DISTRIBUTION AGREEMENT

     AGREEMENT   made  this  8th  day  of  July,   2006,   by  and  between  MHM
SIEBDRUCKMASCHINEN  GMBH  ("Manufacturer"),  an Austrian  corporation having its
principal place of business at Muhlgraben 43a, A-6343 Erl,  Austria,  and HIRSCH
DISTRIBUTION, INC. ("Distributor"),  a Delaware corporation having its principal
place of business at 50 Engineers Road, Hauppauge, NY 11788.

                                    RECITALS:

     WHEREAS,  Manufacturer is a manufacturer  and distributor of certain screen
printing machines and equipment;

     WHEREAS,   Manufacturer  is  the  owner  of  certain   trademarks  used  by
Manufacturer  in  connection  with the  manufacture  and  distribution  of those
certain Screen Printing Machines;

     WHEREAS, Manufacturer desires to grant Distributor the exclusive rights and
license to  distribute  Manufacturer's  products set forth on Schedule A annexed
hereto  (the  "Products")  and to  utilize  the  related  trade  marks  owned by
Manufacturer  (the "Marks") within the Territory (as  hereinafter  defined) upon
the terms and conditions contained herein;

     WHEREAS,  Distributor  desires to acquire exclusive rights for the sale and
distribution of the Products in the Territory.

     NOW, THEREFORE, it is hereby agreed as follows:

     1. GRANT OF EXCLUSIVE DISTRIBUTORSHIP;

     (a)  Subject to the terms and  conditions  contained  herein,  Manufacturer
hereby appoints Distributor an exclusive  distributor of the Products and hereby
grants to  Distributor,  the  exclusive  right and license to sell,  distribute,
promote and advertise the Products and to use the Marks in connection therewith,
in a territory  consisting  of the United  States of America,  Canada and all of
their possessions and territories (the "Territory"). The parties shall negotiate
the addition of the Caribbean to the Territory in good faith.

     (b) Distributor hereby accepts the aforesaid  appointment and undertakes to
use its best efforts to promote the sale of the Products  within the  Territory.
Distributor  shall  have the  right,  within  its  sole  discretion  to  appoint
sub-distributors to carry out its obligations hereunder.

     2. CERTAIN REPRESENTATIONS AND WARRANTIES OF SELLER

     Manufacturer represents and warrants to Distributor as follows:

     (a)  Manufacturer  has full right,  power and  authority to enter into this
Agreement,  to appoint  Distributor as exclusive  distributor of the Products in
the  Territory  and to grant to  Distributor  a license to utilize  the Marks as
contemplated hereunder.

     (b)  Manufacturer  maintains a valid  license to use the Marks and will use
its best  efforts  to keep the  license  to the Marks in full  force and  effect
during the term of this Agreement.

     3. EXCLUSIVITY WITHIN THE TERRITORY

     (a) Manufacturer undertakes that during the Term (as defined below) of this
Agreement,  it shall not knowingly,  directly or indirectly,  sell or permit the
sale of the Products to any person, firm or corporation in the Territory,  other
than Distributor, or to anyone else for resale in the Territory.

     (b)  Distributor  covenants  that during the Term, it shall not  knowingly,
directly or  indirectly,  sell the Products to any person,  firm or  corporation
outside of the  Territory  or to anyone  else  within the  Territory  for resale
outside the Territory.

     4. TERM

     (a) This  Agreement  and the rights  and  license  granted  to  Distributor
hereunder  shall become  effective on the date hereof and shall remain in effect
for a period of ten (10) years (the "Original Term"),  unless terminated earlier
pursuant to the terms and conditions of this Agreement.

     (b) At the  expiration  of the  Original  Term,  this  Agreement  shall  be
automatically  renewed for  successive ten (10) year periods unless one party to
this Agreement gives written notice of termination to the other at least one (1)
year prior to the  expiration  of the then current  term (each a "Renewal  Term"
and, all Renewal Terms  together with the Initial Term,  referred to hereinafter
as the "Term"). The Term may be terminated as set forth in Article 12 hereof.

     5. USE OF THE MARKS

     (a) During the term of this Agreement,  Distributor shall not use the Marks
except in connection with the sale,  promotion,  advertising and distribution of
the Products within the Territory and in connection with the  identification  of
Distributor as the exclusive distributor of the Products.

     (b) Distributor  acknowledges that this Agreement does not give Distributor
any  rights  with  respect  to the  Marks  other  than the right to their use in
connection  with the sale,  distribution,  promotion,  advertising or use of the
Products  for the Term and  within  the  Territory  or  elsewhere.  Manufacturer
represents and Distributor acknowledges that the Marks are entirely the property
of Manufacturer,  and Distributor  covenants that it will not claim any title or
right to use the same at any time hereafter except in referencing  Distributor's
rights as exclusive  distributor  of the  Products,  as provided in Section 5(a)
above.  Unless otherwise provided herein and except as permitted under Paragraph
11 below,  Distributor shall immediately  discontinue and relinquish any and all
uses of the Marks upon termination of this Agreement.

     6. PROTECTION OF THE MARKS

     (a) Distributor  shall promptly bring to the attention of Manufacturer  any
infringements  of the Marks of which it may become aware during the term of this
Agreement.  In the  event  Manufacturer,  does not  choose  to take  appropriate
measures to enforce its legal rights as against such infringements,  Distributor
may, if granted written  approval by Manufacturer to do so and, if it reasonably
deems such  measures to be in its best  interests  and in the best  interests of
Manufacturer, at its sole cost and expense, commence appropriate legal action or
proceedings  on behalf of  Manufacturer.  In such event,  Distributor  shall not
consent to any settlement without the prior written consent of Manufacturer.  In
the event  Manufacturer  elect to institute a legal action or proceeding  itself
with  respect to  infringement  of the Marks within the  Territory,  Distributor
shall,  upon request of  Manufacturer  and provided  Manufacturer  undertakes to
reimburse  Distributor  for all legal  fees and  costs,  join in such  action or
proceeding and cooperate to the extent reasonably  necessary for the prosecution
of such action or proceeding.

     (b) Manufacturer shall indemnify, defend and hold Distributor harmless from
and against any costs,  including  reasonable  attorneys' fees, losses,  claims,
damages,  liabilities,  judgments,  fines and amounts paid,  resulting  from any
claim, action proceeding or investigation, whether pending or threatened against
Distributor for trademark  infringement arising out of or in connection with the
use of the Marks by Distributor.

     (c) Distributor shall indemnify, defend and hold Manufacturer harmless from
and against any and all costs,  including  reasonable  attorney's fees,  losses,
claims,  damages,  liabilities,  judgments,  fines and amounts paid,  including,
without limitation, reasonable attorneys' fees and expenses arising out of or in
connection  with any threatened or pending  action or  proceeding,  relating to,
arising out of or in connection with (i) Distributor  sales and  distribution of
the Products in violation of this  Agreement,  or (ii) the use by Distributor of
the Mark other than as authorized and approved by Manufacturer.

     7. CERTAIN UNDERTAKINGS OF DISTRIBUTOR

     (a)  Distributor  shall order and purchase the  Products  exclusively  from
Manufacturer,  as the sole manufacturer of the Products, unless otherwise agreed
by Manufacturer.  Therefore  Distributor covenants that during the Term he shall
not distribute or sell any other  manufacturers`  products of the kind set forth
on  Schedule A or any future  products of  Manufacturer  that may become part of
this  Agreement.  Following  termination  of this  Agreement  (other than due to
Manufacturer's  breach  of this  Agreement)  Distributor  shall  not do so for a
period of twelve (12) months.  Distributor  shall  distribute  the Products on a
Territory-wide basis and shall provide Manufacturer,  on a 3-month basis, with a
sales  report  showing  the  actual  gross  amount of sales of the  Products  by
Distributor broken down on a state by state and provincial basis.

     (b) If  Distributor  exhibits its products at any industry or trade show in
the  Territory,  it shall  display the Products in its booth,  in a  surrounding
which shall be consonant with the prestige,  image and high standards of quality
associated  with the  Products.  Distributor  agrees to display the  Products at
major industry trade shows that it participates in.

     (c) Distributor  acknowledges  that any technical data or information fixed
in a tangible  medium of  expression  ("Know-how"),  which may be  disclosed  to
Distributor by Manufacturer in connection with this Agreement is being disclosed
in confidence and that Distributor has no proprietary  interest  therein.  At no
time during the Term or at any time subsequent to the termination  thereof shall
Distributor  divulge to any third party  (other than as required or permitted by
Manufacturer) any element of Know-how divulged to Distributor during the term of
this Agreement.

     8. QUOTAS; MARKETING PLAN

     (a) During each full calendar year of the Original Term,  Distributor shall
endeavor to order at least 10 carousel  printing  machines of the type SPE, SPS,
SP 4000,  as listed in  Schedule A per month,  whereas the type  designation  is
subject to change,  provided that during each full calendar year of the Original
Term, Distributor may order fewer than 10 machines of the type SPE, SPS, SP 4000
in certain  months but an annual amount of orders of 120 of those products and a
minimum aggregate annual sales revenue of Five Million ($5,000,000) U.S. Dollars
has to be reached (the "Quota").  If  Distributor  intends to order more than 10
but no more than 20 Products in a certain month Manufacturer needs a preliminary
lead  time of 12 weeks for  delivery.  If an order for more than 20 but not more
than 30 Products in a certain month is placed the lead time amounts to 20 weeks.
In case of  orders  surmounting  30  Products  a month  the  lead  time is to be
negotiated between Distributor and Manufacturer as the case arises.

     (b) In case of a Renewal  Term the minimum  amount of monthly  orders to be
placed  by  the  Distributor  is  to  be  negotiated  between   Distributor  and
Manufacturer.

     (c) If  Distributor  fails  to  achieve  the  negotiated  Quota in any year
because  he has  ordered  only half the  quantity  of  products  as set forth in
Paragraph 8 (a) or half the minimum quantity  governed in a Renewal Term and the
annual  sales  revenue  falls  below  the  half of the  amount  as set  forth in
Paragraph 8 (a) or the respective  amount  governed in a Renewal Term during the
course of a certain year,  Manufacturer's  sole and exclusive remedy shall be to
terminate this Agreement in accordance with Paragraph 11(b)(ii).

     9. PLACEMENT OF ORDERS; DELIVERY; PRICES; PAYMENT

     (a)  Distributor  shall submit  purchase  orders,  on forms  acceptable  to
Manufacturer, setting for the quantity of Products it may from time to time wish
to  purchase,  including  style and other  pertinent  information.  All purchase
orders are subject to  approval  by  Manufacturer,  which  approval  shall be in
writing  and set forth the price and payment  terms.  Purchase  orders  shall be
deemed complete if no objection is received in writing from  Distributor  within
five (5)  business  days after  confirmation  that the  purchase  order has been
accepted by Manufacturer.  Purchase orders and  confirmations may be transmitted
via telefax and/or e-mail.

     (b) Distributor agrees to purchase and pay for the Products in U.S. Dollars
based upon the current price list provided by Manufacturer.  The said price list
may be modified from time to time but not more than once in any six month period
by written notice to Distributor,  and, any such modification shall apply to all
orders  submitted on or after the date of written  notice to Distributor of such
modification.  The prices charged by Manufacturer  for Products shall not exceed
those prices which the Manufacturer charges its customers generally. Payment for
the  Products  shall  be due  within  90  days of  receipt  of the  Products  by
Distributor.

     (c)  Distributor is indebted to pay due accounts  resulting from deliveries
of the  Manufacturer`s  Products  and must not set off  real or  alleged  claims
against these accounts other than actual credits received from Manufacturer.

     10. WARRANTIES; PRODUCTS LIABILITY

     (a)  Manufacturer  warrants to  Distributor  that the  Products  shipped to
Distributor  will be free from defects in  materials  and  workmanship  and will
conform to approved  samples  and  prototypes.  This  warranty is in lieu of all
other  warranties,  expressed  or implied,  including  the  implied  warranty of
MERCHANTABILITY or fitness for use.  Manufacturer  reserves explicitly the right
to make technical modifications, as long as they represent a quality improvement
of the Products.  Manufacturer  undertakes to accept for credit any items, which
are non-conforming or defective, and to pay for all shipping costs in connection
therewith.  Any such items with obvious or patent  defects  shall be returned to
Manufacturer or otherwise  disposed of within one (1) year after delivery in the
case of items with hidden or latent  defects.  Distributor  shall promptly after
discovery of such defects notify Manufacturer thereof via a special form that is
provided by Manufacturer for such cases and the parties  thereafter will discuss
appropriate  disposal or return procedures.  In the event Distributor is willing
and  able  to  repair  a  manufacturing  defect,  Manufacturer  shall  reimburse
Distributor  the actual cost for parts.  In the event of a design  defect in the
Products,  Manufacturer  shall  reimburse  Distributor  for all costs of repair,
including, but not limited to the actual costs for parts and labor.

     (b) Manufacturer undertakes to indemnify and hold Distributor harmless from
and against any cost,  liability  or expense,  including  reasonable  attorneys'
fees,  resulting from any claim,  action or proceeding against Distributor based
upon  Product  defects in  materials  or  workmanship  which are  admitted to by
Manufacturer  or proven  (by  independent  testing  or other  means),  provided,
however,  that Manufacturer shall have no obligation to indemnify Distributor to
the extent any claim,  action, or proceeding is based upon  Distributor's  gross
negligence of willful misconduct.

     (c) Distributor  shall use  commercially  reasonable  efforts to maintain a
reasonable  supply of spare parts to be used to repair certain defects  provided
that  Distributor is authorized by  Manufacturer  according to Paragraph 10 (a).
Distributor's   initial   order  of   recommended   parts  shall  be  priced  at
Manufacturer's cost.

     11. TERMINATION

     (a) This  Agreement may be terminated by either of the parties in the event
the other party  materially  breaches or is in default in any  material  respect
under any provision  under this  Agreement and such breach or default  continues
unremedied  for thirty (30) days after written  notice  thereof.  Acts of nature
beyond  control of the parties do not  authorize  the parties to terminate  this
Agreement.

     (b) This  Agreement may be terminated  by  Manufacturer  at its sole option
upon of any of the  following  events  (each of which shall be deemed a material
breach of this Agreement):

     (i) If  Distributor  is  adjudged  a  bankrupt  or if  Distributor  becomes
insolvent or makes an assignment for the benefit of creditors or if a custodian,
receiver or trustee for Distributor is appointed.

     (ii)  Upon  not less  than  ninety  (90)  days  prior  written  notice,  if
Distributor has failed to attain the Quotas as agreed in Paragraph 8.

     (c) In the event of  termination  of this  Agreement  pursuant  to Sections
11(a) and 11(b) above,

     (i) Distributor  shall remain liable to Manufacturer  for any monies due or
to become due as of the date of the termination of this Agreement.

     (ii) Distributor  may, within its sole  discretion,  upon written notice to
Manufacturer, cancel all outstanding unfulfilled orders.

     (iii)  Distributor  shall  have  the  right to sell  its  inventory  of the
Products  on hand during a period of one (1) year after such  termination  date,
under the terms and conditions  hereof.  Distributor  shall supply  Manufacturer
with a detailed  listing of all  inventory on hand within thirty (30) days after
such  termination  date. At the expiration of the aforesaid one (1) year period,
Distributor  shall  immediately  cease all use of the Marks and shall  return to
Manufacturer all elements of Know-how, which it may have in its possession.

     12.  COMPLIANCE WITH APPLICABLE LAWS AND STANDARDS;  TESTING.  Products and
Promotional Material distributed  hereunder shall be of good quality and free of
defects in design,  materials and workmanship,  shall comply with all applicable
laws,  regulations and voluntary  industry  standards in effect in the Territory
and  conform  in all  respects  to the  final  production  samples  or  finished
materials  approved by  Manufacturer.  In order to ensure that all Products meet
the foregoing standards,  Manufacturer shall at its sole cost and expense, prior
to the date of first  distribution  of any  Products,  submit the  Products  for
applicable  testing by a U.S.  national  testing  laboratory  or an  independent
laboratory that is nationally  approved and  satisfactory  to Distributor.  Upon
request by Distributor,  Manufacturer  shall provide  Distributor  with specific
test data or laboratory  reports to support its  certifications.  All MHM Screen
Printing Machines are CE Certified.

     13. ASSIGNMENT

     This  Agreement and the rights and duties  hereunder may not be assigned or
delegated by either party without the prior written  consent of the other party,
except as follows:

     (a)  Either of the  parties  may assign  this  Agreement  to a  corporation
controlling, controlled by or under common control with such party.

     (b)  Manufacturer,  in  connection  with a sale  of it's  entire  business,
whether such sale is  accomplished  by a transfer of  substantially  all assets,
merger or otherwise.

     14. GOVERNING LAW; JURISDICTION

     This Agreement  shall be governed and interpreted in accordance the laws of
the State of New York.  All disputes and  differences  of any kind arising under
this  Agreement  which  cannot  be  settled  amicably  by the  parties  shall be
commenced and maintained:  (a) if by  Manufacturer,  in any appropriate New York
State or United States  District Court located in Suffolk  County,  State of New
York; and (b) if by Distributor, the Bezirksgericht Kufstein in Austria.

     15. NO WAIVER

     The failure of any party hereto to enforce at any time or for any period of
time any of its rights or  entitlements  under any  provision of this  Agreement
shall not be  construed  as a waiver of such  provision or of the rights of such
party subsequently to demand enforcement of such provision.

     16. CONFIDENTIALITY

     (a) Each of the parties hereto shall treat and maintain as confidential all
materials  and  information  provided  by the  other  parties  pursuant  to this
Agreement,  and each party shall use its best efforts to cause all shareholders,
directors,   officers,  employees,  and  agents  of  such  party  to  keep  such
information  confidential  provided  that  either  party shall have the right to
disclose such  information  and  materials to the extent  required by applicable
law, rule or regulation.

     (b) The  materials  and  information  to be kept  confidential  pursuant to
provisions of the foregoing paragraph shall include, without limitation, any and
all  date  concerning  assembly,  operations,  technical  drawings,  instruction
manuals,  computer software and other information relating to the Products. Such
information  shall remain the exclusive  property of Manufacturer,  shall not be
used,  copied or reproduced by Distributor  without the consent of Manufacturer,
and shall be protected at least to the same extent that Distributor protects its
own strictly confidential information.

     (c) The  obligations  set  forth  in this  Article  17  shall  survive  any
termination of this Agreement.

     17. NOTICE. All notices required or permitted under this Agreement shall be
effective  only if in writing and mailed by  certified  or  registered  airmail,
postage  prepaid and addressed as follows (unless any such address is changed by
notice given in like manner):

         If to Manufacturer:        MHM SIEBDRUCKMASCHINEN GMBH
                                    Muhlgraben 43a
                                    A-6343 Erl, Austria
                                    Attn:  Dagobert Girardelli
                                             Herbert Mayrhofer

         If to Distributor:         Hirsch Distribution, Inc.
                                    c/o Hirsch International Corp.
                                    50 Engineers Road
                                    Hauppauge, NY 11788
                                    Attn: Paul Gallagher

         with a copy to:            Ruskin Moscou Faltischek, P.C.
                                    East Tower, 15th Floor
                                    1425 Reckson Plaza
                                    Uniondale, NY 11556
                                    Attn: Adam P. Silvers, Esq.

All such notices shall be deemed given three (3) days after mailing.

     18. INDEPENDENT CONTRACTORS

     This  Agreement  does not  constitute  either  party as the  agent or legal
representative of the other for any purpose whatsoever. Neither party is granted
any right or authority to assume or to create any obligation or  responsibility,
express  or  implied,  on  behalf  of or in the name of the other or to bind the
other in any matter.

     19. ENTIRE AGREEMENT

     This  Agreement  supersedes  all  prior  negotiations,  understandings  and
agreements by the parties,  represents  the entire  agreement of the parties and
cannot be changed, modified or supplemented except by a writing duly executed by
the parties.

     IN WITNESS WHEREOF,  the parties have executed this Agreement as of the day
and year first above written.

                                   MHM SIEBDRUCKMASCHINEN GMBH

                                   By:/s/ Herbert Mayrhofer, Dagobert Girardelli
                                   ---------------------------------------------
                                   Herbert Mayrhofer, Dagobert Girardelli



                                   HIRSCH DISTRIBUTION, INC.

                                   By:/s/ Paul Gallagher
                                   ---------------------
                                   Paul Gallagher
                                   President & CEO

<PAGE>


                                   SCHEDULE A
                                   ----------

                                    PRODUCTS

See attached [Schedule Omitted]