EXHIBIT 10(v)

                                                       As of September 29, 1998

First Union National Bank
205 Church Street
New Haven, CT 06510

Gentlemen:

      This letter sets forth our agreements with respect to the obligations 
described below of Farmstead Telephone Group, Inc. (the "Borrower") to 
First Union National Bank (successor-in-interest to Affiliated Business 
Credit Corporation) ("First Union").

      Borrower acknowledges that it is unconditionally indebted to First 
Union with respect to the revolving loan (the "Revolving Loan") extended by 
First Union to Borrower which is evidenced by, among other things, a 
Commercial Revolving Loan and Security Agreement dated June 5, 1995, as 
amended by letter agreements between Borrower and First Union dated March 
11, 1996, May 1, 1996, September 6, 1996, as of May 30, 1997, as of 
December 1, 1997, May 6, 1998 and August 24, 1998 (collectively, the "Loan 
Agreement"), a $3,500,000 Third Amended and Restated Revolving Promissory 
Note dated June 6, 1997 (the "Third Amended and Restated Revolving 
Promissory Note"), and a $500,000 Revolving Promissory Note dated August 
24, 1998 (the "$500,000 Note") (the Third Amended and Restated Revolving 
Promissory Note and the $500,000 Note are collectively referred to herein 
as the "Notes"). The current principal balance of the Notes as of September 
23, 1998 is $3,380,505.08, plus interest accrued and accruing thereon and 
costs and expenses of collection, including without limitation, attorneys' 
fees (collectively, the "Indebtedness"). Additionally, Borrower 
acknowledges that it has no defense, offset, counterclaim or right of 
recoupment to its obligations with respect to the Indebtedness and further 
that it has no other claim whatsoever against First Union (whether arising 
in contract, tort or otherwise) with respect to the Indebtedness or any 
other matter whatsoever.

      Borrower has requested that First Union extend the availability of 
the $500,000 temporary increase in the maximum dollar amount of 
indebtedness that may be outstanding under the Loan Agreement, and 
evidenced by the $500,000 Note, for the period through October 31, 1998 
(the "Accommodation"). Capitalized terms used herein that are not defined 
herein have the meanings ascribed to them in the Loan Agreement.

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      1.    As an inducement to and in consideration of First Union's 
agreements contained herein, the Borrower represents, warrants and 
acknowledges to First Union that (a) all representations and warranties 
contained in the Loan Agreement and in the other documents executed in 
connection with the Indebtedness (collectively, including without 
limitation the Loan Agreement, the "Loan Documents") are true and correct 
on and as of the date hereof and are incorporated herein by reference and 
hereby remade; (b) the resolutions previously adopted by the Board of 
Directors of the Borrower and provided to First Union have not in any way 
been rescinded or modified and are now in full force and effect, except to 
the extent that they have been modified or supplemented to authorize this 
Agreement and the transactions described herein; (c) except as expressly 
waived herein, no event of default has occurred or is continuing under any 
of the Loan Documents and no condition exists which would constitute an 
event of default thereunder but for the giving of notice or passage of 
time, or both; and (d) the consummation of the transactions contemplated 
hereby is not prevented or limited by, nor does it conflict with or result 
in a breach of the terms, conditions or provisions of, any evidence of 
indebtedness, agreement or instrument of whatever nature to which Borrower 
party or by which it is bound, does not constitute a default under any of 
the foregoing, and does not violate any federal, state or local law, 
regulation or order of any court or agency which is binding upon Borrower.

      2.    The Loan Agreement is hereby amended as follows:

            (a)  The definition of "Borrowing Base" is hereby deleted in 
            its entirety and the following is substituted in lieu thereof:

            ""Borrowing Base" shall mean an amount equal to the lesser of. 
            (i) (1) from September 30, 1998 through October 31, 1998, FOUR 
            MILLION DOLLARS ($4,000,000), and (2) from and after November 
            1, 1998, THREE MILLION FIVE HUNDRED THOUSAND DOLLARS and (ii) 
            an amount equal to the aggregate of (1) seventy-five percent 
            (75%) of Eligible Accounts (not including AT&T Coupons (as 
            defined below)), plus (2) the lesser of (A) ONE HUNDRED FIFTY 
            THOUSAND DOLLARS ($150,000), or (B) fifty percent (50%) of the 
            amount due to Borrower from American Telephone & Telegraph 
            Company ("AT&T") in connection with the coupons issued in the 
            so-called SPIRIT Communications System Class Action Settlement 
            ("AT&T Coupons") (it being expressly agreed and understood that 
            only the amount by which AT&T's obligations with respect to 
            AT&T Coupons together with all accounts due from AT&T to 
            Borrower exceeds the then amount due from Borrower to AT&T 
            shall be eligible pursuant to this subsection (2)(B))."

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      3.    Borrower acknowledges and affirms that it shall be able to 
request the Additional Accommodation only to the extent that Borrower has 
borrowing availability pursuant to Section (ii) of the definition of 
"Borrowing Base" as currently set forth in the Loan Agreement.

      4.    The Borrower acknowledges and agrees that all indebtedness, 
liabilities and obligations of the Borrower to First Union, including 
without limitation, the Indebtedness evidenced by the Notes, shall (except 
as set forth in the Intercreditor Agreements) continue to be secured by a 
first lien on and security interest in all of the Borrower's assets, 
including without limitation the promissory note from FAMS, LLC to Borrower 
dated December 1, 1997 and all security therefor.

      5.    This Agreement and the other Loan Documents constitute the 
entire understanding and agreement among the parties hereto and supersede 
any prior or contemporaneous oral understanding with respect to the subject 
matter hereof Except as expressly modified herein, the Loan Documents 
remain unmodified and in full force and effect in accordance with their 
terms. To the extent that there is a conflict between this Agreement and 
the Loan Documents, the terms of this Agreement shall prevail.

      If the foregoing is in accordance with your agreement, please 
indicate the same by signing below.

                                       Very truly yours,

                                       FARMSTEAD TELEPHONE GROUP, INC.

                                       By:  
                                           --------------------------------
                                           Robert G. LaVigne
                                           Its  Executive Vice President & CFO

Reviewed and Agreed to:

FIRST UNION NATIONAL BANK

By:  
    -------------------------------
    Its

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STATE OF CONNECTICUT
                                       ss:    East Hartford
COUNTY OF HARTFORD

      On this the 30th day of September, 1998 before me, the undersigned 
      officer, personally appeared Robert G. LaVigne who acknowledged that 
      he is the Executive Vice President and CFO of Farmstead  Telephone 
      Group, Inc., a Delaware corporation, and that he as such officer, 
      being authorized so to do, executed the foregoing instrument for the 
      purposes therein contained, as his and its free act and deed.

      IN WITNESS WHEREOF, I hereunto set my hand.

                                       Notary Public 
                                       My Commission Expires  4/30/2003

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