Amendment To Tax Allocation And Indemnity Agreement

FIRST AMENDMENT TO TAX ALLOCATION AND INDEMNITY AGREEMENT


This First Amendment to Tax Allocation and Indemnity Agreement is entered into this 15th day of December 1998, by and between BEI Electronics, Inc., a Delaware corporation ("Electronics"), and BEI Technologies, Inc., a Delaware corporation ("Technologies").


RECITALS


1. Electronics and Technologies entered into a Tax Allocation and Indemnity Agreement on September 26, 1997, in connection with the distribution of Technologies stock to Electronics' shareholders (the "Agreement").


2. In order better to reflect the parties' original intentions, the parties to the Agreement wish to amend and restate certain provisions of the Agreement as if they had been originally incorporated therein.


3. All defined terms used below shall have the same meaning as defined in the agreement.


AMENDMENTS


A. Article III Section 3.1(a) is hereby amended and restated to read as follows:


3.1 Federal Income Taxes:


(a) For each taxable year (or portion thereof) in which Technologies and any other members of the Technologies Subgroup are included in the Electron ...