Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - Infitech Ventures Inc. - Exhibit 10.08

PROMISSORY NOTE 

 

	Name of Borrower: 	Infitech Ventures Inc.
  
	  	20 Lyall Avenue 
	  	Toronto Ontario, Canada M4E
      1V9 

	Name of Lender: 	Paul G. Daly 
	 	20 Lyall
      Avenue  
	  	Toronto Ontario, Canada M4E
      1V9 

	 	1. 	
      For value received, Borrower agrees to pay the Lender
      the amount of $US 6000.00 on a date to be determined. Payment will be sent
      to the Lender at 20 Lyall Avenue, Toronto Ontario Canada M4E 1V9. The loan
      is unsecured, non interest bearing and payable on demand. Payment can be
      made in cash or common stock with any stock repayment subject to
      requirements imposed by the Securities and Exchange Commission under the
      Securities Exchange Act of 1934.

  Dated at the City of Toronto this 4th day of June 2007.
  

  

	Signature of Borrower or authorized signatory
      of Corporation	/s/ Paul G. Daly 
	 	 
	 	 
	Name of authorized signatory of Corporation	PAUL G. DALY
	 	 
	 	 
	Name of Corporation 	INFITECH VENTURES INC.Filed by Automated Filing Services Inc. (604) 609-0244 - Infitech Ventures Inc. - Exhibit 10.09

PROMISSORY NOTE 

 

	Name of Borrower: 	Infitech Ventures Inc.
  
	  	20 Lyall Avenue 
	  	Toronto Ontario, Canada M4E
      1V9 
	  	  
	  	  
	  	  
	  	  
	Name of Lender: 	Paul G. Daly 
		20 Lyall
      Avenue
	  	Toronto Ontario, Canada M4E
      1V9 

 

	 	1. 	
      For value received, Borrower agrees to pay the Lender
      the amount of $US 6095.00 on a date to be determined. Payment will be sent
      to the Lender at 20 Lyall Avenue, Toronto Ontario Canada M4E 1V9. The loan
      is unsecured, non interest bearing and payable on demand. Payment can be
      made in cash or common stock with any stock repayment subject to
      requirements imposed by the Securities and Exchange Commission under the
      Securities Exchange Act of 1934.

  Dated at the City of Toronto this 19th day of July
  2007. 

  

	Signature of Borrower or authorized signatory
      of Corporation	/s/ Paul G. Daly 
	 	 
	 	 
	Name of authorized signatory of Corporation	PAUL G. DALY
	 	 
	 	 
	Name of Corporation 	INFITECH VENTURES INC.Filed by Automated Filing Services Inc. (604) 609-0244 - Infitech Ventures Inc. - Exhibit 10.11

PROMISSORY NOTE 

 

	Name of Borrower: 	Infitech Ventures Inc.
  
	  	20 Lyall Avenue 
	  	Toronto Ontario, Canada M4E
      1V9 

 

	Name of Lender: 	Paul G. Daly 
	 	20 Lyall
      Avenue 
	  	Toronto Ontario, Canada M4E
      1V9 

 

	 	1. 	
      For value received, Borrower agrees to pay the Lender
      the amount of $US 20,000.00 on a date to be determined. Payment will be
      sent to the Lender at 20 Lyall Avenue, Toronto Ontario Canada M4E 1V9. The
      loan is unsecured, non interest bearing and payable on demand. Payment can
      be made in cash or common stock with any stock repayment subject to
      requirements imposed by the Securities and Exchange Commission under the
      Securities Exchange Act of 1934.

Dated at the City of Toronto this 24th
  day of September, 2007. 

  

	Signature of Borrower or authorized signatory
      of Corporation	/s/ Paul G. Daly 
	 	 
	 	 
	Name of authorized signatory of Corporation	PAUL G. DALY
	 	 
	 	 
	Name of Corporation 	INFITECH VENTURES INC.Filed by Automated Filing Services Inc. (604) 609-0244 - Infitech Ventures Inc. - Exhibit 10.10

PROMISSORY NOTE 

 

	Name of Borrower: 	Infitech Ventures Inc.
  
	  	20 Lyall Avenue 
	  	Toronto Ontario, Canada M4E
      1V9 

 

	Name of Lender: 	Paul G. Daly 
	 	20 Lyall
      Avenue 
	  	Toronto Ontario, Canada M4E
      1V9 

 

	 	1. 	
      For value received, Borrower agrees to pay the Lender
      the amount of $US 5000.00 on a date to be determined. Payment will be sent
      to the Lender at 20 Lyall Avenue, Toronto Ontario Canada M4E 1V9. The loan
      is unsecured, non interest bearing and payable on demand. Payment can be
      made in cash or common stock with any stock repayment subject to
      requirements imposed by the Securities and Exchange Commission under the
      Securities Exchange Act of 1934.

Dated at the City of Toronto this 24th
  day of August, 2007. 

  

	Signature of Borrower or authorized signatory
      of Corporation	/s/ Paul G. Daly 
	 	 
	 	 
	Name of authorized signatory of Corporation	PAUL G. DALY
	 	 
	 	 
	Name of Corporation 	INFITECH VENTURES INC.EXHIBIT 10.1

                        COMMON STOCK PURCHASE AGREEMENT

<PAGE>

EXHIBIT 10.1

                                                                  EXECUTION COPY
                                                                  --------------
                         COMMON STOCK PURCHASE AGREEMENT

         COMMON STOCK PURCHASE AGREEMENT (the "Agreement"), dated as of November
1, 2007, by and between XsunX, Inc., a Colorado corporation (the "Company"), and
Fusion  Capital  Fund II,  LLC,  an  Illinois  limited  liability  company  (the
"Buyer").  Capitalized  terms used herein and not otherwise  defined  herein are
defined in Section 10 hereof.

                                    WHEREAS:

         Subject to the terms and  conditions set forth in this  Agreement,  the
Company  wishes  to sell to the  Buyer,  and the  Buyer  wishes  to buy from the
Company,  up to Twenty One Million  Dollars  ($21,000,000.00)  of the  Company's
common stock, no par value (the "Common  Stock").  The shares of Common Stock to
be purchased hereunder are referred to herein as the "Purchase Shares."

         NOW THEREFORE, the Company and the Buyer hereby agree as follows:

         1.       PURCHASE OF COMMON STOCK.

         Subject to the terms and  conditions set forth in this  Agreement,  the
Company has the right to sell to the Buyer,  and the Buyer has the obligation to
purchase from the Company, Purchase Shares as follows:

         (a) Initial  Purchases;  Commencement  of Base and Block  Purchases  of
Common Stock. Within one Business Day after the execution of this Agreement, the
Buyer shall purchase from the Company  3,333,332  Purchase  Shares and 3,333,332
common stock  purchase  warrants (the  "Warrants" and the shares of Common Stock
underlying  such  Warrants,  the  "Warrant  Shares")  in the form of  Exhibit  F
attached  hereto (one warrant  certificate  for 1,666,666  shares at an exercise
price of $0.50 per share and one warrant  certificate for 1,666,666 shares at an
exercise price of $0.75 per share) and upon receipt of such Purchase  Shares and
Warrants pay to the Company as the purchase price  therefor,  via wire transfer,
One Million Dollars  ($1,000,000.00)  (such purchase the "Initial  Purchase" and
such  Purchase  Shares are  referred to herein as "Initial  Purchase  Shares and
together  with the  Commitment  Shares as defined in Section  4(e)  hereof,  are
referred to herein as the "Initial Shares").  Upon issuance and payment therefor
as provided  herein,  such 3,333,332  Initial  Purchase Shares shall be, validly
issued and are fully paid and  nonassessable.  The Initial Purchase Shares shall
be issued in certificated form and (subject to Section 5 hereof) shall bear only
the  restrictive  legend  set forth in  Section  4(e)  hereof.  Thereafter,  the
purchase  and sale of Purchase  Shares  hereunder  shall occur from time to time
upon written  notices by the Company to the Buyer on the terms and conditions as
set  forth  herein   following  the   satisfaction   of  the   conditions   (the
"Commencement") as set forth in Sections 6 and 7 below (the date of satisfaction
of such conditions, the "Commencement Date").

         (b) The Company's Right to Require Purchases.  Any time on or after the
Commencement  Date,  the Company shall have the right but not the  obligation to
direct the Buyer by its delivery to the Buyer of Base Purchase Notices from time
to time to buy Purchase  Shares (each such  purchase a "Base  Purchase")  in any
amount up to Eighty Thousand Dollars  ($80,000.00) per Base Purchase Notice (the
"Base Purchase  Amount") at the Purchase Price on the Purchase Date. The Company
may deliver  multiple Base Purchase Notices to the Buyer so long as at least two
(2) Business Days have passed since the most recent Base Purchase was completed.
Notwithstanding  the forgoing,  any time on or after the Commencement  Date, the
Company shall also have the right but not the  obligation by its delivery to the
Buyer of Block  Purchase  Notices  from time to time to direct  the Buyer to buy

<PAGE>

Purchase Shares (each such purchase a "Block  Purchase") in any amount up to One
Million Dollars  ($1,000,000.00) per Block Purchase Notice at the Block Purchase
Price on the Purchase Date as provided herein. For a Block Purchase Notice to be
valid the following  conditions must be met: (1) the Block Purchase Amount shall
not exceed Two Hundred Thousand Dollars ($200,000.00) per Block Purchase Notice,
(2) the Company must deliver the Purchase Shares before 11:00 a.m.  eastern time
on the  Purchase  Date and (3) the Sale  Price of the  Common  Stock must not be
below  $0.30   (subject  to  equitable   adjustment   for  any   reorganization,
recapitalization,  non-cash dividend,  stock split or other similar transaction)
during the Purchase Date, the date of the delivery of the Block Purchase  Notice
and during the Business Day prior to the delivery of the Block Purchase  Notice.
The Block  Purchase  Amount  may be  increased  to up to Four  Hundred  Thousand
Dollars  ($400,000.00) per Block Purchase Notice if the Sale Price of the Common
Stock  is  not  below  $0.50   (subject   to   equitable   adjustment   for  any
reorganization,  recapitalization,  non-cash  dividend,  stock  split  or  other
similar  transaction)  during the Purchase Date, the date of the delivery of the
Block  Purchase  Notice and during the Business Day prior to the delivery of the
Block Purchase  Notice.  The Block Purchase Amount may be increased to up to Six
Hundred  Thousand  Dollars  ($600,000.00)  per Block Purchase Notice if the Sale
Price of the Common Stock is not below $0.80  (subject to  equitable  adjustment
for any  reorganization,  recapitalization,  non-cash  dividend,  stock split or
other similar transaction) during the Purchase Date, the date of the delivery of
the Block  Purchase  Notice and during the Business Day prior to the delivery of
the Block Purchase  Notice.  The Block Purchase Amount may be increased to up to
One Million Dollars  ($1,000,000.00) per Block Purchase Notice if the Sale Price
of the Common Stock is not below $1.25 (subject to equitable  adjustment for any
reorganization,  recapitalization,  non-cash  dividend,  stock  split  or  other
similar  transaction)  during the Purchase Date, the date of the delivery of the
Block  Purchase  Notice and during the Business Day prior to the delivery of the
Block Purchase  Notice.  As used herein,  the term "Block  Purchase Price" shall
mean the lesser of (i) the lowest Sale Price of the Common Stock on the Purchase
Date or (ii) the lowest  Purchase  Price during the  previous ten (10)  Business
Days prior to the date that the valid Block Purchase  Notice was received by the
Buyer.  However,  if at any  time  during  the  Purchase  Date,  the date of the
delivery of the Block  Purchase  Notice or during the  Business Day prior to the
delivery of the Block  Purchase  Notice,  the Sale Price of the Common  Stock is
below the applicable Block Purchase  threshold price,  such Block Purchase shall
be void and the Buyer's  obligations  to buy Purchase  Shares in respect of that
Block Purchase Notice shall be terminated.  Thereafter,  the Company shall again
have the right to submit a Block Purchase Notice as set forth herein by delivery
of a new Block  Purchase  Notice  only if the Sale Price of the Common  Stock is
above the  applicable  Block  Purchase  threshold  price  during the date of the
delivery of the Block  Purchase  Notice and during the Business Day prior to the
delivery of the Block Purchase  Notice.  The Company may deliver  multiple Block
Purchase  Notices  to the Buyer so long as at least two (2)  Business  Days have
passed since the most recent Block Purchase was completed.

         (c) Payment for Purchase Shares.  The Buyer shall pay to the Company an
amount equal to the Purchase Amount with respect to such Purchase Shares as full
payment for such  Purchase  Shares via wire  transfer of  immediately  available
funds on the same Business Day that the Buyer  receives such Purchase  Shares if
they are received by the Buyer before 11:00 a.m.  eastern time or if received by
the Buyer after 11:00 a.m.  eastern  time,  the next  Business  Day. The Company
shall not issue any  fraction of a share of Common Stock upon any  purchase.  If
the  issuance  would  result in the  issuance of a fraction of a share of Common
Stock,  the Company  shall round such  fraction of a share of Common Stock up or
down to the nearest whole share. All payments made under this Agreement shall be
made in  lawful  money of the  United  States of  America  or wire  transfer  of
immediately available funds to such account as the Company may from time to time
designate by written notice in accordance with the provisions of this Agreement.
Whenever any amount expressed to be due by the terms of this Agreement is due on
any day that is not a Business  Day,  the same shall  instead be due on the next
succeeding day that is a Business Day.

                                       2
<PAGE>

         (d) Purchase  Price  Floor.  The Company and the Buyer shall not effect
any sales under this Agreement on any Purchase Date where the Purchase Price for
any  purchases of Purchase  Shares  would be less than the Floor  Price.  "Floor
Price"   means   $0.20,   which  shall  be   appropriately   adjusted   for  any
reorganization,  recapitalization,  non-cash  dividend,  stock  split  or  other
similar transaction.

         (e) Records of Purchases. The Buyer and the Company shall each maintain
records  showing the remaining  Available  Amount at any give time and the dates
and  Purchase  Amounts  for each  purchase  or  shall  use  such  other  method,
reasonably satisfactory to the Buyer and the Company.

         (f) Taxes. The Company shall pay any and all transfer, stamp or similar
taxes that may be payable  with  respect to the  issuance  and  delivery  of any
shares of Common Stock to the Buyer made under this Agreement.

         2.       BUYER'S REPRESENTATIONS AND WARRANTIES.

         The Buyer  represents  and  warrants to the Company that as of the date
hereof and as of the Commencement Date:

         (a) Investment  Purpose.  The Buyer is entering into this Agreement and
acquiring the  Securities  (the Purchase  Shares,  the  Commitment  Shares,  the
Warrant  and the  Warrant  Shares  are  collectively  referred  to herein as the
"Securities"),  for its own  account  for  investment  only  and not with a view
towards,  or for resale in  connection  with,  the public  sale or  distribution
thereof;  provided however, by making the representations herein, the Buyer does
not agree to hold any of the  Securities  for any minimum or other specific term
other than as set forth in Section 4(e) with respect to the Commitment Shares.

         (b) Accredited  Investor Status. The  Buyer is an "accredited investor"
as that term is defined in Rule 501(a)(3) of Regulation D.

         (c) Reliance on Exemptions.  The Buyer  understands that the Securities
are being  offered and sold to it in reliance  on specific  exemptions  from the
registration requirements of United States federal and state securities laws and
that the  Company  is relying  in part upon the truth and  accuracy  of, and the
Buyer's   compliance   with,  the   representations,   warranties,   agreements,
acknowledgments  and  understandings  of the Buyer set forth  herein in order to
determine the  availability  of such exemptions and the eligibility of the Buyer
to acquire the Securities.

         (d)  Information.  The  Buyer  has been  furnished  with all  materials
relating to the business,  finances and  operations of the Company and materials
relating  to the offer  and sale of the  Securities  that  have been  reasonably
requested by the Buyer,  including,  without  limitation,  the SEC Documents (as
defined in Section 3(f) hereof).  The Buyer  understands  that its investment in
the Securities involves a high degree of risk. The Buyer (i) is able to bear the
economic risk of an investment in the  Securities  including a total loss,  (ii)
has such knowledge and  experience in financial and business  matters that it is
capable of  evaluating  the merits and risks of the proposed  investment  in the
Securities  and (iii) has had an  opportunity  to ask  questions  of and receive
answers from the officers of the Company concerning the financial  condition and
business of the  Company  and others  matters  related to an  investment  in the
Securities.  Neither such  inquiries nor any other due diligence  investigations
conducted by the Buyer or its representatives  shall modify, amend or affect the
Buyer's right to rely on the Company's  representations and warranties contained

                                       3
<PAGE>

in Section 3 below. The Buyer has sought such  accounting,  legal and tax advice
as it has  considered  necessary to make an informed  investment  decision  with
respect to its acquisition of the Securities.

         (e) No Governmental Review. The Buyer understands that no United States
federal  or state  agency or any other  government  or  governmental  agency has
passed on or made any  recommendation  or  endorsement  of the Securities or the
fairness  or  suitability  of the  investment  in the  Securities  nor have such
authorities  passed  upon  or  endorsed  the  merits  of  the  offering  of  the
Securities.

         (f) Transfer or Sale. The Buyer  understands that except as provided in
the Registration  Rights Agreement (as defined in Section 4(a) hereof):  (i) the
Securities have not been and are not being  registered under the 1933 Act or any
state  securities  laws,  and may not be offered  for sale,  sold,  assigned  or
transferred  unless (A) subsequently  registered  thereunder or (B) an exemption
exists  permitting such Securities to be sold,  assigned or transferred  without
such registration;  (ii) any sale of the Securities made in reliance on Rule 144
may be made only in accordance  with the terms of Rule 144 and further,  if Rule
144 is not applicable, any resale of the Securities under circumstances in which
the seller (or the person  through whom the sale is made) may be deemed to be an
underwriter  (as that term is  defined in the 1933 Act) may  require  compliance
with some other exemption under the 1933 Act or the rules and regulations of the
SEC thereunder;  and (iii) neither the Company nor any other person is under any
obligation to register the Securities under the 1933 Act or any state securities
laws or to comply with the terms and conditions of any exemption thereunder.

         (g)  Validity;  Enforcement.  This  Agreement has been duly and validly
authorized,  executed  and  delivered  on behalf of the Buyer and is a valid and
binding agreement of the Buyer enforceable  against the Buyer in accordance with
its terms,  subject as to enforceability to general  principles of equity and to
applicable bankruptcy, insolvency,  reorganization,  moratorium, liquidation and
other  similar laws  relating to, or affecting  generally,  the  enforcement  of
applicable creditors' rights and remedies.

         (h)      Residency.  The Buyer is a resident of the State of Illinois.

         (i) No Prior Short  Selling.  The Buyer  represents and warrants to the
Company  that at no time  prior  to the  date of this  Agreement  has any of the
Buyer, its agents,  representatives or affiliates engaged in or effected, in any
manner whatsoever, directly or indirectly, any (i) "short sale" (as such term is
defined in Section  242.200 of Regulation SHO of the Securities  Exchange Act of
1934,  as  amended  (the  "1934  Act"))  of the  Common  Stock  or (ii)  hedging
transaction,  which  establishes a net short position with respect to the Common
Stock.

         3.       REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

         The Company  represents  and  warrants to the Buyer that as of the date
hereof and as of the Commencement Date:

         (a) Organization and Qualification.  The Company and its "Subsidiaries"
(which for  purposes of this  Agreement  means any entity in which the  Company,
directly or indirectly, owns 50% or more of the voting stock or capital stock or
other similar  equity  interests)  are  corporations  duly organized and validly
existing in good standing under the laws of the  jurisdiction  in which they are
incorporated,  and have the requisite corporate power and authority to own their
properties  and to carry on their business as now being  conducted.  Each of the
Company and its  Subsidiaries  is duly qualified as a foreign  corporation to do
business and is in good standing in every jurisdiction in which its ownership of
property or the nature of the business  conducted by it makes such qualification
necessary,  except to the extent  that the failure to be so  qualified  or be in
good  standing  could not  reasonably  be  expected  to have a Material  Adverse

                                       4
<PAGE>

Effect. As used in this Agreement,  "Material Adverse Effect" means any material
adverse  effect on any of: (i) the  business,  properties,  assets,  operations,
results  of   operations   or  financial   condition  of  the  Company  and  its
Subsidiaries,  if any, taken as a whole, or (ii) the authority or ability of the
Company to perform its obligations  under the Transaction  Documents (as defined
in Section 3(b) hereof).  The Company has no Subsidiaries except as set forth on
Schedule 3(a).

         (b)  Authorization;  Enforcement;  Validity.  (i) The  Company  has the
requisite   corporate  power  and  authority  to  enter  into  and  perform  its
obligations  under  this  Agreement,  the  Registration  Rights  Agreement,  the
Warrants  and each of the other  agreements  entered  into by the parties on the
Commencement   Date  and   attached   hereto  as  exhibits  to  this   Agreement
(collectively,  the  "Transaction  Documents"),  and to issue the  Securities in
accordance with the terms hereof and thereof, (ii) the execution and delivery of
the  Transaction  Documents  by the  Company and the  consummation  by it of the
transactions contemplated hereby and thereby,  including without limitation, the
issuance of the Initial Shares and the Warrants and the reservation for issuance
and the issuance of additional  Purchase  Shares  issuable under this Agreement,
have been duly  authorized  by the  Company's  Board of Directors and no further
consent or authorization  is required by the Company,  its Board of Directors or
its  shareholders,  (iii) this  Agreement has been,  and each other  Transaction
Document shall be on the  Commencement  Date, duly executed and delivered by the
Company and (iv) this Agreement constitutes, and each other Transaction Document
upon its  execution on behalf of the Company,  shall  constitute,  the valid and
binding obligations of the Company enforceable against the Company in accordance
with  their  terms,  except as such  enforceability  may be  limited  by general
principles  of  equity or  applicable  bankruptcy,  insolvency,  reorganization,
moratorium, liquidation or similar laws relating to, or affecting generally, the
enforcement  of creditors'  rights and  remedies.  The Board of Directors of the
Company has approved the resolutions (the "Signing  Resolutions")  substantially
in the form as set  forth as  Exhibit  C-1  attached  hereto to  authorize  this
Agreement and the transactions  contemplated hereby. The Signing Resolutions are
valid,  in full force and effect and have not been modified or  supplemented  in
any respect  other than by the  resolutions  set forth in Exhibit  C-2  attached
hereto regarding the registration statement referred to in Section 4 hereof. The
Company  has  delivered  to the  Buyer a true and  correct  copy of a  unanimous
written consent adopting the Signing Resolutions  executed by all of the members
of the Board of Directors of the Company.  No other approvals or consents of the
Company's Board of Directors  and/or  shareholders is necessary under applicable
laws and the Company's  Certificate of Incorporation  and/or Bylaws to authorize
the  execution  and  delivery  of  this  Agreement  or any  of the  transactions
contemplated hereby,  including, but not limited to, the issuance of the Initial
Shares and the issuance of any additional Purchase Shares.

         (c)  Capitalization.  The  authorized  capital  stock  of  the  Company
consists of: 500,000,000 shares of Common Stock, of which as of the date hereof,
157,919,856  shares are issued and outstanding,  20,000,000  shares are reserved
for  issuance  pursuant to the  Company's  2007 stock option plans of which only
approximately   15,500,000   shares  remain  available  for  future  grants  and
15,362,000  shares are issuable and reserved for issuance pursuant to securities
(other than stock options issued  pursuant to the Company's  stock option plans)
exercisable or exchangeable for, or convertible into, shares of Common Stock and
(ii) 50,000,000  shares of Preferred Stock,  $0.01 par value, of which as of the
date hereof no shares are issued and outstanding and no other Preferred Stock is
outstanding. All of such outstanding shares have been, or upon issuance will be,
validly  issued and are fully paid and  nonassessable.  Except as  disclosed  in
Schedule  3(c),  (i) no shares of the  Company's  capital  stock are  subject to
preemptive  rights or any  other  similar  rights  or any liens or  encumbrances
suffered  or  permitted  by the  Company,  (ii)  there are no  outstanding  debt
securities,  (iii) there are no outstanding options,  warrants, scrip, rights to
subscribe to, calls or commitments of any character  whatsoever  relating to, or
securities  or rights  convertible  into,  any  shares of  capital  stock of the
Company or any of its Subsidiaries, or contracts, commitments, understandings or

                                       5
<PAGE>

arrangements  by which the Company or any of its  Subsidiaries  is or may become
bound to issue  additional  shares of capital stock of the Company or any of its
Subsidiaries  or options,  warrants,  scrip,  rights to  subscribe  to, calls or
commitments  of any  character  whatsoever  relating to, or securities or rights
convertible  into,  any  shares of  capital  stock of the  Company or any of its
Subsidiaries,  (iv) there are no  agreements  or  arrangements  under  which the
Company or any of its  Subsidiaries  is obligated to register the sale of any of
their securities  under the 1933 Act (except the  Registration  Rights Agreement
and  except  for  agreements  disclosed  in  Schedule  3 (c)),  (v) there are no
outstanding  securities or instruments of the Company or any of its Subsidiaries
which contain any redemption or similar provisions,  and there are no contracts,
commitments,  understandings  or arrangements by which the Company or any of its
Subsidiaries  is or may become  bound to redeem a security of the Company or any
of its  Subsidiaries,  (vi) there are no  securities or  instruments  containing
anti-dilution  or similar  provisions  that will be triggered by the issuance of
the  Securities  as described in this  Agreement  and (vii) the Company does not
have any stock appreciation rights or "phantom stock" plans or agreements or any
similar  plan or  agreement.  The  Company has  furnished  to the Buyer true and
correct copies of the Company's Certificate of Incorporation,  as amended and as
in effect on the date  hereof  (the  "Certificate  of  Incorporation"),  and the
Company's  By-laws,  as  amended  and as in  effect  on  the  date  hereof  (the
"By-laws"),  and summaries of the terms of all  securities  convertible  into or
exercisable for Common Stock, if any, and copies of any documents containing the
material rights of the holders thereof in respect thereto.

         (d) Issuance of Securities. The 6,833,332 Initial Shares have been duly
authorized and, upon issuance in accordance  with the terms hereof,  the Initial
Shares shall be (i) validly issued,  fully paid and non-assessable and (ii) free
from all taxes, liens and charges with respect to the issue thereof.  20,000,000
shares of Common Stock have been duly  authorized and reserved for issuance upon
purchase under this Agreement after the Commencement.  Upon issuance and payment
therefor in  accordance  with the terms and  conditions of this  Agreement,  the
Purchase Shares shall be validly issued,  fully paid and  nonassessable and free
from all taxes,  liens and charges with respect to the issue  thereof,  with the
holders being entitled to all rights accorded to a holder of Common Stock.  Upon
issuance and payment therefor in accordance with the terms and conditions of the
Warrants,   the  Warrant  Shares  shall  be  validly  issued,   fully  paid  and
nonassessable  and free from all taxes,  liens and charges  with  respect to the
issue  thereof,  with the holders  being  entitled  to all rights  accorded to a
holder  of  Common  Stock.  3,333,332  shares  of  Common  Stock  have been duly
authorized and reserved for issuance upon exercise of the Warrants.

         (e) No Conflicts.  Except as disclosed in Schedule 3(e), the execution,
delivery and  performance  of the  Transaction  Documents by the Company and the
consummation by the Company of the transactions  contemplated hereby and thereby
(including, without limitation, the reservation for issuance and issuance of the
Purchase  Shares)  will not (i)  result in a  violation  of the  Certificate  of
Incorporation,  if applicable, any Certificate of Designations,  Preferences and
Rights  of any  outstanding  series of  preferred  stock of the  Company  or the
By-laws or (ii)  conflict  with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of  termination,  amendment,  acceleration  or  cancellation  of, any
agreement,  indenture  or  instrument  to  which  the  Company  or  any  of  its
Subsidiaries is a party, or result in a violation of any law, rule,  regulation,
order,  judgment  or decree  (including  federal and state  securities  laws and
regulations and the rules and regulations of the Principal Market  applicable to
the Company or any of its Subsidiaries) or by which any property or asset of the
Company or any of its  Subsidiaries is bound or affected,  except in the case of
conflicts, defaults, terminations, amendments, accelerations,  cancellations and
violations  under clause (ii),  which could not reasonably be expected to result
in a Material Adverse Effect.  Except as disclosed in Schedule 3(e), neither the
Company nor its  Subsidiaries is in violation of any term of or in default under
its Certificate of Incorporation, if applicable, any Certificate of Designation,
Preferences  and  Rights of any  outstanding  series of  preferred  stock of the
Company or By-laws or their  organizational  charter or  by-laws,  respectively.
Except as  disclosed  in  Schedule  3(e),  neither  the  Company  nor any of its
Subsidiaries  is in violation of any term of or is in default under any material
contract, agreement, mortgage,  indebtedness,  indenture,  instrument, judgment,
decree or order or any statute,  rule or regulation applicable to the Company or

                                       6
<PAGE>

its  Subsidiaries,  except for possible  conflicts,  defaults,  terminations  or
amendments  which could not  reasonably  be expected to have a Material  Adverse
Effect. The business of the Company and its Subsidiaries is not being conducted,
and shall not be conducted,  in violation of any law,  ordinance,  regulation of
any governmental entity, except for possible violations, the sanctions for which
either individually or in the aggregate could not reasonably be expected to have
a Material Adverse Effect. Except as specifically contemplated by this Agreement
and as required  under the 1933 Act or applicable  state  securities  laws,  the
Company is not  required to obtain any  consent,  authorization  or order of, or
make any filing or registration  with, any court or  governmental  agency or any
regulatory  or  self-regulatory  agency in order for it to  execute,  deliver or
perform  any  of its  obligations  under  or  contemplated  by  the  Transaction
Documents in accordance with the terms hereof or thereof. Except as disclosed in
Schedule 3(e), all consents,  authorizations,  orders, filings and registrations
which the Company is required to obtain pursuant to the preceding sentence shall
be obtained or effected on or prior to the Commencement  Date.  Except as listed
in Schedule  3(e),  since  January 1, 2006,  the Company  has not  received  nor
delivered any notices or  correspondence  from or to the Principal  Market.  The
Principal  Market  has not  commenced  any  delisting  proceedings  against  the
Company.

         (f)  SEC  Documents;  Financial  Statements.  Except  as  disclosed  in
Schedule 3(f),  since January 1, 2006, the Company has timely filed all reports,
schedules, forms, statements and other documents required to be filed by it with
the SEC  pursuant  to the  reporting  requirements  of the  1934 Act (all of the
foregoing filed prior to the date hereof and all exhibits  included  therein and
financial  statements  and  schedules  thereto  and  documents  incorporated  by
reference therein being hereinafter  referred to as the "SEC Documents").  As of
their  respective  dates (except as they have been correctly  amended),  the SEC
Documents  complied in all material  respects with the  requirements of the 1934
Act and the rules and regulations of the SEC promulgated  thereunder  applicable
to the SEC Documents, and none of the SEC Documents, at the time they were filed
with the SEC  (except as they may have been  properly  amended),  contained  any
untrue statement of a material fact or omitted to state a material fact required
to be stated  therein or necessary in order to make the statements  therein,  in
light of the  circumstances  under which they were made, not  misleading.  As of
their  respective  dates  (except  as they  have  been  properly  amended),  the
financial statements of the Company included in the SEC Documents complied as to
form in all material  respects with applicable  accounting  requirements and the
published rules and regulations of the SEC with respect thereto.  Such financial
statements have been prepared in accordance with generally  accepted  accounting
principles, consistently applied, during the periods involved (except (i) as may
be otherwise indicated in such financial statements or the notes thereto or (ii)
in the case of  unaudited  interim  statements,  to the extent  they may exclude
footnotes or may be condensed or summary  statements)  and fairly present in all
material respects the financial  position of the Company as of the dates thereof
and the  results of its  operations  and cash flows for the  periods  then ended
(subject,  in the  case  of  unaudited  statements,  to  normal  year-end  audit
adjustments).  Except as listed in Schedule  3(f),  the Company has  received no
notices or  correspondence  from the SEC since January 1, 2006.  The SEC has not
commenced  any  enforcement  proceedings  against  the  Company  or  any  of its
subsidiaries.

         (g) Absence of Certain  Changes.  Except as disclosed in Schedule 3(g),
since June 30, 2007,  there has been no material adverse change in the business,
properties,  operations,  financial  condition or results of  operations  of the
Company or its  Subsidiaries.  The Company has not taken any steps, and does not
currently  expect  to  take  any  steps,  to  seek  protection  pursuant  to any

                                       7
<PAGE>

Bankruptcy  Law  nor  does  the  Company  or any of its  Subsidiaries  have  any
knowledge or reason to believe that its creditors intend to initiate involuntary
bankruptcy or insolvency proceedings.

         (h)  Absence  of  Litigation.  There is no  action,  suit,  proceeding,
inquiry  or  investigation  before or by any  court,  public  board,  government
agency, self-regulatory organization or body pending or, to the knowledge of the
Company or any of its Subsidiaries, threatened against or affecting the Company,
the Common Stock or any of the Company's Subsidiaries or any of the Company's or
the Company's  Subsidiaries'  officers or directors in their capacities as such,
which  could  reasonably  be  expected  to have a  Material  Adverse  Effect.  A
description of each action, suit, proceeding, inquiry or investigation before or
by any court, public board, government agency,  self-regulatory  organization or
body  which,  as of the date of this  Agreement,  is  pending or  threatened  in
writing  against  or  affecting  the  Company,  the  Common  Stock or any of the
Company's  Subsidiaries  or any of the Company's or the Company's  Subsidiaries'
officers or  directors  in their  capacities  as such,  is set forth in Schedule
3(h).

         (i) Acknowledgment  Regarding Buyer's Status. The Company  acknowledges
and  agrees  that the Buyer is acting  solely in the  capacity  of arm's  length
purchaser  with  respect  to the  Transaction  Documents  and  the  transactions
contemplated hereby and thereby. The Company further acknowledges that the Buyer
is not acting as a  financial  advisor or  fiduciary  of the  Company (or in any
similar capacity) with respect to the Transaction Documents and the transactions
contemplated  hereby and thereby and any advice given by the Buyer or any of its
representatives  or agents in connection with the Transaction  Documents and the
transactions contemplated hereby and thereby is merely incidental to the Buyer's
purchase of the Securities. The Company further represents to the Buyer that the
Company's decision to enter into the Transaction Documents has been based solely
on the  independent  evaluation  by the  Company  and  its  representatives  and
advisors.

         (j) No  General  Solicitation.  Neither  the  Company,  nor  any of its
affiliates,  nor any person  acting on its or their  behalf,  has engaged in any
form of general  solicitation  or general  advertising  (within  the  meaning of
Regulation  D under  the 1933 Act) in  connection  with the offer or sale of the
Securities.

          (k) Intellectual Property Rights. The Company and its Subsidiaries own
or possess  adequate  rights or licenses to use all material  trademarks,  trade
names, service marks, service mark registrations, service names, patents, patent
rights,    copyrights,    inventions,    licenses,    approvals,    governmental
authorizations,  trade secrets and rights  necessary to conduct their respective
businesses as now conducted.  Except as set forth on Schedule 3(k),  none of the
Company's  material  trademarks,   trade  names,  service  marks,  service  mark
registrations,  service names, patents, patent rights,  copyrights,  inventions,
licenses,   approvals,   government  authorizations,   trade  secrets  or  other
intellectual  property  rights have expired or terminated,  or, by the terms and
conditions thereof,  could expire or terminate within two years from the date of
this  Agreement.  The Company and its  Subsidiaries do not have any knowledge of
any infringement by the Company or its  Subsidiaries of any material  trademark,
trade name rights, patents,  patent rights,  copyrights,  inventions,  licenses,
service names, service marks, service mark registrations,  trade secret or other
similar  rights of others,  or of any such  development  of similar or identical
trade  secrets or technical  information  by others and,  except as set forth on
Schedule  3(k),  there is no claim,  action or proceeding  being made or brought
against, or to the Company's knowledge, being threatened against, the Company or
its  Subsidiaries  regarding  trademark,  trade name,  patents,  patent  rights,
invention,  copyright,  license,  service  names,  service  marks,  service mark
registrations,  trade secret or other  infringement,  which could  reasonably be
expected to have a Material Adverse Effect.

         (l)  Environmental  Laws. The Company and its  Subsidiaries  (i) are in
compliance with any and all applicable  foreign,  federal,  state and local laws
and  regulations  relating to the  protection  of human  health and safety,  the
environment  or  hazardous  or  toxic   substances  or  wastes,   pollutants  or
contaminants ("Environmental Laws"), (ii) have received all permits, licenses or

                                       8
<PAGE>

other approvals required of them under applicable  Environmental Laws to conduct
their  respective  businesses  and  (iii) are in  compliance  with all terms and
conditions of any such permit, license or approval, except where, in each of the
three  foregoing  clauses,  the  failure to so comply  could not  reasonably  be
expected to have, individually or in the aggregate, a Material Adverse Effect.

         (m) Title.  The Company and its  Subsidiaries  have good and marketable
title in fee simple to all real  property and good and  marketable  title to all
personal property owned by them which is material to the business of the Company
and its Subsidiaries, in each case free and clear of all liens, encumbrances and
defects  except  such  as are  described  in  Schedule  3(m)  or  such as do not
materially  affect the value of such property and do not interfere  with the use
made and  proposed  to be made of such  property  by the  Company and any of its
Subsidiaries.  Any real property and facilities  held under lease by the Company
and any of its  Subsidiaries  are  held  by them  under  valid,  subsisting  and
enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such  property and buildings by the
Company and its Subsidiaries.

         (n) Insurance.  The Company and each of its Subsidiaries are insured by
insurers of recognized  financial  responsibility  against such losses and risks
and in such  amounts as  management  of the  Company  believes to be prudent and
customary  in the  businesses  in which the  Company  and its  Subsidiaries  are
engaged.  Neither  the  Company  nor any such  Subsidiary  has been  refused any
insurance  coverage  sought or applied  for and neither the Company nor any such
Subsidiary  has any  reason  to  believe  that it will not be able to renew  its
existing  insurance  coverage  as and when such  coverage  expires  or to obtain
similar  coverage  from  similar  insurers as may be  necessary  to continue its
business at a cost that would not materially and adversely affect the condition,
financial or otherwise,  or the earnings,  business or operations of the Company
and its Subsidiaries, taken as a whole.

         (o) Regulatory  Permits.  The Company and its Subsidiaries  possess all
material  certificates,  authorizations  and permits  issued by the  appropriate
federal,  state or foreign  regulatory  authorities  necessary to conduct  their
respective  businesses,  and neither the  Company  nor any such  Subsidiary  has
received any notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit.

         (p) Tax Status.  The Company and each of its  Subsidiaries  has made or
filed all federal and state income and all other  material tax returns,  reports
and declarations required by any jurisdiction to which it is subject (unless and
only to the extent that the Company and each of its  Subsidiaries  has set aside
on its books  provisions  reasonably  adequate for the payment of all unpaid and
unreported taxes) and has paid all taxes and other governmental  assessments and
charges  that are  material  in amount,  shown or  determined  to be due on such
returns,  reports and  declarations,  except those being contested in good faith
and has set aside on its books provision  reasonably adequate for the payment of
all taxes for periods  subsequent to the periods to which such returns,  reports
or declarations  apply. There are no unpaid taxes in any material amount claimed
to be due by the taxing authority of any  jurisdiction,  and the officers of the
Company know of no basis for any such claim.

         (q) Transactions With Affiliates.  Except as set forth on Schedule 3(q)
and other than the grant or  exercise  of stock  options  disclosed  on Schedule
3(c), none of the officers,  directors, or employees of the Company is presently
a party to any transaction  with the Company or any of its  Subsidiaries  (other
than for services as employees, officers and directors), including any contract,
agreement or other  arrangement  providing for the  furnishing of services to or
by,  providing for rental of real or personal  property to or from, or otherwise
requiring payments to or from any officer,  director or such employee or, to the

                                       9
<PAGE>

knowledge of the Company, any corporation, partnership, trust or other entity in
which any  officer,  director,  or any such  employee  has an  interest or is an
officer, director, trustee or partner.

         (r) Application of Takeover  Protections.  The Company and its board of
directors have taken or will take prior to the  Commencement  Date all necessary
action, if any, in order to render  inapplicable any control share  acquisition,
business  combination,  poison pill (including any  distribution  under a rights
agreement) or other similar  anti-takeover  provision  under the  Certificate of
Incorporation  or the laws of the state of its  incorporation  which is or could
become  applicable to the Buyer as a result of the transactions  contemplated by
this Agreement,  including,  without  limitation,  the Company's issuance of the
Securities and the Buyer's ownership of the Securities.

         (s) Foreign  Corrupt  Practices.  Neither the  Company,  nor any of its
Subsidiaries,  nor any director, officer, agent, employee or other person acting
on behalf of the  Company or any of its  Subsidiaries  has, in the course of its
actions  for, or on behalf of, the  Company,  used any  corporate  funds for any
unlawful contribution,  gift,  entertainment or other unlawful expenses relating
to  political  activity;  made any direct or  indirect  unlawful  payment to any
foreign or  domestic  government  official  or employee  from  corporate  funds;
violated  or is in  violation  of any  provision  of the  U.S.  Foreign  Corrupt
Practices Act of 1977, as amended; or made any unlawful bribe,  rebate,  payoff,
influence payment, kickback or other unlawful payment to any foreign or domestic
government official or employee.

         4.       COVENANTS.

         (a)  Filing  of Form 8-K and  Registration  Statement.  Subject  to the
Buyer's  prior  approval,  the  Company  agrees  that it shall,  within the time
required under the 1934 Act file a Report on Form 8-K disclosing  this Agreement
and the  transaction  contemplated  hereby.  The Company  shall also file within
forty-five (45) days (the "Filing Date") from the date hereof a new registration
statement  covering the sale of the 6,833,332  Initial  Shares and an additional
20,000,000 Purchase Shares (which does not include the 6,833,332 Initial Shares)
in accordance with the terms of the Registration  Rights  Agreement  between the
Company  and the  Buyer,  dated  as of the  date  hereof  ("Registration  Rights
Agreement").

         (b) Blue Sky.  The  Company  shall  take  such  action,  if any,  as is
reasonably  necessary in order to obtain an exemption  for or to qualify (i) the
sales of any Purchase  Shares or the Warrants to the Buyer under this  Agreement
and (ii) any  subsequent  sales of any Purchase  Shares or Warrant Shares by the
Buyer,  in each  case,  under  applicable  securities  or "Blue Sky" laws of the
states of the United  States in such states as is  reasonably  requested  by the
Buyer from time to time, and shall provide  evidence of any such action so taken
to the Buyer.

         (c) Listing.  The Company shall  promptly  secure the listing of all of
the  Purchase  Shares  and the  Warrant  Shares  upon each  national  securities
exchange and  automated  quotation  system,  if any, upon which shares of Common
Stock  are then  listed  (subject  to  official  notice of  issuance)  and shall
maintain,  so long as any other shares of Common Stock shall be so listed,  such
listing of all such securities from time to time issuable under the terms of the
Transaction   Documents.   The  Company  shall   maintain  the  Common   Stock's
authorization for quotation on the Principal Market. Neither the Company nor any
of its Subsidiaries  shall take any action that would be reasonably  expected to
result in the  delisting  or  suspension  of the Common  Stock on the  Principal
Market.  The Company  shall  promptly,  and in no event later than the following
Business  Day,  provide to the Buyer copies of any notices it receives  from the
Principal  Market  regarding the continued  eligibility  of the Common Stock for
listing on such automated quotation system or securities  exchange.  The Company
shall pay all fees and expenses in connection  with  satisfying its  obligations
under this Section.

                                       10
<PAGE>

         (d)  Limitation  on Short  Sales and  Hedging  Transactions.  The Buyer
agrees that  beginning on the date of this  Agreement  and ending on the date of
termination of this  Agreement as provided in Section  11(k),  the Buyer and its
agents,  representatives and affiliates shall not in any manner whatsoever enter
into or effect,  directly or  indirectly,  any (i) "short sale" (as such term is
defined in  Section  242.200  of  Regulation  SHO of the 1934 Act) of the Common
Stock or (ii) hedging  transaction,  which establishes a net short position with
respect to the Common Stock.

         (e) Issuance of  Commitment  Shares;  Limitation on Sales of Commitment
Shares.  Immediately  upon the  execution of this  Agreement,  the Company shall
issue to the Buyer as  consideration  for the Buyer entering into this Agreement
3,500,000  shares of Common  Stock (the  "Commitment  Shares").  The  Commitment
Shares and the  Initial  Purchase  Shares  (referred  to herein as the  "Initial
Shares") shall be issued in certificated  form and (subject to Section 5 hereof)
shall bear only the following restrictive 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 REGISTRATION STATEMENT FOR THE SECURITIES UNDER
         THE SECURITIES ACT OF 1933, AS AMENDED,  OR APPLICABLE STATE SECURITIES
         LAWS, UNLESS SOLD PURSUANT TO: (1) RULE 144 UNDER THE SECURITIES ACT OF
         1933, AS AMENDED, OR (2) AN OPINION OF HOLDER'S COUNSEL, IN A CUSTOMARY
         FORM,  THAT  REGISTRATION  IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE
         STATE SECURITIES LAWS.

           The Buyer  agrees that the Buyer  shall not pledge,  transfer or sell
the  Commitment  Shares until the earlier of (a) 500  Business  Days (25 Monthly
Periods)  from the date hereof or (b) the date on which this  Agreement has been
terminated,  provided,  however,  that such restrictions shall not apply: (i) in
connection  with any  transfers to or among  affiliates  (as defined in the 1934
Act), (ii) in the event that the Commencement  does not occur on or before March
1, 2008,  due to the failure of the Company to satisfy the  conditions set forth
in Section 7 or (iii) if an Event of Default has  occurred,  or any event which,
after notice and/or lapse of time,  would become an Event of Default,  including
any failure by the Company to timely issue Purchase Shares under this Agreement.
Notwithstanding  the  forgoing,  the Buyer may transfer  Commitment  Shares to a
third  party  in order  to  settle a sale  made by the  Buyer  where  the  Buyer
reasonably  expects the  Company to deliver  additional  Purchase  Shares to the
Buyer under this Agreement so long as the Buyer maintains  ownership of at least
3,500,000  shares overall by "replacing"  such Commitment  Shares so transferred
with new Purchase Shares when the new Purchase Shares are actually issued by the
Company to the Buyer.

         (f) Due Diligence. The Buyer shall have the right, from time to time as
the Buyer may reasonably deem appropriate,  to perform  reasonable due diligence
on the Company during normal  business  hours.  The Company and its officers and
employees shall provide  information and reasonably  cooperate with the Buyer in
connection  with any reasonable  request by the Buyer related to the Buyer's due
diligence of the Company,  including,  but not limited to, any such request made
by the Buyer in  connection  with (i) the filing of the  registration  statement
described  in Section 4(a) hereof and (ii) the  Commencement.  Each party hereto
agrees not to disclose any  Confidential  Information  of the other party to any
third party and shall not use the Confidential Information for any purpose other
than in connection  with, or in furtherance  of, the  transactions  contemplated

                                       11
<PAGE>

hereby. Each party hereto  acknowledges that the Confidential  Information shall
remain the  property of the  disclosing  party and agrees that it shall take all
reasonable  measures  to protect  the  secrecy of any  Confidential  Information
disclosed by the other party.

         5.       TRANSFER AGENT INSTRUCTIONS.

         Immediately  upon the  execution of this  Agreement,  the Company shall
deliver  to the  Transfer  Agent a letter in the form as set forth as  Exhibit E
attached hereto with respect to the issuance of the 6,833,332  Initial Shares to
be issued to the Buyer upon  execution  hereof.  On the  Commencement  Date, the
Company shall cause any restrictive legend on the 6,833,332 Initial Shares to be
removed  and all of the  remaining  Purchase  Shares  to be  issued  under  this
Agreement  shall be issued  without  any  restrictive  legend  unless  the Buyer
expressly consents otherwise.  The Company shall issue irrevocable  instructions
to the Transfer  Agent,  and any subsequent  transfer  agent,  to issue Purchase
Shares  in the name of the  Buyer  for the  Purchase  Shares  (the  "Irrevocable
Transfer  Agent  Instructions").  The  Company  warrants  to the  Buyer  that no
instruction  other than the Irrevocable  Transfer Agent  Instructions  expressly
referred to in this Agreement will be given by the Company to the Transfer Agent
with respect to the Warrant Shares, the Commitment Shares or the Purchase Shares
(including the Initial  Purchase  Shares),  and Warrant  Shares,  the Commitment
Shares and the Purchase Shares  (including the Initial Purchase  Shares),  shall
otherwise be freely  transferable on the books and records of the Company as and
to the extent provided in this Agreement and the  Registration  Rights Agreement
subject to the provisions of Section 4(e) in the case of the Commitment Shares.

         6.       CONDITIONS TO THE COMPANY'S RIGHT TO COMMENCE
                  SALES OF SHARES OF COMMON STOCK UNDER THIS AGREEMENT.

         The right of the Company  hereunder  to commence  sales of the Purchase
Shares is subject to the satisfaction of each of the following  conditions on or
before the Commencement Date (the date that the Company may begin sales):

         (a) The Buyer shall have executed each of the Transaction Documents and
delivered the same to the Company;

         (b) A registration statement covering the sale of all of the Commitment
Shares and Purchase Shares (including the Initial Purchase  Shares),  shall have
been  declared  effective  under the 1933 Act by the SEC and no stop  order with
respect to the registration statement shall be pending or threatened by the SEC.

         7.       CONDITIONS TO THE BUYER'S OBLIGATION TO MAKE
                  PURCHASES OF SHARES OF COMMON STOCK.

         The  obligation  of the Buyer to buy  Purchase  Shares  (other than the
Initial  Purchase Shares) under this Agreement is subject to the satisfaction of
each of the following  conditions on or before the  Commencement  Date (the date
that the Company may begin  sales  other than the Initial  Purchase  Shares) and
once such  conditions  have been  initially  satisfied,  there  shall not be any
ongoing  obligation  to  satisfy  such  conditions  after the  Commencement  has
occurred:

                                       12
<PAGE>

         (a) The Company shall have executed each of the  Transaction  Documents
and delivered the same to the Buyer;

         (b) The Company  shall have issued to the Buyer the Initial  Shares and
shall  have  removed  the  restrictive  transfer  legend  from  the  certificate
representing all the Initial Shares;

         (c) The Common Stock shall be authorized for quotation on the Principal
Market, trading in the Common Stock shall not have been within the last 365 days
suspended by the SEC or the  Principal  Market and the  Purchase  Shares and the
Warrant  Shares  shall be approved  for listing upon the  Principal  Market,  if
applicable;

         (d) The Buyer shall have received the opinions of the  Company's  legal
counsel dated as of the Commencement Date substantially in the form of Exhibit A
attached hereto;

         (e) The representations and warranties of the Company shall be true and
correct  in all  material  respects  (except  to the  extent  that  any of  such
representations and warranties is already qualified as to materiality in Section
3 above, in which case, such  representations  and warranties  shall be true and
correct  without further  qualification)  as of the date when made and as of the
Commencement  Date as though made at that time (except for  representations  and
warranties  that  speak  as of a  specific  date)  and the  Company  shall  have
performed, satisfied and complied with the covenants,  agreements and conditions
required by the  Transaction  Documents to be  performed,  satisfied or complied
with by the Company at or prior to the  Commencement  Date. The Buyer shall have
received a  certificate,  executed by the CEO,  President or CFO of the Company,
dated as of the Commencement  Date, to the foregoing effect in the form attached
hereto as Exhibit B;

         (f)  The  Board  of  Directors  of  the  Company   shall  have  adopted
resolutions  in the form  attached  hereto as  Exhibit C which  shall be in full
force  and  effect  without  any  amendment  or  supplement  thereto  as of  the
Commencement Date;

         (g) As of the Commencement Date, the Company shall have reserved out of
its  authorized and unissued  Common Stock,  solely for the purpose of effecting
future purchases of Purchase Shares hereunder, 20,000,000 shares of Common Stock
not including the Initial Purchase Shares;

         (h) The Irrevocable Transfer Agent Instructions,  in form acceptable to
the Buyer  shall  have been  delivered  to and  acknowledged  in  writing by the
Company and the Company's Transfer Agent;

         (i) The  Company  shall  have  delivered  to the  Buyer  a  certificate
evidencing  the  incorporation  and good standing of the Company in the State of
Colorado  issued by the Secretary of State of the State of Colorado as of a date
within ten (10)  Business  Days of the  Commencement  Date and the Company shall
have  delivered  to the Buyer a  certificate  evidencing  good  standing  of the
Company in the State of California issued by the Secretary of State of the State
of California  as of a date within ten (10)  Business  Days of the  Commencement
Date;

         (j) The Company shall have  delivered to the Buyer a certified  copy of
the Certificate of  Incorporation  as certified by the Secretary of State of the
State of Colorado within ten (10) Business Days of the Commencement Date;

                                       13
<PAGE>

         (k) The  Company  shall  have  delivered  to the  Buyer  a  secretary's
certificate  executed  by  the  Secretary  of  the  Company,  dated  as  of  the
Commencement Date, in the form attached hereto as Exhibit D;

         (l) A registration statement covering the sale of all of the Commitment
Shares and any Purchase Shares shall have been declared effective under the 1933
Act by the SEC and no stop order  with  respect  to the  registration  statement
shall be pending or  threatened  by the SEC. The Company shall have prepared and
delivered  to the  Buyer a final  and  complete  form of  prospectus,  dated and
current as of the Commencement  Date, to be used by the Buyer in connection with
any sales of any Commitment  Shares or any Purchase  Shares,  and to be filed by
the Company one Business Day after the Commencement Date. The Company shall have
made all  filings  under  all  applicable  federal  and  state  securities  laws
necessary to consummate the issuance of the Warrants,  the Commitment Shares and
the Purchase Shares pursuant to this Agreement in compliance with such laws;

         (m) No Event of Default has occurred, or any event which,  after notice
and/or lapse of time, would become an Event of Default has occurred;

         (n) On or prior to the  Commencement  Date,  the Company shall take all
necessary action, if any, and such actions as reasonably requested by the Buyer,
in  order  to  render  inapplicable  any  control  share  acquisition,  business
combination,  shareholder rights plan or poison pill (including any distribution
under a rights  agreement) or other similar  anti-takeover  provision  under the
Certificate of Incorporation or the laws of the state of its incorporation which
is or could  become  applicable  to the  Buyer as a result  of the  transactions
contemplated by this Agreement,  including,  without  limitation,  the Company's
issuance of the Securities and the Buyer's ownership of the Securities; and

         (o) The  Company  shall have  provided  the Buyer with the  information
requested by the Buyer in connection with its due diligence  requests made prior
to, or in connection  with, the  Commencement,  in accordance  with the terms of
Section 4(g) hereof.

         8.       INDEMNIFICATION.

         In  consideration  of  the  Buyer's   execution  and  delivery  of  the
Transaction  Documents and acquiring the Securities hereunder and in addition to
all of the Company's  other  obligations  under the Transaction  Documents,  the
Company shall defend, protect,  indemnify and hold harmless the Buyer and all of
its  affiliates,  shareholders,  officers,  directors,  employees  and direct or
indirect   investors  and  any  of  the  foregoing   person's  agents  or  other
representatives  (including,  without  limitation,  those retained in connection
with  the  transactions  contemplated  by  this  Agreement)  (collectively,  the
"Indemnitees")  from and against any and all actions,  causes of action,  suits,
claims, losses, costs, penalties, fees, liabilities and damages, and expenses in
connection therewith  (irrespective of whether any such Indemnitee is a party to
the  action  for which  indemnification  hereunder  is  sought),  and  including
reasonable  attorneys' fees and disbursements  (the "Indemnified  Liabilities"),
incurred by any Indemnitee as a result of, or arising out of, or relating to (a)
any  misrepresentation  or breach of any  representation or warranty made by the
Company in the  Transaction  Documents or any other  certificate,  instrument or
document  contemplated  hereby  or  thereby,  (b) any  breach  of any  covenant,
agreement or obligation of the Company contained in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby, or
(c) any cause of action,  suit or claim brought or made against such  Indemnitee
and arising out of or resulting  from the  execution,  delivery,  performance or
enforcement of the Transaction Documents or any other certificate, instrument or

                                       14
<PAGE>

document contemplated hereby or thereby,  other than with respect to Indemnified
Liabilities  which  directly and primarily  result from the gross  negligence or
willful  misconduct  of  the  Indemnitee.  To  the  extent  that  the  foregoing
undertaking  by the Company  may be  unenforceable  for any reason,  the Company
shall make the maximum  contribution to the payment and  satisfaction of each of
the Indemnified Liabilities which is permissible under applicable law.

         9.       EVENTS OF DEFAULT.

         An "Event of Default"  shall be deemed to have  occurred at any time as
any of the following events occurs:

         (a) while any  registration  statement  is  required  to be  maintained
effective  pursuant  to the  terms of the  Registration  Rights  Agreement,  the
effectiveness of such registration  statement lapses for any reason  (including,
without limitation, the issuance of a stop order) or is unavailable to the Buyer
for sale of all of the  Registrable  Securities (as defined in the  Registration
Rights  Agreement)  in  accordance  with the  terms of the  Registration  Rights
Agreement,  and such lapse or unavailability  continues for a period of ten (10)
consecutive  Business Days or for more than an aggregate of thirty (30) Business
Days in any 365-day period;

         (b) the suspension  from trading or failure of  the  Common Stock to be
listed on  the Principal  Market for a period  of three (3) consecutive Business
Days;

         (c) the  delisting of the  Company's  Common  Stock from the  Principal
Market,  provided,  however, that the Common Stock is not immediately thereafter
trading on the New York Stock  Exchange,  the Nasdaq Global  Market,  the Nasdaq
Capital Market, or the American Stock Exchange;

         (d) the failure for any reason by the Transfer  Agent to issue Purchase
Shares to the Buyer within five (5) Business Days after the applicable  Purchase
Date which the Buyer is entitled to receive;

         (e) the Company  breaches  any  representation,  warranty,  covenant or
other term or condition under any Transaction Document if such breach could have
a  Material  Adverse  Effect and  except,  in the case of a breach of a covenant
which is reasonably  curable,  only if such breach  continues for a period of at
least five (5) Business Days;

         (f) if any Person commences a proceeding against  the  Company pursuant
to or within the meaning of any Bankruptcy Law;

         (g) if the Company  pursuant to or within the meaning of any Bankruptcy
Law; (A) commences a voluntary  case,  (B) consents to the entry of an order for
relief against it in an involuntary  case, (C) consents to the  appointment of a
Custodian of it or for all or  substantially  all of its  property,  (D) makes a
general assignment for the benefit of its creditors,  (E) becomes insolvent,  or
(F) is generally unable to pay its debts as the same become due; or

         (h) a court of competent  jurisdiction  enters an order or decree under
any  Bankruptcy Law that (A) is for relief against the Company in an involuntary
case, (B) appoints a Custodian of the Company or for all or substantially all of
its property, or (C) orders the liquidation of the Company or any Subsidiary.

In addition  to any other  rights and  remedies  under  applicable  law and this
Agreement, including the Buyer termination rights under Section 11(k) hereof, so
long as an Event of Default  has  occurred  and is  continuing,  or if any event

                                       15
<PAGE>

which, after notice and/or lapse of time, would become an Event of Default,  has
occurred  and is  continuing,  or so long as the  Purchase  Price is  below  the
Purchase Price Floor, the Buyer shall not be obligated to purchase any shares of
Common Stock under this  Agreement.  If pursuant to or within the meaning of any
Bankruptcy Law, the Company commences a voluntary case or any Person commences a
proceeding  against the Company, a Custodian is appointed for the Company or for
all or  substantially  all of its  property,  or the  Company  makes  a  general
assignment for the benefit of its creditors,  (any of which would be an Event of
Default as described  in Sections  9(f),  9(g) and 9(h)  hereof) this  Agreement
shall  automatically  terminate  without any liability or payment to the Company
without  further  action or notice by any Person.  No such  termination  of this
Agreement  under  Section  11(k)(i)  shall  affect the  Company's or the Buyer's
obligations  under this  Agreement  with  respect to pending  purchases  and the
Company and the Buyer shall complete their  respective  obligations with respect
to any pending purchases under this Agreement.

         10.      CERTAIN DEFINED TERMS.

         For  purposes of this  Agreement,  the  following  terms shall have the
following meanings:

         (a)  "1933 Act" means the Securities Act of 1933, as amended.

         (b)  "Available  Amount"  means  initially  Twenty One Million  Dollars
($21,000,000.00)  in the aggregate which amount shall be reduced by the Purchase
Amount each time the Buyer purchases  shares of Common Stock pursuant to Section
1 hereof including the Initial Purchase.

         (c) "Bankruptcy Law" means Title 11, U.S. Code, or any similar  federal
or state law for the relief of debtors.

         (d) "Base  Purchase  Notice" shall mean an  irrevocable  written notice
from the Company to the Buyer directing the Buyer to buy up to the Base Purchase
Amount in Purchase  Shares as specified by the Company therein at the applicable
Purchase Price on the Purchase Date.

         (e) "Block  Purchase  Amount" shall mean such Block Purchase  Amount as
specified  by the Company in a Block  Purchase  Notice  subject to Section  1(b)
hereof.

         (f) "Block  Purchase  Notice" shall mean an irrevocable  written notice
from the  Company  to the Buyer  directing  the Buyer to buy the Block  Purchase

                                       16
<PAGE>

Amount in  Purchase  Shares as  specified  by the  Company  therein at the Block
Purchase Price as of the Purchase Date subject to Section 1 hereof.

         (d) "Business Day" means any day on which the Principal  Market is open
for trading  including any day on which the Principal Market is open for trading
for a period of time less than the customary time.

         (e) "Closing  Sale Price" means,  for any security as of any date,  the
last closing trade price for such  security on the Principal  Market as reported
by the  Principal  Market,  or, if the  Principal  Market  is not the  principal
securities exchange or trading market for such security,  the last closing trade
price of such security on the principal  securities  exchange or trading  market
where such security is listed or traded as reported by the Principal Market.

         (f)  "Confidential  Information"  means any  information  disclosed  by
either  party to the other party,  either  directly or  indirectly,  in writing,
orally or by  inspection of tangible  objects  (including,  without  limitation,
documents,  prototypes,  samples,  plant and equipment),  which is designated as
"Confidential,"   "Proprietary"   or  some  similar   designation.   Information
communicated  orally  shall  be  considered  Confidential  Information  if  such
information is confirmed in writing as being Confidential Information within ten
(10) business days after the initial  disclosure.  Confidential  Information may
also  include  information  disclosed to a  disclosing  party by third  parties.
Confidential  Information shall not, however,  include any information which (i)
was publicly  known and made  generally  available in the public domain prior to
the time of disclosure by the disclosing  party; (ii) becomes publicly known and
made  generally  available  after  disclosure  by the  disclosing  party  to the
receiving party through no action or inaction of the receiving  party;  (iii) is
already in the  possession of the  receiving  party at the time of disclosure by
the  disclosing  party as shown  by the  receiving  party's  files  and  records
immediately  prior to the time of disclosure;  (iv) is obtained by the receiving
party from a third party without a breach of such third party's  obligations  of
confidentiality;  (v) is independently  developed by the receiving party without
use of or reference to the disclosing party's Confidential Information, as shown
by documents and other competent  evidence in the receiving party's  possession;
or (vi) is required by law to be disclosed by the receiving party, provided that
the receiving  party gives the  disclosing  party prompt  written notice of such
requirement  prior to such  disclosure  and  assistance  in  obtaining  an order
protecting the information from public disclosure.

         (g) "Custodian" means any receiver,  trustee,  assignee,  liquidator or
similar official under any Bankruptcy Law.

         (h)  "Maturity  Date"  means  the date  that is 500  Business  Days (25
Monthly Periods) from the Commencement Date.

         (i) "Monthly Period" means each successive 20 Business Day period  com-
mencing with the Commencement Date.

         (j)  "Person"  means an  individual  or entity  including  any  limited
liability  company, a partnership,  a joint venture, a corporation,  a trust, an
unincorporated  organization  and a  government  or  any  department  or  agency
thereof.

         (k) "Principal  Market" means the Nasdaq OTC Bulletin  Board;  provided
however,  that in the event the Company's  Common Stock is ever listed or traded
on the Nasdaq  Global  Market,  the Nasdaq  Capital  Market,  the New York Stock
Exchange or the American Stock Exchange,  then the "Principal Market" shall mean
such other market or exchange on which the Company's Common Stock is then listed
or traded.

         (l) "Purchase  Amount" means,  with respect to any particular  purchase
made hereunder, the portion of the Available Amount to be purchased by the Buyer
pursuant to Section 1 hereof in connection with the Initial  Purchases or as set
forth in a valid Base Purchase Notice or a valid Block Purchase Notice which the
Company delivers to the Buyer.

         (m) "Purchase Date" means with respect to any particular  purchase made
hereunder,  the Business Day after receipt by the Buyer of a valid Base Purchase
Notice or a valid Block Purchase Notice that the Buyer is to buy Purchase Shares
pursuant to Section 1 hereof.

         (n)  "Purchase  Price" means the lower of the (A) the lowest Sale Price
of the Common Stock on the Purchase Date and (B) the  arithmetic  average of the
three (3) lowest Closing Sale Prices for the Common Stock during the twelve (12)
consecutive Business Days ending on the Business Day immediately  preceding such

                                       17
<PAGE>

Purchase   Date  (to  be   appropriately   adjusted   for  any   reorganization,
recapitalization, non-cash dividend, stock split or other similar transaction).

         (o) "Sale Price" means,  any trade price for the shares of Common Stock
on the Principal Market as reported by the Principal Market.

         (q) "SEC" means the United States Securities and Exchange Commission.

         (r)  "Transfer  Agent" means the  transfer  agent of the Company as set
forth in Section  11(f)  hereof or such other  person who is then serving as the
transfer agent for the Company in respect of the Common Stock.

         11.      MISCELLANEOUS.

         (a) Governing Law; Jurisdiction;  Jury Trial. The corporate laws of the
State of Colorado shall govern all issues  concerning the relative rights of the
Company and its shareholders.  All other questions  concerning the construction,
validity,  enforcement  and  interpretation  of this  Agreement  and  the  other
Transaction  Documents  shall be governed by the  internal  laws of the State of
Illinois,  without  giving  effect  to any  choice  of law  or  conflict  of law
provision or rule (whether of the State of Illinois or any other  jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State of  Illinois.  Each party  hereby  irrevocably  submits  to the  exclusive
jurisdiction of the state and federal courts sitting in the City of Chicago, for
the  adjudication  of any  dispute  hereunder  or under  the  other  Transaction
Documents  or in  connection  herewith  or  therewith,  or with any  transaction
contemplated  hereby or discussed herein,  and hereby  irrevocably  waives,  and
agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action
or  proceeding  is  brought in an  inconvenient  forum or that the venue of such
suit,  action or proceeding is improper.  Each party hereby  irrevocably  waives
personal  service of process and  consents to process  being  served in any such
suit,  action or  proceeding  by  mailing a copy  thereof  to such  party at the
address for such notices to it under this Agreement and agrees that such service
shall  constitute  good and  sufficient  service of process and notice  thereof.
Nothing  contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST,  A JURY TRIAL FOR THE ADJUDICATION
OF ANY  DISPUTE  HEREUNDER  OR IN  CONNECTION  HEREWITH  OR ARISING  OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

         (b)  Counterparts.  This  Agreement  may be  executed  in  two or  more
identical  counterparts,  all of  which  shall  be  considered  one and the same
agreement and shall become effective when  counterparts have been signed by each
party and  delivered to the other  party;  provided  that a facsimile  signature
shall be  considered  due  execution  and shall be  binding  upon the  signatory
thereto with the same force and effect as if the signature were an original, not
a facsimile signature.

         (c)  Headings.  The headings of this Agreement  are for convenience  of
reference and shall not  form part  of,  or  affect the interpretation  of, this
Agreement.

         (d)  Severability.  If any provision of this Agreement shall be invalid
or unenforceable in any jurisdiction,  such invalidity or unenforceability shall
not affect the validity or  enforceability of the remainder of this Agreement in

                                       18
<PAGE>

that  jurisdiction  or the validity or  enforceability  of any provision of this
Agreement in any other jurisdiction.

         (e) Entire  Agreement.  With the exception of the Mutual  Nondisclosure
Agreement between the parties, this Agreement supersedes all other prior oral or
written agreements between the Buyer, the Company,  their affiliates and persons
acting on their behalf with respect to the matters  discussed  herein,  and this
Agreement, the other Transaction Documents and the instruments referenced herein
contain  the entire  understanding  of the parties  with  respect to the matters
covered  herein and therein  and,  except as  specifically  set forth  herein or
therein,  neither the Company nor the Buyer makes any representation,  warranty,
covenant or undertaking with respect to such matters.  The Company  acknowledges
and  agrees  that  is  has  not  relied  on,  in  any  manner  whatsoever,   any
representations  or  statements,  written or oral,  other than as expressly  set
forth in this Agreement.

         (f) Notices. Any notices,  consents or other communications required or
permitted to be given under the terms of this  Agreement  must be in writing and
will be  deemed  to  have  been  delivered:  (i)  upon  receipt  when  delivered
personally;  (ii) upon receipt when sent by facsimile (provided  confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending  party);  or (iii) one  Business  Day after  deposit  with a  nationally
recognized  overnight  delivery service,  in each case properly addressed to the
party to  receive  the  same.  The  addresses  and  facsimile  numbers  for such
communications shall be:

                  If to the Company:
                           XsunX, Inc.
                           65 Enterprise
                           Aliso Viejo, CA 92656
                           Phone:           949-330-8060
                           Facsimile:       949-266-5823
                           Attention:       Chief Executive Officer

                  With a copy to:
                           K & L Gates LLP
                           Miami Center, 20th Floor,
                           201 South Biscayne Blvd.
                           Miami, FL 33131-2399
                           Telephone:       305-539-3300
                           Facsimile:       305-358-7095
                           Attention:       Clayton Parker

                  If to the Holder:
                           Fusion Capital Fund II, LLC
                           222 Merchandise Mart Plaza, Suite 9-112
                           Chicago, IL 60654
                           Telephone:       312-644-6644
                           Facsimile:       312-644-6244
                           Attention:       Steven G. Martin

                                       19
<PAGE>

                  If to the Transfer Agent:
                           Mountain Share Transfer
                           1625 Abilene Drive,
                           Broomfield, Colorado 80020
                           Telephone:       303-460-1149
                           Facsimile:       303-438-9243
                           Attention:       Beth Powell

or at such other address and/or facsimile number and/or to the attention of such
other person as the  recipient  party has  specified by written  notice given to
each other  party three (3)  Business  Days prior to the  effectiveness  of such
change.  Written  confirmation  of receipt  (A) given by the  recipient  of such
notice,  consent or other  communication,  (B)  mechanically  or  electronically
generated by the sender's  facsimile  machine  containing  the time,  date,  and
recipient facsimile number or (C) provided by a nationally  recognized overnight
delivery service,  shall be rebuttable evidence of personal service,  receipt by
facsimile or receipt from a nationally  recognized overnight delivery service in
accordance with clause (i), (ii) or (iii) above, respectively.

         (g)  Successors and Assigns.  This Agreement  shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns.
The  Company  shall not  assign  this  Agreement  or any  rights or  obligations
hereunder without the prior written consent of the Buyer, including by merger or
consolidation.  The Buyer may not assign its  rights or  obligations  under this
Agreement.

         (h) No Third Party  Beneficiaries.  This  Agreement is intended for the
benefit of the parties  hereto and their  respective  permitted  successors  and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.

         (i)  Publicity.  The  Buyer  shall  have the  right to  approve  before
issuance any press release, SEC filing or any other public disclosure made by or
on behalf of the Company  whatsoever with respect to, in any manner,  the Buyer,
its  purchases  hereunder or any aspect of this  Agreement  or the  transactions
contemplated  hereby;  provided,  however,  that the Company  shall be entitled,
without  the prior  approval  of the Buyer,  to make any press  release or other
public  disclosure  (including  any filings  with the SEC) with  respect to such
transactions  as is required by applicable  law and  regulations  so long as the
Company and its counsel consult with the Buyer in connection with any such press
release or other public  disclosure  at least two (2) Business Days prior to its
release.  The  Buyer  must be  provided  with a copy  thereof  at least  two (2)
Business  Days prior to any release or use by the Company  thereof.  The Company
agrees and  acknowledges  that its failure to fully  comply with this  provision
constitutes a material  adverse effect on its ability to perform its obligations
under this Agreement.

         (j) Further Assurances. Each party shall do and perform, or cause to be
done and  performed,  all such  further acts and things,  and shall  execute and
deliver all such other agreements,  certificates,  instruments and documents, as
the other  party may  reasonably  request  in order to carry out the  intent and
accomplish  the  purposes  of  this  Agreement  and  the   consummation  of  the
transactions contemplated hereby.

                                       20
<PAGE>

         (k) Termination.  This Agreement may be terminated only as follows:

                  (i) By the Buyer any time an Event of Default  exists  without
         any  liability  or payment to the Company.  However,  if pursuant to or
         within the  meaning of any  Bankruptcy  Law,  the  Company  commences a
         voluntary  case  or any  Person  commences  a  proceeding  against  the
         Company,  a  Custodian  is  appointed  for  the  Company  or for all or
         substantially  all of its  property,  or the  Company  makes a  general
         assignment for the benefit of its creditors,  (any of which would be an
         Event of Default as described in Sections  9(f),  9(g) and 9(h) hereof)
         this Agreement shall  automatically  terminate without any liability or
         payment to the Company  without further action or notice by any Person.
         No such termination of this Agreement under this Section 11(k)(i) shall
         affect the Company's or the Buyer's  obligations  under this  Agreement
         with respect to pending  purchases  and the Company and the Buyer shall
         complete  their  respective  obligations  with  respect to any  pending
         purchases under this Agreement.

                  (ii)  In the  event  that  the  Commencement  shall  not  have
         occurred, the Company shall have the option to terminate this Agreement
         for any reason or for no reason without any liability whatsoever of any
         party to any other party under this Agreement.

                  (iii)  In the  event  that  the  Commencement  shall  not have
         occurred on or before March 1, 2008,  due to the failure to satisfy the
         conditions  set forth in  Sections  6 and 7 above  with  respect to the
         Commencement, at any time prior to Commencement either party shall have
         the option to terminate this Agreement at the close of business on such
         date or thereafter without any liability whatsoever of any party to any
         other party under this Agreement.

                   (iv) At any time after the  Commencement  Date,  the  Company
         shall have the option to terminate this Agreement for any reason or for
         no reason by delivering notice (a "Company  Termination Notice") to the
         Buyer  electing to  terminate  this  Agreement  without  any  liability
         whatsoever  of any party to any other party under this  Agreement.  The
         Company  Termination  Notice  shall  not be  effective  until  one  (1)
         Business Day after it has been received by the Buyer.

                  (v) This Agreement shall  automatically  terminate on the date
         that the  Company  sells and the  Buyer  purchases  the full  Available
         Amount as provided herein,  without any action or notice on the part of
         any party and  without  any  liability  whatsoever  of any party to any
         other party under this Agreement.

                  (vi) If by the  Maturity  Date for any reason or for no reason
         the full  Available  Amount under this Agreement has not been purchased
         as provided for in Section 1 of this  Agreement,  this Agreement  shall
         automatically  terminate  on the Maturity  Date,  without any action or
         notice on the part of any party and without any liability whatsoever of
         any party to any other party under this Agreement.

Except as set forth in  Sections  11(k)(i)  (in  respect  of an Event of Default
under  Sections  9(f),  9(g) and 9(h)) and  11(k)(vi),  any  termination of this
Agreement  pursuant to this  Section  11(k) shall be effected by written  notice
from the Company to the Buyer, or the Buyer to the Company,  as the case may be,
setting forth the basis for the  termination  hereof.  The  representations  and
warranties of the Company and the Buyer contained in Sections 2, 3 and 5 hereof,
the indemnification  provisions set forth in Section 8 hereof and the agreements
and covenants set forth in Section 11, shall  survive the  Commencement  and any
termination of this Agreement. No termination of this Agreement shall affect the
Company's or the Buyer's rights or obligations (i) under the Registration Rights

                                       21
<PAGE>

Agreement which shall survive any such  termination or (ii) under this Agreement
with respect to pending  purchases and the Company and the Buyer shall  complete
their respective  obligations  with respect to any pending  purchases under this
Agreement.

         (l) Financial Advisor,  Placement Agent,  Broker or Finder. The Company
shall be responsible for the payment of any fees or commissions,  if any, of any
financial advisor,  placement agent, broker or finder relating to or arising out
of the  transactions  contemplated  hereby.  The Company shall pay, and hold the
Buyer harmless  against,  any  liability,  loss or expense  (including,  without
limitation,  attorneys' fees and out of pocket  expenses)  arising in connection
with any such claim.

         (m) No Strict Construction. The language used in this Agreement will be
deemed to be the language  chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party.

         (n) Remedies,  Other  Obligations,  Breaches and Injunctive Relief. The
Buyer's remedies  provided in this Agreement shall be cumulative and in addition
to all other remedies available to the Buyer under this Agreement,  at law or in
equity  (including  a decree of specific  performance  and/or  other  injunctive
relief),  no remedy of the Buyer  contained  herein  shall be deemed a waiver of
compliance  with the  provisions  giving rise to such remedy and nothing  herein
shall limit the Buyer's  right to pursue  actual  damages for any failure by the
Company to comply with the terms of this  Agreement.  The  Company  acknowledges
that a breach by it of its obligations  hereunder will cause irreparable harm to
the Buyer and that the remedy at law for any such breach may be inadequate.  The
Company  therefore  agrees that,  in the event of any such breach or  threatened
breach,  the  Buyer  shall be  entitled,  in  addition  to all  other  available
remedies,  to an  injunction  restraining  any breach,  without the necessity of
showing economic loss and without any bond or other security being required.

         (o) Enforcement  Costs.  If: (i) this  Agreement is placed by the Buyer
in the hands of an attorney for  enforcement or is enforced by the Buyer through
any legal proceeding;  or (ii) an attorney is retained to represent the Buyer in
any  bankruptcy,  reorganization,  receivership or other  proceedings  affecting
creditors'  rights  and  involving  a claim  under  this  Agreement;  or (iii an
attorney is retained to represent the Buyer in any other proceedings  whatsoever
in connection with this  Agreement,  then the Company shall pay to the Buyer, as
incurred by the Buyer,  all reasonable costs and expenses  including  attorneys'
fees  incurred in  connection  therewith,  in addition to all other  amounts due
hereunder.

         (p)  Failure  or  Indulgence  Not  Waiver.  No  failure or delay in the
exercise of any power,  right or privilege  hereunder  shall operate as a waiver
thereof,  nor shall any single or partial  exercise of any such power,  right or
privilege  preclude  other or further  exercise  thereof or of any other  right,
power or privilege.

                                    * * * * *

                                       22
<PAGE>

         IN WITNESS  WHEREOF,  the Buyer and the Company have caused this Common
Stock Purchase Agreement to be duly executed as of the date first written above.

                                  THE COMPANY:

                                   XsunX, Inc.

                                   By:______________________
                                   Name:
                                   Title:

                                   BUYER:

                                   Fusion Capital Fund II, LLC
                                   By: Fusion Capital Partners, LLC
                                   By: Rockledge Capital Corporation

                                   By:_______________________
                                   Name: Joshua B. Scheinfeld
                                   Title: President

                                       23
<PAGE>

                                    SCHEDULES

Schedule 3(a)              Subsidiaries

The Company has no subsidiaries and operates as a Colorado corporation qualified
to conduct business as a foreign corporation in the states of California.

Schedule 3(c)              Capitalization

The authorized  capital stock of the Company consists of:  500,000,000 shares of
Common Stock, of which as of the date hereof,  157,919,856 shares are issued and
outstanding,  20,000,000  shares  are  reserved  for  issuance  pursuant  to the
Company's 2007 stock option plans of which only approximately  15,500,000 shares
remain  available  for future  grants and  15,362,000  shares are  issuable  and
reserved for issuance  pursuant to securities  (other than stock options  issued
pursuant to the Company's stock option plans)  exercisable or exchangeable  for,
or  convertible  into,  shares of Common  Stock  and (ii)  50,000,000  shares of
Preferred  Stock,  $0.01 par value, of which as of the date hereof no shares are
issued and outstanding and no other Preferred Stock is outstanding.

Schedule 3(e)              Conflicts

None

Schedule 3(f)              1934 Act Filings

No notices other than routine correspondence.

Schedule 3(g)              Material Changes

No material changes.

Schedule 3(h)              Litigation

None to the best current  actual  knowledge of the Company after due inquiry but
without specific investigation.

Schedule 3(k)              Intellectual Property

Under a license agreement with MVSystems, Inc. dated September 17, 2004 in which
the  Company  licensed  certain  intellectual   property  rights  pertaining  to
deposition  technologies,  the Company has until  September  17, 2009 to realize
$200,000  dollars  cumulative  revenue  in a bona  fide  arms-length  commercial
setting or  relationship,  or the execution of a bona fide binding  contract for
over $200,000 with a company with assets over $1,000,000.

Under a license  agreement with Sencera,  LLC dated January 1, 2007 in which the
Company licensed certain  intellectual  property rights pertaining to deposition
technologies,  the Company  must,  within  eighteen (18) months from the date of
completion  of  development  of  the  deposition  technology,   pay  to  Sencera
approximately $3,750,000 in royalties required to maintain license rights to the
technology.  As of the date of this  Agreement the  completion of development of
the licensed  technologies  is unknown and as such the calendar dates for the 18

<PAGE>

month period in which the Company must generate  royalties is yet to be defined.
The  Company  does  not  currently   contemplate   the  use  of  these  licensed
technologies in its business within the next two (2) years.

Under an  agreement  dated May 6, 2004 the  Company has the right to acquire the
trade mark name "Power Glass" and the domain URL "powergalss.com" for the amount
of $50,000 dollars up to November 6, 2007. Under the Company's  current business
plan XsunX does not  envision  the  exercise of this option right to acquire the
trade name and URL.

The Company has not applied for nor been issued  registered  trademarks  for its
"XsunX" trade name.

Schedule 3(m)              Liens

None to the best current  actual  knowledge of the Company after due inquiry but
without specific investigation.

Schedule 3(q)     Certain Transactions

None

                               EXHIBITS

Exhibit A             Form of Company Counsel Opinion
Exhibit B             Form of Officer's Certificate
Exhibit C             Form of Resolutions of Board of Directors of the Company
Exhibit D             Form of Secretary's Certificate
Exhibit E             Form of Letter to Transfer Agent
Exhibit F             Form of Warrant

<PAGE>

                                    EXHIBIT A

                         FORM OF COMPANY COUNSEL OPINION

         Capitalized terms used herein but not defined herein,  have the meaning
set forth in the Common Stock Purchase  Agreement.  Based on the foregoing,  and
subject to the assumptions and  qualifications  set forth herein,  we are of the
opinion that:

                  1. The Company is a corporation  existing and in good standing
under the laws of the State of Colorado. The Company is qualified to do business
as a foreign corporation and is in good standing in the State of California.

                  2. The Company has the corporate power to execute and deliver,
and perform its obligations  under,  each Transaction  Document to which it is a
party.  The Company has the  corporate  power to conduct its business as, to the
best of our knowledge,  it is now  conducted,  and to own and use the properties
owned and used by it.

                  3. The execution,  delivery and  performance by the Company of
the  Transaction  Documents to which it is a party have been duly  authorized by
all  necessary  corporate  action on the part of the Company.  The execution and
delivery of the  Transaction  Documents by the Company,  the  performance of the
obligations  of  the  Company  thereunder  and  the  consummation  by it of  the
transactions  contemplated therein have been duly authorized and approved by the
Company's Board of Directors and no further  consent,  approval or authorization
of the  Company,  its Board of Directors or its  stockholders  is required.  The
Transaction  Documents  to which the Company is a party have been duly  executed
and  delivered by the Company and are the valid and binding  obligations  of the
Company,  enforceable  against the Company in accordance with their terms except
as such  enforceability  may be  limited  by  general  principles  of  equity or
applicable bankruptcy,  insolvency,  liquidation or similar laws relating to, or
affecting creditor's rights and remedies.

                  4. The execution,  delivery and  performance by the Company of
the Transaction  Documents,  the consummation by the Company of the transactions
contemplated  thereby including the offering,  sale and issuance of the Purchase
Shares in accordance  with the terms and conditions of the Common Stock Purchase
Agreement,  and  fulfillment  and  compliance  with  terms  of  the  Transaction
Documents,  does not and shall not: (i) conflict with, constitute a breach of or
default (or an event which,  with the giving of notice or lapse of time or both,
constitutes  or  could  constitute  a  breach  or  a  default),  under  (a)  the
Certificate  of  Incorporation  or the Bylaws of the  Company,  (b) any material
agreement,  note, lease, mortgage, deed or other material instrument to which to
our  knowledge  the  Company  is a party or by which the  Company  or any of its
assets are bound,  (ii) result in any  violation  of any statute,  law,  rule or
regulation  applicable to the Company,  or (iii) to our  knowledge,  violate any
order,  writ,  injunction  or decree  applicable  to the  Company  or any of its
subsidiaries.

                  5. The issuance of the Purchase  Shares,  the Warrants and the
Warrant Shares pursuant to the terms and conditions of the Transaction Documents
has been duly authorized and the Initial Shares are validly  issued,  fully paid
and  non-assessable,  to our  knowledge,  free  of all  taxes,  liens,  charges,
restrictions,  rights of first  refusal  and  preemptive  rights.  _____________
shares of Common Stock have been properly reserved for issuance under the Common
Stock  Purchase  Agreement for future  issuances of Purchase  Shares.  3,333,332
shares of Common  Stock  have been  properly  reserved  for  issuance  under the
Warrants for future issuances upon exercise of the Warrants.  The Initial Shares
have been  issued  and paid for in  accordance  with the Common  Stock  Purchase
Agreement, the Initial Shares are validly issued, fully paid and non-assessable,
to our knowledge,  free of all taxes, liens,  charges,  restrictions,  rights of
first refusal and preemptive rights. When issued and paid for in accordance with
the Common Stock Purchase Agreement, the Purchase Shares (other than the Initial
Purchase Shares) shall be validly issued, fully paid and non-assessable,  to our
knowledge,  free of all taxes,  liens,  charges,  restrictions,  rights of first

<PAGE>

refusal and preemptive  rights.  When issued and paid for in accordance with the
Warrant,   the  Warrant  Shares  shall  be  validly   issued,   fully  paid  and
non-assessable,   to  our  knowledge,   free  of  all  taxes,  liens,   charges,
restrictions,  rights of first refusal and preemptive  rights. To our knowledge,
the execution and delivery of the Registration  Rights Agreement do not, and the
performance by the Company of its obligations thereunder shall not, give rise to
any rights of any other  person for the  registration  under the 1933 Act of any
shares of Common Stock or other  securities  of the Company  which have not been
waived.

                  6. As of the date hereof,  the authorized capital stock of the
Company  consists of 500,000,000  shares of common stock, no par value, of which
to our knowledge  __________  shares are issued and  outstanding.  Except as set
forth on Schedule 3(c) of the Common Stock Purchase Agreement, to our knowledge,
there are no outstanding shares of capital stock or other securities convertible
into or  exchangeable  or  exercisable  for shares of the  capital  stock of the
Company.

                  7.  Assuming  the  accuracy  of the  representations  and your
compliance  with the covenants  made by you in the  Transaction  Documents,  the
offering,  sale and issuance of the 6,833,332 Initial Shares and the Warrants to
you pursuant to the Transaction Documents was exempt from registration under the
1933 Act and the  securities  laws and  regulations of the State of Colorado and
the State of California.

                  8. Other than that which has been obtained and completed prior
to the date hereof, no authorization,  approval,  consent, filing or other order
of any federal or state governmental body,  regulatory agency, or stock exchange
or market, or any court, or, to our knowledge, any third party is required to be
obtained  by the Company to enter into and  perform  its  obligations  under the
Transaction  Documents or for the Company to issue and sell the Purchase  Shares
as contemplated by the Transaction Documents.

                  9. The Common Stock is registered pursuant to Section 12(g) of
the 1934 Act.  To our  knowledge,  since  January 1, 2006,  the  Company has not
received any written  notice from the Principal  Market stating that the Company
has not been in compliance with any of the rules and regulations  (including the
requirements for continued listing) of the Principal Market.

         We further  advise you that to our  knowledge,  except as  disclosed on
Schedule 3(h) in the Common Stock Purchase Agreement,  there is no action, suit,
proceeding,  inquiry or  investigation  before or by any court,  public board or
body, any governmental  agency, any stock exchange or market, or self-regulatory
organization, which has been threatened in writing or which is currently pending
against the Company,  any of its subsidiaries,  any officers or directors of the
Company or any of its  subsidiaries  or any of the  properties of the Company or
any of its subsidiaries.

         In  addition,   we  have   participated   in  the  preparation  of  the
Registration  Statement  (SEC File  #________)  covering the sale of the Warrant
Shares and the Purchase  Shares  (including the Initial  Shares),  including the
prospectus  dated  ____________,  contained  therein  and  in  conferences  with
officers  and other  representatives  of the Company  (including  the  Company's
independent  auditors) during which the contents of the  Registration  Statement
and related matters were discussed and reviewed and, although we are not passing
upon and do not assume any  responsibility  for the  accuracy,  completeness  or
fairness of the statements contained in the Registration Statement, on the basis
of the  information  that was developed in the course of the  performance of the

<PAGE>

services referred to above,  considered in the light of our understanding of the
applicable law, nothing came to our attention that caused us to believe that the
Registration  Statement  (other than the financial  statements and schedules and
the other  financial  and  statistical  data  included  therein,  as to which we
express no belief),  as of their  dates,  contained  any untrue  statement  of a
material fact or omitted to state any material  fact  necessary in order to make
the statements  therein, in the light of the circumstances under which they were
made, not misleading.

<PAGE>

                                    EXHIBIT B

                          FORM OF OFFICER'S CERTIFICATE

             This  Officer's  Certificate  ("Certificate")  is  being  delivered
pursuant to Section 7(e) of that certain Common Stock Purchase  Agreement  dated
as of _________,  ("Common  Stock  Purchase  Agreement"),  by and between XsunX,
Inc., a Colorado  corporation (the  "Company"),  and Fusion Capital Fund II, LLC
(the  "Buyer").  Terms used  herein  and not  otherwise  defined  shall have the
meanings ascribed to them in the Common Stock Purchase Agreement.

             The undersigned, ___________, ______________ of the Company, hereby
certifies as follows:

                  1. I am the _______________ of the Company and make the state-
         ments contained in  this Certificate;

                  2. The  representations and warranties of the Company are true
         and correct in all material  respects (except to the extent that any of
         such   representations  and  warranties  is  already  qualified  as  to
         materiality or pursuant to the schedules referenced in Section 3 of the
         Common Stock Purchase  Agreement,  in which case, such  representations
         and warranties are true and correct without further  qualification)  as
         of the date when made and as of the Commencement Date as though made at
         that time (except for representations and warranties that speak as of a
         specific date);

                  3. The Company has  performed,  satisfied  and complied in all
         material respects with covenants, agreements and conditions required by
         the Transaction  Documents to be performed,  satisfied or complied with
         by the Company at or prior to the Commencement Date.

                  4. The Company has not taken any steps, and does not currently
         expect to take any steps, to seek protection pursuant to any Bankruptcy
         Law nor does the Company or any of its Subsidiaries  have any knowledge
         or reason to believe that its creditors intend to initiate  involuntary
         bankruptcy  or  insolvency  proceedings.  The  Company  is  financially
         solvent and is generally able to pay its debts as they become due.

         IN WITNESS WHEREOF, I have hereunder signed my name on this ___ day of
         ___________.

                                                  ----------------------
                                                  Name:
                                                  Title:

         The  undersigned  as  Secretary of  ________,  a ________  corporation,
hereby certifies that ___________ is the duly elected, appointed,  qualified and
acting  ________ of  _________  and that the  signature  appearing  above is his
genuine signature.

                                    -----------------------------------
                                    Secretary

<PAGE>

                                   EXHIBIT C-1

                           FORM OF COMPANY RESOLUTIONS
                         FOR SIGNING PURCHASE AGREEMENT

                          UNANIMOUS WRITTEN CONSENT OF

                                   XsunX, Inc.

         Pursuant to Section ______ of the _________, the undersigned, being all
of the directors of XsunX, Inc., a Colorado  corporation (the  "Corporation") do
hereby consent to and adopt the following resolutions as the action of the Board
of Directors  for and on behalf of the  Corporation  and hereby direct that this
Consent be filed with the minutes of the proceedings of the Board of Directors:

         WHEREAS,  there has been  presented  to the Board of  Directors  of the
Corporation  a draft of the  Common  Stock  Purchase  Agreement  (the  "Purchase
Agreement")  by and  between the  Corporation  and Fusion  Capital  Fund II, LLC
("Fusion"),  providing  for the  purchase  by Fusion of up to Twenty One Million
Dollars  ($21,000,000.00)  of the Corporation's  common stock, no par value (the
"Common Stock"); and

         WHEREAS,  after careful  consideration of the Purchase  Agreement,  the
documents  incident  thereto and other factors  deemed  relevant by the Board of
Directors, the Board of Directors has determined that it is advisable and in the
best interests of the Corporation to engage in the transactions  contemplated by
the Purchase Agreement,  including, but not limited to, the issuance and sale of
shares of Common Stock to Fusion up to the  available  amount under the Purchase
Agreement (the "Purchase Shares").

                              Transaction Documents

         NOW, THEREFORE,  BE IT RESOLVED, that the transactions described in the
Purchase Agreement are hereby approved and ____________ and ______________  (the
"Authorized  Officers")  are  severally  authorized  to execute  and deliver the
Purchase Agreement,  and any other agreements or documents  contemplated thereby
including,   without  limitation,   the  common  stock  purchase  warrants  (the
"Warrants" and the shares of Common Stock underlying such Warrants, the "Warrant
Shares") described in the Purchase  Agreement,  a registration  rights agreement
(the  "Registration  Rights  Agreement")  providing for the  registration of the
shares of the  Company's  Common  Stock  issuable  in  respect  of the  Purchase
Agreement and the Warrants on behalf of the  Corporation,  with such amendments,
changes,  additions  and  deletions  as the  Authorized  Officers may deem to be
appropriate  and  approve on behalf of, the  Corporation,  such  approval  to be
conclusively evidenced by the signature of an Authorized Officer thereon; and

         FURTHER RESOLVED,  that the terms and provisions of the Warrants by the
Corporation  to be issued to  Fusion  are  hereby  approved  and the  Authorized
Officers are  authorized  to execute and deliver the  Warrants  (pursuant to the
terms of the Purchase Agreement),  with such amendments,  changes, additions and
deletions as the Authorized  Officer may deem  appropriate and approve on behalf
of, the Corporation, such approval to be conclusively evidenced by the signature
of an Authorized Officer thereon; and

<PAGE>

         FURTHER  RESOLVED,  that the terms and  provisions of the  Registration
Rights Agreement by and among the Corporation and Fusion are hereby approved and
the Authorized  Officers are authorized to execute and deliver the  Registration
Rights Agreement  (pursuant to the terms of the Purchase  Agreement),  with such
amendments,  changes, additions and deletions as the Authorized Officer may deem
appropriate  and  approve on behalf of, the  Corporation,  such  approval  to be
conclusively evidenced by the signature of an Authorized Officer thereon; and

         FURTHER RESOLVED, that the terms and provisions of the Form of Transfer
Agent Instructions (the  "Instructions")  are hereby approved and the Authorized
Officers are authorized to execute and deliver the Instructions (pursuant to the
terms of the Purchase Agreement),  with such amendments,  changes, additions and
deletions as the Authorized  Officers may deem appropriate and approve on behalf
of, the Corporation, such approval to be conclusively evidenced by the signature
of an Authorized Officer thereon; and

                         Execution of Purchase Agreement

         FURTHER  RESOLVED,  that the Corporation be and it hereby is authorized
to execute and deliver the  Purchase  Agreement  providing  for the  purchase of
common  stock  of  the   Corporation   having  an  aggregate   value  of  up  to
$21,000,000.00; and

                      Issuance of Common Stock and Warrants

         FURTHER  RESOLVED,  that the Corporation is hereby  authorized to issue
the Warrants  under the Purchase  Agreement in accordance  with the terms of the
Purchase  Agreement  and that,  upon  issuance of the  Warrants  pursuant to the
Purchase Agreement, the Warrants will be duly authorized,  validly issued, fully
paid and  nonassessable  with no personal  liability  attaching to the ownership
thereof; and

         FURTHER  RESOLVED,  that the Corporation is hereby  authorized to issue
the  Warrant  Shares  under the  Warrants  in  accordance  with the terms of the
Warrants and that, upon issuance of the Warrant Shares pursuant to the Warrants,
the  Warrant  Shares will be duly  authorized,  validly  issued,  fully paid and
nonassessable with no personal liability attaching to the ownership thereof; and

         FURTHER   RESOLVED,   that  the  Corporation  shall  initially  reserve
3,333,332  shares of Common  Stock for  issuance  as  Warrant  Shares  under the
Warrants,.

         FURTHER  RESOLVED,  that the Corporation is hereby  authorized to issue
shares of Common Stock upon the purchase of Purchase  Shares up to the available
amount under the Purchase Agreement in accordance with the terms of the Purchase
Agreement  and that,  upon  issuance  of the  Purchase  Shares  pursuant  to the
Purchase Agreement, the Purchase Shares will be duly authorized, validly issued,
fully  paid  and  nonassessable  with no  personal  liability  attaching  to the
ownership thereof; and

         FURTHER   RESOLVED,   that  the  Corporation  shall  initially  reserve
___________  shares of Common  Stock for  issuance as Purchase  Shares after the
Commencement  under the Purchase  Agreement (not including the 3,333,332 Initial
Purchase Shares as defined in the Agreement),.

                               Approval of Actions

         FURTHER RESOLVED,  that, without limiting the foregoing, the Authorized
Officers are, and each of them hereby is,  authorized and directed to proceed on
behalf of the  Corporation  and to take all such  steps as deemed  necessary  or

<PAGE>

appropriate, with the advice and assistance of counsel, to cause the Corporation
to consummate the agreements  referred to herein and to perform its  obligations
under such agreements; and

         FURTHER  RESOLVED,  that the  Authorized  Officers be, and each of them
hereby is,  authorized,  empowered  and directed on behalf of and in the name of
the  Corporation,  to take or cause to be taken all such further  actions and to
execute and  deliver or cause to be  executed  and  delivered  all such  further
agreements,   amendments,   documents,    certificates,    reports,   schedules,
applications,  notices,  letters and  undertakings and to incur and pay all such
fees and expenses as in their judgment  shall be necessary,  proper or desirable
to carry into  effect  the  purpose  and intent of any and all of the  foregoing
resolutions, and that all actions heretofore taken by any officer or director of
the  Corporation  in  connection  with  the  transactions  contemplated  by  the
agreements  described herein are hereby approved,  ratified and confirmed in all
respects.

         IN WITNESS  WHEREOF,  the Board of Directors has executed and delivered
this Consent effective as of __________, 2007.

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

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

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

being all of the directors of XsunX, Inc.

<PAGE>

                                   EXHIBIT C-2

          FORM OF COMPANY RESOLUTIONS APPROVING REGISTRATION STATEMENT

                          UNANIMOUS WRITTEN CONSENT OF

                                   XsunX, Inc.

         Pursuant to Section ______ of the _________, the undersigned, being all
of the directors of XsunX, Inc., a Colorado  corporation (the  "Corporation") do
hereby consent to and adopt the following resolutions as the action of the Board
of Directors  for and on behalf of the  Corporation  and hereby direct that this
Consent be filed with the minutes of the proceedings of the Board of Directors.

         WHEREAS,  there has been  presented  to the Board of  Directors  of the
Corporation a Common Stock Purchase Agreement (the "Purchase  Agreement") by and
among the Corporation and Fusion Capital Fund II, LLC ("Fusion"),  providing for
the purchase by Fusion of up to Twenty One Million Dollars  ($21,000,000.00)  of
the Corporation's common stock, no par value (the "Common Stock"); and

         WHEREAS,  after careful  consideration of the Purchase  Agreement,  the
documents  incident  thereto and other factors  deemed  relevant by the Board of
Directors,  the Board of Directors  has approved the Purchase  Agreement and the
transactions contemplated thereby and the Company has executed and delivered the
Purchase Agreement to Fusion; and

         WHEREAS, in connection with the transactions  contemplated  pursuant to
the Purchase Agreement,  the Company has agreed to file a registration statement
with the Securities and Exchange  Commission (the "Commission")  registering the
Warrant Shares (as defined in the Purchase  Agreement)  and the Purchase  Shares
(as defined in the Purchase Agreement);

         WHEREAS,  the management of the  Corporation has prepared and presented
to the Board of Directors the attached draft of a Registration Statement on Form
___ (the "Registration Statement") in order to register the sale of the Purchase
Shares and the Warrant Shares (collectively, the "Shares"); and

         WHEREAS,   the  Board  of  Directors  has  determined  to  approve  the
Registration  Statement  and  to  authorize  the  appropriate  officers  of  the
Corporation to take all such actions as they may deem  appropriate to effect the
offering.

         NOW, THEREFORE,  BE IT RESOLVED, that the officers and directors of the
Corporation  be, and each of them hereby is,  authorized and directed,  with the
assistance of counsel and accountants for the Corporation,  to prepare,  execute
and file with the  Commission the  Registration  Statement,  which  Registration
Statement  shall be filed  substantially  in the form  presented to the Board of
Directors,  with such  changes  therein  as the Chief  Executive  Officer of the
Corporation or any Vice President of the Corporation shall deem desirable and in
the best  interest  of the  Corporation  and its  shareholders  (such  officer's
execution   thereof   including   such  changes  shall  be  deemed  to  evidence
conclusively such determination); and

         FURTHER RESOLVED,  that the officers of the Corporation be, and each of
them hereby is,  authorized  and  directed,  with the  assistance of counsel and
accountants  for  the  Corporation,  to  prepare,  execute  and  file  with  the
Commission all amendments,  including post-effective amendments, and supplements

<PAGE>

to the  Registration  Statement,  and  all  certificates,  exhibits,  schedules,
documents and other instruments relating to the Registration  Statement, as such
officers  shall deem  necessary or  appropriate  (such  officer's  execution and
filing thereof shall be deemed to evidence conclusively such determination); and

         FURTHER RESOLVED,  that the execution of the Registration Statement and
of any amendments and  supplements  thereto by the officers and directors of the
Corporation  be,  and  the  same  hereby  is,  specifically   authorized  either
personally or by the authorized  officers as such  officer's or director's  true
and lawful attorneys-in-fact and agents; and

         FURTHER RESOLVED, that the authorized officers are hereby designated as
"Agent for  Service" of the  Corporation  in  connection  with the  Registration
Statement  and the  filing  thereof  with  the  Commission,  and the  authorized
officers  hereby are authorized to receive  communications  and notices from the
Commission with respect to the Registration Statement; and

         FURTHER RESOLVED,  that the officers of the Corporation be, and each of
them hereby is, authorized and directed to pay all fees, costs and expenses that
may  be  incurred  by  the  Corporation  in  connection  with  the  Registration
Statement; and

         FURTHER RESOLVED,  that it is desirable and in the best interest of the
Corporation  that the  Shares be  qualified  or  registered  for sale in various
states;  that the  officers of the  Corporation  be, and each of them hereby is,
authorized to determine the states in which appropriate action shall be taken to
qualify  or  register  for sale all or such part of the  Shares as they may deem
advisable;  that said  officers  be, and each of them hereby is,  authorized  to
perform  on  behalf  of the  Corporation  any and all such acts as they may deem
necessary or advisable in order to comply with the  applicable  laws of any such
states, and in connection therewith to execute and file all requisite papers and
documents,  including, but not limited to, applications,  reports, surety bonds,
irrevocable  consents,  appointments  of  attorneys  for  service of process and
resolutions; and the execution by such officers of any such paper or document or
the doing by them of any act in  connection  with the  foregoing  matters  shall
conclusively  establish  their  authority  therefor from the Corporation and the
approval and  ratification  by the  Corporation  of the papers and  documents so
executed and the actions so taken; and

         FURTHER  RESOLVED,  that if, in any state  where the  securities  to be
registered or qualified for sale to the public,  or where the  Corporation is to
be registered in connection with the public offering of the Shares, a prescribed
form of  resolution  or  resolutions  is  required to be adopted by the Board of
Directors,  each such  resolution  shall be  deemed  to have been and  hereby is
adopted,  and the Secretary is hereby  authorized to certify the adoption of all
such resolutions as though such resolutions were now presented to and adopted by
the Board of Directors; and

         FURTHER  RESOLVED,  that  the  officers  of the  Corporation  with  the
assistance of counsel be, and each of them hereby is, authorized and directed to
take all necessary  steps and do all other things  necessary and  appropriate to
effect the listing of the Shares on the Nasdaq OTC  Bulletin  Board  market,  if
any.

                               Approval of Actions

         FURTHER RESOLVED,  that, without limiting the foregoing, the authorized
officers are, and each of them hereby is,  authorized and directed to proceed on
behalf of the Corporation and to take all such steps as are deemed  necessary or
appropriate, with the advice and assistance of counsel, to cause the Corporation
to take all such  action  referred  to herein  and to  perform  its  obligations
incident to the registration, listing and sale of the Shares; and

<PAGE>

         FURTHER  RESOLVED,  that the  authorized  officers be, and each of them
hereby is,  authorized,  empowered  and directed on behalf of and in the name of
the  Corporation,  to take or cause to be taken all such further  actions and to
execute and  deliver or cause to be  executed  and  delivered  all such  further
agreements,   amendments,   documents,    certificates,    reports,   schedules,
applications,  notices,  letters and  undertakings and to incur and pay all such
fees and expenses as in their judgment  shall be necessary,  proper or desirable
to carry into  effect  the  purpose  and intent of any and all of the  foregoing
resolutions, and that all actions heretofore taken by any officer or director of
the  Corporation  in  connection  with  the  transactions  contemplated  by  the
agreements  described herein are hereby approved,  ratified and confirmed in all
respects.

IN WITNESS  WHEREOF,  the Board of Directors  has executed  and  delivered  this
Consent effective as of __________, 2007.

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

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

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

being all of the directors of XsunX, Inc.

<PAGE>

                                    EXHIBIT D

                         FORM OF SECRETARY'S CERTIFICATE

         This  Secretary's   Certificate   ("Certificate")  is  being  delivered
pursuant to Section 7(k) of that certain Common Stock Purchase  Agreement  dated
as of __________,  ("Common Stock  Purchase  Agreement"),  by and between XsunX,
Inc., a Colorado  corporation  (the  "Company")  and Fusion Capital Fund II, LLC
(the "Buyer"),  pursuant to which the Company may sell to the Buyer up to Twenty
One Million Dollars  ($21,000,000)  of the Company's  Common Stock, no par value
(the "Common Stock"). Terms used herein and not otherwise defined shall have the
meanings ascribed to them in the Common Stock Purchase Agreement.

         The  undersigned,   ____________,  Secretary  of  the  Company,  hereby
certifies as follows:

                  1. I am the  Secretary of the Company and make the  statements
         contained in this Secretary's Certificate.

                  2.  Attached  hereto  as  Exhibit  A and  Exhibit  B are true,
         correct and complete  copies of the  Company's  bylaws  ("Bylaws")  and
         Certificate  of  Incorporation  ("Articles"),  in each case, as amended
         through the date  hereof,  and no action has been taken by the Company,
         its directors, officers or shareholders, in contemplation of the filing
         of any  further  amendment  relating  to or  affecting  the  Bylaws  or
         Articles.

                  3. Attached hereto as Exhibit C are true, correct and complete
         copies of the resolutions duly adopted by the Board of Directors of the
         Company  on  _____________,  at which a quorum was  present  and acting
         throughout.  Such  resolutions  have  not  been  amended,  modified  or
         rescinded and remain in full force and effect and such  resolutions are
         the only  resolutions  adopted by the Company's Board of Directors,  or
         any committee  thereof,  or the shareholders of the Company relating to
         or affecting (i) the entering into and  performance of the Common Stock
         Purchase Agreement, or the issuance,  offering and sale of the Purchase
         Shares,   the  Warrants  and  the  Warrant  Shares  and  (ii)  and  the
         performance  of the  Company of its  obligation  under the  Transaction
         Documents as contemplated therein.

                  4. As of the  date hereof, the authorized, issued and reserved
         capital stock of the Company is as set forth on Exhibit D hereto.

         IN WITNESS WHEREOF, I have hereunder signed my name on this ___ day of
         ____________.

                                                      -------------------------
                                                            Secretary

The  undersigned as ___________ of __________,  a ________  corporation,  hereby
certifies that ____________ is the duly elected, appointed, qualified and acting
Secretary of _________,  and that the signature  appearing  above is his genuine
signature.

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

<PAGE>

                                    EXHIBIT E

          FORM OF LETTER TO THE TRANSFER AGENT FOR THE ISSUANCE OF THE
            COMMITMENTS SHARES AT SIGNING OF THE PURCHASE AGREEMENT

                              [COMPANY LETTERHEAD]

[DATE]

[TRANSFER AGENT]
------------------
------------------
------------------

Re: Issuance of Common Shares to Fusion Capital Fund II, LLC

Dear ________,

On behalf of XsunX, Inc., (the "Company"), you are hereby instructed to issue as
soon as  possible  6,833,332  shares of our  common  stock in the name of Fusion
Capital Fund II, LLC. The share certificate  should be dated [DATE OF THE COMMON
STOCK  PURCHASE  AGREEMENT].  I have  included  a true  and  correct  copy  of a
unanimous  written  consent  executed  by all of the  members  of the  Board  of
Directors of the Company  adopting  resolutions  approving the issuance of these
shares.  The shares should be issued  subject only to the following  restrictive
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 REGISTRATION STATEMENT FOR THE SECURITIES UNDER
         THE SECURITIES ACT OF 1933, AS AMENDED,  OR APPLICABLE STATE SECURITIES
         LAWS, UNLESS SOLD PURSUANT TO: (1) RULE 144 UNDER THE SECURITIES ACT OF
         1933, AS AMENDED, OR (2) AN OPINION OF HOLDER'S COUNSEL, IN A CUSTOMARY
         FORM,  THAT  REGISTRATION  IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE
         STATE SECURITIES LAWS.

<PAGE>

The share  certificate  should be sent as soon as possible via overnight mail to
the following address:

                           Fusion Capital Fund II, LLC
                           222 Merchandise Mart Plaza, Suite 9-112
                           Chicago, IL 60654
                           Attention: Steven Martin

Thank you very much for your help.  Please call me at ______________ if you have
any questions or need anything further.

XsunX, Inc.

BY:_____________________________
         [name]
         [title]

<PAGE>

                                    EXHIBIT F

                                 FORM OF WARRANT

Attached hereto.

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