<PAGE>
                                                                   Exhibit 10.13

[LOGO OF COMERICA]

                             MASTER REVOLVING NOTE

Variable Rate-Maturity Date-Obligatory Advances (Business and Commercial Loans 
                                     Only)

    AMOUNT          NOTE DATE         MATURITY DATE         TAX IDENTIFICATION #
$16,000,000.00     MAY 6, 1997        JUNE 2, 1999               95-4249240

On the Maturity Date, as stated above, for value received, the undersigned 
promise(s) to pay to the order of COMERICA BANK-CALIFORNIA ("Bank'), at any 
                                  ------------------------
office of the Bank in the State of California, SIXTEEN MILLION AND NO/100 
                                               --------------------------
Dollars (U.S.) (or that portion of it advanced by the Bank and not repaid as 
later provided) with Interest until maturity, whether by acceleration or
otherwise, or an Event of Default, as later defined, at a per annum rate equal 
to the Bank's base rate from time to time in effect PLUS 0.000%* per annum and 
                                                    ------------
after that at a rate equal to the rate of interest otherwise prevailing under 
this Note plus 3% per annum (but in no event in excess of the maximum rate 
permitted by law).  The Bank's "base rate" is that annual rate of interest so 
designated by the Bank and which is changed by the Bank from time to time, 
interest rate changes will be effective for interest computation purposes as 
and when the Bank's base rate changes.  Interest shall be calculated on the 
basis of a 380-day year for the actual number of days the principal is 
outstanding.  Accrued interest on this Note shall be payable on the 2ND day of 
                                                                    ---
each MONTH commencing JULY 2, 1997, until the Maturity Date when all amounts 
     -----            ------------
outstanding under this Note shall be due and payable in full.  In the frequency 
of interest payments is not otherwise specified, accrued interest on this Note 
shall be payable monthly on the first day of each month.  If any payment of 
principal or interest under this Note shall be payable on a day other than a 
day on which the Bank is open for business, this payment shall be extended to 
the next succeeding business day and interest shall be payable at the rate 
specified in the Note during this extension.  A late payment charge equal to 5% 
of each late payment may be charged on any payment not received by the Bank 
within 10 calendar days after the payment due date, but acceptance of payment of
this charge shall not waive any Default under this Note.

The principal amount payable under this Note shall be the sum of all advances 
made by the Bank to or at the request of the undersigned, less principal 
payments actually received in cash by the Bank.  The books and records of the 
Bank shall be the best evidence of the principal amount and the unpaid interest 
amount owing at any time under this Note and shall be conclusive absent manifest
error.  No interest shall accrue under this Note until the date of the first 
advance made by the Bank; after that interest on all advances shall accrue and 
be computed on the principal balance outstanding from time to time under this 
Note until the same is paid in full.

This Note and any other indebtedness and liabilities of any kind of the 
undersigned (of any of them) to the Bank, and any and all modifications, 
renewals or extensions of it, whether joint or several, contingent or absolute, 
now existing or later arising, and however evidenced (collectively 
"indebtedness") are secured by the Bank is granted a security interest in all 
items deposited in any account of any of the undersigned with the Bank and by 
all proceeds of these items (cash or otherwise), all account balances of any of 
the undersigned from time to time with the Bank, by all property of any of the 
undersigned from time to time in the possession of the Bank and by any other 
collateral, rights and properties described in each and every deed of trust, 
mortgage, security agreement, pledge, assignment and other security or 
collateral agreement which has been, or will at any time(s) later be, executed
by any (or all) of the undersigned to or for the benefit of the Bank
(collectively "Collateral"). Notwithstanding the above, (i) to the extent that
any portion of the indebtedness is a consumer loan, that portion shall not be
secured by any deed of trust or mortgage on or other security interest in any of
the undersigned's principal dwelling or any of the undersigned's real property
which is not a purchase money security interest as to that portion, unless
expressly provided to the contrary in another place, or (ii) if the undersigned
(or any of them) has(have) given or give(s) Bank a deed of trust or mortgage
covering real property, that deed of trust or mortgage shall not secure this
Note or any other indebtedness of the undersigned (or any of them), unless
expressly provided to the contrary in another place.

If the undersigned (or any of them) or any guarantor under a guaranty of all or 
part of the indebtedness ("guarantor") (i) fail(s) to pay any of the 
indebtedness when due, by maturity, acceleration or otherwise, or fail(s) to pay
indebtedness owing on a demand basis upon demand; or (ii) fail(s) to comply with
any of the terms or provisions of any agreement between the undersigned (or any 
of them) or any such guarantor and the Bank; or (iii) become(s) insolvent or the
subject of a voluntary or involuntary proceeding in bankruptcy, or a 
reorganization, arrangement or creditor composition proceeding, (if a business 
entity) cease(s) doing business as a going concern, (if a natural person) die(s)
or become(s) incompetent, (if a partnership) dissolve(s) or any general partner 
of it dies, becomes incompetent or becomes the subject of a bankruptcy 
proceeding or (if a corporation of a limited liability company) is the subject 
of a dissolution, merger or consolidation; or (a) if any warranty or 
representation made by any of the undersigned or any guarantor in connection 
with this Note or any of the indebtedness shall be discovered to be untrue or 
incomplete; or (b) if there is any termination, notice of termination, or breach
of any guaranty, pledge, collateral assignment or subordination agreement
relating to all or any part of the indebtedness; or (c) if there is any failure
by any of the undersigned or any guarantor to pay when due any of its
indebtedness (other than to the Bank) or in the observance or performance of any
term, convenant or condition in any document evidencing, securing or relating to
such indebtedness; or (d) if the Bank deems itself insecure believing that the
prospect of payment of this Note or any of the indebtedness is impaired or shall
fear deterioration, removal or waste of any of the Collateral; or (e) if there
is filed or issued a levy or writ of attachment or garnishment or other like
judicial process upon the undersigned (or any of them) or any guarantor or any
of the Collateral, including without limit, any accounts of the undersigned (or
any of them) or any guarantor with the Bank, then the Bank, upon the occurrence
of any of these events (each a "Default"), may at its option and without prior
notice to the undersigned (or any of them), declare any or all of the
indebtedness to be immediately due and payable (notwithstanding any provisions
contained in the evidence of it to the contrary), sell or liquidate all or any
portion of the Collateral, set off against the indebtedness any amounts owing by
the Bank to the undersigned (or any of them), charge interest at the default
rate provided in the document evidencing the relevant indebtedness and exercise
any one or more of the rights and remedies granted to the Bank by any agreement
with the undersigned (or any of them) or given to it under applicable law. In
addition, if this Note is secured by a deed of trust or mortgage covering real
property, then the trustor or mortgagor shall not mortgage or pledge the
mortgaged premises as security for any other indebtedness or obligations. This
Note, together with all other indebtedness secured by said deed of trust or
mortgage, shall become due and payable immediately, without notice, at the
option of the Bank, (a) if said trustor or mortgagor shall mortgage or pledge
the mortgaged premises for any other indebtedness or obligations or shall
convey, assign or transfer the mortgaged premises by deed, installment sale
contract instrument, or (b) if the title to the mortgaged premises, shall become
vested in any other person or party in any manner whatsoever, or (c) if there is
any disposition (through one or more transactions) of legal or beneficial title
to a controlling interest of said trustor or mortgagor. All payments under this
Note shall be in immediately available United States funds, without setoff or
counterclaim.

If this Note is signed by two or more parties (whether by all as makers or by
one or more as an accommodation party or otherwise), the obligations and
undertakings under this Note shall be that of all and any two or more jointly
and also of each severally. This Notes shall bind the undersigned, and the
undersigned's respective heirs, personal representatives, successors and
assigns.

The undersigned waives(s) presentment, demand, protest, notice of dishonor, 
notice of demand or intent to demand, notice of acceleration or intent to 
accelerate, and all other notices and agree(s) that no extension or indulgence 
to the undersigned (or any of them) or release, substitution or nonenforcement 
of any security, or release or substitution of any of the undersigned, any 
guarantor or any other party, whether with or without notice, shall affect the 
obligations of any of the undersigned.  The undersigned waives(s) all defenses 
or right to discharge available under Section 3-605 or the California Uniform 
Commerical Code and waive(s) all other suretyship defenses or right to 
discharge.  The undersigned agree(s) that the Bank has the right to sell, 
assign, or grant participations, or any interest, in any or all of the 
indebtedness, and that, in connection with this right, but without limiting its 
ability to make other disclosures to the full extent allowable, the Bank may 
disclose all documents and information which the Bank now or later has relating 
to the undersigned or the indebtedness.  The undersigned agree(s) that the Bank 
may provide information relating to the Note or to the undersigned to the Bank's
parent, affiliates, subsidiaries and service providers.
<PAGE>
 
The undersigned agree(s) to reimburse the holder or owner of this Note for any 
and all costs and expenses (including without limit, court costs, legal expenses
and reasonable attorney fees, whether inside or outside counsel is used, whether
or not suit is instituted and, if suit is instituted, whether at the trial court
level, appellate level, in a bankruptcy, probate or administrative proceeding or
otherwise) incurred in collecting or attempting to collect this Note or 
incurred in any other matter or proceeding relating to this Note.

The undersigned acknowledge(s) and agree(s) that there are no contrary 
agreements, oral or written, establishing a term of this Note and agree(s) that 
the terms and conditions of this Note may not be amended, waived or modified 
except in a writing signed by an officer of the Bank expressly stating that the 
writing constitutes an amendment, waiver or modification of the terms of this 
Note.  As used in this Note, the word "undersigned" means, individually and 
collectively, each maker, accommodation party, indorser and other party signing 
this Note in a similar capacity.  If any provision of this Note is unenforceable
in whole or part for any reason, the remaining provisions shall continue to be 
effective.  THIS NOTE IS MADE IN THE STATE OF CALIFORNIA AND SHALL BE GOVERNED 
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
CALIFORNIA, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.

THE MAXIMUM INTEREST RATE SHALL NOT EXCEED THE HIGHEST APPLICABLE USURY CEILING.

THE UNDERSIGNED AND THE BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A 
CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED, EACH PARTY, AFTER CONSULTING (OR 
HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE, KNOWINGLY 
AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT, WAIVES ANY RIGHT TO TRIAL BY 
JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR 
IN ANY WAY RELATED TO, THIS NOTE OR THE INDEBTEDNESS.

*SEE ATTACHED ADDENDUM FOR INTEREST RATE OPTION.  SEE LOAN AGREEMENT DATED 
____________.

               For Corporations, Partnerships, Trust or Estates

<TABLE> 
<S>                                          <C>                                          <C> 
TAITRON COMPONENTS INCORPORATED              By: /s/ Illegible                            Its: President & CEO
-------------------------------                 -------------------------------               -------------------------------  
OBLIGOR NAME TYPED/PRINTED                   SIGNATURE OF                                  TITLE

25202 ANZA DRIVE                             By:                                          Its:                
-------------------------------                 -------------------------------               -------------------------------  
STREET ADDRESS                               SIGNATURE OF                                  TITLE

SANTA CLARITA                                By:                                          Its:                
-------------------------------                 -------------------------------               -------------------------------  
CITY                                         SIGNATURE OF                                  TITLE

CA                     91355                 By:                                          Its:                
-------------------------------                 -------------------------------               -------------------------------  
STATE               ZIP CODE                 SIGNATURE OF                                  TITLE
</TABLE> 

                    For Individuals or Sole Proprietorships

<TABLE> 
<CAPTION> 
                                             Name(s) of Obligor(s)(Type or Print)         Signature(s) of Obligor(s)
<S>                                          <C>                                          <C> 
                                                                                                                
                                             ----------------------------------           -----------------------------------  


-------------------------------              ----------------------------------           -----------------------------------  
STREET ADDRESS

-------------------------------              ----------------------------------           -----------------------------------  
CITY

-------------------------------              ----------------------------------           -----------------------------------  
STATE               ZIP CODE
</TABLE> 

--------------------------------------------------------------------------------
           For Bank Use Only                       CCAR #
--------------------------------------------------------------------------------
Loan Officer Initials   Loan Group Name   Obligor(s) Name
 JASON BROWN             VALLEY            TAITRON COMPONENTS INCORPORATED
--------------------------------------------------------------------------------
Loan Officer I.D. No.   Loan Group No.    Obligor #  Note #   Amount
 48226                   96550                                  $16,000,000.00
--------------------------------------------------------------------------------

<PAGE>
 
                                                                   EXHIBIT 10.13

                       Addendum To Master Revolving Note
                       ---------------------------------

     This Addendum to Master Revolving Note (this "Addendum") is entered into as
of this 6th day of May, 1997, by and between Comerica Bank-California ("Bank") 
and TAITRON COMPONENTS INCORPORATED ("Borrower").  This Addendum supplements the
terms of the Master Revolving Note of even date herewith.

          1.   Definitions.
               -----------

               a.   Advance.  As used herein, "Advance" means a borrowing 
                    -------                    -------
requested by Borrower and made by Bank under the Note, including a LIBOR Option 
Advance and/or a Base Rate Option Advance.

               b.   Business Day.  As used herein, "Business Day" means any day 
                    ------------                    ------------
except a Saturday, Sunday or any other day designated as a holiday under Federal
or California statute or regulation.

               c.   LIBOR.  As used herein, "LIBOR" means the rate per annum 
                    -----                    -----
(rounded upward if necessary, to the nearest whole 1/8 of 1%) and determined 
pursuant to the following formula:

     LIBOR =          Base LIBOR
             -------------------------------
             100% - LIBOR Reserve Percentage

                    (1)  "Base LIBOR" means the rate per annum determined by 
Bank at which deposits for the relevant LIBOR Period would be offered to Bank in
the approximate amount of the relevant LIBOR Option Advance in the inter-bank 
LIBOR market selected by Bank, upon request of Bank at 10:00 a.m. California 
time, on the date that is the first day of such LIBOR Period.

                    (2)  "LIBOR Reserve Percentage" means the reserve percentage
prescribed by the Board of Governors of the Federal Reserve System (or any 
successor) for "Eurocurrency Liabilities" (as defined in Regulation D of the 
Federal Reserve Board, as amended), adjusted by Bank for expected changes in 
such reserve percentage during the applicable LIBOR Period.

               d.   LIBOR Business Day.  As used herein, "LIBOR Business Day" 
                    ------------------
means a Business day on which dealings in Dollar deposits may be carried out in 
the interbank LIBOR market.

                                       1

<PAGE>

               e.   LIBOR Period.  As used herein, "LIBOR Period" means, with 
                    ------------                    ------------
respect to a LIBOR Option Advance:

                    (1)  initially, the period commencing on, as the case may 
be, the date the Advance is made or the date on which the Advance is converted 
to a LIBOR Option Advance, and continuing for, in every case, a thirty (30), 
sixty (60), ninety (90) days thereafter so long as the LIBOR Option is quoted 
for such period in the applicable interbank LIBOR market, as such period is 
selected by Borrower in the notice of Advance as provided in the Note or in the 
notice of conversion as provided in this Addendum; and

                    (2)  thereafter, each period commencing on the last day of 
the next preceding LIBOR Period applicable to such LIBOR Option Advance and 
continuing for, in every case, a thirty (30), sixty (60), ninety (90) days 
thereafter so long as the LIBOR Option is quoted for such period in the 
applicable interbank LIBOR market, as such period is selected by Borrower in the
notice of continuation as provided in this Addendum.

               f.   Note.  As used herein, "Note" means the Master Revolving 
                    ----                    ----
Note of even date herewith.

               g.   Regulation D.  As used herein, "Regulation D" means 
                    ------------                    ------------
Regulation D of the Board of Governors of the Federal Reserve System as amended 
or supplemented from time to time.

               h.   Regulatory Development.  As used herein, "Regulatory 
                    ----------------------                    ----------
Development" means any or all of the following: (i) any change in any law, 
-----------
regulation or interpretation thereof by any public authority (whether or not 
having the force of law); (ii) the application of any existing law, regulation 
or the interpretation thereof by any public authority (whether or not having the
force of law); and (iii) compliance by Bank with any request or directive 
(whether or not having the force of law) of any public authority.

          2.   Interest Rate Options.  Borrower shall have the following options
               ---------------------
regarding the interest rate to be paid by Borrower on Advances under the Note:

               a.   A rate equal to One and One Thirty fifth percent (1.35%) 
                                    ------------------------          ----
                    above Bank's LIBOR, (the "LIBOR Option"), which LIBOR Option
                    shall be in effect during the relevent LIBOR Period; or

               b.   A rate equal to Zero percent (0.00%) above the "Base Rate" 
                                    ----          ----
                    as referenced in the Note and quoted from time to time by
                    Bank as such rate may change from time to time (the "Base
                    Rate Option").

                                       2
<PAGE>
 
          3.     LIBOR Option Advance. The minimum LIBOR Option Advance will not
                 --------------------
be less than Five Hundred Thousand and No/100 Dollars ($500,000.00) for any 
LIBOR Option Advance.

          4.     Payment of Interest of LIBOR Option Advances. Interest on each 
                 --------------------------------------------
LIBOR Option Advance shall be payable on the last day of the LIBOR Period 
applicable thereto. Interest on such LIBOR Option Advance shall be computed on 
the basis of a 360-day year and shall be assessed for the actual number of days 
elapsed from the first day of the LIBOR Period applicable thereto but not 
including the last day thereof.

          5.     Bank's Records Re: LIBOR Option Advances. With respect to each 
                 ----------------------------------------
LIBOR Option Advance, Bank is hereby authorized to note the date, principal
amount, interest rate and LIBOR Period applicable thereto and any payments made
thereon on Bank's books and records (either manually or by electronic entry)
and/or on any schedule attached to the Note, which notations shall be prima
facie evidence of the accuracy of the information noted.

          6.     Selection/Conversion of Interest Rate Options. At the time any 
                 ---------------------------------------------
Advance is requested under the Note and/or Borrower wishes to select the LIBOR
Option for all or a portion of the outstanding principal balance of the Note,
and at the end of each LIBOR Period, Borrower shall give Bank notice specifying
(a) the interest rate option selected by Borrower; (b) the principal amount
subject thereto; and (c) if the LIBOR Option is selected, the length of the
applicable LIBOR Period. Any such notice may be given by telephone so long as,
with respect to each LIBOR Option selected by Borrower, (i) Bank receives
written confirmation from Borrower not later than three (3) LIBOR Business Days
after such telephone notice is given; and (ii) such notice is given to Bank
prior to 10:00 a.m., California time, on the first day of the LIBOR Period. For
each LIBOR Option requested hereunder, Bank will quote the applicable fixed
LIBOR Rate to Borrower at approximately 10:00 a.m., California time, on the
first day of the LIBOR Period. If Borrower does not immediately accept the rate
quoted by Bank, any subsequent acceptance by Borrower shall be subject to a
redetermination of the rate by Bank; provided, however, that if Borrower fails
to accept any such quotation is given, then the quoted rate shall expire and
Bank shall have no obligation to permit a LIBOR Option to be selected on such
day. If no specific designation of interest is made at the time any Advance is
requested under the Note or at the end of any LIBOR Period, Borrower shall be
deemed to have selected the Base Rate Option for such Advance or the principal
amount to which such LIBOR Period applied. At any time the LIBOR Option is in
effect, Borrower may, at the end of the applicable LIBOR Period, convert to the
Base Rate Option. At any time the Base Rate Option is in effect, Borrower may
convert to the LIBOR OPTION, and shall designate a LIBOR Period.

          7.      Default Interest Rate. From and after the maturity date of the
                  ---------------------
Note, or such earlier date as all principal owing hereunder becomes due and 
payable by acceleration or otherwise, the outstanding principal balance of the 
Note shall bear interest until paid in full at an increased rate per annum 
(computed on the basis of a 360-day year, actual days elapsed) equal to three 
percent (3.00%) above the rate of interest from time to time applicable to the 
Note.

                                       3

<PAGE>
 
               8.    Prepayment.  Bank is not under any obligation to accept any
                     ----------
prepayment of any LIBOR Option Advance except as described below or as required
under applicable law. Borrower any prepay a Base Rate Option Advance at any
time, without paying any Prepayment Amount, as defined below. Borrower may
prepay an LIBOR Option Advance in increments of Five Hundred Dollars ($500.00)
prior to the end of the LIBOR Period, as long as (i) Bank is provided written
notice of such prepayment at least five (5) LIBOR Business Days prior to the
date thereof (the "Prepayment Date"); and (ii) Borrower pays the Prepayment
Amount. The notice of prepayment shall contain the following information: 
(a) the Prepayment Date; and (b) the LIBOR Option Advance which will be prepaid.
On the Prepayment Date, Borrower shall pay to Bank, in addition to any other
amount that may then be due on the Note, the Prepayment Amount. Bank, in its
sole discretion, may accept any prepayment of a LIBOR Option Advance even if not
required to do so under the Note and may deduct from the amount to be applied
against the LIBOR Option Advance any other amounts required to be paid as part
of the Prepayment Amount.

       The Prepaid Principal amount (as defined below) will be applied to the 
LIBOR Option Advance being prepaid as Bank shall determine in its sole 
discretion.

       If Bank exercises its right to accelerate the payment of the Note prior 
to maturity based upon an Event of Default under the Note, Borrower shall pay to
Bank, in addition to any other amounts, that may then be due on the Note, on the
date specified by Bank as the Prepayment Date, the Prepayment Amount.

       Bank's determination of the Prepayment Amount shall be conclusive in the 
absence of obvious error or fraud.  If requested in writing by Borrower, Bank 
shall provide Borrower a written statement specifying the Prepayment Amount.

       The following (the "Prepayment Amount") shall be due and payable in full 
on the Prepayment Date.

               a.    If the principal amount of the LIBOR Option Advance being
                     prepaid exceeds Seven Hundred Fifty Thousand Dollars
                     ($750,000), then the Prepayment Amount is the sum of: 
                     (i) the amount of the principal balance of the LIBOR Option
                     Advance which Borrower has elected to prepay or the amount
                     of the principal balance of the LIBOR Option Advance which
                     Bank has required Borrower to prepay because of
                     acceleration, as the case may be (the "Prepaid Principal
                     Amount"; (ii) interest accruing on the Prepaid Principal
                     Amount up to, but not including, the Prepayment Date;  
                     (iii) Five Hundred Dollars ($500.00); plus (iv) the present
                     value, discounted at the Reinvestment Rates (as defined
                     below) of the positive amount by which (A) the interest
                     Bank would have earned had the Prepaid Principal Amount not
                     been paid prior to the end of the LIBOR Period at the
                     Note's interest rate exceeds (B) the interest Bank would
                     earn by reinvesting the Prepaid Principal Amount at the
                     Reinvestment Rates.

                                       4

<PAGE>
 
          b.    If the principal amount of the LIBOR Option Advance being
                prepaid is Seven Hundred Fifty Thousand Dollars ($750,000) or
                less, then the Prepayment Amount is the sum of: (i) the amount
                of the LIBOR Option Advance which Borrower has elected to prepay
                or the principal amount of the LIBOR Option Advance which Bank
                has required Borrower to prepay because of acceleration due to
                an Event of Default under the Note, as the case may be (the
                "Prepaid Principal Amount"); (ii) interest accruing on the
                Prepaid Principal Amount up to, but not including, the
                Prepayment Date; plus (iii) an amount equal to two percent (2%)
                of the Prepaid Principal Amount.

     "Reinvestment Rates" mean the per annum rates of interest equal to one
half percent (1/2%) above the rates of interest reasonably determined by Bank to
be in effect not more than seven (7) days prior to the Prepayment Date in the
secondary market for United States Treasury Obligations in amount(s) and with
maturity(ies) which correspond (as closely as possible) to the LIBOR Option
Advance being prepaid.

     BY INITIALING BELOW, BORROWER ACKNOWLEDGE(S) AND AGREE(S) THAT: (A) THERE
IS NO RIGHT TO PREPAY ANY LIBOR OPTION ADVANCE, IN WHOLE OR IN PART, WITHOUT
PAYING THE PREPAYMENT AMOUNT, EXCEPT AS OTHERWISE REQUIRED UNDER APPLICABLE LAW;
(B) BORROWER SHALL BE LIABLE FOR PAYMENT OF THE PREPAYMENT AMOUNT IF BANK
EXERCISES ITS RIGHT TO ACCELERATE PAYMENT OF ANY LIBOR OPTION ADVANCE AS PART OR
ALL OF THE OBLIGATIONS OWING UNDER THE NOTE, INCLUDING WITHOUT LIMITATION,
ACCELERATION UNDER A DUE-ON-SALE PROVISION; (C) BORROWER WAIVES ANY RIGHTS UNDER
SUCCESSOR STATUTE; AND (D) BANK HAD MADE EACH LIBOR OPTION ADVANCE PURSUANT TO
THE NOTE IN RELIANCE ON THESE AGREEMENTS.

illegible
---------------------
BORROWER'S INITIALS

          9. Hold Harmless and Indemnification. Borrower agrees to indemnify
             ---------------------------------
Bank and to hold Bank harmless from, and to reimburse Bank on demand for, all
losses and expenses which Bank sustains or incurs as a result of (i) any payment
of a LIBOR Option Advance prior to the last day of the applicable LIBOR Period
for any reason, including, without limitation, termination of the Note, whether
pursuant to this Addendum or the occurrence of an Event of Default; (ii) any
termination of a LIBOR Period prior to the date it would otherwise end in
accordance with this Addendum; or (iii) any failure by Borrower, for any reason,
to borrow any portion of a LIBOR Option Advance.

                                       5
 
<PAGE>
 
            10.   Funding Losses. The indemnification and hold harmless 
                  --------------
provisions set forth in this Addendum shall include, without limitation, all
losses and expenses arising from interest and fees that Bank pays to lenders of
funds it obtains in order to fund the loans to Borrower on the basis of the
LIBOR Option(s) and all losses incurred in liquidating or re-deploying deposits
from which such funds were obtained and loss of profit for the period after
termination. A written statement by Bank to Borrower of such losses and expenses
shall be conclusive and binding, absent manifest error, for all purposes. This 
obligation shall survive the termination of this Addendum and the payment of the
Note.

            11.   Regulatory Developments Or Other Circumstances Relating To 
                ----------------------------------------------------------
Illegality or Impracticality of LIBOR. If any Regulatory Development or other 
-------------------------------------
circumstances relating to the interbank Euro-dollar markets shall, at any time, 
in Bank's reasonable determination, make it unlawful or impractical for Bank to 
fund or maintain, during any LIBOR Period, to determine or charge interest rates
based upon LIBOR, Bank shall give notice of such circumstances to Borrower and:

     (i)    In the case of a LIBOR Period in progress, Borrower shall, if
            requested by Bank, promptly pay any interest which had accrued prior
            to such request and the date of such request shall be deemed to be
            the last day of the term of the LIBOR Period; and

     (ii)   No LIBOR Period may be designated thereafter until Bank determines 
            that such would be practical.

            12. Additional Costs. Borrower shall pay to Bank from time to time,
                ----------------
upon Bank's request, such amounts as Bank determines are needed to compensate
Bank for any costs it incurred which are attributable to Bank having made or
maintained a LIBOR Option Advance or to Bank's obligation to make a LIBOR Option
Advance, or any reduction in any amount receivable by Bank hereunder with
respect to any LIBOR Option or such obligation (such increases in costs and
reductions in amounts receivable being herein called "Additional Costs"),
                                                      ----------------
resulting from any Regulatory Developments, which (i) change the basis of
taxation of any amounts payable to Bank hereunder with respect to taxation of
any amounts payable to Bank hereunder with respect to any LIBOR Option Advance
(other than taxes imposed on the overall net income of Bank for any LIBOR Option
Advance by the jurisdiction where Bank is headquartered or the jurisdiction
where Bank extends the LIBOR Option Advance; (ii) impose or modify any reserve,
special deposit, or similar requirements relating to any extensions of credit or
other assets of, or any deposits with or other liabilities of, Bank (including
any LIBOR Option Advance or any deposits referred to in the definition of
LIBOR); or (iii) impose any other condition affecting this Addendum (or any of
such extension of credit or liabilities). Bank shall notify Borrower of any
event occurring after the date hereof which entitles Bank to compensation
pursuant to this paragraph as promptly as practicable after it obtains knowledge
thereof and determines to request such compensation. Determinations by Bank for
purposes of this paragraph, shall be conclusive, provided that such
determinations are made on a reasonable basis.

                                       6
<PAGE>
 
          13.   Legal Effect. Except as specifically modified hereby, all of 
                ------------
the terms and conditions of the Note remain in full force and effect.

     IN WITNESS WHEREOF, the parties have agreed to the foregoing as of the date
first set forth above.


TAITRON COMPONENTS INCORPORATED             COMERICA BANK-CALIFORNIA
-------------------------------
Borrower

By: /s/ illegible                           By: /s/ Jason Brown    
    ---------------------------                 ---------------------------
                                                    Jason Brown
Title: ------------------------                     Corporate Banking Officer


By: 
    ---------------------------
                              
Title: ------------------------

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