Exhibit 10.2
SHAREHOLDERS
AGREEMENT
THIS SHAREHOLDERS AGREEMENT (this
“Agreement”) is made and entered into as of
October 21, 2008 by and among VIASPACE Green Energy Inc., a
British Virgin Islands international business company (the
“Company”), VIASPACE, Inc., a Nevada corporation
(“VIASPACE”), and Sung Hsien Chang, an individual
(“Chang”) (each of VIASPACE and Chang shall be referred
to as a “Shareholder”)
RECITALS
WHEREAS, the Shareholders hold or
will hold all Company securities in connection with that certain
Securities Purchase Agreement dated as of this date pursuant to
which Chang will exchange all of the equity securities of IPA BVI
and IPA China in exchange for shares of Company common stock
(“ Securities Purchase Agreement ”);
WHEREAS, the Shareholders wish to
define certain rights among the parties as set forth herein.
AGREEMENT
In consideration of the mutual
covenants and agreements contained herein, and for other valuable
consideration, the adequacy and receipt of which are hereby
acknowledged, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the
following capitalized terms have the meanings indicated below.
“Affiliate” of a Person
means any other Person who, directly or indirectly, controls, is
controlled by, or is under common control with such Person, and for
this purpose, “control” means beneficial ownership of
50% equity interest or greater.
“ Board ” shall
mean the Board of Directors of the Company.
“Business Day” means each
day that is not a Saturday, Sunday, or other day on which banks are
required or permitted by law to be closed in Hong Kong or
California.
“First Closing” has the
meaning given in the Purchase Agreement.
“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.
“Permitted Transferee”
means (a) with respect to a Shareholder who is an individual,
(i) such Shareholder’s spouse or issue, (ii) a
corporation, partnership, or trust, the beneficiaries of which
include, or which is controlled by, only such Shareholder, such
Shareholder’s spouse, or such Shareholder’s issue, and
(iii) in the event of such Shareholder’s death, such
Shareholder’s heirs and legatees, (b) with respect to a
Shareholder that is not an individual, any Affiliate of such
Shareholder and (c) a purchaser of Company common stock from
VIASPACE, the net proceeds of which shall be used to pay Chang up
to $4.8 million at the Second Closing and which shall not be
subject to Article III.
“Person” means any
individual, sole proprietorship, partnership, joint venture,
limited liability company, trust, incorporated organization,
association, corporation, institution, public benefit corporation,
entity, or government (whether federal, state, county, city, or
otherwise, including without limitation any instrumentality,
division, agency, body, or department thereof).
“Permitted Issuance”
means issuances of up to 14 million shares of Company common
stock issued pursuant to exercises of outstanding stock options
approved by the Board and sales of up to $4.8 million in Company
equity securities to third party purchasers.
“Purchase Agreement”
means the Securities Purchase Agreement date as of October 21,
2008, by and among the Company, VIASPACE and Chang.
“Second Closing” has the
meaning given in the Purchase Agreement.
“Shares” means the
ordinary shares of the Company held by a Shareholder.
“Subsidiaries” means IPA
BVI and IPA China.
“Transfer” means a
transfer, sale, assignment, pledge, hypothecation, gift, creation
of a security interest in or lien on, placement in trust (voting or
otherwise), assignment, or any other encumbrance or disposition of,
directly or indirectly, voluntarily or involuntarily, any
Shares.
“Transferee” means any
Person (including a Permitted Transferee) who acquires Shares by
means of a Transfer in accordance with this Agreement.
ARTICLE II
GOVERNANCE OF THE
COMPANY AND THE SUBSIDIARIES
2.1 Directors . The number of
directors constituting the board of directors of the Company and
each Subsidiary shall be three (3). Except as otherwise provided
herein, each director shall serve until the earlier of his death,
resignation or removal. Any director may resign at any time upon
written notice to the Company. For each of the Company and
Subsidiaries, VIASPACE has the right to designate and appoint two
(2) directors (the “VIASPACE Directors”) and Chang
has the right to designate and appoint one (1) director (the
“Chang Director”). Each Shareholder has the right to
remove and replace any directors appointed by it at any time. Such
designation, appointment, removal or replacement shall be effective
as among the Shareholders upon receipt of written notice to such
effect from the Shareholder making such designation, appointment,
removal or replacement. The initial VIASPACE Directors shall be
Carl Kukkonen and A.J. Abdallat. The initial Chang Director shall
be Sung Hsien Chang.
Each Shareholder shall vote his or
its Securities at any regular or special meeting of shareholders of
the Company or Subsidiaries or in any written consent executed in
lieu of such a meeting of shareholders and shall take all other
actions (including using his or its best efforts to cause the Board
of Directors of the Company to take all actions) necessary to give
effect to the agreements contained in this Shareholders Agreement
(including, without limitation, the election of the Designees) and
to ensure that the charter of the Company and any Subsidiary as in
effect at any time hereafter do not conflict in any respect with
the provisions of this Shareholders Agreement. In order to
effectuate the provisions of this Article 2 , each
Shareholder hereby agrees that when any action or vote is required
to be taken by such Shareholder pursuant to this Shareholders
Agreement, such Shareholder shall use his or its best efforts to
call, or cause the appropriate officers and directors of the
Company to call, a special or annual meeting of shareholders of the
Company, as the case may be, or execute or cause to be executed a
consent in writing in lieu of any such meetings pursuant to
applicable corporate law, as amended from time to time, or any
successor statutes. The Company will pay all reasonable
out-of-pocket expenses incurred by the directors in connection with
their participation in meetings of the Board.
2.2 Vacancies . In the event
of a vacancy on any board of directors, each Shareholder agrees to
vote in favor of an individual designated in writing by
(a) VIASPACE if the vacant position on the board of directors
had been held by a VIASPACE Director or (b) Chang, if the
vacant position on the board of directors had been held by the
Chang Director.
2.3 Compensation . Directors
shall serve on the Board and on any of its committees, without
compensation from the Company for such service.
2.4 Company Management . Carl
Kukkonen will be the initial Chairman of the Board and Chief
Executive Officer of the Company. Stephen Muzi will be the initial
Chief Financial Officer and Secretary of the Company. Chang will be
the initial President of the Company, effective as of the Second
Closing.
2.5 Subsidiaries Management .
Carl Kukkonen will be the initial Chief Executive Officer of IPA
BVI and IPA China, effective as of the Second Closing. Stephen Muzi
will be the initial Chief Financial Officer and Secretary of IPA
BVI and IPA China, effective as of the Second Closing. Chang will
be the initial President of IPA BVI and IPA China. Maclean Wang
will be initial Managing Director of Grass Development of IPA
China.
2.6 Actions by the Board of
Directors .
(a) General . Meetings
of each board of directors shall be held at least [four] times per
year, at such places and on such dates as are agreed by the
directors. The presence of any two (2) of the directors shall
constitute a quorum for the transaction of business at a meeting of
the board of directors, provided that the Chang Director has been
duly notified (or is present and has waived due notice). The
affirmative vote of a majority of the directors present at a
meeting will constitute a decision of the board of directors;
provided, however, that decisions as to Fundamental Matters, as set
forth below, shall require the unanimous approval of Directors.
(b) Fundamental Matters
. The approval by the Board of any of the following actions (the
“Fundamental Matters”) shall be subject to the
unanimous approval of the Directors:
(i) other than Permitted
Issuances, any issuance or agreement to issue any capital stock of
the Company or the Subsidiaries or any securities or rights of any
kind convertible into or exchangeable for, any capital stock of the
Company or the Subsidiaries;
(ii) any transaction of merger,
consolidation, amalgamation, recapitalization or other form of
business combination; any joint venture; any liqu
