December 31, 1999



JACO ELECTRONICS, INC.
145 Oser Avenue
Hauppauge, NY  11788

NEXUS CUSTOM ELECTRONICS, INC.
Prospect Street
Brandon, VT  05733

Gentlemen:

         Reference is made to the Second  Restated and Amended Loan and Security
Agreement between us bearing an effective date of September 13, 1995, as amended
and  supplemented  (the  "Agreement").   All  initially  capitalized  terms  not
otherwise  defined  herein shall have such meaning as are ascribed to them under
the Agreement.

         It is hereby  agreed by and  between  us that the  Agreement  is hereby
amended effective December 31, 1999, as follows:

         1. The first  sentence  of  Paragraph  17(d) is  amended to read in its
entirety as follows:

                           "Maintain  at  all  times  a  ratio  of  consolidated
                           current  assets of  Debtor  and its  Subsidiaries  to
                           consolidated  current  liabilities  of Debtor and its
                           Subsidiaries of not less than 1.5 to 1.0."

         2. The first  sentence  of  Paragraph  18(e) is  amended to read in its
entirety as follows:

                           "Permit  at any time the  ratio  of  Indebtedness  to
                           Tangible  Net Worth to be  greater  than 1.60 to 1.0;
                           "Indebtedness"    shall   mean   consolidated   total
                           liabilities of Debtor and its Subsidiaries determined
                           in  accordance  with  generally  accepted  accounting
                           principles consistently applied."

         Except as herein  specifically  amended,  the Agreement shall remain in
full  force  and  effect  in  accordance  with its  original  terms,  except  as
previously amended.






                  If the foregoing accurately reflects our understanding, kindly
sign the  enclosed  copy of this  letter  and return it to our office as soon as
practicable.

                                         Very truly yours,
                                         GMAC COMMERCIAL CREDIT LLC,successor
                                         by merger to BNY FINANCIAL CORPORATION,
                                         successor in interest to THE BANK OF
                                         NEW YORK COMMERCIAL CORPORATION,
                                         as Agent and Lender

                                         By: /s/ Daniel Murray_
                                         Title: Senior Vice President


                                         FLEET BANK, N.A. f/k/a
                                         NATWEST BANK N.A., as Lender

                                         By: /s/ Alice Aliceberg
                                         Title: Vice President


ACCEPTED & AGREED TO:
JACO ELECTRONICS, INC.

By:/s/ Jeffrey D. Gash
Title: Vice President


NEXUS CUSTOM ELECTRONICS, INC.

By:/s/ Jeffrey D. Gash
Title: Vice President