XZERES WIND CORP.
INCENTIVE STOCK OPTION AGREEMENT

THIS OPTION AGREEMENT (this "Agreement") is made and entered into this 25th day
of August, 2010, by and between XZERES WIND CORP., a Nevada corporation (the
"Company"), and FRANK GRECO (the "Optionee"). Capitalized terms not otherwise
defined herein shall have the meaning ascribed to such terms in the 2010 STOCK
OPTION PLAN OF XZERES WIND CORP. (the "Plan").  The Plan, as amended from time
to time, and all of its terms, are hereby incorporated herein by reference.  All
capitalized terms used herein not otherwise defined herein shall have the
respective meanings assigned to such terms in the Plan.

W I T N E S S E T H:

WHEREAS, the Company has adopted the Plan, which permits the issuance of stock
options for the purchase of shares of the common stock of the Company (the
"Shares"); and

WHEREAS, the Company and Optionee executed an Employment Agreement (the “Initial
Employment Agreement”) dated as of July 1, 2010 pursuant to which the Optionee
was employed by the Company and was to be granted certain stock options; and

WHEREAS, in connection with the Optionee’s appointment as President and Chief
Executive Officer of the Company, the Initial Employment Agreement is being
superseded by a new employment agreement, and the Company and Optionee desire to
set forth the stock options issued to the Optionee pursuant to the Initial
Employment Agreement which the Optionee may exercise pursuant to the terms of
the Plan;

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be legally bound
hereby, agree as follows:

1.           Grant of Option. The Company hereby grants to the Optionee as of
August 23, 2010 (the “Grant Date”) the right and option (the "Option") to
purchase 20,000 Shares, in whole or in part (the "Option Stock"), at an exercise
price of One and 25/100 ($1.25) Dollars per Share, on the terms and conditions
set forth in this Agreement and subject to all provisions of the Plan. The
Optionee hereby accepts the Option Stock in full satisfaction of any obligations
of the Company to issue stock options under the Initial Employment
Agreement.  It is intended that the Option shall be an Incentive Stock Option as
defined in Section 422 of the Internal Revenue Code of 1986, as amended from
time to time (the “Code”).
 
2.           Exercise of Option. Except as provided herein and subject to such
other exceptions as may be determined by the Plan Administrator in its
discretion, this Option shall become vested and exercisable as of the Grant
Date.
 
 

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3.           Manner of Exercise. The Option may be exercised in whole or in part
any time within the period permitted hereunder for the exercise of the Option,
with respect to whole Shares only, in the manner set forth in the Plan with
payment to be made in the manner set forth in the Plan.  The Optionee
acknowledges that if he engages in a stock for stock exercise with Shares which
are subject to Section 422(a)(i) of the Code, the Optionee may incur adverse
federal income tax consequences.  The Optionee assumes the obligation to obtain
appropriate independent tax advice prior to making any stock for stock exercise.

4.           Termination of Option. The Option will expire with respect to any
then unexercised portion thereof, at the times set forth in the Plan.

5.           No Right to Continued Employment. The grant of the Option shall not
be construed as giving Optionee the right to be retained in the employ of the
Company, and the Company may, in accordance with the terms of the employment
agreement between the Company and the Optionee, dismiss Optionee from
employment, free from any liability or any claim under the Plan.

6.           Adjustment to Option Stock. The number of Shares subject to this
Option and the price per share of such Shares may be adjusted by the Plan
Administrator from time to time pursuant to the Plan.

7.           Limited Transferability. This Option shall not be transferable by
Optionee except as permitted by the Plan.

 
8.           Plan Governs. The Optionee hereby acknowledges receipt of a copy of
the Plan and agrees to be bound by all the terms and provisions thereof. The
terms of this Agreement are governed by the terms of the Plan, and in the case
of any inconsistency between the terms of this Agreement and the terms of the
Plan, the terms of the Plan shall govern.
 
9.           Notice of Disposition.  The Optionee shall notify the Company when
making any disposition of the Shares acquired upon exercise of this Option,
whether by sale, gift or otherwise.
 
10.    Payment of Taxes. If at the time this Option is exercised the Plan
Administrator determines that under applicable law and regulations the Company
could be liable for withholding of any federal and state tax with respect to a
disposition of any Shares acquired upon exercise of the Option, Optionee shall
pay to the Company, or make arrangements satisfactory to the Plan Administrator
regarding payment of, any federal, state, or local taxes of any kind required by
law to be withheld with respect to such amount.

 
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11.    Excessive Shares. In the event that the number of Shares subject to this
Option exceeds any maximum established under the Code for incentive stock
options that may be granted to the Optionee, this Option shall be considered a
non-qualified option for purposes of the Code to the extent of such excess.

12.        Amendment. This Option may be amended as provided in the Plan.

13.        Severability. If any provision of this Agreement is, or becomes, or
is deemed to be invalid, illegal, or unenforceable in any jurisdiction, or would
disqualify the Plan under any laws deemed applicable by the Plan Administrator,
such provision shall be construed or deemed amended to conform to the applicable
laws, or if it cannot be construed or deemed amended without, in the
determination of the Plan Administrator, materially altering the intent of the
Plan, such provision shall be stricken as to such jurisdiction and the remainder
of the Plan shall remain in full force and effect.

14.        Notices. All notices required to be given under this Option shall be
deemed to be received if delivered or mailed as provided for herein to the
parties at the following addresses, or to such other address as either party may
provide in writing from time to time.

To the Company:        1500 SW First Avenue, Suite 10
           Portland, Oregon 97201

To the Optionee:           The address then maintained with respect to
the Optionee in the Company's records.

15.           Governing Law. The validity, construction and effect of this
Agreement shall be determined in accordance with the laws of the State of Nevada
without giving effect to conflicts of laws principles.
 
16.           Resolution of Disputes. Any dispute or disagreement which may
arise under, or as a result of, or in any way related to, the interpretation,
construction or application of this Agreement shall be determined by the Plan
Administrator. Any determination made hereunder shall be final, binding and
conclusive on the Optionee and the Company for all purposes.
 
 
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17.           Successors in Interest. This Agreement shall insure to the benefit
of and be binding upon any successor to the Company. This Agreement shall inure
to the benefit of the Optionee's legal representative and assignees. All
obligations imposed upon the Optionee and all rights granted to the Company
under this Agreement shall be binding upon the Optionee's heirs, executors,
administrator, successors and assignees.

IN WITNESS WHEREOF, the parties have caused this Incentive Stock Option
Agreement to be duly executed effective as of the day and year first above
written.

                                                                                     
XZERES WIND CORP.
 
By:  /s/ David Baker
                      DAVID BAKER, Chairman
 
 
Optionee:
 
 /s/ Frank Greco
FRANK GRECO