BEI ELECTRONICS, INC.

                       SIXTH AMENDMENT TO CREDIT AGREEMENT


         This SIXTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is dated as
of October 31,  1996 and  entered  into by and among BEI  Electronics,  Inc.,  a
Delaware  corporation,   BEI  Sensors  &  Systems  Company,   Inc.,  a  Delaware
corporation,  Defense Systems  Company,  Inc., a Delaware  corporation,  and BEI
Medical Systems  Company,  Inc., a Delaware  corporation  (each a "Borrower" and
collectively  the  "Borrowers"),   the  financial  institutions  listed  on  the
signature pages hereof (each a "Lender" and  collectively  the "Lenders"),  CIBC
Inc.,  as agent for the Lenders (the  "Agent"),  and Canadian  Imperial  Bank of
Commerce,  as the Designated  Issuer, and is made with reference to that certain
Credit  Agreement dated as of June 1, 1993, as amended by the First Amendment to
Credit  Agreement  dated as of  September  3,  1993,  as  amended  by the Second
Amendment to Credit  Agreement and Limited  Waiver dated as of April 1, 1994, as
amended by the Third  Amendment to Credit  Agreement  dated as of September  30,
1994, as amended by the Fourth Amendment to Credit Agreement dated as of June 1,
1995, and as amended by the Fifth Amendment to Credit Agreement dated as of June
1, 1996 (as so amended, the "Credit Agreement") by and among the Borrowers,  the
Lenders,  the Agent and the  Designated  Issuer.  Capitalized  terms used herein
without  definition  shall  have the same  meanings  herein  as set forth in the
Credit Agreement.

                                    RECITALS

         WHEREAS, the Borrowers have requested an extension of the Maturity Date
of the Credit  Agreement,  and the Lenders,  the Agent and the Designated Issuer
have so agreed;

         WHEREAS,  the  Borrowers,  the  Lenders,  the Agent and the  Designated
Issuer desire to amend the Credit Agreement as set forth below;

         NOW,  THEREFORE,  in  consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:

         1.       Amendments to the Credit Agreement.

                  1.1      Amendments to Section 1.01: Defined Terms.

                           1.1.1    The following definitions in Section 1.01 of
the Credit Agreement are hereby amended in to read in their entirety as follows:

         "'Maturity  Date':   February  28,  1997,  or,  if  earlier,   the  day
         immediately  prior to the  distribution  date of a tax free spin-off of
         any of the Borrowers' Subsidiaries."

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         2.       Conditions to Effectiveness.

                  This  Amendment  shall be deemed  effective  as of October 31,
1996 (the "Sixth Amendment  Effective Date") upon the satisfaction of all of the
following conditions precedent:

                  2.1 The Agent  shall  have  received  for each  Lender and the
Designated Issuer  counterparts hereof duly executed on behalf of the Borrowers,
the Agent and the Lenders (or notice of the  approval of this  Amendment  by the
Lenders satisfactory to the Agent shall have been received by the Agent).

                  2.2  The Agent shall have received a closing fee in the amount
of $2,500.00.

                  2.3  All corporate and other  proceedings taken or to be taken
in  connection  with the  transactions  contemplated  hereby  and all  documents
incidental  thereto not  previously  found  acceptable  by the Agent,  acting on
behalf  of the  Lenders,  and its  counsel  shall  be  satisfactory  in form and
substance to the Agent and such  counsel,  and the Agent and such counsel  shall
have  received  all such  counterpart  originals  or  certified  copies  of such
documents as the Agent may reasonably request.

         3.       Borrowers' Representations and Warranties.

                  In order to induce the  Lenders  to enter into this  Amendment
and to amend the Credit Agreement in the manner provided  herein,  the Borrowers
represent  and warrant to each Lender that the  following  statements  are true,
correct and complete:

                  3.1 Corporate  Power and  Authority.  The  Borrowers  have all
requisite  corporate  power and  authority to enter into this  Amendment  and to
carry  out the  transactions  contemplated  by,  and  perform  their  respective
obligations  under,  the Credit  Agreement  as amended  by this  Amendment  (the
"Amended Agreement"). The Certificate of Incorporation and Bylaws of each of the
Borrowers have not been amended since September 30, 1994,  except for the bylaws
of BEI  Electronics,  Inc. which were amended as of April 1, 1996 (a copy of the
amended bylaws have been delivered to Agent).

                  3.2 Authorization of Agreements. The execution and delivery of
this  Amendment  and the  performance  of the Amended  Agreement  have been duly
authorized by all necessary corporate action on the part of the Borrowers.

                  3.3  No Conflict.  The execution and delivery by the Borrowers
of this  Amendment and the performance by the Borrowers of the Amended Agreement
do not and will not contravene (i) any law or regulation binding on or affecting
any of

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the Borrowers or any of their respective  Subsidiaries,  (ii) the Certificate of
Incorporation  or Bylaws of any of the Borrowers,  (iii) any order,  judgment or
decree  of any  court  of  other  agency  of  government  binding  on any of the
Borrowers  or any of  their  respective  Subsidiaries  or (iv)  any  contractual
restriction  binding  on or  affecting  any of  the  Borrowers  or any of  their
respective Subsidiaries.

                  3.4 Governmental  Consents.  The execution and delivery by the
Borrowers of this Amendment and the  performance by the Borrowers of the Amended
Agreement do not and will not require any authorization or approval of, or other
action by, or notice to or filing with any governmental  authority or regulatory
body.

                  3.5  Binding  Obligation.   This  Amendment  and  the  Amended
Agreement  have been duly  executed and  delivered by the  Borrowers and are the
binding  obligations  of the  Borrowers,  enforceable  against the  Borrowers in
accordance with their respective  terms,  except as such  enforceability  may be
limited by bankruptcy, insolvency,  reorganization,  liquidation,  moratorium or
other similar laws of general  application and equitable  principles relating to
or affecting creditors' rights.

                  3.6  Absence  of  Default.   No  event  has  occurred  and  is
continuing or will result from the consummation of the transactions contemplated
by this Amendment that would constitute an Event of Default or a Potential Event
of Default.

         4.       Miscellaneous.

                  4.1    Reference to and Effect on the Credit Agreement and the
                         Other Loan Documents.

                           4.1.1      On and after the Sixth Amendment Effective
Date, each reference in the Credit Agreement to "this  Agreement",  "hereunder",
"hereof",  "herein" or words of like import  referring to the Credit  Agreement,
and each  reference  in the other  Loan  Documents  to the  "Credit  Agreement",
"thereunder",  "thereof"  or  words  of  like  import  referring  to the  Credit
Agreement shall mean and be a reference to the Amended Agreement.

                           4.1.2      Except  as  specifically  amended  by this
Amendment,  the Credit  Agreement and the other Loan  Documents  shall remain in
full force and effect and are hereby ratified and confirmed.

                           4.1.3      Without  limiting  the  generality  of the
provisions of Section 10.01 of the Credit  Agreement,  nothing in this Amendment
shall be deemed to (a)  constitute a waiver of compliance by the Borrowers  with
respect to any term, provision or condition of the Credit Agreement or any other
instrument or agreement referred to therein or (b) prejudice any right or remedy
that the Agent or any Lender
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may now have or may have in the future  under or in  connection  with the Credit
Agreement or any other instrument or agreement referred to therein.

                  4.2  Fees and  Expenses.  The  Borrowers  acknowledge that all
costs,  fees and expenses as described in Section 10.05 of the Credit  Agreement
incurred by the Agent and its counsel  with  respect to this  Amendment  and the
documents and transactions  contemplated  hereby shall be for the account of the
Borrowers.

                  4.3  Headings.   Section  and  subsection   headings  in  this
Amendment are included  herein for  convenience  of reference only and shall not
constitute  a part of this  Amendment  for any  other  purpose  or be given  any
substantive effect.

                  4.4  Applicable  Law.  THIS  AMENDMENT  SHALL  BE GOVERNED BY,
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF CALIFORNIA, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

                  4.5 Counterparts. This Amendment may be executed in any number
of counterparts and by different parties hereto in separate  counterparts,  each
of which when so executed and  delivered  shall be deemed an  original,  but all
such  counterparts  together shall  constitute but one and the same  instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single  counterpart so that all signature pages are physically  attached to
the same document.

         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly  executed  and  delivered  by  their  respective  officers  thereunto  duly
authorized as of the date first written above.

                              BEI ELECTRONICS, INC.


                              By:  /s/ Robert R. Corn
                                   ---------------------------------------------

                              Title:  Treasurer
                                     -------------------------------------------


                              BEI SENSORS & SYSTEMS
                              COMPANY, INC.


                              By:  /s/ Robert R. Corn
                                   ---------------------------------------------

                              Title: Treasurer
                                     -------------------------------------------