MODIFICATION AGREEMENT

                                                              EXHIBIT 10(aa)

                             THIS MODIFICATION AGREEMENT, dated as of

                             February 19, 2004, by and between BUSINESS

                             ALLIANCE CAPITAL CORP., a Delaware Corporation,

                             with a place of business at 214 Carnegie

                             Center, Suite 302, Princeton, New Jersey 08540,

                             hereinafter called "BACC," and FARMSTEAD

                             TELEPHONE GROUP, INC., a Delaware corporation,

                             ("Borrower"), with its chief executive offices

                             at 22 Prestige Park Circle, East Hartford, CT

                             06108.

                                  RECITALS

                                  --------

      WHEREAS, BACC and Borrower entered into a Loan and Security Agreement

dated as of February 19, 2003 (said agreement as amended, modified or

extended from time to time the "Loan Agreement") which sets forth the terms

and conditions of One Million Five Hundred Thousand Dollar ($1,500,000.00)

revolving credit facility by BACC to Borrower; and

      WHEREAS, the Initial Term of the Loan Agreement expires on the date

hereof; and

      WHEREAS, Borrower has applied to BACC for a Renewal to February 19,

2005 of the Term of said revolving credit facility, for an increase in the

maximum amount of the revolving credit facility to One Million Seven Hundred

Thousand Dollars ($1,700,000.00), and for other modifications to the terms

and conditions set forth in the Loan Agreement and other Loan Documents; and

      WHEREAS, BACC has approved the application of the Borrower on the

terms and condition set forth herein.

      NOW, THEREFORE, in consideration of the premises and other good and

valuable consideration, the parties hereto adopt the above recitals and

agree as follows:

1.    Capitalized terms not defined herein but defined in the Loan Agreement

shall have the same meanings ascribed to such terms in the Loan Agreement.

2.    The definition of Termination Date in section 1.1 of the Loan

Agreement is hereby modified to read as follows:

            Termination Date means (a) February 19, 2005 unless such date is

            extended pursuant to section 3.1 hereof, and if so extended on

            one or more occasions the last date of the last such extension,

            or (b) if earlier terminated by BACC pursuant to section 9.1

            hereof, the date of such termination.

3.    Sections 2.1, and 2.9 of the Loan Agreement are hereby modified to

read as follows:

            2.1 Revolving Advances; Advance Limit. Upon the request of

            Borrower, made at any time from and after the date hereof until

            the Termination Date, and so long as no Event of Default has

            occurred and is continuing, BACC may, in its sole and absolute

            discretion, make Advances in an amount up to (a) seventy five

            percent (75%) of the aggregate outstanding amount of Eligible

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            Accounts, plus (b) the lesser of (1) twenty five percent (25%)

            of the aggregate value of the Eligible Inventory or (2) Four

            Hundred Thousand Dollars ($400.000.00) (such lesser of (1) or

            (2) i