SEPARATION AGREEMENT

THIS SEPARATION AGREEMENT (as the same may be amended, modified or supplemented
from time to time, the “Agreement”) is made and entered into as of February 8,
2011 (the “Effective Date”), by and between Sombrio Capital Corp., a Nevada
corporation (including its successors, the “Corporation”), and Ken MacAlpine
(“KM”).

WHEREAS, KM is the Corporation’s President, Chief Executive Officer, Chief
Financial Officer, Secretary, Treasurer, Director, and the beneficial owner of
5,000,000 shares of the Corporation’s common stock, held by KIF Capital Corp., a
corporation that KM has the sole voting and dispositive power over the
securities held for the account of (the “KM Shares”); and

WHEREAS, it is KM's desire to now resign as the Corporation's sole Officer and
Director;

 

 

 

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

1. Resignation.  The parties hereby agree that the employment arrangement
between KM and the Corporation pursuant to which KM serves as the Corporation’s
President, Chief Executive Officer, and any other position with the Corporation
is automatically and without further action terminated as of the Effective Date.
Except as expressly provided in this Agreement, all rights and obligations of KM
and the Corporation with respect to KM’s employment with the Corporation are
duly and effectively terminated as of the Effective Date.  As of the Effective
Date, KM resigns from the Corporation’s Board of Directors.  After the Effective
Date, KM agrees to cooperate with the Corporation as is reasonably necessary to
assist on transitional and resale registration statement issues.  As of the
Effective Date, KM agrees that he shall not represent to any third party that he
is acting as an officer or director of the Corporation.  

2. Cancellation of Shares.  After the Effective Date, if the KM Shares are not
cancelled by the twentieth day following the Effective Date, (the “Cancellation
Date”), the KM Shares (the “Cancellation Shares”) of the Corporation’s common
stock (the “Common Stock”) beneficially owned by KM, as well as any other
securities of the Corporation owned by KM including shares issued to KIF Capital
Corp., a private company controlled by KM, and including common stock, options,
warrants, rights, notes, debentures, and preferred stock, shall be deemed
cancelled (the “Share Cancellation”), resulting in KM owning after the Share
Cancellation no shares of Common Stock or any other securities of the
Corporation. Without limiting the foregoing, on or prior to the Cancellation
Date, KM shall deliver to the Corporation (and/or its designees) stock
certificates representing the Cancellation Shares owned by him along with stock
powers signed in blank and medallion signature guaranteed, or other signature
guarantee

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acceptable to the Company's transfer agent. On or prior to the Cancellation
Date, KM shall deliver to the Corporation certificates representing any other
shares of the Corporation’s securities that KM may own along with stock powers
containing medallion guarantee, or other acceptable signature guarantee,(or such
other appropriate transfer documents).   

3. Benefits.  KM will not be eligible for any compensation or employer-sponsored
benefits after the Effective Date.

4. Payment to KM. Immediately after the execution of this Agreement by all of
the parties hereto, the Cancellation Shares shall be delivered to the
Corporation with appropriate stock powers medallion signature guaranteed, or
other form of signature guarantee acceptable to the Company's transfer agent,
and the Corporation shall pay KM the sum of $100,000, which sum has already been
delivered to KM and which KM acknowledges receipt of.

5. Corporation Property. KM represents, warrants and covenants that he has
returned to the Corporation, or will return to the Corporation on or before the
Effective Date, all Corporation property including, but not limited to, credit
cards, cash cards, banking information, computers, telecommunications equipment
and keys.

6.  Representations by and Covenants of KM.  KM hereby represents and warrants
to the Corporation that:

a.

As of the Effective Date and assuming the Share Cancellation, KM shall not
beneficially own any shares of Common Stock or any other securities of the
Corporation including options, warrants, debentures or preferred stock.

b.

RESERVED.  

c.

RESERVED.   

d.

All issuances of Common Stock by the Corporation have been made in accordance
with applicable federal securities laws and the state securities laws of the
given states in which the securities were offered and/or sold.  Accordingly, the
Corporation will not be subject to contingent liabilities which could include,
without limitation, (i) rescission obligations and/or other liabilities for
damages to purchasers of Common Stock who resided in the States where the Common
Stock was offered and/or sold; and/or (ii) punitive damages, fines, penalties
and/or other sanctions which might be imposed in connection with any enforcement
actions brought by any such regulatory authorities of the States where the
Common Stock was offered and/or sold.   

e.

RESERVED.

f.

The Corporation has filed all reports required to be filed by it under the
Securities Act of 1933, as amended (the “Securities Act”), and the Securities

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Exchange Act of 1934, as amended (the “Exchange Act”), including pursuant to
Section 13(a) or Section 15(d) of the Exchange Act (the foregoing materials,
including the exhibits thereto, being collectively referred to herein as the
“SEC Reports”).  As of their respective dates,  the SEC Reports complied as to
form in all material respects with the requirements of the Securities Act and
the Exchange Act and the rules and regulations of the SEC promulgated
thereunder, as applicable, and none of the SEC Reports, when filed, contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.

       

7. Mutual Non-Disparagement.  KM solely on behalf of himself and his estate, and
the Corporation, for itself and on behalf of its officers, directors, partners,
managers, members, employees, agents, and attorneys, with regard to KM and his
employment with the Corporation and his service to the Corporation, expressly
acknowledge, agree, and covenant that they will not make any statements,
comments, or communications that could constitute disparagement of one another
or that may be considered to be derogatory or detrimental to the good name or
business reputation of one another.

8. Release.  In exchange for the consideration provided for in this Agreement,
KM irrevocably and unconditionally releases the Corporation , its predecessors,
parents, subsidiaries, affiliates, and past, present and future officers,
directors, agents, consultants, employees, representatives, and insurers, as
applicable, together with all successors and assigns of any of the foregoing
(collectively, the “Releasees”), of and from all claims, demands, actions,
causes of action, rights of action, contracts, controversies, covenants,
obligations, agreements, damages, penalties, interest, fees, expenses, costs,
remedies, reckonings, extents, responsibilities, liabilities, suits, and
proceedings of whatsoever kind, nature, or description, direct or indirect,
vested or contingent, known or unknown, suspected or unsuspected, in contract,
tort, law, equity, or otherwise, under the laws of any jurisdiction, that KM or
his predecessors, legal representatives, successors or assigns, ever had, now
has, or hereafter can, shall, or may have, against the Releasees, as set forth
above, jointly or severally, for, upon, or by reason of any matter, cause, or
thing whatsoever from the beginning of the world through, and including, the
date of this Agreement (“Claims”).

9. Confidentiality. The parties hereto agree that the terms and conditions of
this Agreement are confidential and further agree that they shall not divulge
the terms of this Agreement to third parties generally, except as required by
applicable law or to enforce this Agreement or to defend against a claim related
thereto; provided, however, that the parties may reveal such terms to their
respective accountants, legal counsel and other professional advisors. In the
event this covenant of confidentiality is breached, the Corporation and KM may
pursue legal remedies for any damage arising from a breach of this Section 9.
The parties agree that any press release or other public disclosure relating to
the contents of this Agreement shall be mutually acceptable to both parties
hereto. Notwithstanding the foregoing, the Corporation shall be under no
obligation to reach agreement with KM on the contents of any such public
announcement or disclosure

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required by applicable law, rule or regulation, including, but not limited to,
any public announcement or disclosure required by federal or state securities
laws, rules or regulations.  Notwithstanding anything provided elsewhere in this
Section 9, the parties may make any disclosure required by law, subpoena,
regulation or governing authority, including disclosure required by a
self-regulatory organization such as the Financial Industry Regulatory Authority
(“FINRA”) or the Securities and Exchange Commission (the “SEC”) and to their
respective lawyers and accountants.  KM hereby authorizes the Corporation to
disclose the terms and conditions of this Agreement in any filings it makes with
the SEC and authorizes the Corporation to file this Agreement as an exhibit to
any filings it makes with the SEC.

10. Cooperation.

a.

  KM agrees to give reasonable cooperation, at the Corporation's request, in any
pending or future litigation, regulatory proceeding or arbitration brought
against the Corporation or any of its affiliates and in any investigation the
Corporation or any of its affiliates may conduct. The Corporation shall
reimburse KM for all expenses reasonably incurred by him in compliance with this
Section 10(a), but shall not reimburse KM for his time spent in compliance with
this Section 10(a).  Furthermore, KM agrees, in the event he receives a court or
administrative order, subpoena, request for interview or similar demand
regarding the Corporation, including, but not limited to, from a regulatory or
law enforcement agency, he shall, except to the extent he is advised not to do
so by his legal counsel, immediately inform the Corporation in writing of his
receipt of such subpoena request or similar demand.

b.

The Corporation agrees to cause its employees, officers, directors, agents and
other representatives to give reasonable cooperation, at KM’s request, in any
threatened, pending or completed action, suit or proceeding (whether civil,
criminal, administrative, formal or informal investigative or other), whether
instituted by the any governmental agency, FINRA, the New York Stock Exchange,
SEC, stockholder of the Corporation, or any other party, or any inquiry or
investigation that KM in good faith believes might lead to the institution of
any such action, suit or proceeding brought against KM.

11. Acknowledgement of Consideration. KM acknowledges that the only
consideration that he has received for executing this Agreement is the
consideration set forth in this Agreement and that no other promise, inducement,
threat, agreement or understanding of any kind or description has been made with
or to KM by the Corporation to cause him to agree to the terms of this
Agreement.  KM acknowledges that other than as specifically set forth herein he
has no claims for money due from the Corporation.

12. Notices.  All notices, requests, demands and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given (i) on
the date of service if served personally on the party to whom notice is to be
given; (ii) on the day of transmission if sent via facsimile transmission to the
facsimile number given below, and telephonic confirmation of receipt is obtained
promptly after completion of

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transmission; (iii) on the day after delivery to Federal Express or similar
overnight courier or the Express Mail service maintained by the United States
Postal Service; or (iv) on the fifth (5th) day after mailing, if mailed to the
party to whom notice is to be given, by first class mail, registered or
certified, postage prepaid and properly addressed, to the party as follows:

If to the Corporation to:

   

   Sombrio Capital Corp.

   1150 Harry Hines Blvd.

   Suite #3

   Dallas, TX 75229

Phone:  866-649-0075

               

If to Ken MacAlpine to:

311 Tawny Rd.

Sarnia, Ontario N7S 5K1

CANADA

Phone:  519.542.1229

With a copy to:

Karen A. Batcher, Esq.

Synergen Law Group, APC

819 Anchorage Place, Suite 28

Chula Vista, CA 91914

Telephone: 619.475.7882

Facsimile: 619.512.5184

or at such other place as may be designated by a party in writing by like
notice.  

13. Further Assurances.  Each of the parties hereto shall execute and deliver
any and all additional papers, documents, and other assurances, and shall do any
and all acts and things reasonably necessary in connection with the performance
of their obligations hereunder and to carry out the intent of the parties
hereto.

14. Headings. The section headings contained herein are for convenience only and
shall not be deemed to control or affect the meaning or construction of any
provision of this Agreement.

15. Counterparts.  This Agreement may be executed in counterparts, it being
understood that such counterparts, taken together, shall constitute but one and
the same agreement.  A facsimile signature shall constitute an original
signature.

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16. Governing Law, Venue, Waiver of Jury Trial.  This Agreement shall be
governed by and construed solely and exclusively under and pursuant to the laws
of the State of New York as applied to agreements among New York residents
entered into and to be performed entirely within New York.  Each of the parties
hereto expressly and irrevocably: (1) agrees that any legal suit, action or
proceeding arising out of or relating to this Agreement will be instituted
exclusively in the New York State Supreme Court, County of New York, or in the
United States District Court for the Southern District of New York, (2) waives
any objection they may have now or hereafter to the venue of any such suit,
action or proceeding, and (3)  consents to the jurisdiction of either the
New York State Supreme Court, County of New York, or the United States District
Court for the Southern District of New York in any such suit, action or
proceeding.  Each of the parties hereto further agrees to accept and acknowledge
service of any and all process which may be served in any such suit, action or
proceeding in the New York State Supreme Court, County of New York, or in the
United States District Court for the Southern District of New York and agree
that service of process upon it mailed by certified mail to its address will be
deemed in every respect effective service of process upon it, in any such suit,
action or proceeding.

17. Entire Agreement.  This Agreement sets forth the entire agreement among the
parties with respect to the subject matter hereof and supersedes all prior
agreements or understandings among the parties pertaining to the subject matter
hereof, whether oral, implied or written.  There are no warranties,
representations or other agreements between the parties in connection with the
subject matter hereof except as specifically set forth or incorporated herein.

18. Interpretation. The division of this Agreement into Sections, and
subsections and the insertion of headings are for convenience of reference only
and will not affect its construction or interpretation. Terms of gender will be
deemed interchangeable, as will singular and plural terms, in each case, unless
the context otherwise requires.  

19. No Amendment/Waiver.  This Agreement may not be amended or modified in any
manner nor may any of its provisions be waived except by written amendment
executed by the parties expressly indicating the parties’ intention to so amend
or modify this Agreement.  Any such amendment, modification or waiver shall be
effective only in the specific instance and for the purpose for which it was
given.

20. Non-Assignability.  The obligations of KM and the Corporation hereunder are
personal and may not be assigned or transferred in any manner whatsoever, nor
are such obligations subject to involuntary alienation, assignment or transfer.

21. Severability.  The various Sections of this Agreement are severable, and if
any Sections or an identifiable part thereof is held to be invalid or
unenforceable by any court of competent jurisdiction, then such invalidity or
unenforceability shall not affect the validity or enforceability of the
remaining Sections or identifiable parts thereof in this Agreement, and the
parties hereto agree that the portion so held invalid, unenforceable or void
shall, if possible, be deemed amended or reduced in scope, or otherwise be
stricken

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from this Agreement, to the extent required for the purposes of the validity and
enforcement hereof.     

22. No Strict Construction.  The parties hereto have participated jointly in the
negotiation and drafting of this Agreement.  In the event any ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by all parties hereto, and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any provision of this Agreement.

23. Third Party Beneficiaries.   KM’s estate and heirs are intended third party
beneficiaries of KM’ rights and the Corporation’s obligations hereunder.

24.  RESERVD.  

25. RESERVED.

[SIGNATURE PAGE FOLLOWS]

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

SOMBRIO CAPITAL CORP.

By: /s/ Ken MacAlpine

Name:

Ken MacAlpine

Title:    President, Secretary, Treasurer, Chief

            Executive Officer and Chief Financial

            Officer

 

/s/ Ken MacAlpine

Ken MacAlpine

KEN MACALPINE

/s/ Ken MacAlpine

Ken MacAlpine

[Signature Page to Separation Agreement]

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