AMENDMENT AGREEMENT
to
8% Series "A" Convertible Preferred Stock
of TELEGEN CORPORATION
We, Silenus Limited, ("Silenus" or "Purchaser") the undersigned
subscriber to the Convertible Preferred Stock of Telegen Corporation, designated
as Series "A", and Telegen Corporation (the "Company") irrevocably agree that
the following terms will be incorporated into the Subscription Agreement dated
March 22, 1997. Except as specifically detailed below, no other terms of the
original Subscription Agreement will be altered or voided.
1. The seventh sentence of the Closing Date clause (Clause 10 of the
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Subscription Agreement) shall be replaced with the following:
For the first tranche ONLY the Purchaser will purchase
US$3,500,000.00 stated value on the closing date and of the
remaining US$1,500,000.00 stated value, US$500,000.00 stated
value on July 7, 1997 and the balance of US$1,000,000 stated
value only at such time as the Company and Silenus agree that the
stock price and trading volume for the Company's stock will
justify and support such further funding.
2. The following shall be added to the end of the Purchase Warrants
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clause (Clause 17, Special Instruction):
Notwithstanding the foregoing, the 151,351 Purchase Warrants issued
for the first closing of the first tranche ONLY will be modified
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such that the Warrant Exercise Price for each proportionate
amount of the 151,351 Purchase Warrants, as such proportion
relates to each converted portion of the Convertible Preferred
Stock originally issued in the first closing of the first
tranche, shall be adjusted to equal the respective Conversion
Prices actually used in determining the number of shares of
Common Stock which were issued on each converted portion of such
Preferred Stock. Once all of the Convertible Preferred Stock
issued in the first closing of the first tranche has been
properly submitted to the Company for conversion, the Purchaser
shall return the original Purchase Warrants issued and the
Company shall promptly reissue the Purchase Warrants at the
appropriate Warrant Exercise Prices then applicable for such
Purchase Warrants.
3. The following shall be added as an additional paragraph at the
end of the Purchase Warrants clause (Clause 17, Special Instruction):
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In addition to shares issuable upon conversion of the Preferred Stock
under the Certificate of Determination and, to the extent that at the
time of such conversion the shares of Preferred Stock are held by
Silenus, Silenus is entitled to receive additional shares of Common
Stock in relation to its conversion of shares of the Preferred Stock
issued in the first closing of the first tranche only as follows:
(i) For all conversions submitted to the Company during the period
July 19-August 18, 1997 additional shares which would result from a reduction
in the Conversion Price of Three percent (3%).
(ii) For all conversions submitted to the Company during the period
August 19 -September 19, 1997 additional shares which would result from a
reduction in the Conversion Price of Six percent (6%).
(iii) For all conversions submitted to the Company on September 20,
1997 and anytime thereafter, additional shares which would result from a
reduction in the Conversion Price of Nine percent (9%).
Once all of the Preferred Stock issued in the first closing of the first
tranche has been properly submitted to the Company for conversion, the Company
will thereupon issue all such additional shares required under this paragraph 3.
4. The terms of this Amendment Agreement shall run only to Silenus
Limited, and shall not be binding on the Company in the event of a transfer of
the subject Series "A" Convertible Preferred Stock to a third party.
IN WITNESS WHEREOF, this Amendment Agreement was duty executed on this
7th day of July, 1997.
SILENUS LIMITED
By: /s/ Xxxxxxx Xxxxxx
_______________________________________
Official Signatory of PURCHASER
Name (Printed): Xx. Xxxxxxx Xxxxxx
___________________________
President
__________________________________________
Place of Execution: Switzerland
_______________________
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TELEGEN CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
_______________________________________
Official Signatory of COMPANY
I have the full authority to bind TELEGEN CORPORATION /s/ WD (initial)
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Name (Printed): Xxxxxx X. Xxxxxxx
__________________________________
Title: Chief Operating Officer
__________________________________
Place of Execution: Redwood City, CA
__________________________________
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