EXHIBIT 10.12



                              TELEGEN CORPORATION
                           A Corporation Corporation


                                COMMON STOCK AND
                           WARRANTS FOR COMMON STOCK
                              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 UNITS
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.

         Units  of  one  share  of  Common  Stock  (the   "Shares")  of  Telegen
Corporation (the "Company"),  a warrant to purchase one share of Common Stock at
an  exercise  price of $0.01 per share and a warrant  to  purchase  one share of
Common  Stock at an  exercise  price of $4.00 per share of the Company are being
offered  for $2.00 per  Unit.  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  remitted  to  an  escrow   account
         established by the Company's  Placement Agent,  Capitol Bay Securities,
         by check made out to "Telegen Corporation" or by wire transfer

 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.


<PAGE>



                             SUBSCRIPTION AGREEMENT

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

                               TELEGEN CORPORATION

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


                                  500,000 Units
                    of One Share of Common Stock no par value
and One Warrant to purchase One share of Common Stock at a $0.01 exercise price,
and One Warrant to purchase One Share of Common Stock at a $4.00 exercise price
                             of TELEGEN CORPORATION
                           $100,000 Minimum Investment

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


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 units (the "Units"), each
unit  consisting of (i) one share of the Company's  Common Stock,  no par value,
(ii) a warrant to purchase  one share of the  Company's  Common Stock at a $0.01
per share  exercise  price (each,  a " $0.01  Warrant"),  and (iii) a warrant to
purchase one share of the Company's  Common Stock at a $4.00 per share  exercise
price (each,  a "$4.00  Warrant," the $0.01  Warrants and the $4.00 Warrants are
collectively  the  "Warrants")  specified  on the  signature  page  hereto.  The
purchase price per Unit (the "Purchase  Price") is $2.00.  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 500,000 Units.

         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 $2.00 per Unit. 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 Units (the  "Payment")  to an escrow  account
established by the Company's Placement Agent as of the date hereof.

         (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,  or part thereof and
receipt by the Company of the Payment,  will promptly  provide written notice to
the undersigned of receipt and acceptance of such subscription, or part thereof.
Subject to the acceptance by the Company of the  subscription,  or part thereof,
the Company shall cause to be issued to the

<PAGE>



undersigned  with reasonable  promptness the number of Units  represented by the
accepted portion of the subscription.

         (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, (ii) acceptance by the Company of the undersigned's subscription (the
"Subscription")  and (iii) the form of the Warrants attached hereto as Exhibit A
and Exhibit B, respectively, which specifies the rights afforded to each Warrant
(the  "Warrant  Agreement").  This  Agreement  and the Warrant  Agreement  shall
constitute the Unit Agreements.

II.      REPRESENTATIONS AND WARRANTIES OF THE UNDERSIGNED.

         The undersigned  hereby  represents and warrants to and agrees with the
Company as follows:

         (A) Authorization;  Residence Address.  This Agreement  constitutes the
undersigned's  valid and legally binding  obligation,  enforceable in accordance
with its  terms.  The  undersigned's  residence  address  is as set forth on the
signature page hereto.

         (B) Purchase Entirely for Own Account.  This Agreement is made with the
undersigned in reliance upon the  undersigned's  representation  to the Company,
which by the  undersigned's  execution of this Agreement the undersigned  hereby
confirms,  that the Units will be acquired for investment for the  undersigned's
own  account,  not as a nominee  or agent,  and not with a view to the resale or
distribution  of any  part  thereof,  and that the  undersigned  has no  present
intention of selling,  granting any participation in, or otherwise  distributing
the same. By executing this Agreement,  the undersigned  further represents that
the undersigned does not presently have any contract, undertaking, agreement, or
arrangement with any person to sell,  transfer,  or grant participations to such
person or to any third  person,  with  respect to any portion of the Units.  The
undersigned  represents  that it has full power and authority to enter into this
Agreement.

         (C) Qualified Investor. 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.

         (D) Disclosure of  Information.  The undersigned  understands  that the
Company is a public reporting  Company under the 1934 Act and that it is current
on  its  reporting   requirements  and  that  such  reports  represent  all  the
information  the  undersigned  considers  necessary or appropriate  for deciding
whether to acquire the Units,  and that in particular,  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,  the Company's  press  releases dated
August 7, 1997 and August 19, 1997 and the  Company's  disclosure  regarding its
common stock subscription offering in August 1997 (the "Disclosure Documents").


                                       -2-

<PAGE>



         (E) Investment Experience. The undersigned is an investor in securities
of companies in the development  stage and acknowledges  that it is able to fend
for itself, can bear the economic risk of its investment,  and has directly,  or
indirectly  through  its agents,  advisors or other  persons on which it relies,
such  knowledge  and  experience  in  financial  or business  matters that it is
capable of evaluating the merits and risks of the  investment in the Stock.  The
undersigned  also  represents  it has not  been  organized  for the  purpose  of
acquiring  the Units.  The  undersigned  further  represents  that it has had an
opportunity to review the Unit  Agreements and ask questions and receive answers
from the  Company  regarding  the terms and  conditions  of the  offering of the
Units.

         (F) Restricted Securities.  The undersigned understands that the shares
of Common  Stock,  the  Warrants,  and the shares of Common Stock  issuable upon
conversion  thereof will be characterized as "restricted  securities"  under the
federal  securities laws inasmuch as they are being acquired from the Company in
a  transaction  not  involving  a public  offering  and that under such laws and
applicable  regulations such shares may be resold without registration under the
Act, only in certain limited circumstances.

         (G) Further Limitations on Disposition. Without in any way limiting the
representations  set forth above, the undersigned further agrees not to make any
disposition of all or any portion of the Stock unless and until:

                  (a) There is then in effect a Registration Statement under the
Act  covering  such  proposed  disposition  and  such  disposition  is  made  in
accordance with such Registration Statement; or

                  (b) (i) The undersigned shall have notified the Company of the
proposed  disposition  and shall  have  furnished  the  Company  with a detailed
statement of the circumstances  surrounding the proposed  disposition,  and (ii)
the  undersigned  shall have  furnished  the Company with an opinion of counsel,
reasonably  satisfactory to the Company,  that such disposition will not require
registration under the Act.

         (H)  Responsibility  for Tax  Consequences.  The undersigned has had an
opportunity to review the federal, state, local, and foreign tax consequences of
this  investment  and  the  transactions  contemplated  by the  Unit  Agreements
(including  any tax  consequences  that may result  now or in the  future  under
recently  enacted tax  legislation)  and has had the opportunity to consult with
his  tax  advisors,  if  any,  regarding  such  consequences.   The  undersigned
acknowledges that he is not relying on any statements or  representations of the
Company or any of its agents in regard to such tax  consequences and understands
that he (and not the Company)  shall be  responsible  for his own tax  liability
that may arise as a result of this investment or the  transactions  contemplated
by the Unit  Agreements.  The undersigned  acknowledges  that the Company has no
obligation  in regard to the future  conduct of its  business  to act or refrain
from acting in any manner, regardless of the loss of any tax benefit to Investor
in connection with the purchase, ownership, or sale of the Units or Common Stock
issuable upon conversion thereof, which may result from such action or inaction.

         (I) Legends.  It is understood  that the Units and the shares of Common
Stock  issuable upon  conversion  thereof and any  securities  issued in respect
thereof or exchange therefor may bear one or all of the following legends:

                  (a)  "THESE  SECURITIES  HAVE NOT BEEN  REGISTERED  UNDER  THE
SECURITIES  ACT OF 1933.  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."


                                       -3-

<PAGE>



                  (b)  Any  legend   required  by  the  laws  of  the  State  of
California,  including  any legend  required  by the  California  Department  of
Corporations or by the laws of any other state or jurisdiction.

                  (c) Lock-Up  legends as specified  under Section IV(B) of this
Agreement.

III.     REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

         (A) SEC Documents.  The Company has made available to the undersigned a
true and  complete  copy of the  Disclosure  Documents.  As of their  respective
filing dates, the Company has made all necessary filings with the Securities and
Exchange  Commission  ("SEC"),  the Company's  SEC Documents (as defined  below)
comply in all material respects with the requirements of the Securities Exchange
Act of 1934 or the Securities Act of 1933, as amended, and none of the Company's
SEC Documents contain any untrue statement of a material fact or omit to state a
material  fact  required to be stated  therein or necessary in order to make the
statements made, in light of the  circumstances  under which they were made, not
misleading.  For  purposes of this  section,  the SEC  Documents  shall mean the
Disclosure Documents, except for Exhibits G and H thereto.

         (B) Organization  and Good Standing.  The Company is a corporation duly
organized,  validly existing and in good standing under the laws of the State of
California,  and has all requisite corporate power and authority to carry on its
respective  businesses as now  conducted.  The Company is qualified as a foreign
corporation  in any  jurisdiction  in which a failure to so qualify would have a
material adverse effect on the Company.

         (C) Power, Authorization and Validity.

                  (a) The  Company  has the  corporate  power and  authority  to
execute and deliver, and to consummate the transactions contemplated by the Unit
Agreements  to which it is or will be a party  and to  perform  its  obligations
under each of them.  This  Subscription  has been duly and validly  approved and
authorized by the Company.  The execution and delivery of, and the  consummation
of the  transactions  contemplated  by, each of the Unit Agreements to which the
Company  is or  will  be a party  has  been  duly  authorized  by all  necessary
corporate action on the part of the Company.

                  (b) No  consent,  approval,  order  or  authorization  of,  or
registration,  declaration or filing with, any governmental  entity, is required
by or with respect to the Company in connection  with the execution and delivery
of, and the  consummation by it of the  transactions  contemplated by any of the
Unit  Agreements to which the Company is or will be a party,  except for causing
the Registration Statement to be declared effective by the SEC.

                  (c) Each of the Unit  Agreements  to which the  Company  is or
will be a party has been, or upon its execution and delivery by the Company will
have been, duly executed and delivered by it, and constitutes or will constitute
upon its execution and delivery,  a valid and binding obligation of the Company,
enforceable in accordance with its terms.

         (D) No  Violation of Existing  Agreements.  Neither the  execution  and
delivery  of the  Unit  Agreements  nor  the  consummation  of the  transactions
contemplated  hereby or  thereby  will  conflict  with,  or result in a material
breach or violation of, any provision of the Articles of Incorporation or Bylaws
of the Company,  as currently in effect, any material  instrument or contract to
which  the  Company  is a party or by  which  any such  party is  bound,  or any
federal,  state  or  local  judgment,  writ,  decree,  order,  statute,  rule or
regulation applicable to any such person.  Neither the execution and delivery of
the Unit  Agreements,  nor the  consummation  of the  transactions  contemplated
hereby or thereby will directly have a material adverse effect on the Company.

                                       -4-

<PAGE>



         (E) Financial  Statements.  The unaudited  financial  statements of the
Company included in its Form 10-Q for the quarterly period ending June 30, 1997,
as filed with the  Securities  and Exchange  Commission,  have been  prepared in
accordance with GAAP and present fairly the financial policies of the Company as
of such date and the results of operations,  equity  transactions and changes in
financial  position of the Company for the periods  indicated,  except as may be
indicated therein or in the notes thereto.

IV.      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
the  Unit  Agreements  or  any  agreements  of  the  undersigned   hereunder  or
thereunder, and that the Unit Agreement 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.

         (C)  California  Corporate  Securities  Law. THE SALE OF THE SECURITIES
THAT  IS THE  SUBJECT  OF  THIS  AGREEMENT  HAS  NOT  BEEN  QUALIFIED  WITH  THE
COMMISSIONER OF  CORPORATIONS  OF THE STATE OF CALIFORNIA,  THE ISSUANCE OF SUCH
SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE  CONSIDERATION  FOR SUCH
SECURITIES  PRIOR  TO  SUCH  QUALIFICATION  IS  UNLAWFUL,  UNLESS  THE  SALE  OF
SECURITIES IS EXEMPT FROM THE QUALIFICATION BY SECTION 25100,  25102 OR 25105 OF
THE  CALIFORNIA  CORPORATIONS  CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT
ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED UNLESS THE SALE
IS SO EXEMPT.

         (D) 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 THIS
DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

V.       REGISTRATION RIGHTS AND LOCK-UP AGREEMENT.

         (A) The undersigned will be entitled to registration rights as follows:
(i) the  Company  shall  prepare and file,  within  thirty (30) days of the date
hereof, a registration statement on Form S-3 or any other Form that is available
to the Company at that time (the "Registration  Statement")  covering the resale
of the Common Stock  purchased  hereunder  and the issuance of Common Stock upon
exercise of the Warrants under the Unit  Agreements.  The Company further agrees
to use its best efforts to cause the Registration Statement to be declared

                                       -5-

<PAGE>



effective by the  Securities  and Exchange  Commission  within  ninety (90) days
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 Common Stock sold hereunder and Common
Stock issuable under the Warrants cannot be freely resold pursuant to Rule 144.

         (B) The  undersigned  understands,  acknowledges  and  agrees  that the
Common Stock purchased  hereunder and the Common Stock issuable upon exercise of
the Warrants will be subject to certain lock-up restrictions (the "Locked Common
Stock"). The Locked Common Stock shall be divided into four equal groups (each a
"Locked Common Stock Group").  Each Locked Common Stock Group will be subject to
a lock-up period commencing on the effective date of this Subscription Agreement
and continuing  until January 1, 1998,  April 1, 1998, July 1, 1998, and October
1, 1998,  respectively (each a "Lock-Up Period").  During the Lock-Up Period for
each respective Locked Common Stock Group, the undersigned will not, without the
prior written consent of the Company,  offer,  sell,  contract to sell,  pledge,
grant any option to sell, or otherwise  dispose of,  directly or indirectly  any
issued or issuable Common Stock with respect thereto.

                  Notwithstanding  this lock-up provision,  if the holder of the
Locked Common Stock is an  individual,  he or she may transfer  shares of Common
Stock on death by gift, will, or intestacy, to his or her immediate family or to
a trust the  beneficiaries  of which are exclusively a member or members of such
holder's immediate family; provided,  however, that in any such case it shall be
a condition to any such transfer that any such  transferee  execute an agreement
stating that the  transferee  is receiving and holding such Common Stock subject
to the provisions of this Agreement,  and there shall be no further  transfer of
such Common Stock except in accordance with this Agreement.

                  With respect to the Locked Common Stock,  all shares of Common
Stock issued shall be stamped or imprinted  with a legend in  substantially  the
following  form,  except  that the  Lock-Up  Period in the  legend  below  shall
correspond to the applicable Lock-Up Period for each Locked Common Stock Group:

         THE SALE OR TRANSFER OF THE SECURITIES  REPRESENTED BY THIS CERTIFICATE
         IS SUBJECT TO A LOCK-UP  PROVISION  UNTIL  [JANUARY  1,  1998/APRIL  1,
         1998/JULY 1,  1998/OCTOBER 1, 1998] SUBJECT TO THE TERMS AND CONDITIONS
         OF A  SUBSCRIPTION  AGREEMENT,  A COPY OF WHICH  MAY BE  OBTAINED  UPON
         WRITTEN REQUEST TO THE SECRETARY OF THE CORPORATION.

                  The holder of the Locked Common Stock further understands that
the  disposition  of any of the  Locked  Common  Stock in  contravention  of the
lock-up  provision  herein shall be voidable by the Company and that the Company
will have the right to do all things necessary to void such transfer.

                  The Company  agrees that upon  termination  of the  respective
Lock-Up  Periods,  the terms and conditions set forth in this  subsection  shall
cease with respect to the applicable Locked Common Stock Group. The Company also
agrees  that  upon a Change  of  Control  (as  defined  below),  the  terms  and
conditions set forth in this  subsection  shall cease with respect to all of the
Locked Common Stock Groups.  A Change of Control shall mean a  consolidation  or
merger of the  Company  with or into any  other  corporation,  or any  entity or
person,  or  exchange   substantially  all  of  the  outstanding  stock  of  the
Corporation for shares of another entity or property,  in which,  after any such
transaction,  the prior shareholders of the Company hold less than fifty percent
(50%) of the voting shares of the continuing or surviving entity.

                                       -6-

<PAGE>




VI.      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 Company and
a majority in interest of the holders of the Common Stock purchased  pursuant to
this Subscription offering.

         (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.

         (E) This  Subscription  Agreement and the signature pages hereto may be
signed in  counterparts,  each of which shall be deemed an original,  but all of
which taken together shall constitute one and the same instrument.

VII.     SIGNATURES.


THE COMPANY


By:  _______________________________________________________
         Warren M. Dillard, Chief Executive Officer



THE PURCHASER

The signature page for the purchaser of Units under this Subscription  Agreement
is  contained  as part of the  Subscription  Package and is entitled  "Signature
Page."

                                       -7-

<PAGE>



                           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.  Investors  purchasing  as a
corporation should complete all requested information on page D-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.


                                       -8-

<PAGE>



                               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  ______________________
Units (each unit  consisting  of one share of Common  Stock and Warrants for one
share of Common  Stock at an exercise  price of $0.01 per share and one share of
Common  Stock at an  exercise  price of $4.00 per share) of Telegen  Corporation
subject to the terms and conditions of this Subscription Agreement at a purchase
price  of $2.00  per Unit (as  defined  in the  Subscription  Agreement)  for an
aggregate  purchase price of $______________  (the "Funds").  Stock certificates
for  the  Common  Stock  and  Warrant  agreements  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 the  Warrant  Agreement  (as  defined  in the
Subscription  Agreement),  (ii) the  representations  and warranties made by the
undersigned  in the  Subscription  Agreement are true,  and (iii) 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:

<TABLE>
<CAPTION>
<S>                        <C>
                  _____    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).
</TABLE>

Section 2.  Title.

         Please  indicate  exactly how you wish the name of the holder to appear
on the certificate representing the Shares:_____________________________________

<TABLE>
<CAPTION>
 Section 3.  Signatures.

                                          Signatory 1 (Individual)                        Signatory 2 (Individual)
<S>                           <C>                                               <C>                                          
Name:                         _____________________________________________     ___________________________________________  
                                                                                                                             
Signature:                    _____________________________________________     ___________________________________________  
                                                                                                                             
Social Security Number:       _____________________________________________     ___________________________________________  
                                                                                                                             
Residence Address:            _____________________________________________     ___________________________________________  

                              _____________________________________________     ___________________________________________  
                                                                                                                             
Mailing Address:              _____________________________________________     ___________________________________________  
                                                                                                                             
Home Phone:                   _____________________________________________     ___________________________________________  
                                                                                                                             
Work Phone:                   _____________________________________________     ___________________________________________  
                                                                                                                             
Date:                         _____________________________________________     ___________________________________________  
                                                                                                                             
</TABLE>
                              
                                       A-1

<PAGE>



                               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
______________________  Units (each unit consisting of one share of Common Stock
and  Warrants  for one share of Common  Stock at an exercise  price of $0.01 per
share and one share of Common Stock at an exercise  price of $4.00 per share) of
Telegen  Corporation  subject to the terms and  conditions of this  Subscription
Agreement at a purchase price of $2.00 per Unit (as defined in the  Subscription
Agreement)  for an aggregate  purchase price of  $______________  (the "Funds").
Stock  certificates  for the  Common  Stock  and  Warrant  Agreements  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 made by the undersigned and 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  trustee(s)  hereby certify that they have read and
understand this Subscription  Agreement and the Warrant Agreement (as defined in
the 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.

<TABLE>

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]
<CAPTION>
<S>                                                          <C>

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: ____________________________________________

</TABLE>
                                       B-1

<PAGE>



                               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
______________________  Units (each unit consisting of one share of Common Stock
and  Warrants  for one share of Common  Stock at an exercise  price of $0.01 per
share and one share of Common Stock at an exercise  price of $4.00 per share) of
Telegen  Corporation  subject to the terms and  conditions of this  Subscription
Agreement at a purchase price of $2.00 per Unit (as defined in the  Subscription
Agreement)  for an aggregate  purchase price of  $______________  (the "Funds").
Stock  certificates  for the  Common  Stock  and  Warrant  agreements  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  made  by the  undersigned  and  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 and the Warrant Agreement
(as defined in the 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.

<TABLE>
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].
<CAPTION>
<S>                                                           <C>
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: ____________________________________________________

</TABLE>

                                       C-1

<PAGE>



                               TELEGEN CORPORATION
                           CORPORATION SIGNATURE PAGE

         Your  signature  on  this  Corporation  Signature  Page  evidences  the
agreement by the officer(s),  on behalf of the  corporation,  to be bound by the
Subscription Agreement.

         (A)    The    undersigned     investor,     hereby     subscribes    to
______________________  Units (each unit consisting of one share of Common Stock
and  Warrants  for one share of Common  Stock at an exercise  price of $0.01 per
share and one share of Common Stock at an exercise  price of $4.00 per share) of
Telegen  Corporation  subject to the terms and  conditions of this  Subscription
Agreement at a purchase price of $2.00 per Unit (as defined in the  Subscription
Agreement)  for an aggregate  purchase price of  $______________  (the "Funds").
Stock  certificates  for the  Common  Stock  and  Warrant  agreements  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 officers represent that (a) the representations and
warranties made by the undersigned and contained in the  Subscription  Agreement
are  accurate  and (b) the  Corporation  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 corporation's  subscription and will promptly send the Company
written confirmation of such change.

         (C) The undersigned  officer(s)  hereby certify that they have read and
understand this Subscription  Agreement and the Warrant Agreement (as defined in
the Subscription Agreement).

         (D) The  undersigned  officers  hereby  represent  and warrant that the
persons  signing this  Subscription  Agreement on behalf of the  Corporation are
duly  authorized to acquire the Shares and sign this  Subscription  Agreement on
behalf of the Corporation and, further, that the undersigned Corporation has all
requisite  authority  to purchase  such Shares and enter into this  Subscription
Agreement.


<TABLE>
<CAPTION>
<S>                                                           <C>
Name of
Corporation: ___________________________________________________________________________________________________________

Address of
Principal Offices: _____________________________________________________________________________________________________

Authorized                                                    Authorized
Officer:  __________________________________________________  Officer:   _______________________________________________
           (Please Type or Print)                                               (Please Type or Print)


By: ________________________________________________________  By: ______________________________________________________
      (Signature of Authorized Officer)                             (Signature of Authorized Officer)


Date: ______________________________________________________  Date: ____________________________________________________

</TABLE>

                                       D-1