September 21, 1998


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

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

Gentleman:

         Reference  is made to (a) the  Second  Restated  and  Amended  Loan and
Security Agreement between Jaco Electronics,  Inc. and Nexus Custom Electronics,
Inc. as Debtor, and our predecessor-in-interest, The Bank of New York Commercial
Corporation,  as Lender, and each other Lender a party thereto,  dated September
13, 1995, as amended and supplemented  (the "Loan Agreement") and (b) the letter
agreement and amendment dated as of April 10, 1996 among the parties to the Loan
Agreement (the "Letter Agreement").

It is hereby agreed that,  effective as of September 21, 1998, clause (b)(ii) of
the Letter Agreement shall be amended to read in its entirety a follows:

     "(ii)any such  repurchase  occurs  before  September  14,  2000 at the very
          latest; and "

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