Document:

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                                                                    EXHIBIT 10.B

                          NAPCO SECURITY SYSTEMS, INC.

                       2000 NON-EMPLOYEE STOCK OPTION PLAN
                 (Extended 1990 Non-Employee Stock Option Plan)

      1. Purpose of the Plan. This 2000 Non-Employee Stock Option Plan
(hereinafter referred to as the "Plan"), constituting a ten-year extension of
the 1990 Non-Employee Stock Option Plan, is intended to encourage ownership of
stock of Napco Security Systems, Inc. (hereinafter referred to as the
"Corporation") by non-employee directors and consultants of the Corporation and
its subsidiaries, if any, and to provide additional incentive for them to
promote the success of the business. As used in the Plan the term "subsidiary"
shall have the same meaning as the term "subsidiary corporation" defined in
Section 425(f) of the Internal Revenue Code of 1986, as amended (the "Code").
All options granted under the Plan shall be non-qualified stock options and do
not qualify as incentive stock options within the meaning of Section 422 or any
successor Section of the Code.

      2. Scope of the Plan. An aggregate of Fifty Thousand (50,000) shares
(representing Ten Thousand (10,000) shares for future options and Forty Thousand
(40,000) shares for outstanding options) of the Corporation's Common Stock, par
value $.01 per share (hereinafter referred to as "Common Stock"), shall be
available and reserved for issue under the Plan subject, however, to the
provisions of Section 12 hereof. If an option should expire or terminate for any
reason without having been exercised in full, the unpurchased shares that were
subject thereto shall, unless the Plan shall have terminated, become available
for other options under the Plan. Common Stock shall not be issued in respect of
an option granted under the Plan unless the exercise of such option and the
issuance and delivery of shares of Common Stock pursuant thereto shall comply
with all relevant provisions of law, including the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended, the rules and
regulations thereunder, and the requirements of any stock exchange upon which
the Common Stock may then be listed, and shall be further subject to the
approval of the Corporation's counsel with respect to such compliance.

      3. Administration of the Plan. The Plan shall be administered by the Board
of Directors or a Stock Option Committee (hereinafter sometimes referred to as
the "Committee") of the Board of Directors of the Corporation. Directors of the
Corporation who are either eligible for options or to whom options have been
granted may vote on any matters affecting the administration of the Plan or the
granting of options under the Plan; provided, however, that no option may be
granted to a director under the Plan except by:

      (a) The Committee at a meeting at which a majority of its members are
      disinterested persons; or

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      (b) The Board of Directors at a meeting at which the majority of directors
      present and a majority of the directors voting on a grant, are
      disinterested persons.

      For purposes of this Section 3, a "disinterested person" is a person who,
at a given meeting of the Committee or the Board of Directors, is not being
considered to receive a grant of stock options under the Plan or any other stock
option plan of the Corporation or its subsidiaries.

      Without limiting the generality of the foregoing, the Board of Directors
shall have full and final authority in its discretion, but subject to the
express provisions of the Plan, to determine the fair market value of the Common
Stock covered by each option; to select the key non-employee individuals of the
Corporation and its subsidiaries to whom, and the time or times at which,
options shall be granted; to determine the manner in which options may be
exercised; to determine the number of shares to be covered by each option and
the consideration, if any, to flow to the Corporation for each option; to
interpret the Plan; to prescribe, amend, and rescind rules and regulations
relating to the Plan; to determine the terms and provisions of each option
granted under the Plan (which need not be identical); to accelerate any exercise
date of any option; to waive restrictions imposed with respect to the
transferability of stock acquired on exercise of options granted under the Plan;
to cancel an option previously granted to an optionee and issue a new option to
such optionee at a lower price, provided that such optionee's consent is first
obtained; to authorize any person to execute on behalf of the Corporation an
option agreement with respect to an option previously granted by the Board of
Directors; and to make all other determinations deemed necessary or advisable
for the administration of the Plan.

      4. Eligibility. Options may be granted only to non-employee directors
serving on the Board of Directors of the Corporation or any subsidiary and/or
non-employee consultant serving the Corporation or any subsidiary. In selecting
the individuals to whom options shall be granted, as well as in determining the
number of shares subject to each option, the Board of Directors may take into
consideration the recommendation of the members of the Board of Directors who
are also employees of the Corporation or a subsidiary and such factors as it
shall deem relevant in connection with accomplishing the purposes of the Plan.
An individual who has been granted an option may, if he is otherwise eligible,
be granted an additional option or options.

      5. Option Price. The purchase price to be paid for Common Stock
transferred pursuant to the exercise of any option granted under the Plan shall
be not less than the fair market value of such stock on the date the option is
granted as provided in Section 14 hereof (but in no event less than the par
value of the Common Stock), and shall not thereafter be subject to reduction
except as provided in Section 12 hereof. For purposes of the Plan the fair
market value of the Common Stock on any date shall be determined by the Board of
Directors. The proceeds of sale of Common Stock subject to option are to be
added to the general funds of the Corporation and used for such corporate
purposes as the Board of Directors may determine.

      6. Term of Options. The term of each option granted under the Plan shall
be not more than five years from the date of the granting thereof, subject to
its earlier termination as hereinafter provided.

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      7. Non-Transferability of Options. An option granted under the Plan shall
by its terms not be transferable and an option may be exercised, during the
lifetime of the holder of the option, only by such holder; provided, however, an
option may be transferred, by will or the laws of descent and distribution, to
the estate of a deceased holder, and such option may be exercised by the
estate's legal representative within three (3) months of the date of death. More
particularly, but without limiting the generality of the foregoing, an option
may not be assigned, transferred, pledged, or hypothecated in any way (whether
by operation of law or otherwise), and will not be subject to execution,
attachment or similar process. Any attempted assignment, transfer, pledge,
hypothecation or other disposition of any option contrary to the provisions of
the Plan, and any levy of any attachment or similar process upon an option will
be null and void and without effect, and the Board of Directors may, in its
discretion, upon the happening of any such event, terminate an option forthwith.

      8. Annual Limitation on Options Granted. The amount of the aggregate fair
market value of stock, determined at the time of the grant of the option, for
which any non-employee director or consultant may be granted stock options under
this Plan in any calendar year shall not exceed One Hundred Thousand ($100,000)
Dollars.

      9. Exercise of Options. Except as hereinafter provided in this Section 9
and in Sections 3 and 11, options may be exercised within the year of grant (as
the Board of Directors, in its discretion, shall determine) with respect to no
more than twenty percent (20%) of the total number of shares of Common Stock
subject to such grant. Thereafter, during each succeeding year beginning on an
anniversary date, options with respect to an additional twenty percent (20%) of
the total number of shares subject to a grant may be exercised. However, no
option shall be exercisable after the expiration of the term thereof as provided
in Section 6. Moreover, except as provided herein, an option shall not be
exercisable unless the holder thereof shall, at the time of exercise, be a
non-employee director or consultant of the Corporation or a subsidiary.

      Notwithstanding anything herein to the contrary, such holder's options
will vest and become immediately exercisable in full for a period of three (3)
months following a change in control. For purposes of this Plan, a "change in
control" shall mean:

            (i) either (x) any merger or consolidation of the Company into or
      with another corporation, or (y) the acquisition by another person, group
      or entity after the date hereof of beneficial ownership of more than 25%
      of the Common Stock of the Company (such person, group or entity
      reporting, or being required to report, the acquisition pursuant to
      Section 13 of the Securities Exchange Act of 1934 of all the voting and
      investment powers of such stock), or

            (ii) any sale by the Company of substantially all of the assets and
      business of Company for cash, stock, or any combination thereof, unless,
      immediately after such sale, the holders of Common Stock of the Company
      immediately prior to such sale own more than 50% or more of the voting
      capital stock of the acquiring corporation or, if the acquiring person or
      entity is not a corporation, more than 50% of the voting equity interests
      of such acquiring person or entity, or

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            (iii) if a majority of Company's Board of Directors consists of
      individuals who were not Incumbent Directors. "Incumbent Directors" shall
      mean directors who either (A) are directors of the Company as of the date
      hereof, or (B) are elected, or nominated for election, to the Board with
      the affirmative votes of at least a majority of the Incumbent Directors at
      the time of such election or nomination (but shall not include an
      individual whose election or nomination is in connection with an actual or
      threatened proxy contest relating to the election of directors to the
      Company).

      The purchase price of any shares as to which an option shall be exercised
shall be paid in full at the time of exercise. The holder of an option shall not
have any of the rights of a stockholder with respect to the shares covered by
his option until such shares shall have been issued to him (as evidenced by the
appropriate entry on the books of a duly authorized transfer agent of the
Corporation) upon the purchase of such shares upon exercise of the option.

      10. Consideration. The Board of Directors shall determine the nature of
the consideration flowing to the Corporation in respect of each option granted
under the Plan as well as the conditions, if any, which it may deem appropriate
to assure that such consideration shall be received by, or shall accrue to, the
Corporation. The consideration specified in any option may be different from the
consideration specified in any other option, whether granted at the same or a
different time.

      11. Exercise Upon Cessation of Relationship With Corporation. Except as
provided in Sections 7 and 9 above, the right of a holder of an option to
exercise such option shall terminate immediately upon voluntary termination of
service as a non-employee director or consultant or dismissal, disability,
retirement, death or otherwise. Option agreements may contain such provisions as
the Board of Directors shall approve with reference to the effect of approved
leaves of absence, provided, however, that all options shall terminate not more
than five years after the date of grant.

      12. Adjustments. Options granted under the Plan shall contain such uniform
provisions as the Board of Directors shall, in its sole judgment, determine for
adjustment of the number and class of shares covered thereby, or of the option
prices (but not below the par value of the Common Stock), or both, to reflect a
stock dividend, stock split-up, share combination, exchange of shares,
recapitalization, merger, consolidation, acquisition or disposition of property
or shares, reorganization, liquidation, or other similar changes or
transactions, of or by the Corporation. In any such event the aggregate number
and class of shares available for issuance under the Plan shall be appropriately
adjusted and all the provisions of the Plan with respect to the number and class
of shares so available shall likewise be adjusted.

      13. Effectiveness of the Plan. The Plan shall become effective on October
15, 2000, but shall be subject to approval by the holders of Common Stock at a
meeting of stockholders of the Corporation duly called and held no later than
twelve months after the date of adoption of the Plan by the Board of Directors.

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      14. Time of Granting Options. The date of grant of an option under the
Plan shall, for all purposes, be the date on which the Board of Directors makes
the determination granting such option; and no grant shall be deemed effective
under the Plan prior to such date. Notice of the determination shall be given to
each employee to whom an option is so granted within a reasonable time after the
date of such grant.

      15. Termination and Amendment of the Plan. The Plan shall terminate ten
(10) years from the date on which it is adopted by the Board of Directors or the
date on which it is approved by the stockholders, whichever is earlier. Prior
thereto, the Board of Directors may terminate the Plan at any time; provided,
however, that any such termination shall not affect any options then outstanding
under the Plan. No options under the Plan may be granted after termination of
the Plan.

      The Board of Directors from time to time may make such modifications or
amendments of the Plan and, with the consent of the holder of an option, of the
terms and conditions of his option, as it shall deem advisable, but may not,
without further approval of the stockholders of the Corporation, except as
provided in Section 12 hereof (a) increase the maximum number of shares which
shall be available and reserved for issue under the Plan, or (b) change the
individuals or class of individuals eligible to receive options, or (c) extend
the term of the Plan beyond the period provided in this paragraph.

      Neither the termination nor any modification or amendment of the Plan
shall, without the consent of the holder of an option theretofore granted under
the Plan, adversely affect the rights of such holder with respect to such
option.

      16. Termination of Right of Action. Every right of action arising out of
or in connection with the Plan by or on behalf of the Corporation or a
subsidiary or by any stockholder of the Corporation or a subsidiary against any
past, present or future non-employee directors or consultants (past, present or
future) against the Corporation shall, irrespective of the place where an action
may be brought and irrespective of the place of residence of any such
stockholder or individual, cease and be barred by the expiration of three years
from the date of the act or omission in respect to which such right of action is
alleged to have arisen.

        17. Registration Rights. If in the future the Corporation registers
additional shares with the Securities and Exchange Commission, the
Corporation
will also register the shares subject to the options of this Plan.

Dated as of:   October 15, 2000
Amended:       June 11, 2001
                                        NAPCO SECURITY SYSTEMS, INC.

                                        By: /s/ Richard Soloway
                                          --------------------------
                                                Richard Soloway, President
ATTEST:

By: /s/ Kevin S. Buchel
   --------------------
        Kevin S. Buchel,
        Senior Vice President

                                      E-9<PAGE>
                                                                    EXHIBIT 10.P

               AMENDMENT NO. 8 TO THE LOAN AND SECURITY AGREEMENT

      AMENDMENT NO. 8 to the Loan and Security Agreement dated as of May 15,
2001 ("Amendment No. 8") by and between NAPCO SECURITY SYSTEMS, INC., a New York
corporation having a place of business at 333 Bayview Avenue, Amityville, New
York 11701 (the "Debtor") and HSBC BANK USA F/K/A MARINE MIDLAND BANK, having a
place of business at 534 Broad Hollow Road, Melville, New York 11747 (the
"Secured Party").

                              W I T N E S S E T H :

      WHEREAS, as of May 12, 1997, Debtor and Secured Party had entered into a
certain loan and security agreement, as amended by amendment no. 1 to the loan
and security agreement dated as of May 28, 1998, as amended by amendment no. 2
to the loan and security agreement dated as of June 30, 1999, as amended by
amendment no. 3 to the loan and security agreement dated as of February 9, 2000,
as amended by amendment no.4 to the loan and security agreement dated as of July
27, 2000, as amended by amendment no. 5 to the loan and security agreement dated
as of September 22, 2000, as amended by amendment no. 6 to the loan and security
agreement dated as of November 22, 2000, as amended by amendment no. 7 to the
loan and security agreement dated as of February 14, 2001 as may be amended from
time to time (the "Agreement");

      WHEREAS, the Debtor has requested that the Secured Party increase the
Borrowing Capacity, extend the Termination Date, and modify the Variable Rate
Option, and the Secured Party has agreed to do so, in the manner set forth
below, provided however, that, among other things, Debtor execute this Amendment
No. 8.

      NOW, THEREFORE, in consideration of the mutual promises and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
parties hereto agree as follows:

            1. The definition of "Borrowing Capacity" contained in Section 1.1.
of the Agreement is hereby amended to read in its entirety as follows:

            BORROWING CAPACITY means, at the time of computation, $18,000,000.

            2. The definition of "Consolidated Subsidiary" contained in Section
1.1. of the Agreement is hereby amended to read in its entirety as follows:

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            CONSOLIDATED SUBSIDIARY means Alarm Lock Systems, Inc. ("Alarm"),
            NAPCO Security Systems International, Inc. ("NAPCO International"),
            NAPCO/Alarm Lock Grupo Internacional, S.A. ("NAPCO/Alarm Lock"),
            Continental Instruments LLC, f/k/a Continental Instruments Systems,
            LLC ("Continental Systems"), NAPCO Group Europe Limited ("NAPCO
            Europe"), and any other corporation of which at least 50% of the
            voting stock is owned by Debtor directly, or indirectly, through one
            or more Consolidated Subsidiaries, and any other limited liability
            company of which at least 50% of the membership interest is owned by
            Debtor directly, or indirectly, through one or more Consolidated
            Subsidiaries, and each of their respective successors and/or
            assigns.

            3. The definition of "Debt Service Coverage Ratio" contained in
Section 1.1. of the Agreement is hereby amended to read in its entirety as
follows:

            DEBT SERVICE COVERAGE RATIO means earnings before interest, taxes,
            depreciation and amortization, less distributions, all divided by
            prior period current portion of long term debt plus interest
            expense.

            4. The definition of "Revolving Credit Note" or "Note" contained in
Section 1.1. of the Agreement is hereby amended to read in its entirety as
follows:

            REVOLVING CREDIT NOTE or NOTE means, individually, jointly,
            severally, and collectively, the revolving credit note #1 dated May
            12, 1997, in the aggregate sum not to exceed $1,000,000, as modified
            and reaffirmed as of the date hereof, as the same may be further
            extended, amended, reaffirmed and/or otherwise modified from time to
            time ("Note #1") and the revolving credit note # 2 dated May 12,
            1997, in the original aggregate sum not to exceed $15,000,000, as
            increased (so that such note is in the aggregate sum not to exceed
            $17,000,000, otherwise modified and reaffirmed as of the date
            hereof, as the same may be further extended, amended, reaffirmed
            and/or otherwise modified from time to time("Note #2").

            5. The definition of "Termination Date" contained in Section 1.1. of
the Agreement is hereby amended to read in its entirety as follows:

            TERMINATION DATE shall mean the earlier to occur of (a) July 1,
            2004, or, if such day shall not be a Business Day, the next
            succeeding Business Day, or (b) upon the occurrence of an Event of
            Default.

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            6. The definition of "Transaction Documents" contained in Section
1.1. of the Agreement is hereby amended to read in its entirety as follows:

            TRANSACTION DOCUMENTS means, individually, jointly, severally and
            collectively, the Agreement (including all amendments to date,
            including this Amendment No. 7) and all documents, instruments,
            notes and agreements by Debtor, Continental Systems or any other
            Third Party or any Responsible Party in favor of Secured Party,
            whether in existence now or hereinafter created, executed and
            delivered to Secured Party, as the same may be extended,
            re-executed, modified or otherwise amended from time to time,
            including, without limitation, the Term Loan Note, the Continental
            Term Loan Note, the Note, collateral documents, letter of credit
            agreements, notes, acceptance credit agreements, security
            agreements, pledges, guaranties, mortgages, title insurance,
            assignments, and subordination agreements required to be executed by
            Debtor, Continental Systems any other Third Party, or any
            Responsible Party pursuant hereto or in connection herewith, or in
            connection with a letter of credit application and reimbursement
            agreement, each dated as of May 12, 1997, as may be reaffirmed or
            restated from time to time, a certain uncommitted trade line
            established by Secured Party in favor of Debtor to provide for
            commercial and standby letters of credit, evidenced by, among other
            documents, a continuing letter of credit agreement, and a continuing
            indemnity agreement, each dated as of May 12, 1997, as may be
            re-executed, amended, extended or otherwise modified from time to
            time, the Term Loan Note in the principal sum of $2,500,000.00, as
            may be extended or otherwise modified from time to time, the Note,
            the Continental Term Loan Note in the principal sum of $8,250,000,
            that certain ISDA master agreement dated as of July 27, 2000 by and
            between Continental Systems and Secured Party, inclusive of all
            schedules thereto, as the same may be modified from time to time
            (the "Master Agreement") and all such other mortgages, security
            agreements, guaranties and other documents as may be executed and
            delivered to Secured Party to evidence, guaranty and secure the
            Continental Term Loan Note, and the obligations thereunder, as may
            be extended or otherwise modified from time to time, and uncommitted
            line of credit facility to be used by Debtor to finance certain
            acquisitions, as may be executed and delivered to Secured Party from
            time to time to evidence and secure the obligations under such
            facilities pursuant to the terms that the Secured Party shall
            request, and all other documents, agreements, reaffirmations,
            certificates and resolutions related thereto, and amendments or
            supplements thereto, all such other agreements, resolutions,
            certificates, resolutions and opinion letters executed and/or issued
            as a condition precedent to or in connection with the Agreement, the

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            Term Loan Note, Note, the Continental Term Loan Note, and all such
            other documents, agreements, and instruments delivered hereunder or
            as a supplement or amendment thereto or as Secured Party may
            reasonably require from time to time in order to evidence, guaranty
            and/or secure any and all indebtedness of Debtor and/or Continental
            Systems, as the case may be, to Secured Party or to create, perfect,
            continue the perfection or protect the Secured Party's security
            interest in the Collateral or any of the other collateral specified
            in the other Transaction Documents.

            7. The definition of "Variable Rate Option" contained in Section
1.1. of the Agreement is hereby amended to read in its entirety as follows:

            VARIABLE RATE OPTION means a fluctuating annual rate equal to the
Prime Rate minus 1/4 of 1%.

            8. The definition "EBIDTA" shall be added to Section 1.1. of the
Agreement and shall read as follows:

            EBIDTA means earnings before interest, taxes, depreciation and
amortization.

            9. The definition "Funded Debt" shall be added to Section 1.1. of
the Agreement and shall read as follows:

            FUNDED DEBT means all interest bearing debt.

            10. Section 7.3. of the Agreement is hereby amended in its entirety
to read as follows:

            PROMISE TO PAY FEES. Debtor promises to pay to Secured Party
            monthly, on the first day of each calendar month, an unused fee
            equal to one quarter of one percent (.25%) of $18,000,000. less the
            aggregate principal balance of all Advances outstanding during the
            calendar month just ended under the Revolving Credit Facility.

            11. Section 9.26. of the Agreement is hereby amended in its entirety
to read as follows:

                  (a) The Debtor and its Consolidated Subsidiaries shall
            maintain, on a consolidated basis, a ratio of Total Liabilities to
            Tangible Net Worth of not greater than (to be tested quarterly based
            upon the financial statements required to be presented to Secured
            Party pursuant to Section 9.1. hereof):

                  during the period commencing as of the date hereof through the
                  fiscal year ending June 30, 2001, and thereafter while any
                  Indebtedness remains outstanding, 1.50 to 1.

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                  (b) The Debtor and its Consolidated Subsidiaries shall
            maintain, on a consolidated basis, a minimum Tangible Net Worth (to
            be tested quarterly based upon the financial statements required to
            be presented to Secured Party pursuant to Section 9.1. hereof) of
            not less than:

                  (i) during the period commencing as of the date hereof through
                  June 29, 2001, $21,000,000, and

                  (ii) during the period commencing on June 30, 2001 through
                  June 29, 2002, $24,500,000, and

                  (iii) during the period commencing on June 30, 2002 through
                  June 29, 2003, $27,000,000, and

                  (iv) during the period commencing on June 30, 2003 through
                  June 29, 2004, and thereafter while any Indebtedness remains
                  outstanding, $30,000,000.

                  (c) At all times, Debtor and its Consolidated Subsidiaries
            shall maintain, on a consolidated basis, a ratio of Current Assets
            to Current Liabilities, to be tested each fiscal quarter end of each
            fiscal year, based upon the financial statements required to be
            presented to Secured Party pursuant to Section 9.1. hereof:

                  (i) of not less than 3.50 to 1 from the date hereof through
                  the fiscal year ending June 30, 2001, and

                  (ii) of not less than 3.75 to 1 from July 1, 2001 through the
                  fiscal year ending June 30, 2002, and

                  (iv) of not less than 4.00 to 1 from July 1, 2002 through the
                  fiscal year ending June 30, 2003, and thereafter while any
                  Indebtedness remains outstanding.

                  (d) Debtor and its Consolidated Subsidiaries shall maintain,
            on a consolidated basis, a minimum Debt Service Coverage Ratio of
            1.25 to 1, to be tested at the end of each fiscal year, based upon
            the financial statements required to be presented to Secured Party
            pursuant to Section 9.1. hereof.

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                  (e) At all times, Debtor and its Consolidated Subsidiaries
            shall maintain, on a consolidated basis, a ratio of the aggregate of
            cash plus total Receivables to Current Liabilities, to be tested
            each fiscal quarter end of each fiscal year, based upon the
            financial statements required to be presented to Secured Party
            pursuant to Section 9.1. hereof:

                        from the date hereof through the fiscal year ending June
                  30, 2001, and thereafter while any Indebtedness remains
                  outstanding, of not less than 1.25 to 1.

                  (f) During any fiscal year, the Debtor and its Consolidated
            Subsidiaries shall not cause Capital Expenditures of Debtor and its
            Consolidated Subsidiaries to exceed, on a combined basis, $1,250,000
            per fiscal year.

                  (g) The Debtor and its Consolidated Subsidiaries shall
            maintain, on a consolidated basis, a ratio of Funded Debt to EBIDTA
            (to be tested quarterly, on a rolling four quarter basis, based upon
            the financial statements required to be presented to Secured Party
            pursuant to Section 9.1 hereof):

                  (i) of not greater than 4.00 to 1 from the date hereof through
                  the period ending June 29, 2002, and

                  (ii) of not greater than 3.00 to 1 from June 30, 2002 through
                  the period ending June 29, 2003, and

                  (iii) of not greater than 2.00 to 1 from June 30, 2003 through
                  the period ending June 29, 2004, and thereafter while any
                  Indebtedness remains outstanding.

                  (h) At all times while any Indebtedness remains outstanding,
            the Debtor and its Consolidated Subsidiaries shall maintain, on a
            consolidated basis, not less than fifty (50%) of the value of all of
            their identifiable assets (as disclosed in the 10K statement) in the
            United States, to be tested annually, at each fiscal year end.

            The above ratios of this Section 9.26. are being calculated assuming
            that in the last year of the Agreement; and Advances under the
            Revolving Credit Facility are viewed as long term debt, unless there
            is an event of default which is continuing under the Revolving
            Credit Facility.

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      12. As an inducement to the Bank extending and modifying the Revolving
Credit Facility, and modifying the provisions of the Agreement and other
Transaction Documents pursuant to the terms hereof, Debtor represents and
warrants to Secured Party that, as of the date of execution of this Amendment
No. 8, (i) the representations and warranties set forth in Article 4 of the
Agreement and the representations and warranties of Debtor and any Third Party
set forth in the other Transaction Documents to which any is a party are true
and correct in all respects, (ii) no event has occurred and is continuing which
constitutes an "Event of Default" under any of the Transaction Documents (as
"Event of Default" is defined in each of those Transaction Documents"), (iii)
Debtor is in compliance with the covenants set forth in Articles 9 and 10 of the
Agreement, (iv) Debtor has paid the Commitment Fee of $36,000, (v) Debtor will
pay Secured Party's reasonable legal fees and disbursements thereof, and (vi)
Debtor will deliver such corporate resolutions and opinions of counsel as
Secured Party may reasonably request.

      13. Debtor represents and warrants to Secured Party that there are no
offsets, defenses or counterclaims to the payment of the Indebtedness owing
Secured Party, including the Advances, and to the continuing general security
interest in the Collateral granted to Secured Party by Debtor as security for
payment of the Indebtedness, as fully described in the Agreement.

      14. Except as modified herein, all other provisions of the Agreement and
the other Transaction Documents remain unmodified and are in full force and
effect.

      15. Capitalized terms not otherwise defined herein shall have the meanings
ascribed to such terms in the Agreement.

      16. This Amendment No. 8 shall be governed by the laws of the State of New
York.

      IN WITNESS WHEREOF, the parties have executed this Amendment No. 8 to the
Loan and Security Agreement as of the day and year first above written.

                                    HSBC BANK USA F/K/A MARINE MIDLAND BANK

                                    By: /s/ Roger Coleman
                                       -------------------
                                         Roger Coleman, Vice President

                                    NAPCO SECURITY SYSTEMS, INC.

                                    By: /s/ Kevin S. Buchel
                                       -------------------
                                         Kevin S. Buchel, Senior Vice President

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

On this 15th day of May, 2001, before me, the undersigned, a Notary Public in
and for said State, personally came ROGER COLEMAN, personally known to me or
proved to me on the basis of satisfactory evidence to be the person, whose name
is subscribed to the within instrument and acknowledged to me that he executed
the same in his capacity and that by his signature on the instrument, the person
or entity upon behalf of which the person acted executed the instrument.

                                            /s/
                                            -----------------------------------
                                            Notary Public

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

On this 15th day of May, 2001, before me, the undersigned, a Notary Public in
and for said State, personally came KEVIN BUCHEL personally known to me or
proved to me on the basis of satisfactory evidence to be the person, whose name
is subscribed to the within instrument and acknowledged to me that he executed
the same in his capacity and that by his signature on the instrument, the person
or entity upon behalf of which the person acted executed the instrument.

                                            /s/
                                            -----------------------------------
                                            Notary Public

                                      E-17

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