Document:

FIRST AMENDMENT TO LEASE

         This First Amendment to Lease ("Amendment") date d May 1, 2000, by and
between Hollister '97, L.L.C., a New Jersey limited liability company, with its
address at 90 Main Street, Suite 301, Hackensack, New Jersey 07601 ("Landlord")
and BEI Medical Systems Company, Inc., a Delaware corporation, with its offices
at 100 Hollister Road, Teterboro, New Jersey 07608 ("Tenant").

RECITALS:

A.       Landlord and Tenant have executed and delivered a certain Agreement of
         Lease ("Lease") dated January 20, 1998 for certain leased premises
         ("original leased premises") located at 100 Hollister Road, Teterboro,
         Bergen County, New Jersey.

B.       Landlord and Tenant desire to amend the Lease to
         modify certain provisions.

Now, therefore, in consideration of the mutual agreements herein contained and
other good and valuable consideration, the receipt of which is hereby
acknowledged, it is mutually agreed as follows:

1.       The Recitals set forth above are hereby incorporated into this
         Amendment with the same force and effect as if they had been set forth
         herein at length. The words and phrases as defined in the Lease will
         have the same meaning in this Amendment.

2.       Section 1 of the Lease is hereby amended as follows:

         a.    Tenant will vacate a portion of the original leased premises and
               will continue to occupy approximately 10,926 square feet,
               including common use of the vestibule and bathrooms with the
               adjacent tenant (hereinafter defined in Section 8 of this
               Amendment), which areas will become the leased premises. Exhibit
               "A" is hereby amended to substitute Exhibit "A" which is attached
               hereto and made a part hereof, and the leased premises will be as
               shown in red outlining on Exhibit "A". Tenant shall forever be
               released and discharged from any and all obligations and
               liabilities under the Lease as they relate to the 13,486 square
               feet the Tenant is vacating ("Vacated Space") when both of the
               following have occurred (the "Vacated Space Termination Date"),
               (i) the Completion Date (defined in the revised Section 13A of
               the Lease) has occurred and (ii) Tenant has vacated the Vacated
               Space; however, Tenant will remain liable for Rent and tenant
               expense contributions for the Vacated Space prorated to the
               Termination Date.

         b.    The number of parking spaces for Tenant's use is reduced to
               thirty five (35) parking spaces, and will be located in the area
               shown on the attached Exhibit "A". Tenant will use the parking
               spaces for passenger automobiles only and not for trucks.

         c.    Tenant's used of the lease premises is hereby changed so that it
               will be limited to light manufacturing and assembly of electronic
               instruments for medical applications and related executive and
               administrative officers. Tenant will not be permitted to use
               heavy production machinery nor will it be permitted to store
               and/or use hazardous wastes and material, as defined in ISRA from
               time to time (ISRA is defined in Section 34 of the Lease), except
               that it may store and/or use hazardous wastes and materials which
               are commonly used to clean offices and which are used in normal
               business machines (toner, etc.), or such other hazardous wastes
               and materials which fall within the New Jersey Department
               Environmental Protection's criteria for deminimus quantity
               exemptions.

3.       Section 2 of the Lease is hereby amended to provide
         that the term of the Lease will end on June 30, 2004.

<PAGE>

4.       Section 2b, which granted an option to extend the term of the Lease, is
         hereby deleted in its entirety, and there will be no right of Tenant to
         extend the term beyond June 30, 2004.

5.       Section 3 is hereby amended to provide that the monthly installments of
         fixed minimum annual rent will be as follows beginning on August 1,
         2000:

                        PERIOD                              MONTHLY INSTALLMENTS

          August 1, 2000 to and including March 31,        $ 10,179.39
          2001

          April 1, 2001 to and including March 31,         $ 10,015.50
          2002

          April 1, 2002 to and including June 30,          $ 10,926.00
          2004

6.       Section 3a of the Lease is hereby amended to provide
         that all payments shall be payable to Landlord at:

                           c/o      Marcus Associates Property
                                    Management, Inc.
                                    Suite 301
                                    90 Main Street
                                    Hackensack, New Jersey 07601

7.       Section 4 is hereby amended to provide that Tenant's pro rata share of
         taxes will be reduced to 6.24%, effective August 1, 2000.

8.       Section 5 of the Lease is hereby deleted in its
         entirety and the present section is hereby
         substituted in its place:

                  "5. UTILITES. Tenant shall also be responsible for the cost of
                  any and all utilities, including electricity, water, and gas
                  consumed at the leased premises, and Tenant shall make payment
                  directly to the utility companies, except as herein provided
                  otherwise. Initially, Tenant will have a separate gas meter
                  which services the leased premises only. Electricity is
                  metered by a meter which services both the leased premises and
                  the adjoining premises, to be occupied by J. Manheimer, Inc.
                  (the "adjacent tenant"). Landlord will investigate the cost
                  and feasibility of installing a new electric meter to service
                  the leased premises only. In the event Landlord installs a new
                  electric meter to service the leased premises only, Landlord
                  shall bear all costs and expenses relative thereto. Until a
                  separate electric meter has been installed and with regard to
                  water usage for which the present meter services both the
                  leased premises and the premises to be occupied by the
                  adjacent tenant and for which a separate meter will not be
                  installed, tenant will pay the electricity and water charges
                  directly to the utility companies, and Tenant will seek
                  reimbursement directly from the adjacent tenant and in an
                  amount equal to 54.97% of the total monthly charges. Landlord
                  will cause the present and all future adjacent tenants to
                  agree to the matters set forth in this paragraph. In the event
                  that the space occupied by the present or future adjacent
                  tenant exceeds approximately 13,338 square feet or in the
                  event that the use by Tenant or the present or future adjacent
                  tenant changes so that either uses substantially greater
                  amounts of electricity and/or water, Landlord will use its
                  best efforts to bring about an equitable adjustment of the
                  relative shares of the cost of electricity and/or water to be
                  borne by each of the two tenants."

9.       Section 10 a of the Lease is hereby amended to reduce Tenant's pro rata
         share to 6.24% effective August 1, 2000.

<PAGE>

10.      Section 11 c of the lease is hereby amended to delete the entire
         paragraph and to substitute the following in its place:

                  "c. Tenant's pro rata share of 6.24% was calculated using the
                  ratio of 10,926 square feet to 175,500 square feet."

11.      A new Section 11 d is hereby added as follows;

                  "d. With regard to the vestibule and bathrooms which will be
                  shared by the adjacent tenant (the "shared area"), the
                  adjacent tenant will be responsible for maintenance and repair
                  thereof and will cause janitorial services to be performed by
                  an unrelated entity on a nightly basis. The adjacent tenant
                  will pay for the reasonable costs of such services, and Tenant
                  will not be obliged to reimburse the adjacent tenant for such
                  repairs, maintenance and janitorial services. Landlord will
                  cause the adjacent tenant to agree to these provisions."

12.      Section 13 A of the Lease is hereby deleted in its entirety and the
         following is substituted in its place:

                  "A. Tenant, at Tenant's expense, will construct (i) a demising
                  wall (the "demising wall") of double 5/8" fire-rated sheetrock
                  with sound baffling insulation to separate the leased premises
                  to be occupied by the adjacent tenant and (ii) doors to
                  separate the leased premises from the adjacent premises. the
                  construction will be performed as follows:

                      (i)     The demising wall will be as shown on Exhibit "A"
                              which is attached hereto and made a part hereof.
                              The demising wall must extend from the floor to
                              the underside of the roof deck so that it will be
                              a legal fire wall; and;

                      (ii)    The two (2) doors will be security doors with Ilco
                              Unican combination locks or comparable punch key
                              combination locks in the bathroom hallway so that
                              the Tenant and the adjacent tenant will have
                              access into the hallway but cannot enter the
                              premises of the other; and

                      (iii)   New door ways will be cut into the bathrooms, and
                              the existing openings between the locker rooms and
                              the bathrooms are to be closed up; and

                      (iv)    With regard to any wall openings to be closed,
                              sheetrock will be installed as may be necessary to
                              secure each premises against entry from the
                              adjacent premises.

The Tenant will obtain all governmental approvals and permits for the demising
wall, doors and wall openings, including a certificate of occupancy upon
completion or other proof of governmental approval, and will cause the work to
be perform in a good and workmanlike manner by independent contractors using
materials consistent with those presently used in the building. Tenant will be
responsible for any architectural fees, and will furnish Landlord with a copy of
the plans and specifications of the work, as completed, and the original
certificate of occupancy. Tenant will furnish Landlord with evidence that all
contractors and supplies have been paid in full and that the property is lien
free. Tenant will use its best efforts to have the work substantially completed
by June 30, 2000. However, failure to substantially complete by that dated shall
not be an event of default under the Lease as herein amended. Substantially
completed shall be deemed to have occurred when the only items remaining to be
performed are minor and insubstantial details of construction, mechanical
adjustment or decoration, the non-completion of which does not materially
interfere with the use by the adjacent tenant of its premises. The date on which
Tenant completes its obligations pursuant to this Section 13A will be the
"Completion Date."

13.      Section 17 of the Lease is hereby amended to provide that the parties
         acknowledge that Marcus Associates, L.L.C. and James E. Hanson, Inc.
         are the brokers for this transaction, and their commission will be paid
         by Tenant pursuant to their separate agreement. Landlord and Tenant
         represent that they have not dealt with any other real estate broker or
         other party who may claim or

<PAGE>

         be entitled to a commission in connection with this Amendment. The
         indemnity provisions of Section 17 will apply to this Amendment.

14.      Section 22 of the Lease is hereby amended to provide that, with regard
         to the presently existing mortgage, Landlord will use its best efforts
         to obtain the mortgagee's consent to this Amendment and the same
         subordination, attornment and non-disturbance agreement which Tenant
         originally executed. Tenant will reimburse Landlord for the mortgagee's
         review fee not to exceed $ 500.00. In the event Landlord does not
         obtain such consent and agreement within thirty (30) days after the
         date hereof, and gives Tenant a copy of such consent, this Amendment
         will terminate automatically, and Landlord will reimburse Tenant for
         its reasonable expenses actually incurred for the plans and building
         permit. In the event Landlord obtains the mortgagee's consent but not
         its agreement to execute a non-disturbance agreement within the same
         thirty (30) day period, Tenant's sole right and remedy to (i) waive the
         requirements for such non-disturbance agreement with regard to the
         presently existing mortgage only or (ii) terminate this Amendment by
         written notice received by Landlord within five (5) days after Tenant
         received notice from Landlord. In the even of such termination, neither
         party shall have any further right or recourse against the other with
         regard to this Amendment, and the Lease, without amendment, will remain
         in full force and effect. Tenant will not be required to begin
         construction until such time as the mortgagee's consent is received;
         however, Tenant will cause plans and specifications to be prepared and
         will apply for a building permit promptly and after the delivery to
         Tenant of a fully executed copy of this Amendment.

15.      Section 37 of the Lease is hereby amended to provide that Landlord will
         not be obligated to return to Tenant the amount of $ 22,833.33 which is
         due and payable of March 1, 2000 unless and until (i) this Amendment
         terminates as herein provided or (ii) Tenant has fulfilled its
         obligations with regard to the demising wall as provided in Section 12
         of this Amendment.

16.      A New Section 48 is added to the Lease as follows:

             "48. CONDITIONS PRECEDENT. The obligations of the Landlord and
             Tenant pursuant to this Amendment are conditioned upon the
             following:

                  a.     Landlord and the adjacent tenant entering into a lease
                         with terms and provisions satisfactory to both parties
                         and consistent with the provisions of this Amendment on
                         or before April 30, 2000; and

                  b.     Landlord obtaining the consent of its mortgagee and the
                         execution of subordination, non-disturbance and
                         attornment agreement with regard to this Amendment and
                         the lease with the adjacent tenant on or before May 30,
                         2000.

In the event that these condition have not been satisfied, this Amendment will
terminate, automatically, and the Lease will continue in full force and effect
as originally stated."

17.      A new Section 49 is added to the Lease as follows:

             "49. ACCESS TO TELEPHONE PANEL. Landlord, adjacent tenant and any
             future substitutes or replacements of the adjacent tenant and their
             respective contracts will have access to the telephone patch panel
             located in the leased premises for the purpose of installing,
             repairing, replacing and maintaining telephone lines which service
             the adjoining space to be occupied by the adjacent tenant. Access
             will be given during Tenant's normal business hours and provided
             that Tenant has given at least twenty-four hour prior written
             notice. The party (Landlord, adjacent tenant, etc.) which request
             such access will be deemed, automatically, to have indemnified and
             held harmless from and against all loss, damage and expenses
             arising out of damage to personal property or personal injury
             resulting from such access and the work performed."

<PAGE>

18.      Except that otherwise specifically provided herein, all of the terms
         and provisions of the Lease shall continue in full force and effect. In
         the event of any conflict between the provisions of this Amendment and
         the Lease, the provisions of this Amendment shall govern and prevail.

19.      This Amendment shall be binding upon and shall be for
         the benefit of the parties hereto and their
         respective successors and assigns.

The parties have executed this Amendment on the date first above written.

WITNESS:                                    Hollister '97, L.L.C.
                                            By:  Lyndhurst Properties
                                                 Associates, L.P., its Manager

                                            By:

--------------------------------------      ------------------------------------
                                                          , its General Partner

WITNESS:                                    BEI Medical Systems Company, Inc.

--------------------------------------      ------------------------------------CONSULTING AGREEMENT

         This Consulting Agreement (the "Agreement") is entered into this 13th
day of December 2000 is by and amongst Watchout! Inc. (the "Company") and Farber
and Klein (The "Consultant").

         WHEREAS, Consultant is skilled in providing legal services, and has
provided legal services to Company in the past;

         WHEREAS, the Company desires to continue to engage Consultant to
continue to provide legal services; and

         WHEREAS, the Consultant is due 37,500 shares of the Company's common
stock as a result of a prior agreement with the Company;

         NOW THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration receipt whereof is hereby
acknowledged it is agreed.

         1. The Company hereby engages the Consultant and the Consultant hereby
accepts this engagement on a non- exclusive basis pursuant to the terms and
conditions of this Consulting Agreement for a term commencing on the date hereof
and terminating January 31, 2001.

         2. Consultant shall review and consult with management on proposed
contractual agreements presented to the Company during the term of this
Agreement. Consultant will be available on an "As Needed" basis as to the
structure and operations of any of its subsidiaries. Consultant shall not be
required to prepare or file any type of registration statement as part of this
Agreement.

         3. In order to assist Consultant with his duties, the Company will
provide Consultant with such information, as may be required by Consultant.
Company will make available to Consultant copies of all material agreements,
notice of pending or threatened litigation and notice of all proposed
press releases.

<PAGE>

         4. In consideration of the services to be provided, Consultant shall
receive a fee equal to 50,000 shares of the Company's common stock which
includes 37,500 shares which are due and owing as a result of a prior agreement
between the Company and the Consultant.

         5. The Company will register the 50,000 shares pursuant to a
registration statement on Form S-8.

         6. During the term of this Agreement, each party may have access to
trade secrets, know how, formulae, customer and price lists all of which are
valuable, special, proprietary and unique assets of each. The parties agree that
all knowledge and information which each other shall acquire during the term of
this Agreement shall be held in trust and in a fiduciary capacity for the sole
benefit of the other party, its successors and assigns, and each agrees not to
publish or divulge either during the term of this Agreement or subsequent
thereto, knowledge of any technical or confidential information acquired during
their term of this Agreement.

         At the termination of this Agreement, or at any other time either party
may request the other party to deliver to the other, without retaining any
copies, notes or excerpts thereof, all memoranda, diaries, notes, records,
plans, specifications, formulae or other documents relating to, directly or
indirectly, to any confidential information made or compiled by, or delivered or
made available to or otherwise obtained by the respective parties. However, the
foregoing provision shall not prohibit Consultant from engaging in any work at
any time following his termination of this Agreement which does not conflict
with the terms of this Agreement.

         7. Except as otherwise provided herein, any notice or other
communication to any party pursuant to or relating to

                                       2
<PAGE>

this Agreement and the transactions provided for herein shall be deemed to have
been given or delivered when deposited in the United States Mail, registered or
certified, and with proper postage and registration or certification fees
prepaid, addressed at their principal place of business or to such other address
as may be designated by either party in writing.

          8. This Agreement shall be governed by and interpreted pursuant to the
laws of the state of Florida. By entering into this Agreement, the parties agree
to the jurisdiction of the Florida courts with venue in Palm Beach, County
Florida. In the event of any breach of this Agreement, the prevailing party
shall be entitled to recover all costs including reasonable attorney's fees.

         9. This Agreement may be executed in any number of counterparts, each
of which when so executed an delivered shall be deemed an original, and it shall
not be necessary, in making proof of this Agreement to produce or account for
more than one counterpart.

         IN WITNESS WHEREOF, the parties hereto have subscribed their hands an
seals the day and year first above written.

CONSULTANT:                               COMPANY:
FARBER AND KLEIN                        WATCHOUT! INC.

-----------------                     --------------------
/S/JEFFREY KLEIN                      BY: /S/TODD VIOLETTE
                                          PRES

-----------------
/S/ANDREW FARBER

                                       3

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