EXHIBIT 10.27



                          WAIVER DATED MAY 15, 2000, BY

                  THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

               OF CERTAIN DEFAULTS UNDER EXACT TITLE OF AGREEMENT

                             DATED OCTOBER 10, 1995







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 October
10, 1995 (as amended from time to time, the "NOTE AGREEMENT"), between Ag-Chem
Equipment Co., Inc., a Minnesota corporation (the "COMPANY"), and The Prudential
Insurance Company of America ("PRUDENTIAL"). 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

<PAGE>


         debt rating of at least A or its equivalent from Standard & Poor's
         Ratings Services, a 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 6.83% Series A Senior Notes due April 6,
         2001 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 6.83%
         Senior Notes, Series A, due April 6, 2001, 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
         expenses and amortization charges and


                                       2
<PAGE>


         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,


                                       3
<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.


                                       4
<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 April 6, 1994 with respect to the Company's 6.83% Senior
         Notes, Series A, due April 6, 2001 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


                                       5
<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 6.83% Senior Notes, Series A, due April 6, 2001,
                  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


                                       6
<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 or any
                  Subsidiary is a party;


                                       7
<PAGE>


                           (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: "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


                                       8
<PAGE>


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)."

         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:


                                       9
<PAGE>


                  "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."

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


                                       10
<PAGE>


         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") Prudential has received:

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

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

                           (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
                  Prudential, 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 April 6, 1994, duly executed by the Company and
                  the holders of the Company's 6.83% Senior Notes, Series A, due
                  April 6, 2001; and

                           (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 Prudential and its counsel,


                                       11
<PAGE>


         and Prudential 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, Prudential 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,

                                     THE PRUDENTIAL INSURANCE COMPANY OF AMERICA


                                     By:   /s/ William S. Engelking
                                           -------------------------------------
                                           Vice President

AGREED AND ACCEPTED:

AG-CHEM EQUIPMENT CO., INC.


By:    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
October 10, 1995, 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


                                       13
<PAGE>


AG-CHEM EQUIPMENT CANADA, LTD.


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


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
                             PERMITTED INDEBTEDNESS


                                                                  Total Facility
                                                                  --------------

1.   Jackson County Industrial Revenue Bonds dated November 1, 1997   $6,065,000

2.   City of Jackson, Minnesota                                           50,000

3.   Southwest Minnesota Fund Loan, December 15, 1989                    100,000

4.   Jackson County Note 1989 in connection with IRB                     250,000

5.   Southwest Minnesota Initiative Fund                                 100,000

6.   City of Jackson                                                      50,000

7.   County of Jackson                                                    40,000

8.   Note payable to Cenex                                               480,000

9.   Note payable to Funk Manufacturing                                  500,000

10.  Rabo Bank Credit Facility for Ag-Chem Europe                      1,400,000

11.  Rabo Bank Guarantee in favor of G.J.J. Kurstjen                   1,100,000

12.  6.83% Senior Note, Series A, due April 6, 2001                   15,000,000

13.  7.25% Senior Note, due April 6, 2005                             15,000,000

14.  Long Term Credit Agreement                                       45,000,000

15.  Short Term Credit Agreement                                      45,000,000


All amounts are in U.S. Dollars except for #10, which is stated in Dutch
Guilders.


                                       1
<PAGE>


                                  SCHEDULE 7.4
                                 PERMITTED LIENS

1.   Debtor:        Ag-Chem Equipment Co., Inc.

     Secured Party: Jackson County Housing and Redevelopment Authority Mortgage,
                    Security Agreement and Fixture Financing Statement as of
                    November 1, 1997

     Collateral:    This mortgage covers the following:

         a.       all the tracts or parcels of land (hereinafter called the
                  "Land"), located in Jackson County, Minnesota and described as
                  follows:

Tract 1
-------

                              That part of the Northeast Quarter of the
                              Southeast Quarter (NE 1/4 of SE 1/4) of Section
                              Thirteen (13), Township One Hundred Two (102)
                              North, Range Thirty-five (35), West of the Fifth
                              Principal Meridian, Jackson County, Minnesota,
                              described as follows: Commencing at the Northeast
                              corner of the Southeast Quarter (SE 1/4) of said
                              Section 13; thence South 00(degree)02'20" West
                              (assumed bearing), along the East line of said
                              Southeast Quarter (SE 1/4), a distance of 183.80
                              feet, to the point of beginning of the tract to be
                              described; thence North 89(degree)49'00" West
                              along a line parallel with the North line of said
                              Southeast Quarter (SE 1/4), a distance of 1059.90
                              feet; thence South 00(degree)02'20" West along a
                              line parallel with the East line of said Southeast
                              Quarter (SE 1/4), a distance of 821.96 feet;
                              thence South 89(degree)49'00" East, along a line
                              parallel with the North line of said Southeast
                              Quarter (SE 1/4) a distance of 1059.90 feet, to
                              the East line of said Southeast Quarter (SE 1/4);
                              thence North 00(degree)02'20" East, along the East
                              line of said Southeast Quarter (SE 1/4), a
                              distance of 821.96 feet, to the point of
                              beginning.

EXCEPT that portion described as follows:

Commencing at the Northeast corner of the Southeast Quarter (SE 1/4) of said
Section 13; thence South 00 Degrees 02 Minutes 20 Seconds West (assuming
bearing), along the East line of said Southeast Quarter (SE 1/4), a distance of
1005.76 feet; thence North 89 Degrees 49 Minutes 00 Seconds West, along a line
parallel with the North line of said Southeast Quarter (SE 1/4), a distance of
670 feet, to the point of beginning of the tract to be described; thence North
00 Degrees 02 Minutes 20 Seconds West, along a line parallel with the East line
of said Southeast


                                       2
<PAGE>


Quarter (SE 1/4), a distance of 30.00 feet; thence North 89 Degrees 49 Minutes
00 Seconds West, long a line parallel with the North line of said Southeast
Quarter (SE 1/4), a distance of 180.00 feet; then South 00 Degrees 02 Minutes 20
Seconds West, along a line parallel with the East line of said Southeast Quarter
(SE 1/4), a distance of 30.00 feet; thence South 89 Degrees 49 Minutes 00
Seconds East, along a line parallel with the North line of said Southeast
Quarter (SE 1/4), a distance of 180.00 feet, to the point of beginning.

Tract 2
-------

                              That part of the Northeast Quarter of the
                              Southeast Quarter of Section 13, Township 102
                              North, Range 35 West of the Fifth Principal
                              Meridian in Jackson County, Minnesota, described
                              as follows: Commencing at the Northeast corner of
                              the Southeast Quarter of said Section 13; thence
                              South 00 degrees 02 minutes 20 seconds West
                              (assumed bearing), along the East line of said
                              Southeast Quarter, a distance of 183.80 feet;
                              thence North 89 degrees 49 minutes 00 seconds
                              West, along a line parallel with the North line of
                              said Southeast Quarter, a distance of 1059.90
                              feet, to the point of beginning of the tract to be
                              described; thence North 89 degrees 49 minutes 00
                              seconds West, along a line parallel with the North
                              line of said Southeast Quarter, a distance of
                              148.55 feet; thence South 00 degrees 02 minutes 20
                              seconds West, along a line parallel with the East
                              line of said Southeast Quarter, a distance of
                              821.96 feet; thence South 89 degrees 49 minutes 00
                              seconds East, along a line parallel with the North
                              line of said Southeast Quarter a distance of
                              148.67 feet; thence North 00 degrees 02 minutes 20
                              seconds East, along a line parallel with the East
                              line of said Southeast Quarter a distance of
                              821.96 feet, to the point of beginning.

         b.       all of the buildings, structures, and other improvements now
                  standing or at any time hereafter constructed or placed upon
                  the Land;

         c.       all lighting, heating, ventilating, air-conditioning,
                  sprinkling and plumbing fixtures, and all of the following
                  described equipment but only to the extent that such equipment
                  constitutes a fixture: water and power systems, boilers,
                  furnaces, oil burners, elevators and motors, dynamos,
                  transformers, pollution control equipment, and all other
                  fixtures of every description located in or on, or used, or
                  intended to be used in connection with the Land or any
                  building now or hereafter located thereon and owned by the
                  Mortgagor. The following described types or items of equipment
                  do not constitute fixtures:
                                    Jib Cranes
                                    Compressors


                                       3
<PAGE>


                                    Overhead Cranes
                                    Paint System
                                    Telephone and Computer Hardware
                                    Water Softeners
                                    L.P. Gas System

         d.       the reversion or reversions, remainder or remainders, in and
                  to the Land and each and every part thereof, together with the
                  entire interest of the Mortgagor in and to all and singular
                  the tenements, hereditaments, easements, rights, privileges
                  and appurtenances to said real estate belonging or in any wise
                  appertaining thereto;

         e.       all rights, title, and interest of the Mortgagor in and to any
                  streets, ways or alleys adjoining the Land or any part
                  thereof, and all the estate, right, title, interest, claim or
                  demand whatsoever of the Mortgagor, either in law or in
                  equity, in possession or expectancy, of, in and to said real
                  estate;

         f.       all proceeds of any taking of or damage to, or any sale in
                  lieu of a taking of, any portion of the foregoing under or
                  pursuant to the power of condemnation or eminent domain; and

         g.       all after-acquired interests of the Mortgagor in and to each
                  of the items referred to in each of the above paragraphs, and
                  all proceeds and products thereof.

---------------------
2.       Debtor:              Ag-Chem Equipment Co., Inc.

         Type of Filing:      Original UCC-1 filing

         Filing Jurisdiction: Jackson County, Minnesota

         Secured Party:       Southwest MN Initiative Fund
                              163 Ninth Avenue
                              Granite Falls, MN 56241

         Date of Filing:      January 4, 1990

         Document Number:     264525

         Collateral:          1979 AMADA Turret Punch, Model #VELA II 305050,
                              33 ton capacity, Serial #VII 551090


                                       4
<PAGE>


         Continuation:        Date of Filing: December 7, 1994

         Document No.:        280436

--------------------------

3.       Debtor:              Ag-Chem Equipment Co., Inc.

         Type of Filing:      Original UCC-1 filing

         Filing Jurisdiction: Minnesota Secretary of State

         Orig. Secured Party: ITT Commercial Finance Corp.
                              1400 North Central Life Tower
                              St. Paul, MN 55101

         Date of Filing:      April 4, 1990

         Document Number:     1318479

         Indebtedness:        No debt; finance lease only.

         Collateral:          Equipment more specifically described on Schedule
                              1 attached hereto. This transaction represented by
                              this Financing Statement is a true lease. This UCC
                              is being filed for notification purposes only.

                              Equipment on Schedule 1:

                              (6) Paint booths; (2) Conveyors; (1) Flash-off
                              Oven; (3) Air Make Up Units; (2) Air Compressors;
                              (2) Air Dryers; (2) Bridge Cranes; (1) LPG System;
                              JIB Cranes; Paint Pumps; Paint Pots; Graco Pump;
                              Paint Pump System; Paint System; Paint System
                              Equipment; (1) Dust Collector; (1) Blower; Blast
                              Room Reclaim System; Air Inlet Assemblies; Shot
                              Blast Systems; Duct Work; Denustra Return Air
                              Safety Filter Panel; Fan Discharger Silencer;
                              Summer Exhaust Stack; (1) Power Shear; all
                              equipment more fully described on the referenced
                              Schedule 1.

         Amendment:           Date of Filing:  November 28, 1994

                              Document No.:    1719472

                              Change Secured Party Address to:

                                                     10975 Benson Dr., Suite 220
                                                     Bldg. 12
                                                     Overland Park, KS 66210


                                       5
<PAGE>


         Continuation:        Date of Filing: November 28, 1994

                              Document No.:   1719473

         Assignment:          Date of Filing: April 24, 1995
                              Document No.:   1755365

                              Assignee:       General Electric Capital
                                                Corporation
                                              44 Old Ridgebury Road
                                              Danbury, CT 06810

--------------------------

4.       Debtor:              Ag-Chem Equipment Co., Inc.

         Type of Filing:      Original UCC-1 filing

         Filing Jurisdiction: Jackson County, Minnesota

         Orig. Secured Party: ITT Commercial Finance Corp
                              1400 North Central Life Tower
                              St. Paul, MN 55101

         Date of Filing:      April 9, 1990

         Document Number:     265334

         Collateral:          The following equipment:

                              (6) Paint booths; (2) Conveyors; (1) Flash-off
                              Oven; (1) Air Make Up Unit; (2) Air Compressors;
                              (2) Air Dryers; (1) Bridge Crane; (1) LPG System;
                              JIB Cranes; Paint Pumps; Paint Pots; Graco Pump;
                              Paint Pump System; Paint System; Paint System
                              Equipment; (1) Dust Collector; (1) Blower; Blast
                              Room Reclaim System; Air Inlet Assemblies; Shot
                              Blast Systems; Duct Work; Denustra Return Air
                              Safety Filter Panel; Fan Discharger Silencer;
                              Summer Exhaust Stack; (1) Power Shear; all
                              equipment more fully described on the referenced
                              Schedule 1.

                              The equipment is located at 202 Industrial Park,
                              Jackson, MN 56143-9510, and legally described as
                              follows:

Tract 1
-------


                                       6
<PAGE>

                              That part of the Northeast Quarter of the
                              Southeast Quarter (NE 1/4 of SE 1/4) of Section
                              Thirteen (13), Township One Hundred Two (102)
                              North, Range Thirty-five (35), West of the Fifth
                              Principal Meridian, Jackson County, Minnesota,
                              described as follows: Commencing at the Northeast
                              corner of the Southeast Quarter (SE 1/4) of said
                              Section 13; thence South 00(degree)02'20" West
                              (assumed bearing), along the East line of said
                              Southeast Quarter (SE 1/4), a distance of 183.80
                              feet, to the point of beginning of the tract to be
                              described; thence North 89(degree)49'00" West
                              along a line parallel with the North line of said
                              Southeast Quarter (SE 1/4), a distance of 1059.90
                              feet; thence South 00(degree)02'20" West along a
                              line parallel with the East line of said Southeast
                              Quarter (SE 1/4), a distance of 821.96 feet;
                              thence South 89(degree)49'00" East, along a line
                              parallel with the North line of said Southeast
                              Quarter (SE 1/4) a distance of 1059.90 feet, to
                              the East line of said Southeast Quarter (SE 1/4);
                              thence North 00(degree)02'20" East, along the East
                              line of said Southeast Quarter (SE 1/4), a
                              distance of 821.96 feet, to the point of
                              beginning.

Tract 2
-------

                              That part of the Northeast Quarter of the
                              Southeast Quarter of Section 13, Township 102
                              North, Range 35 West of the Fifth Principal
                              Meridian in Jackson County, Minnesota, described
                              as follows: Commencing at the Northeast corner of
                              the Southeast Quarter of said Section 13; thence
                              South 00 degrees 02 minutes 20 seconds West
                              (assumed bearing), along the East line of said
                              Southeast Quarter, a distance of 183.80 feet;
                              thence North 89 degrees 49 minutes 00 seconds
                              West, along a line parallel with the North line of
                              said Southeast Quarter, a distance of 1059.90
                              feet, to the point of beginning of the tract to be
                              described; thence North 89 degrees 49 minutes 00
                              seconds West, along a line parallel with the North
                              line of said Southeast Quarter, a distance of
                              148.55 feet; thence South 00 degrees 02 minutes 20
                              seconds West, along a line parallel with the East
                              line of said Southeast Quarter, a distance of
                              821.96 feet; thence South 89 degrees 49 minutes 00
                              seconds East, along a line parallel with the North
                              line of said Southeast Quarter a distance of
                              148.67 feet; thence North 00 degrees 02 minutes 20
                              seconds East, along a line parallel with the East
                              line of said Southeast Quarter a distance of
                              821.96 feet, to the point of beginning.


                                       7
<PAGE>


         Amendment:           Date of Filing: November 28, 1994

                              Document No.:   280294

                              Change Secured Party Address to:

                                                   10975 Benson Drive, Suite 220
                                                   Bldg. 12
                                                   Overland Park, KS 66210

         Continuation:        Date of Filing: November 28, 1994

                              Document No.:   280295

         Total Assignment:    Date of Filing: April 24, 1995

                              Document No.:   281415

                              Assignee:       General Electric Capital Corp.
                                              44 Old Ridgebury Road
                                              Danbury, CT 06810

--------------------------

5.       Debtor:              Ag-Chem Equipment Co., Inc.

         Type of Filing:      Original UCC-1 filing

         Filing Jurisdiction: Minnesota Secretary of State

         Orig. Secured Party: ITT Commercial Finance Corp.
                              12400 Portland Ave. So., Suite 125
                              Burnsville, MN 55337

         Date of Filing:      August 6, 1990

         Document Number:     1349176

         Indebtedness:        No debt; finance lease only.

         Collateral:          Equipment more specifically described on Schedule
                              A attached hereto. This transaction represented by
                              this Financing Statement is a true lease. This UCC
                              is being filed for notification purposes only.

                              Equipment on Schedule A:


                                       8
<PAGE>


                              One (1) Model 713012 Accurpress 130 ton X 12'
                              hydraulic press brake equipped with all standard
                              equipment wired 230 - 3 phase (less backgauge) 3"
                              x 3" dierail.

                              One (1) Model 528 Scrubber.

                              Material for Torit Dust collection system
                              including but not limited to duct work and pick-up
                              hoods.

         Continuation:        Date of Filing:  March 21, 1995

         Document No.:        1746451

         Assignment:          Date of Filing:  May 4, 1995

         Document No.:        1758696

         Assignee:            General Electric Capital Corp.
                              44 Old Ridgebury Road
                              Danbury, CT 06810

--------------------------

6.       Debtor:              Ag-Chem Equipment Co., Inc.

         Type of Filing:      Original UCC-1 filing

         Filing Jurisdiction: Jackson County, Minnesota

         Orig. Secured Party: ITT Commercial Finance Corp.
                              12400 Portland Ave. So., Suite 125
                              Burnsville, MN 55337

         Date of Filing:      August 10, 1990

         Document Number:     267406

         Collateral:          The following equipment:

                              One (1) Model 713012 Accurpress 130 ton X 12'
                              hydraulic press brake equipped with all standard
                              equipment wired 230 - 3 phase (less backgauge) 3"
                              x 3" dierail.

                              One (1) Model 528 Scrubber.


                                       9
<PAGE>


                              Material for Torit Dust collection system
                              including but not limited to duct work and pick-up
                              hoods.

                              The equipment is located at 202 Industrial Park,
                              Jackson, MN 56143-9510, and legally described as
                              follows:

Tract 1
-------

                              That part of the Northeast Quarter of the
                              Southeast Quarter (SE 1/4 of SE 1/4) of Section
                              Thirteen (13), Township One Hundred Two (102)
                              North, Range Thirty-five (35), West of the Fifth
                              Principal Meridian, Jackson County, Minnesota,
                              described as follows: Commencing at the Northeast
                              corner of the Southeast Quarter (SE 1/4) of said
                              Section 13; thence South 00(degree)02'20" West
                              (assumed bearing), along the East line of said
                              Southeast Quarter (SE 1/4), a distance of 183.80
                              feet, to the point of beginning of the tract to be
                              described; thence North 89(degree)49'00" West
                              along a line parallel with the North line of said
                              Southeast Quarter (SE 1/4), a distance of 1059.90
                              feet; thence South 00(degree)02'20" West along a
                              line parallel with the East line of said Southeast
                              Quarter (SE 1/4), a distance of 821.96 feet;
                              thence South 89(degree)49'00" East, along a line
                              parallel with the North line of said Southeast
                              Quarter (SE 1/4) a distance of 1059.90 feet, to
                              the East line of said Southeast Quarter (SE 1/4);
                              thence North 00(degree)02'20" East, along the East
                              line of said Southeast Quarter (SE 1/4), a
                              distance of 821.96 feet, to the point of
                              beginning.

Tract 2
-------

                              That part of the Northeast Quarter of the
                              Southeast Quarter of Section 13, Township 102
                              North, Range 35 West of the Fifth Principal
                              Meridian in Jackson County, Minnesota, described
                              as follows: Commencing at the Northeast corner of
                              the Southeast Quarter of said Section 13; thence
                              South 00 degrees 02 minutes 20 seconds West
                              (assumed bearing), along the East line of said
                              Southeast Quarter, a distance of 183.80 feet;
                              thence North 89 degrees 49 minutes 00 seconds
                              West, along a line parallel with the North line of
                              said Southeast Quarter, a distance of 1059.90
                              feet, to the point of beginning of the tract to be
                              described; thence North 89 degrees 49 minutes 00
                              seconds West, along a line parallel with the North
                              line of said Southeast Quarter, a distance of
                              148.55 feet; thence South 00 degrees 02


                                       10
<PAGE>


                              minutes 20 seconds West, along a line parallel
                              with the East line of said Southeast Quarter, a
                              distance of 821.96 feet; thence South 89 degrees
                              49 minutes 00 seconds East, along a line parallel
                              with the North line of said Southeast Quarter a
                              distance of 148.67 feet; thence North 00 degrees
                              02 minutes 20 seconds East, along a line parallel
                              with the East line of said Southeast Quarter a
                              distance of 821.96 feet, to the point of
                              beginning.

         Continuation:        Date of Filing: March 21, 1995

                              Document No.:   281201

         Total Assignment:    Date of Filing: May 3, 1995

                              Document No.:   281461

                              Assignee:       General Electric Capital
                                                Corporation
                                              44 Old Ridgebury Road
                                              Danbury, CT 06810

         Continuation:        Date of Filing: May 3, 1995

                              Document No.:   281462

         Total Assignment:    Date of Filing: May 3, 1995

                              Document No.:   281466

                              Assignee:       General Electric Capital Corp.
                                              44 Old Ridgebury Road
                                              Danbury, CT 06810

--------------------------

7.       Debtor:              Ag-Chem Equipment Co., Inc.

         Type of Filing:      Original UCC-1 filing

         Filing Jurisdiction: Minnesota Secretary of State

         Orig. Secured Party: ITT Commercial Finance Corp.
                              12400 Portland Ave. So., Suite 125
                              Burnsville, MN 55337


                                       11
<PAGE>


         Date of Filing:      August 29, 1990

         Document Number:     1354406

         Indebtedness:        No debt; finance lease only.

         Collateral:          Equipment more specifically described on Schedule
                              A attached hereto. This transaction represented by
                              this Financing Statement is a true lease. This UCC
                              is being filed for notification purposes only.

                              Equipment on Schedule A:

                              One (1) Artos linear cut and strip machine, Model
                              CS-26, equipped with all necessary tooling and
                              accessories.

                              One (1) Artos Hot Stamp wire Marker, Model WM-6,
                              equipped with heater, frame, numbers and all
                              necessary accessories.

                              One (1) Artos Prefeeder, Model PF-2, equipped with
                              DC (variable speed) drive, frame and accessories,
                              complete wire assembly machine with blades, types,
                              numbers and characters.

         Total Assignment:    Date of Filing: May 9, 1995

                              Document No.:   1760059

                              Assignee:       General Electric Capital
                                                Corporation
                                              44 Old Ridgebury Road
                                              Danbury, CT 06810

         Continuation:        Date of Filing: May 9, 1995

                              Document No.:   1760060

--------------------------

8.       Debtor:              Ag-Chem Equipment Co., Inc.

         Type of Filing:      Original UCC-1 filing

         Filing Jurisdiction: Minnesota Secretary of State

         Orig. Secured Party: ITT Commercial Finance Corp.
                              12400 Portland Ave. So., Suite 125
                              Burnsville, MN 55337


                                       12
<PAGE>


         Date of Filing:      October 5, 1990

         Document Number:     1362964

         Indebtedness:        No debt; finance lease only.

         Collateral:          Equipment more specifically described on Schedule
                              A attached hereto. This transaction represented by
                              this Financing Statement is a true lease. This UCC
                              is being filed for notification purposes only.

                              Equipment on Schedule A:

                              One (1) Accurpress hydraulic press brake, Model
                              No. 732014, 14' x 320 ton complete with all
                              standard equipment, wired 3 phase, equipped with a
                              pair of 36" swing stock support arms complete with
                              T-slots and disappearing stops, 16" throat,
                              tonnage control (adjusted by rotary control knob
                              from front of press brake), adjustable bending
                              speed control, safety light curtain.

         Total Assignment:    Date of Filing: May 9, 1995

                              Document No.:   1760057

                              Assignee:       General Electric Capital
                                                Corporation
                                              44 Old Ridgebury Road
                                              Danbury, CT 06810

         Continuation:        Date of Filing: May 9, 1995

                              Document No.:   1760058

--------------------------

9.       Debtor:              Ag-Chem Equipment Co., Inc.

         Type of Filing:      Original UCC-1 filing

         Filing Jurisdiction: Minnesota Secretary of State

         Orig. Secured Party: ITT Commercial Finance
                              12400 Portland Ave. So., Suite 125
                              Burnsville, MN 55337

         Date of Filing:      March 22, 1991


                                       13
<PAGE>


         Document Number:     1401964

         Collateral:          Equipment more specifically described on Schedules
                              No. 4 and 5 to Master Lease dated July 30, 1990
                              attached hereto.

                              Equipment listed on Schedules 4 and 5:

                              (1) 3H Brand Aperture card reader Modell B11AC;
                              (11) press brake dies; (1) 3M Quantimatic printer;
                              (2) Automec upgrades of G-24 gauge to Accurpress;
                              36" swing Stock Support Arms c/w T-Slots and
                              Disappearing stops for front gaugings; Tonnage
                              Control, Power Ram Tilt for Models 250 task or
                              smaller, Safety Light Curr'n, Hour Meter,
                              Adjustable Bending Speed Control, (1) Marvel
                              bandsaw machine Model 81A11PC

         Total Assignment:    Date of Filing: April 21, 1995

                              Document No.:   1755113

                              Assignee:       General Electric Capital
                                                Corporation
                                              44 Old Ridgebury Road
                                              Danbury, CT 06810

         Continuation:        Date of Filing: October 16, 1995

                              Document No.:   1796517

--------------------------

10.      Debtor:              Ag-Chem Equipment Co., Inc.

         Type of Filing:      Original UCC-1 filing

         Filing Jurisdiction: Minnesota Secretary of State

         Secured Party:       Butler Machinery Company
                              P.O. Box 9559
                              Fargo, ND 58106

         Date of Filing:      July 13, 1995

         Document Number:     1775305


                                       14
<PAGE>


         Collateral:          For the rental of the following: CAT GP25, S/N
                              5AM90482, and all substitutions, replacements,
                              additions and accessions thereto, now owned or
                              hereafter acquired, and proceeds thereof.


--------------------------

11.      Debtor:              Ag-Chem Equipment Co., Inc.

         Type of Filing:      Original UCC-1 filing

         Filing Jurisdiction: Minnesota Secretary of State

         Secured Party:       Gelco Corporation
                              Three Capital Drive
                              Eden Prairie, MN 55344

         Date of Filing:      October 30, 1995

         Document Number:     1799755

         Collateral:          A first priority security interest in and to the
                              property identified below, together with i) all
                              accounts, contract rights, chattel paper,
                              instruments, documents, accounts receivables,
                              general intangibles, security deposits, or
                              reserves, ii) all repairs, accessories, additions,
                              attachments, replacements, substitutions, or
                              accessions and any related equipment, including,
                              but not limited to, chargers, and iii) all
                              insurance or other proceeds, all as may directly
                              or indirectly arise out of or be related to the
                              property identified below.

                              The parties agree that this security agreement and
                              financing statement is filed for precautionary
                              purposes only and does not and is not intended to
                              change the characteristics of the transaction as a
                              lease.

                              The terms and conditions of the Lease Agreement
                              between the undersigned dated August 23, 1995, are
                              hereby incorporated by reference and made a part
                              hereof.

                              (11) 1995 Prime-Mover low lift pallet trucks,
                              Model PMX, S/N PMX00258669, PMX00258671,
                              PMX00258670, PMX00258667, PMX00259143,
                              PMX00259144, PMX00259145, PMX00259146,
                              PMX00259147, PMX00259148, PMX00259149, Unit 95001
                              through 95011


                                       15
<PAGE>


                              (9) 1995 Prime-Mover low lift pallet trucks, Model
                              RMX65, S/N RMX6525279001, RMX6525279003
                              RMX6525279002, RMX6525279005, RMX6525278001,
                              RMX6525279007, RMX6525279006, RMX6525279008,
                              RMX6525279004, Units 95012 through 95020

--------------------------

12.      Debtor:              Ag-Chem Equipment Co., Inc.

         Type of Filing:      Original UCC-1 filing

         Filing Jurisdiction: Jackson County, Minnesota

         Secured Party:       City of Jackson
                              80 West Ashley Street
                              Jackson, MN 56143

         Date of Filing:      December 4, 1995

         Document Number:     283338

         Collateral:          1995 Caterpillar DP100 lift truck, S/N M75580

--------------------------

13.      Debtor:              Ag-Chem Equipment Co., Inc.

         Type of Filing:      Original UCC-1 filing

         Filing Jurisdiction: Minnesota Secretary of State

         Secured Party:       Jackson County, Minnesota
                              Jackson County Courthouse
                              P.O. Box 374
                              Jackson, MN 56143

         Date of Filing:      December 8, 1995

         Document Number:     1808866

         Collateral:          One used Caterpillar lift truck, diesel; 218" FF
                              mast; 72" forks; cab; S/N 70Y00886


                                       16
<PAGE>


--------------------------

14.      Debtor:              Ag-Chem Equipment Co., Inc.

         Type of Filing:      Original UCC-1 filing

         Filing Jurisdiction: Minnesota Secretary of State

         Secured Party:       Gelco Corporation
                              Three Capital Drive
                              Eden Prairie, MN 55344

         Date of Filing:      December 11, 1995

         Document Number:     1809300

         Collateral:          A first priority security interest in and to the
                              property identified below, together with i) all
                              accounts, contract rights, chattel paper,
                              instruments, documents, accounts receivables,
                              general intangibles, security deposits, or
                              reserves, ii) all repairs, accessories, additions,
                              attachments, replacements, substitutions, or
                              accessions and any related equipment, including,
                              but not limited to, chargers, and iii) all
                              insurance or other proceeds, all as may directly
                              or indirectly arise out of or be related to the
                              property identified below.

                              The parties agree that this security agreement and
                              financing statement is filed for precautionary
                              purposes only and does not and is not intended to
                              change the characteristics of the transaction as a
                              lease.

                              The terms and conditions of the Lease Agreement
                              between the undersigned dated August 23, 1995, are
                              hereby incorporated by reference and made a part
                              hereof.

                              (3) 1995 Caterpillar forklifts, Model GP25 LP, S/N
                              5AM90830, 5AM01911, 5AM01436, Unit 95028, 95029,
                              95030

--------------------------

15.      Debtor:              Ag-Chem Equipment Co., Inc.

         Type of Filing:      Original UCC-1 filing

         Filing Jurisdiction: Minnesota Secretary of State

         Secured Party:       Southwest MN Initiative Fund
                              P.O. Box 130
                              Granite Falls, MN 56241


                                       17
<PAGE>


         Date of Filing:      December 11, 1995

         Document Number:     1809320

         Collateral:          Okuma Model MV4VAE vertical machining center
                              including all standard equipment and the
                              following: 8 additional M-codes, rigid tapping,
                              S/N 9802, with splash tamer full enclosure

--------------------------

16.      Debtor:              Ag-Chem Equipment Co., Inc.

         Type of Filing:      Original UCC-1 filing

         Filing Jurisdiction: Minnesota Secretary of State

         Secured Party:       Gelco Corporation
                              Three Capital Drive
                              Eden Prairie, MN 55344

         Date of Filing:      January 26, 1996

         Document Number:     1820406

         Collateral:          A first priority security interest in and to the
                              property identified below, together with i) all
                              accounts, contract rights, chattel paper,
                              instruments, documents, accounts receivables,
                              general intangibles, security deposits, or
                              reserves, ii) all repairs, accessories, additions,
                              attachments, replacements, substitutions, or
                              accessions and any related equipment, including,
                              but not limited to, chargers, and iii) all
                              insurance or other proceeds, all as may directly
                              or indirectly arise out of or be related to the
                              property identified below.

                              The parties agree that this security agreement and
                              financing statement is filed for precautionary
                              purposes only and does not and is not intended to
                              change the characteristics of the transaction as a
                              lease.

                              The terms and conditions of the Lease Agreement
                              between the undersigned dated August 25, 1995, are
                              hereby incorporated by reference and made a part
                              hereof.


                                       18
<PAGE>


                              (4) 1995 Mitsubishi forklifts, Model GP25 LP, S/N
                              5AM02335, 5AM02342, 5AM02490, 5AM02491, Unit
                              95021, 95022, 95023, 95027

--------------------------

17.      Debtor:              Ag-Chem Equipment Co., Inc.

         Type of Filing:      Original UCC-1 filing

         Filing Jurisdiction: Minnesota Secretary of State

         Secured Party:       Gelco Corporation
                              Three Capital Drive
                              Eden Prairie, MN 55344

         Date of Filing:      March 8, 1996

         Document Number:     1830773

         Collateral:          A first priority security interest in and to any
                              and all equipment of Lessee constituting material
                              handling equipment, including, but not limited to,
                              forklifts, order pickers, pallet jacks and
                              tuggers, that are now or hereafter leased from
                              Lessor, together with: i) all accounts, contract
                              rights, chattel paper, instruments, documents,
                              accounts receivables, general intangibles,
                              security deposits, or reserves, ii) all repairs,
                              accessories, additions, attachments, replacements,
                              substitutions, or accessions and any related
                              equipment, including, but not limited to,
                              chargers, and iii) all insurance or other
                              proceeds, all as may directly or indirectly arise
                              out of or be related to the equipment identified
                              above.

                              The parties agree that this Lease Agreement and
                              financing statement is filed for precautionary
                              purposes only and does not and is not intended to
                              change the characteristics of the transaction as a
                              lease.

                              The terms and conditions of the Lease Agreements
                              between the undersigned are hereby incorporated by
                              reference and made a part hereof.

         Amendment:           Date of Filing: March 31, 1997

                              Document No.:   1929038


                                       19
<PAGE>

                              Reference was changed from filing of "security
                              agreement" for precautionary purposes in second
                              paragraph to "Lease Agreement" filed for
                              precautionary purposes.

--------------------------

18.      Debtor:              Ag-Chem Equipment Co., Inc.

         Type of Filing:      Original UCC-1 filing

         Filing Jurisdiction: Minnesota Secretary of State

         Secured Party:       Gelco Corporation, d/b/a GE Capital Fleet Services
                              Three Capital Drive
                              Eden Prairie, MN 55344

         Date of Filing:      May 6, 1997

         Document Number:     1939361

         Collateral:          A first priority security interest in (1) 1997
                              Caterpillar DP100lift truck and (1) 1997
                              Caterpillar NRR45P reach truck; and to any and all
                              equipment of Lessee constituting material handling
                              equipment, and including, but not limited to,
                              forklifts, order pickers, pallet jacks and
                              tuggers, that are now or hereafter leased from
                              Lessor, together with: i) all accounts, contract
                              rights, chattel paper, instruments, documents,
                              accounts receivables, general intangibles,
                              security deposits, or reserves, ii) all repairs,
                              accessories, additions, attachments, replacements,
                              substitutions, or accessions and any related
                              equipment, including, but not limited to,
                              chargers, and iii) all insurance or other
                              proceeds, all as may directly or indirectly arise
                              out of or be related to the equipment identified
                              above.

                              The parties agree that this Lease Agreement and
                              financing statement is filed for precautionary
                              purposes only and does not and is not intended to
                              change the characteristics of the transaction as a
                              lease.

                              The terms and conditions of the Lease Agreements
                              between the undersigned are hereby incorporated by
                              reference and made a part hereof.

--------------------------

19.      INTENTIONALLY OMITTED


                                       20
<PAGE>


--------------------------

20.      Debtor:              Ag-Chem Equipment Co., Inc.

         Type of Filing:      Original UCC-1 filing

         Filing Jurisdiction: Minnesota Secretary of State

         Secured Party:       City of Jackson
                              80 West Ashley Street
                              Jackson, MN 56143

         Date of Filing:      January 19, 1990

         Document Number:     1299826

         Collateral:          One (1) hydraulic sheer (#00436F), one (1)
                              lubricator (#905044), one (1) squaring arm
                              (#640360), one (1) 230 volt kit (#640211), one (1)
                              Microcomputer control (#640416)

--------------------------

21.      Debtor:              Ag-Chem Equipment Co., Inc.

         Type of Filing:      Original UCC-1 filing

         Filing Jurisdiction: Minnesota Secretary of State

         Secured Party:       Jackson County
                              Jackson County Auditor
                              Jackson, MN 56143

         Date of Filing:      February 9, 1990

         Document Number:     1305279

         Collateral:          GXM 1200 Dual Drive CNC Oxyfuel/Plasma Shape
                              Cutting machine; Strato SRX-20 Aerial work
                              platform; and Bauman Electric Sideloader, Model
                              E4S 100-48-236

--------------------------

22.      Debtor:              Ag-Chem Equipment Co., Inc.

         Type of Filing:      Original UCC-1 filing

         Filing Jurisdiction: Minnesota Secretary of State


                                       21
<PAGE>


         Secured Party:       Southwest MN Initiative Fund
                              163 Ninth Avenue
                              Granite Falls, MN 56241

         Date of Filing:      January 5, 1990

         Document Number:     1296350

         Collateral:          1979 Turret Punch, Model #VELA II 305050, 33 ton
                              capacity, Serial #VII

                              Continuation:   Date of Filing  December 21, 1994
                              Document No.:   1724660

--------------------------

23.      Debtor:              Ag-Chem Equipment Company Inc.

         Type of Filing:      Original UCC-1 filing

         Filing Jurisdiction: Minnesota Secretary of State

         Secured Party:       Winnebago Industries Inc.
                              P.O. Box 152
                              Forest City, IA 50436

         Date of Filing:      January 25, 2000

         Document Number:     2196105

         Collateral:          All items described on attached two (2) page list
                              entitled "Luggage Door Equipment" to Financing
                              Statement, any items associated with the attached
                              Work Agreement between the Secured Party,
                              Winnebago Industries, Inc., and the Business
                              Debtor, Ag-Chem Equipment Company, Inc. and all
                              additional equipment, tools, raw material and
                              parts provided hereafter by Secured Party.

--------------------------

24.      Debtor:              Ag-Chem Equipment Co. Inc.

         Type of Filing:      Original UCC-1 filing

         Filing Jurisdiction: Minnesota Secretary of State


                                       22
<PAGE>


         Secured Party:       General Electric Capital Corp.
                              1415 West 22nd Street #800
                              Oak Book, IL 60521

         Date of Filing:      October 29, 1992

         Document Number:     1540216

         Collateral:          This filing statement is being filed solely as a
                              precaution if, contrary to the intention of the
                              parties, the transaction relating to the property
                              described as 207 Industrial Park, Jackson, MN and
                              relating to Schedule No. 0001 to Master Lease
                              Agreement, attached to Financing Statement.

         Continuation:        Date of Filing: May 7, 1997

                              Document No.:   1939741

--------------------------

25.      Debtor:              Loral Products Inc.

         Type of Filing:      Original UCC-1 filing

         Filing Jurisdiction: Minnesota Secretary of State

         Secured Party:       Butler Machinery Co.
                              P.O. Box 9559
                              Fargo, ND 58106

         Date of Filing:      February 22, 2000

         Document Number:     2203280

         Collateral:          For the rental of a Caterpillar GP4A M80890 s/n
                              1CM02103 and all substitutions, replacements,
                              additions and accessions thereto, now owned or
                              hereafter acquired, and proceeds thereof.

IBM Credit Corp also has several lines filed of record relating to equipment
financing which has been terminated. The company is in the process of having
these liens removed.


                                       23