Document:

SECURITY AGREEMENT -- STOCK PLEDGE

                  This SECURITY AGREEMENT -- STOCK PLEDGE, dated as of March 30,
2000, is entered into by and among BANK OF AMERICA, N.A. ("Agent") as agent for
Lenders (as defined in the Loan and Security Agreement) and EFTC CORPORATION, a
Colorado corporation ("Pledgor"), in light of the following:

         R E C I T A L S

                  WHEREAS, Pledgor and RM ELECTRONICS, INC., a New Hampshire
corporation (doing business as Personal Electronics) ("PEI", and collectively
with Pledgor, "Borrowers"), Agent and certain other financial institutions
signatory thereto ("Lenders") are currently entering into that certain Loan and
Security Agreement, of even date herewith (as amended, supplemented, or
otherwise modified from time to time, the "Loan and Security Agreement");

                  WHEREAS, Pledgor is the record and beneficial owner of certain
securities identified on Schedule A attached hereto issued by each corporation
listed on such Schedule (each a "Corporation"), which Pledgor is willing to
pledge to Agent for the ratable benefit of Lenders as further security for
Pledgor 's obligations under the Loan and Security Agreement and the other Loan
Documents;

                  WHEREAS, pursuant to the terms of the Loan Agreement, Pledgor
and Agent are entering into this Agreement as additional security for the
Obligations.

                  NOW, THEREFORE, in consideration of the mutual promises,
covenants, conditions, representations, and warranties hereinafter set forth,
and for other good and valuable consideration, the parties hereto agree as
follows:

         A G R E E M E N T

         1.       DEFINITIONS AND CONSTRUCTION.

                  1.1 Definitions. All initially capitalized terms used but not
defined in this Agreement shall have the meanings set forth in the Loan and
Security Agreement. In addition, the following terms shall have the following
meanings:

                           "Agreement" means this Security Agreement--Stock
Pledge, any concurrent or subsequent exhibits or schedules hereto, and any
extensions, supplements, amendments, or modifications to or in connection with
this Security Agreement--Stock Pledge, or to any such schedules or exhibits.

                           "Bankruptcy Code" means the Bankruptcy Reform Act of
1978 (11 U.S.C.

Sections 101-1330), as amended or supplemented from time to time, and any
successor statute, and any and all rules issued or promulgated in connection
therewith.

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                           "Code" means the California Uniform Commercial Code,
as amended and supplemented from time to time, any successor statute.

                           "Collateral" means all of the following:

                           (a)      100% of the presently existing and hereafter
arising issued and outstanding shares of capital stock of each of the
Corporations owned by Pledgor and listed on Schedule A (collectively, the
"Shares") and the certificates representing the Shares;

                           (b)      100% of Pledgor's presently existing and
hereafter arising stock subscription warrants, stock options, or other rights to
purchase capital stock and all rights represented thereby of each Corporation
(collectively, the "Options"); and

                           (c)      The proceeds of all of the foregoing,
including, without limitation, any and all dividends, cash, instruments, and
other property from time to time received, receivable, or otherwise distributed
in respect of or in exchange for any of the Shares or the Options (collectively,
the "Proceeds").

                           "Event of Default" means an Event of Default under
the Loan and Security
Agreement.

                           "Obligations" means all Obligations under the Loan
and Security Agreement and all of the present and future obligations of Pledgor
hereunder.

                           "'33 Act" means the Securities Act of 1933, as
amended and supplemented from time to time, and any successor statute, and any
and all rules promulgated in connection therewith.

                  1.2 Construction. Unless the context of this Agreement clearly
requires otherwise: (a) references to the plural include the singular and
references to the singular include the plural; (b) references to any gender
include the other gender; (c) the terms "include" and "including" are not
limiting; and (d) the term "or" has the inclusive meaning represented by the
phrase "and/or." The terms "hereof," "herein," "hereby," and "hereunder," and
other similar terms in this Agreement, refer to this Agreement as a whole and
not to any particular provision of this Agreement. References in this Agreement
to any "determination," or any matter being "determined," by Agent or any Lender
include good faith estimates (in the case of quantitative determinations), and
good faith beliefs (in the case of qualitative determinations) by Agent or such
Lender and mean that any such determination so made shall be conclusive absent
manifest error. Unless otherwise specified, section and subsection references
are to this Agreement. Any reference to any statute, law, or regulation shall
include all amendments thereto and revisions thereof. Any reference herein to
any of the Loan Documents includes any and all alterations, amendments,
extensions, modifications, renewals, or supplements thereto or thereof, as
applicable.

         2.       PLEDGE.

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                  As security for the prompt and complete payment and
performance of the Obligations, Pledgor hereby delivers, pledges, and grants to
Agent for the ratable benefit of Lenders a continuing security interest in all
of Pledgor's now-owned or hereafter-acquired right, title, and interest in and
to the Collateral.

         3.       DELIVERY OF COLLATERAL; FURTHER ASSURANCES.

                  3.1 Delivery. All certificates or instruments representing or
evidencing the Collateral shall be delivered to and held by Agent on behalf of
the Lenders pursuant hereto and shall be in suitable form for transfer by
delivery and shall be accompanied by all necessary instruments of transfer or
assignment, duly executed in blank and undated, all in form and substance
satisfactory to Agent.

                  3.2 Uncertificated Securities. In the event that the
securities that comprise the Collateral are uncertificated or in book entry
form, then Pledgor shall (a) take such actions as may be required to cause each
Corporation (i) to reflect Agent as the registered owner of such Collateral and
(ii) to otherwise take such actions as the Agent may require for the Agent's
security interest therein to be perfected by giving the Agent "control" of the
Shares pursuant to Section 8106 of the UCC and (b) upon request of Agent,
provide Agent with an opinion of counsel reasonably satisfactory to the Agent,
to the effect that Agent has a perfected security interest in the Collateral and
such other opinions as Agent may reasonably require, in form and substance
reasonably satisfactory to Agent.

                  3.3 Registration. Agent shall have the right, at any time
after an Event of Default shall have occurred and be continuing, to transfer to
or to register in the name of Agent or any of its nominees any or all of the
Collateral, subject only to the revocable rights specified in Section 5.1.

                  3.4 Further Assurances. Pledgor agrees that it will cooperate
with Agent, upon request of Agent, and shall execute and deliver, or cause to be
executed and delivered, to Agent, all stock powers, proxies, applications,
agreements, assignments, financing statements, instruments, and other documents,
and shall take all further action, at the expense of Pledgor, from time to time
reasonably requested by Agent, in order to maintain a continuing,
first-priority, perfected security interest in the Collateral in favor of Agent,
and to enable Agent to exercise and enforce its rights and remedies hereunder
with respect to the Collateral, and Pledgor agrees that it shall execute and
deliver to Agent at Agent's request any further applications, agreements,
documents and instruments, and shall perform any and all acts deemed necessary
by Agent, to carry into effect the terms, conditions, and provisions of this
Agreement and the transactions connected herewith.

         4.       AGENT'S DUTIES.

                  The powers conferred on the Agent hereunder are solely to
protect the interest of Agent and Lenders in the Collateral and shall not impose
any duty upon Agent to exercise any such powers. Agent shall not have any duties
with respect to the Collateral other than the duty to use reasonable care if the
Collateral is in its possession and to account for moneys actually received by
it hereunder. In accordance with Section 9207 of the Code, Agent shall be deemed
to have used

<PAGE>

reasonable care if it observes substantially the same standard of care with
respect to the custody or preservation of the Collateral as it observes with
respect to similar assets owned by Agent. Without limiting the generality of the
foregoing, Agent shall be under no obligation to take any steps to preserve
rights in the Collateral against any other parties, to sell the same if it
threatens to decline in value, or to ascertain or to exercise any rights
represented thereby (including rights with respect to calls, conversions,
exchanges, maturities, or tenders); provided, however, that Agent may, at its
option, do so, and any and all expenses incurred in connection therewith shall
be for the account of Pledgor.

5.       VOTING RIGHTS; DIVIDENDS; ETC.

                  During the term of this Agreement, and as long as no Event of
Default has occurred and is continuing:

                  5.1 Voting Rights. Pledgor shall be entitled to exercise any
and all voting and other consensual rights pertaining to any of the Shares or
any part thereof for any purpose not inconsistent with the terms of this
Agreement; provided, however, no vote shall be cast or any consent, waiver or
ratification given or any action taken which would violate or be inconsistent
with the terms of this Agreement, the Loan Agreement or any other instrument or
agreement referred to therein or herein, or which could have the effect of
impairing the value of the Collateral or any part thereof or the position or
interest of Agent therein.

                  5.2 Dividends. Pledgor shall be entitled to receive and retain
any and all dividends and distributions paid in respect of the Shares (but only
to the extent that such distribution is permitted under the Loan and Security
Agreement); provided, however, that any and all:

                           (a)      dividends and distributions paid or payable
other than in cash in respect of, and any and all additional shares or
instruments and other property received, receivable, or otherwise distributed in
respect of, or in exchange for, any Shares;

                           (b)      dividends and distributions paid or payable
in cash in respect of any Shares in connection with a partial or total
liquidation or dissolution, merger, consolidation or reorganization of any
Corporation; and

                           (c)      cash paid with respect to, payable, or
otherwise distributed on redemption of, or in exchange for, any Shares, shall be
forthwith delivered to Agent to hold as Collateral and shall, if received by
Pledgor, be received in trust for the benefit of the Agent and Lenders, be
segregated from the other property or funds of Pledgor, and be forthwith
delivered to Agent as Collateral in the same form as so received (with any
necessary endorsement), and, if deemed appropriate by Agent, Pledgor shall take
such actions, including the actions described in Section 2, as Agent may
require.

                  5.3      Proxy Statements.  Agent shall execute and deliver
(or cause to be executed and delivered) to Pledgor all such proxies and other
instruments as Pledgor may reasonably request for the purposes of enabling
Pledgor to exercise those voting and other rights that Pledgor is entitled

<PAGE>

to exercise pursuant to Section 5.1 above and to receive those dividends or
distributions that Pledgor is authorized to receive and retain pursuant to
Section 5.2.

                  5.4 Event of Default. If an Event of Default shall have
occurred and be continuing: (i) all rights of Pledgor to exercise the voting and
other consensual rights that it would otherwise be entitled to exercise pursuant
to Section 5.1 and to receive the dividends and distributions that they would
otherwise be autho-rized to receive and retain pursuant to Section 5.2 shall, at
Agent's option, cease, and all such rights shall, at Agent's option, thereupon
become vested in Agent for the ratable benefit of Lenders, so long as an Event
of Default shall continue, and Agent shall, at its option, thereupon have the
sole right to exercise such voting and other consensual rights and to receive
and hold as Collateral such dividends and interest payments, (ii) any payments
received Pledgor contrary to the provisions of this Section 5.4 shall be held in
trust by Pledgor for the benefit of Agent and Lenders, shall be segregated from
other funds of Pledgor, and shall be promptly paid over to Agent in the same
form as so received (with any necessary endorsement), and (iii) Agent shall have
the right, pursuant to the terms of this Section 5.4, to vote all or any part of
the Shares (whether or not transferred into the name of the Lender), and give
all consents, waivers and ratifications in respect of the Collateral and
otherwise act with respect thereto as though it were the outright owner thereof.
PLEDGOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS AGENT THE PROXY AND
ATTORNEY-IN-FACT OF PLEDGOR, COUPLED WITH AN INTEREST, WITH FULL POWER OF
SUBSTITUTION TO DO SO; SUCH PROXY SHALL CONTINUE IN FULL FORCE AND EFFECT AND
TERMINATE ONLY UPON THE EARLIER TO OCCUR OF (A) THE INDEFEASIBLE PAYMENT IN FULL
OF THE SECURED OBLIGATIONS, AND (B) 10 YEARS FROM THE DATE HEREOF. AGENT AGREES
NOT TO EXERCISE SUCH PROXY OR TO EXERCISE SUCH POWERS AS ATTORNEY-IN-FACT UNLESS
AT SUCH TIME THERE SHALL BE CONTINUING AN EVENT OF DEFAULT.

6.       REPRESENTATIONS, WARRANTIES, AND COVENANTS.

                  Pledgor warrants, represents, and covenants that:

                  6.1      Incorporation.  Pledgor is a corporation duly
organized, validly existing and in good standing under the laws of Colorado.

                  6.2 No Conflict. The execution, delivery and performance by
Pledgor of this Agreement are within Pledgor's powers, are not in conflict with
the terms of the Articles of Incorporation or Bylaws or other organizational
agreement or instrument of Pledgor, and will not result in a breach of or
constitute a default under any material contract, obligation, indenture or other
instrument to which Pledgor is a party or by which Pledgor is bound or any
material law, rule, regulation, judgment, decree or order of any court or
governmental authority binding on Pledgor.

                  6.3 Actions. Pledgor has taken all corporate action necessary
to authorize the execution and delivery of this Agreement, and the consummation
of the transactions contemplated hereby. Upon its execution and delivery in
accordance with the terms hereof, this Agreement will constitute legal, valid,
and binding obligations of Pledgor, enforceable against Pledgor in accordance

<PAGE>

with its terms, except as enforceability may be limited by bankruptcy,
insolvency, and similar laws and equitable principles affecting the enforcement
of creditors' rights generally.

                  6.4 Ownership of Collateral. Pledgor is the sole legal and
beneficial owner of the Collateral and has the right to pledge and grant a
security interest in or otherwise transfer such Collateral free of any
encumbrances or rights of third parties.

                  6.5 Liens and Encumbrances. All of the Collateral is and shall
remain free from all liens, claims, encumbrances, and purchase-money or other
security interests except for the security interest created by this Agreement.
Pledgor shall not, without Agent's prior written consent, sell, assign (by
operation of law or otherwise), or otherwise dispose of any of the Collateral.

                  6.6 Perfection. The execution and delivery of this Agreement,
and the delivery to Agent of the Shares, creates a valid, perfected, and
first-priority security interest in the Collateral in favor of Agent on behalf
Lenders, and, after such delivery, all actions necessary to such perfection will
have been duly taken.

                  6.7 Governmental Authority. No authorization, consent,
approval or other action by, and no notice to or filing with, any governmental
authority or regula-tory body is required: (a) for the grant by Pledgor of the
security interest granted hereby or for the execution, delivery, or performance
of this Agreement by Pledgor; (b) for the perfection of or exercise by Agent of
its rights and remedies hereunder (except as may have been taken by or at the
direction of Pledgor or as may be required in connection with a disposition of
the Collateral by laws affecting the offering and sale of securities generally);
or (c) for the exercise by Agent of the voting or other rights provided for in
this Agreement or the remedies in respect of the Collateral pursuant to this
Agreement (except as may be required in connection with a disposition of the
Collateral by laws affecting the offering and sale of securities generally). The
pledge of the Collateral pursuant to this Agreement, does not violate
Regulations T, U, or X of the Board of Governors of the Federal Reserve System.

                  6.8      Outstanding Shares.  Each Corporation presently has
issued and outstanding the number of shares of capital stock listed on Schedule
A hereto, of which Pledgor owns the percentages thereof listed on such Schedule;

                  6.9 Options. There are no presently existing Options. Except
as set forth on Schedule B there are no presently existing stock subscription
warrants, stock options, or other rights to purchase any Corporation's capital
stock, in favor of any party including the Pledgor; and the options described on
Schedule B may not be exercised during the term of this Agreement.

                  6.10     Shares Validly Issued.  All of the issued and
outstanding Shares have been duly and validly issued by the respective
Corporations, and they are fully paid and nonassessable.

                  6.11 Potential Changes Affecting Collateral. Pledgor has made
their own arrangements for keeping informed of changes or potential changes
affecting the Collateral (including, but not limited to, rights to convert,
rights to subscribe, payment of dividends, reorganization or other exchanges,
tender offers, and voting rights), and Pledgor agrees that

<PAGE>

Agent shall not have any responsibility or liability for informing Pledgor of
any such changes or potential changes or for taking any action or omitting to
take any action with respect thereto.

                  6.12 Additional Capital Stock. Pledgor will not permit any
Corporation to issue additional capital stock or any Options, warrants, or other
rights to acquire such capital stock without the prior written consent of Agent.

         7.       SHARE ADJUSTMENTS.

                  In the event that during the term of this Agreement, any
reclassification, readjustment, or other change is declared or made in the
capital structure of any Corporation, or any Option is exercised, all new
substituted and additional shares, options, or other securities, issued or
issuable to Pledgor by reason of any such change or exercise shall be delivered
to and held by Agent under the terms of this Agreement in the same manner as the
Collateral originally pledged hereunder.

         8.       OPTIONS.

                  In the event that during the term of this Agreement, Options
shall be issued or exercised in connection with the Collateral, such Options
acquired by Pledgor shall be immediately assigned by Pledgor to Agent, and all
new shares or other securities so acquired by Pledgor shall also be immediately
assigned to Agent to be held under the terms of this Agreement in the same
manner as the Collateral originally pledged hereunder.

         9.       CONSENT.

                  Pledgor hereby consents that, from time to time, before or
after the occurrence or existence of any Event of Default with or without notice
to or assent from Pledgor, any other security at any time held by or available
to Agent for any of the Obligations or any other security at any time held by or
available to Agent of any other person, firm, or corporation secondarily or
otherwise liable for any of the Obligations, may be exchanged, surrendered, or
released and any of the Obligations may be changed, altered, renewed, extended,
continued, surrendered, compromised, waived, or released, in whole or in part,
as Agent may see fit. Pledgor shall remain bound under this Agreement
notwithstanding any such exchange, surrender, release, alteration, renewal,
extension, continuance, compromise, waiver, or inaction, or extension of further
credit.

         10.      EVENT OF DEFAULT.

                  The occurrence of an Event of Default under, and as defined
in, the Loan Agreement shall constitute an event of default ("Event of Default")
under this Agreement.

         11.      REMEDIES UPON DEFAULT.

                  During the continuance of an Event of Default, Agent shall
have, in addition to any other rights given by law or in this Agreement, in the
Loan and Security Agreement, or in any other Loan Document, all of the rights
and remedies with respect to the Collateral of a secured party under

<PAGE>

the UCC, and also shall have, without limitation, the following rights, which
Pledgor hereby agrees to be commercially reasonable:

                  11.1 Public or Private Sale. At any time or from time to time,
Agent, for the ratable benefit of Lenders, may sell, assign and deliver, or
grant options to purchase, all or any part of the Collateral, or any interest
therein, at any public or private sale, in one (1) or more sales or lots,
without demand of performance, or advertisement, for cash, on credit, or for
other proper-ty, for immediate or future delivery without any assump-tion of
credit risk, and for such price or prices and on such terms as Agent in its
absolute discretion may deem commercially reasonable. Agent shall not be
obligated to make any such sale of Collateral regardless of whether any such
notice of sale has therefor been given. Pledgor hereby waives any other
requirement of notice, demand, or advertisement for sale, to the extent
permitted by law. Pledgor hereby waives and releases to the fullest extent
permitted by law any right or equity of redemption with respect to the
Collateral, whether before or after sale hereunder, and all rights, if any, of
marshaling the Collateral and any other security for the Obligations or
otherwise. Agent shall not be liable for failure to collect or realize upon any
or all of the Collateral or for any delay in so doing nor shall Agent be under
any obligation to take any action whatsoever with regard thereto.

                  11.2 Commercially Reasonable. Any sale of the Collateral
conducted in conformity with reasonable commercial practices of financial
institutions disposing of property similar to the Collateral shall be deemed to
be commercially reasonable. Any requirements of reasonable notice shall be met
if such notice is mailed to Pledgor, pursuant to the notice provision in the
Loan and Security Agreement, at least five (5) calendar days before the time of
the sale or disposition. Any other requirement of notice, demand, or
advertisement for sale, is, to the extent permitted by law, waived.

                  11.3 Purchase by the Lender at Public Sale. Agent may, in its
name, or in the name of a designee or nominee, buy any of the Collateral at any
public sale of the Collateral. Agent shall have the right to execute any
document or form, in its name or in the name of any Borrower, that may be
necessary or desirable in connection with such sale of the Collateral.

                  11.4 Applicable Securities Laws. Should Agent reasonably
deter-mine that, prior to any public offering of any of the Collateral, such
securities should be regis-tered under the '33 Act and/or registered or
qualified under any other federal or state law, and that such registration
and/or qualification is not practical, Pledgor agrees that it will be
commercially reasonable if a private sale is arranged even though the sales
price estab-lished and/or obtained may be substantially less than the price that
would be obtained pursuant to a public offering. In connection with any such
private sale, Agent may from time to time attempt to sell all or any part of the
Collateral by a private placement, restricting bidders and prospective
purchasers to those who will represent and agree that they are purchasing for
investment only and not for dis-tri-bution. In so doing, Agent may solicit
offers to buy the Collateral, or any part of it for cash, from a limited number
of investors deemed by Agent, in its reasonable judgment, to be responsible
parties who might be interested in purchasing the Collateral. Agent shall be
under no obligation to delay a sale of any of the Collateral for the period of
time necessary to permit the issuer of such securities to register such
securities for public sale under the '33 Act or similar law, or under applicable
state securities laws. Without limiting the

<PAGE>

generality of the foregoing, the provisions of this Section would apply if, for
example, Agent were to place all or any part of the Collateral for private
placement by an investment banking firm, or if such investment banking firm
purchased all or any part of the Collateral for its own account, or if Agent
placed all or any part of the Collateral privately with a purchaser or
purchasers.

         12.      INDEFEASIBLE PAYMENT

                  The Obligations shall not be considered indefeasibly paid for
purposes of this Agreement unless and until all payments to Agent for the
ratable benefit of the Lenders are no longer subject to any right on the part of
any Person, including Pledgor, Pledgor as a debtor in possession, or any trustee
(whether appointed under the Bankruptcy Code or otherwise) of Pledgor or any of
Pledgor's Assets, to invalidate or set aside such payments or to seek to recoup
the amount of such payments or any portion thereof, or to declare same to be
fraudulent or preferential. In the event that, for any reason, any portion of
such payments to Agent is set aside or restored, whether voluntarily or
involuntarily, after the making thereof, then the obligation intended to be
satisfied thereby shall be revived and continued in full force and effect as if
said payment or payments had not been made.

         13.      AGENT AS PLEDGOR'S ATTORNEY-IN-FACT.

                  Pledgor irrevocably appoints Agent as Pledgor's
attorney-in-fact, with full authority in the place and stead and name of
Pledgor, from time to time at the Agent's discretion, to take any action and to
execute any instrument which the Agent may, in accordance with the provisions of
the Loan Documents or this Agreement, require as necessary or advisable to
accomplish the purposes of this Agreement. Pledgor ratifies and approves all
acts of such attorney. Agent will not be liable for any acts or omissions or for
any error of judgment or mistake of fact or law except to the extent that such
act or omission constituted the gross negligence or wilful misconduct of Agent,
or its officers, directors, employees or agents. This power, being coupled with
an interest, is irrevocable until the commitments under this Agreement and the
Loan and Security Agreement have been terminated, all Letters of Credit have
expired or terminated, and the payment and performance in full of all
non-contingent Obligations. Agent agrees not to exercise such power unless at
such time there shall be continuing an Event of Default, but such limitation
does not limit the effectiveness thereof.

         14.      GENERAL PROVISIONS.

                  14.1     Effectiveness of this Agreement.  This Agreement
shall be binding and deemed effective when executed by Pledgor and accepted and
executed by Agent.

 . The enumeration herein of the Agent's rights and remedies is not intended to
be exclusive, and such rights and remedies are in addition to and not by way of
limitation of any other rights or remedies that Agent may have under the UCC or
other applicable law. Agent shall have the right, in its sole discretion, to
determine which rights and remedies are to be exercised and in which order. The
exercise of one right or remedy shall not preclude the exercise of any others,
all of which shall be cumulative. Agent may, without limitation, proceed
directly against Pledgor to collect the Obligations without any prior recourse
to the Collateral.

<PAGE>

 . No act, failure or delay by Agent shall constitute a waiver of any rights and
remedies. No single or partial waiver by Agent of any provision of this
Agreement, the Loan and Security Agreement, or any other Loan Document, or of
breach or default hereunder or thereunder, or of any right or remedy which Agent
may have, shall operate as a waiver of any other provision, breach, default,
right or remedy or of the same provision, breach, default, right or remedy of a
future occasion. No waiver by Agent shall affect its rights to require strict
performance of this Agreement.

 . If any provision of this Agreement shall be prohibited or invalid, under
applicable law, it shall be effective only to such extent, without invalidating
the remainder of this Agreement.

 . This Agreement shall be deemed to have been made in the State of New York and
shall be governed by and interpreted in accordance with the laws of such state,
except that no doctrine of choice of law shall be used to apply the laws of any
other state or jurisdiction.

 . Pledgor agrees that, in addition to any other courts that may have
jurisdiction under applicable laws or rules, any action or proceeding to enforce
or arising out of this Agreement or any of the Loan Documents may be commenced
in New York, and Pledgor consent and submit in advance to such jurisdiction and
agrees that venue will be proper in such courts on any such matter. The choice
of forum set forth in this section shall not be deemed to preclude the
enforcement of any judgment obtained in such forum, or the taking of any action
under this Agreement to enforce the same, in any appropriate jurisdiction.

  PLEDGOR HEREBY WAIVE TRIAL BY JURY IN ANY LITIGATION IN ANY COURT WITH RESPECT
TO, IN CONNECTION WITH, OR ARISING OUT OF THIS AGREEMENT, THE LOAN DOCUMENTS,
THE OBLIGATIONS OR THE COLLATERAL, OR ANY INSTRUMENT OR DOCUMENT DELIVERED
PURSUANT HERETO OR THERETO, OR ANY OTHER CLAIM OR DISPUTE HOWSOEVER ARISING,
BETWEEN PLEDGOR AND AGENT. PLEDGOR CONFIRM THAT THE FOREGOING WAIVER IS INFORMED
AND FREELY MADE.

                  14.8     [Intentionally Deleted.]

 . All of Pledgor's representations and warranties contained in this Agreement
shall survive the execution, delivery and acceptance thereof by the parties,
notwithstanding any investigation by Agent, the Lenders or any of their
respective agents.

 . Except as otherwise provided herein, all notices, demands, and requests that
either party is required or elects to give to the other shall be in writing
(including facsimile communication), and shall be delivered pursuant to the
terms of Section 15.8 of the Loan and Security Agreement.

 . Unless otherwise expressly provided herein, Pledgor waives presentment,
protest, and notice of demand or dishonor and protest as to any instrument, as
well as any and all other notices to which

<PAGE>

it might otherwise be entitled. No notice to or demand on Pledgor which Agent
may elect to give shall entitle Pledgor to any or further notice or demand in
the same, similar or other circumstances.

 . The provisions of this Agreement shall be binding upon and inure to the
benefit of the respective representatives, successors and assigns of the parties
hereto; provided, however, that no interest herein may be assigned by Pledgor
without the prior written consent of Agent. The rights and benefits of Agent
hereunder shall, if Agent so agrees, inure to any party acquiring any interest
in the Obligations or any part thereof.

 . This Agreement is intended by Pledgor and Agent to be the final, complete, and
exclusive expression of the agreement between them. This Agreement supersedes
any and all prior oral or written agreements relating to the subject matter
hereof and may not be contradicted by evidence of prior, contemporaneous or
subsequent oral agreements of the parties. There are no oral agreements between
the parties. No modification, rescission, waiver, release or amendment of any
provision of this Agreement shall be made, except by a written agreement signed
by Pledgor and Agent.

                  14.15 Ambiguities. To the extent permitted by applicable law,
neither this Agreement nor any uncertainty or ambiguity herein shall be
construed or resolved using any presumption against either Pledgor or Agent,
whether under any rule of construction or otherwise. On the contrary, this
Agreement has been reviewed by Pledgor and Agent and their respective counsel.
To the extent permitted by applicable law, in case of any ambiguity or
uncertainty, this Agreement shall be construed and interpreted according to the
ordinary meaning of the words used to accomplish fairly the purposes and
intentions of all parties hereto.

 . This Agreement may be executed in any number of counterparts, and by Agent and
Pledgor in separate counterparts, each of which shall be an original, but all of
which shall together constitute one and the same agreement.

 . The captions contained in this Agreement are for convenience only, are without
substantive meaning and should not be construed to modify, enlarge or restrict
any provision.

 . After termination of all commitments under the Loan and Security Agreement,
the expiration or termination of all Letters of Credit, and the payment and
performance in full of all non-contingent Obligations, Agent shall execute and
deliver to Pledgor a termination of all of the security interests granted by
Pledgor hereunder and, to the extent they have been delivered to Agent and not
disposed of in accordance with this Agreement, certificates evidencing the
Shares.

<PAGE>

                  IN WITNESS WHEREOF, the parties have executed this Agreement
on the date first written above.

                                     "Agent"

                                     BANK OF AMERICA, N.A.,
                                     as Agent and Lender

                                     By:
                                          Name:
                                          Title:

                                     "Pledgor"

                                     EFTC CORPORATION,
                                     a Colorado corporation

                                     By:    /s/ Jack Calderon
                                     Name:  Jack Calderon
                                     Title: Chief Executive Officer

<TABLE>

                                   SCHEDULE A
<CAPTION>
           Pledgor                          Issuer                Stock Certificate        Number of Shares
                                                                        Number
-----------------------------------------------------------------------------------------------------------------
<S>                          <C>                                            <C>                 <C>
EFTC Corporation             Current Electronics, Inc.                      1                   1,000
                             (certificate is for stock of
                             "Current Merger Corp.", which
                             merged with Current
                             Electronics, Inc.)

EFTC Corporation             Circuit Test, Inc.                             1                   1,000

EFTC Corporation             CTLLC Acquisition Corp.                        1                   1,000

EFTC Corporation             RM Electronics, Inc. (doing                    1                   1,000
                             business as Personal
                             Electronics)
</TABLE>EXHIBIT (10)

                           TENGTU INTERNATIONAL CORP.
                 1999 NON-QUALIFIED STOCK OPTION INCENTIVE PLAN

12.      PURPOSE; EFFECTIVENESS OF THE PLAN.

         (a)      The purpose of the 1999 Tengtu International Corp. (the
                  "Company") 1999 Stock Option Incentive Plan (the "Plan") is to
                  advance the interests of the Company and its stockholders by
                  helping the Company obtain and retain the services of
                  employees, officers, consultants, counsel and directors, upon
                  whose judgment, initiative and efforts the Company is
                  substantially dependent, and to provide those persons with
                  further incentives to advance the interests of the Company.

         (b)      The Plan will become effective on the date of its approval by
                  the stockholders of the Company, provided such approval is
                  within twelve months of March 29, 1999, the date of adoption
                  by the Company's Board of Directors. If the Plan is not so
                  approved by the stockholders of the Company, any options
                  granted under this Plan will be rescinded and will be void.
                  The Plan will remain in effect until it is terminated by the
                  Board or the Committee (as defined hereafter) under section 9
                  hereof, OR DECEMBER 31, 2000, whichever is earlier. This Plan
                  will be governed by, and construed in accordance with, the
                  laws of the State of Delaware.

13. CERTAIN DEFINITIONS. Unless the context otherwise requires, the following

                                       -1-
<PAGE>

defined terms (together with other capitalized terms defined elsewhere in the
Plan) will govern the construction of the Plan, and of any stock option
agreements entered into pursuant to the Plan:

         (a)      "1933 Act" means the federal Securities Act of 1933, as
                  amended;

         (b)      "Board" means the Board of Directors of the Company;

         (c)      "Committee" refers to the Board's Compensation Committee
                  consisting of two or more Disinterested and Non-Employee
                  Directors (as defined herein); provided that the term
                  "Committee" will refer to the Board during such times as no
                  Committee is appointed by the Board;

         (d)      "Company" means Tengtu International Corp., a Delaware
                  corporation;

         (e)      "Disinterested Director" means a member of the Board who does
                  not receive Options under the Plan other than the grant of a
                  Formula Option pursuant to section 4(m);

         (f)      "Eligible Participants" means persons who, at a particular
                  time, are employees, officers, consultants, or directors of
                  the Company or its subsidiaries or counsel to the Company or
                  its subsidiaries;

         (g)      "ESO" means an "Employee Stock Option" which is an Option
                  granted to a director, officer or employee of the Company;

         (h)      "Fair Market Value" means, with respect to the Stock and as of

                                       -2-
<PAGE>

                  the date an Option or a Formula Option is granted hereunder,
                  the market price per share of such Stock determined by the
                  Committee as follows:

                  (i) the Fair Market Value will be equal to the
                      last-transaction price quoted by the NASDAQ system for any
                      date; or

                  (ii)if no trades in the Stock occurred on the date in
                      question, the Fair Market Value will be the last
                      transaction price quoted by the NASDAQ system for the last
                      date on which trades of the Stock occurred.

         (i)      "Formula Option" means an Option granted to non-employee
                  members of the Board of Directors pursuant to section 4(m)
                  hereof;

         (j)      "Non-Employee Director" means a director of the Company who:
                  (i) is not currently an employee or officer of the Company or
                  a parent or Subsidiary of the Company;

                  (ii)does not receive compensation, either directly or
                      indirectly, from the Company, or a parent or subsidiary of
                      the Company, for services rendered as a consultant or in
                      any capacity other than as a director, except for an
                      amount that does not exceed $60,000;

                  (iii) does not possess an interest in a transaction, to which
                      the Company, or a Company Subsidiary is a party, where the
                      amount involved in the transaction exceeds $60,000; and

                  (iv)is not an owner, executive officer or beneficial owner of
                      in excess of 10% of a business or professional entity:

                                       -3-
<PAGE>

1.       which during the Company's last fiscal year has made, or currently
         proposes to make, payments to the Company, or a Company Subsidiary, for
         property or services in excess of 5% of the Company's or its
         Subsidiaries gross revenues for its last full fiscal year;

         A.       which during the Company's last fiscal year has received, or
                  currently proposes to receive, payments from the Company, or a
                  Company Subsidiary, for property or services in excess of 5%
                  of the Company's or its Subsidiaries gross revenues for its
                  last full fiscal year; or

         B.       to which, at the end of the Company's last fiscal year, the
                  Company owed a debt in excess of 5% of the Company's
                  consolidated assets;

         (v)      during the Company's last fiscal year, has not been a member
                  of, or counsel to, a law firm that the Company retained or
                  currently proposes to retain;

         (vi)     during the Company's last fiscal year, has not been a partner
                  or executive officer of any investment banking firm that has
                  performed services for the Company, or is currently proposed
                  to perform services for the Company, other than as a
                  participating underwriter in a syndicate.

         a.       "NSO" means "Non-employee Stock Option" which is any option
                  granted under this Plan which fails to qualify as an ESO
                  because is it granted to someone other than a director,
                  officer or employee of the Company;

                                       -4-
<PAGE>

         b.       "Option" means an option granted pursuant to the Plan
                  entitling the option holder to acquire shares of Stock issued
                  by the Company;

         c.       "Option Agreement" means an agreement between the Company and
                  an Optionee, in form and substance satisfactory to the
                  Committee in its sole discretion, consistent with the Plan;

         d.       "Option Price" with respect to any particular Option means the
                  exercise price at which the Optionee may acquire each share of
                  the Option Stock called for under such Option;

         e.       "Option Stock" means Stock issued or issuable by the Company
                  pursuant to the valid exercise of an Option;

         f.       "Optionee" means an Eligible Participant to whom Options are
                  granted hereunder, and any transferee thereof pursuant to a
                  transfer authorized under the Plan;

         g.       "Plan" means this 1999 Stock Option Incentive Plan of the
                  Company;

         h.       "Stock" means shares of the Company's Common Stock, $.01 par
                  value;

         i.       "Subsidiary" means any company in which the Company has more
                  than a 30% ownership interest;

         j.       "Transfer," with respect to and Option or Option Stock,
                  includes, without limitation, a voluntary or involuntary sale,
                  assignment,

                                       -5-
<PAGE>

                  transfer, conveyance, pledge, hypothecation, encumbrance,
                  disposal, loan, gift attachment or levy of such Option or
                  Option Stock, including without limitation an assignment for
                  the benefit of creditors of the Optionee, a transfer by
                  operation of law, such as a transfer by will or under the laws
                  of descent and distribution, an execution of judgment against
                  the Option Stock or the acquisition or record or beneficial
                  ownership thereof by a lender or creditor, a transfer pursuant
                  to any decree of divorce, dissolution or separate maintenance,
                  any property settlement, any separation agreement or any other
                  agreement with a spouse (except for estate planing purposes)
                  under which a part or all of the shares of Option Stock are
                  transferred or awarded to the spouse of the Optionee or are
                  required to be sold; or a transfer resulting from the filing
                  by the Optionee of a petition for relief, or the filing of an
                  involuntary petition against such Optionee, under the
                  bankruptcy laws of the United States or of any other nation.

2. ELIGIBILITY. The Company may grant Options under this Plan only to persons
who are Eligible Participants as of the time of such grant. Subject to the
provisions of sections 4(d), 5 and 6 hereof, there is no limitation on the
number of Options that may be granted to an Eligible Participant.

3. ADMINISTRATION.

         a.       COMMITTEE. The Committee will administer the Plan as set forth
                  herein. No grant of Options, except for Formula Options, shall
                  be made under the Plan without approval by the Committee.

                                       -6-

<PAGE>

         b.       COMPOSITION OF THE COMMITTEE. The Committee shall be composed
                  of two or more Non-Employee Disinterested Directors.

         c.       AUTHORITY AND DISCRETION OF COMMITTEE. The Committee will have
                  full and final authority in its discretion, at any time and
                  from time to time, subject only to the express terms,
                  conditions and other provisions of the Company's certificate
                  of incorporation and by-laws, the Plan, Delaware law and the
                  specific limitations on such discretion set forth herein:

                  i.  to select and approve the persons who will be granted
                      Options under this Plan from among the Eligible
                      Participants, and to grant to any person so selected one
                      or more Options to purchase such number of shares of
                      Option Stock as the Committee may determine;

                  ii. to determine the period or periods of time during which
                      Options may be exercised, the Option Price and the
                      duration of such Options, and other matters to be
                      determined by the Committee in connection with specific
                      Option grants and Options Agreements as specified under
                      this Plan;

                  iii. to interpret this Plan, to prescribe, amend and rescind
                      rules and regulations relating to this Plan, and to make
                      all other determinations necessary or advisable for the
                      operation and administration of this Plan; and

                                       -7-
<PAGE>

         d.       LIMITATION ON AUTHORITY. Notwithstanding the foregoing, or any
                  other provision of this Plan, the Committee will have no
                  authority;

                  i.  to grant Options to any of its members, whether or not
                      approved by the Board; and

                  ii. to determine any matters, or exercise any discretion, in
                      connection with the Formula Options under section 4(m)
                      hereof.

         e.       DESIGNATION OF OPTIONS. Except as otherwise granted hereunder,
                  the Committee will designate any Option granted hereunder
                  either as an ESO or an NSO. ESO's may only be granted to
                  persons who are directors, officers or employees of the
                  Company and/or its Subsidiaries.

         f.       OPTION AGREEMENTS. Options will be deemed granted hereunder
                  only upon the execution and delivery of an Option Agreement by
                  the Optionee and a duly authorized officer of the Company in
                  the form annexed hereto as Exhibit A. Options will not be
                  deemed granted hereunder merely upon the authorization of such
                  grant by the Committee.

4.       SHARES RESERVED FOR OPTIONS.

         a.       OPTION POOL. The aggregate number of shares of Option Stock
                  that may be issued pursuant to the exercise of Options granted
                  under the Plan will not exceed three million (3,000,000) (the
                  "Option Pool").(1)

 --------

(1) As at May 1, 1999 and before giving any effect to any stock split, reserve
split, recapitalization, combination or reclassification.

                                       -8-
<PAGE>

         b.       ADJUSTMENTS UPON CHANGES IN STOCK. In the event of any change
                  in the outstanding Stock of the Company as a result of a stock
                  split, reverse stock split, stock dividend, recapitalization,
                  combination or reclassification, appropriate proportionate
                  adjustment will be made in: (i) the aggregate number of shares
                  of Option Stock in the Option Pool; (ii) the Option Price and
                  the number of shares of Option Stock called for in each
                  outstanding Option granted hereunder; and (iii) other rights
                  and matters determined on a per share basis under the Plan or
                  any Option Agreement hereunder. No such adjustment will be
                  required by reason of the issuance or sale by the company for
                  cash or other consideration of additional shares of its Stock
                  or securities convertible into or exchangeable for shares of
                  its Stock.

5. TERMS OF STOCK OPTION AGREEMENTS. Each Option granted pursuant to this Plan
will be evidence by an Option Agreement. Without limiting the foregoing, each
Option Agreement (unless otherwise stated therein) will be deemed to include the
following terms and conditions:

         a.       VESTING PERIODS. Except as otherwise provided herein, each
                  Option Agreement may specify the period of periods of time
                  within which each Option or portion thereof will first become
                  exercisable (the "Vesting Period").

                  i.  Unless the Option Agreement, in the discretion of the
                      Committee, provides otherwise, for Eligible Participants
                      who are not directors, officers or employees of the
                      Company or any subsidiary of the Company, any options
                      granted under the Plan shall have no Vesting Period and
                      shall be immediately exercisable.

                                       -9-
<PAGE>

                  ii. For Eligible Participants that are directors, officers or
                      employees of the Company or its Subsidiaries, the Option
                      will become exercisable, as to twenty percent (20%) of the
                      Option Stock on each of the first, second, third, fourth
                      and fifth anniversaries of such date of granting.
                      Therefore, the Option will only become fully exercisable,
                      subject to the Optionee's remaining an Eligible
                      Participant, on the fifth anniversary of granting.

b.       EXERCISE OF THE OPTION.

                  i.  MECHANICS AND NOTICE. An Option may be exercised to the
                      extent exercisable by giving written notice of exercise to
                      the Company, specifying the number of full shares of
                      Option Stock to be purchased and accompanied by full
                      payment of the Option Price; and (2) by giving assurances
                      satisfactory to the Company that the shares of Option
                      Stock to be purchased for investment and not with a view
                      to resale in connection with any distribution of such
                      shares in violation of the 1933 Act; provided, however,
                      that in the event the Option Stock called for under the
                      Option is registered under the 1933 Act, or in the event
                      resale of such Option Stock without such registration
                      would otherwise be permissible, this second condition will
                      be inoperative if, in the opinion of counsel for the
                      Company, such condition is not required under the 1933
                      Act, or any other applicable law, regulation or rule of
                      any governmental agency.

                                      -10-
<PAGE>

         c.       OPTION PRICE. Each Option Agreement will specify the Option
                  Price with respect to the exercise of Option Stock thereunder.
                  The Option Price may not be less than Fair Market Value.

         d.       PAYMENT OF THE OPTION PRICE. The Option Price will be payable
                  to the Company in United States dollars in cash or by check
                  or, such other legal consideration as may be approved by the
                  Committee in its discretion.

         e.       TERMINATION OF THE OPTION. Except as otherwise provided
                  herein, each Option Agreement will specify the period of time,
                  to be fixed by the Committee in its discretion, during which
                  the Option granted therein will be exercisable, not to exceed
                  ten years from the date of grant in the case of an ESO (the
                  "Option Period"); provided that the Option Period will not
                  exceed five years from the date of grant in the case of an ESO
                  granted to a 10% Stockholder.

                  i.  TERMINATION OF EMPLOYMENT. Any Option granted to a
                      director, officer or employee under the Plan shall
                      terminate (1) ninety days after the date that the Optionee
                      ceases to be an Eligible Participant for any reason, other
                      than by reason of death or disability or (2) twelve months
                      after the date that the Optionee ceases to be an Eligible
                      Participant by reason of such person's death or
                      disability.

                  ii. MERGER OR SALE. In the event of a sale or all or
                      substantially all of the assets of the Company, or a
                      merger or consolidation or

                                      -11-
<PAGE>

                      other reorganization in which the Company is not the
                      surviving corporation, or in which the Company becomes a
                      subsidiary of another corporation (any of the foregoing
                      events, a "Corporation Transaction"), then notwithstanding
                      anything else herein, the right to exercise all then
                      outstanding Options will vest immediately prior to such
                      Corporation Transaction and will terminate immediately
                      after such Corporate Transaction; provided, however, that
                      if the Board, in its sole discretion, determines that such
                      immediate vesting of the right to exercise outstanding
                      Options is not in the best interests of the Company, then
                      the successor corporation must agree to assume the
                      outstanding Options or substitute therefor comparable
                      options of such successor corporation or a parent or
                      subsidiary of such successor corporation.

                  f.  OPTIONS NONTRANSFERABLE. No Option will be transferable by
                      the Optionee otherwise than by will or the laws of descent
                      and distribution.

                  g.  QUALIFICATION OF STOCK. If the Board determines that the
                      listing, registration or qualification of the shares of
                      Option Stock is necessary on any securities exchange or
                      under any state or federal law, or the consent or approval
                      of any governmental regulatory authority, is necessary or
                      desirable as a condition of the exercise of an Option, the
                      Option may not be exercised, in whole or in part, unless
                      and until such listing, registration, qualification,
                      consent or approval is effected or obtained free of any
                      conditions not acceptable to the Board.

                                      -12-
<PAGE>

                  h.  ADDITIONAL RESTRICTIONS ON TRANSFER. By accepting Options
                      and/or Option Stock under this Plan, the Optionee will be
                      deemed to represent, warrant and agree as follows:

                      i. SECURITIES ACT OF 1933. The Optionee understands that
                         the shares of Option Stock have not been registered
                         under the 1933 Act, and that such shares are not freely
                         tradeable and must be held indefinitely unless such
                         shares are either registered under the 1933 Act or an
                         exemption from such registration is available. The
                         Optionee understands that the Company is under no
                         obligation to register the shares of Option Stock.

                      ii. OTHER APPLICABLE LAWS. The Optionee further
                         understands that Transfer of the Option Stock requires
                         full compliance with the provisions of all applicable
                         laws.

                      iii. INVESTMENT INTENT. Unless a registration statement is
                         in effect with respect to the sale of Option Stock
                         obtained through exercise of Options granted hereunder:
                         (1) Upon exercise of any Option, the Optionee will
                         purchase the Option Stock for his or her own account
                         and not with a view to distribution within the meaning
                         of the 1933 Act, other than as may be effected in
                         compliance with the 1933 Act and the rules and
                         regulations promulgated thereunder and (2) no one else
                         will have any beneficial interest in the Option Stock.

                                      -13-
<PAGE>

                  i.  COMPLIANCE WITH LAW. Notwithstanding any other provision
                      of this Plan, Options may be granted pursuant to the Plan,
                      and Option Stock may be issued pursuant to the exercise
                      thereof by an Optionee, only after there has been
                      compliance with all applicable federal and state
                      securities laws, and all of the same will be subject to
                      this overriding condition. The Company will not be
                      required to register or qualify Option Stock with the
                      Securities and Exchange Commission or any state agency.

                  j.  STOCK CERTIFICATES. Certificates representing the Option
                      Stock issued pursuant to the exercise of Options will bear
                      all legends required by law and necessary to effectuate
                      this Plan's provisions. The Company may place a "stop
                      transfer" order against shares of the Option Stock until
                      all restrictions and conditions set forth in this Plan and
                      in the legends referred to in this section 6(j) have been
                      complied with.

                  k.  NOTICES. Any notice to be given to the Company under the
                      terms of an Option Agreement will be addressed to the
                      Company at its principal executive office, Attention:
                      Corporate Secretary, or at such other address as the
                      Company may designate in writing. Any notice to be given
                      to an Optionee will be addressed to the Optionee at the
                      address provided to the Company by the Optionee. Any such
                      notice will be deemed to have been duly given if and when
                      enclosed in a properly sealed envelope, addressed as
                      aforesaid, registered and deposited, postage and registry
                      fee prepaid, in a post office or branch post office
                      regularly maintained by the United States or Canadian
                      Government.

                                      -14-
<PAGE>

                  l.  OTHER PROVISIONS. The Option Agreement may contain such
                      other terms, provisions and conditions, including such
                      special forfeiture conditions, rights of repurchase,
                      rights of first refusal and other restrictions on Transfer
                      of Option Stock issued upon exercise of any Options
                      granted hereunder, not inconsistent with the Plan, as may
                      be determined by the Committee in its sole discretion.

                  m.  FORMULA OPTIONS. On the date on which the Board appoints a
                      director to the Committee for the first time, such
                      director will be granted a Formula Option to purchase __
                      shares of Stock. Immediately after the completion of each
                      annual meeting of the stockholders of the Company, each
                      member of the Committee will be awarded a Formula Option
                      to purchase __ shares of Stock. Formula Options will have
                      an Option Price equal to the Fair Market Value of the
                      Stock as of the date of such grant. Except as otherwise
                      specifically provided in this section 4(m), the terms of
                      this Plan, including the vesting provisions of section
                      4(a), will apply to all Formula Options granted pursuant
                      to this section 4(m).

6. PROCEEDS FROM SALE OF STOCK. Cash proceeds from the sale of shares of Option
Stock will be added to the general funds of the Company and will be used for
general corporate purposes.

7. MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. Subject to the terms and
conditions and within the limitations of the Plan, and except with respect to
Formula Options, the Committee may modify, extend or renew outstanding Options
granted under this Plan, or accept the surrender of outstanding

                                      -15-
<PAGE>

Options (to the extent not theretofore exercised) and authorize the granting of
new Options in substitution therefor (to the extent not theretofore exercised).
Notwithstanding the foregoing, however, no modification of any Option will,
without the consent of the holder of the Option, alter or impair any rights or
obligations under any Option theretofore granted under this Plan.

8. AMENDMENT AND DISCONTINUANCE. The Board may amend, suspend or discontinue
this Plan at any time or from time to time; provided that:

         a.       no such action may, without the approval of the stockholders
                  of the Company, materially increase (other than by reason of
                  an adjustment pursuant to section 5(b) hereof) the maximum
                  aggregate number of shares of Option Stock in the Option Pool
                  that may be issued under Options granted pursuant to this Plan
                  or materially increase the benefits accruing to Plan
                  participants or materially modify eligibility requirements for
                  the participants, and

         b.       the provisions of section 4(m) hereof may not be amended more
                  often than once during any six (6) month period, and

         c.       no such action may alter or impair any Option previously
                  granted under this Plan without the consent of the holder of
                  such Option.

9. PLAN COMPLIANCE WITH RULE 16B-3. With respect to persons subject to Section
16 of the Securities Exchange Act of 1934, transactions under this plan are
intended to comply with all applicable conditions of Rule 16b-3 or its
successors under the 1934 Act. To the extent any provision of the Plan or action
by the Plan administrators fails so to comply, it shall be deemed

                                      -16-
<PAGE>

null and void, to the extent permitted by law and deemed advisable by the Plan
administrators. In accordance with Rule 16b-3, a grant of options to a
beneficial owner of more than 10% of the Company's Common Stock, who is not an
officer or director of the Company, will not be exempt under Rule 16b-3.

10. COPIES OF PLAN. A copy of this Plan will be delivered to each Optionee at or
before the time he or she executes an Option Agreement.

         Date Plan Adopted by Board of Directors: March 29, 1999

         Date Plan Approved by Stockholders: August 31, 1999.

                                      -17-
<PAGE>

Exhibit (10)

          TENGTU CULTURE & EDUCATION ELECTRONICS DEVELOPMENT CO., LTD;
           TENGTU ELECTRONIC PUBLISHING HOUSE & MICROSOFT (CHINA) LTD.
         ESTABLISHMENT OF STRATEGIC COOPERATION PARTNERSHIP RELATIONSHIP
                         COOPERATION AGREEMENT FRAMEWORK

Party A:          Tengtu Culture & Education Electronics Development Co., Ltd.
                  Tengtu United Electronics Development Co., Ltd.
                  Tengtu Electronic Publishing House

Party B:          Microsoft (China) Co., Ltd.

Tengtu International Electronics Developing Co., Ltd.

1.       Both parties agree to establish strategic cooperation partnership
         relationships on the Chinese elementary/secondary educational market.

2.       Party A is to consult with the Ministry of Education to become the
         state appointed partner for Microsoft products and overall technical
         service. Party A will positively develop market business.

3.       In order to support the Chinese education business and the promotion of
         Party A's overall "Application Solution Scheme for Information-Based
         Education," Party B will offer its products at specially favored
         prices.

4.       Both parties agree to focus cooperation on application problems and
         products. Party B promises to provide Party A with technical and
         environmental support on the development of application systems based
         on the former operating system platform. This will technically support
         Party A to complete the state class Torch projects (General
         Elementary/Secondary School Campus Network and Digital
         Elementary/Secondary School Library) with high quality.

5.       In order to further explore and establish information-based
         elementary/secondary education market and create ongoing development
         foundation, Party B will provide product for the "Overall Application
         Solution Scheme for Information-Based Education." Party A and Party B
         will positively support the Ministry of Education and relevant
         organizations on the establishment of the "China Software Research and
         Testing Centre for Information-Based Elementary/Secondary Education."

6.       Both Parties agree to promote the "Overall Application Solution Scheme"
         items and jointly formulate the market promotion plan. Party A will be
         responsible for market promotion and product sales. Party B will
         provide certain funds support for market promotion.

7.       Party B will provide support to Party A, the Ministry of Education and
         educational organizations of various provinces on the expiration of the
         "21st Century Training Center for Information-Based
         Elementary/Secondary Education" and the "General Information-Based
         Education Overall Application Solution Scheme" items.

                                      -18-
<PAGE>

8.       Party B will authorize Party A to use Party B's materials (books,
         software training material, lecture material, promotion materials,
         etc.) To compile and distribute associated materials for the "Overall
         Application Solution Scheme" item.

9.       Both parties agree to carry out the various tasks associated the above
         agreement as soon as possible and come up with a business plan which
         includes:

                  a.       Technical Development Cooperation Plan;

                  b.       Marketing & Business Plan;

                  c.       Technical Services Plan;

                  d.       Publication Cooperation Plan.

10.      Regarding promotion of this cooperation, both Parties shall consult and
         confirm with each other.

11.      Both Parties shall understand this agreement is only a framework.
         Further substantial implementation plans are subject to signing of a
         separate agreement.

Representative of Party A                        Representative of Party B

--------------------------                       ----------------------------
8/23/99                                          8/23/99

                                      -19-

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