CTP Products B.V. Veendam Stolberweg 197, 9641 The Netherlands
CTP
Products B.V.
Veendam
Xxxxxxxxxx
000, 0000
Xxx
Xxxxxxxxxxx
31st
October,
2007
Telegen
Corporation
0000
Xxxxxxx Xxxxx
Xxxxx
000
Xxx
Xxxxx
XX
00000
Xxxxxx
Xxxxxx of America
Dear
Sir:
This
Letter Agreement (the “Agreement”) sets forth the terms and conditions agreed to
by and between Telegen Corporation (“Telegen”), CTP Netherlands (“CTP”) and
Multidisplay s.r.o., a subsidiary of CTP (“Multidisplay”), in connection with
the following lease agreements: (1) that certain Agreement on the Lease of
Non-Residential Premises entered into on October 31, 2007 by and between Sendio
s.r.o., a subsidiary of Telegen (“Sendio”), and Multidisplay (the “Premises
Lease”). The parties agree as follows:
1. Assignment
of Receivable to CTP.
Multidisplay has duly and irrevocably assigned to CTP all right, title and
interest in and to all amounts owing, including without limitation, for rent,
taxes, levies or other fees or payments of whatever nature (the “Receivables”)
from Sendio to Multidisplay under the Premises Lease for the period from
November 1, 2007 through June 30, 2008 in the amount of EUR 1,575,000. CTP
is
the sole owner of all rights with respect to the Receivables, and no other
person has any right or interest thereto. CTP shall not assign, sell or
otherwise transfer any right, title and interest in and to the Receivables,
or
any part thereof, or allow any other person to assert any right therein. CTP
shall protect and defend Telegen and Sendio from all demands or claims by or
liabilities to any person with respect to the Receivables.
2. Consent
of Bank.
Multidisplay has received and delivered to Telegen the written consent of Bank
IMMORENT-BANK GMBH,
an
Austrian limited liability company, having registered office at 1060 Vienna,
Xxxxxxxxxxxxx 00-00, Xxxxxxx
to the
assignment of the Receivables from Multidisplay to CTP, which consent is in
full
force and effect. A complete and correct copy of the signed consent is attached
to this Agreement as Exhibit A. Multidisplay and CTP represent and warrant
to
Telegen that no consent, approval, filing or notice is required from or with
any
other person, entity or governmental agency in connection with consummation
of
the transactions contemplated by this Agreement, and that consummation of the
transactions contemplated by this Agreement will not cause a default, breach
or
violation of or under any or agreement, instrument, document, judgment, order,
law, rule or regulation to which CTP, Multidisplay, or any of their respective
assets are bound. In addition, and without limiting the foregoing, CTP and
Multidisplay confirm that the assignment of the Receivables and the transactions
contemplated by this Agreement comply in all respects with Section 196(a) of
Act
No. 513/1991 Col., as amended, of the Czech Commercial Code.
3. Issuance
of Common Stock as Payment in Full on Receivables.
As
payment in full on the Receivables, Telegen shall issue to CTP shares of its
common stock (the “Shares”) as set forth below, subject to Section 5 below. In
no event shall Telegen be required to make any cash payments to CTP on the
Receivables.
(a) As
advance payment in full for all Receivables due under the Premises Lease for
the
period from November 1, 2007 through June 30, 2008, Telegen shall issue to
CTP
6,100,000 Shares, effective as of November 1, 2007.
(b) Upon
issuance of the 6,100,000 Shares to CTP pursuant to the terms in (a) above
of
this Agreement, the respective Receivables shall be automatically and
irrevocably deemed cancelled, being fully paid.
4. Representations
and Warranties of CTP.
In
connection with the issuance of the Shares, CTP represents and warrants to
Telegen as follows:
(a) It
has
knowledge of Telegen’s business, management, operations, financial condition and
prospects, and it has been furnished with or has had access to such information
as it requires to evaluate the merits and risks of the proposed investment
(including Telegen’s public filings available at xxx.xxx.xxx),
together with such additional information as is necessary to verify the accuracy
of the information supplied;
(b) It
is
acquiring the Shares solely for its own account, for investment and not with
a
view to resale or distribution of any part thereof, and it has no present
intention of selling, granting any participation in, or otherwise distributing
the same. It shall not have the right to assign this agreement or any rights
hereunder;
(c) It
is not
a “U.S. Person” as defined in Regulation S promulgated under the Securities Act
of 1933, as amended (the “Securities Act”), that it is not acting as a fiduciary
for a “U.S. Person,” that the acquisition of the Shares originated by CTP
outside of the United States, and that its principal place of business is in
Humpolec, Czech Republic.
(d) It
acknowledges that the Shares are considered “restricted securities” under
applicable U.S. securities laws and may not be resold in the United States
and
must be held indefinitely unless subsequently registered under the Securities
Act or unless an exemption from such registration is available. In particular,
CTP is aware of the restrictions and limitations on resale of the Shares into
the United States or to a U.S. Person pursuant to the provisions of Regulation
S.
5. Forfeiture.
In the
event that Multidisplay breaches any provision of the Premises Lease at any
time
prior to June 30, 2008 or CTP or Multidisplay breaches any of its respective
covenants, representations or warranties contained in this Agreement, CTP shall
forfeit all right, title and interest in and to all of the Shares. In addition,
in the event that Multidisplay terminates the Premises Lease at any time prior
to June 30, 2008, CTP shall forfeit all right, title and interest in and to
all
of the applicable Shares issued for such respective period, determined in
Sections 2 (a) above. Upon such breach or termination, CTP shall immediately
return all Shares to Telegen, and Telegen shall have the right to cancel such
Shares with immediate effect. To facilitate such cancellation and transfer
of
the Shares to Telegen, CTP hereby executes and delivers to Telegen the blank
stock powers, substantially in the form attached to this Agreement as
Exhibit
B.
Without
limiting the foregoing, CTP hereby irrevocably constitutes and appoints Telegen
as CTP’s attorney-in-fact and agent to execute with respect to such Shares all
documents or instrument of assignment, transfer or cancellation necessary or
appropriate to transfer and cancel on the books and records of Telegen such
Shares and complete any transaction herein contemplated. This power of attorney
granted to Telegen is a special and limited power of attorney coupled with
an
interest, is irrevocable (to the maximum extent permitted by law), shall be
binding on CTP’s successors and assigns and is limited to those matters herein
set forth. In addition, until July 1, 2008, CTP shall not, voluntarily or
involuntarily, directly or indirectly, sell, transfer, assign, pledge or
otherwise dispose of, or mortgage, pledge, hypothecate or otherwise encumber,
or
permit or suffer any encumbrance, foreclosure or attachment of, all or any
part
of the Shares, and any purported sale, transfer, assignment, pledge or
encumbrance shall be null and void and of no force or effect
whatsoever.
6. Governing
Law.
This
Agreement shall be interpreted in accordance with the laws of the State of
Washington in the United States without giving effect to its conflict of laws
principles. The substantially prevailing party in any suit or proceeding shall
be entitled to reimbursement for its reasonable costs and attorneys’ fees
incurred.
7. No
Assignment.
Neither
CTP nor Multidisplay may assign, delegate or transfer, by merger, operation
of
law or otherwise, any of its respective rights or obligations under this
Agreement without the prior written consent of Telegen.
8. Entire
Agreement.
This
Agreement represents and contains the entire understanding between the parties
in connection with the subject matter of this Agreement. The Agreement shall
not
be modified or varied except by a written instrument signed by the parties.
All
prior written or oral agreements, understanding or representations between
CTP
and Telegen with respect to the subject matter hereof are merged into and
superseded by this Agreement.
Please
acknowledge your agreement with the foregoing by signing in the space indicated
below and returning it to me.
Very
truly yours,
CTP
Products BV
By:
/s/ Xxxxx Xxxx
Name:
Title:
Multidisplay
s.r.o.
By:
/s/ Xx. xxx
Name:
Title:
ACCEPTED
and AGREED to this
31st
day of
October, 2007.
/s/
Xxxxxx Xxxx
Xxxxxx
Xxxx
Chairman,
Telegen Corporation
EXHIBIT
A to Letter Agreement
IMMORENT-BANK GMBH
CONSENT
EXHIBIT
B to Letter Agreement
ASSIGNMENT
SEPARATE FROM CERTIFICATE
FOR
VALUE
RECEIVED, the undersigned, CTP Netherlands hereby sells, assigns, and transfers
unto Telegen Corporation, a California corporation (the “Company”), a total of
6,100,000 shares of Company common stock standing in the undersigned’s name on
the books of the Company, such shares being represented by Certificate No(s).
__________ and does hereby irrevocably constitute and appoint the Company,
and
its Chairman and Chief Executive Officer, and any one of them acting alone,
as
attorney-in-fact to transfer the shares on the books of the Company with full
power of substitution in the premises.
EXECUTED
this ___ day of November, 2007.
CTP
Netherlands
By:
Name:
Title:
