Contract

Exhibit 10.19

AGREEMENT made the 5th day of December 1997 BETWEEN the INDUSTRIAL DEVELOPMENT AGENCY (IRELAND) having its principal office at Xxxxxx Xxxx Xxxxx, Xxxxxx Xxxxx, Xxxxxx 2 (“XXX”) of the first part, POWER PRODUCTS, LTD. having its principal place of business in Ireland at Youghal, Co Cork (“the Company”) of the second part and COMPUTER PRODUCTS, INC. having its principal office at 0000 Xxxxxx Xxxx, Xxxxx 000, Xxxx Xxxxx, Xxxxxxx 00000, X.X.X. (“the Promoters”) of the third part.

WHEREAS:

A. The Company which is controlled by the Promoters has been incorporated with the principal object of establishing and carrying on by way of a branch operation at Youghal, Co Cork an industrial undertaking for the production of power supplies and in accordance with proposals furnished to XXX by the Promoters has applied to XXX for financial assistance towards the cost of expanding its facilities which is intended to increase employment from 302 to 553 persons;

B. The Company and the Promoters having made the necessary enquiries are satisfied and represent to XXX that to the best of their belief there will be available to the Undertaking the relevant resources required for its proper commercial establishment and efficient operation;

C. The Promoters have represented to XXX that in their opinion the Undertaking will contribute to the development of the Irish economy.

NOW IT IS HEREBY WITNESSED that in consideration of the Company implementing the said proposals and carrying on the Undertaking in accordance with this Agreement, XXX agrees to grant to the Company the sum of 1,882,500 Irish Pounds or the aggregate of 7,500 Irish Pounds for each job created over a base level of 302 in the Undertaking in accordance with Paragraph 7 of the Second Schedule hereto whichever is the lesser (“the grant”) subject to the following terms and conditions including those contained in the Schedules hereto:

1. DEVELOPMENT OF THE UNDERTAKING:
The development of the Undertaking and in particular the provision of employment shall be substantially in accordance with the particulars given in the said proposals.

2. CONTROL OF THE COMPANY:
The controlling interest in the Company shall be held directly or indirectly by the Promoters unless otherwise agreed to in writing by XXX.

3. PROVISION OF FIXED ASSETS:
The provision of the fixed assets shall be as set forth in the First Schedule.

4. PROMOTERS INVESTMENT:
The Company shall procure or provide for the purposes of the Undertaking:

	4.1		Additional Equity Equivalent of IR£1, $2,500
			For the purposes of this Agreement “Equity Equivalent” shall mean the total monies obtained by the Company as follows:

	4.1.1		cash received by the Company from the Promoters in consideration for the issue at par of fully paid-up Ordinary Shares in the Company; and/or
	4.1.2		retained earnings of the Company capitalised at par as fully paid-up Ordinary Shares in the Company; and/or
	4.1.3		retained earnings of the Company transferred to a special non-distributable reserve account which shall be maintained at the appropriate level for the duration of this Agreement; and/or
	4.1.4		loans from the Promoters on the following terms and conditions (“Subordinated Loans”):-

	4.1.4.1		that no interest on such loans shall be payable by the Company except out of profits which would otherwise be available for dividend;
	4.1.4.2		that no such loans shall be repaid except out of profits of the Company which would otherwise be available for dividend or out of a new loan obtained on the same terms for this purpose, or out of the proceeds of a new issue at par of fully paid-up Ordinary Shares of the Company made for this purpose;
	4.1.4.3		that where any such loans are repaid out of profits, there shall be transferred out of profits which would otherwise have been available for dividend to a special nondistributable reserve account a sum equal to the amount of the loan repaid, and that there shall be no reduction in the amount of such special non-distributable reserve account during the term of this Agreement;
	4.1.4.4		that where any such loans are repaid out of a new loan obtained for this purpose, the new loan shall be subject to these conditions as if it were the original loan;

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4.1.4.5 that in the event of the winding up of the Company the amount of any such loans still outstanding shall be subordinated to the claims of the unsecured creditors of the Company;

			PROVIDED ALWAYS that not less than 25% of the Equity Equivalent shall be Ordinary Shares in the Company as specified at Clauses 4.1.1 and/or 4.1.2 above and PROVIDED FURTHER that retained earnings utilised as Equity Equivalent as aforesaid shall not include any sum received in respect of the grant or derived from a revaluation of the fixed assets of the Company.
	4.2		Such further sums, including working capital, as may be required for the Undertaking.
	4.3		The total amount paid from the grant shall at no time exceed the total amount of Equity Equivalent of which at all times not less than 25% shall comprise an amount for issued Ordinary Shares in the Company as aforesaid.

5. PLANNING PERMISSION AND PREVENTION OF POLLUTION:
The Company shall:

	5.1		obtain all relevant permissions prescribed by Local and/or National Authorities and shall comply with all requirements of such permissions and with all Building Regulations and Statutory requirements (if any) required for the Undertaking;
	5.2		comply with all statutory requirements and other requirements which XXX reasonably considers to be necessary in relation to environmental controls and the prevention of pollution.

6. GUARANTEES:
The Company shall not give a guarantee in respect of any borrowings other than borrowings for the purposes of the Undertaking without the prior written consent of XXX.

7. INSURANCE:

The Company shall:

	7.1		keep all the fixed assets insured in accordance with good commercial practice;
	7.2		obtain on commencement of production and in accordance with good commercial practice Consequential Loss Insurance to adequately indemnify the Company against losses and costs resulting from fire and explosion, and
	7.3		make arrangements to ensure that XXX will be notified of any failure to renew the insurance specified at Clauses 7.1 and 7.2 hereof and also of any change in such insurance.

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8. RESTORATION OF FIXED ASSETS:
If there should be damage to or loss of fixed assets including buildings under construction through fire or explosion or any other cause the insurance or other compensation received by the Company shall be used in accordance with good commercial practice to restore to the reasonable satisfaction of XXX the property so damaged or lost.

9. NON-DISTRIBUTION OF THE GRANT:
The Company shall not distribute by way of dividend on the share capital of the Company or otherwise any sum received in respect of the grant.

10. ROYALTIES OR SIMILAR PAYMENTS:
The Company may only make royalty or similar payments on the following terms and conditions:

	10.1		that to the extent that the said royalty and/or similar payments exceed 5% -of the Company’s net annual sales, such excess shall not be payable except out of profits (including accumulated profits) of the Company which would otherwise be available for dividend; and
	10.2		that in the event of the winding up of the Company the amount of any such excess accrued or accruing for payment but unpaid shall be subordinated to the claims of the unsecured creditors, including XXX, of the Company;

PROVIDED ALWAYS that the provisions of this Clause shall not apply to bona fide third party arms length transactions.

11. PAYMENT OF THE GRANT:

11.1 The grant shall be paid subject to the following terms and conditions and the Company shall provide evidence satisfactory to XXX:

	11.1.1		that the Company is acting within its powers in establishing and carrying on the Undertaking by furnishing a Certificate from a Lawyer practising within the jurisdiction within which the Company is incorporated;
	11.1.2		that the documents required to be filed with the Registrar of Companies pursuant to the European Communities (Branch Disclosures) Regulations 1993 have been duly filed by furnishing a Certificate from an Irish solicitor;
	11.1.3		that the Company has obtained suitable premises for the Undertaking and has title acceptable to XXX to all land and buildings required for the Undertaking;
	11.1.4		that the Company is in compliance with all the terms and conditions of its property agreements, if any, with XXX;

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	11.1.5		that the necessary arrangements have been made for the provision of all capital required for the Undertaking as specified at Clause 4 hereof;
	11.1.6		that all Planning Permissions as aforesaid have been obtained and complied with;
	11.1.7		that all requirements for the control of the environment and prevention of pollution as aforesaid have been complied with;
	11.1.8		that insurance arrangements as aforesaid have been made;
	11.1.9		that the Company has obtained a tax number in the relevant tax district; that it is up to date in its tax affairs with the Revenue Commissioners and prior to payment from the grant it shall submit an up-to-date tax clearance certificate from the Revenue Commissioners;
	11.1.10		the fixed assets have been provided in accordance with the proposals;
	11.1.11		that the Company has complied up-to-date with all the provisions of this Agreement;

11.2 Subject to compliance with all the relevant terms of this Agreement the grant shall be paid to the Company in accordance with the arrangements set forth in the Schedule applicable to the particular grant from which payment is sought.

12. FURNISHING OF INFORMATION:

	12.1		The Company shall permit the officers and agents of XXX to inspect the fixed assets at all reasonable times during the term of this Agreement and shall furnish to XXX promptly whenever required to do so by XXX all such information and documentary evidence as XXX may from time to time reasonably require to vouch compliance by the Company with any of the terms and conditions of this Agreement.
	12.2		The Company acknowledges the right of XXX to consult with relevant third parties to obtain any information it may reasonably require relating to the affairs of the Company and/or the Promoters prior to any payment from the grants and to withhold grant payments in the event of such information being unsatisfactory to XXX. The Company and/or the Promoters hereby undertake to instruct such third parties to furnish any such information to XXX on request.
	12.3		The Company and/or the Promoters shall submit Annual Audited Accounts satisfactory to XXX for the duration of this Agreement within, six months from the end of the relevant financial year.

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13. NOTICES:

	13.1		The Certificate of an Officer of XXX certifying any decision of XXX taken or made hereunder shall save in the case of manifest error be conclusive evidence of any such decision.
	13.2		Any notice under this Agreement may be sent by XXX to the Company by registered post to the address for services registered by the Company under the provisions of The European Communities (Branch Disclosures) Regulations 1993.
	13.3		XXX shall use its best endeavours to send copies of all notices issued by it on foot of this Agreement to the Company contemporaneously to the Promoters at their address herein specified, but failure to do so shall not constitute a breach of this Agreement on its part.

14. CONSENTS:

	14.1		Circumstances requiring the consent, approval or permission of any party hereto shall be interpreted to mean that such consents, approvals or permissions shall not be unreasonably withheld. This provision shall not apply to the provisions of Clause 2 hereto.
	14.2		Any variation or modification of any of the terms or conditions herein made at the request of or with the agreement of the Company and with the consent of XXX shall not in any way determine or prejudice the Promoters’ liability hereunder PROVIDED that the financial amount of the Promoters’ said liability shall not be increased without its express agreement in writing.

15. BRANCH OPERATION:
The Company shall not without obtaining the prior written consent of XXX establish or carry on an Undertaking in any part of the world other than the twenty-six counties of the Republic of Ireland PROVIDED ALWAYS that this Clause shall not prohibit the Company from incorporating a subsidiary or subsidiaries with limited liability to carry on business in any part of the world or from investing in or lending money to any other company or firm or person whatsoever subject always to the requirements of Clause 4 hereof.

16. TERMINATION OF AGREEMENT:
This Agreement shall terminate five years from the date of the last payment from the grant.

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17. CANCELLATION AND REVOCATION OF THE GRANT: XXX may stop payment of the grant and/or revoke and cancel or reduce the grant or so much thereof as shall not then have been actually paid to the Company if any one or more of the following events occur:

	17.1		if there be any breach of the terms or conditions of Clause 2 hereof;
	17.2		if the Company should to a material extent be in breach of any of the terms and conditions of this Agreement other than those specified in Clause 17.1 and having failed to establish to the reasonable satisfaction of XXX that such breach was due to force majeure shall not have rectified such breach within 30 days after written notice thereof has been served on the Company;
	17.3		if an order is made or an effective resolution is passed for the winding up of the Company other than a bona fide winding up for the purposes of amalgamation or reconstruction to which XXX has given its prior approval in writing;
	17.4		if a Receiver or an Examiner is appointed over any of the property of the Company or if a distress or execution is levied or served upon any of the property of the Company and is not paid off within 30 days;
	17.5		if the Company should cease to carry on the Undertaking.

If the grant be revoked the Company and/or the Promoters shall repay to XXX on demand all sums received in respect of the grant and if the grant be reduced the Company and/or the Promoters shall repay to XXX on demand all sums received in excess of the amount of the reduced grant and in either case in default of such repayment such sums shall be recoverable by XXX from the Company and/or the Promoters as a joint and several simple contract debt.

18. GOVERNING LAW:
This Agreement shall be governed by and be construed in accordance with the Laws of Ireland and the parties hereto expressly and irrevocably submit to the jurisdiction of the Irish Courts and the Promoters hereby irrevocably appoint the Company to be its attorney for the purpose of accepting service on its behalf of any notice, document or legal process with respect to the Promoters’ obligations pursuant to the provisions of Clause 17 hereof and service of any such document on such attorney shall be deemed for all purposes to be good service.

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FIRST SCHEDULE

PROVISION OF FIXED ASSETS FOR THE UNDERTAKING

		1.				FIXED ASSETS			ESTIMATED COSTS
									IR£
		1.1				Factory Building Modifications				2,906,000
		1.2				New Machine and Equipment				9,439,000
						Total				12,345,000

2. The Company shall:-

	2.1		have the construction of the said proposed factory building modifications for the Undertaking commenced to the satisfaction of XXX not later than 31 December 1997 and completed in a proper and satisfactory manner not later than 31 December 2000;
	2.2		Purchase and have installed in a proper and workmanlike manner ready for operation in the said factory buildings all machinery and equipment suitable in all respects required for the Undertaking by 31 December 2000;
	2.3		have commenced production in the Undertaking by 30 June 1998.

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SECOND SCHEDULE

ADDITIONAL TERMS AND CONDITIONS RELATING TO THE GRANT

1. The grant shall be payable in respect of the total number of such jobs as are created in the Company (in accordance with Paragraph 7 of this Schedule) provided such jobs are occupied by EU citizens who are subject to Irish taxation.

2. A job for the purposes of the grant shall be a permanent full time position in the Undertaking and shall be deemed to be created when a contract of employment has been signed and payment has been made to an employee in respect of work done in the job.

3. The grant in respect of each job created shall be paid in two moieties. The first moiety shall be payable when the job has been created and the second moiety shall be payable when permanent full-time employment in the job for a twelve month period has been completed.

4. Claims for payment of an installment from the grant may be submitted monthly and shall be certified by the Company’s Auditors in an agreed format.

5. The Company shall also submit details of the Company’s employment history to date; this shall give such particulars as XXX may require in a format satisfactory to XXX.

6. XXX may at any time within five years from the date of payment of the first moiety of the grant in respect of any job revoke the grant paid in respect of that job if the job should become vacant and remain vacant for a period in excess of six calendar months.

7.

	Job Description			Base					1997					1998					1999					2000					Total
	Manufacture									30					36					37					44					147
	Manufacturing/ Engineering									4					4					4					4					16
	R&D									7					9					10					12					38
	Administration									3					3					3					2					11
	Marketing/Sales									2					2					3					4					11
	Quality/Materials									7					7					7					7					28
	Total				302					53					61					64					73					251

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IN WITNESS WHEREOF the parties hereto have affixed their respective seals the day and year first herein written.

PRESENT when the Seal of the
INDUSTRIAL DEVELOPMENT AGENCY (IRELAND)
was affixed hereto:-
 

/s/  

MEMBER/AUTHORISED OFFICER 

/s/ Xxxxxxx Xxxx  

MEMBER/AUTHORISED OFFICER 

PRESENT when the Seal of the
POWER PRODUCTS, LTD.
was affixed hereto:-

/s/ Xxxx Xxxxx  

Director 

/s/ Xxxxxxx X. Xxxxxxxx  

Director 

PRESENT when the Seal of the
COMPUTER PRODUCTS, INC.
was affixed hereto:-

/s/ Xxxxxx X. X’Xxxxxxx  

Chairman 

/s/ Xxxxxxx X. Xxxxxxxx  

Vice President / Finance & Secretary

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Dated the 5^th day of December 1997

INDUSTRIAL DEVELOPMENT AGENCY (IRELAND)

First Part

POWER PRODUCTS, LTD.

Second Part

- and -

COMPUTER PRODUCTS, INC.

Third Part

GRANT AGREEMENT

Industrial Development Agency (Ireland)
Xxxxxx Xxxx Xxxxx
Xxxxxx Xxxxx
XXXXXX 0

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