VIASPACE Signs Binding Share Purchase Agreement to Close Acquisition by May 28, 2010
2010-04-20 08:30 ET - News Release
VIASPACE to Increase Shareholding in VGE; Short-Term Debt to be Converted to Five-Year Note; Sung Chang to Join VIASPACE Board of Directors
IRVINE, Calif., April 20 /PRNewswire-FirstCall/ -- VIASPACE Inc. (OTC Bulletin Board: VSPC), a clean energy company growing Giant King™ Grass as a low-carbon, renewable energy crop, today announced the signing of a binding Share Purchase Agreement with Mr. Sung Chang that is intended to close the pending acquisition of Inter-Pacific Arts with its Giant King Grass and framed art businesses by May 28, 2010.
VIASPACE Chief Executive Dr. Kukkonen stated: "I believe this is a significant win-win situation for both parties. I appreciate Mr. Chang's confidence in VIASPACE management. Mr. Chang has proven his strong commitment to the framed art business, and has demonstrated great initiative in developing our Giant King Grass plantation and grass processing facility in China. He and I work very well together."
Inter-Pacific Arts is a subsidiary of VIASPACE Green Energy (VGE). At closing, VIASPACE Inc. is expected to purchase a total 6,506,000 shares of VGE from Mr. Chang and VIASPACE will own 75.7% of the outstanding shares of VGE. This is an increase compared to the 5,100,000 shares or 59.3% stake in VGE owned previously by VIASPACE.
Chang will receive 241,667,000 newly issued common shares of VIASPACE Inc. and retain a 4.7% beneficial interest in VGE. In addition, VIASPACE will grant to Chang one newly issued share of preferred stock which entitles the holder to 50.1% voting control of VIASPACE, which will expire when certain conditions are met. Chang will also be appointed to VIASPACE's board of directors and have the right to designate two additional board members to the VIASPACE board, which currently has five members.
Under the Agreement, the $4.8 million note plus interest that was previously due and payable to Mr. Chang at the original second closing will be converted to a five-year secured promissory note at 6% interest with a principal balance of approximately $5.3 million.
VIASPACE will continue to manage its renewable energy and framed art operations through VGE as it has been previously. Dr. Carl Kukkonen will continue to serve as chief executive of both VIASPACE and VGE. Chief Financial Officer Stephen Muzi will remain in his current capacity for both companies, and Mr. Chang will continue as VGE president.
VIASPACE has also signed an irrevocable stock power to allow Mr. Chang the right to transfer title of VIASPACE's shares in VIASPACE Green Energy on May 28, 2010 or upon final signing of the Share Purchase Agreement. Upon closing, Mr. Chang will return VIASPACE's VGE shares and sell additional VGE shares to VIASPACE in exchange for VIASPACE common and preferred stock described above.
On or before the closing, the parties will enter into additional agreements addressing security and pledges for the promissory note, registration rights, employment agreements and other issues. These agreements have been prepared and are attached as exhibits to the Share Purchase Agreement which was filed on Form 8-K with the U.S. Securities and Exchange Commission on April 20, 2010.
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