EXHIBIT 10.21 FACTORING AGREEMENT   THIS FACTORING AGREEMENT (the "Agreement")
is entered into as of __________________, 2002 between JOHN DEERE FINANCE S.A.,
a joint stock corporation with its principal office located at 5, rue Eugène
Ruppert, BP 1685 in L-1016 Luxembourg ("Purchaser"), and John Deere Vertrieb, a
branch of Deere & Company, located at John Deere Strasse 8, in D-76646 Bruchsal,
Germany ("Seller").   RECITALS   A. Seller is in the business of manufacturing
and selling equipment to dealers and in the operation of this business is the
owner of certain receivables;     B. Seller expects, in continuing to conduct
its business, to generate future receivables; and     C. Seller has invited
Purchaser to purchase the receivables and future receivables and Purchaser has
agreed to purchase the receivables and future receivables under the terms and
conditions set forth herein.       NOW, THEREFORE, in consideration of the
mutual covenants set forth in this Agreement and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:   ARTICLE I. FACTORING (PURCHASE OF PORTFOLIO;
ASSUMPTION OF RESPONSIBILITIES BY THE PARTIES)   1.1 Factoring         (A)
Purchased Assets. With effect from the end of each John Deere fiscal month and
subject to all of the terms and conditions set forth herein, Seller shall sell,
assign, transfer and convey to Purchaser, and Purchaser shall purchase and
receive from Seller subject to the terms of this Agreement, all of Seller's
right, title and interest in and to the following (collectively referred to as
the "Purchased Assets"):           (i) each and all of Seller's outstanding
dealer accounts receivable or notes receivable as of such date with a dealer or
anyone else obligated to make payments with respect to such receivables
including a guarantor thereof ( "Obligor"), in Seller's accounts as of the close
of business on the last day of each John Deere fiscal month (the "Receivables");
however, Seller and Purchaser are entitled to exclude certain Receivables from
the sale and purchase as provided for in the last paragraph of this Article
1.1.A.           (ii) all rights to any and all collateral which secures the
dealers' or any other Obligor's obligations to Seller pertaining to such
Receivables (the "Collateral");           (iii) all of the rights of Seller
provided by any Receivable agreements (but only to the extent that the rights of
Seller provided by any Receivable agreements relate to Receivables), meaning the
promissory notes, credit agreements, guaranties,

 

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    applications, security agreements and other agreements entered into by and
between Seller and its dealers or other Obligors otherwise evidencing or
governing the obligations of such dealers or other Obligors under the Seller's
accounts;         (iv) all security agreements, financing statements or other
instruments which relate to the Collateral.           Seller is entitled to
exclude, at Seller's discretion, from the Receivables any accounts. Purchaser is
entitled to reject any Receivable that could, in Purchaser's opinion, constitute
a bad debt. Such exclusion of accounts or rejection of Receivables will only be
valid if communicated to the other party latest on the Friday before the end of
the John Deere fiscal month in which the sale and purchase of the account or
Receivable would occur.         (B) Credit Risk and Loss. Upon the factoring,
the risk of late payment and credit loss on the Receivables shall become
Purchaser's. The factoring shall be non-recourse and the Purchaser shall not
have the right to sue the Seller in respect of Receivables transferred to it
other than in case of breach of this Agreement by the Seller or in case of fraud
or manifest dishonesty of the Seller or its agents.         (C) Interest,
Charges, Fees. The Purchaser is entitled to all rights to payment of interest,
charges and fees on sold Receivables.         (D) Interest on Cash Balances Held
by Seller. The Purchaser is entitled to interest on cash collected by the
Seller, but not yet paid to the Purchaser. Such interest will be based on the
Interest Cost, as defined below in Exhibit 1.2, applied to the daily average
balance of cash collected by the Seller during the month.         (E) Transfer
of Purchased Assets. The parties agree that the legal transfer of the Purchased
Assets shall occur on the last day of the relevant John Deere fiscal month
through mutually satisfactory accounting entries. On a periodic basis, the
parties will deliver a schedule (the "Notification Schedule") which will
summarize, in a form reasonably satisfactory to both Seller and Purchaser, the
sales of Receivables which shall have occurred since the date of the last
summary.       1.2 Purchase Price.         (A) Purchase Price Calculation.    
The purchase price for the Purchased Assets will be the principal balance of the
Receivables as of the close of business on the last business day of each John
Deere fiscal month plus all accrued but unpaid interest, without premium or
discount, less the Factoring Discount (being the service fee) as defined in
Exhibit 1.2.         (B) Purchase Price Payment. Purchaser shall pay each
purchase price or any other amounts payable under this Agreement in two
installments. The first installment will be an estimated payment calculated not
later than on the Wednesday before closing of the John Deere fiscal month and
settled through the Deere foreign exchange netting process on the

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    Friday before the closing of the John Deere fiscal month. The second
installment is the difference between the estimated payment and the actual
purchase price and will be calculated on the Wednesday after the closing of the
John Deere fiscal month and will be settled through the Deere foreign exchange
netting process on the Friday before closing of the succeeding Deere fiscal
month.     1.3 Assumption of Responsibilities by the Parties         (A)
Assumption of Liabilities. Purchaser shall not assume any liability, commitment,
or obligation of Seller, whether absolute or contingent, known or unknown, of
any nature, kind or description whatsoever, arising from or related to the
Purchased Assets, including, without limitation, liabilities arising under or
related to any contract, agreement or course of dealing between Seller and its
lessors, vendors, servicers, consultants, suppliers, brokers or any other party
or parties.         (B) Charge Backs, Credit Balances. Any charge backs,
presentments, credit balances or incorrectly posted transactions with respect to
the Receivables will ultimately be borne by the Seller. The Purchaser will bear
all expenses related to credit losses and conduct of litigation against dealers.
        (C) Final Authority. Notwithstanding the provisions in Articles 1.3 (A)
and (B), the Purchaser shall make all decisions relating to the accounts.      
1.4 Post-Sales Adjustments. Following the end of each John Deere fiscal month,
Seller shall, with Purchaser's cooperation and assistance, determine and credit
or account to Purchaser for any items or transactions that affect any of the
Receivables purchased in such month, but that were posted, un-posted or
unaccounted for in such month, including without limitation, cash, letters in
process relating to cash or other advances, access checks, payments in process,
unidentified or unallocated items, or errors.     1.5 Credit Notes and
Discounts.         (A) The Seller is irrevocably authorized to issue or grant in
good faith to Obligors Credit Notes without limit in amount or time during the
lifetime of the Agreement and after the termination date (except where
termination results from the Seller's Insolvency).         (B) When sending each
Notification Schedule to the Purchaser the Seller shall specify therein in
reasonable detail (including where reasonably practicable each relevant
purchased Receivable in respect of which there have been issued or granted)
those Credit Notes issued or granted prior to the close of business on the last
day of the John Deere fiscal month in question.         (C) The Seller shall pay
to the Purchaser in cleared funds an amount equal to the Credit Notes so
notified except to the extent that it is able to prove to the satisfaction of
the Purchaser that the relevant Obligor is unlikely to apply any such Credit
Note by way of set-off, credit or other deduction from any purchased Receivable
(present or future). The Seller shall make such payment within five business
days of sending to the Purchaser the relevant Notification Schedule.         (D)
Where a Credit Note is issued or granted after the due date of a purchased
Receivable, and where the Seller is due to make payment to the Purchaser in
respect of that Credit

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    Note under Article 1.5 (C), then the Seller shall at the same time as it is
due to make such payment pay to the Purchaser in the same manner an amount by
way of factoring charge applicable to the relevant purchased Receivable and
ending on the due date for payment in accordance with this Article 1.5 (D).    
1.6 True Factoring. The parties intend the transactions described herein to be
true factoring and an absolute and irrevocable transfer, sale and assignment of
the Purchased Assets from Seller to Purchaser for all purposes. The factoring
and the purchase of the Purchased Assets shall not be disclosed to the Obligors.
    ARTICLE II. SELLER'S REPRESENTATIONS AND WARRANTIES; REMEDIES   2.1
Representations and Warranties. Seller hereby makes the following
representations and warranties to Purchaser on each date on which Receivables
are sold by Seller to Purchaser and with respect to the Receivables sold on each
such date:         (A) Books and Records Complete. With respect to each
Receivable: (i) the Seller's books and records are true and complete in all
material respects, and (ii) all material information relating to the credit,
charges, fees, payment history, customer inquiries, information about the
dealers or other Obligors and regulatory correspondence which is known and
available to Seller relating to such Receivables is contained in the books and
records.         (B) Enforceability; Ownership. Each Receivable represents the
legal, valid and binding obligation of the Obligors thereunder and is
enforceable against such Obligors in accordance with its terms, except as the
same may be limited by bankruptcy, insolvency, moratorium or other laws or
regulations, in effect now or in the future, that affect the enforcement of
creditors' rights generally. Seller has full legal title to the Receivables and
has not assigned any right, title or interest in such Receivables to any other
Person.         (C) Set-off; Defenses. No Account nor such Receivable is the
subject of pending or, to the knowledge of Seller, threatened litigation. Seller
has administered all accounts in all material respects in accordance with all
requirements of applicable law and Seller's Policies and Procedures.         (D)
Lien. No Receivable is subject to any lien, interest or right of any person
other than Seller, or at the date of the sale and purchase of the relevant
Receivable, to any bankruptcy or imminent proceeding, or altered or reduced
payment program or imminent alteration or reduction thereof.         (E)
Ordinary course of Business. Seller has generated and will generate each
Receivable in the ordinary course of its business pursuant to and substantially
in accordance with Seller's Policies and Procedures as of the date hereof, or as
changed in consultation with the Purchaser.         (F) Servicing of
Receivables. All payments or monies received by Seller or its affiliates or
third party contractors with respect to the payment of any Receivable have been
properly applied. Each Account has been maintained and serviced by Seller in
accordance with Seller's Policies and Procedures as well as all requirements of
applicable law.

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2.2 Remedies for Breach of Representations and Warranties. All representations
and warranties shall survive for three years from the date of sale and purchase
of each individual Receivable. Seller shall, in accordance with all applicable
laws, indemnify and hold Purchaser, its employees, directors and agents harmless
from adverse consequences arising out of any material breach of any
representations or warranties of Seller contained herein or Seller's intentional
or gross negligent misconduct relating to the performance of Seller's
obligations hereunder. Seller's total obligations pursuant to Article III of
this Agreement shall, however not exceed the aggregate purchase price for the
Receivables.     ARTICLE III. GENERAL PROVISIONS     3.1 Severability. If any
term or condition of this Agreement should be held invalid by a court,
arbitrator or tribunal of competent jurisdiction in any respect such invalidity
shall not affect the validity of any other term or condition hereof. If any term
or condition of this Agreement should be held to be unreasonable as to time,
scope or otherwise by such a court, arbitrator or tribunal, it shall be
construed by limiting or reducing it to a minimum extent so as to be enforceable
under then applicable law. The parties hereto acknowledge that they would have
executed this Agreement with any such invalid term or condition excluded or with
any such unreasonable term or condition so limited or reduced.     3.2 Entire
Agreement; Amendments. This Agreement and its exhibits and the agreements it
incorporates by reference constitute the entire agreement of the parties with
regard to the specific subject matter hereof and supersede all prior written
and/or oral understandings between the parties. This Agreement may not be
amended except pursuant to a writing signed by both parties.     3.3 No Third
Party Beneficiaries. This Agreement is for the sole and exclusive benefit of the
parties hereto. Nothing in this Agreement shall be construed to grant to any
person other than the parties hereto, and their respective successors and
permitted assigns, any right, remedy or claim under or in respect of this
Agreement or any provision hereof.     3.4 Applicable Law; Place of
Jurisdiction. This agreement shall be governed by and construed in accordance
with the laws of Germany. Any dispute which cannot be resolved amicably between
the parties with regard to the interpretation, meaning, effect or application of
this Agreement shall be submitted to the competent court in Mannheim, Germany.

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     IN WITNESS WHEREOF, the parties have duly executed and delivered this
Factoring Agreement as of the day and year first above written.

JOHN DEERE FINANCE S.A. JOHN DEERE VETRIEB By: By:

Name: Stephen Pullin

Title: Director

Name: Markwart von Pentz

Title: General Manager By: By:

Name: Thomas Annis

Title: General Manager

Name: Nils Jäger

Title: Manager, Finance and Accounting

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EXHIBIT 1.2 Purchase Price Calculation -Factoring Discount     This Exhibit 1.2
describes the formulae for calculating the Factoring Discount on the sale and
purchase of trade receivables by Seller to Purchaser.   (i) On initial purchase
The Factoring Discount for the initial purchase will reflect the Credit Risk
composed by both the Average Annual Loss and the Average Annual Costs of Late
Payment experienced by the Seller during a period of 10 years prior to the date
of sale. It covers the credit risk for the period between inception and purchase
of the portfolio, assuming that the payment term of the population of purchased
receivables has elapsed by 50%, on average.   The factor will be calculated as
follows:   D=rcr*portfolio   with: r cr = (avg.loss + avg.late) * 100
          avg.receiv * turns * 2 + 2s

 

(ii) On each subsequent month end     The monthly Factoring Discount for
subsequent months will be calculated taking into account the Cost of Equity, the
Cost of Debt Funding, Administrative Costs, Service Costs and Credit Risk.   D =
d * (avg. portfolio month - past.due)   with:

d year = r debt + r equity + r ad min + r serv + r cr ; d day = d year

    365       r debt = debt *i avg r equity = equity * roe       r ad min = exp
ad min * 100 r cr = avg.loss + 2s + avg.late

  avg.portfolio year         r serv = exp serv * 100  

  avg.portfolio year  

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Definitions:

Term Description Dimension debt Average Indebtedness: Debt funding at arm's
length level as a percentage of total amount of debts of total assets. % equity
Average Equity: Equity funding at arm's length level as a percentage of total
average equity to total assets. % avg.late Average costs of late payment:
Average costs of funding of overdue receivables. % avg.loss Average loss:
Average loss as a percentage of total average outstanding receivables
experienced during a period of rolling 10 years; weighted by seniority %
avg.portfolio Average Portfolio: Average daily balances of portfolio reduced by
any cash received during a given fiscal month or fiscal year. currency
Avg.receiv Average Receivables: Average amount of receivables outstanding
experienced during a period of 10 years,; weighted by seniority. currency D
Factoring Discount: Amount of money accounted to the Purchase Price of purchased
Receivables Currency dYear Annual Discount Rate % dday Daily Discount Rate:
Based on 365 days per year % expadmin Annual Administrative Expenses: Budgeted
expenses to run Purchaser's business except for administering and collecting
portfolio. currency expserv Annual Servicing Expenses: Budgeted expenses for
administering and collecting portfolio.   Iavg Monthly Average Interest Rate: to
be determined monthly based on debt funding mix % past.due Past Due Receivables:
Receivables will be considered past due if and to the extent they are not paid
at the first day of the second fiscal month after due date currency portfolio
Portfolio: Amount of Receivables on Purchaser's balance sheet currency radmin
Administrative Cost: Rate of annual Administrative Expenses as a percentage of
annual Average Portfolio % rcr Credit Risk: Rate of credit losses experienced
adjusted by two Standard Deviations, and cost of late payment. % rdebt Cost of
Debt Funding: Effective cost of debt funding for an arm's length funding mix;
rdebt will be based on documentation of actual trades or bank quotes, as the
case may be, maintained by Treasury and will be calculated monthly. % requity
Cost of Equity: ROE weighted by the avg. equity ratio. The appropriate leverage
to apply to the portfolio will be determined dependent on level of credit risk
Purchaser is exposed to. % rserv Service Cost: Rate of costs to administrate and
collect the portfolio as determined by Purchaser based on budgeted expenses %
roe Return on Equity: Arm's length cost of equity as usually required by
factoring companies. % s Standard Deviation: Weighted standard deviations %
turns Turnover: Average annual turnover of the Portfolio calculated by dividing
the sum of annual purchases of receivables by the annual Average Portfolio
number