EXHIBIT 10.11
TELEGEN CORPORATION
A California Corporation
SUBSCRIPTION PACKAGE
TELEGEN CORPORATION
SUBSCRIPTION INSTRUCTIONS
(Please Read Carefully)
THE COMPANY RESERVES THE RIGHT TO REJECT ANY SUBSCRIPTION, IN WHOLE OR
IN PART, OR TO ALLOT TO ANY PROSPECTIVE PURCHASER FEWER THAN THE NUMBER OF
SHARES SUBSCRIBED FOR BY SUCH PURCHASER. ANY REPRESENTATION TO THE CONTRARY IS
UNAUTHORIZED AND MUST NOT BE RELIED UPON. THE COMPANY WILL UTILIZE SUBSCRIPTION
PROCEEDS IMMEDIATELY UPON ACCEPTANCE.
The shares of the Common Stock (the "Shares") of Telegen Corporation
(the "Company") are being offered for $2.25 per share. This Subscription Booklet
contains all of the materials necessary for you to purchase the Shares.
I. After completing the enclosed Subscription Agreement, please sign the
appropriate signature page and return it to the address set forth below
in Section III. Please make sure that you indicate how the name should
appear on your stock certificate.
II. Payment for the Shares must be made to the Company's Placement Agent,
Capitol Bay Securities by wire transfer or by delivery to the Placement
Agent of a check made payable to "Telegen Corporation."
III. Send the appropriate signature page to the following address:
Wilson Sonsini Goodrich & Rosati
Professional Corporation
650 Page Mill Road
Palo Alto, California 94304-1050
Attn: Jack I. Siegal
IV. Questions regarding completion of subscription documents should be
directed to:
Wilson Sonsini Goodrich & Rosati
Professional Corporation
650 Page Mill Road
Palo Alto, California 94304-1050
Attn: Jack I. Siegal
Tel: (650) 493-9300
Fax: (650) 496-4086
V. Questions regarding the offering or the Company should be directed to:
Telegen Corporation
101 Saginaw Drive
Redwood City, CA 94063
Attn: Warren M. Dillard
Tel: (650) 261-9400
Fax: (650) 261-9468
FAILURE TO COMPLY WITH THE SUBSCRIPTION INSTRUCTIONS WILL CONSTITUTE
AN INVALID SUBSCRIPTION, WHICH, IF NOT CORRECTED, WILL RESULT IN THE REJECTION
OF YOUR SUBSCRIPTION REQUEST.
SUBSCRIPTION AGREEMENT
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TELEGEN CORPORATION
-------------------
222,222 Shares
of Common Stock
no par value
of TELEGEN CORPORATION
No Minimum Investment
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To: Telegen Corporation
This Subscription Agreement is made by and between Telegen Corporation,
a California corporation (the "Company"), and the undersigned prospective
purchaser who is subscribing hereby for that number of shares of the Company's
Common Stock, no par value, specified on the signature page hereto (the
"Shares"). The purchase price per Share (the "Purchase Price") is $2.25. This
subscription is submitted to you in accordance with and subject to the terms and
conditions described in this Subscription Agreement, relating to an offering
(the "Offering") of up to 222,222 Shares.
In consideration of the Company's agreement to sell the Shares to the
undersigned on the terms and conditions summarized herein, the undersigned
agrees and represents as follows:
I. SUBSCRIPTION.
(A) The undersigned hereby irrevocably subscribes for and agrees to
purchase that number of the Shares indicated on the signature page hereto at a
purchase price of $2.25 per Share. The undersigned agrees to wire transfer funds
or deliver a check made out to "Telegen Corporation" in an amount equal to the
aggregate purchase price for the Shares (the "Payment") to the Company's
Placement Agent.
(B) The undersigned understands that the Payment (or, in the case of
rejection of a portion of the undersigned's subscription, the part of the
Payment relating to such rejected portion) will be returned promptly, without
interest or deduction, if the undersigned's subscription is rejected in whole or
in part. The Company, if it accepts this subscription, will promptly notify the
undersigned of receipt and acceptance of such subscription. Subject to the
acceptance by the Company of the subscriptions, the Company shall cause to be
issued to the undersigned with reasonable promptness the Shares purchased
hereunder.
(C) The undersigned hereby agrees to be bound hereby upon (i) execution
and delivery to the Company of the signature page to this Subscription Agreement
and (ii) acceptance by the Company of the undersigned's subscription (the
"Subscription").
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II. REPRESENTATIONS AND WARRANTIES.
The undersigned hereby represents and warrants to and agrees with the
Company as follows:
(A) The undersigned has been furnished with and has carefully read the
Company's Annual Report on Form 10-K dated March 31, 1997, amended on April 9
and April 30, 1997, the Proxy Statement delivered to the Company's Shareholders
dated July 9, 1997, Quarterly Report on Form 10-Q dated May 15, 1997, the
Quarterly Report on Form 10-Q dated August 14, 1997, Current Reports on Form 8-K
dated January 15, 1997 (amended March 14, 1997), January 21, 1997, February 7,
1997, March 25, 1997, May 9, 1997, May 19, 1997, July 8, 1997, and August 11,
1997 and the Company's press releases dated August 7, 1997 and August 19, 1997
(the "Disclosure Documents"). With respect to tax and other economic
considerations involved in this investment, the undersigned is not relying on
the Company or any agent or representative of any of them. The undersigned has
carefully considered and has, to the extent the undersigned believes such
discussion necessary, discussed with the undersigned's professional legal, tax,
accounting, and financial advisors the suitability of an investment in the
Shares for the undersigned's particular tax and financial situation and has
determined that the Shares being subscribed for by the undersigned are a
suitable investment for the undersigned.
(B) The undersigned represents and warrants that the address that
appears on the signature page of this Subscription Agreement is the address of
the undersigned's principal residence.
(C) The undersigned and/or the undersigned's adviser(s) has/have had an
opportunity to ask questions of and receive answers from persons acting on
behalf of the Company concerning the Offering, and all such questions have been
answered to the full satisfaction of the undersigned.
(D) The undersigned represents and warrants that it is an "Accredited
Investor" as that term is defined in Rule 501(a) promulgated pursuant to the
Securities Act of 1933, as amended (the "Act"). The undersigned also represents
and warrants that it either has a pre-existing business or personal relationship
with the Company or any of its officers, directors, or controlling persons, or
by reason of the undersigned's business or financial experience or the business
or financial experience of the undersigned's professional advisors who are
unaffiliated with and who are not compensated by the Company, directly or
indirectly could be reasonably assumed to have the capacity to evaluate the
merits and risks of an investment in the Company and to protect the
undersigned's own interests in connection with these transactions.
(E) If the undersigned is a natural person, the undersigned has reached
the age of twenty-one, has adequate means of providing for the undersigned's
current financial needs and contingencies, is able to bear the substantial
economic risks of an investment in the Shares for an indefinite period of time,
has no need for liquidity in such investment, and at the present time, could
afford a complete loss of such investment.
(F) The undersigned or the undersigned's professional advisor, as the
case may be, has such knowledge and experience in financial, tax and business
matters so as to enable the undersigned to utilize the information made
available to the undersigned in connection with the Offering to evaluate the
merits and risks of an investment in the Shares and to make an informed
investment decision with respect thereto.
(G) The undersigned understands that the Shares have not been
registered with the Securities and Exchange Commission in reliance on an
exemption from the registration requirements of the Securities Act of 1933, as
amended (the "Act"). The undersigned has not offered or sold any portion of the
Shares being acquired nor does the undersigned have any present intention of
dividing such Shares with others or of selling, distributing,
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or otherwise disposing of any portion of such Shares either currently or after
the passage of a fixed or determinable period of time or upon the occurrence or
nonoccurrence of any predetermined event or circumstance in violation of the
Act.
(H) The undersigned recognizes that investment in the Shares involves
substantial risks, including loss of the entire amount of such investment.
Further, the undersigned has carefully read and considered the risk factors set
forth in the Disclosure Documents and has taken full cognizance of and
understands all of the risks related to the purchase of the Shares.
(I) The undersigned acknowledges that each certificate representing the
Shares shall be stamped or otherwise imprinted with a legend substantially in
the following form, in addition to any other legends which may be required by
the California Commissioner of Corporations:
(a) THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT ONLY AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE
SALE OR DISTRIBUTION THEREOF. THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF
COUNSEL, SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED.
(J) If this Subscription Agreement is executed and delivered on behalf
of a partnership, corporation, trust, or estate: (i) such partnership,
corporation, trust, or estate has the full legal right and power and all
authority and approval required (a) to execute and deliver or authorize
execution and delivery of this Subscription Agreement and all other instruments
executed and delivered by or on behalf of such partnership, corporation, trust,
or estate in connection with the purchase of the Shares, (b) to delegate
authority pursuant to a power of attorney, and (c) to purchase and hold the
Shares; (ii) the signature of the party signing on behalf of such partnership,
corporation, trust or estate is binding upon such partnership, corporation,
trust, or estate; and (iii) such partnership, corporation, or trust has not been
formed for the specific purpose of acquiring the Shares.
III. UNDERSTANDINGS.
The undersigned understands, acknowledges and agrees with the Company
as follows:
(A) This Subscription may be rejected, in whole or in part, by the
Company, in its sole and absolute discretion, notwithstanding prior receipt by
the undersigned of notice of acceptance of the undersigned's Subscription.
(B) The undersigned hereby acknowledges and agrees that the
subscription hereunder is irrevocable by the undersigned; that, except as
required by law, the undersigned is not entitled to cancel, terminate, or revoke
this Subscription Agreement or any agreements of the undersigned hereunder; and
that this Subscription Agreement and such other agreements shall survive the
death or disability of the undersigned and shall be binding upon and inure to
the benefit of the parties and their heirs, executors, administrators,
successors, legal representatives, and permitted assigns. If the undersigned is
more than one person, the obligations of the undersigned hereunder shall be
joint and several and the agreements, representations, warranties, and
acknowledgments herein contained shall be deemed to be made by and be binding
upon each such person and his/her heirs, executors, administrators, successors,
legal representatives and permitted assigns.
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(C) IN MAKING AN INVESTMENT DECISION, PURCHASERS MUST RELY ON THEIR OWN
EXAMINATION OF THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS
AND RISKS INVOLVED. THE SHARES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE
SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHER MORE, THE FOREGOING
AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETER MINED THE ADEQUACY OF THE
MEMORANDUM OR THIS DOCUMENT. ANY REPRESENTA TION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
IV. REGISTRATION RIGHTS.
The undersigned will be entitled to registration rights as follows: (i)
the Company shall prepare and file, within ninety (90) days of the delivery date
of the Shares to the undersigned, a Registration Statement on Form S-3 (the
"Registration Statement") covering the resale of the Common Stock subscribed to
hereunder. The Company further agrees to use its best efforts to cause the
Registration Statement to be declared effective by the Securities and Exchange
Commission as soon as possible after the initial filing of the Registration
Statement. The Company shall pay all expenses of such registration and shall
maintain the effectiveness of such Registration Statement for so long as the
Shares cannot be freely resold pursuant to Rule 144.
V. MISCELLANEOUS.
(A) Neither this Subscription Agreement nor any provision hereof shall
be waived, modified, changed, discharged, terminated, revoked, or canceled,
except by an instrument in writing effecting the same signed by the party
against whom any change, discharge, or termination is sought.
(B) Failure of the Company to exercise any right or remedy under this
Subscription Agreement or any other agreement between the Company and the
undersigned, or otherwise, or delay by the Company in exercising such right or
remedy, will not operate as a waiver thereof. No waiver by the Company will be
effective unless and until it is in writing and signed by the Company.
(C) This Subscription Agreement shall be enforced, governed, and
construed in all respects in accordance with the laws of the State of
California, and shall be binding upon the undersigned, the undersigned's heirs,
estate, legal representatives, successors and assigns and shall inure to the
benefit of the Company, its successors, and assigns. Any provision hereof that
may prove invalid or unenforceable under any law shall not affect the validity
or enforceability of any other provision hereof.
(D) This Subscription Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and may be
amended only by a writing executed by both parties hereto.
VI. SIGNATURE.
The signature page of this Subscription Agreement is contained as part
of the Subscription Package and is entitled "Signature Page."
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Signature Page Instructions
Each individual investor should then complete all requested
information on page A-1. Investors purchasing through an estate planning,
family, or retirement trust should complete all requested information on page
B-1. Investors purchasing through an Individual Retirement Account should
complete all requested information on page C-1. If you have any questions
concerning the form of investment entity or the correct signature page to use,
please contact the individual identified in Section III of the Subscription
Instructions. All documents should then be returned to Wilson, Sonsini, Goodrich
& Rosati at the address identified in the Subscription Instructions.
TELEGEN CORPORATION
INDIVIDUAL SIGNATURE PAGE
Your signature on this Individual Signature Page evidences your
agreement to be bound by the Subscription Agreement.
The undersigned investor, hereby subscribes to ______________________
shares of Telegen Corporation's Common Stock (the "Shares") subject to the terms
and conditions of this Subscription Agreement at a purchase price of $2.25 per
share for an aggregate purchase price of $______________ (the "Funds"). Stock
Certificates for the Shares purchased hereunder will be delivered to the
undersigned as soon as practicable after receipt of the Funds and acceptance of
this Subscription Agreement by the Company.
The undersigned represents that (i) he or she has read and understands
this Subscription Agreement, and (ii) he or she will telephone the Company
immediately if any material change in any of the representations and warranties
contained in the Subscription Agreement occurs before the acceptance of his or
her subscription and will promptly send the Company written confirmation of such
change.
Section 1. Form of Ownership. The purchaser wishes to take title to the Shares
with the following form of ownership:
_____ Individual, as separate property.
_____ Individual Joint Tenants With Right of Survivorship (Both parties must sign below).
_____ Tenants in Common (Both parties must sign below).
_____ Husband and Wife, as Community Property. (One signature required if interest held in
one name--i.e., managing spouse, and two signatures required if interest held in both
names).
Section 2. Title.
Please indicate exactly how you wish the name of the holder to appear
on the certificate representing the Shares:_____________________________________
Section 3. Signatures.
Signatory 1 (Individual) Signatory 2 (Individual)
Name: _____________________________________________ ___________________________________________
Signature: _____________________________________________ ___________________________________________
Social Security Number: _____________________________________________ ___________________________________________
Residence Address: _____________________________________________ ___________________________________________
_____________________________________________ ___________________________________________
Mailing Address: _____________________________________________ ___________________________________________
Home Phone: _____________________________________________ ___________________________________________
Work Phone: _____________________________________________ ___________________________________________
Date: _____________________________________________ ___________________________________________
A-1
TELEGEN CORPORATION
TRUST SIGNATURE PAGE
Your signature on this Trust Signature Page evidences the agreement by
the Trustee(s), on behalf of the Trust, to be bound by the Subscription
Agreement.
(A) The undersigned investor, hereby subscribes to
______________________ shares of Telegen Corporation's Common Stock (the
"Shares") subject to the terms and conditions of this Subscription Agreement at
a purchase price of $2.25 per share for an aggregate purchase price of
$________________ (the "Funds"). Stock Certificates for the Shares purchased
hereunder will be delivered to the undersigned as soon as practicable after
receipt of the Funds and acceptance of this Subscription Agreement by the
Company.
(B) The undersigned trustees represent that (a) the representations and
warranties contained in the Subscription Agreement are accurate and (b) the
Trust will notify the Company (contact by telephone at the number contained on
page iii hereof) immediately if any material change in any of the
representations and warranties occurs before the acceptance of the Trust's
subscription and will promptly send the Company written confirmation of such
change.
(C) The undersigned trustees hereby certify that they have read and
understand this Subscription Agreement.
(D) The undersigned trustees hereby represent and warrant that the
persons signing this Subscription Agreement on behalf of the Trust are duly
authorized to acquire the Shares and sign this Subscription Agreement on behalf
of the Trust and, further, that the undersigned Trust has all requisite
authority to purchase such Shares and enter into this Subscription Agreement.
Please Type or Print the Exact Legal Title of Trust as follows: Trustee's name,
as trustee for [Name of Grantor] under Agreement [or Declaration] of Trust dated
[Date of Trust Formation]
Title: __________________________________________________________________________________________________________
Name of Name of
Trustee: _____________________________________________ Trustee:___________________________________________
(Please Type or Print) (Please Type or Print)
By: __________________________________________________ By: _______________________________________________
(Signature of Trustee) (Signature of Trustee)
Date: ________________________________________________ Date: _____________________________________________
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TELEGEN CORPORATION
IRA SIGNATURE PAGE
The signature of the Custodian on this IRA Signature Page evidences the
agreement of the Custodian to be bound by the Subscription Agreement.
(A) The undersigned investor, hereby subscribes to
______________________ shares of Telegen Corporation's Common Stock (the
"Shares") subject to the terms and conditions of this Subscription Agreement at
a purchase price of $2.25 per share for an aggregate purchase price of
$________________ (the "Funds"). Stock Certificates for the Shares purchased
hereunder will be delivered to the undersigned as soon as practicable after
receipt of the Funds and acceptance of this Subscription Agreement by the
Company.
(B) The undersigned purchaser represents that (a) the representations
and warranties contained in the Subscription Agreement are accurate and (b) the
purchaser will notify the Company (contact by telephone at the number contained
on page iii hereof) immediately if any material change in any of the
representations and warranties occurs before the acceptance of the purchaser's
subscription and will promptly send the Company written confirmation of such
change.
(C) The undersigned Custodian and purchaser hereby certify that they
have read and understand this Subscription Agreement.
(D) The undersigned Custodian hereby represents and warrants that the
persons signing this Subscription Agreement on behalf of the Custodian are duly
authorized to sign this Subscription Agreement on behalf of the Custodian and,
further, that the undersigned Custodian has all requisite authority to purchase
such Shares and enter into this Subscription Agreement on behalf of the
undersigned purchaser.
Please Type or Print the Exact Legal Title of Trust as follows: Custodian's
name, as Custodian for Individual Retirement Account of [Name of Purchaser].
Title: ___________________________________________________________________________________________________________________
Account Number:___________________________________________________________________________________________________________
Name of Name of
Custodian: ________________________________________________ Purchaser: _________________________________________________
(Please Type or Print) (Please Type or Print)
By: ___________________________________________________ By: ________________________________________________________
(Authorized Signature) (Signature of Purchaser)
Title: ________________________________________________
Date: ________________________________________________ Date: ______________________________________________________
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