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                  ALLSTATE LIFE INSURANCE COMPANY

                        ALLSTATE PLAZA WEST G5C

                            3075 SANDERS ROAD

                        NORTHBROOK, ILLLNOIS 60062

September ____, 2000

Ag-Chem Equipment Co., Inc.
5720 Smetana Drive
Minnetonka, MN 55343-9688

         Re:   Allstate Loan No. 121873
               Brenwood I, II, III & IV
               5720, 5700, 5640, 5620 Smetana Drive (the "Property")
               Minnetonka, MN 55343-9688

Gentlemen:

         Reference is made to our Commitment dated July 20, 2000 (the
"Commitment") with respect to a $9,000,000.00 Loan (the "Loan") to be secured by
a first Mortgage, Assignment of Leases, Rents and Contracts, Security Agreement
and Fixture Filing (the "Mortgage") encumbering the Property. Any capitalized
terms not otherwise defined in this letter agreement (the "Letter Agreement")
shall have the same meaning as contained in the Mortgage.

         In consideration of your execution and delivery of the documents
evidencing, securing or otherwise pertaining to the Loan (the "Allstate Loan
Documents"), you (the "Borrower") and we ("Allstate") hereby agree as follows:

         1. Related Agreement. This Letter Agreement shall constitute a Related
Agreement.

         2. Impounds. With regard to the provisions contained in Section 1.06 of
the Mortgage requiring Borrower to deposit 1/12 of the annual amounts of real
estate taxes, regular and special assessments and insurance premiums, Allstate
hereby agrees to defer collection of such monthly deposits for so long as (a)
Borrower is the sole fee simple owner of the Property; (b) no Event of Default
exists under the Allstate Loan Documents and no condition or event exists which
with notice, the passage of time, or both, would constitute an Event of Default;
and (c) at Allstate's election, Borrower either pays for a tax reporting service
or Borrower promptly and consistently furnishes evidence that taxes and
insurance premiums are being currently paid.

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         3. Earthquake Insurance. With regard to the provisions contained in
Section 1.02 of the Mortgage requiring Borrower obtain earthquake insurance
coverage on the Property, Allstate hereby agrees to waive such requirement until
such time as such coverage is available at commercially reasonable rates and in
Allstate's reasonable opinion such coverage is generally required by other
institutional lenders.

         4. Right to Change Ownership Interests in Borrower. (a) Notwithstanding
the 12 provisions contained in Section 1.08 of the Mortgage, Borrower shall have
a one time right, provided there is no default or an event which, with notice or
the passage of time, or both, could result in a default by Borrower under the
Allstate Loan Documents, to assign, sell or transfer all of the Property (the
"Permitted Transfer") to a party with experience, satisfactory to Allstate, in
managing property similar to the Property and whose financial condition is
satisfactory to Allstate ("Permitted Transferee"). The Permitted Transfer shall
be further conditioned upon: (i) the payment by Borrower to Allstate of a
transfer fee equal to 1% of the outstanding principal balance of the Note; (ii)
the reimbursement of all of Allstate's expenses, including legal fees, incurred
in connection with the Permitted Transfer; (iii) the Permitted Transferee and
such general partners or principals of Permitted Transferee as Allstate may
request, assuming, in form and substance satisfactory to Allstate, all
obligations of Borrower under the Allstate Loan Documents, including, without
limitation, the Environmental Indemnity Agreement and the Recourse Indemnity
Agreement, with the same degree of recourse liability as Borrower and subject to
the same exculpatory provisions; (iv) Allstate's receipt of a title policy
complying with the requirements of the Commitment, updated to the date of the
Permitted Transfer, evidencing that such Permitted Transfer will not adversely
affect Allstate's first and prior lien on the Property or any other rights or
interests granted to Allstate under the Allstate Loan Documents; (v) Allstate's
receipt of opinions of counsel acceptable to Allstate that all previous opinions
pertaining to Borrower are true with respect to the Permitted Transferee and the
Permitted Transferee has duly assumed the Allstate Loan Documents, and same are
valid and enforceable against Permitted Transferee and the Property; and that
Borrower has the requisite power and authority to properly transfer the
Property; (vi) the Property having maintained a Debt Coverage Ratio of not less
than 175% for the 12-month period ending 30 days before the date of the
Permitted Transfer and the Property having a projected Debt Coverage Ratio for
the next 12 months based on the most recently approved and certified financial
statements and annual rent roll of not less than 175%; (vii) the Pernuitted
Transferee paying to Borrower at least a 50% cash down payment on the date of
the Permitted Transfer; (viii) Allstate's receipt and approval of the purchase
and sale contract and copies of the proposed transfer documentation; (ix)
Allstate's receipt and approval of the Permitted Transferee's resume and
financial statements; and (x) Allstate's receipt and approval of an updated MAI
appraisal by an appraiser satisfactory to Allstate (prepared at Borrower's
expense) specifically confirming a loan to value ratio of no more than 50%.

         Net Operating Income shall be certified to be true and correct by the
managing general partner, manager, or chief financial officer of Borrower.

         (b) Notwithstanding the provisions contained in Section 1.08 of the
Mortgage, Borrower shall have a one-time right, provided there is no default or
an event which, with

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notice or the passage of time, or both, could result in a default by Borrower
under the Allstate Loan Documents, to assign, sell or transfer all of the
Property (the "Permitted Affiliated Transfer") to a special purpose entity
controlled by Alvin E. McQuinn and at least 51% owned by Alvin E. McQuinn and/or
the immediate family member of Alvin E. McQuinn including lineal descendants and
officers or employees of the Borrower and said entity shall be organized for the
purpose of owning and operating the Property ("Permitted Affiliated
Transferee"). The Permitted Affiliated Transfer shall be further conditioned
upon: (i) the payment by Borrower to Allstate of a $1,500 transfer fee; (ii) the
reimbursement of all of Allstate's expenses, including legal fees, incurred in
connection with the Permitted Affiliated Transfer; (iii) the Permitted
Affiliated Transferee and its general partners or managing members assuming, in
form and substance satisfactory to Allstate, all obligations of Borrower under
the Allstate Loan Documents, including, without limitation, the Environmental
Indemnity Agreement and Recourse Indemnity Agreement, with the same degree of
recourse liability as Borrower and subject to the same exculpatory provisions;
(iv) Allstate's receipt of a title policy complying with requirements of the
Commitment, updated to the date of the Permitted Affiliated Transfer, evidencing
that such Permitted Affiliated Transfer will not adversely affect Allstate's
first and prior lien on the Property or any other rights or interests granted to
Allstate under the Allstate Loan Documents; and (v) Allstate's receipt of
opinions of counsel acceptable to Allstate that all previous opinions pertaining
to Borrower are true with respect to the Permitted Affiliated Transferee and the
Permitted Affiliated Transferee has duly assumed the Allstate Loan Documents,
and same are valid and enforceable against Permitted Affiliated Transferee and
the Property and that Borrower has the requisite power and authority to properly
transfer the Property.

         5. Rights Personal to Borrower. The rights granted to Borrower in this
Letter Agreement shall be personal to Borrower and shall not inure to the
benefit of any subsequent owner of the Property. In the event Allstate transfers
all or any part of the Loan or any interest in the Allstate Loan Documents to
any other person or entity, Allstate agrees to notify such transferee(s) of the
existence of this Letter Agreement and the fact that it is binding upon
Allstate's successors and assigns by delivering such transferee(s) a true,
correct and complete copy of this Letter Agreement concurrently with such
transfer accompanied by a letter of transmittal from Allstate advising such
transferee(s) of the binding nature of the provisions of this Letter Agreement.
Allstate will send a copy of its letter of transmittal and the enclosure to
Borrower, and Borrower's name will be shown on the face of the original letter
of transmittal as an addressee thereof.

                                                 Very truly yours,

                                                 ALLSTATE LIFE INSURANCE COMPANY

                                                 By:
                                                      --------------------------

                                                 By:
                                                      --------------------------
                                                 Its  Authorized Signatories

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Accepted and agreed:

AG-CHEM EQUIPMENT CO., INC.

By:  /s/ John C. Retherford
     -------------------------------
     John C. Retherford
Its: Senior Vice President and Chief Financial Officer

Date: September ___, 2000

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