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Exhibit 10.25
Form of the Warrant issued April 1998
EXHIBIT 10.25
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. NO SALE OR DISPOSITION OF SUCH SECURITIES
MAY BE EFFECTED WITHOUT (i) AN EFFECTIVE REGISTRATION STATEMENT RELATING
THERETO, OR (ii) AN OPINION OF COUNSEL FOR THE HOLDER, REASONABLY SATISFACTORY
TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED.
TELEGEN CORPORATION
WARRANT FOR
COMMON STOCK
Dated April 1, 1998
This certifies that for value received:
Denis S. K. Low (the "Purchaser"),
or registered assigns, is entitled, subject to the terms set forth herein, to
purchase from TELEGEN CORPORATION, a California corporation (the "Company"), up
to 1,315,790 fully paid and non-assessable shares of the Company's Common Stock,
without par value, at the price of US$0.38 per share. The initial purchase price
of US$0.38 per share, and the number of shares purchasable hereunder, are
subject to adjustment in certain events, all as more fully set forth under
Section 4 herein.
1. DEFINITIONS
"COMMISSION" means the Securities and Exchange Commission, or any other
federal agency then administering the Securities Act and the Securities Exchange
Act of 1934.
"COMMON STOCK" means the Company's Common Stock, any stock into which such
stock shall have been changed or any stock resulting from any reclassification
of such stock, and any other capital stock of the Company of any class or series
now or hereafter authorized having the right to share in distributions either of
earnings or assets of the Company without limit as to amount or percentage.
"COMPANY" means Telegen Corporation, a California corporation, and any
successor corporation.
"EXERCISE PERIOD" means, subject to Section 5 herein, the period commencing
immediately from date hereof and terminating at the earliest to occur of: (i)
5:00 p.m., Pacific Time, two months from the date hereof, or (ii) the time
immediately prior to the closing of (x) a merger or consolidation of the Company
with or into another entity in which the shareholders of the Company immediately
before such merger or consolidation own less than a majority of the surviving or
resulting entity's outstanding voting stock immediately thereafter, or (y) a
sale of all or substantially all of the Company's assets.
"EXERCISE PRICE" means the price per share of Common Stock set forth in the
preamble paragraph to this Warrant, as such price may be adjusted pursuant to
Section 4 hereof.
"FAIR MARKET VALUE" means the closing sale price or if not available then
the closing bid price on a given trading day of the Company's Common Stock as
reported on the electronic bulletin board under the symbol TLGN or as determined
by the Company's Board of Directors in good faith, as applicable.
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"HOLDER" means the person in whose name this Warrant is registered on the
books of the Company maintained for such purpose which initially shall be the
Purchaser.
"PERSON" means and includes natural persons, corporations, limited
partnerships, general partnerships, joint stock companies, joint ventures,
associations, companies, trusts, banks, trust companies, land trusts, business
trusts, government entities and authorities and other organizations, whether or
not legal entities.
"PRINCIPAL EXECUTIVE OFFICE" means the Company's office at 101 Saginaw
Drive, Redwood City, California 94063, or such other office as designated in
writing to the Holder by the Company.
"RULE 144" means Rule 144 as promulgated by the Commission under the
Securities Act, as such Rule may be amended from time to time, or any similar
successor rule that the Commission may promulgate.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the Commission
promulgated thereunder, all as the same shall be in effect from time to time.
"SHAREHOLDER" means a holder of one or more Warrant Shares or shares of
Common Stock acquired upon conversion of Warrant Shares.
"WARRANT" means this Warrant and all warrants issued upon the partial
exercise, transfer or division of or in substitution for this Warrant or any
such warrant.
"WARRANT SHARES" means the shares of Common Stock issuable upon the
exercise of this Warrant, provided that if under the terms hereof there shall be
a change such that the securities purchasable hereunder shall be issued by an
entity other than the Company or there shall be a change in the type or class of
securities purchasable hereunder, then the term shall mean the securities
issuable upon the exercise of the rights granted hereunder.
2. EXERCISE
2.1 EXERCISE RIGHT; MANNER OF EXERCISE. The purchase rights represented by
this Warrant may be exercised by the Holder, in whole or in part, at any time
and from time to time during the Exercise Period upon (i) surrender of this
Warrant, together with an executed Notice of Exercise, substantially in the form
of EXHIBIT A attached hereto, at the Principal Executive Office, and (ii)
payment to the Company of the aggregate Exercise Price for the number of Warrant
Shares specified in the Notice of Exercise (such aggregate Exercise Price the
"Total Exercise Price"). The Total Exercise Price shall be paid by check or wire
transfer. The Person or Person(s) in whose name(s) any certificate(s)
representing the Warrant Shares which are issuable upon exercise of this Warrant
shall be deemed to become the holder(s) of, and shall be treated for all
purposes as the record holder(s) of, such Warrant Shares, and such Warrant
Shares shall be deemed to have been issued, immediately prior to the close of
business on the date on which this Warrant and Notice of Exercise are presented
and payment made for such Warrant Shares, notwithstanding that the stock
transfer books of the Company shall then be closed or that certificates
representing such Warrant Shares shall not then be actually delivered to such
Person or Person(s). Certificates for the Warrant Shares so purchased shall be
delivered to the Holder within a reasonable time. If this Warrant is exercised
in part only, the Company shall, upon surrender of this Warrant for
cancellation, deliver the certificate(s) representing the Warrant Shares and a
new Warrant evidencing the rights of the Holder to purchase the balance of the
Warrant Shares which Holder is entitled to purchase hereunder. The issuance of
Warrant Shares upon exercise of this Warrant shall be made without charge to the
Holder for any issuance tax (as opposed to any income tax on the Holder with
respect to such issuance) with respect thereto or any other cost incurred by the
Company in connection with the exercise of this Warrant and the related issuance
of Warrant Shares.
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2.2 FRACTIONAL SHARES. The Company shall not issue fractional shares of
Common Stock upon any exercise or conversion of this Warrant. As to any
fractional share of Common Stock which the Holder would otherwise be entitled to
purchase from the Company upon such exercise, the Company shall purchase from
the Holder such fractional share at a price equal to an amount calculated by
multiplying such fractional share (calculated to the nearest 1/100th of a share)
by the Fair Market Value of a share of Common Stock on the date of the Notice of
Exercise. Payment of such amount shall be made in cash or by check payable to
the order of the Holder at the time of delivery of any certificate or
certificates arising upon such exercise or conversion.
2.3 RESERVATION OF SHARES; VALIDITY OF SHARES. The Company will reserve
and keep available for issuance upon exercise of this Warrant such number of
shares of Common Stock as shall be sufficient to permit the exercise in whole or
in part of this Warrant. Upon an exercise of this Warrant by the Holder in
compliance with Section 2.1 above, all of the shares issued upon exercise of
this Warrant shall be duly and validly issued, fully paid and non-assessable,
and free and clear of any liens.
3. WARRANT RECORDS AND TRANSFER
3.1 MAINTENANCE OF RECORD BOOKS. The Company shall keep at the Principal
Executive Office a record in which, subject to such reasonable regulations as it
may prescribe, it shall provide for the registration and transfer of this
Warrant. The Company and any Company agent may treat the Person in whose name
this Warrant is registered as the owner of this Warrant for all purposes
whatsoever and neither the Company nor any Company agent shall be affected by
any notice to the contrary.
3.2 RESTRICTIONS ON TRANSFERS.
(a) COMPLIANCE WITH SECURITIES ACT. Upon exercise of this Warrant,
and unless a registration statement covering the issuance of the underlying
Common Stock is on file with the Commission and currently effective, the Holder
shall confirm in writing, by executing the form attached hereto as EXHIBIT B,
that the shares of Common Stock purchased thereby are being acquired for
investment, solely for the Holder's own account and not as a nominee for any
other Person, and not with a view toward distribution or resale.
(b) CERTIFICATE LEGENDS. This Warrant, all shares of Common Stock
issued upon exercise of this Warrant (unless registered under the Securities
Act), shall be stamped or imprinted with a legend in substantially the following
form (in addition to any legends required by applicable state securities laws):
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. NO SALE OR DISPOSITION OF SUCH
SECURITIES MAY BE EFFECTED WITHOUT (i) AN EFFECTIVE REGISTRATION STATEMENT
RELATING THERETO, OR (ii) AN OPINION OF COUNSEL FOR THE HOLDER, REASONABLY
SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED.
(c) DISPOSITION OF WARRANT OR SHARES. With respect to any offer, sale
or other disposition of this Warrant or any shares of Common Stock issued upon
exercise of this Warrant prior to registration under the Securities Act of such
shares, the Holder or the Shareholder, as the case may be, agrees to give
written notice to the Company prior thereto, describing briefly the
circumstances thereof, together with a written opinion of the Holder's or
Shareholder's counsel, to the effect that such offer, sale or other disposition
may be effected without registration under the Securities Act or qualification
under any applicable state securities laws of this Warrant or such shares, as
the case may be, and indicating whether or not under the Securities Act
certificates for this Warrant or such shares, as the case may be, to be sold or
otherwise disposed of require any restrictive legend as to applicable
restrictions on transferability in order to insure compliance with the
Securities Act. Promptly upon receiving such written notice and reasonably
satisfactory opinion, if so requested, the Company, as promptly as practicable,
shall notify the Holder or the Shareholder, as the case may be, that it may sell
or otherwise dispose of this Warrant or such shares, as the case may be, all in
accordance with the terms of the notice delivered to the Company. If a
determination has been made pursuant to this Section 3.2(c) that the opinion of
counsel for the Holder or the Shareholder, as the case may be, is not reasonably
satisfactory to the Company, the Company shall so notify the Holder or the
Shareholder, as the case may be, promptly after such
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determination has been made and shall specify the legal analysis supporting any
such conclusion. Notwithstanding the foregoing, this Warrant or such shares, as
the case may be, may be offered, sold or otherwise disposed of in accordance
with Rule 144, provided that the Company shall have been furnished with such
information as the Company may reasonable request to provide reasonable
assurance that the provisions of Rule 144 have been satisfied. Each certificate
representing this Warrant or the shares thus transferred (except a transfer
pursuant to Rule 144) shall bear a legend as to the applicable restrictions on
transferability in order to insure compliance with the Securities Act, unless in
the aforesaid reasonably satisfactory opinion of counsel for the Holder or the
Shareholder, as the case may be, such legend is not necessary in order to insure
compliance with the Securities Act. The Company may issue stop transfer
instructions to its transfer agent in connection with such restrictions.
(d) WARRANT TRANSFER PROCEDURE. Transfer of this Warrant to a third
party, following compliance with the preceding subsections of this Section 3.2,
shall be effected by execution of the Assignment Form attached hereto as EXHIBIT
C, and surrender of this Warrant at the Principal Executive Office, together
with funds sufficient to pay any applicable transfer tax. Upon receipt of the
duly executed Assignment Form and the necessary transfer tax funds, if any, the
Company, at its expense, shall execute and deliver, in the name of the
designated transferee or transferees, one or more new Warrants representing the
right to purchase a like aggregate number of shares of Common Stock.
(e) TERMINATION OF RESTRICTIONS. The restrictions imposed under this
Section 3.2 upon the transferability of the Warrant and the shares of Common
Stock acquired upon the exercise of this Warrant shall cease (i) with respect to
the Common Shares acquired pursuant to the exercise of this Warrant only, if a
registration statement covering the shares of Common Stock to be issued
effective under the Securities Act at the time of such exercise, or (ii) if the
Company is presented with an opinion of counsel reasonably satisfactory to the
Company that such restrictions are no longer required in order to insure
compliance with the Securities Act, or (iii) if such securities may be
transferred in accordance with Rule 144(k). When such restrictions terminate,
the Company shall, or shall instruct its transfer agent to, promptly and without
expense to the Holder or the Shareholder, as the case may be, issue new
securities in the name of the Holder and/or the Shareholder, as the case may be,
not bearing the legends required under Section 3.2(b). In addition, new
securities shall be issued without such legends if such legends may be properly
removed under the terms of Rule 144(k).
4. ANTIDILUTION PROVISIONS
4.1 REORGANIZATION, RECLASSIFICATION OR RECAPITALIZATION OF THE COMPANY.
In case of (i) a capital reorganization, reclassification or recapitalization of
the Company's capital stock (other than in the cases referred to in of Section
4.4 hereof), (ii) the Company's consolidation or merger with or into another
corporation in which the Company is not the surviving entity, or a reverse
triangular merger in which the Company is the surviving entity but the shares of
the Company's capital stock outstanding immediately prior to the merger are
converted, by virtue of the merger, into other property, whether in the form of
securities, cash or otherwise, or (iii) the sale or transfer of the Company's
property as an entirety or substantially as an entirety, then, as part of such
reorganization, reorganization, recapitalization, merger, consolidation, sale or
transfer, lawful provision shall be made so that there shall thereafter be
deliverable upon the exercise of this Warrant or any portion thereof (in lieu of
or in addition to the number of shares of Common Stock theretofore deliverable,
as appropriate), and without payment of any additional consideration, the number
of shares of stock or other securities or property to which the holder of the
number of shares of Common Stock which would otherwise have been deliverable
upon the exercise of this Warrant or any portion thereof at the time of such
reorganization, reclassification, recapitalization, consolidation, merger, sale
or transfer would have been entitled to receive in such reorganization,
reclassification, recapitalization, consolidation, merger, sale or transfer.
This Section 4.1 shall apply to successive reorganizations, reclassifications,
recapitalizations, consolidations, mergers, sales and transfers and to the stock
or securities of any other corporation that are at the time receivable upon the
exercise of this Warrant. If the per-share consideration payable to the Holder
for shares of Common Stock in connection with any transaction described in this
Section 4.1 is in a form other than cash or marketable securities, then the
value of such consideration shall be determined in good faith by the Company's
Board of Directors.
4.2 SPLITS AND COMBINATIONS. If the Company at any time subdivides any of
its outstanding shares of Common Stock into a greater number of shares or
declares a stock dividend, the Exercise Price in effect immediately prior to
such subdivision shall be proportionately reduced, and, conversely if the
outstanding shares of Common Stock
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are combined into a smaller number of shares, the Exercise Price in effect
immediately prior to such combination shall be proportionately increased. Upon
any adjustment of the Exercise Price under this Section 4.2, the number of
shares of Common Stock issuable upon exercise of this Warrant shall equal the
number of shares determined by dividing (i) the aggregate Exercise Price payable
for the purchase of all shares issuable upon exercise of this Warrant
immediately prior to such adjustment by (ii) the Exercise Price per share in
effect immediately after such adjustment.
4.3 RECLASSIFICATIONS. If the Company changes any of the securities as to
which purchase rights under this Warrant exist into the same or a different
number of securities of any other class or classes, this Warrant shall
thereafter represent the right to acquire such number and kind of securities as
would have been issuable as the result of such change with respect to the
securities that were subject to the purchase rights under this Warrant
immediately prior to such reclassification or other change and the Exercise
Price therefor shall be appropriately adjusted. No adjustment shall be made
pursuant to this Section 4.3 upon any conversion described in Section 4.1
hereof.
4.4 LIQUIDATION; DISSOLUTION. If the Company shall dissolve, liquidate or
wind up its affairs, the Holder shall have the right, but not the obligation, to
exercise this Warrant effective as of the date of such dissolution, liquidation
or winding up. If any such dissolution, liquidation or winding up results in any
cash distribution to the Holder in excess of the aggregate Exercise Price for
the shares of Common Stock for which this Warrant is exercised, then the Holder
may, at its option, exercise this Warrant without making payment of such
aggregate Exercise Price and, in such case, the Company shall, upon distribution
to the Holder, consider such aggregate Exercise Price to have been paid in full,
and in making such settlement to the Holder, shall deduct an amount equal to
such aggregate Exercise Price from the amount payable to the Holder.
5. MISCELLANEOUS
5.1 HOLDER NOT A SHAREHOLDER. Prior to the exercise of this Warrant as
hereinbefore provided, the Holder shall not be entitled to any of the rights of
a shareholder of the Company including, without limitation, the right as a
shareholder (i) to vote on or consent to any proposed action of the Company or
(ii) to receive (x) dividends or any other distributions made to shareholders,
(y) notice of or attend any meetings of shareholders of the Company, or (z)
notice of any other proceedings of the Company.
5.2 ENFORCEMENT COSTS. If any party to, or beneficiary of, this Warrant
seeks to enforce its rights hereunder by legal proceedings or otherwise, then
the non-prevailing party shall pay all reasonable costs and expenses incurred by
the prevailing party, including, without limitation, all reasonable attorneys'
fees (including the allocable costs of in-house counsel).
5.3 NONWAIVER; CUMULATIVE REMEDIES. No course of dealing or any delay or
failure to exercise any right hereunder on the part of the Holder and/or any
Shareholder shall operate as a waiver of such right or otherwise prejudice the
rights, powers or remedies of the Holder or such Shareholder. No single or
partial waiver by the Holder and/or any Shareholder of any provision of this
Warrant or of any breach or default hereunder or of any right or remedy shall
operate as a waiver of any other provision, breach, default right or remedy or
of the same provision, breach, default, right or remedy on a future occasion.
The rights and remedies provided in this Warrant are cumulative and are in
addition to all rights and remedies which the Holder and each Shareholder may
have in law or in equity or by statute or otherwise.
5.4 NOTICES. Any notice, request, or other communications required or
permitted hereunder shall be in writing and shall deemed to have been duly given
if sent by facsimile, or mailed by registered or certified mail, postage
prepaid, or by recognized overnight courier or personal delivery, addressed (a)
if to the Holder or a Shareholder, to it at the last known address appearing on
the books of the Company maintained for such purpose, or (b) if to the Company,
to it at 101 Saginaw Drive, Redwood City, California 94063, attention: Chief
Executive Officer, telephone (650) 261-9400, facsimile (650) 261-9468, with a
copy (which will not constitute notice) to Thomas C. DeFilipps, Esq.,Wilson
Sonsini Goodrich & Rosati, 650 Page Mill Road, Palo Alto, California 94304,
telephone (650) 493-9300, facsimile (650) 493-6811. Any party hereto may by
notice so given change its address for future notice hereunder. All such notices
will be deemed to have been given (i) upon confirmation of delivery, if sent by
facsimile, or (ii) upon delivery, if sent by courier or personal delivery.
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5.5 SUCCESSORS AND ASSIGNS. This Warrant shall be binding upon, the
Company and any Person succeeding the Company by merger, consolidation or
acquisition of all or substantially all of the Company's assets, and all of the
obligations of the Company with respect to the shares of Common Stock issuable
upon exercise of this Warrant, shall survive the exercise, expiration or
termination of this Warrant and all of the covenants and agreements of the
Company shall inure to the benefit of the Holder, each Shareholder and their
respective successors and assigns.
5.6 SEVERABILITY.
(a) If, in any action before any court or agency legally empowered to
enforce any term, any term is found to be unenforceable, then such term shall be
deemed modified to the extent necessary to make it enforceable by such court or
agency.
(b) If any term is not curable as set forth in subsection (a) above,
the unenforceability of such term shall not affect the other provisions of this
Warrant but this Warrant shall be construed as if such unenforceable term had
never been contained herein.
5.7 INTEGRATION. This Warrant was initially issued pursuant to that
certain Note and Warrant Purchase Agreement among the Company and the Holder
hereof, entered into of even date herein (the "Note Agreement") and the Note
between the Company and the Holder hereof, entered into of even date herein (the
"Note"). The Note Agreement, the Note, and the other documents entered into
pursuant thereto, including, without limitation, this Warrant, constitute the
full and entire understanding and agreement between the parties hereto and
thereto with regard to the subject matter hereof and thereof, and supersede any
prior or contemporaneous understandings, agreements or representations between
them that relate to the subject matter hereof or thereof.
5.8 WAIVER AND AMENDMENT. Any provision of this Warrant may be amended,
waived, modified or verified, including by way of settlements or otherwise, upon
the written consent of the Company and the holders of at least a
majority-in-interest of all outstanding Warrants issued pursuant to the Note
Agreement with the same terms hereof.
5.9 GOVERNING LAW. This Warrant shall be governed by, and construed in
accordance with, the laws of the State of California applicable to contracts
entered into and to be performed wholly within California by California
residents.
5.10 EXPRESS NOTICE OF EXERCISE PERIOD. To the extent the Exercise Period
shall be determined under subsection (ii) of such definition hereof, the Company
will provide the Holder 15 days prior written notice, and thereafter the
Holder's right to exercise this Warrant shall continue until the termination of
the Exercise Period.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its duly authorized officer on April 1, 1998.
TELEGEN CORPORATION
By: /s/ FRED Y KASHKOOLI
------------------------------------------
Fred Y. Kashkooli, Chief Executive Officer
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SCHEDULE OF EXHIBITS
EXHIBIT A - Notice of Exercise (Section 2.1)
EXHIBIT B - Investment Representation Certificate (Section 3.2(a))
EXHIBIT C - Assignment Form (Section 3.2(d))
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EXHIBIT A
NOTICE OF EXERCISE FORM
(To be executed only upon partial or full
exercise of the attached Warrant)
The undersigned registered Holder of the attached Warrant hereby
irrevocably exercises the attached Warrant for and purchases shares of Common
Stock of Telegen Corporation and herewith makes payment therefore in the amount
of US$ ___________________, all at the price and on the terms and conditions
specified in the attached Warrant.
The undersigned requests that a certificate (or certificates in
denominations of shares) for the shares of Common Stock of Telegen Corporation
hereby purchased be issued in the name of and delivered to (circle one) (a) the
undersigned or (b) ___________________, whose address
is____________________________________ and, if such shares of Common Stock shall
not include all the shares of Common Stock issuable as provided in the attached
Warrant, that a new Warrant of like tenor for the number of shares of Common
Stock of Telegen Corporation not being purchased hereunder be issued in the name
of and delivered to (circle one) (a) the undersigned or (b)
________________________, whose address is .
Dated: ____________________________, 199__
Signature Guaranteed ________________________________________
________________________________________
By: ___________________________________
(Signature of Registered Holder)
Title: ________________________________
NOTICE: The signature to this Notice of Exercise must correspond with the
name as written upon the face of the attached Warrant in every
particular, without alteration or enlargement or any change
whatever.
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EXHIBIT B
INVESTMENT REPRESENTATION CERTIFICATE
Purchaser: __________________________________________________
Company: Telegen Corporation, a California corporation
Security: Common Stock
Amount: ___________________
Date: ___________________
In connection with the purchase of the above-listed securities (the
"Securities"), the undersigned (the "Purchaser") represents to the Company as
follows:
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(a) The Purchaser is aware of the Company's business affairs and financial
condition, and has acquired sufficient information about the Company to reach an
informed and knowledgeable decision to acquire the Securities. The Purchaser is
purchasing the Securities for its own account for investment purposes only and
not with a view to, or for the resale in connection with, any "distribution"
thereof for purposes of the Securities Act of 1933, as amended (the "Securities
Act");
(b) The Purchaser understands that the Securities may have not been
registered under the Securities Act in reliance upon a specific exemption
therefor, which exemption depends upon, among other things, the bona fide nature
of the Purchaser's investment intent as expressed herein. In this connection,
the Purchaser understands that, in the view of the Securities and Exchange
Commission (the "Commission"), the statutory basis for such exemption may be
unavailable if the Purchaser's representation was predicated solely upon a
present intention to hold these Securities for the minimum capital gains period
specified under tax statutes, for a deferred sale, for or until an increase or
decrease in the market price of the Securities, or for a period of one year or
any other fixed period in the future;
(c) The Purchaser further understands that the Securities must be held
indefinitely unless subsequently registered under the Securities Act or unless
an exemption from registration is otherwise available. In addition, the
Purchaser understands that the certificate evidencing the Securities will be
imprinted with the legend referred to in the Warrant under which the Securities
are being purchased unless there exists an effective registration statement for
such securities;
(d) The Purchaser is aware of the provisions of Rule 144, promulgated
under the Securities Act, which, in substance, permit limited public resale of
"restricted securities" acquired, directly or indirectly, from the issuer
thereof (or from an affiliate of such issuer), in a non-public offering subject
to the satisfaction of certain conditions, if applicable, including, among other
things: (i) the availability of certain public information about the Company;
(ii) the resale occurring not less than one (1) year after the party has
purchased and paid for the securities to be sold; (iii) the sale being made
through a broker in an unsolicited "broker's transaction" or in transactions
directly with a market maker (as said term is defined under the Securities
Exchange Act of 1934) and the amount of securities being sold during any
three-month period not exceeding the specified limitations stated therein;
(e) The Purchaser further understands that at the time it wishes to sell
the Securities there may be no public market upon which to make such a sale, and
that, even if such a public market upon which to make such a sale then exists,
the Company may not be satisfying the current public information requirements of
Rule 144, and that, in such event, the Purchaser may be precluded from selling
the Securities under Rule 144 even if the one-year minimum holding period had
been satisfied; and
(f) The Purchaser further understands that in the event all of the
requirements of Rule 144 are not satisfied, registration under the Securities
Act, compliance with Regulation A, or some other registration exemption will be
required; and that, notwithstanding the fact that Rule 144 is not exclusive, the
staff of the Commission has expressed its opinion that persons proposing to sell
private placement securities other than in a registered offering and otherwise
than pursuant to Rule 144 will have a substantial burden of proof in
establishing that an exemption from registration is available for such offers or
sales, and that such persons and their respective brokers who participate in
such transactions do so at their own risk.
Date: ____________________________, 199___
PURCHASER:
____________________________________
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EXHIBIT C
ASSIGNMENT FORM
(To be executed only upon the assignment of the attached Warrant)
FOR VALUE RECEIVED, the undersigned registered Holder of the attached
Warrant hereby sells, assigns and transfers unto __________________, whose
address is ____________________________________________ all of the rights of the
undersigned under the attached Warrant, with respect _________________ to shares
of Common Stock of Telegen Corporation and, if such shares of Common Stock shall
not include all the shares of Common Stock issuable as provided in the attached
Warrant, then a new Warrant of like tenor for the number of shares of Common
Stock of Telegen Corporation not being transferred hereunder be issued in the
name of and delivered to the undersigned, and does hereby irrevocably constitute
and appoint _________________________________ attorney to register such transfer
on the books of Telegen Corporation maintained for the purpose, with full power
of substitution in the premises.
Dated: ______________________, ____
Signature Guaranteed ________________________________________
________________________________________
By: ___________________________________
(Signature of Registered Holder)
Title: ________________________________
NOTICE: The signature to this Assignment must correspond with the name upon
the face of the attached Warrant in every particular, without
alteration or enlargement or any change whatever.
