EXHIBIT 10.5   AGREEMENT        AGREEMENT dated as of October 15, 1996, by and
between Deere & Company, a Delaware corporation ("Deere") and John Deere Capital
Corporation, a Delaware corporation ("JDCC").   WITNESSETH:        WHEREAS,
Deere owns all of the outstanding common stock of JDCC; and        WHEREAS,
Deere and JDCC believe that it is their respective best interest to demonstrate
Deere's support for JDCC to debt holders and derivative counterparties.  
     NOW, THEREFORE, in consideration of the foregoing, the mutual advantage and
benefit of the parties hereto and other good and valuable consideration, the
parties hereto hereby agree as follows:     1. Fixed Charges Ratio. Deere shall
make income maintenance payments to JDCC, constituting additions to the pre-tax
income of JDCC, to the extent that such payments are necessary to cause the
ratio of Net Earnings Available for Fixed Charges to Fixed Charges of JDCC and
consolidated affiliates (determined on a consolidated basis and in accordance
with GAAP) to be not less than 1.05 for each JDCC fiscal quarter.       2.
Ownership. Deere or one or more of its direct or indirect wholly-owned
subsidiaries or a combination thereof will continue to own at least fifty-one
percent (51%) of the shares of capital stock of JDCC having voting power for the
election of directors, provided, however, that JDCC may merge or consolidate
with, or sell or convey substantially all of its assets, to Deere, if in
connection therewith, Deere shall expressly assume the due and punctual payment
of all of JDCC's rated debt.       3. Minimum Net Worth. Deere shall cause JDCC
to have as at the end of any fiscal quarter a Consolidated Tangible Net Worth of
at least $50,000,000.       4. No Guaranty. This Agreement is not, and nothing
herein contained and nothing done pursuant hereto by Deere shall be deemed to
constitute, a guaranty by Deere of the payment of any indebtedness, obligation
or liability of any kind or character whatsoever of JDCC or any of JDCC's direct
or indirect subsidiaries.       5. Term. This Agreement may be modified, amended
or terminated, at Deere's election, upon thirty days prior written notice to
JDCC and to Moody's Investors Service, Inc. ("Moody's"), Standard & Poors
Ratings Group ("S&P") and Fitch Investors Service, Inc. ("Fitch") if (a) such
modification, amendment or termination would not result in a downgrade of JDCC's
rated public debt ("Debt") by Moody's, S&P or Fitch; or (b) the modification,
amendment or notice of termination provides that this Agreement will continue in
effect with respect to Debt outstanding on the effective date of the
modification, amendment or termination; or (c) JDCC has no

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    outstanding rated public long-term Debt. For purposes hereof, no portion of
any Debt shall be considered "outstanding" if such Debt shall be defeased or
discharged in accordance with the indenture or other governing instrument
defining the rights of the holders of such Debt. Upon termination of this
Agreement, no further obligation on the part of Deere shall thereafter arise
hereunder.       6. Defined Terms. Capitalized terms used herein, but not
defined herein, shall be as defined in the $3,500,000,000 Credit Agreement dated
as of April 5, 1995, amended as of February 27, 1996 and among Deere and JDCC
and The Chase Manhattan Bank (formerly Chemical Bank) as Administrative Agent
and as Auction Agent, Deutsche Bank AG Chicago Branch as Syndication Agent, Bank
of America National Trust and Savings Association as Documentation Agent, and
The Toronto-Dominion Bank as Canadian Administrative Agent and various
institutions as Managing Agents and co-agents, as such credit agreement or any
successor or replacement agreement may be amended from time to time.       7.
Waiver. Deere hereby waives any failure or delay on the part of JDCC in
asserting or enforcing any of its rights or in making any claims or demands
hereunder.       8. Rights of Lenders. The obligations of Deere to JDCC pursuant
to this Agreement are to JDCC only and do not run to, and are not enforceable
directly by, any creditor of JDCC; nor shall this Agreement cause Deere to be
responsible for the payment of any obligation of JDCC to any creditor thereof;
provided, however that any Lender to JDCC shall have the right to demand that
JDCC enforce JDCC's rights under this Agreement and if JDCC fails or refuses to
take timely action to enforce such rights such Lender may proceed against JDCC
to enforce JDCC's rights under this Agreement. The term Lender in this paragraph
8 shall mean any person, firm or corporation from whom JDCC is indebted for
borrowed money or that is a derivative counterparty to JDCC.       9.
Successors. The Agreements herein set forth shall be mutually binding upon, and
shall inure to the benefit of, Deere and JDCC and their respective successors
and assigns.       10. Governing Law. This Agreement shall be governed by the
laws of the State of New York.          IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be duly executed the day and year first above
written.

 

  DEERE & COMPANY       By: /s/ R. W. Lane

        JOHN DEERE CAPITAL CORPORATION         By: /s/ R. W. Lane

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