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.”
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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"), th
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