Document:

<PAGE>

Ex-10.35
Selling Agreement by and between the Company and
WMS Financial Planners, Inc. and Pacific West Securities, Inc.
dated March 8, 2000

                                  EXHIBIT 10.35

                                SELLING AGREEMENT

                               TELEGEN CORPORATION
                                   $4,000,000
                         500,000 Shares of Common Stock

March 8, 2000

Mr. William M. Swayne, II, CFP
President
WMS Financial Planners, Inc.
2209 Eastlake Ave East,
Seattle, WA 98102

Ms. Loretta Elderkin
President
Pacific West Securities, Inc.
1201 SW 7th Street, Suite 108,
Renton, WA 98057

Ladies and Gentlemen:

Telegen Corporation, a California corporation, (the "Company") proposes to
offer, sell and issue (the "Offering") in a transaction complying with the
provisions of Regulation S ("Regulation S") under the Securities Act of 1933, as
amended (the "Act") in the aggregate up to 500,000 shares of Common Stock, no
par value, (the "Offering") at a price of $8.00 per share (the "Shares") for
total gross proceeds of up to $4,000,000. The Company hereby engages Pacific
West Securities, Inc. ("PW") as its managing broker-dealer (the "Managing
Dealer") and WMS Financial Planners, Inc. ("WMS") as its investment banker (the
"Advisor") and PW and WMS jointly as its agents (PW and WMS are referred to
herein as the "Selling Agents") to assist the Company in the Offering. Further,
the Offering shall be conducted on a "best efforts" basis.

     (1)  REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
          and warrants to the Selling Agents that:

          a.   The Company will carefully and diligently prepare certain
               Disclosure Documents (the "Disclosure Documents") with a view to
               providing relevant disclosure to all persons to whom the Shares
               are offered.

          b.   The Disclosure Documents, as of the date issued to the best of
               the Company's knowledge, will not contain any untrue statement of
               a material fact or omit to state any material fact required to be
               stated therein or necessary to make the statements therein not
               misleading.

          c.   From the effective date of the Disclosure Documents and until the
               Termination Date (as defined below), and except as contemplated
               in the Disclosure Documents, the Company shall promptly prepare a
               supplement to the Disclosure Documents advising the Managing
               Dealer and Selling Agents of any of the following events, if they
               occur: If the Company incurs any material

<PAGE>

               liabilities or obligations, direct or contingent, not in the
               ordinary course of its business, or if the Company enters into
               any material transaction, not in the ordinary course of its
               business, or sustains any loss or damage to its properties,
               whether or not insured, which would be material and adverse to
               the business of the Company; or if there occurs any material
               adverse change in the capital stock or debt of the Company, or
               any material adverse change (whether or not in the ordinary
               course of business) in the condition, financial or otherwise, or
               earnings, affairs, or business of the Company. Prior to the
               Termination Date, the Company shall not declare any dividends or
               distributions in respect of its capital stock or change its
               Articles of Incorporation or bylaws in any way that adversely
               affects the Shares.

          d.   The Shares shall be duly authorized and, upon receipt by the
               Company of the consideration for the Shares, shall be validly
               issued, fully paid and nonassessable Shares of the Company, and
               shall conform to the description thereof contained in the
               Disclosure Documents.

     (2)  EMPLOYMENT OF THE SELLING AGENT.

          a.   Subject to the terms and conditions herein set forth, the Company
               hereby employs the Selling Agents, for the purpose of offering
               and selling the Shares, as provided in this Agreement on a best
               efforts basis. The Company employs the Selling Agents as its
               agent commencing as of the date hereof and until the Termination
               Date or June 30, 2000, whichever date is earliest, (which period
               may be extended until September 30, 2000 by written agreement
               between the Selling Agents and the Company) which date, or
               shortened or extended date, is referred to herein as the
               "Termination Date." The Selling Agents agree to use their best
               efforts to sell the Shares as the Company's agent. It is
               understood and agreed that there is no firm commitment on the
               part of the Selling Agents to purchase any of the Shares.

          b.   The Selling Agents shall offer and sell the Shares hereunder at a
               price of $8.00 per Share on the terms of sale set forth in this
               Agreement. Subject to the receipt by the Company of the proceeds
               from the sale thereof, the Selling Agents shall be entitled to
               commissions and advisor fees as follows:

               (i)  A commission of two percent (2%) of the gross proceeds of
                    the sale of the Shares, payable by the Company to the
                    Selling Agents in cash or Shares priced at $8.00 per share,
                    or any combination thereof, at the option of the Selling
                    Agents; plus

               (ii) An advisor fee of two and one half percent (2.5%) of the
                    gross proceeds of the sale of the Shares, payable by the
                    Company to WMS as Advisor, payable in Shares at a price of
                    $8.00 per share; plus

               (iii) A commission of two and one half percent (2.5%) of the
                    gross proceeds of the sale of the Shares, payable by the
                    Company to PW as Managing Advisor, payable in Shares at a
                    price of $8.00 per share; plus

               (iv) A commission payable by the Company to the Selling Agents in
                    three (3) year warrants substantially in the form attached
                    hereto as Exhibit 1 exercisable at $8.00 per Share, at the
                    rate of one (1) warrant for every twenty (20) Shares sold in
                    the Offering (a maximum of 25,000 warrants if the full
                    Offering is sold); plus

               (v)  A commission payable by the Company to PW as Managing Dealer
                    in three (3) year warrants substantially in the form
                    attached hereto as Exhibit 1 exercisable at $8.00 per Share,
                    at the rate of one (1) warrant for every forty (40) Shares
                    sold in the Offering (a maximum of 12,500 warrants if the
                    full Offering is sold); plus

               (vi) An advisor fee payable by the Company to WMS as Advisor in
                    three (3) year warrants substantially in the form attached
                    hereto as Exhibit 1 exercisable at $8.00 per Share, at the
                    rate of one (1) warrant for forty (40) Shares sold in the
                    Offering (a maximum of 12,500 warrants if the full Offering
                    is sold).

               Commissions payable hereunder shall be paid by the Company within
               fifteen (15) days of receipt by the Company of such proceeds
               following the confirmation of a Plan of Reorganization (the

<PAGE>

               "Plan") for the Company by the U. S. Bankruptcy Court for the
               Northern District of California (the "Court"). All commissions
               set forth in the preceding subsections shall be payable
               regardless of which of the Selling Agents or their sub-agents
               sells any particular Shares. Subject to the limitations of
               Section 2(c) hereof, allocation of all commissions payable under
               subparagraphs (i) and (iv) of this paragraph shall be at the
               discretion of the Selling Agents, and the Company shall have no
               interest or responsibility in determining such allocation.

               It is understood and acknowledged by the Selling Agents that
               receipt of the proceeds by the Company from sale of Shares and
               payment of commissions are contingent upon an order of the Court
               confirming the Plan. For all purposes of this Agreement, receipt
               by the Company of the proceeds of sale shall mean actual receipt
               by the Company (not deposit of proceeds into the escrow fund
               pursuant to an Escrow Agreement), and availability of such
               proceeds for use by the Company as described in the "Use of
               Proceeds" section of the Disclosure Documents.

          c.   The Managing Dealer may appoint other licensed broker-dealers to
               be employed as the non-exclusive agents of the Company to offer
               and sell the Shares, upon fulfillment of the following
               conditions:

               (i)  The receipt of the written consent of the Company, which
                    consent shall not be unreasonably withheld;

               (ii) Delivery to the Company of a Verified Statement, executed
                    under penalty of perjury, (i) making the same
                    representations regarding its licensing status as made by
                    the Selling Agents in subparagraphs (5) a and (5) b hereof
                    and (ii) that such person is a disinterested person with
                    respect to the Debtor and does not hold or represent an
                    interest adverse to the estate within the meaning of
                    Section 327 of the U.S. Bankruptcy Code.

               Except as set forth in this subparagraph (c), the Selling Agents
               may not appoint or employ any person or other entity as their
               agent or subagent or utilize the services of any other broker or
               dealer to participate in the sale of the Shares as a soliciting
               or participating dealer or otherwise.

               Any such sub-agents or other broker-dealers appointed by the
               Selling Agents shall be appointed solely at the expense of the
               Selling Agents; the Company shall have no liability to such
               persons, and the Selling Agents shall indemnify and hold the
               Company harmless therefrom. Subject to the limitations in the
               preceding sentence, the Selling Agents may assign any portion of
               their commission payable under this Agreement to any subagent,
               broker-dealer, finder or other party by providing the Company
               with written notice of assignment stating the portion of the
               commission to be paid and the name, address, phone number and tax
               ID number of the party to whom the assignment is made.

          d.   All proceeds received from the sale of the Shares shall be placed
               in an escrow, at Preferred Bank, Los Angeles, California, with
               David L. Kagel, Esq. as escrow holder, and shall be payable to
               the Company upon the confirmation of the Plan by the Court. In
               the event that the Company is unable to confirm the Plan by June
               30, 2000 (or such extended date as is agreed upon between the
               Company and the Selling Agents pursuant to Section 2(a) hereof),
               all proceeds from this Offering shall be returned to the buyers
               of the Shares and the Offering will terminate.

          e.   It is understood and agreed that the Company, in its sole
               discretion, may (i) terminate the Offering at any time upon 30
               days written notice, and (ii) reject any subscription for the
               Shares presented to it by the Selling Agent with such objection,
               if any, occurring within 30 days of receipt by Debtor.

          f.   Each potential investor in the Offering shall be required to
               complete a Suitability Questionnaire in a form acceptable to the
               Company, which shall be provided to the Company upon the sale of
               the Shares to the investor. The Company shall determine, in its
               sole discretion, whether the potential investor qualifies as a
               non-U.S. person as defined in Regulation S. If a potential
               investor does not qualify as a non-U.S. person, his investment
               will be promptly refunded. The Company may also reject any
               investor in the Offering for any reason whatsoever.

<PAGE>

          g.   Certificates for Shares, registered in such names as shall be
               provided for in the Subscription Agreements executed by the
               purchasers thereof, sold by the Selling Agents, shall be
               delivered to the purchasers as promptly as practicable after
               receipt by the Company of the proceeds of such sales.

          h.   The Company shall have the right, subject to the approval of the
               Selling Agents, to compensate finders who refer potential
               investors in the Offering to the Company or the Selling Agents.
               Any fees or commissions paid by the Company to such finders shall
               reduce the fees and commissions due and payable to the Selling
               Agents pursuant to this Section 2 by an equal amount, such that
               the total fees and commissions payable to the finder and the
               Selling Agents shall together equal the amount payable under this
               Section 2.

     (3)  COVENANTS OF THE COMPANY. The Company covenants as follows:

          a.   To make no amendment or supplement to the Disclosure Documents of
               which the Selling Agents have not been furnished with a copy
               prior to the use thereof; and to advise the Selling Agents
               promptly of the issuance of any stop order or any similar order
               by the Securities and Exchange Commission or any state securities
               commission or agency.

          b.   To furnish to the Selling Agents without charge copies of the
               Disclosure Documents, including all exhibits thereto, and all
               amendments and supplements to any such documents, in each case as
               soon as available and in such reasonable quantities as the
               Selling Agents may from time to time request.

          c.   If any event shall have occurred as a result of which the
               Disclosure Documents, as then amended or supplemented, would
               include any untrue statement of a material fact, or omit to state
               any material fact necessary in order to make the statements
               therein not misleading, to notify the Selling Agents and, upon
               the request of the Selling Agents, to prepare and furnish without
               charge to the Selling Agents as many copies of a supplement or
               amendment to the Disclosure Documents which will correct such
               statement or omission as the Selling Agents may from time to time
               reasonably request.

     (4)  EXPENSES. Whether or not the transactions contemplated hereby are
          consummated or if this Agreement is terminated, the Company shall pay
          all costs and expenses incurred by it incident to the performance of
          the obligations of the Company hereunder, including the fees and
          expenses of the Company's counsel and the costs and expenses incident
          to the preparation and duplication of the Disclosure Documents. The
          Selling Agents shall bear their own expenses in connection with the
          Offering.

     (5)  REPRESENTATIONS AND WARRANTIES OF THE SELLING AGENTS. The Selling
          Agents hereby represent and warrant that:

          a.   PW is a member in good standing of the National Association of
               Securities Dealers, Inc.

          b.   PW is a registered broker-dealer with the Securities and Exchange
               Commission and licensed and in good standing under the laws of
               each jurisdiction in which it will offer or sell Shares or is
               exempt from licensure in each such jurisdiction.

          c.   Each person employed or appointed by the Selling Agents to offer
               or sell the Shares is duly registered with the Securities and
               Exchange Commission, a member in good standing of the NASD, and
               is licensed and in good standing under the laws of each
               jurisdiction in which it will offer or sell the Shares.

          d.   Prior to the date of the Disclosure Documents, the Selling Agents
               have not made any offers for sale of the Shares.

     (6)  COVENANTS OF SELLING AGENTS. The Selling Agents covenant that:

          a.   Each person to whom the Selling Agents will sell the Shares shall
               be a non-U.S. person as defined in Regulation S. The Selling
               Agents shall require that each potential investor shall fill out

<PAGE>

               a Suitability Questionnaire, which shall be promptly provided to
               the Company.

          b.   The Selling Agents will offer the Shares in compliance with
               Regulation S under the Act.

          c.   The Selling Agents will conduct the Offering in compliance with
               all relevant provisions of securities laws of the subscriber's
               jurisdiction.

          d.   The Selling Agents will promptly furnish the Company with a
               complete list of all persons or entities to whom the Shares have
               been offered or sold together with the completed and executed
               Subscription Agreements and Suitability Questionnaires for each
               purchaser of the Shares.

          e.   Neither the Selling Agents nor any officer or other person
               employed by them will provide any information or make any
               representations to offerees of the Shares, other than such
               information and representations as are either contained in the
               Disclosure Documents or are not inconsistent with information set
               forth in the Disclosure Documents.

          f.   In the event either of them learns of any circumstances or facts
               which it believes would make the Disclosure Documents inaccurate
               or misleading as to any material fact, such Selling Agent shall
               immediately bring such circumstances or facts to the attention of
               the Company.

     (7)  INDEMNIFICATION.

          a.   The Company shall indemnify and hold harmless the Selling Agents
               and each person, if any, who controls the Selling Agents within
               the meaning of the Act, jointly and severally, against any and
               all losses, claims, damages, liabilities, costs, and expenses
               (including reasonable attorneys' and experts' fees), to which the
               Selling Agents or such controlling person may become subject,
               under the Act or otherwise, insofar as such losses, claims,
               damages, liabilities, costs, and expenses (including reasonable
               attorneys' or experts' fees), or actions in respect thereto,
               arise out of or are based upon any untrue statement or alleged
               untrue statement of any material fact contained in the Disclosure
               Documents, or any amendment or supplement thereto, or arise out
               of or are based upon the omission or alleged omission to state
               therein a material fact required to be stated therein or
               necessary to make the statements therein not misleading; and
               shall reimburse the Selling Agents and each such controlling
               person for any reasonable legal or other expenses incurred by
               such Selling Agents or such controlling person in connection with
               investigating or defending any such loss, claim, damage,
               liability, cost, expense, or action; provided, however, that the
               Company will not be liable in any such case to the extent that
               any such loss, claim, damage, liability, or expense arises out of
               or is based upon an untrue statement or alleged untrue statement
               or omission or alleged omission made in the Disclosure Documents
               or such amendment or such supplement in reliance upon and in
               conformity with information furnished to the Company by or on
               behalf of the Selling Agents.

          b.   Promptly after receipt by an indemnified party under this Section
               7 of notice of the commencement of any action, such indemnified
               party shall, if a claim in respect thereof is to be made against
               an indemnifying party under this Section 7, notify the
               indemnifying party of the commencement thereof; but the omission
               to so notify the indemnifying party shall not relieve it from any
               liability under this Section 7. In case any such action is
               brought against any indemnified party, and it notifies an
               indemnifying party of the commencement thereof, the indemnifying
               party shall be entitled to participate therein and, to the extent
               that it may wish, jointly with any other indemnifying party
               similarly notified, assume the defense thereof, with counsel who
               shall be to the reasonable satisfaction of such indemnified
               party, and notice from the indemnifying party to such indemnified
               party of its election so to assume the defense thereof, the
               indemnifying party shall not be liable to such indemnified party
               under this Section 7 for any legal or other expenses subsequently
               incurred by such indemnified party in connection with the defense
               thereof other than reasonable costs of investigation.

     (8)  EFFECTIVE DATE AND TERMINATION. This Agreement shall become effective
          on the date this Agreement is approved by the Court or upon such later
          date as the Selling Agents and the Company shall agree in writing.
          This Agreement may be terminated by the Selling Agents, at the Selling
          Agents' option by giving 30 days written notice to the Company and by
          the Company, at its option, by giving 30 days written notice to the
          Selling Agents.

<PAGE>

     (9)  REPRESENTATION AND INDEMNITIES TO SURVIVE DELIVERY. The respective
          indemnities, agreements, representations, and covenants of the Company
          and the Selling Agents set forth in this Agreement shall remain in
          full force and effect, and shall survive delivery of and payment for,
          the Shares.

     (10) EFFECT OF TERMINATION OF AGREEMENT. If this Agreement shall be
          terminated pursuant to the provisions of Section 2 or Section 8
          hereof, the Company shall then be under no liability to the Selling
          Agents, except for the payment of commissions as provided in Section 2
          and the indemnities provided for in Section 7 hereof. Upon termination
          hereof, the Selling Agents shall immediately cease and desist in all
          selling efforts relating to the Shares.

     (11) NOTICES. All requests, notices, and consents required or permitted to
          be given hereby shall be in writing, and shall be delivered either
          personally, by facsimile, or by courier service. Such notices, etc.,
          given by facsimile shall be deemed delivered at the time shown on the
          confirmation report of the sender's facsimile machine, and shall be
          deemed given when received by the intended recipient if sent by either
          other method. Unless a party's delivery address or facsimile number is
          changed by written notice given as set forth in this section, notices,
          etc. shall be delivered to the Selling Agents at the addresses set
          forth at the head of this Agreement or (206) 726-1613 for the Advisor
          and (206) 271-3550 for the Managing Dealer, and, shall be sent to the
          Company at 1840 Gateway Drive, Suite 200, Foster City, California
          94404, or (650) 261-9468 with copies to David L. Kagel, Esq., 1801
          Century Park East, 20th Floor, Los Angeles, California 90067 and (310)
          553-9009.

     (12) ARBITRATION. Any and all claims or disputes arising out of or under
          this Agreement shall be determined and settled by arbitration to be
          conducted in San Francisco, California by and under the auspices of
          the American Arbitration Association. The award of the arbitrators may
          be entered as a judgment in accordance with California law.

     (13) SUCCESSORS, ET CETERA. This Agreement shall be binding upon and inure
          solely to the benefit of the Selling Agents and the Company; neither
          party may assign its rights or responsibilities under this Agreement
          without the prior written consent of the other party. No purchaser of
          any of the Shares shall be construed a beneficiary, successor or
          assign by reason merely of such purchase, and this Agreement shall not
          be construed to be for the benefit of any third party.

     (14) APPLICABLE LAW. This Agreement shall be construed and enforced in
          accordance with the laws of the State of California as applied to
          contracts made and performed wholly within the State of California.

     (15) COURT APPROVAL. This Agreement is subject to approval by the US
          Bankruptcy Court for the Northern District of California. Upon
          execution of this Agreement, the Company will promptly seek the
          approval of the Court to employ the Selling Agents according to the
          terms of this Agreement. The Selling Agents shall not offer the Shares
          for sale until receipt of such Court approval.

     (16) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
          between the parties and no amendment, change, modification, or
          alteration of this Agreement shall be valid unless it is in writing
          and signed by the parties hereto.

     (17) CONSTRUCTION. As provided herein and as the context requires, the
          masculine gender shall be deemed to include the feminine and the
          neuter genders and vice versa; and the singular shall be deemed to
          include the plural and vice versa. This Agreement may be executed in
          one or more counterparts, each of which shall be deemed a duplicate
          original and all of which, taken together, shall be deemed a single
          agreement.

<PAGE>

If the foregoing is in accordance with your understanding, please sign and
return to us a counterpart thereof, whereupon this letter and your acceptance
thereof shall constitute a binding agreement between you and the Company.

Very truly yours,

TELEGEN CORPORATION

/s/ JESSICA L STEVENS

Jessica L. Stevens
President/CEO

ACCEPTED:

WMS Financial Planners, Inc.

   /s/ WILLIAM M. SWAYNE                     MARCH 8, 2000
-----------------------------------------  ------------------------------------
Mr. William M. Swayne, II, CFP             Date
President

Pacific West Securities, Inc.

   /s/ LORRETTA ELDERKIN                     MARCH 8, 2000
-----------------------------------------  ------------------------------------
Ms. Lorretta Elderkin                      Date
President

<PAGE>

                                    EXHIBIT 1

                                 Form of Warrant

     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

                         VOID AFTER ___________________

Dated: __________________

Subject to the terms and conditions set forth herein, ________________________
(the "Holder"), or registered assigns, is entitled to purchase from TELEGEN
CORPORATION, a California corporation (the "Company"), at any time from date
hereof and on or before the date of termination of this Warrant, up to
_________________ fully paid and non-assessable shares of the Company's Common
Stock, without par value, at the price of US$8.00 per share. The initial
purchase price of US$8.00 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 post reorganization 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, three (3) years 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 TLGNQ or successor
symbol or as determined by the Company's Board of Directors in good faith, as
applicable.

     "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.

<PAGE>

     "PRINCIPAL EXECUTIVE OFFICE" means the Company's office at 1840 Gateway
Drive, Suite 200, San Mateo, California, 94404, 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.

     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.

<PAGE>

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 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

<PAGE>

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  SPLITS AND COMBINATIONS. If the Company at any time subdivides any of
its outstanding shares of Common Stock into a greater number of shares, the
Exercise Price in effect immediately prior to such subdivision shall be
proportionately reduced, and, conversely if the outstanding shares of Common
Stock 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.

     4.2  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.

     4.3  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

<PAGE>

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 1840 Gateway Drive, Suite 200, San Mateo, California 94404, attention:
Chief Executive Officer, telephone (650) 261-9400, facsimile (650) 261-9468,
with a copy (which will not constitute notice) to David L. Kagel, Esq., 1801
Century Park East, 25th Floor, Los Angeles, California 90067, telephone (310)
553-9009, facsimile (310) 553-9693. 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.

     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  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.

     5.8  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.

     5.9  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 _______________________.

TELEGEN CORPORATION

By:
     -------------------------------
     Jessica L. Stevens
     Chief Executive Officer

<PAGE>

                              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))

<PAGE>

                                    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:
       ----------------------------

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.

<PAGE>

                                    EXHIBIT B

                      INVESTMENT REPRESENTATION CERTIFICATE

Holder:
                  -----------------------------------------------------------

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 "Holder") represents to the Company as
follows:

     (a)  The Holder 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 Holder 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 Holder 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 Holder's investment intent as expressed herein. In this connection, the
Holder understands that, in the view of the Securities and Exchange Commission
(the "Commission"), the statutory basis for such exemption may be unavailable if
the Holder'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 Holder 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 Holder
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 Holder 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 Holder 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 Holder may be precluded from selling the
Securities under Rule 144 even if the one-year minimum holding period had been
satisfied; and

     (f)  The Holder 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:
      -------------------------------

                                          HOLDER:

                                          ------------------------------------

<PAGE>

                                    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.<PAGE>

Ex-10.36
Selling Agreement by and between the Company and
WMS Financial Planners, Inc. and Pacific West Securities, Inc.
dated March 20, 2000

                                  EXHIBIT 10.36

                                SELLING AGREEMENT

                               TELEGEN CORPORATION
                                   $25,000,000
                     Up to 2,500,000 Shares of Common Stock

March 20, 2000

Mr. William M. Swayne, II, CFP
President
WMS Financial Planners, Inc.
2209 Eastlake Ave East,
Seattle, WA 98102

Ms. Lorretta Elderkin
President
Pacific West Securities, Inc.
1201 SW 7th Street, Suite 108,
Renton, WA 98057

Ladies and Gentlemen:

Telegen Corporation, a California corporation, (the "Company") proposes to
offer, sell and issue in the aggregate up to 2,500,000 shares (the "Shares") of
Common Stock, no par value, (the "Offering") at a price of (i) $10.00 per Share
for the first $10,000,000 raised (the "$10 Shares"), (ii) a price per share to
be determined by market conditions jointly by the Selling Agents and the Company
(the "Second Offering Exercise Price"), for the next $10,000,000 raised (the
"Second Offering Shares") and (iii) a price per share to be determined by market
conditions jointly by the Selling Agents and the Company (the "Third Offering
Exercise Price"), for the last $5,000,000 raised (the "Third Offering Shares"),
for total gross proceeds of up to $25,000,000. The Offering shall commence with
the $10 Shares being offered and sold, and thereafter the Second Offering Shares
shall be offered and sold, and thereafter the Third Offering Shares shall be
offered and sold. The Company hereby engages Pacific West Securities, Inc.
("PW") as its managing broker-dealer (the "Managing Dealer") and WMS Financial
Planners, Inc. ("WMS") as its investment banker (the "Adviser") and PW and WMS
jointly as its agents (PW and WMS are referred to herein as the "Selling
Agents") to offer, offer for sale, and sell the Offering, subject to all of the
terms, provisions, and conditions of this Agreement and pursuant to all of the
terms, provisions, and conditions set forth in a confidential Disclosure
Memorandum of the Company to be issued on or about March 15, 2000 (the
"Memorandum"). Further, the Offering shall be conducted on a "best efforts
basis.

        (1)     REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
                represents and warrants to the Selling Agents that:

                a.      The Company will carefully and diligently prepare the
                        Memorandum and all exhibits thereto, all in compliance
                        with Rule 506 of Regulation D under the Securities Act
                        of 1933, as amended (the "Act"), and with applicable
                        provisions of the securities laws of the various states
                        in which it is contemplated that the Shares will be
                        offered. The Memorandum shall be supplemented upon the
                        sale of the $10 Shares to so disclose such sale and the
                        offering of the Second Offering Shares and shall be
                        supplemented upon the sale of the Second Offering Shares
                        to so disclose such sale and the offering of the Third
                        Offering Shares.

                b.      The Memorandum, as of the date issued, will conform in
                        all material respects to the applicable provisions of
                        the Act and the rules and regulations promulgated
                        thereunder (the "Rules and Regulations"), and, to the
                        best of the Company's knowledge, will not contain any
                        untrue

<PAGE>

                        statement of a material fact or omit to state any
                        material fact required to be stated therein or necessary
                        to make the statements therein not misleading.

                c.      From the effective date of the Memorandum and until the
                        Termination Date (as defined below), and except as
                        contemplated in the Memorandum, the Company shall
                        promptly prepare a supplement to the Memorandum advising
                        the Managing Dealer and Selling Agents of any of the
                        following events, if they occur: If the Company incurs
                        any material liabilities or obligations, direct or
                        contingent, not in the ordinary course of its business,
                        or if the Company enters into any material transaction,
                        not in the ordinary course of its business, or sustains
                        any loss or damage to its properties, whether or not
                        insured, which would be material and adverse to the
                        business of the Company; or if there occurs any material
                        adverse change in the capital stock or debt of the
                        Company, or any material adverse change (whether or not
                        in the ordinary course of business) in the condition,
                        financial or otherwise, or earnings, affairs, or
                        business of the Company. Prior to the Termination Date,
                        the Company shall not declare any dividends or
                        distributions in respect of its capital stock or change
                        its Articles of Incorporation or bylaws in any way that
                        adversely affects the Shares.

                d.      The Shares shall be duly authorized and, upon receipt by
                        the Company of the consideration for the Shares, shall
                        be validly issued, fully paid and nonassessable Shares
                        of the Company, and shall conform to the description
                        thereof contained in the Memorandum.

        (2)     EMPLOYMENT OF THE SELLING AGENT.

                a.      Subject to the terms and conditions herein set forth,
                        the Company hereby employs the Selling Agents, for the
                        purpose of offering and selling the Shares, as provided
                        in this Agreement on a best efforts basis. The Company
                        employs the Selling Agents as its agent commencing as of
                        the date hereof and until the Termination Date or June
                        30, 2000, whichever date is earliest, (which date may be
                        extended by written agreement between the Selling Agents
                        and the Company until September 30, 2000) which date, or
                        shortened or extended date, is referred to herein as the
                        "Termination Date." The Selling Agents agree to use
                        their best efforts to sell the Shares as the Company's
                        agent. It is understood and agreed that there is no firm
                        commitment on the part of the Selling Agents to purchase
                        any of the Shares.

                b.      The Selling Agents shall offer and sell the Shares
                        hereunder at prices per Share as set forth in the first
                        paragraph of this Agreement and on the terms of sale set
                        forth in the Memorandum. Subject to the receipt by the
                        Company of the proceeds from the sale thereof, the
                        Selling Agents shall be entitled to a commission as
                        follows:

                        (i)     A commission of eight percent (8%) of the gross
                                proceeds of the sale of the Shares, payable by
                                the Company to the Selling Agents in cash or
                                Shares of Common Stock priced at (i) $10.00 per
                                share for sales of the $10 Shares, (ii) the
                                Second Offering Exercise Price for the Second
                                Offering Shares and (iii) the Third Offering
                                Exercise Price for the Third Offering Shares, or
                                any combination thereof, at the option of the
                                Selling Agents.

                        (ii)    An adviser fee of two and one half percent
                                (2.5%) of the gross proceeds of the sale of the
                                Shares, payable by the Company to WMS as
                                Advisor. This commission shall be payable as
                                follows: one percent (1%) in cash or Shares of
                                Common Stock priced at (i) $10.00 per share for
                                sales of the $10 Shares, (ii) the Second
                                Offering Exercise Price for the Second Offering
                                Shares and (iii) the Third Offering Exercise
                                Price for the Third Offering Shares, or any
                                combination thereof, at the option of WMS, and
                                one and one half percent (1.5%) in Shares of
                                Common Stock priced at (i) $10.00 per share for
                                sales of the $10 Shares, (ii) the Second
                                Offering Exercise Price for the Second Offering
                                Shares and (iii) the Third Offering Exercise
                                Price for the Third Offering Shares; plus

                        (iii)   A commission of two and one half percent (2.5%)
                                of the gross proceeds of the sale of the Shares,
                                payable by the Company to PW as Managing Dealer.
                                This commission shall be payable as follows: one
                                percent (1%) in cash or Shares of Common Stock
                                priced at (i) $10.00 per share for sales of the
                                $10 Shares, (ii) the Second Offering Exercise
                                Price for the Second Offering Shares and (iii)
                                the Third Offering Exercise Price for the Third
                                Offering Shares, or any combination thereof, at
                                the option of PW, and one and one half percent

<PAGE>

                                (1.5%) in Shares of Common Stock priced at (i)
                                $10.00 per share for sales of the $10 Shares,
                                (ii) the Second Offering Exercise Price for the
                                Second Offering Shares and (iii) the Third
                                Offering Exercise Price for the Third Offering
                                Shares; plus

                        (iv)    A commission payable by the Company to the
                                Selling Agents in three (3) year warrants
                                substantially in the form attached hereto as
                                Exhibit 1 exercisable at (i) $10.00 per share
                                for sales of the $10 Shares, (ii) the Second
                                Offering Exercise Price for the Second Offering
                                Shares and (iii) the Third Offering Exercise
                                Price for the Third Offering Shares, at the rate
                                of one (1) warrant for every twenty (20) Shares
                                sold in the Offering (a maximum of 125,000
                                warrants if the full Offering is sold); plus

                        (v)     A commission payable by the Company to PW as
                                Managing Dealer in three (3) year warrants
                                substantially in the form attached hereto as
                                Exhibit 1 exercisable at (i) $10.00 per share
                                for sales of the $10 Shares, (ii) the Second
                                Offering Exercise Price for the Second Offering
                                Shares and (iii) the Third Offering Exercise
                                Price for the Third Offering Shares, at the rate
                                of one (1) warrant for every forty (40) Shares
                                sold in the Offering (a maximum of 62,500
                                warrants if the full Offering is sold); plus

                        (vi)    An adviser fee payable by the Company to WMS as
                                Advisor in three (3) year warrants substantially
                                in the form attached hereto as Exhibit 1
                                exercisable at (i) $10.00 per share for sales of
                                the $10 Shares, (ii) the Second Offering
                                Exercise Price for the Second Offering Shares
                                and (iii) the Third Offering Exercise Price for
                                the Third Offering Shares, at the rate of one
                                (1) warrant for forty (40) Shares sold in the
                                Offering (a maximum of 62,500 warrants if the
                                full Offering is sold).

                        Commissions payable hereunder shall be paid by the
                        Company within fifteen (15) days of receipt by the
                        Company of such proceeds and only following receipt of
                        an executed Subscription Agreement and Suitability
                        Questionnaire from each of the purchaser(s) thereof. All
                        commissions set forth in the preceding subsections shall
                        be payable regardless of which of the Selling Agents or
                        their sub-agents sells any particular Shares. Subject to
                        the limitations of Section 2(c) hereof, allocation of
                        all commissions payable under subparagraphs (i) and (iv)
                        of this paragraph shall be at the discretion of the
                        Selling Agents, and the Company shall have no interest
                        or responsibility in determining such allocation.

                        It is understood and acknowledged by the Selling Agents
                        that receipt of the proceeds by the Company from sale of
                        Shares and payment of commissions are contingent upon an
                        order of the U. S. Bankruptcy Court for the Northern
                        District of California (the "Court") confirming the
                        Company's Plan of Reorganization (the "Plan"). For all
                        purposes of this Agreement, receipt by the Company of
                        the proceeds of sale shall mean actual receipt by the
                        Company (as to the Shares, not deposit of proceeds into
                        the escrow fund pursuant to an Escrow Agreement), and
                        availability of such proceeds for use by the Company as
                        described in the "Use of Proceeds" section of the
                        Memorandum.

                c.      The Managing Dealer may appoint other licensed
                        broker-dealers to be employed as the non-exclusive
                        agents of the Company to offer and sell the Shares, upon
                        fulfillment of the following conditions:

                        (i)     The receipt of the written consent of the
                                Company, which consent shall not be unreasonably
                                withheld;

                        (ii)    Delivery to the Company of a Verified Statement,
                                executed under penalty of perjury, (i) making
                                the same representations regarding its licensing
                                status as made by the Selling Agents in
                                subparagraphs (5) a and (5) b hereof and (ii)
                                that such person is a disinterested person with
                                respect to the Debtor and does not hold or
                                represent an interest adverse to the estate
                                within the meaning of Section 327 of the U.S.
                                Bankruptcy Code.

                        Except as set forth in this subparagraph (c), the
                        Selling Agents may not appoint or employ any person or
                        other entity as their agent or subagent or utilize the
                        services of any other broker or dealer to participate in
                        the sale of the Shares as a soliciting or participating
                        dealer or otherwise.
<PAGE>

                        Any such sub-agents or other broker-dealers appointed by
                        the Selling Agents shall be appointed solely at the
                        expense of the Selling Agents; the Company shall have no
                        liability to such persons, and the Selling Agents shall
                        indemnify and hold the Company harmless therefrom.
                        Subject to the limitations in the preceding sentence,
                        the Selling Agents may assign any portion of their
                        commission payable under this Agreement to any subagent,
                        broker-dealer, finder or other party by providing the
                        Company with written notice of assignment stating the
                        portion of the commission to be paid and the name,
                        address, phone number and tax ID number of the party to
                        whom the assignment is made.

                d.      All proceeds received from the sale of the Shares shall
                        be placed in an escrow, pursuant to an Escrow Agreement
                        between the Company, PW and the Escrow, payable to the
                        Company upon the confirmation of the Plan by the Court.
                        In the event that the Company is unable to confirm the
                        Plan by June 30, 2000 (or September 30, 2000, if
                        extended by the Company and the Selling Agents), all
                        proceeds from this Offering shall be returned to the
                        buyers of the Shares and the Offering will terminate.

                e.      It is understood and agreed that the Company, in its
                        sole discretion, may (i) terminate the Offering at any
                        time upon 30 days written notice, and (ii) reject any
                        subscription for the Shares presented to it by the
                        Selling Agent with such objection, if any, occurring
                        within 30 days of receipt by Debtor.

                f.      Each potential investor in the Offering shall be
                        required to complete a Suitability Questionnaire in a
                        form acceptable to the Company, which shall be provided
                        to the Company upon the sale of the Shares to the
                        investor. The Company shall determine, in its sole
                        discretion, whether the potential investor qualifies as
                        an Accredited Investor as defined in Rule 501(a) of
                        Regulation D under the Act. If a potential investor does
                        not qualify as an Accredited Investor as defined in Rule
                        501(a) of Regulation D under the Act, his investment
                        will be promptly refunded. The Company may also reject
                        any investor in the Offering for any reason whatsoever.

                g.      Certificates for Shares, registered in such names as
                        shall be provided for in the Subscription Agreements
                        executed by the purchasers thereof, sold by the Selling
                        Agents, shall be delivered to the Selling Agents as
                        promptly as practicable after receipt by the Company of
                        the proceeds of such sales.

                h.      The Company shall have the right, subject to the
                        approval of the Selling Agents, to compensate finders
                        who refer potential investors in the Offering to the
                        Company or the Selling Agents. Any fees or commissions
                        paid by the Company to such finders shall reduce the
                        fees and commissions due and payable to the Selling
                        Agents pursuant to this Section 2 by an equal amount,
                        such that the total fees and commissions payable to the
                        finder and the Selling Agents shall together equal the
                        amount payable under this Section 2.

        (3)     COVENANTS OF THE COMPANY. The Company covenants as follows:

                a.      To make no amendment or supplement to the Memorandum of
                        which the Selling Agents have not been furnished with a
                        copy prior to the use thereof; and to advise the Selling
                        Agents promptly of the issuance of any stop order or any
                        similar order by the Securities and Exchange Commission
                        or any state securities commission or agency.

                b.      To furnish to the Selling Agents without charge copies
                        of the Memorandum, including all exhibits thereto, and
                        all amendments and supplements to any such documents, in
                        each case as soon as available and in such reasonable
                        quantities as the Selling Agents may from time to time
                        request.

                c.      If any event shall have occurred as a result of which
                        the Memorandum, as then amended or supplemented, would
                        include any untrue statement of a material fact, or omit
                        to state any material fact necessary in order to make
                        the statements therein not misleading, to notify the
                        Selling Agents and, upon the request of the Selling
                        Agents, to prepare and furnish without charge to the
                        Selling Agents as many copies of a supplement or
                        amendment to the Memorandum which will correct such
                        statement or omission as the Selling Agents may from
                        time to time reasonably request.

<PAGE>

        (4)     EXPENSES. Whether or not the transactions contemplated hereby
                are consummated or if this Agreement is terminated, the Company
                shall pay all costs and expenses incurred by it incident to the
                performance of the obligations of the Company hereunder,
                including the fees and expenses of the Company's counsel and the
                costs and expenses incident to the preparation and duplication
                of the Memorandum. The Selling Agents shall bear their own
                expenses in connection with the Offering.

        (5)     REPRESENTATIONS AND WARRANTIES OF THE SELLING AGENTS. The
                Selling Agents hereby represents and warrants that:

                a.      PW is, and at all relevant times will be, a member in
                        good standing of the National Association of Securities
                        Dealers, Inc.

                b.      PW is, and at all relevant times will be, a registered
                        broker-dealer with the Securities and Exchange
                        Commission and licensed and in good standing under the
                        laws of each state in which it will offer or sell Shares
                        or is exempt from registration in each such state.

                c.      Each person employed or appointed by the Selling Agents
                        to offer or sell the Shares is and will be duly
                        registered with the Securities and Exchange Commission,
                        a member in good standing of the NASD, and is and will
                        be licensed and in good standing under the laws of each
                        state in which it will offer or sell the Shares.

                d.      Prior to the date of the Memorandum, the Selling Agents
                        have not made any offers for sale of the Shares.

        (6)     COVENANTS OF SELLING AGENTS. The Selling Agents covenant that:

                a.      Each person to whom the Selling Agents will sell the
                        Shares shall be an Accredited Investor (as defined in
                        Rule 501(a) of Regulation D under the Act). The Selling
                        Agents shall require that each potential investor shall
                        fill out a Suitability Questionnaire, which shall be
                        promptly provided to the Company.

                b.      The Selling Agents will offer the Shares in compliance
                        with Rule 501(c) and 506 of Regulation D under the Act.

                c.      The Selling Agents will conduct the Offering in
                        compliance with all relevant provisions of state
                        securities laws.

                d.      The Selling Agents will promptly advise the Company of
                        the states into which they intend to offer the Shares
                        and they shall not offer the Shares in those states
                        unless and until the Company has determined that the
                        Offering, as applicable, complies with all applicable
                        state securities laws.

                e.      The Selling Agents will promptly furnish the Company
                        with a complete list of all persons or entities to whom
                        the Shares have been offered or sold together with the
                        completed and executed Subscription Agreements and
                        Suitability Questionnaires for each purchaser of the
                        Shares.

                f.      Neither the Selling Agents nor any officer or other
                        person employed by them will provide any information or
                        make any representations to offerees of the Shares,
                        other than such information and representations as are
                        either contained in the Memorandum or are not
                        inconsistent with information set forth in the
                        Memorandum.

                g.      In the event either of them learns of any circumstances
                        or facts which it believes would make the Memorandum
                        inaccurate or misleading as to any material fact, such
                        Selling Agent shall immediately bring such circumstances
                        or facts to the attention of the Company.

        (7)     INDEMNIFICATION.

                a.      The Company shall indemnify and hold harmless the
                        Selling Agents and each person, if any, who controls the
                        Selling Agents within the meaning of the Act, jointly
                        and severally, against any and all losses, claims,
                        damages, liabilities, costs, and expenses (including
                        reasonable attorneys' and

<PAGE>

                        experts' fees), to which the Selling Agents or such
                        controlling person may become subject, under the Act or
                        otherwise, insofar as such losses, claims, damages,
                        liabilities, costs, and expenses (including reasonable
                        attorneys' or experts' fees), or actions in respect
                        thereto, arise out of or are based upon any untrue
                        statement or alleged untrue statement of any material
                        fact contained in the Memorandum, or any amendment or
                        supplement thereto, or arise out of or are based upon
                        the omission or alleged omission to state therein a
                        material fact required to be stated therein or necessary
                        to make the statements therein not misleading; and shall
                        reimburse the Selling Agents and each such controlling
                        person for any reasonable legal or other expenses
                        incurred by such Selling Agents or such controlling
                        person in connection with investigating or defending any
                        such loss, claim, damage, liability, cost, expense, or
                        action; provided, however, that the Company will not be
                        liable in any such case to the extent that any such
                        loss, claim, damage, liability, or expense arises out of
                        or is based upon an untrue statement or alleged untrue
                        statement or omission or alleged omission made in the
                        Memorandum or such amendment or such supplement in
                        reliance upon and in conformity with information
                        furnished to the Company by or on behalf of the Selling
                        Agents.

                b.      Promptly after receipt by an indemnified party under
                        this Section 7 of notice of the commencement of any
                        action, such indemnified party shall, if a claim in
                        respect thereof is to be made against an indemnifying
                        party under this Section 7, notify the indemnifying
                        party of the commencement thereof; but the omission to
                        so notify the indemnifying party shall not relieve it
                        from any liability under this Section 7. In case any
                        such action is brought against any indemnified party,
                        and it notifies an indemnifying party of the
                        commencement thereof, the indemnifying party shall be
                        entitled to participate therein and, to the extent that
                        it may wish, jointly with any other indemnifying party
                        similarly notified, assume the defense thereof, with
                        counsel who shall be to the reasonable satisfaction of
                        such indemnified party, and notice from the indemnifying
                        party to such indemnified party of its election so to
                        assume the defense thereof, the indemnifying party shall
                        not be liable to such indemnified party under this
                        Section 7 for any legal or other expenses subsequently
                        incurred by such indemnified party in connection with
                        the defense thereof other than reasonable costs of
                        investigation.

        (8)     EFFECTIVE DATE AND TERMINATION. This Agreement shall become
                effective on the date this Agreement is approved by the Court or
                upon such later date as the Selling Agents and the Company shall
                agree in writing. This Agreement may be terminated by the
                Selling Agents, at the option of the Selling Agent by giving 30
                days written notice to the Company and by the Company, at its
                option, by giving 30 days written notice to the Selling Agents.

        (9)     REPRESENTATION AND INDEMNITIES TO SURVIVE DELIVERY. The
                respective indemnities, agreements, representations, and
                covenants of the Company and the Selling Agents set forth in
                this Agreement shall remain in full force and effect, and shall
                survive delivery of and payment for, the Shares.

        (10)    EFFECT OF TERMINATION OF AGREEMENT. If this Agreement shall be
                terminated pursuant to the provisions of Section 2 or Section 8
                hereof, the Company shall then be under no liability to the
                Selling Agents, except for the payment of commissions as
                provided in Section 2 and the indemnities provided for in
                Section 7 hereof. Upon termination hereof, the Selling Agents
                shall immediately cease and desist in all selling efforts
                relating to the Shares.

        (11)    NOTICES. All requests, notices, and consents required or
                permitted to be given hereby shall be in writing, and shall be
                delivered either personally, by facsimile, or by courier
                service. Such notices, etc., given by facsimile shall be deemed
                delivered at the time shown on the confirmation report of the
                sender's facsimile machine, and shall be deemed given when
                received by the intended recipient if sent by either other
                method. Unless a party's delivery address or facsimile number is
                changed by written notice given as set forth in this section,
                notices, etc. shall be delivered to the Selling Agents at the
                addresses set forth at the head of this Agreement or (206)
                726-1613 for the Adviser and (206) 271-3550 for the Managing
                Dealer, and, shall be sent to the Company at 1840 Gateway Drive,
                Suite 200, Foster City, California 94404, or (650) 261-9468 with
                copies to David L. Kagel, Esq., 1801 Century Park East, 20th
                Floor, Los Angeles, CA 90067 and (310) 553-9693.

        (12)    ARBITRATION. Any and all claims or disputes arising out of or
                under this Agreement shall be determined and settled by
                arbitration to be conducted in San Francisco, California by and
                under the auspices of the American Arbitration Association. The
                award of the arbitrators may be entered as a

<PAGE>

                judgment in accordance with California law.

        (13)    SUCCESSORS, ET CETERA. This Agreement shall be binding upon and
                inure solely to the benefit of the Selling Agents and the
                Company; neither party may assign its rights or responsibilities
                under this Agreement without the prior written consent of the
                other party. No purchaser of any of the Shares shall be
                construed a beneficiary, successor or assign by reason merely of
                such purchase, and this Agreement shall not be construed to be
                for the benefit of any third party.

        (14)    APPLICABLE LAW. This Agreement shall be construed and enforced
                in accordance with the laws of the State of California as
                applied to contracts made and performed wholly within the State
                of California.

        (15)    COURT APPROVAL. This Agreement is subject to approval by the
                U.S. Bankruptcy Court for the Northern District of California.
                Upon execution of this Agreement, the Company will promptly seek
                the approval of the Court to employ the Selling Agents according
                to the terms of this Agreement. The Selling Agents shall not
                offer the Shares for sale until receipt of such Court approval.

        (16)    PRIOR AGREEMENT. This Agreement supersedes and modifies the
                prior Selling Agreement entered into between the Company and the
                Selling Agents dated March 8, 2000.

        (17)    ENTIRE AGREEMENT. This Agreement constitutes the entire
                agreement between the parties and no amendment, change,
                modification, or alteration of this Agreement shall be valid
                unless it is in writing and signed by the parties hereto.

        (18)    CONSTRUCTION. As provided herein and as the context requires,
                the masculine gender shall be deemed to include the feminine and
                the neuter genders and vice versa; and the singular shall be
                deemed to include the plural and vice versa. This Agreement may
                be executed in one or more counterparts, each of which shall be
                deemed a duplicate original and all of which, taken together,
                shall be deemed a single agreement.

If the foregoing is in accordance with your understanding, please sign and
return to us a counterpart thereof, whereupon this letter and your acceptance
thereof shall constitute a binding agreement between you and the Company.

Very truly yours,

TELEGEN CORPORATION

/s/ JESSICA L. STEVENS

Jessica L. Stevens
President/CEO

ACCEPTED:

WMS Financial Planners, Inc.

   /S/ WILLIAM M. SWAYNE                         MARCH 20, 2000
------------------------------------------     ---------------------------------
Mr. William M. Swayne, II, CFP                 Date
President

Pacific West Securities, Inc.

   /S/ LORRETTA ELDERKIN                         MARCH 20, 2000
------------------------------------------     ---------------------------------
Ms. Lorretta Elderkin                          Date
President

<PAGE>

                                    EXHIBIT 1

                                 Form of Warrant

        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

                         VOID AFTER ___________________

Dated: __________________

Subject to the terms and conditions set forth herein, ________________________
(the "Holder"), or registered assigns, is entitled to purchase from TELEGEN
CORPORATION, a California corporation (the "Company"), at any time from date
hereof and on or before the date of termination of this Warrant, up to
_________________ fully paid and non-assessable shares of the Company's Common
Stock, without par value, at the price of US$_____ per share. The initial
purchase price of US$_____ 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 post reorganization 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, three (3) years 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 TLGNQ or successor
symbol or as determined by the Company's Board of Directors in good faith, as
applicable.

        "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.

<PAGE>

        "PRINCIPAL EXECUTIVE OFFICE" means the Company's office at 1840 Gateway
Drive, Suite 200, San Mateo, California, 94404, 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.

        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.

<PAGE>

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 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
<PAGE>

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     SPLITS AND COMBINATIONS. If the Company at any time subdivides
any of its outstanding shares of Common Stock into a greater number of shares,
the Exercise Price in effect immediately prior to such subdivision shall be
proportionately reduced, and, conversely if the outstanding shares of Common
Stock 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.

        4.2     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.

        4.3     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

<PAGE>

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 1840 Gateway Drive, Suite 200, San Mateo, California 94404, attention:
Chief Executive Officer, telephone (650) 261-9400, facsimile (650) 261-9468,
with a copy (which will not constitute notice) to David L. Kagel, Esq., 1801
Century Park East, 25th Floor, Los Angeles, California 90067, telephone (310)
553-9009, facsimile (310) 553-9693. 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.

        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     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.

        5.8     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.

        5.9     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 ______________________.

TELEGEN CORPORATION

By:
     -------------------------------
     Jessica L. Stevens
     Chief Executive Officer

<PAGE>

                              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))

<PAGE>

                                    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:
       ----------------------------

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.

<PAGE>

                                    EXHIBIT B

                      INVESTMENT REPRESENTATION CERTIFICATE

Holder:
                  ---------------------------------------------------

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 "Holder") represents to the Company as
follows:

        (a)     The Holder 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
Holder 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 Holder 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 Holder's investment intent as expressed herein. In this connection, the
Holder understands that, in the view of the Securities and Exchange Commission
(the "Commission"), the statutory basis for such exemption may be unavailable if
the Holder'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 Holder 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 Holder
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 Holder 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 Holder 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 Holder may be precluded
from selling the Securities under Rule 144 even if the one-year minimum holding
period had been satisfied; and

        (f)     The Holder 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:
      -------------------------------

                                            HOLDER:

                                            --------------------------------

<PAGE>

                                    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.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00018-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00018-of-00352.parquet"}]]