SECOND AMENDMENT TO CREDIT AGREEMENT


         THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is entered
into as of November 30, 2000, by and between BEI TECHNOLOGIES,  INC., a Delaware
corporation  ("BEI"),  and BEI  SENSORS  & SYSTEMS  COMPANY,  INC.,  a  Delaware
corporation (individually and collectively,  "Borrower"),  and WELLS FARGO BANK,
NATIONAL ASSOCIATION ("Bank").

                                    RECITALS

         WHEREAS,  Borrower is currently  indebted to Bank pursuant to the terms
and conditions of that certain Credit Agreement  between Borrower and Bank dated
as of December 15, 1998, as amended from time to time ("Credit Agreement").

         WHEREAS,  Bank and Borrower have agreed to certain changes in the terms
and  conditions  set forth in the Credit  Agreement and have agreed to amend the
Credit Agreement to reflect said changes.

         NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are  hereby  acknowledged,  the  parties  hereto  agree that the Credit
Agreement shall be amended as follows:

         1. Section 1.1(a) is hereby amended by (a) deleting  "Thirteen  Million
Dollars  ($13,000,000.00)"  as the maximum  principal amount available under the
Line  of  Credit,   and   replacing  it  with   "Twenty-five   Million   Dollars
($25,000,000.00)"  and (b) deleting "December 15, 2001" as the last day on which
Bank will make advances under the Line of Credit,  and by substituting  for said
date  "December 15, 2002," with such changes to be effective  upon the execution
and delivery to Bank of a promissory note substantially in the form of Exhibit A
attached  hereto (which  promissory note shall replace and be deemed the Line of
Credit Note defined in and made pursuant to the Credit  Agreement) and all other
contracts, instruments and documents required by Bank to evidence such change.

         2.       Section 1.1(a) is further amended by deleting the following:

         "provided, however, that availability under the Line of Credit shall be
         limited  to  $12,000,000.00  until such time as Bank has  received  and
         reviewed BEI's FYE 1999 audited  financial  statement  which reflects a
         ratio of Funded Debt to EBITDA of not greater than 3.00 to 1.00 for the
         fiscal year then  ended,  at which time  (assuming  no Event of Default
         then exists)  availability  under the Line of Credit shall be increased
         to $13,000,000.00."

         3 The maximum  principal  amount  available  under the Letter of Credit
Subfeature remains Six Million Dollars ($6,000,000.00).

         4.       Section 1.2(d) is hereby amended to read as follows:

                  "(d) Unused  Commitment Fee.  Borrower shall pay to Bank a fee
         equal to fifteen  hundredths percent (0.15%) per annum (computed on the
         basis of a 360-day  year,  actual days  elapsed)  on the average  daily
         unused amount of the Line of Credit, which fee shall be calculated on a
         monthly  basis by Bank and  shall be due and  payable

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         by Borrower in arrears  within ten (10) days after each billing is sent
         by Bank.  Said fee is  subject to  adjustment  from time to time as set
         forth in the Addendum to the Line of Credit Note."

         5. A new  paragraph  (e) is added to Section 4.9,  which  paragraph (e)
read as follows:

                  "(e) Profitability  (defined as net income after taxes) of not
         less than $4,000,000.00 during each four (4) fiscal period,  determined
         as of each fiscal quarter end on a trailing four quarter basis."

         6.  Section   4.11  is  hereby   deleted  in  its   entirety,   without
substitution.

         7. Section 5.6 is amended by deleting the following:

         ", and (b) additional  liabilities (inclusive of liabilities under this
         Agreement) not to exceed at any time an aggregate outstanding principal
         balance of $12,000,000.00 (increasing to $13,000,000.00 if and when the
         availability under the Line of Credit increases to such amount";

         replacing it with the following:

         ", and (b) the liabilities of Borrower to Bank".

         8. Except as specifically  provided herein, all terms and conditions of
the  Credit  Agreement  remain  in full  force  and  effect,  without  waiver or
modification.  All terms  defined  in the Credit  Agreement  shall have the same
meaning when used in this  Amendment.  This  Amendment and the Credit  Agreement
shall be read together, as one document.

         9. Borrower hereby remakes all representations and warranties contained
in the Credit Agreement and reaffirms all covenants set forth therein.  Borrower
further certifies that as of the date of this Amendment there exists no Event of
Default  as defined in the Credit  Agreement,  nor any  condition,  act or event
which with the giving of notice or the passage of time or both would  constitute
any such Event of Default.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
as of the day and year first written above.

                                                WELLS FARGO BANK,
BEI TECHNOLOGIES, INC.                             NATIONAL ASSOCIATION


By: _______________________________             By: _______________________
       Robert R. Corr                                  Charlie Cowles
       Vice President/Secretary/Treasurer               Assistant Vice President


BEI SENSORS & SYSTEMS COMPANY, INC.

By: _________________________________
       Robert R. Corr
       Vice President/Secretary/Treasurer