EX-10.1






Exhibit 10.1




SHARE PURCHASE AGREEMENT




THIS SHARE PURCHASE AGREEMENT (the “Agreement”), dated as of the       16       day of April 2010 (the
“Effective Date”), is made by and between VIASPACE INC., a Nevada corporation (the “Parent”), and
Sung Hsien Chang, an individual resident of the State of Georgia (“Shareholder”).



BACKGROUND




Shareholder desires to sell to Parent, and Parent desires to acquire from Shareholder all of the
VGE Shares (as defined below) in exchange for 241,667,000 shares of Parent’s Common Stock (as
defined below) (the “Acquisition Common Shares”), one share of Parent’s Preferred Stock (as defined
below) (together, the “Parent Shares”) and the Secured Promissory Note and other Security Documents
(as such phrases are defined below) on the terms and conditions described in this Agreement.
Immediately following the Effective Date, the Acquisition Common Shares shall constitute shall
constitute 20.47% of all of the issued and outstanding shares of Parent’s Common Stock. As of the
Effective Date, VIASPACE Green Energy, Inc. (“VGE”) had 50,000,000 authorized shares of common
stock ($0.001 par value) (the “VGE Common Stock”), of which 8,600,000 were issued and outstanding.
Of the issued and outstanding shares, Shareholder owns or holds rights in 6,906,000 shares of VGE
Common Stock or 80.30%, has agreed under this Agreement to sell 6,506,000 shares thereof (for
purposes of this Agreement, such shares to be sold hereunder shall be referred to as the “VGE
Shares”).



SECTION I

DEFINITIONS




Unless the context otherwise requires, the terms defined in this Section will have the meanings
herein specified for all purposes of this Agreement, applicable to both the singular and plural
forms of any of the terms herein defined.




	1.1	 	“Accredited Investor” has the meaning set forth in Regulation D under the Securities Act.






	1.2	 	“Parent Board” means the Board of Directors of Parent.






	1.3	 	“Parent’s Common Stock” means the VIASPACE Inc., common stock, par value $0.001 per share.






	1.4	 	“Parent’s Preferred Stock” shall mean that single share of Parent’s capital stock designated
in its Articles of Incorporation, as amended, as Series A Preferred Stock and limited and
preferred as to dividends and do not participate in corporate growth to any significant extent
as defined therein, which shares shall grant Shareholder the right to cast that number of
votes as shall equal 50.1% of all votes that may be cast in any matter on which shareholders
of Parent are or shall be entitled to vote, without regard to the number of issued and
outstanding shares of Parent capital stock, whether as of the Closing Date or any date
thereafter and the right to approve the issuance of any other series of preferred stock or
additional shares of Series A preferred stock.






	1.5	 	“Affiliate” means any Person that directly or indirectly controls, is controlled by or is
under common control with the indicated Person.






	1.6	 	“Agreement” means this Share Purchase Agreement, including all Schedules and Exhibits hereto,
as this Share Purchase Agreement may be from time to time amended, modified or supplemented.






	1.7	 	“Charter Amendment” shall mean the Certificate of Designation to the Parent’s Articles of
Incorporation, pursuant to which the Parent’s Preferred Stock shall be duly authorized for
issuance, the form of which is attached hereto and marked as Exhibit “F.”






	1.8	 	“Closing Date” has the meaning set forth in Section 3.






	1.9	 	“Code” means the Internal Revenue Code of 1986, as amended.






	1.10	 	“Commission” means the Securities and Exchange Commission of the United States of America or
any other federal agency then administering the Securities Act.






	1.11	 	“Exchange Act” means the Securities Exchange Act of 1934 or any similar federal statute, and
the rules and regulations of the Commission thereunder, all as the same will then be in
effect.






	1.12	 	“Exhibits” means the several exhibits referred to and identified in this Agreement.






	1.13	 	“IPA BVI” means Inter-Pacific Arts Corp., a British Virgin Islands international business
company.






	1.14	 	“IPA China” means Guangzhou Inter-Pacific Arts Corp., a Chinese wholly-owned foreign
enterprise registered in Guangdong province.






	1.15	 	“Governmental Authority” means any federal or national, state or provincial, municipal or
local government, governmental authority, regulatory or administrative agency, governmental
commission, department, board, bureau, agency or instrumentality, political subdivision,
commission, court, tribunal, official, arbitrator or arbitral body, in each case whether U.S.
or non-U.S.






	1.16	 	“Guaranty Agreement” shall mean that agreement substantially in the form attached hereto and
marked as Exhibit “A,” pursuant to which each of VGE, IPA BVI and IPA China shall guaranty the
Secured Promissory Note.






	1.17	 	“Knowledge” means actual knowledge without any independent investigation or due diligence.
In the case of an entity, Knowledge shall mean the actual knowledge without any independent
investigation of such entity’s board of directors, president & CEO and Chief Financial
Officer.






	1.18	 	“Laws” means, with respect to any Person, any U.S. or non-U.S. federal, national, state,
provincial, local, municipal, international, multinational or other law (including common
law), constitution, statute, code, ordinance, rule, regulation or treaty applicable to such
Person.






	1.19	 	“Lien” means any mortgage, pledge, security interest, encumbrance, lien or charge of any
kind, including, without limitation, any conditional sale or other title retention agreement,
any lease in the nature thereof and the filing of or agreement to give any financing statement
under the Uniform Commercial Code of any jurisdiction and including any lien or charge arising
by Law.






	1.20	 	“Order” means any award, decision, injunction, judgment, order, ruling, subpoena, or verdict
entered, issued, made, or rendered by any Governmental Authority.






	1.21	 	“Organizational Documents” means (a) the articles or certificate of incorporation and the
bylaws or code of regulations of a corporation; (b) the partnership agreement and any
statement of partnership of a general partnership; (c) the limited partnership agreement and
the certificate of limited partnership of a limited partnership; (d) the articles or
certificate of formation and operating agreement of a limited liability company; (e) any other
document performing a similar function to the documents specified in clauses (a), (b), (c) and
(d) adopted or filed in connection with the creation, formation or organization of a Person;
and (f) any and all amendments to any of the foregoing.






	1.22	 	“Person” means all natural persons, corporations, business trusts, associations, companies
partnerships, limited liability companies, joint ventures and other entities, governments,
agencies and political subdivisions.






	1.23	 	“Registration Rights Agreement” means that certain agreement to be entered into by and
between VIASPACE and Shareholder pursuant to which VIASPACE agrees to grant to Shareholder
unlimited “piggyback rights” and demand registration rights and such other terms and
conditions are usual and customary for such agreements and acceptable to Shareholder, the form
of which is attached hereto and marked as Exhibit “G,” and an agreement in substantially the
same form thereof to be entered into by and between VGE and Shareholder with respect to the
            shares VGE Common Stock retained by him after the Closing






	1.24	 	“Proceeding” means any action, arbitration, audit, hearing, investigation, litigation, or
suit (whether civil, criminal, administrative or investigative) commenced, brought, conducted,
or heard by or before, or otherwise involving, any Governmental Authority.






	1.25	 	“Regulation S” means Regulation S under the Securities Act, as the same may be amended from
time to time, or any similar rule or regulation hereafter adopted by the Commission.






	1.26	 	“Reversion” shall mean the reversion to Shareholder of the Reversion Shares.






	1.27	 	“Reversion Shares” shall mean those 5.1 million shares of VGE common stock that reverted to
Shareholder upon the failure of the Second Closing (as such phrase is defined in the SPA) in
accordance with the SPA.






	1.28	 	“Rule 144” means Rule 144 under the Securities Act, as the same may be amended from time to
time, or any successor statute.






	1.29	 	“Schedules” means the several schedules referred to and identified herein, setting forth
certain disclosures, exceptions and other information, data and documents referred to at
various places throughout this Agreement.






	1.30	 	“SEC Documents” has the meaning set forth in Section 5.1.






	1.31	 	“Section 4(2)” means Section 4(2) under the Securities Act, as the same may be amended from
time to time, or any successor statute.






	1.32	 	“Secured Promissory Note” shall mean that certain Secured Promissory Note issued by Parent to
Shareholder in the principal amount as described therein, substantially in the form attached
hereto and marked as Exhibit “B.”






	1.33	 	“Securities Act” means the Securities Act of 1933, as amended, or any similar federal
statute, and the rules and regulations of the Commission thereunder, all as the same will be
in effect at the time.






	1.34	 	“Security Agreement” shall mean that form of agreement in substantially the form attached
hereto and marked as Exhibit “C,” pursuant to which each of VGE, IPA BVI and IPA China shall
pledge as collateral its respective assets for the Secured Promissory Note.






	1.35	 	“Security Documents” shall mean the Secured Promissory Note, Stock Pledge Agreements,
Security Agreements and Guaranty Agreement.






	1.36	 	“Senior Management Agreements” shall have the meaning ascribed thereto in Section 7.4.4 of
this Agreement, with the form of Senior Executive Employment Agreement being marked as Exhibit
H.






	1.37	 	“SPA” shall mean that certain Securities Purchase Agreement entered into by and among Parent,
VGE and Shareholder, et al., as of the 21st day of October 2008.






	1.38	 	“Stock Pledge Agreement” shall mean that form of agreement in substantially the form attached
hereto and marked as Exhibit “D,” pursuant to which each VIASPACE shall pledge the VGE Shares,
VGE shall pledge its ownership interest in IPA BVI, and IPA BVI shall pledge its ownership
interest in IPA China as collateral for the Secured Promissory Note issued to Shareholder.






	1.39	 	“Survival Period” has the meaning set forth in Section 10.1.






	1.40	 	“Transaction Documents” means, collectively, all agreements, instruments and other documents
to be executed and delivered in connection with the transactions contemplated by this
Agreement, including, without limitation, this Agreement, the Charter Amendment and each of
the Security Documents.






	1.41	 	“U.S.” means the United States of America.






	1.42	 	“U.S. Person” has the meaning set forth in Regulation S under the Securities Act.





SECTION II

EXCHANGE OF SHARES AND SHARE CONSIDERATION




2.1 Share Exchange. Shareholder hereby transfers to, and Parent hereby acquires from Shareholder,
the VGE Shares for and in consideration of the Parent Shares, the Secured Promissory Note and all
other Security Documents, all being subject to the terms and conditions of in this Agreement. For
purposes of this Agreement, the VGE Shares shall be issued in the name of VIASPACE but delivered to
Shareholder as pledgee of VIASPACE under and in accordance with the Stock Pledge Agreement to be
executed at Closing by VIASPACE.



2.2 Directors of Parent at Closing. At the Closing, the Parent Board shall have the authority
under Parent’s Organizational Documents to appoint Sung Hsien Chang and two additional individuals
as additional members of Parent Board.



SECTION III

CLOSING




The closing (the “Closing”) of the transactions contemplated under this Agreement and the other
Transaction Documents will occur at the offices of McDaniel Law Group, PC in Atlanta, Georgia,
commencing at 9:00 a.m. local time on the second business day following the satisfaction or waiver
of all conditions to the obligations of the Parties to consummate the transactions contemplated
hereby (other than conditions with respect to actions the respective Parties will take at the
Closing itself) or such other date as the Parties may mutually determine (the “Closing Date”);
provided, however, that the Closing Date shall be no earlier than April 16, 2010.
At the Closing, Shareholder will deliver to Parent certificate(s) evidencing the number of VGE
Shares held by Shareholder against delivery to Shareholder by Parent of a certificate evidencing
Shareholder’s Parent Shares and the Secured Promissory Note and all other Transaction Documents.



SECTION IV

REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS




4.1 Generally. Except as otherwise provided in Schedule 4.1, Shareholder hereby represents and
warrants to Parent:




4.1.1 Authority. Shareholder has the right, power, authority and capacity to execute and
deliver this Agreement and each of the Transaction Documents to which Shareholder is a
party, to consummate the transactions contemplated by this Agreement and each of the
Transaction Documents to which Shareholder is a party, and to perform Shareholder’s
obligations under this Agreement and each of the Transaction Documents to which Shareholder
is a party. This Agreement has been, and each of the Transaction Documents to which
Shareholder is a party will be, duly and validly authorized and approved, executed and
delivered by Shareholder. Assuming this Agreement and the Transaction Documents have been
duly and validly authorized, executed and delivered by the parties thereto other than
Shareholder, this Agreement is, and as of the Closing each of the Transaction Documents to
which Shareholder is a party will have been, duly authorized, executed and delivered by
Shareholder and constitute or will constitute the legal, valid and binding obligation of
Shareholder, enforceable against Shareholder in accordance with their respective terms,
except as such enforcement is limited by general equitable principles, or by bankruptcy,
insolvency and other similar Laws affecting the enforcement of creditors rights generally.




4.1.2 No Conflict. Neither the execution or delivery by Shareholder of this Agreement or
any Transaction Document to which Shareholder is a party, nor the consummation or
performance by Shareholder of the transactions contemplated hereby or thereby will, directly
or indirectly, (a) contravene, conflict with, constitute a default (or an event or condition
which, with notice or lapse of time or both, would constitute a default) under, or result in
the termination or acceleration of, any agreement or instrument to which Shareholder is a
party or by which the properties or assets of Shareholder are bound; or (b) contravene,
conflict with, or result in a violation of, any Law or Order to which Shareholder, or any of
the properties or assets of Shareholder, may be subject.




4.1.3 Ownership of Shares. To his Knowledge and subject to the enforceability and
performance of the Reversion, as of Closing, Shareholder owns or will own, of record and
beneficially, and has or will have good, valid and indefeasible title to and the right to
transfer to Parent pursuant to this Agreement Shareholder’s VGE Shares free and clear of any
and all Liens other than Liens attributable to acts or omissions of Parent or any Affiliate
thereof.




To Shareholder’s Knowledge, as of the Closing Date, assuming that the representations in
Section 5.7.1 are true and correct and the enforceability and performance of the Reversion,
(i) the VGE Shares are free and clear of any and all Liens that exist as of the Closing as
and to the extent the same shall have been caused by Shareholder in his individual capacity
during the period from February 15, 2010, (ii) VGE will own 100% of the equity interests of
IPA BVI (the “IPA BVI Equity”), (iii) IPA BVI will own 100% of the equity interests of IPA
China (the “IPA China Equity”).




To Shareholder’s Knowledge, as of the Closing, the “IPA BVI Equity owned by VGE prior to
Closing” and the “IPA China Equity” are free and clear of any and all Liens as and to the
extent the same shall have been caused by Shareholder in his individual capacity during the
period from February 15, 2010, other than (x) the “rights held by VGE in the IPA BVI Equity”
and “rights held by IPA BVI and Shareholder in IPA China” and (y) any Lien of which Parent
is aware; provided, however, that such awareness shall not constitute a
waiver of any claim Parent may have under the SPA; (iv) the “IPA BVI Equity owned by
Shareholder prior to Closing” being free and clear of any and all Liens as and to the extent
the same shall have been caused by Shareholder since October 21, 2008, excluding any Lien of
which Parent has Knowledge; provided, however, that such awareness shall not
constitute a waiver of any claim Parent may have under the SPA (phrases within quotation
marks (“”) shall be subject to definitions that shall be provided by the Parties prior to
closing and added to the appropriate disclosure schedule that shall be attached hereto and
made a part hereof (the “Definition Schedule”). To Shareholder’s Knowledge, there are no
options, rights, voting trusts, stockholder agreements or any other contracts or
understandings to which Shareholder is a party or by which Shareholder or Shareholder’s
Shares are bound with respect to the issuance, sale, transfer, voting or registration of
Shareholder’s VGE Shares. For the period from February 15, 2010, to Shareholder’s
Knowledge, there are no options, rights, voting trusts, stockholder agreements or any other
contracts or understandings to which IPA BVI, IPA China is a party or by which equity
interests of IPA BVI and IPA China are bound with respect to the issuance, sale, transfer,
voting or registration of such equity interests.




4.1.3 Litigation. To Shareholder’s Knowledge, there is no pending Proceeding against
Shareholder that challenges, or may have the effect of preventing, delaying or making
illegal, or otherwise interfering with, any of the transactions contemplated by this
Agreement and, to the Knowledge of Shareholder, no such Proceeding has been threatened, and
no event or circumstance exists that is reasonably likely to give rise to or serve as a
basis for the commencement of any such Proceeding other than those Liens of which Parent has
Knowledge.




4.1.4 No Brokers or Finders. No Person has, or as a result of the transactions contemplated
herein will have, any right or valid claim against Shareholder for any commission, fee or
other compensation as a finder or broker, or in any similar capacity.



4.2 Investment Representations. Shareholder hereby represents and warrants to Parent:




4.2.1 Restricted Securities. Shareholder is acquiring the Parent Shares for Shareholder’s
own account (and not for the account of others) for investment and not with a view to the
distribution thereof. Shareholder acknowledges that such shares will not be registered
pursuant to the Securities Act of 1933, as amended (the “Securities Act”) or any applicable
state securities laws, that such shares will be characterized as “restricted securities”
under federal securities laws, and that under such laws and applicable regulations such
            shares cannot be sold or otherwise disposed of without registration under the Securities Act
or an exemption therefrom. In this regard, Shareholder is familiar with Rule 144
promulgated under the Securities Act (which can be found at
http://www.sec.gov/investor/pubs/rule144.htm), as currently in effect, and understands the
resale limitations imposed thereby and by the Securities Act; and, Shareholder agrees not to
sell or otherwise dispose of such shares without such registration or an exemption
therefrom.




4.2.2 Accredited Investor; Non-U.S. Person. Shareholder is an “Accredited Investor” as that
term is defined in Rule 501 of Regulation D of the Securities Act or is not a “U.S. Person”
as such term is defined by Rule 902 of Regulation S of the Securities Act. Shareholder is
able to bear the economic risk of acquiring Parent Shares pursuant to the terms of this
Agreement, including a complete loss of investment in such shares.




4.2.3 Stock Legends. Shareholder hereby agrees with Parent as follows:




(a) Securities Act Legend — Accredited Investors. The certificates evidencing
Parent Shares issued to Shareholder, and each certificate issued in transfer
thereof, will bear the following legend:




THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY STATE SECURITIES LAWS AND
NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED,
ASSIGNED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR (2)
PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.




(b) If the Shareholder is not a U.S. person, such certificate shall bear the
following legend:




THE SECURITIES REPRESENTED HEREBY HAVE BEEN OFFERED IN AN OFFSHORE TRANSACTION TO A
PERSON WHO IS NOT A U.S. PERSON (AS DEFINED HEREIN) PURSUANT TO REGULATION S UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”). NONE OF THE
SECURITIES REPRESENTED HEREBY HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR ANY U.S.
STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, MAY NOT BE OFFERED OR SOLD,
DIRECTLY OR INDIRECTLY, IN THE UNITED STATES (AS DEFINED HEREIN) OR TO U.S. PERSONS
EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE 1933 ACT,
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE
STATE SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES
MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT. “UNITED STATES” AND
“U.S. PERSON” ARE AS DEFINED BY REGULATION S UNDER THE 1933 ACT.



SECTION V

REPRESENTATIONS AND WARRANTIES OF THE PARENT




Parent represents and warrants to Shareholder as follows:



5.1 Organization and Qualification. Parent is duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization, has all requisite authority and power
(corporate and other), governmental licenses, authorizations, consents and approvals to carry on
its business as presently conducted and to own, hold and operate its properties and assets as now
owned, held and operated by it, except where the failure to be so organized, existing and in good
standing, or to have such authority and power, governmental licenses, authorizations, consents or
approvals would not have a material adverse effect. Parent is duly qualified, licensed or
domesticated as a foreign corporation in good standing in each jurisdiction wherein the nature of
its activities or its properties owned, held or operated makes such qualification, licensing or
domestication necessary, except where the failure to be so duly qualified, licensed or domesticated
and in good standing would not have a material adverse effect.



5.2 Organizational Documents. True, correct and complete copies of the Organizational Documents of
Parent have been delivered to Shareholder immediately prior to the execution of this Agreement, and
no action has been taken to amend or repeal such Organizational Documents except for the filing of
the Charter Amendment of Parent prior to the Closing Date. Parent is not in violation or breach of
any of the provisions of its Organizational Documents.



5.3 Authorization. Parent has all requisite authority and power (corporate and other),
governmental licenses, authorizations, consents and approvals to enter into this Agreement and each
of the Transaction Documents to which Parent is a party, to consummate the transactions
contemplated by this Agreement and each of the Transaction Documents to which Parent is a party and
to perform its obligations under this Agreement and each of the Transaction Documents to which
Parent is a party. The execution, delivery and performance by Parent of this Agreement and each of
the Transaction Documents to which Parent is a party have been duly authorized by all necessary
corporate action and do not require from Parent Board or the stockholders of Parent any consent or
approval that has not been validly and lawfully obtained. The execution, delivery and performance
by Parent of this Agreement and each of the Transaction Documents to which Parent is a party
requires no authorization, consent, approval, license, exemption of or filing or registration with
any Governmental Authority or other Person other than such customary filings with the Commission
for transactions of the type contemplated by this Agreement, if required.



5.4 No Violation. Neither the execution or delivery by Parent of this Agreement or any Transaction
Document to which Parent is a party, nor the consummation or performance by Parent of the
transactions contemplated hereby or thereby will, directly or indirectly, (a) contravene, conflict
with, or result in a violation of any provision of the Organizational Documents of Parent; (b)
contravene, conflict with, constitute a default (or an event or condition which, with notice or
lapse of time or both, would constitute a default) under, or result in the termination or
acceleration of, or result in the imposition or creation of any Lien under, any agreement or
instrument to which Parent is a party or by which the properties or assets of Parent are bound; (c)
contravene, conflict with, or result in a violation of, any Law or Order to which Parent, or any of
the properties or assets owned or used by Parent may be subject; or (d) contravene, conflict with,
or result in a violation of, the terms or requirements of, or give any Governmental Authority the
right to revoke, withdraw, suspend, cancel, terminate or modify, any licenses, permits,
authorizations, approvals, franchises or other rights held by Parent or that otherwise relate to
the business of, or any of the properties or assets owned or used by, Parent, except, in the case
of clause (b), (c), or (d), for any such contraventions, conflicts, violations, or other
occurrences as would not have a material adverse effect.



5.5 Binding Obligations. Assuming this Agreement and the Transaction Documents have been duly and
validly authorized, executed and delivered by the parties thereto other than Parent, this Agreement
has been, and as of the Closing each of the Transaction Documents to which Parent is a party will
be, duly authorized, executed and delivered by Parent and constitutes or will constitute, as the
case may be, the legal, valid and binding obligations of Parent, enforceable against Parent in
accordance with their respective terms, except as such enforcement is limited by general equitable
principles, or by bankruptcy, insolvency and other similar Laws affecting the enforcement of
creditors rights generally.



5.6 Securities Laws. Assuming that the representations of Shareholder in Section 4.2 are true and
correct, the issuance of Parent Shares pursuant to this Agreement are and will be (a) exempt from
the registration and prospectus delivery requirements of the Securities Act, and (b) accomplished
in conformity with all applicable federal securities laws.



5.7 Capitalization and Related Matters.




5.7.1 Absence of Liens. As of the Reversion, the VGE Shares, the IPA BVI Equity and the IPA
China Equity were, to the Knowledge of Parent, free and clear of any and all Liens arising
from any action on the part of Parent, VGE, IPA BVI or IPA China since October 21, 2008.




5.7.2 Capitalization. On the Effective Date, the authorized capital stock of Parent
consists of 1,500,000,000 shares of Parent’s Common Stock, of which 938,970,128 shares are
issued and outstanding, and 10,000,000 authorized shares of Parent “blank check” preferred
stock, none of which are issued and outstanding prior to the Closing. All issued and
outstanding shares of Parent’s Common Stock are duly authorized, validly issued, fully paid
and nonassessable, and have not been issued in violation of any preemptive or similar
rights. On the Closing Date, Parent will have sufficient authorized and unissued Parent’s
Common Stock and Parent’s Preferred Stock to consummate the transactions contemplated
hereby. On the Effective Date there are 57,668,462 options outstanding and 624,000 warrants
outstanding as of the date of this transaction. There are no other outstanding purchase
agreements, participation agreements, subscription rights, conversion rights, exchange
rights or other securities or contracts that could require Parent to issue, sell or
otherwise cause to become outstanding any of its authorized but unissued shares of capital
stock or any securities convertible into, exchangeable for or carrying a right or option to
purchase shares of capital stock or to create, authorize, issue, sell or otherwise cause to
become outstanding any new class of capital stock. There are no outstanding stockholders’
agreements, voting trusts or arrangements, registration rights agreements, rights of first
refusal or other contracts pertaining to the capital stock of Parent. Assuming that the
representations in Section 4.2 are correct, the issuance of all of the shares of Parent’s
Common Stock and Parent Preferred Stock described in this Section have been or shall be as
of Closing in compliance with U.S. federal securities laws.




5.7.3 Upon the Effective Date, there are 8,600,000 shares of VGE Common Stock issued and
outstanding.




5.7.4 Duly Authorized. The issuance of Parent Shares has been duly authorized and, upon
delivery to Shareholder of certificates therefore in accordance with the terms of this
Agreement, Parent Shares will have been validly issued and fully paid, and will be
nonassessable, have the rights, preferences and privileges specified, will be free of
preemptive rights and will be free and clear of all Liens and restrictions, other than
restrictions on transfer imposed by this Agreement and the Securities Act.



5.8 Compliance with Laws. Except as would not have a material adverse effect, the business and
operations of Parent has been and are being conducted in accordance with all applicable Laws and
Orders. Parent has not received notice of any violation (or any Proceeding involving an allegation
of any violation) of any applicable Law or Order by or affecting Parent or, to Parent’s Knowledge,
VGE and, to the knowledge of Parent, no Proceeding involving an allegation of violation of any
applicable Law or Order is threatened or contemplated. Parent is not subject to any obligation or
restriction of any kind or character, nor is there, to the knowledge of Parent, any event or
circumstance relating to Parent that materially and adversely affects in any way its business,
properties, assets or prospects or that prohibits Parent from entering into the Transaction
Documents or would prevent or make burdensome its performance of or compliance with all or any part
of the Transaction Documents or the consummation of the transactions contemplated hereby or
thereby.



5.9 Certain Proceedings. There is no pending Proceeding that has been commenced against Parent and
that challenges, or may have the effect of preventing, delaying, making illegal, or otherwise
interfering with, any of the transactions contemplated by this Agreement. To the knowledge of
Parent, no such Proceeding has been threatened.



5.10 No Brokers or Finders. No Person has, or as a result of the transactions contemplated herein
will have, any right or valid claim against Parent for any commission, fee or other compensation as
a finder or broker, or in any similar capacity.



5.11 SEC Documents; Financial Statements. Parent has filed all reports required to be filed by it
under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the three years
preceding the date hereof (or such shorter period as Parent was required by law to file such
material) (the foregoing materials being collectively referred to herein as the “SEC Documents”)
and is current with respect to its Exchange Act filing requirements. As of their respective dates,
the SEC Documents complied in all material respects with the requirements of the Securities Act and
the Exchange Act and the rules and regulations of the Commission promulgated thereunder, and none
of the SEC Documents, when filed, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to make the statement
therein, in light of the circumstances under which they were made, not misleading. All material
agreements to which Parent is a party or to which the property or assets of Parent are subject have
been appropriately filed as exhibits to the SEC Documents as and to the extent required under the
Exchange Act. The financial statements of Parent included in the SEC Documents comply in all
material respects with applicable accounting requirement and the rules and regulations of the
Commission with respect thereto as in effect at the time of filing, were prepared in accordance
with GAAP applied on a consistent basis during the periods involved (except as may be indicated in
the notes thereto, or, in the case of unaudited statements as permitted by Form 10-Q of the
Commission), and fairly present in all material respects (subject in the case of unaudited
statements, to normal, recurring audit adjustments) the financial position of Parent as at the
dates thereof and the results of its operations and cash flows for the periods then ended.
Notwithstanding the foregoing, Parent shall not be deemed to be in breach of this Section 5.11 if
such breach was caused as a result of erroneous or misleading information or material provided to
Parent by Shareholder and any such error or mistake was not known or should not have been known by
Parent at the time of filing the SEC Document or is not otherwise attributable to any act or
omission on the part of Parent. Parent’s Common Stock is listed on the OTC Bulletin Board, under
the symbol VSPC.OB and Parent is not aware of any facts which would make Parent’s Common Stock
ineligible for continued quotation on the OTC Bulletin Board.



SECTION VI

COVENANTS




6.1 Resale of the Parent Shares. So long as Shareholder retains at least 25% of the shares of
Parent Common Stock he holds as of the Effective Date, Parent will take all action under its
control that is necessary to permit Shareholder to resell the Parent Shares beginning on Closing
Date or 6 months after the date of issuance of the Parent Shares, whichever is later, in accordance
with Rule 144 promulgated by the Securities and Exchange Commission.



6.2 Restrictive Legends. Each certificate representing Parent Shares, and any other securities
issued in respect of shares upon any stock split, stock dividend, recapitalization, merger,
consolidation or similar event (except as otherwise permitted by the provisions of this Section ),
shall be stamped or otherwise imprinted with legends specified in Section 4.2.3 together with any
other legends required by applicable securities laws.



6.3 Rule 144 Reporting. With a view to making available to Parent’s stockholders the benefit of
certain rules and regulations of the Commission which may permit the sale of Parent Common Stock to
the public without registration, from and after the Closing Date, Parent agrees to:




6.3.1 Make and keep public information available, as those terms are understood and defined
in Rule 144; and




6.3.2 File with the Commission, in a timely manner, all reports and other documents required
of Parent under the Exchange Act.



6.4 As of the Closing, Shareholder shall cause VGE to provide VIASPACE’s president and CEO the
power to co-endorse corporate checks on behalf of VGE, IPA BVI and IPA China, respectively.



6.5 Each of the Parties further agree that additional changes to the Security Documents may be made
before Closing for the purpose of conforming each such document to the terms of the transactions
contemplated by this Agreement, including, without limitation, Shareholder making such changes as
he deems necessary to obtain and secure under applicable laws a security interest in the Collateral
and shares pledged as indicated under each such Security Document, and to take into account any
ministerial or administrative issues.



SECTION VII

CONDITIONS PRECEDENT TO THE PARENT’S OBLIGATION TO CLOSE




Parent’s obligation to acquire the VGE Shares, execute and deliver the Security Documents and to
take the other actions required to be taken by Parent at the Closing are subject to the
satisfaction, at or prior to the Closing, of each of the following conditions (any of which may be
waived by Parent, in whole or in part):



7.1 Accuracy of Representations. The representations and warranties of Shareholder set forth in
this Agreement or in any Schedule or certificate delivered pursuant hereto that are not qualified
as to materiality shall be true and correct in all material respects as of the date of this
Agreement, and shall be deemed repeated as of the Closing Date and shall then be true and correct
in all material respects, except to the extent a representation or warranty is expressly limited by
its terms to another date and without giving effect to any supplemental Schedule. The
representations and warranties of Shareholder set forth in this Agreement or in any Schedule or
certificate delivered pursuant hereto that are qualified as to materiality shall be true and
correct in all respects as of the date of this Agreement, and shall be deemed repeated as of the
Closing Date and shall then be true and correct in all respects, except to the extent a
representation or warranty is expressly limited by its terms to another date and without giving
effect to any supplemental Schedule.



7.2 Performance by Shareholder.




	 	7.2.1	 	All of the covenants and obligations that Shareholder is required to perform
or to comply with pursuant to this Agreement at or prior to the Closing (considered
collectively), and each of these covenants and obligations (considered individually),
must have been duly performed and complied with in all material respects.






	 	7.2.2	 	Each document required to be delivered by Shareholder pursuant to this
Agreement at or prior to Closing must have been delivered.






	 	7.2.3	 	Certificate of Shareholder. Shareholder will have delivered to Parent a
certificate, dated the Closing Date, executed by such Shareholder certifying the
satisfaction of the conditions specified in Sections 7.1 and 7.2.





7.3 Consents. All material consents, waivers, approvals, authorizations or orders required to be
obtained, and all filings required to be made, by Shareholder for the authorization, execution and
delivery of this Agreement and the consummation by him of the transactions contemplated by this
Agreement, shall have been obtained and made by Shareholder, except where the failure to receive
such consents, waivers, approvals, authorizations or orders or to make such filings would not have
a material adverse effect on Shareholder.



7.4 Documents. Shareholder must have caused the following documents to be delivered to Parent:




	 	7.4.1	 	Share certificates evidencing the number of VGE Shares held by Shareholder,
along with executed stock powers, transferring such Shares to Parent; provided,
however, that such certificate shall be issued in the name of VIASPACE but retained by
Shareholder as pledgee of VIASPACE along with properly executed assignments separate
from stock certificates as and to the extent described under the Stock Pledge Agreement
applicable thereto;






	 	7.4.2	 	Each of the Transaction Documents to which Shareholder is a party, duly
executed; and






	 	7.4.3	 	Such other documents as Parent may reasonably request for the purpose of (i)
evidencing the accuracy of any representation or warranty of Parent, (ii) evidencing
the performance of, or compliance by Shareholder with, any covenant or obligation
required to be performed or complied with by Shareholder, (iii) evidencing the
satisfaction of any condition referred to in this Section, or (iv) otherwise
facilitating the consummation or performance of any of the transactions contemplated by
this Agreement.






	 	7.4.4	 	Senior Management Agreements. Each of Carl Kukkonen, Stephen Muzi and Sung
Hsien Chang, respectively, shall have entered into with VGE an employment on such terms
and conditions as are respectively set forth on Exhibit H and stock option agreement
(the “Senior Management Agreements”).






7.4.5 No Force Majeure Event. Since the Effective Date, there shall not have been any delay,
error, failure or interruption in the conduct of the business of Parent, or any loss,
injury, delay, damage, distress, or other casualty, due to force majeure, including, but not
limited to (a) acts of God; (b) fire or explosion; (c) war, acts of terrorism or other civil
unrest; or (d) national emergency.



7.5 No Proceedings. Since the date of this Agreement, there must not have been commenced or
threatened against Parent or Shareholder, or against any Affiliate thereof, any Proceeding (which
Proceeding remains unresolved as of the Closing Date) (a) involving any challenge to, or seeking
damages or other relief in connection with, any of the transactions contemplated by this Agreement,
or (b) that may have the effect of preventing, delaying, making illegal, or otherwise interfering
with any of the transactions contemplated by this Agreement.



7.6 No Claim Regarding Stock Ownership or Consideration. There must not have been made or
threatened by any Person any claim asserting that such Person (a) is the holder of, or has the
right to acquire or to obtain beneficial ownership of the VGE Shares or any other stock, voting,
equity, or ownership interest in, VGE Shares, IPA BVI Equity or IPA China Equity or any other
stock, voting, equity, or ownership interest in, the VGE, IPA BVI or IPA China, or (b) is entitled
to all or any portion of Parent Shares.



7.7 IPA BVI Equity Transfer. Shareholder shall have transferred the remaining 30% interest of IPA
BVI to VGE.



SECTION VIII

CONDITIONS PRECEDENT TO THE OBLIGATION OF

SHAREHOLDER TO THE CLOSING




Shareholder’s obligation to transfer the VGE Shares, deliver and execute the Security Documents and
the obligations of Shareholder to take the other actions required to be taken by Shareholder at the
Closing are subject to the satisfaction, at or prior to the Closing, of each of the following
conditions (any of which may be waived by Shareholder, in whole or in part):



8.1 Accuracy of Representations. The representations and warranties of Parent set forth in this
Agreement or in any Schedule or certificate delivered pursuant hereto that are not qualified as to
materiality shall be true and correct in all material respects as of the date of this Agreement,
and shall be deemed repeated as of the Closing Date and shall then be true and correct in all
material respects, except to the extent a representation or warranty is expressly limited by its
terms to another date and without giving effect to any supplemental Schedule. The representations
and warranties of Parent set forth in this Agreement or in any Schedule or certificate delivered
pursuant hereto that are qualified as to materiality shall be true and correct in all respects as
of the date of this Agreement, and shall be deemed repeated as of the Closing Date and shall then
be true and correct in all respects , except to the extent a representation or warranty is
expressly limited by its terms to another date and without giving effect to any supplemental
Schedule.



8.2 Charter Amendment. Parent shall have prepared and obtained Shareholder’s prior written
approval to and then filed with the Secretary of State in and for the State of Nevada the duly
authorized and executed Charter Amendment.



8.3 Security Documents. Each of the Security Documents shall have been duly authorized and
executed upon and coincident with Closing, which shall result in perfected, first priority liens in
accordance with the terms thereof.



8.4 Performance by Parent.




	 	8.4.1	 	Preparation and delivery of the Charter Amendment, which shall have been
prepared to the satisfaction of Shareholder.






	 	8.4.2	 	All of the covenants and obligations that Parent is required to perform or to
comply with pursuant to this Agreement at or prior to the Closing (considered
collectively), and each of these covenants and obligations (considered individually),
must have been performed and complied with in all respects.






	 	8.4.3	 	Each document required to be delivered by Parent pursuant to this Agreement
must have been delivered.






	 	8.4.4	 	No Force Majeure Event. Since the Effective Date, there shall not have been
any delay, error, failure or interruption in the conduct of the business of Parent, or
any loss, injury, delay, damage, distress, or other casualty, due to force majeure,
including, but not limited to (a) acts of God; (b) fire or explosion; (c) war, acts of
terrorism or other civil unrest; or (d) national emergency.






	 	8.4.5	 	Management Agreements. Each of Carl Kukkonen, Stephen Muzi and Sung Hsien
Chang, respectively, shall have entered into with VGE the Management Agreements;






	 	8.4.6	 	Subsidiary Shares and Original Corporate Records. Delivery of the Reversion
Shares (with a stock transfer power dated as of April 16th, 2010, executed
in favor of Sung H. Chang), IPA BVI Equity and IPA China Equity as owned by VIASPACE,
VGE and IPA BVI, respectively, along with any and all originals or such copies thereof
as Mr. Chang may require of the corporate records for each such entity and in the
possession of Stephen Muzi or any other corporate representative, which delivery shall
not have occurred later than Friday, April 16th, 2010; and






	 	8.4.7	 	Certificate of Officer. Parent shall have delivered to Shareholder a
certificate, dated the Closing Date, executed by an officer of Parent, certifying the
satisfaction of the conditions specified in Sections 8.4.1 through and including 8.4.6.





8.5 Consents. All material consents, waivers, approvals, authorizations or orders required to be
obtained, and all filings required to be made, by Parent for the authorization, execution and
delivery of this Agreement and the consummation by it of the transactions contemplated by this
Agreement, shall have been obtained and made by Parent, except where the failure to receive such
consents, waivers, approvals, authorizations or orders or to make such filings would not have a
material adverse effect on Parent.



8.6 Documents. Parent must have caused the following documents to be delivered to Shareholder:




	 	8.6.1	 	The Charter Amendment;






	 	8.6.2	 	Share certificates evidencing Shareholder’s Parent Shares;






	 	8.6.3	 	Certificates evidencing the Reversion Shares (with a stock transfer power
dated as of April 16th, 2010, executed in favor of Sung H. Chang), IPA BVI
Equity and IPA China Equity as owned by VIASPACE, VGE and IPA BVI, respectively, along
with any and all originals of the corporate records for each such entity, the delivery
of which delivery shall not have occurred later than April 16, 2010;






	 	8.6.4	 	The Security Documents, which shall result in perfected, first priority liens
in accordance with the terms thereof;






	 	8.6.5	 	The Management Agreements;






	 	8.6.6	 	The Registration Rights Agreement;






	 	8.6.7	 	A Secretary’s Certificate, dated the Closing Date certifying attached copies
of (A) the Organizational Documents of Parent, (B) the resolutions of Parent Board (1)
approving the Transaction Documents and the transactions contemplated hereby and
thereby, (2) appointing Sung H. Chang and up to two individuals designated by him as
board members, and (C) the incumbency of each member of the Parent Board and authorized
officer of Parent signing this Agreement and any other agreement or instrument
contemplated hereby to which Parent is a party;






	 	8.6.8	 	A Certificate of Good Standing (or the equivalent thereof if available) of
Parent, VGE, IPA BVI and IPA China;






	 	8.6.9	 	Each of the Transaction Documents to which Parent is a party, duly executed;
and






	 	8.6.10	 	Such other documents as Shareholder may reasonably request for the purpose of (i)
evidencing the accuracy of any representation or warranty of Parent, (ii) evidencing
the performance by Parent of, or the compliance by Parent with, any covenant or
obligation required to be performed or complied with by Parent, (iii) evidencing the
satisfaction of any condition referred to in this Section, or (iv) otherwise
facilitating the consummation of any of the transactions contemplated by this
Agreement.





8.7 No Proceedings. Since the date of this Agreement, there must not have been commenced or
threatened against Parent, VGE or Shareholder, or against any Affiliate thereof, any Proceeding
(which Proceeding remains unresolved as of the Closing Date) (a) involving any challenge to, or
seeking damages or other relief in connection with, any of the transactions contemplated hereby, or
(b) that may have the effect of preventing, delaying, making illegal, or otherwise interfering with
any of the transactions contemplated hereby.



8.8 No Claim Regarding Stock Ownership or Consideration. There must not have been made or
threatened by any Person any claim asserting that such Person (a) is the holder of, or has the
right to acquire or to obtain beneficial ownership of the Parent Shares, VGE Shares, IPA BVI Equity
or IPA China Equity or any other stock, voting, equity, or ownership interest in, the VGE, IPA BVI
or IPA China, or (b) is entitled to all or any portion of Parent Shares.



SECTION IX

TERMINATION




9.1 Termination Events. This Agreement may, by notice given prior to or at the Closing, be
terminated:




	 	9.1.1	 	By mutual consent of Parent and Shareholder (acting jointly);






	 	9.1.2	 	By the Parent, if any of the conditions in Section 7 have not been satisfied
as of the Closing Date or if satisfaction of such a condition is or becomes impossible
(other than through the failure of Parent to comply with its obligations under this
Agreement) and Parent has not waived such condition on or before the Closing Date;






	 	9.1.3	 	By Shareholder, if any of the conditions in Section 8 have not been satisfied
as of the Closing Date or if satisfaction of such a condition is or becomes impossible
(other than through the failure of any Shareholder to comply with his obligations under
this Agreement) and Shareholder has not waived such condition on or before the Closing
Date;






	 	9.1.4	 	By either Parent or Shareholder if there shall have been entered a final,
non-appealable order or injunction of any Governmental Authority restraining or
prohibiting the consummation of the transactions contemplated hereby;






	 	9.1.5	 	Parent may terminate this Agreement by giving written notice to Shareholder at
any time prior to the Effective Time (A) in the event Shareholder has breached any
material representation, warranty, or covenant contained in this Agreement in any
material respect, Parent has notified Shareholder of the breach, and the breach has
continued without cure for a period of 30 days after the notice of breach or (B) if the
Closing shall not have occurred on or before May 28, 2010, by reason of the failure of
any condition precedent under Article 7 hereof (unless the failure results primarily
from Parent breaching any representation, warranty, or covenant contained in this
Agreement);






	 	9.1.6	 	Shareholder may terminate this Agreement by giving written notice to Parent at
any time prior to the Effective Time (A) in the event Parent has breached any material
representation, warranty, or covenant contained in this Agreement in any material
respect, Shareholder has notified Parent of the breach, and the breach has continued
without cure for a period of 30 days after the notice of breach or (B) if the Closing
shall not have occurred on or before May 28, 2010, by reason of the failure of any
condition precedent under Article 8 hereof (unless the failure results primarily from
Shareholder breaching any representation, warranty, or covenant contained in this
Agreement).





Termination of this Agreement by Parent may only occur with the prior written approval of the
Parent Board.



9.2 Effect of Termination. Each party’s right of termination under Section 9.1 is in addition to
any other rights it may have under this Agreement or otherwise, and the exercise of a right of
termination will not be an election of remedies. If this Agreement is terminated pursuant to
Section 9.1, all further obligations of the parties under this Agreement will terminate, except
that the obligations in this Section and Articles X and XI will survive; provided,
however, that if this Agreement is terminated by a party because of the breach of the
Agreement by another party or because one or more of the conditions to the terminating party’s
obligations under this Agreement is not satisfied as a result of another party’s failure to comply
with its obligations under this Agreement, the terminating party’s right to pursue all legal
remedies will survive such termination unimpaired.



SECTION X

INDEMNIFICATION; REMEDIES




10.1 Survival. All representations, warranties, covenants, and obligations in this Agreement shall
survive the Closing and expire thereafter upon and coincident with the period of limitations
applicable thereto (the “Survival Period”). The right to indemnification, payment of damages or
other remedy based on such representations, warranties, covenants, and obligations will not be
affected by any investigation conducted with respect to, or any knowledge acquired (or capable of
being acquired) at any time, whether before or after the execution and delivery of this Agreement
or the Closing Date, with respect to the accuracy or inaccuracy of or compliance with, any such
representation, warranty, covenant, or obligation. The waiver of any condition based on the
accuracy of any representation or warranty, or on the performance of or compliance with any
covenant or obligation, will not affect the right to indemnification, payment of damages, or other
remedy based on such representations, warranties, covenants, and obligations.



10.2 Indemnification by Parent. From and after the Closing until the expiration of the Survival
Period, Parent shall indemnify and hold harmless Shareholder from and against any damages arising,
directly or indirectly, from or in connection with:




	 	10.2.1	 	Any breach of any representation or warranty made by Parent in this Agreement or in
any certificate delivered by Parent pursuant to this Agreement; or






	 	10.2.2	 	Any breach by Parent of any covenant or obligation of Parent in this Agreement
required to be performed by Parent or Parent Shareholder on or prior to the Closing
Date.





10.3 Indemnification by Shareholder. From and after the Closing until the expiration of the
Survival Period, Shareholder shall indemnify and hold harmless Parent from and against any damages
arising, directly or indirectly, from or in connection with:




	 	10.3.1	 	Any breach of any representation or warranty made by Shareholder in this Agreement or
in any certificate delivered by Shareholder pursuant to this Agreement; or






	 	10.3.2	 	Any breach by Shareholder of any covenant or obligation of Shareholder in this
Agreement required to be performed by Shareholder on or prior to the Closing Date.





10.4 Limitations on Amount. Neither Party shall be entitled to indemnification pursuant to this
Section unless and until the aggregate amount of damages incurred by him or it with respect to such
matters exceeds $10,000, at which time, such Party shall be entitled to indemnification for the
total amount of such damages in excess of $10,000.



10.5 Determining Damages. Materiality qualifications to the representations and warranties of
Parent and Shareholder shall not be taken into account in determining the amount of Damages
occasioned by a breach of any such representation and warranty for purposes of determining whether
the baskets set forth in Section 10.4 has been met. Except in the case of gross negligence, fraud
or willful and intentional acts or omissions, neither Party shall be liable to the other Party for
special, incidental, indirect, consequential or exemplary damages resulting from the acts or
omissions of the other or for any other damages, fees, costs or expenses, direct or otherwise, in
excess of One Hundred Thousand Dollars ($100,000).



10.6 Breach by Parties. Nothing in this Article 10 shall limit either party’s right to pursue any
appropriate legal or equitable remedy against the other party (the “Defaulting Party”) in respect
to any damages arising, directly or indirectly, from or in connection with: (a) any breach by such
Defaulting Party of any representation or warranty made by such Defaulting Party in this Agreement
or in any certificate delivered by such Defaulting Party pursuant to this Agreement or (b) any
breach by such Defaulting Party of its covenants or obligations in this Agreement.



10.7 Indemnification Procedure. If any third party shall notify any Party (the “Indemnified
Party”) with respect to any matter (a “Third-Party Claim”) which may give rise to a claim for
indemnification against any other Party (the “Indemnifying Party”) under this Section, then the
Indemnified Party shall promptly (and in any event within 5 business days after receiving notice of
the Third-Party Claim) notify each Indemnifying Party thereof in writing. Any Indemnifying Party
will have the right to assume and thereafter conduct the defense of the Third-Party Claim with
counsel of its choice reasonably satisfactory to the Indemnified Party; provided, however, that the
Indemnifying Party will not consent to the entry of any judgment or enter into any settlement with
respect to the Third-Party Claim without the prior written consent of the Indemnified Party (not to
be unreasonably withheld) unless the judgment or proposed settlement involves only the payment of
money damages and does not impose an injunction or other equitable relief upon the Indemnified
Party. Unless and until an Indemnifying Party assumes the defense of the Third-Party Claim as
provided in this Section above, however, the Indemnified Party may defend against the Third-Party
Claim in any manner it may reasonably deem appropriate. In no event will the Indemnified Party
consent to the entry of any judgment on or enter into any settlement with respect to the
Third-Party Claim without the prior written consent of each of the Indemnifying Parties (not to be
unreasonably withheld).



SECTION XI

GENERAL PROVISIONS




11.1 Expenses. Except as otherwise expressly provided in this Agreement, each party to this
Agreement will bear its respective expenses incurred in connection with the preparation, execution,
and performance of this Agreement and the transactions contemplated by this Agreement, including
all fees and expenses of agents, representatives, counsel, and accountants. In the event of
termination of this Agreement, the obligation of each party to pay its own expenses will be subject
to any rights of such party arising from a breach of this Agreement by another party. Shareholder,
VGE, IPA BVI and IPA China, jointly and severally, agree to pay any and all fees and costs incurred
by McDaniel Law Group, PC in connection with this Agreement and any Transaction Document, with any
and all such amounts accrued prior to Closing being due and payable at Closing and otherwise within
30 days of invoice.



11.2 Public Announcements. Subject to Shareholder’s prior review and approval, Parent may, but no
later than three business days following the effective date of this Agreement, issue a press
release disclosing the transactions contemplated hereby. Shareholder and Parent shall consult with
each other in issuing any other press releases or otherwise making public statements or filings and
other communications with the Commission or any regulatory agency or stock market or trading
facility with respect to the transactions contemplated hereby and neither party shall issue any
such press release or otherwise make any such public statement, filings or other communications
without the prior written consent of the other, which consent shall not be unreasonably withheld or
delayed, except that no prior consent shall be required if such disclosure is required by law, in
which case the disclosing party shall provide the other party with prior notice of such public
statement, filing or other communication and shall incorporate into such public statement, filing
or other communication the reasonable comments of the other party.



11.3 Confidentiality. Subsequent to the date of this Agreement, Parent and Shareholder will
maintain in confidence, and will cause their respective directors, officers, employees, agents, and
advisors to maintain in confidence, any written, oral, or other information obtained in confidence
from another party in connection with this Agreement or the transactions contemplated by this
Agreement, unless (a) such information is already known to such party or to others not bound by a
duty of confidentiality or such information becomes publicly available through no fault of such
party, (b) the use of such information is necessary or appropriate in making any required filing
with the Commission, or obtaining any consent or approval required for the consummation of the
transactions contemplated by this Agreement, or (c) the furnishing or use of such information is
required by or necessary or appropriate in connection with legal proceedings.




11.3.1 In the event that any party is required to disclose any information of another party
pursuant to clause (b) or (c) of Section 11.3, the party requested or required to make the
disclosure (the “disclosing party”) shall provide the party that provided such information
(the “providing party”) with prompt notice of any such requirement so that the providing
party may seek a protective order or other appropriate remedy and/or waive compliance with
the provisions of this Section. Any such disclosures made or to be made prior to Closing
for and on behalf of (i) VIASPACE shall be initiated by such counsel as it may designate,
and (ii) VGE shall be initiated by such counsel as it may designate, with Sung Chang’s
approval. If, in the absence of a protective order or other remedy or the receipt of a
waiver by the providing party, the disclosing party is nonetheless, in the opinion of
counsel, legally compelled to disclose the information of the providing party, the
disclosing party may, without liability hereunder, disclose only that portion of the
providing party’s information which such counsel advises is legally required to be
disclosed, provided that the disclosing party exercises its reasonable efforts to preserve
the confidentiality of the providing party’s information, including, without limitation, by
cooperating with the providing party to obtain an appropriate protective order or other
relief assurance that confidential treatment will be accorded the providing party’s
information.




11.3.2 If the transactions contemplated by this Agreement are not consummated, each party
will return or destroy as much of such written information as the other party may reasonably
request.



11.4 Notices. All notices, consents, waivers and other communications under this Agreement must be
in writing and will be deemed to have been duly given when (a) delivered by hand (with written
confirmation of receipt), (b) sent by telecopier (with written confirmation of receipt), or (c)
when received by the addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier numbers set forth
below (or to such other addresses and telecopier numbers as a party may designate by written notice
to the other parties):



If to Parent, VGE, IPA BVI or IPA China:



VIASPACE Inc.


2102 Business Center Drive


Irvine, CA 92612


Telephone: 626-768-3360


Facsimile: 626-578-9063



With a copy to:



Richardson & Patel LLP


10900 Wilshire Boulevard, Suite 500


Los Angeles, California 90063


Telephone: 310-208-1182


Facsimile: 310-208-1154



If to Shareholder, VGE, IPA BVI or IPA China:



Mr. Sung Chang


121 Bells Ferry Lane


Marietta, Georgia 30066



With a copy to:



McDaniel Law Group, PC




	 	 	PO Box 681235






	 	 	Marietta, Georgia 30068-0021






	 	 	Attn: Frank McDaniel





11.5 Jurisdiction and Venue. As between the Parties, the transactions contemplated in the
Transaction Documents shall be governed as to validity, interpretation, construction, effect, and
in all other respects by the laws of the State of Georgia, without regard to the conflicts of laws
principals thereof. Each of Shareholder and Parent irrevocably submits to the exclusive
jurisdiction of the courts of the State of Georgia located in the County of Cobb and the United
States District Court in and for the Northern District of Georgia for the purpose of any suit,
action, proceeding or judgment relating to or arising out of the Transaction Documents and the
transactions contemplated hereby and thereby. Each of the parties hereto irrevocably consents to
the jurisdiction of any such court in any such suit, action or proceeding and to the laying of
venue in such court. Each party hereto irrevocably waives any objection to the laying of venue of
any such suit, action or proceeding brought in such courts and irrevocably waives any claim that
any such suit, action or proceeding brought in any such court has been brought in an inconvenient
forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION
WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO
THIS WAIVER.



11.6 Further Assurances. The parties agree (a) to furnish upon request to each other such further
information, (b) to execute and deliver to each other such other documents, and (c) to do such
other acts and things, all as the other party may reasonably request for the purpose of carrying
out the intent of this Agreement and the documents referred to in this Agreement.



11.7 Waiver. The rights and remedies of the parties to this Agreement are cumulative and not
alternative. Neither the failure nor any delay by any party in exercising any right, power, or
privilege under this Agreement or the documents referred to in this Agreement will operate as a
waiver of such right, power, or privilege, and no single or partial exercise of any such right,
power, or privilege will preclude any other or further exercise of such right, power, or privilege
or the exercise of any other right, power, or privilege. To the maximum extent permitted by
applicable law, (a) no claim or right arising out of this Agreement or the documents referred to in
this Agreement can be discharged by one party, in whole or in part, by a waiver or renunciation of
the claim or right unless in writing signed by the other party; (b) no waiver that may be given by
a party will be applicable except in the specific instance for which it is given; and (c) no notice
to or demand on one party will be deemed to be a waiver of any obligation of such party or of the
right of the party giving such notice or demand to take further action without notice or demand as
provided in this Agreement or the documents referred to in this Agreement.



11.8 Entire Agreement and Modification. This Agreement supersedes all prior agreements between the
parties with respect to its subject matter and constitutes (along with the documents referred to in
this Agreement) a complete and exclusive statement of the terms of the agreement between the
parties with respect to its subject matter. This Agreement may not be amended except by a written
agreement executed by the party against whom the enforcement of such amendment is sought.



11.9 Assignments, Successors, and No Third-Party Rights. No party may assign any of its rights
under this Agreement without the prior consent of the other parties. Subject to the preceding
sentence, this Agreement will apply to, be binding in all respects upon, and inure to the benefit
of and be enforceable by the respective successors and permitted assigns of the parties. Except as
set forth in Section 11.1, nothing expressed or referred to in this Agreement will be construed to
give any Person other than the parties to this Agreement any legal or equitable right, remedy, or
claim under or with respect to this Agreement or any provision of this Agreement. This Agreement
and all of its provisions and conditions are for the sole and exclusive benefit of the parties to
this Agreement and their successors and assigns.



11.10 Severability. If any provision of this Agreement is held invalid or unenforceable by any
court of competent jurisdiction, the other provisions of this Agreement will remain in full force
and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree
will remain in full force and effect to the extent not held invalid or unenforceable.



11.11 Section Headings, Construction. The headings of Sections in this Agreement are provided for
convenience only and will not affect its construction or interpretation. All references to
“Section” or “Sections” refer to the corresponding Section or Sections of this Agreement. All
words used in this Agreement will be construed to be of such gender or number as the circumstances
require. Unless otherwise expressly provided, the word “including” does not limit the preceding
words or terms.



11.12 Governing Law. This Agreement will be governed by the laws of the State of Georgia without
regard to conflicts of laws principles.



11.13 Counterparts. This Agreement may be executed in one or more counterparts, each of which will
be deemed to be an original copy of this Agreement and all of which, when taken together, will be
deemed to constitute one and the same agreement.



IN WITNESS WHEREOF, the parties have executed and delivered this Share Purchase Agreement as of the
date first written above.



PARENT:



VIASPACE Inc.



Signed: /S/ CARL KUKKONEN


Printed Name: Carl Kukkonen


Title: CEO



SHAREHOLDER



Signed: /S/ SUNG HSIEN CHANG


Name: Sung Hsien Chang



1



SCHEDULE 4.1.3




DEFINITION SCHEDULE




[to be added prior to Closing]



2



SCHEDULE 7.4.5




EXECUTIVE OPTIONS




As of the Grant Date, VGE shall grant to each of the following individual employees the option to
purchase that number of shares of VGE common stock as described below and associated with such
individuals (the “Options”). The Options shall vest over a period of 24 months beginning on the
Effective Date, with 1/24 of the option shares vesting on the first day of each subsequent month
that Executive is employed with VGE and be subject to such other terms and conditions as the
parties shall agree, provided, however, that all such Options shall terminate and
be of no further force and effect upon and coincident with the termination of this Agreement or any
failure of Closing to occur by May 28th, 2010. Each such Option shall have a strike or
exercise price as determined in accordance with Code Section 409A as of the Grant Date. Subject to
the foregoing, the Grant Date shall be March 25th, 2010, unless a later date is required
by Code Section 409A, in which case the Grant Date shall be such later date.



Name Title Number of Shares



	 	 	 	 	 	 	 	 	 
	Carl Kukkonen
	 	CEO	 	 	550,000	 
	 
	 	 	 	 	 	 	 	 
	Sung Hsien Chang
	 	President	 	 	550,000	 
	 
	 	 	 	 	 	 	 	 
	Stephen Muzi
	 	CFO, Treasurer and Secretary	 	 	250,000	 
	 
	 	 	 	 	 	 	 	 






3




EXHIBIT “A”

FORM OF GUARANTY AGREEMENT





4






Subject to amendment to conform to any special filing requirements under the laws of the BVI or PRC




EXHIBIT “A”




SUBSIDIARY GUARANTEE




THIS GUARANTEE (the “Guarantee”), dated as of the        day of      , 2010, is made by VIASPACE
Green Energy, Inc., a British Virgin Islands international business company (“VGE”), Inter-Pacific
Arts Corp., a British Virgin Islands international business company (“IPA BVI”), and
Guangzhou Inter-Pacific Arts Corp., a Chinese wholly owned foreign enterprise registered in
Guangdong province (“IPA China” and together with VGE and IPA BVI, the “Subsidiary
Guarantors,” and, each, a “Subsidiary Guarantor”), in favor of Sung Hsien Chang (“Noteholder”).
Capitalized terms used herein but not otherwise defined herein shall have the meanings ascribed to
such terms in the Secured Note.



WHEREAS, VIASPACE, Inc., a Nevada corporation (“Parent”), has issued the Secured Promissory
Note, dated as of the        day of      , 2010, in favor of Noteholder (as the same may be amended,
renewed, consolidated, restated or replaced from time to time, the “Secured Note”);



WHEREAS, the Subsidiary Guarantors are direct or indirect subsidiaries of Parent. Pursuant to
the terms of the Secured Note, Parent’s obligations under the Secured Note are to be
unconditionally guaranteed by the Subsidiary Guarantors;



WHEREAS, the Subsidiary Guarantors will derive substantial direct and indirect benefits from
the terms of the Secured Note and the Transaction Documents and in consideration of the Secured
Note and as security for the performance by Parent of its obligations under the Secured Note all
other sums due from Parent to Noteholder arising under the Secured Note, Transaction Documents (as
defined in the Purchase Agreement) and any other agreement to which the Noteholder and Parent are
parties (collectively, the “Secured Obligations”);



WHEREAS, each Subsidiary Guarantor has duly authorized the execution, delivery, and
performance of this Guarantee; and



NOW THEREFORE, for good and valuable consideration, the receipt of which is hereby
acknowledged, and in order to induce the Noteholder to accept the Secured Note, each Subsidiary
Guarantor agrees, for the benefit of the Noteholder, as follows:



ARTICLE I

GUARANTEE




1.1 Guarantee. Subsidiary Guarantor hereby absolutely, unconditionally and
irrevocably guarantees, jointly and severally with any other Subsidiary Guarantor, the punctual
payment, performance and observance when due, whether at stated maturity, by acceleration or
otherwise, of all of the Secured Obligations now or hereafter existing, whether for principal,
interest (including, without limitation, all interest that accrues after the commencement of any
insolvency, bankruptcy or reorganization of Parent, whether or not constituting an allowed claim in
such proceeding), fees, commissions, expense reimbursements, liquidated damages, indemnifications
or otherwise (such obligations, to the extent not paid by Parent being the parts of and components
of the Secured Obligations), and agrees to pay any and all reasonable costs, fees and expenses
(including reasonable counsel fees and expenses) incurred by Noteholder in enforcing any rights
under the guarantee set forth herein. Without limiting the generality of the foregoing, each
Subsidiary Guarantor’s liability shall extend to all amounts that constitute part of the Secured
Obligations and would be owed by Parent to Noteholder, but for the fact that they are unenforceable
or not allowable solely due to the existence of an insolvency, bankruptcy or reorganization
involving Parent.



1.2 Guarantee Absolute. Each Subsidiary Guarantor guarantees that the Secured
Obligations will be paid strictly in accordance with the terms of the Secured Note, regardless of
any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such
terms or the rights of Noteholder with respect thereto. The obligations of Subsidiary Guarantor
under this Guarantee are independent of the Secured Obligations, and a separate action or actions
may be brought and prosecuted against Subsidiary Guarantor to enforce such obligations,
irrespective of whether any action is brought against Parent or any other Subsidiary Guarantor or
whether Parent or any other Subsidiary Guarantor is joined in any such action or actions. This
Guarantee constitutes a guaranty of payment when due and not of collection or of performance, and
each Subsidiary Guarantor specifically agrees that it shall not be necessary or required that the
Noteholder exercise any right, assert any claim or demand, or enforce any remedy whatsoever against
Parent before or as a condition to the obligations of each Subsidiary Guarantor hereunder. The
liability of each Subsidiary Guarantor under this Guarantee constitutes a primary obligation, and
not a contract of surety, and to the extent permitted by law, shall be irrevocable, absolute and
unconditional irrespective of, and Subsidiary Guarantor hereby irrevocably waives any defenses it
may now or hereafter have in any way relating to, any or all of the following:



(a) any lack of validity or enforceability of the Secured Note, other Transaction Documents,
or any agreement or instrument relating thereto;



(b) any change in the time, manner or place of payment of, or in any other term of, all or any
of the Secured Obligations, or any other amendment or waiver of or any consent to departure from
the Secured Note, including, without limitation, any increase in the Secured Obligations except as
otherwise expressly agreed in writing by Noteholder;



(c) any taking, exchange, release, subordination or non-perfection of any Collateral, or any
taking, release or amendment or waiver of or consent to departure from any other guarantee, for all
or any of the Secured Obligations except as otherwise expressly agreed in writing by Noteholder;



(d) any change, restructuring, merger, or termination of the corporate structure or existence
of Parent;



(e) any amendment to, rescission, waiver, or other modification of, or any consent to
departure from, any of the terms of the Secured Note or any other Transaction Document except as
otherwise expressly agreed in writing by Noteholder;



(f) any reduction, limitation, impairment, or termination of the Secured Obligations for any
reason, including any claim of waiver, release, surrender, alteration, or compromise except as
otherwise expressly agreed in writing by Noteholder, and shall not be subject to (and each
Subsidiary Guarantor hereby waives any right to or claim of) any defense or setoff, counterclaim,
recoupment, or termination whatsoever by reason of the invalidity, illegality, nongenuineness,
irregularity, compromise, unenforceability of, or any other event or occurrence affecting, the
Secured Obligations; or



(g) any other circumstance (including, without limitation, any statute of limitations) or any
existence of or reliance on any representation by Noteholder that might otherwise constitute a
defense available to, or a discharge of, Parent or any other guarantor or surety.



This Guarantee shall continue to be effective or be reinstated, as the case may be, if at any
time any payment of any of the Secured Obligations is rescinded or must otherwise be returned by
Noteholder, the Noteholder or any other entity upon the insolvency, bankruptcy or reorganization of
the Parent or otherwise (and whether as a result of any demand, settlement, litigation or
otherwise), all as though such payment had not been made.



1.3 Waiver. Each Subsidiary Guarantor hereby waives promptness, diligence, notice of
acceptance and any other notice with respect to any of the Secured Obligations and this Guarantee
and any requirement that Noteholder exhaust any right or take any action against Parent or any
other Subsidiary Guarantor or any other person or entity or any Collateral. Each Subsidiary
Guarantor acknowledges that it will receive direct and indirect benefits from the Secured Note and
that the waiver set forth in this Section 1.3 is knowingly made in contemplation of such benefits.
Each Subsidiary Guarantor hereby waives any right to revoke this Guarantee, and acknowledges that
this Guarantee is continuing in nature and applies to all Secured Obligations, whether existing now
or in the future.



1.4 Continuing Guarantee; Assignments. This Guarantee is a continuing guaranty
and shall (a) remain in full force and effect until the later of the indefeasible cash payment in
full of the Secured Obligations and all other amounts payable under this Guarantee and the Secured
Note, (b) be binding upon each Subsidiary Guarantor, its successors and assigns and (c) inure to
the benefit of and be enforceable by the Noteholder and its successors, pledgees, transferees and
assigns. Without limiting the generality of the foregoing clause (c), Noteholder may pledge,
assign or otherwise transfer all or any portion of its rights and obligations under this Guarantee
(including, without limitation, all or any portion of its Secured Note owing to it) to any other
Person, and such other Person shall thereupon become vested with all the benefits in respect
thereof granted Noteholder herein or otherwise.



1.5 Subrogation. Each Subsidiary Guarantor agrees that it will not exercise
any rights that it may now or hereafter acquire against Noteholder, Parent or other Subsidiary
Guarantor (if any) that arise from the existence, payment, performance or enforcement of such
Subsidiary Guarantor’s obligations under this Guarantee, including, without limitation, any right
of subrogation, reimbursement, exoneration, contribution or indemnification, whether or not such
claim, remedy or right arises in equity or under contract, statute or common law, including,
without limitation, the right to take or receive from Noteholder or other Subsidiary Guarantor (if
any), directly or indirectly, in cash or other property or by set-off or in any other manner,
payment or security solely on account of such claim, remedy or right, unless and until all of the
Secured Obligations and all other amounts payable under this Guarantee shall have been indefeasibly
paid in full.



1.6 Maximum Secured Obligations. Notwithstanding any provision herein contained to
the contrary, each Subsidiary Guarantor’s liability with respect to the Secured Obligations shall
be limited to an amount not to exceed, as of any date of determination, the amount that could be
claimed by Noteholder from such Subsidiary Guarantor without rendering such claim voidable or
avoidable under Section 548 of the Bankruptcy Code or under any applicable state Uniform Fraudulent
Transfer Act, Uniform Fraudulent Conveyance Act or similar statute or common law, or foreign law or
regulation .



ARTICLE II

MISCELLANEOUS




2.1 Expenses. Each Subsidiary Guarantor shall pay to the Noteholder, on demand, the
amount of any and all reasonable expenses, including, without limitation, attorneys’ fees, legal
expenses and brokers’ fees, which the Noteholder may incur in connection with exercise or
enforcement of any the rights, remedies or powers of the Noteholder hereunder or with respect to
any or all of the Secured Obligations.



2.2 Waivers, Amendment and Remedies. No course of dealing by the Noteholder and no
failure by the Noteholder to exercise, or delay by the Noteholder in exercising, any right, remedy
or power hereunder shall operate as a waiver thereof, and no single or partial exercise thereof
shall preclude any other or further exercise thereof or the exercise of any other right, remedy or
power of the Noteholder. No amendment, modification or waiver of any provision of this Guarantee
and no consent to any departure by any Subsidiary Guarantor therefrom, shall, in any event, be
effective unless contained in a writing signed by the Noteholder against whom such amendment,
modification or waiver is sought, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given. The rights, remedies and powers of
the Noteholder, not only hereunder, but also under any instruments and agreements evidencing or
securing the Secured Obligations and under applicable law are cumulative, and may be exercised by
the Noteholder from time to time in such order as the Noteholder may elect.



2.3 Notices. All notices or other communications given or made hereunder shall be
given in the same manner as set forth in the Purchase Agreement



2.4 Term; Binding Effect. This Guarantee shall (a) remain in full force and effect
until the indefeasible payment and satisfaction in full of all of the Secured Obligations; (b) be
binding upon each Subsidiary Guarantor and its successors and permitted assigns; and (c) inure to
the benefit of the Noteholder and its respective successors and assigns. Upon the indefeasible
payment in full of the Secured Obligations, (i) this Guarantee shall terminate and (ii) the
Noteholder will, upon a Subsidiary Guarantor’s request and at such Subsidiary Guarantor’s expense,
execute and deliver to such Subsidiary Guarantor such documents as such Subsidiary Guarantor shall
reasonably request to evidence such termination, all without any representation, warranty or
recourse whatsoever.



2.5 Captions. The captions of Paragraphs, Articles and Sections in this Guarantee
have been included for convenience of reference only, and shall not define or limit the provisions
hereof and have no legal or other significance whatsoever.



2.6 Governing Law; Venue; Severability. This Guarantee shall be governed by and
construed in accordance with the laws of the State of Georgia without regard to principles of
conflicts or choice of law. Any legal action or proceeding against a Subsidiary Guarantor with
respect to this Guarantee must be brought only in the courts of the County of Cobb, State of
Georgia or of the United States Federal courts located in and for the Northern District of Georgia,
and, by execution and delivery of this Guarantee, each Subsidiary Guarantor hereby irrevocably
accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction
of the aforesaid courts. Each Subsidiary Guarantor hereby irrevocably waives any objection which
they may now or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Guarantee brought in the aforesaid courts and
hereby further irrevocably waives and agrees not to plead or claim in any such court that any such
action or proceeding brought in any such court has been brought in an inconvenient forum. If any
provision of this Guarantee, or the application thereof to any person or circumstance, is held
invalid, such invalidity shall not affect any other provisions which can be given effect without
the invalid provision or application, and to this end the provisions hereof shall be severable and
the remaining, valid provisions shall remain of full force and effect. This Guarantee shall be
deemed an unconditional obligation of each Subsidiary Guarantor for the payment of money and,
without limitation to any other remedies of Noteholder, may be enforced against any Subsidiary
Guarantor by summary proceeding or any similar rule or statute in the jurisdiction where
enforcement is sought. For purposes of such rule or statute, any other document or agreement to
which Noteholder and any Subsidiary Guarantor are parties or which any Subsidiary Guarantor
delivered to Noteholder, which may be convenient or necessary to determine Noteholder’s rights
hereunder or any Subsidiary Guarantor’s obligations to Noteholder are deemed a part of this
Guarantee, whether or not such other document or agreement was delivered together herewith or was
executed apart from this Guarantee. Each party hereby irrevocably waives personal service of
process and consents to process being served in any suit, action or proceeding in connection with
this Agreement, the Secured Note or any other Transaction Document by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other manner permitted by
law. Each Subsidiary Guarantor irrevocably appoints Parent its true and lawful agent for service
of process upon whom all processes of law and notices may be served and given in the manner
described above; and such service and notice shall be deemed valid personal service and notice upon
each such Subsidiary Guarantor with the same force and validity as if served upon such Subsidiary
Guarantor.



2.7 Satisfaction of Secured Obligations. For all purposes of this Guarantee, the
payment in full of the Secured Obligations shall be conclusively deemed to have occurred when the
Secured Obligations have been indefeasibly paid.



2.8 Execution. This Agreement may be executed by facsimile signature and delivered
by electronic transmission.



[THE BALANCE OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]



5



IN WITNESS WHEREOF, the undersigned have executed and delivered this Guarantee, as of the date
first written above.



“SUBSIDIARY GUARANTOR”



VIASPACE GREEN ENERGY, INC.,


a British Virgin Islands international business company



By:       



Its:       



“SUBSIDIARY GUARANTOR”



INTER-PACIFIC ARTS CORP.,


a British Virgin Islands international business company



By:       



Its:       



“SUBSIDIARY GUARANTOR”



GUANGZHOU INTER-PACIFIC ARTS CORP.,


a Chinese wholly owned foreign enterprise registered in Guangdong province



By:       



Its:       



“NOTEHOLDER”



SUNG HSIEN CHANG


an individual



By:       



6



EXHIBIT “B”

FORM OF SECURED PROMISSORY NOTE





7






EXHIBIT “B”




NEITHER THE ISSUANCE NOR SALE OF THE SECURITIES REPRESENTED BY THIS NOTE HAS BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY
NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN
OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM,
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.



Principal Amount: Issue Date:             , 2010



$[5,309,000 as of the Effective Date, plus 6% interest to Closing Date]



SECURED PROMISSORY NOTE




FOR VALUE RECEIVED, VIASPACE, INC., a Nevada corporation (hereinafter called “Borrower”),
hereby promises to pay to SUNG HSIEN CHANG, an individual (the “Holder”), without demand, the sum
of [5,309,000 as of the Effective Date, plus 6% interest to Closing Date] ($      ,000.00)] (the
“Principal Amount”).



Except as otherwise expressly provided below, the Borrower agrees to pay in cash the Principal
Amount in five equal annual installment payments of        Thousand Dollars ($     ,000.00) each,
together with interest due thereon (each, an “Installment Payment”), in arrears on the first,
second, third, fourth and fifth anniversary dates of the closing of the Purchase Agreement (as
defined below) (each, a “Payment Date “) to the Holder.



This Note is hereby issued as of the Issue Date pursuant to the terms of that certain
agreement entitled “Share Purchase Agreement” (the “Purchase Agreement”) entered into by and
between the Borrower and the Holder as of the        day of April 2010 (the “Effective Date”). Unless
otherwise separately defined herein, all capitalized terms used in this Note shall have the same
meaning as is set forth in the Purchase Agreement. The following terms and conditions shall apply
to this Note:



ARTICLE I



GENERAL PROVISIONS



1.1 Interest Rate. Interest payable on this Note shall accrue at a per annum rate of six
percent (6%) from the Issue Date and thereafter until this Note is paid in full and be payable in
arrears on each applicable Payment Date, accelerated or otherwise. Upon the occurrence and during
the continuance of an Event of Default, the principal of, and, to the extent permitted by law,
interest owing under this Note shall bear interest, payable on demand, at a per annum rate equal to
twelve percent (12%)(“Default Interest”).



1.2 Payment Grace Period. The Borrower shall have a five (5) day grace period to pay any
amounts due under this Note, after which grace period Default interest shall accrue on all unpaid
amounts due and owing under this Note until such amounts have been fully paid by the Borrower to
the Holder.



1.3 Payment in Stock or Cash. At the election of Holder, payment under this Note shall be
made in cash or shares of common stock of Borrower or VGE (the “Stock Portion”), or any combination
thereof (the “Stock Payment Election”); provided, however, unless otherwise waived
by the Company, if Holder desires to elect payment in shares of such common stock, then Holder
shall deliver to Company written notice of his exercise of the Stock Payment Election to be paid
in the form of such shares at least 10 business days prior to the applicable Payment Date, with
Holder having the right to designate the cash or Stock Portion of any such payment as he so elects.
All payments of VIASPACE or VGE common stock shall be valued at the 10-day average closing price
of its respective common shares preceding the applicable Payment Date.



1.4 Payments. All payments (including prepayments) to be made to the Holder hereunder,
whether on account of principal, interest, or otherwise, shall be made in United States Dollars and
in immediately available funds without setoff or counterclaim (except as otherwise expressed agreed
in this Note) by wire transfer to an account notified by the Holder to the Borrower and shall be
made prior to 5:00 p.m., Atlanta, Georgia time on the due date thereof. If any payment on this Note
becomes due and payable on a day other than a day on which commercial banks in Atlanta, Georgia are
open for the transaction of normal business (a “Business Day”), payment shall be due on the
immediately succeeding Business Day and, with respect to any payment of principal, interest thereon
shall be payable at the then applicable rate.



1.5 Stock Payments. If applicable, the Stock Portion of an Installment Payment to be made
in stock will be delivered to the Holder to an address set forth in the Notice section of the
Purchase Agreement or such other address as may be designated subsequently by Holder in writing to
Borrower within 10 business days of the applicable Payment Date. Upon any request by Holder, Any
such Stock Portion of an Installment Payment shall be accompanied by a certificated signed by an
authorized officer of the Borrower or VGE, as applicable, certifying that the shares of common
stock issued in such Stock Portion are duly authorized, validly issued, fully paid and
nonassessable, and have not been issued in violation of any preemptive or similar rights.



ARTICLE II




REPRESENTATIONS AND WARRANTIES




2.1. Representations and Warranties. Borrower hereby represents and warrants to the Holder
that:



 




(a) The Borrower is duly organized, validly existing and in good standing under the laws of
its jurisdiction of organization.




(b) The Borrower has the corporate power and authority, and the legal right, to make,
deliver and perform this Note and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Note.




(c) No consent or authorization of, filing with or other act by or in respect of, any
Governmental Authority or any other Person is required in connection with the execution,
delivery, performance, validity or enforceability of this Note.




(d) This Note has been duly authorized, executed and delivered on behalf of the Borrower.




(e) This Note constitutes a legal, valid and binding obligation of the Borrower enforceable
against the Borrower in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).




(f) The execution, delivery and performance of this Note by the Borrower will not (i)
contravene, result in any breach of, or constitute a default under, or result in the
creation of any Lien except pursuant to the Security Documents (as defined below) in respect
of any property of the Borrower under any indenture, mortgage, deed of trust, loan, purchase
or credit agreement, lease, corporate charter or by-laws, or any other agreement or
instrument to which the Borrower is bound or by which the Borrower or any of its respective
properties may be bound or affected, (ii) conflict with or result in a breach of any of the
terms, conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or governmental authority applicable to the Borrower, or (iii) violate any
provision of any statute or other rule or regulation or any governmental authority
applicable to the Borrower.




(g) No litigation, investigation or proceeding of or before any arbitrator or governmental
authority is pending, or to the knowledge of the Borrower, threatened by or against the
Borrower or against any of its properties or revenues that would prevent the Borrower from
paying any interest or principal on this Note.




(h) No default or Event of Default has occurred and is continuing.



ARTICLE III




COVENANTS




AFFIRMATIVE AND OTHER COVENANTS




3. The Borrower covenants that so long as this Note is outstanding:



3.1 Compliance with Law. The Borrower will, and will cause each of its Subsidiaries
to, comply with all laws, ordinances or governmental rules or regulations to which each of them is
subject, including, without limitation, Environmental Laws, and will obtain and maintain in effect
all licenses, certificates, permits, franchises and other governmental authorizations necessary to
the ownership of their respective properties or to the conduct of their respective businesses, in
each case to the extent necessary to ensure that non-compliance with such laws, ordinances or
governmental rules or regulations or failures to obtain or maintain in effect such licenses,
certificates, permits, franchises and other governmental authorizations would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.



3.2 Insurance. The Borrowers will, and will cause each of its Subsidiaries to,
maintain, with financially sound and reputable insurers, insurance with respect to their respective
properties and businesses against such casualties and contingencies, of such types, on such terms
and in such amounts (including deductibles, co-insurance and self-insurance, if adequate reserves
are maintained with respect thereto) as is customary in the case of entities of established
reputations engaged in the same or a similar business and similarly situated. Proceeds received
under any such insurance shall be, in the reasonable business judgment of the Borrower, applied to
repair or replace any properties damaged or destroyed. Holder and Borrower acknowledge that they
have reviewed the insurance policies of Borrower and its Subsidiaries as of the date of this Note
and agree that such policies satisfy this covenant as of the date of this Note.



3.3 Maintenance of Properties; Licenses. (a) The Borrower will, and will cause each
of its Subsidiaries to, maintain and keep, or cause to be maintained and kept, their respective
properties in good repair, working order and condition (other than ordinary wear and tear, casualty
and condemnation), so that the business carried on in connection therewith may be properly
conducted in all material respects at all times. (b) Each of the Borrower and its Subsidiaries
will own or possess the right to use all required licenses, permits, franchises, authorizations,
patents, copyrights, service marks, trademarks and trade names, or rights thereto, without known
conflict with the rights of others, except where failure to own or possess, or except for such
conflicts that, would not reasonably be expected to have a Material Adverse Effect.



3.4 Payment of Taxes and Claims. The Borrower will, and will cause each of its
Subsidiaries to, file all tax returns required to be filed in any jurisdiction and to pay and
discharge (a) all taxes shown to be due and payable on such returns and all other taxes,
assessments, governmental charges, or levies imposed on them or any of their properties, assets,
income or franchises, to the extent such taxes and assessments have become due and payable and
before they have become delinquent and (b) all claims for which sums have become due and payable
that have or might become a Lien on properties or assets of the Borrower or any of its
Subsidiaries, provided that neither the Borrower nor any of its Subsidiaries need pay any such tax
or assessment or claims if and so long as the amount, applicability or validity thereof is
contested by such Person on a timely basis in good faith and in appropriate proceedings, and such
Person has established adequate reserves therefor in accordance with GAAP on its books (including
in respect of interim statements, as applicable).



3.5 Existence, etc. The Borrower will at all times preserve and keep in full force
and effect its corporate (or other) existence. Subject to the terms of this Note, the Borrower
will at all times preserve and keep in full force and effect the corporate (or other) existence of
each of its Subsidiaries and all rights and franchises of the Borrower and its Subsidiaries.



3.6 Liens on Property. In the event that the Borrower or any of its Subsidiaries owns
or hereafter acquires any property, the Borrower or such Subsidiary shall obtain good and
sufficient title thereto, subject only to the Liens permitted under this Note. If any of the
Borrower or its Subsidiaries acquires any real property, the Borrower or such Subsidiary shall
execute and deliver to the Holder a mortgage or deed of trust acceptable in form and substance to
the Holder for the purpose of granting to the Holder a Lien on such real property to secure the
obligations under this Note, shall pay all taxes, costs, and expenses incurred by the Holder in
recording such mortgage or deed of trust, and shall supply to the Holder at the Borrower’s cost and
expense a survey, environmental report, hazard insurance policy, appraisal report, and a
mortgagee’s policy of title insurance from a title insurer reasonably acceptable to the Holder
insuring the validity of such mortgage or deed of trust and its status as a first Lien (subject to
Liens permitted by this Note) on the real property encumbered thereby and such other instruments,
documents, certificates, and opinions reasonably required by the Holder in connection therewith.



NEGATIVE COVENANTS.




The Borrower covenants that so long as this Note is outstanding:



3.7 Transactions with Affiliates. The Borrower will not, nor will it permit any of
its Subsidiaries to, enter into directly or indirectly any transaction or group of related
transactions (including without limitation the purchase, lease, sale or exchange of properties of
any kind or the rendering of any service) with any Affiliate, except pursuant to an agreement,
which shall be set forth on Schedule 3.7 attached hereto, in effect on the date of Closing or
otherwise entered into in the ordinary course and upon fair and reasonable terms no less favorable
to the Borrower or such Subsidiary than would be obtainable in a comparable arm’s-length
transaction with a Person not an Affiliate.



3.8 Merger, Consolidation, etc. (a) The Borrower will not, nor will it permit any of
its Subsidiaries to, be a party to any merger or consolidation, or sell, transfer, lease or
otherwise dispose of all or any part of its property, including any disposition of property as part
of a sale and leaseback transaction, or in any event sell or discount (with or without recourse)
any of its notes or accounts receivable; provided, however, that this Section shall not apply to
nor operate to prevent:



(i) the sale or lease of inventory in the ordinary course of business;



(ii) the merger of any Subsidiary with and into the Borrower or any other Subsidiary, provided
that, in the case of any merger involving the Borrower, the Borrower is the corporation surviving
the merger;



(iii) the sale of delinquent notes or accounts receivable in the ordinary course of business
for purposes of collection only (and not for the purpose of any bulk sale or securitization
transaction);



(iv) the sale, transfer or other disposition of any tangible personal property that, in the
reasonable business judgment of the Borrower or its Subsidiary, has become obsolete or worn out,
and which is disposed of in the ordinary course of business; and



(v) the sale, transfer, lease or other disposition of property of the Borrower or any of its
Subsidiaries (including any disposition of property as part of a sale and leaseback transaction)
aggregating for the Borrower and its Subsidiaries not more than $25,000 during any fiscal year of
the Borrower.



So long as no Default or Event of Default has occurred and is continuing or would arise as a result
thereof, upon the written request of the Borrower, the Holder promptly shall release its Lien on
any property sold pursuant to the foregoing provisions.



(b) The Borrower will not assign, sell or transfer, or permit any of its Subsidiaries to
assign, sell or transfer, any shares of capital stock or other equity interests of a Guarantor or
other Subsidiary; provided, however, that the foregoing shall not operate to prevent (i) Liens on
the capital stock or other equity interests of Subsidiaries granted pursuant to the Collateral
Documents and (ii) any transaction permitted by Section 3.8(a)(ii) above.



3.9 Liens. The Borrower will not, nor will permit any of its Subsidiaries to, cause
or permit to exist, or agree or consent to cause or permit to exist in the future (upon the
happening of a contingency or otherwise), any of the properties of the Borrower or any such
Subsidiary, whether now owned or hereafter acquired, to be subject to any Lien except:



(a) Liens arising by statute in connection with worker’s compensation, unemployment insurance,
old age benefits, social security obligations, taxes, assessments, statutory obligations or other
similar charges (other than Liens arising under ERISA), good faith cash deposits in connection with
tenders, contracts or leases to which the Borrower or any of its Subsidiaries is a party or other
cash deposits required to be made in the ordinary course of business, provided in each case that
the obligation is not for borrowed money and that the obligation secured is not overdue or, if
overdue, is being contested in good faith by appropriate proceedings which prevent enforcement of
the matter under contest and adequate reserves have been established therefor;



(b) mechanics’, workmen’s, materialmen’s, landlords’, carriers’ or other similar Liens arising
in the ordinary course of business with respect to obligations which are not due or which are being
contested in good faith by appropriate proceedings which prevent enforcement of the matter under
contest;



(c) judgment liens and judicial attachment liens not constituting an Event of Default under
this Note and the pledge of assets for the purpose of securing an appeal, stay or discharge in the
course of any legal proceeding, provided that the aggregate amount of such judgment liens and
attachments and liabilities of the Borrower and its Subsidiaries secured by a pledge of assets
permitted under this subsection, including interest and penalties thereon, if any, shall not be in
excess of $25,000 at any one time outstanding;



(d) Liens on property of the Borrower or any of its Subsidiaries created solely for the
purpose of securing indebtedness permitted by Section [3.11](b) hereof, representing or incurred to
finance the purchase price of property, provided that no such Lien shall extend to or cover other
property of the Borrower or any such Subsidiary other than the respective property so acquired, and
the principal amount of indebtedness secured by any such Lien shall at no time exceed the purchase
price of such property, as reduced by repayments of principal thereon;



(e) any interest or title of a lessor under any operating lease, or easements, rights of way,
zoning restrictions and other similar restrictions that do not individually or in the aggregate
materially impair the value or use of the property affected thereby;



(f) the Liens granted in favor of the Holder pursuant to the Collateral Documents to secure
Indebtedness under this Note;



(g) licenses, leases and subleases entered into in the ordinary course of business;



(h) customary rights of set-off in favor of depositary institutions; and



(i) Liens not otherwise permitted by this Section on assets with a value of not more than
$10,000 at any one time.



3.10 Net Worth Maintenance. The Borrower will not, at any time, permit the net worth
of it and its Subsidiaries, on a consolidated basis, to be less than $5,000,000.



3.11 Indebtedness. The Borrower will not, nor will it permit any of its Subsidiaries
to, issue, incur, assume, create or have outstanding any Indebtedness, or be or become liable as
endorser, guarantor, surety or otherwise for any debt, obligation or undertaking of any other
Person, or otherwise agree to provide funds for payment of the obligations of another, or supply
funds thereto or invest therein or otherwise assure a creditor of another against loss, or apply
for or become liable to the issuer of a letter of credit which supports an obligation of another,
or subordinate any claim or demand it may have to the claim or demand of any other Person;
provided, however, that the foregoing shall not restrict nor operate to prevent:



(a) the obligations of the Borrower and its Subsidiaries under this Note and the Collateral
Documents;



(b) purchase money indebtedness and capitalized lease obligations of the Borrower and its
Subsidiaries in an amount not to exceed $25,000 in the aggregate at any one time outstanding;



(c) endorsement of items for deposit or collection of commercial paper received in the
ordinary course of business;



(d) Indebtedness from time to time owing by any Subsidiary to the Company;



(e) letters of credit in an amount not to exceed $25,000 in the aggregate at any one time
outstanding; and



(f) Indebtedness which is exchanged for or the proceeds of which are used to refinance or
refund, or any extension or renewal of, Indebtedness outstanding on the date of this Agreement or
permitted to be incurred pursuant to this Section [3.11] (a “refinancing”) in an aggregate
principal amount not to exceed the principal amount of the Indebtedness so refinanced.



3.12 Change in the Nature of Business. The Borrower will not, nor will it permit any
of its Subsidiaries to, engage in any business or activity if as a result the general nature of the
business of the Borrower or any such Subsidiary would be changed in any material respect from the
general nature of the business engaged in by it as of the date of Closing.



ARTICLE IV




EVENT OF DEFAULT




The occurrence of any of the following events of default after written notice thereof by
Holder to the Borrower that any of the events in this Article have occurred (“Event of Default”)
shall, at the option of the Holder hereof, make all sums of principal and interest then remaining
unpaid hereon and all other amounts payable hereunder immediately due and payable, upon demand,
without presentment, or grace period, all of which hereby are expressly waived, except as set forth
below:



4.1 Failure to Pay Principal or Interest. Failure to cause Holder to receive (i) any
installment of principal, interest or other sum due under this Note when due, subject to the grace
period set forth in Section 1.2 hereof; or (ii) any Stock Portion of an Installment Payment in
accordance with the terms of this Note.



4.2 Breach of Covenant. The Borrower breaches any covenant or other term or condition
of this Note in any material respect and such breach, if subject to cure, continues for a period of
five (5) business days after written notice to the Borrower from the Holder.



4.3 Breach of Representations and Warranties. Any representation or warranty of the
Borrower made herein or the Share Purchase Agreement shall be false or misleading in any material
respect as of the date made.



4.4 Liquidation. Any dissolution, liquidation or winding up of Borrower or any
substantial portion of its business.



4.5 Cessation of Operations. Any cessation of operations by Borrower or Borrower
admits it is otherwise generally unable to pay its debts as such debts become due; provided, that,
Holder acknowledges that Borrower’s operations as of the Issue Date is primarily to hold equity
securities of other entities.



4.6 Maintenance of Assets. The failure by Borrower to maintain, prosecute, protect
or otherwise preserve any material intellectual property rights, personal, real property or other
assets which are necessary to conduct its business (whether now or in the future).



4.7 Receiver or Trustee. The Borrower or any Subsidiary of Borrower shall make an
assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver
or trustee for it or for a substantial part of its property or business; or such a receiver or
trustee shall otherwise be appointed.



4.8 Judgments. Any money judgment, writ or similar final process shall be entered or
filed against Borrower or any of its property or other assets for more than $25,000.



4.9 Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or
other proceedings or relief under any bankruptcy law or any law, or the issuance of any notice in
relation to such event, for the relief of debtors shall be instituted by or against the Borrower or
any Subsidiary of Borrower.



4.10 Delisting. Delisting of the common stock of either Borrower or VGE from any
Principal Market; failure by either Borrower or VGE to comply with the requirements for its
respective continued listing on a Principal Market for a period of five (5) consecutive trading
days; or notification from a Principal Market that the Borrower or VGE, as the case may be, is not
in compliance with the conditions for such continued listing on such Principal Market.



4.11 Non-Payment. A default by the Borrower under any one or more obligations in an
aggregate monetary amount in excess of $25,000 for more than twenty days after the due date,
unless the Borrower is contesting the validity of such obligation in good faith and has segregated
cash funds equal to the contested amount.



4.12 Stop Trade. An SEC or judicial stop trade order or Principal Market trading
suspension on or with respect to the common stock of Borrower or VGE, as the case may be, that
lasts for five or more consecutive trading days.



4.13 Failure to Comply with Security Documents. The Borrower or the Subsidiary
Guarantors default in the performance of or compliance with any term contained in any of the
Security Documents and such default is not remedied within 30 days or, if shorter, any applicable
grace period.



4.14 Subsidiary Guarantee. The Subsidiary Guarantee Agreement fails to rank pari
passu with all other senior indebtedness of any Guarantor.



4.15 [RESERVED]



4.16 Collateral. Any security interest granted under any Security Document ceases to
create perfected, valid and enforceable first priority Liens on the Collateral (as defined in the
Security Documents), or any party thereto so states.



4.17 [RESERVED]



4.18 [RESERVED]



4.19 Executive Officers Breach of Duties. Any of Borrower’s chief executive officer
or chief financial officer (other than Sung Hsien Chang or any person appointed by the Company at
the directive of Sung Chang) is convicted of a violation of securities laws, or a settlement in
excess of $25,000 is reached by any such officer relating to a violation of securities laws, breach
of fiduciary duties or self-dealing.



4.20 Notification Failure. A failure by Borrower to notify in writing as soon as
reasonably practicable, but in no event later than five (5) Business Days thereafter, Holder of
anything which Borrower is obligated to notify Holder of pursuant to the terms of this Note or any
of the Transaction Documents, which obligation shall include notifying Borrower of any and all acts
or omissions that shall constitute a default hereunder or thereunder.



4.21 Cross Default. A default by the Borrower of a material term, covenant, warranty
or undertaking of any Security Document (as defined in Section 4.1 below), or the occurrence of a
material event of default under any such other Security Document which is not cured after any
required notice and/or cure period.



ARTICLE V




SECURITY INTEREST




5.1 Security Interest/Waiver of Automatic Stay. This Note is secured by a security
interest granted to the Holder pursuant to the Security Documents (as defined below), as delivered
by Borrower to Holder. The Borrower acknowledges and agrees that should a proceeding under any
bankruptcy or insolvency law be commenced by or against the Borrower, or if any of the Collateral
(as defined in the Security Agreement) should become the subject of any bankruptcy or insolvency
proceeding, then the Holder should be entitled to, among other relief to which the Holder may be
entitled under the Transaction Documents and any other agreement to which the Borrower and Holder
are parties (collectively, “Loan Documents”) and/or applicable law, an order from the court
granting immediate relief from the automatic stay pursuant to 11 U.S.C. Section 362 to permit the
Holder to exercise all of its rights and remedies pursuant to the Loan Documents and/or applicable
law. THE BORROWER EXPRESSLY WAIVES THE BENEFIT OF THE AUTOMATIC STAY IMPOSED BY 11 U.S.C. SECTION
362. FURTHERMORE, THE BORROWER EXPRESSLY ACKNOWLEDGES AND AGREES THAT NEITHER 11 U.S.C. SECTION
362 NOR ANY OTHER SECTION OF THE BANKRUPTCY CODE OR OTHER STATUTE OR RULE (INCLUDING, WITHOUT
LIMITATION, 11 U.S.C. SECTION 105) SHALL STAY, INTERDICT, CONDITION, REDUCE OR INHIBIT IN ANY WAY
THE ABILITY OF THE HOLDER TO ENFORCE ANY OF ITS RIGHTS AND REMEDIES UNDER THE LOAN DOCUMENTS AND/OR
APPLICABLE LAW. The Borrower hereby consents to any motion for relief from stay that may be filed
by the Holder in any bankruptcy or insolvency proceeding initiated by or against the Borrower and,
further, agrees not to file any opposition to any motion for relief from stay filed by the Holder.
The Borrower represents, acknowledges and agrees that this provision is a specific and material
aspect of the Transaction Documents, and that the Holder would not agree to the terms of the
Transaction Documents if this waiver were not a part of this Note. The Borrower further represents,
acknowledges and agrees that this waiver is knowingly, intelligently and voluntarily made, that
neither the Holder nor any person acting on behalf of the Holder has made any representations to
induce this waiver, that the Borrower has been represented (or has had the opportunity to he
represented) in the signing of this Note and the Transaction Documents and in the making of this
waiver by independent legal counsel selected by the Borrower and that the Borrower has discussed
this waiver with counsel.



5.2 Security Documents. This Note shall be secured by security interests granted to
the Holder by the Borrower and its subsidiaries pursuant to the following documents (the “Security
Documents”):




(a) Security Agreements separately entered into between each of Borrower, VGE, Inter-Pacific
Arts Corp., a British Virgin Islands international business company (“IPA BVI”), and
Guangzhou Inter-Pacific Arts Corp., a Chinese wholly owned foreign enterprise registered in
Guangdong province (“IPA China” and together with VGE and IPA BVI, the
“Subsidiary Guarantors”, and, each, a “Subsidiary Guarantor”) and Holder dated as of
the Issue Date (the “Security Agreement”);




(b) Pledge Agreements separately entered into between Borrower, VGE and IPA BVI and Holder
dated as of the Issue Date (the “Pledge Agreement”); and




(c) Subsidiary Guarantee Agreements separately entered into among each of the Subsidiary
Guarantors and the Holder dated as of the Issue Date.



5.3 Collateral. The Borrower’s obligations under this Note shall be secured by
(a) valid, perfected and enforceable Liens on all right, title, and interest of the Borrower in its
ownership interests of VGE and its wholly-owned subsidiaries, IPA BVI and IPA China, (b) valid,
perfected, and enforceable Liens on all right, title, and interest of the Borrower in all personal
and real property, tangible or intangible, whether now owned or hereafter acquired or arising, and
all proceeds thereof resulting from VGE, IPA BVI or IPA China. The Borrower acknowledges and
agrees that the Liens on the Collateral (as defined in the Security Documents) shall be granted to
the Holder in accordance with the Security Documents and shall be valid and perfected first
priority Liens.



5.4 Guarantees. The payment and performance of this Note will at all times be
guaranteed by the Subsidiary Guarantors pursuant to the Subsidiary Guarantee Agreement or such
other guaranty agreements or supplements hereto in form and substance reasonably acceptable to the
Holder, as the same may be amended, modified or supplemented from time to time.



5.5. Further Assurances. The Borrower agrees that it will, and shall cause the
Subsidiary Guarantors to, from time to time at the reasonable request of the Holder, execute and
deliver such documents and do such acts and things as the Holder may reasonably request in order to
provide for or perfect or protect the Liens intended to be created on the Collateral pursuant to
the Security Documents. In the event the Borrower or any Subsidiary Guarantor forms or acquires
any other subsidiary after the date hereof, such Borrower or Subsidiary Guarantor shall promptly
upon such formation or acquisition notify the Holder thereof and cause such newly formed or
acquired subsidiary to execute a joinder to the Subsidiary Guarantee Agreement and such Security
Documents as the Holder may then require, and the Borrower shall also deliver to the Holder, or
cause such Subsidiary Guarantor to deliver to the Holder, at the Borrower’s cost and expense, such
other instruments, documents, certificates, and opinions reasonably required by the Holder in
connection therewith.



For purposes of this Note, the Security Documents and any Transaction Document, the term:



“Affiliate” means, at any time, and with respect to any Person, (a) any other Person that at such
time directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is
under common Control with, such first Person, and (b) any Person beneficially owning or holding,
directly or indirectly, 10% or more of any class of voting or equity interests of the Company or
any Subsidiary or any corporation of which the Company and its Subsidiaries beneficially own or
hold, in the aggregate, directly or indirectly, 10% or more of any class of voting or equity
interests. As used in this definition, “Control” means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.



“Environmental Laws” means any and all Federal, state, local, and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or governmental restrictions relating to pollution and the
protection of the environment or the release of any Hazardous Material into the environment,
including but not limited to those related to hazardous substances or wastes, air emissions and
discharges to waste or public systems.



“Indebtedness” means for any Person (without duplication) (a) all indebtedness of such Person for
borrowed money, whether current or funded, or secured or unsecured, (b) all indebtedness for the
deferred purchase price of property or services, (c) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property acquired by such
Person (even though the rights and remedies of the seller or lender under such agreement in the
event of a default are limited to repossession or sale of such property), (d) all indebtedness
secured by a purchase money mortgage or other Lien to secure all or part of the purchase price of
property subject to such mortgage or Lien, (e) all obligations under leases which shall have been
or must be, in accordance with GAAP, recorded as Capital Leases in respect of which such Person is
liable as lessee, (f) any liability in respect of banker’s acceptances or letters of credit or
guarantees, and (g) any indebtedness, whether or not assumed, secured by Liens on property acquired
by such Person at the time of acquisition thereof, it being understood that the term “Indebtedness”
shall not include trade payables arising in the ordinary course of business.



“Lien” shall mean with respect to any Person, any mortgage, lien, pledge, charge, security interest
or other encumbrance, or any interest or title of any vendor, lessor, lender or other secured party
to or of such Person under any conditional sale or other title retention agreement or capital
lease, upon or with respect to any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar arrangements).



“Material Adverse Effect” means a material adverse effect on (a) the business, prospects,
operations, affairs, financial condition, assets or properties of the Borrower and its Subsidiaries
taken as a whole, or (b) the ability of the Borrower or any Subsidiary to perform its obligations
under this Note or any Collateral Document to which it is a party, or (c) the validity or
enforceability of this Note or any Collateral Document.



“Person” shall mean an individual, partnership, corporation, limited liability company,
association, trust, unincorporated organization, or any other entity or organization, including a
government or agency or political subdivision thereof.



ARTICLE VI




MISCELLANEOUS




6.1 Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder
hereof in the exercise of any power, right or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other right, power or privilege. All rights and
remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies
otherwise available.



6.2 Notices. All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing and, unless otherwise specified
herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below
or to such other address as such party shall have specified most recently by written notice. Any
notice or other communication required or permitted to be given hereunder shall be deemed effective
(a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if delivered on a
business day during normal business hours where such notice is to be received), or the first
business day following such delivery (if delivered other than on a business day during normal
business hours where such notice is to be received) or (b) on the first business day following the
date of mailing by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for such communications
shall be as set forth in the Purchase Agreement.



6.3 Amendment Provision. The term “Note” and all reference thereto, as used
throughout this instrument, shall mean this instrument as originally executed, or if later amended
or supplemented, then as so amended or supplemented. This Note may not be amended, changed,
waived, discharged or terminated except as agreed to by both the Borrower and Holder in writing.



6.4 Assignability. This Note shall be binding upon the Borrower and its successors
and assigns, and shall inure to the benefit of the Holder and its successors and assigns. The
Borrower may not assign its obligations under this Note.



6.5 Cost of Collection. If default is made in the payment of this Note, Borrower
shall pay the Holder hereof reasonable costs of collection, including reasonable attorneys’ fees.



6.6 Governing Law. This Note shall be governed by and construed in accordance with
the laws of the State of Georgia without regard to conflicts of laws principles that would result
in the application of the substantive laws of another jurisdiction. Any action brought by either
party against the other concerning the transactions contemplated by this Agreement must be brought
only in the civil or state courts of Georgia or in the federal courts located in the State of
Georgia. Both parties and the individual signing this Agreement on behalf of the Borrower agree to
submit to the jurisdiction of such courts. The prevailing party shall be entitled to recover from
the other party its reasonable attorney’s fees and costs. In the event that any provision of this
Note is invalid or unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any such provision which may prove invalid or
unenforceable under any law shall not affect the validity or unenforceability of any other
provision of this Note. Nothing contained herein or in any Security Document notwithstanding any
provision therein to the contrary shall be deemed or operate to preclude the Holder from bringing
suit or taking other legal action against the Borrower in any other jurisdiction to collect on the
Borrower’s obligations to Holder, to realize on any collateral or any other security for such
obligations, or to enforce a judgment or other decision in favor of the Holder.



6.7 Maximum Payments. Nothing contained herein shall be deemed to establish or
require the payment of a rate of interest or other charges in excess of the maximum rate permitted
by applicable law. In the event that the rate of interest required to be paid or other charges
hereunder exceed the maximum rate permitted by applicable law, any payments in excess of such
maximum rate shall be credited against amounts owed by the Borrower to the Holder and thus refunded
to the Borrower.



IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by an authorized
officer as of the Issue Date.




VIASPACE, INC., as the Borrower



By:      

Name:

Title:




WITNESS:




      



ACKNOWLEDGED AND AGREED



Sung Hsien Chang, as Holder



8



EXHIBIT B








9






EXHIBIT “C”




SECURITY AGREEMENT





10






EXHIIBIT “C”




Subject to amendment to conform to any special filing requirements under the laws of the BVI or PRC




FORM OF SECURITY AGREEMENT




[VIASPACE, INC., a Nevada corporation, whose principal place of business and mailing address is
2102 Business Center Drive, suite 130, Irvine, CA 92612][VIASPACE Green Energy Inc., a British
Virgin Islands corporation (“VGE”)] [Inter-Pacific Arts Corp., a British Virgin Islands
international business company (“IPA BVI”)][Guangzhou Inter-Pacific Arts Corp., a Chinese
wholly owned foreign enterprise registered in Guangdong province] (hereinafter “Debtor”),
hereby grants to SUNG HSIEN CHANG (hereinafter sometimes “Noteholder” or “Secured Party”) a
continuing security interest in and to, and a lien on, and hereby assigns to Secured Party as
collateral, all of the “Collateral”, as defined in Section 2 of this Agreement. In
addition, Debtor and Secured Party hereby agree as follows:



1. OBLIGATIONS: The security interest hereby granted shall secure the full, prompt and complete
payment and performance of all of the payment obligations of Debtor to pay principal, interest, or
other amounts (the “Secured Obligations”) under the Secured Promissory Note dated as of the
     day of        2010 issued by Debtor in favor of Noteholder (as the same may be amended, renewed,
consolidated, restated or replaced from time to time, the “Secured Note”). Capitalized
terms used herein but not otherwise defined herein shall have the meanings ascribed to such terms
in the Secured Note.



2. COLLATERAL: The collateral in which a security interest is hereby granted comprises all of the
assets and property, real and personal, tangible and intangible, of Debtor, whether now owned or
existing or hereafter arising or acquired, regardless of where any such property is located,
including all of Debtor’s rights, titles and interests in and to the following, whether now owned
or existing or hereafter arising or acquired, regardless of where any such property is located,
excluding, however, shares of stock or other equity owned by Debtor in Direct
Methanol Fuel Cell Corporation (DMFCC) and Ionfinity LLC (all of such assets and all of the below
described assets being, collectively, the “Collateral”):



(a) all Accounts, all Inventory, all Equipment, all trademarks, all General Intangibles, and
all Investment Property (each as defined in Section 3 of this Agreement);



(b) without limiting the description of the property or any rights or interests in the
property described above in this definition of Collateral, all goods, deposit accounts,
instruments, chattel paper (including tangible chattel paper and electronic chattel paper),
documents, securities, money, cash, letters of credit, letter-of-credit rights, promissory notes,
warrants, dividends, distributions, the commercial tort claims listed on Exhibit B attached
to this Agreement, contracts, agreements, contract rights and other property owned by Debtor or in
which Debtor has any rights or an interest, including those which are now or hereafter in the
possession or control of Secured Party or in transit by mail or carrier to or in the possession of
any third party acting on behalf of Secured Party, without regard to whether Secured Party received
the same in pledge, for safekeeping, as agent for collection or transmission or otherwise or
whether Secured Party had conditionally released the same, all rights to payment from, and all
claims against Secured Party, all as-extracted collateral, leases, lease contracts, lease
agreements, and proceeds of a letter of credit;



(c) without limiting the description of the property or any rights or interests in the
property described above in this definition of Collateral, all supporting obligations;



(d) without limiting the description of the property or any rights or interests in the
property described above in this definition of Collateral, all farm products including all crops
grown, growing, or to be grown, and all livestock and the born and unborn offspring thereof;



(e) without limiting the description of the property or any rights or interests in the
property described above in this definition of Collateral, all minerals or the like and accounts
resulting from sales at the wellhead or minehead, as well as all standing timber which is to be cut
and removed under a conveyance or contract for sale; and



(f) all products and cash proceeds and noncash proceeds (including all rents, revenues,
issues, and profits arising from the sale, lease, license, encumbrance, collection, or any other
temporary or permanent disposition of any and all of the property described above in this
definition of Collateral or any interest therein) of any and all of the property described above in
this definition of Collateral, and all additions, accessions, attachments, parts, appurtenances and
improvements to, replacements and substitutions of, and all supporting obligations for, guaranties
of, insurance or condemnation proceeds of, and documents covering, the property described above in
this definition of Collateral, all sales of accounts, all tort or other claims against third
parties arising out of damage or destruction of property described above in this definition of
Collateral, and all property received wholly or partly in trade or exchange for property described
above in this definition of Collateral.



3. DEFINITIONS: As used herein, the following capitalized terms will have the following meanings:



(a) “Accounts” means all accounts, accounts receivable, health-care-insurance
receivables, credit card receivables, contract rights, instruments, documents, chattel paper, tax
refunds from foreign, federal, state or local governments and all obligations in any form including
those arising out of the sale or lease of goods or the rendition of services by Debtor; all
guaranties, letters of credit and other security and supporting obligations for any of the above;
all merchandise returned to or reclaimed by Debtor; and all books and records (including computer
programs, tapes and data processing software) evidencing an interest in or relating to the above;
all winnings in a lottery or other game of chance operated by a governmental unit or entity
licensed to operate such game by a governmental unit and all rights to payment therefrom; and all
“accounts” as the same is now or hereinafter defined in the Georgia UCC (as hereafter defined).



(b) “Equipment” means all goods (other than Inventory, farm products or consumer
goods), machinery, machine tools, equipment, fixtures, office equipment, furniture, furnishings,
motors, motor vehicles, tools, dies, parts, jigs (including each of the items of equipment set
forth on any schedule which is either now or in the future attached to Secured Party’s copy of this
Agreement), and all attachments, accessories, accessions, replacements, substitutions, additions
and improvements thereto, all supplies used or useful in connection therewith, and all “equipment”
as the same is now or hereinafter defined in the Georgia UCC.



(c) “General Intangibles” means all general intangibles, choses in action, causes of
action, obligations or indebtedness owed to Debtor from any source whatsoever, payment intangibles,
software and all other intangible personal property of every kind and nature (other than Accounts)
including patents, trademarks, trade names, service marks, copyrights, patent applications,
trademark or service mark applications, copyright applications and goodwill, trade secrets,
licenses, franchises, rights under agreements, tax refund claims, insurance refunds, insurance
refund claims, pension plan refunds, pension plan reversions, and all books and records including
all computer programs, disks, tapes, printouts, customer lists, credit files and other business and
financial records, the equipment containing any such information, and all “general intangibles” as
the same is now or hereinafter defined in the Georgia UCC.



(d) “Inventory” means all goods (other than Equipment, farm products or consumer
goods), supplies, wares, merchandises and other tangible personal property, including raw
materials, work in process, supplies and components, and finished goods, whether held for sale or
lease, or furnished or to be furnished under any contract for service, or used or consumed in
business, and also including products of and accessions to inventory, packing and shipping
materials, all documents of title, whether negotiable or non-negotiable, representing any of the
foregoing, and all “inventory” as the same is now or hereinafter defined in the Georgia UCC.



(e) “Investment Property” means all securities, whether certificated or
uncertificated, financial assets, security entitlements, securities accounts, commodity contracts
or commodity accounts; and all “investment property” as the same is now or hereafter defined in the
Georgia UCC; excluding, however, shares of stock or other equity owned by Debtor in
Direct Methanol Fuel Cell Corporation (DMFCC) and Ionfinity LLC.



(f) "Trademarks” shall mean all Trademarks used and/or registered by Debtor as set
forth in the Schedule attached as Exhibit C.



(g) “Uniform Commercial Code” means the Uniform Commercial Code as adopted in each
applicable jurisdiction, as amended or superceded from time to time. The “Georgia UCC”
means the Uniform Commercial Code, as adopted in Georgia, as amended or superceded from time to
time.



All of the uncapitalized terms contained in this Agreement which are now or hereafter defined
in the Georgia UCC will, unless the context expressly indicates otherwise, have the meanings
provided for now or hereafter in the Georgia UCC, as such definitions may be enlarged or expanded
from time to time by amendment or judicial decision.



4. REPRESENTATIONS AND WARRANTIES: Debtor represents and warrants to Noteholder that the following
statements are, and will continue as long as the Note is outstanding or any Secured Obligations
unpaid, to be, true:



(a) Debtor is a corporation with its chief executive office and mailing address located at the
address set forth on Exhibit A and is organized in the State of Nevada, with an
organizational number as set forth on Exhibit A. Debtor further warrants that its exact
legal name is set forth in the first paragraph of this Agreement. Debtor’s federal tax
identification number is as set forth on Exhibit A. Exhibit A attached to this
Agreement lists the location of any and all of the Collateral that consists of documents,
equipment, instruments, inventory, or tangible chattel paper [THIS REPRESENTATION ONLY APPLIES TO
VIASPACE. THE SECURITY AGREEMENTS FOR VGE, IPA BVI AND IPA CHINA MUST CHANGE ACCORDINGLY.];



(b) Debtor is, and as to any property which at any time forms a part of the Collateral, shall
be, the owner of each and every item of the Collateral, or otherwise have the right to grant a
security interest in the Collateral, free from any lien or security interest, except for the liens
and security interests (i) in favor of Secured Party, (ii) created by Shareholder in his individual
capacity against the Collateral, (iii) of which Shareholder has Knowledge as of the Closing, but
which are unknown to Debtor or any Affiliate thereof; or (iv) claims asserted by Frank Steele.



(c) Debtor has full right to grant the security interest hereby granted. Debtor shall defend
the Collateral and each and every part thereof against all claims of all third parties at any time
claiming any of the Collateral or claiming any interest therein adverse to Secured Party except for
the lien created by this Agreement and claims by third parties regarding the Collateral to the
extent caused by Shareholder in his individual capacity;



(d) as to any Accounts which are or become part of the Collateral, each such Account is a
valid Account and that no such Account shall be sold, assigned, transferred, discounted,
hypothecated, or otherwise subjected to any lien or security interest, and Debtor shall defend such
Accounts against all claims of any third party whosoever;



(e) if any of the Collateral is or will be attached to real estate in such a manner as to
become a fixture under applicable state law, Debtor will secure from the lien holder or the party
in whose favor it is or, at Secured Party’s option, will become so encumbered a written consent and
subordination to the security interest hereby granted or a written disclaimer of any interest in
the Collateral, in such form as is acceptable to Secured Party;



(f) all trade names, assumed names, fictitious names and other names used by Debtor during the
five year period preceding the date of this Agreement are set forth on Exhibit A, and
Debtor has not, during the preceding five year period, except as may be set forth on Exhibit
A, acquired any of its assets in any bulk transfer;



(g) except as set forth on Exhibit B, Debtor has no rights, titles or interests in, or
with respect to, any investment property, deposit accounts, letters of credit, electronic chattel
paper, or any instruments, including promissory notes, except checks received in the ordinary
course of business in payment of Accounts.



5. DEBTOR’S RESPONSIBILITIES:



(a) Until the Secured Obligations are fully paid, performed and satisfied and this Agreement
is terminated, Debtor will:



(i) furnish to Secured Party in writing upon Secured Party’s reasonable request (but if no
Event of Default has occurred and is continuing, no more frequently than quarterly) a current list
of all Collateral for the purpose of identifying the Collateral and, further, execute and deliver
such supplemental instruments, in the form of assignments or otherwise, as Secured Party shall
reasonably request for the purpose of confirming and perfecting Secured Party’s security interest
in any or all of the Collateral, or as is reasonably necessary to provide Secured Party with
control over the Collateral or any portion thereof;



(ii) at its expense and upon request of Secured Party (but if no Event of Default has occurred
and is continuing, no more frequently than quarterly), furnish copies of invoices issued by Debtor
in connection with the Collateral, furnish certificates of insurance evidencing insurance on the
Collateral in accordance with the Secured Note, furnish proof of payment of taxes and assessments
on the Collateral, make available to Secured Party any and all of Debtor’s books, records, written
memoranda, correspondence, purchase orders, invoices and other instruments or writings that in any
way evidence or relate to the Collateral;



(iii) maintain all Inventory in good and salable condition exclusive of slow-moving, obsolete
or damaged Inventory for which reserves or write-downs have been made on Debtor’s books and records
in the ordinary course of business and will handle, maintain and store the Collateral in a safe and
careful manner in material compliance with all applicable laws, rules, regulations, ordinances and
governmental orders;



(iii) notify Secured Party promptly in writing of any information which Debtor has or may
receive which might in any way materially adversely affect the value of the Collateral or the
rights of Secured Party with respect thereto;



(iv) notify Secured Party at least fifteen days in advance in writing of any change in
Debtor’s (A) chief executive office, principal place of business, or other places of business, or
the opening of any new places of business, (B) exact legal name as set forth in the first paragraph
of this Agreement, (C) names from those set forth on Exhibit A, or (D) the adoption by
Debtor of trade names, assumed names or fictitious names;



(v) pay all costs of filing any financing, continuation or termination statements with respect
to the security interest created hereby;



(vii) pay all expenses and reasonable attorneys’ fees of Secured Party incurred by Secured
Party in the exercise (including enforcement) of any of Secured Party’s rights or remedies under
this Agreement or applicable law; and Debtor agrees that said expenses and fees shall constitute
part of the Secured Obligations and be secured by the Collateral;



(viii) maintain possession of all tangible Collateral at the locations set forth on
Exhibit A and not remove the Collateral from those locations (except for Inventory in
transit, sales of Inventory, permitted use of other Collateral and proceeds thereof in the ordinary
course of business and disposal of Equipment [as permitted by the Transaction Documents]) without
giving Secured Party at least 15 days prior notice of such action and complying with the other
terms of this Agreement; provided that such location is within the [continental United States];



(ix) promptly notify Secured Party in writing of any contract with respect to which the
account debtor is (A) a United States Account Debtor, (B) any state, city, county or other
governmental authority (other than a United States Account Debtor) or any department, agency or
instrumentality of any of them, or any foreign government or instrumentality thereof, if at any
time, the account debtor owes Debtor, in the aggregate, in excess of $20,000, or (C) a business
which is located in a foreign country;



(vi) take any other and further action reasonably necessary or desirable as requested by
Secured Party to grant Secured Party control over the Collateral, including the execution and/or
authentication of any assignments or third party agreements; upon and during the continuation of an
Event of Default, to obtain delivery of the Collateral to the possession of Secured Party; or to
obtain acknowledgments of the lien of Secured Party from third parties in possession of any
Collateral. Debtor agrees to consent to and authorize any third party in an authenticated record
or agreement between Debtor, Secured Party, and the third party, including depository institutions,
securities intermediaries, and issuers of letters of credit or other supporting obligations to
accept direction from Secured Party regarding the maintenance and disposition of the Collateral and
the products and proceeds thereof, and to enter into agreements with Secured Party regarding same,
without further consent of Debtor;



(xi) if Debtor shall at any time hold or acquire a commercial tort claim, promptly notify
Secured Party in a writing signed by Debtor of the particulars thereof and grant to Secured Party
in such writing a security interest therein and in the proceeds thereof, all upon the terms of this
Agreement, with such writing to be in form and substance satisfactory to Secured Party;



(xii) deliver to Secured Party, promptly on Secured Party’s request, any instrument (whether
negotiable or non-negotiable) or any chattel paper that evidences any amount payable under or in
connection with any of the Collateral, which, in each instance, is duly indorsed to Secured Party
in a manner acceptable to it, to be held as Collateral pursuant to this Agreement;



(xiii) not, without the prior written consent of Secured Party, change the form of or the
jurisdiction of Debtor’s organization;



(xiv) not back date, post date or redate any invoice issued by Debtor with respect to any
Account; and



(xv) on Secured Party’s request, deliver to Secured Party any and all evidences of ownership
of the Collateral, including any certificates of title and applications for title pertaining to
Debtor’s motor vehicles so that Secured Party may cause its security interest and lien to be noted
on such certificates of title. Debtor will not permit any of the Equipment to become an accession
to other personal property not constituting part of the Collateral.



(b) To protect, perfect, or enforce, from time to time, Secured Party’s rights or interests in
the Collateral, Secured Party may, in its discretion (but without any obligation to do so), (i)
discharge any liens or security interests (other than those created by this Agreement) at any time
levied or placed on the Collateral, (ii) pay any insurance to the extent Debtor has failed to
timely pay the same, (ii) maintain guards, if an Event of Default has occurred and is continuing,
(A) at Debtor’s chief executive offices or (B) where any Collateral constituting documents,
equipment, instruments, inventory, or tangible chattel paper with a value in excess of $10,000 is
located, and (iv) obtain any record from any service bureau and pay such service bureau the cost
thereof. All costs and expenses incurred by Secured Party in exercising its discretion under this
subparagraph (b) will be part of the Secured Obligations, payable on Secured Party’s demand and
secured by the Collateral.



(c) Debtor shall remain liable under any contracts and agreements included in the Collateral
to perform all of its duties and obligations thereunder to the same extent as if this Agreement had
not been executed, and Secured Party shall not have any obligation or liability under such
contracts and agreements by reason of this Agreement or otherwise.



6. ACCOUNTS:



(a) Debtor hereby agrees that Secured Party may, upon the occurrence and during the
continuation of an Event of Default, serve written notice on Debtor instructing Debtor to deliver
to Secured Party all subsequent payments on Accounts which Debtor shall do until notified
otherwise.



(b) Secured Party may, upon the occurrence and during the continuation of an Event of Default,
notify the account debtor(s) of its security interest and instruct such account debtor(s) to make
further payments on Accounts to Secured Party instead of to Debtor.



(c) Secured Party may also, at any time and from time to time, in its own name or in the name
of others, periodically communicate with Debtor’s account debtors and other obligors to verify with
them, to Secured Party’s satisfaction, the existence, amount and terms of any sums owed by such
account debtors or other obligors to Debtor and the nature of any such account debtor’s or other
obligor’s relationship with Debtor. In addition, Secured Party may also, upon the occurrence or
during the continuation of an Event of Default, communicate with Debtor’s customers to verify with
them, to Secured Party’s satisfaction, the existence and the nature of any such customer’s
relationship with Debtor.



(d) Secured Party may, upon the occurrence and during the continuation of an Event of Default,
serve written notice upon Debtor that all subsequent billings or statements of account rendered to
any account debtor shall bear a notation directing the account debtor(s) to make payment directly
to Secured Party. Any payment received by Secured Party pursuant to this Section shall be retained
in a separate non-interest-bearing account as security for the payment of all Secured Obligations.



7. POWER OF ATTORNEY: Debtor hereby makes, constitutes and appoints Secured Party its true and
lawful attorney in fact to act with respect to the Collateral in any transaction, legal proceeding,
or other matter in which Secured Party is acting pursuant to this Agreement. Debtor: (i)
specifically authorizes Secured Party as its true and lawful attorney in fact to execute and/or
authenticate on its behalf and/or file financing statements reflecting its security interest in the
Collateral and any other documents reasonably necessary or desirable to perfect or otherwise
further the security interest granted herein; (ii) specifically authorizes Secured Party to act as
its true and lawful attorney in fact to execute and/or authenticate any third party agreements or
assignments to grant Secured Party control over the Collateral, including third party agreements
between Debtor, Secured Party, and depository institutions, securities intermediaries, and issuers
of letters of credit or other supporting obligations which third party agreements direct the third
party to accept direction from Secured Party regarding the maintenance and disposition of the
Collateral and the products and proceeds thereof, such power of attorney to be exercised after the
occurrence and during the continuation of an Event of Default or after Debtor’s failure to so
execute and/or authenticate after Secured Party’s request therefor after the occurrence and during
the continuation of an Event of Default; and (iii) specifically authorizes Secured Party, upon the
occurrence and during the continuation of an Event of Default, to issue, without further consent of
Debtor, all (a) instructions to any bank at which any deposit account is maintained with respect to
all existing or future funds held in such deposit account and (b) exclusive entitlement orders to
all securities intermediaries with respect to all existing or future investment property held in
any securities account maintained by such securities intermediary. Debtor recognizes and agrees
that this power of attorney is a power coupled with an interest and shall be irrevocable. Debtor
ratifies and confirms all actions taken by the Secured Party or its agents pursuant to this power
of attorney.



8. DEFAULT: If an Event of Default occurs and is continuing, then, in any such event, Secured
Party may, without further notice to Debtor, at Secured Party’s option, take all actions permitted
under the Secured Note. In addition, Secured Party may resort to the rights and remedies available
at law, in equity and under the Transaction Documents, including the rights and remedies of a
secured party under the Uniform Commercial Code, including the right (i) to enter any premises of
Debtor, with or without legal process and take possession of the Collateral and remove it and any
records pertaining thereto and/or remain on such premises and use it for the purpose of collecting,
preparing and disposing of the Collateral; (ii) to ship, reclaim, recover, store, finish, maintain
and repair the Collateral; and (iii) to sell the Collateral at public or private sale in a manner
that complies in all material respects with all applicable laws, and Debtor will be credited with
the net proceeds of such sale, after payment in full of all Obligations, only when they are
actually received by Secured Party; any requirement of reasonable notice of any disposition of the
Collateral will be satisfied if such notice is sent to Debtor 10 days prior to such disposition.
Debtor will, upon request, assemble the Collateral and any records pertaining thereto and make them
available at a place designated by Secured Party. Moreover, Secured Party may, without notice to
Debtor, apply for and have a receiver appointed under state or federal law by a court of competent
jurisdiction in any action taken by Secured Party to enforce its rights and remedies under this
Agreement and, as applicable, Secured Note and the other Transaction Documents in order to manage,
protect, preserve, and sell and otherwise dispose of all or any portion of the Collateral and/or
continue the operation of the business of Debtor, and to collect all revenues and profits thereof
and apply the same to the payment of all expenses and other charges of such receivership, including
the compensation of the receiver, and to the payment of the Secured Obligations until a sale or
other disposition of such Collateral is finally made and consummated. Secured Party may use, in
connection with any assembly or disposition of the Collateral, any trademark, tradename,
tradestyle, copyright, patent right, trade secret or technical process used or utilized by Debtor.
No remedy set forth herein is exclusive of any other available remedy or remedies, but each is
cumulative and in addition to every other remedy given under this Agreement, the Secured Note or
now or hereafter existing at law or in equity or by statute. Secured Party may proceed to protect
and enforce its rights by an action at law, in equity or by any other appropriate proceedings. No
failure on the part of Secured Party to enforce any of the rights hereunder shall be deemed a
waiver of such rights or of any Event of Default and no waiver of any Event of Default will be
deemed to be a waiver of any subsequent Event of Default. Moreover, Debtor acknowledges and agrees
that Secured Party shall have no obligation to, and Debtor hereby waives to the fullest extent
permitted by law any right that it may have to require Secured Party to, (a) clean up or otherwise
prepare any of the Collateral for sale, (b) pursue any third party to collect any of the
Obligations, or (c) exercise collection remedies against any third party obligated on the
Collateral. Secured Party’s compliance with applicable local, state or federal law requirements,
in addition to those imposed by the Uniform Commercial Code, in connection with a disposition of
any or all of the Collateral will not be considered to adversely affect the commercial
reasonableness of any disposition of any or all of the Collateral under the Uniform Commercial
Code.



9. GENERAL PROVISIONS:



(a) All rights of Secured Party shall inure to the benefit of its successors, assigns and
affiliates and all obligations of Debtor shall bind the successors and assigns of Debtor.



(b) This Agreement, the Secured Note and the other Transaction Documents contain the entire
agreement of the parties with respect to the subject matter of this Agreement and supercede all
previous understandings and agreements relating to the subject matter hereof, and no oral agreement
whatsoever, whether made contemporaneously herewith or hereafter shall amend, modify or otherwise
affect the terms of this Agreement.



(c) All rights and liabilities hereunder shall be governed and limited by and construed in
accordance with the local laws of the State of Georgia (without regard to Georgia conflicts of law
principles).



(d) If any provision of this Agreement is found invalid by a court of competent jurisdiction,
the invalid term will be considered excluded from this Agreement and will not invalidate the
remaining provisions of this Agreement.



(e) Debtor hereby authorizes Secured Party to file a copy of this Agreement as a financing
statement with government authorities necessary to perfect Secured Party’s security interest in the
Collateral. Debtor hereby irrevocably authorizes Secured Party at any time and from time to time
to file in any filing office in any jurisdiction any initial financing statements and amendments
thereto that (i) indicate the Collateral (A) as all assets of Debtor, whether now owned or
hereafter acquired or arising, and all proceeds and products thereof and (B) as being of an equal
or lesser scope or with greater detail, and (ii) provide any other information required by Part 5
of Article 9 of the Uniform Commercial Code for the sufficiency or filing office acceptance of any
financing statement or amendment, including whether Debtor is an organization, the type of
organization and any organizational identification number issued to Debtor. Debtor hereby
irrevocably authorizes Secured Party at any time and from time to time to correct or complete, or
to cause to be corrected or completed, any financing statements, continuation statements or other
such documents as have been filed naming Debtor as debtor and Secured Party as secured party.
Secured Party is hereby authorized to give notice to any creditor, landlord or any other person as
may be necessary or desirable under applicable laws to evidence, protect, perfect, or enforce the
security interest granted to Secured Party in the Collateral.



(f) Secured Party shall have no duty of care with respect to the Collateral except that
Secured Party shall exercise reasonable care with respect to the Collateral in Secured Party’s
custody. Secured Party shall be deemed to have exercised reasonable care if (A) such property is
accorded treatment substantially equal to that which Secured Party accords its own property or (B)
Secured Party takes such action with respect to the Collateral as Debtor shall reasonably request
in writing. Secured Party will not be deemed to have, and nothing in this subparagraph (g) may be
construed to deem that Secured Party has, failed to exercise reasonable care in the custody or
preservation of Collateral in its possession merely because either (1) Secured Party failed to
comply with any request of Debtor or (2) Secured Party failed to take steps to preserve rights
against any third party in such property. Debtor agrees that Secured Party has no obligation to
take steps to preserve rights against any prior parties.



(g) Any capitalized term used but not defined herein shall have the meaning ascribed thereto
in the Secured Note. The definition of any document, instrument or agreement includes all
schedules, attachments and exhibits thereto and all renewals, extensions, supplements, restatements
and amendments thereof. All schedules, exhibits or other attachments to this Agreement are
incorporated into, and are made and form an integral part of, this Agreement for all purposes. As
used in this Agreement, “hereunder,” “herein,” “hereto,” “this Agreement” and words of similar
import refer to this entire document; “including” is used by way of illustration and not by way of
limitation, unless the context clearly indicates the contrary; the singular includes the plural and
conversely; and any action required to be taken by Debtor is to be taken promptly, unless the
context clearly indicates the contrary.



(h) The transactions contemplated in this Security Agreement shall be governed as to validity,
interpretation, construction, effect, and in all other respects by the laws of the State of
Georgia, without regard to the conflicts of laws principals thereof. Debtor irrevocably submits to
the exclusive jurisdiction of the courts of the State of Georgia located in the County of Cobb and
the United States District Court in and for the Northern District of Georgia for the purpose of any
suit, action, proceeding or judgment relating to or arising out of this Security Agreement and the
transactions contemplated thereby. Borrower irrevocably consents to the jurisdiction of any such
court in any such suit, action or proceeding and to the laying of venue in such court, irrevocably
waives any objection to the laying of venue of any such suit, action or proceeding brought in such
courts, and irrevocably waives any claim that any such suit, action or proceeding brought in any
such court has been brought in an inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT
TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS SECURITY AGREEMENT AND REPRESENTS
THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.



This Security Agreement (as used hereinabove, this “Agreement”) is made and dated as
of the        day of        2010.



	 	 	 
	[VIASPACE, INC.][VGE]IPA BVI]	 	 
	[IPA China] SUNG HSIEN CHANG
	By:

	 	By:
	 

	 	 
	Name:     

Title:      

	 	









(a)EXHIBIT A




Debtor’s Organizational Identification



Debtor’s Federal Tax Identification Number:



Debtor’s Chief Executive Office and Mailing Address:



Debtor’s Offices or Locations Where any Collateral is Located:



Trade Names, Assumed Names and Fictitious Names:



A. Currently in Use



B. Used During Last Five Years but not Currently in Use



Assets Acquired in Bulk Transfer:



Section 1.02



11



EXHIBIT B




	 	 	 
	Section 1.03

	 	Commercial Tort Claims:
	Section 1.04

	 	Investment Property:
	Section 1.05

	 	Electronic Chattel Paper:
	Section 1.06

	 	Instruments:
	Section 1.07

	 	Deposit Accounts:






Other Accounts used in operations



Letters of Credit:



(a)



 



EXHIBIT C




Trademarks















12






EXHIBIT “D”




FORM OF STOCK PLEDGE AGREEMENT





13






EXHIBIT “D”




Subject to amendment to conform to any special filing requirements under the laws of the BVI or PRC




FORM OF

STOCK PLEDGE AGREEMENT




THIS STOCK PLEDGE AGREEMENT (this “Agreement”) is dated as of March   , 2010, by and between
[VIASPACE, INC., a Nevada corporation][VIASPACE Green Energy Inc., a British Virgin Islands
corporation (“VGE”)][Inter-Pacific Arts Corp., a British Virgin Islands international business
company (“IPA BVI”)] (the “Pledgor”), and SUNG HSIEN CHANG (the “Noteholder”).



W I T N E S S E T H:




WHEREAS, pursuant to a Secured Promissory Note, dated as of the        day of      , 2010 (as the
same may be amended, modified or supplemented from time to time, the “Secured Note”) issued by the
Pledgor in favor of the Noteholder; and



WHEREAS, the Pledgor agreed to secure its obligations under the Secured Note in accordance
with the terms of this Agreement and the other applicable Security Documents (as defined in the
Secured Note) .



NOW, THEREFORE, in consideration of these premises and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:



1. Definitions. Capitalized terms used herein but not otherwise defined shall have the
meanings ascribed to such terms in the Secured Note.



2. Pledge and Grant of Security Interest. To secure the prompt payment and performance in
full when due, whether by lapse of time or otherwise, of the Secured Obligations (as defined in
Section 3 hereof), Pledgor hereby pledges and assigns to the Noteholder and grants to the
Noteholder, a continuing security interest in any and all right, title and interest of Pledgor in
and to the following, whether now owned or existing or owned, acquired or arising hereafter
(collectively, the “Pledged Collateral”):



(a) Pledged Shares. 65% of all of the issued and outstanding shares of capital stock
(the “Shares”) of [VIASPACE Green Energy Inc., a company organized under the laws of the British
Virgin Islands (“VGE”)] [Inter-Pacific Arts Corp., a British Virgin Islands international business
company (“IPA BVI”)][Guangzhou Inter-Pacific Arts Corp., a Chinese wholly owned foreign
enterprise registered in Guangdong province (“IPA China”](the “Subsidiary”) (all certificates
representing such shares and all options and other rights, contractual or otherwise, with respect
thereto, collectively the “Pledged Shares”), unless Noteholder obtains advice from counsel that the
pledge of a greater number of shares shall not cause adverse legal or tax consequences to
Noteholder, in which case Noteholder may cause Pledgor to pledge a greater number of the Shares, up
to [      ]% thereof (the “Right to Increase Pledge”). In no event shall Pledgor cause, authorize,
approve or permit Subsidiary to issue, sell, convey, transfer, grant or otherwise encumber or
otherwise grant any right or other Lien in or on any of its Shares in favor of any Person without
the prior written consent of Noteholder.



(b) Additional Shares. Subject to the Right to Increase Pledge, 65% of such issued
and outstanding shares of capital stock of any subsidiary organized in a jurisdiction outside of
the United States and the that number of issued and outstanding shares of capital stock held by
Pledgor of any subsidiary organized in a jurisdiction inside the United States, which is hereafter
formed or acquired by Pledgor or is a successor to Pledgor, including, without limitation, the
certificates representing such shares.



(c) [delete in the case of VIASPACE]Other Equity Interests. Any and all other equity
interests of Pledgor in any direct or indirect subsidiary of the Pledgor.



(d) Proceeds. All proceeds and products of the foregoing (other than dividends and
interest permitted to be received, retained and used by Pledgor pursuant to Section 7(f) hereof),
however and whenever acquired and in whatever form.



Without limiting the generality of the foregoing, it is hereby specifically understood and
agreed that Pledgor may, with the prior written consent of the Noteholder, from time to time
hereafter deliver additional shares of stock to the Noteholder as collateral security for the
Secured Obligations. Upon delivery to the Noteholder, such additional shares of stock shall be
deemed to be part of the Pledged Collateral and shall be subject to the terms of this Agreement
whether or not Schedule 1 is amended to refer to such additional shares.



3. Security for Secured Obligations. The security interest created hereby in the Pledged
Collateral constitutes continuing collateral security for all money which Pledgor is or at any
time may become actually or contingently liable to pay to or for the account of Noteholder for any
reason whatever under the Secured Note (collectively, the “Secured Obligations”).



4. Delivery of the Pledged Collateral. Pledgor hereby agrees that:



(a) Certificates. Pledgor shall deliver to the Noteholder (i) simultaneously with or
prior to the execution and delivery of this Agreement, all certificates representing the Pledged
Shares and (ii) promptly upon the receipt thereof by or on behalf of Pledgor, all other
certificates and instruments constituting Pledged Collateral. Prior to delivery to the Noteholder,
all such certificates and instruments constituting Pledged Collateral shall be held in trust by
Pledgor for the benefit of the Noteholder pursuant hereto. All such certificates shall be
delivered in suitable form for transfer by delivery or shall be accompanied by duly executed
instruments of transfer or assignment in blank, in form provided in Schedule 2 attached
hereto.



(b) Additional Securities. If Pledgor shall receive by virtue of its being or having
been the owner of any Pledged Collateral, any (i) stock certificate, including without limitation,
any certificate representing a stock dividend or distribution in connection with any increase or
reduction of capital, reclassification, merger, consolidation, sale of assets, combination of
shares, stock splits, spin-off or split-off, promissory notes or other instrument; (ii) option or
right, whether as an addition to, substitution for, or an exchange for, any Pledged Collateral or
otherwise; (iii) dividends payable in securities; or (iv) distributions of securities in connection
with a partial or total liquidation, dissolution or reduction of capital, capital surplus or
paid-in surplus, then Pledgor shall receive such stock certificate, instrument, option, right or
distribution in trust for the benefit of the Noteholder, shall segregate it from Pledgor’s other
property and shall deliver it forthwith to the Noteholder in the exact form received together with
any necessary endorsement and/or appropriate stock power duly executed in blank substantially in
the form provided in Schedule 2, to be held by the Noteholder as Pledged Collateral and as
further collateral security for the Secured Obligations.



(c) Financing Statements. Pledgor hereby authorizes the Noteholder to file such UCC
financing statements the Noteholder may reasonably deem appropriate in order to perfect and protect
the security interest created hereby in the Pledged Collateral.



5. Representations and Warranties. Pledgor hereby represents and warrants to the
Noteholder, that so long as the Secured Note is in effect or any amounts payable thereunder shall
remain outstanding:



(a) Authorization of Pledged Shares. The Pledged Shares are duly authorized and
validly issued, are fully paid and nonassessable and are not subject to the preemptive rights of
any person or entity. All other shares of stock constituting Pledged Collateral will be duly
authorized and validly issued, fully paid and nonassessable and not subject to the preemptive
rights of any person or entity. Pledgor owns the capital stock of the corporations listed on
Schedule I attached hereto as and to the extent so described therein.



(b) Title. Pledgor has good and indefeasible title to the Pledged Collateral and will
at all times be the legal and beneficial owner of the Pledged Collateral free and clear of any lien
or other encumbrance, except for any security interests in favor of Noteholder. There exists no
“adverse claim” within the meaning of Section 8-302 of the Uniform Commercial Code as in effect in
the State of Georgia (the “UCC”) with respect to the Pledged Shares.



(c) Exercising of Rights. The exercise by the Noteholder of its rights and remedies
hereunder does not violate any law or governmental regulation or any material contractual
restriction binding on or affecting Pledgor or any of its property.



(d) Pledgor’s Authority. No authorization, approval or action by, and no notice or
filing with any governmental authority or with the issuer of any Pledged Stock is required either
(i) for the pledge made by Pledgor or for the granting of the security interest by Pledgor pursuant
to this Agreement; or (ii) for the exercise by the Noteholder of its rights and remedies hereunder
(except as may be required by laws affecting the offering and sale of securities).



(e) Security Interest/Priority. This Agreement creates a valid security interest in
favor of the Noteholder in the Pledged Collateral. The taking possession by the Noteholder of the
certificates representing the Pledged Shares and all other certificates and instruments
constituting Pledged Collateral will perfect and establish the first priority of the Noteholder’s
security interest in the Pledged Shares and in all other Pledged Collateral represented by Pledged
Shares and instruments securing the Secured Obligations. Except as set forth in this Section 5(e),
no action is necessary to perfect or otherwise protect such security interest in the Pledged Shares
and Pledged Collateral represented by certificates.



6. Covenants. Pledgor hereby covenants that so long as the Secured Note is in effect or
any Secured Obligations remains unpaid, Pledgor shall:



(a) Books and Records. Mark its books and records (and shall cause the issuer of the
Pledged Shares to mark its books and records) to reflect the security interest granted to the
Noteholder pursuant to this Agreement.



(b) Defense of Title. Warrant and defend title to and ownership of the Pledged
Collateral at its own expense against the claims and demands of all other parties claiming an
interest therein, keep the Pledged Collateral free from all liens and security interests, except
for those in favor of Noteholder, and not sell, exchange, transfer, assign, lease or otherwise
dispose of Pledged Collateral or any interest therein.



(c) Further Assurances. Promptly execute and deliver at its expense all further
instruments and documents and take all further action that may be reasonably necessary and
desirable or that the Noteholder may reasonably request in order to (i) perfect and protect the
security interest created hereby in the Pledged Collateral; (ii) enable the Noteholder to exercise
and enforce its rights and remedies hereunder in respect of the Pledged Collateral; and
(iii) otherwise effect the purposes of this Agreement, including, without limitation and if
requested by the Noteholder, delivering to the Noteholder irrevocable proxies in respect of the
Pledged Collateral.



(d) Amendments. Not make or consent to any amendment or other modification or waiver
with respect to any of the Pledged Collateral or enter into any agreement or allow to exist any
restriction with respect to any of the Pledged Collateral other than pursuant hereto or as may be
permitted under the Secured Note.



(e) Compliance with Securities Laws. File all reports and other information now or
hereafter required to be filed by Pledgor with the United States Securities and Exchange Commission
and any other state, federal or foreign agency in connection with the ownership of the Pledged
Collateral.



7. Rights of the Noteholder.



(a) Power of Attorney. In addition to other powers of attorney contained herein,
Pledgor hereby designates and appoints the Noteholder and each of its designees or agents as its
attorney-in-fact, irrevocably and with power of substitution, with authority to take any or all of
the following actions upon the occurrence and during the continuance of an Event of Default:




(i) to demand, collect, settle, compromise, adjust, give discharges and releases
relating to the Pledged Collateral, all as the Noteholder may reasonably determine;




(ii) to commence and prosecute any actions at any court for the purposes of collecting
any of the Pledged Collateral and enforcing any other right in respect thereof;




(iii) to defend, settle or compromise any action brought and, in connection therewith,
give such discharge or release relating to the Pledged Collateral as the Noteholder may deem
appropriate;




(iv) to pay or discharge taxes, liens, security interests or other encumbrances levied
or placed on or threatened against the Pledged Collateral;




(v) to direct any parties liable for any payment under any of the Pledged Collateral to
make payment of any and all monies due and to become due thereunder directly to the
Noteholder or as the Noteholder shall direct;




(vi) to receive payment of and receipt for any and all monies, claims, and other
amounts due and to become due at any time in respect of or arising out of any Pledged
Collateral;




(vii) to sign and endorse any drafts, assignments, proxies, stock powers,
verifications, notices and other documents relating to the Pledged Collateral;




(viii) to exchange any of the Pledged Collateral or other property upon any merger,
consolidation, reorganization, recapitalization or other readjustment of the issuer thereof
and in connection therewith, deposit any of the Pledged Collateral with any depository,
transfer agent, registrar or other designated agency upon such terms as the Noteholder may
determine; and




(ix) to do and perform all such other acts and things as the Noteholder may reasonably
deem to be necessary, proper or convenient in connection with the Pledged Collateral.



The Pledgor recognizes and agrees that this power of attorney is a power coupled with an interest
and shall be irrevocable. The Noteholder shall be under no duty to exercise or withhold the
exercise of any of the rights, powers, privileges and options expressly or implicitly granted to
the Noteholder in this Agreement, and shall not be liable for any failure to do so or any delay in
doing so. The Noteholder shall not be liable for any act or omission or for any error of judgment
or any mistake of fact or law in its individual capacity or its capacity as attorney-in-fact except
acts or omissions resulting from its gross negligence or willful misconduct. This power of
attorney is conferred on the Noteholder solely to protect, preserve and realize upon its security
interest in the Pledged Collateral. The Pledgor ratifies and confirms all actions taken by the
Noteholder or its agents pursuant to this power of attorney.



(b) Performance by the Noteholder of Pledgor’s Obligations. If Pledgor fails to
perform any agreement or obligation contained herein, after the occurrence and during the
continuance of an Event of Default, the Noteholder itself may perform, or cause performance of,
such agreement or obligation, and the expenses of the Noteholder incurred in connection therewith
shall be payable by the Pledgor.



(c) Assignment by the Noteholder. The Noteholder may from time to time assign this
Agreement and its rights to the Pledged Collateral and any portion thereof, and the assignee shall
be entitled to all of the rights and remedies of the Noteholder under this Agreement in relation
thereto.



(d) The Noteholder’s Duty of Care. Other than the exercise of reasonable care to
assure the safe custody of the Pledged Collateral while being held by the Noteholder hereunder, the
Noteholder shall have no duty or liability to preserve rights pertaining thereto, it being
understood and agreed that Pledgor shall be responsible for preservation of all rights in the
Pledged Collateral, and the Noteholder shall be relieved of all responsibility for Pledged
Collateral upon surrendering it or tendering the surrender of it to Pledgor. The Noteholder shall
be deemed to have exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if such Pledged Collateral is accorded treatment substantially equal
to that which the Noteholder accords its own property, it being understood that the Noteholder
shall not have responsibility for (i) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relating to any Pledged Collateral,
whether or not the Noteholder has or is deemed to have knowledge of such matters; or (ii) taking
any necessary steps to preserve rights against any parties with respect to any Pledged Collateral.




(e) Voting Rights in Respect of the Pledged Collateral.




(i) So long as no Event of Default (as defined herein) shall have occurred and be
continuing, to the extent permitted by law, Pledgor may exercise any and all voting and
other consensual rights pertaining to the Pledged Collateral or any part thereof for any
purpose not inconsistent with the terms of this Agreement or the Secured Note;




(ii) Upon the occurrence and during the continuance of an Event of Default, all rights
of Pledgor to exercise the voting and other consensual rights which it would otherwise be
entitled to exercise pursuant to paragraph (i) of this Section shall cease and all such
rights shall thereupon become vested in the Noteholder which shall thereupon have the sole
right to exercise such voting and other consensual rights.




(f) Dividend Rights in Respect of the Pledged Collateral.




(i) So long as no Event of Default shall have occurred and be continuing and subject to
Section 4(b) hereof, Pledgor may receive, retain and use any and all dividends (other than
stock dividends and other dividends constituting Pledged Collateral which are addressed
hereinabove) or interest paid in respect of the Pledged Collateral to the extent they are
allowed under the Secured Note.




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




(A) all rights of Pledgor to receive the dividends and interest payments which it would
otherwise be authorized to receive, retain and use pursuant to paragraph (i) of this Section
shall cease and all such shall thereupon be vested in the Noteholder which shall thereupon
have sole right to receive and hold as Pledged Collateral such dividends and interest
payments; and




(B) all dividends and interest payments which are received by Pledgor contrary to the
provisions of paragraph (A) of this Section shall be received in trust for the benefit of
the Noteholder, shall be segregated from other property or funds of Pledgor, and shall be
forthwith paid over to the Noteholder as Pledged Collateral in the exact form received, to
be held by the Noteholder as Pledged Collateral and as further collateral security for the
Secured Obligations.



(g) Release of Pledged Collateral. The Noteholder may release any of the Pledged
Collateral from this Agreement or may substitute any of the Pledged Collateral for other Pledged
Collateral without altering, varying or diminishing in any way the force, effect, lien, pledge or
security interest of this Agreement as to any Pledged Collateral not expressly released or
substituted, and this Agreement shall continue as a lien, first priority security interest, pledge
and charge on all Pledged Collateral not expressly released or substituted when any of the Secured
Obligations remains outstanding with respect to the Noteholder.



8. Advances by Noteholder. On failure of Pledgor to perform any of the covenants and
agreements contained herein, the Noteholder may, at its sole option and in its sole discretion,
perform the same and in so doing may expend such sums as the Noteholder may reasonably deem
advisable in the performance thereof, including, without limitation, the payment of any taxes, a
payment to obtain a release of a lien or potential lien, expenditures made in defending against any
adverse claim and all other expenditures which the Noteholder may make for the protection of the
security hereof or which it may be compelled to make by operation of law. All such sums and
amounts so expended shall be repayable by the Pledgor promptly upon notice thereof and demand
therefor, shall constitute additional Secured Obligations and shall bear interest from the date
said amounts are expended at the default rate provided in the Note. No such performance of any
covenant or agreement by the Noteholder on behalf of Pledgor, and no such advance or expenditure
therefor, shall relieve the Pledgor of any default under the terms of this Agreement or the other
related documents. The Noteholder may make any payment hereby authorized in accordance with any
bill, statement or estimate procured from the appropriate public office or holder of the claim to
be discharged without inquiry into the accuracy of such bill, statement or estimate or into the
validity of any tax assessment, sale, forfeiture, tax lien, title or claim except to the extent
such payment is being contested in good faith by Pledgor in appropriate proceedings and against
which adequate reserves are being maintained in accordance with GAAP.



9. Events of Default. The occurrence of a default or event of default under the Secured
Note shall be an Event of Default hereunder (“Event of Default”).



10. Remedies Upon Default. If any Event of Default shall have occurred and be
continuing:



(a) Rights and Remedies. The Noteholder may exercise in respect of the Pledged
Collateral, in addition to other rights and remedies provided for herein or otherwise available to
it, all rights and remedies of a secured party on default under the UCC or any other applicable
law.



(b) Sale of Pledged Collateral. Without limiting the generality of this Section and
without notice (except as provided below), the Noteholder may, in its sole discretion, sell or
otherwise dispose of or realize upon the Pledged Collateral, or any part thereof, in one or more
parcels, at public or private sale, at any exchange or broker’s board or elsewhere, at such price
or prices and on such other terms as the Noteholder may deem commercially reasonable, for cash,
credit or for future delivery or otherwise in accordance with applicable law. To the extent
permitted by law, the Noteholder may in such event bid for the purchase of such securities.
Pledgor agrees that any requirement of reasonable notice shall be met if notice, specifying the
place of any public sale or the time after which any private sale is to be made, shall be
personally served on or mailed, postage prepaid, to Pledgor in accordance with the notice
provisions of the Secured Note at least 10 days before time of such sale. The Noteholder shall not
be obligated to make any sale of Pledged Collateral regardless of notice of sale having been given.
The Noteholder may adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned.



(c) Private Sale. The Pledgor recognizes that the Noteholder may deem it
impracticable to effect a public sale of all or any part of the Pledged Shares or any of the
securities constituting Pledged Collateral and that the Noteholder may, therefore, determine to
make one or more private sales of any such securities to a restricted group of purchasers who will
be obligated 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. Pledgor acknowledges that
any such private sale may be at prices and on terms no less favorable to the seller than the prices
and other terms which might have been obtained at a public sale and, notwithstanding the foregoing,
agrees that such private sale per se shall not be deemed to have been made in a
commercially unreasonable manner and that the Noteholder shall have no obligation to (i) register
such securities for public sale under the Securities Act of 1933, as amended, or any other similar
state registration laws, rules or regulations or (ii) delay sale of any such securities for the
period of time necessary to permit the issuer of such securities to register such securities for
public sale under the Securities Act of 1933.



(d) Retention of Pledged Collateral. The Noteholder may, after providing the notices
required by Section 9-621 of the UCC or otherwise complying with the requirements of applicable law
of the relevant jurisdiction, retain all or any portion of the Pledged Collateral in satisfaction
of the Secured Obligations. Unless and until the Noteholder shall have provided such notices,
however, the Noteholder shall not be deemed to have retained any Pledged Collateral in satisfaction
of any Secured Obligations for any reason.



(e) Application of Proceeds. Upon the occurrence and during the continuance of an
Event of Default, any payments in respect of the Secured Obligations and any proceeds of any
Pledged Collateral, when received by the Noteholder in cash or its equivalent, will be applied in
reduction of the Secured Obligations in such order as the Noteholder may determine in accordance
with the Secured Note, and Pledgor irrevocably waives the right to direct the application of such
payments and proceeds and acknowledges and agrees that the Noteholder shall have the continuing and
exclusive right to apply and reapply any and all such payments and proceeds notwithstanding any
entry to the contrary upon any of its books and records. The Pledgor shall remain liable to the
Noteholder for any deficiency.



(f) Deficiency. In the event that the proceeds of any sale, collection or realization
are insufficient to pay all amounts to which the Noteholder is legally entitled, the Pledgor shall
be liable for the deficiency, together with interest thereon at the default rate provided in the
Secured Note, together with the costs of collection and the reasonable fees of any attorneys
employed by the Noteholder to collect such deficiency. Any surplus remaining after the full
payment and satisfaction of the Secured Obligations shall be returned to Pledgor or to whomsoever a
court of competent jurisdiction shall determine to be entitled thereto.



11. Costs of Counsel. If at any time hereafter, after the occurrence and during the
continuance of an Event of Default or not, the Noteholder employs counsel to prepare or consider
amendments, waivers or consents with respect to this Agreement, or to take action or make a
response in or with respect to any legal or arbitral proceeding relating to this Agreement or
relating to the Pledged Collateral, or to protect the Pledged Collateral or exercise any rights or
remedies under this Agreement or with respect to any Pledged Collateral, then the Pledgor agrees to
promptly pay upon demand any and all such reasonable costs and expenses of the Noteholder.



12. Continuing, Agreement. This Agreement shall be a continuing agreement in every respect
and shall remain in full force and effect so long as any Secured Obligations shall remain unpaid,
including any obligations under this Agreement or the Secured Note. Upon such termination of this
Agreement, the Noteholder shall, upon the request and at the expense of Pledgor, forthwith release
all of its liens and security interests hereunder. Notwithstanding the foregoing all releases and
indemnities provided hereunder shall survive termination of this Agreement.


13. Amendments; Waivers; Modifications. This Agreement and the provisions hereof may not
be amended, waived, modified, changed, discharged or terminated except with the written consent of
all of the parties hereto.



14. Successors in Interest. This Agreement shall create a continuing security interest in
the Collateral and shall be binding upon Pledgor, its successors and assigns and shall inure,
together with the rights and remedies of the Noteholder hereunder, to the benefit of the Noteholder
and its successors and assigns; provided, however, that Pledgor may not assign its
rights or delegate its duties hereunder without the prior written consent of the Noteholder.



15. Notices. All notices required or permitted to be given under this Agreement shall be
in conformance with, and be effective as provided by, the terms of the Secured Note.



16. Counterparts. This Agreement may be executed in any number of counterparts, each of
which where so executed and delivered shall be an original, but all of which shall constitute one
and the same instrument. It shall not be necessary in making proof of this Agreement to produce or
account for more than one such counterpart.



17. Headings. The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of any provision of
this Agreement.



18. Governing Law. All rights and liabilities hereunder shall be governed and limited
by and construed in accordance with the local laws of the State of Georgia (without regard to
Georgia conflicts of law principles).



19. Venue and Jurisdiction; Waiver of Jury Trial. Pledgor irrevocably submits to the
exclusive jurisdiction of the courts of the State of Georgia located in the County of Cobb and the
United States District Court in and for the Northern District of Georgia for the purpose of any
suit, action, proceeding or judgment relating to or arising out of this Security Agreement and the
transactions contemplated thereby. Borrower irrevocably consents to the jurisdiction of any such
court in any such suit, action or proceeding and to the laying of venue in such court, irrevocably
waives any objection to the laying of venue of any such suit, action or proceeding brought in such
courts, and irrevocably waives any claim that any such suit, action or proceeding brought in any
such court has been brought in an inconvenient forum. THE PARTIES IRREVOCABLY AND VOLUNTARILY
WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CONTROVERSY OR CLAIM THAT
RELATES TO THIS AGREEMENT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO
THIS AGREEMENT.



20. Severability. If any provision of this Agreement is determined to be illegal, invalid
or unenforceable, such provision shall be fully severable and the remaining provisions shall remain
in full force and effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.



21. Entirety. This Agreement, the Secured Note and the other Transaction Documents
represent the entire agreement of the parties hereto and thereto, and supercede all prior
agreements and understandings, oral or written, if any, including any commitment letters or
correspondence relating to the Transaction Documents or the transactions contemplated herein and
therein.



22. Survival. All representations and warranties of Pledgor hereunder shall survive the
execution and delivery of this Agreement and the Secured Note.



23. Other Security. To the extent that any of the Secured Obligations is now or hereafter
secured by property other than the Pledged Collateral (including, without limitation, real property
and securities owned by Pledgor), or by a guarantee, endorsement or property of any other person or
entity, then the Noteholder shall have the right to proceed against such other property, guarantee
or endorsement upon the occurrence of any Event of Default, and the Noteholder has the right, in
its sole discretion, to determine which rights, security, liens, security interests or remedies the
Noteholder shall at any time pursue, relinquish, subordinate, modify or take with respect thereto,
without in any way modifying or affecting any of them or any of the Noteholder’s rights or the
Secured Obligations under this Agreement or under any other of the related documents.



[remainder of page intentionally left blank]






14






IN WITNESS WHEREOF, the parties, by their officers thereunto duly authorized, have executed
and delivered this Agreement as of the day and year first above written.



PLEDGOR:




[VIASPACE, INC.][VGE][IPA BVI][IPA China]




By:  

Name:      

Title:      





NOTEHOLDER:




SUNG HSIEN CHANG




By:  



15



SCHEDULE 1




[SCHEDULES 1 AND 2 WILL VARY FOR EACH PLEDGE AGREEMENT]



	 	 	 	 	 
	Name of Subsidiary	 	Number of Shares	 	Certificate Number
	Viaspace Green Energy, Inc.

	 	

	 	

	 

	 	

	 	







16




SCHEDULE 2




Form of Irrevocable Stock Power




FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to



the following shares of capital stock of       , a        corporation:



No. of Shares Certificate No.



and irrevocably appoints        its agent and attorney-in-fact to
transfer all or any part of such capital stock and to take all necessary and appropriate action to
effect any such transfer. The agent and attorney-in-fact may substitute and appoint one or more
persons to act for him. The effectiveness of a transfer pursuant to this stock power shall be
subject to any and all transfer restrictions referenced on the face of the certificates evidencing
such interest or in the certificate of incorporation or bylaws of the subject corporation, to the
extent they may from time to time exist. This Stock Power is subject to the terms of that certain
Pledge Agreement dated March   , 2010.



VIASPACE, INC.,



a Nevada corporation



By:

Name:

Title:




17



EXHIBIT E




[Reserved]



18



EXHIBIT E




[Reserved]



19



20



21



EXHIBIT F




FORM OF CHARTER AMENDMENT





22






EXHIBIT F




CERTIFICATE OF DESIGNATION OF

SERIES A PREFERRED STOCK

OF

VIASPACE, INC.




VIASPACE, Inc. (the “Corporation”), a corporation organized and existing under and by virtue
of the General Corporation Law of the State of Nevada, does hereby certify:



The name of the Corporation is VIASPACE, Inc.



The certificate of incorporation of the Corporation authorizes the issuance of Ten Million
(10,000,000) shares of Preferred Stock, $.001 par value, and expressly vests in the Board of
Directors of the Corporation the authority provided therein to provide for the issuance of said
shares in series and by filing a certificate pursuant to the applicable law of the State of Nevada,
to establish from time to time the number of shares to be included in each such series, and to fix
the designation, powers, preferences and rights of the shares of each such series and the
qualifications, limitations, or restrictions thereof.



The Board of Directors of the Corporation, pursuant to the authority expressly vested in it as
aforesaid, has adopted the following resolutions creating a “Series A” issue of Preferred Shares:



RESOLVED, that one series of the class of authorized Preferred Stock of the Corporation be and
hereby is created, and that the designation and amount thereof and the voting powers, preferences,
and relative participating, optional, and other special rights of the shares of each such series,
and the qualifications, limitations, or restrictions thereof, are as follows:



SERIES A PREFERRED STOCK




1. Designation and Amount. The shares of the series shall be designated “Series A
Preferred Stock” (the “Series A Preferred Stock”) and the number of shares constituting such series
shall be One (1) share.



2. Dividends. Holders of shares of Series A Preferred Stock shall not be entitled to
any dividends, whether payable in cash, property or stock.



3. Liquidation, Dissolution Or Winding Up. In the event of any voluntary or
involuntary liquidation, dissolution, or winding up of the Corporation, holders of shares of Series
A Preferred Stock then outstanding shall not be entitled to be paid out of the assets of the
Corporation available for distribution to its stockholders.



4. Voting Rights. Except as otherwise required by law, holders of each share of
Series A Preferred Stock shall be entitled to vote on all matters submitted to the holders of
Corporation’s capital stock, whether common stock or otherwise, for vote. Each share of Series A
Preferred Stock shall be entitled to cast that number of votes on all such matters as shall equal
fifty and one-tenth percent (50.1%) of the number of shares of capital stock entitled to vote on
such matter at the record date for determination of holders entitled to vote on any such matters
presented, or, if no such record date is established, at the date such vote is taken or any written
consent of such holders is solicited. With respect to such vote, holders of Series A Preferred
Stock shall have full voting rights and powers not less equal to the voting rights and powers of
the holders of Common Stock, and shall be entitled, notwithstanding any provision hereof, to notice
of any stockholders’ meeting in accordance with the bylaws of the Corporation, and shall be
entitled to vote, together with holders of Common Stock, with respect to any question upon which
holders of Common Stock have the right to vote. Fractional votes shall not, however, be permitted.
Except as otherwise expressly provided herein or as required by law, holders of Series A Preferred
Stock and the holders of Common Stock shall vote together and not as separate classes. Other than
as provided herein or required by law, there shall be no series voting.



5. Cancellation. The Series A Preferred Stock shall be or become cancelled or
otherwise terminated automatically upon and coincident with the date on which (i) holders of the
Series A Preferred Stock holds less than one hundred twenty million (120,000,000) shares of
Corporation’s common stock (as adjusted for any stock splits, stock dividends, combinations and the
like), (ii) timely payment by Corporation of the first four Installment Payments in accordance with
that certain Secured Promissory Note issued by Corporation in favor of Sung H. Chang (the “Secured
Promissory Note”) as of the        day of May 2010 (the “Original Issue Date”); provided,
however, that in no event shall the Series A Preferred Stock be cancelled or otherwise
terminate under this clause if an Event of Default (as defined in the Secured Promissory Note)
shall exist or (iii) Sung H. Chang transfers the Series A Preferred Stock to a third party;
provided, however, that notwithstanding any provision of this certificate of
designation to the contrary, including, without limitation, this clause (iii), holder may in his
sole and absolute discretion transfer, whether by last will & testament, gift or otherwise, the
Series A Preferred Stock to a trust or similar structure, his spouse or lineal descendents for
estate planning purposes or on account of his death or incapacity, in which case such Series A
Preferred Stock shall not terminate or otherwise be cancelled on account of any such transfer or
disposition.



6. Redemption. The Series A Preferred Stock shall not be subject to redemption,
whether at the option of either the Corporation or any holder of the Series A Preferred Stock.



7. Separate Vote of Preferred Stock. For so long as any shares of Series A Stock
remain outstanding, in addition to any other vote or consent required herein or by law, the vote or
written consent of the holders of the Series A Stock shall be required to effect or validate any
action which:




(a) alters or changes the voting powers, preferences, or other rights or privileges,
qualifications, limitations or restrictions of any or all series of Preferred Stock, whether
by merger, recapitalization, reclassification or otherwise;




(b) authorizes any class or series, or increases or decreases, whether by merger,
recapitalization, reclassification or otherwise, the authorized amount of any class or
series of equity securities of the Corporation;




(c) authorizes any amendment, modification, repeal or waiver of any provision of
Corporation’s certification of incorporation, this amendment to the certificate of
incorporation or the Bylaws, as each shall be amended from time to time;




(d) results in the redemption, repurchase, payment of dividends or other distributions
with respect to Common Stock (except for dividends or other distributions payable on Common
Stock solely in the form of Common Stock or acquisitions of Common Stock of the Corporation
pursuant to agreements approved by the Board of Directors which permit the Corporation to
repurchase such shares upon termination of services to the Corporation at the lower of the
original purchase price therefor and the then current fair market value thereof or in
exercise of the Corporation’s first right of refusal upon a proposed transfer);




(e) authorizes any substantial change in the business of the Corporation;




(f) authorizes the creation, issuance or holding of securities in any subsidiary of the
Corporation;




(g) results in the taxation of the holders of the shares of Preferred Stock under
Section 305 of the Internal Revenue Code, as from time to time amended;




(h) authorizes the acquisition of all or any portion of the assets, liabilities or
securities of any other person or entity;




(i) voluntarily dissolve or liquidate the Corporation;




(j) fundamentally change the principal business of the Corporation as presently
conducted or proposed to be conducted; or




(k) enter into any agreement regarding a merger, consolidation or other similar
transaction in which the then stockholders of the Corporation do not own fifty percent (50%)
or more of the outstanding shares of the surviving corporation or any agreement that
provides for the sale of all or substantially all of the assets of the Corporation.



8. Limitations on Reissuance. No share or shares of Series A Preferred acquired by
the Corporation by reason of redemption, purchase, conversion or otherwise shall be reissued, and
all such shares shall be cancelled, retired and eliminated from the shares which the Corporation
shall be authorized to issue.



9. Consent to Certain Distributions. To the extent the Corporation may be subject to
Section 2115 of the California Corporations Code, each holder of shares of Series A Preferred Stock
shall be deemed to have consented, for purposes of Sections 502 and 503 of the California
Corporations Code, to any dividend, distribution, or repurchase made by the Corporation and which
is approved by the Board of Directors.



10. Mutilated or Missing Preferred Stock Certificates. If any of the Series A
Preferred Stock certificates shall be mutilated, lost, stolen or destroyed, the Corporation shall
issue, in exchange and substitution for and upon cancellation of the mutilated Series A Preferred
Stock certificate, or in lieu of and in substitution for the Series A Preferred Stock certificate
lost, stolen or destroyed, a new Series A Preferred Stock certificate of like tenor and
representing an equivalent number of shares of Series A Preferred Stock, but only upon receipt of
evidence of such loss, theft or destruction of such Series A Preferred Stock certificate and
indemnity, if requested.



11. Reissuance of Preferred Stock. Shares of Series A Preferred Stock that have been
issued and reacquired in any manner, including shares purchased or redeemed or exchanged, shall
(upon compliance with any applicable provisions of the laws of the State of Nevada) have the status
of authorized and unissued shares of preferred stock undesignated as to series and may be
redesignated and reissued as part of any series of preferred stock other than the Series A
Preferred Stock.



12. Business Day. If any payment, redemption or exchange shall be required by the
terms hereof to be made on a day that banks are not open in the State of Nevada, such payment,
redemption or exchange shall be made on the immediately succeeding day on which such banks are
open.



13. Headings of Subdivisions. The headings of various subdivisions hereof are for
convenience of reference only and shall not affect the interpretation of any of the provisions
hereof.



14. Severability. If any right, preference or limitation of the Series A Preferred
Stock set forth in these resolutions and the Certificate of Designations filed pursuant hereto (as
such resolution may be amended from time to time) is invalid, unlawful or incapable of being
enforced by reason of any rule of law or public policy, all other rights, preferences and
limitations set forth in this resolution (as so amended) which can be given effect without the
invalid, unlawful or unenforceable right, preference or limitation shall, nevertheless, remain in
full force and effect, and no right, preference or limitation herein set forth shall be deemed
dependent upon any other such right, preference or limitation unless so expressed herein.



FURTHER RESOLVED, that the statements contained in the foregoing resolutions creating and
designating the said Series A Preferred Stock and fixing the number, powers, preferences and
relative, optional, participating, and other special rights and the qualifications, limitations,
restrictions, and other distinguishing characteristics thereof shall, upon the effective date of
each said series, be deemed to be included in and be a part of the certificate of incorporation of
the Corporation pursuant to the provisions of Nevada Revised Statutes.



IN WITNESS WHEREOF, the Corporation has caused this Certificate to be signed by its Secretary,
this        day of      , 2010. The signature below shall constitute the affirmation or
acknowledgment of the signatory, under penalties of perjury, that the instrument is the act and
deed of the Corporation and that the facts stated herein are true.



 /s/ 



____________, Secretary







23






EXHIBIT G




FORM OF REGISTRATION RIGHTS





24






EXHIBIT G




REGISTRATION RIGHTS AGREEMENT




     This REGISTRATION RIGHTS AGREEMENT, dated as of April      , 2010 (this
“Agreement”), is by and between VIASPACE Inc., a Nevada corporation (the
“Company”), and Sung Hsien Chang, an individual resident of the State of Georgia
(“Shareholder”). The Company and Shareholder are sometimes referred to herein as a
“Party” and collectively as the “Parties.”



RECITALS




     WHEREAS, pursuant to the transactions contemplated by that certain Share Purchase
Agreement, dated of even date herewith (the “Share Purchase Agreement”), between the
Parties, the Company will issue to Shareholder 241,667,000 shares of Common Stock (as defined
below) (the “Acquired Shares”) on the closing date of the transactions contemplated therein
(the “Closing Date”);



     WHEREAS, immediately prior to the Closing Date, Shareholder also owned 215,384,615 shares
of Common Stock (“Pre-Closing Shares”); and



     WHEREAS, it is a condition precedent to the closing of the transactions contemplated by
the Share Purchase Agreement that the parties hereto execute and deliver this Registration Rights
Agreement.



     NOW THEREFORE, for good and valuable consideration, the receipt of which is hereby
acknowledged, the Company desires to provide to each Holder (as defined below) the rights to
register the Registrable Securities (as defined below) held by them under the Securities Act (as
defined below) on the terms and subject to the conditions set forth herein.



ARTICLE I

DEFINITIONS




     1.1 Definitions. As used in this Agreement, the following capitalized terms shall
have the following respective meanings:



     “Action” means any action, suit, arbitration, inquiry, proceeding, or
investigation by or before any governmental entity.



     “Affiliate” means, with respect to any Person, any other Person that directly, or
indirectly through one or more intermediaries, controls, is controlled by, or is under common
control with, such specified Person, and, with respect to a natural Person, shall also include the
spouse and minor children of such natural Person who share a household with such natural Person,
together with any other Person controlled by them and any revocable trust settled by them or any
trust of which such Person is a trustee.



     “Authority” means any domestic (including federal, state, or local) or foreign
court, arbitrator, administrative, regulatory, or other governmental department, agency, official,
commission, tribunal, authority, or instrumentality, non-government authority, or Self-Regulatory
Organization.



     “Common Stock” means the common stock of the Company, $0.001 par value per share.



     “Exchange Act” means the United States Securities Exchange Act of 1934, as
amended, and all rules and regulations promulgated thereunder.



     “FINRA” means the Financial Industry Regulatory Authority.



     “Holder” means Shareholder and any Affiliate of Shareholder who is permitted to
hold Registrable Securities from time to time in accordance with the terms of this Agreement, and,
in each case, who continues to be entitled to the rights of a Holder hereunder.



     “Person” means any individual, partnership, firm, corporation, limited liability
company, association, trust, unincorporated organization or other entity, as well as any syndicate
or group that would be deemed to be a person under Section 13(d)(3) of the Securities Exchange Act
of 1934, as amended.



     “Registrable Securities” means all and any Common Stock held from time to time by
a Holder, (including the Acquired Shares and the Pre-Closing Shares, any other Common Stock the
Holder may acquire, and any securities issuable or issued or distributed in respect of any such
Acquired Shares, Pre-Closing Shares or Common Stock by way of a stock dividend or stock split or in
connection with a combination of shares, recapitalization, reorganization, merger, amalgamation,
consolidation or otherwise). For purposes of this Agreement, Registrable Securities shall cease to
be Registrable Securities when (i) a Registration Statement covering such Registrable Securities
has been declared effective under the Securities Act by the SEC and such Registrable Securities
have been disposed of pursuant to such effective Registration Statement, (ii) the entire amount of
the Registrable Securities proposed to be sold by a Holder in a single sale, in the opinion of
counsel satisfactory to the Company and such Holder, each in their reasonable judgment, may be
distributed to the public in the United States pursuant to Rule 144 (or any successor provision
then in effect) under the Securities Act in any three-month period, (iii) any such Registrable
Securities have been sold in a sale made pursuant to Rule 144 (or any successor provision then in
effect) under the Securities Act, (iv) the Holder of the Registrable Securities is a non-affiliate
of the Company and the Registrable Securities are saleable without any requirement to comply with
any conditions in Rule 144, or (v) such Registrable Securities cease to be outstanding.



     “Registration Expenses” means all expenses in connection with or incident to the
registration of Registrable Securities hereunder, including (a) all SEC and any FINRA registration
and filing fees and expenses, (b) all fees and expenses in connection with the registration or
qualification of Registrable Securities for offering and sale under the securities or “blue sky”
laws of any state or other jurisdiction of the United States of America and, in the case of an
underwritten offering, determination of their eligibility for investment under the laws of such
jurisdictions as the managing underwriter or underwriters may reasonably designate, including
reasonable fees and disbursements, if any, of counsel for the underwriters in connection with such
registrations or qualifications and determination, (c) all expenses relating to the preparation,
printing, distribution and reproduction of any Registration Statement required to be filed
hereunder, each prospectus included therein or prepared for distribution pursuant hereto, each
amendment or supplement to the foregoing, the expenses of preparing Registrable Securities in a
form for delivery for purchase pursuant to such registration or qualification and the expense of
printing or producing any underwriting agreement(s) and agreement(s) among underwriters and any
“blue sky” or legal investment memoranda, any selling agreements and all other documents approved
for use in writing by the Company to be used in connection with the offering, sale or delivery of
Registrable Securities, (d) messenger, telephone and delivery expenses of the Company and
out-of-pocket travel expenses incurred by or for the Company’s personnel for travel undertaken for
any “road show” made in connection with the offering of securities registered thereby, (e) fees and
expenses of any transfer agent and registrar with respect to the delivery of any Registrable
Securities and any escrow agent or custodian involved in the offering, (f) fees, disbursements and
expenses of counsel of the Company and independent certified public accountants of the Company
incurred in connection with the registration, qualification and offering of the Registrable
Securities (including the expenses of any opinions or “comfort” letters required by or incident to
such performance and compliance), (g) fees, expenses and disbursements of counsel and any other
persons retained by the Company, including special experts retained by the Company in connection
with such registration, (h) Securities Act liability insurance, if the Company desires such
insurance, (i) transfer agents’ and registrars’ fees and expenses and the fees and expenses of any
other agent or trustee appointed in connection with such offering, and (j) the fees and expenses
incurred by the Company and its advisers in connection with the quotation or listing of Registrable
Securities on any securities exchange or automated securities quotation system. Notwithstanding
the foregoing, any (x) fees and expenses of any legal counsel or other advisors to a Holder and any
other out-of-pocket expenses of a Holder, (y) brokerage commissions attributable to the sale of any
of the Registrable Securities, and (z) commissions, fees, discounts, transfer taxes or stamp duties
and expenses of any underwriter or placement agent applicable to Registrable Securities offered for
a Holder’s account in accordance with this Agreement shall not be “Registration Expenses.”



     “Registration Statement” means a Demand Registration Statement or a Piggy-Back
Registration Statement, as the case may be.



     “Representatives” means with respect to any Party, the directors, officers,
employees, agents, attorneys, accountants, consultants, financial, and other advisors of such
Party.



     “SEC” means the United States Securities and Exchange Commission, or any
successor thereto.



     “Securities Act” means the United States Securities Act of 1933, as amended, and
all rules and regulations promulgated thereunder.



     “Self-Regulatory Organization” means FINRA, any United States or non-United
States securities exchange, commodities exchange, registered securities association, the Municipal
Securities Rulemaking Board, National Futures Association, and any other board or body, whether
United States or non-United States, that regulates brokers, dealers, commodity pool operators,
commodity trading advisors, or future commission merchants.



ARTICLE II

REGISTRATION RIGHTS




     2.1 Demand Registration Rights.



           (a)  Upon receipt of a written request from a Holder (such Holder, together with
its Affiliates, the “Exercising Holder”) requesting that the Company effect a registration
(a “Demand Registration”) under the Securities Act covering the registration of some or all
of the Registrable Securities, and which notice shall specify the number of Registrable Securities
for which registration is requested and the intended method or methods of distribution thereof, the
Company shall (i) give notice of such election within 30 days after receipt of the Exercising
Holders’ notice to each other Holder, which notice shall set forth the identity of the Exercising
Holder(s) requesting such registration, and such Holders shall have the right, by giving written
notice to the Company within 30 days after the Company provides its notice, to elect to have
included in such registration such of their Registrable Securities as such Holders may request in
such notice of election and (ii) use reasonable efforts to, as soon as reasonably practicable,
after receipt of such written request, file with the SEC and use reasonable efforts to cause to be
declared effective, a registration statement (a “Demand Registration Statement”) relating
to all of the Registrable Securities that the Company has been so requested to register for sale,
to the extent required to permit the disposition (in accordance with the intended method or methods
of distribution thereof) of the Registrable Securities so registered.



           (b)  If the Demand Registration relates to an underwritten public offering and the
managing underwriter of such proposed public offering advises the Company and the Exercising Holder
that, in its reasonable opinion, the number of Registrable Securities requested to be included in
the Demand Registration (including securities to be sold by the Company or any other security
holder, including any Holders other than the Exercising Holder (such Holders, the
“Non-Exercising Holders”)) exceeds the largest number of securities which reasonably can be
sold in such offering without having a material adverse effect on such offering, including the
price at which such securities can be sold (the “Maximum Offering Size”), then the Company
shall include in such Demand Registration, up to the Maximum Offering Size, first, the Registrable
Securities the Exercising Holder proposes to register, second, the Registrable Securities any
Non-Exercising Holder proposes to register, and third, any securities the Company proposes to
register and any securities with respect to which any other security holder has requested
registration. The Company shall not hereafter enter into any agreement which is inconsistent with
the rights of priority provided in this Section 2.1(b).



           (c)  Notwithstanding anything to the contrary contained herein, a registration
requested pursuant to this Section 2.1 shall not be deemed to have been effected for purposes of
this Section 2.1(c) unless (A) it has been declared effective by the SEC, (B) it has remained
effective for the period set forth in Section 2.4(a) and (C) the offering of Registrable Securities
pursuant to such registration is not subject to any stop order, injunction or other order or
requirement of the SEC; provided, however, that in the event the Exercising Holder revokes a Demand
Registration request (which revocation may only be made prior to the Company requesting
acceleration of effectiveness of the registration statement) then such Demand Registration shall
count as having been effected unless the Exercising Holder pays all Registration Expenses in
connection with such revoked Demand Registration within seven (7) days of written request therefor
by the Company.



           (d)  Notwithstanding anything to the contrary contained herein, the Company shall
not be required to prepare and file (i) more than one (1) Demand Registration Statement in any
twelve-month period, (ii) any Demand Registration Statement within one hundred and eighty (180)
days following the date of effectiveness of any other Registration Statement or (ii) or three (3)
Demand Registration Statements in the aggregate.



          (e)  A Demand Registration requested pursuant to this Section 2.1 shall not be
deemed to have been effected unless the Demand Registration Statement relating thereto (i) has
become effective under the Securities Act and the Registrable Securities of the Holder included in
such Demand Registration Statement have actually been sold thereunder and (ii) has remained
effective for a period of at least that specified in Section 2.4(a); provided, however, that if
after any Demand Registration Statement requested pursuant to this Section 2.1 becomes effective,
such Demand Registration Statement is interfered with by any stop order, injunction or other order
or requirement of the SEC or other governmental agency or court solely due to the actions or
omissions to act of the Company, such Demand Registration Statement shall be at the sole expense of
the Company and shall not be included as one of the Demand Registrations which may be requested
pursuant to this Section 2.



     2.2 Piggy-Back Registration.



           (a)  If the Company proposes to file on its behalf and/or on behalf of any holder
of its securities (other than a holder of Registrable Securities) a registration statement under
the Securities Act on any form (other than a registration statement on Form S-4, F-4 or S-8 (or any
successor form) for securities to be offered in a transaction of the type referred to in Rule 145
under the Securities Act or to employees of the Company pursuant to any employee benefit plan,
respectively) for the registration of Common Stock (a “Piggy-Back Registration”), it shall
give written notice to all Holders at least thirty (30) days before the initial filing with the SEC
of such registration statement (a “Piggy-Back Registration Statement”), which
notice shall set forth the number of Common Stock that the Company and other holders of Common
Stock, if any, then contemplate including in such registration and the intended method of
disposition of such Common Stock.



           (b)  If any Holder desires to have Registrable Securities registered under this
Section 2.2 (the “Participating Piggy-Back Holders”), it shall advise the Company in
writing within ten (10) days after the date of receipt of such notice from the Company of its
desire to have Registrable Securities registered under this Section 2.2, and shall set forth the
number of Registrable Securities for which registration is requested. The Company shall thereupon
use reasonable efforts to include, or in the case of a proposed underwritten public offering, use
reasonable efforts to cause the managing underwriter or underwriters to permit such Holder to
include, in such filing the number of Registrable Securities for which registration is so
requested, subject to paragraph (c) below, and shall use reasonable efforts to effect registration
of such Registrable Securities under the Securities Act.



           (c)  If the Piggy-Back Registration relates to an underwritten public offering and
the managing underwriter of such proposed public offering advises the Company and the Holders that,
in its reasonable opinion, the number of Registrable Securities requested to be included in the
Piggy-Back Registration together with the securities being registered by the Company or any other
security holder exceeds the Maximum Offering Size, then:




                (i)  in the event the Company initiated the Piggy-Back Registration, the
Company shall include in such Piggy-Back Registration first, the securities the Company proposes
to register, second, the securities of the Participating Piggy-Back Holders, and third, the
securities of all other selling security holders, to be included in such Piggy-Back Registration
in an amount that together with the securities the Company proposes to register, shall not
exceed the Maximum Offering Size and shall be allocated among such selling security holders on a
pro rata basis (based on the number of Common Stock held by each such selling security holder);
and




                (ii)  in the event any holder of securities of the Company initiated the
Piggy-Back Registration, the Company shall include in such Piggy-Back Registration first, the
securities such initiating security holder proposes to register, second, the securities of any
other selling security holders (including the Participating Piggy-Back Holders), in an amount
that together with the securities the initiating security holder proposes to register, shall not
exceed the Maximum Offering Size, such amount to be allocated among all such selling security
holders on a pro rata basis (based on the number of Common Stock held by each such selling
security holder) and third, any securities the Company proposes to register, in an amount that
together with the securities the initiating security holder and the other selling security
holders propose to register, shall not exceed the Maximum Offering Size.



           (d)  The Company shall not hereafter enter into any agreement that is inconsistent
with the rights of priority provided in Section 2.2(c) without Shareholder’s prior written consent.



     2.3 Blackout Periods. The Company shall have the right to delay the filing or
effectiveness of a Registration Statement required pursuant to Section 2.1 or 2.2 hereof during no
more than two (2) periods aggregating to not more than one hundred and twenty (120) days in any
twelve-month period (each, a “Blackout Period”), in the event that (i) the Company would,
in the good faith judgment of the Company’s board of directors, be required to disclose in the
prospectus information not otherwise then required by law to be publicly disclosed and (ii) in the
good faith judgment of the Company’s board of directors, there is a reasonable likelihood that such
disclosure, or any other action to be taken in connection with the prospectus, would materially and
adversely affect or interfere with any significant financing, acquisition, merger, disposition of
assets, corporate reorganization or other material transaction or negotiations involving the
Company; provided, however, that (A) a Holder shall be entitled, at any time after receiving notice
of such delay and before such Demand Registration Statement becomes effective, to withdraw such
request and, if such request is withdrawn, such Demand Registration shall not count as one of the
permitted Demand Registrations and (B) the Company shall delay during such Blackout Period the
filing or effectiveness of any Registration Statement required pursuant to the registration rights
of other holders of any securities of the Company. The Company shall promptly give the Holders
written notice of such determination containing, to the extent permitted by law, a general
statement of the reasons for such postponement and an approximation of the anticipated delay. After
the expiration of any Blackout Period (including upon public disclosure of the information that was
the reason for such Blackout Period) and without any further request from any Holder, the Company
shall (subject to there being no other Blackout period) promptly notify the Holders and shall use
reasonable efforts to prepare and file with the SEC the requisite Registration Statement or such
amendments or supplements to such Registration Statement or prospectus used in connection therewith
as may be necessary to cause such Registration Statement to become effective as promptly as
practicable thereafter.



     2.4 Registration Procedures. If the Company is required by the provisions of
Section 2.1 or 2.2 to use reasonable efforts to effect the registration of any of its securities
under the Securities Act, the Company shall, as soon as reasonably practicable, after receipt of a
written request for a Demand Registration:



           (a)  prepare and file, no later than 45 days after request, with the SEC a
Registration Statement with respect to such securities and use reasonable efforts to cause such
Registration Statement to become effective as promptly as practicable and to remain effective for a
period of time required for the disposition of such Registrable Securities by the Holders thereof
but at least three hundred sixty (360) days excluding any days that fall during a permitted
Blackout Period under Section 2.3; provided, however, that before filing such Registration
Statement or any amendments or supplements thereto, the Company shall, if requested, furnish to
counsel selected by the Holders copies of all documents proposed to be filed, which documents shall
be subject to the review of such counsel, and shall in good faith consider incorporating in each
such document such changes as such counsel to the Holders reasonably and in a timely manner may
suggest;



           (b)  prepare and file with the SEC such amendments and supplements to such
Registration Statement and the prospectus used in connection therewith as may be necessary to keep
such Registration Statement effective and to comply with the provisions of the Securities Act with
respect to the sale or other disposition of all securities covered by such Registration Statement
until the earlier of such time as all of such securities have been disposed of in a public offering
or the expiration of three hundred sixty (360) days (excluding any days that fall during a
permitted Blackout Period under Section 2.3);



           (c)  furnish to such selling security holders such number of conformed copies of
the applicable Registration Statement and each such amendment and supplement thereto (including in
each case all exhibits), such number of copies of the prospectus contained in such Registration
Statement (including each preliminary prospectus and any summary prospectus) and any other
prospectus, in conformity with the requirements of the Securities Act, and such other documents, as
such selling security holders may reasonably request;



           (d)  use reasonable efforts to register or qualify the Registrable Securities or
other securities covered by such Registration Statement under such other securities or blue sky
laws of such jurisdictions within the United States and its territories and possessions as each
Holder of such Registrable Securities shall reasonably request, to keep such registration or
qualification in effect for so long as such Registration Statement remains in effect or until all
of the Registrable Securities are sold, whichever is shorter, and to take any other action which
may be reasonably necessary or advisable to enable the Holder to consummate the disposition in such
jurisdictions of the securities owned by such Holder (provided, however, that the Company shall not
be required in connection therewith or as a condition thereto to qualify to do business as a
foreign corporation, subject itself to taxation in or to file a general consent to service of
process in any jurisdiction where it would not, but for the requirements of this paragraph (d), be
obligated to do so) and do such other reasonable acts and things as may be required of it to enable
such Holder to consummate the disposition in such jurisdiction of the securities covered by such
Registration Statement;



           (e)  use reasonable efforts to furnish, at the request of any Holder requesting
registration of Registrable Securities pursuant to Section 2.1 or 2.2, if the method of
distribution is by means of an underwriting, on the date that the shares of Registrable Securities
are delivered to the underwriters for sale pursuant to such registration, or if such Registrable
Securities are not being sold through underwriters, on the date that the registration statement
with respect to such shares of Registrable Securities becomes effective, (1) a signed opinion
(including disclosure statement), dated such date, of the independent legal counsel representing
the Company for the purpose of such registration, addressed to the underwriters, if any and
(2) letters dated such date and the date the offering is priced from the independent certified
public accountants of the Company, addressed to the underwriters, if any in each case, in customary
form and covering such matters of the kind customarily covered by opinions or comfort letters, as
the case may be, in such a transaction;



           (f)  enter into customary agreements (including if the method of distribution is by
means of an underwriting, an underwriting agreement containing representations, warranties and
indemnities in customary form) and take such other actions as are reasonably required in order to
expedite or facilitate the disposition of such Registrable Securities;



           (g)  otherwise use reasonable efforts to comply with all applicable rules and
regulations promulgated by the SEC;



           (h)  use reasonable efforts to cause all such Registrable Securities to be listed
on each securities exchange or quotation system on which the Common Stock are listed or traded;



           (i)  give written notice to the Holders:




                (i)  when such Registration Statement, the prospectus or any amendment or
supplement thereto has been filed with the SEC and when such Registration Statement or any
post-effective amendment thereto has become effective;




               (ii)  of any request by the SEC for amendments or supplements to such
Registration Statement or the prospectus included therein or for additional information;




               (iii)  of the issuance by the SEC of any stop order suspending the
effectiveness of such Registration Statement or the initiation of any proceedings for that
purpose;




                (iv) of the receipt by the Company or its legal counsel of any notification
with respect to the suspension of the qualification of the Common Stock for sale in any
jurisdiction or the initiation or threatening of any proceeding for such purpose; and




                (v)  of the happening of any event that requires the Company to make
changes in such Registration Statement or such prospectus in order to make the statements
therein, in light of the circumstances in which they were made, not misleading (which notice
shall be accompanied by an instruction to suspend the use of such prospectus until the requisite
changes have been made);



           (j)  use reasonable efforts to obtain the withdrawal of any order suspending the
effectiveness of such Registration Statement at the earliest possible time;



           (k)  furnish to each Holder, without charge, at least one copy of such Registration
Statement and any post-effective amendment thereto, including financial statements and schedules,
and, if the Holder so requests in writing, all exhibits (including those, if any, incorporated by
reference);



           (l)  upon the occurrence of any event contemplated by Section 2.4(i)(v) above,
promptly prepare a post-effective amendment to such Registration Statement or a supplement to the
related prospectus or file any other required document so that, as thereafter delivered to the
Holders, the prospectus shall not contain an untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. If the Company notifies the Holders in accordance with
Section 2.4(i)(v) above to suspend the use of the prospectus until the requisite changes to the
prospectus have been made, then the Holders shall suspend use of such prospectus and use reasonable
efforts to return to the Company all copies of such prospectus other than permanent file copies
then in such Holder’s possession, and the period of effectiveness of such Registration Statement
provided for above shall be extended by the number of days from and including the date of the
giving of such notice to the date the Holders shall have received such amended or supplemented
prospectus pursuant to this Section 2.4(l);



           (m)  subject to the execution of confidentiality agreements satisfactory in form
and substance to the Company, pursuant to the reasonable request of the Holder or underwriters,
make reasonably available for inspection by representatives of the Holders, any underwriter
participating in any disposition pursuant to such Registration Statement, and any attorney,
accountant or other agent retained by such representative or any such underwriter all relevant
financial and other records, pertinent corporate documents and properties of the Company and its
subsidiaries and cause the officers, directors and employees of the Company and its subsidiaries to
supply all relevant information reasonably requested by such representative or any such
underwriter, attorney, accountant or agent in connection with the registration provided that any
such information inspected or discussions conducted shall be done in a manner so as not to
unreasonably disrupt the operation of the Company’s business;



           (n)  in connection with any underwritten offering to the extent the underwriters
determine that the failure to do so would have a material adverse effect on such offering, make
appropriate officers and senior executives of the Company reasonably available to the selling
security holders for meetings with prospective purchasers of Registrable Securities and prepare and
present to potential investors customary “road show” material in each case in accordance with the
recommendations of the underwriters and in all respects in a manner reasonably requested and
consistent with other new issuances of securities in an offering of a similar size to such offering
of the Registrable Securities; and



           (o)  use reasonable efforts to procure the cooperation of the Company’s transfer
agent in settling any offering or sale of Registrable Securities, including with respect to the
transfer of physical stock certificates into book-entry form in accordance with any procedures
reasonably requested by the Holders or the underwriters, if any.



           It shall be a condition precedent to the obligation of the Company to take any
action pursuant to this Agreement in respect of the Registrable Securities which are to be
registered at the request of any Holder that such Holder shall furnish to the Company such
information regarding the Registrable Securities held by such Holder and the intended method of
distribution thereof as the Company shall reasonably request and as shall be required in connection
with the action taken by the Company.



     2.5 Expenses. Except as otherwise agreed or set forth herein, the Company shall
bear and pay all Registration Expenses, and Holders shall bear and pay all (x) fees and expenses of
any legal counsel or other advisors to such Holder and any other out-of-pocket expenses of such
Holder, (y) brokerage commissions attributable to the sale of any of the Registrable Securities,
and (z) commissions, fees, discounts, transfer taxes or stamp duties and expenses of any
underwriter or placement agent applicable to Registrable Securities offered for a Holder’s account
in accordance with this Agreement.



     2.6 Holdback Agreement. 



           (a)  In the case of an underwritten offering of securities by the Company with
respect to which the Company has complied with its obligations hereunder, each Holder agrees, if
and to the extent (i) requested by the managing underwriter of such underwritten offering and
(ii) all of the Company’s named executive officers and directors execute agreements identical to
those referred to in this Section 2.6, that it shall not during the period beginning on, and ending
ninety (90) days (subject to one extension of no more than 17 days if required by the underwriters
in connection with FINRA Rule 2711(f)(4) or any similar or successor provision) (or such shorter
period as may be permitted by such managing underwriter) after, the effective date of the
registration statement filed in connection with such Registration (the “Holdback Period”),
except for Registrable Securities included in such registration or as otherwise agreed between such
Holder and such managing underwriter, (i) lend, offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant any option, right,
or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of
Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock
held immediately prior to the effectiveness of the Registration Statement for such offering, or
(ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any
of the economic consequences of ownership of the Common Stock, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Common Stock or other
securities, in cash or otherwise; provided, however, that such restrictions shall not apply to any
such sales, purchases, grants, transfers, dispositions, or arrangements to settle or otherwise
close any hedging instruments that were outstanding prior to the beginning of the Holdback Period
unless the Holder of such Registrable Securities had proposed to sell Registrable Securities in the
offering. No Holder subject to this Section 2.6 or any of the Company’s executive officers and
directors that execute agreements identical to those referred to in this Section 2.6 shall be
released from any obligation under any agreement, arrangement or understanding entered into
pursuant to or contemplated by this Section 2.6 unless all Holders are also released from their
obligations under Section 2.6. In the event of any such release the Company shall notify the
Holders of any such release within three (3) business days after such release. If requested by the
managing underwriter, each Holder shall enter into a lock-up agreement with the applicable
underwriters that is consistent with the agreement in this Section 2.6.



           (b)  In order to enforce the foregoing covenant, the Company may impose stop
transfer instructions with respect to the Registrable Securities of each Holder (and the shares or
securities of every other Person subject to the foregoing restriction) to the extent transfers are
so restricted, until the end of such period.



ARTICLE III

INDEMNIFICATION




     3.1 Indemnification by the Company. The Company will, and it hereby does,
indemnify and hold harmless, to the extent permitted by law, the seller of any Registrable
Securities covered by each registration statement filed by the Company to which Article II applies,
each affiliate of such seller and their respective trustees, directors, and officers or general and
limited partners (including any director, officer, affiliate, employee, representative, agent, and
controlling Person of any of the foregoing, within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), each other Person who participates as an underwriter in the
offering or sale of such securities and each other Person, if any, who controls such seller or any
such underwriter within the meaning of the Securities Act (each, a “Seller Indemnified
Party”, and collectively, the “Seller Indemnified Parties”), against any and all
Actions (whether or not a Seller Indemnified Party is a party thereto), losses, claims, damages, or
liabilities, joint or several, and expenses (including, without limitation, reasonable attorney’s
fees and reasonable expenses of investigation) to which such Seller Indemnified Party becomes
subject under the Securities Act, common law, or otherwise, insofar as such losses, claims,
damages, liabilities, or expenses (or actions or proceedings in respect thereof, whether or not
such Seller Indemnified Party is a party thereto) arise out of, relate to, or are based upon
(a) any untrue statement or alleged untrue statement of any material fact contained in any such
registration statement, any preliminary, final, or supplemental prospectus contained therein, or
any amendment or supplement thereto or any issuer free-writing prospectus relating to any sale or
distribution pursuant thereto, or (b) any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein (in the case of a
prospectus, in light of the circumstances under which they were made) not misleading, and the
Company will reimburse such Seller Indemnified Party for any legal or any other expenses reasonably
incurred by such Seller Indemnified Party in connection with investigating or defending against any
such loss, claim, liability, action, or proceeding; provided, that the Company shall not be
liable to any Seller Indemnified Party in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof), or expense arises out of or is
based upon any untrue statement or alleged untrue statement or omission or alleged omission made in
such registration statement or amendment or supplement thereto or in any such preliminary, final,
or supplemental prospectus or issuer free-writing prospectus in reliance upon and in conformity
with written information furnished to the Company through an instrument duly executed by such
seller specifically stating that it is for use in the preparation thereof. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on behalf of the Company
or any of the prospective sellers, or any of their respective affiliates, directors, officers, or
controlling Persons and shall survive the transfer of such securities by such seller.



     3.2 Indemnification by the Holders. The Company may require, as a condition to
including any Registrable Securities in any registration statement to which Article II applies,
that the Company shall have received an undertaking reasonably satisfactory to it from the
prospective seller of such Registrable Securities or any underwriter to indemnify and hold harmless
(in the same manner and to the same extent as set forth in Section 3.1) the Company, its directors,
officers, affiliates, employees, representatives, agents, and controlling Persons (each, a
“Company Indemnified Party,” and collectively, the “Company Indemnified Parties,”
and together with the Seller Indemnified Parties, the “Indemnified Parties” and each
individually an “Indemnified Party”) with respect to any untrue statement or alleged untrue
statement in or omission or alleged omission from such registration statement, any preliminary,
final or supplemental prospectus contained therein, or any amendment or supplement, if such untrue
statement or alleged untrue statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company through an instrument duly executed
by such seller or underwriter respectively, specifically stating that it is for use in the
preparation of such registration statement, preliminary, final, or supplemental prospectus or
amendment or supplement, or a document incorporated by reference into any of the foregoing;
provided, however, that the indemnity agreement contained in this Section 3.2 shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement
is effected without the consent of such seller (which consent shall not be unreasonably withheld or
delayed). Such indemnity shall remain in full force and effect regardless of any investigation made
by or on behalf of the Company or any of the prospective sellers, or any of their respective
affiliates, directors, officers, or controlling Persons and shall survive the transfer of such
securities by such Holder.



     3.3 Notices of Claims. Promptly after receipt by an Indemnified Party hereunder
of written notice of the commencement of any Action with respect to which a claim for
indemnification may be sought pursuant to this Article III, such Indemnified Party will, if a claim
in respect thereof is to be made against an indemnifying party, give prompt written notice to the
latter of the commencement of such Action; provided that the failure of the Indemnified
Party to give prompt notice as provided herein (i) shall not relieve the indemnifying party of its
obligations under this Article III, except to the extent that the indemnifying party is materially
prejudiced by such failure to give prompt notice, and (ii) shall not, in any event, relieve the
indemnifying party from any obligations which it may otherwise have to any Indemnified Party in
addition to any indemnification obligation provided in Sections 3.1 and 3.2. In case any such
Action is brought against an Indemnified Party, unless in such Indemnified Party’s reasonable
judgment a conflict of interest between such Indemnified Party and indemnifying parties may exist
in respect of such Action, the indemnifying party will be entitled to participate in and to assume
the defense thereof (at its expense), jointly with any other indemnifying party similarly notified
to the extent that it may wish, with counsel reasonably satisfactory to such Indemnified Party, and
after notice from the indemnifying party to such Indemnified Party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such Indemnified Party for any legal
or other expenses subsequently incurred by the latter in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party will consent to entry of any judgment
or settle any Action which (i) does not include, as an unconditional term thereof, the giving by
the claimant or plaintiff to such Indemnified Party of a release from all liability in respect of
such Action, and (ii) does not involve the imposition of equitable remedies or of any obligations
on such Indemnified Party and does not otherwise adversely affect such Indemnified Party, other
than as a result of the imposition of financial obligations for such Indemnified Party will be
indemnified hereunder.



     3.4 Contribution.



           (a)  If the indemnification provided for in this Article III from the indemnifying
party is unavailable to or insufficient to fully hold harmless an Indemnified Party hereunder in
respect of any Action, losses, damages, liabilities, or expenses referred to herein, then the
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such Action, losses, damages, liabilities,
or expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying
party and such Indemnified Party in connection with the actions which resulted in such Action
losses, damages, liabilities, or expenses, as well as any other relevant equitable considerations.
The relative fault of such indemnifying party and such Indemnified Party shall be determined by
reference to, among other things, whether any action in question, including any untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party or Indemnified
Parties, and the parties’ relative intent, knowledge, access to information, and opportunity to
correct or prevent such action. The amount paid or payable by a party under this Section 3.4 as a
result of the Action, losses, damages, liabilities, and expenses referred to above shall be deemed
to include any legal or other fees or expenses reasonably incurred by such party in connection with
any investigation or proceeding.



           (b)  The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 3.4 were determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable considerations referred to in
Section 3.4(a) hereof. No Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.



     3.5 Limitation of Holder Liability. Notwithstanding any other provisions of this
Agreement, the aggregate liability of a Holder under this Article III shall be limited to the
aggregate net proceeds received by such seller in connection with any offering to which such
registration under the Securities Act relates.



ARTICLE IV

RULE 144




     4.1 Rule 144. The Company covenants that it will use reasonable efforts to
(a) file the reports required to be filed by it under the Securities Act and the Exchange Act (or,
if the Company is not required to file such reports, it will, upon the request of any Holder, make
publicly available such information), and it will take such further action as any Holder may
reasonably request, all to the extent required from time to time to enable such Holder to sell
Registrable Securities without registration under the Securities Act within the limitation of the
exemptions provided by (i) Rule 144 under the Securities Act, as such Rule may be amended from time
to time, or (ii) any similar rule or regulation hereafter adopted by the SEC; and (b) file with or
furnish to the SEC in a timely manner all reports and other documents required of the Company under
the Securities Act and the Exchange Act. Upon the request of any Holder of Registrable Securities,
the Company will deliver to such Holder a written statement as to whether it has complied with such
requirements.



ARTICLE V

SELECTION OF UNDERWRITERS AND COUNSEL




     5.1 Selection of Managing Underwriters. In the event the Participating Demand
Holders have requested an underwritten offering, the underwriter or underwriters shall be selected
by the Company, subject to consultation with and the approval of the Holders of a majority of the
shares being so registered, which approval shall not be unreasonably withheld or delayed. In that
event, (i) all of the representations and warranties by, and the other agreements on the part of,
the Company to and for the benefit of such underwriters shall also be made to and for the benefit
of such Holders of Registrable Securities, (ii) that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement shall be conditions precedent to
the obligations of such Holders of Registrable Securities, and (iii) that no Holder shall be
required to make any representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding such Holder, the
Registrable Securities of such Holder and such Holder’s intended method of distribution and any
other representations customarily required or required by law. Subject to the foregoing, all
Holders proposing to distribute Registrable Securities through such underwritten offering shall
enter into an underwriting agreement in customary form with the underwriter or underwriters.



     5.2 Selection of Counsel. In connection with any registration of Registrable
Securities pursuant to Article II hereof, the Holders of a majority of the Registrable Securities
covered by any such registration may select one firm (at the Holders’ expense) as counsel to
represent all Holders of Registrable Securities covered by such registration; provided, however,
that in the event that the counsel selected as provided above is also acting as counsel to the
Company in connection with such registration, the remaining Holders shall be entitled to select one
additional firm as counsel to represent all such remaining Holders at such remaining Holders’
expense.



ARTICLE VI

MISCELLANEOUS




     6.1 Additional Registration Rights. From and after the date of this Agreement,
the Company grants to any Person with respect to any security issued by the Company or any of its
subsidiaries registration rights that provide for terms that are in any manner more favorable to
the holder of such registration rights than the terms granted to the holders of Registrable
Securities (or if the Company amends or waives any provision of any Agreement providing
registration rights of others or takes any other action whatsoever to provide for terms that are
more favorable to other holders than the terms provided to the holders of Registrable Securities)
then this Agreement shall immediately be deemed amended to provide the holders of Registrable
Securities with any (or all) of such more favorable terms as such holders shall elect to include
herein.



     6.2 Termination. This Agreement will terminate upon the earliest to occur of the
date upon which there shall be no Registrable Securities as a result of the events set forth in
subsections (i) through (v) of the definition of Registrable Securities set forth herein. Upon
termination pursuant to this Section 6.2, the Company will no longer be obligated to provide notice
of a proposed registration.



     6.3 Amendments; Waivers.



           (a)  No failure or delay on the part of any Party in exercising any right, power,
or privilege hereunder will operate as a waiver thereof, nor will any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any other right, power,
or privilege.



           (b)  Any provision of this Agreement may be amended or waived if, but only if, such
amendment or waiver is in writing and signed by all Parties.



     6.4 Successors and Assigns. All the terms and provisions of this Agreement shall
be binding upon and inure to the benefit of and be enforceable by the Parties and the successors
and assigns of each Party, whether so expressed or not. None of the Parties may assign any of its
rights or obligations hereunder, in whole or in part, by operation of law or otherwise, without the
prior written consent of the other Parties, and any such assignment without such prior written
consent shall be null and void; provided, however, that all or any portion of the rights of each
Holder under this Agreement are transferable to each transferee of such Holder to whom the
transferor transfers Registrable Securities and each transferee of such Holder agrees to be bound
by and to perform all of the terms and provisions required by this Agreement.



     6.5 Notices. All notices and communications hereunder shall be deemed to have
been duly given and made if in writing and if served by personal delivery upon the party for whom
it is intended, or if delivered by registered or certified mail, return receipt requested, or if
sent by telecopier in each case, to the Person at the address set forth below, or such other
address as may be designated in writing hereafter, in the same manner, by such Person:




	 	(a)	 	if to the Company, to:






VIASPACE Inc.




2102 Business Center Drive




Irvine, CA 92612




Telephone: 626-768-3360




Facsimile: 626-578-9063



with a copy (which shall not constitute notice) to:




Richardson & Patel LLP




10900 Wilshire Boulevard, Suite 500




Los Angeles, California 90063




Attention: Ryan Hong




Telephone: 310-208-1182




Facsimile: 310-208-1154




(b) if to Shareholder, to:




Mr. Sung Chang




121 Bells Ferry Lane




Marietta, Georgia 30066



with a copy (which shall not constitute notice) to:




McDaniel Law Group, PC




PO Box 681235




Marietta, Georgia 30068-0021




Attn: Frank McDaniel




Facsimile: (404) 393-5916



The failure to provide notice in accordance with the required timing, if any, set forth herein
shall affect the rights of the party providing such notice only to the extent that such delay
actually prejudices the rights of the party receiving such notice.



     6.6 Headings. The headings in this Agreement are for convenience of reference
only and will not control or affect the meaning or construction of any provisions hereof.



     6.7 Severability. The provisions of this Agreement shall be deemed severable and
the invalidity or unenforceability of any provision shall not affect the validity or enforceability
of the other provisions hereof. If any provision of this Agreement, or the application thereof to
any Person or any circumstance, is invalid or unenforceable, the remainder of this Agreement and
the application of such provision to other Persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity
or enforceability of such provision, or the application thereof, in any other jurisdiction.



     6.8 Counterparts. This Agreement may be executed in any number of counterparts
(including by facsimile), each of which will be an original with the same effect as if the
signatures thereto and hereto were upon the same instrument.



     6.9 Entire Agreement. This Agreement, together with the agreements referred to
herein, is intended by the parties to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained herein and the
registration rights granted by the Company with respect to the Registrable Securities. This
Agreement supersedes all prior agreements and undertakings among the parties with respect to such
registration rights.



     6.10 Governing Law; Consent to Jurisdiction. As between the Parties, the
transactions contemplated in the Transaction Documents shall be governed as to validity,
interpretation, construction, effect, and in all other respects by the laws of the State of
Georgia, without regard to the conflicts of laws principals thereof. Each of Shareholder and
Company irrevocably submits to the exclusive jurisdiction of the courts of the State of Georgia
located in the County of Cobb and the United States District Court in and for the Northern District
of Georgia for the purpose of any suit, action, proceeding or judgment relating to or arising out
of the Transaction Documents and the transactions contemplated hereby and thereby. Each of the
parties hereto irrevocably consents to the jurisdiction of any such court in any such suit, action
or proceeding and to the laying of venue in such court. Each party hereto irrevocably waives any
objection to the laying of venue of any such suit, action or proceeding brought in such courts and
irrevocably waives any claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A
TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN
CONSULTED SPECIFICALLY AS TO THIS WAIVER.



     6.11 Specific Performance; Injunctive Relief. The parties hereby acknowledge and
agree that the failure of any Party to perform its agreements and covenants hereunder, including
its failure to take all actions as are necessary on its part to the consummation of the
transactions contemplated hereby, will cause irreparable injury to the other Parties, for which
damages, even if available, will not be an adequate remedy. Accordingly, each Party hereby consents
to the issuance of injunctive relief by any court of competent jurisdiction to compel performance
of such Party’s obligations, to prevent breaches of this Agreement by such Party and to the
granting by any court of the remedy of specific performance of such Party’s obligations hereunder,
without bond or other security being required, in addition to any other remedy to which any Party
is entitled at law or in equity. Each Party irrevocably waives any defenses based on adequacy of
any other remedy, whether at law or in equity, that might be asserted as a bar to the remedy of
specific performance of any of the terms or provisions hereof or injunctive relief in any action
brought therefor by any Party.



6.12 Compliance; Questionnaire. Each Holder covenants and agrees that it will
comply with the prospectus delivery requirements of the Securities Act as applicable to it in
connection with sales of Registrable Securities pursuant to a Registration Statement. Each Holder
agrees to furnish to the Company a completed and updated questionnaire in the form attached to this
Agreement as Annex A (a “Selling Shareholder Questionnaire”) on a date that is not less than five
(5) Business Days prior to the date that the applicable Registration Statement is filed.



IN WITNESS WHEREOF, each of the undersigned has executed this Registration Rights Agreement or
caused this Agreement to be duly executed on its behalf as of the date first written above.




COMPANY:




VIASPACE INC.



By:      

Name:

Title:





SHAREHOLDER:



      



SUNG HSIEN CHANG



 





25






ANNEX A




VIASPACE INC.

Selling Shareholder Notice and Questionnaire




The undersigned beneficial owner of common stock (the “Registrable Securities”) of
VIASPACE Inc., a Nevada corporation (the “Company”), understands that the Company has filed
or intends to file with the Securities and Exchange Commission (the “Commission”) a
registration statement (the “Registration Statement”) for the registration and resale under
the Securities Act of 1933, as amended (the “Securities Act”), of the Registrable
Securities, in accordance with the terms of the Registration Rights Agreement (the
“Registration Rights Agreement”) to which this document is annexed. A copy of the
Registration Rights Agreement is available from the Company upon request at the address set forth
below. All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto
in the Registration Rights Agreement.



Certain legal consequences arise from being named as a selling shareholder in the Registration
Statement and the related prospectus. Accordingly, holders and beneficial owners of Registrable
Securities are advised to consult their own securities law counsel regarding the consequences of
being named or not being named as a selling shareholder in the Registration Statement and the
related prospectus.



NOTICE




The undersigned beneficial owner (the “Selling Shareholder”) of Registrable Securities
hereby elects to include the Registrable Securities owned by it in the Registration Statement.



The undersigned hereby provides the following information to the Company and represents and
warrants that such information is accurate:



QUESTIONNAIRE





	1.	 	Name.






	 	(a)	 	Full Legal Name of Selling Shareholder






	 	(b)	 	Full Legal Name of Registered Holder (if not the same as (a) above) through
which Registrable Securities are held:






	 	(c)	 	Full Legal Name of Natural Control Person (which means a natural person who
directly or indirectly alone or with others has power to vote or dispose of the
securities covered by this Questionnaire):






	2.	 	Address for Notices to Selling Shareholder:





	 
	Telephone:

	Fax:

	Contact Person:








	3.	 	Broker-Dealer Status:






	 	(a)	 	Are you a broker-dealer?






Yes No




	 	(b)	 	If “yes” to Section 3(a), did you receive your Registrable Securities as
compensation for investment banking services to the Company?





	 	 	 
	Note:
	 	Yes No

If “no” to Section 3(b), the Commission’s staff has indicated that you

should be identified as an underwriter in the Registration Statement.








	 	(c)	 	Are you an affiliate of a broker-dealer?






Yes No




	 	(d)	 	If you are an affiliate of a broker-dealer, do you certify that you purchased
the Registrable Securities in the ordinary course of business, and at the time of the
purchase of the Registrable Securities to be resold, you had no agreements or
understandings, directly or indirectly, with any person to distribute the Registrable
Securities?





	 	 	 
	Note:
	 	Yes No

If “no” to Section 3(d), the Commission’s staff has indicated that you

should be identified as an underwriter in the Registration Statement.








	4.	 	Beneficial Ownership of Securities of the Company Owned by the Selling Shareholder.






Except as set forth below in this Item 4, the undersigned is not the beneficial or
registered owner of any securities of the Company other than the Acquired Shares and
thePre-Closing Shares.




	 	(a)	 	Type and Amount of other securities beneficially owned by the Selling
Shareholder:






	5.	 	Relationships with the Company:






Except as set forth below, neither the undersigned nor any of its affiliates, officers,
directors or principal equity holders (owners of 5% of more of the equity securities of the
undersigned) has held any position or office or has had any other material relationship with
the Company (or its predecessors or affiliates) during the past three years.




	 	 	 	State any exceptions here: [NOTE: HOLDER MAY ADVANCE A COPY OF THE MOST RECENT D & O
QUESTIONNAIRE, IF APPLICABLE]





The undersigned agrees to promptly notify the Company of any inaccuracies or changes in the
information provided herein that may occur subsequent to the date hereof at any time while the
Registration Statement remains effective.



By signing below, the undersigned consents to the disclosure of the information contained
herein in its answers to Items 1 through 5 and the inclusion of such information in the
Registration Statement and the related prospectus and any amendments or supplements thereto. The
undersigned understands that such information will be relied upon by the Company in connection with
the preparation or amendment of the Registration Statement and the related prospectus.



IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice and
Questionnaire to be executed and delivered either in person or by its duly authorized agent.



	 	 	 	 	 
	Date:	 	Beneficial Owner:
	 	 	By:
	 	


	 	 	 	 	 

	 	 	 	 	Name:

	 	 	 	 	Title:







PLEASE FAX, E-MAIL, OR COURIER (BY OVERNIGHT COURIER SERVICE) A COPY OF THE COMPLETED AND EXECUTED
NOTICE AND QUESTIONNAIRE TO:



	 	 	 
	Richardson & Patel, LLP

	10900 Wilshire Boulevard, Suite 500

	Los Angeles, California 90024-6525

	Attention:

	 	Ryan Hong, Esq.







Tel. No.: (310) 208-1182




Fax No.: (310) 208-1154




Email: rhong@richardsonpatel.com



26



EXHIBIT H




FORM OF

SENIOR MANAGEMENT AGREEMENTS




Exhibit H-1: Form of Senior Management Employment Agreement – CEO



Exhibit H-2: Form of Senior Management Employment Agreement – President



Exhibit H-3: Form of Senior Management Employment Agreement – CFO



27



EXHIBIT H-1



VIASPACE GREEN ENERGY INC




SENIOR EXECUTIVE EMPLOYMENT AGREEMENT




THIS SENIOR EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) is entered into as of the        day of
     2010, by and between VIASPACE Green Energy, Inc., a British Virgin Islands company
(“Company”), and Carl Kukkonen , a resident of the State of California , United States of America
(“Executive”). Capitalized terms and phrases shall have the meaning ascribed thereto in this
Agreement.



RECITALS




WHEREAS, Company’s board of directors (the “Board”) has determined that it is in Company’s
best interest to enter into a written employment agreement with Executive; and



WHEREAS, Executive desires to accept the terms and conditions of this Agreement in exchange
for the benefits offered hereunder.



AGREEMENT




NOW, THEREFORE, in consideration of the premises and the mutual covenants and promises
contained herein, and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:




	 	1.	 	EMPLOYMENT TERMS AND CONDITIONS.





1.1 Employment. Upon and coincident with the Effective Date (as defined below), Company
agrees to employ, and Executive hereby accepts employment by Company, upon the terms and conditions
set forth in this Agreement.



1.2 Duties.



(a) In General. Executive shall serve as Company’s Chief Executive Officer. In his
capacity as Company’s Chief Executive Officer, Executive shall report directly to Company’s Board
of Directors (the “Board”). In such capacity, Executive shall perform the duties and
responsibilities customarily performed by an individual with such titles and as may otherwise be
reasonably assigned to him from time to time by the Board for the Employment Term (as defined
below)(the “Services”). Except as otherwise agreed upon by Company, Executive shall devote all of
Executive’s business time, energy and skill to performing the Services, shall not be otherwise
employed and shall perform the Services diligently, faithfully and to the best of Executive’s
abilities.



(b) Other Activities. Notwithstanding the above, Executive may (i) serve as a
director, advisor or trustee of other organizations, (ii) engage in charitable, civic, educational
and/or governmental activities, provided that any such services and activities do not materially
interfere with Executive’s ability to perform his duties under this Agreement and that Executive
obtains written consent for all such activities from Company, which consent will not be
unreasonably withheld. Consistent with the foregoing, Executive may engage in personal activities,
including, without limitation, personal investments, provided that such activities described under
this Section 1.2(b) do not materially interfere with Executive’s performance of the Services or any
other of Executive’s written agreements with Company, or (iii) as Chief Executive Officer and board
member of VIASPACE Inc. or any Affiliate thereof.



(c) Compliance with Policies. Subject to the terms of this Agreement, during the
Employment Term, Executive shall comply in all material respects with all Company policies and
procedures applicable to employees of Company generally and Executive specifically. In connection
with and as a condition to this Agreement, Executive and Company shall enter into as of the
Effective Date that certain “Statement of Additional Terms and Conditions Relating to Employment
Agreement,” substantially in the form attached hereto as Exhibit “A,” which is incorporated herein
and made a part hereof (the “Statement”).



1.3 Employment Term. Company agrees to employ Executive pursuant to the terms of this
Agreement, and Executive hereby accepts employment with Company, upon the terms set forth in this
Agreement, for the period commencing upon and coincident with the        day of        2010 (the “Effective
Date”) and ending upon the earlier of:




(a) Expiration Date. That date which coincides with the last day of the later
of the Initial Term (as defined below) or the Renewal Term (as defined below), as the case
may be (such date shall be referred to as the “Expiration Date”) (For purposes of this
Agreement, the phrase “Initial Term” shall mean that period from the Effective Date through
and including the second (2nd) anniversary of the Effective Date; and the phrase “Renewal
Term” shall mean each consecutive twelve month period immediately following the Initial
Term, during which period this Agreement shall automatically renew on the same terms and
conditions hereof and without any further act on the part of either party; provided,
however, that in no event shall the term of this Agreement be renewed unless agreed
to by both Parties in writing prior to the thirtieth (30th) day immediately
preceding the last day of the Initial Term; or




(b) Termination Date. The Termination Date (as such phrase is defined in
Section 1.5 of this Agreement).



The period from the Effective Date to the earlier to occur of either the Expiration Date or
Termination Date shall be hereinafter referred to as the “Employment Term.”



1.4 Compensation and Benefits.



(a) Base Compensation. In consideration of the Services to be rendered to Company by
Executive and Executive’s covenants under this Agreement, Company agrees to pay Executive during
the Employment Term a salary at the annual rate of no less than Two Hundred Forty Thousand Dollars
($240,000)(the “Base Compensation”), less statutory deductions and withholdings, payable in
accordance with Company’s regular payroll practices. Notwithstanding the foregoing, for the first
the first consecutive twelve (12) calendar month period from the Effective Date, Executive’s Base
Compensation shall be paid by VIASPACE Inc., in the form of VIASPACE common stock at the [rate in
place for the previous six months]. For the remainder of the Employment Term, Executive’s Base
Compensation will be paid in cash.



(b) Bonus. In addition to the Base Compensation, during the Employment Term,
Executive shall be entitled to such bonuses as may from time to time be determined by the Board
(the “Bonus Payments”).



(c) Benefits. Company intends to provide for its employees generally an employee
health and welfare benefit plan in which Executive will participate, provided that such plan may be
obtained at a reasonable cost as determined by Company’s Board.



(d) Vacation and Personal Leave. Executive shall be entitled to twenty (20) business
days paid time off for each twelve (12) consecutive calendar monthly period during the Employment
Term, to be taken in accordance with the vacation accrual schedule, if any, and carried over only
to the extent set forth or otherwise permitted in Company’s personnel policies or, if any, employee
handbook.



(e) Reimbursement of Company Business Expenses. Company shall within ninety (90) days
of its receipt from Executive of supporting receipts, to the extent required by applicable income
tax regulations and Company’s reimbursement policies, reimburse Executive for all out-of-pocket
business expenses reasonably and actually incurred by Executive in connection with his employment
hereunder and consistent with Company policies (the “Business Expenses”). Board approval shall be
required for any single expense exceeding $10,000 or for expenses exceeding in the aggregate
annually $[      ]. Reimbursement of any and all Business Expenses is conditioned on Executive
submitting his request to Company for reimbursement and supporting substantiation within [thirty
(30)] days of the date on which any such expenses shall have been incurred.



1.5 Termination of Agreement.



(a) Termination Date. Executive’s employment and this Agreement (except as otherwise
provided hereunder) shall terminate upon the first to occur of any of the following, at the time
set forth therefore (the “Termination Date”):




(i) Mutual Termination. At any time by the mutual written agreement of Company
and Executive;




(ii) Death or Disability. Immediately upon the death of Executive or a
determination by Company that Executive has ceased to be able to perform the essential
functions of his duties, with or without reasonable accommodation, for a period of not less
than ninety (90) consecutive days, due to a mental or physical illness or incapacity
(“Disability”) (termination pursuant to this Section being referred to herein as termination
for “Death or Disability”);




(iii) Voluntary Termination By Executive. Thirty (30) days following
Executive’s written notice to Company of his termination of employment; provided,
however, that Company may waive all or a portion of such notice period and
accelerate the effective date of such termination (termination pursuant to this Subsection
being referred to herein as “Voluntary” termination);




(iv) Termination For Cause By Company. Immediately following notice of
termination for “Cause” (as defined below)(with such notice describing the Cause with
reasonable specificity) given by Company and failure by Executive to Cure (as defined below)
if and to the extent Cure is otherwise expressly permitted under this subsection
(termination pursuant to this Subsection being referred to herein as termination for
“Cause”)(As used herein, “Cause” means (A) termination, at Company’s sole option,
immediately and without the right to Cure, based on Executive being named as a target or
subject of any grand jury investigation impaneled for, being convicted of or entering a plea
of guilty or nolo contendere for any crime constituting a felony in the jurisdiction in
which committed, any crime involving moral turpitude (whether or not a felony), (B) any act
or omission involving dishonesty or willful misconduct in the discharge of his duties under
this Agreement or that otherwise materially injures Company; (C) subject to applicable law,
if any, Executive’s substance abuse that in any manner materially interferes with the
performance of his duties and Executive’s failure to Cure; (D) Executive’s material breach
of this Agreement or any other agreement entered into with Company in connection with
Company’s confidential information, trade secrets or other property and Executive’s failure
to Cure the same or any other act or omission that constitutes a breach under any agreement
entered into by and between Company or any affiliate thereof and a third party;
(E) misconduct by Executive that has or could result in Company’s material discredit or
diminution in value and Executive’s failure to Cure the same; or (F) chronic absence from
work for reasons other than illness or Disability and Executive’s failure to Cure the
same.)(For purposes hereof the term “Cure” shall mean that conduct or refrain from conduct
that shall be required to remedy within thirty (30) days of any such notice thereof any act
or omission on the part of Executive that is the subject of the claim hereunder by Company
to terminate Executive for Cause; provided, however, that (I) Executive
shall have only one opportunity during the Employment Term to exercise such right to Cure,
(II) any such remedial conduct or refrain thereof shall be to Company’s reasonable
satisfaction, and (III) Company shall have the right to suspend Executive’s duties under
this Agreement during any such period.);




(v) Termination Without Cause By Company. Notwithstanding any other provision
in this Agreement to the contrary, including, but not limited to Section 1.3 above, upon and
coincident with any delivery by Company of its written notice of Executive’s termination of
employment under this Agreement for reasons other than Cause or for no reason;
provided, however, that if and to the extent Company determines to provide
less than thirty calendar days notice of its intent to terminate Executive (the “Optional
Notice Period”), then in such event the Severance Payments (as such phrase is defined below)
shall be extended by that number of days that the period between the delivery date of any
such notice and the Termination Date is less than such Optional Notice Period.
Notwithstanding the foregoing, if Company elects to provide an Optional Notice Period, then
at any time during such period, Company may elect to immediately either suspend, with no
reduction in pay or benefits, Executive from all or any part of his duties as set forth in
this Agreement (including, without limitation, Executive’s position as [CEO][President][CFO]
and his Services relating thereto) or terminate this Agreement in accordance with this
subsection (termination pursuant to this Subsection being referred to herein as termination
“Without Cause”) or in accordance with any other applicable subsection under this Section
1.5(a) if and to the extent grounds for any such determination should exist; or




(vi) Termination For Good Reason by Executive. Subject to the notice and cure
provisions described below, at the election of Executive for Good Reason; provided,
however, that any such termination on account of Good Reason shall occur in any
event not later than sixty (60) days following the date on which such event is claimed to
have occurred by Executive. “Good Reason” shall occur only upon (A) a material diminution
in Executive’s authority, duties or responsibility; (B) any other action or inaction that
constitutes a material breach by Company of this Agreement; or (C) a material change in
Executive’s Employment Base out of which or from which he is required to perform his
services under this Agreement (for purposes of this subsection, a material change shall mean
Executive’s Employment Base is relocated more than fifty (50) miles outside of the
Employment Base without Executive’s prior written consent; “Employment Base” shall mean
Orange County, California). Notwithstanding the foregoing, Executive’s right to terminate
this Agreement for Good Reason shall be conditioned upon and may in no event be exercised
until and unless Executive shall have provided Company written notice within thirty (30)
days of the initial existence of any such condition, upon notice of which Company shall
thereafter have thirty (30) days within which it may remedy the condition; provided,
further, that in no event shall travel (whether same-day, overnight, extended stay or
otherwise) for or on behalf of Company or any Affiliate thereof cause or otherwise
constitute a material change in Executive’s Employment Base and Executive shall have no
right to terminate this Agreement for Good Reason on account of such travel requirements.



(b) Other Remedies. Termination pursuant to Section 1.5(a)(iv) or 1.5(a)(vi) above
shall be in addition to and without prejudice to any other right or remedy to which Company or
Executive, respectively, may be entitled at law, in equity or otherwise under this Agreement.



1.6 Payment Upon Separation From Service.



(a) Voluntary Termination, Termination for Cause, or Termination for Death or
Disability. In the case of a termination of Executive’s employment by mutual agreement under
Section 1.5(a)(i) above, on account of Executive’s Death or Disability under Section 1.5(a)(ii)
above, or by Executive’s Voluntary termination under Section 1.5(a)(iii) above, or by Company for
Cause in accordance with Section 1.5(a)(iv) above, (i) Company shall pay to Executive (or his
estate or guardian, as the case may be) and Executive (or his estate or guardian, as the case may
be) shall be entitled to be paid the following as and to the extent the same shall have been earned
through the Termination Date: (A) in all such events, Base Compensation earned, but unpaid and any
Business Expenses so long as any such reimbursement request shall be submitted not later than
ninety (90) days following Executive’s Separation From Service; and (B) in the case of Death or
Disability, accrued, but unpaid Bonus Payments; accrued but unused vacation or personal leave days
to the extent convertible into cash under Company’s policies; and vested benefits under any
employee benefit or stock option plan or agreement; provided, however, that in no
event shall Executive be entitled to receive payment of, and Company shall have no obligation to
pay, any severance or similar compensation attributable to such termination. Company shall pay all
such amounts that are due and payable in cash within thirty (30) days of the Termination Date,
subsequent to any such payment, Company’s obligations under this Agreement shall immediately cease.



(b) Termination Without Cause by Company or For Good Reason by Executive.




(i) In General. Except as otherwise provided in Section 1.6, including, without
limitation, Section 1.6 (c) and (d) below, in the case of a termination of Executive’s
employment that constitutes a Separation from Service (as defined below) during the Initial
Term or any Renewal Term hereunder Without Cause in accordance with Section 1.5(a)(v) or for
Good Reason by Executive in accordance with Section 1.5(a)(vi) above,




(A) Base Compensation. Company shall pay, and Company shall continue to pay to
Executive (or, in the case of Death or Disability following the Termination Date,
his estate or guardian, as the case may be) his Base Compensation through the
Termination Date and thereafter for the Severance Period (as defined below);




(B) Health Benefits. Subject to the terms and conditions of any existing health and
welfare plan adopted by Company, Company shall extend to Executive and Executive
shall have the right to continue his and that of his eligible family members’
participation in and coverage under any such plans, with Company having the
obligation to either reimburse Executive or pay for the coverage premiums for the
duration of the Severance Period if and to the extent it had such an obligation
immediately prior to the Termination Date and is otherwise permitted by applicable
laws without further or additional expense to Company; provided,
however, that if Executive elects to continue his health benefits coverage
under COBRA, Company will pay COBRA premiums on behalf of the Executive or reimburse
the same to Executive, as determined by Company in its sole discretion, during the
Severance Period; except, however, that except as may otherwise be
required by applicable law, in no event shall Company have any such obligation under
this Subsection if he receives or is entitled to receive equivalent coverage and
benefits under the plans and programs of a subsequent employer or an employer of his
spouse, in which case Executive shall have an obligation to report to Company the
existence of any such offer or coverage, with any such participation and coverage
being paid or extended, as the case may be, on the same terms and conditions as was
made available immediately prior to his Separation From Service for the Severance
Period;




(C) Bonuses. Company shall pay to Executive (or, in the case of Death or Disability
following the Termination Date, his estate or guardian, as the case may be) his
accrued, but unpaid Bonus Payments;




(D) Expense Reimbursement. Company shall pay within 30 days of the Termination Date
to Executive (or, in the case of Death or Disability, his estate or guardian, as the
case may be) his unreimbursed Business Expenses pursuant to Section 1.4(e) hereof
incurred by Executive as of the Termination Date;




(E) Equity Compensation. Except as may otherwise be expressly stated to the
contrary in any applicable agreement or stock option plan, all unvested stock
options, restricted stock or other equity-based awards held by Executive shall
immediately vest; and




(F) Definitions. For purposes of this Agreement, the following phrases shall have
the meaning ascribed thereto:




(I) “Severance Period” shall mean that period beginning on Executive’s
Separation From Service and ending upon the date on which the Expiration Date would
have otherwise occurred but for the Termination Date; and




(II) “Severance Payment” shall mean the Base Compensation and such other
compensation for which Company has an obligation under this Agreement to pay during
the Severance Period and that is otherwise constitutes a severance payment within
the meaning of Code Section 409A.




(ii) Timing of Severance Payments.




(A) In General. Except as otherwise provided in this Section 1.6, any such
Severance Payments (as defined below) shall be payable in accordance with Company’s
normal payroll practices and subject to the tax withholding specified in Section
1.4(a) above, as full, final and complete satisfaction of such obligations under
this Agreement; provided, however, that Executive shall have no
further claims against Company for any further compensation whatsoever, other than
the payment of unreimbursed Business Expenses and the continuation of any employee
welfare benefits as may be and to the extent required by law.




(B) Severance Payments to Specified Employees. Notwithstanding any other provision
in this Agreement to the contrary, if Executive is considered a “Specified Employee”
(within the meaning of Code Section 409A(a)(2)(B)(i)) as of the date of any
Separation From Service, then any payment under this Agreement that would otherwise
be permitted under Treas. Reg. Section 1.409A-3(a)(1) may not be made to Executive
before the date that is six (6) months after the date of Executive’s Separation From
Service with Company or, if earlier than the end of such six month period,
Executive’s date of death. Company shall have the discretion to elect whether to
accumulate the amount to which Executive would otherwise be entitled to be paid
under this Section but for his classification as a Specified Employee and pay such
amount in a lump sum as of the first day of the seventh (7th) month
following the Separation From Service or if each payment to which Executive would be
otherwise entitled upon a Separation From Service is delayed by six months. The
amount of any such Severance Payment that is deferred under this subsection shall
accrue interest at the rate of eight percent (8%) until the same shall have been
paid in full.



(c) Payments Conditioned on Release of Claims. Unless it otherwise elects to waive any
such condition precedent, Company’s obligation to pay Executive with the Severance Payment, pay the
bonuses, continue the health benefits or vest the equity compensation as set forth in Sections
1.6(b)(i)(A), (B), (C) or (E), respectively (collectively, the Contingent Payments”), is contingent
upon Executive’s and Company’s execution of that certain Form of Release, a copy of which is
attached hereto and marked as Exhibit “C” (the “Release”). If Executive fails to sign the Release
within twenty-one (21) days of receipt of notice of termination pursuant to Section 1.5, or
subsequently rescinds the Release, Executive shall not be entitled to the Contingent Payments.



(d) WARN Act Offset. In the event that Executive’s termination Without Cause in
accordance with Section 1.5 above is covered by the Worker Adjustment Retraining Notification Act
or any law enacted by a state of the United States of America having a similar purpose (the “WARN
Acts”) at the time of Executive’s termination, or is deemed to be covered by a WARN Act
retrospectively within 90 days after Executive’s termination, the amount of any Severance Payment
or benefit continuation Executive is entitled to receive pursuant to Section 1.6 shall be reduced
by an amount equal to any payments Company is required to provide Executive under any WARN Act or
by the amount of pay Executive receives during any portion of a WARN Act’s notice period where
Executive does not perform any work for Company.



2. EXECUTIVE’S REPRESENTATIONS AND WARRANTIES.



Executive represents and warrants to Company that (a) this Agreement is valid and binding upon and
enforceable against him in accordance with its terms, (b) Executive is not bound by or subject to
any contractual or other obligation that would be violated by his execution or performance of this
Agreement, including, but not limited to, any non-competition agreement presently in effect, and
(b) Executive is not subject to any pending or, to Executive’s knowledge, threatened claim, action,
judgment, order, or investigation that could adversely affect his ability to perform his
obligations under this Agreement or the business reputation of Company. Executive has not entered
into, and agrees that he will not enter into, any agreement either written or oral in conflict
herewith.




	3.	 	MISCELLANEOUS.





3.1 Notices. All notices, requests, and other communications hereunder must be in writing and
will be deemed to have been duly given only if delivered personally against written receipt or by
facsimile transmission with answer back confirmation or mailed (postage prepaid by certified or
registered mail, return receipt requested) or by overnight courier to the parties at the following
addresses or facsimile numbers:




If to the Executive, to:




If to Company, to the Board at the following address:




Attn: Board of Directors




With copy to:




Frank McDaniel, Esq.




McDaniel Law Group, PC




PO Box 681235




Marietta, Georgia 30068-0021



All such notices, requests and other communications will (a) if delivered personally to the
addresses as provided in this Section be deemed given upon delivery, (b) if delivered by facsimile
transmission to the facsimile number as provided in this Section be deemed given upon receipt, and
(c) if delivered by mail in the manner described above to the addresses as provided in this Section
be deemed given upon receipt (in each case regardless of whether such notice, request, or other
communication is received by any other person to whom a copy of such notice, request or other
communication is to be delivered pursuant to this Section). Any party from time to time may change
its address, facsimile number, or other information for the purpose of notices to that party by
giving written notice specifying such change to the other parties hereto.



3.2 Authorization to be Employed. This Agreement, and Executive’s employment hereunder, is
subject to Executive providing Company with legally required proof of Executive’s authorization to
be employed in the United States of America.



3.3 Entire Agreement. This Agreement, together with the Statement (both of which being
entered into by and between Company and Executive of even date herewith), supersedes any and all
prior discussions and agreements between the parties with respect to the subject matter hereof and
contains the sole and entire agreement between the parties hereto with respect thereto.



3.4 Survival. The parties hereby acknowledge and agree that, notwithstanding any provision of
this Agreement to the contrary, their respective obligations pursuant to Sections 1.6 2, 3 and the
Statement shall survive the termination of this Agreement, the Employment Term and/or the
Executive’s employment with Company.



3.5 Waiver. Any term or condition of this Agreement may be waived at any time by the party
that is entitled to the benefit thereof, but no such waiver shall be effective unless set forth in
a written instrument duly executed by or on behalf of the party waiving such term or condition. No
waiver by any party hereto of any term or condition of this Agreement, in any one or more
instances, shall be deemed to be or construed as a waiver of the same or any other term or
condition of this Agreement on any future occasion. All remedies, either under this Agreement or
by law or otherwise afforded, will be cumulative and not alternative.



3.6 Amendment. This Agreement may be amended, supplemented, or modified only by a written
instrument duly executed by or on behalf of each party hereto.



3.7 Recovery of Attorney’s Fees. In the event of any litigation arising from or relating to
this Agreement, the prevailing party in such litigation proceedings shall be entitled to recover,
from the non-prevailing party, the prevailing party’s reasonable costs and attorney’s fees, in
addition to all other legal or equitable remedies to which it may otherwise be entitled.



3.8 No Third Party Beneficiary. The terms and provisions of this Agreement are intended
solely for the benefit of each party hereto and Company’s successors or assigns, and it is not the
intention of the parties to confer third-party beneficiary rights upon any other person.



3.9 No Assignment; Binding Effect. This Agreement shall inure to the benefit of any
successors or assigns of Company. Company may assign this agreement to a controlled subsidiary (as
such term is defined under the final regulations promulgated pursuant to Internal Revenue Code
Section 409A). Executive shall not be entitled to assign his obligations under this Agreement.



3.10 Headings. The headings used in this Agreement have been inserted for convenience of
reference only and do not define or limit the provisions hereof.



3.11 Severability. Company and Executive intend all provisions of this Agreement to be
enforced to the fullest extent permitted by law. Accordingly, if a court of competent jurisdiction
determines that the scope and/or operation of any provision of this Agreement is too broad to be
enforced as written, Company and Executive intend that the court should reform such provision to
such narrower scope and/or operation as it determines to be enforceable. If, however, any
provision of this Agreement is held to be illegal, invalid, or unenforceable under present or
future law, and not subject to reformation, then (a) such provision shall be fully severable, (b)
this Agreement shall be construed and enforced as if such provision was never a part of this
Agreement, and (c) the remaining provisions of this Agreement shall remain in full force and effect
and shall not be affected by illegal, invalid, or unenforceable provisions or by their severance.



3.12 Governing Law and Jury Trial. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA APPLICABLE TO CONTRACTS EXECUTED AND PERFORMED IN
SUCH STATE WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS PRINCIPLES. BECAUSE DISPUTES ARISING IN
CONNECTION WITH COMMERCIAL MATTERS, INCLUDING EMPLOYMENT AGREEMENTS, ARE MOST QUICKLY AND
ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND
FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES (IF
ANY) BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST
COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL
RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER
ARISING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE PARTIES ARISING OUT OF, CONNECTED WITH, RELATED
TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS EMPLOYMENT
AGREEMENT OR MATTERS RELATED HERETO.



3.13 Jurisdiction. The parties hereby consent to the personal jurisdiction and venue of any
court physically located within the County of Cobb, State of Georgia, United States of America, in
connection with any legal or equitable action between the parties arising out of or in connection
with this Agreement.



3.14 Counterparts. This Agreement may be executed in any number of counterparts and by
facsimile, each of which will be deemed an original, but all of which together will constitute one
and the same instrument.



3.15 Opportunity to Obtain Counsel. In connection with the preparation of this Agreement,
Executive acknowledges and agrees that: (a) this Agreement was prepared by legal counsel to Company
(the “Law Firm”) solely on behalf of Company and not on behalf of Executive; (b) Executive has been
advised that his interests may be opposed to the interests of Company and, accordingly, the Law
Firm’s representation of Company in the preparation of this Agreement may not be in the best
interests of Executive; and (c) Executive has been advised to retain separate legal counsel.
Executive warrants and agrees that he has had a reasonable opportunity to obtain independent legal
counsel with regard to the terms and conditions of this Agreement, to include, without limitation,
advice regarding compliance with Code Section 409A, for which Executive makes no reliance on
Company or Law Firm, and has read and fully understands the terms and conditions of this Agreement.
If Executive elects not to consult with any such counsel, he has done so freely and of his own
volition. By signing this Agreement, Executive is affirming that he has freely and of Executive’s
own volition acknowledged and agreed to all terms and conditions contained in this Agreement.



3.16 Construction and Interpretation. Should any provision of this Agreement require judicial
interpretation, the parties hereto agree that the court interpreting or construing the same shall
not apply a presumption that the terms hereof shall be more strictly construed against one party by
reason of the rule of construction that a document is to be more strictly construed against the
party that itself, or through its agent, prepared the same, and it is expressly agreed and
acknowledged that Company and Executive and each of his and its representatives, legal and
otherwise, have participated in the preparation hereof.



3.17 Code Section 409A. Notwithstanding anything to the contrary contained herein, this
Agreement is intended to, but no assurance is made by Company or Law Firm that the provisions
hereof, satisfy the requirements of Code Section 409A. Accordingly, all provisions herein, or
incorporated by reference, shall be construed and interpreted to satisfy the requirements of Code
Section 409A. Further, for purposes of Code Section 409A, each payment of compensation under this
Agreement shall be treated as a separate payment of compensation. Any reimbursements or in-kind
benefits provided under this Agreement shall be made or provided in accordance with the
requirements of Code Section 409A, including, where applicable, the requirement that (a) any
reimbursement is for expenses incurred during the period of time specified in this Agreement, (b)
the amount of expenses eligible for reimbursement, or in kind benefits provided, during a calendar
year may not affect the expenses eligible for reimbursement, or in kind benefits to be provided, in
any other calendar year, (c) the reimbursement of an eligible expense will be made no later than
the last day of the calendar year following the year in which the expense is incurred, and (d) the
right to reimbursement or in kind benefits is not subject to liquidation or exchange for another
benefit. All references to “Separation From Service” contained in this Agreement shall mean
“separation from service” as determined in accordance with Treasury Regulation Section 1.409A-1(h).



IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the date
first set forth above.




COMPANY




[      ] Inc.



	 
	Signature:

	 

	Printed Name:

	 

	Title:

	 

	EXECUTIVE

	Signature:

	 

	Printed Name:







28





Exhibit “A”



VIASPACE GREEN ENERGY, INC.




STATEMENT

OF ADDITIONAL TERMS AND CONDITIONS

RELATING TO EMPLOYMENT AGREEMENT




THIS STATEMENT OF ADDITIONAL STANDARD TERMS AND CONDITIONS RELATING TO EMPLOYMENT AGREEMENT (the
“Agreement”) is made a part of and incorporated into that certain Employment Agreement made and
entered into of even date herewith by and between VIASPACE Green Energy, Inc., a British Virgin
Island company (“Company”), and Sung H. Chang, a resident of the State of Georgia, United States of
America (“Executive”)(the “Employment Agreement”). Except as otherwise defined herein, all
capitalized terms and phrases shall have the meaning ascribed thereto in the Employment Agreement.
Company and Executive are sometimes collectively referred to in this Agreement as the “Parties.”



VIASPACE GREEN ENERGY, INC.



Authorized Signature:       



Printed Name:       



Position: Authorized Officer



	 	 	 
	
 
	 	Address:
	
 
	 	 
	EXECUTIVE

	 	

	
 
	 	 
	
 
	 	 
	Signature:       

	 	—
	
 
	 	 
	Printed Name: Sung H. Chang

	 	

Telephone No.:
	
 
	 	Facsimile No.:






TERMS AND CONDITIONS




In consideration of the benefits each Party receives as a result of and under the Employment
Agreement and relationship created thereby, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be
legally bound by this Agreement, hereto hereby agree as follows:



1. Definitions. For purposes of this Agreement, the following terms and phrases shall have
the meaning ascribed thereto:



“Affiliate” means, with respect to a particular party, a person, directly or indirectly, whether
before, as of or following the Effective Date, that controls, is controlled by or is under common
control with such party. For purposes of this definition, “control” shall mean beneficial
ownership (direct or indirect) of more than 50% of the outstanding voting stock or other voting
rights entitled to elect directors (or in the case of an entity that is not a corporation the
election or appointment of the corresponding managing authority); provided,
however, that in any country where the local law shall not permit foreign equity
participation of more than 50%, then an “Affiliate,” as to Licensee shall further include any
company in which the Licensee shall own or control, directly or indirectly, the maximum percentage
of such outstanding stock or voting rights permitted by local law or otherwise exercises control
over the management of such company.



“Company Products” shall mean any and all (i) Developments made, conceived or created by Executive
and relating to the Restricted Business during the term of this Agreement and (ii) Work Products.



“Confidential Information” shall mean any and all proprietary and confidential technical and
nontechnical data, information, agreements, documents or other property of Company or any Affiliate
thereof, other than “Trade Secrets,” and Proprietary Rights thereto, which is of tangible or
intangible value to Company or any Affiliate thereof and is not public information or is not
generally known or available to Company’s competitors, but is known only to Company or its
Affiliates and their employees, independent contractors or agents to whom it must be confided in
order to apply it to the uses intended, including, without limitation, all business methods,
practices and concepts; business and financial information and records, including, without
limitation, accounting records, tax returns, financial statements, projections, forecasts or other
budgets, other financial data or plans, business plans and strategies; product plans, customer
lists and other customer-related information; vendor or supplier lists and other vendor or
supplier-related information; computer or data base files; passwords or other access codes;
software programs, language, algorithms, codes or “fingerprints”; reports; analyses; notes;
interpretations; formulae, processes, technology, inventions, patents, and the Proprietary Rights
thereto; the terms of this Agreement and any other agreement between the Parties; Company Products
and Moral Rights.



“Developments” shall mean any ideas, concepts, invention, modification, discovery, design,
development, improvement, process, work of authorship, algorithm, documentation, formula, data,
technique, know-how, source code and object code and other computer codes and software programs,
technology, research, know-how and other Intellectual Property any and all Proprietary Rights
therein or thereto (whether or not patentable or registerable under copyright, trademark or similar
statutes or subject to analogous protection); provided, however, that in no event
shall the term “Developments” include the Excluded Property.



“Excluded Property” shall mean those items of personal property either owned by Executive or to
which Executive has exclusive rights and listed on Schedule “1,” entitled “Excluded Property,”
which is attached hereto and made a part hereof.



“Intellectual Property” shall mean all of the following in any jurisdiction throughout the world:
(a) all inventions (whether patentable or unpatentable and whether or not reduced to practice), all
improvements thereto, and all patents, patent applications, and patent disclosures, together with
all reissuances, continuations, continuations-in-part, revisions, extensions, and reexaminations
thereof, (b) all trademarks, service marks, trade dress, logos, slogans, trade names, corporate
names, Internet domain names, and rights in telephone numbers, together with all translations,
adaptations, derivations, and combinations thereof and including all goodwill associated therewith,
and all applications, registrations, and renewals in connection therewith, (c) all copyrightable
works, all copyrights, and all applications, registrations, and renewals in connection therewith,
(d) all mask works and all applications, registrations, and renewals in connection therewith, (e)
all trade secrets and confidential business information (including ideas, research and development,
show-how, know-how, formulas, compositions, manufacturing and production processes and techniques,
technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost
information, and business and marketing plans and proposals), (f) all computer software (including
source code, executable code, data, databases, and related documentation), (g) all material
advertising and promotional materials, (h) all other proprietary rights, and (i) all copies and
tangible embodiments thereof (in whatever form or medium).



“Moral Rights” shall mean all rights of paternity, integrity, disclosure and withdrawal and any
other rights that may be known as or referred to as “moral rights,” “artist’s rights,” “droit moral
rights,” or the like.



“Person” shall mean any individual, partnership, limited partnership, limited liability
partnership, limited liability company, corporation, trust, association, non-profit or charitable
organization or other entity, or an unincorporated organization, a governmental entity or any
department or agency thereof.



“Proprietary Rights” shall mean all patent rights, copyrights, sui generis rights, trade secrets,
mask work rights, and other Intellectual Property rights throughout the world.



“Restricted Business” shall mean any endeavors, directly or indirectly, in the (a) relating to the
use of grasses as a source of or for fuel or energy; or (b) the use of art or frames relating
thereto; or (c) any other effort or enterprise undertaken by Company or any Affiliate thereof and
approved by the Board during the Employment Term; and (d) any other activity, effort or enterprise
relating thereto, including, without limitation, development, research, making, manufacturing,
marketing, promotion, license, sale, buying, importation, exportation, or other commercialization
efforts or the licensing or sublicensing of any such activities, efforts or enterprises.



“Trade Secrets” shall mean information, including, but not limited to, any and all Intellectual
Property, Developments, Work Product and any and all other Confidential Information and Proprietary
Rights thereto, of Company or any Affiliate thereof that: (a) derives economic value, actual or
potential, from not being generally known to, and not being readily ascertainable by proper means
by, other persons who can obtain economic value from its disclosure or use; and (b) is the subject
of efforts that are reasonable under the circumstances to maintain its secrecy (to the extent that
applicable law mandates a definition of “trade secret” inconsistent with the foregoing definition,
then the foregoing definition shall be construed in such a manner as to be consistent with the
mandated definition under applicable law).



“Work Product” shall mean all of Executive’s right, title, and interest in and to any and all
Developments (and all Proprietary Rights with respect thereto), whether or not patentable or
registerable under copyright or similar statutes, that was or is developed, made, conceived or
reduced to practice or learned by Executive, either alone or jointly with others, during the period
of Executive’s employment or within twelve (12) months following the Termination Date.



2. Restrictive Covenants.



(a) Nondisclosure. Executive acknowledges that he may be exposed to certain Confidential
Information and Trade Secrets and the Proprietary Rights thereto during the Employment Term, and
his unauthorized use or disclosure of such information, data or rights could cause immediate and
irreparable harm to Company. Accordingly, except to the extent that he is required to use such
property, information, technology or data to perform his obligations as an employee of Company,
Executive agrees that he shall not (and shall take full responsibility for ensuring that none of
his agents), without the express and duly authorized written consent of Company, redistribute,
market, publish, disclose or divulge to any other Person, or use or modify for use, directly or
indirectly in any way for any Person (i) any of Company’ Confidential Information and Proprietary
Rights thereto during his Employment Term and for a period of three (3) years immediately
thereafter; and (ii) any of Company’ Trade Secrets and Proprietary Rights thereto at any time
during which such information shall constitute a Trade Secret (whether before, during or after
termination of the Employment Term).



(b) Exception to Confidentiality Obligation. The confidentiality obligations hereunder shall
not apply to information that can be demonstrated by Executive to:




(i) have been developed independently by or known to Executive prior to his first
having become employed with Company, whether or not under this Agreement, and not otherwise
assigned, transferred or otherwise conveyed to Company under this Agreement or any other
agreement;




(ii) not have been acquired, directly or indirectly, by Executive from the Company or
from a third party under an obligation of confidence and limited use;




(iii) have been rightfully received by Executive in accordance with this Agreement
after disclosure to Company from a third party who did not require Executive to hold it in
confidence or limit its use and who did not acquire it, directly or indirectly, from the
Company under a continuing obligation of confidence;




(iv) have been in the public domain as of the date of this Agreement, or comes into the
public domain during the term of this Agreement through no fault of Executive; or




(v) to be required to be disclosed by a governmental or other regulatory body or by
action of law.



(c) Limitation on Solicitation of Customers and Personnel. During the Employment Term and for
a period of two (2) years immediately thereafter, Executive shall not, directly or indirectly,
alone or in conjunction with any other Person, (i) solicit any actual or actively sought
prospective client or customer of Company with whom or which Executive had material contact during
the Employment Term or with respect to whom or which Executive was provided Confidential
Information by Company during the Employment Term (an “Company Customer”) for the purpose of
providing such Company Customer products or services that are substantially similar to or
competitive with the Restricted Business, (ii) solicit any employee, other personnel or independent
contractor of Company (a “Protected Person”) for the purpose of encouraging such Protected Person
to sever an employment, contractual or other relationship with Company or (iii) hire or otherwise
retain a Protected Person to perform services of a nature substantially similar to that which such
Protected Person performed for Company within a one (1) year period prior to any such hiring or
engagement.




Refrain from Competitive Activities. During the Employment Term and for a period
terminating two years after termination of employment, Executive, without Company’s prior
written permission, shall not for any reason whatsoever, (i) enter into the employment of or
render or perform any services, directly or indirectly, to any individual or other person,
firm or corporation engaged in the Restricted Business; or (ii) engage, directly or
indirectly, in the Restricted Business, whether as an individual, partner, shareholder,
creditor, director, officer, principal, agent, employee, trustee, consultant, advisor or in
any other relationship or capacity.



3. Assignment of Company Products.



(a) Company owns and shall own and Executive hereby agrees to assign and assigns to Company
any and all Company Products, to the fullest extent allowable by law, and Executive shall promptly
disclose such Company Property to Company. If Executive uses or discloses its own or any third
party’s confidential information or Intellectual Property when acting within the scope of its
employment or engagement or otherwise on behalf of Company, Company will have and Executive hereby
grants Company a perpetual, irrevocable, worldwide, royalty-free, non-exclusive, sublicensable
right and license to exploit and exercise all such confidential information and Intellectual
Property rights.



(b) Executive further acknowledges that all original works of authorship that are made by him
(solely or jointly with others) during the term of Executive’s employment or engagement with
Company and that are within the scope of is employment or engagement and protectable by copyright
are “works made for hire,” as that term is defined in the United States Copyright Act (17 U.S.C. §
101).



(c) To the extent Executive retains any such Moral Rights under applicable law, Executive
hereby waives such Moral Rights and consents to any action with respect to such Moral Rights by or
authorized by Company and specifically grants to Company the right to alter such Company Products.
Executive will confirm any such waivers and consents from time to time as requested by Company.



4. Enforcement of Proprietary Rights.



(a) Executive will assist Company in every proper way to obtain and from time to time enforce
United States and foreign Proprietary Rights relating to Company Products in any and all countries.
To that end, Executive will execute, verify, and deliver such documents and perform such other
acts (including appearances as a witness) as Company may reasonably request for use in applying
for, obtaining, perfecting, evidencing, sustaining, and enforcing such Proprietary Rights and the
assignment thereof. In addition, Employee will execute, verify, and deliver assignments of such
Proprietary Rights to Company or its designee. Executive’s obligation to assist Company with
respect to Proprietary Rights relating to such Company Products in any and all countries shall
continue beyond the termination of Executive’s employment or engagement, but Company shall
compensate Executive at a reasonable rate after termination of its employment or engagement for the
time actually spent by Executive at Company’s request on such assistance.



(b) In the event Company is unable for any reason, after reasonable effort, to secure
Executive’s signature on any document needed in connection with the actions specified in the
preceding paragraph, Executive hereby irrevocably designates and appoints Company and its duly
authorized officers and agents as its agent and attorney in fact, coupled with an interest, to act
for and on its behalf to execute, verify, and file any such documents and to do all other lawfully
permitted acts to further the purposes of the preceding paragraph thereon with the same legal force
and effect as if executed by Executive. Executive hereby waives and quitclaims to Company any and
all claims, of any nature whatsoever, that Executive now or may hereafter have for infringement of
any Proprietary Rights assigned hereunder to Company.



5. No Conflicting Obligation. Executive represents that its performance of all the terms
of this Agreement and as an employee or consultant of Company does not and will not breach any
agreement between it and any other employer, person or entity. Executive has not entered into, and
it agrees it will not enter into, any agreement either written or oral in conflict herewith.
Executive shall, during the term of its employment or engagement, diligently promote the interests
of Company. Executive shall serve Company to the best of its ability, faithfully, honestly,
diligently and efficiently.



6. Return of Company Documents. When Executive’s employment with or engagement by Company
ceases for any reason (or no reason), Executive will promptly deliver to Company all drawings,
notes, memoranda, specifications, devices, formulas, and documents, together with all copies
thereof, and any other material (and regardless of whether any of the foregoing is kept in physical
or electronic form) containing or disclosing any Confidential Information and Trade Secrets,
including, without limitation, Company Products and Proprietary Rights relating thereto of Company.
Executive further agrees that any property situated on Company’ premises and owned by Company,
including disks and other storage media, filing cabinets or other work areas, is subject to
inspection by Company personnel at any time with or without notice.



7. Acknowledgment. Executive acknowledges and agrees that the covenants set forth in this
Agreement are reasonable given Company’ need to protect its Trade Secrets and Confidential
Information, particularly given the complexity and competitive nature of the technology industry,
and that Executive has sufficient resources to find alternative, commensurate employment in his
respective fields of expertise that would not violate this Agreement.



8. Remedies; Damages, Injunctions and Specific Performance. It is expressly understood and
agreed that the covenants, agreements and services to be rendered and performed by Executive under
this Agreement shall survive any termination or expiration of this Agreement, whether voluntary or
involuntary, with or without cause, and are special, unique, and of an extraordinary character. In
the event of any default, breach or threatened breach by Executive of this Agreement, Company shall
be entitled, if it so elects, to institute and prosecute proceedings in any court of competent
jurisdiction, either at law or in equity, and shall be entitled to such relief as may be available
to it pursuant hereto, at law or in equity, including, without limitation: (a) damages for any
breach of this Agreement; (b) an order for the specific performance hereof by Executive; or (c) an
order enjoining Executive from breaching such provisions, without bond and without prejudice to any
other rights and remedies that Company may have for a breach of this Agreement.



9. Tolling. Executive hereby expressly acknowledges and agrees that in the event the
enforceability of any of the terms of this Agreement shall be challenged in court or pursuant to
arbitration and Executive is not enjoined (either temporarily or permanently) from breaching any of
the restraints set forth in this Agreement, then if a court of competent jurisdiction or
arbitration panel finds subsequently that the challenged restraint is enforceable, the time period
of the restraint shall be deemed tolled upon the filing of the lawsuit challenging the
enforceability of the restraint until the dispute is finally resolved and all periods of appeal
have expired.



10. Ancillary Agreement. This Agreement shall be construed as an agreement ancillary to
that certain Employment Agreement entered into of even date herewith and by and among Company, and
Executive (to which this Agreement is attached as Exhibit A (the “Employment Agreement”), and the
existence of any claim or cause of action of Executive against Company, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by Company of this
Agreement.



11. Binding Effect and Assignability. The rights and obligations of Company under this
Agreement shall inure to the benefit of and shall be binding upon any affiliate, successor or
assign of or to the business of Company. Neither this Agreement nor any rights or obligations of
Executive shall be transferable or assignable by Executive without Company’s prior written consent,
and any attempted transfer or assignment hereof by Executive not in accordance herewith shall be
null and void.



12. Severability. All Sections, subsections, paragraphs, terms and provisions of this
Agreement are severable, and the unenforceability or invalidity of any of the terms, provisions,
Sections, subsections or paragraphs of this Agreement shall not affect the validity or
enforceability of the remaining terms, provisions, Sections, subsections or paragraphs of this
Agreement, but such remaining terms, provisions, Sections, subsections or paragraphs shall be
interpreted and construed in such a manner as to carry out fully the intention of the Parties.



13. Captions and Counterparts. The Section headings in this Agreement are for convenience
of reference only and shall not affect the meaning or interpretation hereof. This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an original, but all of
which shall together constitute one and the same instrument.



14. Notices. Any notice or other communication required or permitted hereunder shall be in
writing and shall be deemed to have been duly given on the date of service if personally served or
if telecopied (if telecopied on a business day and during business hours at the place of receipt
and if receipt is confirmed) or three (3) days after mailed if mailed by reputable international
overnight delivery service, postage prepaid and in any event addressed to the address set forth in
the signature clause to this Agreement or to such other address as shall be designated by written
notice issued pursuant hereto.



15. Recovery of Attorney’s Fees. In the event of any litigation arising from or relating
to this Agreement, the prevailing party in such litigation proceedings shall be entitled to
recover, from the non-prevailing party, the prevailing party’s reasonable costs and attorney’s
fees, in addition to all other legal or equitable remedies to which it may otherwise be entitled.



16. Waiver. The waiver by any party to this Agreement of a default or breach of any
Section, subsection or provision of this Agreement shall not operate or be construed as a waiver of
any prior or subsequent default or breach of the same or of a different Section, subsection or
provision by any party hereto.



17. Governing Law and Waiver of Jury Trial. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA, UNITED STATES OF AMERICA APPLICABLE
TO CONTRACTS EXECUTED AND PERFORMED IN SUCH STATE WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS
PRINCIPLES. BECAUSE DISPUTES ARISING IN CONNECTION WITH COMMERCIAL MATTERS, INCLUDING EMPLOYMENT
AGREEMENTS, ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE
PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE
PARTIES DESIRE THAT THEIR DISPUTES (IF ANY) BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS.
THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, OR
PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE BETWEEN
THE PARTIES ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS EMPLOYMENT AGREEMENT OR MATTERS RELATED HERETO.



18. Entire Agreement. This Agreement, together with the Employment Agreement to which this
Agreement is attached as Exhibit A and entered into between the Company, and Executive, contains
the complete agreement concerning the employment arrangement between Company and Executive as of
the date hereof.



19. Construction and Interpretation. Should any provision of this Agreement require
judicial interpretation, the parties hereto agree that the court interpreting or construing the
same shall not apply a presumption that the terms hereof shall be more strictly construed against
one party by reason of the rule of construction that a document is to be more strictly construed
against the party that itself, or through its agent, prepared the same, and it is expressly agreed
and acknowledged that Company and Executive and each of his and its representatives, legal and
otherwise, have participated in the preparation hereof.



EXHIBIT B




MUTUAL RELEASE AGREEMENT

IN CONNECTION WITH TERMINATION

OF EMPLOYMENT [WITHOUT CAUSE]

[FOR GOOD REASON]




THIS RELEASE AGEEMENT IN CONNECTiON WITH TERMINATION OF EMPLOYMENT [WITHOUT CAUSE][FOR GOOD
REASON] (the “Release”) is made and entered into as of the        day of        200       (the “Effective
Date”), by and between       , a resident of the State of [      ] (“Executive”) and       ,
Inc., (“Company”), a        corporation. Unless otherwise defined herein, capitalized terms and
phrases shall have the meaning ascribed thereto in the Employment Agreement (as defined below).



W I T N E S S E T H:




WHEREAS, Executive and Company entered into that certain Executive Employment Agreement dated
as of the        day of        20       (together with the Statement, the “Employment Agreement”);



WHEREAS, [Company][Executive] has determined to terminate the Employment Agreement and
Executive’s employment thereunder [without Cause][for Good Reason] (the “Termination”);



WHEREAS, following the Termination Date, Executive is entitled to be paid the Severance
Payment, but only upon and following his execution of this Release; and



WHEREAS, based on the foregoing, Company has prepared this Release for Executive’s review and
execution, subsequent to which and upon and all terms and conditions hereof becoming effective,
Executive will thereafter become entitled to be paid the Severance Payments as and to the extent
the same are provided under the Employment Agreement.



NOW, THEREFORE, in consideration of the mutual promises and undertakings contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:



1. Severance Payments. Subject to and conditioned upon this Release becoming fully
effective in all respects following the Termination Date, Company shall pay to Executive the
Contingent Payments as and to the extent the same are provided under the Employment Agreement.
Notwithstanding any provision of this Release to the contrary, in no event shall this Release have
any effect on (a) D&O Claims (as defined below) to or on which Executive may be entitled to rely;
(b) Claims (as defined below) against Executive for breach of fiduciary duty to Company or any
Affiliate thereof, act or omission constituting gross negligence, fraud or violation of any
applicable rule, regulation or law, or which Executive is not otherwise entitled to indemnification
under either the governing documents for Company or any Affiliate thereof or applicable law; or (c)
either party’s Claims based on acts or omissions occurring after the date hereof in breach of the
Statement or any term or condition of the Employment Agreement if such term or condition survived
the Termination of such Employment Agreement, with the Statement and such surviving terms and
conditions of the Employment Agreement continuing to be enforceable against the parties thereto for
the applicable period of limitations; ; or (c) Claims based on or arising under the Security
Documents as defined under that certain Secured Promissory Note issued in favor of Sung H. Chang as
of the        day of May 2010.



2. Executive Releases, Waiver, and Covenant Not to Sue.



(a) Release. Except as otherwise provided in Section 1, of this Release, as of and coincident
with the Effective Date, Executive hereby and forever releases and discharges Company and Company’s
shareholders, officers, directors, affiliates, agents, successors, assigns and insurers
(collectively, the “Company Released Parties”) from any and all Claims (other than D&O Claims) he
has or may have from the beginning of time to the Effective Date, including, without limitation,
any and all Claims arising under or relating to his Employment Agreement, Stock Option Agreement or
any termination thereof or rights thereunder or to any other compensatory-related Claims (the
“Executive Claims”). The foregoing release shall constitute a complete and general release of all
such Executive Claims, a waiver of such Claims and a covenant not to sue thereon, and Executive
shall be deemed to have fully, finally, and forever settled, discharged, released, waived, and
abandoned any and all Executive Claims he had, may have had, has or may have, and the foregoing
release shall in all respects and in any event and in all cases be deemed to release each of the
Company Released Parties from any injury, damage, liability, responsibility, or obligation
Executive may have suffered with respect to the Executive Claims.




[COMPANY SHALL HAVE THE RIGHT TO MAKE SUCH CHANGES TO THIS FORM OF RELEASE AS MAY BE
NECESSARY AT THE TIME OF ITS EXECUTION TO CONFORM THE OBJECTIVES OF THIS RELEASE TO
APPLICABLE LAWS, INCLUDING, WITHOUT LIMITATION, THE LAWS OF ANY STATE OF THE UNITED STATES
(E.G., RELATING TO THE RELEASE OF UNKNOWN OR CONTINGENT CLAIMS), THE FEDERAL LAWS OF THE
UNITED STATES (E.G., RELATING TO THE RELEASE OF CLAIMS UNDER ADEA) OR THE BRITISH VIRGIN
ISLANDS]



(b) Definition. For purposes of this Release, the following terms and phrases shall have the
meaning ascribed thereto:




(i) “Claim” shall mean any and all causes of action, actions, affirmative defenses,
judgments, liens, indebtedness, damages, losses, claims, liabilities and demands of every
kind and character, whether known or unknown, suspected or unsuspected, existing or
prospective, from the beginning of time through and including the Termination Date,
including, without limitation, any and all claims, including claims based on, arising under
or otherwise relating to the Civil Rights Act of 1964, the Employee Retirement Income
Security Act of 1974, the Age Discrimination in Employment Act of 1967 (“ADEA”), the
Americans with Disabilities Act, the Vietnam Era Veterans Readjustment Act, all other
federal or state statutes regulating military service leaves, and all amendments thereof or
any other relevant or potentially applicable state and federal statutes; past wages or
salaries, emotional distress, personal injuries or damages, disability insurance or other
benefits (except vested retirement benefits), violation of any express or implied agreement,
written or verbal, and any common law duty, including claims for attorney fees.




(ii) “D&O Claims” means any Claims Executive may be entitled to assert, on
which Executive may rely or to which Executive may be entitled for or on account of which
relate to his having served Company or any Affiliate thereof as a director, officer or
employee, as the case may be, whether any such Claim arises under a written agreement, the
articles or certificate of incorporation, bylaws or any other governing document, applicable
law or otherwise, including, without limitation, any and all rights to indemnification or
policies of insurance policy that are intended for the protection or defend of persons
acting in any such capacity.



(c) No Admission. Executive acknowledges that this Release reflects the settlement of the
Executive Claims that are denied and contested, and agrees that the settlement reflected by this
Release shall not be construed as an admission of liability, guilt or innocence of Company.



(d) Covenant Not to Sue. Executive agrees that he will never institute any action for
suit-at-law or action against all or any one of the Company Released Parties, nor institute,
prosecute, or in any way aid in the institution or prosecution of any Executive Claim for damages,
costs, loss of services, expenses, or compensation for or on account of any damage, loss or injury,
either to person or property or both, whether developed or undeveloped, resulting to or to result,
known or unknown, past, present, or future, arising out of any Executive Claim that is, is to be or
has been released under Release.



3. Company Releases, Waiver and Covenant Not to Sue.



(a) Release. Except as otherwise provided in Section 1, of this Release, as of and coincident
with the Effective Date, Company hereby and forever releases and discharges Executive from any and
all Claims it has or may have from the beginning of time to the Effective Date, including, without
limitation, any and all Claims arising under or relating to Executive’s Employment Agreement, Stock
Option Agreement or any termination thereof or rights thereunder or to any other
compensatory-related Claims (the “Employment-Related Claims”). The foregoing release shall
constitute a complete and general release of all such Employment-Related Claims, a waiver of such
Claims and a covenant not to sue thereon, and Company shall be deemed to have fully, finally, and
forever settled, discharged, released, waived, and abandoned any and all Employment-Related Claims
it had, may have had, has or may have, and the foregoing release shall in all respects and in any
event and in all cases be deemed to release each of the Executive Released Parties from any injury,
damage, liability, responsibility, or obligation Company may have suffered with respect to the
Employment-Related Claims.



(b) No Admission. Company acknowledges that this Release reflects the settlement of the
Employment-Related Claims that are denied and contested, and agrees that the settlement reflected
by this Release shall not be construed as an admission of liability, guilt or innocence of
Executive.



(c) Covenant Not to Sue. Company agrees that it will never institute any action for
suit-at-law or action against all or any one of the Executive Released Parties, nor institute,
prosecute, or in any way aid in the institution or prosecution of any Employment-Related Claim for
damages, costs, loss of services, expenses, or compensation for or on account of any damage, loss
or injury, either to person or property or both, whether developed or undeveloped, resulting to or
to result, known or unknown, past, present, or future, arising out of any Employment-Related Claim
that is, is to be or has been released under Release.




	 	4.	 	Executive’s Acknowledgements, Representations and Warranties. In executing
this Release, Executive acknowledges, represents and warrants the following:





(a) He was encouraged by Company to consult with an attorney or other advisor of his choosing
regarding the terms and conditions of this Release, and he has either consulted with an attorney
regarding this Release or has intentionally chosen not to exercise his right to consult with an
attorney;



(b) He may revoke this Release at any time within seven consecutive calendar (7) days of the
Effective Date, by delivering to Company’s Chief Executive Officer written notice of such
revocation; but that Company shall have no obligation whatsoever to pay the Severance Payments
until both Executive shall have delivered a fully executed copy of this Release and such seven (7)
day revocation period shall have lapsed without Executive having exercised such revocation right;



(c) He has been provided a period of twenty-one (21) days in which to review this Release
prior to signing;



(d) He has read and understands each of the terms and conditions of this Release;



(e) His actions are voluntary and free from coercion or duress by Company or any of its
representatives; and



(f) He is not in breach and has engaged at no time prior to the Termination Date in any act or
omission that might otherwise constitute a breach of the Employment Agreement or any other
agreement referenced therein.



5. Non-Admission of Liability. By execution of this Release, each party specifically
denies any wrongdoing as to the other party, and specifically disclaims any violation of any law,
contract, public policy, or the commission of any tort.



6. Non-disparagement. The parties mutually agree that neither will disparage nor denigrate
the other or the others reputation, name or goodwill in any communication, verbal or written, with
any third-party, either during or after Executive’s employment with Company.



7. Breach/Tender of Proceeds. Should Executive violate or breach any term or condition of
this Release or the Employment Agreement and thereafter fail to cure any such default in accordance
with the terms thereof, Company’s obligation to pay the Severance Payments shall terminate upon and
coincident therewith, and Executive shall have no further rights to any such payments thereafter.
In the event Executive attempts to challenge the enforceability of this Release, Executive must, as
a precondition to bringing such challenge, tender to Company all monies and other tangible
consideration received by him pursuant to this Release, plus interest, and request Company to
retain such consideration and agree to cancel this Release. In the event Company does not accede
to any such request to cancel this Release, Company shall so notify Executive and place such
consideration thereafter in an interest-bearing escrow account pending resolution of any issue over
this Release’s enforceability.



8. Applicable Law. Unless expressly stated in this Release, the terms and conditions of
the Employment Agreement shall govern this Release as to matters of involving the handling of any
interpretation or disputes between the parties.



9. Entire Agreement. This Release and Employment Agreement, which agreement (except for
those provisions that survive) is terminated as of the Termination Date, contains the entire
understanding of the parties with respect to the matters set forth herein, and supersedes all
previous verbal and written agreements between them; provided that, for the avoidance of doubt, the
terms of this Release shall not modify the terms of the Employment Agreement unless specifically
set forth in Release. The terms and conditions of this Release and Employment Agreement cannot be
modified except in a subsequent writing agreed to and signed by Executive and the Chief Executive
Officer of Company.



10. Counterparts. This Release may be executed in counterparts, each of which, when
executed, shall be an original, and all of which together shall constitute one and the same
agreement. The signatories may execute this Release by facsimile counterparts, and a legible
facsimile of a signature shall be as effective as an original signature.



11. Assignment. This Release may not be assigned by either party without the written prior
consent of the other party, which consent shall not be unreasonably withheld, delayed, denied or
conditioned.



IN WITNESS WHEREOF, the parties have signed this Release on the dates written below.



	 	 	 
	ON BEHALF OF COMPANY:

	 	EXECUTIVE:
	     , Inc.

	 	







             



Name: [      ] [      ], individually



Title: Chief Executive Officer



29



EXHIBIT H-2



VIASPACE GREEN ENERGY, INC




SENIOR EXECUTIVE EMPLOYMENT AGREEMENT




THIS SENIOR EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) is entered into as of the        day of
     2010, by and between VIASPACE Green Energy, Inc., a British Virgin Islands company
(“Company”), and Sung H. Chang, a resident of the State of Georgia, United States of America
(“Executive”). Capitalized terms and phrases shall have the meaning ascribed thereto in this
Agreement.



RECITALS




WHEREAS, Company’s board of directors (the “Board”) has determined that it is in Company’s
best interest to enter into a written employment agreement with Executive; and



WHEREAS, Executive desires to accept the terms and conditions of this Agreement in exchange
for the benefits offered hereunder.



AGREEMENT




NOW, THEREFORE, in consideration of the premises and the mutual covenants and promises
contained herein, and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:




	 	2.	 	EMPLOYMENT TERMS AND CONDITIONS.





1.1 Employment. Upon and coincident with the Effective Date (as defined below), Company
agrees to employ, and Executive hereby accepts employment by Company, upon the terms and conditions
set forth in this Agreement.



1.2 Duties.



(a) In General. Executive shall serve as Company’s President. In his capacity as
Company’s President, Executive shall report directly to Company’s Board of Directors (the “Board”).
In such capacity, Executive shall perform the duties and responsibilities customarily performed by
an individual with such titles and as may otherwise be reasonably assigned to him from time to time
by the Board for the Employment Term (as defined below)(the “Services”). Except as otherwise
agreed upon by Company, Executive shall devote all of Executive’s business time, energy and skill
to performing the Services, shall not be otherwise employed and shall perform the Services
diligently, faithfully and to the best of Executive’s abilities.



(b) Other Activities. Notwithstanding the above, Executive may (i) serve as a
director, advisor or trustee of other organizations, (ii) engage in charitable, civic, educational
and/or governmental activities, provided that any such services and activities do not materially
interfere with Executive’s ability to perform his duties under this Agreement and that Executive
obtains written consent for all such activities from Company, which consent will not be
unreasonably withheld. Consistent with the foregoing, Executive may engage in personal activities,
including, without limitation, personal investments, provided that such activities described under
this Section 1.2(b) do not materially interfere with Executive’s performance of the Services or any
other of Executive’s written agreements with Company, or (iii) as an officer or and board member
(or both) of VIASPACE Inc. or any Affiliate thereof.



(c) Compliance with Policies. Subject to the terms of this Agreement, during the
Employment Term, Executive shall comply in all material respects with all Company policies and
procedures applicable to employees of Company generally and Executive specifically. In connection
with and as a condition to this Agreement, Executive and Company shall enter into as of the
Effective Date that certain “Statement of Additional Terms and Conditions Relating to Employment
Agreement,” substantially in the form attached hereto as Exhibit “A,” which is incorporated herein
and made a part hereof (the “Statement”).



1.3 Employment Term. Company agrees to employ Executive pursuant to the terms of this
Agreement, and Executive hereby accepts employment with Company, upon the terms set forth in this
Agreement, for the period commencing upon and coincident with the        day of        2010 (the “Effective
Date”) and ending upon the earlier of:




(a) Expiration Date. That date which coincides with the last day of the later
of the Initial Term (as defined below) or the Renewal Term (as defined below), as the case
may be (such date shall be referred to as the “Expiration Date”) (For purposes of this
Agreement, the phrase “Initial Term” shall mean that period from the Effective Date through
and including the second (2nd) anniversary of the Effective Date; and the phrase “Renewal
Term” shall mean each consecutive twelve month period immediately following the Initial
Term, during which period this Agreement shall automatically renew on the same terms and
conditions hereof and without any further act on the part of either party; provided,
however, that in no event shall the term of this Agreement be renewed unless agreed
to by both Parties in writing prior to the thirtieth (30th) day immediately
preceding the last day of the Initial Term; or




(b) Termination Date. The Termination Date (as such phrase is defined in
Section 1.5 of this Agreement).



The period from the Effective Date to the earlier to occur of either the Expiration Date or
Termination Date shall be hereinafter referred to as the “Employment Term.”



1.4 Compensation and Benefits.



(a) Base Compensation. In consideration of the Services to be rendered to Company by
Executive and Executive’s covenants under this Agreement, Company agrees to pay Executive during
the Employment Term a salary at the annual rate of no less than Two Hundred Forty Thousand Dollars
($240,000)(the “Base Compensation”), less statutory deductions and withholdings, payable in
accordance with Company’s regular payroll practices. Notwithstanding the foregoing, for the first
the first consecutive twelve (12) calendar month period from the Effective Date, Executive’s Base
Compensation shall be paid by VIASPACE Inc., in the form of VIASPACE common stock at the [same rate
for Carl Kukkonen in place for the previous six months]. For the remainder of the Employment Term,
Executive’s Base Compensation will be paid in cash.



(b) Bonus. In addition to the Base Compensation, during the Employment Term,
Executive shall be entitled to such bonuses as may from time to time be determined by the Board
(the “Bonus Payments”).



(c) Benefits. Company intends to provide for its employees generally an employee
health and welfare benefit plan in which Executive will participate, provided that such plan may be
obtained at a reasonable cost as determined by Company’s Board.



(d) Vacation and Personal Leave. Executive shall be entitled to twenty (20) business
days paid time off for each twelve (12) consecutive calendar monthly period during the Employment
Term, to be taken in accordance with the vacation accrual schedule, if any, and carried over only
to the extent set forth or otherwise permitted in Company’s personnel policies or, if any, employee
handbook.



(e) Reimbursement of Company Business Expenses. Company shall within ninety (90) days
of its receipt from Executive of supporting receipts, to the extent required by applicable income
tax regulations and Company’s reimbursement policies, reimburse Executive for all out-of-pocket
business expenses reasonably and actually incurred by Executive in connection with his employment
hereunder and consistent with Company policies (the “Business Expenses”). Board approval shall be
required for any single expense exceeding $10,000 or for expenses exceeding in the aggregate
annually $[      ]. Reimbursement of any and all Business Expenses is conditioned on Executive
submitting his request to Company for reimbursement and supporting substantiation within [thirty
(30)] days of the date on which any such expenses shall have been incurred.



1.5 Termination of Agreement.



(a) Termination Date. Executive’s employment and this Agreement (except as otherwise
provided hereunder) shall terminate upon the first to occur of any of the following, at the time
set forth therefore (the “Termination Date”):




(i) Mutual Termination. At any time by the mutual written agreement of Company
and Executive;




(ii) Death or Disability. Immediately upon the death of Executive or a
determination by Company that Executive has ceased to be able to perform the essential
functions of his duties, with or without reasonable accommodation, for a period of not less
than ninety (90) consecutive days, due to a mental or physical illness or incapacity
(“Disability”) (termination pursuant to this Section being referred to herein as termination
for “Death or Disability”);




(iii) Voluntary Termination By Executive. Thirty (30) days following
Executive’s written notice to Company of his termination of employment; provided,
however, that Company may waive all or a portion of such notice period and
accelerate the effective date of such termination (termination pursuant to this Subsection
being referred to herein as “Voluntary” termination);




(iv) Termination For Cause By Company. Immediately following notice of
termination for “Cause” (as defined below)(with such notice describing the Cause with
reasonable specificity) given by Company and failure by Executive to Cure (as defined below)
if and to the extent Cure is otherwise expressly permitted under this subsection
(termination pursuant to this Subsection being referred to herein as termination for
“Cause”)(As used herein, “Cause” means (A) termination, at Company’s sole option,
immediately and without the right to Cure, based on Executive being named as a target or
subject of any grand jury investigation impaneled for, being convicted of or entering a plea
of guilty or nolo contendere for any crime constituting a felony in the jurisdiction in
which committed, any crime involving moral turpitude (whether or not a felony), (B) any act
or omission involving dishonesty or willful misconduct in the discharge of his duties under
this Agreement or that otherwise materially injures Company; (C) subject to applicable law,
if any, Executive’s substance abuse that in any manner materially interferes with the
performance of his duties and Executive’s failure to Cure; (D) Executive’s material breach
of this Agreement or any other agreement entered into with Company in connection with
Company’s confidential information, trade secrets or other property and Executive’s failure
to Cure the same or any other act or omission that constitutes a breach under any agreement
entered into by and between Company or any affiliate thereof and a third party;
(E) misconduct by Executive that has or could result in Company’s material discredit or
diminution in value and Executive’s failure to Cure the same; or (F) chronic absence from
work for reasons other than illness or Disability and Executive’s failure to Cure the
same.)(For purposes hereof the term “Cure” shall mean that conduct or refrain from conduct
that shall be required to remedy within thirty (30) days of any such notice thereof any act
or omission on the part of Executive that is the subject of the claim hereunder by Company
to terminate Executive for Cause; provided, however, that (I) Executive
shall have only one opportunity during the Employment Term to exercise such right to Cure,
(II) any such remedial conduct or refrain thereof shall be to Company’s reasonable
satisfaction, and (III) Company shall have the right to suspend Executive’s duties under
this Agreement during any such period.);




(v) Termination Without Cause By Company. Notwithstanding any other provision
in this Agreement to the contrary, including, but not limited to Section 1.3 above, upon and
coincident with any delivery by Company of its written notice of Executive’s termination of
employment under this Agreement for reasons other than Cause or for no reason;
provided, however, that if and to the extent Company determines to provide
less than thirty calendar days notice of its intent to terminate Executive (the “Optional
Notice Period”), then in such event the Severance Payments (as such phrase is defined below)
shall be extended by that number of days that the period between the delivery date of any
such notice and the Termination Date is less than such Optional Notice Period.
Notwithstanding the foregoing, if Company elects to provide an Optional Notice Period, then
at any time during such period, Company may elect to immediately either suspend, with no
reduction in pay or benefits, Executive from all or any part of his duties as set forth in
this Agreement (including, without limitation, Executive’s position as [CEO][President][CFO]
and his Services relating thereto) or terminate this Agreement in accordance with this
subsection (termination pursuant to this Subsection being referred to herein as termination
“Without Cause”) or in accordance with any other applicable subsection under this Section
1.5(a) if and to the extent grounds for any such determination should exist; or




(vi) Termination For Good Reason by Executive. Subject to the notice and cure
provisions described below, at the election of Executive for Good Reason; provided,
however, that any such termination on account of Good Reason shall occur in any
event not later than sixty (60) days following the date on which such event is claimed to
have occurred by Executive. “Good Reason” shall occur only upon (A) a material diminution
in Executive’s authority, duties or responsibility; (B) any other action or inaction that
constitutes a material breach by Company of this Agreement; or (C) a material change in
Executive’s Employment Base out of which or from which he is required to perform his
services under this Agreement (for purposes of this subsection, a material change shall mean
Executive’s Employment Base is relocated more than fifty (50) miles outside of the
Employment Base without Executive’s prior written consent; “Employment Base” shall mean Cobb
County, Georgia). Notwithstanding the foregoing, Executive’s right to terminate this
Agreement for Good Reason shall be conditioned upon and may in no event be exercised until
and unless Executive shall have provided Company written notice within thirty (30) days of
the initial existence of any such condition, upon notice of which Company shall thereafter
have thirty (30) days within which it may remedy the condition; provided, further, that in
no event shall travel (whether same-day, overnight, extended stay or otherwise) for or on
behalf of Company or any Affiliate thereof cause or otherwise constitute a material change
in Executive’s Employment Base and Executive shall have no right to terminate this Agreement
for Good Reason on account of such travel requirements.



(b) Other Remedies. Termination pursuant to Section 1.5(a)(iv) or 1.5(a)(vi) above
shall be in addition to and without prejudice to any other right or remedy to which Company or
Executive, respectively, may be entitled at law, in equity or otherwise under this Agreement.



1.6 Payment Upon Separation From Service.



(a) Voluntary Termination, Termination for Cause, or Termination for Death or
Disability. In the case of a termination of Executive’s employment by mutual agreement under
Section 1.5(a)(i) above, on account of Executive’s Death or Disability under Section 1.5(a)(ii)
above, or by Executive’s Voluntary termination under Section 1.5(a)(iii) above, or by Company for
Cause in accordance with Section 1.5(a)(iv) above, (i) Company shall pay to Executive (or his
estate or guardian, as the case may be) and Executive (or his estate or guardian, as the case may
be) shall be entitled to be paid the following as and to the extent the same shall have been earned
through the Termination Date: (A) in all such events, Base Compensation earned, but unpaid and any
Business Expenses so long as any such reimbursement request shall be submitted not later than
ninety (90) days following Executive’s Separation From Service; and (B) in the case of Death or
Disability, accrued, but unpaid Bonus Payments; accrued but unused vacation or personal leave days
to the extent convertible into cash under Company’s policies; and vested benefits under any
employee benefit or stock option plan or agreement; provided, however, that in no
event shall Executive be entitled to receive payment of, and Company shall have no obligation to
pay, any severance or similar compensation attributable to such termination. Company shall pay all
such amounts that are due and payable in cash within thirty (30) days of the Termination Date,
subsequent to any such payment, Company’s obligations under this Agreement shall immediately cease.



(b) Termination Without Cause by Company or For Good Reason by Executive.




(i) In General. Except as otherwise provided in Section 1.6, including, without
limitation, Section 1.6 (c) and (d) below, in the case of a termination of Executive’s
employment that constitutes a Separation from Service (as defined below) during the Initial
Term or any Renewal Term hereunder Without Cause in accordance with Section 1.5(a)(v) or for
Good Reason by Executive in accordance with Section 1.5(a)(vi) above,




(A) Base Compensation. Company shall pay, and Company shall continue to pay to
Executive (or, in the case of Death or Disability following the Termination Date,
his estate or guardian, as the case may be) his Base Compensation through the
Termination Date and thereafter for the Severance Period (as defined below);




(B) Health Benefits. Subject to the terms and conditions of any existing health and
welfare plan adopted by Company, Company shall extend to Executive and Executive
shall have the right to continue his and that of his eligible family members’
participation in and coverage under any such plans, with Company having the
obligation to either reimburse Executive or pay for the coverage premiums for the
duration of the Severance Period if and to the extent it had such an obligation
immediately prior to the Termination Date and is otherwise permitted by applicable
laws without further or additional expense to Company; provided,
however, that if Executive elects to continue his health benefits coverage
under COBRA, Company will pay COBRA premiums on behalf of the Executive or reimburse
the same to Executive, as determined by Company in its sole discretion, during the
Severance Period; except, however, that except as may otherwise be
required by applicable law, in no event shall Company have any such obligation under
this Subsection if he receives or is entitled to receive equivalent coverage and
benefits under the plans and programs of a subsequent employer or an employer of his
spouse, in which case Executive shall have an obligation to report to Company the
existence of any such offer or coverage, with any such participation and coverage
being paid or extended, as the case may be, on the same terms and conditions as was
made available immediately prior to his Separation From Service for the Severance
Period;




(C) Bonuses. Company shall pay to Executive (or, in the case of Death or Disability
following the Termination Date, his estate or guardian, as the case may be) his
accrued, but unpaid Bonus Payments;




(D) Expense Reimbursement. Company shall pay within 30 days of the Termination Date
to Executive (or, in the case of Death or Disability, his estate or guardian, as the
case may be) his unreimbursed Business Expenses pursuant to Section 1.4(e) hereof
incurred by Executive as of the Termination Date;




(E) Equity Compensation. Except as may otherwise be expressly stated to the
contrary in any applicable agreement or stock option plan, all unvested stock
options, restricted stock or other equity-based awards held by Executive shall
immediately vest; and




(F) Definitions. For purposes of this Agreement, the following phrases shall have
the meaning ascribed thereto:




(I) “Severance Period” shall mean that period beginning on Executive’s
Separation From Service and ending upon the date on which the Expiration Date would
have otherwise occurred but for the Termination Date; and




(II) “Severance Payment” shall mean the Base Compensation and such other
compensation for which Company has an obligation under this Agreement to pay during
the Severance Period and that is otherwise constitutes a severance payment within
the meaning of Code Section 409A.




(ii) Timing of Severance Payments.




(C) In General. Except as otherwise provided in this Section 1.6, any such
Severance Payments (as defined below) shall be payable in accordance with Company’s
normal payroll practices and subject to the tax withholding specified in Section
1.4(a) above, as full, final and complete satisfaction of such obligations under
this Agreement; provided, however, that Executive shall have no
further claims against Company for any further compensation whatsoever, other than
the payment of unreimbursed Business Expenses and the continuation of any employee
welfare benefits as may be and to the extent required by law.




(D) Severance Payments to Specified Employees. Notwithstanding any other provision
in this Agreement to the contrary, if Executive is considered a “Specified Employee”
(within the meaning of Code Section 409A(a)(2)(B)(i)) as of the date of any
Separation From Service, then any payment under this Agreement that would otherwise
be permitted under Treas. Reg. Section 1.409A-3(a)(1) may not be made to Executive
before the date that is six (6) months after the date of Executive’s Separation From
Service with Company or, if earlier than the end of such six month period,
Executive’s date of death. Company shall have the discretion to elect whether to
accumulate the amount to which Executive would otherwise be entitled to be paid
under this Section but for his classification as a Specified Employee and pay such
amount in a lump sum as of the first day of the seventh (7th) month
following the Separation From Service or if each payment to which Executive would be
otherwise entitled upon a Separation From Service is delayed by six months. The
amount of any such Severance Payment that is deferred under this subsection shall
accrue interest at the rate of eight percent (8%) until the same shall have been
paid in full.



(c) Payments Conditioned on Release of Claims. Unless it otherwise elects to waive any
such condition precedent, Company’s obligation to pay Executive with the Severance Payment, pay the
bonuses, continue the health benefits or vest the equity compensation as set forth in Sections
1.6(b)(i)(A), (B), (C) or (E), respectively (collectively, the Contingent Payments”), is contingent
upon Executive’s and Company’s execution of that certain Form of Release, a copy of which is
attached hereto and marked as Exhibit “C” (the “Release”). If Executive fails to sign the Release
within twenty-one (21) days of receipt of notice of termination pursuant to Section 1.5, or
subsequently rescinds the Release, Executive shall not be entitled to the Contingent Payments.



(d) WARN Act Offset. In the event that Executive’s termination Without Cause in
accordance with Section 1.5 above is covered by the Worker Adjustment Retraining Notification Act
or any law enacted by a state of the United States of America having a similar purpose (the “WARN
Acts”) at the time of Executive’s termination, or is deemed to be covered by a WARN Act
retrospectively within 90 days after Executive’s termination, the amount of any Severance Payment
or benefit continuation Executive is entitled to receive pursuant to Section 1.6 shall be reduced
by an amount equal to any payments Company is required to provide Executive under any WARN Act or
by the amount of pay Executive receives during any portion of a WARN Act’s notice period where
Executive does not perform any work for Company.



2. EXECUTIVE’S REPRESENTATIONS AND WARRANTIES.



Executive represents and warrants to Company that (a) this Agreement is valid and binding upon and
enforceable against him in accordance with its terms, (b) Executive is not bound by or subject to
any contractual or other obligation that would be violated by his execution or performance of this
Agreement, including, but not limited to, any non-competition agreement presently in effect, and
(b) Executive is not subject to any pending or, to Executive’s knowledge, threatened claim, action,
judgment, order, or investigation that could adversely affect his ability to perform his
obligations under this Agreement or the business reputation of Company. Executive has not entered
into, and agrees that he will not enter into, any agreement either written or oral in conflict
herewith.




	4.	 	MISCELLANEOUS.





4.1 Notices. All notices, requests, and other communications hereunder must be in writing and
will be deemed to have been duly given only if delivered personally against written receipt or by
facsimile transmission with answer back confirmation or mailed (postage prepaid by certified or
registered mail, return receipt requested) or by overnight courier to the parties at the following
addresses or facsimile numbers:




If to the Executive, to:




If to Company, to the Board at the following address:




Attn: Board of Directors




With copy to:




Frank McDaniel, Esq.




McDaniel Law Group, PC




PO Box 681235




Marietta, Georgia 30068-0021



All such notices, requests and other communications will (a) if delivered personally to the
addresses as provided in this Section be deemed given upon delivery, (b) if delivered by facsimile
transmission to the facsimile number as provided in this Section be deemed given upon receipt, and
(c) if delivered by mail in the manner described above to the addresses as provided in this Section
be deemed given upon receipt (in each case regardless of whether such notice, request, or other
communication is received by any other person to whom a copy of such notice, request or other
communication is to be delivered pursuant to this Section). Any party from time to time may change
its address, facsimile number, or other information for the purpose of notices to that party by
giving written notice specifying such change to the other parties hereto.



4.2 Authorization to be Employed. This Agreement, and Executive’s employment hereunder, is
subject to Executive providing Company with legally required proof of Executive’s authorization to
be employed in the United States of America.



4.3 Entire Agreement. This Agreement, together with the Statement (both of which being
entered into by and between Company and Executive of even date herewith), supersedes any and all
prior discussions and agreements between the parties with respect to the subject matter hereof and
contains the sole and entire agreement between the parties hereto with respect thereto.



4.4 Survival. The parties hereby acknowledge and agree that, notwithstanding any provision of
this Agreement to the contrary, their respective obligations pursuant to Sections 1.6 2, 3 and the
Statement shall survive the termination of this Agreement, the Employment Term and/or the
Executive’s employment with Company.



4.5 Waiver. Any term or condition of this Agreement may be waived at any time by the party
that is entitled to the benefit thereof, but no such waiver shall be effective unless set forth in
a written instrument duly executed by or on behalf of the party waiving such term or condition. No
waiver by any party hereto of any term or condition of this Agreement, in any one or more
instances, shall be deemed to be or construed as a waiver of the same or any other term or
condition of this Agreement on any future occasion. All remedies, either under this Agreement or
by law or otherwise afforded, will be cumulative and not alternative.



4.6 Amendment. This Agreement may be amended, supplemented, or modified only by a written
instrument duly executed by or on behalf of each party hereto.



4.7 Recovery of Attorney’s Fees. In the event of any litigation arising from or relating to
this Agreement, the prevailing party in such litigation proceedings shall be entitled to recover,
from the non-prevailing party, the prevailing party’s reasonable costs and attorney’s fees, in
addition to all other legal or equitable remedies to which it may otherwise be entitled.



4.8 No Third Party Beneficiary. The terms and provisions of this Agreement are intended
solely for the benefit of each party hereto and Company’s successors or assigns, and it is not the
intention of the parties to confer third-party beneficiary rights upon any other person.



4.9 No Assignment; Binding Effect. This Agreement shall inure to the benefit of any
successors or assigns of Company. Company may assign this agreement to a controlled subsidiary (as
such term is defined under the final regulations promulgated pursuant to Internal Revenue Code
Section 409A). Executive shall not be entitled to assign his obligations under this Agreement.



4.10 Headings. The headings used in this Agreement have been inserted for convenience of
reference only and do not define or limit the provisions hereof.



4.11 Severability. Company and Executive intend all provisions of this Agreement to be
enforced to the fullest extent permitted by law. Accordingly, if a court of competent jurisdiction
determines that the scope and/or operation of any provision of this Agreement is too broad to be
enforced as written, Company and Executive intend that the court should reform such provision to
such narrower scope and/or operation as it determines to be enforceable. If, however, any
provision of this Agreement is held to be illegal, invalid, or unenforceable under present or
future law, and not subject to reformation, then (a) such provision shall be fully severable, (b)
this Agreement shall be construed and enforced as if such provision was never a part of this
Agreement, and (c) the remaining provisions of this Agreement shall remain in full force and effect
and shall not be affected by illegal, invalid, or unenforceable provisions or by their severance.



4.12 Governing Law and Jury Trial. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA APPLICABLE TO CONTRACTS EXECUTED AND PERFORMED IN
SUCH STATE WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS PRINCIPLES. BECAUSE DISPUTES ARISING IN
CONNECTION WITH COMMERCIAL MATTERS, INCLUDING EMPLOYMENT AGREEMENTS, ARE MOST QUICKLY AND
ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND
FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES (IF
ANY) BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST
COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL
RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER
ARISING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE PARTIES ARISING OUT OF, CONNECTED WITH, RELATED
TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS EMPLOYMENT
AGREEMENT OR MATTERS RELATED HERETO.



4.13 Jurisdiction. The parties hereby consent to the personal jurisdiction and venue of any
court physically located within the County of Cobb, State of Georgia, United States of America, in
connection with any legal or equitable action between the parties arising out of or in connection
with this Agreement.



4.14 Counterparts. This Agreement may be executed in any number of counterparts and by
facsimile, each of which will be deemed an original, but all of which together will constitute one
and the same instrument.



4.15 Opportunity to Obtain Counsel. In connection with the preparation of this Agreement,
Executive acknowledges and agrees that: (a) this Agreement was prepared by legal counsel to Company
(the “Law Firm”) solely on behalf of Company and not on behalf of Executive; (b) Executive has been
advised that his interests may be opposed to the interests of Company and, accordingly, the Law
Firm’s representation of Company in the preparation of this Agreement may not be in the best
interests of Executive; and (c) Executive has been advised to retain separate legal counsel.
Executive warrants and agrees that he has had a reasonable opportunity to obtain independent legal
counsel with regard to the terms and conditions of this Agreement, to include, without limitation,
advice regarding compliance with Code Section 409A, for which Executive makes no reliance on
Company or Law Firm, and has read and fully understands the terms and conditions of this Agreement.
If Executive elects not to consult with any such counsel, he has done so freely and of his own
volition. By signing this Agreement, Executive is affirming that he has freely and of Executive’s
own volition acknowledged and agreed to all terms and conditions contained in this Agreement.



4.16 Construction and Interpretation. Should any provision of this Agreement require judicial
interpretation, the parties hereto agree that the court interpreting or construing the same shall
not apply a presumption that the terms hereof shall be more strictly construed against one party by
reason of the rule of construction that a document is to be more strictly construed against the
party that itself, or through its agent, prepared the same, and it is expressly agreed and
acknowledged that Company and Executive and each of his and its representatives, legal and
otherwise, have participated in the preparation hereof.



4.17 Code Section 409A. Notwithstanding anything to the contrary contained herein, this
Agreement is intended to, but no assurance is made by Company or Law Firm that the provisions
hereof, satisfy the requirements of Code Section 409A. Accordingly, all provisions herein, or
incorporated by reference, shall be construed and interpreted to satisfy the requirements of Code
Section 409A. Further, for purposes of Code Section 409A, each payment of compensation under this
Agreement shall be treated as a separate payment of compensation. Any reimbursements or in-kind
benefits provided under this Agreement shall be made or provided in accordance with the
requirements of Code Section 409A, including, where applicable, the requirement that (a) any
reimbursement is for expenses incurred during the period of time specified in this Agreement, (b)
the amount of expenses eligible for reimbursement, or in kind benefits provided, during a calendar
year may not affect the expenses eligible for reimbursement, or in kind benefits to be provided, in
any other calendar year, (c) the reimbursement of an eligible expense will be made no later than
the last day of the calendar year following the year in which the expense is incurred, and (d) the
right to reimbursement or in kind benefits is not subject to liquidation or exchange for another
benefit. All references to “Separation From Service” contained in this Agreement shall mean
“separation from service” as determined in accordance with Treasury Regulation Section 1.409A-1(h).



IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the date
first set forth above.




COMPANY




[      ] Inc.



	 
	Signature:

	 

	Printed Name:

	 

	Title:

	 

	EXECUTIVE

	Signature:

	 

	Printed Name:







30





Exhibit “A”



VIASPACE GREEN ENERGY, INC.




STATEMENT

OF ADDITIONAL TERMS AND CONDITIONS

RELATING TO EMPLOYMENT AGREEMENT




THIS STATEMENT OF ADDITIONAL STANDARD TERMS AND CONDITIONS RELATING TO EMPLOYMENT AGREEMENT (the
“Agreement”) is made a part of and incorporated into that certain Employment Agreement made and
entered into of even date herewith by and between VIASPACE Green Energy, Inc., a British Virgin
Island company (“Company”), and Sung H. Chang, a resident of the State of Georgia, United States of
America (“Executive”)(the “Employment Agreement”). Except as otherwise defined herein, all
capitalized terms and phrases shall have the meaning ascribed thereto in the Employment Agreement.
Company and Executive are sometimes collectively referred to in this Agreement as the “Parties.”



VIASPACE GREEN ENERGY, INC.



Authorized Signature:       



Printed Name:       



Position: Authorized Officer



	 	 	 
	
 
	 	Address:
	
 
	 	 
	EXECUTIVE

	 	

	
 
	 	 
	
 
	 	 
	Signature:       

	 	—
	
 
	 	 
	Printed Name: Sung H. Chang

	 	

Telephone No.:
	
 
	 	Facsimile No.:






TERMS AND CONDITIONS




In consideration of the benefits each Party receives as a result of and under the Employment
Agreement and relationship created thereby, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be
legally bound by this Agreement, hereto hereby agree as follows:



1. Definitions. For purposes of this Agreement, the following terms and phrases shall have
the meaning ascribed thereto:



“Affiliate” means, with respect to a particular party, a person, directly or indirectly, whether
before, as of or following the Effective Date, that controls, is controlled by or is under common
control with such party. For purposes of this definition, “control” shall mean beneficial
ownership (direct or indirect) of more than 50% of the outstanding voting stock or other voting
rights entitled to elect directors (or in the case of an entity that is not a corporation the
election or appointment of the corresponding managing authority); provided,
however, that in any country where the local law shall not permit foreign equity
participation of more than 50%, then an “Affiliate,” as to Licensee shall further include any
company in which the Licensee shall own or control, directly or indirectly, the maximum percentage
of such outstanding stock or voting rights permitted by local law or otherwise exercises control
over the management of such company.



“Company Products” shall mean any and all (i) Developments made, conceived or created by Executive
and relating to the Restricted Business during the term of this Agreement and (ii) Work Products.



“Confidential Information” shall mean any and all proprietary and confidential technical and
nontechnical data, information, agreements, documents or other property of Company or any Affiliate
thereof, other than “Trade Secrets,” and Proprietary Rights thereto, which is of tangible or
intangible value to Company or any Affiliate thereof and is not public information or is not
generally known or available to Company’s competitors, but is known only to Company or its
Affiliates and their employees, independent contractors or agents to whom it must be confided in
order to apply it to the uses intended, including, without limitation, all business methods,
practices and concepts; business and financial information and records, including, without
limitation, accounting records, tax returns, financial statements, projections, forecasts or other
budgets, other financial data or plans, business plans and strategies; product plans, customer
lists and other customer-related information; vendor or supplier lists and other vendor or
supplier-related information; computer or data base files; passwords or other access codes;
software programs, language, algorithms, codes or “fingerprints”; reports; analyses; notes;
interpretations; formulae, processes, technology, inventions, patents, and the Proprietary Rights
thereto; the terms of this Agreement and any other agreement between the Parties; Company Products
and Moral Rights.



“Developments” shall mean any ideas, concepts, invention, modification, discovery, design,
development, improvement, process, work of authorship, algorithm, documentation, formula, data,
technique, know-how, source code and object code and other computer codes and software programs,
technology, research, know-how and other Intellectual Property any and all Proprietary Rights
therein or thereto (whether or not patentable or registerable under copyright, trademark or similar
statutes or subject to analogous protection); provided, however, that in no event
shall the term “Developments” include the Excluded Property.



“Excluded Property” shall mean those items of personal property either owned by Executive or to
which Executive has exclusive rights and listed on Schedule “1,” entitled “Excluded Property,”
which is attached hereto and made a part hereof.



“Intellectual Property” shall mean all of the following in any jurisdiction throughout the world:
(a) all inventions (whether patentable or unpatentable and whether or not reduced to practice), all
improvements thereto, and all patents, patent applications, and patent disclosures, together with
all reissuances, continuations, continuations-in-part, revisions, extensions, and reexaminations
thereof, (b) all trademarks, service marks, trade dress, logos, slogans, trade names, corporate
names, Internet domain names, and rights in telephone numbers, together with all translations,
adaptations, derivations, and combinations thereof and including all goodwill associated therewith,
and all applications, registrations, and renewals in connection therewith, (c) all copyrightable
works, all copyrights, and all applications, registrations, and renewals in connection therewith,
(d) all mask works and all applications, registrations, and renewals in connection therewith, (e)
all trade secrets and confidential business information (including ideas, research and development,
show-how, know-how, formulas, compositions, manufacturing and production processes and techniques,
technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost
information, and business and marketing plans and proposals), (f) all computer software (including
source code, executable code, data, databases, and related documentation), (g) all material
advertising and promotional materials, (h) all other proprietary rights, and (i) all copies and
tangible embodiments thereof (in whatever form or medium).



“Moral Rights” shall mean all rights of paternity, integrity, disclosure and withdrawal and any
other rights that may be known as or referred to as “moral rights,” “artist’s rights,” “droit moral
rights,” or the like.



“Person” shall mean any individual, partnership, limited partnership, limited liability
partnership, limited liability company, corporation, trust, association, non-profit or charitable
organization or other entity, or an unincorporated organization, a governmental entity or any
department or agency thereof.



“Proprietary Rights” shall mean all patent rights, copyrights, sui generis rights, trade secrets,
mask work rights, and other Intellectual Property rights throughout the world.



“Restricted Business” shall mean any endeavors, directly or indirectly, in the (a) relating to the
use of grasses as a source of or for fuel or energy; or (b) the use of art or frames relating
thereto; or (c) any other effort or enterprise undertaken by Company or any Affiliate thereof and
approved by the Board during the Employment Term; and (d) any other activity, effort or enterprise
relating thereto, including, without limitation, development, research, making, manufacturing,
marketing, promotion, license, sale, buying, importation, exportation, or other commercialization
efforts or the licensing or sublicensing of any such activities, efforts or enterprises.



“Trade Secrets” shall mean information, including, but not limited to, any and all Intellectual
Property, Developments, Work Product and any and all other Confidential Information and Proprietary
Rights thereto, of Company or any Affiliate thereof that: (a) derives economic value, actual or
potential, from not being generally known to, and not being readily ascertainable by proper means
by, other persons who can obtain economic value from its disclosure or use; and (b) is the subject
of efforts that are reasonable under the circumstances to maintain its secrecy (to the extent that
applicable law mandates a definition of “trade secret” inconsistent with the foregoing definition,
then the foregoing definition shall be construed in such a manner as to be consistent with the
mandated definition under applicable law).



“Work Product” shall mean all of Executive’s right, title, and interest in and to any and all
Developments (and all Proprietary Rights with respect thereto), whether or not patentable or
registerable under copyright or similar statutes, that was or is developed, made, conceived or
reduced to practice or learned by Executive, either alone or jointly with others, during the period
of Executive’s employment or within twelve (12) months following the Termination Date.



2. Restrictive Covenants.



(b) Nondisclosure. Executive acknowledges that he may be exposed to certain Confidential
Information and Trade Secrets and the Proprietary Rights thereto during the Employment Term, and
his unauthorized use or disclosure of such information, data or rights could cause immediate and
irreparable harm to Company. Accordingly, except to the extent that he is required to use such
property, information, technology or data to perform his obligations as an employee of Company,
Executive agrees that he shall not (and shall take full responsibility for ensuring that none of
his agents), without the express and duly authorized written consent of Company, redistribute,
market, publish, disclose or divulge to any other Person, or use or modify for use, directly or
indirectly in any way for any Person (i) any of Company’ Confidential Information and Proprietary
Rights thereto during his Employment Term and for a period of three (3) years immediately
thereafter; and (ii) any of Company’ Trade Secrets and Proprietary Rights thereto at any time
during which such information shall constitute a Trade Secret (whether before, during or after
termination of the Employment Term).



(b) Exception to Confidentiality Obligation. The confidentiality obligations hereunder shall
not apply to information that can be demonstrated by Executive to:




(vi) have been developed independently by or known to Executive prior to his first
having become employed with Company, whether or not under this Agreement, and not otherwise
assigned, transferred or otherwise conveyed to Company under this Agreement or any other
agreement;




(vii) not have been acquired, directly or indirectly, by Executive from the Company or
from a third party under an obligation of confidence and limited use;




(viii) have been rightfully received by Executive in accordance with this Agreement
after disclosure to Company from a third party who did not require Executive to hold it in
confidence or limit its use and who did not acquire it, directly or indirectly, from the
Company under a continuing obligation of confidence;




(ix) have been in the public domain as of the date of this Agreement, or comes into the
public domain during the term of this Agreement through no fault of Executive; or




(x) to be required to be disclosed by a governmental or other regulatory body or by
action of law.



(d) Limitation on Solicitation of Customers and Personnel. During the Employment Term and for
a period of two (2) years immediately thereafter, Executive shall not, directly or indirectly,
alone or in conjunction with any other Person, (i) solicit any actual or actively sought
prospective client or customer of Company with whom or which Executive had material contact during
the Employment Term or with respect to whom or which Executive was provided Confidential
Information by Company during the Employment Term (an “Company Customer”) for the purpose of
providing such Company Customer products or services that are substantially similar to or
competitive with the Restricted Business, (ii) solicit any employee, other personnel or independent
contractor of Company (a “Protected Person”) for the purpose of encouraging such Protected Person
to sever an employment, contractual or other relationship with Company or (iii) hire or otherwise
retain a Protected Person to perform services of a nature substantially similar to that which such
Protected Person performed for Company within a one (1) year period prior to any such hiring or
engagement.



(e) Refrain from Competitive Activities. During the Employment Term and for a period
terminating two years after termination of employment, Executive, without Company’s prior written
permission, shall not for any reason whatsoever, (i) enter into the employment of or render or
perform any services, directly or indirectly, to any individual or other person, firm or
corporation engaged in the Restricted Business; or (ii) engage, directly or indirectly, in the
Restricted Business, whether as an individual, partner, shareholder, creditor, director, officer,
principal, agent, employee, trustee, consultant, advisor or in any other relationship or capacity.



10. Assignment of Company Products.



(a) Company owns and shall own and Executive hereby agrees to assign and assigns to Company
any and all Company Products, to the fullest extent allowable by law, and Executive shall promptly
disclose such Company Property to Company. If Executive uses or discloses its own or any third
party’s confidential information or Intellectual Property when acting within the scope of its
employment or engagement or otherwise on behalf of Company, Company will have and Executive hereby
grants Company a perpetual, irrevocable, worldwide, royalty-free, non-exclusive, sublicensable
right and license to exploit and exercise all such confidential information and Intellectual
Property rights.



(b) Executive further acknowledges that all original works of authorship that are made by him
(solely or jointly with others) during the term of Executive’s employment or engagement with
Company and that are within the scope of is employment or engagement and protectable by copyright
are “works made for hire,” as that term is defined in the United States Copyright Act (17 U.S.C. §
101).



(c) To the extent Executive retains any such Moral Rights under applicable law, Executive
hereby waives such Moral Rights and consents to any action with respect to such Moral Rights by or
authorized by Company and specifically grants to Company the right to alter such Company Products.
Executive will confirm any such waivers and consents from time to time as requested by Company.



11. Enforcement of Proprietary Rights.



(a) Executive will assist Company in every proper way to obtain and from time to time enforce
United States and foreign Proprietary Rights relating to Company Products in any and all countries.
To that end, Executive will execute, verify, and deliver such documents and perform such other
acts (including appearances as a witness) as Company may reasonably request for use in applying
for, obtaining, perfecting, evidencing, sustaining, and enforcing such Proprietary Rights and the
assignment thereof. In addition, Employee will execute, verify, and deliver assignments of such
Proprietary Rights to Company or its designee. Executive’s obligation to assist Company with
respect to Proprietary Rights relating to such Company Products in any and all countries shall
continue beyond the termination of Executive’s employment or engagement, but Company shall
compensate Executive at a reasonable rate after termination of its employment or engagement for the
time actually spent by Executive at Company’s request on such assistance.



(b) In the event Company is unable for any reason, after reasonable effort, to secure
Executive’s signature on any document needed in connection with the actions specified in the
preceding paragraph, Executive hereby irrevocably designates and appoints Company and its duly
authorized officers and agents as its agent and attorney in fact, coupled with an interest, to act
for and on its behalf to execute, verify, and file any such documents and to do all other lawfully
permitted acts to further the purposes of the preceding paragraph thereon with the same legal force
and effect as if executed by Executive. Executive hereby waives and quitclaims to Company any and
all claims, of any nature whatsoever, that Executive now or may hereafter have for infringement of
any Proprietary Rights assigned hereunder to Company.



12. No Conflicting Obligation. Executive represents that its performance of all the terms
of this Agreement and as an employee or consultant of Company does not and will not breach any
agreement between it and any other employer, person or entity. Executive has not entered into, and
it agrees it will not enter into, any agreement either written or oral in conflict herewith.
Executive shall, during the term of its employment or engagement, diligently promote the interests
of Company. Executive shall serve Company to the best of its ability, faithfully, honestly,
diligently and efficiently.



13. Return of Company Documents. When Executive’s employment with or engagement by Company
ceases for any reason (or no reason), Executive will promptly deliver to Company all drawings,
notes, memoranda, specifications, devices, formulas, and documents, together with all copies
thereof, and any other material (and regardless of whether any of the foregoing is kept in physical
or electronic form) containing or disclosing any Confidential Information and Trade Secrets,
including, without limitation, Company Products and Proprietary Rights relating thereto of Company.
Executive further agrees that any property situated on Company’ premises and owned by Company,
including disks and other storage media, filing cabinets or other work areas, is subject to
inspection by Company personnel at any time with or without notice.



14. Acknowledgment. Executive acknowledges and agrees that the covenants set forth in this
Agreement are reasonable given Company’ need to protect its Trade Secrets and Confidential
Information, particularly given the complexity and competitive nature of the technology industry,
and that Executive has sufficient resources to find alternative, commensurate employment in his
respective fields of expertise that would not violate this Agreement.



15. Remedies; Damages, Injunctions and Specific Performance. It is expressly understood and
agreed that the covenants, agreements and services to be rendered and performed by Executive under
this Agreement shall survive any termination or expiration of this Agreement, whether voluntary or
involuntary, with or without cause, and are special, unique, and of an extraordinary character. In
the event of any default, breach or threatened breach by Executive of this Agreement, Company shall
be entitled, if it so elects, to institute and prosecute proceedings in any court of competent
jurisdiction, either at law or in equity, and shall be entitled to such relief as may be available
to it pursuant hereto, at law or in equity, including, without limitation: (a) damages for any
breach of this Agreement; (b) an order for the specific performance hereof by Executive; or (c) an
order enjoining Executive from breaching such provisions, without bond and without prejudice to any
other rights and remedies that Company may have for a breach of this Agreement.



16. Tolling. Executive hereby expressly acknowledges and agrees that in the event the
enforceability of any of the terms of this Agreement shall be challenged in court or pursuant to
arbitration and Executive is not enjoined (either temporarily or permanently) from breaching any of
the restraints set forth in this Agreement, then if a court of competent jurisdiction or
arbitration panel finds subsequently that the challenged restraint is enforceable, the time period
of the restraint shall be deemed tolled upon the filing of the lawsuit challenging the
enforceability of the restraint until the dispute is finally resolved and all periods of appeal
have expired.



10. Ancillary Agreement. This Agreement shall be construed as an agreement ancillary to
that certain Employment Agreement entered into of even date herewith and by and among Company, and
Executive (to which this Agreement is attached as Exhibit A (the “Employment Agreement”), and the
existence of any claim or cause of action of Executive against Company, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by Company of this
Agreement.



11. Binding Effect and Assignability. The rights and obligations of Company under this
Agreement shall inure to the benefit of and shall be binding upon any affiliate, successor or
assign of or to the business of Company. Neither this Agreement nor any rights or obligations of
Executive shall be transferable or assignable by Executive without Company’s prior written consent,
and any attempted transfer or assignment hereof by Executive not in accordance herewith shall be
null and void.



12. Severability. All Sections, subsections, paragraphs, terms and provisions of this
Agreement are severable, and the unenforceability or invalidity of any of the terms, provisions,
Sections, subsections or paragraphs of this Agreement shall not affect the validity or
enforceability of the remaining terms, provisions, Sections, subsections or paragraphs of this
Agreement, but such remaining terms, provisions, Sections, subsections or paragraphs shall be
interpreted and construed in such a manner as to carry out fully the intention of the Parties.



13. Captions and Counterparts. The Section headings in this Agreement are for convenience
of reference only and shall not affect the meaning or interpretation hereof. This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an original, but all of
which shall together constitute one and the same instrument.



14. Notices. Any notice or other communication required or permitted hereunder shall be in
writing and shall be deemed to have been duly given on the date of service if personally served or
if telecopied (if telecopied on a business day and during business hours at the place of receipt
and if receipt is confirmed) or three (3) days after mailed if mailed by reputable international
overnight delivery service, postage prepaid and in any event addressed to the address set forth in
the signature clause to this Agreement or to such other address as shall be designated by written
notice issued pursuant hereto.



15. Recovery of Attorney’s Fees. In the event of any litigation arising from or relating
to this Agreement, the prevailing party in such litigation proceedings shall be entitled to
recover, from the non-prevailing party, the prevailing party’s reasonable costs and attorney’s
fees, in addition to all other legal or equitable remedies to which it may otherwise be entitled.



16. Waiver. The waiver by any party to this Agreement of a default or breach of any
Section, subsection or provision of this Agreement shall not operate or be construed as a waiver of
any prior or subsequent default or breach of the same or of a different Section, subsection or
provision by any party hereto.



17. Governing Law and Waiver of Jury Trial. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA, UNITED STATES OF AMERICA APPLICABLE
TO CONTRACTS EXECUTED AND PERFORMED IN SUCH STATE WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS
PRINCIPLES. BECAUSE DISPUTES ARISING IN CONNECTION WITH COMMERCIAL MATTERS, INCLUDING EMPLOYMENT
AGREEMENTS, ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE
PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE
PARTIES DESIRE THAT THEIR DISPUTES (IF ANY) BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS.
THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, OR
PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE BETWEEN
THE PARTIES ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS EMPLOYMENT AGREEMENT OR MATTERS RELATED HERETO.



18. Entire Agreement. This Agreement, together with the Employment Agreement to which this
Agreement is attached as Exhibit A and entered into between the Company, and Executive, contains
the complete agreement concerning the employment arrangement between Company and Executive as of
the date hereof.



19. Construction and Interpretation. Should any provision of this Agreement require
judicial interpretation, the parties hereto agree that the court interpreting or construing the
same shall not apply a presumption that the terms hereof shall be more strictly construed against
one party by reason of the rule of construction that a document is to be more strictly construed
against the party that itself, or through its agent, prepared the same, and it is expressly agreed
and acknowledged that Company and Executive and each of his and its representatives, legal and
otherwise, have participated in the preparation hereof.



EXHIBIT B




MUTUAL RELEASE AGREEMENT

IN CONNECTION WITH TERMINATION

OF EMPLOYMENT [WITHOUT CAUSE]

[FOR GOOD REASON]




THIS RELEASE AGEEMENT IN CONNECTiON WITH TERMINATION OF EMPLOYMENT [WITHOUT CAUSE][FOR GOOD
REASON] (the “Release”) is made and entered into as of the        day of        200       (the “Effective
Date”), by and between       , a resident of the State of [      ] (“Executive”) and       ,
Inc., (“Company”), a        corporation. Unless otherwise defined herein, capitalized terms and
phrases shall have the meaning ascribed thereto in the Employment Agreement (as defined below).



W I T N E S S E T H:




WHEREAS, Executive and Company entered into that certain Executive Employment Agreement dated
as of the        day of        20       (together with the Statement, the “Employment Agreement”);



WHEREAS, [Company][Executive] has determined to terminate the Employment Agreement and
Executive’s employment thereunder [without Cause][for Good Reason] (the “Termination”);



WHEREAS, following the Termination Date, Executive is entitled to be paid the Severance
Payment, but only upon and following his execution of this Release; and



WHEREAS, based on the foregoing, Company has prepared this Release for Executive’s review and
execution, subsequent to which and upon and all terms and conditions hereof becoming effective,
Executive will thereafter become entitled to be paid the Severance Payments as and to the extent
the same are provided under the Employment Agreement.



NOW, THEREFORE, in consideration of the mutual promises and undertakings contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:



1. Severance Payments. Subject to and conditioned upon this Release becoming fully
effective in all respects following the Termination Date, Company shall pay to Executive the
Contingent Payments as and to the extent the same are provided under the Employment Agreement.
Notwithstanding any provision of this Release to the contrary, in no event shall this Release have
any effect on (a) D&O Claims (as defined below) to or on which Executive may be entitled to rely;
(b) Claims (as defined below) against Executive for breach of fiduciary duty to Company or any
Affiliate thereof, act or omission constituting gross negligence, fraud or violation of any
applicable rule, regulation or law, or which Executive is not otherwise entitled to indemnification
under either the governing documents for Company or any Affiliate thereof or applicable law; or (c)
either party’s Claims based on acts or omissions occurring after the date hereof in breach of the
Statement or any term or condition of the Employment Agreement if such term or condition survived
the Termination of such Employment Agreement, with the Statement and such surviving terms and
conditions of the Employment Agreement continuing to be enforceable against the parties thereto for
the applicable period of limitations; or (d) Claims by Sung H. Chang against Company or any
Affiliate thereof based on or arising under the Share Purchase Agreement entered into by and
between VIASPACE Inc and Sung H. Chang dated as of the 16th day of April, 2010, and the
Security Documents as defined under that certain Secured Promissory Note issued in favor of Sung H.
Chang as of the        day of May 2010.



2. Executive Releases, Waiver, and Covenant Not to Sue.



(c) Release. Except as otherwise provided in Section 1, of this Release, as of and coincident
with the Effective Date, Executive hereby and forever releases and discharges Company and Company’s
shareholders, officers, directors, affiliates, agents, successors, assigns and insurers
(collectively, the “Company Released Parties”) from any and all Claims (other than D&O Claims) he
has or may have from the beginning of time to the Effective Date, including, without limitation,
any and all Claims arising under or relating to his Employment Agreement, Stock Option Agreement or
any termination thereof or rights thereunder or to any other compensatory-related Claims (the
“Executive Claims”). The foregoing release shall constitute a complete and general release of all
such Executive Claims, a waiver of such Claims and a covenant not to sue thereon, and Executive
shall be deemed to have fully, finally, and forever settled, discharged, released, waived, and
abandoned any and all Executive Claims he had, may have had, has or may have, and the foregoing
release shall in all respects and in any event and in all cases be deemed to release each of the
Company Released Parties from any injury, damage, liability, responsibility, or obligation
Executive may have suffered with respect to the Executive Claims.




[COMPANY SHALL HAVE THE RIGHT TO MAKE SUCH CHANGES TO THIS FORM OF RELEASE AS MAY BE
NECESSARY AT THE TIME OF ITS EXECUTION TO CONFORM THE OBJECTIVES OF THIS RELEASE TO
APPLICABLE LAWS, INCLUDING, WITHOUT LIMITATION, THE LAWS OF ANY STATE OF THE UNITED STATES
(E.G., RELATING TO THE RELEASE OF UNKNOWN OR CONTINGENT CLAIMS), THE FEDERAL LAWS OF THE
UNITED STATES (E.G., RELATING TO THE RELEASE OF CLAIMS UNDER ADEA) OR THE BRITISH VIRGIN
ISLANDS]



(d) Definition. For purposes of this Release, the following terms and phrases shall have the
meaning ascribed thereto:




(j) “Claim” shall mean any and all causes of action, actions, affirmative defenses,
judgments, liens, indebtedness, damages, losses, claims, liabilities and demands of every
kind and character, whether known or unknown, suspected or unsuspected, existing or
prospective, from the beginning of time through and including the Termination Date,
including, without limitation, any and all claims, including claims based on, arising under
or otherwise relating to the Civil Rights Act of 1964, the Employee Retirement Income
Security Act of 1974, the Age Discrimination in Employment Act of 1967 (“ADEA”), the
Americans with Disabilities Act, the Vietnam Era Veterans Readjustment Act, all other
federal or state statutes regulating military service leaves, and all amendments thereof or
any other relevant or potentially applicable state and federal statutes; past wages or
salaries, emotional distress, personal injuries or damages, disability insurance or other
benefits (except vested retirement benefits), violation of any express or implied agreement,
written or verbal, and any common law duty, including claims for attorney fees.




(iii) “D&O Claims” means any Claims Executive may be entitled to assert, on
which Executive may rely or to which Executive may be entitled for or on account of which
relate to his having served Company or any Affiliate thereof as a director, officer or
employee, as the case may be, whether any such Claim arises under a written agreement, the
articles or certificate of incorporation, bylaws or any other governing document, applicable
law or otherwise, including, without limitation, any and all rights to indemnification or
policies of insurance policy that are intended for the protection or defend of persons
acting in any such capacity.



(e) No Admission. Executive acknowledges that this Release reflects the settlement of the
Executive Claims that are denied and contested, and agrees that the settlement reflected by this
Release shall not be construed as an admission of liability, guilt or innocence of Company.



(f) Covenant Not to Sue. Executive agrees that he will never institute any action for
suit-at-law or action against all or any one of the Company Released Parties, nor institute,
prosecute, or in any way aid in the institution or prosecution of any Executive Claim for damages,
costs, loss of services, expenses, or compensation for or on account of any damage, loss or injury,
either to person or property or both, whether developed or undeveloped, resulting to or to result,
known or unknown, past, present, or future, arising out of any Executive Claim that is, is to be or
has been released under Release.



5. Company Releases, Waiver and Covenant Not to Sue.



(d) Release. Except as otherwise provided in Section 1, of this Release, as of and coincident
with the Effective Date, Company hereby and forever releases and discharges Executive from any and
all Claims it has or may have from the beginning of time to the Effective Date, including, without
limitation, any and all Claims arising under or relating to Executive’s Employment Agreement, Stock
Option Agreement or any termination thereof or rights thereunder or to any other
compensatory-related Claims (the “Employment-Related Claims”). The foregoing release shall
constitute a complete and general release of all such Employment-Related Claims, a waiver of such
Claims and a covenant not to sue thereon, and Company shall be deemed to have fully, finally, and
forever settled, discharged, released, waived, and abandoned any and all Employment-Related Claims
it had, may have had, has or may have, and the foregoing release shall in all respects and in any
event and in all cases be deemed to release each of the Executive Released Parties from any injury,
damage, liability, responsibility, or obligation Company may have suffered with respect to the
Employment-Related Claims.



(e) No Admission. Company acknowledges that this Release reflects the settlement of the
Employment-Related Claims that are denied and contested, and agrees that the settlement reflected
by this Release shall not be construed as an admission of liability, guilt or innocence of
Executive.



(g) Covenant Not to Sue. Company agrees that it will never institute any action for
suit-at-law or action against all or any one of the Executive Released Parties, nor institute,
prosecute, or in any way aid in the institution or prosecution of any Employment-Related Claim for
damages, costs, loss of services, expenses, or compensation for or on account of any damage, loss
or injury, either to person or property or both, whether developed or undeveloped, resulting to or
to result, known or unknown, past, present, or future, arising out of any Employment-Related Claim
that is, is to be or has been released under Release.



Executive’s Acknowledgements, Representations and Warranties. In executing this Release,
Executive acknowledges, represents and warrants the following:



(g) He was encouraged by Company to consult with an attorney or other advisor of his choosing
regarding the terms and conditions of this Release, and he has either consulted with an attorney
regarding this Release or has intentionally chosen not to exercise his right to consult with an
attorney;



(h) He may revoke this Release at any time within seven consecutive calendar (7) days of the
Effective Date, by delivering to Company’s Chief Executive Officer written notice of such
revocation; but that Company shall have no obligation whatsoever to pay the Severance Payments
until both Executive shall have delivered a fully executed copy of this Release and such seven (7)
day revocation period shall have lapsed without Executive having exercised such revocation right;



(i) He has been provided a period of twenty-one (21) days in which to review this Release
prior to signing;



(j) He has read and understands each of the terms and conditions of this Release;



(k) His actions are voluntary and free from coercion or duress by Company or any of its
representatives; and



(l) He is not in breach and has engaged at no time prior to the Termination Date in any act or
omission that might otherwise constitute a breach of the Employment Agreement or any other
agreement referenced therein.



5. Non-Admission of Liability. By execution of this Release, each party specifically
denies any wrongdoing as to the other party, and specifically disclaims any violation of any law,
contract, public policy, or the commission of any tort.



6. Non-disparagement. The parties mutually agree that neither will disparage nor denigrate
the other or the others reputation, name or goodwill in any communication, verbal or written, with
any third-party, either during or after Executive’s employment with Company.



7. Breach/Tender of Proceeds. Should Executive violate or breach any term or condition of
this Release or the Employment Agreement and thereafter fail to cure any such default in accordance
with the terms thereof, Company’s obligation to pay the Severance Payments shall terminate upon and
coincident therewith, and Executive shall have no further rights to any such payments thereafter.
In the event Executive attempts to challenge the enforceability of this Release, Executive must, as
a precondition to bringing such challenge, tender to Company all monies and other tangible
consideration received by him pursuant to this Release, plus interest, and request Company to
retain such consideration and agree to cancel this Release. In the event Company does not accede
to any such request to cancel this Release, Company shall so notify Executive and place such
consideration thereafter in an interest-bearing escrow account pending resolution of any issue over
this Release’s enforceability.



8. Applicable Law. Unless expressly stated in this Release, the terms and conditions of
the Employment Agreement shall govern this Release as to matters of involving the handling of any
interpretation or disputes between the parties.



9. Entire Agreement. This Release and Employment Agreement, which agreement (except for
those provisions that survive) is terminated as of the Termination Date, contains the entire
understanding of the parties with respect to the matters set forth herein, and supersedes all
previous verbal and written agreements between them; provided that, for the avoidance of doubt, the
terms of this Release shall not modify the terms of the Employment Agreement unless specifically
set forth in Release. The terms and conditions of this Release and Employment Agreement cannot be
modified except in a subsequent writing agreed to and signed by Executive and the Chief Executive
Officer of Company.



10. Counterparts. This Release may be executed in counterparts, each of which, when
executed, shall be an original, and all of which together shall constitute one and the same
agreement. The signatories may execute this Release by facsimile counterparts, and a legible
facsimile of a signature shall be as effective as an original signature.



11. Assignment. This Release may not be assigned by either party without the written prior
consent of the other party, which consent shall not be unreasonably withheld, delayed, denied or
conditioned.



IN WITNESS WHEREOF, the parties have signed this Release on the dates written below.



	 	 	 
	ON BEHALF OF COMPANY:

	 	EXECUTIVE:
	     , Inc.

	 	







             



Name: [      ] [      ], individually



Title: Chief Executive Officer



31



32



EXHIBIT H-3



VIASPACE GREEN ENERGY INC




SENIOR EXECUTIVE EMPLOYMENT AGREEMENT




THIS SENIOR EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) is entered into as of the        day of
     2010, by and between VIASPACE Green Energy, Inc., a British Virgin Islands company
(“Company”), and Stephen Muzi, a resident of the State of California, United States of America
(“Executive”). Capitalized terms and phrases shall have the meaning ascribed thereto in this
Agreement.



RECITALS




WHEREAS, Company’s board of directors (the “Board”) has determined that it is in Company’s
best interest to enter into a written employment agreement with Executive; and



WHEREAS, Executive desires to accept the terms and conditions of this Agreement in exchange
for the benefits offered hereunder.



AGREEMENT




NOW, THEREFORE, in consideration of the premises and the mutual covenants and promises
contained herein, and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:




	 	3.	 	EMPLOYMENT TERMS AND CONDITIONS.





1.1 Employment. Upon and coincident with the Effective Date (as defined below), Company
agrees to employ, and Executive hereby accepts employment by Company, upon the terms and conditions
set forth in this Agreement.



1.2 Duties.



(a) In General. Executive shall serve as Company’s Chief Financial Officer, Treasurer
and Secretary, provided, however, that Company may reassign the duties of Treasurer and Secretary
as it may determine in its sole discretion. In his capacity as Company’s Chief Financial Officer,
Executive shall report directly to Company’s Chief Executive Officer (the “CEO”). In such
capacity, Executive shall perform the duties and responsibilities customarily performed by an
individual with such titles and as may otherwise be reasonably assigned to him from time to time by
the CEO for the Employment Term (as defined below)(the “Services”). Except as otherwise agreed
upon by Company, Executive shall devote all of Executive’s business time, energy and skill to
performing the Services, shall not be otherwise employed and shall perform the Services diligently,
faithfully and to the best of Executive’s abilities.



(b) Other Activities. Notwithstanding the above, Executive may (i) serve as a
director, advisor or trustee of other organizations, (ii) engage in charitable, civic, educational
and/or governmental activities, provided that any such services and activities do not materially
interfere with Executive’s ability to perform his duties under this Agreement and that Executive
obtains written consent for all such activities from Company, which consent will not be
unreasonably withheld. Consistent with the foregoing, Executive may engage in personal activities,
including, without limitation, personal investments, provided that such activities described under
this Section 1.2(b) do not materially interfere with Executive’s performance of the Services or any
other of Executive’s written agreements with Company, or (iii) as the Chief Financial Officer and
board member of VIASPACE Inc. or any Affiliate thereof.



(c) Compliance with Policies. Subject to the terms of this Agreement, during the
Employment Term, Executive shall comply in all material respects with all Company policies and
procedures applicable to employees of Company generally and Executive specifically. In connection
with and as a condition to this Agreement, Executive and Company shall enter into as of the
Effective Date that certain “Statement of Additional Terms and Conditions Relating to Employment
Agreement,” substantially in the form attached hereto as Exhibit “A,” which is incorporated herein
and made a part hereof (the “Statement”).



1.3 Employment Term. Company agrees to employ Executive pursuant to the terms of this
Agreement, and Executive hereby accepts employment with Company, upon the terms set forth in this
Agreement, for the period commencing upon and coincident with the        day of        2010 (the “Effective
Date”) and ending upon the earlier of:




(a) Expiration Date. That date which coincides with the last day of the later
of the Initial Term (as defined below) or the Renewal Term (as defined below), as the case
may be (such date shall be referred to as the “Expiration Date”) (For purposes of this
Agreement, the phrase “Initial Term” shall mean that period from the Effective Date through
and including the second (2nd) anniversary of the Effective Date; and the phrase “Renewal
Term” shall mean each consecutive twelve month period immediately following the Initial
Term, during which period this Agreement shall automatically renew on the same terms and
conditions hereof and without any further act on the part of either party; provided,
however, that in no event shall the term of this Agreement be renewed unless agreed
to by both Parties in writing prior to the thirtieth (30th) day immediately
preceding the last day of the Initial Term; or




(b) Termination Date. The Termination Date (as such phrase is defined in
Section 1.5 of this Agreement).



The period from the Effective Date to the earlier to occur of either the Expiration Date or
Termination Date shall be hereinafter referred to as the “Employment Term.”



1.4 Compensation and Benefits.



(a) Base Compensation. In consideration of the Services to be rendered to Company by
Executive and Executive’s covenants under this Agreement, Company agrees to pay Executive during
the Employment Term a salary at the annual rate of no less than One Hundred Eighty Thousand Dollars
($180,000)(the “Base Compensation”), less statutory deductions and withholdings, payable in
accordance with Company’s regular payroll practices. Notwithstanding the foregoing, for the first
the first consecutive twelve (12) calendar month period from the Effective Date, Executive’s Base
Compensation shall be paid by VIASPACE Inc., in the form of VIASPACE common stock at the [rate in
place for the previous six months]. For the remainder of the Employment Term, Executive’s Base
Compensation will be paid in cash.



(b) Bonus. In addition to the Base Compensation, during the Employment Term,
Executive shall be entitled to such bonuses as may from time to time be determined by the Board
(the “Bonus Payments”).



(c) Benefits. Company intends to provide for its employees generally an employee
health and welfare benefit plan in which Executive will participate, provided that such plan may be
obtained at a reasonable cost as determined by Company’s Board.



(d) Vacation and Personal Leave. Executive shall be entitled to twenty (20) business
days paid time off for each twelve (12) consecutive calendar monthly period during the Employment
Term, to be taken in accordance with the vacation accrual schedule, if any, and carried over only
to the extent set forth or otherwise permitted in Company’s personnel policies or, if any, employee
handbook.



(e) Reimbursement of Company Business Expenses. Company shall within ninety (90) days
of its receipt from Executive of supporting receipts, to the extent required by applicable income
tax regulations and Company’s reimbursement policies, reimburse Executive for all out-of-pocket
business expenses reasonably and actually incurred by Executive in connection with his employment
hereunder and consistent with Company policies (the “Business Expenses”). Board approval shall be
required for any single expense exceeding $10,000 or for expenses exceeding in the aggregate
annually $[      ]. Reimbursement of any and all Business Expenses is conditioned on Executive
submitting his request to Company for reimbursement and supporting substantiation within [thirty
(30)] days of the date on which any such expenses shall have been incurred.



1.5 Termination of Agreement.



(a) Termination Date. Executive’s employment and this Agreement (except as otherwise
provided hereunder) shall terminate upon the first to occur of any of the following, at the time
set forth therefore (the “Termination Date”):




(i) Mutual Termination. At any time by the mutual written agreement of Company
and Executive;




(ii) Death or Disability. Immediately upon the death of Executive or a
determination by Company that Executive has ceased to be able to perform the essential
functions of his duties, with or without reasonable accommodation, for a period of not less
than ninety (90) consecutive days, due to a mental or physical illness or incapacity
(“Disability”) (termination pursuant to this Section being referred to herein as termination
for “Death or Disability”);




(iii) Voluntary Termination By Executive. Thirty (30) days following
Executive’s written notice to Company of his termination of employment; provided,
however, that Company may waive all or a portion of such notice period and
accelerate the effective date of such termination (termination pursuant to this Subsection
being referred to herein as “Voluntary” termination);




(iv) Termination For Cause By Company. Immediately following notice of
termination for “Cause” (as defined below)(with such notice describing the Cause with
reasonable specificity) given by Company and failure by Executive to Cure (as defined below)
if and to the extent Cure is otherwise expressly permitted under this subsection
(termination pursuant to this Subsection being referred to herein as termination for
“Cause”)(As used herein, “Cause” means (A) termination, at Company’s sole option,
immediately and without the right to Cure, based on Executive being named as a target or
subject of any grand jury investigation impaneled for, being convicted of or entering a plea
of guilty or nolo contendere for any crime constituting a felony in the jurisdiction in
which committed, any crime involving moral turpitude (whether or not a felony), (B) any act
or omission involving dishonesty or willful misconduct in the discharge of his duties under
this Agreement or that otherwise materially injures Company; (C) subject to applicable law,
if any, Executive’s substance abuse that in any manner materially interferes with the
performance of his duties and Executive’s failure to Cure; (D) Executive’s material breach
of this Agreement or any other agreement entered into with Company in connection with
Company’s confidential information, trade secrets or other property and Executive’s failure
to Cure the same or any other act or omission that constitutes a breach under any agreement
entered into by and between Company or any affiliate thereof and a third party;
(E) misconduct by Executive that has or could result in Company’s material discredit or
diminution in value and Executive’s failure to Cure the same; or (F) chronic absence from
work for reasons other than illness or Disability and Executive’s failure to Cure the
same.)(For purposes hereof the term “Cure” shall mean that conduct or refrain from conduct
that shall be required to remedy within thirty (30) days of any such notice thereof any act
or omission on the part of Executive that is the subject of the claim hereunder by Company
to terminate Executive for Cause; provided, however, that (I) Executive
shall have only one opportunity during the Employment Term to exercise such right to Cure,
(II) any such remedial conduct or refrain thereof shall be to Company’s reasonable
satisfaction, and (III) Company shall have the right to suspend Executive’s duties under
this Agreement during any such period.);




(v) Termination Without Cause By Company. Notwithstanding any other provision
in this Agreement to the contrary, including, but not limited to Section 1.3 above, upon and
coincident with any delivery by Company of its written notice of Executive’s termination of
employment under this Agreement for reasons other than Cause or for no reason;
provided, however, that if and to the extent Company determines to provide
less than thirty calendar days notice of its intent to terminate Executive (the “Optional
Notice Period”), then in such event the Severance Payments (as such phrase is defined below)
shall be extended by that number of days that the period between the delivery date of any
such notice and the Termination Date is less than such Optional Notice Period.
Notwithstanding the foregoing, if Company elects to provide an Optional Notice Period, then
at any time during such period, Company may elect to immediately either suspend, with no
reduction in pay or benefits, Executive from all or any part of his duties as set forth in
this Agreement (including, without limitation, Executive’s position as CFO and his Services
relating thereto) or terminate this Agreement in accordance with this subsection
(termination pursuant to this Subsection being referred to herein as termination “Without
Cause”) or in accordance with any other applicable subsection under this Section 1.5(a) if
and to the extent grounds for any such determination should exist; or




(vi) Termination For Good Reason by Executive. Subject to the notice and cure
provisions described below, at the election of Executive for Good Reason; provided,
however, that any such termination on account of Good Reason shall occur in any
event not later than sixty (60) days following the date on which such event is claimed to
have occurred by Executive. “Good Reason” shall occur only upon (A) a material diminution
in Executive’s authority, duties or responsibility; provided, however, that any
assignment or reassignment by Company of Executive’s duties and responsibilities as
Treasurer and Secretary shall not constitute a diminution in Executive’s authority, duties
or responsibility; (B) any other action or inaction that constitutes a material breach by
Company of this Agreement; or (C) a material change in Executive’s Employment Base out of
which or from which he is required to perform his services under this Agreement (for
purposes of this subsection, a material change shall mean Executive’s Employment Base is
relocated more than fifty (50) miles outside of the Employment Base without Executive’s
prior written consent; “Employment Base” shall mean [Los Angeles County, California]).
Notwithstanding the foregoing, Executive’s right to terminate this Agreement for Good Reason
shall be conditioned upon and may in no event be exercised until and unless Executive shall
have provided Company written notice within thirty (30) days of the initial existence of any
such condition, upon notice of which Company shall thereafter have thirty (30) days within
which it may remedy the condition; provided, further, that in no event shall travel (whether
same-day, overnight, extended stay or otherwise) for or on behalf of Company or any
Affiliate thereof cause or otherwise constitute a material change in Executive’s Employment
Base and Executive shall have no right to terminate this Agreement for Good Reason on
account of such travel requirements.



(b) Other Remedies. Termination pursuant to Section 1.5(a)(iv) or 1.5(a)(vi) above
shall be in addition to and without prejudice to any other right or remedy to which Company or
Executive, respectively, may be entitled at law, in equity or otherwise under this Agreement.



1.6 Payment Upon Separation From Service.



(a) Voluntary Termination, Termination for Cause, or Termination for Death or
Disability. In the case of a termination of Executive’s employment by mutual agreement under
Section 1.5(a)(i) above, on account of Executive’s Death or Disability under Section 1.5(a)(ii)
above, or by Executive’s Voluntary termination under Section 1.5(a)(iii) above, or by Company for
Cause in accordance with Section 1.5(a)(iv) above, (i) Company shall pay to Executive (or his
estate or guardian, as the case may be) and Executive (or his estate or guardian, as the case may
be) shall be entitled to be paid the following as and to the extent the same shall have been earned
through the Termination Date: (A) in all such events, Base Compensation earned, but unpaid and any
Business Expenses so long as any such reimbursement request shall be submitted not later than
ninety (90) days following Executive’s Separation From Service; and (B) in the case of Death or
Disability, accrued, but unpaid Bonus Payments; accrued but unused vacation or personal leave days
to the extent convertible into cash under Company’s policies; and vested benefits under any
employee benefit or stock option plan or agreement; provided, however, that in no
event shall Executive be entitled to receive payment of, and Company shall have no obligation to
pay, any severance or similar compensation attributable to such termination. Company shall pay all
such amounts that are due and payable in cash within thirty (30) days of the Termination Date,
subsequent to any such payment, Company’s obligations under this Agreement shall immediately cease.



(b) Termination Without Cause by Company or For Good Reason by Executive.




(i) In General. Except as otherwise provided in Section 1.6, including, without
limitation, Section 1.6 (c) and (d) below, in the case of a termination of Executive’s
employment that constitutes a Separation from Service (as defined below) during the Initial
Term or any Renewal Term hereunder Without Cause in accordance with Section 1.5(a)(v) or for
Good Reason by Executive in accordance with Section 1.5(a)(vi) above,




(A) Base Compensation. Company shall pay, and Company shall continue to pay to
Executive (or, in the case of Death or Disability following the Termination Date,
his estate or guardian, as the case may be) his Base Compensation through the
Termination Date and thereafter for the Severance Period (as defined below);




(B) Health Benefits. Subject to the terms and conditions of any existing health and
welfare plan adopted by Company, Company shall extend to Executive and Executive
shall have the right to continue his and that of his eligible family members’
participation in and coverage under any such plans, with Company having the
obligation to either reimburse Executive or pay for the coverage premiums for the
duration of the Severance Period if and to the extent it had such an obligation
immediately prior to the Termination Date and is otherwise permitted by applicable
laws without further or additional expense to Company; provided,
however, that if Executive elects to continue his health benefits coverage
under COBRA, Company will pay COBRA premiums on behalf of the Executive or reimburse
the same to Executive, as determined by Company in its sole discretion, during the
Severance Period; except, however, that except as may otherwise be
required by applicable law, in no event shall Company have any such obligation under
this Subsection if he receives or is entitled to receive equivalent coverage and
benefits under the plans and programs of a subsequent employer or an employer of his
spouse, in which case Executive shall have an obligation to report to Company the
existence of any such offer or coverage, with any such participation and coverage
being paid or extended, as the case may be, on the same terms and conditions as was
made available immediately prior to his Separation From Service for the Severance
Period;




(C) Bonuses. Company shall pay to Executive (or, in the case of Death or Disability
following the Termination Date, his estate or guardian, as the case may be) his
accrued, but unpaid Bonus Payments;




(D) Expense Reimbursement. Company shall pay within 30 days of the Termination Date
to Executive (or, in the case of Death or Disability, his estate or guardian, as the
case may be) his unreimbursed Business Expenses pursuant to Section 1.4(e) hereof
incurred by Executive as of the Termination Date;




(E) Equity Compensation. Except as may otherwise be expressly stated to the
contrary in any applicable agreement or stock option plan, all unvested stock
options, restricted stock or other equity-based awards held by Executive shall
immediately vest; and




(F) Definitions. For purposes of this Agreement, the following phrases shall have
the meaning ascribed thereto:




(I) “Severance Period” shall mean that period beginning on Executive’s
Separation From Service and ending upon the date on which the Expiration Date would
have otherwise occurred but for the Termination Date; and




(II) “Severance Payment” shall mean the Base Compensation and such other
compensation for which Company has an obligation under this Agreement to pay during
the Severance Period and that is otherwise constitutes a severance payment within
the meaning of Code Section 409A.




(ii) Timing of Severance Payments.




(E) In General. Except as otherwise provided in this Section 1.6, any such
Severance Payments (as defined below) shall be payable in accordance with Company’s
normal payroll practices and subject to the tax withholding specified in Section
1.4(a) above, as full, final and complete satisfaction of such obligations under
this Agreement; provided, however, that Executive shall have no
further claims against Company for any further compensation whatsoever, other than
the payment of unreimbursed Business Expenses and the continuation of any employee
welfare benefits as may be and to the extent required by law.




(F) Severance Payments to Specified Employees. Notwithstanding any other provision
in this Agreement to the contrary, if Executive is considered a “Specified Employee”
(within the meaning of Code Section 409A(a)(2)(B)(i)) as of the date of any
Separation From Service, then any payment under this Agreement that would otherwise
be permitted under Treas. Reg. Section 1.409A-3(a)(1) may not be made to Executive
before the date that is six (6) months after the date of Executive’s Separation From
Service with Company or, if earlier than the end of such six month period,
Executive’s date of death. Company shall have the discretion to elect whether to
accumulate the amount to which Executive would otherwise be entitled to be paid
under this Section but for his classification as a Specified Employee and pay such
amount in a lump sum as of the first day of the seventh (7th) month
following the Separation From Service or if each payment to which Executive would be
otherwise entitled upon a Separation From Service is delayed by six months. The
amount of any such Severance Payment that is deferred under this subsection shall
accrue interest at the rate of eight percent (8%) until the same shall have been
paid in full.



(c) Payments Conditioned on Release of Claims. Unless it otherwise elects to waive any
such condition precedent, Company’s obligation to pay Executive with the Severance Payment, pay the
bonuses, continue the health benefits or vest the equity compensation as set forth in Sections
1.6(b)(i)(A), (B), (C) or (E), respectively (collectively, the Contingent Payments”), is contingent
upon Executive’s and Company’s execution of that certain Form of Release, a copy of which is
attached hereto and marked as Exhibit “B” (the “Release”). If Executive fails to sign the Release
within twenty-one (21) days of receipt of notice of termination pursuant to Section 1.5, or
subsequently rescinds the Release, Executive shall not be entitled to the Contingent Payments.



(d) WARN Act Offset. In the event that Executive’s termination Without Cause in
accordance with Section 1.5 above is covered by the Worker Adjustment Retraining Notification Act
or any law enacted by a state of the United States of America having a similar purpose (the “WARN
Acts”) at the time of Executive’s termination, or is deemed to be covered by a WARN Act
retrospectively within 90 days after Executive’s termination, the amount of any Severance Payment
or benefit continuation Executive is entitled to receive pursuant to Section 1.6 shall be reduced
by an amount equal to any payments Company is required to provide Executive under any WARN Act or
by the amount of pay Executive receives during any portion of a WARN Act’s notice period where
Executive does not perform any work for Company.



2. EXECUTIVE’S REPRESENTATIONS AND WARRANTIES.



Executive represents and warrants to Company that (a) this Agreement is valid and binding upon and
enforceable against him in accordance with its terms, (b) Executive is not bound by or subject to
any contractual or other obligation that would be violated by his execution or performance of this
Agreement, including, but not limited to, any non-competition agreement presently in effect, and
(b) Executive is not subject to any pending or, to Executive’s knowledge, threatened claim, action,
judgment, order, or investigation that could adversely affect his ability to perform his
obligations under this Agreement or the business reputation of Company. Executive has not entered
into, and agrees that he will not enter into, any agreement either written or oral in conflict
herewith.




	5.	 	MISCELLANEOUS.





5.1 Notices. All notices, requests, and other communications hereunder must be in writing and
will be deemed to have been duly given only if delivered personally against written receipt or by
facsimile transmission with answer back confirmation or mailed (postage prepaid by certified or
registered mail, return receipt requested) or by overnight courier to the parties at the following
addresses or facsimile numbers:




If to the Executive, to:




If to Company, to the Board at the following address:




Attn: Board of Directors




With copy to:




Frank McDaniel, Esq.




McDaniel Law Group, PC




PO Box 681235




Marietta, Georgia 30068-0021



All such notices, requests and other communications will (a) if delivered personally to the
addresses as provided in this Section be deemed given upon delivery, (b) if delivered by facsimile
transmission to the facsimile number as provided in this Section be deemed given upon receipt, and
(c) if delivered by mail in the manner described above to the addresses as provided in this Section
be deemed given upon receipt (in each case regardless of whether such notice, request, or other
communication is received by any other person to whom a copy of such notice, request or other
communication is to be delivered pursuant to this Section). Any party from time to time may change
its address, facsimile number, or other information for the purpose of notices to that party by
giving written notice specifying such change to the other parties hereto.



5.2 Authorization to be Employed. This Agreement, and Executive’s employment hereunder, is
subject to Executive providing Company with legally required proof of Executive’s authorization to
be employed in the United States of America.



5.3 Entire Agreement. This Agreement, together with the Statement (both of which being
entered into by and between Company and Executive of even date herewith), supersedes any and all
prior discussions and agreements between the parties with respect to the subject matter hereof and
contains the sole and entire agreement between the parties hereto with respect thereto.



5.4 Survival. The parties hereby acknowledge and agree that, notwithstanding any provision of
this Agreement to the contrary, their respective obligations pursuant to Sections 1.6 2, 3 and the
Statement shall survive the termination of this Agreement, the Employment Term and/or the
Executive’s employment with Company.



5.5 Waiver. Any term or condition of this Agreement may be waived at any time by the party
that is entitled to the benefit thereof, but no such waiver shall be effective unless set forth in
a written instrument duly executed by or on behalf of the party waiving such term or condition. No
waiver by any party hereto of any term or condition of this Agreement, in any one or more
instances, shall be deemed to be or construed as a waiver of the same or any other term or
condition of this Agreement on any future occasion. All remedies, either under this Agreement or
by law or otherwise afforded, will be cumulative and not alternative.



5.6 Amendment. This Agreement may be amended, supplemented, or modified only by a written
instrument duly executed by or on behalf of each party hereto.



5.7 Recovery of Attorney’s Fees. In the event of any litigation arising from or relating to
this Agreement, the prevailing party in such litigation proceedings shall be entitled to recover,
from the non-prevailing party, the prevailing party’s reasonable costs and attorney’s fees, in
addition to all other legal or equitable remedies to which it may otherwise be entitled.



5.8 No Third Party Beneficiary. The terms and provisions of this Agreement are intended
solely for the benefit of each party hereto and Company’s successors or assigns, and it is not the
intention of the parties to confer third-party beneficiary rights upon any other person.



5.9 No Assignment; Binding Effect. This Agreement shall inure to the benefit of any
successors or assigns of Company. Company may assign this agreement to a controlled subsidiary (as
such term is defined under the final regulations promulgated pursuant to Internal Revenue Code
Section 409A). Executive shall not be entitled to assign his obligations under this Agreement.



5.10 Headings. The headings used in this Agreement have been inserted for convenience of
reference only and do not define or limit the provisions hereof.



5.11 Severability. Company and Executive intend all provisions of this Agreement to be
enforced to the fullest extent permitted by law. Accordingly, if a court of competent jurisdiction
determines that the scope and/or operation of any provision of this Agreement is too broad to be
enforced as written, Company and Executive intend that the court should reform such provision to
such narrower scope and/or operation as it determines to be enforceable. If, however, any
provision of this Agreement is held to be illegal, invalid, or unenforceable under present or
future law, and not subject to reformation, then (a) such provision shall be fully severable, (b)
this Agreement shall be construed and enforced as if such provision was never a part of this
Agreement, and (c) the remaining provisions of this Agreement shall remain in full force and effect
and shall not be affected by illegal, invalid, or unenforceable provisions or by their severance.



5.12 Governing Law and Jury Trial. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA APPLICABLE TO CONTRACTS EXECUTED AND PERFORMED IN
SUCH STATE WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS PRINCIPLES. BECAUSE DISPUTES ARISING IN
CONNECTION WITH COMMERCIAL MATTERS, INCLUDING EMPLOYMENT AGREEMENTS, ARE MOST QUICKLY AND
ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND
FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES (IF
ANY) BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST
COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL
RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER
ARISING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE PARTIES ARISING OUT OF, CONNECTED WITH, RELATED
TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS EMPLOYMENT
AGREEMENT OR MATTERS RELATED HERETO.



5.13 Jurisdiction. The parties hereby consent to the personal jurisdiction and venue of any
court physically located within the County of Cobb, State of Georgia, United States of America, in
connection with any legal or equitable action between the parties arising out of or in connection
with this Agreement.



5.14 Counterparts. This Agreement may be executed in any number of counterparts and by
facsimile, each of which will be deemed an original, but all of which together will constitute one
and the same instrument.



5.15 Opportunity to Obtain Counsel. In connection with the preparation of this Agreement,
Executive acknowledges and agrees that: (a) this Agreement was prepared by legal counsel to Company
(the “Law Firm”) solely on behalf of Company and not on behalf of Executive; (b) Executive has been
advised that his interests may be opposed to the interests of Company and, accordingly, the Law
Firm’s representation of Company in the preparation of this Agreement may not be in the best
interests of Executive; and (c) Executive has been advised to retain separate legal counsel.
Executive warrants and agrees that he has had a reasonable opportunity to obtain independent legal
counsel with regard to the terms and conditions of this Agreement, to include, without limitation,
advice regarding compliance with Code Section 409A, for which Executive makes no reliance on
Company or Law Firm, and has read and fully understands the terms and conditions of this Agreement.
If Executive elects not to consult with any such counsel, he has done so freely and of his own
volition. By signing this Agreement, Executive is affirming that he has freely and of Executive’s
own volition acknowledged and agreed to all terms and conditions contained in this Agreement.



5.16 Construction and Interpretation. Should any provision of this Agreement require judicial
interpretation, the parties hereto agree that the court interpreting or construing the same shall
not apply a presumption that the terms hereof shall be more strictly construed against one party by
reason of the rule of construction that a document is to be more strictly construed against the
party that itself, or through its agent, prepared the same, and it is expressly agreed and
acknowledged that Company and Executive and each of his and its representatives, legal and
otherwise, have participated in the preparation hereof.



5.17 Code Section 409A. Notwithstanding anything to the contrary contained herein, this
Agreement is intended to, but no assurance is made by Company or Law Firm that the provisions
hereof, satisfy the requirements of Code Section 409A. Accordingly, all provisions herein, or
incorporated by reference, shall be construed and interpreted to satisfy the requirements of Code
Section 409A. Further, for purposes of Code Section 409A, each payment of compensation under this
Agreement shall be treated as a separate payment of compensation. Any reimbursements or in-kind
benefits provided under this Agreement shall be made or provided in accordance with the
requirements of Code Section 409A, including, where applicable, the requirement that (a) any
reimbursement is for expenses incurred during the period of time specified in this Agreement, (b)
the amount of expenses eligible for reimbursement, or in kind benefits provided, during a calendar
year may not affect the expenses eligible for reimbursement, or in kind benefits to be provided, in
any other calendar year, (c) the reimbursement of an eligible expense will be made no later than
the last day of the calendar year following the year in which the expense is incurred, and (d) the
right to reimbursement or in kind benefits is not subject to liquidation or exchange for another
benefit. All references to “Separation From Service” contained in this Agreement shall mean
“separation from service” as determined in accordance with Treasury Regulation Section 1.409A-1(h).



IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the date
first set forth above.




COMPANY




[      ] Inc.



	 
	Signature:

	 

	Printed Name:

	 

	Title:

	 

	EXECUTIVE

	Signature:

	 

	Printed Name:







33





Exhibit “A”



VIASPACE GREEN ENERGY, INC.




STATEMENT

OF ADDITIONAL TERMS AND CONDITIONS

RELATING TO EMPLOYMENT AGREEMENT




THIS STATEMENT OF ADDITIONAL STANDARD TERMS AND CONDITIONS RELATING TO EMPLOYMENT AGREEMENT (the
“Agreement”) is made a part of and incorporated into that certain Employment Agreement made and
entered into of even date herewith by and between VIASPACE Green Energy, Inc., a British Virgin
Island company (“Company”), and Stephen Muzi, a resident of the State of California, United States
of America (“Executive”)(the “Employment Agreement”). Except as otherwise defined herein, all
capitalized terms and phrases shall have the meaning ascribed thereto in the Employment Agreement.
Company and Executive are sometimes collectively referred to in this Agreement as the “Parties.”



VIASPACE GREEN ENERGY, INC.



Authorized Signature:       



Printed Name:       



Position: Authorized Officer



	 	 	 
	
 
	 	Address:
	
 
	 	 
	EXECUTIVE

	 	

	
 
	 	 
	
 
	 	 
	Signature:       

	 	—
	
 
	 	 
	Printed Name: Stephen Muzi

	 	

Telephone No.:
	
 
	 	Facsimile No.:






TERMS AND CONDITIONS




In consideration of the benefits each Party receives as a result of and under the Employment
Agreement and relationship created thereby, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be
legally bound by this Agreement, hereto hereby agree as follows:



1. Definitions. For purposes of this Agreement, the following terms and phrases shall have
the meaning ascribed thereto:



“Affiliate” means, with respect to a particular party, a person, directly or indirectly, whether
before, as of or following the Effective Date, that controls, is controlled by or is under common
control with such party. For purposes of this definition, “control” shall mean beneficial
ownership (direct or indirect) of more than 50% of the outstanding voting stock or other voting
rights entitled to elect directors (or in the case of an entity that is not a corporation the
election or appointment of the corresponding managing authority); provided,
however, that in any country where the local law shall not permit foreign equity
participation of more than 50%, then an “Affiliate,” as to Licensee shall further include any
company in which the Licensee shall own or control, directly or indirectly, the maximum percentage
of such outstanding stock or voting rights permitted by local law or otherwise exercises control
over the management of such company.



“Company Products” shall mean any and all (i) Developments made, conceived or created by Executive
and relating to the Restricted Business during the term of this Agreement and (ii) Work Products.



“Confidential Information” shall mean any and all proprietary and confidential technical and
nontechnical data, information, agreements, documents or other property of Company or any Affiliate
thereof, other than “Trade Secrets,” and Proprietary Rights thereto, which is of tangible or
intangible value to Company or any Affiliate thereof and is not public information or is not
generally known or available to Company’s competitors, but is known only to Company or its
Affiliates and their employees, independent contractors or agents to whom it must be confided in
order to apply it to the uses intended, including, without limitation, all business methods,
practices and concepts; business and financial information and records, including, without
limitation, accounting records, tax returns, financial statements, projections, forecasts or other
budgets, other financial data or plans, business plans and strategies; product plans, customer
lists and other customer-related information; vendor or supplier lists and other vendor or
supplier-related information; computer or data base files; passwords or other access codes;
software programs, language, algorithms, codes or “fingerprints”; reports; analyses; notes;
interpretations; formulae, processes, technology, inventions, patents, and the Proprietary Rights
thereto; the terms of this Agreement and any other agreement between the Parties; Company Products
and Moral Rights.



“Developments” shall mean any ideas, concepts, invention, modification, discovery, design,
development, improvement, process, work of authorship, algorithm, documentation, formula, data,
technique, know-how, source code and object code and other computer codes and software programs,
technology, research, know-how and other Intellectual Property any and all Proprietary Rights
therein or thereto (whether or not patentable or registerable under copyright, trademark or similar
statutes or subject to analogous protection); provided, however, that in no event
shall the term “Developments” include the Excluded Property.



“Excluded Property” shall mean those items of personal property either owned by Executive or to
which Executive has exclusive rights and listed on Schedule “1,” entitled “Excluded Property,”
which is attached hereto and made a part hereof.



“Intellectual Property” shall mean all of the following in any jurisdiction throughout the world:
(a) all inventions (whether patentable or unpatentable and whether or not reduced to practice), all
improvements thereto, and all patents, patent applications, and patent disclosures, together with
all reissuances, continuations, continuations-in-part, revisions, extensions, and reexaminations
thereof, (b) all trademarks, service marks, trade dress, logos, slogans, trade names, corporate
names, Internet domain names, and rights in telephone numbers, together with all translations,
adaptations, derivations, and combinations thereof and including all goodwill associated therewith,
and all applications, registrations, and renewals in connection therewith, (c) all copyrightable
works, all copyrights, and all applications, registrations, and renewals in connection therewith,
(d) all mask works and all applications, registrations, and renewals in connection therewith, (e)
all trade secrets and confidential business information (including ideas, research and development,
show-how, know-how, formulas, compositions, manufacturing and production processes and techniques,
technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost
information, and business and marketing plans and proposals), (f) all computer software (including
source code, executable code, data, databases, and related documentation), (g) all material
advertising and promotional materials, (h) all other proprietary rights, and (i) all copies and
tangible embodiments thereof (in whatever form or medium).



“Moral Rights” shall mean all rights of paternity, integrity, disclosure and withdrawal and any
other rights that may be known as or referred to as “moral rights,” “artist’s rights,” “droit moral
rights,” or the like.



“Person” shall mean any individual, partnership, limited partnership, limited liability
partnership, limited liability company, corporation, trust, association, non-profit or charitable
organization or other entity, or an unincorporated organization, a governmental entity or any
department or agency thereof.



“Proprietary Rights” shall mean all patent rights, copyrights, sui generis rights, trade secrets,
mask work rights, and other Intellectual Property rights throughout the world.



“Restricted Business” shall mean any endeavors, directly or indirectly, in the (a) relating to the
use of grasses as a source of or for fuel or energy; or (b) the use of art or frames relating
thereto; or (c) any other effort or enterprise undertaken by Company or any Affiliate thereof and
approved by the Board during the Employment Term; and (d) any other activity, effort or enterprise
relating thereto, including, without limitation, development, research, making, manufacturing,
marketing, promotion, license, sale, buying, importation, exportation, or other commercialization
efforts or the licensing or sublicensing of any such activities, efforts or enterprises.



“Trade Secrets” shall mean information, including, but not limited to, any and all Intellectual
Property, Developments, Work Product and any and all other Confidential Information and Proprietary
Rights thereto, of Company or any Affiliate thereof that: (a) derives economic value, actual or
potential, from not being generally known to, and not being readily ascertainable by proper means
by, other persons who can obtain economic value from its disclosure or use; and (b) is the subject
of efforts that are reasonable under the circumstances to maintain its secrecy (to the extent that
applicable law mandates a definition of “trade secret” inconsistent with the foregoing definition,
then the foregoing definition shall be construed in such a manner as to be consistent with the
mandated definition under applicable law).



“Work Product” shall mean all of Executive’s right, title, and interest in and to any and all
Developments (and all Proprietary Rights with respect thereto), whether or not patentable or
registerable under copyright or similar statutes, that was or is developed, made, conceived or
reduced to practice or learned by Executive, either alone or jointly with others, during the period
of Executive’s employment or within twelve (12) months following the Termination Date.



2. Restrictive Covenants.



(c) Nondisclosure. Executive acknowledges that he may be exposed to certain Confidential
Information and Trade Secrets and the Proprietary Rights thereto during the Employment Term, and
his unauthorized use or disclosure of such information, data or rights could cause immediate and
irreparable harm to Company. Accordingly, except to the extent that he is required to use such
property, information, technology or data to perform his obligations as an employee of Company,
Executive agrees that he shall not (and shall take full responsibility for ensuring that none of
his agents), without the express and duly authorized written consent of Company, redistribute,
market, publish, disclose or divulge to any other Person, or use or modify for use, directly or
indirectly in any way for any Person (i) any of Company’ Confidential Information and Proprietary
Rights thereto during his Employment Term and for a period of three (3) years immediately
thereafter; and (ii) any of Company’ Trade Secrets and Proprietary Rights thereto at any time
during which such information shall constitute a Trade Secret (whether before, during or after
termination of the Employment Term).



(b) Exception to Confidentiality Obligation. The confidentiality obligations hereunder shall
not apply to information that can be demonstrated by Executive to:




(xi) have been developed independently by or known to Executive prior to his first
having become employed with Company, whether or not under this Agreement, and not otherwise
assigned, transferred or otherwise conveyed to Company under this Agreement or any other
agreement;




(xii) not have been acquired, directly or indirectly, by Executive from the Company or
from a third party under an obligation of confidence and limited use;




(xiii) have been rightfully received by Executive in accordance with this Agreement
after disclosure to Company from a third party who did not require Executive to hold it in
confidence or limit its use and who did not acquire it, directly or indirectly, from the
Company under a continuing obligation of confidence;




(xiv) have been in the public domain as of the date of this Agreement, or comes into
the public domain during the term of this Agreement through no fault of Executive; or




(xv) to be required to be disclosed by a governmental or other regulatory body or by
action of law.



(f) Limitation on Solicitation of Customers and Personnel. During the Employment Term and for
a period of two (2) years immediately thereafter, Executive shall not, directly or indirectly,
alone or in conjunction with any other Person, (i) solicit any actual or actively sought
prospective client or customer of Company with whom or which Executive had material contact during
the Employment Term or with respect to whom or which Executive was provided Confidential
Information by Company during the Employment Term (an “Company Customer”) for the purpose of
providing such Company Customer products or services that are substantially similar to or
competitive with the Restricted Business, (ii) solicit any employee, other personnel or independent
contractor of Company (a “Protected Person”) for the purpose of encouraging such Protected Person
to sever an employment, contractual or other relationship with Company or (iii) hire or otherwise
retain a Protected Person to perform services of a nature substantially similar to that which such
Protected Person performed for Company within a one (1) year period prior to any such hiring or
engagement.



(g) Refrain from Competitive Activities. During the Employment Term and for a period
terminating two years after termination of employment, Executive, without Company’s prior written
permission, shall not for any reason whatsoever, (i) enter into the employment of or render or
perform any services, directly or indirectly, to any individual or other person, firm or
corporation engaged in the Restricted Business; or (ii) engage, directly or indirectly, in the
Restricted Business, whether as an individual, partner, shareholder, creditor, director, officer,
principal, agent, employee, trustee, consultant, advisor or in any other relationship or capacity.



17. Assignment of Company Products.



(a) Company owns and shall own and Executive hereby agrees to assign and assigns to Company
any and all Company Products, to the fullest extent allowable by law, and Executive shall promptly
disclose such Company Property to Company. If Executive uses or discloses its own or any third
party’s confidential information or Intellectual Property when acting within the scope of its
employment or engagement or otherwise on behalf of Company, Company will have and Executive hereby
grants Company a perpetual, irrevocable, worldwide, royalty-free, non-exclusive, sublicensable
right and license to exploit and exercise all such confidential information and Intellectual
Property rights.



(b) Executive further acknowledges that all original works of authorship that are made by him
(solely or jointly with others) during the term of Executive’s employment or engagement with
Company and that are within the scope of is employment or engagement and protectable by copyright
are “works made for hire,” as that term is defined in the United States Copyright Act (17 U.S.C. §
101).



(c) To the extent Executive retains any such Moral Rights under applicable law, Executive
hereby waives such Moral Rights and consents to any action with respect to such Moral Rights by or
authorized by Company and specifically grants to Company the right to alter such Company Products.
Executive will confirm any such waivers and consents from time to time as requested by Company.



18. Enforcement of Proprietary Rights.



(a) Executive will assist Company in every proper way to obtain and from time to time enforce
United States and foreign Proprietary Rights relating to Company Products in any and all countries.
To that end, Executive will execute, verify, and deliver such documents and perform such other
acts (including appearances as a witness) as Company may reasonably request for use in applying
for, obtaining, perfecting, evidencing, sustaining, and enforcing such Proprietary Rights and the
assignment thereof. In addition, Employee will execute, verify, and deliver assignments of such
Proprietary Rights to Company or its designee. Executive’s obligation to assist Company with
respect to Proprietary Rights relating to such Company Products in any and all countries shall
continue beyond the termination of Executive’s employment or engagement, but Company shall
compensate Executive at a reasonable rate after termination of its employment or engagement for the
time actually spent by Executive at Company’s request on such assistance.



(b) In the event Company is unable for any reason, after reasonable effort, to secure
Executive’s signature on any document needed in connection with the actions specified in the
preceding paragraph, Executive hereby irrevocably designates and appoints Company and its duly
authorized officers and agents as its agent and attorney in fact, coupled with an interest, to act
for and on its behalf to execute, verify, and file any such documents and to do all other lawfully
permitted acts to further the purposes of the preceding paragraph thereon with the same legal force
and effect as if executed by Executive. Executive hereby waives and quitclaims to Company any and
all claims, of any nature whatsoever, that Executive now or may hereafter have for infringement of
any Proprietary Rights assigned hereunder to Company.



19. No Conflicting Obligation. Executive represents that its performance of all the terms
of this Agreement and as an employee or consultant of Company does not and will not breach any
agreement between it and any other employer, person or entity. Executive has not entered into, and
it agrees it will not enter into, any agreement either written or oral in conflict herewith.
Executive shall, during the term of its employment or engagement, diligently promote the interests
of Company. Executive shall serve Company to the best of its ability, faithfully, honestly,
diligently and efficiently.



20. Return of Company Documents. When Executive’s employment with or engagement by Company
ceases for any reason (or no reason), Executive will promptly deliver to Company all drawings,
notes, memoranda, specifications, devices, formulas, and documents, together with all copies
thereof, and any other material (and regardless of whether any of the foregoing is kept in physical
or electronic form) containing or disclosing any Confidential Information and Trade Secrets,
including, without limitation, Company Products and Proprietary Rights relating thereto of Company.
Executive further agrees that any property situated on Company’ premises and owned by Company,
including disks and other storage media, filing cabinets or other work areas, is subject to
inspection by Company personnel at any time with or without notice.



21. Acknowledgment. Executive acknowledges and agrees that the covenants set forth in this
Agreement are reasonable given Company’ need to protect its Trade Secrets and Confidential
Information, particularly given the complexity and competitive nature of the technology industry,
and that Executive has sufficient resources to find alternative, commensurate employment in his
respective fields of expertise that would not violate this Agreement.



22. Remedies; Damages, Injunctions and Specific Performance. It is expressly understood and
agreed that the covenants, agreements and services to be rendered and performed by Executive under
this Agreement shall survive any termination or expiration of this Agreement, whether voluntary or
involuntary, with or without cause, and are special, unique, and of an extraordinary character. In
the event of any default, breach or threatened breach by Executive of this Agreement, Company shall
be entitled, if it so elects, to institute and prosecute proceedings in any court of competent
jurisdiction, either at law or in equity, and shall be entitled to such relief as may be available
to it pursuant hereto, at law or in equity, including, without limitation: (a) damages for any
breach of this Agreement; (b) an order for the specific performance hereof by Executive; or (c) an
order enjoining Executive from breaching such provisions, without bond and without prejudice to any
other rights and remedies that Company may have for a breach of this Agreement.



23. Tolling. Executive hereby expressly acknowledges and agrees that in the event the
enforceability of any of the terms of this Agreement shall be challenged in court or pursuant to
arbitration and Executive is not enjoined (either temporarily or permanently) from breaching any of
the restraints set forth in this Agreement, then if a court of competent jurisdiction or
arbitration panel finds subsequently that the challenged restraint is enforceable, the time period
of the restraint shall be deemed tolled upon the filing of the lawsuit challenging the
enforceability of the restraint until the dispute is finally resolved and all periods of appeal
have expired.



10. Ancillary Agreement. This Agreement shall be construed as an agreement ancillary to
that certain Employment Agreement entered into of even date herewith and by and among Company, and
Executive (to which this Agreement is attached as Exhibit A (the “Employment Agreement”), and the
existence of any claim or cause of action of Executive against Company, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by Company of this
Agreement.



11. Binding Effect and Assignability. The rights and obligations of Company under this
Agreement shall inure to the benefit of and shall be binding upon any affiliate, successor or
assign of or to the business of Company. Neither this Agreement nor any rights or obligations of
Executive shall be transferable or assignable by Executive without Company’s prior written consent,
and any attempted transfer or assignment hereof by Executive not in accordance herewith shall be
null and void.



12. Severability. All Sections, subsections, paragraphs, terms and provisions of this
Agreement are severable, and the unenforceability or invalidity of any of the terms, provisions,
Sections, subsections or paragraphs of this Agreement shall not affect the validity or
enforceability of the remaining terms, provisions, Sections, subsections or paragraphs of this
Agreement, but such remaining terms, provisions, Sections, subsections or paragraphs shall be
interpreted and construed in such a manner as to carry out fully the intention of the Parties.



13. Captions and Counterparts. The Section headings in this Agreement are for convenience
of reference only and shall not affect the meaning or interpretation hereof. This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an original, but all of
which shall together constitute one and the same instrument.



14. Notices. Any notice or other communication required or permitted hereunder shall be in
writing and shall be deemed to have been duly given on the date of service if personally served or
if telecopied (if telecopied on a business day and during business hours at the place of receipt
and if receipt is confirmed) or three (3) days after mailed if mailed by reputable international
overnight delivery service, postage prepaid and in any event addressed to the address set forth in
the signature clause to this Agreement or to such other address as shall be designated by written
notice issued pursuant hereto.



15. Recovery of Attorney’s Fees. In the event of any litigation arising from or relating
to this Agreement, the prevailing party in such litigation proceedings shall be entitled to
recover, from the non-prevailing party, the prevailing party’s reasonable costs and attorney’s
fees, in addition to all other legal or equitable remedies to which it may otherwise be entitled.



16. Waiver. The waiver by any party to this Agreement of a default or breach of any
Section, subsection or provision of this Agreement shall not operate or be construed as a waiver of
any prior or subsequent default or breach of the same or of a different Section, subsection or
provision by any party hereto.



17. Governing Law and Waiver of Jury Trial. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA, UNITED STATES OF AMERICA APPLICABLE
TO CONTRACTS EXECUTED AND PERFORMED IN SUCH STATE WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS
PRINCIPLES. BECAUSE DISPUTES ARISING IN CONNECTION WITH COMMERCIAL MATTERS, INCLUDING EMPLOYMENT
AGREEMENTS, ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE
PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE
PARTIES DESIRE THAT THEIR DISPUTES (IF ANY) BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS.
THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, OR
PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE BETWEEN
THE PARTIES ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS EMPLOYMENT AGREEMENT OR MATTERS RELATED HERETO.



18. Entire Agreement. This Agreement, together with the Employment Agreement to which this
Agreement is attached as Exhibit A and entered into between the Company, and Executive, contains
the complete agreement concerning the employment arrangement between Company and Executive as of
the date hereof.



19. Construction and Interpretation. Should any provision of this Agreement require
judicial interpretation, the parties hereto agree that the court interpreting or construing the
same shall not apply a presumption that the terms hereof shall be more strictly construed against
one party by reason of the rule of construction that a document is to be more strictly construed
against the party that itself, or through its agent, prepared the same, and it is expressly agreed
and acknowledged that Company and Executive and each of his and its representatives, legal and
otherwise, have participated in the preparation hereof.



EXHIBIT B




MUTUAL RELEASE AGREEMENT

IN CONNECTION WITH TERMINATION

OF EMPLOYMENT [WITHOUT CAUSE]

[FOR GOOD REASON]




THIS MUTUAL RELEASE AGEEMENT IN CONNECTION WITH TERMINATION OF EMPLOYMENT [WITHOUT CAUSE][FOR
GOOD REASON] (the “Release”) is made and entered into as of the        day of        200       (the “Effective
Date”), by and between       , a resident of the State of [      ] (“Executive”) and       ,
Inc., (“Company”), a        corporation. Unless otherwise defined herein, capitalized terms and
phrases shall have the meaning ascribed thereto in the Employment Agreement (as defined below).



W I T N E S S E T H:




WHEREAS, Executive and Company entered into that certain Executive Employment Agreement dated
as of the        day of        20       (together with the Statement, the “Employment Agreement”);



WHEREAS, [Company][Executive] has determined to terminate the Employment Agreement and
Executive’s employment thereunder [without Cause][for Good Reason] (the “Termination”);



WHEREAS, following the Termination Date, Executive is entitled to be paid the Severance
Payment, but only upon and following his execution of this Release; and



WHEREAS, based on the foregoing, Company has prepared this Release for Executive’s review and
execution, subsequent to which and upon and all terms and conditions hereof becoming effective,
Executive will thereafter become entitled to be paid the Severance Payments as and to the extent
the same are provided under the Employment Agreement.



NOW, THEREFORE, in consideration of the mutual promises and undertakings contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:



1. Severance Payments. Subject to and conditioned upon this Release becoming fully
effective in all respects following the Termination Date, Company shall pay to Executive the
Contingent Payments as and to the extent the same are provided under the Employment Agreement.
Notwithstanding any provision of this Release to the contrary, in no event shall this Release have
any effect on (a) D&O Claims (as defined below) to or on which Executive may be entitled to rely;
(b) Claims (as defined below) against Executive for breach of fiduciary duty to Company or any
Affiliate thereof, act or omission constituting gross negligence, fraud or violation of any
applicable rule, regulation or law, or which Executive is not otherwise entitled to indemnification
under either the governing documents for Company or any Affiliate thereof or applicable law; or (c)
either party’s Claims based on acts or omissions occurring after the date hereof in breach of the
Statement or any term or condition of the Employment Agreement if such term or condition survived
the Termination of such Employment Agreement, with the Statement and such surviving terms and
conditions of the Employment Agreement continuing to be enforceable against the parties thereto for
the applicable period of limitations; ; or (c) Claims based on or arising under the Security
Documents as defined under that certain Secured Promissory Note issued in favor of Sung H. Chang as
of the        day of May 2010.



2. Executive Releases, Waiver, and Covenant Not to Sue.



(e) Release. Except as otherwise provided in Section 1, of this Release, as of and coincident
with the Effective Date, Executive hereby and forever releases and discharges Company and Company’s
shareholders, officers, directors, affiliates, agents, successors, assigns and insurers
(collectively, the “Company Released Parties”) from any and all Claims (other than D&O Claims) he
has or may have from the beginning of time to the Effective Date, including, without limitation,
any and all Claims arising under or relating to his Employment Agreement, Stock Option Agreement or
any termination thereof or rights thereunder or to any other compensatory-related Claims (the
“Executive Claims”). The foregoing release shall constitute a complete and general release of all
such Executive Claims, a waiver of such Claims and a covenant not to sue thereon, and Executive
shall be deemed to have fully, finally, and forever settled, discharged, released, waived, and
abandoned any and all Executive Claims he had, may have had, has or may have, and the foregoing
release shall in all respects and in any event and in all cases be deemed to release each of the
Company Released Parties from any injury, damage, liability, responsibility, or obligation
Executive may have suffered with respect to the Executive Claims.




[COMPANY SHALL HAVE THE RIGHT TO MAKE SUCH CHANGES TO THIS FORM OF RELEASE AS MAY BE
NECESSARY AT THE TIME OF ITS EXECUTION TO CONFORM THE OBJECTIVES OF THIS RELEASE TO
APPLICABLE LAWS, INCLUDING, WITHOUT LIMITATION, THE LAWS OF ANY STATE OF THE UNITED STATES
(E.G., RELATING TO THE RELEASE OF UNKNOWN OR CONTINGENT CLAIMS), THE FEDERAL LAWS OF THE
UNITED STATES (E.G., RELATING TO THE RELEASE OF CLAIMS UNDER ADEA) OR THE BRITISH VIRGIN
ISLANDS]



(f) Definition. For purposes of this Release, the following terms and phrases shall have the
meaning ascribed thereto:




(k) “Claim” shall mean any and all causes of action, actions, affirmative defenses,
judgments, liens, indebtedness, damages, losses, claims, liabilities and demands of every
kind and character, whether known or unknown, suspected or unsuspected, existing or
prospective, from the beginning of time through and including the Termination Date,
including, without limitation, any and all claims, including claims based on, arising under
or otherwise relating to the Civil Rights Act of 1964, the Employee Retirement Income
Security Act of 1974, the Age Discrimination in Employment Act of 1967 (“ADEA”), the
Americans with Disabilities Act, the Vietnam Era Veterans Readjustment Act, all other
federal or state statutes regulating military service leaves, and all amendments thereof or
any other relevant or potentially applicable state and federal statutes; past wages or
salaries, emotional distress, personal injuries or damages, disability insurance or other
benefits (except vested retirement benefits), violation of any express or implied agreement,
written or verbal, and any common law duty, including claims for attorney fees.




(iv) “D&O Claims” means any Claims Executive may be entitled to assert, on
which Executive may rely or to which Executive may be entitled for or on account of which
relate to his having served Company or any Affiliate thereof as a director, officer or
employee, as the case may be, whether any such Claim arises under a written agreement, the
articles or certificate of incorporation, bylaws or any other governing document, applicable
law or otherwise, including, without limitation, any and all rights to indemnification or
policies of insurance policy that are intended for the protection or defend of persons
acting in any such capacity.



(h) No Admission. Executive acknowledges that this Release reflects the settlement of the
Executive Claims that are denied and contested, and agrees that the settlement reflected by this
Release shall not be construed as an admission of liability, guilt or innocence of Company.



(i) Covenant Not to Sue. Executive agrees that he will never institute any action for
suit-at-law or action against all or any one of the Company Released Parties, nor institute,
prosecute, or in any way aid in the institution or prosecution of any Executive Claim for damages,
costs, loss of services, expenses, or compensation for or on account of any damage, loss or injury,
either to person or property or both, whether developed or undeveloped, resulting to or to result,
known or unknown, past, present, or future, arising out of any Executive Claim that is, is to be or
has been released under Release.



6. Company Releases, Waiver and Covenant Not to Sue.



(f) Release. Except as otherwise provided in Section 1, of this Release, as of and coincident
with the Effective Date, Company hereby and forever releases and discharges Executive from any and
all Claims it has or may have from the beginning of time to the Effective Date, including, without
limitation, any and all Claims arising under or relating to Executive’s Employment Agreement, Stock
Option Agreement or any termination thereof or rights thereunder or to any other
compensatory-related Claims (the “Employment-Related Claims”). The foregoing release shall
constitute a complete and general release of all such Employment-Related Claims, a waiver of such
Claims and a covenant not to sue thereon, and Company shall be deemed to have fully, finally, and
forever settled, discharged, released, waived, and abandoned any and all Employment-Related Claims
it had, may have had, has or may have, and the foregoing release shall in all respects and in any
event and in all cases be deemed to release each of the Executive Released Parties from any injury,
damage, liability, responsibility, or obligation Company may have suffered with respect to the
Employment-Related Claims.



(g) No Admission. Company acknowledges that this Release reflects the settlement of the
Employment-Related Claims that are denied and contested, and agrees that the settlement reflected
by this Release shall not be construed as an admission of liability, guilt or innocence of
Executive.



(h) Covenant Not to Sue. Company agrees that it will never institute any action for
suit-at-law or action against all or any one of the Executive Released Parties, nor institute,
prosecute, or in any way aid in the institution or prosecution of any Employment-Related Claim for
damages, costs, loss of services, expenses, or compensation for or on account of any damage, loss
or injury, either to person or property or both, whether developed or undeveloped, resulting to or
to result, known or unknown, past, present, or future, arising out of any Employment-Related Claim
that is, is to be or has been released under Release.




	 	7.	 	Executive’s Acknowledgements, Representations and Warranties. In executing
this Release, Executive acknowledges, represents and warrants the following:





(m) He was encouraged by Company to consult with an attorney or other advisor of his choosing
regarding the terms and conditions of this Release, and he has either consulted with an attorney
regarding this Release or has intentionally chosen not to exercise his right to consult with an
attorney;



(n) He may revoke this Release at any time within seven consecutive calendar (7) days of the
Effective Date, by delivering to Company’s Chief Executive Officer written notice of such
revocation; but that Company shall have no obligation whatsoever to pay the Severance Payments
until both Executive shall have delivered a fully executed copy of this Release and such seven (7)
day revocation period shall have lapsed without Executive having exercised such revocation right;



(o) He has been provided a period of twenty-one (21) days in which to review this Release
prior to signing;



(p) He has read and understands each of the terms and conditions of this Release;



(q) His actions are voluntary and free from coercion or duress by Company or any of its
representatives; and



(r) He is not in breach and has engaged at no time prior to the Termination Date in any act or
omission that might otherwise constitute a breach of the Employment Agreement or any other
agreement referenced therein.



5. Non-Admission of Liability. By execution of this Release, each party specifically
denies any wrongdoing as to the other party, and specifically disclaims any violation of any law,
contract, public policy, or the commission of any tort.



6. Non-disparagement. The parties mutually agree that neither will disparage nor denigrate
the other or the others reputation, name or goodwill in any communication, verbal or written, with
any third-party, either during or after Executive’s employment with Company.



7. Breach/Tender of Proceeds. Should Executive violate or breach any term or condition of
this Release or the Employment Agreement and thereafter fail to cure any such default in accordance
with the terms thereof, Company’s obligation to pay the Severance Payments shall terminate upon and
coincident therewith, and Executive shall have no further rights to any such payments thereafter.
In the event Executive attempts to challenge the enforceability of this Release, Executive must, as
a precondition to bringing such challenge, tender to Company all monies and other tangible
consideration received by him pursuant to this Release, plus interest, and request Company to
retain such consideration and agree to cancel this Release. In the event Company does not accede
to any such request to cancel this Release, Company shall so notify Executive and place such
consideration thereafter in an interest-bearing escrow account pending resolution of any issue over
this Release’s enforceability.



8. Applicable Law. Unless expressly stated in this Release, the terms and conditions of
the Employment Agreement shall govern this Release as to matters of involving the handling of any
interpretation or disputes between the parties.



9. Entire Agreement. This Release and Employment Agreement, which agreement (except for
those provisions that survive) is terminated as of the Termination Date, contains the entire
understanding of the parties with respect to the matters set forth herein, and supersedes all
previous verbal and written agreements between them; provided that, for the avoidance of doubt, the
terms of this Release shall not modify the terms of the Employment Agreement unless specifically
set forth in Release. The terms and conditions of this Release and Employment Agreement cannot be
modified except in a subsequent writing agreed to and signed by Executive and the Chief Executive
Officer of Company.



10. Counterparts. This Release may be executed in counterparts, each of which, when
executed, shall be an original, and all of which together shall constitute one and the same
agreement. The signatories may execute this Release by facsimile counterparts, and a legible
facsimile of a signature shall be as effective as an original signature.



11. Assignment. This Release may not be assigned by either party without the written prior
consent of the other party, which consent shall not be unreasonably withheld, delayed, denied or
conditioned.



IN WITNESS WHEREOF, the parties have signed this Release on the dates written below.



	 	 	 
	ON BEHALF OF COMPANY:

	 	EXECUTIVE:
	     , Inc.

	 	







             



Name: [      ] [      ], individually



Title: Chief Executive Officer



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