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Exhibit 99.4
FORM OF SUBSCRIPTION AGREEMENT
This SUBSCRIPTION AGREEMENT (this "Agreement"), dated as of
[ ], 1999, is entered into by and among Cherokee International,
LLC, a California limited liability company (the "Company"), and the person
whose name appears on the signature page attached hereto (such person being
referred to herein as the "Purchaser").
Pursuant to the Company's 1999 Unit Purchase Plan (the
"Purchase Plan"), the Management Committee of the Company (the "Board") has
determined that the Purchaser is to be granted the right to purchase
non-voting Class B Units ("Units") of the Company, on the terms and
conditions set forth herein, and hereby grants such right.
Any capitalized terms not defined herein shall have their
respective meanings set forth in the Purchase Plan.
1. PURCHASE AND SALE OF SECURITIES.
(a) PURCHASE AND SALE. Subject to the terms
and conditions hereof, the Company hereby agrees to issue and sell to the
Purchaser, and the Purchaser hereby irrevocably agrees to subscribe for and
purchase from the Company, that number of Units set forth below the name of
the Purchaser on the signature page attached hereto (the "Purchase
Commitment"). The purchase price per Unit shall be as set forth on the
signature page attached hereto. The obligations of the Purchaser hereunder
shall be complete and binding upon the execution and delivery hereof.
(b) THE CLOSING. The closing of the purchase
and sale of the Units contemplated by this Agreement (the "Closing") shall
take place at 2841 Dow Avenue, Tustin, California at 10:00 a.m. on the date
hereof (the "Closing Date"). At the Closing, the Company shall deliver to the
Purchaser certificates evidencing the Units purchased by the Purchaser and
the Purchaser shall deliver an amount equal to the Purchase Commitment by
check payable in next day funds or by wire transfer of same day funds.
2. CALL OPTION. Upon termination of Purchaser's
employment or service with the Company or any Parent or Subsidiary for any
reason, the Company
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shall have the right, but not the obligation, to repurchase the Units
purchased pursuant to this Agreement in accordance with the terms and
conditions set forth in this Section 2 (the "Call Option").
(a) RIGHT TO REPURCHASE UPON PURCHASER'S
TERMINATION OF EMPLOYMENT OR SERVICE WITH
THE COMPANY.
(i) TERMINATION FOR CAUSE. In the
event Purchaser's employment or service with the Company or any Parent or
Subsidiary is terminated for Cause (as defined below), the Company shall have
the right, but not the obligation, to repurchase all or any portion of the
Units purchased pursuant to this Agreement. The purchase price for each Unit
shall be the lower of (i) the Purchase Price and (ii) the Fair Market Value
on the date the Company the exercises the Call Option. For purposes of this
Agreement "Cause" shall mean: (i) Purchaser's acts of personal dishonesty,
theft, fraud or embezzlement in connection with his or her duties as an
employee, officer, or Board member of the Company; (ii) Purchaser's use of
alcohol or drugs that, in the Board's determination, interferes with
Purchaser's performance of his or her essential job functions with the
Company or any Parent or Subsidiary; (iii) Purchaser's excessive absenteeism
that, in the Board's determination, interferes with the Purchaser's ability
to perform his or her essential job functions for the Company or any Parent
or Subsidiary; (iv) any conflict of interest between Purchaser and the
Company or any Parent or Subsidiary that, in the Board's determination,
inappropriately affects Purchaser's ability to carry on Purchaser's normal
duties as an employee of the Company or any Parent or Subsidiary; (v)
Purchaser's act of gross insubordination in connection with his or her duties
as an employee, officer, or Board member of the Company; (vi) Purchaser's
conviction of or guilty plea to a felony; (vii) Purchaser's material breach
of the Company's Code of Conduct; or (viii) any material breach by Purchaser
of any employment or other agreement between the Purchaser and the Company or
any Parent or Subsidiary.
(ii) TERMINATION OTHER THAN FOR CAUSE.
In the event Purchaser's employment or service with the Company or any Parent
or Subsidiary is terminated for any reason other than for Cause, the Company
shall have the right, but not the obligation, to repurchase all or any
portion of the Units purchased pursuant to this Agreement. The purchase price
for each Unit shall be equal to the Fair Market Value as of the date the
Company exercises the Call Option.
(b) EXERCISE OF CALL OPTION. The Company may
at any
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time, and from time to time, by giving written notice (the "Call Notice") to
the Purchaser or any transferee (either, a "Holder"), elect to purchase all
or any portion of the Units purchased pursuant to this Agreement, at the
purchase price determined in accordance with subsection (a) above, as
applicable.
(c) PAYMENT. Payment of the applicable
purchase price (as determined in accordance with subsection (a) above) shall
be made, at the option of the Company, in cash, by check, by cancellation of
all or a portion of any outstanding indebtedness of the Holder to the
Company, or by any combination thereof within 30 days after receipt of the
Call Notice or in the manner and at the times set forth in the Call Notice.
(d) TERMINATION OF CALL OPTION. In the event
the Company becomes a Public Company, the Call Option shall immediately
terminate as to any Units purchased pursuant to this Agreement.
3. PUT OPTION. Upon termination of Purchaser's
employment or service with the Company or any Parent or Subsidiary as a
result of Purchaser's death or Disability, Purchaser or Purchaser's estate,
successor or beneficiary, as the case may be, shall have the right, but not
the obligation, to cause the Company to repurchase the Units purchased
pursuant to this Agreement in accordance with the terms and conditions set
forth in this Section 3 (the "Put Option").
(a) RIGHT TO CAUSE REPURCHASE UPON PURCHASER'S
TERMINATION OF EMPLOYMENT OR SERVICE WITH
THE COMPANY. In the event Purchaser's
employment or service with the Company or any Parent or Subsidiary is
terminated as a result of Purchaser's death or Disability, Purchaser or
Purchaser's estate, successor or beneficiary, as the case may be, shall have
the right, but not the obligation, to cause the Company to repurchase the
Units purchased pursuant to this Agreement. The purchase price for each Unit
shall be equal to the Fair Market Value as of the date the Purchaser or
Purchaser's estate, successor or beneficiary, as the case may be, exercises
the Put Option.
(b) EXERCISE OF PUT OPTION. To exercise the
put right referenced above, the Purchaser or the Purchaser's estate,
successor or beneficiary, as the case may be, must, within thirty (30) days
following termination of Purchaser's employment with the Company or any
Parent or Subsidiary as a result of Purchaser's death or Disability, give
written notice (the "Put Notice") to the Company indicating the number of
Units as to which the right is being exercised.
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(c) PAYMENT. Payment of the applicable
purchase price (as determined in accordance with subsection (a) above) shall
be made, at the option of the Company, in cash, by check, by cancellation of
all or a portion of any outstanding indebtedness of the Purchaser to the
Company, or by any combination thereof within 30 days after receipt of the
Put Notice or in the manner and at the times set forth in the Put Notice.
(d) TERMINATION OF PUT OPTION. In the event
the Company becomes a Public Company, the Put Option shall immediately
terminate as to any Units purchased pursuant to this Agreement.
4. REPRESENTATIONS OF THE PURCHASER. The Purchaser
represents and warrants to the Company as follows:
(a) AUTHORITY. The Purchaser has the legal
capacity and authority to execute, deliver and perform its obligations under
this Agreement.
(b) BINDING OBLIGATION. This Agreement and
the Operating Agreement are legal, valid and binding obligations of the
Purchaser, enforceable in accordance with their terms, except that the
enforcement thereof may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and to general principles of equity (regardless
of whether such enforcement is considered in a proceeding in equity or at
law).
(c) RECEIPT OF INFORMATION. The Purchaser
has received and reviewed this Agreement, the Operating Agreement and all
such information as he or she deems necessary and appropriate to enable him
or her to evaluate the financial risk inherent in making an investment in the
Units, has had access to officers and other representatives of the Company
and has received satisfactory and complete information concerning the
business and financial condition of the Company in response to all inquiries
in respect thereof.
(d) INVESTMENT REPRESENTATIONS.
(i) The Purchaser is acquiring the Units
purchased hereunder with his or her own funds for investment, for
his or her own account, and not with a view to the sale or
distribution of all or any part thereof in any transaction that
would be in violation of the securities laws of
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the United States, and he or she has no present intention of selling,
transfer ring or otherwise distributing any of the Units. The Purchaser
does not have any contract, undertaking, agreement or arrangement with
any person, firm, entity or corporation to sell, transfer or otherwise
distribute any Units to such person, firm, entity or corporation.
(ii) The Purchaser agrees that in no event
will he or she make a disposition of any Units or any interest
therein, unless such disposition is in compliance with the Operating
Agreement.
(iii) The Purchaser does not require the
assistance of an investment advisor or other purchaser
representative to participate in the transactions contemplated by
this Agreement; has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks
of his or her investment in the Company; has the ability to bear the
economic risks of its investment for an indefinite period of time;
can afford the complete loss of its investment; and recognizes that
an investment in the Units involves substantial risk.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to the Purchaser as follows:
(a) ORGANIZATION, AUTHORITY, ETC. The
Company is a limited liability company duly organized, validly existing and
in good standing under the laws of the State of California and has all
requisite limited liability company power and authority to own or lease and
operate its properties and assets and to carry on its business as now
conducted. The Company has all requisite limited liability company power and
authority to enter into this Agreement, to issue the Units and to perform its
obligations hereunder.
(b) ACTS AND PROCEEDINGS. The execution and
delivery of this Agreement and the transactions contemplated hereby have been
duly and validly authorized, and all necessary limited liability company
action has been taken to make this Agreement a legal, valid and binding
obligation of the Company, enforceable in accordance with its terms, except
that the enforcement thereof may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and to general principles of equity
(regardless of whether such enforcement is considered in a proceeding in
equity or at law).
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(c) VALID ISSUANCE. When issued and paid for
by the Purchaser, as provided for herein, the Units purchased hereunder will
be duly and validly issued.
6. CONDITIONS TO OBLIGATIONS OF THE PURCHASER. The
Purchaser's obligation to purchase and pay for the Purchaser's Purchase
Commitment at the Closing is subject to the fulfillment (or waiver by the
Purchaser), prior to or at the time of the Closing, of the following
conditions:
(a) REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Company contained in Section 5 hereof
shall be true and correct in all material respects when made and at the time
of the Closing.
(b) PERFORMANCE. The Company shall have duly
performed and complied in all material respects with all agreements and
conditions contained in this Agreement required to be performed or complied
with by it prior to or at the Closing.
7. CONDITIONS TO OBLIGATIONS OF COMPANY. The
obligations of the Company to issue and sell the Units to be purchased by the
Purchaser at the Closing are subject to the fulfillment (or waiver by the
Company), prior to or at the time of the Closing, of the following conditions:
(a) OPERATING AGREEMENT. The Purchaser shall
have agreed in a writing acceptable to the Company to be bound by the
Operating Agreement.
(b) REPRESENTATIONS AND WARRANTIES. The
representations and warranties made by the Purchaser in Section 4 hereof
shall be true and correct in all material respects when made and at the time
of the Closing.
(c) PERFORMANCE. The Purchaser shall have
duly performed and complied in all material respects with all agreements and
conditions contained in this Agreement required to be performed or complied
with by the Purchaser prior to or at the Closing.
8. LEGENDS. All certificates evidencing the Units
purchased and sold hereunder shall bear any legend required to be placed
thereon by any applicable state, foreign, provincial or local securities law.
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9. CERTAIN RIGHTS AND OBLIGATIONS AS AN EXISTING
MEMBER. For purposes of Sections 6.1 and 6.2 of the Operating Agreement and
the definition of a Permitted Disposition set forth therein, the Purchaser
shall, to the extent of the Units acquired hereunder, be considered to be an
"Existing Member" and any transferor (and subsequent transferor) of the Units
to the extent permitted by the Operating Agreement shall also be so deemed to
be an "Existing Member."
10. AGREEMENT NOT A CONTRACT OF EMPLOYMENT. Neither the
Purchase Plan, the granting of the right to purchase Units, this Agreement
nor any other action taken pursuant to the Purchase Plan shall constitute or
be evidence of any agreement or understanding, express or implied, that the
Purchaser has a right to continue to provide services as an officer, Board
member, employee, consultant or advisor of the Company or any Parent,
Subsidiary or affiliate of the Company for any period of time or at any
specific rate of compensation.
11. WITHHOLDING REQUIREMENTS. The Company's obligations
under this Agreement shall be subject to all applicable tax and other
withholding requirements, and the Company shall, to the extent permitted by
law, have the right to deduct any withholding amounts from any payment or
transfer of any kind otherwise due to the Purchaser or Purchaser's estate,
successor or beneficiary, as the case may be.
12. MISCELLANEOUS.
(a) AMENDMENT. Neither this Agreement nor
any provision hereof may be changed, waived, discharged or terminated orally
or by course of dealing, but only by a statement in writing signed by the
party against which enforcement of the change, waiver, discharge or
termination is sought.
(b) NOTICES. All notices and other
communications provided for or permitted hereunder shall be made in writing
by hand-delivery, air courier, or facsimile:
(i) If to the Purchaser, addressed to it
at the address set forth on the signature page attached hereto, or
at such other address as the Purchaser may specify by written notice
to the Company; or
(ii) If to the Company:
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Cherokee International, LLC
2841 Dow Avenue
Tustin, California 92780
Facsimile No: (714) 508-5888
Attn: Rita Patel
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue, Suite 3400
Los Angeles, CA 90071
Facsimile No: (213) 687-5600
Attn: Jeffrey H. Cohen
and
GFI Energy Ventures LLC
11611 San Vicente Blvd., Suite 710
Los Angeles, CA 90049
Facsimile No: (310) 442-0540
Attn: Ian Schapiro
All such notices and communications shall be deemed to have been duly given:
when delivered by hand, if personally delivered; one business day after being
timely dispatched, delivery prepaid, if by overnight air courier; and when
receipt acknowl edged, if sent by facsimile transmission. Any of the above
addresses may be changed by notice made in accordance with this subsection.
(c) SUCCESSORS AND ASSIGNS. All the terms
and provisions of this Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns of the
parties hereto, including the Purchaser's estate, successors and
beneficiaries; PROVIDED, HOWEVER, that this Agreement may not be assigned by
the Purchaser without the prior written consent of the Company.
(d) HEADINGS. The headings of the sections
and paragraphs of this Agreement have been inserted for convenience of
reference only and do not constitute a part of this Agreement.
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(e) APPLICABLE LAW; FORUM SELECTION. This
Agreement is governed by and shall be construed in accordance with the laws
of the State of California. By executing this Agreement, each party hereto
submits to the jurisdiction of the courts of California for purposes of
adjudicating its rights or the rights of the other parties with respect to
this Agreement. Each party hereto hereby irrevocably waives, to the extent
permitted by applicable law, any objection, including, without limitation,
any objection to the laying of venue or based on the grounds of FORUM NON
CONVENIENS, which it may now or hereafter have to the bringing of any action
or proceeding in such jurisdiction in respect of this Agreement. Each party
hereby agrees to accept, at the address referred to in Section 9(b) hereof,
service of process in any legal action or proceeding instituted by any party
in the courts of California with respect to this Agreement.
(f) COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
(g) INCORPORATION OF PLAN. The Purchase Plan
is hereby incorporated by reference and made a part hereof, and this
Agreement shall be subject to all terms and conditions of the Purchase Plan.
(h) ENTIRE AGREEMENT. This Agreement and the
Purchase Plan are intended by the parties as a final expression of their
agreement, and are intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. This Agreement and the Purchase Plan supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first above written.
CHEROKEE INTERNATIONAL, LLC
By:_____________________________
Name:
Title:
PURCHASER:
________________________________
Address:________________________
________________________
________________________
Telephone:______________________
Facsimile:______________________
Purchase Price
Number of Class B Units Per Class B Unit
________ $--
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SPOUSAL CONSENT
The undersigned represents that the undersigned is the spouse of
________________________________
Name of Employee
and that the undersigned is familiar with the terms of the 1999 Unit Purchase
Plan (the "Plan"), the Subscription Agreement and of the Operating Agreement
(together with the Subscription Agreement, the "Agreements"), each of which
the undersigned's spouse is entering into on today's date. The undersigned
hereby agrees that the interest of the undersigned's spouse in all property
which is the subject of such Plan or Agreements shall be irrevocably bound by
the terms of such Plan or Agreements and by any amendment, modification,
waiver or termination signed by the undersigned's spouse. The undersigned
further agrees that the undersigned's community property interest in all
property which is the subject of such Plan or Agreements shall be irrevocably
bound by the terms of such Plan or Agreements, and that such Plan or
Agreements shall be binding on the executors, administrators, heirs and
assigns of the undersigned. The undersigned further authorizes the
undersigned's spouse to amend, modify or terminate such Plan or Agreements,
or waive any rights thereunder, and that each such amend ment, modification,
waiver or termination signed by the undersigned's spouse shall be binding on
the community property interest of the undersigned in all property which is
the subject of such Plan or Agreements and on the executors, administrators,
heirs and assigns of the undersigned, each as fully as if the undersigned had
signed such amend ment, modification, waiver or termination.
Dated: ________, 2000
__________________________________
Signature of Spouse:
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