Document:

EXHIBIT 10.5

                                ESCROW AGREEMENT

      THIS ESCROW  AGREEMENT  (this  "Agreement") is made and entered into as of
December ___, 2005 XSUNX,  INC., a Colorado  corporation  (the  "Company");  the
Buyer(s)  listed on the  Securities  Purchase  Agreement,  dated the date hereof
(also referred to as the  "Investor(s)"),  and DAVID  GONZALEZ,  ESQ., as Escrow
Agent hereunder (the "Escrow Agent").

                                   BACKGROUND

      WHEREAS,  the Company and the  Investor(s)  have entered into a Securities
Purchase Agreement (the "Securities Purchase  Agreement"),  dated as of the date
hereof,  pursuant to which the  Company  proposes  to sell  secured  convertible
debentures (the  "Convertible  Debentures")  which shall be convertible into the
Company's Common Stock, no par value per share (the "Common Stock"), for a total
purchase  price  of up to Five  Million  Dollars  ($5,000,000).  The  Securities
Purchase  Agreement  provides  that the  Investor(s)  shall deposit the purchase
amount in a  segregated  escrow  account to be held by Escrow  Agent in order to
effectuate a disbursement to the Company at a closing to be held as set forth in
the Securities Purchase Agreement (the "Closing").

      WHEREAS,   the  Company  intends  to  sell  Convertible   Securities  (the
"Offering").

      WHEREAS,  Escrow Agent has agreed to accept,  hold, and disburse the funds
deposited with it in accordance with the terms of this Agreement.

      WHEREAS,  in order to  establish  the  escrow of funds  and to effect  the
provisions of the Securities Purchase Agreement, the parties hereto have entered
into this Agreement.

      NOW THEREFORE,  in consideration of the foregoing,  it is hereby agreed as
follows:

      1.    Definitions.  The following terms shall have the following  meanings
when used herein:

            a.    "Escrow  Funds"  shall mean the funds  deposited  with  Escrow
Agent pursuant to this Agreement.

            b.    "Joint  Written  Direction"  shall  mean a  written  direction
executed by the Investor(s) and the Company  directing  Escrow Agent to disburse
all or a portion  of the  Escrow  Funds or to take or  refrain  from  taking any
action pursuant to this Agreement.

            c.    "Escrow  Period"  shall  begin  with the  commencement  of the
Offering and shall terminate upon the earlier to occur of the following dates:

                  (i)   The date upon which  Escrow Agent  confirms  that it has
received  in the  Escrow  Account  all  of  the  proceeds  of  the  sale  of the
Convertible Debentures;

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                  (ii)  The  expiration  of  twenty  (20)  days from the date of
commencement  of the  Offering  (unless  extended  by mutual  written  agreement
between the Company and the Investor(s)  with a copy of such extension to Escrow
Agent); or

                  (iii) The  date  upon  which  a  determination  is made by the
Company and the  Investor(s)  to terminate the Offering prior to the sale of all
the Convertible Debentures.

      During the Escrow Period,  the Company and the  Investor(s) are aware that
they are not entitled to any funds received into escrow and no amounts deposited
in  the  Escrow  Account  shall  become  the  property  of  the  Company  or the
Investor(s)  or any other  entity,  or be subject to the debts of the Company or
the Investor(s) or any other entity.

      2.    Appointment of and Acceptance by Escrow Agent.  The  Investor(s) and
the Company  hereby  appoint  Escrow Agent to serve as Escrow  Agent  hereunder.
Escrow Agent hereby accepts such  appointment and, upon receipt by wire transfer
of the Escrow Funds in accordance with Section 3 below,  agrees to hold,  invest
and disburse the Escrow Funds in accordance with this Agreement.

            a.    The  Company  hereby  acknowledges  that the  Escrow  Agent is
general  counsel to the  Investor(s),  a partner in the  general  partner of the
Investor(s),  and counsel to the Investor(s) in connection with the transactions
contemplated  and referred  herein.  The Company agrees that in the event of any
dispute  arising in  connection  with this  Escrow  Agreement  or  otherwise  in
connection with any transaction or agreement  contemplated  and referred herein,
the Escrow Agent shall be permitted to continue to represent the Investor(s) and
the Company will not seek to disqualify such counsel.

      3.    Creation  of  Escrow  Funds.   On  or  prior  to  the  date  of  the
commencement of the Offering, the parties shall establish an escrow account with
the Escrow  Agent,  which escrow  account  shall be entitled as follows:  XsunX,
Inc./Cornell  Capital Partners,  LP Escrow Account for the deposit of the Escrow
Funds. The Investor(s) will instruct subscribers to wire funds to the account of
the Escrow Agent as follows:

Bank:                    Wachovia, N.A. of New Jersey
Routing #:               031201467
Account #:               2000014931134
Name on Account:         David Gonzalez Attorney Trust Account
Name on Sub-Account:     XsunX, Inc./Cornell Capital Partners, LP Escrow Account

      4.    Deposits into the Escrow Account.  The Investor(s)  agrees that they
shall promptly  deliver funds for the payment of the  Convertible  Debentures to
Escrow Agent for deposit in the Escrow Account.

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      5.    Disbursements from the Escrow Account.

            a.    The  Escrow  Agent  will  continue  to hold such  funds  until
Cornell Capital Partners,  LP on behalf of the Investor(s) and Company execute a
Joint Written Direction  directing the Escrow Agent to disburse the Escrow Funds
pursuant to Joint Written  Direction  signed by the Company and the Investor(s).
In  disbursing  such funds,  Escrow Agent is  authorized to rely upon such Joint
Written  Direction  from the  Company  and the  Investor(s)  and may  accept any
signatory  from the Company  listed on the signature  page to this Agreement and
any signature from the Investor(s) that the Escrow Agent already has on file.

            b.    In the event  Escrow  Agent does not receive the amount of the
Escrow Funds from the Investor(s), Escrow Agent shall notify the Company and the
Investor(s). Upon receipt of payment instructions from the Company, Escrow Agent
shall refund to each subscriber  without  interest the amount received from each
Investor(s),  without  deduction,  penalty,  or expense to the  subscriber.  The
purchase  money returned to each  subscriber  shall be free and clear of any and
all claims of the Company, the Investor(s) or any of their creditors.

            c.    In the event  Escrow  Agent  does  receive  the  amount of the
Escrow  Funds prior to  expiration  of the Escrow  Period,  in no event will the
Escrow Funds be released to the Company  until such amount is received by Escrow
Agent in collected  funds.  For purposes of this Agreement,  the term "collected
funds" shall mean all funds  received by Escrow Agent which have cleared  normal
banking channels and are in the form of cash.

      6.    Collection  Procedure.  Escrow Agent is hereby authorized to deposit
the proceeds of each wire in the Escrow Account.

      7.    Suspension of Performance:  Disbursement Into Court. If at any time,
there  shall exist any dispute  between  the  Company and the  Investor(s)  with
respect to  holding or  disposition  of any  portion of the Escrow  Funds or any
other  obligations of Escrow Agent hereunder,  or if at any time Escrow Agent is
unable to determine, to Escrow Agent's sole satisfaction, the proper disposition
of any portion of the Escrow Funds or Escrow Agent's proper actions with respect
to its obligations hereunder, or if the parties have not within thirty (30) days
of the furnishing by Escrow Agent of a notice of resignation pursuant to Section
9 hereof, appointed a successor Escrow Agent to act hereunder, then Escrow Agent
may, in its sole discretion, take either or both of the following actions:

            a.    suspend the performance of any of its  obligations  (including
without  limitation any  disbursement  obligations)  under this Escrow Agreement
until such dispute or uncertainty  shall be resolved to the sole satisfaction of
Escrow Agent or until a successor  Escrow Agent shall be appointed  (as the case
may be);  provided  however,  Escrow  Agent shall  continue to invest the Escrow
Funds in accordance with Section 8 hereof; and/or

            b.    petition  (by  means of an  interpleader  action  or any other
appropriate method) any court of competent  jurisdiction in any venue convenient
to Escrow Agent, for  instructions  with respect to such dispute or uncertainty,
and to the  extent  required  by law,  pay into  such  court,  for  holding  and
disposition in accordance with the instructions of such court, all funds held by
it in the Escrow Funds,  after deduction and payment to Escrow Agent of all fees
and expenses  (including  court costs and attorneys'  fees) payable to, incurred
by, or expected to be incurred by Escrow Agent in connection with performance of
its duties and the exercise of its rights hereunder.

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            c.    Escrow  Agent  shall have no  liability  to the  Company,  the
Investor(s), or any person with respect to any such suspension of performance or
disbursement  into  court,  specifically  including  any  liability  or  claimed
liability that may arise, or be alleged to have arisen, out of or as a result of
any delay in the  disbursement of funds held in the Escrow Funds or any delay in
with respect to any other action required or requested of Escrow Agent.

      8.    Investment  of Escrow  Funds.  Escrow Agent shall deposit the Escrow
Funds in a non-interest bearing account.

      If Escrow  Agent has not  received a Joint  Written  Direction at any time
that an investment decision must be made, Escrow Agent shall maintain the Escrow
Funds, or such portion thereof,  as to which no Joint Written Direction has been
received, in a non-interest bearing account.

      9.    Resignation  and Removal of Escrow  Agent.  Escrow  Agent may resign
from the  performance of its duties  hereunder at any time by giving thirty (30)
days' prior  written  notice to the  parties or may be removed,  with or without
cause, by the parties,  acting jointly,  by furnishing a Joint Written Direction
to Escrow  Agent,  at any time by the  giving of ten (10)  days'  prior  written
notice  to  Escrow  Agent as  provided  herein  below.  Upon any such  notice of
resignation or removal,  the  representatives of the Investor(s) and the Company
identified  in Sections  13a.(iv) and 13b.(iv),  below,  jointly shall appoint a
successor  Escrow  Agent  hereunder,  which shall be a  commercial  bank,  trust
company or other financial  institution  with a combined  capital and surplus in
excess of  $10,000,000.00.  Upon the acceptance in writing of any appointment of
Escrow Agent hereunder by a successor Escrow Agent,  such successor Escrow Agent
shall  thereupon  succeed  to and become  vested  with all the  rights,  powers,
privileges  and duties of the retiring  Escrow  Agent,  and the retiring  Escrow
Agent  shall be  discharged  from its duties and  obligations  under this Escrow
Agreement,  but shall not be discharged  from any liability for actions taken as
Escrow Agent  hereunder  prior to such  succession.  After any  retiring  Escrow
Agent's  resignation or removal,  the provisions of this Escrow  Agreement shall
inure to its benefit as to any actions  taken or omitted to be taken by it while
it was Escrow Agent under this Escrow Agreement. The retiring Escrow Agent shall
transmit all records pertaining to the Escrow Funds and shall pay all funds held
by it in the Escrow Funds to the successor Escrow Agent,  after making copies of
such records as the retiring  Escrow Agent deems  advisable and after  deduction
and payment to the retiring  Escrow  Agent of all fees and  expenses  (including
court costs and  attorneys'  fees)  payable to,  incurred  by, or expected to be
incurred by the retiring  Escrow Agent in connection with the performance of its
duties and the exercise of its rights hereunder.

      10.   Liability of Escrow Agent.

            a.    Escrow  Agent  shall  have no  liability  or  obligation  with
respect to the Escrow  Funds except for Escrow  Agent's  willful  misconduct  or
gross  negligence.   Escrow  Agent's  sole  responsibility   shall  be  for  the
safekeeping, investment, and disbursement of the Escrow Funds in accordance with
the terms of this  Agreement.  Escrow  Agent  shall  have no  implied  duties or

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obligations  and shall not be charged  with  knowledge  or notice or any fact or
circumstance not  specifically set forth herein.  Escrow Agent may rely upon any
instrument,  not only as to its due execution,  validity and effectiveness,  but
also as to the truth and accuracy of any  information  contained  herein,  which
Escrow Agent shall in good faith  believe to be genuine,  to have been signed or
presented  by the person or parties  purporting  to sign the same and conform to
the provisions of this  Agreement.  In no event shall Escrow Agent be liable for
incidental,  indirect,  special,  and consequential or punitive damages.  Escrow
Agent shall not be obligated to take any legal action or commence any proceeding
in  connection  with the Escrow  Funds,  any account in which  Escrow  Funds are
deposited,  this Agreement or the Purchase Agreement, or to appear in, prosecute
or defend any such legal action or  proceeding.  Escrow Agent may consult  legal
counsel  selected  by  it  in  any  event  of  any  dispute  or  question  as to
construction  of any of the provisions  hereof or of any other  agreement or its
duties  hereunder,  or relating to any dispute  involving any party hereto,  and
shall  incur no  liability  and shall be fully  indemnified  from any  liability
whatsoever  in acting in  accordance  with the opinion or  instructions  of such
counsel.  The Company and the  Investor(s)  jointly and severally shall promptly
pay, upon demand, the reasonable fees and expenses of any such counsel.

            b.    Escrow Agent is hereby authorized,  in its sole discretion, to
comply with orders  issued or process  entered by any court with  respect to the
Escrow Funds, without determination by Escrow Agent of such court's jurisdiction
in the  matter.  If any  portion  of the Escrow  Funds is at any time  attached,
garnished  or  levied  upon  under  any  court  order,  or in case the  payment,
assignment,  transfer,  conveyance  or  delivery of any such  property  shall be
stayed or  enjoined  by any court  order,  or in any case any order  judgment or
decree shall be made or entered by any court affecting such property or any part
thereof,  then and in any such event,  Escrow Agent is  authorized,  in its sole
discretion, to rely upon and comply with any such order, writ judgment or decree
which it is advised by legal counsel  selected by it,  binding upon it,  without
the need for appeal or other action;  and if Escrow Agent complies with any such
order,  writ,  judgment or decree,  it shall not be liable to any of the parties
hereto or to any other person or entity by reason of such compliance even though
such order,  writ  judgment or decree may be  subsequently  reversed,  modified,
annulled, set aside or vacated.

      11.   Indemnification  of Escrow  Agent.  From and at all times  after the
date of this Agreement, the parties jointly and severally, shall, to the fullest
extent  permitted by law and to the extent provided  herein,  indemnify and hold
harmless Escrow Agent and each director, officer, employee,  attorney, agent and
affiliate of Escrow Agent (collectively,  the "Indemnified Parties") against any
and all actions,  claims (whether or not valid), losses,  damages,  liabilities,
costs  and  expenses  of  any  kind  or  nature  whatsoever  (including  without
limitation  reasonable  attorney's  fees,  costs and  expenses)  incurred  by or
asserted against any of the Indemnified  Parties from and after the date hereof,
whether direct, indirect or consequential,  as a result of or arising from or in
any way relating to any claim,  demand,  suit, action, or proceeding  (including
any inquiry or  investigation) by any person,  including without  limitation the
parties to this Agreement,  whether  threatened or initiated,  asserting a claim
for any legal or  equitable  remedy  against  any  person  under any  statute or
regulation, including, but not limited to, any federal or state securities laws,
or under any common law or  equitable  cause or  otherwise,  arising  from or in
connection with the negotiation,  preparation, execution, performance or failure
of performance of this Agreement or any transaction contemplated herein, whether
or not any such  Indemnified  Party is a party to any such action or proceeding,
suit or the target of any such inquiry or investigation; provided, however, that

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no  Indemnified  Party  shall  have the right to be  indemnified  hereunder  for
liability finally determined by a court of competent jurisdiction, subject to no
further appeal, to have resulted from the gross negligence or willful misconduct
of such  Indemnified  Party.  If any such  action or claim  shall be  brought or
asserted against any Indemnified  Party,  such Indemnified  Party shall promptly
notify the Company and the Investor(s) hereunder in writing, and the Investor(s)
and the Company shall assume the defense  thereof,  including the  employment of
counsel and the payment of all expenses.  Such  Indemnified  Party shall, in its
sole discretion,  have the right to employ separate counsel (who may be selected
by such  Indemnified  Party in its sole  discretion)  in any such  action and to
participate and to participate in the defense thereof, and the fees and expenses
of such  counsel  shall  be paid by such  Indemnified  Party,  except  that  the
Investor(s) and/or the Company shall be required to pay such fees and expense if
(a) the  Investor(s) or the Company agree to pay such fees and expenses,  or (b)
the  Investor(s)  and/or the  Company  shall fail to assume the  defense of such
action or proceeding or shall fail, in the sole  discretion of such  Indemnified
Party, to employ counsel reasonably satisfactory to the Indemnified Party in any
such action or proceeding, (c) the Investor(s) and the Company are the plaintiff
in any such action or  proceeding  or (d) the named or potential  parties to any
such action or proceeding  (including any potentially impleaded parties) include
both  the  Indemnified  Party,  the  Company  and/or  the  Investor(s)  and  the
Indemnified  Party shall have been  advised by counsel  that there may be one or
more legal  defenses  available to it which are different  from or additional to
those  available  to the Company or the  Investor(s).  The  Investor(s)  and the
Company  shall be  jointly  and  severally  liable to pay fees and  expenses  of
counsel  pursuant to the preceding  sentence,  except that any obligation to pay
under  clause (a) shall apply only to the party so  agreeing.  All such fees and
expenses payable by the Company and/or the Investor(s) pursuant to the foregoing
sentence  shall be paid from time to time as  incurred,  both in  advance of and
after the final  disposition  of such action or claim.  The  obligations  of the
parties under this section shall survive any termination of this Agreement,  and
resignation  or  removal  of  the  Escrow  Agent  shall  be  independent  of any
obligation of Escrow Agent.

      The parties agree that neither  payment by the Company or the  Investor(s)
of any claim by Escrow Agent for indemnification  hereunder shall impair, limit,
modify,  or affect,  as between the Investor(s) and the Company,  the respective
rights and obligations of Investor(s),  on the one hand, and the Company, on the
other hand.

      12.   Expenses  of Escrow  Agent.  Except as set forth in  Section  11 the
Company shall  reimburse  Escrow Agent for all of its  reasonable  out-of-pocket
expenses,  including  attorneys' fees, travel expenses,  telephone and facsimile
transmission  costs,  postage  (including  express mail and  overnight  delivery
charges),   copying  charges  and  the  like.  All  of  the   compensation   and
reimbursement  obligations  set forth in this  Section  shall be  payable by the
Company,  upon demand by Escrow Agent. The obligations of the Company under this
Section shall survive any  termination of this Agreement and the  resignation or
removal of Escrow Agent.

      13.   Warranties.

            a.    The  Investor(s)  makes  the  following   representations  and
warranties to Escrow Agent:

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                  (i)   The  Investor(s) has full power and authority to execute
and deliver this Agreement and to perform its obligations hereunder.

                  (ii)  This  Agreement  has been duly approved by all necessary
action of the  Investor(s),  including  any  necessary  approval  of the limited
partner of the Investor(s) or necessary corporate approval,  as applicable,  has
been executed by duly  authorized  officers of the  Investor(s),  enforceable in
accordance with its terms.

                  (iii) The  execution,   delivery,   and   performance  of  the
Investor(s)  of this  Agreement  will not  violate,  conflict  with,  or cause a
default  under any  agreement  of  limited  partnership  of  Investor(s)  or the
articles of  incorporation  or bylaws of the  Investor(s) (as  applicable),  any
applicable law or regulation, any court order or administrative ruling or degree
to which the  Investor(s)  is a party or any of its property is subject,  or any
agreement, contract, indenture, or other binding arrangement.

                  (iv)  Mark  Angelo  has  been  duly  appointed  to  act as the
representative of the Investor(s)  hereunder and has full power and authority to
execute,  deliver, and perform this Escrow Agreement, to execute and deliver any
Joint  Written  Direction,  to amend,  modify,  or waive any  provision  of this
Agreement,  and  to  take  any  and  all  other  actions  as  the  Investor(s)'s
representative  under this  Agreement,  all without further consent or direction
form, or notice to, the Investor(s) or any other party.

                  (v)   No  party  other  than  the   parties   hereto  and  the
Investor(s)s  have, or shall have, any lien,  claim or security  interest in the
Escrow  Funds or any part  thereof.  No  financing  statement  under the Uniform
Commercial Code is on file in any jurisdiction  claiming a security  interest in
or describing  (whether  specifically or generally) the Escrow Funds or any part
thereof.

                  (vi)  All  of  the   representations  and  warranties  of  the
Investor(s)  contained  herein are true and  complete  as of the date hereof and
will be true and complete at the time of any disbursement from the Escrow Funds.

            b.    The Company makes the following representations and warranties
to the Escrow Agent:

                  (i)   The Company is a  corporation  duly  organized,  validly
existing,  and in good standing  under the laws of the State of Colorado and has
full power and  authority to execute and deliver this  Agreement  and to perform
its obligations hereunder.

                  (ii)  This  Agreement  has been duly approved by all necessary
corporate action of the Company,  including any necessary  shareholder approval,
has been executed by duly  authorized  officers of the Company,  enforceable  in
accordance with its terms.

                  (iii) The execution,  delivery, and performance by the Company
of this Agreement is in accordance  with the Securities  Purchase  Agreement and
will not violate,  conflict  with, or cause a default under the  certificate  of
incorporation  or bylaws of the Company,  any applicable law or regulation,  any
court order or  administrative  ruling or decree to which the Company is a party
or any of its property is subject,  or any agreement,  contract,  indenture,  or
other  binding  arrangement,  including  without  limitation  to the  Securities
Purchase Agreement, to which the Company is a party.

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                  (iv)  Tom  Djokovich  has been  duly  appointed  to act as the
representative  of the Company  hereunder  and has full power and  authority  to
execute,  deliver, and perform this Agreement,  to execute and deliver any Joint
Written Direction, to amend, modify or waive any provision of this Agreement and
to take all other actions as the Company's  Representative under this Agreement,
all without  further consent or direction from, or notice to, the Company or any
other party.

                  (v)   No  party  other  than  the   parties   hereto  and  the
Investor(s)s  have, or shall have, any lien,  claim or security  interest in the
Escrow  Funds or any part  thereof.  No  financing  statement  under the Uniform
Commercial Code is on file in any jurisdiction  claiming a security  interest in
or describing  (whether  specifically or generally) the Escrow Funds or any part
thereof.

                  (vi)  All of the representations and warranties of the Company
contained  herein are true and  complete  as of the date hereof and will be true
and complete at the time of any disbursement from the Escrow Funds.

      14.   Consent  to  Jurisdiction  and  Venue.  In the event  that any party
hereto commences a lawsuit or other proceeding  relating to or arising from this
Agreement,  the parties  hereto agree that the United States  District Court for
the District of New Jersey shall have the sole and exclusive  jurisdiction  over
any  such   proceeding.   If  all  such  courts  lack  federal   subject  matter
jurisdiction,  the parties agree that the Superior Court Division of New Jersey,
Chancery  Division of Hudson County shall have sole and exclusive  jurisdiction.
Any of these  courts  shall be proper  venue for any such  lawsuit  or  judicial
proceeding and the parties hereto waive any objection to such venue. The parties
hereto consent to and agree to submit to the  jurisdiction  of any of the courts
specified  herein  and agree to accept the  service of process to vest  personal
jurisdiction over them in any of these courts.

      15.   Notice. All notices and other  communications  hereunder shall be in
writing and shall be deemed to have been validly served, given or delivered five
(5) days after deposit in the United States mails, by certified mail with return
receipt requested and postage prepaid,  when delivered  personally,  one (1) day
delivered  to  any  overnight   courier,   or  when   transmitted  by  facsimile
transmission  and upon  confirmation of receipt and addressed to the party to be
notified as follows:

If to Investor(s), to:       Cornell Capital Partners, LP
                             101 Hudson Street - Suite 3700
                             Jersey City, NJ 07302
                             Attention: Mark Angelo
                                        Portfolio Manager
                             Telephone: (201) 985-8300
                             Facsimile: (201) 985-8266

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If to Escrow Agent, to:      David Gonzalez, Esq.
                             101 Hudson Street - Suite 3700
                             Jersey City, NJ 07302
                             Telephone: (201) 985-8300
                             Facsimile: (201) 985-8266

If to the Company, to:       XsunX, Inc.
                             65 Enterprise
                             Aliso Viejo, CA 92656
                             Attention: Tom Djokovich
                             Telephone: (949) 330-8060
                             Facsimile: (949) 266-5823

With a copy to:              Sichenzia Ross Friedman Ference LLP
                             1065 Avenue of the Americas
                             New York, NY 10018
                             Telephone: (212) 930-9700
                             Facsimile: (212) 930-9725

Or to such other address as each party may designate for itself by like notice.

      16.   Amendments  or  Waiver.  This  Agreement  may  be  changed,  waived,
discharged  or terminated  only by a writing  signed by the parties  hereto.  No
delay or omission by any party in exercising any right with respect hereto shall
operate as waiver.  A waiver on any one occasion shall not be construed as a bar
to, or waiver of, any right or remedy on any future occasion.

      17.   Severability.  To the  extent any  provision  of this  Agreement  is
prohibited  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 provision or the remaining provisions of this
Agreement.

      18.   Governing Law. This Agreement  shall be construed and interpreted in
accordance  with the  internal  laws of the State of New Jersey  without  giving
effect to the conflict of laws principles thereof.

      19.   Entire  Agreement.  This Agreement  constitutes the entire Agreement
between the parties relating to the holding, investment, and disbursement of the
Escrow Funds and sets forth in their entirety the  obligations and duties of the
Escrow Agent with respect to the Escrow Funds.

      20.   Binding Effect. All of the terms of this Agreement,  as amended from
time to time,  shall be binding upon, inure to the benefit of and be enforceable
by the respective heirs, successors and assigns of the Investor(s), the Company,
or the Escrow Agent.

                                       9
<PAGE>

      21.   Execution of  Counterparts.  This  Agreement  and any Joint  Written
Direction  may be  executed  in  counter  parts,  which when so  executed  shall
constitute one and same agreement or direction.

      22.   Termination.  Upon the  first to  occur of the  disbursement  of all
amounts  in the  Escrow  Funds  pursuant  to  Joint  Written  Directions  or the
disbursement of all amounts in the Escrow Funds into court pursuant to Section 7
hereof,  this Agreement  shall  terminate and Escrow Agent shall have no further
obligation or liability  whatsoever with respect to this Agreement or the Escrow
Funds.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       10
<PAGE>

      IN WITNESS WHEREOF the parties to this Escrow  Agreement have hereunto set
their hands and seals the day and year above set forth.

                                               XSUNX, INC.

                                               By:______________________________
                                                  Name:  Tom Djokovich
                                                  Title: Chief Executive Officer

                                               CORNELL CAPITAL PARTNERS, LP

                                               By: Yorkville Advisors, LLC
                                               Its: General Partner

                                               By:______________________________
                                                  Name:  Mark Angelo
                                                  Title: Portfolio Manager

                                               By:______________________________
                                                  Name: David Gonzalez, Esq.

                                       11EXHIBIT 10.6

                     IRREVOCABLE TRANSFER AGENT INSTRUCTIONS

                               December ___, 2005

Mountain Share Transfer
1625 Abilene Drive
Broomfield, CO 80020-1147

      RE:   XSUNX, INC.

Ladies and Gentlemen:

      Reference  is made to that  certain  Securities  Purchase  Agreement  (the
"Securities  Purchase  Agreement")  of even date herewith by and between  XsunX,
Inc.,  a  Colorado  corporation  (the  "Company"),  and the  Buyers set forth on
Schedule I attached thereto (collectively the "Buyers"), and that certain Pledge
and Escrow Agreement (the "Pledge  Agreement")  dated July 14, 2005, as amended,
among the Company, the Buyers and the David Gonzalez, Esq. (the "Escrow Agent").
Pursuant to the  Securities  Purchase  Agreement,  the Company shall sell to the
Buyers,  an the Buyers shall purchase from the Company,  convertible  debentures
(collectively,  the  "Debentures")  in the  aggregate  principal  amount of Five
Million Dollars ($5,000,000),  plus accrued interest, which are convertible into
shares of the  Company's  common  stock,  no par value  per share  (the  "Common
Stock"),  at the Buyers  discretion.  The  Company  has also issued to the Buyer
warrants to  purchase up to  4,375,000  shares of Common  Stock,  at the Buyer's
discretion (the "Warrant").  These instructions relate to the following stock or
proposed stock issuances or transfers:

      1.    Shares of Common Stock to be issued to the Buyers upon conversion of
            the Debentures ("Conversion Shares") plus the shares of Common Stock
            to be issued to the Buyers upon  conversion of accrued  interest and
            liquidated damages into Common Stock (the "Interest Shares").

      2.    Up to  4,375,000  shares of  Common  Stock to be issued to the Buyer
            upon exercise of the Warrant (the "Warrant Shares").

      3.    The  transfer  of up to  26,798,418  shares  of  Common  Stock  (the
            "Escrowed  Shares")  that have been  delivered  to the Escrow  Agent
            pursuant to the Pledge Agreement and the Insider Pledge Agreement.

<PAGE>

      This letter shall serve as our irrevocable  authorization and direction to
Mountain Share Transfer (the "Transfer Agent") to do the following:

      1.    Conversion Shares and Warrant Shares.

            a.    Instructions Applicable to Transfer Agent. With respect to the
                  Conversion Shares, Warrant Shares and the Interest Shares, the
                  Transfer  Agent shall  issue the  Conversion  Shares,  Warrant
                  Shares and the Interest Shares to the Buyers from time to time
                  upon  delivery to the Transfer  Agent of a properly  completed
                  and duly executed Conversion Notice (the "Conversion  Notice")
                  in the form  attached  as  Exhibit A to the  Debentures,  or a
                  properly  completed  and duly  executed  Exercise  Notice (the
                  "Exercise  Notice")  in the form  attached as Exhibit A to the
                  Warrant,  delivered to the Transfer  Agent by the Escrow Agent
                  on behalf of the Company.  Upon receipt of a Conversion Notice
                  or an Exercise  Notice,  the Transfer Agent shall within three
                  (3)  Trading  Days  thereafter  (i) issue and  surrender  to a
                  common  carrier  for  overnight  delivery  to the  address  as
                  specified in the Conversion  Notice or the Exercise  Notice, a
                  certificate,  registered  in  the  name  of the  Buyer  or its
                  designees,  for the number of shares of Common  Stock to which
                  the Buyer  shall be  entitled  as set forth in the  Conversion
                  Notice or Exercise  Notice or (ii) provided the Transfer Agent
                  is  participating in The Depository Trust Company ("DTC") Fast
                  Automated Securities Transfer Program, upon the request of the
                  Buyers, credit such aggregate number of shares of Common Stock
                  to which the Buyers  shall be entitled to the Buyer's or their
                  designees'  balance  account  with  DTC  through  its  Deposit
                  Withdrawal  At Custodian  ("DWAC")  system  provided the Buyer
                  causes its bank or broker to  initiate  the DWAC  transaction.
                  For purposes  hereof "Trading Day" shall mean any day on which
                  the Nasdaq Market is open for customary trading.

            b.    The  Company  hereby  confirms to the  Transfer  Agent and the
                  Buyer that certificates representing the Conversion Shares and
                  the  Warrant  Shares  shall  not bear any  legend  restricting
                  transfer  and  should  not be  subject  to  any  stop-transfer
                  restrictions and shall otherwise be freely transferable on the
                  books and records of the Company; provided that counsel to the
                  Company delivers (i) the Notice of Effectiveness  set forth in
                  Exhibit I  attached  hereto  and (ii) an opinion of counsel in
                  the form set forth in Exhibit II attached hereto,  and that if
                  the Conversion Shares,  Warrant Shares and the Interest Shares
                  are not  registered for sale under the Securities Act of 1933,
                  as amended,  then the certificates for the Conversion  Shares,
                  Warrant  Shares and Interest  Shares shall bear the  following
                  legend:

                  "THE SECURITIES  REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
                  REGISTERED  UNDER THE SECURITIES  ACT OF 1933, AS AMENDED,  OR
                  APPLICABLE  STATE  SECURITIES  LAWS. THE SECURITIES  HAVE BEEN
                  ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD,
                  TRANSFERRED  OR  ASSIGNED  IN  THE  ABSENCE  OF  AN  EFFECTIVE

                                       2
<PAGE>

                  REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
                  ACT OF 1933, AS AMENDED,  OR APPLICABLE STATE SECURITIES LAWS,
                  OR AN OPINION OF COUNSEL,  IN A FORM REASONABLY  ACCEPTABLE TO
                  THE COMPANY,  THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT
                  OR APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO
                  RULE 144 UNDER SAID ACT."

            c.    In the event that  counsel to the Company  fails or refuses to
                  render an opinion as required to issue the  Conversion  Shares
                  or  the  Warrant  Shares  in  accordance  with  the  preceding
                  paragraph  (either  with or without  restrictive  legends,  as
                  applicable),   then  the  Company  irrevocably  and  expressly
                  authorizes  counsel to the Buyer to render such  opinion.  The
                  Transfer  Agent  shall  accept and be entitled to rely on such
                  opinion for the purposes of issuing the Conversion Shares.

            d.    Instructions  Applicable  to  Escrow  Agent.  Upon the  Escrow
                  Agent's receipt of a properly  completed  Conversion Notice or
                  Exercise  Notice and the Aggregate  Exercise Price (as defined
                  in the  Warrant),  the  Escrow  Agent  shall,  within  one (1)
                  Trading  Day  thereafter,  send  to  the  Transfer  Agent  the
                  Conversion  Notice or Exercise Notice,  which shall constitute
                  an  irrevocable  instruction  to the Transfer Agent to process
                  such  Conversion  Notice or Exercise Notice in accordance with
                  the terms of these instructions.

      2.    Escrowed Shares.

            a.    With respect to the Escrowed Shares,  upon an event of default
                  as set forth in the Pledge  Agreement  or the  Insider  Pledge
                  Agreement,  the Escrow Agent shall send written  notice to the
                  Transfer  Agent  ("Escrow  Notice") to transfer such number of
                  Escrow Shares as set forth in the Escrow Notice to the Buyers.
                  Upon receipt of an Escrow  Notice,  the  Transfer  Agent shall
                  promptly  transfer  such number of Escrow Shares to the Buyers
                  as shall be set forth in the Escrow  Notice  delivered  to the
                  Transfer  Agent by the Escrow  Agent.  Further,  the  Transfer
                  Agent shall  promptly  transfer such shares from the Buyers to
                  any  subsequent  transferee  promptly  upon receipt of written
                  notice from the Buyers or their counsel.  If the Escrow Shares
                  are not  registered for sale under the Securities Act of 1933,
                  as amended,  then the certificates for the Escrow Shares shall
                  bear the legend set forth in Section 1b.

            b.    In the event that  counsel to the Company  fails or refuses to
                  render an opinion as may be required by the Transfer  Agent to
                  affect a transfer of the Escrow Shares (either with or without
                  restrictive   legends,   as  applicable),   then  the  Company
                  irrevocably and expressly  authorizes counsel to the Buyers to
                  render such  opinion.  The Transfer  Agent shall accept and be
                  entitles   to  rely  on  such   opinion  for  the  purpose  of
                  transferring the Escrow Shares.

                                       3
<PAGE>

      3.    All Shares.

            a.    The Transfer  Agent shall reserve for issuance to the Buyers a
                  minimum of 50,000,000  Conversion Shares and 4,375,000 Warrant
                  Shares.  All such  shares  shall  remain in  reserve  with the
                  Transfer  Agent until the Buyers  provides the Transfer  Agent
                  instructions  that the  shares  or any  part of them  shall be
                  taken out of  reserve  and shall no longer be  subject  to the
                  terms of these instructions.

            b.    The Transfer  Agent shall rely  exclusively  on the Conversion
                  Notice,  the Escrow Notice,  or the Exercise  Notice and shall
                  have  no  liability  for  relying  on such  instructions.  Any
                  Conversion Notice, Escrow Notice, or Exercise Notice delivered
                  hereunder shall  constitute an irrevocable  instruction to the
                  Transfer Agent to process such notice or notices in accordance
                  with  the  terms  thereof.  Such  notice  or  notices  may  be
                  transmitted   to  the  Transfer  Agent  by  facsimile  or  any
                  commercially reasonable method.

            c.    The  Company  hereby  confirms to the  Transfer  Agent and the
                  Buyers that no instructions other than as contemplated  herein
                  will be given to Transfer Agent by the Company with respect to
                  the matters  referenced  herein. The Company hereby authorizes
                  the Transfer Agent, and the Transfer Agent shall be obligated,
                  to  disregard  any  contrary  instructions  received  by or on
                  behalf of the Company.

      Certain  Notice  Regarding the Escrow Agent.  The Company and the Transfer
Agent hereby acknowledge that the Escrow Agent is general counsel to the Buyers,
a partner of the  general  partner  of the  Buyers and  counsel to the Buyers in
connection with the transactions  contemplated and referred herein.  The Company
and the  Transfer  Agent  agree  that in the  event of any  dispute  arising  in
connection  with this Agreement or otherwise in connection  with any transaction
or  agreement  contemplated  and  referred  herein,  the Escrow  Agent  shall be
permitted  to continue to  represent  the Buyers and neither the Company nor the
Transfer Agent will seek to disqualify such counsel.

      The Company  hereby agrees that it shall not replace the Transfer Agent as
the Company's  transfer agent unless the subsequent  transfer agent agrees to be
bound by these instructions.

      Any attempt by Transfer  Agent to resign as the Company's  transfer  agent
hereunder shall not be effective until such time as the Company  provides to the
Transfer Agent written notice that a suitable replacement has agreed to serve as
transfer agent and to be bound by the terms and conditions of these  Irrevocable
Transfer Agent Instructions.

      The Company and the  Transfer  Agent hereby  acknowledge  and confirm that
complying  with the terms of this  Agreement does not and shall not prohibit the
Transfer Agent from satisfying any and all fiduciary responsibilities and duties
it may owe to the Company.

                                       4
<PAGE>

      The Company and the Transfer Agent  acknowledge that the Buyers is relying
on the  representations and covenants made by the Company and the Transfer Agent
hereunder  and are a material  inducement to the Buyers  purchasing  convertible
debentures under the Securities Purchase Agreement. The Company and the Transfer
Agent further acknowledge that without such representations and covenants of the
Company and the Transfer Agent made hereunder, the Buyers would not purchase the
Debentures.

      Each party hereto  specifically  acknowledges and agrees that in the event
of a breach or threatened breach by a party hereto of any provision hereof,  the
Buyers  will  be  irreparably  damaged  and  that  damages  at law  would  be an
inadequate  remedy if these  Irrevocable  Transfer Agent  Instructions  were not
specifically enforced.  Therefore, in the event of a breach or threatened breach
by a party hereto, including,  without limitation,  the attempted termination of
the  agency  relationship  created  by this  instrument,  the  Buyers  shall  be
entitled,  in  addition  to all  other  rights  or  remedies,  to an  injunction
restraining such breach,  without being required to show any actual damage or to
post any bond or other security,  and/or to a decree for specific performance of
the provisions of these Irrevocable Transfer Agent Instructions.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       5
<PAGE>

      IN  WITNESS  WHEREOF,  the  parties  have  caused  this  letter  agreement
regarding  Irrevocable  Transfer  Agent  Instructions  to be duly  executed  and
delivered as of the date first written above.

                                               COMPANY:

                                               XSUNX, INC.

                                               By:______________________________
                                                  Name:  Tom Djokovich
                                                  Title: Chief Executive Officer

                                               _________________________________
                                               David Gonzalez, Esq.

MOUNTAIN SHARE TRANSFER

By:_____________________________
Name:___________________________
Title:__________________________

                                       6
<PAGE>

                                   SCHEDULE I

                               SCHEDULE OF BUYERS

<TABLE>
<CAPTION>

                                                                 Address/Facsimile
Name                            Signature                        Number of Buyers
----------------------------    -----------------------------    ------------------------------
<S>                             <C>                              <C>
Cornell Capital Partners, LP    By:   Yorkville Advisors, LLC    101 Hudson Street - Suite 3700
                                Its:  General Partner            Jersey City, NJ  07303
                                                                 Facsimile: (201) 985-8266

                                By:__________________________
                                Name: Mark Angelo
                                Its:  Portfolio Manager
</TABLE>

                                  SCHEDULE I-1
<PAGE>

                                    EXHIBIT I

                   TO IRREVOCABLE TRANSFER AGENT INSTRUCTIONS

                         FORM OF NOTICE OF EFFECTIVENESS
                            OF REGISTRATION STATEMENT

_________, 2005

--------

Attention:

      RE:   XSUNX, INC.

Ladies and Gentlemen:

      We are counsel to XsunX,  Inc., (the "Company"),  and have represented the
Company in connection with that certain Securities Purchase Agreement,  dated as
of December __, 2005 (the "Securities Purchase Agreement"),  entered into by and
among the  Company  and the  Buyers set forth on  Schedule  I  attached  thereto
(collectively the "Buyers")  pursuant to which the Company has agreed to sell to
the Buyers up to $5,000,000 of secured  convertible  debentures,  which shall be
convertible into shares (the "Conversion Shares") of the Company's common stock,
no par value per share (the "Common Stock"), in accordance with the terms of the
Securities  Purchase  Agreement.  Pursuant to the Securities Purchase Agreement,
the Company also has entered into a Registration  Rights Agreement,  dated as of
December  ___,  2005,  with  the  Buyers  (the  "Investor   Registration  Rights
Agreement")  pursuant  to which the  Company  agreed,  among  other  things,  to
register the Conversion Shares under the Securities Act of 1933, as amended (the
"1933 Act"). In connection with the Company's  obligations  under the Securities
Purchase Agreement and the Registration Rights Agreement,  on _______, 2005, the
Company  filed  a  Registration   Statement   (File  No.   ___-_________)   (the
"Registration  Statement")  with the  Securities  and Exchange  Commission  (the
"SEC") relating to the sale of the Conversion Shares.

      In  connection  with the  foregoing,  we advise the Transfer  Agent that a
member of the SEC's staff has advised us by  telephone  that the SEC has entered
an order declaring the  Registration  Statement  effective under the 1933 Act at
____ P.M. on __________, 2005 and we have no knowledge, after telephonic inquiry
of a member of the SEC's staff, that any stop order suspending its effectiveness
has been issued or that any proceedings for that purpose are pending before,  or
threatened  by, the SEC and the  Conversion  Shares are available for sale under
the 1933 Act pursuant to the Registration Statement.

                                  EXHIBIT I-1

<PAGE>

      The Buyers has  confirmed  it shall  comply with all  securities  laws and
regulations   applicable  to  it  including   applicable   prospectus   delivery
requirements upon sale of the Conversion Shares.

                                               Very truly yours,

                                               By:______________________________

                                  EXHIBIT I-2

<PAGE>

                                   EXHIBIT II

                   TO IRREVOCABLE TRANSFER AGENT INSTRUCTIONS

                                 FORM OF OPINION

________________ 2005

VIA FACSIMILE AND REGULAR MAIL

--------

Attention:

      RE:   XSUNX, INC.

Ladies and Gentlemen:

      We have  acted as special  counsel  to XsunX,  Inc.  (the  "Company"),  in
connection  with the  registration  of  ___________shares  (the "Shares") of its
common stock with the Securities and Exchange  Commission  (the "SEC").  We have
not acted as your  counsel.  This  opinion is given at the  request and with the
consent of the Company.

      In rendering  this opinion we have relied on the accuracy of the Company's
Registration Statement on Form SB-2, as amended (the "Registration  Statement"),
filed by the Company with the SEC on _________  ___, 2005. The Company filed the
Registration  Statement on behalf of certain selling  stockholders (the "Selling
Stockholders").  This opinion relates solely to the Selling  Shareholders listed
on Exhibit  "A" hereto and  number of Shares  set forth  opposite  such  Selling
Stockholders'  names. The SEC declared the Registration  Statement  effective on
__________ ___, 2005.

      We  understand  that the  Selling  Stockholders  acquired  the Shares in a
private offering exempt from  registration  under the Securities Act of 1933, as
amended. Information regarding the Shares to be sold by the Selling Shareholders
is  contained  under the  heading  "Selling  Stockholders"  in the  Registration
Statement,  which information is incorporated herein by reference.  This opinion
does not relate to the issuance of the Shares to the Selling  Stockholders.  The
opinions set forth herein  relate  solely to the sale or transfer by the Selling
Stockholders  pursuant to the  Registration  Statement under the Federal laws of
the United States of America.  We do not express any opinion  concerning any law
of any state or other jurisdiction.

                                   EXHIBIT II

<PAGE>

      In  rendering  this  opinion  we have  relied  upon  the  accuracy  of the
foregoing statements.

      Based on the  foregoing,  it is our  opinion  that the  Shares  have  been
registered with the Securities and Exchange  Commission under the Securities Act
of 1933,  as  amended,  and that  ________  may remove the  restrictive  legends
contained on the Shares. This opinion relates solely to the number of Shares set
forth opposite the Selling Stockholders listed on Exhibit "A" hereto.

      This opinion is furnished to Transfer  Agent  specifically  in  connection
with the sale or  transfer of the Shares,  and solely for your  information  and
benefit.  This  letter  may not be relied  upon by  Transfer  Agent in any other
connection,  and it may not be relied upon by any other person or entity for any
purpose  without our prior  written  consent.  This opinion may not be assigned,
quoted or used without our prior written consent.  The opinions set forth herein
are rendered as of the date hereof and we will not supplement  this opinion with
respect to changes in the law or factual matters subsequent to the date hereof.

                                               Very truly yours,

                                               By:______________________________

                                  EXHIBIT II-2

<PAGE>

                                    EXHIBIT A

                         (LIST OF SELLING STOCKHOLDERS)

NAME:                                          NO. OF SHARES:
--------------------------------               ---------------------------------

                                   EXHIBIT A

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