TELEGEN
        CORPORATION

      


      STOCK
        OPTION AGREEMENT

      Option
        No. _____

      


      This
        Stock Option Agreement (“Agreement”) is made and entered into as of the date of
        grant set forth below (the “Date of Grant”) by and between Telegen Corporation,
        a California corporation (the “Company”), and the participant named below
        (“Participant”). Capitalized terms not defined herein shall have the respective
        meanings ascribed to them in the Company’s 2007 Stock Incentive Plan (the
“Plan”). 

      


      
        	Participant:	 	  	 
	Social
                Security Number:	 	  	 
	Address:	 	  	 
	 	 	 	 
	Total
                Option Shares:	 	  	 
	Exercise
                Price Per Share (US$):	 	  	 
	Date
                of
                Grant:	 	  	 
	Expiration
                Date:	 	  	 
	Type
                of
                Stock Option	 	  	 
	(Check
                one):	 	[
                ]
                Incentive Stock Option	 
	 	 	[ ] Nonqualified Stock Option	 


      

       

      1. Grant
        of Option.
        The
        Company hereby grants to Participant an option (the “Option”) to purchase the
        total number of shares of Common Stock of the Company set forth above (the
        “Shares”) at the Exercise Price Per Share set forth above (the “Exercise
        Price”), subject
        to all of the terms and conditions of this Agreement and the Plan. If designated
        as an Incentive Stock Option above, the Option is intended to qualify as
        an
“incentive stock option” (“ISO”) within the meaning of Section 422 of the
        Internal Revenue Code of 1986, as amended (the “Code”); if designated as a
        Nonqualified Stock Option above, the Option is not intended to qualify as
        an ISO
        under the Code.

      


      2. Exercise
        of Option.

      


      2.1 Exercise
        Period of Option.
        Provided Participant continues to provide services to the Company throughout
        the
        specified period, the Option will become exercisable at the following rate:
        

      


      [describe
        vesting schedule]

       

      2.2 Expiration.
        The
        Option shall expire on the Expiration Date set forth above and must be
        exercised, if at all, on or before the Expiration Date.

      


      3. Termination.

      


      3.1 Termination
        for Any Reason Except Death or Disability.
        If
        Participant’s services are terminated for any reason, except death, disability
        or Cause, the Option, to the extent (and only to the extent) that it would
        have
        been exercisable by Participant on the date of termination, may be exercised
        by
        Participant no later than 90 days months after the date of termination, but
        in
        any event no later than the Expiration Date.

      


      
        
           

        

        
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      3.2 Termination
        Because of Death or Disability.
        If
        Participant’s services are terminated because of death or disability of
        Participant, the Option, to the extent (and only to the extent) that it is
        exercisable by Participant on the date of termination, may be exercised by
        Participant (or Participant’s legal representative) no later than one year after
        the date of Termination (or, if required by the policies of the Canadian
        Venture
        Exchange applicable to the Company, not more than 90 days in the event of
        disability), but in any event no later than the Expiration Date.

      


      3.3 Termination
        for Cause.
        If
        Participant’s services are terminated for Cause, the Option shall automatically
        and fully terminate upon the first notification to Participant of such
        termination.

      


      3.4 No
        Obligation to Employ.
        Nothing
        in the Plan or this Agreement shall confer on Participant any right to continue
        in the employ of, or other relationship (whether as an officer, director,
        consultant or otherwise) with, the Company or any parent, subsidiary or
        affiliate of the Company, or limit in any way the right of the Company (or
        any
        parent, subsidiary or affiliate of the Company) to terminate Participant’s
        employment or other relationship at any time, with or without
        Cause.

      


      4. Manner
        of Exercise.

      


      4.1 Stock
        Option Exercise Agreement.
        To
        exercise this Option, Participant (or in the case of exercise after
        Participant’s death, Participant’s executor, administrator, heir or legatee, as
        the case may be) must deliver to the Company an executed stock option exercise
        agreement in the form attached hereto as Exhibit
        A,
        or in
        such other form as may be approved by the Company from time to time (the
        “Exercise Agreement”), which shall set forth Participant’s election to exercise
        the Option, the number of Shares being purchased, any restrictions imposed
        on
        the Shares and any representations, warranties and agreements regarding
        Participant’s investment intent and access to information as may be required by
        the Company to comply with applicable securities laws. If someone other than
        Participant exercises the Option, then such person must submit documentation
        reasonably acceptable to the Company that such person has the right to exercise
        the Option.

      


      4.2 Limitations
        on Exercise.
        The
        Option may not be exercised unless such exercise is in compliance with all
        applicable federal and state securities laws, as they are in effect on the
        date
        of exercise. The Option may not be exercised as to fewer than 100 Shares
        unless
        it is exercised as to all Shares as to which the Option is then exercisable,
        and
        the Option may be exercised only for whole shares.

      


      4.3 Payment.
        The
        Exercise Agreement shall be accompanied by full payment of the Exercise Price
        for the Shares being purchased in cash (by check) payable to the Company.
        Payment may also be made as permitted in the Plan, to the extent deemed
        acceptable by the Company.

      


      4.4 Tax
        Withholding.
        Prior
        to the issuance of the Shares upon exercise of the Option, Participant must
        pay
        or provide for any applicable federal or state withholding obligations of
        the
        Company. If the Committee permits, Participant may provide for payment of
        withholding taxes upon exercise of the Option by requesting that the Company
        retain Shares with a Fair Market Value equal to the minimum amount of taxes
        required to be withheld. In such case, the Company shall issue the net number
        of
        Shares to the Participant by deducting the Shares retained from the Shares
        issuable upon exercise.

      


      4.5 Issuance
        of Shares.
        Provided that the Exercise Agreement and payment are in form and substance
        satisfactory to counsel for the Company, and provided that the requirements
        of
        any stock
        exchange upon which the Shares may then be listed are satisfied, the
        Company shall issue the Shares registered in the name of Participant,
        Participant’s authorized assignee, or Participant’s legal representative, and
        shall deliver certificates representing the Shares with the appropriate legends
        affixed thereto.

      


      
        
           

        

        
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      5. Notice
        of Disqualifying Disposition of ISO Shares.
        If the
        Option is intended to qualify as an ISO, and if Participant sells or otherwise
        disposes of any of the Shares acquired pursuant to the Option on or before
        the
        later of (a) the date two years after the Date of Grant, and (b) the
        date one year after issuance of such Shares to Participant upon exercise
        of the
        Option, Participant shall immediately notify the Company in writing of such
        disposition. Participant acknowledges that Participant may be subject to
        income
        tax withholding by the Company on the compensation income recognized by
        Participant from the early disposition by payment in cash or out of the current
        wages or other compensation payable to Participant.

      


      6. Compliance
        with Laws and Regulations.
        The
        exercise of the Option and the issuance and transfer of Shares shall be subject
        to compliance by the Company and Participant with all applicable requirements
        of
        federal and state securities laws and with all applicable requirements of
        any
        stock exchange on which the Company’s Common Stock may be listed at the time of
        such issuance or transfer. Participant understands that the Company is under
        no
        obligation to register or qualify the Shares with the Securities and Exchange
        Commission, any state securities commission or any stock exchange to effect
        such
        compliance.

      


      7. Nontransferability
        of Option.
        The
        Option may not be transferred in any manner other than by will or by the
        laws of
        descent and distribution and may be exercised during the lifetime of Participant
        only by Participant. The terms of the Option shall be binding upon the
        executors, administrators, successors and assigns of Participant.

      


      8. Tax
        Consequences.
        If the
        Option is granted intending to qualify as an ISO under federal income tax
        law,
        but the Company does not represent or guarantee that the Option qualifies
        as
        such. Participant agrees and acknowledges that there are or may be federal
        and
        state income tax consequences to Participant as a result of the exercise
        of the
        Option and disposition of the Shares. PARTICIPANTS ARE URGED TO CONSULT THEIR
        OWN TAX ADVISERS BEFORE EXERCISING THE OPTION OR DISPOSING OF THE
        SHARES.

      


      9. Privileges
        of Stock Ownership.
        Participant shall not have any of the rights of a shareholder with respect
        to
        any Shares until Participant exercises the Option and pays the Exercise
        Price.

      


      10. Interpretation.
        Any
        dispute regarding the interpretation of this Agreement shall be submitted
        by
        Participant or the Company to the Committee for review. The resolution of
        such a
        dispute by the Committee shall be final and binding on the Company and
        Participant.

      


      11. Entire
        Agreement.
        The
        Plan is incorporated herein by reference. This Agreement and the Plan constitute
        the entire agreement of the parties and supersede all prior undertakings
        and
        agreements with respect to the subject matter hereof.

      


      12. Notices.
        Any
        notice required to be given or delivered to the Company under the terms of
        this
        Agreement shall be in writing and addressed to the Corporate Secretary of
        the
        Company at its principal corporate offices. Any notice required to be given
        or
        delivered to Participant shall be in writing and addressed to Participant
        at the
        address indicated above or to such other address as such party may designate
        in
        writing from time to time to the Company. All notices shall be deemed to
        have
        been given or delivered upon: personal delivery; three days after deposit
        in the
        United States mail by certified or registered mail (return receipt requested);
        one business day after deposit with any return receipt express courier
        (prepaid); or one business day after transmission by facsimile (transmission
        confirmed).

      


      
        
           

        

        
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      13. Successors
        and Assigns.
        The
        Company may assign any of its rights under this Agreement. This Agreement
        shall
        be binding upon and inure to the benefit of the successors and assigns of
        the
        Company. Subject to the restrictions on transfer set forth herein, this
        Agreement shall be binding upon Participant and Participant’s heirs, executors,
        administrators, legal representatives, successors and assigns.

      


      14. Governing
        Law.
        This
        Agreement shall be governed by and construed in accordance with the laws
        of the
        State of Washington, without regard to its provisions regarding conflicts
        of
        laws.

      


      15. Limitation
        on Rights; No Right to Future Grants; Extraordinary Item of
        Compensation.
        By
        entering into this Agreement and accepting the grant of the Option evidenced
        hereby, you acknowledge: (a) that the Plan is discretionary in nature and
        may be suspended or terminated by the Company at any time; (b) that the
        grant of the Option is a one-time benefit which does not create any contractual
        or other right to receive future grants of options, or benefits in lieu of
        options; (c) that all determinations with respect to any such future
        grants, including, but not limited to, the times when options will be granted,
        the number of shares subject to each option, the option price, and the time
        or
        times when each option will be exercisable, will be at the sole discretion
        of
        the Company; (d) that your participation in the Plan is voluntary;
        (e) that the value of the Option is an extraordinary item of compensation
        which is outside the scope of your employment contract, if any; (f) that
        the Option is not part of normal or expected compensation for purposes of
        calculating any severance, resignation, redundancy, end of service payments,
        bonuses, long-service awards, pension or retirement benefits or similar
        payments; (g) that the vesting of the Option ceases upon termination of
        employment or service relationship with the Company for any reason except
        as may
        otherwise be explicitly provided in the Plan or this Agreement; (h) that
        the future value of the underlying Shares is unknown and cannot be predicted
        with certainty; and (i) that if the underlying Shares do not increase in
        value, the Option will have no value.

      


      16. Employee
        Data Privacy.
        By
        entering this Agreement, you (a) authorize the Company and any agent of the
        Company administering the Plan or providing Plan recordkeeping services,
        to
        disclose to the Company or any of its affiliates any information and data
        the
        Company requests in order to facilitate the grant of the Option and the
        administration of the Plan; (b) waive any data privacy rights you may have
        with respect to such information; and (c) authorize the Company and its
        agents to store and transmit such information in electronic form.

      


      17. Acceptance.
        Participant hereby acknowledges receipt of a copy of the Plan and this
        Agreement. Participant has read and understands the terms and provisions
        thereof, and accepts the Option subject to all the terms and conditions of
        the
        Plan and this Agreement. Participant acknowledges that there may be adverse
        tax
        consequences upon exercise of the Option or disposition of the Shares and
        that
        Participant should consult a tax adviser prior to such exercise or
        disposition.

       

      
        
           

        

        
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      DATED
        as
        of the Date of Grant set forth above.

       

      
        
          	 	 	 
	 	TELEGEN
                  CORPORATION
	 
 	 
 	 
 
	 	By:  	 
	 	Its:	  
	 	Name:	  
	 	 	 
	 	
                
	 	 


        

  

      Participant
        acknowledges receipt of a copy of the Plan, a copy of which is annexed hereto;
        represents that Participant is familiar with the terms and provisions of
        the
        Plan and this Agreement; and hereby accepts this Option subject to all of
        the
        terms and provisions of the Plan and this Agreement. Participant further
        acknowledges that if the Plan has not been approved by the Company’s
        shareholders as of the Date of Grant of this Option, this Option shall not
        be
        exercisable until such approval has been obtained.

       

      
        	Participant:	 	  

	
              	 	
                (Signature)

              
	 	 	 
	 	 	  

	 	 	
                (Print
                  Name)

              
	 	 	 
	Date signed:
                __________________________	 	 


      

       

       

       

      
        
           

        

        
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      EXHIBIT
        A

      


      STOCK
        OPTION EXERCISE NOTICE

      AND

      INVESTMENT
        REPRESENTATION STATEMENT

      


      


      
        	To:	
                Telegen
                  Corporation

              


        	 	__________________________________


        	 	__________________________________


        	 	Attn: Secretary


        	 	 


      

       

      This
        Notice of Exercise is made and entered into as of _____________, 20___ (the
        “Effective Date”) by the purchaser named below (the “Purchaser”) in connection
        with stock options granted to Purchaser by Telegen Corporation, a California
        corporation (the “Company”). Capitalized terms not defined herein shall have the
        respective meanings ascribed to them in the Company’s 2007 Stock Incentive Plan
        (the “Plan”).

       

      
        


        
          	Purchaser:	 	  	 
	Total
                  Number of Shares:	 	  	 
	Purchase
                  Price Per Share:	 	   	 
	Total
                  Purchase Price:	 	   	 
	Option
                  Date of Grant:	 	   	 


        

         

      

      1. Exercise
        of Option.

      


      1.1 Exercise.
        Pursuant to exercise of that certain option (“Option”) granted to Purchaser
        under the Plan and subject to the terms and conditions of this Agreement,
        Purchaser hereby elects to purchases from the Company the total number of
        shares
        set forth above (“Shares”) of the Company’s Common Stock at a purchase price per
        share set forth above for a total purchase price set forth above (the “Purchase
        Price”).

      


      1.2 Title
        to Shares.
        The
        exact spelling of the name(s) under which Purchaser will take title to the
        Shares is:

       

      
        
          

        


        
          

        

      

       

      Purchaser
        desires to take title to the Shares as follows:

      


      
        	 	
                [
                  ]

              	
                Individual,
                  as separate property

              


      

      
        	 	
                [
                  ]

              	
                Husband
                  and wife, as community property

              


      

      
        	 	
                [
                  ]

              	
                Joint
                  Tenants

              


      

      
        	 	
                [
                  ]

              	
                Alone
                  or with spouse as trustee(s) of the following trust (including
                  date):

              


        	 	 	 


        	 	 	 


        	 	 	 


        	 	 	 


        	 	[
                ]	Other; please
                specify:
                


        	 	 	 


      

       

              

       

      
        
           

        

        
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      1.3 Payment.
        Purchaser hereby delivers payment of the Purchase Price in the manner permitted
        in the Stock Option Agreement by delivery of a check for the full Purchase
        Price.

      


      2. Representations
        and Warranties of Purchaser.
        Purchaser represents and warrants to the Company that:

      


      2.1 Agrees
        to Terms of the Plan.
        Purchaser has received a copy of the Plan and the Stock Option Agreement,
        has
        read and understands the terms of the Plan, the Stock Option Agreement and
        this
        Exercise Agreement, and agrees to be bound by their terms and conditions.
        Purchaser acknowledges that there may be adverse tax consequences upon exercise
        of the Option or disposition of the Shares, and that Purchaser should consult
        a
        tax adviser prior to such exercise or disposition.

      


      2.2 Purchase
        for Own Account for Investment.
        For as
        long as the Shares have not been registered under the Securities Act of 1933,
        as
        amended (the “Securities Act”), Purchaser makes the following representations:
        (a) Purchaser is purchasing the Shares for Purchaser’s own account for
        investment purposes only and not with a view to, or for sale in connection
        with,
        a distribution of the Shares within the meaning of the Securities Act; and
        (b) Purchaser has no present intention of selling or otherwise disposing of
        all or any portion of the Shares and no one other than Purchaser has any
        beneficial ownership of any of the Shares.

      


      2.3 Access
        to Information.
        Purchaser has had access to all information regarding the Company and its
        present and prospective business, assets, liabilities and financial condition
        that Purchaser reasonably considers important in making the decision to purchase
        the Shares. Purchaser has had ample opportunity to ask questions of the
        Company’s representatives concerning such matters and this investment and all
        such questions have been answered to Purchaser’s full satisfaction.

      


      2.4 Understanding
        of Risks.
        Purchaser is fully aware of (i) the highly speculative nature of the
        investment in the Shares, (ii) the financial hazards involved,
        (iii) the potential lack of liquidity of the Shares and the restrictions on
        transferability of the Shares (e.g., that Purchaser may not be able to sell
        or
        dispose of the Shares or use them as collateral for loans), (iv) the
        qualifications and backgrounds of the management of the Company; and
        (v) the tax consequences of investment in the Shares. Purchaser is capable
        of evaluating the merits and risks of this investment, has the ability to
        protect Purchaser’s own interests in this transaction and is financially capable
        of bearing a total loss of this investment.

      


      2.5 Compliance
        with Securities Laws.
        Purchaser understands that the Shares have not been registered under the
        Securities Act in reliance upon a specific exemption therefrom, which exemption
        depends upon, among other things, the bona fide nature of his or her investment
        intent as expressed herein. In this connection, Purchaser understands that,
        in
        the view of the Securities and Exchange Commission (“SEC”), the statutory basis
        for such exemption may be unavailable if his or her 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.

      


      3. Restricted
        Securities.

      


      3.1 No
        Transfer Unless Registered or Exempt.
        Purchaser understands that Purchaser may not transfer any Shares and must
        hold
        the Shares indefinitely unless such Shares are registered under the Securities
        Act or qualified under applicable state securities laws or unless, in the
        opinion of counsel to the Company, exemptions from such registration and
        qualification requirements are available. Purchaser understands that only
        the
        Company may file a registration statement with the SEC and that the Company
        is
        under no obligation to do so with respect to the Shares. Purchaser has also
        been
        advised that exemptions from registration and qualification may not be available
        or may not permit Purchaser to transfer all or any of the Shares in the amounts
        or at the times proposed by Purchaser.

      


      
        
           

        

        
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      3.2 Legends.
        Purchaser understands and agrees that until
        or
        unless the Shares are registered under the Securities Act, the certificate
        evidencing the Shares will be imprinted with a legend that prohibits the
        transfer of the Shares unless they are registered or such registration is
        not
        required in the opinion of counsel for the Purchaser satisfactory to the
        Company.

      


      4. Tax
        Consequences.
        PURCHASER UNDERSTANDS THAT PURCHASER MAY SUFFER ADVERSE FEDERAL OR STATE
        TAX
        CONSEQUENCES AS A RESULT OF PURCHASER’S PURCHASE OR DISPOSITION OF THE SHARES.
        PURCHASER ACKNOWLEDGES THAT SHE/HE HAS BEEN ADVISED TO CONSULT WITH HER/HIS
        OWN
        TAX ADVISER IN CONNECTION WITH THE PURCHASE OR DISPOSITION OF THE SHARES
        AND
        THAT PURCHASER HAS HAD AN OPPORTUNITY TO DO SO. PURCHASER IS NOT RELYING
        ON THE
        COMPANY OR ITS AGENTS FOR ANY TAX ADVICE.

      


      5. Compliance
        with Laws and Regulations.
        The
        issuance and transfer of the Shares will be subject to and conditioned upon
        compliance by the Company and Purchaser with all applicable state and federal
        laws and regulations and with all applicable requirements of any stock exchange
        or automated quotation system on which the Company’s Common Stock may be listed
        or quoted at the time of such issuance or transfer.

      


      6. Governing
        Law; Severability.
        This
        Agreement shall be governed by and construed in accordance with the internal
        laws of the State of Washington, without regard to conflicts of laws. If
        any
        provision of this Agreement is determined by a court of law to be illegal
        or
        unenforceable, then such provision will be enforced to the maximum extent
        possible and the other provisions will remain fully effective and
        enforceable.

      


      7. Entire
        Agreement.
        The
        Plan and this Agreement, together with all its Exhibits, constitute the entire
        agreement and understanding of the parties with respect to the subject matter
        of
        this Agreement, and supersede all prior understandings and agreements, whether
        oral or written, between the parties hereto with respect to the specific
        subject
        matter hereof.

      


      EXECUTED
        as of the Effective Date.

      


      PARTICIPANT

      


      


      
        	  	 	SSN:	  
	
                (Signature)

              	 	 	 
	 	 	Address:	  
	   	 	 	  
	
                (Please
                  print name)

              	 	 	 


      

            

       

      
        
           

        

        
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