SHAREHOLDERS AGREEMENT

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.

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:

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.

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 liquidation, winding up or dissolution of the Company or the Subsidiaries; or any acquisition of any business or assets from, or capital stock of, any Person;