UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

     
Date of Report (Date of Earliest Event Reported):   October 28, 2014

VIASPACE Inc.
__________________________________________
(Exact name of registrant as specified in its charter)

     
Nevada 333-110680 76-0742386
_____________________
(State or other jurisdiction
_____________
(Commission
______________
(I.R.S. Employer
of incorporation) File Number) Identification No.)
      
382 N. Lemon Ave., Ste. 364, Walnut, California   91789
_________________________________
(Address of principal executive offices)
  ___________
(Zip Code)
     
Registrant’s telephone number, including area code:   626-768-3360

Not Applicable
______________________________________________
Former name or former address, if changed since last report

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Top of the Form

Item 1.01 Entry into a Material Definitive Agreement.

Employment Agreements

The Registrant entered into Employment Agreements (the "Agreements") on October 28, 2014, with Dr. Carl Kukkonen, CEO and Mr. Stephen Muzi, CFO. The Agreements are effective for the period from October 1, 2014 through September 30, 2015. Dr. Kukkonen will be paid $169,744 annually and Mr. Muzi will be paid $63,654 annually.

The Agreements are attached hereto as Exhibits 10.1 and 10.2.


Amendment to Senior Secured Convertible Promissory Note

The Registrant entered into a Senior Secured Convertible Promissory Note (the "Agreement") with Kevin Schewe, Director, on September 28, 2012. On October 28, 2014, the Board of Directors of the Registrant voted to change the Conversion Price in the Agreement from 80% of the Average Trading Price as reported by the principal trading exchange on which the Registrant’s Common Stock is traded for the twenty (20) trading days preceding the date of the Note to 50% of the Average Trading Price as reported by the principal trading exchange on which the Registrant’s Common Stock is traded for the twenty (20) trading days preceding the date of the Note.

The Amendment to Senior Secured Convertible Promissory Note is attached hereto as Exhibit 10.3.


Loan Agreements

On October 29, 2014, Kevin Schewe, Director of the Registrant, made a $22,000 loan to the Registrant in conjunction with the Loan Agreement entered into with the Registrant on September 30, 2012. In the Loan Agreement, Schewe agreed, subject to satisfaction of certain conditions, including among other things, Schewe’s satisfaction with the use proceeds of past loans, to provide loans of up to $1,000,000 as required by the Registrant for a five-year period. The loans would be evidenced by a Secured Convertible Note. The loans accrue interest at 6% per annum and are secured by all assets of the Registrant. At Schewe's election, the notes are convertible into shares of Registrant common stock at a price equal to 50% of the average closing price of the Registrant's common stock for the 20 trading days immediately preceeding the date of the loan. Each note matures on the second anniversary of the issuance date of such note. If Schewe chooses to convert, the $22,000 loan made on October 29, 2014 would convert into 5,789,474 shares of Registrant common stock at a common stock price of $0.0038 per share.

Including the newest loan, Schewe has made cumulative loans to the Registrant totaling $547,000 since the execution of the Loan Agreement.

The Note for the loan on October 29, 2014 is attached hereto as Exhibit 10.4.

Notice of Conversion

On October 29, 2014, Kevin Schewe, Director of the Registrant, in conjunction with the Loan Agreement entered into with the Registrant on September 30, 2012, converted $22,000 of loans that he previously made to the Registrant into shares of Registrant common stock.

Schewe had made a $22,000 loan to the Registrant on October 29, 2014. The $22,000 loan owed to him converted into 5,789,474 shares of Registrant common stock at a conversion price of $0.0038 per common share.


2005 Stock Incentive Plan

On February 14, 2008, a majority of the common stockholders of the Registrant and the Board of Directors of the Registrant approved an amendment to the Registrant's 2005 Stock Incentive Plan (the "Amendment"). This Amendment revised Section 3 (a) in its entirety and was replaced by the following:

3. Stock Subject to the Plan.

(a) Subject to the provisions of Section 10, below, the maximum aggregate number of Shares which may be issued pursuant to all Awards (including Incentive Stock Options) is 99,000,000 Shares (the "Maximum Award Shares"); provided, however, that effective as of January 1, 2009 and each January 1 thereafter during the term of the Plan, the Maximum Award Shares will be modified to be equal to 10% percent of the total number of shares of Common Stock issued and outstanding as of the close of business on the immediately preceding December 31, which is the last day of the Registrant’s fiscal year; provided, further that no such modification shall occur if such calculation would result in a decrease in the Maximum Award Shares. The Shares to be issued pursuant to Awards may be authorized, but unissued, or reacquired Common Stock.

On October 28, 2014, the Board of Directors of the Registrant ratified and approved the Amendment that was previously approved by the Board of Directors on February 14, 2008.





Item 3.02 Unregistered Sales of Equity Securities.

On October 29, 2014, the Registrant issued 5,789,474 shares of Registrant common stock to Kevin Schewe, Director of the Company. The shares were issued related to the conversion by Schewe of one convertible note as discussed in detail in Item 1.01. The Registrant relied upon Section 4(2) of the Securities Act of 1933, as amended, for the offer and sale of its stock. It believed that Section 4(2) was available because the offer and sale was not a public offering of its securities and there was not general solicitation or general advertising involved in the offer or sale.





Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On October 28, 2014, the Registrant agreed to issue Ms. Angelina Galiteva, Director of the Registrant, 2,000,000 non-qualified stock options out of its existing stock option plan. The stock options will vest quarterly over two years and were issued at $0.0085 per share.

On October 28, 2014, the Registrant agreed to issue Mr. Khuram Irshad, Director of the Registrant, 2,000,000 non-qualified stock options out of its existing stock option plan. The stock options will vest quarterly over two years and were issued at $0.0085 per share.

On October 28, 2014, the Registrant agreed to issue Dr. Kevin Schewe, Director of the Registrant, 8,000,000 non-qualified stock options out of its existing stock option plan. The stock options will vest quarterly over two years and were issued at $0.0085 per share.

On October 28, 2014, the Registrant agreed to issue Dr. Carl Kukkonen, CEO and Director of the Registrant, 8,000,000 incentive stock options out of its existing stock option plan. The stock options will vest quarterly over two years and were issued at $0.0085 per share.

On October 28, 2014, the Registrant agreed to issue Mr. Stephen Muzi, CFO of the Registrant, 4,000,000 incentive stock options out of its existing stock option plan. The stock options will vest quarterly over two years and were issued at $0.0085 per share.





Item 9.01 Financial Statements and Exhibits.

(c) Exhibits

Exhibit No. Description

10.1 Kukkonen Employment Agreement dated October 28, 2014.
10.2 Muzi Employment Agreement dated October 28, 2014.
10.3 Amendment to Senior Secured Convertible Promissory Note dated October 28, 2014.
10.4 Senior Secured Convertible Promissory Note dated October 29, 2014.






Top of the Form

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

         
    VIASPACE Inc.
          
October 31, 2014   By:   Stephen J. Muzi
       
        Name: Stephen J. Muzi
        Title: Chief Financial Officer


Top of the Form

Exhibit Index


     
Exhibit No.   Description

 
10.1
  Kukkonen Employment Agreement dated October 28, 2014.
10.2
  Muzi Employment Agreement dated October 28, 2014.
10.3
  Amendment to Senior Secured Convertible Promissory Note dated October 28, 2014.
10.4
  Senior Secured Convertible Promissory Note dated October 29, 2014.

Ex. 10.1

Employment Agreement

This Employment Agreement (the “Agreement”), entered into this 28 day of October, 2014, between VIASPACE Inc., a Nevada corporation (the “Company”), and Carl Kukkonen (the “Employee”),

Witnesseth That:

Whereas, the parties hereto desire to enter into this Agreement to define and set forth the terms and conditions of the employment of the Employee by the Company;

Now, Therefore, in consideration of the mutual covenants and Agreements set forth below, it is hereby covenanted and agreed by the Company and the Employee as follows:

1. Position; Employment Period

The Company hereby employs the Employee as its Chief Executive Officer, and the Employee hereby agrees to serve in such capacity, for the period beginning October 1, 2014, and ending on September 30, 2015 (the “Employment Period”).

2. Performance of Duties

The Employee agrees that during the Employment Period he shall devote his full business time to the business affairs of the Company and shall perform his duties faithfully and efficiently subject to the direction of the Chairman of the Board of the Company; provided that the foregoing shall not limit or prevent the Employee from serving on the board of directors of charitable organizations or other business corporations not in competition with the Company. The Employee shall not be assigned duties and responsibilities that are not generally within the scope and character associated or required of other employees of similar rank and position.

3. Compensation

(a) Subject to the following provisions of this Agreement, during the Employment Period the Employee shall be compensated for his services as follows:

(b) Salary. Employee shall receive an annual salary, payable monthly, in an amount which shall initially be $169,744 per annum, subject to such increases as may from time to time be determined by the Chairman of the Board of the Company.

(c) B onus . In addition to the Base Compensation, during the Employment Term, Employee shall be entitled to such bonuses as may from time to time be determined by the Board.

(d) Benefits . Company will pay for Employee’s medical and dental insurance under the Company’s medical and dental family insurance plan. If Employee has medical and dental family plan independent of Company plan, Employee will be reimbursed for costs paid under independent plan.

(e) Vacation and Personal Leave . Employee shall be entitled to twenty (20) paid time off days for each twelve (12) consecutive calendar monthly period during the Employment Period, to be taken in accordance with the vacation accrual schedule, if any, and carried over only to the extent set forth or otherwise permitted in Company’s personnel policies or employee handbook.

(f) Reimbursement of Company Business Expenses . Company shall within thirty (30) days of its receipt from Employee of supporting receipts, to the extent required by applicable income tax regulations and Company’s reimbursement policies, reimburse Employee for all out-of-pocket business expenses reasonably and actually incurred by Employee in connection with his employment hereunder including Employee’s cell phone and internet charges. Board approval shall be required for any single expense exceeding $10,000 or for expenses exceeding in the aggregate annually $120,000. Reimbursement of any and all Business Expenses is conditioned on Employee submitting his request to Company for reimbursement and supporting substantiation within ninety (90) days of the date on which any such expenses shall have been incurred.

4. Disability

Subject to the provisions of paragraph 8, if the Employee’s employment is terminated during the Employment Period by reason of his Disability (as defined below), the Employee shall continue to receive an annual salary and benefits in accordance with paragraphs 3(a) and 3(b) through the end of the full calendar month of such disability but not in any event beyond the end of the Employment Period.

For purposes of this Agreement the term “Disability” means a physical or mental disability which renders the Employee incapable of performing his duties under this Agreement and which disability has existed for at least one month, as determined by an independent physician selected by the Company and agreed to by the Employee. Any salary payments to the Employee shall be reduced by the amount of any benefits paid for the same period of time under the Company’s disability insurance programs.

5 . Competing Businesses

During the period of his employment under this Agreement, the Employee shall not be employed by or otherwise engage in or be interested in any business in competition with the Company, or with any of its subsidiaries or affiliates.

6. Confidentiality

During and after the Employment Period, the Employee will not divulge or appropriate to his own use or to the use of others, in competition with the Company, any secret or confidential information or knowledge pertaining to the business of the Company, or of any of its subsidiaries, obtained by him in any way while he was employed by the Company or by any of its subsidiaries.

7. Remedies

If at any time the Employee violates to a material extent any of the covenants or Agreements set forth in paragraphs 5 and 6, the Company shall have the right to terminate all of its obligations to make further payments under this Agreement. The Employee acknowledges that the Company would be irreparably injured by a violation of paragraph 5 or 6 and agrees that the Company shall be entitled to an injunction restraining the Employee from any actual or threatened breach of paragraph 5 or 6 or to any other appropriate equitable remedy without any bond or other security being required.

8. Amendment and Termination

This Agreement may be amended or cancelled by mutual Agreement of the parties without the consent of any other person and, so long as the Employee lives, no person, other than the parties hereto, shall have any rights under or interest in this Agreement or the subject matter hereof The Employment Period shall terminate as of the earliest of:

    September 30, 2015;

    The last day of the month in which the date of the Employee’s death occurs; or the date on which the Company gives notice to the Employee if such termination is for Cause or Disability.

    For purposes of this Agreement, “Cause” means the Employee’s gross misconduct resulting in material damage to the Company or willful and material breach of this Agreement.

9. Notices

Any notice required or permitted to be given under this Agreement shall be sufficient if in writing and if sent by registered mail to the Company at its principal Employee offices or to the Employee at the last address filed by him in writing with the Company, as the case may be.

10. Non-Assignment

The interests of the Employee under this Agreement are not subject to the claims of his creditors and may not be voluntarily or involuntarily assigned, alienated or encumbered.

11. Successors

This Agreement shall be binding upon, and inure to the benefit of, the Company and its successors and assigns and upon any person acquiring, whether by merger, consolidation, purchase of assets or otherwise, all or substantially all of the Company’s assets and business.

12. Applicable Law

The provisions of this Agreement shall be construed in accordance with the laws of the State of California.

13. Counterparts

The Agreement may be executed in two or more counterparts, any one of which shall be deemed the original without reference to the others.

IN WITNESS WHEREOF, the Employee has hereunto set his hand, and the Company has caused these presents to be executed in its name and on its behalf, all as of the day and year first above written.

/S/ CARL KUKKONEN

Carl Kukkonen

VIASPACE Inc.

By: /S/ KEVIN SCHEWE
Kevin Schewe, Director

Ex. 10.2

Employment Agreement

This Employment Agreement (the “Agreement”), entered into this 28 day of October, 2014, between VIASPACE Inc., a Nevada corporation (the “Company”), and Stephen Muzi (the “Employee”),

Witnesseth That:

Whereas, the parties hereto desire to enter into this Agreement to define and set forth the terms and conditions of the employment of the Employee by the Company;

Now, Therefore, in consideration of the mutual covenants and Agreements set forth below, it is hereby covenanted and agreed by the Company and the Employee as follows:

1. Position; Employment Period

The Company hereby employs the Employee as its Chief Financial Officer, Treasurer and Secretary, and the Employee hereby agrees to serve in such capacity, for the period beginning October 1, 2014, and ending on September 30, 2015 (the “Employment Period”).

2. Performance of Duties

The Employee agrees that during the Employment Period he shall devote his full business time to the business affairs of the Company and shall perform his duties faithfully and efficiently subject to the direction of the Chairman of the Board of the Company; provided that the foregoing shall not limit or prevent the Employee from serving on the board of directors of charitable organizations or other business corporations not in competition with the Company. The Employee shall not be assigned duties and responsibilities that are not generally within the scope and character associated or required of other employees of similar rank and position.

3. Compensation

(a) Subject to the following provisions of this Agreement, during the Employment Period the Employee shall be compensated for his services as follows:

(b) Salary. Employee shall receive an annual salary, payable monthly, in an amount which shall initially be $63,654 per annum, subject to such increases as may from time to time be determined by the Chairman of the Board of the Company.

(c) B onus . In addition to the Base Compensation, during the Employment Term, Employee shall be entitled to such bonuses as may from time to time be determined by the Board.

(d) Benefits . Company will pay for Employee’s medical and dental insurance under the Company’s medical and dental family insurance plan. If Employee has medical and dental family plan independent of Company plan, Employee will be reimbursed for costs paid under independent plan.

(e) Vacation and Personal Leave . Employee shall be entitled to ten (10) paid time off days for each twelve (12) consecutive calendar monthly period during the Employment Period, to be taken in accordance with the vacation accrual schedule, if any, and carried over only to the extent set forth or otherwise permitted in Company’s personnel policies or employee handbook.

(f) Reimbursement of Company Business Expenses . Company shall within thirty (30) days of its receipt from Employee of supporting receipts, to the extent required by applicable income tax regulations and Company’s reimbursement policies, reimburse Employee for all out-of-pocket business expenses reasonably and actually incurred by Employee in connection with his employment hereunder including Employee’s cell phone and internet charges. Board approval shall be required for any single expense exceeding $10,000 or for expenses exceeding in the aggregate annually $120,000. Reimbursement of any and all Business Expenses is conditioned on Employee submitting his request to Company for reimbursement and supporting substantiation within ninety (90) days of the date on which any such expenses shall have been incurred.

4. Disability

Subject to the provisions of paragraph 8, if the Employee’s employment is terminated during the Employment Period by reason of his Disability (as defined below), the Employee shall continue to receive an annual salary and benefits in accordance with paragraphs 3(a) and 3(b) through the end of the full calendar month of such disability but not in any event beyond the end of the Employment Period.

For purposes of this Agreement the term “Disability” means a physical or mental disability which renders the Employee incapable of performing his duties under this Agreement and which disability has existed for at least one month, as determined by an independent physician selected by the Company and agreed to by the Employee. Any salary payments to the Employee shall be reduced by the amount of any benefits paid for the same period of time under the Company’s disability insurance programs.

5 . Competing Businesses

During the period of his employment under this Agreement, the Employee shall not be employed by or otherwise engage in or be interested in any business in competition with the Company, or with any of its subsidiaries or affiliates.

6. Confidentiality

During and after the Employment Period, the Employee will not divulge or appropriate to his own use or to the use of others, in competition with the Company, any secret or confidential information or knowledge pertaining to the business of the Company, or of any of its subsidiaries, obtained by him in any way while he was employed by the Company or by any of its subsidiaries.

7. Remedies

If at any time the Employee violates to a material extent any of the covenants or Agreements set forth in paragraphs 5 and 6, the Company shall have the right to terminate all of its obligations to make further payments under this Agreement. The Employee acknowledges that the Company would be irreparably injured by a violation of paragraph 5 or 6 and agrees that the Company shall be entitled to an injunction restraining the Employee from any actual or threatened breach of paragraph 5 or 6 or to any other appropriate equitable remedy without any bond or other security being required.

8. Amendment and Termination

This Agreement may be amended or cancelled by mutual Agreement of the parties without the consent of any other person and, so long as the Employee lives, no person, other than the parties hereto, shall have any rights under or interest in this Agreement or the subject matter hereof The Employment Period shall terminate as of the earliest of:

    September 30, 2015;

    The last day of the month in which the date of the Employee’s death occurs; or the date on which the Company gives notice to the Employee if such termination is for Cause or Disability.

    For purposes of this Agreement, “Cause” means the Employee’s gross misconduct resulting in material damage to the Company or willful and material breach of this Agreement.

9. Notices

Any notice required or permitted to be given under this Agreement shall be sufficient if in writing and if sent by registered mail to the Company at its principal Employee offices or to the Employee at the last address filed by him in writing with the Company, as the case may be.

10. Non-Assignment

The interests of the Employee under this Agreement are not subject to the claims of his creditors and may not be voluntarily or involuntarily assigned, alienated or encumbered.

11. Successors

This Agreement shall be binding upon, and inure to the benefit of, the Company and its successors and assigns and upon any person acquiring, whether by merger, consolidation, purchase of assets or otherwise, all or substantially all of the Company’s assets and business.

12. Applicable Law

The provisions of this Agreement shall be construed in accordance with the laws of the State of California.

13. Counterparts

The Agreement may be executed in two or more counterparts, any one of which shall be deemed the original without reference to the others.

IN WITNESS WHEREOF, the Employee has hereunto set his hand, and the Company has caused these presents to be executed in its name and on its behalf, all as of the day and year first above written.

/S/ STEPHEN MUZI

Stephen Muzi

VIASPACE Inc.

By: /S/ KEVIN SCHEWE
Kevin Schewe, Director

Exhibit 10.3

VIASPACE INC.
AMENDMENT TO SENIOR SECURED CONVERTIBLE PROMISSORY NOTE

The following Section 8 (b) is changed to the following:

(b)  Conversion Price . Subject to Section 8(c), the “ Conversion Price ” shall be equal to 50% of the Average Trading Price as reported by the principal trading exchange on which the Company’s Common Stock is traded for the twenty (20) trading days preceding the date of the Note.

IN WITNESS WHEREOF, Company has caused this Amendment to be issued as of the date first written above and Holder agrees to the terms and conditions of this Note.

VIASPACE INC.

By:/S/ CARL KUKKONEN
Name: Carl Kukkonen
Its: CEO

KEVIN SCHEWE

/S/ KEVIN SCHEWE

Ex. 10.4

NEITHER THE ISSUANCE AND SALE OF THIS NOTE NOR THE SECURITIES INTO WHICH THIS NOTE IS CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933 OR (B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144, RULE 144A OR OTHER EXEMPTION UNDER SAID ACT.

THE TRANSFER OF THE SECURITIES REPRESENTED HEREBY IS PROHIBITED EXCEPT IN ACCORDANCE WITH THE SECURITIES ACT OF 1933, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION.

VIASPACE INC.

SENIOR SECURED CONVERTIBLE PROMISSORY NOTE

$22,000.00 October 29, 2014

FOR VALUE RECEIVED, VIASPACE INC., a Nevada corporation (“ Company ”), promises to pay to Kevin Schewe (“ Holder ”), or its registered assigns, in lawful money of the United States of America the principal sum of TWENTY TWO THOUSAND Dollars ($22,000.00), or such other amount as shall equal the outstanding principal amount hereof, together with interest from the date of this Note on the unpaid principal balance at a rate equal to six percent (6.0%) per annum, computed on the basis of the actual number of days elapsed and a year of 365 days. Unless converted into Common Stock of Company as set forth in Section 3 and/or Section 8 below, all unpaid principal, together with any then unpaid and accrued interest, shall be due and payable on the earlier of (i) October 29, 2016 (the “ Maturity Date ”), (ii) upon prepayment of all amounts due and payable under this Note in accordance with the terms hereof, or (iii) when, upon or after the occurrence of an Event of Default (as defined below), such amounts are declared due and payable by Holder or made automatically due and payable in accordance with the terms hereof. Immediately prior to the issuance of this Note by Company, Holder acknowledges that it has delivered to Company the sum of TWENTY TWO THOUSAND Dollars ($22,000.00) reflecting the principal amount under this Note.

This Note is one of a series of notes (the “ Notes ”) having like tenor and effect (except for variations necessary to express the name of the holder, the principal amount of each of the Notes and the date on which each Note is funded) in an aggregate principal amount of up to $1,000,000 issued or to be issued by Company on or about the period from September 2012 to August 2017 (or such other period as agreed upon by the Company and the Holder) pursuant to the terms of a Loan Agreement, dated as of September 30, 2012, by and between Company and the Holder (or his designees) of the Notes (the “ Loan Agreement ”). The Notes shall rank equally without preference or priority of any kind over one another, and all payments on account of principal and interest with respect to any of the Notes shall be applied ratably and proportionately on the outstanding Notes on the basis of the principal amount of the outstanding indebtedness represented thereby.

The following is a statement of the rights of Holder and the conditions to which this Note is subject, and to which Company by issuance of this Note, and Holder by the acceptance of this Note, agree:

1.  Definitions . As used in this Note, the following capitalized terms have the following meanings:

(a) “ Common Stock ” shall mean the Company’s Common Stock, par value $0.001.

(b) “ Collateral ” has the meaning given in Section 4 hereof.

(c) “ Company ” includes the corporation initially executing this Note and any Person which shall succeed to or assume the obligations of Company under this Note.

(d) “ Conversion Notice ” has the meaning given in Section 8(e) hereof.

(e) “ Conversion Period ” shall mean the period from the date of the Note and ending on the Maturity Date.

(f) “ Conversion Price ” has the meaning given in Section 8(b) hereof

(g) “ Event of Default ” has the meaning given in Section 6 hereof.

(h) “ Holder ” shall mean the Person specified in the introductory paragraph of this Note or any Person who shall at the time be the registered holder of this Note. “ Holders ” shall mean the Persons collectively specified in the introductory paragraph of this Note and the other Notes or any Persons who shall at the time be the registered holders of this Note and the other Notes.

(i) “ Majority Holders ” shall mean Holders holding a majority of the aggregate principal amount of the Notes then outstanding.

(j) “ Note ” shall mean this Senior Secured Convertible Promissory Note.

(k) “ Obligations ” shall mean and include all loans, advances, debts, liabilities and obligations owed by Company to Holder of every kind and description, now existing or hereafter arising under or pursuant to the terms of this Note including, all interest, fees, charges, expenses, attorneys’ fees and costs and accountants’ fees and costs chargeable to and payable by Company hereunder.

(l) “ Person ” shall mean and include an individual, a partnership, a corporation (including a business trust), a joint stock company, a limited liability company, an unincorporated association, a joint venture or other entity or a governmental authority.

(m) “ Prepayment Amount ” has the meaning given in Section 3 hereof

(n) “ Prepayment Notice ” has the meaning given in Section 3 hereof.

(o) “ Sale Transaction ” shall mean a transaction or series of related transactions involving (i) the consolidation or merger of Company with another Person, (ii) a sale of all or substantially all of the assets of Company, (iii) a purchase, tender or exchange offer that is accepted by the holders of more than the 50% of the outstanding shares of capital stock of Company, (iv) the consummation of a stock purchase agreement or other business combination with another Person whereby such other Person acquires more than the 50% of the outstanding capital stock of Company.

(p) “ Securities Act ” has the meaning given in Section 5(b) hereof.

(q) “ Loan Agreement ” has the meaning in the second introductory paragraph of this Note.

(r) “ Successor Entity ” has the meaning given in Section 10 hereof.

Capitalized term not otherwise defined shall have the meaning set forth in the Loan Agreement.

2.  Interest . Unless converted into Common Stock of Company as set forth in Section 8 below, or unless prepaid or converted as set forth in Section 3 below, accrued interest on this Note shall be payable on the Maturity Date.

3.  Prepayment . During the Conversion Period, Company may, at any time and from time to time, prepay all or any portion of the principal due under this Note, together with accrued interest, without penalty. Company shall effect such prepayment by providing Holder twenty (20) days written notice prior to the date of such prepayment (such notice, a “ Prepayment Notice ”) indicating the amount of principal and accrued interest Company desires to prepay (the “ Prepayment Amount ”). Notwithstanding the foregoing, Holder shall have 10 days following receipt of such Prepayment Notice to notify Company in writing of its election to convert the Prepayment Amount into shares of Common Stock, in which case such Prepayment Amount shall be converted into shares of Common Stock in accordance with the conversion procedures set forth in Section 8(e) hereof (provided that, with respect to conversions effected pursuant to this Section 3, any references to the Conversion Amount in Section 8(e) shall refer to the Prepayment Amount). Should Holder elect to convert the Prepayment Amount into shares of Common Stock, the number of shares of Common Stock into which such Prepayment Amount will be converted shall be determined by dividing the Prepayment Amount by the then applicable Conversion Price.

4.  Security Interest . As security for the payment and performance of the Obligations under this Note and the other Notes, Company hereby grants to the holder of this Note and of the other Notes a first lien security interest in all of Company’s right, title and interest in, to and under all of its personal property, wherever located and whether now existing or owned or hereafter acquired or arising, including all accounts, chattel paper, commercial tort claims, deposit accounts, documents, equipment (including all fixtures), general intangibles, intellectual property (including all patents and patent applications, all copyrights and applications for copyright, all state (including common law), federal and foreign trademarks, service marks and trade names, and applications for registration of such trademarks, service marks and trade names, and all trade secrets), instruments, inventory, investment property, letter-of-credit rights, money and all products, proceeds and supporting obligations of any and all of the foregoing (collectively, the “ Collateral ”). Notwithstanding the foregoing, the security interest granted herein shall not extend to any property, rights or licenses to the extent the granting of a security interest therein would be contrary to applicable law.

5.  Representations and Warranties of Holder . Holder represents and warrants to Company as follows:

(a)  Binding Obligation . Holder has full legal capacity, power and authority to execute and deliver this Note and to perform his obligations hereunder. This Note is a valid and binding obligation of Holder, enforceable in accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general application relating to or affecting the enforcement of creditors’ rights generally and general principles of equity.

(b)  Securities Law Compliance . Holder has been advised that this Note has not been registered under the Securities Act of 1933, as amended (the “ Securities Act ”), or any state securities laws and, therefore, cannot be resold unless they are registered under the Securities Act and applicable state securities laws or unless an exemption from such registration requirements is available. Holder is aware that Company is under no obligation to effect any such registration with respect to this Note, or the Common Stock issuable or issued pursuant to the conversion of this Note, or to file for or comply with any exemption from registration. Holder has not been formed solely for the purpose of making this investment and is purchasing this Note for its own account for investment, not as a nominee or agent, and not with a view to, or for resale in connection with, the distribution thereof. Holder has such knowledge and experience in financial and business matters that Holder is capable of evaluating the merits and risks of such investment, is able to incur a complete loss of such investment and is able to bear the economic risk of such investment for an indefinite period of time.

(c)  Accredited Investor . Holder is an “accredited investor” within the meaning of SEC Rule 501 of Regulation D of the Securities Act, as presently in effect.

(d)  Restricted Securities . Holder understands that this Note is a “restricted security” under the federal securities laws inasmuch as it is being acquired from Company in a transaction not involving a public offering and that under such laws and applicable regulations such Note may be resold without registration under the Securities Act only in certain limited circumstances. In the absence of an effective registration statement covering the Note or an available exemption from registration under the Securities Act, the Note must be held indefinitely. Holder represents that it is familiar with SEC Rule 144, and understands the resale limitations imposed thereby and by the Securities Act.

(e)  Access to Information . Holder acknowledges that Company has given Holder access to the corporate records and accounts of Company and to all information in its possession relating to Company, has made its officers and representatives available for interview by Holder, and has furnished Holder with all documents and other information required for Holder to make an informed decision with respect to the purchase of this Note.

6.  Events of Default . The occurrence of any of the following shall constitute an “ Event of Default ” under this Note:

(a)  Failure to Pay . Company shall fail to pay (i) when due any principal or interest payment on the due date hereunder or (ii) any other payment required under the terms of this Note on the date due, and (in either case) such payment shall not have been made within twenty (20) days of Company’s receipt of Holder’s written notice to Company of such failure to pay;

(b)  Failure to Perform . Company fails to perform any obligation under this Note and does not cure that failure within twenty (20) days of Company’s receipt of Holder’s written notice to Company of such failure to perform; or

(c)  Voluntary Bankruptcy or Insolvency Proceedings . Company shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or a substantial part of its property, (ii) be unable, or admit in writing its inability, to pay its debts generally as they mature, (iii) make a general assignment for the benefit of its or any of its creditors, (iv) be dissolved or liquidated, (v) become insolvent (as such term may be defined or interpreted under any applicable statute), (vi) commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or consent to any such relief or to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenced against it, or (vii) take any action for the purpose of effecting any of the foregoing; or

(d)  Involuntary Bankruptcy or Insolvency Proceedings . Proceedings for the appointment of a receiver, trustee, liquidator or custodian of Company or of all or a substantial part of the property thereof, or an involuntary case or other proceedings seeking liquidation, reorganization or other relief with respect to Company or the debts thereof under any bankruptcy, insolvency or other similar law now or hereafter in effect shall be commenced and an order for relief entered or such proceeding shall not be dismissed or discharged within thirty (30) days of commencement.

7.  Rights of Holder upon Default . Upon the occurrence or existence of any Event of Default (other than an Event of Default referred to in Sections 6(c) and 6(d)) and at any time thereafter during the continuance of such Event of Default, the Majority Holders may, by written notice to Company, declare all outstanding Obligations payable by Company under the Notes to be immediately due and payable without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived. Upon the occurrence or existence of any Event of Default described in Sections 6(c) and 6(d), immediately and without notice, all outstanding Obligations payable by Company under the Notes shall automatically become immediately due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived. In addition to the foregoing remedies, upon the occurrence or existence of any Event of Default, Holder may exercise any other right power or remedy permitted to him by law, either by suit in equity or by action at law, or both.

8.  Conversion .

(a)  Conversion . Holder shall have the right to convert, at any time during the Conversion Period, all or any portion of the principal amount, together with any unpaid and accrued interest, then outstanding under this Note into fully paid and non-assessable shares of Common Stock at a conversion price per share equal to the Conversion Price (as defined below). The number of shares of Common Stock into which such principal and interest then outstanding under this Note will be converted shall be determined by dividing the amount of principal, together with all unpaid and accrued interest, then outstanding under this Note to be converted (the “ Conversion Amount ”) by the Conversion Price.

(b)  Conversion Price . Subject to Section 8(c), the “ Conversion Price ” shall be equal to 50% of the Average Trading Price as reported by the principal trading exchange on which the Company’s Common Stock is traded for the twenty (20) trading days preceding the date of the Note.

(c)  Adjustments to Conversion Price . The Conversion Price shall be subject to proportional adjustments for stock splits, stock dividends, combinations, consolidations, reclassifications and the like.

(d)  Conversion Procedure . Before Holder shall be entitled to convert the Conversion Amount then outstanding under this Note into shares of Common Stock, Holder shall surrender this Note at the office of this Company, and shall give written notice (a form of which is attached to this Note, the “ Conversion Notice ”) to Company at its principal corporate office, of the election to convert the same and shall state therein the total Conversion Amount. Company shall not be obligated to issue certificates evidencing the shares of Common Stock issuable upon such conversion unless (i) Holder executes and delivers to Company the Conversion Notice for the converted shares and (ii) this Note is delivered to Company. Company shall, as soon as practicable after such delivery, issue and deliver certificates (bearing such legends as are required by applicable state and federal securities laws in the opinion of counsel to Company and required by this Note and the Loan Agreement), representing the number of fully paid and non-assessable shares of the Common Stock into which the Conversion Amount will be converted in accordance with the provisions herein, and a new promissory note having like tenor as this Note for the principal amount and interest then outstanding under this Note that are not being so converted. Any conversion pursuant to this Section 8 shall be deemed to have been made immediately prior to the close of business on the date of Company’s receipt of the Conversion Notice, so that the rights of Holder under this Note to the extent of the Conversion Amount shall cease at such time and Holder shall be treated for all purposes as having become the record holder of such shares of Common Stock at such time.

(e)  Fractional Shares; Effect of Conversion . No fractional shares shall be issued upon conversion of this Note. In lieu of Company issuing any fractional shares to Holder upon the conversion of this Note, Company shall pay to Holder an amount equal to the product obtained by multiplying the Conversion Price by the fraction of a share not issued pursuant to the previous sentence. Upon conversion of this Note in full and the payment of the amounts specified in this Section 9(f), Company shall be forever released from all its obligations and liabilities under this Note.

(f)  Reservation of Stock Issuable Upon Conversion . Company shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock solely for the purpose of effecting the conversion of this Note such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of this Note.

9.  Reserved

10.  Effect of Sale Transaction . Upon the occurrence of any Sale Transaction, the Successor Entity (as defined below) shall succeed to, and be substituted for the Company (so that from and after the date of such Sale Transaction, the provisions of this Note referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Note with the same effect as if such Successor Entity had been named as the Company herein. Upon consummation of the Sale Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon conversion of this Note at any time after the consummation of the Sale Transaction, in lieu of the shares of the Common Stock purchasable upon the conversion of the Notes prior to such Sale Transaction, such shares of common stock (or other securities, cash, assets or other property) of the Successor Entity. The provisions of this Section shall apply similarly and equally to successive Sale Transactions and shall be applied without regard to any limitations on the conversion of this Note. As used in this Section 10, “ Successor Entity ” means the Person, which may be the Company, formed by, resulting from or surviving any Sale Transaction, or the parent entity of such Person, as applicable.

11.  Successors and Assigns . Subject to the restrictions on transfer described in Sections 12 and 13 below, the rights and obligations of Company and Holder of this Note shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the parties.

12.  Waiver and Amendment . Any term of this Note may be amended or waived only with the written consent of Company and the Majority Holders; provided, however, that any such amendment or modification which by its terms would not apply equally to all holders of the Notes shall not be applicable to any holder whose rights under the Notes would be adversely affected by such amendment or modification in a different manner than other holders thereof without such adversely affected holder’s written consent.

13.  Transfer of this Note or Securities Issuable on Conversion Hereof . With respect to any offer, sale or other disposition of this Note or securities into which such Note may be converted, Holder will give written notice to Company prior thereto, describing briefly the manner thereof, together with a written opinion of Holder’s counsel, or other evidence if reasonably satisfactory to Company, to the effect that such offer, sale or other distribution may be effected without registration or qualification (under any federal or state law then in effect). Upon receiving such written notice and reasonably satisfactory opinion, if so requested, or other evidence, Company, as promptly as practicable, shall notify Holder that Holder may sell or otherwise dispose of this Note or such securities, all in accordance with the terms of the notice delivered to Company. If a determination has been made pursuant to this Section 12 that the opinion of counsel for Holder, or other evidence, is not reasonably satisfactory to Company, Company shall so notify Holder promptly after such determination has been made. Each Note thus transferred and each certificate representing the securities thus transferred shall bear a legend as to the applicable restrictions on transferability in order to ensure compliance with the Securities Act, unless in the opinion of counsel for Company such legend is not required in order to ensure compliance with the Securities Act. Company may issue stop transfer instructions to its transfer agent in connection with such restrictions. Subject to the foregoing, transfers of this Note shall be registered upon registration books maintained for such purpose by or on behalf of Company. Prior to presentation of this Note for registration of transfer, Company shall treat the registered Holder hereof as the owner and Holder of this Note for the purpose of receiving all payments of principal and interest hereon and for all other purposes whatsoever, whether or not this Note shall be overdue and Company shall not be affected by notice to the contrary.

14.  Notices . Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one business day after deposit with an overnight courier service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be to the respective addresses or facsimile numbers of the parties as set forth in the Loan Agreement, or at such other address or facsimile number as such parties shall have furnished in writing.

15.  Usury . In the event any interest is paid on this Note which is deemed to be in excess of the then legal maximum rate, then that portion of the interest payment representing an amount in excess of the then legal maximum rate shall be deemed a payment of principal and applied against the principal of this Note.

16.  Waivers . Company hereby waives notice of default, presentment or demand for payment, protest or notice of nonpayment or dishonor and all other notices or demands relative to this instrument.

17.  Governing Law and Forum . This Note and all actions arising out of or in connection with this Note shall be governed by and construed in accordance with the laws of the State of Colorado, United States of America, without regard to the conflicts of law provisions of the State of Colorado, or of any other state. All disputes or controversies relating to or arising from this Note shall be adjudicated in the state and federal courts located in the state of Colorado. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS NOTE AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER. The Convention on Contracts for the International Sale of Goods shall not apply to this Note.

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IN WITNESS WHEREOF, Company has caused this Note to be issued as of the date first written above and Holder agrees to the terms and conditions of this Note.

VIASPACE INC.

By: /S/ CARL KUKKONEN
Name: Carl Kukkonen
Its: CEO

KEVIN SCHEWE

/S/ KEVIN SCHEWE

NOTICE OF CONVERSION

(To be executed by the Registered Holder in order to convert the Note)

The undersigned hereby elects to convert $22,000.00 of the principal and $ 0 of the interest due on the Note issued by VIASPACE Inc. on October 29, 2014 into Shares of Common Stock of VIASPACE Inc. (the “Borrower”) according to the conditions set forth in such Note, as of the date written below.

Date of Conversion:        October 29, 2014       

Conversion Price:        $0.0038       

Shares To Be Delivered:        5,789,474       

Signature:        /S/ KEVIN L. SCHEWE—

Print Name:        Kevin L. Schewe—

Address:        400 Indiana St., Suite 220, Golden, CO 80401       

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