SEPARATION AGREEMENT
THIS
SEPARATION AGREEMENT
("Agreement") is made effective this 13 day of June, 2008, by and between XsunX,
Inc., a Colorado Corporation (“XsunX”) and Sencera, LLC, a North Carolina
Limited Liability Company (“Sencera”). XsunX and Sencera are herein referred to
individually as a “Party” and collectively as the “Parties.”
R E C I T A L S
WHEREAS,
effective on or about January 1, 2007, the Parties entered into a Technology
Development and License Agreement (“Technology Agreement”) and a Loan Agreement
(“Loan Agreement”) and Sencera executed a Promissory Note in favor of XsunX in
the principal sum of $1,500,000.00 bearing interest at the rate of 10% per
annum
(“Note”) all pertaining to that certain project identified in the Technology
Agreement (“Project);
WHEREAS,
certain
disputes have arisen between the Parties in regard to the Project and the above
agreements and instruments;
WHEREAS,
it is
the intent of the Parties hereto, subject to the terms and conditions set forth
in this Agreement, and upon payment of all principal and interest under the
Note
by Sencera to XsunX, to settle and release all claims between the Parties in
regard to the Project and the above agreements and instruments.
NOW,
THEREFORE,
in
consideration of the mutual promises contained herein, and other good and
valuable consideration, the sufficiency of which are hereby acknowledged, the
Parties hereto agree as follows:
ARTICLE
1.
TERMS
OF SETTLEMENT
1.1. Payment
of Note.
Sencera
shall, in exchange for the mutual releases set forth herein below, and subject
to the terms and conditions of this Agreement, pay to XsunX the sum of
$1,673,251.05
representing
the entire principal balance due under the Note plus interest
accrued through June 6, 2008. The
above
amount shall be payable
in full in cash or cash equivalent pursuant to immediately available funds
("Settlement Amount").
1.2. Termination
of Instruments.
Upon
receipt of the Settlement Amount in full in cash or cash equivalent pursuant
to
immediately available funds, the Technology Agreement, Loan Agreement, and
Note
shall be terminated and all obligations of the Parties thereunder shall be
deemed fully performed and discharged and all sums shall be deemed paid under
the Note and XsunX shall deliver to Sencera the original executed Note marked
“Paid and Satisfied in Full” and signed by a duly authorized officer of XsunX;
provided, however that the confidentiality provisions of sections 1.2 and 8
of
the Technology Agreement shall survive as contemplated in the Technology
Agreement.
1.3. Termination
of Intellectual Property Rights.
Upon
receipt of the Settlement Amount in full in cash or cash equivalent pursuant
to
immediately available funds, all rights, if any, of XsunX in or to the
intellectual property of Sencera under the Technology Agreement shall be
terminated. Concurrently, and subject to the representations, terms and
conditions of this Agreement, all rights, if any, of Sencera in or to the
intellectual property of XsunX under the Technology Agreement shall be
terminated.
1.4. Project.
The
Parties acknowledge that Sencera has provided to XsunX the written documents
and
reports in regard to the Project or otherwise under the Technology Agreement
as
listed in Exhibit “A” attached hereto and XsunX has provided to Sencera the
written documents and reports in regard to the Project or otherwise under the
Technology Agreement as listed in Exhibit “B” attached hereto. Each Party
represents to the other Party that the representing Party has not intentionally
misrepresented any material facts relating to the Project contained in the
written documents and reports provided by the representing Party. Neither Party
accepts or admits the truthfulness or accuracy of the assertions made in the
documents listed in the other Party’s Exhibit. XsunX acknowledges that Sencera
has disclosed to XsunX that pages 9 and 10 of Report 1 dated February 6, 2007
sent by Sencera to XsunX contain conflicting information of chamber cost
estimates and Sencera has disclosed to XsunX that this was not intentional
and
that Sencera thinks the estimates on page 10 are more accurate. XsunX further
acknowledges that Sencera has stated to XsunX that Sencera has produced a
licensed process to satisfy Phase II of the Technology Agreement notwithstanding
a prior letter by Sencera that was inconsistent with this representation. XsunX
agrees that neither of these discrepancies shall be a basis for a breach of
this
Agreement or for a claim that the other provisions of this Agreement are not
effective. Sencera acknowledges that XsunX is not agreeing hereby that Sencera
has produced a licensed process to satisfy Phase II. Each Party further
represents to the other Party that the representing Party has had the
opportunity to conduct, and has conducted, such investigations and due diligence
relating to the other Party and the Project as the representing Party deems
appropriate prior to entering into this Agreement. The Parties agree that the
documents listed in Exhibits “A” and “B” are confidential information under
Sections 1.2 and 8 of the Technology Agreement and are subject to the terms
thereof which survive the execution of this Agreement and the termination of
the
remainder of the Technology Agreement. The
Parties expressly acknowledge that disclosure is required by XsunX under the
Securities Exchange Act of 1934 (the “Act”), Generally Accepted Accounting
Principals ("GAAP"), the U.S. Securities and Exchange Commission ("SEC")
accounting rules requiring certain accounting or footnote disclosures, and
SEC
rules and regulations governing Form 8-K and Form 10-K under the Act, and that
subject to the above rules and regulations the material contents of this
Agreement as it relates to the disclosure requirements may be announced and
filed with the SEC by XsunX without opportunity for
Sencera
to
oppose such filing or reporting. XsunX does not anticipate the disclosure
by it of the contents of the documents listed in Exhibit “A” and will only
disclose the contents of the documents listed in Exhibit “A” if required to do
so under applicable law, rule, or regulation or by
a
valid and enforceable order issued by a court or agency, including the SEC,
of
competent jurisdiction. XsunX will use reasonable commercial efforts to
provide advanced written notice to Sencera if XsunX is required by the SEC
to
disclose the contents of any of the documents listed in
Exhibit “A.” While XsunX shall file said documents if so required by the SEC, it
will include a request for confidential treatment of said documents with any
such filing.
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1.5. Mutual
General Release.
Upon
the full payment of the Settlement Amount by Sencera to XsunX as aforementioned,
XsunX on the one hand and Sencera on the other hand, on behalf of such Party
and
the agents, servants, employees, representatives, successors, assigns, officers,
directors, members, managers, parents, subsidiaries, and affiliates of such
Party, shall, and hereby do, fully release and discharge the other Party, and
the agents, servants, employees, representatives, successors, assigns, officers,
directors, members, managers, parents, subsidiaries, and affiliates of such
other Party, from all rights, claims, liabilities, actions, causes of action,
and damages, which the one Party has or may have against the other Party with
respect to the matters set forth in or related to the Technology Agreement,
Loan
Agreement, and Note, whether known or unknown.
1.6. Waiver
of Civil Code Section 1542.
Each of
the Parties hereto knowingly and expressly waive the provisions of California
Civil Code Section 1542 pertaining to General Releases. California Civil Code
Section 1542 provides:
"A
general release does not extend to claims which the creditor does not know
or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the
debtor."
1.7. No
Admission of Liability.
This
Agreement is not an admission of liability by any of the Parties hereto for
any
purpose. The settlement set forth herein is of a contested matter and by
settling, no Party admits any liability in regard to any matter whatsoever.
1.8. Advice
of Counsel.
This
Agreement is freely and voluntarily entered into and executed by the Parties,
each of the Parties hereto being duly represented by counsel. Each of the
Parties have been advised of and understands the terms and conditions of this
Agreement.
1.9. Authority
to Execute Agreement.
Each
Party hereto represents and warrants that any individual executing this
Agreement on behalf of a corporate or limited liability company entity has
the
requisite power and authority to so execute this Agreement on behalf of the
corporation or limited liability company and bind any corporate or limited
liability company entity purported to be a Party hereto to the obligations
and
duties set forth herein.
1.10. Warranties
of All Parties.
Each
Party hereto represents and warrants that such Party has not assigned, sold
or
transferred, nor purported to have assigned, sold or transferred, any rights,
claims or actions herein released, including any rights, claims or actions
pertaining to the subject matter of this Agreement.
1.11. Non-Solicitation.
Each
Party acknowledges that all information pertaining to the officers and employees
of the other Party (“Employing/Engaging Party”) shall be deemed to constitute
confidential information hereunder and under the confidentiality provisions
of
section 8 of the Technology Agreement. Neither Party (nor their directors,
officers, employees, members, managers, parents, subsidiaries, or affiliates)
shall, directly or indirectly, solicit, employ, engage or otherwise obtain
the
services of any of the officers or employees of the other Employing/Engaging
Party for a period of two (2) years from the date of this Agreement without
the
prior written consent of the other Employing/Engaging Party.
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ARTICLE
2.
MISCELLANEOUS
2.1 Recitals.
The
recitals set forth above are incorporated herein by this reference and made
a
part of this Agreement.
2.2 Expenses.
Each of
the Parties shall pay all costs and expenses incurred or to be incurred by
it in
negotiation and preparing this Agreement, and in closing and carrying out the
transactions contemplated herein.
2.3. Effect
of Headings.
The
subject headings of the paragraphs and subparagraphs of this Agreement are
included for purposes of convenience only, and shall not affect the construction
or interpretation of any of its provisions.
2.4. Entire
Agreement; Modification; Waiver.
This
Agreement constitutes the entire agreement between the Parties hereto pertaining
to the subject matter contained in it and supersedes all prior and
contemporaneous agreements, representations and understandings of the Parties.
No waiver of any of the provisions of this Agreement shall be deemed, or shall
constitute a waiver of any other provision, whether or not similar, nor shall
any waiver constitute a continuing waiver. No waiver shall be binding unless
executed in writing by the Party making the waiver.
2.5. Severability.
Should
any provision or portion of this Agreement be held or otherwise become
unenforceable or invalid for any reason, the remaining provisions and portions
of this Agreement shall be unaffected by such unenforceability or
invalidity.
2.6. Parties
in Interest.
Nothing
in this Agreement, whether express or implied, is intended to confer any rights
or remedies under or by reason of this Agreement on any person other than the
Parties to it and their respective successors and assigns, nor is anything
in
this Agreement intended to relieve or discharge the obligation or liability
of
any third persons to any Party to this Agreement, nor shall any provision give
any third person any right of subrogation or action over against any Party
to
this Agreement.
2.7. Assignment.
This
Agreement shall be binding on, and shall inure to the benefit of the Parties
to
it and their respective heirs, legal representatives, successors and
assigns.
2.8. Specific
Performance.
Each
Party's obligations under this Agreement are unique. If any Party should default
in its obligations under the terms of this Agreement, the Parties each
acknowledge that it would be extremely impracticable to measure the resulting
damages; accordingly, the nondefaulting Party, in addition to any other
available rights or remedies, may xxx in equity for specific performance, and
the Parties hereto each expressly waive the defense that a remedy in damages
will be adequate.
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2.9. Recovery
of Litigation Costs.
If any
legal action, arbitration or other proceeding is brought for the enforcement
of
this Agreement, or because of an alleged dispute, breach, default or
misrepresentation in connection with any of the provisions of this Agreement,
the successful or prevailing Party or Parties shall be entitled to recover
as an
element of their damages reasonable attorney's fees and other costs incurred
in
that action or proceeding, in addition to any other relief to which said
prevailing Party may be entitled.
IN
WITNESS WHEREOF,
the
Parties to this Settlement Agreement have duly executed it to be effective
as of
the day first written above.
XsunX:
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XsunX,
Inc., a Colorado Corporation
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Dated:
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By:
_____________________________________
|
June
13, 2008
|
Xxx Xxxxxxxxx, CEO
|
Sencera:
|
|
Sencera,
LLC, a North Carolina Limited Liability
|
|
Company
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Dated:
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By:
____________________________________
|
June
13, 2008
|
Xx. Xxxxx Xxxxxx, Manager
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