Ex-10.29
Satisfaction and Release Agreement to an Individual
EXHIBIT 10.29
SATISFACTION AND RELEASE AGREEMENT
This Satisfaction and Release Agreement (the "Agreement") is made as of
July 24, 1998 among Telegen Corporation, a California corporation (the
"Company"), Telegen International Limited, a Singaporean corporation ("TIL") and
X.X. Xxxxxxxxx ("Xxxxxxxxx"), and supercedes and amends the prior Satisfaction
and Release Agreement executed by the parties in June 1998.
I. SATISFACTION AND RELEASE.
Each of TIL and Xxxxxxxxx, hereby agree that this Agreement is being
entered into in full satisfaction of any and all obligations (the "Obligations")
of the Company to either TIL or Xxxxxxxxx that exist as of the date hereof,
including but not limited to any and all expenses incurred by Xxxxxxxxx relating
to TIL. In addition, TIL and Xxxxxxxxx, respectively, on behalf of their
respective heirs, executors, officers, directors, employees, investors,
shareholders, administrators, subsidiaries, predecessor and successor
corporations, and assigns, hereby fully and forever release the Company and its
respective heirs, executors, officers, directors, employees, investors,
shareholders, administrators, subsidiaries, predecessor and successor
corporations, and assigns, of and from any claim, duty, obligation or cause of
action relating to the Obligations.
In consideration for the full satisfaction and release of the Obligations,
the Company will issue to Xxxxxxxxx a convertible promissory note (the "Note")
in the form attached hereto as EXHIBIT A in the face amount of US$225,000 which
shall be convertible on the terms specified therein into the Company's Common
Stock at US$0.38 per share. Each of TIL and Xxxxxxxxx acknowledge and agree that
the receipt by Xxxxxxxxx of the Note represents sufficient and full
consideration for the full satisfaction and release which each of them is
providing hereunder.
II. REPRESENTATIONS AND WARRANTIES.
In connection with the issuance of the Note, Xxxxxxxxx hereby represents
and warrants as follows:
1. PURCHASE ENTIRELY FOR OWN ACCOUNT. Kripalani's execution of this
Agreement confirms that the Note being acquired for investment for Kripalani's
own account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and that Xxxxxxxxx has no present intention of
selling, granting any participation in, or otherwise distributing the same. By
executing the Agreement, Xxxxxxxxx further represents that he does not presently
have any contract, undertaking, agreement, or arrangement with any person to
sell, transfer, or grant participation to such person or to any third person,
with respect to any portion of the Common Stock.
2. QUALIFIED INVESTOR. Xxxxxxxxx represents and warrants that he is an
"Accredited Investor" as that term is defined in Rule 501(a) promulgated
pursuant to the Securities Act of 1933, as amended (the "Act"). Xxxxxxxxx also
represents and warrants that he either has a pre-existing business or personal
relationship with the Company, or any of its officers, directors, or controlling
persons, or by reason of Kripalani's business or financial experience or the
business or financial experience of Kripalani's professional advisors who are
unaffiliated with and who are not compensated by the Company, directly or
indirectly could be reasonably assumed to have the capacity to evaluate the
merits and risks of an investment in the Company and to protect Kripalani's own
interests in connection with the transactions contemplated hereunder.
3. DISCLOSURE OF INFORMATION. Xxxxxxxxx understands that the Company is a
public reporting Company under the 1934 Act and that it is current in its
reporting requirements and that such reports represent all the information
Xxxxxxxxx considers necessary or appropriate for deciding whether to acquire the
Common Stock, and that in particular, Xxxxxxxxx has been furnished with and has
carefully read the Company's Annual Report on Form 10-K dated April 15, 1998
(amended on April 30, 1998), Quarterly Report on Form 10-Q dated May 15, 1998,
Current Reports on Form 8-K dated January 15, 1998, March 24, 1998 and April 7,
1998, and the Registration Statement on Form S-3, dated May 22, 1998.
4. INVESTMENT EXPERIENCE. Xxxxxxxxx is an investor in securities of
companies in the development stage and acknowledges that he is able to fend for
himself, can bear the economic risk of his investment, and has directly, or
indirectly through his agents, advisors or other persons on which he relies,
such knowledge and experience in financial or business matters that he is
capable of evaluating the merits and risks of the investment in the Note.
5. RESTRICTED SECURITIES. Xxxxxxxxx understands that the Note and the
underlying Common Stock will be characterized as "restricted securities" under
the federal securities laws inasmuch as they are being acquired from the Company
in a transaction not involving a public offering and that under such laws and
applicable regulations the Note and the underlying Common Stock issued may be
resold without registration under the Act only in certain limited circumstances.
6. FURTHER LIMITATIONS ON DISPOSITION. Without in any way limiting the
representations set forth above, Xxxxxxxxx further agrees not to make any
disposition of all or any portion of the Note or the underlying Common Stock,
unless and until:
(i) There is then in effect a Registration Statement under the
Act covering such proposed disposition and such disposition is made in
accordance with such Registration Statement; or
(ii) (a) Xxxxxxxxx shall have notified the Company of the
proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and, if
requested, (b) Xxxxxxxxx shall have furnished the Company with an opinion of
counsel, reasonably satisfactory to the Company, that such disposition will not
require registration under the Act.
7. RESPONSIBILITY FOR TAX CONSEQUENCES. Xxxxxxxxx has had an opportunity to
review the federal, state, local, and foreign tax consequences of his investment
in the Note (including any tax consequences that may result now or in the future
under recently enacted tax legislation) and has had the opportunity to consult
with his tax advisors, if any, regarding such consequences. Xxxxxxxxx
acknowledges that he is not relying on any statements or representations of the
Company or any of its agents in regard to such tax consequences and understands
that Xxxxxxxxx (and not the Company) shall be responsible for his own tax
liability that may arise as a result of this investment. Xxxxxxxxx acknowledges
that the Company has no obligation in regard to the future conduct of its
business to act or refrain from acting in any manner, regardless of the loss of
any tax benefit to Xxxxxxxxx in connection with the purchase, ownership, or sale
of the Note or the underlying Common Stock, which may result from such action or
inaction.
8. LEGENDS. It is understood that the Note and any certificate for the
underlying Common Stock and any securities issued in respect thereof or exchange
therefor may bear the following legend and any other legend which is required by
law or that the Company deems advisable:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES
UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED."
III. RESCISSION.
By mutual agreement among the parties, the previously executed Satisfaction
and Release Agreement dated June 1998 is hereby completely rescinded as is the
prior issuance of 592,000 shares of the company's Common Stock thereunder. Such
issuance is hereby deemed not to have occurred and the parties agree that the
Company's transfer agent
shall be instructed to cancel the previously issued certificate. Xxxxxxxxx
agrees to deliver said certificate to the Company's transfer agent and that, by
execution of this Agreement, Xxxxxxxxx hereby instructs the Company and its
transfer agent to undertake all actions necessary to cancel said certificate.
IV. MISCELLANEOUS.
1. AMENDMENT. Neither this Satisfaction and Release Agreement nor any
provision hereof shall be waived, modified, changed, discharged, terminated,
revoked, or canceled, except by an instrument in writing effecting the same
signed by the Company.
2. WAIVER. Failure of the Company to exercise any right or remedy under
this Satisfaction and Release Agreement or any other agreement between the
Company and each of TIL and Xxxxxxxxx, or otherwise, or delay by the Company in
exercising such right or remedy, will not operate as a waiver thereof. No waiver
by the Company will be effective unless and until it is in writing and signed by
the Company.
3. APPLICABLE LAW. This Satisfaction and Release Agreement shall be
enforced, governed, and construed in all respects in accordance with the laws of
the State of California, and shall be binding upon each of TIL and Xxxxxxxxx and
each of their heirs, estate, legal representatives, successors and assigns and
shall inure to the benefit of the Company, its successors, and assigns. Any
provision hereof that may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision hereof.
4. INTEGRATION. This Satisfaction and Release Agreement constitute the
entire agreement among the parties hereto with respect to the subject matter
hereof and may be amended only by a writing executed by all the parties hereto.
5. COUNTERPARTS. This Satisfaction and Release Agreement may be signed in
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Company, TIL and Xxxxxxxxx have signed, or have
caused this Satisfaction and Release Agreement to be signed by their respective
officers thereunto duly authorized, and this Satisfaction and Release Agreement
shall be deemed effective as of the date first above written.
TELEGEN CORPORATION TELEGEN INTERNATIONAL LIMITED
a California corporation a Singaporean corporation
By: /s/ XXXX X. XXXXXXXXX By: /s/ X. X. XXXXXXXXX
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Xxxx X. Xxxxxxxxx,
Chief Executive Officer Name: X. X. XXXXXXXXX
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Title: CEO
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X. X. XXXXXXXXX
/s/ X. X. XXXXXXXXX
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