Document:

Exhibit 10.1

 

RECAPITALIZATION AGREEMENT

 

 

By and Among

 

 

VIASPACE INC., VIASPACE GREEN ENERGY
INC.

AND CERTAIN OTHER PARTIES

 

 

Dated as of September 30, 2012

 

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RECAPITALIZATION AGREEMENT

 

THIS RECAPITALIZATION
AGREEMENT (the “Agreement”) is made effective as of September 30, 2012 (the “Effective Date”), by and
among VIASPACE Inc., a Nevada corporation (the “VIASPACE”), VIASPACE Green Energy Inc., a British Virgin Islands corporation
(“VGE”), and certain other parties who are signatories to this Agreement (collectively, with VIASPACE and VGE, the
“Signatories”). Except as otherwise provided in this Agreement, capitalized terms and phrases shall have the meaning
ascribed thereto in Section 1 hereof.

 

BACKGROUND

 

On or about the 10th day of May 2010, VIASPACE
issued to Sung Chang a long-term debt instrument in the principal amount of $5,331,025 (the “Original Secured Note”),
the payment of which is secured by the Security Documents. Since its original issuance, the Original Secured Note was amended by
the parties to extend the due date for payment of each respective installment by one year (together with such amendment, the “Secured
Note”), with the first installment being due and payable thereafter on May 14, 2012 (the “First Installment”).
As part of such amendment, the Secured Note was assigned by Sung Chang to Chang, LLC “(Chang”), a limited liability
company of which Sung Chang is a member.

 

Although an initial payment of $200,000
was made, Eight Hundred Sixty Six Thousand Two Hundred and Five Dollars ($866,205.00) of the First Installment remains unpaid and
is and continues to past due as of the date of this Agreement, along with the Accrued Interest. Neither VIASPACE nor any one of
its various subsidiaries, including VGE or its two lower tier subsidiaries, has the financial wherewithal to satisfy the Secured
Note as and to the extent due and owing. Given the insolvency of VIASPACE on a consolidated basis, the Parties have expressed a
desire to cooperate in the recapitalization of VIASPACE and VGE upon the terms and conditions described in this Agreement and in
accordance with Code Section 368(a)(1)(E).

 

SECTION I

DEFINITIONS

 

The following the terms and phrases shall
have the meaning ascribed thereto in this Section:

 

“Accrued Interest” shall
mean that amount of interest that has accrued, but remains unpaid on the Secured Note, which amount as of the Effective Date equals
$626,402.37.

 

"Accredited Investor"
has the meaning set forth in Regulation D under the Securities Act.

 

“Agreement" means this
Recapitalization Agreement, including all Schedules and Exhibits hereto, as this Recapitalization Agreement may be from time to
time amended, modified or supplemented.

 

“Cancelled VGE Shares” shall mean all of
the VGE Shares issued to and owned by or in which rights are held by VIASPACE, including, without limitation, the 6,356,000 shares
of VGE Common Stock represented by share certificates 1, 2, 72, 73, 74, 77, 79, 80, 81, and 82 and issued to VIASPACE and the 
147,920 VGE Shares held by Glendale Securities, which together total 6,503,920 VGE Shares.

 

“Chang” shall have the meaning ascribed to
such term in the first paragraph above, entitled “Background.”

 

 

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“Chang Indemnified Parties”
shall mean Chang and each owner, manager, officer, director, employee, agent thereof, Sung Hsien Chang, Hsiu Fen Su, Chun Hao Chang
and Jay Chang, Green Solutions Group Ltd., a British Virgin Islands company (“Green Solutions”), Sam Chen, JJ International,
Inc. and such other parties to-be-named by Chang.

 

“Closing Date" shall
have the meaning set forth in Section 2 of this Agreement.

 

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

 

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

 

“Covenant Not to Sue”
shall have the meaning ascribed thereto in Section 4.3.2 of this Agreement.

 

“Director” shall mean
any individual who has been elected to serve as director of the VIASPACE Board in accordance with the applicable Organizational
Documents.

 

“Entity Signatories”
shall mean each of the Signatories other than Individual Signatories.

 

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

 

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

 

“Former Employees” shall
mean Carl Kukkonen and Stephen Muzi.

 

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

 

“Guaranty Agreement”
shall mean that agreement pursuant to which each of VGE, IPA BVI and IPA China guaranteed the Secured Promissory Note.

 

“Indemnified Signatory”
shall mean each of the Signatories who are entitled to be indemnified under Section 5.2 of this Agreement.

 

“Indemnifying Signatory”
shall mean each Signatory who is obligated to indemnify the Indemnified Signatories under Section 5.2 of this Agreement.

 

“Individual Signatories”
shall mean each of those Signatories who are individuals.

 

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

 

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

 

“Knowledge” means, in
the case of an individual, actual knowledge without any independent investigation or due diligence and, in the case of a Person
other than an individual, the actual knowledge without any independent investigation of the members of such Person’s governing
board and its officers as each such Person is defined in such Person’s Organizational Documents.

 

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

 

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

 

“Lock-up Agreement”
means that Agreement pursuant to which the Signatories have agreed not to sell, encumber, pledge or transfer shares of VIASPACE
common stock for 180 days from the date of the Closing.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“SEC Documents" has the
meaning set forth in Section 3.2.9.

 

“Secured Note” shall
have the meaning ascribed thereto in the first paragraph above, entitled “Background.”

 

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

 

“Security Agreement”
shall mean that agreement pursuant to which each of VGE, IPA BVI and IPA China pledged as collateral its respective assets for
the Secured Note.

 

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

 

“Stock Pledge Agreement”
shall mean that agreement pursuant to which each of VIASPACE pledged the VGE Shares, VGE pledged its ownership interest in IPA
BVI, and IPA BVI pledged its ownership interest in IPA China as collateral for the Secured Note.

 

“Transaction Documents"
means, collectively, all agreements, instruments and other documents to be executed and delivered in connection with the transactions
contemplated by this Agreement, including, without limitation, this Agreement, the Lock-up Agreement and the VSPC/Chang Mutual
Limited Release.

 

“U.S." means the United
States of America.

 

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

 

“VGE Shares” shall mean
that number of shares of VGE Common Stock as shall equal Eight Million, Three Hundred Eighty Four Thousand, Three Hundred and Twenty
(8,384,320), which shares shall be evidenced by share certificate issued by VGE.

 

“VGE Common Stock” shall
mean those shares of common stock, $0.001 par value, authorized for issuance by VGE.

 

“VGE Parties” shall
mean VGE, IPA BVI and IPA China, collectively.

 

“VIASPACE Board” shall
mean the duly elected and constituted board of directors of VIASPACE and any Affiliate thereof.

 

“VIASPACE Common Stock"
means the VIASPACE Inc., common stock, par value $0.001 per share.

 

"VSPC/Chang Mutual Limited Release"
shall mean that certain agreement entitled “VSPC/Chang Mutual Limited Release,” which is to be fully executed and made
effective by the parties thereto of even date herewith, a form of which is attached hereto and marked as Exhibit “A.”

 

SECTION II

RECAPITALIZATION

 

		2.1	Deliverables at Closing. As of the Closing, each of the following transactions shall occur:

 

2.1.1       
The Signatories thereto shall enter into and deliver the Lock Up Agreement, VSPC/Chang Mutual Release to each of the Released
Parties (as such term is defined therein);

 

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2.1.2       
Properly and fully executed UCC Termination Statements shall be delivered by Chang to VIASPACE to enable VIASPACE to thereafter
cause the termination of the UCC’s filed in connection with the Secured Note and related Security Documents;

 

2.1.3       
VIASPACE shall contribute, transfer, assign and convey to VGE all of its right title and interest in and to the Cancelled
VGE Shares, by endorsing over and delivering a fully executed stock power to VGE in connection with Certificates #1, 2, 72, 73,
74, 77, 79, 80, 81, and 82 and the 147,920 VGE Shares held by Glendale Securities, which shares shall be accepted, received and
canceled of record by VGE upon and coincident therewith;

 

2.1.4       
VGE shall issue and deliver to Chang and Chang shall accept the VGE Shares;

 

2.1.5       
VGE shall have paid one-half (or approximately $1,500) of the premium on the directors and officers insurance policy last
due and owing from June 25, 2012 and the full amount of the down payment in the amount of $10,187.70 on the renewal of such directors
and officers insurance policy (the “Down Payment”); provided, however, that upon and coincident with
Closing, VIASPACE shall reimburse VGE for that pro-rata portion of the Down Payment attributable to the remaining annual period
following Closing;

 

2.1.6       
The delivery of a mutually agreed upon Press Release relating to the signing of the Transaction Documents;

 

2.1.7       
All material consents, waivers, approvals, authorizations or orders required to be obtained, and all filings required to
be made, by any or all Signatories, including, without limitation, the Entity Signatories, for the authorization, execution and
delivery of this Agreement and the consummation by such Person of the transactions contemplated by this Agreement, shall have been
obtained and made thereby, except where the failure to receive such consents, waivers, approvals, authorizations or orders or to
make such filings would not have a material adverse effect on such Person; and

 

2.1.8       
Each Entity Signatory shall deliver (1) a Secretary's Certificate, dated the Closing Date, certifying (i) attached copies
of such Person’s Organizational Documents, (ii) resolutions of its governing board in which are approved the Transaction
Documents and the transactions contemplated hereby and thereby, and (iii) the incumbency of each member of such governing board
and authorized officer thereof signing this Agreement and any other agreement or instrument contemplated hereby to which such Person
is a party, and (2) a certificate, dated as of the Closing Date, executed by an officer thereof, certifying the satisfaction of
the conditions specified therein.

 

2.2            
The Closing. The closing (the "Closing") of the transactions contemplated under this Agreement and the other
Transaction Documents will occur at the offices of McDaniel Law Group, PC in Atlanta, Georgia, commencing at noon local time on
the Effective Date.

 

SECTION III

REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS

 

3.1            
The Individual Signatories. As of the Effective Date, each of the Individual Signatories, individually and severally,
and not jointly and severally, hereby represents and warrants to each other Signatory the following:

 

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3.1.1       
Authority. Signatory has the right, power, authority and capacity to execute and deliver this Agreement and each
of the Transaction Documents to which Signatory is a party, to consummate the transactions contemplated by this Agreement and each
of the Transaction Documents to which Signatory is a party, and to perform Signatory's obligations under this Agreement and each
of the Transaction Documents to which Signatory is a party. This Agreement has been, and each of the Transaction Documents to which
Signatory is a party will be, duly and validly authorized and approved, executed and delivered by Signatory. Assuming this Agreement
and the Transaction Documents have been duly and validly authorized, executed and delivered by the parties thereto other than Signatory,
this Agreement is, and as of the Closing each of the Transaction Documents to which Signatory is a party will have been, duly authorized,
executed and delivered by Signatory and constitute or will constitute the legal, valid and binding obligation of Signatory, enforceable
against Signatory in accordance with their respective terms, except as such enforcement is limited by general equitable principles,
or by bankruptcy, insolvency and other similar Laws affecting the enforcement of creditors rights generally.

 

3.1.2       
No Conflict. Neither the execution or delivery by Signatory of this Agreement or any Transaction Document to
which Signatory is a party, nor the consummation or performance by Signatory of the transactions contemplated hereby or thereby
will, directly or indirectly, (a) contravene, conflict with, constitute a default (or an event or condition which, with notice
or lapse of time or both, would constitute a default) under, or result in the termination or acceleration of, any agreement or
instrument to which Signatory is a party or by which the properties or assets of Signatory are bound; or (b) contravene, conflict
with, or result in a violation of, any Law or Order to which Signatory, or any of the properties or assets of Signatory, may be
subject.

 

3.1.3       
Litigation. To the Knowledge thereof, there is no pending Proceeding against any other Signatory that challenges,
or may have the effect of preventing, delaying or making illegal, or otherwise interfering with, any of the transactions contemplated
by this Agreement and no such Proceeding has been threatened, and no event or circumstance exists that is reasonably likely to
give rise to or serve as a basis for the commencement of any such Proceeding other than that which could be asserted under any
Transaction Document or Security Document.

 

3.1.4       
No Brokers or Finders. No Person has, or as a result of the transactions contemplated herein will have, any right
or valid claim against any other Signatory for any commission, fee or other compensation as a finder or broker, or in any similar
capacity.

 

3.2            
The Entity Signatories. As of the Effective Date, each of the Entity Signatories, individually and severally, and not
jointly and severally, hereby represents and warrants to each other Signatory the following:

 

3.2.1       
Organization and Qualification. Entity Signatory is duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization, has all requisite authority and power (corporate and other), governmental licenses,
authorizations, consents and approvals to carry on its business as presently conducted and to own, hold and operate its properties
and assets as now owned, held and operated by it, except where the failure to be so organized, existing and in good standing, or
to have such authority and power, governmental licenses, authorizations, consents or approvals would not have a material adverse
effect. Entity Signatory is duly qualified, licensed or domesticated as a foreign corporation in good standing in each jurisdiction
wherein the nature of its activities or its properties owned, held or operated makes such qualification, licensing or domestication
necessary, except where the failure to be so duly qualified, licensed or domesticated and in good standing would not have a material
adverse effect.

 

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3.2.2       
Organizational Documents. True, correct and complete copies of the Organizational Documents of such Entity Signatory
have been made available to each other Signatory immediately prior to the execution of this Agreement, and no action has been taken
to amend or repeal such Organizational Documents at any time during that one year period immediately preceding the Effective Date.
Entity Signatory is not in violation or breach of any of the provisions of its Organizational Documents.

 

3.2.3       
Authorization. Entity Signatory has all requisite authority and power (corporate and other), governmental licenses,
authorizations, consents and approvals to enter into this Agreement and each of the Transaction Documents to which Entity Signatory
is a party, to consummate the transactions contemplated by this Agreement and each of the Transaction Documents to which Entity
Signatory is a party and to perform its obligations under this Agreement and each of the Transaction Documents to which Entity
Signatory is a party. The execution, delivery and performance by Entity Signatory of this Agreement and each of the Transaction
Documents to which Entity Signatory is a party have been duly authorized by all necessary corporate action and do not require from
Entity Signatory Board or the stockholders of Entity Signatory any consent or approval that has not been validly and lawfully obtained.
The execution, delivery and performance by Entity Signatory of this Agreement and each of the Transaction Documents to which Entity
Signatory is a party requires no authorization, consent, approval, license, exemption of or filing or registration with any Governmental
Authority or other Person other than such customary filings with the Commission for transactions of the type contemplated by this
Agreement, if required.

 

3.2.4       
No Violation. Neither the execution or delivery by Entity Signatory of this Agreement or any Transaction Document
to which Entity Signatory is a party, nor the consummation or performance by Entity Signatory of the transactions contemplated
hereby or thereby will, directly or indirectly, (a) contravene, conflict with, or result in a violation of any provision of the
Organizational Documents of Entity Signatory; (b) contravene, conflict with, constitute a default (or an event or condition which,
with notice or lapse of time or both, would constitute a default) under, or result in the termination or acceleration of, or result
in the imposition or creation of any Lien under, any agreement or instrument to which Entity Signatory is a party or by which the
properties or assets of Entity Signatory are bound; (c) contravene, conflict with, or result in a violation of, any Law or Order
to which Entity Signatory, or any of the properties or assets owned or used by Entity Signatory may be subject; or (d) contravene,
conflict with, or result in a violation of, the terms or requirements of, or give any Governmental Authority the right to revoke,
withdraw, suspend, cancel, terminate or modify, any licenses, permits, authorizations, approvals, franchises or other rights held
by Entity Signatory or that otherwise relate to the business of, or any of the properties or assets owned or used by, Entity Signatory,
except, in the case of clause (b), (c), or (d), for any such contraventions, conflicts, violations, or other occurrences as would
not have a material adverse effect.

 

3.2.5       
Binding Obligations. Assuming this Agreement and the Transaction Documents have been duly and validly authorized,
executed and delivered by all other Signatories who or which are parties thereto other than Entity Signatory, this Agreement has
been, and as of the Closing each of the Transaction Documents to which Entity Signatory is a party will be, duly authorized, executed
and delivered by Entity Signatory and constitutes or will constitute, as the case may be, the legal, valid and binding obligations
of Entity Signatory, enforceable against Entity Signatory in accordance with their respective terms, except as such enforcement
is limited by general equitable principles, or by bankruptcy, insolvency and other similar Laws affecting the enforcement of creditors
rights generally.

 

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3.2.6       
Compliance with Laws. Except as would not have a material adverse effect, the business and operations of Entity
Signatory has been and are being conducted in accordance with all applicable Laws and Orders. Entity Signatory has not received
notice of any violation (or any Proceeding involving an allegation of any violation) of any applicable Law or Order by or affecting
Entity Signatory or, to Entity Signatory’s Knowledge, no Proceeding involving an allegation of violation of any applicable
Law or Order is threatened or contemplated. Entity Signatory is not subject to any obligation or restriction of any kind or character,
nor is there, to the knowledge of Entity Signatory, any event or circumstance relating to Entity Signatory that materially and
adversely affects in any way its business, properties, assets or prospects or that prohibits Entity Signatory from entering into
the Transaction Documents or would prevent or make burdensome its performance of or compliance with all or any part of the Transaction
Documents or the consummation of the transactions contemplated hereby or thereby.

 

3.2.7       
Certain Proceedings. There is no pending Proceeding that has been commenced against Entity Signatory and that
challenges, or may have the effect of preventing, delaying, making illegal, or otherwise interfering with, any of the transactions
contemplated by this Agreement. To the knowledge of Entity Signatory, no such Proceeding has been threatened.

 

3.2.8       
No Brokers or Finders. No Person has, or as a result of the transactions contemplated herein will have, any right
or valid claim against Entity Signatory for any commission, fee or other compensation as a finder or broker, or in any similar
capacity.

 

3.3            
VIASPACE. As of the Effective Date, VIASPACE hereby represents and warrants to VGE and the Chang Indemnified Parties
as follows: (a) VIASPACE owns of record and beneficially, and has valid and indefeasible title to and the right to transfer to
VGE the Cancelled VGE Shares, free and clear of any and all Liens, other than the Liens created under the Security Documents; (b)
upon and coincident therewith, the Cancelled VGE Shares are and shall be free and clear of any and all Liens, other than the Liens
created under the Security Documents; (c) there are no options, rights, voting trusts, stockholder agreements or any other contracts
or understandings to which VIASPACE is a party or by which the Cancelled VGE Shares are bound with respect to the issuance, sale,
transfer, voting or registration of the Cancelled VGE Shares, other than the Liens created under the Security Documents; and (e)
to VIASPACE’s Knowledge, there are no options, rights, voting trusts, stockholder agreements or any other contracts or understandings
to which VGE is a party or by which the VGE Shares are bound with respect to the issuance, sale, transfer, voting or registration
of such equity interests.

 

3.4            
VIASPACE and Former Employees. As of the Effective Date, VIASPACE and each of the Former Employees hereby represent
and warrant to VGE that prior to the Effective Date, VIASPACE and each of the Former Employees have (a) delivered to VGE any and
all books, records and other information (including, without limitation, all hard and electronic copies thereof) of, about or otherwise
relating to VGE and its operations and each subsidiary thereof, including, without limitation, any and all such information relating
to Giant King Grass (“GKG”); and (b) disclosed and assigned, transferred and conveyed pursuant to a fully executed
assignment and assumption agreement to VGE all right, title and interest in any and all intellectual property rights relating to
GKG or any derivative thereof and the manufacture, growing or production thereof or other process relating thereto in which or
to which VIASPACE or any such Person may have acquired rights, including, without limitation, any and all rights in licenses, registrations
or patents (and any applications thereof) that may have been obtained, filed or otherwise secured in the name of VIASPACE.

 

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3.5            
VGE. As of the Effective Date, VGE hereby represents and warrants to Chang that after the Closing and issuance thereof,
the VGE Shares shall equal not less than eighty percent (80%) of the total combined voting power of all classes of VGE capital
stock entitled to vote and at least 80 percent of the total number of shares of all other classes of VGE stock, as determined on
a fully diluted basis immediately following the Closing.

 

3.6            
Chang. As of the Effective Date, Chang hereby represents and warrants to VGE as follows:

 

3.6.1       
Restricted Securities. Chang is acquiring the VGE Shares for Chang’s own account (and not for the account
of others) for investment and not with a view to the distribution thereof. Chang acknowledges that such shares will not be registered
pursuant to the Securities Act or any applicable state securities laws, such shares will be characterized as “restricted
securities” under federal securities laws, and that under such laws and applicable regulations such shares cannot be sold
or otherwise disposed of without registration under the Securities Act or an exemption therefrom. In this regard, Chang is familiar
with Rule 144 promulgated under the Securities Act (which can be found at http://www.sec.gov/investor/pubs/rule144.htm),
as currently in effect, and understands the resale limitations imposed thereby and by the Securities Act; and Chang agrees not
to sell or otherwise dispose of such shares without such registration or an exemption therefrom.

 

3.6.2       
Accredited Investor; Non-U.S. Person. Chang is an “Accredited Investor” as that term is defined in
Rule 501 of Regulation D of the Securities Act or is not a “U.S. Person” as such term is defined by Rule 902 of Regulation
S of the Securities Act. Chang is able to bear the economic risk of acquiring VGE Shares pursuant to the terms of this Agreement,
including a complete loss of investment in such shares.

 

SECTION IV

COVENANTS

 

4.1            
Character of the Exchange Transaction.  Chang hereby exchanges all of the rights under the Secured Note and Security
Agreement not otherwise reserved under this Agreement (the “Exchanged Rights”) for the VGE Shares and VIASPACE’s
contribution of the Cancelled VGE Shares, the VSPC/Chang Mutual Limited Release; and VGE hereby issues to Chang in exchange for
the Exchanged Rights, the VGE Shares and accepts and cancels of record the VIASPACE Cancelled VGE Shares (together, the “Exchange”).
Each of the Signatories to this Agreement hereby agree to treat the Exchange as a tax-free recapitalization of VGE and VIASPACE
within the meaning of Section 368(a)(1)(E) of the Code. For purposes of this Agreement, each of the Signatories hereby agrees
that VIASPACE on a consolidated basis (which includes, without limitation, each of the VGE Parties immediately prior to the Effective
Date) is insolvent. In no event shall any Signatory to this Agreement make any filings with any Governmental Authority that is
inconsistent with the agreements set forth in this Section 4.1.

 

4.2            
Continued Use of “VIASPACE” Tradename. At its sole cost and expense, either VIASPACE or VGE (or both) may
elect to change its name as of and coincident with or at any time following the Closing; provided, however, that
in the case of VIASPACE, in no event shall any such new name contain or reflect any reference to GKG or any similar reference thereto.

 

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4.3            
Covenants With Respect to Chang.

 

4.3.1    
Right of First Offer. Chang is hereby granted the irrevocable and exclusive first option (the “First Option”)
to purchase all or any part of its Pro Rata Portion (as defined below) of any New Securities (as defined below) that VIASPACE may
propose to issue and sell; subject, however, to any such offer and sale being made in compliance with applicable
securities laws (the “Right of First Offer”).

 

(a)             
Notices With Respect to Proposed Issuance of New Securities. In the event VIASPACE proposes to undertake an issuance and
sale of New Securities, it shall give Chang at least ten (10) days prior written Notice (the “Offer Notice”) of any
such intention, describing in detail the type of New Securities, and the price and terms upon which VIASPACE proposes to issue
and sell such New Securities. Chang shall have ten (10) consecutive calendar days from the date of delivery of the Offer Notice
within which to return to VIASPACE its written agreement to purchase up to its Pro Rata Portion of New Securities under the price,
terms and conditions specified in the Offer Notice and Chang must state therein the quantity of New Securities to be purchased.

 

(b)            
VIASPACE’s Right to Complete Proposed Issuance of New Securities to the Extent Rights of First Offer are Not Exercised.
In the event Chang fails to exercise the Right of First Offer with respect to Chang’s Pro Rata Portion of any New Securities
within ten (10) calendar days from delivery of the Offer Notice, Chang’s Right of First Offer shall terminate. VIASPACE shall
thereafter have the right to issue or enter into an agreement to issue the New Securities not elected to be purchased by Chang.
The price and terms with respect to this Agreement shall be no more favorable than those specified in the Offer Notice.

 

(c)             
Definitions. For purposes of this Section, the following terms and phrases shall have the meanings ascribed thereto:

(i)
“New Securities” shall mean any (1) VIASPACE Common Stock; (2) options, warrants or other rights or agreements to purchase
any such Common Stock (the “Stock Rights”); or (3) securities of any type whatsoever that are, or may become, convertible
into VIASPACE Common Stock (the “Convertible Securities”); provided, however, that the term “New
Securities” does not include:

 

(1) VIASPACE Common Stock or
other securities issued pursuant to any Stock Rights or Convertible Securities, including, without limitation, convertible notes,
warrants and options, (A) outstanding as of the Effective Date; or (B) issued pursuant to any agreements or other rights entered
into or granted after the Effective Date, provided that the Right of First Offer applied to any such agreements or other rights;

 

(2)VIASPACE Common Stock
or other securities issued pursuant to the acquisition of another corporation or other entity by VIASPACE;

 

(3)VIASPACE Common Stock,
Stock Rights or Convertible Securities issued to employees, officers, directors and/or consultants as an incentive or compensation
for services rendered or to be rendered for and on behalf of VIASPACE or any Affiliate thereof pursuant to any incentive plan,
agreement or arrangement approved by the VIASPACE Board;

 

    	11

    	 	

    
 

(4)VIASPACE Common Stock,
Stock Rights or Convertible Securities issued or issuable (1) in a firm commitment, underwritten public offering pursuant to an
effective registration statement under the Securities Act, or (2) upon exercise of warrants or rights granted to parties in connection
with such a public offering;

 

(5) VIASPACE Common Stock or
other securities issued pursuant to any Stock Rights or Convertible Securities issued to Kevin Schewe or his designees pursuant
to a loan agreement entered into on or prior to the date of this Agreement; or

 

(6)VIASPACE Common Stock,
Stock Rights or Convertible Securities issued pursuant to any distribution, stock split, combination, reclassification, recapitalization
or similar transaction by VIASPACE of any of its securities.

 

(ii)
“Pro Rata Portion” shall mean that number of shares of New Securities as is equal to the product of the total
number of New Securities proposed to be issued multiplied by a fraction, (1) the numerator of which is the sum of (A) the number
of shares of VIASPACE Common Stock held by Chang the date of the Offer Notice (as defined below) and (B) the number of shares of
VIASPACE Common Stock issued or issuable to Chang upon the exercise of any Stock Rights or conversion of Convertible Securities
held by Chang on the date of the Offer Notice, and (2) the denominator of which is the number of Stock held by all holders of VIASPACE
Common Stock on a fully diluted basis on the date of the Offer Notice.

 

(e)Waiver. The observance
of any term relating to the Right of First Offer may be amended, waived or removed either generally or in a particular instance
(and either retroactively or prospectively) only with the consent of Chang, which consent may be withheld, delayed, denied or conditioned
in Chang’s sole discretion, and VIASPACE.

 

4.3.2       
Covenant Not to Sue. Following the Effective Date, Chang and its members, officers and managers, agrees they shall
not institute any action for suit-at-law or action against all or any of VIASPACE or its shareholders, officers, directors, employees,
Affiliates, successors and assigns thereof, nor institute, prosecute, or in any way aid in the institution or prosecution of any
claim for damages, costs, loss of services, expenses, or compensation for or on account of any damage, loss or injury, either to
person or property or both, whether developed or undeveloped, resulting to or to result, known or unknown, past, present, or future,
arising out of (the “Claims”) the Security Documents (the “Covenant Not to Sue”), provided, however,
that such Security Documents may be used in any event as a defense, setoff, recoupment or other counterclaim to any such Claim
or other action brought against any one of the Chang Indemnified Parties; except, however, that neither the Note
nor such other Security Documents may be used by Chang as the basis on which to recover the Claims from VIASPACE or either one
of the Former Employees following the Closing.

 

    	12

    	 	

    
 

 

4.3.3       
Board Observation Rights. For so long as the Chang Indemnified Parties own together at least 200 million shares of
VIASPACE Common Stock, VIASPACE hereby grants to Chang the right to appoint two individuals to serve as non-voting observers (each,
a “Non-Voting Observer”) to the VIASPACE Board and any committee thereof.  In the event of a vacancy caused by
the resignation or other cessation of service of any Non-Voting Observer, Chang shall have the right to appoint a new Non-Voting
Observer in substitution thereof.  Any Non-Voting Observer shall be permitted to attend meetings of each of the VIASPACE Board
and each such committee in person or telephonically, at the option of the Non-Voting Observer.  Each Non-Voting Observer shall
be entitled to be present at all meetings of the VIASPACE Board and each committee thereof and such observer shall be notified
of any meeting of the VIASPACE Board or committee, including such meeting’s time and place, in the same manner as Directors,
and shall have the same access to information (including any copies of all materials disseminated to the Directors or members of
the committees thereof), including, without limitation, with respect to the business and operations of VIASPACE, and at the same
time as the Directors, and shall be entitled to participate in discussions and consult with, and make proposals and furnish advice
to, the Directors or committee without voting. The VIASPACE Board hold at least one meeting (each a “Quarterly Meeting”)
on a date during each fiscal quarter.  Within a reasonable time after each Quarterly Meeting, VIASPACE shall cause minutes
of such Quarterly Meeting to be delivered to the Directors and each Non-Voting Observer. VIASPACE will notify each Non-Voting Observer
of each meeting of the VIASPACE Board reasonably in advance of, and in any event, at least ten (10) business days prior to, any
such meeting, unless such meeting is convened to address an emergency matter requiring immediate attention of the VIASPACE Board,
in which case the notice of such meeting may be given within the time period provided for such notices in the governing Organizational
Documents (but in no event less than 48 hours prior to such meeting). The Non-Voting Observer will agree to comply with VIASPACE’s
confidentiality and insider trading policy applicable to all directors. Notwithstanding the foregoing, the Non-Voting Observer
will be excluded from meetings, and the right of the Non-Voting Observer to receive materials will be restricted, (x) to the extent
that the Non-Voting Observer’s presence or receipt of information would affect the attorney client privilege with its outside
counsel and (y) to enable the directors to hold confidential communications concerning VIASPACE’s interactions with Chang,
VGE or any of its Affiliates, all of which communications will be segregated and held separately from other matters brought before
the Board.

 

4.4            
Restrictive Legends. Each certificate representing VGE Shares, and any other securities
issued in respect of shares upon any stock split, stock dividend, recapitalization, merger, consolidation or similar event (except
as otherwise permitted by the provisions of this Section ), shall be stamped or otherwise imprinted with the following legend,
together with any other legends required by applicable securities laws:

 

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

 

    	13

    	 	

    
 

THESE SECURITIES OFFERED HEREBY
HAVE NOT BEEN REGISTERED UNDER THE GEORGIA SECURITIES ACT OF 1973 AND WILL BE ISSUED AND SOLD IN RELIANCE ON THE EXEMPTIONS PROVIDED
IN SECTIONS 10-5-9(13) AND 10-5-9(16) OF SUCH ACT. THE SECURITIES OFFERED HEREBY CANNOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED
OF TO ANY PERSON OR ENTITY UNLESS SUBSEQUENTLY REGISTERED UNDER SUCH ACT OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.

 

4.5            
Rule 144 Reporting.

 

		4.5.1	With a view to making available to VGE's stockholders the benefit of certain rules and regulations
of the Commission that may permit the sale of VGE Common Stock to the public without registration from and after the Closing Date,
VGE agrees to:
	 	 	 

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

 

(b)            
File with the Commission, in a timely manner, all reports and other documents required of VIASPACE under the Exchange Act.

 

		4.5.2	With a view to making available to VIASPACE’s stockholders the benefit of certain rules and
regulations of the Commission that may permit the sale of VIASPACE Common Stock to the public without registration from and after
the Closing Date, VIASPACE agrees to:
	 	 	 

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

 

(b)            
File with the Commission, in a timely manner, all reports and other documents required of VIASPACE under the Exchange Act.

 

SECTION V

INDEMNIFICATION; REMEDIES

 

5.1            
Survival. All representations, warranties, covenants, and obligations in this Agreement shall survive the Closing and
expire thereafter upon and coincident with the period of limitations applicable thereto (the "Survival Period"). The
right to indemnification, payment of damages or other remedy based on such representations, warranties, covenants, and obligations
will not be affected by any investigation conducted with respect to, or any knowledge acquired (or capable of being acquired) at
any time, whether before or after the execution and delivery of this Agreement or the Closing Date, with respect to the accuracy
or inaccuracy of or compliance with, any such representation, warranty, covenant, or obligation. The waiver of any condition based
on the accuracy of any representation or warranty, or on the performance of or compliance with any covenant or obligation, will
not affect the right to indemnification, payment of damages, or other remedy based on such representations, warranties, covenants,
and obligations.

 

5.2            
Indemnification. From and after the Closing until the expiration of the Survival Period, each Signatory shall indemnify
and hold harmless each of the other Signatories from and against any damages arising, directly or indirectly, from or in connection
with:

 

    	14

    	 	

    
 

5.2.1       
Any breach of any representation or warranty made by such Indemnifying Signatory in this Agreement or in any certificate
delivered by such Person pursuant to this Agreement; or

 

5.2.2       
Any breach by the Indemnifying Signatory of any covenant or obligation of such Person in this Agreement required to be performed
thereby on or prior to the Closing Date.

 

5.3            
Special Indemnity and Covenant Not to Sue.

 

5.3.1       
Cross Entity Indemnification. Should neither VIASPACE nor VGE elect to forego changing its name such that the word
“VIASPACE” or any derivative thereof is a part of such name, then each of VIASPACE and VGE (each an “Indemnifying
Entity”) shall indemnify the other (the “Indemnified Entity”) for any claims brought against such Indemnified
Entity solely on account of confusion created by the Indemnified Entity’s continued use of such word in its name and not
on account of the Indemnified Entity’s involvement in or with the underlying claims being asserted.

 

5.3.2       
Chang Indemnification. Notwithstanding any provision in this Agreement to the contrary, VIASPACE and VGE, jointly
and severally, shall indemnify, defend and hold harmless each of the Chang Indemnified Parties from and against any and all losses,
liabilities, claims, obligations, damages, costs, expenses (including, without limitation, reasonable attorneys’ fees, disbursements
and court costs), for, resulting from, relating to or arising in connection with any such Person having served in the capacity
of director, officer, employee, note-holder or equity holder of VIASPACE or any Person who or which is or was an Affiliate thereof
arising prior to or in connection with the Recapitalization, except, however, that with respect to Sung Chang as
an Indemnified Party, VIASPACE and each such Affiliate thereof shall indemnify Sung Chang in his former capacity as a member of
the board of directors, employee and officer thereof to the fullest extent permitted by law and otherwise under the Organizational
Documents for VIASPACE and each such Affiliate thereof and, as a condition of the Covenant Not to Sue, VIASPACE shall maintain
in full force and effect (with VGE maintaining thereafter its own separate such policy) either (a) that certain directors and officers
policy of insurance as was in effect as of the date on which Sung Chang resigned from the VIASPACE Board (the “Existing Policy”)
or (b) such other policy as shall extend no less coverage to Sung Chang as that which is extended to any other Director, but in
no event less than that which was extended to Sung Chang under the Existing Policy, either of which being at the sole cost and
expense of VIASPACE; provided, however, that in no event shall such agreement include indemnification for any liability
incurred by any Indemnified Party for such Person’s taxes incurred in connection with the Recapitalization.

 

5.4            
Breach by Parties. Nothing in this Section 5 shall limit any Signatories' right to pursue any appropriate equitable
remedy against another Signatory (the “Defaulting Party”) in respect to any damages arising, directly or indirectly,
from or in connection with: (a) any breach by such Defaulting Party of any representation or warranty made by such Defaulting Party
in this Agreement or in any certificate delivered by such Defaulting Party pursuant to this Agreement or (b) any breach by such
Defaulting Party of its covenants or obligations in this Agreement.

 

 

    	15

    	 	

    
 

5.5            
Indemnification Procedure. If any third party shall notify any Indemnified Signatory with respect to any matter (a "Third-Party
Claim") which may give rise to a claim for indemnification against any an Indemnifying Signatory under this Section 5, then
the Indemnified Signatory shall promptly notify each Indemnifying Signatory thereof in writing. Any Indemnifying Signatory will
have the right to assume and thereafter conduct the defense of the Third-Party Claim with counsel of its choice reasonably satisfactory
to the Indemnified Signatory; provided, however, that the Indemnifying Signatory will not consent to the entry of any judgment
or enter into any settlement with respect to the Third-Party Claim without the prior written consent of the Indemnified Signatory
(not to be unreasonably withheld) unless the judgment or proposed settlement involves only the payment of money damages and does
not impose an injunction or other equitable relief upon the Indemnified Signatory. Unless and until an Indemnifying Signatory assumes
the defense of the Third-Party Claim as provided in this Section above, however, the Indemnified Signatory may defend against the
Third-Party Claim in any manner it may reasonably deem appropriate. In no event will the Indemnified Signatory consent to the entry
of any judgment on or enter into any settlement with respect to the Third-Party Claim without the prior written consent of each
of the Indemnifying Parties (not to be unreasonably withheld).

 

SECTION VI

GENERAL PROVISIONS

 

6.1            
Expenses. Except as otherwise expressly provided in this Agreement, each party to this Agreement will bear its respective
expenses incurred in connection with the preparation, execution, and performance of this Agreement and the transactions contemplated
by this Agreement, including all fees and expenses of agents, representatives, counsel, and accountants. Notwithstanding the foregoing,
VIASPACE shall pay for the fees and expenses, including attorneys’ fees, not to exceed $40,000 charged by McDaniel Law Group
and Nelson Mullins incurred by Chang or VGE or any other Affiliate thereof in connection with the negotiation and preparation of
Transaction Documents and the License Term Sheet and the agreements and other documents relating contemplated therein (the “Transaction
Costs”), which Transaction Costs shall be paid by VIASPACE in accordance with the terms and conditions of that certain license
agreement entered into by and between VGE and VIASPACE of even date hereof.

 

6.2            
Public Announcements. Subject to Chang’s prior review and approval, VIASPACE and VGE may, but no later than three
business days following the effective date of this Agreement, issue a mutually-agreed press release, but only if issued jointly,
disclosing the transactions contemplated hereby. Chang, VIASPACE and VGE shall consult with each other in issuing any other press
releases or otherwise making public statements or filings and other communications with the Commission or any regulatory agency
or stock market or trading facility with respect to the transactions contemplated hereby and neither party shall issue any such
press release or otherwise make any such public statement, filings or other communications without the prior written consent of
the other, which consent shall not be unreasonably withheld or delayed, except that no prior consent shall be required if such
disclosure is required by law, in which case the disclosing party shall provide the other party with prior notice of such public
statement, filing or other communication and shall incorporate into such public statement, filing or other communication the reasonable
comments of the other party.

 

6.3            
Notices. All notices, consents, waivers and other communications under this Agreement must be in writing and will be
deemed to have been duly given when (a) delivered by hand (with written confirmation of receipt), (b) sent by telecopier (with
written confirmation of receipt), or (c) when received by the addressee, if sent by a nationally recognized overnight delivery
service (receipt requested), in each case to the appropriate addresses and telecopier numbers set forth below (or to such other
addresses and telecopier numbers as a party may designate by written notice to the other parties):

 

    	16

    	 	

    
 

If to VIASPACE:

 

VIASPACE Inc.

382 N. Lemon Ave., Suite 364

Walnut, CA 91789

Telephone: 626-768-3360

Facsimile: 626-578-9063

 

With a copy to:

 

LKP Global Law LLP

1901 Avenue of the Stars, Suite
480

Los Angeles, CA 90067

Telephone: 424-239-1890

Facsimile: 424-239-1882

Attn: Ryan Hong

 

If to the Chang Indemnified
Parties:

 

Mr. Sung Chang

131 Bells Ferry Lane

Marietta, Georgia 30066

With a copy to:

 

McDaniel Law Group, PC

PO Box 681235

Marietta, Georgia 30068-0021

Attn: Frank McDaniel, Esq.

 

6.4            
Jurisdiction and Venue. As between the Parties, the transactions
contemplated in the Transaction Documents shall be governed as to validity, interpretation, construction, effect, and in all other
respects by the laws of the State of Georgia, without regard to the conflicts of laws principals thereof. Each of the Signatories
irrevocably submits to the exclusive jurisdiction of the courts of the State of Georgia located in the County of Cobb and the United
States District Court in and for the Northern District of Georgia for the purpose of any suit, action, proceeding or judgment relating
to or arising out of the Transaction Documents and the transactions contemplated hereby and thereby. Each of the Signatories hereto
irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in
such court. Each Signatory hereto irrevocably waives any objection to the laying of venue of any such suit, action or proceeding
brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum. EACH OF THE SIGNATORIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION
WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

 

6.5            
Further Assurances. The parties agree (a) to furnish upon request to each other such further information, (b) to execute
and deliver to each other such other documents, and (c) to do such other acts and things, all as the other party may reasonably
request for the purpose of carrying out the intent of this Agreement and the documents referred to in this Agreement.

 

    	17

    	 	

    
 

6.6            
Waiver. The rights and remedies of the parties to this Agreement are cumulative and not alternative. Neither the failure
nor any delay by any party in exercising any right, power, or privilege under this Agreement or the documents referred to in this
Agreement will operate as a waiver of such right, power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power, or privilege or the exercise of any other right,
power, or privilege. To the maximum extent permitted by applicable law, (a) no claim or right arising out of this Agreement or
the documents referred to in this Agreement can be discharged by one party, in whole or in part, by a waiver or renunciation of
the claim or right unless in writing signed by the other party; (b) no waiver that may be given by a party will be applicable except
in the specific instance for which it is given; and (c) no notice to or demand on one party will be deemed to be a waiver of any
obligation of such party or of the right of the party giving such notice or demand to take further action without notice or demand
as provided in this Agreement or the documents referred to in this Agreement.

 

6.7            
Entire Agreement and Modification. This Agreement supersedes all prior agreements between the parties with respect to
its subject matter and constitutes (along with the documents referred to in this Agreement) a complete and exclusive statement
of the terms of the agreement between the parties with respect to its subject matter. This Agreement may not be amended except
by a written agreement executed by the party against whom the enforcement of such amendment is sought.

 

6.8            
Assignments, Successors, and No Third-Party Rights. No party may assign any of its rights under this Agreement without
the prior consent of the other parties. Subject to the preceding sentence, this Agreement will apply to, be binding in all respects
upon, and inure to the benefit of and be enforceable by the respective successors and permitted assigns of the parties. Nothing
expressed or referred to in this Agreement will be construed to give any Person other than the parties to this Agreement any legal
or equitable right, remedy, or claim under or with respect to this Agreement or any provision of this Agreement. This Agreement
and all of its provisions and conditions are for the sole and exclusive benefit of the parties to this Agreement and their successors
and assigns.

 

6.9            
Severability. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction,
the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable
only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

 

6.10         
Section Headings, Construction. The headings of Sections in this Agreement are provided for convenience only and will
not affect its construction or interpretation. All references to "Section" or "Sections" refer to the corresponding
Section or Sections of this Agreement. All words used in this Agreement will be construed to be of such gender or number as the
circumstances require. Unless otherwise expressly provided, the word "including" does not limit the preceding words or
terms.

 

6.11         
Governing Law. This Agreement will be governed by the laws of the State of Georgia without regard to conflicts of laws
principles.

 

6.12         
Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original
copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement.

 

 

    	18

    	 	

    
 

IN WITNESS WHEREOF, the Signatories who have affixed
such Person’s signature below has agreed to become a party to, be bound by the terms of and delivered this Agreement as of
the date first written above.

SIGNATORIES

 

	
        VIASPACE:

        

        

        VIASPACE Inc.

        Signed: /s/ Carl Kukkonen          

        Printed Name: Carl Kukkonen

        Title: CEO
	 	
        Signed: /s/ Sung Chang                

        Name: Sung Hsien Chang

	 	 	 
	
        VGE

        VIASPACE Green Energy, Inc.

        Signed: /s/ Sam Chen              

        Printed Name: Sam Chen

        Title: Authorized Director
	 	
        /s/ Carl Kukkonen                  

        Carl Kukkonen

	 	 	 
	
        CHANG

        Chang, LLC

        Signed: /s/ Sung Chang          

        Printed Name: Sung Chang

        Title: Authorized Member
	 	
        /s/ Steve Muzi                       

        Steve Muzi

	 	 	 

 

 

    	19Exhibit 10.2

 

SUPPLY AND COMMERCIALIZATION AGREEMENT

BY AND BETWEEN

VIASPACE GREEN ENERGY INC.

AND

VIASPACE INC.

 

 

 

 

 

September 30, 2012

 

 

    	1

    	 	

    
 

SUPPLY, LICENSE AND COMMERCIALIZATION

AGREEMENT

 

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 VIASPACE Green Energy, Inc., a British Virgin Islands company (“VGE”)
and VIASPACE Inc., a corporation organized under the laws of the State of Nevada, with offices located within the State of California
(“VIASPACE”). VGE and VIASPACE 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:

 

VGE controls certain
know-how and other rights related to Giant King Grass. Through its stock ownership in VGE through the Effective Date, VIASPACE
has garnered considerable knowledge and experience in promoting and marketing Giant King Grass. VGE and VIASPACE 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, VGE and VIASPACE 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.

 

“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.

 

    	2

    	 	

    
 

“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 VGE: 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 VGE 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 VIASPACE’s designated carrier in the People’s Republic of China of a product described in a
VIASPACE Purchase Order issued to VGE pursuant to this Agreement.

 

“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.

 

    	3

    	 	

    
 

“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.

 

“Exclusive Period” shall
mean that period of time as measured from the Effective Date through to the date on which (a) the Term of this Agreement shall
expire, (b) this Agreement is converted to a non-exclusive license, if ever; or (c) VIASPACE commences any research, development
or commercialization of a grass similar or otherwise having competitive properties to Giant King Grass (or attempting such actions)
or otherwise engages in any other act or omission in breach of this Agreement, whichever date or event is first to occur.

 

“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 VIASPACE 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 VIASPACE. 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 VIASPACE 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 VGE License.

 

“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 VGE 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 VGE and any and all documents relating thereto.

 

    	4

    	 	

    
 

“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 VIASPACE 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 VIASPACE’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 VGE 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 VGE: 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 VGE IP, including, without limitation, GKG and GKG IP.

 

“VGE IP” shall have
the meaning ascribed thereto in Section 8.1 of this Agreement.

 

“VGE License” shall
mean that certain license entered into by and between VGE and IPA China.

 

“VGE Territory” shall
mean the People’s Republic of China and Taiwan and each respective territory and possession thereof.

 

“VIASPACE Territory”
shall mean the world other than the VGE Territory.

 

ARTICLE 2

GRANT OF LICENSE

AND

APPOINTMENT OF DISTRIBUTOR

 

2.1            
Commercialization 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, VGE
hereby grants to VIASPACE for the Term a nontransferable, royalty-bearing exclusive license to Commercialize Giant King Grass within
the VIASPACE Territory and to use the GKG IP and VGE Tradename, including, without limitation, to reproduce and publicly display
the VGE Tradename and GKG Tradename solely in connection with its license to Commercialize Giant King Grass and as otherwise provided
in this Agreement (the “Commercial License”). The Commercial License granted under this Agreement is personal to VIASPACE,
with no right whatsoever to assign, sublicense or otherwise grant any interest therein to any Third Party, without the prior written
consent of VGE, which consent will not be unreasonably withheld, delayed or conditioned. VIASPACE shall use the VGE Tradename and
GKG IP only for the purposes set forth in this Agreement and in compliance with applicable laws. VIASPACE agrees that it will do
nothing inconsistent with VGE’s ownership of the VGE Tradename or GKG IP, with its use thereof inuring to the benefit of
and be on behalf of VGE as the licensor. VIASPACE shall use the VGE 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 VGE and such tradenames.

 

2.2            
VIASPACE Restrictive Covenants.

 

(a)             
Competing Giant King Grass. From and after the Effective Date and for three (3) years following the earlier of the expiration
or termination of the Agreement, VIASPACE shall not and shall cause its Affiliates to not, directly or indirectly, including, without
limitation, through a third party:

 

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(i)              
Manufacture (to include, without limitation, the planting, growing, harvesting and processing of seedlings and producing
of pellets therefrom), Commercialize or otherwise engage in any research or development of a grass or any other product or material
having similar or otherwise competitive properties to Giant King Grass (a “Competitive Product”), except that upon
the prior written consent of VGE during the Term of this Agreement, for purposes of crop biodiversity; or

 

(ii)            
Solicit for such prohibited purposes any customer, supplier or other vendor or employee with which VIASPACE had a relationship
during the Term for the research, development, Manufacture or Commercialization of Giant King Grass or any Competitive Product.

 

(b)            
No Sales Outside of VIASPACE Territory. Without the prior written consent of VGE, in no event shall VIASPACE, directly or
indirectly, (1) attempt to Commercialize or Commercialize Giant King Grass outside of the VIASPACE Territory or knowingly supply
Giant King Grass within the VIASPACE Territory for resale or use within the VGE Territory during the Term of this Agreement; (2)
make any use of Giant King Grass or VGE Confidential Information, including, without limitation, the composition or other genetic
makeup of Giant King Grass, for any purpose or otherwise disclose any of the same to any Person whatsoever other than as is expressly
permitted under this Agreement during the Term; or (3) reverse engineer, decode or otherwise attempt to determine or determine
or modify or improve on the composition or genetic makeup of Giant King Grass or otherwise create any derivative or hybrid thereof,
unless any such activities are disclosed in advance and in writing to VGE and the results thereof are owned by and assigned to
VGE upon and coincident with any such notice (or failing notice, demand by VGE following it actually becoming aware thereof)(the
“Results”), in which event such Results shall be licensed to VIASPACE at its election upon mutually agreed terms and
conditions.

 

(c)             
Business Protection Agreement. Consistent with the foregoing, VIASPACE shall enter into, provide VGE an executed copy thereof
and agree to enforce a business protection agreement with each of its employees pursuant to which each such individual agrees to
substantially the same restrictions and to the reasonable satisfaction of VGE, with VGE being a third party beneficiary thereof.
A form of the Business Protection Agreement is attached hereto and marked as Exhibit “A.”

 

(d)            
Conditions to Commercial License. As conditions precedent to the Commercial License, each of the following shall have been
fully executed as of the Effective Date:

 

(i)              
That certain Lock Up Agreement shall have been entered into by all parties thereto; and

 

(ii)            
That certain Funding Agreement entered into by and between VIASPACE and Kevin Schewe, MD.

 

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2.3            
VGE’s Restrictive Covenants. As of the Effective Date and for the Exclusive Period, VGE will refrain from directly
or indirectly, including, without limitation, through a third party, (a) attempting to commercialize or commercialize Giant King
Grass in the VIASPACE 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 VIASPACE Territory; or (c) knowingly supplying
GKG or otherwise licensing GKG IP within the VGE Territory for resale or use of GKG within the VIASPACE Territory.

 

ARTICLE 3

RESERVATION OF RIGHTS

 

Except as expressly granted under the Commercial
License, VGE reserves to itself any and all rights to the Giant King Grass and the VGE IP. Consistent with the foregoing, nothing
in this Agreement, subject to Section 2.3(c) above, shall be deemed to restrict or otherwise impair or impede the right or ability
of VGE or any Affiliate or sublicensee thereof to market, sell, distribute, package, label or appoint additional Persons as licensees
of Giant King Grass, subcontract any such rights to, or otherwise enter into any arrangement whatsoever with any Person with respect
to Giant King Grass or otherwise deal in or with Giant King Grass within the VGE Territory.

 

ARTICLE 4

COMMERCIALIZATION

 

4.1            
In General. VIASPACE, at its sole cost and expense, shall use commercially reasonable efforts to Commercialize
Giant King Grass throughout the VIASPACE Territory, which efforts shall include, without limitation, providing appropriate incentives
consistent with its normal and lawful business practices to sales representatives involved in the Commercialization of Giant King
Grass. Without limiting the foregoing, VIASPACE shall (a) prepare and provide VGE for its prior
review and approval all promotional, sales and marketing materials that are intended to be used or otherwise relied upon for the
Commercialization (the “Marketing Materials”) of Giant King Grass within the VIASPACE Territory, which shall in all
events be in consistent and compatible with the marketing materials used by VGE, if any, for Commercialization of Giant King Grass
within the VGE Territory and otherwise in compliance with applicable laws; provided, however, that if VGE shall not
have either approved or disapproved of such Marketing Materials within ten days of its receipt thereof, then such Marketing Materials
shall be deemed approved by it and in any event VGE shall not unreasonably withhold its approval of such materials; (b)
not extend any written or oral warranty or guarantee or make any representation or claims with respect to any aspect of Giant King
Grass, without VGE’s express prior written consent, which consent shall not be unreasonably delayed or denied; and (c) not
make any modifications or additions to Giant King Grass, without VGE’s express prior written consent, which consent shall
not be unreasonably delayed or denied. Subject to any limitations imposed by applicable law, all such Marketing Materials
and all documentary information and oral presentations (where practicable) regarding the marketing and promotion of Giant King
Grass in countries of the VIASPACE Territory shall acknowledge VIASPACE’s distribution and license arrangement. Copies of
all Marketing Materials used in the VIASPACE Territory will be archived by VIASPACE in accordance with applicable law.
VIASPACE shall be responsible, at its sole cost and expense, for the preparation and printing of the Marketing Materials for Commercialization
of Giant King Grass in the VIASPACE Territory.

 

4.2            
Sales and Distribution. VIASPACE shall be responsible for booking sales, warehousing and distributing
Giant King Grass in the VIASPACE Territory. If VGE receives any orders for use of Giant King Grass in the VIASPACE Territory, it
shall refer such orders to VIASPACE. If VIASPACE receives any orders for use of Giant King Grass in the VGE Territory, it shall
refer such orders to VGE. VIASPACE shall be solely responsible for handling all returns and all aspects of order processing, invoicing
and collection, distribution, inventory and receivables of Giant King Grass as such matters pertain to its Commercialization within
the VIASPACE Territory. If Giant King Grass sold in the VIASPACE Territory is returned to VGE, it shall be shipped at VIASPACE’s
sole cost and expense to a facility designated by VIASPACE.

 

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4.3            
Reporting of Sales. VIASPACE shall provide to VGE 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 VIASPACE 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

 

5.1            
In General. VIASPACE 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 VIASPACE to VGE on or before Delivery.

 

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

 

5.3            
Forecasts. Not later than the tenth (10th) day of each calendar month during each Contract Year (the “Forecast Date”),
VIASPACE shall provide VGE, a rolling, good-faith, twelve (12) month written forecast of expected purchases by VIASPACE of Giant
King Grass, and the corresponding expected required Pick Up Dates (the “Forecast”) in order to assist VGE in its Delivery
planning. The first four (4) months of the Forecast shall be binding on VIASPACE (the “Binding Forecast”), whereas
the remaining eight (8) months shall constitute a non-binding estimate of such Giant King Grass requirements. In the event VIASPACE
fails to furnish a Forecast within five (5) days after any Forecast Date, the then current Forecast shall apply until changed at
a subsequent Forecast Date (on a ‘rolled-forward’ basis, with the new twelfth (12th) month of the Forecast being the
quantity of the ‘rolled-forward’ eleventh (11th) month). During the Term, with respect to each month that is added
as the fourth (4th) month to a Forecast, the quantities and types of Giant King Grass forecasted for such fourth (4th)
calendar month may not fluctuate (up or down) by more than five percent (5%) from the quantities and types of Giant King Grass
forecasted for such month when it was the fifth (5th) month of a Forecast.

 

5.4            
Purchase Orders. VIASPACE shall submit to VGE purchase orders for Giant King Grass (“Purchase Orders”) for purchase
of the Product at the FPTP consistent with the Forecast at least sixty (60) days before Delivery, which date shall be set forth
in the Forecast and Purchase Order. Each Purchase Order shall be in writing and shall specify (a) the quantity of Giant King Grass
to be delivered; (b) VIASPACE’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.

 

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5.5            
Acceptance of Purchase Orders. Provided that VIASPACE has complied with Sections 5.3 and 5.4, VGE 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 for the quantities set forth in the Binding Forecast. In the event that VGE wishes
to reject a Purchase Order due to a failure by VIASPACE to comply with Sections 5.3 or 5.4, it shall notify VIASPACE of its decision
to do so within ten (10) Business Days after VGE’s receipt of the Purchase Order with an explanation of the reasons for the
rejection.

 

5.6            
Purchase Order Changes. If VIASPACE requests changes to any Purchase Order prior to the Pick Up Date of Giant King Grass,
VGE will attempt to accommodate such changes within its reasonable distribution capabilities and efficiencies. VGE shall advise
VIASPACE of its fully burdened costs associated with making any such change and VIASPACE shall be deemed to have accepted the obligation
to pay VGE for such costs if VIASPACE directs VGE in writing to proceed to make the change after receiving notice of such costs.

 

5.7            
Standard 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.

 

5.8            
Invoicing and Delivery of Giant King Grass. VGE shall invoice VIASPACE 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 VGE’s
invoice, VIASPACE shall pay the invoiced amount in no event later than the Pick Up Date. Each order of Giant King Grass under a
VIASPACE Purchase Order may be picked up by VIASPACE after the Pick Up Date, but in no event prior to the date on which VIASPACE
shall have paid in full the invoiced amount, with Delivery being deemed accepted by VIASPACE upon and coincident with the Pick
Up Date. Delivery shall be made EXW (Incoterms 2010) at the Guangdong airport location for VIASPACE’s designated common carrier
in the Peoples Republic of China, with VGE having no responsibility to VIASPACE 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

 

6.1            
Transaction Legal Fees. VIASPACE shall pay to Sung Chang or his designee the Legal Fees not later than the date immediately
preceding the second anniversary of the Effective Date.

 

6.2            
Final Giant King Grass Transfer Price.  VIASPACE shall pay to VGE on or before the Pick Up Date the per unit FPTP for
the Giant King Grass Delivered by VGE in accordance with each respective or applicable Purchase Order as provided in Article 5
above.

 

6.3            
Royalty Payments. In consideration for the Commercial License, VIASPACE shall pay to VGE the royalties on its Net Sales
of Giant King Grass as set forth on that Exhibit “B,” entitled “Royalty Payments.”

 

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6.4            
Royalty Reports; Payment Due Dates.

 

(a)             
In General. VIASPACE 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 VGE, on a country-by-country
basis, including, without limitation, the Royalty Report below, (iii) be in sufficient detail so as to enable VGE to confirm compliance
by VIASPACE 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 VGE under Section 4.3 of this Agreement, VIASPACE shall provide
VGE a non-binding royalty estimate within fifteen (15) days after close of each calendar quarter. VIASPACE will provide to VGE,
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 VIASPACE
Territory; and (v) any other information reasonably requested by VGE to verify the accuracy of the royalty payments hereunder.

 

(c)             
VGE’s Right to Audit. VIASPACE shall, not more than one time per Contract Year, during normal business hours, permit
auditors designated by VGE, at VGE’s expense and upon thirty (30) days written notice, full rights of inspection and audit
of VIASPACE’s books, records and operations, including, without limitation, any and all of the manufacturing, sales and growing
locations of VIASPACE 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, VIASPACE
shall remit promptly, but in no event later than thirty (30) days following the date on which any such audit results are presented
to VIASPACE, to VGE the amounts thereof, and if VIASPACE fails to remit payment within such 30 day period, VGE 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, VIASPACE shall also remit to VGE
the entire reasonable and documented cost of such audit.

 

6.5            
Payment Terms. All payments to be made pursuant to this Agreement shall be made by VIASPACE to VGE 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.

 

6.6            
Foreign 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 VGE 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.

 

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6.7            
Blocked Payments. In the event that, by reason of applicable laws or regulations in any country, it becomes impossible
or illegal for VIASPACE or any Affiliate or sublicensee thereof, to transfer, or have transferred on its behalf, fees or other
payments due to VGE under this Agreement, VIASPACE shall promptly notify in writing VGE 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 VGE in a recognized
banking institution designated by VGE or, if none is designated by VGE within a period of thirty (30) days, in a recognized
banking institution selected by VIASPACE or its Affiliate or sublicensee, as the case may be, and identified in a written notice
delivered to VGE.

 

6.8            
Taxes. 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 VIASPACE by VGE pursuant to this Agreement (“Taxes”)
shall be the responsibility of VIASPACE. Should VIASPACE be obligated by law to withhold any Taxes on payments made to VGE for
product invoiced under this Agreement, the payment due hereunder shall be increased such that after the withholding of the appropriate
amount, VGE receives the amount that would have been paid but for the Taxes withheld. VIASPACE shall pay all such Taxes in a timely
manner and promptly provide VGE with a receipt evidencing such payment. Should VGE be obligated to pay such Taxes, and such Taxes
were not satisfied by way of withholding, VIASPACE shall promptly reimburse VGE for such payment, in an amount such that after
the payment of the Taxes, VGE 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.

 

ARTICLE 7

[Reserved.]

 

ARTICLE 8

INTELLECTUAL PROPERTY

 

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

 

8.2            
VGE 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 the VGE License, 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, VGE grants no right and makes no covenant
to VIASPACE that is broader than or otherwise exceeds the scope of rights and covenants granted to VGE under either (or both of)
the Parent License or Grandparent License, as the case may be. To the knowledge of VGE, no act or omission has occurred since the
30th day of July 2012 that would have a material adverse effect on the Parent License. VGE hereby agrees to use commercially reasonable
efforts to maintain the Parent License in accordance with its terms and condition.

 

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

 

8.4            
Inspection. VGE 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 VIASPACE’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). VIASPACE agrees
to cooperate fully with any such inspection by VGE and make VIASPACE’s employees available to answer VGE’s questions
as part of such inspection.

 

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

 

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

 

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ARTICLE 9

CONFIDENTIALITY

 

9.1            
Confidentiality. 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 VIASPACE
hereunder shall be received and maintained by the VIASPACE 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.

 

9.2            
Return 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.

 

9.3            
Ancillary 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

 

10.1         
Term. Unless sooner terminated as otherwise provided in this Agreement, the term of this Agreement shall:

 

(a)             
The Initial Term. Commence on the Effective Date and shall continue in full force and effect until the second (2nd)
anniversary of the Effective Date (the “Initial Term”); and

 

(b)            
Renewal Term. Subject to VIASPACE otherwise being in full compliance with this Agreement (including, without limitation,
the timely payment of any and all amounts due hereunder) prior to the delivery of any Notice of Renewal and the commencement of
each then applicable Renewal Term, this Agreement may be renewed on the same terms and conditions hereof:

 

(i)              
Provided that VIASPACE shall have first satisfied the conditions for any such renewal as set forth in Exhibit “B”
for each such applicable renewal, VIASPACE shall have the option to renew the term of this Agreement for four (4) consecutive and
subsequent terms, each being for a two (2) year period (for a total of ten (10) years from the Effective Date assuming each renewal
is elected)(each, a “Conditional Renewal Term”) by providing written notice of its election to renew such term (each,
a “Renewal Notice”) to VGE at least three (3) months prior to the expiry of the then current Initial Term or Conditional
Renewal Term, as the case may be; and

 

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(ii)            
Provided it delivers a Renewal Notice to VGE at least three (3) months prior to the expiry of the then Renewal Term, this
Agreement shall automatically renew on the same terms and conditions hereof for consecutive two (2) year periods thereafter without
any further act on the part of either Party (each, an “Evergreen Renewal Term”); provided, however, that
in no event shall the term of this Agreement be renewed for the succeeding Evergreen Renewal Term if and to the extent either Party
delivers to the other written notice of its intent to not so renew this Agreement (the “Notice of Nonrenewal”) at least
sixty (60) days prior to the end of any such Evergreen Renewal Term (as the case may be)(together, the Conditional Renewal Term
and Evergreen Renewal Term shall be referred to as the “Renewal Terms”); provided, further, that in no
event shall either Party have the right to deliver a Notice of Nonrenewal if and to the extent VIASPACE’s Net Sales exceed
Five Million Dollars ($5,000,000) during the first applicable Evergreen Renewal Term; Eight Million Dollars ($8,000,000) during
the second applicable Evergreen Renewal Term and Ten Million Dollars ($10,000,000) during the third and subsequent Evergreen Renewal
Terms, and to the extent any such Notice of Nonrenewal is delivered by VGE, the Commercial License shall convert to a nonexclusive
license in those countries in which VIASPACE is engaged actively in the commercialization of GKG.

 

10.2         
Grounds 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 VIASPACE, the period for cure of any such breach shall be
ten (10) days, with VIASPACE 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, VGE shall have the right, in its sole and absolute discretion, to cease
Delivery of any Giant King Grass until VIASPACE has cured any such material breach for which it is given notice under this Agreement;
provided, however, that if and to the extent VIASPACE shall have fully paid for finished product that is the subject
of an invoice, then VGE 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, VGE is unable to otherwise perform its material obligations hereunder, this Agreement may be terminated by either Party
upon ten (10) days written notice.

 

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10.3         
Consequences of Termination.

 

(a)             
Termination of Agreement. Upon any termination or other expiration of this Agreement, among other things, the Commercial
License shall terminate and VIASPACE shall forthwith terminate and cease its use of Giant King Grass and the VGE IP and any further
Commercialization of Giant King Grass in the VIASPACE Territory. Immediately upon any such termination or expiration, all rights
of VIASPACE to the VGE 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 VGE.

 

(b)            
Conversion To Nonexclusive License. In lieu of terminating this Agreement under Section 10.2(b) above, VGE 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 VGE 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 VGE or any Affiliate thereof or any third party
acting for and on behalf of VGE or any such Affiliate.

 

(c)             
Return of VGE Property. Promptly upon, but in no event later than 15 consecutive calendar days thereafter, the expiration
or earlier termination of this Agreement, VIASPACE, at VIASPACE’s sole cost and expense, shall transfer, assign and otherwise
deliver unconditionally and irrevocably to VGE 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 VGE IP and any and all other VGE
property relating to Giant King Grass and the Commercialization thereof. VIASPACE acknowledges and agrees that all rights, title
and interest in and to the foregoing shall remain exclusively with VGE following termination of this Agreement.

 

(d)            
Reports. VIASPACE shall render an accounting to VGE of any royalties and other payments that may be due to VGE 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.

 

(f)             
Bankruptcy or Termination for Cause. In the event this Agreement is properly terminated under Section 10.2 above
by (i) VIASPACE account of either (1) a material uncured default on the part of VGE pursuant to Section 10.2(b) of this Agreement,
or (2) Bankruptcy on the part of VGE or (ii) either party pursuant to Section 10.2(d) of this Agreement, then and in either such
case, the obligations of Section 2.2(a) as and to the extent the same shall relate to a Competing Product shall terminate upon
and coincident with the effective date of any such termination.

 

10.4         
Survival. The following Articles and Sections of this Agreement shall survive termination or expiration of this Agreement:
Sections 2.2, 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.

 

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ARTICLE 11

REPRESENTATIONS AND WARRANTIES;

INDEMNIFICATION; LIMITATION ON LIABILITY

 

11.1         
Compliance with Laws. VIASPACE 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 VIASPACE Territory. VGE shall comply in all material respects with all applicable laws regulating the Manufacture
GKG under this Agreement. VGE 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 VGE Territory.

 

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

 

(a)             
Status. VGE 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 VGE to dissolve VGE. VGE has the corporate power and authority
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. Subject to Section 8.2 of this Agreement, the execution, delivery and performance of this Agreement
by VGE: (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.

 

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

 

(a)             
Status. VIASPACE 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 VIASPACE to dissolve VIASPACE. VIASPACE has the corporate power to
enter into this Agreement and to perform all its obligations hereunder.

 

(b)            
All Necessary Proceedings. VIASPACE 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 VIASPACE: (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. VIASPACE 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 VIASPACE Territory. VIASPACE 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 VGE or of VGE’s Affiliates or materially adversely affect the reputation of Giant King Grass or
the VGE Tradename.

 

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11.4         
Indemnification by VIASPACE. VIASPACE shall indemnify and hold harmless VGE and each of its Affiliates and each director,
officer, employee, agent, successor and assign of VGE and each such Affiliate (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) 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 VIASPACE under this Agreement; or (iii) any breach or violation of any covenant or agreement by VIASPACE or other VIASPACE
Indemnified Party (including under this Section) under or pursuant to this Agreement.

 

11.5         
Indemnification by VGE. VGE shall indemnify and hold harmless VIASPACE and each of its Affiliates and each director,
officer, employee, agent, successor and assign thereof (collectively, the “VIASPACE 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 VIASPACE 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 VGE in this Agreement; or (ii) any material breach or violation of
any covenant or agreement of VGE or other VGE Indemnified Party (including under this Section) under or pursuant to this Agreement.

 

11.6         
Indemnification 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.

 

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(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.

 

11.7         
Insurance. 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.

 

11.8         
Disclaimers. 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.

 

11.9         
Limitation 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. VGE’S
AGGREGATE LIABILITY TO VIASPACE ARISING FROM THIS AGREEMENT, WHETHER IN CONTRACT OR TORT, WILL NOT EXCEED THE AMOUNTS PAID BY VIASPACE
FOR THE PURCHASE OF PRODUCTS THAT IT IS UNABLE TO SELL WITHIN THE TERRITORY.

 

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ARTICLE 12

MISCELLANEOUS

 

12.1         
Force 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.

 

12.2         
Notices. 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 VIASPACE, to:

 

        VIASPACE, Inc.

        382 N. Lemon Ave., Suite 364

        Walnut, CA 91789

        Telephone: 626-768-3360

        Facsimile: 626-578-9063

 

        With a copy to:

 

        LKP Global Law LLP

        1901 Avenue of the Stars, Suite 480

        Los Angeles, CA 90067

        Telephone: 424-239-1890

        Facsimile: 424-239-1882

        Attn: Ryan Hong
	
        If to VGE, to:

 

        VIASPACE Green Energy, Inc.

        Mr. Sung Chang

        131 Bells Ferry Lane

        Marietta, Georgia 30066

        ATTN: President

        With a copy to:

         

McDaniel Law Group, PC

        P.O. Box 681235

        Marietta, Georgia 30068

        Attn: Mr. Frank McDaniel, Esq.

 

 

 

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.

 

12.3         
Governing 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.

 

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12.4         
Alternative 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.

 

12.5         
Venue 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.

 

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

 

12.7         
Claim 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.

 

12.8         
Assignment. Neither this Agreement nor any of the rights or obligations of VIASPACE may be assigned, encumbered, sublicensed
or otherwise transferred by VIASPACE, without the prior written consent of VGE, in its discretion; provided, however,
that VIASPACE, 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 VIASPACE shall assume all obligations of VIASPACE under this Agreement. No assignment
shall relieve VIASPACE of responsibility for the performance of any accrued obligation which VIASPACE then has hereunder. Any attempted
assignment in violation of this provision is void. This Agreement may be assigned by VGE in its sole discretion without prior notice.

 

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

 

12.10      
Entire 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.

 

12.11      
Exhibits. 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.

 

12.12      
Waiver; 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.

 

12.13      
Equitable 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.

 

12.14      
Independent 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.

 

12.15      
No 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 VIASPACE the Legal Fees as set
forth in Section 6.1 of this Agreement.

 

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12.16      
Restrictive 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.

 

12.17      
Construction; 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.”

 

12.18      
Counterparts. 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.

 

	
        VIASPACE

        VIASPACE Inc.

        By: /s/ Carl
        Kukkonen               

        Name: Carl Kukkonen

        Title: CEO
	
        VGE

        VIASPACE Green Energy, Inc.

        By: /s/ Sung
        Chang                    

        Name: Sung Chang

        Title: President

 

    	23

    	 	

    
 

 

EXHIBIT “A”

 

VIASPACE, INC.

BUSINESS PROTECTION AGREEMENT

WITH [EMPLOYEE][CONSULTANT]

 

THIS BUSINESS PROTECTION
AGREEMENT (the “Agreement”) is made and entered into as of the __ day of September 2012 (the “Effective Date”),
by and between VIASPACE, Inc., a Nevada corporation doing business within the State of [____] (the “Company”) and [_____________],
an individual residing in the State of [______] (“[Consultant][Employee]”). Company and [Consultant][Employee] are
sometimes individually referred to in this Agreement as a “Party” and collectively as the “Parties.”

 

Each of the Parties hereby acknowledges
that it has entered into, is entering into or as soon as reasonably practicable will enter into [a consulting or other independent
contractor relationship][an employment relationship], pursuant to which [Consultant][Employee] will be engaged by Company to render
certain services for and on behalf of Company and its Affiliate (the “[Consulting][Employment] Relationship”). Except
as otherwise provided in this Agreement, (a) the terms and conditions for such [Consulting][Employment] Relationship (e.g.,
scope of services, compensation and the duration for which such services shall be rendered) are to be evidenced in a separate agreement,
whether oral or in writing (the “Services Agreement”) and (b) capitalized terms and phrases shall have the meaning
ascribed thereto in that certain attachment entitled “Attachment 1, Definitions,” which attachment is made a part hereof
and incorporated herein.

 

In consideration of the benefits each Party
is to receive or receives as a result of the [Consulting][Employment] Relationship, the sum of One Dollar ($1.00) and other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally
bound by this Agreement, hereto hereby agree as follows:

 

		1.	Restrictive Covenants.

 

(a)   Nondisclosure.

 

(i)   In General. [Consultant][Employee] acknowledges that it may be exposed to certain Confidential Information and Trade Secrets
and the Intellectual Property Rights thereto during the Term, and its unauthorized use or disclosure of such information, data
or rights could cause immediate and irreparable harm to Company or an Affiliate or a Business Client thereof. Accordingly, except
to the extent that it is required to use such property, information, technology or data to perform its obligations under the [Consulting][Employment]
Relationship, [Consultant][Employee] agrees [and agrees to cause its Designated Representatives (as defined below)] to strictly
maintain the confidentiality, including, without limitation, to refrain, directly or indirectly, from releasing, publishing, revealing
or otherwise disclosing to any other Person, any and all such Confidential Information during the Term and for a period of (1)
in the case of Confidential Information, [five (5)] years immediately thereafter and (2) in the case of Trade Secrets, for the
entire period during which, if longer than five years, such information shall continue constitute a Trade Secret, without the express
and duly authorized written consent of Company, which consent may be withheld, delayed, denied or conditioned in Company’s
sole and absolute discretion.

 

    	24

    	 	

    
 

(ii)   [Consultant
Disclosure to Designated Representatives. Without limiting the generality of the foregoing, Consultant may disclose the Confidential
Information to only (1)(A) its directors, officers or employees who prior to any such disclosure shall have agreed in writing to
the terms and conditions of this Agreement (or are otherwise obligated to be subject to such terms and conditions), pursuant to
which, among other things, such Persons have agreed to both maintain such Confidential Information in strict confidence and exclusively
use such Confidential Information solely for the Consulting Relationship and (B) agents who are obligated to Consultant under fiduciary
standards of confidentiality (i.e., attorneys, licensed accountants and CPA’s)(collectively, the “Designated
Representatives”) and (2) who are thereafter provided such Confidential Information only on a “need-to-know”
basis for the [Consulting][Employment] Relationship. Consultant agrees to and shall be responsible for any breach of this Agreement
by itself or any Person to whom it may have made a disclosure of the Confidential Information of Company or an Affiliate, including,
without limitation, any of its Designated Representatives.]

 

(iii)   Exception
to Confidentiality Obligation. The confidentiality obligations hereunder shall not apply to information that can be demonstrated
by [Consultant][Employee] to:

 

(1)   Have been developed independently of Company or any Affiliate by or known to [Consultant][Employee] prior to the earlier
of (1) the Effective Date of this Agreement or (2) the [Consulting][Employment] Relationship, and not otherwise assigned, transferred
or otherwise conveyed to Company or any Affiliate under this Agreement or any other agreement;

 

(2)   Have been rightfully received by [Consultant][Employee] in accordance with this Agreement after disclosure to Company by
a third party who did not require Company or any Affiliate or [Consultant][Employee] to hold it in confidence or limit its use
and who did not acquire it, directly or indirectly, from the Company or any Affiliate under a continuing obligation of confidence;
or

 

(3)   Have been in the public domain as of the date of this Agreement, or comes into the public domain during the term of this
Agreement through no fault of [Consultant][Employee].

 

(iv)   Procedure
for Compelled Disclosure. In the event Consultant or its Designated Representatives are legally required or compelled by law, regulation
or other legal process to disclose any of the Confidential Information of Company or an Affiliate, Consultant shall and shall cause
its Designated Representative to: (1) provide prompt prior written notice of such requirement to Company, (2) afford Company an
opportunity to oppose, limit or secure confidential treatment for such disclosure, and (3) if Company is unsuccessful in its efforts
pursuant to clause (2), furnish only that portion of the Confidential Information, which it is legally required to disclose as
advised by its legal counsel.]

 

(b)   Limitations on Use. Except to the extent it is otherwise required to use the Intellectual Property of Company or
any Affiliate in the performance of its obligations under the [Consulting][Employment] Relationship, [Consultant][Employee], directly
or indirectly, shall not and shall not attempt to, use or modify for use or otherwise reverse engineer or decompile, for any purpose
whatsoever or for any Person any of the Intellectual Property (including, without limitation, any process, procedure, software,
hardware, firmware or other technology programs) of Company or any Affiliate during the Term of this Agreement or at any time thereafter,
without the express and duly authorized written consent of Company, which consent may be withheld, delayed, denied or conditioned
in Company’s sole and absolute discretion. As between the Parties, [Consultant][Employee] further agrees that any and all
Intellectual Property of Company or any Affiliate shall remain the sole and exclusive property of Company, and [Consultant][Employee]
shall not have or acquire any ownership or other interest or rights therein.

 

    	25

    	 	

    
 

(c)   Limitation on Solicitation of Business Clients and Personnel. Without the prior written consent of Company, which
consent may be withheld, delayed, denied or conditioned in Company’s sole and absolute discretion, [Consultant][Employee]
shall not, directly or indirectly, alone or in conjunction with any other Person, during the Term and for a period of two (2) years
immediately thereafter:

 

(i)    Solicit any Business Client (1) to which Company or any Affiliate is providing or actively seeking to provide services or
products and (2)(A) with whom or which [Consultant][Employee] had material contact during the Term or (B) with respect to whom
or which [Consultant][Employee] was provided Confidential Information or Trade Secrets by Company or any Affiliate during the Term,
for the purpose of providing such Business Client products or services that are substantially similar to or competitive with the
Restricted Business;

 

(ii)   Solicit any Business Partner with whom or which [Consultant][Employee] had material contact during the Term or with respect
to whom or which [Consultant][Employee] was provided Confidential Information or Trade Secrets by Company or any Affiliate during
the Term, for the purpose of encouraging such Person to sever its employment or other contractual relationship, whether oral or
written, with Company or an Affiliate, or

 

(iii)    Hire, engage or otherwise retain (1) an Company Service Partner or (2) any Person who was an Company Service Partner within
that six (6) consecutive calendar month period immediately preceding the Termination Date, to perform services of a nature substantially
similar to that which such Company Service Partner performed for Company or any Affiliate within that one (1) year period prior
to any such hiring, engagement or other retention or attempted hiring, engagement or other retention by [Consultant][Employee].

 

(d)   Non-Disparagement. During the Term and for a period of two (2) years immediately following the Termination Date,
[Consultant][Employee] shall not engage in the public or private disparagement or criticism, including, without limitation, by
way of preparing or publishing (or both) articles or other written materials, of or about Company or any Affiliate or any business
methods, practice, operation, program, product or service or any officer, director, employee, consultant, or agent thereof.

 

(e)   Duty to Provide Notice. Company or any Affiliate shall have the right to inform any other third-party that Company
or any such Affiliate believes that such third party to be contemplating or participating with [Consultant][Employee] in the use
of or receiving from [Consultant][Employee] services or information in violation of this Agreement or the rights of Company or
any Affiliate hereunder, and that participation by any such third-party with [Consultant][Employee] in activities in violation
of this Agreement may give rise to claims by Company or an Affiliate against such third-party.

 

		2.	Assignment of Work Product.

 

(a)   Work for
Hire. [Consultant][Employee] further acknowledges that all original works of authorship that are made by it (solely or jointly
with others) during the Term and within the scope of the [Consulting][Employment] Relationship shall constitute, as between the
Parties, the sole and exclusive property of Company and protectable by it under applicable copyright laws. As between the Parties,
Company owns and shall own, and [Consultant][Employee] hereby agrees to assign and assigns to Company any and all of such Work
Product to the fullest extent allowable by law, and [Consultant][Employee] shall promptly disclose, but in no event later than
ten (10) consecutive business days following creation, invention or discovery thereof, all such Work Product to Company. In no
event shall [Consultant][Employee] use in connection with the [Consulting][Employment] Relationship or otherwise disclose to Company
or any Affiliate or any Business Partner all or any part of the confidential information, trade secrets or Intellectual Property
owned or in which rights are held to the exclusion of Company by either [Consultant][Employee] (including, without limitation,
the Excluded Property) or any third-party, without the prior written consent of Company, which consent may be withheld, delayed,
denied or conditioned in its sole and absolute discretion.

 

    	26

    	 	

    
 

(b)   Moral Rights.
To the extent [Consultant][Employee] retains any Moral Rights in and to any Work Product, [Consultant][Employee] hereby waives
such Moral Rights and consents to any action with respect to such Moral Rights by or authorized by Company or any Affiliate and
specifically grants to Company or any Affiliate the right to alter such Work Products. [Consultant][Employee] will confirm any
such waivers and consents from time to time as requested by Company or any Affiliate.

 

3.            
Assistance in Securing Intellectual Property Rights. 

 

(a)   In General.
[Consultant][Employee] will assist Company or any Affiliate (or both) in every proper way to obtain and from time to time enforce
United States and foreign Intellectual Property Rights relating to Work Product in any and all countries. To that end, [Consultant][Employee]
will execute, verify, and deliver such documents and perform such other acts (including appearances as a witness) as Company or
any Affiliate may reasonably request for use in applying for, obtaining, perfecting, evidencing, sustaining, and enforcing such
Intellectual Property Rights and the assignment thereof. In addition, upon the request of Company or any Affiliate, [Consultant][Employee]
shall execute, verify, and deliver assignments of such Intellectual Property Rights to Company or its designee. [Consultant][Employee]’s
obligation to assist Company or any Affiliate (or both) with respect to Intellectual Property Rights relating to such Work Product
in any and all countries shall continue beyond the Termination Date.

 

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

 

4.               
No Conflicting Obligation. [Consultant][Employee] represents that its performance of its obligations under this
Agreement and under the [Consulting][Employment] Relationship does not and will not breach any agreement between it and any other
Person. [Consultant][Employee] has not entered into, and it agrees it will not enter into, any agreement either written or oral
in conflict herewith. [Consultant][Employee] shall, during the Term of the [Consulting][Employment] Relationship, diligently promote
the interests of Company and each Affiliate. [Consultant][Employee] shall serve Company and each Affiliate to the best of its ability,
faithfully, honestly, diligently, efficiently and professionally and in compliance with any and all applicable rules, regulations
and laws.

 

    	27

    	 	

    
 

5.               
Company Property. Upon the earlier to occur of any request by Company or any Affiliate (or both) or the Termination
Date, [Consultant][Employee] shall promptly deliver, but in no event later than ten (10) consecutive business days, to Company
all drawings, Work Product and other Intellectual Property owned by or in which rights are held by Company or any Affiliate (and
regardless of whether any of the foregoing is kept in physical or electronic form), including, without limitation, any Confidential
Information and Trade Secrets. [Consultant][Employee] further agrees that it has no right in or to any property owned, licensed,
or otherwise controlled by Company or any Affiliate, whether such property is situated on the premises of Company or any Affiliate
or otherwise and, in particular, has no right of privacy or expectation thereof in or to any computer provided by Company
to [Consultant][Employee] or any disks and other storage media relating thereto, filing cabinets or other work areas, all
of which being subject to inspection by Company personnel at any time with or without notice.

 

6.               
Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be deemed
to have been duly given on the date of service if personally served or if telecopied (if telecopied on a business day and during
business hours at the place of receipt and if receipt is confirmed) or three (3) days after mailed if mailed by reputable international
overnight delivery service, postage prepaid and in any event addressed to the address set forth in the signature clause to this
Agreement or to such other address as shall be designated by written notice issued pursuant hereto.

 

7.               
Remedies; Damages, Injunctions and Specific Performance.

 

(a)   Ancillary Agreement. This Agreement shall be construed as an agreement ancillary to the Services Agreement, written
or oral, entered into by and between the Parties otherwise evidencing the [Consulting][Employment] Relationship, and the existence
of any claim or cause of action of [Consultant][Employee] against Company or any Affiliate, whether predicated on the Services
Agreement or otherwise, shall not constitute a defense to the enforcement by Company of this Agreement.

 

(b)  Survival. It is expressly understood and agreed that the covenants, agreements and services to be rendered and performed
by [Consultant][Employee] under this Agreement shall survive any termination or expiration of this Agreement, whether voluntary
or involuntary, with or without cause, and are special, unique, and of an extraordinary character.

 

(c)  Remedies. In the event of any default, breach or threatened breach by [Consultant][Employee] of this Agreement, Company
shall be entitled, if it so elects, to institute and prosecute proceedings in any court of competent jurisdiction, either at law
or in equity, and shall be entitled to such relief as may be available to it pursuant hereto, at law or in equity, including, without
limitation: (i) damages for any breach of this Agreement; (ii) an order for the specific performance hereof by [Consultant][Employee];
or (iii) an order enjoining [Consultant][Employee] from breaching such provisions, without bond and without prejudice to any other
rights and remedies that Company or any Affiliate may have for a breach of this Agreement.

 

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

 

 

    	28

    	 	

    

(e)  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.

 

(f)   Governing Law; Waiver of Jury Trial and Election of Venue.

 

THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF [_____] 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.

 

THE PARTIES HEREBY AGREE TO SUBMIT TO THE
VENUE AND JURISDICTION OF THE SUPERIOR COURTS IN AND FOR THE COUNTY OF [_____], STATE OF [_____], USA, OR THE FEDERAL DISTRICT
COURT IN AND FOR THE ______ DISTRICT OF ______, 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.

 

8.   Miscellaneous. This Agreement, together with the Services Agreement, if any, contains the complete agreement
concerning the [Consulting][Employment] Relationship between Company or any Affiliate and [Consultant][Employee] as of the date
hereof. The waiver by any party to this Agreement of a default or breach of any Section, subsection or provision of this Agreement
shall not operate or be construed as a waiver of any prior or subsequent default or breach of the same or of a different Section,
subsection or provision by any party hereto. Should any provision of this Agreement require judicial interpretation, the parties
hereto agree that the court interpreting or construing the same shall not apply a presumption that the terms hereof shall be more
strictly construed against one party by reason of the rule of construction that a document is to be more strictly construed against
the party that itself, or through its agent, prepared the same, and it is expressly agreed and acknowledged that Company and [Consultant][Employee]
and each of it and its [Consultant][Employee]s, legal and otherwise, have participated in the preparation hereof. All Sections,
subsections, paragraphs, terms and provisions of this Agreement are severable, and the unenforceability or invalidity of any of
the terms, provisions, Sections, subsections or paragraphs of this Agreement shall not affect the validity or enforceability of
the remaining terms, provisions, Sections, subsections or paragraphs of this Agreement, but such remaining terms, provisions, Sections,
subsections or paragraphs shall be interpreted and construed in such a manner as to carry out fully the intention of the Parties.
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. The rights and obligations of Company or any Affiliate under this
Agreement shall inure to the benefit of and shall be binding upon any affiliate, successor or assign of or to the business of Company
or any Affiliate. Neither this Agreement nor any rights or obligations of [Consultant][Employee] shall be transferable or assignable
by [Consultant][Employee] without Company's prior written consent, and any attempted transfer or assignment hereof by [Consultant][Employee]
not in accordance herewith shall be null and void.

 

    	29

    	 	

    
 

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

 

	
        Company

 

 

        VIASPACE, Inc.

        Signature:                            

        Printed Name: Mr. __________

        Title: President 

        Address: 
	
        [CONSULTANT][EMPLOYEE]

 

 

        [_________]

        Signature:
        ____________________________

        Printed Name: 

        Address: 

 

 

 

    	30

    	 	

    
 

ATTACHMENT 1

TO

BUSINESS PROTECTION AGREEMENT

 

DEFINITIONS

 

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

 

“Affiliate” means, with
respect to Company, a Person, directly or indirectly, whether before, as of or following the Effective Date, that controls, is
controlled by or is under common control with Company. For purposes of this definition, “control” shall mean beneficial
ownership (direct or indirect) of more than 50% of the outstanding voting stock or other voting rights entitled to elect directors
(or in the case of an entity that is not a corporation the election or appointment of the corresponding managing authority).

 

“Business Client” shall
mean any Person who or that is an actual or prospective purchaser of either the services or products offered by Company or an Affiliate
(i.e., a client or customer).

 

“Business Partner” shall
mean any Business Client, vendor, supplier, investor, lender, Service Partner with which Company or any Affiliate maintains or
undertakes to develop or maintain a business relationship.

 

“Company Service Partner”
shall mean any Person other than [Consultant][Employee] who rendered services as either an consultant or independent contractor,
whether under the terms of an agreement substantially similar to this Agreement or otherwise, for and on behalf of Company or any
Affiliate and with whom [Consultant][Employee] has material contact during the Term of this Agreement.

 

“Confidential Information”
shall mean any and all Intellectual Property or other tangible or intangible property owned, licensed or otherwise controlled by
Company or any Affiliate or any Business Client and the Intellectual Property Rights thereto, which is of tangible or intangible
value to Company or any Affiliate or any Business Client and is not public information or is not generally known or
available to the competitors of either Company or any Affiliate or of an Business Client, but is known only to Company or any Affiliate
or any Business Client or any [Consultant][Employee], independent contractor or agent thereof to whom such information must be
confided in order to apply it to the uses intended.

 

“Developments” shall
mean any ideas, compositions, concepts, inventions, modifications, discoveries, designs, developments, improvements, processes,
specifications, drawings, work of authorships, algorithms, documentations, formulae, data, techniques, know-how, source codes and
object codes and other computer codes and software programs and related documentation, technologies, research and other Intellectual
Property any and all Intellectual Property Rights therein or thereto (whether or not patentable or registerable under copyright,
trademark or similar statutes or subject to analogous protection); provided, however, that in no event shall the
term “Developments” include the Excluded Property.

 

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

 

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“Intellectual Property”
shall mean all of the following in any jurisdiction throughout the world: (a) all Developments (whether patentable or unpatentable
and whether or not reduced to practice) and all improvements thereto, and all patents, patent applications, and patent disclosures,
together with all reissuances, continuations, continuations-in-part, revisions, extensions, and reexaminations thereof; (b) all
trademarks, service marks, trade dress, logos, slogans, trade names, corporate names, Internet domain names, and rights in telephone
numbers, together with all translations, adaptations, derivations, and combinations thereof and including all goodwill associated
therewith, and all applications, registrations, and renewals in connection therewith; (c) all copyrightable works, all copyrights,
and all applications, registrations, and renewals in connection therewith; (d) all mask works and all applications, registrations,
and renewals in connection therewith; (e) Work Product and Moral Rights; (f) all business plans, methods, practices, concepts and
opportunities, whether actual or prospective; business and financial information and records, including, without limitation, accounting
records, tax returns, financial statements, projections, forecasts or other budgets, other financial data or plans, business plans
and strategies; advertising and promotional materials, products and product plans, pricing or other strategies, whether implemented
or not; (g) Health Information (as defined in Health Insurance Portability and Accountability Act of 1996 (“HIPAA”));
(h) the identity of any and all Business Partners and the compilation of any identifying information relating thereto (e.g.,
contact lists); actual or prospective Business Partner-related information, whether received from or otherwise pertaining to such
Business Partners; (i) computer or data-base files; passwords or other access codes; software programs, language, algorithms codes;
reports; analyses; notes; interpretations; formulae, processes, technology, inventions, patents; (j) the terms of this Agreement
and any other agreement between the Parties; and (k) the Intellectual Property Rights to any and all of the foregoing and all copies
and tangible embodiments thereof (in whatever form or medium).

 

“Intellectual Property Rights”
shall mean any and all rights in and to Intellectual Property, including, without limitation, patent rights, copyrights, sui
generis rights, trade secrets, mask work rights and other such rights, throughout the world.

 

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

 

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

 

“Restricted Business”
shall mean, directly or indirectly, ________________________________.

 

“Term” shall mean that
period (a) commencing with the earlier of the (i) Effective Date or (ii) the date on which the [[Consulting][Employment] Relationship][Employment
Relationship] first commenced and (b) the ending with the Termination Date.

 

“Termination Date” shall
mean the date that coincides with the day on which services are last performed by [Consultant][Employee] for or on behalf of Company
or any Affiliate under the [[Consulting][Employment] Relationship][Employment Relationship].

 

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

 

“Work Product” shall
mean any and all Developments (and all Intellectual Property Rights with respect thereto), whether or not patentable or registerable
under copyright or similar statutes, that were or are developed, made, conceived or reduced to practice or learned by [Consultant][Employee],
either alone or jointly with others, during the Term or within twelve (12) months following the Termination Date and any and all
of [Consultant][Employee]’s][Employee’s] right, title, and interest, if any, therein or thereto.

 

    	32

    	 	

    
 

SCHEDULE 1

TO

BUSINESS PROTECTION AGREEMENT

 

 

Listing of Excluded Property

 

 

None.

 

 

    	33

    	 	

    
 

EXHIBIT “B”

 

ROYALTY PAYMENTS

 

Running Royalty:

 

VIASPACE shall pay VGE for and during the
Term a royalty of eight percent (8%) on Net Sales (the “Running Royalty”) made in the VIASPACE 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.

 

Conditions for Conditional Renewal Terms.

 

The First Renewal Term:
As a condition to the right to renew the Initial Term, for years three and four following the Effective Date (the “First
Renewal Term”), VIASPACE shall have achieved during the Initial Term the following milestones as a condition to any such
renewal:

 

		·	One or more fully-executed, third party
sales contracts for the sale of Giant King Grass shall have been entered into during the Initial Term, pursuant to which VIASPACE
is to be paid the aggregate amount of at least $200,000 within that 24 consecutive monthly period following the signing (the “Initial
Sales Milestone”); and
	 	 	 

		·	Two or more, third party growing locations
of at least 10 hectares in total shall have been obtained and planted during the Initial Term, which shall be subject to the reasonable
satisfaction of VGE.

 

The Second Renewal Term:
As a condition to the right to renew the First Renewal Term (for years five and six) of the License, VIASPACE shall have achieved
during the First Renewal Term the following milestones as a condition to any such renewal:

 

		·	A total of least three or more (including
the above) fully-executed, third party sales contracts for the sale of Giant King Grass shall have been entered into during the
First Renewal Term, pursuant to which VIASPACE is to be paid the aggregate amount of $400,000, with not less than $100,000 of the
Initial Sales Milestone having been paid during the First Renewal Term and with the remaining unpaid balance of the Initial Sales
Milestone being paid within six months of the Second Renewal Term (e.g., in the fifth year) and the Second Sales Milestone being
paid in full within that 24 consecutive monthly period following the signing of any such third contract; and
	 	 	 

		·	A total of at least three or more (including
the two above) growing locations of at least 30 hectares in total shall have been obtained and planted during the Second Renewal
Term, which shall be subject to the reasonable satisfaction of VGE.

 

 

 

    	34

    	 	

    
 

Third Renewal Term: As
a condition to the right to renew the Second Renewal Term (for years seven and eight) of the License (the “Third Renewal
Term”), VIASPACE shall have achieved during the Second Renewal Term the following milestones as a condition to any such renewal:

 

		·	A total of least four or more (including
the above) fully-executed third party sales contracts for the sale of Giant King Grass shall have been entered into, pursuant to
which VIASPACE is to be paid the aggregate amount of $1,000,000, with not less than $500,000 having been paid prior to renewal;
	 	 	 

		·	A total of at least four or more (including
the above) growing locations of at least 40 hectares in total shall have been obtained and planted, which shall be subject to the
reasonable satisfaction of VGE.

 

Fourth Renewal Term:
As a condition to the right to renew the Third Renewal Term (for years nine and 10) of the License (the “Fourth Renewal
Term”), VIASPACE shall have achieved during the Third Renewal Term the following milestones as a condition to any such renewal:

 

		·	A total of least five or more (including
the above) fully-executed third party sales contracts for the sale of Giant King Grass shall have been entered into, pursuant to
which VIASPACE is to be paid the aggregate amount of $1,500,000, with not less than $750,000 having been paid prior to renewal;
and
	 	 	 

		·	A total of at least five or more (including
the above) growing locations of at least 50 hectares in total shall have been obtained and planted, which shall be subject to the
reasonable satisfaction of VGE

 

 

    	35

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