EMPLOYMENT AGREEMENT

This Employment Agreement is entered this 9th day of October, 2012, by and
between Sunpeaks Ventures, Inc., a Nevada corporation (the “Employer”), and
Mackie Barch, an individual, hereinafter referred to as “Employee,” in
consideration of the mutual promises made herein, agree as follows:

ARTICLE 1.  TERM OF EMPLOYMENT

Section 1.1.

Specified Period.  The Employment Term shall commence on the date above written,
and shall terminate on the third anniversary thereof, unless earlier terminated
in accordance with Article 7, hereof.

Section 1.2.

Automatic Renewal.  This Agreement shall be renewed automatically for succeeding
terms of one (1) year each, unless either party gives notice to the other at
least ninety (90) days prior to the expiration of any term of his or its
intention not to renew.  These dates shall be calendared.

Section 1.3.

“Employment Term” Defined.  As used herein, the phrase “Employment Term” refers
to the entire period of employment of Employee by Employer hereunder, whether
for the periods provided above, or whether terminated earlier as hereinafter
provided or extended by mutual agreement between Employer and Employee.

Section 1.4.

Annual Review.  Employer’s Board of Directors will grant Employee an annual
review.  

ARTICLE 2.  DUTIES AND OBLIGATIONS OF EMPLOYEE

Section 2.1.

General Duties.  Employee shall serve as the Chief Executive Officer and
Chairman of the Board of Sunpeaks Ventures, Inc.  In that capacity, Employee
shall do and perform all services, acts, or things necessary or advisable to
manage and conduct the business of Employer, including the hiring and firing of
all employees other than the officers of Employer, subject at all times to the
policies set by Employer’s Board of Directors, and to the consent of the Board
when required by the terms of this contract.

Section 2.2.

Matters Requiring Consent of the Board of Directors.  Employee shall not,
without specific written approval of the Employer’s Board of Directors, do or
contract to do any of the following:

(1)

Bind the Employer to any contract or agreement outside the Employer’s ordinary
course of business that could cause the Employer to expend in excess of $5,000;
or

(2)

Bind the Employer to a liquidation event, such as liquidation, dissolution or
winding up of the Employer, whether voluntary or involuntary;

(3)

Bind the Employer to a sale of all or substantially all of the assets of the
Employer;

(4)

Bind the Employer to a transaction that would result in a change of the control
of the Employer;

(5)

Guaranty any debt or obligation in the name of the Employer;

(6)

Obligate the Employer for any amount outside the ordinary course of business in
excess of $10,000; or

(7)

Any other matter prohibited by the Employer’s written practices and policies
that have been distributed to the Employer’s employees.

Section 2.3.

Devotion to Employer’s Business.  

(a)

Subject to the exceptions set forth herein, Employee shall devote the requisite
levels of his time, ability, and attention to the business of Employer during
the term of his employment necessary to effectively and efficiently execute all
job responsibilities set forth in Section 2.1.  Employee may devote time and
attention to other activities that do not compete with Employer or interfere
with Employee’s obligations, duties and responsibilities to Employer hereunder.

(b)

During Employee’s employment with Employer, Employee shall not engage in any
other business duties or pursuits whatsoever, or directly or indirectly render
any services of a business, commercial, or professional nature to any other
person or organization, whether for compensation or otherwise, that competes or
could compete with Employer or interfere with Employee’s obligations, duties and
responsibilities to Employer hereunder, without the prior written consent of
Employer’s Board of Directors.  However, the expenditure of reasonable amounts
of time for educational, charitable, or professional activities shall not be
deemed a breach of this agreement if those activities do not materially
interfere with the services required under this agreement and shall not require
the prior unanimous written consent of Employer’s Board of Directors.

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(c)

This agreement shall not be interpreted to prohibit Employee from making passive
personal investments or conducting private business affairs if those activities
do not interfere or conflict with the services required under this agreement.
However, during the term of Employee’s employment, Employee shall not directly
or indirectly acquire, hold, or retain any interest in any business competing
with or similar in nature to the business of Employer.

Section 2.4.

Competitive Activities.  While Employee is an employee of Employer, and for a
period of six (6) months after termination (if the Employee is terminated for
cause by the Employer, as defined in Section  7.3, or the Employee terminates
for a reason other than a resignation for Good Reason as set forth in Section
7.5), Employee shall not, directly or indirectly, either as an employee,
employer, consultant, agent, principal partner, stockholder, corporate officer,
director, or in any other individual or representative capacity, engage or
participate in any business that is in the industry as Employer.  In the event
Employee is terminated by Employer without cause then the provisions of this
Section 2.4 will not be applicable.  Employee further acknowledges that this
non-compete provision itself survives the termination of this Agreement.

Section 2.5.

Uniqueness of Employee’s Services.  Employee hereby represents and agrees that
the services to be performed by Employee under this agreement are of a special,
unique, unusual, extraordinary and intellectual character that gives them a
peculiar value, the loss of which cannot be reasonably or adequately compensated
in damages in an action at law.  Employee therefore expressly agrees that
Employer, in addition to any other rights or remedies that Employer may posses,
shall be entitled to injunctive and other equitable relief to prevent or remedy
a breach of this contract by Employee.  The parties are aware that under
Maryland law specific performance may not be available to enforce all breaches
of this agreement but acknowledge that for all such material breaches of this
agreement the non-breaching party would be harmed and both parties agree that
this harm will be recoverable through monetary damages.

Section 2.6.

Trade Secrets.  

(a)

The parties acknowledge and agree that during Employee’s employment and in the
course of the discharge of his duties hereunder, Employee shall have access to
and become acquainted with information concerning the operation and processes of
Employer, including without limitation, financial, personnel, sales,
intellectual property, and other information that is owned by Employer’s
business, and that such information constitutes Employer’s trade secrets (“Trade
Secrets”).

(b)

Employee specifically agrees that he shall not misuse, misappropriate, or
disclose any such Trade Secrets, directly or indirectly to any other person or
use them in any way, either during the term of this agreement or at any other
time thereafter, except as is required in the course of his employment
hereunder.

(c)

Employee acknowledges and agrees that the sale or unauthorized use or disclosure
of any of Employer’s Trade Secrets obtained by Employee during the course of his
employment with Employer, including information concerning Employer’s current or
any future and proposed work, services, or products, the facts that any such
work production, as well as any descriptions thereof, would constitute unfair
trade practices and unauthorized use of the Employer’s Trade Secrets, whether
such information is used during the term of Employee’s employment or at any
other time thereafter.

(d)

Employee further agrees that all files, records, documents, drawings,
specifications, equipment, and similar items relating to Employer’s business,
whether prepared by Employee or others, are also considered Trade Secrets and
that they are and shall remain exclusively the property of Employer and that
they shall be removed from the premises of Employer only with the express prior
written consent of Employer.  Employee shall not solicit or hire any client(s)
or employee(s) of Employer for six (6) months following termination of
employment.  Trade Secrets do not include: (1) information that was in the
public domain at the time of disclosure; or (2) information that subsequently
becomes part of public knowledge or literature through a deliberate act of
Employer or Employee as of the date of its becoming public.

ARTICLE 3.  OBLIGATIONS OF EMPLOYER

Section 3.1.

General Description.  Employer shall provide Employee with the compensation,
incentives, benefits, and business expense reimbursement specified elsewhere in
this agreement.

Section 3.2.

Office and Staff.  Employer shall provide Employee with an office, office
equipment, supplies, and other facilities and services, suitable to Employee’s
position and adequate for the performance of his duties.

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ARTICLE 4.  COMPENSATION OF EMPLOYEE

Section 4.1.

Annual Salary.  

(a)

As compensation for the services to be rendered hereunder, Employee shall
receive an annual salary at the rate of $170,000 per year, payable in
twenty-four (24) equal payments, with a payment not less than twice each month
(or otherwise as agreed by the parties) during Employee’s employment.  

(b)

Employee shall not be eligible for automatic salary increases during the initial
three (3) year term of this Agreement, but will be available for salary
increases at the sole discretion of the Employer’s Board of Directors.

Section 4.2.

Bonus.  Employer does not currently have a bonus plan in place, and there is
currently no bonus plan in place for Employee, but Employee may be paid bonuses
at the sole discretion of the Employer’s Board of Directors.

Section 4.3

Tax Withholding.  Employer shall have the right to deduct or withhold from the
compensation due to Employee hereunder any and all sums required for federal
income and Social Security taxes and all state or local taxes now applicable or
that may be enacted and become applicable in the future.

ARTICLE 5.  EMPLOYEE BENEFITS

Section 5.1.

Annual Vacation.  Employee shall be entitled to twenty five (25) days vacation
time each year, based on the Employer’s fiscal year, without loss of
compensation.  In the event that Employee is unable for any reason to take the
total amount of vacation time authorized herein during any year, he may accrue
that time and add it to vacation time for any following year, provided, however,
that at no time will Employee be entitled to more than thirty (30) vacation days
total, and that Employee will cease to earn additional vacation days at any and
all times when he has accrued such maximum of thirty (30) vacation days.

Section 5.2

Sick Leave.  Employee shall be entitled to twenty five (25) days per year as
sick leave with full pay.  There shall be no accrual of unused sick leave.

Section 5.3

Medical Coverage.  Employer agrees to provide Employee & Family coverage for
medical, major medical, and hospital insurance, in accordance with Employer’s
current plan and benefits as in effect immediately prior to the date hereof for
a period of at least one year, after which time the Employer may change the
coverage in its sole discretion.  All or a portion of the cost of such coverage
will be the responsibility of Employer, in accordance with the Employer’s
standard medical benefits coverage offered to its employees.  

Section 5.4

Retirement Plan.  To the extent that the Employer offers a retirement plan, such
as a 401K plan, to its employees, Employee will be eligible to participate in
such a plan, in accordance with what the Employer’s offers to its other
employees.  

ARTICLE 6.  BUSINESS EXPENSES

Section 6.1.

Reimbursement of Other Business Expenses.  

(a)

Employer shall promptly reimburse Employee for all other reasonable business
expenses incurred by Employee in connection with the business of Employer.

(b)

Each such expenditure shall be reimbursable only if it is of a nature qualifying
it as a proper deduction on the federal and state income tax return of Employer.

(c)

Each such expenditure shall be reimbursable only if Employee furnishes to
Employer adequate records and other documentary evidence required by federal and
state statutes and regulations issued by the appropriate taxing authorities for
the substantiation of each such expenditure as an income tax deduction.

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ARTICLE 7.  TERMINATION OF EMPLOYMENT

Section 7.1

Termination Upon Death.  Employee’s employment hereunder shall terminate upon
his death, in which event the Employer shall pay to such person as the Employee
shall have designated in a written notice filed with the Employer, or if no such
person shall have been designated to his estate, all salary, amounts due under
benefit plans and profit sharing plans, and reimbursement of business expenses
through the date of termination.

Section 7.2.

Termination Upon Disability.  If, as a result of a permanent mental or physical
disability, Employee shall have been absent from his duties hereunder on a
full-time basis for three (3) consecutive months, (“Disability”) and, within
thirty (30) days after the Employer notifies Employee in writing that it intends
to replace him, (which notice can be given at the end of the second month during
such three-month period), Employee shall not have returned to the performance of
his duties on a full-time basis, the Employer shall be entitled to terminate
Employee’s employment.  In addition, Employee shall, upon his Disability, have
the right to terminate his employment with Employer.  If such employment is
terminated (whether by the Employer or Employee) as a result of Employee’s
Disability, then Employer shall pay to Employee all salary, amounts due under
benefit plans and profit sharing plans, and reimbursement of business expenses,
through the date of termination.

Section 7.3.

Termination for Cause.  Employer shall be entitled to terminate Employee’s
employment for Cause, in which event Employee shall be entitled to all salary,
amounts due under benefit plans and profit sharing plans, and reimbursement of
business expenses, only through the date of termination.  For purposes of this
agreement, “Cause” shall mean (i) the conviction of Employee of a felony, (ii)
the commission by Employee of an act of fraud or embezzlement involving assets
of the Employer or its customers, suppliers or affiliates, (iii) a willful
breach or habitual neglect of Employee’s duties which he is required to perform
under the terms of his employment (See Section 2.1, above), (iv) refusal to
timely produce any and all documentation related to the Employer’s business to
the Board of Directors or any committee appointed by the Board of Directors,
upon request therefrom, or (v) gross misconduct or gross negligence in
connection with the business of the Employer or an affiliate which has a
material adverse effect on the Employer and any subsidiaries.  Notwithstanding
the foregoing, Employee shall not be deemed to have been terminated for Cause
unless and until there shall have been delivered to Employee a notice of
termination which specifies the grounds for termination and a statement of
supporting facts.  

Section 7.4.

Termination without Cause. Subject to the provisions of Section 7.6 of this
Agreement, Employee’s employment hereunder may be terminated by Employer without
Cause at any time and without prior notice to Employee.

Section 7.5

Resignation for Good Reason.  Employee may resign his employment with Employee
at any time, provided that such resignation shall be considered to be for Good
Reason for purposes of this agreement if, but only if, one or more of the
following conditions occur and such condition(s) is (are) not fully corrected
within ten (10) business days after written notice from Employee to Employer:

(i)

the assignment to Employee of any duties or responsibilities materially
inconsistent with the job description outlined in Section 2.1, above; or

(ii)

the failure by Employer either to pay Employee any salary due hereunder within
ten (10) business days of the date that such payment is due and/or to provide
any employment benefits as required by this agreement.

Section 7.6.

Payments upon Termination without Cause or Resignation for Good Reason.  In the
event that Employee’s employment with Employer is terminated by Employer without
Cause pursuant to Section 7.4, above, or by Employee as the result of a
resignation for Good Reason pursuant to Section 7.5, above, then Employee shall
be entitled to receive payment of one (1) year of Employee’s base salary in
effect as of the date of such termination without Cause or resignation for Good
Reason, said payments to be made in accordance with the normal payroll cycle of
Employer and subject to any required tax withholdings and deductions.  In the
event that Employee breaches any of the covenants set forth in Article 2, above,
Employer shall have no further obligation to provide, and Employee shall have no
further right to receive, any payments or benefits pursuant to this Section 7.6.
 

Section 7.7.

Return of Documents.  Upon the termination of Employee's employment with
Employer for any reason, including without limitation termination by the
Employer for Cause or for Good Reason, Employee shall promptly deliver to
Employer all correspondence, manuals, orders, letters, notes, notebooks,
reports, programs, proposals, loan documents, agreements, and any documents and
copies concerning Employer’s customers or concerning products or processes used
by Employer and, without limiting the foregoing, will promptly deliver to the
Company any and all other documents or material containing or constituting Trade
Secrets.

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ARTICLE 8.  GENERAL PROVISIONS

Section 8.1.

Notices.  Any notices to be given hereunder by either party to the other shall
be in writing and may be transmitted by personal delivery or facsimile or
overnight mail.  Notices shall be addressed to the parties at the addresses
below.  Such notice or communication shall be deemed to have been given or made,
as of the date of delivery, as evidenced by a signed declaration under penalty
of perjury in the event of personal delivery, as evidenced by a facsimile
confirmation sheet in the event of facsimile delivery, or as evidenced by prove
of overnight delivery in the event of delivery by overnight courier.

If to Employer:

Sunpeaks Ventures, Inc.

9337 Fraser Avenue

Silver Spring, MD 20910

Facsimile:                                              

with a copy to:

The Lebrecht Group, APLC

9900 Research Drive

Irvine, CA  92618

Attn:  Craig V. Butler, Esq.

Facsimile:  (949) 635-1244

If to Employee:

 

Mackie Barch

[________________]

[________________]

Facsimile:                                                        

Section 8.2.

Arbitration.  

(a)

Any controversy between Employer and Employee involving the construction or
application of any of the terms, provisions, or conditions of this agreement
shall on written request of either party served on the other be submitted to
arbitration.  

(b)

Employer and Employee shall each appoint one person to hear and determine the
dispute.  If the two (2) persons so appointed are unable to agree, then those
persons shall select a third impartial arbitrator whose decision shall be final
and conclusive upon both parties.

(c)

The cost of arbitration shall be borne by the losing party or in such
proportions as the arbitrators decide.

Section 8.3.

Attorney’s Fees and Costs.  If any action at law or in equity is necessary to
enforce or interpret the terms of this agreement, the prevailing party shall be
entitled to reasonable attorney’s fees, costs, and necessary disbursements in
addition to any other relief to which that party may be entitled.  This
provision shall be construed as applicable to the entire contract.

Section 8.4.

Entire Agreement.  This agreement supersedes any and all other agreements,
either oral or in writing, between the parties hereto with respect to the
employment of Employee by Employer and contains all of the covenants and
agreements between the parties with respect to that employment in any manner
whatsoever.  Each party to this agreement acknowledges that no representation,
inducements, promises, or agreements, orally or otherwise, have been made by any
party, or anyone acting on behalf of any party, which are not embodied herein,
and that no other agreement, statement, or promise not contained in this
agreement shall be valid or binding on either party.

Section 8.5.

Modifications.  Any modification of this agreement will be effective only if it
is in writing and signed by the party to be charged.

Section 8.6.

Effect of Waiver.  The failure of either party to insist on strict compliance
with any of the terms, covenants, or conditions of this agreement by the other
party shall not be deemed a waiver or relinquishment of any right or power at
any one time or times be deemed a waiver or relinquishment of that right or
power for all or any other times.

Section 8.7.

Partial Invalidity.  If any provision in this agreement is held by a court of
competent jurisdiction to be invalid, void, or unenforceable, the remaining
provisions shall nevertheless continue in full force without being impaired or
invalidated in any way.

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Section 8.8.

Law Governing Agreement/Venue.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Maryland.  Any legal
action, suit, arbitration, or proceeding arising from or relating to this
Agreement shall be brought and maintained in the appropriate court or arbitrator
located in and with jurisdiction over [___________] County, Maryland and the
parties hereby submit to the jurisdiction thereof.

Section 8.9.

Understanding Agreement.  Employee has read and fully understands the points
listed above and has agreed to adhere to all sections as presented.

Section 8.10.

Assignment.  This Agreement, and the Employee’s rights and obligations
hereunder, may not be assigned by the Employee.

Section 8.11.

Amendment.  This Agreement may be amended, modified, superseded, cancelled,
renewed or extended and the terms or covenants hereof may be waived, only by a
written instrument executed by both parties as hereto, as in the case of a
waiver, by the party waiving compliance.

[signature page immediately follows]

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IN WITNESS WHEREOF, the parties hereto, by their duly authorized officers or
other authorized signatory, have executed this Amendment as of the date first
above written.  This agreement may be signed in counterparts and facsimile
signatures are treated as original signatures.

“Employer”

“Employee”

Sunpeaks Ventures, Inc.,

a Nevada corporation

Mackie Barch,

an individual

 

 

 

 

 /s/ Mackie Barch                                              _

 /s/ Mackie Barch                                              _

By:  Mackie Barch

By:  Mackie Barch

Its:  Chief Executive Officer

 

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