Document:

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                                                                   EXHIBIT 10.10

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                                  PEMSTAR INC.

                           FIRST AMENDED AND RESTATED

                           INVESTORS' RIGHTS AGREEMENT

                                  June 7, 1999

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                                TABLE OF CONTENTS
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                                                                            Page
                                                                            ----
1. Registration Rights ...................................................... 1
   1.1      Definitions ..................................................... 1
   1.2      Request for Registration ........................................ 2
   1.3      Company Registration ............................................ 3
   1.4      Obligations of the Company ...................................... 4
   1.5      Furnish Information ............................................. 5
   1.6      Expenses of Demand Registration ................................. 6
   1.7      Expenses of Company Registration ................................ 6
   1.8      Underwriting Requirements ....................................... 6
   1.9      Delay of Registration ........................................... 7
   1.10     Indemnification ................................................. 7
   1.11     Reports Under Securities Exchange Act of 1934 ................... 9
   1.12     Form S-3 Registration ...........................................10
   1.13     Assignment of Registration Rights ...............................11
   1.14     Limitations on Subsequent Registration Rights ...................11
   1.15     "Market Stand-Off" Agreement ....................................11
   1.16     Termination of Registration Rights ..............................12

2. Covenants of the Company .................................................12
   2.1      Delivery of Financial Statements ................................12
   2.2      Inspection ......................................................13
   2.3      Termination of Information, Inspection and First Offer
              Covenants .....................................................13
   2.4      Right of First Offer ............................................13

3. Miscellaneous. ...........................................................14
   3.1      Successors and Assigns ..........................................14
   3.2      Governing Law ...................................................15
   3.3      Counterparts ....................................................15
   3.4      Titles and Subtitles ............................................15
   3.5      Notices .........................................................15
   3.6      Expenses ........................................................15
   3.7      Amendments and Waivers ..........................................15
   3.8      Severability ....................................................15
   3.9      Entire Agreement ................................................16

Schedule A - Schedule of Investors

                                      (i)
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             FIRST AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
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     THIS FIRST AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT is made as of
the 7th day of June, 1999, by and among PEMSTAR INC., a Minnesota corporation
(the "Company"), and the investors listed on Schedule A hereto, each of which is
herein referred to individually as an "Investor" and all of which are herein
referred to collectively as the "Investors," and terminates and supersedes in
all respects that certain Investors' Rights Agreement dated February 12, 1998,
by and among the Company and certain of the Investors.

                                    RECITALS
                                    --------

     The Company and certain of the Investors have entered into a Series B
Preferred Stock Purchase Agreement (the "Purchase Agreement") of even date
herewith pursuant to which the Company desires to sell to certain of the
Investors and certain of the Investors desire to purchase from the Company
shares of the Company's Series B Preferred Stock. A condition to such Investors'
obligations under the Purchase Agreement is that the Company and the Investors
enter into this Agreement in order to provide such Investors with (i) certain
rights to register shares of the Company's Common Stock issuable upon conversion
of the Series B Preferred Stock held by the Investors, (ii) certain rights to
receive or inspect information pertaining to the Company, and (iii) a right of
first offer with respect to certain issuances by the Company of its securities.
The Company, the Investors and the Founders each desire to induce certain of the
Investors to purchase shares of Series B Preferred Stock pursuant to the
Purchase Agreement by agreeing to the terms and conditions set forth herein.

     NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:

     1. Registration Rights. The Company and the Investors covenant and agree as
follows:

          1.1 Definitions. For purposes of this Section 1:

               (a) The term "Act" means the Securities Act of 1933, as amended.

               (b) The term "Form S-3" means such form under the Act as in
          effect on the date hereof or any registration form under the Act
          subsequently adopted by the SEC which permits inclusion or
          incorporation of substantial information by reference to other
          documents filed by the Company with the SEC.

               (c) The term "Holder" means any person owning or having the right
          to acquire Registrable Securities or any assignee thereof in
          accordance with Section 1.13 hereof.

               (d) The term "1934 Act" means the Securities Exchange Act of
          1934, as amended.
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               (e) The term "register", "registered," and "registration" refer
          to a registration effected by preparing and filing a registration
          statement or similar document in compliance with the Act, and the
          declaration or ordering of effectiveness of such registration
          statement or document.

               (f) The term "Registrable Securities" means (i) the Common Stock
          issuable or issued upon conversion of the Series A Preferred Stock and
          the Series B Preferred Stock, and (ii) any Common Stock of the Company
          issued as (or issuable upon the conversion or exercise of any warrant,
          right or other security which is issued as) a dividend or other
          distribution with respect to, or in exchange for or in replacement of
          the shares referenced in (i) above, excluding in all cases, however,
          any Registrable Securities sold by a person in a transaction in which
          his rights under this Section 1 are not assigned or any Registrable
          Securities sold in a public offering or pursuant to SEC Rule 144.

               (g) The number of shares of "Registrable Securities then
          outstanding" means the number of shares of Common Stock outstanding
          which are, and the number of shares of Common Stock issuable pursuant
          to then exercisable or convertible securities which are, Registrable
          Securities.

               (h) The term "SEC" means the Securities and Exchange Commission.

          1.2 Request for Registration.

               (a) If the Company shall receive at any time after the earlier of
          (i) February 12, 2001, or (ii) six (6) months after the effective date
          of the first registration statement for a public offering of
          securities of the Company (other than a registration statement
          relating either to the sale of securities to employees of the Company
          pursuant to a stock option, stock purchase or similar plan or a SEC
          Rule 145 transaction), a written request from the Holders of at least
          thirty-five percent (35%) of the Registrable Securities then
          outstanding that the Company file a registration statement under the
          Act covering the registration of Registrable Securities then
          outstanding, the anticipated aggregate offering price of which would
          exceed $10,000,000, then the Company shall:

                    (i) within ten (10) days of the delivery thereof, give
               written notice of such request to all Holders; and

                    (ii) use its best efforts to effect as soon as practicable,
               and in any event within ninety (90) days of the delivery of such
               request, the registration under the Act of all Registrable
               Securities which the Holders request to be registered, subject to
               the limitations of subsection 1.2(b), within twenty (20) days of
               the delivery of such notice by the Company.

               (b) If the Holders initiating the registration request hereunder
          ("Initiating Holders") intend to distribute the Registrable Securities
          covered by their request by means of an underwriting, they shall so
          advise the Company as a part of their request made pursuant to
          subsection 1.2(a) and the Company shall include such information in
          the written

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          notice referred to in subsection 1.2(a). The underwriter will be
          selected by the majority in interest of the Initiating Holders and
          shall be reasonably acceptable to the Company. In such event, the
          right of any Holder to include his Registrable Securities in such
          registration shall be conditioned upon such Holder's participation in
          such underwriting and the inclusion of such Holder's Registrable
          Securities in the underwriting (unless otherwise mutually agreed by a
          majority in interest of the Initiating Holders and such Holder) to the
          extent provided herein. All Holders proposing to distribute their
          securities through such underwriting shall (together with the Company
          as provided in subsection 1.4(e)) enter into an underwriting agreement
          in customary form with the underwriter or underwriters selected for
          such underwriting. Notwithstanding any other provision of this Section
          1.2, if the underwriter advises the Initiating Holders in writing that
          marketing factors require a limitation of the number of shares to be
          underwritten, then the Initiating Holders shall so advise all Holders
          of Registrable Securities which would otherwise be underwritten
          pursuant thereto, and the number of shares of Registrable Securities
          that may be included in the underwriting shall be allocated among all
          Holders thereof, including the Initiating Holders, in proportion (as
          nearly as practicable) to the amount of Registrable Securities of the
          Company owned by each Holder; provided, however, that the number of
          shares of Registrable Securities to be included in such underwriting
          shall not be reduced unless all other securities are first entirely
          excluded from the underwriting.

               (c) Notwithstanding the foregoing, if the Company shall furnish
          to Holders requesting a registration statement pursuant to this
          Section 1.2, a certificate signed by the President of the Company
          stating that in the good faith judgment of the Board of Directors of
          the Company, it would be seriously detrimental to the Company and its
          shareholders for such registration statement to be filed and it is
          therefore essential to defer the filing of such registration
          statement, the Company shall have the right to defer taking action
          with respect to such filing for a period of not more than ninety (90)
          days after delivery of the request of the Initiating Holders;
          provided, however, that the Company may not utilize this right more
          than once in any twelve-month period.

               (d) In addition, the Company shall not be obligated to effect, or
          to take any action to effect, any registration pursuant to this
          Section 1.2:

                    (i) after the Company has effected two registrations
               pursuant to this Section 1.2 and such registrations have been
               declared or ordered effective;

                    (ii) during the period starting with the date ninety (90)
               days prior to the Company's good faith estimate of the date of
               filing of, and ending on a date one hundred eighty (180) days
               after the effective date of, a registration subject to Section
               1.3 hereof; provided that the Company is actively employing in
               good faith all reasonable efforts to cause such registration
               statement to become effective; or

                    (iii) if the Initiating Holders propose to dispose of shares
               of Registrable Securities that may be immediately registered on
               Form S-3 pursuant to a request made pursuant to Section 1.12
               below.

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          1.3 Company Registration. If (but without any obligation to do so) the
     Company proposes to register (including for this purpose a registration
     effected by the Company for shareholders other than the Holders) any of its
     stock or other securities under the Act in connection with the public
     offering of such securities solely for cash (other than a registration
     relating solely to the sale of securities to participants in a Company
     stock plan, a registration on any form which does not include substantially
     the same information as would be required to be included in a registration
     statement covering the sale of the Registrable Securities), the Company
     shall, at such time, promptly give each Holder written notice of such
     registration. Upon the written request of each Holder given within twenty
     (20) days after delivery of such notice by the Company, the Company shall,
     subject to the provisions of Section 1.8, cause to be registered under the
     Act all of the Registrable Securities that each such Holder has requested
     to be registered.

          1.4 Obligations of the Company. Whenever required under this Section 1
     to effect the registration of any Registrable Securities, the Company
     shall, as expeditiously as reasonably possible:

               (a) Prepare and file with the SEC a registration statement with
          respect to such Registrable Securities and use its best efforts to
          cause such registration statement to become effective, and, upon the
          request of the Holders of a majority of the Registrable Securities
          registered thereunder, keep such registration statement effective for
          a period of up to one hundred twenty (120) days; provided, however,
          that (i) such 120-day period shall be extended for a period of time
          equal to the period the Holder refrains from selling any securities
          included in such registration at the request of an underwriter of
          Common Stock (or other securities) of the Company; and (ii) in the
          case of any registration of Registrable Securities on Form S-3 which
          are intended to be offered on a continuous or delayed basis, such
          120-day period shall be extended, if necessary, to keep the
          registration statement effective until all such Registrable Securities
          are sold, provided that Rule 415, or any successor rule under the Act,
          permits an offering on a continuous or delayed basis, and provided
          further that applicable rules under the Act governing the obligation
          to file a post-effective amendment permit, in lieu of filing a
          post-effective amendment which (I) includes any prospectus required by
          Section 10(a)(3) of the Act or (II) reflects facts or events
          representing a material or fundamental change in the information set
          forth in the registration statement, the incorporation by reference of
          information required to be included in (I) and (II) above to be
          contained in periodic reports filed pursuant to Section 13 or 15(d) of
          the 1934 Act in the registration statement.

               (b) Prepare and file with the SEC such amendments and supplements
          to such registration statement and the prospectus used in connection
          with such registration statement as may be necessary to comply with
          the provisions of the Act with respect to the disposition of all
          securities covered by such registration statement.

               (c) Furnish to the Holders such numbers of copies of a
          prospectus, including a preliminary prospectus, in conformity with the
          requirements of the Act, and such other documents as they may
          reasonably request in order to facilitate the disposition of
          Registrable Securities owned by them.

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               (d) Use its best efforts to register and qualify the securities
          covered by such registration statement under such other securities or
          Blue Sky laws of such jurisdictions as shall be reasonably requested
          by the Holders; provided that the Company shall not be required in
          connection therewith or as a condition thereto to qualify to do
          business or to file a general consent to service of process in any
          such states or jurisdictions.

               (e) In the event of any underwritten public offering, enter into
          and perform its obligations under an underwriting agreement, in usual
          and customary form, with the managing underwriter of such offering.
          Each Holder participating in such underwriting shall also enter into
          and perform its obligations under such an agreement.

               (f) Notify each Holder of Registrable Securities covered by such
          registration statement at any time when a prospectus relating thereto
          is required to be delivered under the Act of the happening of any
          event as a result of which the prospectus included in such
          registration statement, as then in effect, includes an untrue
          statement of a material fact or omits to state a material fact
          required to be stated therein or necessary to make the statements
          therein not misleading or incomplete in the light of the circumstances
          then existing, and at the request of any such Holder, prepare and
          furnish to such Holder a reasonable number of copies of a supplement
          to or an amendment of such prospectus as may be necessary so that, as
          thereafter delivered to the purchasers of such shares, such prospectus
          shall not include an untrue statement of a material fact or omit to
          state a material fact required to be stated therein or necessary to
          make the statements therein not misleading or incomplete in the light
          of the circumstances then existing.

               (g) Cause all such Registrable Securities to be listed on each
          securities exchange on which similar securities issued by the Company
          are then listed.

               (h) Provide a transfer agent and registrar and a CUSIP number for
          all such Registrable Securities, in each case not later than the
          effective date of such registration.

               (i) In the event of any underwritten public offering, cooperate
          with the selling Holders, the underwriters participating in the
          offering and their counsel in any due diligence investigation
          reasonably requested by the selling Holders or the underwriters in
          connection therewith, and participate, to the extent reasonably
          requested by the managing underwriter for the offering or the selling
          Holder, in efforts to sell the Registrable Securities under the
          offering (including, without limitation, participating in "roadshow"
          meetings with prospective investors) that would be customary for
          underwritten primary offerings of a comparable amount of equity
          securities by the Company.

          1.5 Furnish Information.

               (a) It shall be a condition precedent to the obligations of the
          Company to take any action pursuant to this Section 1 with respect to
          the Registrable Securities of any selling Holder that such Holder
          shall furnish to the Company such information regarding itself, the
          Registrable Securities held by it, and the intended method of
          disposition of such securities as shall be required to effect the
          registration of such Holder's Registrable Securities.

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               (b) The Company shall have no obligation with respect to any
          registration requested pursuant to Section 1.2 if, due to the
          operation of subsection 1.5(a), the number of shares or the
          anticipated aggregate offering price of the Registrable Securities to
          be included in the registration does not equal or exceed the number of
          shares or the anticipated aggregate offering price required to
          originally trigger the Company's obligation to initiate such
          registration as specified in subsection 1.2(a).

          1.6 Expenses of Demand Registration. All expenses other than
     underwriting discounts and commissions incurred in connection with
     registrations pursuant to Section 1.2, including (without limitation) all
     registration, filing and qualification fees, printers' and accounting fees,
     and fees and disbursements of counsel for the Company (including fees and
     disbursements of one counsel for the selling Holders) shall be borne by the
     Company; provided, however, that the Company shall not be required to pay
     for any expenses of any registration proceeding begun pursuant to Section
     1.2 if the registration request is subsequently withdrawn at the request of
     the Holders of a majority of the Registrable Securities to be registered
     (in which case all participating holders shall bear such expenses), unless
     the Holders of a majority of the Registrable Securities agree to forfeit
     their right to one demand registration pursuant to Section 1.2.

          1.7 Expenses of Company Registration. The Company shall bear and pay
     all expenses incurred in connection with any registration, filing or
     qualification of Registrable Securities with respect to registrations
     pursuant to Section 1.3 for each Holder, including (without limitation) all
     registration, filing, and qualification fees, printers and accounting fees
     relating or apportionable thereto and the fees and disbursements of one
     counsel for the selling Holders, but excluding in all cases underwriting
     discounts and commissions relating to Registrable Securities.

          1.8 Underwriting Requirements. In connection with any offering
     involving an underwriting of shares of the Company's capital stock, the
     Company shall not be required under Section 1.3 to include any of the
     Holders' securities in such underwriting unless they accept the terms of
     the underwriting as agreed upon between the Company and the underwriters
     selected by the Initiating Holders (or by other persons entitled to select
     the underwriters), and then only in such quantity as the underwriters
     determine in their sole discretion will not materially adversely affect the
     success of the offering by the Company. If the total amount of securities,
     including Registrable Securities, requested by shareholders to be included
     in such offering exceeds the amount of securities sold other than by the
     Company that the underwriters determine in their sole discretion is
     compatible with the success of the offering, then the Company shall be
     required to include in the offering only that number of such securities,
     including Registrable Securities, which the underwriters determine in their
     sole discretion will not jeopardize the success of the offering (the
     securities so included to be apportioned pro rata among the selling
     shareholders according to the total amount of securities entitled to be
     included therein owned by each selling Shareholder or in such other
     proportions as shall mutually be agreed to by such selling shareholders)
     but in no event shall (i) the amount of securities of the selling Holders
     included in the offering be reduced below thirty percent (30%) of the total
     amount of securities included in such offering, unless such offering is the
     initial public offering of the Company's securities in

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     which case the selling Holders may be excluded if the underwriters make the
     determination described above and no other shareholder's securities are
     included or (ii) notwithstanding (i) above, any shares being sold by a
     shareholder exercising a demand registration right similar to that granted
     in Section 1.2 be excluded from such offering. For purposes of the
     preceding parenthetical concerning apportionment, for any selling
     shareholder which is a holder of Registrable Securities and which is a
     partnership or corporation, the partners, retired partners and shareholders
     of such holder, or the estates and family members of any such partners and
     retired partners and any trusts for the benefit of any of the foregoing
     persons shall be deemed to be a single "selling shareholder," and any
     pro-rata reduction with respect to such "selling shareholder" shall be
     based upon the aggregate amount of shares carrying registration rights
     owned by all entities and individuals included in such "selling
     shareholder," as defined in this sentence.

          1.9 Delay of Registration. No Holder shall have any right to obtain or
     seek an injunction restraining or otherwise delaying any such registration
     as the result of any controversy that might arise with respect to the
     interpretation or implementation of this Section 1.

          1.10 Indemnification. In the event any Registrable Securities are
     included in a registration statement under this Section 1:

               (a) To the extent permitted by law, the Company will indemnify
          and hold harmless each Holder, each of its directors, officers and
          employees, and any underwriter (as defined in the Act) for such Holder
          and each person, if any, who controls such Holder or underwriter
          within the meaning of the Act or the 1934 Act, against any losses,
          claims, damages, or liabilities (joint or several) to which they may
          become subject under the Act, or the 1934 Act, insofar as such losses,
          claims, damages, or liabilities (or actions in respect thereof) arise
          out of or are based upon any of the following statements, omissions or
          violations (collectively a "Violation"): (i) any untrue statement or
          alleged untrue statement of a material fact contained in such
          registration statement, including any preliminary prospectus or final
          prospectus contained therein or any amendments or supplements thereto,
          (ii) the omission or alleged omission to state therein a material fact
          required to be stated therein, or necessary to make the statements
          therein not misleading, or (iii) any violation or alleged violation by
          the Company of the Act, the 1934 Act, or any rule or regulation
          promulgated under the Act, or the 1934 Act; and the Company will,
          promptly upon demand, pay to each such Holder, director, officer,
          employee, underwriter or controlling person any legal or other
          expenses reasonably incurred by them in connection with investigating
          or defending any such loss, claim, damage, liability, or action;
          provided, however, that the indemnity agreement contained in this
          subsection 1.10(a) shall not apply to amounts paid in settlement of
          any such loss, claim, damage, liability, or action if such settlement
          is effected without the consent of the Company (which consent shall
          not be unreasonably withheld), nor shall the Company be liable in any
          such case for any such loss, claim, damage, liability, or action to
          the extent that it arises out of or is based upon a Violation which
          occurs in reliance upon and in conformity with written information
          furnished expressly for use in connection with such registration by
          any such Holder, underwriter or controlling person.

               (b) To the extent permitted by law, each selling Holder will
          indemnify and hold harmless the Company, each of its directors, each
          of its officers who has signed the

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          registration statement, each person, if any, who controls the Company
          within the meaning of the Act or the 1934 Act, any underwriter, any
          other Holder selling securities in such registration statement and any
          controlling person of any such underwriter or other Holder, against
          any losses, claims, damages, or liabilities (joint or several) to
          which any of the foregoing persons may become subject, under the Act
          or the 1934 Act, insofar as such losses, claims, damages, or
          liabilities (or actions in respect thereto) arise out of or are based
          upon any Violation, in each case to the extent (and only to the
          extent) that such Violation occurs in reliance upon and in conformity
          with written information furnished by such Holder expressly for use in
          connection with such registration; and each such Holder will, promptly
          upon demand, pay any legal or other expenses reasonably incurred by
          any person intended to be indemnified pursuant to this subsection
          1.10(b), in connection with investigating or defending any such loss,
          claim, damage, liability, or action; provided, however, that the
          indemnity agreement contained in this subsection 1.10(b) shall not
          apply to amounts paid in settlement of any such loss, claim, damage,
          liability or action if such settlement is effected without the consent
          of the Holder, which consent shall not be unreasonably withheld;
          provided, that, in no event shall any indemnity under this subsection
          1.10(b) exceed the net proceeds from the offering received by such
          Holder.

               (c) Promptly after delivery by an indemnified party under this
          Section 1.10 of notice of the commencement of any action (including
          any governmental action), such indemnified party will, if a claim in
          respect thereof is to be made against any indemnifying party under
          this Section 1.10, deliver to the indemnifying party a written notice
          of the commencement thereof and the indemnifying party shall have the
          right to participate in, and, to the extent the indemnifying party so
          desires, jointly with any other indemnifying party similarly noticed,
          to assume the defense thereof with counsel mutually satisfactory to
          the parties; provided, however, that an indemnified party (together
          with all other indemnified parties which may be represented without
          conflict by one counsel) shall have the right to retain one separate
          counsel, with the reasonable fees and expenses to be paid by the
          indemnifying party, if representation of such indemnified party by the
          counsel retained by the indemnifying party would be inappropriate due
          to actual or potential differing interests between such indemnified
          party and any other party represented by such counsel in such
          proceeding. The failure to deliver written notice to the indemnifying
          party within a reasonable time of the commencement of any such action,
          if prejudicial to its ability to defend such action, shall relieve
          such indemnifying party of any liability to the indemnified party
          under this Section 1.10, but the omission so to deliver written notice
          to the indemnifying party will not relieve it of any liability that it
          may have to any indemnified party otherwise than under this Section
          1.10. Notwithstanding the foregoing, any indemnifying party shall not
          enter into any settlement of any such loss, claim, damage, liability
          or action without the full and complete release of all the indemnified
          parties.

               (d) If the indemnification provided for in this Section 1.10 is
          held by a court of competent jurisdiction to be unavailable to an
          indemnified party with respect to any loss, liability, claim, damage,
          or expense referred to therein, then the indemnifying party, in lieu
          of indemnifying such indemnified party hereunder, shall contribute to
          the amount paid or payable by such indemnified party as a result of
          such loss, liability, claim, damage, or expense in such proportion as
          is appropriate to reflect the relative fault of the indemnifying party
          on the one hand and of the indemnified party on the other in
          connection with the statements or omissions that

                                      -8-
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          resulted in such loss, liability, claim, damage, or expense as well as
          any other relevant equitable considerations. The relative fault of the
          indemnifying party and of the indemnified party shall be determined by
          reference to, among other things, whether the untrue or alleged untrue
          statement of a material fact or the omission to state a material fact
          relates to information supplied by the indemnifying party or by the
          indemnified party and the parties' relative intent, knowledge, access
          to information, and opportunity to correct or prevent such statement
          or omission.

               (e) Notwithstanding the foregoing, to the extent that the
          provisions on indemnification and contribution contained in the
          underwriting agreement entered into in connection with the
          underwritten public offering are in conflict with the foregoing
          provisions, the provisions in the underwriting agreement shall control
          with respect to the rights and obligations of each of the parties to
          such underwriting agreement.

               (f) The obligations of the Company and Holders under this Section
          1.10 shall survive the completion of any offering of Registrable
          Securities in a registration statement under this Section 1, and
          otherwise.

          1.11 Reports Under Securities Exchange Act of 1934. With a view to
     making available to the Holders the benefits of Rule 144 promulgated under
     the Act and any other rule or regulation of the SEC that may at any time
     permit a Holder to sell securities of the Company to the public without
     registration or pursuant to a registration on Form S-3, the Company agrees
     to:

               (a) make and keep public information available, as those terms
          are understood and defined in SEC Rule 144, at all times after ninety
          (90) days after the effective date of the first registration statement
          filed by the Company for the offering of its securities to the general
          public;

               (b) take such action, including the voluntary registration of its
          Common Stock under Section 12 of the 1934 Act, as is necessary to
          enable the Holders to utilize Form S-3 for the sale of their
          Registrable Securities, such action to be taken as soon as practicable
          after the end of the fiscal year in which the first registration
          statement filed by the Company for the offering of its securities to
          the general public is declared effective;

               (c) file with the SEC in a timely manner all reports and other
          documents required of the Company under the Act and the 1934 Act; and

               (d) furnish to any Holder, so long as the Holder owns any
          Registrable Securities, forthwith upon request (i) a written statement
          by the Company that it has complied with the reporting requirements of
          SEC Rule 144 (at any time after ninety (90) days after the effective
          date of the first registration statement filed by the Company), the
          Act and the 1934 Act (at any time after it has become subject to such
          reporting requirements), or that it qualifies as a registrant whose
          securities may be resold pursuant to Form S-3 (at any time after it so
          qualifies), (ii) a copy of the most recent annual or quarterly report
          of the Company and such other reports and documents so filed by the
          Company, and (iii) such other information as may be reasonably

                                      -9-
<PAGE>

          requested in availing any Holder of any rule or regulation of the SEC
          which permits the selling of any such securities without registration
          or pursuant to such form.

          1.12 Form S-3 Registration. In case the Company shall receive from a
     Holder a written request or requests that the Company effect a registration
     on Form S-3 with respect to all or a part of the Registrable Securities
     owned by such Holder or Holders, the Company will:

               (a) promptly give written notice of the proposed registration,
          and any related qualification or compliance, to all other Holders; and

               (b) as soon as practicable, effect such registration and all such
          qualifications and compliances as may be so requested and as would
          permit or facilitate the sale and distribution of all or such portion
          of such Holder's or Holders' Registrable Securities as are specified
          in such request, together with all or such portion of the Registrable
          Securities of any other Holder or Holders joining in such request as
          are specified in a written request given within fifteen (15) days
          after delivery of such written notice from the Company; provided,
          however, that the Company shall not be obligated to effect any such
          registration, qualification or compliance, pursuant to this section
          1.12: (i) if Form S-3 is not available for such offering by the
          Holders; (ii) if the Company shall furnish to the Holders a
          certificate signed by the President of the Company stating that in the
          good faith judgment of the Board of Directors of the Company, it would
          be seriously detrimental to the Company and its shareholders for such
          Form S-3 Registration to be effected at such time, in which event the
          Company shall have the right to defer the filing of the Form S-3
          registration statement for a period of not more than ninety (90) days
          after delivery of the request of the Holder or Holders under this
          Section 1.12; provided, however, that the Company shall not utilize
          this right more than once in any twelve month period; (iii) if the
          Company has, within the twelve (12) month period preceding the date of
          such request, already effected two (2) registrations on Form S-3 for
          the Holders pursuant to this Section 1.12; or (iv) in any particular
          jurisdiction in which the Company would be required to qualify to do
          business or to execute a general consent to service of process in
          effecting such registration, qualification or compliance.

               (c) Subject to the foregoing, the Company shall file a
          registration statement covering the Registrable Securities and other
          securities so requested to be registered as soon as practicable after
          delivery of the request or requests of the Holders. All expenses
          incurred in connection with a registration requested pursuant to
          Section 1.12, including (without limitation) all registration, filing,
          qualification, printer's and accounting fees and the reasonable fees
          and disbursements of one counsel for the selling Holder or Holders and
          counsel for the Company, but excluding any underwriters' discounts or
          commissions associated with Registrable Securities, shall be borne by
          the Company. Registrations effected pursuant to this Section 1.12
          shall not be counted as registrations effected pursuant to Sections
          1.2 or 1.3.

          1.13 Assignment of Registration Rights. The rights to cause the
     Company to register Registrable Securities pursuant to this Section 1 may
     be assigned (but only with all related obligations) by a Holder to a
     transferee or assignee of such securities, provided: (a) the Company is,
     within a reasonable time after such transfer, furnished with written notice
     of the

                                      -10-
<PAGE>

     name and address of such transferee or assignee and the Registrable
     Securities with respect to which such registration rights are being
     assigned; and (b) such transferee or assignee agrees in writing to be bound
     by and subject to the terms and conditions of this Agreement, including
     without limitation the provisions of Section 1.15 below.

          1.14 Limitations on Subsequent Registration Rights. From and after the
     date of this Agreement, the Company shall not, without the prior written
     consent of the Holders of a majority of the outstanding Registrable
     Securities, enter into any agreement with any holder or prospective holder
     of any securities of the Company which would allow such holder or
     prospective holder (a) to include such securities in any registration filed
     under Section 1.2 hereof, unless under the terms of such agreement, such
     holder or prospective holder may include such securities in any such
     registration only to the extent that the inclusion of his securities will
     not reduce the amount of the Registrable Securities of the Holders which is
     included or (b) to make a demand registration which could result in such
     registration statement being declared effective prior to the earlier of
     either of the dates set forth in subsection 1.2(a) or within one hundred
     eighty (180) days of the effective date of any registration effected
     pursuant to Section 1.2.

          1.15 "Market Stand-Off" Agreement. Each Investor hereby agrees that,
     during the period of duration specified by the Company and an underwriter
     of Common Stock or other securities of the Company, following the effective
     date of a registration statement of the Company filed under the Act, it
     shall not, to the extent requested by the Company and such underwriter,
     directly or indirectly sell, offer to sell, contract to sell (including,
     without limitation, any short sale), grant any option to purchase or
     otherwise transfer or dispose of (other than to donees who agree to be
     similarly bound) any securities of the Company held by it at any time
     during such period except Common Stock included in such registration;
     provided, however, that:

               (a) such agreement shall not exceed one hundred eighty (180) days
          for the first such registration statement of the Company which covers
          Common Stock (or other securities) to be sold on its behalf to the
          public in an underwritten offering;

               (b) such agreement shall not exceed ninety (90) days for any
          subsequent registration statement of the Company which covers Common
          Stock (or other securities) to be sold on its behalf to the public in
          an underwritten offering; and

               (c) an Investor shall not be subject to such agreement unless all
          executive officers and directors of the Company enter into similar
          agreements and all other Investors and holders of other registration
          rights are subject to or obligated to enter into similar agreements.

          In order to enforce the foregoing covenant, the Company may impose
     stop-transfer instructions with respect to the Registrable Securities of
     each Investor (and the shares or securities of every other person subject
     to the foregoing restriction) until the end of such period.

                                      -11-
<PAGE>

          1.16 Termination of Registration Rights. No Holder shall be entitled
     to exercise any right provided for in this Section 1 after the earlier of
     (i) five (5) years following the consummation of the sale of securities
     pursuant to a registration statement filed by the Company under the Act in
     connection with the initial firm commitment underwritten offering of its
     securities to the general public (the "IPO") and (ii) that date following
     the IPO upon which each Holder holds less than 1% of the then issued and
     outstanding shares of capital stock of the Company and such shares may be
     immediately sold under Rule 144 during any 90 day period.

2.   Covenants of the Company.

          2.1 Delivery of Financial Statements. The Company shall deliver to
     each Investor:

               (a) as soon as practicable, but in any event within ninety (90)
          days after the end of each fiscal year of the Company, an income
          statement for such fiscal year, a balance sheet of the Company and
          statement of shareholder's equity as of the end of such year, and a
          schedule as to the sources and applications of funds for such year,
          such year-end financial reports to be in reasonable detail, prepared
          in accordance with generally accepted accounting principles ("GAAP"),
          and audited and certified by independent public accountants of
          nationally recognized standing selected by the Company;

               (b) as soon as practicable, but in any event within forty-five
          (45) days after the end of each of the first three (3) quarters of
          each fiscal year of the Company, an unaudited profit or loss
          statement, schedule as to the sources and application of funds for
          such fiscal quarter and an unaudited balance sheet as of the end of
          such fiscal quarter;

               (c) within thirty (30) days of the end of each month, an
          unaudited income statement and schedule as to the sources and
          application of funds and unaudited balance sheet for and as of the end
          of such month, in reasonable detail;

               (d) as soon as practicable, but in any event thirty (30) days
          prior to the end of each fiscal year, a budget and business plan for
          the next fiscal year, prepared on a monthly basis, including balance
          sheets and sources and applications of funds statements for such
          months and, as soon as prepared, any other budgets or revised budgets
          prepared by the Company;

               (e) with respect to the financial statements called for in
          subsections (b) and (c) of this Section 2.1, an instrument executed by
          the Chief Financial Officer or President of the Company and certifying
          that such financial statements were prepared in accordance with GAAP
          consistently applied with prior practice for earlier periods (with the
          exception of footnotes that may be required by GAAP) and fairly
          present the financial condition of the Company and its results of
          operation for the period specified, subject to year-end audit
          adjustment;

               (f) such other information relating to the financial condition,
          business, prospects or corporate affairs of the Company as the
          Investor or any assignee of the Investor may from time to time
          request, provided, however, that the Company shall not be obligated
          under this

                                      -12-
<PAGE>

          subsection (f) or any other subsection of Section 2.1 to provide
          information which it deems in good faith to be a trade secret or
          similar confidential information.

          2.2 Inspection. The Company shall permit each Investor, at such
     Investor's expense, to visit and inspect the Company's properties, to
     examine its books of account and records and to discuss the Company's
     affairs, finances and accounts with its officers, all at such reasonable
     times and during normal working hours as may be requested by the Investor;
     provided, however, that the Company shall not be obligated pursuant to this
     Section 2.2 to provide access to any information which it reasonably
     considers to be a trade secret or similar confidential information.

          2.3 Termination of Information, Inspection and First Offer Covenants.
     The covenants set forth in Sections 2.1, 2.2 and 2.4 shall terminate and be
     of no further force or effect upon the IPO or when the Company first
     becomes subject to the periodic reporting requirements of Sections 12(g) or
     15(d) of the 1934 Act, whichever event shall first occur.

          2.4 Right of First Offer. Subject to the terms and conditions
     specified in this Section 2.4, the Company hereby grants to each Investor a
     right of first offer with respect to future sales by the Company of its
     Shares (as hereinafter defined). For purposes of this Section 2.4, Investor
     includes any general partners and affiliates of an Investor. An Investor
     shall be entitled to apportion the right of first offer hereby granted it
     among itself and its partners and affiliates in such proportions as it
     deems appropriate.

          Each time the Company proposes to offer any shares of, or securities
     convertible into or exercisable for any shares of, any class of its capital
     stock ("Shares"), the Company shall first make an offering of such Shares
     to each Investor in accordance with the following provisions:

               (a) The Company shall deliver a notice by certified mail
          ("Notice") to the Investors stating (i) its bona fide intention to
          offer such Shares, (ii) the number of such Shares to be offered, and
          (iii) the price and terms, if any, upon which it proposes to offer
          such Shares.

               (b) Within twenty (20) calendar days after delivery of the
          Notice, the Investor may elect to purchase or obtain, at the price and
          on the terms specified in the Notice, up to that portion of such
          Shares which equals the proportion that the number of shares of Common
          Stock issued and held, or issuable upon conversion of the Series A
          Preferred Stock and Series B Preferred Stock then held, by such
          Investor bears to the total number of shares of Common Stock of the
          Company then outstanding (assuming full conversion and exercise of all
          convertible or exercisable securities).

               (c) If all Shares which Investors are entitled to obtain pursuant
          to subsection 2.4(b) are not elected to be obtained as provided in
          subsection 2.4(b) hereof, the Company may, during the 30-day period
          following the expiration of the period provided in subsection 2.4(b)
          hereof, offer the remaining unsubscribed portion of such Shares to any
          person or persons at a price not less than, and upon terms no more
          favorable to the offeree than, those

                                      -13-
<PAGE>

          specified in the Notice. If the Company does not enter into an
          agreement for the sale of the Shares within such period, or if such
          agreement is not consummated within thirty (30) days of the execution
          thereof, the right provided hereunder shall be deemed to be revived
          and such Shares shall not be offered unless first reoffered to the
          Investors in accordance herewith.

               (d) The right of first offer in this Section 2.4 shall not be
          applicable to the issuance or sale of securities issued pursuant to
          the exercise or conversion of exercisable or convertible securities;
          securities issued pursuant to the terms of any joint venture agreement
          or in an acquisition of the business of any other corporation, or
          other business entity, by way of merger, reorganization, transfer of
          assets or consolidation (or any similar transaction) approved by the
          Board of Directors of the Company in good faith as being in the best
          interests of the Company and its shareholders; securities issued by
          the Company to a lender in connection with any bona fide arm's-length
          debt-financing transaction that is approved by the Board of Directors
          of the Company in good faith as being in the best interests of the
          Company and its shareholders, provided such borrowings do not have any
          equity features including warrants, options or other rights to
          purchase capital stock and are not convertible into capital stock of
          the Company; Common Stock issued pursuant to any arrangement approved
          by the Board of Directors to employees, officers and directors of, or
          consultants, advisors or other persons performing services for, the
          Company; securities issued to vendors or customers or to other persons
          in similar commercial situations with the Company if such issuance is
          approved by the Board of Directors; securities issued by the Company
          to a lessor, guarantor or other person in connection with any bona
          fide arm's-length lease financing transaction that is approved by the
          Board of Directors of the Company in good faith as being in the best
          interests of the Company and its shareholders; securities issued in
          connection with any stock split, stock dividend or recapitalization of
          the Company; and any right, option or warrant to acquire or any
          security convertible into the securities excluded from the definition
          of Shares pursuant to subsections (i) through (vii) above.

               (e) The right of first offer set forth in this Section 2.4 may
          not be assigned or transferred, except that such right is assignable
          by each Holder to any wholly owned subsidiary or parent of, or to any
          corporation or entity that is, within the meaning of the Act,
          controlling, controlled by or under common control with, any such
          Holder.

3.   Miscellaneous.

          3.1 Successors and Assigns. Except as otherwise provided herein, the
     terms and conditions of this Agreement shall inure to the benefit of and be
     binding upon the respective successors and assigns of the parties
     (including transferees of any shares of Registrable Securities). Nothing in
     this Agreement, express or implied, is intended to confer upon any party
     other than the parties hereto or their respective successors and assigns
     any rights, remedies, obligations, or liabilities under or by reason of
     this Agreement, except as expressly provided in this Agreement.

                                      -14-
<PAGE>

          3.2 Governing Law. This Agreement shall be governed by and construed
     under the laws of the State of New York as applied to agreements among New
     York residents entered into and to be performed entirely within New York.

          3.3 Counterparts. This Agreement may be executed in two or more
     counterparts, each of which shall be deemed an original, but all of which
     together shall constitute one and the same instrument.

          3.4 Titles and Subtitles. The titles and subtitles used in this
     Agreement are used for convenience only and are not to be considered in
     construing or interpreting this Agreement.

          3.5 Notices. Unless otherwise provided, any notice required or
     permitted under this Agreement shall be given in writing and shall be
     deemed effectively given or delivered upon (a) personal delivery to the
     party to be notified, (b) upon telefacsimile transmission to the party to
     be notified at the telefacsimile number indicated for such party on the
     signature page hereof, if any, or (c) upon deposit with an overnight
     courier service or the United States Post Office, by registered or
     certified mail, postage prepaid and addressed to the party to be notified
     at the address(es) indicated for such party on the signature page hereof,
     or at such other address as such party may designate by ten (10) days'
     advance written notice to the other parties.

          3.6 Expenses. If any action at law or in equity is necessary to
     enforce or interpret the terms of this Agreement, the prevailing party
     shall be entitled to reasonable attorneys' fees, costs and necessary
     disbursements in addition to any other relief to which such party may be
     entitled.

          3.7 Amendments and Waivers. Any term of this Agreement may be amended
     and the observance of any term of this Agreement may be waived (either
     generally or in a particular instance and either retroactively or
     prospectively), only with the written consent of the Company and the
     holders of a majority of the Registrable Securities then outstanding. Any
     amendment or waiver effected in accordance with this paragraph shall be
     binding upon each holder of any Registrable Securities then outstanding,
     each future holder of all such Registrable Securities, and the Company.

          3.8 Severability. If one or more provisions of this Agreement are held
     to be unenforceable under applicable law, such provision shall be excluded
     from this Agreement and the balance of the Agreement shall be interpreted
     as if such provision were so excluded and shall be enforceable in
     accordance with its terms.

          3.9 Entire Agreement. This Agreement (including the Exhibits hereto,
     if any) constitutes the full and entire understanding and
     agreement between the parties with regard to the subjects hereof and
     thereof.

                                      -15-
<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Investors' Rights
Agreement as of the date first above written.

                                   COMPANY:

                                   PEMSTAR INC., a Minnesota corporation

                                   By: /s/ Robert R. Murphy
                                       ----------------------------------------
                                       Robert R. Murphy, Chief Financial Officer

                         Address:  3535 Technology Drive N.W.
                                   Rochester, Minnesota 55901

                                   INVESTORS:

                                   LB I Group Inc.

                                   By: /s/ Michael J. Odrich
                                       -----------------------------------------
                                   Title: Vice President
                                          --------------------------------------

                         Address:  3 World Financial Center
                                   New York, NY  10285

                                   /s/ Jeffrey M. Drazan
                                   ---------------------------------------------
                                   Jeffrey M. Drazan

                         Address:
                                   ---------------------------------------------
                                   ---------------------------------------------

 [SIGNATURE PAGE TO THE FIRST AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT]
<PAGE>

                                   LEHMAN BROTHERS VENTURE
                                   PARTNERS L.P.

                                   By: Lehman Brothers Venture Associates Inc.
                                   Its: General Partner

                                   /s/ Michael J. Odrich
                                   ---------------------------------------------
                                   (Signature)
                                   Michael J. Odrich
                                   ---------------------------------------------
                                   (Name)
                                   President
                                   ---------------------------------------------
                                   (Title)

                                   LEHMAN BROTHERS VENTURE
                                   CAPITAL PARTNERS I, L.P.

                                   By: LB I Group Inc.
                                   Its: General Partner

                                   /s/ Michael J. Odrich
                                   ---------------------------------------------
                                   (Signature)
                                   Michael J. Odrich
                                   ---------------------------------------------
                                   (Name)
                                   Vice President
                                   ---------------------------------------------
                                   (Title)

                                   LEHMAN BROTHERS VC
                                   PARTNERS L.P.

                                   By: LB I Group Inc.
                                   Its: General Partner

                                   /s/ Michael J. Odrich
                                   ---------------------------------------------
                                   (Signature)
                                   Michael J. Odrich
                                   ---------------------------------------------
                                   (Name)
                                   Vice President
                                   ---------------------------------------------
                                   (Title)
<PAGE>

                                   SCHEDULE A
                                   ----------

                                    INVESTORS
                                    ---------

LB I Group Inc.

Jeffrey M. Drazan

Lehman Brothers Venture Partners L.P.

Lehman Brothers Venture Capital Partners I, L.P.

Lehman Brothers VC Partners L.P.<PAGE>

                                                                   EXHIBIT 10.11

                                  PEMSTAR INC.
                                  ------------
               FIRST AMENDED AND RESTATED SHAREHOLDERS' AGREEMENT
               --------------------------------------------------

     THIS FIRST AMENDED AND RESTATED SHAREHOLDERS' AGREEMENT is made as of the
day of June 1999, by and among PEMSTAR Inc., a Minnesota corporation (the
"Company"), the holders of Common Stock of the Company listed on the attached
Schedule A (individually, a "Common Holder" and collectively, the "Common
Holders"), and the holders of Series A Preferred Stock and Series B Preferred
Stock of the Company listed on the attached Schedule B (individually, a
"Preferred Holder" and collectively, the "Preferred Holders").

                                    RECITALS
                                    --------

     A. Pursuant to that certain Series B Preferred Stock Purchase Agreement
dated as of the date hereof among the Company and certain of the Preferred
Holders, certain of the Preferred Holders are purchasing or agreeing to purchase
an aggregate of 1,000,000 shares of the Company's Series B Preferred Stock (the
"Series B Financing").

     B. In order to induce certain of the Preferred Holders to purchase the
Series B Preferred Stock, the Common Holders desire to grant to the Company and
the Preferred Holders rights of first refusal and co-sale with respect to the
Common Holders' shares of Common Stock of the Company.

     NOW, THEREFORE, in consideration of the mutual covenants set forth herein,
the parties agree as follows:

     1. Definitions.

          a. "Common Stock" shall mean the Company's Common Stock and shares of
     Common Stock issued or issuable upon conversion of the Company's
     outstanding Preferred Stock.

          b. "Preferred Stock" shall mean the Company's Series A Preferred Stock
     and Series B Preferred Stock now owned or subsequently acquired by the
     Preferred Holders.

          c. "Stock" shall mean shares of the Company's Common Stock now owned
     or subsequently acquired by the Common Holders.

          d. "Transfer" shall mean any direct or indirect sale, exchange,
     transfer, assignment, pledge, creation of a security interest in, or
     encumbrance on, or other disposition by a Common Holder of all or any
     portion of such Common Holder's interest in the Common Stock or any
     economic interest therein (including without limitation by means of any
     participation or swap transaction).
<PAGE>

     2. Right of First Refusal.

          a. Notice to the Company and Preferred Holders.

               (1) In the event any Common Holder (the "Transferring
          Shareholder") desires to Transfer any Stock other than as specifically
          provided in Section 5 below, such Transferring Shareholder must
          deliver a notice in writing by certified mail ("Notice") to the
          Company stating (A) his bona fide intention to Transfer such shares,
          (B) the number of such shares to be Transferred, (C) the price, if
          any, for which he proposes to Transfer such shares, and (D) the name
          of the proposed purchaser or transferee.

               (2) In the event the proposed Transfer is partially or completely
          in exchange for assets other than cash, then such assets shall be
          deemed to have a cash value in the amount determined by the Company's
          Board of Directors in its sole good faith opinion, in which case such
          cash value ascertained by the Board, when added to any cash to be
          exchanged and then divided by the number of shares of Stock to be
          Transferred, shall be deemed the price per share set forth in the
          Notice. In the event of a gift, property settlement or other Transfer
          in which the proposed purchaser or transferee is not paying the full
          price for the Stock, which Transfer is not otherwise exempted from the
          terms of Section 2 and 3 hereof, the price shall be deemed to be the
          fair market value of the Stock as determined in good faith by the
          Board of Directors.

          b. Company Right of First Refusal. The Company shall have an
     exclusive, irrevocable option (the "Company Option"), at any time within
     twenty (20) days of receipt of the Notice, to purchase all (but not less
     than all) of the Stock to which the Notice refers at the price per share
     specified in the Notice (as determined in Section 2(a)(ii)). The Company
     shall exercise the Company Option by written notice signed by an officer of
     the Company and delivered or mailed to the Transferring Shareholder (the
     "Company Settlement Notice"), which notice shall specify the time, place
     and date for settlement of such purchase.

          c. Company Settlement. Within ten (10) days of receipt of the Company
     Settlement Notice, the Transferring Shareholder must deliver to the Company
     all certificates for the Stock being acquired by the Company, together with
     proper assignments in blank of the Stock with signatures properly
     guaranteed and with such other documents as may be required by the Company
     to provide reasonable assurance that each necessary endorsement is genuine
     and effective, and the Company must thereupon deliver to the Transferring
     Shareholder full cash payment for the Stock being acquired, provided that
     if the terms of payment set forth in the Notice were other than cash
     against delivery, the Company shall pay for said shares on the same terms
     and conditions set forth in such Notice.

          d. Preferred Holders' Right of First Refusal. In the event that the
     Company does not exercise the Company Option, the Company shall, not later
     than twenty (20) days from the date of receipt of the Notice, give written
     notice to the Preferred Holders of the Company's nonexercise of the Company
     Option, which notice
<PAGE>

     shall enclose the Notice and shall specify the procedures by which each
     Preferred Holder may exercise the option to purchase not more than its Pro
     Rata Share (as defined in Section 2(g) below) of the Stock to which the
     Notice refers (the "Preferred Holder Option"). For twenty (20) calendar
     days following the expiration of the Company Option, each Preferred Holder
     may exercise its Preferred Holder Option at the same price and upon the
     same terms as set forth in the Notice. Any Preferred Holder desiring to
     exercise its Preferred Holder Option shall deliver to the Company and to
     the Transferring Shareholder a written notice of election to purchase the
     shares with respect to which the Preferred Holder Option is to be
     exercised.

          e. Assignment of Preferred Holder Option. Each Preferred Holder may
     assign its rights under this Section 2 to (i) any of its limited partners
     or shareholders, (ii) any entity related to or affiliated with such
     Preferred Holder, or (iii) another Preferred Holder; provided, however,
     that if payment is to be made in any manner other than all cash against
     delivery of the Stock being sold, such assignee must be at least as
     creditworthy as the Preferred Holder so assigning its rights or the payment
     for the Stock must be guaranteed by the Preferred Holder so assigning its
     rights, and provided, further, however, that the issuance of such shares of
     Stock to the assignee shall be exempt from registration.

          f. Preferred Holder Settlement. Promptly upon expiration of the
     Preferred Holder Option, the Company shall deliver a notice in writing to
     the Transferring Shareholder and each Preferred Holder and/or assignee who
     elected to acquire a portion of the Stock subject to the Preferred Holder
     Option (the "Preferred Holder Settlement Notice") setting forth the number
     of shares of Stock to be sold to each Preferred Holder and/or assignee and
     the price thereof. Within ten (10) days of receipt of the Preferred Holder
     Settlement Notice, the Transferring Shareholder must deliver to the Company
     any certificates for the Stock being acquired by the Preferred Holders
     and/or assignees, together with proper assignments in blank of the Stock
     with signatures properly guaranteed and with such other documents as may be
     required by the Company to provide reasonable assurance that each necessary
     endorsement is genuine and effective. Within ten (10) days of receipt of
     the Preferred Holder Settlement Notice, each Preferred Holder and/or
     assignee acquiring a portion of the Stock must deliver to the Company full
     cash payment for the portion of the subject Stock being so acquired,
     provided that if the terms of payment set forth in the Notice were other
     than cash against delivery, the Preferred Holders electing to acquire a
     portion of the subject Stock and/or their assignees shall pay for said
     shares on the same terms and conditions set forth in such Notice. The
     Company shall thereafter promptly remit full payment for the Stock acquired
     hereby to the Transferring Shareholder and deliver the new or assigned
     certificates to the Preferred Holders and/or assignees, as appropriate.

          g. Determination of Pro Rata Share. For purposes of Section 2 above,
     each Preferred Holder's "Pro Rata Share" is the ratio of (i) the total
     number of shares of Common Stock and Preferred Stock held by such Preferred
     Holder as of the date of the Notice (on an as-converted to Common Stock
     basis) to (ii) the total aggregate shares of Common Stock and Preferred
     Stock held by all Preferred Holders
<PAGE>

     as of such date that have elected to exercise the Preferred Holder Option
     (on an as-converted to Common Stock basis).

     3. Co-Sale Rights.

          a. Notice to Preferred Holders. In the event that less than all of the
     shares of Stock proposed to be Transferred by a Transferring Shareholder
     are acquired by the Company and/or Preferred Holders (or their assignees)
     pursuant to the Company Option and/or the Preferred Holder Option set forth
     in Section 2 above (collectively, the "Options"), the Company shall
     deliver, promptly upon expiration of the Options, a notice in writing to
     each Preferred Holder (the "Co-Sale Notice") reiterating the names of the
     prospective purchaser, a transferee, the number of shares of Stock proposed
     to be Transferred and not acquired pursuant to the Options, and the price
     per share at which such shares are proposed to be Transferred.

          b. Rights of Co-Sale. Each Preferred Holder shall have the right,
     exercisable upon written notice to the Transferring Shareholder within ten
     (10) days after receipt of the Co-Sale Notice, to participate in such sale
     of Stock on the same terms and conditions. To the extent one or more of the
     Preferred Holders exercise such right of participation in accordance with
     the terms and conditions set forth below, the number of shares of Stock
     that the Transferring Shareholder may sell in the transaction shall be
     correspondingly reduced.

          c. Determination of Participation Right. Each Preferred Holder may
     sell all or any part of that number of shares of Preferred Stock or Common
     Stock equal to the product obtained by multiplying (i) the aggregate number
     of shares of Stock covered by the Co-Sale Notice by (ii) a fraction the
     numerator of which is the number of shares of Common Stock owned by or
     issuable upon conversion of the shares of Preferred Stock owned by such
     Preferred Holder at the time of the Transfer and the denominator of which
     is the total number of shares of Common Stock owned by the Transferring
     Shareholder plus the number of shares of Common Stock owned by or issuable
     upon conversion of the shares of Preferred Stock owned by all of the
     Preferred Holders at the time of the Transfer.

          d. Rights of Participating Preferred Holders. If any Preferred Holder
     fails to elect to fully participate in such Transferring Shareholder's sale
     pursuant to this Section 3, the Transferring Shareholder shall give notice
     of such failure to the Preferred Holders who did so elect (the
     "Participating Preferred Holders"). Such notice may be made by telephone if
     confirmed in writing within two (2) days. The Participating Preferred
     Holders shall have the right, exercisable upon written notice to the
     Transferring Shareholder within five (5) days from the date such notice was
     given, to sell additional shares of Common Stock or Preferred Stock equal
     to their pro rata share of the unsold portion. For purposes of this Section
     3(d), a Participating Preferred Holder's pro rata share of the unsold
     portion shall be the ratio of (x) the number of shares of Common Stock held
     by or issuable upon conversion of the shares of Preferred Stock held by
     such Participating Preferred Holder to (y) the total number of shares of
     Common Stock held by or issuable upon conversion of the shares of Preferred
     Stock held by all of the Participating Preferred Holders plus the number of
     shares of
<PAGE>

     Common Stock held by the Transferring Shareholder.

          e. Delivery of Shares. Each Participating Preferred Holder shall
     effect its participation in the sale by promptly delivering to the
     Transferring Shareholder for transfer to the prospective purchaser or
     transferee one or more certificates, properly endorsed for transfer, which
     represent:

               (1) the type and number of shares of Common Stock which such
          Participating Preferred Holder elects to sell; or

               (2) that number of shares of Preferred Stock which is at such
          time convertible into the number of shares of Common Stock which such
          Participating Preferred Holder elects to sell; provided, however, that
          if the prospective purchaser or transferee objects to the delivery of
          Preferred Stock in lieu of Common Stock, such Participating Preferred
          Holder shall convert such Preferred Stock into Common Stock and
          deliver Common Stock as provided in Section 3(e)(i) above. The Company
          agrees to make any such conversion concurrent with the actual transfer
          of such shares to the purchaser or transferee.

          f. Settlement. The stock certificate or certificates that the
     Participating Preferred Holder delivers to the Transferring Shareholder
     pursuant to Section 2(e) shall be transferred to the prospective purchaser
     or transferee in consummation of the sale of the Stock pursuant to the
     terms and conditions specified in the Co-Sale Notice, and the Transferring
     Shareholder shall concurrently therewith remit to such Participating
     Preferred Holder that portion of the sale proceeds to which such
     Participating Preferred Holder is entitled by reason of its participation
     in such sale. To the extent that any prospective purchaser or transferee
     prohibits such assignment or otherwise refuses to purchase shares or other
     securities from a Participating Preferred Holder exercising its rights of
     co-sale hereunder, the Transferring Shareholder shall not sell to such
     prospective purchaser or transferee any Stock unless and until,
     simultaneously with such sale, the Transferring Shareholder shall purchase
     such shares or other securities from such Participating Preferred Holder.

          g. No Prejudice from Non-Exercise. The exercise or non-exercise of the
     rights of the Preferred Holders hereunder to participate in one or more
     sales of Stock made by the Transferring Shareholder shall not adversely
     affect their rights to participate in subsequent sales of Stock subject to
     this Section 3.

     4. Additional Rights of Preferred Holders.

          a. Prohibited Transfers. In the event a Common Holder should sell any
     Stock in contravention of the co-sale rights of the Preferred Holders under
     Section 3 (a "Prohibited Transfer"), the Preferred Holders, in addition to
     such other remedies as may be available at law, in equity or hereunder,
     shall have the put option provided below, and the Common Holder shall be
     bound by the applicable provisions of such option.
<PAGE>

          b. Grant of Put Option. In the event of a Prohibited Transfer, each
     Preferred Holder shall have the right to sell to the Common Holder the type
     and number of shares of Stock equal to the number of shares each Preferred
     Holder would have been entitled to transfer to the purchaser or transferee
     had the Prohibited Transfer been effected pursuant to and in compliance
     with the terms of Section 3 above (the "Put Option"). Such sale shall be
     made on the following terms and conditions:

               (1) The price per share at which the shares are to be sold to the
          Common Holder shall be equal to the price per share paid by the
          purchaser or transferee to the Common Holder in the Prohibited
          Transfer. The Common Holder shall also reimburse each Preferred Holder
          for any and all reasonable fees and expenses, including reasonable
          legal fees and expenses, incurred pursuant to the exercise of the Put
          Option.

               (2) Within forty-five (45) days after the later of the dates on
          which the Preferred Holder (A) received notice of the Prohibited
          Transfer or (B) otherwise becomes aware of the Prohibited Transfer,
          each Preferred Holder shall, if exercising the Put Option, deliver to
          the Common Holder a notice exercising the Put Option (the "Put Option
          Notice").

               (3) Immediately upon receipt of the Put Option Notice, the Common
          Holder shall make available the aggregate purchase price therefor and
          the amount of reimbursable fees and expenses, as specified in Section
          4(b)(i), in cash or by other means acceptable to the Preferred Holder.
          The Preferred Holder shall concurrently make available to the Common
          Holder the certificate or certificates representing the shares to be
          sold, each properly endorsed for transfer.

               c. Prohibited Transfers Void. Notwithstanding the foregoing, any
          attempt by a Common Holder to Transfer Stock in violation of Sections
          2 or 3 hereof, whether voluntarily or involuntarily, shall be void and
          the Company agrees it will use its reasonable best efforts to not
          effect such a Transfer or treat any alleged transferee as the holder
          of such Stock.

     5. Exempt Transfers.

          a. Transfers to Affiliates. Notwithstanding the rights of first
     refusal and co-sale rights set forth in Sections 2 and 3 of this Agreement,
     a Common Holder may Transfer all or any part of the Stock owned by such
     Common Holder:

               (1) in the case of individuals, (A) to members of his or her
          Immediate Family if by gift, where "Immediate Family" means any
          parent, spouse, child, grandchild, brother or sister of the Common
          Holder or any trust for the sole benefit of any or all of such
          persons, and (B) to his or her heirs, executors or other fiduciaries
          pursuant to a last will and testament; and

               (2) in the case of any other Common Holder, (A) to its
          Affiliates, where "Affiliates" means any other person or entity that,
          directly or indirectly,
<PAGE>

          through one or more intermediaries, is in control of, is controlled
          by, or is under common control with such Common Holder, and (B) to its
          successors in interest.

          b. De Minimus Transfers. Notwithstanding the Preferred Holders'
     co-sale rights set forth in Section 3 of this Agreement, each Common Holder
     may Transfer up to a cumulative total of twenty-five thousand (25,000)
     shares of Stock (subject to appropriate adjustment for stock splits, stock
     dividends, combinations and other recapitalizations) owned by such Common
     Holder free of the Preferred Holders' co-sale rights.

          c. Prior Agreement. Notwithstanding the rights of first refusal and
     co-sale rights set forth in Sections 2 and 3 of this Agreement, a Common
     Holder, if a party thereto, may Transfer all or any part of the Stock owned
     by such Common Holder to the Company or certain other shareholders of the
     Company pursuant to the terms of that certain Shareholder Agreement dated
     June 4, 1994 (the "Prior Agreement"), provided, however, that if any of the
     shares of Stock to be Transferred by a Common Holder to a third party is
     not purchased by the Company or the other shareholders pursuant to the
     terms of the Prior Agreement, then such shares shall remain subject to the
     Preferred Holder Option.

          d. Conditions to Exempt Transfers. Any Transfer of Stock made pursuant
     to the provisions of Section 5.a. or 5.c. above shall be subject to the
     following:

               (1) Prior to the completion of such Transfer, each such
          transferee or such transferee's legal representative shall have
          executed documents in form and substance satisfactory to the Company,
          evidenced by the Company's written acknowledgement of such
          satisfaction, assuming the obligations of a Common Holder under this
          Agreement with respect to the transferred Stock; and

               (2) Such transferred Stock shall remain subject to the provisions
          of this Agreement, and the transferee shall be treated as a "Common
          Holder" for purposes of this Agreement.

     6. Termination of Restrictions on Transfers. The rights of first refusal
and the co-sale rights under Sections 2 and 3 of this Agreement shall terminate
upon the occurrence of any one of the following events: (a) the liquidation,
dissolution or indefinite cessation of the business operations of the Company;
(b) the execution by the Company of a general assignment for the benefit of
creditors or the appointment of a receiver or trustee to take possession of all
or substantially all of the property and assets of the Company; or (c) upon the
effective date of a bona fide firm commitment underwritten public offering of
the Company's Common Stock registered under the Securities Act of 1933, as
amended, on Form S-1 (or any successor form designated by the Securities and
Exchange Commission).
<PAGE>

     7. Agreement to Vote for Series A Nominee.

          a. For so long as 250,000 shares (subject to appropriate adjustment
     for stock splits, stock dividends, combinations and other
     recapitalizations) of the Company's Series A Preferred Stock (and/or the
     Common Stock issuable upon conversion thereof) are held by any of the
     Preferred Holders, the Common Holders agree to vote all shares of Common
     Stock now or hereafter owned by them to elect to the Company's board of
     directors a nominee of the majority of the holders of the Series A
     Preferred Stock (the "Series A Nominee").

          b. Prior to each election of directors of the Company, the majority of
     the holders of the Series A Preferred Stock shall designate the Series A
     Nominee in writing to the Company. The Company shall promptly notify each
     of the Common Holders of such nominee. Any vacancy occurring because of the
     death, resignation, removal or disqualification of the Series A Nominee
     shall be filled according to this Section 7.

          c. The Company and the Common Holders agree to use their best efforts
     to ensure that the rights given to the holders of the Series A Preferred
     Stock pursuant to this Section 7 are effective and that the such holders
     shall enjoy the benefits hereof. Such best efforts shall include, without
     limitation, the use of the Company's and the Common Holders' best efforts
     to cause the Series A Nominee to be elected as a director of the Company at
     each election of the board of directors. Neither the Company nor the Common
     Holders shall, by any voluntary action, avoid or seek to avoid the
     observance or performance of any of the terms to be performed hereunder,
     but shall at all times in good faith assist in the carrying out of all of
     the provisions of this Section 7, and shall use their best efforts to
     protect the rights of the holders of the Series A Preferred Stock against
     impairment.

     8. Legends; Stop Transfer Instructions.

          a. Legends. Each certificate representing shares of Stock now or
     hereafter owned by the Common Holders or issued to any person in connection
     with a Transfer pursuant to Section 5 hereof shall be endorsed with the
     following legend:

         "THE SALE, PLEDGE, HYPOTHECATION, TRANSFER OR VOTING OF THE SHARES
         REPRESENTED BY THIS CERTIFICATE IS RESTRICTED BY AND SUBJECT TO THE
         PROVISIONS OF A SHAREHOLDERS' AGREEMENT, AS THE SAME MAY BE AMENDED
         FROM TIME TO TIME, AMONG THE PARTIES NAMED THEREIN, A COPY OF WHICH IS
         AVAILABLE AT THE PRINCIPAL OFFICE OF THE ISSUER OF SUCH SHARES."

          b. Stop Transfer Instructions. Each Common Holder agrees that the
     Company may instruct its transfer agent to impose transfer restrictions on
     the shares represented by certificates bearing the legend referred to in
     Section 8(a) above to enforce the provisions of this Agreement and the
     Company agrees to promptly do so. The legend shall be removed upon
     termination of this Agreement.
<PAGE>

     9. "Market Stand-off" Agreement. Each Common Holder hereby agrees that,
during the period of duration specified by the Company and an underwriter of
Common Stock or other securities of the Company, following the effective date of
a registration statement of the Company filed under the Act, it shall not, to
the extent requested by the Company and such underwriter, directly or indirectly
sell, offer to sell, contract to sell (including, without limitation, any short
sale), grant any option to purchase or otherwise Transfer or dispose of (other
than to donees who agree to be similarly bound) any securities of the Company
held by it at any time during such period except Common Stock included in such
registration; provided, however, that:

          a. such agreement shall not exceed one hundred eighty (180) days for
     the first such registration statement of the Company which covers Common
     Stock (or other securities) to be sold on its behalf to the public in an
     underwritten offering; and

          b. such agreement shall not exceed ninety (90) days for any subsequent
     registration statement of the Company which covers Common Stock (or other
     securities) to be sold on its behalf to the public in an underwritten
     offering.

     In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the Stock of each Common Holder (and
the shares or securities of every other person subject to the foregoing
restriction) until the end of such period.

     10. Additional Issuances of Common Stock. The Company agrees that, except
for Common Stock issued pursuant to any arrangement approved by the Board of
Directors to employees, officers and directors of, or consultants, advisors or
other persons performing services for, the Company, it shall not issue any
additional shares of Common Stock or Preferred Stock after the date hereof until
the issuee of such shares agrees to become a party to this Agreement as a Common
Holder and has executed a counterpart signature page to this Agreement provided,
however, that if a Preferred Holder purchases additional shares of Common or
Preferred Stock after the date hereof, then the Company shall not require such
Preferred Holder to become a party to this Agreement as a Common Holder. Except
as provided for in the immediately preceding sentence, any issuance of Common
Stock or Preferred Stock without the issuee becoming a party hereto shall be
void until such issuee has agreed to be bound by the terms hereof and has signed
a counterpart signature page to this Agreement.

     11. Miscellaneous.

          a. Conditions to Exercise of Rights. Exercise of the rights granted to
     the Company and the Preferred Holders under this Agreement shall be subject
     to and conditioned upon, and the parties shall use their best efforts to
     assist the Company and the Preferred Holders in, compliance with applicable
     laws.
<PAGE>

          b. Corporate Law Compliance. The right of the Company to repurchase
     any of the Stock is subject to the restrictions governing the rights of a
     corporation to purchase its own shares contained in the Minnesota Business
     Corporation Act and such other pertinent governmental restrictions as may
     from time to time be effective.

          c. Governing Law. This Agreement shall be governed by and construed
     under the laws of the State of New York as applied to agreements among New
     York residents entered into and to be performed entirely within New York.

          d. Amendment. Any provision of this Agreement may be amended and the
     observance thereof may be waived (either generally or in a particular
     instance and either retroactively or prospectively), only by the written
     consent of (i) as to the Company, only by the Company, (ii) as to the
     Preferred Holders, by persons holding more than fifty percent (50%) in
     interest of the Preferred Stock and Common Stock issuable upon the
     conversion thereof then held by the Preferred Holders and their assignees
     pursuant to Section 11(e) hereof, and (iii) as to the Common Holders, by
     persons holding more than fifty percent (50%) in interest of the Common
     Stock then held by the Common Holders; provided, however, that the
     amendment or waiver of any provision of this Agreement that affects a
     Common Holder in a manner that is adverse to such Common Holder and does
     not similarly affect all other Common Holders shall require the written
     consent of such Common Holder; provided further, that any Preferred Holder
     may individually waive any of his rights hereunder without obtaining the
     consent of any other Preferred Holder. Any amendment or waiver effected in
     accordance with this Section shall be binding upon the Company, each Common
     Holder, each Preferred Holder and their successors and permitted assigns,
     even if the Common Holder, Preferred Holder or their successors and
     permitted assigns has not executed such amendment or waiver.
     Notwithstanding the foregoing, any waiver by a Preferred Holder, or the
     Preferred Holders, as to any one Common Holder or as to any one transaction
     shall not waive any of the Preferred Holders' rights as to any other Common
     Holder or as to any other transaction.

          e. Assignment of Rights. This Agreement and the rights and obligations
     of the parties hereunder shall inure to benefit of, and be binding upon,
     their respective successors, permitted assigns and legal representatives.

          f. Term. This Agreement shall terminate upon the earlier of (i) the
     closing of a firm commitment underwritten public offering of shares of the
     Company's capital stock pursuant to a registration statement on Form S-1
     under the Securities Act of 1933, as amended, or (ii) the closing of the
     Company's sale of all or substantially all of its assets or the acquisition
     of the Company by another entity by means of merger or consolidation
     resulting in the exchange of the outstanding shares of the Company's
     capital stock for securities or consideration issued, or caused to be
     issued, by the acquiring entity or its subsidiary.

          g. Power of Attorney. Each Common Holder and Preferred Holder, by
     executing this Agreement, irrevocably appoints each of the officers of the
     Company his, her or its true and lawful attorney-in-fact to execute any
     amendments
<PAGE>

     hereto for the sole purpose of adding or deleting Common Holders or
     Preferred Holders.

          h. Entire Agreement. This Agreement constitutes the entire agreement
     among the parties and no party shall be liable or bound to any other party
     in any manner by any warranties, representations, or covenants except as
     specifically set forth herein. This Agreement terminates and supersedes in
     all respects that certain Shareholders' Agreement dated February 12, 1998
     among the Company, the Common Holders and the holders of Series A Preferred
     Stock.

          i. Notices. Unless otherwise provided, any notice required or
     permitted under this Agreement shall be given in writing and shall be
     deemed effectively given upon (a) personal delivery to the party to be
     notified, (b) upon telefacsimile transmission to the party to be notified
     at the telefacsimile number indicated for such party on the signature page
     hereof, if any, or (c) upon deposit with an overnight courier service or
     the United States Post Office, by registered or certified mail, postage
     prepaid and addressed to the party to be notified at the address(es)
     indicated for such party on the signature page hereof, or at such other
     address as such party may designate by ten (10) days' advance written
     notice to the other parties. Notwithstanding the foregoing, the telephone
     notice permitted by Section 3(d) shall be effective at the time it is given
     if confirmed in writing within two (2) days.

          j. Additional Parties to Agreement. Any individuals and/or entities
     that hold any shares of the Common Stock of the Company shall be entitled
     to become a party to this Agreement, and the addition of such individuals
     and/or entities as parties to this Agreement and any required amendment of
     Schedule A in connection therewith shall not be considered an amendment of
     this Agreement requiring the consent of the Common Holders or the Preferred
     Holders. Upon execution of a counterpart signature page to this Agreement
     by any of such individuals and/or entities, such individuals and/or
     entities shall become parties to this Agreement to the same extent as if
     they had executed this Agreement as of the date hereof and shall be
     included in the definition of "Common Holders" under this Agreement for all
     purposes. Schedule A to this Agreement shall be automatically amended as
     appropriate to reflect the addition of such individuals and/or entities as
     Common Holders under this Agreement.

          k. Ownership. Each Common Holder represents and warrants that he is
     the sole legal and beneficial owner of the shares of Stock subject to this
     Agreement and that no other person has any interest (other than a community
     property interest) in such shares.

          l. Severability. If one or more provisions of this Agreement are held
     to be unenforceable under applicable law, such provision shall be excluded
     from this Agreement and the balance of the Agreement shall be interpreted
     as if such provision were so excluded and shall be enforceable in
     accordance with its terms.

          m. Attorneys' Fees. In the event that any dispute among the parties to
     this Agreement should result in litigation, the prevailing party in such
     dispute
<PAGE>

     shall be entitled to recover from the losing party all reasonable fees,
     costs and expenses of enforcing any right of such prevailing party under or
     with respect to this Agreement, including without limitation, such
     reasonable fees and expenses of attorneys and accountants, which shall
     include, without limitation, all fees, costs and expenses of appeals.

          n. Titles and Subtitles. The titles and subtitles used in this
     Agreement are used for convenience only and are not to be considered in
     construing or interpreting this Agreement.

          o. Counterparts. This Agreement may be executed in one or more
     counterparts, each of which shall be deemed an original, but all of which
     together shall constitute one and the same instrument.

          p. Shares Bound by this Agreement. The parties executing this
     Agreement as a Common Holder agree that such party is bound by the
     obligations of a Common Holder hereunder with regard to any and all shares
     of Common Stock of the Company held by such party in such party's sole
     name, in joint tenancy, as a trustee or a co-trustee, or in any form of
     beneficial ownership (as defined in Rule 13d-3 promulgated by the
     Securities and Exchange Commission under the Securities Exchange Act of
     1934).
<PAGE>

     The foregoing Shareholders' Agreement is hereby executed as of the date
first above written.

                                      THE COMPANY:

                                      PEMSTAR INC., a Minnesota corporation

                                  By:
                                      Robert R. Murphy, Chief Financial Officer

                      Address:        3535 Technology Dr. N.W.
                                      Rochester, Minnesota 55901

                                      PREFERRED HOLDERS:

                                      LB I Group Inc.

                                      By:
                                      Title:

                      Address:        3 World Financial Center
                                      New York, NY  10285

                  [SIGNATURE PAGE TO FIRST AMENDED AND RESTATED
                            SHAREHOLDERS' AGREEMENT]

                                      Jeffrey M. Drazan

                      Address:
                                      ------------------------------------------

                                      ------------------------------------------

                                      LEHMAN BROTHERS VENTURE
                                      PARTNERS L.P.

                                     By: Lehman Brothers Venture Associates Inc.
                                     Its: General Partner

                                      (Signature

                                      (Name)
<PAGE>

                                      (Title)

                      Address:        3 World Financial Center
                                      New York, NY  10285

                                      LEHMAN BROTHERS VENTURE
                                      CAPITAL PARTNERS I, L.P.

                                      By: LB I Group Inc.
                                      Its: General Partner

                                      (Signature

                                      (Name)

                                      (Title)

                      Address:        3 World Financial Center
                                      New York, NY  10285

                  [SIGNATURE PAGE TO FIRST AMENDED AND RESTATED
                            SHAREHOLDERS' AGREEMENT]
<PAGE>

                                      LEHMAN BROTHERS VC
                                      PARTNERS L.P.

                                      By: LB I Group Inc.
                                      Its: General Partner

                                      (Signature

                                      (Name)

                                      (Title)

                      Address:        3 World Financial Center
                                      New York, NY  10285

                  [SIGNATURE PAGE TO FIRST AMENDED AND RESTATED
                            SHAREHOLDERS' AGREEMENT]
<PAGE>

                                      COMMON HOLDERS:

                                      Robert D. Ahmann

                      Address:

                  [SIGNATURE PAGE TO FIRST AMENDED AND RESTATED
                            SHAREHOLDERS' AGREEMENT]
<PAGE>

                                      Allen J. Berning

                                      Nancy J. Berning

                      Address:

                  [SIGNATURE PAGE TO FIRST AMENDED AND RESTATED
                            SHAREHOLDERS' AGREEMENT]
<PAGE>

                                      Michael M. Haider, Jr.

                                      Patricia A. Haider

                      Address:

                  [SIGNATURE PAGE TO FIRST AMENDED AND RESTATED
                            SHAREHOLDERS' AGREEMENT]
<PAGE>

                                      Daniel R. Hughes

                                      Rose M. Hughes

                      Address:

                  [SIGNATURE PAGE TO FIRST AMENDED AND RESTATED
                            SHAREHOLDERS' AGREEMENT]
<PAGE>

                                      William B. Leary

                                      Janet A. Leary

                      Address:

                  [SIGNATURE PAGE TO FIRST AMENDED AND RESTATED
                            SHAREHOLDERS' AGREEMENT]
<PAGE>

                                      Gary L. Lingbeck

                      Address:

                  [SIGNATURE PAGE TO FIRST AMENDED AND RESTATED
                            SHAREHOLDERS' AGREEMENT]
<PAGE>

                                      Robert R. Murphy

                                      Patricia J. Murphy

                      Address:

                  [SIGNATURE PAGE TO FIRST AMENDED AND RESTATED
                            SHAREHOLDERS' AGREEMENT]
<PAGE>

                                      Karl D. Shurson

                                      Marlene K. Shurson

                      Address:

                  [SIGNATURE PAGE TO FIRST AMENDED AND RESTATED
                            SHAREHOLDERS' AGREEMENT]
<PAGE>

                                      Hargopal Singh

                                      Karen G. Singh

                      Address:

                  [SIGNATURE PAGE TO FIRST AMENDED AND RESTATED
                            SHAREHOLDERS' AGREEMENT]
<PAGE>

                                      David L. Sippel

                                      Donna L. Sippel

                      Address:

                  [SIGNATURE PAGE TO FIRST AMENDED AND RESTATED
                            SHAREHOLDERS' AGREEMENT]
<PAGE>

                                   SCHEDULE A
                                   ----------

                                 COMMON HOLDERS
                                 --------------

                                                         Number of Beneficially-
      Name of Common Holder                               Owned Common Shares
      ----------------------                             ----------------------
Robert D. Ahmann                                                  85,000
Allen J. & Nancy J. Berning                                      263,000
Michael M. & Patricia A. Haider, Jr.                             110,334
Daniel R. & Rose M. Hughes                                       140,000
William B. & Janet A. Leary                                      158,000
Gary L. Lingbeck                                                 115,000
Robert R. & Patricia J. Murphy                                   292,000
Karl D. & Marlene K. Shurson                                     145,000
Hargopal & Karen G. Singh                                         86,800
David L. & Donna L. Sippel                                       292,000

     TOTAL                                           1,687,134.000000000

                                      A-1
<PAGE>

                                   SCHEDULE B
                                   ----------

                                PREFERRED HOLDERS
                                -----------------

Name of Preferred Holder

LB I Group Inc.

Jeffrey M. Drazan

Lehman Brothers Venture Partners L.P.

Lehman Brothers Venture Capital Partners I, L.P.

Lehman Brothers VC Partners L.P.

                                      B-1

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