Document:

<PAGE>

                                    AMENDMENT
                                       TO
                           REVOLVING CREDIT AGREEMENT

         This AMENDMENT TO THE REVOLVING CREDIT AGREEMENT (this "Amendment") is
made as of August 1, 2000 by and between PEMSTAR INC., a Minnesota corporation
("Customer") and IBM Credit Corporation, a Delaware corporation ("IBM Credit").

                                    RECITALS:

         WHEREAS, Customer and IBM Credit have entered into that certain
Revolving Credit Agreement dated as of May 5, 2000 (as amended, supplemented or
otherwise modified from time to time, the "Agreement");

         WHEREAS, Customer has requested that IBM Credit provide a term loan and
IBM Credit is willing to provide such financing to Customer subject to the terms
set forth in this Amendment.

                                    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 that the Agreement is amended as
follows:

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

Section 2. Amendment. Effective upon the Amendment Effective Date (as defined
below), the Agreement is hereby amended as follows:

         A. The Agreement is hereby amended by adding Schedule A and Schedule B
to this Amendment to the Agreement as Schedule A and Schedule B thereto.

         B. Section 1.1 of the Agreement is hereby amended by adding the
following definitions in its proper alphabetical order:

         "Outstanding Term Loan": at any time of determination, the sum of (1)
the unpaid principal amount of the Term Loan made by IBM Credit under this
Agreement; and (2) any finance charge, fee, expense or other amount related to
the Term Loan charged to Customer's account with IBM Credit.

         "Request for Term Loan Advance": as defined in Section 2.8 of this
Agreement.

         "Term Loan": the loan or advance of funds made by IBM Credit to or on
behalf of Customer pursuant to Section 2H of the Amendment.

         "Term Loan Commencement Date": as defined in Section 2.8 of this
Agreement.

         "Term Loan Closing Fee": as defined in Section 3.

         "Term Loan Commitment": as defined in Schedule A.

         "Term Loan Finance Charge": as defined in Schedule A.

                                  Page 1 of 6
<PAGE>

         "Term Loan Stated Maturity Date": as set forth in Schedule A.

         C. Section 1.1 of the Agreement is hereby amended by deleting the
definition of "Advances" in its entirety and substituting, in lieu thereof, the
following: "Advances": any loan or other extension of credit by IBM Credit to or
on behalf of Customer pursuant to this Agreement including, without limitation,
(i) A/R Advances and (ii) the Term Loan.

         D. Section 1.1 of the Agreement is hereby amended by deleting the
definition of "Available Credit" in its entirety and substituting, in lieu
thereof, the following:

         "Available Credit": at any time (i) the Maximum Advance Amount less
(ii) the Outstanding Advances, other than the Outstanding Term Loan at such
time.

         E. Section 2.1 of the Agreement is hereby amended by deleting such
section in its entirety and substituting, in lieu thereof, the following:

         "2.1 Credit Line. Subject to the terms and conditions set forth in this
Agreement, on and after the Closing Date to but not including the date that is
the earlier of (x) the date on which this Agreement is terminated pursuant to
Section 10 and (y) the date on which IBM Credit terminates the Credit Line
pursuant to Section 9, IBM Credit agrees to extend to the Customer a credit line
("Credit Line") in the amount set forth in Attachment A pursuant to which IBM
Credit will make to the Customer, from time to time, A/R Advances in an
aggregate amount at any one time outstanding not to exceed the Maximum Advance
Amount."

         F. Section 2.5 of the Agreement is hereby amended by deleting this
section in its entirety and substituting, in lieu thereof, the following:

         "2.5. Shortfall. If, on any date, the Outstanding Advances other than
the Outstanding Term Loan shall exceed the Maximum Advance Amount (such excess,
the "Shortfall Amount"), then the Customer shall on such date prepay the
Outstanding Advances other than the Outstanding Term Loan in an amount equal to
such Shortfall Amount."

         G. Section 2.7(B) of the Agreement is hereby amended by deleting this
section in its entirety and substituting, in lieu thereof, the following:

         "(B) The Term Loan may not be reborrowed by Customer notwithstanding
repayment or prepayment thereof. Subject to the terms and conditions of this
Agreement, any amount prepaid or repaid to IBM Credit in respect to the
Outstanding Advances other than the Outstanding Term Loan may be reborrowed by
Customer in accordance with the provisions of this Agreement."

         H. The following provisions shall be inserted at the end of Section 2,
and are incorporated into and supplement the Agreement as if fully set forth as
additional terms therein. In the event of a conflict between the terms of this
Amendment and the terms of the Agreement, the terms of this Amendment will
control in determining the agreement between IBM Credit and Customer.

         "2.8 Term Loan Advance: (A) Subject to the terms and conditions of the
Agreement, IBM Credit shall make a loan (the "Term Loan") in a principal amount
not to exceed the Term Loan Commitment to Customer on the date (the "Term Loan
Commencement Date") specified in a written request to IBM Credit by Customer for
such Term Loan ("Request for Term Loan Advance") in the form of Schedule B
attached hereto. Customer shall deliver the Request for Term Loan Advance on or
prior to 1:00 p.m. (eastern time)

                                  Page 2 of 6
<PAGE>

one (1) Business Day prior to the Term Loan Commencement Date. The Request for
Term Loan Advance shall set forth the principal amount of the Term Loan. In no
event shall the Term Loan Commencement Date be later than thirty (30) Business
Days after the date of this Amendment is executed by Customer and IBM Credit.
Customer may deliver the Request for Term Loan Advance via facsimile.

         (B) Subject to the terms and conditions of this Amendment, IBM Credit
shall make the principal amount of the Term Loan available to Customer on the
Term Loan Commencement Date in immediately available funds to an account
maintained by Customer or as directed by Customer.

         (C) (i) The Term Loan shall accrue a finance charge on the unpaid
principal amount thereof, from and including the Term Loan Commencement Date to
and including the date such Term Loan is repaid in full in accordance with the
terms of this Amendment or as otherwise agreed to in writing by IBM Credit, at a
per annum rate equal to the lesser of (a) the Term Loan Finance Charge and (b)
the highest rate from time to time permitted by applicable law.

         (ii) If it is determined that the amounts received from Customer
pursuant to this subparagraph (C) shall otherwise be in excess of the highest
rate permitted by applicable law, then the amount representing such excess shall
be considered reductions to principal of Advances.

         (iii) The finance charges accrued on the Term Loan shall be paid in
accordance with Section 2.3(C) of the Agreement.

         (D) Customer shall pay the principal of the Term Loan on the date and
in the amount set forth in Schedule A (the "Term Loan Principal Payment
Schedule") and in any event, shall pay in full the Outstanding Term Loan on the
Term Loan Stated Maturity Date (or, such earlier date as such Term Loan may
become or be declared due and payable pursuant to Section 9 of the Agreement).

         (E) In the event of, and within three (3) days after a public offering
or private placement of shares of Customer or any of Customer's subsidiaries IBM
Credit may, in its sole discretion, require the Customer to make a mandatory
prepayment in the amount of 25% of the then outstanding balance of the Term Loan
("Minimum Prepayment Amount").

         (F) Customer agrees not to use the proceeds of the Term Loan on
anything but to facilitate the Customer's acquisition of Turtle Mountain
Corporation ("Turtle Mountain").

         (G) Customer shall be obligated to pay the Prepayment Premium set forth
in Schedule A attached hereto in the event the Customer pays the Outstanding
Term Loan prior to the Term Loan Stated Maturity Date."

         I. Section 8.11 of the Agreement is hereby amended by inserting
immediately following the word "Advances" the parenthetical of "(other than the
Term Loan)".

         J. Section 9.2 of the Agreement is hereby amended by deleting 9.2(b) in
its entirety and substituting, in lieu thereof, the following:

         "(b) immediately terminate and reduce to zero the Credit Line and the
Term Loan Commitment hereunder."

         K. 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.

                                  Page 3 of 6
<PAGE>

SECTION 3. Effective Date. This Amendment shall be effective on the first date
on which all of the following events shall have occurred (the "Amendment
Effective Date"):

                  (i) Customer shall pay to IBM Credit Forty Thousand Dollars
         ($40,000.00) (the "Term Loan Closing Fee");

                  (ii) Customer shall have obtained a collateralized guaranty of
         all of its obligations to IBM Credit from Turtle Mountain (the
         "Guaranty") which Guaranty shall be in form and substance acceptable to
         IBM Credit;

                  (iii) There shall be no liens on the assets of Turtle Mountain
         other than those granted in favor of IBM Credit or permitted by IBM
         Credit;

                  (iv) This Amendment shall be duly executed and delivered by
         Customer and IBM Credit respectively; and

                  (v) As of the date hereof there shall not have occurred any
         change in or disruption of general financial or capital market
         conditions which materially and adversely affects the ability of
         financial institutions in the United States to extend credit.

Section 4. Representations and Warranties. Customer 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 4.1 Accuracy and Completeness of Warranties and Representations. All
representations made by Customer 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 Customer 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 4.2 Violation of Other Agreements. The execution and delivery of this
Amendment and the Agreement as amended hereby and the performance and observance
of the covenants to be performed and observed hereunder and thereunder do not
violate or cause Customer not to be in compliance with the terms of any
agreement to which Customer is a party.

Section 4.3 Litigation. Except as has been disclosed by Customer to IBM Credit
in writing, there is no litigation, proceeding, investigation or labor dispute
pending or threatened against Customer, which if adversely determined, would
materially adversely affect Customer's ability to perform Customer's obligations
under the Agreement and the other documents, instruments and agreements executed
in connection therewith or pursuant hereto.

Section 4.4 Enforceability of Amendment. This Amendment and the Agreement as
amended hereby have been duly authorized, executed and delivered by Customer and
is enforceable against Customer in accordance with its terms.

Section 5. Ratification of Agreement.Except as specifically amended hereby, all
of the provisions of the Agreement shall remain unamended and in full force and
effect. Customer hereby, ratifies, confirms and agrees that the Agreement, as
amended hereby, represents a valid and enforceable obligation of Customer, and
is not subject to any claims, offsets or defenses.

                                  Page 4 of 6
<PAGE>

Section 6. Governing Law. This Amendment shall be governed by and interpreted in
accordance with the laws which govern the Agreement.

Section 7. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be an original and all of which shall
constitute one agreement.

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

IBM CREDIT CORPORATION                      PEMSTAR INC.

By:                                         By: /s/ Robert R. Murphy
   -----------------------------------          --------------------------------

Print Name:                                 Print Name: Robert R. Murphy
            --------------------------                  ------------------------

Title:                                      Title: Treasurer
       -------------------------------             -----------------------------

Date:                                       Date: August 1, 2000
      --------------------------------            ------------------------------

            SCHEDULE A, EFFECTIVE DATE AUGUST 1, 2000 ("SCHEDULE A")
                                       TO
            AMENDMENT TO REVOLVING CREDIT AGREEMENT DATED MAY 5, 2000

(A) Term Loan Commitment : Nine and One Half Million Dollars and 00/100 Cents
($9,500,000.00);

(B) Term Loan Closing Fee : Forty Thousand Dollars ($40,000.00);

(C) Term Loan Finance Charge: Prime Rate plus 2.00%;

(D) Term Loan Stated Maturity Date: June 30, 2004;

(E) Term Loan Finance Charges are due monthly and as set forth in Section
2.8(C)(i) of the Amendment;

(F) Prepayment Premium: Prepayment of the Term Loan prior to the one year
anniversary of the Closing Date will result in the assessment of a 1.00% fee
multiplied by the amount prepaid in excess of the Minimum Prepayment Amount;

(G) Term Loan Principal Payment Schedule:

<TABLE>
<CAPTION>
---------------------- --------------------------- ----------------- ------------------
                                                        Term Loan      Outstanding Term
Payment #              Payment Due Date                 Amount Due        Loan Amount
---------              ----------------                 ----------        -----------
-------------------------------------------------------------------- ------------------
<S>                    <C>                          <C>                <C>
Beginning Balance                                                           $9,500,000
-------------------------------------------------------------------- ------------------
1                      September 30, 2000                  $300,000         $9,200,000
---------------------- --------------------------- ----------------- ------------------
2                      December 31, 2000                   $300,000         $8,900,000
---------------------- --------------------------- ----------------- ------------------
3                      March 31, 2001                      $400,000         $8,500,000
---------------------- --------------------------- ----------------- ------------------
4                      June 30, 2001                       $400,000         $8,100,000
---------------------- --------------------------- ----------------- ------------------
5                      September 30, 2001                  $400,000         $7,700,000
---------------------- --------------------------- ----------------- ------------------
6                      December 31, 2001                   $400,000         $7,300,000
---------------------- --------------------------- ----------------- ------------------
</TABLE>

                                  Page 5 of 6
<PAGE>

<TABLE>
<CAPTION>
<S>                    <C>                          <C>                <C>
7                      March 31, 2002                      $500,000         $6,800,000
---------------------- --------------------------- ----------------- ------------------
8                      June 30, 2002                       $500,000         $6,300,000
---------------------- --------------------------- ----------------- ------------------
9                      September 30, 2002                  $500,000         $5,800,000
---------------------- --------------------------- ----------------- ------------------
10                     December 31, 2002                   $500,000         $5,300,000
---------------------- --------------------------- ----------------- ------------------
11                     March 31, 2003                      $600,000         $4,700,000
---------------------- --------------------------- ----------------- ------------------
12                     June 30, 2003                       $600,000         $4,100,000
---------------------- --------------------------- ----------------- ------------------
13                     September 30, 2003                  $600,000         $3,500,000
---------------------- --------------------------- ----------------- ------------------
14                     December 31, 2003                   $600,000         $2,900,000
---------------------- --------------------------- ----------------- ------------------
15                     March 31, 2004                    $1,450,000         $1,450,000
---------------------- --------------------------- ----------------- ------------------
16                     June 30, 2004                     $1,450,000                 $0
---------------------- --------------------------- ----------------- ------------------
</TABLE>

                                   SCHEDULE B

                          REQUEST FOR TERM LOAN ADVANCE

CUSTOMER NAME: PEMSTAR INC.

IBM CREDIT CUSTOMER NUMBER: 28794

REQUESTED TERM LOAN ADVANCE AMOUNT: $9,500,000.00

REQUESTED DATE OF ACH TRANSFER:   ______________

PEMSTAR INC. hereby requests approval of a Term Loan Advance from IBM Credit
Corporation ("IBM Credit") in the amount shown above pursuant to the Revolving
Credit Agreement dated as of May 5, 2000 (as amended, supplemented or otherwise
modified from time to time, the "Agreement").

By my signature below, I certify to IBM Credit that, to the best of my knowledge
and belief, as of the date hereof, there as occurred no Event of Default nor any
event which, with the passage of time would create an Event of Default as set
forth in the Agreement.

BY: _________________________________________        DATE: _____________

PRINT NAME: ________________________________

TITLE: ______________________________________

ACCEPTANCE BY IBM CREDIT CORPORATION:

______________________  ______________           ______________________________
REGION MANAGER              DATE                 $ AMOUNT OF TERM LOAN ADVANCE
<PAGE>

                        ATTACHMENT A, ("ATTACHMENT A") TO
                    REVOLVING CREDIT AGREEMENT ("AGREEMENT")
                                DATED May 3, 2000

Customer Name: PEMSTAR INC.

Effective Date of this Attachment A: August 1, 2000

I. Fees, Rates and Repayment Terms:

         (A)    Credit Line: Forty Million Dollars ($40,000,000.00);
         (B)    Borrowing Base:
                (i) 95% of the amount of the Customer's Eligible Accounts (other
                than Concentration Accounts) from International Business
                Machines Corp. ("IBM") as account debtor as of the date of
                determination as reflected in the Customer's most recent
                Collateral Management Report;

                (ii) 90% of the amount of the Customer's Eligible Accounts
                (other than Concentration Accounts) from Celestica Inc.
                ("Celestica"), Solectron Corp. ("Solectron"), Honeywell Inc.
                ("Honeywell"), and Minnesota Mining & Manufacturing Company
                ("3M") as account debtor as of the date of determination as
                reflected in the Customer's most recent Collateral Management
                Report;

                (iii)(a) before an audit on Turtle Mountain Corporation ("Turtle
                Mountain") has been completed to the satisfaction of IBM Credit,
                65%, and (b) after the completion of such audit, 90% of the
                amount of Turtle Mountain's Eligible Accounts from Solectron,
                Honeywell, and 3M as account debtor as of the date of
                determination as reflected in the Customer's most recent
                Collateral Management Report;

                (iv) 85% of the amount of the Customer's Eligible Accounts
                (other than Concentration Accounts) from FlowPoint Corporation
                ("FlowPoint") as account debtor as of the date of determination
                as reflected in the Customer's most recent Collateral Management
                Report;

                (v) 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 (i) of the Borrowing Base;

                Notwithstanding the terms of Section 3.1(W) of the Agreement,
                Accounts arising from incentive payments, rebates, discounts and
                refunds which are (i) verifiable by Authorized Suppliers, and
                (ii) payable by Authorized Suppliers by check to the Lockbox
                will be deemed to be Eligible Accounts.

                (vi) 100% of the Customer's Eligible Finished Goods Inventory
                destined for IBM;

                (vii) 97% of the Customer's Eligible Parts Inventory destined
                for IBM;

                (viii) 80% of the Customer's Eligible Parts Inventory and
                Eligible Finished Goods Inventory destined for Solectron,
                Honeywell, and 3M;

                (ix) (a) before an audit onTurtle Mountain has been completed to
                the satisfaction of IBM Credit, 65%, and (b) after completion of
                such audit, 80% of the Customer's Eligible Parts Inventory and
                Eligible Finished Goods Inventory destined for Solectron,
                Honeywell, and 3M;

                                  Page 1 of 5
<PAGE>

                (x) 78% of the Customer's Eligible Parts Inventory destined for
                Celestica;

                (xi) 70% of the Customer's Eligible FlowPoint Inventory.

                Eligible Finished Goods Inventory shall mean finished goods
                inventory designated and identified as product to be sold to
                IBM, Solectron, Honeywell, or 3M that is evidenced by (i)
                purchase orders from IBM, Solectron, Honeywell, or 3M to
                Customer or Turtle Mountain or (ii) a written agreement that
                IBM, Solectron, Honeywell, or 3M will purchase such inventory.

                Eligible Parts Inventory shall mean parts inventory designated
                and identified as parts to be used to manufacture product (the
                Eligible Finished Goods Inventory) to be sold to IBM, Solectron,
                Honeywell, or 3M that is evidenced by (i) purchase orders from
                either IBM, Solectron, Honeywell, 3M or Celestica to Customer or
                Turtle Mountain or (ii) a written agreement that IBM, Solectron,
                Honeywell, or 3M will purchase such inventory.

                Eligible FlowPoint Inventory shall mean raw material and
                finished goods inventory designated and identified by the
                Customer in its periodic collateral report or borrowing request
                to IBM Credit as inventory applicable to product sold to, or to
                be manufactured and sold to, FlowPoint pursuant to purchase
                orders or other written agreements binding FlowPoint to purchase
                such product.

         (C)    A/R Finance Charge:
                (i)   WCO Advance Charge:  Prime Rate plus 1.00%.
         (D)    Delinquency Fee Rate:      Prime Rate plus 6.500%.
         (E)    Shortfall Transaction Fee: Shortfall Amount multiplied by 0.30%.
         (F)    Other Charges:

                (i) Application Processing Fee: One Hundred Thousand Dollars
                ($100,000.00).

                (ii) Upfront Fee: Fifty Thousand Dollars ($50,000.00).

                (iii) Commitment Fee: 0.25% 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.

                (iv) Termination Fee: One Hundred Fifty Thousand Dollars
                ($150,000.00) will be due from Customer to IBM Credit if
                Customer terminates the Agreement prior to the one year
                anniversary of the Agreement. IBM Credit, in its sole
                discretion, may reduce the amount of the Termination Fee.

                                  Page 2 of 5
<PAGE>

II. Bank Account

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

               Name of Bank:              U.S. Bank
               Address:                   155 1st Avenue S.W.
                                          Rochester, MN 55902
               Phone:                     Mr. Bruce Gudlin  (507) 285-7943
                                          Ms. Gwen Persons  (507) 285-7937
               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
--------------------------------------------------------------------------------

                                  Page 3 of 5
<PAGE>

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).

        PEMSTAR Credit Agreement shall mean the Credit Agreement dated June 4,
        1999 among PEMSTAR INC., the Banks, and U.S. Bank, National Association,
        as agent.

        The following financial definitions will have meanings as prescribed in
        the PEMSTAR Credit Agreement, Section 1.1:

        - Adjusted Equity
        - Capital Expenditures
        - Cash Flow Leverage Ratio
        - Current Ratio
        - Fixed Charge Coverage Ratio
        - Monthly Measurement Date
        - Net Income
        - Quarterly Measurement Date

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:

<TABLE>
<CAPTION>
                                                    Covenant
       Covenant                                     Requirement
       ------------------------------------------   -----------
<S>    <C>                                          <C>
(i)    As of the Quarterly Measurement Dates        (i)   5.00:1.00 from 3/31/2000
       specified, the Cash Flow Leverage Ratio      through 12/31/2000
       must be less than or equal to:               (ii)  3.00:1.00 from 1/01/2001
                                                    through 3/31/2001
                                                    (iii)  2.50:1.00 from 4/01/2001
                                                    and periods thereafter.
(ii)   As of any Quarterly Measurement Date, the    1.30:1.00.
       Fixed Charge Coverage Ratio must be equal
       to or greater than:
(iii)  As of any Monthly Measurement Date, the      (i)  1.05:1.00 through 3/31/2001
       Current Ratio must be equal to or greater    (ii)  1.10:1.00 from 4/01/2001 and
       than:                                        periods thereafter.
(iv)   As of any Monthly Measurement Date, the      the sum of (i) $27,000,000 plus
       Adjusted Equity must be equal to or          (ii) 90% of the Borrower's
       greater than:                                cumulative consolidated Net Income
                                                    (without deduction for any losses)
                                                    earned on or after June 1, 1999.
(v)    Capital Expenditures cannot exceed:          $10,000,000 in the aggregate on a
                                                    consolidated basis during any of
                                                    the Borrower's fiscal years.
</TABLE>

Any amendments or modifications to the provisions or definitions of the U.S.
Bank Credit Agreement incorporated in this Attachment A shall not be effective
with respect to this Attachment A or any revolving credit agreement provided by
IBM Credit, unless IBM Credit and the Customer shall have agreed in writing

                                  Page 4 of 5
<PAGE>

to such amendments or modifications, as the case may be. Nothing in this
paragraph shall be deemed to require IBM Credit's consent to amend or modify the
provisions or definitions of the U.S. Bank Credit Agreement.

IV. Additional Conditions Precedent Pursuant to Section 5.1 (K) of the
    Agreement:

|X| Executed Contingent Blocked Account Amendment;

|X| Executed Waiver of Landlord Lien for all premises in which a landlord has
the right of levy for rent;

|X| Fiscal year-end financial statements of Customer as of end of Customer's
prior fiscal year audited by an independent certified public accountant;

|X| A Certificate of Location of Collateral whereby the Customer certifies where
Customer presently keeps or sells inventory, equipment and other tangible
Collateral;

|X| Subordination or Intercreditor Agreements from all creditors having a lien
which is superior to IBM Credit in any assets that IBM Credit relies on to
satisfy Customer's obligations to IBM Credit with the exception of (i) a
Subordination Agreement from the City of Rochester, Minnesota, and (ii) a
Subordination Agreement from the City of Dunseith, North Dakota;

|X| Listing of all creditors providing accounts receivable financing to
Customer;

|X| A Collateral Management Report in the form of Attachment E as of the Closing
Date;

|X| A Compliance Certificate as to Customer's compliance with the financial
covenants set forth in Attachment A as of the last fiscal month of Customer for
which financial statements have been published;

|X| An Opinion of Counsel substantially in the form and substance of Attachment
G whereby the Customer's counsel states his or her opinion about the execution,
delivery and performance of the Agreement and other documents by the Customer;

|X| A Corporate Secretary's Certificate substantially in the form and substance
of Attachment H certifying to, among other items, the resolutions of Customer's
Board of Directors authorizing borrowing by Customer;

|X| Termination or release of Uniform Commercial Code filing by another creditor
as required by IBM Credit;

|X| Intercreditor Agreement among IBM Credit, U.S. Bank individually and as
Agent, in form and substance satisfactory to IBM Credit.

V. Additional Conditions Subsequent:

|X| Executed Collateralized Guaranty of Turtle Mountain Corporation;

|X| A first broad perfected security interest on Turtle Mountain Corporation, in
form and substance satisfactory to IBM Credit.

The above conditions subsequent must be fulfilled to the satisfaction of IBM
Credit no later than two business days after the Closing Date.

|X| Executed Subordination Agreement from the City of Dunseith, North Dakota.

The above condition subsequent must be fulfilled to the satisfaction of IBM
Credit no later than 30 days after the Closing Date.

                                  Page 5 of 5Exhibit 10.1
Form of Restricted Share Agreement

         WHEREAS,  ____________  (the "Grantee") is an executive of Great Lakes
REIT, a Maryland real estate investment trust (the "Company"); and

         WHEREAS,  the  grant  of  the  Restricted  Shares  (as  defined  in the
Company's  Amended and Restated 1997 Equity and Performance  Incentive Plan (the
"Plan")) has been  authorized by a resolution of the  Compensation  Committee of
the Board of Trustees of the Company (the  "Board") that was duly adopted on May
16, 2000;

         NOW, THEREFORE,  pursuant to the Plan, the Company hereby grants to the
Grantee ___________  Restricted Shares (such ___________ Restricted Shares being
hereinafter  referred to as the  "Restricted  Shares"),  effective as of June 1,
2000 (the "Date of Grant"),  and subject to the terms and conditions of the Plan
and the terms and conditions of this Agreement;

     1. Definitions. All capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to them in the Plan.

     2. Issuance of Shares. The Restricted Shares shall be issued to the Grantee
as soon as practicable  following the Grantee's execution and acceptance of this
Agreement,  shall be fully paid and  nonassessable and shall be represented by a
certificate or certificates  issued in the name of the Grantee and endorsed with
an appropriate legend referring to the restrictions hereinafter set forth.

     3.  Restrictions  on Transfer of Shares.  The Restricted  Shares may not be
sold,  assigned,   transferred,   conveyed,   pledged,  exchanged  or  otherwise
encumbered or disposed of by the Grantee, except to the Company, until they have
become  nonforfeitable  as provided in Section 4;  provided,  however,  that the
Grantee's  rights with respect to the  Restricted  Shares may be  transferred by
will or  pursuant  to the  laws  of  descent  and  distribution.  Any  purported
encumbrance  or  disposition  in violation of the  provisions  of this Section 3
shall be void ab initio,  and the other party to any such purported  transaction
shall not obtain any rights to or interest in the Restricted Shares. As and when
permitted  by the  Plan,  the  Company  may in its  sole  discretion  waive  the
restrictions  on  transferability  with  respect  to  all  or a  portion  of the
Restricted Shares.

     4. Vesting of Shares. (a) To the extent that they shall not have previously
become  nonforfeitable  as provided  below,  the Restricted  Shares shall become
nonforfeitable ten years from the Date of Grant (the "Vesting Period"),  subject
to the  Grantee  remaining  in the  continuous  employment  of the  Company or a
subsidiary of the Company  during the Vesting  Period.  For the purposes of this
Agreement,  the  continuous  employment  of the  Grantee  with the  Company or a
subsidiary of the Company shall not be deemed interrupted, and the Grantee shall
not be deemed to have ceased to be an employee of the Company or a subsidiary of
the Company, by reason of a leave of absence approved by the Board.

(b)      Notwithstanding the provisions of Section 4(a):

                  (i)  Some  or  all  of  the   Restricted   Shares  may  become
nonforfeitable  during the period from the Date of Grant  through and  including
December 31, 2002 (the  "Performance  Period,"  and each  December 31 during the
Performance  Period being  hereinafter  referred to as an "Early Vesting Date"),
provided  that the Grantee is still  employed by the Company or a subsidiary  of
the Company on the applicable Early Vesting Date.

                  (ii) If the Grantee ceases to be an employee of the Company or
a subsidiary  of the Company  during the Vesting  Period as the result of his or
her death or  Disability  (as  hereinafter  defined),  a ratable  portion of the
Restricted Shares that would otherwise have become  nonforfeitable at the end of
the Vesting  Period,  less any  Restricted  Shares that  previously  have become
nonforfeitable  pursuant  to Section  4(b)(i)  above,  shall vest based upon the
number of full  months  that has  elapsed  during the  Vesting  Period up to and
including  the date of such  cessation of  employment.  "Disability"  shall mean
Grantee's  permanent  disability within the meaning of the long-term  disability
plan in effect for (or applicable to) Grantee.

     5.  Determination  of  Achievement  of  Management  Objectives.  As soon as
practicable  after each Early  Vesting Date and in no event later than [90] days
thereafter,  the  Compensation  Committee of the Board shall  determine  (a) the
extent,  if any, to which the Management  Objectives for the applicable  periods
ending  on the  applicable  Early  Vesting  Date  shall  have been  achieved  in
accordance with Exhibit A which exhibit is  incorporated  herein and made a part
of this  Agreement by this reference  thereto,  and (b) the number of Restricted
Shares  (rounded down to the nearest whole share for  Performance  Years 1 and 2
and  rounded  up for  Performance  Year  3),  if any,  that  shall  have  become
nonforfeitable  as of the  applicable  Early  Vesting  Date in  accordance  with
Exhibit A.

     6. Forfeiture of Shares.  Except as and to the extent the Restricted Shares
have become  nonforfeitable  pursuant to Sections 4 and 5, the Restricted Shares
shall be forfeited by the Grantee,  if the Grantee  ceases to be employed by the
Company or a subsidiary  of the Company  prior to the tenth  anniversary  of the
Date  of  Grant,  and  the  certificate(s)  representing  Restricted  Shares  so
forfeited shall be canceled.

     7. Dividend,  Voting and Other Rights. Except as otherwise provided in this
Agreement,  from and after the Date of Grant,  the Grantee shall have all of the
rights of a shareholder  with respect to the  Restricted  Shares,  including the
right to vote the  Restricted  Shares and receive any dividends that may be paid
thereon;  provided,   however,  that  any  additional  Common  Shares  or  other
securities that the Grantee may become  entitled to receive  pursuant to a stock
dividend,  stock  split,   recapitalization,   combination  of  shares,  merger,
consolidation,  separation or  reorganization or any other change in the capital
structure  of the Company  shall be subject to the same risk of  forfeiture  and
restrictions  on transfer  as the  forfeitable  Restricted  Shares in respect of
which they are issued or transferred and shall become  Restricted Shares for the
purposes of this Agreement.

     8. Retention of Stock  Certificate(s)  by the Company.  The  certificate(s)
representing  the  Restricted  Shares  shall be held in custody by the  Company,
together  with a stock  power  endorsed  in blank by the  Grantee  with  respect
thereto,  until such  shares  have  become  nonforfeitable  in  accordance  with
Sections 4 and 5.

     9. Compliance with Law. The Company shall make reasonable efforts to comply
with all  applicable  federal  and state  securities  laws;  provided,  however,
notwithstanding any other provision of this Agreement,  the Company shall not be
obligated to issue or release from  restrictions  on transfer any Common  Shares
pursuant  to this  Agreement  if such  issuance  or  release  would  result in a
violation of any such law.

     10.  Withholding  Taxes.  If the Company or any  subsidiary  of the Company
shall be  required  to  withhold  any  federal,  state,  local or foreign tax in
connection  with any  issuance or vesting of Common  Shares or other  securities
pursuant to this  Agreement,  and the amounts  available  to the Company or such
subsidiary for such withholding are insufficient,  the Grantee shall pay the tax
or make provisions  that are  satisfactory to the Company or such subsidiary for
the  payment  thereof.  The  Grantee may elect to satisfy all or any part of any
such withholding  obligation by surrendering to the Company or such subsidiary a
portion of the Restricted Shares that become nonforfeitable  hereunder,  and the
Common Shares so surrendered  by the Grantee shall be credited  against any such
withholding  obligation  at the Market Value per Share of such Common  Shares on
the date of such surrender.

     11. No  Employment  Contract.  Nothing  contained in this  Agreement  shall
confer upon the Grantee any right with respect to  continuance  of employment by
the Company or a subsidiary  of the Company or limit or affect in any manner the
right of the Company or a subsidiary of the Company to terminate the  employment
or adjust the compensation of the Grantee.

     12.  Relation  to Other  Benefits.  Any  economic  or other  benefit to the
Grantee  under this  Agreement  or the Plan  shall not be taken into  account in
determining  any  benefits  to which  the  Grantee  may be  entitled  under  any
profit-sharing,  retirement or other benefit or compensation  plan maintained by
the  Company or a  subsidiary  of the Company and shall not affect the amount of
any  life  insurance  coverage  available  to any  beneficiary  under  any  life
insurance plan covering employees of the Company or a subsidiary of the Company.

     13.  Amendments.  Any  amendment  to the  Plan  shall  be  deemed  to be an
amendment  to this  Agreement  to the extent that the  amendment  is  applicable
hereto;  provided,  however, that no amendment shall adversely affect the rights
of the Grantee under this Agreement without the Grantee's written consent.

     14.  Severability.  In the event that one or more of the provisions of this
Agreement  shall  be  invalidated  for  any  reason  by  a  court  of  competent
jurisdiction,  any provision so invalidated shall be deemed to be separable from
the other provisions hereof, and the remaining  provisions hereof shall continue
to be valid and fully enforceable.

     15. Relation to Plan. This Agreement is subject to the terms and conditions
of the Plan. In the event of any inconsistent  provisions between this Agreement
and the Plan, the Plan shall govern.  The Board acting  pursuant to the Plan, as
constituted  from time to time,  shall  except as otherwise  expressly  provided
herein  have the  right  to  determine  any  questions  that  arise  under  this
Agreement.

     16. Successors and Assigns. The provisions of this Agreement shall inure to
the benefit of, and be binding  upon,  the  successors,  administrators,  heirs,
legal  representatives and assigns of the Grantee and the successors and assigns
of the Company.

     17.  Notices.  Any notice to the Company  provided  for herein  shall be in
writing to the  attention of the  Corporate  Secretary at Great Lakes REIT,  823
Commerce Drive,  Oak Brook,  Illinois 60523, and any notice to the Grantee shall
be addressed  to the Grantee at his address  currently on file with the Company.
Except as otherwise  provided  herein,  any written notice shall be deemed to be
duly given if and when hand  delivered,  or five business days after having been
mailed by United States registered or certified mail, return receipt  requested,
postage  prepaid,  or three business days after having been sent by a nationally
recognized  overnight  courier  service,  addressed as aforesaid.  Any party may
change the address to which notices are to be given  hereunder by written notice
to the other  party as herein  specified,  except  that  notices  of  changes of
address shall be effective only upon receipt.

     18.  Governing  Law. The laws of the State of  [Maryland]  shall govern the
rights and  responsibilities  associated with the Restricted Shares and the laws
of the State of Illinois, without giving effect to the principles of conflict of
laws thereof, shall govern all other aspects of the interpretation,  performance
and enforcement of this Agreement.
                         [signature page follows]

<PAGE>

This Agreement is executed by the Company as of the 22nd day of June 2000.
                                                     Great Lakes REIT

                                                     By:
                                                          Name:
                                                          Title:

The  undersigned  hereby  acknowledges  receipt of an executed  original of this
Agreement and accepts the award of Restricted  Shares  granted  hereunder on the
terms and conditions set forth herein and in the Plan.

Date:    June 1, 2000

<PAGE>

                                    Exhibit A

                              Management Objectives

1. Management Objectives. The Management Objectives applicable to the Restricted
Shares for each of the years ending  December  31,  2000,  2001 and 2002 (each a
"Performance  Year") shall be based on the Company's  ranking within an index of
the levels of annual growth in funds from operations ("FFO") per share of common
stock (or other comparable interest) (the "Growth Rate") for each company in the
Company's peer group1 (the "FFO Growth Index").

     The  applicable  FFO Growth  Index  shall be arranged  in  ascending  order
beginning  with the company  with the lowest  Growth  Rate,  and ending with the
company with the highest  Growth Rate.  The company with the median  Growth Rate
shall represent the 50th percentile (the "Median").

2. Annual Growth Rate  Determination.  For Performance Year 1, the Annual Growth
Rate for the Company and each company in the Company's peer group shall be equal
to the percentage  increase in FFO per Common Share or share of common stock (or
other comparable interest), as the case may be, for the year ending December 31,
2000, over such FFO for the year ended December 31, 1999 (the "Base Year").  For
Performance  Years 2 and 3,  the  annual  Growth  Rate for the  Company  and the
Company's  peer group shall be computed based on a computation of the percentage
increase  in FFO  for  such  Performance  Year  compared  to  such  FFO  for the
immediately preceding year.

3. Cumulative  Growth Rate  Determination.  For  Performance  Years 2 and 3, the
Growth Rate for the Company and each company is the  Company's  peer group shall
be  computed on a  cumulative  basis for the two and three year  periods  ending
December 31, 2001 and 2002,  respectively,  based on the percentage  increase in
FFO per Common  Share or share of common stock (or other  comparable  interest),
for such two or three  year  period,  as the case may be,  over such FFO for the
Base Year.

4. Minimum and Target Rankings.  The following  Management  Objectives have been
established for the Company2:

--------
1 The Board shall,  in its sole  discretion,  select the companies that comprise
the  Company's  peer  group  prior  to the  conclusion  of  Performance  Year 1.
Thereafter,  the Board may make  appropriate  modifications to the peer group to
reflect changes in the operations of the Company or other companies.

2 For the purpose of  determining  the Company's  achievement of the Minimum and
Target Milestones, with a ten company peer group, the Company's Growth Rate must
exceed that of the sixth  ranked  company,  and must equal or exceed that of the
third ranked company,  respectively. In the event the number of companies in the
peer group  changes  the Board  shall  make  appropriate  modifications  to this
specification.
<PAGE>
           Milestones              Company's Ranking Within the FFO Growth Index

       Minimum Milestone:          Greater than or equal to the Median and less
                                   than the 75th percentile
       Target Milestone:           Greater than or equal to the 75th percentile.

5. Performance-Based Vesting. On each Early Vesting Date, up to one-third of the
total number of Restricted  Shares,  (rounded down to the nearest whole share in
Years 1 and 2 and rounded up in Year 3) (the "Annual Maximum  Earn-Out  Amount")
may become vested and nonforfeitable,  depending on whether the Target Milestone
for such year is achieved or whether the Minimum  Milestone  (but not the Target
Milestone) for such year is achieved. In addition, in Performance Years 2 and 3,
any Restricted  Shares which could have become vested and  nonforfeitable  on or
before the  applicable  Early  Vesting Date but for the fact that an  applicable
Milestone  was not  achieved  previously  may become  vested and  nonforfeitable
depending on whether the Target Milestone or Minimum Milestone has been achieved
on a cumulative basis as computed pursuant to paragraph 3 above.

(a) Achievement of Target Milestone. If the Target Milestone is achieved for any
Performance  Year, 100 percent of the applicable  annual Maximum Earn-Out Amount
will become vested and nonforfeitable.  In addition, with respect to Performance
Years 2 and 3, if the  applicable  Target  Milestone is achieved on a cumulative
basis, any Restricted  Shares which could have become vested and  nonforfeitable
on or  before  the  applicable  Early  Vesting  Date  but for the  fact  that an
applicable   Milestone  was  not  achieved  previous  shall  become  vested  and
nonforfeitable.

(b) Achievement of Minimum  Milestone but Not Target  Milestone.  If the Minimum
Milestone is achieved for any  Performance  Year,  but the Target  Milestone for
such Performance  Year is not achieved,  one-half of the annual Maximum Earn-Out
Amount will become  vested and  nonforfeitable.  In  addition,  with  respect to
Performance  Years 2 and 3, if the Minimum Milestone is achieved on a cumulative
basis but the applicable  cumulative Target Milestone is not achieved,  one-half
of the aggregate of (1) any Restricted Shares which previously became vested and
nonforfeitable  and (2) any Restricted Shares which could have become vested and
nonforfeitable  on or before the applicable  Early Vesting Date but for the fact
that an applicable Milestone was not achieved previously shall become vested and
nonforfeitable.

6. By way of example and not as a limitation,  if in Performance  Years 1 and 2,
the Company did not achieve the Median in FFO growth on an annual or  cumulative
basis, no Restricted Shares would vest on the first two Early Vesting Dates. If,
in  Performance  Year 3, the  Company's FFO growth for the year placed it in the
90th percentile,  one-third on the total Restricted Shares would vest and become
nonforfeitable.  In  addition,  if the  Company's  FFO growth for the three year
period  ending  December  31,  2002  placed the  Company in the 70th  percentile
compared to its peer  group,  then an  additional  one-sixth  of the  Restricted
Shares would vest and become  nonforfeitable  (i.e.,  one-half of all Restricted
Shares less the one-third that vested in connection with the annual  performance
for Performance Year 3).

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