November 14, 2001


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

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

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

Gentlemen:

     Reference  is made to the Second  Restated  and Amended  Loan and  Security
Agreement  in  effect  between  us as  successor  by  merger  to  BNY  Financial
Corporation which was merged into GMAC Commercial Credit LLC ("GMAC"),  as Agent
and Lender,  and Fleet Bank,  N.A., f/k/a Natwest Bank, N.A ("Fleet") as Lender,
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".  Initially  capitalized terms not
defined herein shall have the meanings ascribed to such terms in the Agreement.

     WHEREAS,  you have  requested that we amend the Agreement as follows below;
and

     WHEREAS,  the Lenders are willing to agree to such  amendments,  subject to
the terms and conditions hereof.

                  NOW THEREFORE IT IS HEREBY AGREED AS FOLLOWS:

                  1. The definition of "Contract Rate" as set forth in paragraph
                  1 of the Agreement, as amended by an Amendment letter dated
                  August 1, 1997, and by an Amendment letter dated June 6, 2000
                  is hereby deleted and replaced with the following:

                                    " 'Contract Rate' means an interest rate per
                           annum equal to (i) the applicable LIBO Rate, plus one
                           and three quarter percent (1.75%) in the case of LIBO
                           Rate Loans first continued or converted thereto prior
                           to June 30, 2000, (ii) in the case of LIBO Rate Loans
                           first continued or converted thereto, in the quarter
                           ending September 30, 2000 or thereafter, the
                           applicable LIBO Rate plus the margin ("LIBO Margin")
                           stated opposite the ratio range of Funded Debt to net
                           earnings before interest, taxes, depreciation,
                           amortization, extraordinary gains and non cash losses
                           and all other non-cash charges on a consolidated
                           basis ("EBITDA") during the immediately preceding
                           four fiscal quarters as stated in the table
                           immediately below:



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                                    Funded Debt/EBITDA              LIBO Margin

                                    greater than 3.5 to 1           2 1/4%

                                    3.0 to 3.5 to 1                  2%

                                    2.5 to 3.0 to 1                 1 3/4%

                                    2.0 to 2.5 to 1                 1 1/2%

                                    1.5 to 2.0 to 1                 1 1/4%

                                    less than 1.5 to 1               1%

                           The Contract Rate applicable to LIBO Rate Loans shall
be adjusted quarterly."

                  2. The definition of "Inventory Borrowing Base" appearing in
                  Section 1 of the Agreement, shall be amended at the end of the
                  Temporary Increase Period (as defined below) so that the
                  percentage of "60%" appearing in the first line of such
                  definition, shall be replaced with the percentage "55%".

                  3. Effective as of September 30, 2001, ("the "Amendment
                  Effective Date") hereof, and only for the period commencing on
                  the Amendment Effective Date and ending on June 29, 2002 (the
                  "Temporary Increase Period"), the phrase "$30,000,000"
                  appearing on the eighth line of Section 4(a) of the Agreement
                  shall be deleted in its entirety and replaced with the phrase
                  "$35,000,000". At the end of the Temporary Increase Period,
                  the Debtor shall repay any excess amounts outstanding with
                  respect to the Inventory Borrowing Base, so as to reflect that
                  the loan amounts outstanding with respect to inventory shall
                  not exceed the maximum amount allowed to be outstanding with
                  respect to inventory under the terms of the Agreement at such
                  time, and the amended figure stated above shall at such time
                  revert back to the amount of "$30,000,000".

                  4.Section  17(e) of the  Agreement  shall be  deleted in its
                  entirety and replaced with the following:


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<PAGE>

                           "(e) Maintain at all times, from and after the
                           Amended Effective Date, a consolidated net worth (all
                           amounts which would be included under shareholder's
                           equity on a consolidated balance sheet of Debtor,
                           determined in accordance with generally accepted
                           accounting principles), in an amount not less than
                           $47,000,000, which amount shall be increased at the
                           end of each quarter on a cumulative basis by an
                           amount equal to 50% of the consolidated net profit
                           after taxes, if any, for such quarter. For purposes
                           of calculating this covenant, any writedown for
                           impairment of goodwill, will not be taken into
                           account in making the calculation under this
                           covenant."

               5.Section 18(e) of the Agreement shall be deleted in its entirety
                 and replaced with the following:

                           "(e) Permit at any time, from and after the Amended
                           Effective Date, the ratio of Indebtedness to Tangible
                           Net Worth to be more than 3.0 to 1.0 for purposes of
                           this Paragraph 18(e), "Indebtedness" shall mean
                           consolidated total liabilities of Debtor and its
                           Subsidiaries determined in accordance with generally
                           accepted accounting principles consistently applied.
                           "Tangible Net Worth" shall mean the excess of
                           consolidated total assets of Debtor and its
                           Subsidiaries over consolidated total liabilities of
                           Debtor and its Subsidiaries, each to be determined in
                           accordance with generally accepted accounting
                           principles consistently applied, excluding however,
                           from the determination of consolidated total assets,
                           all assets which would be classified as intangible
                           assets under generally accepted accounting
                           principles, including without limitation, goodwill,
                           patents, trademarks, trade names, copyrights and
                           franchises."

                    6. Section  17(d) of the  Agreement  shall be deleted in its
                    entirety and replaced by the following section 17(d):

                           "17(d) Debtor shall maintain at all times, on a
                   consolidated basis, a ratio of EBIT to total interest charges
                   due during any quarter of no less than 1.5 to 1 calculated on
                   rolling four quarter basis, beginning on
                   September 30, 2002. "EBIT" shall mean earnings before
                   interest, taxes, extraordinary gains, and extraordinary non
                   cash losses."

                    7. Section  17(f) of the  Agreement  shall be deleted in its
                    entirety and replaced with the following Section 17(f).

                           "17(f) Maintain at all times a ratio of the sum of
                  (i) cash and cash equivalents, plus (ii) accounts receivable
                  to Current Liabilities of not less than .40 to 1 as of 6/30/00
                  and at all times thereafter. For purposes of this paragraph
                  "Current Liabilities" shall mean all liabilities treated as
                  current liabilities in accordance with generally accepted
                  accounting principles consistently applied, including without
                  limitation, all obligations payable on demand or within one
                  year after the date on which the determination is made,
                  together with Obligations under this Agreement exclusive of
                  any amounts outstanding under the Term Loans Notes."

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<PAGE>

                    8. Section 17(h) of the  Agreement,  as amended by a certain
                    amendment  dated June 6, 2000, in effect  between you and us
                    (the  "Amendment"),  shall be  deleted in its  entirety  and
                    replaced by the following Section 17(h):

                           "17(h) Maintain at all times the insurance required
                  by the Agreement and cause each Subsidiary to maintain
                  insurance with responsible insurance companies on such of its
                  properties in such amounts and against such risks as is
                  customarily maintained by similar businesses."

                    9.  Section  18(d) of the  Agreement  is hereby  amended  by
                    deleting the following  language from the first  sentence of
                    such Section 18(d):

                                     "(III) liability or indebtedness incurred
                                    by Debtor in a public offering of debt
                                    securities by the Debtor, (iv) liability or
                                    indebtedness incurred by the Debtor in a
                                    private offering of debt securities by the
                                    Debtor".

                           The said deleted language appeared on the second and
third lines on page 18 of the Agreement.

                    10.  Section 18(g) of the Agreement  shall be deleted in its
                    entirety and replaced by the following:

                           "The Debtors shall attain at the end of each quarter,
                           on a consolidated basis, EBITDA for such quarter, in
                           amounts of no less than the amounts stated opposite
                           the fiscal quarters stated below:

                                 Fiscal Quarter            Minimum EBIDTA Amount

                           1 quarter ended 9/30/01                  ($1,000,000)
                           1 quarter ended 12/31/01                   ($500,000)
                           1 quarter ended 3/31/02                   $1,100,000
                           1 quarter ended 6/30/02                   $1,800,000

                    11.  In  consideration  for the  amendments  stated  herein,
                    Debtor shall pay Agent for the pro rata share of each Lender
                    an  amendment  fee of  $20,000.  Jaco,  Nexus and  Interface
                    hereby  authorize  the  Agent to  automatically  charge  the
                    Debtors'  account with the amount of such fee on the date of
                    execution of this Letter Agreement.

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<PAGE>

                    12. Not withstanding anything contrary to the Agreement,  or
                    elsewhere  you hereby  agree that the Agent on behalf of the
                    Lenders  may  audit  each  or all of you at any  time  it so
                    determines  provided  however that while no Event of Default
                    has occurred  under the  Agreement  you shall only be liable
                    for expenses in connection of three such audits per year and
                    hereby agree that we may charge your account with a per diem
                    charge per  auditor  of  $750.00 up to a maximum  amount for
                    each calendar year of $25,000.00. After the occurrence of an
                    Event  of  Default   under  the   Agreement   the   forgoing
                    limitations shall not be applicable.

                    13. 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
                    September 14, 2003, or any extended termination date, or any
                    earlier   termination  date,   whether  by  acceleration  or
                    otherwise).

                    14. 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  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 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,
                  (as Agent and Lender)

                  By:/s/Peter D. Brady
                     --------------------
                     Title:Senior Vice President



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AGREED AND ACCEPTED:
JACO ELECTRONICS, INC.                      FLEET BANK, N.A.

By: /s/Jeffrey D. Gash                         By: /s/Kevin Brown
    -------------------                            ----------------------
Title: Vice President                       Title: Senior Vice President


NEXUS CUSTOM ELECTRONICS, INC.              INTERFACE ELECTRONICS CORP.


By: /s/Jeffrey D. Gash                         By: /s/Jeffrey D. Gash
    ----------------------                      -------------------------
Title: Vice President                       Title: Vice 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, including but
not limited to a certain amendment dated June 6, 2000, (the "Amendment") 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 the Amendment, 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 Credit 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/Jeffrey D. Gash
    ------------------------------
    Title: Vice President


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