(b) on or before June 9, 2008, VIASPACE shall pay to LJCI in cash or other readily availablefunds, $228,162.33, plus interest accruing in the amount of 4.75% per annum from the date hereof,such that if such payment is made on June 9, 2008, the total sum payable shall equal $230,389.26.In the event that VIASPACE does not pay all sums due from VIASPACE to LJCI under this Section2 by the date that is three business days from the date that such sums are due under the terms ofthis Section 2, interest shall accrue on the outstanding Settlement Amount at a rate of 9.75% perannum.3. Extension of Maturity Date: The Maturity Date of the January Loan is herebyextended to June 9, 2008.4. Release: Effective upon execution of this Agreement and except as to obligationscreated herein, VIASPACE, for itself and its predecessors, assigns, parent company, sistercompanies, heirs, executors, administrators, past and present shareholders, officers, directors,employees and representatives, hereby fully releases, remises, acquits, forever discharges andindemnifies LJCI and its affiliates, predecessors and successors, together with all of theirrespective past and present officers, directors, shareholders, representatives, employees,consultants, attorneys, fiduciaries, predecessors-in-interest, successors-in-interest, parentcompany, sister companies and assigns from any and all claims, demands, actions, losses andexpenses of any kind or nature arising out of any and all causes of action, agreements, claims,demands, actions, damages, judgments, debts, covenants, executions, liabilities, obligations,losses and expenses of any kind or nature arising out of any acts, omissions, liabilities,transactions, transfers, happenings, violations, promises, facts or circumstances arising out of,related to or described in the Lending Transactions, or underlying related transactions, includingwithout limitation (i) any obligation to loan any additional sums to VIASPACE under the OriginalNote, (ii) any obligation to enter into any Additional Funding (as defined in the Original Note)and/or (iii) any obligation to pay any Non-Funding Penalty (as defined in the Original Note),whether or not now known or suspected or claimed, whether in law, admiralty, arbitration,administrative, equity or otherwise, and whether accrued or hereafter maturing.5. Section 1542 Waiver: VIASPACE acknowledges and affirms that it is familiar withSection 1542 of the California Civil Code, which provides that:A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THECREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HERFAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWNBY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HERSETTLEMENT WITH THE DEBTOR.VIASPACE knowingly and voluntarily waives the provisions of Section 1542 of the CaliforniaCivil Code, as against each party released hereby, and acknowledges and agrees that this waiver isan essential and material term of this settlement which led to this Agreement, and that withoutsuch waiver, the settlement reflected in this Agreement would not have been entered into. VIASPACEfurther acknowledges the significance and consequence of the release and the specific waiver ofSection 1542 of the California Civil Code.          Initials   Initials
 
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6. No Admission of Liability: The Parties understand and acknowledge that thisAgreement constitutes a compromise and settlement of disputed claims and is made to buy peace andfor no other reason. No action taken by the Parties hereto either previously or in connection withthis Agreement shall be deemed or construed to be an admission of the truth or falsity of anyclaims heretofore made, or an acknowledgement or admission by any Party of any fault or liabilitywhatsoever to the other Parties or third parties.7. Authority: The Parties represent and warrant that the undersigned individuals havethe authority to act on behalf of the signing Party and have the authority to bind that Party, andall that may claim through it, to the terms and conditions of this Agreement. Each Party warrantsand represents that there are no liens or claims of lien or assignment or equity or otherwise of oragainst any of the claims or causes of action released herein.8. Representation: The Parties represent and warrant that they have had anopportunity to consult with an attorney, and have carefully read and understand the scope andeffect of the provisions of this Agreement. No Party has relied upon any representations orstatements made by any other Party, which are not specifically set forth in this Agreement.9. No Prior Assignment Indemnity. The Parties represent and warrant that they havenot hereto assigned or transferred, or purported to assign or transfer, to any person or entity anyclaim or other matter herein released. In the event that any party shall have assigned andtransferred, or purported to assign or transfer, any claim or other matter herein released, suchparty shall indemnify, defend and hold harmless the other party from and against any loss, cost, orclaim or expense (including, but not limited to, all costs related to defense of any actionincluding reasonable attorneys’ fees) based upon, arising out of or occurring as a result of anysuch claim or assignment to transfer.10. No Right to Rescission: The Parties represent and warrant that they haveconducted all necessary investigations and have consulted with counsel and are not relying on anyrepresentations, except those contained in this Agreement and the Parties assume the risk of anyuntruths regarding any matters upon which they have relied and forever waive any rights to rescindthis Agreement and the sole remedy for the Parties is to enforce the terms of this Agreement.11. Severability: In the event that any provision hereof becomes declared by a courtof competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue infull force and effect without said illegal provision.12 Entire Agreement: This Agreement represents the entire agreement and understandingbetween the Parties, and represents the complete, final and exclusive embodiment of their agreementconcerning the matters set forth in the Recitals. Further, this Agreement shall supersede andreplace any and all prior and contemporaneous agreements, representations and understandingsregarding the subject of this Agreement. Notwithstanding the provisions of California EvidenceCode Section 1152, this Agreement is admissible for purposes of enforcement.          Initials   Initials
 
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13. Governing Law: This Agreement shall be governed by the laws of the State ofCalifornia. By signing this Agreement, the Parties hereby agree and submit to the jurisdiction ofthe courts in California and that venue of any suit or action shall be in the downtown branch ofthe courts of San Diego County, California.14. Counterparts: This Agreement may be executed in counterparts and each counterpartshall have the same force and effect as an original and constitute an effective, binding agreementon the part of each of the undersigned. The Agreement may be transmitted by facsimile orotherwise.15. No Construction Against the Drafter: This Agreement shall be deemed jointlydrafted and written by all parties to it and shall not be construed or interpreted against anyparticular party, regardless of which party or counsel originated or drafted any portion of it.16. Enforcement of Settlement: In the event of any litigation to enforce the terms ofthis Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees, as well as tosuch costs as may be awardable to the prevailing party by rule or statute in the court in which theaction is brought.17. No Implied Waiver: No action or failure to act shall constitute a waiver of anyright or duty afforded under this Agreement, nor shall any action or failure to act constitute anapproval of, or acquiescence in, any breach, except as may be specifically agreed in writing.Waiver of any on provision herein shall not be deemed to be a waiver of any other provision herein.IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first set forthabove.     **LA JOLLA COVE INVESTORS, INC.**       By: