GMAC Commercial Finance LLC
                           1290 Avenue of the Americas
                               New York, NY 10104


September 19, 2003




JACO ELECTRONICS, INC. ("Jaco")
145 Oser Avenue
Hauppauge, NY  11788

NEXUS CUSTOM ELECTRONICS, INC. ("Nexus")
Prospect Street
Brandon, VT  05733

INTERFACE ELECTRONICS, INC. ("Interface")
124 Grove Street
Franklin, MA  02028

Gentlemen:

                  Reference is made to the Second Restated and Amended Loan and
Security Agreement in effect between GMAC Commercial Finance LLC, as successor
by merger to GMAC Commercial Credit LLC, which was the successor in interest to
BNY Financial Corporation ("GMAC"), as Agent and Lender, and Fleet Bank, N.A.,
f/k/a Natwest Bank, N.A ("Fleet") as Lender, and Jaco, Nexus and Interface,
dated September 13, 1995, as supplemented and amended from time to time, (the
"Agreement"). Both GMAC and Fleet may hereinafter be referred to jointly as the
"Lenders", and individually, as a "Lender" and GMAC may also be herein referred
to as "Agent" when acting in such capacity, as the case may be. Initially
capitalized terms not defined herein shall have the meanings ascribed to such
terms in the Agreement. Jaco, Nexus and Interface may hereinafter and in the
Agreement, be referred to jointly and severally as "Debtors", and each
individually as a "Debtor".

                  WHEREAS you have informed us that you are in default of your
minimum EBITDA requirement under Section 18(g) of the Agreement as amended, for
the period ending June 30, 2003, and you have requested that we waive the
default relating to your EBITDA requirement for the period ending June 30, 2003
only; and

                 WHEREAS you have  requested  that we extend the  Termination
               Date of the Agreement through October 1, 2004; and

                  WHEREAS the Lenders are willing to agree to waive the above
described default and to extend the Agreement subject to the terms and
conditions herein below;

                  NOW THEREFORE IT IS HEREBY AGREED AS FOLLOWS:

1.                    The Lenders hereby waive the Debtors default of their
                      minimum EBITDA requirement, as required by Section 18(g)
                      (as amended) of the Agreement for only the period
                      terminating on June 30, 2003.

2.                    It is hereby agreed by and between us that as of the date
                      hereof, the first sentence of Section 21 of the Agreement
                      as amended is hereby deleted, and replaced with the
                      following sentence:

                           "This Second Restated and Amended Loan and Security
                           Agreement shall (subject to compliance with
                           Conditions Precedent) become effective on the closing
                           date hereof, without any interruption or break in
                           continuity and shall continue until October 1, 2004."

3.                    Effective the date hereof, the definition of "Contract
                      Rate" as set forth in Section 1 of the Agreement, as
                      heretofore amended, is hereby deleted in its entirety and
                      replaced with the following:

                           "Contract Rate" means an interest rate per annum
                           equal to the Alternate Base Rate plus three-quarters
                           of one (.75%) percent. "Alternate Base Rate" shall
                           have the meaning ascribed to such term in Section 1
                           of the Agreement. The "LIBO Rate" shall no longer be
                           an available option to the Debtors."

4.                    The Contract Rate as stated in Section 3 above shall
                      increase to an interest rate per annum equal to the
                      Alternate Base Rate plus two (2%) percent, if the Debtors
                      shall have not arranged for a suitable replacement lender
                      ("Replacement Lender") to payout the pro-rata outstanding
                      obligations owing by Debtors to Fleet under the Agreement
                      and replace Fleet as a lender under the Agreement (which
                      Replacement Lender shall be acceptable to the Agent in its
                      sole discretion) by December 31, 2003.

5.                    Debtors agree to pay, on November 7, 2003, the Agent for
                      the pro-rata benefit of the Lenders a fee of $25,000.00 if
                      the Debtors shall not have delivered to the Agent, by
                      November 7, 2003, a written commitment from a Replacement
                      Lender (which commitment shall be acceptable to the
                      Lenders in their sole discretion, reasonably exercised).

6.                    Debtors shall arrange for an appraisal of their Inventory
                      by an appraiser acceptable to the Lender, in their sole
                      discretion, by October 15, 2003.

7.                    Inconsideration for the foregoing, the Debtors agree to
                      pay the Agent for the pro-rata benefit of the Lenders a
                      waiver fee of $100,000.00 payable as of the date of this
                      letter. If Fleet shall not have been replaced by a
                      Replacement Lender by December 31, 2003, the Debtors agree
                      to pay on December 31, 2003, to the Agent for the pro-rata
                      share of the Lenders an additional fee of $125,000.00.

8.                    The fees provided for in Sections 5 and 7 above may be
                      automatically charged by the Agent to the Debtors account
                      as of the due date of such fees.

9.                    Debtors agree to furnish to each of the Lenders, monthly
                      (except for any quarter ending month) as soon as possible
                      but in no event more than thirty (30) days after the end
                      of each month, consolidated, unaudited financial
                      statements of the Debtors, all in reasonable detail and
                      form satisfactory to the Agent. These statements shall be
                      in addition to any other financial statements Debtors are
                      required to provide to the Lenders pursuant to the terms
                      of the Agreement.

                10.   The waiver provided herein is only with respect to the
                      section of the Agreement referred to above, and only for
                      the time period referred to above, and should not be
                      construed as a waiver of your compliance with any other
                      provisions of the Agreement, nor as waiver of the
                      provisions of the specific section referred to above for
                      any other time period.

               11.  By their signatures below,  Jaco, Nexus and Interface hereby
                    ratify the  Agreement  and agree to be jointly and severally
                    liable for all  Obligations  under the  Agreement  and agree
                    that all of the  outstanding  amounts of the Loans under the
                    Agreement, as of the date hereof, shall be valid and binding
                    Obligations of each of them, and shall be deemed Obligations
                    outstanding  under  the  Agreement,  and  hereby  agree  and
                    promise  to  repay  to the  Agent,  for the  benefit  of the
                    Lenders, such Obligations  (including but not limited to all
                    applicable  interest)  in  accordance  with the terms of the
                    Agreement,  but in no event, later than the Termination Date
                    (for purposes hereof,  "Termination Date" shall mean October
                    1, 2004,  or any extended  termination  date, or any earlier
                    termination date, whether by acceleration or otherwise).

                  12. By their signatures below, Jaco, Nexus and Interface
                      hereby ratify and affirm to the Agent that as of the date
                      hereof, they are in full compliance with all covenants
                      under the Agreement (except as waived above) and certify
                      that all representations and warranties of the Agreement
                      are true and accurate as of the date hereof, with the same
                      effect as if they had been made as of the date hereof.

          Except as herein specifically  amended,  the Agreement shall remain in
     full force


<PAGE>


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 FINANCE LLC
                                  (as Agent and Lender)

                                  By:/s/ David Duffy
                                     -----------------------------------------
                                       Title: Senior Vice President

AGREED AND ACCEPTED:
JACO ELECTRONICS, INC.                      FLEET BANK, N.A.
                                                (as Lender)

By: /s/ Jeffrey D. Gash                  By: /s/ Ken Geiger
    -------------------------               -----------------------
    Title: CFO                                Title: Managed Assets Officer

NEXUS CUSTOM ELECTRONICS, INC.              INTERFACE ELECTRONICS CORP.

By:/s/ Joel H. Girsky                    By: /s/ Joel H. Girsky
   ----------------------------                  --------------------------
      Title: President                           Title: President

                            RATIFICATION OF GUARANTOR
By its signature below, Jaco Overseas, Inc. hereby ratifies its guaranty of the
Agreement, as such Agreement has been amended from time to time, and hereby
agrees to be liable for all of the Obligations under the Guaranty with respect
to the Agreement as amended from time to time, including but not limited to by
this amendment and any previous amendments, and hereby agrees that the said
Guaranty shall continue to apply and remain in full force and effect with
respect to the amended Agreement and hereby agrees and consents that a certain
General Loan and Security Agreement dated January 20, 1989, shall continue to be
in full force and effect and apply to the amended Agreement, and it further
hereby agrees to make all payments of all its Obligations under the said
Guaranty and General Loan and Security Agreement to GMAC Commercial Finance LLC
as Agent and Lender, and to Fleet Bank, N.A. as Lender, as successors in
interest to the previous Agent and Lenders respectively.

RATIFIED, ACCEPTED AND CONSENTED:
JACO OVERSEAS, INC.

By: /s/ Joel H. Girsky
    ----------------------------------------
      Title: President