Document:

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                                                                   EXHIBIT 10.16

                                  PEMSTAR INC.
                             2000 STOCK OPTION PLAN

     1. Purpose of the Plan.

     This Plan shall be known as the "PEMSTAR INC. 2000 Stock Option Plan" and
is hereinafter referred to as the "Plan." The purpose of the Plan is to aid in
maintaining and developing personnel capable of assuring the future success of
PEMSTAR INC., a Minnesota corporation (the "Company"), to offer such personnel
additional incentives to put forth maximum efforts for the success of the
business, and to afford them an opportunity to acquire a proprietary interest in
the Company through stock options as provided herein. Options granted under this
Plan may be either incentive stock options ("Incentive Stock Options") within
the meaning of section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), or options which do not qualify as Incentive Stock Options.

     2. Stock Subject to the Plan.

     Subject to the provisions of section 12, the shares of stock to be subject
to options under the Plan shall be shares of the Company's authorized common
stock. Such shares may be either authorized but unissued shares, or issued
shares which have been reacquired by the Company. Subject to the adjustment as
provided in section 12, the maximum number of shares on which options may be
exercised under this Plan shall be Five Hundred Thousand Shares (500,000)
shares. If an option under the Plan expires, or for any reason is terminated or
unexercised with respect to any shares, such shares shall again be available for
options thereafter granted during the term of the Plan.

     3. Administration of Plan.

     (a) The Plan shall be administered by the Board of Directors of the Company
or a committee of three or more directors of the Company. The members of such
committee shall be appointed by and serve at the pleasure of the Board of
Directors. The group administering the Plan shall be referred to herein as the
"Committee."

     (b) The Committee shall have plenary authority in its discretion, but
subject to the express provisions of this Plan, (i) to determine the purchase
price of the common shares covered by each option, (ii) to determine the
employees to whom and the time or times at which such options shall be granted
and the number of shares to be subject to each option, (iii) to determine the
terms of exercise of each option, (iv) to accelerate the time at which all or
any part of an option may be exercised, (v) to amend or modify the terms of any
option with the consent of the optionee, (vi) to interpret the Plan, (vii) to
prescribe, amend and rescind rules and regulations relating to the Plan, (viii)
to determine the terms and provisions of each option agreement under this Plan
(which agreements need not be identical), including the designation of those
options intended to be Incentive Stock Options, and
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(ix) to make all other determinations necessary or advisable for the
administration of the Plan, subject to the exclusive authority of the Board of
Directors under section 13 to amend or terminate the Plan. The Committee's
determinations on the foregoing matters, unless otherwise disapproved by the
Board of Directors of the Company, shall be final and conclusive.

     (c) The Committee shall select one of its members as its Chairman and shall
hold its meetings at such times and places as it may determine. A majority of
its members shall constitute a quorum. All determinations of the Committee shall
be made by not less than a majority of its members. Any decision or
determination that is set forth in a written document and signed by all of the
members of the Committee shall be fully effective as if it had been made by a
majority vote at a meeting duly called and held. The granting of an option
pursuant to the Plan shall be effective only if a written agreement shall have
been duly executed and delivered by and on behalf of the Company and the
employee to whom such right is granted. The Committee may appoint a Secretary
and may make such rules and regulations for the conduct of its business as it
shall deem advisable.

     (d) The Committee shall, to the extent necessary or desirable, establish
any special rules for employees located in any country other than the United
States. Such rules shall be set forth in Appendices to the Plan, which shall be
deemed incorporated into and form part of the Plan. Such rules may not change
the maximum number of shares on which options may be exercised under the Plan or
the eligibility rules set forth in Section 4.

     4. Eligibility.

     Incentive Stock Options may only be granted under this Plan to any full or
part-time employee (which term as used herein includes, but is not limited to,
officers and directors who are also employees) of the Company and of its present
and future subsidiary corporations (herein called "subsidiaries"). Members of
the Board of Directors of the Company, consultants or independent contractors
providing valuable services to the Company or one of its subsidiaries who are
not also employees thereof shall be eligible to receive options which do not
qualify as Incentive Stock Options. In determining the persons to whom options
shall be granted and the number of shares subject to each option, the Committee
may take into account the nature of services rendered by the respective
employees, their present and potential contributions to the success of the
Company and such other factors as the Committee in its discretion shall deem
relevant. A person who has been granted an option under the Plan may be granted
an additional option or options under the Plan if the Committee shall so
determine; provided, however, that to the extent the aggregate fair market value
(determined at the time the Incentive Stock Option is granted) of the stock with
respect to which all Incentive Stock Options are exercisable for the first time
by an employee during any calendar year (under all plans described in section
422 of the Code of his employer corporation and its parent and subsidiary
corporations described in section 424(e) or 424(f) of the Code) exceeds
$100,000, such options shall be treated as options which do not qualify as
Incentive Stock Options.

     5. Price.

     The option price for all Incentive Stock Options granted under the Plan
shall be determined by the Committee but shall not be less than 100% of the fair
market value of shares of the Company's common stock at the date of granting of
such option. The option price for options granted

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under the Plan which do not qualify as Incentive Stock Options shall also be
determined by the Committee. For purposes of the preceding sentence and for all
other valuation purposes under the Plan, the fair market value of the Company's
common stock shall be as reasonably determined by the Committee. If on the date
of grant of any option granted under the Plan, the common stock of the Company
is not publicly traded, the Committee shall make a good faith attempt to satisfy
the option price requirement of this section 5 and in connection therewith shall
take such action as it deems necessary or advisable.

     6. Term.

     Each option and all rights and obligations thereunder shall, subject to the
provisions of section 9, expire on the date determined by the Committee and
specified in the option agreement. The Committee shall be under no duty to
provide terms of like duration for options granted under the Plan, but the term
of an Incentive Stock Option may not extend more than ten (10) years from the
date of granting of such option and the term of options granted under the Plan
which do not qualify as Incentive Stock Options may not extend more than fifteen
(15) years from the date of granting of such option.

     7. Exercise of Option.

     (a) The Committee shall have full and complete authority to determine,
subject to section 9, whether the option will be exercisable in full at any time
or from time to time during the term of the option, or to provide for the
exercise thereof in such installments, upon the occurrence of such events and at
such times during the term of the option as the Committee may determine.

     (b) The exercise of any option granted hereunder shall only be effective at
such time that the sale of common stock pursuant to such exercise will not
violate any state or federal securities or other laws.

     (c) An optionee electing to exercise an option shall give written notice to
the Company of such election and of the number of shares subject to such
exercise. The full purchase price of such shares shall be tendered with such
notice of exercise. Payment shall be made to the Company either in cash
(including check, bank draft or money order), or, at the discretion of the
Committee, (i) by delivering certificates for shares of the Company's common
stock already owned by the optionee having a fair market value equal to the full
purchase price of the shares, or (ii) a combination of cash and such shares, or
(iii) by delivering the optionee's full recourse promissory note, which shall
provide for interest at a rate not less than the minimum rate required to avoid
imputation of income, original issue discount or a below-market-rate loan
pursuant to sections 483, 1274 or 7872 of the Code or any successor provisions
thereto; provided, however, that an optionee shall not be entitled to tender
shares of the Company's common stock pursuant to successive, substantially
simultaneous exercises of options granted under this or any other stock option
plan of the Company. The fair market

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value of such shares shall be determined as provided in section 5. Until such
person has been issued a certificate or certificates for the shares subject to
such exercise, he shall possess no rights as a stockholder with respect to such
shares.

     8. Additional Restrictions.

     The Committee shall have full and complete authority to determine whether
all or any part of the shares of common stock of the Company acquired upon
exercise of any of the options granted under the Plan shall be subject to
restrictions on the transferability thereof or any other restrictions affecting
in any manner the optionee's rights with respect thereto, but any such
restriction shall be contained in the agreement relating to such options.

     9. Effect of Termination of Employment or Death.

     (a) In the event that an optionee shall cease to be employed by the Company
or its subsidiaries, if any, for any reason other than his gross and willful
misconduct or his death or disability as set forth in section 9(c), such
optionee shall have the right to exercise the option at any time within three
months after such termination of employment to the extent of the full number of
shares he was entitled to purchase under the option on the date of termination,
subject to the condition that no option shall be exercisable after the
expiration of the term of the option.

     (b) In the event that an optionee shall cease to be employed by the Company
or its subsidiaries, if any, by reason of his gross and willful misconduct
during the course of his employment, including but not limited to wrongful
appropriation of funds of his employer or the commission of a gross misdemeanor
or felony, the option shall be terminated as of the date of the misconduct.

     (c) If the optionee shall die while in the employ of the Company or a
subsidiary, if any, or within three months after termination of employment for
any reason other than gross and willful misconduct, or the optionee's employment
is terminated because optionee has become disabled (within the meaning of Code
section 22(e)(3)) while in the employ of the Company or a subsidiary, if any,
and such optionee shall not have fully exercised the option, such option may be
exercised at any time within twelve months after his death or the date of such
disability by the optionee or the personal representatives of the optionee, as
applicable, or by any person or persons to whom the option is transferred by
will or the applicable laws of descent and distribution, to the extent of the
full number of shares he was entitled to purchase under the option on the date
of death (or termination of employment, if earlier) and subject to the condition
that no option shall be exercisable after the expiration of the term of the
option.

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     (d) Nothing in the Plan or in any agreement thereunder shall confer on any
employee any right to continue in the employ of the Company or any of its
subsidiaries or affect, in any way, the right of the Company or any of its
subsidiaries to terminate his employment at any time.

     10. Ten Percent Shareholder Rule.

     Notwithstanding any other provision in the Plan, if at the time an option
is otherwise to be granted pursuant to the Plan the optionee owns directly or
indirectly (within the meaning of section 424(d) of the Code) shares of common
stock of the Company possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or its parent or
subsidiary corporations (within the meaning of section 424(e) or 424(f) of the
Code), if any, then any Incentive Stock Option to be granted to such optionee
pursuant to the Plan shall satisfy the requirements of section 422(c)(7) of the
Code, the option price shall be not less than 110% of the fair market value of
the common stock of the Company determined as described herein, and such option
by its terms shall not be exercisable after the expiration of five (5) years
from the date such option is granted.

     11. Non-Transferability.

     No option granted under the Plan shall be transferable by an optionee,
otherwise than by will or the laws of descent or distribution as provided in
section 9(c). During the lifetime of an optionee the option shall be exercisable
only by such optionee.

     12. Dilution or Other Adjustments.

     If there shall be any change in the shares of the Company's common stock
through merger, consolidation, reorganization, recapitalization, stock dividend
(of whatever amount), stock split or other change in the corporate structure,
appropriate adjustments in the Plan and outstanding options shall be made by the
Committee. In the event of any such changes, adjustments shall include, where
appropriate, changes in the aggregate number of shares subject to the Plan, the
number of shares and the price per share subject to outstanding options, in
order to prevent dilution or enlargement of option rights.

     13. Amendment or Discontinuance of Plan.

     The Board of Directors may amend or discontinue the Plan at any time.
However, no amendment of the Plan shall, without stockholder approval: (i)
increase the maximum number of shares under the Plan as provided in section 2,
(ii) decrease the minimum option price provided in section 5, (iii) extend the
maximum option term under section 6, or (iv) materially modify the eligibility

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requirements for participation in the Plan. The Board of Directors shall not
alter or impair any option theretofore granted under the Plan without the
consent of the holder of the option.

     14. Time of Granting.

     Nothing contained in the Plan or in any resolution adopted or to be adopted
by the Board of Directors or by the stockholders of the Company, and no action
taken by the Committee or the Board of Directors (other than the execution and
delivery of an option) shall constitute the granting of an option hereunder.

     15. No Guaranty of Continued Service or Future Benefits.

     (a) Nothing in the Plan or in any agreement hereunder shall confer on any
employee, director, consultant or independent contractor any right to continue
in the employ or service of the Company or any of its subsidiaries or affect in
any way the right of the Company or any of its subsidiaries to terminate any
such person's employment or other services at any time.

     (b) Options shall be granted under the Plan in the sole discretion of the
Board of Directors or the Committee and will not form part of the recipient's
salary or be used in calculating severance benefits or entitle the recipient to
similar option grants in the future.

     16. Effective Date and Termination of Plan.

     (a) The Plan was approved by the Board of Directors on March 14, 2000, and
shall be approved by the shareholders of the Company within twelve (12) months
thereof.

     (b) Unless the Plan shall have been discontinued as provided in section 13,
the Plan shall terminate March 14, 2010. No option may be granted after such
termination, but termination of the Plan shall not, without the consent of the
optionee, alter or impair any rights or obligations under any option theretofore
granted.

     17.  Income Tax; Withholding; Tax Bonuses.

     (a) Persons receiving Options under the Plan ("optionees") are responsible
for the payment of all income taxes, employment, social insurance, welfare and
other taxes under applicable law relating to any amounts deemed under the laws
of the country of their residency or of the organization of the subsidiary which
employs them to constitute income arising out of the Plan, the grant of options
under the Plan and the purchase and sale of shares of Common Stock pursuant to
the Plan.

     (b) Withholding. In order to comply with all applicable domestic or foreign
income tax laws or regulations, the Company may take such action as it deems
appropriate to ensure that all applicable federal, state or local payroll,
withholding, income or other taxes, which are the sole and absolute
responsibility of the optionee under the Plan, are withheld or collected from
such optionee. In order to assist the optionee in paying all or a portion of the
federal, state or local taxes to be withheld or collected upon exercise or
receipt of (or the lapse of restrictions relating to) an option, the Committee,
in its discretion and subject to such additional terms and conditions as it may
adopt, may permit the optionee to satisfy such tax obligation by (i) electing to
have the Company withhold a portion of the Shares otherwise to be delivered upon
exercise or receipt of (or the lapse of restrictions relating to) such option
with a fair market value equal to the amount of such taxes, or (ii) delivering
to the Company shares of Common Stock other than Shares issuable upon exercise
or receipt of (or the lapse of restrictions relating to) such option with a fair
market value equal to the amount of such taxes. The fair market value of shares
of Common Stock shall be determined in accordance with Section 5. The election,
if any, must be made on or before the date that the amount of tax to be withheld
is determined.

    (c) Tax Bonuses. The Committee, in its discretion, shall have the authority,
at the time of grant of any option under this Plan or at any time thereafter, to
approve cash bonuses to designated optionees to be paid upon their exercise or
receipt of (or the lapse of restrictions relating to) the option in order to
provide funds to pay all or a portion of federal, state or local taxes due as a
result of such exercise or receipt (or the lapse of such restrictions). The
Committee shall have full authority in its discretion to determine the amount of
any such tax bonus.

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                                                                   EXHIBIT 10.17

[Final, 032600]
                             SUPPLEMENTARY CONTRACT

     THIS SUPPLEMENTARY CONTRACT ("this Contract") is entered into as of March
24, 2000, by and between TIANJIN YAT-SEN SCIENTIFIC-INDUSTRIAL PARK
INTERNATIONAL, INC., a Chinese corporation incorporated and established under
Chinese law, with its registered address at: the Economic and Technological
Development Zone of Tianjin City, China, ("Seller"), and PEMSTAR (TIANJIN)
ENTERPRISE CO. LTD., a wholly foreign owned enterprise incorporated and
established under Chinese law, with its registered address at: the Economic and
Technological Development Zone of Tianjin City, China, ("Buyer").

     WHEREAS, Seller and Buyer entered into a Commercial House Sales Contract of
Tianjin City (the "Tianjin Contract") as of _________________, 2000, according
to which Seller will sell to Buyer the Property as defined below; and

     WHEREAS, Seller and Buyer acknowledge and agree that the Tianjin Contract
does not fully cover and elaborate all the intentions and agreements expressed
and reached between Seller and Buyer in connection with the sale and purchase
transaction of the Property as defined below.

     NOW, THEREFORE, Seller and Buyer have hereby agreed to the following terms
and conditions in connection with the Tianjin Contract:

1.   PROPERTY DESCRIPTION
     --------------------

     Seller hereby sells to Buyer, and Buyer hereby buys from Seller, the
     factory building and the improvements, parking lot, driveways, sidewalks
     and landscaping within the factory area and the land-use rights associated
     therewith and thereunder, together with all other rights and interests
     which relate thereto at Tianjin Yat-Sen Scientific-Industrial Park, in
     Tianjin City, China, more fully described and illustrated on Exhibit A (the
     "Property").

2.   REPRESENTATIONS
     ---------------

     Seller warrants and represents:

     a.   that at the time of delivery of the Property to Buyer, the Property is
          in good and safe condition, structurally sound and that all heating,
          ventilating and cooling systems, plumbing systems, electrical systems,
          fire safety systems and other building systems are in good working
          condition, and in compliance with all applicable Chinese state and
          local laws, statutes, rules, regulations and ordinances and with the
          specifications for the Property described on Exhibit A.

     b.   that the Property complies with all applicable Chinese state and local
          laws, statutes, rules, regulations and ordinances, and that the
          Property is properly zoned
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          and permitted for use as a manufacturing plant and related offices as
          intended by Buyer.

     c.   that it has provided to Buyer a true copy of the Land-use Right
          Certificate, Sales Permit, Fire-Safety Permit and all other
          governmental approvals and permits required for owning, using and
          transferring the Property.

     d.   that upon full payment of the purchase price for the Property by Buyer
          to Seller, Buyer shall be approved to obtain the Land-use Right
          Certificate, Building Ownership Certificate and Fire-Safety Permit
          relating to the Property, and all other governmental approvals and
          permits required for owning, using and transferring the Property.

     e.   that the Property is connected to water, sewer, gas and electric lines
          and that there are separate utility meters for all utilities, except
          sewer, serving the Property.

     f.   that:

          i.   Seller promises that the land on which the Property is located
               was farm land without any contamination as described in Section 5
               below.

          ii.  The land testing report for the Property provided by Seller to
               Buyer is truthful and reliable, which can be relied upon by
               Buyer.

          iii. The Introduction to the Current Environmental Status of Tianjin
               Yat-Sen Scientific-Industrial Park of the Economic and
               Technological Development Zone of Tianjin City made by the
               Environmental Protection Bureau of the Economic and Technological
               Development Zone of Tianjin City and the Administration Bureau of
               Tianjin Yat-Sen Scientific-Industrial Park of Tianjin City and
               provided by Seller to Buyer is truthful and reliable, which can
               be relied upon by Buyer.

          Seller's obligations and liabilities under Section 2.a and 2.e shall
          be good and effective within the relevant warranty period as required
          by law. Seller's other obligations and liabilities under this Section
          2 shall survive the expiration or termination of this Contract.

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3.   SELLER OBLIGATIONS
     ------------------

     a.   Prior to delivering possession of the Property to Buyer, Seller, at
          its sole expense, shall cause the Property to comply with all Chinese
          state and local laws, codes, ordinances, rules and regulations and
          shall be responsible for and shall remedy any noncompliance of the
          Property with such laws, codes, ordinances, rules and regulations.
          Without limitation, Seller, at its sole expense and within the
          relevant warranty period as required by law, shall maintain in good
          condition and repair (including replacement, if necessary) the roof,
          heating, air conditioning and ventilating systems, plumbing and
          electrical systems, fire safety systems and structural components of
          the Property. Seller, at its sole expense and within relevant warranty
          period as required by law, shall also make all repairs or replacements
          to the Property, where such repairs or replacements are necessary due
          to construction quality or latent defects, or are subject to
          construction or material warranties.

     b.   Buyer may submit to Seller at any time and from time to time during
          the relevant warranty period as required by law, a list of defective
          items in the Property. Seller shall correct all such defective items,
          at Seller's sole expense, as soon as reasonably possible, but in no
          event more than thirty (30) days after receipt of notice from Buyer.
          If the nature of the defect requires more than thirty (30) days to
          correct, Buyer and Seller may extend such correction time to a
          reasonable extent through consultation, provided that Seller must
          start correcting the defect within the aforesaid thirty (30) days
          period and Seller's correction must not be interrupted. Without
          limitation, Seller, at its sole expense, shall make all repairs or
          replacements to the Property, where such repairs or replacements are
          necessary due to construction quality or latent defects, or are
          subject to construction or material warranties.

     c.   Seller shall indemnify, defend and hold Buyer harmless from and
          against any and all Environmental Damages incurred or to be incurred
          as a result of the breach, by Seller, of its representations hereunder
          or with respect to Existing Contamination or Seller Contamination or
          failure to comply with any environmental Regulations. Seller shall
          perform any remediation required by any Government in such a manner as
          to have as little impact on Buyer's business being conducted at the
          Property as reasonably possible. If Existing Contamination or Seller
          Contamination actually prevents Buyer, or its employees or customers,
          from occupying any material part of the Property in a manner that
          materially adversely affects Buyer's business being conducted at the
          Property for any period of sixty (60) or more continuous calendar
          days, Buyer shall have the right to terminate the Contract by giving
          written notice to Seller, in which event the Deposit under Section 7
          of this Contract shall be refunded to Buyer, with interest.

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          Seller's obligations and liabilities under Sections 3.a and 3.b shall
          be good and effective within the relevant warranty period as required
          by law. Seller's obligations and liabilities under Section 3.c shall
          survive the expiration or termination of this Contract

4.   BUYER OBLIGATIONS
     -----------------

     a.   Through the Term of this Contract, Buyer shall be responsible for the
          daily operation and maintenance of the Property and the related
          equipment and systems (e.g., oiling and cleaning), including
          replacement of the parts and components which are easy to wear and
          tear (e.g., light bulbs). Notwithstanding the foregoing, Buyer shall
          not be responsible for repairs of any damage, defect and break-down
          which am caused to the Property and the related equipment and systems
          by construction quality or latent defects, or are subject to
          construction or material warranties.

     b.   Buyer shall indemnify, defend and hold Seller harmless from and
          against any and all Environmental Damages incurred or to be incurred
          as a result of violation by Buyer of any Environmental Regulations.

5.   DEFINITIONS
     -----------

     For purposes of this Contract the following terms shall have the following
meanings:

     a.   "Existing Contamination" means prior to delivery of possession of the
          Property to Buyer, contamination, if any, which exists on, in, below,
          or is migrating on, under or in the direction of the Property, whether
          known or unknown on the date Buyer takes possession of the Property.

     b.   "Seller Contamination" means contamination at the Property which is
          caused by or arises out of any act, omission, neglect or fault of
          Seller, its predecessors as owners and/or users of the Property or its
          agents, employees, contractors or invitees and occurs without the
          neglect of fault of Buyer.

     c.   "Contamination" means the uncontained or uncontrolled presence of or
          release of Hazardous Substances into any environmental media from,
          upon, within, below, into or on the Property.

     d.   "Hazardous Substances" means any toxic or hazardous chemicals, wastes,
          materials or substances, including, without limitation, lead, radon,
          asbestos, asbestos containing materials, polychlorinated biphenyls,
          dioxin, urea-formaldehyde, nuclear fuel or waste, radioactive
          materials, explosives, carcinogens, petroleum products, or any
          pollutants or contaminants, as those terms

                                      -4-
<PAGE>

          and the highest permissible levels (if any) thereof are defined in any
          applicable Government law, statute, ordinance, code, rule or
          regulation.

     e.   "Environmental Regulations" means all laws, statutes, ordinances,
          codes, rules and regulations relating to Hazardous Substances or the
          protection of the environment.

     f.   "Environmental Damages" means all claims, judgments, arbitral awards,
          losses, penalties, fines, liabilities, encumbrances, liens, costs and
          reasonable expenses of investigation, defense or good faith settlement
          resulting from violations of Environmental Regulations, and including,
          without limitation: (i) damages for personal injury and injury to
          property or natural resources; (ii) reasonable fees and disbursement
          of attorneys, consultants, contractors, experts and laboratories;
          (iii) costs of any cleanup, remediation, removal, response, abatement,
          containment, closure, restoration or monitoring work required by any
          Environmental Regulation and other costs reasonably necessary to
          restore full economic use of the Property; and (iv) third-party claims
          relating to the immediately preceding subsections (i) - (iii).

     g.   "Government" means the City of Tianjin, and any other governmental
          authority having jurisdiction over the matter in question.

     h.   "Term" means the period from the date of this Contract through earlier
          of (a) the effective date of termination of this Contract or (b) the
          date when the purchase price has been paid in full and all transfer
          documents contemplated by Section 6 have been delivered, approved by
          applicable authority and the Property has been fully transferred to
          Buyer.

     i.   "Deposit" means the sum deposited by Seller with Buyer pursuant to
          Section 7 below.

6.   TRANSFER
     --------

Buyer shall be deemed the equity owner of the Property. However, prior to full
payment of the purchase price for the Property by Buyer to Seller, Seller will
keep and possess the Land-use Right Certificate, the Sales Permit and other
relevant certificates. Upon full payment of the purchase price for the Property
by Buyer to Seller, Seller shall execute, and/or deliver to Buyer all documents
and/or authentic copies thereof as legally required to enable Seller to own, use
and transfer the land-use right, the building ownership and all other elements
of the Property in China, including the following, all in form and content in
compliance with the relevant laws and regulations:

     a.   a transfer instrument with warranties of ownership of the rights
          transferred, a Land-use Right Certificate, a Sales Permit and any
          other documents required to

                                      -5-
<PAGE>

          convey the Property to Buyer, free and clear of all encumbrances
          including governmental liens, taxes and fees, but not including
          matters which Buyers have created after the date of this Contract,

     b.   appropriate assignments of all other elements of the Property,

     c.   an affidavit by Seller indicating that there are no outstanding,
          unsatisfied judgments, arbitral awards, tax liens or bankruptcies or
          any other legal and/or administrative proceedings against or involving
          Seller or the Property; that them has been no skill, labor or material
          furnished to the Property by or on behalf of Seller for which payment
          has not been made or for which mechanics' liens could be filed; and
          that there are no other unrecorded interests in the Property other
          than interests created by Buyer,

     d    All of Seller's authorization documents which are notarized, bear
          Seller's original corporate seal and authorize sale by Seller of the
          Property; such documents are valid and binding obligations of Seller,
          enforceable in accordance with their terms,

     e.   all other documents, certificates and approvals reasonably determined
          by Buyer to be necessary to transfer the Property to Buyer free and
          clear of all encumbrances.

7.   TOTAL PURCHASE PRICE, DEPOSIT
     -----------------------------

Buyer shall pay to Seller, in Tianjin, China, the sum of Fourteen Million Four
Hundred and Fifty-one Thousand Four Hundred and Ninety-eight Chinese Renminbi
(RMB14,451,498) as and for the principal of the total purchase price for the
Property (the "Total Purchase Price"). The Total Purchase Price and the interest
thereon at Eight Percent (8%) per annum shall be payable in installments. The
interest herein shall accrue from January 15, 2000. The Total Purchase Price
shall be adjusted in accordance with the relevant provisions of the Tianjin
Contract. Each installment shall be applied first to accrued but unpaid interest
and the balance to principal. The payment of the Total Purchase Price shall be
made as set forth in a schedule attached hereto as Exhibit B. Buyer shall pay
Seller the due amount of the Total Purchase Price for the current month within
the first seven (7) business days of the current month.

Buyer has deposited with Seller the sum of One Hundred Thousand Chinese Renminbi
(RMB100,000) (the "Deposit") as collateral for its obligations under this
Contract. If this Contract is terminated due to Buyer's reason prior to the last
date of the third anniversary of the execution date of this Contract, Seller
shall have the right to retain such Deposit as liquidated damages for such
termination. If this Contract has not been terminated prior to the last date of
the third anniversary of the execution date of this Contract, or if the Contract
is terminated other than for Buyer's reason, Seller shall promptly repay to
Buyer

                                      -6-
<PAGE>

the amount of the Deposit, together with interest thereon at Eight Percent
(8%) per annum computed from the date of deposit to the date of repayment. There
shall be no accumulative interest accrued on such interest. If the Deposit and
interest thereon are not promptly repaid to Buyer, Buyer may elect to apply such
Deposit and interest thereon to any payments thereafter coming due under this
Contract.

8.   PREPAYMENT
     ----------

Buyer shall have the right to fully or partially prepay all the amounts under
this Contract at any time without penalty. Any partial prepayment shall be
applied first to payment of amounts then due under this contract, including
unpaid accrued interest, and the balance shall be applied to the principal
installments to be paid in the inverse order of their maturity. Partial
prepayment shall not postpone the due date of the installments to be paid
pursuant to this Contract or change the amount of such installments.
Specifically, Buyer may prepay all the amounts under this Contract in full at
any time by paying the then unpaid principal balance to Seller.

9.   REAL ESTATE TAXES
     -----------------

Seller warrants that all the applicable taxes and fees currently due in
connection with the Property and applicable to Seller as legally required have
been paid by Seller in full without any delay. Seller shall continue to pay any
and all further taxes and fees in connection with the Property and applicable to
Seller as legally required. Buyer shall be responsible for payment of any and
all taxes and fees in connection with the Property and applicable to Buyer as
legally required.

10.  PROPERTY INSURANCE
     ------------------

     a.   INSURED RISKS AND AMOUNT. Seller shall keep the Property insured
          against loss or damage by "all risks" coverage, including, malicious
          mischief and vandalism, and boiler and machinery coverage, in an
          amount sufficient to prevent Seller or Buyer from being a co-insurer
          under the terms of the applicable policies, but in any event, in an
          amount not less than One Hundred Percent (100%) of the then full
          market replacement value of the Property. Such insurance shall be
          issued by financially responsible insurers duly authorized to do
          business in China. Seller shall pay any deductible or co-insurance
          amount applicable in the event of loss or damage first, then receive a
          reimbursement amount from Buyer based upon the ratio between the
          amount of the principal of the Total Purchase Price already paid by
          Buyer and the Total Purchase Price. Seller shall pay all the currently
          due insurance expenses first, then receive a reimbursement amount from
          Buyer based upon the ratio between the amount of the principal of the
          Total Purchase Price already paid by Buyer and the Total Purchase
          Price.

                                      -7-
<PAGE>

     b.   OTHER TERMS. The Seller's insurance policy shall contain a loss
          payable clause in favor of both Seller and Buyer and a clause which
          provides that Buyer's right to recover under the insurance shall not
          be impaired by any acts or omissions of Buyer or Seller.

     c.   NOTICE OF DAMAGE. In the event of damage to the Property by fire or
          other casualty, Buyer shall promptly give notice of such damage to
          Seller and the insurance company.

11.  DAMAGE TO THE PROPERTY
     ----------------------

     a.   APPLICATION OF INSURANCE PROCEEDS. If the Property is damaged by fire
          or other casualty ("Casualty") and this Contract is not terminated,
          all proceeds of insurance as described above shall be used in the
          following order: first, for the cost of reconstruction as set forth in
          the next paragraph; second, for the cost of finding a substitute
          location for Buyer's operations and any other related cost. Unless
          this Contract is terminated in accordance with the next paragraph, any
          proceeds not so applied shall be paid to and become the sole property
          of Buyer. If this Contract is terminated in accordance with the next
          paragraph, the proceeds of insurance as described above shall be
          allocated between Buyer and Seller based upon the ratio between the
          amount of the Total Purchase Price already paid by Buyer and the Total
          Purchase Price. However, in any event, the amount of proceeds of
          insurance to be received by Seller shall not exceed the original Total
          Purchase Price. The amount of the Total Purchase Price already paid by
          Buyer to Seller shall not be returned to Buyer.

     b.   BUYER'S ELECTION TO REBUILD OR TERMINATE. Unless Buyer gives notice of
          termination as set forth below, if the Property is damaged by
          Casualty, the damage (excluding damage to Buyer's personal property)
          shall be repaired by Seller at its expense to a condition as near as
          reasonably possible to the condition prior to the Casualty.

          If Buyer determines in its good faith judgment that it is unlikely
          that the Property can and will be so repaired within 90 days from the
          date of the Casualty, Buyer may elect to terminate this Contract by
          giving written notice to Seller within thirty (30) days after the date
          of the Casualty. If such notice is not given, Seller shall begin
          repairs within thirty (30) days after the Casualty and complete the
          repairs within one hundred and twenty (120) days after the Casualty.
          If Seller fails to begin or complete the repairs as required, Buyer
          may give Seller notice to do so. If Seller has not begun the repairs
          or completed the repairs, as applicable, within fifteen (15) days
          after Buyer's notice, Buyer may terminate this Contract by written
          notice to Seller given within thirty (30) days after expiration of the
          fifteen (15) days period.

                                      -8-
<PAGE>

          If this Contract is terminated because of the Casualty, payments
          otherwise due hereunder shall be prorated as of the later of the date
          of such Casualty or the date when Buyer ceased doing business in the
          Property and shall be proportionately refunded to Buyer or paid to
          Seller, as the case may be. During any period in which Buyer elects to
          cease business in the Property or any portion of the Property as a
          result of the Casualty (whether or not the Property itself was damaged
          by the Casualty), all payments otherwise due hereunder, including
          principal and interest thereon, shall be postponed for the period of
          time Buyer is not operating its business therein, plus thirty (30)
          days for Buyer to reuse all of the Property after the completion of
          Seller's repairs, in proportion to the areas not being used as a
          result of the Casualty. Through the aforesaid period of time, no
          interest shall be accrued on all the payments otherwise due hereunder.
          Such interest shall not continue to accrue until the date on which
          Buyer reuses all of the Property. If the plans and contracts for the
          repairs are prepared by Buyer, such plans and contracts shall have
          Seller's consent, which shall not be unreasonably withheld or delayed.

          If this Contract is not terminated, upon completion of such repair
          work, the proceeds of insurance as described above shall be provided
          to Seller for the reasonably necessary costs and expenses of
          performing such repairs. The remaining proceeds of insurance as
          described above shall be used for the cost of finding a substitute
          location for Buyer's operations and any other related cost If Buyer
          shall determine that such insurance proceeds are insufficient to
          complete such repair work, the additional funds needed for such repair
          work shall be allocated between Buyer and Seller based upon the ratio
          between the amount of the Total Purchase Price already paid by Buyer
          and the Total Purchase Price to secure the funds for such repair work.
          Any costs exceeding the proceeds of insurance and the additional funds
          as described above shall be allocated between Buyer and Seller based
          upon the ratio as described above. The proceeds of insurance and the
          additional funds and costs as described above will be disbursed only
          in accordance with generally accepted sound construction disbursement
          procedures. If the repair work is conducted by Buyer, Buyer shall
          complete the repair work as soon as reasonably possible and in a good
          and workmanlike manner, and in any event the repair work shall be
          completed by Buyer within one year after the Casualty.

          In the event of termination of this Contract pursuant to this Section
          11, the Deposit under Section 7 of this Contract shall be refunded to
          Buyer, with interest.

                                      -9-
<PAGE>

12.  LIABILITY INSURANCE
     -------------------

Buyer may, at its own expense, procure and maintain liability insurance against
claims for bodily injury, death and property damage occurring on or about the
Property and name Seller as an additional insured.

13.  INSURANCE, GENERALLY
     --------------------

The insurance which Seller is required to procure and maintain pursuant to this
contract shall be issued by an insurance company or companies licensed to do
business in China. The insurance shall be maintained by Seller at all times
during the Term. The insurance policies shall provide for not less than ten (10)
days written notice to Buyer before cancellation, non-renewal, termination or
change in coverage, and Seller shall deliver to Buyer a duplicate original or
certificate of such insurance policy or policies.

14.  CONDEMNATION
     ------------

If all or any part of the Property is taken in condemnation proceedings
instituted under power of eminent domain or is conveyed in lieu thereof under
threat of condemnation, the funds paid pursuant to such condemnation or
conveyance in lieu thereof shall, at Buyer's option, be first applied to any
costs necessary to repair, restore or otherwise make changes to the Property to
make it usable by Buyer. Any excess of such funds shall be applied to payment of
the amounts payable by Buyers under this Contract, even if such amounts are not
then due to be paid. Such funds shall be applied first to unpaid accrued
interest and next to the installments of the principal to be paid as provided in
this Contract in the inverse order of their maturity. The balance, if any, shall
be the property of Buyers. If such funds are insufficient for repair,
restoration or reconstruction of the Property, Buyer and Seller shall agree to
terminate this Contract, and all such funds shall be allocated between Buyer and
Seller based upon the ratio between the amount of the Total Purchase Price
already paid by Buyer and the Total Purchase Price. Buyer and Seller shall not
to each other have any further obligations and liabilities hereunder. However,
in any event, the amount of such funds to be received by Seller shall not exceed
the original Total Purchase Price. The amount of the Total Purchase Price
already paid to Seller by Buyer shall not be returned to Buyer. However, the
Deposit and the interest thereon shall be repaid to Seller in accordance with
Section 7 of this Contract.

15.  WASTE AND CHANGE
     ----------------

Prior to full performance of this Contract by Buyer, Buyer shall not remove, add
or demolish (herein collectively, the "Change") any buildings, improvements or
fixtures now or later located on or a part of the Property without Seller's
prior written consent, which shall not be unreasonably withheld or delayed.
Buyer shall not commit or allow waste of the Property. Buyer shall maintain the
Property in good condition and repair.

                                      -10-
<PAGE>

16.  NOTICE OF ASSIGNMENT
     --------------------

If either Seller or Buyer assigns its interest in the Property, a copy of the
agreement of such assignment shall promptly be furnished to the non-assigning
party. No such assignment shall release the assigning party from its obligation
to pay and perform (or cause to be paid and performed) all its obligations under
this Contract. It shall be stipulated in the agreement of such assignment as
described above that the assignee shall continue to perform all of the
assignor's unperformed obligations under this Contract.

17.  PROTECTION OF INTERESTS
     -----------------------

If Seller fails to pay any sum of money required under the terms of this
Contract or fails to perform any of its other obligations set forth in this
Contract and such failure damages and affects any of Buyer's rights under this
Contract, Buyer may, at Buyer's option, pay the same or cause the same to be
performed, or both, and Seller shall pay Buyer the amounts so paid by Buyer and
the cost of such performance upon demand, with interest at the rate stated in
Section 7 of this Contract. Buyer may also elect to apply and offset the sums so
payable by Seller against any or all sums due or to become due hereunder by
Buyer in such order as Buyer may elect. Any balance not so applied will continue
to be payable by Seller upon demand of Buyer.

Seller shall, not create, suffer or permit to accrue, any mortgage, lien or
encumbrance against the Property which is not herein expressly assumed by Buyer
and if any such mortgage, lien or encumbrance shall exist, Seller shall timely
pay all amounts due thereon, and if Seller fails to do so, Buyer may, at its
option, pay any such delinquent amounts and deduct the amounts paid from the
installments next coming due under this Contract

18.  TERMINATION RIGHT
     -----------------

Buyer may, at its sole election, terminate this contract by giving Seller not
less than sixty (60) days notice of such election and surrendering possession of
the Property to Seller. If such termination occurs prior to the last date of the
third anniversary of the execution date of this Contract, the Deposit shall be
forfeit to Seller as its sole remedy for such termination. If such termination
occurs on or after the last date of the third anniversary of the execution date
of this Contract, the Deposit shall not be forfeit, but shall be refunded to
Buyer as provided in Section 7 above, and Buyer shall be released from all
farther liability hereunder. In such situation, the amount of the Total Purchase
Price already paid by Buyer to Seller shall not be returned to Buyer. Buyer
shall return the Property to Seller in good condition. Buyer shall be
responsible for repair of any damage and defect caused by Buyer to the Property,
excluding normal wearing and tearing and non-structural damage and defect caused
by Buyer's normal business operations.

                                      -11-
<PAGE>

19.  DEFAULT
     -------

In the event that:

     a.   Buyer defaults in the payments due hereunder and the default continues
          for thirty (30) days after written notice by Seller to Buyer which
          affirmatively specifies that this Contract will terminate unless such
          payments are made; or

     b.   Buyer defaults in any other obligations under this Lease and the
          default continues for thirty (30) days after written notice by Seller
          to Buyer which affirmatively specifies that this Contract will
          terminate unless such default is timely cured (unless such default is
          of a nature that cannot reasonably be cured within such thirty (30)
          days period, in which case Buyer shall have such time to cure the
          default as is reasonably necessary, provided Buyer commences to cure
          such default within the original thirty (30) days period and continues
          to diligently and continuously pursue the cure thereof to completion),

then Seller may, at Seller's option, elect to declare this Contract canceled and
terminated by notice to Buyer. Buyer shall pay off all the payments, including
principal and interest, due for the period of time from the date of breach of
this Contract by Buyer to the date of cancellation and termination of this
Contract by Seller. All rights and interest acquired under this Contract by
Buyer shall then cease and terminate, and all improvements made upon the
Property and all payments made by Buyer pursuant to this Contract shall belong
to Seller as liquidated damages for breach of this Contract. After service of
notice of default and failure to cure such default within the periods set forth
in Sections 19.a and 19.b above, Buyer shall, upon demand, surrender possession
of the Property to Seller in good condition. Buyer shall be responsible for
repair of any damage and defect caused by Buyer to the Property, excluding
normal wearing and tearing and non-structural damage and defect caused by Buyers
normal business operations.

If a representation or warranty of Seller hereunder shall be false or if Seller
fails or neglects to keep and perform any of its covenants or agreements in this
Contract, Buyer may notify Seller thereof and if Seller does not cure such
default within thirty (30) days (or such shorter period as may be reasonable
under the circumstances, in the event of an emergency) after the date of
receiving such notice (or if the default is of such a character as to require
more than thirty (30) days to cure, Seller does not commence to cure such
default within thirty (30) days and proceed with the cure with reasonable
diligence), Buyer may, in addition to all other remedies now or hereafter
afforded or provided by law, expend such money as may be reasonably necessary to
eliminate such falsity or perform such covenant or agreement for or on behalf of
Seller or make good any such default, and any amount or amounts which Buyer
advances on Seller's behalf shall be repaid by Seller to Buyer on demand,
together with interest thereon at the interest rate

                                      -12-
<PAGE>

provided in Section 7 of this Contract from the date of such advance to the
repayment thereof in full, and if Seller does not repay any such amount or
amounts upon demand, Buyer may, without forfeiture of its rights under this
Contact, deduct the same, together with interest thereon as provided above, from
any installment or installments which may be or become due under this Contract.

20.  Force Majeure
     -------------

Buyer and Seller shall not to each other be responsible and liable for any
non-performance and/or delay of performance of this Contract which is caused by
an event of force majeure, including, but not limited to, war, fire, any natural
disaster, strike, social disturbance and governmental compulsory action, which
on the execution date of this Contract cannot be reasonably foreseen, is not
within the reasonable control of either Buyer or Seller or both and cannot be
cured or overcome by either Buyer or Seller or both with reasonable efforts
after the occurrence thereof. If an event of force majeure has made the
continuous performance of this Contract impossible and lasted for ninety (90)
days or more, one party may terminate this Contract by written notice to the
other party. All the rights of the two parties under this Contract shall cease
and terminate, and Buyer and Seller shall not to each other be responsible and
liable for any further obligations hereunder. The amount of the Total Purchase
Price already paid by Buyer to Seller shall not be returned to Buyer. However,
the Deposit shall be repaid to Buyer in accordance with Section 7 of this
Contract.

21.  NOTICES
     -------

Any notice under this Contract shall be in writing, and shall be sent by prepaid
certified mail or reputable express courier or by facsimile confirmed by
certified mail or reputable express courier, addressed to Buyer at: No. 8,
Yat-Sen Scientific-Industrial Park, Tianjin, China, 301726 (with a copy to
______________________________________), and to Seller at:
_______________________________________________________ or, in each case, to
such other address as is designated in a notice given under this Section 21,
which change of address shall be effective 10 days after the giving of notice of
such change. A notice shall be deemed given on the date of first attempted
delivery (if sent by certified mail or express courier) or upon completed
facsimile transmission to the proper fax number. Routine mailings by either
party may be sent by regular mail.

22.  DISPUTE RESOLUTION
     ------------------

     a.   Both parties agree to consult and negotiate in good faith to resolve
          any dispute, controversy or claim arising out of or in connection with
          this Contract. If such dispute, controversy or claim cannot be
          resolved in this manner withing thirty (30) days after the
          commencement of negotiation or such longer period as both parties

                                      -13-
<PAGE>

          shall agree to in writing, then the parties may submit such dispute,
          controversy or claim for arbitration as provided in Section 22.b.

     b.   Provided that the parties have complied with Section 22.a, any and all
          disputes arising from or in connection with this Contract shall be
          submitted to the China International Economic and Trade Arbitration
          Commission ("CIETAC") in 13 Beijing, China for arbitration in
          accordance with the existing CIETAC rules of arbitration. The
          arbitration award is final and binding upon both parties.

23.  RESERVATION OF ADDITIONAL LAND
     ------------------------------

To the extent permitted by the relevant Chinese laws and regulations, Seller
shall give Buyer the right of first refusal to purchase the land-use rights of
the land as described on Exhibit C hereto (the "Reserved Land"). If Seller wants
to use for itself or to sell to a third party the land-use rights of the
Reserved Land, Seller shall notify Buyer in writing of its such intention.
Within a period of time as short as reasonably possible, but in any event not
more than fifteen (15) working days, after receipt by Buyer of Seller's written
notice and other written documents which may evidence Buyer's such intention as
described above, under the same terms and conditions as provided by Seller to
such third party, Buyer shall have the right of first refusal to purchase the
land-use rights of the Reserved Land by written notice to Seller of Buyer's such
intention within the aforesaid period of time. Upon receipt of Buyer's such
written notice, Seller shall immediately negotiate with Buyer the sale and
transfer of the land-use rights of the Reserved Land to Buyer, and shall not
further engage in any transaction with such third party above or any other third
party or parties in connection with the land-use rights of the Reserved Land. If
Buyer does not notify Seller in writing within the aforesaid period of time,
claiming for the right of first refusal to purchase the land-use rights of the
Reserved Land, Seller may dispose of the land-use rights of the Reserved Land at
its sole discretion.

24.  GOVERNING LAW
     -------------

This Contract shall be governed by and construed and interpreted under Chinese
law.

25.  LANGUAGE
     --------

This Contract is written both in English and Chinese. In the event of conflict
in interpretation between the two languages, the Chinese version shall prevail.

26.  ENTIRE AGREEMENT
     ----------------

This Contract constitutes and expresses the entire agreement of the parties as
to all the matters herein referred to, all previous discussions, promises,
representations and understandings relative thereto among the parties being
herein merged and superseded.

                                      -14-
<PAGE>

27.  AMENDMENT
     ---------

This Contract shall only be amended by a written document agreed to and signed
by both parties.

28.  SEVERABILITY
     ------------

In case any provision of this Contract shall be deemed or declared to be
unenforceable, invalid or void, the same shall not impair any other provision of
this Contract but the parties agree to negotiate a substitute provision or amend
the other provisions of this Contract so as to produce a result which preserves
as nearly as possible the original legal objectives of this Contract, provided
that neither party shall be obligated to accept an amendment which substantially
departs from the essential intent or effect of this Contract.

29.  EFFECTIVE DATE
     --------------

This Contract shall take effect on the date on which it is duly executed by both
parties.

30.  BINDING EFFECT
     --------------

The terms of this Contract shall run with the land and bind the parties hereto
and their successors in interest. Upon full payment of the amounts due under
this Contract, the obligations of Buyer hereunder shall cease and be of no
further force or effect.

31.  SPECIAL AGREEMENT
     -----------------

Seller and Buyer hereby covenant and agree, in particular, that this Contract
shall constitute an inseparable integral part of the Tianjin Contract as
described above, and shall have the same and equal legal binding force.

     NOW, IN WITNESS WHEREFOR, each of Buyer and Seller has caused its
authorized representative to have executed and delivered this Contract on the
date first written above.

                                      -15-
<PAGE>

                                       SELLER:

                                       Tianjin Yat-Sen Scientific-Industrial
                                       Park International, Inc.

                                       By: / s /
                                           -------------------------------------
                                           Name:
                                                  ------------------------------
                                           Title:
                                                  ------------------------------

                                       BUYER:

                                       Pemstar (Tianjin Enterprise Co., Ltd.)

                                       By: / s /
                                           -------------------------------------
                                           Name:
                                                 -------------------------------
                                           Title:
                                                  ------------------------------

                                      -16-

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