EXHIBIT 10.26


                           WAIVER DATED MAY 15, 2000,

                     BY C.M. MUTUAL LIFE INSURANCE COMPANY

               OF CERTAIN DEFAULTS UNDER EXACT TITLE OF AGREEMENT

                              DATED APRIL 6, 1994






Ag-Chem Equipment Co., Inc.
5720 Smetana Drive, Suite 100
Minnetonka, Minnesota 55342-9688

Attention: Chief Financial Officer

Ladies and Gentlemen:

         Reference is made to that certain Note Agreement, dated as of April 6,
1994 (as amended from time to time, the "NOTE AGREEMENT"), between Ag-Chem
Equipment Co., Inc., a Minnesota corporation (the "COMPANY"), and C.M. Life
Insurance Company ("MASS MUTUAL"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Note Agreement.

         Pursuant to the request of the Company and in accordance with the
provisions of Section 9.1 of the Note Agreement, the parties hereto agree as
follows:

         SECTION 1. Amendments to Note Agreement. From and after the date this
letter becomes effective in accordance with its terms, the Note Agreement is
amended as follows:

         1.1. Section 5.1 of the Note Agreement is amended to delete the term
"Indebtedness" presently appearing therein and to add the following defined
terms thereto in appropriate alphabetical order:

                  "BANKS" means the financial institutions from time to time
         constituting the "Lenders" under the Credit Agreement or the Short Term
         Credit Agreement.

                  "CAPITAL EXPENDITURES" means, for any period, the additions to
         property, plant and equipment and other capital expenditures of the
         Company and its Subsidiaries for such period, as the same are or should
         be set forth on the consolidated financial statements of the Company
         and its Subsidiaries in accordance with GAAP.

                  "CASH EQUIVALENTS" means as to any Person, (a) securities
         issued or directly and fully guaranteed or insured by the United States
         or any agency or instrumentality thereof (provided that the full faith
         and credit of the United States is pledged in support thereof) having
         maturities of not more than 12 months from the date of acquisition, (b)
         time deposits and certificates of deposit of any commercial bank with a
         long-term unsecured debt rating of at least A or its equivalent from
         Standard & Poor's Ratings Services, a

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         division of The McGraw-Hill Companies, Inc., or at least A-2 or its
         equivalent from Moody's Investors Service, Inc. with maturities of not
         more than six months from the date of acquisition by such person, (c)
         repurchase obligations with a term of not more than seven days for
         underlying securities of the types described in clause (a) above
         entered into with any bank meeting the qualifications specified in
         clause (b) above, (d) commercial paper issued by any person
         incorporated in the United States, which commercial paper is rated at
         least A-1 or the equivalent thereof by Standard & Poor's Ratings
         Services, a division of The McGraw-Hill Companies, Inc., or at least
         P-1 or the equivalent thereof by Moody's Investors Service, Inc. or at
         least F-1 or the equivalent thereof by Fitch Investor Services, Inc.
         and in each case maturing not more than 270 days after the date of
         issuance by such person, and (e) investments in money market funds
         substantially all the assets of which are comprised of securities of
         the types described in clauses (a) through (d) above.

                  "COLLATERAL AGENT" means Bank One, N.A., in its capacity as
         contractual representatives for the Banks, the holders of the Notes and
         the holders of the Company's 7.25% Series A Senior Notes due April 6,
         2005 under the Collateral Sharing Agreement, and its successors and
         assigns in such capacity.

                  "CONTINGENT LIABILITIES" of any Person means, as of any date,
         all obligations of such Person or of others for which such Person is
         contingently liable, as obligor, guarantor, surety or in any other
         capacity, or in respect of which obligations such Person assures a
         creditor against loss or agrees to take any action to prevent any such
         loss (other than endorsements of negotiable instruments for collection
         in the ordinary course of business), including all reimbursement
         obligations and all obligations of such Person to advance funds to, or
         to purchase assets, property or services from, any other Person in
         order to maintain the financial condition of such other Person.

                  "COLLATERAL SHARING AGREEMENT" mean that certain Collateral
         Sharing Agreement, dated as of May 15, 2000, by and among the
         Collateral Agent, Bank One, as contractual representative for the Banks
         under the Credit Agreement and the Short Term Credit Agreement, the
         Banks, the holders of the Notes and the holders of the Company's 7.25%
         Senior Notes, Series A, due April 6, 2005, as amended from time to time
         in accordance with the terms thereof.

                  "CREDIT AGREEMENT" shall mean the Third Amended and Restated
         Long Term Revolving Credit Agreement, dated as of June 4, 1999, by and
         among the Company, the Multicurrency Subsidiary Borrowers, certain of
         the Banks and Bank One N.A., as agent, as amended by Waiver and
         Amendment No. 1 thereto dated as of December 22, 1999 and Waiver and
         Amendment No. 2 thereto dated May 15, 2000.

                  "EBITDA" means, for any period, Net Income plus the sum of all
         amounts recorded and deducted in computing Net Income for such period
         in respect of Interest Expense, taxes, depreciation charges and


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<PAGE>


         expenses and amortization charges and expenses (whether paid or
         accrued, or a cash or non-cash expense), as determined in accordance
         with GAAP.

                  "GOVERNMENTAL AUTHORITY" means any federal, state, local,
         municipal or other governmental department, commission, board, bureau,
         agency or instrumentality, domestic or foreign, and any and all
         Governmental Regulations (including decrees, rules and orders) of any
         governmental bodies and offices having power to regulate or supervise
         the business activities of any of the company, a Subsidiary or any
         holder of a Note.

                  "GOVERNMENTAL REGULATIONS" means any and all laws, statues,
         ordinances, rules, regulations, treaties, judgments, writs,
         injunctions, decrees, orders, awards and standards, or any similar
         requirement, of the government of the United States or of any foreign
         government or any state, province, municipality or other political
         subdivision thereof or therein or any court, agency, instrumentality,
         regulatory authority or commission of any of the foregoing.

                  "GUARANTORS" means Ag-Chem Equipment Co., International Corp.,
         Lor*Al Products, Inc., Ag-Chem Equipment Canada, Ltd., Ag-Chem Europe,
         B.V., formerly known as Kurstjens Terra-Gator B.V., Ag-Chem Sales Co.,
         Inc., a Minnesota corporation, Ag-Chem Manufacturing, Inc., formerly
         known as Soil Teq, Inc., a Minnesota corporation, and any other person
         or entity that may guarantee the Notes from time to time.

                  "INDEBTEDNESS" of any Person means (a) all obligations of such
         Person for borrowed money, (b) all obligations of such Person as lessee
         under any Capitalized Lease, (c) all obligations which are secured by
         any Lien existing on any asset or property of such Person whether or
         not the obligation secured thereby shall have been assumed by such
         Person, (d) the unpaid purchase price for goods, property or services
         acquired by such Person, except for accounts payable for goods,
         property or services arising in the ordinary course of business that
         are not more than sixty (60) days past due, (e) all obligations of such
         Person to purchase goods, property or services where payment therefor
         is required regardless of whether delivery of such goods or property or
         the performance of such services is ever made or tendered (generally
         referred to as "take or pay contracts"), (f) all liabilities of such
         Person in respect of unfunded benefit liabilities (determined in
         accordance with Section 4001(a)(18) of ERISA) under any Plan of such
         person or of any ERISA Affiliate and any unfunded current liabilities
         with respect to any employee benefit pension plans maintained by such
         Person outside the United States, (g) all obligations of such Person in
         respect of any interest rate or currency swap, rate cap or other
         similar transaction (valued in any amount equal to the highest
         termination payment, if any, that would be payable by such Person upon
         termination for any reason on the date of determination), and (h) all
         Contingent Liabilities of such Person.

                  "INTEREST COVERAGE RATIO" means the ratio of (a) EBITDA of the
         Company and its consolidated Subsidiaries to (b) Interest Expense for
         the Company and its Subsidiaries,


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<PAGE>


         on a consolidated basis, to be calculated as of the end of each fiscal
         quarter of the Company for the four consecutive fiscal quarters then
         ending.

                  "INTEREST EXPENSE" means, for a Person for the applicable
         fiscal period, such Person's interest expense (including capitalized
         interest accrued during such period) for such period computed in
         accordance with GAAP including, without limitation, the portion of any
         obligation under a Capitalized Lease allocable to interest expense in
         accordance with GAAP.

                  "LOAN PARTIES" means the Company and the Guarantors.

                  "MULTICURRENCY SUBSIDIARY BORROWERS" means each of Ag-Chem
         Europe, B.V., a Netherlands private limited liability company, and
         Ag-Chem Equipment Canada, Ltd., a Minnesota corporation.

                  "NET INCOME" means, for any period, the net income of the
         Company and its consolidated Subsidiaries after taxes, determined in
         accordance with GAAP.

                  "NEW HOLLAND VENTURE" means the joint venture between the
         Company and New Holland North America, Inc.

                  "PERMITTED LIENS" means Liens permitted by Section 7.4.

                  "SHORT TERM CREDIT AGREEMENT" means the Short Term Revolving
         Credit Agreement, dated as of June 4, 1999, by and among the Company,
         certain of the Banks and Bank One, N.A., as agent for such Banks, as
         amended by Waiver and Amendment No. 1 thereto dated as of December 22,
         1999 and Waiver and Amendment No. 2 thereto dated as of May 15, 2000.

                  "TANGIBLE NET WORTH" means, as of any date, (a) the amount of
         any capital stock, paid in capital and similar equity accounts of the
         Company and its consolidated Subsidiaries plus (or minus in the case of
         a deficit) the capital surplus and retained earnings of the Company and
         its consolidated Subsidiaries, minus (b) the amount of any treasury
         stock reflected on such balance sheet, minus (c) any amount
         attributable to the write-up of assets (other than marketable
         securities) on or after September 30, 1998, minus (d) the net book
         value of all items of the following character which are included in the
         assets of the Company and its consolidated Subsidiaries as of such
         date: (i) goodwill, including the excess of cost over book value of any
         asset; (ii) organization or experimental expenses; (iii) unamortized
         debt discount and expense; (iv) patents, trademarks, trade names and
         copyrights; (v) franchises, licenses and permits; (vi) amounts due from
         Affiliates and (vii) all other assets which are deemed intangible
         assets under GAAP.


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<PAGE>


                  "TOTAL LIABILITIES" means, as of the date of determination,
         the total liabilities of the Company and its consolidated Subsidiaries
         that would properly be classified as a liability under GAAP.

                  "WORKING CAPITAL COVERAGE RATIO" means the ratio of (a) the
         sum of the face amount of the accounts receivable of the Company and
         its consolidated Subsidiaries minus the amount of accounts receivable
         classified as doubtful determined in accordance with GAAP plus the
         value of the inventory of the Company and its consolidated Subsidiaries
         valued at the lower of cost or market on a last-in first-out basis
         determined in accordance with GAAP to (b) the sum of the principal
         amount of the obligations of the Company to the Banks under the Credit
         Agreement and the Short Term Credit Agreement plus the outstanding
         principal indebtedness of the Company under that certain Note Agreement
         dated as of October 10, 1995 with respect to the Company's 7.25% Senior
         Notes, Series A, due April 6, 2005 plus the outstanding principal
         amount of the Notes.

         1.2. Section 7.1 of the Note Agreement is amended in its entirety to
read as follows:

                  "7.1 Financial Ratios.

                  (a) Tangible Net Worth. The Company will not permit or suffer
         Tangible Net Worth to be, at any time after June 4, 1999, less than the
         sum of (i) $57,500,000, plus (ii) the net amount of any proceeds from
         the sale of the Company's equity interests received by the Company
         after June 4, 1999, plus (iii) fifty percent (50%) of annual Net Income
         accumulated from September 30, 1998, beginning with the calculation for
         the year ending September 30, 1999; provided, however, that no
         deduction will be made for any fiscal year where net income is less
         than zero and any loss will not reduce any amount added for any other
         fiscal year.

                  (b) Total Liabilities to Tangible Net Worth. The Company will
         not permit or suffer the ratio of Total Liabilities to Tangible Net
         Worth to exceed: (1) 2.75 to 1.0 at the end of the fiscal quarter
         ending March 31, 2000 or (ii) 2.50 to 1.0 at the end of each fiscal
         quarter ending on or after June 30, 2000 and on or prior to March 31,
         2001 or (iii) 2.0 to 1.0 at the end of each fiscal quarter ending on or
         after June 30, 2001.

                  (c) Interest Coverage Ratio. The Company will not permit or
         suffer the Interest Coverage Ratio to be less than (i) 2.0 to 1.0 for
         the fiscal period ending March 31, 2000 or (ii) 1.50 to 1.0 for the
         fiscal periods ending June 30, 2000, September 30, 2000 and December
         31, 2000 or (iii) 2.0 to 1.0 for the fiscal period ending March 31,
         2001 or (iv) 2.25 to 1.0 for the fiscal period ending June 30, 2001 or
         (v) 2.5 to 1.0 for the fiscal periods ending September 30, 2001,
         December 31, 2001, March 31, 2002 and June 30, 2002 or (vi) 3.25 to 1.0
         for the fiscal periods ending September 30, 2002, December 31, 2002,
         March 31, 2003


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<PAGE>


         and June 30, 2003 or (vii) 3.5 to 1.0 for each fiscal period ending as
         of the end of each fiscal quarter ending on or after September 30,
         2003.

                  (d) Working Capital Coverage Ratio. The Company will not
         permit or suffer the Working Capital Coverage Ratio to be less than
         1.30 to 1.0 as of the end of any fiscal quarter."

         1.3. Section 7.2 of the Note Agreement is amended in its entirety to
read as follows:

                  "7.2 Indebtedness. The Company will not, and will not permit
         any Subsidiary to, create, incur, assume or in any manner become liable
         in respect of, or suffer to exist, any Indebtedness other than:

                           (i) Indebtedness evidenced by the Notes (and
                  guaranties thereof);

                           (ii) Indebtedness to Persons (including guaranties of
                  Indebtedness) other than Indebtedness evidenced by the Notes,
                  as described on Schedule 7.2, having the same material terms
                  as those existing on the date of this Agreement, and provided,
                  that (i) with respect to the Indebtedness outstanding under
                  the Company's 7.25% Senior Notes, Series A, due April 6, 2005,
                  any extension, renewal or replacement thereof (including by a
                  different person), not to exceed the original principal amount
                  of such Indebtedness and at the then prevailing market terms,
                  (ii) with respect to Indebtedness under the Credit Agreement
                  or the Short-Term Credit Agreement, any extension, renewal or
                  replacement thereof (including by a different person), not to
                  exceed the maximum amount available under the terms of the
                  Credit Agreement or the Short-Term Credit Agreement, as the
                  case may be, as in effect on May 15, 2000, and at the then
                  prevailing market rate, and (iii) with respect to any other
                  Indebtedness described on Schedule 7.2, any extension, renewal
                  or replacement thereof (but without increase in the principal
                  amount outstanding at the time of such extension, renewal or
                  replacement);

                           (iii) Indebtedness secured by Permitted Liens;
                  provided, however, that the proceeds of Indebtedness incurred
                  in connection with the grant of the Permitted Liens described
                  in Section 7.4(viii) shall be applied toward the satisfaction
                  of amounts owing under the Short Term Credit Agreement or the
                  Credit Agreement, or to make prepayments of the Notes under
                  Section 2.2(a);

                           (iv) Indebtedness of up to $1,000,000 from state or
                  local government authorities or sub-divisions thereof or local
                  development authorities, provided that so long as any Default
                  or Event of Default shall exist and be continuing, such
                  Indebtedness may not be increased above the amount existing at
                  the time of such Default or Event of Default;

                           (v) Subordinated Indebtedness which is acceptable to
                  the holders of at least a majority in aggregate principal
                  amount of outstanding Notes in their sole


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<PAGE>


                  discretion, including the terms of the subordination agreement
                  covering the Subordinated Indebtedness;

                           (vi) guaranties of Indebtedness which in the
                  aggregate do not exceed $1,000,000 at any time or other
                  Indebtedness not to exceed $500,000 at any time (to the extent
                  such guaranties or Indebtedness is not permitted under clause
                  (ii) above); provided that so long as any Default or Event of
                  Default shall exist and be continuing, such guaranties may not
                  be increased from the guaranties existing at the time of such
                  Default or Event of Default;

                           (vii) Indebtedness of one Loan Party or a subsidiary
                  thereof to another Loan Party or a subsidiary thereof; and

                           (viii) any interest rate or currency swap, rate, cap,
                  or similar transaction entered into with a Bank or any of its
                  Affiliates entered into in the ordinary course of business for
                  the purpose of protecting the Company from changes in interest
                  or currency rates or commodity prices and not for speculative
                  purposes."

         1.4 Section 7.3 of the Note Agreement is deleted.

         1.5 Section 7.4 of the Note Agreement is amended in its entirety to
read as follows:

                  "7.4. Liens. The Company will not, and will not permit any
         Subsidiary to, create, incur or suffer to exist any Lien on any of the
         assets, rights, revenues or property, real, personal or mixed, tangible
         or intangible, whether now owned or hereafter acquired, of the Company
         or any Subsidiary, other than:

                           (i) Liens for taxes not delinquent or for taxes being
                  contested in good faith by appropriate proceedings and as to
                  which adequate financial reserves have been established on its
                  books and records;

                           (ii) Liens (other than any Lien imposed by ERISA)
                  created and maintained in the ordinary course of business
                  which are not material in the aggregate, and which would not
                  constitute or result in a Material Adverse Effect, and which
                  constitute (A) pledges or deposits under worker's compensation
                  laws, unemployment insurance laws or similar legislation, (B)
                  good faith deposits in connection with bids, tenders,
                  contracts or leases to which a the Company or any Subsidiary
                  is a party for a purpose other than borrowing money or
                  obtaining credit, including rent security deposits, (C) Liens
                  imposed by law, such as those of carriers, warehousemen and
                  mechanics, if payment of the obligation secured thereby is not
                  yet due, (D) Liens securing taxes, assessments or other
                  governmental charges or levies not yet subject to penalties
                  for nonpayment, and (E) pledges or deposits to secure public
                  or statutory obligations of the Company or any Subsidiary, or
                  surety, customs or appeal bonds to which the Company


                                       7
<PAGE>


                  or any Subsidiary is a party;

                           (iii) Liens affecting real property which constitute
                  minor survey exceptions or defects or irregularities in title,
                  minor encumbrances, easements or reservations of, or rights of
                  others for, rights of way, sewers, electric lines, telegraph
                  and telephone lines and other similar purposes, or zoning or
                  other restrictions as to the use of such real property;
                  provided, however, that all of the foregoing, in the
                  aggregate, do not at any time materially detract from the
                  value of said properties or materially impair their use in the
                  operation of the businesses of the Company or any Subsidiary;

                           (iv) each Lien described in Schedule 7.4 which may be
                  suffered to exist upon the same terms as those existing on the
                  date hereof, and any extension, renewal or replacement thereof
                  (but without increase in the principal amount secured thereby
                  outstanding at the time of such extension, replacement, or
                  renewal and provided such Liens will not extend to cover any
                  additional property);

                           (v) Liens resulting from any action, suit,
                  proceeding, appeal or contest at law or equity brought in good
                  faith by or against the Company or a Multicurrency Subsidiary
                  Borrower before a Governmental Authority within the European
                  Union;

                           (vi) purchase money Liens upon or in property of a
                  Loan Party, provided, however, that no such Lien will extend
                  to or cover any other property of any Loan Party and the
                  amount of any such Lien will not exceed the purchase price of
                  the related collateral;

                           (vii) Liens pursuant to any Capitalized Lease under
                  which a Loan Party is the lessee;

                           (viii) Liens on the Company's real property located
                  in Minnetonka, Minnesota, including, without limitation,
                  fixtures located on such property, provided that no such lien
                  shall be incurred without the consent of the holders of the
                  Notes after the occurrence of an Event of Default; and

                           (ix) any Lien granted by the Company or any
                  Subsidiary in favor of the Collateral Agent securing the
                  "Obligations" as defined in the Collateral Sharing Agreement,
                  but only so long as the Collateral Sharing Agreement is in
                  full force and effect, the holders of all such "Obligations"
                  are parties thereto and any Indebtedness secured by any such
                  Lien is permitted under Section 7.2(ii)."

         1.6 Section 7.5 of the Note Agreement is amended in its entirety to
read as follows:


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<PAGE>


                  "7.5. Merger; Purchase of Assets; Acquisitions; Etc. Other
         than the New Holland Venture, the Company will not, and will not permit
         any Subsidiary to, purchase or otherwise acquire, whether in one or a
         series of transactions, all or a substantial portion of the business,
         assets, rights, revenues or property, real, personal or mixed, tangible
         or intangible, of any Person, or all or a substantial portion of the
         capital stock of or other ownership interest in any other Person or
         merge or consolidate or amalgamate with any other Person or take any
         other action having a similar effect, not enter into any joint venture
         or similar arrangement with any other Person, if any combination of the
         aforementioned, in the aggregate, exceeds $5,000,000 in any fiscal
         year; provided, that this Section 7.5 will not prohibit any merger or
         consolidation solely between or among (i) the Company and any
         Subsidiary, so long as the Company is the surviving person of such
         merger or consolidation or (ii) Ag-Chem Europe, B.V. and any of its
         Subsidiaries, so long as Ag-Chem Europe, B.V. is the surviving person
         of such merger or consolidation."

         1.7 Section 7.6 of the Note Agreement is amended in its entirety to
read as follows:

                  "7.6 Disposition of Assets; Etc. The Company will not, and
         will not permit any Subsidiary to, sell, lease, license, transfer,
         assign or otherwise dispose of any of its business, assets, rights,
         revenues or property, real, personal or mixed, tangible or intangible,
         whether in one or a series of transactions, other than (i) inventory
         sold in the ordinary course of business upon customary credit terms,
         which for purposes of this Section 7.6, shall include any sales of
         inventory by the Company to the New Holland Venture, and sales of
         obsolete or damaged material or equipment, (ii) the sale of all or part
         of Ag-Chem Equipment Co. International Co., International Corp, a
         Virgin Islands corporation, (iii) transfers from one Loan Party to
         another Loan Party, (iv) intellectual property owned and licensed by
         the Company in the ordinary course of business, provided that for
         purposes of this clause (iv) "ordinary course" shall be defined as the
         ordinary course of business for the Company in the particular
         geographic region in which such intellectual property is being
         licensed, (v) transfers of assets from any Loan Party to any subsidiary
         thereof, irrespective of whether such subsidiary is a Loan Party, so
         long as the aggregate dollar value of such transfers in any fiscal year
         does not exceed $5,000,000, (vi) other sales of assets (excluding
         assets sold in connection with the New Holland Venture) not to exceed
         $3,000,000 in the aggregate for all Loan Parties during any fiscal year
         of the Company; provided that so long as any Default or Event of
         Default shall exist and be continuing, no sales or transfers under
         clauses (ii), (iii) or (v) above may be made beyond those contracted
         for at the time of such Default or Event of Default; or (vii) accounts
         receivable and/or instruments owed to or in favor of a Loan Party that
         are sold, transferred, and/or assigned in an arms-length transaction
         for a fair market price by such Loan Party; provided, that no such
         sale, transfer or assignment shall occur without the consent of the
         holders of the Notes after the occurrence of an Event of Default;
         provided, further, that 100% of the proceeds resulting from such sale,
         transfer or assignment shall be applied toward the satisfaction of the
         Indebtedness outstanding under the Credit Agreement or the Short Term
         Credit Agreement or to make a prepayment of the Notes pursuant to
         Section 2.2(a)."


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<PAGE>


         1.8 New Sections 7.10, 7.11, 7.12 and 7.13 are added to the Note
Agreement, such Sections to read as follows:

                  "7.10 Investments. The Company will not, and will not permit
         any Subsidiary to, make, commit to make or permit to exist any loans,
         investments, advances or extensions of credit to any Person, firm or
         corporation, other than: (i) Cash Equivalents, (ii) loans not to exceed
         $500,000 at any time outstanding and travel advances extended to
         officers and employees of a Loan Party in the ordinary course of
         business, (iii) investments existing on June 4, 1999 in Subsidiaries
         that are not Loan Parties, (iv) investments by the Company or any
         Multicurrency Subsidiary Borrower in other Loan Parties, (v) loans from
         one Loan Party to another Loan Party, (vi) loans or extensions of
         credit granted in the ordinary course of business to purchasers or
         lessees of a product sold or leased by a Loan Party, which for purposes
         of this Section 7.10, shall include any loans or extensions of credit
         to the New Holland Venture as a purchaser of products sold by a Loan
         Party, so long as neither the Company nor any Subsidiary is in
         violation of the financial covenants in this Agreement, (vii)
         investments related to the New Holland Venture; provided that such
         investments do not exceed $500,000 in any calendar year; provided,
         further, that, for purposes of this clause (vii), "investments" shall
         include any transfer of any assets by the Company to the New Holland
         Venture, or (viii) other investments which in the aggregate do not
         exceed $3,000,000 in any fiscal year of the Company.

                  7.11 Capital Expenditures. The Company will not, and will not
         permit any Subsidiary to, make Capital Expenditures on an aggregate
         basis for the Company and all Subsidiaries during any fiscal year of
         the Company in excess of $20,000,000.

                  7.12 Dividends. The Company will not, and will not permit any
         Subsidiary to, declare or pay dividends or make other stockholder
         distributions or redemptions of its capital stock, or commit to make
         any distribution of cash or property to its shareholders at any time
         after June 4, 1999 other than dividends payable to the Company or a
         Wholly-Owned Subsidiary; provided, however, that so long as no Default
         or Event of Default has occurred and is continuing and no Default or
         Event of Default would occur upon payment of such amounts, (i) the
         Company may pay cash dividends or dividends paid solely in shares of
         the Company, and (ii) the Company may repurchase or redeem shares of
         its capital stock for an amount not to exceed $3,000,000 per fiscal
         year.

                  7.13 Most Favored Lender. The Company will not, and will not
         permit any Subsidiary to, agree to, with or for the benefit of the
         holder of any other Indebtedness of the Company or any Subsidiary, any
         financial or restrictive covenants or events of default which are more
         restrictive than, or in addition to, the financial or negative
         covenants or Events of Default contained in this Agreement, unless the
         Company has, or has caused such Subsidiary to, offer to enter into an
         agreement with the holders of the Notes, in form and substance
         reasonably satisfactory to the holders of the Notes, whereby such
         financial or negative covenants or events of default are added to this
         Agreement for the benefit of the Notes."


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<PAGE>


         1.9 Schedules 7.2 and 7.4 hereto are added as Schedules 7.2 and 7.4 to
the Note Agreement.

         SECTION 2. Representations and Warranties. The Company represents and
warrants to each of the undersigned that (a) this letter has been duly
authorized, executed and delivered by the Company, (b) each representation and
warranty set forth in Section 3 of the Note Agreement is true and correct as of
the date of the execution and delivery of this letter by the Company with the
same effect as if made on such date (except to the extent such representations
and warranties expressly refer to an earlier date, in which case they were true
and correct as of such earlier date) and (c) after giving effect to the
amendments to the Note Agreement in Section 1 hereof except for the Specified
Defaults (as defined below), no Event of Default or Default exists.

         SECTION 3. Effectiveness. The amendments described in Section 1 above
and the waivers set forth in Section 5 hereof shall become effective on the date
when (the "EFFECTIVE DATE") Mass Mutual has received:

                  (a) all costs and expenses of Mass Mutual (including
         reasonable fees and disbursements of special counsel to Mass Mutual) in
         connection with this letter;

                  (b) the following documents, each in a form and substance
         satisfactory to Mass Mutual:

                           (i) counterparts of this letter agreement executed by
                  the Company and consented to by each Guarantor;

                           (ii) a Security Agreement signed by the Company and
                  each Guarantor, together with evidence, satisfactory to Mass
                  Mutual, that the Company and each Guarantor have delivered to
                  the Collateral Agent all financing statements and other
                  documents necessary to perfect the Collateral Agent's Lien on
                  all collateral granted under the Security Agreement;

                           (iii) the Collateral Sharing Agreement, signed by the
                  parties thereto and consented to by the Company and the
                  Guarantors;

                           (iv) an amendment and waiver to the Credit Agreement
                  and the Short Term Credit Agreement, executed by the Company,
                  the Multicurrency Subsidiary Borrowers, Bank One, NA, as agent
                  for the Banks, and the Banks; and

                           (v) an amendment and waiver to the Note Agreement,
                  dated as of October 10, 1995, duly executed by the Company and
                  the holders of the Company's7.25% Senior Notes, Series A; and


                                       11
<PAGE>


                           (vi) an agreement from Ag-Chem Sales Co., Inc. to be
                  bound by the terms of the Subsidiary Guaranty.

                  (c) All corporate and other proceedings in connection with the
         transactions contemplated by this letter agreement shall be
         satisfactory to Mass Mutual and its counsel, and Mass Mutual shall have
         received all such counterpart originals or certified or other copies of
         such documents as it may reasonably request.

         SECTION 4. Reference to and Effect on Note Agreements. Upon the
effectiveness of this letter, each reference to the Note Agreement in any other
document, instrument or agreement shall mean and be a reference to the Note
Agreement as modified by this letter. Except as specifically set forth in
Section 1 or 2 hereof, the Note Agreement shall remain in full force and effect
and is hereby ratified and confirmed in all respects.

         SECTION 5. Waiver. Effective on the Effective Date, Mass Mutual hereby
waives any Default or Event of Default under Section 8.1(d) of the Note
Agreement resulting solely from a failure to comply with Section 7.3 of the Note
Agreement for the periods ended March 31, 2000 (the "Specified Default"). Except
as specifically set forth in the preceding sentence, nothing contained in the
letter shall be construed as a waiver of or consent to any other violation of
the Note Agreement or any other Default or Event of Default under the Note
Agreement.

         SECTION 6. Governing Law. THIS LETTER SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS OF SUCH STATE WHICH WOULD OTHERWISE CAUSE THIS
LETTER TO BE CONSTRUED OR ENFORCED OTHER THAN IN ACCORDANCE WITH THE LAWS OF THE
STATE OF ILLINOIS.

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]


                                       12
<PAGE>


         SECTION 7. Counterparts; Section Titles. This letter may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same instrument. The section titles contained in this letter are and shall be
without substance, meaning or content of any kind whatsoever and are not a part
of the agreement between the parties hereto.

                                       Very truly yours,

                                       C.M. LIFE INSURANCE COMPANY

                                              By: David Babson and Company
                                              Incorporated, as Investment Sub
                                              Adviser
                                       By:    /s/ Richard E. Spencer II
                                              ----------------------------------
                                       Title: Managing Director

AGREED AND ACCEPTED:

AG-CHEM EQUIPMENT CO., INC.


By:    /s/ John Retherford
       --------------------------------
Title: CFO

Each of the undersigned Guarantors hereby consents to the foregoing amendments
and waivers and confirms that, notwithstanding the foregoing amendments and
waivers, all of its obligations under its Subsidiary Guaranty, dated as of April
6, 1994, remain in full force and effect with respect to the Note Agreement as
amended and waived as provided above.


LOR*AL PRODUCTS, INC.


By:    /s/ John Retherford
       --------------------------------
Title: CFO


AG-CHEM EQUIPMENT CANADA, LTD.


By:    /s/ John Retherford
       --------------------------------
Title: CFO


                                       13
<PAGE>


AG-CHEM EQUIPMENT CO.,
         INTERNATIONAL CORP.


By:    /s/ John Retherford
       --------------------------------
Title: CFO


AG-CHEM MANUFACTURING, INC.


By:    /s/ John Retherford
       --------------------------------
Title: CFO


AG-CHEM SALES CO., INC.


By:    /s/ John Retherford
       --------------------------------
Title: CFO


AG-CHEM EUROPE, B.V.


By:    /s/ John Retherford
       --------------------------------
Title: CFO


                                       14
<PAGE>


                                  Schedule 7.2

                              Existing Indebtedness


                                       15
<PAGE>


                                  Schedule 7.4

                                 Existing Liens


                                       16