Document:

<PAGE>

EX-10.30
Convertible Promissory Note Issued to an Individual

                                  EXHIBIT 10.30

                       FORM OF CONVERTIBLE PROMISSORY NOTE

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THESE SECURITIES
HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH,
THE DISTRIBUTION THEREOF. THESE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED, OR
TRANSFERRED UNLESS (I) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT IS IN
EFFECT AS TO THESE SECURITIES OR (II) THERE IS AN OPINION OF COUNSEL, REASONABLY
SATISFACTORY TO THE CORPORATION, THAT AN EXEMPTION THEREFROM IS AVAILABLE.

THIS CONVERTIBLE PROMISSORY NOTE IS SUBJECT TO TRANSFERABILITY RESTRICTIONS
PURSUANT TO SECTION 7 HEREIN AND SHALL NOT BE TRANSFERRED BY THE COMPANY UNLESS
THE HOLDER HEREOF COMPLIES THEREWITH. ANY ATTEMPTED TRANSFER OF SECURITIES NOT
IN COMPLIANCE WITH SUCH SECTION 7 SHALL BE NULL AND VOID.

                               TELEGEN CORPORATION

                           Convertible Promissory Note

US$225,000                                              Redwood City, California
                                                                   July 24, 1998

     FOR VALUE RECEIVED, TELEGEN CORPORATION, a California corporation (together
with its successors and assigns, the "Company"), promises to pay to the order of
R. S. Kripalani (the "Holder"), (i) an amount (the "Face Value") of US$225,000
plus (ii) simple interest on the unpaid balance at the time such interest is
due. Interest on this Note shall be paid at a rate equal to Six Percent (6%) per
annum and shall be payable one year from the date hereof. Payment of all amounts
due hereunder shall be made by wire transfer, subject to adjustment in certain
events as more fully set forth in Section 2 herein.

     This Note is issued pursuant to that certain Satisfaction and Release
Agreement dated as of July 24, 1998 (the "Agreement"), between the Company and
the Holder.

     The following is a statement of the rights of the Holder and the conditions
to which this Note is subject, to which the Holder, by acceptance of this Note,
hereby agrees:

     1. REPAYMENT OBLIGATION.

          (a) REPAYMENT. The Company shall be required to repay all principal
and any outstanding interest on this Note in full one (1) year from the date
hereof (the "Repayment Obligation"). The Company shall be entitled to prepay any
portion of the principal or interest at any time before this Note is due in full
after giving the Holder 15 days written notice. During such period, the Holder
shall be entitled to convert this note in accordance with Section 2 herein.

          (b) ADJUSTMENT IN NOTE'S FACE VALUE. Upon any prepayment by the
Company of this Note, the Company will on its books and records reduce the face
value of this Note and send notice of such change to the Holder hereof. To the
extent the Note 's face value is greater than zero on the Company's books and
records, the Company will upon request by the Holder hereof, deliver, a new Note
of like tenor in the principal amount remaining on such Note.

<PAGE>

     2. CONVERSION.

          (a) CONVERSION. Holder shall have the right to convert at any time, in
whole or in part, any portion of outstanding principal or interest on the Note
(a "Portion") to the Company's Common Stock by (i) surrender of this Note,
together with (ii) an executed Notice of Conversion, substantially in the form
of EXHIBIT A attached hereto, at the Company's Principal Executive Office. The
number of shares of Common Stock into which any Portion may be converted shall
be determined by dividing the dollar amount of such Portion by $0.38 (the
"Conversion Price"). No fractional shares or scrip representing fractions of
shares will be issued on conversion, and the number of shares issuable shall be
rounded down to the nearest whole share. The shares of Common Stock issued or
issuable upon conversion of this Note are referred to herein as the "Shares."

          (b) ISSUANCE OF SECURITIES ON CONVERSION. Conversion of this Note, in
whole or in part, shall occur if the Holder elects to convert under Section 2(a)
above. Upon exercise of all or part of this Note by the Holder, 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. As soon as practicable after conversion of
all or part of this Note, the Company at its expense will cause to be issued, in
the name of and delivered to the Holder at the Holder's registered address, a
certificate for the number of shares of the Company's capital stock to which the
Holder shall be entitled on such conversion and a note with identical terms and
conditions as this Note except that the face value of such note shall be for the
outstanding face value of this Note, if any, after conversion hereof. Such
certificate and such note will bear such legends as may be required by
applicable state and federal securities laws in the opinion of legal counsel for
the Company.

          (c) ADJUSTMENT IN CONVERSION PRICE. The Conversion Price shall be
proportionately adjusted upon a reorganization, reclassification, which
substantially affects the Company's entire capital stock, or a stock split or
similar transaction (an "Adjustment Transaction"). The issuance of additional
capital stock, securities which are convertible to the Company's capital stock
(including but not limited to warrants and convertible notes) or the issuance of
capital stock upon conversion of any such convertible securities shall not
constitute an Adjustment Transaction.

     3. RESTRICTIONS ON TRANSFER.

          (a) LEGENDS. Each certificate representing the Shares may be endorsed
with the following legends, and the Holder may not make any transfer of any of
the Shares without first complying with the restrictions on transfer described
in all such legends:

               (i) The 1933 Securities Act legend set forth on the face of this
Note.

               (ii) Any other legends required by applicable state securities
laws.

The Company need not register a transfer of any Shares, and may also instruct
its transfer agent not to register the transfer of such Shares, unless the
conditions specified in this Section 3 are satisfied.

          (b) REMOVAL OF LEGEND AND TRANSFER RESTRICTIONS.

               (i) Any legend endorsed on a certificate pursuant to Section
3(a)(i) and any stop transfer instructions with respect to the Shares evidenced
by such certificate shall be removed and the Company shall issue a certificate
without such legend to the holder thereof if such Shares are registered upon
issuance under the Securities Act, and if such legend may be properly removed
under the terms of Rule 144 promulgated under the Securities Act, or if such
holder provides the Company with an opinion of counsel for such holder
reasonably satisfactory to legal counsel for the Company, to the effect that a
sale, transfer or assignment of such shares may be made without registration.

               (ii) Any legend endorsed on a certificate pursuant to Section
3(a)(ii) and the stop transfer instructions with respect to the Shares evidenced
by such certificate shall be removed upon receipt by the Company of an order of
the appropriate state securities authority authorizing such removal.

     4. PREPAYMENT. The Company may prepay this Note, in whole or in part, in
accordance with Section 1(a) herein.

     5. EVENTS OF DEFAULT; ACCELERATION.

<PAGE>

          (a) So long as this Note is unpaid, each of the following events will
constitute an "Event of Default":

               (i) default in the payment of the principal or interest of this
Note as and when the same shall become due and payable at maturity, by
declaration or otherwise, and continuance of such default for a period of five
days; or

               (ii) an involuntary case or other proceeding shall be commenced
against the Company seeking liquidation, reorganization or other relief with
respect to it or its debts under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or seeking the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of the Company or for any substantial part of the property of the
Company or the winding up or liquidation of the affairs of the Company, and such
case or proceeding shall remain unstayed and undismissed for a period of 60
days, or an order for relief shall be entered against the Company under the
federal bankruptcy laws as now or hereafter in effect; or

               (iii) the Company shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or consent to the entry of an order for relief in an involuntary case
under any such law, or consent to the appointment or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of the Company or for any substantial part of the property of the
Company, or the Company shall make any general assignment for the benefit of
creditors, or shall fail generally to pay its debts as they come due, or shall
take any corporate action to authorize any of the foregoing; or

               (iv) failure on the part of the Company to observe or perform any
of the covenants contained in this Note (other than a failure to make a payment
specified in clause (i) above) or in the Agreement and the continuance of such
failure for a period of 30 days following receipt of notice from the Holder
specifying such covenant and the nature of the Company's non-performance.

          (b) If an Event of Default shall occur, then the Holder may by notice
to the Company (a "Default Notice"), so long as the Event of Default exists, (i)
declare the unpaid principal and accrued interest, if any, of this Note
immediately due and payable without further presentment, demand, protest, or
notice, all of which are hereby waived, and (ii) be entitled from the date of
Event of Default to an additional 2% simple interest on outstanding principal of
this Note.

     6. 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, to it at the last known address appearing on the books of the
Company maintained for such purpose, or (b) if to the Company, to it at 101
Saginaw Drive, Redwood City, California 94063, attention: Chief Executive
Officer, telephone (650) 261-9400, facsimile (650) 261-9468, with a copy (which
will not constitute notice) to Thomas C. DeFilipps, Esq., Wilson Sonsini
Goodrich & Rosati, 650 Page Mill Road, Palo Alto, California 94304, telephone
(650) 493-9300, facsimile (650) 493-6811. Any party hereto may by notice so
given change its address for future notice hereunder. All such notices will be
deemed to have been given (i) upon confirmation of delivery, if sent by
facsimile or (ii) upon delivery, if sent by courier or personal delivery.

     7. TRANSFERABILITY. With respect to any offer, sale or other disposition of
any of this Note or the Shares (collectively, the "Securities"), the Holder will
give written notice to the Company prior thereto, describing briefly the manner
thereof, and, if requested by the Company, a written opinion of the Holder's
counsel to the effect that such offer, sale or other distribution may be
effected without registration or qualification under any federal or state law
then in effect or necessary compliance with any other transferability
restrictions relating thereto . Promptly upon receiving such written notice and
reasonably satisfactory opinion, if so requested, the Company, as promptly as
practicable, shall notify the Holder that the Holder may sell or otherwise
dispose of such Securities. Subject to compliance with applicable state and
federal law and the terms of the notice delivered to the Company, the Holder may
transfer such Securities only by surrendering them to the Company with a duly
executed Assignment Form, substantially in the form attached hereto as EXHIBIT C
and funds sufficient to pay any transfer tax, whereupon the Company will cancel
such Securities and execute and deliver one or more new Securities in the names
and amounts specified in such instrument and, if the Holder's entire interest in
such Securities is not being assigned, in the name of the Holder for the balance
of such interest, unless otherwise specified in the Assignment Form. Any Note
issued upon transfer of this Note shall bear the legends on the face of this
Note. All certificates representing Shares delivered upon transfer of Securities
shall bear the legends required by Section 3. If a determination has been made
pursuant to this Section 7 that the opinion of counsel for the

<PAGE>

Holder is not reasonably satisfactory to the Company, the Company shall so
notify the Holder promptly after such determination has been made. Any attempted
transfer of Securities not in compliance with this Section 7 shall be null and
void.

     8. ASSIGNMENT. The rights and obligations of the Company and the Holder
shall be binding upon and benefit the successors, assigns, heirs,
administrators, and transferees of the parties. The Holder may assign his rights
and obligations hereunder subject to Sections 3 and 7 of this Note. This
provision shall in no way affect the restrictions on transfer contained in
Sections 3 and 7 of this Note. The Company may not assign its rights and
obligations hereunder without the written consent of the Holder unless the
Company enters into a merger, acquisition, sale of substantially all of the
Company's assets or similar change of control transaction.

     9. AMENDMENT AND WAIVER. The rights of the Holder may be amended or waived
upon the written consent of the Company and the Holder.

     10. INTEGRATION: NO SHAREHOLDER RIGHTS. The Agreement and this Note
constitute the full and entire understanding and agreement between the parties
hereto and thereto with regard to the subject matter hereof and thereof, and
supersede any prior or contemporaneous understandings, agreements or
representations between them that relate to the subject matter hereof or
thereof. Nothing contained in this Note shall be construed as conferring upon
the Holder or any other person the right to vote or to consent or to receive
notice as a shareholder in respect of meetings of shareholders for the election
of directors of the Company or any other matters or any rights whatsoever as a
shareholder of the Company; and no dividends or interest shall be payable or
accrued in respect of this Note or the interest represented hereby or the Shares
obtainable hereunder until, and only to the extent that, this Note shall have
been converted.

     11. CALIFORNIA LAW. This Note and the obligations of the Company and the
Holder hereunder shall be governed by and construed in accordance with the laws
of the State of California, as such laws are applied to contracts between
California residents entered into and to be performed entirely within
California.

     12. EXPENSES. The Company shall reimburse reasonable attorney fees incurred
by the Holder in connection with the enforcement of his rights under this Note.

     IN WITNESS WHEREOF, the Company has caused this Note to be executed by its
duly authorized representative on the date first above written.

                           TELEGEN CORPORATION

                           By:  /s/ FRED Y. KASHKOOLI
                              --------------------------------------------------
                                Fred Y. Kashkooli, Chief Executive Officer

<PAGE>

                              SCHEDULE OF EXHIBITS

EXHIBIT A         -   Notice of Conversion (Section 2 (a))

EXHIBIT B         -   Investment Representation Certificate (Section 2 (b))

EXHIBIT C         -   Assignment Form (Section 7)

<PAGE>

                                    EXHIBIT A

                             NOTICE OF EXERCISE FORM

                    (To be executed only upon partial or full
                        conversion of the attached Note)

         The undersigned registered Holder of the attached Note hereby
irrevocably converts $__________ in face value to Common Stock of Telegen
Corporation at the Conversion Price and on the terms and conditions specified in
the attached Note.

         The undersigned requests that a certificate (or ___________certificates
in denominations of ___________ shares) for the shares of Common Stock of
Telegen Corporation hereby received 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 Note, that a new Note of like tenor for the number of shares of Common
Stock of Telegen Corporation not being purchased hereunder be issued in the name
of and delivered to (circle one) (a) the undersigned or (b)____________________,
whose address is _______________________________________.

Dated: _________________________, 199_

                           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 Note in
                  every particular, without alteration or enlargement or any
                  change whatever.

<PAGE>

                                    EXHIBIT B

                      INVESTMENT REPRESENTATION CERTIFICATE

Purchaser:
                  --------------------------------------------------------------

Company:          Telegen Corporation, a California corporation

Security:         Common Stock

Amount:
                  --------------------------------------------------------------

Date:
                  --------------------------------------------------------------

     In connection with the purchase of the above-listed securities (the
"Securities"), the undersigned (the "Purchaser") represents to the Company as
follows:

          (a) The Purchaser is aware of the Company's business affairs and
financial condition, and has acquired sufficient information about the Company
to reach an informed and knowledgeable decision to acquire the Securities. The
Purchaser is purchasing the Securities for its own account for investment
purposes only and not with a view to, or for the resale in connection with, any
"distribution" thereof for purposes of the Securities Act of 1933, as amended
(the "Securities Act");

          (b) The Purchaser understands that the Securities may have not been
registered under the Securities Act in reliance upon a specific exemption
therefor, which exemption depends upon, among other things, the bona fide nature
of the Purchaser's investment intent as expressed herein. In this connection,
the Purchaser understands that, in the view of the Securities and Exchange
Commission (the "Commission"), the statutory basis for such exemption may be
unavailable if the Purchaser's representation was predicated solely upon a
present intention to hold these Securities for the minimum capital gains period
specified under tax statutes, for a deferred sale, for or until an increase or
decrease in the market price of the Securities, or for a period of one year or
any other fixed period in the future;

          (c) The Purchaser further understands that the Securities must be held
indefinitely unless subsequently registered under the Securities Act or unless
an exemption from registration is otherwise available. In addition, the
Purchaser understands that the certificate evidencing the Securities will be
imprinted with the legend referred to in the Warrant under which the Securities
are being purchased unless there exists an effective registration statement for
such securities;

          (d) The Purchaser is aware of the provisions of Rule 144, promulgated
under the Securities Act, which, in substance, permit limited public resale of
"restricted securities" acquired, directly or indirectly, from the issuer
thereof (or from an affiliate of such issuer), in a non-public offering subject
to the satisfaction of certain conditions, if applicable, including, among other
things: (i) the availability of certain public information about the Company;
(ii) the resale occurring not less than one (1) year after the party has
purchased and paid for the securities to be sold; (iii) the sale being made
through a broker in an unsolicited "broker's transaction" or in transactions
directly with a market maker (as said term is defined under the Securities
Exchange Act of 1934) and the amount of securities being sold during any
three-month period not exceeding the specified limitations stated therein;

          (e) The Purchaser further understands that at the time it wishes to
sell the Securities there may be no public market upon which to make such a
sale, and that, even if such a public market upon which to make such a sale then
exists, the Company may not be satisfying the current public information
requirements of Rule 144, and that, in such event, the Purchaser may be
precluded from selling the Securities under Rule 144 even if the one-year
minimum holding period had been satisfied; and

<PAGE>

          (f) The Purchaser further understands that in the event all of the
requirements of Rule 144 are not satisfied, registration under the Securities
Act, compliance with Regulation A, or some other registration exemption will be
required; and that, notwithstanding the fact that Rule 144 is not exclusive, the
staff of the Commission has expressed its opinion that persons proposing to sell
private placement securities other than in a registered offering and otherwise
than pursuant to Rule 144 will have a substantial burden of proof in
establishing that an exemption from registration is available for such offers or
sales, and that such persons and their respective brokers who participate in
such transactions do so at their own risk.

Date: ___________________, 199_

                                   PURCHASER:

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

<PAGE>

                                    EXHIBIT C

                                 ASSIGNMENT FORM

      (To be executed only upon the assignment of the attached securities)

         FOR VALUE RECEIVED, the undersigned registered Holder of the attached
securities hereby sells, assigns and transfers unto ______________, whose
address is __________________all of the rights of the undersigned under the
attached securities, with respect to ____________ shares of Common Stock of
Telegen Corporation and, if applicable, if such shares of Common Stock shall not
include all the shares of Common Stock issuable as provided in the attached Note
then a new Note 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: _____________________,  199_

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

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

                         By:
                            ----------------------------------------------------
                              (Signature of Registered Holder)

                         Title:
                               -------------------------------------------------

NOTICE:           The signature to this Assignment must correspond with the name
                  upon the face of the attached certificate of Common Stock or
                  Note being surrendered herewith in every particular, without
                  alteration or enlargement or any change whatever.<PAGE>

Ex-10.31
Employment Agreement with Jessica L. Stevens

                                  EXHIBIT 10.31

                              EMPLOYMENT AGREEMENT

This Employment Agreement (the "Agreement") is entered into as of October 13,
1998, by and between Telegen, a California corporation (the "Company"), and
Jessica L. Stevens (the "Executive").

WHEREAS, the Company desires to employ the Executive as of October 11, 1998, or
such other date as the Executive shall first be employed by the Company (the
"Effective Date"), and the Executive desires to accept employment with the
Company on the terms and conditions set forth below.

NOW, THEREFORE, in consideration of the foregoing recital and the respective
covenants and agreements of the parties contained in this document, the Company
and the Executive agree as follows:

1.      EMPLOYMENT AND DUTIES. The Executive will serve as the President and
Chief Executive Officer of the Company. The duties and responsibilities of the
Executive shall include the duties and responsibilities for the Executive's
corporate offices and positions as set forth in the Company's Bylaws from time
to time in effect and such other duties and responsibilities as the board of
directors of the Company (the "Board of Directors") may from time to time
reasonably assign to the Executive, in all cases to be consistent with the
Executive's corporate offices and positions. The Executive shall report to the
Board at large. The Executive shall perform faithfully the executive duties
assigned to her to the best of her ability.

2.      EMPLOYMENT PERIOD.

        (a)     BASIC RULE. The employment period shall begin upon the Effective
Date and shall continue for a minimum period of five (5) years.

        (b)     TERMINATION

                (i)     DEATH. The Executive's employment will terminate in the
event of her death. The Company shall have no obligation to pay or provide any
compensation or benefits under this Agreement on account of the Executive's
death, or for periods following the Executive's death, other than the Company's
obligations applicable under such circumstance under paragraph 13. The
Executive's rights under the benefit plans of the Company in the event of the
Executive's death will be determined under the provisions of those plans.

                (ii)    CAUSE. The Company may terminate the Executive's
employment only for cause by giving the Executive notice in writing. For all
purposes under this Agreement, "Cause" shall mean (i) willful failure by the
Executive to perform her duties hereunder and not to cure such willful failure
by the Executive, thirty (30) days after receipt of written notice by the
Company of such willful failure, other than a failure resulting from the
Executive's complete or partial incapacity due to physical or mental illness or
impairment (provided that impairment as a result of substance abuse shall be
deemed willful failure hereunder), (ii) a willful act by the Executive which
constitutes gross misconduct and which is demonstrably injurious to the Company,
(iii) a willful breach by the Executive of a material provision of this
Agreement, or (iv) a material and willful violation by the Executive of a
federal or state law or regulation applicable to the business of the Company. No
act, or failure to act, by the Executive shall be considered "willful" unless
committed without good faith or without a reasonable belief that the act or
omission was in the Company's best interest. No compensation or benefits will be
paid or provided to the Executive under this Agreement on account of a
termination for Cause or for periods following the date when such a termination
of employment is effective. The Executive's rights under the benefit plans of
the Company shall be determined under the provisions of those plans.

<PAGE>

                (iii)   DISABILITY. The Company may terminate the Executive's
employment for Disability by giving the Executive thirty (30) days' advance
notice in writing. For all purposes under this Agreement, "Disability" shall
mean that the Executive, at the time notice is given, has been unable to
substantially perform her duties under this Agreement for a period of not less
than ninety (90) days due to physical or mental illness. The determination of
the Executive's Disability hereunder shall be made by a two-thirds (2/3)
majority of the then current members of the Company's Board of Directors
(excluding the Executive) and shall be based upon advice from such medical
professionals and upon such medical and other records as the Company's Board of
Directors may deem appropriate. In the event that the Executive resumes the
performance of substantially all of her duties hereunder before the termination
of her employment under this paragraph 2(b)(iii) becomes effective, the notice
of termination shall automatically be deemed to have been revoked. The
Executive's rights under the benefit plans of the Company shall be determined
under the provisions of those plans.

3.      PLACE OF EMPLOYMENT. The Executive's services shall be performed at the
Company's principal executive offices. The parties acknowledge, however, that
some travel may be required in connection with the performance of the
Executive's duties hereunder.

4.      SALARY. For all services to be rendered by the Executive pursuant to
this Agreement, the Company agrees to pay the Executive an annual salary (the
"Salary") of $200,000 from the date hereof until the first anniversary of this
Agreement. Thereafter, for each annual period beginning on or after the first
anniversary of the Effective Date, the Salary shall be determined by the Board
of Directors prior to each such anniversary but in no case shall be lower than
$200,000 per annum. The Salary shall be paid in periodic installments in
accordance with the Company's regular payroll practices. The payment of such
Salary to the extent not paid by the Company shall be accrued and the Executive
shall have the right to convert any portion of the accrued salary to common
stock of the Company at a rate twenty percent (20%) below the next offering
price of the Company's stock.

5.      EXPENSES. The Executive shall be entitled to reimbursement by the
Company for all reasonable, ordinary, and necessary travel, entertainment,
and other expenses incurred by the Executive during the term of this
Agreement (in accordance with the policies and procedures established by the
Company for its senior executive officers) in the performance of her duties
and responsibilities under this Agreement; provided, however, that the
Executive shall properly account for such expenses in accordance with the
Company's policies and procedures.

6.      VACATIONS AND HOLIDAYS. The Executive shall be entitled to paid vacation
time and Company holidays in accordance with the Company's policies in effect
from time to time for its senior executive officers.

7.      TERMINATION BENEFITS. In the event the Executive's employment
terminates, then the Executive shall be entitled to receive severance and other
benefits as follows:

        (a)     SALARY.

                (i)     INVOLUNTARY TERMINATION WITHOUT CAUSE. If the Company
                terminates the Executive's employment without Cause, then in
                lieu of any severance benefits to which the Executive may
                otherwise be entitled under any Company severance plan or
                program, the Executive shall be entitled on such date to a
                lump-sum payment of her Salary for five (5) years from the date
                of such termination at the rate applicable on such date;

                (ii)    ADDITIONAL DEFINITION OF INVOLUNTARY TERMINATION WITHOUT
                CAUSE. To the extent the Executive's duties shall be materially
                reduced in nature, character or responsibility from those
                contemplated in paragraph 1, the Executive shall have the option
                for thirty (30) days from such date, to (i) terminate her
                employment with the Company or (ii) enter into an agreement with
                the Company, specifying the Executive's revised duties. To the
                extent the Executive terminates her employment under this
                paragraph and the Company cannot come to an agreement, such
                termination shall be deemed to be for the purposes of this
                paragraph "Involuntary Termination Without Cause."

<PAGE>

8.      PROPRIETARY INFORMATION. The Executive shall not, without the prior
written consent of the Board of Directors, disclose or use for any purpose
(except in the course of her employment under this Agreement and in furtherance
of the business of the Company or any of its affiliates or subsidiaries) any
confidential information or proprietary data of the Company. As an express
condition of the Executive's employment with the Company, the Executive agrees
to execute confidentiality agreements as requested by the Company, including but
not limited to the Company's standard form of proprietary information agreement.
The Executive's obligations under this paragraph 8 shall also be in full force
in effect as to Telegen.

9.      RIGHT TO ADVICE OF COUNSEL. The Executive acknowledges that she has
consulted with counsel and is fully aware of her rights and obligations under
this Agreement.

10.     SUCCESSORS. The Company and Telegen will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Telegen would be required to perform it if no such succession
had taken place. Failure of Telegen to obtain such assumption agreement prior to
the effectiveness of any such succession shall entitle the Executive to the
benefits described in paragraph 7(a)(i) of this Agreement, subject to the terms
and conditions therein.

11.     ARBITRATION. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration in San Mateo
County, California, in accordance with the rules of the American Arbitration
Association then in effect, with the right of discovery limited to five (5)
depositions, thirty-five (35) interrogatories, and reasonable request for
documents, by any party, by an arbitrator selected by both parties within ten
(10) days after either party has notified the other in writing that it desires a
dispute between them to be settled by arbitration. In the event the parties
cannot agree on such arbitrator within such ten (10) day period, each party
shall select an arbitrator and inform the other party in writing of such
arbitrator's name and address within five (5) days after the end of such ten
(10) day period and the two arbitrators so selected shall select a third
arbitrator within fifteen (15) days thereafter; provided, however, that in the
event of a failure by either party to select an arbitrator and notify the other
party of such selection within the time period provided above, the arbitrator
selected by the other party shall be the sole arbitrator of the dispute. Each
party shall pay its own expenses associated with such arbitration, including the
expense of any arbitrator selected by such party and the Company will pay the
expenses of the jointly selected arbitrator. The decision of the arbitrator or a
majority of the panel of arbitrators shall be binding upon the parties and
judgment in accordance with that decision may be entered in any court having
jurisdiction there over.

12.     ABSENCE OF CONFLICT. The Executive represents and warrants that her
employment by the Company as described herein shall not conflict with and will
not be constrained by any prior employment or consulting agreement or
relationship.

13.     ASSIGNMENT. This Agreement and all rights under this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective personal or legal representatives, executors,
administrators, heirs, devisees, legatees, successors and assigns. This
Agreement is personal in nature, and neither of the parties to this Agreement
shall, without the written consent of the other, assign or transfer this
Agreement or any right or obligation under this Agreement to any other person or
entity; except Telegen may assign this Agreement to any of its affiliates or
wholly-owned subsidiaries, provided, however that such assignment will not
relieve Telegen of its obligations hereunder. If the Executive should die while
any amounts are still payable to the Executive hereunder, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to the Executive's devisee, legatee, or other designee or, if
there be no such designee, to the Executive's estate.

14.     NOTICES. For purposes of this Agreement, notices and other
communications provided for in this Agreement shall be in writing and shall be
delivered personally or sent by United States certified mail, return receipt
requested, postage prepaid, addressed as follows:

<PAGE>

If to the Executive:            Jessica L. Stevens, 204 East Second Avenue,
                                #256, San Mateo, CA 94401

If to the Company:              Telegen Corporation, 101 Saginaw Drive
                                Redwood City, CA 94063
                                Attn: Executive  Vice  President

or to such other address or the attention of such other person as the recipient
party has previously furnished to the other party in writing in accordance with
this paragraph. Such notices or other communications shall be effective upon
delivery or, if earlier, three (3) days after they have been mailed as provided
above.

15.     INTEGRATION. This Agreement represents the entire agreement and
understanding between the parties as to the subject matter hereof and supersedes
all prior or contemporaneous agreements whether written or oral. No waiver,
alteration, or modification of any of the provisions of this Agreement shall be
binding unless in writing and signed by duly authorized representatives of the
parties hereto.

16.     WAIVER. Failure or delay on the part of either party hereto to enforce
any right, power, or privilege hereunder shall not be deemed to constitute a
waiver thereof. Additionally, a waiver by either party or a breach of any
promise hereof by the other party shall not operate as or be construed to
constitute a waiver of any subsequent waiver by such other party.

17.     SEVERABILITY. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal, or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality, or unenforceability will not affect
any other provision or any other jurisdiction.

18.     HEADINGS. The headings of the paragraphs contained in this Agreement are
for reference purposes only and shall not in any way affect the meaning or
interpretation of any provision of this Agreement.

19.     APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California as applied to agreements
between California residents entered into and to be performed entirely within
California.

20.     COUNTERPARTS. This Agreement may be executed in one or more
counterparts, none of which need contain the signature of more than one party
hereto, and each of which shall be deemed to be an original, and all of which
together shall constitute a single agreement.

21.     TERMINATION OF OBLIGATIONS OF TELEGEN. Any obligations of Telegen
hereunder shall cease upon the fifth anniversary of the Effective Date.

IN WITNESS WHEREOF, each of the parties has executed this Employment Agreement,
in the case of the Company by its duly authorized officer, as of the day and
year first above written.

"COMPANY"

TELEGEN CORPORATION

By: /s/ BONNIE CRYSTAL
    -----------------------------------------
Bonnie A. Crystal,  Executive  Vice President

"EXECUTIVE"

/s/ JESSICA L STEVENS
---------------------------------------------
Jessica L. Stevens

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