmental body or instrumentality that are required for
the execution and delivery of this Agreement and the Certificate of Merger and the
consummation of the Merger shall have been duly made or obtained, and all material consents
by third parties that are required for the Merger have been obtained; and (ii) no action or
proceeding before any court, governmental body or agency has been threatened, asserted or
instituted to restrain or prohibit, or to obtain substantial damages in respect of,

21

 

this Agreement or the Certificate of Merger or the carrying out of the transactions contemplated
by the Merger Documents.

                    (iii) Evidence as of a date within 10 days of
the Effective Time of the good standing
and corporate existence of the Company issued by the Secretary of State of the State of
Delaware.

                    (iv) Such additional supporting documentation and
other information with respect to
the transactions contemplated hereby as Parent and Acquisition Corp. may reasonably
request.

               (f) Proceedings and Documents. All corporate and other proceedings and actions taken in
connection with the transactions contemplated hereby and all certificates, opinions, agreements,
instruments and documents mentioned herein or incident to any such transactions shall be reasonably
satisfactory in form and substance to Parent and Acquisition Corp. The Company shall furnish to
Parent and Acquisition Corp. such supporting documentation and evidence of the satisfaction of any
or all of the conditions precedent specified in this Section 7.1 as Parent or its counsel may
reasonably request.

          7.2 Parent and Acquisition Corp. Obligations. The obligations of the Company under this
Agreement and the Certificate of Merger are subject to the fulfillment at or prior to the Closing
of the following conditions, any of which may be waived in whole or in part by the Company:

               (a) No Errors, etc. The representations and warranties of Parent and Acquisition Corp. under
this Agreement shall be deemed to have been made again on the Closing Date and shall then be true
and correct in all material respects.

               (b) Compliance with Agreement. Parent and Acquisition Corp. shall have performed and complied
in all material respects with all agreements and conditions required by this Agreement and the
Certificate of Merger to be performed or complied with by them on or before the Closing Date.

               (c) No Default or Adverse Change. There shall not exist on the Closing Date any Default or
Event of Default or any event or condition, that with the giving of notice or lapse of time, or
both, would constitute a Default of Event of Default, and since the Parent Balance Sheet Date,
there shall have been no material adverse change in the Condition of the Parent.

               (d) Supporting Documents. The Company shall have received the following, each in form and
substance reasonably satisfactory to the Company and its counsel:

                    (i) Copies of resolutions of Parent’s and
Acquisition Corp.’s respective boards of
directors and the sole shareholder of Acquisition Corp., authorizing and approving, to the extent applicable, the execution, delivery
and performance of this Agreement, the Certificate of Merger and all other documents and
instruments to be delivered by them pursuant hereto and thereto.

22

 

                    (ii) A certificate, dated the Closing Date, executed
by Richard G. McKee, Jr., as
Director of each of the Parent and Acquisition Corp., certifying as to satisfaction of the
conditions set forth in Section 7.2(c) and certifying that, except for the filing
of the Certificate of Merger: (i) all consents, authorizations, orders and approvals of,
and filings and registrations with, any court, governmental body or instrumentality that
are required for the execution and delivery of this Agreement and the Certificate of Merger
and the consummation of the Merger shall have been duly made or obtained, and all material
consents by third parties required for the Merger have been obtained; and (ii) no action or
proceeding before any court, governmental body or agency has been threatened, asserted or
instituted to restrain or prohibit, or to obtain substantial damages in respect of, this
Agreement or the Certificate of Merger or the carrying out of the transactions contemplated
by any of the Merger Documents.

                    (iii) The executed resignations of the Parent’s
Board of Directors and Executive
Officers, with the resignations to take effect at the Effective Time.

                    (iv) Evidence as of a date within 10 days of the
Effective Time of the good standing
and corporate existence of Parent issued by the Secretary of State of Delaware.

                    (v) Evidence as of a date within 10 days of the
Effective Time of the good standing
and corporate existence of Acquisition Corp. issued by the Secretary of State of Delaware.

                    (vi) Such additional supporting documentation and
other information with respect to
the transactions contemplated hereby as the Company may reasonably request.

               (e) No Restraining Action. No action or proceeding before any court, governmental body or
agency shall have been threatened, asserted or instituted to restrain or prohibit, or to obtain
substantial damages in respect of, this Agreement or the Certificate of Merger or the carrying out
of the transactions contemplated by the Merger Documents.

               (f) Proceedings and Documents. All corporate and other proceedings and actions taken in
connection with the transactions contemplated hereby and all certificates, opinions, agreements,
instruments and documents mentioned herein or incident to any such transactions shall be
satisfactory in form and substance to the Company. Parent and Acquisition Corp. shall furnish to
the Company such supporting documentation and evidence of satisfaction of any or all of the conditions specified in this
Section 7.2 as the Company may reasonably request.

     8. Survival of Representations and Warranties. The representations and warranties of the
parties made in Sections 2 and 3 of this Agreement (including the Schedules to the Agreement which
are hereby incorporated by reference) shall survive for 24 months beyond the Effective Time. This
Section 8 shall not limit any claim for fraud or any covenant or agreement of the parties which by
its terms contemplates performance after the Effective Time.

23

 

     9. Amendment of Agreement. This Agreement and the Certificate of Merger may be amended or
modified at any time in all respects by an instrument in writing executed (i) in the case of this
Agreement by the parties hereto and (ii) in the case of the Certificate of Merger by the parties
thereto.

     10. Definitions. Unless the context otherwise requires, the terms defined in this Section
10 shall have the meanings herein specified for all purposes of this Agreement, applicable to both
the singular and plural forms of any of the terms herein defined.

          “Acquisition Corp.” means VYREX ACQUISITION CORPORATION, a Delaware corporation.

          “Acquisition Proposal” shall have the meaning assigned to such term in Section 5.2(d)
hereof.

          “Affiliate” shall mean any Person that directly or indirectly controls, is controlled
by, or is under common control with, the indicated Person.

          “Agreement” shall mean this Agreement.

          “Balance Sheet” and “Balance Sheet Date” shall have the meanings assigned to such
terms in Section 2.9 hereof.

          “Benefit Arrangements” shall have the meaning assigned to it in Section 2.12 hereof.

          “Certificate of Merger” shall have the meaning assigned to it in the second recital of
this Agreement. “Closing” and “Closing Date” shall have the meanings assigned to such terms
in Section 11 hereof.

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

          “Commission” or “SEC” shall mean the U.S. Securities and Exchange Commission.

          “Company” shall mean PowerVerde, Inc., a Delaware corporation.

          “Company Common Stock” shall have the meaning assigned to it in Section 1.5(a)(ii).

          “Company Benefit Plans” shall have the meaning assigned to it in Section 2.13 hereof.

          “Condition of the Company” shall have the meaning assigned to it in Section 2.2
hereof.

          “Condition of the Parent” shall have the meaning assigned to it in Section 3.13
hereof.

24

 

          “Constituent Corporations” shall have the meaning assigned to it in Section 1.4
hereof.

          “Default” shall mean a default or failure in the due observance or performance of any
covenant, condition or agreement on the part of the Company to be observed or performed
under the terms of this Agreement or the Certificate of Merger, if such default or failure
in performance shall remain unremedied for five days.

          “DGCL” shall have the meaning assigned to it in the second recital hereof.

          “Effective Time” shall have the meaning assigned to it in Section 1.2 hereof.

          “Equity Security” shall mean any stock or similar security of an issuer or any
security (whether stock or Indebtedness for Borrowed Money) convertible, with or without
consideration, into any stock or similar equity security, or any security (whether stock or
Indebtedness for Borrowed Money) carrying any warrant or right to subscribe to or purchase
any stock or similar security, or any such warrant or right.

          “ERISA” shall have the meaning assigned to it in Section 2.13 hereof.

          “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

          “Event of Default” shall mean (a) the failure of the Company to pay any Indebtedness
for Borrowed Money, or any interest or premium thereon, within five days after the same
shall become due, whether such Indebtedness shall become due by scheduled maturity, by
required prepayment, by acceleration, by demand or otherwise, (b) an event of default under
any agreement or instrument evidencing or securing or relating to any such Indebtedness, or
(c) the failure of the Company to perform or observe any material term, covenant, agreement
or condition on its part to be performed or observed under any agreement or instrument
evidencing or securing or relating to any such Indebtedness when such term, covenant or
agreement is required to be performed or observed.

          “Indebtedness” shall mean any obligation of the Company which under generally accepted
accounting principles is required to be shown on the balance sheet of the Company as a liability. Any obligation secured by a Lien on, or payable
out of the proceeds of production from, property of the Company shall be deemed to be
Indebtedness even though such obligation is not assumed by the Company.

          “Indebtedness for Borrowed Money” shall mean (a) all Indebtedness in respect of money
borrowed including, without limitation, Indebtedness which represents the unpaid amount of
the purchase price of any property and is incurred in lieu of borrowing money or using
available funds to pay such amounts and not constituting an account payable or expense
accrual incurred or assumed in the ordinary course of business of the Company, (b) all
Indebtedness evidenced by a promissory note, bond or similar written obligation to pay
money, or (c) all such Indebtedness guaranteed by the Company or for which the Company is
otherwise contingently liable.

25

 

          “Investment Company Act” shall mean the Investment Company Act of 1940, as amended.

          “Knowledge” and “know” means, when referring to any person or entity, the actual
knowledge of such person or entity of a particular matter or fact, and what that person or
entity would have reasonably known after reasonable inquiry. An entity will be deemed to
have “knowledge” of a particular fact or other matter if any individual who is serving, or
who has served, as an executive officer of such entity has actual “knowledge” of such fact
or other matter, or had actual “knowledge” during the time of such service of such fact or
other matter, or would have had “knowledge” of such particular fact or matter after
reasonable inquiry.

          “Lien” shall mean any mortgage, pledge, security interest, encumbrance, lien or charge
of any kind, including, without limitation, any conditional sale or other title retention
agreement, any lease in the nature thereof and the filing of or agreement to give any
financing statement under the Uniform Commercial Code of any jurisdiction and including any
lien or charge arising by statute or other law.

          “Merger” shall have the meaning assigned to it in the first recital hereof.

          “Merger Documents” shall have the meaning assigned to it in Section 2.5 hereof.

          “Parent” shall mean Vyrex Corporation, a Delaware corporation.

          “Parent Balance Sheet” and “Parent Balance Sheet Date” shall have the meanings
assigned to them in Section 3.13 hereof.

          “Parent Common Stock” shall have the meaning assigned to it in Section 3.4 hereof.

          “Parent Debt” shall have the meaning assigned to it in Section 6.7 hereof.

          “Parent Employee Benefit Plans” shall have the meaning assigned to it in Section 3.16
hereof.

          “Parent Financial Statements” shall have the meaning assigned to it in Section 3.8
hereof.

          “Parent SEC Documents” shall have the meaning assigned to it in Section 3.7(a) hereof.

          “Patent and Trademark Rights” shall have the meaning assigned to it in Section 2.16
hereof.

          “Permitted Liens” shall mean (a) Liens for taxes and assessments or governmental
charges or levies not at the time due or in respect of which the validity thereof shall
currently be contested in good faith by appropriate proceedings; (b) Liens in respect of
pledges or deposits under workmen’s compensation laws or similar legislation, carriers’,

26

 

warehousemen’s, mechanics’, laborers’ and materialmens’ and similar Liens, if the
obligations secured by such Liens are not then delinquent or are being contested in good
faith by appropriate proceedings; and (c) Liens incidental to the conduct of the business
of the Company that were not incurred in connection with the borrowing of money or the
obtaining of advances or credits and which do not in the aggregate materially detract from
the value of its property or materially impair the use made thereof by the Company in its
business.

          “Person” shall include all natural persons, corporations, business trusts,
associations, limited liability companies, partnerships, joint ventures and other entities
and governments and agencies and political subdivisions.

          “Representation Letter” shall have the meaning assigned to it in Section 4 hereof.

          “Securities Act” shall mean the Securities Act of 1933, as amended.

          “Stockholders” shall mean all of the stockholders of the Company.

          “Surviving Corporation” shall have the meaning assigned to it in Section 1.1 hereof.

          “Tax” or “Taxes” shall mean (a) any and all taxes, assessments, customs, duties,
levies, fees, tariffs, imposts, deficiencies and other governmental charges of any kind
whatsoever (including, but not limited to, taxes on or with respect to net or gross income,
franchise, profits, gross receipts, capital, sales, use, ad valorem, value added, transfer,
real property transfer, transfer gains, transfer taxes, inventory, capital stock, license,
payroll, employment, social security, unemployment, severance, occupation, real or personal
property, estimated taxes, rent, excise, occupancy, recordation, bulk transfer,
intangibles, alternative minimum, doing business, withholding and stamp), together with any
interest thereon, penalties, fines, damages costs, fees, additions to tax or additional amounts
with respect thereto, imposed by the United States (federal, state or local) or other
applicable jurisdiction; (b) any liability for the payment of any amounts described in
clause (a) as a result of being a member of an affiliated, consolidated, combined, unitary
or similar group or as a result of transferor or successor liability, including, without
limitation, by reason of Regulation section 1.1502-6; and (c) any liability for the
payments of any amounts as a result of being a party to any Tax Sharing Agreement or as a
result of any express or implied obligation to indemnify any other Person with respect to
the payment of any amounts of the type described in clause (a) or (b).

          “Tax Return” shall include all returns and reports (including elections, declarations,
disclosures, schedules, estimates and information returns (including Form 1099 and
partnership returns filed on Form 1065)) required to be supplied to a Tax authority
relating to Taxes.

          “US GAAP” shall have the meaning assigned to it in Section 2.9 hereof.

27

 

     11. Closing. The closing of the Merger (the “Closing”) shall occur concurrently with the
Effective Time (the “Closing Date”). The Closing shall occur at the offices of Carlton Fields,
P.A., 100 SE 2nd Street, Miami, Florida 33131. At the Closing, Parent shall present for
delivery to each Stockholder the certificate representing the Parent Common Stock to be issued
pursuant to Section 1.5(a)(ii) hereof to them pursuant to Sections 1.6 and 4 hereof. Such
presentment for delivery shall be against delivery to Parent and Acquisition Corp. of the
certificates, agreements and other instruments referred to in Section 7.1 hereof, and the
certificates representing all of the Company Common Stock issued and outstanding immediately prior
to the Effective Time. Parent will deliver at such Closing to the Company the officers’ certificate
referred to in Section 7.2 hereof. All of the other documents, certificates and agreements
referenced in Section 7 will also be executed as described therein. At the Effective Time, all
actions to be taken at the Closing shall be deemed to be taken simultaneously.

     12. Termination Prior to and After Closing.

          12.1 Termination of Agreement. This Agreement may be terminated at any time prior to the
Closing:

               (a) By the mutual written consent of the Company, Acquisition Corp. and Parent;

               (b) By the Company, if Parent or Acquisition Corp. (i) fails to perform in any material
respect any of its agreements contained herein required to be performed by it on or prior to the
Closing Date, (ii) materially breaches any of its representations, warranties or covenants
contained herein;

               (c) By either the Company, on the one hand, or Parent and Acquisition Corp., on the other
hand, if there shall be any order, writ, injunction or decree of any court or governmental or
regulatory agency binding on Parent, Acquisition Corp. or the Company, which prohibits or
materially restrains any of them from consummating the transactions contemplated hereby; or

               (d) By either the Company, on the one hand, or Parent and Acquisition Corp., on the other
hand, if the Closing has not occurred on or prior to February 29, 2008, for any reason other then a
breach by the terminating party.

          12.2 Termination of Obligations. Termination of this Agreement pursuant to this Section 12
shall terminate all obligations of the parties hereunder, except for the obligations under Sections
6.1, 13.3 and 13.9; provided, however, that (i) termination pursuant to paragraphs (b) or (c) of
Section 12.1 shall not relieve the defaulting or breaching party or parties from any liability to
the other parties hereto and (ii) in the event of a termination due to a breach by Parent or
Acquisition Corp., Parent shall pay to the Company within 30 days thereafter the Parent Debt plus
$50,000 (representing a previous advance by the Company to Parent).

     13. Miscellaneous.

          13.1 Notices. All notices, consents, waivers and other communications required or
permitted under this Agreement must be in writing and will be deemed to have been

28

 

given by a party (a) when delivered by hand; (b) one day after deposit with a nationally recognized
overnight courier service ; (c) five days after deposit in the United States mail, if sent by
certified mail, return receipt requested; or (d) when sent by facsimile with confirmation of
transmission by the transmitting equipment (a confirming copy of the notice shall also be delivered
by the method specified in (b)  above); in each case costs prepaid and to the following addresses
or facsimile numbers and marked to the attention of the person (by name or title) designated below
(or to such other address, facsimile number, or person as a party may designate by notice to the
other parties)

	 	 	 
	     If to Parent

	 
	 	 
	     or Acquisition Corp.:

	 	Vyrex Corporation
	 

	 	2159 Avenida de la Playa
	 

	 	La Jolla, California 92037
	 
	 	 
	   
	 	 
	     With a copy to:

	 	Robert B. Macaulay, Esq.
	 

	 	Carlton Fields, P.A.
	 

	 	100 S.E. 2nd Street, Suite 4000
	 

	 	Miami, Florida 33131
	 
	 	 
	   
	 	 
	     If to the Company:

	 	PowerVerde, Inc.
	 

	 	21615 N 2nd Avenue

Phoenix, Arizona 85027
	 

	 	Phoenix, Arizona 85021
	 

	 	Attn: George Konrad, President
	 
	 	 
	      With a copy to:

	 	James E. Brophy, Esq.
	 

	 	Ryley Carlock & Applewhite
	 

	 	One North Central Avenue, Suite 1200
	 

	 	Phoenix, Arizona 85004

          13.2 Entire Agreement. This Agreement, including the schedules and exhibits attached
hereto and other documents referred to herein, contains the entire understanding of the parties
hereto with respect to the subject matter hereof. This Agreement supersedes all prior agreements
and undertakings between the parties with respect to such subject matter.

          13.3 Expenses. Each party shall bear and pay all of the legal, accounting and other
expenses incurred by it in connection with the transactions contemplated by this Agreement.

          13.4 Time. Time is of the essence in the performance of the parties’ respective
obligations herein contained.

          13.5 Severability. Any provision of this Agreement that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions hereof, and any such prohibition
or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction.

          13.6 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors, assigns and heirs.

29

 

          13.7 No Third Parties Benefited. This Agreement is made and entered into for the sole
protection and benefit of the parties hereto, their successors, assigns and heirs, and no other
Person shall have any right or action under this Agreement. 

          13.8 Counterparts; Signature by Facsimile. This Agreement may be executed in counterparts,
each of which shall be deemed an original and all of which, when taken together, shall be deemed to
constitute one and the same instrument. The exchange of copies of this Agreement and of signature
pages by facsimile transmission shall constitute effective execution and delivery of this Agreement
as to the parties and may be used in lieu of the original Agreement for all purposes. Signatures of
the parties transmitted by facsimile or by PDF file shall be deemed to be their original signatures
for all purposes.

          13.9 Governing Law. The laws of the state of Delaware (without giving effect to its
conflicts of laws principles) govern all matters arising out of or relating to this Agreement and
all of the transactions it contemplates including without limitation, its validity, interpretation,
construction, performance, and enforcement.

          13.10 Venue; Submission to Jurisdiction.  Any action or proceeding arising out of or
relating to this Agreement or arising out of or in any manner relating to the relationship between
the parties shall only be brought in the state or federal courts in Maricopa County, Arizona or
Miami-Dade County, Florida, and each of the parties hereto submits to the personal jurisdiction of
such courts (and of the appropriate appellate courts wherever located) in any such action or
proceeding, and selects the courts in Maricopa County, Arizona or Miami-Dade County, Florida, for
proper venue in any such action or proceeding.  The prevailing party in any legal dispute shall be
entitled to recover its reasonable attorney’s fees and costs, including expert witness fees and all
costs of court, whether or not assessable under applicable law.

[Signature Page Follows]

30

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be binding and
effective as of the day and year first above written.

 

	 	 	 	 	 
	 

	 	PARENT:	 	 
	 
	 	 	 	 
	 

	 	VYREX CORPORATION,	 	 
	 

	 	a Delaware corporation	 	 
	 
	 	 	 	 
	 

	 	By: /s/ Richard G. McKee, Jr.
 

Name: Richard G. McKee, Jr.
	 	 
	 

	 	Title: Director	 	 
	 
	 	 	 	 
	 

	 	ACQUISITION CORP.:	 	 
	 
	 	 	 	 
	 

	 	VYREX ACQUISITION CORPORATION	 	 
	 

	 	a Delaware corporation	 	 
	 
	 	 	 	 
	 

	 	By:  /s/ Richard G. McKee, Jr.	 	 
	 

	 	 	 	 
	 

	 	Name: Richard G. McKee, Jr.	 	 
	 

	 	Title: Director	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	COMPANY:	 	 
	 
	 	 	 	 
	 

	 	POWERVERDE, INC.,	 	 
	 

	 	a Delaware corporation	 	 
	 
	 	 	 	 
	 

	 	By:  /s/ George Konrad	 	 
	 

	 	 	 	 
	 

	 	Name: George Konrad	 	 
	 

	 	Title: President	 	 
	 
	 	 	 	 

31

 

EXHIBIT “A”

CERTIFICATE OF MERGER OF

DOMESTIC CORPORATIONS

     Pursuant to Title 8, Section 251(c) of the Delaware General Corporation Law, the undersigned
corporation executed the following Certificate of Merger:

     FIRST: The name of the surviving Delaware corporation is PowerVerde, Inc., and the name
of the Delaware corporation being merged into this surviving corporation is Vyrex
Acquisition Corporation.

     SECOND: The Agreement of Merger has been approved, adopted, certified, executed and
acknowledged by each of the constituent corporations.

     THIRD: The name of the surviving Delaware corporation is PowerVerde, Inc.

     FOURTH: The Certificate of Incorporation of the surviving corporation shall be its
Certificate of Incorporation.

     FIFTH: The merger is to become effective immediately upon filing of this Certificate of
Merger.

     SIXTH: The Agreement of Merger is on file at 21615 N 2nd Avenue, Phoenix,
Arizona 85027, the place of business of the surviving corporation.

     SEVENTH: A copy of the Agreement of Merger will be furnished by the surviving
corporation on request, without cost, to any stockholder of the constituent corporations.

     IN WITNESS WHEREOF, said surviving corporation has caused this certificate to be signed by an
authorized officer, the 11th day of February, 2008.

	 	 	 	 	 
	 

	 	POWERVERDE, INC.	 	 
	 
	 	 	 	 
	 

	 	By: /s/ George Konrad	 	 
	 

	 	 

Name: George Konrad
	 	 
	 

	 	Title: President	 	 

 A-1

 

EXHIBIT “B”

POST-CLOSING PARENT AND SURVIVING CORPORATION

OFFICERS AND DIRECTORS

	 	 	 
	Name	 	Position(s)
	George Konrad

	 	President, Treasurer, Director
	 
	 	 
	Fred Barker

	 	Vice President, Secretary, Director
	 
	 	 
	Richard H. Davis

	 	Director

 A-2

 

EXHIBIT “C”

PARENT POST-CLOSING CAPITALIZATION TABLE

	 	 	 	 	 	 	 	 	 
	 	 	No. of Shares	 	Percent
	Original Vyrex Shareholders
	 	 	1,294,144	 	 	 	5.0	%
	Former PowerVerde Shareholders
	 	 	24,588,734	 	 	 	95.0	%

 A-3

 

 PowerVerde, Inc.

Stockholders

	 	 	 	 	 	 	 	 	 
	Stockholder	 	No. of Shares	 	% Owned
	George Konrad
	 	 	10,020,000	 	 	 	49.1	%
	Fred Barker
	 	 	3,000,000	 	 	 	14.7	%
	Bill Tucker
	 	 	600,000	 	 	 	2.94	%
	Chris Tucker
	 	 	600,000	 	 	 	2.94	%
	Ray Beahn
	 	 	800,000	 	 	 	3.92	%
	Martinez-Ayme Securities
	 	 	980,000	 	 	 	4.80	%
	Alfredo F. Ayme
	 	 	100,000	 	 	 	0.49	%
	Les Anderton Trust
	 	 	200,000	 	 	 	0.98	%
	Salvatore Autera
	 	 	100,000	 	 	 	0.49	%
	Vince Beatty
	 	 	200,000	 	 	 	0.98	%
	Mark Block
	 	 	225,000	 	 	 	1.10	%
	Leon Breece
	 	 	200,000	 	 	 	0.98	%
	Mario R. Cappelletti
	 	 	50,000	 	 	 	0.25	%
	William Chester
	 	 	50,000	 	 	 	0.25	%
	Lori W. Davis
	 	 	100,000	 	 	 	0.49	%
	Louise Davis
	 	 	50,000	 	 	 	0.25	%
	Paul K. Duffy
	 	 	100,000	 	 	 	0.49	%
	Dynamic Value Partners Ltd.
	 	 	100,000	 	 	 	0.49	%
	Robert Ehrman
	 	 	100,000	 	 	 	0.49	%
	William Forshee
	 	 	200,000	 	 	 	0.98	%
	Edward Gomez (Emmett A. Larkin Company Inc. C/F Edward C. Gomez Transfer IRA)
	 	 	400,000	 	 	 	1.96	%
	Eric Littman
	 	 	200,000	 	 	 	0.98	%
	Kevin Lockwood
	 	 	200,000	 	 	 	0.98	%
	Reynaldo A. Martinez
	 	 	100,000	 	 	 	0.49	%
	Richard G. McKee Jr.
	 	 	425,000	 	 	 	2.08	%
	Steven McKnight
	 	 	300,000	 	 	 	1.47	%
	Juan Mendez
	 	 	100,000	 	 	 	0.49	%
	Ronald Mozick
	 	 	200,000	 	 	 	0.98	%
	Fidel Pijeira
	 	 	50,000	 	 	 	0.25	%
	Magdiel Rodriguez
	 	 	100,000	 	 	 	0.49	%

 A-4

 

	 	 	 	 	 	 	 	 	 
	Stockholder	 	No. of Shares	 	% Owned
	Jeffrey Sweet
	 	 	200,000	 	 	 	0.98	%
	James E. Foulk
	 	 	50,000	 	 	 	0.25	%
	Don Leach
	 	 	50,000	 	 	 	0.25	%
	Len Friedman
	 	 	25,000	 	 	 	0.12	%
	Robert Moliski
	 	 	12,500	 	 	 	0.06	%
	Robert Bach
	 	 	12,500	 	 	 	0.06	%
	Edward Gomez
	 	 	50,000	 	 	 	0.25	%
	Douglas Harker
	 	 	25,000	 	 	 	0.12	%
	Greg Ormond
	 	 	25,000	 	 	 	0.12	%
	Lynn Ross
	 	 	12,500	 	 	 	0.06	%
	Denise Lindsay/MMA
	 	 	50,000	 	 	 	0.25	%
	Michael J. Stasko
	 	 	12,500	 	 	 	0.06	%
	Andrew Hellinger
	 	 	25,000	 	 	 	0.12	%
	 
	TOTAL
	 	 	20,400,000	 	 	 	100	%

 A-5Exhibit 10.2

 

Exhibit 10.2

SERVICES AGREEMENT

     This
SERVICES AGREEMENT (the “Agreement”) is entered into this
1st day of February, 2008 (the
“Effective Date”), by and between FRED BARKER dba BARKER ENGINEERING (“Barker Engineering”), and
POWERVERDE, INC., a Delaware corporation (“PowerVerde”).

Recitals

	A.	 	PowerVerde has applied for certain patents and holds other intellectual property
(individually and collectively the “Intellectual Property”) created in connection with the
development of an engine which will be driven by excess heat derived from other sources (the
“Engine”). The Engine and the Intellectual Property are hereinafter called the “Technology.”

	B.	 	Barker Engineering possesses certain technological and engineering skills that are critical
to PowerVerde in the development of the Technology.

	C.	 	Fred Barker, a principal and shareholder of PowerVerde, is also the owner of Barker
Engineering.

	D.	 	The purpose of this Agreement is to formally memorialize the terms and conditions under which
Barker Engineering will make its services available to PowerVerde.

Agreement

     1. Services. Barker Engineering will perform engineering and other development
services in connection with the development of the Technology as PowerVerde may require.
PowerVerde will use its best commercially reasonable efforts to notify Barker Engineering in
advance of its service requirements and the time for effecting delivery of all services. Services
will be performed by Barker Engineering in accordance with the specifications furnished by
PowerVerde, unless Barker Engineering is retained by PowerVerde to provide specifications for any
aspect of the Technology.

     2. Ownership of Inventions. Any inventions or innovations made or created by Barker
Engineering, or any of its employees or agents while performing services for PowerVerde, shall be
the exclusive property of PowerVerde and Barker Engineering hereby assigns to PowerVerde any such
inventions.

     3. Rate. Barker Engineering will charge PowerVerde for the services performed by Fred
Barker on behalf of Barker Engineering in connection with engineering required for the Technology
at the rate of $60.00 per hour. Barker Engineering shall record all time for services rendered in
an accurate manner in increments no greater than one-quarter of an hour.

     4. Expenses. PowerVerde agrees to reimburse Barker Engineering for all reasonable
expenses incurred by Barker Engineering on behalf of PowerVerde that are not reimbursed under
another provision of this Agreement. Barker Engineering shall present PowerVerde with an

 

 

itemized listing of expenses (with back-up information, if requested) in order to obtain
reimbursement for such expenses.

     5. Term. This Agreement shall remain in effect until terminated by either party.

     6. Termination. This Agreement may be terminated by a either party by delivering
written notice of termination to the other party; provided that termination shall not be effective
until the 61st day after written notice of termination has been delivered to the other party.

     7. PowerVerde Board Approval. Notwithstanding Section 6 above, this Agreement shall
automatically terminate 120 days after the Effective Date unless this Agreement is approved by an
independent majority of the Board of Directors of PowerVerde, exclusive of Mr. Fred Barker.

     8. Insurance. Barker Engineering shall maintain such insurance coverage on PowerVerde
and Barker Engineering may agree from time to time.

     9. Amendments. This Agreement may be amended only by a writing executed by both
parties hereto.

     10. Settlement of Disputes. Should any disputes arise between the parties in
connection with this Agreement, the parties shall use their best efforts to resolve the dispute
through the negotiation between the parties. Any such dispute not satisfactorily settled by
negotiation, after 30 days, may be brought as a claim(s) by either party in a court of law having
jurisdiction over the subject matter hereof. The prevailing party in any such dispute shall be
entitled to recover its reasonable attorneys’ fees and costs incurred in connection with such
dispute.

     11. Entire Agreement. This Agreement shall constitute the entire and only agreement
between the parties with respect to the subject matter hereof and supersedes all negotiations or
communications between the parties prior to the execution of this Agreement concerning the subject
matter hereof

     12. Governing Law. This Agreement is entered into and shall be governed by the
substantive laws of the State of Arizona, without regard to conflict of law principles.

     13. Jurisdiction. In the event of any dispute between the parties, jurisdiction and
venue shall lie solely in the state or federal courts located in Maricopa County, Arizona, and by
executing this Agreement, each party consents to the jurisdiction and venue of such courts and
hereby waives any objection or defense such party may have thereto.

     14. Attorneys’ Fees. In the event of any dispute between the parties, the prevailing
party shall be entitled to recover its attorneys’ fees and costs of court, including any expert
witness fees.

     15. Successors and Assigns. This Agreement shall be binding on each of the party’s
and the successors and assigns of any such party.

2

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be as of the day and year
first above written.

	 	 	 	 	 	 	 
	 	 	“Barker Engineering”	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Fred Barker	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Fred Barker	 	 
	 
	 	 	 	 	 	 
	 	 	“PowerVerde”	 	 
	 
	 	 	 	 	 	 
	 	 	PowerVerde, Inc., a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ George Konrad	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:	 	President	 	 
	 

	 	 	 	 	 	 

3

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