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Ex-10.42
Form of Warrant issued by the Company to Richard Sellers dated July 1, 2000
EXHIBIT 10.42
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT") OR STATE SECURITIES OR BLUE SKY LAWS AND MAY
NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED OR ASSIGNED FOR VALUE,
DIRECTLY OR INDIRECTLY, NOR MAY THE SECURITIES BE TRANSFERRED ON THE BOOKS OF
THE CORPORATION, WITHOUT REGISTRATION OF SUCH SECURITIES OR AN EXEMPTION FROM
SUCH REGISTRATION UNDER APPLICABLE STATE SECURITIES OR BLUE SKY LAWS.
TELEGEN CORPORATION
COMMON STOCK PURCHASE WARRANT
VOID AFTER JULY 1, 2003
1. NUMBER AND PRICE OF SHARES SUBJECT TO WARRANT. Subject to the terms and
conditions set forth herein, Richard Sellers is entitled to purchase
from TELEGEN CORPORATION, a California corporation (the "Company"), at
any time after July 1, 2000, from the date of issuance hereof and on or
before the date of termination of this Warrant provided for in Section 2
hereof, up to 125,000 shares of fully paid and non-assessable Common
Stock of the Company (the "Warrant Stock"), for a per-share purchase
price of $1.75 (the "Warrant Price"). This Warrant is issued as
consideration for the performance of services pursuant to an agreement
between the Company and the holder hereof.
2. TERMINATION. This Warrant (and the right to purchase securities upon
exercise hereof) shall terminate upon the earliest of (i) THREE (3)
years from the date of issuance hereof; or (ii) the closing of an
acquisition of all or substantially all of the assets or capital stock
of the Company by another entity for cash. The Company shall give the
holder of this Warrant written notice of such sale, merger or
consolidation at least TWENTY (20) and no more than NINETY (90) days
prior to the closing of any such sale, merger or consolidation.
3. NO ADJUSTMENTS. No adjustment on account of dividends or interest on
Warrant Stock will be made upon the exercise hereof.
4. NO FRACTIONAL SHARES. No fractional shares of Warrant Stock will be
issued in connection with any subscription hereunder. In lieu of any
fractional shares which would otherwise be issuable, the Company shall
pay cash equal to the product of such fraction multiplied by the fair
market value of one share of Warrant Stock on the date of exercise, as
determined in good faith by the Company's Board of Directors.
5. NO STOCKHOLDER. This Warrant shall not entitle its holder to any of the
rights of a shareholder of the Company.
6. RESERVATION OF STOCK. The Company covenants that during the period this
Warrant is exercisable, the Company will reserve from its authorized and
unissued Common Stock a sufficient number of shares to provide for the
issuance of Warrant Stock upon the exercise of this Warrant. The Company
agrees that its issuance of this Warrant shall constitute full authority
to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for shares
of Warrant Stock upon the exercise of this Warrant.
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7. PROCEDURE FOR EXERCISE OF WARRANT. This Warrant may be exercised by the
registered holder or its registered assigns, in whole or in part, by the
surrender of this Warrant at the principal office of the Company,
accompanied by payment in full of the Warrant Price in cash or by check.
Upon partial exercise hereof, a new warrant or warrants containing the
same date and provisions as this Warrant shall be issued by the Company
to the registered holder for the number of shares of Warrant Stock with
respect to which this Warrant shall not have been exercised. A Warrant
shall be deemed to have been exercised immediately prior to the close of
business on the date of its surrender for exercise as provided above,
and the person entitled to receive the shares of Warrant Stock issuable
upon such exercise shall be treated for all purposes as the holder of
such shares of record as of the close of business on such date. As
promptly as practicable on or after such date, the Company shall issue
and deliver to the person or persons entitled to receive the same a
certificate or certificates for the number of full shares of Warrant
Stock issuable upon such exercise, together with cash in lieu of any
fraction of a share as provided above.
8. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES. The number and kind of
securities issuable upon the exercise of this Warrant shall be subject
to adjustment from time to time and the Company agrees to provide notice
upon the happening of certain events as follows:
(a) ADJUSTMENT FOR RECLASSIFICATION OR REORGANIZATION. In case of any
reclassification or change of the outstanding Common Stock of the
Company or of any reorganization of the Company during the term of this
Warrant (other than a merger of the Company with and into another
corporation), then and in each such case the Company shall give the
holder of this Warrant at least TWENTY (20) days notice of the proposed
effective date of such transaction, and the holder of this Warrant, upon
the exercise hereof at any time after the consummation of such
reclassification, change or reorganization, shall be entitled to
receive, in lieu of the Warrant Stock receivable upon the exercise
hereof prior to such consummation, the stock or other securities or
property to which such holder would have been entitled upon such
consummation if such holder had exercised this Warrant immediately prior
thereto, all subject to further adjustment as provided in this Section
8. The terms of this Section 8 shall similarly apply to successive
reclassifications, changes or reorganizations.
(b) STOCK SPLITS AND REVERSE STOCK SPLITS. If at any time during the term of
this Warrant the Company shall subdivide its outstanding shares of
Common Stock into a greater number of shares, the Warrant Price in
effect immediately prior to such subdivision shall thereby be
proportionately reduced and the number of shares receivable upon
exercise of the Warrant shall thereby be proportionately increased; and,
conversely, if at any time on or after the date hereof the outstanding
number of shares of Common Stock shall be combined into a smaller number
of shares, the Warrant Price in effect immediately prior to such
combination shall thereby be proportionately increased and the number of
shares receivable upon exercise of this Warrant shall thereby be
proportionately decreased.
9. CERTIFICATE OF ADJUSTMENT. Whenever the Warrant Price or the number or
type of securities issuable upon exercise of this Warrant is adjusted,
as herein provided, the Company shall promptly deliver to the record
holder of this Warrant a certificate of an officer of the Company
setting forth the nature of such adjustment and a brief statement of the
facts requiring such adjustment.
10. NO DILUTION OR IMPAIRMENT. The Company covenants that it shall not, by
amendment of its Articles of Incorporation or through any
reorganization, consolidation, merger, transfer of assets, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek
to avoid the observance or performance of any of the terms of this
Warrant, but shall at all times in good faith assist in carrying out all
those terms and in taking all actions necessary or appropriate to
protect the rights of the holder of this Warrant against dilution or
other impairment. Without limiting the generality of the above
provision, the Company will take all necessary or appropriate action in
order that the Company may validly and legally issue fully paid and
nonassessable shares upon the exercise of this Warrant.
11. TRANSFER OF WARRANT. This Warrant may not be transferred or assigned
without the consent of the Company. The Warrant Stock may not be
transferred or assigned, in whole or in part, by the holder hereof
without
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compliance with applicable federal and state securities laws. The rights
and obligations of the Company and the holders of this Warrant shall be
binding upon and benefit the successors, assignors, heirs,
administrators and transferees of the parties. Any transferee hereof
agrees to be bound by the restrictions set forth herein.
12. COMPLIANCE WITH SECURITIES LAWS.
(a) The holder represents and agrees that this Warrant (and the Warrant
Stock, if the Warrant is exercised), are purchased only for investment,
for the holder's own account, and without any present intention to sell
or distribute the Warrant or the Warrant Stock.
(b) The holder of this Warrant acknowledges and agrees that this Warrant and
the Warrant Stock issuable upon exercise of the Warrant and the shares
of Common Stock issuable upon conversion of the Warrant (the
"Securities") have not been registered under the Securities Act and
accordingly will not be transferable except as permitted under the
various exemptions contained in the Securities Act, or upon satisfaction
of the registration requirements of the Securities Act. Therefore, the
Securities must be held pursuant to Rule 144 of the Securities Act
unless they are subsequently registered under the Securities Act or an
exemption from such registration is available. Holder understands that
the certificate evidencing the Securities will be imprinted with a
legend which prohibits the transfer of the Securities unless they are
registered or unless the Company receives an opinion of counsel
reasonably satisfactory to the Company that such registration is not
required. Holder is aware of the provisions of Rule 144 under the
Securities Act. Holder understands that a stop transfer instruction will
be in effect with respect to transfer of Securities consistent with the
requirements of the securities laws.
13. MISCELLANEOUS. This Warrant shall be governed by the laws of the State
of California. The headings in this Warrant are for purposes of
convenience and reference only, and shall not be deemed to constitute a
part hereof. Neither this Warrant nor any term hereof may be changed,
waived, discharged or terminated orally but only by an instrument in
writing signed by the Company and the registered holder hereof. All
notices and other communications from the Company to the holder of this
Warrant shall be mailed by first-class registered or certified mail,
postage prepaid, to the address furnished to the Company in writing by
the last holder of this Warrant who shall have furnished an address to
the Company in writing.
ISSUED this 1st day of July 2000.
TELEGEN CORPORATION
By:
/s/ JESSICA L. STEVENS
Jessica L. Stevens
President/CEO
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