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                                                                    EXHIBIT 10.E


                             REVOLVING CREDIT NOTE # 2

Amount of Note:         $15,000,000.00

Date of Note:           As of May 12, 1997

Borrower:               NAPCO Security Systems, Inc., the undersigned borrower,
                        having its principal office at the place indicated
                        beneath its name, and including its successors and/or
                        assigns.

Default Rate:           All overdue amounts shall bear interest, payable on
                        demand, at a rate per annum equal to the Interest Rate,
                        then in effect, plus three (3.0%) percent per annum.

Interest Rate:          Interest is to be computed from the date hereof at a
                        rate per annum equal to either (a) the Variable Rate
                        Option, or (b) the Libor Rate Option for the Interest
                        Period selected by the Borrower. In all instances,
                        interest shall be payable in arrears and computed on an
                        actual/360-day basis (i.e., interest for each day during
                        which the indebtedness evidenced by this Note, or any
                        portion thereof, is outstanding), all as more
                        specifically described in the Loan Agreement,
                        incorporated herein by this reference.

Interest Period:        Interest Period, as the term "Interest Period" is
                        defined in the Loan Agreement.

Lender:                 Marine Midland Bank, including its successors and/or
                        assigns, with a place of business at 534 Broad Hollow
                        Road, Melville, New York 11747.

Libor Rate Option:      Libor Rate Option, as the term "Libor Rate Option" is
                        defined in the Loan Agreement.

Loan  Agreement:        The Loan and Security Agreement dated as of even date
                        hereof, including all exhibits hereto, by and between
                        the Borrower and the Lender, as the same may be amended
                        or otherwise modified from time to time.

Prime Rate:             Prime Rate, as the term "Prime Rate" is defined in the
                        Loan Agreement.

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Note or Revolving
Credit Note or
Revolving Credit
Note # 2                This Revolving Credit Note # 2, including all exhibits
                        thereto, as the same may be amended or otherwise
                        modified from time to time; the terms "herein",
                        "hereunder" and like terms shall be taken in its
                        entirety and shall not be limited to any particular
                        paragraph or provision hereof.

Termination
Date:                   Termination Date, as the term "Termination Date is
                        defined in the Loan Agreement.

Transaction
Documents:              Transaction Documents, as the term "Transaction
                        Documents" is defined in the Loan Agreement.

Variable Rate
Option:                 Variable Rate Option, as the term "Variable Rate Option"
                        is defined in the Loan Agreement.


      FOR VALUE RECEIVED, the Borrower does hereby covenant and promise to pay
to the order of the Lender at its office at 534 Broad Hollow Road; Melville, New
York 11747 or at such other place or places as the Lender may designate to the
Borrower in writing from time to time, in check, coin or currency of the United
States which is then legal tender for the payment of public or private debts, in
immediately available funds, the lesser of (a) the principal amount of Fifteen
Million ($15,000,000.00) Dollars; or (b) the aggregate unpaid principal amount
of all loans (or Advances) made by the Lender to the Borrower from time to time
hereunder (collectively the "Loans", or if used in the singular, the "Loan").

       The Borrower agrees that each monthly or other statement of account
mailed or delivered by the Lender to the Borrower pertaining to the outstanding
balance of the Loans, the amount of interest due thereon, fees, and costs and
expenses shall be final, conclusive, and binding on the Borrower and shall
constitute an "account stated" with respect to the matters contained therein
unless, within thirty (30) calendar days from when such statement is mailed or,
if not mailed, delivered to the Borrower, the Borrower shall deliver to the
Lender written notice of any objections which it may have as to such statement
of account, and in such event, only the items to which objection is expressly
made in such notice shall be considered to be disputed by the Borrower.
No legal proceedings or actions shall be brought by the Borrower against the
Lender claiming any such error unless (a) the Borrower


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shall have given the written notice as provided hereinabove, and (b) such legal
proceeding or action shall be commenced within one (1) year of the date when
such statement of account, notice or advice was delivered or mailed to the
Borrower.

      The Borrower also shall pay, in lawful money of the United States, and in
immediately available funds, interest to the Lender on the unpaid principal
balance of all Loans outstanding from time to time from the date hereof until
fully paid at a rate per annum equal to at the election of Borrower the Libor
Rate Option or the Variable Rate Option, subject to the provisions contained in
the Loan Agreement and all as more specifically described in the Loan Agreement.
All payments shall be credited, when collected, first to interest and then to
principal.

      Interest Rate and Interest Period selection shall be governed by the
provisions contained in the Loan Agreement. All written notices of Interest Rate
and/or Interest Period selection shall be in the form annexed hereto as Exhibit
A, attached hereto and incorporated herein by this reference.

      A late payment premium equal to five (5%) percent of any principal or
interest payment made more than ten (10) days after the due date thereof shall
be due with any such late payment (other than the final payment due on the
Maturity Date).

      This Note is executed and delivered pursuant to the Loan Agreement, all of
the covenants, conditions and agreements of the Loan Agreement being made a part
hereof by this reference. This Note also is secured by the Collateral of the
Borrower described in the Loan Agreement, and the pledged collateral described
in certain pledge agreements dated of even date hereof, and the collateral of
the domestic Consolidated Subsidiaries described in the general security
agreements executed and delivered to the Lender by each of the domestic
Consolidated Subsidiaries on even date hereof, and the Lender is entitled to the
benefits of all of the collateral described therein and the collateral described
in the other Transaction Documents.

      This Revolving Credit Note is the Note # 2 referred to in the Loan
Agreement, and the Lender shall be entitled to the benefit of all of the
provisions contained therein and in the other Transaction Documents. The Loan
Agreement, among other things, contains provisions for payment of principal,
interest, fees and charges in connection with the Revolving Credit Facility as
well as provisions for acceleration of this Note upon the happening of certain
stated events. The Loan Agreement also contains representations, warranties,
covenants and conditions precedent to Advances under the Revolving Credit
Facility, all of which are hereby made part of this Revolving Credit Note to the
same extent and with the same effect as if set forth herein at length.


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It is expressly agreed that, upon the failure of the Borrower timely to make
      any payment due hereunder, or upon the happening of any "Event of Default"
      under the Loan Agreement and/or the other Transaction Documents, the
      principal sum hereof, together with accrued interest and all other
      expenses, including, but not limited to reasonable attorneys' fees for
      legal services incurred by the Lender in connection with the collection of
      this Note and/or the enforcement of payment hereof whether or not suit is
      brought, and if suit is brought, then through all appellate actions, shall
      immediately become due and payable at the option of the Lender,
      notwithstanding the Termination Date set forth herein. In the Event of
      Default, whether the Lender exercises any of its rights and remedies
      contained herein, including the right to declare all Indebtedness
      hereunder to be immediately due and payable, the Borrower shall pay
      interest on the unpaid principal balance hereunder at a rate equal to the
      Default Rate. The unpaid principal balance under the Note shall bear the
      Default Rate of Interest until the first to occur of the following: (i)
      all Indebtedness under this Note are paid in full; (ii) Borrower has cured
      said Event of Default to the satisfaction of the Lender; or (iii) the
      Lender, in writing, has waived said Event of Default. Notwithstanding
      anything to the contrary contained in this Note, the Note is subject to
      the express condition that at no time shall Borrower be obligated to be
      required to pay interest on the principal balance of this Note at a rate
      which could subject the Lender either to civil or criminal penalty as a
      result of being in excess of the maximum rate which Borrower is permitted
      by law to contract or agree to pay. If by the terms of this Note, Borrower
      at any time are required or obligated to pay interest on the principal
      balance of this Note at a rate in excess of such maximum rate then the
      rate of interest under this Note shall be deemed to be immediately reduced
      to such maximum rate and interest payable hereunder shall be computed at
      such maximum rate and any prior interest payments made in excess of such
      maximum rate shall be applied and shall be deemed to have been payments
      made in reduction of the principal balance of such note.

      The indebtedness evidenced by this Note shall be prepayable, in whole or
in part, subject to the provisions contained in the Loan Agreement.

      Should the indebtedness represented by this Note or any part thereof be
collected at law or in equity, or in bankruptcy, receivership or any other court
proceedings (whether at the trial or appellate level), or should this Note be
placed in the hands of attorneys for collection upon an Event of Default, the
Borrower agrees to pay, in addition to the principal, premium, breakage costs,
and interest due and payable hereon, all costs of collection or attempting to
collect this Note, including reasonable attorneys' fees and expenses.


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      The Borrower hereby waives valuation and appraisement, demand, presentment
for payment, notice of dishonor, protest and notice of protest of this Note.

      Any notice, demand or request relating to any matter set forth herein
shall be in writing and shall be deemed effective when mailed, postage prepaid,
by registered or certified mail, return receipt requested, to any party hereto
at its address stated herein or at such other address of which it shall have
notified the party giving such notice in writing as aforesaid.

      This Note, being drawn, executed and delivered in the State of New York,
where all advances and repayments shall be made, shall be construed and enforced
in accordance with the laws of the State of New York.

            This Note may not be changed or terminated orally, but only by an
agreement in writing signed by the party against whom enforcement of any waiver,
change, modification or discharge is sought.

      All capitalized terms used herein not specifically defined shall have the
meanings assigned to such terms in the Loan Agreement.

      THE BORROWER AND THE LENDER AGREE THAT ANY LITIGATION GROWING OUT OF ANY
CONTROVERSY WITH RESPECT TO, IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR
ANY INSTRUMENT OR DOCUMENT DELIVERED PURSUANT HERETO WILL BE TRIED BY A COURT BY
A JUDGE SITTING WITHOUT A JURY. IN ADDITION, THE BORROWER WAIVES THE RIGHT TO
INTERPOSE ANY DEFENSE BASED UPON ANY STATUTE OF LIMITATIONS OR ANY CLAIM OF
LACHES AND ANY SET-OFF OR COUNTERCLAIM EXCEPT FOR COMPULSORARY COUNTER CLAIMS OF
ANY NATURE OR DESCRIPTION, EXCEPT FOR PAYMENT, PROVIDED BORROWER MAY INSTITUTE A
SEPARATE CAUSE OF ACTION AS TO SUCH MATTERS. THE BORROWER AND THE LENDER CONFIRM
THAT THE FOREGOING WAIVERS ARE INFORMED AND FREELY MADE.


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      IN WITNESS WHEREOF, the Borrower has duly executed this Note as of the
Date of Note.

                                    NAPCO SECURITY SYSTEMS, INC.



                              BY:   /s/
                                    -----------------------------------
                                    KEVIN BUCHEL
                                    SENIOR VICE PRESIDENT



      with offices at   333 Bayview Avenue
                        Amityville, New York  11701




STATE OF NEW YORK )
                  ) SS:
COUNTY OF NASSAU  )



      On this 12th day of May, 1997, before me personally came Kevin Buchel, to
me known, who being by me duly sworn, did depose and say that he resides at 64
Crescent Court, Old Bethpage, New York 11804, that he is the Senior Vice
President of NAPCO Security Systems, Inc., the corporation described in and
which executed the foregoing instrument; that he signed his name thereto by
order of the Board of Directors of said corporation.


                                    /s/
                                    --------------------------------
                                    NOTARY PUBLIC


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                                   EXHIBIT "A"

                             REQUEST FOR ADVANCE AND
                        NOTICE OF INTEREST RATE SELECTION


TO:   MARINE MIDLAND BANK
      534 Broad Hollow Road
      Melville, New York  11747
      Attention:  John S. Wamboldt
      Fax No.:    (516) 752-4340

      This Request for Advance Notice of Interest Rate Selection is governed by
the terms of the Loan and Security Agreement dated May 12, 1997 made by and
between NAPCO Security Systems, Inc. ("Debtor") and MARINE MIDLAND BANK
("Secured Party") (the "Agreement").

      The undersigned hereby GIVES THE SECURED PARTY IRREVOCABLE NOTICE that
Debtor requests the following Interest Rate under the Agreement as follows:

      1.    Rate Option and Interest Period.  The requested Interest Rate
option and Interest Rate Period for the requested amount is ((a) or (b),
checked as applicable):

      [   ]  (a)  The Libor Rate Option for an Interest Period of (one
checked as applicable):

            [   ]  one month;
            [   ]  two months; or
            [   ]  three months; or
            [   ]  four months; or
            [   ]  six months; or
            [   ]  nine months; or
            [   ]  twelve months; or

      [   ]  (b)  The Variable Rate Option.

      2.    The Interest Rate shall be in effect for a requested Advance
equalling $______________.

Dated:  _______________, 1997


                              NAPCO Security Systems, Inc.

                        By:   ________________________________________
                              Kevin Buchel
                              Senior Vice President


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