Execution Copy
STOCK PLEDGE
AGREEMENT
THIS STOCK PLEDGE AGREEMENT
(this “Agreement” ) is dated as of
May 14, 2010, by and between VIASPACE, INC. , a Nevada
corporation (the “Pledgor” ) , and
SUNG HSIEN CHANG (the “Noteholder”
) .
W I T N E S S E T
H :
WHEREAS, pursuant to a
Secured Promissory Note, dated as of the 14th day of May, 2010 (as
the same may be amended, modified or supplemented from time to
time, the “Secured Note” ) issued by the
Pledgor in favor of the Noteholder; and
WHEREAS , the Pledgor agreed
to secure its obligations under the Secured Note in accordance with
the terms of this Agreement and the other applicable Security
Documents (as defined in the Secured Note) .
NOW, THEREFORE , in
consideration of these premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Definitions . Capitalized terms used herein but
not otherwise defined shall have the meanings ascribed to such
terms in the Secured Note.
2. Pledge and Grant of Security Interest . To
secure the prompt payment and performance in full when due, whether
by lapse of time or otherwise, of the Secured Obligations (as
defined in Section 3 hereof), Pledgor hereby pledges and
assigns to the Noteholder and grants to the Noteholder, a
continuing security interest in any and all right, title and
interest of Pledgor in and to the following, whether now owned or
existing or owned, acquired or arising hereafter (collectively, the
“Pledged Collateral” ):
(a) Pledged Shares .
All of the issued and outstanding shares of capital stock (the
“ Shares ”) of Viaspace Green Energy,
Inc. , a company organized under the laws of the British Virgin
Islands (the “ Subsidiary ”) issued to or
otherwise in which rights are held by Pledgor (all certificates
representing such shares and all options and other rights,
contractual or otherwise, with respect thereto, collectively the
“Pledged Shares” ). In no event shall
Pledgor cause, authorize, approve or permit Subsidiary to issue,
sell, convey, transfer, grant or otherwise encumber or otherwise
grant any right or other Lien in or on any of its Shares in favor
of any Person without the prior written consent of Noteholder.
(b) Additional Shares .
All of the issued and outstanding shares of capital stock held by
Pledgor of any subsidiary organized in a jurisdiction outside of
the United States and that number of issued and outstanding shares
of capital stock held by Pledgor of any subsidiary organized in a
jurisdiction inside the United States, which is hereafter formed or
acquired by Pledgor or is a successor to Pledgor, including,
without limitation, the certificates representing such shares.
(c) RESERVED
(d) Proceeds . All
proceeds and products of the foregoing (other than dividends and
interest permitted to be received, retained and used by Pledgor
pursuant to Section 7(f) hereof), however and whenever acquired and
in whatever form.
Without limiting the generality of
the foregoing, it is hereby specifically understood and agreed that
Pledgor may, with the prior written consent of the Noteholder, from
time to time hereafter deliver additional shares of stock to the
Noteholder as collateral security for the Secured Obligations. Upon
delivery to the Noteholder, such additional shares of stock shall
be deemed to be part of the Pledged Collateral and shall be subject
to the terms of this Agreement whether or not
Schedule 1 is amended to refer to such additional
shares.
3. Security for Secured Obligations . The security
interest created hereby in the Pledged Collateral constitutes
continuing collateral security for all money which Pledgor is or at
any time may become actually or contingently liable to pay to or
for the account of Noteholder for any reason whatever under the
Secured Note (collectively, the “Secured
Obligations” ).
4. Delivery of the Pledged Collateral . Pledgor
hereby agrees that:
(a) Certificates .
Pledgor shall deliver to the Noteholder (i) simultaneously
with or prior to the execution and delivery of this Agreement, all
certificates representing the Pledged Shares and (ii) promptly
upon the receipt thereof by or on behalf of Pledgor, all other
certificates and instruments constituting Pledged Collateral. Prior
to delivery to the Noteholder, all such certificates and
instruments constituting Pledged Collateral shall be held in trust
by Pledgor for the benefit of the Noteholder pursuant hereto. All
such certificates shall be delivered in suitable form for transfer
by delivery or shall be accompanied by duly executed instruments of
transfer or assignment in blank, in form provided in
Schedule 2 attached hereto.
(b) Additional
Securities . If Pledgor shall receive by virtue of its being or
having been the owner of any Pledged Collateral, any (i) stock
certificate, including without limitation, any certificate
representing a stock dividend or distribution in connection with
any increase or reduction of capital, reclassification, merger,
consolidation, sale of assets, combination of shares, stock splits,
spin-off or split-off, promissory notes or other instrument;
(ii) option or right, whether as an addition to, substitution
for, or an exchange for, any Pledged Collateral or otherwise;
(iii) dividends payable in securities; or
(iv) distributions of securities in connection with a partial
or total liquidation, dissolution or reduction of capital, capital
surplus or paid-in surplus, then Pledgor shall receive such stock
certificate, instrument, option, right or distribution in trust for
the benefit of the Noteholder, shall segregate it from
Pledgor’s other property and shall deliver it forthwith to
the Noteholder in the exact form received together with any
necessary endorsement and/or appropriate stock power duly executed
in blank substantially in the form provided in
Schedule 2 , to be held by the Noteholder as Pledged
Collateral and as further collateral security for the Secured
Obligations.
(c) Financing
Statements. Pledgor hereby authorizes the Noteholder to file
such UCC financing statements the Noteholder may reasonably deem
appropriate in order to perfect and protect the security interest
created hereby in the Pledged Collateral.
5. Representations and Warranties . Pledgor hereby
represents and warrants to the Noteholder, that so long as the
Secured Note is in effect or any amounts payable thereunder shall
remain outstanding:
(a) Authorization of
Pledged Shares . The Pledged Shares are duly authorized and
validly issued, are fully paid and nonassessable and are not
subject to the preemptive rights of any person or entity. All other
shares of stock constituting Pledged Collateral will be duly
authorized and validly issued, fully paid and nonassessable and not
subject to the preemptive rights of any person or entity. Pledgor
owns the capital stock of the corporations listed on
Schedule I attached hereto as and to the extent so described
therein.
(b) Title . Pledgor has
good and indefeasible title to the Pledged Collateral and will at
all times be the legal and beneficial owner of the Pledged
Collateral free and clear of any lien or other encumbrance, except
for any security interests in favor of Noteholder. There exists no
“adverse claim” within the meaning of
Section 8-302 of the Uniform Commercial Code as in effect in
the State of Georgia (the “UCC” ) with
respect to the Pledged Shares.
(c) Exercising of
Rights . The exercise by the Noteholder of its rights and
remedies hereunder does not violate any law or governmental
regulation or any material contractual restriction binding on or
affecting Pledgor or any of its property.
(d) Pledgor’s
Authority . No authorization, approval or action by, and no
notice or filing with any governmental authority or with the issuer
of any Pledged Stock is required either (i) for the pledge
made by Pledgor or for the granting of the security interest by
Pledgor pursuant to this Agreement; or (ii) for the exercise
by the Noteholder of its rights and remedies hereunder (except as
may be required by laws affecting the offering and sale of
securities).
(e) Security
Interest/Priority . This Agreement creates a valid security
interest in favor of the Noteholder in the Pledged Collateral. The
taking possession by the Noteholder of the certificates
representing the Pledged Shares and all other certificates and
instruments constituting Pledged Collateral will perfect and
establish the first priority of the Noteholder’s security
interest in the Pledged Shares and in all other Pledged Collateral
represented by Pledged Shares and instruments securing the Secured
Obligations. Except as set forth in this Section 5(e), no
action is necessary to perfect or otherwise protect such security
interest in the Pledged Shares and Pledged Collateral represented
by certificates.
6. Covenants . Pledgor hereby covenants that so
long as the Secured Note is in effect or any Secured Obligations
remains unpaid, Pledgor shall:
(a) Books and Records .
Mark its books and records (and shall cause the issuer of the
Pledged Shares to mark its books and records) to reflect the
security interest granted to the Noteholder pursuant to this
Agreement.
(b) Defense of Title .
Warrant and defend title to and ownership of the Pledged Collateral
at its own expense against the claims and demands of all other
parties claiming an interest therein, keep the Pledged Collateral
free from all liens and security interests, except for those in
favor of Noteholder, and not sell, exchange, transfer, assign,
lease or otherwise dispose of Pledged Collateral or any interest
therein.
(c) Further Assurances
. Promptly execute and deliver at its expense all further
instruments and documents and take all further action that may be
reasonably necessary and desirable or that the Noteholder may
reasonably request in order to (i) perfect and protect the
security interest created hereby in the Pledged Collateral;
(ii) enable the Noteholder to exercise and enforce its rights
and remedies hereunder in respect of the Pledged Collateral; and
(iii) otherwise effect the purposes of this Agreement,
including, without limitation and if requested by the Noteholder,
delivering to the Noteholder irrevocable proxies in respect of the
Pledged Collateral.
(d) Amendments . Not
make or consent to any amendment or other modification or waiver
with respect to any of the Pledged Collateral or enter into any
agreement or allow to exist any restriction with respect to any of
the Pledged Collateral other than pursuant hereto or as may be
permitted under the Secured Note.
(e) Compliance with
Securities Laws . File all reports and other information now or
hereafter required to be filed by Pledgor with the United States
Securities and Exchange Commission and any other state, federal or
foreign agency in connection with the ownership of the Pledged
Collateral.
7. Rights of the
Noteholder .
(a) Power of Attorney .
In addition to other powers of attorney contained herein, Pledgor
hereby designates and appoints the Noteholder and each of its
designees or agents as its attorney-in-fact, irrevocably and with
power of substitution, with authority to take any or all of the
following actions upon the occurrence and during the continuance of
an Event of Default:
(i) to
demand, collect, settle, compromise, adjust, give discharges and
releases relating to the Pledged Collateral, all as the Noteholder
may reasonably determine;
(ii) to
commence and prosecute any actions at any court for the purposes of
collecting any of the Pledged Collateral and enforcing any other
right in respect thereof;
(iii) to
defend, settle or compromise any action brought and, in connection
therewith, give such discharge or release relating to the Pledged
Collateral as the Noteholder may deem appropriate;
(iv) to pay
or discharge taxes, liens, security interests or other encumbrances
levied or placed on or threatened against the Pledged
Collateral;
(v) to
direct any parties liable for any payment under any of the Pledged
Collateral to make payment of any and all monies due and to become
due thereunder directly to the Noteholder or as the Noteholder
shall direct;
(vi) to
receive payment of and receipt for any and all monies, claims, and
other amounts due and to become due at any time in respect of or
arising out of any Pledged Collateral;
(vii) to
sign and endorse any drafts, assignments, proxies, stock powers,
verifications, notices and other documents relating to the Pledged
Collateral;
(viii) to
exchange any of the Pledged Collateral or other property upon any
merger, consolidation, reorganization, recapitalization or other
readjustment of the issuer thereof and in connection therewith,
deposit any of the Pledged Collateral with any depository, transfer
agent, registrar or other designated agency upon such terms as the
Noteholder may determine; and
(ix) to do
and perform all such other acts and things as the Noteholder may
reasonably deem to be necessary, proper or convenient in connection
with the Pledged Collateral.
The Pledgor recognizes and agrees that this power of attorney is
a power coupled with an interest and shall be irrevocable. The
Noteholder sha
