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INDEMNIFICATION AGREEMENT    
  

    This Indemnification Agreement (the "Agreement") is made as of December   , 2000, by and
between Seattle Genetics, Inc., a Delaware corporation (the "Company"), and «IndemniteeName» (the
"Indemnitee"). 

 
 

RECITALS    
  

    The Company and Indemnitee recognize the increasing difficulty in obtaining liability insurance for directors, officers and key employees, the significant
increases in the cost of such insurance and the general reductions in the coverage of such insurance. The Company and Indemnitee further recognize the substantial increase in corporate litigation in
general, subjecting directors, officers and key employees to expensive litigation risks at the same time as the availability and coverage of liability insurance has been severely limited. Indemnitee
does not regard the current protection available as adequate under the present circumstances, and Indemnitee and agents of the Company may not be willing to continue to serve as agents of the Company
without additional protection. The Company desires to attract and retain the services of highly qualified individuals, such as Indemnitee, and to indemnify its directors, officers and key employees so
as to provide them with the maximum protection permitted by law. 

 
 

AGREEMENT    
  

    In consideration of the mutual promises made in this Agreement, and for other good and valuable consideration, receipt of which is hereby acknowledged, the
Company and Indemnitee hereby agree as follows: 

    1.  Indemnification.  

    (a) Third Party Proceedings. The Company shall indemnify Indemnitee if Indemnitee is or was a party or is threatened to
be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the
Company) by reason of the fact that Indemnitee is or was a director, officer, employee or agent of the Company, or any subsidiary of the Company, by reason of any action or inaction on the part of
Indemnitee while an officer or director or by reason of the fact that Indemnitee is or was serving at the request of the Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement (if such settlement is approved in advance by the
Company, which approval shall not be unreasonably withheld) actually and reasonably incurred by Indemnitee in connection with such action, suit or proceeding if Indemnitee acted in good faith and in a
manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe
Indemnitee's conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that Indemnitee did not act in good faith and in a manner which Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, or, with
respect to any criminal action or proceeding, that Indemnitee had reasonable cause to believe that Indemnitee's conduct was unlawful. 

    (b) Proceedings By or in the Right of the Company. The Company shall indemnify Indemnitee if Indemnitee was or is a
party or is threatened to be made a party to any threatened, pending or completed action or proceeding by or in the right of the Company or any subsidiary of the Company to procure a judgment in its
favor by reason of the fact that Indemnitee is or was a director, officer, employee or agent of the Company, or any subsidiary of the Company, by reason 

1

 

of any action or inaction on the part of Indemnitee while an officer or director or by reason of the fact that Indemnitee is or was serving at the request of the Company as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees) and, to the fullest extent permitted by law, amounts paid
in settlement (if such settlement is approved in advance by the Company, which approval shall not be unreasonably withheld), in each case to the extent actually and reasonably incurred by Indemnitee
in connection with the defense or settlement of such action or suit if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of
the Company and its stockholders, except that no indemnification shall be made in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudicated by court order or
judgment to be liable to the Company in the performance of Indemnitee's duty to the Company and its stockholders unless and only to the extent that the court in which such action or proceeding is or
was pending shall determine upon application that, in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnity for such expenses which such court shall deem
proper. 

    (c) Mandatory Payment of Expenses. To the extent that Indemnitee has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in Section 1(a) or Section 1(b) or the defense of any claim, issue or matter therein, Indemnitee shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by Indemnitee in connection therewith. 

    2.  No Employment Rights. Nothing contained in this Agreement is intended to create in
Indemnitee any right to continued employment. 

    3.  Expenses; Indemnification Procedure.  

    (a) Advancement of Expenses. The Company shall advance all expenses incurred by Indemnitee in connection with the
investigation, defense, settlement or appeal of any civil or criminal action, suit or proceeding referred to in Section l(a) or Section 1(b) hereof (including amounts actually paid in
settlement of any such action, suit or proceeding). Indemnitee hereby undertakes to repay such amounts advanced only if, and to the extent that, it shall ultimately be determined that Indemnitee is
not entitled to be indemnified by the Company as authorized hereby. 

    (b) Notice/Cooperation by Indemnitee. Indemnitee shall, as a condition precedent to his or her right to be indemnified
under this Agreement, give the Company notice in writing as soon as practicable of any claim made against Indemnitee for which indemnification will or could be sought under this Agreement. Notice to
the Company shall be directed to the Chief Executive Officer of the Company and shall be given in accordance with the provisions of Section 12(d) below. In addition, Indemnitee shall give the
Company such information and cooperation as it may reasonably require and as shall be within Indemnitee's power. 

    (c) Procedure. Any indemnification and advances provided for in Section 1 and this Section 3 shall be made
no later than thirty (30) days after receipt of the written request of Indemnitee. If a claim under this Agreement, under any statute, or under any provision of the Company's Certificate of
Incorporation or Bylaws providing for indemnification, is not paid in full by the Company within thirty (30) days after a written request for payment thereof has first been received by the
Company, Indemnitee may, but need not, at any time thereafter bring an action against the Company to recover the unpaid amount of the claim and, subject to Section 11 of this Agreement,
Indemnitee shall also be entitled to be paid for the expenses (including attorneys' fees) of bringing such action. It shall be a defense to any such action (other than an action brought to enforce a
claim for expenses incurred in connection with any action, suit or proceeding in advance of its final disposition) that Indemnitee has not met the standards of conduct which make it permissible under 

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applicable law for the Company to indemnify Indemnitee for the amount claimed, but the burden of proving such defense shall be on the Company and Indemnitee shall be entitled to receive interim
payments of expenses pursuant to Section 3(a) unless and until such defense may be finally adjudicated by court order or judgment from which no further right of appeal exists. It is the
parties' intention that
if the Company contests Indemnitee's right to indemnification, the question of Indemnitee's right to indemnification shall be for the court to decide, and neither the failure of the Company (including
its Board of Directors, any committee or subgroup of the Board of Directors, independent legal counsel, or its stockholders) to have made a determination that indemnification of Indemnitee is proper
in the circumstances because Indemnitee has met the applicable standard of conduct required by applicable law, nor an actual determination by the Company (including its Board of Directors, any
committee or subgroup of the Board of Directors, independent legal counsel, or its stockholders) that Indemnitee has not met such applicable standard of conduct, shall create a presumption that
Indemnitee has or has not met the applicable standard of conduct. 

    (d) Notice to Insurers. If, at the time of the receipt of a notice of a claim pursuant to Section 3(b) hereof,
the Company has director and officer liability insurance in effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set
forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of
such proceeding in accordance with the terms of such policies. 

    (e) Selection of Counsel. In the event the Company shall be obligated under Section 3(a) hereof to pay the
expenses of any proceeding against Indemnitee, the Company, if appropriate, shall be entitled to assume the defense of such proceeding, with counsel approved by Indemnitee, upon the delivery to
Indemnitee of written notice of its election so to do. After delivery of such notice, approval of such counsel by Indemnitee and the retention of such counsel by the Company, the Company will not be
liable to Indemnitee under this Agreement for any fees of counsel subsequently incurred by Indemnitee with respect to the same proceeding, provided that (i) Indemnitee shall have the right to
employ counsel in any such proceeding at Indemnitee's expense; and (ii) if (A) the employment of counsel by Indemnitee has been previously authorized by the Company,
(B) Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Company and Indemnitee in the conduct of any such defense or (C) the Company shall
not, in fact, have employed counsel to assume the defense of such proceeding, then the fees and expenses of Indemnitee's counsel shall be at the expense of the Company. 

    4.  Additional Indemnification Rights; Nonexclusivity.  

    (a) Scope. Notwithstanding any other provision of this Agreement, the Company hereby agrees to indemnify the Indemnitee
to the fullest extent permitted by law, notwithstanding that such indemnification is not specifically authorized by the other provisions of this Agreement, the Company's Certificate of Incorporation,
the Company's Bylaws or by statute. In the event of any change, after the date of this Agreement, in any applicable law, statute, or rule which expands the right of a Delaware corporation to indemnify
a member of its board of directors or an officer, such changes shall be deemed to be within the purview of Indemnitee's rights and the Company's obligations under this Agreement. In the event of any
change in any applicable law, statute or rule which narrows the right of
a Delaware corporation to indemnify a member of its board of directors or an officer, such changes, to the extent not otherwise required by such law, statute or rule to be applied to this Agreement
shall have no effect on this Agreement or the parties' rights and obligations hereunder. 

    (b) Nonexclusivity. The indemnification provided by this Agreement shall not be deemed exclusive of any rights to which
Indemnitee may be entitled under the Company's Certificate of 

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Incorporation, its Bylaws, any agreement, any vote of stockholders or disinterested members of the Company's Board of Directors, the General Corporation Law of the State of Delaware, or otherwise,
both as to action in Indemnitee's official capacity and as to action in another capacity while holding such office. The indemnification provided under this Agreement shall continue as to Indemnitee
for any action taken or not taken while serving in an indemnified capacity even though he or she may have ceased to serve in any such capacity at the time of any action, suit or other covered
proceeding. 

    5.  Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to
indemnification by the Company for some or a portion of the expenses, judgments, fines or penalties actually or reasonably incurred in the investigation, defense, appeal or settlement of any civil or
criminal action, suit or proceeding, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion of such expenses, judgments, fines or penalties
to which Indemnitee is entitled. 

    6.  Mutual Acknowledgment. Both the Company and Indemnitee acknowledge that in certain
instances, Federal law or public policy may override applicable state law and prohibit the Company from indemnifying its directors and officers under this Agreement or otherwise. For example, the
Company and Indemnitee acknowledge that the Securities and Exchange Commission (the "SEC") has taken the position that indemnification is not
permissible for liabilities arising under certain federal securities laws, and federal legislation prohibits indemnification for certain ERISA violations. Indemnitee understands and acknowledges that
the Company has undertaken or may be required in the future to undertake with the SEC to submit the question of indemnification to a court in certain circumstances for a determination of the Company's
right under public policy to indemnify Indemnitee. 

    7.  Officer and Director Liability Insurance. The Company shall, from time to time, make the
good faith determination whether or not it is practicable for the Company to obtain and maintain a policy or policies of insurance with reputable insurance companies providing the officers and
directors of the Company with coverage for losses from wrongful acts, or to ensure the Company's performance of its indemnification obligations under this Agreement. Among other considerations, the
Company will weigh the costs of obtaining such insurance coverage against the protection afforded by such coverage. In all policies of director and officer liability insurance, Indemnitee shall be
named as an insured in
such a manner as to provide Indemnitee the same rights and benefits as are accorded to the most favorably insured of the Company's directors, if Indemnitee is a director; or of the Company's officers,
if Indemnitee is not a director of the Company but is an officer; or of the Company's key employees, if Indemnitee is not an officer or director but is a key employee. Notwithstanding the foregoing,
the Company shall have no obligation to obtain or maintain such insurance if the Company determines in good faith that such insurance is not reasonably available, if the premium costs for such
insurance are disproportionate to the amount of coverage provided, if the coverage provided by such insurance is limited by exclusions so as to provide an insufficient benefit, or if Indemnitee is
covered by similar insurance maintained by a parent or subsidiary of the Company. 

    8.  Severability. Nothing in this Agreement is intended to require or shall be construed as
requiring the Company to do or fail to do any act in violation of applicable law. The Company's inability, pursuant to court order, to perform its obligations under this Agreement shall not constitute
a breach of this Agreement. The provisions of this Agreement shall be severable as provided in this Section 8. If this Agreement or any portion hereof shall be invalidated on any ground by any
court of competent jurisdiction, then the Company shall nevertheless indemnify Indemnitee to the full extent permitted by any applicable portion of this Agreement that shall not have been invalidated,
and the balance of this Agreement not so invalidated shall be enforceable in accordance with its terms. 

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    9.  Exceptions. Any other provision herein to the contrary notwithstanding, the Company shall
not be obligated pursuant to the terms of this Agreement: 

    (a) Claims Initiated by Indemnitee. To indemnify or advance expenses to Indemnitee with respect to proceedings or claims
initiated or brought voluntarily by Indemnitee and not by way of defense, except with respect to proceedings brought to establish or enforce a right to indemnification under this Agreement or any
other statute or law or otherwise as required under Section 145 of the Delaware General Corporation Law, but such indemnification or advancement of expenses may be provided by the Company in
specific cases if the Board of Directors finds it to be appropriate; 

    (b) Lack of Good Faith. To indemnify Indemnitee for any expenses incurred by Indemnitee with respect to any proceeding
instituted by Indemnitee to enforce or interpret this Agreement, if a court of competent jurisdiction determines that each of the material assertions made by Indemnitee in such proceeding was not made
in good faith or was frivolous; 

    (c) Insured Claims. To indemnify Indemnitee for expenses or liabilities of any type whatsoever (including, but not
limited to, judgments, fines, ERISA excise taxes or penalties, and amounts paid in
settlement) to the extent such expenses or liabilities have been paid directly to Indemnitee by an insurance carrier under a policy of officers' and directors' liability insurance maintained by the
Company; or 

    (d) Claims under Section 16(b). To indemnify Indemnitee for expenses or the payment of profits arising from the
purchase and sale by Indemnitee of securities in violation of Section 16(b) of the Securities Exchange Act of 1934, as amended, or any similar successor statute. 

    10.  Construction of Certain Phrases.  

    (a) For
purposes of this Agreement, references to the "Company" shall include, in addition to the resulting corporation,
any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to
indemnify its directors, officers, and employees or agents, so that if Indemnitee is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request
of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, Indemnitee shall stand in the same position
under the provisions of this Agreement with respect to the resulting or surviving corporation as Indemnitee would have with respect to such constituent corporation if its separate existence had
continued. 

    (b) For
purposes of this Agreement, references to "other enterprises" shall include employee benefit plans; references
to "fines" shall include any excise taxes assessed on Indemnitee with respect to an employee benefit plan; and references to
"serving at the request of the Company" shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or
involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants, or beneficiaries; and if Indemnitee acted in good faith and in a manner
Indemnitee reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan, Indemnitee shall be deemed to have acted in a manner
"not opposed to the best interests of the Company" as referred to in this Agreement. 

    11.  Attorneys' Fees. In the event that any action is instituted by Indemnitee under this
Agreement to enforce or interpret any of the terms hereof, Indemnitee shall be entitled to be paid all court costs and expenses, including reasonable attorneys' fees, incurred by Indemnitee with
respect to such action, unless as a part of such action, the court of competent jurisdiction determines that each of the material assertions made by Indemnitee as a basis for such action were not made
in good faith or were frivolous. In the event of an action instituted by or in the name of the Company under this Agreement 

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or to enforce or interpret any of the terms of this Agreement, Indemnitee shall be entitled to be paid all court costs and expenses, including attorneys' fees, incurred by Indemnitee in defense of
such action (including with respect to Indemnitee's counterclaims and cross-claims made in such action), unless as a part of such action the court determines that each of Indemnitee's material
defenses to such action were made in bad faith or were frivolous. 

    12.  Miscellaneous.  

    (a) Governing Law. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the
parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of Delaware, without giving effect to principles of conflict of law. 

    (b) Entire Agreement; Enforcement of Rights. This Agreement sets forth the entire agreement and understanding of the
parties relating to the subject matter herein and merges all prior discussions between them. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, shall
be effective unless in writing signed by the parties to this Agreement. The failure by either party to enforce any rights under this Agreement shall not be construed as a waiver of any rights of such
party. 

    (c) Construction. This Agreement is the result of negotiations between and has been reviewed by each of the parties
hereto and their respective counsel, if any; accordingly, this Agreement shall be deemed to be the product of all of the parties hereto, and no ambiguity shall be construed in favor of or against any
one of the parties hereto. 

    (d) Notices. Any notice, demand or request required or permitted to be given under this Agreement shall be in writing
and shall be deemed sufficient when delivered personally or sent by telegram or fax, or forty-eight (48) hours after being deposited in the U.S. mail, as certified or registered mail, with
postage prepaid, and addressed to the party to be notified at such party's address as set forth below or as subsequently modified by written notice. 

    (e) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original
and all of which together shall constitute one instrument. 

    (f)  Successors and Assigns. This Agreement shall be binding upon the Company and its successors and assigns, and inure
to the benefit of Indemnitee and Indemnitee's heirs, legal representatives and assigns. 

    (g) Subrogation. In the event of payment under this Agreement, the Company shall be subrogated to the extent of such
payment to all of the rights of recovery of Indemnitee, who shall execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Company to
effectively bring suit to enforce such rights. 

[Signature Page Follows]  

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    The parties hereto have executed this Agreement as of the day and year set forth on the first page of this Agreement. 

	 	 	Seattle Genetics, Inc.
	

 	
 	

 	
 	
By:	
 	

	 	 	 	 	Title:	 	

	

 	
 	

 	
 	

Address:	
 	

22215 26th Avenue SE, Suite 3000

Bothell, Washington 98021

	AGREED TO AND ACCEPTED:	 	 	 	 
	

«IndemniteeName»	
 	

 	
 	

 
	

 (Signature)	
 	

 	
 	

 
	

Address:	
 	

«Indemnitee Address1»

«Indemnitee Address2»	
 	

 	
 	

 

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INDEMNIFICATION AGREEMENT

RECITALS

AGREEMENT<PAGE>

                                                                      JOHN DEERE

                                                                    CONSTRUCTION

                                                               DEALER AGREEMENTS

                                                            FOR RDO CONSTRUCTION

                                                        EQUIPMENT CO. IN ARIZONA

                                                             TEXAS AND MINNESOTA

                                                                               1
<PAGE>

DEFINED TERMS

For purposes of this Agreement, the following terms shall be defined as follows:

Absorption                              The percentage of Dealer's fixed
                                        expenses and interest covered by
                                        Dealer's parts and service department
                                        contribution margin. JDCEC will specify
                                        the method used to measure Absorption in
                                        bulletins issued from time to time to
                                        JDCEC Dealers.

Affiliates                              (1) each of the Key Persons, (2) their
                                        spouses and children, (3) each guarantor
                                        of Dealer, (4) any other person or
                                        entity that holds, directly or
                                        indirectly, a 10% or greater interest in
                                        Dealer, and (5) any entity owned 10% or
                                        more, directly or indirectly,
                                        individually or in combination, by (a)
                                        Dealer, (b) a Key Person, (c) their
                                        spouses or children, (d) a guarantor of
                                        Dealer, or (e) any other person or
                                        entity that holds, directly or
                                        indirectly, a 10% or greater interest in
                                        Dealer.

Agreement                               This agreement.

AOR                                     An area of responsibility assigned to a
                                        JDCEC Dealer under a JDCEC dealer
                                        agreement.

Conditions of Sale                      JDCEC's published Construction Dealer
                                        Conditions of Sale, as in effect from
                                        time to time.

Core Product Group                      Any group of products that JDCEC may
                                        designate from time to time as a core
                                        product group.

Customer Satisfaction                   The extent to which Dealer fulfills
                                        the needs and expectations of customers
                                        in Dealer's AOR. JDCEC will specify the
                                        method used to measure Customer
                                        Satisfaction in bulletins issued from
                                        time to time to JDCEC Dealers.

Dealer                                  The dealer identified in this Agreement.

Dealer's AOR                            The area of responsibility assigned to
                                        Dealer under this Agreement.

Dispute                                 Any dispute, controversy, or claim
                                        between Dealer or an Affiliate and
                                        JDCEC, Deere Credit, Inc., or ERS,
                                        whether based on contract, tort,
                                        statute, or other legal theory.

ERS                                     Equipment Remarketing Services, a
                                        division of Deere Marketing Services,
                                        Inc.

Equity                                  The Dealer's equity to assets
                                        percentage, determined by JDCEC based
                                        upon the most recent fiscal year-end
                                        audited financial statement designated
                                        by JDCEC pursuant to Section 1.j., with
                                        adjustments, if any, as provided in
                                        Section 1.j., and

                                                                               2
<PAGE>

                                        calculated as of the end of the fiscal
                                        year covered by such financial
                                        statement.

Equity Performance Standard             The equity to assets percentage
                                        performance standard specified by JDCEC
                                        from time to time in JDCEC dealer
                                        bulletins for JDCEC Dealers generally.

Financial Information System            JDCEC's Financial Information System (or
                                        successor system).

Goods                                   Whole Goods and Parts, as well as
                                        certain JDM products that JDCEC may
                                        offer for sale to Dealer.

JDCEC                                   John Deere Construction Equipment
                                        Company.

JDCEC Dealer                            An authorized JDCEC dealer.

JDCEC Warranties                        The JDCEC warranties (including, in
                                        some cases, extended warranties)
                                        applicable to the sale and, in some
                                        cases, to the lease or rental of
                                        various types of Goods.

JDCEC's Affiliates                      Deere & Company, its divisions, and
                                        its subsidiaries, whether direct or
                                        indirect.

JDM                                     John Deere Merchandise.

John Deere Network                      The network of computers,
                                        communications equipment, computer
                                        networking equipment, computer software,
                                        application software, and data used by
                                        JDCEC for the purpose of gathering and
                                        communicating information and conducting
                                        business.

Key Persons                             The persons and entities listed in
                                        Exhibit 4.

Manual                                  JDCEC's published Service Administration
                                        Manual (or successor document), as in
                                        effect from time to time.

Market Share                            The market penetration achieved
                                        for Goods, or a subset thereof (e.g.
                                        Core Products, models, Parts), in
                                        Dealer's AOR during a specified time
                                        period. JDCEC will specify the method
                                        used to measure Market Share in
                                        bulletins issued from time to time to
                                        JDCEC Dealers.

Meaningful Progress                     A level of improvement for each
                                        Performance Criterion for the first
                                        12-month period covered by the Dealer's
                                        annual JDCEC-approved business plan,
                                        which level of improvement shall be as
                                        agreed upon between Dealer and JDCEC
                                        each year, in connection with the
                                        preparation of Dealer's annual business
                                        plan. If in any year Dealer and JDCEC do
                                        not reach agreement upon Meaningful
                                        Progress with respect to a particular
                                        Performance Criterion, JDCEC will
                                        determine in its sole discretion what
                                        will constitute Meaningful Progress for
                                        that Performance Criterion for the year.

                                                                               3
<PAGE>

Minimum Equity Level                    The minimum equity to assets percentage
                                        level specified by JDCEC from time to
                                        time in JDCEC Dealer bulletins for JDCEC
                                        Dealers generally.

Parts                                   (1) the products indicated by a check
                                        mark in Section B of Exhibit 2 and (2)
                                        attachments and parts available from
                                        JDCEC for the Whole Goods.

Performance Criteria                    Market Share, Absorption, Customer
                                        Satisfaction, and Equity, as well as
                                        other criteria specified by JDCEC
                                        from time to time in JDCEC Dealer
                                        bulletins for JDCEC Dealers generally.

Performance Standard                    A level of performance (for a
                                        particular Performance Criterion)
                                        specified by JDCEC from time to time in
                                        JDCEC Dealer bulletins for JDCEC Dealers
                                        generally.

Service Information System              JDCEC's Service Information System (or
                                        successor system).

Terms Schedule                          JDCEC's published U.S. Construction
                                        Dealer Terms Schedule, as in effect from
                                        time to time.

Trademarks                              The trademarks owned by JDCEC or any of
                                        JDCEC's Affiliates.

Used Goods                              Whole Goods that do not have any SECURE
                                        Standard Warranty remaining.

Whole Goods                             (1) the products indicated by a
                                        check mark in Section A of Exhibit 2,
                                        (2) their predecessors, and (3) their
                                        JDCEC-designated successors.

                                                                               4
<PAGE>

JOHN DEERE CONSTRUCTION EQUIPMENT COMPANY

AUTHORIZED CONSTRUCTION DEALER AGREEMENT

The Dealer identified below hereby applies to JDCEC for appointment as a JDCEC
Dealer for the area of responsibility designated in Exhibit 1. Dealer agrees
that the relationship between Dealer and JDCEC will be governed by the Terms of
Appointment set forth in this Agreement. When it executes this Agreement, JDCEC
accepts the Dealer's application and agrees to be bound by the Terms of
Appointment. This Agreement shall be effective upon execution by JDCEC and shall
as of that date supersede any prior John Deere Dealer Agreement between the
parties hereto (including without limitation any prior John Deere Industrial
Dealer Agreement between Dealer and John Deere Industrial Equipment Company).

Dealer (Firm Name):  RDO Construction Equipment Co.
                     -----------------------------------------------------------

Address:  2649 North 29th Avenue, Phoenix, AZ  85009
          ----------------------------------------------------------------------
X  Corporation
--
         __ C
         __ S
__ Limited Liability Company               By:  /s/ Ronald D. Offutt
__ Partnership                               -----------------------------------
         __ General
         __ Limited                        Title:  CEO
__ Proprietorship                                -------------------------------
__ Other:                                        (Authorized officer, owner, or
         ---------------------                   partner)

                                           Date:  12/28/00
                                                --------------------------------

Signatures of Other
                           -----------------------------------------------------
Partners, Owners, or
                           -----------------------------------------------------
Shareholders:
                           -----------------------------------------------------

Signatures                 /s/ Ronald D. Offutt
                           -----------------------------------------------------
of Guarantors:
                           -----------------------------------------------------

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

Accepted:

John Deere Construction    By:  /s/ executed
                           ------------------------------------
Equipment Company          Title:  Manager, Finance Operations
                           ------------------------------------
Moline, IL  61265          Date:  12/28/2000
                           ------------------------------------

                                                                               5
<PAGE>

JOHN DEERE CONSTRUCTION EQUIPMENT COMPANY

AUTHORIZED CONSTRUCTION DEALER AGREEMENT

The Dealer identified below hereby applies to JDCEC for appointment as a JDCEC
Dealer for the area of responsibility designated in Exhibit 1. Dealer agrees
that the relationship between Dealer and JDCEC will be governed by the Terms of
Appointment set forth in this Agreement. When it executes this Agreement, JDCEC
accepts the Dealer's application and agrees to be bound by the Terms of
Appointment. This Agreement shall be effective upon execution by JDCEC and shall
as of that date supersede any prior John Deere Dealer Agreement between the
parties hereto (including without limitation any prior John Deere Industrial
Dealer Agreement between Dealer and John Deere Industrial Equipment Company).

Dealer (Firm Name):  RDO Construction Equipment Co.
                    ------------------------------------------------------------

Address:  3230 East Airport Freeway, Irving, TX  75062-4909
        ------------------------------------------------------------------------
X  Corporation
--
         __ C
         __ S
__ Limited Liability Company               By:  /s/ Ronald D. Offutt
__ Partnership                                ----------------------------------
         __ General
         __ Limited                        Title:  CEO
__ Proprietorship                                -------------------------------
__ Other:                                         (Authorized officer, owner, or
         ---------------------                     partner)

                                           Date:  12/28/00
                                                --------------------------------

Signatures of Other
                           -----------------------------------------------------
Partners, Owners, or
                           -----------------------------------------------------
Shareholders:
                           -----------------------------------------------------

Signatures                 /s/ Ronald D. Offutt
                           -----------------------------------------------------
of Guarantors:
                           -----------------------------------------------------

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

Accepted:

John Deere Construction    By:  /s/ executed
                           ------------------------------------
Equipment Company          Title:  Manager, Finance Operations
                           ------------------------------------
Moline, IL  61265          Date:  12/28/2000
                           ------------------------------------

                                                                               6
<PAGE>

JOHN DEERE CONSTRUCTION EQUIPMENT COMPANY

AUTHORIZED CONSTRUCTION DEALER AGREEMENT

The Dealer identified below hereby applies to JDCEC for appointment as a JDCEC
Dealer for the area of responsibility designated in Exhibit 1. Dealer agrees
that the relationship between Dealer and JDCEC will be governed by the Terms of
Appointment set forth in this Agreement. When it executes this Agreement, JDCEC
accepts the Dealer's application and agrees to be bound by the Terms of
Appointment. This Agreement shall be effective upon execution by JDCEC and shall
as of that date supersede any prior John Deere Dealer Agreement between the
parties hereto (including without limitation any prior John Deere Industrial
Dealer Agreement between Dealer and John Deere Industrial Equipment Company).

Dealer (Firm Name):  RDO Construction Equipment Co.
                    -----------------------------------------------------------

Address:  12500 Dupont Avenue South, Burnsville, MN  55337-1604
        -----------------------------------------------------------------------
X  Corporation
--
         __ C
         __ S
__ Limited Liability Company               By:  /s/ Ronald D. Offutt
__ Partnership                                ----------------------------------
         __ General
         __ Limited                        Title:  CEO
__ Proprietorship                                -------------------------------
__ Other:                                        (Authorized officer, owner, or
         ---------------------                   partner)

                                           Date:  12/28/00
                                                --------------------------------

Signatures of Other
                           -----------------------------------------------------
Partners, Owners, or
                           -----------------------------------------------------
Shareholders:
                           -----------------------------------------------------

Signatures                 /s/ Ronald D. Offutt
                           -----------------------------------------------------
of Guarantors:
                           -----------------------------------------------------

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

Accepted:

John Deere Construction    By:  /s/ executed
                           ------------------------------------
Equipment Company          Title:  Manager, Finance Operations
                           ------------------------------------
Moline, IL  61265          Date:  12/28/2000
                           ------------------------------------

                                                                               7

<PAGE>

TERMS OF APPOINTMENT

Preamble

JDCEC and Dealer acknowledge that the ultimate objective to which each party
will strive is the satisfaction of the customer. Satisfaction of customers
results from providing quality products and excellent product support and
otherwise exceeding customers' needs and expectations. JDCEC relies on Dealer to
promote aggressively the sale, lease, and rental of Goods in Dealer's AOR and to
provide a level of service and support of Goods that exceeds customers' needs
and expectations. The environment necessary for achieving the mutual objectives
of Dealer and JDCEC is enhanced by a relationship between JDCEC and Dealer that
is based on cooperation, mutual respect, and a commitment to continuous
improvement.

The Terms of Appointment set forth in this Agreement are necessary to ensure
that:

-    the Goods are actively and aggressively promoted by Dealer for sale, lease,
     and rental to customers and prospective customers in Dealer's AOR in order
     to achieve the Market Share Performance Standards;

-    the Goods are supported by Dealer in a prompt and effective manner in order
     to achieve a high level of customer acceptance; and

-    customers' needs are anticipated and met faster, better, and more
     consistently by Dealer than they are by the competition.

Dealer and JDCEC agree as follows:

1.   Provisions of Appointment

     During the period of Dealer's appointment as a JDCEC Dealer, the following
     provisions shall apply:

      a)   Dealer's AOR

      In authorizing Dealer to distribute Goods, JDCEC is relying on Dealer to
           effectively market Goods against competing products in Dealer's AOR
           and to enhance the reputation JDCEC and its dealer organization have
           developed over many years. Achieving a high degree of customer
           satisfaction in Dealer's AOR requires that Dealer concentrate its
           efforts in Dealer's AOR.

           i)   Dealer is assigned Dealer's AOR for the purpose of marketing,
                servicing, and supporting Goods. Dealer's AOR is not an
                exclusive territory. JDCEC and others may market, service, and
                support Goods in Dealer's AOR. Without limiting the foregoing,
                JDCEC may sell, loan, lease, or rent Goods, without restriction
                or limitation, to any person or entity, including without
                limitation:

                a)  federal, state, and local governments;

                b)  accounts classified by JDCEC as direct or national accounts;

                c)  purchasers for export;

                d)  educational institutions;

                                                                               8
<PAGE>

                e)  competitors of JDCEC;

                f)  equipment manufacturers; and

                g)  employees of JDCEC.

           ii)  JDCEC may assign all or any portion of Dealer's AOR to other
                persons or entities for the purpose of marketing, servicing, and
                supporting products other than Goods. Such an assignment may
                include Parts.

           iii) Dealer will concentrate its efforts in Dealer's AOR.

           iv)  JDCEC shall have no obligation to support, through its programs
                or other forms of dealer support, activities of Dealer outside
                Dealer's AOR, and JDCEC may exclude activities of Dealer outside
                Dealer's AOR from JDCEC's programs and other forms of dealer
                support.

           v)   Whenever a sale, lease, or rental of Whole Goods by Dealer is
                subject to JDCEC's AOR service fee policy, as in effect from
                time to time, Dealer will pay a service fee in accordance with
                the terms of JDCEC's service fee bulletin in effect when the
                sale, lease, or rental occurs.

      b)   Locations; Other Product Lines

      The authorized Dealer locations specified in Exhibit 3 are necessary to
           ensure (1) superior product support, (2) aggressive sales, leasing,
           and rental coverage of Dealer's AOR, and (3) a high degree of
           customer satisfaction. Locations may need to be added, relocated, or
           discontinued in the future to meet changing market needs.

           i)   Dealer will maintain JDCEC dealership operations at each
                location listed in Exhibit 3 for the purposes specified in
                Exhibit 3. Dealer will not open any new Dealer location,
                relocate or discontinue a Dealer location, or change the
                purposes of a Dealer location without obtaining JDCEC's prior
                written approval. Dealer and Affiliates will not, either
                directly or indirectly, establish, maintain, or operate at any
                other location a place of business of any kind where (or from
                which) any Goods are displayed, sold, leased, rented, or
                serviced.

           ii)  Neither Dealer nor any Affiliate will sell, lease, or rent parts
                or whole goods that compete with JDCEC's products. Dealer will
                separate, in a manner acceptable to JDCEC, other business
                activities and/or product lines from Dealer's JDCEC dealership
                operations if, in JDCEC's sole discretion, such activities
                and/or product lines are likely to detract from Dealer's
                representation of JDCEC's products. Dealer and Affiliates will
                not open any new location or relocate a location where Dealer or
                an Affiliate engages in the sale, lease, rental, or servicing of
                construction, utility, or forestry equipment (or parts for such
                equipment) other than Goods, or in a related business, without
                obtaining JDCEC's prior written approval.

           iii) To ensure compliance with this Section 1.b., Dealer and
                Affiliates will permit JDCEC to inspect, during normal business
                hours, all locations of Dealer and any

                                                                               9
<PAGE>

                Affiliate engaged in the sale, lease, rental, or servicing of
                equipment or vehicles (or parts for equipment or vehicles), or
                in a related business.

      c)   Dealer's Business Plans and Promotional Efforts; Achievement of
           Meaningful Progress and the Performance Standards

      The reputation and mutual success of JDCEC and JDCEC Dealers depend to a
           large degree upon how effectively each JDCEC Dealer conducts its
           operations.

           i)   Each year, by the date specified by JDCEC, Dealer will submit
                and secure JDCEC's approval of a business plan covering one or,
                if requested by JDCEC, more years and containing, for each year
                covered by the plan:

                a)    an objective for each Performance Criterion that
                      represents, at a minimum, Meaningful Progress for the
                      Performance Criterion;

                b)    action plans designed to achieve the Performance Criteria
                      objectives specified in the plan and, within a reasonable
                      period of time, the Performance Standards; and

                c)    such other elements as JDCEC may request of JDCEC
                      Dealers generally.

           Dealer may base its business plan on the calendar year or on Dealer's
                fiscal year, provided all periods are covered by a Dealer
                business plan approved by JDCEC.

           ii)  Dealer will actively and aggressively promote the sale, lease,
                and rental of Whole Goods. Dealer's compliance with this
                commitment will be evaluated based on performance in Dealer's
                AOR and not on performance outside Dealer's AOR.

           Dealer will maintain:

                a)    highly qualified management and sales personnel;

                b)    sales training and personnel development programs;

                c)    inventories of Whole Goods and related attachments
                      available for demonstration, sale, lease, and rental;
                      and

                d)    sales facilities

           that in each case are sufficient to achieve the Performance Criteria
                objectives contained in Dealer's JDCEC-approved business plans
                and, within a reasonable period of time, the Performance
                Standards.

           iii) Dealer will actively and aggressively promote the sale of Parts
                and services. Dealer's compliance with this commitment will be
                evaluated based on performance in Dealer's AOR and not on
                performance outside Dealer's AOR.

           Dealer will maintain:

                a)    highly qualified parts and service personnel;

                b)    parts sales and service training and personnel development
                      programs;

                c)    inventories of Parts;

                                                                              10
<PAGE>

                d)    service equipment, field service vehicles, and tools; and

                e)    parts and service facilities

           that in each case are sufficient to achieve the Performance Criteria
                objectives contained in Dealer's JDCEC-approved business plans
                and, within a reasonable period of time, the Performance
                Standards.

           iv)  Dealer will achieve Meaningful Progress with respect to each
                Performance Criterion in each fiscal or calendar year (whichever
                is used as the basis for Dealer's JDCEC-approved business
                plans). In addition, Dealer will, within a reasonable period of
                time, achieve the Performance Standards. Dealer's compliance
                with these commitments will be evaluated based on performance in
                Dealer's AOR and not on performance outside Dealer's AOR.

d)       Preparation of Goods, Warranty, and Post-Delivery Service

           i)   The Manual and/or bulletins issued from time to time by JDCEC
                designate the JDCEC Warranties. In making sales, leases, and
                rentals of Goods, Dealer will follow instructions contained in
                the Manual and JDCEC's bulletins and will complete with true and
                accurate information the retail purchase orders, delivery
                receipts, lease agreements, and other forms specified therein.
                Dealer will be solely responsible for any warranties given by
                Dealer that exceed the applicable JDCEC Warranty, if any, and
                for any liability in cases where Dealer has failed to use the
                forms prescribed by JDCEC in the manner specified by JDCEC.

           ii)  To ensure the proper operation of Goods, Dealer will properly
                assemble and prepare all Goods sold, leased, or rented by Dealer
                and will perform such inspections, adjustments, and service
                prior to delivery to users as are required in the Manual. Dealer
                will instruct users in the proper use and maintenance of Goods
                and will furnish each user with the appropriate operator's
                manuals furnished by JDCEC. Dealer will also perform the
                post-delivery inspections and adjustments prescribed for Goods
                in the Manual.

           iii) Dealer is authorized to and will perform prompt and effective
                warranty service on Goods in Dealer's AOR for which JDCEC
                becomes obligated pursuant to a JDCEC Warranty, including
                without limitation Goods not sold, leased, or rented by Dealer,
                if presented with proper evidence that the Goods are entitled to
                warranty service under a JDCEC Warranty.

           iv)  Dealer will perform prompt and effective non-warranty service on
                Goods in Dealer's AOR, including without limitation Goods not
                sold, leased, or rented by Dealer.

           v)   Dealer will perform product improvement programs that JDCEC may
                from time to time require for Goods in Dealer's AOR, including
                without limitation Goods not sold, leased, or rented by Dealer.
                Dealer will complete such programs as expeditiously as possible,
                and in any event within the time frame specified by JDCEC.

                                                                              11
<PAGE>

           vi)  Dealer will perform warranty service and product improvement
                programs in the manner and for the compensation specified in the
                Manual in effect at the time the service or program is
                performed. Dealer will notify JDCEC of all warranty and product
                improvement program claims in accordance with the Manual.

      e)   Sales to Re-sellers

      Dealer will not sell Goods to any person or entity that re-sells or
           intends to re-sell such Goods, provided, however, that this Section
           1.e. shall not prevent Dealer from:

           i)   selling Parts to a person or entity in Dealer's AOR that uses
                such Parts in providing repair or maintenance services in
                Dealer's AOR for products owned by others;

           ii)  selling Used Goods to a person or entity that is engaged in the
                business of selling used equipment;

           iii) selling Goods to ERS;

           iv)  selling Goods to another JDCEC Dealer;

           v)   selling Goods to a person or entity that is primarily engaged in
                the business of renting equipment to end users.

      f)   Equity

           i)   Dealer will maintain its Equity at a level sufficient to achieve
                Dealer's commitments under this Agreement, which shall be not
                less than the Minimum Equity Level.

           ii)  Dealer will not pay any dividends, effect any stock repurchase,
                repay or otherwise discharge its indebtedness for any loans from
                its owners, or make any other distributions to owners if
                Dealer's Equity is below the Equity Performance Standard or
                would fall below the Equity Performance Standard as a result of
                such action. If Dealer is a subchapter S corporation or similar
                entity, Dealer may make a distribution to a shareholder, without
                regard to the preceding sentence, in an amount equal to the
                income tax owed by the shareholder as a result of Dealer's
                dealership operations.

           iii) Dealer will not make any acquisitions or initiate new business
                activities if Dealer's Equity is below the Equity Performance
                Standard or would fall below the Equity Performance Standard as
                a result of such action.

      If the financial statement of another entity or a combination of
           entities is used for the purpose of calculating Dealer's Equity,
           Section 1.f.i. will apply to that entity or combination as well as to
           Dealer.

      g)   JDCEC's Acceptance of Orders

      JDCEC will accept orders placed by Dealer for Goods that JDCEC
           contemplates will be shipped during the period of Dealer's
           appointment as a JDCEC Dealer. JDCEC shall have no liability for
           delay, failure, or refusal to accept Dealer's orders or to ship Goods
           to Dealer if the delay, failure, or refusal results from:

                                                                              12
<PAGE>

           i)   capacity constraints, demand in excess of available supply,
                labor strikes or lockouts; or

           ii)  a default under a security agreement between Dealer and JDCEC;
                or

           iii) termination of Dealer's appointment; or

           iv)  any cause beyond JDCEC's control; or

           v)   JDCEC's determination, in its sole discretion, that:

                a)    Dealer's financial condition does not justify the
                      extension of additional credit or the addition of
                      inventory; or

                b)    limitations in Dealer's market potential, marketing
                      capabilities, or product support capabilities for the
                      particular Goods involved are likely to lead to customer
                      dissatisfaction with the Goods or excessive warranty
                      expense; or

                c)    Dealer has consistently failed to perform its obligations
                      under this Agreement; or

                d)    Dealer's inventory of Goods is excessive or with
                      additional shipments would become excessive, or shipment
                      would result in larger JDCEC Dealer inventories than JDCEC
                      is willing to finance; or

                e)    shipment would result in larger JDCEC Dealer inventories
                      than warranted based on expected market demand.

      All orders, sales, and shipments will be governed by the Conditions of
           Sale in effect at the time the order is placed.

      h)   Availability of JDCEC Programs

           i)   JDCEC will make available to Dealer finance plans, lease plans,
                floor plans, and parts return programs (and other similar
                financing or inventory management plans or programs) comparable
                to such plans and programs that JDCEC makes available to JDCEC
                Dealers generally. Such plans and programs may contain
                conditions for eligibility, and such plans and programs may have
                varying terms depending on certain dealer financial or
                performance criteria or market conditions.

           ii)  JDCEC may make available to any JDCEC Dealer marketing programs
                that JDCEC deems necessary to compete in the AOR assigned to
                that JDCEC Dealer without obligating JDCEC to make similar
                programs available to any other JDCEC Dealer or to JDCEC Dealers
                generally.

      i)   Changes in Dealer Ownership or Business Structure

      Any change in the ownership, management, or business structure of Dealer
           could have serious negative consequences for Dealer and JDCEC. JDCEC
           considers the Key Persons to be particularly vital to Dealer and to a
           successful working relationship between JDCEC and Dealer.

           i)   No change in the ownership or business structure of Dealer or
                any Key Person will occur unless JDCEC has given its prior
                written approval of such change. No event

                                                                              13
<PAGE>

                that would eliminate or materially alter the ownership interest
                in or relationship to Dealer, or the role in Dealer's affairs,
                of any Key Person will occur unless JDCEC has given its prior
                written approval of such event.

           ii)  Dealer will execute such agreements or other documents as JDCEC
                may deem necessary to preserve JDCEC's rights under this
                Agreement or any other agreement between Dealer and JDCEC in
                light of a change or proposed change in Dealer's ownership,
                management, or business structure.

           iii) If Dealer wishes to sell its business or substantially all of
                the assets of its business (excluding Dealer's JDCEC Dealer
                appointment and this Agreement, which are not transferable by
                Dealer), Dealer will notify JDCEC before the beginning of any
                discussions or negotiations pertaining to the proposed sale.
                After giving such notice, Dealer may enter into negotiations to
                sell its business or assets (excluding Dealer's JDCEC Dealer
                appointment and this Agreement) to a third party. JDCEC retains
                at all times the right to decide, in its sole discretion,
                whether to appoint any third party as a JDCEC Dealer for
                Dealer's AOR, for any portion thereof, or for any other area.

          For purposes of this Agreement, a change in business structure shall
          include, without limitation, a change in the legal form of Dealer
          (e.g. from partnership to corporation); a change in the legal form of
          any Key Person or of any entity that holds, directly or indirectly, a
          10% or greater interest in Dealer; a merger or consolidation involving
          Dealer; the creation of a subsidiary, partnership, or other legal
          entity by Dealer; and any other change that may affect any right or
          obligation under this Agreement or any other agreement between Dealer
          and JDCEC.

    j)    Financial Statements

          Dealer will provide to JDCEC annual financial statements for Dealer,
          for any entity or combination of entities that JDCEC may designate
          pursuant to the next paragraph, and for such Affiliates as JDCEC may
          from time to time request within 100 days after Dealer's fiscal
          year-end (or, for another entity or combination of entities, or for an
          Affiliate, within 100 days after such entity, combination, or
          Affiliate's fiscal year-end). Such financial statements shall have
          been prepared in accordance with generally accepted accounting
          principles and audited by an independent certified public accountant
          approved by JDCEC, which approval shall not be unreasonably withheld.
          Dealer also will provide to JDCEC financial statements, prepared in
          accordance with the Financial Information System, for each calendar
          month by the end of the following month. Dealer also will provide such
          other financial data of Dealer and Affiliates as JDCEC may from time
          to time request.

          JDCEC will, in its sole discretion:

          i)      designate, before the beginning of each of Dealer's fiscal
                  years, the particular entity or combination of entities whose
                  financial statements JDCEC will use to determine Dealer's
                  Equity for purposes of Sections 1.f. and 2.c.ii., provided,
                  however, that JDCEC may amend its designation for a particular
                  fiscal year if

                                                                              14
<PAGE>

                  Dealer, the designated entity or combination, or an Affiliate
                  undergoes a change in ownership or business structure prior to
                  the end of that fiscal year; and

          ii)     describe in the Terms Schedule the adjustments to the
                  financial statement data that JDCEC may make in determining
                  Dealer's Equity. The adjustments JDCEC may make in determining
                  Equity from a particular financial statement shall be those
                  described in the Terms Schedule in effect on the date that
                  financial statement is received in JDCEC's Finance Department
                  offices in Moline, Illinois.

2.       Termination of Dealer's Appointment

         a)       Termination by Mutual Consent

                  Dealer's appointment may be terminated by the mutual consent
                  of Dealer and JDCEC, evidenced by a writing signed by Dealer
                  and JDCEC, with the effective date of such termination to be
                  as mutually agreed upon in writing.

         b)       Termination by Dealer

                  Dealer may terminate its appointment for any reason upon at
                  least 180 days' prior written notice to JDCEC.

         c)       Termination by JDCEC

                  i)       JDCEC may terminate Dealer's appointment, upon at
                           least 180 days' prior written notice to Dealer, in
                           the event:

                           a)       Dealer fails to achieve Meaningful Progress
                                    with respect to a Performance Criterion in
                                    any fiscal or calendar year (whichever is
                                    used as the basis for Dealer's
                                    JDCEC-approved business plans); or

                           b)       Dealer or any Affiliate fails to comply with
                                    any material provision of this Agreement.

                           JDCEC may exercise its termination right under this
                           Section 2.c.i. with respect to all or any portion of
                           Dealer's AOR, and with respect to all or any portion
                           of the Goods, as JDCEC may determine in its sole
                           discretion.

                           JDCEC may exercise its termination right under this
                           Section 2.c.i. without regard to the performance of
                           other JDCEC Dealers or to the circumstances under
                           which JDCEC has terminated or refrained from
                           terminating the appointment of other JDCEC Dealers.

                  ii)      JDCEC may terminate Dealer's appointment, upon at
                           least 120 days' prior written notice to Dealer, if
                           JDCEC determines that Dealer's Equity is less than
                           the Minimum Equity Level. JDCEC will give Dealer
                           written notice of termination under this section
                           2.c.ii. within 45 days after the financial statement
                           involved is received at JDCEC's Finance Department
                           offices in Moline, Illinois. If Dealer provided the
                           financial statement to JDCEC within the time required
                           by Section 1.j., Dealer will have the right to
                           increase its Equity to the Minimum Equity Level,
                           during the 120-day notice period, through the
                           addition of new capital in a form acceptable to

                                                                              15
<PAGE>

                           JDCEC; if Dealer does increase its Equity to the
                           Minimum Equity Level in this manner within such
                           120-day period, the notice of termination given under
                           this Section 2.c.ii. shall become null and void.
                           JDCEC's prior written approval will be required if
                           Dealer wishes to increase its Equity to the Minimum
                           Equity Level in whole or in part by any other means,
                           including without limitation reducing its asset
                           levels or through earnings retained during the
                           120-day notice period. If dealer did not provide the
                           financial statement involved to JDCEC within the time
                           required by Section 1.j., Dealer will be deemed to
                           have waived any right to increase its Equity to the
                           Minimum Equity Level.

                  iii)     JDCEC may terminate Dealer's appointment, upon at
                           least 365 days' prior written notice to Dealer, if
                           JDCEC determines, in JDCEC's sole discretion, that
                           Dealer's AOR does not justify the continuation of a
                           JDCEC Dealer assigned only Dealer's AOR. If Dealer's
                           appointment is terminated under this Section
                           2.c.iii., Dealer shall have, for a period of three
                           years commencing with the effective date of
                           termination, a right of first refusal to be
                           re-appointed as a JDCEC Dealer for Dealer's AOR if in
                           that period JDCEC determines that Dealer's AOR does
                           justify a JDCEC Dealer assigned only Dealer's AOR.
                           However, such right of first refusal shall terminate
                           upon a breach by Dealer of any agreement with JDCEC
                           or any of JDCEC's Affiliates, or if Dealer would not
                           satisfy the Equity Performance Standard at the time
                           of reappointment.

                  iv)      JDCEC may terminate Dealer's appointment, effective
                           immediately, by giving written notice of termination
                           to Dealer at any time after the happening of any of
                           the following:

                           a)       the death, incapacity, or dissolution of any
                                    Key Person;

                           b)       a default under any security agreement
                                    between Dealer and JDCEC;

                           c)       any noncompliance with Section 1.b., Section
                                    1.c.i., Section 1.i.i., or Section 1.j.;

                           d)       Dealer defrauds anyone, including without
                                    limitation JDCEC, or misrepresents any
                                    material fact in any communication with or
                                    submission to JDCEC;

                           e)       the cancellation, discontinuance, or
                                    revocation of a guaranty or letter of credit
                                    applicable to Dealer indebtedness, or a
                                    failure to modify the amount of such a
                                    guaranty or letter of credit when and as
                                    requested by JDCEC or Deere Credit, Inc.;

                           f)       Dealer substantially closes the dealership
                                    business;

                           g)       Dealer intentionally fails to comply with
                                    any applicable federal, state, or local law,
                                    regulation, or ordinance relating to the
                                    operation of the dealership; or

                                                                              16
<PAGE>

                           h)       Dealer attempts to assign its right or
                                    obligations under this Agreement.

3.       Effect of Termination of Appointment

         Termination of Dealer's appointment hereunder means that the
         obligations and duties of the parties under Section 1 no longer apply,
         and that JDCEC may decline to fill accepted orders placed before such
         termination. Orders from Dealer that JDCEC contemplates will be shipped
         after the effective date of termination may be accepted in JDCEC's sole
         discretion. Such orders will be subject to the Conditions of Sale in
         effect at the time the order is placed or to such other conditions that
         JDCEC may prescribe. Submission or acceptance of orders and shipment or
         acceptance of Goods does not have the effect of renewing or reinstating
         the obligations of Section 1 and shall not be construed as an extension
         or renewal of Dealer's appointment or as a rescission of any notice of
         termination. If Dealer's appointment is terminated, neither Dealer,
         Affiliates, or JDCEC shall be entitled to any compensation or
         reimbursement for loss of prospective profits, anticipated sales, or
         other losses occasioned by the termination, except as provided in this
         Agreement.

4.       Repurchase of Goods on Termination

         Upon termination of Dealer's appointment, JDCEC will buy and Dealer
         will sell (or, with respect to JDM products, may sell subject to
         Section 4.c.), free and clear of all liens and encumbrances, the
         following Goods, provided they were originally purchased by Dealer from
         JDCEC (or from another JDCEC Dealer with the written approval of JDCEC)
         and are listed in JDCEC's published price list in effect on the
         effective date of termination of Dealer's appointment, according to the
         following terms:

         a)       All unsold current Whole Goods and attachments in Dealer's
                  possession that are new, unused, complete, and in good
                  condition. The prices to be paid for such items will be the
                  invoice prices (but not more than current JDCEC Dealer prices)
                  plus freight from the factory to Dealer's location, less any
                  discounts from invoice price that have been allowed, and less
                  any reduction in value that may be required due to
                  deterioration.

         b)       All unsold current Parts in Dealer's possession that are new,
                  unused, complete, in good condition, and re-salable as new
                  without repackaging or reconditioning. The prices to be paid
                  for such items will be JDCEC's then-current wholesale price,
                  as listed in the John Deere Parts Price List in effect on the
                  effective date of termination, less a discount of:

                  i)       15% on items listed as returnable under JDCEC's
                           then-current parts return policy; and

                  ii)      50% on all other items.

      c)   Such unsold current JDM products in Dealer's possession that Dealer
           may elect to sell to JDCEC and that are new, unused, complete, in
           good condition, and re-salable as new without repackaging or
           reconditioning. JDCEC shall have no obligation to repurchase such
           products unless Dealer furnishes JDCEC with a list of the products
           that it wishes to

                                                                              17
<PAGE>

           sell to JDCEC within thirty days after the effective date of the
           termination of Dealer's appointment. The price to be paid for such
           products will be the then-current wholesale price, as listed in the
           JDM Price List in effect on the effective date of termination, less a
           discount of:

           i)   50% on products identified by an asterisk in the JDM Price List;

           ii)  15% on items listed as returnable under JDCEC's then-current
                parts return policy; and

           iii) 25% on all other JDM products.

At the written request of JDCEC, Dealer will, at Dealer's expense, list, tag,
      pack, load, and transport all repurchased Goods to the nearest location
      regularly maintained by JDCEC for the storage of such Goods (or to such
      closer location as may be designated by JDCEC) or pay for the cost of
      transportation to such location. The risk of loss shall be on Dealer until
      the vehicle transporting such Goods reaches the designated destination.
      Should Dealer fail to fulfill the above obligation within 60 days after
      JDCEC has requested that it do so, JDCEC or its designee may enter
      Dealer's premises, perform these duties, and charge Dealer's account for
      any expenses incurred in so doing.

Amounts payable to Dealer under this Section 4 will not be paid until Dealer has
      complied with all applicable laws governing bulk transfers of inventory.

JDCEC shall be relieved of its obligations under this Section 4 if a default
      occurs or has occurred under any security agreement between Dealer and
      JDCEC, and JDCEC elects to exercise its rights under such security
      agreement to take possession of the Goods.

JDCEC shall be relieved of its obligations under this Section 4 if Dealer has
      defrauded JDCEC or if Dealer misrepresents a material fact pertaining to
      the repurchase of Goods in any communication with or submission to JDCEC.

5.    Resolution of Disputes

Although Dealer and JDCEC are entering into this Agreement in a spirit of
      cooperation and mutual respect, it is possible that Disputes may arise.
      Dealer, Affiliates (including without limitation guarantors of Dealer),
      JDCEC, Deere Credit, Inc., and ERS agree that any Dispute shall be finally
      resolved by binding arbitration pursuant to the terms set forth in Exhibit
      5. The duty to arbitrate shall extend to any officer, employee,
      shareholder, principal, agent, partner, trustee (in bankruptcy or
      otherwise), or subsidiary of Dealer or an Affiliate as to any Dispute that
      is subject to this Section 5.

6.    Computer System

      a)   During the period of Dealer's appointment, Dealer will, at Dealer's
           expense:

         i)    install and maintain in good working order a computerized
               business system that is compatible with, and in communication
               with, the John Deere Network;

         ii)   maintain the hardware and software necessary to supply
               electronically to JDCEC (a) monthly trial balance information in
               accordance with the Financial Information System; (b) product
               delivery and warranty claim information in accordance with the

                                                                              18
<PAGE>

               Service Information System; and (c) such other information as
               JDCEC may from time to time request Dealer to submit
               electronically;

         iii)  conform to any modifications made to the John Deere Network
               (provided JDCEC gives Dealer at least 60 days' prior notice of
               the modification);

         iv)   input into the John Deere Network, in accordance with JDCEC's
               instructions, such information as Deere may from time to time
               request, and furnish such computer files and reports as JDCEC may
               from time to time request; and

         v)    pay all costs associated with Dealer's use of the John Deere
               Network, as well as all costs incurred in obtaining and
               maintaining Dealer's computerized business system and in
               communicating with the John Deere Network.

      b)   Dealer will keep confidential any information contained in the John
           Deere Network and not use such information for purposes unrelated to
           Dealer's dealership appointment hereunder.

      c)   JDCEC shall not be liable for any losses incurred by Dealer in
           connection with Dealer's computerized business system or the John
           Deere Network.

7.    Amendment of Agreement

This  Agreement cannot be altered or amended, or any of its provisions waived,
      on behalf of JDCEC except in a writing signed by a duly authorized officer
      of JDCEC. Dealer and JDCEC recognize that this Agreement does not have an
      expiration date. Because market and business practices and conditions are
      likely to change with the passage of time and such changes or other
      circumstances could necessitate a change in this Agreement, JDCEC may
      amend these Terms of Appointment at any time, without the consent of
      Dealer, if the same amendment is made to the Terms of Appointment of all
      other JDCEC Dealers whose dealer agreements are in the form of this
      Agreement and may be amended in this manner pursuant to applicable law.
      Any such amendment shall be made by issuance of a JDCEC Dealer bulletin or
      other written notice to such JDCEC Dealers and shall be effective on the
      date specified in the bulletin or other written notice, which date shall
      be at least 120 days following the date of such bulletin or other written
      notice.

8.    Use of Trademarks, Names, and Signs

JDCEC grants Dealer the non-exclusive right to use the Trademarks (including
      without limitation the JOHN DEERE trademark, the trademark comprising a
      leaping deer design within a frame, and the trademark comprising the
      leaping deer design and JOHN DEERE within a frame), during the period of
      Dealer's appointment, in connection with the advertising and sale of Goods
      bearing one or more of the Trademarks, and in connection with the
      providing of services by Dealer relating to the sale or servicing of Goods
      identified by the Trademarks. Such use of the Trademarks shall be in a
      manner and form approved by JDCEC. Dealer agrees not to use any of the
      Trademarks as part of Dealer's corporate or business name and to cease all
      use of the Trademarks if Dealer ceases to be a JDCEC Dealer, including
      without limitation the removal of all signs and distinctive identification
      from Dealer's premises and vehicles that might associate Dealer with
      JDCEC. Dealer also agrees not to sell or distribute any goods bearing any
      of the Trademarks, unless the goods

                                                                              19
<PAGE>

      originated from JDCEC, JDCEC's Affiliates, or licensees authorized to use
      the Trademarks on the goods. Dealer also agrees not to use the Trademarks
      to promote goods not originating from JDCEC, JDCEC's Affiliates, or their
      licensees.

9.    Assignment

This Agreement shall be binding upon and inure to the benefit of the successors
      and assigns of JDCEC and, to the extent the terms hereof bind or benefit
      Deere Credit, Inc. or ERS, their respective successors and assigns.
      Dealer's rights and obligations under this Agreement may not be assigned
      or transferred. Any attempt by Dealer to assign its rights or obligations
      under this Agreement shall be null and void.

10.   Changes in or Discontinuance of Goods

      a)   JDCEC may, at any time and without notice, make changes in or
           discontinue any Goods without incurring any liability.

      b)   This Agreement extends only to Goods. JDCEC reserves the right to
           offer any other products to selected JDCEC Dealers or others under
           existing or separate new agreements. As new products, other than
           those designated by JDCEC as direct successors of Goods, are
           developed, acquired, or marketed by JDCEC, they may or may not be
           added to the Goods covered under this Agreement.

11.   Dealer Guaranty

To the extent requested by JDCEC, Key Persons, Affiliates, and other partners
      in, or owners of, Dealer have executed or concurrently herewith will
      execute in favor of JDCEC one or more guaranties of Dealer's indebtedness
      to JDCEC. Dealer will obtain, and Key Persons, Affiliates, and other
      partners in, or owners of, Dealer will execute, such additional guaranties
      and amendments and additions to guaranties as JDCEC may from time to time
      request.

      For purposes of this Section 11 and Section 12, JDCEC shall include Deere
      Credit, Inc. in addition to John Deere Construction Equipment Company.

12.   Security in Goods

Dealer has executed or concurrently herewith will execute in favor of JDCEC one
      or more security agreements covering Dealer's inventory of Goods and
      certain other items. Dealer will execute such additional security
      agreements and financing statements, and amendments and additions thereto
      or to existing instruments, as JDCEC may from time to time request, in
      order that JDCEC may have at all times a first lien on Goods and other
      collateral securing Dealer's indebtedness to JDCEC.

13.   Relationship of the Parties

      a)   Dealer acknowledges that it is an independent retail merchant who
           purchases Goods for resale for the principal benefit of Dealer.
           Dealer further acknowledges and agrees that it is an independent
           contractor. In performing service work Dealer assumes full
           responsibility for such work. Dealer also acknowledges and agrees
           that it is not an employee, agent, representative, franchisee,
           partner, or joint venturer of or with JDCEC, has not paid and will
           not pay a franchise fee to JDCEC, and is free to operate its

                                                                              20
<PAGE>

           business in accordance with its independent business judgment,
           provided that such operation is in accordance with this Agreement
           and any other agreement between Dealer and JDCEC. Dealer has no
           authority to bind JDCEC by representations, statements, agreements,
           conduct, or in any manner whatsoever. JDCEC shall not be liable for
           any debts, accounts, obligations, or other liabilities of Dealer,
           its agents, employees, or representatives. It is expressly
           recognized that no fiduciary relationship exists between the
           parties.

      b)   Except as provided in Sections 5, 9, and 17, this Agreement is not
           enforceable by any third party and is not intended to benefit, or
           convey any rights to, anyone other than Dealer and JDCEC.

      c)   Dealer obtains no rights by virtue of this Agreement or its
           dealership appointment to acquire additional dealerships or to obtain
           additional dealership appointments or AOR assignments from JDCEC.

14.   Use of Price Lists, Catalogs, and Manuals

The Manual and any price lists, catalogs, and service manual pages furnished
      to Dealer by JDCEC must be kept in good condition and returned to JDCEC
      upon termination by either party of Dealer's appointment. If such items
      have been purchased by Dealer, JDCEC will repurchase them for the price
      paid. Dealer will not disclose, directly or indirectly, the contents of
      such price lists, catalogs, and service manual pages to a person or entity
      that is a competitor of JDCEC or Dealer.

15.   Advertising Material; Mailing Lists

      During the period of Dealer's appointment:

      a) JDCEC will furnish to Dealer, in quantities deemed appropriate by JDCEC
         for Dealer's AOR, promotional materials and printed advertising matter
         that JDCEC prepares for use by other JDCEC Dealers in connection with
         the sale, lease, rental, or servicing of Goods and that JDCEC deems
         appropriate for Dealer's AOR; and

      b) Dealer will (i) create, maintain, and keep current a list of the names
         and addresses of all purchasers and prospective purchasers of Goods in
         Dealer's AOR, (ii) provide JDCEC with the current list, and (iii)
         promptly notify JDCEC of all changes to the list.

      The list contemplated by Section 15.b. shall be the sole property of
      JDCEC. JDCEC may use the list at any time for any purpose it deems
      appropriate, provided, however, that JDCEC will advise Dealer in advance
      of any use it makes of the list (other than for the purpose of sending
      Dealer's direct mail solicitations to purchasers and prospective
      purchasers on the list) during the period of Dealer's appointment. Dealer
      will reimburse JDCEC for handling and postage expenses for all direct
      mailings made at Dealer's request to prospective purchasers in Dealer's
      AOR.

16.   No Waiver

The failure of JDCEC to take any action or require full and strict compliance
      with any provision of this Agreement or any provision of any agreement
      with other JDCEC Dealers shall not affect JDCEC's right to take any action
      or require full and strict compliance at any time

                                                                              21
<PAGE>

      prior or subsequent thereto and shall not constitute a waiver of a breach
      of the provision or nullify the effectiveness of such provision.

17.   Limitation on Damages; Jury Waiver; Time to Initiate Proceedings

      a)   No party to a Dispute shall be entitled to an award of multiple,
           punitive, or exemplary damages, or any damages excluded by, or in
           excess of any damage limitation expressed in, this Agreement.

      b)   Dealer, Affiliates (including without limitation guarantors of
           Dealer), JDCEC, Deere Credit, Inc., and ERS each hereby knowingly,
           voluntarily, and intentionally waive any right he, she, or it may
           have to a trial by jury in respect of any litigation pertaining to
           any Dispute, and each agrees not to request a jury in any such
           litigation.

      c)   No party to a Dispute may commence litigation or arbitration
           proceedings with respect to such Dispute more than one year after
           that party's cause of action accrues.

18.   Notices

In addition to other available means of giving notice, notices required or
      permitted under this Agreement (including without limitation notices in
      connection with any arbitration under Section 5) may be given to the
      person indicated on Exhibit 6, by personal delivery or by certified U.S.
      mail, Federal Express or other reputable overnight delivery service, or
      facsimile to the address or facsimile number indicated on Exhibit 6.
      Notices given by personal delivery shall be deemed given when delivered.
      Notices given by certified U.S. mail, reputable overnight delivery
      service, or facsimile shall be deemed given when sent.

19.   Governing Law

This Agreement shall be governed by and construed in accordance with the laws
      of the State of Illinois applicable to agreements made and performed
      entirely within Illinois and without regard to Illinois' conflict of laws
      rules.

20.   Severability

Any provision of this Agreement or portion thereof that is prohibited or
      unenforceable in any jurisdiction shall, as to such jurisdiction, be
      ineffective only to the extent of such prohibition or unenforceability
      without invalidating the remainder of the provision or the remaining
      provisions of this Agreement and without affecting the validity or
      enforceability of such provision in any other jurisdiction. Any provision
      herein found to be prohibited or unenforceable in a jurisdiction shall, by
      agreement of the parties hereto, be replaced for such jurisdiction by a
      provision that ensures that the economic and/or business objectives of the
      prohibited or unenforceable provision are preserved insofar as it is
      possible to do so under the applicable law in such jurisdiction.

21.   Payments on Termination

If Dealer's appointment hereunder is terminated, all indebtedness of Dealer
      to JDCEC which does not become due prior to the effective date of the
      termination will be due and payable as of the effective date of the
      termination. JDCEC may pay any sums owing to Dealer on termination
      (including without limitation any sums owing to Dealer for repurchased
      Goods) in cash or by giving Dealer credit to be applied to any
      indebtedness then owed by Dealer to

                                                                              22
<PAGE>

      JDCEC or to any of JDCEC's Affiliates, regardless of whether such
      indebtedness is then due and payable.

22.   Survival

The termination of Dealer's appointment shall not affect any rights or
      obligations that have accrued hereunder as of the effective date of such
      termination. Such termination also shall not affect any rights or
      obligations, except those expressly limited to the period of Dealer's
      appointment, under Sections 3, 4, 5, 6.b., 7, 8, 9, 10, 11, 12, 13, 14,
      15, 16, 17, 18, 19, 20, 21, 22, and 23, which rights and obligations,
      except those expressly limited to the period of Dealer's appointment,
      shall survive termination of Dealer's appointment.

23.   Entire Agreement

This Agreement is and shall be deemed to be the complete and final expression
      of the agreement between the parties as to the subject matters contained
      herein. This Agreement supersedes all previous dealer agreements and
      representations between the parties. It is acknowledged and agreed by
      Dealer and JDCEC that no promise or representation not contained herein
      (including without limitation Exhibit 7) was an inducement to either party
      or was relied on by either party in entering into this Agreement. Any
      prior or contemporaneous promises, agreements, or representations, whether
      oral, written, or created through custom, usage, or course of dealing,
      except for those listed on Exhibit 7, are also superseded by this
      Agreement. Dealer understands that, except as provided in Section 7, no
      agent or employee of JDCEC has authority to vary or add to the provisions
      of this Agreement, or to make any representation altering or going beyond
      the terms of this Agreement.

                                                                              23
<PAGE>

EXHIBIT 1 (ARIZONA)

DEALER'S AOR

Dealer's Area of Responsibility shall consist of the following counties:

State of ARIZONA

Counties:

Apache
Cochise
Coconino
Gila
Graham
Greenlee
La Paz
Maricopa
Mohave
Navajo
Pima
Pinal
Santa Cruz
Yavapai
Yuma

State of CALIFORNIA

Counties:

Imperial
Riverside
San Bernardino
San Diego

                                                                              24
<PAGE>

EXHIBIT 1 (TEXAS)

DEALER'S AOR

Dealer's Area of Responsibility shall consist of the following counties:

State of TEXAS

Counties:

Atascosa                                    Kendall
Bandera                                     Kerr
Bastrop                                     Kimball
Bell                                        Kinney
Bexar                                       LaSalle
Bosque                                      Lampasas
Burleson                                    Lavaca
Burnet                                      Lee
Caldwell                                    Leon
Collin                                      Limestone
Comal                                       Llano
Cooke                                       Mason
Coryell                                     Maverick
Dallas                                      McLennan
Denton                                      McMullen
DeWitt                                      Medina
Dimmit                                      Milam
Edwards                                     Mills
Ellis                                       Montague
Erath                                       Nayarro
Falls                                       Palo Pinto
Fannin                                      Parker
Fayette                                     Real
Freestone                                   Robertson
Frio                                        Rockwall
Gillespie                                   San Saba
Gonzales                                    Somervell
Grayson                                     Tarrant
Guadalupe                                   Travis
Hamilton                                    Uvalde
Hays                                        Washington
Hill                                        Webb
Hood                                        Williamson
Hunt                                        Wilson
Jack                                        Wise
Johnson                                     Young
Karnes                                      Zavala
Kaufman

                                                                              25

<PAGE>

EXHIBIT 1 (BURNSVILLE)

DEALER'S AOR

Dealer's Area of Responsibility shall consist of the following counties:

State of IOWA        Nobles            Fallon                  Cavalier
                     Norman            Fergus                  Dickey
Counties:            Olmstead          Gallatin                Divide
                     Otter Tail        Garfield                Dunn
Lyon                 Pennington        Glacier                 Eddy
                     Pipestone         Golden Valley           Emmons
                     Polk              Hill                    Foster
State of MINNESOTA   Pope              Judith Basin            Golden Valley
                     Ramsey            Liberty                 Grand Forks
Counties:            Red Lake          Madison                 Grant
                     Redwood           McCone                  Griggs
Anoka                Renville          Meagher                 Hettinger
Benton               Rice              Musselshell             Kidder
Big Stone            Rock              Park                    Lamoure
Blue Earth           Scott             Petroleum               Logan
Brown                Sherburne         Phillips                McHenry
Carver               Sibley            Pondera                 McIntosh
Chippewa             Stearns           Powder River            McKenzie
Chisago              Steele            Prairie                 McLean
Clay                 Stevens           Richland                Mercer
Cottonwood           Swift             Roosevelt               Morton
Dakota               Todd              Rosebud                 Mountrail
Dodge                Traverse          Sheridan                Nelson
Douglas              Wabasha           Stillwater              Oliver
Faribault            Waseca            Sweet Grass             Pembina
Fillmore             Washington        Teton                   Pierce
Freeborn             Watonwan          Toole                   Ramsey
Goodhue              Wilkin            Treasure                Ransom
Grant                Winona            Valley                  Renville
Hennepin             Wright            Wheatland               Richland
Houston              Yellow Medicine   Wibaux                  Rolette
Isanti                                 Yellowstone             Sargent
Jackson                                                        Sheridan
Kanabee              State of MONTANA                          Sioux
Kandiyohi                              State of NORTH DAKOTA   Slope
Kittson              Counties:                                 Stark
Lac Qui Parle                          Counties:               Steele
Le Sueur             Beaverhead                                Stutsman
Lincoln              Big Horn          Adams                   Towner
Lyon                 Blaine            Barnes                  Traill
Marshall             Broadwater        Benson                  Walsh
Martin               Carbon            Billings                Ward
McLeod               Carter            Bottineau               Wells
Meeker               Cascade           Bowman                  Williams
Mille Lacs           Chouteau          Burke
Morrison             Custer            Burleigh
Mower                Daniels           Cass
Murray               Dawson
Nicollet

                                                                              26
<PAGE>

State of SOUTH DAKOTA    Davison           Jerauld          Sanborn
                         Day               Jones            Shannon
Counties:                Deuel             Kingsbury        Spink
                         Dewey             Lake             Stanley
Aurora                   Douglas           Lawrence         Sully
Beadle                   Edmunds           Lincoln          Todd Tripp
Bennett                  Fall River        Lyman            Turner
Bon Homme                Faulk             Marshall         Walworth
Brookings                Grant             McCook           Yankton
Brown                    Gregory           McPherson        Ziebach
Brule                    Haakon            Meade
Buffalo                  Hamlin            Mellette
Butte                    Hand              Miner            State of WYOMING
Campbell                 Hanson            Minnehaha
Charles Mix              Harding           Moody            Counties:
Clark                    Hughes            Pennington
Codington                Hutchinson        Perkins          Crook
Corson                   Hyde              Potter           Weston
Custer                   Jackson           Roberts

                                                                              27
<PAGE>

EXHIBIT 2

A.  WHOLE GOODS

<TABLE>
<CAPTION>

Backhoes              Crawlers              4WD Loaders       Excavators            Motor Graders
<S>                   <C>                   <C>               <C>                   <C>
/X/  300              /X/  450              /X/  244          /X/  190              /X/  570

/X/  310              /X/  455              /X/  344          /X/  290              /X/  670

/X/  315              /X/  550              /X/  444          /X/  490              /X/  672

/X/  410              /X/  555              /X/  544          /X/  590              /X/  770

/X/  510              /X/  650              /X/  624          /X/  595              /X/  772

/X/  710              /X/  750              /X/  644          /X/  200

                      /X/  850              /X/  744          /X/  690

                                                              /X/  790

                                                              /X/  792

                                                              /X/  892

                                                              /X/  992

<CAPTION>

Skidders              Feller Bunchers       Scrapers          Forklifts             Landscape Loaders
<S>                   <C>                   <C>               <C>                   <C>
/X/  540              /X/  643              /X/  762          /X/  485              /X/  210

/X/  548              /X/  653              /X/  862          /X/  486

/X/  640              /X/  843                                /X/  488

/X/  648

/X/  740

/X/  748
</TABLE>

B.  PARTS

COMPETITIVE PARTS
<TABLE>
<S>                   <C>                   <C>               <C>
/X/  Bucket Teeth     /X/  Engine Parts     /X/  Filters      /X/  Undercarriage Products
/X/  Cutting Edges    /X/  All-Makes Parts  /X/  Oil          /X/  Re-manufactured Components
</TABLE>

                                                                              28
<PAGE>

EXHIBIT 3 (ARIZONA)

LOCATIONS

Address                                                 Purpose/Store Type
-------                                                 -------------------

2649 North 29th Avenue, Phoenix, AZ  85009              /X/  Whole Goods
--------------------------------------------------      /X/  Parts
                                                        /X/  Service
                                                        / /  Other _____________

5500 E. Penstock, Flagstaff, AZ  86004                  /X/  Whole Goods
------------------------------------------------------  /X/  Parts
                                                        /X/  Service
                                                        / /  Other _____________

3241 Tower Road, Prescott, AZ  86305-6708               /X/  Whole Goods Sales
------------------------------------------------------  /X/  Parts
                                                        /X/  Service
                                                        / /  Other _____________

3300 East Michigan Street, Tucson, AZ  85714            /X/  Whole Goods Sales
------------------------------------------------------  /X/  Parts
                                                        /X/  Service
                                                        / /  Other _____________

3050 East Highway 95, Yuma, AZ  85365                   /X/  Whole Goods Sales
------------------------------------------------------  /X/  Parts
                                                        /X/  Service
                                                        / /  Other _____________

3275 Highway 86, Imperial, CA  92251                    /X/  Whole Goods Sales
------------------------------------------------------  /X/  Parts
                                                        /X/  Service
                                                        / /  Other _____________

13625 Danielson Street, Poway, CA  92064-6829           /X/  Whole Goods Sales
------------------------------------------------------  /X/  Parts
                                                        /X/  Service
                                                        / /  Other _____________

20 Iowa Avenue, Riverside, CA  92507                    /X/  Whole Goods Sales
------------------------------------------------------  /X/  Parts
                                                        /X/  Service
                                                        / /  Other _____________

                                                                              29
<PAGE>

EXHIBIT 3 (TEXAS)

LOCATIONS

Address                                                 Purpose/Store Type
-------                                                 -------------------

3230 E. Airport Freeway, Irving, TX  75062-4909         /X/  Whole Goods
------------------------------------------------------  /X/  Parts
                                                        /X/  Service
                                                        / /  Other _____________

9024 NW Highway 287, Ft. Worth, TX  76177               /X/  Whole Goods
------------------------------------------------------  /X/  Parts
                                                        /X/  Service
                                                        / /  Other _____________

IH-35 South at EM2113, Hewitt, TX  76643                /X/  Whole Goods Sales
------------------------------------------------------  /X/  Parts
                                                        /X/  Service
                                                        / /  Other _____________

Highway 359 East, Laredo, TX  78043-9531                /X/  Whole Goods Sales
------------------------------------------------------  /X/  Parts
                                                        /X/  Service
                                                        / /  Other _____________

8000 Blue Goose Road, Manor, TX  78653-9722             /X/  Whole Goods Sales
------------------------------------------------------  /X/  Parts
                                                        /X/  Service
                                                        / /  Other _____________

5400 North IH 35, San Antonio, TX  78218-5100           /X/  Whole Goods Sales
------------------------------------------------------  /X/  Parts
                                                        /X/  Service
                                                        / /  Other _____________

                                                                              30
<PAGE>

EXHIBIT 3 (BURNSVILLE)

LOCATIONS

Address                                                 Purpose/Store Type
-------                                                 -------------------

12500 Dupont Avenue S., Burnsville, MN 55337-1604       /X/  Whole Goods
------------------------------------------------------  /X/  Parts
                                                        /X/  Service
                                                        / /  Other _____________

1740 E. College Drive, Marshall, MN  56258-2653         /X/  Whole Goods
------------------------------------------------------  /X/  Parts
                                                        /X/  Service
                                                        / /  Other _____________

1910 Lor Ray Drive, North Mankato, MN  56003-1229       /X/  Whole Goods Sales
------------------------------------------------------  /X/  Parts
                                                        /X/  Service
                                                        / /  Other _____________

1328 60th Avenue NW, Rochester, MN  55901               /X/  Whole Goods Sales
------------------------------------------------------  /X/  Parts
                                                        /X/  Service
                                                        / /  Other _____________

6700 Highway 10 NW, Sauk Rapids, MN  56379              /X/  Whole Goods Sales
------------------------------------------------------  /X/  Parts
                                                        /X/  Service
                                                        / /  Other _____________

2000 Industrial Drive, Bismarck, ND  58502              /X/  Whole Goods Sales
------------------------------------------------------  /X/  Parts
                                                        /X/  Service
                                                        / /  Other _____________

4320 Main Avenue, Fargo, ND  58103-1003                 /X/  Whole Goods Sales
------------------------------------------------------  /X/  Parts
                                                        /X/  Service
                                                        / /  Other _____________

6565 Gateway Drive, Grand Forks, ND  58203-1003         /X/  Whole Goods Sales
------------------------------------------------------  /X/  Parts
                                                        /X/  Service
                                                        / /  Other _____________

                                                                              31
<PAGE>

Locations (cont'd)

Address                                                 Purpose/Store Type
-------                                                 -------------------

Highway 83 South, Minot, ND  58701                      /X/  Whole Goods Sales
------------------------------------------------------  /X/  Parts
                                                        /X/  Service
                                                        / /  Other _____________

3901 East Highway 12, Aberdeen, SD  57402               /X/  Whole Goods Sales
------------------------------------------------------  /X/  Parts
                                                        /X/  Service
                                                        / /  Other _____________

1540 Deadwood Avenue, Rapid City, SD  57702-0164        /X/  Whole Goods Sales
------------------------------------------------------  /X/  Parts
                                                        /X/  Service
                                                        / /  Other _____________

2801 N. Louise Avenue, Sioux Falls, SD  57107-0164      /X/  Whole Goods Sales
------------------------------------------------------  /X/  Parts
                                                        /X/  Service
                                                        / /  Other _____________

5221 Midland Road, Billings, MT  59107-0164             /X/  Whole Goods Sales
------------------------------------------------------  /X/  Parts
                                                        /X/  Service
                                                        / /  Other _____________

4900 Tri Hill Frontage Rd., Great Falls, MT 59404-4937  /X/  Whole Goods Sales
------------------------------------------------------  /X/  Parts
                                                        /X/  Service
                                                        / /  Other _____________

                                                                              32
<PAGE>

EXHIBIT 4

KEY PERSONS

<TABLE>
<CAPTION>
                                                            RELATIONSHIP TO DEALER/
NAME                          OWNERSHIP INTEREST            ROLE IN DEALER'S AFFAIRS
----                          ------------------            ------------------------
<S>                           <C>                           <C>

Ronald D. Offutt              Shareholder of Dealer         Chairman

Gary L. Weihs                 N/A                           COO

Allan F. Knoll                N/A                           Secretary of Parent

Christi J. Offutt             N/A                           Sr. Vice President

RDO Equipment Company         Parent of Dealer              Parent of Dealer
</TABLE>

                                                                              33
<PAGE>

EXHIBIT 5

DISPUTE RESOLUTION

1.    If the parties to a Dispute agree, the Dispute will be submitted to
      non-binding mediation.

2.    If the parties to a Dispute do not agree to mediation of the Dispute, or
      if mediation does not resolve the Dispute, the Dispute shall be finally
      resolved by binding arbitration in accordance with the arbitration rules
      of JAMS/Endispute, as amended by this Exhibit. The party seeking
      arbitration shall submit a written notice of arbitration to the other
      party and to JAMS/Endispute. The arbitration shall be held at such
      location as required by applicable law or, if no location is required by
      applicable law, at Chicago, Illinois or such other city as the parties to
      the Dispute may agree in writing. The arbitration shall be held before a
      panel of three arbitrators each of whom is affiliated with JAMS/Endispute
      and is part of the pool of arbitrators selected by JAMS/Endispute as
      available to arbitrate Disputes. Each arbitrator in the pool shall:

      a)   be a current or former practicing attorney or former judge;

      b)   have at least fifteen years experience in litigation, arbitration,
           and/or mediation of commercial disputes;

      c)   have prior experience as an arbitrator (through award) of at least
           three manufacturer/dealer or franchisor/franchisee disputes; and

      d)   be recommended as a commercial arbitrator by at least two major
           manufacturers or franchisors and at least two dealers or franchisees.

      The arbitration panel shall consist of one arbitrator from the pool
      designated by Dealer, one arbitrator from the pool designated by JDCEC,
      and a third arbitrator from the pool designated by the other two
      arbitrators, which person shall be the Chairperson of the arbitration
      panel. A decision and award joined by at least two members of the
      arbitration panel shall constitute the award and shall be binding on the
      parties. The arbitration panel shall provide reasons for their decision
      and award, which shall be final and binding and may be entered by any
      court having jurisdiction thereof.

3.    Except as provided herein, any action or decision joined by two
      arbitrators from the arbitration panel shall constitute the action of the
      arbitration panel. The arbitration panel may consider and grant
      dispositive motions, including without limitation motions to dismiss or
      for summary judgment. In order to prevent irreparable harm, the
      arbitration panel may consider and grant requests for temporary or
      permanent injunctive relief or other equitable relief.

4.    Unless contrary to applicable law, this Agreement shall be interpreted in
      accordance with and the arbitration panel shall apply and be bound to
      follow the substantive laws of the State of Illinois. Where there is a
      conflict between the terms of this Agreement and the laws of the State of
      Illinois, the terms of this Agreement shall control.

                                                                              34
<PAGE>

5.    Each party shall bear its costs associated with the arbitration, including
      its attorneys' fees, and the parties shall share equally the fees and
      expenses of JAMS/Endispute and the arbitrators', provided, however, that
      if court proceedings to stay litigation, compel arbitration, or enforce
      the award are necessary, the party who unsuccessfully opposes such
      proceedings shall pay all associated costs, expenses, and attorneys' fees
      that are reasonably incurred by the other party.

6.    The Chairperson of the arbitration panel shall decide all matters relating
      to discovery as well as all procedural or non-dispositive matters that
      shall come before the arbitration panel. Subject to privileges recognized
      under applicable law, the Chairperson shall require such discovery as is
      necessary for the parties to be adequately prepared for the arbitration.
      Discovery may include the exchange of documents, depositions,
      interrogatories, and the exchange of exhibits, expert reports, and witness
      lists.

7.    The parties, witnesses, and arbitrator shall not disclose the contents or
      results of the arbitration without the prior written consent of all
      parties to the Dispute, except to the extent necessary to enforce the
      award or as necessary for financial and tax reporting purposes.

8.    Notwithstanding anything to the contrary in this Exhibit 5 or Section 5,
      in the event of an alleged violation of a party's intellectual property
      rights, that party may seek temporary injunctive relief from any court of
      competent jurisdiction pending appointment of the arbitrator. The party
      requesting such relief shall also promptly file a notice of arbitration
      and a request that the arbitrator provide temporary relief. Such actions
      shall not constitute a waiver of the party's rights or a breach of the
      party's obligations under this Exhibit 5 and Section 5. Any temporary
      injunctive relief entered by a court shall continue in effect only until
      the arbitration panel has issued a decision on temporary relief.

9.    Notwithstanding anything to the contrary in this Exhibit 5 or Section 5,
      JDCEC and Deere Credit, Inc. may seek judicial remedies, such as (but not
      limited to) attachment, replevin, and garnishment, deemed necessary by
      JDCEC or Deere Credit, Inc. in its sole discretion for the enforcement of
      JDCEC's or Deere Credit, Inc.'s rights regarding any security for
      indebtedness of Dealer, and such action by JDCEC or Deere Credit, Inc.
      shall not constitute a waiver of JDCEC's or Deere Credit, Inc.'s rights or
      a breach of JDCEC's or Deere Credit, Inc.'s obligations under this Exhibit
      5 and Section 5.

                                                                              35
<PAGE>

EXHIBIT 6

Notices

To Dealer or Affiliates:

RDO Construction Equipment Co.
---------------------------------------
2829 S. University Drive
---------------------------------------
Fargo, ND  58103-6029
---------------------------------------
facsimile:  (701) 239-8787
---------------------------------------

To JDCEC, Deere Credit, Inc., or ERS:

1515 5th Avenue
---------------------------------------
Moline, IL  61265
---------------------------------------

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

facsimile:  (309) 748-0123
---------------------------------------

Dealer or JDCEC may amend the addressee, address, or facsimile number indicated
for its group on this Exhibit 6 by giving written notice of such amendment to
the other party, provided, however, that no more than one addressee, address,
and facsimile number may be indicated at any given time.

                                                                              36

<PAGE>

EXHIBIT 7

PROMISES AND REPRESENTATIONS

RDO Construction Equipment Co. ("Dealer"), RDO Equipment Co, ("RDO"), Ronald D.
Offutt ("Offutt") and JDCEC agree that the following are the only promises,
agreements, or representations, oral, written, or created through custom, usage,
or course of dealing, not contained elsewhere in the Dealer Agreement to which
this Exhibit 7 is appended (the "Agreement") and that were an inducement to or
relied upon by any party hereto in entering into the Agreement or that were made
prior to or contemporaneous with this Agreement and are not superseded by the
Agreement:

1.   If after the date (the Acceptance Date) on which JDCEC executes the Dealer
     Agreement to which this Exhibit 7 is appended (the Agreement), JDCEC
     revises its U.S. John Deere Construction Equipment Dealer Agreement form
     and uses the form as revised for the appointment of new U.S. JDCEC Dealers
     generally (or in re-contracting with existing U.S. JDCEC Dealers
     generally), JDCEC will make the same revision to the Agreement so long as
     the revision in question is not inconsistent with any other agreement which
     JDCEC may hereafter enter into with Dealer but not with JDCEC Dealers
     generally.

2.   In lieu of Dealer's covenant, under Section 1.i.i. of the Agreement to
     which this Exhibit 7 is appended (the "Agreement"), that no change in the
     ownership of Dealer will occur unless JDCEC has given its prior written
     approval of such change, Dealer and Offutt covenant as follows:

    a. During Offutt's lifetime, Offutt will (1) own Dealer common stock
       representing at least 30% of the combined voting power of Dealer's
       outstanding securities ordinarily having the right to vote at elections
       of directors and (2) own Dealer common stock representing at least 30% of
       Dealer's shareholders' equity.

    b. "No "person" or "group" (as such terms are used in Section 13(d) of the
       Securities and Exchange Act of 1934, as amended and the rules and
       regulations promulgated thereunder)

<PAGE>

       other than Offutt and Offutt's legal representatives and heirs who
       receive Offutt's Dealer stock pursuant to Offutt's estate plan, including
       any trust as to which Offutt retained voting control over such shares of
       Dealer stock until his death, alone or in combination with the Associates
       (as defined below) of such person or group, will have or acquire
       ownership (including without limitation beneficial ownership, as
       determined under SEC rule 13d-3) or control of more than 20% of the
       combined voting power of Dealer's outstanding securities or 20% of
       Dealer's shareholders' equity, without JDCEC's prior written approval.
       For purposes of this Section 2.b., "Associate" shall mean, with respect
       to any person or entity, (1) a corporation or organization of which such
       person or entity is a director, officer or partner or is, directly or
       indirectly, the beneficial owner of 10 percent or more of any class of
       equity securities, (2) each other person or entity that directly or
       indirectly controls, is controlled by, or is under common control with
       such person or entity, (3) any trust, custodial account or other estate
       as to which such person or entity serves as trustee or in a similar
       fiduciary capacity, and (4) any relative or spouse of such person, or any
       relative of such spouse, who has the same home as such person or who is a
       director, officer or partner of such person of entity. For purposes of
       this definition, "control" of a person or entity shall mean the
       possession, directly or indirectly, of the power to direct or cause the
       direction of its management or policies, whether through the ownership of
       voting securities, by contract or otherwise."

    c. Offutt will not, as part of any private transaction, make a written offer
       or sell any shares of any class of stock of Dealer to a person or entity
       without prior written approval by JDCEC, provided that, in the event that
       Offutt enters into discussion for the sale of any of his shares, he shall
       advise JDCEC of the person or persons with whom such discussions are
       being undertaken. Offutt's receipt of solicitations from or exploratory
       conversations with third parties concerning the sale of any of his shares
       shall not constitute a "discussion" for purposes of this Section 2.c.
       However, Offutt may:

       (1) sell any of his shares in Dealer in broker's transactions, to market
           makers as contemplated by SEC Rule 144, or in an underwritten public
           offering; or

                                                                               2
<PAGE>

       (2)  permit the exercise of Dealer stock options granted by Offutt to
           Paul T. Horn and Allan F. Knoll prior to 1 October 1996

       as long as the sale or exercise of options does not result in a
       noncompliance with Section 2.a. or Section 2.b. above.

    d. Dealer will not, as part of any private transaction, offer or sell any
       shares of any class of stock of Dealer to a person or entity without
       prior written approval by JDCEC. However, Dealer may sell any Dealer
       shares in an underwritten public offering or in connection with stock
       options for employees of Dealer, as long as (1) for sales occurring
       during Offutt's lifetime, the sale does not result in a noncompliance
       with Section 2.a. above, (2) for sales occurring from Offutt's death
       forward, the sale does not result in a Change in Control (as defined
       below), and (3) for sales occurring at any time, the sale does not result
       in a noncompliance with Section 2.b. above.

    e. Dealer will promptly advise JDCEC whenever Dealer becomes aware that a
       shareholder owns or controls 5% or more of the outstanding shares of any
       class of stock of Dealer.

    f. From Offutt's death forward, no Change in Control will occur unless JDCEC
       has given its prior written approval of such Change in Control. Dealer
       will give JDCEC written notice immediately following any Change in
       Control. In addition, Dealer will give JDCEC advance written notice of
       any Change in Control which Dealer reasonably may anticipate; such
       advance written notice will be given when Dealer first determines that a
       Change in Control is reasonably likely to occur and shall describe in
       detail the transaction giving rise to such Change in Control, including
       identification of all persons and entities involved therein. JDCEC shall
       have the right to disapprove any Change in Control in its sole
       discretion.

    g. For purposes of this Exhibit 7,

       (1)  "Change in Control" means the occurrence of any of the following:

                                                                               3
<PAGE>

            (a)  Continuity Directors cease for any reason to constitute at
                 least a majority of Dealer's board of directors;

             b)  the appointment (whether as a result of a new hire, promotion,
                 reassignment, or otherwise), without JDCEC's prior approval, of
                 a new Chairman, Chief Executive Officer, President, Chief
                 Financial Officer, or Chief Operating Officer of Dealer, or of
                 a new Executive Vice-President of Dealer's Construction
                 Equipment Division or a new Regional Vice-President for any of
                 Dealer's regional construction equipment operations ("CESBUs").

       (2)  "Continuity Director" means any individual who is a member of
            Dealer's board of directors at the time of Offutt's death, while he
            or she is a member of the board, and any individual who
            subsequently becomes a member of Dealer's board whose election or
            nomination for election to the board was approved by a vote of at
            least a majority of the Dealer directors who are Continuity
            Directors (either by a specific vote or by approval of the proxy
            statement of Dealer in which such individual is named as a nominee
            for director without objection to such nomination).

3.  In lieu of JDCEC's right, under Section 2.c.iv.c. of the Agreement, to
    terminate Dealer's appointment in the event a change occurs in the ownership
    of Dealer without JDCEC's prior written approval, JDCEC will have the right
    to terminate Dealer's appointment, effective immediately, in the event of
    any noncompliance with Section 2 of this Exhibit 7.

4.  JDCEC will not exercise its right, under Section 2.c.iv.a. of the Agreement,
    to terminate Dealer's appointment, effective immediately, upon the death of
    Offutt if all of the following conditions are satisfied at the time of
    Offutt's death:

    a. Dealer has in place an ownership succession plan that has been approved
       in writing by JDCEC.

                                                                               4
<PAGE>

    b. Neither Dealer nor Offutt has breached any obligation under the Agreement
       (including this Exhibit 7) or any other agreement with JDCEC, and no
       grounds for termination of Dealer's appointment exist under any agreement
       between Dealer and JDCEC.

    c. Dealer's Chairman, Chief Executive Officer, President, Chief Financial
       Officer, and Chief Operating Officer, the Executive Vice-President of
       Dealer's Construction Equipment Division, and the Regional
       Vice-Presidents for Dealer's Construction Equipment SBUs ("CESBUs") are
       acceptable to JDCEC in its sole discretion, and will continue to manage
       Dealer after the death of Offutt or be replaced by persons acceptable to
       JDCEC.

    JDCEC may at its sole discretion evaluate compliance with the conditions set
    forth in this Section 4.

5.  a.  Dealer shall request and obtain written approval from JDCEC prior to
        discussing (directly or indirectly) with any JDCEC Dealer a possible
        purchase of a dealership that would add to Dealer's AOR or constitute a
        new AOR for Dealer or an Affiliate. If Dealer fails to request such
        approval from JDCEC, Dealer agrees to indemnify and hold JDCEC harmless
        from and against any claim (including costs and reasonable attorney's
        fees) asserted by such other JDCEC dealer against JDCEC by reason of
        JDCEC's failure to approve the acquisition of such other JDCEC dealer by
        Dealer. JDCEC, in its sole discretion, shall have the right to reject
        such a request. JDCEC will consider, in its sole discretion, requests
        made by Dealer for the assignment of additional AORs to Dealer (not to
        exceed the Market Potential Limitation, as defined in Section 5 .b.
        below). JDCEC, in its sole discretion, shall have the right to
        disapprove additions to Dealer's AOR and to refuse assignment of a new
        AOR to Dealer or an Affiliate. In exercising its sole discretion under
        this Agreement JDCEC may consider its own business interests and the
        interests of other dealers without considering the interests of Dealer
        or any other particular dealer. JDCEC shall have no liability to Dealer
        for the exercise of its discretion in this manner, and no trier of fact
        in any judicial or arbitration proceeding shall substitute its judgment
        for the business judgment so exercised by JDCEC. In the event that
        Dealer, at the level of division management staff or higher, receives
        any inquiries concerning the purchase of a JDCEC dealership that would
        add to Dealer's

                                                                               5
<PAGE>

        AOR or constitute a new AOR for Dealer or an Affiliate, Dealer shall
        notify JDCEC within five business days and shall obtain written approval
        from JDCEC before having any further contact with the prospective seller
        or its agent concerning the purchase of a JDCEC dealership, other than
        to notify the prospective seller or its agent that Dealer must contact
        JDCEC before having further discussions.

    b.  The aggregate market potential for JDCEC's products in the AORs
        presently and hereafter assigned by JDCEC to Dealer in North America,
        with the market potential of each such AOR measured as of the 12-month
        period ending January 1997, will not exceed 7,169 units (9.9% of the
        total market potential for JDCEC's products in North America, with such
        total market potential measured as of the 12-month period ending January
        1997) or such other limitation, but not less than 9.9%, as determined by
        JDCEC in its sole discretion (the "Market Potential Limitation").

6.   Without prior consent of JDCEC, Dealer will not guarantee or otherwise be
     liable for any debt or other obligation of any Affiliate, provided,
     however, that this sentence shall not apply to financing arrangements
     arising from the procurement, from Dealer's dealerships by an Affiliate, of
     goods and services offered to the public by Dealer in the ordinary course
     of Dealer's business. In order to submit a request to JDCEC, Dealer must
     make such a request in writing from the Manager, Finance Operations at
     JDCEC's offices in Moline, IL. A response shall be provided by JDCEC within
     20 business days of receipt of a written request. All transactions between
     Dealer and Affiliates will be conducted on an arms-length basis, on
     reasonable commercial terms. Dealer will maintain its assets separately
     from the assets of Affiliates, and Dealer's assets (and records relating
     thereto) will not be commingled with those of any Affiliate. Furthermore,
     Dealer will maintain clear records of its bank accounts and credit
     facilities in order clearly identify the cash assets of Dealer and
     Affiliates.

7.   a.  The provisions of this Section 7.a. shall apply in lieu Section 1.f.
         of the Agreement.

         (1)    Dealer will maintain its Equity at a level sufficient to achieve
                Dealer's commitments under the Agreement, which shall not be
                less than the Minimum

                                                                               6
<PAGE>

                Equity Level. As of the date of JDCEC's acceptance of the
                Agreement, the Minimum Equity Level is 25% and the Equity
                Performance Standard is 30%. In addition, Dealer's parent, RDO,
                shall maintain a Minimum Equity Level of 25%.

         (2)    Neither Dealer nor RDO will pay any dividends, effect any stock
                repurchase, repay or otherwise discharge its indebtedness for
                any Subordinated Loans , or make any other distributions to
                owners if Dealer's Equity is below 30% or would fall below 30%
                as a result of such action or if RDO's Equity is below 25% or
                would fall below 25% as a result of such action.

         (3)    Dealer will not make any acquisitions or initiate new business
                activities if:

             (a) Dealer's Equity (including Subordinated Loans as defined in
                 7.(a)(3)(c) below) is less than the Equity Performance
                 Standard or would fall below the Equity Performance Standard
                 as a result of such action or if RDO's Equity is less than 25%
                 or would fall below 25% as a result of such action; or,

             (b) Dealer's Tangible Net Worth Ratio (defined as stockholders'
                 equity plus Subordinated Loans less goodwill, related-party
                 receivables, leasehold improvements, purchased customer lists,
                 and other intangibles, divided by total assets less goodwill,
                 related-party receivables, leasehold improvements, purchased
                 customer lists, and other intangibles) is less than 20% or
                 RDO's Tangible Net Worth Ratio is less than 20%.

             (c) Subordinated Loans are defined as loans that are subordinated
                 in priority to any and all indebtedness of Dealer to Deere and
                 subject to the terms and conditions of a Loan Subordination
                 Agreement in a form acceptable to JDCEC, in its sole
                 discretion.

                As of the date of JDCEC's acceptance of the Agreement, the
                Equity Performance Standard is 30%.

                                                                               7
<PAGE>

     b.  The provisions of this Section 7.b. shall apply In lieu Section 2.c.ii.
         of the Agreement.

         JDCEC may terminate Dealer's appointment, upon at least 120 days' prior
         written notice to Dealer, if JDCEC determines that Dealer's or RDO's
         Equity is less than the minimum required under Section 7.a.(1) of this
         Exhibit 7. JDCEC will give Dealer written notice of termination under
         this Section 7.b. within 45 days after the financial statements on
         which JDCEC's determination is based are received at JDCEC's Finance
         Department offices in Moline, Illinois. If Dealer provided the
         financial statements to JDCEC within the time required by Section 8.a.
         of this Exhibit 7, Dealer or RDO will have the right to increase its
         Equity to the required minimum level during the 120-day notice period,
         through the addition of new capital in a form acceptable to JDCEC; if
         Dealer or RDO does increase its Equity to the required minimum level in
         this manner within such 120-day period, the notice of termination given
         under this Section 7.b. shall become null and void. JDCEC's prior
         written approval will be required if Dealer or RDO wishes to increase
         its Equity to the required minimum level in whole or in part by any
         other means, including without limitation reducing asset levels or
         through earnings retained during the 120-day notice period. If Dealer
         and/or RDO do not provide the financial statements involved to JDCEC
         within the time required by Section 8.a., Dealer will be deemed to have
         waived any right to increase its Equity or RDO's Equity to the required
         minimum level. If JDCEC shall not give written notice within the time
         required by this section 7(b), JDCEC shall be deemed to have waived any
         right to terminate Dealer appointment under this clause for the time
         period reported.

8.   a.  Effective with Dealer's fiscal quarter ending January 31, 2001, and
         thereafter, Dealer will provide to JDCEC's Finance Department in
         Moline, a complete set of consolidated financial statements of RDO,
         Dealer and its subsidiaries, along with a supplementary information
         section. This supplementary information section is to be comprised of a
         Consolidating Balance Sheet, Consolidating Statement of Income, and
         Consolidating Statement of Cash Flows. This section is to contain, at a
         minimum, separate financial information for Dealer, for each one of
         Dealer's and RDO's subsidiaries, as well as an inter-company
         elimination column and financial information for the consolidated group

                                                                               8
<PAGE>

         of Dealer, RDO and their subsidiaries. These consolidating financial
         statements are to be prepared in accordance with generally accepted
         accounting principles.

         For each fiscal quarter-end that coincides with Dealer's and RDO's
         fiscal year-end, the consolidated financial statements will be audited
         by Dealer's and RDO's independent certified public accountants, and the
         supplementary information section will be subjected to the auditing
         procedures of Dealer's and RDO's independent auditors; these materials
         will be submitted to JDCEC's Finance Department within 100 days after
         Dealer's and RDO's fiscal year-end. For each other fiscal quarter-end,
         the consolidated financial statements and supplementary information
         section will be prepared by RDO's Chief Financial Officer in
         conjunction with the preparation of RDO's quarterly report to the
         Securities and Exchange Commission, but need not be independently
         audited; these materials will be submitted to JDCEC's Finance
         Department within 15 days after Dealer files its Form 10-Q for the
         quarter with the Securities and Exchange Commission.

     b.  In lieu of the definition set forth in the "Defined Terms" section of
         the Agreement, "Equity" shall, for purposes of the Agreement (including
         this Exhibit 7), mean the Dealer's or RDO's equity-to assets
         percentage, determined by JDCEC based upon the most recent fiscal
         quarter-end financial statements submitted to JDCEC pursuant to Section
         8. a. of this Exhibit 7, with adjustments, if any, as provided in the
         Terms Schedule, and calculated as of the end of the fiscal quarter
         covered by such financial statements. Whenever referred to in this
         Exhibit 7, Dealer's or RDO's Tangible Net Worth Ratio is as determined
         by JDCEC, in accordance with the description set forth in Section 7.a.
         of this Exhibit 7, based upon the most recent fiscal quarter-end
         financial statements submitted to JDCEC pursuant to Section 8.a. of
         this Exhibit 7, and calculated as of the end of the fiscal quarter
         covered by such financial statements.

9.       Notwithstanding Section 11 of the Agreement, any Key Person or
         Affiliate may refuse to execute a guaranty if requested to do so by
         JDCEC, provided, however, that JDCEC may terminate Dealer's
         appointment, effective immediately, by giving written notice of
         termination to Dealer at any time after such a refusal. However, JDCEC
         cannot

                                                                               9
<PAGE>

         terminate Dealer's appointment under the provisions of this Section 9,
         following a refusal by a Key Person or Affiliate to execute a guaranty
         requested by JDCEC, if all of the following conditions are satisfied
         when JDCEC's request is made:

         a.       Dealer's Equity is equal to or exceeds 30%and RDO's Equity is
                  equal to or exceeds 25%;

         b.       Dealer's Tangible Net Worth Ratio is equal to or exceeds 25%
                  and RDO's Tangible Net Worth Ratio is equal to or exceeds 20%.

          A Key Person or Affiliate requested by JDCEC to execute a guaranty
          shall have the right to provide a letter of credit, in favor of JDCEC
          and such other beneficiaries as JDCEC may direct, in lieu of such
          guaranty, provided such letter of credit is issued by a bank
          satisfactory to JDCEC, in a form satisfactory to JDCEC, and for an
          amount satisfactory to JDCEC in its sole discretion, provided that
          such amount shall not be greater than the amount necessary to remedy
          any noncompliance with the condition set forth in part a. of this
          Section 9, and provided further that JDCEC cannot terminate Dealer's
          appointment under the provisions of this Section 9, following a
          refusal by a Key Person or Affiliate to provide a letter of credit in
          lieu of a guaranty requested by JDCEC, if all of the conditions set
          forth in parts a., and b. of this Section 9. are satisfied when
          JDCEC's request is made.

10.  Any rent-to-rent business operated by Dealer or an Affiliate at a location
     outside Dealer's AOR will not utilize any JDCEC products at that location
     other than such JDCEC products as it may acquire from the JDCEC dealer
     whose AOR includes such location.

11.  Dealer, Offutt, and JDCEC will maintain the confidentiality of one
     another's confidential information which is not otherwise available to the
     public, unless and then only to the extent disclosure is required by law
     (including without limitation applicable securities laws and regulations)
     or as a result of legal process; provided however, that dealer may disclose
     such information to attorneys, accountants or other professionals who have
     a need to know and first agree to make no further disclosure. Nothing in
     this Section 11. shall prohibit the

                                                                              10
<PAGE>

     exchange of information between Dealer and Offutt, or the exchange of
     information between JDCEC and JDCEC's Affiliates other than Nortrax or
     any dealer in which JDCEC or its affiliates have an ownership interest.

12.  Notwithstanding Section 1.b.ii. of the Agreement, it shall not be a
     noncompliance with that Section, or grounds for termination of Dealer's
     appointment under Section 2.c.iv.c. of the Agreement, if Dealer continues
     the distribution in Minnesota and North Dakota, in a business separated, in
     a manner acceptable to JDCEC, from Dealer's JDCEC dealership locations, of
     the Vermeer product line carried by Dealer in Minnesota and North Dakota as
     of 1 September 1999, if in the future JDCEC offers a product that competes
     with a Vermeer product carried by Dealer in Minnesota and North Dakota on 1
     September 1999.

13.  JDCEC may terminate Dealer's appointment, effective immediately, by giving
     written notice to Dealer at any time after any noncompliance with Section
     3., 5.a. (in the event that Dealer obtains a letter of intent or written
     agreement to acquire another JDCEC dealer without prior written approval
     from JDCEC), 7.a.(1), 7.a.(2), 7.a.(3), 8.a., or 10. of this Exhibit 7.

14.  Any grounds for termination of Dealer's appointment under the Agreement
     (including this Exhibit 7) or any other agreement between Dealer and JDCEC
     will be sufficient grounds for termination for the purposes of any
     applicable statute requiring grounds (or certain grounds) or good cause for
     termination, regardless of the terminology used in such statute to describe
     the grounds or good cause required thereunder.

15.  Except as otherwise expressly stated in this Exhibit 7, the termination
     rights provided for JDCEC in this Exhibit 7 are in addition to, and shall
     in no way affect or limit, the termination rights of JDCEC under the
     Agreement.

16.  In lieu of Dealer's right of termination under Section 2.b. of the
     Agreement, Dealer may terminate its appointment for any reason upon 120
     days prior written notice to JDCEC.

                                                                              11
<PAGE>

17.  JDCEC shall have input with respect to the selection and removal of
     Dealer's Chairman, Chief Executive Officer, President, Chief Financial
     Officer, and Chief Operating Officer, the Executive Vice-President of
     Dealer's Construction Equipment Division, and the Regional Vice-Presidents
     for Dealer's CESBUs.

18.  Without limiting the generality of Section 23 of the Agreement, the
     agreements dated 1 October 1996 and 5 November 1996 between Dealer, JDCEC
     and John Deere Company - A Division of Deere & Company (the "1996
     Agreements"), as they relate to the relationship between Dealer and JDCEC,
     will not survive the signing of the Agreement. However, nothing in the
     Agreement (including this Exhibit 7) shall affect the 1996 Agreements as
     they relate to the relationship between Dealer and John Deere Company - A
     Division of Deere & Company.

19.  The parties, their Affiliates and other persons listed in section 5 of the
     Agreement may raise in mediation or arbitration in connection with a
     Dispute hereunder, (a) any claim or other right they may have under any
     substantive federal law and (b) to the extent that application of Illinois
     substantive law would be prohibited by in violation of, or contrary to the
     applicable substantive law of another state, any claim or other right they
     may have under the applicable substantive law of such other state.

20.  a.  John Deere Construction Equipment Dealer Security Agreement between
         JDCEC and Dealer.

     b.  John Deere Construction Equipment Sales and Service Center Agreements
         between JDCEC and Dealer for the locations listed in Exhibit 3 to the
         Agreement, with the exception of the main location in Burnsville, MN

     c.  John Deere Construction Equipment Dealer Finance Agreement between
         JDCEC and Dealer.

     d.  John Deere Construction Equipment Dealer Leasing Agreement between
         Deere Credit, Inc. and Dealer.

                                                                              12
<PAGE>

     e.  John Deere Dealer Sign Identification Agreements between Deere Credit,
         Inc. and Dealer for the locations listed in Exhibit 3 to the Agreement.

     f.  John Deere Construction Equipment Dealer Assignment of Rental
         Agreements executed by Dealer.

     g.  Indemnification Agreement dated December 8, 1999 between JDCEC and
         Dealer.

     h.  Letter dated July 31, 1999 from David P. Werning to Paul Horn.

     i.  Letter dated 13 January 2000 pertaining to the Dealer's Montana AOR
         from Domenic G. Ruccolo to Paul Horn.

     j.  John Deere Construction Equipment Dealer Agreement between JDCEC and
         Dealer for Dealer's location in Irving, TX (the "Irving Agreement"),
         and the related agreements listed in the Irving Agreement's Exhibit 7.

     k.  John Deere Construction Equipment Dealer Agreement between JDCEC and
         Dealer for Dealer's location in Phoenix, AZ (the "Phoenix Agreement"),
         and the related agreements listed in the Phoenix Agreement's Exhibit 7.

     l.  John Deere Construction Equipment Company Special Products Dealer
         Agreement(s) dated 6 March, 2000.

                                                                              13
<PAGE>

RDO Construction Equipment Co.        John Deere Construction Equipment Company

By:  /s/ Ronald D. Offutt             By:  /s/ executed
    -----------------------------         --------------------------------------
its:  CEO                             its:  Manager, Finance Operations
    -----------------------------         --------------------------------------

RDO Equipment Co.

By:  /s/ Ronald D. Offutt
    -----------------------------
its:  CEO
    -----------------------------

/s/ Ronald D. Offutt
---------------------------------
Ronald D. Offutt

                                                                              14

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