July 1, 1998


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

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

Gentleman:

         Reference is made to the Second  Restated and Amended Loan and Security
Agreement between Jaco Electronics,  Inc. and Nexus Custom Electronics,  Inc. as
Debtor,  and BNY Financial  Corporation  (f./k/a The Bank of New York Commercial
Corporation),  as Lender, and each other Lender a party hereto,  dated September
13, 1995, as amended and supplemented (the "Loan Agreement").

         It is hereby  agreed  that,  effective  as of July 1,  1998,  the first
sentence of Paragraph  5(A) of the Loan  Agreement  shall be amended by deleting
the word "Until" at the beginning  thereof and  substituting the words "Upon the
request of the Agent on behalf of the  Secured  Parties  and until" in its place
and stead.

         Except as hereinabove  specifically set forth, the Loan Agreement shall
remain unmodified and in full force and effect in accordance with its terms.

         If you are in  agreement  with the  foregoing,  please so  indicate  by
signing and returning to us the enclosed copy of this letter.


                                        Very truly yours,

                                        BNY FINANCIAL CORPORATION f/k/a THE
                                        BANK OF NEW YORK COMMERCIAL CORPORATION,
                                        as Agent and Lender

                                        By: Frank Imperato 
                                        Title: Vice President

                                        FLEET BANK, N.A.,
                                        NATWEST BANK N.A., as Lender

                                        By: Alice Adleberg
                                        Title: Vice President




AGREED:

JACO ELECTRONICS, INC.

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

NEXUS CUSTOM ELECTRONICS, INC.

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