Document:

Exhibit 10.4

 

 

 

 

 

 

 

 

 

 

SUPPLY AND COMMERCIALIZATION AGREEMENT

BY AND BETWEEN

GUANGZHOU
INTER-PACIFIC ARTS CORP.

AND

VIASPACE GREEN ENERGY, INC.

 

 

 

 

 

 

September 30, 2012

 

 

 

 

 

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SUPPLY, LICENSE AND COMMERCIALIZATION

AGREEMENT BY AND BETWEEN

GUANGZHOU
INTER-PACIFIC ARTS CORP.

AND

VIASPACE GREEN ENERGY, INC.

 

THIS SUPPLY, LICENSE
AND COMMERCIALIZATION AGREEMENT (the “Agreement”) is entered into as of the 30th day of September 2012 (the “Effective
Date”) by and between Guangzhou Inter-Pacific Arts Corp., a company formed under the laws of the
People’s Republic of China, with offices located in the Guangdong province (“IPA China”) and VIASPACE Green Energy,
Inc., a British Virgin Islands company (“VGE”). IPA China and VGE are sometimes referred to herein individually
as a “Party” and collectively as the “Parties.” Except as otherwise defined within the text, capitalized
terms and phrases shall have the meaning ascribed thereto in Article 1 of this Agreement.

 

RECITALS:

 

IPA China controls
certain know-how and other rights related to Giant King Grass. Through its stock ownership in IPA China through the Effective Date,
VGE has garnered considerable knowledge and experience in promoting and marketing Giant King Grass. IPA China and VGE believe that
a license and supply arrangement regarding Giant King Grass would be desirable and beneficial to both Parties. On and subject to
the terms and conditions set forth herein, IPA China and VGE therefore desire to provide for the supply and commercialization of
Giant King Grass as described herein.

 

NOW, THEREFORE,
in consideration of the covenants and conditions set forth in this Agreement, the receipt and sufficiency of which are hereby acknowledged,
the Parties hereby enter into this Agreement:

 

ARTICLE 1

DEFINITIONS

 

For the purpose of this Agreement, the
following expressions shall have the meanings ascribed thereto as follows, unless the context expressly requires otherwise:

 

“Action” shall mean
any claim, action, cause of action or suit (whether in contract or tort or otherwise), litigation (whether at law or in equity,
whether civil or criminal), assessment, arbitration, investigation, hearing, charge, complaint, or other legal proceeding.

 

“Affiliate” shall mean
any entity that controls, is controlled by, or is under common control with a Party. Without limiting the generality of the foregoing,
a Person shall be regarded as in control of another Person if it, directly or indirectly, owns, controls or otherwise possesses:
(a) in excess of fifty percent (50%) of the voting stock or other applicable ownership interest thereof of the other Person or
(b) the power to direct or cause the direction of the management and policies of such other Person.

 

“Business Day” shall
mean a day on which banking institutions in both Atlanta, Georgia and Los Angeles, California are open for business.

 

“Commercial License”
shall have the meaning ascribed thereto in Section 2.1(a) of this Agreement.

 

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“Commercialization”
or “Commercialize” shall mean to import, grow, sell, market and distribute a product, plant or material.

 

“Competitive Product”
shall have the meaning ascribed thereto in Section 2.2 of this Agreement.

 

“Confidential Information”
shall mean any and all technical, financial, business and other information, including, without limitation, Trade Secrets, that
is (a) of tangible or intangible value to the Disclosing Party or of any Affiliate thereof or any Business Contact of Disclosing
Party or any such Affiliate, or (b) otherwise clearly marked by such Party or Affiliate thereof as confidential at the time of
disclosure or, if disclosed orally or visually, is stated to be confidential and is subsequently documented in writing or other
tangible form with such conspicuous designation that is delivered to the Receiving Party within a reasonable period of time following
any such disclosure, which information shall be deemed to include, without limitation, financing structures and proposals, proprietary
technology, concepts, designs, ideas, inventions, research, development, compounds, biological materials, patent applications,
know-how and other intellectual property rights; the work product; business contacts and other customers and suppliers and agreements
or understanding with any of them; pricing information and strategy; business practices, procedures, processes, methodologies,
plans, techniques and strategies; standard operating procedures; product specifications (including, without limitation, the genetic
or biologic composition or makeup thereof) and testing results, financial information (such as tax returns, financial statements,
accounting records, audit letters, work papers, expert opinions); counsel and other advisory opinions; and all other information
relating thereto, along with this Agreement and any term or condition hereof, and any and all such information of any Third Party
that is provided to us under restrictions on either disclosure or use (or both). Notwithstanding the foregoing, Confidential Information
shall not include information that (a) is known to the Receiving Party at the time of the disclosure, as evidenced by its written
records; (b) is disclosed to the Receiving Party by a Third Party lawfully in possession of such information and not under an obligation
of nondisclosure; (c) is or becomes patented, published or otherwise part of the public domain through no fault of the Receiving
Party; (d) is developed by or for the Receiving Party independently of Confidential Information disclosed hereunder as evidenced
by Receiving Party’s written records or other competent evidence; or (e) is required by law to be disclosed by Receiving
Party, provided that the Receiving Party gives the Disclosing Party hereto prompt notice of such legal requirement such that such
Disclosing Party shall have the opportunity to apply for confidential treatment of such Confidential Information. For purposes
of this Agreement, the following information shall be deemed to constitute the Confidential Information of IPA China: any and all
proprietary technology, concepts, designs, ideas, inventions, research, development, compounds, biological materials, patent applications,
know-how and other intellectual property rights; work product; procedures, processes, methodologies, plans, techniques and strategies;
standard operating procedures; product specifications (including, without limitation, the genetic or biologic composition or makeup
thereof) and testing results for, relating to or arising out of the IPA China IP, including, without limitation, GKG and GKG IP.

 

“Contract Year” shall
mean a period consisting of twelve (12) consecutive calendar months commencing on the Effective Date or anniversary thereof of
each year.

 

“Control” or “Controlled”
shall mean, shall mean, with respect to any intellectual property right or other intangible property, the ability of a Party or
its Affiliates to grant to any other Person a license or sublicense to use such rights without violating the rights of any Third
Party.

 

“Deliver” or “Delivery”
shall mean delivery to VGE or a customer thereof of a product described in a Purchase Order issued to IPA China pursuant to this
Agreement.

 

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“Designated Representatives”
shall mean those officers, directors, employees and agents of Receiving Party, who are provided Confidential Information and other
proprietary information on a “need to know” basis only and are directed and required in writing by such Receiving Party
to both maintain the disclosed information in strict confidence and exclusively use such information solely in connection with
performing such Party’s obligations under this Agreement.

 

“Disclosing Party” shall
mean that Party that is making a disclosure of its Confidential Information or Trade Secrets (or both) to the Receiving Party.

 

“Dollar” and the symbol
“$” mean lawful money of the United States of America.

 

“Final Product Transfer Price”
or “FPTP” shall mean the actual cost of Manufacturing, along with the fully allocated overhead associated therewith,
for Giant King Grass Delivered to VGE under this Agreement, which cost shall be determined in accordance with GAAP and fixed for
the first Contract Year and then increased thereafter by 15% for each succeeding Contract Year or such greater costs and expenses
to the extent the same are substantiated to VGE. For example, as of the Effective Date, the FPTP for 45,000 GKG nodes is $1,800.

 

“First Commercial Launch”
shall mean the date on which occurs the first commercial sale of the Product or Process in each country within the VGE Territory.

 

“GAAP” shall mean United
States generally accepted accounting principles applied on a consistent basis. Unless otherwise defined or stated, financial terms
shall be calculated by the accrual method under GAAP.

 

“GKG IP” shall mean
the GKG Tradename and the customer list relating to Giant King Grass and the contact information identified therein.

 

“GKG Tradename” shall
mean the name “Giant King Grass,” “GKG” or any other derivative thereof.

 

“Giant King Grass” or
“GKG” shall mean the high yield, non-genetically modified, natural hybrid grass that was received and licensed by VGE
from IPA China under the Parent License (as defined in Section 8.2).

 

“Improvements” shall
mean any and all procedures, processes, developments, modifications, derivatives, uses or other inventions or discoveries on or
relating to Giant King Grass.

 

“Intellectual Property Rights”
or “IP” shall mean patents, patent applications, trademarks, trademark applications, trademark registrations,
tradenames, service marks, copyright, copyright applications and registrations, Trade Secret and all other such intellectual property
rights.

 

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

 

“Legal Fees” shall mean
the fees and expenses (including attorneys’ fees) not to exceed $40,000 incurred by Sung Chang or IPA China or any other
Affiliate thereof (as determined after the Effective Date) in connection with the negotiation and preparation of this Agreement
and all documents relating thereto and the recapitalization of IPA China and any and all documents relating thereto.

 

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“Manufacturing” or “Manufacture”
shall mean activities directed to planting, growing, harvesting, producing, manufacturing, processing, filling, finishing, packaging,
storage and quality assurance testing of a product, plant or material, whether in bulk or finished goods or otherwise.

 

“Net Sales” means, for
any period, the aggregate gross amounts invoiced for sales of a Product or any Improvement thereon or Process relating thereto
in the VGE Territory (“Gross Sales”), less good faith estimates of the following deductions to the extent specifically
relating to sales and normal and customary for a product of the nature of Giant King Grass and evidenced by independent substantiation,
which shall be adjusted to actual on a periodic basis (no less frequently than annually):

 

(a)Credits
or allowances actually granted for damaged Giant King Grass, returns or rejections of Giant King Grass, chargebacks, price adjustments
and billing errors taken within 12 months of the initial sale to which they relate, each to the extent consistent with a Party’s
usual course of dealing for its products other than Giant King Grass;

 

(b)Normal
and customary trade, cash and quantity discounts, allowances and credits, in amounts customary in the trade not to exceed Seven
Percent (7%) of the invoice amount actually paid or granted in respect of each such sale, each to the extent consistent with a
Party’s usual course of dealing for its products other than Giant King Grass;

 

(c)Commissions;

 

(d)Sales
taxes, VAT and other taxes applied to the sale of Giant King Grass to the extent included in the gross amount invoiced; and

 

(e)An
allowance for bad debt, which shall in no event be greater than an amount reasonably approved by VGE’s independent auditors.

 

“Person” shall mean
an individual, corporation, company, partnership, organization or any similar entity.

 

“Pick Up Date” shall
mean the date on which Delivery is made in accordance with Article 5 of this Agreement.

 

“Process” shall mean
any process relating to a Product that is developed, made or manufactured from IPA China Confidential Information, which, as the
case may be, has not been made the subject of a public disclosure or that has not otherwise become available to the public, except
through the issuance of a patent.

 

“Product” shall mean any material,
plant, or product comprised, in whole or in part, of Giant King Grass.

 

“Receiving Party” shall
mean the Party that is in receipt of the Confidential Information delivered to it by the Disclosing Party.

 

“Term” shall mean the
term of this Agreement as defined in Section 10.1 hereof.

 

“Third Party” shall
mean any Person other than a Party under this Agreement.

 

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“Trade Secrets” shall
mean each respective Party’s know-how and other proprietary information (including, but not limited to business information,
technical or non-technical data, financial data, financial plans, lists of customers or suppliers) 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. For purposes of this Agreement, the following Confidential Information shall be deemed to constitute
the Trade Secrets of IPA China: any and all proprietary technology, concepts, designs, ideas, inventions, research, development,
compounds, biological materials, patent applications, know-how and other intellectual property rights; work product; procedures,
processes, methodologies, plans, techniques and strategies; standard operating procedures; product specifications (including, without
limitation, the genetic or biologic composition or makeup thereof and parent plants) and testing results for, relating to or arising
out of the IPA China IP, including, without limitation, GKG and GKG IP.

 

“VGE Territory” shall
mean the world.

 

ARTICLE 2

GRANT OF LICENSE

AND

APPOINTMENT OF DISTRIBUTOR

 

2.1Commercialization
License. Subject to the terms and conditions of this Agreement, including, without limitation, the payment of the FPTP, royalties
and any and all other fees, costs and expenses described in and Section 8.2 of this Agreement, IPA China hereby grants to VGE for
the Term a nontransferable, royalty-bearing exclusive license to Commercialize Giant King Grass within the VGE Territory and to
use the GKG IP and IPA China Tradename, including, without limitation, to reproduce and publicly display the IPA China Tradename
and GKG Tradename solely in connection with its license to Commercialize Giant King Grass and as otherwise provided in this Agreement,
with rights of and to sublicense without approval by IPA China (the “Commercial License”). VGE shall use the IPA China
Tradename and GKG IP only for the purposes set forth in this Agreement and in compliance with applicable laws. VGE agrees that
it will do nothing inconsistent with IPA China’s ownership of the IPA China Tradename or GKG IP, with its use thereof inuring
to the benefit of and be on behalf of IPA China as the licensor. VGE shall use the IPA China Tradename and GKG Tradename in such
manner that it creates a separate and distinct impression from any other trademark, tradename or service mark and maintain at all
times during the Term the good name and reputation of IPA China and such tradenames.

 

2.2IPA China’s
Restrictive Covenants. Except as otherwise provided in this Agreement, as of the Effective Date and for the Term, IPA China
will refrain from directly or indirectly, including, without limitation, through a third party, (a) attempting to commercialize
or commercialize Giant King Grass in the VGE Territory, or (b) the Manufacture, Commercialization or research or development of
a grass similar or otherwise having competitive properties to Giant King Grass (or attempting such actions) in the VGE Territory
other than in the People’s Republic of China and Taiwan; or (c) knowingly supplying GKG or otherwise licensing GKG IP within
the other than in the People’s Republic of China and Taiwan for resale or use of GKG within other parts of the VGE Territory.

 

ARTICLE 3

RESERVATION OF RIGHTS

 

Except as expressly granted under the Commercial
License, IPA China reserves to itself any and all rights to the Giant King Grass and the IPA China IP.

 

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ARTICLE 4

COMMERCIALIZATION

 

Reporting
of Sales. VGE shall provide to IPA China detailed written reports within thirty (30) days
following the last day of each calendar quarter (commencing with the first calendar quarter during a Contract Year in which the
First Commercial Sale is made of any Giant King Grass in the VGE Territory), which reports shall account for unit volume, gross
sales price and any and all reductions or adjustments thereto, Net Sales and Giant King Grass inventories, which records shall
be maintained for the period described in Section 6.4(a) of this Agreement.

 

ARTICLE 5

SUPPLY OF PRODUCTS

 

5.1In General.
VGE purchase orders for Giant King Grass seedlings will be filled at the Final Product Transfer Price, plus any amounts described
in Section 6.8, below, with any all such amounts being paid by VGE to IPA China on or before Delivery.

 

5.2Growing Costs.
IPA China will pay the ongoing expenses for Giant King Grass currently growing in the Guangdong province, and VGE will pay the
expenses for any other test plots grown at VGE’s request and approved by IPA China. Consistent with such efforts, upon reasonable
prior notice, IPA China will allow VGE, at VGE’s sole cost and expense, to visit the Giant King Grass location and test plots
controlled by IPA China or any Affiliate thereof in the Guangdong province with current and potential customers upon reasonable
prior notice, and IPA China will be allowed to visit all such locations and growing locations controlled by VGE or any Affiliate
thereof or any customer distributor or such other vendor of VGE or any such Affiliate.

 

5.3Purchase
Orders. VGE or its customers shall submit to IPA China purchase orders for Giant King Grass (“Purchase Orders”)
for purchase of the Product at the FPTP at least sixty (60) days before Delivery, which date shall be set forth in the Purchase
Order. Each Purchase Order shall be in writing and shall specify (a) the quantity of Giant King Grass to be delivered; (b) VGE’s
required Pick Up Date of such Giant King Grass, provided, however, that in no event shall the Pick Up Date be sooner
than sixty (60) days after the date of the Purchase Order; and (c) the name, address and phone number of the person to receive
the notice of receipt.

 

5.4Acceptance
of Purchase Orders. Provided that VGE has complied with Sections 5.3 and 5.4, IPA China shall accept and use its commercially
reasonable efforts (subject to Section 12.1 of this Agreement; e.g., the failure of GKG to grow in the winter months) to
fulfill the Purchase Orders. In the event that IPA China wishes to reject a Purchase Order due to a failure by VGE to comply with
Sections 5.3 or 5.4, it shall notify VGE of its decision to do so within ten (10) Business Days after IPA China’s receipt
of the Purchase Order with an explanation of the reasons for the rejection.

 

5.5Purchase
Order Changes. If VGE requests changes to any Purchase Order prior to the Pick Up Date of Giant King Grass, IPA China will
attempt to accommodate such changes within its reasonable distribution capabilities and efficiencies. IPA China shall advise VGE
of its fully burdened costs associated with making any such change and VGE shall be deemed to have accepted the obligation to pay
IPA China for such costs if VGE directs IPA China in writing to proceed to make the change after receiving notice of such costs.

 

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5.6Standard
Terms. It is understood that each Party may, for convenience, use its own standard pre-printed forms of the Purchase Orders,
acknowledgements, acceptances or invoices in the performance of its obligations hereunder; provided, however, that
any terms, conditions or provisions in such pre-printed forms which are inconsistent with or which modify or supplement this Agreement
shall be null and void.

 

5.7Invoicing
and Delivery of Giant King Grass. IPA China shall invoice VGE upon or as soon as reasonably practicable following its receipt
and acceptance of a Purchase Order for the Delivery of Giant King Grass. Except as otherwise provided in IPA China’s invoice,
VGE shall pay the invoiced amount in no event later than the Pick Up Date. Each order of Giant King Grass under a VGE Purchase
Order may be picked up by VGE after the Pick Up Date, but in no event prior to the date on which VGE shall have paid in full the
invoiced amount, with Delivery being deemed accepted by VGE upon and coincident with the Pick Up Date. Delivery shall be made EXW
(Incoterms 2010) at the Guangdong airport location for VGE’s designated common carrier in the Peoples Republic of China,
with IPA China having no responsibility to VGE for any losses, damages, costs or expenses for or resulting from Delivery on or
after the Pick Up Date or for failure to Deliver or failure to timely Deliver Giant King Grass due to an event described in Section
12.1 of this Agreement.

 

ARTICLE 6

PURCHASE PRICE, MILESTONE

AND

ROYALTY PAYMENTS

 

6.1Final Giant
King Grass Transfer Price.  VGE shall pay to IPA China on or before the Pick Up Date the per unit FPTP for the Giant King Grass
Delivered by IPA China in accordance with each respective or applicable Purchase Order as provided in Article 5 above.

 

6.2Royalty Payments.
In consideration for the Commercial License, VGE shall pay to IPA China the royalties on its Net Sales of Giant King Grass as set
forth on that Exhibit “A,” entitled “Royalty Payments.”

 

6.3Royalty Reports;
Payment Due Dates.

 

(a)In
General. VGE shall maintain its customary form of records reasonably required, which records shall (i) be complete, true and accurate
in all material respects, (ii) reflect the computation of the amounts due and owing to IPA China, on a country-by-country basis,
including, without limitation, the Royalty Report below, (iii) be in sufficient detail so as to enable IPA China to confirm compliance
by VGE of its obligations under this Agreement and (iv) be maintained for at least three (3) years after the end of each Contract
Year during the Term.

 

(b)Royalty
Report. In addition to the reports to be provided to IPA China under Section 4.3 of this Agreement, VGE shall provide IPA China
a non-binding royalty estimate within fifteen (15) days after close of each calendar quarter. VGE will provide to IPA China, at
the same time as each royalty payment is made, a complete, true and accurate written report showing: (i) the gross sales made for
purposes of calculating Net Sales and the calculation of Net Sales determined from such gross sales for and during the applicable
calendar quarter period, along with any and all reductions from such gross sales; (ii) the calculation of the royalty due and payable
for such reporting period; (iv) the First Commercial Launch date(s) of the Product or Process in each country within the VGE Territory;
and (v) any other information reasonably requested by IPA China to verify the accuracy of the royalty payments hereunder.

 

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(c)IPA
China’s Right to Audit. VGE shall, not more than one time per Contract Year, during normal business hours, permit auditors
designated by IPA China, at IPA China’s expense and upon thirty (30) days written notice, full rights of inspection and audit
of VGE’s books, records and operations, including, without limitation, any and all of the manufacturing, sales and growing
locations of VGE and any customer, affiliate, distributor or other such vendor thereof.

 

(d)Handling
of Underpayment. In the event that the audit contemplated in this paragraph reveals any underpayment, VGE shall remit promptly,
but in no event later than thirty (30) days following the date on which any such audit results are presented to VGE, to IPA China
the amounts thereof, and if VGE fails to remit payment within such 30 day period, IPA China shall be permitted to pursue all legal
and equitable remedies available to it pursuant to this Agreement as well as all applicable laws. In the event that the underpayment
is more than five percent (5%) of the amount due for the period audited, VGE shall also remit to IPA China the entire reasonable
and documented cost of such audit.

 

6.4Payment Terms.
All payments to be made pursuant to this Agreement shall be made by VGE to IPA China in United States Dollars. All late payments
shall accrue interest from the date owing until paid in full at a rate equal to the lower of fifteen percent (15%) per annum or
the highest rate permitted by applicable law.

 

6.5Foreign Exchange.
With respect to Net Sales invoiced or expenses incurred in United States Dollars, the Net Sales or expense amounts and the amounts
due to IPA China under this Agreement shall be expressed in United States Dollars. With respect to Net Sales invoiced or expenses
incurred in a currency other than United States Dollars, the Net Sales or expense shall be expressed in the currency in which such
Net Sales were invoiced or such expense was incurred, together with the United States Dollar equivalent, calculated using the average
of the spot rate on the first and last Business Days of the Calendar Quarter in which the Net Sales were made or the expense was
incurred. The 12:00 Noon Buying Rates, as certified by the NY Federal Reserve Bank (currently and historical rates can be found
on their website at www.ny.frb.org), shall be used as the source of spot rates.

 

6.6Blocked Payments.
In the event that, by reason of applicable laws or regulations in any country, it becomes impossible or illegal for VGE or any
Affiliate or sublicensee thereof, to transfer, or have transferred on its behalf, fees or other payments due to IPA China under
this Agreement, VGE shall promptly notify in writing IPA China of the conditions preventing such transfer and such fees or other
payments shall be deposited in local currency in the relevant country to the credit of IPA China in a recognized banking institution
designated by IPA China or, if none is designated by IPA China within a period of thirty (30) days, in a recognized banking
institution selected by VGE or its Affiliate or sublicensee, as the case may be, and identified in a written notice delivered to
IPA China.

 

6.7Taxes.
Any federal, state, county or municipal sales or use tax, excise, customs charges, duties or similar charge, value-added tax or
any other tax assessment (other than that assessed against income), license, fee or other charge lawfully assessed or charged on
the Manufacture, sale or transportation of Giant King Grass sold to VGE by IPA China pursuant to this Agreement (“Taxes”)
shall be the responsibility of VGE. Should VGE be obligated by law to withhold any Taxes on payments made to IPA China for product
invoiced under this Agreement, the payment due hereunder shall be increased such that after the withholding of the appropriate
amount, IPA China receives the amount that would have been paid but for the Taxes withheld. VGE shall pay all such Taxes in a timely
manner and promptly provide IPA China with a receipt evidencing such payment. Should IPA China be obligated to pay such Taxes,
and such Taxes were not satisfied by way of withholding, VGE shall promptly reimburse IPA China for such payment, in an amount
such that after the payment of the Taxes, IPA China has received the same amount that it would have received had such Taxes not
been payable. Such taxes shall be reflected on the invoices as provided in the Article 5 of this Agreement.

 

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ARTICLE 7

[Reserved.]

 

ARTICLE 8

INTELLECTUAL PROPERTY

 

8.1IPA
China’s Ownership of Giant King Grass. As between the parties, IPA China owns and shall
retain all right, title and interest in and to Giant King Grass, the IPA China Tradename and the GKG IP and any and all other intellectual
property relating thereto, whether in or outside of the VGE Territory, including any and all modifications, improvements and other
Results relating to Giant King Grass, whether created, invented or otherwise developed by VGE or any Affiliate thereof or any director,
employee, contractor or agent of either VGE or any such Affiliate thereof (the “IPA China IP”). All registrations,
trademarks, domain names and other Intellectual Property right relating to IPA China IP shall be registered in the name of IPA
China, and any IPA China IP in the name or possession of VGE will immediately be assigned, transferred or returned to IPA China
as a condition to the Commercial License.

 

8.2IPA China
Intellectual Property. This Agreement, to include, without limitation the Commercial License, is a sublicense and, as such,
is subject to and expressly limited by the terms and conditions of that certain license, which itself is a sublicense, entered
into by and between IPA China and its licensor (the “Parent License”) and that certain
license entered into by and between the licensee under the Parent License and the original licensor (the “Grandparent License”),
and notwithstanding any provision of this Agreement to the contrary, IPA China grants no right and makes no covenant to VGE that
is broader than or otherwise exceeds the scope of rights and covenants granted to IPA China under either (or both of) the Parent
License or Grandparent License, as the case may be. To the knowledge of IPA China, no act or omission has occurred since the 30th
day of July 2012 that would have a material adverse effect on the Parent License. IPA China hereby agrees to use commercially reasonable
efforts to maintain the Parent License in accordance with its terms and condition.

 

8.3Review of
Use. IPA China shall have the right to review and approve in advance VGE’s use of the IPA China Tradename and GKG Tradename,
which approval shall not be unreasonably withheld, delayed or conditioned. VGE shall make as soon as reasonably practicable all
changes to the usage of either the IPA China Tradename or GKG Tradename on any documents and materials containing either such tradename
as reasonably requested by IPA China.

 

8.4Inspection.
IPA China shall have the right, at its expense, to inspect at reasonable times, either itself or through its duly authorized representatives,
all or any portion of VGE’s books, records, properties and facilities, and advertising and marketing documents. To the extent
applicable, such inspection shall be made in accordance with Section 6.4 (c). VGE agrees to cooperate fully with any such inspection
by IPA China and make VGE’s employees available to answer IPA China’s questions as part of such inspection.

 

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8.5IPA China
Intellectual Property. VGE shall promptly notify IPA China of all IPA China Intellectual Property of which it becomes aware.
VGE hereby assigns and shall assign to IPA China all of VGE’s right, title and interest in and to the IPA China Intellectual
Property. VGE shall provide IPA China with reasonable assistance, at IPA China’s cost (except as set forth in this Section),
to obtain, perfect and enforce all rights, title and interest in the IPA China Intellectual Property, including, without limitation,
the execution of any patent applications and assignment agreements as and to the extent IPA China elects to obtain, perfect, prosecute
or enforce any such applications and assignments. In the event IPA China is unable to secure VGE’s signature on any document
hereunder, VGE designates and appoints IPA China and its duly authorized representatives as its agents and attorneys-in-fact to
act for and on its behalf to execute such documents. Consistent with the forgoing, IPA China will be responsible for, at IPA China’s
sole election, cost and expense, the filing and prosecution of any and all Intellectual Property Rights in the VGE Territory with
respect to Giant King Grass or any IPA China IP.

 

8.6Notice, Enforcement
and Defense of Intellectual Property Infringement.  VGE agrees to promptly notify IPA China of any conflicting use or any suspected
act of infringement, passing-off or unfair competition involving the IPA China Intellectual Property by any Third Party, or any
allegations that the sale or use of the IPA China Intellectual Property within the VGE Territory infringe upon the Intellectual
Property Rights of any Third Party, of which VGE may become aware. IPA China shall have the sole and exclusive right, at IPA China’s
sole discretion, to prosecute, maintain and enforce all IPA China IP and prosecute or defend any and all infringement actions against
any Person infringing Giant King Grass or any Intellectual Property right relating to the IPA China IP, including, without limitation,
to engage in any and all court proceedings necessary to protect its rights in the IPA China Intellectual Property or to settle
any disputes involving such unauthorized acts or such allegations relating thereto, with IPA China retaining any and all recoveries;
provided that if IPA China fails to enforce the GKG IP, then VGE shall have, to the extent permitted under applicable law, the
right and power, at its sole cost and expense to do so. Further, VGE agrees to fully cooperate with IPA China at IPA China’s
request (and at IPA China’s cost) to help terminate such activities by Third Parties, but shall not, without the express
written consent of IPA China, engage in any court proceedings against, enter into any settlement discussions with or in any other
way attempt to terminate said activities by Third Parties.

 

ARTICLE 9

CONFIDENTIALITY

 

9.1Confidentiality.
Except as and to the extent related to the discharge of its duties and obligations under this Agreement, the Receiving Party agrees
that all Confidential Information disclosed by the Disclosing Party or any Affiliate thereof to VGE hereunder shall be received
and maintained by the VGE in strict confidence, shall not be used for any purpose whatsoever, and shall not be disclosed to any
Third Party (including, without limitation in connection with any publications, presentations or other disclosures) other than
its Designated Representatives for the Term of this Agreement and for a period of five (5) years following the termination or expiration
of this Agreement; except, however, that in the case of Confidential Information that otherwise constitutes a Trade
Secret, the Disclosing Party hereby agrees that it shall in no event disclose any such information to Third Parties other than
its Designated Representatives for the period during which any such information shall continue to constitute a trade secret under
applicable law.

 

9.2Return of
Confidential Information. The Receiving Party shall keep the Confidential Information owned or in which rights are held by
the Disclosing Party or any Affiliate thereof in appropriately secure locations. Upon the expiration or termination of this Agreement,
any and all such Confidential Information possessed in tangible form by the Receiving Party, shall, upon written request, be immediately
returned to the Disclosing Party (or destroyed if so requested) and not retained by the Receiving Party.

 

    	Page 11

    	 

    
 

9.3Ancillary
Agreement. This Article 9 shall be construed as an agreement ancillary to the other provisions of this Agreement, and the existence
of any claim or cause of action of one party against the other, whether predicated on this Agreement or otherwise, shall not constitute
a defense to the enforcement of this Article.

 

ARTICLE 10

TERM; TERMINATION

 

10.1Term.
Unless sooner terminated as otherwise provided in this Agreement, the term of this Agreement shall commence on the Effective Date
and shall continue thereafter in full force and effect in perpetuity.

 

10.2Grounds
for Termination.

 

(a)Termination
by Mutual Agreement. This agreement may be terminated by mutual written agreement of the Parties.

 

(b)Termination
For Cause. Either Party may terminate this Agreement for cause if the other party materially breaches this Agreement, which
breach is not cured to the reasonable satisfaction of the non-breaching party within thirty (30) days after written notice from
the non-breaching Party specifying the material breach; provided, however, that in the case of a breach of this Agreement
on account of any failure to pay timely by VGE, the period for cure of any such breach shall be ten (10) days, with VGE having
the right to cure any such payment default not more than once during any twelve (12) consecutive calendar monthly period. Consistent
with the foregoing, IPA China shall have the right, in its sole and absolute discretion, to cease Delivery of any Giant King Grass
until VGE has cured any such material breach for which it is given notice under this Agreement; provided, however,
that if and to the extent VGE shall have fully paid for finished product that is the subject of an invoice, then IPA China will
nevertheless Deliver such product in accordance with Article 5.

 

(c)Termination
for Insolvency. To the extent permitted by applicable laws, either Party may terminate this Agreement upon written notice to
the other Party on or after the occurrence of any of the following events: (i) the appointment of a trustee, receiver or custodian
for all or substantially all of the property of the other Party, which appointment is not dismissed within ninety (90) days, (ii)
the filing of a petition for relief in bankruptcy by the other Party on its own behalf, or the filing of any such petition against
the other Party if the proceeding is not dismissed or withdrawn within ninety (90) days thereafter, or (iii) insolvency, dissolution
or liquidation of or an assignment for the benefit of creditors by a Party.

 

(d)Termination
of Parent or Grandparent License. If by virtue of any termination of either the Parent License or Grandparent License, IPA China
is unable to otherwise perform its material obligations hereunder, this Agreement may be terminated by either Party upon ten (10)
days written notice.

 

    	Page 12

    	 

    
 

10.3Consequences
of Termination.

 

(a)Termination
of Agreement. Upon any termination or other expiration of this Agreement, among other things, the Commercial License shall
terminate and VGE shall forthwith terminate and cease its use of Giant King Grass and the IPA China IP and any further Commercialization
of Giant King Grass in the VGE Territory. Immediately upon any such termination or expiration, all rights of VGE to the IPA China
IP, including, without limitation, the Giant King Grass and GKG IP, along with any and all other Intellectual Property relating
thereto, shall terminate and revert to IPA China.

 

(b)Conversion
To Nonexclusive License. In lieu of terminating this Agreement under Section 10.2(b) above, IPA China may, in its sole discretion,
elect to convert this Agreement and the rights hereunder to a nonexclusive license for the remainder of the applicable Initial
Term or Renewal Term, in which event such nonexclusive license shall be subordinate to the grant thereafter by IPA China of any
rights therein to a Third Party and the provisions of Section 2.3 of this Agreement shall upon and coincident therewith be and
become thereafter null and void as and to the extent otherwise applicable to IPA China or any Affiliate thereof or any third party
acting for and on behalf of IPA China or any such Affiliate.

 

(c)Return
of IPA China Property. Promptly upon, but in no event later than 15 consecutive calendar days thereafter, the expiration or
earlier termination of this Agreement, VGE, at VGE’s sole cost and expense, shall transfer, assign and otherwise deliver
unconditionally and irrevocably to IPA China all of the GKG IP, including, without limitation, the GKG Tradename, and any and all
books, records, reports, files, documents and other information relating thereto, and the IPA China IP and any and all other IPA
China property relating to Giant King Grass and the Commercialization thereof. VGE acknowledges and agrees that all rights, title
and interest in and to the foregoing shall remain exclusively with IPA China following termination of this Agreement.

 

(d)Reports.
VGE shall render an accounting to IPA China of any royalties and other payments that may be due to IPA China under the terms of
this Agreement.

 

(e)Sublicenses
of Licensed Technology. Upon the expiration or earlier termination of this Agreement, any and all sublicenses, if any, granted
under this Agreement shall terminate except as and to the extent expressly permitted otherwise thereunder.

 

10.4Survival.
The following Articles and Sections of this Agreement shall survive termination or expiration of this Agreement: Sections 4.3
and Articles 3, 5, 6, 8, 9, 10, 11 and 12 and any other provision which by its nature would continue past such expiration or termination.

 

ARTICLE 11

REPRESENTATIONS AND WARRANTIES;

INDEMNIFICATION; LIMITATION ON LIABILITY

 

11.1Compliance
with Laws. VGE shall comply in all material respects with all laws, regulations and standards applicable to the Commercialization
of Giant King Grass, including, without limitation, the handling, storage, marketing, distribution and sale thereof, in the VGE
Territory. IPA China shall comply in all material respects with all applicable laws regulating the Manufacture GKG under this Agreement.
IPA China shall not, and it shall cause its Affiliates and sublicensee, if any, to not, do anything that would materially adversely
affect the reputation of Giant King Grass within the IPA China Territory.

 

    	Page 13

    	 

    
 

11.2IPA
China Representations and Warranties. As of the Effective Date, IPA China makes the following representations and warranties
to VGE:

 

(a)Status.
IPA China is a corporation duly organized and validly existing under the laws of the British Virgin Islands. No action has been
taken by the directors, officers or stockholders of IPA China to dissolve IPA China. IPA China has the corporate power and authority
to enter into this Agreement and to perform all its obligations hereunder.

 

(b)All
Necessary Proceedings. IPA China has taken all necessary corporate actions and proceedings to enable it to enter into this
Agreement.

 

(c)No
Violation. Subject to Section 8.2 of this Agreement, the execution, delivery and performance of this Agreement by IPA China:
(i) does not and will not violate or conflict with, in any material respect, any applicable law or any provision of its certificate
of incorporation or bylaws; and (ii) does not and will not, in any material respect, with or without the passage of time or the
giving of notice, result in the breach of, or constitute a default under, any agreement or obligation between it and any Third
Party.

 

11.3VGE Representations
and Warranties. As of the Effective Date, VGE makes the following representations and warranties to IPA China:

 

(a)Status.
VGE is a corporation duly organized and validly existing under the laws of the State of Nevada. No action has been taken by the
directors, officers or shareholders of VGE to dissolve VGE. VGE has the corporate power to enter into this Agreement and to perform
all its obligations hereunder.

 

(b)All
Necessary Proceedings. VGE has taken all necessary corporate actions and proceedings to enable it to enter into this Agreement.

 

(c)No
Violation. The execution, delivery and performance of this Agreement by VGE: (i) does not and will not violate or conflict
with, in any material respect, applicable law, or any provision of its articles of incorporation or by-laws; and (ii) does not
and will not, with or without the passage of time or the giving of notice, result in the breach of, or constitute a default under,
or result in the creation of any lien, charge or encumbrance upon any of Giant King Grass or its property or assets pursuant to
any agreement or obligation between it and any Third Party.

 

(d)Compliance.
VGE has and shall continue to comply with all applicable laws relating to Commercialization, including, without limitation, to
the handling, storage, distribution and sale, of Giant King Grass in the VGE Territory. VGE shall not, and it shall cause its Affiliates
and sublicensee, if any, to not, do anything that would materially adversely affect the reputation and goodwill of IPA China or
of IPA China’s Affiliates or materially adversely affect the reputation of Giant King Grass or the IPA China Tradename.

 

11.4Indemnification
by VGE. VGE shall indemnify and hold harmless IPA China and each of its Affiliates and each director, officer, employee, agent,
successor and assign of IPA China and each such Affiliate (collectively, the “IPA China Indemnified Parties”), from,
against and in respect of any and all Actions and any liabilities, losses, costs (including costs of investigation, defense and
enforcement of this Agreement), damages, fines, penalties, expenses or amounts paid in settlement (in each case, including reasonably
and actually incurred attorneys' and experts fees and expenses) of any such Actions asserted by a Third Party against any of the
IPA China Indemnified Parties as a result of, arising out of or relating to, directly or indirectly, any one or all of the following:
(i) Giant King Grass, including, without limitation, the manufacturing, supply, marketing, sale, distribution or other Commercialization
of any Product, Improvement or Process thereof; (ii) any breach of, or inaccuracy in, any representation or warranty made by VGE
under this Agreement; or (iii) any breach or violation of any covenant or agreement by VGE or other VGE Indemnified Party (including
under this Section) under or pursuant to this Agreement.

 

    	Page 14

    	 

    
 

11.5Indemnification
by IPA China. IPA China shall indemnify and hold harmless VGE and each of its Affiliates and each director, officer, employee,
agent, successor and assign thereof (collectively, the “VGE Indemnified Parties”), from, against and in respect of
any and all Actions and any liabilities, losses, costs (including costs of investigation, defense and enforcement of this Agreement),
damages, fines, penalties, expenses or amounts paid in settlement (in each case, including reasonably and actually incurred attorneys'
and experts fees and expenses) of any such Actions asserted by a Third Party against any of the VGE Indemnified Parties as a result
of, arising out of or relating to, directly or indirectly, any one or all of the following: (i) any breach of, or inaccuracy in,
any representation or warranty made by IPA China in this Agreement; or (ii) any material breach or violation of any covenant or
agreement of IPA China or other IPA China Indemnified Party (including under this Section) under or pursuant to this Agreement.

 

11.6Indemnification
Claims.

 

(a)A
person entitled to indemnification under this Section (an “Indemnified Party”) shall give prompt written notification
to the person from whom indemnification is sought (the “Indemnifying Party”) of the commencement of any action, suit
or proceeding relating to a Third Party claim for which indemnification may be sought or, if earlier, upon the assertion of any
such claim by a Third Party (it being understood and agreed, however, that the failure by an Indemnified Party to give notice of
a Third Party claim as provided in this Section shall not relieve the Indemnifying Party of its indemnification obligation under
this Agreement except and only to the extent that such Indemnifying Party is actually prejudiced as a result of such failure to
give notice).

 

(b)Within
thirty (30) days after delivery of such notification, the Indemnifying Party may, upon written notice thereof to the Indemnified
Party, assume control of the defense of such action, suit, proceeding or claim. If the Indemnifying Party does not assume control
of such defense, the Indemnified Party shall control such defense.

 

(c)The
Party not controlling such defense may participate therein at its own expense; provided, however, that if the Indemnifying
Party assumes control of such defense and the Indemnified Party reasonably concludes, based on advice from counsel, that the Indemnifying
Party and the Indemnified Party have conflicting interests with respect to such action, suit, proceeding or claim, the Indemnifying
Party shall be responsible for the reasonable fees and expenses of counsel to the Indemnified Party solely in connection therewith;
provided, further, that in no event shall the Indemnifying Party be responsible for the fees and expenses of more
than one counsel in any one jurisdiction for all Indemnified Parties.

 

(d)The
Party controlling such defense shall keep the other Party advised of the status of such action, suit, proceeding or claim and the
defense thereof and shall consider recommendations made by the other Party with respect thereto.

 

(e)The
Indemnified Party shall not agree to any settlement of such action, suit, proceeding or claim without the prior written consent
of the Indemnifying Party, which consent shall not be unreasonably withheld, delayed, denied or conditioned. The Indemnifying Party
shall not agree to any settlement of such action, suit, proceeding or claim or consent to any judgment in respect thereof that
does not include a complete and unconditional release of the Indemnified Party from all liability with respect thereto or that
imposes any liability or obligation on the Indemnified Party without the prior written consent of the Indemnified Party.

 

    	Page 15

    	 

    
 

11.7Insurance.
Each Party shall, at its sole cost and expense, obtain and keep in force for the duration of this Agreement general liability insurance.
Upon written request, each Party shall furnish to the other Party a certificate of insurance signed by an authorized representative
of such Party’s insurance underwriter evidencing the insurance coverage required by this Agreement and providing, to the
extent feasible, for at least thirty (30) days’ prior written notice to the other Party of any cancellation, termination,
material change or reduction of such insurance coverage.

 

11.8Disclaimers.
EXCEPT AS EXPRESSLY WARRANTED IN THIS AGREEMENT, INCLUDING THIS ARTICLE, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES
WITH RESPECT TO THE PRODUCTSS, EXPRESS OR IMPLIED, IN ANY MANNER AND EITHER IN FACT OR BY OPERATION OF LAW, AND SPECIFICALLY DISCLAIMS
ANY AND ALL IMPLIED OR STATUTORY WARRANTIES, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, COURSE OF DEALING, COURSE OF PERFORMANCE, USAGE OF TRADE OR NONINFRINGEMENT. Without limiting the foregoing, both Parties
acknowledge that they have not and are not relying upon any implied warranty of any kind or upon any representation or warranty
except as expressly warranted in this Agreement.

 

11.9Limitation
on Liability. EXCEPT TO THE EXTENT ARISING OUT OF ANY (a) VIOLATION OF THE OTHER PARTY’S INTELLECTUAL PROPERTY RIGHTS,
(b) CRIMINAL VIOLATION OF APPLICABLE LAWS, (c) GROSS NEGLIGENCE, FRAUD OR INTENTIONAL OR WILFUL MISCONDUCT (d) OR DISCLOSURE OF
CONFIDENTIAL INFORMATION IN BREACH OF THIS AGREEMENT, NEITHER PARTY WILL BE LIABLE TO THE OTHER FOR EXEMPLARY, INCIDENTAL, INDIRECT,
PUNITIVE, CONSEQUENTIAL OR SPECIAL DAMAGES OF ANY TYPE OR AMOUNT (INCLUDING, WITHOUT LIMITATION, LOST PROFITS) ARISING OUT OF ITS
BREACH OF ANY PROVISION IN THIS AGREEMENT (INCLUDING WITHOUT LIMITATION, THE PERFORMANCE OR FAILURE TO PERFORM HEREUNDER), EVEN
IF SUCH DAMAGES WERE FORESEEABLE AND WHETHER SUCH DAMAGES ARISE IN TORT, IN CONTRACT OR OTHERWISE. IPA CHINA’S AGGREGATE
LIABILITY TO VGE ARISING FROM THIS AGREEMENT, WHETHER IN CONTRACT OR TORT, WILL NOT EXCEED THE AMOUNTS PAID BY VGE FOR THE PURCHASE
OF PRODUCTS THAT IT IS UNABLE TO SELL WITHIN THE TERRITORY.

 

ARTICLE 12

MISCELLANEOUS

 

12.1Force Majeure.
Other than the performance obligations under Articles 6 and 9 and Section 12.14 of this Agreement, any delay in the performance
of any of the duties or obligations of either Party shall not be considered a breach of this Agreement and the time required for
performance shall be extended for a period equal to the period of such delay, provided that such delay has been caused by or is
the result of any (a) acts of a public enemy, insurrections, riots, embargoes, failures or delays by vendors, labor disputes, including
strikes, lockouts, job actions, boycotts, fires, explosions, floods, shortages of material or energy so long as all such acts are
without the fault or negligence of and beyond the reasonable control of the Party claiming such excuse from performance or (b)
acts of God. The Party claiming any such excuse shall give prompt notice to the other Party of such cause, and shall promptly take
whatever reasonable steps are necessary to relieve the effect of such cause.

 

    	Page 16

    	 

    
 

12.2Notices.
All notices hereunder shall be delivered as follows: (a) by facsimile and confirmed by first class mail (postage prepaid); (b)
by registered or certified mail (postage prepaid); or (c) by overnight courier service, to the following addresses of the respective
Parties:

 

	 	
        If to VGE, to:

         

        VIASPACE Green Energy, Inc.

        Mr. Sung Chang

        131 Bells Ferry Lane

        Marietta, Georgia 30066

        ATTN: President
	
        If to IPA China, to:

         

        Guangzhou Inter-Pacific Arts

        Mr. Sung Chang

        San Sheng Rd.

        DaLi Village, Tai He Town

        Guangzhou, China 510540

        ATTN: President

        

        

Notices shall be effective upon receipt
if delivered personally or by facsimile and confirmed by first class mail, on the third Business Day following the date of registered
or certified mailing or on the first Business Day following the date of delivery to the overnight courier. A Party may change its
address listed above by written notice to the other Party.

 

12.3Governing
Law.  The laws of the State of Georgia, United States of America shall govern this Agreement; except, however,
that with respect to any dispute that may arise under this Agreement in connection with a Party’s Intellectual Property Rights,
including, without limitation, the enforceability of restrictive covenants with respect thereto, such dispute shall to the extent
it may be otherwise governed by the laws of the various states, shall in such a case be governed by the laws of the State of Georgia,
disregarding such states’ conflict of law provisions. The Parties disclaim application of the United Nations Convention on
Contracts for the International Sale of Goods.

 

12.4Alternative
Dispute Resolution. Both Parties will attempt to settle any claim arising out of this Agreement through good-faith negotiation.
The following process will be used to resolve disputes. The Parties will submit the dispute in writing to a senior executive from
each Party. If those attempts fail, either Party may demand non-binding mediation, the cost of which will be shared equally by
the Parties, except that each Party will pay its own attorney’s fees. Within thirty (30) days after written notice demanding
mediation, the Parties will in good faith choose a mutually acceptable mediator. If the dispute cannot be resolved through mediation
within ninety days, either Party may submit the dispute to a court of competent jurisdiction. Use of any dispute resolution procedure
will not be construed under the doctrines of laches, waiver, or estoppel to adversely affect the rights of either Party. Either
Party may resort to judicial proceedings for intellectual property disputes or if interim relief is necessary to prevent serious
and irreparable injury.

 

12.5Venue and
Jurisdiction. 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.
Each of the Parties 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 Agreement and the transactions contemplated thereby. Each Party 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.

 

    	Page 17

    	 

    
 

12.6Waiver of
Jury Trial. EACH PARTY HERETO WAIVES ITS RIGHT TO TRIAL OF ANY ISSUE BY JURY.

 

12.7Claim for
Attorneys Fees In the event any attorney is employed by any Party to this Agreement with regard to any legal action, arbitration
or other proceeding brought by any Party to this Agreement for the enforcement of this Agreement or because of an alleged dispute,
breach, default or misrepresentation in connection with any of the provisions of this Agreement, then the prevailing Party, whether
at trial or upon appeal, and in addition to any other relief to which the prevailing Party may be granted, shall be entitled to
recover from the losing Party all costs, expenses, and a reasonable sum for attorney fees incurred by the prevailing Party in bringing
or defending such action, arbitration, or proceeding, and in enforcing any judgment granted therein, all of which costs, expenses
and attorneys fees shall be deemed to have accrued upon the commencement of such action and shall be paid whether or not such action
is prosecuted to judgment. Any judgment or order entered in such matter shall contain a specific provision providing for the recovery
by the prevailing Party of attorney fees, costs, and expenses incurred in enforcing such judgment. For purposes of this Section,
attorney fees shall include, without limitation, fees incurred in the following: post-judgment motions; contempt proceedings; garnishment,
levy, and debtor and third Party examinations; discovery; and bankruptcy litigation.

 

12.8Assignment.
Neither this Agreement nor any of the rights or obligations of VGE may be assigned, encumbered, sublicensed or otherwise transferred
by VGE, without the prior written consent of IPA China, in its discretion; provided, however, that VGE, without such
consent, may assign this Agreement in connection with the transfer or sale of substantially all of its business or assets to which
this Agreement pertains or in the event of its merger or consolidation with another company, except, however, that
in no event shall this Agreement to assigned to any Person who is engaged in business activities involving any Competitive Product.
Any permitted assignee of VGE shall assume all obligations of VGE under this Agreement. No assignment shall relieve VGE of responsibility
for the performance of any accrued obligation which VGE then has hereunder. Any attempted assignment in violation of this provision
is void. This Agreement may be assigned by IPA China in its sole discretion without prior notice.

 

12.9Successors.
This Agreement and the provisions hereof shall inure to the benefit of and be binding upon each Party and its successors and assigns.

 

12.10Entire
Agreement; Amendments. Unless the Parties otherwise agree in writing, this Agreement and the attached Exhibits represent the
Parties’ entire understanding, and supersede all previous and contemporaneous agreements between the Parties, with respect
to the subject matter contained herein. Each attached Exhibit is incorporated into this Agreement by reference. There are no promises,
terms or conditions, oral or written, expressed or implied, other than those contained in this Agreement and/or the attached Exhibits.
Except as expressly provided in this Agreement, this Agreement and each Exhibit may be modified or amended only by the Parties’
written agreement.

 

12.11Exhibits.
All Exhibits or descriptions referred to in this Agreement are expressly incorporated herein by reference and set forth in full,
whether or not attached hereto.

 

12.12Waiver;
Severability. No delay or waiver (or single or partial exercise) on the part of either Party on any one or more occasions in
exercising any right, power or privilege hereunder shall operate as a waiver thereof or of any other right, power or privilege
hereunder. Any such waiver shall be made in writing. If any provision of this Agreement or any Exhibit is held to be invalid or
unenforceable to any extent, then: (a) such provision shall be interpreted, construed or reformed to the extent reasonably required
to render it valid, enforceable and consistent with the Parties’ original intent underlying such provision and (b) such invalidity
or unenforceability shall not affect any other provision of this Agreement or any other agreement between the Parties.

 

    	Page 18

    	 

    
 

12.13Equitable
Relief. Each party hereby acknowledges that its breach of this Agreement would cause irreparable harm and significant injury
to the other party that may be difficult to ascertain and that a remedy at law would be inadequate. Accordingly, each party shall
have the right to seek and obtain injunctive relief to enforce obligations under the Agreement in addition to any other rights
and remedies it may have, with the defending Party in such case waiving the right it may otherwise have to requiring the posting
of a bond; provided, however, each party, shall have the right to immediately seek and obtain injunctive relief without any written
notice to the other party or if such breach is of a nature that is not subject to cure or is otherwise based on any violation of
applicable law or a breach of any covenant pursuant to which a Party agrees to refrain from any act under this Agreement, including,
without limitation, Article 2, 9 or Section 12.15 of this Agreement.

 

12.14Independent
Contractor. The Parties are independent contractors and nothing contained in this Agreement shall be construed to place them
in the relationship of partners, principal and agent, employer/employee or joint venturer. Neither Party shall have power or right
to bind or obligate the other, nor hold itself out as having such authority.

 

12.15No Third
Party Beneficiaries. This Agreement is not intended to confer upon any person other than the Parties hereto any rights or remedies
hereunder; provided, however, that Sung Chang or his designee shall be a third party beneficiary under this Agreement
for purposes of the right and enforcement thereof the to be paid timely by VGE the Legal Fees as set forth in Section 6.1 of this
Agreement.

 

12.16Restrictive
Covenant. Neither Party (nor any of its Affiliates) shall, except with the prior written consent of the other, during the Term
and for a period of two (2) years thereafter, solicit, employ or hire any employee then employed by the other Party, or any employee
that has been in the other Party’s employ ninety (90) days prior to the date of expiration or termination of this Agreement.

 

12.17Construction;
Headings. This Agreement and all attached Exhibits shall be deemed to have been drafted by both Parties and shall not be construed
against either Party as the draftsperson hereof. All section titles or headings contained in this Agreement and any Exhibit are
for convenience only, shall not be deemed a part hereof or thereof and shall not affect the meaning or interpretation of this Agreement
or any Exhibit. In this Agreement, the words “including” and “includes” shall be deemed to be followed
by the phrase “without limitation.”

 

12.18Counterparts.
This Agreement and any amendment hereto, may be executed in multiple counterparts, each of which shall be deemed an original Agreement,
and all of which shall constitute a single Agreement, by and among each of the Parties hereto.

 

IN WITNESS WHEREOF,
the Parties have executed this Agreement as of the Effective Date.

 

	
        VGE

         

        VIASPACE Green Energy Inc.

        By:__/s/ Samuel Chen______

        Name: Samuel Chen

        Title: Authorized Director
	
        IPA China

         

        Guangzhou Inter-Pacific Arts
        Corp.

By:__/s/ Sung Chang___

        Name: Sung Chang

        Title: President

         

         

 

    	Page 19

    	 

    

 

EXHIBIT “A”

 

ROYALTY PAYMENTS

 

 

Running Royalty: 

 

VGE shall pay IPA China for and during
the Term a royalty of one percent (1%) on Net Sales (the “Running Royalty”) made in the VGE Territory. Payment of the
Running Royalty shall be due and owing thirty (30) days following the end of the first calendar quarter during which such Net Sales
are made and each calendar quarter thereafter, with each such calendar quarter beginning on January 1st, April 1st,
July 1st and October 1st.

 

 

    	Page 20Exhibit 10.5

 

	
        VIASPACE
GREEN ENERGY INC.

CONSULTING AGREEMENT

THIS CONSULTING
AGREEMENT (the “Agreement”) is made and entered into as of the date indicated below (the “Effective Date”)
by and between VIASPACE Green Energy Inc., a British Virgin Islands company (the “Company”), and Stephen Muzi, an individual
resident of the State of California (the “Consultant”). Company and Consultant are sometimes singularly referred
to in this Agreement as “Party” and collectively referred to as the “Parties.”

 

	VIASPACE	 	 	 
	 	 	 	 
	VIASPACE Green Energy Inc.	 	Address:	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	By: ______________________	 	131 Bells Ferry Lane	 
	Printed Name:	 	Marietta, GA  30066	 
	Position:	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	CONSULTANT	 	 	 
	 	 	Address: 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	___________________	 	237 Eagle Nest Drive	 
	Stephen Muzi, CPA	 	Diamond Bar, CA 91765	 

 

 

EFFECTIVE
DATE:                                         

 

ADDITIONAL TERMS AND CONDITIONS OF THIS AGREEMENT BEGIN ON THE FOLLOWING PAGE. 

 

 

    	1

    	 	

    
 

TERMS AND CONDITIONS

 

Company wishes to
engage Consultant on a non-exclusive basis to provide the Services (as defined below) to Company and Consultant wishes to provide
the Services to Company, all pursuant to the terms and conditions set forth in this Agreement. In consideration of the benefits
they will each receive as a result of the relationship created by this Agreement and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound by this Agreement, hereto
hereby agree as follows:

 

1.     
Services. Consultant hereby agrees during the “Term” (as defined in Section 3)
to perform the “Services” set forth in Schedule A to this Agreement. Consultant shall, during the Term,
diligently promote the interests of Company and perform the Services, to the best of its ability, timely, faithfully, honestly,
diligently, efficiently and professionally. Consultant agrees to provide Company with periodic information regarding the status
of and progress with respect to the Services and as and to the extent reasonably requested by Company or as otherwise described
on Schedule A.

 

2.     
Payment for Services. The compensation to be paid by Company to Consultant is set forth on Schedule B
to this Agreement (the “Compensation”). The Compensation shall constitute Consultant's sole compensation for performing
the Services for Company.

 

3.     
Expenses Incurred. All costs and expenses incurred by Consultant in connection with Consultant's
performance of the Services shall be borne solely and exclusively by Consultant, except as and to the extent otherwise agreed by
the Parties as set forth on Schedule C.

 

4.     
Term. The Term of this Agreement shall begin on the Effective Date and shall end 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 thirty-first) day of March 2013 (the “Initial Term Expiration Date”); and the phrase “Renewal Term”
shall mean each consecutive monthly 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 hereunder if and to the extent either party delivers to the other
written notice of his or its intent to not renew this Agreement for such monthly period at least five (5) days prior to the end
of the Initial Term or any succeeding Renewal Term (as the case may be)(a “Notice of Nonrenewal”); or

 

(b)            
Termination Date. The date on which this Agreement is otherwise terminated in accordance with Section 5 below (the
“Termination Date”).

 

5.     
Termination.

 

(a)             
With or Without Cause. Notwithstanding any provision of this Agreement to the contrary, either Party shall
have the unilateral right, exercisable in its sole and absolute discretion, to terminate this Agreement (i) after the Expiration
Date, without cause upon its delivery of five (5) days prior written notice (provided, however, that during any such
notice period, Company may suspend any and all rights or obligations on the part of Consultant to perform the Services for or on
behalf of Company under this Agreement), or (ii) for or on account of a material breach by the other party of any of such Party’s
duties or obligations under this Agreement, which termination may be effective immediately upon written notice thereof.

 

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(b)            
Mutual Agreement. In addition to the foregoing, this Agreement may be terminated by mutual written agreement between
the Parties.

 

(c)             
Accrued Rights. Expiration or termination of this Agreement shall not affect the right or obligation of either Party
that has accrued prior to the first to occur of the Expiration or Termination Date or otherwise made to survive in accordance with
Section 16 of this Agreement. Except as otherwise expressly provided in this Agreement, in no event shall Company have any further
obligation to pay Consultant any further Compensation whatsoever under this Agreement for the Services following the first to occur
of the Termination or Expiration Date.

 

6.     
No Conflicting Obligation. Consultant represents that its performance of all the terms of this
Agreement and as a consultant of Company does not and will not breach any agreement between it and any other Person. Consultant
has not entered into, and it agrees it will not enter into, any agreement either written or oral in conflict herewith.

 

7.     
Compliance with Laws. Notwithstanding any unanticipated effect of any provision of this Agreement,
Consultant shall and shall cause each of its employees, representatives, independent contractors and agents to at all times comply
with any and all applicable state, local and federal laws and the rules and regulations promulgated thereunder and that certain
agreement entitled “Business Protection Agreement,” which is entered into by and between the parties of even date herewith.

 

8.     
Indemnification.

 

(a)             
By Consultant. Consultant agrees to indemnify, defend and hold harmless Company, its officers, directors, employees, agents,
and representatives from and against any and all claims, liabilities or demands (including the costs, expenses and reasonable attorneys'
fees on account thereof) that may be made by third parties against any such indemnities that arise out of, or are related to, (a)
any act or omission on the part of Consultant or any Person for which Consultant is legally responsible that constitutes negligence
or other wrongful act in breach of or that otherwise constitutes a breach of this Agreement or the Business Protection Agreement
by Consultant or such Person; or (b) any allegations that a Person engaged by Consultant, whether as an employee or otherwise,
might bring against Company related to such Person’s relationship with Consultant.

 

(b)            
By Company. Company agrees to indemnify, defend and hold harmless Consultant, its officers, directors, employees, agents,
and representatives from and against any and all claims, liabilities or demands (including the costs, expenses and reasonable attorneys'
fees on account thereof) that may be made by third parties against any such indemnities that arise out of, or result from any act
or omission that constitutes negligence or other wrongful act in breach of or that otherwise constitutes a breach of this Agreement
by Company; provided, however, that in no event shall Company have any obligation under this Section for any act
or omission for which Consultant is responsible under Section 8(a) above. Company shall include Consultant as an insured person
in its directors and officers insurance policy to the same extent as its other officers.

 

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9.     
Independent Contractor Relationship.

 

(a)             
Representations and Warranties. Consultant represents and warrants to Company that (a) this Agreement is valid and
binding upon and enforceable against him in accordance with its terms, (b) Consultant 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, (c) Consultant is not subject to any pending or, to Consultant'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; (d) Consultant has not entered into, and agrees that he will not enter into, any
agreement either written or oral in conflict herewith; and (d) Consultant is and shall remain throughout the term licensed as a
certified public accountant, in good standing under the rules and regulations governing the practice of public accounting within
the State of California and remained insured under a policy of professional liability insurance covering Consultant’s Services
as a certified public accountant for and on behalf of Company in such limits and with such terms as shall be reasonably acceptable
to Company. Company represents and warrants to Consultant that (a) this Agreement is valid and binding upon and enforceable against
it in accordance with its terms and (b) Company is not bound by or subject to any contractual or other obligation that would be
violated by its execution or performance of this Agreement.

 

(b)            
In General. Neither Consultant nor any Person acting for or on behalf of Consultant is or shall be an employee or
agent of Company for any purpose whatsoever, but is an independent contractor. Company is interested only in the results obtained
by Consultant, who or which shall be provided by the Company sole control over the manner and means of performing under this Agreement.
Without prior approval from the President of Company, consultant does not have, nor shall it hold itself out as having any right,
power or authority to create any contract or obligation, either express or implied on behalf of, in the name of, or binding upon
Company. Consultant shall have the right to appoint and shall be solely responsible for its own salesmen, employees and agents,
who shall be at Consultant’s own risk, expense and supervision and shall not have any claim against Company for compensation
or reimbursement. Consultant agrees to provide all equipment, tools and facilities necessary for its business. Consultant shall
perform the Services under the general direction of Company but Consultant shall determine, in Consultant's sole discretion, the
manner and means by which the Services are accomplished. The Parties expressly agree that Consultant's engagement shall be that
of an independent contractor, and under no circumstances shall Consultant, or any of Consultant's employees or agents, be deemed
an employee, partner, agent or joint venture of Company or any of its Affiliates.

 

(c)             
Taxes. Consultant hereby agrees to report any and all such Compensation under this Agreement as taxable income paid
to Consultant in its capacity as an independent contractor and pay any and all taxes due and owing thereon to the applicable taxing
authorities. Consultant hereby agrees to fully and timely pay all such taxes or withholdings due and payable for amounts paid to
it under this Agreement and by it to its employees and other workers.

 

(d)            
Code Section 409A.Notwithstanding anything to the contrary contained herein, this Agreement is intended to, but
no assurance or covenant is made by Company that the provisions hereof satisfy the requirements of Internal Revenue Code Section
409A.

 

10.  
Binding Effect and Assignability. This Agreement and shall be assignable by Company
and inure to the benefit of and shall be binding upon any successor or assignee thereof. Neither this Agreement nor any rights
or obligations of Consultant shall be transferable or assignable by Consultant without Company's prior written consent, and any
attempted transfer or assignment hereof by Consultant not in accordance herewith shall be null and void.

 

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11.  
Severability. All Sections, sub-Sections, paragraphs, terms and provisions of this Agreement are
severable, and the unenforceability or invalidity of any of the terms, provisions, Sections, sub-Sections or paragraphs of
this Agreement shall not affect the validity or enforceability of the remaining terms, provisions, Sections, sub-Sections or
paragraphs of this Agreement, but such remaining terms, provisions, Sections, sub-Sections or paragraphs shall be interpreted
and construed in such a manner as to carry out fully the intention of the Parties.

 

12.  
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.

 

13.  
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) 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.

 

14.  
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.

 

15.  
Waiver. The waiver by any party to this Agreement of a default or breach of any Section, sub-Section 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, sub-Section or provision by any party hereto.

 

16.  
Survival. Sections 8 through and including 19 of this Agreement shall survive the termination or expiration
of this Agreement, along with the definitions of any terms and phrases referenced therein.

 

17.  
Governing Law and Jurisdiction. 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 UNDER THIS AGREEMENT, 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 AGREEMENT OR MATTERS
RELATED HERETO.

 

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THE PARTIES HEREBY
AGREE TO SUBMIT TO THE VENUE AND JURISDICTION OF THE SUPERIOR COURTS IN AND FOR THE COUNTY OF COBB, STATE OF GEORGIA, USA, OR THE
FEDERAL DISTRICT COURT IN AND FOR THE NORTHERN DISTRICT OF GEORIGA, USA, IN WHICH ANY LEGAL ACTION BY EITHER PARTY TO ENFORE OR
DEFEND RIGHTS UNDER THIS AGREEMENT SHALL BE BROUGHT AND WHICH SHALL HAVE SOLE AND EXCLUSIVE JURISDICTION OVER ANY SUCH LEGAL ACTION.

 

18.  
Entire Agreement. This Agreement, including the Schedules attached hereto, contains the complete
agreement concerning the arrangement between Company and Consultant as of the date hereof.

 

19.  
Schedules. Attached to this Agreement and incorporated herein by reference are three schedules,
A (Services), B (Compensation) and C (Expenses).

 

[SCHEDULES CONTINUED ON NEXT PAGE]

 

 

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SCHEDULE A

SERVICES

 

Consultant is to provide the following
services and such other services relating thereto as may be requested by Company from time to time during the Term of this Agreement
(the “Services”):

 

Consultant
will serve as Company's Chief Financial Officer, Treasurer and Secretary and report directly to the President. In such capacity,
Consultant will be involved in strategy planning, evaluation, and analyzing business ventures. Consultant 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 Directors and President of the Company, include, without limitation, the preparation and filing of SEC
documents.

 

Insomuch as Consultant is not an employee
of Company, Company will not withhold, make or otherwise retain any withholdings or other employee taxes or provide any employee
benefits, including, but not limited to, medical or dental insurance, vacation pay or sick pay.

 

SCHEDULE
B

COMPENSATION

 

As compensation for the
Services rendered by Consultant under this Agreement, Company shall pay Consultant as follows (collectively, the “Compensation”):

 

For the Term,
a flat fee of Five Thousand Dollars ($5,000) per calendar month payable, commencing with the Effective Date.

Compensation due and
payable under this Agreement shall be paid monthly in arrears in U.S. funds on or before the last day of each month.

 

SCHEDULE C

REIMBURSEMENT OF EXPENSES

 

Company will reimburse Consultant for direct
expenses incurred for Company that Consultant pays directly. These expenses will be pre-approved by the Company.

 

 

    	7

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