AMENDMENT NO. 5 TO LOAN AND SECURITY AGREEMENT


     AMENDMENT NO. 5 TO LOAN AND SECURITY AGREEMENT (this "Amendment"), dated as
of  October  21,  2005,  by and among  Hirsch  International  Corp.,  a Delaware
corporation  ("Borrower"),  HAPL Leasing Co.,  Inc.  ("HAPL"),  Hirsch  Business
Concepts, LLC ("HBC"),  Sedeco, Inc. ("Sedeco") and HTTG, LLC, formerly known as
Hometown  Threads,  LLC  ("HTTG",  and  together  with  HAPL,  HBC  and  Sedeco,
individually,  each a "Guarantor" and  collectively,  "Guarantors") and Wachovia
Bank,   National   Association,   successor  by  merger  to  Congress  Financial
Corporation, a national banking association ("Lender").

                              W I T N E S S E T H :
                              ---------------------


     WHEREAS,  Lender and  Borrower  have entered  into  financing  arrangements
pursuant to which  Lender has made and may make loans and  advances  and provide
other financial accommodations to Borrower as set forth in the Loan and Security
Agreement,  dated as of November 26,  2002,  by and among  Lender,  Borrower and
Guarantors,  as amended by Amendment No. 1 to Loan and Security  Agreement dated
as of April 28, 2003, Amendment No. 2 to Loan and Security Agreement dated as of
July 16, 2003,  Amendment No. 3 to Loan and Security Agreement dated as of April
30, 2004 and Amendment No. 4 to Loan and Security  Agreement  dated as of August
25, 2004 (as amended  hereby and as the same may  hereafter be further  amended,
modified,  supplemented,  extended,  renewed,  restated or  replaced,  the "Loan
Agreement"), and the agreements,  documents and instruments at any time executed
and/or  delivered  in  connection  therewith or related  thereto  (collectively,
together with the Loan Agreement, the "Financing Agreements");

     WHEREAS,  Borrower and Guarantors  have requested that Lender amend certain
provisions of the Loan Agreement;

     WHEREAS,  Lender is  willing  to agree to such  amendments,  subject to the
terms and conditions set forth herein; and

     WHEREAS,  by this  Amendment,  Lender,  Borrower and Guarantors  desire and
intend to evidence such amendments;

     NOW THEREFORE,  in consideration of the foregoing and the mutual agreements
and covenants contained herein, the parties hereto agree as follows:

     1. Definitions.

     (a) Amendments to  Definitions.  All references to the term "Maturity Date"
in the Loan  Agreement and the other  Financing  Agreements  shall be deemed and
each such reference is hereby amended to mean February 28, 2006.

     (b)  Interpretation.  For  purposes  of this  Amendment,  unless  otherwise
defined  herein,  all terms used  herein,  including,  but not limited to, those
terms used  and/or  defined in the  recitals  above,  shall have the  respective
meanings assigned to such terms in the Loan Agreement.

     2. Early  Termination  Fee. Section 12.1(c) of the Loan Agreement is hereby
amended by deleting the chart  contained  in such Section and  replacing it with
the following:
<TABLE>
<CAPTION>

                        "Amount                             Period
                         ------                             ------
    (i)      Two (2%) percent of the      From the date hereof to and including
<S>     <C>    <C>    <C>    <C>    <C>    <C>
             Maximum Credit               the first anniversary of the date
                                           hereof

     (ii)    One (1%) percent of the      From and after the first
             anniversary Maximum Credit   of the date hereof to and
                                          including January 31, 2006."
</TABLE>

     3. Additional Representations,  Warranties and Covenants. Borrower and each
Guarantor  represents,  warrants  and  covenants  with and to Lender as follows,
which representations, warranties and covenants are continuing and shall survive
the execution and delivery hereof,  and the truth and accuracy of, or compliance
with each,  together with the  representations,  warranties and covenants in the
other Financing Agreements,  being a continuing condition of the making of Loans
or Letter of Credit Accommodations by Lender to Borrower:

     (a) After giving effect to the  provisions of this  Amendment,  no Event of
Default exists or has occurred as of the date of this Amendment.

     (b) This  Amendment  has been duly  executed and  delivered by Borrower and
each  Guarantor  and is in full force and  effect as of the date  hereof and the
agreements  and  obligations  of Borrower and each  Guarantor  contained  herein
constitute legal,  valid and binding  obligations of Borrower and each Guarantor
enforceable against each of them in accordance with their respective terms.

     4. Conditions  Precedent.  The  effectiveness  of the amendments  contained
herein  shall be  subject  to the  receipt  by  Lender  of this  Amendment  duly
authorized, executed and delivered by the parties hereto.

     5.  Amendment  Fee. In addition to all other fees,  charges,  interest  and
expenses  payable by Borrower to Lender under the Loan  Agreement  and the other
Financing Agreements,  Borrower shall pay to Lender,  contemporaneously with the
effectiveness  of this  Amendment,  an  amendment  fee in the amount of $10,000,
which fee shall be fully earned and  nonrefundable as of the date hereof and may
be charged to any loan account of Borrower.

     6. Effect of this Amendment. Except as expressly set forth herein, no other
amendments,  consents,  changes or modifications to the Financing Agreements are
intended or implied,  and in all other  respects the  Financing  Agreements  are
hereby specifically ratified, restated and confirmed by all parties hereto as of
the effective date hereof and Borrower and  Guarantors  shall not be entitled to
any other or further  amendment or consent by virtue of the  provisions  of this
Amendment or with respect to the subject matter of this Amendment. To the extent
of  conflict  between  the  terms  of this  Amendment  and the  other  Financing
Agreements,  the terms of this Amendment  shall control.  The Loan Agreement and
this Amendment shall be read and construed as one agreement.

     7.  Governing  Law. The validity,  interpretation  and  enforcement of this
Amendment and the other Financing  Agreements and any dispute arising out of the
relationship  between the parties  hereto whether in contract,  tort,  equity or
otherwise,  shall be governed by the internal  laws of the State of New York but
excluding  any  principles  of  conflicts of law or other rule of law that would
cause the application of the law of any jurisdiction  other than the laws of the
State of New York.

     8. Binding  Effect.  This Amendment  shall be binding upon and inure to the
benefit  of each of the  parties  hereto  and their  respective  successors  and
assigns.

     9. Headings. The headings listed herein are for convenience only and do not
constitute matters to be construed in interpreting this Amendment.

     10.  Counterparts.  This  Amendment  may  be  executed  in  any  number  of
counterparts, but all of such counterparts shall together constitute but one and
the same agreement. In making proof of this Amendment, it shall not be necessary
to produce or account for more than one  counterpart  thereof  signed by each of
the parties  hereto.  Delivery of an executed  counterpart  of this Amendment by
telefacsimile  shall have the same force and effect as  delivery  of an original
executed  counterpart  of this  Amendment.  Any  party  delivering  an  executed
counterpart  of this Amendment by  telefacsimile  also shall deliver an original
executed  counterpart of this Amendment,  but the failure to deliver an original
executed counterpart shall not affect the validity,  enforceability, and binding
effect of this Amendment as to such party or any other party.

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<PAGE>


         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their authorized officers as of the day and year
first above written.


                                      WACHOVIA BANK, NATIONAL
                                      ASSOCIATION, successor by
                                      merger to Congress
                                      Financial Corporation

                                      By:   Dionne Rice

                                      Title: Vice President

                                      HIRSCH INTERNATIONAL CORP.

                                      By:  Beverly Eichel

                                      Title:  EVP, CFO

                                      HAPL LEASING CO., INC.

                                      By:  Beverly Eichel

                                      Title:  EVP, CFO

                                      SEDECO, INC.

                                      By:  Beverly Eichel

                                      Title:  EVP, CFO

                                      HIRSCH BUSINESS CONCEPTS, LLC

                                      By:  Beverly Eichel

                                      Title:  EVP, CFO

                                      HTTG, LLC, formerly known as Hometown
                                      Threads, LLC

                                      By:  Beverly Eichel

                                      Title:  EVP, CFO