Document:

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                                                                    EXHIBIT 10.2

                     ACKNOWLEDGMENT, WAIVER AND AMENDMENT #8
                                       TO
                               FINANCING AGREEMENT

         This ACKNOWLEDGMENT, WAIVER AND AMENDMENT #8 ("Amendment") TO THE
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT is made as of September 27, 2002
by and between Pemstar Inc., duly organized under the laws of the State of
Minnesota ("Customer"), Turtle Mountain Corporation, duly organized under the
laws of the State of North Dakota ("Turtle Mountain") and Pemstar Pacific
Consultants Inc., duly organized under the laws of the State of California
("Pemstar Pacific Consultants") (Customer, Turtle Mountain and Pemstar Pacific
Consultants, collectively, the "Credit Parties", individually, a "Credit
Party"), and IBM Credit Corporation, a Delaware corporation ("IBM Credit").

                                    RECITALS:

         WHEREAS, the Credit Parties and IBM Credit have entered into that
certain Amended and Restated Revolving Credit Agreement dated as of June 29,
2001 (as amended, supplemented or otherwise modified from time to time, the
"Agreement");

         WHEREAS, the Credit Parties are in default (as more specifically
explained in Section 2 hereof);

         WHEREAS, the Credit Parties are requesting that IBM Credit waive
certain defaults; and

         WHEREAS, IBM Credit is willing to waive such defaults subject to the
terms and conditions set forth below.

                                    AGREEMENT

         NOW THEREFORE, in consideration of the premises set forth herein, and
for other good and valuable consideration, the value and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:

Section 1. Definitions. All capitalized terms not otherwise defined herein shall
have the respective meanings set forth in the Agreement.

Section 2. Acknowledgment.

A. The Credit Parties acknowledge that the financial covenants set forth in
Attachment A to Agreement are applicable to the financial results of the Credit
Parties for the fiscal month ending August 31, 2002 (unless otherwise indicated
below), and the Credit Parties were required to maintain such financial
covenants at all times. The Credit Parties further acknowledge that their actual
attainment was as follows:

<TABLE>
<CAPTION>
           Covenant                   Covenant Requirement                    Covenant Actual for the monthly
           --------                   --------------------                    -------------------------------
                                                                              period ending August 31, 2002
                                                                              -----------------------------
  <S>                                 <C>                                     <C>
  (a)      Net Profit after Tax       Equal to or Greater than (.25)                       N/A
           to Revenue                 percent quarterly for the fiscal
                                      quarter ending September 30, 2002

                                      Equal to or Greater than .75 percent
                                      quarterly for the fiscal year ending                 N/A
                                      December 30, 2003

                                      Equal to or Greater than .25 percent
                                      quarterly for the fiscal                             N/A
</TABLE>

<PAGE>

<TABLE>
  <S>                                 <C>                                         <C>       <C>
                                      quarter ending March 31, 2003

                                      Equal to or Greater than .75 percent
                                      quarterly for the fiscal quarter
                                      ending June 30, 2003                                    N/A
                                      and all fiscal quarters thereafter
  (b)      Net Profit to Tax          Equal to or Greater than (3.25)                         N/A
           After revenue              percent for the fiscal year ending
           (Annual)                   March 31, 2003 and 1.25 percent for
                                      all fiscal year ends thereafter
  (c)      Total Liabilities to       Greater than Zero and                                 1.41:1.0
           Tangible Net Worth         Equal to or less than 1.6:1.0
  (d)      Current Assets to          Greater than 2.0:1.0                        1.98:1.0
           Current Liabilities
  (e)      Fixed Charge Coverage      Equal to or Greater than 1.00:1.0                       N/A
           Ratio                      for each fiscal month beginning
                                      December 31, 2002, including the fiscal
                                      months ending January 31, 2003 and
                                      February 28, 2003, and 1.30:1.0 for each
                                      fiscal month beginning March 31, 2003 and
                                      for all fiscal months thereafter
  (f)      Maximum Capital            Less than or equal to                                   N/A
           Expenditures               $40,000,000 for the fiscal year
                                      ending March 31, 2002 and $18,000,000 for
                                      the fiscal year ending March 31, 2003 and
                                      all fiscal year ends thereafter
  (g)      Net Profit After           Equal to or greater than 1.5 percent                    N/A
           Tax to Revenue             for the fiscal quarter ending
           (U.S. Credit Parties       December 31, 2002 and all fiscal
           operations only)           quarters thereafter
  (h)      EBITDA                     Equal to or Greater than                                N/A
           (U.S. Credit Parties       ($19,000,000) for the six months
           operations only)           ending June 30, 2002 and
                                      $5,500,000 for all fiscal quarters
                                      thereafter
  (i)      EBITDA                     Equal to or Greater than                                N/A
                                      ($23,000,000) for the six
                                      months ending June 30, 2002 and
                                      $6,000,000 for all fiscal quarters
                                      thereafter
</TABLE>

B. The Credit Parties acknowledge that the following default occurred:

<TABLE>
<CAPTION>
           Term                                     Requirement                      Default
           ----                                     -----------                      -------
  <S>                                               <C>                              <C>
  (a)      Credit Parties failed to comply with     As required under Section        Credit Parties exceeded the
           the limits on Investments and Equity     7.16. (F) of the Agreement       limit of $ 1,500,000 under
           Investments as                                                            Section 7.16 (F) ( )
</TABLE>

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<TABLE>
 <S>                                            <C>                                         <C>
           described in Section
           7.16(f) of the Agreement                                                         related to $10,500,000
                                                                                            investment in Pemstar of
                                                                                            Mexico.
</TABLE>

Section 3.   Waivers to Agreement. Subject to the terms and conditions set forth
herein including, without limitation, Section 5 hereof, IBM Credit hereby waives
the defaults of the Credit Parties with the terms of the Agreement to the extent
such defaults are set forth in Section 2 hereof and for the periods indicated
above. The waiver shall not be effective until the conditions to effectiveness
set forth in Section 5 have been fulfilled to IBM Credit's satisfaction in its
sole discretion and shall not be deemed a waiver of compliance with these
Sections after the date hereof. The waiver set forth herein shall not apply to
any other or subsequent failures to comply with the Agreement or this Amendment.

Section 4.   Amendment.

The Agreement is hereby amended as follows:

         A. Attachment A to the Agreement is hereby amended by deleting such
Attachment A in its entirety and substituting, in lieu thereof, the Attachment A
attached hereto. Such new Attachment A shall be effective as of the date
specified in the new Attachment A. The changes contained in the new Attachment A
include, without limitation, the following:

1.       Section I of Attachment A is amended in its entirety to read as
follows:

"I.   Fees, Rates and Repayment Terms:

         (A) Credit Facility:
             Revolving A: Sixty-five Million Dollars ($65,000000) Revolving
             Credit Facility
         (B) Borrowing Base:
             (i) (a) 90% of the amount of each Credit Party's Eligible Accounts
             from International Business Machines Corp. ("IBM") or its domestic
             subsidiaries as account debtor pursuant to agreements between such
             Credit Party and IBM in form and substance satisfactory to IBM
             Credit as of the date of determination as reflected in the
             Customer's most recent Collateral Management Report;
             (b) 90% of the amount of each Credit Party's accounts from IBM's
             foreign subsidiaries as account debtor as of the date of
             determination as reflected in the Customer's most recent Collateral
             Management Report but in no event shall the aggregate amount
             permitted under this Section IB(i)(b) exceed One Million Dollars
             ($1,000,000);

             Notwithstanding Section 3.1 (A) of the Agreement, for purposes of
             this Section (i), Accounts from IBM that allow for payment to be
             made within 60 days shall be included for purposes of calculating
             the Borrowing Base provided that such Accounts are on standard
             terms and otherwise satisfy the criteria for eligibility in IBM
             Credit's sole discretion.

             (ii) 80% of the amount of each Credit Party's Eligible Accounts
             from Honeywell Inc. ("Honeywell"), Minnesota Mining & Manufacturing
             Company ("3M"), and Applied Materials, Inc. ("Applied Materials")
             as account debtor, provided such account debtors remain investment
             grade, in IBM Credit's sole discretion, and pursuant to agreements
             between such Credit Party and such account debtor, in form and
             substance satisfactory to IBM Credit as of the date of
             determination as reflected in the Customer's most recent Collateral
             Management Report;

             Notwithstanding Section 3.1 (A) of the Agreement, for purposes of
             this Section (ii), Accounts from Honeywell that allow for payment
             to be made within 45 days shall be included for purposes of
             calculating the Borrowing Base provided that such Accounts from
             Honeywell are on standard terms and otherwise satisfy the criteria
             for eligibility in IBM Credit's sole discretion.

             (iii) 80% of the amount of each Credit Party's other Eligible
             Accounts, other than Concentration Accounts, as of the date of
             determination as reflected in the Customer's

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             most recent Collateral Management Report provided, however, IBM
             Credit has a first priority security interest in such Eligible
             Account;

             (iv) a percentage, determined from time to time by IBM Credit in
             its sole discretion, of the amount of Customer's Concentration
             Accounts for a specific Concentration Account Debtor as of the date
             of determination as reflected in the Customer's most recent
             Collateral Management Report; unless otherwise notified by IBM
             Credit, in writing, the percentage for Concentration Accounts for a
             specific Concentration Account Debtor shall be the same as the
             percentage set forth in paragraph (ii) of the Borrowing Base;

             The following subsections (v), (vi), (vii) and (viii) specify
             valuation rates for Eligible Finished Goods Inventory, Eligible
             Parts Inventory and Eligible Inventory (as such terms are defined
             below) for the following Credit Parties' at the specified
             locations:

             Pemstar Inc. = Rochester, MN
             Pemstar Inc. = San Jose, CA
             Pemstar Inc. = Taunton, MA
             Turtle Mountain Corporation = Dunseith, ND

             (v) Rochester, MN = 90, San Jose, CA = 0%, Taunton, MA = 0%,
             Dunseith, ND = 95% of the lower of (x) book value or (y) fair
             market value of each Credit Party's Eligible Finished Goods
             Inventory destined for IBM less than 180 days old;

             (vi) Rochester, MN = 80%, San Jose, CA = 0%, Taunton, MA = 0%,
             Dunseith, ND = 78% of the lower of (x) book value or (y) fair
             market value of each Credit Party's Eligible Parts Inventory
             destined for IBM less than 180 days old;

             (vii) Rochester, MN = 61%, San Jose, CA = 0%, Taunton, MA = 0%,
             Dunseith, ND = 75% of the lower of (x) book value or (y) fair
             market value of each Credit Party's Eligible Inventory destined for
             Honeywell, 3M, and Applied Materials less than 180 days old;

             (viii) Rochester, MN (other than Eligible Finished Goods Inventory,
             Eligible Parts Inventory and Eligible Inventory destined for
             Celestica) = 49%, Rochester, MN (for Eligible Finished Goods
             Inventory, Eligible Parts Inventory and Eligible Inventory destined
             for Celestica) = 44%, San Jose, CA = 41%, Taunton, MA = 55%,
             Dunseith, ND = 44% of the lower of (x) book value or (y) fair
             market value of each Credit Party's other Eligible Inventory less
             than 180 days old provided, however, IBM Credit has a first
             priority security interest in such Eligible Inventory.

             Eligible Finished Goods Inventory shall mean finished goods
             inventory in salable condition less than 180 days old, owned by a
             Credit Party free and clear of any Liens (other than Liens pursuant
             to this Agreement),_ and designated and identified as product to be
             sold to IBM as evidenced by (i) non-cancellable purchase orders
             from IBM or (ii) a non-cancellable written agreement that IBM will
             purchase such inventory, in each case, in form and substance
             satisfactory to IBM Credit.

             Eligible Parts Inventory shall mean parts inventory and floor stock
             raw materials in good condition less than 180 days old, owned by a
             Credit Party free and clear of any Liens (other than Liens pursuant
             to this Agreement), and designated and identified as parts to be
             used to manufacture product (the Eligible Finished Goods Inventory)
             to be sold to IBM as evidenced by (i) non-cancellable purchase
             orders from IBM to such Credit Party or (ii) a non-cancellable
             written agreement that IBM will purchase such inventory, in each
             case, in form and substance satisfactory to IBM Credit.

             Eligible Inventory shall mean raw materials, floor stock raw
             materials and finished goods inventory less than 180 days old owned
             by a Credit Party free and clear of any Liens (other than Liens
             pursuant to this Agreement) designated and identified by the
             Customer in its periodic collateral report or borrowing request to
             IBM Credit as inventory applicable to product sold, or to be
             manufactured and sold, by a Credit Party to an end user pursuant to
             non-cancellable purchase orders or other written agreements binding
             such end user to

                                       4

<PAGE>

             purchase such product, in each case, in form and substance
             satisfactory to IBM Credit.

             Notwithstanding the foregoing, IBM Credit may consider Eligible
             Finished Goods Inventory, Eligible Parts Inventory and/or Eligible
             Inventory in the Borrowing Base greater than 180 days old provided
             that (i) a purchase order is in place between the end-user and the
             Credit Party, in form and substance satisfactory to IBM Credit or
             (ii) Credit Party provides evidence to IBM Credit, in form and
             substance satisfactory to IBM Credit, that the end-user is paying
             all carrying costs associated with such Eligible Finished Goods,
             Eligible Parts Inventory and/or Eligible Inventory. Under no
             circumstances will Eligible Finished Goods, Eligible parts
             Inventory or Eligible Inventory be considered in the Borrowing Base
             if older than 365 days.

             IBM Credit will consider Eligible Finished Goods Inventory,
             Eligible Parts Inventory and/or Eligible Inventory to be ineligible
             if the end-user customer with respect to such Eligible Finished
             Goods Inventory, Eligible Parts Inventory and/or Eligible Inventory
             becomes delinquent in its payments of accounts receivable to the
             Credit Parties and such accounts receivable owing from such account
             debtor are not eligible pursuant to the terms of Section 3.1 (C) of
             the Agreement.

             Notwithstanding the foregoing, assets of Pemstar Pacific
             Consultants shall not be included for the purposes of calculating
             the Borrowing Base. For purposes of calculating the Borrowing Base,
             Pemstar Pacific Consultants shall not be deemed a Credit Party.

             In addition, to the extent IBM Credit does not have first priority
             security interest in any Eligible Accounts, Eligible Finished Goods
             Inventory, Eligible Parts Inventory and Eligible Inventory such
             item will not be included for purposes of calculating the Borrowing
             Base.

      (C)    Collateral Insurance Amount: Seventy Million Dollars ($70,000,000).
      (D)    Applicable Margin: Prime Rate plus 3.50%.

      (E)    Delinquency Fee Rate:         Prime Rate plus 6.500%.
      (F)    Shortfall Transaction Fee:    Shortfall Amount multiplied by 0.30%.
      (G)    Other Charges:
             (i) Unused Line Fee: 0.375% per annum on the daily average unused
             portion of the Credit Line for each day from the closing date of
             the Agreement and shall be computed on the basis of a 360 day year
             and payable monthly in arrears and upon the maturity or termination
             of the Agreement.

             (ii) Prepayment Fee: A prepayment premium, payable to IBM Credit in
             the event that the Customer terminates the Credit Line prior to
             Termination Date, in an amount equal to the amount of the Credit
             Line in effect as of the date of notice of termination or date of
             default, multiplied by one half of one percent (0.50%).

             (iii) Waiver Fee of Sixty-five Thousand Dollars ($65,000.00)."

2.    Section III. Financial Covenants of Attachment A immediately after the
definitions is amended and restated as follows:

"Customer will be required to maintain the following financial ratios,
percentages and amounts as of the last day of the fiscal period under review by
IBM Credit:

On a consolidated basis:

      Covenant                    Covenant Requirement
      --------                    --------------------
(a)   Net Profit after Tax        ($1,700,000) for the fiscal month ending
      to Revenue (on a monthly    September 30, 2002
      basis)                      ($2,800,000) for the fiscal month ending
                                  October 30, 2002
                                  ($3,600,000) for the two fiscal month period
                                  ending November 30, 2002

                                       5

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                                       ($3,700,000) for the fiscal quarter
                                       ending December 31, 2002
                                       ($2,100,000) for the fiscal month ending
                                       January 31, 2003
                                       ($2,600,000) for the two fiscal month
                                       period ending February 28, 2003
                                       ($2,000,000) for the fiscal month ending
                                       March 31, 2003, and Equal to or greater
                                       than .75 percent of Revenues quarterly
                                       for the fiscal quarter ending June 30,
                                       2003 and at all times thereafter
      (b)   Net Profit After Tax       Equal to or greater than 1.25 percent at
            to Revenue (on an annual   fiscal year ending March 31, 2004, and
            basis)                     for all fiscal year ends thereafter
      (c)   Total Liabilities to       Greater than Zero
            Tangible Net Worth         and Equal to or Less than 1.6:1.0
      (d)   Current Assets to          Greater than 1.70:1.0 for the fiscal
            Current Liabilities        months September and October 2002,
                                       greater than 1.60:1.0 for the fiscal
                                       months November and December 2002,
                                       greater than 1.50:1.0 for the fiscal
                                       months January, February and March 2003,
                                       and 2.0:1.0 at all times thereafter
      (e)   Maximum Capital            Less than or equal to $18,000,000 for the
            Expenditures               fiscal year ending March 31, 2003 and all
                                       fiscal quarters thereafter provided,
                                       however, no Credit Party may make any
                                       Capital Expenditure in excess of
                                       $1,000,000 without the prior written
                                       consent of IBM Credit.
      (f)   Net Profit After           Net loss not greater than $3,000,000 for
            Tax to Revenue             the month ending September 30, 2002
            (U.S. Credit Parties       Net loss not greater than $3,400,000 for
            operations only)           the month ending October 31, 2002
                                       Net loss not greater than $5,100,000 for
                                       the two month period ending November 30,
                                       2002;
                                       Net loss not greater than $6,200,00 for
                                       the three month period ending December
                                       31, 2002
                                       Net loss not greater than $2,700,000 for
                                       the month ending January 31, 2003
                                       Net loss not greater than $3,800,000 for
                                       the two month period ending February 28,
                                       2003
                                       Net loss not greater than $4,300,000 for
                                       the three month period ending March 31,
                                       2003; Equal to or Greater than 1.5% of
                                       Revenues for each fiscal quarter.
                                       thereafter beginning at June 30, 2003
      (g)   EBITDA                     Equal to or less than ($1,300,000) for
            (U.S. Credit Parties       the month ending September 30, 2002 Equal
            operations only)           to or less than ($1,800,000) for the
                                       month ending October 31, 2002 Equal to or
                                       less than ($1,800,000) for the two months
                                       ended November 30, 2002;
                                       Equal to or less than ($1,300,000) for
                                       the three months ending December 31, 2002
                                       Equal to or less than ($1,200,000) for
                                       the month ending January 31, 2003 Equal
                                       to or less than ($700,000) for the two
                                       months ending February 28, 2002;
                                       Equal to or greater than a $300,000 for
                                       the three months ending March 31, 2003,
                                       and Equal to or greater than $5,500,000
                                       for all fiscal quarters thereafter
      (h)   EBITDA                     Equal to or Greater than $750,000 for the
                                       month ending September 30, 2002 Not less
                                       than ($300,000) for the month ending
                                       October 31, 2002 Equal to or Greater than
                                       $1,500,000 for the two month period
                                       ending November 30, 2002 Equal to or
                                       Greater than $3,900,000 for the three
                                       month period ended December 31, 2002
                                       Equal to or greater than $300,000 for the
                                       month ending January 31,

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                                       2003
                                       Equal to or Greater than $2,200,000
                                       for the two month period ending February
                                       28, 2003
                                       Equal to or Greater than $5,300,000 for
                                       the three month period ending
                                       March 31, 2003;
                                       Equal to or Greater than $6,000,000 for
                                       all fiscal quarters thereafter"

3. Attachment C to the Agreement is hereby amended by deleting such Attachment C
in its entirety and substituting, in lieu thereof, the Attachment C attached
hereto. Such new Attachment C shall be effective as of the date specified in the
new Attachment A.

4. The definition of "Termination Date" in the Agreement is amended in its
entirety to read as follows:

""Termination Date": shall mean December 31, 2003 or such other date as IBM
Credit and Customer may agree from time to time in writing."

5. Section 7.16 (F) of the Agreement is amended in its entirety to read as
follows:

"(F) Notwithstanding anything herein to the contrary, no Credit Party nor any
Subsidiary of a Credit Party shall at any time (i) provide a guarantee of any
Indebtedness of any Unrestricted Domestic Subsidiary (if any) or Foreign
Subsidiary except that (x) the Customer may, pursuant to the Thai Guaranty,
guarantee the obligations of Pemstar Thailand in connection with the Thai Loan
Agreement provided that the aggregate amount of Customer's liability under such
guaranty shall not exceed the lesser of (i) Two Million Five Hundred Thousand
Dollars ($2,500,000) and (ii) the amounts due under the Thai Loan Agreement and
(y) the Customer may provide guaranties to support Foreign Subsidiaries
obligations under operating leases provided that the obligations under all such
guaranties do not exceed Fourteen Million Dollars ($14,000,000) in the
aggregate, (ii) be liable for any other Indebtedness of any Unrestricted
Domestic Subsidiary (if any) or Foreign Subsidiary, or (iii) be liable for any
other Indebtedness (other than Indebtedness to U.S. Bank) which provides that
the holder thereof may (upon notice, lapse of time or both) declare a default
therein (or cause such Indebtedness or the payment thereof to be accelerated,
payable or subject to repurchase prior to its final scheduled maturities) upon
the occurrence of a default with respect to any Indebtedness of an Unrestricted
Domestic Subsidiary (if any) or Foreign Subsidiary, (iv) make loans, advances,
payment of money or goods to an Unrestricted Domestic Subsidiary (if any) or
Foreign Subsidiary except as otherwise provided in Section 8.15 hereof, (v) make
Restricted Payments to an Unrestricted Domestic Subsidiary (if any) or Foreign
Subsidiary or (vi) make any Investment or equity contribution in an Unrestricted
Domestic Subsidiary (if any) or Foreign Subsidiary except that a Credit Party
may make an equity contribution in (w) the Unrestricted Foreign Subsidiaries
(other than Pemstar Thailand) provided that the aggregate amount of all such
Investments and equity contributions in all the Unrestricted Foreign
Subsidiaries (other than Pemstar Thailand) do not exceed Thirteen Million
Dollars ($13,000,000) in the aggregate (x) Foreign Subsidiaries (other than
Unrestricted Foreign Subsidiaries and Pemstar Mexico) provided that the
aggregate amount of all equity investments made by the Credit Parties in any
Foreign Subsidiary (other than Unrestricted Foreign Subsidiaries and Pemstar
Mexico) shall not exceed One Million Five Hundred Thousand Dollars ($1,500,000)
in the aggregate per such Foreign Subsidiary, (y) Pemstar Mexico provided that
the aggregate amount of all such Investments and equity investments in Pemstar
Mexico shall not exceed Ten Million Five Hundred Thousand Dollars ($10,500,000)
in the aggregate and (z) Pemstar Thailand provided that the aggregate amount of
all such Investments and equity investments in Pemstar Thailand shall not exceed
Three Million Six Hundred Thousand Dollars ($3,600,000) in the aggregate. No
Unrestricted Domestic Subsidiary (if any) or Foreign Subsidiary may be merged
into the Customer or any Credit Party or liquidate into or transfer
substantially all of its assets to the Customer or any other Subsidiary (other
than an Unrestricted Subsidiary) without the prior written consent of IBM
Credit. The Credit Parties acknowledge that Unrestricted Domestic Subsidiaries
are not permitted without the prior written consent of IBM Credit."

6. Section 8.21(b) of the Agreement is amended by deleting the reference to "(as
defined in the Securities Purchase Agreement)" and substituting in lieu thereof
"(as defined in the Subordinated Convertible Notes").

                                       7

<PAGE>

Section 5.  Conditions to Effectiveness of Waiver. The waiver set forth in
Section 3 hereof shall become effective only upon the fulfillment of all of the
following conditions precedent, to the satisfaction of IBM Credit in its sole
discretion:
(i) this Amendment shall have been executed by each of the parties hereto and
IBM Credit shall have received a fully executed copy of this Amendment by no
later than September 30, 2002;
(ii) the Credit Parties shall pay to IBM Credit a waiver fee, in immediately
available funds, equal to Sixty- five thousand dollars ($65,000.00) on or prior
to September 30, 2002. Such waiver fee payable to IBM Credit hereunder shall be
nonrefundable and shall be in addition to any other fees IBM Credit may charge
the Credit Parties; and
(iii) before and after giving effect to this Amendment, the representations and
warranties in Section 6 of the Agreement shall be true and correct as though
made on the date hereof. The execution by the Credit Parties of this Amendment
shall be deemed a representation that the Credit Parties have complied with the
foregoing condition; and
(iv) IBM Credit shall have received evidence satisfactory to it in its sole
discretion that U.S. Bank shall have waived (in writing) all defaults under its
financing facility with the Credit Parties and amended its financial covenants
by no later than September 30, 2002 and such waiver and amendment shall be in
form and substance satisfactory to IBM Credit or a certification from the Credit
Parties that no default or event of default exists under their financing
facilities with U.S. Bank and accordingly no such waiver and amendment is
required.

Section 6.  Additional Requirements. The Agreement is hereby amended by
inserting the following additional covenants:

Additional Covenants.
(a) The Credit Parties agree that the Credit Parties shall provide to IBM
Credit, in form and substance satisfactory to IBM Credit, a certified copy of
the shareholder and certificate register updated to reflect the additional
pledge of shares by the Credit Parties to IBM Credit of Pemstar Luxembourg
S.a.r.l. shares on or prior to October 15, 2002.
(b) The Credit Parties are to deliver to IBM Credit by no later than October 15,
2002 an opinion of counsel (from counsel satisfactory to IBM Credit) covering
the issuance of additional shares of Pemstar Luxembourg S.a.r.l. and such
opinion shall be in form and substance satisfactory to IBM Credit.

The failure by any of the Credit Parties to comply with any of the above
covenants or the failure of any of the above requirements to be satisfied
(within the above time frames) in IBM Credit's determination in its sole
discretion shall constitute an immediate Event of Default under the Agreement.

Section 7.  Rights and Remedies. Except to the extent specifically waived
herein, IBM Credit reserves any and all rights and remedies that IBM Credit now
has or may have in the future with respect to each Credit Party, including any
and all rights or remedies which it may have in the future as a result of each
Credit Parties' failure to comply with its financial covenants or any other
covenants to IBM Credit. Except to the extent specifically waived herein neither
this Amendment, any of IBM Credit's actions or IBM Credit's failure to act shall
be deemed to be a waiver of any such rights or remedies. The Credit Parties and
IBM Credit agree that failure to comply with the terms and provisions of this
Amendment or the Agreement constitute a new default under the Agreement.

Section 8.  Representations and Warranties. Each Credit Party makes to IBM
Credit the following representations and warranties all of which are material
and are made to induce IBM Credit to enter into this Amendment.

Section 8.1 Accuracy and Completeness of Warranties and Representations. All
representations made by each Credit Party in the Agreement were true and
accurate and complete in every respect as of the date made, and, as amended by
this Amendment, all representations made by each Credit Party in the Agreement
are true, accurate and complete in every material respect as of the date hereof,
and do not fail to disclose any material fact necessary to make representations
not misleading.

Section 8.2 Violation of Other Agreements. The execution and delivery of this
Amendment and the performance and observance of the covenants to be performed
and observed hereunder do not violate or cause any Credit Party not to be in
compliance with the terms of any agreement to which any Credit Party is a party.

                                       8

<PAGE>

Section 8.3 Litigation. Except as has been disclosed by the Credit Parties to
IBM Credit in writing, there is no litigation, proceeding, investigation or
labor dispute pending or threatened against any Credit Party, which, if
adversely determined, would materially adversely affect any Credit Party's
ability to perform any Credit Party's obligations under the Agreement and the
other documents, instruments and agreements executed in connection therewith or
pursuant hereto.

Section 8.4 Enforceability of Amendment. This Amendment has been duly
authorized, executed and delivered by the Credit Parties and is enforceable
against each Credit Party in accordance with its terms.

Section 8.5 Consent of Other Lenders. The Credit Parties acknowledge and agree
that the execution and delivery of this Amendment will not trigger an event of
default, default or Triggering Event (as defined in the Subordinated Convertible
Notes) under the terms of the Subordinated Debt (2002) and that no default or
Triggering Event exists thereunder.

Section 9.  Ratification of Agreement. Except as specifically amended hereby,
all of the provisions of the Agreement shall remain unamended and in full force
and effect. Nothing herein shall be deemed a waiver of any default or consent.
Each Credit Party hereby ratifies, confirms and agrees that the Agreement, as
amended hereby, represents a valid and enforceable obligation of each Credit
Party, and is not subject to any claims, offsets or defenses. The amendment
contained herein shall be effective only with respect to the matters referred to
herein and shall not be deemed an amendment for any other purpose whatsoever.

Section 10. Governing Law. This Amendment shall be governed by and interpreted
in accordance with the laws which govern the Agreement.

Section 11. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be an original and all of which shall
constitute one agreement.

     IN WITNESS WHEREOF, this Amendment has been executed by duly authorized
representatives of the undersigned as of the day and year first above written.

IBM Credit Corporation                        Pemstar Inc.

By:         \s\ Steven A. Flanagan            By:         \s\ Al Berning
   ---------------------------------             -------------------------------

Print Name:     Steven A. Flanagan            Print Name:     Al Berning
           -------------------------                     -----------------------

Title:          Manager                       Title:          CEO
      ------------------------------                ----------------------------

Date:           September 27, 2002            Date:           September 27, 2002
     -------------------------------               -----------------------------

Turtle Mountain Corporation                   Pemstar Pacific Consultants, Inc.

By:         \s\ L.U. Feuss                    By:         \s\ Al Berning
   ---------------------------------             -------------------------------

Print Name:     L. U. Feuss                   Print Name:     Al Berning
           -------------------------                     -----------------------

Title:          Secretary                     Title:          CEO
      ------------------------------                ----------------------------

Date:           September 27, 2002            Date:           September 27, 2002
      ------------------------------               -----------------------------

Turtle Mountain Corporation

By:         \s\ Al Berning
   ---------------------------------

Print Name:     Al Berning
           -------------------------

Title:          CEO
      ------------------------------

Date:           September 27, 2002
     -------------------------------

                                       9<PAGE>

                                                                   Exhibit 10.25

              SECOND AMENDED AND RESTATED 364-DAY CREDIT AGREEMENT

                           dated as of August 29, 2002

                                      among

                                 PENTAIR, INC.,

                         Various Financial Institutions,

                                  BANK ONE, NA,
                              as Syndication Agent,

                       THE BANK OF TOKYO-MITSUBISHI, LTD.,
                               JPMORGAN CHASE BANK
                                       and
                         U.S. BANK NATIONAL ASSOCIATION,
                           as Co-Documentation Agents,

                       WACHOVIA BANK, NATIONAL ASSOCIATION
                                    as Agent,

                                       and

                             BANK OF AMERICA, N.A.,
                             as Administrative Agent

                         BANC OF AMERICA SECURITIES LLC
                                       and
                         BANC ONE CAPITAL MARKETS, INC.
                     Co-Lead Arrangers and Co-Book Managers

<PAGE>

              SECOND AMENDED AND RESTATED 364-DAY CREDIT AGREEMENT

         THIS SECOND AMENDED AND RESTATED 364-DAY CREDIT AGREEMENT dated as of
August 29, 2002 is among PENTAIR, INC. (the "Company"), the financial
institutions listed on the signature pages hereof (the "Lenders"), BANK ONE,
N.A., as Syndication Agent, and BANK OF AMERICA, N.A., as Administrative Agent.

         WHEREAS, the Company, various financial institutions and the
Administrative Agent entered into an Amended and Restated 364-Day Credit
Agreement dated as of August 30, 2001 (as amended, the "Credit Agreement"; terms
defined in the Credit Agreement are, unless otherwise defined herein or the
context otherwise requires, used herein as defined therein); and

         WHEREAS, the parties hereto desire to amend the Credit Agreement as set
forth herein and to restate the Credit Agreement in its entirety to read as set
forth in the Credit Agreement with the amendments specified below;

         NOW, THEREFORE, the parties hereto agree as follows:

         SECTION 1  Amendments. Effective as of the date hereof and subject to
the occurrence of the Second Restatement Effective Date (as defined below), the
Credit Agreement shall be amended as set forth below:

         1.1   Extension of Termination Date. The definition of the term
"Termination Date" in Section 1.01 shall be amended by deleting the date "August
29, 2002" therein and substituting the date "August 28, 2003" therefor.

         1.2   Amendment to Schedule 2.01. Schedule 2.01 is amended in its
entirety by substituting Schedule 2.01 hereto therefor.

         1.3   Removal of Lenders. Mizuho Corporate Bank, Banca Antoniana
Popolare Veneta, Fleet National Bank, Sanwa Bank Limited and Credit Lyonnais
Chicago Branch (collectively, the "Exiting Lenders") are each removed as a party
to the Credit Agreement and shall have no further rights or obligations as a
"Lender" thereunder, except that any provision of the Credit Agreement which by
its terms survives termination thereof shall remain in full force and effect
with respect to such Lenders.

         SECTION 2  Representations and Warranties. The Company represents and
warrants to the Lenders and the Administrative Agent that: (a) each of the
representations and warranties of the Company set forth in the Credit Agreement,
as amended and restated hereby (as so amended and restated, the "Second Restated
Credit Agreement") is true and correct as of the date hereof, with the same
effect as if made on such date (except to the extent such representations and
warranties expressly refer to an earlier date, in which case they were true and
correct as of such earlier date); (b) the execution and delivery hereof by the
Company and the performance by the Company of its obligations under the Second
Restated Credit Agreement (i) are within the powers of the Company, (ii) have
been duly authorized by all necessary action on the part of the Company, (iii)
have received all necessary governmental approval and (iv) do not and will not
contravene or conflict with (x) any provision of law or the certificate of
incorporation or by-laws

                                      -2-

<PAGE>

or other organizational documents of the Company or (y) any agreement, judgment,
injunction, order, decree or other instrument which is binding upon the Company
or any of its Subsidiaries; and (c) the Second Restated Credit Agreement is the
legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency or other similar laws of general application affecting
the enforcement of creditors' rights or by general principles of equity limiting
the availability of equitable remedies.

         SECTION 3  Effectiveness. The Second Restated Credit Agreement shall
become effective on the date (the "Second Restatement Effective Date") when the
Administrative Agent shall have received:

         (a)  Second Restated Credit Agreement. Signature pages hereto signed by
the Company, each of the Lenders and the Administrative Agent (it being
understood that Administrative Agent may rely on a facsimile of any signature
page as if it were an original).

         (b)  Resolutions; Incumbency.

              (i)    Copies of resolutions of the board of directors of the
         Company authorizing the execution and delivery of this agreement and
         the consummation of the transactions contemplated hereby, certified as
         of the Second Restatement Effective Date by the Secretary or an
         Assistant Secretary of the Company, and

              (ii)   A certificate of the Secretary or an Assistant Secretary of
         the Company certifying the names and true signatures of the officers of
         the Company authorized to execute and deliver this agreement.

         (c)  Confirmation. A Confirmation substantially in the form of Exhibit
A signed by each Subsidiary Guarantor.

         (d)  Certificate. A certificate of the President, the chief financial
officer, the chief accounting officer or the vice president-treasurer of the
Company, dated as of the Second Restatement Effective Date, stating that:

              (i)    the representations and warranties contained in Section 2
         are true and correct on and as of such date, as though made on and as
         of such date,

              (ii)   no Event of Default or Unmatured Event of Default exists or
         would result from the effectiveness of this agreement, and

              (iii)  since December 31, 2001, no event or circumstance has
         occurred that has resulted or could reasonably be expected to result in
         a Material Adverse Effect.

         (e)  Legal Opinion. An opinion of Louis L. Ainsworth, Senior Vice
President and General Counsel of the Company, substantially in the form of
Attachment 1.

         (f)  Other Documents. Such other documents as the Administrative Agent
or any Lender may reasonably request.

                                      -3-

<PAGE>

         (g)   Payment of Obligations. Evidence of payment by the Company of all
amounts payable under the Credit Agreement (other than contingent
indemnification obligations), including, without limitation, any such amounts
payable to the Exiting Lenders on such date, and all accrued and unpaid fees,
costs and expenses payable hereunder to the extent then due.

         SECTION 4  Miscellaneous.

         4.1   Amendment and Restatement. Upon the effectiveness hereof, the
Credit Agreement shall be restated in its entirety to read as set forth in the
Credit Agreement as amended hereby and all rights and obligations of the parties
shall be as set forth in the Second Restated Credit Agreement (except that any
provision of the Credit Agreement which by its terms survives termination
thereof shall remain in full force and effect).

         4.2   Counterparts. This agreement may be executed in any number of
counterparts and by the different parties on separate counterparts, and each
such counterpart shall be deemed to be an original but all such counterparts
shall together constitute one and the same agreement.

         4.3   Expenses. The Company agrees to pay all reasonable costs and
expenses of the Administrative Agent, including reasonable fees and charges of
counsel to the Administrative Agent, in connection with the preparation,
execution and delivery of this agreement.

         4.4   Governing Law. This agreement shall be a contract made under and
governed by the laws of the State of Illinois applicable to contracts made and
to be performed entirely within such State.

         4.5   Successors and Assigns. This agreement shall be binding upon the
Company, the Lenders and the Administrative Agent and their respective
successors and assigns, and shall inure to the benefit of the Company, the
Lenders and the Administrative Agent and the respective successors and assigns
of the Lenders and the Administrative Agent.

                                      -4-

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused the Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.

                                         PENTAIR, INC.

                                         By:___________________________
                                         Title:________________________

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

                                         By:___________________________
                                         Title:________________________

                                         BANK ONE, NA (Main Office Chicago)

                                         By:___________________________
                                         Title:________________________

                                         THE BANK OF TOKYO-MITSUBISHI, LTD.,
                                         CHICAGO BRANCH

                                         By:___________________________
                                         Title:________________________

                                         JPMORGAN CHASE BANK

                                         By:___________________________
                                         Title:________________________

                                       S-1

<PAGE>

                                         U.S. BANK NATIONAL ASSOCIATION

                                         By:___________________________
                                         Title:________________________

                                         WACHOVIA BANK, NATIONAL ASSOCIATION

                                         By:___________________________
                                         Title:________________________

                                         BANCA NAZIONALE DEL LAVORO S.P.A.
                                         NEW YORK BRANCH

                                         By:___________________________
                                         Title:________________________

                                         By:___________________________
                                         Title:________________________

                                         NATIONAL CITY BANK

                                         By:___________________________
                                         Title:________________________

                                         BANK HAPOALIM B.M.

                                         By:___________________________
                                         Title:________________________

                                         By:___________________________
                                         Title:________________________

                                       S-2

<PAGE>

                                         MELLON BANK, N.A.

                                         By:___________________________
                                         Title:________________________

                                         BANCA DI ROMA - CHICAGO BRANCH

                                         By:___________________________
                                         Title:________________________

                                         By:___________________________
                                         Title:________________________

                                         WELLS FARGO BANK, NATIONAL ASSOCIATION

                                         By:___________________________
                                         Title:________________________

                                         By:___________________________
                                         Title:________________________

                                         BNP PARIBAS

                                         By:___________________________
                                         Title:________________________

                                         By:___________________________
                                         Title:________________________

                                         THE BANK OF NEW YORK

                                         By:___________________________
                                         Title:________________________

                                       S-3

<PAGE>

                                  SCHEDULE 2.01

                                   COMMITMENTS
                               AND PRO RATA SHARES

<TABLE>
<CAPTION>
                                                                    Pro Rata
Lender                                          Commitment          Share
------                                          ----------          -----
<S>                                             <C>                 <C>
Bank of America, N.A.                           $30,000,000         12.396694214%
Bank One, NA                                    $30,000,000         12.396694214%
The Bank of Tokyo-Mitsubishi, Ltd.,             $30,000,000         12.396694214%
     Chicago Branch
JPMorgan Chase Bank                             $30,000,000         12.396694214%
U.S. Bank National Association                  $30,000,000         12.396694214%
Wachovia Bank, National Association             $20,000,000         8.264462809%
National City Bank                              $10,000,000         4.132231404%
Banca Nazionale del Lavoro S.p.A.
      New York Branch                           $10,000,000         4.132231404%
Bank Hapoalim B.M.                              $10,000,000         4.132231404%
Mellon Bank, N.A.                               $10,000,000         4.132231404%
Banca di Roma - Chicago Branch                  $8,500,000          3.512396694%
Wells Fargo Bank, National Association          $8,500,000          3.512396694%
BNP Paribas                                     $7,500,000          3.099173553%
The Bank of New York                            $7,500,000          3.099173553%

TOTAL                                           $242,000,000        100%
</TABLE>

<PAGE>

                                                                       EXHIBIT A

                           CONFIRMATION BY GUARANTORS

To the Administrative Agent and the Lenders under and as
    defined in the Credit Agreement referred to below

         Please refer to the Second Amended and Restated 364-Day Credit
Agreement dated as of August 29, 2002 (the "Second Restated Credit Agreement")
among Pentair, Inc. (the "Company"), various financial institutions and Bank of
America, N.A., as Administrative Agent. Capitalized terms used but not defined
herein are used as defined in the Second Restated Credit Agreement.

         Each of the undersigned hereby confirms to the Administrative Agent and
the Lenders that, after giving effect to the effectiveness of the Second
Restated Credit Agreement, the Subsidiary Guaranty (i) continues in full force
and effect as a guaranty of all obligations of the Company under the Second
Restated Credit Agreement and (ii) continues to be a legal, valid and binding
obligation of such undersigned, enforceable against such undersigned in
accordance with its terms, subject to bankruptcy, insolvency and similar laws
affecting the enforceability of creditors' rights generally and to general
principles of equity.

                  [Remainder of page intentionally left blank.]

<PAGE>

         IN WITNESS WHEREOF, each of the undersigned has caused this
Confirmation to be executed and delivered by its duly authorized representative
as of August 29, 2002.

                                       APLEX INDUSTRIES, INC.
                                       BIESEMEYER MANUFACTURING CORPORATION
                                       CENTURY MANUFACTURING CO.
                                       CODELINE CORPORATION
                                       COMPOOL, INC.
                                       DELTA INTERNATIONAL MACHINERY
                                              CORPORATION
                                       DEVILBISS AIR POWER COMPANY
                                       ELECTRONIC ENCLOSURES, INC.
                                       ESSEF CORPORATION
                                       FALCON MANUFACTURING, INC.
                                       FLECK CONTROLS, INC.
                                       HOFFMAN ENCLOSURES INC.
                                       LINCOLN AUTOMOTIVE COMPANY
                                       MCNEIL (OHIO) CORPORATION
                                       NATIONAL POOL TILE GROUP, INC.
                                       PENTAIR ENCLOSURES, INC.
                                       PENTAIR ELECTRONIC PACKAGING COMPANY
                                       PENTAIR POOL PRODUCTS, INC.
                                       PENTAIR PUMP GROUP, INC.
                                       PENTAIR TOOL & EQUIPMENT SALES CO.
                                       PENTAIR WATER TREATMENT COMPANY
                                       PORTER-CABLE CORPORATION
                                       RAINBOW ACQUISITION CORP.
                                       SANFORD TECHNOLOGIES
                                       SCHROFF, INC.
                                       STRUCTURAL AUSTRALIA
                                       WALKER DICKSON, INC.
                                       WEB TOOL & MANUFACTURING, INC.
                                       WTM, INC.

                                       By:_____________________________________
                                       Name: Louis L. Ainsworth
                                       Title:  Senior Vice President,
                                               General Counsel and Secretary

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