Document:

AMENDED
AND RESTATED COLLATERAL AGREEMENT

 

THIS
AMENDED AND RESTATED COLLATERAL AGREEMENT (this “Amended Collateral Agreement”), dated as of March , 2013,
by and among XZERES Corp., a Nevada corporation (the “Borrower”), XZERES Energy
Services Corp., a Nevada corporation, XZERES Wind Europe Limited., a corporation organized
under the laws of the Republic of Ireland, and any and all Additional Grantors who may become party to this Amended Collateral
Agreement (the Borrower, such other named entities, and such Additional Grantors are hereinafter referred to each as a “Grantor”
and collectively as the “Grantors”),
and Hanover Holdings I, LLC (the “Secured
Party”) as Lender under the Revolving Credit Agreement dated as of August 1, 2012 (as same may be amended, modified,
supplemented and/or restated from time to time, the “Loan
Agreement”) by and between the Borrower and the Secured Party.

 

STATEMENT
OF PURPOSE

 

Pursuant
to the Loan Agreement, the Secured Party made Loans to the Borrower in the aggregate principal amount of $1,500,000, upon the
terms and subject to the conditions set forth therein.

The
Borrower acknowledges and agrees that it is in default under the Loan Agreement and the other Loan Documents; it has received
due notice of such events of defaults; such events of default remain uncured after all the applicable cure periods have run; it
has not defenses to same; and the Secured Party is entitled to acceleration of all sums due under the Loan Documents and all such
sums are immediately due and payable without any claim, defense, or setoff.

The
Secured Party, without waiving any rights under any of the Loan Documents or under Applicable Law or in equity, has demanded that
the Borrower and each Grantor provide additional collateral for their obligations under the Loan Agreement and the other Loan
Documents, and Borrower, and each Grantor so agrees upon the terms and subject to the conditions as hereinafter provided in this
Amended Agreement.

It
is a condition precedent to the Secured Party agreeing to forbear the immediate exercise of its rights and remedies under the
Loan Agreement and the other Loan Documents that the Grantors shall have executed and delivered this Amended Collateral Agreement
to the Secured Party. Upon the execution and delivery of this Amended Collateral Agreement, that certain original collateral agreement
dated as of August 1, 2012 (the “Original Collateral Agreement”) among the parties hereto, is hereby terminated,
void, and of no further force or effect except as to those provisions setting forth the priority of the security interests and
liens described therein.

NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto,
and to induce the Secured Party to enter into the Loan Agreement and make the Loans to the Borrower thereunder, each Grantor hereby
agrees with the Secured Party, as follows:

 

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Article
I

DEFINED TERMS

Section
1.1.          Terms
Defined in the Uniform Commercial Code.

(a)               
The following terms when used in this Amended Collateral Agreement shall have the meanings assigned to them in the UCC (as defined
in Section 1.2 below) as in effect
from time to time: “Account”,
“Account Debtor”, “Authenticate”,
, “Chattel Paper”;, “Deposit
Account”, “Documents”,
“Electronic Chattel Paper”,
“Equipment”, “Fixture”,
“General Intangible”, “Instrument”,
“Inventory”, “, “Proceeds”,
“Record”, “Registered
Organization”, and “Tangible
Chattel Paper”.

(b)              
Terms defined in the UCC and not otherwise defined herein or in the Loan Agreement shall have the meaning assigned in the UCC
as in effect from time to time.

Section
1.2.          Definitions.
The following terms when used in this Amended Collateral Agreement shall have the meanings assigned to them below:

“Additional
Grantor” means each Subsidiary of the Borrower which hereafter becomes a Grantor pursuant to Section
7.15 hereof and Section 5.11
of the Loan Agreement.

“Agreement”
means this Collateral Agreement, as amended, modified, supplemented and/or restated from time to time.

“Applicable
Insolvency Laws” means all Applicable Laws governing bankruptcy, reorganization, arrangement, adjustment of debts,
relief of debtors, dissolution, insolvency, fraudulent transfers or conveyances or other similar laws (including, without limitation,
11 U.S.C. Sections 547, 548 and 550 and other “avoidance” provisions of Title 11 of the United States Code, as
amended or supplemented).

“Collateral”
has the meaning assigned thereto in Section
2.1.

“Control”
means the manner in which “control” is achieved under the UCC with respect to any Collateral for which the UCC specifies
a method of achieving “control”.

“Effective
Endorsement and Assignment” means, with respect to any specific type of Collateral, all such endorsements, assignments
and other instruments of transfer reasonably requested by the Secured Party with respect to the Security Interest granted in such
Collateral, and in each case, in form and substance satisfactory to the Secured Party.

“Excess
Collateral” has the meaning assigned thereto in Section 4.6(c).

“Grantors”
has the meaning set forth in the preamble of this Amended Collateral Agreement.

“Loan
Agreement” has the meaning assigned thereto in the preamble of this Amended Collateral Agreement.

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“Obligations”
means, with respect to the Borrower, the meaning assigned to such term in the Loan Agreement and with respect to all Grantors,
all liabilities and obligations of the Grantors hereunder.

“Perfection
Certificate” means the perfection certificate dated as of the date hereof, substantially in the form of Exhibit
A attached hereto, and otherwise in form and substance satisfactory to the Secured Party, and duly certified by an
officer, partner or member, as applicable, of each Grantor.

“Secured
Party” has the meaning assigned thereto in the preamble of this Amended Collateral Agreement.

“Security
Interests” means the liens and security interests granted pursuant to Article
II.

“UCC”
means the Uniform Commercial Code as in effect in the State of New York, as amended or modified from time to time.

Section
1.3.          Other
Definitional Provisions. Terms defined in the Loan Agreement and not otherwise defined herein shall have the meanings assigned
thereto in the Loan Agreement. The words “hereof,” “herein”, “hereto” and “hereunder”
and words of similar import when used in this Amended Collateral Agreement shall refer to this Amended Collateral Agreement as
a whole and not to any particular provision of this Amended Collateral Agreement, and Section and Schedule references are to this
Amended Collateral Agreement unless otherwise specified. The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms. Where the context requires, terms relating to the Collateral or any part
thereof, when used in relation to a Grantor, shall refer to such Grantor’s Collateral or the relevant part thereof. The
word “including” and words of similar import when used in this Amended Collateral Agreement shall mean “including,
without limitation,” unless otherwise specified.

.
As a material inducement for Secured Party to enter into this Amended Collateral Agreement and the other amended and restated
Loan Documents, each Grantor hereby reaffirms and reconfirms each representation, warranty and covenant contained in the Loan
Documents, as each of them may be amended and/or restated from time to time.

 

Article
II

SECURITY INTEREST

Section
2.1.          Grant
of Security Interest.

(a)Each
Grantor hereby grants, pledges and collaterally assigns to the Secured Party a security interest in all of such Grantor’s
right, title and interest in, to, and under any and all purchase orders with VG Energy, Inc. VG Energy, Turbines Direct, Pennine
Wind, Good Life Incorporated, Altair LTD., Tom Edwards (Penrhiwfer Farm), Michael Gilhespy, Robert Procter, Peter Varney, PassiM
Developments, Louise Laughlin, Glyn Gwilym Farm, Church Farm, Hendre Farm, Richard Couzens, Robert Peggie, Ken Howatson, Weston
Farm, John& Nicola Sampson, John Duncan, Sally Kinnear, Martin Sherman, Gurland Farm, Trevilley Farm, Jeffery

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Throup,
Trill Farm, Good Life, JJ & CI Powell, Richard Smith, Pen Glog, Ben Bowerman, Grossman Organic Farms, Interior Exterior, Wind
Energy Systems, JBS Solar, Spakowski, Ideal Energy, Penn Renewables, Kurt Farchild, SGEI, GW Power Solutions, Independent Power,
Wind Turbines of Ohio and any of their respective Affiliates (collectively, the “Purchase Orders”) and the
following property now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time
in the future may acquire any right, title or interest, and wherever located or deemed located whether or not pertaining to the
Purchase Orders (collectively, the “Collateral”),
as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration
or otherwise) of the Obligations:

(i) all Goods;

(ii) work in progress

(iii)
all Inventory;

(iv) all Accounts;

(v)
all cash, prepaid expenses, and currency;

(vi)
all Chattel Paper

(vii)
all Instruments;

(viii)
all Documents;

(ix)
all Equipment;

(x)
all Fixtures;

(xi)
all General Intangibles;

(xii)
all other tangible or intangible property and assets of any Grantor, not otherwise described above;

(xiii)
all books and records pertaining to the Collateral; and

(xiv)
to the extent not otherwise included, all Proceeds and products of any and all of the foregoing and all collateral security
(as now or hereafter defined in the UCC) given by any Person with respect to any of the foregoing.

(b)              
Notwithstanding clause (a) of this Section
2.1, to the extent that, at any time, the grant of a security interest in any contract rights would, notwithstanding Sections
9-407 and 9-408 of the UCC or other applicable law, cause a breach of the subject Contract permitting the conterparty thereto
to terminate such Contract under applicable law, such contract rights shall not at such time be part of the Collateral (but the
proceeds thereof and any supporting obligations therefor shall be part of the Collateral). Each Grantor shall use all commercially
reasonable

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efforts
to obtain any necessary consents or waivers required in order for such Grantor to grant the Security Interests in any affected
Contract.

Section
2.2.          Grantors
Remain Liable. Anything herein to the contrary notwithstanding: (a) each Grantor
shall remain liable under the contracts and agreements included in the Collateral to the extent set forth therein to perform all
of its duties and obligations thereunder to the same extent as if this Amended Agreement had not been executed, (b) the exercise
by Secured Party of any of the rights hereunder shall not release any Grantor from any of its duties or obligations under the
contracts and agreements included in the Collateral, (c) the Secured Party shall have no obligation or liability under the contracts
and agreements included in the Collateral by reason of this Amended Collateral Agreement, nor shall the Secured Party be obligated
to perform any of the obligations or duties of any Grantor thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder, and (d) the Secured Party shall have no liability in contract or tort for any Grantor's acts or omissions.

Each
Grantor shall and hereby does unconditionally guarantee Borrower’s due performance of Borrower’s under the Loan Documents.
Such guarantee is a guarantee of payment and not of collection. For the avoidance of doubt, such Grantor is acting in the capacity
as a surety with respect to Borrower’s obligations under the Loan Documents.

 

Article
III

REPRESENTATIONS AND WARRANTIES 

 

To
induce the Secured Party to enter into the Loan Agreement and to make the Loans to the Borrower thereunder and not to exercise
its remedies thereunder and hereunder, each Grantor hereby represents and warrants to the Secured Party that:

Section
3.1.          Existence.
Each Grantor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation
or formation, has the requisite power and authority to own, lease and operate its properties and to carry on its business as now
being and hereafter proposed to be conducted and is duly qualified and authorized to do business in each jurisdiction in which
the character of its properties or the nature of its business requires such qualification and authorization other than in any
such jurisdiction where failure to so qualify would not reasonably be expected to have a Material Adverse Effect.

Section
3.2.          Authorization
of Agreement; No Conflict. Each Grantor has the right, power and authority and has taken all necessary corporate or other
organizational action to authorize the execution, delivery and performance of, this Amended Collateral Agreement. This Amended
Collateral Agreement has been duly executed and delivered by the duly authorized officers of each Grantor, and this Amended Collateral
Agreement constitutes the legal, valid and binding obligation of the Grantors, enforceable against the Grantors in accordance
with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar state
or federal debtor relief laws from time to time in effect which affect the enforcement of creditors’ rights in general,
and general limitations on the availability of equitable remedies. The execution, delivery and performance by the Grantors of
this Amended Collateral Agreement will not, by the passage of time, the giving of notice or otherwise, violate any material provision
of any Applicable Law or any Contract material to the business of any Grantor and will not result in the creation or imposition
of any Lien, other than the Security Interests, upon or with respect to any property or revenues of any Grantor.

Section
3.3.          Consents.
No approval, consent, exemption, authorization or other action by, or notice to, or filing with, any Governmental Authority or
any other Person is necessary or required in connection with the execution, delivery or performance by, or enforcement against
any Grantor or any Subsidiary of this Amended Collateral Agreement, except filings under the UCC.

Section
3.4.          Perfected
First Priority Liens. The Security Interests granted pursuant to this Amended Collateral Agreement (a) constitute valid
security interests in all of the Collateral in favor of the Secured Party (subject to the intercreditor agreement with Renewable
Power Resources, LLC), as collateral security for the Obligations, enforceable in accordance with the terms hereof against all
creditors of such Grantor and any Persons purporting to purchase any Collateral from such Grantor, and (b) are prior to all
other Liens on the Collateral in existence on the date hereof except to the extent of any priority accorded under Applicable Law
to any Permitted Liens. Upon the filing and acceptance of financing statements in the jurisdiction of formation of the respective
Grantors reflected in the Perfection Certificate the Security Interests will be perfected first priority security interests in
all Collateral in which a security interest can be perfected by means of filing; and upon delivery to the Secured Party of the
certificates representing the Collateral consisting of Certificated Securities, the Security Interests will be perfected first
priority security interests in such Collateral.

Section
3.5.          Title;
No Other Liens. Except for the Security Interests, each Grantor owns each item of the Collateral free and clear of any and
all Liens or claims other than Permitted Liens. No financing statement under the UCC of any state which names a Grantor as debtor
or other public notice with respect to all or any part of the Collateral is on file or of record in any public office, except
such as have been filed in favor of the Secured Party pursuant to this Amended Collateral Agreement or in connection with Permitted
Liens. No Collateral is in the possession or Control of any Person asserting any claim thereto or security interest therein, except
that a bailee, consignee or other Person may have possession of Collateral as contemplated by, and so long as, the applicable
Grantors have complied to the satisfaction of the Secured Party with the applicable provisions of Section 4.

Section
3.6.          State
of Organization; Location of Inventory, Equipment and Fixtures; Other Information.

(a)               
The exact legal name of each Grantor is as set forth in the Perfection Certificate.

(b)              
Each Grantor is a Registered Organization organized under the laws of the jurisdiction identified for such Grantor in the Perfection
Certificate. The taxpayer identification number and Registered Organization number (if any) of each Grantor is as set forth for
such Grantor in the Perfection Certificate.

(c)               
The mailing address, chief place of business, chief executive office and office where each Grantor keeps its books and records
relating to the Accounts, Documents, and

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General
Intangibles in which it has any interest is located at the locations specified for such Grantor in the Perfection Certificate.
No Grantor has any other places of business. No Grantor does business or has done business during the past five years under any
trade name or fictitious business name except as disclosed for such Grantor in the Perfection Certificate. Except as disclosed
in the Perfection Certificate, no Grantor has acquired assets from any Person, other than assets acquired in the ordinary course
of such Grantor's business, during the past five years.

Section
3.7.          Accounts.
Each existing Account constitutes, and each hereafter arising Account will constitute, the legally valid and binding obligation
of the applicable Account Debtor. The amount represented by each Grantor to the Secured Party as owing by each Account Debtor
is, or will be, the correct amount actually and unconditionally owing, except for normal cash discounts and allowances in the
ordinary course of business where applicable. No Account Debtor has any defense, set-off, claim or counterclaim against any Grantor
that can be asserted against the Secured Party, whether in any proceeding to enforce Secured Party’s rights in the Collateral
or otherwise, except defenses, set-offs, claims or counterclaims that are not, in the aggregate, material to the value of the
Accounts. None of the Accounts is, nor will any hereafter arising Account be, evidenced by a promissory note or other Instrument,
other than a check, that has not been pledged and delivered to the Secured Party in accordance with the terms hereof.

Section
3.8.          Chattel
Paper. As of the date hereof, to the Grantors’ Knowledge, no Grantor holds any Chattel Paper.

 

Article
IV

COVENANTS

 

Until
the Obligations shall have been indefeasibly paid in full and the Revolving Credit Commitment has been terminated, unless express
written consent has been obtained from the Lender, the Grantors covenant and agree that:

Section
4.1.          Maintenance
of Perfected Security Interest; Further Information.

(a)               
Each Grantor shall maintain the Security Interest created by this Amended Collateral Agreement as a perfected Security Interests
having at least the priority described in Section 3.4
and shall defend such Security Interest against the claims and demands of all Persons whomsoever.

(b)              
Each Grantor will furnish to the Secured Party from time to time statements and schedules further identifying and describing the
assets and property of such Grantor and such other reports in connection therewith as the Secured Party may reasonably request,
all in reasonable detail.

Section
4.2.          Maintenance
of Insurance.

(a)               
Each Grantor will maintain, with financially sound and reputable companies, insurance policies (i) insuring the Collateral
against loss by fire, explosion, theft, fraud and such other casualties, including business interruption, as may be reasonably
satisfactory to the Secured

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Party
in amounts and with deductibles at least as favorable as those generally maintained by businesses of similar size engaged in similar
activities, and (ii) insuring such Grantor and the Secured Party against liability for hazards, risks and liability to persons
and property relating to the Collateral (including, without limitation, products liability coverage), in amounts and with deductibles
at least as favorable as those generally maintained by businesses of similar size engaged in similar activities, such policies
to be in such form and having such coverage as may be reasonably satisfactory to the Lender.

(b)              
All such insurance (other than workers’ compensation) shall (i) name the Secured Party as loss payee (to the extent
covering risk of loss or damage to tangible property) and as an additional insured as its interests may appear (to the extent
covering any other risk), (ii) provide that no cancellation shall be effective until at least thirty (30) days after receipt
by the Secured Party of written notice thereof, and (iii) be reasonably satisfactory in all other respects to the Secured
Party.

(c)               
Upon the request of the Secured Party, each Grantor shall deliver to the Secured Party periodic information from a reputable insurance
broker with respect to the insurance referred to in this Section
4.2.

Section
4.3.          Changes
in Locations; Changes in Name or Structure. No Grantor will, except upon fifteen (15) days’ prior written notice to
the Secured Party and delivery to the Secured Party of (a) all additional financing statements (executed if necessary for
any particular filing jurisdiction) and other instruments and documents reasonably requested by the Secured Party to maintain
the validity, perfection and priority of the Security Interests, and (b) if applicable, a written supplement to the Perfection
Certificate:

(i)                
change its organizational form or structure, jurisdiction of organization or the location of its chief executive office from that
identified in the Perfection Certificate; or

(ii)              
change its name or identity to such an extent that any financing statement filed by the Secured Party in connection with this
Amended Collateral Agreement would become misleading.

Section
4.4.          Required
Notifications. Each Grantor shall promptly notify the Secured Party, in writing, of: (a) any Lien (other than the Security
Interests or Permitted Liens) on any of the Collateral, or (b) the occurrence of any other event which could reasonably be expected
to have a material adverse effect on the aggregate value of the Collateral or on the Security Interests.

Section
4.5.          Delivery
Covenants. Each Grantor will deliver and pledge to the Secured Party all Tangible Chattel Paper owned or held by such Grantor,
in each case, together with an Effective Endorsement and Assignment and all supporting obligations, as applicable, unless such
delivery and pledge has been waived in writing by the Secured Party.

Section
4.6.          Filing
Covenants. Pursuant to Section 9-509 of the UCC and any other Applicable Law, each Grantor authorizes the Secured Party
to file or record financing statements and other filing or recording documents or instruments with respect to the Collateral without
the signature of such Grantor in such form and in such offices as the Secured Party determines appropriate to perfect the Security
Interests of the Secured Party under this Amended Collateral Agreement. Such financing statements may describe the Collateral
in the same manner as described herein or may contain an indication or description of Collateral that describes such property
in any other manner as the Secured Party may determine, in its sole discretion, is necessary, advisable or prudent to ensure the
perfection of the Security Interest in the Collateral granted herein, including, without limitation, describing such property
as “all assets” or “all personal property.” Further, a photographic or other reproduction of this Amended
Collateral Agreement shall be sufficient as a financing statement or other filing or recording document or instrument for filing
or recording in any jurisdiction. Each Grantor hereby authorizes, ratifies and confirms all financing statements and other filing
or recording documents or instruments filed by Secured Party prior to the date of this Amended Collateral Agreement.

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In
addition to the foregoing, each Grantor shall execute and deliver one or more collateral assignments in such form as Secured Party
may request.

Section
4.7.          Accounts.

(a)               
Other than in the ordinary course of business consistent with its past practice, no Grantor will (i) grant any extension
of the time of payment of any Account, (ii) compromise or settle any Account for less than the full amount thereof, (iii) release,
wholly or partially, any Account Debtor, (iv) allow any credit or discount whatsoever on any Account, or (v) amend,
supplement or modify any Account in any manner that could adversely affect the value thereof.

(b)              
Each Grantor will deliver to the Secured Party a copy of each material demand, notice or document received by such Grantor that
questions or calls into doubt the validity or enforceability of any material Account.

(c)               
The Secured Party shall have the right, upon without prior notice to the Borrower to make test verifications of the Accounts in
any manner and through any medium that it reasonably considers advisable, and each Grantor shall furnish all such assistance and
information as the Secured Party may reasonably require in connection with such test verifications. At any time and from time
to time, upon the Secured Party’s reasonable request and at the expense of the relevant Grantor, such Grantor shall cause
independent accountants or other Persons reasonably satisfactory to the Secured Party to furnish to the Secured Party reports
showing reconciliations, aging and test verifications of, and trial balances for, the Accounts.

(d)              
Upon request of the Secured Party at any time each Grantor shall direct is Account Debtors to remit all payments on Accounts owing
to such Grantor from time to time to a lockbox maintained in the name or under the Control of the Secured Party and swept on a
regular basis into a Deposit Account at a Controlled Depositary or the Collateral Account.

Section
4.8.          Further
Assurances. Upon the request of the Secured Party and at the sole expense of the Grantors, each Grantor will promptly and
duly execute and deliver, and have recorded, such further collateral assignments, intercreditor agreements, subordination agreements,
pledge agreements, instruments and documents and take such further actions as the Secured Party may reasonably request for the
purpose of obtaining or preserving the full benefits of this Amended Collateral Agreement and of the rights and powers herein
granted, including, without limitation, (a) the collateral assignment of any Contract or Borrower’s IP and (b) all
applications, certificates, instruments, registration statements, and all other documents and papers the Secured Party may reasonably
request and as may be required by law in connection with the obtaining of any consent, approval, registration, qualification,
or authorization of any Person deemed necessary or appropriate for the effective exercise of any rights under this Amended Collateral
Agreement.

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Article
V

REMEDIAL PROVISIONS

 

Section
5.1.          General
Remedies. If an Event of Default shall occur and be continuing, the Secured Party may exercise, in addition to all other rights
and remedies granted to it in this Amended Collateral Agreement and in any other instrument or agreement securing, evidencing
or relating to the Obligations, all rights and remedies of a secured party under the UCC or any other Applicable Law. Without
limiting the generality of the foregoing, the Secured Party, without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required hereunder or by law referred to below) to or upon any Grantor
or any other Person (all and each of which demands, presentments, protests, advertisements and notices are hereby waived), may
in such circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may
forthwith sell, lease, assign, give option or options to purchase, or otherwise dispose of and deliver the Collateral or any part
thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange,
broker’s board or office of the Secured Party or elsewhere upon such terms and conditions as it may deem advisable and at
such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. The Secured
Party may disclaim any warranties of title, possession and quiet enjoyment. The Secured Party shall have the right upon any such
public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part
of the Collateral so sold, free of any right or equity of redemption in any Grantor, which right or equity is hereby waived and
released. Each Grantor further agrees, at the Secured Party’s request, to assemble the Collateral and make it available
to the Secured Party at places which the Secured Party shall reasonably select, whether at such Grantor’s premises or elsewhere.
To the extent permitted by Applicable Law, each Grantor waives all claims, damages and demands it may acquire against the Secured
Party arising out of the exercise by it of any rights hereunder except to the extent any such claims, damages, or demands result
solely from the gross negligence or willful misconduct of the Secured Party. If any notice of a proposed sale or other disposition
of Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least ten (10) days before
such sale or other disposition.

Except
as required by Applicable Law, each Grantor hereby waives any right to any notice or cure period herein provided or otherwise
provided under any other Loan Document.

Section
5.2.          Specific
Remedies.

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(a)               
 The Secured Party hereby authorizes each Grantor to collect its Accounts, under the Secured Party’s direction and control;
provided that, the Secured Party may
curtail or terminate such authority at any time after the occurrence and during the continuance of an Event of Default.

(b)              
Upon the occurrence and during the continuance of an Event of Default:

(i)                
the Secured Party may communicate with Account Debtors of any Account subject to a Security Interest and upon the request of the
Secured Party, each Grantor shall notify (such notice to be in form and substance satisfactory to the Secured Party) its Account
Debtors and parties to the Contracts subject to a Security Interest that such Accounts and the Contracts have been assigned to
the Secured Party;

(ii)              
each Grantor shall forward to the Secured Party, on the last Business Day of each week (or more frequently if requested by the
Secured Party), deposit slips related to all cash, money, checks or any other similar items of payment received by the Grantor
during such week, and, if requested by the Secured Party, copies of such checks or any other similar items of payment, together
with a statement showing the application of all payments on the Collateral during such week and a collection report with regard
thereto, in form and substance satisfactory to the Secured Party.

(iii)            
whenever any Grantor shall receive any cash, money, checks or any other similar items of payment relating to any Collateral (including
any Proceeds of any Collateral), such Grantor agrees that it will, within one (1) Business Day of such receipt, deposit all such
items of payment into an account designated by the Secured Party and until such Grantor shall deposit such cash, money, checks
or any other similar items of payment in such account such Grantor shall hold such cash, money, checks or any other similar items
of payment in trust for the Secured Party and as property of the Secured Party, separate from the other funds of such Grantor,
and the Secured Party shall have the right to transfer or direct the transfer of the balance of each account in a manner determed
by the Secured Party. All such Collateral and Proceeds of Collateral received by the Secured Party hereunder shall be held by
the Secured Party as collateral security for all the Obligations and shall not constitute payment thereof until applied as provided
in Section 5.4.

(iv)            
the Secured Party shall be entitled to (but shall not be required to): (A) proceed to perform any and all obligations of the applicable
Grantor under any Contract and exercise all rights of such Grantor thereunder as fully as such Grantor itself could, (B) do all
other acts which the Secured Party may deem necessary or proper to protect its Security Interest granted hereunder, provided such
acts are not inconsistent with or in violation of the terms of the Loan Agreement or Applicable Law, and (C) sell, assign or otherwise
transfer any Contract constituting Collateral, subject, however, to the prior approval of each other party to such Contract, to
the extent required under the Contract.

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Section
5.3.          Application
of Proceeds. At such intervals as may be agreed upon by the Borrower and the Secured Party, or, if an Event of Default shall
have occurred and be continuing, at any time at the Lender’s election, the Secured Party may apply all or any part of the
Collateral or any Proceeds of the Collateral in payment in whole or in part of the Obligations (after deducting all reasonable
costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any of the Collateral
or in any way relating to the Collateral or the rights of the Secured Party hereunder, including, without limitation, reasonable
attorneys’ fees and disbursements) in accordance with Section
2.04 of the Loan Agreement. Any balance of such Proceeds remaining after payment in full of the Obligations shall be paid
over to the Grantors, or to whomever else may be lawfully entitled to receive the same. Only after (a) the payment by the Secured
Party of any other amount required by any provision of law, including, without limitation, Section 9-610 and Section 9-615 of
the UCC, and (b) the payment in full of the Obligations, shall the Secured Party account for the surplus, if any, to any Grantor,
or to whomever else may be lawfully entitled to receive the same.

Section
5.4.          Waiver,
Deficiency. Each Grantor hereby waives, to the extent permitted by Applicable Law, all rights of redemption, appraisement,
valuation, stay, extension or moratorium now or hereafter in force under any Applicable Law in order to prevent or delay the enforcement
of this Amended Collateral Agreement or the absolute sale of the Collateral or any portion thereof. Each Grantor shall remain
liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to pay its Obligations
and the fees and disbursements of any attorneys employed by the Secured Party to collect such deficiency.

Article
VI

THE SECURED PARTY

Section
6.1.          Secured
Party’s Appointment as Attorney-In-Fact.

(a)               
Each Grantor hereby irrevocably constitutes and appoints the Secured Party and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such
Grantor and in the name of such Grantor or in its own name, for the purpose of carrying out the terms of this Amended Collateral
Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary
or desirable to accomplish the purposes of this Amended Collateral Agreement, and, without limiting the generality of the foregoing,
each Grantor hereby gives the Secured Party the power and right, on behalf of such Grantor, without notice to or assent by such
Grantor, to do any or all of the following at any time:

(i)                
in the name of such Grantor or its own name, or otherwise, take possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any Account or Contract subject to a Security Interest or
with respect to any other Collateral and file any claim or take any other action or proceeding in any court of law or equity or
otherwise deemed appropriate by the Secured Party for the purpose of collecting any and all such moneys due under any Account
or Contract subject to a Security Interest or with respect to any other Collateral whenever payable;

(ii)              
pay or discharge taxes and Liens levied or placed on or threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Amended

    	11

    	 

    

Collateral
Agreement and pay all or any part of the premiums therefor and the costs thereof,

(iii)            
execute, in connection with any sale provided for in this Amended Collateral Agreement, any endorsements, assignments or other
instruments of conveyance or transfer with respect to the Collateral; and

(iv)            
(A) direct any party liable for any payment under any of the Collateral to make payment of any and all moneys due or to become
due thereunder directly to the Secured Party or as the Secured Party shall direct; (B) ask or demand for, collect, and receive
payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising
out of any Collateral; (C) sign and indorse any invoices, freight or express bills, bills of lading, storage or warehouse
receipts, drafts against debtors, assignments, verifications, notices and other documents in connection with any of the Collateral;
(D) commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to
collect the Collateral or any portion thereof and to enforce any other right in respect of any Collateral; (E) defend any
suit, action or proceeding brought against such Grantor with respect to any Collateral; (F) settle, compromise or adjust
any such suit, action or proceeding and, in connection therewith, give such discharges or releases as the Secured Party may deem
appropriate; and (G)  generally, sell, transfer, pledge and make any agreement with respect to or otherwise deal with
any of the Collateral as fully and completely as though the Secured Party were the absolute owner thereof for all purposes, and
do, at the Secured Party’s option and such Grantor’s expense, at any time, or from time to time, all acts and things
which the Secured Party deems necessary to protect, preserve or realize upon the Collateral and the Secured Party’s Security
Interests therein and to effect the intent of this Amended Collateral Agreement, all as fully and effectively as such Grantor
might do.

(b)              
If any Grantor fails to perform or comply with any of its agreements contained herein, the Secured Party, at its option, but without
any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such agreement in accordance
with the provisions of Section 6.1(a).

(c)               
The costs and expenses (including, without limitation, reasonable attorneys’ fees) incurred by the Secured Party in connection
with actions taken pursuant to the terms of this Amended Collateral Agreement shall be deemed to be Advances under the Loan Agreement
and shall, together with interest thereon at the rate(s) in effect from time to time pursuant to the Revolving Credit Note, from
the date of payment by the Secured Party to the date reimbursed by the Grantors, be payable by the Grantors to the Secured Party
on demand.

(d)              
Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof in accordance with
Section 6.1(a). All powers, authorizations
and agencies contained in this Amended Collateral Agreement are coupled with an interest and are irrevocable until this Amended
Collateral Agreement is terminated and the Security Interests created hereby are released.

Section
6.2.          

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Duty
of Secured Party. The Secured Party’s sole duty with respect to the custody, safekeeping and physical preservation of
the Collateral in its possession, under Section 9-207 of the UCC or otherwise, shall be to deal with it in the same manner
as the Secured Party deals with similar property for its own account. Neither the Secured Party nor any of its officers, directors,
employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing
so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Grantor or any other
Person or to take any other action whatsoever with regard to the Collateral or any part thereof. The powers conferred on the Secured
Party hereunder are solely to protect the Secured Party’s interests in the Collateral and shall not impose any duty upon
the Secured Party to exercise any such powers. The Secured Party shall be accountable only for amounts that it actually receives
as a result of the exercise of such powers, and neither it nor any of its officers, directors, employees or agents shall be responsible
to any Grantor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct.

 

Article
VII

MISCELLANEOUS

 

Section
7.1.          Amendments
in Writing. None of the terms or provisions of this Amended Collateral Agreement may be waived, amended, supplemented or otherwise
modified except in accordance with Section
9.04 of the Loan Agreement.

Section
7.2.          Notices.
All notices, requests and demands to or upon the Secured Party or any Grantor hereunder shall be effected in the manner provided
for in Section 9.06 of the Loan Agreement.

Section
7.3.          No
Waiver by Course of Conduct, Cumulative Remedies. The Secured Party shall not by any act (except by a written instrument pursuant
to Section 7.1), delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of
Default. No failure to exercise, nor any delay in exercising on the part of the Secured Party, any right, power or privilege hereunder
shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by the Secured Party of any
right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Secured Party would
otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently
and are not exclusive of any other rights or remedies provided by law.

Section
7.4.          Enforcement
Expenses, Indemnification.

(a)               
Each Grantor agrees to pay or reimburse the Secured Party on demand for all of its reasonable costs and expenses incurred in connection
with enforcing or preserving any rights under this Amended Collateral Agreement and the other Loan Documents (including, without
limitation, in connection with any workout, restructuring, bankruptcy or other similar

    	13

    	 

    

proceeding),
including, without limitation, the reasonable fees and disbursements of counsel to the Secured Party.

(b)              
Each Grantor agrees to pay, and to save the Secured Party harmless from, any and all liabilities with respect to, or resulting
from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable with
respect to any of the Collateral or in connection with any of the transactions contemplated by this Amended Collateral Agreement
(but not including franchise taxes or taxes based on net income of the Secured Party).

(c)               
Each Grantor agrees to pay, and to save the Secured Party harmless from any and all liabilities, obligations, losses, damages,
penalties, costs and expenses in connection with actions, judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Amended Collateral Agreement
to the extent any Grantor would be required to do so pursuant to Section
9.02 of the Loan Agreement.

(d)              
The agreements in this Section 7.4 shall
survive repayment of the Obligations and the termination of this Amended Collateral Agreement and/or any other Loan Documents.

Section
7.5.          Waiver
of Jury Trial; Preservation of Remedies.

(a)               
EACH GRANTOR HEREBY IRREVOCABLY WAIVES ITS RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING
OUT OF ANY DISPUTE IN CONNECTION WITH THIS AMENDED COLLATERAL AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER, OR THE PERFORMANCE
OF SUCH RIGHTS AND OBLIGATIONS.

(b)              
The parties hereto preserve, without diminution, certain remedies that such Persons may employ or exercise freely, either alone,
in conjunction with or during a dispute. Each such Person shall have and hereby reserves the right to proceed in any court of
proper jurisdiction or by self-help to exercise or prosecute the following remedies, as applicable: (i) all rights to foreclose
against any real or personal property or other security by exercising a power of sale granted in the Loan Documents or under Applicable
Law or by judicial foreclosure and sale, including a proceeding to confirm the sale, (ii) all rights of self-help including peaceful
occupation of property and collection of rents, set-off, and peaceful possession of property, (iii) obtaining provisional or ancillary
remedies including injunctive relief, sequestration, garnishment, attachment, appointment of receiver and in filing an involuntary
bankruptcy proceeding, and (iv) when applicable, a judgment by confession of judgment. Preservation of these remedies does not
limit the power of an arbitrator to grant similar remedies that may be requested by a party in a dispute.

Section
7.6.          Successors
and Assigns. This Amended Collateral Agreement shall be binding upon the successors and assigns of each Grantor and shall
inure to the benefit of each Grantor (and shall bind all Persons who become bound as a Grantor to this Amended Collateral Agreement),
the Secured Party and their successors and permitted assigns; provided,
that no Grantor may assign, transfer or delegate any of its rights or obligations under this Amended Collateral Agreement
without the prior written consent of all holders of Obligations.

    	14

    	 

    

Section
7.7.          Set-Off. Each Grantor hereby irrevocably authorizes the Secured
Party at any time and from time to time, without notice to such Grantor, any such notice being expressly waived by each Grantor,
to set off and appropriate and apply any and all deposits (general or special, time or demand, provisional or final), in any currency,
and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by the Secured Party (or any agent of the Secured Party) to or for the credit
or the account of such Grantor, or any part thereof in such amounts as the Secured Party may elect, against and on account of
the obligations and liabilities of such Grantor to the Secured Party hereunder and claims of every nature and description of the
Secured Party against such Grantor, in any currency, whether arising hereunder, under the Loan Agreement, any other Loan Document
or otherwise, as the Secured Party may elect, whether or not the Secured Party has made any demand for payment and although such
obligations, liabilities and claims may be contingent or unmatured. The Secured Party shall notify such Grantor promptly of any
such set-off and the application made by the Secured Party of the proceeds thereof; provided,
that the failure to give such notice shall not affect the validity of such setoff and application. The rights of the Secured Party
under this Section 7.7 are in addition
to other rights and remedies (including, without limitation, other rights of set-off) which the Secured Party may have.

Section
7.8.          Counterparts.
This Amended Collateral Agreement may be executed by one or more of the parties to this Amended Collateral Agreement on any number
of separate counterparts (including by telecopy), and all of said counterparts taken together shall be deemed to constitute one
and the same instrument.

Section
7.9.          Severability.
Any provision of this Amended Collateral Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective only to the extent of such prohibition or unenforceability without invalidating the remainder of
such provision or the remaining provisions hereof or thereof or affecting the validity or enforceability of such provision in
any other jurisdiction.

Section
7.10.      Section Headings. The
Section headings used in this Amended Collateral Agreement are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.

Section
7.11.      Integration. This Amended
Collateral Agreement and the other agreements, instruments and documents referred to herein represent the agreement of the Grantors
and the Secured Party with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations
or warranties by the Secured Party relative to subject matter hereof and thereof not expressly set forth or referred to herein
or in the other agreements, instruments and documents referred to herein.

Section
7.12.      Governing Law. This Amended
Collateral Agreement shall be governed by, construed, interpreted and enforced in accordance with, the laws of the State of New
York, without giving effect to principles of conflicts of laws; provided, however, that to the extent that the laws
of any other jurisdiction govern the perfection of the Security Interests in any Collateral located in such jurisdiction or owned
by a Grantor located in such jurisdiction, then the laws of that jurisdiction shall govern as respects such perfection, and the
Grantors shall comply therewith to the same extent as herein provided with respect to the UCC and other New York law.

    	15

    	 

    

Section
7.13.      Consent to Jurisdiction.
Each Grantor hereby irrevocably consents to the exclusive personal jurisdiction of all state and federal courts located in New
York, New York, in any action, claim or other proceeding arising out of any dispute in connection with this Amended Collateral
Agreement, the Loan Agreement, the Note and the other Loan Documents, any rights or obligations hereunder or thereunder, or the
performance of such rights and obligations. Each Grantor hereby irrevocably consents to the service of a summons and complaint
and other process in any action, claim or proceeding brought by the Secured Party in connection with this Amended Collateral Agreement,
the Loan Agreement, the Note or the other Loan Documents, any rights or obligations hereunder or thereunder, or the performance
of such rights and obligations, on behalf of itself or its property, by registered or certified mail, return receipt requested,
in the manner specified in Section 9.06
of the Loan Agreement. Nothing in this Section
7.13 shall affect the right of the Secured Party to serve legal process in any other manner permitted by Applicable Law
or affect the right of the Secured Party to bring any action or proceeding against any Grantor or its properties in the courts
of any other jurisdiction in which any Grantor maintains an office or in which any Collateral is located.

Section
7.14.      Acknowledgements.

(a)               
Each Grantor hereby acknowledges that (i) it has been advised by counsel in the negotiation, execution and delivery of this Amended
Collateral Agreement, (ii) the Secured Party has no fiduciary relationship with or duty to any Grantor arising out of or in connection
with the Loan Agreement, this Amended Collateral Agreement or any of the other Loan Documents, and the relationship between the
Grantors (on the one hand) and the Secured Party (on the other hand) in connection herewith or therewith is solely that of debtor
and creditor, and (iii) no joint venture is created hereby or otherwise exists by virtue of the transactions contemplated hereby.

Section
7.15.      Additional Grantors.
Each Subsidiary of the Borrower that is required to become a party to this Amended Collateral Agreement pursuant to Section
5.11 of the Loan Agreement shall become a Grantor for all purposes of this Amended Collateral Agreement upon execution
and delivery by such Subsidiary of a joinder agreement (with a Perfection Certificate and/or other appropriate disclosure schedules
respecting such Additional Grantor) in form and substance satisfactory to the Secured Party.

Section
7.16.      Releases.

(a)               
At such time as the Obligations shall have been indefeasibly paid in full and the Revolving Credit Commitment has been terminated,
the Collateral shall be released from the Liens created hereby, and this Amended Collateral Agreement and all obligations (other
than those expressly stated to survive such termination) of the Secured Party and each Grantor hereunder shall terminate, all
without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the
Grantors. At the request and sole expense of any Grantor following any such termination, the Secured Party shall deliver to such
Grantor any Collateral held by the Secured Party hereunder, and execute and deliver to such Grantor such documents as such Grantor
shall reasonably request to evidence such termination.

    	16

    	 

    

(b)              
 If any of the Collateral shall be sold, transferred or otherwise disposed of by any Grantor in a transaction permitted by the
Loan Agreement, then the Secured Party, at the request and sole expense of such Grantor, shall execute and deliver to such Grantor
all releases or other documents reasonably necessary or desirable for the release of the Liens created hereby on such Collateral.

(c)               
Each Grantor, to the fullest extent permitted under Applicable Law, hereby releases Secured Party and each of its affiliates from
any claim of whatsoever nature that such Grantor has or may have against Secured Party or any of its affiliates from the beginning
of the world up and until the date hereof.

The
parties hereto acknowledge and agree that the terms and provisions of this Agreement and the other Loan Documents are subject
and subordinate, as applicable, to the terms and provisions of that certain intercreditor and subordination Agreement, dated as
of March __, 2013, by and among Hanover Holdings I, LLC, the Grantors, and Renewable Power Resources, LLC.

 

[Signature
Page to Follow]

    	17

    	 

    

IN
WITNESS WHEREOF, the parties hereto have caused this Amended Collateral Agreement to be executed by their duly authorized officers,
all as of the day and year first written above.

 

XZERES
CORP.

 

By:
/s/ Frank Greco

Name:
Frank Greco

Title: Chief Executive Officer

 

XZERES
Energy Services Corp.

 

By:
/s/ Frank Greco

Name:
Frank Greco

Title:
Chief Executive Officer

 

XZERES
Wind Europe Limited.

 

By:
 /s/ Frank Greco

Name: Frank Greco

 

Title: Chief Executive Officer

Hanover
Holdings I, LLC

By: ____________________

Name:
Joshua Sason

Title:
Chief Executive Officer

    	18GUARANTY
AND PLEDGE AGREEMENT

 

GUARANTY
AND PLEDGE AGREEMENT (this “Agreement”), dated as of March 29, 2013, by and among XZERES Corp., a Nevada
corporation (the “Pledgor”), XZERES Energy Services Corp., a Nevada corporation
and XZERES Wind Europe Limited., a corporation organized under the laws of the Republic of Ireland,
and any and all Additional Guarantors who may become party to this Agreement (XZERES Energy Services
Corp. and XZERES Wind Europe Limited., and such Additional Guarantors are hereinafter
referred to each as a “Guarantor”
and collectively as the “Guarantors”),and
Hanover Holdings I, LLC (the “Pledgee”) as Lender under the Revolving Credit Agreement dated as of August 1,
2012 (as same may be amended, modified, supplemented and/or restated from time to time, the “Loan
Agreement”) by and between the Pledgor and the Secured Party.

STATEMENT
OF PURPOSE

Pledgor
and the Guarantors (collectively, the “Debtors”) have entered into (a) an Amended and restated Collateral Agreement
(the “Amended Collateral Agreement”) and (b) a Collateral Assignment of Intellectual Property Agreement (the
“Collateral Assignment”) each of even date to secure their obligations pursuant to the Loan Agreement and the
other Loan Documents, upon the terms and subject to the conditions set forth therein.

It
is a condition precedent to Secured Party to enter into the Amended Collateral Agreement and Collateral Assignment that the Debtors
shall have executed and delivered this Guaranty and Pledge Agreement to the Secured Party.

NOW,
THEREFORE, in consideration of the foregoing recitals, and the mutual covenants contained herein, the parties hereby agree as
follows:

1.                 
Guaranty; Grant of Security Interest. Each Guarantor hereby absolutely, unconditionally and irrevocably guarantees to the
Pledgee, its successors, endorsees, transferees and assigns the due and punctual performance and payment of the Obligations owing
to the Pledgee, its successors, endorsees, transferees or assigns when due, all at the time and place and in the amount and manner
prescribed in, and otherwise in accordance with, the Loan Documents, regardless of any defense or set-off counterclaim, which
Pledgor, or any other person may have or assert, and regardless of whether or not the Pledgee or anyone on behalf of the Pledgee
shall have instituted any suit, action or proceeding or exhausted its remedies or taken any steps to enforce any rights against
Pledgor or any other person to compel any such performance or observance or to collect all or part of any such amount, either
pursuant to the provisions of the Loan Documents or at law or in equity, and regardless of any other condition or contingency.
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, The guarantorS’ respective and
individual obligations to the Pledgee under this Agreement shall continue in the event that the Collateral pledged for the Obligations
set forth herein is insufficient to satisfy such Obligations.

    	1

    	 

    

To
this end, each Debtor hereby grants, pledges and collaterally assigns to the Pledgee a security interest in all of such Debtor’s
right, title and interest in all the Collateral referenced herein or in any other Loan Document, now owned or at any time hereafter
acquired by such Debtor or in which such Debtor now has or at any time in the future may acquire any right, title or interest,
and wherever located or deemed located as collateral security for the prompt and complete payment and performance when due (whether
at the stated maturity, by acceleration or otherwise) of the Obligations.

2.                 
Waiver of Demand. Each Debtor whether individually or severally hereby unconditionally: (a) waives any requirement that
the Pledgee, in the event of a breach in any material respect by the Debtors of any of its representations or warranties in the
Loan Documents, first make demand upon, or seek to enforce remedies against, Pledgor or any other person before demanding payment
of enforcement hereunder; (b) covenants that this Agreement will not be discharged except by complete performance of all the Obligations
specifically provided for or contemplated herein; (c) agrees that this Agreement shall remain in full force and effect without
regard to, and shall not be affected or impaired, without limitation, by, any invalidity, irregularity or unenforceability in
whole or in part of the Loan Documents or any limitation on the liability of Pledgor thereunder, or any limitation on the method
or terms of payment thereunder which may now or hereafter be caused or imposed in any manner whatsoever; and (d) waives diligence,
presentment and protest with respect to, and notice of default in the performance or payment of any Obligation by Pledgor under
or in connection with the Loan Documents.

3.                 
Release. The obligations, covenants, agreements and duties of the Debtors hereunder shall not be released, affected or
impaired by any assignment or transfer, in whole or in part, of the Loan Documents or any Obligation, although made without notice
to or the consent of the Debtors, or any waiver by the Pledgee, or by any other person, of the performance or observance by Pledgor,
or any other Debtor of any of the agreements, covenants, terms or conditions contained in the Loan Documents, or any indulgence
in or the extension of the time or renewal thereof, or the modification or amendment (whether material or otherwise), or the voluntary
or involuntary liquidation, sale or other disposition of all or any portion of the stock or assets of Pledgor or any other Debtor,
or any receivership, insolvency, bankruptcy, reorganization, or other similar proceedings, affecting Pledgor or any other Debtor
or any assets of Pledgor or any other Debtor, or the release of any property from any security for any Obligation, or the impairment
of any such property or security, or the release or discharge of Pledgor or any other Debtor from the performance or observance
of any agreement, covenant, term or condition contained in or arising out of the Loan Documents by operation of law, or the merger
or consolidation of Pledgor, or any other cause, whether similar or dissimilar to the foregoing.

4.                 
Subrogation.

(a)               
Unless and until complete performance of all the Obligations hereunder, the Debtors shall not be entitled to exercise any right
of subrogation to any of the rights of the Pledgee against Pledgor or any collateral security or guaranty held by the Pledgee
for the payment or performance of the Obligations.

    	2

    	 

    

(b)              
 In the event that the Debtors shall become obligated to perform or pay any sums hereunder, or in the event that for any reason
Pledgor is now or shall hereafter become indebted to any other Pledgor, the amount of such sum shall at all times be subordinate
as to lien, time of payment and in all other respects, to the amounts owing to the Pledgee under the Loan Documents and the Debtors
shall not enforce or receive payment thereof until all Obligations due to the Pledgee under the Loan Documents have been performed
or paid. Nothing herein contained is intended or shall be construed to give to the Debtors any right of subrogation in or under
the Loan Documents, or any right to participate in any way therein, or in any right, title or interest in the assets of the Pledgee.

5.                 
Security. As collateral security for the punctual payment and performance, when due, by Pledgor or any other Debtor of
all the Obligations, the Debtors hereby pledges with, hypothecates, transfers and assigns to the Pledgee all of capital stock
of each subsidiary of Pledgor (whether currently in existence of hereinafter organized) (collectively, the “Pledged Assets”)
and all proceeds, shares and other securities received, receivable or otherwise distributed in respect of or in exchange for the
Pledged Assets, including, without limitation, any shares and other securities into which such Pledged Assets may be convertible
or exchangeable and any dividends or other distributions in connection therewith (collectively, the “Additional Collateral”
and together with the Pledged Assets, the “Collateral”). Simultaneously herewith, the Debtors shall deliver
to the Pledgee the certificate(s) representing the Pledged Assets, duly authenticated in a manner acceptable to Pledgee, along
with a stock transfer power duly executed in blank by the Debtors, to be held by the Pledgee as security. Any Collateral received
by the Debtors on or after the date hereof shall be immediately delivered to the Pledgee together with any executed stock powers
or other transfer documents requested by the Pledgee, which request may be made at any time prior to the date when the Obligations
shall have been paid and otherwise satisfied in full. Each of Pledgor and the Guarantors hereby authorizes Pledgee, at Pledgor’s
and the Guarantors’ sole cost and expense, to file one or more financing statements and one or more collateral assignments
with the appropriate governmental agency to the end of perfecting and protecting Pledgee’s rights to the Collateral and
Additional Collateral.

6.                 
Voting Power, Dividends, Etc. and other Agreements.

(a)               
So long as an Event of Default (as set forth in Section 7 hereof) has not occurred and is not continuing, the Debtors shall be
entitled to:

(i)                
Exercise any voting and/or consensual powers pertaining to the Collateral, or any part thereof, for all purposes;

(ii)              
Receive and retain dividends, distributions, proceeds paid, or any other tangible or intangible benefits with respect to the Collateral;
and

(iii)            
Receive the benefits of any income tax deductions available to the Debtors as a shareholder of the Company.

(b)              
The Debtors individually or severally agree that they will not sell, assign, transfer, pledge, hypothecate, encumber, or otherwise
dispose of the Collateral.

    	3

    	 

    

(c)               
 The Debtors jointly and severally agree to pay all costs including all reasonable attorneys’ fees and disbursements incurred
by the Pledgee in enforcing this Agreement in accordance with its terms.

7.                 
Default and Remedies.

(a)               
For the purposes of this Agreement, “Event of Default” shall mean:

(i)                
default in or under any of the Obligations after the expiration, without cure, of any applicable cure period provided under the
specified Loan Document;

(ii)              
a breach in any material respect by any Debtor of any of its representations, warranties, or covenants in this Agreement; or

(iii)            
a breach in any material respect by any Debtor of any its representations, warranties, or covenants in any other Loan Documents.

(b)              
the Pledgee shall have the following rights upon any Event of Default:

(i)                
the rights and remedies provided by the Uniform Commercial Code as adopted by the State of New York (the “UCC”)
(as said law may at any time be amended);

(ii)              
the right to cause any or all of the Collateral to be transferred to its own name or to the name of its designee and have such
transfer recorded in any place or places deemed appropriate by the Pledgee; and

(iii)            
the right to sell, at a public or private sale, the Collateral or any part thereof for cash, upon credit or for future delivery,
and at such price or prices in accordance with the UCC (as such law may be amended from time to time). Upon any such sale the
Pledgee shall have the right to deliver, assign and transfer to the purchaser thereof the Collateral so sold. The Pledgee shall
give the Debtors not less than ten (10) days’ written notice of its intention to make any such sale. Any such sale shall
be held at such time or times during ordinary business hours and at such place or places as the Pledgee may fix in the notice
of such sale. The Pledgee may adjourn or cancel any sale or cause the same to be adjourned from time to time by announcement at
the time and place fixed for the sale, and such sale may be made at any time or place to which the same may be so adjourned. In
case of any sale of all or any part of the Collateral upon terms calling for payments in the future, any Collateral so sold may
be retained by the Pledgee until the selling price is paid by the purchaser thereof, but the Pledgee shall incur no liability
in the case of the failure of such purchaser to take up and pay for the Collateral so sold and, in the case of such failure, such
Collateral may again be sold upon like notice. The Pledgee, however, instead of exercising the power of sale herein conferred
upon them, may proceed by a suit or suits at law or

    	4

    	 

    

in
equity to foreclose the security interest and sell the Collateral, or any portion thereof, under a judgment or decree of a court
or courts of competent jurisdiction, the Debtors having been given due notice of all such action. The Pledgee shall incur no liability
as a result of a sale of the Collateral or any part thereof. All proceeds of any such sale, after deducting the reasonable expenses
and reasonable attorneys’ fees incurred in connection with such sale, shall be applied in reduction of the Obligations,
and the remainder, if any, shall be paid to the Debtors. Notwithstanding anything herein to the contrary, in the event that the
Obligations are not satisfied in full by the sale or other disposition of the Collateral, the Debtors shall remain liable for
any deficiency.

Each
Debtor recognizes that the Pledgee may be unable to effect a public sale of any or all Collateral consisting of securities (“Restricted
Securities Collateral”), which have not been registered for resale under the Securities Act of 1933, as amended
(the “Securities Act”), by reason of certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers
which will be obliged to agree, among other things, to acquire such securities for their own account for investment and not with
a view to the distribution or resale thereof. Each Debtor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such
private sale shall not solely by reason thereof be deemed not to have been made in a commercially reasonable manner. The Pledgee
shall be under no obligation to delay a sale of any of the Restricted Securities Collateral for the period of time necessary to
permit the Issuer thereof to register such securities for public sale under the Securities Act, or under applicable state securities
laws, even if such Issuer would agree to do so.

Each
Debtor agrees to use its best efforts to do or cause to be done all such other acts and to incur such cost as may be necessary
to make such sale or sales of all or any portion of the Restricted Securities Collateral valid and binding and in compliance with
any and all other applicable laws. To this end, Pledgee are entitled to require each Pledgor to use its best efforts to cause
the applicable issuer of the Restricted Securities Collateral to prepare, file and keep current an effective registration statement
under the Securities Act with respect to some or all of the Restricted Securities Collateral.

8.                 
Application of Proceeds; Release. The proceeds of any sale or enforcement of or against all or any part of the Collateral,
and any other cash or collateral at the time held by the Pledgee hereunder, shall be applied by the Pledgee first to the payment
of the reasonable costs of any such sale or enforcement, then to reimburse the Pledgee for any damages, costs or expenses incurred
by the Pledgee as a result of an Event of Default or as a result of the administration, construction or enforcement of any of
the Loan Documents, then to the payment of the principal amount or stated valued (as applicable) of, and interest or dividends
(as applicable) and any other payments due in respect of, the Obligations. The remainder, if any, shall be paid to the Debtors.
Notwithstanding anything herein to the contrary, in the event that

    	5

    	 

    

the
Obligations are not satisfied in full by the sale or other disposition of the Collateral, the Debtors shall remain liable for
any deficiency. As used in this Agreement, “proceeds” shall mean cash, securities and other property realized
in respect of, and distributions in kind of, the Collateral, including any thereof received under any reorganization, liquidation
or adjustment of debt of any issuer of securities included in the Collateral.

9.                 
Representations, Warranties, and Covenants.

(a)               
Each Debtor hereby represents, warrants and covenants to the Pledgee that:

(i)                
such Debtor has full power and authority and legal right to pledge the Collateral to the Pledgee pursuant to this Agreement and
this Agreement constitutes a legal, valid and binding obligation of such Debtor, enforceable in accordance with its terms.

(ii)              
the execution, delivery and performance of this Agreement and other instruments contemplated herein will not violate any provision
of any order or decree of any court or governmental instrumentality or of any mortgage, indenture, contract or other agreement
to which such Debtor is a party or by which such Debtor and the Collateral may be bound, and will not result in the creation or
imposition of any lien, charge or encumbrance on, or security interest in, any of such Debtor’s properties pursuant to the
provisions of such mortgage, indenture, contract or other agreement.

(iii)            
each of the Debtors is the sole record and beneficial owner of all of the Pledged Assets or the Debtors, to the extent that any
of the Pledged Assets are owned severally are together the sole record and beneficial owners of such Pledged Assets;

(iv)            
such Debtor, as applicable, owns the Collateral free and clear of all Liens;

(v)              
the security interests granted pursuant to this Agreement (A) constitute valid security interests in all of the Collateral
in favor of Pledgee, as collateral security for the Obligations, enforceable in accordance with the terms hereof against all creditors
of such Debtor and any Persons purporting to purchase any Collateral from such Debtor, and (B) are prior to all other Liens
on the Collateral in existence on the date hereof. The security interests will be perfected first priority security interests
in all Collateral in which a security interest can be perfected by means of filing; and upon delivery to Pledgee of the certificates
representing the Collateral consisting of certificated securities, the security interests will be perfected first priority security
interests in such Collateral; and

(vi)            
In the event Pledgee feels insecure with respect to the Collateral, the financial condition or business prospects of one or more
of the Debtors, or as to whether one or more of the Debtors will duly perform its obligations under the Loan Documents, then Pledgee
may demand that one or

    	6

    	 

    

more
of the Debtors provide additional Collateral hereunder and the affected Debtors shall immediately comply with Pledgee’ demand
therefor.

10.             
No Waiver; No Election of Remedies. No failure on the part of the Pledgee to exercise, and no delay in exercising, any
right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise by the Pledgee of
any right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein provided are cumulative and are not exclusive of any remedies provided by law. In addition, the exercise of
any right or remedy of the Pledgee at law or equity or under this Agreement or any of the documents shall not be deemed to be
an election of Pledgee’s rights or remedies under such documents or at law or equity.

11.             
Termination. This Agreement shall terminate on the date on which all Obligations have been performed, satisfied, paid or
discharged in full.

12.             
Further Assurances. The parties hereto agree that, from time to time upon the written request of any party hereto, they
will execute and deliver such further documents, including, without limitation, one or more financing statements, assignments
and do such other acts and things as such party may reasonably request in order fully to effect the purposes of this Agreement.

13.             
Miscellaneous. Article VII Miscellaneous, of the Loan Agreement is incorporated herein by this reference as if fully
set forth in this Agreement.

14.             
Intercreditor Agreement. The parties hereto acknowledge and agree that the terms and provisions of this Agreement and the
other Loan Documents are subject and subordinate, as applicable, to the terms and provisions of that certain intercreditor and
subordination Agreement, dated as of March __, 2013, by and among Hanover Holdings I, LLC, the Grantors, and Renewable Power Resources,
LLC.

[Signature
page(s) start on the following page]

 

    	7

    	 

    

IN
WITNESS WHEREOF, the parties hereto have caused this Guaranty and Pledge Agreement to be duly executed by their respective
authorized persons as of the date first indicated above.

 

Pledgee:

Hanover
Holdings I, LLC

By:

Name:
Joshua Sason

Title:
Chief Executive Officer

[Signatures
Continued on following page]

 

    	8

    	 

    

Debtors:

 

XZERES
Energy Services Corp.

 

By:
 /s/ Frank Greco

Name: Frank Greco
 Title: Chief Executive Officer

 

Assets
subject to this pledge: all of Debtor’s right, title, and interest in and to XZERES Corp.

 

XZERES
Wind Europe Limited.

 

By:
/s/ Frank Greco 

Name: Frank Greco
 Title: Chief Executive Officer

 

Assets
subject to this pledge: all of Debtor’s right, title, and interest in and to XZERES Corp.

 

XZERES
Corp.

 

By:
 /s/ Frank Greco
 Name:Frank Greco
 Title: Chief Executive Officer

 

Assets
subject to this pledge: all of Pledgor’s right, title, and interest in and to the common stock of

XZERES
Energy Services Corp. and XZERES Wind Europe Limited.

    	9

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