k607ex10275.htm


    AMENDMENT
      NO. 2 TO CONSENT TO SUPPLEMENTAL LOAN

    UNDER
      LOAN AND SECURITY AGREEMENT

    


    As
      of May
      18, 2007

    


    JACO
      ELECTRONICS, INC.

    145
      Oser
      Avenue

    Hauppauge,
      New York 11778

    


    Ladies
      and Gentlemen:

    


    The
      CIT
      Group/Business Credit, Inc. (“CIT”), in its capacity as agent pursuant to
      the Credit Agreement (as hereinafter defined) acting for and on behalf of the
      financial institutions which are parties thereto as lenders (in such capacity,
      “Agent”), and the financial institutions which are parties to the Credit
      Agreement as lenders (each a “Lender” and collectively, “Lenders”)
      have entered into certain financing arrangements pursuant to which Agent and
      Lenders may make loans and advances and provide other financial accommodations
      to Jaco Electronics, Inc., a New York corporation, and Interface Electronics
      Corp., a Massachusetts corporation (collectively, the “Borrowers”) as set
      forth in the Credit Agreement, dated as of December 22, 2006, by and among
      the
      Borrowers, Agent and Lenders (as the same now exists or may hereafter be
      amended, modified, supplemented, extended, renewed, restated or replaced, the
      “Credit Agreement”), and other agreements, documents and instruments
      referred to therein or at any time executed and/or delivered in connection
      therewith or related thereto (all of the foregoing, together with the Credit
      Agreement, as the same now exist or may hereafter be amended, modified,
      supplemented, extended, renewed, restated or replaced, being collectively
      referred to herein as the “Loan Documents”).

     

    Agent
      and
      Borrowers executed a Consent to Supplemental Loan Under Loan and Security
      Agreement dated as of March 5, 2007 (as amended, the “Consent”), pursuant to
      which Agent and Lenders agreed to extend to Borrowers a Supplemental Loan (as
      defined in the Consent) to the Borrowers.

     

    The
      Borrowers have requested that the Agent and Required Lenders agree to various
      amendments to the Consent, and Agent and Required Lenders are agreeable to
      all
      of the foregoing, on and subject to the terms and conditions set forth in this
      Amendment No. 2 to Consent to Supplemental Loan under Loan and Security
      Agreement (this “Amendment”).

     

    In
      consideration of the premises and the mutual covenants contained herein and
      in
      the Credit Agreement and the Consent, the parties hereto agree as
      follows:

     

    1.  Defined
      Terms

     

    (a)           Capitalized
      terms used and not otherwise defined herein shall have their respective meanings
      as defined in the Credit Agreement and the Consent.

     

    2.  Amendments
      to Consent

     

    (a)           Section
      2.1 of the Consent is hereby amended and restated in its entirety as
      follows:

     

    “2.1           Consent
      to Supplemental Loan.  Agent hereby consents to extend to
      Borrowers a Supplemental Loan under the Loan Agreement (but in no event shall
      the Revolving Loans plus the Supplemental Loan exceed the Revolving Commitment)
      in an amount equal to the following amounts during the following periods: (a)
      from May 18, 2007 up to and including May 30, 2007, $2,500,000, (b) from May
      31,
      2007 up to and including June 6, 2007 2,250,000, (c) from June 7 2007 up to
      and
      including June 14, 2007, $2,000,000, (d) from June 15, 2007 up to and including
      June 21, 2007 $1,750,000, (e) from June 22, 2007 up to and including June 30,
      2007 $1,500,000, (f) from July 1, 2007  up to and including July 7, 2007,
      $1,000,000, (g) from July 8, 2007  up to and including July 14, 2007,
      $500,000, and (h) from and after July 15, 2007, $0.  If the
      Supplemental Loan during any of the foregoing periods exceeds the applicable
      Supplemental Loan amount permitted for such period, such excess shall be
      immediately due and payable without demand.  If such excess is not
      repaid in full, Borrowers acknowledge that the failure to make such payment
      shall constitute an Event of Default under the Loan Agreement.”

     

    (b)           Section
      2.3 of the Consent is hereby deleted in its entirety.

     

    3.  Representations,
      Warranties and Covenants

     

    .  Each
      of the Borrowers represents, warrants and covenants with and to Agent and
      Lenders as follows, which representations, warranties and covenants are
      continuing and shall survive the execution and delivery hereof, the truth and
      accuracy of, or compliance with each, together with the representations,
      warranties and covenants in the other Loan Documents, being a condition of
      the
      effectiveness of this Amendment and a continuing condition of the making or
      providing of any Loans or other financial accommodations by Agent and Lenders
      to
      the Borrowers:

     

    (a)  This
      Amendment has been duly authorized, executed and delivered by all necessary
      action of each of the Borrowers and is in full force and effect, and the
      agreements and obligations of each of the Borrowers contained herein constitute
      legal, valid and binding obligations of each of the Borrowers, enforceable
      against each of the Borrowers in accordance with their terms; and

     

    (b)  All
      of
      the representations and warranties set forth in the Credit Agreement, as amended
      hereby, and in the other Loan Documents, are true and correct in all material
      respects after giving effect to the provisions of this Amendment, except to
      the
      extent any such representation or warranty is made as of a specified date,
      in
      which case such representation or warranty shall have been true and correct
      as
      of such date.

     

    4.  Conditions
      Precedent

     

    .  This
      Amendment shall not become effective unless all of the following conditions
      precedent have been satisfied in full, as determined by Agent:

     

    (a)  Agent
      shall have received an original of this Amendment (or an executed copy hereof
      by
      facsimile or by email), duly authorized, executed and delivered by each of
      the
      Borrowers; and

     

    (b)  Agent
      shall have received all related agreements, documents and instruments as may
      be
      requested by Agent.

     

    5.  No
      Other Changes

     

    .  Except
      as specifically modified pursuant hereto, no other changes or modifications
      to
      the Consent are intended or implied and in all other respects, the Consent
      and
      other Loan Documents are hereby ratified, restated and confirmed by all parties
      hereto as of the date hereof.  To the extent of any conflicts between
      the terms of this Amendment and the Consent, the terms of this Amendment shall
      control.

     

    6.  Successors
      and Assigns

     

    .  This
      Amendment shall be binding upon and inure to the benefit of each of the parties
      hereto and its respective successors and assigns.

     

    7.  Counterparts

     

    .
      This Amendment may be executed in any number of counterparts, but
      all
      of such counterparts shall together constitute but one and the same
      agreement.

     

    8.  Required
      Lender Authorization

     

    .  Agent
      is executing this Amendment at the request and on behalf of Required Lenders
      in
      accordance with Section 9.03 of the Credit Agreement.

     

    [SIGNATURE
      PAGE FOLLOWS]

    Very
      truly yours,

    


    THE
      CIT GROUP/BUSINESS CREDIT, INC., as Agent

    


    By:
      /s/
George Louis
      McKinley                                                                           

    


    Name:
      George Louis
      McKinley                                                                           

    


    Title:                      Vice
      President

    


    
      	
               

            	
              Read
                and Agreed to:

            


    

    


    
      	
               

            	
              JACO
                ELECTRONICS, INC.

            


    

    


    By:
      /s/ Jeffrey D.
      Gash                                                                

    


    Name:                      Jeffrey
      D.
      Gash                                                      

    


    Title:                      CFO                                                      

    


    
      	
               

            	
              INTERFACE
                ELECTRONICS CORP.

            


    

    


    By:
      /s/ Jeffrey D.
      Gash                                                                

    


    Name:                      Jeffrey
      D.
      Gash                                                      

    


    Title:                      CFO                                                      

    


    


    Read
      and
      Agreed to:

    


    
      	
               

            	
              BANK
                OF AMERICA, N.A., as a
                Lender

            


    

    


    By:
      /s/                      Robert
      Mahoney                                                      

    


    Name:                      Robert
      Mahoney                                                      

    


    Title:                      Sr.
      Vice
      President