Exhibit 10.1

SEPARATION AGREEMENT AND RELEASE

This Separation Agreement and Release ("Agreement") is made by and between Todd
L. Zelek ("Employee") and Cavtiation Technologies, Inc., a Nevada corporation
(the "Company") (collectively referred to as the "Parties" or individually
referred to as a "Party").

RECITALS

WHEREAS, Employee was employed by the Company as the Company's Chairman and
Chief Executive Officer;

WHEREAS, Employee signed an Confidential Information and Invention Assignment
Agreement with the Company on October 10, 2012 (the "Confidentiality
Agreement");

WHEREAS, the Company granted Employee an option to purchase 10,000,000 shares of
Company common stock at an exercise price of $0.03 per share (the "Options ").

WHEREAS, the Employee terminated his employment with the Company effective
October 12, 2012 (the "Termination Date"); and

WHEREAS, the Parties wish to resolve any and all disputes, claims, complaints,
grievances, charges, actions, petitions, and demands that the Employee may have
against the Company and any of the Releasees as defined below, including, but
not limited to, any and all claims arising out of or in any way related to
Employee's employment with or separation from the Company.

NOW, THEREFORE, in consideration of the mutual promises made herein, the Company
and Employee hereby agree as follows:

1. Consideration.

a. Payment. The parties acknowledge that the Employee has accrued earned but
unpaid salary and other compensation in the amount of $203,843.97 . through
October 12, 2012 The parties agree that the Employee shall be paid his accrued
salary and bonuses in an amount equal to that paid to any other Company
employees in that particular month for their previously accrued salaries. In all
cases above, each payment shall reduce the accrued amount owed to Employee until
Employee shall have an outstanding balance of zero dollars owed. The payments
shall be processed in accordance with the Company's normal payroll practices. If
executives of the Company are awarded cash bonuses after October 1, 2012,
executives will be paid only after all accrued salary and benefits (set forth in
1(b) have been paid to the Employee. If for some reason an executive is paid an
accrued amount that is in excess of that received by other executives, Employee
will receive that higher amount.

b. Accrued Benefits. The parties acknowledge that Employee has accrued $16,500
in unpaid employee benefits. These benefits shall be repaid in a flat amount
equal to the same accrued amount paid to any other Company employees in a
particular month as payment for accrued benefits.

c. Warant. As consideration for extending the terms of the Employee Loan, the
Company will grant Executive a warrant to purchase 7,500,000 shares of Common
Stock at an exercise price of $0.05 per share and the Employee will immediately
forfeit 10,000,000 Options that were previously granted to Employee. The warrant
shall contain cashless exercise provisions and have a 10 year term.

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d. Restricted Stock. The Company has previously issued the Employee 2,000,000
shares of restricted common stock. The Employee will return the 2,000,000 shares
to the Company for cancellation along with medallion stock powers. This stock
will be returned as soon as the Employee receives the warrant mentioned above in
Section 1(c). .

e.Employee Loan. The parties acknowledge that the Employee has previously loaned
the Company the sum of $100,000.00 which, with interest, has accumulated to a
total of $109,000.00 (the "Employee Loan"). The Company may not incur new
indebtedness that is senior to the Employee loan without repaying the Employee
Loan in full. The parties agree on the following repayment plan for the Employee
loan

1. Accrued interest of $9,000.00 will be repaid at a rate of $3,000.00 per month
during the months of October, November and December of 2012;

2. Continuing interest at a rate of $1,250 per month (15% per annum) will be
paid monthly in arrears on the first day of each month beginning November 1,
2012.

3. If the Company receives cash in any month (regardless of source) in excess of
$125,000 per month, the Company will make a principal reduction payment on the
Employee Note in an amount equal to 25% of the cash received in that month in
excess of $125,000.00 (the "Excess Cash").

4. The balance of the Employee Note which is left over after all Excess Cash
reductions shall become fully due and payable on October 1, 2013. If the
Employee Note is not paid in full prior to October 1, 2013, the Employee shall
have the right to convert the outstanding principal amounts into shares of the
Company's Common Stock at a conversion price per share equal to the lowest
closing price of the Company's Common Stock in the 30 days prior to conversion
multiplied by 0.6. Also, if the Employee Note is not paid in full prior to
October 1, 2013, other terms and conditions may be renegotiated if both parties
agree.

5. the Company has the right to pre-pay the loan at any time.

6. Should the Company enter into any new financing arrangement, the Employee
will have the option of exchanging the remaining principal of the Employee Note
for a similar instrument with the terms and conditions of that new financing.

2. Indemnification of Employee. Employee will be entitled to Indemnification
inaccordance with Company bylaws and Nevada law and the Company's D&O policy.
The Company shall pay all legal fees incurred be Employee in defending a third
party lawsuit where the Employee is named as a consequence of his participation
as an officer and director of the Company, except as limited by law and public
policy.

3. Release of Claims. Employee agrees that the foregoing consideration
represents settlement in full of all outstanding obligations owed to Employee by
the Company and its current and former officers, directors, employees, agents,
investors, attorneys, shareholders, administrators, affiliates, benefit plans,
plan administrators, insurers, trustees, divisions, and subsidiaries, and
predecessor and successor corporations and assigns (collectively, the
"Releasees"). Employee, on his own behalf and on behalf of his respective heirs,
family members, executors, agents, and assigns, hereby and forever releases the
Releasees from, and agrees not to sue concerning, or in any manner to institute,
prosecute, or pursue, any claim, complaint, charge, duty, obligation, demand, or
cause of action relating to any matters of any kind, whether presently known or
unknown, suspected or unsuspected, that Employee may possess against any of the
Releasees arising from any omissions, acts, facts, or damages that have occurred
up until and including the Effective Date of this Agreement, including, without
limitation:

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a. any and all claims relating to or arising from Employee's employment
relationship with the Company and the termination of that relationship;

b. any and all claims relating to, or arising from, Employee's right to
purchase, or actual purchase of shares of stock of the Company, including,
without limitation, any claims for fraud, misrepresentation, breach of fiduciary
duty, breach of duty under applicable state corporate law, and securities fraud
under any state or federal law;

c. any and all claims for wrongful discharge of employment; termination in
violation of public policy; discrimination; harassment; retaliation; breach of
contract, both express and implied; breach of covenant of good faith and fair
dealing, both express and implied; promissory estoppel; negligent or intentional
infliction of emotional distress; fraud; negligent or intentional
misrepresentation; negligent or intentional interference with contract or
prospective economic advantage; unfair business practices; defamation; libel;
slander; negligence; personal injury; assault; battery; invasion of privacy;
false imprisonment; conversion; and disability benefits;

d. any and all claims for violation of any federal, state, or municipal statute,
including, but not limited to, Title VII of the Civil Rights Act of 1964; the
Civil Rights Act of 1991; the Rehabilitation Act of 1973; the Americans with
Disabilities Act of 1990; the Equal Pay Act; the Fair Labor Standards Act; the
Fair Credit Reporting Act; the Age Discrimination in Employment Act of 1967; the
Older Workers Benefit Protection Act; the Employee Retirement Income Security
Act of 1974; the Worker Adjustment and Retraining Notification Act; the Family
and Medical Leave Act; the Sarbanes-Oxley Act of 2002; the California Family
Rights Act; the California Labor Code; the California Workers' Compensation Act;
and the California Fair Employment and Housing Act;

e. any and all claims for violation of the federal or any state constitution;

f. any and all claims arising out of any other laws and regulations relating to
employment or employment discrimination;

g. any claim for any loss, cost, damage, or expense arising out of any dispute
over the nonwithholding or other tax treatment of any of the proceeds received
by Employee as a result of this Agreement; and

h. any and all claims for attorneys' fees and costs.

Employee agrees that the release set forth in this section will be and remain in
effect in all respects as a complete general release as to the matters released.
This release does not extend to any obligations incurred under this Agreement.
This release does not release claims that cannot be released as a matter of law,
including, but not limited to, Employee's right to file a charge with or
participate in a charge by the Equal Employment Opportunity Commission, or any
other local, state, or federal administrative body or government agency that is
authorized to enforce or administer laws related to employment, against the
Company (with the understanding that any such filing or participation does not
give Employee the right to recover any monetary damages against the Company;
Employee's release of claims herein bars Employee from recovering such monetary
relief from the Company).

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4. Acknowledgment of Waiver of Claims under ADEA. Employee acknowledges that he
is waiving and releasing any rights he may have under the Age Discrimination in
Employment Act of 1967 ("ADEA"), and that this waiver and release is knowing and
voluntary. Employee agrees that this waiver and release does not apply to any
rights or claims that may arise under the ADEA after the Effective Date of this
Agreement. Employee acknowledges that the consideration given for this waiver
and release is in addition to anything of value to which Employee was already
entitled. Employee further acknowledges that he has been advised by this writing
that: (a) he should consult with an attorney prior to executing this Agreement;
(b) he has twenty-one (21) days within which to consider this Agreement; (c) he
has seven (7) days following his execution of this Agreement to revoke this
Agreement; (d) this Agreement will not be effective until after the revocation
period has expired; and (e) nothing in this Agreement prevents or precludes
Employee from challenging or seeking a determination in good faith of the
validity of this waiver under the ADEA, nor does it impose any condition
precedent, penalties, or costs for doing so, unless specifically authorized by
federal law. In the event Employee signs this Agreement and returns it to the
Company in less than the 21-day period identified above, Employee hereby
acknowledges that he has freely and voluntarily chosen to waive the time period
allotted for considering this Agreement.

5. California Civil Code Section 1542. Employee acknowledges that he has been
advised to consult with legal counsel and is familiar with the provisions of
California Civil Code Section 1542, a statute that otherwise prohibits the
release of unknown claims, which provides as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.

Employee, being aware of said code section, agrees to expressly waive any rights
he may have thereunder, as well as under any other statute or common law
principles of similar effect.

6. No Pending or Future Lawsuits. Employee represents that he has no lawsuits,
claims, or actions pending in his name, or on behalf of any other person or
entity, against the Company or any of the other Releasees. Employee also
represents that he does not intend to bring any claims on his own behalf or on
behalf of any other person or entity against the Company or any of the other
Releasees.

7. Confidentiality. Employee agrees to maintain in complete confidence the
existence of this Agreement, the contents and terms of this Agreement, and the
consideration for this Agreement (hereinafter collectively referred to as
"Separation Information"). Except as required by law, Employee may disclose
Separation Information only to his immediate family members, the Court in any
proceedings to enforce the terms of this Agreement, Employee's attorney(s), and
Employee's accountant and any professional tax advisor to the extent that they
need to know the Separation Information in order to provide advice on tax
treatment or to prepare tax returns, and must prevent disclosure of any
Separation Information to all other third parties. Employee agrees that he will
not publicize, directly or indirectly, any Separation Information.

8. Trade Secrets and Confidential Information/Company Property. Employee
reaffirms and agrees to observe and abide by the terms of the Confidentiality
Agreement, specifically including the provisions therein regarding nondisclosure
of the Company's trade secrets and confidential and proprietary information, and
nonsolicitation of Company employees. Employee's signature below constitutes his
certification under penalty of perjury that he has returned all documents and
other items provided to Employee by the Company, developed or obtained by
Employee in connection with his employment with the Company, or otherwise
belonging to the Company.

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9. No Cooperation. Employee agrees that he will not knowingly encourage,
counsel, or assist any attorneys or their clients in the presentation or
prosecution of any disputes, differences, grievances, claims, charges, or
complaints by any third party against any of the Releasees, unless under a
subpoena or other court order to do so or as related directly to the ADEA waiver
in this Agreement. Employee agrees both to immediately notify the Company upon
receipt of any such subpoena or court order, and to furnish, within three (3)
business days of its receipt, a copy of such subpoena or other court order. If
approached by anyone for counsel or assistance in the presentation or
prosecution of any disputes, differences, grievances, claims, charges, or
complaints against any of the Releasees, Employee will state no more than that
he cannot provide counsel or assistance.

10. Nondisparagement. Employee agrees to refrain from any disparagement,
defamation, libel, or slander of any of the Releasees, and agrees to refrain
from any tortious interference with the contracts and relationships of any of
the Releasees.

11. Breach. In addition to the rights provided in the "Attorneys' Fees" section
below, Employee acknowledges and agrees that any material breach of this
Agreement, unless such breach constitutes a legal action by Employee challenging
or seeking a determination in good faith of the validity of the waiver herein
under the ADEA, or of any provision of the Confidentiality Agreement will
entitle the Company immediately to recover and/or cease providing the
consideration provided to Employee under this Agreement and to obtain damages,
except as provided by law.

12. No Admission of Liability. Employee understands and acknowledges that this
Agreement constitutes a compromise and settlement of any and all actual or
potential disputed claims by Employee. No action taken by the Company hereto,
either previously or in connection with this Agreement, will be deemed or
construed to be (a) an admission of the truth or falsity of any actual or
potential claims or (b) an acknowledgment or admission by the Company of any
fault or liability whatsoever to Employee or to any third party.

13. Costs. The Parties will each bear their own costs, attorneys' fees, and
other fees incurred in connection with the preparation of this Agreement.

14. Indemnification. Employee agrees to indemnify and hold harmless the Company
from and against any and all loss, costs, damages, or expenses, including,
without limitation, attorneys' fees or expenses incurred by the Company arising
out of the breach of this Agreement by Employee, or from any false
representation made herein by Employee, or from any action or proceeding that
may be commenced, prosecuted, or threatened by Employee or for Employee's
benefit, upon Employee's initiative, direct or indirect, contrary to the
provisions of this Agreement. Employee further agrees that in any such action or
proceeding, this Agreement may be pled by the Company as a complete defense, or
may be asserted by way of counterclaim or cross-claim.

15. Authority. The Company represents and warrants that the undersigned has the
authority to act on behalf of the Company and to bind the Company and all who
may claim through it to the terms and conditions of this Agreement. Employee
represents and warrants that he has the capacity to act on his own behalf and on
behalf of all who might claim through him to bind them to the terms and
conditions of this Agreement. Each Party warrants and represents that there are
no liens or claims of lien or assignments in law or equity or otherwise of or
against any of the claims or causes of action released herein.

16. No Representations. Employee represents that he has had an opportunity to
consult with an attorney, and has carefully read and understands the scope and
effect of the provisions of this Agreement. Employee has not relied upon any
representations or statements made by the Company that are not specifically set
forth in this Agreement.

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17. Severability. In the event that any provision or any portion of any
provision hereof or any surviving agreement made a part hereof becomes or is
declared by a court of competent jurisdiction or arbitrator to be illegal,
unenforceable, or void, this Agreement will continue in full force and effect
without said provision or portion of provision.

18. Attorneys' Fees. Except with regard to a legal action challenging or seeking
a determination in good faith of the validity of the waiver herein under the
ADEA, in the event that either Party brings an action to enforce or effect its
rights under this Agreement, the prevailing Party will be entitled to recover
its costs and expenses, including the costs of mediation, arbitration,
litigation, court fees, and reasonable attorneys' fees incurred in connection
with such an action.

19. Entire Agreement. This Agreement represents the entire agreement and
understanding between the Company and Employee concerning the subject matter of
this Agreement and Employee's employment with and separation from the Company
and the events leading thereto and associated therewith, and supersedes and
replaces any and all prior agreements and understandings concerning the subject
matter of this Agreement and Employee's relationship with the Company, with the
exception of the Confidentiality Agreement and the warrant Agreement.

20. No Oral Modification. This Agreement may only be amended in a writing signed
by Employee and the Company.

21. Governing Law. This Agreement will be governed by the laws of the State of
California, without regard for choice-of- law provisions. The Parties consent to
personal and exclusive jurisdiction and venue in the State of California.

22. Effective Date. Employee understands that this Agreement will be null and
void if not executed by him within 48 hours of the date set forth on the first
page. This Agreement will become effective on the eighth (8th) day after
Employee signed this Agreement, so long as it has been signed by the Parties and
has not been revoked by either Party before that date (the "Effective Date").

23. Counterparts. This Agreement may be executed in counterparts and by
facsimile, and each counterpart and facsimile will have the same force and
effect as an original and will constitute an effective, binding agreement on the
part of each of the undersigned.

24. Voluntary Execution of Agreement. Employee understands and agrees that he
executed this Agreement voluntarily, without any duress or undue influence on
the part or behalf of the Company or any third party, with the full intent of
releasing all of his claims against the Company and any of the other Releasees.
Employee acknowledges that:

a. he has read this Agreement;

b. he has been represented in the preparation, negotiation, and execution of
this Agreement by legal counsel of his own choice or has elected not to retain
legal counsel;

c. he understands the terms and consequences of this Agreement and of the
releases it contains; and

d. he is fully aware of the legal and binding effect of this Agreement.

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IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective
dates set forth below.

       

/s/ Todd L. Zelek

       

Todd L. Zelek, an individual

 

 

 

Dated: October 12, 2012

                         

 

           

CAVITATION TECHNOLOGIES, INC.

 

 

 

 

Dated: October 12, 2012

     

By

 

/s/ Igor Gorodnitsky

           

Igor Gorodnitsky

           

President