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Form 8-K for HIRSCH INTERNATIONAL CORP
6-Aug-2008
Entry into a Material Definitive Agreement, Financial Statements and Ex
Item 1.01. Entry into a Material Definitive Agreement.
On August 4, 2008, Hirsch International Corp. (the "Company") acquired 80% of the outstanding equity interest in U.S. Graphic Arts, Inc. ("US Graphics") pursuant to a Share Purchase and Sale Agreement, dated as of August 4, 2008 (the "Purchase Agreement"), among the Company, US Graphics, Scott O. Fresener, Patricia Fresener, Scott M. Fresener, Mishelle Fresener (collectively, the "Sellers") and Fresener Holdings, LLC. In connection with and as a condition to this acquisition, Graphic Arts Acquisition Corporation, a wholly-owned subsidiary of the Company, purchased certain outstanding indebtedness of US Graphics and agreed, under certain circumstances, to make further advances to US Graphics. The total initial cost to the Company of this transaction, including the purchase of the equity interests, the purchase of indebtedness, further advances to US Graphics for payment of trade debt and operating expenses and other amounts the Company agreed to pay at or shortly after closing is approximately $3,000,000.
In addition to the standard and customary representations, warranties, covenants and indemnitees contained in the Purchase Agreement, the Company has the right, from and after August 4, 2011, to purchase the remaining 20% equity interest in US Graphics for a purchase price based on the greater of (x) the net income before taxes of US Graphics multiplied by 4.5 or (y) the net book value of US Graphics. The Sellers, from August 4, 2009 through August 4, 2013, have the right to cause the Company to purchase their remaining 20% equity interest in US Graphics for a purchase price determined in the same manner as the price for the Company's exercise of its option. Also, the Sellers have agreed not to compete with US Graphics through August 4, 2010.
US Graphics is primarily engaged in developing and manufacturing printers for the decorative apparel industry. The assets of US Graphics include inventory of printers and ink, equipment, intellectual property and other intangibles.
The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Purchase Agreement, a copy of which is filed as Exhibit 10.1 hereto and incorporated by reference herein.
Item 2.01. Financial Statements and Exhibits.
On August 4, 2008, the Company acquired 80% of the outstanding equity interests of US Graphics, a manufacturer of printers for the decorative apparel industry, pursuant to the terms of a Share Purchase and Sale Agreement, dated August 4, 2008. The information set forth in Item 1.01 above is incorporated into this Item 2.01 by reference.
Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements.
? The financial statements required by Item 9.01(a) of Form 8-K are not included in this Current Report. The Company intends to file these financial statements by an amendment within the time permitted by Item 9.01(a).
(b) Pro Forma Financial Information.
? Pro forma financial information required by Item 9.01(b) of Form 8-K are not included in this Current Report. The Company intends to file this pro forma financial information by an amendment within the time permitted by Item 9.01(b).
(d) Exhibits
10.1 Share Purchase and Sale Agreement by and between Hirsch
International Corp., U.S. Graphic Arts, Inc., Scott O. Fresener,
Patricia Fresener, Scott M. Fresener, Mishelle Fresener and Fresener
Holdings, LLC, dated August 4, 2008.
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