AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT

     AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT (this "Amendment"), dated as
of  April  30,  2004,  by and  among  Hirsch  International  Corp.,  a  Delaware
corporation  ("Borrower"),  HAPL Leasing Co.,  Inc.  ("HAPL"),  Hirsch  Business
Concepts,  LLC  ("HBC"),  Sedeco,  Inc.  ("Sedeco")  and Hometown  Threads,  LLC
("Hometown",  and  together  with HAPL,  HBC and  Sedeco,  individually,  each a
"Guarantor" and collectively,  "Guarantors") and Congress Financial Corporation,
a Delaware corporation ("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, as amended by Amendment No. 1 to Loan
and Security Agreement,  dated as of April 28, 2003, and Amendment No. 2 to Loan
and Security  Agreement,  dated as of July 16, 2003, among Lender,  Borrower and
Guarantors (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.

     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.  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.  Collection of Accounts.  Section  6.3(b)(ii)  of the Loan  Agreement is
hereby  amended by deleting the reference to "Excess  Availability  is less than
$5,000,000" and replacing it with "Excess Availability is less than $2,000,000."

     3. Minimum EBITDA.  Section 9.17 of the Loan Agreement is hereby deleted in
its entirety and replaced with the following:

                  "9.17 Minimum EBITDA.

               (a) As of the last day of each  fiscal  quarter of  Borrower  set
          forth  below,  the EBITDA of  Borrower  and its  Subsidiaries  for the
          immediately preceding four (4) consecutive fiscal quarters (treated as
          a single  accounting  period)  shall be not less than the  amount  set
          forth below for such date:

     --------------------------------------- ----------------------------
     Four Fiscal Quarters Ending             Minimum EBITDA
     --------------------------------------- ----------------------------
     January 31, 2003                        ($1,840,000)
     --------------------------------------- ----------------------------
      April 30, 2003                         ($1,420,000)
     --------------------------------------- ----------------------------
     July 31, 2003                           ($1,450,000)
     --------------------------------------- ----------------------------
     October 31, 2003                          ($875,000)
     --------------------------------------- ----------------------------
     January 31, 2004                        ($2,000,000)
     --------------------------------------- ----------------------------

               (b)  Commencing  on the first day of fiscal year 2005 of Borrower
          and ending on the last day of each fiscal  quarter of Borrower  during
          fiscal  year 2005 set forth  below,  the  EBITDA of  Borrower  and its
          Subsidiaries   for  each  period  set  forth  below  on  a  cumulative
          year-to-date  basis (treated as a single accounting  period) shall not
          be less than the amount set forth  below for such  fiscal  quarter end
          year-to-date period:

      ------------------------------------------------------- ----------------
      Period                                                  Minimum EBITDA
      ------------------------------------------------------- ----------------
      February 1, 2004 through April 30, 2004                 ($1,300,000)
      ------------------------------------------------------- ----------------
      February 1, 2004 through July 31, 2004                  ($1,200,000)
      ------------------------------------------------------- ----------------
      February 1, 2004 through October 31, 2004                 ($600,000)
      ------------------------------------------------------- ----------------
      February 1, 2004 through January 31, 2005                   $500,000
      ------------------------------------------------------- ----------------

               (c) As of the last day of the fiscal  quarter of Borrower  ending
          on April 30,  2005 and as of the last day of each  fiscal  quarter  of
          Borrower  thereafter,  the EBITDA of Borrower and its Subsidiaries for
          the  immediately   preceding  four  (4)  consecutive  fiscal  quarters
          (treated  as a  single  accounting  period)  shall  be not  less  than
          $500,000.

     The numbers in  parenthesis  above are to indicate  that they are  negative
numbers."

     4.  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.

     5. 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.

     6. 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.

     7. 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.

     8.  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.

     9. 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.

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

     11.  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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     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.


                                        CONGRESS FINANCIAL CORPORATION

                                        By: /s/
                                            --------------------------

                                        Title:
                                               -----------------------
                                        HIRSCH INTERNATIONAL CORP.

                                        By: /s/
                                            --------------------------

                                        Title:
                                               -----------------------

                                        HAPL LEASING CO., INC.

                                        By: /s/
                                            --------------------------

                                        Title:
                                               -----------------------

                                        SEDECO, INC.

                                        By: /s/
                                            --------------------------

                                        Title:
                                               -----------------------

                                        HIRSCH BUSINESS CONCEPTS, LLC

                                        By: /s/
                                            --------------------------

                                        Title:
                                               -----------------------

                                        HOMETOWN THREADS, LLC

                                        By: /s/
                                            --------------------------

                                        Title:
                                               -----------------------