EXHIBIT 10.2

                             STOCK OPTION AGREEMENT

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EXHIBIT 10.2

THE SECURITY  REPRESENTED BY THIS  CERTIFICATE  HAS BEEN ACQUIRED FOR INVESTMENT
AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.
NO SUCH SALE OR DISPOSITION  MAY BE EFFECTED  WITHOUT AN EFFECTIVE  REGISTRATION
STATEMENT  RELATED THERETO OR AN OPINION OF COUNSEL  SATISFACTORY TO THE COMPANY
THAT SUCH  REGISTRATION  IS NOT REQUIRED  UNDER THE  SECURITIES  ACT OF 1933, AS
AMENDED.


                             STOCK OPTION AGREEMENT


         THIS STOCK OPTION  AGREEMENT  ("Agreement") is made effective as of the
date of grant set forth below  ("Date of Grant") by and between  XSUNX,  INC., a
Colorado corporation  ("Company"),  and the optionee named below ("Optionee") as
contemplated in the Company's 2007 Option Plan ("Plan").  Capitalized  terms not
defined herein shall have the meaning ascribed to them in the Plan.


Optionee:         Dr. Edward Yu

Social Security Number:

Address:

Total Option Shares:       100,000

Exercise Price Per Share: $0.53

Date of Grant: February 22, 2007

First Vesting Date:        May 23, 2007

Expiration Date for Exercise of Options:    February 22, 2012

Stock Option Number: 07-019


Type of Stock Option:
(Check one)       [  ] Incentive Stock Option       [ X ] Statutory Stock Option



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1.  Conditional  Grant of Option.  The Company  hereby  conditionally  grants to
Optionee an option  ("Option")  to purchase the total number of shares of Common
Stock of the Company set forth above  ("Shares") at the Exercise Price Per Share
set forth above ("Exercise  Price"),  subject to all of the terms and conditions
of this  Agreement  and the Plan.  If  designated  as an Incentive  Stock Option
above,  the Option is intended to qualify as an "incentive stock option" ("ISO")
within the  meaning of Section  422 of the  Internal  Revenue  Code of 1986,  as
amended  ("Code").  Subject to the Plan,  only  Employees  of the Company  shall
receive ISOs. This Agreement shall be deemed a Stock Option Agreement as defined
in the Plan.  The terms and  conditions of the Plan are  incorporated  herein by
this reference.  All specific terms and references,  including capitalized terms
and references,  which are undefined in this Agreement shall have the definition
and meaning ascribed to them in the Plan,  including,  without  limitation,  the
definition of the terms Employee and Consultant.

2. Exercise  Price.  The Exercise  Price, is not less than the fair market value
per share of Common  Stock on the date of grant,  as  determined  by the  Board;
provided,  however,  in  the  event  Optionee  is an  Employee  and  owns  stock
representing  more than ten percent (10%) of the total combined  voting power of
all classes of stock of the Company or of its Parent or Subsidiary  corporations
immediately  before the Option is granted,  said exercise price is not less than
one  hundred ten  percent  (110%) of the fair  market  value per share of Common
Stock on the date of grant as determined by the Board.

3. Exercise of Option.  Subject to the vesting schedule contained herein and the
other  conditions set forth in this Agreement,  all or part of the Option may be
exercised  prior to its  expiration  from the first vesting date set forth above
("First  Vesting Date") up to and including 5:00 p.m.  Pacific  Standard Time on
the expiration date set forth above ("Expiration Date") at the time or times set
forth herein in accordance with the provisions of the Plan as follows:

         (i)      Vesting:

                (a) The Option shall become  exercisable in the amount of 12,500
                    shares upon the First Vesting Date.  Thereafter,  the Option
                    shall vest become  exercisable  at the rate of 12,500 Shares
                    per calendar  quarter,  or any  apportioned  amount thereof,
                    during  the  term  of  engagement  by  XsunX,  Inc.  of  the
                    Optionee.

                (b) This Option may not be exercised for a fraction of a Share.

                (c) In the  event  of  Optionee's  death,  disability  or  other
                    termination of employment,  the exercisability of the Option
                    is governed  by  Sections  7, 8 and 9 below,  subject to the
                    limitations contained in subsection 3(i) (d) below.

                (d) In no event may the  Option be  exercised  after the date of
                    expiration of the term of the Option as set forth in Section
                    11 below.

         (ii)  Method of Exercise.  The Option shall be  exercisable  by written
               notice which shall state the election to exercise the Option, the
               number  of  Shares  in  respect  of  which  the  Option  is being
               exercised,  and such other  representations  and agreements as to
               the holder's investment intent with respect to such

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               shares of Common Stock as may be required by the Company pursuant
               to the  provisions  of the Plan.  Such  written  notice  shall be
               signed  by  Optionee  and  shall be  delivered  in  person  or by
               certified  mail to the  President,  Secretary or Chief  Financial
               Officer of the Company.  The written  notice shall be accompanied
               by payment of the exercise price.

         (iii) Compliance  with Law.  No Shares  will be issued  pursuant to the
               exercise of an Option  unless  such  issuance  and such  exercise
               shall  comply  with  all  relevant  provisions  of  law  and  the
               requirements of any stock exchange or quotation medium upon which
               the  Shares  may  then  be  listed  or  quoted.   Assuming   such
               compliance,   for  income  tax   purposes  the  Shares  shall  be
               considered  transferred  to the Optionee on the date on which the
               Option is exercised with respect to such Shares.

         (iv)  Adjustments,  Merger,  etc.  The  number  and class of the Shares
               and/or  the  exercise  price   specified  above  are  subject  to
               appropriate  adjustment  in the event of changes  in the  capital
               stock of the Company by reason of stock dividends,  stock splits,
               combination  or  recombination   of  shares,   reclassifications,
               mergers, consolidations, reorganizations or liquidations. Subject
               to any required action of the stockholders of the Company, if the
               Company  shall be the  surviving  corporation  in any  merger  or
               consolidation,  the  Option  (to  the  extent  that  it is  still
               outstanding)  shall  pertain  to and apply to the  securities  to
               which a holder of the same number of shares of Common  Stock that
               are then  subject  to the  Option  would  have been  entitled.  A
               dissolution  or  liquidation  of  the  Company,  or a  merger  or
               consolidation   in  which  the  Company  is  not  the   surviving
               corporation,  will  cause the  Option to  terminate,  unless  the
               agreement or merger or  consolidation  shall  otherwise  provide,
               provided  that  the  Optionee   shall,  if  the  Board  expressly
               authorizes,  in such  event have the right  immediately  prior to
               such dissolution or liquidation,  or merger or consolidation,  to
               exercise  the  Option in whole or part.  To the  extent  that the
               foregoing  adjustments  relate  to  stock  or  securities  of the
               Company,  such  adjustments  shall  be made by the  Board,  whose
               determination  in  that  respect  shall  be  final,  binding  and
               conclusive.

4. Optionee's  Representations.  By receipt of the Option, by its execution, and
by its  exercise in whole or in part,  Optionee  represents  to the Company that
Optionee understands that:

         (i)   Both the Option and any Shares  purchased  upon its  exercise are
               securities,  the  issuance  by  the  Company  of  which  requires
               compliance with federal and state securities laws;

         (ii)  These  securities  are made  available  to  Optionee  only on the
               condition  that Optionee makes the  representations  contained in
               this Section 4 to the Company;

         (iii) Optionee  has made a reasonable  investigation  of the affairs of
               the Company  sufficient  to be well informed as to the rights and
               the value of these securities;

         (iv)  Optionee understands that the securities have not been registered
               under the  Securities  Act of 1933,  as  amended  (the  "Act") in
               reliance  upon one or more specific  exemptions  contained in the


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               Act, which may include reliance on Rule 701 promulgated under the
               Act, if available,  or which may depend upon: (a) Optionee's bona
               fide  investment  intention in acquiring  these  securities;  (b)
               Optionee's  intention to hold these securities in compliance with
               federal and state securities laws; (c) Optionee having no present
               intention   of  selling   or   transferring   any  part   thereof
               (recognizing that the Option is not transferable) in violation of
               applicable federal and state securities laws; and (d) there being
               certain  restrictions  on transfer  of the Shares  subject to the
               Option;

         (v)   Optionee  understands  that the Shares subject to the Option,  in
               addition  to  other  restrictions  on  transfer,   must  be  held
               indefinitely  unless  subsequently  registered  under the Act, or
               unless an exemption  from  registration  is available;  that Rule
               144, the usual  exemption  from  registration,  is only available
               after the  satisfaction  of certain  holding  periods  and in the
               presence  of a public  market  for the  Shares;  that there is no
               certainty  that a public  market for the Shares will  exist,  and
               that  otherwise  it will be  necessary  that the  Shares  be sold
               pursuant  to another  exemption  from  registration  which may be
               difficult to satisfy; and,

         (vi)  Optionee understands that the certificate representing the Shares
               will bear a legend  prohibiting  their transfer in the absence of
               their registration or the opinion of counsel for the Company that
               registration  is not  required,  and a legend  prohibiting  their
               transfer in compliance  with  applicable  state  securities  laws
               unless otherwise exempted.

5. Method of Payment.  Payment of the purchase  price may be made subject to the
terms of Section 14 herein,  or by cash, check or, in the sole discretion of the
Board at the time of exercise,  promissory notes or other Shares of Common Stock
having  a fair  market  value on the date of  surrender  equal to the  aggregate
purchase price of the Shares being purchased.

6. Restrictions on Exercise.  The Option may not be exercised if the issuance of
such Shares upon such  exercise  or the method of payment of  consideration  for
such Shares  would  constitute a violation  of any  applicable  federal or state
securities  or other law or  regulation.  As a condition  to the exercise of the
Option, the Company may require Optionee to make any representation and warranty
to the Company as may be required by any applicable law or regulation.

7.  Termination  of  Status  as an  Employee  or  Consultant.  In the  event  of
termination of Optionee's  continuous  status as an Employee or  Consultant,  as
such  status  may be  determined  and  construed  by  the  Company  in its  sole
discretion ("Continuous Status"), for any reason other than death or disability,
Optionee  may,  but  only  within  thirty  (30)  days  after  the  date  of such
termination  (but in no event later than the date of  expiration  of the term of
the Option as set forth in Section 11 below),  exercise the Option to the extent
that  Optionee was entitled to exercise it at the date of such  termination.  To
the extent that  Optionee was not entitled to exercise the Option at the date of
such  termination,  or if Optionee  does not exercise the Option within the time
specified herein, the Option shall terminate.

8. Disability of Optionee.  In the event of termination of Optionee's Continuous
Status  as an  Employee  or  Consultant  as a result of  Optionee's  disability,

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Optionee  may,  but only within six (6) months from the date of  termination  of
employment  or consulting  relationship  (but in no event later than the date of
expiration of the term of the Option as set forth in Section 11 below), exercise
the Option to the extent  Optionee  was  entitled  to exercise it at the date of
such  termination;  provided,  however that if the  disability  is not total and
permanent  (as  defined  in  Section  22(e)(3)  of the  Code)  and the  Optionee
exercises the option within the period provided above but more than three months
after the date of termination,  the Option shall automatically be deemed to be a
Nonstatutory  Stock  Option and not an Incentive  Stock  Option;  and  provided,
further,  that if the  disability  is total and permanent (as defined in Section
22(e)(3) of the Code),  then the Optionee may, but only within one (1) year from
the date of  termination  of employment or  consulting  relationship  (but in no
event later than the date of  expiration  of the term of the Option as set forth
in Section 11 below), exercise the Option to the extent Optionee was entitled to
exercise it at the date of such termination. To the extent that Optionee was not
entitled to exercise the Option at the date of termination,  or if Optionee does
not exercise  such Option (which  Optionee was entitled to exercise)  within the
time periods specified herein, the Option shall terminate.

9.       Death of Optionee. In the event of the death of Optionee:

         (i)   During the term of the Option while an Employee or  Consultant of
               the Company and having been in  Continuous  Status as an Employee
               or Consultant  since the date of grant of the Option,  the Option
               may be exercised,  at any time within one (1) year  following the
               date of death (but, in the case of an Incentive Stock Option,  in
               no event  later  than the date of  expiration  of the term of the
               Option as set forth in Section 11 below), by Optionee's estate or
               by a person  who  acquired  the right to  exercise  the Option by
               bequest  or  inheritance,  but only to the extent of the right to
               exercise  that had accrued at the time of death of the  Optionee.
               To the extent that such Employee or  Consultant  was not entitled
               to exercise the Option at the date of death, or if such Employee,
               Consultant,  estate or other person does not exercise such Option
               (which such Employee,  Consultant,  estate or person was entitled
               to  exercise)  within  the one (1)  year  time  period  specified
               herein, the Option shall terminate; or,


         (ii)  During the thirty (30) day period  specified  in Section 7 or the
               one (1) year period specified in Section 8, after the termination
               of Optionee's Continuous Status as an Employee or Consultant, the
               Option  may be  exercised,  at  any  time  within  one  (1)  year
               following  the date of death  (but,  in the case of an  Incentive
               Stock  Option,  in no event later than the date of  expiration of
               the term of the  Option as set forth in  Section  11  below),  by
               Optionee's  estate  or by a  person  who  acquired  the  right to
               exercise  the Option by bequest or  inheritance,  but only to the
               extent of the right to  exercise  that had accrued at the date of
               termination.  To the extent that such Employee or Consultant  was
               not entitled to exercise  the Option at the date of death,  or if
               such  Employee,  Consultant,  estate  or  other  person  does not
               exercise such Option (which such Employee,  Consultant, estate or
               person was  entitled  to  exercise)  within the one (1) year time
               period specified herein, the Option shall terminate.

10.  Non-Transferability  of Option.  The Option may not be  transferred  in any
manner  otherwise than by will or by the laws of descent or distribution and may

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be exercised during the lifetime of Optionee, only by Optionee. The terms of the
Option shall be binding upon the executors,  administrators,  heirs,  successors
and assigns of Optionee.

11.  Term of Option.  The Option may not be  exercised  more than five (5) years
from the date of grant of the Option, and may be exercised during such term only
in accordance with the Plan and terms of the Option; provided, however, that the
term of this option, if it is a Nonstatutory  Stock Option,  may be extended for
the period set forth in Section 9(i) or Section 9(ii) in the  circumstances  set
forth in such Sections.

12. Early Disposition of Stock; Taxation Upon Exercise of Option. If Optionee is
an Employee and the Option qualifies as an ISO,  Optionee  understands  that, if
Optionee  disposes of any Shares  received under the Option within two (2) years
after the date of this  Agreement  or within one (1) year after such Shares were
transferred to Optionee, Optionee may be treated for federal income tax purposes
as having received ordinary income at the time of such disposition in any amount
generally  measured as the difference  between the price paid for the Shares and
the lower of the fair market  value of the Shares at the date of exercise or the
fair market value of the Shares at the of  disposition.  Any gain  recognized on
such  premature  sale of the Shares in excess of the amount  treated as ordinary
income may be  characterized  as capital gain.  Optionee hereby agrees to notify
the  Company  in  writing  within  thirty  (30) days  after the date of any such
disposition.  Optionee  understands that if Optionee  disposes of such Shares at
any time after the expiration of such two-year and one-year holding periods, any
gain on such sale may be  treated  as  long-term  capital  gain laws  subject to
meeting  various  qualifications.  If  Optionee  is a  Consultant  or  this is a
Nonstatutory  Stock  Option,  Optionee  understands  that,  upon exercise of the
Option, Optionee may recognize income for tax purposes in an amount equal to the
excess of the then fair market value of the Shares over the exercise price. Upon
a resale of such shares by the Optionee,  any difference  between the sale price
and the fair  market  value of the Shares on the date of  exercise of the Option
may be treated as capital gain or loss.  Optionee  understands  that the Company
may be required to withhold tax from Optionee's current  compensation in some of
the  circumstances  described  above  (and  Optionee  hereby so  authorizes  the
Company);  to the extent that Optionee's current compensation is insufficient to
satisfy the withholding  tax liability,  the Company may require the Optionee to
make a cash  payment to cover such  liability  as a condition to exercise of the
Option.

13.  Tax  Consequences.  The  Optionee  understands  that  any of the  foregoing
references to taxation are based on federal income tax laws and  regulations now
in  effect,   and  may  not  be  applicable   to  the  Optionee   under  certain
circumstances.  The Optionee may also have adverse tax consequences  under state
or local law. The Optionee has reviewed with the Optionee's own tax advisors the
federal,   state,  local  and  foreign  tax  consequences  of  the  transactions
contemplated by this Agreement.  The Optionee is relying solely on such advisors
and  not on any  statements  or  representations  of the  Company  or any of its
agents.  The Optionee  understands that the Optionee (and not the Company) shall
be  responsible  for the Optionee's own tax liability that may arise as a result
of the transactions contemplated by this Agreement.

14. Net Issue Exercise.  Notwithstanding  any provisions herein to the contrary,
if the fair market value of one share of the  Company's  Common Stock is greater
than the Per  Share  Exercise  Price  (at the date of  calculation  as set forth
below),  in lieu of  exercising  the Option for cash,  the Optionee may elect to

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receive  shares equal to the value (as  determined  below) of the Option (or the
portion  thereof  being  canceled) by  surrender of the Option at the  principal
office of the Company together with the properly endorsed Notice of Exercise and
Subscription  Form and notice of such election,  in which event the Company will
issue to the  Optionee  a number of shares of Common  Stock  computed  using the
following formula:


                  X = Y (A-B)
                      -------
                        A

     Where X = the number of shares of Common Stock to be issued to the Optionee

                            Y = the number of shares of Common Stock purchasable
         under  the  Option  or,  if  only a  portion  of the  Option  is  being
         exercised,  the portion of the Option  being  canceled  (at the date of
         such calculation)

                            A = the  fair  market  value  of  one  share  of the
         Company's Common Stock (at the date of such calculation)

                            B = Per  Share Exercise  Price (as  adjusted  to the
date of such calculation)

         For purposes of the above  calculation,  fair market value of one share
of the  Company's  Stock  will  be the  average  of the  closing  prices  of the
Company's  shares of  Common  Stock as quoted  on the OTC  Bulletin  Board  (the
"OTCBB") (or on such other United States stock exchange or public trading market
or quotation medium on or by which the shares of the Company trade or are quoted
if, at the time of the  election,  they are not  trading or being  quoted on the
OTCBB), for the five (5) consecutive trading days immediately preceding the date
of the date the completed,  executed Notice of Exercise and Subscription Form is
received.

15.  Damages.  The parties  agree that any violation of the Option (other than a
default in the payment of money) cannot be compensated  for by damages,  and any
aggrieved  party shall have the right,  and is hereby granted the privilege,  of
obtaining  specific  performance  of  the  Option  in  any  court  of  competent
jurisdiction in the event of any breach hereunder.

16. Delay. No delay or failure on the part of the Company or the Optionee in the
exercise of any right,  power or remedy shall operate as a waiver  thereof,  nor
shall any  single or  partial  exercise  by any of them of any  right,  power or
remedy preclude other or further exercise thereof,  or the exercise of any other
right, power or remedy.

17.  Restrictions.  Notwithstanding  anything  herein to the contrary,  Optionee
understands  and agrees  that  Optionee  shall not dispose of any of the Shares,
whether  by  sale,  exchange,  assignment,   transfer,  gift,  devise,  bequest,
mortgage, pledge, encumbrance or otherwise,  except in accordance with the terms
and conditions of this Agreement, and Optionee shall not take or omit any action
which will impair the absolute and  unrestricted  right,  power,  authority  and
capacity of Optionee to sell Shares in accordance  with the terms and conditions
hereof.

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Any purported transfer of Shares by Optionee that violates any provision of this
Section 17 shall be wholly void and ineffectual and shall give to the Company or
its  designee the right to purchase  from  Optionee all but not less than all of
the Shares then owned by Optionee for a period of ninety (90) days from the date
the Company first learns of the purported transfer at the Agreement Price and on
the Agreement  Terms (as those terms are defined in subsections  (vi) and (vii),
respectively,  of this  Section  17).  If the  Shares are not  purchased  by the
Company or its designee,  the purported  transfer  thereof shall remain void and
ineffectual and they shall continue to be subject to this Agreement.

The Company  shall not cause or permit the  transfer of any Shares to be made on
its books except in accordance with the terms hereof.

         (i)      Permitted Transfers.

                (a) Optionee may sell, assign or transfer any Shares held by the
                    Optionee  but  only by  complying  with  the  provisions  of
                    subsection (iv) of this Section 17.

                (b) Optionee may sell, assign or transfer any Shares held by the
                    Optionee without complying with the provisions of subsection
                    (iv) by obtaining the prior written consent of the Company's
                    shareholders  owning 50% of the then issued and  outstanding
                    shares of the Company's Common Stock  (determined on a fully
                    diluted  basis) or a majority of the members of the Board of
                    Directors  of the  Company,  provided  that  the  transferee
                    agrees  in  writing  to be  bound by the  provisions  of the
                    Option and the transfer is made in accordance with any other
                    restrictions or conditions  contained in the written consent
                    and  in  accordance  with   applicable   federal  and  state
                    securities laws.

                (c) Upon the death of Optionee,  Shares held by the Optionee may
                    be  transferred  to  the  personal   representative  of  the
                    Optionee's  estate without  complying with the provisions of
                    subsection (iv).  Shares so transferred  shall be subject to
                    the other provisions of the Option, including in particular,
                    and without limitation, subsection (v).

         (ii)     No Pledge.  Unless a majority  of the  members of the Board of
                  Directors  consent,  Shares may not be pledged,  mortgaged  or
                  otherwise encumbered to secure indebtedness for money borrowed
                  or any other obligation for which the Optionee is primarily or
                  secondarily liable.

         (iii)    Stock  Certificate  Legend.  Each stock certificate for Shares
                  issued  to the  Optionee  shall  have  conspicuously  written,
                  printed,  typed or stamped upon the face thereof,  or upon the
                  reverse  thereof  with a  conspicuous  reference  on the  face
                  thereof, one or both of the following legends:

                  THE SHARES  REPRESENTED BY THIS  CERTIFICATE  HAVE BEEN ISSUED
                  WITHOUT  REGISTRATION  UNDER THE  SECURITIES  ACT OF 1933,  AS
                  AMENDED,  AND  MAY  NOT  BE  TRANSFERRED  IN  THE  ABSENCE  OF
                  REGISTRATION  THEREUNDER OR AN APPLICABLE  EXEMPTION  FROM THE
                  REGISTRATION  REQUIREMENTS OF SUCH ACT. SUCH SHARES MAY NOT BE

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                  SOLD, ASSIGNED,  TRANSFERRED,  OR OTHERWISE DISPOSED OF IN ANY
                  MANNER EXCEPT IN  ACCORDANCE  WITH AND SUBJECT TO THE TERMS OF
                  THE STOCK OPTION AGREEMENT,  A COPY OF WHICH IS ON FILE AT THE
                  PRINCIPAL  OFFICE OF THE  COMPANY.  UNLESS A  MAJORITY  OF THE
                  MEMBERS OF THE BOARD OF DIRECTORS  CONSENT,  SUCH STOCK OPTION
                  AGREEMENT PROHIBITS ANY PLEDGE,  MORTGAGE OR OTHER ENCUMBRANCE
                  OF SUCH SHARES TO SECURE ANY  OBLIGATION OF THE HOLDER HEREOF.
                  EVERY  CREDITOR OF THE HOLDER HEREOF AND ANY PERSON  ACQUIRING
                  OR PURPORTING TO ACQUIRE THIS CERTIFICATE OR THE SHARES HEREBY
                  EVIDENCED  OR ANY INTEREST  THEREIN IS HEREBY  NOTIFIED OF THE
                  EXISTENCE OF SUCH STOCK OPTION AGREEMENT,  AND ANY ACQUISITION
                  OR PURPORTED  ACQUISITION  OF THIS  CERTIFICATE  OR THE SHARES
                  HEREBY  EVIDENCED OR ANY INTEREST  THEREIN SHALL BE SUBJECT TO
                  ALL RIGHTS AND OBLIGATIONS OF THE PARTIES TO SUCH STOCK OPTION
                  AGREEMENT AS THEREIN SET FORTH.

                  IT IS  UNLAWFUL  TO  CONSUMMATE  A SALE  OR  TRANSFER  OF THIS
                  SECURITY,   OR  ANY  INTEREST  THEREIN,   OR  TO  RECEIVE  ANY
                  CONSIDERATION  THEREFOR,  WITHOUT THE PRIOR WRITTEN CONSENT OF
                  THE  COMMISSIONER  OF CORPORATIONS OF THE STATE OF CALIFORNIA,
                  EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES.

         (iv)     Sales of Shares.

                (a) Company's  Right of First  Refusal.  In the  event  that the
                    Optionee shall desire to sell, assign or transfer any Shares
                    held by the  Optionee  to any  other  person  (the  "Offered
                    Shares")  and shall be in  receipt  of a bona fide  offer to
                    purchase  the  Offered  Shares   ("Offer"),   the  following
                    procedure  shall  apply.  The  Optionee  shall  give  to the
                    Company  written notice  containing the terms and conditions
                    of the Offer,  including,  but not limited to (a) the number
                    of Offered Shares;  (b) the price per Share;  (c) the method
                    of   payment;   and  (d)  the   name(s)   of  the   proposed
                    purchaser(s).

                (b) An offer shall not be deemed  bona fide unless the  Optionee
                    has informed  the  prospective  purchaser of the  Optionee's
                    obligation  under the Option and the  prospective  purchaser
                    has  agreed  to  become  a party  hereunder  and to be bound
                    hereby.  The  Company is  entitled  to take such steps as it
                    reasonably  may deem necessary to determine the validity and
                    bona fide nature of the Offer.

                (c) Until  thirty  (30) days  after  such  notice is given,  the
                    Company or its designee shall have the right to purchase all

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                    of  the  Offered   Shares  at  the  price   offered  by  the
                    prospective  purchaser  and  specified in such notice.  Such
                    purchase  shall be on the  Agreement  Terms,  as  defined in
                    subsection (vi).

                (d) Failure of  Company  or its  Designee  to  Purchase  Offered
                    Shares.  If all of the Offered  Shares are not  purchased by
                    the Company  and/or its designee  within the thirty (30) day
                    period  granted  for  such  purchases,  then  any  remaining
                    Offered Shares may be sold, assigned or transferred pursuant
                    to the  Offer;  provided,  that the  Offered  Shares  are so
                    transferred  within 30 days of the  expiration of the thirty
                    (30) day period to the person or persons named in, and under
                    the terms and conditions  of, the bona fide Offer  described
                    in the notice to the  Company;  and provided  further,  that
                    such  persons  agree to execute and deliver to the Company a
                    written agreement,  in form and content  satisfactory to the
                    Company, agreeing to be bound by the terms and conditions of
                    the Option.

         (v)      Manner of Exercise.  Any right to purchase  hereunder shall be
                  exercised  by  giving   written  notice  of  election  to  the
                  Optionee, the Optionee's personal  representative or any other
                  selling person, as the case may be, prior to the expiration of
                  such right to purchase.

         (vi)     Agreement Price. The "Agreement  Price" shall be the higher of
                  (a) the  fair  market  value  of the  Shares  to be  purchased
                  determined  in good  faith by the  Board of  Directors  of the
                  Company and (b) the original  exercise  price of the Shares to
                  be purchased.

         (vii)    Agreement Terms. "Agreement Terms"  shall mean and include the
                  following:

                (a) Delivery of Shares and Closing  Date.  At the  closing,  the
                    Optionee,  the Optionee's  personal  representative  or such
                    other  selling  person,  as the case may be,  shall  deliver
                    certificates  representing the Shares, properly endorsed for
                    transfer,  and with the necessary  documentary  and transfer
                    tax  stamps,  if  any,  affixed,  to the  purchaser  of such
                    Shares.  Payment  of  the  purchase  price  therefore  shall
                    concurrently  be  made  to  the  Optionee,   the  Optionee's
                    personal  representative  or such other selling  person,  as
                    provided in subsection (b) of this  subsection  (vii).  Such
                    delivery and payment shall be made at the  principal  office
                    of the  Company  or at  such  other  place  as  the  parties
                    mutually agree.

                (b) Payment  of  Purchase  Price.  The  Company  shall  pay  the
                    purchase price to the Optionee at the closing.

         (viii)   Right to Purchase Upon Certain  Other  Events.  The Company or
                  its  designee  shall have the right to purchase  all,  but not
                  less than  all,  of the  Shares  held by the  Optionee  at the
                  Agreement  Price  and on the  Agreement  Terms for a period of
                  ninety (90) days after any of the following events:

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                (a) An  attempt  by a  creditor  to levy upon or sell any of the
                    Optionee's Shares;

                (b) The  filing of a  petition  by the  Optionee  under the U.S.
                    Bankruptcy Code or any insolvency laws;

                (c) The  filing  of  a  petition   against  Optionee  under  any
                    insolvency  or  bankruptcy  laws  by  any  creditor  of  the
                    Optionee if such  petition is not  dismissed  within  thirty
                    (30) days of filing;

                (d) The entry of a decree of divorce  between the  Optionee  and
                    the Optionee's spouse; or,

                (e) The  termination  of  Optionee's  services as an employee or
                    consultant with the Company.

                    The Optionee shall provide the Company written notice of the
                    occurrence of any such event within 30 days of such event.

         (ix)     Termination. The provisions of this Section 17 shall terminate
                  and all rights of each such party hereunder shall cease except
                  for  those  which  shall  have  theretofore  accrued  upon the
                  occurrence of any of the following events:

                (a) Cessation of the Company's business;

                (b) Bankruptcy, receivership or dissolution of the Company;

                (c) Ownership of all of the issued and outstanding shares of the
                    Company by a single shareholder of the Company;

                (d) Written  consent or  agreement  of the  shareholders  of the
                    Company  holding  Fifty Percent (50%) of the then issued and
                    outstanding  shares of the  Company  (determined  on a fully
                    diluted basis);

                (e) Consent or  agreement  of a majority  of the  members of the
                    Board of Directors of the Company; or,

                (f) Registration  of  any  class  of  equity  securities  of the
                    Company  pursuant to Section 12 of the  Securities  Exchange
                    Act of 1934, as amended.

         (x)      Amendment. This Section 17 may be modified or amended in whole
                  or in part by a written  instrument  signed by shareholders of
                  the Company  holding 50% of the  outstanding  shares of Common
                  Stock  (determined  on a fully diluted basis) or a majority of
                  the members of the Board of Directors of the Company.

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18. Market Standoff. Unless the Board of Directors otherwise consents,  Optionee
agrees hereby not to sell or otherwise  transfer any Shares or other  securities
of the Company  during the 180-day  period  following  the  effective  date of a
registration  statement of the Company filed under the Act;  provided,  however,
that such restriction shall apply only to the first two registration  statements
of the Company to become effective under the Act which includes securities to be
sold on behalf of the Company to the public in an  underwritten  public offering
under the Act. The Company may impose stop-transfer instructions with respect to
securities  subject to the foregoing  restrictions until the end of such 180-day
period.

19.  Rule 144.  Optionee  acknowledges  and  understands  that the Shares may be
subject to transfer and sale  restrictions  imposed  pursuant to SEC Rule 144 of
the  Rules  promulgated  under  the  Securities  Act of  1933  ("Act")  and  the
regulations promulgated thereunder. Optionee shall comply with Rule 144 and with
all policies and  procedures  established by the Company with regard to Rule 144
matters.  Optionee  acknowledged  that the Company or its  attorneys or transfer
agent  may  require a  restrictive  legend on the  certificate  or  certificates
representing  the Shares pursuant to the  restrictions on transfer of the Shares
imposed by Rule 144.

20. No Distribution. Notwithstanding anything in this Agreement to the contrary,
Optionee acknowledges that: (i) the Option, and the Shares upon exercise, is and
are being acquired in a private  transaction which is not part of a distribution
of the Option or Shares; (ii) the Optionee intends to hold the Option and Shares
for the account of the Optionee and does not intend to sell the Option or Shares
as a part of a distribution or otherwise; and (iii) neither the Optionee nor the
Company is an  underwriter  with regard to the Option or the Shares for purposes
of Rule 144.

21. Securities  Compliance.  Optionee understands that the Option and the Shares
may be  offered  and  sold  in  reliance  on one or  more  exemptions  from  the
registration requirements of federal and state securities laws, which exemptions
may include,  without limitation,  Regulation D promulgated under the Securities
Act,  and that the  Company  is  relying  upon the  truth  and  accuracy  of the
representations,  warranties, agreements,  acknowledgments and understandings of
Optionee  set  forth  herein in order to  determine  the  applicability  of such
exemptions and the suitability of Optionee to acquire the Option and the Shares.
The  representations,  warranties and agreements  contained  herein are true and
correct as of the date hereof and may be relied upon by the Company and Optionee
will  notify  the  Company  immediately  of  any  adverse  change  in  any  such
representations  and warranties which may occur prior to the issuance of Shares.
The  representations,  warranties  and agreements of Optionee  contained  herein
shall survive the  execution and delivery of this  Agreement and the exercise of
the Option and the issuance of the Shares.

22. Complete Agreement.  This Agreement constitutes the entire agreement between
the parties with respect to its subject  matter,  and supersedes all other prior
or contemporaneous  agreements and understandings both oral or written; subject,
however,  that in the event of any conflict between this Agreement and the Plan,
the Plan shall govern. This Agreement may only be amended in a writing signed by
the Company and the Optionee.

23. Privileges of Stock Ownership.  Optionee shall not have any of the rights of
a shareholder with respect to any Shares until Optionee exercises the Option and
pays the  Exercise  Price,  Shares are issued and  delivered  to  Optionee,  and

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Optionee  is shown as a  shareholder  of record on the books and  records of the
Company.

24. Further Acts. The parties hereto shall cooperate with each other and execute
such additional documents or instruments and perform such further acts as may be
reasonably necessary to affect the purpose and intent of the Agreement.

25. 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.

26.  Notices.  Any notice required to be given or delivered to the Company under
the terms of this  Agreement  shall be in writing and addressed to the Corporate
Secretary of the Company at its principal corporate offices. Any notice required
to be given or  delivered  to  Optionee  shall be in writing  and  addressed  to
Optionee at the address  indicated herein or to such other address as such party
may designate in writing from time to time to the Company.  All notices shall be
deemed to have been given or delivered upon actual personal delivery;  three (3)
days after  deposit in the United  States mail by certified or  registered  mail
(return receipt  requested);  one (1) business day after deposit with any return
receipt express courier (prepaid); or one (1) business day after transmission by
facsimile with a corresponding facsimile transmission confirmation sheet.

27. Counterparts.  This Agreement may be executed  simultaneously in one or more
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together shall  constitute one and the same  instrument.  The exhibits  attached
hereto and  initialed  by the parties  are made a part  hereof and  incorporated
herein by this reference.

28. 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  persons  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 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.

29.  Recovery of Litigation  Costs.  If any legal action or any  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
attorneys'  fees and other  costs  incurred  in that  action or  proceeding,  in
addition to any other relief to which they may be entitled.

30.  Severability;  Construction.  In the  event  that  any  provision  in  this
Agreement shall be invalid or  unenforceable,  such provision shall be severable
from, and such invalidity or unenforceability shall not be construed to have any
effect on, the remaining  provisions of this Agreement.  This Agreement shall be
construed as to its fair meaning and not for or against either party.

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<PAGE>


31. Survival of Representations and Obligations. All representations, warranties
and agreements of the parties contained in this Agreement, or in any instrument,
certificate,  opinion or other  writing  provided for in it,  shall  survive the
exercise of the Option and the issuance of the Shares.

32.  Specific  Performance.  Each party's  obligations  under this Agreement are
unique. If any party should default in its obligations under 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 sue in equity for specific  performance
without the necessity of posting a bond or other security,  and the parties each
expressly waive the defense that a remedy in damages will be adequate.

33.  Gender;  Number.  Whenever  the  context of this  Agreement  requires,  the
masculine gender includes the feminine or neuter gender, and the singular number
includes the plural.

34.  Governing Law and Venue.  This  Agreement will be construed and enforced in
accordance  with, and the rights of the parties will be governed by, the laws of
the State of California without regard to conflict of laws principles.  Venue in
any action arising by reason of this Agreement  shall lie  exclusively in Orange
County, California.

35. Consultancy,  Advisory and Technology Sharing and License  Agreements.  This
Option is issued  pursuant to that certain  Consultancy  and Advisory  Agreement
effective February 22, 2007. The terms of the Consultancy and Advisory Agreement
shall control over any  conflicting  terms in this Option.  Any breach under the
Consultancy and Advisory  Agreement shall  constitute a breach under this Option
and allows the Company to terminate this Option in whole or in part.


IN WITNESS WHEREOF, this Agreement is made effective on the date first set forth
above at Orange County, California.

                                        Company:


                                        XSUNX, INC, a Colorado Corporation




                                        By:      _______________________________
                                                 Name: Tom M. Djokovich
                                                 Title:    CEO






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OPTIONEE  ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO SECTION
3 HEREOF IS EARNED ONLY BY  CONTINUING  SERVICE AS AN EMPLOYEE OR  CONSULTANT AT
THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED,  BEING GRANTED THIS
OPTION OR ACQUIRING SHARES HEREUNDER).  OPTIONEE FURTHER ACKNOWLEDGES AND AGREES
THAT THIS OPTION, THE COMPANY'S PLAN WHICH IS INCORPORATED  HEREIN BY REFERENCE,
THE  TRANSACTIONS  CONTEMPLATED  HEREUNDER  AND THE VESTING  SCHEDULE  SET FORTH
HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED  PROMISE OF CONTINUED  ENGAGEMENT
AS AN EMPLOYEE OR CONSULTANT FOR THE VESTING PERIOD,  FOR ANY PERIOD, OR AT ALL,
AND  SHALL  NOT  INTERFERE  WITH  OPTIONEE'S  RIGHT  OR THE  COMPANY'S  RIGHT TO
TERMINATE OPTIONEE'S EMPLOYMENT OR CONSULTING  RELATIONSHIP AT ANY TIME, WITH OR
WITHOUT CAUSE.

Optionee acknowledges receipt of a copy of the Plan, represents that Optionee is
familiar with the terms and  provisions  thereof,  and hereby accepts the Option
subject to all of the terms and  provisions  thereof.  Optionee has reviewed the
Plan and this Agreement in their entirety,  has had an opportunity to obtain the
advice of counsel prior to executing  this Agreement and fully  understands  all
provisions of the Plan and this  Agreement.  Optionee hereby agrees to accept as
binding,  conclusive and final all decisions or  interpretations of the Board or
of the Committee upon any questions arising under the Plan.

         IN WITNESS WHEREOF,  this  acknowledgment is made effective on the date
first set forth in the Agreement at Orange County, California.

                                    OPTIONEE


                                    ------------------------------
                                    Name:












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CONSENT OF SPOUSE



The undersigned  spouse of the Optionee to the foregoing Stock Option  Agreement
acknowledges  on his or her own behalf  that:  I have read the  foregoing  Stock
Option Agreement and I know its contents. I hereby consent to and approve of the
provisions of the Stock Option Agreement,  and agree that the Shares issued upon
exercise of the Option covered  thereby and my interest in them shall be subject
to the  provisions of the Stock Option  Agreement and that I will take no action
at any time to hinder  operation of the Stock Option  Agreement as to the Shares
or my interest in the Shares.

 IN WITNESS WHEREOF, this acknowledgment is made effective on the date first set
forth in the Agreement at Orange County, California.



                                      ---------------------------------
                                      Name:








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                                EXHIBIT TO OPTION

                    SUBSCRIPTION FORM AND NOTICE OF EXERCISE

XsunX, Inc.                                               Date:
Attn: President
65 Enterprise
Aliso Viejo, CA 92656

Ladies and Gentlemen:

                  The  undersigned,  the holder of the enclosed  Option,  hereby
irrevocably elects to exercise the purchase rights represented by the Option and
to purchase there under  __________  shares of Common Stock of XSUNX,  INC. (the
"Company"),  and herewith  encloses payment of $___________  and/or  ___________
shares of the Company's common stock,  (the "Purchase Price") in full payment of
the Purchase Price of such shares being purchased.

Exercise of the Option shall not be deemed  effective  unless and until good and
immediately  available  funds in the full amount of the Purchase Price have been
confirmed in the account of the Company.  The original Option shall be presented
with this Subscription Form and Notice of Exercise.

         The Company may, in its  discretion,  withhold a portion of some or all
of the  exercised  shares or other  amounts  for the  payment  of taxes or other
items.  Holder  represents that Holder is not subject to any backup  withholding
requirements. Holder acknowledges that the shares of stock of the Company issued
upon  exercise  will not be entitled to any  dividend  declared  upon such stock
prior to the effective date of exercise of the Option.

         Holder hereby constitutes this Subscription Form and Notice of Exercise
as an  assignment,  deposit  tender,  and transfer in blank of the Option as set
forth therein.  Holder hereby irrevocably constitutes and appoints the secretary
of the Company as Holder's attorney in fact to issue shares upon the exercise of
the Option and reflect the same on the books and records of the Company,  cancel
the Option, issue a new Option, if applicable,  and perform any necessary act on
behalf of Holder, with full power substitution.

                                         Very truly yours,


                                         -------------------------------------

                                         By: _________________________________

                                         Title: ______________________________




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