October 26, 1999



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

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

Gentlemen:

                  Reference is made to the Second  Restated and Amended Loan and
Security Agreement in effect between GMAC Commercial Credit LLC (as successor by
merger  to BNY  Financial  Corporation),  the  other  Lenders  and you,  with an
effective date of September 13, 1995, as  supplemented  and amended from time to
time (the  "Agreement") and more specifically to a letter amendment dated August
1, 1997 (the "Amendment").  Initially capitalized terms not defined herein shall
have the meanings  ascribed to such terms in the  Agreement or if  applicable in
the Amendment.

                  It is hereby  agreed by and  between us that  effective  as of
September 1, 1999, that the first sentence of paragraph 21 of the Agreement,  as
amended by the Amendment, is hereby amended to read, in its entirety as follows:

                  "This   (Second   Restated  and  Amended  Loan  and  Security)
         Agreement shall (subject to compliance  with the Conditions  Precedent)
         become  effective on the Closing Date hereof,  without any interruption
         or break in continuity (as more fully described in the second paragraph
         hereof) and shall continue  until the sixth  anniversary of the Closing
         Date."

                  Except as herein specifically  amended,  the Agreement and the
Amendment  shall  remain in full  force  and  effect in  accordance  with  their
original terms, except as previously amended.



<PAGE>


                  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 successor by
                                merger to BNY FINANCIAL CORPORATION
                                as successor in interest to THE BANK OF NEW YORK
                                COMMERCIAL CORPORATION)
                                as Agent and Lender

                                By: /s/ Frank Imperto
                                Title: Senior Vice President



                                 FLEET BANK, N.A. f/k/a/
                                 NATWEST BANK N.A., as Lender


                                 By: /s/Alice Adleberg
                                 Title: Vice President


AGREED AND ACCEPTED:
JACO ELECTRONICS, INC.

By: /s/ Jeffrey D. Gash
Title: Secretary


NEXUS CUSTOM ELECTRONICS, INC.

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

Continued on Page 3.
<PAGE>


We,  the  undersigned  entities,  as  guarantors  of the  Obligations  under the
Agreement,  hereby  agree to the above  amendment  to the  Agreement  and hereby
ratify  and  confirm  that  the  guarantees   shall  continue  to  guaranty  the
Obligations under the Agreement as amended in the preceding Amendment above, and
such guarantees shall remain in full force and effect and apply to the Agreement
as previously supplemented and amended and as amended above.


RATIFIED AND CONFIRMED:
DISTEL, INC.

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


JACO OVERSEAS, INC.

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


QUALITY COMPONENTS, INC.

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


R.C. COMPONENTS, INC.

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


NEXUS CUSTOM ELECTRONICS, INC.

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