Document:

<PAGE>

                                                                    EXHIBIT 10.2

                    ACKNOWLEDGMENT, WAIVER AND AMENDMENT #10
                                       TO
                               FINANCING AGREEMENT

     This ACKNOWLEDGMENT, WAIVER AND AMENDMENT #10 ("Amendment") TO THE AMENDED
AND RESTATED REVOLVING CREDIT AGREEMENT is made as of January 29, 2003 by and
between Pemstar Inc., duly organized under the laws of the State of Minnesota
("Customer"), Turtle Mountain Corporation, duly organized under the laws of the
State of North Dakota ("Turtle Mountain") and Pemstar Pacific Consultants Inc.,
duly organized under the laws of the State of California ("Pemstar Pacific
Consultants") (Customer, Turtle Mountain and Pemstar Pacific Consultants,
collectively, the "Credit Parties", individually, a "Credit Party"), and IBM
Credit LLC, a Delaware limited liability company ("IBM Credit").

                                    RECITALS:

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

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

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

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

                                    AGREEMENT

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

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

Section 2.    Acknowledgment.

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

<TABLE>
<CAPTION>
                                                                         Covenant Actual for the fiscal quarter
                                                                         --------------------------------------
       Covenant                  Covenant Requirement                      ending December 31, 2002
       --------                  --------------------                      ------------------------
<S>  <C>                       <C>                                     <C>
(a)    Net Profit after Tax
       to Revenue (on a monthly    ($3,700,000) for the fiscal
         basis)                      quarter ending December 31, 2002                ($1,943,803)
(b)    Total Liabilities to        Greater than Zero and
         Tangible Net Worth        Equal to or Less than 1.6:1.0                       1.598:1.0
(c)    Current Assets to           Greater than 1.60:1.0 for the fiscal
         Current Liabilities         month ending December 31, 2002                     1.37:1.0
(d)    Maximum Capital             Less than or equal to $18,000,000
         Expenditures                for the fiscal year ending March
                                     31, 2003 and all
</TABLE>

                                       1

<PAGE>

                              fiscal quarters thereafter
                              provided, however, no Credit
                              Party may make any Capital
                              Expenditure in excess of
                              $1,000,000 without the prior
                              written consent of IBM Credit.        $7,520,559
(e)  Net Profit After       Net loss not greater than
     Tax to Revenue           $6,200,00 for the three month
     (U.S. Credit Parties     period ending December 31,
     operations only)         2002                                 ($3,307,627)
(f)  EBITDA                 Equal to or less than
     (U.S. Credit Parties     ($1,300,000) for the three
     operations only)         months ending December 31,
                              2002                                  $1,289,327
(g)  EBITDA                 Equal to or Greater than $3,900,000
                              for the three month period ended
                              December 31, 2002                     $5,103,658

Section 3.   Waivers to Agreement.   Subject to the terms and conditions set
forth herein including, without limitation, Section 5 hereof, IBM Credit hereby
waives the defaults of the Credit Parties with the terms of the Agreement to the
extent such defaults are set forth in Section 2 hereof and for the periods
indicated above and ending December 31, 2002. The waiver shall not be effective
until the conditions to effectiveness set forth in Section 5 have been fulfilled
to IBM Credit's satisfaction in its sole discretion and shall not be deemed a
waiver of compliance with these Sections after the date hereof. The waiver set
forth herein shall not apply to any other or subsequent failures to comply with
the Agreement or this Amendment or any failures to comply with the financial
covenants after December 31, 2002.

Section 4.   Amendment.

The Agreement is hereby amended as follows:

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

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

"I. Fees, Rates and Repayment Terms:

        (A)  Credit Facility:
             Revolving A: Sixty-five Million Dollars ($65,000000) Revolving
             Credit Facility
        (B)  Borrowing Base:
             (i) (a) 90% of the amount of each Credit Party's Eligible Accounts
             from International Business Machines Corp. ("IBM") or its domestic
             subsidiaries as account debtor pursuant to agreements between such
             Credit Party and IBM in form and substance satisfactory to IBM
             Credit_ as of the date of determination as reflected in the
             Customer's most recent Collateral Management Report;

                  (b) 90% of the amount of each Credit Party's accounts from
             IBM's foreign subsidiaries as account debtor as of the date of
             determination as reflected in the Customer's most recent
             Collateral Management Report but in no event shall the aggregate
             amount permitted under this Section IB(i)(b) exceed One Million
             Dollars ($1,000,000);

             Notwithstanding Section 3.1 (A) of the Agreement, for purposes of
             this Section (i), Accounts from IBM that allow for payment to be
             made within 60 days shall be included for purposes of calculating
             the Borrowing Base provided that such Accounts are on standard
             terms and

                                       2

<PAGE>

              otherwise satisfy the criteria for eligibility in IBM Credit's
              sole discretion.

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

              Notwithstanding Section 3.1 (A) of the Agreement, for purposes of
              this Section (ii), Accounts from Honeywell that allow for payment
              to be made within 60 days shall be included for purposes of
              calculating the Borrowing Base provided that (x) such Accounts
              from Honeywell are on standard terms and otherwise satisfy the
              criteria for eligibility in IBM Credit's sole discretion, (y) the
              aggregate amount permitted for Honeywell under this Section (ii)
              shall not exceed Three Million Dollars ($3,000,000) and (z)
              Honeywell remains investment grade.

              (iii)  80% of the amount of each Credit Party's other Eligible
              Accounts, other than Concentration Accounts, as of the date of
              determination as reflected in the Customer's most recent
              Collateral Management Report provided, however, IBM Credit has a
              first priority security interest in such Eligible Account;

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

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

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

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

              (vi)   Rochester, MN = 84%, San Jose, CA = 0%, Taunton, MA = 0%,
              Dunseith, ND = 85% of the lower of (x) book value or (y) fair
              market value of each Credit Party's Eligible Parts Inventory
              destined for IBM less than 180 days old;

              (vii)  Rochester, MN = 64%, San Jose, CA = 0%, Taunton, MA = 0%,
              Dunseith, ND = 70% of the lower of (x) book value or (y) fair
              market value of each Credit Party's Eligible Inventory destined
              for Honeywell, 3M, and Applied Materials less than 180 days old;

              (viii) Rochester, MN (other than Eligible Finished Goods
              Inventory, Eligible Parts Inventory and Eligible Inventory
              destined for Celestica) = 53%, Rochester, MN (for Eligible
              Finished Goods Inventory, Eligible Parts Inventory and Eligible
              Inventory destined for Celestica) = 0%, San Jose, CA = 33%,
              Taunton, MA = 41%, Dunseith, ND = 55% of the lower of (x) book
              value or (y) fair market value of each Credit Party's other
              Eligible Inventory less than 180 days old provided, however, IBM
              Credit has a first priority security interest in such Eligible
              Inventory.

              (ix)   Less Two Million Dollars ($2,000,000.00).

                                       3

<PAGE>

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

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

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

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

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

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

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

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

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

             (ii) Prepayment Fee: A prepayment premium, payable to IBM Credit
             in the event that the

                                     4

<PAGE>

                Customer terminates the Credit Line prior to Termination Date,
                in an amount equal to the amount of the Credit Line in effect as
                of the date of notice of termination or date of default,
                multiplied by one half of one percent (0.50%).

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

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

"Definitions: The following terms shall have the following respective meanings
in this Attachment A. All amounts shall be determined in accordance with
generally accepted accounting principles (GAAP).

         "Capital Expenditure" shall mean any amount debited to the fixed asset
         account on the Customer's consolidated balance sheet in respect of: (a)
         the acquisition (including, without limitation, acquisition by entry
         into a capitalized lease), construction, improvement, replacement or
         betterment of land, buildings, machinery, equipment or of any other
         fixed assets or capitalized leaseholds; and (b) to the extent related
         to and not included in (a) above, materials, contract labor and direct
         labor (excluding expenditures charged to repairs or maintenance in
         accordance with GAAP.

         "Consolidated Net Income" shall mean, for any period, the net income
         (or loss), after taxes, of Customer on a consolidated basis for such
         period determined in accordance with GAAP.

         "Current" shall mean within the ongoing twelve month period.

         "Current Assets" shall mean assets that are cash or expected to become
         cash within the ongoing twelve months.

         "Current Liabilities" shall mean payment obligations resulting from
         past or current transactions that require settlement within the ongoing
         twelve month period (excluding the Indebtedness owed by any of the
         Credit Parties to IBM Credit under the Agreement), as determined in
         accordance with GAAP.

         "EBITDA" shall mean, for any period (determined on a consolidated basis
         in accordance with GAAP), (a) the Consolidated Net Income of Customer
         for such period, plus (b) each of the following to the extent reflected
         as an expense in the determination of such Consolidated Net Income: (i)
         the Customer's provisions for taxes based on income for such period;
         (ii) Interest Expense for such period; and (iii) depreciation and
         amortization of tangible and intangible assets of Customer for such
         period.

         "Fixed Charges" shall mean, for any period, an amount equal to the sum,
         without duplication, of the amounts for such as determined for the
         Customer on a consolidated basis, of (i) scheduled repayments of
         principal of all Indebtedness (as reduced by repayments thereon
         previously made), (ii) Interest Expense, (iii) capital expenditures
         (iv) dividends, (v) leasehold improvement expenditures and (vi) all
         provisions for U.S. and non U.S. Federal, state and local taxes.

         "Fixed Charge Coverage Ratio" shall mean the ratio as of the last day
         of any fiscal period of (i) EBITDA as of the last day of such fiscal
         period to (ii) Fixed Charges.

         "Interest Expense" shall mean, for any period, the aggregate
         consolidated interest expense of Customer during such period in respect
         of Indebtedness determined on a consolidated basis in accordance with
         GAAP, including, without limitation, amortization of original issue
         discount on any Indebtedness and of all fees payable in connection with
         the incurrence of such Indebtedness (to the extent included in interest
         expense), the interest portion of any deferred payment obligation and
         the interest component of any capital lease obligations.

         "Long Term" shall mean beyond the ongoing twelve month period.

         "Long Term Assets" shall mean assets that take longer than a year to be
         converted to cash. They are divided into four categories: tangible
         assets, investments, intangibles and other.

                                       5

<PAGE>

         "Long Term Debt" shall mean payment obligations of indebtedness which
         mature more than twelve months from the date of determination, or
         mature within twelve months from such date but are renewable or
         extendible at the option of the debtor to a date more than twelve
         months from the date of determination.

         "Net Profit after Tax" shall mean Revenue plus all other income, minus
         all costs, including applicable taxes.

         "Revenue" shall mean the monetary expression of the aggregate of
         products or services transferred by an enterprise to its customers for
         which said customers have paid or are obligated to pay, plus other
         income as allowed.

         "Subordinated Debt" shall mean Customer's unsecured indebtedness to
         third parties as evidenced by an executed Notes Payable Subordination
         Agreement in favor of IBM Credit including, without limitation, the
         Subordinated Debt (2002).

         "Tangible Net Worth" shall mean:

             Total Net Worth minus;

                (a) goodwill, organizational expenses, pre-paid expenses,
                deferred charges, research and development expenses, software
                development costs, leasehold expenses, trademarks, trade
                names, copyrights, patents, patent applications, privileges,
                franchises, licenses and rights in any thereof, and other
                similar intangibles (but not including contract rights) and
                other current and non-current intangible assets as identified
                in Customer's financial statements;

                (b) all accounts receivable from employees, officers, directors,
                stockholders and affiliates; and

                (c) all callable/redeemable preferred stock.

         "Total Assets" shall mean the total of Current Assets and Long Term
         Assets.

         "Total Liabilities" shall mean the Current Liabilities and Long Term
         Debt less Subordinated Debt, resulting from past or current
         transactions, that require settlement in the future.

         "Total Net Worth" (the amount of owner's or stockholder's ownership in
         an enterprise) is equal to Total Assets minus Total Liabilities.

         "Working Capital" shall mean Current Assets minus Current Liabilities.

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

On a consolidated basis:

            Covenant                           Covenant Requirement
            --------                           --------------------
<TABLE>
<S>                                            <C>
(a)         Net Profit after Tax (on a         I.       ($2,100,000) for the fiscal month ending January 31, 2003
              monthly basis)                   II.      ($2,600,000) for the two fiscal month period ending February 28,
                                                    2003
                                               III.     ($2,000,000) for the fiscal month ending March 31, 2003, and
                                               IV.      Equal to or greater  than .75 percent of Revenues quarterly for
                                                    the fiscal quarter ending June 30, 2003 and for all fiscal quarters
                                                    thereafter
(b)         Net Profit After Tax to            V.       Equal to or greater than 1.25 percent at fiscal year ending
</TABLE>

                                       6

<PAGE>

<TABLE>
<S>                                            <C>
              Revenue (on an annual                 March 31, 2004, and for all fiscal year ends thereafter
              basis)
(c)         Total Liabilities to Tangible      VI.      Greater than Zero and Equal to or Less than 1.6:1.0
              Net Worth                        VII.     measured on a monthly basis
(d)         Current Assets to Current          VIII.    Greater than 1.50:1.0 for the fiscal months January,  February and
              Liabilities                           March 2003, and 2.0:1.0 on a monthly basis Maximum Capital Expenditures
(e)                                            IX.      Less than or equal to $18,000,000 for the fiscal year ending March 31,
                                                    2003 and all fiscal quarters thereafter provided,
                                                    however, no Credit Party may make any Capital Expenditure
                                                    in excess of $1,000,000 without the prior written
                                                    consent of IBM Credit.
(f)         Net Profit AfterTax (U.S.          X.       Net loss not greater than $2,700,000 for the month ending January
              Credit Parties operations             31, 2003
              only)                            XI.      Net loss not greater than $3,800,000 for the two month period
                                                    ending February 28, 2003
                                               XII.     Net loss not greater than $4,300,000 for the three month period
                                                    ending March 31, 2003;
                                               XIII.    Equal to or Greater than 1.5% of Revenues for each fiscal quarter.
                                                    thereafter beginning at June 30, 2003
                                               XIV.
(g)         EBITDA (U.S. Credit Parties        XV.      Equal to or less than ($1,200,000) for the month ending January
              operations only)                      31, 2003
                                               XVI.     Equal to or less than ($700,000) for the two months ending
                                                    February 28, 2002;
                                               XVII.    Equal to or greater than a $300,000 for the three months ending
                                                    March 31, 2003, and
                                               XVIII.   Equal to or greater than $5,500,000 for all fiscal quarters
                                                    thereafter
(h)         EBITDA                             XIX.     Equal to or greater than $300,000 for the month ending January 31,
                                                    2003
                                               XX.      Equal to or Greater than $2,200,000 for the two month period
                                                    ending February 28, 2003
                                               XXI.     Equal to or Greater than $5,300,000 for the three month period
                                                    ending March 31, 2003;
                                               XXII.    Equal to or Greater than $6,000,000 for all fiscal quarters
                                                    thereafter"
</TABLE>

Section 5. Conditions to Effectiveness of Waiver. The waiver set forth in
Section 3 hereof shall become effective only upon the fulfillment of all of the
following conditions precedent, to the satisfaction of IBM Credit in its sole
discretion: (i) this Amendment shall have been executed by each of the parties
hereto and IBM Credit shall have received a fully executed copy of this
Amendment by no later than January 29, 2003; (ii) the Credit Parties shall pay
to IBM Credit a waiver fee, in immediately available funds, equal to Sixty- five
thousand dollars ($65,000.00) on or prior to January 29, 2003. Such waiver fee
payable to IBM Credit hereunder shall be nonrefundable and shall be in addition
to any other fees IBM Credit may charge the Credit Parties; (iii) before and
after giving effect to this Amendment, (x) the representations and warranties in
Section 6 of the Agreement shall be true and correct as though made on the date
hereof and (y) the execution and delivery of this Amendment will not trigger an
event of default, default or Triggering Event (as defined in the Subordinated
Convertible Notes) under the terms of Subordinated Debt (2002) and that no
default or Triggering Event exists thereunder. The execution by the Credit
Parties of this Amendment shall be deemed a representation that the Credit
Parties have complied with the foregoing condition; and (iv) IBM Credit shall
have received evidence satisfactory to it in its sole discretion that U.S. Bank
shall have waived (in writing) all defaults under its financing facility with
the Credit Parties and amended its financial covenants by no later than January
29, 2003 and such waiver and amendment shall be in form and substance
satisfactory to IBM Credit or a certification from the Credit Parties that no
default or event of default exists under their financing facilities with U.S.
Bank and accordingly no such waiver and amendment is required.

                                       7

<PAGE>

Section 6.  Rights and Remedies. Except to the extent specifically waived
herein, IBM Credit reserves any and all rights and remedies that IBM Credit now
has or may have in the future with respect to each Credit Party, including any
and all rights or remedies which it may have in the future as a result of each
Credit Parties' failure to comply with its financial covenants or any other
covenants to IBM Credit. Except to the extent specifically waived herein neither
this Amendment, any of IBM Credit's actions or IBM Credit's failure to act shall
be deemed to be a waiver of any such rights or remedies. The Credit Parties and
IBM Credit agree that failure to comply with the terms and provisions of this
Amendment or the Agreement constitute a new default under the Agreement. If the
U.S. Bank waiver referred to in Section 5 (iv) hereof is terminated or not
effective, an immediate Event of Default shall exist under the Agreement.

Section 7.  Representations and Warranties. Each Credit Party makes to IBM
Credit the following representations and warranties all of which are material
and are made to induce IBM Credit to enter into this Amendment.

Section 7.1 Accuracy and Completeness of Warranties and Representations. All
representations made by each Credit Party in the Agreement were true and
accurate and complete in every respect as of the date made, and, as amended by
this Amendment, all representations made by each Credit Party in the Agreement
are true, accurate and complete in every material respect as of the date hereof,
and do not fail to disclose any material fact necessary to make representations
not misleading.

Section 7.2 Violation of Other Agreements. The execution and delivery of this
Amendment and the performance and observance of the covenants to be performed
and observed hereunder do not violate or cause any Credit Party not to be in
compliance with the terms of any agreement to which any Credit Party is a party.

Section 7.3 Litigation. Except as has been disclosed by the Credit Parties to
IBM Credit in writing, there is no litigation, proceeding, investigation or
labor dispute pending or threatened against any Credit Party, which, if
adversely determined, would materially adversely affect any Credit Party's
ability to perform any Credit Party's obligations under the Agreement and the
other documents, instruments and agreements executed in connection therewith or
pursuant hereto.

Section 7.4 Enforceability of Amendment. This Amendment has been duly
authorized, executed and delivered by the Credit Parties and is enforceable
against each Credit Party in accordance with its terms.

Section 8.  Ratification of Agreement. Except as specifically amended hereby,
all of the provisions of the Agreement shall remain unamended and in full force
and effect. Nothing herein shall be deemed a waiver of any default or consent.
Each Credit Party hereby ratifies, confirms and agrees that the Agreement, as
amended hereby, represents a valid and enforceable obligation of each Credit
Party, and is not subject to any claims, offsets or defenses. The amendment
contained herein shall be effective only with respect to the matters referred to
herein and shall not be deemed an amendment for any other purpose whatsoever.

Section 9.  Governing Law. This Amendment shall be governed by and interpreted
in accordance with the laws which govern the Agreement.

Section 10. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be an original and all of which shall
constitute one agreement.

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

IBM Credit LLC                                 Pemstar Inc.

<TABLE>
<S>                                            <C>
By:      /s/ Salvatore Grasso                  By:        /s/ Greg S. Lea
    -----------------------------------------      --------------------------------------

Print Name:  Salvatore Grasso                  Print Name:    Greg S. Lea
            ---------------------------------              ------------------------------
</TABLE>

                                       8

<PAGE>

<TABLE>
<S>                                                  <C>
Title:      Manager, Credit                          Title:        CFO
       --------------------                                 ---------------------------------------

Date:      1/29/03                                   Date:       1/28/03
      ---------------------                                 ---------------------------------------

Turtle Mountain Corporation                          Pemstar Pacific Consultants, Inc.

By:     /s/ Linda U. Feuss  /s/ John E. Miller       By:      /s/ Linda U. Feuss
    ----------------------------------------------       ------------------------------------------

Print Name:  Linda U. Feuss   John E. Miller         Print Name:  Linda U. Feuss
            --------------------------------------               ----------------------------------

Title:    Secretary           President              Title:       Secretary
       -------------------------------------------          ---------------------------------------

Date:           1/28/03                              Date:       1/28/03
     ---------------------------------------------         ----------------------------------------
</TABLE>

                                       9

<PAGE>

                        ATTACHMENT A, ("ATTACHMENT A") TO
                              AMENDED AND RESTATED
                    REVOLVING CREDIT AGREEMENT ("AGREEMENT")
                               DATED JUNE 29, 2001

Customer Name: PEMSTAR INC., TURTLE MOUNTAIN CORPORATION, and PEMSTAR PACIFIC
Consultants, Inc. (together, the "Credit Parties")

Effective Date of this Attachment A: January 29, 2003

I.       Fees, Rates and Repayment Terms:

         (A)    Credit Facility:
                Revolving A: Sixty-five Million Dollars ($65,000000) Revolving
                Credit Facility
         (B)    Borrowing Base:
                (i) (a) 90% of the amount of each Credit Party's Eligible
                Accounts from International Business Machines Corp. ("IBM") or
                its domestic subsidiaries as account debtor pursuant to
                agreements between such Credit Party and IBM in form and
                substance satisfactory to IBM Credit as of the date of
                determination as reflected in the Customer's most recent
                Collateral Management Report;

                    (b) 90% of the amount of each Credit Party's accounts from
                IBM's foreign subsidiaries as account debtor as of the date of
                determination as reflected in the Customer's most recent
                Collateral Management Report but in no event shall the aggregate
                amount permitted under this Section I. (B) (i) (b) exceed One
                Million Dollars ($1,000,000);

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

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

                Notwithstanding Section 3.1 (A) of the Agreement, for purposes
                of this Section (ii), Accounts from Honeywell that allow for
                payment to be made within 60 days shall be included for purposes
                of calculating the Borrowing Base provided that (x) such
                Accounts from Honeywell are on standard terms and otherwise
                satisfy the criteria for eligibility in IBM Credit's sole
                discretion, (y) the aggregate amount permitted for Honeywell
                under this Section (ii) shall not exceed Three Million Dollars
                ($3,000,000) and (z) Honeywell remains investment grade.

                (iii) 80% of the amount of each Credit Party's other Eligible
                Accounts, other than Concentration Accounts, as of the date of
                determination as reflected in the Customer's most recent
                Collateral Management Report provided, however, IBM Credit has a
                first priority security interest in such Eligible Account; (iv)
                a percentage, determined from time to time by IBM Credit in its
                sole discretion, of the amount of Customer's Concentration
                Accounts for a specific Concentration Account Debtor as of the
                date of determination as reflected in the Customer's most recent
                Collateral Management Report; unless otherwise notified by IBM
                Credit, in writing, the percentage for Concentration Accounts
                for a specific Concentration Account Debtor shall be the same as
                the percentage set forth in paragraph (ii) of the Borrowing
                Base;

                                       10

<PAGE>

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

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

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

                (vi)   Rochester, MN = 84%, San Jose, CA = 0%, Taunton, MA = 0%,
                Dunseith, ND = 85% of the lower of (x) book value or (y) fair
                market value of each Credit Party's Eligible Parts Inventory
                destined for IBM less than 180 days old;

                (vii)  Rochester, MN = 64%, San Jose, CA = 0%, Taunton, MA = 0%,
                Dunseith, ND = 70% of the lower of (x) book value or (y) fair
                market value of each Credit Party's Eligible Inventory destined
                for Honeywell, 3M, and Applied Materials less than 180 days old;

                (viii) Rochester, MN (other than Eligible Finished Goods
                Inventory, Eligible Parts Inventory and Eligible Inventory
                destined for Celestica) = 53%, Rochester, MN (for Eligible
                Finished Goods Inventory, Eligible Parts Inventory and Eligible
                Inventory destined for Celestica) = 0%, San Jose, CA = 33%,
                Taunton, MA = 41%, Dunseith, ND = 55% of the lower of (x) book
                value or (y) fair market value of each Credit Party's other
                Eligible Inventory less than 180 days old provided, however, IBM
                Credit has a first priority security interest in such Eligible
                Inventory.

                (ix)   Less Two Million Dollars ($2,000,000.00).

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

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

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

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

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

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

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

                                       11

<PAGE>

<TABLE>
<S>                                                 <C>
         (C)    Collateral Insurance Amount: Seventy Million Dollars ($70,000,000).
         (D)    Applicable Margin: Prime Rate plus 3.50%.
         (E)    Delinquency Fee Rate:               Prime Rate plus 6.500%.
         (F)    Shortfall Transaction Fee:          Shortfall Amount multiplied by 0.30%.
         (G)    Other Charges:
</TABLE>

                (i)   Unused Line Fee: 0.375% per annum on the daily average
                unused portion of the Credit Line for each day from the closing
                date of the Agreement and shall be computed on the basis of a
                360 day year and payable monthly in arrears and upon the
                maturity or termination of the Agreement.

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

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

II.   Bank Account

Credit Parties' Lockbox(es) and Special Account(s) will be maintained at the
following Bank(s):

<TABLE>
<S>                                       <C>
               Name of Bank:              U.S. Bank
               Address:                   EP-MN-M5BC
                                          601 Second Avenue South
                                          Minneapolis, MN 55402-4302
               Bank Contact:              Mr. Christopher J. Schaaf  (612) 973-1051
               Lockbox Address:           PEMSTAR INC.
                                          SDS-12-1905
                                          P.O. Box 86
                                          Minneapolis, MN 55486-1905
               Special Account #:         1-047-5581-5495
               Lockbox #                  SDS-12-1905

               Name of Bank:              Citizens Bank of Massachusetts Inc.
               Address:                   1200 Hancock Street
                                          Quincy, MA 02169
               Bank Contact:              David M. Kilnapp (617) 745-6265
               Lockbox Address:           PEMSTAR INC.
                                          P.O. Box 845788
                                          Boston, MA 02284-5788
               Special Account #:         1102182378
               Lockbox #                  5788
               Name of Bank:              U.S. Bank
               Address:                   EP-MN-M5BC
                                          601 Second Avenue South
                                          Minneapolis, MN 55402-4302
               Bank Contact:              Christopher J. Schaaf - (612) 973-1051
               Lockbox Address:           Turtle Mountain Corporation
                                          SDS-12-2077
                                          Minneapolis, MN  55486-2077
               Special Account #:         1047-5711-5977
               Lockbox #                  SDS-12-2077

               Name of Bank:              U.S. Bank
               Address:                   EP-MN-M5BC
                                          601 Second Avenue South
                                          Minneapolis, MN  55402-4302
               Bank Contact:              Mr. Christopher J. Schaaf - (612) 973-1051
</TABLE>

                                       12

<PAGE>

           Lockbox Address:     Pemstar Inc. (San Jose location)
                                SDS51930
                                P.O. Box 51930
                                Los Angeles, CA 90051-6210
           Special Account:     1-047-5581-57950
           Lockbox #            SDS51930

           Name of Bank         U.S. Bank
           Bank Address         EP-MN-M5BC
                                601 Second Avenue South
                                Minneapolis, MN  55402-4302
           Bank Contact         Christopher J. Schaaf - (612) 973-1051
           Lockbox Address      Pemstar Inc. - Chaska
                                SDS-12-2225
                                P.O. Box 86
                                Minneapolis, MN.  55486-2225
           Special Account      1-047-5714-2476
           Lockbox #            SDS-12-2225

           Name of Bank:        U.S. Bank
           Address:             EP-MN-M5BC
                                601 Second Avenue South
                                Minneapolis, MN 55402-4302
           Bank Contact:        Christopher J. Schaaf - (612) 973-1051
           Lockbox Address:     Pemstar Pacific Consultants Inc
                                PO Box 51911 Unit A
                                Los Angeles, CA 90051-6211
           Special Account #    1-539-1000-7704
           Lockbox #            51911

III. Financial Covenants:

Definitions: The following terms shall have the following respective meanings in
this Attachment A. All amounts shall be determined in accordance with generally
accepted accounting principles (GAAP).

        "Capital Expenditure" shall mean any amount debited to the fixed asset
        account on the Customer's consolidated balance sheet in respect of: (a)
        the acquisition (including, without limitation, acquisition by entry
        into a capitalized lease), construction, improvement, replacement or
        betterment of land, buildings, machinery, equipment or of any other
        fixed assets or capitalized leaseholds; and (b) to the extent related
        to and not included in (a) above, materials, contract labor and direct
        labor (excluding expenditures charged to repairs or maintenance in
        accordance with GAAP.

        "Consolidated Net Income" shall mean, for any period, the net income
        (or loss), after taxes, of Customer on a consolidated basis for such
        period determined in accordance with GAAP.

        "Current" shall mean within the ongoing twelve month period.

        "Current Assets" shall mean assets that are cash or expected to become
        cash within the ongoing twelve months.

        "Current Liabilities" shall mean payment obligations resulting from
        past or current transactions that require settlement within the ongoing
        twelve month period (excluding the Indebtedness owed by any of the
        Credit Parties to IBM Credit under the Agreement), as determined in
        accordance with GAAP.

        "EBITDA" shall mean, for any period (determined on a consolidated basis
        in accordance with GAAP), (a) the Consolidated Net Income of Customer
        for such period, plus (b) each of the following to the extent reflected
        as an expense in the determination of such Consolidated Net

                                       13

<PAGE>

         Income: (i) the Customer's provisions for taxes based on income for
         such period; (ii) Interest Expense for such period; and (iii)
         depreciation and amortization of tangible and intangible assets of
         Customer for such period.

         "Fixed Charges" shall mean, for any period, an amount equal to the sum,
         without duplication, of the amounts for such as determined for the
         Customer on a consolidated basis, of (i) scheduled repayments of
         principal of all Indebtedness (as reduced by repayments thereon
         previously made), (ii) Interest Expense, (iii) capital expenditures
         (iv) dividends, (v) leasehold improvement expenditures and (vi) all
         provisions for U.S. and non U.S. Federal, state and local taxes.

         "Fixed Charge Coverage Ratio" shall mean the ratio as of the last day
         of any fiscal period of (i) EBITDA as of the last day of such fiscal
         period to (ii) Fixed Charges.

         "Interest Expense" shall mean, for any period, the aggregate
         consolidated interest expense of Customer during such period in respect
         of Indebtedness determined on a consolidated basis in accordance with
         GAAP, including, without limitation, amortization of original issue
         discount on any Indebtedness and of all fees payable in connection with
         the incurrence of such Indebtedness (to the extent included in interest
         expense), the interest portion of any deferred payment obligation and
         the interest component of any capital lease obligations.

         "Long Term" shall mean beyond the ongoing twelve month period.

         "Long Term Assets" shall mean assets that take longer than a year to be
         converted to cash. They are divided into four categories: tangible
         assets, investments, intangibles and other.

         "Long Term Debt" shall mean payment obligations of indebtedness which
         mature more than twelve months from the date of determination, or
         mature within twelve months from such date but are renewable or
         extendible at the option of the debtor to a date more than twelve
         months from the date of determination.

         "Net Profit after Tax" shall mean Revenue plus all other income, minus
         all costs, including applicable taxes.

         "Revenue" shall mean the monetary expression of the aggregate of
         products or services transferred by an enterprise to its customers for
         which said customers have paid or are obligated to pay, plus other
         income as allowed.

         "Subordinated Debt" shall mean Customer's unsecured indebtedness to
         third parties as evidenced by an executed Notes Payable Subordination
         Agreement in favor of IBM Credit including, without limitation, the
         Subordinated Debt (2002).

         "Tangible Net Worth" shall mean:

              Total Net Worth minus;

                  (a) goodwill, organizational expenses, pre-paid expenses,
                  deferred charges, research and development expenses, software
                  development costs, leasehold expenses, trademarks, trade
                  names, copyrights, patents, patent applications, privileges,
                  franchises, licenses and rights in any thereof, and other
                  similar intangibles (but not including contract rights) and
                  other current and non-current intangible assets as identified
                  in Customer's financial statements;

                  (b) all accounts receivable from employees, officers,
                  directors, stockholders and affiliates; and

                  (c) all callable/redeemable preferred stock.

         "Total Assets" shall mean the total of Current Assets and Long Term
         Assets.

                                       14

<PAGE>

         "Total Liabilities" shall mean the Current Liabilities and Long Term
         Debt less Subordinated Debt, resulting from past or current
         transactions, that require settlement in the future.

         "Total Net Worth" (the amount of owner's or stockholder's ownership in
         an enterprise) is equal to Total Assets minus Total Liabilities.

         "Working Capital" shall mean Current Assets minus Current Liabilities.

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

On a consolidated basis:

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

                                       15

<PAGE>

     (h)    EBITDA            Equal to or greater than $300,000 for the month
                              ending January 31, 2003
                              Equal to or Greater than $2,200,000 for the two
                              months period ending February 28, 2003
                              Equal to or Greater than $5,300,000 for the three
                              months period ending March 31, 2003;
                              Equal to or Greater than $6,000,000 for all fiscal
                              quarters thereafter

                                       16<PAGE>

                                                                    EXHIBIT 10.3

                               FIFTH AMENDMENT TO
                           LOAN AND SECURITY AGREEMENT
                                   AND WAIVER

         THIS FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT AND WAIVER (this
"Amendment"), dated as of January 29, 2003, amends and modifies a certain Loan
and Security Agreement dated as of June 28, 2001 as amended by Amendments dated
as of December 20, 2001, March 25, 2002, May 3, 2002 and June 27, 2002 (as
amended, the "Credit Agreement") by and between PEMSTAR INC. (the "Borrower")
and U.S. BANK NATIONAL ASSOCIATION (the "Lender"). Terms not otherwise expressly
defined herein shall have the meanings set forth in the Credit Agreement.

                              Preliminary Statement

         An Event of Default exists under the Credit Agreement, and the Borrower
has requested that the Lender waive such default. To induce the Lender to grant
such waiver and in consideration of such waiver, the Borrower has agreed to the
terms and conditions set forth in this Amendment, including terms and conditions
intended to benefit U.S. Bancorp Equipment Finance, Inc. ("USBEF"), an affiliate
of the Lender that has also extended credit to the Borrower in the form of lease
agreements.

         NOW THEREFOR, in consideration of the foregoing and for other valuable
consideration, the Borrower and the Lender agree as follows:

                 ARTICLE I - AMENDMENTS TO THE CREDIT AGREEMENT

         The Credit Agreement is amended as follows:

         1.1  Line of Credit.  The first sentence of Section 2.1(a) is amended
to read as follows:

         "Lender agrees to make advances (each a `Line of Credit Advance') to
         Borrower, from and after the date of this Agreement through and
         including the earlier of December 31, 2003, or the date on which the
         Line of Credit is terminated, whether under Section 2.1(d), Section
         9.2(a) or otherwise (the `Termination Date'), in such amounts and at
         such times as the Borrower may from time to time request in an
         aggregate amount at any time outstanding not to exceed the Line of
         Credit Availability."

         1.2  Termination Date.  New Section 2.1(d) is added following Section
2.1(c), and shall read as follows:

         "(d) Termination Date. The Borrower agrees to give the Lender immediate
         notice of the shortening of the maturity of loans or extensions of
         credit under the IBM Credit Loan Agreement or other credit agreement
         involving a material (in excess of $2,000,000) amount of senior
         indebtedness. Upon such notice, the Lender shall have the option, by
         notice to the Borrower, of causing the Termination Date hereunder to
         fall on a date (not later than the Termination Date prior to giving
         effect to such notice) not later than the maturity date under the IBM
         Credit Loan Agreement or such other credit agreement. This provision
         shall not affect other changes to the Termination Date set forth in
         this Agreement."

         1.3 Construction. All references in the Credit Agreement to "this
Agreement", "herein" and similar references shall be deemed to refer to the
Credit Agreement as amended by this Amendment. The Loans shall continue to be
evidenced by the Note and it is acknowledged that the amount of the Note is
greater than the Line of Credit Amount, as amended hereby.

                               ARTICLE II - WAIVER

         The Borrower has informed the Lender that, as of December 31, 2002, its
Current Ratio was 1.31 to 1.00, and for such reason for the period on and after
December 31, 2002, it was not in compliance with Section 8.11(d) of the Credit
Agreement. The Borrower has requested that the Lender waive such non-compliance
with the Credit Agreement. Effective as provided below, and subject to the
additional requirements that IBM Credit shall have waived, or will waive
simultaneously herewith, any default under the IBM Credit Loan Agreement caused
by Borrower's breach of the Current Ratio financial covenant, the Lender waives
the Borrower's non-compliance with Section 8.11(d) of the Credit

<PAGE>

Agreement for periods from and after December 31, 2002, through March 30, 2003
(and not including the reporting date on or about March 31, 2003). The Lender
waives any Default or Event of Default arising from such non-compliance. Except
as expressly provided herein, all provisions of the Credit Agreement remain in
full force and effect and this waiver shall not apply to any other or subsequent
failure to comply with such Sections or any other provision of the Credit
Agreement.

                  ARTICLE III - REPRESENTATIONS AND WARRANTIES

         To induce the Lender to enter into this Amendment and to make and
maintain the Loans under the Credit Agreement as amended hereby, the Borrower
hereby warrants and represents to the Lender that it is duly authorized to
execute and deliver this Amendment, and to perform its obligations under the
Credit Agreement as amended hereby, and that this Amendment constitutes the
legal, valid and binding obligation of the Borrower, enforceable in accordance
with its terms.

                        ARTICLE IV - CONDITIONS PRECEDENT

         This Amendment shall become effective on the date first set forth
above, provided, however, that the effectiveness of this Amendment is subject to
the satisfaction of each of the following conditions precedent:

         4.1 Warranties. After giving effect to this Amendment, the
representations and warranties in Article 6 of the Credit Agreement shall be
true and correct as though made on the date hereof, except for changes that are
permitted by the terms of the Credit Agreement. The execution by the Borrower of
this Amendment shall be deemed a representation that the Borrower has complied
with the foregoing condition.

         4.2 Defaults. After giving effect to this Amendment, no Default and no
Event of Default shall have occurred and be continuing under the Credit
Agreement. The execution by the Borrower of this Amendment shall be deemed a
representation that the Borrower has complied with the foregoing condition.

         4.3 Documents and Fee. This Amendment and the acknowledgment by the
Guarantor in the form attached hereto shall have been executed and delivered by
the appropriate parties and the Borrower shall have paid a fee of $60,000 to the
Lender.

         4.4 Further Condition. As a further condition to effectiveness of this
Amendment and effectiveness of the waiver set forth in Article II, the Borrower
has agreed that the leases of USBEF shall be amended so that (a) the payments in
February and March, 2003, shall continue as scheduled, and (b) commencing on
April 15, 2003, the remaining lease payments shall be rescheduled so that all
obligations under the leases (both interest and principal) are satisfied in
twelve monthly installments, with the final such installment due and payable on
March 15, 2004. The Borrower shall enter into document with USBEF to evidence
such agreement not later than the earlier of (i) February 15, 2003, or (ii) the
date the Borrower shall release to the pubic its financial statements for the
period ended December 31, 2002; and if the Borrower shall fail to enter into
documents reasonably acceptable to USBEF by the earlier of such dates, this
Amendment and the waiver herein shall be deemed to be terminated and of no
effect (and the Event of Default described herein shall be deemed to have
continued and not to have been waived).

                               ARTICLE V - GENERAL

         5.1 Expenses. The Borrower agrees to reimburse the Lender upon demand
for all reasonable expenses (including reasonable attorneys' fees and legal
expenses) incurred by the Lender in the preparation, negotiation and execution
of this Amendment and any other document required to be furnished herewith, and
in enforcing the obligations of the Borrower hereunder, and to pay and save the
Lender harmless from all liability for, any stamp or other taxes which may be
payable with respect to the execution or delivery of this Amendment, which
obligations of the Borrower shall survive any termination of the Credit
Agreement.

         5.2 Counterparts. This Amendment may be executed in as many
counterparts as may be deemed necessary or convenient, and by the different
parties hereto on separate counterparts, each of which, when so executed, shall
be deemed an original but all such counterparts shall constitute but one and the
same instrument.

         5.3 Severability. Any provision of this Amendment which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without

                                       2

<PAGE>

invalidating the remaining portions hereof or affecting the validity or
enforceability of such provisions in any other jurisdiction.

         5.4 Law. This Amendment shall be a contract made under the laws of the
State of Minnesota, which laws shall govern all the rights and duties hereunder.

         5.5 Successors; Enforceability. This Amendment shall be binding upon
the Borrower and the Lender and their respective successors and assigns, and
shall inure to the benefit of the Borrower and the Lender and the successors and
assigns of the Lender. Except as hereby amended, the Credit Agreement shall
remain in full force and effect and is hereby ratified and confirmed in all
respects.

         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed at Minneapolis, Minnesota by their respective officers thereunto duly
authorized as of the date first written above.

                                   U.S. BANK NATIONAL ASSOCIATION

                                   By:   Christopher J. Schaaf
                                      ----------------------------------

                                   Title Vice President
                                        --------------------------------

                                   PEMSTAR INC.

                                   By:   Greg S Lea
                                      ----------------------------------

                                   Title CFO
                                        --------------------------------

                           GUARANTOR'S ACKNOWLEDGMENT

         The undersigned has guaranteed payment and performance of obligations
of PEMSTAR INC. (the "Borrower") to U.S. Bank National Association (the
"Lender") pursuant to the terms of a Guaranty, dated as of June 28, 2001 (the
"Guaranty"), which obligations include without limitation obligations under that
certain Loan and Security Agreement, dated as of June 28, 2001, as thereafter
amended (the "Credit Agreement"). The undersigned acknowledges that its has
received a copy of the proposed Fifth Amendment to the Credit Agreement and
Waiver, to be dated on or about January 29, 2003 (the "Amendment"). The
undersigned agrees and acknowledges that the Amendment shall in no way impair or
limit the right of the Lender under the Guaranty, and confirms that by the
Guaranty, the undersigned continues to guaranty payment and performance of the
obligations of the Borrower to the Lender, including without limitation
obligations under the Credit Agreement as amended pursuant to the Amendment. The
undersigned hereby confirms that the Guaranty remains in full force and effect,
enforceable against the undersigned in accordance with its terms.

                                      TURTLE MOUNTAIN CORPORATION

                                      By:   Linda U. Feuss
                                         ----------------------------------
                                      Title Secretary
                                           --------------------------------

                                      and

                                      By:   John E. Miller
                                         ----------------------------------
                                      Title President
                                           --------------------------------

                                       3

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