SECURITIES PURCHASE AGREEMENT

THIS SECURITIES PURCHASE AGREEMENT (this “ Agreement ”) is entered into as of October 21, 2008, by and among, VIASPACE Inc., a Nevada corporation (“ Parent ”), VIASPACE Green Energy Inc., a British Virgin Islands international business company and a wholly-owned subsidiary of Parent (“ Acquirer ”), Sung Hsien Chang, an individual (“ Shareholder ”), and China Gate Technology Co., Ltd., a Brunei Darussalam company  (“ Licensor ”), with respect to the following facts:

WHEREAS, Shareholder is the holder of all issued and outstanding capital stock of Inter-Pacific Arts Corp., a British Virgin Islands international business company (“ IPA BVI ”), and the entire equity interest of Guangzhou Inter-Pacific Arts Corp., a Chinese wholly owned foreign enterprise registered in Guangdong province (“ IPA China ” and together with IPA BVI, “ Target ”).

WHEREAS, Target is a developer, manufacturer, exporter and distributor of copyrighted framed artworks for sale in retail stores located throughout the United States;

WHEREAS, Parent is a publicly traded company in energy and security business on the OTC Bulletin Board with the ticker symbol “VSPC”;

WHEREAS, for an aggregate purchase price of $16 million, payable in cash and Parent and Acquirer stock, Shareholder wishes to sell, and Acquirer wishes to purchase, 70% of IPA BVI’s capital stock and 70% of IPA China’s equity interest (together, the “ 70% Interest ”) at an initial closing (“ First Closing ”), and the remaining 30% of IPA BVI’s capital stock and 30% of IPA China’s equity interest (the “ 30% Interest ”) at a second closing (“ Second Closing ”);

WHEREAS, Ko-Hung “Maclean” Wang (“ Wang ”) is the principal of Licensor, Licensor has obtained exclusive rights for seedlings of fast-growing proprietary grasses from Quanzhou Keyi Husbandry Breeding and Planting Co., (“ Inventor ”), and, in anticipation of and for the consideration set forth in this Agreement, Licensor has entered into an agreement with IPA China granting IPA China all of such exclusive rights (“ Grass License ”); and

WHEREAS, Acquirer intends to register its equity securities with the Securities and Exchange Commission in connection with having its stock becoming publicly traded in the United States;

NOW, THEREFORE, in consideration of the foregoing and the following covenants, the parties hereto agree as follows:

(a)            First Closing Purchase and Sale .  Subject to the terms and conditions hereof, at the First Closing, Shareholder shall sell to Acquirer, and Acquirer shall purchase from Shareholder, the 70% Interest, in consideration for 3,500,000 shares of Acquirer’s common stock (the “ Acquirer Shares ”) and the number of shares of Parent’s common stock equivalent to US$5,600,000 (the “ Parent Shares ”), the share price of which to be calculated as the average closing price of Parent’s common stock during the 60 day period prior to and including the First Closing.

(b)            Second Closing Purchase and Sale .  Subject to the terms and conditions hereof, at the Second Closing, Shareholder shall sell to Acquirer, and Acquirer shall purchase from Shareholder, the 30% Interest, in consideration for $4.8 million (the “ Cash Payment ”) plus interest (“ Interest ”) calculated in accordance with Section 2.6.

1.2            Grass License Consideration .   Subject to the terms and conditions hereof, in consideration for the Grass License, at the First Closing Licensor shall receive the number of shares of Parent’s common stock equivalent to 4.2% of the total number of shares of Parent’s common stock issued and outstanding (including the Parent Shares) as of the First Closing (“ First Closing Licensor Shares ”), and at the Second Closing Licensor shall receive the number of shares of Parent’s common stock equivalent to 1.8% of the total number of shares of Parent’s common stock issued and outstanding as of the Second Closing (“ Second Closing Licensor Shares ”).

2.1            First Closing .  The First Closing shall held remotely by facsimile or electronic mail exchange of signed documents at 5:00 P.M. Pacific Standard Time on October 21, 2008 (the “ First Closing Date ”), or at such other time as Parent, Acquirer, Shareholder and Licensor may agree either in writing or orally.

2.2            First Closing Deliveries .  At the First Closing, subject to satisfaction or waiver of each of the First Closing conditions set forth in Sections 6 and 8, the parties shall make the following deliveries:

(a)            By Parent .  Parent shall deliver:

(b)            By Acquirer .  Acquirer shall deliver:

(c)            By Shareholder .  Shareholder shall deliver:

(d)            By Licensor .  Licensor shall deliver to Acquirer the Employment Agreement with Wang, duly executed by Wang.

2.3            Second Closing .  The Second Closing shall be held at the RP Office on the date at or before 240 days after the First Closing Date or at such date that Parent, Acquirer, Shareholder and Licensor may agree in writing (the “ Second Closing Date ”).

2.4            Second Closing Deliveries .  At the Second Closing, subject to satisfaction or waiver of each of the Second Closing conditions set forth in Sections 7 and 9, the parties shall make the following deliveries:

(a)            By Parent .  Parent shall deliver:

(b)            By Shareholder .  Shareholder shall deliver:

(c)            By Licensor .  Licensor shall deliver to IPA China an assignment to IPA China of the Grass License, duly executed by Licensor (the “ Grass Assignment ”).

2.5            Cash Shortfall .  “ Cash Shortfall ” means US$3,000,000 minus the amount of all Cash Equivalents (as defined below), calculated as of the First Closing Date.  During the 75 day period after the First Closing, Acquirer shall engage an independent auditor acceptable to Shareholder to perform an audit of the financial records of IPA BVI and IPA China in accordance with SEC rules.  During the course of the audit, the independent auditor will determine if a Cash Shortfall existed as of the date of the First Closing.  Shareholder shall fully cooperate with such audit.  The auditor’s determination shall be binding on Shareholder and Parent.

(a)           “ Cash Equivalents ” means all cash in IPA BVI’s and IPA China’s bank accounts plus all Accounts Receivable minus all Accounts Payable minus all other indebtedness for money, including without limitation, any debt owed to Shareholder or JJ International (a company owned by Shareholder).

(b)           “ Accounts Receivable ” means any and all rights of IPA BVI and IPA China to payment for goods sold, leased, licensed, assigned or otherwise disposed of and/or services rendered including accounts (as defined in the Uniform Commercial Code of the State of California), general intangibles and any and all such rights evidenced by chattel paper, instruments or documents.

(c)           “ Accounts Payable ” means, all obligations of IPA BVI and IPA China for payment of property or services (including trade payables incurred in the ordinary course of their business).

2.6            Interest .  Interest shall accrue on the Cash Payment from the date of this Agreement through the date six (6) months after the First Closing Date at an annual rate of six percent (6%) per annum, and thereafter shall accrue at an annual rate of eighteen percent (18%) per annum.

2.7            Failure to Close Second Closing .  Subject to the provisions of Section 10.2, if the parties fail to close the Second Closing within 240 days after the First Closing Date:

(a)            the receiving parties shall return to the delivering parties all documents, agreements and certificates received in accordance with Section 2.2;

(b)           any and all documents, agreements and certificates delivered in accordance with Section 2.2 shall be deemed void and of no effect; and

(c)           this Agreement shall automatically terminate and the parties shall have no obligations to one another under this Agreement except for those obligations, if any, listed in Section 10.2 or that otherwise explicitly survive the termination of this Agreement.

The representations and warranties of Shareholder and Licensor in this Agreement shall be true and correct in all material respects (if qualified by materiality) and in all respects (if not qualified by materiality) on and as of each Closing as though such representations and warranties were made on and as of such date except for changes contemplated by this Agreement and except for representations and warranties which address matters as of a particular date which shall remain true and correct as of such particular date.

Except as set forth in the Disclosure Schedule attached hereto as Exhibit C (the “ Shareholder Disclosure Schedule ”), Shareholder (and in respect of Section 3.17(e) only, Licensor) represents and warrants to Parent and Acquirer as follows:

3.1            Organization and Standing .  IPA BVI is an international business company duly organized and existing under the laws of the British Virgin Islands and is in good standing under such laws. IPA China is a wholly owned foreign entity duly organized and existing under the laws of the PRC and is in good standing under such laws.  Each Target has the requisite corporate power to own and operate its properties and assets, and to carry on its business as presently conducted and as proposed to be conducted.  A true, correct and complete copy of IPA BVI’s and IPA China’s charter documents, each as amended to date, has been delivered to Parent.  Such documents comply with the requirements of applicable law and are in full force and effect.  Each Target is duly qualified to do business and is in good standing in every jurisdiction in which it operates its business and in which the failure to so qualify would have a material adverse effect on the operations or financial condition of such Target.

3.2            Subsidiaries .

(a)   Neither Target owns or controls, directly or indirectly, any equity interest in any other corporation, partnership, trust, joint venture, association or entity.

(b)  Except as otherwise disclosed in the Shareholder Disclosure Schedule, there are no agreements, written or otherwise, that would act to restrict Shareholder’s ability to control all corporate actions that require the approval of either Target’s shareholders and there are no provisions in IPA BVI’s and IPA China’s charter documents that would act to restrict Shareholder’s ability to control all corporate actions that require the approval of IPA BVI or IPA China’s shareholders.

3.3            Corporate Power . Shareholder has all requisite authority to enter into this Agreement, the Shareholder Agreement and the Employment Agreement (collectively, the “ Transaction Documents ”) and to carry out and perform its other obligations under the terms of this Agreement.  Pertinent registration and shareholder information regarding IPA China is as follows:

3.4            Capitalization .  Immediately prior to the Closing, the capitalization of each Target will consist entirely of the following:

(a)            IPA BVI .  A total of 50,000 authorized shares of common stock, of which 50,000 shares will be issued and outstanding.  All of the outstanding shares of common stock have been duly authorized, fully paid and are nonassessable and issued in compliance with all applicable corporate and securities laws.

(b)            IPA China .  The entire equity interest of IPA China is owned by Shareholder.  Such equity interest was issued in compliance with all applicable laws.

(c)            Other Securities .  Neither Target has issued any stock options or other rights for employees, directors, or officers of, or consultants to, such Target to acquire equity securities of such Target and has not adopted any plan providing for the potential issuance of any such options or rights or agreed to issue any such options or rights.  Neither Target has any obligation (contingent or otherwise and with or without notice or lapse of time) to (i) issue any equity securities, or securities exercisable for or convertible into any equity securities, any subscription, warrant, option, convertible security or other such right or to issue or distribute to holders of any shares of its capital stock any evidences of indebtedness of such Target or (ii) purchase, redeem or otherwise acquire any shares of its capital stock or any interest therein or to pay any dividend or make any other distribution in respect thereof.  No stock plan, stock purchase, stock option or other agreement or understanding between Target and any holder of any equity securities or rights to purchase equity securities provides for acceleration or other changes in the vesting provisions or other terms of such agreement or understanding as the result of (i) termination of employment or consulting services (whether actual or constructive); (ii) any merger, consolidated sale of stock or assets, change in control or any other transaction(s) by Target; or (iii) the occurrence of any other event or combination of events.

3.5            Ownership; Liens .  Shareholder owns, beneficially and of record, good and marketable title to all the issued and outstanding equity interests of each of IPA BVI and IPA China, free and clear of all security interests, liens, adverse claims, encumbrances, equities, proxies, options or shareholders’ agreements. Shareholder does not have any options, warrants or any other instruments entitling Shareholder to exercise, purchase or convert into equity interests of Target.  Subject to PRC law, Shareholder has full right, power and authority to sell, transfer and deliver the equity interests of IPA China.  Shareholder has full right, power and authority to sell, transfer and deliver the equity interests of IPA BVI.   Shareholder will convey to Acquirer good and marketable title to the equity interests of IPA BVI and IPA China, free and clear of any security interests, liens, adverse claims, encumbrances, equities, proxies, options, shareholders agreements or other contractual restrictions.

3.6            Authorization .  All corporate action on the part of each Target and Shareholder and, with respect to each Target, their respective directors and stockholders necessary for the authorization, execution, delivery and performance of the Transaction Documents has been taken or will be taken prior to the Closing.

(a)           The Transaction Documents, when executed and delivered by Shareholder, will constitute a valid and binding obligation of Shareholder enforceable in accordance with their terms, subject to laws of general application relating to specific performance, injunctive relief or other equitable remedies.

3.7            Governmental Consents .  Other than for the transfer of the equity interests of IPA China, no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any governmental authority in the PRC, the United States or the BVI is required by either Target or Shareholder in connection with the consummation of the transactions contemplated by this Agreement, except as would not otherwise have a Material Adverse Effect on: (i) the business, condition (financial or otherwise), results of operations, shareholders’ equity, properties or prospects of either Target, (ii) the long-term debt or capital stock of either Target or (iii) the consummation of any of the other agreements, covenants or commitments of either Target contemplated by this Agreement (any such effect and any material adverse effect on the business, property, condition (financial or otherwise), results of operations or prospects is defined as “ Material Adverse Effect ”). Any such filings will be made within the time prescribed by law.  As of the Second Closing, Shareholder has obtained all government approvals  necessary to transfer Shareholder’s equity interest in IPA China to IPA BVI.

3.8            Foreign Exchange Matters .   As of the Second Closing  IPA China has completed all administrative formalities necessary in order to remit, in Untied States dollars, any dividends declared and payable upon the equity interest of IPA China without the necessity of obtaining any discretionary government authorization in the PRC.

3.9            Compliance with Laws and Other Instruments; No Conflicts .  Neither Shareholder nor either Target is in violation or default of any provisions of its charter documents, as amended to date or, to Shareholder’s knowledge, any applicable laws, regulations, judgments, decrees or orders of any governmental bodies and agencies having jurisdiction over their respective businesses or properties, other than violations of laws, regulations, judgments, decrees or orders that could not reasonably be expected to have a Material Adverse Effect.  Neither Shareholder nor any Target is in breach of or default under or, to Shareholder’s knowledge, alleged to be in breach of or default under, any material lease, license, contract, agreement, instrument or obligation to which it is a party or its properties are subject, and neither Shareholder nor any Target knows of any condition or circumstances that, currently or after notice or the lapse of time, is likely to result in a breach of, default under or loss of material benefits under any such lease, license, contract, agreement, instrument or obligation, other than breaches or defaults that could not reasonably be expected to have a Material Adverse Effect.  The execution, delivery and performance of the Transaction Documents on the part of Target, will not result in any such violation or default and will not accelerate performance, that would have a Material Adverse Effect, in any adverse respect under the terms of any agreement or instrument.

3.10            Litigation .  There is no litigation, action, suit or proceeding, or governmental inquiry or investigation, pending, or, to Shareholder’s knowledge, threatened in writing, against either Target, or their properties, nor is either Target aware of any basis for any of the foregoing.  No Target is a party or subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality.  There is no action, suit, proceeding or investigation by any Target currently pending or which either Target intends to initiate.

3.11            Financial Statements .  The unaudited consolidated balance sheet and statements of operations and cash flows as of and for the fiscal years ended December 31, 2007, and the unaudited balance sheet and statements of operations and cash flows as of the and for the three-month, six-month and nine-month periods ended March 31, 2008, June 30, 2008 and September 30, 2008, respectively, for each Target (collectively, the “ Financial Statements ”) fairly present the financial condition and operating results of Target as of the dates, and for the periods, indicated therein, subject to normal year-end audit adjustments.  Except as set forth in the Financial Statements, neither Target has any liabilities, contingent or otherwise, other than (i) liabilities incurred in the ordinary course of business subsequent to the Financial Statements and (ii) obligations under contracts and commitments incurred in the ordinary course of business and not required under US generally accepted accounting principles applied on a consistent basis throughout the relevant period (“ GAAP ”) to be reflected in the Financial Statements.

3.12            Financial Recordkeeping .  The operations of each Target have been conducted at all times in compliance with applicable financial record keeping and reporting requirements and money laundering statutes of the BVI and the PRC, as applicable and, to Shareholder’s knowledge, all other jurisdictions to which each Target is subject, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any applicable governmental agency (collectively, the “ Money Laundering Laws ”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving either Target with respect to the Money Laundering Laws is pending or, to the knowledge of Shareholder, threatened.

3.13            Absence of Certain Changes .  Since June 30, 2008, and at all times up to the Second Closing, there has not been except as would not have a Material Adverse Effect:

(a)           Any change in the assets, liabilities, financial condition or operating results of either Target from the Financial Statements, except changes in the ordinary course of business;

(b)           any damage, destruction, or loss, whether or not covered by insurance, materially and adversely affecting the assets, financial condition, properties, operating results or business of either Target;

(c)           any material change or amendment to a material contract or arrangement by which either Target, or any of their respective assets or properties are bound or subject;

(d)           any resignation or termination of any officer, key employee or group of employees of either Target;

(e)           any material change in any compensation arrangement or agreement with any employee, officer, director or stockholder of either Target;

(f)           any material disagreement with its outside accountants;

(g)           any other event or condition of any character that, either individually or cumulatively, has had a Material Adverse Effect on either Target; or

(h)           any arrangement or commitment by either Target to do any of the acts described in subsections (a) through (g) above.

3.14            Taxes .  Each Target has timely filed all tax returns which are required to be filed by it.  All filed returns are true and correct in all material respects and all taxes shown thereon to be due have been timely paid.  As of each Closing, all taxes owed by Targets have been paid.

3.15            Property and Assets .  Each Target has good and marketable title to all of its respective material properties and assets, including without limitation, the assets set forth in Section 3.14 of the Shareholder Disclosure Schedule, and good title to its respective leasehold estates, in each case subject to no mortgage, pledge, lien, security interest, lease, charge or encumbrance, other than liens resulting from taxes which have not yet become delinquent and liens and encumbrances which do not in any case materially detract from the value of the property subject thereto or materially impair the operations of either Target (as the case may be), and which have not arisen otherwise than in the ordinary course of business.  Each Target leases or holds land use rights with respect to all such properties as are necessary to the conduct of its business as presently operated by the respective party and as proposed to be operated as described to Parent and Acquirer, except as would not have a Material Adverse Effect.

3.16            Intellectual Property .  Each Target owns or possesses sufficient legal rights to all patents, trademarks, service marks, trade names, copyrights, trade secrets, information, licenses, and other proprietary rights (collectively “ Intellectual Property Rights ”) necessary for its business as now conducted and as presently proposed to be conducted, without any known infringement of the rights of others, including without limitation, all copyright and trademark rights necessary conduct its artwork business.  Neither Target is bound by or a party to any options, licenses or agreements of any kind with respect to its respective Intellectual Property Rights or any other person or entity, and there are no options, licenses, or agreements of any kind relating to such Intellectual Property Rights, other than licenses or agreements relating to use rights regarding “off the shelf” or standard products, non-exclusive licenses issued to customers in the ordinary course of business, copyright licenses in respect of artworks, the Grass License and the Grass Assignment.  Neither Target has received any communications alleging that it is infringing upon, violating or otherwise acting adversely to, or that by conducting its business as proposed it would infringe upon, violate or otherwise act adversely to, the right or claimed right of any person or entity under or with respect to any Intellectual Property Rights or licenses of third parties, nor is Target aware of any basis therefore.  Neither Target is aware of any violation by a third party of any of the Intellectual Property Rights of Target.  Neither Target is obligated or under any liability to make payments by way of royalties, fees or otherwise to any owner, licensor of, other claimant to, or party to any option, license or agreement of any kind with respect to, any Intellectual Property Rights except for commercially available software which Target licenses on standard terms, the Grass License and the Grass Assignment.  Neither Target is aware that any of its respective employees is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any judgment, decree or order of any court or administrative agency, that would interfere with their duties to such Target or that would conflict with the business of such Target as proposed to be conducted.  Each   Target is the sole owner of all intellectual property developed by such party.

3.17            Material Contracts and Obligations .  Shareholder has provided to Parent and Acquirer or their counsel, and has listed on the Shareholder Disclosure Schedule, all contracts and agreements pertaining to such Target (a) with expected receipts or expenditures in excess of $100,000, (b) involving a license or grant of rights to or from any Target involving patents, trademarks, copyrights or other proprietary information applicable to the business of such Target, (c) providing for indemnification by any Target or with respect to infringements of proprietary rights, (d) between any Target or and any officer, director or stockholder other than agreements entered into in the ordinary course of business, or (e) involving any loans or advances by any Target to any officer, director or employee which are outstanding as of the date of the Closing.  All such contracts and agreements are legally binding, valid, and in full force and effect in all material respects.  For purposes of this Section 3.16, the term “Company” shall mean the Target.  Notwithstanding the foregoing, except as set forth in the Shareholder Disclosure Schedule:

(a)           There are no agreements, understandings or proposed transactions between Company and any of its officers, directors, employees, affiliates or any affiliate thereof.

(b)           There are no agreements, understandings, instruments, contracts, proposed transactions, judgments, orders, writs or decrees to which Company is a party or to Shareholder’s knowledge by which it is bound which may involve (i) future obligations (contingent or otherwise) of, or payments to, Company in excess of $25,000 (other than obligations of, or payments to, Company arising from agreements with customers and vendors entered into in the ordinary course of business), (ii) the transfer or license of any patent, copyright, trade secret or other proprietary right to or from Company (other than licenses by Company of “off the shelf” or other standard products, and non-exclusive licenses to customers in the ordinary course of business), or (iii) indemnification by Company with respect to infringements of proprietary rights (other than indemnification obligations arising from purchase, sale or license agreements entered into in the ordinary course of business).

(c)           Except as otherwise disclosed in the Shareholder Disclosure Schedule, Company has not (i) declared or paid any dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, (ii) incurred or guaranteed any indebtedness for money borrowed or any other liabilities (other than with respect to indebtedness and other obligations incurred in the ordinary course of business or as disclosed in the Financial Statements) individually in excess of $25,000 or, in the case of indebtedness and/or liabilities individually less than $25,000, in excess of $50,000 in the aggregate, (iii) made any loans or advances to any person, other than ordinary advances for travel expenses or in connection with employment relocation, or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business.

(d)           For the purposes of subsections (b) and (c) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or entity (including persons or entities Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections.

(e)            Licensor Agreement .  Licensor has entered into an agreement (“ Licensor Agreement ”) with Inventor to purchase seedlings of three types of fast-growing, proprietary grasses developed Inventor and identified as “Giant King Grass”, “Purple King Grass” and “Elephant Grass”, for use as livestock feed and cellulose-based fuels.  The Licensor Agreement grants Licensor the exclusively right to purchase such seedlings in the United States and Canada and the exclusive right to purchase batches of over 20,000 of such seedlings in Guangdong province, PRC, provided that Licensor purchase a minimum of 1,000,000 of such seedlings each year.  Licensor also has non-exclusive rights to purchase such seedlings for use on a worldwide basis.  The term of the Licensor Agreement is at least three years.  Licensor has paid all required licensing or other fees or payments under the Licensor Agreement as of the First Closing, is not otherwise in default of the Licensor Agreement, and the Licensor Agreement is valid and enforceable in accordance with its terms.

(f)            Grass License .  Licensor has entered into the Grass License with IPA China pursuant to which Licensor has granted all its rights under the Licensor Agreement to IPA China.  IPA China has paid all required licensing or other fees or payments under the Grass License as of the First Closing, is not otherwise in default of the Grass License, and the Grass License is valid and enforceable in accordance with its terms.

(g)          Grass Assignment .  As of the Second Closing, the Grass Assignment is valid and enforceable in accordance with its terms.

3.18            Employees .  To the knowledge of Shareholder, no former or current employee, officer or consultant of a Target is in violation of any obligation to protect the Intellectual Property Rights of either Target.  Neither Target believes it is or will be necessary to utilize any inventions, trade secrets or proprietary information of any of its employees made prior to their employment by Target, except for inventions, trade secrets or proprietary information that have been assigned to Target.  Neither Target is a party to or bound by any currently effective written employment contract with any of its employees, other than those that are terminable at will, and, to the knowledge of Shareholder:  (i) no employee or consultant of Target is in violation of any term of any employment contract; (ii) the continued employment by Target and of its present employees, and the performance of their respective contracts with independent contractors, will not result in any such violation; and (iii) neither Target has received any notice alleging that any such violation has occurred, except as would not have a Material Adverse Effect.  Neither Shareholder nor any Target is aware that any officer, key employee or group of employees who intends to terminate his, her or their employment with such Target, nor does Shareholder nor any Target have a present intention to terminate the employment of any officer, key employee or group of employees.  Except as otherwise disclosed in the Shareholder Disclosure Schedule, no Target is a party to or bound by any currently effective employment contract, bonus plan, incentive plan, profit sharing plan, deferred compensation arrangement, retirement agreement or other employee compensation plan or agreement.  Except as required under PRC law in respect of IPA China employees, no employee of Target has been granted the right to continued employment by such Target to any material compensation following termination of employment with such Target.

3.19            Books and Records .  The minute books of each Target contain complete and accurate records of all meetings and other corporate actions of its shareholders and its Board of Directors and committees thereof.  The stock ledger of each Target is complete and reflects all issuances, transfers, repurchases and cancellations of shares of capital stock of such Target.

3.20            Environmental and Safety Laws .  No Target is in violation of any applicable statute, law or regulation relating to the environment or occupational health and safety, except as would not have a Material Adverse Effect, and to Shareholder’s knowledge, no material expenditures are or will be required in order to comply with any such existing statute, law or regulation.

3.21            Employment Laws .  Each Target is in compliance with all applicable labor and employment laws, rules and regulations applicable to their employees (including, without limitation, the laws of the BVI and the PRC and other laws, rules and regulations relating to discrimination in the hiring, promotion or pay of employees and any wage or hour laws), except for matters that would not, individually or in the aggregate, have a Material Adverse Effect.  Neither any Target and their respective operations are subject to any collective bargaining agreements in the United States, BVI or PRC, except as required under PRC law.  There is not presently, nor has there been, any strike, labor dispute, slowdown or stoppage pending or, to Shareholder’s knowledge, threatened against either Target.  To Shareholder’s knowledge, no union organizing activities are currently taking place concerning the employees of IPA BVI.

3.22            Permits .  Each Target has all franchises, permits, licenses, and any similar authority necessary for the conduct of its respective business as now being conducted by it, the lack of which would have a Material Adverse Effect, and will obtain, without undue burden or expense, any similar authority for the conduct of its businesses in framed art and grass as presently or planned to be conducted.  Neither Target is in default or violation in any material respect under any of such franchises, permits, licenses or other similar authority.

3.23            Obligations to Related Parties .  There are no obligations of any Target to its respective officers, directors, stockholders, or employees (or members of their immediate family) other than (a) for payment of salary for services rendered, (b) reimbursement for reasonable expenses incurred on behalf of such Target, or (c) for other standard employee benefits made generally available to all employees.  Except as disclosed in Section 3.23 of the Shareholder Disclosure Schedule, none of the officers, directors or key employees of any Target is indebted to such Target has any direct or indirect ownership interest in any firm or corporation with which such Target is affiliated or with which such Target has a business relationship, or any firm or corporation which competes directly with such Target, other than passive investments of less than 1% in publicly traded companies.  No officer, director or stockholder, or any member of their immediate families, is, directly or indirectly, interested in any material contract with such Target (other than such contracts as relate to any such person’s ownership of capital stock or other securities of such Target or as disclosed pursuant to other sections hereto).