Exhibit 10.1 AMENDMENT NO. 2 TO LOAN AND SECURITY AGREEMENT AMENDMENT NO. 2 TO LOAN AND SECURITY AGREEMENT ("Amendment No. 2"), dated as of July 16, 2003, by and among Hirsch International Corp., a Delaware corporation ("Borrower"), HAPL Leasing Co.,...

Exhibit 10.1

AMENDMENT NO. 2
TO LOAN AND SECURITY AGREEMENT

AMENDMENT NO. 2 TO LOAN AND SECURITY AGREEMENT ("Amendment No. 2"), dated
as of July 16, 2003, by and among ▇▇▇▇▇▇ International Corp., a Delaware
corporation ("Borrower"), HAPL Leasing Co., Inc. ("HAPL"), ▇▇▇▇▇▇ 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 :
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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, among Lender, Borrower and Guarantors
as amended by Amendment No. 1 to Loan and Security Agreement, dated as of April
28, 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 consent to the
payment of dividends by Borrower to its shareholders, subject to certain terms
and conditions;

WHEREAS, Lender is willing to consent to the payment of such dividends,
subject to the terms and conditions set forth herein.

WHEREAS, by this Amendment No. 2, 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) Additional Definition. As used herein, the term "Amendment No. 2" shall
mean this Amendment No. 2 to Loan and Security Agreement by and among
Lender, Borrower and Guarantors, as the same now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced
and the Loan Agreement and the other Financing Agreements are hereby
amended to include, in addition and not in limitation, such definition.

(b) Interpretation. For purposes of this Amendment No. 2, 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. Consent to Proposed Dividend. Subject to the terms and conditions contained
herein, and notwithstanding anything to the contrary contained in Section 9.11
of the Loan Agreement, Lender hereby consents to the payment by Borrower of cash
dividends to its shareholders, provided, that, as to any such dividend each of
the following conditions is satisfied as determined by Lender:

(a) Lender shall have received not more than thirty (30) Business Days' and not
less than ten (10) Business Days' prior written notice of the intention of
Borrower to pay such dividends, which notice shall specify the amount of
the shares in respect of which such dividend is being paid, the total
amount to be paid pursuant to such dividend and the date that such dividend
is to be paid;

(b) the aggregate amount of all such dividends paid in any fiscal quarter of
Borrower shall not exceed $100,000;

(d) as of the date of the declaration and payment of any such dividends and
after giving effect thereto, no Default or Event of Default shall exist or
have occurred and be continuing;

(e) as of the date of the payment of any such dividend, Excess Availability
shall have been not less than $ 2,000,000 for each of the immediately
preceding ten (10) consecutive Business Days and as of the date of the
payment of any such dividend and after giving effect thereto, Excess
Availability shall be not less than $2,000,000;

(f) the declaration and payment of any such dividend shall not violate,
contravene or constitute a default under any applicable law or agreement to
which Borrower or any Guarantor is a party or by which Borrower or any
Guarantor or any of its property is bound.

3. 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 $5,000, which
fee shall be fully earned and nonrefundable as of the date hereof and may be
charged to any loan account of Borrower.

4. 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. 2, no Event of
Default exists or has occurred as of the date of this Amendment No. 2.

(b) This Amendment No. 2 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.

5. Conditions Precedent. The effectiveness of the amendments contained herein
shall be subject to the receipt by Lender of this Amendment No. 2 duly
authorized, executed and delivered by the parties hereto.

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 No. 2 or with respect to the subject matter of this Amendment No. 2.
To the extent of conflict between the terms of this Amendment No. 2 and the
other Financing Agreements, the terms of this Amendment No. 2 shall control. The
Loan Agreement and this Amendment No. 2 shall be read and construed as one
agreement.

7. Governing Law. The validity, interpretation and enforcement of this Amendment
No. 2 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 No. 2 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 No. 2.

10. Counterparts. This Amendment No. 2 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 No. 2, 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 No. 2 by telefacsimile shall have the same force and effect as
delivery of an original executed counterpart of this Amendment No. 2. Any party
delivering an executed counterpart of this Amendment No. 2 by telefacsimile also
shall deliver an original executed counterpart of this Amendment No. 2, but the
failure to deliver an original executed counterpart shall not affect the
validity, enforceability, and binding effect of this Amendment No. 2 as to such
party or any other party.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to
be duly executed and delivered by their authorized officers as of the day and
year first above written.

CONGRESS FINANCIAL CORPORATION

By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
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Title: Assistant Vice-President

▇▇▇▇▇▇ INTERNATIONAL CORP.