|   | A. | On      or around May 19, 2008, MERIX sold certain equipment more particularly      described on Exhibit A attached hereto (the “Equipment”) to XSUNX for      $111,620.00. |
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|   | B. | Now      and at all times since such sale, the Equipment has been located on the      Premises. |
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|   | C. | As      security for its performance under the Sublease and pursuant to Section      3.3 of the Sublease, XSUNX caused Wells Fargo Bank, N.A. to issue its      Irrevocable Letter of Credit No. NZS904387 (the “Letter of Credit”) in      favor of MERIX in the amount of$106,000.00. |
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|   | D. | XSUNX      is in default under the Sublease for nonpayment of rent.  As of      this date, such default is in the amount of      $433,568.62.  Extending out its obligations until the expiration      of the Sublease, such default would total  $1,614,512.25. |
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|   | E. | MERIX      has retaken possession of the Premises, drawn the full amount under the      Letter of Credit and asserted its statutory landlord’s lien against the      Equipment. |
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|   | F. | XSUNX      and MERIX desire to permit XSUNX to vacate the Premises in an orderly      fashion and to fix its obligations under the Sublease at a reduced amount      pursuant to a promissory note and the sale back to MERIX of the Equipment,      all on the terms and conditions set forthbelow. |
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|   | 1. | Lease Termination;      Vacation of Premises.  XSUNX shall vacate the Premises in      accordance with the terms of the Sublease, under the supervision of MERIX,      on or before September 1st, 2009.  All of the Equipment shall      remain on the Premises at all times.  Upon such vacation, the      return of all keys to MERIX and MERIX’s approval of the condition of the      Premises, the Sublease shall be deemed terminated and of no further force      or effect, with such date memorialized by e-mail from MERIX to      XSUNX. |
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|   | 2. | Sale of the      Equipment.  XSUNX hereby sells to MERIX, as a bulk sale      and in accordance with all of the terms of the prior sale of the Equipment      by MERIX to XSUNX, including price (but with the parties reversed as      appropriate). XSUNX covenants and agrees to promptly execute and deliver      any and all documentation necessary or desirable in order to effectuate,      consummate or memorialize such sale as and when requested by      MERIX. |
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|   | 3. | Letter of      Credit.  XSUNX acknowledges and confirms its acceptance      and approval of the full drawdown of the Letter of Credit by MERIX and the      release of all such funds to MERIX as partial payment of past due      rent. |
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|   | 4. | Promissory      Note.  Simultaneously with the execution and delivery of      this Agreement, XSUNX shall and has made and delivered a promissory note      to MERIX as Holder in the amount of $456,920.66 and on the terms and      conditions set forth therein, in form and substance satisfactory to      MERIX. |
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|   | 5. | Mutual      Release.  Except for the obligations of the parties under      this Agreement and as of the date hereof, MERIX and XSUNX, on behalf of      each of their officers, employees, directors, shareholders, agents,      attorneys, successors and assigns (collectively, “Affiliates”), hereby      unconditionally releases, acquits and forever discharges the other and its      Affiliates from any and all claims, demands, damages, liabilities and      causes of action of any kind or nature arising out of or related to the      Sublease. |
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|   | 6. | Miscellaneous      Provisions. (a) This Agreement contains the entire understanding of      the parties and is intended to integrate all prior negotiations,      discussions, proposals or understandings, either oral or written, with      respect to its subject matter.  (b) Time is of the essence of      this Agreement.  (c) This Agreement shall be governed by,      interpreted under, and construed and enforced in accordance with the laws      of the State of Oregon, without giving effect to its conflict of laws      principles.  (d) This Agreement shall to the benefit of and be      binding upon the parties hereto and their respective successors and      assigns.  (e) Any amendment, waiver or modification of this      Agreement may be made only with the written consent of the parties      hereto.      (f) Any provision of this      Agreement that is deemed invalid or unenforceable shall be ineffective to      the extent of such invalidity or unenforceability, without rendering      invalid or unenforceable the remaining provisions of this Agreement. (g) In the      event of litigation concerning this Agreement or its enforcement, the      prevailing party shall be entitled to recover all costs and expenses of      any such action, including reasonable attorneys’ fees, from the other      party, including in bankruptcy and onappeal. |
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| MERIX      CORPORATION                |         | XSUNX,      INC.            |
|---------------------------------------|--------------|-----------------------------|
|                                  |         |                        |
| By:                                   |    |                        | By: |    |
| Name:      Kelly Lang                 |         | Name:      Tom Djokovich    |
| Title:      EVP/CFO Merix Corporation |         | Title:      CEO XsunX, Inc. |

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