CTP
      Products B.V.

    Veendam

    Stolberweg
      197, 9641

    The
      Netherlands

    


    31st
      October,
      2007

    


    


    Telegen
      Corporation

    1840
      Gateway Drive

    Suite
      200

    San
      Mateo

    CA
      94404

    United
      States of America

    


    


    
      	Re:	
              Settlement
                of Rent under Premises Lease
                Obligations

            


    

    


    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,
      Windmühlgasse 22-24, Austria 
      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 www.sec.gov),
      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/ Eltje Maas
      
        

      

    

    Name:

    Title:

     

    Multidisplay
      s.r.o.

     

     

    By: 
      /s/ Mr. vos
      
        

      

    

    Name:

    Title:

    


    


    


    


    


    ACCEPTED
      and AGREED to this

    31st
      day of
      October, 2007.

     

    /s/
      Duncan Troy

    
      
        

      

    

    Duncan
      Troy

    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: