Exhibit 10.8


 


XSUNX, INC.


SECURITIES PURCHASE AGREEMENT


 


This SECURITIES PURCHASE
AGREEMENT (this “Agreement”) made as of _____________________ between XsunX, Inc., a Colorado
corporation (the “Company”), and _______________________ (the “Purchaser”).


W I T N E S S E T H:


WHEREAS, the Company
desires to issue and sell to the Purchaser, and the Purchaser desires to purchase from the Company, Units of the Company (the number
of which is set forth on the signature page hereof), each Unit consisting of one (1) share of common stock (the “Shares”),
no par value per share, of the Company (the “Common Stock”) and a five-year warrant to purchase two (2) shares of Common
Stock, substantially in the form attached hereto as Exhibit A, upon the terms and conditions hereinafter set forth. Each warrant
included in the Units shall be exercisable to purchase two (2) shares of Common Stock at $0.04 per
share (the “Warrants” and together with the Shares, the “Securities”).


WHEREAS, the Company
and the Purchaser are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded
by the provisions of Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), as promulgated
by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act.


NOW, THEREFORE, in
consideration of the premises and the mutual representations and covenants hereinafter set forth, the parties hereto do hereby
agree as follows:


I.                  
PURCHASE OF UNITS AND REPRESENTATIONS BY PURCHASER


The Purchaser
hereby irrevocably agrees to purchase from the Company such number of Units, and the Company agrees to sell to the Purchaser, as
is set forth on the signature page hereof, at a price equal to $0.04 per Unit. The purchase price is payable by wire transfer of
immediately available funds to:







	
        Wire instructions:

         

	Name:	
        XsunX, Inc.

         

	
        Bank:

         
	 
	
        Account:

         

         
	 
	
        ABA:

         
	 




 


 



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1.1             
The Purchaser recognizes that the purchase of the Securities involves a high degree of risk including, but not limited to,
the following: (a) the Company remains a development stage business with limited operating history and requires substantial funds
in addition to the proceeds from this purchase; (b) an investment in the Company is highly speculative, and only investors who
can afford the loss of their entire investment should consider investing in the Company and the Securities; (c) the Purchaser may
not be able to liquidate its investment; (d) transferability of the Securities is extremely limited; (e) in the event of a disposition,
the Purchaser could sustain the loss of its entire investment; (f) the Company has not paid any dividends on its Common Stock since
its inception and does not anticipate paying any dividends in the foreseeable future; and (g) the Company may issue additional
securities in the future which have rights and preferences that are senior to those of the Shares being subscribed to hereunder.


1.2             
The Purchaser represents that the Purchaser is an “accredited investor” as such term is defined in Rule 501
of Regulation D (“Regulation D”) promulgated under the Securities Act, as indicated by the Purchaser’s responses
to the questions contained in Article VII hereof, and that the Purchaser is able to bear the economic risk of an investment in
the Units.


1.3             
The Purchaser hereby acknowledges and represents that (a) the Purchaser has knowledge and experience in business and financial
matters, prior investment experience, including investment in securities that are non-listed, unregistered and/or not traded on
a national securities exchange nor on NASDAQ, or the Purchaser has employed the services of a “purchaser representative”
(as defined in Rule 501 of Regulation D), attorney and/or accountant to read all of the documents furnished or made available by
the Company both to the Purchaser and to all other prospective investors in the Securities to evaluate the merits and risks of
such an investment on the Purchaser’s behalf; (b) the Purchaser recognizes the highly speculative nature of this investment;
and (c) the Purchaser is able to bear the economic risk that the Purchaser hereby assumes.


1.4             
The Purchaser hereby acknowledges receipt and careful review of this Agreement, the Company’s filings with the SEC
(the “Company Filings”), and any documents which may have been made available upon request as reflected therein (collectively
referred to as the “Offering Materials”) and hereby represents that the Purchaser has been furnished by the Company
during the course of the purchase with all information regarding the Company, the terms and conditions of the purchase and any
additional information that the Purchaser has requested or desired to know, and has been afforded the opportunity to ask questions
of and receive answers from duly authorized officers or other representatives of the Company concerning the Company and the terms
and conditions of the purchase.


1.5             
(a)In making the decision to invest in the Securities, the Purchaser has relied solely upon the information provided
by the Company in the Offering Materials. To the extent necessary, the Purchaser has retained, at its own expense, and relied upon
appropriate professional advice regarding the investment, tax and legal merits and consequences of this Agreement and the purchase
of the Units hereunder. The Purchaser disclaims reliance on any statements made or information provided by any person or entity
in the course of Purchaser’s consideration of an investment in the Units other than the Offering Materials.



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(b)The Purchaser represents that
(i) the Purchaser was contacted regarding the sale of the Securities by the Company (or an authorized agent or representative thereof)
with whom the Purchaser had a prior substantial pre-existing relationship and (ii) no Securities were offered or sold to it by
means of any form of general solicitation or general advertising, and in connection therewith, the Purchaser did not (A) receive
or review any advertisement, article, notice or other communication published in a newspaper or magazine or similar media or broadcast
over television or radio, whether closed circuit, or generally available; or (B) attend any seminar meeting or industry investor
conference whose attendees were invited by any general solicitation or general advertising.


1.6             
The Purchaser hereby represents that the Purchaser, either by reason of the Purchaser’s business or financial experience
or the business or financial experience of the Purchaser’s professional advisors (who are unaffiliated with and not compensated
by the Company or any affiliate or selling agent of the Company, directly or indirectly), has the capacity to protect the Purchaser’s
own interests in connection with the transaction contemplated hereby.


1.7             
The Purchaser hereby acknowledges that this Agreement has not been reviewed by the SEC nor any state regulatory authority
since the purchase is intended to be exempt from the registration requirements of Section 5 of the Securities Act, pursuant to
Regulation D. The Purchaser understands that the Units have not been registered under the Securities Act or under any state securities
or “blue sky” laws and agrees not to sell, pledge, assign or otherwise transfer or dispose of the Securities unless
they are registered under the Securities Act and under any applicable state securities or “blue sky” laws or unless
an exemption from such registration is available.


1.8             
The Purchaser understands that the Securities have not been registered under the Securities Act by reason of a claimed exemption
under the provisions of the Securities Act that depends, in part, upon the Purchaser’s investment intention. In this connection,
the Purchaser hereby represents that the Purchaser is purchasing the Units for the Purchaser’s own account for investment
and not with a view toward the resale or distribution to others. The Purchaser, if an entity, further represents that it was not
formed for the purpose of purchasing the Units.


1.9             
The Purchaser consents to the placement of a legend on any certificate or other document evidencing the Securities that
such Securities have not been registered under the Securities Act or any state securities or “blue sky” laws and setting
forth or referring to the restrictions on transferability and sale thereof contained in this Agreement. The Purchaser is aware
that the Company will make a notation in its appropriate records with respect to the restrictions on the transferability of such
Securities. The legend to be placed on each certificate shall be in form substantially similar to the following:


“The securities represented by this certificate
have not been registered under the Securities Act of 1933, as amended and may not be sold, transferred, pledged, hypothecated or
otherwise disposed of in the absence of (i) an effective registration statement for such securities under said act or (ii) an opinion
of company counsel that such registration is not required.”



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1.10         
The Purchaser understands that the Company will review this Agreement and is hereby given authority by the Purchaser to
call Purchaser’s bank or place of employment or otherwise review the financial standing of the Purchaser; and it is further
agreed that the Company, at its sole discretion, reserves the unrestricted right, without further documentation or agreement on
the part of the Purchaser, to reject or limit any purchase, to accept purchases for fractional Units and to withdraw the offer
to the Purchaser at any time and that the Company will issue stop transfer instructions to its transfer agent with respect to the
Shares.


1.11         
The Purchaser hereby represents that the address of the Purchaser furnished by Purchaser on the signature page hereof is
the Purchaser’s principal residence if Purchaser is an individual or its principal business address if it is a corporation
or other entity.


1.12         
The Purchaser represents that the Purchaser has full power and authority (corporate, statutory and otherwise) to execute
and deliver this Agreement and to purchase the Units. This Agreement constitutes the legal, valid and binding obligation of the
Purchaser, enforceable against the Purchaser in accordance with its terms.


1.13         
If the Purchaser is a corporation, partnership, limited liability company, trust, employee benefit plan, individual retirement
account, Keogh Plan, or other tax-exempt entity, it is authorized and qualified to invest in the Company and the person signing
this Agreement on behalf of such entity has been duly authorized by such entity to do so.


1.14         
The Purchaser acknowledges that if he or she is a Registered Representative of an FINRA member firm, he or she must give
such firm the notice required by the FINRA’s Rules of Fair Practice, receipt of which must be acknowledged by such firm in
Section 7.4 below.


1.15         
The Purchaser acknowledges that at such time, if ever, as the Shares and the Common Stock underlying the Warrants are registered
pursuant to the Securities Act, sales of the Securities will be subject to state securities laws.


1.16         
The Purchaser and the Company agree not to issue any public statement with respect to the Purchaser’s investment or
proposed investment in the Company or the terms of any agreement or covenant between them and the Company without the other party’s
prior written consent, except such disclosures as may be required under applicable law or under any applicable order, rule or regulation.
The Company agrees not to disclose the Purchaser by name in any of the Company’s filings with the Securities and Exchange
Commission, except such disclosures as may be required under applicable law or under any applicable order, rule or regulation.


1.17         
The Purchaser agrees to hold the Company and its directors, officers, employees, affiliates, controlling persons and agents
and their respective heirs, representatives, successors and assigns harmless and to indemnify them against all liabilities, costs
and expenses incurred by them as a result of (a) any sale or distribution of the Securities by the Purchaser in violation of the
Securities Act or any applicable state securities or “blue sky” laws; or (b) any false representation or warranty or
any breach or failure by the Purchaser to comply with any



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covenant made by the Purchaser in this Agreement (including
the Confidential Investor Questionnaire contained in Article VII herein) or any other document furnished by the Purchaser to any
of the foregoing in connection with this transaction.


II.               
REPRESENTATIONS BY AND COVENANTS OF THE COMPANY


The Company hereby
represents and warrants to the Purchaser that:


2.1             
Organization, Good Standing and Qualification. The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Colorado and has full corporate power and authority to conduct its
business.


2.2             
Capitalization and Voting Rights. The authorized capital stock of the Company consists of 500,000,000 shares of common
stock of which 211,067,886 shares are issued and outstanding. The shares of issued and outstanding
capital stock of the Company have been duly authorized, validly issued, fully paid and are nonassessable. Except as described in
the Offering Materials and Company Filings, there are no outstanding options, warrants, agreements, convertible securities, preemptive
rights or other rights to subscribe for or to purchase any shares of capital stock of the Company. Except as otherwise required
by law, there are no restrictions upon the voting or transfer of any of the shares of capital stock of the Company pursuant to
the Company’s Articles of Incorporation (the “Articles of Incorporation”), Bylaws or other governing documents
or any agreement or other instruments to which the Company is a party or by which the Company is bound.


2.3             
Authorization; Enforceability. The Company has all corporate right, power and authority to enter into this Agreement
and to consummate the transactions contemplated hereby. All corporate action on the part of the Company, its directors and stockholders
necessary for the (a) authorization execution, delivery and performance of this Agreement by the Company; and (b) authorization,
sale, issuance and delivery of the Units contemplated hereby and the performance of the Company’s obligations hereunder has
been taken. This Agreement has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms, subject to laws of general application relating to
bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable
remedies, and to limitations of public policy. The Securities, when issued and fully paid for in accordance with the terms of this
Agreement, will be validly issued, fully paid and nonassessable. The issuance and sale of the Shares contemplated hereby will not
give rise to any preemptive rights or rights of first refusal on behalf of any person which have not been waived in connection
with this offering.


2.4             
No Conflict; Governmental Consents.


(a)               
The execution and delivery by the Company of this Agreement and the consummation of the transactions contemplated hereby
will not result in the violation of any material law, statute, rule, regulation, order, writ, injunction, judgment or decree of
any court or governmental authority to or by which the Company is bound, or of any provision of the Articles of Incorporation or
Bylaws of the Company, and will not conflict with, or result in a material



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breach or violation of, any of the terms or provisions of,
or constitute (with due notice or lapse of time or both) a default under, any lease, loan agreement, mortgage, security agreement,
trust indenture or other agreement or instrument to which the Company is a party or by which it is bound or to which any of its
properties or assets is subject, nor result in the creation or imposition of any lien upon any of the properties or assets of the
Company.


(b)              
No consent, approval, authorization or other order of any governmental authority is required to be obtained by the Company
in connection with the authorization, execution and delivery of this Agreement or with the authorization, issue and sale of the
Securities, except such filings as may be required to be made with the SEC, FINRA, NASDAQ and with any state or foreign blue sky
or securities regulatory authority.


2.5             
Licenses. Except as disclosed in the Company Filings, , the Company has sufficient licenses, permits and other governmental
authorizations currently required for the conduct of its business or ownership of properties and is in all material respects in
compliance therewith.


2.6             
Litigation. Except as disclosed within Company filings with the United States Securities Exchange Commission the
Company knows of no pending or threatened legal or governmental proceedings against the Company which could materially adversely
affect the business, property, financial condition or operations of the Company or which materially and adversely questions the
validity of this Agreement or any agreements related to the transactions contemplated hereby or the right of the Company to enter
into any of such agreements, or to consummate the transactions contemplated hereby or thereby. The Company is not a party or subject
to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality which
could materially adversely affect the business, property, financial condition or operations of the Company. There is no action,
suit, proceeding or investigation by the Company currently pending in any court or before any arbitrator or that the Company intends
to initiate.


2.7             
Disclosure. The information set forth in the Offering Materials as of the date hereof contains no untrue statement
of a material fact nor omits to state a material fact necessary in order to make the statements contained therein, in light of
the circumstances under which they were made, not misleading.


2.8             
Investment Company. The Company is not an “investment company” within the meaning of such term under
the Investment Company Act of 1940, as amended, and the rules and regulations of the SEC thereunder.


2.9             
Brokers. Neither the Company nor any of the Company's officers, directors, employees or stockholders has employed
or engaged any broker or finder in connection with the transactions contemplated by this Agreement and no fee or other compensation
is or will be due and owing to any broker, finder, underwriter, placement agent or similar person in connection with the transactions
contemplated by this Agreement. The Company is not party to any agreement, arrangement or understanding whereby any person has
an exclusive right to raise funds and/or place or purchase any debt or equity securities for or on behalf of the Company.



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III.            
TERMS OF PURCHASE


3.1             
All funds paid hereunder shall be deposited with the Company in the account identified in Section 1.1 hereof.


3.2             
Certificates representing the Securities purchased by the Purchaser pursuant to this Agreement will be prepared for delivery
to the Purchaser within 15 business days following the closing at which such purchase takes place. The Purchaser hereby authorizes
and directs the Company to deliver the certificates representing the Securities purchased by the Purchaser pursuant to this Agreement
directly to the Purchaser’s residential or business address indicated on the signature page hereto.


IV.            
CONDITIONS TO OBLIGATIONS OF THE PURCHASERS


4.1             
The Purchaser’s obligation to purchase the Units at the closing at which such purchase is to be consummated is subject
to the fulfillment on or prior to such closing of the following conditions, which conditions may be waived at the option of each
Purchaser to the extent permitted by law:


(a)               
Covenants. All covenants, agreements and conditions contained in this Agreement to be performed by the Company on
or prior to the date of such closing shall have been performed or complied with in all material respects.


(b)              
No Legal Order Pending. There shall not then be in effect any legal or other order enjoining or restraining the transactions
contemplated by this Agreement.


(c)               
No Law Prohibiting or Restricting Such Sale. There shall not be in effect any law, rule or regulation prohibiting
or restricting such sale or requiring any consent or approval of any person, which shall not have been obtained, to issue the Securities
(except as otherwise provided in this Agreement).


V.               
REGISTRATION RIGHTS


If at any time after
the date of this Agreement, the Company shall decide to prepare and file with the SEC a registration statement relating to an offering
for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or
Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity securities to be issued solely
in connection with any acquisition of any entity or business or equity securities issuable in connection with the stock option
or other employee benefit plans, then the Company shall send to the Purchaser a written notice of such determination and, if within
fifteen days after the date of such notice, the Purchaser shall so request in writing, the Company shall include in such registration
statement, all or any part of the Shares and the Common Stock underlying the Warrants that the Purchaser request to be registered;
provided, however, that, the Company shall not be required to register any shares of



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Common Stock that are eligible for resale pursuant to Rule 144 promulgated
under the Securities Act or that are the subject of a then effective registration statement; provided, further, however, if the
registration so proposed by the Company involves an underwritten offering of the securities so being registered for the account
of the Company, to be distributed by or through one or more underwriters of recognized standing, and the managing underwriter of
such underwritten offering shall advise the Company in writing that, in its opinion, the distribution of all or a specified portion
of the Securities which the Purchaser has requested the Company to register and otherwise concurrently with the securities being
distributed by such underwriters will materially and adversely affect the distribution of such securities by such underwriters
(such opinion to state the reasons therefor), then the Company will promptly furnish the Purchaser with a copy of such opinion,
and by providing such written notice to the Purchaser, such Purchaser may be denied the registration of all or a specified portion
of such Securities (in case of such a denial as to a portion of such shares of Common Stock); provided, however, shares to be registered
by the Company for issuance by the Company shall have first priority, the Purchaser hereunder shall have second priority, and any
other shares being registered on account of other third parties shall have third priority.


 


VI.             
MISCELLANEOUS


6.1             
Any
notice or other communication given hereunder shall be deemed sufficient if in writing and sent by registered or certified mail,
return receipt requested, or delivered by hand against written receipt therefor, addressed as follows:


if
to the Company, to it at:


XsunX, Inc.


65 Enterprise


Aliso Viejo, CA 92656


Attn: Tom Djokovich, CEO


 


With a copy to (which shall not constitute notice):


 


Kirkpatrick & Lockhart


Miami Center, 20th Floor


201 South Biscayne Blvd.


Miami, FL 33131-2399


Attn: Clayton Parker


 


if to the Purchaser, to the Purchaser’s
address indicated on the signature page of this Agreement.


Notices shall be deemed to have been
given or delivered on the date of mailing, except notices of change of address, which shall be deemed to have been given or delivered
when received.


6.2             
Except
as otherwise provided herein, this Agreement shall not be changed, modified or amended except by a writing signed by the parties
to be charged, and this Agreement



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may not be discharged except by performance in accordance
with its terms or by a writing signed by the party to be charged.


6.3             
Subject
to the provisions of Section 6.1, this Agreement shall be binding upon and inure to the benefit of the parties hereto and to their
respective heirs, legal representatives, successors and assigns. This Agreement sets forth the entire agreement and understanding
between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings
of any and every nature among them.


6.4             
Upon
the execution and delivery of this Agreement by the Purchaser, this Agreement shall become a binding obligation of the Purchaser
with respect to the purchase of Units as herein provided, subject, however, to the right hereby reserved by the Company to enter
into the same agreements with other Purchasers and to add and/or delete other persons as Purchasers.


6.5             
NOTWITHSTANDING
THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE THAT ALL THE TERMS AND
PROVISIONS HEREOF SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD TO SUCH
STATE’S PRINCIPLES OF CONFLICTS OF LAW. IN THE EVENT THAT A JUDICIAL PROCEEDING IS NECESSARY, THE SOLE FORUM FOR RESOLVING
DISPUTES ARISING OUT OF OR RELATING TO THIS AGREEMENT IS THE COURTS STATE OF CALIFORNIA IN AND FOR THE COUNTY OF LOS ANGELES OR
THE FEDERAL COURTS FOR SUCH STATE AND COUNTY, AND ALL RELATED APPELLATE COURTS, THE PARTIES HEREBY IRREVOCABLY CONSENT TO THE JURISDICTION
OF SUCH COURTS AND AGREE TO SAID VENUE.


6.6             
In
order to discourage frivolous claims the parties agree that unless a claimant in any proceeding arising out of this Agreement succeeds
in establishing his claim and recovering a judgment against another party (regardless of whether such claimant succeeds against
one of the other parties to the action), then the other party shall be entitled to recover from such claimant all of its/their
reasonable legal costs and expenses relating to such proceeding and/or incurred in preparation therefor.


6.7             
The
holding of any provision of this Agreement to be invalid or unenforceable by a court of competent jurisdiction shall not affect
any other provision of this Agreement, which shall remain in full force and effect. If any provision of this Agreement shall be
declared by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced in whole or in part, such provision
shall be interpreted so as to remain enforceable to the maximum extent permissible consistent with applicable law and the remaining
conditions and provisions or portions thereof shall nevertheless remain in full force and effect and enforceable to the extent
they are valid, legal and enforceable, and no provisions shall be deemed dependent upon any other covenant or provision unless
so expressed herein.


6.8             
It
is agreed that a waiver by either party of a breach of any provision of this Agreement shall not operate, or be construed, as a
waiver of any subsequent breach by that same party.



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6.9             
The parties agree to execute and deliver
all such further documents, agreements and instruments and take such other and further action as may be necessary or appropriate
to carry out the purposes and intent of this Agreement.


 


6.10             
This
Agreement may be executed in two or more counterparts each of which shall be deemed an original, but all of which shall together
constitute one and the same instrument.


6.11             
Nothing
in this Agreement shall create or be deemed to create any rights in any person or entity not a party to this Agreement.


 


 


 


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VII.             
CONFIDENTIAL
INVESTOR QUESTIONNAIRE


7.1             
The
Purchaser represents and warrants that he, she or it comes within one category marked below, and that for any
category marked, he, she or it has truthfully set forth, where applicable, the factual basis or reason the Purchaser comes within
that category. ALL INFORMATION IN RESPONSE TO THIS SECTION WILL BE KEPT STRICTLY CONFIDENTIAL. The undersigned agrees to furnish
any additional information which the Company deems necessary in order to verify the answers set forth below.





	Category
    A	___	The
        undersigned is an individual (not a partnership, corporation, etc.) whose individual net worth, or joint net worth with
        his or her spouse, presently exceeds $1,000,000, exclusive of the value of his or her primary residence.

         

	Category
    B	___	The
        undersigned is an individual (not a partnership, corporation, etc.) who had an income in excess of $200,000 in each of
        the two most recent years, or joint income with his or her spouse in excess of $300,000 in each of those years (in each
        case including foreign income, tax exempt income and full amount of capital gains and losses but excluding any income
        of other family members and any unrealized capital appreciation) and has a reasonable expectation of reaching the same
        income level in the current year.

         

	Category
    C	___	The
        undersigned is a director or executive officer of the Company which is issuing and selling the Units.

         

	Category
    D	___	The
        undersigned is a bank; a savings and loan association; insurance company; registered investment company; registered business
        development company; licensed small business investment company (“SBIC”); or employee benefit plan within
        the meaning of Title 1 of ERISA and (a) the investment decision is made by a plan fiduciary which is either a bank, savings
        and loan association, insurance company or registered investment advisor, or (b) the plan has total assets in excess of
        $5,000,000 or (c) is a self directed plan with investment decisions made solely by persons that are accredited investors.
        (describe entity)

        ______________________________________________________________________


______________________________________________________________________


 

	Category
    E	___	The
undersigned is a private business development company as defined in section 202(a)(22) of the Investment Advisors Act of 1940.
(describe entity)






________________________________________________________________________________


________________________________________________________________________________ 

         

	Category
    F	___	The
        undersigned is a corporation, partnership, Massachusetts business trust, or non-profit organization within the meaning
        of Section 501(c)(3) of the Internal Revenue Code, in each case not formed for the specific purpose of acquiring the Shares
        and with total assets in excess of $5,000,000. (describe entity)

        





        ________________________________________________________________________________


________________________________________________________________________________ 








 






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	Category
    G	___	The
        undersigned is a trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the
        Units, where the purchase is directed by a “sophisticated investor” as defined in Regulation 506(b)(2)(ii)
        under the Act.

         

	Category
    H	_X_	The
        undersigned is an entity (other than a trust) in which all of the equity owners are “accredited investors”
        within one or more of the above categories. If relying upon this Category alone, each equity owner must complete a separate
        copy of this Agreement. (describe entity)

        





        __Corporation_______________________________________________________


__________________________________________________________________


 

	Category
    I	___	The
        undersigned is not within any of the categories above and is therefore not an accredited investor.

        The
        undersigned agrees that the undersigned will notify the Company at any time on or prior to the closing in the event that
        the representations and warranties in this Agreement shall cease to be true, accurate and complete.

         








7.2             
SUITABILITY (please answer each question)


(a)For
an individual Purchaser, please describe your current employment, including the company by which you are employed and its principal
business:


______________________________________________________________________________


______________________________________________________________________________


______________________________________________________________________________


______________________________________________________________________________


 


(b)For an individual
Purchaser, please describe any college or graduate degrees held by you:


______________________________________________________________________________


______________________________________________________________________________


______________________________________________________________________________


______________________________________________________________________________


 


(c)For all Purchasers,
please list types of prior investments:


 Stocks, options, private
placements, mutual funds, penny stocks______________________________





______________________________________________________________________________


______________________________________________________________________________


 


(d)For all Purchasers,
please state whether you have participated in other private placements before:


YES___X____NO_______


 


(e)If your answer
to question (d) above was “YES”, please indicate frequency of such prior participation in private placements
of:






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        Public

        Companies
	
         

        Private

        Companies
	
        Public or Private Companies

        with no, or insignificant,

        assets and operations

         

	Frequently	            X                    	            X                    	            X                    
	Occasionally	                                   	                                   	                                   
	Never	                                   	                                   	                                   


 


(f)For individual
Purchasers, do you expect your current level of income to significantly decrease in the foreseeable future:


YES_______NO_______


(g)For trust,
corporate, partnership and other institutional Purchasers, do you expect your total assets to significantly decrease in the foreseeable
future:


YES_______NO___X____


(h)For all Purchasers,
do you have any other investments or contingent liabilities which you reasonably anticipate could cause you to need sudden cash
requirements in excess of cash readily available to you:


YES_______NO___X____


(i)For all Purchasers,
are you familiar with the risk aspects and the non-liquidity of investments such as the securities for which you seek to subscribe?


YES____X___NO_______


(j) For all
Purchasers, do you understand that there is no guarantee of financial return on this investment and that you run the risk of losing
your entire investment?


YES____X___NO_______


 


7.3             
MANNER
IN WHICH TITLE IS TO BE HELD. (circle one)


(a)Individual Ownership


(b)Community Property


(c)Joint Tenant with
Right of


 Survivorship
(both parties


 must sign)


(d)Partnership*


(e)Tenants in Common


(f)Company*


(g)Trust*


(h)Other*


 


*If Securities are being
subscribed for by an entity, the attached Certificate of Signatory must also be completed.



    	13



    	 



    

7.4             
FINRA
AFFILIATION.


Are you affiliated
or associated with a FINRA member firm (please check one):


 


Yes _________No
____X______


 


If Yes, please describe:


_____________________________________________________________________________________


_____________________________________________________________________________________


_____________________________________________________________________________________


 


*If Purchaser is a Registered Representative
with a FINRA member firm, have the following acknowledgment signed by the appropriate party:


The undersigned FINRA member firm acknowledges
receipt of the notice required by Article 3, Sections 28(a) and (b) of the Rules of Fair Practice.


_________________________________


Name of FINRA Member Firm


 


By: ______________________________


Authorized Officer


 


Date: ____________________________


 


7.5             
The
undersigned is informed of the significance to the Company of the foregoing representations and answers contained in the Confidential
Investor Questionnaire contained in this Article VI and such answers have been provided under the assumption that the Company will
rely on them.


 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]



    	14



    	 



    

1,250,000
Units X $0.04/Unit = $50,000.00 (the “Purchase Price”), representing a total of 1,250,000
shares of common stock and 2,500,000 warrant shares


 





	 	 	 
	Signature	 	Signature (if purchasing jointly)
	 	 	 
	 	 	 
	Name Typed or Printed	 	Name Typed or Printed
	 	 	 
	 	 	 
	Title (if Purchaser is an Entity)	 	Title (if Purchaser is an Entity)
	 	 	 
	 	 	 
	Entity Name (if applicable)	 	Entity Name (if applicable)
	 	 	 
	 	 	 
	Address	 	Address
	 	 	 
	 	 	 
	City, State and Zip Code	 	City, State and Zip Code
	 	 	 
	 	 	 
	Telephone-Business	 	Telephone-Business
	 	 	 
	 	 	 
	Telephone-Residence	 	Telephone-Residence
	 	 	 
	 	 	 
	Facsimile-Business	 	Facsimile-Business
	 	 	 
	 	 	 
	Facsimile-Residence	 	Facsimile-Residence
	 	 	 
	 	 	 
	Tax ID # or Social Security #	 	Tax ID # or Social Security #
	 	 	 
	 	 	 
	Name in which securities should be issued:	 







 


 


Dated:  _____________________


 


This Stock Purchase
Agreement is agreed to and accepted as of _______________, 2011.


XsunX, Inc.


 





By:____________________________________


Name: Tom Djokovich


Title: Chief Executive Officer


 








    	15



    	 



    

CERTIFICATE OF SIGNATORY


 


 


(To be completed if Units are


being subscribed for by an entity)


 


 


I, ________________________, am
the _______________ of ___________________ (the “Entity”).


 


I certify that I am empowered and duly authorized
by the Entity to execute and carry out the terms of the Subscription Agreement and to purchase and hold the Securities, and certify
further that the Subscription Agreement has been duly and validly executed on behalf of the Entity and constitutes a legal and
binding obligation of the Entity.


 


IN WITNESS WHEREOF, I have set my hand this
_____day of ______________


 


 


 


 


_______________________________________


(Signature)







 


 



    	16



    	 



    

Exhibit “A”


THIS SECURITY HAS NOT BEEN REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AND, UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT, AS EVIDENCED BY A LEGAL OPINION OF COUNSEL
TO THE TRANSFEROR AND REASONABLY ACCEPTABLE TO THE COMPANY TO SUCH EFFECT, THE FORM AND SUBSTANCE OF WHICH SHALL BE REASONABLY
SATISFACTORY TO THE COMPANY. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER
OR OTHER BONA FIDE LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR”AS DEFINED IN RULE 501(A) UNDER
THE SECURITIES ACT.


XSUNX, INC. 


COMMON STOCK PURCHASE WARRANT


Warrant Number: _______Issuance Date: _______________


THIS COMMON STOCK PURCHASE WARRANT (the
“Warrant”) certifies that, for value received, ________________(the “Holder”) is entitled,
upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after _________________
(the “Initial Exercise Date”) and on or prior to the close of business on the five (5) year anniversary of the
Initial Exercise Date but not thereafter (the “Termination Date”), to subscribe for and purchase from XsunX,
Inc., a Colorado corporation (the “Company”), up to 2,500,000 shares of Common Stock, subject
to adjustment hereunder (the “Warrant Shares”). The purchase price of one share of Common Stock under this Warrant
shall be equal to $0.04, subject to adjustment hereunder (the “Exercise Price”).


Section 1. Exercise
of Warrant. 


(a)Exercise
of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time
or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company (or such other
office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder
appearing on the books of the Company) of a duly executed facsimile copy of the Notice of Exercise Form annexed hereto; and, within
three (3) Trading Days of the date said Notice of Exercise is delivered to the Company, the Company shall have received payment
of the aggregate Exercise Price of the shares thereby purchased by wire transfer or, if available, pursuant to the cashless exercise
procedure specified in Section 1(b) below. Notwithstanding anything herein to the contrary, the Holder shall not be required to
physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and
the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation
within three (3) Trading Days of the date the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant
resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering
the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased.
The Holder may not exercise this Warrant more than ten times. The Holder and the Company shall maintain records showing the number
of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise Form
within one (1) Business Day of receipt of such notice. In the event of any dispute or discrepancy, the records of the Holder shall
be controlling and determinative in the absence of manifest error. The Holder and any assignee, by acceptance of this Warrant,
acknowledge and agree that, by reason of the provisions of this paragraph, 



    	17



    	 



    

following the purchase of a portion
of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than
the amount stated on the face hereof.


(b)
Cashless Exercise. Notwithstanding any provisions
herein to the contrary, if the Fair Market Value (as defined below) of one share of Common Stock is greater than the Exercise Price
(at the date of calculation as set forth below), to the extent the Holder does not elect to pay cash upon the deemed exercise of
this Warrant, the Holder shall be deemed to have elected to receive shares equal to the value (as determined below) of this Warrant
(or the portion thereof being cancelled) in which event the Company shall issue to the holder a number of shares of Common Stock
computed using the following formula:


 


X=Y (A-B)


A


WhereX=the number
of shares of Common Stock to be issued to the holder


 


Y=the number
of shares of Common Stock deemed purchased under the Warrant for which the Holder is not paying cash


A=the Fair
Market Value of one share of the Company’s Common Stock (at the date of such calculation)


B=Purchase
Price (as adjusted to the date of such calculation)


For purposes of Rule 144 promulgated under the 1933 Act, it is intended, subject
to applicable interpretations of the Securities and Exchange Commission, that the Warrant Shares issued in a cashless exercise
transaction shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed
to have commenced, on the date this Warrant was originally issued.


Fair Market Value
of a share of Common Stock as of a particular date (the "Determination Date") shall mean:


(i)If
the Company's Common Stock is traded on registered national securities exchange such as NASDAQ, AMEX or NYSE, then the closing
or last sale price, respectively, reported for the last business day immediately preceding the Determination Date;


(ii)If
the Company's Common Stock is not traded on a registered national securities exchange, but is traded in the over-the-counter market,
then the average of the closing bid and ask prices reported for the last business day immediately preceding the Determination Date;


(iii)Except
as provided in clause (iv) below, if the Company's Common Stock is not publicly traded, then as the Holder and the Company
agree, or in the absence of such an agreement, by arbitration in accordance with the rules then standing of the American Arbitration
Association, before a single arbitrator to be chosen from a panel of persons qualified by education and training to pass on the
matter to be decided; or


(iv)If
the Determination Date is the date of a liquidation, dissolution or winding up, or any event deemed to be a liquidation, dissolution
or winding up pursuant to the Company's articles of incorporation, then all amounts to be payable per share to holders of the
Common Stock pursuant to the articles of incorporation in the event of such liquidation, dissolution or winding up, plus all other
amounts to be payable per share in respect of the Common Stock in liquidation under the articles of incorporation, assuming for
the purposes of this clause (iv) that all of the shares of Common Stock then issuable upon exercise of all of the Warrants
are outstanding at the Determination Date.



    	18



    	 



    



(c) Mechanics
of Exercise.


(i)Delivery
of Certificates Upon Exercise. Certificates for shares purchased hereunder shall be transmitted by the Company’s transfer
agent to the Holder by crediting the account of the Holder’s prime broker with the Depository Trust Company through its Deposit
Withdrawal Agent Commission (“DWAC”) system if the Company is then a participant in such system and either (A)
there is an effective Registration Statement permitting the resale of the Warrant Shares by the Holder or (B) the shares are eligible
for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144, and otherwise by physical delivery
to the address specified by the Holder in the Notice of Exercise by the date that is three (3) Trading Days after the latest of
(A) the delivery to the Company of the Notice of Exercise Form, (B) surrender of this Warrant (if required), and (C) payment of
the aggregate Exercise Price as set forth above (including by cashless exercise, if permitted) (such date, the “Warrant
Share Delivery Date”). This Warrant shall be deemed to have been exercised on the first date on which all of the foregoing
have been delivered to the Company. The Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated
to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant
has been exercised, with payment to the Company of the Exercise Price (or by cashless exercise, if permitted) and all taxes required
to be paid by the Holder, if any, having been paid.


(ii)Delivery
of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request
of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the certificate or certificates representing
Warrant Shares, deliver to Holder a new Warrant evidencing the rights of Holder to purchase the unpurchased Warrant Shares called
for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.


(iii)No Fractional
Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company
shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied
by the Exercise Price or round up to the next whole share.


(iv)Charges,
Taxes and Expenses. Issuance of certificates for Warrant Shares shall be made without charge to the Holder for any issue or
transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall
be paid by the Company, and such certificates shall be issued in the name of the Holder or in such name or names as may be directed
by the Holder; provided, however, that in the event certificates for Warrant Shares are to be issued in a name other than the name
of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed
by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer
tax incidental thereto.


(d)Holder’s
Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right
to exercise any portion of this Warrant, pursuant to Section 1 or otherwise, to the extent that after giving effect to such issuance
after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and
any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates), would beneficially own in
excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares
of Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable
upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of
Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned
by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or nonconverted portion of any other
securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion
or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates. Except as



    	19



    	 



    

set forth in the preceding sentence,
for purposes of this Section 1(d), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act
and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing
to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible
for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 1(d)
applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together
with any Affiliates) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the
submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable
(in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable,
in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the
accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in
accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section
1(d), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of
Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case
may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer
Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company
shall within two Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding.
In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise
of securities of the Company, including this Warrant, by the Holder or its Affiliates since the date as of which such number of
outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99%, or 9.99%
if the Company does not have any class of securities registered under Section 12 of the Exchange Act, of the number of shares of
the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of
this Warrant. The Holder may decrease or, upon not less than 61 days’ prior notice to the Company, may increase the Beneficial
Ownership Limitation provisions of this Section 1(d). Any such increase will not be effective until the 61st day after such notice
is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in
strict conformity with the terms of this Section 1(d) to correct this paragraph (or any portion hereof) which may be defective
or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary
or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor
holder of this Warrant.


Section 2. Certain Adjustments.


(a) Stock
Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable
in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon
exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including
by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues by reclassification
of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied
by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding
immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately
after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the
aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 2(a) shall become
effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.



    	20



    	 



    

(b) Subsequent Equity
Sales. If the Company or any Subsidiary thereof, as applicable, at any time while this Warrant is outstanding, shall
sell or grant any option to purchase, or sell or grant any right to reprice, or otherwise dispose of or issue (or announce any
offer, sale, grant or any option to purchase or other disposition) any Common Stock or Common Stock Equivalents entitling any Person
to acquire shares of Common Stock, or adjust, whether by operation of purchase price adjustment, reset provision, floating conversion
or otherwise, any outstanding warrant, option or other right to acquire Common Stock or outstanding Common Stock Equivalents, at
an effective price per share less than the then Exercise Price (such lower price, the “Base Share Price” and
such issuances collectively, a “Dilutive Issuance”), then until this Warrant is no longer outstanding, the Exercise
Price shall be reduced to the Base Share Price. The Company shall notify the Holder, in writing, no later than the Trading Day
following the issuance of any Common Stock or Common Stock Equivalents subject to this Section 2(b), indicating therein the applicable
issuance price, or applicable reset price, exchange price, conversion price and other pricing terms (such notice, the “Dilutive
Issuance Notice”). For purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant
to this Section 2(b), upon the occurrence of any Dilutive Issuance, after the date of such Dilutive Issuance the Holder is entitled
to receive the benefit of the adjusted Exercise Price regardless of whether the Holder accurately refers to the adjusted Exercise
Price in the Notice of Exercise.


“Exempt Issuance”
means the issuance of (a) shares of Common Stock or options to employees, officers or directors of the Company pursuant to any
existing stock or option plan or any future stock option plan duly adopted for such purpose, by a majority of the non-employee
members of the Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose,
(b) securities upon the exercise or exchange of or conversion of any securities issued hereunder and/or other securities exercisable
or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date hereof, provided that such securities
have not been amended since the date hereof to increase the number of such securities or to decrease the exercise price, exchange
price or conversion price of such securities and (c) securities issued pursuant to acquisitions or strategic transactions, provided
that any such issuance shall only be to a Person (or to the equity holders of a Person) which is, itself or through its subsidiaries,
an operating company or an owner of assets in or used in a business synergistic with the business of the Company and such acquisition
or strategic transaction shall be likely to provide to the Company additional benefits other than the investment of funds, and
shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an
entity whose primary business is investing in securities.


(c) Pro Rata
Distributions. If the Company, at any time while this Warrant is outstanding, shall distribute to all holders of Common
Stock (and not to the Holders) evidences of its indebtedness or assets (including cash and cash dividends) or rights or warrants
to subscribe for or purchase any security other than the Common Stock (which shall be subject to Section 2(b)), then in each such
case the Exercise Price shall be adjusted by multiplying the Exercise Price in effect immediately prior to the record date fixed
for determination of stockholders entitled to receive such distribution by a fraction of which the denominator shall be the VWAP
determined as of the record date mentioned above, and of which the numerator shall be such VWAP on such record date less the then
per share fair market value at such record date of the portion of such assets or evidence of indebtedness or rights or warrants
so distributed applicable to one outstanding share of the Common Stock as determined by the Board of Directors in good faith. Additionally,
the number of Warrant Shares issuable hereunder shall be increased such that the aggregate Exercise Price payable hereunder, after
taking into account the decrease in the Exercise Price, shall be equal to the aggregate Exercise Price prior to such adjustment.
In either case the adjustments shall be described in a statement provided to the Holder of the portion of assets or evidences of
indebtedness so distributed or such subscription rights applicable to one share of Common Stock. Such adjustment shall be made
whenever any such distribution is made and shall become effective immediately after the record date mentioned above.


“VWAP”
means, for any date, (i) the daily volume weighted average price of the Common Stock for such date on the OTC Bulletin Board or
a registered national securities exchange, as reported by Bloomberg Financial L.P. (based on a Trading Day from 9:30 a.m. Eastern
Time to 4:02 p.m. Eastern Time); 



    	21



    	 



    

(ii) if the Common Stock is not then listed or quoted
on the OTC Bulletin Board and if prices for the Common Stock are then reported in the “Pink Sheets” published by the
Pink Sheets, LLC (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price
per share of the Common Stock so reported; or (iii) in all other cases, the fair market value of a share of Common Stock as
determined by an independent appraiser selected in good faith by the Holder and reasonably acceptable to the Maker.


(d) Calculations.
All calculations under this Section 2 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be.
For purposes of this Section 2, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall
be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.


(e) Notice
to Holder. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 2, the Company shall promptly
mail to the Holder a notice setting forth the Exercise Price after such adjustment and setting forth a brief statement of the facts
requiring such adjustment.


Section 3. Transfer
of Warrant.


(a) Transferability.
Subject to compliance with any applicable securities laws and the conditions set forth in Section 3(d) hereof, this Warrant and
all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon five
(5) days written notice to the Company and the surrender of this Warrant at the principal office of the Company or its designated
agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder
or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender
and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or
assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue
to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled.
The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without
having a new Warrant issued.


(b) New Warrants.
This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together
with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its
agent or attorney. Subject to compliance with Section 3(a), as to any transfer which may be involved in such division or combination,
the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined
in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the Issuance Date and shall be identical
with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.


(c) Warrant
Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose, in the name
of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual
notice to the contrary.


(d) Compliance
with Securities Laws.


(i)The
Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant and the shares of Warrant Stock to be issued upon
exercise hereof are being acquired solely for the Holder’s own account and not as a nominee for any other party, and for
investment, and that the Holder will not offer, sell or otherwise dispose of this Warrant or any shares of Warrant Stock to be
issued upon



    	22



    	 



    

exercise hereof except pursuant
to an effective registration statement, or an exemption from registration, under the Securities Act and any applicable state securities
laws.


(ii)Except
as provided in paragraph (iii) below, this Warrant and all certificates representing shares of Warrant Stock issued upon exercise
hereof shall be stamped or imprinted with a legend in substantially the following form:


 


THIS WARRANT
AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”) OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS
REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR XSUNX, INC. SHALL HAVE RECEIVED AN OPINION OF
COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS
IS NOT REQUIRED.


(iii)The
restrictions imposed by this subsection (d) upon the transfer of this Warrant or the shares of Warrant Stock to be purchased upon
exercise hereof shall terminate (A) when such securities shall have been resold pursuant to an effective registration statement
under the Securities Act, (B) upon the Company’s receipt of an opinion of counsel, in form and substance reasonably satisfactory
to the Company, addressed to the Company to the effect that such restrictions are no longer required to ensure compliance with
the Securities Act and state securities laws or (C) upon the Company’s receipt of other evidence reasonably satisfactory
to the Company that such registration and qualification under the Securities Act and state securities laws are not required. Whenever
such restrictions shall cease and terminate as to any such securities, the Holder thereof shall be entitled to receive from the
Company (or its transfer agent and registrar), without expense (other than applicable transfer taxes, if any), new Warrants (or,
in the case of shares of Warrant Stock, new stock certificates) of like tenor not bearing the applicable legend required by paragraph
(ii) above relating to the Securities Act and state securities laws.


(e) Representation
by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any
exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for
distributing or reselling such Warrant or Warrant Shares; provided that this representation shall not be breached by any act of
the Holder that complies with the Securities Act and any applicable state securities law.


Section 4. Registration Rights.


If at any time during
the term of this Warrant, the Company shall decide to prepare and file with the SEC a registration statement relating to an offering
for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or
Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity securities to be issued solely
in connection with any acquisition of any entity or business or equity securities issuable in connection with the stock option
or other employee benefit plans, then the Company shall send to the Holder a written notice of such determination and, if within
fifteen days after the date of such notice, the Holder shall so request in writing, the Company shall include in such registration
statement, all or any part of the and the Common Stock underlying the Warrants that the Holder request to be registered; provided,
however, that, the Company shall not be required to register any shares of Common Stock that are eligible for resale pursuant to
Rule 144 promulgated under the Securities Act



    	23



    	 



    

or that are the subject of a then effective
registration statement; provided, further, however, if the registration so proposed by the Company involves an underwritten offering
of the securities so being registered for the account of the Company, to be distributed by or through one or more underwriters
of recognized standing, and the managing underwriter of such underwritten offering shall advise the Company in writing that, in
its opinion, the distribution of all or a specified portion of the shares of Common Stock which the Holder has requested the Company
to register and otherwise concurrently with the securities being distributed by such underwriters will materially and adversely
affect the distribution of such securities by such underwriters (such opinion to state the reasons therefor), then the Company
will promptly furnish the Holder of shares of Common Stock hereto with a copy of such opinion, and by providing such written notice
to the Holder, such Holder may be denied the registration of all or a specified portion of such shares of Common Stock (in case
of such a denial as to a portion of such shares of Common Stock); provided, however, shares to be registered by the Company for
issuance by the Company shall have first priority, the Holder hereunder shall have second priority, and any other shares being
registered on account of other third parties shall have third priority.


Section 5.
Miscellaneous.


(a)No Rights
as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as
a stockholder of the Company prior to the exercise hereof as set forth in Section 1(c)(i).


(b) Loss,
Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant
Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of
the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate,
if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation,
in lieu of such Warrant or stock certificate.


(c)Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or
granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding
Business Day.


(d) Authorized
Shares. The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued
Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase
rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its
officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the
Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as
may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or
regulation, or of any requirements of the trading market upon which the Common Stock may be listed. The Company covenants that
all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise
of the purchase rights represented by this Warrant, be duly authorized, validly issued, fully paid and nonassessable and free from
all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer
occurring contemporaneously with such issue).


(e) Governing
Law; Consent to Jurisdiction. This Warrant shall be governed by, and construed in accordance with, the internal laws of the
State of Nevada, without reference to the choice of law provisions thereof. The Company and, by accepting this Warrant, the Holder,
each irrevocably submits to the exclusive jurisdiction of the courts of the State of Nevada located in Nevada and the United States
District Court situated therein for the purpose of any suit, action, proceeding or judgment relating to or arising out of this
Warrant and the transactions contemplated hereby. Service of process in connection with any such suit, action or proceeding



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may be served on each party hereto anywhere
in the world by the same methods as are specified for the giving of notices under this Warrant. The Company and, by accepting this
Warrant, the Holder, each irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and
to the laying of venue in such court. The Company and, by accepting this Warrant, the Holder, each irrevocably waives any objection
to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any
such suit, action or proceeding brought in any such court has been brought in an inconvenient forum..


(f) Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, will have restrictions
upon resale imposed by state and federal securities laws.


(g) Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate
as a waiver of such right or otherwise prejudice Holder’s rights, powers or remedies, notwithstanding the fact that all rights
hereunder terminate on the Termination Date. If the Company willfully and knowingly fails to comply with any provision of this
Warrant, which results in any material damages to the Holder, the Company shall pay to Holder such amounts as shall be sufficient
to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings,
incurred by Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.


(h)Notices.
Unless otherwise provided, any notice required or permitted under this Warrant shall be given in writing and shall be deemed effectively
given as hereinafter described (i) if given by personal delivery, then such notice shall be deemed given upon such delivery, (ii)
if given by telex or facsimile, then such notice shall be deemed given upon receipt of confirmation of complete transmittal, (iii)
if given by mail, then such notice shall be deemed given upon the earlier of (A) receipt of such notice by the recipient or (B)
three days after such notice is deposited in first class mail, postage prepaid, and (iv) if given by an internationally recognized
overnight air courier, then such notice shall be deemed given one business day after delivery to such carrier. All notices shall
be addressed as follows: if to the Holder, at its address as set forth in the Company’s books and records and, if to the
Company, at the address as follows, or at such other address as the Holder or the Company may designate by ten days’ advance
written notice to the other.(i) Limitation of Liability. No provision hereof, in the absence of any affirmative action
by Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of Holder,
shall give rise to any liability of Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether
such liability is asserted by the Company or by creditors of the Company.


(j) Remedies.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled
to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation
for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert
the defense in any action for specific performance that a remedy at law would be adequate.


(k)Successors
and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure
to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns
of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and
shall be enforceable by the Holder or holder of Warrant Shares.


(l)Amendment.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.


(m)Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Warrant shall be prohibited



    	25



    	 



    

by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or
the remaining provisions of this Warrant.


(n)Headings.
The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of
this Warrant.


********************


(Signature Pages Follow)



    	26



    	 



    

signature
page

to

XSUNX, INC.


common
stock purchase warrant


IN WITNESS WHEREOF, the Company has caused
this Warrant Number: ________to be executed in its name by its duly authorized officer, and to be dated as of the date first above
written.


 


XSUNX, INC.



 


 


 


 


By:______________________________


Tom Djokovich, CEO


 



    	27



    	 



    

NOTICE OF EXERCISE
TO XSUNX, INC.


Warrant Number:
________


 


(1)The undersigned
hereby elects to purchase ___________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised
in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.


□
The undersigned represents that this purchase will exceed the Beneficial Ownership Limitation described in Section 1(d) and hereby
provides the required 61 days prior notice. The Company is hereby instructed to issue the Warrant Shares 61 days after the date
of this notice.


 


(2)Payment
shall take the form of (check applicable box):


□
in lawful money of the United States; or


□
the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in Section 1(b), to
exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure
set forth in Section 1(b).


 


(3)Please issue
a certificate or certificates representing said Warrant Shares in the name of the undersigned or in such other name as is specified
below: _______________________________


 


The Warrant Shares
shall be delivered to the following DWAC Account Number, issued as DRS shares by the transfer agent directly to Holder, or by physical
delivery of a certificate to:


_______________________________


_______________________________


(4)Accredited
Investor. Unless the undersigned exercises this Warrant by cashless exercise pursuant to Section 1(b) of the Warrant, the undersigned
hereby represents and warrants that it is an “accredited investor” as defined in Regulation D promulgated under the
Securities Act of 1933, as amended, and satisfies the criteria set forth in Rule 501(a) therein.


 


(5)Legend. Unless
otherwise permitted under and each purchaser signatory thereto, the certificates representing these securities will bear a legend
restricting transfer under the Securities Act and applicable state securities laws. In the case of a cashless exercise 12 months
after the Initial Exercise Date, the Company shall contemporaneously deliver the appropriate Rule 144 opinion letter to its transfer
agent with instructions to issue the Warrant Shares without a restrictive legend, unless applicable law, order or regulations prohibit
such issuance.


 


[SIGNATURE
OF HOLDER]


Name
of Investing Entity:_____________________________________________________________


Signature
of Authorized Signatory of Investing Entity:______________________________


Name
of Authorized Signatory:_______________________________________________________


Title
of Authorized Signatory:_______________________________________________________


Date:_________________________________________________________________________________



    	28



    	 



    

ASSIGNMENT
FORM


XSUNX,
INC.


Warrant
Number: _________


 


(To
assign the foregoing warrant, execute this form and supply required information.


Do
not use this form to exercise the warrant.)


 


FOR VALUE RECEIVED,
[_] all of or [__________] shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to


_______________________________________________
whose address is


_______________________________________________________________


_______________________________________________________________.


Dated:
______________, _______


Holder’s
Signature: ______________________


Holder’s
Address: ______________________________________________


________________________________________________


Authorized
Signature: ___________________________________________


 


NOTE: The signature
to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement
or any change whatsoever. Officers of corporations and those acting in a fiduciary or other representative capacity should file
proper evidence of authority to assign the foregoing Warrant.