SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                                    FORM 8-K


                 Current Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934


       Date of Report (Date of earliest event reported) December 22, 2006


                             Jaco Electronics, Inc.
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             (Exact name of Registrant as specified in its charter)


                New York                001-05896               11-1978958
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         (State or other jurisdiction   (Commission           (I.R.S. Employer
               of incorporation)        File Number)        Identification No.)



                   145 Oser Avenue, Hauppauge, New York         11788
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               (Address of principal executive offices)       (Zip Code)


        Registrant's telephone number, including area code (631) 273-5500
                                                           --------------------

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                                 Not Applicable
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          (Former name or former address, if changed since last report)



Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

     |_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)

     |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)

     |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))

     |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))







Item 1.01.  Entry into a Material Definitive Agreement.

On December 22, 2006, Jaco Electronics (the "Company" or "Jaco") entered into a
Credit Agreement with The CIT Group/Business Credit, Inc. and CIT Capital
Securities, LLC (the "Agreement") providing for a new $55 million secured
revolving line of credit. The credit facility has a maturity date of December
22, 2009, subject to extension. Jaco borrowed a total of $33.5 million under the
new credit facility to refinance $30.8 million of indebtedness that had been
outstanding under its previous $40 million credit facility, which has now been
terminated, and to provide $2.7 million of cash collateral for outstanding
stand-by letters of credit issued under the previous credit facility on behalf
of certain vendors of the Company. Borrowing availability under the credit
facility is based principally on eligible accounts receivable and eligible
inventories, in each case as defined in the Agreement. Borrowings under the
credit facility are collateralized by substantially all of the assets of the
Company. The initial interest rate under the credit facility is LIBOR plus 2.25%
or Prime plus 0.75%, at the option of the Company.


Under the  Agreement,  the  Company is  required  to comply  with the  following
financial covenants: maintain a Fixed Charge Coverage Ratio (as defined therein)
of 1.1 to 1.0 as of the  end of  each  quarterly  period;  and a  limitation  on
capital expenditures of $700,000 during the fiscal year ending June 30, 2007 and
$500,000 during each fiscal year  thereafter,  with the ability to carry forward
any unused  permitted  capital  expenditure  amounts to  subsequent  years.  The
Agreement also contains other covenants and restrictions,  including limitations
on the Company's incurrence of additional  indebtedness  unrelated to the credit
facility;  its incurrence of liens; mergers,  consolidations and sales of assets
by the  Company;  investments,  loans and  acquisitions  by the  Company;  and a
prohibition on the Company's  ability to pay cash  dividends.  In addition,  the
Agreement includes a subjective  acceleration clause and requires the deposit of
customer  receipts to be directed to a blocked  account and applied  directly to
the repayment of indebtedness outstanding under the credit facility.  Failure to
remain in  compliance  with these  covenants  could cause the lenders  under the
credit  facility to declare the  Company to be in default  under the  Agreement,
requiring all outstanding borrowings under the credit facility to be immediately
due and payable.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.

(a)  As described under Item 1.01 above, on December 22, 2006, Jaco became
     obligated for a material amount of indebtedness under its new revolving
     line of credit facility.







                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.



Date:         December 28, 2006                         JACO ELECTRONICS, INC.


                                                 By:  /s/ Jeffrey D. Gash
                                                     ---------------------------
                                                       Jeffrey D. Gash
                                                       Executive Vice President