SECOND AMENDMENT TO LOAN AGREEMENT


     THIS SECOND AMENDMENT TO LOAN AGREEMENT  ("Amendment")  made as of this 9th
day of February,  1999 among HIRSCH  INTERNATIONAL CORP., a Delaware corporation
having its principal place of business at 200 Wireless Boulevard, Hauppauge, New
York 11788  ("Hirsch"  or a  "Borrower"),  HAPL  LEASING  CO.,  INC., a New York
corporation  having its principal  place of business at 200 Wireless  Boulevard,
Hauppauge,  New York 11788 ("HAPL" or a "Borrower")  (Hirsch and HAPL  sometimes
referred to herein as a "Borrower" or collectively, as the "Borrowers"),  SEWING
MACHINE EXCHANGE, INC., an Illinois corporation having an office at 200 Wireless
Boulevard,  Hauppauge,  New York 11788  ("SMX"),  PULSE  MICROSYSTEMS  LTD.,  an
Ontario,  Canada  corporation  having its  principal  place of  business at 2660
Meadowvale Boulevard,  Unit 10, Mississauga,  Ontario,  Canada L5N6M6 ("Pulse"),
SEDECO, INC., a Texas corporation having its principal place of business at 1124
W. Fuller  Avenue,  Fort  Worth,  Texas 76115  ("Sedeco")  and HIRSCH  EQUIPMENT
CONNECTION,  INC.,  a  Delaware  corporation  having an  office at 200  Wireless
Boulevard,  Hauppauge,  New York 11788  ("Equipment")  (Hirsch,( with respect to
Loans made to HAPL),  HAPL, (with respect to Loans made to and Letters of Credit
issued for,  Hirsch),  SMX, Pulse,  Sedeco and Equipment being  individually,  a
"Guarantor" and  collectively,  the  "Guarantors"),  THE BANK OF NEW YORK, a New
York banking  organization,  having an office at 604 Broad Hollow Road, Melville
New York  11747  ("BNY"  or a "Bank")  FLEET  BANK,  N.A.,  a  national  banking
association,  having  an office at 300 Broad  Hollow  Road,  Melville,  New York
("Fleet" or a "Bank"), MELLON BANK, N.A., a national banking association, having
an  office  at 176 EAB  Plaza,  West  Tower,  11th  Floor,  Uniondale,  New York
11556-0176  ("Mellon"  or a "Bank")  and THE BANK OF NEW YORK,  as agent for the
Banks (the "Agent").

                              W I T N E S S E T H :

     WHEREAS,  Hirsch,  HAPL and the other  Guarantors,  and BNY and  Fleet,  as
lending Banks, and BNY, as Agent,  entered into a Loan Agreement dated as of the
7th day of January,  1997,  which Loan  Agreement  has  heretofore  been amended
pursuant to that certain First Amendment  dated September 26, 1997  (hereinafter
the "Agreement"); and

     WHEREAS,  the  Banks  have made  certain  commitments  to  Hirsch  and HAPL
pursuant to the Agreement; and



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     WHEREAS,  Hirsch and HAPL have requested that the Agent and the Banks agree
to amend the Agreement to permit HAPL to sell leases on a recourse  basis with a
total recourse exposure not to exceed $6,500,000.00; and

     WHEREAS,  Hirsch wishes to temporarily  reduce the Working Capital Sublimit
to $20,000,000.00  and to reduce the Total Commitment  (Hirsch) to Forty Million
($40,000,000.00) Dollars; and

     WHEREAS, Hirsch wishes to reduce the Permitted Acquisition Sublimit to Zero
($0) Dollars; and

     WHEREAS,  HAPL wishes to reduce the Total Commitment  (HAPL) to Six Million
Five Hundred Thousand ($6,500,000.00) Dollars; and

     WHEREAS,  the  parties  hereto  wish to  reflect  that  certain  additional
collateral has been provided to the Agent and the Banks by Hirsch,  SMX,  Pulse,
Sedeco and Equipment.

     NOW, THEREFORE, in consideration of Ten ($10.00) Dollars and other good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged, the Borrowers, the other Guarantors and the Agent and the Banks do
hereby agree as follows:

     1. Defined Terms.  As used in this  Amendment,  capitalized  terms,  unless
otherwise defined, shall have the meanings set forth in the Agreement.

     2.  Representations and Warranties.  As an inducement for the Agent and the
Banks to enter  into  this  Amendment,  Hirsch,  HAPL and each  other  Guarantor
represent and warrant as follows:

     A. That with respect to the  Agreement and the Loan  Documents  executed in
connection therewith and herewith:

     (i) There are no  defenses  or  offsets  to  Hirsch's,  HAPL's or any other
Guarantor's obligations under the Agreement, as in effect prior to or subsequent
to this  Amendment,  the Notes or any of the other Loan  Documents  or any other
agreements in favor of the Agent or the Banks referred to in the Agreement,  and
if any such defenses or offsets  exist without the knowledge of Hirsch,  HAPL or
any other Guarantor, the same are hereby waived.



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     (ii) All of the  representations and warranties made by Hirsch, HAPL or any
other Guarantor in the Agreement, as amended hereby, are true and correct in all
material  respects  as if made on the date  hereof,  except  for those made with
respect to a particular  date,  which such  representations  and  warranties are
restated as of such date;  and  provided  further that the  representations  and
warranties  set forth in Section  4.01(f) of the  Agreement  shall relate to the
consolidated  financial  statements of Hirsch, HAPL and the other Guarantors for
the fiscal quarter ended October 31, 1998.

     (iii) The outstanding  aggregate  principal balance of the Revolving Credit
Loans (Hirsch) is $14,500,000.00  and interest has been paid through January 31,
1999.

     (iv) The outstanding aggregate L/C Exposure is $1,776,940.11.

     (v) The outstanding  aggregate  principal  balance of the Revolving  Credit
Loans (HAPL) is $-0-.


     3. Amendment.

     (a) The  definitions in Article I of the Agreement of "Other  Acquisition",
"Other Acquisition Maximum Consideration",  "Permitted Acquisition",  "Permitted
Acquisition Loans" and "Permitted Acquisition Sublimit" are each hereby deleted.

     (b) The  following  definitions  in Article I of the  Agreement  are hereby
amended to read in their entirety as follows:

     "Collateral" shall have the meaning set forth in Section 3.05(i) hereof and
shall also mean all property of the Borrowers and the other  Guarantors on which
Liens have been granted to the Agent, for the benefit of the Banks,  pursuant to
the Security Agreements.

     "Loan  Documents"  means this Agreement,  the Notes,  the  Guaranties,  the
Security  Agreements,  the L/C Documents,  the  Commitment  Letter and any other
document executed or delivered pursuant to this Agreement.

     "Total  Commitment"  means the aggregate of the  Commitments of each of the
Banks,  which, on the date of this Agreement,  is Forty Six Million Five Hundred
Thousand ($46,500,000.00) Dollars.

     "Total  Commitment  (HAPL)" means the aggregate of the  Commitments  of the
Banks  to  make  Revolving  Credit  Loans  (HAPL),  which,  on the  date of this
Agreement, is Six Million Five Hundred Thousand ($6,500,000.00) Dollars.

     "Total  Commitment  (Hirsch)" means the aggregate of the Commitments of the
Banks to make  Revolving  Credit  Loans  (Hirsch)  and to make the Term Loans to
Hirsch  and to  participate  in  Letters  of Credit  issued on behalf of Hirsch,
which, on the date of this Agreement, is Forty Million ($40,000,000.00) Dollars.


<PAGE>


     "Working Capital Sublimit" means  $30,000,000.00,  provided,  however, that
for the period  beginning  on January 29, 1999 through the later of (x) February
28,  1999 or (y) the date on which  Hirsch,  the Agent and the Banks  amend this
Agreement  to provide for a borrowing  base formula for  Revolving  Credit Loans
(Hirsch), the Working Capital Sublimit shall mean $20,000,000.00.

     (c)  The  following  definitions  are  hereby  added  to  Article  I of the
Agreement:

     "Permitted  Recourse" means,  with respect to leases sold by HAPL, sales of
leases to Funding Sources  pursuant to which any such Funding Source has limited
recourse to HAPL in the event of non-performance  by the lessee,  which recourse
is not greater than ten (10%) percent of the  aggregate  liability of the lessee
on such lease,  provided,  however, that such recourse may be one hundred (100%)
percent of the lessee's liability on the lease for a period not to exceed (i) in
the case of leases  sold on or prior to February  9, 1999,  that  period  during
which such lessee makes up to eight (8) monthly  payments  under the lease,  and
(ii) in the case of leases sold after February 9, 1999, that period during which
such  lessee  makes  three (3) monthly  payments  under the lease,  in each case
provided  further,  that in no event shall HAPL's  recourse  liability under any
lease be in excess of $120,000.00.

     "Security Agreement" or "Security  Agreements" means the security agreement
executed and delivered by HAPL pursuant to Section  3.05(i) of the Agreement and
any other  security  agreement  executed  and  delivered by Hirsch or any of the
other Guarantors to the Agent.

     (d) Section 2.04 of the Agreement is hereby amended to read in its entirety
as follows:

     "SECTION 2.04. Payment of Interest on the Revolving Credit Notes (Hirsch).

     (a) In the case of an Alternate  Base Rate Loan,  interest shall be payable
at a rate per annum  equal to the  Alternate  Base Rate plus the ABR  Applicable
Margin. Such interest shall be payable on each Interest Payment Date, commencing
with the first Interest  Payment Date after the date of such Alternate Base Rate
Loan  and on the  Maturity  Date.  Any  change  in the rate of  interest  on the
Revolving  Credit Notes (Hirsch) due to a change in the Alternate Base Rate or a
change in the ABR  Applicable  Margin  shall take  effect as of the date of such
change in the Alternate Base Rate or ABR Applicable Margin, as applicable.



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     (b) In the case of a Eurodollar  Loan,  interest shall be payable at a rate
per annum equal to the  Adjusted  LIBOR Rate plus the LIBOR  Applicable  Margin.
Such interest shall be payable on each Interest  Payment Date,  commencing  with
the first Interest  Payment Date after the date of such  Eurodollar  Loan and on
the Maturity Date. In the event Eurodollar Loans are available,  the Agent shall
determine the rate of interest applicable to each requested  Eurodollar Loan for
each  Interest  Period  at  11:00  a.m.,  New  York  City  time,  or as  soon as
practicable thereafter,  two (2) Business Days prior to the commencement of such
Interest Period and shall use its best efforts to notify Hirsch and the Banks of
the rate of interest  so  determined.  Such  determination  shall be  conclusive
absent manifest error.

     (c) The ABR Applicable Margin and the LIBOR Applicable Margin shall each be
determined on the basis of Hirsch's  Funded Debt to EBITDA Ratio,  as calculated
based on the  Hirsch's  consolidated  financial  statements  for its most recent
fiscal quarter.  The ABR Applicable Margin and the LIBOR Applicable Margin shall
be determined as follows:

     (i) The initial ABR  Applicable  Margin  shall be -0- basis  points and the
initial  LIBOR  Applicable  Margin  shall  be 100  basis  points,  and  shall be
applicable until delivery of Hirsch's  financial  statements for its fiscal year
ending January 31, 1997 pursuant to Section  5.01(b) hereof (subject to increase
in the event that Hirsch fails to deliver such statements as required below).

     Beginning  with delivery of Hirsch's  financial  statements  for the fiscal
year ending January 31, 1997, and for each fiscal quarter thereafter:

     (ii) If Hirsch's  Funded Debt to EBITDA  Ratio as of the end of such fiscal
quarter is less than 1.25 to 1.00, the ABR Applicable  Margin shall be -0- basis
points and the LIBOR Applicable Margin shall be 87.5 basis points.

     (iii) If Hirsch's  Funded Debt to EBITDA Ratio as of the end of such fiscal
quarter is equal to or greater than 1.25 to 1.00 but less than 1.85 to 1.00, the
ABR Applicable  Margin shall be -0- basis points and the LIBOR Applicable Margin
shall be 112.5 basis points.

     (iv) If Hirsch's  Funded Debt to EBITDA  Ratio as of the end of such fiscal
quarter is equal to or greater than 1.85 to 1.00 but less than 2.00 to 1.00, the
ABR Applicable  Margin shall be -0- basis points and the LIBOR Applicable Margin
shall be 137.5 basis points.

     (v) If Hirsch's  Funded  Debt to EBITDA  Ratio as of the end of such fiscal
quarter  is equal to or greater  than 2.00 to 1.00,  the ABR  Applicable  Margin
shall be -0- basis  points and the LIBOR  Applicable  Margin  shall be 175 basis
points.



<PAGE>


     In the event that Hirsch fails to deliver any  financial  statements or the
related  certificate  within five (5) days of the due date therefor set forth in
Section 5.01(b)(i),  (ii) or (iv) hereof, unless an Event of Default is declared
as a result of such failure, the ABR Applicable Margin shall be -0- basis points
and the LIBOR Applicable  Margin shall be 175 basis points until Hirsch delivers
all  required  financial  statements  and  certificates  at  which  time the ABR
Applicable  Margin and the LIBOR  Applicable  Margin  shall be  redetermined  as
provided for in this Section 2.04.

     Upon the occurrence and during the  continuance of a Default or an Event of
Default  the ABR  Applicable  Margin and the LIBOR  Applicable  Margin may, as a
result of changes in the Hirsch's Funded Debt to EBITDA Ratio, increase but will
not decrease.

     (e) All interest  shall be paid to the Agent for the pro rata  distribution
to the Banks."

     (e) Section 2.06 of the Agreement is hereby amended to read in its entirety
as follows:

     "SECTION  2.06.  Fees.  (a) Hirsch agrees to pay to the Agent,  for the pro
rata  distribution to the Banks, from the date of this Agreement and for so long
as the Total Commitment (Hirsch) remains in effect, on the first Business Day of
each  calendar  quarter,  and on any day that the Total  Commitment  (Hirsch) is
reduced or  terminated,  an Unused  Facility Fee computed at a rate per annum as
determined  below  (computed  on the basis of the actual  number of days elapsed
over 360 days) on the  average  daily  unused  amount  of the  Total  Commitment
(Hirsch),  such Unused Facility Fee being payable for the calendar  quarter,  or
part  thereof,  preceding  the payment  date.  The Unused  Facility Fee shall be
determined as follows,  on the basis of Hirsch's Funded Debt to EBITDA Ratio, as
calculated  based on Hirsch's  financial  statements  for its most recent fiscal
quarter.

     (i) The initial  Unused  Facility Fee shall be 0.15% per annum and shall be
applicable until delivery of Hirsch's  financial  statements for its fiscal year
ending January 31, 1997 pursuant to Section  5.01(b) hereof (subject to increase
in the event that Hirsch fails to deliver such statements as required below).

     Beginning  with delivery of Hirsch's  financial  statements  for the fiscal
year ending January 31, 1997, and for each fiscal quarter thereafter:

     (ii) If Hirsch's  Funded Debt to EBITDA  Ratio as of the end of such fiscal
quarter is less than 1.25 to 1.00,  the Unused  Facility  Fee shall be 0.10% per
annum.



<PAGE>


     (iii) If Hirsch's  Funded Debt to EBITDA Ratio as of the end of such fiscal
quarter is equal to or greater than 1.25 to 1.00 but less than 1.85 to 1.00, the
Unused Facility Fee shall be 0.15% per annum.

     (iv) If Hirsch's  Funded Debt to EBITDA  Ratio as of the end of such fiscal
quarter is equal to or greater than 1.85 to 1.00 but less than 2.00 to 1.00, the
Unused Facility Fee shall be 0.1875% per annum.

     (v) If Hirsch's  Funded  Debt to EBITDA  Ratio as of the end of such fiscal
quarter is equal to or greater than 2.00 to 1.00, the Unused  Facility Fee shall
be 0.25% per annum.

     In the event that Hirsch fails to deliver any  financial  statements or the
related  certificate  within five (5) days of the due date therefor set forth in
Section 5.01(b)(i),  (ii) or (iv) hereof, unless an Event of Default is declared
as a result of such  failure,  the Unused  Facility Fee shall be 0.25% per annum
until Hirsch delivers all required financial statements and certificates.

     Upon the occurrence and during the  continuance of a Default or an Event of
Default the Unused  Facility Fee may, as a result of changes in Hirsch's  Funded
Debt to EBITDA Ratio, increase but will not decrease.

     (b) Hirsch agrees to pay to the Agent, for its services as Agent hereunder,
those fees, charges and expenses as Hirsch and the Agent may mutually agree."

     (f)  Section  2.20(c)  of the  Agreement  is hereby  amended to read in its
entirety as follows:

     "(c) The ABR  Applicable  Margin and the LIBOR  Applicable  Margin shall be
determined on the basis of Hirsch's  Funded Debt to EBITDA Ratio,  as calculated
based on Hirsch's  consolidated  financial statements for its most recent fiscal
quarter.  ABR  Applicable  Margin  and the  LIBOR  Applicable  Margin  shall  be
determined  in  accordance  with  the  provisions  of  Section  2.04(c)  of this
Agreement.

     In the event that Hirsch fails to deliver any  financial  statements or the
related  certificate  within five (5) days of the due date therefor set forth in
Section 5.01(b)(i),  (ii) or (iv) hereof, unless an Event of Default is declared
as a result of such failure, the ABR Applicable Margin shall be -0- basis points
and the LIBOR Applicable  Margin shall be 175 basis points until Hirsch delivers
all required financial statements and certificates.



<PAGE>


     Upon the occurrence and during the  continuance of a Default or an Event of
Default,  the ABR Applicable  Margin and the LIBOR  Applicable  Margin may, as a
result of changes in Hirsch's Funded Debt to EBITDA Ratio, increase but will not
decrease."


     (g) Section 2A.01 (b)(iv) of the Agreement is hereby amended to read in its
entirety as follows:

     "(iv)  the  Aggregate  Hirsch  Outstandings,  after  giving  effect  to the
requested Letter of Credit shall exceed $40,000,000.00";

     (h)  Section  2A.08  of the  Agreement  is  hereby  amended  to read in its
entirety as follows:

     "SECTION 2A.08.  Fees and Commissions.  (a) In the case of trade Letters of
Credit  payable  on sight,  Hirsch  shall pay to the Agent a payment  commission
equal to 0.25% of the amount drawn,  payable on the date of  presentment  of the
required documents under the Letter of Credit.

     (b) In the case of trade Letters of Credit payable at a stated time, Hirsch
shall pay to the Agent a per annum  commission  on the average  amount of drafts
accepted  and  deferred  payment  obligations  as  outstanding  from the date of
presentment  of  required  documents  under the  Letter of Credit to the date of
payment, equal to (i) 0.75% during such periods when the Hirsch's Funded Debt to
EBITDA Ratio (as determined from Hirsch's most recent  financial  statements) is
less than 1.85 to 1.00, (ii) 1.00% during such periods when Hirsch's Funded Debt
to EBITDA  Ratio is equal to or greater  than 1.85 to 1.00 but less than 2.00 to
1.00 and (iii) 1.50% when  Hirsch's  Funded Debt to EBITDA  Ratio is equal to or
greater than 2.00 to 1.00. Such commission shall be payable on the Honor Date.

     (c) In the case of standby Letters of Credit, Hirsch shall pay to the Agent
a per annum fee equal to the LIBOR Applicable  Margin, as in effect from time to
time, on the average amount issued and available to be drawn on standby  Letters
of Credit (computed on the basis of a year of 360 days for actual days elapsed),
payable quarterly in arrears.

     (d) In the case of all Letters of Credit,  Hirsch  shall pay to the Issuing
Bank its usual and customary  letter of credit fees as established  from time to
time, including without limitation,  fees, commissions and charges for issuance,
payment, processing amendment and expiration.

     (e) In the case of the fees and  commissions  set forth in (a), (b) and (c)
above,  same  shall be paid to the  Agent for the pro rata  distribution  to the
Banks."



<PAGE>


     (i)  Section  3.05(q)  of the  Agreement  is hereby  amended to read in its
entirety as follows:

     "(q) The Agent  shall  have  conducted  a  Collateral  Audit of the (i) the
Eligible  Lease Assets and (ii) the books and records of the  Borrower,  and the
Agent  shall have  conducted  such  other due  diligence  as the  Agent,  in its
reasonable discretion, considers necessary. The results of such Collateral Audit
shall be satisfactory to the Agent and the Banks in their reasonable discretion.
Such Collateral  Audit may be performed by the Agent's  internal staff or by the
Agent's designated representatives. The Collateral Audit shall be at the expense
of HAPL."

     (j)  Section  5.02(d)  of the  Agreement  is hereby  amended to read in its
entirety as follows:

     "(d) Merger.  Merge into, or consolidate  with or into, or have merged into
it, any Person (for the purpose of this  subsection (d), the acquisition or sale
by a Borrower  or any  Guarantor  by lease,  purchase or  otherwise,  of all, or
substantially  all,  of the  common  stock or the  assets of any Person or of it
shall be deemed a merger of such  Person  with the  Borrower  or any  Guarantor)
other than a merger of a Subsidiary into its parent corporation."


     (k) Section  5.02(e) of the Agreement is hereby deleted in its entirety and
replaced as follows:

     "(e) Sale of  Assets,  Etc.  Sell,  assign,  transfer,  lease or  otherwise
dispose of any of its assets,  (including a saleleaseback  transaction)  with or
without recourse, except for (i) inventory disposed of in the ordinary course of
business;  and (ii) the sale or other  disposition  of assets no longer  used or
useful in the conduct of its business, (iii) saleleaseback transactions which in
the aggregate involve the sale of assets for total  consideration of not greater
than $2,000,000.00 Dollars, (iv) leases sold by HAPL on a Non-Recourse basis and
(v)  leases  sold by HAPL on a  Permitted  Recourse  basis,  provided  that  the
aggregate   Permitted   Recourse  of  HAPL  for  such  leases  does  not  exceed
$6,500,000.00 at any time."

<PAGE>
     4. Reduction of Commitment.

     (a) By the  execution  and delivery of this Second  Amendment,  the parties
hereto agree that: (i) the Total Commitment is reduced to Forty Six Million Five
Hundred Thousand ($46,500,000.00) Dollars; (ii) the Total Commitment (Hirsch) is
reduced  to  Forty  Million   ($40,000,000.00)   Dollars;  (iii)  the  Permitted
Acquisition Sublimit is reduced to Zero ($0) Dollars;  (iv) the Total Commitment
(HAPL) is reduced to Six Million Five Hundred Thousand  ($6,500,000.00) Dollars;
and (v) the Working Capital Sublimit is reduced as provided for in the amendment
to the definition of "Working Capital  Sublimit" as set forth in this Amendment,
each effective as of the date hereof.

     (b) All parties  hereto waive any notice  requirement  in the Agreement for
the effectiveness of the above reductions in commitments.

     (c) Schedule  1.01 of the  Agreement is hereby  revised as set forth in the
Schedule 1.01 annexed hereto.

     5.  Certificates.  All parties  hereto  agree that all  certificates  to be
executed  and  delivered  by  Hirsch,  HAPL  or  any of  the  other  Guarantors,
including, without limitation,  Borrowing Base Certificates and the certificates
to be delivered  pursuant to Sections  3.02(a),  3.04(b),  3.05(k),  3.06(a) and
5.01(b),  may be  delivered  by any of,  and shall be  delivered  by one of, the
following officers of Hirsch, HAPL or the other Guarantors:  the Chairman of the
Board,  the Chief  Executive  Officer,  the  President  or the  Chief  Financial
Officer. All parties hereto agree that the certificates to be delivered pursuant
to Sections  3.02(a),  3.04(b),  3.05(k) and 3.06(a) of the  Agreement  shall be
substantially in the form annexed hereto as Exhibit A.

     6. Effectiveness. This Amendment shall become effective upon the occurrence
of the following events and the receipt and satisfactory review by the Agent and
its  counsel of the  following  documents,  provided  that the  addition  of the
definition of "Permitted  Recourse" and the amendment to Section  5.02(e) of the
Agreement,  upon satisfaction of the following conditions,  shall each be deemed
to have been effective on July 31, 1998:

     (a) The Agent shall have received this Amendment,  duly executed by Hirsch,
HAPL, each other Guarantor and each of the Banks.

     (b) The Agent shall have received  copies of any and all  modifications  of
the   documentation   referred  to  in  Section  3.01  of  the  Agreement  which
modifications  could result in a Material Adverse Change in Hirsch,  HAPL or any
other Guarantor.

     (c) The Agent and the Banks shall have received a satisfactory  explanation
of the "Ultimate Net Loss" provision with regard to HAPL and a detailed  balance
sheet projection,  on a quarterly basis, for Hirsch's fiscal year ending January
31, 2000.


<PAGE>


     (d)  The  Agent  shall  have  received  certified  (as of the  date of this
Amendment) copies of the resolutions of the Boards of Directors of Hirsch,  HAPL
and the other Guarantors authorizing this Amendment,  the Security Agreements of
Hirsch and the other  Guarantors  (other  than HAPL) and all other  transactions
relating hereto and thereto and the execution,  delivery and performance  hereof
and thereof and certified  copies of all documents  evidencing  other  necessary
corporate  action  and  governmental  approvals,  if any,  with  respect to this
Amendment and the Security Agreements.

     (e) The Agent  shall have  received an opinion of Ruskin,  Moscou,  Evans &
Faltischek,  P.C.,  counsel for the  Borrower and the  Guarantors  as to certain
matters regarding this Amendment,  the Security  Agreements and as to such other
matters as the Agent or its counsel may reasonably request.

     (f) The Agent  shall  have  received  a  consolidated  (excluding  HAPL and
excluding inter-company receivables) summary accounts receivable aging schedule,
the review of which shall be satisfactory to the Agent and the Banks.

     (g) The Agent shall have been paid,  for the pro rata benefit of the Banks,
an amendment fee in the amount of $30,000.00.

     (h) The Agent's  counsel shall have been paid their fees and  disbursements
in connection with this Amendment.

     7.  Governing  Law. This  Amendment  shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to principles
of conflicts of law.

     8.  Counterparts.   This  Amendment  may  be  executed  in  any  number  of
counterparts and by different 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.



<PAGE>



     9. Ratification. Except as hereby amended, the Agreement and all other Loan
Documents executed in connection therewith shall remain in full force and effect
in accordance with their originally  stated terms and conditions.  The Agreement
and all other  Loan  Documents  executed  in  connection  therewith,  as amended
hereby, are in all respects ratified and confirmed.

     IN WITNESS  WHEREOF,  the parties hereto have executed this Amendment as of
the year and date first above written.

THE BANK OF NEW YORK, as Agent      HAPL LEASING CO., INC.

By:____________________________     By:________________________
   Steven E. Ratner                    Name:
   Vice President                      Title:

THE BANK OF NEW YORK               PULSE MICROSYSTEMS, LTD.

By:____________________________     By:________________________
   Steven E. Ratner                    Name:
   Vice President                      Title:

FLEET BANK, N.A.                   SEWING MACHINE EXCHANGE, INC.

By:____________________________     By:________________________
   Name:                               Name:
   Title:                              Title:

MELLON BANK, N.A.                   SEDECO, INC.

By:____________________________     By:________________________
   Name:                               Name:
   Title:                              Title:

HIRSCH INTERNATIONAL CORP.          HIRSCH EQUIPMENT CONNECTION, INC.

By:____________________________     By:_________________________  
   Name:                               Name:
   Title:                              Title:



          


<PAGE>
                                  SCHEDULE 1.01

     Total Commitments (Hirsch) of Each Bank


                  The Bank of New York    -  $18,000,000.00

                  Fleet Bank, N.A.        -  $14,000,000.00

                  Mellon Bank, N.A.     -  $8,000,000.00


     Total Commitments (HAPL) of Each Bank


                  The Bank of New York    -  $ 2,925,000.00

                  Fleet Bank, N.A.        -  $ 2,275,000.00

                  Mellon Bank, N.A.     -  $ 1,300,000.00


<PAGE>


                                    EXHIBIT A

                          FORM OF BORROWING CERTIFICATE

                           HIRSCH INTERNATIONAL CORP.

                              OFFICER'S CERTIFICATE

     I, , [TITLE] of Hirsch  International Corp. a Delaware  corporation (herein
the "Borrower"), DO HEREBY CERTIFY to The Bank of New York, as Agent for each of
the banks which are lenders under the Agreement  described  below, in connection
with a request for a Revolving  Credit Loan and/or a Letter of Credit under that
certain Loan Agreement among the Borrower, certain Guarantors, the Agent and The
Bank of New York,  Fleet Bank,  N.A, and Mellon Bank,  N.A.  (the  "Banks") (the
"Agreement"), that:

     1. The  representations and warranties of the Borrower contained in Article
IV of the Agreement and in the other Loan  Documents are true and correct in all
material  respects  on and as of this  date as  though  made on and as this date
(provided that the  representation  made in Section 4.01(f) shall be deemed made
as to the then most recent fiscal year and interim period  financial  statements
delivered to the Agent and the Banks).

     2. (a) No Default or Event of Default has  occurred and is  continuing,  or
would result from a Revolving Credit Loan (Hirsch) or Letter of Credit.

     3. Capitalized  terms not defined herein shall have the meanings given them
in the Agreement.

     IN WITNESS WHEREOF, I have signed this certificate this th day of 1999.

                                              -------------------------------
                                              Name: 
                                              Title: