SUBSCRIPTION AGREEMENT
Exhibit 10.1
Gentlemen:
The undersigned (the “Investor”) hereby confirms its agreement with Capstone Turbine
Corporation, a Delaware corporation (the “Company”), as follows:
1. This Subscription Agreement, including the Terms and Conditions for Purchase of Units
attached hereto as Annex I (collectively, this “Agreement”) is made as of the date set
forth below between the Company and the Investor.
2. The Company has authorized the sale and issuance to certain investors of up to an aggregate
of 14,450,868 units (the “Units”), subject to adjustment by the Company’s Board of Directors or a
committee thereof, with each Unit consisting of (i) one share (the “Share,” collectively, the
“Shares”) of its common stock, par value $0.001 per share (the “Common Stock”), and (ii) one
warrant (the “Warrant,” collectively, the “Warrants”) to purchase 0.75 shares of Common Stock (and
the fractional amount being the “Warrant Ratio”), in substantially the form attached hereto as
Exhibit B, for a purchase price of $0.865 per Unit (the “Purchase Price”). Units will not
be issued or certificated. The Shares and Warrants are immediately separable and will be issued
separately. The shares of Common Stock issuable upon exercise of the Warrants are referred to
herein as the “Warrant Shares” and, together with the Units, the Shares and the Warrants, are
referred to herein as the “Securities”).
3. The offering and sale of the Units (the “Offering”) are being made pursuant to (a) an
effective Registration Statement on Form S-3, No. 333-156459 (the “Registration Statement”) filed
by the Company with the Securities and Exchange Commission (the “Commission”), including the
Prospectus contained therein (the “Base Prospectus”), (b) if applicable, certain “free writing
prospectuses” (as that term is defined in Rule 405 under the Securities Act of 1933, as amended
(the “Act”)), that have been or will be filed, if required, with the Commission and delivered to
the Investor on or prior to the date hereof (the “Issuer Free Writing Prospectus”), containing
certain supplemental information regarding the Units, the terms of the Offering and the Company,
(c) a Preliminary Prospectus Supplement (the “Preliminary Prospectus Supplement”) containing
certain supplemental information regarding the Units, the Offering and the Company that will be
filed with the Commission and delivered to the Investor, and (d) a Prospectus Supplement (the
“Prospectus Supplement” and, together with the Base Prospectus, the “Prospectus”) containing
certain supplemental information regarding the Units and terms of the Offering that will be filed
with the Commission and delivered to the Investor (or made available to the Investor by the filing
by the Company of an electronic version thereof with the Commission).
4. The Company and the Investor agree that the Investor will purchase from the Company and the
Company will issue and sell to the Investor the Units set forth below for the aggregate purchase
price set forth below. The Units shall be purchased pursuant to the Terms and Conditions for
Purchase of Units attached hereto as Annex I and incorporated herein by this reference as
if fully set forth herein. The Investor acknowledges that the Offering is not being underwritten
by the Placement
Agent (the “Placement Agent”) named in the Prospectus Supplement and that there is no minimum
offering amount.
5. The manner of settlement of the Shares included in the Units purchased by the Investor
shall be as follows:
Delivery versus payment (“DVP”) through the Depository Trust Company (“DTC”)
(i.e., on the Closing Date, the Company shall instruct Mellon Investor Services
LLC, its “Transfer Agent”, to issue the Shares registered in the Investor’s name and
address as set forth below and released by the Transfer Agent to the Investor through DTC
at the Closing directly to the account(s) at Lazard Capital Markets LLC (“LCM”)
identified by the Investor; upon receipt of such Shares, LCM shall promptly
electronically deliver such Shares to the Investor, and simultaneously therewith payment
shall be made by LCM by wire transfer to the Company). NO LATER THAN ONE (1) BUSINESS
DAY AFTER THE EXECUTION OF THIS AGREEMENT BY THE INVESTOR AND THE COMPANY, THE INVESTOR
SHALL:
| (I) | NOTIFY LCM OF THE ACCOUNT OR ACCOUNTS AT LCM TO BE CREDITED WITH THE SHARES BEING PURCHASED BY SUCH INVESTOR, AND | ||
| (II) | CONFIRM THAT THE ACCOUNT OR ACCOUNTS AT LCM TO BE CREDITED WITH THE SHARES BEING PURCHASED BY THE INVESTOR HAVE A MINIMUM BALANCE EQUAL TO THE AGGREGATE PURCHASE PRICE FOR THE UNITS BEING PURCHASED BY THE INVESTOR. |
IT IS THE INVESTOR’S RESPONSIBILITY TO (A) MAKE THE NECESSARY WIRE TRANSFER OR CONFIRM
THE PROPER ACCOUNT BALANCE IN A TIMELY MANNER AND (B) ARRANGE FOR SETTLEMENT BY WAY OF DVP
IN A TIMELY MANNER. IF THE INVESTOR DOES NOT DELIVER THE AGGREGATE PURCHASE PRICE FOR THE
UNITS OR DOES NOT MAKE PROPER ARRANGEMENTS FOR SETTLEMENT IN A TIMELY MANNER, THE SHARES AND
WARRANTS MAY NOT BE DELIVERED AT CLOSING TO THE INVESTOR OR THE INVESTOR MAY BE EXCLUDED
FROM THE CLOSING ALTOGETHER.
6. The executed Warrant shall be delivered in accordance with the terms thereof.
7. The Investor represents that, except as set forth below, (a) it has had no position, office
or other material relationship within the past three years with the Company or persons known to it
to be affiliates of the Company, (b) it is not a member of the Financial Industry Regulatory
Authority, Inc. or an Associated Person (as such term is defined under the NASD Membership and
Registration Rules Section 1011) as of the Closing, and (c) neither the Investor nor any group of
Investors (as identified in a public filing made with the Commission) of which the Investor is a
part in connection with the Offering of the Units, acquired, or obtained the right to acquire, 20%
or more of the Common Stock (or securities convertible into or exercisable for Common Stock) or the
voting power of the Company on a post-transaction basis. Exceptions:
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8. The Investor represents that it has received (or otherwise had made available to it by the
filing by the Company of an electronic version thereof with the Commission) the Base Prospectus,
dated February 4, 2009, which is a part of the Company’s Registration Statement, the Preliminary
Prospectus Supplement, the documents incorporated by reference therein and any free writing
prospectus (collectively, the “Disclosure Package”), prior to or in connection with the receipt of
this Agreement. The Investor acknowledges that, prior to the delivery of this Agreement to the
Company, the Investor will receive certain additional information regarding the Offering, including
pricing information (the “Offering Information”). Such information may be provided to the Investor
by any means permitted under the Act, including the Preliminary Prospectus Supplement, Prospectus
Supplement, a free writing prospectus and oral communications.
9. No offer by the Investor to buy Units will be accepted and no part of the Purchase Price
will be delivered to the Company until the Investor has received the Offering Information and the
Company has accepted such offer by countersigning a copy of this Agreement, and any such offer may
be withdrawn or revoked, without obligation or commitment of any kind, at any time prior to the
Company (or Placement Agent on behalf of the Company) sending (orally, in writing or by electronic
mail) notice of its acceptance of such offer. An indication of interest will involve no obligation
or commitment of any kind until the Investor has been delivered the Offering Information and this
Agreement is accepted and countersigned by or on behalf of the Company.
10. The Company acknowledges that the only material, non-public information relating to the
Company it has provided to the Investor in connection with the Offering prior to the date hereof is
the existence of the Offering and certain information included in the Preliminary Prospectus
Supplement.
11. For so long as any Warrants remain outstanding, the Company shall not, in any manner,
issue or sell any rights, warrants or options to subscribe for or purchase Common Stock, or
directly or indirectly convertible into or exchangeable for Common Stock at a price which resets as
a function of market price of the Common Stock, unless the conversion, exchange or exercise price
of any such security cannot be less than the then applicable Exercise Price (as defined in the
Warrants) with respect to the Common Stock into which any Warrant is exercisable (other than as a
result in the ordinary course of business of the issuance of Common Stock issued pursuant to the
exercise of stock options under the Company’s stock plans, the issuance of Common Stock under the
Company’s stock plans, and the issuance of Common Stock pursuant to employee stock purchase plans)
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Number of Units: ______________________________
Purchase Price Per Unit: $________________________
Aggregate Purchase Price: $________________________
Please confirm that the foregoing correctly sets forth the agreement between us by signing in
the space provided below for that purpose.
| Dated as of: May 4, 2009 |
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| INVESTOR |
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| By: | ||||
| Print Name: | ||||
| Title: | ||||
| Address: | ||||
Agreed and Accepted
this 4th day of May, 2009:
this 4th day of May, 2009:
CAPSTONE TURBINE CORPORATION
| By: | ||||
| Title: | ||||
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ANNEX I
TERMS AND CONDITIONS FOR PURCHASE OF UNITS
1. Authorization and Sale of the Units. Subject to the terms and conditions of this
Agreement, the Company has authorized the sale of the Units.
2. Agreement to Sell and Purchase the Units; Placement Agent.
2.1 At the Closing (as defined in Section 3.1), the Company will sell to the Investor,
and the Investor will purchase from the Company, upon the terms and conditions set forth herein,
the number of Units set forth on the last page of the Agreement to which these Terms and Conditions
for Purchase of Units are attached as Annex I (the “Signature Page”) for the aggregate
purchase price therefor set forth on the Signature Page.
2.2 The Company proposes to enter into substantially this same form of Subscription Agreement
with certain other investors (the “Other Investors”) and expects to complete sales of Units to
them. The Investor and the Other Investors are hereinafter sometimes collectively referred to as
the “Investors,” and this Agreement and the Subscription Agreements executed by the Other Investors
are hereinafter sometimes collectively referred to as the “Agreements.”
2.3 Investor acknowledges that the Company has agreed to pay Lazard Capital Markets LLC (the
“Placement Agent”) a fee (the “Placement Fee”) in respect of the sale of Units to the Investor.
2.4 The Company has entered into a Placement Agent Agreement, dated May 4, 2009 (the
“Placement Agreement”), with the Placement Agent that contains certain representations, warranties,
covenants and agreements of the Company that may be relied upon by the Investor, which shall be a
third party beneficiary thereof.
3. Closing and Delivery of the Shares, Warrants and Funds.
3.1 Closing. The completion of the purchase and sale of the Units (the “Closing”)
shall occur at a place and time (the “Closing Date”) to be specified by the Company and the
Placement Agent, and of which the Investors will be notified in advance by the Placement Agent, in
accordance with Rule 15c6-1 promulgated under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). At the Closing, (a) the Company shall cause the Transfer Agent to deliver to the
Investor the number of Shares set forth on the Signature Page registered in the name of the
Investor or, if so indicated on the Investor Questionnaire attached hereto as Exhibit A, in
the name of a nominee designated by the Investor, (b) the Company shall cause to be delivered to
the Investor a Warrant to purchase a number of whole Warrant Shares determined by multiplying the
number of Shares set forth on the signature page by the Warrant Ratio and rounding down to the
nearest whole number and (c) the aggregate purchase price for the Units being purchased by the
Investor will be delivered by or on behalf of the Investor to the Company.
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3.2 Conditions to the Obligations of the Parties.
(a) Conditions to the Company’s Obligations. The Company’s obligation to issue and
sell the Units to the Investor shall be subject to: (i) the receipt by the Company of the purchase
price for the Units being purchased hereunder as set forth on the Signature Page and (ii) the
accuracy of the representations and warranties made by the Investor and the fulfillment of those
undertakings of the Investor to be fulfilled prior to the Closing Date.
(b) Conditions to the Investor’s Obligations. The Investor’s obligation to purchase
the Units will be subject to the accuracy of the representations and warranties made by the Company
and the fulfillment of those undertakings of the Company to be fulfilled prior to the Closing Date,
including without limitation, those contained in the Placement Agreement, and to the condition that
the Placement Agent shall not have: (i) terminated the Placement Agreement pursuant to the terms
thereof or (ii) determined that the conditions to the closing in the Placement Agreement have not
been satisfied. The Investor’s obligations are expressly not conditioned on the purchase by any or
all of the Other Investors of the Units that they have agreed to purchase from the Company. The
Investor understands and agrees that, in the event that the Placement Agent in its sole discretion
determines that the conditions to closing in the Placement Agreement have not been satisfied or if
the Placement Agent Agreement may be terminated for any other reason permitted by such Agreement,
then the Placement Agent may, but shall not be obligated to, terminate such Agreement, which shall
have the effect of terminating this Subscription Agreement pursuant to Section 14 below.
3.3 Delivery of Funds.
(a) Delivery Versus Payment through The Depository Trust Company. The Investor elects
to settle the Shares purchased by such Investor by delivery versus payment through DTC. No
later than one (1) business day after the execution of this Agreement by the Investor and the
Company, the Investor shall confirm that the account or accounts at the Placement Agent to be
credited with the Units being purchased by the Investor have a minimum balance equal to the
aggregate purchase price for the Units being purchased by the Investor.
3.4 Delivery of Shares.
(a) Delivery Versus Payment through The Depository Trust Company. The Investor elects
to settle the Shares purchased by such Investor by delivery versus payment through DTC. No
later than one (1) business day after the execution of this Agreement by the Investor and the
Company, the Investor shall notify the Placement Agent of the account or accounts at the
Placement Agent to be credited with the Shares being purchased by such Investor. On the Closing
Date, the Company shall deliver the Shares to the Investor through DTC directly to the account(s)
at the Placement Agent identified by Investor and simultaneously therewith payment shall be made by
the Placement Agent by wire transfer to the Company.
4. Representations, Warranties and Covenants of the Investor.
The Investor acknowledges, represents and warrants to, and agrees with, the Company and the
Placement Agent that:
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4.1 The Investor (a) is knowledgeable, sophisticated and experienced in making, and is
qualified to make decisions with respect to, investments in shares presenting an investment
decision like that involved in the purchase of the Units, including investments in securities
issued by the Company and investments in comparable companies, (b) has answered all questions on
the Signature Page and the Investor Questionnaire and the answers thereto are true and correct as
of the date hereof and will be true and correct as of the Closing Date and (c) in connection with
its decision to purchase the number of Units set forth on the Signature Page, has received and is
relying only upon the Disclosure Package and the documents incorporated by reference therein and
the Offering Information..
4.2 (a) No action has been or will be taken in any jurisdiction outside the United States by
the Company or the Placement Agent that would permit an offering of the Units, or possession or
distribution of offering materials in connection with the issue of the Securities in any
jurisdiction outside the United States where action for that purpose is required, (b) if the
Investor is outside the United States, it will comply with all applicable laws and regulations in
each foreign jurisdiction in which it purchases, offers, sells or delivers Securities or has in its
possession or distributes any offering material, in all cases at its own expense and (c) the
Placement Agent is not authorized to make and has not made any representation, disclosure or use of
any information in connection with the issue, placement, purchase and sale of the Units, except as
set forth or incorporated by reference in the Base Prospectus, the Preliminary Prospectus
Supplement, the Prospectus Supplement or any free writing prospectus.
4.3 (a) The Investor has full right, power, authority and capacity to enter into this
Agreement and to consummate the transactions contemplated hereby and has taken all necessary action
to authorize the execution, delivery and performance of this Agreement, and (b) this Agreement
constitutes a valid and binding obligation of the Investor enforceable against the Investor in
accordance with its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’ and contracting
parties’ rights generally and except as enforceability may be subject to general principles of
equity (regardless of whether such enforceability is considered in a proceeding in equity or at
law) and except as to the enforceability of any rights to indemnification or contribution that may
be violative of the public policy underlying any law, rule or regulation (including any federal or
state securities law, rule or regulation).
4.4 The Investor understands that nothing in this Agreement, the Preliminary Prospectus
Supplement, the Prospectus, the Disclosure Package, the Offering Information or any other materials
presented to the Investor in connection with the purchase and sale of the Units constitutes legal,
tax or investment advice. The Investor has consulted such legal, tax and investment advisors and
made such investigation as it, in its sole discretion, has deemed necessary or appropriate in
connection with its purchase of Units. The Investor also understands that there is no established
public trading market for the Warrants being offered in the Offering, and that the Company does not
expect such a market to develop. In addition, the Company does not intend to apply for listing the
Warrants on any securities exchange. Without an active market, the liquidity of the Warrants will
be limited.
4.5 Since the date on which the Placement Agent first contacted the Investor about the
Offering, the Investor has not disclosed any information regarding the Offering to any third
parties (other than its legal, accounting and other advisors) and has not engaged in any purchases
or sales involving the securities of the Company (including, without limitation, any Short Sales
involving the Company’s securities). The Investor covenants that it will not engage in any
purchases or sales
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involving the securities of the Company (including Short Sales) prior to the time that the
transactions contemplated by this Agreement are publicly disclosed. The Investor agrees that it
will not use any of the Securities acquired pursuant to this Agreement to cover any short position
in the Common Stock if doing so would be in violation of applicable securities laws. For purposes
hereof, “Short Sales” include, without limitation, all “short sales” as defined in Rule 200
promulgated under Regulation SHO under the Exchange Act, whether or not against the box, and all
types of direct and indirect stock pledges, forward sales contracts, options, puts, calls, short
sales, swaps, “put equivalent positions” (as defined in Rule 16a-1(h) under the Exchange Act) and
similar arrangements (including on a total return basis), and sales and other transactions through
non-US broker dealers or foreign regulated brokers.
5. Survival of Representations, Warranties and Agreements; Third Party Beneficiary.
Notwithstanding any investigation made by any party to this Agreement or by the Placement Agent,
all covenants, agreements, representations and warranties made by the Company and the Investor
herein will survive the execution of this Agreement, the delivery to the Investor of the Shares and
Warrants being purchased and the payment therefor. The Placement Agent and Lazard Fréres & Co.
shall be third party beneficiaries with respect to the representations, warranties and agreements
of the Investor in Section 4 hereof.
6. Notices. All notices, requests, consents and other communications hereunder will be in
writing, will be mailed (a) if within the domestic United States by first-class registered or
certified airmail, or nationally recognized overnight express courier, postage prepaid, or by
facsimile or (b) if delivered from outside the United States, by International Federal Express or
facsimile, and (c) will be deemed given (i) if delivered by first-class registered or certified
mail domestic, three business days after so mailed, (ii) if delivered by nationally recognized
overnight carrier, one business day after so mailed, (iii) if delivered by International Federal
Express, two business days after so mailed and (iv) if delivered by facsimile, upon electronic
confirmation of receipt and will be delivered and addressed as follows:
(a) if to the Company, to:
Capstone Turbine Corporation
00000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
00000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
with copies to:
Xxxxxx Xxxxxxx Xxxxxx & Xxxxx, LLP
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: X. Xxxxx Xxxx, Esq.
Facsimile: (000) 000-0000
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: X. Xxxxx Xxxx, Esq.
Facsimile: (000) 000-0000
(b) if to the Investor, at its address on the Signature Page hereto, or at such
other address or addresses as may have been furnished to the Company in writing.
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7. Changes. This Agreement may not be modified or amended except pursuant to an instrument
in writing signed by the Company and the Investor.
8. Headings. The headings of the various sections of this Agreement have been inserted for
convenience of reference only and will not be deemed to be part of this Agreement.
9. Severability. In case any provision contained in this Agreement should be invalid,
illegal or unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein will not in any way be affected or impaired thereby.
10. Governing Law. This Agreement will be governed by, and construed in accordance with,
the internal laws of the State of New York, without giving effect to the principles of
conflicts of law that would require the application of the laws of any other jurisdiction.
11. Counterparts. This Agreement may be executed in two or more counterparts, each of which
will constitute an original, but all of which, when taken together, will constitute but one
instrument, and will become effective when one or more counterparts have been signed by each
party hereto and delivered to the other parties. The Company and the Investor acknowledge
and agree that the Company shall deliver its counterpart to the Investor along with the
Prospectus Supplement (or the filing by the Company of an electronic version thereof with
the Commission).
12. Confirmation of Sale. The Investor acknowledges and agrees that such Investor’s receipt
of the Company’s signed counterpart to this Agreement, together with the Prospectus
Supplement (or the filing by the Company of an electronic version thereof with the
Commission), shall constitute written confirmation of the Company’s sale of Units to such
Investor.
13. Press Release. The Company and the Investor agree that the Company shall, prior to the
opening of the financial markets in New York City on the business day immediately after the
date hereof, (a) issue a press release announcing the Offering and disclosing all material
information regarding the Offering and (b) file a Current Report on Form 8-K with the
Securities and Exchange Commission including a form of this Agreement and a form of Warrant
as exhibits thereto.
14. Termination. In the event that the Placement Agreement is terminated by the Placement
Agent pursuant to the terms thereof, this Agreement shall terminate without any further
action on the part of the parties hereto.
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Exhibit A
CAPSTONE TURBINE CORPORATION
INVESTOR QUESTIONNAIRE
Pursuant to Section 3 of Annex I to the Agreement, please provide us with the
following information:
1.
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The exact name that your Shares and Warrants are to be registered in. You may use a nominee name if appropriate: | _____________________ | ||
2.
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The relationship between the Investor and the registered holder listed in response to item 1 above: | _____________________ | ||
3.
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The mailing address of the registered holder listed in response to item 1 above: | _____________________ | ||
4.
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The Social Security Number or Tax Identification Number of the registered holder listed in the response to item 1 above: | _____________________ | ||
5.
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Name of DTC Participant (broker-dealer at which the account or accounts to be credited with the Shares are maintained): | _____________________ | ||
6.
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DTC Participant Number: | _____________________ | ||
7.
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Name of Account at DTC Participant being credited with the Shares: | _____________________ | ||
8.
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Account Number at DTC Participant being credited with the Shares: | _____________________ |
EXHIBIT B
FORM OF WARRANT
