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