Document:

EMPLOYMENT
AGREEMENT

 

THIS
EMPLOYMENT AGREEMENT is made this 25th day of August, 2014, by and between XZERES WIND CORP., a Nevada
corporation (the "Company") having its principal place of business at 9025 SW Hillman Court, Suite 3126, Wilsonville,
OR 97070, and DAVID J. HOFFLICH (the "Executive") residing at 5061 Seagrove Cove, San Diego, California
92130.

 

W
I T N E S S E T H:

 

WHEREAS
the Company is engaged in the business of designing, manufacturing, selling and servicing wind energy generation systems and
accessories; and

 

 

WHEREAS
the Executive has agreed to be employed by the Company as its Chief Executive Officer on the terms and conditions set forth
in this Agreement.

 

NOW,
THEREFORE, in consideration of the premises and mutual covenants herein contained, the parties hereto, intending to be legally
bound hereby, do hereby agree as follows:

 

		1.	Definitions.

 

For
purposes of this Agreement, the following words shall have the respective meanings set forth below:

 

 

1.1             
"Annual Compensation" shall mean the Executive's Base Salary and Bonus during the Term of Employment.

 

1.2             
"Base Salary" shall mean the annual base salary paid to the Executive pursuant to Section 5.1 of this Agreement.

 

1.3             
"Benefits" shall mean the benefits described in Article 6 of this Agreement.

 

1.4             
"Board" shall mean the Board of Directors of the Company.

 

1.5             
"Bonus" shall mean the bonus paid, if any, pursuant to Section 5.2 of this Agreement.

 

1.6             
"Business" shall mean the business being conducted by the Company of designing, manufacturing, selling and servicing
wind energy generation systems and accessories and any other businesses in which the Company may hereafter engage.

 

1.7             
"Cause" shall mean any one or more of the following, as determined solely by the Board in good faith: (a) the
willful or knowing failure or refusal without Cure of the Executive substantially to perform his duties hereunder or as directed
by the Board; (b) the willful disobedience by the Executive of a material and lawful instruction of the Board; (c) the engaging
by the Executive in: (i) an act of fraud, (ii) an illegal or criminal act, (iii) a dishonest act materially injurious to the Company,
monetarily or otherwise, or (iv) misconduct materially injurious to the Company monetarily or otherwise, including but not limited
to any action which holds the Executive or the Company in public disrepute; (d) a breach by the Executive of any fiduciary duty
to the Company; (e) malfeasant or negligent conduct without Cure; (f) any violation by the Executive of any Federal or state securities
law; or (g) a breach without Cure by the Executive of any of the provision s of this Agreement.

 

1.8             
"Commencement Date" shall mean August 21, 2014.

 

1.9             
"Cure" shall mean following the giving of written notice of Cause, in the reasonable opinion of the Board the
Executive shall have cured the Cause in all material respects within thirty (30) days of said notice having been given.

 

1.10         
"Disability" shall mean the Executive's inability to render either (a) for a period of one (1) month or (b) in
the aggregate of forty-five (45) days in any consecutive six month period, services hereunder by reason of a disability, which
disability is confirmed by the written medical opinion of an independent medical physician mutually acceptable to the Executive
and the Company. If the Executive and the Company cannot agree as to such independent medical physician, each shall appoint one
medical physician and those two physicians shall appoint a third physician who shall make such determination. If the Executive
shall be Disabled, shall thereafter return to work and shall thereafter become Disabled, then such latter Disability shall be
deemed a continuation of the former Disability (and not a new Disability) unless the Executive has returned to work on a full
time basis and has substantially performed all of his employment duties for a period of six (6) continuous and consecutive weeks.

 

1.11         
“Gross Sales” shall mean the total revenue the Company records prior to cost of goods and other expenses.

 

1.12         
"IP" shall have the meaning ascribed to it in Section 10.2.

 

    	 

    	 

    

 

1.13         
"Person" shall mean any individual, sole proprietorship, joint venture, partnership, limited liability company,
corporation, association, cooperative, trust, estate, government (or any branch or agency thereof), governmental, administrative
or regulatory authority, or any other entity of any nature whatsoever.

 

1.14         
"Restricted Period" shall have the meaning ascribed to it in Section 12.3.

 

1.15         
“Restricted Stock Purchase Agreement” shall mean that certain Restricted Stock Purchase Agreement between the
Company and Executive of even date herewith.

 

1.16         
"Stock" shall mean stock of the Company.

 

1.17         
"Termination Date" means (a) in the case of a termination for which a notice of termination is required, the
date of actual receipt of such notice of termination or, if later, the date specified therein, as the case may be, and (b) in
all other cases, the actual date on which the Executive's employment terminates during the Term of Employment.

 

1.18         
"Term of Employment" has the meaning ascribed to it in Article 3.

 

1.19         
"Territory" shall have the meaning ascribed to it in Section 12.2.

 

1.20         
"Writings" shall have the meaning ascribed to it in Section 10.1.

 

		2.	Employment.

 

The
Company hereby employs the Executive as its Chief Executive Officer, effective as of the Commencement Date; and the Executive
hereby accepts such employment upon the terms and conditions hereinafter set forth.

 

		3.	Term.

 

3.1             
Initial Term. Subject to the provisions of Article 7 hereof, the Executive's employment hereunder shall commence on the
Commencement Date and shall terminate on February 21, 2016, unless sooner terminated pursuant to the provisions of Article 7 or
8 of this Agreement or extended as hereinafter provided in Section 3.2 of this Agreement ("Term of Employment").

 

3.2             
Renewal Term. Upon the expiration of the aforesaid term, or any renewal thereof, this Agreement shall be renewed automatically
for successive one (1) year terms unless the Company or the Executive provides no less than two (2) months' notice to the other,
prior to the expiration of any such term, of its decision not to renew this Agreement whereupon this Agreement shall terminate
as of the last day of such term, unless this Agreement shall be sooner terminated during any such renewal term as provided in
Article 8 of this Agreement.

 

		4.	Positions,
                                         Responsibilities and Duties of Executive.

 

4.1             
Positions and Duties. The Executive shall have the duties, authority and responsibility inherent to the position of Chief
Executive Officer of a publicly traded corporation of the size, type and nature of the Company. The Executive shall perform such
duties hereunder and such additional duties or different duties as he shall from time to time be assigned by the Board, consistent
with the general level and type of duties and responsibilities associated with the position of Chief Executive Officer. The Executive
shall report directly to the Board. The Executive agrees to devote substantially all of his business time, skill, labor and attention
to the services required of the Executive under this Agreement and shall perform such services in a manner consonant with the
duties of such position. The foregoing shall not be deemed to prevent the Executive from serving on corporate, charitable or civic
boards or committees or acting as a fiduciary for any family member(s) or friend(s) provided that the Board determines, in its
sole discretion but without unreasonably withholding approval, that any such activity does not substantially interfere or conflict
with the performance of his duties hereunder.

 

4.2             
Board Membership. It is anticipated that the Executive will be elected to the Board of Directors during the Term of Employment
and to that end, the Board of Directors shall elect the Executive to the Board of Directors within thirty (30) days of the Commencement
Date and thereafter nominate the Executive for election to the Board at all meetings of shareholders of the Company occurring
during the Term of Employment.

 

4.3             
Outside Businesses. The Executive shall not engage in business activities other than as an employee of the Company or otherwise
approved by the Board. The Executive may invest his assets in such form or manner as will not require time or services on his
part in the operation of the affairs of the entities in which such investments are made, other than time or services which are
minor and incidental.

 

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		5.	Compensation.

 

During
the period that the Executive is employed hereunder, the Company shall pay (in the aggregate, the "Annual Compensation")
to the Executive for his services hereunder:

 

5.1             
Base Salary. A salary ("Base Salary") at an annual rate of One Hundred and Twenty Thousand ($120,000)
Dollars, which Base Salary shall be payable bi-weekly.

 

5.2             
Bonuses. In addition to the Base Salary, the Executive shall be entitled to the following bonuses (each “Bonus”):

 

5.3.1.
If during the period September 1, 2014 through November 30, 2014, the Company’s Gross Sales exceed Ten Million ($10,000,000)
Dollars, the Executive shall be granted 1,000,000 common shares of Stock.

 

5.3.2.
If during the period December 1, 2015 through February 28, 2015, the Company’s Gross Sales exceed Ten Million ($10,000,000)
Dollars, the Executive shall be granted 1,000,000 common shares of Stock.

 

5.3.3.
If during the period March 1, 2015 through May 31, 2015, the Company’s Gross Sales exceed Ten Million ($10,000,000) Dollars,
the Executive shall be granted 1,000,000 common shares of Stock.

 

5.3.4.
If during the period June 1, 2015 through August 31, 2015, the Company’s Gross Sales exceed Ten Million ($10,000,000) Dollars,
the Executive shall be granted 1,000,000 common shares of Stock.

 

The
Gross Sales benchmarks and bonuses are cumulative and can be applied between the defined periods. Each Bonus shall be granted
within 30 days after the determination of the Gross Sales for the applicable period.

 

It
is understood that the period March 1st to February 28th is the Company's current fiscal year. In the event
that the Company changes its fiscal year (which it shall have the absolute right to do), then the measuring period for determining
the Bonus shall be changed to the Company’s new fiscal year, and there should be an appropriate adjustment of the required
Gross Sales and/or Bonus for the first new fiscal year of the Company.

 

5.4Determination
of Gross Sales. The Company's Gross Sales shall be reviewed by the Company's independent auditors, whose decision shall be
final and binding upon the Company and the Executive.

 

 

		6.	Benefits.

 

During
the period that the Executive is employed hereunder, the Company shall pay or provide the following (in the aggregate, the "Benefits"):

 

6.1             
Vacations. Permit the Executive a paid vacation of two (2) weeks for each twelve (12) month period of employment, which
vacation time shall be taken at such times as are consistent with the Executive's responsibilities hereunder but in no event earlier
than December 1, 2014. No more than two (2) weeks of accumulated vacation time may be carried over from one twelve (12) month
period to the next; any other vacation time, if not utilized, may not be carried over.

 

6.2             
Reimbursement of Expenses. Subject to prevailing Company policy or such guidelines as may be established by the Board,
pay directly or reimburse the Executive upon his submission of such expense accounts and supporting documents as are reasonably
required by the Company, for all reasonable and necessary business expenses incurred by the Executive as part of and in connection
with the performance of his duties specified herein.

 

6.3             
Health Insurance. Provide the Executive (and his spouse where applicable) with the medical benefits as in effect on the
date of this Agreement, or as modified from time to time by the Company at its discretion, which the Company provides to its executive
employees generally. The Executive shall have the right, at his own expense, to add any dependents to the insurance coverage.

 

7.                 
Background Investigation. The Executive acknowledges that the Company is a public company and as a result thereof, full
disclosure of the background of the Executive, as Chief Executive Officer of the Company, will be required. Accordingly, the Executive
agrees to cooperate with a company to be retained by the Board to conduct a background due diligence investigation of the Executive
and this Agreement is subject to a satisfactory due diligence investigation. In the event that such investigation shall reveal
information which, in the opinion of the Company, would have any adverse effect on the Company, its ability to raise money in
a public or private offering, or on the Executive's ability to perform his obligations hereunder, the Company shall have the right
to terminate this Agreement by written notice thereof to the Executive, upon which event this Agreement shall be null and void,
and neither party shall have any further liability to the other hereunder. The Executive represents that he has no knowledge of
any matter which would be disclosed by such investigation which would have any adverse effect on the Company, its ability to raise
money in a public or private offering, or on the Executive's ability to perform his obligations hereunder. The Board, at its sole
discretion, may waive the requirement for a third-party background check, and in its place substitute a completed SEC compliant
director and officer questionnaire in a form approved by the Company’s counsel.

 

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8.                 
Termination of Employment.

 

The
employment of the Executive by the Company commences on the Commencement Date and shall terminate (the "Termination Date")
upon the occurrence of any of the following:

 

8.1             
End of Term. The end of the term of this Agreement, or any renewal thereof, as provided in Article 3 hereof;

 

8.2             
Death. The death of the Executive;

 

8.3             
Disability. The Disability of the Executive;

 

8.4             
Cause. The giving of notice by the Company to the Executive of termination for Cause; or

 

8.5             
Without Cause. The giving of notice by the Company to the Employee of termination for any reason whatsoever other than
Cause; or

 

8.6             
Resignation. The resignation of the Executive upon no less than thirty (30) days prior notice.

 

9.                 
Effect of Termination.

 

In
the event of the termination of the Executive's employment for any of the reasons set forth in Article 8 hereof, all Annual Compensation
and Benefits payable to the Executive shall terminate as of the Termination Date and the Executive, his estate or his legal representative,
as the case may be, shall only be entitled to:

 

		(a)	Any
                                         Base Salary accrued and all Bonuses in Section 5.2 not yet paid or granted as of the
                                         Termination Date; and

 

		(b)	Reimbursement
                                         for all expenses incurred, but not yet paid prior to the Termination Date; and

 

		(c)	Any
                                         other compensation and/or benefits as may be provided in accordance with the terms and
                                         provisions of any applicable plans and programs of the Company; and

 

		(d)	If,
                                         and only if, the termination is pursuant to Section 8.5 hereof, and (a) the Termination
                                         Date occurs on or prior to the third anniversary of the Commencement Date, a severance
                                         payment equal to three (3) month's Base Salary, or (b) the Termination Date occurs after
                                         the third anniversary of the Commencement Date, a severance payment equal to six (6)
                                         month’s Base Salary, in each case, payable in equal bi-weekly installments on the
                                         Company's regular salary payment dates, provided that the Executive executes, and does
                                         not revoke, a General Release of all claims relating to his employment and termination
                                         of employment from employment in a form provided by the Company. The Executive understands
                                         that should he fail or refuse to execute the General Release provided by the Company,
                                         or revoke such General Release, he shall not be entitled to any severance payments under
                                         this section.

  

10.             
Writings; Intellectual Property.

 

10.1         
The Company shall own all right, title and interest in any writings or other materials written or produced by Executive or under
Executive's supervision (whether alone or with others) that relate in any manner to, or which are capable of being used in, Company's
existing or contemplated business (including, without limitation, work for or by Company's customers) (the "Writings"),
and all copyrights, common law and statutory in the United States and foreign countries, pertaining to such Writings.

 

10.2         
The Executive agrees that any intellectual property and other property rights in any work product, developments, concepts, discoveries,
know-how, improvements, trade secrets or inventions, whether or not patentable or registerable under copyright of similar laws,
and conceived or developed by the Executive or caused to be conceived or developed or reduced to practice by the Executive, whether
or not during regular working hours, during the Term of Employment and the period during which the Executive was employed by the
Company pursuant to the Initial Employment Agreement, including, without limitation, all patents, copyrights, trademarks, service
marks and other intellectual property rights related thereto (collectively, the "IP") shall be deemed to be owned
exclusively by the Company provided that they (i) relate at the time of conception or development to the actual or demonstrably
proposed business or research and development activities of the Company; (ii) result from or relate to any work performed for
the Company; or (iii) are developed through the use of Confidential Information (hereinafter defined in Section 11.2) and/or Company
owned resources or in consultation with Company personnel. Executive further acknowledges that all IP which is made by him (solely
or jointly with others) within the scope of and during the Term of Employment are “works for hire” (to the greatest
extent permitted by applicable law) but, that, in the event that any such IP is deemed not to be a work for hire, Executive hereby
unconditionally and irrevocably transfers and assigns to the Company any and all rights, title and interest the Executive may
currently have (or in the future may have) by operation of law or otherwise in or to any IP. Executive agrees to execute and deliver
to the Company any transfers, assignments, documents or other instruments necessary or appropriate to vest complete title and
ownership of any IP, and all associated rights, exclusively in the Company pursuant to this Agreement.

 

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11.             
Confidentiality of Information and Duty of Nondisclosure.

 

11.1         
Acknowledgment by Executive. The Executive acknowledges and agrees that his employment by the Company under this Agreement
necessarily involves his understanding of and access to certain trade secrets and confidential information pertaining to the Business
as well as relationships with customers and suppliers of the Business.

 

11.2         
Confidentiality. Accordingly, the Executive agrees that at all times during the term of this Agreement and thereafter,
he will not, directly or indirectly, without the express authority of the Board unless directed by applicable legal authority
having jurisdiction over the Executive, disclose to or use for the benefit of any Person, or himself, any files, trade secrets,
proprietary information or other Confidential Information concerning the Business. Further, the Executive agrees that he will
not, directly or indirectly, remove or retain, without the express prior written consent of the Board, any figures, calculations,
letters, papers, records, documents, electronic media instruments, drawings, designs, programs, or any copies thereof, or any
information or instruments derived therefrom, or any other similar documents or information of any type or description, however
such information might be obtained or recorded and on whatever medium such information may be contained, arising out of or in
any way relating to the Business obtained as a result of or in connection with his employment, heretofore or hereafter, by the
Company and upon termination of this Agreement, shall promptly return any of the same in his possession to the Company. The Executive
acknowledges that all of the foregoing constitutes proprietary information, which is the exclusive property of the Company. As
used in this Section 11.2, "Confidential Information" shall mean any information relating to this Agreement, the business
or affairs of the Company or the Business, and information relating to financial statements, customer identities, potential customers,
employees, suppliers, servicing methods, equipment, programs, strategies and information, analyses, profit margins or other proprietary
information used by the Company in connection with the Business.

 

11.3         
Limitations on Obligations. From and after the Termination Date, the restrictions set forth in this Article shall not apply
to such information which is then in the public domain, if the Executive was not responsible, directly or indirectly, for permitting
such information to enter the public domain without the consent of the Company.

  

		12.	Covenant
                                         Not to Compete.

 

12.1         
Consideration. This covenant between the Executive and the Company is being executed and delivered by the parties in consideration
of the covenants of the Company and the Executive contained in this Agreement.

 

12.2         
Non-Compete. The Executive hereby agrees that during the Term of Employment and for a period commencing on the termination
of his employment with the Company for any reason whatsoever, with or without Cause, voluntarily or involuntarily, and ending
three (3) years after the date of such termination, except on behalf of the Company, he will not, directly or indirectly, as agent,
employee, consultant, representative, stockholder, manager, member, partner or in any other capacity, own (other than through
the passive ownership of less than one percent (1%) of the publicly traded shares of any Person), operate, manager, control, engage
in, invest in (other than through the passive ownership of less than one percent (1%) of the publicly traded shares of any Person)
or participate in any manner in, act as a consultant or advisor to, render services for (alone or in association with any Person)
or otherwise assist any Person that engages in or owns, invests in, operated, manages or controls any venture or enterprise that
directly or indirectly engages or proposes to engage in any business competitive in any material respects with any portion of
the Business anywhere in the United States (the "Territory").

 

12.3         
Non-Solicitation. Without limiting the generality of the provisions of Section 12.2, the Executive hereby agrees that during
the Term of Employment and for a period commencing on the termination of his employment with the Company for any reason whatsoever,
with or without Cause, voluntarily or involuntarily, and ending three (3) years after the date of such termination (the “Restricted
Period”), he will not, except on behalf of the Company, directly or indirectly, solicit, or participate as agent, employee,
consultant, representative, stockholder, manager, partner or in any other capacity in any business which solicits business from
any Person which is or was a customer or prospective customer or supplier of the Business at any time during the three (3)-month
period preceding the date of such solicitation, or from any successor in interest to any such Person, for the purpose of securing
business or contracts related to any portion of the Business.

 

12.4         
Interference with Relationship.

 

12.4.1   
During the Restricted Period, the Executive shall not, directly or indirectly, as agent, employee, consultant, distributor, representative,
stockholder, manager, member, partner or in any other capacity, request, directly or indirectly, that any suppliers, customers
or clients of the Company, or other Persons sharing a business relationship with the Company curtail or cancel their business
with the Company, or in any other way interfere with any such business relationships with the Company, or otherwise take action
which might be to the material disadvantage of the Company.

 

12.4.2   
During the Restricted Period, the Executive shall not, without the prior written consent of the Company, except on behalf of the
Company, directly or indirectly, as agent, employee, consultant, distributor, representative, stockholder, manager, member, partner
or in any other capacity, employ or engage, or recruit or solicit for employment or engagement, any person (i) who is employed
or engaged by the Company or any of its affiliates, or (ii) who was employed or engaged by the Company within twenty-four (24)
months of such contact, or otherwise seek to influence or alter any such person's relationship with the Company.

 

12.5         
Blue-Pencil. If any court of competent jurisdiction shall at any time deem the term or any particular restrictive covenant
contained in this Article 12 too lengthy or the Territory too extensive, the other provisions of this Article 12 shall nevertheless
stand, and the Restricted Period and/or the Territory shall be reduced to such duration or size of such court shall determine
to be permissible.

 

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		13.	Certain
                                         Remedies.

 

13.1         
Accounting. The Executive agrees that upon a breach of any of the covenants set forth in Article 11 or 12, the Company
shall be entitled to an accounting and payment by the Executive of all profits realized by him as a result of any such violation,
in addition to the injunctive relief set forth in Section 13.2.

 

13.2         
Injunctive Relief. The Executive acknowledges and agrees that the covenants set forth in Articles 11 and 12 are reasonable
and necessary for the protection of the Company's business interests, that irreparable injury will result to the Company if the
Executive breaches any of the terms of Article 11 or 12 and that in the event of any actual or threatened breach by the Executive
of any of the provisions contained in Article 11 or 12, the Company will have no adequate remedy at law. The Executive accordingly
agrees that in the event of any actual or threatened breach by him of any of the provisions contained in Article 11 or 12, the
Company shall be entitled to injunctive and other equitable relief, without the necessity of showing actual monetary damages and
without posting any bond or other security, in addition to pursuing any other remedies available to it for such breach or threatened
breach, including the recovery of any damages.

 

13.3         
Independent Covenants. The provisions of Articles 11 and 12 shall be read and construed and shall have effect as separate,
severable and independent provisions or restrictions, and shall be enforceable accordingly. The existence of any claim or cause
of action which the Executive may have against the Company shall not constitute a defense or bar to the enforcement of any of
the covenants contained in Articles 11 and 12.

 

13.4         
Costs of Enforcement. In addition thereto, if the Company shall resort to litigation to enforce any of the covenants contained
in Article 11 or 12, the successful party in such litigation shall be entitled to recover from the other party all of its costs
of litigation, including reasonable attorneys' fees.

 

13.5         
Extension of Covenant. If the Company must resort to litigation to enforce any of the covenants contained in Article 12
which has a fixed term, then such term shall be extended for a period of time equal to the period of such breach, beginning on
the date of a final court order (without further right of appeal) acknowledging the validity of such covenant or, if later, the
last day of the original fixed term of such covenant.

 

13.6
Change of Control: Should a “Change of Control” of the company occur as defined in the securities market,
all Bonuses in Section 5.2 of the Employment Agreement will be deemed 100% (one hundred percent) earned and granted.

 

14.             
Survival of Obligations. Notwithstanding anything contained in this Agreement to the contrary, the obligations of the Executive
under Articles 10, 11 and 12, and the rights and remedies of the Company under Article 13 shall survive the termination of the
Executive's employment hereunder for any reason whatsoever.

 

15.             
Non-Disparagement. Executive will not, at any time, during or after this Agreement, directly or indirectly, publish or
communicate disparaging or derogatory statements or opinions in any way about the Company or its affiliates, including but not
limited to disparaging or derogatory statements or opinions about the Company's management, products or services, to any third
party. It shall not be a breach of this section for Executive to testify truthfully in any judicial or administrative proceeding
or to make statements or allegations in legal filings based upon the Executive's reasonable belief and are not made in bad faith.
The Company will not, at any time, during or after this Agreement, directly or indirectly, publish or communicate disparaging
or derogatory statements or opinions about Executive to any third party unrelated to the Company. It shall not be a breach of
this section for the Company, or its employees to testify truthfully in any judicial or administrative proceeding or to make statements
or allegations in legal or government filings that are based on the Company's reasonable belief and are not made in bad faith.
The provision of this Article 15 shall survive the termination of the Executive's employment hereunder for any reason whatsoever.

 

16.             
Initial Employment Agreement Terminated. Effective as of the Commencement Date, this Agreement supersedes in its entirety
the Initial Employment Agreement, which Initial Employment Agreement shall be null and void and of no further force and effect.
The Executive acknowledges that, except for any base salary accrued but not yet paid or for any unreimbursed expenses due under
the Initial Employment Agreement, the Executive has no right to, and hereby remises and releases the Company from, any further
compensation, benefits or entitlements under the Initial Employment Agreement. Specifically, but not in limitation of the foregoing,
the Executive acknowledges that it has received Incentive Stock Options for 20,000 shares of stock pursuant to a separate Incentive
Stock Option Agreement, and has no further rights or entitlements to any stock options pursuant to the Initial Employment Agreement.

 

17.             
Executive Representations.

 

The
Executive represents and warrants to the Company, knowing and intending that it shall rely thereon, as follows:

 

17.1         
No Violations. The execution and delivery of this Agreement by the Executive, and the performance by the Executive of his
obligations hereunder, does not violate any other agreement or contract to which the Executive is a part or by which he may be
bound.

 

17.2         
Authority. The Executive has the power and authority to enter into this Agreement and this Agreement constitutes the valid,
legal and binding obligation of the Executive, enforceable in accordance with its terms.

 

17.3         
No Prior Obligations. Executive is under no obligation to any former employer or any other person which is in any way inconsistent
with, or which imposes any restriction upon, Executive's acceptance of employment hereunder with the Company, the employment of
Executive by the Company, or Executive's undertakings under this Agreement.

 

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18.             
Successors.

 

18.1         
The Executive. This Agreement is personal to the Executive and, without the prior express written consent of the Company,
shall not be assignable by the Executive, except that the Executive's rights to receive any compensation or benefits under this
Agreement may be transferred or disposed of pursuant to testamentary disposition, intestate succession or pursuant to a domestic
relations order. This Agreement shall inure to the benefit of and be enforceable by the Executive's heirs, beneficiaries and/or
legal representatives.

 

18.2         
The Company. This Agreement shall inure to the benefit of and be binding upon the Company, and its affiliates, successors
and assigns.

 

		19.	Miscellaneous.

 

19.1         
Governing Law, Arbitration and Venue. This Agreement shall be governed and construed in accordance with the laws of the
state of Nevada. If any controversy or claim arising out of this Agreement or the parties' relationship cannot be settled, the
controversy or claim, whether legal or equitable in nature, including the remedy of rescission, shall be resolved by submission
of the dispute to binding arbitration through the "Fast Track" program of the Arbitration Service of Portland, Oregon
or such other binding arbitration as the parties mutually agree to, provided that the arbitration hearing, if any, must take place
in Portland, Oregon. The parties agree that the arbitrator shall have the power to adjudicate all equitable claims and remedies,
including but not limited to injunctive relief. The decision of the arbitrator or arbitrators shall not be subject to appeal.

 

19.2         
Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties
hereto or their respective successors and legal representatives.

 

19.3         
Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given
if and when (a) delivered personally, (b) transmitted by prepaid telegram, telex or facsimile except that any notice, request,
demand, instruction, consent or other communication transmitted in the manner set forth in this subjection (b) shall not be deemed
to have been duly given unless and until it is actually received by the intended recipient, (c) mailed by first class certified
mail, return receipt requested, postage prepaid, or (d) sent by a nationally recognized express courier service, postage or delivery
charges prepaid, for overnight delivery, to the parties addressed as follows:

 

If
to the Executive: David J. Hofflich

5061
Seagrove Cove

San
Diego, CA 92130

 

If
to the Company:as it then principal place of business

 

With
a copy to:

  

or
to such other address as any party hereto shall have furnished to the others in writing in accordance herewith. Notices and communications
shall be effective when actually received by the addressee.

 

19.4         
Withholding. The Company shall withhold from any amounts payable under this Agreement such federal, state or local income
taxes as shall be required to be withheld pursuant to any applicable law or regulation and all benefit costs payable by the Company's
similarly situated salaried employees.

 

19.5         
Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement.

 

19.6         
Captions. The captions of this Agreement are not part of the provisions hereof and shall have no force and effect.

 

19.7         
Entire Agreement. This Agreement contains the entire agreement between the parties concerning the subject matter hereof
and supersedes all prior agreements, understandings, discussions, negotiations and undertakings, whether written or oral, between
the parties with respect thereto.

 

19.8         
Survivorship. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement
and the Executive's Term of Employment hereunder, to the extent necessary to the intended provision of such rights and the intended
performance of such obligations.

 

19.9         
Validity. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity
or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

 

19.10     
Headings. The headings in this Agreement are for the convenience of reference only and shall not be deemed to define, limit,
or describe the scope and intent of this Agreement, or any article or section thereof, or to alter or affect the interpretation
of any provision thereof.

 

    	7

    	 

    

 

IN
WITNESS WHEREOF, the parties have executed this Agreement the day and year first above written.

 

XZERES
WIND CORP.

 

  

By:
/s/ Authorized Signatory

 

 

XZERES
WIND CORP.

 

Board
of Directors

 

By:
/s/ Steven Shum

 

By:
/s/ Robert Garff

 

By:
/s/ William Hagler

 

 

 

/s/
David J. Hofflich

DAVID
J. HOFFLICH, Executive

 

    	8MASTER
SALES PURCHASE AGREEMENT

 

Between 

 

XZERES
CORP.

 

and

 

GALE
FORCE MASTER FUND L.P.

  

Dated
December 20, 2013

 

    	 

    	 

    

 

TABLE
OF CONTENTS

  

	1.	Definitions	1
	2.	Appointment	3
	3.	Purchaser
    Requirements	3
	4.	Purchaser
    Orders	6
	5.	Term
    and Effectiveness of Agreement	6
	6.	Prices
    and Terms of Sale	6
	7.	Information
    Exchange	7
	8.	Purchaser
    Reports	8
	9.	Authorized
    Sources of Supply	8
	10.	Company
    Trademarks	8
	11.	Use
    of Company IP	10
	12.	Advertising
    Compliance	11
	13.	Warranty	11
	14.	Bodily
    Injury and Property Damage	12
	15.	Legal
    Compliance	13
	16.	Force
    Majeure	14
	17.	Termination	14
	18.	Claims
    Relating to Termination	15
	19.	Termination
    and Post-Termination Obligations	15
	20.	Confidentiality	16
	21.	Assignment	17
	22.	Entire
    Agreement	17
	23.	Dispute
    Resolution	18
	24.	Notices	18
	25.	Amendments	19
	26.	Miscellaneous	 

 

EXHIBITS

 

	Exhibit A	Products
	Exhibit B	(Left Blank)
	Exhibit C	Warranty

 

    	2

    	 

    

 

MASTER
SALES PURCHASE AGREEMENT

 

 

XZERES
Corp.

(a
Nevada corporation)

9025
SW Hillman Court

Building
31, Suite 3126

Wilsonville,
Oregon 97070

Fax:
(503) 212-0109

	E-mail: sales@xzeres.com	(“XZERES”
    or “the Company”)

 

 

Gale
Force Master Fund L.P.

Ugland
House, South Church Street

Georgetown,
Grand Cayman KY1-1104

Fax:

	E-mail:galeforcefund@gmail.com	(“Purchaser”)

 

The
Company and Purchaser hereby enter into this Master Sales Purchase Agreement. This Agreement includes and incorporates by reference
the Exhibits to this Agreement and the “Procedures” as defined below (collectively, the “Agreement”).
The “Effective Date” of this Agreement is December 20, 2013.

 

 

AGREEMENT

 

		1)	Definitions.
                                         Terms used in this Agreement with initial capital letters shall have the meanings
                                         set forth below:

 

		1.1	“Affiliate”
                                         means an entity the ownership of which the Company controls, or which is under common
                                         control with, the Company.

 

		1.2	“Agreement”
                                         has the meaning given in the Introduction.

 

		1.3	“Approved
                                         Parts” means spare parts, components, equipment, and accessories for use in
                                         connection with Turbines and Towers, including parts manufactured by or on behalf of
                                         the Company and parts manufactured by third parties which the Company has approved for
                                         use in or service of Turbines and Towers.

 

		1.4	“Bodily
                                         Injury and Property Damage Loss(es)” means all expense, liability, and loss
                                         arising from injury to persons or damage to property caused by Products, but specifically
                                         excluding any special or consequential expense, liability, or loss, except those which
                                         cannot be excluded under applicable law.

 

		1.5	“Cure
                                         Period” has the meaning given in Section 11.1.

 

		1.6	“Purchaser”
                                         means the buyer executing this Agreement together with its permitted successors and
                                         assigns.

 

		1.7	“Default”
                                         means a breach of this Agreement or the Procedures that is not cured within the applicable
                                         cure period if any cure period is provided.

 

		1.8	“Effective
                                         Date” has the meaning given in the Introduction.

 

		1.9	“Expiration
                                         Date” has the meaning given in the Introduction.

 

		1.10	“Force
                                         Majeure Event” has the meaning given in Section 10.

  

    	3

    	 

    

 

		1.11	“Party”
                                         or “Parties” means the Company and/or Purchaser.

 

		1.12	“Procedures”
                                         means the written policies and procedures provided and amended by the Company from
                                         time to time for the sale and service of Products to Purchaser under this Agreement and
                                         for using and displaying the Trademarks. The Procedures may be furnished to Purchaser
                                         in hard copy or by electronic copy.

 

		1.13	“Products”
                                         means Turbines, Towers, associated system components such as turbine controllers,
                                         inverters and charge controls, lightning protection systems, and Approved Parts, as may
                                         be modified from time to time by the Company by Notice to Purchaser. The Company may
                                         make available additional products for sale to Purchaser from time to time, such as components
                                         and electronics, which if made available to Purchaser shall be included in “Products.”

 

		1.14	“Term”
                                         has the meaning given in Section 4.1.

 

		1.15	“Termination
                                         Date” means the day upon which this Agreement expires or is terminated, regardless
                                         of how or why it is terminated.

 

		1.16	“Towers”
                                         means the classes and categories of small wind turbine towers listed in Exhibit A,
                                         as may be modified from time to time by the joint consent of the Company and Purchaser.

 

		1.17	“Turbines”
                                         means the classes and categories of small wind turbines listed in Exhibit A,
                                         as may be modified from time to time by the joint consent of the Company and Purchaser.

 

		1.18	“Unauthorized
                                         Modification” means a modification or alteration of a Product which the Company
                                         neither made, ordered, nor approved or that was not performed in accordance with the
                                         Company’s policies.

 

		1.19	“Warranty
                                         Terms and Conditions” means the written terms and conditions of the Company’s
                                         standard Limited Warranty and any optional extended warranty or protection plan provided
                                         by the Company for each Product, as set forth in the Procedures or otherwise published
                                         by the Company.

 

		1.20	“XZERES”
                                         has the meaning given in the Introduction.

 

		2)	Appointment.

 

		2.1	Appointment
                                         by the Company. Subject to the terms and conditions of this Agreement, the Company
                                         hereby appoints Purchaser as a non-exclusive authorized buyer of the Products, to purchase
                                         Products from the Company from time to time during the Term, for its own use.

 

		2.2	Purchaser
                                         Support Organization. Purchaser shall establish and maintain or contract with
                                         third parties an adequately capitalized siting, sales, installation, and after-sales
                                         support organization capable of meeting its obligations under this Agreement, including
                                         suitable, modern facilities, equipment, and transportation, and sufficient and properly
                                         trained personnel. Purchaser shall establish and maintain a Product ordering process
                                         to ensure timely delivery of Products to project sites (taking into account, among other
                                         things, the Company’s manufacturing lead times and to provide prompt delivery and
                                         installation of Products to project sites). Purchaser acknowledges that it is responsible
                                         for managing the payment of products and that the Company shall look solely to Purchaser
                                         for payment for Products ordered from the Company.

		2.3	Marketing
                                         Information. The Company shall provide Product information to Purchaser electronically
                                         and, to the extent reasonably requested, in hard copy.

 

		2.4	Pre-Installation
                                         site Support; Installation. The Company shall assist the Purchaser with each
                                         prospective project site in preparing:

		(a)	A
                                         property site assessment to advise the Purchaser on the optimal location for installation
                                         of the Products on the landowner’s property; and

 

		(b)	A
                                         system design and the site characteristics to verify suitability.

The
Company agrees to advise Purchaser on location, site assessment, and installation of the Products, and shall provide to each prospective
site a written recommendation that all Products be installed by a professional who is licensed or qualified under applicable country,
state, or local laws and regulations.

 

    	4

    	 

    

 

		2.5	Company
                                         Obligations. The Company or its Affiliates shall:

		(i)	"Sell
                                         and deliver Products to Purchaser in accordance with this Agreement and the Procedures;

		(ii)	Provide
                                         Purchaser with the following, as determined by the Company:

(i) Project
management and full Installation services as required

		(ii)	Technical,
                                         engineering, and sales advice; and

(iii) General
sales and marketing information.

		(iii)	Furnish
                                         Purchaser with the following as determined by the Company:

(i) Catalogs,
sales promotion, and advertising materials;

		(ii)	Information
                                         on Products;

(iii) Recommended
stocking levels for Products;

(iv) Specifications,
instructions, and procedures necessary to assist Purchaser in servicing the Products and furnishing technical advice;

(v) Advice
and management as required regarding proper installation and service of Products; and

		(vi)	Copies
                                         of the following materials, as determined by the Company: Warranty Terms and Conditions,
                                         warnings, and safety alerts for Products.

 

		3)	Purchaser
                                         Orders

 

		3.1	Placement
                                         and Fulfillment of Orders. In placing its orders for Products, Purchaser shall
                                         take into consideration applicable manufacturing and delivery lead times as well as relevant
                                         forecasts.

 

 

		4)	Term
                                         and Effectiveness of Agreement.

 

		4.1	Term.
                                         This Agreement shall commence on the Effective Date and shall be effective for three
                                         years thereafter (the “Term”). The agreement shall automatically renew
                                         unless otherwise indicated in writing by either Party no later than 30 days prior to
                                         the expiration of the applicable Term.

 

		5)	Prices
                                         and Terms of Sale.

 

		5.1	Purchase
                                         of Products. The prices, payment terms, and other terms and conditions of sale
                                         applicable to Purchaser’s purchase of Products shall be, unless the Parties otherwise
                                         agree in writing, as set forth as follows:

 

			Pricing:
                                         The pricing (exclusive of sales tax, VAT, and shipping and delivery charges) shall be
                                         no greater than XZERES’ gold-level dealer pricing as defined on its standard pricing
                                         sheet, which is subject to updates from time to time with 30-day advance notice.
	 	 	 Payment
                                         Terms: Unless mutually agreed by both parties, payment terms shall be consistent with
                                         XZERES’ standard payment policy of 50% deposit on placement of orders, and balance
                                         due upon shipment to customer.

  

In
the event of a conflict between any terms in the Purchase Order and this Agreement, the terms contained in this Agreement shall
govern.

 

		6)	Purchaser
                                         Reports. Purchaser shall provide the Company from time to time with reports on
                                         such matters as the Company may reasonably request, including, without limitation, the
                                         warranty information form, the name and address of each project site, the address to
                                         which the Product was delivered, the date of delivery, the model or part number, and
                                         — if applicable — the serial number.

    	5

    	 

    
 

		7)	Warranty.

 

		7.1	The
                                         Company’s Limited Warranty. Except for the published five year standard
                                         warranty covering parts and labor which is set forth on Exhibit C or the optional
                                         extended warranty or protection plan, whichever is applicable, in effect from time to
                                         time for each Product, the Company makes no warranties to Purchaser regarding any Product.
                                         The sole remedy of Purchaser for breach of warranty is set forth in the Warranty Terms
                                         and Conditions applicable to each Product. The Company is offering the Purchaser the
                                         option to have an extended warranty for parts and labor for an additional five year period
                                         after the expiration of the initial five year standard warranty for an additional $5,000
                                         per Product. This amount can be paid up to the end of the original five year standard
                                         warranty period. Under no circumstances shall the Company be liable to Purchaser for
                                         punitive, incidental, or consequential damages, regardless of whether due to circumstances
                                         foreseeable by the Company. THE FOREGOING WARRANTY IS EXPRESSLY MADE IN LIEU OF ALL OTHER
                                         WARRANTIES, EXPRESS OR IMPLIED, WRITTEN OR ORAL, INCLUDING WITHOUT LIMITATION ANY IMPLIED
                                         WARRANTIES OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE.

 

		8)	Bodily
                                         Injury and Property Damage.

 

		8.1	Company’s
                                         Indemnity Obligations. During the Term of this Agreement and at all times thereafter,
                                         the Company shall defend, indemnify, and hold Purchaser harmless from and against any
                                         and all Bodily Injury and Property Damage Loss(es) to the extent such Bodily Injury and
                                         Property Damage Loss(es) result(s) from the negligent acts or omissions of the Company
                                         or from a defect in the manufacture or design of any Product by or on behalf of the Company.

 

		8.2	Purchaser’s
                                         Indemnity Obligations. During the Term of this Agreement and at all times thereafter,
                                         Purchaser shall defend, indemnify, and hold the Company harmless from any and all Bodily
                                         Injury and Property Damage Loss(es) to the extent such Bodily Injury and Property Damage
                                         Loss(es) result(s) from the negligent acts or omissions of Purchaser or Purchaser’s
                                         subcontractors, agents, employees, partners or their successors and assigns (“Purchaser
                                         Parties”) or from an Unauthorized Modification of any Product made by any
                                         of the Purchaser Parties.

 

		8.3	Mutual
                                         Disclaimers. Neither Party shall be liable to the other for Bodily Injury or
                                         Property Damage Loss(es) except as specifically provided in Sections 8.1 and 8.2.

 

		8.4	Insurance
                                         Obligations. During the Term and for no less than three (3) years thereafter,
                                         the Company will carry general and product liability insurance with aggregate limits
                                         (including umbrella coverage) of not less than One Million Dollars ($1,000,000) per occurrence.
                                         Upon request, the Company will furnish Purchaser with proof of such insurance. Such insurance
                                         shall name the Purchaser as an additional insured. Such coverage will provide that 30
                                         days’ written notice must be given to Purchaser prior to any cancellation or material
                                         amendment of any of the terms of such coverage.

 

		9)	Legal
                                         Compliance.

 

	 	9.1	Company’s
                                         Compliance Obligations. The Company shall observe all legal requirements that
                                         apply to sale of Products and shall arrange for, and bear the cost of, any government
                                         or third-party approval or certification of Products necessary for sale of Products.

 

		9.2	Compliance
                                         With Laws. The rights and obligations of the Parties under this Agreement are
                                         subject to all applicable laws, orders, and regulations of governments and governmental
                                         agencies having jurisdiction over the Parties. If any law, order, or regulation shall,
                                         in the judgment of either Party, substantially alter the relationship between the Parties,
                                         this Agreement, or the advantages derived from the Parties’ relationship, either
                                         Party may give Notice to the other Party requesting a modification to this Agreement.
                                         If, within 30 days after such a request has been made, the Parties are unable to agree
                                         upon a mutually satisfactory modification of this Agreement, then the adversely affected
                                         Party may terminate this Agreement with 15 days’ additional Notice given to the
                                         other Party.

 

		10)	Force
                                         Majeure. No Party shall be liable for delay in or failure of performance or nonperformance
                                         of its obligations under this Agreement (other than Purchaser’s obligation to pay
                                         for Products already shipped and the Company’s obligation to pay Purchaser any
                                         warranty service reimbursement, service fee, or other amount owing to Purchaser for services
                                         already performed) if such delay or failure results from events or circumstances that
                                         are not foreseeable and that are beyond the reasonable control of the Party affected
                                         (a “Force Majeure Event”). A Party affected by a Force Majeure
                                         Event shall provide prompt Notice thereof to the other, explaining the nature and expected
                                         duration of the Force Majeure Event, and shall act diligently to remedy the interruption
                                         or delay that is reasonably capable of being remedied. Any such delay or failure shall
                                         not constitute a Default under this Agreement, and the time for performance shall be
                                         extended by a period equivalent to the period of the Force Majeure Event. During a Force
                                         Majeure Event that causes a shortage of any Products, the Company shall fill pending
                                         dealer orders for those Products using such reasonable allocation as, in the judgment
                                         of the Company, may be necessary or equitable. The Parties shall work together to determine
                                         whether and when deliveries and acceptances of Products which have been suspended can
                                         be made up after the resumption of performance. In the event the Force Majeure Event
                                         extends for more than one month, this Agreement may be terminated by the Party not declaring
                                         Force Majeure upon Notice thereof to the other Party.

 

		11)	Termination.

 

		11.1	Failure
                                         to Cure Default. If either Party breaches a material obligation under this Agreement
                                         (other than as set forth in Section 11.3 below), the other Party may give the breaching
                                         Party Notice specifying the nature of the breach and requiring the breach to be remedied
                                         within 30 days (the “Cure Period”). If the breach is not remedied
                                         during the Cure Period, the breaching Party shall be in Default and the non-breaching
                                         Party may immediately terminate this Agreement by Notice after the end of the Cure Period,
                                         unless the non-breaching Party expressly waives its rights under this Section 11.1
                                         in writing. If the breach is remedied within the Cure Period but is thereafter repeated
                                         within a one-year period, the non-breaching Party may terminate this Agreement effective
                                         immediately upon Notice to the breaching Party.

 

    	6

    	 

    

  

		11.2	Immediate
                                         Termination Election. By Notice to Purchaser, the Company may terminate this
                                         Agreement effective immediately upon the occurrence of any of the following events:

		(i)	The
indictment or conviction of any owner or principal manager of Purchaser of a criminal offense which, in the opinion of the Company,
is likely to materially adversely affect the ownership, management, business, operations, financial condition, goodwill, or prospects
of Purchaser or the Company; or

 

		(ii)	Any
                                         transfer or assignment by Purchaser of this Agreement or any right or obligation of Purchaser
                                         under this Agreement without the prior written consent of the Company.

 

		11.3	Automatic
                                         Termination. This Agreement shall terminate automatically, without further action
                                         by either Party, if Purchaser or the Company ceases to do business in the ordinary course,
                                         ceases to exist, abandons the business operated under this Agreement, or becomes insolvent.

 

		11.4	Waiver.
                                         Neither Party shall be deemed to have waived its rights or any Default by the other
                                         unless such waiver is specific and in writing. By accepting orders from Purchaser, selling
                                         Products to Purchaser, or engaging in any other act after expiration or termination of
                                         this Agreement, the Company shall not be deemed to have renewed or extended this Agreement
                                         for any further period or to have waived expiration or termination of this Agreement.
                                         Failure of either Party at any time to require full performance of any provision of this
                                         Agreement, and any waiver by either Party of a breach of any provision of this Agreement
                                         shall not constitute a waiver of any subsequent breach or nullify the effectiveness of
                                         such provision.

 

		12)	Claims
                                         Relating to Termination of Agreement.

 

		12.1	Limitation
                                         of Liability. Purchaser agrees that if this Agreement terminates for any reason,
                                         or is not renewed, the Company shall not be liable for compensation, reimbursement, or
                                         damages, including claims of loss of clientele, prospective profits, or anticipated sales,
                                         or for other consequential, incidental, indirect, punitive, or special damages.

 

		12.2	Notice
                                         and Waiver of Claims. If Purchaser claims that a termination of this Agreement
                                         or failure to enter into a new Agreement upon expiration of the Term of this Agreement
                                         is improper, Purchaser shall so notify the Company in writing setting forth the basis
                                         for Purchaser’s claim. Any Notice of Purchaser’s claim must be made within
                                         30 days after receipt of the Notice of termination or other communication from the Company
                                         giving rise to Purchaser’s claim or 30 days after the Expiration Date, whichever
                                         is earlier. For 30 days after receipt of Notice of Purchaser’s claim (the “Reconsideration
                                         Period”), the Company shall have the option of rescinding the termination
                                         or offering Purchaser the opportunity to enter into another Agreement with terms and
                                         conditions substantially similar to those contained in this Agreement. If the Company
                                         exercises either option during the Reconsideration Period, Purchaser’s claim shall
                                         be extinguished. If Purchaser fails to notify the Company of any claim during the required
                                         notice of claim period set forth above, then Purchaser agrees that it shall have waived
                                         its claim.

 

		13)	Termination
                                         and Post-Termination Obligations.

 

		13.1	Monetary
                                         Obligations; Effect on Pending Orders. Neither termination nor expiration of
                                         this Agreement shall relieve either Party of the obligation to pay amounts accrued or
                                         due before the Termination Date. All sums owed by either Party to the other Party shall
                                         become due and payable immediately upon the Termination Date. Upon termination or expiration
                                         of this Agreement, the Company shall be obligated to fill any order placed and accepted
                                         before the Termination Date except in the event such termination by the Company is due
                                         to the failure by Purchaser to pay for the Products in accordance with the terms therein.

 

14)

 

		14.1	Limitation
                                         on Liability. PURCHASER and THE COMPANY
                                         each hereby waives, to the fullest extent permitted by law, and to the extent not already
                                         waived IN this Agreement, any right or claim for any special, punitive, consequential,
                                         OR indirect damages against the other and agree that if there is a dispute, a Party shall
                                         be limited to the recovery of “Actual Damages” sustained by it. As
                                         used herein, “Actual Damages” means direct and out-of-pocket costs and specifically
                                         excludes claims for loss of customers, prospective profits, or anticipated sales, or
                                         for other consequential, incidental, or indirect damages.

 

		15)	Notices.

 

		15.1	Form
                                         and Dispatch. All notices required or permitted to be given by one Party to the
                                         other pursuant to this Agreement (each a “Notice”) shall be
                                         in writing and shall be deemed to be valid and effective when delivered as set forth
                                         below by one Party to the other Party at its address set forth in this Agreement or at
                                         such other address(es), fax number(s) or e-mail addresses as may be communicated from
                                         time to time by one Party to the other by means of a Notice. Each Party agrees to provide
                                         the other Party at all times with current notice information, including address, fax
                                         number and a valid e-mail address.

 

		15.2	Delivery.
                                         A Notice shall be deemed to have been delivered:

(a) When
delivered by hand or courier service, at the time of delivery;

(b) When
sent by certified mail (return receipt requested) on the fifth day following the date of mailing;

		(c)	When
                                         sent by fax, on the date thereof, with confirmation of transmission; or

(d) When
sent by e-mail, at the time a “Read Receipt” is received.

 

    	7

    	 

    

  

		15.3	Notice
                                         of Claims. Each indemnified Party shall give the indemnifying Party prompt Notice
                                         of any claims, demands, or lawsuits (collectively, “Claim”) which
                                         may give rise to losses or any claim, demand or lawsuit which may give rise to any other
                                         type of liability. If the indemnified Party fails to provide such Notice with reasonable
                                         promptness after the indemnified Party receives notice of such Claim, the indemnifying
                                         Party shall not be obligated to indemnify the indemnified Party with respect to such
                                         Claim to the extent that the indemnifying Party’s ability to defend has been materially
                                         prejudiced by such failure of the indemnified Party. The Parties shall cooperate with
                                         each other in the defense against such claims, demands or lawsuits.

 

		16)	Miscellaneous.

 

		16.1	Waiver;
                                         Amendment. A waiver of a breach of any provision of this Agreement shall not
                                         be deemed to be a waiver of any succeeding breach of the same or any other provision
                                         of this Agreement. No amendment of this Agreement shall be valid or binding unless set
                                         forth in writing and duly executed by the Parties.

 

		16.2	Multiple
                                         Originals. This Agreement may be executed in any number of copies, each of which
                                         shall be deemed an original and all of which shall constitute one and the same agreement.

 

		16.3	Facsimile
                                         and Electronic Documents. For any transactions subject to this Agreement, facsimile
                                         or PDF signatures shall be accepted as original signatures. This Agreement or any document
                                         created pursuant to this Agreement may be maintained in an electronic document storage
                                         and retrieval system, a copy of which shall be considered an original. Neither Party
                                         shall raise any objection to the authenticity of this Agreement, or any document created
                                         under this Agreement, based on the use of a facsimile or PDF signature or the use of
                                         a copy retrieved from an electronic storage system. The placement of any orders or the
                                         transaction of any business by electronic medium shall be subject to the terms of this
                                         Agreement. Purchaser further expressly acknowledges and agrees that invoices, bills of
                                         lading, and other documents evidencing transactions under this Agreement may be issued
                                         in the name of the Company or any division or Affiliate of the Company and are enforceable
                                         according to their terms by the Company or the issuing Affiliate.

 

	 	16.4	Attorney
                                         Fees. If any judicial claim, suit, action, or proceeding or non-judicial dispute
                                         resolution, claim, or proceeding, including without limitation mediation, or any other
                                         form of non-judicial dispute resolution, is filed by either Party to enforce the provisions
                                         of this Agreement or the terms and conditions of purchase and sale of Products, the prevailing
                                         Party shall be entitled to recover reasonable attorneys’ fees (whether prior to
                                         or at trial or on any judicial appeal or in the course of any non-judicial dispute resolution).
                                         For purposes of this Agreement, the term “prevailing party” shall be deemed
                                         to include, without limitation, a Party that successfully opposes a petition for review
                                         filed with an appellate court. 

 

	 	16.5	Intellectual
                                         Property. The Company represents and warrants to Purchaser that no Product sold
                                         to Purchaser (including any designs of, or methods for manufacture of, the Product) violates,
                                         infringes or interferes with any intellectual property right or other proprietary right
                                         of any third party (including any claimed patent, trademark, trade name, service mark
                                         or other intellectual property right). If, as a result of any suit or proceeding relating
                                         to such infringement described in this Section, the use of any Product, or any part thereof,
                                         purchased by Purchaser from the Company hereunder is enjoined, in addition to (and not
                                         in lieu of) any other remedies, the Company shall, at its sole cost and expense and option,
                                         either (a) procure the right for Purchaser, any of its affiliates to use such Product,
                                         or any part thereof, (b) replace the same with interchangeable Product, or parts thereof,
                                         which have substantially the same quality and performance but which are non-infringing,
                                         (c) modify the infringing Product, or parts thereof, so they become non-infringing, or
                                         (d) authorize Purchaser to return said enjoined Product and refund to Purchaser the full
                                         purchase price (including transportation and other costs arising from the litigation
                                         or claim).

 

	 	16.6	Recalls.For
                                         twenty years after the Effective Date, if Purchaser, the Company or any governmental
                                         agency having jurisdiction finds at any time that any Products contain a defect or a
                                         serious quality or performance deficiency, or are not in compliance with any applicable
                                         code, standard or requirement, making it advisable that the affected Products be recalled
                                         or repaired, the Company shall (at its sole cost and expense) promptly undertake appropriate
                                         corrective actions including those required by any applicable consumer protection or
                                         similar law and the regulations thereunder, and shall file all necessary papers, descriptions
                                         of corrective action programs, and other related documents and carry out corrective action
                                         programs. Purchaser shall cooperate with and assist the Company in any such filing and
                                         in taking corrective action. The Company shall make all necessary repairs or modifications
                                         to the affected Products, at its sole cost and expense, except to the extent that the
                                         Company and Purchaser agree to the performance of such repairs by Purchaser upon mutually
                                         acceptable terms.

 

[Signature
page follows]

 

    	8

    	 

    

 

IN
WITNESS WHEREOF, each of the Parties has caused this Master Purchase Agreement to be duly executed by its authorized representative
as of the Effective Date.

 

	XZERES Corp.	Gale Force Master Fund L.P.
	 	 
	By: /s/ Authorized Signatory	By: /s/ Authorized Signatory
	Name:	Name:
	Title:	Title:

 

    	9

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